Review Category : Investments

What Blackjack Will Teach You About Retirement

sponsored by Midland National You have made it to Las Vegas and settled into your favorite hotel.   After a few quality minutes of checking out your luxurious room, you decide it’s time to hit the main gambling floor.  Choices, choices.  You walk by the sports book, past the slots, the screaming at the craps table, and you wind up sitting down to play your favorite game – blackjack.   So, what in the world can playing blackjack teach you about your retirement? More importantly, HOW can blackjack teach you one of the most valuable lessons about protecting your retirement assets? Blackjack is an interesting game.  It’s part strategy and part social chatting depending on whether the dealer is giving you a run of easy cards to play or a set of more difficult choices depending on what the dealer doles you out.   In a perfect world, you would be getting blackjack after blackjack (or 21 after 21), but in reality you’ll ...

Read More →

Is It Time To Consider I Bonds

I was reminiscing the other day about the gifts that my grandmother used to give me for my birthday and at holiday time.    She wasn’t a great gift giver, especially when I would get a sweater vest with the big letter “T” etched right in the middle of the sweater. Oh yeah, I also got socks a few years which is a swell gift if you want to end up on the loser list at middle or high school.   But, the one gift that didn’t mean much to me at the time and paid dividends later were the series EE savings bonds that I stuck in an envelope and let sit in my drawer until they matured.   Those very bonds helped me be able to put a down payment on my first car so I can thank my grandmother for that. With interest rates hovering at an all time low over the past seven or eight years, hardly anybody talks ...

Read More →

Should I Leave My Kids A Million Dollars

Just the other week, I had one of the more interesting conversations with a client which sparked me to write this article. I’ve never been the kind of advisor that wants to ‘sell’ my clients insurance. I have always felt it to be best to implement risk management products for the best cost possible or utilize insurance vehicles in the best way to accumulate cash based upon each individual client situation. One of my clients called the other day and said they were considering buying a second to die policy. When I initially heard the request, I said, “Well, you don’t really have a need for more life insurance and we have really good accumulation strategies set up for your other goals.” As the conversation deepened, he told me that he wanted to be 100% certain that when he and his wife died that each child would get 2 million dollars no matter what happened with the rest of his ...

Read More →

Is It Time To Make A Roth IRA Conversion?

Over this past year, more clients have asked me about whether or not it makes sense to do a conversion from their Traditional IRA to a Roth IRA.   I’ve written before on the merits of a back door Roth IRA (http://bit.ly/2jNBfFA) before on Your Smart Money Moves, but the larger question about converting an existing account can be a tricky one to approach in your personal finances.   More importantly, if you are not proactive in your tax planning, you could miss a tremendous opportunity to take advantage of a bad year with your business or if you have a substantially down year of income.  Given the volume of planning cases I see every month, especially those in their late 40’s to late 50’s should be looking at this strategy very closely if you are in a transition phase. With the potential upcoming changes in the tax code suggested to move from seven tax brackets down to three, each family needs ...

Read More →

How Life Insurance Made Jim Harbaugh, Not Nick Saban, the Highest Paid Coach in the NCAA

Most that follow collegiate athletics are familiar with Nick Saban, arguably the most successful head coach in NCAA history. Heck, even if you don’t follow college sports, Saban has become a figure that is well known throughout the country for his Alabama teams and their ferocious defenses. But did you know that despite his track record on the field, he is not the highest paid coach in the NCAA? That distinction belongs to Jim Harbaugh, head coach of the Michigan Wolverines. Despite not having reached the pinnacle of the sport yet in terms of national championships, Michigan made Harbaugh the highest paid head man in the country in August of 2016. The avenue in which Harbaugh and the University accomplished this is not commonly seen in professional or amateur sports. After his first season with the Wolverines, Harbaugh and the leaders at Michigan entered into a Split-Dollar Loan Agreement under which the University agreed to make seven loan advances, of ...

Read More →

Why Are You Such A “Poor” Millionaire

As I continue to help more and more people approach the end zone of making work optional (a.k.a. – retirement) it continues to shed light on just how little one million dollars seems these days.    It was once believed that the ultimate pinnacle for wealth building was to have one million liquid dollars, but with the uncertainty in the bond markets, stock markets, and real estate markets, it has baby boomers about to retire shaking in their boots about being sacked before they score a touchdown. Many people hear this notion being thrown about called the 4% percent rule.   This rule was initially laid out by a financial planner William Bengen.   He had back tested a variety of withdrawal rates using various historical rates of return and found that 4% withdrawal with the absolute highest rate that held up over a period of 30 years. So, if you are a “millionaire” with $1,000,000 of starting capital at ‘work optional’, you ...

Read More →

The One Time 10% Tax You Should Know

Many Americans are wondering how the President Elect Trump tax plan will affect the type of mutual funds and ETF’s that they buy going into 2017.    One of the items bandied about in a serious way by President Elect Trump is to bring in trillions and trillions of dollars by repatriating money from companies’ accumulated offshore earnings through a one-time 10% tax to bring those dollars back to the United States.   This tax is a substantial reduction from the current 35%, which would mean a massive tax save to large corporations. The thought process behind this strategy is to get some 2.6 trillion dollars (source Joint Committee On Taxation) back into America.  If that money is returned into the hands of many large U.S. Multinational corporations, the philosophy is that jobs would follow quickly behind this influx of money and perhaps a throwback to the heydays of manufacturing. However, the capital influx could heavily influence where you invest your money ...

Read More →

One BIG 2017 Georgia 529 Plan Change For College

As the cost continues to rise for college education, the state of Georgia is stepping up for the residents of Georgia and offering a new increased tax deduction that can really help Georgia taxpayers. All Georgia single taxpayers may deduct up to $2,000 each year on behalf of any beneficiary regardless of their annual income. Beginning with returns filed in 2017, all Georgia joint taxpayers may now deduct up to $4,000 each year on behalf of any beneficiary regardless of their annual income. Please note that a transfer of funds from another state’s 529 plan is not eligible for the Georgia income tax deduction. Georgia tax forms refer to the Path2College 529 Plan as the “Georgia Higher Education Savings Plan” (GHESP); the Path2College 529 Plan is established by the GHESP. Contributions made during the tax year, or before the following year’s federal tax filing deadline are eligible for the deduction. State tax benefits offered in connection with the Path2College 529 ...

Read More →

VIDEO: How Millennials Can Retire With A Million Dollars

Nearly two-thirds (64%) of working millennials say they will never accumulate $1 million in savings over their lifetime, according to the Wells Fargo Millennial Study. Six in ten (59%) of millennials have started saving for retirement, whereas 41% have not. Of the millennials who are not saving for retirement, 64% say they are “not making enough money to save for retirement.” The Wells Fargo Millennial study was conducted by GfK and surveyed over 1,000 U.S. adults between the ages of 22 and 35, with an additional oversample of 500 Hispanic millennials for comparison purposes. (source:wellsfargo.com)…. Read Full Article at: http://bit.ly/2eXvvpM ...

Read More →

Be Careful About “Washing” Out Your Tax Losses

With more investors trading stocks as a hobby and the number of day traders who have decided to take over their own portfolios, it is incredibly important that you recognize one little nasty piece of the tax code that can hurt you called the wash rule. The wash rule was set up to more closely define how tax losses can be taken for the short term trading of the same securities.   If an individual decided to sell or trade a security they own at a loss and within 30 days of the sale buys a substantially identical stock or security (or an option) their tax losses may be disallowed.  Remember, the rule can also apply if your spouse buys a substantial amount of the security as well. In our current tax code, the wash sale can affect your personal finances with the following consequences. You will not be able to “realize” or claim, the loss on the sale The disallowed ...

Read More →

Where To Invest Under A Clinton Presidency

As I shared a few months ago, Americans aren’t quite sure what to make of this three ring circus we are calling a Presidential election.   With the two candidates in the throes of back and forth debates, the stock market has seen its share of nervous jitters going up and down almost in yo-yo like fashion.   What will happen with the markets if Hillary Clinton is elected President nobody knows for sure, but here are some potential smart money moves to be considering if Clinton becomes POTUS.   Will she borrow more money?  Will she change Obamacare to Hillarycare?  Will she build a wall? Will she bring jobs back to America? Infrastructure – While I cannot give you specific stocks, mutual funds, or exchange traded funds (you’ll have to call me or e-mail me for that info;), I will divulge that one of the best opportunities under a Clinton presidency will be US infrastructure. Consider this for a  . . If ...

Read More →

Is It Time To Fed Proof Your Portfolio

We are all witnessing the antics of the Presidential election that we see and hear in the media every day.   The Fed recently chose not to raise rates again recently and we don’t know if they will do it in September, December, or not at all this year.   However, when rates rise you will want to be prepared on what to do with your portfolio, so here are my tips on money moves to consider. Consider Locking In Rates While They Are Low If you have benefited from having a low adjustable rate mortgage over the past five or six years, you might want to consider locking into a 15 year or 30 year fixed rate mortgage while rates are low. This would prevent you potentially getting hurt if you plan to live in your property for a long period of time and you expect the Fed to raise rates. Also, you might want to make a long term real ...

Read More →

How Millennials Can Retire With A Million Dollars

Nearly two-thirds (64%) of working millennials say they will never accumulate $1 million in savings over their lifetime, according to the Wells Fargo Millennial Study. Six in ten (59%) of millennials have started saving for retirement, whereas 41% have not. Of the millennials who are not saving for retirement, 64% say they are “not making enough money to save for retirement.” The Wells Fargo Millennial study was conducted by GfK and surveyed over 1,000 U.S. adults between the ages of 22 and 35, with an additional oversample of 500 Hispanic millennials for comparison purposes. (source:wellsfargo.com). We originally started oXYGen as an XY company, so it is only fitting that we help this 64% with five key money tips on how to retire with a million dollars. Be An Avid Bill Shopper First and foremost, make sure you shop your student debt which will likely be the number one initial inhibitor to long term wealth building. Make sure first, that if ...

Read More →

Do You Need An LLC For Your Rental Property?

With interest rates continuing to hover around record low rates, Gen X’ers and Baby Boomers are swallowing up investment properties all around the United States.  Even though last week an article came out from the N.Y. Times that home ownership is down to a record low of 62.9% (which is the lowest in fifty years), the developments being built around your neighborhoods seem to continue to sell at a record rate. One of the main questions we get all the time from people who buy investment real estate or rental properties centers around whether to hold the property individually, hold it in an LLC, and whether or not you need a separate company if you plan to manage these properties on your own. Let’s go through an example of why you might want to have an LLC.  You have a tenant who has rented your property up on the lake this summer.   They decide to bring a few friends out ...

Read More →

Ted Jenkin Talks Investments

– Ted Jenkin | Atlanta Money Guy Topic: Ted Jenkin from Oxygen Financial stops by to try and help Bailey with his “oil in Tennessee” investment! Taped 8/9/16 Listen every Tuesday morning at 8:00 a.m. on ROCK 100.5 | Atlanta’s Rock Station to “Your Smart Money Moves” with The Rock 100.5 Morning Show and oXYGen Financial. Ted Jenkin, CFP® and Kile Lewis, CRPC® are the founders of oXYGen Financial, and our chief financial officers. All your money questions answered Breathe Easier with oXYGen Financial: http://www.oxygenfinancial.net ...

Read More →

Talking About Lottery Winnings

– Ted Jenkin | Atlanta Money Guy Topic: Talking About Lottery Winnings Taped 7/05/16 Listen every Tuesday morning at 8:00 a.m. on ROCK 100.5 | Atlanta’s Rock Station to “Your Smart Money Moves” with The Rock 100.5 Morning Show and oXYGen Financial. Ted Jenkin, CFP® and Kile Lewis, CRPC® are the founders of oXYGen Financial, and our chief financial officers. All your money questions answered Breathe easier at http://oXYGenFinancial.net ...

Read More →

Pay Off The Mortgage Or Invest The Money

One of the most difficult questions that I get from both younger and older clients is whether or not it is a good idea to pay off their mortgage or invest the money?  With interest rates continuing to hover around all-time lows, many people are still in the process of refinancing their existing homes or buying a new one.   If your rate is in the 3% to 4% range, you may be wondering if you should take your excess monthly discretionary income to pay down your home note faster or would it be a better idea to take that cash and invest it for the long term.    This decision has both financial and emotional ramifications, so let’s review the pros and cons of paying off your mortgage. The first part of this analysis is the black and white calculation on whether your money can work harder for you than the interest rate you are paying on your debt.   Let’s say, ...

Read More →

Why HBO Should Teach John Oliver About Money

Last week on HBO’s Last Week Tonight with John Oliver, John Oliver thought he would get cute and tell you why you are getting screwed by Financial Advisors. http://bit.ly/25Ytdwj I have attached the article if you want to see what sage advice he attempted to give you. It’s ironic as I just completed 25 years of doing this as a profession and continue to witness the misinformation and disinformation that goes on within the financial services industry. Every person with a laptop and a blog can tell you about the right way to manage their money. Talk show hosts are more than interviewers today. They see their shows as a podium to help influence political, social and financial change across our country. Oliver’s comedic commentary has been credited with helping influence US legislation, regulations, court rulings and other aspects of US culture, which has been dubbed “The John Oliver Effect.” This came from the show’s fifth episode, which focused on ...

Read More →

VIDEO: Where To Invest In A Trump Presidency?

Americans aren’t quite sure what to make of this three ring circus we are calling a Presidential election. With the nomination fairly certain to be Donald Trump on the Republican side, there has been major discussion about what a Trump President might look like for the future of our economy. Will he borrow more money? Will he balance the budget? Will he build a wall? Will he bring jobs back to America? These are amongst the many issues that have been speculated about on the media outlets across the country. Here are my smart money moves on where to invest under a Trump regime… Read Full Article at: https://shar.es/1JMhPM ...

Read More →

Where To Invest Under A Trump Presidency

Americans aren’t quite sure what to make of this three ring circus we are calling a Presidential election.   With the nomination fairly certain to be Donald Trump on the Republican side, there has been major discussion about what a Trump President might look like for the future of our economy.   Will he borrow more money?  Will he balance the budget?  Will he build a wall? Will he bring jobs back to America?   These are amongst the many issues that have been speculated about on the media outlets across the country.  Here are my smart money moves on where to invest under a Trump regime. Infrastructure- While I cannot give you specific stocks, mutual funds, or exchange traded funds (you’ll have to call me or e-mail me for that info;), I will divulge that this will be one of the best opportunities under a Trump presidency.   Consider this for a  moment. . . If you have a parent or grandparent that ...

Read More →

Is It Time For A “Back Door” Roth IRA?

There are many individuals and families who make a high income and believe they cannot do a Roth IRA.   However, there is a part of your financial house you may not have realized that existed called the “Back Door” Roth IRA.   So, why do so many people miss this great opportunity?  According to the Investment Company Institute, only 18.6 million U.S. households (about 15.7%) owned Roth IRAs in 2011.  Do that few Americans want tax-free income in retirement? Who can generally contribute to a Roth IRA? There are three ways to fund a Roth IRA–you can contribute directly, you can convert all or part of a traditional IRA to a Roth IRA, or you can roll funds over from an eligible employer retirement plan. In general, you can contribute up to $5,500 to an IRA (traditional, Roth, or a combination of both) in 2016 ($6,500 if you’ll be age 50 or older by December 31).  However, your ability to make ...

Read More →

Should You Invest In That Collectible Car?

Recently, the Wall Street Journal ran a tremendously powerful article http://snip.ly/hm9s0 about how bonds have outperformed stocks since 12/31/1999.   Over long periods of time, historically stocks are more volatile than bonds but also outperform bonds over the long term.  The question is will this trend continue this century?  Since 2000, investors have turned to adding an additional asset class to the cash, stock, and bond mix by putting more money into ‘alternative investments’.  These include investments such as REIT’s, commodities, and precious metals. Increasingly I am getting asked questions about other types of investments.  One couple was debating the question about whether it would be better to put $75,000 more into improving their home for long term equity value or would it be better to put $75,000 toward repairing and restoring a 1970 Chevelle that they owned.   Without delving into the question of what would get more use, the home or the car, my immediate challenge was around what would provide ...

Read More →

Three Investment Lessons To Teach Your Children

While many families across America are struggling to figure out how to save for retirement and handle their monthly budgets, it becomes more and more important to teach our children important investing lessons for their financial future.  21% of Americans think the best way to save for retirement is winning the lottery (http://www.retirementplanblog.com/defined-benefit-pension-plans/gambling-on-retirement/). That’s no surprise because everyone pretty much scrounged up money to buy a recent Powerball ticket.  Here are three different lessons you can teach your children about investing to make money. Win A Guinness Book Of World Records- This lesson is actually about teaching your kids the very valuable concept of investing in themselves.  We know that setting goals and achieving them have a very high correlation to financial success.  What about challenging your child to win a Guinness Record?  How would that be for a confidence and resume builder?  One of our very good friends Mike and Courtney Hoffman recently had their daughter Jace Hoffman win ...

