Day: October 7, 2019

Personal Finance Daily: Automation could disproportionately hurt black workers and these cities have the highest growth in job openings

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Happy Monday, MarketWatchers! Here are some of the best stories from today to kick off your week.

Personal Finance
This U.S. city that Trump loves to hate is tourists’ top pick for third year running

Chicago is again named best big U.S. city by the prominent Condé Nast Traveler magazine.

Here are the U.S. cities with the highest growth in job openings and wages

The analysis was carried out by Glassdoor based across major metro areas.

My ex-husband borrowed money to marry a woman 40 years his junior — how do I protect my son’s $1M estate?

‘Even though he’s deeply in debt and can barely pay his rent, he’s discussing the possibility of having additional children with his new bride’

How to work your tax angles as a landlord

Converting your personal residence into a rental can make for a complex tax situation.

The financial costs and mental-health benefits of gender-affirming surgery for transgender people

Transgender individuals in a new study were six times as likely as their general-population counterparts to have visited a health-care provider for an anxiety or mood disorder.

My sister-in-law is a greedy, gold-digging, woman — it floored me that men could be so stupid

This letter writer is embarking on an around-the-world trip with her husband and is afraid that her relative will insinuate herself into her daughter’s life while she’s gone.

This financial planner racked up $12,000 in credit-card debt — ‘I went a little overboard’

‘They don’t see me as a perfect person and I don’t want them to.’

Airline passengers say one magic word would convince them to spend more money on their tickets

The researchers examined how people responded to different pricing strategies when purchasing airfare.

Why automation could disproportionately hurt black workers

Some 132,000 African-American jobs projected to be displaced due to automation by the year 2030.

Why your financial adviser might ask how you’re feeling about money

To measure their worth, many advisers see value in uncovering clients’ emotions.

Elsewhere on MarketWatch
A new front-runner for the 2020 Democrats? Warren tops Biden in 3 latest polls

Democratic presidential hopeful Elizabeth Warren overtakes rival Joe Biden in three straight recent polls, though she still is behind him in an average of all surveys.

How oil traders are using satellites to keep an eye on an increasingly unpredictable market

Oil traders had the benefit of a growing number of eyes in the sky following last month’s crippling attacks on Saudi Arabia’s crude processing facilities.

Investors are the biggest losers when women and minority entrepreneurs don’t get startup money

Companies with gender- and ethnic diversity perform better and reach more markets, writes Cheryl Contee.

The dollar is doomed — but may pay off when the next bubble takes hold, warns Jim Rogers

Famed investor Jim Rogers says dollar fundamentals are “horrible,” but he’s buying it to get ready to profit on the currency’s last-gasp rally.

Tether Accused of Major Market Manipulation in Trillion Dollar Lawsuit

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Tether

Tether and its sister company Bitfinex have been accused of creating “the largest bubble in human history” in a lawsuit filed in New York this week.

Tether Artificially Inflated Prices

The class-action suit filed in the Southern District of New York alleges that the two companies, and a number of affiliated entities, manipulated the crypto market out of up to $1.4 trillion USD. The suit’s central allegations center around long-standing claims that Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince the market that there was a considerably greater demand for cryptocurrencies than in actuality.


“Part-Fraud, Part-Pump-and-Dump, and Part-Money Laundering”

“Part-fraud, part-pump-and-dump, and part-money laundering, the scheme was primarily accomplished through two enterprises—Bitfinex and Tether—that commingled their corporate identities and customer funds while concealing their extensive cooperation in a way that enabled them to manipulate the cryptocurrency market with unprecedented effectiveness,” the class-action alleges. Tether accounts for almost 80% of all digital tokens in circulation and recently became the world’s most widely used cryptocurrency.

Tether Flip-Flopping on USDT Backing

Tether has always emphasized that every USDT token was backed 1:1 by fiat currency that it had in its reserves. However, the company changed its stance in February when under investigation by the Department of Justice to say that every USDT token was “1-1 pegged to the dollar” and “100% backed” by reserves that “from time to time may include other assets.” Tether then made another walk back from this claim in April, when one of its lawyers admitted in court that the USDT was actually only 74% backed by cash or cash equivalents.

