I’m a Financial Advisor: Here’s the First Thing I Tell New Clients To Do

I’m a Financial Advisor: Here’s the First Thing I Tell New Clients To Do

Andrew Lisa   Mon, June 26, 2023

The most universally applicable piece of money advice is to work with someone who gives money advice for a living. Capable and experienced financial advisors often join family doctors and lawyers as the most trusted and indispensable professionals in the lives of the clients they serve.

They guide their clients through debt reduction, estate planning, taxes, investing, entrepreneurial endeavors and the basic day-to-day management of their personal finances. Perhaps most importantly, they cut through the clutter, confusion and conflicts of interest that bombard people every day with misinformation through their phones, laptops and social media feeds.

Although the best financial advisors tailor personalized strategies that are unique to the individuals they serve, some money advice is universal. To learn more about the money moves that experienced industry professionals think will have the biggest impact, GOBankingRates asked a trio of financial advisors what they tell their clients to do right out of the gate as step No. 1.

They offer a range of perspectives. One works with high-net-worth individuals, another serves older clients and the third guides the youngest adults who are just learning the ropes. Here’s their main money advice.

A Wealth Manager Concentrates on Cash Flow

John M. Jennings is the president and chief strategist of St. Louis Trust & Family Office, a $15 billion wealth management firm, and an adjunct professor at the Washington University Olin School of Business in St. Louis in its Wealth and Asset Management graduate program. Jennings is also a Forbes contributor and author of “The Uncertainty Solution: How to Invest with Confidence in the Face of the Unknown.”

The first thing we do with new clients is to dig into their cash flow,” said Jennings. “What money comes in and what goes out? Understanding cash flow is foundational to all other planning. You can’t effectively design a financial plan, an investment plan, or an estate plan without understanding cash flows — both recurring and extraordinary items. It’s not sexy work, but having a handle on money’s ins and outs is essential for planning for financial success.”

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

https://finance.yahoo.com/news/m-financial-advisor-first-thing-110057313.html

This Is How the 1% Manage Their Wealth

Jaspreet Singh on the 75/15/10 Rule: This Is How the 1% Manage Their Wealth

Dawn Allcot   Sun, June 25, 2023

Finance YouTuber Jaspreet Singh (of Minority Mindset fame) recently created a popular video describing how the 1% manage their wealth. It all starts with increasing wealth through multiple streams of income.  One thing to keep in mind, however — the key is not so much how much money you earn, but all about how you spend and save.

Singh and other finance experts promote the 75/15/10 rule for budgeting. It’s a simple concept — and as long as you are making enough money to make ends meet, you should be able follow this simple formula.

Here is where your money should go based on Singh’s recommendations.

75% of Your Income (or Less) Should Be Directed to Living Expenses

You should try to organize your finances so that no more than 75% of your cash goes toward living expenses. This includes fixed expenses, such as your mortgage and car loan, as well as variable expenses like vacations, dining out and entertainment.

If you aren’t earning enough to cover your expenses — much less have 25% left over after your bills are paid — it’s time to look for ways to cut costs and increase your income.

You might review all your subscriptions and cancel some. You can downgrade to a less expensive car. In an extreme situation, you might want to move out of your apartment and live with family or friends while you save money or find ways to earn more money.

To boost your income, consider taking on a side gig or asking your boss for a raise.

15% of Funds Should Be Diverted to Investments

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

https://finance.yahoo.com/news/jaspreet-singh-75-15-10-192108826.html

Financial Goals That Are Easy To Stick To All Year

Financial Goals That Are Easy To Stick To All Year

June 19, 2023 By Cynthia Measom

Setting goals can be a key step in taking control of your finances. Putting a plan in place can help you stay on track and ultimately save more money. But financial goals can be hard to see through, and people often initially stick to their plan only to let those goals slide as time goes by.

To avoid giving up, here’s a tip: Instead of making your financial goals endless and challenging, take them month by month — and try to have some fun with each one. In a year, you may be surprised at what you’ve achieved financially.

