Why Retirees Are Going Bankrupt

May 16, 2022

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Andre & Mara Simoneau

Andre & Mara Simoneau

Financial Consultants

Lynx Creek Cir

Frederick, CO 80516

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May 11, 2022

An Introduction to Crowdfunded Real Estate

An Introduction to Crowdfunded Real Estate

Home tours and late night toilet repairs.

That’s what most people think of when they hear the words “real estate.” You’re either an agent or a landlord. You’re either selling homes, or fixing up diamonds in the rough and renting them out.

But you probably don’t think of the word “app.” At least, not yet.

That’s because there’s a new way of owning real estate—crowdfunding.

Here’s how it works…

You’ve probably noticed that real estate is wildly expensive. Even before the housing insanity of 2021, few had the cash to buy land, homes, or commercial lots outright. The traditional method to get around this was to take out a loan. It was a barrier that limited real estate to either financial institutions, the wealthy, or scrappy home flippers.

But what if you could team up with dozens of other people to buy a property? Say you and twenty people pitched in on a home in a promising neighborhood with good schools. You split the rental income, and when the home gets sold, you cash your share of the profits.

Suddenly, real estate is far less intimidating—you can pool your resources with others to buy a stake in a property, without shouldering all the risk or responsibility yourself.

But that’s not all. If enough people pitch in, you could hypothetically start buying apartment complexes, supermarkets, even a skyscraper!

That’s the power of crowdfunding.

And recently, it’s taken off. The past few years have seen a surge in online real estate crowdfunding platforms.

The model is simple. You give the platform money, either as a lump sum or monthly deposit. They use your money to buy promising properties. You get dividends and appreciation. They get a fee for managing your money.

And for many platforms, you can simply download an app and make decisions about how much you want to contribute and see how your properties are performing from your phone.

Let’s be clear—this is NOT a recommendation to start crowdfunding real estate purchases. Far from it. It’s still a new industry which is relatively untested. As with all financial decisions, it’s best to consult with a licensed and qualified financial professional first.

But it’s worth knowing about this new way of owning property. Only time will tell if it becomes a staple of wealth-building strategies, or if it fizzles out.

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April 25, 2022

Lessons From the Super Frugal

Lessons From the Super Frugal

The world of the super frugal can be an overwhelming place.

In a sense, it’s inspiring. The creativity and grit of the super frugal are sure to put a grin on your face. You may even find a few fun money saving projects that are worth your time. Saving money with french toast? Sign me up!

However, there’s a fine line between inspiring and weird, and the super frugal sometimes cross that line. Could reusing a plastic lid as a paint palette save you money? Sure! The same is true for bartering with store clerks. Will you get funny looks? Almost certainly.

It’s not that funny looks are bad. There’s wisdom to defying the crowd and marching to the beat of your own drum. But sometimes there’s a good reason to raise an eyebrow at super frugality…

That’s because it can miss the point.

Your financial top priority must always be providing for those you love. In this day and age, that means building wealth.

Some people may need extreme measures to do that. Let’s say you have deep credit card debt or a spending problem. Coupon clipping, saving on utilities, and thrifting may help you knock that debt out faster and free up the cash flow you need to start building wealth.

But don’t mistake the means for the end. Obsessing over coupons, stressing over recycling, and cutting too many corners can reach unhealthy and even pathological extremes. That doesn’t create wealth and prosperity—it can just cause more suffering.

So take lessons from the super frugal. Find a few money savings projects that you enjoy. Maybe do a spending cleanse. But keep your eye on the ultimate prize—building wealth for you and your family.

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April 20, 2022

Are You Ready?

Are You Ready?

It’s not a question if buying is better than renting. It’s a question of when you’ll be ready to buy.

That’s because rent money is lost to your landlord forever.

A homeowner, though, has the chance for the value of their house to increase. It may not be an earth-shattering return, but there’s a far higher chance that you’ll at least break even from owning than renting.

Even with its advantages, owning a home isn’t for everyone… at least, not yet. Here are a few criteria to consider before becoming a homeowner.

You’re ready to put down roots. If you’re not yet prepared to live in one place for at least five years, home ownership may not be for you.

Why? Because buying and selling a home comes with costs. As a rule of thumb, waiting five years can allow your home to appreciate enough value to offset those expenses.

So before you buy a home, be sure that you’ve done your homework. Will your job require you to change locations in the next five years? Will local schools stay up to par as your family grows? If you’re confident that you’ll stay put for the next five years or more, go ahead and start planning.

You can cover the upfront costs of home ownership. The upfront costs of buying a home, as mentioned above, are no laughing matter. They may prove a barrier to entry if you haven’t been saving up.

The greatest upfront costs you’ll face are the down payment and closing costs. A down payment is usually a percentage of the total purchase price of your home—for instance, a home priced at $200,000 might require a 20% down payment, or $40,000.

Closing costs vary from state to state, with averages ranging from $1,909 in Indianna to $25,800 in the District of Columbia.¹ These include fees to the lender and property transfer taxes.

The takeaway? Start saving to cover the upfront costs of purchasing a home well in advance. Your bank account will thank you!

You can handle the maintenance costs of home ownership. Say what you will about landlords, but at least they don’t charge you for home repairs and maintenance!

That all changes when you become a homeowner. Every little ding, scratch, and flooded basement are your responsibility to cover. It all adds up to over $2,000 per year, though that figure will vary depending on the size and age of your home.² If you haven’t factored in those expenses, your cash flow—as well as your airflow—might be in for trouble!

Do you have residual debt to deal with? The great danger of debt is that it destabilizes your finances. It dries up precious cash flow needed to cover emergency expenses and build wealth.

That’s why throwing a mortgage on top of a high student loan or credit card debt burden can be a blunder. You might be able to cover costs on paper, but you risk stretching your cash flow to take care of any unplanned emergencies.

