Best In Wealth Podcast

How Data, Discipline, and Human Ingenuity Shape Long-Term Wealth, Ep #267

Fri, 13 Mar 2026 08:00:00 -0500

In a world where gut instinct once ruled the day—from football coaches making pivotal fourth-down decisions to investors choosing their next stock pick—a revolution has reshaped the landscape: reliable data and analytics. Drawing inspiration from the principles behind the film Moneyball and a recent article by David Booth on 3 Lessons from Investing’s Moneyball Moment in Fortune magazine, I break down what a century of US stock market history reveals for everyday investors.

Lesson 1. Insiders Aren’t Smarter Than Outsiders

One of the key insights unearthed from this century’s worth of data is simple but profound: experts, or “insiders,” do not consistently outperform the market. Early research using the University of Chicago’s Center for Research on Security Prices (CRSP) data found that, on average, mutual funds and clever stock pickers failed to beat the simple strategy of buying and holding a diversified market portfolio. This led to the explosion of index funds, notably pioneered by Vanguard and enabled by firms like Dimensional. Now, anyone, not just Wall Street professionals, can own broad, low-cost portfolios and harness the long-term growth of the entire market rather than trying (and in most cases, failing) to outsmart it.

Lesson 2. Bet on Human Ingenuity

Human creativity and progress power the market’s reliable returns over the decades. Companies go public to raise money, which they funnel into improving their products and expanding their reach. Every day, millions of people at thousands of companies are seeking better ways to serve their customers and grow profits. When you invest in the stock market, you are ultimately betting on people’s ability to innovate and adapt to a changing world. This century-long experiment in collective growth has consistently delivered average returns of around 10% per year, a number that has survived wars, recessions, inflation spikes, and bubbles.

Lesson 3. Investor Behavior Is Key

If reams of data tell us anything, it is this: reliable, long-term returns belong to disciplined investors. The journey is never smooth—market downturns feel chaotic and alarming in the moment. Yet, $1,000 invested in 1926 would have grown to over $17 million by 2025, despite wars, crashes, and global crises. Most investors who stuck with the market over any 10- or 20-year span came out ahead. Stay disciplined, trust the data, and know that while the challenges may look different, the power of long-term, patient investing is timeless.

Outline of This Episode

[00:00] 100 years of market insights
[03:14] Football transformed by data analytics
[07:32] Moneyball, markets, and data
[11:06] Insiders vs. outsiders on stocks
[16:17] Human ingenuity in investing
[17:26] Investing discipline drives long-term success

Resources Mentioned

Connect With Scott Wellens

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Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the US Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Are We in an AI Bubble? And What That Means for Investors, Ep #266

Fri, 13 Feb 2026 05:00:00 -0500

Investors have short memories—until the talk of a “bubble” resurfaces. We take investors on a quick trip down memory lane, discussing the infamous dot-com bubble of the late ‘90s and early 2000s, as well as the housing bubbled that appeared a few years later. These bubbles were fueled by sky-high optimism and wild speculation about transformative technologies. In the dot-com era, investors rushed into any company with a “.com” at the end of its name, confident the internet would change the world. But not all of these companies survived. The lesson is that when a game-changing technology, or a new technology appears, you still have to do your due diligence to come out on top.

The Age of AI: Bubble or Breakthrough?

The “Magnificent Seven” (Google, Meta/Facebook, Apple, Amazon, Nvidia, Tesla, and Microsoft) are pouring billions into AI. Their 2025 returns, as catalogued by Scott Wellens, were impressive, with the group averaging over 20%, outperforming the S&P 500. Yet, such meteoric rises echo the euphoria of past bubbles. But excitement alone does not make a bubble—overvaluation does.

Valuation: How Expensive is Too Expensive?

A key measure is the price-to-earnings (P/E) ratio, a classic way to judge if a company’s stock price is justified by its profits. Take Tesla, for example: at the end of 2025, it traded at roughly $450 per share but earned only $1.50 per share, putting its P/E near 304. Compared to Toyota’s P/E of about 10, that is nosebleed territory. The S&P 500’s long-term average P/E sits around 20—a point of reference emphasizing just how stretched AI-heavy stocks may be. The Magnificent Seven’s average P/E now hovers around 68, more than triple the broader market’s historic average and well above the S&P’s “other 493” companies. While high valuations do not guarantee a crash, they signal that expectations are sky-high and that disappointment could be costly.

Picking Winners, Dodging Losers

You cannot invest in AI itself; you invest in companies riding the AI wave. History shows many will not make it. That is why betting everything on a few horses is extremely risky, even if their role in AI seems promising today. Over-concentration lurks as a hidden threat. If you own a standard S&P 500 index fund, 35% of your portfolio sits in the Magnificent Seven. For tech-heavy indices like the Nasdaq, that figure climbs to 54%. A stumble for these stars—already started in early 2025—can spell big trouble for portfolios tied too closely to their fortunes.

The Case for Global Diversification

So how can investors harness AI’s upside without exposing themselves to catastrophic risk? In a portfolio spanning thousands of companies worldwide across different sectors and asset classes, your exposure to the Magnificent Seven (and thus to AI) drops to about 20%. This cushions your wealth from the fallout if today’s leaders falter and gives you a stake in the next wave of winners, wherever they arise. This approach also positions you to benefit from asset classes that look attractive in the current environment. Small-cap and value stocks, as well as international and emerging markets, which are currently trading at lower valuations and are performing well. History shows that asset classes cycle in and out of favor. Diversification helps you ride out the storms and participate in future growth, whatever sector it comes from. Nobody can say with certainty whether we are flying high in an AI bubble or witnessing the birth of the next economic revolution. Instead of gambling on a forecast, smart investors build durable, globally diversified portfolios. That way, you are not only prepared for the promise of AI but also protected from the possibility of another bubble burst.

Outline of This Episode

[03:59] How bubbles in investing have formed in the past
[05:09] The largest 7 companies in the United States believe that AI is the future
[06:59] What price-to-earnings ratios reveal about AI-focused companies
[10:18] Toyota vs. Tesla: An example valuation comparison
[13:10] Should you invest in companies that use AI?
[15:07] An S&P 500-only portfolio is not diversified
[20:54] Diversify globally for the best chance of financial success

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show Notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the US Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Why Artificial Intelligence Can’t Replace Human Wisdom with Your Finances, Ep #265

Fri, 16 Jan 2026 05:00:00 -0500

AI is everywhere, from investing apps and portfolio tools to recipe planners and vacation organizers, artificial intelligence touches countless corners of our lives. In finance, AI promises accessibility. For newer investors, it is a way to learn basic concepts, compare traditional and Roth IRAs, or understand the difference between tax brackets, all delivered in plain English. AI is also a huge help with organization and financial efficiency. Need a budgeting framework or quick ways to categorize cash flow? AI can create those. It is a handy pocket assistant that helps you plan and ask sharper questions when evaluating financial advisors or planning your future.

The Real Limitations of AI in Financial Planning

While AI is a powerful tool, it is not a decision maker. Here are the big dangers and drawbacks you need to keep in mind:

1. Zero Personal Accountability

AI does not bear the consequences of its advice. If it suggests an irreversible move, like a Roth IRA conversion, based on incomplete or incorrect information, the cost falls entirely on you.

2. Overconfidence in Precision

AI delivers advice with absolute confidence, even when it is wrong! Financial planning is not just numbers, it is trade-offs, nuances, and judgment calls that factor in health, family dynamics, and personal emotional risk tolerance.

3. Struggles with Multi-Year Tax Planning

Most AI tools treat tax decisions generically just one year at a time. But real retirement tax planning means looking ahead 10, 15, or 20 years. Missed integration here can cost you tens, or even hundreds, of thousands of dollars over a career or lifetime.

4. One-Dimensional Investment Advice

AI assumes perfect discipline and zero life changes, no panic selling, no sudden need for funds. But human emotion, especially during retirement or volatile markets, often drives decisions.

5. False Sense of Security

AI’s confident answers may mask underlying complexity. A small financial misstep, repeated or compounded over decades, can grow into a massive problem down the road.

6. Lack of Behavioral Guardrails

Emotions play a huge role in retirement and investment decisions. Life throws curveballs—loss, illness, market downturns, and AI cannot reframe your fears or keep you disciplined when things get tough.

When Human Wisdom Matters Most

Retirement planning is not about finding simple answers, information is cheap, wisdom is not. For complex questions, AI offers basic options, but it cannot weigh the sequence of return risk, or policy changes in real time, like a qualified advisor can. Human advisors coordinate, prioritize, and apply experience to your financial life. They support you through market cycles, health challenges, and family transitions, and recognize when purely rational advice does not capture your real needs.

Using AI Wisely

My advice is to use AI for learning and organization, not for important, irreversible lifestyle and tax decisions. Always double-check its work, and do not outsource your financial future entirely to algorithms. Technology plus human judgment delivers the best outcomes. AI is a powerful tool, not a complete solution.

Outline of This Episode

02:24 Best in Wealth Podcast future plans.
03:57 AI in daily life and finance.
04:51 Advantages of AI for do-it-yourself (DIY) investors.
08:08 Using AI for financial information.
12:29 Limitations and dangers of AI in financial planning.
16:57 Limits of AI financial planning.
19:30 No behavioral guardrails when it comes to your taxes.
25:43 If a decision affects your lifestyle for the rest of your life, don't outsource it to AI.

Connect With Scott Wellens

The Most Important Changes in the One Big Beautiful Bill Explained, Ep #264

Fri, 03 Oct 2025 05:00:00 -0500

Tax laws may not be flashy, but understanding them can tilt the balance for your family’s finances and peace of mind. I am digging into the details of the much-talked-about “One Big Beautiful Tax Bill”, a huge piece of tax legislation that is set to impact families, retirees, and investors across the country. I break down the most important highlights from the massive 870-page bill, focusing on what really matters for everyday listeners: permanent income tax brackets, bigger standard deductions, expanded SALT limits, and significant new deductions for seniors. Tune in for clear, actionable insights on the changes coming to your taxes, and learn how to make these updates work in your favor.

Outline of This Episode

[04:27] Tax act extension highlights.
[07:22] Inflation adjustment for tax brackets.
[10:38] Tax deduction and SALT cap changes.
[13:23] Maximize your deductions and minimize taxable income.
[18:53] Estate tax and deductions update.
[22:08] Permanent deductions and brackets.
[23:45] Tax benefits for families.

Tax Brackets and Standard Deduction: More Certainty, Bigger Benefits

One of the most interesting aspects of the One Big Beautiful Bill (OBBB) is the permanent extension of the income tax brackets Americans have become accustomed to since the Tax Cuts and Jobs Act (TCJA) of 2017. Instead of the cliff that was looming at the end of 2024, current rates (10%, 12%, 22%, 24%, 32%, 35% and 37%) are now here to stay. This certainty means families, investors, and business owners can plan with clarity, knowing that the 10% and 12% brackets will not suddenly vanish. But there’s more: in 2026, the 10% and 12% brackets will receive extra inflation adjustments, leading to a few hundred dollars of potential tax savings. While many American households may not climb out of the 12% bracket, those who do will benefit even more. Another major win is the increase in the standard deduction, now $31,500 for married couples filing jointly and $15,750 for single filers, starting in 2025. Add in automatic inflation adjustments, and the vast majority of taxpayers are now better off taking the standard deduction rather than itemizing, unless big deductions, like SALT, tilt the scale.

The Expanded SALT Deduction

Under OBBB, the State and Local Tax (SALT) deduction cap explodes from $10,000 to $40,000, restoring much of the pre-2017 advantage. For married couples with large property and state income taxes, this unlocks greater ability to itemize rather than default to the standard deduction. But this expanded cap begins phasing out for adjusted gross incomes above $500,000 and is gone by $600,000. Smart, ongoing tax planning, tracking income, maximizing deductions, and timing bonuses or retirement contributions can make the difference between using the full deduction or losing out.

Enhanced Deductions for Those 65+

For retirees, the bill introduces a temporary enhanced standard deduction: if you are over 65, you can deduct an additional $6,000 per person (that’s $12,000 for a married couple) in 2025-2028, on top of other standard deductions. It is available whether you itemize or not. This deduction is phased out for higher incomes—starting at $150,000 for married couples. For planners and retirees considering Roth conversions or IRA withdrawals, being strategic about income in these years could mean paying zero tax on a significant chunk of retirement income.

Child Tax Credit and Estate Tax Changes

Families will be happy to hear that the expanded Child Tax Credit is now permanent. It not only remains at $2,000, but is increased to $2,200 per qualifying child under 18, and (for the first time) will be indexed for inflation from 2026 onward. Income phaseouts apply, but most middle-class families can continue to count on this boost. Lifetime estate and gift tax exemption is set high, $30 million for married couples, $15 million for singles, through 2026, giving ultra-high-net-worth families greater latitude in legacy planning.

Resources Mentioned

One Big Beautiful Bill Act

Connect With Scott Wellens

Balancing US and International Stocks to Diversify Your Investments, Ep #263

Fri, 19 Sep 2025 05:00:00 -0500

Most investors have been ignoring international stocks lately because the US market has been performing so well—but that strategy might backfire this year, with international markets significantly outpacing American stocks. In this episode, I dive into why diversifying globally is not just smart investing; it is essential for long-term wealth building. We explore how the US currently dominates 61% of world market capitalization, but history shows this was not always the case—and it will not necessarily continue. I share four key reasons international investing should be part of your portfolio: it reduces geographic risk when any one country hits turbulence, gives you access to high-growth emerging markets that have delivered spectacular returns, protects you through currency diversification, and helps overcome the natural tendency to only invest in familiar companies. The numbers tell a compelling story—while the S&P 500 is up around 12% this year, international developed markets are up nearly 30%, and some individual countries have delivered returns of 50-90% in recent years. Whether you are completely US-focused or wondering how much international exposure makes sense for your situation, this episode provides the data and reasoning you need to build a more resilient, globally diversified portfolio. I also touch on an interesting parallel between portfolio diversification and gut health—turns out both benefit from variety and balance.

Outline of This Episode

[01:12] The importance of the gut microbiome for health.
[03:42] International markets surpass US performance right now.
[06:24] International diversification mitigates geographic risk.
[10:25] A globally diversified portfolio balances volatility and gives opportunity for growth.
[13:49] Invest internationally to protect against domestic currency depreciation.
[15:13] Why to overcome a behavioral home country bias.
[17:06] Review your health and financial diversification.

Building a healthier, more resilient investment portfolio.

Broadening your approach—whether it is what you eat or where you invest—can improve your long-term outcomes. Did you know that we all have an ecosystem of microbes living within our intestines? Science increasingly shows that a highly diverse gut microbiome is linked to better health, well-being, and more healthy years well into old age. A thriving gut health requires at least 30 different types of plant-based foods each week. The greater the diversity, the more kinds of helpful bacteria can flourish, supporting everything from digestion to immunity. Just as variety improves gut health, diversity is equally essential in investing. Many Americans have opted to remove international stocks from their portfolios, citing the recent dominance of U.S. markets. I want to push back on this trend, with these important points:

The Shifting Sands of Market Dominance:

As of early 2024, U.S. markets make up approximately 61% of the world’s capitalization. The next-largest market, Japan, accounts for only 6%. While the U.S. is dominant now, this was not always the case. In the 1990s, Japan claimed over 40% of the world’s market cap, while the U.S. plunged to just 25%. History tells us that leadership rotates—sometimes rapidly.

International Outperformance:

Many investors overlook periods where international markets outperformed the U.S. For example, in recent years, Hungary, Turkey, and the Czech Republic each posted eye-popping returns, outpacing the U.S. significantly.

Four Reasons You Need International Investments

If you are still not convinced, here are some really good reasons for including global assets in your portfolio: 1. Broader Diversification: Global investing reduces the impact of a downturn in any single country—you will not suffer as heavily if one economy stumbles. It also balances your exposure through different economic and market cycles, smoothing out volatility and lowering overall risk. 2. Access to Unique Growth Opportunities: Emerging markets and diverse sectors abroad can offer higher growth potential. Limiting yourself to U.S. stocks means missing out on global brands such as Toyota, Nestlé, and Samsung, as well as entire sectors less represented in America. 3. Currency Diversification: International investments provide natural protection against swings in the U.S. dollar. If the dollar weakens, non-dollar holdings often become more valuable, helping to preserve your purchasing power and hedge against domestic inflation. 4. Overcoming Home-Country Bias: Many investors naturally stick to what they know (sound familiar?). But with 40% of global investment opportunities outside the U.S., choosing not to invest abroad means intentionally missing out on nearly half the world’s growth potential.

Diversify Diet and Dollars

I want to encourage you to review your own portfolio for international exposure. Start by checking what percentage is allocated overseas and ask—does this reflect your long-term interests, or just recent trends? Talk with your financial advisor to find a balance that suits your family’s goals. And remember: whether it is your gut or your investments, variety really is the spice of (a healthy, resilient) life.

Connect With Scott Wellens

The Secret to Stress-Free Investing, Ep #262

Fri, 22 Aug 2025 05:00:00 -0500

We all have some worries, those everyday anxieties that creep into our lives—money, kids, jobs, and adding more stress to your life in the form of an investment portfolio can seem like too much at times. So this week, I am sharing how understanding one key financial theory can transform your approach to investing and seriously lower your stress. This episode takes you through the groundbreaking work of Eugene Fama and the efficient market hypothesis, explaining why trying to outguess the market is usually a losing game. I am also sharing how, by trusting the power of the market and building your strategy around solid, evidence-based principles, you can ditch investing anxiety and set your family up for long-term success. So if market swings keep you up at night or you are looking for a more peaceful way to manage your portfolio, tune in for a fresh perspective and actionable advice on taking the stress out of investing—once and for all.

