Networking for Financial Counseling and Planning, Financial Counseling and Planning, v. 10 (1), 1999

Networking For Financial Counseling And Planning

Sherman Hanna(1)

One of my favorite features
of this journal is the About The Authors in each issue. Some readers
may wonder what determines which biographical items are included in the
paragraph about each author. I instruct the authors to include all relevant
research, awards, publications, certifications, and previous positions.
In many cases, I have to nag authors to include more information. I believe
it is useful for readers to know as much as possible about authors, both
in terms of evaluating the credibility of the research and in terms of
possible networking – you can learn that an author is doing research or
other activities related to a topic of interest to you. To further enhance
the networking possibilities, I started including e-mail addresses in the
articles many years ago. The ACFPE web site,, has links to
some author web sites, so you can find out more about many of the authors,
see photographs of the authors, etc. Of course, for those who can attend
the AFCPE conference every year, some networking can take place at the
meetings, but I believe that including a lot of biographical information
in the journal and the web site can enhance the process.

This issue’s eight articles
include a diversity of topics and approaches. Muske and Winter’s article
considers the cash flow management activities of 7 families. This is unusual
given that most empirical studies in this and other social science journals
have statistical analyses of samples of 100 to 5,000 households. However,
as with Thompson, Sharpe, and Hamilton (1998)’s article in the previous
issue of this journal, it is useful to consider this type of qualitative
research to obtain different insights than can be obtained from quantitative

The article by Grable and
Joo uses concepts and results from help-seeking research in other fields
to investigate personal finance help-seeking behavior. Their results should
be useful for practitioners and educators. Godwin’s article uses a 1983-89
panel survey to ascertain what factors seem to be related to later debt
problems. There is always a challenge of disentangling causation in such
studies, but she obtained some interesting results.

The article by Danes, Huddleston-Casas
and Boyce describes an evaluation of the High School Financial Planning
Program® sponsored by the National Endowment for Financial Education®
(NEFE) and the Cooperative State Research, Education, and Extension Service.
Their results are encouraging, and should provide ammunition for those
trying to promote such efforts in high schools. Garman, Kim, Kratzer, Brunson
and Joo also performed evaluation research, on a workplace financial education
program, and also obtained encouraging results.

The article by Cooley, Hubbard
and Walz is the only one directly related to retirement, after several
issues dominated by retirement articles. Their article, however, is on
a very important topic, not just for people already retired, but for anyone
engaged in financial planning for retirement. What is the sustainable rate
of withdrawal from a retirement portfolio? This is a crucial part of the
mathematics of calculating how much to save for retirement. I can project
my Social Security and defined benefit pensions in terms of today’s dollars,
and subtract that total annual amount from my desired spending per year.
The next step is to take the present value of the annual gap for my life
expectancy, if I plan to buy an annuity, or divide by a real rate of return
if I will not buy a life annuity. The results by Cooley, Hubbard and Walz
suggest that 3% may be a prudent, although perhaps overly cautious, real
rate of return to assume, although 4% might be acceptable for someone willing
to include stocks in the retirement portfolio. The higher the rate of return
one assumes in retirement, the less will be needed to save for retirement.

Lee and Hogarth investigate
the question of whether shopping around for a mortgage pays off. The results
seem to indicate that it does not except for those who are refinancing.
They have an extensive discussion of implication for educators as well
as researchers. As they point out, the process is so complex for first-time
homebuyers that search may not save money, although logically it should.
Spitzer and Singh consider an old rule of thumb and show that a newer rule
might be relatively easy and more accurate for the high rates of return
we are observing in the stock market. Even though we have calculators,
it is nice to be able to talk about the time it takes to double your funds.


Thompson, J. H., Sharpe,
D. L. & Hamilton, J. A. (1998). Retirement programs: Reaching midlife
professional women. Financial Counseling and Planning, 9(2), 25-36.

1. Sherman Hanna, Professor, Consumer and Textile
Sciences Department, The Ohio State University, 1787 Neil Ave., Columbus,
OH 43210-1295. Phone: (614) 292-4584. Fax: (614) 292-7536. E-mail: