Preparing For the Next “Fiscal Cliff”

January 02, 2013

The fiscal cliff may be resolved but the deal only makes our “national debt cliff” even bigger. While we all hope our politicians can find a way to implement the necessary changes to reduce our national deficit AND national debt, we all must be prepared for how these changes will affect our lives. It’s been said that if we don’t learn from history, then we are destined to repeat it. We should not let the valuable lessons of our most recent recession and now current financial pickle go unlearned. These are some steps I encourage you to consider taking as a way to prepare for what lies ahead, no matter how things unfold: Continue reading “Preparing For the Next “Fiscal Cliff””

Happy New Year! Three Financial Areas to Focus on in 2013

December 31, 2012

Today is the last day of 2012. Tonight you will pop the champagne cork and pull out the glasses to toast “out with the old and in with the new.” Whether you are dressed in your finest sequins and rhinestones or your best suit or you are comfy cozy watching the ball drop from the comfort of your living room, you just can’t help to think about new beginnings. Tonight we shed the old and begin anew! Continue reading “Happy New Year! Three Financial Areas to Focus on in 2013”

Can This Retirement Be Saved? Case Study Age 40

December 17, 2012

When I was a kid, I used to love to read the Redbook magazines my mother had lying around the house. My favorite column was “Can this marriage be saved?” since it gave the wife’s point of view, the husband’s point of view and then finally the therapist’s point of view of the marriage and what could be done to improve it. I realize I am like that therapist now but for finances. Continue reading “Can This Retirement Be Saved? Case Study Age 40”

How Some Financial Decisions Are Like Bounce Houses

December 07, 2012

I read this article about the increasing number of “bounce house” injuries and at first I thought it might have been a hoax. But then I remembered a bunch of kids’ birthday parties that I’ve attended and if my memory serves me correctly (and that’s not always such a sure thing!), there has been at least 1 injury at each party. One was particularly memorable because it was one of my good friends who was in the bounce house with her son and his head collided with her lower lip. A whole lot of paper towels and a few stitches later, she had a fat lip for over a week. Her son, to this day, jokes with her about the time he nearly knocked her out and made her go to the hospital. (It was an urgent care center but he likes to embellish a little bit for an audience.) Everyone loves the idea of a bounce house. Not everyone loves the end result of jumping around in one. They may look wonderful, but it isn’t all a 100% pure joy. Continue reading “How Some Financial Decisions Are Like Bounce Houses”

What Your Financial Planner Needs to Know About You

December 06, 2012

One of the questions I commonly get from people is about what information to bring to a financial planning consultation. In my own meetings with employees, some people come with spreadsheets or even thick binders of information while many bring nothing at all. In both cases, they often have no idea what information is relevant and useful in making financial decisions. Whether you work with a planner or manage everything on your own, here is some information that you’ll want to have at your fingertips: Continue reading “What Your Financial Planner Needs to Know About You”

Are the Rich Really That Different?

November 29, 2012

At Financial Finesse, we are expanding more into financial planning for high-income executives, which is surprisingly an underserved population for unbiased financial guidance. Many high net worth individuals have access to financial advice but not necessarily from an unbiased source. I recently had the opportunity to work with a group of senior executives with much higher incomes and account balances than the employees that we typically talk with. Now, you may expect that those in the top income tax brackets would have significantly different financial problems than the rest of us and to some extent you would be right. They’re generally able to cover their expenses so they usually aren’t struggling with debt or cash management problems. But other than that, many of their problems are the same ones typically facing other people at the same stage of life. They just have more digits in their numbers. Here are their three biggest financial issues: Continue reading “Are the Rich Really That Different?”

Why You May Be Wrong About Your Retirement Time Horizon

November 15, 2012

I recently received a question from someone who was using our risk tolerance profile and asset allocation worksheet and noticed that the worksheet’s guidelines were to have 0% in stocks since his time horizon was less than 5 years away while his target date retirement fund had 40% in stocks. While there are differences between the asset allocations of various models and target date funds, that gap was pretty stark. So who was right? Continue reading “Why You May Be Wrong About Your Retirement Time Horizon”

What to Do With $100,000 in Today’s Economy

October 29, 2012

I actually get this question quite a bit on our financial helpline and in our worksite financial planning sessions, not so much that someone got an inheritance (though I did get that last week), but many people simply want to know how they should allocate their assets in their own 401(k). The question doesn’t have a quick and easy answer and answering involves asking a series of questions first because investing starts with you – the investor. Obviously, an aggressive investor is going to have a very different investment mix than a conservative investor. A fifty year old may have a very different investment mix than a twenty year old no matter what the current economic outlook. Here are some questions I always start with: Continue reading “What to Do With $100,000 in Today’s Economy”

Protecting Your Portfolio from Inflation

October 25, 2012

Last week, I wrote about some ways to potentially protect your retirement from rising inflation but we didn’t get a chance to discuss how to protect your portfolio. Here are some options to consider: Continue reading “Protecting Your Portfolio from Inflation”

What to Do With a Windfall of $10,000

October 22, 2012

Ten thousand dollars is a lot of money but certainly not enough to make you independently wealthy. I remember watching the California lottery television show when I lived in Sacramento. The lottery ticket scratcher winners were chosen randomly to be on the show. Then a few lucky people were pulled from the audience and got a chance to spin a wheel so a ping pong ball would determine whether they won a million dollars all the way down to a minimum $10,000. Most people actually won $10,000 but every single one of them had high hopes of winning the million. Continue reading “What to Do With a Windfall of $10,000”

What to Do with $100

October 15, 2012

People often ask me what to do with $10,000 or $100,000 because they have saved those assets in their 401(k) and want to make sure they are invested appropriately for their retirement. I can’t recall anyone ever asking me what to do with $100, but that question may actually be the key to financial security and building wealth. Continue reading “What to Do with $100”

Should You Pay Your Mortgage Off Early?