Outline of This Episode

[00:00] Your foundation of knowledge to experience stress-free investing.
[05:58] Understanding Efficient Market Hypothesis (EMH).
[09:40] The power of market consensus.
[11:55] How fast does the stock market react?
[13:12] Efficient market hypothesis simplified.
[17:27] The myth of market-beating funds.
[19:22] Reduce investment stress by demystifying the market.

Does Investing Have to Be One More Worry?

Retirement account fluctuations, big market drops like those in 2008, COVID-19, and trade war-related selloffs are enough to send anyone’s blood pressure soaring. One of the most important concepts in modern finance: the Efficient Market Hypothesis (EMH), developed by Nobel laureate Eugene Fama. In simple terms, the EMH says that all the available information about any publicly traded company is already reflected in its stock price. Let’s use Apple as an example. Every day, millions of shares, worth billions of dollars, change hands, each trade representing someone who thinks Apple is fairly priced, and someone else who disagrees. Crucially, both buyers and sellers have access to the same information. No one has a crystal ball; everyone’s predictions about future sales and profits are just that—educated guesses.

Why Beating the Market Is So Hard

In a 20-year analysis of actively managed mutual funds, those run by managers trying to beat the market through skillful stock picking. Of the 1,667 funds analyzed on January 1, 2004, just 48% were still around 20 years later (the rest closed or merged after poor performance). Of those survivors, only 16% managed to outperform the market—a sliver of winners, and no guarantee that their outperformance was due to skill rather than luck. Over longer periods, the odds get even worse. The market’s efficiency means that news, good or bad, gets priced in fast. By the time you read about a hot tip or see a magazine headline, it is almost certainly too late to profit.

Building a Stress-Free Investment Philosophy

Adopting the efficient market approach means basing your investment strategy not on predictions, but on accepting that prices already reflect what is knowable. This data and science-driven approach is the bedrock for stress-free investing. When you stop believing you or a mutual fund manager can consistently outguess millions of other market participants, everything changes:

Daily fluctuations stop feeling like emergencies.
Your plan is not derailed by shocking news or downturns.
Emotional decision-making is replaced by disciplined adherence to your long-term strategy.

This knowledge leads to better results, as you avoid the pitfalls and fees of chasing “winners” and trying to time the market. The goal is not just to match the market, but to give you the greatest chance for success. By using low-cost investment tools that are aligned with the efficient market hypothesis (like broadly diversified index funds), you maximize your odds of building lasting family wealth—without sleepless nights. When you understand and embrace the efficient market hypothesis, the mystique and the stress of the market fades away. Investing becomes a rational, controlled process anchored in decades of evidence, not hunches.

Resources Mentioned

Eugene F. Fama

Connect With Scott Wellens

The Truth About Bitcoin, Gold, and Safe Investing Strategies, Ep #261

Fri, 18 Jul 2025 05:00:00 -0500

Bitcoin and gold are two assets often hailed as safe havens and reliable stores of value. I explore whether bitcoin and gold really deliver the security investors hope for, or if, instead, they are more about speculation than true investment. I am helping you to look at the hard data and science behind financial decisions. Whether you are curious about market volatility or searching for a dependable way to safeguard your wealth, this episode is packed with practical insights about the pros and cons of investing in Bitcoin or gold.

Outline of This Episode

[06:05] Bitcoin and gold are speculative, limited by supply and demand.
[09:29] Bitcoin is an unreliable store of value.
[13:57] Volatility and diversification in investing.
[16:58] Is gold really a safe haven for your money?
[20:18] Gold commercials push for sales due to high commissions, not safety.
[22:30] Investing relies on data and science to build successful portfolios, focusing on controlling taxes, expenses, and risk.

Finding Safe Havens for Your Money

What makes you feel secure? Fresh from a nine-night family trip to a volleyball tournament in Dallas, I have realized that my real safe haven is not a lockbox or a password, it is my home and the daily routine I return to. More than that, my family represents my ultimate store of value, the core “asset” I am committed to nurturing year after year. For me, investing is just one facet of a broader stewardship, protecting not only wealth but also the relationships and routines that bring lasting fulfillment.

Bitcoin is a Volatile Gamble

Clients often ask me, “Can Bitcoin act as a reliable store of value?” so I’ve dug into the numbers. Since 2010, the annualized volatility of Bitcoin has been a staggering 76.9%, nearly five times greater than the already-risky Russell 3000 index, which clocks in at 15.8%. Over the same period, Bitcoin has endured 27 separate 10% drops, 10 plunges of 30% or more, and five catastrophic 70% crashes. By contrast, the mainstream US stock market has only seen six 10% drops and a single 30% drawdown. Investing in bitcoin with this type of volatility is not a store of value. Investing in Bitcoin is speculation. The wild swings may excite thrill-seekers, but anyone seeking stability is likely to be disappointed.

Gold as a Safe Haven

What about gold, the classic safe-haven asset? Gold has enjoyed some positive years, up 60% of the time since 1970, but it is hardly a guarantee. That means in roughly four out of every ten years, gold investors have faced losses. Meanwhile, the S&P 500, ironically, the very market from which gold investors typically flee, has delivered positive returns 80% of those years. Plus, the marketing of gold is driven by high-commission sales tactics, not genuine concern for investor safety. Beware of those “buy gold now” ads; they exist to line the pockets of sellers, not to deliver real security to buyers.

The Science of Investment Security

Rather than relying on speculative assets, I prefer a scientific, data-driven approach to investing. At Fortress Planning Group, this means diversified exposure to thousands of companies striving to increase their value through hard work and innovation. My framework focuses on dimensions of higher expected return, not chasing the latest shiny object or giving in to fear-based pitches. I prefer to adjust risk through a prudent mix of stocks and bonds, finding a portfolio that matches your personal risk tolerance and the required rate of return. The bedrock of real security lies in controlling what you can: expenses, taxes, and risk.

Choose Stewardship Over Speculation

True security comes not from betting on volatile assets but from a disciplined, evidence-based investment plan, and from investing in your family and daily life. As you consider your own safe havens and stores of value, follow the data, seek out trustworthy advice, and build systems that support both your financial and personal well-being.

Resources Mentioned

Bitcoin: A Crumby Way to Save For Later by Kristi Higgins
Wes Crill on LinkedIn

Connect With Scott Wellens

Common Retirement Myths You Shouldn’t Fall For, Ep #260

Fri, 13 Jun 2025 05:00:00 -0500

Let’s unpack six of the top retirement misconceptions, from whether it is okay to splurge in retirement, to the necessity of paying off your mortgage before you retire, and the real risks that retirees face beyond just a stock market crash. With a focus on helping family stewards make smart decisions for a secure financial future, I share practical advice, real-life scenarios, and encouragement to help you confidently prepare for and enjoy your retirement years. If you want to separate fact from fiction and build a retirement plan that truly fits your life and goals, then this episode is for you.

Outline of This Episode

[04:45] Debunking common myths.
[09:43] Donate now for tax benefits and immediate impact.
[10:54] Spending in retirement is encouraged to enjoy life and create memories, rather than hoarding savings.
[17:34] Diversified portfolios mitigate financial risk during market downturns.
[20:12] Stay vigilant against fraud by protecting your personal information.

How Rethinking Retirement Myths Can Help You Build Wealth, Live Generously, and Enjoy a Fulfilling Retirement

Retirement is often framed as the finish line in your financial journey, but the path leading up to and through that milestone is cluttered with well-intentioned advice, social media sound bites, and downright misleading myths. As Scott Wellens, certified financial planner and host of the Best in Wealth podcast, points out in episode 260, it’s time for successful family stewards to challenge conventional wisdom and make decisions grounded in reality, not rumors. Let’s unpack and expand on six of the most common retirement myths, using Scott’s insights to guide your way toward a smarter, more satisfying retirement.

Myth #1: “It’s Not Okay To Do a Big Splurge”

Many savers believe that a single splurge in retirement, a long-awaited RV, a dream vacation, or a lavish family gathering, could derail their entire retirement plan. If you’ve saved diligently and want to use a portion for a one-time purchase, the impact on your annual withdrawal can be minimal. For those following the “4% rule," buying a $50,000 RV from a $3 million portfolio reduces sustainable annual withdrawals by only about $2,000, a small sacrifice for a lifelong dream. Retirement is about enjoying the fruits of your labor. With proper planning and a clear understanding of your cash flows, strategic splurges are not only possible but can enrich your retirement experience.

Myth #2: “It’s Best to Leave Money to Charity After Death”

It’s noble to want to support causes after you are gone, but waiting to give can rob you of witnessing the impact your generosity brings. Giving while alive has both tangible and intangible benefits: not only do you receive immediate tax deductions and may reduce potential estate taxes, but you also get a front-row seat to the good your money is doing. A thoughtful plan lets you balance living well and giving generously today, maximizing both legacy and personal fulfillment.

Myth #3: “You Should Spend Less in Retirement”

Is hoarding your savings really the best way to reward yourself after a lifetime of work? Many retirees spend less than they could, leading to regrets about missed opportunities. The ultimate goal is to utilize your resources to create lasting memories, whether that’s through travel, experiences with loved ones, or acts of generosity. Do not let fear lead to deprivation. With a flexible plan and clear spending guidelines, you can confidently enjoy and share what you’ve built.

Myth #4: “You Must Pay Off Your House Before Retiring”

Being mortgage-free sounds ideal, but it’s not a strict requirement. Many retirees successfully manage their remaining mortgages as part of their retirement strategy. Don’t rashly withdraw large sums from tax-deferred accounts to pay off a mortgage, which could trigger an unnecessarily high tax bill. Evaluate your circumstances, and consider a phased approach or maintaining a low-interest mortgage alongside a diversified portfolio.

Myth #5: “You Should Avoid Reverse Mortgages”

Reverse mortgages once carried a shady reputation, but increased regulation has made them a much safer tool. While not for everyone, reverse mortgages can offer a critical safety net, especially for those planning for longevity, unexpected expenses, or wanting to front-load spending in the early, active years of retirement. Work with a fiduciary advisor to determine if a reverse mortgage fits into your personalized retirement plan.

Myth #6: “A Stock Market Crash Is Your Biggest Financial Risk”

Markets can be volatile, but Scott highlights that portfolio diversification and strategic withdrawal plans shield most retirees from a single crash becoming catastrophic. Instead, the growing threat is fraud and scams, especially as retirees become more vulnerable to sophisticated fraudsters. Stay vigilant against scams, practice good digital hygiene, and educate yourself and your loved ones on how to protect personal information.

Rethink, Recalibrate, and Retire Well

The myths surrounding retirement can cause unnecessary stress, fear, and missed opportunities. By debunking these misconceptions and working with trustworthy, fee-only fiduciary advisors, you can approach retirement with confidence: ready to spend, give, and enjoy your wealth without regret.

Resources Mentioned

6 More Retirement Financial Myths to Avoid by Sheryl Morningstar

Connect With Scott Wellens

The Secret to Thriving Between Midlife and Retirement, Ep #259

Fri, 16 May 2025 05:00:00 -0500

In this episode, inspired by my own family life, I am exploring the "holy trinity of assets": time, health, and money. Financial wealth alone does not guarantee a fulfilling future; you also need to be intentional about your health and your relationships. I share practical ways to extend the magical period of life where you can enjoy all three assets, without sacrificing your well-being in the pursuit of wealth. Tune in to hear my strategies for prioritizing your health, making the most of your time, and building wealth that enriches every stage of life. Get ready to rethink your priorities and be inspired to make changes that will let you enjoy not just a long life, but a long life full of vitality and purpose.

Outline of This Episode

[00:00] My perspective on how to prepare for life's best stage
[05:35] The first stage of Life is youth: abundant time and health, but little money
[09:35] Stage two: Prioritize health over wealth, but balance both
[11:15] Focus on the big health priorities: exercise, eat better, and sleep better
[16:03] How to spend when markets are chaotic
[19:44] Prioritize key aspects of life to improve well-being

When you think about building wealth and securing your future, what comes to mind? For most, it's a picture filled with investment portfolios, retirement accounts, and property. But money is just one piece of a much larger puzzle. To truly thrive and make the most of our time on earth, we must learn to value and actively nurture not just financial assets but also our time and our health.

The Three Stages of Life: Youth, Midlife, and Old Age

Tony Isola’s article, "The Holy Trinity of Assets," divides life into three main stages:

Youth:

This is a period rich with time and health. As kids, we possess endless energy and countless hours to fill, even if we are broke. Despite lacking financial resources, we are wealthy in ways money cannot buy.

Midlife:

For many, midlife brings growing financial stability and, often, good health. The catch? Time becomes scarce. Pursuing career goals, raising families, and climbing the professional ladder quickly fill our calendars.

Old Age:

Retirement can bring a return of time and (hopefully) sufficient money. However, health often begins to slip. The dreams of finally enjoying life can be hampered by physical limitations that decades of neglect may have fostered. There is a magical, fleeting window between midlife and old age when you can possess all three assets: health, time, and money. The real goal is to extend this stage as long as possible.

Actionable Strategies for Extending the Best Stage

We need to be disciplined and intentional to maximize this golden intersection of good health, time, and wealth. Here’s how:

Prioritize Your Health Like Your Money.

Many high achievers invest tirelessly in growing their financial resources, but your health deserves the same, if not more, attention. When illness arises, the most common wish is for more good years, not more dollars. If you would not neglect your savings, do not neglect your body.

Make Exercise a Non-Negotiable

Research and my own experience show that consistent movement and strength training are vital, especially as we age. A simple, actionable approach is to aim for at least 30 minutes of exercise daily. Walking briskly, resistance training, or even bodyweight exercises can maintain and enhance muscle mass, joint health, and vitality.

Eat to Nourish

Our modern environment makes unhealthy eating easy. Scott emphasizes the importance of choosing whole, protein-rich foods over highly processed carbohydrates. This doesn’t mean an extreme diet is necessary; focus on small, sustainable changes: increase protein, reduce processed snacks, and be mindful of what you put on your plate.

Restore with Quality Sleep

A cornerstone of well-being is adequate sleep. Protecting seven to eight hours each night helps your body repair, your mind recharge, and your immune system function at its best. It is not just about living longer, it is about living better, every day.

Control What You Can

While markets, world events, and even certain aspects of our health are unpredictable, there is much you can control. Be deliberate about where you spend your energy and attention. Optimize your finances, yes, but do not let that come at the expense of quality time or physical vitality.

Be Ready for Your Best Years

There will always be chaos and things outside our control. But by taking charge of your health, time, and money, you set yourself up to live longer and enjoy more years filled with purpose and joy. As Scott’s wife cheers from the volleyball stands, “Be ready!” Ready to claim the best stage of your life, starting now.

Resources Mentioned

The Holy Trinity Of Assets - A Teachable Moment by Tony Isola

Connect With Scott Wellens

How to Handle Stock Market Downturns, Ep #258

Sat, 19 Apr 2025 05:00:00 -0500

Do downturns in the stock market inevitably lead to down years? On the show this month, I am walking you through an analysis of U.S. market trends over the past two decades, illustrating how downturns, even severe ones, often do not spell disaster for annual returns. I will also share what savvy family stewards can do to weather these turbulent times and potentially capitalize on them. From practical strategies like Roth conversions and strategic rebalancing to steering clear of emotionally driven decisions, this episode is packed with insights to help you take family stewardship wealth to the next level. Tune in to see how a long-term, data-driven outlook can lead to more confident investing, regardless of market swings.

Outline of This Episode

[3:31] Do downturns lead to down years?
[8:22] This is a volatile year for US stocks, but international companies did better.
[11:44] Stay invested; the market rebounds quickly.
[14:15[ Post-crash market rebound patterns.
[18:43] My guide to strategically rebalancing your portfolio.

Understanding Market Fluctuations

Between 2005 and 2024, the U.S. stock market witnessed only three negative years out of twenty, a testament to its resilience. Despite experiencing several downturns during those years, market recovery was the norm. For instance, although 2020 began with a staggering 35% downturn due to the COVID-19 pandemic, it ended 21% up. Similarly, in 2011, despite a 20% downturn during the year, the market concluded with a positive return. This historical perspective highlights the fleeting nature of downturns and underscores the importance of maintaining a disciplined approach to investing during turbulent times. A critical question for investors is whether downturns inevitably result in negative annual returns. Over the past twenty years, analysis reveals that downturns rarely dictate an entire year's trajectory. 17 out of the last 20 years ended positively, despite intra-year downturns ranging from 6% to as high as 35%. The takeaway here is significant: short-term market fluctuations do not always translate into negative returns, emphasizing the importance of a long-term perspective and patience.

Why Staying the Course Pays Off

Many investors, spooked by temporary market declines, resort to withdrawing their investments, potentially locking in losses. Instead, remaining invested allows one to benefit from eventual recoveries. Data shows that three-day drops, like the 11% decline recorded recently, are usually followed by substantial gains over the subsequent year, three years, and five years. Investors who maintain discipline through these downturns often see their portfolios grow significantly when the market rebounds.

Practical Strategies for Navigating Downturns

For those unsure how to act during a downturn, consider these proactive measures:

Avoid Constant Monitoring:

Constantly checking your investment portfolio during a downturn can lead to emotional decision-making. Once your strategy is in place, trust your plan and avoid frequent account reviews that can heighten anxiety and fear, potentially driving impulsive actions.

Roth Conversions:

Market downturns present an opportune time for Roth conversions, allowing investors to transfer investments into a Roth IRA at reduced valuations. As the market recovers, gains in the Roth IRA grow tax-free, maximizing long-term benefits.

Tax Loss Harvesting:

When markets dip, investors can sell losing investments to offset capital gains taxes. This tax-efficient strategy enables the reinvestment of proceeds in similar securities to maintain the desired asset allocation while benefiting from potential tax reductions.

