Jill on Money: Real estate, munis, life insurance
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The Facebook IPO hype morphed into a fiasco throughout the week, diverting attention away from more pressing issues. To understand the issues surrounding the Facebook IPO, check out this quick video:
The real estate market seems to be bottoming, according to experts like Ilyce Glink. I take that call pretty seriously, since Ilyce has been covering the housing market for over two decades. While it may seem tempting to jump into the market, be prepared to do some homework. You can start with one or all of Ilyce's e-books and then make sure you understand that being a landlord means work and it will require a bunch of cash-gone are the days of no-money down opportunities, says Ilyce.
While many of you keep writing in about taking advantage of the housing market, we all know people who are still struggling with the after-effects of the bursting bubble. Callers Mike and Marguerite are both underwater on their homes. My recommendation in these types of situations depends entirely on the specifics of your financial life. In one case, it may make sense to walk away or to execute a short sale, while in the other situation, renting the house is the perfect solution.
Ron and his wife are completely spooked by the stock market, but they don't know where to turn to earn more than the rate of inflation. It sure does stink to be risk-averse in a low interest world.
Steve wrote in about the wonders of municipal bonds and I couldn't agree more! Of course bonds have risk, but you can reduce it by purchasing high quality paper and perhaps even consider giving up a little interest to purchase an insured bond.
Harry brings up a good question: how much life insurance is necessary and what type is best? Wow--now that's a big topic. Life insurance is critical when your death would cause a financial hardship for your survivor(s). It is also an excellent tool for estate planning. To determine how much insurance you need, try this life insurance calculator and chances are, you will end up with term life. But if you need insurance for estate purposes, you are likely to need permanent insurance, which remains in place for your entire life and as a result, is much more expensive than term life insurance.
I know that many are celebrating the long Memorial Day weekend with barbeques and family time. That said, please take a moment to remember our fallen soldiers at some point, maybe by attending your town's parade or thanking a soldier who served or even just bowing your head for a moment to honor all who gave so much.
Here are web sites and resources mentioned in this week's show:-- How to Choose a Financial Advisor: 10 Questions
-- NAPFA: National Association of Personal Financial Advisors (fee-only advisors)-- Life Expectancy Calculator-- Financial documents: What to shred, what to keep
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