>> Tim Cook Talks Cryptocurrencies: It’s a No for Tech Behemoth

Tether attempted to preempt the breaking of this story by releasing a statement over the weekend entitled “Tether Anticipates Meritless and Mercenary Lawsuit Based on Bogus Study.” In this statement, the company disputes the allegations leveled at it, arguing that they are based upon “flawed assumptions, incomplete and cherry-picked data, and faulty methodology.” The statement goes on to describe the lawsuit as “opportunistic” and says it will vigorously defend itself.

Featured Image: DepositPhotos © Grey82

The Margin: This U.S. city that Trump loves to hate is tourists’ top pick for third year running

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Topping New York and New Orleans, and edging out another Midwestern destination in Minneapolis, Chicago was named best big U.S. city by a well-regarded travel magazine Monday.

It’s the third straight No. 1 ranking from Condé Nast Traveler for a city that President Trump and his family, who developed and operate a hotel and condominium tower along the Chicago River, have ridiculed over its crime rate relative to, for example, New York’s.

Yet for the visitors laying down tourism dollars, Chicago was selected as a U.S. favorite by more than 600,000 Condé Nast readers in a survey asking about recent visits.

MarketWatch/Tim Rostan
A view from the Nature Boardwalk at Chicago’s 151-year-old Lincoln Park Zoo.

The magazine’s editors called the city a “world-class destination known for its impressive architecture, first-rate museums, brilliant chefs and massive brewing scene,” adding that it’s full of “some of the most pleasant people you’ll find anywhere.”

In pinning Minneapolis with its second-place medal, editors praised it for having one of the best park systems in country, a robust culinary scene and “that whole, ‘Minnesota nice’ thing.”

Rounding out the list of 10 Best Big Cities: Boston (No. 3), New Orleans (4), Washington, D.C. (5), San Diego, Calif. (6), New York City (7), Pittsburgh, Pa. (8), Honolulu, Hawaii (9), and San Antonio, Texas (10).

From the MarketWatch archives (February 2018): Chicago, Porto and Melbourne ‘have it all,’ says Time Out — Chicago, especially

Also (October 2017): Chicago earns high global ranking as a ‘safe’ city — and here’s why

Meet Minneapolis
Minneapolis experiences, and embraces, all four seasons. The city also boasts more than 10 James Beard Award semifinalists and the winner for best chef in the Midwest in 2019.

Charleston, S.C., and Santa Fe, N.M., ranked first and second among smaller cities.

The “big city” question within a broader survey at the magazine is relatively new, dating just to 2015. New York City won in 2015 and 2016; Chicago has claimed the spot every year since.

Read: What is the most powerful passport in the world?

Despite the city’s well-publicized reputation for gun violence especially during an alarming 2015–16 uptick and particularly in high-gang-concentration areas (the still-high 236 murders reported from Jan. 1 to June 30 represented a 7% decline from the same period last year and the fewest since 2016, police said, while the murder rate has remained higher through recent years in a number of cities, including St. Louis, Baltimore, New Orleans, Memphis and Newark), Chicago tourism has shown few if any signs of slowing down in recent years.

Annual visitor projections released in early 2019 by tourism lobby Choose Chicago recorded an unprecedented 57.6 million visitors for 2018. That’s a 4.3% jump over 2017’s 55.2 million. Some 26 new hotels have opened in the city within the past four years. The demand for hotel rooms by leisure travelers shot up 14% in the last three years, according to Smith Travel Research data, cited by the city.

Over the summer, Chicago’s Millennium Park sculpture colloquially known as “The Bean,” was vandalized with spray paint. The frequently visited installation by artist Anish Kapoor, officially called “Cloud Gate,” has claimed its rightful place among the city’s most-revered works of public art including the untitled Picasso sculpture in the civic center plaza and the Calder sculpture at Federal Plaza.

Don’t miss: ‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

Revolution Investing: Tesla, Uber and Twitter rank highest in my tech-stock portfolio

This post was originally published on this site

Here’s an updated analysis and Revolution Ratings for some stocks I’ve highlighted in the past few years.

The ratings range from one to 10, with one being “Get out of this position now!” and 10 being “Sell the farm, I’ve found a perfect investment.” The positions that are bolded are those that I consider to be “core” holdings and am unlikely to ever sell out of entirely.

I’ll highlight eight stocks today and another eight stocks in a second newsletter this week.

To continue reading, please subscribe. Already a Subscriber? Log in

Why automation could disproportionately hurt black workers

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The future of work looks even bleaker for African-American workers, a new report suggests.

