The Best Financial Advice From 7 Real Dads

The Best Financial Advice From 7 Real Dads

Jordan Rosenfeld   Fri, June 18, 2021,

Learning how to earn, manage and invest money isn’t something that kids are typically taught in school. In fact, according to Youth.gov, many kids lack basic financial knowledge of everyday situations, from budgeting to reading an invoice. In one financial survey, high school seniors only scored an average of 48% correct, revealing a need for financial education. Who better to get money advice from, then, than dads with financial expertise? Here’s what seven fathers with real-life wisdom shared.

Adopt a Growth Mindset

Jonathan Sanchez, father of two, a real estate investor and co-founder of Parent Portfolio, teaches his kids to think beyond just how much something costs.

“I give my kids the money advice to not think that they cannot afford anything, such as a toy or a game. Instead, I encourage them to ask themselves, how can they afford it? This question promotes a growth mindset that [they] can use in all aspects of life, including finances, such as having a savings goal.”

When his 7-year-old son wanted to subscribe to an online learning game, the boy came up with the idea of selling his unused toys to help him reach his goal.

Maximize Your Retirement by Starting Early

For young people, retirement is a theoretical idea that will happen “someday.” But according to dad David Steiner, a principal of Zebulon Tax Advisory LLC, the earlier you start putting money away for that day, the more likely you won’t have to worry about money in retirement. For example, he ran the numbers on a 401(k).

The math is simple: “$20,000 (limit is $19,500) per year for 20 years is $400,000, and with growth at 6% (which is really low, the market averages 9-11%), it will turn into about $865,000. If you increase the rate of return to 8%, the amount is now about $1.2 million. Not bad. If held for 40 years at 6% — $3.4 million, 8% — over $6 million — one can retire on that comfortably.” The same goes for an IRA.

Pay Yourself First, but Live Below Your Means

Bryce Welker, owner and CEO of CPA Exam Guy, an e-learning and course review resource for CPA exam candidates, tells his kids two main things:

“One would be pay yourself first, the second would be live below your means. The first is an inducement to save money. Whenever you get paid, whether that’s through investing or employment income, prudent financial planning for the future involves setting aside money for your savings account first before spending money on anything else. The next budgetary allocation would be to your bills, followed by discretionary spending.”

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/best-financial-advice-7-real-110000968.html

7 ‘Taboo’ Money Topics We Should Be Openly Discussing

7 ‘Taboo’ Money Topics We Should Be Openly Discussing

Gabrielle Olya  Sat, June 19, 2021, 2:00 PM

Talking openly about money has been seen as taboo for years. But it seems that millennials are now trying to buck the trend. A recent Wall Street Journal article noted that young adults are more open to talking about their finances than older generations -- and this might be a good thing

How Your Parents Plan To Support Themselves in Retirement

It can be uncomfortable to discuss financial plans with your parents, but not having these conversations now can make things more difficult for you and your siblings down the line if it turns out that your parents don't have a retirement plan in place.

"We should definitely talk more with our aging parents about their financial situations and how to plan for them -- not just with the parents, but also other siblings," said Yaron Ben-Zvi, CEO of Haven Life, a life and disability insurance agency. "This isn't always easy, but can avoid a lot of stress down the road if aging parents don't actually have the resources they need to live comfortably in their golden years."

Your Own Retirement Plans

In addition to being aware of your parents' plans for retirement, you may also want to check in with your peers to make sure that you yourself are on track -- even if retirement currently seems far away.

‘Saving for retirement’ is a nebulous phrase that many people do not understand fully, and therefore, they put it off longer than necessary," said Leslie Tayne, founder and head attorney at the debt solutions law firm Tayne Law Group. "By speaking openly about how much one has saved for retirement and their saving practices, it becomes easier for those younger or newer to saving to understand the scope of long-term financial stability and goals."

Estate Plans

Talking about money -- especially in the context of death -- can make anyone uneasy, but you should be discussing estate plans with both your partner and your parents.

"Talking about death or severe illness/disability with your partner is probably not your idea of romantic pillow talk, but estate planning is, in some ways, a final act or expression of love," said Tara Falcone, CFA, CFP, founder of ReisUP and ambassador for Trust & Will.