In conclusion, owning a home is an admirable goal. But it may not be for you and your family yet! Take a long look at your finances and life-stage before making a purchase that could become a source of stress instead of stability.

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¹ “Average Closing Costs in 2020: What Will You Pay?” Amy Fontinelle, The Ascent, Sept 28, 2020, https://www.fool.com/the-ascent/research/average-closing-costs/

² “How Much Should You Budget for Home Maintenance?” American Family Insurance, https://www.amfam.com/resources/articles/at-home/average-home-maintenance-costs

April 13, 2022

Can You Create a Will Without An Attorney?

Can You Create a Will Without An Attorney?

The short answer is YES. You can create a will without an attorney.

There are dozens of templates you can download and use to draw up your estate plan. It’s fast, easy, and convenient.

But the real question isn’t IF you can create your own will. It’s if you SHOULD.

Your will is fundamental to your financial legacy. It’s a legal document that must meet specific qualifications and standards because it’s going to control how your loved ones will receive the wealth and assets you’ve worked so hard to amass.

Any oversight with your will could result in the mishandling of your estate. Your assets could end up in the hands of the wrong people. At the very least, it could cause a legal headache for your family.

If your estate is simple, you might be able to navigate those challenges alone.

But you’ll most likely need an attorney if you…

  • Own a family-run business you want to pass to your children.
  • Plan to pass your wealth to a step-child or step-children.
  • Want to disinherit someone in your existing will.

In other words, you should hire a lawyer if your will is anything more than boilerplate. Otherwise, the risk and consequences of errors become too high.

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April 11, 2022

Discover Your Retirement Number

Discover Your Retirement Number

How much money will you need to retire?

It’s a question that has no single answer. Everyone has different financial needs that arise from their specific situation.

But there are methods and tools you can use to discover your personal retirement number. In this article we show three ways to estimate how much you need to save for a comfortable retirement.

Use an online retirement calculator. The beauty of retirement calculators is that they’re simple. Input some data about your savings, and you’ll get an estimate of how much you’ll have in retirement. They’ll let you know if you’re on target for your retirement goals.

Always take retirement calculators with a grain of salt. They’re each built on different algorithms and assumptions, so expect a range of results.

They also don’t know you personally, or your situation. You may have specific needs and plans that they can’t take into account.

Here are a few retirement calculators you can try…

The 4% Rule. This is the tried and true strategy for discovering your retirement number. It takes a little math, so grab your calculator!

First, let’s assume your income is $60,000 per year.

Next, let’s say that your annual retirement income must be 80% of your current annual income. So that’s $48,000.

Now, divide that by 4%…

$48,000 ÷ 0.04 = $1,200,000

Using the 4% Rule, you would need to have saved $1,200,000 to retire on 80% of your current income ($1,200,000 ÷ $48,000 = 25 years).

The Income Scale. This strategy, recommended by Fidelity, is more of a rule of thumb.¹

It aims for you to save 10x your annual income by age 67. It provides benchmarks along the way…

-1x by 30 -3x by 40 -6x by 50 -8x by 60

The only issue with this strategy is that 10x your income may not be enough for a comfortable retirement. For instance, a family earning $60,000 per year would only have $600,000 saved!

Each of these tools will help you estimate your retirement number. But the best way to discover your true number is to meet with a licensed and qualified financial professional. They can help you consider all the variables that may impact your retirement, and how to prepare.

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April 6, 2022

Understanding the Inverted Yield Curve

Understanding the Inverted Yield Curve

Inverted Yield Curve. It’s a phrase you may have heard before. More financial gibberish, right?

Wrong.

Paying attention to the yield curve is critical because it may indicate there’s a recession on the horizon. And as of March 29, 2022, it inverted for the first time since 2019.¹

What Is the Yield Curve?

The yield curve is simply a graph that shows the interest rates of different types of bonds. With a normal yield curve, bonds with lower lifespans (i.e., maturity) have lower interest rates. That’s because they’ll face less inflation and need less growth to keep up. By that logic, bonds with longer maturities have higher interest rates.

Put simply, if the yield curve is normal, a bond with a two year maturity will have a lower interest rate than a bond with a thirty year maturity.

So what happens when that gets inverted? Bonds with short maturities have higher interest rates, and bonds with long maturities have lower interest rates.

Why is that a big deal? Because it’s consistently correlated with economic recession. There have been 28 inverted yield curves since 1900, and 22 have correlated with recessions.²

And the average lead time from when the yield curve inverted to when the recession began was around 22 months.

This is not to say that you should start buying land in West Virginia or emergency rations. These are unprecedented times, and there may be other factors at play. But it’s at least a check engine light for your finances. Are you prepared for job instability? Is your emergency fund fully stocked? The time to start preparing for these possibilities is now. Meet with your financial pro today to make sure you’re prepared for whatever the future holds.

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¹⁺² “Explainer: U.S. yield curve inversion - What is it telling us?” David Randall, Davide Barbuscia and Saqib Iqbal Ahmed, Reuters, Mar 29, 2022, https://www.reuters.com/business/finance/us-yield-curve-inversion-what-is-it-telling-us-2022-03-29/

March 24, 2022

The Complete Guide to Buying Happiness

The Complete Guide to Buying Happiness

You’ve probably heard that money can’t buy happiness. But what if it could?

What if you were able to find a way of spending your money that made you happy, and the more you spent on it, the happier you became? Doesn’t sound possible, does it? But it IS entirely possible.

At least, that’s the premise of a paper written by scholars from Harvard, the University of British Columbia, and the University of Virginia. The title? “If Money Doesn’t Make You Happy Then You Probably Aren’t Spending It Right.”

The thesis? If you spend money right, it makes you happy. If you spend money wrong, it makes you feel… well, meh.

