Five questions you need not ask
There’s no such thing as a dumb question. I’ve heard that claim and made it myself. Now, I’m rethinking it.
Part of my daily routine is to answer financial questions, and over the years I’ve received ones that had me scouring IRS publications, creating Excel spreadsheets and tapping into a wide range of USAA resources to come up with answers.
On the other hand, I’ve also received a few that had me scratching my head. So while I still firmly believe the worst question is the one you don’t ask, I’ll endeavor to head off a few should-be-obvious ones.
“Should I co-sign a loan for my girlfriend or boyfriend?” No. I’ve taken a bit of editorial license with this one because usually it comes in after the relationship is over and is accompanied by a tale of horror (he or she stopped making payments, my credit score has been hammered, etc.), so here’s a little forewarning: just say no, unless you’re willing to grin and bear it when things take a turn for the worse.
“Should I participate in my retirement plan at work?” Yes. When I meet someone who’s overprepared for retirement, I’ll change my tune. Just check out the latest Retirement Confidence Survey by the Employee Benefit Research Institute: 57 percent of U.S. workers have set aside less than $25,000 for retirement. And guess what? There’s a pretty good chance that if you say “yes,” you’ll be rewarded with some sort of company match. Sign up today.
“My brother-in-law recommended (insert investment name). What should I do?” Run for cover – now. The first stock I ever bought was based on a hot tip like this. Despite an initial positive move, the company was soon bankrupt and my money was gone within a year. Did that cause me to steer totally clear of these opportunities? Well, no, but now I limit investments like these to a tiny part of my portfolio – a portion I can (and probably will) lose without jeopardizing our future.
“Should I lend money to friends and family?” Not if you have an expectation of payback. Even so, this is something my wife and I have done. Do it with a gifting heart, and if you get repaid, consider it a bonus.
“What is going to happen with the market?” If I had an accurate crystal ball, I’m not sure I’d share, but I’d probably be spending more time traveling and on the golf course and less time punching away at this keyboard.
If I’m honest (and a bit self-serving), questions provide a path to enlightenment, so keep them coming. But consider these five answered.
J.J. Montanaro is a certified financial planner with USAA, The American Legion’s preferred provider of financial services. Submit questions for him online.