Money put to work to earn a return on your behalf is investment capital. Appreciation, income or a combination of the two generates more capital. Growing capital can create a retirement nest egg. Investments can be in the form of ownership (equity) or loanership (fixed income) dollars.
#7 of 13 Things People Can Do with Money | by WealthPhase
Average fund fees decreased 8% in 2017, saving an estimated $400 billion. Score one for free markets, competition, and consumerism.
Investors have a funny relationship with yield. Retirees tend to prefer an income-based strategy, even at the expense of total returns. Plenty of investors (and politicians) have a poor understanding of share buybacks.
Before incorporating strategic beta products in a client's portfolio, advisers must understand the challenges at hand and the desired outcome.
If your portfolio doesn’t line up with your beliefs, you’re likely not very comfortable with your portfolio. If you aren’t comfortable with your portfolio, then it’s going to be a lot harder for you to stick it out when the markets get “choppy,” especially if that choppiness all seems to be heading down.
Advisors are interested in using factors. But it takes a lot of due diligence to choose among the many products and implement them in portfolios.
If the amount of time the idea of diversification has stuck around is a testament to its worth, it is clearly invaluable to investors.
Fear is a much stronger emotion than greed. The moment investments turn south, everybody wants to know what's going on and why.
Part 2 of three-part retirement income series. Switching gears from saving for retirement to turning that savings into a retirement paycheck is a tricky proposition. Taking these steps can help bring your income plan into focus.
Part 1 of three-part retirement income series. If your retirement income relies on the stock market, a plunge isn't just paper losses to you. Here's the income plan my wife and I use that takes the worry out of market volatility.
In this paper, Vanguard researchers review the rationale for indexing’s efficacy, quantify the benefits of indexing to investors, clarify the definition of indexing, and explore the validity of claims that indexing has an adverse impact on the capital markets.
Does compounding matter to your investment returns? For sure! Your contributions matter, but it's the power of compounding that leads to a wealth snowball. Want proof? Just look at these numbers from Get Rich Slowly.
If you're the parent of a special-needs child, the 529 ABLE account can be a valuable resource in helping your child thrive.
Over the past 200 years, stocks market returns have outpaced every other kind of investment. But before you invest, you need to understand a couple of things.
Monday was the worst day that the Dow Jones Industrial Average has ever had, at least in terms of points. That sounds scary, and it certainly wasn’t fun, but just like most big events, the Retirement Researcher puts the February 5th drop in perspective.
Another argument for passive investing: The latest S&P Persistence Scorecard shows that less than 1% of top-quartile funds are likely to remain on top after five years.
Joshua Sheets discusses how to determine if your financial advisor is worth the expense (after answering question about front-loading 401(k) contributions).
We don't necessarily agree with #11, but here are some of the most commonly misunderstood things about the most common type of workplace retirement plan.
A reader asks, "Should I elect to put my bonus into my 401(k)? I've heard conflicting advice, but I don't understand the downside." Morningstar responds.
Sean Williams at The Motley Fools says it's time we took bitcoin off of its pedestal and paid attention to other cryptocurrencies.
The changes to retirement savings rules for 2018 are uniformly positive, so take advantage of them by cranking up your contributions in the year to come. The more money you save now, the more you'll have to indulge yourself with once you retire.
We look at five bitcoin scams and how to protect yourself from fraud.
Dividend Aristocrats are in a class of their own, but even within the elite club, these companies stand out as true income champions.
This infographic breaks down the basics behind exchange-traded funds (ETFs), including how they work, what they can track, and their investing pros/cons. For long-term investors, utilizing asset allocation strategies, some of the benefits touted (e.g., jntraday trading, stop-loss orders) for ETFs are of little value.
According to Morningstar, employees should first max out contributions to their HSAs no matter their tax bracket, and once that's done, contribute to their 401(k) plans.
Why risk composure rather may be the real predictor of who can stick to an investment plan, and whether we can measure risk composure and risk perception.
New to 401(k) plans and have questions? Here’s your answer — once and for all, and with all the details — to the question: “What is a 401(k)?”
What's the difference between Bitcoin, Ethereum, Dash, Ripple, and Litecoin? This infographic breaks it all down, as well as many other key metrics.
The good times have been rolling for so long that it's easy to forget the sting a downturn can deliver. Those close to retirement can least afford to be lulled into a false sense of security. Here's how to be ready for the next bear market.
