Category Archives: Personal Finance

HOW TO AVOID RUNNING OUT OF MONEY IN RETIREMENT

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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 →

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

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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)

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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 →

DEVELOPING GOOD FINANCIAL HABITS

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Piggy Bank

We demonstrate habits in nearly every area of our lives.  We brush our teeth with the same hand every morning, we drive the same route to the grocery store, and we practice the same general mannerisms when interacting with others.  Habits, both the good ones and the bad ones, are a function of our subconscious minds, and they literally run the majority of what we do – even how we handle our finances and our investing activities. Habits are a fascinating human construct.  You weren’t born with any habits, but you’ve managed to acquire them over the course of your Continue reading →

EVALUATING YOUR RETIREMENT ACCOUNT

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Properly Diversify Your Retirement Plan

In 1974, Congress enacted legislation known as ERISA (Employee Retirement Income Security Act).  This ushered in a new era of financial self-reliance for millions of American workers.  With this transition from defined benefit plans (i.e., pensions) to defined contribution plans such as IRAs and 401(k) plans, the United States government conveyed their expectation that employees must now privately manage their financial futures. Moreover, as the sustainability of government-sponsored entitlement programs are called into question, more and more citizens are realizing the importance of taking a proactive approach toward their “golden years”. To be honest, as an independent investor, I’m not Continue reading →

3 COMMON INVESTING QUESTIONS ANSWERED

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QuestionsAnswered

If I had to select the top three questions that I’m asked most often by new members and coaching clients, the questions would undoubtedly be the following: 1)  WHAT SHOULD I INVEST IN? There are two primary factors that determine what you should be investing in:  1) Your personal investment criteria and 2) The current investing and economic landscape. Both are independent variables, but both should be taken into consideration. Starting with your personal investment criteria, this includes things like your current level of disposable income, your level of risk tolerance, and your long-term financial objectives.  For example, if you’re 50+ Continue reading →