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Best In Wealth Podcast

Author: Scott Wellens

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This is the best in Wealth podcast – A show for successful family stewards who want real answers about Retirement and investing so we can feel secure about our family’s future.

Scott's mission is simple: to help other family stewards build and maintain their family fortress. A family steward is someone that feels family is the most important thing. You go to your job every day for your family. You watch over your family, you make sacrifices for your family, you protect your family. I work with family stewards because I am one; I have become an expert in the unique wealth challenges family stewards face.

Scott Wellens is the founder of Fortress Planning Group - an independent, fee-only, registered investment advisory firm. Fortress Planning Group is dedicated to coaching clients toward a holistic view of wealth and family stewardship. Scott is a certified financial planner, a fiduciary and has been quoted in the industry’s leading websites including Forbes, Business Insider and Yahoo Finance. Scott is also a Dave Ramsey Smartvestor Pro in the greater Milwaukee and Madison areas.
168 Episodes
Do you know what your personality type is? Do you know what kind of saver you are? Knowing these things can help you learn more about yourself—and determine what you need to do to have a successful retirement. If you’re interested in learning more about the 5 personality types—and what it means for you—listen to this episode of Best in Wealth! [bctt tweet="There are 5 types of retirement savers: which one are you? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:14] The 4 types of personality traits [5:27] #1: The ambitious risk-taker [7:33] #2: The cautious preparer [10:52] #3: The optimistic dreamer [13:14] #4: The purposeful planner [17:35] #5: The uncertain struggler [20:15] What each type should do The 4 types of personalitiesHave you taken a personality test to learn more about yourself? According to an article published on (, there are four main personality types, scored based on personality traits: openness, agreeableness, extraversion, neuroticism, and contentiousness. Understanding where you rank can help you predict your personality type. So what are they? Average: Most people are “average” and score high in neuroticism and extraversion while scoring low in openness. Reserved: reserved people are introverted and conscientious, neither open nor neurotic. Role models: Role models are natural leaders. They are agreeable, open, extraverted, and conscientious. Self-centered: Self-centered people score high in extroversion but are below average in all the other categories: openness, agreeableness, and conscientiousness. To grow, you need to know who you are. I scored the highest on the need for recognition and it’s true—I love a pat on the back. Once in a while, at a previous job, my sales manager would say, “Good job, Scott.” Unfortunately, he always followed it up with, “Your personality trait says I should do this.” Where do you land?  #1 The ambitious risk-takerAccording to Barrons, ambitious risk-takers are educated, optimistic, and young. 49% of the people surveyed were under 45 28% were under the age of 35 72% worked full-time 52% have a bachelor's degree Men are 54% of this group 43% have a financial advisor. They are more likely to be open to new opportunities. 75% expect their income to last throughout retirement. They think they are experts in retirement planning. Is this you? [bctt tweet="When it comes to retirement planning, are you an ambitious risk-taker? Find out what category you fall into in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] #2: The cautious preparerAre you a cautious preparer? 56% of this group are men 40% hold a bachelor’s degree 68% are 45 or older (20% are 65-75) Many cautious preparers have prepared for the worst and stuck with tried and true investment strategies. They’re full of questions, do a ton of research, but rely on the experts. 27% are actually retired (the highest percentage of any type). #3: The optimistic dreamerHere are the stats on the optimistic dreamers: Women make up 57% of this group 49% are under 45 and 26% under 35 Only 46% have a high school diploma To this group, retirement seems to be far away. They expect to lead active and rewarding lives as seniors. They’re optimistic—but don’t have the assets they need. They have a basic understanding of retirement plans but aren’t comfortable with it. But they’re usually making contributions to their 401k. Few optimistic dreamers know their income needs for retirement. They make financial decisions based on instinct—an awful idea. #4: The purposeful plannerPurposeful planner sounds good, right? Men are 58%...
John Oliver once said, “Everything you don’t understand about money combined with everything you don’t understand about computers—that’s Bitcoin.” Bitcoin is the most famous of over 4,000 different cryptocurrencies. All of these currencies are the subject of both endless debate and fascination. Many people are speculating about what role it should play in your portfolio. So in this episode of Best in Wealth, I talk about the volatile path of Bitcoin—and three reasons why financial stewards shouldn’t hedge their bets on cryptocurrency. [bctt tweet="In this episode of Best in Wealth, I share 3 reasons why Bitcoin is a speculative investment—at best. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Crypto #Cryptocurrency #Bitcoin" username=""] Outline of This Episode[1:08] I got my first COVID shot! [4:13] What to Make of Bitcoin now? [7:50] Why the steep rise? [9:08] Bitcoin and gold as an investment [12:13] THREE issues to consider The volatile journey of BitcoinBitcoin hasn’t been around that long. It was steady for a long time around a couple hundred to a couple of thousand dollars. But had a dramatic rise to $20,000 in 2017. What happened next? It plunged at the beginning of 2018 and a lot of people lost money. In October 2020, it shot straight up. It’s worth over $53,000 per coin. It has proven extraordinarily volatile—gaining or losing 40% in a month or two. It’s been a wild ride. So what’s led to this volatile track record? Why is the cost of Bitcoin continuing to rise? Bitcoin is earlier to purchase now. There are also a lot more people talking about it. More millennials and institutions are buying. Others feel it’s a great hedge against inflation. But Bitcoin is of limited value as a reliable medium of exchange and as a risk-reducing asset. It’s not a hedge against a well-diversified portfolio. Bitcoin and gold as investmentsAssessing the merits of Bitcoin as an investment can be difficult. It means you have to lower your allocation of stocks, real estate, or bonds. You have to give up something to get Bitcoin, right? We expect to receive future income from stocks, real estate, etc. As a stock-holder, we participate in the profit. Bitcoin is similar to holding gold as an investment. Even if they’re held for decades, the owner may never receive more Bitcoin or gold. It isn’t clear that Bitcoin offers investors positive expected returns. You own a coin or a lump of gold, hoping that supply and demand drive the worth in an upward trajectory. Some say Bitcoin is worth more than gold. Why? Because you can discover more gold, which means what you’re holding would inevitably be worth less. On the flip side, there’s a finite number of Bitcoins—as far as we know. But could they make more coins? Can code be written differently in the blockchain scheme? Could cryptocurrencies merge? There is no guarantee. [bctt tweet="Why has the price of #Bitcoin been so volatile? What made it skyrocket? Listen to this episode of Best in Wealth for my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement #Crypto" username=""] THREE reasons why Bitcoin is speculativeBitcoin—and other cryptocurrencies—are speculative at best. Here are three reasons why, as family stewards, investing in Bitcoin isn’t responsible. Firstly, it’s not backed by an issuing authority and exits only as computer code, kept in a digital wallet accessible by password. What if you forget your password? There is NO resource for any forgetful owner of Bitcoin. After a limited number of password attempts, you can permanently lose access, therefore rendering it useless. A holder of more than $200 million worth of Bitcoin can’t access them. Can you imagine being that person? This isn’t unusual. 20% of all outstanding Bitcoin are stranded and unavailable to rightful owners. Secondly, Mt. Gox—the Bitcoin exchange launched in 2010—handled over 1...
