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

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

SMART INVESTING MEANS OBSERVING TRENDS

Old Personal Pager

Change is constant and inevitable.  Winter changes into spring, night changes into day, and even the largest boulders are eventually reduced to sand.  Death, taxes, and change.  Those are your guarantees, my friend. In the world of business and investing, when a simple change evolves from a temporary detour into a sustainable new direction that’s backed by fundamentals, a new trend emerges.  And when a new trend alters a familiar course or practice, the change can be very disruptive.  Entire industries can be impacted, cultural ideals are often reformed, and massive transfers of wealth can occur.  “Paradigm shift” was a Continue reading

INVESTING IN LAS VEGAS? NOPE.

LasVegasNevada

On a recent flight back to California, I struck up a conversation with a fellow traveler.  Turns out we actually went to the same middle school even though we were a few years apart in age.  Small world, huh?  Eventually we started chatting about why we were on a flight.  He told me that he was heading out to a friend’s wedding, and I explained that I had just spent a few days in the Midwest visiting some of my rental properties.   That captured his interest, and he asked if I was planning to invest in Las Vegas since it’s Continue reading

EVALUATING YOUR RETIREMENT ACCOUNT

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