Personal Money Management 101 Blog

Steve Selengut

Crash! The 2007 thru 2008 financial crisis halved 401(k), IRA, and Mutual Fund values in a matter of months. For many, retirement dates had to be pushed back; for others, new jobs had to be found. The tragic flaw? No income allocation in the investment program. Market value builds egos; income pays the bills.

Few employers cautioned Savings Plan participants that 401(k)s are just not defined benefit programs. Few mutual fund distributors suggested to benefit departments that their programs were missing something of critical importance. Read the rest of this entry »

by Steve Selengut

Most people enter the investment process tip first. They hear something, grab an idea from a popular blog, accept a Cramerism or some motley foolishness, and think that they are making investment decisions. Rarely, will the right-now, instant-gratification, Internet-generation speculator think in terms that go beyond tomorrow’s breaking news.

It just doesn’t work that way in the long run. Investing takes place in an uncertain environment with at least three important cycles working their way through time at different rates of speed. Each should have an impact on investor decision-making. More often than not, short-term thinking and impulse decision-making are ineffective long-term investment strategies— Read the rest of this entry »

As we clear away after the Christmas festivities many of us have a few in-between days to reflect before the dawn of the New Year. 2009 seems set to be financially tough, but there are some simple steps (resolutions) we can all take to help us weather the storm.

Don’t listen to the doomsayers
Wherever you turn you’re bound to hear predictions of how bad the economy’s going to get, be they from “experts” or the guy sitting next to you on the bus. Ignore the lot. 2009 will most likely be financially difficult, but no one knows to what extent. Even the so-called “experts” don’t have a great track record when it comes to economic prediction, else they would have foreseen the credit crunch and done something to prevent it! Read the rest of this entry »

The US Federal Reserve has slashed its key interest rate from 1% to a range between zero and 0.25% in an attempt to stem recession. Will this latest measure work, and what are the implications for you and me?

It all seems rather perverse that a crisis born of irresponsible lending and resulting bad debt should be solved by slashing interest rates to zero which will surely serve only to create unprecedented borrowing – provided of course anyone’s crazy enough to lend! Read the rest of this entry »

Falling interest rates might be good news for borrowers but they are disastrous for savers, particularly those such as seniors who rely on interest as a significant part of their income.

Though no one can reliably predict economic behavior (just look at the current mess if you think otherwise!) it seems that interest rates are set to stay low for some time, possibly falling even further as governments desperately try to kick-start the global economy. Read the rest of this entry »