Here are some ideas to get you started.

Save With a Bank that Tracks Your Spending to Improve Your Saving Habits

Milli Bank is an FDIC insured mobile bank that offers a 5.00% annual percentage yield (APY), so it’s already a great option to grow your money. But Milli is also known for its unique saving features. Milli allows you to separate your money into different Jars for different financial goals, so you can better visualize and keep track of your progress. The APY is current as of June 13, 2023, and is subject to change at any time.

Another important feature for those trying to set and stick to financial goals is Milli’s real-time spend tracking, which can show you how your spending affects your savings goals. Armed with this information, you can better understand your spending habits and where you need to make changes to meet your savings goals.

Comparison Shop To Find Better Deals on Services and Products You Use

You don’t have to tackle everything at once, but make it a goal each month to find a better deal on a product, service or interest rate. The first month, look at what you pay for internet service and see if you could pay less if you bundle it with cable and phone services. During month two, look at your credit cards and see if you could benefit from transferring a balance from a higher interest card to one with a lower interest rate. Or if you have stellar credit and payment history, call your creditor and ask for a lower rate.

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

https://www.gobankingrates.com/money/finance/money-goals-easy-stick-year/?utm_term=incontent_link_6&utm_campaign=1233965&utm_source=yahoo.com&utm_content=9&utm_medium=rss

I’m About To Retire: Here’s the Money Advice I Wish Someone Had Given Me

I’m About To Retire: Here’s the Money Advice I Wish Someone Had Given Me

Cynthia Measom   Sat, June 24, 2023

Many people view retirement as the day they’ll be able to kiss their job goodbye and live life at a more relaxed pace. However, if you don’t take steps to ensure that your retirement savings and investments are on track with your goals annually, leaving your job behind might come a lot later than you’d like.

Find out what money advice people on the verge of retirement wish someone had given them when they were younger, and see if it makes sense for your situation.

Get Life and Health Insurance Early in Life

Wayne Bechtol is a certified finance professional and board advisor at Fiona who is planning to retire in a few years. He said, “I did not know the benefits of insuring life and health early in life. By the time I realized its importance, I was past 30. Therefore, I lost out on the best years of life when the premiums would have been considerably lower if I had insurance during my 20s.”

Plan for the Unexpected

“Now that I’m about to retire, I realize how illness can become a major expense in later life,” said Karen Hoyt, author of “The Liver Loving Diet.”

She continued, “I certainly didn’t realize how a catastrophic diagnosis could hinder my retirement plans. While battling cancer, I lived on the edge financially for a few years. Thankfully, I was able to transition back into a career that I enjoy. Now, I plan on teaching for a few more years.

I hear from many liver disease patients who get caught in a health crisis. Their retirement may get put on hold, or they are unable to pay for even the most basic medical needs. I wish someone had told me how to plan for a catastrophic illness.”

Understand the Benefits of Compounding Interest

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

https://finance.yahoo.com/news/m-retire-money-advice-wish-120036843.html

Ask Before Quitting

Ask Before Quitting

Jonathan Clements  HumbleDollar  Jun 17, 2023

AS FOLKS HURTLE toward retirement, they often wonder whether they’ve saved enough, debate when to claim Social Security and fret about how they’d pay for long-term care. Make no mistake: Such issues are hugely important.

But amid these financial musings, we should also spare a thought for four other questions:

How can I transform myself from a diligent saver to a happy spender? This sounds so easy, and yet many struggle with it, including Ken Begley and including me—and including those who amassed vast fortunes, as Marjorie Kondrack recently discussed.

To be sure, we don’t have to spend our money to get pleasure from it. Simply sitting on a pile of dollar bills can deliver happiness, thanks to the sense of financial security it offers. Similarly, giving away money, whether to loved ones or to charity, can also deliver ample happiness.