Black Americans are poised to be disproportionately impacted by automation, according to research released this month by McKinsey & Co., with the possibility of some 132,000 African-American jobs being displaced as a result of automation by the year 2030.

“By 2030, the employment outlook for African Americans — particularly men, younger workers (ages 18–35), and those without a college degree — may worsen dramatically,” the report’s authors said. “Additionally, we find that African Americans are geographically removed from future job growth centers and more likely to be concentrated in areas of job decline.”

If left unchecked, they added, these trends “could have a significant negative effect on the income generation, wealth, and stability of African-American families.” Black families had a mean and median net worth of less than 15% of white families’ in 2016, according to the Federal Reserve Board.

African-American workers occupy this “distinctly disadvantaged position” in part because they tend to be overrepresented in automation-vulnerable “support roles” like food-service workers, office clerks and truck drivers, McKinsey previously found. At the same time, they are underrepresented in low-displacement occupations like educators, creatives, health professionals and legal professionals, the firm’s research shows.

About 25% of U.S. jobs have “high exposure to automation” over the next few decades, according to a Brookings Institute analysis published in January, with more than 70% of their tasks “at risk of substitution.” Jobs in food preparation, office administration, transportation and production are at greatest risk for automation, the report said.

African-Americans workers also tend to be clustered in lower-paying occupations, found the McKinsey analysis, which included data from the Bureau of Labor Statistics, the U.S. Census and Moody’s Analytics. Seven of the top 10 jobs held by African Americans — cashiers, food-preparation and service workers, retail salespeople, customer-service representatives, office clerks, janitors and cleaners, and stock clerks and order fillers — also rank among the top 15 jobs at risk of automation-fueled displacement.

What’s more, McKinsey found, there is a disconnect between where African Americans tend to live and the types of local economies (which the report classifies into “geographical archetypes”) expected to hold the most job prospects.

“African Americans are underrepresented in five out of the six projected fastest-growing geographical archetypes and are overrepresented in two of the six slower-growing archetypes, including the one archetype that has shown negative growth — distressed americana [struggling rural areas],” the report said.

Black workers have the second-highest potential rate of automation-related job displacement by 2030 (23.1%), according to the report, behind only potential Hispanic and Latino job displacement (25.5%). That’s compared to 22.4% for white workers and 21.7% for Asian workers.

Through a gender lens, the specter of job displacement appears more dire for black men than for black women — their projected job-displacement rates are 24.8% and 21.6%, respectively. African-American women tend to be overrepresented in health-care jobs like nursing assistants and home health aides, the report said, which are part of a growing sector and have lower potential for automation. Still, many of those positions aren’t all that lucrative, the report noted.

The authors suggest a range of remedies to address the problem, including investing in higher education, particularly historically black colleges and universities, to help reduce educational disparities; and increasing access to “occupation switching,” or transitioning into growing careers that require similar skills but are better-paying and less threatened by automation.

“The public and private sectors will need to implement targeted programs to increase the awareness of automation risk among African-American workers,” the authors wrote. “Additionally, both sectors will need to provide African Americans with opportunities for higher education and the ability to transition into higher-paying roles and occupations.”

Tim Cook Talks Cryptocurrencies: It’s a No for Tech Behemoth

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Tim Cook

Three months ago, Facebook (NASDAQ:FB) disclosed plans to roll out a cryptocurrency in the summer of 2020. Such news has made several headlines, with the latest being negative, as PayPal (NASDAQ:PYPL) might pull out of Facebook’s project. Even worse for the technology behemoth is that Apple (NASDAQ:AAPL), another tech giant, has expressed zero desire in following in the company’s footsteps, according to Tim Cook. Which brings forth the question: is it correct for Facebook to involve itself with virtual currencies?

Here’s what we know about Apple’s latest comments.


Tim Cook Talks Cryptocurrencies

Last week, Tim Cook talked cryptocurrencies, establishing his view on the sector once and for all: he’s not for it. When asked whether Apple will follow Facebook, Cook said to Les Echos newspaper that he has no current plans to venture into the crypto sector, adding that he doesn’t think companies should try to gain power by creating currencies.

“No. I really think that a currency should stay in the hands of countries. I’m not comfortable with the idea of a private group setting up a competing currency,” Cook explained. “A private company shouldn’t be looking to gain power this way.”

