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From lottery tickets to life insurance: Here are 7 ‘bad assets' that could cause you to retire poor in America

From lottery tickets to life insurance: Here are 7 ‘bad assets' that could cause you to retire poor in America

Yahoo03-05-2025

You probably know the importance of retiring with a hefty, well-diversified portfolio of assets. But what if you've spent some of your money accumulating things that look like 'assets' but are actually hidden liabilities.
Here are the top seven tempting but deceptive money drains that many people trap themselves into before retirement.
I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast)
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If you're relatively older and financially secure, splurging on your 'dream car' can be the ultimate temptation. Why not buy the toys you've always wanted and resell them to someone else who's just as passionate about motors as you?
Well, the typical new car loses roughly 30% of its value within the first two years alone, according to Kelley Blue Book. The depreciation rate slows down after those initial years, which means buying a modestly used car at an affordable price is a better way to secure your financial future.
Spending your retirement on the beach in Cabo Verde is undoubtedly attractive for many people. But there's a difference between buying a vacation home somewhere exotic and buying a timeshare.
Unlike property ownership, timeshare ownership involves steep initial costs, recurring maintenance fees, low resale potential, and rigid usage schedules.
On top of that, the secondary market is notoriously poor, and many owners struggle to exit their agreements. Sales tactics can be aggressive, and the contracts themselves are often complex and difficult to navigate.
Consider creating an annual budget for vacation rentals in your retirement plan instead of locking yourself into these bad deals.
Yes, there is an active market for luxury collectibles such as vintage cars, designer handbags and luxury watches. But a Rolex probably doesn't deserve a spot on your retirement portfolio.
Luxury consumers are a fickle bunch and what's considered valuable today may not be as valuable by the time you retire.
Diamonds, for instance, were a popular collectible but have seen prices decline by 26% in just the last two years, according to The Guardian.
With that in mind, avoid the glamorous 'assets' and focus on safe but boring investments like corporate bonds or dividend stocks.
Read more: Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
It's nearly irresistible to think of your primary residence as the bedrock of your retirement. The median American homeowner is sitting on $327,000 in home equity as of 2024, according to the ICE Mortgage Monitor report.
However, it's possible to go overboard with this investment. Buying a house that is far beyond your budget or too big for your needs can make it tougher to pay off the mortgage or maintain the property when you're on a fixed income. It's also a good idea to avoid excessive and frequent renovations to try and add value to the property.
Instead, focus on minimizing costs and debt and consider downsizing to tap into some of that built-up equity to make your retirement more flexible and comfortable.
Buying lottery tickets or pouring money into unproven and speculative investments is rarely a good idea, regardless of your age. But the risks are magnified when you're older and approaching the end of your career.
Instead of indulging in wishful thinking that a meme-worthy cryptocurrency or random penny stock is going to make you rich overnight, consider the safer path to retirement. Focus on blue chip dividend stocks, bonds or gold.
Rental income from a robust portfolio of real estate is a great way to enhance your passive income in retirement. But if you're at the end of your career and rely on a fixed income, you should recognize the fact that your capacity for risk is much lower.
With this in mind, consider lowering or paying off all the mortgages on your rental properties. If you can't, sell a few units to pay off the loans on others in your portfolio.
As a retired landlord, you can't afford a sudden housing market crash or interest rate volatility.
Despite what the insurance salesman has probably told you, whole life insurance isn't an ideal retirement vehicle.
These plans can be five to 15 times more expensive than term life insurance, according to Investopedia, and you have limited control over how the capital is invested.
Instead, focus on relatively simple financial instruments that offer steady cash flow and greater control.
Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it
Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead
There's a 60% chance of a recession hitting the American economy this year — protect your retirement savings with these essential money moves ASAP (most of which you can complete in just minutes)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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Shark Tank's Kevin O'Leary warns Americans on 401(k)s
Shark Tank's Kevin O'Leary warns Americans on 401(k)s

