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Tag: Goals

It’s a New Year — But You’re Still Not Working with a Financial Planner?!

Written by support@seostats.com on . Posted in Fiduciary, Financial Planning.

We’re a few months into the new year (and new decade!) now. How are your resolutions to “do better” holding up so far?

If you’re like many people, despite your best intentions, there are probably a few things that have fallen by the wayside. There might be some bad habits you still haven’t broken, or some goals that you really want to achieve but still haven’t started working toward.

You might have even told yourself that 2020 was the year you were going to get your financial life together… but you’re still not working with a financial planner.

We might be coming off the excitement of a new year and settling into the gloom that hit in during the cold, dark months of February and March (at least in the Northeast!) — but it’s not too late to get your financial life on track and make great progress this year.

 

Why People Start Working with a Financial Planner

When I first meet someone who is interested in working with us , I always ask why they want to start taking better care of their financial well being now.

I want to know why they reached out when they did — and what changed or entered their life to motivate them to take the action of finally hiring a planner.

You can probably imagine some of the most common answers revolve around major life transitions. They started a family, got a new job, changed careers completely, moved across the country, or came into an unexpected bit of money from something like an inheritance or equity event at their company.

Other people start working with a financial planner because they simply get tired of feeling stuck (or worse, going backward). They say they’re losing track of everything as they try to manage it all on their own; they don’t feel in control or they’re really unsure of whether or not they’re on the right track (or how to get started at all).

These are some of the reasons people want to work with a financial planner. But what about the reasons people avoid having that conversation and beginning the process of putting a plan in place?

Here are the 3 main reasons why I hear people don’t want to work with a planner — and why I believe it’s worth reconsidering.

 

1. You Prefer to Avoid Talking or Thinking About Money

We all cope with discomfort and fear in different ways. For some people, their finances can feel scary (even when there’s nothing actually wrong!).

That fear can actually motivate people to reach out and ask for help… but for others, their coping mechanism is avoidance. They want to stick their head in the sand and pretend their money fears, worries, or concerns will simply go away if they ignore them.

Of course, this is never the case with our problems in life. And when it comes to money, ignoring your finances only makes problems bigger and harder to deal with when you do finally start paying attention.

If you prefer to avoid thinking about your mounting debt, bad money habits, or lack of action with your finances when you know it’s time to do something, you are creating an even more challenging situation for your future self.

Don’t put yourself in a difficult position later in life. The sooner you sit down and face the financial planning you’ve been avoiding, the sooner you’ll get yourself on the right track and moving toward success. It’s never too late to build better habits and pay attention to your money.

 

2. You Want to Do It Yourself

Some people don’t like the idea of working with a financial planner simply because they don’t see a need. Why not just manage your money yourself?

I understand the preferences of the do-it-yourself crowd the best out of all the people who tell me why they don’t want a planner. At one point, I thought I knew my own financial situation better than anyone else. I certainly cared about my financesmore than anyone else, too!

And why would I, a financial planner, need help? Wasn’t I the expert I was looking for? I had all of the training and certifications — I might even have had more than the person who I would hire!

But I quickly realized that the reason even financial planners need financial planners is that it’s really hard to objectively make decisions around your own money. We’re all much too close (and too subjective) to consistently think rationally and unemotionally about our own finances.

My wife and I needed someone to remove the emotions from the conversations around money, and to keep us grounded in reality. Having an independent, third party involved — who is also a fiduciary and is looking out only for our best interests — is priceless.

I understand the desire to DIY. But I think that says quite a bit, that even myself as the trained and certified expert needed to hire another trained and certified expert to ensure I made all the right decisions within my own financial plan.

 

3. You Don’t Have a Lot of Assets Yet

Many times, I’ll talk to people who truly want to work with a financial professional, but believe they don’t have enough money to do so. I understand why people think this — but it’s just not true anymore.

Traditionally, getting financial advice from an expert was something that was reserved for high net worth individuals. You could only have your own financial planner if you had a lot of investments and assets that the planner could manage.

Luckily, that has changed and the options for hiring a financial planner look radically different. There are now more ways than ever for people to get financial planning!

If you’re not sure where to start your search for a planner who will work with you, try professional associations like NAPFA, XY Planning Network, or Garrett Planning Network. All of these groups will help connect you with fee-only, fiduciary CFP’s who may not require asset minimums.