Strategic Rebalancing:

Another critical step is rebalancing portfolios by purchasing undervalued stocks during a downturn. By strategically realigning asset allocations, investors set the stage for potential gains when the market rebounds. Navigating market downturns confidently requires understanding their historical context and implementing practical strategies. These periods, though challenging, are fertile ground for growth when approached with discipline and foresight. Whether through Roth conversions, tax loss harvesting, or rebalancing, taking controlled, strategic actions can position family stewards to capitalize on eventual market recoveries. By focusing on what can be controlled and maintaining a long-term outlook, investors align themselves with historical trends that favor resilience and recovery in the stock market.

Resources Mentioned

Brian D. Cayon on LinkedIn

Connect With Scott Wellens

Experts, Predictions, and the Uncertainty of the Stock Market, Ep #257

Fri, 14 Feb 2025 05:00:00 -0500

Did you know that you can pay someone to give you advice on what to bet on? They can look at historical data like rushing and passing yards, touchdowns, and more—but so can we. Honestly, historical data can only tell us so much. If you bet on a game, you are really making a lucky guess. Is it really so different with the stock market? When it comes to predictions—whether for the Super Bowl or the S&P 500—there is a lot of uncertainty. So, let’s break down how predictions are made and whether or not they should guide our investment decisions. [bctt tweet="Predictions are everywhere—whether for the Super Bowl or the stock market. But how reliable are they? In episode 257 of Best in Wealth, we explore the dangers of betting on expert predictions and why diversification is key for your portfolio." username=""]

Outline of This Episode

[1:13] The Super Bowl: What you can bet on?
[2:30] Why are we trusting betting experts?
[7:50] Expert predictions for 2025
[11:32] Reviewing predictions from 2024
[18:06] How do we build a portfolio?

Expert predictions for 2025

Most of the top analysts—Oppenheimer, Wells Fargo, Deutsche Bank, and others—are bullish, predicting that the S&P 500 will rise in 2025. The consensus seems to suggest that the market will average a 10% return, which has been the long-term norm. Oppenheimer Asset Management stands out with an optimistic prediction of 18.4%, implying that 2025 could be a great year for the market. However, these predictions come with a significant caveat—the stock market, especially the S&P 500, is notoriously volatile. We have seen massive swings in the past, from a 38% drop in 2008 during the Great Recession to a 25% rise in 2024. BCA Research, on the other hand, predicts a 25.8% drop, highlighting just how different expert opinions can be. This stark difference—43% apart between two top analysts—raises an important question: if the experts cannot agree, how reliable are their predictions? It is a reminder that while these predictions may be based on data, the unpredictability of the market remains ever-present. [bctt tweet="Experts predict the future, but how often are they right? In episode 257 of Best in Wealth, we dive into the unpredictability of stock market forecasts and share why building a diversified portfolio is your best bet for long-term success." username=""]

Reviewing predictions from 2024

Did the experts hit the mark last year? The S&P 500 went up around 25% (with dividends) and 23.3% without dividends.

Oppenheimer, the most bullish of the experts, predicted a modest 8% increase, but the market ended up being nearly three times better than that!
Many other firms—Goldman Sachs, BMO, Bank of America—also predicted positive returns, but the actual outcome was far beyond their expectations.
In a striking example, some analysts predicted that the S&P 500 would finish the year with negative returns—forecasts that couldn’t have been further from reality.

This discrepancy illustrates an important point: even the most well-educated and experienced analysts can be drastically wrong. It shows that predictions are based on what experts know at the time, but they can't account for the countless variables that influence market behavior throughout the year, such as political changes, economic developments, and unforeseen global events.

How do financial stewards build a portfolio?

The answer is diversification. Family stewards—those who manage wealth and invest for future generations—should focus on creating a well-rounded portfolio that can weather any storm. Rather than betting on predictions, diversify your investments across a wide range of asset classes: large-cap stocks, small-cap stocks, international investments, emerging markets, real estate, and bonds. By spreading your investments out, you position your portfolio to perform well under different market conditions, regardless of what the experts predict. Instead of trying to outguess the market, family stewards invest for the long term, with a strategy that includes a mix of assets to capture growth while minimizing risk. By building a diversified portfolio, you are not relying on a crystal ball or hoping for the best. Instead, you are ensuring that you are prepared for whatever comes, from market highs to lows. [bctt tweet="Can we trust stock market predictions? In episode 257 of Best in Wealth, we look at why relying on expert forecasts can be risky and how diversification can provide more stability for your financial future. Don’t gamble with your portfolio!" username=""]

Resources Mentioned

Prediction Season by Dimensional Fund Advisors

Connect With Scott Wellens

The Ultimate Planner to Jumpstart Your 2025, Ep #256

Fri, 10 Jan 2025 05:00:00 -0500

Today, I am sharing something that my family has fallen in love with—The Clever Fox Dated Planner. This planner goes beyond simple scheduling with features like a gratitude section, vision board, habit tracker, and tools for setting and achieving SMART goals. It is designed to help you reflect, plan, and improve every week. If you are ready to take control of your time and goals, let me tell you all about it! [bctt tweet="Start 2025 strong with the Clever Fox Dated Planner! This isn’t just a planner—it’s a tool to reflect, set SMART goals, track habits, and create a vision for your year. My family loves it, and I know you will too. #SMARTGoals #Habits #Goals #Planner" username=""]

Outline of This Episode

(1:09) I hope you had a wonderful Christmas and New Year!
(2:36) The planner that we bought for the entire family
(15:45) Spend some time zeroing in on your goals for 2025

The planner that we bought for the entire family

We bought the Clever Fox Dated Planner with habit trackers for goal setting and time management for everyone in the family. Though we were a bit worried that they would not be excited, surprisingly, everyone loved it. But why do I love this planner so much? Because of everything it includes:

How-to Guide: It comes with a pamphlet, “How this planner works.” They tell you where to begin, what to think about, and share examples.
Gratitude and Self-Awareness: This section gives you space to write down what you are grateful for and passionate about.
Daily Rituals: This is an opportunity to think about the skills you want to learn and habits you want to adopt. Maybe a ritual is drinking more water, meditating, or going to the gym.
Affirmations: Short sentences with an optimistic tone stated in the present tense, i.e., “I am an architect of my life.” They give you confidence.
Vision Board: They provide a two-page outlay where you can create your vision and get clear on what you want from life.
Goals: You are given space to write three goals for each of these sections: health & fitness, business & career, personal development, relationships, family & friends, fun & recreation, and spirituality.
Mind-Map: This section helps you take the big goals you have written down and break them down into smaller pieces.
Monthly Page: This is a full page just like a typical planner (months January through January). It includes areas to write notes and goals.
Weekly pages: This allows you to write out the week’s main goals, priorities, etc.
Habit Tracker: You can write down things you want to turn into habits. It allows you to check a box for each day.

Each weekly section includes an area where you can write down how you will improve the next week. What did you not do that you should have? How can you improve the next day and week? [bctt tweet="Why do I love the Clever Fox Planner? It’s packed with features: Gratitude & affirmations, vision board, goal-setting tools, weekly reflection, and a habit tracker. It’s everything you need to stay organized and crush your 2025 #goals. #Gratitude #BestInWealth #Planner " username=""]

Implement SMART goals

I try to record an episode about goal-setting at the beginning of every year and always encourage you to make sure that your goals are SMART:

Specific
Measurable
Achievable
Relevant
Time-Bound

Your goal might be to pay off a credit card by the end of the year. Maybe it is to run a half-marathon by June 15th. Here is my challenge: Write out five SMART goals you want to achieve in 2025 (and it will be far easier to track with a planner like this!). [bctt tweet="Set yourself up for success in 2025 with SMART goals! Make sure your goals are Specific, Measurable, Achievable, Relevant, and Time-Bound. This approach will keep you focused and motivated throughout the year. Start planning today! #SMARTGoals #GoalSetting" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the US Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Why I Don’t Want You to Spend the Money in Your HSA, Ep #255

Fri, 13 Dec 2024 05:00:00 -0500

What is an HSA? Who can invest in one? What can you use the money for? Why do I love them? Why shouldn’t you spend the money you save in an HSA? I will unravel all of these questions in this episode of Best in Wealth. [bctt tweet="Why don’t I want you to spend the money you’ve saved in your #HSA? I share the surprising truth in this episode of Best in Wealth! #retirement #Investing #RetirementPlanning #FinancialPlanning " username=""]

Outline of This Episode

[1:08] It is time to plan your 2025 goals
[3:14] What is an HSA?
[4:48] How can I invest in an HSA?
[6:43] Why I like HSA accounts
[7:43] How much can you save in an HSA?
[9:13] What can I spend the money on?
[11:11] What if you cannot afford to save in an HSA?
[12:13] Don’t spend the money in your HSA

The basics of an HSA

An HSA is a health savings account. Do not confuse it with a flexible savings account, or FSA. An FSA allows you to save money—taken out of your paycheck with a tax deduction—that can be used for healthcare expenses. The money must be used within a certain timeframe. If you leave your employer, that money is gone. However, an HSA does not require you to spend the money if you do not want to. If you leave your employer, that HSA account is yours for life. To qualify for an HSA, you must have a high-deductible insurance plan with a minimum annual deductible of $1,650 and an out-of-pocket maximum of $8,300 or more in 2025 (for families, it’s $3,350 and $16,600). [bctt tweet="What are the basics of HSAs? Why do I love them? Learn the amazing details in this episode of Best in Wealth. #WealthManagement #Retire #Investments" username=""]

Why I like HSA accounts

Some of the benefits I have stated already: You get a tax deduction for every dollar you put in. Secondly, there are no income limit caps on who is allowed to have an HSA. HSA accounts allow you to take that money with you wherever you go and you do not have to spend it. Secondly, an HSA allows you to save quite a bit of money. An individual is allowed to contribute $4,300 in 2025. Families can contribute up to $8,550. If you turn 55 in 2025, you can contribute an extra $1,000. If you are in the 24% tax bracket, you will save $2,300 in taxes in 2025 by putting that money away in an HSA. Your deduction will change based on the tax bracket you are in. What can you spend the money on? Healthcare-related expenses (except the monthly premium). It can go toward copays, out-of-pocket expenses, coinsurance, medicines, etc. Medical expenses add up quickly.

Why I do not want you to spend the money in your HSA

The simple answer? Because you can invest the money. Many HSA accounts allow you to invest the money once you have saved $1,000. If you start saving $8,000+ a year for the next 20 years, think of how much it will grow by the time you retire. It is a great way to fund your healthcare in retirement. The next best part? Let’s say you contributed $250,000 and it grew to $500,000. When that money is used on healthcare expenses, you do not have to pay taxes on that growth. Once you retire, and go on Medicare, HSA money can be used to pay for Part B and D expenses. In 2025, the starting cost of Medicare is $185 a month. If your Modified Adjusted Gross Income is high, you may be paying a lot more for Medicare. If you do not end up spending the money on healthcare, once you turn 65, you can use the money on whatever you want—with one caveat. You will have to pay taxes on those dollars (just like a traditional IRA or 401K). Listen to the whole episode for all of the details! [bctt tweet="HSAs offer amazing tax benefits. But why else do I love them? I cover the details in this episode. #retirement #Investing #RetirementPlanning #FinancialPlanning " username=""]

Connect With Scott Wellens

The Importance of Remaining Disciplined with Asset Allocation, Ep #254

Fri, 15 Nov 2024 05:00:00 -0500

We invest in large companies, small companies, value companies, international companies, emerging markets, etc. We practice discipline when investing in all of these asset classes. If we want 20% of a portfolio allocated to large value, we maintain that percentage. We also practice strategic rebalancing. If something has an upward momentum, we set tolerance zones. If we go above or below those tolerances, we buy or sell. We practice discipline. Why? I share more in this episode of Best in Wealth. [bctt tweet="Discipline in asset allocation means sticking to your plan—no matter the headlines. Find out why this matters in today’s investing landscape. 🎧 #AssetAllocation #InvestingDiscipline #BestInWealth" username=""]

Outline of This Episode

[1:02] The importance of reading the full story
[3:13] Why we practice discipline in asset classes
[8:00] Taking a look at the big picture
[11:02] Developed markets vs emerging markets
[13:23] A disciplined approach to investing matters

Why we practice discipline in asset classes

By the end of the third quarter of 2024, the S&P 500 was up almost 20%. It is up another 6% since then. The S&P 500 is one of our best-performing asset classes. If we are just reading the headline, “The S&P 500 is doing the best,” we might think we should put more money in. But hindsight is 2020. And if we would have listened to the experts, many of them said that small-caps were going to perform the best in 2024. But small-caps are only up a little over 10% after the third quarter. It has also gone up 6–8% since then but is still underperforming the S&P 500. If we would have listened to the experts, we would be tempted to put more money into small-caps. But that is not the right decision either. We need to remain disciplined to our plan for each asset class. [bctt tweet="The S&P 500 is up, but that doesn't mean we chase momentum. Strategic rebalancing is key! Learn how to stay disciplined in your investment choices. #InvestingStrategy #AssetClasses #WealthManagement" username=""]

Taking a look at the big picture

Looking back 95 years, the small-cap index has done better than the large-cap index. We call this the small-cap premium. However, it comes with more risk. Because of the risk, investors demand a higher average return for owning smaller companies. Our portfolios skew more large than small because of the risk. However, we do want to capitalize on some of those returns—but not because of headlines. If you choose something riskier, it will not always do better. On average, stocks do better than bonds because they are riskier—but it does not mean stocks always beat bonds. Developed market small-caps on average bean developed markets large-caps by about a percent and a half per year. Small-caps over the last 20 years perform better than large-caps in emerging markets. Remember, past performance is no guarantee of future results. Have small-caps underperformed large-caps in the recent past? Yes. Does that mean we abandon small-caps? No? Does that mean the premium is gone? We do not think so.

A disciplined approach to investing matters

We need to investigate every headline that we read because they don’t tell the full story. If we’re just reading the headlines, we might make an emotional decision about asset allocation. We cannot try to guess which asset class will do the best. When we do that, we are putting our family and our future in jeopardy. A disciplined approach to investing matters. Learn more in this episode of Best in Wealth. [bctt tweet="Reading the full story helps you make smarter choices. Get the full breakdown on disciplined investing in today’s episode of Best in Wealth! #InvestingInsights #BestInWealthPodcast" username=""]

Connect With Scott Wellens

Are You in the Top 5% of Income-Earners or Net Worth? Ep #253

Fri, 18 Oct 2024 05:00:00 -0500

Ever wondered where you rank financially among Americans? Curious about what it takes to join the top 5% in income or net worth? Every three years, the Fed surveys the finances of American households, tracking assets, debt, and more. One of the things they cover is who landed in the top 5% of both income earned and net worth. In this episode of Best in Wealth, I will share the income that puts you in the top 5% of income earners by age, what lands you in the top 5% of net worth by age, and why none of it matters. Don’t miss it! [bctt tweet="Are you in the top 5% of income-earners or net worth? Learn what it takes in this episode of Best in Wealth! #PersonalFinance #FinancialPlanning #Wealth #WealthManagement " username=""]

Outline of This Episode

[1:15] Getting into the University of Wisconsin Madison
[3:21] The income that puts you in the top 5% of income
[11:12] Individual versus household income
[12:00] The income that puts you in the top 5% of net worth
[17:21] Are you in the top 5% of income or net worth?

The income that puts you in the top 5% of earned income by age

Do you land anywhere in these brackets?

18-29: If you earn $156,732 or more, you are in the top 5%. You are just launching your career and starting to earn an income.
30-39: If you earn $292,927 or more, you are in the top 5%. You are getting more established in your career and perhaps started a business or received a promotion.
40-49: If you earn $404,261 or more, you are in the top 5%. Maybe you continued to receive promotions or your business grew.
50-59: If you earn $598,825 or more, you are in the top 5%. The 50s are your highest potential for earnings years. Maybe you sold your business or became the CEO of a company.
60-69: If you earn $496,139 or more, you are in the top 5%. You may be retired and living on social security and your investments during these years.
70 or older: If you earn $350,215 or more, you are in the top 5%. Most people in their 70s probably are not working any longer and that income is being derived from Social Security, pensions, and investments.

What does it take to be in the top 5% of households? If you earn $499,000 or more, at any age, you are in the top 5% of all income earners. [bctt tweet="What income puts you in the top 5% of earned income by age? I hash out the numbers in episode 253 of Best in Wealth! #wealth #retirement #investing" username=""]

The income that puts you in the top 5% of net worth

What does the top 5% of net worth look like in each age group?

18-29: $415,700 or higher
30-39: $1,104,100 or higher
40-49: $2,500,000 or higher
50-59: $5,001,600 or higher
60-69: $6,684,220 or higher
70 or older: $5,860,400 or higher

Your net worth is far more important than your income. You can make all of the money in the world but if you do not save anything, your net worth will never increase. It will stay zero. Secondly, you can earn a lot less than the top 5% of income earners and still save enough to be in the top 5% of net worth.

Are you in the top 5% of income or net worth?

