Tax laws may not be flashy, but understanding them can tilt the balance for your family’s finances and peace of mind. I am digging into the details of the much-talked-about “One Big Beautiful Tax Bill”, a huge piece of tax legislation that is set to impact families, retirees, and investors across the country. I break down the most important highlights from the massive 870-page bill, focusing on what really matters for everyday listeners: permanent income tax brackets, bigger standard deductions, expanded SALT limits, and significant new deductions for seniors. Tune in for clear, actionable insights on the changes coming to your taxes, and learn how to make these updates work in your favor. Outline of This Episode [04:27] Tax act extension highlights.[07:22] Inflation adjustment for tax brackets.[10:38] Tax deduction and SALT cap changes.[13:23] Maximize your deductions and minimize taxable income.[18:53] Estate tax and deductions update.[22:08] Permanent deductions and brackets.[23:45] Tax benefits for families. Tax Brackets and Standard Deduction: More Certainty, Bigger Benefits One of the most interesting aspects of the One Big Beautiful Bill (OBBB) is the permanent extension of the income tax brackets Americans have become accustomed to since the Tax Cuts and Jobs Act (TCJA) of 2017. Instead of the cliff that was looming at the end of 2024, current rates (10%, 12%, 22%, 24%, 32%, 35% and 37%) are now here to stay. This certainty means families, investors, and business owners can plan with clarity, knowing that the 10% and 12% brackets will not suddenly vanish. But there’s more: in 2026, the 10% and 12% brackets will receive extra inflation adjustments, leading to a few hundred dollars of potential tax savings. While many American households may not climb out of the 12% bracket, those who do will benefit even more. Another major win is the increase in the standard deduction, now $31,500 for married couples filing jointly and $15,750 for single filers, starting in 2025. Add in automatic inflation adjustments, and the vast majority of taxpayers are now better off taking the standard deduction rather than itemizing, unless big deductions, like SALT, tilt the scale. The Expanded SALT Deduction Under OBBB, the State and Local Tax (SALT) deduction cap explodes from $10,000 to $40,000, restoring much of the pre-2017 advantage. For married couples with large property and state income taxes, this unlocks greater ability to itemize rather than default to the standard deduction. But this expanded cap begins phasing out for adjusted gross incomes above $500,000 and is gone by $600,000. Smart, ongoing tax planning, tracking income, maximizing deductions, and timing bonuses or retirement contributions can make the difference between using the full deduction or losing out. Enhanced Deductions for Those 65+ For retirees, the bill introduces a temporary enhanced standard deduction: if you are over 65, you can deduct an additional $6,000...
Most investors have been ignoring international stocks lately because the US market has been performing so well—but that strategy might backfire this year, with international markets significantly outpacing American stocks. In this episode, I dive into why diversifying globally is not just smart investing; it is essential for long-term wealth building. We explore how the US currently dominates 61% of world market capitalization, but history shows this was not always the case—and it will not necessarily continue. I share four key reasons international investing should be part of your portfolio: it reduces geographic risk when any one country hits turbulence, gives you access to high-growth emerging markets that have delivered spectacular returns, protects you through currency diversification, and helps overcome the natural tendency to only invest in familiar companies. The numbers tell a compelling story—while the S&P 500 is up around 12% this year, international developed markets are up nearly 30%, and some individual countries have delivered returns of 50-90% in recent years. Whether you are completely US-focused or wondering how much international exposure makes sense for your situation, this episode provides the data and reasoning you need to build a more resilient, globally diversified portfolio. I also touch on an interesting parallel between portfolio diversification and gut health—turns out both benefit from variety and balance. Outline of This Episode [01:12] The importance of the gut microbiome for health.[03:42] International markets surpass US performance right now.[06:24] International diversification mitigates geographic risk.[10:25] A globally diversified portfolio balances volatility and gives opportunity for growth.[13:49] Invest internationally to protect against domestic currency depreciation.[15:13] Why to overcome a behavioral home country bias.[17:06] Review your health and financial diversification. Building a healthier, more resilient investment portfolio. Broadening your approach—whether it is what you eat or where you invest—can improve your long-term outcomes. Did you know that we all have an ecosystem of microbes living within our intestines? Science increasingly shows that a highly diverse gut microbiome is linked to better health, well-being, and more healthy years well into old age. A thriving gut health requires at least 30 different types of plant-based foods each week. The greater the diversity, the more kinds of helpful bacteria can flourish, supporting everything from digestion to immunity. Just as variety improves gut health, diversity is equally essential in investing. Many Americans have opted to remove international stocks from their portfolios, citing the recent dominance of U.S. markets. I want to push back on this trend, with these important points: The Shifting Sands of Market Dominance: As of early 2024, U.S. markets make up approximately 61% of the world’s capitalization. The next-largest market, Japan, accounts for only
We all have some worries, those everyday anxieties that creep into our lives—money, kids, jobs, and adding more stress to your life in the form of an investment portfolio can seem like too much at times. So this week, I am sharing how understanding one key financial theory can transform your approach to investing and seriously lower your stress. This episode takes you through the groundbreaking work of Eugene Fama and the efficient market hypothesis, explaining why trying to outguess the market is usually a losing game. I am also sharing how, by trusting the power of the market and building your strategy around solid, evidence-based principles, you can ditch investing anxiety and set your family up for long-term success. So if market swings keep you up at night or you are looking for a more peaceful way to manage your portfolio, tune in for a fresh perspective and actionable advice on taking the stress out of investing—once and for all. Outline of This Episode [00:00] Your foundation of knowledge to experience stress-free investing. [05:58] Understanding Efficient Market Hypothesis (EMH). [09:40] The power of market consensus. [11:55] How fast does the stock market react? [13:12] Efficient market hypothesis simplified. [17:27] The myth of market-beating funds. [19:22] Reduce investment stress by demystifying the market. Does Investing Have to Be One More Worry? Retirement account fluctuations, big market drops like those in 2008, COVID-19, and trade war-related selloffs are enough to send anyone’s blood pressure soaring. One of the most important concepts in modern finance: the Efficient Market Hypothesis (EMH), developed by Nobel laureate Eugene Fama. In simple terms, the EMH says that all the available information about any publicly traded company is already reflected in its stock price. Let’s use Apple as an example. Every day, millions of shares, worth billions of dollars, change hands, each trade representing someone who thinks Apple is fairly priced, and someone else who disagrees. Crucially, both buyers and sellers have access to the same information. No one has a crystal ball; everyone’s predictions about future sales and profits are just that—educated guesses. Why Beating the Market Is So Hard In a 20-year analysis of actively managed mutual funds, those run by managers trying to beat the market through skillful stock picking. Of the 1,667 funds analyzed on January 1, 2004, just 48% were still around 20 years later (the rest closed or merged after poor performance). Of those survivors, only 16% managed to outperform the market—a sliver of winners, and no guarantee that their outperformance was due to skill rather than luck. Over longer periods, the odds get even worse. The market’s efficiency means that news, good or bad, gets priced in fast. By the time you read about a hot tip or see a...