"Your medical or end-of-life wishes are the last thing you want your loved ones to be stressed out about if something happens to you. For example, when my father passed away at 36 years old, he didn’t have a will, nor had we discussed his wishes even though we knew his illness would likely take him. Not having those documents in place fueled a lot of heated discussions and sleepless nights that could have been avoided."

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/7-taboo-money-topics-openly-180004560.html

Overcoming The Downer Of No Longer Making Maximum Money

Overcoming The Downer Of No Longer Making Maximum Money

06/18/2021 by Financial Samurai

Do you know what is really hard? Deciding to walk away from a whole lot of money in your prime. If you decide to retire early, you must accept the death of your maximum money potential.

At age 34, I was making a base salary of $250,000. Come year-end, my bonus would range between $0 to $500,000. Instead of suffering from the one more year syndrome for one more year, I decided to quit the money by negotiating a severance instead.

If I hadn’t left my job and averaged a realistic $500,000 a year in total compensation since 2012, I would have made $4.5 million by now. And if I had gotten regular raises and promotions, maybe I would have made more than $7 million after nine years. ** Perhaps I should have stayed in finance after all!

The more you make, the harder it is to walk away. I told myself back then that if I didn’t leave, I probably never would break free from the golden handcuffs. Many people who dislike working in finance, management consulting, and big tech after a while have this same problem. It’s hard to drop your maximum money potential.

However, if you’re unhappy with your current situation, you must find a solution to overcome the desire for more money.

Some call this desire greed. But greed is not the right term if you’re still trying to build your financial nut. You’re only greedy if you have enough but still work like mad doing something you don’t like or that has no benefit to society.

How To Be OK With No Longer Making Maximum Money

Everybody has the ability to make a certain amount of money. Income has a range that usually increases the older you get. Rational people are also realistic with how much money they can make. If you decide to work for the government, you know your pay will be within a very tight band. Alternatively, if you decide to become an entrepreneur, your income upside is unlimited.

Let me share with you the steps I took to be at peace with no longer trying to make maximum money. In the process of walking away, I also lost my title and became a nobody. For some, walking away from prestige is even more difficult than walking away from money.

1) Envision What Your Life Would Be Like Making More

To continue reading, please go to the original article here:

https://www.financialsamurai.com/making-maximum-money/

Why Money Is Important And The Role It Plays in Our Lives

Why Money Is Important And The Role It Plays in Our Lives

At some point, you may wonder why money is important and start to analyze the role it plays in your own life. And our society has plenty of different viewpoints when it comes to money and happiness, how much money is truly enough, and how to better with money.

I’m sure you have heard many of the different sayings about money too, whether funny or to hit a particular point to make you think. You know the ones, like:

“Money doesn’t buy happiness.” – Proverb “Money is the root of all evil.” – 1 Timothy 6:10

“Having money isn’t everything, not having it is.”  – Kanye West

But you’ve probably heard many proverbs, famous quotes, or other sayings from people around you. And while there may be some truth to not let money dictate your entire life and choices, money IS important.

Why Is Money So Important?

The reason money is so important is that it provides options for you to live a better life that you choose and puts you in control. Having money and being comfortable with finances also gives you freedom and options to decide how you want to live and support the things you care most about in your life.

And yes, it’s true that money cannot necessarily buy you complete happiness forever and greed can make people do terrible things. Look what the hunger for more wealth and money did to Bernie Madoff and how he ruined the many families who invested with him.

But while there is truth to some of the negative connotations to money, ultimately you have the strength to dictate how you use money and if you let it control you.

Money is not everything in this world, but it can be powerful in helping you achieve your goals and let you make the best of the short life we all have.

To continue reading, please go to the original article here:

https://investedwallet.com/money-is-important/

Why You Should Wait To Buy A House

The Definitive Guide To Buying Your First Home

‘The market is as hot as we’ve ever seen it:’ Why you should wait to buy a house

Published Thu, Jun 17 2021  Updated Thu, Jun 17 202112:31 PM EDT

Alicia Adamczyk

With prices for new and existing homes at record levels and demand still sky-high, prospective buyers might be better off waiting for more inventory and less competition, housing experts say.

