Fee-Based vs. Commission-Based Financial Planners

In the world of financial planning, a variety of factors may affect the advice one receives from an advisor. I’ll tell you an obvious one: a company which sells their own products. Without volunteering names, you probably will if you haven’t already, bumped into this kind of business. Be aware when meeting with an advisor or broker that does so, that his/her advice may be slanted towards selling in-house products- which sometimes pay higher commissions to the selling broker. Even if current law requires this sort of incentive to be disclosed, good luck reading through and understanding financial disclosure documents.

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The Difference Between Stocks and Bonds

Many people don’t understand the differences between stocks and bonds. It occurred to me recently that even those who invest in these types of securities through either personal investment accounts or retirement plans can’t really articulate what the differences are. I’ve noticed that people have a general idea- such as associating stocks more with risk and bonds more with safety, but that’s about the extent of it. While both are types of investments which can earn you money, they are different as night and day in terms of the potential risks and rewards.

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A Lesson on College Funding

The cost of college funding has taken center stage for financial planners in recent years. The reason for this is the dramatic increase in cost, averaging 8% annually for the past 30 years. The average cost for a private college education, including tuition, housing, books, and spending money is approximately $157,000 for a 4-year private university. The costs for a state school are more reasonable, but still alarming at $68,000. While scholarships, grants, and both state and federally funded loans are available to students and their parents, some people like to pay in advance. For this reason we investigate the savings plans which are most conducive to meeting college costs.

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