Ric Edelman

This past week, my class focused on family, a massively important yet often neglected aspect of personal finance. Money was on marriage and children; Wednesday was on elder care. And the statistics are sobering: 40 million Americans serve as unpaid caregivers - including nearly 4 million children ages 10-17. Two-thirds of caregivers are women, and they all provide an average 27 hours/week of service to family members in need. A quarter provide 40+ hours of care, and 65% have been doing this for 3-9 years. Compounding the challenge: 70% of caregivers have jobs; a quarter of them have taken unpaid leave to provide care, 22% turned down a promotion and 1 in 5 quit their jobs entirely to be full-time caregivers. Caregivers also spend $7,000 annually in out-of-pocket expenses (14k when caring for someone with dementia), and the total lost career earnings due to caregiving is estimated to be $407,000. Compared to others, caregivers are more likely to gain weight, smoke, drink, suffer insomnia and hurt their backs (try lifting someone out of bed who weights 180 lbs). No wonder 2 in 3 caregivers are stressed and 39% suffer from depression. The solution to all this? Money! People devote so much time as caregivers simply because they can't afford to hire home health aides. They cost $2k/month for part-time service, $4k/month for weekday support, $6k/month for full-time and up to $24k/month for 24/7 care (needed for Alzheimer's patients). Aging Life Care Managers charge $150-$350/hr but are a Godsend, handling Medicare/Medicaid paperwork, arranging doctors' visits and much more. So, what did my students in @RowanUniversity's School of Financial Planning learn this week? 1. Plan for being a caregiver sooner than you think 2. Keep your own finances in order 3. Save more money than you think you'll need, and 4. Start conversations with your parents and siblings now - don't wait for someone to get a diagnosis or incur an injury. Thanks to increased longevity, you will one day be either a patient or a caregiver. Either way, it's a family affair. #CFP #financialplanning #longtermcare #Alzheimers #dementia #caregivers #caregiving #college

This week's classes were devoted to family. Financial advisors know that personal finance is an intergenerational conversation, but it amazes me how often people fail to realize this. So, in my Personal Financial Planning course that I'm teaching in @RowanUniversity's new School of Financial Planning, powered by a $10 million donation from Edelman Financial Engines, I'm making sure that family infuses lots of our conversations. That's why this past Monday was devoted to Marriage, Family and Money. I shared with my students some sobering stats: while the average American says they need $1.5 million to retire in comfort, the median 401(k) - which holds 70% of the average family's wealth (excluding homes) - has only $44,115. And the media 401(k) balance for those ages 55-64 is just $30,000. And nearly half of all Americans have no savings at all. Meantime, it costs $300,000 to raise a child from birth to age 17, 70% of college students have $41k in student loan debt, and the average house costs $419,000. And yet, a third of couples don't discuss finances with each other until AFTER the wedding! So, I shared 23 questions that people in a relationship need to ask each other. Such as: What's your annual income? How much and what kind of debts do you have? Do you want children? Do you plan to work until retirement? Who will contribute to the household's bills (and how much), and which of us will be responsible for paying those bills? What about a pre-nup? As you can imagine, the classroom dialog was quite stimulating. Among other debates: WHEN do you raise these questions? (Ok, first date might be a bit early, but AFTER the wedding is clearly too late!) Money is a leading cause of divorce, so these questions cannot be ignored; the only choice is when to discuss them and the only decision is whether to end the relationship based on the answers. By the end of class, I think my students were beginning to realize that money is truly an "adult" topic. Next up in the family discussion: elder care. I'll share that with you tomorrow. #college #CFP #divorce #marriage #family #prenup #financialplanning

Can your clients get high monthly income without the issuer credit risk of traditional structured notes? I’m digging into Autocallable ETFs with Andrew Nelson of @InnovatorETFs on Nov. 5 at 2pm ET. Join us! Free, with 1 CE credit. Register: hubs.li/Q04BlLjN0

Energy prices are up. Copper hit a record. Your clients have noticed. But resource stocks don’t move as one. I’ll talk with @ManGroup’s Albert Chu about when active management matters. Nov. 3, 2pm ET. Free, with 1 CE credit. Register: hubs.li/Q04BhPf-0

There's still time to register to join us this morning.

S&P has built a new crypto index. Bitcoin didn’t make the cut. Neither did a lot of other names your clients probably know. So what did? Join me on my next webinar, Tuesday, Oct. 27, at 11am ET. I’ll be asking Adam Bilmes of S&P Dow Jones Indices and Cosmo Jiang of Pantera Capital why they built this index and how they decided to put into it – and what it means for your clients. The webinar is free, and you’ll earn 1 CE credit. Register for free: hubs.li/Q04C9cvq0

Many of your clients own a bitcoin ETF. Now they're asking about the rest of the market. On Oct. 27, I'm talking with Adam Bilmes of @SPDJIndices and @cosmo_jiang of @PanteraCapital about a crypto index that screens for revenue. Join me. Free, 1 CE credit: hubs.li/Q04zcDbk0