Here’s what they found…

Buy experiences, not things. The researchers found that people tend to be happier when they spend money on experiences rather than things. That’s because experiences provide us with opportunities to create memories, which can be recalled and enjoyed long after the experience is over. And as you get older, those memories become constant sources of joy, satisfaction, and happiness.

So if you’re looking to spend your money in a way that will make you happy, focus on things like travel, getaways, skydiving, sunsets, long walks, and conversations. Those will remain with you for the rest of your life.

Help others first. It’s a fact—social relations are critical for happiness. The better your relationships, the greater your happiness.

So it follows that one of the best ways to spend your money in a way that will make you happy is to help others. This could mean donating money to charity, or simply spending time with friends and family.

Focus on little pleasures. Another way to spend your money in a way that will make you happy is to focus on little pleasures. This one seems counterintuitive—shouldn’t you save a whole bunch of money and spend it on something fancy?

However, the paper cites research that frequency is more powerful than intensity. Is eating a 12oz cookie better than eating a 6oz cookie? Absolutely. But is it two times better? Probably not. It’s a concept called diminishing marginal utility—the more you indulge in something, the less enjoyable it becomes.

What does that mean? Frequent day trips beat rare but epic vacations. Fun, quiet date nights once per week beat going all out twice a year.

Pay now, consume later. Again, this seems counterintuitive. But it makes sense when you think about it.

Consider the all-too-common alternative—buy now, pay later. First off, this model encourages rampant spending. Without facing immediate consequences, it’s just too tempting to rack up debt and buy stuff you don’t need.

But more than that, it entirely removes antici…

.. pation from the equation. And that’s half the fun!

So instead of whipping out the credit card, save up. Pay cash. Delay gratification. You’ll enjoy your purchase more, and you’ll be happier overall.

So there you have it! The complete guide to spending your money in a way that will make you happy. Just remember—experiences over things, helping others first, little pleasures, and pay now, consume later. Follow these tips, and you may find that your money’s doing its actual job—making you happy.

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March 14, 2022

Financial Essentials for Retiring Baby Boomers

Financial Essentials for Retiring Baby Boomers

Are Baby Boomers out of time for retirement planning?

At first glance, it might seem like they are. They’re currently aged 57-75, meaning a good portion have already retired!¹

And those who are still working have only a few precious years to create their retirement nest eggs and get their finances in order.

Perhaps you’re in that boat—or at least know someone who is. If so, this article is for you. It’s about some essential strategies retiring Baby Boomers can leverage to help create the futures they desire.

Eliminate your debt. The first step is getting rid of your debt. After all, it’s not optional in retirement—you’ll need every penny to fund the lifestyle you want.

That means two things…

  1. Don’t take on any new debt. No new houses, boats, cars, or credit card funded toys.
  2. Use a debt snowball (or avalanche) to eliminate existing debts.

That means focusing all of your financial resources on a single debt at a time, knocking out either the smallest balance or highest interest debt.

Eliminating, or at least reducing, your debt can help create financial headroom for you in retirement. It frees up more cash flow for you to spend on your lifestyle and on preparing for potential emergencies.

Maximize social security benefits. Delay Social Security as long as possible (or until age 70). Delaying Social Security increases your monthly payments, so it’s a simple way to maximize your benefit.

For example, if you started collecting Social Security at age 66, you would be entitled to 100% of your social security benefit. At 67, it increases to 108%, and by 70 it increases 132%. That can make a huge difference towards living your dream retirement lifestyle.

Check out the Social Security Administration’s website to learn more.

Protect your wealth and health with long-term care (LTC) coverage. The next step is to protect your assets from the burden of LTC. It’s a challenge 7 out of 10 retirees will have to overcome, and it can be costly—without insurance, it can cost anywhere between $20,000 and $100,000. That’s a significant chunk of your retirement wealth!²

The standard strategy for covering the cost of LTC is LTC insurance. It pays for expenses like nursing homes, caretakers, and adult daycares.

But it can be pricey, especially as you grow older—a couple, age 55, can expect to pay $2,080 annually combined, while a 65 year old couple will pay closer to $3,750.³

The takeaway? If you don’t have LTC coverage, get it ASAP. The longer you wait, the more cost—and risk—you potentially expose yourself to.

Pro-tip: If you have a permanent life insurance policy, you may be able to add a LTC rider to your coverage. Meet with a licensed and qualified financial professional to see if this option is available for you!

Review your income potential with a financial professional. The final step on your path to retirement is reviewing your income options. You want to strike a balance between maximizing your sources of cash flow and keeping control over your retirement plan.

Many retirees lean heavily on two primary income opportunities: Social security and withdrawals from their retirement savings accounts.

And that’s where a financial professional can help.

They can help you review your current retirement lifestyle goals, savings, and potential income. If there’s a gap, they can help come up with strategies to close it.

You’ve worked hard and made sacrifices—now it’s time to reap the rewards of all that elbow grease. Which of the essentials in this article do you need to tackle first?

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¹ “Boomers, Gen X, Gen Y, Gen Z, and Gen A Explained,” Kasasa, Jul 6, 2021, https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z

²”Long-term care insurance cost: Everything you need to know,” MarketWatch, Feb 19, 2021, https://www.marketwatch.com/story/long-term-care-insurance-cost-everything-you-need-to-know-01613767329

³ “Long-Term Care Insurance Facts - Data - Statistics - 2021 Reports,” American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2021.php

March 14, 2022

3 Saving Strategies For College

3 Saving Strategies For College

In this day and age, it seems like college tuition is skyrocketing.

Students and parents are increasingly reliant on loans to cover the cost of higher education, often with devastating long-term results.¹

In this article we’ll cover three saving strategies to help you cover the cost of college without resorting to burdensome debt.

Strategy #1: Use “High-Yield” savings accounts. This strategy is simple—stash a portion of your income each month into a savings account. Then, when the time comes, use what you’ve saved to cover the costs of tuition.