Read More →

You Should Get To Know The Self Directed Brokerage 401(k)

You would think that because I’ve been doing financial planning for 25 years that I would be a flat out 100% advocate for 401(k) plans.    With the ability today to put away money on a pre-tax basis in your 401(k) or now the use of a Roth 401(k) there are many different ways to save for your future.    Many employers even offer a ‘match’ of some of the funds that you put away into your plan as an incentive and some companies even give a year end profit sharing contribution if the company has done well.    The 401(k) has now become the Gibraltar Rock for most people in their 30’s and 40’s as the main driving force for their future retirement.    In most 401(k) plans, the problem is that you are generally limited to choices of five or six target date/retirement date funds and with limited index fund choices you could be left in an absolute mess in retirement if ...

Read More →

Are Comic Books Better Than The Stock Market

Recently, the Wall Street Journal ran a tremendously powerful article (http://on.wsj.com/1PHs0Q8) about how bonds have outperformed stocks since 12/31/1999.   Over long periods of time, historically stocks are more volatile than bonds but also stocks outperform bonds over the long term.  The question is will this trend continue this century?  Since 2000, investors have turned to adding an additional asset class to the cash, stock, and bond mix by putting more money into ‘alternative investments’.  These include investments such as REIT’s, commodities, and precious metals.  However, one important alternative investment class that investors may want to pay closer attention is in the arena of collectibles, which could provide an investor with a true alternative to over the counter type investments.  Here are three to keep on your radar. Comic Books-  As Marvel has gained popularity in the theaters, so have the value of comic books.   It’s not just the original Spiderman, Superman, or Batman comic books that command large dollars.   Consider ...

Read More →

My Roth IRA turned Five

Why is age 5 so important for your Roth IRA.  Well, there is a little discussed rule around Roth IRAs.  We know that they grow tax free.  We know that we can take contributions out at any time without penalty.  We also, know that at age 59 ½ we can start taking from either our IRA or our Roth accounts. But what most people miss is the 5 year clock on Roths.  The Roth rules say that to take distributions tax-free and penalty-free, your Roth account has to have been open for at least 5 years.  That means when you turn 59 ½ your account also has to be at least 5 years old.  I’ve been asked by clients if the clock resets each time they make a contribution; or does each contribution have its own 5 year clock.  The answer is no.  The clock starts when the account is first opened. In 99% of cases, the clock is a ...

Read More →

Why Asset Allocation May Be A Sinking Ship

When I started in the business in 1991, one of the biggest fundamental teachings was the concept of asset allocation.  Asset allocation is all about the notion that different assets classes offer returns that are not perfectly correlated, hence diversification reduces the overall risk in terms of the variability of returns for a given level of expected return. (www.wikipedia.com) Today’s world of asset allocation uses these fancy pie charts that show clients cash, corporate bonds, international bonds, government bonds, large cap stock, mid cap stock, small cap stock, international stock, emerging markets, commodities, real estate, and many more different types of asset classes.   The idea of all of these asset classes are supposed to act and look a lot like magnets.  By having a balance of these asset classes, while some areas have worse years other categories will have better years, minimizing the overall risk. The world’s global economy is so intertwined that many asset classes are more closely tied ...

Read More →

Why Buying An Expensive House Is A Terrible Idea Now

The recent hike by the Fed for interest rates and their 2016 guidance will certainly have a big impact on how the bond and stock markets perform in 2016.   While housing has been red hot over the past six years, here are three reasons why buying an expensive house is a terrible idea now as interest rates climb over the next twelve to twenty four months. INTEREST RATE AND HOME PRICES- Remember, that as interest rates rise it means that new mortgage payment will cost Americans more money on a monthly basis for the same amount of mortgage.  Just as prices have risen during this declining low interest rate environment, as interest rates rise you will see the higher end of the real estate market decline.  Where else could it go if interest rates go up by 1% or 2%?  In addition, you will see the assessments for your local and county taxes go up as it pertains to your ...

Read More →

Can You Loan Money Like The Big Banks Do?

The one lesson you should have learned in 2015, but most investors really haven’t paid attention to is the proliferation of alternative investments that have nothing to do with traditional stocks and bonds.   Since the collapse of the banks, real estate, and stock market in 2008, most investors have paid their primary attention to the stock market and real estate rebound while also waiting for the Fed to raise interest rates.   Has anybody paid attention to the growth of alternative opportunities that can invest in right on the internet? The Peer To Peer Microloan Market- While investors have been struggling to get decent returns in the bond market or find good investment grade yielding bonds, the peer to peer microloan market has grown by leaps and bounds.  Companies such as www.lendingclub.com and www.propser.com offer the opportunity for you to manage your own portfolio of loans between you and individuals typically looking to borrow between 0 to $30,000.  Will you be ...

Read More →

Important 2016 Rules For IRA’s and 401(k)’s

As 2016 rapidly approaches us, it’s important that you know the rules about changes upcoming for 401(k)’s and IRA’s so you get off to a great start in 2016.    People often overlook funding an IRA because they don’t how the qualifications work within their family.  Whether you are a few years from retirement or you are just beginning your savings plan, keep this handy article by your side so you make the most of your retirement contributions for 2016. How Much Can I Contribute? The good news is that 2016 brings a calendar year where nothing really changes in terms of your overall maximum contributions for 401(k)’s and IRA’s.   For 401(k)/403(b) investors, if you are under 50 years old you can put away up to $18,000, and those that turn the age of 50 in 2016 or are older than 50 can make a ‘catch up’ contribution of $6,000 (the maximum being $24,000 overall).  For IRA/Roth IRA investors, if you ...

Read More →

Why People Still Don’t Know Their 401(k) Costs

On February 3, 2012, the Department of Labor published final regulations on fee disclosure for retirement plans. The final regulations were supposedly going to finalize the process where the DOL began to expand disclosure of compensation paid to service providers of ERISA-subject plans. In short, the idea of this regulation was to offer the consumer better transparency of their 401(k) by having much easier fee disclosure to read and understand. The regulations raised important questions for plan sponsors and service providers to implement new compliance systems within the regulation. As fiduciaries, plan sponsors are responsible for making the decisions related to selecting an appropriate fee structure.  These fees can include asset fees charged by the financial institution, fund expenses within the mutual funds themselves, and broker/financial advisor compensation that may exist within the plan.   This doesn’t involve the actual cost to the company of running the plan for recordkeeping, plan participant fees, etc.  It’s up to each and every company ...

Read More →

Can You Buy A Rental Property In Your IRA?

The U.S. homeownership rate, which was over 69 percent at the height of the housing bubble, had fallen by the beginning of 2015 all the way to 63.7 percent. That means over the last 10 years that the U.S. has lost all of the homeownership gains of the previous 20 years. It means that the 2010 decade is on pace to be the strongest decade for renter growth in history (source: www.chicagotribune.com). That steep drop has put the national homeownership rate back where it last was in 1993. Effectively, 1.7 million fewer households owned their homes by 2015 than they did at the bubble’s peak.   Many people are now thinking about buying a rental property, but may be short the cash to do it.  One of the questions that we are often asked is “Can I use my IRA to buy a rental property?” The short answer is yes, but let me first give a little ‘buyer beware’ that Real ...

Read More →

Are Robo Advisors On A Level Playing Field?

Over the past twelve to eighteen months, easily one of the most featured story lines in the financial services business is the proliferation of ‘robo-advisor’ as a lower cost better way to have your money managed.   Leaders in the industry such as Wealthfront, Betterment, and Personal Capital have been the frontrunners with a slew of new robo advisors literally popping up by the month. Many investors have started to compare the ‘robo-advisor’ to their current financial advisor, but is it a huge misconception that you are really comparing apples to apples?  Here are four important considerations you should have when deciding to go one route or another. Do you want money management and advice-  Being an advisor for almost 25 years, clients often blur the line between paying for money management and paying for advice and planning.  Admittedly, it is a very confusing line.   If your current financial advisor is charging you a fee for 1%, it is possible that ...

Read More →

What Is The Best College To Go To In The Future?

Overview I have been asking for years in my ‘your smart money moves’ column if we could really put a monetary value on a college education.  The great debate over public school vs. private school on the high school level will continue because there isn’t a ton of empirical data, but thanks to our friends at PayScale (www.payscale.com), there is beginning to be a lot more evidence around what school really delivers a bang for your buck.   We all know that past performance cannot be a guarantee for the future, but there is a set of trending data that makes it interesting to see what schools in the future will deliver you return on your investment if you choose to take out student debt or your parent’s fork over the cash for a college education. PayScale provides a forecast for the financial return on investment (College ROI) for a bachelor’s degree at public and private colleges through the year 2025. ...

Read More →

How To Save A Down Payment For Your 1st Home

You just finished watching the latest installment of House Hunters on HGTV and begin to think to yourself, why not me?   Purchasing your first home is not only the “American Dream”, for many young Americans it signifies a real transition into financial adulthood and responsibility, by taking on potentially the largest debt you will ever carry in your entire life.  Unfortunately, many new homebuyers don’t save or strategize effectively when they buy their first home and sometimes make an impulse purchase that costs them dearly in their family finances.  Here are my six tips on how to save effectively for the purchase of a first home. Use The Loan Amortization Tool In Microsoft Excel That’s weird for a first tip Ted. No, not at all.  This FREE tool in your Microsoft excel toolkit will allow you to plug in different loan amounts, interest rates, and loan periods to see your principal and interest statements.   What you want to do with ...

