How To Help Your Kids Manage Money In The Digital World

So in a world of online banking, prepaid cards and contactless – how can parents teach their children the value of money – and the importance of taking control of it?

1. Introduce them to digital money early. 

If you use online banking or debit cards then your child will be exposed to ‘virtual money’ almost from birth. “If virtual money is already part of your family life, don’t forget to show your growing child this bit as well,” the Money Advice Service states

They advise showing your kids the balance on your current account online or on an app. Then use your card to shop for food, before showing your child the balance again so they can see how it’s less than before. Do the activity again before and after withdrawing cash, or shopping online. To give them a clear idea of the impact of spending on your finances, even when coins and notes don’t change hands.

2. Teach your kids how to learn more about their money online.

Helen Saxon, chief product analyst at Money Saving Expert, advises getting your kids to investigate what they can find out about their bank account online, starting with interest rates: “Get your kids to monitor the rate of the account, so they’re involved. Put your child in charge of checking the interest every month to see if it’s still paying a decent rate – maybe bookmark the bank’s interest rate page on your web browser so it’s easy to find.” 

3. Make sure they know the online safety risks. 

Fraud and scams in the online banking world are more sophisticated than ever so it’s vital to start teaching them basic safety from a young age, according to Saxon.

“You’ll need to help them pick a password, and help them learn they shouldn’t share this with anyone (read the HuffPost UK guide on how to create a strong password, here),” she said. “Get them to use your email address (or a family one that you can access) so you can discuss any emails from the bank (and filter out any spam ones). And tell them to tell you immediately if anyone asks them for money from their account.” 

New money challenge will save you £1500 in 2018 – and you won’t notice you’re doing it

‘Start saving more money.’

For many of us, this New Year’s resolution is pretty high up the list for 2018.

However, along with cutting down on takeaways and going to the gym three times a week, there is a good chance it won’t last past January.

But don’t panic, because we might have found an easy solution which could save you £1,500 in the year – the 365-day Money Saving Challenge.

It’s really simple

And the best part is you probably won’t even notice you’re doing it.

Apartment Therapy ‘s money saving challenge starts on a Sunday, when you put away just £1.

On the Tuesday you put aside £2, and Wednesday £3.

Keep going like this all week, so on the Saturday you’re saving £7.

Money savings jar (Pic: Getty)

You will end up with a lot of cash by the end of the year

Then on Sunday start all over again, going back to £1.

It might not sound like a lot but it adds up to £28 a week which, if you do it every week in 2018, will save you an impressive £1,500.

That’s a lot of cash. You could buy a new car, treat the kids or even top up the house deposit saving pot.

Or (dare we mention it…) it could just help you out with Christmas 2018.


However if this doesn’t appeal to you, the Penny Challenge is another New Year saving technique.

It’s also really simple, and sees you put away your spare pennies.

You start with 1p and build up everyday throughout the year. Your pot at the end of the year isn’t as big at £667.95 , but it’s still a great sum for your loose change.

To begin with, you put in 1p on day one – you’ll then put in the equivalent amount of pennies to the day of the year:

  • Day 1: Put in £0.01

  • Day 2: Put in £0.02

  • Day 3: Put in £0.03

Continue until…

  • Day 100: Put in £1.00

  • Day 101: Put in £1.01

  • Day 102: Put in £1.02

And so on…

Good luck, and happy saving!

How To Best Manage Your Money During Market Corrections

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Feb. 12, 2018. U.S. stocks advanced as Treasury yields erased their climb, with financial markets looking to stabilize after the worst week in two years for American equities. Photographer: Michael Nagle/Bloomberg

The series of sudden drops in the stock market recently, which seemed to come out of nowhere after a long, epic run, struck panic in the hearts of many investors. Especially those who are counting on Wall Street for a major share of their retirement savings.

Friday, Feb. 2 saw the biggest one-day drop for the SP 500 since September, 2016 and capped the worst weekly decline for both the Dow Jones Industrial Average and the SP 500 in more than two years. The selloff followed an unexpectedly rosier jobs report, which major investors took as a sign that aggressive interest rate hikes were on the way. 