Bitcoin and gold are two assets often hailed as safe havens and reliable stores of value. I explore whether bitcoin and gold really deliver the security investors hope for, or if, instead, they are more about speculation than true investment. I am helping you to look at the hard data and science behind financial decisions. Whether you are curious about market volatility or searching for a dependable way to safeguard your wealth, this episode is packed with practical insights about the pros and cons of investing in Bitcoin or gold. Outline of This Episode [06:05] Bitcoin and gold are speculative, limited by supply and demand. [09:29] Bitcoin is an unreliable store of value. [13:57] Volatility and diversification in investing. [16:58] Is gold really a safe haven for your money? [20:18] Gold commercials push for sales due to high commissions, not safety. [22:30] Investing relies on data and science to build successful portfolios, focusing on controlling taxes, expenses, and risk. Finding Safe Havens for Your Money What makes you feel secure? Fresh from a nine-night family trip to a volleyball tournament in Dallas, I have realized that my real safe haven is not a lockbox or a password, it is my home and the daily routine I return to. More than that, my family represents my ultimate store of value, the core “asset” I am committed to nurturing year after year. For me, investing is just one facet of a broader stewardship, protecting not only wealth but also the relationships and routines that bring lasting fulfillment. Bitcoin is a Volatile Gamble Clients often ask me, “Can Bitcoin act as a reliable store of value?” so I’ve dug into the numbers. Since 2010, the annualized volatility of Bitcoin has been a staggering 76.9%, nearly five times greater than the already-risky Russell 3000 index, which clocks in at 15.8%. Over the same period, Bitcoin has endured 27 separate 10% drops, 10 plunges of 30% or more, and five catastrophic 70% crashes. By contrast, the mainstream US stock market has only seen six 10% drops and a single 30% drawdown. Investing in bitcoin with this type of volatility is not a store of value. Investing in Bitcoin is speculation. The wild swings may excite thrill-seekers, but anyone seeking stability is likely to be disappointed. Gold as a Safe Haven What about gold, the classic safe-haven asset? Gold has enjoyed some positive years, up 60% of the time since 1970, but it is hardly a guarantee. That means in roughly four out of every ten years, gold investors have faced losses. Meanwhile, the S&P 500, ironically, the very market from which gold investors typically flee, has delivered positive returns 80% of those years. Plus, the marketing of gold is driven by high-commission sales tactics, not genuine concern for investor safety. Beware of those “buy gold now” ads; they exist to line the pockets of sellers, not to deliver real security to buyers. The Science of Investment Security Rather...
Let’s unpack six of the top retirement misconceptions, from whether it is okay to splurge in retirement, to the necessity of paying off your mortgage before you retire, and the real risks that retirees face beyond just a stock market crash. With a focus on helping family stewards make smart decisions for a secure financial future, I share practical advice, real-life scenarios, and encouragement to help you confidently prepare for and enjoy your retirement years. If you want to separate fact from fiction and build a retirement plan that truly fits your life and goals, then this episode is for you. Outline of This Episode [04:45] Debunking common myths. [09:43] Donate now for tax benefits and immediate impact. [10:54] Spending in retirement is encouraged to enjoy life and create memories, rather than hoarding savings. [17:34] Diversified portfolios mitigate financial risk during market downturns. [20:12] Stay vigilant against fraud by protecting your personal information. How Rethinking Retirement Myths Can Help You Build Wealth, Live Generously, and Enjoy a Fulfilling Retirement Retirement is often framed as the finish line in your financial journey, but the path leading up to and through that milestone is cluttered with well-intentioned advice, social media sound bites, and downright misleading myths. As Scott Wellens, certified financial planner and host of the Best in Wealth podcast, points out in episode 260, it’s time for successful family stewards to challenge conventional wisdom and make decisions grounded in reality, not rumors. Let’s unpack and expand on six of the most common retirement myths, using Scott’s insights to guide your way toward a smarter, more satisfying retirement. Myth #1: “It’s Not Okay To Do a Big Splurge” Many savers believe that a single splurge in retirement, a long-awaited RV, a dream vacation, or a lavish family gathering, could derail their entire retirement plan. If you’ve saved diligently and want to use a portion for a one-time purchase, the impact on your annual withdrawal can be minimal. For those following the “4% rule," buying a $50,000 RV from a $3 million portfolio reduces sustainable annual withdrawals by only about $2,000, a small sacrifice for a lifelong dream. Retirement is about enjoying the fruits of your labor. With proper planning and a clear understanding of your cash flows, strategic splurges are not only possible but can enrich your retirement experience. Myth #2: “It’s Best to Leave Money to Charity After Death” It’s noble to want to support causes after you are gone, but waiting to give can rob you of witnessing the impact your generosity brings. Giving while alive has both tangible and intangible benefits: not only do you receive immediate tax deductions and may reduce potential estate taxes, but you also get a front-row seat to the good your money is doing. A thoughtful plan lets you balance living well and giving generously today, maximizing both legacy and personal fulfillment. Myth #3: “You Should Spend Less in...
In this episode, inspired by my own family life, I am exploring the "holy trinity of assets": time, health, and money. Financial wealth alone does not guarantee a fulfilling future; you also need to be intentional about your health and your relationships. I share practical ways to extend the magical period of life where you can enjoy all three assets, without sacrificing your well-being in the pursuit of wealth. Tune in to hear my strategies for prioritizing your health, making the most of your time, and building wealth that enriches every stage of life. Get ready to rethink your priorities and be inspired to make changes that will let you enjoy not just a long life, but a long life full of vitality and purpose. Outline of This Episode [00:00] My perspective on how to prepare for life's best stage [05:35] The first stage of Life is youth: abundant time and health, but little money [09:35] Stage two: Prioritize health over wealth, but balance both [11:15] Focus on the big health priorities: exercise, eat better, and sleep better [16:03] How to spend when markets are chaotic [19:44] Prioritize key aspects of life to improve well-being When you think about building wealth and securing your future, what comes to mind? For most, it's a picture filled with investment portfolios, retirement accounts, and property. But money is just one piece of a much larger puzzle. To truly thrive and make the most of our time on earth, we must learn to value and actively nurture not just financial assets but also our time and our health. The Three Stages of Life: Youth, Midlife, and Old Age Tony Isola’s article, "The Holy Trinity of Assets," divides life into three main stages: Youth: This is a period rich with time and health. As kids, we possess endless energy and countless hours to fill, even if we are broke. Despite lacking financial resources, we are wealthy in ways money cannot buy. Midlife: For many, midlife brings growing financial stability and, often, good health. The catch? Time becomes scarce. Pursuing career goals, raising families, and climbing the professional ladder quickly fill our calendars. Old Age: Retirement can bring a return of time and (hopefully) sufficient money. However, health often begins to slip. The dreams of finally enjoying life can be hampered by physical limitations that decades of neglect may have fostered. There is a magical, fleeting window between midlife and old age when you can possess all three assets: health, time, and money. The real goal is to extend this stage as long as possible. Actionable Strategies for Extending the Best Stage We need to be disciplined and intentional to maximize this golden intersection of good health, time, and wealth. Here’s how: Prioritize Your Health Like Your Money. Many high achievers invest tirelessly in growing their financial resources, but your health deserves the same, if not more, attention. When...
