The podcast covers topics such as the trustworthiness of financial advisors, the hidden cost of student loan forgiveness, considerations for bond investments, and the impact of job satisfaction on various aspects of life.
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Quick takeaways
When seeking a financial advisor, ensure they are a fiduciary and prioritize your best interests.
Understand the difference between buying bonds through platforms like Vanguard or directly from Treasury Direct before making investment decisions.
Interest rate movements can significantly impact bond prices, so it's important to monitor and consider them when making investment decisions.
Deep dives
Understanding the importance of being a fiduciary when it comes to financial advising
When working with a financial advisor, it is crucial to understand whether they are a fiduciary or not. A fiduciary has a legal and ethical obligation to act in the best interests of their clients. However, it is important to note that some advisors may claim to be fiduciaries but may have conflicting interests due to their affiliations or compensation structure. It is advisable for individuals to thoroughly research and interview multiple advisors to ensure they find a trustworthy fiduciary who will prioritize their financial well-being.
Considering the role of bonds in a portfolio
Bonds can play a role in a diversified investment portfolio, providing stability and income. When considering bonds, it is important to understand the difference between buying bonds through platforms like Vanguard or directly from Treasury Direct. Buying bonds through Vanguard involves investing in a bond fund, which is a collection of bonds, and its value will fluctuate with the market. On the other hand, buying bonds directly from Treasury Direct means loaning money to the US federal government. It is important to assess your risk tolerance and long-term goals before deciding on the appropriate allocation of bonds in your portfolio.
Understanding the relationship between bond prices, yields, and interest rates
Bond prices and yields are inversely related to each other, meaning that as bond prices go up, yields go down, and vice versa. This relationship is affected by interest rates in the market. When interest rates rise, existing bonds with lower yields become less attractive, decreasing their value. Conversely, when interest rates fall, existing bonds with higher yields become more appealing, increasing their value. It is crucial to monitor interest rate movements and their potential impact on bond prices before making investment decisions.
Stand out and connect with customers
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Consider career satisfaction and loan forgiveness
When considering career choices and public service loan forgiveness, it is essential to prioritize job satisfaction and fulfillment. While loan forgiveness is a valuable opportunity, individuals should evaluate whether they genuinely enjoy their work and believe in its meaningfulness. If there is a genuine passion and sense of purpose, staying with the job even after loans are forgiven can be a great choice. It is crucial to assess factors like work relationships, autonomy, growth potential, and overall job satisfaction when making this decision. Time is a limited resource, and spending it in a fulfilling career is paramount.
#484: Kristen’s financial advisor charges a 1.3 percent fee on her investments. They also sold her term life, whole life, and long-term disability insurance. Do they have her best interests at heart?
Casey has $290,000 in student loan debt. He committed 10 years to one employer for a chance at public service loan forgiveness. But five years in, Casey questions what he’s missing out on.
Sara feels like it’s time to move to a more conservative asset allocation but she’s torn between buying bonds from Vanguard or Treasury Direct. What’s the difference anyway?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.