It is okay if you do not fall into any of these categories—they can be very skewed. Numerous factors impact these numbers. Secondly, these numbers don’t matter. If you have the right retirement plan for you, you will have the retirement of your dreams regardless of whether or not you land in the top 5%. [bctt tweet="Are you in the top 5% of income or net worth? Does it matter? Let’s hash it out in this episode of Best in Wealth! #PersonalFinance #FinancialPlanning #Wealth #WealthManagement " username=""]

Resources Mentioned

Connect With Scott Wellens

Demystifying Financial Advisors, Ep #252

Fri, 04 Oct 2024 05:00:00 -0500

Did you know that anyone can say they are a financial advisor? They may not be licensed or experienced. So how do you know who to trust? In this episode of Best in Wealth, I will break down the three types of people who put “financial advisor” on their business cards, what the letters after a financial advisor's name mean, and how a fee-only financial advisor is compensated for their services. Knowing all of these things will help you determine what type of advisor is right for you to help you achieve a successful retirement. [bctt tweet="Did you know that anyone can say they’re a financial advisor? They may not be licensed or experienced. So how do you know who to trust? Find out in episode 252 of Best in Wealth! #Retirement #Investing #PersonalFinance " username=""]

Outline of This Episode

[1:08] High expectations do not leave room for satisfactory outcomes
[6:17] The 3 types of people who put “financial advisor” on their business cards
[19:14] How fee-only financial advisors charge for their services
[22:34] What do the letters after a financial advisor's name mean?
[24:17] Work with someone you can build a connection with

The 3 types of financial advisors

Three different types of people typically put “financial advisor” on their business cards:

Insurance Sales Representative: They are required to be licensed to discuss or sell insurance. Their main goal is to sell you life insurance (typically whole life insurance that can be invested and earn dividends and be used for retirement). Is someone who can only sell life insurance acting in your best interest all of the time? How could they be? They make a commission on the insurance product that they sell you.
Registered Representative/Broker-Dealer: They take an exam to be “registered” to sell securities, mutual funds, life insurance policies, etc. They are paid by commission, much like insurance representatives. Or they will recommend a mutual fund where they get a percentage (annual 12B1 fees and more). They are also not fiduciaries.
Investment Advisor Representative: They must take a securities exam that also covers laws required to act as a fiduciary. An investment advisor is prohibited from collecting commissions. The fees they collect come directly from the client. They can call themselves fee-only representatives.

I am a fee-only Investment Advisor Representative. I do not co-mingle with insurance sales representatives or registered representatives. It removes any conflict of interest. I am not beholden to any company. I must act in the best interest of my clients. Most financial advisors are dually registered. They may have an insurance or broker license. Listen to find out what questions you have to ask an advisor to find out if they are strictly an Investment Advisor Representative. [bctt tweet="In this episode of Best in Wealth, I’ll break down the three types of people who put “financial advisor” on their business cards and why it matters. #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How fee-only financial advisors charge for their services

There are four primary ways a fee-only advisor might get paid:

Hourly: You hire a financial advisor to create a financial or retirement plan and you pay them for the hours it takes to do the job. It is a short-term relationship.
One-time planning: A one-time plan may cost you $5,000–$7,000, which you pay once. They deliver the plan and you write them a check. It is a short-term relationship.
Monthly retainers: The advisor might charge a couple hundred dollars a month, depending on the complexity of your plan. This may be great for someone who needs help with budgeting, college loans, setting up 529 plans, etc.
Assets under management: This is when you are charged an annual fee that is typically a percentage of your assets under management. The money is taken directly out of your brokerage account(s), which the advisor is handling for you. This is how most fee-only financial advisors work.

Fortress Planning Group operates using the assets under management approach.

What do the letters after a financial advisor's name mean?

There are three gold standards that actually matter:

CFP: This is short for “Certified Financial Planner,” which is what I am. A CFP must have a college degree to deliver holistic planning.
CFA: This is short for “Certified Financial Analyst,” which is a difficult designation to achieve. These are experts in investing.
CPA: This is short for “Certified Public Accountant,” these are experts in taxes.

There are hundreds of other designations. But if you are looking for letters, look for one of these three. If you want someone who can help advise you on investments, taxes, retirement, insurance, etc. you want a CFP. [bctt tweet="How do fee-only financial advisors charge for their services? Learn how it works in this episode of Best in Wealth! #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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Does the Outcome of the Presidential Election Impact My Investments? Ep #251

Fri, 20 Sep 2024 05:00:00 -0500

Do we care who wins the election? Does it actually impact our investments? The issues at stake matter to each of us for different reasons. Most Democrats think things will be better if a Democrat is voted into office. Most Republicans likely feel that things will fare better with a Republican in office. But does who wins the election actually matter when it comes to your investments? I will break it down in this episode of Best in Wealth. [bctt tweet="Does the outcome of the presidential election impact your investments? I share the surprising answer in episode #251 of Best in Wealth! #Investing #FinancialPlanning #WealthManagement " username=""]

Outline of This Episode

[1:08] September is never a good month in the stock market
[4:02] Stock market statistics during each presidency
[15:32] What do we do with this information?
[20:17] Can a President influence the stock market?

Stock market statistics during each presidency for the last 100 years

We have had 17 presidents since 1926. Nine of the presidents were red, eight were blue. How did the stock market fare during their presidencies?

Calvin Coolidge (Republican) was President from 1923-1926: If you invested $1 the day he became president, that dollar would’ve turned into $2.33.
Herbert Hoover (Republican) was president from 1929-1933, during the Great Recession: Inflation was -0.7%. The annual GDP was negative 7.5%. Your $1 would have dwindled to $0.28.
Franklin D. Roosevelt (Democrat) was president from 1933-1945: Democrats controlled the Senate and the House. Unemployment was 25.6%. The average GDP was 9.4%. Your $1 doubled twice and then some—becoming $4.61.
Harry Truman (Democrat) was President from 1945-1953: Max unemployment was 7.9%. He inherited the end of Hoover’s recession. Annualized inflation was 5.4%. The average GDP was 1.3%. Your $1 turned into $3.10.
Dwight Eisenhower (Republican) was President from 1953–1961. Max unemployment was 7.5%. The average inflation was 1.4%. The average GDP was 3%. There were three different recessions during his term in office. Your $1 turned into $3.05.
John F. Kennedy (Democrat) was President from 1961-1963. Democrats controlled the House and Senate. Max unemployment was 7.1%. The average inflation was 1.2%. The average GDP was 4.4%. Your $1 turned into $1.39.
Linden B. Johnson (Democrat) was President from 1963-1969. Democrats controlled the House and Senate. Max unemployment was 5.7%. The average inflation was 2.8%. The average GDP was 5.3%. Your $1 turned into $1.66.
Richard Nixon (Republican) was President from 1969-1974: Democrats controlled the House and Senate. Max unemployment was 6.1%. The average inflation was 6%. The average GDP was 2.8%. Your $1 stayed $1.
Gerald Ford (Republican) was President from 1974-1977: Democrats controlled the House and Senate. Max unemployment was 9%. The average inflation was 6.5%. The average GDP was 2.6%. There was a huge recession when he first started. Your $1 turned into $1.51.
James (Jimmy) Carter (Democrat) was president from 1977-1981: Democrats controlled the House and Senate. Maximum unemployment was 7.8%. The average inflation was 10.2%. The average GDP was 3.3%. Your $1 turned into $1.55.
Ronald Reagan (Republican) was president from 1981-1989: Democrats controlled the House and the Senate was mixed. Max unemployment was 10.8%. The average inflation was 4.2%. The average GDP was 3.5%. Your $1 turned into $2.89.
George H. W. Bush (Republican) was President from 1989-1993: Democrats controlled the Senate and the House. Maximum unemployment was 7.8%. The average inflation was 4%. The average GDP was 2.2%. Your $1 turned into $1.79.
Bill Clinton (Democrat) was President from 1993-2001: He had a mixed Senate and mixed House. Maximum unemployment was 7.3%. The average inflation was 2.5%. The average GDP was 3.9%. Your $1 turned into $3.56.
George W. Bush (Republican) was President from 2001-2009: He had a mixed Senate and mixed House. His Presidency lived through the dot-com bubble and then the Great Recession. Maximum unemployment was 7.3%. The average inflation was 2.3%. The average GDP was 2.2%. Your $1 turned into $0.79.
Barack Obama (Democrat) was President from 2009–2017: He had a mixed Senate and Mixed House. Maximum unemployment was 10%. The average inflation was 1.7%. The average GDP was 1.7%. Your $1 turned into $2.94.
Donald Trump (Republican) was President from 2017-2021: Republicans controlled the Senate and the House was mixed. Maximum unemployment was 14.8%. Hit a recession in 2020. The average inflation was 1.8%. The average GDP was 1.4%. Your $1 turned into $1.81.
Joe Biden (Democrat) has been President since 2021: Republicans have controlled the Senate with a mixed House. Maximum unemployment was 6.4%. The average inflation was 5.5%. The average GDP was 3.4%. Your $1 turned into $1.33.

Whew. Alright. Now, what do we do with this information? [bctt tweet="In this episode of Best in Wealth, I cover how the stock market performed during each presidency for the last 100 years. Learn why it matters by listening! #Investing #FinancialPlanning #WealthManagement " username=""]

What should you do if your preferred President is not elected?

While you may be tempted to drop out of the market, that is never the answer. 15 out of the 17 Presidents had positive returns in the stock market. That means that 88% of the time, we have seen positive returns in the stock market. We only saw negative returns during the Great Depression and under Bush during the Dot-com bubble and Great Recession. If you invested $1 in 1926, that $1 would be worth well over $10,000 right now. If you only invested that money when your preferred President was in office, you would only have half that amount. You would miss out on so many returns. Remember, we are investing in companies—not Presidents. The S&P 500 averages over 10% returns every year. There is no data we can come up with that would tell us to get out of the market depending on who is elected. Who is elected never matters for your investments. [bctt tweet="What should you do if your preferred President isn’t elected? I give you my two cents in episode 251 of Best in Wealth! #Investing #FinancialPlanning #WealthManagement " username=""]

Resources Mentioned

Stocks often drop in September — but many investors shouldn’t care

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6 Lessons from Fritz Gilbert’s 6 Years of Retirement, Ep #250

Fri, 30 Aug 2024 05:00:00 -0500

I frequently talk about what you should do to prepare for retirement and how to handle the years leading to retirement. But I rarely talk about what to do during retirement because I have not experienced it. [bctt tweet="Retirement will be different than you expect. How? Learn more in episode #250 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username="wellensscott"] So when I came across Fritz Gilbert’s article, “6 Lessons from 6 Years of Retirement,” I knew I had to talk about it. In the article, Fritz talks about the surprising things he has learned six years into retirement. I will cover the fascinating lessons in this episode of Best in Wealth.

Outline of This Episode

[1:06] Thank you for being loyal listeners!
[1:36] What should you do during retirement?
[4:52] Lesson #1: Retirement is complex
[7:47] Lesson #2: Retirement changes with time
[10:45] Lesson #3: Retirement will be different than you expect
[14:17] Lesson #4: Your priorities will change throughout retirement
[17:45] Lesson #5: Your mindset matters a lot
[18:58] Lesson #6: Retirement can be the best years of your life

Lesson #1: Retirement is complex

When you retire, you have far fewer external influences than during your working years. Money issues are top-of-mind during the early phase of retirement. It is scary moving from collecting a paycheck for 30+ years to starting to live off of your nest egg. But Fritz believes that true value comes by figuring out all of the non-financial issues in retirement. [bctt tweet="Your mindset matters a lot in retirement. Find out why in episode #250 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username="wellensscott"]

Lesson #2: Retirement changes with time

Your experience will change as you move from the honeymoon stage to more advanced stages. The changes will last for years and will be different than what you expect. Your retirement plan will change. Your new reality requires a new approach. Embracing the challenge is part of the fun. Why not enjoy the new life? You get to experiment as you face the changes. Lesson #3: Retirement will be different than you expect I spend a lot of time talking about retirement goals with my clients. Whether it is traveling, spending time with grandkids, buying a second home, donating to charity, etc. we revisit it every six months. Why so frequently? It is impossible to know what you want retirement to look like until you live through it. As long as you expect change, it will be exactly how you think it will be. Let the journey lead you where it may.

Lesson #4: Your priorities will change throughout retirement

Priorities change throughout your entire working life. Whether you are choosing a job, raising kids, or sending them off to college—it is constant change. You may have thought you were done but priorities continue to change when you retire. [bctt tweet="Retirement can be the best years of your life—and they can be the worst. What’s the differentiator? Learn more in episode #250 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username="wellensscott"] Fritz was focused on covering expenses when he retired. Then he realized it would be hard to spend all of the money he had saved, so they gave themselves permission to spend their money. Then they shifted to thinking about bringing fulfillment to their lives.

Lesson #5: Your mindset matters a lot

After reflecting on the first six years of his retirement, Fritz realized what brought him to a place of fulfillment was having the right mindset. It is vitally important. It is your job to fill your day. It is your job to focus on gratitude. With the right mindset, you can have an unbelievably filling retirement.

Lesson #6: Retirement can be the best years of your life

Fritz is happier than he has ever been. But so many retirees are struggling. 28% are absolutely miserable. Alcoholism and depression run rampant in many retirees. Fritz writes to help others get out of their slump. He wants them to know their future can be bright. It is up to you to fill your days with things that bring you joy. What surprised you the most about Fritz’s first years of retirement?

Resources Mentioned

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The 3 Big Rules of Investing, Ep #249

Fri, 02 Aug 2024 05:00:00 -0500

I believe there are three rules that every family steward should follow when it comes to investing. In theory, these rules are “easy” to follow—but living by them is not. Secondly, these rules will not surprise you. That does not make them any less important. So in this episode of Best in Wealth, I will share what each rule is and you will discover why you have to follow them. [bctt tweet="📣 What are my 3 BIGGEST rules for investing? Find out in episode #249 of Best in Wealth! #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Outline of This Episode

[1:06] The 3 rules for dating my daughters
[5:31] Rule #1: Do NOT try to time the market
[11:12] Rule #2: Do NOT focus on the headlines
[13:53] Rule #3: Do NOT chase past performance

Rule #1: Do NOT try to time the market

Whether it is a bad day in the stock market or upcoming elections, it can be easy to let your emotions get to you and think, “Maybe I should get out of the market right now.” It is easy to sell everything and get your money out. However, it is far harder to decide when to put the money back in. No one ever thinks about the second half of the equation. Do you have an investing philosophy? What is your system? When will you get your money back in the market? The S&P 500 has been rolling. It was up 15% last quarter. Small Value was negative for the year. Wouldn’t it be tempting to take the money from your small value and move it into the S&P 500? But Small Value has done far better this quarter. You would have lost out on that money. John Bogle—The Founder of Vanguard—spent over 70 years on Wall Street. He’s famously known for saying, “I’ve never found anyone who can successfully time the market.” There is a reason for that. [bctt tweet="🚨 Do NOT try to time the market. Why? Check out episode #249 of Best in Wealth for the answer. #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Rule #2: Do NOT focus on the headlines

It is too easy to become enamored with popular stocks that get media attention. For example, the Magnificent Seven has risen in popularity (Google, Apple, Facebook, etc.) for the last 10 years. They have done amazingly well in 2023 and 2024. However, once companies hit the “top 10,” their returns tend to decline. Just because you read a headline about a company does not mean it will perform better. What you have read about is already priced into the market. You must separate what you are seeing on the news from your investment.

Rule #3: Do NOT chase past performance

You might be inclined to choose investments based on past returns. You expect top-ranked funds to continue to deliver their best performance. We see this time and time again with new investors. They do not know where to start. The only information they have in front of them is past performance. So they choose what has had the best performance recently. But research shows that most funds that are ranked in the top 25% don’t remain in the top 25% over the next five years. Only about 1-in-5 mutual funds stayed in the top-performing group. The lesson? A fund’s past performance offers limited insight into its future returns. As family stewards, how do we shift our focus? What do we want to do instead? Listen to hear my thoughts. [bctt tweet="📣 One of my biggest rules for investing: Do NOT chase past performance. Learn why in episode #249 of Best in Wealth! #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

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Buying a New Car: What to Learn from My Experience, Ep #248

Fri, 19 Jul 2024 05:00:00 -0500

When we decided my wife was going to get a new vehicle, I knew we needed to test drive the vehicle she wanted: A Jeep. She had never driven a Jeep before. She had never experienced what it was like driving something with the doors off. So I knew she needed to get behind the wheel to see how it felt. Let me tell you, our Jeep-buying experience was a wild ride! In this episode of Best in Wealth, I will share our experience, and how I ultimately purchased my wife her dream Jeep at the best price possible. Don’t miss it! [bctt tweet="My wife and I just bought a brand new Jeep. I detail how I negotiated the best price in episode #248 of Best in Wealth! #FinancialPlanning #WealthManagement #Jeep" username=""]

Outline of This Episode

[1:11] Growing our health alongside our wealth
[2:46] Walking into the dealership
[9:17] The moment everything went wrong
[12:23] Asking for the best price
[17:17] Purchasing my wife’s Jeep

Walking into the dealership

When we walked into the dealership, we test-drove a Jeep with the salesman. He immediately pushed us to sit down, crunch some numbers, and make a deal happen. But I knew we would not be making an emotional purchase that day, and I immediately let him know we were not going to move quickly. My wife told him that if negotiation was necessary, all communication had to go through me. The next day, this salesman started bombarding my wife with text messages, emails, and phone calls. Not surprising. She responded and said she wanted to test-drive a hybrid with the doors and top off. We set up a day and time. We walked to the Jeep and he showed us how he had taken the doors off. But he had not taken the top off because it was a “Two-person job.” We took it for a spin with the doors off and it was really cool. It was a great ride. My wife decided she wanted a Jeep. But, yet again, he had her test drive a Jeep that wasn’t a hybrid. My wife had a list of non-negotiable specifications that she wanted from the Jeep, including it being a hybrid. We knew that a hybrid wasn’t on their lot. This salesman had done enough for us that I knew I would buy the Jeep through him if he could match the best price that I could find. That’s when everything went wrong. [bctt tweet="We just bought my wife a brand new Jeep. Why’d we buy new? How’d we get the best price possible? I share my #negotiation secrets in this episode of Best in Wealth! #FinancialPlanning #WealthManagement #Jeep" username=""]

The ridiculous ask

He brought us inside to talk to his sales manager. The sales manager told us that finding my wife’s perfect Jeep was like finding a needle in a haystack. So he asked us to commit that we would buy the Jeep from them before he located it! He would only negotiate at that point. You should never commit to anything before you negotiate and land on a price. It was completely backward, so we walked out the door.

