More 4% Nonsense
Whatever you do in this space, don’t ever admit that the 4% rule is nonsense. If you do, you will be publicly flogged and left for dead for being such…
The 85% Fallacy
I frequently run across “advice” from financial planners, and salesmen who focus on mutual funds, annuities and similar items that suggest that retirees need 80-85% of their pre-retirement income to…
A Simple Depiction of Compounding
It has often been reported that Albert Einstein once claimed that “Compound interest is the eighth wonder of the world,” or “compound interest is the most powerful force in the…
We all hate/love/don’t understand Annuities
A famous research paper, written in 1965 (Yaari, 65) argued that rational individuals should convert all of their retirement wealth to an annuity at the point of retirement. The underlying…
Equity Indexed Annuities – Simple Right?
Equity-indexed Annuities (EIA's) are complex investments sold by insurance companies that pay investors part of the capital appreciation in a stock index and guarantee a minimum return if the contract…
The Case Against Mutual Funds
One of the first heuristics taught in any course on personal finance is the Rule of 72. This is the observation that if we want to figure out how many…
Move to Bonds with Age – Maybe Not!
The almost universal position among financial planners, and those in the financial media is that investors with an eye on retirement should reduce the “risk” of their portfolio with age.…