VeriPlan is designed to help you pursue scientifically based financial planning strategies
VeriPlan offers you unprecedented direct control to perform your own automated personal financial planning. VeriPlan’s functionality also implements the principles of scientific finance. VeriPlan’s internal documentation and its links to information on the web help you to understand scientifically based personal financial planning and investment strategies.
VeriPlan’s functionality reflects a belief that individuals will follow optimal, scientifically proven financial planning and investment strategies, if they understand them and have appropriate and powerful planning tools. VeriPlan’s simple premise is that people want to get the most out of their money in a manner that addresses their needs across their lifecycle. While this objective is a ‘no-brainer,’ achievement of this objective requires steady and conscientious implementation over a lifetime. VeriPlan helps you to understand and to adopt financial practices that are more likely to achieve your lifetime objectives.
Providing extensive documentation embedded directly into the product where you need to find it, VeriPlan explains why various features have been implemented and how to use them. In addition, by providing links to scientific finance articles on The Skilled Investor website and elsewhere on the web, VeriPlan helps you to understand scientifically based personal financial strategies.
Whether you are well off or you intend to become so, VeriPlan is capable of generating lifecycle projections about your financial affairs. Explicitly or implicitly, every financial tool is designed with certain points-of-view. If you use a financial planning tool like VeriPlan, you should understand its viewpoints. On a separate, internal “Viewpoints” worksheet, VeriPlan explains many of the viewpoints that have influenced its design. As a sampling, some of these viewpoints include:
* Your personal earnings, expenditures, and savings are the most important and most reliable determinants of your family’s long-term financial wealth. Pay the most attention to them.
* There is no such thing as risk-free money from investing for individuals. You need to allocate your financial assets in a manner that reflects your relative tolerance for investment risk. You need to stay in the securities markets to earn market risk premiums. You need to build asset buffers to protect yourself from unpredictable market volatility and unplanned personal financial setbacks.
* Passive, index-oriented investment strategies tend to be superior, because they narrow the range of outcomes, and thus, they reduce the total investment risk associated with your portfolio. You should always completely diversify your portfolio. Own investment funds rather than individual securities. VeriPlan can easily model and project the value of your individual securities holdings, but low cost, fully diversified funds are more likely to achieve your lifetime objectives.
* Excessive visible and hidden investment costs tend to reduce the potential growth and value of your portfolio unnecessarily and dramatically. Cut your investment costs aggressively and keep cutting them. Pay yourself and not someone else.
Tags: investment strategies
Personal Financial Planning
- No Financial Planning Software or Calculator Can Predict the Future – Part 2 (No financial planning software and no investment growth calculator can predict the future - Part 2
The future in not predictable, even with automated financial planning software.
The future is fundamentally not predictable. The future of personal financial planning and investing is similarly unpredictable. The Skilled Investor's approach with VeriPlan is different. As a lifetime financial planning [...])
- American Funds – EuroPacific Growth Fund – Class A Shares (AEPGX) get a +2 Fund Authority Score (The diversified investment fund strategy of American Funds' EuroPacific Growth Fund
According to American Funds' Annual Report for the EuroPacific Growth Fund, the fund "seeks long-term capital appreciation by investing primarily in the securities of companies based in Europe and the Pacific Basin." American Fund's 497 filing on the U.S. Securities and Exchange Commission EDGAR system [...])
- Excessive Investment Expenses Take 2% of Individual Investor Assets Every Year (Excessive investment expenses take 2% of individual investor's assets every year
Year after year, millions of people lose large amounts of money on unnecessary and unproductive investment costs and investment expenses.
The typical investor loses about 2% of portfolio assets every year by paying too much and getting too little in return.
This wasted 2% is not a [...])
- Set a Minimum Portfolio Size Threshold for Mutual Funds and ETFs (
Choose mutual funds and ETFs with a minimum economical portfolio size
If you are going to invest in actively managed funds, then you should want them to have a sufficiently large asset base to fund the necessary research.
If an active fund is too small, then fund management quality can suffer or fees could grow. Index funds [...])
