Informed Choice Radio 105: Jordan Goodman, America’s Money Answers Man

ICR105_ Jordan Goodman, America's Money Answers Man(1)

Informed Choice Radio 105: Jordan Goodman, America's Money Answers ManIn this episode of Informed Choice Radio, I speak to Jordan Goodman.

Jordan E. Goodman is “America’s Money Answers Man” and a nationally recognised expert on personal finance.

He is a regular guest on numerous radio and television call-in shows across the United States, answering questions on personal financial topics.

Jordan appears frequently on The View, Fox News Network, Fox Business Network, CNN, CNBC and CBS evening news.

He is the author or co-author of 13 best-selling books on personal finance including Master Your Debt, Fast Profits in Hard Times, Everyone’s Money Book, Master Your Money Type, Barron’s Dictionary of Finance and Investment Terms, and Barron’s Finance and Investment Handbook.

In this episode of Informed Choice Radio, I speak to Jordan about his background and experience over the past 35 years as America’s Money Answers Man. We chat about his favourite book, some of the biggest personal finance issues he comes across and several interesting solutions to these.

Jordan shares a number of interesting website links in this podcast and I need to remind listeners that these are for information purposes only. As always, Informed Choice Radio does not offer financial advice and you should seek professional independent financial advice before making important financial decisions.

Welcome to America’s Money Answers Man with Jordan Goodman, in episode 105 of Informed Choice Radio.

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Some questions I ask

-What is his mission in life?

-He’s author or co-author of 13 best-selling personal finance books. Which was his favourite and which does he believe had the biggest impact on readers?

-Jordan is a prolific speaker and seminar leader; what are the big personal finance issues he comes across on a regular basis and does he have solutions to every problem?

-Does he have a view on the economy? How is the US and global economy positioned following the global economic crisis and are American households in better shape now than they were at the time of the sub-prime mortgage crisis?

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Useful links mentioned in this episode

  • http://www.moneyanswers.com/
  • http://commercialrealestateincomefunds.com/
  • https://truthinequity.com/
  • https://loangencentral.azurewebsites.net/

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Price inflation continues to rise

Price inflation continues to risePrice inflation continues to rise last month, according to the latest set of official figures.

The Consumer Prices Index (CPI) measure of price inflation rose from 0.5% to 0.6%.

This inflation was pushed higher by rising fuel prices, more expensive alcoholic drinks and hotel rooms.

The Office for National Statistics (ONS) also reported an increase in the Retail Prices Index (RPI) measure of price inflation, which rose to 1.9% in July from 1.6% in June.

July’s RPI inflation rate is important because it sets the limit for rises in regulated rail fares in England, Scotland and Wales next year.

Commenting on the latest inflation figures, Anna Stupnytska, Global Economist at Fidelity International, said:

“UK inflation should continue heading higher in the coming months, as the weak pound pushes up the cost of imports further.

“The extent of sterling depreciation seen thus far, around 18% in trade-weighted term since the end of 2015, could boost inflation by more than 1%, with the peak likely to occur in 2017.

“As the Bank of England announced in August, they are intending to look through higher inflation overshooting the target of 2% and keep monetary policy loose to help the economy navigate through the Brexit-related uncertainty.

“For savers, this results in a ‘double whammy’, as rising inflation and falling yields eat away their savings. For consumers, rising inflation will lead to higher spending on everyday items including food.

“This reflects further bad news for the UK economy, with NIESR estimating a 0.2% month-on-month contraction in GDP for July (around 2% annualised).

“While this remains only an estimate for now, we begin to get the first hard data on the economy later this week, with the release of the unemployment report on Wednesday and retail sales on Thursday.

“I expect the hard data to start picking up the collapse in confidence survey in the aftermath of the referendum, at least to some extent.

“With the Brexit negotiations likely to last for some time, the related drag on growth will weigh on the economy over the next few months, despite the easy monetary policy and a potential fiscal boost likely to be announced in the Autumn budget.”

The price inflation figures published today are the first to have been collected since the EU referendum result.

Commenting on the figures earlier today, Aviva pointed out that it would be premature to reach any conclusions about the impact of the result on prices.

They did however note that the price of alcohol rose by 0.5% between June and July 2016 compared to a fall of 2.5% between the same two months last year.