XY Planning Network’s members all specialize in serving Gen X and Gen Y, do not charge asset minimums, and who you can hire for a monthly fee that can range from as little as $50 to as much as $500. Don’t need ongoing help? Garrett Planning members offer hourly planning services.

No matter what your excuses have been in the past, know that the best time to get a financial plan created for you is now — and a financial planner can help you do just that. Working with a financial planner gives you access to knowledge, resources, and accountability to develop the habits and strategies required to reach success.

Looking for more specifics? Click here for our free guide to help you understand the questions you should be asking a potential advisor.

Prefer a quick video? Check out Episode 2 of our planning series “The Build” below to learn more about if you should be working with a financial planner.

Your Most Common Questions, Answered: We Have a Lot of Cash in the Bank, Now What?

Written by support@seostats.com on . Posted in Budgeting & Money.

As part of my initial meeting process with new clients, I always ask, “Why did you reach out to me today?”

Understanding people’s motivations and primary concerns helps me know what’s most important to them, and it helps guide our planning process. But it also allows me to see how universal some of our questions and concerns around money are.

In asking that question, what I’ve found is some of the same topics come up time and time again. Throughout this year’s blog posts, I’ll address some of these most common pressing questions to share the framework we use to solve these challenges and take advantage of opportunities.

Up first: let’s look at how to deal with having too much cash in the bank.

 

“We Have a Lot of Cash in the Bank. Now What?”

At first glance, this might not seem like a challenge or issue at all. Who’s complaining about having too much money?

While it’s a good problem to have, it does create a lot of questions that are hard to answer. Once you establish yourself, take care of obvious problems (like repaying credit card debt), and start earning more money, the question becomes, “now what?”

What’s the best thing to do with your money now that you actually have enough of it to make complex decisions around?

Not knowing what to do often leads to people amassing large amounts of cash with zero plans for utilizing it wisely. If you find yourself in this situation, here are some things to keep in mind to help you determine a strategy for the best ways to leverage this money in the bank.

 

Paying Off All Your Debt Might Not Be the Smartest Move

Commonly, people who have managed to save up a lot of money will start wondering if they should use that cash to repay all their debt — including their mortgage.

It’s natural for people to want to be debt-free and some pundits (see Dave Ramsey) feel getting out of any and all debt, regardless of what it is, is the only way to go.

But we advise people against rushing out to pay off loans like mortgages with low interest rates. While getting rid of high-interest credit card debt is probably in your best interest, hanging on to your mortgage and using your cash to build wealth in other areas could make more sense.

If you have a mortgage that is around a 3.75 percent interest rate, that is historically “cheap” money. Rushing to pay that off requires you to throw your cash into an illiquid asset — and takes away the opportunity to use those dollars on goals like building up your retirement accounts.

Not only that, but avoiding contributing to investments now means losing out on the compounding opportunity that comes with investing for the long-term. If you could be earning 7 percent in a 401(k) or IRA versus having a forced savings rate of 3.75 percent paying down debt, which would you pick?

If you want to build wealth, you may need to focus on building up your assets first rather than funneling all your cash into your house.

 

Building Up the Right Amount of Emergency Savings

You may have heard that you need to build up a rainy day fund, and that’s good advice. How much should you keep in that emergency fund, though?

The rule of thumb says to build up 3 to 6 months’ worth of expenses and keep that amount in cash in a liquid savings account. But I feel this guideline is much more of an emotional decision than a financial one.

You do need emergency savings. But how much depends on factors specific to your situation. Before determining the precise amount you should keep in reserves, consider things like:

  • How risky is your income stream? Is your work vulnerable to seasonality, layoffs, or economic downturns?
  • How reliable is the pay you receive: do you get a steady paycheck or does money ebb and flow depending on external factors?
  • Do you own any risky or expensive assets, like an older home that needs frequent maintenance and repairs?
  • How many people financially rely on you?

I find that, for most people, the “right” answer comes down to a number that provides them with a sense of comfort and security.

For example, does it feel okay to only keep $30,000 in the bank after you’re used to keeping a stash of $100,000? If the answer is, “no,” then don’t feel pressured to reduce your emergency fund to what the rules of thumb suggest is all you need.

