Take-Aways from #AFCPE2023- Part II

 

As I noted last week, I slowly made my way since last December through over a dozen video recordings of presentations made at the 2023 Association for Financial Counseling and Planning Education (AFCPE) Symposium.

Below is another very eclectic summary of key take-aways from recorded presentations on topics of personal interest:

 

Debt Repayment Acceleration- The best way to pay off debt quickly is a “rollover method” where extra payments on debt get shifted from one creditor to another as debts are repaid. The free Utah State University PowerPay program is a great resource to create a debt reduction calendar. There are four PowerPay payoff methods to apply extra payments to: highest interest rate first, shortest term first, lowest balance first, and in the order that debts are entered.

 

Estate Planning- About 60% of the U.S. population dies without a will. In that case, state-specific intestacy laws apply. One reason for a lack of wills is that people come to a standstill over who to name as a guardian for minor children. If a guardian or executor does not want to serve, they can decline at the outset or in the middle of estate administration. Step-children are not considered children unless the creator of a will defines them as such.

 

Insolvent Estates- This is where a deceased person’s debts exceed their assets (i.e., a negative net worth). Every state has a law that states “here’s who gets paid first” (e.g., 1. Attorney, 2. Payor of funeral expenses, 3. Executor, 4. Taxes, 5. Medicaid, 6. Recent medical bills, and 7. Everybody else (credit cards, old medical debt, loans, etc.). In estates with limited assets, entities on the bottom, like credit cards, don’t get paid and there is no money for heirs.

 

Scams- Experts estimate that only 15% of scams are actually reported. Fraud is rampant and some businesses, with the same structure as legitimate corporations, actually exist solely to perpetuate scams. Scammers collects bits of information about people, put it together, and compile in within data bases to be used for fraudulent transactions. Scammers know how the human brain works and how to put people in a state of fear or greed and apply time pressure.

 

Professional Uses of AI- The session began with a quote (“If you don’t like change, you’ll like irrelevance even less) and noted that AI is already part of our lives. Think virtual assistants like Siri and Alexa and autofill in Microsoft Word). Professionals should not use generative AI platforms like ChatGPT unless they have expertise to verify the accuracy of the output and AI output should always be considered a first draft. AI prompts need to be very specific, such as including a word count and level of understanding (e.g., “explain ChatGPT to a 10-year old”).

 

Cryptocurrency- Almost a third of investors, especially young adults, own cryptocurrency. Disadvantages include the following: 1. Use for illegal activities and scams, 2. Fees can be expensive, 3. Regulatory risk (it is possible that countries could outlaw its use), 4. Price volatility (there have been bubbles resulting in big losses), 5. Security risk (crypto miners could be hacked), and 6. No government (e.g., FDIC or SIPC in the U.S.) protection.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.