Miami Herald

time24 minutes ago

  • Miami Herald

Shark Tank's Kevin O'Leary warns Americans on 401(k)s

Most American workers generally understand that Social Security monthly paychecks will one day significantly contribute to their future retirement income. But because those Social Security benefits are not by themselves enough to provide people with the financial resources they need to live on comfortably, most also recognize that 401(k) plans and IRAs (Individual Retirement Accounts) are additional tools necessary for securing their financial future. However, finding the extra money to contribute to these accounts can be a significant challenge. Kevin O'Leary, a prominent entrepreneur and investor widely known for his appearances on ABC's "Shark Tank," shares a method that enables workers to cut expenses and direct more money toward their 401(k) and IRA savings. He also offers a stark financial warning. Don't miss the move: Subscribe to TheStreet's free daily newsletter Participating in an employer-sponsored 401(k) plan is a dependable way to build retirement savings, especially when employers offer matching contributions. With automatic payroll deductions, this method allows employees to invest in their future effortlessly, making it both practical and efficient. Related: Jean Chatzky sends strong message to Americans on Social Security IRAs, on the other hand, provide a wider selection of investment options not typically available through 401(k) plans. However, they require more hands-on management, as individuals must open an account and set up automatic contributions independently. In addition to a major warning, O'Leary offers valuable advice on how individuals can cut costs and increase their retirement contributions, which for many Americans primarily consist of 401(k) plans. Many workers who are committed to contributing as much money as they can toward their 401(k) plans find it difficult to do so because their spending habits leave little left to put away for the future. In fact, O'Leary emphasizes, many people spend more than they make - and are working in large part to finance their debts and pay their bills. "You are in constant fear of losing your job, or of your assets losing their value. You worry that one big, unexpected bill might put you under for good, and then you avoid that thought," described O'Leary in his book, "Cold Hard Truth on Men, Women and Money." "You're avoiding the phone and people to whom you owe money. Maybe you're retreating from friends and family out of fear or shame," O'Leary continued. "You're steeped in magical thinking about money - for example, believing you're one lottery ticket, inheritance, or windfall away from total financial transformation." "You wake up in despair and you go to bed defeated. You don't live within your means because you don't even know what they are." More on retirement: Jean Chatzky shares major statement about Social SecurityDave Ramsey sounds alarm for Americans on retirementScott Galloway warns Americans on 401(k), US economy threat O'Leary explains that people who feel this describes them to any degree should correct it immediately. He offers a first step people can take to get a handle on where they stand financially. Related: Dave Ramsey warns Americans on Social Security In order to increase retirement savings and add a larger percentage of their income to 401(k) plans, people first need to get a good feel for where they are financially. O'Leary suggests simplifying money management down to a single figure - either positive or negative. He encourages individuals to calculate their total earnings over three months, calling this their 90-Day Number. The process starts with identifying income. If pay stubs aren't easily accessible, reviewing bank statements can help track all incoming funds, including salaries, side jobs, and other sources of cash flow. Next, he recommends listing all expenses separately - small purchases such as coffee, clothing, and snacks, as well as major costs such as bills, debt payments, rent, and car loans. The key step is subtracting total expenses from total income. If the result is positive, the individual is in good financial shape and can immediately consider increasing their 401(k) contributions. A negative outcome signals a need for adjustments. The extent of necessary changes depends on how much spending exceeds earnings, requiring smarter budgeting to create space for investments in long-term financial security, O'Leary explains. In the latter instance - after some planning, budgeting and hard work - a person can still reach the point of increasing investments in their 401(k) plans. Related: Dave Ramsey sends major message to Americans on IRAs, Roth IRAs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.

With the NCAA landscape changing, can small schools thrive in college athletics without the big bucks?
With the NCAA landscape changing, can small schools thrive in college athletics without the big bucks?

Chicago Tribune

time31 minutes ago

  • Chicago Tribune

With the NCAA landscape changing, can small schools thrive in college athletics without the big bucks?