This was primarily due to a rise in the price of wine which will have been impacted by the recent fall in the price of sterling.

Aviva pointed out that the headline CPI inflation figure of 0.6% is an average, but shopping habits differ by age.

Their analysis of typical shopping habits of different age groups and the price movements of different services and goods unveils a very different experience for different age groups.

The analysis found that the under 30s are experiencing above average price inflation – nearly three times the level experienced by those aged 75+.

They noted that in areas where the young spend more of their money – e.g. education and hotels – prices are rising.

In areas where the young spend less of their money – e.g. food and non-alcoholic drinks – prices are falling.

Commenting on the analysis, Alistair McQueen Savings & Retirement manager said:

“Across all ages, inflation has not been at current levels for over a year. The under-30s, in particular, are facing a double-whammy. Prices are rising faster in areas where they spend more, and rising slower, or falling, in areas where they spend less. These underlying differences are often hidden when we plan our finances.

“Price movements are outside anyone’s direct control, but this does not mean we are powerless to act.

“There are two actions we can take to manage the impact of inflation. Firstly, careful and constant budgeting helps us manage the impacts of price movements. A simple understanding of money coming in and money going out will help defend us against “hidden” price movements.

“Secondly, making any savings work harder to counter the effects of inflation makes good financial sense. An individual savings account (ISA) and a pension, with their positive tax advantages, would be a good place for many savers to begin.”

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Surge in demand for gold

Surge in demand for goldThe Bank of England cut in interest rates earlier this month appears to have prompted a surge in demand for gold.

The Royal Mint has reported a 25% increase in transactions on its bullion website during the same week interest rates were cut from 0.5% to 0.25%.

It also saw a 50% increase in demand for gold bars and coins, compared to the previous week.

Year to date, gold has risen in value by 45% in sterling terms since the start of 2016.

In US dollar terms, the price of gold is up by 25% during the same time.

The World Gold Council recently reported that global investment demand for gold has reached a record level during the first six months of the year.

Consumer demand in India and China, where demand for gold is usually the highest, reported lower demand in the first half of the year.

According to Geir Lode, Head of Global Equities at Hermes, the current environment of low rates and economic uncertainty could mean gold as an investment asset class is set to shine.

In a recently published briefing note, Lode explained that historically gold has been seen by investors as a safe haven protecting the downside in a portfolio.

Over the next two to three years, Hermes believe an increased allocation to gold is likely due to macro-economic uncertainty, higher geopolitical risk, and low or even negative interest rates.

Lode pointed out that the US 10 year bond is currently trading at a yield of approximately 1.5 percent and they expect gold to trade higher in an environment with prolonged low interest rates, an outlook supported by the Bank of England’s monetary policy decision in August.

Lode says that even after a strong gold bull market so far in 2016, Hermes thinks that gold is likely to move towards its all-time peak of over 1,800 USD per ounce.

Gold often performs well during times of market volatility, but it is not an investment asset class we specifically allocate to for our clients at Informed Choice.

There are a variety of reasons for this decision, including the lack of income from the asset and the relative difficulty of accessing the investment.

Many investors already have an indirect exposure to gold in their portfolios, with basic materials now representing over 8% of the FTSE 100 index of leading UK company shares.

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Holidays, wellbeing & happiness

Holidays, wellbeing & happiness Have you been anywhere nice for your summer holiday this year?

According to new research from the insurer SunLife, we spend a combined total of more than £37.1bn going on an average of 2.2 holidays each year.

The study looked at the holiday habits of 3,000 UK households and found that seven in ten households go away at least once a year.

Four in ten families head off on holiday at least twice each year.

For the purpose of this research, holidays are defined as breaks of four or more nights away from home.

The group that takes the most holidays are older people, particularly empty nesters; in this group, eight in ten take at least one holiday, but are more likely than average to take two holidays a year, with a quarter taking three or four every year.

Older households also spend the most on their holidays.

The research found that retired households spend £2,679 and empty nesters spend £2,696, which is over £700 more than the UK average.

The region where households are most likely to go on holiday is London, where  77%  go on at least one holiday each year and households are just as likely to take two as they are to take one.