Many 401(k)s have lousy options when it comes to investing your money. This article won't name names as far as the absolute worst investment options for 401(k)s, but it will give you the information you need to assess your 401(k) plan and figure out which of its available investment choices aren't worth investing in.
To determine the value of a bond today—for a fixed principal (par value) to be repaid in the future—we can use an Excel spreadsheet.
If the amount of time the idea of diversification has stuck around is a testament to its worth, it is clearly invaluable to investors.
Whenever people talk about how much you should save for retirement, there’s a pretty good chance that they’ll start talking about your retirement “number,” or how much you are supposed to have saved up. Forget the rules of thumb and do some planning.
Retirement income without the downside? Fixed indexed annuities can do some good things, but not as good as often advertised.
When companies need to raise money, issuing bonds is one way to do it. A bond functions like a loan between an investor and a corporation.
When it comes to investing in dividend stocks, many investors turn to mutual funds or exchange-traded funds that offer access to dividend-paying companies across industries. Those who prefer to hold individual stocks might instead want to follow in the footsteps of famed investor Benjamin Graham, who favored companies with three attributes:
The 401(k) is often considered the pinnacle of retirement accounts, but for many savers there's a better option waiting for them to claim it. Depending on your particular situation, a SEP-IRA, Roth IRA, or HSA may be a better place to store your retirement savings than a 401(k). Here's how to tell which of these accounts is the best fit for you.
One of the most common mistakes I see retirees make is looking at a good return on a nearly risk-free investment and concluding that they would do better in the stock market because it has a higher long-term average return. This is a good opportunity to review liability matching.
Advisors, the financial press, and many personal finance bloggers have been calling for lower future returns for the better part of a decade now...without much accuracy. But let’s take it a face value – what are we to do now?
The differences between a traditional 401(k) and a Roth IRA. Since an increasing number of 401(k) plans offer a Roth option, the comparison could have been between those two options.
When planning for the future, we tend to base our assumptions on past stock market returns. There's just one problem. Returns are almost never average. J.D. Roth closes article with sound advice about which numbers to focus on.
There some actively-managed fund management groups with solid long-term results, including T. Rowe Price, American Funds, and a few others. However, the future long-term success of most managers is no more dependable than a coin flip, according to Victor Haghani.
This study says you can’t use student debt as an excuse to not invest in the future. Here’s how to save for retirement — even with a ton of student loans.
Everywhere we turn people are talking about Bitcoin and other cryptocurrencies. Maybe it’s because Bitcoin has increased in value by over 400% this year alone. So what is a cryptocurrency anyway?
In the search for yield, increasing numbers of retirees are turning to dividend stocks. Although some are not socially responsible choices, here are 10 that offer attractive yields and have been growing their dividends each year.
This is not an endorsement of J.P. Morgan's services, but it is a recommendation for their seven time-tested strategies for long-term investing. Every investor, or prospective investor, should read it.
Almost every hard-currency emerging-markets debt exchange-traded fund owns Venezuelan bonds, but Morningstar says that investors in those ETFs shouldn't be overly concerned regarding the dire situation in that country.
Yes, commodities—and especially oil—can be very volatile. What author misses is that adding a small percentage of energy stocks to a portfolio can introduce a negatively-correlated asset that dampens overall volatility (standard deviation).
If you're a millennial, how would you like an extra $830,000 in your retirement account?
Many investors turn to dedicated real estate funds, either to add a dose of diversification or if they are looking for income. Morningstar fund analysts highlight three of their favorite funds that invest in REITS.
The 'required return' can demystify and personalize the investing process. It can serve as both a guide for selecting the asset allocation that best suits an investor’s circumstances and a performance benchmark for assessing progress towards those goals.
The author states that building a lazy portfolio is easy. We agree. We don't agree that "Lazy Investing" is the best approach for everybody. However, short of figuring out what is the optimal portfolio for you, it is better than many other strategies (for those willing to take the risks of owning stocks and bonds).
"High-dividend portfolios didn’t perform better than the low-dividend-paying portfolios. But they were less volatile and exhibited lower sensitivity to the market risk premium (market beta)."
$1.9 billion. That's what Warren Buffet would be worth, today, if he had started investing at age 30. Perhaps the secret to his great wealth is not superior stock picking, but the power of time and compound interest.
