best time to invest

When is the Best Time to Invest

Having served as a financial service professional my entire career and I am repeatedly asked two questions: “When is a good time to invest?” and “Where’s a good place to put my money?”

I struggled tremendously with my response when I was a novice, but now that I’m a seasoned pro, it’s straightforward. I would always get tripped up on trying to sound smart or talk long enough to assure the person I knew what I was talking about. As I’ve matured, responding is so much easier. My answer to the first question, NOW! Today is a great day to invest (in something), and tomorrow will be too!

Now, both of your questions have been answered, so you can move forward and start investing. But wait, just giving you a simple answer isn’t enough. I know you will have some follow-up questions, and now comes the pivotal point in this exchange.

You’ve got two options:

1. Schedule a time with the professional and dig a little deeper about what you’re trying to accomplish with the money you want to invest. PLEASE keep this in mind…this meeting might cost you money. A financial service professional also has a family, bills, goals, etc. They are running a business. Just ask yourself, would you be okay working every month and not getting paid? If someone is offering free assistance, it will generally be limited in scope because whatever you are discussing could have been found/read on the internet. Thus, you need to decide if it’s worth you paying someone to help you get it done. If you are concerned after someone quotes you a price, make sure to shop around a bit (but not too long) to see what else the market is offering. Keep in mind, if you are paying someone, chances are you are serious and will follow through on things since you’ve put some “skin” in the game. Generally, people don’t truly value free advice; thus, they rarely take action after receiving it. You know yourself, so the decision is up to you.

2. Use one of the many do-it-yourself platforms that various financial institutions offer. With this option, you will be required to do your research and decide what you want to invest in. All of the platforms are extremely user-friendly, so you shouldn’t have any issues if you are tech-savvy.

You are now equipped with a few options to help you start (or reviewing) your investment plan. Once you have made a decision on which option, you have to act promptly. PLEASE do your best to avoid the awful disease called “paralysis by analysis.” The stock market doesn’t care how long it’s going to take for you to make a decision; you just need to do it. I would seriously hate for you to miss out on an opportunity because you’re still “thinking” about what to do.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

taking inventory

Taking Inventory

Getting your financial house in order is a goal that most people set for themselves. Of course, not everyone will get things in order at the same stage in life. Like anything else, most people will do things when they are ready, not when some financial professional tells them to do so. Or they will decide to take action as a response to a life event. Here are a few examples.

Let’s say you have a friend (who has young children and a spouse) that passes away unexpectedly. After witnessing that, you decide to get serious about having adequate life insurance to protect your family. Or you have a co-worker who is getting well into their golden years but still HAS to work because they didn’t save/invest appropriately for retirement. Only then do you decide to start taking retirement planning seriously.

No matter your excuse or fear around financial planning, you must take it step by step. You have to crawl before you can walk, and you must walk before you can run.

Completing a personal balance sheet is the “crawl” step that everyone should take. This document, which you can find pretty much anywhere on the Internet, is easy to complete. It’s going to require you to list everything you own (assets) and everything you owe (liabilities). With some basic math (assets – liabilities), you will be able to determine your net worth.

Taking this “inventory” enables you to focus on where you need to start related to your financial plan. Plus, as you continue to move forward with your financial plan, this can serve as your barometer of financial fitness. The goal is to continue to grow your assets while decreasing your liabilities.

Some experts will recommend that you update your balance sheet once a year. However, if you are the type that needs more frequent feedback, perhaps you should consider updating your balance sheet quarterly or twice a year.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

spare change

The Spare Change Experiment

I would like to share a story about why it doesn’t make much sense to keep all of your money in a bank account. Disclaimer: Having a bank account is essential. As a rule of thumb, having 3-6 months of savings (6-12 months is even better) in a bank or credit union is appropriate, but anything over that doesn’t make much sense.

During a previous job, I was an avid commuter. Every weekday I would take the train to and from work. On several occasions, I would notice that there was always spare change on the ground while passing through the turnstiles at the station. Pennies were the most plentiful, but I found $1 coins and even paper money even on a few occasions. If I had to pay for an additional fare or replace my train ticket, I would typically find spare change near the machine. What started as a simple observation turned into an obsession. Each day as I passed through the train stations, my eyes were transfixed on the ground, scanning for any signs of free money. My addiction took an even bigger turn because, after a week of doing this, I set up an excel spreadsheet to track my earnings. This adventure went on for nearly two whole years!