Do downturns in the stock market inevitably lead to down years? On the show this month, I am walking you through an analysis of U.S. market trends over the past two decades, illustrating how downturns, even severe ones, often do not spell disaster for annual returns. I will also share what savvy family stewards can do to weather these turbulent times and potentially capitalize on them. From practical strategies like Roth conversions and strategic rebalancing to steering clear of emotionally driven decisions, this episode is packed with insights to help you take family stewardship wealth to the next level. Tune in to see how a long-term, data-driven outlook can lead to more confident investing, regardless of market swings. Outline of This Episode [3:31] Do downturns lead to down years? [8:22] This is a volatile year for US stocks, but international companies did better. [11:44] Stay invested; the market rebounds quickly. [14:15[ Post-crash market rebound patterns. [18:43] My guide to strategically rebalancing your portfolio. Understanding Market Fluctuations Between 2005 and 2024, the U.S. stock market witnessed only three negative years out of twenty, a testament to its resilience. Despite experiencing several downturns during those years, market recovery was the norm. For instance, although 2020 began with a staggering 35% downturn due to the COVID-19 pandemic, it ended 21% up. Similarly, in 2011, despite a 20% downturn during the year, the market concluded with a positive return. This historical perspective highlights the fleeting nature of downturns and underscores the importance of maintaining a disciplined approach to investing during turbulent times. A critical question for investors is whether downturns inevitably result in negative annual returns. Over the past twenty years, analysis reveals that downturns rarely dictate an entire year's trajectory. 17 out of the last 20 years ended positively, despite intra-year downturns ranging from 6% to as high as 35%. The takeaway here is significant: short-term market fluctuations do not always translate into negative returns, emphasizing the importance of a long-term perspective and patience. Why Staying the Course Pays Off Many investors, spooked by temporary market declines, resort to withdrawing their investments, potentially locking in losses. Instead, remaining invested allows one to benefit from eventual recoveries. Data shows that three-day drops, like the 11% decline recorded recently, are usually followed by substantial gains over the subsequent year, three years, and five years. Investors who maintain discipline through these downturns often see their portfolios grow significantly when the market rebounds. Practical Strategies for Navigating Downturns For those unsure how to act during a downturn, consider these proactive measures: Avoid Constant Monitoring: Constantly checking your investment portfolio during a downturn can lead to emotional decision-making. Once your strategy is in place, trust your plan and avoid frequent account reviews that can heighten anxiety and fear,...
Did you know that you can pay someone to give you advice on what to bet on? They can look at historical data like rushing and passing yards, touchdowns, and more—but so can we. Honestly, historical data can only tell us so much. If you bet on a game, you are really making a lucky guess. Is it really so different with the stock market? When it comes to predictions—whether for the Super Bowl or the S&P 500—there is a lot of uncertainty. So, let’s break down how predictions are made and whether or not they should guide our investment decisions. [bctt tweet="Predictions are everywhere—whether for the Super Bowl or the stock market. But how reliable are they? In episode 257 of Best in Wealth, we explore the dangers of betting on expert predictions and why diversification is key for your portfolio." username=""] Outline of This Episode [1:13] The Super Bowl: What you can bet on? [2:30] Why are we trusting betting experts? [7:50] Expert predictions for 2025 [11:32] Reviewing predictions from 2024 [18:06] How do we build a portfolio? Expert predictions for 2025 Most of the top analysts—Oppenheimer, Wells Fargo, Deutsche Bank, and others—are bullish, predicting that the S&P 500 will rise in 2025. The consensus seems to suggest that the market will average a 10% return, which has been the long-term norm. Oppenheimer Asset Management stands out with an optimistic prediction of 18.4%, implying that 2025 could be a great year for the market. However, these predictions come with a significant caveat—the stock market, especially the S&P 500, is notoriously volatile. We have seen massive swings in the past, from a 38% drop in 2008 during the Great Recession to a 25% rise in 2024. BCA Research, on the other hand, predicts a 25.8% drop, highlighting just how different expert opinions can be. This stark difference—43% apart between two top analysts—raises an important question: if the experts cannot agree, how reliable are their predictions? It is a reminder that while these predictions may be based on data, the unpredictability of the market remains ever-present. [bctt tweet="Experts predict the future, but how often are they right? In episode 257 of Best in Wealth, we dive into the unpredictability of stock market forecasts and share why building a diversified portfolio is your best bet for long-term success." username=""] Reviewing predictions from 2024 Did the experts hit the mark last year? The S&P 500 went up around 25% (with dividends) and 23.3% without dividends. Oppenheimer, the most bullish of the experts, predicted a modest 8% increase, but the market ended up being nearly three times better than that! Many other firms—Goldman Sachs, BMO, Bank of America—also predicted positive returns, but the actual outcome was far beyond their expectations. In a striking example, some analysts predicted that the S&P 500 would finish the year with negative returns—forecasts that couldn’t have been further from reality. This discrepancy illustrates an important point: even the most well-educated and experienced analysts can be drastically wrong. It shows that predictions are based on what experts know at the time, but they can't account for the countless variables that influence market behavior throughout the year, such as political changes, economic developments, and unforeseen global events. How do financial stewards build a portfolio? The answer is diversification. Family stewards—those who manage wealth and invest for future generations—should focus on creating a well-rounded portfolio that can weather any storm. Rather than betting on predictions, diversify your investments across a wide range of asset classes: large-cap stocks, small-cap stocks, international investments, emerging markets, real estate, and bonds. By spreading your...