There was more bad news a week later: Feb. 5 saw the worst drop in history — a 1,175-point decline–that followed by another 1,033-point plunge in the Dow Jones industrial average on Feb. 8. That put losses in the recent sell-off to more than 10 percent, putting the market into correction territory. USA Today said the stock market’s drubbing has been fueled by fears that the era of low-interest rates and modest inflation that drove up stock prices may be coming to an end.

But let’s not let financial panic get in the way of sound decision-making.   We’ve had a long period of boom — the Dow Jones Industrial Average has nearly quadrupled in value since the  March, 2009 depths of the Great Recession.  The Dow zoomed 25% higher last year and continued to rally into the new year.   The 1,100-point drop in the Dow Jones Industrial Average sounds like a lot but it amounted to a decline of less than 5 percent. 

What can we learn from some earlier meltdowns? On Oct. 19, 1987 the Dow Jones Industrial Average plunged a whopping 22.9 percent, wiping out more than 20 percent of the value of U.S. leading companies. But within a year it was back up to pre-crash levels. 

In the meltdown of 2008-2009, the Dow Jones Industrial Average lost about half its value in less than a year; it bottomed out at 6,547 on March 9, 2009. People who bailed out of the market at that point lost about half their money and are unlikely ever to regain it.  People who did not pull out of the market stayed invested as the market recouped its loss in about three years. 

As for the infamous stock market crash of 1929, which launched the Great Depression, consider this: someone who had invested a lump sum in the average stock at the market’s high and kept it in through the crash, would have been back to break-even by late 1936. 

There’s a reason for the “stay the course” mantra practiced by such famed investors as Warren Buffet. If you need reassurance, speaking with a pro who has weathered market turmoil many times should help you calm down.  Your financial advisor can help you calmly review your goals, reassess your risk and perhaps reset your investment strategy. 

How to save money in 2018: Japanese Kakeibo method could slash …

Survival covers food, transport and health related spending, while optional refers to shopping, restaurants and takeaways.

Culture is for books, films, and music, while extra means gifts or home repairs.

At the end of each week, a reflection box encourages savers to check whether they are on track to meet their target.

This forces savers to be aware of where their cash is going, and enables them to make changes. It also highlights any spending that may have got out of control without being noticed, such as takeaways or cabs.

Olympic medalist Chris Mazdzer sets sights on financial planning …

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Chris Mazdzer of the United States reacts during the Luge Team Relay on day six of the PyeongChang 2018 Winter Olympic Games at Olympic Sliding Centre on February 15, 2018 in Pyeongchang-gun, South Korea.

Fresh off of an Olympic win, luge athlete Chris Mazdzer is already eyeing a second career in financial planning.

Mazdzer made history when he won a silver medal in the men’s singles luge on Feb. 11, making him the first American to ever win a medal in the event.

“It’s incredible,” Mazdzer said of the win. “It was hard to believe until it was put around my neck.”

Mazdzer said he sees the triumph as an opportunity to give back to the sport, including the 33 male athletes who shared his Olympic dreams.

“If you are a luge athlete, you give your entire life to this sport,” Mazdzer said. “I can go to those 33 guys, to the organization, sponsors, everyone who has volunteered, given everything for this sport and be like, ‘We did it.'”

More from Advisor Insight:
The bad things people do with 401(k) plans
What sort of insurance do you need?
Most consumers confused about credit, debt

Mazdzer, 29, is already thinking of other ways he can give back.

Mazdzer, a Massachusetts native, was first exposed to luge — which he describes as “ultimate sledding” — at 8 years old. He was drawn to luge over bobsledding because the line was shorter and you could get more runs in. “It was just the most fun I could have in the winter,” Mazdzer said.

At 13 years old, he travelled to Europe on his own as part of the junior national team.

“I wasn’t the strongest athlete. I wasn’t the best luge athlete,” Mazdzer said. “But if you told me to chop off my hand because I would go faster, I would do it. I was very passionate.”

