Archive for 'Financial Planning' Category

By Peter Andrew

Are you an "independent"? I'm not asking if you're politically unaligned. I want to know whether you "turn to freelancing, contract work, consulting, temporary assignments or on-call work regularly each week for income, opportunity and satisfaction," which is a definition of the word used by the MBO Partners State of Independence study, 2015 edition..

That document contains some astonishing statistics:

• In 2015, there were 30.2 million Americans over 21 years of age who fit that description, of whom 17.8 million are full-time independents and 12.4 million are part-timers. Another 11.9 million take on those sorts of assignments occasionally.
• Together, they generated revenues topping $1.15 trillion. That's nearly 7 percent of U.S. gross domestic product.
• The number of independents working in America is expected to hit 37.9 million by 2020.
• Of those who work this way, 30 percent are Millennials (defined in this study as those age 21-35 years), up from 12 percent just four years earlier.

The "gig" economy

The rise of the gig economy (so called, because each assignment lasts a short time, like a musician giving a one-night performance) may or may not be transforming how we work. Some argue there have always been millions of freelancers and contract workers, and the fact they're now booked online rather than through Yellow Pages and brick-and-mortar agencies isn't such a big deal. But new companies like cab facilitator Uber, butler service Alfred, home cleaning provider Handy and freelance resource eLance might make real change in many lives.

If it does, it's likely to bring challenges as well as Read the full article »

By Peter Andrew

The very worst thing about getting older is that your family and friends do too. And that, naturally enough, means they begin to die in increasing numbers. I lost my best friend three months ago. And, over the last decade, both my parents have died along with a score of friends who were very dear to me.

Nothing makes up for such losses, but occasionally people remember you in their wills. Usually, you get some small memento, perhaps something you once admired. Rarely, a financial legacy comes your way, though usually only from close family members. Suppose you one day get a four- five- or six-figure check from a loved one's estate. What should you do with it?

By Peter Andrew

To my late maternal grandparents, the Great Depression wasn't history. They lived through it. And, although they fared better than most during that difficult time, they were from a generation that learned to value financial security above almost anything else. I can still remember their taking me, age maybe six or seven years, to open my first savings account. My dad's much older brother had a similar attitude, and made it his unbreakable rule never to save less than 50 percent (seriously!) of his income every month. Clearly the saving habit flows through my blood.

Nature and nurture

However, in what may be a triumph (or more likely disaster) of nurture over nature, saving has played little part in my life. Should I blame my parents? They were fairly affluent and never experienced much hardship or financial insecurity, so they never saved much themselves -- at least until later in life. And they never particularly encouraged me to do so either.

No, it's not mom and dad's fault: They lived their lives their own way, and it worked well for them. But, if they'd realized, all those decades ago when my sisters and I were growing up, just how much some financial discipline would have benefited us, I bet they'd have worked harder to make us savvy with money. Today, I envy people who have good financial skills and habits, and if I had kids now I'd definitely do my best to equip them well, even if it were on a do-as-I-say-not-as-I-do basis.

Deferred Read the full article »

By Peter Andrew

Early in April, 2015, a British doctor revealed results from years of medical research around the globe. People, he concludes, who are overweight (but not obese) live longer that those with a body mass index in the normal range. I immediately went on Facebook to complain. My personal retirement strategy has always been to live unhealthily and die young, but scientists keep moving the goalposts: Things (caffeine, red wine, excess weight…) that were once supposed to be certain bringers of death now look set to prolong my life. If they find cigarettes are good for you (I quit only relatively recently), I could go on till 100+.

I'm not asking for sympathy. I'll get by in my twilight years: I'm debt-free, own my own home without a mortgage, have some modest savings and do the sort of work that (providing some genius in Silicon Valley doesn't come up with an app that writes financial advice) I can continue to do for the foreseeable future. In fact, I plan my last conversation to be with the funeral home crew hovering at the end of my deathbed: "Hang on, guys. I just have to post this feature article and I'll be with you."

My point is that what you're reading now is a "do-as-I-say-not-as-I-do" piece. It also means I know all about how difficult it can be to save for an event way in the future when the current demands on your money seem irresistible.

By Georgie Miller

One of the measures of a healthy economy is workers' confidence in their ability to leave a job and find other employment. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) tracks this number, also referred to as "voluntary separation" or the "quits rate." The higher the quits rate, the more people believe that they will be able to find another (possibly better) job quickly.

While the BLS crunches the numbers, they don't analyze them. However, analyses of the most recent Job Openings and Labor Turnover Summary (JOLTS) in the Wall Street Journal and elsewhere suggest that the labor market is strengthening. Along with that strengthening may come increased confidence that now is the time to make a career move.

If you're considering transitioning to new employment, here are a few strategies to consider before leaving your current position.

1. Pay off debt

Whether it's consumer debt such as credit cards, or other forms of debt such as medical debt or student loans, having a monthly payment hanging over your head may hinder your ability to leave your current job without something else lined up.

By Justin Boyle

Confession time: I'm an inveterate do-it-yourselfer. I've fixed vacuum cleaners, sink faucets, coffee tables, lawnmower engines -- you name it, I've tinkered with it. DIY efforts are usually successful if you follow the right advice, and the lessons you can learn from fixing your own stuff can stay with you for years afterward.

If you've been cavalier with your credit cards or run up a few big expenses lately, you might need to approach your finances with the same attitude. Here are some red flags to help you spot potential problems and some fix-it tricks that help get things back in working order.

Signs of trouble

It's sometimes a fine line between running rough and beyond repair. If these situations sound familiar, a financial tune-up might help you prevent an emergency:

• Making minimum utility payments. Minimum payments on a credit card are bad enough, but only paying the power company what it takes to keep your lights on month to month and never clearing your account to zero should tell you that something's really wrong.
• Stressing out about everyday purchases. If you find yourself struggling to find the money for a tank of gas or a trip to the grocery store, there's probably some work to be done.
• Buying on credit with no savings. It's true that a perfectly functional personal finance strategy can include a certain level of debt, but it should be kept to a minimum without a savings account or other safekeeping instrument to back it up.