Today, I am sharing something that my family has fallen in love with—The Clever Fox Dated Planner. This planner goes beyond simple scheduling with features like a gratitude section, vision board, habit tracker, and tools for setting and achieving SMART goals. It is designed to help you reflect, plan, and improve every week. If you are ready to take control of your time and goals, let me tell you all about it! [bctt tweet="Start 2025 strong with the Clever Fox Dated Planner! This isn’t just a planner—it’s a tool to reflect, set SMART goals, track habits, and create a vision for your year. My family loves it, and I know you will too. #SMARTGoals #Habits #Goals #Planner" username=""] Outline of This Episode (1:09) I hope you had a wonderful Christmas and New Year! (2:36) The planner that we bought for the entire family (15:45) Spend some time zeroing in on your goals for 2025 The planner that we bought for the entire family We bought the Clever Fox Dated Planner with habit trackers for goal setting and time management for everyone in the family. Though we were a bit worried that they would not be excited, surprisingly, everyone loved it. But why do I love this planner so much? Because of everything it includes: How-to Guide: It comes with a pamphlet, “How this planner works.” They tell you where to begin, what to think about, and share examples. Gratitude and Self-Awareness: This section gives you space to write down what you are grateful for and passionate about. Daily Rituals: This is an opportunity to think about the skills you want to learn and habits you want to adopt. Maybe a ritual is drinking more water, meditating, or going to the gym. Affirmations: Short sentences with an optimistic tone stated in the present tense, i.e., “I am an architect of my life.” They give you confidence. Vision Board: They provide a two-page outlay where you can create your vision and get clear on what you want from life. Goals: You are given space to write three goals for each of these sections: health & fitness, business & career, personal development, relationships, family & friends, fun & recreation, and spirituality. Mind-Map: This section helps you take the big goals you have written down and break them down into smaller pieces. Monthly Page: This is a full page just like a typical planner (months January through January). It includes areas to write notes and goals. Weekly pages: This allows you to write out the week’s main goals, priorities, etc. Habit Tracker: You can write down things you want to turn into habits. It allows you to check a box for each day. Each weekly section includes an area where you can write down how you will improve the next week. What did you not do that you should have? How can you improve the next day and week? [bctt tweet="Why do I love the Clever Fox Planner? It’s packed with features: Gratitude & affirmations, vision board, goal-setting tools, weekly reflection, and a habit tracker. It’s everything you need to stay organized and crush your 2025 #goals. #Gratitude #BestInWealth #Planner " username=""] Implement SMART goals I try to record an episode about goal-setting at the beginning of every year and always encourage you to make sure that your goals are SMART: Specific Measurable Achievable Relevant Time-Bound Your goal might be to pay off a credit card by the end of the year. Maybe it is to run a half-marathon by June 15th. Here is my challenge: Write out five SMART goals you want to achieve in 2025 (and it...
What is an HSA? Who can invest in one? What can you use the money for? Why do I love them? Why shouldn’t you spend the money you save in an HSA? I will unravel all of these questions in this episode of Best in Wealth. [bctt tweet="Why don’t I want you to spend the money you’ve saved in your #HSA? I share the surprising truth in this episode of Best in Wealth! #retirement #Investing #RetirementPlanning #FinancialPlanning " username=""] Outline of This Episode [1:08] It is time to plan your 2025 goals [3:14] What is an HSA? [4:48] How can I invest in an HSA? [6:43] Why I like HSA accounts [7:43] How much can you save in an HSA? [9:13] What can I spend the money on? [11:11] What if you cannot afford to save in an HSA? [12:13] Don’t spend the money in your HSA The basics of an HSA An HSA is a health savings account. Do not confuse it with a flexible savings account, or FSA. An FSA allows you to save money—taken out of your paycheck with a tax deduction—that can be used for healthcare expenses. The money must be used within a certain timeframe. If you leave your employer, that money is gone. However, an HSA does not require you to spend the money if you do not want to. If you leave your employer, that HSA account is yours for life. To qualify for an HSA, you must have a high-deductible insurance plan with a minimum annual deductible of $1,650 and an out-of-pocket maximum of $8,300 or more in 2025 (for families, it’s $3,350 and $16,600). [bctt tweet="What are the basics of HSAs? Why do I love them? Learn the amazing details in this episode of Best in Wealth. #WealthManagement #Retire #Investments" username=""] Why I like HSA accounts Some of the benefits I have stated already: You get a tax deduction for every dollar you put in. Secondly, there are no income limit caps on who is allowed to have an HSA. HSA accounts allow you to take that money with you wherever you go and you do not have to spend it. Secondly, an HSA allows you to save quite a bit of money. An individual is allowed to contribute $4,300 in 2025. Families can contribute up to $8,550. If you turn 55 in 2025, you can contribute an extra $1,000. If you are in the 24% tax bracket, you will save $2,300 in taxes in 2025 by putting that money away in an HSA. Your deduction will change based on the tax bracket you are in. What can you spend the money on? Healthcare-related expenses (except the monthly premium). It can go toward copays, out-of-pocket expenses, coinsurance, medicines, etc. Medical expenses add up quickly. Why I do not want you to spend the money in your HSA The simple answer? Because you can invest the money. Many HSA accounts allow you to invest the money once you have saved $1,000. If you start saving $8,000+ a year for the next 20 years, think of how much it will grow by the time you retire. It is a great way to fund your healthcare in retirement. The next best part? Let’s say you contributed $250,000 and it grew to $500,000. When that money is used on healthcare expenses, you do not have to pay taxes on that growth. Once you retire, and go on Medicare, HSA money can be used to pay for Part B and D expenses. In 2025, the starting cost of Medicare is $185 a month. If your Modified Adjusted Gross Income is high, you may be paying a lot more for Medicare. If you do not end up spending the money on healthcare, once you turn 65, you can use the money on whatever you want—with one caveat. You will have to pay taxes on those dollars (just like a traditional IRA or 401K). Listen to the whole episode for all of the details! [bctt tweet="HSAs offer amazing tax benefits. But why else do I love them? I cover the details in this episode. #retirement #Investing #RetirementPlanning #FinancialPlanning " username=""] Connect With Scott Wellens
We invest in large companies, small companies, value companies, international companies, emerging markets, etc. We practice discipline when investing in all of these asset classes. If we want 20% of a portfolio allocated to large value, we maintain that percentage. We also practice strategic rebalancing. If something has an upward momentum, we set tolerance zones. If we go above or below those tolerances, we buy or sell. We practice discipline. Why? I share more in this episode of Best in Wealth. [bctt tweet="Discipline in asset allocation means sticking to your plan—no matter the headlines. Find out why this matters in today’s investing landscape. 🎧 #AssetAllocation #InvestingDiscipline #BestInWealth" username=""] Outline of This Episode [1:02] The importance of reading the full story [3:13] Why we practice discipline in asset classes [8:00] Taking a look at the big picture [11:02] Developed markets vs emerging markets [13:23] A disciplined approach to investing matters Why we practice discipline in asset classes By the end of the third quarter of 2024, the S&P 500 was up almost 20%. It is up another 6% since then. The S&P 500 is one of our best-performing asset classes. If we are just reading the headline, “The S&P 500 is doing the best,” we might think we should put more money in. But hindsight is 2020. And if we would have listened to the experts, many of them said that small-caps were going to perform the best in 2024. But small-caps are only up a little over 10% after the third quarter. It has also gone up 6–8% since then but is still underperforming the S&P 500. If we would have listened to the experts, we would be tempted to put more money into small-caps. But that is not the right decision either. We need to remain disciplined to our plan for each asset class. [bctt tweet="The S&P 500 is up, but that doesn't mean we chase momentum. Strategic rebalancing is key! Learn how to stay disciplined in your investment choices. #InvestingStrategy #AssetClasses #WealthManagement" username=""] Taking a look at the big picture Looking back 95 years, the small-cap index has done better than the large-cap index. We call this the small-cap premium. However, it comes with more risk. Because of the risk, investors demand a higher average return for owning smaller companies. Our portfolios skew more large than small because of the risk. However, we do want to capitalize on some of those returns—but not because of headlines. If you choose something riskier, it will not always do better. On average, stocks do better than bonds because they are riskier—but it does not mean stocks always beat bonds. Developed market small-caps on average bean developed markets large-caps by about a percent and a half per year. Small-caps over the last 20 years perform better than large-caps in emerging markets. Remember, past performance is no guarantee of future results. Have small-caps underperformed large-caps in the recent past? Yes. Does that mean we abandon small-caps? No? Does that mean the premium is gone? We do not think so. A disciplined approach to investing matters We need to investigate every headline that we read because they don’t tell the full story. If we’re just reading the headlines, we might make an emotional decision about asset allocation. We cannot try to guess which asset class will do the best. When we do that, we are putting our family and our future in jeopardy. A disciplined approach to investing matters. Learn more in this episode of Best in Wealth. [bctt tweet="Reading the full story helps you make smarter choices. Get the full breakdown on disciplined investing in today’s episode of Best in Wealth! #InvestingInsights #BestInWealthPodcast" username=""] Connect With Scott Wellens a...