If you are going to be up all night worrying, it’s just not worth it. Prudent financial management is not always about getting the highest return. It’s also about being confident in your plan and being comfortable with who you are.

 

Achieving What Matters Most to You, Now That You Can

Once you establish how much cash you truly need on hand to protect against emergencies and establish an investment plan that puts some of that extra money to work, consider turning to your goals and priorities.

Many of us get so focused on saving that we don’t even realize when we’ve hit the point at which we actually have enough cash available to use on things we’ve always wanted.

If you’re funding your retirement and investment accounts appropriately and managing your ongoing expenses well, actually using some of that cash to achieve your goals is not a bad thing. It might be time to consider taking the trip you’ve been dreaming of, or enrolling in cooking classes, or finally upgrading your 15-year-old car.

Spending money isn’t always the answer — but using your money wisely on things that matter to you or to achieve long-held goals may be a good way to go.

Do I Need Life Insurance? What to Think About Before You Decide

Written by support@seostats.com on . Posted in Insurance.

If you’re in your 30s, you’ve likely had someone — a friend, a person you met at a networking event, someone who cold called you out of the blue — try to sell you on life insurance.

They may use scare tactics to try and convince you to buy a policy, or they might have some arguments that make having life insurance seem like a responsible financial thing to do (which it may be!).

But how much insurance do you really need? And what if you don’t need it at all?

Let’s take a quick look to better understand life insurance, the real purpose of it, and whether or not you actually need it.

 

The Purpose of a Life Insurance Policy

Life insurance offers financial protection against you passing away early. If you were to die tomorrow, think about who would be financially impacted: your spouse, your children, and potentially other family members who may depend on some or all of your income.

Just like car insurance protects you against the financial liabilities that come with an accident and homeowners insurance against the pitfalls of owning a home, life insurance is a product that protects people who would suffer if your financial support suddenly went away.

What life insurance is not is an investment. (You wouldn’t call your car insurance an “investment,” would you? It’s similar with life insurance: it’s a product designed to do a specific job.) And, like with any policy, it’s something you might want to have… but hope you never have to actually use.

So how do you determine if it’s something you absolutely want to have? There are a few times when your need will be obvious.

Watch Episode 11 of The Build below to learn more about life insurance.

The Obvious Case for Life Insurance

Even if you’ve considered it before, getting an insurance policy — beyond the one you might have as part of your benefits package through your employer — is probably low on your priority list.

After all, life is busy and you have other things to deal with. Dying suddenly at a young age seems so unlikely; it’s easy to think that someone like you doesn’t need something like life insurance.

But if you have a young family or support your household financially in any way… you probably do need some coverage. Why? Consider what you’re insuring when you buy life insurance: you are making sure that the beneficiary of your policy would not face some kind of hardship if you were to pass away and no longer financially provided for them.

Knowing that this is the purpose of life insurance, it’s obvious that you need a policy if you have children. Minors under 18 certainly depend on your income, but even young adults who might be in college or looking to get on their own two feet that you still support might need to be beneficiaries on your insurance.

You may also want life insurance if you have a spouse or significant other. The death benefit can cover large liabilities like your mortgage, charitable donations, and general living expenses during a grieving period when life for the surviving spouse needs to be figured out.

 

Single with No Dependents? You Might Not Need a Policy

A good rule of thumb for life insurance is that if someone would struggle to get by in any kind of way if you (and your income) disappeared tomorrow, it’s time to consider getting a policy to protect that person (or people).

But what if you’re single, you have no dependents, and you don’t have any debts or liabilities that would pass on to anyone else should you pass away?

 In these cases, you might not need life insurance because there’s no financial hardship to insure against.

 

One Big Exception to the General Rule: Non-Working Spouses

There is somewhat of an exception here, though, and most people forget to consider it. Let’s say you’re married, but don’t work. Your spouse provides the household income. In this case, it’s obvious that your spouse would need a policy so that you would not face a financial hardship if they were to die.

But what about you? Do you need life insurance if you don’t work or earn an income?

Yes! Here’s why: the cost associated with replacing the care and work you provide in your household or to your children is huge. What would it cost to have a full-nanny replace your role as stay-at-home-parent? What about daycare, housekeeping, personal chef services, and so on?