Read More →

The Three P’s To Picking A Fund Manager

For those that have sat in a conference room building out a new strategy for your company, you know that often the team leader will discuss the three P’s: Purpose, Process, and Payoff. With well over 10,000 mutual funds in the marketplace and now a slew of actively managed exchange traded funds, picking a mutual fund manager may end up being one of the more challenging tasks for an investor in their 401(k) plan or those with a large portfolio. Is it best to pick a fund manager that is a lone ranger? Is it best to pick a fund manager that selects funds through a team approach? I have often asked investors, which is most important to win the horse race? The horse or the jockey? To be successful as an investor, I would suggest you filter them out by using the purpose, process, and payoff system. Purpose: Do you know exactly what outcome you are looking for with ...

Read More →

4 Lies Investors Will Tell Themselves Again

Do any of these stories ring true when you talk about how your portfolio is doing?   Here are four tall tales that I keep hearing year over year when people first come into our offices.   You are not alone, no one wants to admit that things haven’t gone as well as they expected.  Or perhaps they just don’t know at all?  Which story have you told yourself in the past? “I Have Killed It With My Stock Picks” I have never heard somebody come to a party ready to talk about their mutual fund or life insurance policy.  But stock picks?  Oh yes, this is a party favorite.   People LOVE to brag about the stock they bought that tripled or quadrupled in value whether it was a technology stock or some penny stock you have never heard of before in your life.   What they won’t tell you about is all of their losers because they don’t remember them.   How many ...

Read More →

What Does Steph Curry’s Mouthguard Teach Us About Investing?

It’s playoff basketball time and this past week we saw all kinds of buzzer beaters from Derrick Rose and Paul Pierce in some really exciting games. The NBA loves statistics, and I love looking at those statistics and thinking about what it may mean when it comes to your money. So, how the heck does the mouthguard that newly crowned MVP Stephen Curry wears and investing wind up in the same category? This is where the ‘your smart money moves’ column takes everyday life and turns it into valuable money making lessons. The Wall Street Journal (source wsj.com) did a recent study looking at all of Steph Curry’s 337 free throws taking during the course of the NBA Season. With the Mouthguard out, Curry shot 198 for 214 from the free throw line which is a 92.5% shooting percentage. With the Mouthguard in, Curry shot 110 for 123 which is an 89.4% shooting percentage. The real difference between these two ...

Read More →

Why Didn’t You Beat The Stock Market?

The S&P 500 achieved positive returns for the prior past six years (2009-2014) and was slightly up as we entered 2015 before the downturn over the recent quarters. Often, when investors hear on the television that the markets are up they become obsessed on whether their portfolio is beating ‘the market’. This begs the question of which market an investor is talking about beating because there are many types of markets including international, real estate, gold, and bonds, as an example. It may surprise you when I tell you that even though large company stocks have done well in this time frame (2009-2014), not once did large company stocks top the chart. In 2010 and 2014, real estate investment trusts were at the top. In 2013, small company stocks led the way. In 2012 and 2009, Emerging Markets were the top overall category and 2011 treasury inflation protected securities led the way. Although, it probably feels as if every time ...

Read More →

Mandate Guaranteed Annuities In 401(k) Plans

Annuities often get a bad rep in the public market place. You’ll read they have high fees. You’ll read they have high commission. You’ll read that financial advisor salespeople love to sell them. However, if you talk to some of the happiest people in retirement like my own mother, one of the main financial reasons she is happy is that a fixed pension paycheck comes to her each and every month for the rest of her life. She doesn’t worry about the stock market, the bond market, or the real estate market. The reason is because she gets an annuity for the rest of her life. Consider for a moment that pensions have all but disappeared from major Fortune 500 corporations and most people today are suspect about how much they will get from Social Security. The burden of saving for retirement is squarely on the shoulders of you, the individual. While most 401(k)’s offer 10 to 20 choices on ...

Read More →

Are I Bonds A Better Idea Than A 1 Year CD?

Most investors are fully aware that the rates earned on cash today are less than a dismal amount.  By the time you factor in yearly inflation, you are basically safely going backwards with your savings and money market accounts.  If you are considering looking for a better rate of return on your cash, one interest Government program that is far too often overlooks is the use if I-Bonds as a cash reserve strategy. Essentially, an I-Bond has two separate forms of interest rate within the bond.  One part is a fixed interest rate of return which remains constant throughout the bond, and a variable rate based upon changes in the Consumer Price Index (CPI) that are announced each May and November.  Currently, the overall interest rate on I-Bonds are 1.48% and they are exempt from state or local tax which can be a benefit depending on what state you live in at this time. The good news about I-Bonds is ...

Read More →

Do You Know About The Academic Common Market?

College education is clearly one of the largest financial challenges amongst families in their financial plan today. Parents unfortunately often don’t devise a quality game plan or research all of their options until the 11th hour when their first child goes to college. In fact, many parents inaccurately fill out their FAFSA forms because they don’t research the questions and the actual underlying answers that FAFSA is actually asking for when you fill out the forms. More and more, parents are encouraging children to attend an in state school in an effort to make college costs reasonable. However, one way parents can potentially cut their college tuition costs and have their children attend out of state school is to research the academic common market. Consider this for a moment. The states surrounding you have a similar issue as the state you live in now. They are getting more and more in state applications, and that creates considerable risk to have ...

Read More →

The One Secret Your Benefits Department Never Told You About Your 401(k)

What if we were to tell you that you could get access to part of your 401(k) today and NOT pay a single penalty to move your funds into an IRA account?  You would think that we were kidding, right?  Unfortunately, most Time Warner employees (CNN, Cartoon Network, Turner, TBS, TNT, etc.) are unaware of a little known rule in your summary plan description of your 401(k) called an “in-service distribution”. Time Warner permits an in-service distribution which would allow you to withdrawal some of your money from the 401k and roll it over to an IRA while you are still employed with the company!  YES, this is 100% TRUE.  Call Fidelity yourself and find out!  By rolling over the assets to an IRA, you can maintain control of how you manage your money. Let’s face it- – some 401k’s are deficient with high fees, limited investment fund choices, and your ability to customize an investment process within your 401k ...

Read More →

Rent or Buy, Which is Better?

In my 16 years as a financial planner, I have been asked this question many times. For decades our society has told us that renting is just throwing your money away and that buying a house is a good investment. Even the government tries to influence our behavior with offering a tax deduction on the mortgage interest. We have to start realizing that your house is not an investment. Investments should be able to feed you income; and as I always say ‘You can’t eat your house’. So which is it, Rent or Buy? Let’s compare some facts. First with renting you don’t have maintenance costs, mortgage interest, property taxes and renter’s insurance is dramatically less expensive than homeowner’s insurance. If you average $1000/month in rent over 30 years, that’s a total of $360,000. Throw in another $15/mo for renter’s insurance and the total spent to rent for 30 years is $365,400. Now if you were to buy, say a ...

Read More →

The Rising Cost Of A College Application

We see so much in the news today about the rising cost of college education and the crushing statistics around student debt.   These sobering figures are giving much cause for consternation around whether the cost of an elite college education is really worth the price of admission.  Just the other day, I shared with a young couple that to put their newborn through a fully funded elite private school education would require them to save almost $1,000 per month!   Although there is much debate about college education, hardly at all does anyone discuss the costs of just applying to get to that college education.   With application fees being another boon for colleges, here are some smart money moves figures you need to plan for within your family budget as your child prepares for the application process. Application Fees– With a school like Harvard that received over 35,000 applications @ $75 a pop, it represented over 2 million in application fees ...

Read More →

Have You Done The Research?

Giving to a good cause can evoke some of the most wonderful emotions we feel. The problem is that many individuals give without always doing the proper research on the charities or what the charities do with the donated money. Most of you can remember the Seinfeld episodes where George gets people to donate lots of money to the human fund without anybody asking any real questions about the charity. When they did, George gave them a few concise answers and people just accepted it as fact. Nowadays, friends ask us all the time through social media to donate money to various causes by clicking a link and filling out a form. Companies ask us to round up while shopping on line or make a $1 donation at the cash register while checking out our groceries. If you have budgeted aside a percentage of your income or a dollar amount that you can afford to give away, I recommend that ...

