Financial Floyd Blogspot

Good Morning, Have you ever had a dilemma of what to do with some extra money after you either refinanced some debt or paid off a huge liability? Last week an article in Business Insider made me think about this dilemma because a financial planner was explaining the difference of paying off a mortgage early or investing the savings. Key points from the article are: Because rates are so low, the homeowners should refinance when possible based on rates being so low In the case presented investing the refinance savings netted a difference of almost $100K over 15 years The best decision was to refinance the house (keeping the number of years the same of debt outstanding the same) and invest the savings along with the increase in earnings This is a great article highlighting why we should be aggressive with lowering interest rates on debt outstanding combined with the time value of money principle. What I liked about this article is that the author indirectly exposed that ...

Good Morning, Earlier this month I came across an article on MarketWatch mentioning the Wealth Scale that Bloomberg created. I read the article and found it quasi depressing and thought it wasn’t worth blogging about. After reading a couple more articles and diving deeper into the original Bloomberg content I felt it was a necessary article to blog about. A couple of key points I pulled from the article were: Thee scale seems weird but is based on the exponents using a base of 10 The median American household has a net worth between $10k- $100k There are only two people in the extreme bucket Globally there are not a lot of millionaires  The reason why I found this article slightly depressing is that based on the net worth numbers presented most people are just struggling to get by. Stressing savings is the right thing to say, but the best message based on the data is to live within our means. While I cannot speak on a global scale, within the US our consumption o...

Good Morning, I don’t know about you, but I love a good bargain. Whether it is a 10% discount or a BOGO (Buy One, Get One Free), I’ll always consider the option. The same can be said with financial advice. Everyone is searching for great advice at a discount price (hence why you are also reading this). Last week Financial Planning published an article about Schwab because they are considering creating a Robo-advisor for 401k programs. The key points from the article are: Vanguard has a Robo-advisor that currently is for accounts which have over $3,000 and the Robo-advisor utilizes a glide path similar to their mutual fund product This new product/offering can help with asset allocation and better decision making habits around investing The article points out that these products are available and accessible, but the one thing not mentioned is customization. Most of the off the shelf products are based on assumptions which might not be true for all individuals. The be...