The Internal Revenue Service recently announced retirement contribution limits for 2018 adjusted for cost-of-living considerations.
Most workers prefer traditional 401(k) accounts. Why do retirement experts advise certain workers to use Roth-style accounts?
The contribution limit for 401(k) and other employer-sponsored retirement plans has gone up $500 for 2018, according to the Internal Revenue Service.
Stocks can’t continue to go up forever and rates can’t continue to go down forever so what are investors supposed to do?
Nerd is the new black (or really, green) in part 3 of our series on market crashes. Hundreds of dotcoms enter the Thunderdome that is the Information Age, only a handful survive. Morgan Housel from the Collaborative Fund joins us.
The Motley Fool makes two stops in their series on market crashes with the help of Morgan Housel of the Collaborative Fund. In this podcast, they take a look at the 70s during the energy crisis and Black Monday in 1987.
This October, the Motley Fool is kicking off a four-part series on market crashes with the help of Morgan Housel from the Collaborative Fund. First Stop: The Great Depression. What made it so great, anyway?
If you took an average of the returns on all collectibles – which is practically impossible to do given some have little or no market to measure – it would be dismal compared to the S&P 500.
Laddered certificates of deposit offer safe capital and predictable cash flow, while bringing simplicity to your portfolio.
Consumerism Commentary lists their choices for the best online brokers for 2017. We are not sure how a robo advisor qualifies as a discount broker, but it's their list.
We are strong proponents of Roth, if your employer plan offers it. This article provides some arguments for traditional. As you read, ask yourself if you would rather pay tax on the mustard seed (Roth) or the mustard tree (traditional)?
Although the easy ride is over, rentals remain a good investment. Still, investors now need to look more closely at the basics of the markets where they might put their money. As always with real estate, you can make a good or bad investment anywhere, but your odds are better if you're working in fertile ground.
A growing number of "regular folks" are turning to an app called Stash. On You can start investing with just $5. The company's motto is "investing for real people."
Vanguard will help you choose. Answer four simple questions that can help you decide which is right for you. Of course, there is always the option of all three!
A portfolio of companies that increase their dividends each year has outperformed the S&P 500 over the long haul...with less volatility. It is a strategy that offers the potential for inflation-hedged retirement income.
Assuming you meet the income and age tests that apply to IRA contributions, the next question is whether those contributions are advisable. And if you're eligible for both types of contributions, which type is best?
Sometimes you’re put in a position where you have to sell stocks—and breaking up can be hard. Motley Fool Answers discusses five reasons to sell stock and how to figure out which stocks to sell.
Using a 401(k) is one key to boosting retirement confidence. Here's how to supersize that confidence.
Among actively-managed mutual funds, Morningstar's Russel Kinnel does a good job filtering out thousands of funds to come up with these 43. We especially like the criteria that a fund manager has over $1 million of his or her own money in the fund.
Picking the right investment property can seem like an impossible task. These nine pieces of advice from a real estate expert will help you decide.
What's the difference between Bitcoin, Ethereum, Dash, Ripple, and Litecoin? This infographic breaks it all down, as well as many other key metrics.
But, do they really want them? Forbes takes a look at the returns, which are not so impressive.
Global uncertainty is rising. Yet, gold isn’t rallying. Bitcoin, the new ‘gold,’ is.
One Bitcoin would set you back $4,425 at the time of writing. That's up from less than $600 a year ago, according to CoinBase. Is it a better investment choice than gold? This writer doesn't think so.
Fees, investments, and advice are just some of the factors that investors should weigh when deciding about rolling over a 401(k), says Morningstar's David Blanchett.
If you're worried about protecting against 5% corrections, you shouldn't be invested in stocks in the first place.
Have a financial goal you're feeling bad about not working on? Just start by applying $20.00 a month towards it! It's only $20 and it feels GREAT!
Many of us understand the concept of buying low, but when do we sell high? Keep in mind your objectives, tax consequences, and Warren Buffet.
Two firms land in a dead heat for first place in this year's rankings. Find the best broker for you.
The case for using simplified, ultra-well-diversified investment products is even stronger if you have something complicated going on with the rest of your financial life, either with your human capital or your total financial portfolio.