Your working spouse would certainly face a hardship if something happened to you, and would need to replace your labor in some way. Even if you don’t earn a paycheck from an employer, you need life insurance so your spouse could use the death benefit to keep up with the additional expenses they’d likely face without you.

 

What to Do Next?

Once you evaluate your need for life insurance, you need to determine what kind of policy to get. (And of course, if you don’t need life insurance — you may be all set in this arena and don’t need to include this in your financial planning.)

Most people need term life insurance, not whole life or permanent life insurance. Term life insurance covers you for a set period of time, and you don’t have to pay premiums once that term expires. With whole or permanent life, on the other hand, you always pay premiums.

Look for a product from an independent insurance provider like LLIS. There are other independent companies out there, too, and you should feel free to work with one you feel most comfortable with. What you want to avoid are “captive” agencies, which only sell their own products. These include brands like Allstate, State Farm, and New York Life.

An independent provider can look at the entire marketplace and help you get the best deal, so that’s why you want to start your search with them. A good step to take is to request quotes and start comparing potential options to find the best one for you.

The Biggest Question You Might Ask About Social Security Benefits: To Wait or Not to Wait?

Written by support@seostats.com on . Posted in Benefits, Retirement.

There aren’t many absolutes in personal finance or financial planning. But when it comes to Social Security, you can be almost certain you’ll face this decision that requires you to choose:

Should you start taking Social Security benefits at 62 — or should you delay to 66 or even 70?

Here’s what you need to know to answer this complex question, and to get it right to make sure you maximize your retirement income.

 

How Waiting (or Not) Impacts the Amount of Your Social Security Benefits

Your “full retirement age” is the magic number when it comes to Social Security income. Right now, the Social Security Administration defines the full retirement age as 67.

But that doesn’t mean you have to wait that long to claim your benefit and start receiving income from Social Security.

In fact, you can file for benefits as early as 62. The catch? You won’t get your full benefit. That doesn’t kick in until full retirement age, so the sooner you claim your benefits, the less you receive monthly.

Whatever you choose, you can find your specific benefit amount by going to SSA.gov and using their calculators to help you estimate the numbers.

Here’s how the benefit amount breaks down each year once you turn 62. If your full retirement age is 67, your Social Security benefit is reduced by:

●       About 30 percent if you start collecting at 62.

●       About 25 percent if you start collecting at 63.

●       About 20 percent if you start collecting at 64.

●       About 13.3 percent if you start collecting at 65.

●       About 6.7 percent if you start collecting at 66.

Again, once you hit 67 you can get the full benefit you’re entitled to… but if you wait even longer, you get even more than your “full” benefit.

 

Should You Delay Taking Social Security? Traditional Wisdom Says Yes

For this reason, the common advice around this issue suggests to delay taking Social Security benefits for as long as possible (assuming you can afford to do so, meaning you don’t need this as a source of retirement income).

Every year after 67 that you wait to file, your benefit increases by 8% which provides an obvious incentive for waiting. You max out what you can receive once you hit age 70, however, so there’s no reason not to take your benefits at that point.

When you think about those 8% annual increases over the full benefit, it can seem crazy to consider taking the lowest possible benefit at 62.

But I believe waiting to file for benefits is not always the best thing to do, because nothing is guaranteed in life.

 

The Case for Not Waiting to Claim Social Security

Yes, it’s true: If you wait, you get a bigger payout… but there’s a breakeven point (in terms of age) that you have to hit to make waiting worth it. And you need to live to that age to receive a larger total amount of dollars from Social Security from waiting and losing out on potential income because you didn’t claim your benefits sooner.

While the average life expectancy might be increasing, there’s no guarantee that you personally will enjoy good physical and mental health to not just make it to 90 or more, but to enjoy the ride along the way. I don’t mean to be depressing, but it’s a reality we need to consider if we want to maximize our money.

Take a look at this quote from an Investopedia Article by Melissa Horton. Horton does a great job explaining this issue:

If we assume the full retirement age for a retiree is 65 and he or she chooses to begin receiving Social Security income at age 62, his or her full retirement age benefit of $1,000 may be reduced by 20%, leaving the retiree with $800 each month. If the retiree’s co-worker with the same birth date and similar earnings history elects to receive his or her benefit at full retirement age three years later, the benefit may equal $1,000 each month.