Buying my wife’s Jeep

I immediately went home, sat down at the computer, and found five different Jeeps fitting my wife’s specifications within five minutes. I emailed all five dealerships asking them to email me their best price on the Jeep. Every dealership called me right away. One said, “We do not negotiate over the phone, you have to come in.” I crossed them off my list. The other four dealerships gave me their price within 12 hours. But I did not know if what I was quoted was the best deal. So I took the three best prices and sent them all a text saying, “Congratulations. You made it to the top three with your initial offers. If you would like to sweeten the deal, I’m giving you one final chance. I’m buying a Jeep in the next 48 hours and buying it from the person who has the best price.” One said, “That was my best price,” but the other two sweetened the deal. They took more money off. One of them gave a lower quote than the one that was initially the best. I called that dealership, put $1,000 down, and they held the vehicle for me. I did my due diligence and at the end of the day, I was happy with the price we paid. I share the rest of the story in this episode (including why we bought a new car). Don’t miss it! Would you have done anything differently? I would love to know! [bctt tweet="I negotiated buying my wife’s perfect Jeep at the best price possible over phone and email. How? Learn my strategy in this episode of Best in Wealth! #FinancialPlanning #WealthManagement #Jeep" username=""]

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How Much Should You Spend on Vacations? Ep #247

Fri, 05 Jul 2024 05:00:00 -0500

I am often asked how much a family should spend on vacations. While that is entirely personal, most experts recommend that 5–10% of your net income can be spent on vacations. Many factors may change this number. Maybe you have a large family or your kids are into expensive sports. You might not have that income to spend on a lavish vacation. But to spend any amount on a vacation, you need to budget. You cannot go into debt. So how do I do it? I will share a great strategy in this episode of Best in Wealth. [bctt tweet="✈️ How much should you spend on vacations? How do you budget for them? Learn more in this episode of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement" username=""]

Outline of This Episode

[1:04] We are heading on vacation to Europe!
[2:38] How much you should spend on vacation
[6:48] How we budget for vacations
[8:20] Be aware of luxury creep
[10:02] Be aware of entitlement creep
[11:33] Do not be a vacation scrooge

How to budget for a vacation

You cannot go into debt to purchase a vacation. I have done it. I had a great time. But when I got home, the guilt and regret sunk in. That is why I firmly believe you need to have a spending plan. We set a monthly budget. Then, we have a separate spreadsheet that lists all of our non-monthly line items. It covers things like Christmas gifts, oil changes, car insurance, and vacations. All of these items are added up. If the number is $12,000, we divide it by 12, and save that money in our “escrow savings account.” Every time a non-standard monthly expense comes up, we use that money to pay for it. Those things will not disrupt our budget. [bctt tweet="🗺️ How do you budget for a vacation? I share my family’s strategy in episode #247 of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement" username=""]

Be aware of luxury creep

If you are going to Disney, there are a lot of different hotels to choose from in Orlando, right? You can stay at the Holiday Inn and Suites or choose from numerous luxurious hotels and resorts. Do not let yourself get lured in. Budget within your means. I spent a lot of time budgeting for our trip to Europe and I have saved for a couple of years. We are working within our budget. When it is all said and done, I will be proud. I am getting to spend time with my family within the budget I have set.

Be aware of entitlement creep

Do not let entitlement justify overspending on vacation. You are grinding every day at your job. You are exhausted being a parent. You deserve a vacation. But do not spend too much because you “deserve” it. It will eat you up inside. It is not about keeping up with the Joneses. Just because your neighbor stayed at a five-star hotel and was waited on hand and foot does not mean you should. Do not allow yourself to be talked into something you cannot afford. You know who you are. You are listening to a financial podcast. You are a budgeter. But you cannot be afraid to take a vacation. A vacation is investing in your family, investing in improving your mental health, and investing in lasting memories. Remember, vacations with your loved ones are an appreciating asset. [bctt tweet="⭐ Don’t let entitlement justify overspending on vacation. You deserve a vacation. But let’s keep it within budget, shall we? Learn more in episode #247 of Best in Wealth! #PersonalFinance #VacationPlanning #WealthManagement" username=""]

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4 Questions to Help You Decide When to Retire, Ep #246

Fri, 07 Jun 2024 05:00:00 -0500

There are a lot of huge decisions you have to make in life. What career are you going to choose? Will you get married? Will you have kids? Will you buy a home? There are many more. But there are not many bigger than this question: When are you going to retire? Maybe that is your only huge decision left. Have you really thought about it yet? Because if you are going to retire early, we have to plan for it. In this episode of Best in Wealth, I cover four huge questions you have to consider to help you make one of the biggest decisions of your life. [bctt tweet="🚨 In this episode of Best in Wealth, I ask 4 questions that will help you decide when to #retire. Check it out! #Retirement #RetirementPlanning #FinancialPlanning" username=""]

Outline of This Episode

[1:02] What big choices have you made in your life?
[2:33] What the 2024 Retirement Confidence Survey tells us
[9:48] 4 things to consider when contemplating early retirement
[11:04] Question #1: Why do you want to retire early?
[12:34] Question #2: What is your plan for retirement income?
[15:00] Question #3: Do you have a plan for health insurance?
[18:00] Question #4: When are you going to collect Social Security?

What the 2024 Retirement Confidence Survey tells us

Deciding when you are going to retire is an enormous decision to make. Americans are not mandated to retire at a certain age. Certain milestones may make the decision easier.

Age 62: This is when you are first eligible for social security (though you will take a big hit on benefits)
Age 65: This used to be the full retirement age (and is still the age when you are eligible for Medicare)
Age 67: This is when you can collect your full retirement benefit from Social Security
Age 70: If you wait until 70 to retire, you can collect a larger social security benefit

A recent survey suggests that most people want to retire in their mid-60s. In reality, many retire earlier. It may be due to downsizing, deteriorating health, etc. According to the 2024 Retirement Confidence Survey, the median expected retirement age is 65. Only 28% of people expect to retire at this age (up 23% from last year). Most retire closer to age 62. 52% of current workers are expecting to retire gradually. 36% are expecting to retire all at once. Yet 74% of current retirees had a full stop to work and only 18% engaged in a gradual transition. These are all things to consider when deciding what age to retire. [bctt tweet="📣 What does the 2024 Retirement Confidence Survey tell us about when and how people are actually retiring? Get the details in this episode of Best in Wealth. #Retirement #RetirementPlanning #FinancialPlanning " username=""]

Why people like to retire earlier

If you had to choose now, when would you retire? Many people want to retire earlier than the traditional mid-60s. Why? People like to retire earlier to enjoy time while they are healthy and physically active. They can travel everywhere they have been waiting to go. They can play pickleball. As a financial advisor, we play a huge role in helping clients consider the ramifications of their choice (based on both financial and lifestyle factors). When we are helping our clients contemplate early retirement, there are many things to consider. When we onboard clients, we have meetings about investment planning, retirement income strategies, tax strategies for retirement, and insurance and estate planning. That’s before someone is officially signed as a new client.

4 things to consider when contemplating early retirement

Here are four things we consider that may help you make this decision if you are doing this on your own:

Why do you want to retire early? Are you tired of your current job? Do you have a plan or routine in place for when you retire? What if you simply need a new career? Too many people retire and become depressed because no one depends on them anymore. If you have a good “why,” you can move on to the next step.
What is your plan for retirement income? We have to look at the wide range of outcomes for retirement plans for an extended retirement. People are living longer and longer. If we have to plan for 40+ years, numerous ranges of return and inflation outcomes must be considered.
Do you have a plan for health insurance? If you are going to retire at 55 or 60, you are not eligible for Medicare yet. Extended health care coverage (COBRA) is expensive and has a time limit (18 months). What can you do to bridge the gap between retirement and Medicare?
When are you going to collect Social Security? If you retire at 55, will you have enough money to survive until age 62 at the very earliest? We have to figure out how you will navigate uneven cashflow until you can claim Social Security.

Everything matters when we are planning for retirement—especially an early one. [bctt tweet="📣 What are 4 things you NEED to consider when contemplating an early retirement? I share important details in episode #246 of Best in Wealth. Check it out! #Retirement #RetirementPlanning #FinancialPlanning " username=""]

Resources Mentioned

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How to Teach Your Kids How to Budget, Ep #245

Fri, 24 May 2024 05:00:00 -0500

I make a spending plan for our family every single month. We account for every dollar coming in and going out. But what about the things that happen quarterly and annually? We add up all of those expected expenses at the beginning of the year and calculate the total approximate cost. That money will be saved every month to go toward those expenses. That is how we allocate money for things like Christmas and birthdays, too. We budget $300 for each daughter’s birthday party and $200 for a present and save for it monthly. But last year, we bought pizza, cake, snacks, etc. Our daughter requested that we take her friends to brunch the next morning. We ended up spending far more than we had budgeted. Now we need to save more in the remaining months of the year to make up for going over budget. When I have to do this, we have to lower our spending or it will not balance out. I vowed that it would not happen again. So this year, we did things a little bit differently. Listen to this episode to learn a unique way you can teach your kids how to budget. [bctt tweet="🎉 In episode #245 of the Best in Wealth podcast, I share a unique way you can teach your kids how to budget that they’ll enjoy, too! #PersonalFinance #Budgeting #FinancialPlanning" username=""]

Outline of This Episode

[0:35] Why my kids had to take a personal finance class
[2:55] Why I make a spending plan every month
[5:05] Budgeting for my daughter’s birthday
[9:09] How I taught my daughter to budget
[18:37] The powerful lesson my daughter learned

What I plan on doing differently this year

My daughter was talking with my wife about her plan for her birthday and I knew I needed to interject. That is when a lightbulb went off in my head. I asked her to share what she wanted to do for her birthday. She planned to have 10 of her friends over for a sleepover. She wanted to decorate our basement with banners and balloons. She wanted to take her friends out for pizza and ice cream. She also wanted to take them to an escape room. Lastly, she wanted to give her friends a cool party favor. I’m sweating profusely at this point, starting to get nervous about my plan. But I took a deep breath and said, “That all sounds great.” I then proceeded to tell her that we had $300 saved for her birthday party and $200 for her birthday present. I told her that she got to plan her party down to the last detail—but that she had to stay within the $300 budget. Even better, if she spent under $300 on the party, I would take the extra money and put it toward her birthday present. But I told her that there was a catch: If she spent more than $300 on her party, it would be deducted from her birthday present. [bctt tweet="💡 I asked my 14-year-old daughter to plan her birthday party and gave her a specific budget to work with. It was a game-changer. Learn why in this episode of Best in Wealth! #PersonalFinance #Budgeting #FinancialPlanning" username=""]

My daughter’s real-life experience with budgeting

She had to calculate how many friends she wanted to invite and how much it would cost for pizza and ice cream for all of them. She had to find out how much the escape room would cost. She had to calculate how much the decorations would cost. She wanted to get her 10 friends Owala water bottles for party favors. She excitedly said, “They’re cheaper than Stanley’s—only about $30 a piece.” And I said, “Eva—what’s $30 x 10?” Her smile faded when she realized the water bottles alone would eat her entire budget. So she got to work. She decided they would not do the escape room. She would get ice cream that was on sale at our local grocery store. We would buy pizza from Costco. She priced out birthday decorations on Amazon. She also decided to invite only her closest friends so she could still get each of them an Owala water bottle. The grand total for her birthday party was $294. She came in $6 under budget. My daughter was in control of her party and learned a valuable lesson: When you want something, you have to find a way to make it work that is within your budget. What do you think? Would you try this with your kids? [bctt tweet="🥳 I had my 14-year-old daughter plan her own birthday party. Why? To teach her how to #budget. Learn how you can do the same thing with your kids in episode #245 of Best in Wealth! #PersonalFinance #Budgeting #FinancialPlanning" username=""]

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How to Overcome “The Wall of Worry,” Ep #244

Fri, 26 Apr 2024 05:00:00 -0500

Why are we worried about the world, the economy, the stock market, and our investment accounts? The stock market started the year great. The S&P 500 was up over 10% at the end of the first quarter. But the stock market has dropped steadily in the first 19 days of April. My business Partner, Brian, wrote an article titled “The Wall of Worry.” In this episode of Best in Wealth, I will cover some of the details of his article and share why family stewards can take a deep breath. [bctt tweet="How can you overcome concerns about the stock market, inflation, and the geopolitical climate? I share some statistics to calm your nerves in this episode of Best in Wealth! #Investing #FinancialPlanning #WealthManagement" username=""]

Outline of This Episode

[2:29] Why is everyone so worried?
[3:52] The market reacted to inflation
[9:52] The geopolitical climate
[15:03] What do we know?

The market reacted to inflation

The financial markets saw a great start in 2024. US stocks raced to almost 10% gains in the first quarter. Things have since been dropping, almost back to where we started. We saw the same pattern in 2023. The inflation report released in March reported a 3.5% annual rate—higher than expected. It also likely closed the door on a June interest-rate cut by the Fed. That news made the stock market drop quickly in April. Why? The stock market had priced in six interest rate cuts in 2024. But because inflation ticked higher, the expectation has shifted to maybe three cuts. Market participants are clearly worried. In June 2022, CPI inflation was at its peak at 9.1%. It’s dropped every quarter since. In June 2023, we were down in the threes. In March, it was 3.5%. When you look at the report, you will see progress. Battling inflation is a messy process. We should consider ourselves fortunate that inflation has fallen as much as it has, without a catastrophic event happening in the economy or labor market. We have avoided a recession so far. The average rate of inflation over the last 100 years is 3%. Our latest inflation rate was 3.5%. The Fed wants the inflation rate to be 2%. But 3% inflation might be the “new normal.” [bctt tweet="worrying? I share some thoughts in this episode of Best in Wealth! #Investing #FinancialPlanning #WealthManagement" username=""]

The market reacted to the geopolitical climate

Stocks were up while bonds and oil were down as Brian wrote this article on Monday the 15th. It was the opposite of what we thought would happen. What were past reactions to major geopolitical events? They might surprise you:

In the six months following the onset of WWI in 1914, the DOW dropped 30%. The market closed for six months. But it rose more than 88% in the following year—the highest annual return on record.
Hitler invaded Poland on September 1st, 1939, beginning WWII. When the market opened, the DOW rose 10% in a single day.
The DOW Jones lost 1% and remained calm during the 13 day period of the Cuban Missile Crisis in 1932.
The stock market opened up at 4.5% the day after JFK was assassinated and gained more than 15% in 1964.
Stocks fell sharply after the 9/11 attacks, dropping 15% in the two weeks following the tragedy. The economy was already in a deep recession. Within a couple of months, the stock market had gained back all of its losses.
The US invaded Iraq in March 2003. Stocks rose 2.3% the following day and finished the year with a gain of more than 30%.

When the geopolitical climate is uncertain, it causes us to feel anxious and can lead to panic. But it rarely pays off to make portfolio changes in reaction to geopolitics. Why? We do not know what is going to happen. The more we dwell on it, the more our minds go to worst-case scenarios. While we might be right about our predictions, we could be wrong about how the stock and bond markets will respond.

What do we know?

We will likely see market volatility over the coming days, weeks and months. Why? Because the election is coming up! As we digest this new information, we will keep you updated. But remember—your best guard against so much uncertainty is to have an investment policy statement to guide you through the good and the bad. Stay informed but do not allow yourself to be affected. [bctt tweet="We will likely see market volatility over the coming days, weeks and months. It’s completely normal. Find out why in this episode of Best in Wealth! #Investing #FinancialPlanning #WealthManagement" username=""]

Resources Mentioned

The Wall of Worry by Brian Cayon

Connect With Scott Wellens

Understanding the Mutual Fund Landscape, Ep #243

Fri, 12 Apr 2024 05:00:00 -0500

The mutual fund landscape is complex, with thousands of choices. In fact, at the end of 2023, there were 4,722 US-domiciled funds that we could choose from. Of those, 2,043 were from US equities, 1,124 were international funds domiciled in the US, and over 1,500 were bond funds. If you add all the money from these funds, it totals 10.6 trillion dollars. $5.4 trillion is in US equity funds, $2.1 trillion is in international equities, and $3 trillion is in bond funds. Whew. If you decide to buy an ETF or mutual fund, you are spreading out your risk (as opposed to buying individual stocks). But how do you choose between the thousands of options? Should you choose between the thousands of options? My goal is to help you understand the landscape of mutual funds so you can make informed decisions in this episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth, I dive into the mutual fund landscape and how it works. Give it a listen! #wealth #investing #FinancialPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] Did you fill out an NCAA bracket?
[3:32] The mutual fund landscape
[6:21] What is an active mutual fund versus an index fund?
[11:28] Actively managed funds aren’t performing well
[16:48] Are you an active or passive investor?
[18:02] Is there a better way?

What is an index fund?

An index fund is your first option for investing in a mutual fund. An index fund tracks indexes, such as the S&P 500 or Russell 3,000. You are buying “the market.” You will receive the return of that market (minus expenses and tracking error). If you want to do better than an index fund and do better than the average of the stock market, you hire someone to manage it for you (i.e. buy into an actively traded fund). [bctt tweet="What is an index fund? I cover the basics of mutual funds (and how many there are to choose from) in this episode of Best in Wealth! #wealth #investing #FinancialPlanning #WealthManagement" username=""]

What is an active mutual fund?

An active fund is your second option for investing in a mutual fund. You have the option to buy that fund through your brokerage account or 401k. Active funds have a mutual fund manager and a team of people making decisions on the fund’s behalf. The manager is the “expert.” They look at all of the publicly traded companies and choose the ones that will be in the fund. That manager and his/her team might decide to sell some of those companies. You are hiring this manager to do well, to beat the market. But how do you know if they are doing well? The University of Chicago’s Center for Research and Security Prices is a great place to start. They looked at every single publicly traded company and created indexes to see how the market was doing. They are how we learned that the US stock market averaged a 9% return per year. But this throws a wrench in things: It is not looking good for the actively traded funds.

