The Ring of Fire – Part 2
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“Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow, and the dollar would inevitably decline.”

Marshmallows and Investing?
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Parents take note: Research on delayed gratification shows connections from children through adulthood.

Assuming a Will is All You Need–Mistake #2
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No matter your age, in addition to a will, you need two additional documents.

Not Having an Estate Plan–Mistake #1
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The worst thing you can do is to do nothing at all and assume everything will pan out in the end. No matter how much (or how little) money you have, you need at least a simple will.

How Much Should I Have Saved Toward Retirement?
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Measuring progress regularly on the path toward retirement is critical. Fall too far behind, and you risk not being able to save enough to catch up. There is no downside to arriving early.

How Much Should I Save Toward Retirement If I’m Starting Late?
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Knowing how much you should save for retirement is critical. But what if you are late getting started? The longer you delay, the shorter the time that compound interest can do its magic on your savings.

Suddenly Wealthy
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Studies show that onetime windfalls can actually impoverish you. They make you feel rich, which inevitably leads to overspending. But wealth is what you save, not what you spend.

A Progressive Tax Code is Economically Destructive
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Most Americans assume a progressive tax code is needed to promote equality and remove some of the burden of other taxes on those with the lowest income. But the progressive nature of the tax code changes behavior in many ways.

How Much Should I Save for Retirement?
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You should save 15% of your take-home pay for retirement over your working career. As your situation varies, you must adjust your safe savings rate.

How keeping your money “safe” might lose half of it in 16 years.
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“Anyone who’s bought gas, paid a medical bill or sent a child off to college recently knows that the Consumer Price Index doesn’t tell the whole story of inflation.”

Smart Tax Planning for the Gap Years
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Many families seek financial planning advice specifically for retirement. But if they wait too long, they miss an important tax-planning opportunity. A great strategy is to take advantage of the time between retirement and Social Security at age 70, the so-called gap years.

Squirrel Away Money While You Can
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Franco Modigliani won the Nobel Prize for a simple technique that squirrels know intuitively from birth. You have to squirrel away some nuts during times of plenty so you can survive during times of scarcity.

What Equality Should We Seek in Society?
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Studies suggest that brains may be wired with either a utopian or a tragic view of the world, corresponding roughly to liberals and conservatives. We continue to talk past each other in political debates.

What Is Comprehensive Wealth Management?
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Advisors who offer comprehensive wealth management are like financial concierges. Their only goal is to meet your needs. If you ask for fresh strawberries, they try to find them for you.

Tax Efficient Investing
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It can be useful to maintain a grid where all of the available asset classes are arranged in order, by tax efficiency and potential return based on time horizon, so clients can clearly see when and where tax-deferral can offer the greatest benefits.

A fiduciary standard is good, old-fashioned common sense
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“Unfortunately, some are also misleading the public by saying that a fiduciary standard would prevent the delivery of financial services to middle-American Main Street investors.”

How Do Financial Advisors Earn Their Fee?
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Investment fees are generally about 1% of assets under management and drop as assets rise. The critical question to ask is “Where do financial advisors add value that might exceed the 1% fee they charge?”

What is an Accredited Investment Fiduciary?
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Fi360 promotes a culture of fiduciary responsibility and improves the decision making processes of investment fiduciaries and other financial service providers.

Fee-Only Financial Planner: What’s the Difference?
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Fee-only financial planners are registered investment advisors with a fiduciary responsibility to act in their clients’ best interest. They do not accept any fees or compensation based on product sales.

Securing Your Credit
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A U.S. Public Interest Research Group report in 2004 found that one in four credit reports have serious errors that could significantly lower your chances of being approved.

Investing in gold and silver coins
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A large number of people in the United States are worried about our profligate spending and the resulting devaluation of our currency. They are worried about politics and socialism and the economy.

Using Dynamic Asset Allocation to Boost Returns
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Think of static asset allocation as where to set your sails and dynamic asset allocation as a way to keep your balance as your boat glides and sometimes bounces through the waves.

The Shiller Ten-Year P/E Ratio
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What we would really like to measure are the changes in price (P) that cause a company with a good long-term track record to look relatively cheap. Economist Robert Shiller created just such a measurement.

Style Boxes and the Efficient Frontier
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The Marotta allocation method is a proportionally weighted allocation based on the square of each Sharpe ratio. Squaring the Sharpe ratio drastically reduces asset categories in proportion to their distance from the efficient frontier.

Asset Allocation and the Efficient Frontier
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Crafting portfolio asset allocations is a combination of art and engineering. Just as a blending of colors can produce cerulean, so a blending of indexes produces a unique shade of risk and return.

The Efficient Frontier
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The efficient frontier measures all investments on a scale of risk and return. Risk is commonly placed on the x-axis, and return is placed on the y-axis.

