Estimating the future cost of college

Estimating the future cost of college

David Creekmore
Common Questions, Life Goals, Education

College has a big impact on a family’s long term finances. It’s a large expense that comes relatively quickly in the family financial lifecycle, so there isn’t a lot of time to see salary improvements and allow for beautiful, beautiful compound interest to do its magic. Most of us know college prices have gone up a lot faster than the Consumer Price Index, our general benchmark for inflation. But how much faster? What should you and I assume today about the cost of four-year college in 18 years?

The affordable insurance you need (and probably don't have)

The affordable insurance you need (and probably don't have)

David Creekmore
Common Questions, Insurance

What is umbrella insurance? It’s liability insurance. It pays for your legal expenses and losses if sued for a variety of incidents related to injuries to other people, some lawsuits, and damage to other people’s property. It doesn’t protect you from professional or work issues and it doesn’t protect your property or costs in an accident. Why do you need it? It’s strictly to help pay the costs of someone else’s misfortune, for which you are somehow financially responsible.

A better way to manage your emergency fund.

A better way to manage your emergency fund.

David Creekmore
Life Goals, Common Questions

The question I get the most is ‘Should I invest my emergency fund in the stock market?’ Bank interest rates are at all-time lows and are not rising with interest rate hikes any time soon. Banks have enough consumer deposits and don’t need to compete. With inflation surging and the S&P 500 returning a blistering 14.36 % for the last 10 years, it’s painful to see your .5% bank account lose money in real terms.

You've changed, bonds. Not cool

You've changed, bonds. Not cool

David Creekmore
Investing

If you checked your 401k statement for the last quarter, you lost money. (If you didn’t, I want to invest with you!) Even your usually boring and reliable bonds are down a lot. Bonds, broadly, are down more in the last three months than any same period since 1980. Worse, they are going down at the same time stocks are going down, another rare occurrence. Since last September the entire US bond market is down more than the entire US stock market by 5 percent!

The hidden problems in your nonprofit 403(b)

The hidden problems in your nonprofit 403(b)

David Creekmore
Retirement, Nonprofit Employment, Investing

What is a 403(b) and why does it exist? If you’ve ever asked you were probably told ‘it’s the nonprofit version of a 401(k)’ and that’s true more or less. The 403(b) was indeed created by Congress 1958 specifically for nonprofit organizations. It is the grandparent of the 401(k). 403(b) plans are fine if set up correctly, but there are many bad ones with lousy investments and high fees sold to trusting nonprofits by consultants and brokers that are not fiduciary financial advisors.

The most important investing concept you won’t find explained on the internet 

The most important investing concept you won’t find explained on the internet 

David Creekmore
Investing, Stocks, Common Questions

You are no doubt familiar with the group of mostly anonymous investors who last year coordinated the leveraged buying of GameStop, AMC, and other stock options, pushing up the price to the point that some hedge funds lost a lot of money. It was a good David and Goliath story and a new development in consumer investing. When I placed my first and only stock trade for GameStop in January of 2021, it was not with the idea that I believed in the stock. I simply wanted to see what it was like to buy into a frenzy. (I’ll cut to the chase; it was terrifying.)

A six-month lookback. I should put ‘Virgin’ in more of my titles. 

A six-month lookback. I should put ‘Virgin’ in more of my titles. 

David Creekmore
Values

Six months ago, I wrote my first weekly piece for this newsletter, or blog if you prefer. Since then, many people have joined this little community and it’s growing quickly. Each of these articles requires research, it’s not just musings. For every post you see here, there are dozens of articles read, half blogs written, and notes on scores of topics for future use. In the long run the real benefit of writing this blog is that it keeps me better informed for clients.

Pursuing "enough" is harder than pursuing "more."

Pursuing "enough" is harder than pursuing "more."

David Creekmore
Life Goals, Values, Estate Planning

Imagine you pass away and leave $75,000 in a bank account (approximately the median inheritance for the 50th-90th percentile of total wealth.) That sum represents money you didn't you didn't need to earn, right? Effectively, says author of 'Die with Zero' Bill Perkins, you worked for 'free'. I would add you might have missed out on experiences (like travel) . You could have taken an amazing safari or two with that money!

Are you paying hidden fees in your nonprofit 401k?

Are you paying hidden fees in your nonprofit 401k?

David Creekmore
Nonprofit Employment, Investing

According to Morningstar.com, smaller 401k plans, which includes most nonprofit orgs, are paying double the 401k fees of larger plans. Smaller 401k plans are defined as $25M total plan assets or smaller and make up 27% of the nation's 401k assets. Though fees have come down over time, small 401k plans have total expenses that are more than double the national retail investor average and larger 401k plans. That difference, .47%, doesn't sound like much but it is. In the meantime, how do you find out if your plan is expensive?

The two best funds for investing in democracy... and why I don’t use them

The two best funds for investing in democracy... and why I don’t use them

David Creekmore
Investing, Values

In 2007, Trish and I took the girls abroad to France, the UK and Ukraine, as my late wife's ancestors were from that area. As kids, 3 and 6, my daughters played on the Volga. Our hearts are with the people, the defenders, the vulnerable, and the families losing loved ones. I shed no tears for the men causing this war — my cynicism expects them to not suffer deeply. For nearly two decades of my professional life, I worked for international nonprofit organizations promoting rule of law, freedom of speech and fair elections. So where are the Socially Responsible Investing funds supporting democracy?

I-Bonds are all the rage!

I-Bonds are all the rage!

David Creekmore
Investing

I-bond purchases in the last two months of 2021 were almost equal to purchases the entire five years prior. They are offering 7.12% interest at the moment are very safe. If you can wait a year to get your money back a bit like a CD, they are an incredible choice for your ‘safe’ money.

Some things cannot be adequately explained to a virgin.

Some things cannot be adequately explained to a virgin.

David Creekmore
Investing, Life Goals, Common Questions

The other week, a client called me from Mexico on her new vanlife journey around North America. She has modest assets and is trying to define herself less by her job, which she is doing part-time remotely. I’m proudly responsible for the financial plan supporting her life goal. I mentioned to her that the US stock markets were down over 11%. “Oh yeah, look at that,” she said, reviewing her online statements, with interest but not worry. If, like her, you were living your best life last month and not paying attention to the stock market, kudos. It’s not good for investor health or wealth to pay close attention to stock market returns.

You won't believe how much your pension is really worth.

You won't believe how much your pension is really worth.

David Creekmore
Retirement, Investing, Life Goals

On a coarse level, it was the German Empire under William I and Otto von Bismarck that created the first general (non-military) welfare program for older workers introducing the concept of retirement for the working class. It was a plan, along with mandatory health insurance, to counter growing support for Marxism. One would get a modest pension from the state at age 70, a seemingly cynical choice for a population with a life expectancy in the mid 40’s that was declining.

Can you protect your investments from inflation?

Can you protect your investments from inflation?

David Creekmore
Common Questions, Investing

Last week I wrote about who is exposed to inflation risk and identified low-income workers and retirees as the most endangered. To minimize exposure to inflation risk retirees can use both planning techniques or investment strategies. One planning technique we don’t like is to simply spend less, although sometimes that’s the best choice. Technically, one could die younger. We really do not like that. But the math undeniably works. But, here are some planning techniques I do like.

How will you change your life?

How will you change your life?

David Creekmore
Life Goals, Values

My favorite book last year was the “The Myths of Happiness” by Sonja Lyubomirsky. In a year end ‘best of’ post, the website and magazine Financial Planning featured my book choice along with the favorite titles of a dozen other planners. Having come through my own tough life events, I opened this practice wanting to help people on a deep level.

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