Allan Roth is the founder of Wealth Logic, an hourly-based financial planning firm in Colorado Springs, Colo. He has taught investing and finance at universities and written for Money Magazine, The Wall Street Journal and others. His contributions aren’t meant to convey specific investment advice.

Why Insurance and Investing Often Don’t Mix

Insurance is a contract between you and an insurance company to protect you from potentially costly events.  You pay a premium to the  company, and it insures you against various unpredictable occurrences:   Insurance can provide you or your family with replacement income if you die or become disabled.  You can protect valuable assets, such as your car or home, as well as liability for accidents you’re responsible for. You can reduce the impact of unexpected expenses with health or …

Interest Rates Are Low Until You Do the Math

I often hear that interest rates are awful and that it’s the worst time ever for retirees needing to live on fixed income. Yet when you look at after-tax, inflation-adjusted returns, a different picture emerges. Many people smile when I tell them that back in 1980 they could have earned 12 percent on a 10-year U.S. Treasury or certificate of deposit (CD). Depositing $10,000 would have returned $1,200 a year. But if a third went to taxes, that gain would …

Those Free Financial Dinner Seminars May Give You Indigestion

Ever get those invitations for a free financial seminar at a restaurant? “Nothing will be sold – we only want to educate you on your financial future,” is the typical pitch. Most specify that “financial professionals may not attend.” However, I recently received one that didn’t exclude me, and decided to see what I might learn about my financial future. Here’s my experience and what you need to know. First, this wasn’t just some seminar at a local restaurant; this …

Is U.S. Stock Trading Rigged?

In his new book, Flash Boys: A Wall Street Revolt (W.W. Norton & Company, 2014), Michael Lewis, author of  Moneyball and The Big Short, says stock market trading may be rigged by so-called high frequency traders using supercomputers. During an interview about his book Sunday on CBS’s 60 Minutes, Lewis discussed the impact of high frequency trading in what’s known in the brokerage world as front-running. To explain what this is, let’s say you wanted to buy 100 shares of …

Why I Like 529 College Savings Plans

If you want to help pay for higher education for a child or grandchild, consider using a 529 college savings plan. These plans allow you to put money aside for tuition and other college-related expenses, while getting some nice tax advantages as well. Since I have a son who will be college bound in a couple of years, I’ve looked at all sorts of ways to pay for it and can say the 529 plan is by far the best …

The Danger of Acting on Stock Market Headlines

Over the past five years, U.S. stocks have tripled in value. For example, the Wilshire 5000 total return index increased from 27.50 to 82.62. Yet paranoia about the market has caused many investors to miss out. The chart below shows the return an investor would have received just by owning a total U.S. stock index fund and reinvesting the dividends. A total U.S. stock index fund essentially owns every publicly held company based in the U.S. Though the chart tracks …