Value: The Third Factor of Investing
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A stock’s valuation is measured on a continuum from “value” to “growth” In broad strokes, value stocks are cheap and growth stocks are expensive.

Size: The Second Factor of Investing
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The second factor of investing is size as measured by a stock’s total capitalization. Over time small cap will outperform large cap even after factoring out measurements of volatility.

CAPM: The First Factor of Investing
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Modeling investment returns seeks to find an equation to predict your expected returns as much as possible. The simplest equation for the markets would be “Return equals 11.71%.” This has been the average return from 1927 through 2010, the zero factor model.

Before You Say “I Do”: Money & Marriage Exercise 1
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Couples that fail to prepare for a shared money maturity will likely experience longer and sharper growing pains.

Gain $152,000 by Smart Filing for Social Security
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Social Security benefits can represent a big stack of cash. A typical monthly benefit of $2,200 has a present value well over $500,000. Consider all your Social Security options carefully to avoid making a costly mistake.

Roth IRA Conversion 2012: Are You a Good Candidate?
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You may be a good candidate for a Roth conversion in 2012 if you can answer “yes” to any of these statements.

Freedom Investing 2012
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Now at year end, I will review how freedom investing fared in 2011 and in the decade since 2002.

Indexing Works
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“Many investors think active managers can shift out of stocks in time to stem losses in bear markets. Not true.”

Compute Your Net Worth Once a Year – 2012
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Computing your net worth annually is like taking a sextant reading to chart your course toward financial security. Net worth gives you a snapshot of how much money would be left if you converted everything you owned into cash and paid off all your debts.

Seven Financial Resolutions for the New Year 2011-2012
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Financial resolutions usually don’t even last until the end of January. Making a permanent change in our behavior requires both time and a steely resolve. We can only develop financial character one action at a time. Here are seven practices to take you from pauper to prince or princess if you add one each year.

Rich Dad, Empowered Daughter
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With impulses reeling, it is easy to find a gift that children will appreciate but difficult to find one that they will love to have. The gifts that I loved to have and the presents that I still cherish are the vocational gifts that my parents purchased for me.

A Wealth of Satisfaction
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True life planning begins when you realize you are unique. There will never be another you in the history of the universe. Your calling is yours alone. Understanding yourself is the first step in managing your financial affairs to support your life plan.

Investing Mostly in Bonds Means a Lower Lifestyle in Retirement
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In the midst of this turmoil, especially after this past summer’s sharp drop, many investors wonder if they should put all of their investments into something safe and avoid the markets altogether.

Is My House an Investment?
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Just because something costs a lot doesn’t mean it is an investment. An investment is something that pays you money.

Rich Dad’s Money, Rich Daughter’s Money
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If my parents had been in control of the purse strings, I would not have learned the value of money. To a child, “My Money” is valuable where “Your Money” is worthless.

Rich Dad, Patient Daughter
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With money in my pocket and impulse in my veins, I used to cherish our weekly trips to Toys ‘R’ Us. However, it was on the Barbie aisle under my parents’ guidance that I became a money-savvy kid with the millionaire mindset.

Rich Dad, Working Daughter
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When it comes to teaching financial lessons, setting a good parental example is important, but actually giving the child some experience making wise financial decision is essential.

Stop Telling Yourself These Three Financial Lies
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Most of us rationalize why we can’t get our finances together right now. Many Americans prolong these excuses during their entire working careers. Here are three lies you must stop telling yourself in order to build a solid financial foundation.

Rich Dad, Rich Daughter
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“Small changes over a long period of time make all the difference.” Learn how to teach financial wisdom to your children with Megan Marotta’s series, “Rich Dad, Rich Daughter.”

Can financial advisers be trusted?
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Not every investment consultant has your interests as the top priority, or even the necessary credentials. Here’s how to find the right type of adviser.

How to Maximize Long-Term Returns
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I recently read two articles that provided insight on how investors should respond to a market downturn.

Continue to Avoid the ‘Ring of Fire’ Countries
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Americans seem to be divided on the importance of raising the U.S. debt ceiling. Regardless of your personal politics, avoid investing in countries that cavalierly allow their debt and deficit to balloon.

Aligning Your Money and Your Values
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The old saying is true: Money can’t buy happiness. Families earning $25,000 a year overspend trying to keep up with those making $50,000, who in turn attempt to live like those making $100,000. For many families the lure of consumerism wins out over qualities like foresight and patience that saving requires.

Ten Questions to Ask a Financial Advisor
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Someone asked me what disclosures I would require for financial advisors. I’ve written these principles in a yes-or-no format and reworded the questions. “Yes” is the best answer and “no” means you should seek more information or not consider that advisor at all. Although answering affirmatively to all 10 questions would be my first screen in selecting a financial advisor, it still does not guarantee the person has the competence necessary to offer comprehensive wealth management.

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