September 21, 2012

A topic that comes up all the time in my conversations with people looking for guidance is the usefulness of paying off a mortgage vs. keeping it. This article talks about three homeowners who developed plans to pay off their mortgages in order to reach goals that are important to them. One wanted to have his mortgage paid off prior to retiring so that his cost of living in retirement was very manageable. It’s easier to retire comfortably if your biggest cash outflow item (for nearly everyone I talk to their mortgage or rent payment is by far their largest monthly obligation) disappears. Imagine how little you would need to live on if you didn’t have to pay rent or a mortgage! Another homeowner wanted to pay off the mortgage prior to their children going to college so that their monthly income could be used to fund education for the kids and the kids wouldn’t be saddled with massive student loan debt upon graduation. The last one wanted to aggressively pay additional principal on their mortgage in a bigger house while they had kids at home and after the kids were gone, they downsized and used the equity in the big house to fully pay for a much smaller, empty nest house. These homeowners all had goals and reached them. Continue reading “Should You Pay Your Mortgage Off Early?”

Should You Invest with a Commissioned Broker? Maybe

September 20, 2012

I recently had dinner with a friend of mine who just got a job working for an investment brokerage firm. Yes, that means she’s going to be one of those commissioned brokers that I’ve warned so much about. (If they work for a brokerage firm, they’re a broker even if they call themselves something else.) Ironically, she was looking for some advice from me in getting clients and building her business. Did I tell her to forget it and join a fee-only financial planning firm? No. In fact, there are some very good reasons why an investor could be better off with a broker than one of the many fee-only advisers she’s competing against: Continue reading “Should You Invest with a Commissioned Broker? Maybe”

7 Reasons NOT To Roll Your Retirement Plan into an IRA

August 30, 2012

Do you have a retirement plan from a former employer? Last week, I received two separate questions about what to do with a 401(k) from a previous job. Both times the person asking the question was thinking about moving it and both times they decided to leave it where it is after reviewing the pros and cons. Continue reading “7 Reasons NOT To Roll Your Retirement Plan into an IRA”

The “Secret Sauce” Behind Successful Investing

August 24, 2012

Much to the chagrin of dentists everywhere, Tootsie Roll has been a staple of the candy business for a very long time. This article talks about the Tootsie Roll Company being a very secretive organization. (And we thought it was just the CIA that operates in relative secrecy)! Tootsie Roll doesn’t give tours, they don’t give interviews to analysts and they don’t operate with much transparency. It’s as if they have some magical mystery formulas that they don’t want the rest of us to know. Continue reading “The “Secret Sauce” Behind Successful Investing”

The Dictionary Now Includes What???

August 17, 2012

I was in the car today and I heard a quick news story about some new words being added to the dictionary. “Brain cramp,” “bucket list,” “energy drink,” “life coach.” and “aha moment” were added to the dictionary, and the most talked about “new words” are “F-bomb,” “sexting,” and “man cave.” I have a feeling that if my high school English teacher weighed in with her opinion of these new words, her opinion would not be favorable. She was not a fan of “can’t,” “wouldn’t,” and “should’ve.” She preferred that we write both words without the apostrophe rather than use the contraction. She felt that we were getting lazy with our language and that traditional, established English had more than enough words to adequately express anything that you want to express. Sometimes evolution/progress is good, sometimes…not so much. That goes for our language as well as our financial lives! Continue reading “The Dictionary Now Includes What???”

Financial Lessons from Olympic Volleyball Gold Medalist Kerri Walsh Jennings

August 06, 2012

“We can do better” was the phrase I heard in an athlete’s interview. Surprisingly, the words came out of the mouth of three time Olympic volleyball player and two time gold medalist, Kerri Walsh Jennings. Kerri and her partner, Misty May-Treanor, have never even lost one set in two Olympics games – Athens in 2004 and Bejing in 2008 – and they are working toward their third in London. So when I heard the phrase from Kerri, I wondered, how can you do better than never losing a match? How can you do better than gold? How can you do better than being the best in the world? Continue reading “Financial Lessons from Olympic Volleyball Gold Medalist Kerri Walsh Jennings”

The Brady Bunch and My Observations On a Younger Generation

August 03, 2012

The Brady Bunch is coming back!!! I was very excited to read about that!!! As a kid, I was a huge Brady Bunch fan and if I see it on when I’m scrolling through the channels, I almost always stop and watch for a little bit. I even think Marcia Brady might have been my first celebrity crush. The show is just an absolute classic. My kids even like it. And, I can still sing the theme song without hesitating on the lyrics. (For your own protection, I absolutely won’t link an MP3 file here so that you can hear my rendition; your ears would bleed…) Continue reading “The Brady Bunch and My Observations On a Younger Generation”

6 Tips for Making the Best 401(k) Investment Choices

July 18, 2012

Investing for retirement can be an intimidating undertaking. Setting aside money in your 401(k) plan is difficult enough, but determining how to invest it presents its own set of challenges. The good news is that you don’t need to be a seasoned, savvy investor in order to make the right choices. In fact, once you determine your risk tolerance and know what to look for in a fund, picking the right one is largely a process of elimination. Continue reading “6 Tips for Making the Best 401(k) Investment Choices”