So what exactly is the point of my experiment? During the first year, I collected nearly $30 (this total excluded the paper money found) off the ground at the train stations. I’m sure you may have been thinking this while reading this article; yes, I carried hand sanitizer in my bag. That year, my bank only paid me $15 in interest from my savings account. The previous year my bank only paid $13 in interest from that same savings account.

Now the recommendation isn’t to become some spare change scavenger while you’re out in public. Still, from one (seemingly silly) experiment, I accumulated more money than what my financial institution was paying in interest for the past two years. This makes a very compelling argument for those people who are afraid of investing. Investing your money in the stock market or some other investment vehicle allows your money to work a little bit harder for you. Yes, the stock market can be a frightening place (when you don’t understand it), but if you look at any historical data about the stock market, you will see some magical things that have happened over the long haul. And yes, if you analyze the stock market in specific time frames, it would scare the boogie man. However, investing is an excellent thing that everyone should do, and the longer time horizon you have for investing, the better.

Lastly, I heard many people express that there isn’t any risk when your money is in the bank. However, keeping all of your money in the bank makes you highly susceptible to purchasing power (inflation) risk. Just so you don’t forget, when it comes to financial products, whether it’s banking or investing in the stock market, risk is ALWAYS involved.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

rtmnt crisis

The Retirement Savings Crisis

The National Institute on Retirement Security produces research studies, and their primary focus is, you guessed it, retirement. They published a study in June 2013 entitled “The Retirement Savings Crisis: Is It Worse Than We Think?” It was startling to read through the key findings of the report. If you get a chance, take a look at the report, and even if you’re not in the financial services business, the data is alarming. They produced another study in December 2013 about Race and Retirement, and that study was even more frightening. Honestly, year after year, the updates on the data they produce doesn’t get much better.

The first key finding from that report stated that 38 million working households have NO retirement account assets at all. The sad thing, that number includes workers who are offered a retirement plan through their employer but who refuse to put any money into the plan. It’s understandable that some companies do not offer a retirement plan. Thus the individual is responsible for setting something up on their own. If your employer offers you a retirement plan and you’re not putting any money into it, you need to have a serious discussion with yourself or someone about why. If you don’t know how to get started or have the slightest idea about what you’re doing, your benefits department will be more than happy to assist you. They’re providing you the 401k or some other retirement plan, and they will gladly walk you each step of the way. If not them, then the plan sponsor (the company hired to offer the retirement plan) can provide you that assistance. Please make that phone call, send an email, find a co-worker who understands the retirement plan, do something.

For those people who are not offered a retirement plan through their employer, then you must seek out someone on your own to help get you squared away. There isn’t a shortage of financial services professionals in this country. And if you don’t want a professional’s help, there are a plethora of do-it-yourself options available. Either way, there is absolutely no good reason as to why you shouldn’t have some of your money in a retirement account. If you are still unsure why this is of the utmost importance, ask yourself one question. After all your working years, wouldn’t you like to have something to show for all those hours you worked??

Retirement planning applies to every working individual in this country. If you’re just starting in your career, then time is on your side. It doesn’t take a ton of time for you to do this, but it does involve committing. So many people say that they don’t have time to do this planning, which is bologna. There is more than enough time within a year (8766 hours) for you to work on your retirement plan. Not taking your retirement plan serious is just not cool. There are similar studies done and year after year, and the data never seems to improve. We can most certainly do better only by asking ourselves one simple question.

How much time did you spend this year or last year planning for your retirement?

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.


How to Settle A Negative Account

Many people struggle with debt. Sometimes, you may not be sure how to attack it, especially if you’re delinquent on multiple accounts. Typically, the creditor will make various attempts to recoup the money that is owed to them; however, at some point they may give up and charge-off what you owe them. A charge-off means that the creditor has given up on trying to get the money from you. After that, two things occur…1) they refer the account to a collection agency (either an in-house firm or third party) who then becomes responsible for recouping the money, and 2) it’s reported as a negative item on your credit report.

