Read the full article]]> Retirement, Planning for your retirement, IRAs, Roth IRAs, Traditional IRAs, Taxes, Tax Updates 2008-11-17T13:38:00-05:00 http://ffscambridge.com/blog/post/how_do_hedge_funds_fail_so_spectacularly/ http://ffscambridge.com/blog/post/how_do_hedge_funds_fail_so_spectacularly/#When:05:19:00Z Yesterday, the House Oversight and Government Reform Committee hauled in a gaggle of hedge fund managers to grill them about, among other things, why they should receive such favorable tax treatment.

If I were a congressman, the question I'd have liked to have asked this crowd is, “Why is it so often the case that when hedge funds fail, they don’t merely fail, they implode, like dying stars?” This failure mode seems especially inappropriate for an investment class that's often touted as a way to make money in both good times and bad.

Read the full article]]> Investing, Hedge Funds, News 2008-11-14T05:19:00-05:00 http://ffscambridge.com/blog/post/express_scripts_reports_loss_of_confidential_information/ http://ffscambridge.com/blog/post/express_scripts_reports_loss_of_confidential_information/#When:03:08:00Z Prescription processor Express Scripts recently reported that some of the confidential data that it maintains on millions of patients has been compromised. In October the company received an extortion letter from someone who possessed names, Social Security numbers, and prescription information for about 75 people. Some of Express Scripts’ clients (typically these are health benefit plans) received similar threats.

The company has established a website to provide information about the data loss, although at present the site doesn't contain much real information. Express Scripts believes it has identified where the lost data was stored, but gives no indication that it has figured out how many people's information was stolen.

As I’ve mentioned before, stolen medical data sells for a premium because it can be used to commit insurance fraud; medical data theft is potentially much more lucrative than credit card theft. This incident will bear close watching, especially if it turns out that a significant number of people's information was lost. Express Scripts says that it will provide free "identity restoration services" to individuals who become victims of identity theft as a result of this loss – so by the time help is provided, the damage will already be done.

Read the full article]]> Health Care, Identity Theft, News 2008-11-14T03:08:00-05:00 http://ffscambridge.com/blog/post/protection_for_bank_accounts_brokerage_firms_annuities_and_insurance_polici/ http://ffscambridge.com/blog/post/protection_for_bank_accounts_brokerage_firms_annuities_and_insurance_polici/#When:02:19:00Z I've written several posts on the asset protection limits available to consumers who have invested in a variety of financial assets. With all the changes and adjustments that have taken place in the last few months in the financial landscape, I thought it might be helpful to provide a single article summarizing the insurance /protections currently available to investors.

Read the full article]]> Cash Flow, Saving, Investing, Risk Management, Life Insurance 2008-11-14T02:19:00-05:00 http://ffscambridge.com/blog/post/diversified_portfolio_is_still_the_long_term_favorite/ http://ffscambridge.com/blog/post/diversified_portfolio_is_still_the_long_term_favorite/#When:03:58:00Z Last week, financial journalist and author Jane Bryant Quinn polled several members of the National Association of Personal Financial Advisors (NAPFA) for our opinions on whether it's still a good idea to have stocks in a retirement portfolio. The consensus? In a word, "yes."

Read the full article]]> Investing, Meeting Your Goals, News, Retirement 2008-11-11T03:58:00-05:00 http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_4_passwords_online_shopping_etc/ http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_4_passwords_online_shopping_etc/#When:11:46:00Z This completes the series of posts that I started during National Protect Your Identity Week. I'd like to finish by discussing several more ways to avoid becoming a victim of online ID theft.

Read the full article]]> 2008-11-07T11:46:00-05:00 http://ffscambridge.com/blog/post/income_tax_changes_in_the_emergency_economic_stabilization_act/ http://ffscambridge.com/blog/post/income_tax_changes_in_the_emergency_economic_stabilization_act/#When:12:03:00Z With so much attention being given to the $700 billion bailout of banks and the financial industry in the Emergency Economic Stabilization Act of 2008, not much has been said about the individual income tax provisions included in the massive 440-page bill passed last month.

If you'd like to avoid searching the full bill for the parts that might be personally relevant, here's a quick summary of some provisions that could be interesting to you even if you're not an enormous bank.

Read the full article]]> Housing, Home Improvements, News, Taxes, Tax Updates 2008-11-04T12:03:00-05:00 http://ffscambridge.com/blog/post/what_if_youve_failed_to_plan_for_retirement/ http://ffscambridge.com/blog/post/what_if_youve_failed_to_plan_for_retirement/#When:14:59:00Z The most common retirement planning mistake is a sin of omission: often, people just don't make a plan, perhaps because thinking about doing it is overwhelming. A recent Bankrate, Inc. poll showed that only 28 percent of respondents expect to be able to retire comfortably. In last year's version of the poll, 44% of those polled indicated that they were saving 5% or less of their gross income for retirement. This year's stock market collapse and depressed economy will be especially punishing to those close to retirement who were under-prepared.

Read the full article]]> Meeting Your Goals, Retirement, Planning for your retirement 2008-10-29T14:59:00-05:00 http://ffscambridge.com/blog/post/the_irs_wants_to_give_you_money_maybe/ http://ffscambridge.com/blog/post/the_irs_wants_to_give_you_money_maybe/#When:14:15:00Z The IRS is reporting that more than 383,000 regular refund and economic stimulus checks have been returned as undeliverable by the Postal Service.

Taxpayers whose economic stimulus checks are not in the mail by Dec. 31 will lose out, because by law the checks cannot be sent out after that date. If you're expecting a check and haven't received it yet, browse over to the IRS's website and use the Stimulus Payment tool. Addressing errors must be corrected by Nov. 28 in order for checks to be processed in time. The "Where's My Stimulus Payment" tool provides instructions on how to update your address if needed or you can call (866) 234-2942.

Read the full article]]> News, Taxes, Tax Updates 2008-10-28T14:15:00-05:00 http://ffscambridge.com/blog/post/brother_can_you_spare_1228_billion/ http://ffscambridge.com/blog/post/brother_can_you_spare_1228_billion/#When:10:40:00Z Most people thought that the Federal Reserve was being generous when it provided $85 billion to AIG in an equity deal plus $37.8 billion in liquidity lending. As it turns out, that might not be enough to keep the company going.

Read the full article]]> Economy, News 2008-10-28T10:40:00-05:00 http://ffscambridge.com/blog/post/great_example_of_social_engineering_phishing_fraud/ http://ffscambridge.com/blog/post/great_example_of_social_engineering_phishing_fraud/#When:15:00:00Z Today I received another bogus e-mail claiming to be from Melrose Cooperative Bank, a bank with which I do no business. It's such an excellent example of the application of social engineering to phishing fraud that I decided to share it....

Read the full article]]> Identity Theft, Risk Management 2008-10-27T15:00:00-05:00 http://ffscambridge.com/blog/post/fannie_and_freddies_debts_are_not_explicitly_guaranteed/ http://ffscambridge.com/blog/post/fannie_and_freddies_debts_are_not_explicitly_guaranteed/#When:03:08:00Z Last month I wrote that the federal government, in its takeover of Fannie Mae and Freddie Mac, had begun effectively guaranteeing the debt of the two agencies.

But it became clear this week that the government is still hedging about the extent of its backing of the agencies' debts.

Read the full article]]> Economy, Investing, Bonds, News 2008-10-26T03:08:00-05:00 http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_3_turn_on_tune_inget_hacked/ http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_3_turn_on_tune_inget_hacked/#When:02:58:00Z It looks like this week's discussion on identity theft will probably overflow into next week a bit, because I'm finding new information to share. Having discussed some of the social engineering-based approaches to stealing your private information, today I'd like to take a brief look at how you can protect your computers against more subtle forms of attack.

