Are Robo-Advisors Worth It?

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robo-advisor

Are Robo-Advisors good enough at what they do? As most regular readers of this financial planning blog know, I used to be a professional Certified Financial Planner for several years. That gives me a lot of insight into just what a financial advisor does and does not do for their clients, and how much that is worth. Susie Orman is a former financial planner who decided that the whole profession was basically rubbish. Other former financial advisors are now out there saying that these professionals are indispensable. The truth, as with most things lies somewhere in between. So, how does a robo-advisor stand up to a real financial advisor? Are robo-advisors safe? And, most importantly, are robo-advisors worth it? What Is Robo-Advisor? Let’s start with getting some facts straight. First, robo-advisor is a fancy, sensational term for bold headlines. The reality is that the so-called robo-advisors are just computer programs that build an investment portfolio, usually out of mutual funds and ETFs, for you. There are no robots sitting behind desks anywhere (although that would be cool.) Second, a robo-advisor isn’t an advisor or financial planner so much as an investment manager. Robo-Advisor vs Financial Planner The reason these things …

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Best 529 Plan Wisconsin Residents

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529 plan options wisconsin

The best 529 plan for Wisconsin residents depends on how you want to invest funds for your child or other beneficiary. Students may attend any college or university in any state regardless of any investment in the Wisconsin 529 plan. For example, you can save in a Wisconsin 529 plan and your daughter can go to Duke and your son can go to Stanford. Likewise, you do not have to use the Wisconsin 529 plan even if you live in Wisconsin. However, you may not get the state tax benefits from a plan managed by a different state. Tomorrow’s Scholar Wisconsin 529 Plan Option The Tomorrow’s Scholar plan is offered by Voya and it offers 3 ways to invest. Edvest Wisconsin 529 Plan Option Details The Edvest Wisconsin 529 Plan investment options. Find out about the Colorado 529 plan here. Wisconsin Taxes 529 Plans Wisconsin 529 plan contributions are not tax-deductible on federal income taxes. The maximum contribution limit for a Wisconsin 529 plan state tax deduction is $3,380 for a single beneficiary in the tax year 2021. The maximum contribution deduction in 2022 is $3,560 for a single beneficiary. There is no limit on the number of beneficiaries that …

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Why Are Roth IRA Better for Young Adults

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why roth ira best for younger people

There are several different retirement account types, so why is Roth IRA better for young adults? What makes Roth IRA best for certain people? Can older people still benefit from Roth IRA? Why Are Roth IRA Good? A Roth IRA is one of several tax-advantaged retirement accounts. Like the traditional IRA, all money deposited in a Roth IRA grows tax-free. There are no capital gains taxes on a Roth IRA and no taxes on dividends or interest earned inside a Roth IRA. Why Is a Roth IRA Better Than a 401k for Younger People? What makes a Roth IRA so good is that unlike both traditional IRAs and employer sponsored retirement plans like 401(k)s is that withdrawals from Roth IRA are tax-free. With traditional IRAs or 401k plans, withdrawals are taxable even if you are over 59 1/2. However, you cannot deduct your contributions to a Roth IRA. Why Do a Roth IRA? So, what makes a Roth IRA better for younger people? As a younger person, the money you put into a Roth IRA will have much more time to grow. So, all things being equal, a younger person will end up with a higher amount of earnings in …

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What Determines a Bear Market

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Technically speaking, the stock market is already in a “correction.” A correction is defined as a drop of more than 10%. So, what qualifies as a bear market? What is meant by a bear market, and perhaps most importantly of all, is this a bear market? What Constitutes a Bear Market? Just like a correction is defined as a drop of 10% or more in the stock market, a bull market is defined as a drop of 20% in the markets. How do you measure for a bear market? First you have to pick an index, or other indicator for your measuring. A popular one is the S&P 500. Then, you calculate from the tippy top of your market indicator, and when it gets 20% lower than that, then you can call a bear market. Technically, there should also be widespread negative sentiment, and some of that stuff, but a financial website writer on a deadline likes hard numbers. So, according to the folks over at MarketWatch, we will be in a bear market if the S&P 500 closes below 3.837.25, then we have ourselves a bear market. Obviously, if this is a real bear market, it will do more …

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S&P 500 Hits 52-Week Low

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sp500 52 week lows

Now, things are getting interesting. There is a new SP500 52-week low. I’ve spent most of the first part of this year making the argument that the 2021 stock market run, especially the October 21 to January 22 was overdone and that the corresponding downturn in the markets from around February 2022 to April 2022 could be considered more of a return to “normal” than any sort of market correction. Reasonable minds may differ. Market Downturn Gets Real Today, the S&P 500 took out its 52-week low. From here on out, everything down, is truly down. Our one big sideways stock market ends here, and we really are heading for a potential correction here. This is why people calling for the Fed to raise interest rates so fast are dead wrong. The signs of the economy slowing, but not declining, are everywhere. That is exactly where you want to be. That is what a soft landing is. An economy gliding back to normal growth, normal employment, and normal interest rates all without triggering layoffs, housing crashes, and so on. All the Fed needs here is a little tap on the brakes. If it were me, I would skip a rate …

