Author Archives: Melissa Hart

Jul 22 2015

How to Open a Mutual Fund Account at a Brokerage Firm

“It’s easy to figure out the right type of account—just start with what you’re saving for.”

Too often, investors want to invest, but they don’t know where to start.  While most investment companies and brokerage firms make it as easy as possible to open an account and begin investing, for many would-be investors opening an account is confusing and often traumatic.

The link below describes a practical approach that helps would-be investors to begin investing at Vanguard—one of the largest and most successful companies in the investment world.  Note:  The link below provides information for Vanguard, but other investment companies and brokerage firms provide similar information on their websites.  At the Vanguard site, there is basic information about mutual funds.  Then specific information about fees and no-load funds is included in the section “Discover Vanguard’s Advantages.”  Next, there is a section on choosing the right fund.  Then, information about different types of investment accounts is provided.  Finally, there is a 3-step process that can be used to open an account.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Remind students of the advantages of beginning to invest sooner rather than later.
  • Visit the Vanguard (or other investment or brokerage firm websites) for more information.
  • Encourage students to open a mutual fund investment account when they have saved the money needed to begin an investment program.

Discussion Questions

  1. Why do you think people are reluctant to begin investing?
  2. Even though investment companies and brokerage firms make the process as easy as possible, people are often “afraid” to open an account and begin investing. How can you overcome this fear?
Jul 18 2015

Bitcoins or a Credit Card?

Do you shop online?  Have you seen websites that allow you to pay with bitcoins?

Beware of the Bitcoin (virtual currency) risks!!

  • Values go up and down based on demand.
  • Payments made with virtual currencies aren’t reversible.
  • You do not have the same legal protections as more traditional payment methods.

For more information, click here.

Teaching Suggestions

  • Ask students if they have purchased products or services with bitcoins and what has been their experience.
  • Ask students if they check out the seller’s reputation before a purchase with bitcoins.

Discussion Questions

  1. Should the payment with bitcoins go directly to the seller or a payment processor?
  2. Does a payment through a payment processor offer any protections?
  3. If you receive damaged merchandise, will you get a refund in virtual currency, U.S. dollars, or store credit?
  4. If you have a problem with bitcoin-related product or service, where should you file a complaint?
Jul 15 2015

House Rich, Cash Poor: How One Couple’s “American Dream” Home Nearly Tanked Their Finances

“While our original $150,000–$170,000 price range would have put our housing costs at a manageable 30% of our total income, springing for a $200,000 loan shot that number up to just shy of 50%.“

For many people, a logical step after completing college is often purchasing a home and inching closer to the American dream.  And yet, there are pitfalls to obtaining a home that can lead to financial stress and the inability to reach important short-term and long-term financial goals.

This article describes how one couple took all the right steps to prepare for a home purchase, but eventually decided to purchase a home that cost more than they planned to spend on housing.  The reason was simple:  They fell in love with a home that was too expensive when compared to their total income.  The article continues to describe what happens next in their attempt to regain their financial health.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the necessity of preparing a realistic budget that reflects mortgage payments, insurance, taxes, repairs, etc when purchasing a home.
  • Share the advantages and disadvantages of owning versus renting a home.

Discussion Questions

  1. Given your goals and lifestyle, how important is home ownership to you?
  2. What steps should you take to prepare for purchasing your dream home?
  3. Assume you have found your dream home and you can afford the payments, insurance, taxes, repairs, etc. What steps are necessary to negotiate the purchase and obtain financing?
Jul 11 2015

CMS Proposes Rule to Strengthen Managed Care for Medicaid and CHIP enrollees

On May 26, 2015, the Centers for Medicare and Medicaid Services (CMS) proposed to modernize Medicaid and Children’s Health Insurance Program (CHIP) managed care regulations to update the programs’ rules and strengthen the delivery of quality care for beneficiaries.  This proposed rule is the major update to Medicaid and CHIP managed care regulations in more than a decade.  It would improve beneficiary communications and access, provide new program integrity tools, support state efforts to deliver higher quality care in a cost-effective way, and better align Medicaid and CHIP managed care rules and practices with other sources of health insurance coverage.  Overall, this proposed rule supports the agency’s mission of better care, smarter spending, and healthier people.

For more information, click here.

Teaching Suggestions

  • Ask students to visit the CMS.gov website to learn how the healthcare delivery landscape has changed and grown substantially since 2002.
  • Ask students how CMS might strengthen the quality of care provided to beneficiaries.

Discussion Questions

  1. Why is the CMS proposing new rules to strengthen managed care for Medicaid and CHIP enrollees?
  2. How does the CMS plan to modernize Medicaid and CHIP regulations?
Jul 8 2015

5 Ways To Become An Informed Medicare Consumer

Each day, you make important choices about your finances, health, privacy, and more.  Medicare has 5 things you can do to help you become an informed Medicare consumer.

  1. Know your rights. As a person with Medicare, you have certain rights and protections designed to help protect you and make sure you get the health care services the law provides.
  2. Protect your identity. Identity theft happens when someone uses your personal information without your consent to commit fraud or other crimes.  Keep the following information safe:
    • Your name
    • Your Social Security Number (SSN)
    • Your Medicare Number (or your membership card if you’re in a Medicare Advantage or other Medicare health plan)
    • Your credit card and bank account numbers
  1. Help fight Medicare fraud. Medicare fraud takes money from the Medicare program each year, which means higher health care costs for you.  Learn how to report fraud.
  2. Get involved with other seniors with the Senior Medicare Patrol (SMP). The SMP educates and empowers people with Medicare to take an active role in detecting and preventing health care fraud and abuse.
  3. Make informed Medicare choices. Each year during the Fall Open Enrollment Period (October 25-December 7), review your plan to make sure it will meet your needs for the following year.  If you are not satisfied with your current plan, you can switch during the Open Enrollment Period.