Actively managed funds are not performing well

On 12/31/13, there were 3,022 funds available to choose from. As of 12/31/23, only 67% of those funds still exist. Why? Those 33% were not performing well. When we look at winners, looking back 10 years, only 25% of the experts beat the market. You only have a 25% chance of selecting an actively managed fund that will beat the market. 15 years ago, there were 3,241 funds and only 51% of them survived and only 21% of them had beaten their benchmark. Only 45% of the funds that existed 20 years ago survived. Of the 2,860 funds available 20 years ago, only 18% have beaten the market. What does this tell me? Actively managed funds are not doing any better than index funds. Chances are, whether you buy into an index fund or an active fund, it is not always the best way to invest. We like to look at things differently at Fortress Planning Group. Stay tuned, because I will cover it in another episode. [bctt tweet="Actively managed funds aren’t performing well. Should you buy them? I cover your options in this episode of Best in Wealth! #wealth #investing #FinancialPlanning #WealthManagement" username=""]

Resources Mentioned

Center for Research and Security Prices

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Solving the Two Biggest Retirement Problems, Ep #242

Fri, 15 Mar 2024 05:00:00 -0500

The #1 issue most people face when it comes to retirement is running out of money. Secondly, most people want to live the best retirement that they can. If there is anything left, they will gladly give it to their children—but it does not need to be millions of dollars. Too many people are dying with too much money and never got to live out the retirement of their dreams. You have been saving your entire life. You should not be scared to spend the money and fear it running out. So how do we make sure that does not happen? I will share some of the common solutions—and our strategy at Fortress Planning Group—in this episode of Best in Wealth. [bctt tweet="The #1 issue most people face when it comes to retirement is running out of money. How do we solve for that at Fortress Planning Group? Learn more in episode #242 of Best in Wealth! #retirement #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:07] Spending money in your retirement
[2:49] The two central issues with retirement income
[4:38] Solution #1: Purchase an annuity
[5:50] Solution #2: Live off your dividends
[8:00] Solution #3: The 4% rule
[10:04] Solution #4: Guyton and Klinger’s Guardrails
[15:30] Utilizing risk-based guardrails

Solution #1: Purchase an annuity

An annuity has the potential to give you steady income until you die. Let’s say you give $1 million to an insurance company in exchange for monthly payments. It might be $4,000-$6,000 per month. But when you pass away, the insurance company keeps your money. If the insurance company goes out of business, you lose those monthly payments. Many people still use annuities to fund their retirement. The biggest drawback is that most people do not think about inflation. That money will not go as far in 20 years.

Solution #2: Live off your dividends

Let’s say you have $1 million and you decide to buy a company that is paying a nice dividend. Let’s just say you are receiving a 5% dividend or $50,000 a year to live off of. But most people do not know that dividends can go down. Secondly, when the stock price fluctuates, your $1 million could lose value. Someone who invested in Wachovia Bank lost everything when they filed bankruptcy. The investment became worthless. [bctt tweet="Can you fund your retirement by living off your dividends? I share why this isn’t the wisest decision (and what we do instead) in this episode of Best in Wealth! #retirement #RetirementPlanning #WealthManagement" username=""]

Solution #3: Follow the 4% rule

Stocks can gain value over their lifetime. The 4% rule means that if you have $1 million, you could live off of a 4% withdrawal from your portfolio the first year. Every year, you take an inflation adjusted raise. If inflation is 10%, you withdraw $44,000. If you do that, your purchasing power stays the same. Bengen looked at every 30-year period in history and 93% of the time, the 4% rule works. What about the other 7% of the time? What doesn’t the 4% rule solve for?

Solution #4: Guyton and Klinger’s Guardrails

Guyton and Klinger’s Guardrails try to solve for both running out of money and dying with too much money. They propose that a 4% withdrawal can be too small of an amount. They usually start with withdrawals of 4.5–5%. How is their process different? If you start with $1 million and the portfolio goes to $1.2 million, you give yourself a raise as well as an adjustment for inflation. And if your portfolio goes down to $800,000, you have to be willing to take a pay cut until the portfolio gets back above your lower guardrail. When you take raises when your portfolio is doing well, it solves the issue of dying with too much money left. You rely on your guardrails to dictate what you do. But we do not entirely use this strategy—or any of these strategies—at Fortress Planning Group. What do we do? I share our strategy that is unique to each of our clients in this episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth, I introduce Guyton and Klinger’s Guardrails and share why we don’t follow this strategy to a T. Don’t miss it! #retirement #RetirementPlanning #WealthManagement" username=""]

Connect With Scott Wellens

Do Roth Conversions Make Sense For You? Ep #241

Fri, 01 Mar 2024 05:00:00 -0500

What is a Roth conversion? Should you do a Roth conversion? When is the best time to do a Roth conversion? If questions like these have been circulating in your mind, this is the episode for you. I will break down when doing a Roth conversion might make sense for you (and why your CPA might not like it) in this episode of Best in Wealth. [bctt tweet="What is a Roth conversion? Should you do a Roth conversion? I share my expert opinion in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:03] There are some great CPAs out there
[3:56] What is a Roth 401K or IRA?
[7:41] Should you do a Roth conversion?
[9:37] When to do a Roth conversion
[13:37] Why you should work with a financial advisor

Understanding Roth conversions

Your money is either taxable, tax-deferred, or tax-free. Taxable money might be held in a savings account or brokerage account. You may collect interest and dividends. Taxes are due in the year those things happen. Tax-deferred accounts are traditional IRAs, traditional 401Ks, and other retirement plans. You’re contributing money to get a tax break. The money grows and you have to pay taxes on the earnings you make. A tax-free account—like a Roth IRA or 401K—means you contribute after-tax money. You also do not pay taxes on the distributions (because you already paid the taxes). You can convert some of a traditional IRA or 401K and convert it into a Roth account. But all of those dollars are taxable. If you make $100,000, a Roth conversion might land you in the 22% tax bracket (and likely the next one or two brackets above that). It may not be wise to do a large Roth conversion when you make a good amount of money. So when should you?

Should you do a Roth conversion?

If you have deferred money in a Roth IRA, you can do a conversion. But should you? When would you consider it? There’s no easy answer and it will be different for everyone. But there are some circumstances in which it might be better. For example, if you lost your job, took a sabbatical, or did not earn as much money and you are in a low tax bracket because of it, it might be a great time to do a Roth conversion. If your income level is lower, you can convert some over at a lower tax rate than when you made the contribution. [bctt tweet="Should you do a Roth conversion? I break down why it’s not a one-size-fits-all answer in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Roth conversions cannot be undone

Before doing a Roth conversion, consult with a CPA or Financial Advisor. Why? Because it cannot be undone. Let’s say you are taking a sabbatical or recently got laid off. So you decided to convert $50,000 of your traditional IRA. But two months later you are offered a job you cannot refuse. You get a sign-on bonus of $100,000. Suddenly you are making $300,000 a year. That $50,000 that was going to be taxed at 10% is now in the 32% tax bracket. Ouch. In the old days, you could move it back—you cannot do that anymore. So if you are on a sabbatical or lost your job, wait until later in the year before doing a Roth conversion.

When should you do a Roth conversion?

Retirees who have a long runway before receiving social security or taking required minimum distributions and those with large traditional accounts can consider it. If you can live on your taxable account and there is no other taxable income coming in, you can do conversions over years at a lower tax rate. Once you start collecting social security, it can be more difficult to do conversions because it may increase your tax rate. That is why you need to work with a financial advisor. [bctt tweet="When should you do a Roth conversion? I share some need-to-know basics in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Why you should work with a financial advisor

If you are going to do a Roth conversion, you may have to pay more tax today. But it may save you many dollars down the road. Work with a financial advisor who does holistic tax planning. They will help you plan for today while keeping your eyes fixed on the future you are planning. At Fortress Planning Group, we use sophisticated tax and income-planning software to gauge what the tax situation will look like now AND in the future. When Roth conversions are done right, it could potentially mean hundreds of thousands of dollars more in your retirement. Listen to the whole episode to learn what I mean!

Connect With Scott Wellens

The Positive Impact of Uncertainty, Ep #240

Fri, 16 Feb 2024 05:00:00 -0500

David Booth—the Executive Chairman and Co-Founder of Dimensional Fund Advisors—recently wrote an article entitled “Uncertainty is Underrated.” In this episode of Best in Wealth, I will read this intriguing article and share why I agree that—while it sounds scary—uncertainty has a positive impact on our lives. [bctt tweet="Uncertainty is underrated. I share why the impact of uncertainty is positive in this episode of Best in Wealth. #wealth #investing #WealthManagement" username=""]

Outline of This Episode

[1:23] The blue cruise function on my F150
[3:11] David Booth’s article on uncertainty
[10:36] Life is one cost-benefit analysis after another
[13:22] How to manage risk: What to do (and not do)
[19:31] Why you need to know the basics about uncertainty

Uncertainty is why we see stock market returns

Without uncertainty, there would be no 10% annualized return on the stock market. How? According to David, “If there was no uncertainty, returns would be predictable and there would be no difference between putting your money in a savings account or investing it in the stock market.” Risk makes potential rewards possible. When you have money in your savings account and it is earning interest, it is certain that you will receive interest payments. The stock market is different. It is a roller-coaster. The S&P 500 was down 18.5% in 2022 and up 26% in 2023 (which is not abnormal). Uncertainty simply means that we do not know—from day-to-day, week-to-week, or month-to-month—what those returns will look like. Everyone is guessing. Over time, the stock market has delivered a 10% return. The reason we see a higher rate of return in the stock market is only because of the uncertainty. [bctt tweet="Without uncertainty, there’d be no 10% annualized return on the stock market. How? I share the reasons in episode #240 of the Best in Wealth podcast! #wealth #investing #WealthManagement" username=""]

Life is one cost-benefit analysis after another

What is loss aversion? It is the premise that a loss can feel twice as painful as a gain of an equal amount. It might be one reason why uncertainty is underrated. An 18% drop in the stock market feels twice as bad as when the stock market goes up 18%. David points out that “Because of uncertainty, life is one cost-benefit analysis after another, and we have no choice but to manage risk.” We cannot ignore it or eliminate it entirely, nor would we want to. But what we must do is prepare for it. And humanity is no stranger to uncertainty. We have to make choices every day and those choices are how we manage risk. David points out that we cannot control the weather. But if it looks like it is going to rain, we might carry an umbrella around. The cost is the weight of the umbrella but the benefit of that cost is staying dry. He shares that “When it comes to investing, you cannot manage stock market returns, but you can manage the risk you take.”

How to manage risk: What to do (and not do)

So how do we get better at managing risk?

What not to do: Do not try to predict the unpredictable by trying to time the market or pick winning stocks. Many of us struggle with the desire to time the market. But we cannot time it. When we try, it is a loser’s game. You will likely leave a lot of money on the table.
What to do: Diversify your portfolio to reduce risk and capture return. Secondly, figure out the amount of risk that you are comfortable with. You should invest and be prepared for a range of outcomes.

When you have a plan that you can depend on—and experience uncertainty—the more likely you are to succeed long-term. We have all been managing risks and rewards our entire lives. Some years are better than others. But we stick around to see what happens next. That is why uncertainty is positive. David’s final thoughts drive home the point of this entire episode: “The key is to develop a philosophy, define your goals, and steer toward them, adjusting along the way. You might not only be underestimating uncertainty, but you may be underestimating the positive impact of embracing it.” [bctt tweet="How do you manage the risk of uncertainty? Tune in to this episode of Best in Wealth for some dos and don'ts. #wealth #investing #WealthManagement" username=""]

Resources Mentioned

Dimensional Fund Advisors
David Booth’s article: Uncertainty is Underrated
Why Your Portfolio Should Be Internationally Diversified, Ep #239

Connect With Scott Wellens

Why Your Portfolio Should Be Internationally Diversified, Ep #239

Fri, 02 Feb 2024 05:00:00 -0500

If you opened up and looked at your 401k statement, chances are that some of your investments are international. You are investing in companies outside of the United States. If you are invested in a target date fund, it is almost certain. It may be in mutual funds or ETFs. It may be in developed or emerging markets through reliable stock exchanges. But should you own companies outside of the US? Emerging markets in developing countries have not moved much in the last 10 years. The US has had quite a run. Why would you invest internationally? These are all good questions to ask. I will do my best to answer them in this episode of Best in Wealth. [bctt tweet="Should your retirement portfolio be diversified internationally? I cover why the answer is “YES” in this episode of Best in Wealth! #Investing #Retirement #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[2:21] Should I be internationally diversified in my retirement portfolio?
[4:58] You are likely investing internationally already
[7:05] Investing internationally creates a diversified portfolio
[8:44] How the US ranks compared to other countries
[16:25] Other asset classes performed well
[17:59] Another reason to be internationally diversified

You are likely investing internationally already

What kind of car do you drive? If you drive a GM, a Ford, or a Tesla, they are domestic-based companies. You are likely invested in them, too. Many car manufacturers are based internationally. BMW, Mercedes, Volkswagen, Porsche, etc. are owned by a German company. Chrysler, Jeep, and Dodge companies are owned by companies in Italy. The list goes on. We know these cars. Most of the cars we buy and drive every single day are sold by companies that exist outside of the United States. There are many outstanding companies located outside of the US. And if you are invested in them, you’re investing internationally.

Investing internationally creates a diversified portfolio

You know that we do not try to time companies, sectors, countries, international vs. US—we do not time anything. Instead, we diversify your portfolio at a risk level you are comfortable with. We make sure it fits within your retirement plan. A well-diversified portfolio sets you up for a greater chance of success, without big swings. The more asset classes we can add—including international investments—the smoother the “ride” will be. [bctt tweet="Reason #1 you should invest internationally: Investing internationally creates a diversified portfolio. Why else should you diversify? Find out in episode #239 of Best in Wealth! #Investing #Retirement #RetirementPlanning #WealthManagement" username=""]

How the US ranks compared to other countries

It may surprise you that the US is not the only big “player” in the stock market. There are what we consider 45 “reliable” stock exchanges globally. Where did the US rank out of the 45 international stock exchanges in the 4th quarter of 2023? We were not #1. Poland actually produced the best returns. The US ranked #20, about the middle of the pack. Let’s look at some more numbers:

What about the full calendar year? Hungary, Poland, and Greece were up over 50% in 2023. The S&P 500 was up 26%. The US ranked 13th. Thailand and Hong Kong stock exchanges ranked last.
From 2010–2020, the US did really well. But during that decade, the #1 country was New Zealand. The US was ranked #2.
What about 2000–2009? This was a rough time in the US. We started the decade with the Doc-Com bubble. We ended it with the Great Recession. The top two countries were Brazil and the Czech Republic. Greece, Finland, Japan, and the United States ranked at the bottom.

If you started the 2000–2009 decade with $1 million, you ended it with about $900,000. Not good. But if you had a diversified portfolio that included international investments, you would not have a “lost” decade. You may have had a positive outcome from your investments. It did not need to end badly. Disclaimer: These are not investments that you can invest in. You can invest in ETFs or Mutual Funds to gain exposure to some of these countries.

Why international diversification is a must

We can not afford to overly concentrate portfolios in one company, sector, or country. A family steward diversifies their investments, both domestically and internationally. When we design portfolios, we do not invest half and half. The US only represents 60% of the global market. We like to see 70% of portfolios invested in US companies and 30% internationally. But that is not the answer for every portfolio. We need to find a mix that you can stick with that fits your retirement plan and be disciplined. Let your advisor do the strategic rebalancing, tax-loss harvesting, Roth conversions, etc. Why would we not be internationally diversified? Why else is international diversification a must for a family steward? I share more in this episode of Best in Wealth. [bctt tweet="Why is international diversification in your retirement portfolio a must? I cover the reasons in this episode of Best in Wealth! #Investing #Retirement #RetirementPlanning #WealthManagement" username=""]

Connect With Scott Wellens

How Often Should You Look at Your Investments? Ep #238

Fri, 19 Jan 2024 05:00:00 -0500

How often should you look at your investments? Some of my clients look at their investments every day. Some look weekly, monthly, quarterly, annually—and some never look at them. So what is my answer? It depends. After listening to this episode of Best in Wealth, you will know how often you should check on your investments (based on you). [bctt tweet="How often should you look at your investments? Some of my clients look at their investments every day. Daily, monthly, weekly, quarterly, or annually? I share my surprising answer in this episode of Best in Wealth! #Investing #Invest #RetirementPlanning" username=""]

Outline of This Episode

[2:18] Whole30: The importance of consistency and discipline
[6:51] The third-best tennis player in the world
[9:52] The track record of the S&P 500
[17:51] What looking at the S&P 500 tells us
[20:55] How many times should you look at your portfolio?

The third-best tennis player in the world

Let’s talk about tennis for a minute. Roger Federer was one of the top three tennis players of all time. He is elite. Of the millions of tennis players who grew up playing, got scholarships, and played the best they possibly could at the pro level, Roger was one of the best.

Roger won 20 Grand Slam Men’s Single titles, the 3rd most of all time.
He is the only player to win five consecutive US Open titles.
He won 40 consecutive matches at the US Open.
He is the second male player to reach the French Open and Wimbledon finals in the same year for four consecutive years.
He is the only male player to appear in at least one Grand Slam Semi-Final for 18 consecutive years.
He won eight Wimbledon titles.