Read More →

Five Smart Money Moves To Make In 2015

Can anyone remember Y2K just like me and thinking I can’t believe it is the year 2000?  Well, before the blink of an eye we are now at 2015 and another new year to take stock of where you are financially and what moves you should make this year to improve your bottom line.   Since there are so many financial items to watch as the CEO of your family finances, here are my five items to put on your financial list as moves to consider in 2015. Shop Your Bills– January is one of the best months to get on the phone and shop each and every one of your bills.  One of the quickest ways to free up more disposable income to pay off debt or increase your savings is to gain back more cash flow in your family profit and loss statement.  Remember, companies like to know that they have booked their recurring business for the year in ...

Read More →

How Do You Practice For Retirement?

Almost every week in my line of business, I hear someone talking about ‘retirement’.    They have hopes, dreams, and ideas about the day that they just don’t have to work anymore.   I firmly believe that anything you do well in life is going to take practice.   That’s right Allen Iverson, I said practice.   But how in the world will you practice for retirement?  Here are three smart money moves ideas to help you think about getting ready for the day you say ‘no mas’ to letting the alarm clock get you up for work. Practice Your Money Habits- Having built well over a 1,000 budgets for families over the years, there may be no tougher budget than planning the one for retirement.   You’ll never really know how much you need in terms of withdrawals from your portfolio until you actually spend three to six months trying to live on that budget.  As one would imagine, this is difficult if the ...

Read More →

Don’t Attempt To Time The Market

As 2014 enters into its final month for all major indices, this should be a good time of the year to reflect on the most important major lesson about investing. The lesson is to be certain that you have the appropriate time frame to take the risk associated with investing in a particular asset class. Time and time again, most average investors get caught up in trying to figure out the best time to exit the markets or enter the markets. This is challenging enough for the experts who are engulfed in this data every hour of every working day let alone going at it as an individual investor. Check out these predictions from January 2014 from over 30 of the major chief investment strategists from various leading firms http://cnnmon.ie/1CvoVBd. On average, the peer group had the S&P 500 growing 6% and the year to date return of the S & P is almost double that number. They also had ...

Read More →

Til Debt Do You Part

My team is extremely fortunate to get to work with so many successful Gen X’ers. Many of them have done phenomenally well in their careers, and then begin considering marriage at a much later stage in life toward their late 30’s to early 40’s. This often brings up the question when we do financial planning with them about whether or not it is a good idea to get a prenuptial agreement. There are pros and cons to getting this type of agreement, but the one important item many couples do not remember to put in these agreements when they execute them is what will happen with the DEBT. Most couples remember to talk about the bank accounts, the retirement accounts, the family inheritances, the real estate, and the closely held businesses. However, most people assume that all prenuptial agreements are only dealing with people who have significant wealth. What happens when a couple gets married and you still have outstanding ...

Read More →

Don’t Invest In The Dreams of Someone Else

As we age in our financial lives, each of us has had that pit in our stomach feeling of a major financial mistake we wish we had never made. For some people, there will be no recovery from these mistakes while others still have the opportunity to make up for lost time. Although I’ve been fortunate to have very few blemishes in my own personal financial life, the financial move I would welcome doing over again would be to invest in a friends dream with the hope of getting some return on my money. Unless you are a really savvy and experienced investor, I am not a big fan of investing money in a business of a friend unless you are going to be an owner operator yourself. The majority of the time it will take you three times as long to get your money back if you are lucky enough to get it back at all. Almost 15 years ...

Read More →

Do You Understand The Term Diversification?

Diversification is a term that is often discussed, but is still widely misunderstood amongst investors today. When the financial markets collapsed in 2008, many investors were left wondering if the opportunities to truly diversify were fewer than they once believed. Diversification: Is NOT having your money at four different banks. Many investors still do not understand how FDIC insurance works. Diversification: Is NOT having your money at four separate financial institutions. Many wealthy investors often believe they spread their diversifications risk by hiring money managers at different brokerage houses. This is hardly ever the case. Diversification: Is NOT leaving your 401(k)’s at three old employers. It’s extremely scary to see how many people buy the same mutual funds through their 401(k) at different employers and never really look at their investment strategy as a whole. Diversification: Is NOT necessarily done by buying different mutual funds or exchange traded funds from the same fund family. Diversification: Is NOT subtracting your age ...

Read More →

Does Jim Cramer Run Your Portfolio?

About a week ago, Marketwatch (www.marketwatch.com) ran story called, “The Most Dangerous Stock Market Since 2008.”   In the past six years of bringing you my Your Smart Money Moves Column, I have shared with you how media can influence what happens in the markets in a very significant way.  Without even reading a lick of this column, would it be any stretch of the imagination to say that if the market hits all time highs that the potential danger gets higher and higher for some type of market pullback? If you really want to see something funny, spend eight minutes today watching this 2009 video of Jon Stewart’s The Daily Show.  This particular program poked fun almost five years ago at Jim Cramer, Rick Santelli, and other financial pundits for telling people to continue to buy stocks in a raging bull market before the bottom fell out (http://bit.ly/1aZk5rZ).  The video is particularly amusing with one of Stewart’s great quotes “I ...

Read More →

Down Payment Vs Invest The Difference

While 30-year mortgage rates are not at the lows of 3% we saw in 2012, mid to low 4% rate are still really good. It is very tempting to make a small down payment and use the difference in an investment with a higher potential for return. If you only make a 5% down payment instead of a 20%, you will pay thousands in extra interest and PMI insurance. Plus, beating your 4% cost of funds is no slam dunk. Making a larger down payment will ensure that you your return on money is equal to your mortgage rate and will give you a small monthly mortgage payment, leaving you free to invest the extra cash or hang on to it for everyday expenses. Making additional principal payments on your mortgage can save you thousands in interest and pay off that loan quicker. It’s hard to put a return on investment by becoming mortgage free, but taking the weight off ...

Read More →

Don’t Forget To Protect The Golden Goose

I have delivered insurance checks in my career and nobody has ever told me they have too much life insurance after a loved one dies. It’s really ironic because there are many media pundits who beat up on having unnecessary life insurance, but those writers don’t have to pick up the pieces after a major breadwinner dies in a family. Recent studies still say that the odds of dying are 1 out of 1. LOL. Even though I think that most families are woefully underinsured when it comes to life insurance, the greatest gap I see amongst Generation X and Generation Y is an apathetic amount of disability insurance. Most people who work for companies believe that the amount of disability insurance they get through work will be adequate to cover their situation should they sustain a long term disability. The stark reality is that most Gen X’ers an Gen Y’ers don’t even read the benefits manual to understand the ...

Read More →

Times Are Still Good For Buyers

Much like the stock market, the real estate market for most parts of the country have enjoyed the past five years. With a low interest rate environment, existing inventory in many metropolitan markets have been getting snapped up and you have seen new homebuilding occurring in cities and suburbs alike. Although many people speculated interest rates were going to shoot up over the past several years, I personally believe that the cool off in the real estate market is excellent for homebuyers. If prices are starting to flatten out and interest rates still remain incredibly low, being able to borrow capital at a 4% interest for 30 years makes home ownership very attractive. You still need to remember to only buy what you can afford in your family budget and don’t overextend yourself as home ownership usually comes with added bills and yearly maintenance. Just like the stock market, it is hard to have a crystal ball to say when ...

Read More →

Think Wisely About Your Trustee

It’s never fun to think about gloom and doom. However, if you have been successful in building up an asset base or you carry a lot of life insurance, you may be considering setting up a trust fund for your children if something happens to you. There are many potholes that a family can stumble into when establishing a trust, but here are three mistakes parents often make. First, parents don’t often think through who they want as the trustee of trust for their kids. As complicated as it is to select a custodian, parents should consider whether they want a single trustee or a co-trustee to have some check and balance system for the trust. It is crucial to make sure you’ll have the right people in charge of the funds when you are no longer in the picture. Second, parents need to be clear about the goals of the trust. Specifically, most parents don’t think through when and ...

Read More →

Do You Need Peyton Manning Insurance?

With the first official NFL Football game underneath our belts, the start of a new NFL season is now going to be the center of our TV rooms every Sunday.  For those of you who were lucky enough to draft Marshawn Lynch on your fantasy football team, your team had a head start going into opening weekend. What started out as something for people to just have fun following NFL Football has now turned into something far more serious than ever expected.  In fact, some people are questioning whether the new NFL rules enacted this year have something to do with the big business of fantasy football, in which the grand prize is $100,000 or more in some leagues.  The big question is ‘do you need fantasy sports insurance’? As people who deal with all types of insurance in our business, it’s pretty amazing to think that there could be such a thing as fantasy sports insurance (FSI).  However, in ...