Traveling without his parents forced Mazdzer to “grow up pretty quickly.” He had to keep up with his schooling remotely, which required discipline.

He was also exposed to another challenge: managing money.

“The U.S. Luge Association does a fantastic job providing the financial resources to make this feasible,” Mazdzer said.

But to make that money stretch farther, there is a lot of economizing.

“We’re not staying in nice accommodations, by any means,” Mazdzer said. “We budget the whole time.”

If the team can reduce expenses by $5 to $10 per person, and there are 10 to 15 people on the road for 60 days, that adds up to thousands of dollars in savings, he said.

“I wasn’t the strongest athlete. I wasn’t the best luge athlete … But if you told me to chop off my hand because I would go faster, I would do it. I was very passionate.”
-Chris Mazdzer, Olympic athlete

“We’re very budget conscious and that allows us to support athletes in Europe at a really good rate,” Mazdzer said.

But because the schedule is so grueling, it is hard for the athletes to find time to work. Consequently, many of them face financial challenges.

“I have tons of stories of athletes trying to struggle and make the Olympic team, because that’s the environment that I’m in,” Mazdzer said.

Seeing those experiences has motivated Mazdzer to help.

Mazdzer, who has a bachelor’s degree in business administration with a concentration in finance from DeVry University, is now studying to become a certified financial planner. He plans to sit for the exam this fall.

“I would love to have the opportunity to make that difference in someone’s life,” Mazdzer said. “Money is a pretty serious part of everyone’s life, whether we choose to accept it or not.”

Chris Mazdzer of the U.S. luge team competes in Lake Placid, New York, in December 2017.

Mazdzer ultimately plans to combine financial planning with life coaching to help clients such as executives and athletes achieve their goals and give back to others.

He’s also focused on another ambition: competing in the 2022 Winter Olympics in Beijing.

“I feel that there’s a lot more that I can give back to the sport as an athlete,” Mazdzer said. “With luge we’re at a pivotal time, with a lot of new extreme sports coming in.

“There’s some positive changes that we can make, and I would love to be a part of this process of building this sport for the future.”

Lorie Konish



Hedge-Fund Mediocrity Is the Best Magic Trick

Hedge funds have accumulated $3 trillion, with a substantial portion of it coming from public pensions. That these funds don’t deliver outperformance is almost beside the point. What they are selling is an inflated estimate of expected returns. This serves a crucial purpose for elected officials, letting them lower the annual contributions states and municipalities must make to the pension plans for government employees.  

It is a dodge that everyone goes along with. When the bill comes due in a few decades, this will cost taxpayers a bundle. 

It really is one of the more astounding market inefficiencies that so much money has been allocated to hedge funds. I have no issue with those funds that have consistently beaten a simple investment mix of 60 percent broad equity indexes and 40 percent in bond funds. It’s the rest of group that is so problematic. In much the same way that the world’s worst index fund manages to stay in business, it is a challenge to explain why so much money has found its way to so much mediocre performance. Behavioral explanations can only go so far.

A recent Bloomberg Businessweek column looked at this issue. The conclusion: The investment managers often share their lofty fees (traditionally 2 percent of assets under management plus 20 percent of any gains) with placement agents who hawk the hedge funds, especially to pension funds. Some states have banned their pension plans from using the agents, but not enough of them have done so.  

But this only explains why some people are motivated to go out and sell an underperforming investment product. It doesn’t answer the core question of why so many investors buy them.

As the Businessweek article noted: “Hedge funds that invest in stocks returned 7.2 percent annually from 2009 to 2017, which was less than half the SP 500’s return, according to data from Hedge Fund Research.” Even if you don’t like the Standard Poor’s 500 Index as the benchmark, it’s worth noting that hedge funds have also underperformed pretty much every other benchmark out there.