Still, I think every diligent saver should ponder whether there are ways to spend more on themselves that could improve their retirement years. I have no clever strategies to suggest that’ll help you go from avid saver to joyful spender. But I’ve found that practice helps.

My advice: Don’t start with a big purchase—a super-lavish vacation or a luxury car. That’ll likely make you uneasy, and there’s a risk you won’t get much pleasure from the money involved. Instead, try buying some smaller items, which often deliver disproportionately greater happiness per dollar spent. If you part with a little more money than usual and it enhances your life, perhaps your attitude will slowly shift and you’ll find yourself enjoying the fruits of your earlier thrift.

What will get me out of bed in the morning? I’m a big fan of daydreaming.  Assisted by the internet, I muse about vacations I’d like to take, restaurants I want to try and musicians I’d like to see perform. Daydreaming costs nothing except time, and—I suspect—often delivers just as much pleasure as the real thing.

As you approach retirement, I’d encourage you to daydream about how you’ll use your time once you quit the workforce. Indeed, I think it’s worth creating a lengthy wish list. That wish list will no doubt include fun stuff, like trips you want to take and hobbies you might pursue.

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

https://humbledollar.com/2023/06/ask-before-quitting/

Staying the Course

Staying the Course

Adam M. Grossman    Jun 18, 2023

WHAT DO WALL STREET analysts, magazine editors, economists and academics have in common? They’ve all found it virtually impossible to make accurate market forecasts. That’s why Vanguard Group founder Jack Bogle gave this advice to investors: When markets go haywire, “Don’t do something. Just stand there.”

Warren Buffett has given the same advice. In 2008, here’s how he explained it: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

In the years since, we’ve endured additional political turmoil, another pandemic and another recession, and yet the Dow Jones Industrial Average now stands at 34,000.

The “just stand there” approach is supported by years of data. Study after study has found that investors do better, on average, when they avoid reacting to their investments’ periodic ups and downs, and instead just stand there. I share that view, but this is sometimes easier said than done.

That’s because—despite all the data—it just doesn’t feel like a satisfying strategy to submit to the whims of the market. What can you do to square that circle? Below are some suggestions.

Permanence. Technology commentator Tom Goodwin has pointed out how difficult it is to make predictions in the business world. Consider the music industry. After suffering a nearly 50% revenue decline due to the introduction of online music streaming, the industry defied expectations and bounced back. Revenue is now at an all-time high.

The newspaper industry appeared to be in a similarly tough spot after the internet made lots of news available for free online. Many newspapers did indeed fail. But some found new ways to make money. The New York Times, for example, is seeing revenue hit new records after several difficult years.

The lesson: Prognosticators don’t know the future. They don’t know which way industries, companies or individual stocks are going. But that, in a way, is a good thing. It means you can safely tune out these folks and avoid reacting to their (flawed) predictions.

Resilience. As I’ve noted before, we shouldn’t expect stocks to rise in the future simply because they’ve always risen in the past. Rather, we should expect stocks to rise because share prices, more or less, follow corporate profits.

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

https://humbledollar.com/2023/06/staying-the-course/

Coming Together - A Less Complicated Financial Life

Coming Together - A Less Complicated Financial Life

Mike Zaccardi  |  Jun 19, 2023

I GOT CAUGHT UP IN some weird investment fads during the recent era of 0% interest rates. With cash investments and bonds yielding almost nothing, I instead sought to pad my investment returns by opening new brokerage accounts to snag promotion cash, and by dabbling in digital currencies and newfangled alternative investments.

Result? I ended up with far too many financial accounts—and it became a burden to keep track of everything. Just a year ago, I had investments in obscure real estate deals, individual pieces of art, bottles of wine, stablecoins and other relics of the speculative pandemic-era mania.

What’s more, after leaving both my fulltime job and my teaching position at the University of North Florida, there were old retirement accounts and a health savings account (HSA) that I was lazy about rolling over.