Read More →

Get Educated On One Word: RISK

You are a big spender and she’s a mattress stuffer. You like the idea of house flipping and she prefers a money market. You’ll go for the IPO and she’ll go for the blue chip stock that has been around forever. Now that you are newly married or living together, how can you ever see eye to eye on the best way to manage the family investments? Here are three quick young couple tips to deal with opposing investment styles. Get educated on the meaning of the word RISK. It’s likely nobody ever explained all the types of risk associated with investing to a young couple. Did the money mattress person realize they could be safely going backwards each year with the risk of inflation? Did the IPO investor realize the risk of losing all of their money with the latest social media stock? The young couples of today need to get informed on what risk really means. Get educated ...

Read More →

Do Ivy Leaguers Get Better Rates For Loans

As most of know, student debt is becoming the new silent killer for generation Y.   People in their 20’s and 30’s may need to find different alternatives on how to pay off their student debt or even how to refinance the debt.   Programs seem to be popping up all over the internet and I recently had the chance to interview Mike Cagney, CEO and Chairman of SoFi which is a company who can help with figuring out your student debt and more. If you need to refinance your student loans, SoFI (www.sofi.com) has some really cool programs: Fixed rates can start as low as 3.63% and variable rates even lower.  SoFi has its own specific underwriting process that allows them to be more selective with the types of students it loans to currently.   Think about it.  Better school, consistent job, etc. might mean you have a much better ability to pay back the lender. Unemployment protection is an excellent feature ...

Read More →

Use The KISS Principle

Today it is more complicated than ever for the average investor to really understand how to pick a mutual fund.   Most novices may choose a fund if it has a 4-star or 5-star ranking.   Or they decide to pick a fund because they did a Google search for best returns and then select one from the top of list.  The truth is, most investors today would be lucky if they could name one or two actual positions that their mutual fund owns if they were asked.  In my opinion fund companies could become more friendly if they used the Keep It Simple Stupid principle. First, mutual fund companies should provide consumers some sort of simple x-ray software so when they choose to buy multiple funds from a fund company, an investor can at least have some idea about how much the different funds overlap.  Far too often, I see consumers who own three or four different mutual funds only to ...

Read More →

Listen To What The Baby Has To Say

I am a complete marketing junkie, so I have to give props to financial companies that take risks to launch edgy marketing campaigns.  Historically, investment companies are boring advertisers showing couples taking a bicycle ride, smelling the roses on their front porch, or some actor looking all serious on camera about the ‘serious’ investment company.   I was a bit melancholy this year to see the last installments of the E*Trade baby commercials which completed a tremendous six year run of ad spots. For a marketing campaign to be successful, it has to leave a mark etched in our mind that will last for many years to come.  Think about slogans like Nike’s Just Do It or Wendy’s Where’s The Beef that you can remember just like it was yesterday.   When the E*Trade baby aired during the Super Bowl in 2008, the commercial made us all laugh while at the same time beginning the drip the ideas of what we could ...

Read More →

Selling Jewelry to Help Pay for College

Over the years I have met people who have sold their jewelry for hundreds of different reasons from saving the rain forests and donating to charities, to paying medical bills and forming a new business. We have helped clients pay for weddings and divorces, debt relief, retirement and to help family members in financial need. I can relate to all of these life events, but as a father, the one I relate to most easily is paying for my children’s education. We have helped many graduates pay off the debt that they have acquired while getting an education. We have also helped many parents and grandparents contribute to 529 plans – a tax-advantaged savings plan designed to help save for future college costs. Jewelry proceeds that are invested early have the time to grow tax free within a 529 plan and jewelry sold today, to pay down debt that could’ve accrued over the years, presents a much better financial footing ...

Read More →

Getting Investment Advice Online: Be Clear About Your Expectations

In order for individual investors to get the most out of their online relationship, they should avoid the colossal mistake most individuals make. The biggest mistake is simply not being clear about expectations. There are many really high quality online investment advisors and overall financial planning offerings on the internet. Some of the online investment advice companies will offer financial planning or other services in addition to money management. Some of them will offer you no customization whatsoever of your portfolio. While others, will allow for some degree of customization based upon your overall situation. However, if you aren’t really clear about what you want out of the relationship, you may become quickly disappointed in what the online provider is going to do for your portfolio. Just like any face to face relationship you would engage in for financial planning or investment advice, do your homework about the organization. Is it venture capital backed and possibly going to be sold ...

Read More →

A $5,000 Watch Doesn’t Make You Look Cool

Have you ever met someone who you would classify as a wine snob? Someone who knows all the best wines and will tell you why that $50 bottle of wine is superior to the two buck Chuck you get at Trader Joes? In the world of watches there are also people who you will meet who are watch snobs. The people who will assure you that the Rolex they spent $5,000 for is the best that money can buy, and can give you all of the brand name watches you should own over your lifetime if you really want to show people you have hit success. The dumbest purchase I ever made was spending $5,000 on a watch. I wore two watches over the course of a year, one that cost $5,000 and one that cost $79. The $5,000 watch was a Panerai and the $79 was a Diesel. I generally messed with people when they asked me about the ...

Read More →

Nothing But Net Is All That Matters

Analyzing fund returns can be one of the more treacherous tasks for the average investor. There is so much information on the internet, but it doesn’t necessarily make the regular Joe more knowledgeable when it comes to picking a fund. In addition, the prospectuses have such technical legal and financial jargon that you practically need an engineering degree to get through it cover to cover. In my mind, the most important thing you do not want to overlook is making sure you are comparing funds net vs. net when making a decision about where to put your money. The first piece of the ‘nothing but net’ conversation is to line up all the costs of the fund. Beware that some costs will take you more time and research to find out versus others. Review shareholders fees such as sales loads, exchange fees, and purchase fees. Closely examine fund operating expenses including management fees, 12b-1 fees, and a line item called ...

Read More →

Don’t Let 2008 Happen To You Again

Should you be concerned at all as Dow 17,000 approaches us and may have already happened by the time you read this article? Is hitting 17,000 going to be your friend to a more bullish market or will it be time for people to take their profits off the table and we will see a pullback?   Is it really just as easy as putting the portfolio car in cruise control and just let it ride down the highway?   Here are a few smart money moves lessons to learn so 2008 doesn’t happen to you again in the future. What’s Your Time Frame?  In 2008, there were many parents who had saved for goals such as their children’s education only to see the balance of the accounts get cut in half.  If your son or daughter has college tuition due in the fall, make sure the allocation of your assets matches your time frame. You Must Have A Risk Mitigation Plan- ...

Read More →

Was Your Mutual Fund A One Hit Wonder?

We love lists.  In fact, we have become addicted to them.   Every year, magazines and newspapers publish lists of the best and worst performing mutual funds.   As investors, we often have an impulsive nature to chase the latest and greatest mutual funds often without doing the proper due diligence before we invest new money or transfer our IRA accounts.   What should you ask before investing in a top performing mutual fund from last year? Was this a sector play?   In any given calendar year, one specific sector of the market may dominate versus other sectors of the market.  Just because gold or technology or emerging markets were the top performing sector from the year prior doesn’t necessarily mean they will repeat in the following years to come.   You should be certain that particular sector matches your long term investment objectives before you invest your money. Is it the same manager?  Sometimes mutual funds perform very well and then a given ...

Read More →

Does “Flow” Really Matter To The Average Investor?

To be successful as an investor, it is important to grasp certain basic economic principles including the law of supply and demand. As inflows and outflows are reported within the mutual fund and exchange traded fund industry, the average investor should start to pay closer attention to these numbers when it comes to making their portfolio decisions. Evidence strongly suggests that watching inflows and outflows can quickly demonstrate that the average investor chases performance. How many people have bought at the top of the market and tend to sell at the bottom of the market? Or they end up being a day late and dollar short when it comes to making the right investment decisions. Examining these inflows and outflows can help you spot raw trends of where the mass money is moving and may also present you with opportunities in certain asset classes that may become undervalued. What is decidedly more important than watching the macro trends of money ...

Read More →

Are You An Irresponsible Investor?

If you aren’t a socially responsible investor, does this explicitly imply that you have become an irresponsible investor? LOL. When I first saw socially responsible funds hit the market, most of the initial strategies were fairly straightforward. Avoid the “sin” stocks such as alcohol, tobacco, and gambling. What you need to know today is that socially responsible investing has taken on an entirely different meaning in today’s investing world. You’ve got mutual funds today that invest in undervalued equity securities of large-cap companies with outstanding workplaces. You have funds that invest in common stocks and foreign stocks where investment decisions are made in accordance with Islamic principles. There are others that will address the ecological risks and opportunities of the investment process for the 21st century. My point behind this is that like any other investment you would make with your money, it is incumbent upon you to do the due diligence to determine whether the fund matches both your ...

