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There’s a FIRE spreading in the world of personal finance. FIRE is the acronym that stands for “Financial Independence, Retire Early.” It’s popular with Millennials (which Pew Research now defines as anyone born between 1981 and 1996, or ages 22 to 37 in 2018) who want to escape soul-sucking jobs that don’t reflect their values. The movement has added to the chorus of naysayers, who complain about the generation’s work ethic, but I believe that FIRE followers are doing what they should be doing: taking control of their financial lives.
Should I Buy an Annuity?
Michael in Illinois is considering a Qualified Longevity Annuity Contract. What are the pros and cons he should keep in mind when it comes to a QLAC? That's the discussion on the latest bonus call.
“Better Off” is sponsored by Betterment.
Have a money question? Email us here or call 855-411-JILL.
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CFP® Pro Tip of the Week - October 26, 2018: Retirement Plan
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Retirement Planning, ARMs and An Inside Account of the Financial Crisis
We opened the show with Ben from Houston who wanted to run his retirement plan by us. He’s got a variety of accounts, an adjustable rate mortgage and some college funds for the kids. As you’ll hear, this guy is a risk taker. Is he taking too much risk? What about that mortgage…should he pay it off? Or should he consider refinancing and locking in a long-term rate?
The rest of the hour was spent on emails. The good news is that we’re actually making some serious progress. We’re finally into the month of October. That’s the good news. The bad news is that next week is already November. A good problem to have!
In hour two we get the inside account of the financial crisis from Neil Barofsky, the former Inspector General of TARP (Troubled Asset Relief Program) and author of Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.
As you’ll hear, the discussion is basically a play-by-play of how the Treasury Department bungled the financial bailouts.
At the height of the financial crisis in 2008, Barofsky gave up his job as a prosecutor in the esteemed U.S. Attorney’s Office in New York City, where he had convicted drug kingpins, Wall Street executives, and perpetrators of mortgage fraud, to become the inspector general in charge of overseeing administration of the bailout money.
It’s fascinating to hear him talk about how from the onset, his efforts to protect against fraud and to hold big banks accountable for how they spent taxpayer money were met with outright hostility from Treasury officials in charge of the bailouts.
Barofsky offers an insider’s perspective on the mishandling of the $700 billion TARP bailout fund. There’s no holding back as he reveals the extreme lengths to which our government officials were willing to go in order to serve the interests of Wall Street firms at the expense of the broader public, and at the expense of effective financial reform.
Just like the book, this interview delivered an incredible account of Barofsky’s plunge into the political hot-seat of Washington, as well as a vital revelation of just how captured by Wall Street our political system is and why the too-big-to-fail banks have become even bigger and more dangerous in the wake of the crisis.
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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.
Estate Planning Done Right
Michael Jackson, Prince, Aretha Franklin…these three amazing and wildly successful musicians did not have a will. How could that be, you ask? Don’t they have agents, lawyers and accountants? Didn’t they know at some point they were going to die? “That’s irresponsible,” you say, but welcome to the real world, where even famous people can’t seem to get their acts together to address this difficult topic head on.
According to a Caring.com survey, only 42 percent of U.S. adults currently have estate planning documents, including a will. Shockingly, for those with children under the age of 18, the figure is even lower, with just 36 percent having an end-of-life plan in place. Of those who have not done any estate planning, 47 percent said, “I just haven’t gotten around to it.”
I get it…contemplating one’s death is not exactly high on anybody’s to-do list, but it is important that you overcome the anxieties associated with this emotional topic and take control.
So that’s why today we’re doing an estate planning bootcamp with Russell Fishkind, an attorney with Saul Ewing Arnstein & Lehr.
If you are ready to finally begin or revisit the planning process and seek the guidance of a qualified estate attorney (yes, you should pay up for a lawyer and not do it yourself), here are the basic documents to consider:
Will: A document that ensures that assets are passed to designated beneficiaries, in accordance with your wishes. In the drafting process, you name an executor, the person or institution that oversees the distribution of your assets. If you have minor children, you need to name a guardian for them.
Letter of Instruction: This may contain appointment of someone who will ensure for the proper disposition of your remains, creepy, but important if you are choosing a method that is contrary to your family’s tradition.