>> Coinbase Pro Increases Fees, Resumes Accepting GBP

There was once a time when the market thought Apple might get into cryptocurrencies, with rumors surfacing in September when an Apple executive was quoted as saying the company was “watching” cryptocurrency. Tim Cook has squashed that hope. “Currency, like defence, needs to stay in the hands of countries, that’s the heart of their mission,” the billionaire said. The market doesn’t seem to be holding it against the company this week, though, with AAPL stock trading up 1% on the Nasdaq.

Takeaway

Are you disappointed that Tim Cook has said he isn’t interested in cryptocurrencies, or do you agree with him? Should currency stay in the hands of countries? Let us know your thoughts in the comments below!

Featured image: PixaBay

GE freezes worker pensions — what to do if your employer changes the terms of your retirement plan

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General Electric is pulling the plug on its pension plan, and that’s a surefire way to derail workers’ retirement planning.

GE GE, -0.06%  announced on Monday it was freezing pensions for 20,000 employees with salaried benefits in an attempt to reduce its $8 billion pension deficit, and that it would also freeze supplementary pension benefits for about 700 workers. Current retirees already receiving their pension payments will not be affected and no new hires have been enrolled in the pension plan since 2012.

When a pension is frozen, it is no longer earning benefits, but it is still federally insured and employees do receive whatever amount of money was already accrued. Still, it means potential earnings are lost and workers must scramble to create a plan to ensure they have enough money in the future for their retirements (usually by saving their own dollars, as opposed to relying on their company to do so).

“Every time we see someone lose a defined-benefit plan, we see that they’ve lost all of the sacrifices they’ve made,” Teresa Ghilarducci, a labor economist and director of The New School’s Schwartz Center for Economic Policy Analysis. “Almost all workers in defined-benefit plans have given up a lot of raises in the past so not only do they lose a secure income for the rest of their lives — they also lost all of those past wages they’ll never get back.”

See: Even people with pensions work into their retirement years

Many private companies have moved away from pension plans, known as defined-benefit plans, since the 1980s, especially after the introduction of 401(k) plans, which put the responsibility on employees to save for their own futures. There are different types of pensions, however, including single-employer plans (where just one company controls the pension), multiemployer plans (where numerous companies band together to offer its employees a pension) and public pensions, which are typically for teachers, law enforcement and other government workers.

Avery Dennison AVY, +0.16% was one of the last companies to terminate its pension plan last year, eight years after freezing the program. Other major corporations to freeze their plans in recent years include UPS UPS, -0.78%, IBM IBM, -0.70%  and DuPont DD, -0.95%, according to the Pension Rights Center, a nonprofit consumer advocacy group.

The state of single-employer pensions are improving and moving away from a deficit, according to the Pension Benefit Guaranty Corporation, the federally-instated insurer of private pension plans, but multiemployer plans are in trouble. About 130 of these plans, which cover 1.3 million people, are at risk of running out of money within the next 20 years, and if nothing changes, the multiemployer branch of the PBGC that insures these plans will also be out of business by 2025.

This is how the GE pension freeze works: employees with these frozen pensions won’t see any additional benefits nor have access to contribute to their plan, beginning Jan. 1, 2021. The company will, however, contribute 3% of those workers’ salaries to a 401(k) plan and provide a 50% matching contribution for up to 8% of employee contributions. The company is offering a lump-sum payment plan, for a limited time, to 100,000 former employees who have yet to start receiving their benefits.

Also see: Want a pension in retirement? Here’s how to create one

GE employees, or those in similar situations, should look into their benefits — to see how much they’ve accrued, and how much more they may need to reach their retirement goals. Workers should also assess what other retirement income they can expect in retirement — not just whatever payment they’d get from their pension if they decide not to take the lump sum, but also any 401(k) savings, Social Security and spouse’s benefits and savings.

Employees should consider discussing whether they should take monthly payments or choose a lump-sum with a financial professional, who can calculate how much more or less they’d get in total over their lifespan depending on which avenue they take.

“If the company’s financial situation is somewhat in question, it may make sense to take the money and run,” said Nate Wenner, principal and senior financial adviser at Wipfli Financial in Missoula, Minn. If they do decide to take the lump sum, workers should consider rolling that money into an individual retirement account to avoid any tax surprises in April, he said. Doing so will keep the money tax-deferred until retirement, as would rolling that money into a company 401(k) plan.