Find out how TIPS—Treasury Inflation Protected Securities—pay interest, the mechanics of TIPS' principal adjustment, and the potential risks of investing in TIPS.
We have no control over the sequence of returns in the markets but here are some ways to manage this risk.
Fees are incredibly important. Almost everything in investing is completely unknown, and outside of your control. The markets are going to do what they are going to do. But you do control how much you
Are you a retiree attracted to stocks paying high dividends? It is important to focus on an investment’s prospective total return, and not solely its yield, as higher yields often signal greater risk.
Start saving now so you avoid a Titanic investment failure later! Remember:you can always work for money, but it's much better to let money work for you.
A time (falling markets) and a place (foreign markets) are both environments where actively-managed funds have generated better performance than passive index funds or ETFs.
These 10 Vanguard funds offer low fees and intelligent strategies that will help you squeeze out the most income bang for your buck.
This article suggests that the best reason to buy REIT shares is the vast array of real estate sub-sectors they open up to individual investors. This may be true, and REITS can be useful when constructing a diversified portfolio. However, the author failed to discuss the risk factors. Shares in REITS fluctuate in value just like shares of other types of common stock.
Many Baby Boomers have failed to adequately prepare ready for retirement, but younger workers have a chance to do better ... if they make the most of their 401(k) plans.
That's what the average retiree receives from Social Security. How much can you accumulate to supplement it? Maurie Backman shows you in The Motley Fool.
Retirement was cited as the top savings priority by only 10% of millennials, lagging other goals. Although understandable, it is an expensive mistake.
Despite outflows following high-profile management changes, Morningstar finds that such a flux has no impact on fund performance.
Wondering if a leveraged ETF makes sense? It can deliver huge gains. However, it can also magnify losses in a bear market.
There is a lot going on when you leave a job. Whatever the reason for leaving, don't forget to take care of your 401(k) plan when making a change.
Don't cheat yourself out of $500,000. Getting started, now, can result in double the money, later. The Motley Fool shows you why.
The proper balance of taxable, tax-deferred, and tax-free assets can provide you with hundreds of thousands of dollars more in spending power.
Among other reasons, younger people view Roth IRAs as a hedge against the risk that tax rates and brackets will rise in the future. Why risk withdrawing money from a traditional IRA and getting taxed at the higher rates?
The program requires employers in the state that do not already offer a retirement savings plan to employees to automatically enroll employees in the OregonSaves program at 5% of pay.
Rianka Dorsainvil, a financial advisor to millennials, explores all the 401(k) options available to people when change jobs.
What does one do when faced with the decision to either invest their money or use it to pay off long-standing debts?
You may not earn a lot of money as you begin your career, but there’s one thing you have more of than richer, older folks – time. With time on your side, saving for retirement becomes a much more pleasant (and exciting) affair.
Warren Buffet had an epiphany one day when he was 11 years old. He discovered the eighth wonder of the world. It can make hundreds of thousands of dollars difference in your own portfolio.
Billionaire investors like Ray Dalio are stocking up on gold. Here's the ideas and strategies on gold from four elite investors, and what we can learn.
Many people think there's little they can do to improve the financial health of their retirement. They may be wrong. Investing even small amounts can make a big difference if started a young age.
Year to date, about one-third of the S&P 500 Index’s total return is from five companies. Could this mean the death of diversification?
Investors are constantly fighting the last war by trying to hedge out risks after they’ve already occurred. Short-term fears often disrupt the most well-intentioned long-term plans. Most normal investors don’t pay attention to the financial markets until something bad happens. Then they’re all ears and looking to do something, anything to allay their fears.
What is a fiduciary? Learn why it is important to your financial well-being. Find an advisor with the best fee structure. Look before you leap from your 401(k) to an IRA rollover.
Dodge & Cox, Vanguard, and American Funds have the highest percentages of rated funds that are Gold as well as more than three-fourths of their rated funds earning medalist status. These firms are well positioned to deliver strong results.
Some people say they don't. Bob French, Chartered Financial Analyst, shows how they do in this article by providing convincing evidence.
What you think your risk tolerance is, and how you act when the stock market drops 20-50 percent, may not be the same. Morgan Housel shares some of the most dangerous terms financial pundits and experts use all the time.
WSJ Wealth Expert Peter Lazaroff writes that you can be highly active using index funds and very passive using active funds.