ORLANDO, Fla. — As schools prepare to begin sharing millions with their athletes, there is no avoiding the reality that if you're not a Power Four school, you're at a disadvantage. With major conferences running the show, St. Bonaventure and Florida International don't even have a seat at the table. FIU and St. Bonaventure aren't necessarily worried about a head-to-head fight over top players with deeper-pocketed schools. The priority has become survival and finding a balance between athletics ambition and financial sustainability. Adrian Wojnarowski spoke candidly about the challenges he faced during his inaugural season as the general manager of the St. Bonaventure men's basketball team. Solidifying a recruiting class that would improve the team and embrace the school culture was not easy. After July 1, when lucrative paychecks will pretty much become mandatory for blue-chip prospects, it's not going to get any easier. With some 2,000 undergraduate students, the Bonnies are outnumbered in resources and revenue when competing even against other Atlantic 10 teams like VCU, Dayton, and Saint Louis. Wojnarowski, ESPN's former lead NBA reporter, thinks he has identified a formula for locating the ideal prospect. To him, St. Bonaventure is a landing spot for international players adjusting to a new culture and college life, transfers who may have fallen short at a high major and need development, or those looking to move up to a mid-major. He admits the school in upstate New York could be a pit stop on a player's journey. 'I want them to see that our environment, our coaching staff, our small school, especially for international players coming over, what I really try to sell is your adjustment to American college life,' he said at the National Association of Collegiate Directors of Athletics and Affiliates Convention this week. 'I think for a lot of kids, it's easier in a school with 1,900 students than a school with 19,000. And you'll come to have two great years with us, and then you'll probably end up at schools with 19,000 or 29,000,' he said. 'And so you're selling, for us, we're your first step on the way to somewhere else, or the other one to me is we're the place to come when you've got to get the basketball right.' Female athletes appeal landmark NCAA settlement, saying it violates federal antidiscrimination lawIf the plan goes awry and a recruit slips away, one thing the former NBA insider refuses to do is blame the money. 'Fundraising is hard, creating new revenue streams is hard, but the one thing that I try to stay away from with us is not saying, 'Oh, we didn't get him because they offered more money,' and using that as a crutch all the time. I really examine when we lost a player,' Wojnarowski said. 'Are we being honest with ourselves in saying that we did everything outside the economics to make our case to this person?' FIU has more than 40,000 undergraduates, but the athletic department is using a similar philosophy, pinpointing advantages and opportunities to come from the settlement instead of the negatives. Similar to St. Bonaventure, FIU doesn't expect to come close to the $20.5 million revenue-sharing cap available over the next year. For a competitive edge, unlocking new revenue streams is fundamental. 'To compete, from a revenue standpoint, you have to think outside the box of your conventional fundraising and targeting donors,' senior associate athletic director Joseph Corey said. 'That's why you're looking at concerts being held at different venues, different festivals to generate extra revenue to bring in, different revenue streams, and not just fundraising going after the same donors. You've got to go beyond that in order to be able to compete.' Being based in Miami has its perks. Proximity to celebrities is one of them. In August, FIU secured a 10-year partnership with Pitbull, the singer and rapper who coins himself 'Mr. 305.' 'We did the partnership with Pitbull – Pitbull Stadium. He's on tour, but part of the deal was that he would be collaborating with us and doing events for us from a fundraising standpoint,' Corey said. 'You've got to think outside the box. Especially in a city like Miami, it's about the experience too.' Schools unlocking creative revenue streams is something that can be expected. FIU competes in Conference USA alongside teams like Liberty, Louisiana Tech, UTEP, Kennesaw State and Jacksonville State. The football team went 3-5 in 2024, finishing sixth in the conference. The men's basketball team finished last with a 3-15 conference record. It's hard to sell donors on losing teams. 'Let's call it what it is, FIU's not going to be able to keep up with the Alabamas of the world, the Georgias, Michigan, or Texas, but what can we do? We can be the best in our conference. That is our goal,' Corey said. 'Let's be the best in our conference and really compete there because once you're at the top of your conference, that means more revenue in other areas. Everyone wants to donate to a winner.'

US reduces presence of staffers not deemed essential in Middle East as tensions rise — Trump adds: ‘Could be dangerous place'
US reduces presence of staffers not deemed essential in Middle East as tensions rise — Trump adds: ‘Could be dangerous place'

New York Post

time43 minutes ago

  • New York Post

US reduces presence of staffers not deemed essential in Middle East as tensions rise — Trump adds: ‘Could be dangerous place'