Ever wondered where you rank financially among Americans? Curious about what it takes to join the top 5% in income or net worth? Every three years, the Fed surveys the finances of American households, tracking assets, debt, and more. One of the things they cover is who landed in the top 5% of both income earned and net worth. In this episode of Best in Wealth, I will share the income that puts you in the top 5% of income earners by age, what lands you in the top 5% of net worth by age, and why none of it matters. Don’t miss it! [bctt tweet="Are you in the top 5% of income-earners or net worth? Learn what it takes in this episode of Best in Wealth! #PersonalFinance #FinancialPlanning #Wealth #WealthManagement " username=""] Outline of This Episode [1:15] Getting into the University of Wisconsin Madison [3:21] The income that puts you in the top 5% of income [11:12] Individual versus household income [12:00] The income that puts you in the top 5% of net worth [17:21] Are you in the top 5% of income or net worth? The income that puts you in the top 5% of earned income by age Do you land anywhere in these brackets? 18-29: If you earn $156,732 or more, you are in the top 5%. You are just launching your career and starting to earn an income. 30-39: If you earn $292,927 or more, you are in the top 5%. You are getting more established in your career and perhaps started a business or received a promotion. 40-49: If you earn $404,261 or more, you are in the top 5%. Maybe you continued to receive promotions or your business grew. 50-59: If you earn $598,825 or more, you are in the top 5%. The 50s are your highest potential for earnings years. Maybe you sold your business or became the CEO of a company. 60-69: If you earn $496,139 or more, you are in the top 5%. You may be retired and living on social security and your investments during these years. 70 or older: If you earn $350,215 or more, you are in the top 5%. Most people in their 70s probably are not working any longer and that income is being derived from Social Security, pensions, and investments. What does it take to be in the top 5% of households? If you earn $499,000 or more, at any age, you are in the top 5% of all income earners. [bctt tweet="What income puts you in the top 5% of earned income by age? I hash out the numbers in episode 253 of Best in Wealth! #wealth #retirement #investing" username=""] The income that puts you in the top 5% of net worth What does the top 5% of net worth look like in each age group? 18-29: $415,700 or higher 30-39: $1,104,100 or higher 40-49: $2,500,000 or higher 50-59: $5,001,600 or higher 60-69: $6,684,220 or higher 70 or older: $5,860,400 or higher Your net worth is far more important than your income. You can make all of the money in the world but if you do not save anything, your net worth will never increase. It will stay zero. Secondly, you can earn a lot less than the top 5% of income earners and still save enough to be in the top 5% of net worth. Are you in the top 5% of income or net worth? It is okay if you do not fall into any of these categories—they can be very skewed. Numerous factors impact these numbers. Secondly, these numbers don’t matter. If you have the right retirement plan for you, you will have the retirement of your dreams regardless of whether or not you land in the top 5%. [bctt tweet="Are you in the top 5% of income or net worth? Does it matter? Let’s hash it out in this episode of
Did you know that anyone can say they are a financial advisor? They may not be licensed or experienced. So how do you know who to trust? In this episode of Best in Wealth, I will break down the three types of people who put “financial advisor” on their business cards, what the letters after a financial advisor's name mean, and how a fee-only financial advisor is compensated for their services. Knowing all of these things will help you determine what type of advisor is right for you to help you achieve a successful retirement. [bctt tweet="Did you know that anyone can say they’re a financial advisor? They may not be licensed or experienced. So how do you know who to trust? Find out in episode 252 of Best in Wealth! #Retirement #Investing #PersonalFinance " username=""] Outline of This Episode [1:08] High expectations do not leave room for satisfactory outcomes [6:17] The 3 types of people who put “financial advisor” on their business cards [19:14] How fee-only financial advisors charge for their services [22:34] What do the letters after a financial advisor's name mean? [24:17] Work with someone you can build a connection with The 3 types of financial advisors Three different types of people typically put “financial advisor” on their business cards: Insurance Sales Representative: They are required to be licensed to discuss or sell insurance. Their main goal is to sell you life insurance (typically whole life insurance that can be invested and earn dividends and be used for retirement). Is someone who can only sell life insurance acting in your best interest all of the time? How could they be? They make a commission on the insurance product that they sell you. Registered Representative/Broker-Dealer: They take an exam to be “registered” to sell securities, mutual funds, life insurance policies, etc. They are paid by commission, much like insurance representatives. Or they will recommend a mutual fund where they get a percentage (annual 12B1 fees and more). They are also not fiduciaries. Investment Advisor Representative: They must take a securities exam that also covers laws required to act as a fiduciary. An investment advisor is prohibited from collecting commissions. The fees they collect come directly from the client. They can call themselves fee-only representatives. I am a fee-only Investment Advisor Representative. I do not co-mingle with insurance sales representatives or registered representatives. It removes any conflict of interest. I am not beholden to any company. I must act in the best interest of my clients. Most financial advisors are dually registered. They may have an insurance or broker license. Listen to find out what questions you have to ask an advisor to find out if they are strictly an Investment Advisor Representative. [bctt tweet="In this episode of Best in Wealth, I’ll break down the three types of people who put “financial advisor” on their business cards and why it matters. #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] How fee-only financial advisors charge for their services There are four primary ways a fee-only advisor might get paid: Hourly: You hire a financial advisor to create a financial or retirement plan and you pay them for the hours it takes to do the job. It is a short-term relationship. One-time planning: A one-time plan may cost you $5,000–$7,000, which you pay once. They deliver the plan and you write them a check. It is a short-term relationship. Monthly retainers: The advisor might charge a couple hundred dollars a month, depending on the complexity of your plan. This may be great for someone who needs...