For more information, click here.

Teaching Suggestions

  • Ask students to prepare a list of medical expenses that Medicare does not cover.
  • Ask students to check out the Centers for Medicare and Medicaid Services (CMS) videos for tips on preventing Medicare fraud and see how seniors are learning to stop, spot, and report fraud.

Discussion Questions

  1. Why is it vital to fight against Medicare fraud?
  2. Why is it important to review your health care plan during the Fall Enrollment Period?
Jul 4 2015

Quiz: What’s Your Financial SPF Factor?

“So put aside that beach read for a few minutes and take this quiz to assess your financial SPF factor.”

While most people recognize SPF as standing for sunscreen, SPF–as defined in this article stands for Save, Protect, and Fund.  After a brief explanation of each SPF financial term, the article asks 11 questions that someone can use to help gauge their financial knowledge and financial planning skills.

At the end of the quiz, you are also told how your answers stack up and then the article provides suggestions about how to improve not only your score, but also your ability to plan for your financial future and retirement.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the importance of effective financial planning over your lifetime.
  • Begin a discussion about the benefits of long-term investments.
  • Review time value of money calculations.

Discussion Questions

  1. How can financial planning help you obtain your goals and objectives?
  2. Why should you begin investing sooner rather than later?
  3. A common problem for some people is they don’t have the money they need to begin an investment program. Given your current circumstances, what steps can you take to “find” the money to start an investment program?
Jul 1 2015

The New Grad’s Guide to Student Loan Debt

“Finishing college is surely cause to celebrate—but it is also time for some hard realities to hit.” 

This article provides information about what happens after graduation and you have to start paying back student loans.  Specific information includes:

  1. When you will start making payments
  2. How much you will pay and which repayment option to consider
  3. How to make your payments
  4. What happens if you want to change your repayment plan
  5. The importance of making a budget that includes your loan payments.

Note:  There are also links to a “very informative” video and additional articles at the bottom of this article that provide even more information about student loans and what happens if you don’t make payments.  Definitely worth a click.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Help students understand that student loans are one way to finance their education, but loans should not be considered free money that doesn’t have to be repaid.
  • Illustrate what can happen if student loans are not paid back.

Discussion Questions

  1. Many students obtain student loans to help pay for their college education. Are there other options that can be used to pay for college?
  2. Assuming that you decide a student loan is the best way to obtain the money you need to pay for college, what steps can you take to understand the conditions of the loan agreement that you will sign in order to obtain the loan money?
  3. What happens when someone finishes college, but doesn’t make the student loan payments that are required?
Jun 27 2015

Defrauding Investors

On May 28, 2015, the Securities and Exchange Commission announced fraud charges against William Quigley.  He is accused of creating a scheme to steal from investors and from a brokerage firm where he worked as the director of compliance.

The SEC’s Enforcement Division alleges that was involved in a scheme to solicit investors to buy stock in well-known companies or supposed start-ups on the verge of going public.  The SEC alleges that:

  • The securities were never purchased for the investors.
  • Quigley wired the money out of the country or he withdrew it from ATM’s near his home.
  • he had accomplices, two brothers who live in the Philippines.

For more information, click here.

Teaching Suggestions

  • Have students prepare a position paper on how to protect themselves from investment fraud.
  • Have students go to the Securities and Exchange Commission website (sec.gov) to learn how SEC protects investors and maintains fair, orderly and efficient markets.

Discussion Questions

  1. How can federal, state, and local governmental agencies protect investors from investment fraud?
  2. What punishment should be meted out to investment fraudsters?
Jun 24 2015

Reduced Money Worries

To minimize money worries and achieve greater financial freedom, five steps are recommended:

1.  Budget – create a simple money plan to track income, expenses, and savings. Closely monitor small daily expenses, which can quickly add up to large amounts.

2. Reduce – avoid buying unnecessary and unfulfilling items that pile up and collect dust. Make a conscious choice to reduce your consumption and unneeded spending.

3. Recognize – avoid debt to purchase things that you believe will impress others.

4. Educate – learn as much as you can about wise money management and personal financial planning.

5.  Get started – take action today to spend less, save, and learn more about wise money choices. Your habits will not change overnight, but a small step toward financial security can occur immediately. Consistent action will make a difference.

For additional information on reducing money worries, click here.

 

Teaching Suggestions

  • Have students create a list of common causes of money worries.
  • Have students prepare a drama with suggested actions for reduced money worries.

Discussion Questions 

  1. What are common actions that can help reduce money worries?
  2. Why do people consistently behave in a manner that creates money worries?
Jun 20 2015

New Crisis Possible, But, Not Like 2008: Geithner

“Even with the challenges in the U.S. economy, America is a ‘lucky country.’ “

During a CNBC interview, former Treasury Secretary Tim Geithner said the market reforms after 2008 put “much more capital into the system” and “much tougher rules on risk-taking.”  He went on to say that the reforms are strong enough, if they’re not eroded, to buy this country a relatively long period of financial stability.

Although the American economy is doing relatively well and making steady progress at the present time,     a financial crisis will happen again at some point.  Still the structural reforms undertaken after 2008 can serve to mitigate any future damage.  Mr. Geithner concludes that if a financial crisis does happen in the future, the Federal Reserve and the government would need to act again.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss how the economy affects the lives of the average U.S. citizen.
  • Point out specific steps the government took to stabilize the economy and the financial markets during the economic crisis that began in 2008.

Discussion Questions

  1. How does a healthy economy affect you and your family? How does a weak economy affect you and your family?
  2. At a time when many people believe the government is too involved in the lives of individuals and business, should the government take steps to stabilize the economy and financial markets during an economic downturn? Explain your answer.