Read the full article]]> Identity Theft, Risk Management 2008-10-25T02:58:00-05:00 http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_2_avoiding_online_id_theft/ http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_2_avoiding_online_id_theft/#When:03:32:00Z Only about 10 to 15% of identity thefts with known causes have been attributed to online data theft, but this statistic is not very reassuring. According to the Identity Theft Assistance Center, only 42% of ID theft victims are able to determine how their information was stolen. If the majority of victims don't know how their information was stolen, it may not be safe to assume that the 10-15% figure accurately represents all ID theft losses attributable to online sources. How can you avoid being victimized online?

Read the full article]]> Identity Theft, Risk Management 2008-10-23T03:32:00-05:00 http://ffscambridge.com/blog/post/markets_wait_for_lehman_cds_payouts_to_settle/ http://ffscambridge.com/blog/post/markets_wait_for_lehman_cds_payouts_to_settle/#When:18:31:00Z The parties involved in the Lehman credit default swap (CDS) auction are settling up today, and everyone is hoping that none of the participants got too badly burned (even if they're hedge funds).

Read the full article]]> Economy, Investing, Bonds, News 2008-10-21T18:31:00-05:00 http://ffscambridge.com/blog/post/fed_moves_to_aid_money_market_funds_a_bit_more/ http://ffscambridge.com/blog/post/fed_moves_to_aid_money_market_funds_a_bit_more/#When:16:17:00Z The Federal Reserve announced this morning that it is creating a Money Market Investor Funding Facility to ease tensions in the short-term credit markets.

Read the full article]]> Cash Flow, Saving, Investing, News, Risk Management 2008-10-21T16:17:00-05:00 http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_1/ http://ffscambridge.com/blog/post/how_to_avoid_identity_theft_part_1/#When:16:25:00Z Since this week is National Protect Your Identity Week, I’ve decided to post a couple of articles that are largely drawn from a newsletter that I wrote a while ago. The threat of identity theft is real, although as I have noted before, ID theft rates don’t seem to be increasing. Even so, if you aren’t taking precautions to avoid identity theft, you make yourself an easy target. Fraud-related theft tends to increase in times of economic crisis, so it’s wise to be cautious.

The National Foundation for Credit Counseling is spearheading National Protect Your Identity Week; you may want to check out their Protect Your ID site, which has a number of useful resources on this topic.

Read the full article]]> Debt, Credit Cards, Identity Theft, Risk Management 2008-10-20T16:25:00-05:00 http://ffscambridge.com/blog/post/blog_action_day_2008_helping_alleviate_poverty/ http://ffscambridge.com/blog/post/blog_action_day_2008_helping_alleviate_poverty/#When:04:01:00Z Today, the FFS Blog is participating in Blog Action Day 2008. Along with over eight thousand 9,700 other bloggers, my topic today is poverty.

Read the full article]]> Blogging, News, Retirement, IRAs, Taxes, Charitable Deductions 2008-10-15T04:01:00-05:00 http://ffscambridge.com/blog/post/what_should_you_do_with_your_401k_when_you_change_jobs/ http://ffscambridge.com/blog/post/what_should_you_do_with_your_401k_when_you_change_jobs/#When:10:46:00Z This is a question that most people will face sooner or later, since labor statistics indicate that the average person entering the workforce will change jobs at least seven times. What follows is a short discussion of some of the key considerations that should be kept in mind as you evaluate this question. This summary is not personalized financial advice; remember that there will be tax and/or other financial consequences depending on what you decide to do.

Read the full article]]> Meeting Your Goals, Retirement, 401(k) plans, IRAs, Roth IRAs, Traditional IRAs 2008-10-14T10:46:00-05:00 http://ffscambridge.com/blog/post/ffs_blog_post_100/ http://ffscambridge.com/blog/post/ffs_blog_post_100/#When:11:44:00Z I had no idea when I began this web log in April that I'd be writing an average of four posts a week. But activity in the financial markets has been extraordinary this year; in addition to the educational posts that I had planned to write, I've written many more posts related to current events than I'd envisioned. There are a number of posts I hope to write in the near future: more on hedge funds, life insurance, charitable giving, the cost of college, buying versus renting, retirement - when I can find the time.

I definitely wasn't planning to write my 100th post right after the biggest down week in the history of the S&P 500 and the DJIA. The turmoil in the markets caused an extraordinary increase in my site traffic. According to Quantcast.com, my average monthly traffic is at 2,300 2,500 people per month and still climbing. I'm not assuming that it will stay that high after the markets calm down, but it will be interesting to see what happens next!

Read the full article]]> Blogging, News 2008-10-11T11:44:00-05:00 http://ffscambridge.com/blog/post/lehman_cds_auction_should_reveal_winners_and_losers/ http://ffscambridge.com/blog/post/lehman_cds_auction_should_reveal_winners_and_losers/#When:18:11:01Z Until now, it hasn’t been entirely clear how much damage will result from the Lehman bankruptcy. An auction taking place today will be an important step in assessing which financial institutions stand to take a hit.

Today’s auction involves a type of security that many people know little about or have only heard of recently: credit default swaps.

Read the full article]]> Economy, Investing, Investing 101, News 2008-10-10T18:11:01-05:00 http://ffscambridge.com/blog/post/fdic_account_insurance_limits_raised_temporarily/ http://ffscambridge.com/blog/post/fdic_account_insurance_limits_raised_temporarily/#When:01:37:00Z As part of the Emergency Economic Stabilization Act of 2008, the level of FDIC insurance coverage has increased as of October 3rd to $250,000. As I noted in an earlier post, it’s possible to have much more than $250,000 of coverage at the same bank, because the coverage depends on the titling of the account.

Read the full article]]> Cash Flow, Saving, News, Risk Management 2008-10-10T01:37:00-05:00 http://ffscambridge.com/blog/post/massachusetts_asks_treasury_for_short_term_credit/ http://ffscambridge.com/blog/post/massachusetts_asks_treasury_for_short_term_credit/#When:17:44:00Z Saturday’s Boston Globe reported that MA Treasurer Tim Cahill has approached the Treasury about extending credit to the state on terms similar to those that have been offered to Wall Street, and the LA Times says that the “Governator” of California has also written Treasury Secretary Paulson to ask for a short-term loan of $7 Billion.

Read the full article]]> Boston/Cambridge/New England, Economy, News 2008-10-09T17:44:00-05:00 http://ffscambridge.com/blog/post/fidelity_and_vanguard_join_treasurys_money_market_guaranty_plan/ http://ffscambridge.com/blog/post/fidelity_and_vanguard_join_treasurys_money_market_guaranty_plan/#When:15:14:01Z Today's WSJ notes that Fidelity, Vanguard, and T. Rowe Price Group have signed up for the Treasury Dept's guaranty fund for money market funds that were held prior to September 19th. Now all the major mutual fund families with large money market funds appear to be participating in the fund (Charles Schwab is also on the list).

Investors wondering about their accounts should check their fund's web site; participating funds seem to be announcing their participation fairly prominently. You may also want to confirm that the specific fund that you own is covered; for example, Schwab's U.S. Dollar Liquid Assets Fund is not included because it's not a U.S.-based money fund.

The guaranty fund will be in effect for at least three months and the Treasury dept. has the option to extend the coverage for a year. I decided to add this post because the blog is still getting a lot of traffic from people with questions about whether their mutual funds or money market funds are insured, and this information might be helpful to them. People with questions might also want to try the Treasury's FAQ page on the money-market guaranty fund.

See a related post here: How Can I Tell If My Money Market Fund Is Safe?

Read the full article]]> Cash Flow, Economy, News 2008-10-08T15:14:01-05:00 http://ffscambridge.com/blog/post/bank_troubles_spread_to_europe/ http://ffscambridge.com/blog/post/bank_troubles_spread_to_europe/#When:01:59:00Z As recently as the end of September, many European commentators were describing the current subprime-ignited financial crisis as evidence of American arrogance. Now, however, the other shoe has dropped, and credit-related sickness is evident in the European banking system too.