And of course, employees should plan to save more between now and retirement, said Edward Snyder, a financial adviser at Oaktree Financial Advisors in Carmel, Ind. Workers should boost or max out their 401(k) contributions, if they can, and also stash more in health savings accounts, if possible. (Health savings accounts are a tax-friendly way to save and invest for current or future health expenses, although they are only available for people with high-deductible health plans, which can be expensive.)

Saving is imperative to ensuring a comfortable retirement. “I always advise clients to try to plan with what you can definitely control,” said Kashif Ahmed, president of American Private Wealth in Bedford, Mass. “Sadly, most of those workers probably were only counting on this pension to survive retirement. They are now in a precarious, if not death sentence position.”

More from MarketWatch

Associated Press: After widely reported racism, Boston’s Museum of Fine Arts confronts its blind spots

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Boston’s regal Museum of Fine Arts, home to some of humanity’s greatest artworks, is scrambling to make amends.

Last spring, the world-class museum was accused of racism after black middle school students said they were harangued and mistreated on a class trip by other museum patrons and a staff member who allegedly told the children: “No food, no drink and no watermelon.”

Critics rightfully pounced, and the museum moved swiftly to contain the damage. MFA director Matthew Teitelbaum publicly apologized, banned two visitors, launched an internal investigation and hired a law firm led by a former state attorney general to conduct an independent review.

It might have ended there. But in this city still scarred by court-ordered desegregation and the turbulent busing of minority students to white suburbs in the 1970s, the museum — which welcomes 1.2 million visitors each year — took it as a wakeup call to get “woke.”

It has created a new position, senior director of inclusion, in an effort to become a more deliberately diverse organization. In a nod to the need for greater gender equity, it has given over an entire wing to female artists in “Women Take the Floor,” an exhibition timed to coincide with next year’s centennial of U.S. women winning the right to vote. And this month, for the first time, it will open its doors for free to celebrate Indigenous Peoples’ Day.

It’s also been using its website to keep the public updated on its efforts to make things right.

“It’s not a secret that this museum doesn’t serve folks who are black and brown,” said Makeeba McCreary, the MFA’s chief of learning and community engagement, who’s been holding a series of roundtable discussions on inclusion and racial diversity. “We know enough to know that’s not who we want to be.”

Much like the fine arts world as a whole, the MFA largely has been a male bastion of wealth and whiteness since its founding in 1870, five years after the end of the Civil War left the nation raw and riven.

As its 150th anniversary in 2020 approaches, the venerable museum — one of America’s oldest, holding half a million prominent works — has been confronting its blind spots. They were painfully laid bare during last May’s field trip by 26 seventh-graders, all students of color, from the Helen Y. Davis Leadership Academy in Boston’s Dorchester neighborhood.

In addition to the watermelon remark , the school’s principal, Arturo Forrest, said he also heard reports of museum security guards following his students while leaving white pupils alone and that several museum patrons made disparaging remarks. The state launched a separate civil rights investigation in June.

“These young people left the museum feeling disrespected, harassed and targeted because of the color of their skin, and that is unacceptable,” Teitelbaum said.

The Rev. Mariama White-Hammond, a pastor and activist, recalled taking painting classes at the MFA as a little girl in the mid-1980s and feeling out of place.

Racism among the Rembrandts? White-Hammond isn’t surprised.

“The only thing I find shocking is that so many people seem to be shocked,” she said in a commentary for WBUR-FM, Boston’s NPR station. “For white folks, take this as a data point about how little you really know about the experience of people of color in this city.”

The museum says it’s determined to change that.

‘For white folks, take this as a data point about how little you really know about the experience of people of color in this city.’

Rev. Mariama White-Hammond

In January, on Martin Luther King Jr. Day, it will open an exhibition devoted to artists of color from the Americas. There are also plans next year to kick off a community mural project and launch a free first-year membership program to make the museum more accessible to the poor.

“Women Take the Floor,” which opened last month, will run through May 2021. The takeover of the Art of the Americas wing by works by Frida Kahlo, Georgia O’Keeffe and 100 other important women artists “seeks to acknowledge and remedy the systemic gender discrimination found in museums, galleries, the academy and the marketplace, including the MFA’s inconsistent history in supporting women artists,” the museum says.

The group Lawyers for Civil Rights insists the museum could do more, including providing mental health services to students who were traumatized by “these discriminatory and hostile incidents.”

But Boston city councilor Kim Janey said the museum deserves credit “for continuing the conversation around changes to its own policies and procedures.” And McCreary said the focus is on institutional change.