 For the first three years, the first retiree received a total of $28,800 (or $9,600 per year) while the second received nothing. Once the second retiree starts receiving benefits, he or she receives $200 more each month, or $2,400 more each year than the first retiree. The Social Security break-even age is 77, or 15 years after the first retiree elected to receive benefits. After this point, the second retiree earns more over his or her lifetime than the first.

In other words, you have to live to at least 77 before the decision to claim your Social Security benefits at 62 starts to become financially questionable. For the 15 years in between, it’s actually a smarter play than the person who waited it out in hopes of getting a bigger benefit.

While conventional wisdom says to wait as long as possible to claim Social Security, it’s worth taking a closer look at the issue in the context of your personal and financial situation before making a decision based on a blanket rule.

Filing for benefits early means you won’t get your “full” amount — but it also means you’ll start receiving your checks earlier, which may be when you need the funds the most.

To make a final decision on the best Social Security strategy for you, work with an advisor who can help by running projections and testing various scenarios so you can better understand potential outcomes of the choices you make around claiming your benefits.

5 Steps to Get Your Finances Ready for 2017

Written by support@seostats.com on . Posted in Financial Planning, Investing.

2016 has been one crazy financial ride. From record lows when the year opened to the DOW nearly reaching 20,000 before the last minutes of 2016 tick to a close, now is the perfect time to position your finances for success in the New Year.

Some of you may recall that the first 28 days of 2016 were some of the most dismal days Wall Street had seen in years. Fear crippled the markets and many investors wondered if there was any hope in sight. (CNN Money)

Fast forward 10 months and now investors are dealing with a new reality: record all-time highs. The DOW closed on December 23rd at just under 20,000 at 19,933.81 with the NASDAQ and S&P all showing huge gains as the year quickly races to a close.

As a long-term investor, daily gains and losses in the stock market shouldn’t have much of an impact on your investment decisions, but they can certainly cause you to ring your financial advisor to check in on your diversified portfolios and enjoy a conversation about what the rallying markets may mean for you personally.

Getting your finances ready for 2017 in today’s economic environment isn’t just smart, it’s a natural response to all the known and unknown changes ahead for the New Year. That being said, it’s also important to remain objective when making financial decisions and to not let fear or emotions guide your choices. Here are a few steps you can take right now to ensure you’re on the path to success in 2017.

1.     Take stock of where you are and write it down

How much are your investments worth? Now is the time to take a look and see how your portfolio performed this year. Any surprises? Despite the slow start to the year, 2016 has finished up strong.

2.     Review your debts

How much debt do you have and how are you doing with paying it down? Are you on track with your plan? This is the perfect time of year to celebrate the progress you’ve made so far to pay down certain debts and reset the game plan for 2017. Remember, it’s always good to pay down your highest interest debts first and then move on from there. Also, with borrowing rates headed up, don’t rush to pay down that low rate mortgage.

3.     Assess life changes and transitions

Do you have any major life changes on the horizon this year? Moving? New child? Retirement? If 2017 is going to be a transition year for you, better to get with your financial advisor sooner rather than later to assess your financial situation and make any necessary adjustments to help make your transition as smooth as possible and keep you on track to reach your financial goals.

4.     Check in with your emergency fund

Yes, your emergency fund needs a tune up too. Have you drawn from your emergency fund? Do you need to replenish it back to 3 to 6 month’s worth of expenses? Maybe you’re still building it – either way, check in to see where it’s at and make a plan to build up your emergency fund if it’s a little leaner than it should be.

5.     Recalibrate your financial goals

To prepare for 2017, now is the time to reset your goals for the coming year. Whether you have specific savings goals, investment objectives, or debt elimination, be sure to you and your family are on the same page about what you’re working towards in 2017. Keep your goals simple and give yourself two to three so you don’t overwhelm yourself. The trick is to set goals that are realistic, trackable, and ones that you’ll be able to hold yourself accountable to.

Reviewing your investments and making adjustments, revisiting your pay down plan for any debts you’re working through, planning for life transitions, giving your emergency fund a checkup, and recalibrating your goals are all areas a financial advisor can offer tremendous value to you and set you up for financial success.