Trying to settle that account in some form or fashion with any long-overdue account may be your best bet. Sometimes, if an account has gone to collections, they may even send you a letter stating that if you pay 70%-80% of the outstanding balance, then you’re good to go. For example, if you owed $10,000 and you can settle by paying $7,000, then that’s a win!

But if that’s not the case, here are some things you NEED to know about settling an account:

  1. You have rights under the Fair Credit Debt Collection Practices Act (FDCPA). Sometimes creditors and collectors can appear to be a nuisance, but keep in mind they are just doing their job. However, they have guidelines that they must adhere to and being abusive and or harassing is a big no-no.
  2. Make them validate the debt. Collection agencies purchase debt from the original creditor or they are working on behalf of the original creditor. If the collection agency contacts you and asks for repayment, ask them to verify that you owe the money. Per the FDCPA, collection agencies assigned a debt are not the creditor; therefore, they cannot prove that you owe the money. Why? Simply because you never signed a contract with them. However, there is one exception; if the agreement you signed with the original creditor has the insertion “…debtor agrees to be responsible for payment of this debt to a creditor or its assigns”.
  3. Build rapport with your creditors/collectors. Dealing with creditors and collectors can be intimidating, but you created the debt and owed the money. Explain to them that you’re unemployed or that an unexpected death or illness has occurred. They need to know something and understand that life happens, but leaving them in the dark about your situation is NOT the thing to do.
  4. If negotiating payment arrangements, make sure you have the money! Having the money to negotiate with is essential. Knowing this dollar amount will allow you to discuss a realistic payment schedule that fits your spending plan. Also, the terms you discuss will, of course, need to be acceptable to your creditor.
  5. While negotiating, keep your emotions in check. Again, your creditor has a job to do, and you owe the money. But they will be more willing to listen to you if you stay cool, calm and collected during the entire process.
  6. DOCUMENT, DOCUMENT, DOCUMENT! You must get everything in writing once you have negotiated a settlement payment or plan. Once that’s complete, ask your creditor to fax, scan/email or mail the plan to you.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.


The Rule of 219

Retirement planning applies to every working individual in this country. If you’re just starting in your career, time is on your side. If you’re halfway through, then you should be regularly doing a retirement checkup. If you’re winding down, hopefully, you are adequately prepared to enjoy your golden years.

If you don’t think retirement is important, look at some of the research reports from the National Institute on Retirement Security. If you don’t have time to read each report, peruse the executive summary, and you will get a good flavor of just how horrible this country is doing on the retirement front. That information will blow your mind!

Without proper retirement planning, that virtually means you have only a few options

  1. you need to receive an inheritance
  2. you need to win the lottery
  3. you will or plan on working forever
  4. you pass away the day after you decide to retire

Most people will probably frown at options 3 & 4, and many of us won’t have the luxury of option 1. Option 2, good luck because the odds are not in your favor. People don’t have much saved for retirement because they never set a goal. Plus, we have no clue how much money we are going to need in retirement.

There are so many variables that you simply can’t plan for, but as a starting point, search “retirement calculator” in your internet browser and play around with the numbers. At least that’s a start. But just to put things in perspective, let’s do some simple math concerning the amount of money we’re all going to need in retirement. The rule of 219 is not widely discussed, but here’s how you get the number. The rule assumes:

  • you and a spouse/partner/significant other (2 people)
  • eat 3 meals/day at $5/meal
  • you do this for (20) years
  • there are 365 days in a year

Thus 2 x 3 x 5 x 20 x 365 = $219,000. Obviously, every meal you eat won’t be $5, you may not have a spouse in retirement, and you may live longer than 20 years in retirement. This rule makes a ton of assumptions; however, it is easy to understand—the alternative, trying to determine your retirement number by conducting a time value of money calculation. Simplicity is the goal of this rule.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

up and down

The Ups And Downs of the Market

Are you afraid of the stock market? If so, hopefully, there is a good reason as to why you are scared. If your reason isn’t one from experience in dealing with the market directly, then that’s a significant problem. Many people have professed that the stock market is a terrifying place simply because the market could be up or down on any given day, which is defined as market volatility. Because of the constant change that plagues the market, many opt to keep money safe, typically in banking-related products or a shoebox at the house. If you are trying to make money work for you over the long-term, then the stock market is where a portion of your money needs to be.

