Are These Financial Items Overrated or Underrated?

Today’s Wisdom:

When it comes to evaluating products and items in the financial world, there’s a lot of good and bad available to investors. The challenge is trying to determine what works for you and what doesn’t. Let’s talk about a few of these things that might not be all they’re cracked up to be and then highlight a few that aren’t getting the credit they deserve.

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What You’ll Learn:

The financial world is full of buzzwords and commonly-beliefs but how many of these benefit your retirement plan and which ones can you ignore?

That’s what we want to discuss on this episode of the Money Wisdom podcast. Joel Johnson is going to separate six different financial things into the category of overrated or underrated. Each of these will be recognizable to you and likely a part of your investing so this is an important topic. We’ll also open the mailbag again to hit three questions about popular retirement topics.

It’s another packed show so let’s get started.


The Economy: Optimistic or Pessimistic?

We pulled a survey that found a clear discrepancy in the feelings toward the future of the economy. On one side you have corporate CEOs and CFOs who are viewing things through a pessimistic lens. On the other side are the consumers who are all still very positive about the economy. As this 10+ year bull market continues, there’s a clear divide on where we’re headed so let’s check in with Joel to gauge his opinion.

[0:44] – A survey found that corporate CEOs and CFOs are pessimistic about the economy while consumers are optimistic. What does Joel think?


Overrated or Underrated?

Our main topic for this show is identifying a few things in the financial world that are overrated and a few more that are underrated. All of these products or categories should be familiar to the average investor, but how well do you know them? We’ll present three of each to Joel and let him explain to us why they fall on one side or the other.

[1:30] – Let’s talk about some things that are overrated starting with tax advantages. Why might this be overrated?

[6:03] – Rates of Return: how can this be overrated?

[7:43] – Commission-based investment accounts: overrated?

[15:02] – Let’s talk about financial products that are underrated starting with liquidity.  

[16:17] – Why is predictability underrated?

[17:37] – Simplicity: underrated?



Getting to the mailbag is always a big part of the show because we’re able to cover a variety of topical retirement questions and help you navigate these important decisions. Today we’re taking three from listeners and again we hit some great topics.

The first comes from a 67-year-old that isn’t ready to retire but is considering starting Social Security. Is this a good decision? The second gets into how to handle estate planning and whether it’s a good idea to start passing along your assets to your heirs while you’re still living. And finally, we get a question from someone that is passionate about their employer to the point where they’ve invested almost exclusively in company stock. Do you think Joel will agree with this strategy?

[12:12] – Mailbag question: I’m 67 but I don’t have plans to retire any time soon. Should I go ahead and start Social Security now or wait until I’m done working?

[19:04] – Mailbag question: My dad is in his 90s and his health is starting to decline. Would it be wise for him to start gifting money to me and my sister while he’s still alive? We’ve also talked about him signing over his house to us.

[20:22] – Mailbag question: I’m a big believer in my company’s future so the majority of my 401(k) is invested in company stock. I understand I’m not diversified but isn’t that okay since I know the company so well?

Thanks for checking out our latest episode of the Money Wisdom podcast. We’ll talk to you again next week!



Final Thoughts:

“Any time tax advantages are being pitched as the primary advantage of an investment, you might be getting sold something and it may not be the best thing for you. ”  

– Joel Johnson, Money Wisdom Podcast

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