Finance Industry News

The title is referring to your savings and finance habits, not that wonky thing going on with your left eye. Almost every friend I have advised about personal finances has asked some variation of this question. I believe that “normal” is another word for “average” and too many people are okay with staying average when it comes to their finances. A better question would be, “am I on track?” which is much more complicated, and depends on your specific goals.

You’re probably thinking, “Nice cop-out there, Jean. But you didn’t answer my question!” Guilty as charged. So yours truly ploughed through hundreds of pages to arrive at some relevant statistics. I chose these surveys because they’re conducted by respected researchers and analyze habits by ages. (There are plenty of results for Baby Boomers, but what about Gen X, Gen Y and Millenials?)

First up is the Employee Benefit Research Institute’s most recent report on IRA balances and contributions. This report is surprisi

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I was flipping through old magazines and came across this witty but totally wrong headline: “Fashion 401K: The Investment Pieces.” The magazine took the expensive-clothing-as-investment theme further with the subtitle, “Traditional pieces … that earn interest as you wear them and wear them.”

Oh, please. There’s enough confusion and emotion around money and investing without someone telling us that a designer $805 shirt will earn us “interest.” I’m a big fan of spending on (and donating to) what you love, but let’s get the facts straight. Most of the $800 pricetag is paying the store for the retail markup and for the beautiful ads you see in the same magazine. Expensive clothes will rapidly lose value after purchase, as ebay and vintage stores can attest to.

When was the last time you got an account statement saying that your clothes just paid a dividend so you could go shop more? Or the last time you sold your car for more than what you bought it for? As Investopedia.com

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For the most part, I typically assume that people who have misinformation came by it honestly. Usually, they didn’t quite understand fully what they read or were told. After all, one of the trickiest things about managing money and personal finance is that there are so many exceptions and nuances. In a lot of cases, what is absolutely true for one person is not true for someone else because of their individual circumstances.

Unfortunately, while the internet has given people easy access to vast amount of information, it does so without any verification that the information published is true.

The problem is compounded by those who read something inaccurate and then repeat it elsewhere. This makes the false information seem more valid because it is corroborated by another source, which, in fact, is just repeating something that was wrong.

That is why it is so important to verify financial planning information you read with an authoritative or trusted source.

Which brings us to IRS Publication 550 – Investment Income (that, my friends, is an authoritative source) and a popular, but dead wrong tax-savings strategy.

U.S. sav

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