According to the Investment Company Institute, total assets in individual retirement accounts (IRAs) crossed the $9 trillion mark at the end of last year. Most IRA assets are invested in traditional publicly-trades securities like mutual funds and individual stocks and bonds. However, a growing number of investors are using their IRAs to buy other types of assets including real estate, limited partnerships, LLCs, and even bitcoin. These alternative assets may be interesting investments, but if you are going to use them in your IRA, you should be aware of some of the potential pitfalls.
Q: Several years ago, I heard about something called socially responsible investing. If I recall correctly, socially responsible investing didn’t perform very well. Lately, I’ve started hearing about something called ESG investing. It sounds a lot like socially responsible investing to me. Is ESG just more broker hype or is there something to it?
Women’s issues are getting a lot of well-deserved attention lately, and I’m not just talking about the #MeToo movement. While the courageous women of #MeToo have shined a much-needed spotlight on the problem of sexual harassment and assault, women face other vital issues that are too often ignored—sometimes by women themselves.
Q: I make enough money to where I am getting tired of paying taxes. Since the so-called tax reform was passed, I have fewer deductions to take. Should I start investing in municipal bonds?
A: Municipal bonds can be a great source of tax-free income when they are used correctly. However, whether or not muni bonds make sense for you depends on several things, including your overall investment objectives and your personal marginal tax rate.
Before you buy muni bonds, consider carefully if bonds generally should be part of your portfolio. Bonds might fit for several reasons.
In 1996, Thomas Stanley and William Danko published a revealing little book called “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.” Though Stanley and Danko could scarcely have imagined it at the time, the book has become a personal finance classic, selling more than three million copies.
The book is a compilation of research the authors made into the financial habits of Americans with net worth greater than $1 million. One of the most interesting surprises, and the basis of the book’s title, was that millionaires were not typically ostentatious snobs living in upscale neighborhoods. In fact,