Do we care who wins the election? Does it actually impact our investments? The issues at stake matter to each of us for different reasons. Most Democrats think things will be better if a Democrat is voted into office. Most Republicans likely feel that things will fare better with a Republican in office. But does who wins the election actually matter when it comes to your investments? I will break it down in this episode of Best in Wealth. [bctt tweet="Does the outcome of the presidential election impact your investments? I share the surprising answer in episode #251 of Best in Wealth! #Investing #FinancialPlanning #WealthManagement " username=""] Outline of This Episode [1:08] September is never a good month in the stock market [4:02] Stock market statistics during each presidency [15:32] What do we do with this information? [20:17] Can a President influence the stock market? Stock market statistics during each presidency for the last 100 years We have had 17 presidents since 1926. Nine of the presidents were red, eight were blue. How did the stock market fare during their presidencies? Calvin Coolidge (Republican) was President from 1923-1926: If you invested $1 the day he became president, that dollar would’ve turned into $2.33. Herbert Hoover (Republican) was president from 1929-1933, during the Great Recession: Inflation was -0.7%. The annual GDP was negative 7.5%. Your $1 would have dwindled to $0.28. Franklin D. Roosevelt (Democrat) was president from 1933-1945: Democrats controlled the Senate and the House. Unemployment was 25.6%. The average GDP was 9.4%. Your $1 doubled twice and then some—becoming $4.61. Harry Truman (Democrat) was President from 1945-1953: Max unemployment was 7.9%. He inherited the end of Hoover’s recession. Annualized inflation was 5.4%. The average GDP was 1.3%. Your $1 turned into $3.10. Dwight Eisenhower (Republican) was President from 1953–1961. Max unemployment was 7.5%. The average inflation was 1.4%. The average GDP was 3%. There were three different recessions during his term in office. Your $1 turned into $3.05. John F. Kennedy (Democrat) was President from 1961-1963. Democrats controlled the House and Senate. Max unemployment was 7.1%. The average inflation was 1.2%. The average GDP was 4.4%. Your $1 turned into $1.39. Linden B. Johnson (Democrat) was President from 1963-1969. Democrats controlled the House and Senate. Max unemployment was 5.7%. The average inflation was 2.8%. The average GDP was 5.3%. Your $1 turned into $1.66. Richard Nixon (Republican) was President from 1969-1974: Democrats controlled the House and Senate. Max unemployment was 6.1%. The average inflation was 6%. The average GDP was 2.8%. Your $1 stayed $1. Gerald Ford (Republican) was President from 1974-1977: Democrats controlled the House and Senate. Max unemployment was 9%. The average inflation was 6.5%. The average GDP was 2.6%. There was a huge recession when he first started. Your $1 turned into $1.51. James (Jimmy) Carter (Democrat) was president from 1977-1981: Democrats controlled the House and Senate. Maximum unemployment was 7.8%. The average inflation was 10.2%. The average GDP was 3.3%. Your $1 turned into $1.55. Ronald Reagan (Republican) was president from 1981-1989: Democrats controlled the House and the Senate was mixed. Max unemployment was 10.8%. The average inflation was 4.2%. The average GDP was 3.5%. Your $1 turned into $2.89. George H. W. Bush (Republican) was President from 1989-1993:...
I frequently talk about what you should do to prepare for retirement and how to handle the years leading to retirement. But I rarely talk about what to do during retirement because I have not experienced it. [bctt tweet="Retirement will be different than you expect. How? Learn more in episode #250 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username="wellensscott"] So when I came across Fritz Gilbert’s article, “6 Lessons from 6 Years of Retirement,” I knew I had to talk about it. In the article, Fritz talks about the surprising things he has learned six years into retirement. I will cover the fascinating lessons in this episode of Best in Wealth. Outline of This Episode [1:06] Thank you for being loyal listeners! [1:36] What should you do during retirement? [4:52] Lesson #1: Retirement is complex [7:47] Lesson #2: Retirement changes with time [10:45] Lesson #3: Retirement will be different than you expect [14:17] Lesson #4: Your priorities will change throughout retirement [17:45] Lesson #5: Your mindset matters a lot [18:58] Lesson #6: Retirement can be the best years of your life Lesson #1: Retirement is complex When you retire, you have far fewer external influences than during your working years. Money issues are top-of-mind during the early phase of retirement. It is scary moving from collecting a paycheck for 30+ years to starting to live off of your nest egg. But Fritz believes that true value comes by figuring out all of the non-financial issues in retirement. [bctt tweet="Your mindset matters a lot in retirement. Find out why in episode #250 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username="wellensscott"] Lesson #2: Retirement changes with time Your experience will change as you move from the honeymoon stage to more advanced stages. The changes will last for years and will be different than what you expect. Your retirement plan will change. Your new reality requires a new approach. Embracing the challenge is part of the fun. Why not enjoy the new life? You get to experiment as you face the changes. Lesson #3: Retirement will be different than you expect I spend a lot of time talking about retirement goals with my clients. Whether it is traveling,...