If this were small change we were talking about, it wouldn’t be such a big deal and I’d have an easier time keeping my outrage in check. But the scale of the assets allocated to hedge funds is large, and getting larger. According to Fortune, “Since 2005, state and local pension plans have sharply increased their exposure to alternative investments, including private equity, real estate and hedge funds, from 9% of portfolios, on average, to 24%.” Other estimates put the figure even higher: According to Leland Faust, founder of CSI Capital Management, “More than half of the $3 trillion held in hedge funds nationwide is pension fund and retirement plan investments.”

Whether it’s trillions of dollars or merely hundreds of billions of dollars, it is still a lot of money not being put to the best use. This only exacerbates the underfunding crisis facing U.S. pension plans. The Economist magazine noted that the average U.S. public-sector pension was only 68 percent funded, according data compiled by the Center for Retirement Research at Boston College.

The continuing puzzle is why hedge funds continue to be so successful in selling their underperforming products, especially to public-pension plans. We have looked at the issue before, and have considered the principal-agent problem — in other words, those with no skin in the game make the investing decisions for those who do. Pondering that puzzle has led to a few surprising conclusions.

The best explanation I can find is this: Those who manage pension plans and pools of assets put money into hedge funds based on expected returns, not actual performance. The likely expected rates of return for hedge funds have proven to be works of fiction, fantasies made up out of whole cloth. There simply is no rational basis for making the claim that hedge funds will deliver an expected return higher than equities.

Future expected returns should be estimated by looking at historical returns of an asset class, then applying a probable estimate of outcomes.


1

 This is done for stocks, bonds, cash, real estate and so on. Hedge funds, however, are not a discrete asset class. Calculating expected returns doesn’t generate a reliable or real number. Instead, it is an exercise in making assumptions — about the skill of the manager, the process employed to make decisions and how replicable past above-market returns might be.

It is at best a guessing game.

This is the heart of the problem. Pension-plan managers aren’t dumb; but as I noted at the start, there is an obvious reason they intentionally buy a false promise of higher returns. 

Vena Announces New Integrated Planning Functionality

ALBANY, N.Y. and TORONTO, Feb. 15, 2018 (GLOBE NEWSWIRE) — Vena Solutions, the fastest growing provider of cloud-based corporate performance management (CPM) software, today unveiled its latest product release to make the promise of integrated financial planning a reality for medium and large sized organizations. New functionality in the release includes support for collaboration across departments, improved modeling for business users, and new data discovery and analysis capabilities.

“Taking the top spot for usability on the recent Nucleus Research CPM Value Matrix, Vena has proven its software is accessible and user-friendly for finance applications including budgeting, planning, forecasting and financial close management. In this release, Vena is delivering the same value for integrated financial planning,” said Joe Mathias, research analyst at Nucleus Research. “From its Excel integration to new collaboration and data discovery features, Vena is bringing integrated planning to companies through a single application to reduce complexity and provide new avenues of financial insight.”

Vena offers a unique approach to managing financial processes such as budgeting, planning and revenue forecasting by combining Excel integration with enterprise-grade features including a centralized cloud database, workflow automation, reporting and analytics. Unlike traditional, rigid and hard-to-use solutions, Vena is the easiest way for finance professionals to get trusted insights – fast. With this release, Vena offers the easiest way to implement real, company-wide integrated financial planning.

“Integrated financial planning is a best practice that is often discussed but rarely fully realized,” said Rishi Grover, chief solutions architect at Vena Solutions. “Today’s release offers new features designed to help companies overcome the most common roadblocks to adopting the practice. It’s the latest example of Vena’s dedication to our customers’ success and track record of industry-leading customer satisfaction.”

Key features and benefits of Vena’s new integrated planning functionality include:

Collaboration across business units for smarter, more comprehensive plans.

  • Further engage financial planning stakeholders with improved report books and automated report distribution through PowerPoint and Excel.
  • Make business planning decisions based on readily available facts with Vena’s document embedding and collection features.
  • Always work with up-to-date information and guaranteed data integrity, with ETL job fail notifications and automated ETL job scheduling. 

Data discovery and analysis to make the best decisions with all the right information.

  • Drill further into your data, to parent or transactional levels when required.
  • Find important information faster with improved search functionality and page option viewing with Vena’s detailed audit trail data.

