CERF Blog

In a prior blog I have discussed the components of building a sustainable financial plan.  There were two key steps:  first, take into account your “human capital” which is the present value of your estimated future income stream.  Your total wealth is the sum of this human capital and your net financial capital (assets less… Read more

Mistakes In 2012, Federal Reserve Chairman Ben Bernanke1 gave a speech on the importance of financial education.  People commonly make financial mistakes such as saving too little, taking on too much debt, holding too little life insurance, making bad investment decisions and paying excessive fees that are unnecessary.  The consequences of these mistakes can be… Read more

A financial planning rule of thumb that you often hear is that the percentage allocation to safe assets (cash or bonds) should increase with age, and accordingly the percentage allocation to the risky asset (equities) should decline with age.  One popular version is that your allocation to equities should be no higher than 100 minus… Read more

The Fed’s Flow of Funds (FOF) report shows that household sector net worth is approximately $60 trillion.  This wealth in concentrated in households headed by people aged 50 or older.  After all, for most people it takes time to build up wealth in the form of stocks, bonds, real estate and other tangible assets.  The… Read more