Unfortunately, this strategy is riddled with shortcomings. The interest rates on “high yield” savings accounts are astonishingly low—you’d be hard pressed to find one at 1%.²

Even if you did, it wouldn’t be nearly enough. For example, if you had $3,000 saved for college in a savings account earning 1% interest per year, it would only grow to about $3,100 after four years—not enough to cover a whole semester’s tuition!

Even worse, inflation might increase the cost of tuition at a pace your savings couldn’t keep up with. Your money would actually lose value instead of gain it!

Fortunately, high-yield interest accounts are far from your only option…

Strategy #2: Consider traditional wealth building vehicles. That means mutual funds, Roth IRAs, savings bonds, indexed universal life insurance, and more.

The growth rates on these products are typically significantly higher than what you’d find in a high-yield savings account. You might even find products which allow for tax-free growth (the Roth IRA and IUL, for example).

But, typically, these vehicles have two critical weaknesses…

  1. They’re often designed for retirement. That means you’ll face fees and taxes if you tap into them before a certain age.

  2. They’re often subject to losses. A market upheaval could seriously impact your college savings.

Note that none of these vehicles are identical. They all have strengths and weaknesses. Consult with a licensed and qualified financial professional before you begin saving for college with any of these tools.

Strategy #3: Use education-specific saving vehicles. The classic example of these is the 529 plan.

The 529 is specifically designed for the purpose of saving and paying for education. That’s why it offers…

  • Tax advantages
  • Potential for compounding growth
  • Unlimited contributions

It’s a powerful tool for growing the wealth needed to help cover the rising costs of college.

The caveat with the 529 is that it’s subject to losses. It’s also very narrow in its usefulness—if your child decides not to pursue higher education, you’ll face a penalty to use the funds for something non-education related.

So which strategy should you choose? That’s something you and your financial professional will need to discuss. They can help you evaluate your current situation, your goals, and which strategy will help you close the gap between the two!

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Market performance is based on many factors and cannot be predicted. This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies for saving and/or investing that may be available to you. Any examples used in this article are hypothetical. Before investing or enacting a savings or retirement strategy, seek the advice of a licensed and qualified financial professional, accountant, and/or tax expert to discuss your options.


¹ “Student Loan Debt: 2020 Statistics and Outlook,” Daniel Kurt, Investopedia, Jul 27, 2021, https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007

² “Best high-yield savings accounts in August 2021,” Matthew Goldberg, Bankrate, Aug 25, 2021, https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/

March 2, 2022

Playing With F.I.R.E.

Playing With F.I.R.E.

Financial Independence. Retire Early. Sounds too good to be true, right?

But for many, it’s the dream. And for some, it’s even become a reality.

What is the Financial Independence Retire Early, or “F.I.R.E.” movement? It might be obvious, but it’s a movement of people who are striving to achieve financial independence so that they can retire early. How early? That’s up to each individual, but typically people in the F.I.R.E. movement are looking to retire between their 30s and 50s.

How are they doing it? By saving as much money as possible and living a frugal lifestyle. That might mean driving a used car, living in a modest house, and cooking at home instead of eating out. They scrimp and save wherever they can to save.

So why is the F.I.R.E. movement gaining in popularity? There are a few reasons…

Some people want freedom. They want the freedom to travel, to spend time with their family, and to do whatever they want without having to worry about money.

Others are tired of the rat race. They’re tired of working jobs they don’t love just so they can make money to pay for things they don’t really want. They’d rather be doing something they enjoy and have more control over their own lives.

And finally, people want security. They want the wealth they need to live comfortably and fear-free, and they want it now. They don’t want to wait until they’re 65 or 70 to start enjoying their retirement.

It’s a challenging path. Achieving financial independence and retiring early takes hard work, sacrifice, and planning. You’ll have to face financial challenges like covering health insurance, for one.

So if you’re thinking about joining the F.I.R.E. movement, what are some of the first steps?

1. Assess your finances. Figure out how much money you need to live on each month and how much you need to save to achieve financial independence.

2. Set financial goals. Determine where you want to be financially and create a plan to get there.

3. Make a budget and stick to it. Track your spending and make adjustments as needed so you can save more money.

4. Invest in yourself. Education is key, so invest in books, courses, and other resources that will help you build your wealth.

5. Stay motivated. Follow other F.I.R.E. enthusiasts online, read blogs and articles, and attend meetups to keep yourself inspired on your journey to financial independence.

So are you ready to play with F.I.R.E.?

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February 21, 2022

Debt is a Big Deal. Here's How to Use It Wisely

Debt is a Big Deal. Here's How to Use It Wisely

Debt must be respected. If you don’t take it seriously, it could derail your finances for good.

But while debt is no joke, it’s not necessarily bad. If handled wisely, debt can help you reach financial milestones and provide for your family.

It all starts with understanding the difference between good debt and bad debt.

Good debt is debt that you can afford and that can help you build wealth.

Think of it like this—often, you need to spend money to make money. But what if you don’t have mountains of cash to throw at every opportunity that comes your way?

That’s where good debt can help. It can give you the cash you need to seize opportunities like…

- Starting a business

- Buying a home

- Getting an education

Those can help you boost your income, purchase an appreciating asset, or increase your earning potential. And as long as you’ve done your homework and can afford your payments, good debt can help you leverage those opportunities with no regrets.

Bad debt is the exact opposite—it’s borrowing money to buy assets that lose value. That includes…

- Cars

- Video games

- Clothes

Debt can simply make these items more expensive than they already are. And what do you get in return? Nothing. Just more bills.

So if you find yourself borrowing money to buy things, stop and ask yourself: Am I making an investment? Do I think the value of this purchase will increase? Or am I simply spending because it feels good?