Read More →

Advice From A Jeweler On Buying The Engagement Ring

Congratulations on your decision to formalize your relationship. Studies show that married people are happier and live longer, so you’re on the right track. First, allow yourself enough time to think through and understand all the new information that you will be involved with in your search for the perfect diamond ring. One of your first decisions will be to decide whether to surprise her with a ring or shop together. That will depend on your relationship. There are advantages and disadvantages in each case. A good middle ground and one that will keep you in budget is to let her pick out the engagement ring mounting and you come back to select the diamond. The most important thing is to make the occasion a romantic one to remember. There are many factors to consider: the shape of the diamond, the size versus quality of the diamond, deciding on white gold or platinum or yellow gold or a combination of ...

Read More →

How Do You Get In State Tuition At An Out Of State School?

The cost for college education continues to rise at a blistering pace.  Although tuition and fees can vary widely amongst colleges and universities, the cost for tuition and fees for the 2013-2014 school year was $30,094 at private colleges.    For in state schools it was $8,893 and $22,203 for out of state students at public schools.   That doesn’t include housing and meals which ran another $10,000 on average and books and school supplies that were about $1,200.   Considering these factors, is the only answer to send your child to an in state school?   Not necessarily.   Here are some ideas on how to get your child in state tuition to an out of state school. By the way, the answer we aren’t searching for is to change your children’s address to a relative that lives in the state where you want your child to go to school.  What the real smart money moves are about, is gaining a better understanding of ...

Read More →

The Roth 401(k) Conversion: Pros and Cons

Since the Pension Protection Act, Roth 401(k)’s are becoming more popular amongst investors through their employer sponsored retirement plan.   If you have been investing in a 401(k) for some period of time, it’s likely you’ve chosen the pre-tax option and maybe it is time to consider whether or not a Roth 401(k) conversion makes sense for your individual situation. PROS: If you believe you’ll be in a higher tax bracket in the future when you distribute these funds, then converting your existing 401(k) to a Roth 401(k) could make sense. Roth 401(k)’s are subject to Required Minimum Distributions, but you can easily roll your Roth 401(k) into a Roth IRA and this can continue to allow you to defer dollars within your retirement accounts if you don’t need to distribute the money. If the market has another depressed year like it has twice in the past fifteen years, that particular year could be a really good time to convert your ...

Read More →

5 Amazing Technology Gifts For Mother’s Day

Mother’s Day is less than a week away and word on the street is that spending is up this year.    The National Retail Federation estimated that consumers will spend 20.7 billion dollars on Mom this year in 2014.  If you are counting that is an average of $168.94 per consumer which is an 11% increase from 2013. Moms work hard and they are entitled to a show of appreciation on their special day. Most consumers will acknowledge that appreciation with a greeting card (81.3%), though it appears her loved ones will also look for special gifts. Two-thirds (66.6%) of those celebrating will buy mom her favorite flowers, spending a total of $2.3 billion, and 33.5 percent will look for spring sweaters and blouses, spending a total of $1.7 billion on apparel and accessory items. Mom’s loved ones will also buy books and CDs ($480 million), housewares or gardening tools ($812 million), personal experience gifts like a day at the spa ...

Read More →

How Rich Do You Think You Are?

Wealth can be defined in many different ways, but classically it is measured through one’s net worth.  Your net worth is simply everything you own versus everything you owe.  The own part of the equation includes real estate, cash, stocks, bonds, 401(k)’s, IRA’s, businesses, and much more.   The owe part of the equation includes mortgage debt, student loan debt, car loans, credit cards, and more.  Once you subtract the liabilities from the assets, you can begin to determine just how rich you really are in today’s day and age. WHERE DO YOU RANK IN WEALTH (source: wsj.com) (If you have a household net worth of X … you rank in the Y percentile): $50,000 … 60th percentile $93,000 … 50th percentile $100,000 … 48th percentile $200,000 … 34th percentile $500,000 … 18th percentile $750,000 … 12th percentile $827,000 … 10th percentile $1 million … 8th percentile $1.4 million … 5th percentile $6 million … 1st percentile There is a really ...

Read More →

Five Ways Social Media Can Make You Money

There are still some people who are avoiding the whole game of social media.   They don’t quite get Twitter or have no interest in Facebook.  In fact, even if they are in the business community they haven’t added their entire professional summary to LinkedIn.  If the whole idea of social media hasn’t garnered your attention, perhaps the notion of putting some dollars in your pocket would be more intriguing.  Here are my five smart money moves on how social media can help you make some cash. Coupons and Deals- If you “follow” the financial people who are ‘frugal’ or cheap on social media websites like Twitter, you can get great advice on coupons, deals, and savings ideas.   Getting these deals just in time can even give you ideas on weekend events where you can receive discounts to places like fairs and festivals. Job Opportunities- Being in relevant groups and paying attention to discussions may help you land your next greatest ...

Read More →

Could A Coffee Infused Donut Make Your Kids Money?

In the past few weeks, several of my clients have asked me about how to get their children started with investing.   As generation X parents are watching their children grow up, they are realizing that educating their kids about how the stock market works is an important lesson, which they unfortunately don’t spend enough time in school systems teaching.   We do not tell our kids now that money doesn’t grow on trees, but we do tell them that i-phones don’t grow on trees.   Rather than getting frustrated, you should take advantage of this by helping them get excited about investing their money instead of spending their money.   At oXYGen Financial, we are soon considering launching a course for our clients’ children to teach them these very important techniques. www.computershare.com–   This is was the first place that I got my oldest daughter into stock investing.    When she was learning about topics like percentages in school, I thought being able to track ...

Read More →

The Colleges With The Best Return On Investment

When we manage money for people we get asked this question all the time.  The investor who gives you $100,000 to manage typically wants to know in advance what you think the expected return on investment is with their cash and over what time frame.  Typically, most investors want to know how long it will take you to double their money.   With today’s student debt approaching almost $30,000 (source: Forbes), should we be choosing and ranking school by return on investment? Payscale, a company who diligently tracks salaries in the United States, recently came out with its 2014 report on collegiate return on investment.   You’ll note some of the best schools in the country are at the top supporting my theory about paying only for the elite colleges and universities in the United States.  However, the most amazing part of the study is that clearly engineering and technology driven schools blow away the rest of the field. Harvey Mudd College ...

Read More →

Are The Elite Private Colleges Worth The Price Of Admission?

It is apparent that college education costs and health insurance are the two arenas that have defied gravity over the past six years through this recovery. With college tuition escalating at a much faster rate than normal information and continued pressing coming on family savings, the average household today may wonder if getting a diploma from an expensive prestigious private college is worth the ticket of admission. If your son or daughter is lucky enough to have the qualifications to get into the ultra-elite schools (such as Harvard), then my answer is yes. There is a short list of impressive schools that have a strong alumni base stretched out across the United States or have the really high end credentials necessary to help a student make a major impact with their career in the short term. There are many very good private colleges that cost $50,000 to $60,000 a year beyond the short list of these prestigious school, and these ...

Read More →

The Biggest Financial Mistake People Make During Divorce

Divorce can often bring about tumultuous times for a family. Sometimes they can go very smooth and others can literally be the ‘War Of The Roses’. In the midst of being between the lawyers, couples often make financial mistakes that can lead to problems down the road. The number one mistake that I have seen amongst divorcing couples is their lack of consideration around liquidity of assets. It’s pretty common after a separation that one spouse will end up with the primary residence and in turn the other spouse may wind up with a commensurate amount of assets between brokerage accounts, retirement accounts, and savings accounts. While the math may show a true 50/50 split of the overall net worth of the couple, the reality is that one of the spouses will be stuck with a paper asset that could be tough to dispose of if cash flow becomes an issue. This can also occur when one spouse is the ...

Read More →

Should You Ever Borrow On A 401(k)?

For some of you a dreaded financial question may stare you in the mirror at some point in your life. Should you borrow against your 401(k)? While all initial responders in your body say no, there could be a few instances where borrowing against a 401(k) may actually make sense. Here is my smart money moves take on when to make yourself a loan. In general, it is not a smart financial move to borrow against your 401(k) plan. There are many individuals who are quitting their job and considering starting up a new business. In order to start their new entrepreneurial venture, they will likely exit from their current employer. The additional problem is where will the new entrepreneur find the capital to open up their new business? Instead of cashing in your old 401(k), one tremendously creative option to potentially fund a new business is to set up your new corporation and create a Solo 401(k) plan. Solo ...

Read More →

Four Affordable Watches For Men To Start Your Collection

There was a phase in my life where I got into watches for a year or two.   Today, I’ll only wear a watch once or twice a week since my phone pretty much tells me the time at the click of a button.   You’ll hear people bragging a lot at work or social events about their watches.   Rolex has always been the gold standard, but they will name drop watchmakers like Panerai, Bell & Ross, Tag, and Breitling all as ‘if you really want to impress watches.   Most of price tags on these watches are in the several thousand or more category, so can you start your watch collection for less than $1,000 bucks and still look like a million?  You betcha!  Here are four watches that I would take a look at for yourself or for someone as a gift to start out a really cool collection. Jack Spade Conway 38mm Watch–  I have always had an eye for ...