Financial discipline is imperative to the success of your long-term investments. But your behavioral biases can get in the way of that long-term success. Biases allow you to be short-sighted and you forget about the big-picture consequences of your actions. What are some of those biases? How do you avoid them and make sound investment decisions? I talk about 6 behavioral biases in this episode of Best in Wealth. Don’t miss it! [bctt tweet="6 behavioral biases can negatively impact your long-term investments. What are they? Find out in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Behavior" username=""] Outline of This Episode[1:07] Leave Best in Wealth a review! [2:13] Personal + financial discipline [4:28] The definition of discipline [7:13] Behavior #1: Herding Behavior [9:30] Behavior #2: Overconfidence [11:48] Behavior #3: Myopic Loss Aversion [13:29] Behavior #4: Recency Bias [16:05] Behavior #5: Home Market Bias [17:58] Behavior #6: Disposition Effect [19:58] What’s your punishment? The Definition of DisciplineAccording to a quick internet search, (discipline) is “The practice of training people to obey rules or a code of behavior using punishment to correct disobedience.” Investors often think that they’re disciplined, right? But the truth is that most of us aren't good investors. That’s why you must practice discipline. But we all deal with behavioral biases that impact our investing experience. 6 behaviors that can affect your investment returns. What are they? Behavioral Bias #1: Herding BehaviorOne word: Bitcoin. We are hard-wired to look to others for the right way to behave. The problem is that this leads to a lack of independent thought and evaluation. You see Bitcoin continue to climb because of supply and demand. We feel like we need to follow the herd and buy into Bitcoin now. But it means you’re chasing the returns. If you buy in at $50,000 and the market corrects, you may be down thousands of dollars. If you look at stocks as a whole in the last 6 months, there are so many better places you could’ve been than technology stocks. [bctt tweet="Humans are hard-wired to look to others for the right way to behave. How does this impact your #investment decisions? Find out in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""] Behavioral Bias #2: OverconfidenceOverconfidence bias leads investors to overestimate their knowledge and ability—while underestimating risk. We think we are smart. But it’s nearly impossible to outsmart the market. Only about 25% of actively managed funds beat their index. The efficient market hypothesis states that stock prices reflect all market information. Remember one thing: everything that we know about a company or sector is already priced into the market. If you aren’t diversified, you are pinning yourself against millions of investors. Overconfidence can kill your portfolio. Behavioral Bias #3: Myopic Loss AversionLoss aversion means that investors are more sensitive to losses than gains. This occurs more frequently when investors check their performance every single day. Oversensitivity creeps in when you do that. This causes investors to behave irrationally and sell after a market drop which means taking a loss. When you feel good about a market gain and then see a loss—it hurts twice as bad. It makes us irrational about our money and we lose subjectivity. Behavioral Bias #4: Recency BiasPeople—including me—have short memories. We recall recent events more clearly than those in the past. It’s especially dangerous in investing. We forget about prior market declines. We take more risks when things are going well. We’re overconfident and following the herd behavior.
What is strategic rebalancing? Why should you rebalance your portfolio? How do you rebalance your portfolio? In this episode of the Best in Wealth Podcast, I share what it is, why you want to do it, and the best way to strategically rebalance your portfolio. Don’t miss it! [bctt tweet="This episode of the Best in Wealth podcast is your guide to the strategic rebalancing of your portfolio. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Balance" username=""] Outline of This Episode[2:37] Cleaning out my junk drawer [5:15] What is strategic rebalancing? [9:09] Rebalancing reason #1: Risk tolerance [12:14] Rebalancing reason #2: Buy low and sell high [14:05] Time-based portfolio rebalancing [18:22] Employ strategic rebalancing [22:05] Invest in the low performers What is strategic rebalancing?What is strategic rebalancing? Why do you do it? Let’s say you have allocated your 401k into five different mutual funds. For example, you may be invest 20% into the following asset classes; a US fund, an international fund, an emerging markets fund, a real estate fund (REIT) and a bond fund. Then, over time as the market goes up and down, let's say the US markets are down and the international market is doing well. Your 20% allocation in the US mutual funds drops to 18% and your international funds might be at 23%. Now, your portfolio is out of alignment. Rebalancing a portfolio is getting it back to square one, with each fund at 20%. But there are different ways to go about it. The TWO big reasons to rebalanceAt Fortress Planning Group, we define risk between 1 and 99. “1” means you hide your money under your mattress (and have next to zero risk tolerance). If you are a “99,” you are able to invest in volatile stocks (you have a high risk tolerance). Your risk tolerance should be somewhere in-between 1 and 99. You set your portfolio to a certain risk level because it fits your risk tolerance. The market will go up and down. You cannot time it. But if your risk tolerance is a 65 and you are in a portfolio that is a 70, you may not be able to handle a volatile market. Your emotions will lead to poor decisions. You need your risk tolerance to be in the right place. You have to rebalance so your risk tolerance stays aligned. You cannot be at risk of making emotional decisions. This is the #1 reason why you rebalance. Reason #2 is that rebalancing offers you the opportunity to buy low and sell high. If your international mutual fund is doing well and is now at 25% of your portfolio, you can "sell high" to get your portfolio back to 20%. You can then buy your US mutual fund and while it is down, "buy low" and get the fund back up to 20% while it is underperforming. [bctt tweet="What is strategic rebalancing? Why do you do it? Learn more in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Balance" username=""] Time-based portfolio rebalancingHow do you rebalance your portfolio? One option is to do it at a set time monthly, quarterly, or yearly. In most 401ks, you can set it up so that it automatically rebalances. What is the best option? How often should you rebalance? A Vanguard study says there is no perfect time to rebalance. Rebalancing monthly might be excessive and you may pay too much in fees. If you rebalance too soon, you can miss out on momentum. If recessions and corrections lasted the same amount of time, you could do time-weighted rebalancing. But no one knows how long a recession and correction will last. If your choice is regular rebalancing, aim for yearly rebalancing. But this is not the method that I recommend. What is? Strategic rebalancing 101At Fortress Planning Group, we employ strategic rebalancing as often as we need to. The research suggests this is the way to get the most bang for your buck. We do not want to leave
COVID has turned the world upside down. We are all entrenched in the depth of winter. There’s a lot of hatred permeating politics. The economy is overwhelming. It feels like the walls are caving in around you, right? But none of these things are under our control. Focusing on these things won’t make your walls stronger. You’re the one responsible for building your four walls. No one else will do it for you. You don’t want a weak house that leaks. You want a strong fortress. So how do you build your fortress? In this episode of Best in Wealth, I share 5 things you can control and focus on. Check it out! Outline of This Episode[1:15] Welcome! [2:04] Growing up a carpenters kid [4:14] The state of our world [9:18] How to build your fortress [10:00] #1: Take care of your family [11:36] #2: Build your financial fortress [14:59] #3: Be kind to others [16:41] #4: Take care of yourself [19:27] #5: Get spiritual Step #1: Take care of your familyDon’t take your spouse for granted. Everyone can work on their marriage. Are you a parent? Become the best parent that you can be. How? Be present. Don’t stress about what you can’t control. Listen to your kids. A client told me that instead of asking your child “How was your day?” you have to say “Tell me about your day.” It’s a game-changer. When you work to be present, you’re pouring a strong foundation. #2 Build your financial fortressHow can you take care of your financial fortress? Here are some ideas: Set up a budget! Get a spending plan in place. You feel so much better. It isn’t a constraint on your money—it’s permission to spend. Don’t feel guilty when you have it as part of your spending plan. Set up a great retirement plan. You’ll feel more secure and like you’re making better decisions with your money. Get a sound investment plan in place. When you have an investment policy statement in place, you feel less out of control when the market dips. Get the insurance you need (and get rid of what you don’t need). Pay attention to your taxes. Get estate-planning documents in order. If this is too overwhelming, reach out to me! This is what I do for a living. I can help you get it all together. Step #3: Be kind to othersI’m tired of all of the hatred in the world—aren’t you? Why can’t we just be kind to others? Let people pass you on the freeway. Open the door for someone. Smile. Give. You can do three things with your money: spend it, save it, or give it away. You will be happiest when you’re giving. Give a little now so you can give a lot later. It doesn’t have to be monetary—you can give your time, too. Step #4: Take care of yourselfEveryone focuses on self-care at the beginning of a year, right? It’s so easy to start strong, then you start to go downhill. It’ll be rough at first. But once you get in the groove, you’ll want to keep those endorphins around. You also need to take care of your mental health. If you aren’t in a good physical or mental state, you’re like a hollow door. But when you’re strong—both physically and mentally—you can take on the world. Step #5: Get spiritualYou need a sense of purpose in your life. The world is bigger than you. Don’t forget that you have someone to lean on. We all fall, but you can get back stronger than ever. When you have a strong spiritual base, it’s hard to get knocked down. You are being protected. When you feel that, your fortress is growing even stronger. You can work to be a better person every day. Connect With Scott Wellens (Schedule a discovery call with Scott) (Send a message to Scott) (Visit Fortress Planning Group) (Connect with Scott on LinkedIn) (Follow Scott on Twitter) (Fortress Planning Group on Facebook)
