June 30, 2008

Inflation Part 3: Protecting Yourself Against Inflation
(2008-06-30) by David John Marotta
Officially, inflation today is calculated about 4%. Unofficially, it is over 7%. Since 1997 the government has stolen productivity gains from Social Security recipients and pushed middle-class taxpayers into alternative minimum tax rates. But you can learn how to hedge your assets against underreported inflation [...]

June 23, 2008

Inflation Part 2: The Results of Underreporting Inflation
(2008-06-23) by David John Marotta
Officially, inflation today is about 4%. Unofficially, it is over 7%. Inflation at this rate causes serious harm to our nation’s economy and its citizens.
Since 1997 the Consumer Price Index (CPI) has manipulated the raw data and significantly underreported inflation. This tactic has saved [...]

June 16, 2008

Inflation Part 1: How the Government Lies About Inflation
(2008-06-16) by David John Marotta
Officially, inflation today is calculated about 4%. Unofficially, it is over 7%. Since 1997 the government Consumer Price Index (CPI) has manipulated the raw data and significantly underreported inflation.
Recently I watched the 1997 movie “Conspiracy Theory” starring Mel Gibson and Julia Roberts. Before [...]

June 9, 2008

Maximum Safe Withdrawal Rates in Retirement
(2008-06-09) by David John Marotta
Last week’s column described how certain critical assumptions can affect retirement planning. Here we discuss how to determine maximum safe withdrawal rates that will not compromise a long retirement.
Imagine you knew you were going to die peacefully in your sleep at the end of your 100th [...]

Retirement Assumptions Are Critical
(2008-06-02) by David John Marotta
If you put the same assumptions into 10 different retirement calculators, you will most likely get 10 different results. The largest number may be more than twice as much as the smallest. Retirement doesn’t give you a second chance. Measure twice and retire once.
The variations among retirement projections [...]

June 2, 2008

Taking Early Retirement Withdrawals
(2008-05-26) by David John Marotta
Many academics are 403(b) rich. But they are poor in terms of their spendable assets, which limits estate planning and tax management options. It also makes retiring early difficult. Fortunately, an IRS 72(t) exception can help with early retirement.
Imagine that Professor Reddy Echols II is ready to retire [...]

May 27, 2008

That Rebate Check Could Ruin Your Retirement Part 2
(2008-05-19) by David John Marotta
Last week’s article explained the wrong-headed decisions behind the current tax-stimulus package, its deleterious effects on an already fragile economy, and how consumers delude themselves in the ways they spend the money. This week I explain the effects of the rebate checks on [...]

May 12, 2008

Tax Rebates Are a Losing Proposition Part 1
(2008-05-12) by David John Marotta
Beginning this month until July, the government will issue over $100 billion in tax-stimulus checks, the equivalent of about 1% of annual consumer spending and some 70% of the country’s $14 trillion gross domestic product (GDP). The assumption is that we can spend our [...]

May 6, 2008

Subprime Lending
(2008-05-05) by David John Marotta
The subprime mortgage meltdown has cost the world 15% of its market capitalization, about $9 trillion. The primary culprit who caused all of this financial loss, pain and suffering is not the mortgage companies. Neither is it the overextended borrowers. It is our own federal regulations interfering with the free [...]

May 1, 2008

The first quarter of 2008 made the difference between well-designed portfolios and poorly designed portfolios obvious. Check your quarterly statement to see which category describes your portfolio.
You may hesitate to change your investment strategy even if you suspect performance is suboptimal. Perhaps you believe your current investment mix went down so much simply because of [...]

April 28, 2008

Tax Freedom Day 2008
(2008-04-21) by David John Marotta
This year we celebrate Tax Freedom Day on Wednesday, April 23. That’s the day we stop working for the government and start working for ourselves. For average workers, all of our earnings for the first 113 days of the year go to pay federal, state and local taxes. [...]

April 18, 2008

It used to be that becoming a millionaire was regarded as a huge achievement. In today’s dollars, however, it is fairly trivial. According to the Department of Labor’s inflation calculator, $1 million today was worth only $183,285 in 1970. But $1 million in 1970 had the same buying power as $5,456,005 today.
That’s the new rich: [...]

April 3, 2008

Ignore Daily Financial Noise
(2008-03-31) by David John Marotta
Investors are fickle. Investing should not be.
Even with a brilliant investment plan, it takes diligence to overcome emotional biases and avoid making investing mistakes. Naturally you love it when your portfolio values go up. But when they go down, even slightly, you may be tempted to make poor [...]

March 25, 2008

Last week gold broke $1,000 an ounce. Gold advertisers and gold investment newsletters are touting their wares as though gold only goes up in value. Nothing could be further from the truth. Gold may glitter, but it is still better to own the mine.
Keep in mind that investing in hard asset stocks is not the [...]

March 17, 2008

Life Insurance: Determining Your Need (2008-03-17)
by David John Marotta and Bob Arms
You may have heard that “Life insurance is a gift of love.” But if you bought a $100,000 whole-life policy because you wanted to build some cash value when you should have bought a million dollars of low-cost term insurance to meet the survival [...]

March 10, 2008

Remember to Fund Your Roth IRA (2008-03-10)
by David John Marotta
If you are eligible, make sure you fund your Roth IRA or your Roth 401(k) this year with the maximum contribution possible. It may be your last chance to pay a reasonable tax rate before the prevailing winds of class envy swamp your retirement sailboat.
Although a [...]

March 4, 2008

Loss Aversion (2008-03-03)
by David John Marotta
Even with a brilliant investment plan, it takes diligence to overcome our emotional biases and avoid making investing mistakes. Here is the wisdom that both advisors and investors need to bear in mind to avoid succumbing to the fallacies of behavioral economics.
It doesn’t take extensive research to determine that we [...]

February 29, 2008

I’ve decided to run a mock campaign for president again as a forum to talk about public policy. Every four years I look for a candidate who understands economics, only to find politicians instead. My political bias, like many economists, leans toward freedom. The unintended consequences of much of our legislation result in great harm [...]

February 19, 2008

Last week we discussed the many ways you can save money as you learn to live on your own. Our suggestions included sharing housing costs, buying a previously owned car with cash, preparing meals instead of eating out, and eliminating the frills from services that are deducted automatically each month from your checking account. Here [...]

February 11, 2008

If you’re like most of today’s college graduates, you may find yourself ill prepared for the real world of financial responsibility. You never saw how your parents lived when they were first married and struggling. Consequently, you may be basing your after-school expectations on an upper-middle-class lifestyle. Here is my financial advice for those of [...]