Thinking ahead about how investing can support financial goals is the purpose of planning. Naturally, there’s lots of talk about common planning targets: retirement and college. But there’s also consideration of how to achieve multiple goals at various stages of life — whether covering basic needs or leaving a legacy — and how taxes and tax planning could impact results. Articles in the planning category allow you to clarify how today’s decisions can impact efforts to grow, manage, and maintain wealth.

How to Set Up a Personal Finance Spreadsheet

When presented with general concepts or rules of thumb relating to personal finance, my brain resists automatic acceptance. My look-under-the-hood tendencies rebel when I hear a statement like “it’s always better to invest rather than pay off debt” or vice versa.

To truly understand an idea (and prove or disprove its claim), I love to design a spreadsheet. Using this tool, I can break down a concept and illustrate how it works or demonstrate where it falls apart.

In this article, I’ll explain the basics of setting up personal finance spreadsheets, including how to design formulas with financial functions like PMT (payment), FV (future value), and PV (present value).

5 Ways Betterment Differs from Its Competitors

Betterment’s investment services first came on my radar a couple of years ago. I invested $1,000 with the company as one of my investment experiments for the first Grow Your Dough Throwdown in January 2014. Later that year, I became an affiliate for the firm (gaining the opportunity for sales commissions on new accounts) and became a contributor to the firm’s online magazine.

Those in the financial industry refer to Betterment and similar companies as “robo advisors.” Robo references a robotic, rather than human, financial advisor. Advisor references the services the company provides as an SEC registered investment advisor (RIA), which involves the recommendation and management of a diversified investment portfolio for clients.

There are many similarities among robo-advisory services. But here are five ways that Betterment differs from similar advisory services, such as those from Wealthfront and TradeKing Advisors.

How to Set and Reach Financial Goals with Betterment

For many years, I have been resistant to the idea of setting financial goals; instead, I have opted to accumulate wealth so that I have the means to make purchases when needed. This wealth-building approach can be effective, and is certainly better than not saving, investing, and growing assets.

Still, there are at least a couple of shortcomings to general wealth building: 1) I’m not sure when my goal has been achieved; and 2) I’m reluctant to spend down the assets that I’ve worked so hard to accumulate, largely because I’m not clear about the purpose of my investments and the timing of withdrawals.

Goal setting can inspire me to save and invest, and make me feel happier and more secure about spending.

Donor-Advised Fund for Charitable Giving

Last year, I set up a donor-advised fund through Schwab Charitable. I established this fund to streamline the process of donating to a charity using appreciated stock. After opening this account, I’ve discovered unanticipated benefits as well as a few drawbacks.
Here are some things to know about a donor-advised fund:

Compound Interest, How It Works

You may have heard that you should invest as early as possible in order to take advantage of compound interest. The younger you are when you begin investing, the sooner compounding can (possibly) start and the sooner exponential growth can (potentially) happen.

The concept of compounding is well worth knowing and relevant to investing.

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