Monday's Personal Financial Planning class in @RowanUniversity's School of Financial Planning: buying/leasing an automotive vehicle. (You can't say "car" anymore since trucks, pickups and SUVs are 81% of the market; passenger cars are only 19%!) I explained that vehicles, homes and degrees are the top 3 expenditures, but only vehicles decline in value over time. So, they need to learn how to minimize the damage. I showed that the average one loses 20% upon purchase and 12% annually for the next 7 years, a 63% total loss. I also explained why leasing appears less expensive but is often higher, and how to avoid leasing traps (such as Gap insurance, cap cost reductions and buying options on a leased vehicle). Most importantly, I had them surf the web to find a "car affordability calculator." There are dozens - and all of them are fatally flawed and thus highly misleading. The calculators merely reveal the monthly payment and how to reduce it (by increasing the loan's term from 48 months to 72 months). So, I gave them the calculator I created for my nephew when he graduated from college 10 years ago. My calculator asks you to input your salary (so I had my class surf to learn what they can expect to earn from the job they hope to get) and then decide what portion they will allocate to transportation. (I gave them USDA data showing the average US household budget; 14% goes to transportation.) I then had them name the make/model/year of the vehicle they want and input its price, closing costs, money down, loan interest rate and term, miles per gallon and cost of fuel per gallon, and the amount they cab expect to spend annually on maintenance and repairs (all obtained from web searches). Then I asked how many miles per year they'll drive, whether they'll pay tolls and/or parking to get to work (with frequency and amounts, if so). The calculator then tells them if the vehicle is within their 14% budget allocation. The discovered that every online calculator said "yes" but my calculator answered "no." One example: an online calculator told a student the monthly cost would be $850, while mine said the cost is actually $1,789. That's because I include the total cost of ownership, not merely the cost of acquisition. My message to the class: don't trust online calculators; they are false and misleading, designed by the auto industry to trick you into buying a vehicle you can't actually afford. (This explains why 2.2 million vehicles were repossessed last year, and another 5% of auto loans are 90+ days past due. Imagine the financial strife that inflicts on people!) The solution? You know: Buy one 4yrs old, coming off lease, thus in good condition; a vehicle 50k new is now just 27k) and keep it for 10 years. And be sure the vehicle will meet your future lifestyle needs (married with kids) not merely your current lifestyle. #CFP #financialplanning #education #college #buyacar #auto #leasing #usedcar #caraffordabilitycalculator #financialcalculator

The exam results are in! The students in my Personal Financial Planning course at @RowanUniversity completed their first exam, and after scoring it, I thought it would be helpful if have those who did best shared their study habits with their classmates. I wasn’t expecting some of what I heard. The highest achievers all scored more than 100%, thanks to bonus questions they answered correctly. How did they do so well? One revealed, “I re-read everything in the textbooks that you had assigned to us. Then I gave the handouts you gave to us to my husband and he quizzed me on everything. Even though he didn't know what I was talking about, I knew what I was talking about!” What I wasn't expecting? “I gave Gemini all the reading assignments from your books and asked it to produce a 50-question quiz based on your content. Once I scored high enough on those, I figured I was ready. I think Gemini is why I did so well on the test.” Turns out several high-scoring students used AI this way. Should I be annoyed ? Was this cheating? Violating my copyrights? Hell, no! These students used the latest tech to create a unique study method that helped them comprehend and retain the knowledge they need – not merely to pass the exam, but to support and improve their lives as they tackle personal-finance issues. I am impressed with their resourcefulness! And it'd be crazy NOT to use AI, since it'll be vital in every aspect of their professional lives. Other top students were equally inventive. One said, “I watched TikTok videos on topics we discussed in class." But it wasn’t just tech that led to success; All of them reported plain ‘ole hard work. As in, “Whenever you emphasized something in class, I'd write that down.” And, “The most beneficial thing for me was just paying attention in class and making sure I was writing down what you were saying, taking notes on everything and then reviewing my notes in detail while studying for the exam.”   These students also made clear that there’s no substitute for completing all the reading assignments. “Reading before the class is really helpful – it’s what helped me overall.” One final observation: I asked the class what these top students had in common, and everyone knew the answer: they're the ones who participate the most in class. So, in addition to recommending that everyone study as these Grade-As did, I urged everyone to engage more in class. And as an incentive, I reminded them that class participation counts as part of their overall grade. I’m impressed with my students, and can’t wait for their second exam in a few weeks! #CFP #college #financialplanning #study #exam #AI

I was away hosting a conference this past Wednesday so asked Ed Moore, CFP® to guest lecture to my students in the Personal Financial Planning course we’re teaching at @RowanUniversity's new School of Financial Planning. Ed is my dear friend and was my #1 at Edelman Financial Engines for nearly four decades- most of them as my president - and there’s no better financial advisor or leader in the wealth management field. So, you can imagine what how great it was for my class to hear from him! Ed spend much of the time sharing career advice, and they were so enthralled that even though class ended at 4:45, Ed didn’t leave until 5:30! And he’s already had several requests for 1:1 follow-up conversations! Funny, I’ve not been asked to hang around til 5:30…maybe I should get Ed to teach the rest of the course!😀 Today's class is devoted to buying an auto - there’s hardly any topic of more relevance to (or interest by) college seniors! #CFP #college #education #financialplanning #buyingacar #autoleasing #autoloan