The fear of the stock market, like anything else, stems from a lack of understanding. The first thing you need to understand is that there are two types of market cycles; bear markets and bull markets.

Bear markets: (pessimistic outlook) the stock market is declining, and we tend to see investments losing value. Investors who get into the market during this period tend to ride the investment down and then sell out after significant losses, locking in their losses.

Bull market: (optimistic outlook) the stock market is trending upward, and we see investment gains. Investors see more significant returns, which prompts them to take a more aggressive approach than they’re comfortable doing. People often get into an investment after the biggest gains have been made, and the actual return to the investor may be much smaller than the investment reports.

Typically, investors will shift between being bearish/bullish on the stock market based on factors such as global economic concerns, national economic data, and corporate financial performance.

Knowing the market cycles is helpful, but now you’re probably thinking about one or both questions; When is a good time to get in the market? When is a good time to get out? This would be classified as “market timing”; you’re trying to buy when stocks are at their lowest and sell when they’re at their peak. Historically speaking, the stock market’s best performances (in any given year) come on a handful of days. No investment professional has a crystal ball allowing them to see into the future, so your best bet is to avoid market timing at all costs. Of course, you may run into investment people who claim they can time the market but keep in mind, it’s not sustainable over the long-term.

Here are a few tricks to the investing game that will help you deal with the volatility of the stock market:

  1. Get invested and stay invested. Don’t let short-term market fluctuations drive your long-term strategy. As a reminder, you should invest in the long-term and not try to “time” the market.
  2. Consider asset allocation; this is an investment strategy that involves spreading your money across the major investment types, like stocks (equities), bonds (fixed income), cash, and equivalents.
  3. Utilize dollar-cost averaging; this strategy involves investing the same amount of money into your investment, regardless of the market is up or down. This allows you to buy more shares when prices are lower and fewer when prices are high. Over time, this results in you lowering the average cost of your shares.
  4. Re-evaluate your attitude toward risk; it’s important to do this as you go through the various stages in your life.

Hopefully, this will help rid you of some of that fear about the stock market. Also, there are PLENTY of financial services professionals who can help you determine the best investment approach for your situation. And if you opt not to work with a professional, there are countless resources for the do-it-yourself investor.

I wish you all the best, my fellow investor!

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

dyk LI

Did You Know This About Life Insurance

Life insurance is a dynamic financial vehicle, but most people only refer to it as death insurance. Yes, if you have a policy and you’ve been paying your premiums and pass away, a sum of money will be paid out. Who or what gets that sum of money is totally up to you.

Many of you reading this might not have known this, but people use life insurance while they’re alive. Did you know that life insurance can be used to fund a child’s education? Did you know that people utilize life insurance to supplement their retirement income? Did you know that if you borrowed against (taking a loan) your life insurance policy, that in some cases, you don’t have to pay the loan back? Life insurance is a phenomenal tool but it gets such a bad reputation; however, there are so many ways that people can use life insurance while they’re alive. It’s one of the most flexible products that exist, but most people don’t take the time to educate themselves properly.

If you didn’t know about those awesome things that life insurance can do (and that was only an appetizer), perhaps you should schedule an appointment with an insurance agent and let them explain it to you.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

debit card

Is The Debit Card Becoming Obsolete?

We are all familiar with what happens when you go into the bank and meet with one of the bankers. They want to make sure you’re taking full advantage of your banking relationship. One thing they will all be sure to mention is their latest and greatest credit card offer for which you’ve been pre-approved, or they state that the credit card you have isn’t their best one. Either way, you didn’t go into the bank that day to get a new credit card. Has your banker ever challenged you to rethink the reason you use your debit card?

Your debit card has a few benefits, and it enables you to buy goods/services, helps you avoid having a ton of cash on hand (safety), withdraw money from the ATM, and serves as identification if you’re doing a transaction at the teller window. Those benefits are not that compelling, which is what this banker was expressing during a recent conversation. This was when the “ah-ha” moment occurred. Why do we consistently use our debit cards to make purchases? They give us no benefit whatsoever when we could be receiving cash back, travel rewards, points to buy stuff, etc.

