Finance Advice For the Ages

If your loved one passed away, would you know what do with your finances? The answer to this question is complex; however, there are some factors that a person might want to consider. 

• At one time in our recent past, simplicity was often the answer. A person could purchase a Wellington Fund, and it was capable of providing its owner with a stream of livable income for a long time. Now, the times have changed, and a person might want to consider discussing matters with a financial planner. A person might want to consider hiring a financial planner at a hourly rate to keep costs low. This would probably ensure that the planner would not have any incentive to have the person purchase more expensive products that would provide the planner with a commission. 
• A person might also want to consider purchasing items whose prices are plainly visible to the purchaser. This is called the Yahoo principle. In other words, purchase items that are easily trackable such as stocks from a public company. However, be aware that this concept does not apply to fixed annuities. A person might still want to consider price transparency to ensure that the person knows what they are paying for. 

See William Baldwin, Letter to My Widow, Forbes, Mar. 31, 2012.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.