THE UNSETTLING ECONOMIC HISTORY BEHIND OUR BAD NEIGHBORHOODS

Rough American Neighborhood

I’ve done my fair share of traveling around this country. Indiana, Florida, Hawaii, Oregon, Nevada, Virginia, Arizona, Washington, Ohio, California, Texas, etc… And one of the things I’ve noticed is that financially challenged communities are prevalent in nearly every major metropolitan area.  In fact, I can say with confidence that practically every big city has a “rough” part of town.  In the more extreme cases, drugs and gangs emerge, which can often lead to violent crimes.  It’s really quite tragic, and I know we’ve all seen it. What accompanies these struggling parts of American cities is an equally disturbing economic Continue reading

HOW TO AVOID RUNNING OUT OF MONEY IN RETIREMENT

How to Avoid Running Out of Money in Retirement

I’m warning you now: don’t jeopardize your retirement with this flawed (but popular) piece of financial advice.  The 4% Rule that’s frequently espoused by financial planners and pundits can carry with it substantial risk. The 4% Rule is a financial concept that states that as you enter into your retirement years, you should plan on deducting roughly 4% of your retirement portfolio’s value every year in order to meet your living expenses.  The plan is that the structured withdrawals from your nest egg should provide financial support for at least a couple of decades, and possibly as high as 30 Continue reading

HOW TO BEAT THE 1% AT THEIR OWN GAME (LEGALLY AND ETHICALLY)

The One Percent

Is it just me, or is vilifying affluent members of society really in style right now?  The media would have us believe that the economy is a finite pie and if one person has a bit more, then that means someone else has to settle for less.  I’m sorry, but that’s economically backward. If Larry Ellison (founder of Oracle and multi-billionaire) moves into your town, is your town in better shape or worse shape?  It’s in better shape by a long shot.  Just the drippings from his proverbial plate would greatly benefit numerous aspects of your community’s economy.  It could Continue reading

WHAT THE HECK… IS A CAP RATE?

Commercial Real Estate Buildings

“WHAT THE HECK…” is an ongoing series within The Pay Me Plan Blog for Investing Novices where I dissect a financial concept or principle, and explain how it can apply to your investing activities.  In this post, we’ll be covering cap rates. A couple weeks ago, I was speaking with the Vice President of Acquisitions at a large, publicly traded real estate company with a national presence.  He’s a tenured employee with a respected track record in the industry, and he’s played a key role in some massive transactions over the years.  We were engrossed in a discussion regarding some Continue reading

THE CLASS YOU DIDN’T TAKE IN SCHOOL – INVESTMENT EDUCATION 101

Classroom Photo - Investment Education

During a recent, in-person session with a private coaching client, the topic of retirement preparation and planning made its way into the conversation.  I ran a quick “diagnostic check” by asking a few questions and reviewing some of the client’s financial statements including her investment holdings and retirement accounts.  Everything appeared fine until I began dissecting the various positions within her IRA (Individual Retirement Account). The tone of the meeting quickly turned from pleasant to somber as I explained why the long-dated bonds in her retirement account were a poor investment choice given the current economic climate (and she had Continue reading

INVESTING SHOULD BE BORING (IN A GOOD WAY)

Investing is Boring

Sports can be exciting.  Travel can be exciting.  Movies can be exciting.  But your investing should be boring. Why?  Because proper investing mechanics are driven by investing systems that generate predictable outcomes.  And when outcomes become predictable, the excitement is lost.  While investing with a system may be boring, it can also be immensely profitable when applied with regularity. If you want to become an accomplished investor, it behooves you to understand that emotion should NOT be part of your approach.  Making money through investing is an intellectual pursuit, not an emotional pursuit. One of the challenges I occasionally face Continue reading