He is one of the best to ever play the game. But what does any of this have to do with investing? [bctt tweet="What does the third-best tennis player in the world have to do with #investing? Find out in this episode of Best in Wealth! #Investing #Invest #RetirementPlanning" username=""]

The track record of the S&P 500

Let’s switch gears and talk about the S&P 500 (which you can not invest in but it is a benchmark). The S&P 500 has had an amazing track record. The average return is a little over 10% per year. But what does that mean? What does a 10% return look like? Let’s compare the S&P 500 to a high-yield savings account. A 10% return means that every seven years, your money will double. If you have $1 million in investments—and actually earn 10%—it will be $2 million in seven years. The rule of 72 says that if you divide 72 by your interest rate, that is the number of years it will take to double. So if you put your money in a high-yield savings account—likely earning around 4.5% right now—it will take 16 years to double. That is why we need to invest in some things that will grow faster—even faster than a high-yield savings account. What does any of this have to do with Roger? In tennis, each time someone serves the ball, you are playing for a point. When you get enough points, you win the set. When you win enough sets, you win the match. He is one of the best players ever—but he only won a point 54% of the time. Roger won 75% of his sets. And Roger won 81% of his matches. You are probably thinking, “Scott—how does this have anything to do with how often you should look at your investments?” Stick with me. [bctt tweet="What does the S&P 500 and Roger Federer have in common? I share some surprising facts in this episode of Best in Wealth! #Investing #Invest #RetirementPlanning" username=""]

What looking at the S&P 500 tells us

The S&P 500 plays a game every time the stock market is open. How often is the S&P 500 positive or negative? Let’s call a positive result a “win” and a negative return a “loss.” The S&P 500 is positive 53% of the time and negative 47% of the time. If you look at your statements quarterly—like Roger playing a set—the S&P 500 is positive 71% of the time (going back to the 1930s). What about annually? If you look at your statements annually, the S&P 500 is up 78% of the time annually. 8 out of 10 times, you are positive. That is why you typically see a 10% return on the S&P 500. When you look at your statement every day, you will be disappointed half the time. If you look at your statement quarterly, you are only disappointed 29% of the time. If you look at your statement every year, you will only be disappointed 22% of the time. Which sounds better to you? When your portfolio is not doing well, it feels twice as bad as when it is doing well. Too much anxiety leads to a desire for change. When you make too many changes, you disrupt everything. What’s the best choice for you? Listen to the whole episode so I can help you make the most informed decision for you. [bctt tweet="Looking at the S&P 500 tells us how often we should look at our investments. How? I share my thoughts in this episode of Best in Wealth! #Investing #Invest #RetirementPlanning" username=""]

Resources Mentioned

Connect With Scott Wellens

Should You Invest in the Magnificent Seven? Ep #237

Fri, 22 Dec 2023 05:00:00 -0500

BRICS is an acronym that denoted the emerging economies of Brazil, Russia, India, China, and South America. The stock market returns were really good. The economies were expected to continue to explode. So people started pouring into the BRICS. Many people who invested did poorly because they were late to the game. Before BRICS, it was popular to invest in the Nifty Fifty (the 50 most popular companies). News columnists are always looking for the next bright, shiny object. The current “Shiny object” is the Magnificent Seven. What is the Magnificent Seven? How do they perform compared to the US stock market? How is the Magnificent Seven performing year-to-date? Will the stock returns persist? I share what you need to know about the Magnificent Seven in this episode of Best in Wealth. [bctt tweet="Should you invest in the Magnificent Seven? I share some research (and my personal opinion) in this episode of Best in Wealth! #investing #PersonalFinance #FinancialPlanning" username=""]

Outline of This Episode

[1:27] Investing in the BRICS and the Nifty Fifty
[4:07] What are the Magnificent Seven?
[7:01] How well are the Magnificent Seven doing?
[11:03] Will their high performance continue?
[16:54] Should you invest in the Magnificent Seven?

What are the Magnificent Seven?

The Magnificent Seven consists of seven companies in America that are doing the best. It probably won’t surprise you that the companies are: Apple, Microsoft, Alphabet (Google), Amazon, Nvidia, Tesla, and Meta. These companies have performed very well in 2023. At the end of July, the stock market was doing well. The US stock market return (mostly the S&P 500) was up over 20%. The next few months were horrible. November and December have improved. The S&P 500 was up 24.5% when I recorded this episode. What if we took that 20% return and stripped out the Magnificent Seven companies? The return would go from 20.3% to 10.8%—almost halved. Seven companies—out of 4,000—comprised almost half of the return. Unbelievable.

How well are Magnificent Seven doing?

These companies have done well in 2023. Secondly, they are so big that when they perform well, it will shock the US Market compared to smaller companies doing well. Ending 12/14/2023, these company’s returns are astounding:

Apple: Up 58.4% YTD
Microsoft: Up 52.74% YTD
Google: Up 48.5% YTD
Amazon: Up 71.78% YTD
Tesla: Up 132% YTD
Facebook: Up 167% YTD
Nvidia: Up 238% YTD

Isn’t that Magnificent? But we saw outsized performance just like this in the BRICS, when compared to the US stock market. [bctt tweet="How well are Magnificent Seven doing? Will they continue to perform? What does the research tell us? Learn more in episode #237 of Best in Wealth! #investing #PersonalFinance #FinancialPlanning" username=""]

Will their high performance continue?

The Magnificent Seven have been performing well for a long time. In his article, “Magnificent 7 Outperformance May Not Continue,” Wes Crill and his team share that they do not believe the high performance will continue. Looking at annualized returns in excess of the US market before and after joining the top 10 largest US stocks, starting in January 1927–December 2022.

10 years before, the average return was 12%
5 years before, the average return was 20.3%
3 years before, the average return was 27%

However, things changed significantly after joining the top 10.

3 years after, the average return was 0.6%
5 years after, the average return was -0.9%
10 years after, the average return was -1.5%

If you look at all of the companies in the S&P 500 right now compared to 50 years ago, the companies are completely different. Companies go up and companies go down. Will the Magnificent Seven continue to perform?

Should you Invest in the Magnificent Seven?

It is hard to look at the performance of these companies and not believe that it will not continue. Tech is booming. But we do not know the future. What we do know is that timing the stock market does not work. You do need to stay in the stock market. You do need an investment plan that states what percentage is allocated to each asset class. You need a plan that you stick to. You cannot move things around based on recent high performance. [bctt tweet="Should you Invest in the Magnificent Seven? I cover the ins and outs of how to make the decision in this episode of Best in Wealth! #investing #PersonalFinance #FinancialPlanning" username=""]

Resources Mentioned

Magnificent 7 Outperformance May Not Continue

Connect With Scott Wellens

Charlie Munger’s Life Lessons, Ep #236

Fri, 08 Dec 2023 05:00:00 -0500

Charlie Munger was the Vice Chairman of Berkshire Hathaway and Warren Buffet’s right-hand man. He quit a well-established law career to become Warren Buffet’s partner, transforming a textile company into the successful firm Berkshire Hathaway is today. Charlie passed away last week at the age of 99. He was a prolific author and investor and full of wisdom. Warren Buffet described Charlie as the originator of their investing approach. In this episode of Best in Wealth, I will share eight of his quotes, both simple and profound, that every investor can learn from. [bctt tweet="In this episode of Best in Wealth, I share eight of Charlie Munger’s best life lessons. Don’t miss his words of wisdom! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:04] Who have you learned from?
[2:24] Charlie Munger’s Life Lessons
[5:18] Lesson #1: Embrace life-long learning
[6:34] Lesson #2: Remain optimistic
[8:46] Lesson #3: Accept risk to get rewarded
[10:44] Lesson #4: Munger’s formula for success
[11:57] Lesson #5: Buy wonderful businesses at fair prices
[14:18] Lesson #6: Help others know more
[15:08] Lesson #7: Do not be driven by envy
[16:23] Lesson #8: Spend your life well

“Lifelong learning is paramount to long-term success.”

You should always be learning more. Anyone you know who is highly successful is committed to learning. You must be humble enough to admit that you do not know everything. Can one of your major goals for the new year be learning more? Reading more books? What doors will open for you when you focus on learning on growth? Another thing that Charlie said was “The best thing a human being can do is to help another human being know more.” If I am going to encounter somebody, I want to learn from them. Secondly, I want them to learn something—hopefully good—from me. Why not learn from each other? [bctt tweet="“Lifelong learning is paramount to long-term success.” We can learn a lot from the words of Charlie Munger. Check out this episode of Best in Wealth to hear more! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

“If I can be optimistic when I’m nearly dead, surely the rest of you can handle a little inflation.”

This was something Charlie said in the 2010 annual Berkshire Hathaway meeting. In 2010, inflation was running higher. He was around 86 at the time. What happened to us when inflation rose in 2023? We felt like the world was ending. How we should behave should always be the same. If he can be optimistic, we can handle a little inflation. There will always be something else to overcome, right? Charlie also said, “If you are not willing to react with equanimity to a market price decline of 50% two or three times a century, you are not fit to be a common shareholder and you deserve the mediocre result you are going to get.” If you cannot stay composed when a market declines 2–3 times a century, you cannot handle a high-risk stock portfolio. This happened during the Great Recession and in 2009. Return and risk are directly related. If you want more of a return, you have to accept more risk.

Charlie's most important architectural feat was designing Berkshire

“Forget what you know about buying fair businesses at wonderful prices. Instead, buy wonderful businesses at fair prices.” This means buying value companies. At Fortress, we like to use book value. Wonderful businesses can be expensive and trade at high multiples. Their book value and stock value are far apart. Those are considered growth companies. But if wonderful businesses have fallen on rough times—like airlines during the Covid pandemic—it is a wonderful business selling at a fair price. When you look at long-term averages, value companies do better than growth companies. Buying them at a fair price is key. [bctt tweet="Charlie Munger 's most important architectural feat was designing Berkshire Hathaway. Hear some words of wisdom from Warren Buffet’s right-hand man in this episode of Best in Wealth! #wealth #retirement #investing #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Charlie Munger

Connect With Scott Wellens

The Average Net Worth of US Households by Age, Ep #235

Fri, 24 Nov 2023 05:00:00 -0500

Over the last three years, US net worth has increased drastically. But it is taboo to talk about money with family and friends, let alone net worth. But don’t you want to know how you are doing relative to your peers? If so, this is the episode of Best in Wealth for you. In this episode, we break down the numbers to see how you are doing compared to the average American. [bctt tweet="What is the average net worth of US households with age factored in? Find out what the numbers are—and why it matters—in this episode of Best in Wealth! #wealth #PersonalFinance #WealthManagement" username=""]

Outline of This Episode

[2:23] Average net worth by age
[4:18] What is net worth?
[5:15] What is the average net worth of US households?
[6:57] What is the median net worth of US households?
[7:40] The average and median net worth by age bracket
[9:19] Are you on track with the median or average?
[13:50] Your goal depends on your goals

What is net worth?

Your net worth is your assets minus your liabilities. It is everything you own—your house, car, stocks, rental properties, retirement accounts, etc. minus anything you owe to others (credit card debt, student loan debt, mortgage, car loans, etc.). Net worth today includes adjustments for inflation.

What is the average net worth of US households?

The average net worth of US households in 2022—across all age groups—was $1,059,000, an increase of $200,000 from the average net worth in 2019. It seems high, right? The typical American is not walking around with a million-dollar net worth. So what is happening? The average net worth is skewed by the outliers. If nine people walked into a bar with an average net worth of $10,000 and Elon Musk walked in—whose net worth is north of $200 billion—the average net worth in the bar would skyrocket to over $20 billion. That is why you have to look at median net worth. Half of households will fall above or below that line. The median net worth of US households is $192,700. That is 1/5th of the average net worth—but still an increase of about $50,000 since 2019. But these figures do not adjust for age which is the most crucial variable we need to control for. [bctt tweet="What is the average net worth of US households? I share the interesting numbers (so you know where you stand) in this episode of Best in Wealth! #wealth #PersonalFinance #WealthManagement" username=""]

The average and median net worth by age bracket

Here is the average net worth by age:

Under 35: $183,000
35–44: $548,000
45–54: $971,000
55–64: $1.5 million
65–74: $1.8 million
75+: $1.6 million

But the average net worth is skewed by the richest of the rich. So what is the median?

Under 35: $39,000
35–44: $135,000
45–54: $247,000
55–64: $364,000
65–74: $410,000
75+: $335,000

Are you on track with the median or average?

If you are listening to this podcast, you likely earn over the average salary in the United States (which is $50,000). If you are making $100,000+, look at the median net worth to see how you compare. If you are looking to overachieve, look at the averages. If you are in the top 10% of incomes, we need a realistic number for you. If you are in the 90th percentile of income earners, and you are 45–54, you should aim for $1.9 million. If you are 55–64, you should shoot for $2.9 million. Are you on track? Listen to hear what the rest of the brackets should look like for high achievers. Because we all want to be ready for retirement, right? [bctt tweet="What is your net worth? Do you know where it should be at your current age? Listen to this episode of Best in Wealth to learn more! #wealth #PersonalFinance #WealthManagement" username=""]

Resources Mentioned

Changes in U.S. Family Finances from 2019 to 2022”

Connect With Scott Wellens

Is American Household Wealth Growing? Ep #234

Fri, 10 Nov 2023 05:00:00 -0500

American wealth is growing—but you would never know it. Every three years, the Federal Reserve releases a report that summarizes the changes to family finances in the United States. The most recent report was released in early October 2023. What did it say? One of my business partners, Brian Cayon CFA®, CPA, covers it in his article titled “4.9%.” We will cover the news in this episode of Best in Wealth. [bctt tweet="Is American Household Wealth Growing? I’ll go over what the Fed is saying in this episode of Best in Wealth! #wealth #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Outline of This Episode

[1:19] Positivity or negativity: which will you choose?
[3:42] Changes in U.S. Family Finances from 2019 to 2022
[7:55] Where was the largest increase in wealth?
[9:03] Theory #1: The media loves bad news
[12:29] Theory #2: The pandemic played head games with us

Changes in U.S. Family Finances from 2019 to 2022

The Fed’s report, “Changes in U.S. Family Finances from 2019 to 2022” showed that net worth for US households grew a stunning 37% from 2019 to 2022. That is a massive increase in wealth, especially because 2022 was one of the worst years for a diversified portfolio. Before you say “It’s all because of rising home prices,” renters experienced a bigger increase in net worth than homeowners! Home prices played a role but they were not the primary driver. The numbers are also adjusted for inflation. This is the biggest increase ever. So what do the numbers tell us?

From 1989–1992, household net worth grew by -5%
From 1992–1995 it grew by 9%
From 1995–1998, it grew by 17%
From 1998–2001 it grew by 11%
From 2001–2004, it grew by 1%
From 2004–2007, it grew by 18%
From 2007–2010, during the great recession, it shrunk by –39%
From 2010–2013, it shrunk by -1%
From 2013–2016, it grew by 16%
From 2016–2019, it grew by 18%
From 2019-2022, it grew 37%

What else is surprising? Where the largest increase in wealth was realized. The largest increase in wealth came from the under-35 cohort, who saw a 143% increase in net worth. The 55–64 bracket saw a 48% increase in net worth. Young people as a whole are in a much better place than a few years ago. [bctt tweet="What changes happened with U.S. Family Finances from 2019 to 2022? The answers might shock you. Check out this episode of Best in Wealth! #wealth #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Why does it feel like the world is falling apart?

When we turn on the news it feels like the world is caving in. It feels like the world is miserable. While there is a war, labor strikes, inflation, etc., the economy is doing well. So why are predictions so dire? Brian has two theories. Firstly, the media has always loved bad news. It has spent the last two years bashing us with recession predictions in the second half of 2023 or early 2024. When was the last time you saw an article about inflation falling? Or you saw that companies going on hiring sprees? The more frightened we are, the more likely we are to read a story or buy a magazine. The media wants their clicks so they can make more money. The media will not allow us to enjoy good news.

Rapidly rising prices and interest rates are shocking

The pandemic played head games with us. There was tons of cash on hand because people were not spending. Prices lowered while incomes rose. Now, in a short period, we are seeing rapidly rising prices and interest rates. It is a shock to our equilibrium that will take a while for investors to absorb (while recalibrating expectations for the economy and financial markets). This is why we are seeing market volatility. Just this morning, the Commerce Department reported that US GDP grew at a 4.9% annual pace in the 3rd quarter. That is great news. The growth—fueled by a strong consumer—marked the biggest gain in the US economy since the 4th quarter of 2021. This came despite high-interest rates, ongoing inflation pressures, and domestic and global headwinds. Does that sound like a recession to you? Things are not perfect. A recession is a possibility. High inflation is making things different for households. But we have made progress. [bctt tweet="Rapidly rising prices and interest rates are shocking—but do they reflect American household wealth? Find out in this episode of Best in Wealth! #wealth #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

5 Life Lessons Kids Need to Learn, Ep #233

Fri, 27 Oct 2023 05:00:00 -0500

I was reading an article that got me thinking. What do my kids need to learn? What have I already taught them that is important? What do I need to reinforce? I came up with a list of five things—that seem like they should be no-brainers—that more and more kids do not know. We need to teach our kids important life lessons as early as we can. What are my five? Learn more in this episode of Best in Wealth. [bctt tweet="In this episode of Best in Wealth, I share 5 life lessons our kids need to learn. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[2:55] Lesson #1: You have to work hard
[4:37] Lesson #2: Math is important
[6:54] Lesson #3: Life skills cannot be neglected
[8:17] Lesson #4: Focus on your health
[9:44] Lesson #5: Build relationships

Lesson #1: You have to work hard

We need to teach our kids the importance of work ethic. There are no freebies in life. The most accomplished people are the hardest workers. You have to work hard to get what you want. All of my daughters love Taylor Swift. She would never be at the top of the music industry without a lot of hard work and dedication. I believe that God built us to work. We feel our most accomplished when we work. And when we retire, we still need to work, it will just be different.