Here’s the takeaway—debt is a powerful tool that can be good or bad. Handle it wisely, and it can help you build businesses, buy homes, and increase your earning potential. Handle it carelessly, and you can cause serious harm to your financial stability. So do your homework, evaluate your opportunities, and meet with a licensed and qualified financial professional to see what good debt would look like for you.

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February 16, 2022

Manage Your Finances Like a Pro

Manage Your Finances Like a Pro

Do you ever feel like your money is going out the door as fast as it’s coming in?

Maybe you’ve tried budgeting, only to slip back into a pattern of unconscious spending.

Or maybe you’ve tried saving, but found that you simply don’t have enough cash at the end of each month.

If you’ve tried to get your finances in order but still struggle to stay afloat, this may be the article for you. Here are three dead simple things you can do right now to help you manage your money like a pro.

1. Download a budgeting app.

If you’re not a spreadsheet whiz, don’t worry. There are many free budgeting apps available that can help you keep your finances in order without breaking a sweat. Most of these apps make it easy to add transactions and set goals based on your income and expenses.

Best of all, some even sync with your bank account, so you don’t have to tally up your spending each month—the app does it for you!

Here are a few budgeting apps to consider…

Mint—Good overall budgeting app that syncs with your bank accounts

YNAB (You Need a Budget)—In-depth budgeting tool that’s more hands-on than other options

Mvelopes—Cash envelope budgeting system that syncs with your bank accounts

EveryDollar—Simple budget that requires manual input of expenses

Honeydue—Budgeting app designed specifically for couples

Each of these apps is free to use, but offer additional features for a monthly or annual fee.

2. Dial back subscriptions.

Do you have a gym membership, magazine subscriptions, or streaming services?

Better question—are you using your gym membership, magazine subscriptions, or streaming services?

If you’re like many, you’re shelling out money each month for subscriptions you don’t even use. You may have even forgotten that you’re still signed up for some of them!

But little by little, those subscriptions add up, depleting your cash flow each month.

So take some time to look at your transaction history to discover recurring charges. Then, cancel the ones you’re not using.

Pro-tip: You can also use apps like Truebill and Hiatus to help identify and cancel unwanted subscriptions.

3. Automate your savings.

Do you struggle to save money because of your spending habits? If so, it may be difficult to set aside cash while still having immediate access to it.

The good news is that you can set up an automatic transfer from your checking account to a savings account each month.

In fact, with this method, you don’t even have to think about it! It’s like paying a monthly subscription to a future of potential wealth and financial independence.

And it’s not difficult. Simply log in to your savings or retirement account and look for a transactions or transfers tab. Then, schedule a recurring deposit right after you get each paycheck. Just like that, you’ll automate a wealth building process that requires zero effort on your part.

If you want to manage your money like a pro, simply follow these three easy steps. With these simple moves in place, you’ll be watching your savings grow possibly faster than ever before!

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February 7, 2022

Why Debt Is A Big Deal

Why Debt Is A Big Deal

Debt is a word that strikes fear in the hearts of many. It ruins fortunes, causes untold stress, and topples governments.

Just ask a millennial about their financial struggles—student loan debt will certainly top their list.

But why? Why is debt so bad, anyway? After all, isn’t credit just money you can use now then pay back later? What’s the big deal?

Well, actually debt is a very big deal. In fact, it can make or break your personal finances.

This article isn’t for hardened debt fighters. You already know the damage debt can do.

But if you’re just starting your financial journey, take note before it’s too late. At best, debt is a tool. It certainly isn’t your friend. Here’s why…

It begins by lowering your cash flow. All those monthly payments bite into your paycheck, effectively lowering your income.

And that has consequences.

It can make it a struggle to afford a home. You simply lack the cash flow to afford mortgage payments.

It makes it a struggle to build wealth. Every spare penny goes towards making ends meet.

It makes it a struggle to maintain your lifestyle. You may find yourself choosing between the pleasures—and even the basics—of life and appeasing your creditors.

And that brings the risk of bankruptcy. It’s a last-ditch effort to erase an unpayable debt. It comes with a heavy price—creditors can take your home and possessions to make up for what you owe. And even if bankruptcy erases the debt, it will have a lasting impact on your credit score and financial future.¹

It can change your life forever, throwing your life into chaos.

Think about it—when was the last time someone smiled and fondly recalled that time they went bankrupt? Never. It’s a traumatic experience. This is something you want to avoid at all costs.

This isn’t to scare you into a debt free life or guilt you for using a credit card. Rather, it’s to educate you on the stakes. Debt isn’t something to be taken on lightly. It can have lasting consequences on your life, family, finances, and even mental health. Act accordingly.

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¹ “Bankruptcy: How it Works, Types & Consequences,” Experian, accessed Jan 7, 2022, https://www.experian.com/blogs/ask-experian/credit-education/bankruptcy-how-it-works-types-and-consequences/

January 26, 2022

Lessons You'll Learn on the Journey to Financial Freedom

Lessons You'll Learn on the Journey to Financial Freedom

Financial freedom is a process. It doesn’t happen overnight.

Instead, think of it as a journey with things to experience and lessons to learn along the way.

If you’ve embarked on the adventure of building wealth, here are 8 lessons about yourself and the world you can learn.

1. Money isn’t everything, but it makes things easier.

The first lesson you’ll learn on your journey to financial freedom? There’s more to life than money. There are people you care about. Hobbies that inspire you. Conversations that restore and heal you. Causes that matter. Without those, life is empty.

But you’ll also learn that money can make life easier.

It allows you to enjoy those things, to take care of yourself and your family, and to do something that has a bigger impact than what you might otherwise be able to do.

2. No one ever regrets saving for retirement.

“I should have saved less for retirement and spent more on clothes.” —No one

3. You can’t spend your way to happiness.

You’ll learn that there’s no amount of spending that can solve your problems. Instead of shopping sprees and new toys, you’ll come to prize experiences and memories above all else.

