All Things Financial Planning Blog

There are lots of things that don’t make sense on any given day but sometimes it feels like lots of things don’t make sense in a relatively short time frame. That’s what it has felt like to me in this new  year 2010 and I wanted to share some of them. Maybe these are things that make you “hmmmm” too. 

The government shut down for 4 to 4.5 days in February this year (you would think it would be obvious how many days it is, but it’s the government after all and it depends on which source you read) and at $100 million a day it was certainly expensive. What makes you go “hmmmm” though is that few people seemed to notice that it was even shut down. Since the world didn’t end (or blink) couldn’t we consider doing this on a monthly basis?

Reuters reports that there is little ethical discussion of what activity is ethical or not in a modern economy, even though 2/3 of those asked at the World Economic Forum said they believe our current problems are the result of a crisis of ethics and values.

There is this basic law of nature (the financial kind) called Time Value of Money and in a nutshell, it says it’s better to save the dollar you have today and earn either interest or invest it versus waiting until more time passes to do either. An essential piece of this is that once time has passed, it can never be recovered. So waiting to save and invest costs you many more dollars in the future than today. What makes me go “hmmmm” on this one is that when you’re young, full of energy and optimism and presumably healthy, this would be an ideal time to start saving up to 20% of your gross income so that later when a spouse, kids, house, job changes, starting a business, retirement come in later, you can weather those changes more easily and those early savings have been spending their days compounding! It’s like an installment plan in the direction of your dreams.

The turf regulatory wars may not require brokers and other colleagues to put their client’s interests ahead of their company’s interest. This is pretty basic — do you want your financial professional to put you first or their company first? Your legislators are not in agreement that you should be put first — “hmmmm.”

The average taxpayer gets a refund close to $3,000. If any of the taxpayers who are getting large refunds are also carrying credit card debt, they could be reducing their debt by simply lowering their withholding. 

There are lots of head scratching things going on in the world — lots of things that make you go “hmmmm”.

Bonnie Hughes, CFP®
Principal
American Capital Planning, LLC
Reston, VA / Miami, FL