Regardless of where the market are performing on any given day, setting yourself up for financial success at the start of the New Year begins with you and your personal situation. Don’t hesitate to reach out to your financial advisor to go through this exercise together.

It’s Urgent, But Is It Really Important?

Written by support@seostats.com on . Posted in Goals.

I recently read a great article in Entrepreneur Magazine titled “Stop Paying Attention to the Non-Urgent in Your Life. Learn How to Single-Task” by Matt Mayberry. The article discusses how we can more effectively deal with our never ending to-do list.

3 months into the launch of my business, single tasking (yes, not multitasking) has been vital to my productivity.

In the past, I prided myself on, as Matt Mayberry puts it, “the kind of productivity where you knock off 20 items from your to-do list while still managing to run 15 miles and respond to 20 emails.”  For the record, I couldn’t run the 15 miles (more like 3). The problem, summed up perfectly by Mayberry, is that “Even though multitasking may make you feel accomplished temporarily, it’s not a way to go about business or achieving your main goal”.

My to-do list grew exponentially when I started my business. The number of tasks checked off my list in a day became my barometer for success. Unfortunately, this wasn’t getting me closer to accomplishing my business goals.

I constantly see the same patterns with people when it comes to personal financial planning.
I have lost count of how many times I have heard, “I know planning is important, but it just keeps getting pushed to the bottom of my list”.

No one argues that you need to have an estate plan, figure out the proper levels of insurance for you and your spouse, or have a game plan for saving. The problem is that none of these items jump out at you and flash “urgent” like the text you just received, your sick child, or the leaky faucet in your kitchen.

How do you move forward with planning your future while keeping up with the day to day demands of life? For me, it boils down to two things: prioritization and focus.

 

Prioritization

Everyone is busy but we all have the same 24 hours in a day.

Take the time to step out of the race and look at what you are doing. Are you “putting out fires” or are you making progress toward your goals? We obviously can’t eliminate all of the urgent to do’s, because some of them, like a sick child, are important.

However, if you look hard enough, you will find tasks that are less important than protecting and planning for your family’s future.

Cutting down on Facebook or web surfing are easy ways to gain back some time.  Instead, use that time to start a conversation with a planner or lawyer about your estate plan.

 

Focus

Mayberry writes that “Once you’ve learned to give your undivided attention to that one thing —  to laser-focus on the important projects —  you will automatically shift into the flow. That’s because flow is how you get them done. You block out all extraneous noise, all phone calls, all menial tasks, all interruptions, and you just focus. You are able to sit and focus on that one task long enough to complete it. When you can work in the flow, you can accomplish anything.”

My job consists of times where I need to be out meeting clients and other times where I need be crunching numbers and analyzing data and trends.  These are two completely different tasks that I have learned I cannot combine.  For my analytical work, I set aside 1 hour increments (and I use a timer) throughout my day where I mute my ringer and stay off of the internet, email and social media.  It’s amazing how much I can get done when I am focused on only one task.

Next time you think about your personal financial plan or your future, step back and try to prioritize your to-do’s at hand and then focus on the ones that will help you achieve your goals.

How To Achieve Your Goals

Written by support@seostats.com on . Posted in Goals.

At Lake Road Advisors our business is built on helping our clients achieve their financial goals. This is no easy task as these goals can be extremely long term and very difficult to quantify.

So how do we do it?  By following these 4 steps whenever possible:

 

#1 Encourage Our Clients To Have SMART Goals

The SMART acronym first appeared in the November 1981 issue of Management Review in an article written by George Doran, Arthur Miller, and James Cunningham. It served as a framework to use when developing your goals:

·        Specific

o   The goal shouldn’t be “Save enough to pay for your child’s college”, but instead “I want to save $175,000 towards my sons college education so we can pay 100% of the tuition”

·        Measurable

o   Is the goal trackable, can you tell if you are on target?

·        Achievable

o   Is saving $175,000 realistic? Can you afford it?

·        Relevant

o   Does this fit with my overall goals? Is paying for my son’s education a priority for me?

·        Time Bound

o   Does the goal have a defined end date?

Incorporating these points will provide a solid foundation for developing your goals.

 

#2 Emphasize “Baby Steps”

Financial Planning industry expert Michael Kitces wrote a great article titled “The Importance Of Creating Small Financial Planning Goals” where he described how a Fitbit breaks down walking goals into manageable segments. Instead of trying to walk 1,825 miles in a year, try and walk 10,000 steps a day.