Read the full article]]> Economy, Investing, News 2008-10-08T01:59:00-05:00 http://ffscambridge.com/blog/post/financial_planning_yields_a_sense_of_direction/ http://ffscambridge.com/blog/post/financial_planning_yields_a_sense_of_direction/#When:02:17:00Z A recent survey finds that households that have put into place a comprehensive financial plan tend to experience greater confidence during times of market uncertainty than those that don’t. These households also are more likely to be actively pursuing behavior that enhances the likelihood of financial success.

Read the full article]]> Boston/Cambridge/New England, Meeting Your Goals, News, Retirement, Planning for your retirement 2008-10-07T02:17:00-05:00 http://ffscambridge.com/blog/post/saving_for_college_remains_an_elusive_goal/ http://ffscambridge.com/blog/post/saving_for_college_remains_an_elusive_goal/#When:09:44:01Z For the last couple of years, Fidelity Investments has surveyed parents of children under the age of 18 about their plans for future college expenses. The most recent survey of about 3,000 parents, reported in this news release from Fidelity, looks at anticipated college costs and family resources available to pay for college. This year’s survey found that 62 percent are counting on student loans to help cover the cost of their children’s college education.

Read the full article]]> Boston/Cambridge/New England, Economy, Education Planning, News 2008-10-06T09:44:01-05:00 http://ffscambridge.com/blog/post/a_historical_perspective_on_the_current_bear_market/ http://ffscambridge.com/blog/post/a_historical_perspective_on_the_current_bear_market/#When:10:02:00Z Dimensional Financial Advisors is a passive-investment-oriented investment firm closely associated with Eugene Fama, 2003 Economics Nobel Laureate and father of the efficient market hypothesis. Today they sent me a link to a very nice presentation by their vice president, Weston Wellington.

The presentation, “Is It Different This Time?” runs about 18 minutes long and puts the present stock market gyrations into a historical perspective by reviewing some of the “bear markets” of the last 50 years. It’s not overly jargon-filled and should be pretty accessible.

The present market downturn reflects concerns about the non-availability of credit, the extent and duration of the housing market downturn, and the fact that we are probably in a recession. But in the end, if you’re investing for the long term, the question you must to ask is whether you think the economy is going to completely collapse. If not, you should hang on, assuming you’re holding a diversified portfolio that fits your tolerance for risk.

The presentation is marked for general use, so I don’t think I’m breaking any rules by sharing it.

Read the full article]]> Economy, Investing, News 2008-10-02T10:02:00-05:00 http://ffscambridge.com/blog/post/how_should_you_invest_your_emergency_fund/ http://ffscambridge.com/blog/post/how_should_you_invest_your_emergency_fund/#When:00:07:00Z Having discussed why having an emergency fund is a good idea and how big an emergency fund needs to be, I’d now like to talk about investments suitable for an emergency fund.

Read the full article]]> Cash Flow, Meeting Your Goals, Risk Management, Emergencies 2008-10-02T00:07:00-05:00 http://ffscambridge.com/blog/post/making_the_best_of_a_bad_situation/ http://ffscambridge.com/blog/post/making_the_best_of_a_bad_situation/#When:21:12:00Z Congress voted down the Troubled Assets Relief Program (“TARP”) legislation, much to the chagrin of the financial markets. At the moment, the markets continue to be in distress, despite a “dead cat bounce” in stocks today. What should you be doing in terms of your household finances?

Read the full article]]> Cash Flow, Saving, Debt, Mortgages, Economy, Investing, Meeting Your Goals, Retirement, Risk Management, Emergencies 2008-09-30T21:12:00-05:00 http://ffscambridge.com/blog/post/bny_mellonnow_its_personal/ http://ffscambridge.com/blog/post/bny_mellonnow_its_personal/#When:20:59:00Z In June I wrote about Bank of New York Mellon's reported loss of computer tapes containing four million people's personal information. This month, BNY Mellon got around to informing me: I was one of the four million.

Read the full article]]> Identity Theft, News 2008-09-30T20:59:00-05:00 http://ffscambridge.com/blog/post/surveying_the_wreckage/ http://ffscambridge.com/blog/post/surveying_the_wreckage/#When:23:57:00Z Unless you live in Lake Wobegon, it hasn't been a quiet month:

• Fannie Mae and Freddie Mac are in federal conservatorship
• Merrill Lynch is now part of Bank of America
• Lehman Brothers Holdings filed for Chapter 11; its assets have been purchased by Barclay's PLC
• The two investment banking giants left standing, Goldman Sachs and Morgan Stanley, have been converted to bank holding companies
• AIG has received an infusion $85 billion from the Federal Reserve in return for a 79.9% ownership position
• Washington Mutual became the 13th bank failure of the year (and the largest bank failure in U.S. history); the bank's assets have been sold to J.P. Morgan Chase

Read the full article]]> Economy, Investing, News 2008-09-26T23:57:00-05:00 http://ffscambridge.com/blog/post/a_terrific_credit_blog/ http://ffscambridge.com/blog/post/a_terrific_credit_blog/#When:11:25:00Z I've added Credit Slips to my list of great blog links.

The Credit Slips blog is run by seven academics who specialize in debt issues; the blog also fields quite an array of guest authors. Credit Slips has been particularly interesting lately as its writers have weighed in on the bank bailout plan currently under debate. The blog covers all things credit-related, include legislation under consideration, bankruptcy, credit reporting, medical debt, student loans, etc. I’m finding it very interesting reading.

Read the full article]]> Blogging, Debt 2008-09-25T11:25:00-05:00 http://ffscambridge.com/blog/post/high_anxiety/ http://ffscambridge.com/blog/post/high_anxiety/#When:12:03:00Z I don’t write many blog-centric posts, but I’ve noticed something interesting in the past week. Last Monday, as the wizards of Wall Street blinked and the markets went crazy, traffic to the FFS Blog jumped by 4 or 5x. I assumed it was a one-day event, but as you can see from the attached Quantcast graph, traffic on the site has remained higher than normal.



A number of people got here by Googling phrases like, “are mutual funds insured,” “are brokerage firms insured,” and the like. The traffic hasn’t dropped back to where it was, suggesting that there are still a lot of folks anxious about the safety of the financial markets. I hope the information here is helpful to you.

If any of my readers have questions that you’d like me to tackle in the blog, please drop a note to FFSBlog “at” FFSCambridge.com (I’ve avoided using the “at” sign to thwart spammers, but you know to substitute an @ for that). I can’t promise to post on every idea I get – this isn’t my day job, after all – but I’ll seriously consider anything that comes in. Be patient, though.

A final note: readers who would like to get a once-a-week summary of my posts may do so using the new FeedBlitz widget on the upper left-hand side of the blog.

Read the full article]]> Blogging, Investing 2008-09-24T12:03:00-05:00 http://ffscambridge.com/blog/post/how_much_do_you_need_in_your_emergency_fund/ http://ffscambridge.com/blog/post/how_much_do_you_need_in_your_emergency_fund/#When:11:20:00Z In my first post on emergency funds, I discussed why having an emergency fund is a wise idea. The next question is, how big does an emergency fund need to be?

Read the full article]]> Cash Flow, Meeting Your Goals, Risk Management, Emergencies 2008-09-23T11:20:00-05:00 http://ffscambridge.com/blog/post/crisis_equals_opportunity_in_some_bonds/ http://ffscambridge.com/blog/post/crisis_equals_opportunity_in_some_bonds/#When:19:29:00Z The Subprime mortgage mess and its aftermath were partly the result of risks not being priced appropriately. Interest rates for risky mortgages and bonds should have been much higher given the level of risk involved. As financial markets still recover from the aftermath of risk being underestimated, there is a good chance that there are now areas where risk is being overestimated. This week’s issue of Barron’s has two interesting suggestions in this regard.