Easy modeling for finance and business users.

  • Improve modeling efficiency and simplified maintenance with shared dimensions.
  • Manage process variables more efficiently by viewing and editing processes without having to open separate templates for each process.

As a matter of practice, Vena’s latest release also includes updates for the continuous improvement of its software performance, ease of use, user adoption and engagement. Vena’s new functionality is available to existing and new clients today. Pricing is built into the company’s annual subscription plans. To learn more, visit: www.venasolutions.com.

For more information visit:

About Vena Solutions
Vena Solutions redefines how medium and large sized companies manage their budgeting, planning and revenue forecasting. Vena combines a centralized database, sophisticated workflow, powerful reporting and advanced analytics with Excel to create a cloud-based corporate performance management (CPM) solution. The best companies in the world use Vena to get trusted numbers and insights fast. Vena is the fastest growing cloud CPM company and recognized industry leader in customer satisfaction. Visit us at www.venasolutions.com.
 
Media Contacts
Danielle Salvato-Earl                                                             Michael A. Corcoran
Offleash for Vena Solutions                                                   Vena Solutions                          
(650) 922-7287                                                                      (416) 529-5709
vena@offleashpr.com                                                            mcorcoran@venasolutions.com 

 

Stock Picking Is a Lost Art in Japan

When Sean Taylor took a job at a Swiss money manager more than a decade ago, there were plenty of analysts looking at Japan. Now it’s under-researched, and companies undergoing the biggest changes to how they’re run can go undiscovered, he says.

With markets such as China taking center-stage in recent years, many investment firms have shifted away from granular analysis of individual Japanese stocks, said Taylor, who’s now chief investment officer for Asia Pacific at Deutsche Asset Management, which oversees $887 billion. Their focus on macro strategies means they miss opportunities to locate the companies benefiting the most from the country’s drive to make firms more shareholder-friendly.

This year, Japan plans to update the corporate governance code it introduced in 2015, urging companies to make sure outside directors account for at least a third of the board, according to local media reports Thursday. While the rules are not legally binding, firms must explain to shareholders if they choose not to follow them. Return on equity at companies in the benchmark Topix index has doubled from the quarter before Prime Minister Shinzo Abe returned to power in 2012.

“As a wide market, Japan is very under-researched compared to others,” said Taylor. Sometimes companies that need improvement are “where you can make the most money — an investment that needs to be better and the managements are willing to change. If you can be on the ground and you’ve got people who can pick up these companies, there’s a lot of alpha.”

Japanese companies with market values from $2 billion to $10 billion have an average of eight analyst recommendations tracked by Bloomberg, compared with 16 in the U.K and 12 in the U.S. and Hong Kong.

Japan introduced a stewardship code in 2014, seeking to create better dialogue between institutional investors and company management aimed at making firms more profitable. The complementary governance rules that followed the next year provided a set of best practices for firms to follow. Other steps included starting a stock index designed to showcase the country’s best-run firms.

allocated funds to ESG — environmental, social and governance — investing, and even hired a so-called friendly activist to manage some of its money.

There is still far to go. While share buybacks and dividends have surged, scandals at companies including Kobe Steel Ltd. and Toshiba Corp. have raised fresh concerns, and many firms still cling to cross-shareholdings. Activist investor Oasis Management Co. has pushed some of Japan’s most iconic conglomerates to treat minority shareholders better, with varying degrees of success.

Local Analysts

For Taylor, who was referring to his move to Swiss money manager GAM’s London office in 2004, the key is to pick to firms that haven’t improved their governance yet but whose management is willing to change. That depends on having people on the ground in Japan, he says. Taylor declined to talk about individual stock picks, citing company policy.

“We have this bottom-up change happening,” Taylor said. There’s a lot of opportunity “if you can pick the winners.”

Madison Mill Gives Away Piles of Free Wood

Madison Mill is located at 15 Bluegrass Drive, just off Highway 12 in Ashland City. From Briley Parkway, it is nine miles, turn left on Bluegrass Drive and plant and pile is on your left. Take as much as you want – the wood is free! The parking lot is open 24 hours but there are no lights on the lot, so daylight loading is advised. For more of Ms. Cheap’s money-saving ideas, visit her website www.tennessean.com/cheap and follow her on Twitter @Ms_Cheap.