Here we apply this idea to the equally daunting task of saving for your child’s college education:

Can you save $175,000? Something that seems impossible to fathom now can becomes more attainable if we back into the goal and break it down into small pieces.  Having 18 years to invest and assuming a 5% return per year we would need to invest $6,221 annually. Breaking that down further, we would need to save $518 a month or $17 a day to achieve our goal. Saving $17 a day is reasonable for most people. Not to mention your child could go to a less expensive school, receive grants, scholarships, or other types of aid. Your once overwhelming goal has quickly become realistic.

In a recent Forbes article titled “How To Actually Reach The Goals You Set” Brett Steenbarger talks about how “the achievement of a goal tells us that our inspiring vision is indeed attainable, fueling the next set of actions. The bottom line is that we can actually achieve the goals we set by thinking big and acting small. Large aims can inspire us and keep us on a challenging path. Small, achievable goals can reward us and help us sustain the energy to traverse that path.”

 

#3 Start Now

The worst thing you can do with these large, almost inconceivable goals is nothing. The only thing that will guarantee you don’t meet your goals is to do nothing with them. There will be bumps along the road to achieving your goals that you will have no control over. You can control when you start, which should be now.

 

#4 Focus On The Process, Not The Short Term Outcome

Tony Van Dinther, President at Executive Fundamentals, Inc., is fond of saying “focus on the process, not the outcome” in his training classes.

This couldn’t be truer when it comes to long term investing. By nature, investing in the stock market is a roller coaster ride. There will be ups and downs. Taking a disciplined approach to investing by diligently rebalancing & reinvesting dividends and income are some of the core actions that will pay off in the long run.

Effective financial planning begins with goal setting. Well thought out goals will improve your chances of success.

Is This A Good Investment?

Written by support@seostats.com on . Posted in Investing.

Is now a good time to buy Corning?  What do you think about Apple?  Is Gold a smart investment?

As a financial planner and investment advisor I am often asked “Is this a good investment?” Here are 5 questions you should ask yourself before you move forward with making any investment.

1.      What is your goal for the money you are investing? How much are you hoping to earn on this investment?

Earning a return on your money is only part of the equation.  What do you want to do with the money? Build up your savings, set aside for a new home, a vacation, or make charitable donation? Do you have an exit strategy?  Is a 20% gain enough to achieve your goal or will you be happy with a 10% gain?

2.      Do you understand the downside risk associated with this investment?

The opportunity for a large gain always comes with the possibility of an equal or greater loss.  This is the risk/reward tradeoff.  There is no “free lunch” when investing.  Do you know what this loss is?

3.      What is your risk tolerance?

Everyone says they can handle risk until the market drops (ex. January 2016).  Make sure you understand that markets fluctuate often and sometimes with great volatility. Will you be comfortable staying the course and not selling your investment when this happens? If you can’t, then this is not the right investment for you.

4.      Do you understand the fee’s associated with this investment or product?

Is there a flat fee for this investment or is it sold with a commission?  How is the person selling you this investment incentivized?  Fees and incentives do matter and be sure to ask about both.

5.      How does this fit into your overall plan?

Is this investment more than 10% of your overall net worth?  If so, you may want to reconsider it’s appropriateness in your financial plan.

The next time you think about an investment first think how you answered these questions.

Learn more at www.lakeroadadvisors.com

Launch Day!

Written by support@seostats.com on . Posted in Financial Planning, Investing.

After working for 16 years in the financial services industry, I believe there is a better way to empower people to achieve their goals.

The traditional channels of receiving financial advice are overpriced and antiquated.  Today I am excited to announce the launch of Lake Road Advisors, a fee-only, independent, financial planning and investment advisory firm.

Lake Road Advisors marries intelligent technology with traditional, goal-based planning provided by a CERTIFIED FINANCIAL PLANNER™.  Successful financial planning does not have to be expensive or complicated, and Lake Road Advisors will show you how.

Thank you to everyone who has helped make this possible.  Today represents the achievement of one of my personal goals.  I look forward to doing my best in helping you achieve your Lake Road!

Learn more about Lake Road Advisors.