The Short Stories We Tell Ourselves About Everyday Spending

The Short Stories We Tell Ourselves About Everyday Spending

By Carl Richards I love a good story. In fact, I used to tell myself at least one new story every time I opened my credit card statement. “Oh,” I’d say to myself, “I was so busy last month, it makes perfect sense that I ate out a dozen times. I’ll just eat out less next month.” Other months, I’d invent a fantastic story about why I thought it was a good idea to spend so much on new bike gear. “Man, I really needed a new jersey,” I’d say. “The other 10 were in the laundry, and I had a ride the next morning.” Whatever story I told, they all had one thing in common: They were fiction. All by themselves, numbers tell a simple, straightforward story. We spent X on Y. Our credit card statements are a work of nonfiction. But we have a habit of spinning them into wonderfully complex short stories. We can’t help ourselves. For some reason, we feel the urge to embellish. We didn’t just spend $28.32 on lunch one day. We were helping out a friend who was having a bad week. That’s a great story, but it doesn’t change the numbers. We still spent $28.32 on a single lunch. The big purchases often come with the biggest stories. Imagine the story we tell ourselves (and our spouses) about the $4,274 charge for a motorcycle. Of course, we really needed it. Besides, a motorcycle is far cheaper than the sports car our neighbor bought for his mid-life crisis. So why all the storytelling? Our narratives provide a comforting counterweight to a hard...
An Integrated Investment Plan Is Key

An Integrated Investment Plan Is Key

By Larry Swedroe Earlier this week, we looked at the importance of incorporating different types of risk—specifically, human capital risk—into an overall financial plan. Today I will focus on mortality and longevity risk, and using “tax alpha” strategies to improve the odds of achieving your financial goals. Mortality Risk For those families whose human capital makes up a substantial portion of their total assets, protecting that capital via the purchase of life insurance should be part of the overall financial plan. Life insurance is the perfect hedge for mortality risk because its return is 100% negatively correlated with the human capital asset. The younger the investor (the higher the human capital), the greater the need for life insurance. The amount of insurance required can be determined through what’s called a “needs analysis.” It can also be related to bequeathal motivations. It’s important to note that life insurance can be used for purposes other than to hedge mortality risk. For example, it may be the most effective way to pay estate taxes. It can also be useful in terms of business continuity risks. Thus, while the individual’s need for insurance to hedge the risks of human capital falls as he or she ages, the need for life insurance might actually increase. Longevity Risk Longevity risk is the risk that you will outlive the ability of your portfolio to support your desired lifestyle. This risk has increased for much of the population with the decline of defined benefit plans (which, like social security, pay out for a lifetime) in favor of defined contribution plans. Also, advances in medical science continue to expand...
Cybersecurity Insights: Protect Your Child’s Identity

Cybersecurity Insights: Protect Your Child’s Identity

By Jared Hoffman Protect the young person you love. Many under the age of 16 don’t have much money, a line of credit or even a job. Cybercriminals don’t care. They have made this group of youth their No. 1 target for identity theft. In this video, cybersecurity specialist for the BAM ALLIANCE Jared Hoffman explains why children are targeted, offers some warning signs that a child’s identity has been compromised, and shares preventative steps to keep this from happening to a young person you love. To view original article click here. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. © 2018, Lifeguard Wealth As always, if you have any questions please contact Lifeguard...
Why 17 Dead in a Duck Boat Accident Should Be an Estate Planning Gut Check for Us All

Why 17 Dead in a Duck Boat Accident Should Be an Estate Planning Gut Check for Us All

By Joe Delaney I just returned from a week’s vacation that culminated with my participating in the Trans Tahoe Relay swim across Lake Tahoe. This is my 16th year making the 12-mile swim. As I swam, I was awestruck by how blue the water was. With a cloudless sky above, the sun was shining rays of light all around me. It was a breathtaking sight. I also found myself reflecting on how tragedy can strike at any time, as it did recently in Branson, Missouri. 17 people died when an amphibious duck boat sank in a sudden, severe thunderstorm on July 18th. They were enjoying their vacation, just as I was. How prepared were they for what would happen to their families in the event of their death? How prepared am I? What about you? Do you have a plan for your estate before tragedy strikes? A GOOD PLAN IS DRAFTED, EXECUTED, FUNDED AND TESTED DRAFTED … Frequently, I have clients come to me with an estate plan drafted in beautiful binders (this also applies to business succession planning, a topic for another day). I make sure they know that’s a great start, because drafting a plan is the first step. EXECUTED … After I congratulate them on having a written plan, I sometimes have to criticize them about the dust that has settled on the binder. Ideas are not enough. You must execute the necessary estate planning documents. Create a will. Each state has intestacy laws that determine how your estate will be distributed after your death if you don’t make those decisions first. Don’t leave it up...