I've written several posts on the asset protection limits available to consumers who have invested in a variety of financial assets. With all the changes and adjustments that have taken place in the last few months in the financial landscape, I thought it might be helpful to provide a single article summarizing the insurance /protections currently available to investors. Read the full article

This completes the series of posts that I started during National Protect Your Identity Week. I'd like to finish by discussing several more ways to avoid becoming a victim of online ID theft. Read the full article

Today I received another bogus e-mail claiming to be from Melrose Cooperative Bank, a bank with which I do no business. It's such an excellent example of the application of social engineering to phishing fraud that I decided to share it.... Read the full article

It looks like this week's discussion on identity theft will probably overflow into next week a bit, because I'm finding new information to share. Having discussed some of the social engineering-based approaches to stealing your private information, today I'd like to take a brief look at how you can protect your computers against more subtle forms of attack. Read the full article

Only about 10 to 15% of identity thefts with known causes have been attributed to online data theft, but this statistic is not very reassuring. According to the Identity Theft Assistance Center, only 42% of ID theft victims are able to determine how their information was stolen. If the majority of victims don't know how their information was stolen, it may not be safe to assume that the 10-15% figure accurately represents all ID theft losses attributable to online sources. How can you avoid being victimized online? Read the full article

The Federal Reserve announced this morning that it is creating a Money Market Investor Funding Facility to ease tensions in the short-term credit markets. Read the full article

Since this week is National Protect Your Identity Week, I’ve decided to post a couple of articles that are largely drawn from a newsletter that I wrote a while ago. The threat of identity theft is real, although as I have noted before, ID theft rates don’t seem to be increasing. Even so, if you aren’t taking precautions to avoid identity theft, you make yourself an easy target. Fraud-related theft tends to increase in times of economic crisis, so it’s wise to be cautious.

The National Foundation for Credit Counseling is spearheading National Protect Your Identity Week; you may want to check out their Protect Your ID site, which has a number of useful resources on this topic. Read the full article

As part of the Emergency Economic Stabilization Act of 2008, the level of FDIC insurance coverage has increased as of October 3rd to $250,000. As I noted in an earlier post, it’s possible to have much more than $250,000 of coverage at the same bank, because the coverage depends on the titling of the account. Read the full article

Having discussed why having an emergency fund is a good idea and how big an emergency fund needs to be, I’d now like to talk about investments suitable for an emergency fund. Read the full article

Congress voted down the Troubled Assets Relief Program ("TARP") legislation, much to the chagrin of the financial markets. At the moment, the markets continue to be in distress, despite a "dead cat bounce" in stocks today. What should you be doing in terms of your household finances? Read the full article

In my first post on emergency funds, I discussed why having an emergency fund is a wise idea. The next question is, how big does an emergency fund need to be? Read the full article

The financial markets seem to be taking a breather after last week's roller-coaster rides. We're all digesting the latest news of short-selling restrictions and a $700 Billion stabilization plan for mortgage-related debt. But now is also a good time to step back and think more broadly. Read the full article

This Monday, something very unusual happened: a money market fund began trading its shares at 97 cents, instead of a dollar.

Reserve Primary Money Fund (RPFXX) was forced to write down three quarters of a billion dollars of Lehman Brothers debt as a consequence of the Lehman bankruptcy. Even though the debt may eventually be partially paid through the bankruptcy process, as a current obligation the debt has no value. Thus the fund’s share value had to drop, forcing the fund to “break the buck.” On Monday and Tuesday, investors in the fund pulled out $27 billion in response.

FT Alphaville reports that one of Putnam Investments’ institutional money market funds has decided to close and liquidate itself, not because it needs to “break the buck” now, but because of concern that a future run on the fund might force a fire sale of its assets.

Money market funds are normally thought of as stable places to put cash, but even money market funds are not guaranteed not to lose money. How can you judge how safe your money market funds are? Read the full article

American International Group, one of the largest insurance companies in the world, has been struggling to stay afloat this week. Moody's Investors Service and Standard & Poor's lowered their ratings on AIG; these downgrades, in turn, trigger clauses in AIG's contracts with its trading partners that could require the company to raise billions for collateral or penalty payments. It looks as though the federal government has decided to keep AIG from going under.
Still, today insurance policyholders may have been wondering: what happens to my insurance policy if the insurer goes bankrupt? Read the full article

As residents of Houston and Galveston grapple with the aftermath of Hurricane Ike, it strikes me that every year, some part of the US must deal with a natural disaster. Hurricanes in the Gulf and southeastern states, wildfires and earthquakes in California, and flooding in the Midwest often leave lasting consequences for those living in the affected areas.
Although such events happen relatively infrequently in New England, the region is hardly immune from the possibility of a serious natural disaster. Being prepared for a disaster should be an important part of every household's risk management strategy. Read the full article

Most financial planners advise their clients to have money set aside in an emergency fund. Occasionally my clients ask me why they need to keep money on hand for emergencies.

If you’re like most Americans, once you’ve paid your credit card bills, mortgage, and your other bills, there’s not much left of your paycheck. If you’re someone who lives far below his or her means (by this, I mean that you have two or three thousand dollars a month or more left unspent from your income every month) you have the capacity to cover many typical unexpected expenses, like the sudden failure of your heating system in the middle of winter. If that's your situation, you’re in a position to cover emergency expenses from your cash flow – unless the emergency happened to be the loss of your job, in which case you’d still be in trouble.

The fact is, though, that few households have large amounts of cash flow that go unused from month to month. Read the full article

In Part 1 of this series, I explained why people need life insurance; in Part 2, I explained the basics of “how insurance works.” A question that people always have is, “how much life insurance should I buy?” There are various guidelines for estimating how much life insurance one should buy. Alas, they usually lead to the wrong answer. Read the full article

Last week, state regulators closed down the Columbian Bank and Trust Co. of Topeka, Kansas. It was the ninth bank failure thus far this year, and probably not the last. I've written several posts recently on FDIC insurance of bank accounts and CDs, but many investors have far more money in their retirement and brokerage accounts than they do in banks. Since FDIC doesn't cover these assets, should you be worried? Read the full article

The possibility of further bank failures continues to hover in the air. In a June post I explained that under the right circumstances a depositor can have funds in excess of $100,000 insured by the FDIC in a single bank. For cash-holders with serious assets, there is at least one other way to obtain FDIC insurance for really large sums. Read the full article

Today I'd like to offer a simple explanation for how life insurance works. This discussion will also lay a foundation for discussing the difference between term and permanent life insurance. The first post in this series, on the reasons someone might need life insurance, is worth reading if you're not sure whether you need life insurance. Read the full article

A couple of months ago, I discussed a loophole in the Social Security law that allows current retirees to pay back the benefits they've received (without interest) and restart the Social Security clock at a higher benefit level. Recently, I discovered two additional unusual Social Security strategies. Read the full article

Everyone has heard of life insurance and most people have some; it’s not an exotic concept. Yet for the average person, buying life insurance means signing the most complex contract you'll ever enter into. This will be the first of a series of short primers on life insurance: why people need it, how it works, how much to buy, what kind to buy. Read the full article

Most people understand that the FDIC insures certain kinds of bank deposits, like bank CDs. There's no way to “guarantee” an investment against losses, but an FDIC-insured deposit is probably the closest most of us will ever come to a guaranteed investment. However, consumers are sometimes a bit confused about how much FDIC insurance coverage they can have. Read the full article

I must confess: I expected the IRS to have a hard time meeting its original schedule for delivering tax rebate checks. Read the full article

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