4. If there’s anything you want in life, you’ll need to work for it.

If something sounds too good to be true, it probably is.

If you want to build wealth and live a life you can be proud of, it’s up to you. There is no magic secret, no get-rich-quick scheme. And with that comes self-satisfaction and humility. If you have something, you’ve earned it. If it was given to you, it came from someone else who earned it.

5. Debt free doesn’t mean rich—just debt free!

Debt freedom is a critical step. But it’s not the destination.

Once you’ve eliminated debt, celebrate it. But this is no time to pause. It’s time to devote your resources to building wealth.

6. A job or career should never define you.

You are not your job. At minimum, your job is a tool to support your family. At best, your career is an avenue to express your talents and passions. But either way, your job should be aligned to, and subordinate to, your ultimate values.

7. Excuses and denials will destroy your dreams and freedom.

You’re going to be tempted. Whether it’s an expensive new toy, a nicer car you can’t really afford, or just another latte at Starbucks, the siren song of “I deserve this” can be loud. So can the “safety” of not being yourself or doing things just to impress others.

But no matter what, when you hear these things in your head, it’s time to pause. Is this really what I want? What am I trying to accomplish? What are my values? Those are your guides to financial freedom and happiness.

8. You’re far more powerful than you think.

As you progress in your journey to financial freedom, the hope is that you’ll wake up one day and notice that things are better. You’re less stressed. Your house feels more in order. You’re actually getting somewhere. And you’ll realize that you did that. Your good decisions and discipline is what got you here.

You can do things you never thought possible. You’re far more powerful than you think.

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January 24, 2022

Ways To Financially Protect Your Family

Ways To Financially Protect Your Family

What’s more worthy of protection than your family?

When you think of the people you love most, your family probably comes to mind.

When you think of your fondest memories, you probably picture your family.

When you think of who you’d give anything for, your family is at the top of the list.

So have you thought of how to financially protect your family if something were to happen to you? It’s no wonder if you haven’t. You likely weren’t taught how to keep your family’s finances safe.

Fortunately, it’s simpler than you may think! Here are a few ways to financially protect your family. Think of these as layers of fortification around the happiness, health, and safety of your home.

1. Create an emergency fund.

This is your first layer of defense. The goal? To catch and pay off any unexpected emergencies before they damage your finances. Otherwise, you may resort to costly debt to pay the balance.

There are two benchmarks for a good emergency fund…

First, it covers 3 to 6 months of expenses. That way you can weather even a significant stretch of unemployment or a considerable expense.

Second, the funds must be easily accessible. Remember, you’re not trying to grow this money into wealth. Instant access is far more valuable than rate of return.

2. Open sources of passive income.

Why? Because there may be times when working for money isn’t an option. If that happens, passive income can make all the difference.

Passive income does require an initial investment of time, money, and/or energy. But once it’s created, it can provide a constant stream of cash flow into your bank account.

Books, real estate, dividend yielding stocks, and even blogging can create passive income. Try your hand at a few with the help of a licensed and qualified financial advisor. If your finances grow tight, passive income may be the boost you need to make ends meet. It’s like giving your finances a second wind when the going gets tough.

3. Secure a life insurance policy.

Life insurance can replace your income in the event of a tragedy.

Think about it like this. If you passed away, your family wouldn’t just lose you. They’d also lose the income you provide. In addition to emotional grief, they may face a financial catastrophe.

Life insurance, when structured properly, can act as a safe house for your family. It can give them financial space to lay low, grieve, and make a new strategy for the future.

That’s why it’s common to buy life insurance that’s 10x your annual income. It gives your family the breathing room they will desperately need in the face of tragedy.

Which of these three ways to financially protect your family is most feasible for you to start right now? For many, it’s the emergency fund. If you don’t have one, let’s chat! We can review what it would look like for you to build one.

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January 19, 2022

How To Maximize Savings With A Limited Income

How To Maximize Savings With A Limited Income

It can be tough to save money when your income is tight.

But it’s not impossible. In fact, there are a lot of things you can do to make the most of your money and stretch your dollars further. Here are some tips to help you get started:

1. Track your spending. The best way to save money is to know exactly how much you’re spending and where you’re spending it.

Create a budget and track all of your expenses for a month or two so that you can see what areas are costing you the most money. Then, work on those categories first.

If there are some areas that you’re having trouble cutting back, try using a website like Mint.com to see if there’s a way to reduce spending in those categories. Maybe it makes sense for you to switch your cell phone plan or cancel the cable package. The key is to be aware of where your money is going.

2. Make your own meals. Eating out every day is a quick way to blow through your paycheck. Creating your own meals is almost always cheaper than buying prepared food.

Plus, by making more of your own food, you’ll have more control over what ingredients are going into it—which means you can make healthier food choices.

3. Use coupons and rebates to save money. If you redeem the right coupons, you can get a lot of free or discounted products and services.

Keep an eye out for coupons in your mailbox, in newspapers and magazines, and through online coupon sites like Coupons.com. You can also take advantage of rebates, which give you a discount on your purchase price after the product has been purchased.

4. Ask for discounts. If you’re buying something from a business, be sure to ask if they offer any kind of discount. Many times retail stores and restaurants will offer discounted items or free upgrades to customers who ask.

5. Get creative with your transportation costs. No, that doesn’t mean getting rid of your car. But there are things you can do to make transportation cheaper. For example…

Take public transportation when possible (it’s usually less expensive than buying gas and parking).

Carpool with other people who live in your area or work in your area.

Maintain your car to help avoid expensive repairs down the road.

Getting from point A to point B will always cost time and resources. But with these tips, it doesn’t have to make or break your budget.