- Diversify with Low Cost Index Mutual Funds and ETFs Only (
During the last twenty-five years of the 20th century, mutual fund and exchange traded fund portfolio assembly costs declined dramatically.
Brokerage commissions were deregulated in 1975, and transaction costs have fallen very dramatically since then. Furthermore, well-diversified, low-cost index mutual funds have now become commonplace, while none existed in 1968. The mutual fund industry was still [...])
- Risk-Free Investment Money Is Fantasy Money (
For Individual Investors Risk-Free Investment Money Is Fantasy Money
Securities with low investment risk and high investment returns are just fantasies.
No "risk-free" investment money is consistently and reliably available to individuals. Luck dominates skill in the securities markets. Clever investment selection is vastly over-hyped, and only the promoters tend to benefit. On average over long periods, [...])
- Day Trading Is a Terrible Idea (Why Day Trading Is a Terrible Idea
Investing success is built upon the idea of buying an asset at a discounted price, and then holding it for a long period of time as the value of the asset steadily rises due to the expected risk premium inherent in holding your capital in a risky asset. [...])
- The Birth of Yet Another Darn Asset Class – Infrastructure (The Birth of Yet Another Darn "Asset Class" - "Infrastructure"
Recently, The Skilled Investor published two articles:
The first article discussed how the financial industry keeps manufacturing new asset classes for brokers and investment advisors to sell to individual investors. The Skilled Investor raised the question of whether these new asset classes are likely to serve the [...])
- The most effective strategy to increase your mutual fund and ETF investment returns (
What is the most effective strategy you have to increase your long-term mutual fund and ETF investment returns?
Just reduce your investment fees to rock bottom and buy directly to eliminate all sales loads. This strategy is both simple and entirely within your control. You do not have to be smarter than all those other smart [...])
- Allocate investments across the primary asset classes – Step 5 of 10 Financial Planning Steps in the Right Direction (CLICK HERE TO READ THE SKILLED INVESTOR's OTHER ARTICLES ABOUT THESE "10 FINANCIAL PLANNING STEPS IN THE RIGHT DIRECTION
Appropriately setting your personal investment asset allocation in line with your personal investment risk tolerance is a critical decision for every individual investor.
Because the average risk-averse investor holds the average portfolio asset allocation, this becomes the starting [...])
- Select investments rationally – Step 6 of 10 Financial Planning Steps in the Right Direction (CLICK HERE TO READ THE SKILLED INVESTOR's OTHER ARTICLES ABOUT THESE "10 FINANCIAL PLANNING STEPS IN THE RIGHT DIRECTION
Given the extremely large number and variety of available securities, investors need a rational basis to select among them. Without rational selection criteria and a good understanding of which factors are more or less likely to increase [...])
- Choose Sufficiently Mature Mutual Funds and ETFs (Choose sufficiently mature mutual funds and ETFs
Investing in more mature equity and bond mutual funds and exhanged-traded funds (ETFs) allows you to evaluate the historical consistency of a fund's record.
On average, the future portfolio returns of more mature funds are probably no more predictable than for very young funds with a similar style or strategy. [...])
- American Funds – Income Fund of America – Class A Shares (AMECX) rate a +2 Fund Authority Score (Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors' net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise and objective summaries of mutual funds and ETFs for comparisons within investment [...])
- Taking the Snake Oil Out of Mutual Fund Evaluation (Superior mutual fund and ETF performance charts are the sales tools of modern financial snake oil salesmen
Historical performance charts allow investment fund promoters to market selectively their supposedly superior funds and to allege that their excessively high fees are worth it. Lured in by superior past performance, most often individual investors will get mediocre future [...])
- 2006 and 2007 Personal Income Tax Rates for the 50 States and DC (
2006 and 2007 personal income tax rates for the 50 states and D.C.
The Skilled Investor has made available for downloading a spreadsheet that contains graduated personal income tax rates and other personal income tax rate information for the 50 states and the District of Columbia.
If you want to know about specific U.S. state personal graduated [...])