The United States is drawing down the presence of staffers who are not deemed essential to operations in the Middle East and their loved ones due to the potential for regional unrest, the State Department and military said Wednesday. The State Department said it has ordered the departure of all nonessential personnel from the US Embassy in Baghdad based on its latest review and a commitment 'to keeping Americans safe, both at home and abroad.' The embassy already had been on limited staffing, and the order will not affect a large number of personnel. The department, however, also is authorizing the departure of nonessential personnel and family members from Bahrain and Kuwait. That gives them the option of leaving those countries at government expense and with government assistance. 4 Secretary of State Marco Rubio testifies before House Committee on Appropriations subcommittee budget hearing for the Department of State and related programs on Capitol Hill in Washington, Wednesday, May 21, 2025. AP Defense Secretary Pete Hegseth 'has authorized the voluntary departure of military dependents from locations' across the region, US Central Command said in a statement. The command 'is monitoring the developing tension in the Middle East.' Speaking at the Kennedy Center in Washington on Wednesday evening, President Donald Trump said, 'They are being moved out, because it could be a dangerous place, and we'll see what happens. We've given notice to move out, and we'll see what happens.' Tensions in the region have been rising in recent days as talks between the US and Iran over its rapidly advancing nuclear program appear to have hit an impasse. The talks seek to limit Iran's nuclear program in exchange for the lifting of some of the crushing economic sanctions that the US has imposed on the Islamic Republic. Iran insists its nuclear program is peaceful. The next round of talks — the sixth — had been tentatively scheduled for this weekend in Oman, according to two US officials, who spoke on condition of anonymity to discuss diplomatic matters. However, those officials said Wednesday that it looked increasingly unlikely that the talks would happen. Trump, who has previously said Israel or the US could carry out airstrikes targeting Iranian nuclear facilities if negotiations failed, gave a less-than-optimistic view about reaching a deal with Iran, telling the New York Post's 'Pod Force One' podcast that he was 'getting more and more less confident about' a deal. 4 Defense Secretary Pete Hegseth testifies during a hearing before the Senate Appropriations Committee in the Dirksen Senate Office Building on June 11, 2025 in Washington, DC. Getty Images 'They seem to be delaying, and I think that's a shame. I'm less confident now than I would have been a couple of months ago. Something happened to them,' he said in the interview recorded Monday and released Wednesday. Iran's mission to the UN posted on social media that 'threats of overwhelming force won't change the facts.' 'Iran is not seeking a nuclear weapon, and US militarism only fuels instability,' the Iranian mission wrote. Iranian Defense Minister Gen. Aziz Nasirzadeh separately told journalists Wednesday that he hoped talks with the US would yield results, though Tehran stood ready to respond. 4 A US flag flies in front of the Annex I building inside the compound of the US embassy in Baghdad in this December 14, 2011, file photo. REUTERS 'If conflict is imposed on us, the opponent's casualties will certainly be more than ours, and in that case, America must leave the region, because all its bases are within our reach,' he said. 'We have access to them, and we will target all of them in the host countries without hesitation.' Meanwhile, the Board of Governors at the International Atomic Energy Agency was potentially set to vote on a measure to censure Iran. That could set in motion an effort to snap back United Nations sanctions on Iran via a measure in Tehran's 2015 nuclear deal with world powers that's still active until October. Trump withdrew from that agreement in his first term. Earlier Wednesday, a statement from the United Kingdom Maritime Trade Operations center, a Mideast-based effort overseen by the British navy, issued a warning to ships in the region that it 'has been made aware of increased tensions within the region which could lead to an escalation of military activity having a direct impact on mariners.' 4 President Donald Trump, right, speaks with reporters as Secretary of State Marco Rubio listens upon arriving at Morristown Municipal Airport in Morristown, NJ, en route to Camp David, Md., Sunday, June 8, 2025. AP It urged caution in the Persian Gulf, the Gulf of Oman and the Strait of Hormuz. It did not name Iran, though those waterways have seen Iranian ship seizures and attacks in the past. The top US military officer for the Middle East, Gen. Erik Kurilla, was scheduled to testify before the Senate Armed Services Committee on Thursday, but that testimony has now been postponed, according to the committee's website. The Pentagon has not commented on the postponement. Meanwhile, Iraq's state-run Iraqi News Agency said in a statement attributed to an unnamed government official that the evacuation of some nonessential employees from the US Embassy in Baghdad was part of 'procedures related to the US diplomatic presence in a number of Middle Eastern countries, not just Iraq' and that Iraqi officials 'have not recorded any security indicators that warrant an evacuation.' 'We reiterate that all security indicators and briefings support the escalating assessments of stability and the restoration of internal security,' the statement said.

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