6. Buy used items. Not only is it possible to find good used items at discount prices, but buying “recycled” gives an item a second life and keeps it from being thrown into a landfill. You can buy used items locally or on sites like Craigslist and eBay, and you can also try searching a local thrift store. You might be surprised by what other people consider junk!

7. Find the best prices online. Retailers know that shoppers love searching for the lowest price. Many of them will actually reduce their prices if you show them that someone else is selling an identical item for less.

Use a price comparison website like PriceGrabber to look up the items you want to buy, and then compare the prices of those products across multiple retailers.

Saving money on a tight budget is possible if you’re willing to get creative and look for ways to reduce your spending. By taking advantage of discounts, coupons, and rebates, by making your own meals instead of eating out, and by looking for the best online prices, you can stretch your dollars further.

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January 12, 2022

Financial Steps in the Right Direction

Financial Steps in the Right Direction

It’s not just about money. It’s about what you do with it… and how you feel about it.

It doesn’t matter if your balance is $0 or $1 million dollars, because that dollar figure is meaningless without context and perspective. What matters most is how you feel about your finances and the choices you make with them every day, week, month—all year long.

But there are some very practical things we can all do to keep our financial ship on course even in challenging times:

1. Pay off high-interest debt

2. Save 10% of your income

3. Buy life insurance now

4. Start a side gig

Pay off high-interest debt before saving for retirement. This is a very important step that should not be overlooked or minimized. Paying off credit card debt with high interest rates can save you huge amounts of money and make other savings goals easier to reach.

Save 10% of your income. It’s always wise to consistently save as much as you can. Yet, the rule of thumb that says we should save 10% of our income is still a solid one. Remember – saving is just for you – it’s not an investment per se, but rather a protection from any nasty surprises down the road and a way to ensure you have more money to save, invest and live on.

Buy life insurance now. Life insurance is often misunderstood and misused. As such, many people fail to see its value in terms of providing for their loved ones or even protecting their own future. However, life insurance provides a way to protect your family and business in the event of an unforeseen tragedy.

Start a side gig. It will not only provide you with a second stream of income, but will offer an additional sense of security and freedom.

For many people, their financial lives become clouded with stress and anxiety because they don’t have a way to earn extra money. The solution is often as simple as taking some of the time they’d normally spend watching TV and learning a new skill, or getting a part-time job on weekends.

However you choose to start making more money, focus on what is going to make you happier in life. Because if you’re financially free, secure and happy – that’s true wealth.

The most important thing to remember is that it’s not about how much money you make or have, but what you do with your money—how you feel about it. Make smart financial choices and things will happen for the better.

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January 10, 2022

Why Poverty Can Be Outrageously Expensive

Why Poverty Can Be Outrageously Expensive

Picture the most expensive lifestyle you can imagine. What do you see?

Palm trees and beach views? Italian shoes and Swiss watches? Flying yourself into space just because you can?

How about having to live in government housing, or working a minimum wage job, or not even being able to find a job?

It’s counterintuitive, but poverty can be outrageously expensive.

There are two main reasons…

  1. Poverty makes essential spending relatively pricey
  2. Poverty has hidden—and costly—side effects

Let’s break these down…

Poverty makes essential spending relatively pricey. Consider an example. Let’s say you’re single and earn $10,000 per year, $2,000 beneath the federal poverty line.¹

Let’s also say that you and some buddies snag a mediocre apartment in the city. Great location, right? But at $500 each per month, it’s $6,000 each per year. That’s over half your income on housing alone.

Your car? Between insurance, gas, and repairs, you’re looking at costs that could be north of $5,000.

That leaves you in the hole for $1,000. Then add groceries, your cell phone, and emergencies. Normal living expenses have not only consumed 100% of your budget, but they’ve left you in the red for other essentials.

For the wealthy, those items aren’t even a consideration. The essentials take up just a fraction of their income. What’s relatively cheap for them becomes crushingly expensive for you.

But the cost of poverty can get steeper…

Poverty has hidden—and costly—side effects. Suppose that, to save money, you downgrade your housing. You find a true hovel in a bad part of town that charges $150 each per month, or $1,800 each annually.

And it doesn’t take long for reality to set in.

You might find yourself in a so-called food desert since there aren’t proper grocery stores around you that sell healthy, affordable food. The quality of your diet plummets, but still increases in cost.

There’s consistent crime in your neighborhood. Possessions get stolen. Cars get broken into. Friends get hurt. You’re under constant stress.

To deal with the stress, you pick up some foolish habits that further hurt your finances and health.

You turn to payday lenders to make ends meet. It’s a critical mistake—they charge you aggressive interest rates that become a black hole of debt.

Finally, the consequences of a low-quality diet, stress, and unhealthy coping mechanisms emerge. You face one expensive health crisis after another. You have to quit your job as your condition worsens.

This isn’t to excuse bad or foolish or unhealthy behavior. Rather, it shows how situations make people vulnerable to otherwise avoidable pitfalls.

Relative expenses and hidden expenses creating a vicious cycle help explain why it’s so hard to escape poverty. It also helps explain why poverty tends to be intergenerational. Poverty actually consumes the resources needed to build wealth.

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¹ “Poverty Guidelines,” Office of the Assistant Secretary for Planning and Evalutation, Jan 13, 2021, https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines

² “Average monthly apartment rent in the United States from January 2017 to February 2021, by apartment size,” Statistia, Mar 25, 2021, https://www.statista.com/statistics/1063502/average-monthly-apartment-rent-usa/

³ “Average Car Insurance Costs in 2021,” Kayda Norman, Nerdwallet, Aug 20, 2021, https://www.nerdwallet.com/article/insurance/how-much-is-car-insurance

December 30, 2021

Stocks vs. Bonds: What's The Difference?

Stocks vs. Bonds: What's The Difference?

You’ve probably heard of both stocks and bonds. You also might know that they’re tools that many use to build wealth.