The average amount we spend on holidays is £1,964, which works out at £892 per holiday on average, but this varies dramatically between household types and regions.

SunLife’s research also found that holidays have a very strong correlation with wellbeing and happiness.

Those who were the most happy with life take 2.7 holidays each year compared to 1.8 for those who were the most unhappy.

Ian Atkinson, head of brand at SunLife comments:

“It is really interesting to see how our holiday habits differ across the UK and between household types, and perhaps quite surprising to see that 45-54s take the least holidays.

“What is perhaps unsurprising though is that taking a holiday cheers us up.

“While we have always known that holidays are good for us, our study now shows that people who take holidays are considerably happier than those who don’t, so it is worth putting a little aside each month to pay for a holiday because it really is good for our emotional well-being.”

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Informed Choice Radio 104: Avoid inheritance tax like the Duke of Westminster

Informed Choice Radio 104: Avoid inheritance tax like the Duke of Westminster

In this episode of Informed Choice Radio, Martin talks about how to avoid inheritance tax like the Duke of Westminster.

There is also a roundup of the latest personal finance news and an update from the world of Informed Choice.

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Informed Choice Radio 104: Avoid inheritance tax like the Duke of WestminsterAvoid inheritance tax like the Duke of Westminster

Gerald Cavendish Grosvenor, the Duke of Westminster, died this week of a heart attack, at 64 years old.

The duke was the third richest person in Britain and his passing has prompted a debate about inheritance tax.

By all accounts, Gerald Grosvenor was a remarkable man.

He became the sixth Duke of Westminster in 1979, and is described on the Grosvenor Estate website as : “…a passionate country man, committed soldier, an excellent shot, a true entrepreneur and, importantly, he went out of his way to be courteous and humorous with all people, regardless of status or wealth.”

Following his death, his son Hugh Grosvenor, previously known by the honorary title Earl Grosvenor, has inherited an estate worth £9bn.

Despite the substantial inheritance, the new Duke of Westminster is expected to pay very little inheritance tax.

In this episode of Informed Choice Radio, Martin talks about the use of trusts, business property relief and agricultural relief to avoid inheritance tax.

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Personal finance news update

-UK government bonds have offered negative yields for the first time ever.

-Life assurance company Aegon has confirmed a £140m acquisition of fund supermarket Cofunds.

-The Royal Mint has reported a surge in demand for gold bars and coins, following the Bank of England interest rate cut earlier this month.

-The UK housing market took a pause for breath in July, following the referendum result.

-A study for the charity Shelter has found one in three families in England would not be able to pay their rent or mortgage for more than a month if they lost their job.

Useful links mentioned in this episode

DarkMarket: How Hackers Became the New Mafia by Misha Glenny

Get answers to your personal finance questions

Do you have a personal finance or investing question for Martin?

Email martin@icfp.co.uk or ask on Twitter @martinbamford.

You can call our dedicated podcast voicemail line on 020 8144 2745 with your question or visit www.speakpipe.com/InformedChoicePodcast to leave an online voicemail.

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Thank you for listening to this episode of Informed Choice Radio. Please use the comments section below to share any feedback you have.

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Weekly Round-Up – Friday 12th August 2016

Informed Choice Weekly RoundupHappy Friday, readers! It’s time to catch up.

Here are some of the things that we covered at Informed Choice this week.

On the blog this week

What do low interest rates mean for your retirement? Our summer intern Charlotte has carried out some research.

What impact are peer-pressured parent purchases having on your annual expenditure?

Are you worse off as a result of the Brexit referendum result in June?

Should retirees with a range of investment assets be holding back pension wealth for the next generation?

The latest podcast episode

Higher education is an expensive business. Martin spoke to Adam Bauer, Financial Literacy Program Director at Wayne State University in Detroit, Michigan.

Informed Choice in the press

Aviva Investors has warned investors in the company’s £1.6bn property fund that they are unlikely to be able to withdraw their money until 2017. Martin commented in the FT this week.

Before you go

We are pleased to introduce two new members of the Informed Choice team this week. Victoria McNulty and Kelvin Riches joined us on Monday as Paraplanners, working with Andy Bodman to conduct research and write client reports.

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What do low interest rates mean for your retirement?