“This is not about amends,” she said. “It’s about our obligations as a public institution. It’s about responsibility, about our contribution to the city, about leadership. It’s about deconstructing the invisible and visible barriers we have in place.”

If you want to have enough money when you retire, you need to know this

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There are plenty of charts on the internet and in books about financial planning that suggest how much someone needs to save to retire with millions of dollars — but there’s not as much explanation as to how that money will grow.

Calculating future savings requires numerous factors, including current age and predicted retirement age, any current assets, how the portfolio is invested and at what rate a person can realistically expect that money to grow. The latter, known as a “rate of return,” includes inflation, interest and dividend payments, and many experts disagree on what individuals can anticipate that rate to be.

Conservative advisers will argue individuals should bank on 4% or 5%, while some advisers track indexes and say 7% or 8% is reasonable. There are also established financial authors who occasionally tout the 12% rate of return, as Suze Orman did when she suggested a daily to-go coffee habit could deter Americans from having $1 million in retirement. Financial advisers argued then, and now, that such a return is unreasonable and far too idealistic.

See: You’d save more for retirement if only you had this

How the rate of return is calculated and used can be a bit complex, as there are two ways the rate is often expressed: either as a “nominal rate of return” or a “real rate of return.” A nominal rate of return does not include inflation, whereas the real rate of return does (which would make the real rate of return lower than the nominal rate). With a real rate of return, if a person is talking about current dollars and future dollars, the value of those dollars is the same. Ignoring inflation could result in thousands of dollars or more lost in purchasing power.

A higher rate of return may also be assumed for portfolios comprised entirely of equities, which is usually not the case for 401(k) and similar retirement accounts — even for young investors, who are typically advised to invest more in stocks than bonds. The average historical return, since 1987, for the total U.S. stock market is around 11.2%, whereas the total U.S. bond market is approximately 5.9%, said Bijan Ramirez, a financial consultant at SVA Financial. “Most people’s retirement accounts will be a mix of all of these asset classes, giving them returns between 5.9% and 11.2% depending on weighting in this example,” he said.

Also see: 4 critical questions to ask during a market downturn — and how financial advisers answer them

Analysts have their own projected return rates for various types of assets as well, such as short-term or long-term bonds and large cap or mid cap value stocks. Projections also vary if they are based on historical returns versus current market data, said Benjamin Yeung, lead adviser of FAI Wealth in Columbia, Md.

Gregory Hart, founder and managing director of Haddon Wealth Management in Haddonfield, N.J., said he looks at the past 10 or more years of average rates of return for various asset classes when he builds a financial plan for clients that looks 10 to 30 years into the future.

As with most other facets of retirement planning, an assumed rate of return can be different from one person to the next, said Eric Reich, an adviser at Reich Asset Management in Marmora, N.J. “The reality is that it is almost entirely dependent upon your own personal allocation,” he said. Many advisers also have their own way of creating projections, and will show clients a few estimates — from conservative to aggressive — when making a financial plan. “There is no one perfect number to use,” Hart said.

Still, investors may want to err on the conservative side, as it’s better to save too much than end up in retirement with too little, Yeung said. And investors, especially younger ones, should not be chasing returns.

“Participating in the plan is the number one most important factor,” said Jeffrey Edwards, president of Atlas Financial Plans in Irvine, Calif. “The second would be to invest those contributions according to their time horizon and risk tolerance. Do that and the returns will follow.”

More from MarketWatch

Meet the financial planner who uses her $12,000 credit-card debt to help clients avoid her own mistakes

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Financial advisers need to have their own money matters in order before they can guide clients, right?

Don’t tell that to Alexandra Wilson.

The Atlanta, Ga.-based certified financial planner is climbing out of $12,000 in credit-card debt and she’s not afraid to share the story with her clients. It’s actually helped many clients absorb Wilson’s lessons about controlling spending, budgeting and not getting carried away with credit cards.

“They don’t see me as a perfect person and I don’t want them to,” said Wilson, 24, who never wants to be indebted again after paying off her remaining balance of approximately $5,000.

Wilson doesn’t make her finances her main talking point, but it sure does help. “It just helps build that trust and relationship a lot sooner.”

‘I went a little overboard’

When Wilson started college in 2012, her mom let her stay in her house’s finished, 800-square foot basement. Wilson didn’t have to pay rent or tuition, but her mom wanted to teach a lesson about self-sufficiency. So Wilson had to pay for just about everything else, including food, gas, clothing, toiletries and furniture.

