Financial independence does not result from a jackpot or inheritance. Instead, financial independence results from a lifetime of making prudent financial decisions. Over time, this incremental progress results in massive improvement in our financial lives.
Regardless of which decade of life you are in, financial responsibility usually comes down to managing a few basic goals: generating income, saving/investing money, controlling your living expenses, and protecting yourself from risks.
Life is filled with risks. While stock market, economic, or political risk is widely discussed in the press, there are other risks that financial advisors and clients must consider. One of the biggest and most uncertain risks has to do with the future high-cost medical care that is not covered by insurance.
In my last blog post, I discussed Faith in the Future as the first key to investment success. The second key is Patience.
The first key needed to obtain investment success is to have a resounding "faith in the future".
Aging in place.
Most individuals are covered for personal liability under their homeowners and automobile policies. There are limits, however, to the amount of protection these primary policies provide.
Sequence of return risk is a major factor in retirement security.
Rising markets have two very negative and interconnected effects. First, a rising market facilitates unrealistic hopes and high expectations about future stock returns. Second, a rising stock market actually lowers the future expected returns.
There are two basic categories of life insurance: term and various forms of cash value life insurance. Today, I am going to talk about term life insurance and ways to use it more creatively to not only obtain a more appropriate amount of long-term protection, but also to save money.
In my last blog post, I wrote about the use of Tax Bracket Smoothing as a technique to build wealth. In the video below, I expand on the concepts presented in the newsletter, and provide some demonstrations of how the strategy works, and how to confirm the value of such strategies.
What if I told you that you could build wealth by paying taxes—and paying them now instead of later? Most clients don’t want to pay taxes at all, let alone sooner rather than later. In fact it is common wisdom to defer income taxes as long as possible. How do you defer income and therefore taxes? The table to the right shows some typical income acceleration / deferral strategies.
With the recent IRS related fraud issues (IRS imposters, and IRS security issues) I have been thinking and reading more about fraud, identity theft, and methods of protecting clients from such problems.
It is easy to get lost in numbers, projections, and spreadsheets. Getting so deep into the weeds is an easy way to lose sight of where you are headed and what figures are really important to stay focused on.
On Monday, March 23rd, Bill was quoted in an article titled 7 Bad Investing Habits That Are Holding You Back by Kate Statler in U.S. News & World Report. Bill mentioned how comparing portfolio performance to the wrong benchmark (e.g., S&P 500) is inappropriate and harmful to your realized investment results.
A client recently contacted me regarding a very frightening call she received from someone claiming to be from the IRS. They told her that she was facing jail time for fraud and tax evasion. Their tactics were very aggressive and intimidating and they insisted on her sending money immediately to avoid a variety of harsh consequences.
The cartoon below is from Hugh MacLeod and is a nice New Year’s reminder to live in the moment but with a long-term plan in mind. When planning for the long-term THINK BIG as most people underestimate the changes that can occur over a 10-year time period.
One of the hardest things for investors to focus on is the long-term. Instead, investors are very focused on the day/week/month/quarter, etc. It is a "what have you done for me lately" outlook to investing.