Olympic medalist Chris Mazdzer sets sights on financial planning career

<!– –>


Chris Mazdzer of the United States reacts during the Luge Team Relay on day six of the PyeongChang 2018 Winter Olympic Games at Olympic Sliding Centre on February 15, 2018 in Pyeongchang-gun, South Korea.

Fresh off of an Olympic win, luge athlete Chris Mazdzer is already eyeing a second career in financial planning.

Mazdzer made history when he won a silver medal in the men’s singles luge on Feb. 11, making him the first American to ever win a medal in the event.

“It’s incredible,” Mazdzer said of the win. “It was hard to believe until it was put around my neck.”

Mazdzer said he sees the triumph as an opportunity to give back to the sport, including the 33 male athletes who shared his Olympic dreams.

“If you are a luge athlete, you give your entire life to this sport,” Mazdzer said. “I can go to those 33 guys, to the organization, sponsors, everyone who has volunteered, given everything for this sport and be like, ‘We did it.'”

More from Advisor Insight:
The bad things people do with 401(k) plans
What sort of insurance do you need?
Most consumers confused about credit, debt

Mazdzer, 29, is already thinking of other ways he can give back.

Mazdzer, a Massachusetts native, was first exposed to luge — which he describes as “ultimate sledding” — at 8 years old. He was drawn to luge over bobsledding because the line was shorter and you could get more runs in. “It was just the most fun I could have in the winter,” Mazdzer said.

At 13 years old, he travelled to Europe on his own as part of the junior national team.

“I wasn’t the strongest athlete. I wasn’t the best luge athlete,” Mazdzer said. “But if you told me to chop off my hand because I would go faster, I would do it. I was very passionate.”

Traveling without his parents forced Mazdzer to “grow up pretty quickly.” He had to keep up with his schooling remotely, which required discipline.

He was also exposed to another challenge: managing money.

“The U.S. Luge Association does a fantastic job providing the financial resources to make this feasible,” Mazdzer said.

But to make that money stretch farther, there is a lot of economizing.

“We’re not staying in nice accommodations, by any means,” Mazdzer said. “We budget the whole time.”

If the team can reduce expenses by $5 to $10 per person, and there are 10 to 15 people on the road for 60 days, that adds up to thousands of dollars in savings, he said.

“I wasn’t the strongest athlete. I wasn’t the best luge athlete … But if you told me to chop off my hand because I would go faster, I would do it. I was very passionate.”
-Chris Mazdzer, Olympic athlete

“We’re very budget conscious and that allows us to support athletes in Europe at a really good rate,” Mazdzer said.

But because the schedule is so grueling, it is hard for the athletes to find time to work. Consequently, many of them face financial challenges.

“I have tons of stories of athletes trying to struggle and make the Olympic team, because that’s the environment that I’m in,” Mazdzer said.

Seeing those experiences has motivated Mazdzer to help.

Mazdzer, who has a bachelor’s degree in business administration with a concentration in finance from DeVry University, is now studying to become a certified financial planner. He plans to sit for the exam this fall.

“I would love to have the opportunity to make that difference in someone’s life,” Mazdzer said. “Money is a pretty serious part of everyone’s life, whether we choose to accept it or not.”

Chris Mazdzer of the U.S. luge team competes in Lake Placid, New York, in December 2017.

Mazdzer ultimately plans to combine financial planning with life coaching to help clients such as executives and athletes achieve their goals and give back to others.

He’s also focused on another ambition: competing in the 2022 Winter Olympics in Beijing.

“I feel that there’s a lot more that I can give back to the sport as an athlete,” Mazdzer said. “With luge we’re at a pivotal time, with a lot of new extreme sports coming in.

“There’s some positive changes that we can make, and I would love to be a part of this process of building this sport for the future.”

Lorie Konish