If you haven’t heard about what’s happening with Reddit and GameStop stock, you must be living under a rock. It all started in a Reddit forum whose sole intent was to punish “the man.” Thousands of users banded together to run the price of GameStop up. GameStop went from $20 to $460 in a matter of days. Some people have made millions of dollars—others have lost their entire life savings. Should you get in on the frenzy? Listen to this episode of Best in Wealth for my thoughts! [bctt tweet="Do you want in on the #GameStop stock frenzy? What do I think about it? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Stock #StockMarket #Reddit" username=""] Outline of This Episode[1:13] My experience with sports betting [3:34] The Gamestop stock frenzy [5:49] What is shorting a stock? [10:15] The impact on short-sellers [11:29] The impact on individuals [18:35] Is this trend unprecedented? [19:37] Why this trend scares me What is shorting a stock?Shorting a stock is when you borrow shares from a company (like a mutual fund) that owns shares of the stock you want to short. You promise to give those shares back after a set time and pay the mutual fund interest and fees for borrowing these stocks. When the hedge fund borrows the shares, they usually turn around and sell them, betting the stock will drop. So if they sell at $20 and make $2 million and the stock price drops to $5, they go out and rebuy the stock for $500,000 to return to the mutual fund. In the process, they make $1.5 million. The hedge fund gets to keep the difference. Hundreds of thousands of people bought GameStop, driving the price up. One year ago, the stock was selling at $4 a share and in recent days it’s hit over $400. It’s experiencing wild price swings. But you have to remember: there’s no profit until you sell. How it impacted the short-sellersAs the stock price went up, the hedge funds got squeezed. This happens when they have to cover their losses. Some of the hedge funds had to buy back the shares that they borrowed and give them back to the mutual funds. If they sold a stock at $20 and now have to buy it back at $300 a share, it costs them $30 million. If they previously sold them for $2 million, they lost $28 million. During this GameStop saga, hedge funds have collectively lost over $3 billion. [bctt tweet="How has the #GameStop + #Reddit market frenzy impacted the short-sellers? I explain what’s happening in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Stock #StockMarket " username=""] How it’s impacting individualsI read that one kid got $50 for Christmas and turned it into $1,000. But he hasn’t sold the stock yet. Another guy had a few thousand in his account. The next day, it went up to $1 million. He quit his job to do this full-time. But he didn’t cash out. He’s holding on thinking it will go higher. Why are people holding on to stocks that aren’t worth anything? These Reddit groups are encouraging risky trades with your whole net worth. They’re betting as much as they can at the highest possible risk. It’s the very thing that makes my stomach turn over. They seem to be more interested in the game than the outcome. But this is real money. This can be extremely dangerous. One student bet $6,000 and lost it all. So he took all of his student loan money and sold his car—just to lose another $30,000. True investors focus on long-term investments, diversification, and costs. These Reddit investors don’t want to wait 20 years for a payoff. They want to get rich quick. The guy that started the frenzy is reportedly up $14 million. But he left millions in his tracks that will lose big time. A lot of people bought high are going to be in for a rude awakening. This is high stakes gambling. Why this trend scares...
I expect the stock market to go up every day. What do I mean by that? Is it a realistic expectation? In this episode of Best in Wealth, I dissect a Business Insider article written by David G. Booth about chasing expected returns. I also share WHY his opinion is one that matters. Don’t miss it! [bctt tweet="As a long-term investor, you need to chase the expected returns—not the expected. I talk through what I mean in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:09] Listeners: I need YOU to weigh-in [4:04] Just who is David G. Booth? [11:36] What David Booth’s Business Insider article tells us [22:35] Why you should pursue expected returns Three facts about David G. BoothThere are three facts you need to know about David G. Booth: Firstly, David Booth went to the University of Kansas and graduated with a Bachelors Degree in Economics and a Masters Degree in Business. He graduated in 1969 and went to the University of Chicago School of Business. The University of Chicago is where The Center for Research of Security Prices (CRSP) is. All of the information on all stock prices exists at the CRSP. If you’re reading research papers, they need to talk about the CRSP. Secondly, David Booth was the research assistant to Eugene Fama, the father of modern portfolio theory. He was named a Nobel Laureate and highly recognized in the field of finance. Thirdly, the University of Chicago School of Business is now called the Booth School of Business. Named after—you guessed it—David Booth. A brief—but important history—of David G. BoothDavid Booth left the University in 1971 to work for Wells Fargo. In the early 1970s, the very first index fund was developed—the S&P 500. Before this, every available mutual fund available was actively managed. This S&P 500 was only available to institutional investors. In 1976, John Bogle started Vanguard, with the first retail index 500 fund. In 1981, David left Wells Fargo and started Dimensional Fund Advisors (DFA). Why did he start a company? He believed that a small-cap index could be developed. People said no way—that trading costs would outweigh any benefits of being in an index fund. He didn’t care. So he built a board of directors including the brightest minds in financial market research. He proved everyone wrong. The small-cap index proved to be a winning strategy. [bctt tweet="In this episode of Best in Wealth, I share a brief—but important history—of David G. Booth. Why? You’ll have to listen to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] What’s different about Dimensional Fund Advisors?An index fund beats approximately 83% of actively managed mutual funds. The longer you hold, the better chance you have of beating the equivalent actively managed fund. The DFA manages over 600 billion dollars. They follow the science and build strategies around science. Since their inception, they’ve developed numerous successful strategies. Since 2000, only 17% of actively managed mutual funds beat the market. 84% of DFA funds beat the market. Index funds make up trillions of dollars worth of assets. Why is this important? Why am I telling you a story about David Booth? Because you need to listen to him. What David Booth’s Business Insider article tells usPlease Note: This is not a recommendation to purchase a specific index fund. It’s simply talking through an article by someone you should listen to. David expects the stock market to go up but isn’t upset when it doesn’t. He’s there to capture the long-term ups. The S&P 500 sees an average 10% annualized return, right? 10% seems sensible. When it’s divided throughout the year, you expect your portfolio to grow 0.0275% every day. But the market rarely goes up 10% per year. In the past 100 years, the stock market has never
