Personal Finance Guide

Archive for September, 2009

History has shown that leadership among market segments has changed — often dramatically — from year to year. By diversifying your equity investments among the different capitalization ranges, styles, and geographic regions, you can increase the likelihood that your portfolio will weather changes in market conditions. The common reminder that past performance is no guarantee of future results is certainly true. Looking at past returns can be very confusing. 

Source: Wiesenberger, 2003, for the period 12/31/1992 to 12/31/2002. The table is presented for general information purposes only and is not meant to depict past performance or predict the future performance of any particular investment. 

Performance of all cited indexes is calculated on a total return basis with dividends reinvested. Foreign securities involve risks in addition to those associated with domestic securities, including foreign Currency Risk and political instability. Investing in small- and mid-size companies involves risks in addition to those associated with large-size companies. 

• International is represented by the Morgan Stanley Capital International (MSCI) EAFE Equity Index.

The indexes do not reflect any expenses, fees, charges, or taxes. These indexes are unmanaged and should not be considered investments. Past performance is no guarantee of future results.

Question: Is there any better plan for Personal Finance out there better than the Dave Ramsey plan?

This is not a plug for his plan. I am really asking you guys, does anyone else out there have a plan that works better than this? And what is making it better?

Answer: I don’t think anyone else has a better plan. I have read several (Howard Dayton, Suze Orman, Winget). I think Dave’s no nonsense approach is what works for us. Work fast and hard to get to the debt free living. The reason he says not to do the 3-6 months up front or at the same time (as Mary Hunt) is to keep you motivated to get out of debt as fast as possible.

We also like that he uses everyday, lay people language. Suze Orman I find difficult to read- very technical. She also likes the FICO score and if you are truly a Dave Ramsey follower you find that you don’t need a FICO score if you don’t borrow money.

I suggest Dave to everyone that will listen!

Personal Finance Tips : Child Banking Tips

Question: What “Life Skills” class do you think every graduating high schooler should have?

I teach “Life Skills and Personal Finance” to high school seniors. I want to come up with a good list of “skills” that I can teach these young men and women before they are off on their own. Some of what we already cover includes:
● Banking
● Resume & Cover Letters
● Basic Budgets
● Spreadsheets (Excel)
● The Expenses of a Child

Answer: All of the above are great.

How about this:
*Teach the consequences of personal debt as part of basic budgets. Many students graduate out of necessity with high student loan debts, and they also graduate with high credit card balances. Have them learn how long it will be before they pay off a credit card using minimum payments.
* Another good thing would be to teach them to fill out a basic 1040ez or 1040 form to do their own taxes. Teach them which form they have to use as well. Why pay a preparer when your taxes are simple?
* Teach the basics of personal nutrition, cooking, and how to shop economically at the grocery store. (Compare the cost of homemade spaghetti with the cost of a frozen meal or takeout).
* Teach them about where they get forms … like at the DMV, County Recorder (birth and death certificates etc), how to obtain copies of their medical records etc
* Ayas idea to teach time management is a good one too, though it’s subject to a lot of value choices over whats worthwhile getting done. Have them make those choices. I’d just have a hard time assigning a grade to that.

Excel Budget Spreadsheet