Mind Your Money

 

Welcome to the library's multi-author blog and associated resources for increased financial literacy. This program is made possible by a grant from the FINRA Investor Education Foundation through Smart investing@your library®, a partnership with the American Library Association

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For questions or comments about this program, please send email to mym [at] hmcpl [dot] org.

 

 

From MarketWatch: 5 critical retirement investing mistakes to avoid

A new book titled “Investor Behavior: The Psychology of Financial Planning and Investing” gives us five great tips on saving for retirement. More from MarketWatch:

1. Don’t ignore the detrimental effects of inflation on fixed income and financial assets. For example, as inflation increases, the required rate of return on bonds increases resulting in a decrease in bond prices.

2. Don’t react emotionally to news stories or short-term trends about the stock market.

3. Don’t chase past performance. Mutual funds attract investors by increasing their advertising on high performing funds. Using past performance as a strategy rarely works. Thus, retirees should avoid jumping on the bandwagon and following the herd.

4. Don’t ignore the effect that personality, mood, affect, and cognitive biases shape investment and trading decisions.

5. Don’t fail to have a diversified portfolio. That is, putting all your eggs in one basket is not a good idea from an investment perspective.

WSJ: The Best Financial Advice I Ever Got (or Gave)

The holidays are a time for relaxing, helping the less fortunate, showering family and friends with love and attention—and, sometimes, for smiling and nodding through unsolicited stock tips from an overbearing relative who has been sampling the eggnog.

But good advice can make careers and forever change lives for the better. So The Wall Street Journal asked an array of prominent people who manage, invest, study and write about money to share the single best piece of financial advice they ever received—or gave.

The respondents included investors who collectively have earned billions of dollars for clients and themselves; founders and owners of businesses that are household names; and Nobel laureates who shaped the world's understanding of the forces that drive the stock market.

Read more at The Wall Street Journal

Contributed by Dorla Evans, Mind Your Money Instructor

BrokerCheck

BrokerCheck is a free tool to help investors research the professional backgrounds of current and former FINRA-registered brokerage firms and brokers, as well as investment adviser firms and representatives.

Through BrokerCheck, investors can:

  • Search for information about brokers and brokerage firms
  • Search for information about investment adviser firms and representatives
  • Obtain online background reports, if available
  • Link to additional resources such as educational tools for investors

My Money Five

MyMoney.gov  is the U.S. government's website dedicated to teaching all Americans the basics about financial education. The website has several special features including My Money FiveMy Money Five discusses making the most of your money by starting with five building blocks for managing and growing your money. Use these five principles in mind as you make day-to-day decisions and plan your financial goals.

The Five Principles

EARN – Make the most of what you earn by understanding your pay and benefits. Read more...

SAVE & INVEST - It’s never too early to start saving for future goals such as a house or retirement, even by saving small amounts. Read more...

PROTECT – Taking precautions about your financial situation, accumulate emergency savings, and have the right insurance. Read more...

SPEND – Be sure you are getting a good value, especially with big purchases, by shopping around and comparing prices and products. Read more...

 BORROW – Borrowing money can enable some essential purchases and builds credit, but interest costs can be expenses. And, if you borrow too much, you will have a large debt to be repaid. Read more...

6 Tips for Women Who Want to Retire

For many women, retirement isn't the relaxing haven it's cracked up to be. Because women earn less over their lifetime than men, they tend to have less saved. Women also live longer than men, which means their savings needs to stretch longer. According to a 2012 Government Accountability Office report, 12 percent of women age 65 and older are living in poverty, compared with only 7 percent of men. For divorced and widowed women in the same age group, the poverty rate is higher, at 21 and 15 percent, respectively.

Even women with incomes over the poverty level often face financial stress. Nursing homes, which women have a greater chance of entering because they generally live longer, cost an average of $71,000 a year, and assisted-living facilities can cost $32,000 annually.

What can women do to protect their finances? A lot, it turns out. Read the U.S. News & World Report story. 

Americans need financial education, report says

From CNBC: Financial service companies spend billions of dollars a year marketing their products and services—credit cards, checking and savings accounts, car loans, mortgages and home equity products.

By comparison, very little is spent to provide American children with the tools they'll need to deal with the financial decisions they'll face in life.

A new study from the Consumer Financial Protection Bureau (CFPB) documented the huge disparity in this spending. The study found that the industry spends approximately $17 billion annually on consumer marketing. But only about $670 million is spent on financial education each year in this country.

Put another way: While $54 a person is spent on financial marketing to American consumers, only $2 per person is spent to educate them on money matters.

"When consumers receive the vast majority of their financial information from companies that are trying to promote an image or sell products, consumers have very little unbiased information," Richard Cordray, director of the CFPB, said in a statement.

Cordray said the report, "Navigating the Market," "further reinforces the dire need for more and better financial education in this country." Read more and see the interview on CNBC...

Thanks to Stephen Speciale, one of our Mind Your Money class instructors, for this timely article!

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