Homes aren’t savings accounts

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Nick Foy, CFP®

Back in 2011, when we still had cable, my wife and I would waste time vegging out watching HGTV. We saw people searching for their first home, renovating their current home, and looking for the perfect vacation home, sometimes all in the same episode.

Experts would help them with their construction and/or transaction, and by the end of a thirty minute segment, everything would be clean and beautiful and ready for living their best life.

Before (and sometimes after) a renovation project was complete, they’d often show the homeowner how significant the improvements were from a financial perspective, revealing their estimates for how much could be expected to be recouped were the owner to sell.

And it was totally, entirely, misleading. Continue reading “Homes aren’t savings accounts”

Don’t Do Dumb Stuff – The Best (Unintentional) Financial Advice I’ve ever received

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Nick Foy, CFP®

As a 13-year old, my 7th grade science teacher use to get (understandably) pretty upset with me. Mr. Morris was easily in his 60’s, with well-groomed grey hair, and polos that typically fit too tightly around his bulging biceps.

He also taught 7th grade PE, and would frequently find the need to recite this phrase to me, for one reason or another. He’d look me straight in the eye, as I sat in the back row of science class, or as I did something other than what was required of me on the field during PE:

“Nick, don’t do dumb stuff.” Continue reading “Don’t Do Dumb Stuff – The Best (Unintentional) Financial Advice I’ve ever received”

Thanks, Merrill Lynch! You’re making it easier for independent advisors

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Nick Foy, CFP®

To much fanfare, Merrill Lynch had previously announced that their “advisors” would be adopting the fiduciary standard, per the Department of Labor requirement that was supposed to have been enacted by now.

Now that the rule won’t be put in place, Merrill has changed their minds.

It seems that Merrill is backtracking on their prior promise to put the clients’ interest first. Instead, they’ll once again allow their “advisors” to push commission-based products that probably aren’t the best thing for their client.

Consider me relieved.

It’s a lot harder to differentiate our services if everyone is acting in a fiduciary capacity.

I’m sorry for those clients that are already embedded in the Merrill platform, with their hidden fees and murky revenue structure. Luckily, better options exist, and there’s really no reason to maintain assets with advisors who are selling products.   Continue reading “Thanks, Merrill Lynch! You’re making it easier for independent advisors”

Are Health Savings Accounts the most underutilized tool for the average investor?

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Nick Foy, CFP®

Over the past couple of years we’ve been touting the benefit of the Health Savings Account (HSA) to our clients, but it’s worth noting that HSAs are unique in the world of personal finance:

From a tax perspective, HSAs are more beneficial than any other type of account. Contributions go in pre-tax, growth is tax-deferred, and everything comes out tax-free assuming you use the money withdrawn to cover a qualified medical expense. This triple tax advantage doesn’t exist anywhere else.
Continue reading “Are Health Savings Accounts the most underutilized tool for the average investor?”

Redefining Affordability

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Nick Foy, CFP®

The ongoing battle for real financial advisors (as opposed to salesmen) is to convince people that delaying some gratification is worth their time. It’s a battle we’re destined to lose, but we fight on undeterred.

Back in 2011, Brett Arrends wrote an article in the WSJ called The $2,000 iPad, in which he attempted to show that the opportunity cost for an iPad (or any other $500 spend) is actually significantly more than the sticker price, assuming you would’ve invested the money instead: Continue reading “Redefining Affordability”

There is no present tense in investing (or much else)

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Nick Foy, CFP®

With some regularity, clients or prospects attempt to take a question that is inherently past tense and flip it into the present tense in order to decipher an unknowable future.

The question often goes something like this: “What are the markets doing?”

I don’t blame them. Attempts to predict the future in an effort to make some extra coin, or at least to feel more secure, are popular. The media does it all the time.

The trouble is, the markets aren’t doing anything. Continue reading “There is no present tense in investing (or much else)”