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Videos: What Was Considered Good Financial Advice In the 1940s and 50s?

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Put this in the category of “not so current events.” Something about my impending birthday has me getting nostalgic for the “good ole days.” I stumbled across this trove of videos from the 1940s which would have been the financial advice that my teenage Mom would have been given. Here are some of the highlights that I thought you would enjoy (with questions):

  • Keeping a Budget: Your Thrift Habits (it’s 10 minutes long, but the first five minutes will give you plenty to discuss):
    • How was Ralph able to buy his camera?
    • What was the budget method that worked for Ralph (full disclosure: this was how I kept track of my newspaper route revenues)?  How did he track his progress toward saving for his camera?
    • Is it easy to make a budget work? Why or why not?
    • What are Jack’s sources of income?
    • What are Jack’s regular expenses? irregular expenses?
    • Why did Jack find it difficult to save?
    • What would be on your list of “Watch these expenses?”
    • Identify an item that you would like to save for and break it down to how much you need to save per week.
By |January 23rd, 2017|Budgeting, Checking Accounts, Investing, Savings, Stocks, Video Resource|

NGPF Podcast: Tim Talks to Author, Columnist and Personal Finance Advocate Beth Kobliner

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I had a great conversation with Beth Kobliner recently. Beth has an incredible personal finance focused CV. She’s been a columnist at Money Magazine, authored one (and soon to be two) New York Times Bestsellers (Get a Financial Life: Personal Finance in Your Twenties and Thirties), served on the President’s Advisory Council on Financial Capability, and gave financial advice to Elmo on Sesame Street (and a whole lot more too)! In this NGPF podcast, Beth shares the money lessons she learned growing up in Queens, New York as well as the motivation for her latest book, Make Your Kid a Money Genius, to be released in February. You will benefit from Beth’s insights on how to invest, use credit cards wisely and a simple test to control those impulsive purchases. Parents will find Beth’s new book a godsend in describing developmentally appropriate actions to build that financial decision-making muscle that your children need to thrive in this financially complex world. Enjoy!

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Question: Do Active Investment Managers Buy Their Own Funds?

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Incentives matter when it comes to financial products. Hat tip to Meb Faber whose podcast I was listening to earlier today and reminded me about this 2008 research report titled “Do Managers Eat Their Own Cooking?” from Russ Kinnel at Morningstar. As the title suggests, Kinnel analyzed whether mutual fund managers actually invest their money in their own funds. Recall that the promise of active management, and the reason that investors pay fees of around 1%, is that they can beat the market (but, alas, almost none do!). Recall also that getting the market return through an S&P500 index fund costs about 0.10-0.15%. Ok, so active managers charge high fees which makes it difficult for them to beat the market. Guess what, someone has figured this out, and it’s not who you might expect…it’s the actual managers running the funds. How do I know? Well, Kinnel found the following:

“At U.S.- stock funds, 47% report no manager ownership. And it gets worse from there. Fully 61% of foreign-stock funds have no ownership, 66% of taxable bond funds have no ownership, 71% of balanced funds put up goose eggs, and

By |January 11th, 2017|Index Funds, Investing, Mutual Funds, Research, Stocks|

NGPF Podcast: Tim Talks to Allan Roth, Author, Columnist and Financial Advisor


Thanks to Allan Roth for recently joining the NGPF podcast. I got to know Allan a few years ago when I needed an advisor to help me “tune-up” my portfolio. I appreciated his candor, his analytical chops, his thoughts on asset allocation, his laser focus on fees and his willingness to challenge some of my assumptions. One of his best suggestions was that I create an investment policy statement which serves as a guide to my asset allocation during those turbulent market conditions that try mens’ (and womens’) souls. He wrote a provocative book that I recommend, How A Second Grader Beats Wall Street, which describes the simple strategies needed to be a successful investor (you will find out exactly who this wise second grader is during the podcast). Listen to this podcast and you’ll walk away with some ideas to make you a better investor. Enjoy!

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Dow 20,000: Does It Matter?

Investing commentators are breathless as the Dow Jones Industrial Average closes in on the 20,000 mark. Here’s a smattering of the recent clickbait, I mean, headlines (12.5 million results on Google!):

The Dow closed at 19,963.80 on Friday, January 6th. Ok, let’s just say there is a very high likelihood it crosses that magical 20,000 mark this week. I don’t think I am going out on a limb in predicting that (and you know how much I hate prognosticators!). So, back to the original question, does it matter? 

Question: Who’s Saving For Retirement?

I had the Honorable John Ninfo on my podcast recently who described his “Scared Straight approach” to teaching young people about the perils of credit. He saw the consequences in the decades he served as a Bankruptcy Court judge in the state of New York. After looking at this infographic from the WSJ and the accompanying article, the overwhelming evidence is that we should be employing similar scare tactics to the topic of retirement planning because we better hope that the next generation is better prepared for taking on this responsibility:

Question: What Company Was Strongest Performer in the S&P500 In 2016?

Choices:

A. Amazon

B. Google

C. Tesla

D. Nvidia

Answer: Drumroll please…a company most have never heard of, D. Nvidia!

From Financial Times:

By |January 3rd, 2017|Article, Current Events, Investing, Question of the Day, Research, Stocks|

We Have Heard This Tune Before…

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Headline from last week’s Wall Street Journal: Merrill Brokers Get Ultimatum: Refer New Customers or Face A Pay Cut. Huh? Didn’t we just read about another financial services firm creating phony customer accounts because of cross-selling pressures (here and here)? The more things change, the more they stay the same.  Read through to the end for ideas on how to empower your students to not fall into this cross-selling trap of being pushed a product that may not be in their best interests.

More from the WSJ:

By |December 11th, 2016|Behavioral Finance, Current Events, Ethics, Investing|