Forget about New Year’s resolutions. 87% of people make New Year's resolutions, but by the end of January, 50% have already failed. By summer, most people forget about their goals. You end up feeling like a failure when you do not reach your goals. That is why I do not think we should set ANY goals for 2021. You heard me right—zero goals for 2021. Why? I think you should focus on one word instead. In this episode of Best in Wealth, I will talk about a concept shared in the book— (The One Word That Will Change Your Life). I will walk you through how to come up with your one word for 2021. [bctt tweet="In this episode of Best in Wealth, we are doing the one word challenge. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:11] Just keep digging, digging, digging [4:02] The one-word challenge for 2021 [10:23] How to come up with your one word [13:57] What do you do once you have your word? [17:50] My one word for 2021 The proven way to create clarity, power, passion, and life changeThe one-word challenge is a proven way to create clarity, power, passion, and life change. We need to embrace our word and live our word, right? I believe it will have a powerful impact in 2021 on the 6 dimensions in your life: spiritual, physical, emotional, relational, mental and financial. When I read the book, I thought it sounded a lot like the cornerstones that I talk about in this podcast. The goal is to find this one word that will have an impact on all of your cornerstones. How to come up with your one wordThe first step is to prepare your heart and commit to the investment that you will make to this word. Secondly, unplug! Spend time alone praying, meditating and thinking about the word. Ask yourself these questions: What do I need? What’s in my way right now? What needs to go in my life? If you are a spiritual person, talk to God—then listen. Think about who and where you are today—and who and where you want to be at the end of 2021. What do you need to do to get from here to there? What word will help bridge the gap? You can write down some goals, do a brain dump, create a mind map—just get everything out. Then create a list of words that describe what you need to do to meet your goals. What will help you be a better person in 2021? Take your favorite words and mull them over for a few days. Choose the word that speaks to you. Choose the word that you can say over and over in your head and still feel inspired by. I get it, it sounds fluffy. Do not overthink it. If you spend just a little time on it, your word will hit you in the face, just as mine hit me. [bctt tweet="What is the one word challenge? How do you come up with your one word? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] What do you do once you have your word?Live out your word. How? Write it down in prominent places. Create a screensaver with your word. Craft a sign and hang it somewhere. Keep a journal. Talk about it with other people. Create a weekly challenge. Find a song that relates to it. Write a poem or prayer about your word. The more you think about it, the more you will take 2021 to the next level. Is that not what we all want? All of your big plans, goals and promises are narrowed down to this one word. How can you live out your word in 2021? What word sums up who you want to be? What word can you focus on all year long? Think of the great things that could happen. This one word could shape who you are forever. It will become the compass that directs your decisions and guides your steps. [bctt tweet="You’ve done the one word challenge. What’s next? I share my thoughts in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing...
What is a benchmark? Why is it important to be familiar with what your benchmark is? How can it impact the decisions you make? In this episode of Best in Wealth, I walk you through why it is so important to know your benchmark. I guide you through how to figure out which benchmark to follow and break down why you need to rethink your strategy. Do not miss this important episode! [bctt tweet="What is a benchmark? Why is it important to know what your benchmark is? I share more in this episode of Best in Wealth! Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:50] Scams are running rampant [5:43] The most common benchmarks [8:07] Why it is time to rethink your strategy [9:58] Look at other asset classes [13:08] Why you need to know your benchmark [18:31] Do not be chasing the hot dot [19:55] Do you have an investment policy statement? The most common benchmarksWe always hear about the common benchmarks or indexes such as the Dow Jones, The S&P 500, and the NASDAQ. The Dow Jones consists of 30 large companies representing different sectors in the United States. The S&P 500 is the 500 largest companies in the US. The NASDAQ consists of tech-heavy stocks. But none of them represent every asset class you can invest in. None of these are how your portfolio should look. You might have an index fund in your portfolio tracking one of these indexes. If so, your return might be pretty good in 2020. It would be a little over 14% as of December 17th, 2020 (minus the fund cost). A lot of people look at 14% and think that’s the benchmark for their portfolio. I am going to walk you through why that is not the case—or should not be. Why it is time to rethink your strategyThe S&P 500 averages 10% per year. If you are following that with your portfolio, you have gained 10% minus fund expenses. But research shows that these traditional active management funds do not do as well as the index. Only 23% have beat the index. If you are just in the S&P 500, you have to consider longevity. You can see very dark times for a long period of time if you are only invested in one asset class. For example, from 2000–2009 the S&P 500 averaged -1% per year. If you started retirement with $1 million and you only invested following the S&P 500 for 10 years, you lost $100,000 in 10 years. Look at other asset classes. [bctt tweet="Why do you need to rethink your strategy when it comes to tracking benchmarks? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Look at other asset classesThere are thousands of companies that trade in the U.S. You might want to look at another index fund that tracks the Russell 2000. It is doing pretty well this year, but people never reference it. Russell 2,000 was down most of the year but is now up over 10%. What about a large value fund? They may look at the top 1,000 companies. Your benchmark would be the Russell 1,000 Value Index (it is down 1% this year). What if you are investing internationally? You might be tracking the MSCI World Index (that excludes the US). It is up 2.91% as of 11/30/2020. What about emerging markets? What about real estate? If you are in any of these asset classes, your benchmark is not the S&P 500. Why you should not chase the marketAre you looking at your 401k or IRA and seeing less of a gain than the S&P 500? When the market dropped a lot in March, most people did not get out of the market. However, a lot of people have been chasing returns ever since. They try to make changes in their portfolio to track the S&P 500—when it is not their benchmark. That has cost investors millions and millions of dollars. What if your 401k was tracking US Small Value? US Small Value was about even for the year as of...
What five major areas should you look at at the end of every year? End of year financial planning should include looking at assets and debt, tax planning, cashflow issues, insurance planning, and estate planning issues. Why does it matter? How can it help you from a tax-saving standpoint? Learn more in this episode of the Best in Wealth podcast! [bctt tweet="In this episode of Best in Wealth, I share 5 things you NEED to look at in your end of the year financial planning. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:08] Why you need an investment policy statement [8:00] #1: The asset/debt issues to consider [9:45] #2: Tax planning issues [15:17] #3: Cashflow issues [17:11] #4: Insurance planning issues [18:52] #5: Estate-planning issues Why you need an investment policy statementAre you staying disciplined and staying in the stock market? Are you staying disciplined in each asset class? An investment policy statement can help you stay disciplined. The S&P 500 is doing quite well with a few companies driving them forward. People have started moving out of other assets to capture some of the returns of the S&P 500. But that isn’t sticking to your plan. Small-value is up 27%. Small companies are up 21% and large value is up 17%. You missed out on the recovery if you got out of these asset classes. An investment policy statement will keep you disciplined through the good and the bad times. It puts YOU in control. The asset/debt issues to look intoDo you have unrealized investment losses? If you have a taxable account and you did tax-loss harvesting, it means you have some losses generated in the account. What can you do? You can look at where you might have selling opportunities to offset the losses with gains (and offset the taxes). If you carry those losses, you’re allowed to write off up to $3,000 each year. You can deduct this from your regular income. If you generated $9,000 of losses in your taxable account, for the next 3 years you have a $3,000 deduction because the loss carries forward. It’s a great way to offset gains or carry forward and offset income. [bctt tweet="What asset/debt issues should you look into as part of your end of the year financial planning? I share some thoughts in this episode of Best in Wealth. Go check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Tax planning: How to save on your taxesThere are so many things you can do to save on your taxes. Do you expect your income to increase in the future? Many people were victims of the pandemic and lost their jobs. If you’re one of those people, it means you won’t make the kind of money you’d normally make. Your taxable income may be lower than it ever has been. If you’re in this situation, now might be the time to contribute to a Roth IRA. Why? Because you’re in a lower tax bracket. If your tax bracket is lower this year, consider doing a Roth conversion. The money starts growing tax-free. If you make around the same amount as you have previously, are you on a threshold of a tax bracket? We live in a progressive tax system which means the first $19,750 you make is taxed at 10%. If you make more than that, you’re taxed at 12%. If you make more than $80,250, you’re taxed at 22%—which is a huge jump. So how do you stay in the lower tax bracket? You could fully fund your HSA or your 401k. Anyone on a threshold should make the same maneuvers if you have the money to do so. What else can you do? Listen for a few other tax-planning savings ideas! I also share some ideas to mitigate cashflow and insurance issues—don’t miss it. Estate-planning [unexpected things you can do]One of the big things you need to look at is your beneficiaries. Did you have a baby? Do you want to remove someone? Are your personal representatives still the right people? Is...