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Colorado Tax Refunds 2022

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colorado tax refund summer tab

This summer, Colorado sales tax refunds are coming via check to everyone who filed Colorado income taxes by June 30, 2022. If you filed after that, you might be out of luck, or some people will get their Colorado Tabor refund 2022 in early 2023. Update: The checks are in the mail! What Is This Colorado Summer Tax Refund? This is the Tabor tax refund that Colorado taxpayers normally get when they file their taxes. If you’re new to Colorado politics and government, taxpayers passed a law back in 1992 called the Taxpayer Bill of Rights, or TABOR. Among other things, it limits the amount of tax revenue the state can collect each year to an increase based upon inflation and population growth. If the state collects too much money, then it must refund the excess to taxpayers. This is often referred to as the TABOR surplus by politicians, and the TABOR refund by Coloradoans. How Colorado TABOR Refunds Usually Work The Colorado government runs on a fiscal year that runs from July to June, not a calendar year from January to December. Normally, when the fiscal year ends in June, the Colorado state government counts all of the tax …

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FAFSA Scam on FAFSA.com

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fafsa real website

A FAFSA scam is a bad way to start off your hunt for financial aid. If you, or someone you know, is going to college, or starting at a university, then chances are you need to apply for financial aid. Even if you don’t think you’ll qualify, there are often partial grants, federal loans, and various work-study programs that can help pay for college. Remember: the legit FAFSA website is FAFSA.gov. To apply for any federal financial aid, you’ll need to fill out a form called the FAFSA, the Free Application for Federal Student Aid. This form requires you to submit detailed financial information, which is verified against IRS records, and requires you to sign that all information is true under penalty of perjury. This is better than anyone else can really do as far as verifying your financial status, so many other financial aid grantors, including the universities themselves, rely on your submitted FAFSA. You have to fill out a FAFSA every year you are in college to continue to qualify for need-based financial aid. This is not one of those programs where you fill something out once. The easiest way to submit your FAFSA is online at fafsa.gov …

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SoFi Banking Scam or Legit – A SoFi Banking Review

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sofi banking

Taking another look at what SoFi offers. This time we are all about SoFi Banking reviews. Is SoFi Banking a Scam? SoFi Banking, including SoFi checking and SoFi savings are products of SoFi Bank, which is a member of FDIC. FDIC membership comes with numerous rules and regulations that are actively policed by several federal regulators. So, we can be quite sure that SoFi is not a scam at least in the stealing your money and disappearing sense. In fact, even if SoFi goes bankrupt, FDIC insurance ensures that you won’t lose a penny, up to $250,000 per account. Is SoFi Banking Legit? So, is SoFi Banking legit? Yes, but like many companies the bold face type, and look here hand waving, hides a few catches to SoFi Banking you might want to keep an eye on. Let’s take a review of SoFi banking and see what it offers. First, SoFi banking offers a very good 1.25% interest rate on your checking and savings deposits. That makes SoFi Checking and SoFi Savings worth having because that is the highest interest rate on savings or checking that you will find that applies to the whole balance. (Lots of banks advertise the …

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Are Colorado Payday Loans Legal and a Good Idea?

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colorado payday loans interest

Payday loans have gotten a bad rap, and deservedly so. Payday lenders have behaved in a predatory manner. However recent payday loan rules and regulations have eliminated some of the worst abuses. While a payday loan should be no one’s first choice, when used properly, for the short-term only, a pay day loan may be better than missing out on an opportunity or avoiding a problem. So, are Colorado payday loans legal and are they a good idea? Colorado Payday Loans Law Coloradoans passed Proposition 111 during the 2018 elections. That law capped the interest rate on payday loans at 36%. Colorado law also sets a payday loan maximum in Colorado of $500. In addition, lenders may only charge financing fees up 20% for the first $300 and $7.50 for each additional $100 loaned. The law also limits the interest rate on loan renewals in Colorado to 45%. Only one rollover is allowed. If your repayment does not go through due to non-sufficient funds (NSF), the maximum fee is $25. The minimum term on payday loans in Colorado is six months, but you should pay it off sooner to avoid accumulating more interest. All Colorado payday loans laws apply to …

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Finance Press Headlines

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stock market headlines

Oh, the financial press loves their dramatic headlines. Sometimes in order to make the stock market more interesting, you have to give people a little bit of whiplash. Whew! What a difference a day makes. Yesterday, it was the “best day in 7 weeks.” Today, it’s the “worst month since 2008.” Overall, the market is still moving sideways, although we are getting a bit of a drift down and things might change especially as the Fed raises interest rates to cool off inflation. Remember, inflation cools off when the economy cools off. That’s the dance. Go too far to stop inflation and you can push the economy into a recession.