What do low interest rates mean for your retirement?The Bank of England has maintained interest rates at the historic low of 0.5% since March 2009.

Interest rates subsequently fell to a new historic low of 0.25% earlier this month, in response to a perceived economic slowdown following the referendum decision for the UK to leave the European Union.

The low interest rates we are currently experiencing are the result of a number of factors.

These factors include fragile economic growth, with growth estimates being revised from 2.3% to just under 1%, and low price inflation, with inflation being below the Bank of England’s 2% target since December 2013 and below 1% since November 2014.

The Bank of England and other central banks globally have been seeking to encourage investment and consumer spending in order to support economic growth and stable inflation.

Lower interest rates can however be a cause for concern for people approaching or living in retirement.

As part of her summer internship at Informed Choice, Charlotte Davis has prepared a briefing note about low interest rates and retirement planning.

What do low interest rates mean for your retirement?

Charlotte is an economics student at Exeter University, who is spending a fortnight with Informed Choice this summer to gain experience of Financial Planning in practice.

With no reasonable expectation of an interest rate rise in the near term, retirees face an important question: what do low interest rates mean for your retirement plans?

In an attempt to answer this important question, we have taken a closer look at the impact of low interest rates on pensions, cash savings, investments and mortgages.

What do low interest rates mean for your retirement?

 

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Informed Choice Radio 103: Adam Bauer, Cost of College

ICR103_ Adam Bauer, Cost of College(1)

Informed Choice Radio 103: Adam Bauer, Cost of CollegeHigher education is an expensive business.

Tuition fees, the cost of accommodation and lost earnings potential all take their toll, often resulting in a lifetime of student debt.

In the United States, the cost of college is even higher than it is in the UK, as my guest on this episode of the podcast will explain.

In this episode of Informed Choice Radio, I speak to Adam Bauer.

Adam is Financial Literacy Program Director at Wayne State University in Detroit, Michigan.

Adam describes his role as developing WSU’s financial literacy program. He says: Sometimes I teach. Sometimes I coach. Rarely, I sleep.

A former English teacher, Adam is passionate about using his MBA in finances to improve financial literacy for college age students.

In this episode, we talk about how college in the US differs from the UK. I ask Adam about the financial fundamentals students typically lack and whether higher education is still worth its high cost.

Welcome to Cost of College with Adam Bauer, in episode 103 of Informed Choice Radio.

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Some questions I ask

-How did you get involved in financial literacy?

-What are the different types of colleges in the US and how do their fee structures differ?

-Do many students drop out of college because they struggle with financial literacy issues?

-What financial fundamentals do students typically lack?

-With such high tuition costs, is going to University still worth the money?

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Help us spread the word!

Thank you for listening to this episode of Informed Choice Radio. Please use the comments section below to share any feedback you have.

If you enjoyed this episode, please share it by using the social media buttons on this page or by sending a tweet:

If you enjoy the show, please subscribe in iTunes and write us a review! Reviews really help us stand out from the crowd and reach more listeners.

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Peer pressure costing parents dear

Peer pressure costing parents dearWhat impact are peer-pressured parent purchases having on your annual expenditure?

New research by Sainsbury’s Bank has found that this sort of spending is adding an extra £865 to annual household expenditure for parents.

In total, this is adding £6bn to expenditure across the UK.

Peer-pressured parental purchases include smartphones, fashionable clothing, parties, hobbies and tuition fees.

So why are parents getting peer-pressured?

According to Sainsbury’s Bank’s second Family Finance Report, ‘The Family Lifecycle – The Learner Years’, it is simply because other children have these desirable items or experiences.

Parents in London are feeling the squeeze to the greatest extent, with 70% feeling compelled to splash out for their kids.

In the South East, only 32% of parents feel peer pressured.

The main items fuelling this peer pressure are phones and tablets at 44%.

These are closely followed by clothing at 43% and school trips and excursions at 42%.

Other peer pressured expenditure include membership to clubs and societies at 30% and children’s parties or birthday gifts at 27%.

According to Simon Ranson, The Head of Banking at Sainsbury’s Bank:

“The rising cost of everyday living and pressure to provide the latest ‘must have’ accessory is stretching family finances further than ever before.