What is just as important as building wealth for retirement? Understanding and preparing for the six stages of retirement. You experience different situations and emotions through each stage of the journey. If you know what to expect ahead of time, you can strategize how to emotionally—and monetarily—prepare. Listen to this episode of Best in Wealth to help prepare for your retirement. [bctt tweet="What are the six stages of retirement? Listen to this episode of Best in Wealth to learn how to navigate them! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:26] Health comes before wealth [4:40] Stage one: pre-retirement [8:48] Stage two: retirement day [10:07] Stage three: the honeymoon stage [12:03] Stage four: disenchantment [17:37] Stage five: your new identity [19:55] Stage six: Moving on [22:04] How do you want to be remembered? Stage one: pre-retirementYou need to make sure you have the right amount of money in the bank, right? This tends to be one of the only things people think about when planning for your retirement. But all of your dreams need to come to the surface, too. All of your goals and what you want to leave behind need to be discussed. Do you have enough to accomplish your goals? Are you addressing everything? What if you end up in a nursing home? Will you and your spouse have enough to provide for that? Can you withstand social security being cut in half? We go through all of these scenarios in the planning stage of retirement. If you’re not sure if you’re prepared—or don’t want to do this on your own—feel free to (reach out to me). I work with clients all over the United States. Stage two: retirement dayThis is your last day of work. You’ve likely worked for the last 30, 40, or 50 years. Your last day is a HUGE deal. There’s a ton of excitement around the big day. You can do whatever you want without the stress and burden of your job. [bctt tweet="The big retirement day is here! Now what do you do? Listen to this episode of Best in Wealth as I talk through the six stages of retirement! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Stage three: the honeymoon stageOnce the retirement celebrations are over, retirees can begin to do everything they’ve always wanted to do. They may travel, complete a honey-do list, visit family, or pick up a new hobby. The length of this phase varies depending on how much activity you’ve planned. Everything is awesome. But eventually, the excitement wears off. Eventually, you run out of planned activities. That’s when you move to stage four. Stage four: disenchantmentOne day you wake up and think that retirement isn’t all that you thought it would be. You may feel like you’ve lost your identity. You were needed at your job. People counted on you. You felt more self-worth while you were working. The honey-do list is done. But you have so much free time left. The feeling of disenchantment can be accompanied by depression. This is the time when it’s important to ask for help. Talk about it with your family, spouse, friends, or even your financial advisor. This is just as important as all of the money that you saved. This might be a time to invest in something bigger than yourself. You need a sense of purpose. Maybe you can volunteer at a local organization or your church. Maybe you could take some continuing education classes. Maybe it’s time to plant a garden. Find people to talk through this stage with you. Find the deeper meaning of your life. Stage five: your new identityYou familiarize yourself with the landscape of your new circumstances and new higher purpose. You manage the inevitable self-examination. You begin to find answers to the question: Who am I now? In this new stage, you start to figure things out. You
How do you build your family fortress? I talk about cornerstones often, including how to figure out what yours are and how to build abundance within them. Your family is one of—if not THE—most important cornerstones in your life. But what do I mean by building your family fortress? How do you do it? Listen to this episode of Best in Wealth to learn more! [bctt tweet="How do you build your family fortress? What does it mean? Find out in this episode of Best in wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:02] My dream of being a coach [3:43] Build your family fortress [7:26] The family cornerstone [8:16] The Single Page Life Plan [9:26] Determine your mission statement [10:32] What are your top cornerstones? [11:27] Actionable steps in the SMART goal format [18:42] Spend time building your family fortress Building abundance in your cornerstonesIf you’re listening to this podcast, you’re likely your family steward. You handle the finances. You need to build abundance in your cornerstones to build your family fortress. It’s why I call my business the “Fortress Planning Group.” Building your fortress isn’t all about money. But money is the fuel to help you build abundance. We have some castles scattered in our office to remind our clients that our job is to help you build your fortress so you can feel peace and security. We handle your financial cornerstone to allow you to concentrate on your family. It’s not about overly-focusing on one cornerstone. You can’t lose sight of all the others. Friends are important, but you can’t spend all of your time with them at the expense of your family. You need to build balance within the cornerstones. Place your family firstSome people place their spirituality first—which is understandable—but family is usually the most important cornerstone. Are they the most important thing in your life? Your spouse and kids? Your parents? Siblings? If the answer is yes (and it is to a lot of people) let's build abundance there. To do that, you need to build a plan around it. The book “ (Single Page Life Plan)” says that people who don’t care where they are going don’t need a roadmap. But I recognize the value of adding direction to my life and setting a course that aims my family toward our dreams and aspirations. Builders need an architectural plan. Pilots need a flight plan. CEOs need to build a business plan. Coaches need a game plan. Leaders need a life plan. We are the leaders of our family and responsible as a family steward to build a plan. So how do you do that? [bctt tweet="How do you build your family fortress? What does it mean? Find out in this episode of Best in wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] The single page life plan processWhat does the process of crafting a life plan look like? Here’s the single page life plan framework: Start with a mission statement. For example, “Be a positive influence in the lives of others at home and at work. Lead by example.” Secondly, you list your life categories (or what I call cornerstones): Family, friends, spirituality, health, career, finances, hobbies/interests, travel and entertainment, etc. Everyone’s cornerstones are different. You just need to nail down 6 cornerstones. Under each cornerstone, you need to list actionable steps to take following the SMART goal format (specific, measurable, achievable, relevant, and timely). The plan that you’re making should be well thought out by you. Here are some examples from the book: Schedule time with your spouse: Life gets busy. It’s necessary to make sure you’re giving your spouse intentional time together. Prepare and eat meals together: Plan and cook fun meals with your family. Continually strengthen your marriage: I use
How will the election impact your long-term investments? Will the election impact your long-term investments? Everyone is reading the headlines that are written for shock, awe, and impact and taking them as the gospel truth. Doing so can harm your investments. You need a long-term perspective on the stock market. Listen to this episode of Best in Wealth to hear how I think the election will impact your investments—and why you shouldn’t do anything about it. [bctt tweet="Will the outcome of the election impact your investments? I share my thoughts in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:13] No one has a long-term outlook [4:33] The two questions I get asked [7:42] It doesn’t matter who is in office [10:51] The annualized market returns for 9 presidents [15:43] Why you should embrace a long-term outlook What should you do if either president is elected?Most of the questions I’ve gotten recently about the stock market have to do with the election. They're one of two questions: What should I do with my investments if Biden is elected? What should I do with my investments if Trump gets reelected? I want to start by saying that the market does get volatile around election season because the market hates uncertainty. People make their trades based on millions of opinions. But if you check out the graph linked below, it separates each president from 1929 to 2020 and shows what their stock market returns looked like. There were 8 Republican presidents and 7 Democratic presidents during this time period. No matter who was president, the growth of your money has gone up in the long-run. There have been recessions, but the market always corrects itself. Keeping your money in the market is good for your long-term success. There is NO discernible conclusionBased on the information presented, it’s challenging to draw any conclusion. The market does just as well when a Democrat is in office versus when a Republican is in office. There is no discernible pattern between the two. We as investors want to see a connection so we can conclude what will happen in the stock market. But the reality is that there are so many different factors that impact the stock market beyond who is president. Investors want to simplify things to one driving factor, but that’s possible. What about oil prices? Interest rates? How will other countries impact the market? What about the pandemic? What if we go to war? Any of these things—and thousands more—can influence the stock market. They impact stock prices every single day. That’s not to say that the president can’t have an impact on the stock market and the economy. But there are so many other factors at play. [bctt tweet="What should you do with your investments if Trump is elected? What about Biden? I share my thoughts in this episode of the Best in Wealth podcast. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] What the annualized market returns tell usWhat do the annualized market returns (of the S&P 500) for the last 9 presidents show us? Richard Nixon: annualized return of -2.9% Gerald Ford (Republican): annualized return of 20.2% Jimmy Carter (Democrat): annualized return of 11.7% per year Ronald Reagan (Republican): annualized return of 15.8% per year George Bush (Republican): annualized return of 13.9% per year Bill Clinton (Democrat): annualized return of 17.6% per year George W. Bush (Republican): annualized return of -4.4% per year Barack Obama (Democrat): annualized return of 16% per year Donald Trump (Republican) = based on my research, his approximate annualized rate of return was 8.25% per year This is why it’s hard to predict what will happen in the stock market. Other than a couple of years likely influenced by recessions, the...