Read More →

Five Financial First Time Homebuyer Mistakes

In all of the financial transactions we make in our lives, there are few that pale in comparison to the excitement of making the purchase of your first home.   Many years ago, the first time homebuyer merely began with a starter home, but expectations have significantly increased today with new homebuyers wanting all of the modern up to date amenities included in their first home.  Oddly enough, the first time home purchase is often made with as swift a decisions as buying a new car although the purchase may be ten times the size of a new car.   Here are your five smart money moves to make so you can avoid the pitfalls and traps that most new homebuyers make. Falling In Love With Your Mortgage Pre-Approval:  Just because you are pre-approved for a $400,000 loan doesn’t mean you can actually afford a $400,000 loan. “Listening to the mortgage lender when they tell you that you are pre-approved for a ...

Read More →

Is It Worth Going To Conferences?

When you work for a large corporation, you don’t have much of a choice about whether or not you go to the company conference.  They are often filled with workshops, PowerPoints, happy hours, and every once in a while a late night story that you really don’t care to share by the time you get back home.  However, there are industry conferences that are being put on all the time.  In the financial services industry alone, I counted well over 100 conferences I could attend ranging from technical competency training to practice management.   So, is it a smart money move to attend a conference over the next year? Here are seven tips to consider to determine if it will be worth going to an upcoming conference: Determine Where Your Biggest Personal Or Business Bottleneck Is At This Time- If you are going to spend the money to go to a conference, make sure the agenda matches what skill sets you ...

Read More →

Girl Scout Capitalism

Who’s got a case of the munchies? Purchasing a box of Thin Mints®- our round, mint-flavored cookies with a delicious chocolaty coating- helps a girl learn money management.  She handles money, keeps records, tracks orders- activities that are essential to running a successful business. (girlscouts.org) Well, 13 year old Girl Scout Danielle Lei and her mom recently showed us all a thing or two about American capitalism when they had some Tag-A-Longs® and other Girl Scout flavors in tow for sale at a San Francisco medical marijuana clinic. We can all learn a thing or two about business from Danielle Lei.  Talk about the notion of free enterprise.   Danielle typically sold her Girl Scout cookies outside of a Safeway, but with her mom’s approval they set up shop in front of the Green Cross which is a medical marijuana clinic in San Francisco.  What happens when supply meets demand?  Within two hours on President’s Day, Danielle sold a whopping 117 ...

Read More →

Save Big, Save Little for College

For many of us, one of the biggest expenses that we’ll have is paying for our own or our child’s college education. Personally, I knew that I wasn’t going to have a “Free Ride” during college. Although I played Division III college basketball, I still maintained 4 jobs in college and used the tutoring services so that I could qualify for as many academic scholarships as possible and to pay down some of my student loans before I graduated.  According to the College Board, statistics show that over the past 30 years the average annual increase for college tuition has ranged from 3-5% above and beyond inflation(Consumer Price Index). I recently had the chance to interview Mandy Ginsberg, CEO of Tutor.com/former CEO of Match.com, about the different ways to help students save and pay for college. Below are a few tips that Ginsberg shares with our readers. “Save Big” Ginsberg says. Many people transition from paying for day care to ...

Read More →

The Flappy Bird Economy

If you have kids or teenagers in your family, then it’s likely you have seen the highly downloaded app called Flappy Bird. Sometimes the simpler the game is, the better off it does because anybody can play the game. Consider apps like Tetris or Candy Crush or Angry Birds which absolutely killed it with downloads. The goal of the game is really simple. Just touch the screen to flap your bird up or down guiding the bird between various heights of piping that have a narrow entryway for your bird to fly through. The game is incredibly addicting! Dong Nguyen mysteriously put this post up on Twitter on February 8th @ 2:02 P.M. “I am sorry ‘Flappy Bird’ users, 22 hours from now, I will take ‘Flappy Bird’ down. I cannot take this anymore.” There was massive speculation around why he took down Flappy Birds as it was reported he was making $50,000 a day. Some say that the pipes ...

Read More →

The Biggest Investment Mistake You Make Every Year

We all know that investments can be for short term, medium term, or long term.   Investments are often thought of in terms of stocks, bonds, mutual funds, real estate, etc.    Some people invest their money in private ventures and some in public companies.   Business owners will almost always tell you the best investment is their business.   In my opinion, the biggest investment mistake each and every person makes on a yearly basis is not setting aside enough of their personal income to invest in themselves.   Investing in yourself can be personally, professionally, and financially rewarding.   Here are my top five ways to invest in YOU! Advance Your Education- There are so many outlets today to gain extra knowledge and education.  It doesn’t have to be done necessarily by going back to school full time.   You could do a three day executive course or just sign up for one night class.  You could take an online course on a site like ...

Read More →

How Does The My RA Work?

Trapped in my office by the Snowpocalypse that hit Atlanta on last Tuesday, I had the opportunity to watch the State of the Union (#sotu) Address delivered by President Obama.   There is a whole lot of financial topics we could talk about on Your Smart Money Moves, but I’d like to review the topic around the new proposed investment vehicle called the MyRA.  Since we already have the SEP-IRA, SIMPLE-IRA, Rollover IRA, Roth IRA, Traditional IRA, Beneficial IRA, etc., wouldn’t it have just been easier to call it the My IRA instead of the new urban dictionary word called MyRA? The concept behind the MyRA account would be a new type of bond within a Roth IRA-type umbrella.  Contributions would not be tax-deductible, but earnings would be tax-free when you withdraw it in the future.  It’s unclear about how closely the rules on this account shadow the rules of the current Roth IRA. The investment vehicle would be a new ...

Read More →

Retirement Assumptions: What’s Your Legacy Goal?

When you are building out your long term retirement plan, a financial advisor will often have to make many different types of assumptions. I have authored numerous articles around this topic. You need to consider market downside risk, interest rate risk, inflation risk, liquidity risk, tax risk, sequencing risk, and several others. Often, one major mistake made around the discussion regarding building a quality retirement plan is actually having the end in mind. What do you want your legacy to be when you pass on? This is a crucial conversation to have at the onset of your overall comprehensive financial plan. Consider this for a moment. If you tell your financial advisor nothing, he or she will likely build out your retirement plan analysis by using a ‘death age’. From the conversations you have with your planner or from some default number in the financial planning software, you will arrive a set age usually in the 85 to 90 range. ...

Read More →

What If You Were Down 27%?

The Dow Jones industrial average (DJIA) rose 72.37 points, or 0.4%, to 16,576.66 on the last trading day of 2013. For the year, the index of blue-chip stocks was up 26.5% — its best performance since 1995.   The media, can sometimes be our friend or our foe.  Unfortunately, because our lives are so busy we often just get snippets and sound bites of information about our investments and money issues.   When you hear the DJIA had a banner year, your first thought is often “did my investments do as well as the stock market?” Most investors have a very short memory of their original risk tolerance, goals, or objectives when they start analyzing returns on their money.   Without setting proper expectation, banner years in the stock market like 2013 can send you into the depths of unhappiness because you may feel you missed out on a golden opportunity.  However, what happens if you were down 27% or even 33.84% as ...

Read More →

Could Stamps Be A “Forever” Investment?

There is a reason you want the Your Smart Money Moves blog by your side.   Over three and half years ago, I wrote you a blog about buying forever stamps.  Did you take advantage of my advice?  With any overall financial plan, the one silent killer people often leave out is inflation.     Especially when it comes to the actual cost of buying your basic staples like groceries, gas, and utilities. While there has been a substantial increase in business being done on the internet, the United States Postal Service (USPS) will raise prices effective January 26th, 2014 to 49 cents for the first ounce of a first class stamp.   This would essentially be a 6.5% increase.   Bulk mail is also going up by 6% and with a raise to 33 cents, postcard will be up 10% versus 3 ½ years ago. How can you make a smart financial decision?   Load up on Forever stamps! Issued in 2007, the first forever ...

Read More →

How Can My Portfolio Completely Avoid Risk?

With Moody’s Investment Service downgrading more than a dozen global banks to reflect declining profitability, the Euro Zone looking to be in grave financial crisis, and the U.S. Economy having a gloomy shadow in the distance, many investors are asking how to find investments that carry no risk.    Some of these investors are folks that are retired and looking for current income while others are at the 20 yard line approaching the end zone of their retirement day.    So where do you find an investment that carries no risk? Unfortunately, every single type of investment carries some inherent risk.    Learning how to balance out that risk or being timely with your investments on knowing what risks to take at what time can ultimately determine success or failure in your overall investment plan.   When it comes to today’s main risks facing investors, here are the three big I’s with respect to investing and risk. Inflation Risk– Inflation risk, sometimes known as ...

Read More →