166 Is That Latin 102?

Well, you lucked out again. We got so wrapped up in one of our discussions that we only got to complain about 3 topics today instead of four.

In this episode of the Financial Procast we discuss the spending habits of the rich, poor and everyone in between. You may be surprised that the differences are not as substantial as you think in regards to spending, however, the differences become very apparent when looking at savings rates.

In other news, it turns out that student loan default rates are much worse than everyone thought.

Nearly one in three Americans who are now having to pay down their student debt–or a staggering 31.5%–are at least a month behind on their payments, new research from the Federal Reserve Bank of St. Louis suggests. That figure is far higher than official delinquency measures reported by the Education Department and the New York Fed. And it’s also likely the most accurate.

Josh Mitchell – Wall Street Journal, April 14, 2015

And finally…

It turns out that the typical “risk profile” and the use of target date funds may be pushing people (in particular millennials) to take on more risk than they're comfortable with. According to a recent story over at Investment News ,

target date fund recommendations designed specifically for millennials exceed the risk profile of 96% of their intended audience, said Tyler Nunnally, a U.S. strategist for FinaMetrica, another company that works with advisers in assessing clients' risk tolerance.

That's because millennials are actually quite averse to risk. Having lived through two economic downturns, and several major market corrections, millennials are conservative investors — much to the surprise of many financial advisers.

Wait?

That means that not everyone fits inside of this pretty little box? That means that financial advisors can't always rely on an “if this, then that” sort of logic to make recommendations to their clients?

Yes, that's precisely what it means.

Our Desperate Plea

To those in our audience who have reached out to us and let us know more of what you’d like for us to discuss on the Finanical Procast, we thank you. And for those of you that have not let us know what you’d like to hear us discuss, please don’t hesitate to do so, we are open and willing to entertain just about anything as it relates to the world of finance.

We record this show every week for the benefit of those in our community and it always helps to know more of what you’d like for us to discuss.


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