What do millionaires do to become millionaires? What are some of the habits that contribute to their success? In this episode of Best in Wealth, I share 25 survey answers that were conducted by Chris Hogan in his latest book, (Everyday Millionaires). If you want to achieve millionaire status in your lifetime, I highly suggest you give this a listen—and implement these strategies. [bctt tweet="How Do Millionaires Become Millionaires? That’s the topic of the latest episode of THE Best in Wealth podcast. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Millionaire" username=""] Outline of This Episode[1:05] Schedule a 15-minutes call with me! [2:21] The importance of grit & resilience [4:18] How millionaires become millionaires [7:34] The first thing that millionaires do [9:58] Millionaires control their own destiny [10:44] Statistics on millionaire habits [22:52] Millionaires DO stay married The misconception about millionaires74% of millennials and 52% of baby boomers believe that millionaires inherited all of their wealth. Survey says...that is a LIE. Don’t believe it. Most millionaires do not inherit their wealth. 8/10 come from families at or below the middle-class income level. It goes to show that anyone can become a millionaire with discipline and hard work. Each person starts at a different place. Each has their own obstacles to overcome. Millionaires come from all walks of life and socioeconomic backgrounds. In Chris Hogan’s book Everyday Millionaires, he talks about the things that millionaires do to be successful. I go over some of these things to help you rethink your finances and your investments. Sometimes we need to reset our mindset to have a better shot at success. I want everyone listening to this show to become multi-millionaires. Why? So you can build the cornerstones in your life to full abundance. [bctt tweet="What do millionaires do to become millionaires? What are some of the habits that contribute to their success? Find out by listening to this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Millionaire" username=""] Millionaires believe in themselvesBefore they were millionaires, they believed that they could become millionaires. They reject the voices that say “it cannot be done.” Instead, millionaires put their heads down, get to work, and make it happen. If you want to build abundance in your life it is up to you. Not your family, friends, or the government. It isn’t about owning your own business or taking huge risks. It’s about working hard and controlling your destiny through solid and sound investing. Speaking of investing, most people achieve millionaire status by contributing to their 401k or other retirement plans (IRA, Roth IRA, SEP IRA, 403B, etc.). Many of them have more than one retirement account. They’re likely contributing to a backdoor Roth or (Mega Backdoor Roth), too. Millionaires stick to a budgetMillionaires live on less than they make, plan for big purchases and pay with cash, and they use shopping lists and stick to them. In fact, 93% of millionaires use coupons! You can use an app like the EveryDollar Budgeting app to help you track your expenses. When you’re eating virtually all of your meals at home, the grocery line item can get VERY expensive. But if you stick to your list, you spend less. The average millionaire drives a 4-year-old car. I’m driving a 2015 truck with thousands of miles on it. Large car payments can disrupt you hitting millionaire status. That money should be going into savings instead. Speaking of savings, 70% of millionaires save more than 10% of their income. At one point in my life, I saved 50% of our working income. The...
I often get asked, “Should I pay off my house early?” and “Should I refinance my mortgage?” So in this episode of Best in Wealth, I answer those two questions. But to answer those questions, there are a few other questions YOU have to consider. What are they? How do they influence your decision? Which route should you take? Listen to find out! [bctt tweet="When Should You Refinance Your Mortgage? In this episode of Best in Wealth, I share my thoughts on WHEN and HOW to refinance. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""] Outline of This Episode[1:06] Should I pay off my house early? [3:57] How to determine if you should refinance [8:10] Which loan option is the best choice [9:27] What are your needs or goals? [15:10] The obstacles faced with a 15-year mortgage [17:12] The two refinancing strategies to use What does paying off your mortgage early really mean?I like the idea of paying off your home and reaching financial freedom—but what does it actually mean? Interest rates are as low as they've ever been. If you’ve got a great credit score and 20% down, you’re going to get a low interest rate. Possibly under 3%, depending on where you live. But if you took that same money and invested it, you could reasonably expect a 10% annual return (based on the history of the S&P 500 index). So you might say that your money is better off in the market from a net worth standpoint. But others may prefer the peace of mind of paying off their home. If you retire and your house is paid off, it helps your retirement projections. It feels good and it means freedom. Do you want freedom? Or do you want a higher rate of return on your money? How to determine if you should refinanceIf you’re considering refinancing, there are some questions you need to ask yourself first: Do you plan to remain in your home for a few years? If the answer is no, the cost may exceed any benefit. If you save $50 a month in interest by refinancing, but you plan to sell in 2 years, 50x24 months is a savings of only $1,200. If it costs you $2,000 to refinance, you probably shouldn't refinance—you’ll be losing $800 in that deal. Are you nearing a milestone event? Retirement? The end of an adjustable-rate mortgage (ARM) or balloon term? If the answer is yes, consider refinancing before your options become limited by income restraints. At that point, you might not qualify to refinance. Is your loan to value ratio greater than 80%? If the answer is yes, you don't have 20% down on your home and will have a hard time refinancing. You’ll still be subject to (private mortgage insurance) PMI. Has your credit score recently improved? You may be in the category of wanting to refinance. Are you locked into a fixed rate? Do you expect the rates to go up or down from here? They’ll probably go up from here. If you’re in an ARM, it might be time to lock in a fixed-rate now. What’s the interest rate environment? The interest rates have gone down in the last few months. After answering all of these questions, if you’re still in the category of, “Yes, I think I want to refinance.” then you need to look at what loan is the best for you. [bctt tweet="How do you determine if you should refinance? What are your options? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Which loan option is the best choice?If your current interest rate is 3.5%, how much lower does it have to be to be worth it? If you can lower your rate even half a percent, then you are winning. But you need to seek loan terms that best match your needs and goals. So—what are your needs and goals? Are you a veteran? Do you live in a rural area? Do you have a lower credit score or income? Then a VA loan, a USDA loan, or an FHA loan may work for you. They can offer lower down payments, good...