Power of Attorney: Appointment of someone to act as your agent in a variety of circumstances, like withdrawing money from a bank, responding to a tax inquiry or making a trade.
Health Care Proxy: Appointment of someone to make healthcare decisions on your behalf if you lose the ability to do so.
Trusts: Revocable (changeable) or irrevocable (not-changeable) trusts may be useful, depending on family and tax situations. For 2018, the first $11.2 million of an estate is exempt from federal estate taxes. If an estate is above the threshold (or twice that for married couples), you may want to consider a trust.
“Better Off” is sponsored by Betterment.
Have a money question? Email us here or call 855-411-JILL.
We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!
Connect with me at these places for all my content:
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Investing Extra Money
You just sold a piece of real estate and walked away with 75 grand. What should you do with it? Is paying down another mortgage the best option? That's the question from John in Houston on the latest BONUS call.
“Better Off” is sponsored by Betterment.
Have a money question? Email us here or call 855-411-JILL.
We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!
Connect with me at these places for all my content:
https://twitter.com/jillonmoney
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CFP® Pro Tip of the Week - October 19, 2018: Estate Planning
Have a money question? Email me here.
Asset Allocation, Annuities and Wisdom at Work
First up this week was Steve from Seattle. Hearing the stories of others, Steve is starting to wonder if his current asset allocation is a bit too risky as he prepares for retirement in the near future.
Next was Ralph from the Bay Area. Also approaching retirement, Ralph is debating whether or not he should add an annuity to his portfolio. Good idea or bad?
When I first walked through the doors of CBS News several years ago, one thing was immediately clear: it’s an interesting mix of the old school and the new school. On one hand you have countless employees who have been in the building for 30 plus years. On the other hand, you have fresh college graduates looking to make it in journalism.
And yet somehow we all come together and make it work. One big team with a crazy assortment of players.
And according to our latest guest, Chip Conley, it’s these well balanced and diverse teams that hold the keys to success. Hence his latest book, Wisdom at Work: The Making of a Modern Elder.
At age 52, after selling the company he founded and ran as CEO for 24 years, Conley was looking at an open horizon in midlife. Then he received a call from the young founders of Airbnb, asking him to help grow their disruptive start-up into a global hospitality giant.
He had the industry experience, but Conley was lacking in the digital fluency of his 20-something colleagues. He didn't write code, or have an Uber or Lyft app on his phone, was twice the age of the average Airbnb employee, and would be reporting to a CEO young enough to be his son.
Conley quickly discovered that while he'd been hired as a teacher and mentor, he was also in many ways a student and intern. What emerged is the secret to thriving as a mid-life worker: learning to marry wisdom and experience with curiosity, a beginner's mind, and a willingness to evolve, all hallmarks of the "Modern Elder."
In a world that places emphasis on the new, bright, and shiny, many of us are left feeling invisible, undervalued, and threatened by the "digital natives" nipping at our heels. But Conley argues that experience is on the brink of a comeback.
At a time when power is shifting younger, companies are finally waking up to the value of the humility, emotional intelligence, and wisdom that come with age. And while digital skills might have only the shelf life of the latest fad or gadget, the human skills that mid-career workers possess - like good judgment, specialized knowledge, and the ability to collaborate and coach - never expire.
Have a money question? Email me here.
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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.
We STILL Avoid Estate Planning
Michael Jackson, Prince, Aretha Franklin…these three amazing and wildly successful musicians did not have a will. How could that be, you ask? Don’t they have agents, lawyers and accountants? Didn’t they know at some point they were going to die? “That’s irresponsible,” you say, but welcome to the real world, where even famous people can’t seem to get their acts together to address this difficult topic head on.
Active vs Passive Investing
By now you probably know that I consider myself a passive investor. That said, is there ever a time when it makes sense to be an active investor so you can squeeze out a greater percentage on that return? That's the question from Ben in Indiana on the latest BONUS call.
“Better Off” is sponsored by Betterment.
Have a money question? Email us here or call 855-411-JILL.
We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!
Connect with me at these places for all my content:
https://twitter.com/jillonmoney
https://www.facebook.com/JillonMoney
https://www.instagram.com/jillonmoney/
https://www.linkedin.com/in/jillonmoney/