Posts by Dan Madden, CFP®

James and Lisa are married, both age 40, with two children. They have the following monthly expenses: Mortgage: $2,500 Utilities: $400 Groceries: $1,000 Car loans: $600 Insurance premiums: $500 Discretionary spending: $900 They both have stable jobs and contribute equally to a combined gross income of $190,000/year. According to CFP Board recommendations, how much should…

A client is 40 years old and has a moderate risk tolerance. She has $500,000 to invest and a 20-year time horizon. Which of the following asset allocations best aligns with her risk tolerance and time frame? 80% equities, 20% bonds 60% equities, 35% bonds, 5% cash 50% equities, 50% bonds 90% equities, 10% cash…

William found someone to buy his rental property in Maine. Which of the following properties William would like to purchase as rental property would allow him to complete a like- kind exchange? (1)  A golf course rental property in Arizona that William identified 30 days after selling his Maine property. (2)  A beach rental house…

Which of the following statements concerning a Will are correct? (1) A will can be altered, amended, or completely rewritten at any time before a person’s death. (2)  A will cannot be rewritten but can be amended at any time by a codicil. (3)  A will must be signed by the maker and usually must…

Which of the following statements about 529 savings plans is TRUE? Contributions to a 529 plan are deductible on your federal income tax return. There are income limits for contributors to 529 plans. Qualified withdrawals from a 529 plan are tax-free at the federal level. Account owners lose control of the funds once the beneficiary turns…

During an initial meeting with a new client, financial planner Denise explains her firm’s services and discloses how she will be compensated. She also clarifies her responsibilities and asks the client about their expectations. Which step of the CFP Board’s 7-Step Financial Planning Process is Denise performing? Identifying and selecting goals Developing the financial planning recommendations…

Which of the following statements best describes preferred stock in comparison to common stock? Preferred stockholders have voting rights, while common stockholders do not. Preferred stock dividends are generally variable, while common stock dividends are fixed. Preferred stock typically has a higher claim on assets and earnings than common stock, but usually does not carry voting…