And if you have your ear to the ground, you know that stocks and bonds aren’t created equal—stocks are usually riskier, bonds are usually safer.

But…why? What’s the difference between these wealth building vehicles?

Glad you asked! Let’s explore how stocks and bonds work.

Before we begin, bear in mind that this article is for educational purposes only. It’s not recommending one vehicle over the other or a particular strategy. It’s just illuminating the differences between two common investments.

In a nutshell, a bond is a loan, while a stock is a share.

Let’s start with bonds. Governments need money to function. Historically, they’ve kept the lights on through conquest and taxation. Conquest has fallen out of fashion in the last 100 years, and sometimes taxes just won’t cut it.

So instead of demanding more money in taxes or—yikes—printing more, governments can issue bonds.

A bond is a loan. You voluntarily loan the government money, and they pay it back with interest. You get a fixed income stream, they get to build roads and schools.

Other entities can issue bonds, like states, cities, and corporations. But when people talk about bonds, they usually mean Federal Bonds. Why? Because they’re generally perceived as safe. The U.S. government has a consistent track record of paying back bond-holders.

A stock is ownership. When you buy a stock, you’re essentially buying a tiny slice of a corporation.

Why would corporations sell ownership to the masses? Because it’s a simple way to raise money. They then can use this money to expand the business, increasing the value of their stock. Eventually, you may choose to cash out your stocks for (hopefully) a handsome profit.

Some stocks also pay a portion of their earnings to stockholders. This is called paying a dividend. Normally, it’s calculated as a percentage of your stock. For instance, a $10 stock with a 2% dividend would pay $.20 each quarter.

But there’s a major catch to buying stocks—they are far less stable than federal bonds. That’s because corporations can experience bad years and even bankruptcy.

And when that happens, stockholders lose money. So while there’s potential reward for buying stocks, there’s also more risk.

That’s why it’s absolutely critical to work with a financial professional if you want to start investing in either stocks or bonds. They have the knowledge and experience to guide you in wealth building decisions based on your goals.

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November 29, 2021

3 Reasons to be the Financial Early Bird

3 Reasons to be the Financial Early Bird

Extra-large-blonde-roast-with-a-double-shot-of-espresso, anyone?

As the old saying goes, “The early bird catches the worm.” But not everyone is an early riser, and getting up earlier than usual can throw off a night owl’s whole day.

When it comes to building retirement wealth, however, it’s best to imitate the early worm. So grab a cup of joe—here are 3 big advantages to starting your retirement savings early:

1. Less to put away each month

Let’s say you’re 40 years old with little to no savings for retirement, but you’d like to have $1,000,000 when you retire at age 65. Twenty-five years may seem like plenty of time to achieve this goal, so how much would you need to put away each month to make that happen?

If you were stuffing money into your mattress (i.e., saving with no interest rate or rate of return), you would need to cram at least $3,333.33 in between the layers of memory foam every month. How about if you waited until you were 50 to start? Then you’d need to tuck no less than $5,555.55 around the coils. Every. Single. Month.

A savings plan that’s aggressive is simply not feasible for a majority of North Americans. Over half of Americans are just getting by, living paycheck-to-paycheck.¹ So it makes sense that the earlier you start saving for retirement, the less you’ll need to put away each month. And the less you need to put away each month, the less stress will be put on your monthly budget – and the higher your potential to have a well-funded retirement when the time comes.

But what if you could start saving earlier and apply an interest rate? This is where the second advantage comes in…

2. Power of compounding

The earlier you start saving for retirement, the longer amount of time your money has to grow and build on itself. A useful shortcut to figuring out how long it would take your money to double is the Rule of 72.

Never heard of it? Here’s how it works: Take the number 72 and divide it by your annual interest rate. The answer is approximately how many years it will take for money in an account to double.

For example, applying the Rule of 72 to $10,000 in an account at a 4% interest rate would look like this:

72 ÷ 4 = 18

That means it would take approximately 18 years for $10,000 to grow to $20,000 ($20,258 to be exact).

Using this formula reveals that the higher the interest rate, the less time it’s going to take your money to double, so be on the lookout for the highest interest rate you can find!

Getting a higher interest rate and combining it with the third advantage below? You’d be on a roll…

3. Lower life insurance premiums

A well-tailored life insurance policy may help protect retirement savings. This is particularly important if you’re outlived by your spouse as he or she approaches their retirement years.

End-of-life costs can deal a serious blow to retirement savings. If you don’t have a strategy in place to help cover funeral expenses and the loss of income, the money your spouse might need may have to come out of your retirement savings.

One reason many people don’t consider life insurance as a method of protecting their retirement is that they think a policy would cost too much.

How much do you think a $500,000 term life insurance policy would cost for a healthy 30-year-old?

$33 per month.² That’s a cost that would easily fit into most budgets!

You may still need a little caffeine for the extra kick to get an early start on powering up your brain (or your retirement savings), but sacrificing a few brand-name cups of coffee per month could finance a well-tailored life insurance policy that has the potential to protect your retirement savings.

Contact me today, and together we can work on your financial strategy for retirement, including what kind of life insurance policy would best fit you and your needs. As for your journey to the brain-boosting benefits of being bilingual – just like with retirement, it’s never too late to start. And I’ll be here to cheer you on every step of the way!

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¹ “Nearly 40 Percent of Americans with Annual Incomes over $100,000 Live Paycheck-to-Paycheck,” PR Newswire, Jun 15, 2021, https://www.prnewswire.com/news-releases/nearly-40-percent-of-americans-with-annual-incomes-over-100-000-live-paycheck-to-paycheck-301312281.html

² “Average Cost of Life Insurance (2021): Rates by Age, Term and Policy Size,” Sterling Price, ValuePenguin, Nov 19, 2021, https://www.valuepenguin.com/average-cost-life-insurance

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