Monty Hall Archives - The Free Financial Advisor

Just when you thought the show couldn’t get any better, we bring you another awesome episode!

Barbara Friedberg joins our normal roundtable of Carrie Smith and Dominique Brown for “case analysis” on a hypothetical couple with student loans, children and credit card debt.

PK from DQYDJ.NET discusses the Monty Hall problem, and how you can apply it to your life and decision making.

Finally, OG & I top off the program with a look at our Top 5 Investment Options for New Investors. I think you’ll be surprised by our discussion!

<> Open, Welcome back to OG.

<> On the Blog: Emergency Funds, do you need one?

<> PK from DQYDJ.NET: The Money Haul Problem

<> Let’s Give Something Away! Congrats to Lance at MoneyLifeAndMore.com, who won our free copy of Keith Ferrazzi’s Never Eat Alone!

<> Roundtable, Featuring Barbara Friedberg of Barbara Friedberg Personal Finance

The situation:

Mickey & Minnie

Ages – 32 and 28. Mickey makes 45k and Minnie makes 30k. Both are teachers.

They both have 403b retirement plans available.

They have 25k in student loans at an 8% interest rate. They break down this way:

Mickey:

8k loan, $110 per month

$500 loan, $20 per month

Minnie

$10k loan, $140 per month

$200 loan, $40 per month

$6,300 loan, $185 per month

Total monthly debt service: $495/month

They also have $8k in credit card debt:

Victoria Secret – $3k at 22.5%

Visa (get airline miles) – $5k at 18.5%

They have children, ages 3 and 6. The 3 year old is in daycare. They pay $500 per week in daycare expense.

They both have Universal Life insurance policies through a big name company. They pay $300 per month into these plans.

They have 2x salary through the school system in term insurance.

They have disability coverage, but aren’t sure how much.

They have car insurance through a big firm and homeowners through another big firm.

They have Roth IRAs with $3,000 in them. Mickey has three stocks: GE, Disney and Ford. Minnie has the Growth Fund of America through American Funds.

They have $15k in their 403b plans. Mickey has his in the interest income fund. He’s worried about the upcoming fiscal cliff. Minnie has hers in the Vanguard Asset Allocation fund based on her age.

There is no savings for college.

They own will planning software, but have no wills.

<> Top 5 Investment Types for New Investors

(I’m on the road Monday from Michigan, so more detailed show notes will follow on Tuesday)