“However, there is a fine line between providing our children with the very best and balancing the books, so it’s important parents shop around to get the best deals to make their money go further.”

Melanie Wright, financial writer and mum of two said:

“’Pester power’ has prompted many a parent to give in to the demands of their children and buy them the items they want just to keep them quiet, but now parents are increasingly having to contend with ‘parent peer pressure’ too.

“It’s vital that you don’t get carried away trying to compete with everyone else, or you could soon find yourself in financial trouble.

“Focus on the things which are a priority for your child, rather than the things which all their friends are doing.

“And if you are feeling the pressure to throw them a big party when they reach those landmark ages of 16, 18 or 21, see if you can join forces with one of their friends who has a birthday around the same time so you can split the cost – and the workload – with another family.”

“To help children appreciate the value of money it is important to strike a balance so that the child contributes an agreed amount towards the cost of their new phone via their own earned income (pocket money/part time job).

“Appreciating the value of money and how long it takes to save for something is a life skill that will stand them in good stead for years to come.”

Jasmine Birtles, founder of MoneyMagpie and author of the second Sainsbury’s Bank Family Finance Report, shared five top tips for parents:

Reason with the kids. Explain how much you can afford and, maybe, give them a choice between having the latest iPhone, for example, or something else they’ve been asking for.
Explain that they can only have one of them so put the ball in their court.

Go second hand. If they desperately want a new bike and you can’t afford it, look on sites like Gumtree and the police auction site Bumblebee Auctions. For tiny ones you might even find a free one by keeping an eye on your local Freecycle site.

Explain the difference between wants and needs. Say something like, “We all need food but you don’t need an Xbox, even if you really want it.” Your child may not get it at first, but eventually they’ll learn.

Be a role model. Show that you can delay gratification so that they learn from you. For example, when you’re shopping, say, “Wow! That’s a fantastic computer. I’m going to save up for it so that I can buy it soon.” Get other adults in the family to do the same so that it becomes the norm.

Turn their thoughts to giving, not having. Help your child pack up some of their old toys and clothes, and take them together to a local charity shop. Giving to others who are less fortunate than they are will help them to learn to appreciate all the things they own.

Do you have any tips to help others resist peer-pressure when spending money?

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Worse off because of Brexit?

Worse off because of Brexit?Are you worse off as a result of the Brexit referendum result in June?

The referendum result was someone that many people didn’t anticipate.

A couple of months later, and many Brits are still expecting to face a couple of tough years ahead.

In fact, a new survey by gocompare.com has found 63% believe there are difficult times to come.

Just under half of people think the decision for the UK to leave the EU will result in Britain being worse off.

Only 18% believe the decision to exit the EU is going to improve their financial situation.

With 40% expecting Britain to enter an economic recession, just over half of people asked by the survey are worried about the rising cost of living and bills.

As a result, panic is setting in for those who think they may not be able to save for their future.

gocompare.com commissioned the new research which suggests young adults are the most gloomy about their immediate financial future.

65% of these young adults believe that they will be worse off after the decision to leave the EU and only a small percentage are predicting that they will be better off.

The cost of living is predicted by half the UK adults questioned to increase as a result of leaving.

However, 42% were eager for the PM to embark on the process of quitting the EU with only 31% saying there should be a delay with the exit negotiations in order for Britain to get a better deal.

So what are the main money troubles in the next two years for us Brits?

Since the referendum result, 13% of people have decided to analyse their personal finances in order to find out where they can save money.

The results from the survey reveal that the top areas to cut costs were food shopping, home phone, Internet, TV and mobile and gas and electricity bills.

According to Tom Lewis, director of money, protection and utilities at Gocompare.com,:

“While it’s too early to judge the financial impact of Brexit, the decision to leave has already sent shock waves through the markets.

“So understandably many people are concerned about the effect Brexit will have on their wallets and future financial security.

“The process of unravelling the UK from the EU will undoubtedly take years, but in the meantime, if people are concerned about their personal finances there’s action they can take to ensure their money is working hard for them.

“It’s a good idea to review your finances regularly to make sure that you are not overpaying your household utility bills and paying more than you need to for insurance policies and other financial products.”

Do you expect to be worse off as a result of Brexit? Are you planning to cut your expenditure for the next few years to protect your personal finances?

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