I craved a less complicated financial life. Simplicity is bliss, as many HumbleDollar writers have noted, and I’m now firmly in that camp. Here are six key benefits I’m enjoying now that almost all of my investments are in one safe place:

1. Getting my weekends back. As my number of accounts grew, keeping tabs on everything became cumbersome. A proud bean counter, I’ve routinely updated my personal finance spreadsheet since I was a freshman at Florida State University in 2007.

But what used to take 10 minutes on a Saturday morning turned into something that felt like a chore. By the middle of 2022, logging into all those unique accounts to tally my net worth took north of 45 minutes. I sought to slim down that process starting at the end of last year.

2. Less wasted mental energy. Helping my future self by streamlining my finances now became mission critical. With all those taxable investment accounts, completing my 1040 tax return became brutal, especially when coupled with the headaches that come with filing taxes for a small business.

I also felt oddly stressed by the disarray in my financial life—and there were far too many emails from all those investment sites.

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

https://humbledollar.com/2023/06/coming-together/

How To Save Money and Still Enjoy Life

How To Save Money and Still Enjoy Life

Did you know that it’s possible to make great financial progress while you spend money on things you enjoy? Yep, you read that right.  You can figure out how to save money and still enjoy life.

It might be surprising to hear this in the financial space, but you worked hard to get to where you are. You already know saving money as a doctor is important. But you also deserve to enjoy some of the spoils and riches of all of the work you put in to go through college, medical school, and residency.

In the physician finance blogosphere, financial gurus will paint a dichotomous picture of only two possible money management options. Either you eat ramen for five years after you finish residency so you can meet your financial goals. Or you fall into the camp of YOLO hedonism, living it up, spending every dime and not saving anything.

This black-and-white approach skips the view that you can do a little bit of both.

You can be financially responsible for those first three to five years and for every year after that. AND, at the same time, you can actually enjoy life.

Saving money as a doctor is all about balance

I saw author Ramit Sethi speak before he made it famous on Netflix, and he’s all about “living the rich life.” Yet he teaches people important personal finance principles. These aren’t mutually exclusive concepts.

It’s possible to take care of your personal finance needs by paying your future self first. And you can also live the rich life as Ramit would say, or spend guilt-free as I would say.

It can be hard sometimes to find the line between “I actually can spend this money” or “Nope, I should have saved it”, but if you have a certain percentage diverted to your separate accounts first(investments, savings etc.), then it helps you know what’s safe to spend and enjoy that portion of your money.

I preach balance and moderation because I’ve seen too many doctors start judging themselves for their financial decisions, for not “saving enough.” Eventually, they become doctors who refuse to take vacation with their family because the cost of the trip added to the cost of taking time away from work feels like too much spending and not enough saving.

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

https://thephysicianphilosopher.com/mmm/how-to-save-money-and-still-enjoy-life/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-save-money-and-still-enjoy-life

America Has Less Than A Decade To Turn Itself Around

America Has Less Than A Decade To Turn Itself Around

Notes From the Field By Simon Black June 20, 2023

Well, that didn’t take long.

From the time the US government managed to sign the debt ceiling resolution, it took just thirteen days for the national debt to soar by nearly $600 billion.   At that pace, they added over $500,000 to the national debt every second.  The US national debt has now breached $32 trillion… meaning America’s debt-to-GDP ratio is now 121%. Historically, advanced nations tend to get into trouble when debt-to-GDP reaches around 90%. The US is way past that threshold — but I’ll return to that point in a moment.

First, any time there’s a discussion about the national debt, invariably some idiot says something stupid like “the debt doesn’t matter because we owe it to ourselves.”

This is one of these irrational aphorisms (like “silence is violence”) that people like to repeat over and over again until they believe it to be true. But it’s not true. The debt matters. But let’s first examine who owns it:

Foreign governments like China, Japan, and Saudi Arabia hold a combined $7.4 trillion of US debt.

The Federal Reserve owns $5.1 trillion of US debt.