Currently, houses are staying on the market for an average of six days nationwide, according to data from Zillow, an impressively fast turnaround. That’s a seller’s dream, but potentially bad news for buyers, who face enormous competition and might end up paying more and forgoing important parts of the homebuying process — like inspections — to get their offer accepted quickly.

A few different factors have created this homebuying environment, says Jeff Tucker, senior economist at Zillow. The most obvious is the Covid-19 pandemic, which accelerated many people’s homebuying timelines. Coupled with historically low interest rates, buyers wanted to lock in extra space and a good deal on their mortgages.

That coincided with a large group of millennials, America’s largest generation, reaching their prime homebuying years, says Tucker. He expects demand will continue to be high for a few years as these late-20, early-30-somethings naturally start to nest.

But with such a hot market, prospective homebuyers might be better off waiting until the fall or even next year to buy, Tucker says. Though no one can say with exact certainty what will happen, he says inventory is already starting to rebound a little bit, which will give buyers more options. Zillow expects home prices to stay elevated for the next year, at least.

“This is a really challenging time to be a buyer. The market is as hot as we’ve ever seen it before,” Tucker says. “If they can watch and wait for the next several months, time is on their side.”

Don’t let emotions take over

Of course, many people may not be able to wait for the opportune moment to buy a home, or they simply may not want to put it off for a few more months. And mortgage rates are still low enough that buyers may be willing to forego their dream house to lock in better financing.

But buyers should still consider the urgency of their move, says Kristina Morales, an Ohio-based realtor at Morales Team Real Estate. If you don’t immediately need more space, it might make sense to wait out the crazy market right now, rather than make concessions. Otherwise, be ready to pay a premium.

“If you have to buy right now, you have to be realistic about the offers you’re putting in,” Morales says. “You’re not going to get a deal, you are likely going to pay well over the ask.” She says when she sold her own home earlier this year, she sold it in two days for $75,000 over her asking price.

To continue reading, please go to the original article here:

https://www.cnbc.com/2021/06/17/why-experts-say-you-might-want-to-wait-to-buy-a-new-house.html

A Basic Financial Planning Checklist

A Basic Financial Planning Checklist

 A realization that has only very slowly occurred to me, over 15 years in the world of financial planning, is that the most common financial planning mistake that I see people make is not so much a particular bad decision, but rather completely ignoring certain parts of financial planning.

In many cases, that shows up in the form of focusing too much on the investing part of the picture, while having some other critical financial planning need that is going unaddressed.

And that’s not terribly surprising. Investing involves thinking about upside — how your assets will grow (and how they could grow, if you make a high-risk bet and get lucky). That can be fun.

In contrast, many critical financial planning tasks involve thinking about downside. (What if you become disabled or die earlier than anticipated?) That’s less fun.

In addition, a lot of critical financial planning tasks look suspiciously like work.

What follows is just a brief checklist of financial planning topics, all of which should probably be addressed before spending much time thinking about exactly what is the correct allocation to international bonds or whether index funds are preferable to ETFs.

Insurance Planning:

Do you have health insurance? (And if it’s open enrollment season, have you checked to see whether there’s a different plan that might be a better fit for your household?)

To continue reading, please go to the original article here:

https://obliviousinvestor.com/financial-planning-priorities/

Getting the Goalpost to Stop Moving

 Getting the Goalpost to Stop Moving

Jun 7, 2021 by Morgan Housel

There aren’t many iron laws of money. But here’s one, and perhaps the most important: If expectations grow faster than income you’ll never be happy with your money. One of the most important financial skills is getting the goalpost to stop moving. It’s also one of the hardest.

First, a little story about the 1950s.

“The present and immediate future seem astonishingly good,” LIFE magazine’s January, 1953 cover story begins.

“The country has just lived through what was economically the greatest year in its history” it wrote. It had done this with “10 straight years of full employment, through new management attitudes which include an increasing realization that the well-paid worker, who does his job under healthy and agreeable conditions, is a valuable worker.”

Wealth came so fast to so many it was jarring. “In the 1930s I worried about how I could eat,” LIFE quotes one taxi driver. “Now I’m worrying about where to park.”