Read the full article]]> Investing, Bonds, News, Taxes 2008-09-22T19:29:00-05:00 http://ffscambridge.com/blog/post/thinking_about_all_our_risks/ http://ffscambridge.com/blog/post/thinking_about_all_our_risks/#When:19:02:00Z The financial markets seem to be taking a breather after last week’s roller-coaster rides. We’re all digesting the latest news of short-selling restrictions and a $700 Billion stabilization plan for mortgage-related debt. But now is also a good time to step back and think more broadly.

Read the full article]]> Economy, Investing, Meeting Your Goals, News, Retirement, Planning for your retirement, Risk Management 2008-09-22T19:02:00-05:00 http://ffscambridge.com/blog/post/web_based_e_mail_accounts_are_easily_hacked/ http://ffscambridge.com/blog/post/web_based_e_mail_accounts_are_easily_hacked/#When:10:37:00Z Web-based e-mail accounts like Yahoo and GMail provide a lot of convenience, but apparently with convenience comes risk. Prior to the news of the hacking of Sarah Palin’s Yahoo account, I had assumed that this kind of thing required a phishing attack, but now I know better. Tech sites have been speculating about how her account was accessed and it’s been noted that the “lost password” protocols for Yahoo are not hard to beat. A hacker might be able to guess well enough to gain access to your account.

Read the full article]]> Identity Theft, News 2008-09-19T10:37:00-05:00 http://ffscambridge.com/blog/post/how_can_i_tell_if_my_money_market_fund_is_safe/ http://ffscambridge.com/blog/post/how_can_i_tell_if_my_money_market_fund_is_safe/#When:02:15:00Z This Monday, something very unusual happened: a money market fund began trading its shares at 97 cents, instead of a dollar.

Reserve Primary Money Fund (RPFXX) was forced to write down three quarters of a billion dollars of Lehman Brothers debt as a consequence of the Lehman bankruptcy. Even though the debt may eventually be partially paid through the bankruptcy process, as a current obligation the debt has no value. Thus the fund’s share value had to drop, forcing the fund to “break the buck.” On Monday and Tuesday, investors in the fund pulled out $27 billion in response.

FT Alphaville reports that one of Putnam Investments’ institutional money market funds has decided to close and liquidate itself, not because it needs to “break the buck” now, but because of concern that a future run on the fund might force a fire sale of its assets.

Money market funds are normally thought of as stable places to put cash, but even money market funds are not guaranteed not to lose money. How can you judge how safe your money market funds are?

Read the full article]]> Cash Flow, Saving, Economy, Investing, Mutual Funds, News, Risk Management 2008-09-19T02:15:00-05:00 http://ffscambridge.com/blog/post/what_happens_to_your_insurance_policy_when_the_insurer_fails/ http://ffscambridge.com/blog/post/what_happens_to_your_insurance_policy_when_the_insurer_fails/#When:01:10:00Z American International Group, one of the largest insurance companies in the world, has been struggling to stay afloat this week. Moody's Investors Service and Standard & Poor's lowered their ratings on AIG; these downgrades, in turn, trigger clauses in AIG’s contracts with its trading partners that could require the company to raise billions for collateral or penalty payments. It looks as though the federal government has decided to keep AIG from going under.
Still, today insurance policyholders may have been wondering: what happens to my insurance policy if the insurer goes bankrupt?

Read the full article]]> Favorites, News, Risk Management, Life Insurance 2008-09-17T01:10:00-05:00 http://ffscambridge.com/blog/post/are_you_prepared_for_a_disaster/ http://ffscambridge.com/blog/post/are_you_prepared_for_a_disaster/#When:12:43:00Z As residents of Houston and Galveston grapple with the aftermath of Hurricane Ike, it strikes me that every year, some part of the US must deal with a natural disaster. Hurricanes in the Gulf and southeastern states, wildfires and earthquakes in California, and flooding in the Midwest often leave lasting consequences for those living in the affected areas.
Although such events happen relatively infrequently in New England, the region is hardly immune from the possibility of a serious natural disaster. Being prepared for a disaster should be an important part of every household’s risk management strategy.

Read the full article]]> Boston/Cambridge/New England, Risk Management, Emergencies 2008-09-16T12:43:00-05:00 http://ffscambridge.com/blog/post/hitchhikers_guide_to_september/ http://ffscambridge.com/blog/post/hitchhikers_guide_to_september/#When:15:58:00Z Douglas Adams’ Hitchhiker’s Guide to the Galaxy described a fictional intergalactic travel manual of the same name. The guide had the words “DON’T PANIC” written “in large friendly letters” on its cover. Investors could use a copy of the Hitchhiker’s Guide right about now….

Read the full article]]> Investing, News 2008-09-15T15:58:00-05:00 http://ffscambridge.com/blog/post/subprime_lessons/ http://ffscambridge.com/blog/post/subprime_lessons/#When:11:13:01Z The Federal Reserve Bank of Boston recently issued an interesting analysis of the nature of the subprime mortgage crisis in Massachusetts. Using data on mortgages, home equity loans, and deeds recorded between January 1987 and March 2008, the researchers were able to examine in detail the nature of the loans that ended in foreclosure. Some of their conclusions are surprising, while most fall in line with what one might have guessed.

Read the full article]]> Boston/Cambridge/New England, Debt, Mortgages, Housing 2008-09-11T11:13:01-05:00 http://ffscambridge.com/blog/post/on_the_inevitability_of_the_fannie_freddie_bailout/ http://ffscambridge.com/blog/post/on_the_inevitability_of_the_fannie_freddie_bailout/#When:22:36:00Z As the graph below from BlogPulse.com shows, the announcement of the Fannie-Freddie takeover generated a burst of activity in the blogosphere.



In perusing some of the posts on the topic, it looks as though a lot of people are upset at what appears to them to be a bailout. In fact, it is a bailout, but at this point in the game, I think the U.S. Treasury really had very little choice.

Read the full article]]> Debt, Mortgages, Economy, News 2008-09-10T22:36:00-05:00 http://ffscambridge.com/blog/post/fee_only_financial_planning_nerdvana/ http://ffscambridge.com/blog/post/fee_only_financial_planning_nerdvana/#When:18:07:00Z I’m happy, but tardy, to announce that I have been accepted as a member of the National Association of Professional Financial Advisors, a.k.a. NAPFA. I put so much effort into applying that after I was admitted, I forgot to announce it.

Read the full article]]> News 2008-09-10T18:07:00-05:00 http://ffscambridge.com/blog/post/blogs_worth_perusing/ http://ffscambridge.com/blog/post/blogs_worth_perusing/#When:17:15:00Z Finally, I've gotten around to establishing a blog roll for web logs related to things I write about here. I'm inaugurating it with three selections and I thought I’d let my readers know a bit about each one.

Read the full article]]> Blogging, Economy, Housing, Investing 2008-09-10T17:15:00-05:00 http://ffscambridge.com/blog/post/massachusetts_banks_tighten_lending/ http://ffscambridge.com/blog/post/massachusetts_banks_tighten_lending/#When:11:13:00Z Last Friday’s Boston Business Journal reported that banks in Massachusetts have cut back significantly in making both commercial and consumer loans. Also, according to a Federal Reserve Bank of Boston survey, since the beginning of the year, banks have been tightening their approval standards for all kinds of loans.

Read the full article]]> Boston/Cambridge/New England, Debt, Mortgages, Housing, News 2008-09-09T11:13:00-05:00 http://ffscambridge.com/blog/post/a_financial_planner_reviews_the_fannie_and_freddie_show/ http://ffscambridge.com/blog/post/a_financial_planner_reviews_the_fannie_and_freddie_show/#When:15:57:01Z The Treasury Department's much-anticipated plan to prop up Fannie Mae and Freddie Mac has finally been (mostly) revealed. The move should help a bit to keep mortgage markets afloat, but if you're not sure what all the fuss is about, this short primer should help.