I believe there are three rules that every family steward should follow when it comes to investing. In theory, these rules are “easy” to follow—but living by them is not. Secondly, these rules will not surprise you. That does not make them any less important. So in this episode of Best in Wealth, I will share what each rule is and you will discover why you have to follow them. [bctt tweet="📣 What are my 3 BIGGEST rules for investing? Find out in episode #249 of Best in Wealth! #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""] Outline of This Episode [1:06] The 3 rules for dating my daughters [5:31] Rule #1: Do NOT try to time the market [11:12] Rule #2: Do NOT focus on the headlines [13:53] Rule #3: Do NOT chase past performance Rule #1: Do NOT try to time the market Whether it is a bad day in the stock market or upcoming elections, it can be easy to let your emotions get to you and think, “Maybe I should get out of the market right now.” It is easy to sell everything and get your money out. However, it is far harder to decide when to put the money back in. No one ever thinks about the second half of the equation. Do you have an investing philosophy? What is your system? When will you get your money back in the market? The S&P 500 has been rolling. It was up 15% last quarter. Small Value was negative for the year. Wouldn’t it be tempting to take the money from your small value and move it into the S&P 500? But Small Value has done far better this quarter. You would have lost out on that money. John Bogle—The Founder of Vanguard—spent over 70 years on Wall Street. He’s famously known for saying, “I’ve never found anyone who can successfully time the market.” There is a reason for that. [bctt tweet="🚨 Do NOT try to time the market. Why? Check out episode #249 of Best in Wealth for the answer. #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""] Rule #2: Do NOT focus on the headlines It is too easy to become enamored with popular stocks that get media attention. For example, the Magnificent Seven has risen in popularity (Google, Apple, Facebook, etc.) for the last 10 years. They have done amazingly well in 2023 and 2024. However, once companies hit the “top 10,” their returns tend to decline. Just because you read a headline about a company does not mean it will perform better. What you have read about is already priced into the market. You must separate what you are seeing on the news from your investment. Rule #3: Do NOT chase past performance You might be inclined to choose investments based on past returns. You expect top-ranked funds to continue to deliver their best performance. We see this time and time again with new investors. They do not know where to start. The only information they have in front of them is past performance. So they choose what has had the best performance recently. But research shows that most funds that are ranked in the top 25% don’t remain in the top 25% over the next five years. Only about 1-in-5 mutual funds stayed in the top-performing group. The lesson? A fund’s past performance offers limited insight into its future returns. As family stewards, how do we shift our focus? What do we want to do instead? Listen to hear my thoughts. [bctt tweet="📣 One of my biggest rules for investing: Do NOT chase past performance. Learn why in episode #249 of Best in Wealth! #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""] Connect With Scott Wellens Schedule a discovery call with Scott Send a message to Scott...
When we decided my wife was going to get a new vehicle, I knew we needed to test drive the vehicle she wanted: A Jeep. She had never driven a Jeep before. She had never experienced what it was like driving something with the doors off. So I knew she needed to get behind the wheel to see how it felt. Let me tell you, our Jeep-buying experience was a wild ride! In this episode of Best in Wealth, I will share our experience, and how I ultimately purchased my wife her dream Jeep at the best price possible. Don’t miss it! [bctt tweet="My wife and I just bought a brand new Jeep. I detail how I negotiated the best price in episode #248 of Best in Wealth! #FinancialPlanning #WealthManagement #Jeep" username=""] Outline of This Episode [1:11] Growing our health alongside our wealth [2:46] Walking into the dealership [9:17] The moment everything went wrong [12:23] Asking for the best price [17:17] Purchasing my wife’s Jeep Walking into the dealership When we walked into the dealership, we test-drove a Jeep with the salesman. He immediately pushed us to sit down, crunch some numbers, and make a deal happen. But I knew we would not be making an emotional purchase that day, and I immediately let him know we were not going to move quickly. My wife told him that if negotiation was necessary, all communication had to go through me. The next day, this salesman started bombarding my wife with text messages, emails, and phone calls. Not surprising. She responded and said she wanted to test-drive a hybrid with the doors and top off. We set up a day and time. We walked to the Jeep and he showed us how he had taken the doors off. But he had not taken the top off because it was a “Two-person job.” We took it for a spin with the doors off and it was really cool. It was a great ride. My wife decided she wanted a Jeep. But, yet again, he had her test drive a Jeep that wasn’t a hybrid. My wife had a list of non-negotiable specifications that she wanted from the Jeep, including it being a hybrid. We knew that a hybrid wasn’t on their lot. This salesman had done enough for us that I knew I would buy the Jeep through him if he could match the best price that I could find. That’s when everything went wrong. [bctt tweet="We just bought my wife a brand new Jeep. Why’d we buy new? How’d we get the best price possible? I share my #negotiation secrets in this episode of Best in Wealth! #FinancialPlanning #WealthManagement #Jeep" username=""] The ridiculous ask He brought us inside to talk to his sales manager. The sales manager told us that finding my wife’s perfect Jeep was like finding a needle in a haystack. So he asked us to commit that we would buy the Jeep from them before he located it! He would only negotiate at that point. You should never commit to anything before you negotiate and land on a price. It was completely backward, so we walked out the door. Buying my wife’s Jeep I immediately went home, sat down at the computer, and found five different Jeeps fitting my wife’s specifications within five minutes. I emailed all five dealerships asking them to email me their best price on the Jeep. Every dealership called me right away. One said, “We do not negotiate over the phone, you have to come in.” I crossed them off my list. The other four dealerships gave me their price within 12 hours. But I did not know if what I was quoted was the best deal. So I took the three best prices and sent them all a text saying, “Congratulations. You made it to the top three with your initial offers. If you would like to sweeten the deal, I’m giving you one final chance. I’m buying a Jeep in the next 48 hours and buying it from the person who has the best price.” One said, “That was my best price,” but the other two sweetened the deal. They took more money off. One...