If these quotes don’t surprise you it’s because the 1950s are so often remembered as the golden age of middle-class prosperity. Ask Americans when the country was at its greatest and the 1950s is usually near the top. Compared to today? Different worlds, no comparison. The overwhelming feeling is: It was better then.

George Friedman, a geopolitical forecaster, summarized the nostalgia a few years ago:

In the 1950s and 1960s, the median income allowed you to live with a single earner — normally the husband, with the wife typically working as a homemaker — and roughly three children. It permitted the purchase of modest tract housing, one late model car and an older one. It allowed a driving vacation somewhere and, with care, some savings as well. I know this because my family was lower-middle class, and this is how we lived, and I know many others in my generation who had the same background.

There are two ways to debate a position: Asking whether it’s true and asking whether it’s contextually complete.

This version of the 1950s lifestyle is true in the sense that the median American family indeed had three kids and a dog named Spot and a breadwinning husband who worked at the factory and so on.

But the idea that the typical family was better off then than now – that they were more prosperous and more secure, by nearly any metric – is so easy to debunk.

That doesn’t mean those yearning for the 1950s are necessarily wrong. It just shows that something else changed in the last 70 years that created a gap between what happened and how people feel about what happened. And that something else is not complex: America’s wealth grew but its expectations grew more.

To continue reading, please go to the original article here:

https://www.collaborativefund.com/blog/goalpost/

Save Like A Pessimist, Invest Like An Optimist

Save Like A Pessimist, Invest Like An Optimist

Sep 2, 2020 by Morgan Housel

In 1984 Jane Pauley interviewed 28-year-old Bill Gates. “Some people call you a genius,” Pauley said. “I know that might embarrass you but …”

Gates deadpans. No emotion. No response.

“OK, I guess that doesn’t embarrass you,” Pauley says with an awkward laugh.

Again, zero reaction from Gates.

Of course he was a genius. And he knew it.  Gates dropped out of college at 19 because he thought a computer should be on every desk in every home. You only do that when you have relentless confidence in your abilities. Paul Allen once wrote about the first time he met Bill:

You could tell three things about Bill Gates pretty quickly. He was really smart. He was really competitive; he wanted to show you how smart he was. And he was really, really persistent.

But there was another side of Bill Gates. It was almost paranoia, virtually the opposite of his unshakable confidence.

From the day he started Microsoft he insisted on always having enough cash in the bank to keep the company alive for 12 months with no revenue coming in. In 1995 he was asked by Charlie Rose why he kept so much cash on hand. Things change so fast in technology that next year’s business wasn’t guaranteed, he said, “Including Microsoft’s.” In 2007 he reflected:

I was always worried because people who worked for me were older than me and had kids, and I always thought, ‘What if we don’t get paid, will I be able to meet the payroll?’”

Optimism and pessimism can coexist. If you look hard enough you’ll see them next to each other in virtually every successful company and successful career. They seem like opposites, but they work together to keep everything in balance.

What Gates seems to get is that you can only be an optimist in the long run if you’re pessimistic enough to survive the short run.

The best way for most people to apply that is: Save like a pessimist, invest like an optimist.

Let me try to convince you of each.

To continue reading, please go to the original article here:

https://www.collaborativefund.com/blog/save-like-a-pessimist-invest-like-an-optimist/

The 5 Most Important Money Lessons I Give My Residents

The 5 Most Important Money Lessons I Give My Residents

By Peter Kim, MD   Passive Income MD

A large part of my job is teaching. In fact, every day I teach both residents and fellows. The subject matter is mostly anesthesia-related, but I can’t help throwing in some financial lessons I’ve learned along the way.

Physician Contract Reviews

 We just don’t get any financial education in our normal training, and I feel it’s a great disservice, not only to our future careers but our lives as well. For this reason, unfortunately, it’s up to us to self-educate.

When I’m teaching my residents, I feel that it’s important to impart some of my own hard-earned knowledge, so they can avoid costly financial mistakes and ultimately go through life with less weight on their shoulders. Here is some of the best advice I can give any of them.

1) Read, Read, and Read Some More

As I mentioned earlier, we simply don’t get any this type of education in training or in school, so it’s up to us to seek out and consume the information ourselves. Two books that have shaped the way I think about money and life are Rich Dad, Poor Dad and The Total Money Makeover. As a starting point into setting yourself up the right way financially, you’d be hard-pressed to find two books better than these. Looking for more books? Check out my favorite financial and investing books.