Read the full article]]> Debt, Mortgages, Economy, Housing, News 2008-09-08T15:57:01-05:00 http://ffscambridge.com/blog/post/college_financial_planning_warnings/ http://ffscambridge.com/blog/post/college_financial_planning_warnings/#When:17:18:00Z Predators keep an eye out for weakness in their prey. Now that many lenders have left the educational loan market, students and parents will have a harder time finding loans. It’s likely that con artists will take advantage of the situation by cranking up the level of phony financial aid and loan solicitations. SmartMoney.com has a helpful article that decribes college funding flim-flam schemes. The article also points out some useful resources for families seeking scholarships and other sources of college funding.

Read the full article]]> Education Planning, College/Graduate School Loans 2008-09-04T17:18:00-05:00 http://ffscambridge.com/blog/post/why_you_need_an_emergency_fund/ http://ffscambridge.com/blog/post/why_you_need_an_emergency_fund/#When:12:58:01Z Most financial planners advise their clients to have money set aside in an emergency fund. Occasionally my clients ask me why they need to keep money on hand for emergencies.

If you’re like most Americans, once you’ve paid your credit card bills, mortgage, and your other bills, there’s not much left of your paycheck. If you’re someone who lives far below his or her means (by this, I mean that you have two or three thousand dollars a month or more left unspent from your income every month) you have the capacity to cover many typical unexpected expenses, like the sudden failure of your heating system in the middle of winter. If that's your situation, you’re in a position to cover emergency expenses from your cash flow – unless the emergency happened to be the loss of your job, in which case you’d still be in trouble.

The fact is, though, that few households have large amounts of cash flow that go unused from month to month.

Read the full article]]> Cash Flow, Debt, Meeting Your Goals, Risk Management, Emergencies 2008-09-04T12:58:01-05:00 http://ffscambridge.com/blog/post/should_you_buy_shares_in_a_master_limited_partnership/ http://ffscambridge.com/blog/post/should_you_buy_shares_in_a_master_limited_partnership/#When:15:08:00Z Master Limited Partnerships are complicated investments in which you share in the profits from an income-generating business. Most often these partnerships make their money in energy-related businesses. They’re publicly traded and offer certain income tax benefits. They aren’t for everyone, however.

Read the full article]]> Investing, Meeting Your Goals, News 2008-09-03T15:08:00-05:00 http://ffscambridge.com/blog/post/free_credit_reports_and_credit_scores/ http://ffscambridge.com/blog/post/free_credit_reports_and_credit_scores/#When:11:03:00Z As a result of a class-action suit against the Transunion credit bureau, consumers can obtain six to nine months of free credit report and credit score access if they qualify for inclusion in the class.

Read the full article]]> Debt, Credit Cards, News 2008-09-03T11:03:00-05:00 http://ffscambridge.com/blog/post/life_insurance_101_part_3_how_much_life_insurance_do_i_need/ http://ffscambridge.com/blog/post/life_insurance_101_part_3_how_much_life_insurance_do_i_need/#When:11:46:00Z In Part 1 of this series, I explained why people need life insurance; in Part 2, I explained the basics of “how insurance works.” A question that people always have is, “how much life insurance should I buy?” There are various guidelines for estimating how much life insurance one should buy. Alas, they usually lead to the wrong answer.

Read the full article]]> Meeting Your Goals, Risk Management, Life Insurance 2008-09-02T11:46:00-05:00 http://ffscambridge.com/blog/post/plus_college_loan_program_improves/ http://ffscambridge.com/blog/post/plus_college_loan_program_improves/#When:02:20:00Z Recent changes to the PLUS federal student aid program should provide last-minute help for families seeking to fund college or graduate school expense this fall. In light of the failure of the Massachusetts Educational Finance Authority to secure funding for a new round of college loans, students who were counting on MEFA loans are scrambling to find an alternative. With many banks withdrawing from the education loan marketplace, options for loan funding have been shrinking this year.

Read the full article]]> Boston/Cambridge/New England, Debt, Education Planning, College/Graduate School Loans 2008-08-31T02:20:00-05:00 http://ffscambridge.com/blog/post/are_your_investments_insured/ http://ffscambridge.com/blog/post/are_your_investments_insured/#When:09:00:00Z Last week, state regulators closed down the Columbian Bank and Trust Co. of Topeka, Kansas. It was the ninth bank failure thus far this year, and probably not the last. I've written several posts recently on FDIC insurance of bank accounts and CDs, but many investors have far more money in their retirement and brokerage accounts than they do in banks. Since FDIC doesn’t cover these assets, should you be worried?

Read the full article]]> Favorites, Investing, Mutual Funds, Risk Management 2008-08-29T09:00:00-05:00 http://ffscambridge.com/blog/post/boston_housing_prices_stabilizing/ http://ffscambridge.com/blog/post/boston_housing_prices_stabilizing/#When:18:16:01Z The latest version of the Case Schiller Home Price Index, updated through the end of the second quarter, shows a continued decline in the broad housing market. Prices remain down versus 2007, but for April, May, and June, there were small increases in the Boston housing price data. At the end of last month, after a second month of small increases, the Boston Globe ran an article suggesting that local housing market may have turned the corner. Is three-month uptick enough to be confident that the end of the bust is in sight?

Read the full article]]> Boston/Cambridge/New England, Economy, Housing, News 2008-08-28T18:16:01-05:00 http://ffscambridge.com/blog/post/incredible_shrinking_groceries/ http://ffscambridge.com/blog/post/incredible_shrinking_groceries/#When:15:08:01Z Although I’ve been slow to notice it, I’m now certain that it’s true: our food is shrinking.

More precisely, the companies that sell food and consumables are putting their goods into smaller packages and hoping that we won’t notice.

Read the full article]]> Favorites, Cash Flow, Food, News 2008-08-25T15:08:01-05:00 http://ffscambridge.com/blog/post/should_you_dump_your_gas_guzzling_suv_for_a_hybrid/ http://ffscambridge.com/blog/post/should_you_dump_your_gas_guzzling_suv_for_a_hybrid/#When:11:13:00Z Although gas prices have retreated from their highs, the recent surge over $4/gallon is not yet a distant memory. Gas prices have us thinking more about how much we spend on gas. Does it make sense to trade your car in for a fuel-sipping hybrid?

Read the full article]]> Cash Flow, Taxes 2008-08-20T11:13:00-05:00 http://ffscambridge.com/blog/post/visa_announces_real_time_notification_system_to_combat_credit_fraud/ http://ffscambridge.com/blog/post/visa_announces_real_time_notification_system_to_combat_credit_fraud/#When:16:33:00Z Credit card network facilitator Visa, Inc. announced today that it’s piloting a new system that can provide real-time e-mail or text message notification to a cardholder whenever a card transaction is made. Users will be able to define the minimum transaction amounts required to trigger a message. The system can also send a message whenever other triggering events take place: an internet credit card purchase, an overseas card use, or a telephone transaction, for example.

Read the full article]]> Cash Flow, Debt, Credit Cards, Identity Theft, News 2008-08-19T16:33:00-05:00 http://ffscambridge.com/blog/post/industrial_strength_fdic_insurance/ http://ffscambridge.com/blog/post/industrial_strength_fdic_insurance/#When:11:25:00Z The possibility of further bank failures continues to hover in the air. In a June post I explained that under the right circumstances a depositor can have funds in excess of $100,000 insured by the FDIC in a single bank. For cash-holders with serious assets, there is at least one other way to obtain FDIC insurance for really large sums.

