Sound Advice

Sell Your Life Insurance To Raise Money?   Not So Fast! Along with an increasing number of other questionable commercials aimed at consumers, there are more than a few suggesting that it’s time to sell your life insurance policy and enjoy the cash now.    For some folks, this may sound interesting, but they are anything but win-win situations. These kinds of transactions are known as viatical settlements.   In the past, they involved the sale of a life insurance policy by a terminally ill or chronically ill policyholder to a third party for less than the policy's face value but more than its cash surrender value. Although viatical settlements can provide immediate cash to individuals facing terminal or chronic illnesses, there are several reasons why they might be considered a bad idea or come with significant risks, especially for people in good health. Reduced Payout : The policyholder typically receives less money through a viatical settlement ...

Are Stocks on Sale? If history provides meaningful clues to help answer this question, the answer is probably yes.   Why?   For several reasons. Although some folks will disagree, the reality is that the nation’s economy is in reasonably good shape.   Yes, there certainly was a period during the pandemic when inflation soared to the low double digits, but that time has passed.   The latest numbers suggest that the current inflation rate is between 3.5% and 4.0%, a range that would not be described as astronomical. For a time, gasoline prices took off, but they’ve eased from above $5 a gallon to less than $4 a gallon in most places.   However one views the situation, the periodic gains in the cost of living are moving in the right direction. So what’s the problem?   It’s interest rates, which the Federal Reserve has increased at an extraordinarily rapid pace to get inflation under control.   Judging by recent comments by the Central Bank, it app...

Hedge Funds: One Way To Get Clipped For most investors, publicly traded stocks, bonds, and mutual funds are the most worthwhile choices, but for some folks, especially those who are more affluent, hedge funds may be of greater interest.  What’s a hedge fund?  It’s a fund that uses less common strategies to increase the potential for profit while reducing risk. Sounds good?  Perhaps.  But more often than not the main value turns out to be that of a conversational topic at cocktail parties.  Why? Because not everyone qualifies to get a piece of the action.  Those who do must be accredited investors with net worth exceeding $1 million, not including the value of their primary residences, or annual income over $200,000. Even if you manage to jump over those hurdles, there is little assurance that it will be worth your while.  Quite the contrary.  From January, 1994 to June, 2023, a two-decade span including both bull and bear markets, the Cred...

When To Begin Financial Planning Ideally, financial planning should begin as early as possible in one's life. The best time to start is right now. Here are some key milestones and stages in life when financial planning is especially important: Early Adulthood (Late Teens to Early 20s): Financial planning can begin when a person starts earning their own income or receives financial responsibilities such as paying for college. This stage is an excellent time to learn about budgeting, saving, and avoiding debt. Getting Married or Living Together: When two people decide to share their lives, they should also share their financial goals and responsibilities. Planning for joint finances is essential, including budgeting for shared expenses and considering insurance and estate planning. Having Children: The arrival of children comes with increased financial responsibilities. Parents should plan for childcare costs, educat...

Couples Need To Share Financial Information Sharing financial information is an important aspect of a healthy and transparent relationship for many couples.   Although it's not an absolute requirement in every relationship, it can lead to better communication, trust, and financial stability. Here are some reasons why couples often choose to share financial information: Transparency and Trust: Sharing financial information demonstrates trust and transparency in a relationship. It allows both partners to have a clear understanding of each other's financial situations, including income, expenses, debts, and assets. Financial Planning: Sharing financial information is crucial for effective financial planning as a couple. It enables them to set common financial goals, create a budget, and make informed decisions about spending, saving, and investing. Debt Management: If one or both partners have debts, sharing this information helps in...