What is the Mega Backdoor Roth IRA Contribution? How can it be a game-changer for some high-earning individuals who are already maxing out their 401k plans? If you’re investing the maximum you can a year, think of how quickly you can hit financial freedom. If you’re passionate about investing as much of your income as you can—this is the episode for you. I explain the step-by-step process of finding out if you qualify. Don’t miss it! [bctt tweet="How do you execute a Mega Backdoor Roth IRA contribution? Find out in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:33] Dissecting the total compensation package [4:34] Executing a Mega Backdoor Roth IRA Contribution [6:55] Does your 401k plan allow non-Roth after-tax contributions? [9:46] Is there room under the ACP test to make additional contributions? [11:39] Calculating how much you can contribute [13:23] Does your plan allow for in-service distributions? [16:44] Are the non-Roth after-tax contributions moved to a separate account? Mega Backdoor Roth 101The first question you have to ask: Have I made the maximum salary deferral contribution of $19,500 into my 401k? If you’re 50 or older, have you contributed $26,000? If you haven’t maxed it out, you don’t qualify for the Mega Backdoor. You have to focus on maxing out your 401 contributions first. Secondly, Does your 401k plan allow non-Roth after-tax contributions? The answer can be found in your summary plan description. Your employer is legally required to give this to you when you’re hired—and if you ask for it again. If you login to your 401k provider’s website, you’ll often find it under the “documents” tab. If you can’t find it, email your HR rep and ask for a copy. If your plan doesn’t allow the non-Roth after-tax contribution—you can’t move forward. If it IS allowed, you can contribute above and beyond $19,500 (or $26,000). You CAN continue along this journey. The truth is that most plans don’t allow this, but it’s worth finding out. Is there room under the ACP test to make additional contributions?An,at%20the%20expense%20of%20others. (ACP test) is typically conducted each year to make sure the 401k plan doesn’t unfairly benefit a highly-compensated employee. It limits the amount that highly compensated employees can make. If you’ve maxed out your 401k, you’ll likely fall into that category. Ask your plan sponsor if you’re considered highly-compensated. What happens if you don’t ask? When the ACP test is done at the end of the year—after you’ve made the contributions—the money you contributed can get sent back. But if the plan sponsor says you aren’t considered highly compensated, you can move forward. [bctt tweet="In this episode of Best in Wealth, find out how to calculate how much you can contribute to a Mega Backdoor Roth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] How to calculate how much you can contributeHow do you calculate how much you can contribute? Add all of the employee and employer contributions that have been made this year—unless you’re 50 or over. You do NOT count the extra $6,500 contribution. Once that’s added, subtract it from $57,000. Why? In 2020 you can make up to $57,000 worth of retirement contributions inside of your plan. If you have more than one 401k, add up every plan you've contributed to. So you take $57,000 and subtract $19,500 and what your employer contributes you arrive at $31,500. That’s the amount you can contribute to the non-Roth after-tax portion of your IRA. Does your plan allow for in-service distributions?You can find the answer to this in...
Do you enjoy your job? Are you working every day in a field that you’re passionate about? Or are you like me and realized that doing something you’re passionate about means starting your own business? In this episode of Best in Wealth, I share a business startup checklist. I’ll cover many of the questions you need to consider before you start a business. If you’re ready to take the next step, give this one a listen! [bctt tweet="In this episode of Best in Wealth, I share my business startup checklist. It’s packed with important questions to consider before starting a business. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[2:04] How much do you enjoy your job? [4:45] Issues to consider when starting a business [6:27] Determine your personal cashflow issues [13:30] Business cashflow issues to consider [16:39] Legal and business formation issues [21:50] Tax planning considerations [22:26] What other issues might crop up? [24:09] Get the full checklist in the resources below! What does your personal cashflow look like?You NEED to ask yourself some questions about how starting a business could impact your personal cashflow: How is your personal cashflow going to change? Will you need a side hustle or a spouse's income? Will you need to use personal assets to start this business? Emergency fund? Savings?  Do you have other income sources available while building your business? You don’t want to pull money that was earmarked for retirement. Will your risk tolerance need to change in other areas? Your risk tolerance will likely need to grow with your business.  Do you need a contingency plan? Most businesses stall, go belly up, or don’t make the money you project so it’s important to have backup plans in place.  Do you have an emergency fund? You need to keep some liquidity for emergency expenses. The bottom line is that you can't sacrifice your family for your passion. The best way to build a business is by building a large runway of cash. I worked my day job FOUR extra years while starting Fortress Planning. It was important to me to have everything in order before I quit my day job. During that time I took the necessary classes and got needed certifications. If I had quit my job before taking these steps, I’d be eating up my cash reserves while not building the business. My suggestion is that you make sure you're doing everything you can before you quit your day job OR plan to have a side hustle to help with income. Lastly, if you’re married, make sure your spouse is bought into the vision. It’s a stressful endeavor and the support of your spouse is instrumental. If it wasn’t for her belief in my passion I may never have started this business. If she wasn’t for it, it would’ve been a tough road. Business Cashflow ConsiderationsThere are three main business issues to consider before launching your business: Do you need to research the amount necessary to launch or run the business? You need to put together a capital sheet to know how much you need to start the business. Will you need cash or financing to cover the costs until you become profitable? Many people take out a loan to start a business instead of saving the money needed. Starting a business in the red can be stressful and painful. If you don’t have a long enough cash runway, you can go out of business before you truly have a chance to build it. Do you expect income to fluctuate? If you’re getting a consistent paycheck now, it’s likely pretty different with a business. Can you get a line of credit to ease the business flow? The best recommendation is to have enough of a runway so that a line of credit isn’t necessary. We need to answer those questions before we quit our day jobs. [bctt tweet="What business cashflow questions do you need to take into consideration when starting a new business? Listen to this episode of Best
Are you trying to figure out how to save more? Are you in debt right now? Are you motivated to get out of debt? You can use your abilities to make more and save more. But how do you accomplish that? In this episode of Best in Wealth, I share some of the accounts you can use to not only save more money—but help it grow. Financial freedom makes the stress roll off your shoulders. If you’re ready to be in that place, listen to this episode for numerous strategies and resources. [bctt tweet="What accounts will help YOU save more? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #DebtFree" username=""] Outline of This Episode[0:34] The economy: Good news and bad news [5:02] Invest in depleted asset classes [7:04] Focus on becoming debt-free first [9:20] Healthcare savings: two things to think about [11:50] Take advantage of Roth/Roth IRA contributions [13:53] The Backdoor Roth [14:50] The Mega Backdoor Roth [16:15] Look into employer stock purchase plans [19:23] Consider an annuity or brokerage account Become debt-free—then focus on emergenciesWe want debt to be gone before you start to save more. Debt makes it difficult to truly save and reach financial freedom. Those who have adequate savings either make an incredible amount of money OR they make modest incomes but still save 30-50% of their income. How? By living below their means. Once you have your debt paid off, your focus needs to shift towards saving. But what? And how? You need to start with an emergency fund. How long of an emergency fund should you save up? 3 months: if both spouses are working 6 months: if you’re single 18 months: high-income earners or entrepreneurs Why so much for entrepreneurs? You may want at least 18 months of expenses set aside to take advantage of mobility and business opportunities that come your way. Health savings options: FSA and HSAIf you have a Flexible Spending Account (FSA), it’s a great place to put away pre-tax money when you know you’re going to be spending money on medical expenses (medical, dental, and vision). If it’s through an employer, you usually have to spend it before the end of the calendar year. If you have a high deductible health care plan, start using a Health Savings Account (HSA). If your employer doesn’t sponsor one, you can open one with a bank (or online bank). A single person can contribute up to $3,050 a year and a married couple up to $7,100. They help your current year taxes, you save more money, and when you pay medical you don’t pay taxes. Plus, you can carry the balance over to the next year. Many people don’t know this, but If you stay healthy—you don’t have to use the money on healthcare. You can keep the money in that account and invest it. Then, once you turn 65, the HSA acts like an IRA and you can withdraw that money in retirement (and hopefully get taxed in a lower tax bracket). Listen to the episode to learn more. [bctt tweet="Did you know that you can invest the money that you keep in an HSA? I talk about this and other ways to help YOU save more money in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #DebtFree" username=""] Roth IRAs, IRAs, and non-deductible IRAsIf your employer offers a 401k, you’re allowed to contribute $19,500 in 2020. If you’re 50+ you can contribute up to $26,000. Another option is a separate IRA or Roth IRA. If you make too high of an income, you won’t get a tax break upfront. It will be considered a non-deductible IRA. What does that mean? Money still grows tax-free, but when you withdraw any money out you’ll have to pay taxes as if it were income. So what are the income limits? As a family, you can make around $200,000 in taxable income and still contribute tax-free. You can contribute $6,000 or $7,000 if you're 50+. When it comes to the IRA...