I am often asked how much a family should spend on vacations. While that is entirely personal, most experts recommend that 5–10% of your net income can be spent on vacations. Many factors may change this number. Maybe you have a large family or your kids are into expensive sports. You might not have that income to spend on a lavish vacation. But to spend any amount on a vacation, you need to budget. You cannot go into debt. So how do I do it? I will share a great strategy in this episode of Best in Wealth. [bctt tweet="✈️ How much should you spend on vacations? How do you budget for them? Learn more in this episode of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement" username=""] Outline of This Episode [1:04] We are heading on vacation to Europe! [2:38] How much you should spend on vacation [6:48] How we budget for vacations [8:20] Be aware of luxury creep [10:02] Be aware of entitlement creep [11:33] Do not be a vacation scrooge How to budget for a vacation You cannot go into debt to purchase a vacation. I have done it. I had a great time. But when I got home, the guilt and regret sunk in. That is why I firmly believe you need to have a spending plan. We set a monthly budget. Then, we have a separate spreadsheet that lists all of our non-monthly line items. It covers things like Christmas gifts, oil changes, car insurance, and vacations. All of these items are added up. If the number is $12,000, we divide it by 12, and save that money in our “escrow savings account.” Every time a non-standard monthly expense comes up, we use that money to pay for it. Those things will not disrupt our budget. [bctt tweet="🗺️ How do you budget for a vacation? I share my family’s strategy in episode #247 of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement" username=""] Be aware of luxury creep If you are going to Disney, there are a lot of different hotels to choose from in Orlando, right? You can stay at the Holiday Inn and Suites or choose from numerous luxurious hotels and resorts. Do not let yourself get lured in. Budget within your means. I spent a lot of time budgeting for our trip to Europe and I have saved for a couple of years. We are working within our budget. When it is all said and done, I will be proud. I am getting to spend time with my family within the budget I have set. Be aware of entitlement creep Do not let entitlement justify overspending on vacation. You are grinding every day at your job. You are exhausted being a parent. You deserve a vacation. But do not spend too much because you “deserve” it. It will eat you up inside. It is not about keeping up with the Joneses. Just because your neighbor stayed at a five-star hotel and was waited on hand and foot does not mean you should. Do not allow yourself to be talked into something you cannot afford. You know who you are. You are listening to a financial podcast. You are a budgeter. But you cannot be afraid to take a vacation. A vacation is investing in your family, investing in improving your mental health, and investing in lasting memories. Remember, vacations with your loved ones are an appreciating asset. [bctt tweet="⭐ Don’t let entitlement justify overspending on vacation. You deserve a vacation. But let’s keep it within budget, shall we? Learn more in episode #247 of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement" username=""] Connect With Scott Wellens Schedule a discovery call with Scott Send a message to Scott
There are a lot of huge decisions you have to make in life. What career are you going to choose? Will you get married? Will you have kids? Will you buy a home? There are many more. But there are not many bigger than this question: When are you going to retire? Maybe that is your only huge decision left. Have you really thought about it yet? Because if you are going to retire early, we have to plan for it. In this episode of Best in Wealth, I cover four huge questions you have to consider to help you make one of the biggest decisions of your life. [bctt tweet="🚨 In this episode of Best in Wealth, I ask 4 questions that will help you decide when to #retire. Check it out! #Retirement #RetirementPlanning #FinancialPlanning" username=""] Outline of This Episode [1:02] What big choices have you made in your life? [2:33] What the 2024 Retirement Confidence Survey tells us [9:48] 4 things to consider when contemplating early retirement [11:04] Question #1: Why do you want to retire early? [12:34] Question #2: What is your plan for retirement income? [15:00] Question #3: Do you have a plan for health insurance? [18:00] Question #4: When are you going to collect Social Security? What the 2024 Retirement Confidence Survey tells us Deciding when you are going to retire is an enormous decision to make. Americans are not mandated to retire at a certain age. Certain milestones may make the decision easier. Age 62: This is when you are first eligible for social security (though you will take a big hit on benefits) Age 65: This used to be the full retirement age (and is still the age when you are eligible for Medicare) Age 67: This is when you can collect your full retirement benefit from Social Security Age 70: If you wait until 70 to retire, you can collect a larger social security benefit A recent survey suggests that most people want to retire in their mid-60s. In reality, many retire earlier. It may be due to downsizing, deteriorating health, etc. According to the 2024 Retirement Confidence Survey, the median expected retirement age is 65. Only 28% of people expect to retire at this age (up 23% from last year). Most retire closer to age 62. 52% of current workers are expecting to retire gradually. 36% are expecting to retire all at once. Yet 74% of current retirees had a full stop to work and only 18% engaged in a gradual transition. These are all things to consider when deciding what age to retire. [bctt tweet="📣 What does the 2024 Retirement Confidence Survey tell us about when and how people are actually retiring? Get the details in this episode of Best in Wealth. #Retirement #RetirementPlanning #FinancialPlanning " username=""] Why people like to retire earlier If you had to choose now, when would you retire? Many people want to retire earlier than the traditional mid-60s. Why? People like to retire earlier to enjoy time while they are healthy and physically active. They can travel everywhere they have been waiting to go. They can play pickleball. As a financial advisor, we play a huge role in helping clients consider the ramifications of their choice (based on both financial and lifestyle factors). When we are helping our clients contemplate early retirement, there are many things to consider. When we onboard clients, we have meetings about investment planning, retirement income strategies, tax strategies for retirement, and insurance and estate planning. That’s before someone is officially signed as a new client. 4 things to consider when contemplating early retirement Here are four things we consider that may help you make this decision if you are doing this on your own: ...
I make a spending plan for our family every single month. We account for every dollar coming in and going out. But what about the things that happen quarterly and annually? We add up all of those expected expenses at the beginning of the year and calculate the total approximate cost. That money will be saved every month to go toward those expenses. That is how we allocate money for things like Christmas and birthdays, too. We budget $300 for each daughter’s birthday party and $200 for a present and save for it monthly. But last year, we bought pizza, cake, snacks, etc. Our daughter requested that we take her friends to brunch the next morning. We ended up spending far more than we had budgeted. Now we need to save more in the remaining months of the year to make up for going over budget. When I have to do this, we have to lower our spending or it will not balance out. I vowed that it would not happen again. So this year, we did things a little bit differently. Listen to this episode to learn a unique way you can teach your kids how to budget. [bctt tweet="🎉 In episode #245 of the Best in Wealth podcast, I share a unique way you can teach your kids how to budget that they’ll enjoy, too! #PersonalFinance #Budgeting #FinancialPlanning" username=""] Outline of This Episode [0:35] Why my kids had to take a personal finance class [2:55] Why I make a spending plan every month [5:05] Budgeting for my daughter’s birthday [9:09] How I taught my daughter to budget [18:37] The powerful lesson my daughter learned What I plan on doing differently this year My daughter was talking with my wife about her plan for her birthday and I knew I needed to interject. That is when a lightbulb went off in my head. I asked her to share what she wanted to do for her birthday. She planned to have 10 of her friends over for a sleepover. She wanted to decorate our basement with banners and balloons. She wanted to take her friends out for pizza and ice cream. She also wanted to take them to an escape room. Lastly, she wanted to give her friends a cool party favor. I’m sweating profusely at this point, starting to get nervous about my plan. But I took a deep breath and said, “That all sounds great.” I then proceeded to tell her that we had $300 saved for her birthday party and $200 for her birthday present. I told her that she got to plan her party down to the last detail—but that she had to stay within the $300 budget. Even better, if she spent under $300 on the party, I would take the extra money and put it toward her birthday present. But I told her that there was a catch: If she spent more than $300 on her party, it would be deducted from her birthday present. [bctt tweet="💡 I asked my 14-year-old daughter to plan her birthday party and gave her a specific budget to work with. It was a game-changer. Learn why in this episode of Best in Wealth! #PersonalFinance #Budgeting #FinancialPlanning" username=""] My daughter’s real-life experience with budgeting She had to calculate how many friends she wanted to invite and how much it would cost for pizza and ice cream for all of them. She had to find out how much the escape room would cost. She had to calculate how much the decorations would cost. She wanted to get her 10 friends Owala water bottles for party favors. She excitedly said, “They’re cheaper than Stanley’s—only about $30 a piece.” And I said, “Eva—what’s $30 x 10?” Her smile faded when she realized the water bottles alone would eat her entire budget. So she got to work. She decided they would not do the escape room. She would get ice cream that was on sale at our local grocery store. We would buy pizza from Costco. She priced out birthday decorations on Amazon. She also decided to invite only her closest friends so she could still get each of them an Owala water bottle.
Alexey V.
thanks