Read the full article]]> Cash Flow, Saving, Economy, Risk Management 2008-08-18T11:25:00-05:00 http://ffscambridge.com/blog/post/massachusetts_sales_tax_holiday_this_weekend/ http://ffscambridge.com/blog/post/massachusetts_sales_tax_holiday_this_weekend/#When:09:09:00Z For the fifth year in a row, Massachusetts will have a “sales tax holiday” on purchases of many items costing less than $2,500 on August 16-17. The Commonwealth joins fifteen other states and the District of Columbia in this attempt to boost in-state retail sales by exempting purchases from the 5% state sales tax.

Read the full article]]> Boston/Cambridge/New England, Cash Flow, Saving, Economy, News, Taxes 2008-08-13T09:09:00-05:00 http://ffscambridge.com/blog/post/which_careers_have_been_resistant_to_the_economic_downturn/ http://ffscambridge.com/blog/post/which_careers_have_been_resistant_to_the_economic_downturn/#When:18:12:00Z Jobfox.com, a site that helps match professionals with potential employers, generates a monthly list of the 25 professions most in demand. The site recently released an analysis of twenty professions that have remained in high demand despite the recent slowdown in the economy.

Read the full article]]> Economy, Education Planning, Truly Random 2008-08-12T18:12:00-05:00 http://ffscambridge.com/blog/post/education_loans_jeopardized_by_auction_rate_securities_market_meltdown/ http://ffscambridge.com/blog/post/education_loans_jeopardized_by_auction_rate_securities_market_meltdown/#When:16:55:00Z The Massachusetts Educational Financing Authority (MEFA) announced late last month that it’s unable to raise funds needed to provide fixed-rate private education loans, as it has in the past. Families counting on MEFA loans will be scrambling to find other funds in the next few weeks unless a plan proposed by Governor Deval Patrick succeeds. At the end of the post I offer some last-minute ideas for families who will be facing a funding crunch if MEFA loans do not come through this fall.

Read the full article]]> Boston/Cambridge/New England, Debt, Education Planning, College/Graduate School Loans, News 2008-08-08T16:55:00-05:00 http://ffscambridge.com/blog/post/exchange_traded_funds_101_part_2/ http://ffscambridge.com/blog/post/exchange_traded_funds_101_part_2/#When:10:09:00Z Today’s post continuues Part 1 with a further explanation of this rapidly-growing alternative to the mutual fund. In my initial post I explained that ETFs

• are created by financial institutions in large blocks that can be freely converted into underlying securities
• are transparent, meaning that the underlying securities are publicly disclosed on a continuous basis
• trade continuously on financial exchanges at prices that generally move closely with the underlying securities
• are generally liquid, reflecting the liquidity of the underlying securities
• are usually (but not necessarily) linked to a securities index
• tend to have low management costs

Read the full article]]> Investing, Investing 101, Exchange Traded Funds (ETFs) 2008-08-06T10:09:00-05:00 http://ffscambridge.com/blog/post/ubs_settles_with_ma_over_auction_rate_security_misunderstanding/ http://ffscambridge.com/blog/post/ubs_settles_with_ma_over_auction_rate_security_misunderstanding/#When:04:26:00Z Several MA cities, towns, and the Mass Turnpike Authority received some investment help from Attorney General Martha Coakley recently. Although it’s often assumed that institutional investors are sophisticated in their understanding of investments, the case initiated and settled by the Massachusetts AG shows that even “big” investors sometimes fail to follow one of the cardinal rules of investing: make sure you understand what you’re investing in.

Read the full article]]> Boston/Cambridge/New England, Investing, News, Really Bad Ideas 2008-08-05T04:26:00-05:00 http://ffscambridge.com/blog/post/severe_impact_from_rising_heating_bills_projected_for_massachusetts/ http://ffscambridge.com/blog/post/severe_impact_from_rising_heating_bills_projected_for_massachusetts/#When:03:33:00Z Although most of us are still basking in the joys of summer, winter will be here before we know it. The University of Massachusetts Donahue Institute released a report today projecting the impact of increased energy costs on heating bills in Massachusetts over the next couple of years, and the news is pretty bleak.

Read the full article]]> Boston/Cambridge/New England, Cash Flow, Saving, Housing, Owning a House, Meeting Your Goals, News 2008-08-05T03:33:00-05:00 http://ffscambridge.com/blog/post/exchange_traded_funds_101_part_1/ http://ffscambridge.com/blog/post/exchange_traded_funds_101_part_1/#When:10:02:00Z In the last four years or so, there has been explosion of newly created exchange traded funds (ETFs) in the financial marketplace. What are these investment products, and how are they different from the more familiar mutual funds?

Read the full article]]> Investing, Investing 101, Exchange Traded Funds (ETFs), Mutual Funds 2008-07-29T10:02:00-05:00 http://ffscambridge.com/blog/post/graphing_baby_names/ http://ffscambridge.com/blog/post/graphing_baby_names/#When:17:42:00Z Once in a while, I write about things that are only vaguely related to personal finance. Today I found a really neat site that allows you to visualize the popularity of US baby names. Ever worry that your child won’t be the only “Emma” in her class?

Read the full article]]> Truly Random 2008-07-28T17:42:00-05:00 http://ffscambridge.com/blog/post/tax_breaks_tucked_into_the_latest_housing_bill/ http://ffscambridge.com/blog/post/tax_breaks_tucked_into_the_latest_housing_bill/#When:20:30:00Z The Senate bill passed today provides aid for homeowners on the brink of foreclosure, relief for beleaguered mortgage finance firms Fannie Mae and Freddie Mac, and something else: tax breaks for first-time homebuyers and a deduction for homeowners who normally aren’t able to itemize their deductions.

Read the full article]]> Housing, Buying a House, Owning a House, News, Taxes, Tax Updates 2008-07-26T20:30:00-05:00 http://ffscambridge.com/blog/post/beware_of_phony_e_mails_claiming_to_be_from_the_irs/ http://ffscambridge.com/blog/post/beware_of_phony_e_mails_claiming_to_be_from_the_irs/#When:13:46:00Z Well, it seems late in the year for this, but today I received the first phony IRS e-mail of the season. The message appears to be a “phishing” scam in which I’m suppose to click on a fake IRS link provided in the message. Clicking the link would take you to an official-looking site that would collect confidential information – most likely, the thieves are looking for Social Security numbers. The IRS has noted a number of e-mail and telephone scams involving IRS impersonators; the stimulus rebates this year provide another premise for identity thieves to use as they "reach out" to potential prey.

Read the full article]]> Identity Theft, Taxes 2008-07-26T13:46:00-05:00 http://ffscambridge.com/blog/post/life_insurance_101_part_2_how_does_life_insurance_work/ http://ffscambridge.com/blog/post/life_insurance_101_part_2_how_does_life_insurance_work/#When:10:27:00Z Today I’d like to offer a simple explanation for how life insurance “works.” This discussion will also lay a foundation for discussing the difference between term and permanent life insurance. The first post in this series, on the reasons someone might need life insurance, is worth reading if you're not sure whether you need life insurance.

Read the full article]]> Favorites, Meeting Your Goals, Risk Management, Life Insurance 2008-07-22T10:27:00-05:00 http://ffscambridge.com/blog/post/most_walkable/ http://ffscambridge.com/blog/post/most_walkable/#When:09:59:00Z One solution to soaring gas prices: walk there. A new website that rates how walkable city neighborhoods are gave Boston the number three slot. The site has a nifty mapping feature tied into Google Local that rates “walkability” on the basis of proximity to amenities: parks, restaurants, grocery stores, and the like.

Read the full article]]> Boston/Cambridge/New England, Cash Flow, News 2008-07-18T09:59:00-05:00 http://ffscambridge.com/blog/post/boston_energy_price_surge_continues/ http://ffscambridge.com/blog/post/boston_energy_price_surge_continues/#When:22:29:00Z Yesterday the Labor Department released updated regional figures for inflation from June 2007 to June 2008. Nationally, the CPI-U, which measures inflation for all urban consumers, was up 5%.