Now, some of you may be thinking that it’s silly to use a credit card when you already have the money to pay for something. That makes perfect sense, but have you ever thought about it from the other side. Since you do have the money already (and I’m assuming you do), why not take advantage of the benefits and pay off the full balance at the end of the billing cycle. Now, you won’t be worried about carrying a balance that may be subject to an interest charge. And, you will have reaped the benefits (rewards) of using the credit card. Keep in mind, this type of strategy will not work if you are not a responsible financial steward. Utilizing such an approach will also require you to have a steady income, which will allow you to make that payment each month. Not making that payment and incurring that interest charge is what the bank wants you to do. Let’s make sure to stay in control and use what the bank is offering to your advantage.

You still might not be convinced about this credit card idea, and it’s only because most people don’t challenge the status quo. We’ve been programmed to think a certain way for so long that it’s hard to change. But think about how much money you spend each year on food, dining out and groceries, gas and entertainment. Wouldn’t it be nice to get something in return for all of that spending you’re already doing? The banks know this is where you’re spending your money; thus, they offer these credit cards. All you should do is figure out which rewards suit you best and utilize that credit card to your advantage.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

LI faq

Life Insurance FAQ

Life insurance is an extremely important product that should be a part of EVERYONE’S #buildwealth plan. Here are some common frequently asked questions as it relates to life insurance.

How much life insurance should I own?

There is no single right answer! Some experts will recommend that you have an amount that is equal to 6 – 10 times your annual gross salary. Others say you should opt to have 2 times your annual gross salary. Coverage amounts are individual and certainly not “one size fits all.” The really nail down how much, it’s best that you meet with a financial professional and complete a personal needs analysis.

When should I review my current coverage?

Your situation has probably changed since you first purchased your life insurance policy. If something were to happen to you today, would your family have enough coverage? Generally, it’s recommended that you meet with your financial professional once a year, however, if you have done any of the following since you purchased your policy, you should review your coverage as soon as possible:

·        Purchased a home

·        Had a child

·        Married, divorced or become widowed

·        Changed jobs

·        Taken out a large loan

·        Started a retirement or college fund

·        Started your own business

·        Began caring for an elderly relative

I already own life insurance, should I purchase life insurance on my spouse?

If your spouse contributes to the family’s annual income, then he or she should have adequate life insurance coverage to help replace his or her income in the event of their death. If you spouse does not earn an income, life insurance can still play an important role in helping to pay for valuable services he or she provides; for example, providing child care, elder care, maintaining the home and running the household. Make sure to meet with a financial professional, who can help you determine the proper amount via a personal needs analysis.

Should I purchase life insurance on my child?

Some people scoff at the idea of purchasing a policy on their child but there are a few reasons you may want to consider it:

1.      You can generally purchase life insurance at the lowest possible premium. If your child were to purchase the same amount of coverage when he or she becomes an adult, the annual cost would generally be much higher

2.      You can help ensure that he or she has life insurance protection for life. If the child develops health problems as an adult, he or she could become uninsurable and may not be able to obtain life insurance coverage. In some families, a grandparent purchases a life insurance policy for the child. Also, keep in mind that some states limit the amount of life insurance that can be purchased on minors.

3.      While it’s not a popular option that is widely discussed, some people decide to purchase life insurance on a child to save money for their college education or some other use. Permanent life insurance policies build cash value, and over time, this could grow into a substantial amount of money.

Do I need individual life insurance if I have group life insurance through my job?

YES! Participating in our group life insurance is a good idea because you may be able to receive life insurance at a lower, group rate. If your group coverage is convertible – meaning, when you leave the company you can convert it to an individual policy without evidence of insurability – the individual policy you convert will generally have high premium cost compared to other policies. If your group coverage ends, you can apply for a new policy, especially if your healthy. Otherwise, you may not qualify or may have to pay higher premiums depending on your age and health status. Group life insurance my not provide an adequate amount of death benefit to meet all of your needs.

Consider supplementing your group policy with an individual policy. An individual policy is one that you own, thus it isn’t tied to your employer and you won’t have to worry about your premiums rising every year. With a n individual policy, you won’t need to wonder whether you still qualify every year or if you will lose your life insurance if you change jobs or get laid off. It’s insurance coverage that stays with you.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.