Millennials can take full advantage of compound interest. The most valuable asset younger people have is time. When you combine it with compound interest, great amounts of wealth can be accumulated.
It's true that missing out on even a few years of retirement plan contributions can have a significant impact on your long-term savings. But while you can't go back and change the past, as long as you're still working, you can aim to compensate by ramping up your savings while you still have a chance.
Be sure to have set aside some cash reserves, first. When you have $500 beyond what's in your emergency fund, here are some options.
You may know that an HSA is an account that lets you use tax-free money to pay some of your medical and health expenses. On top of that, the HSA is not too much different than a Traditional IRA.
Money in the bank is risk-free because it's guaranteed, right? Well, your principal is guaranteed, but your purchasing power isn't. You need to know that there are different types of risk—inflation being one of them. Invest accordingly.
Index investing has become quite popular. If you're not investing in index funds, you might even feel left out. If you don't understand what indexing really means, Bob French at Retirement Researcher breaks it down for you.
Everyone has heard of the S&P 500 and Dow Jones, but what’s the difference between the two? And which one should you trust?
College endowment funds have access to the best and brightest minds in the world of investing. Can you compete with them? Perhaps, if you invest in index funds.
Leave it to Wall Street to create endless ways to repackage indexes to have something new to sell. Do we need more indexes—and EFTs that invest in them—than actual stocks?
Owning stocks can provide a needed inflation hedge for retirees. Mixing in a laddered bond portfolio can protect against sequence risk during the early years of retirement.
Dividend investing is one way to build an income-generating portfolio during your working years. By the time you retire, it will help you achieve your income goals. In addition, reinvesting the dividends allows you to take advantage of dollar-cost averaging.
Let's say you invested $100,000 over 30 years at a conservative 5-percent annual rate of return. With a 0.70-percent annual expense ratio, you'd have $350,000 after three decades, but you will have lost $82,000 to fees and foregone earnings.
Not many people are suited for investing directly in individual stocks. For those who are, a strategy of owning stocks in companies with a history of regular dividend increases helps them build a portfolio of increasing income. A growing dividend stream can pay off during retirement.
Dividend growth investing is a very simple but effective wealth building strategy. The Dividend Growth Investor reviews a list of dividend increases with at least a ten-year streak. The 13 companies that met the criteria are listed here.
Holding a passive index of stocks usually outperforms an active approach. That's why you should have these three index funds in your portfolio.
Is an annuity a good investment? For some, the answer is "yes," for others, it is "no." The best use of an annuity is to protect against longevity risk (running out of money because you live too long). There are other issues to consider.
Dirk Cotton has always believed that life annuities can play a critical role in many retirement plans but his appreciation for them has increased over the years. For anyone who is on the fence about life annuities, he shares some different perspectives that may help you decide.
Don't get suckered into a Ponzi scheme. Know the red flags to look out for and you can save thousands of dollars...and many hours of sleep.
Although past performance is no guarantee of future results, looking at the history of the market’s bull and bear markets helps to gain a fresh perspective on the benefits of long-term investing.
Motley Fool Answers explores the growing trend of values-based investing including how to evaluate the environmental, social, and governance impact of publicly-traded companies.
Get Rich Slowly compiled a chart of some of the most well known and best reviewed online brokerages for new investors.
The number of publicly-traded U.S. stocks is shrinking at the same time their market cap expanded vis-a-vis foreign markets.
Retirement experts, the media, and others have lamented the decline of defined-benefit pension plans. 401(k) participants can create a pension-like source of retirement income by using a portion of their assets to buy a longevity income annuity.
Haven't saved enough for retirement? You need to do all that you can to build your nest egg. Here are seven ideas to boost your retirement income.
The VanEck Vectors Fallen Angel High Yield Bond ETF, which celebrated its fifth anniversary of trading on Monday (April 10, 2017), has emerged as one of the standouts of the fixed-income ETF space.
Millennial home buyers are going to send ripples through the real estate market if they can pare down debt and save money for a down payment.
Wade Pfau, Ph.D., CFA, takes a look at valuation-based asset allocation.
Certain IRAs will allow you to invest in things like IPOs and mortgages held for investment. Here’s what you need to know.
It's a paid article, but still a good explanation of short selling for those not familiar with it. Schwab's explanation includes example scenarios of how short selling can play out.