Read the full article]]> Boston/Cambridge/New England, Cash Flow, Economy, News 2008-07-17T22:29:00-05:00 http://ffscambridge.com/blog/post/parking_your_cash/ http://ffscambridge.com/blog/post/parking_your_cash/#When:10:24:00Z If you have a longer-term CD that is now coming to maturity, you've probably been disappointed to discover how much interest rates have dropped since you last locked in your CD rate. What are the best options for those with short-to-medium-term cash to invest these days?

Read the full article]]> Cash Flow, Saving, Economy, Investing, Mutual Funds 2008-07-17T10:24:00-05:00 http://ffscambridge.com/blog/post/id_theft_now_a_wholesale_business/ http://ffscambridge.com/blog/post/id_theft_now_a_wholesale_business/#When:17:11:00Z As I've noted elsewhere, there are some data that suggest that the frequency of ID theft may be on the decline. However, there are also indications that the volume of stolen financial data has swelled to such levels that cybercriminals are dropping their selling prices for stolen data.

Read the full article]]> Identity Theft, News 2008-07-15T17:11:00-05:00 http://ffscambridge.com/blog/post/correction_indymac_is_now_kaput/ http://ffscambridge.com/blog/post/correction_indymac_is_now_kaput/#When:23:01:00Z Well, this is a bit creepy. Earlier today I wrote about American Express' arrangement last year with IndyMac Bankcorp and another lender to let mortgage holders make their monthly payments with credit cards. I made a point of saying that IndyMac was still in business. Oopsie - they were in business yesterday, but not today.

Read the full article]]> Debt, Economy 2008-07-11T23:01:00-05:00 http://ffscambridge.com/blog/post/how_not_to_to_pay_for_a_house_with_plastic/ http://ffscambridge.com/blog/post/how_not_to_to_pay_for_a_house_with_plastic/#When:16:04:00Z Many homeowners struggling to keep up with mortgage payments are probably using their credit cards to make ends meet. Now, apparently, people who can't pay their mortgages have a new alternative: they can charge their monthly mortgage payments to a credit card directly. I wish I were making this up, but I'm not.

Read the full article]]> Debt, Credit Cards, Housing, Owning a House, News, Really Bad Ideas 2008-07-11T16:04:00-05:00 http://ffscambridge.com/blog/post/more_social_security_backdoors/ http://ffscambridge.com/blog/post/more_social_security_backdoors/#When:10:11:00Z A couple of months ago, I discussed a loophole in the Social Security law that allows current retirees to pay back the benefits they've received (without interest) and restart the Social Security clock at a higher benefit level. Recently, I discovered two additional unusual Social Security strategies.

Read the full article]]> Retirement, Social Security, Risk Management 2008-07-09T10:11:00-05:00 http://ffscambridge.com/blog/post/frozen_helocs/ http://ffscambridge.com/blog/post/frozen_helocs/#When:14:21:00Z It wasn't that long ago that mortgage lenders were eager to extend credit lines to anyone with a pulse and a property title. Alas, the industry's mood has turned with the swooning of housing prices: frugal caution has displaced wild abandon. Many homeowners, unaware that their lines of credit could be curtailed summarily, have been unpleasantly surprised.

Read the full article]]> Debt, Mortgages, Economy, Housing, News 2008-07-08T14:21:00-05:00 http://ffscambridge.com/blog/post/its_official_boomers_are_the_gloomiest_generation/ http://ffscambridge.com/blog/post/its_official_boomers_are_the_gloomiest_generation/#When:09:19:01Z The Pew Research Center Social and Demographic Trends Project reported last week that Baby Boomers, who turn 44 to 62 this year, are slightly (but significantly) more pessimistic about their lives than other adults.

Read the full article]]> News, Retirement 2008-07-03T09:19:01-05:00 http://ffscambridge.com/blog/post/life_insurance_101_part_1_why_do_i_need_life_insurance/ http://ffscambridge.com/blog/post/life_insurance_101_part_1_why_do_i_need_life_insurance/#When:10:27:00Z Everyone has heard of life insurance and most people have some; it’s not an exotic concept. Yet for the average person, buying life insurance means signing the most complex contract you'll ever enter into. This will be the first of a series of short primers on life insurance: why people need it, how it works, how much to buy, what kind to buy.

Read the full article]]> Meeting Your Goals, Risk Management, Life Insurance 2008-07-01T10:27:00-05:00 http://ffscambridge.com/blog/post/irs_raises_business_mileage_rate_for_last_half_of_2008/ http://ffscambridge.com/blog/post/irs_raises_business_mileage_rate_for_last_half_of_2008/#When:13:59:00Z The IRS announced last week that the business mileage rate, often used to determine the deduction for business use of a car, will go up effective July 1st.

Read the full article]]> News, Taxes, Charitable Deductions, Tax Updates 2008-06-30T13:59:00-05:00 http://ffscambridge.com/blog/post/some_days_you_get_the_bear_and_some_days_the_bear_gets_you/ http://ffscambridge.com/blog/post/some_days_you_get_the_bear_and_some_days_the_bear_gets_you/#When:14:41:00Z Wall Street is licking its wounds this weekend, no doubt, after being pretty badly clawed by what is almost certainly a bear market. In the coming days you’ll see all sorts of articles offering you free advice, e.g. identifying “Bear Market Stocks You Should Buy Now,” providing lists of the mutual funds into which you should put all your money, and so forth. What should you do?

Read the full article]]> Economy, Investing, Investing 101, Meeting Your Goals, News 2008-06-28T14:41:00-05:00 http://ffscambridge.com/blog/post/interest_rates_for_college_loan_consolidations_drop_next_week/ http://ffscambridge.com/blog/post/interest_rates_for_college_loan_consolidations_drop_next_week/#When:17:14:00Z The studentloanconsolidator.com blog noted a while back that new rates for Stafford and PLUS loans have been set; these are based on the Treasury Bill auction rates. There's further information in their Stafford loan blog. Starting July 1st, consolidation loan rates will drop significantly.

Read the full article]]> Cash Flow, Debt, Education Planning, College/Graduate School Loans, News 2008-06-26T17:14:00-05:00 http://ffscambridge.com/blog/post/will_gas_prices_drive_homebuyers_out_of_the_suburbs/ http://ffscambridge.com/blog/post/will_gas_prices_drive_homebuyers_out_of_the_suburbs/#When:04:38:00Z Over the last fifty years, suburban neighborhoods outside of cities grew for a variety of reasons: families wanted more space than city homes provided, urban crime rates were higher than now (peaking in the 1960's and 70's), and the idealized vision of suburban life grew in popular imagination to become a mark of prestige. Less consciously, perhaps, suburban living was enabled by cheap gas and good roads; the "driveable suburb" within striking distance of city jobs became the ideal place in which to build a home. In the 1948 film, "Mr. Blandings Builds His Dream House," Cary Grant played an advertising executive whose family flees its cramped New York apartment for a country home in Connecticut. For Jim Blandings, trains enabled the commute; that wasn't the case for most workers who decamped from the cities. The ability to drive to and from work relatively cheaply made the suburban "dream house" possible.

Read the full article]]> Economy, Housing, Buying a House 2008-06-26T04:38:00-05:00 http://ffscambridge.com/blog/post/extreme_college_planning/ http://ffscambridge.com/blog/post/extreme_college_planning/#When:03:18:00Z Most middle-class parents aren’t looking forward to the cost of sending their kids through college. For those of you who really want to get a head start, here’s a scheme that will help maximize your college savings, albeit via rather quirky means.