Social Security owns another $2.7 trillion of US debt, which of course is money owed to American retirees. Similarly, the Military Retirement Fund holds about $1.36 trillion.

State and local governments hold about $1.55 trillion combined in US debt.

Mutual funds own another $2.84 trillion.

Banks own trillions worth of the national debt. Banks buy US government bonds with their depositors’ money, i.e., YOUR money.

JP Morgan Chase alone owns about $300 billion worth of US government debt. Silicon Valley Bank famously held about $120 billion of US government debt before they went bust.

Even the Federal Deposit Insurance Corporation, which is supposed to guarantee bank deposits up to $250,000, owns about $128 billion worth of US government debt.

Then there are countless businesses and individuals around the world who own US government debt, simply because Treasury Bonds are considered “risk free”.

Now, when people say that “we owe it to ourselves”, they mean that most of the debt is NOT owed to foreigners. And this is true. Foreigners own just under 25% of the debt.

But does that make it OK to default on the other 75%? Is it somehow acceptable to default on banks across America, which bought US Treasuries with their customers’ money? Is it OK to default on 50+ million Social Security recipients? Or military retirees?

That’s why the “we owe it to ourselves” crowd is completely delusional. They seem to think that it doesn’t matter if the government defaults on, say, the Federal Reserve, or Social Security. But doing so would cause disastrous consequences — global economic meltdown, national social crisis, etc.

So, in order to avoid a major catastrophe, the debt needs to be repaid.

But with the national debt at 121% of GDP, is repaying it even possible anymore?

Technically, yes. And it all comes down to growth.

Back in the 1980s and 1990s, the US economy grew an average of 3.3% per year after adjusting for inflation; economists call this ‘real’ GDP growth.

But real GDP growth since 2000 has been much lower, averaging just 2%. And it turns out that the 1.3% difference in growth has had an enormous impact.

To give you an example, if real US economic growth had remained at 3.3% for the past 20 years, government tax revenue (which averages ~18% of GDP) would have grown substantially.

Along with some very modest spending restraint, budget deficits would have melted away over the past two decades, and America’s debt-to-GDP ratio would today be less than 50%… and falling.

And by 2033, the US national debt would be zero. Social Security would be completely funded. The US would have no financial challenges whatsoever. And the US dollar’s dominance would be sacrosanct.

Economic life today would be a completely different reality… if the US economy had only grown more quickly.

It’s not like an additional 1.3% growth isn’t achievable; again, the US consistently hit this number for decades.

You’d think that politicians would understand something so obvious, and that they’d do everything in their power to maximize growth. They’d embrace capitalism, cut red tape, create incentives for production, support small businesses, make taxes more efficient, etc.

Or at a minimum, they’d simply stay out of the way.

But instead, they do the opposite. They paid people to stay home and not work. They single out critical sectors (like energy companies) and punish them. 

They constantly threaten businesses, invent new regulatory burdens, stifle innovation, and attempt to systematically destroy capitalism, brick-by-brick.

So, no, based on current trajectory, it looks like the debt problem will keep getting worse… until the catastrophes of default are unavoidable.

The federal government has already acknowledged that Social Security’s trust funds will run out of money in about 10 years. This means that, at best, America has less than a decade to turn itself around.

Again, technically this IS possible. But time is running out. And this is why it makes so much sense to have a Plan B.

To your freedom,  Simon Black, Founder   Sovereign Man

https://www.sovereignman.com/trends/america-has-less-than-a-decade-to-turn-itself-around-147721/

20 Tips To Stay Financially Healthy Without Sacrificing What You Want

20 Tips To Stay Financially Healthy Without Sacrificing What You Want

Cameron Huddleston   Tue, Jun 20, 2023,

If you're trying to live on a budget, you might not feel like you can have the things you want.

But you don't have to resign yourself to living a bare-bones existence if your budget is tight -- it's possible to live on a budget and get some of the stuff you want.