There is also a plethora of good blogs out there with loads of helpful information.

We should always be in a state of learning. After all, how should we expect to be smart with our money if we haven’t dedicated any time to learn about it? The resources are out there, we just have to go out and feed ourselves.

2) Get a Handle on Your Debt

We all know this. Debt is bad… well, debt that doesn’t create more income for you or increase your asset value is bad. At least, we know it intellectually. But we often forget this in practice. I’ve heard many residents say, “I already owe so much in student loan debt, what’s a little more credit card debt?”

To continue reading, please go to the original article here:

https://thephysicianphilosopher.com/the-5-most-important-money-lessons-i-give-my-residents/?utm_source=rss&utm_medium=rss&utm_campaign=the-5-most-important-money-lessons-i-give-my-residents

Brain Meets Money

Brain Meets Money

Richard Quinn 

HOW OFTEN DO you think about money? Hey, you just did. Seriously, we think about money every day and sometimes every hour. Some studies say we ponder financial matters even more often than the old standby: sex.  We’ve been thinking about the stuff for a long time. Money goes back about 3,000 years. Paper currency can be traced to China in 700 BC. They didn’t fool around: Their currency stated that all counterfeiters would be decapitated. I’m guessing counterfeiting was rare.

Today, it costs two cents to manufacture a penny and almost eight cents to make a nickel. Result? Each year, we taxpayers lose about $85.4 million on the production of pennies and $33.5 million on nickels.

Gee, at that rate, those of us on Social Security could receive a $2-a-year raise if they made cheaper money. Who needs pennies anyway? Money is no more than a piece of metal or paper—basically worthless, except you can get stuff for it because the people who sell you stuff can get other stuff with the money you give them.

Does money make us happy? Benjamin Franklin didn’t think so. “Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”

The evidence suggests Ben was right, but try telling that to addicted lottery players. I recall a TV show depicting the impact of winning the lottery on people. Instead of making the winners happy, it often messes up their lives, mostly because they’re ill-prepared to handle the money and because they thought spending would make them happy.

One winner stands out in my memory. He bought several pieces of used heavy construction equipment just to have. He didn’t know the tax withholding on his winnings wouldn’t cover all of the tax he owed. He eventually lost all of his prize possessions and a great deal more to the IRS.

Another family lived in a trailer and, instead of moving, expanded it, bought each child their own ATV and gave each an allowance of $1,000 a month. The kids were ostracized at school and had to leave.

 “The conviction of the rich that the poor are happier is no more foolish than the conviction of the poor that the rich are,” offered Mark Twain. Indeed, if you Google the subject of happiness and money, you will find assessments from every point of view. But none concludes that money buys permanent happiness, only fleeting pleasure perhaps

To continue reading, please go to the original article here:

https://humbledollar.com/2020/02/brain-meets-money/

Five Reasons to Rent

Five Reasons to Rent

Humble Dollar

HOMEOWNERSHIP offers many advantages, as we detailed in the previous section. But there’s no guarantee you’ll make money, especially if you own a house for just a few years. Thinking of purchasing a home? Here are five caveats—which may prompt you to continue renting.

First, given the risk of declining property prices, you shouldn’t buy unless you can see staying put for at least five years and preferably seven years or longer. While it’s hard to imagine we’ll suffer another decline like that of 2006-12 any time soon, a smaller drop is entirely possible.

Second, homes are horribly expensive to buy and especially sell, which is another reason you need a long time horizon. There’s the mortgage-application fee, home inspection, title insurance and legal fees when you buy—and the 5% or 6% real estate brokerage commission and local transfer taxes when you sell.

Suppose your home’s price rises a few percentage points a year, but you end up selling after just five or six years. Once you figure in all the costs of buying and selling, you may not make money.

Third, owning a home involves greater hassle, with more bills to pay, maintenance to deal with and repairmen to call. If you’re renting, many of these problems fall on the landlord’s shoulders.

To continue reading, please go to the original article here:

https://humbledollar.com/money-guide/four-reasons-to-rent/