Are you on track for retirement? Do you have enough money saved at this point in your life to retire or reach financial freedom by 65? One of the biggest questions I hear is: How much money do I need to save for retirement? In this episode of Best in Wealth, I do my best to answer that question using the formula Charles Farrell outlines in his book, (Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage of Life). You need to take actionable steps now to be prepared for your future. Outline of This Episode[0:35] What do you dream about doing? [3:58] Are you on track for retirement? [11:15] Why you need 80% of your current income [13:51] How do you come up with the $60,000? [17:37] What’s your job now? Get retirement ready with Charles Farrell’s formulaYou need to create a detailed retirement plan to really zero in on your goals and get the right steps in place to prepare. In his book, Charles Farrell shares a simplified version of how much savings you’ll need. I’ll give you some simple guidelines from this book that demonstrate where you should be at each stage of life. The goal is to hit at least 12x your household income in order to retire, so you can live off of 80% of that of your household income in retirement. Charles developed the Capital to Income Ratio. You can use it to find out if you’re on track to get to 12x your income by the time you retire. If your household income is $100,000 annually, you need to save $1.2 million for retirement. So where do you need to be at each age? Here are the income ratios by age, with the approximate amount you should have saved if your household income is $100,000 annually: Age Income Ratio Savings Required 25 0.1 $10,000 30 0.6 $60,000 35 1.4 $140,000 40 2.4 $240,000 45 3.7 $370,000 50 5.2 $520,000 55 7.1 $710,000 60 9.4 $940,000 65 12 $1.2 million So are you on track for retirement?Based on the table above—are you on track for retirement? Here’s how to calculate it: Take your household income and multiply that by the income ratio that correlates with your age to see if you’re currently on track. It’s easy to calculate if you’re paid a salary. If you aren’t, count the average of your pay for the last 4 years as your income. By the way, by money saved, we’re talking about things such as your 401k, IRA, annuities, CDs, life insurance, checking and savings, real estate, etc. Please note that your home is NOT a capital investment. How do you live on 80% of your current income?How do you live on 80% of your current income in retirement if you need 100% of it now? Where did Charles come up with that number? If you’re going to get to 12x your income by retirement age, you have to be saving 12–15% of your $100,000 annual income to get there. If you’re saving 12% now, you really only need 88% of your income to live off of. In retirement, you won’t be saving for your retirement anymore. Plus, your mortgage should be paid off by the time you retire. If your mortgage accounts for 20% of what you pay and we take off another 12% for savings, 7.65% for social security taxes, that brings you down to $60,000. So you really only need $60,000 to live off what you’re making right now. Social security will play a role—it typically replaces 20% of your income. If you’re making around $100,000 a year, it will make up the other $20,000 to bring you to the projected $80,000 a year in retirement. You want that extra $20,000 cushion to account for things like yearly inflation, medical expenses, or perhaps even vacations. Keep listening to find out why I think the 5% rule can be dangerous—and what I think you should do instead. What is your job now?But Scott, what if I’m not on track? Are you anywhere close? What if you’ve fallen behind? If you’re not on track for retirement, your job is to get on track. Once you figure out what you should have saved at your current age, there are
When I’m about to shake someone’s hand, pat their back, or give them a hug I stop short and say to myself: “Welcome to the new normal.” The COVID-19 crisis is new to all of us. The inability to shake hands, social distancing, the necessity of wearing face masks—it’s all new. But the phrase “The New Normal” isn’t, it’s been in use for decades. An article was published on the cover of Business Newsweek on August 13th, 1979 that was titled: The Death of Equities. In the article, they called inflation the new normal. Inflation was destroying everything and negatively impacting the stock market. The article said the stock market was a loser’s game and that—besides a lucky few—you wouldn’t make money in the stock market. The phrase has been tossed around numerous times throughout history—but what does it really mean? How does the new normal pertain to the stock market? In this episode of Best in Wealth, I talk about what the new normal has meant historically and what it should mean. [bctt tweet="Welcome to The #NewNormal. In this episode of Best in Wealth I talk about what that means—and what it should mean. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:18] Welcome to the new normal [3:44] The New Normal as it pertains to the market [7:01] The best way to deal with a crisis [9:06] We need to call it something different [14:18] Let’s make planning the new normal [15:06] What if you had listened to that article? What every “New Normal” has in commonWhat can we learn from the past that is predictive in the moment? Almost nothing. People are saying it’s different this time—and they’re right. This recession is because of a pandemic. But there were other crises that led to recessions. The Vietnam war, the savings and loan crisis, the Asian financial crisis, bubble, the great recession of 2008, and many more. Every financial crisis has a different cause and crises keep happening. Why? Because they're NOT predictable. If downturns in the market were predictable, things would self-correct easily. The truth is, all of these events only have one thing in common: each time they happen, people say “It’s different this time”. The best way to deal with a crisisEvery crisis IS different, but the best way to deal with them is always the same. We can’t control the crisis. But what we can control is how we respond to them. You need to prepare to deal with the unexpected before it happens—not when you're stuck in the middle of it. When you're stuck in the middle of it, you make bad emotional decisions. We should call it the old normal—because these things happen. Go back to the principles of dealing with the uncertainty in the stock and bond markets. Things don't line up exactly the way that we want them to, ever. So what do you do? [bctt tweet="What is the best way to deal with a crisis? Listen to this episode of Best in Wealth for my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #NewNormal" username=""] Two things we MUST doYou want to make sure you are doing two things to be prepared when every new normal comes around. Firstly, look at the probability of various outcomes and then decide how much risk you want to take. What is your risk tolerance? What is your risk capacity? What is your required rate of return to achieve everything that you want to? Then we can develop a portfolio that matches your risk level. Secondly, be prepared for market downturns once or twice a decade. Accept that you’ll never know when they’re going to happen. You don’t have to predict the crisis that’s coming, you just need to be prepared for it. When you have a plan and are prepared for a crisis, you feel better before and after they come. You don't need to stress out about your investments because you already know what the outcome is going to be when you live through the economic...
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Alexey V.


Sep 7th
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