Read the full article]]> Cash Flow, Meeting Your Goals, College Savings Planning 2008-06-25T03:18:00-05:00 http://ffscambridge.com/blog/post/should_you_be_shopping_for_a_foreclosure/ http://ffscambridge.com/blog/post/should_you_be_shopping_for_a_foreclosure/#When:10:11:01Z One of the consequences of the subprime debacle is a sharp rise in foreclosed properties. Some areas are especially bad off; in May, the majority of homes sold in the Sacramento area were foreclosures. Foreclosures nationwide were up 48% in May vs.the previous year (RealtyTrac.com), and in Massachusetts they were up 32% (ForeclosuresMass.com) over the same period. The rate in MA would have been higher but for a new law that went into effect May 1st, forcing lenders to delay foreclosure proceedings by an additional 60 days. There seem to be quite a few ads claiming that great deals are available through foreclosure sales. Is buying foreclosed property a "can't-fail" way to make money?

Read the full article]]> Boston/Cambridge/New England, Economy, Housing, Buying a House, Residential Property Investing 2008-06-23T10:11:01-05:00 http://ffscambridge.com/blog/post/massachusetts_trounces_the_golden_state_in_high_tech_again/ http://ffscambridge.com/blog/post/massachusetts_trounces_the_golden_state_in_high_tech_again/#When:02:18:00Z On three occasions since 2002 the Santa Monica-based Milken Institute has ranked the states on the basis of how well they’re competing in the knowledge economy. For the third time in a row, Massachusetts ranks #1, while California slid from second to fourth place. Encouragingly, four of the top ten states are in New England.

Read the full article]]> Boston/Cambridge/New England, Economy, News 2008-06-21T02:18:00-05:00 http://ffscambridge.com/blog/post/how_much_fdic_insurance_can_i_have_at_one_bank/ http://ffscambridge.com/blog/post/how_much_fdic_insurance_can_i_have_at_one_bank/#When:10:02:00Z Most people understand that the FDIC insures certain kinds of bank deposits, like bank CDs. There's no way to “guarantee” an investment against losses, but an FDIC-insured deposit is probably the closest most of us will ever come to a guaranteed investment. However, consumers are sometimes a bit confused about how much FDIC insurance coverage they can have.

Read the full article]]> Favorites, Cash Flow, Saving, Retirement, Planning for your retirement, Risk Management 2008-06-19T10:02:00-05:00 http://ffscambridge.com/blog/post/buffetts_bet/ http://ffscambridge.com/blog/post/buffetts_bet/#When:10:03:00Z Legendary investor Warren Buffett has made an interesting wager with the management of a New York hedge fund. Buffett is betting that over the course of ten years, the hedge fund won’t be able to outperform a passive S&P 500 index fund after fees are considered.

Read the full article]]> Investing, Hedge Funds, Passive vs. Active, News 2008-06-18T10:03:00-05:00 http://ffscambridge.com/blog/post/are_you_financially_literate/ http://ffscambridge.com/blog/post/are_you_financially_literate/#When:10:32:00Z The University Of Michigan Retirement Research Center recently published a brief summarizing the results of several surveys of financial knowledge. The studies suggest that many Americans need help understanding financial and economic fundamentals. How financially literate are you?

Read the full article]]> Blogging, Investing, News, Retirement, Planning for your retirement 2008-06-17T10:32:00-05:00 http://ffscambridge.com/blog/post/tax_refunds_going_to_iras_may_cause_snafus/ http://ffscambridge.com/blog/post/tax_refunds_going_to_iras_may_cause_snafus/#When:10:40:00Z Taxpayers who previously set up their tax refunds to be deposited directly to their IRAs this year will need to be vigilant: Economic Stimulus rebate checks will also be automatically deposited into any IRAs whose owners have set them up to receive tax refunds.

Read the full article]]> News, Retirement, IRAs, Taxes, Tax Updates 2008-06-12T10:40:00-05:00 http://ffscambridge.com/blog/post/its_a_good_time_to_hire_a_contractor/ http://ffscambridge.com/blog/post/its_a_good_time_to_hire_a_contractor/#When:09:01:00Z In the Boston area – and probably elsewhere – residential contractors are looking for work. For most of the last 20 years, and especially in the last decade, it’s been hard to find contractors willing to do small renovation jobs, but with the slump in residential construction, there appears to be window of opportunity.

Read the full article]]> Boston/Cambridge/New England, Economy, Housing, Owning a House 2008-06-10T09:01:00-05:00 http://ffscambridge.com/blog/post/wheres_my_rebate_check/ http://ffscambridge.com/blog/post/wheres_my_rebate_check/#When:10:15:00Z If you're wondering about the rebate check you're expecting under the Economic Stimulus Act of 2008, the IRS has a website that enables you to check the status of your stimulus payment. You'll need to provide your Social Security Number, filing status, and the total number of exemptions shown on your 2007 return.

Read the full article]]> Taxes, Tax Updates 2008-06-09T10:15:00-05:00 http://ffscambridge.com/blog/post/cool_boston_fed_tool_maps_ma_foreclosures/ http://ffscambridge.com/blog/post/cool_boston_fed_tool_maps_ma_foreclosures/#When:03:48:00Z Elsewhere I've written about the localized nature of housing markets. I just discovered that there's a very cool resource at the Boston Federal Reserve Bank website that lets you map foreclosure and subprime mortgage exposure for each MA city and town.

Read the full article]]> Boston/Cambridge/New England, Economy, Housing, Buying a House 2008-06-06T03:48:00-05:00 http://ffscambridge.com/blog/post/stupid_ira_tricks/ http://ffscambridge.com/blog/post/stupid_ira_tricks/#When:10:58:00Z April 15 has come and gone, so the opportunity to make a 2007 IRA contribution is firmly behind us. As you think about your 2008 contributions, here's a list of IRA slip-ups that you probably want to avoid.

Read the full article]]> Meeting Your Goals, Retirement, IRAs, Traditional IRAs, Taxes 2008-06-04T10:58:00-05:00 http://ffscambridge.com/blog/post/we_promise_to_guard_your_social_security_number_next_time/ http://ffscambridge.com/blog/post/we_promise_to_guard_your_social_security_number_next_time/#When:02:04:00Z It’s wise to do whatever you can to protect your confidential information, but some ID theft losses are impossible to avoid. According to Computerworld.com, four million or so customers of Bank of New York Mellon recently learned this the hard way.

Read the full article]]> Identity Theft, News 2008-06-04T02:04:00-05:00 http://ffscambridge.com/blog/post/mutual_funds_and_fees/ http://ffscambridge.com/blog/post/mutual_funds_and_fees/#When:10:45:00Z How much do you pay each year in mutual fund fees? Investors who ignore this question stand to lose a considerable percentage of their investment returns over the long-term.

Read the full article]]> Investing, Investing 101, Mutual Funds 2008-06-02T10:45:00-05:00 http://ffscambridge.com/blog/post/dows_costs_are_up_yours_are_next/ http://ffscambridge.com/blog/post/dows_costs_are_up_yours_are_next/#When:22:19:00Z In response to rising natural gas and petroleum prices, Dow Chemical announced yesterday that it would increase some of its basic and specialty chemical prices by as much as 20%. The effect of Dow’s increases won’t be felt immediately by consumers, but expect other companies to follow suit. Smart shoppers will need to become smarter.

Read the full article]]> Favorites, Cash Flow, Food, Economy, Meeting Your Goals 2008-05-29T22:19:00-05:00 http://ffscambridge.com/blog/post/what_about_income_replacement_funds/ http://ffscambridge.com/blog/post/what_about_income_replacement_funds/#When:11:42:00Z Recently the mutual fund industry has introduced a new type of financial product targeted at Baby Boomers: income replacement funds. Fidelity has initiated several of these funds and Vanguard's versions of the same idea, known as "managed payout" funds, were rolled out earlier this month. Other companies will doubtless follow their lead; Schwab and John Hancock are reportedly working on similar products. Like any investment product, these funds will be useful for some people. Consumers should be certain that they understand these funds in order to avoid any unpleasant surprises.

Read the full article]]> Favorites, Investing, Annuities, Mutual Funds, Retirement, Planning for your retirement 2008-05-29T11:42:00-05:00