Single Women Going Broke By The Cocktail

For those that watched the glamorous life of Carrie Bradshaw and her cronies in Sex And The City, did you ever wonder what it really cost to maintain a Manhattan apartment, fabulous clothing, and dining and entertainment throughout the city?   One quoted number by Carrie Bradshaw herself is that she spent well over $40,000 on footwear alone over the course of her lifetime.  Could that be true and why is it that so many women now in their 20’s, 30’s, and 40’s are struggling financially? Recently, Pew Research collected data and published a report that a record amount of adults today in their 20’s and early 30’s are unmarried.  If the trends continue in the current direction, one in four will never ever get married.   The biggest reason given by this age group for not getting married was for a lack of financially being ready.   Women were especially concerned about tying the knot because of financial concerns.   As salaries and ...

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Is it Time To “UPGRADE” Your Home

Your children are getting older and you need more space.  The commute to the office is getting unbearable.  Congratulations…you just got the promotion you have earned through years of hard work.  Now it’s time to buy that new home that you have been dreaming about.  What should I do next to turn this dream into a reality? Many people jump in their cars or start searching the internet to look for that new home.  STOP!  Here are three important steps that will help you avoid wasted time and potentially give you an advantage throughout the buying process. How is your credit? Your ability to qualify for a mortgage will primarily be based on your income and your credit standing.  We all think we pretty much know what is on our credit report and our FICO scores.  Surprise!  That’s not always the case.  Many credit reports have inaccuracies that will hurt your chances to qualify for a loan so they need ...

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The 20/10/1 Rule When Buying A New Home

You just finished watching the latest installment of House Hunters on HGTV and begin to think to yourself, “Why not me”? Shouldn’t I be able to get that home will the beautiful kitchen, sweet master bedroom, and super-duper outdoor living space?  Before you go ahead with that first home purchase, there are three “Ted” rules you need to consider for your family finances. The 20% rule. I am a big fan of putting down 20% for two reasons  One, If you are renting and you can save a larger amount each month to build up a cash reserve of a 20% down payment, it is a good sign that you are ready to afford the future mortgage payment.  Often, people skip right from renting to owning by putting down a small down payment and then get caught upside down with the extra costs of owning a home (higher electric, gas, landscaping, etc.) Two, in most cases, you will avoid paying ...

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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 ...

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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 ...

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Millennials And The Housing Market

For decades, the American dream looked something like this: go to college, get a job, buy a home. More recently, that picture has changed, due to the increasing amount of student debt millennials are graduating with, the unstable job market and a shaky, but strengthening, housing market. In the second quarter of 2014, homeownership rates for people under age 35, the millennial generation, were at the lowest they’d been in decades — less than 36 percent, according to the U.S. Census Bureau’s Housing Vacancy Survey. The lack of homeownership among Millennials doesn’t affect only them: It is expected to have a greater impact on the housing market in general. What’s keeping millennials from buying? While there isn’t just one factor that is keeping the younger generation from buying, one area in particular is having a great effect on their ability to buy a home, and that’s student loan debt. Currently, the amount of debt outstanding on federal and private student loans ...

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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 ...

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Why Are You Mad At Your Accountant?

Here is a question to ask yourself after tax season is over.  What really happens during a typical tax season for a family or business? I have been doing this for over 20 years, and so let me describe to you the typical outcomes. The first thing that we see is that most people cross their fingers and say three Hail Mary’s hoping for a refund.  Does this sound like you?  You gather all of these documents that you get from your employer, your investment companies, and real estate you own, then you hand them over to somebody (an accountant or CPA) and pray that they’re going to get you some money back so you can go on that vacation or remodel your house.  Most individuals that we meet who get a federal refund during tax time think that their CPA is the bomb.  They are assumed to be the smartest, brightest, and most unbelievable individuals in the world.  It’s ...

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Does Your 401(k) Offer An “In Service” Distribution?

For Generation X clients, the majority of their retirement savings are in the company 401(k).   While you do have a multitude of options of what you can do with your 401(k) if you leave your employer, often people feel like they are stuck if they stay with the same employer for a long period of time.  This is especially true with larger companies as most of those plans offer a limited number of investment choices and several target retirement funds.     I’m amazed that many people I sit down have never heard of whether their company offers an in service withdrawal or an in service distribution which can give them greater investment control of their 401(k) assets.    Since we have had two major market meltdowns over the past 12 years, 401(k)’s offer limited power to help you risk mitigate against a market crash.   This is why you need ask your employer today, do we offer an in service distribution? So, just ...

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Personal Finance 101 – Retirement Planning – Getting Income From The Water Faucet

Last week in Retirement Planning 101, I discussed the different types of investments used in retirement plans. If you do a good job saving during your working career, the most difficult phase of retirement planning in my opinion is the distribution phase. Since most people who think they are ready to financially retire worry about running out of money, figuring out the right way to take income from your investments is crucial during retirement.  I think about retirement asset distribution much like the water faucet you have at home. You need to know which spicket to turn on in order to minimize taxation while you take home the most net income possible. Remember that the first couple of years of retirement will generally result in a slightly larger amount of income needed before you settle into your regular expense mode for retirement income.  We have found over the years that clients will spend more in the beginning of retirement filling ...

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