Create a Budget That Prioritizes Needs

If your income is limited, make sure it covers your needs first. "Food, shelter, clothing and utilities are needs," said Donna Freedman, author of "Your Playbook For Tough Times. "The rest is just a series of wants."

Creating a budget can help. List the expenses you have to pay to survive. Add them up, and then subtract them from your income. If there's not much left over, you might have to make some sacrifices. Don't think of cutting out wants to cover needs as deprivation, though -- think of it as a smart use of available funds, Freedman said.

Build an Emergency Fund

If you're living on a budget, you might not think you can afford to set aside money each month in an emergency fund. But would you be able to afford an unexpected cost without savings?

"The thing that keeps you out of debt is to find room in your budget to grow your savings," McClary said. You won't be able to build your savings quickly, but if you can stash away a little each month, you can fall back on your emergency fund rather than go into debt when something unexpected happens.

Take Our Poll: What Kind of Money Advice Would You Most Trust From a Celebrity Expert Such as Warren Buffett, Mark Cuban or Suze Orman?

Tackle Your Debt in Smart Ways

When you're struggling with debt, you don't want to just keep paying the minimum balance on what you owe. However, you may not be able to afford much larger payments, so you should look at other smart ways to tackle your debt. A personal loan could consolidate that debt into one set regular monthly payment.

Take Advantage of Tax Breaks

If you're a low-wage worker, take advantage of tax breaks when you file your tax return -- such as the earned income tax credit. To qualify for the 2022 tax year, your income must fall below certain limits: from $16,480 if you're filing as single, head of household or widowed with no children, to $59,187 if you're married filing jointly with three or more children.

If the credit you receive is more than the taxes you owe, the IRS will refund you the difference. That tax refund can be used to help pay off debt, build an emergency fund or cover additional expenses.

Eat at Home

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

https://finance.yahoo.com/news/20-tips-keep-finances-order-173104250.html

Millennial Money: Should You Financially Support Adult Kids?

Millennial Money: Should You Financially Support Adult Kids?

Elizabeth Ayoola of NerdWallet  Mon, June 19, 2023

Some parents will tell you firsthand there’s no expiration date on this raising kids gig. For some, that means they extend financial help to their kids into adulthood. When I was 21 and got into a master’s program at a college of my dreams, my mom swooped in to help me pay for my degree. Many parents have been kind enough to do this and more.

When I say “many,” I’m backed up by a 2023 survey from Savings.com that found 45% of parents with a child 18 or older spend an average of over $1,400 per month supporting their kids financially, excluding adult kids with disabilities.

But is this financial support always a good idea? A certified financial planner and a therapist who both have experience in this department share their thoughts.

Why Parents Support Adult Kids

There are many reasons a parent may choose to support their adult kids. Disabilities and wanting to help them achieve major life milestones are a couple. Shelmeshia Hill-Brown, the CEO of Wholistic Resolutions LLC in Chesapeake, Virginia, is a social worker and therapist who works with parents who financially support their adult kids. A major theme she sees is parents helping pay for school, especially since the pandemic. Buying a home and exploring infertility treatments are other reasons her clients financially support their kids.

While some parents offer financial support because they want to, others feel obligated even when it’s financially inconvenient. Sometimes, the obligation stems from guilt of not preparing their kids for financial independence early on, Hill-Brown says.

“They didn’t do that one-on-one time with them, to sit down and actually teach them,” she says. “But a lot of that also stemmed from, it never (being) done with them, as well, so they were learning along the way, and it made it a little bit more challenging to sit down and come up with a plan to implement with their own children.”

Risks Of Supporting Adult Children

Supporting your kids can be satisfying, but it also may be detrimental if you’re not financially secure. It also can affect retirement savings, which many Americans already have concerns about. Fidelity’s 2023 Retirement Savings Assessment tells us 52% of American households may not be able to cover essential expenses in retirement. And roughly 50% even plan to work during retirement.

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

https://www.yahoo.com/lifestyle/millennial-money-financially-support-adult-012416588.html