You: Explain to me the difference between Social Security and a 401(k) plan again. Both of them are for retirement right?
Yes, but the similarities fade very quickly. In fact, it wouldn’t be an exaggeration to say that Social Security and a 401(k) plan are both retirement plans in the same way that a [...]

Continue reading about Strategy # 29: Social Security is to a 401(k) plan like a Walkman is to an iPod

You: So what’s the real secret? I’m not talking about what you publicly advocate. How about sharing what you and all the other experts are really doing when no one else is watching? C’mon Michael—let me in on the real deal.
Nope.
You: I’m a loyal reader of your blog, I read your book, I’ve seen [...]

Continue reading about Strategy # 28: If it seems too good to be true, it usually is.

You: Can I trust a financial professional?
Yes, but always verify.
You: What?
Trust, but verify. No matter the quality of a financial professional, no one ever will care about your financial well-being as much as you will.
You: Even the good advisors?
Yes, even the good ones. A quick aside: Previously, I worked for a [...]

Continue reading about Strategy # 27: No one cares about your financial well-being as much as you do

Michael on August 13th, 2007
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You: What should I invest in?
No financial advisor worth the time you invest in a free meeting could possibly answer that question without first getting to know you and your financial situation intimately.
You: Intimately?
The financial advisor/client relationship is a close one.
You: Okay, then say “close.” The idea of having an intimate relationship with anyone who [...]

Continue reading about Strategy # 26: Have a good time with mutual fun(ds)

You: Is the sky falling?
What do you mean?
You: What do I mean?!!?? What do I mean?!!? Did you see the market yesterday?
Yes.
You: How can you be so freakin’ calm?
It’s normal for the market to –
You: Oh don’t tell me – you sold everything a week ago, didn’t you? I really hate [...]

Continue reading about Strategy # 25: Stocks go up, stocks go down, but it’s stocks you’ll want

Michael on August 8th, 2007
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You: Is the fact that the United States government borrows so much a bad thing?
That is a very sophisticated question that goes way beyond personal finance.
You: Impressed?
Well, I am glad you’re reading up more on more finances. Whatever the topic, you can’t know too much. But this is a personal [...]

Continue reading about Strategy # 24: Not Barry Bonds! Series EE Bonds!

Michael on August 3rd, 2007
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You: What the heck are APR and APY?
APR is the abbreviation for annual percentage rate. APY stands for annual percentage yield.
You: Do you really think that helped?
Perhaps not.
You: So you’re going to make me ask?
Ask what?
You: What’s the freakin’ difference between APR and APY?
Well, it is a good question.
You: Thanks. How about answering [...]

Continue reading about Strategy # 23: APR does not equal APY

Michael on July 26th, 2007
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You: How can I increase my investment returns without increasing my risk?
Gary: No problem. The answer, my good friend, is a variable universal flexible-life totally guaranteed–
Oh, stop the madness. Look, there are very few guarantees in investing. But several decades of investment history make the following a virtual fact:
The less risk you take, [...]

Continue reading about Strategy # 22: Expected risk and reward move together

You: How can I determine how much risk to take when investing?
The appropriate amount of risk you should take depends on several factors, as we discuss in Beyond Paycheck to Paycheck. One of the most important considerations, however, is your risk tolerance.
You: My risk tolerance? Last week, when I was out with a [...]

Continue reading about Strategy # 21: You can’t grow your risk tolerance at a bar

You: Is financial planning software worth it?
Why do you ask?
You: Well, I mean, what does it do that’s so special? I don’t have much money to invest right now anyway.
Financial planning software is about much more than tracking your investments the same way financial planning is about much more than investing planning.
You: It [...]

Continue reading about Strategy # 20: Financial planning software is an investment.