That wouldn’t be a problem, Wilson figured. She had a $12-dollar-per-hour part-time job first processing medical bills and then car loans. Earning $1,200 a month, Wilson bought cabinets, a couch, a dining-room table, a mattress, chairs, a television, and a laptop. She also painted the basement. “I wanted it to look really nice,” Wilson said.

Wilson bought lunch on campus and decked out her wardrobe, using her Amazon AMZN, +0.88%   credit card, an American Express AXP, +1.65%  card and store cards from places like Kohl’s KSS, +1.31%   and Old Navy GAP, -2.65%. “I went a little overboard for a while,” she said. “Whatever I wanted, I would buy,” she said.

Wilson, a finance major, graduated from Georgia State University in 2016 with $12,000 in credit-card debt. College taught her how to analyze stocks and bonds, but not how to budget, she said. The school offered a personal-finance class, which she now wishes she took. “I think every single person should have to take a class like that. It’s one of those lifelong skills they really should be teaching.”

Don’t miss: Treasury Department recommends ‘mandatory’ financial-literacy courses for college students

Wilson graduated and moved out of the basement to her own apartment. She got a job as an administrative assistant at a financial planner’s office. She took out a $12,000 loan with a 13% interest rate from Upstart, an online lender, in order to pay off the credit-card debt. Wilson’s store cards all had interest rates upwards of 25%, she noted.

She didn’t tell her mother about the loan “because I didn’t want her to know how bad it was.”

With just one loan to pay down, Wilson “enjoyed life a little.” She used her credit card to buy clothes for the office and drinks and meals with friends. She took on another $4,000 in credit card debt.

“It took me a couple months to realize, ‘Oh, the credit cards are creeping up again.’”

‘There was a lot of shame’

Months after graduating school, Wilson picked up her first book on budgeting.

She also asked for another loan — this time from her mother, Sharon. “There was a lot of shame around that and feeling I let her down.”

The conversation went better than expected. Sharon loaned her daughter around $4,000 with zero interest — but she made it clear this was a one-time deal. Wilson paid at least $100 a month and paid even more when she could. She now owes her mom less than $500 and she owes around $5,000 on the Upstart loan.

Wilson said her mother “helped me stay accountable. It actually turned out be a good thing that she knew.”

$75 weekly grocery bills

By the winter of 2018, Wilson and her now-husband, Mike, got serious about tackling the debt.

They overhauled their grocery expenses and stopped eating out. They now buy their meat once a month at Sam’s Club WMT, +1.59%, freeze it and use it throughout the month. The weekly grocery bill can be as small as $75, but can climb to $200 when buying diapers and formula for their infant daughter.

Wilson doesn’t buy any new clothes until she sells last season’s items on the online secondhand shop thredUP or the local consignment store.

She also uses Calendar Budget, an app that lets her see her household’s cash flow and allows her to adjust expenses accordingly.

A fresh start for Wilson, and her clients

Around the time Wilson started hacking away at the debt, she also started her job at SmartPath, a personalized financial-coaching service. The Atlanta-based company doesn’t sell financial products or manage investments, but it helps clients determine their way to goals like retirement or extinguishing student-loan debt.

In her first couple months on the job, Wilson didn’t mention her back story as clients discussed their struggles. “It was hard for a while. I did feel ashamed because I thought clients would want to talk to someone who already had their finances in order,” she said. “But then I tried it and the results have been incredible.”

Clients start talking candidly about their situation after they hear Wilson’s tale. Now she often discusses her own grocery-shopping tips with clients. “If a client is spending more than they make, it typically boils down to food spending,” she noted.

See also: This financial adviser shed 100 pounds, and $60,000 in debt and back taxes — here’s how he did it

Ryan McPherson, director of coaching at SmartPath, said it was “absolutely wonderful” Wilson talked with clients about her personal money-related problems. “When you hear a financial coach or financial adviser who claims to never have any struggles of their own, beware.”

Part of Wilson’s skill was her capacity to connect, McPherson said. “You’ve got be able to relate to your clients in order to help them.”

Wilson said she’s come to grips with the fact she can’t trust herself with an unlimited access to credit. The couple now has two credit cards, and they both watch their statements closely.

“I just had to set that boundary for myself. I think that helped dramatically.”

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