Lesson #2: Math is important

Bad math is what gets most adults in trouble. My middle daughter wants to go to college out-of-state. In my opinion, she needs a good quality in-state tuition education. If you borrow $100,000 for a degree that will earn you $30,000 a year, you do not understand basic numbers. When it comes to real-world math, it does not take much to learn. Spending $6 every day on a latte at your favorite coffee shop adds up. That is over $2,000 a year. That is a couple of car payments or money toward student loans. You could start a Roth IRA with that money. [bctt tweet="Math is important. Bad math is what gets most adults in trouble. So what do our kids need to learn? I share some thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Lesson #3: Life skills can’t be neglected

Kids cannot spend all of their time on social media or playing video games. They need to learn important life skills. They should be able to do their own laundry. They need to learn how to cook (so they do not have to go out to eat for every meal). They need to learn how to clean, mow the lawn, etc. The list can be long but these things are important.

Lesson #4: Health is more important than wealth

Obesity, diabetes, and heart failure are rising among kids. My local schools are moving beyond teaching the basics of sports. They are teaching kids high-intensity exercise that they can do for the rest of their lives. When you are young, you heal quickly. As you get older, an injury might take weeks to heal. Kids need to learn that preventative measures are important. They should see their doctor, dentist, etc. regularly to prevent future problems. Because you cannot enjoy life without your health.

Lesson #5: Build relationships

We need to teach our kids to build great relationships and be great friends. I still have a group of friends that I have known since 6th grade. They know me inside and out. We laugh hard and we fight hard. We are not afraid to face hard topics. I do not see enough friendships like this in our world. Relationships actually help us live longer, too. Surround yourself with people as you get older and you will live longer. Are any of these life lessons on your list? What would you add? Let me know! [bctt tweet="We need to teach our kids to build great relationships and be great friends. Why is it so important? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Connect With Scott Wellens

Will We See a 4th Quarter Rally? Ep #232

Fri, 13 Oct 2023 05:00:00 -0500

The S&P 500 was down 4% in September, continuing the downward trend we also saw in August. And almost ALL of the asset classes have been down the last couple of months. To address this troubling trend, my business partner, Brian Cayon, CFA®, CPA, wrote an article about the 4th quarter. So in this episode of Best in Wealth, we will talk about his research and seek to answer the question: Will we see a 4th quarter rally? [bctt tweet="Will we see a 4th quarter rally in 2023? I share some research in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:05] Thank you for being a listener!
[2:14] What is causing the stock market decline?
[6:21] What is the S&P 500 telling us?
[10:12] Research on the 4th quarter since 1952
[15:07] Will we have a 4th quarter rally?

What is causing the stock market decline?

The majority of the September decline in the S&P 500 came right after the Fed meeting when they announced that they would leave the interest rates unchanged after having raised them continuously. You would think that would be pretty good news, right? But after the meeting, the Fed implied that rates are likely to stay higher for longer. After that, there were huge selloffs in the market. If we look at the last couple of months, all of the headlines are threatening our 401Ks. There might be another government shutdown. There are also talks of a UAW strike. We are seeing rising oil prices. It is natural for us to feel some angst. It can be tempting to make changes to your retirement accounts instead of staying the course (according to your investment policy statement). But oftentimes when we try to make drastic changes, we sell the things that are rallying and buy the things that are about to pull back. It is difficult to stay calm. [bctt tweet="What’s contributing to the stock market decline that we’ve seen in August and September? I share some thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What is the S&P 500 telling us?

The S&P 500 was among the worst-performing asset classes in 2022 at -18.5%. It had a horrible run for 2.5 years, ending 12/31/2022. The S&P 500 went up over 15% this year. When this happens, it is not uncommon for asset classes to take a breather. And we can definitely call this a breather. But this does not happen very often. Brian looked at over 70 years in his research. We have only had a negative August and September 13 times since 1952. In 2022, August was -4.2%. September was -9.3%. Remember how we felt last year? How did we do historically in October? 77% of the time—10 out of the 13 years—October has been positive. In 2022, we were up 8% in October. In 2011, we were up 10.8%. In 1974, we were up 15.3% in October. There were three times when October was also negative (1952, 1957, and 1990). In two of those years, we were down less than 1%. In 1957 we were down 3.2%. This should give us all hope.

Research on the 4th quarter since 1952

If we average the whole 4th quarter, how many of them ended positively? 12 out of 13 times, the 4th quarter has ended positively. A few times it was over 10%! The S&P 500 averages 10% per year. But we had a year where we were down -43%. We had a year where the S&P 500 was up over 40%. The stock market rarely lands near that 10% average. What if we make an emotional response to our money and do not stick around for the returns? What if we remove our money and then end the year positively? If you are a good family steward, you are investing in every asset class. 93% of the time we see a positive 4th quarter after a bad August and September. Let that give you the strength you need to continue on your investing path. What else can give us hope? Listen to hear whether or not we think you’ll see a 4th quarter rally! [bctt tweet="What does research on the 4th quarter of the stock market—since 1952—tell us about the 4th quarter in 2023? I share more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

4th Quarter Rally? By Brian Cayon, CFA®, CPA

Connect With Scott Wellens

End-of-Year Financial Planning Issues to Consider, Ep #231

Fri, 29 Sep 2023 05:00:00 -0500

What financial issues do you need to think about before the end of the year? There are three big groups to consider: tax planning, cash flow, and insurance. In this episode of Best in Wealth, I have broken down 15 points across each of these groups. They are all important to consider to maximize your finances both in retirement and while preparing for retirement. [bctt tweet="In this episode of Best in Wealth, I dive into some important end-of-year financial planning issues to consider. Do not miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode

[1:11] How I prepare my grass before winter
[4:51] Topic #1: Tax planning issues
[17:00] Topic #2: Cash flow planning issues
[19:33] Topic #3: Insurance planning issues

Topic #1: Tax planning issues

Do you have unrealized investment losses or gains in your taxable account? Now is the time to do some tax-loss harvesting. Realizing losses can help you offset gains. You can deduct $3,000 on this year's taxes if you have losses. If you have more than $3,000, you can carry them forward. Are you subject to taking any RMDs (required minimum distributions) including inherited IRAs? You can aggregate your IRAs together and take an RMD out of one account. If your RMD is amongst multiple 401K plans, you must take an RMD from each of them. If you do not do this by the end of the year, you will be subject to a huge penalty. Do you expect your income to increase in the future? If so, consider making Roth IRA or 401k contributions and doing Roth conversions while you are in a lower tax bracket. If you expect your income to decrease in the future, now is the year to defer contributions as much as you can. If you are on the threshold of the next tax bracket, how can you defer some of that income to stay in the lower tax bracket? There are numerous tax brackets to be mindful of (listen to learn more about them). Are you charitably inclined? If so, think about taking qualified charitable distributions. Once you turn 70 ½, you are allowed to give directly from your IRA to a charity. If you are able to do that, you are not having to pay taxes on the money to give to charity. It also lowers your required minimum distributions in the future. Will you be receiving any significant windfalls that could impact your tax liability (inheritance, stock options, bonus, etc.)? We want to look at your withholdings and make sure you do not get stuck with a huge tax bill. Do you own a business? If you own a pass-through business, consider the Qualified Business Income (QBI) deduction eligibility rules. Some businesses allow you to take advantage of a 20% tax break. Have there been any changes to your marital status? Did you lose a spouse? How will it impact your tax liability? You can still file as married filing jointly, so there are some things to consider while you are still able to do so. [bctt tweet="In this episode of Best in Wealth, I cover some tax planning issues you need to consider before the end of the year. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Topic #2: Cash flow planning issues

Are you able to save more? If you are, consider contributing $3,850 (single) or $7,750 (family) to your HSA. If you are older than 55, you can contribute an additional $1,000. HSA's are amazing. If you have an employer-sponsored retirement plan, like a 401k, you may be able to save more. Consult your provider to follow their rules. In 2023, the maximum salary deferral contribution to an employer plan is $22,500 or $30,000 if you are over 55. Do you contribute to a 529 account? If so, you can contribute up to $17,000 per beneficiary into a 529 (gift-tax-free). You can make a lump-sum contribution of up to $85,000 gift-tax-free to a beneficiary’s 529 account and elect to treat it as if you were making these contributions evenly over a five years (gift-tax free).

Topic #3: Insurance planning issues

There are two big things to think about before the end of the year, other than possibly switching insurance:

Will you have a balance in your flexible spending account (FSA) at the end of the year? If so, some companies allow up to $610 of unused FSA funds to be rolled over to the following year. But FSAs are typically “Use it or lose it.” Some companies also offer a grace period until March 15th of the next year. Check deadlines for all unused funds.
Did you meet your health insurance plan’s annual deductible? After your deductible, you move into coinsurance (where you cover a certain percentage of your healthcare expenses). If you meet the annual cap, every time you go to the doctor, your health insurance pays for everything. Now's the time to take care of everything you’ve been putting off.

Let’s take care of the things you can control and plan now so you don’t get surprised later! If you have any questions, don’t hesitate to reach out. [bctt tweet="What insurance planning issues should you think about before 2023 is over? I share a couple things you need to know in episode #231 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

The 9 Traits of a Happy Retirement, Ep #230

Fri, 15 Sep 2023 05:00:00 -0500

What makes for a happy retirement? According to Merrill Lynch, “Only 51% of 25–34 year old's say that they often feel happy compared to 76% of people ages 65–74.” So what makes them happy? An article entitled “Why 72% of Retirees Are Happy” talks about three financial traits and six non-financial traits of happy retirees. What are these 9 traits? Find out what they are—and if you are implementing them—in this episode of Best in Wealth. [bctt tweet="What are the 9 traits of a happy retirement? I’ll fill you in on the secret in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:05] What things make you happy?
[5:19] 3 financial traits that make for a happy retirement
[8:44] 6 non-financial traits of happy retirees
[17:07] Why planning your retirement is important

3 financial traits that make for a happy retirement

Fritz from The Retirement Manifesto grabbed his information from a book called “What the Happiest Retirees Know: 10 Habits for a Healthy, Secure, and Joyful Life.” What are the three traits?

Having at least $500,000 in liquid assets: The book must be a bit older because most people want at least $1 million of liquid assets. Most should strive for $2 million or more, depending on your retirement plan. Fill in the blank: What should your number be?
Having your mortgage paid off: I work with countless retirees. This definitely makes for a happier retiree. It is a large burden lifted off your shoulders. But, if you refinanced at a low rate, it might not be in your best interest to pay off your mortgage immediately. Why? You could receive a higher interest rate by putting that money in a money market or high-yield savings account.
Having multiple streams of income: If you have liquid assets, it counts as an income stream. Social security is another source. Perhaps you have a pension. What about annuities or rental income? Multiple income streams are imperative.

What do you think of this list? [bctt tweet="There are 3 financial traits that will make for a happy retirement. What are they? Listen to episode #230 of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

6 non-financial traits of happy retirees

What non-financial traits will make you happier in retirement?

Curiosity: Those who have a variety of hobbies and interests tend to be happier. It keeps you busy. Curiosity leads you to try new things.
Purpose: According to “What the Happiest Retirees Know,” 97% of retirees with a strong sense of purpose were generally happy compared with 76% without that same sense. You have to figure out what your purpose in retirement is. What is near and dear to you?
Social connections: Humans need relationships. Retirees who are not married are 4.5x more likely to be unhappy. If you are single, you need to build relationships—and many of them. Put yourself out there and try new things to meet people. The number of friends a retiree has is more correlated with happiness than the amount of money they have.
Retiring at your planned time: Boston College found that those who retired voluntarily expressed much higher levels of well-being than those who were forced to retire. They may not have completed financial or psychological preparations for retirement, leading to lower well-being. I see this happen often. Health can get in the way. Downsizing can force an early retirement. That is why we need to get you financially free as quickly as possible.
Personal health: A large contributor to happiness is your health. Retirees who take care of themselves and maintain a healthy lifestyle are generally happier than those who do not. There are many low-cost forms of exercise such as walking, swimming, biking, and hiking. Do not wait until you retire to get healthy. If you do not build good habits now, you will not during retirement either.
Planning for a happy retirement: You need to plan every phase of your retirement. Those who are regretful spent the least amount of time planning their retirement. Maybe they did not have enough money to retire.

If you are stressed about planning your retirement, go to FortressPlanningGroup.com and schedule a meeting with me today. [bctt tweet="What are the 6 non-financial traits of happy retirees? I’ll fill you in when you listen to episode #230 of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

3 Important Observations on Wealth and Health, Ep #229

Fri, 01 Sep 2023 05:00:00 -0500

I recently read an article by David Booth—the executive chairman of Dimensional Fund Advisors—titled “Practicing Healthy Habits, Pursuing Wealthy Outcomes.” In the article, David shares some correlations he saw between health and investing after reading “Outlive: The Science and Art of Longevity” by Peter Attia. The book dissects scientific research on aging to explore strategies to live longer and healthier. David saw some parallels between how we talk about health and think about investing. In this episode of Best in Wealth, I will share how you can invest in your wealth—and your health—by taking these three observations to heart. [bctt tweet="I share three important observations on the parallels between #wealth and #health in this episode of Best in Wealth! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:03] How are you doing with your healthy habits?
[2:55] The Science and Art of Longevity
[6:52] Observation #1: There is no one-size-fits-all solution
[9:33] Observation #2: There are no quick fixes
[14:31] Observation #3: Prevent problems vs. fix them

Observation #1: There is no one-size-fits-all solution to health and wealth

There is no one-size-fits-all solution for health. Everyone's body is different. Some people need to lose weight, others need to gain it. Some people need to focus on building muscle and others need to focus on cardiovascular health. The list goes on. There is also no one-size-fits-all solution for investing. Every investor has different goals and risk tolerances. Some people want a cabin up north. Some people want a condo. Some people would rather have a boat or luxury car. Some people want none of those things. Secondly, everyone has a different risk tolerance. The best investment plan is one that you can stick with through hard times. [bctt tweet="There is no one-size-fits-all solution to #health and #wealth. Why? Learn more in this episode of Best in Wealth! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Observation #2: There are no quick fixes

There is no special pill for health or wealth. Exercise programs and diets will not get you results in days and weeks. Most of us will never have a six-pack. If you have a bad heart, you cannot stop eating something today and reverse everything immediately. And when it comes to being wealthy, there are definitely no quick fixes. Why? The stock market has an average return of 10% per year. That means that your money can double every seven years. However, we rarely hit 10% in any given year. Out of the last 100 years, the stock market has only been up between 8–12% six times. It is usually much higher or lower. To take advantage of the miracle of compounding, it takes time. David Booth points out that “Good investing, like good health, requires long-term discipline and commitment.”

Observation #3: Prevent problems vs. fix them

It is better to exercise regularly and eat well to prevent illness than find yourself in a position of having to fix something. Start being healthy now versus being told you have high cholesterol and a weak heart. Do not wait for the bad things to happen. You can proactively approach investing. You can build a smart portfolio and develop a plan that accounts for a wide range of outcomes. You can make peace with uncertainty. Do not wait to start planning for retirement. You can save more, plan better, get the right insurance in place, and much more if you start early and prevent not being able to retire on time. Start with an investment policy statement. It allows you to stay disciplined and committed. What is the next step? Learn more in this episode of Best in Wealth. [bctt tweet="As a family steward, you need to prevent problems vs. fix them. How do you do that when it comes to #wealth? Find out in this episode of Best in Wealth! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Practicing Healthy Habits, Pursuing Wealthy Outcomes by David Booth
Withstanding the Roller-Coaster of Investing, Ep #215
The Pros and Cons of Owning a Second Home, Ep #227
Outlive: The Science and Art of Longevity by Peter Attia.

Connect With Scott Wellens

Will Social Security Run Out by 2033? Ep #228

Fri, 18 Aug 2023 05:00:00 -0500

Is social security going to run out in 2033? If I am a high-income earner, will social security reduce my benefit? For those of us who have planned for social security, as we are getting closer and closer to retirement, do we have cause to be anxious? In this episode of Best in Wealth I will answer both questions (but do not be afraid). [bctt tweet="Is social security going to run out in 2033? Listen to episode #228 of Best in Wealth and I’ll break it down for you! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:11] What will happen when you become empty nesters?
[5:20] Will social security run out in 2033?
[9:13] Will the age of retirement shift again?
[11:11] How social security payments are calculated
[20:31] Will they take my social security benefits away?

Will social security run out in 2033?

The quick answer is no. If you are working right now, you are paying 6.2% of every dollar you earn (up to the cap) to social security. Your employer has to pay another 6.2%, for a grand total of 12.4%. All of that money is used towards paying those collecting social security. When we have more money coming in, we add to the Old-Age and Survivors Insurance Trust Fund (OASI) (the social security trust fund). What is the problem? More people are collecting social security than there is money coming in. The trust fund will hit zero by 2033—but only if we do not do anything about it. If nothing happens, it does not mean that social security is done. Every person still working is still paying 12.4%. There is still enough money coming in to pay for 75–77% of all the benefits of people retiring for another 75 years. That is some relief, right?

Will the age of “full retirement” shift again?

Did you know we also ran into this problem in 1983? The social security trust fund was about to hit zero. What happened? Over the course of 23 years, they raised the full retirement age from 65 to 67. Because the government did this, they predicted that social security would not go bankrupt for 50 years. They will be right (give or take 6 months). What does that mean for us? If we raise the full social security age from 67 to 69, we could easily add another 40–50 years to the social security trust fund. Because life expectancy is far higher now, it makes sense. They would do this gradually over a 20-year period. But they will not do anything until they have to. [bctt tweet="Will the age of “full retirement” shift again? Yes, you heard that right: again. I share my educated opinion in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How social security payments are calculated

If you are a high-income earner, will the government take away some—or all—of your social security? To answer this question, we need to address how your social security payment is calculated. Make no mistake: It is a complex formula. The government takes the average of your highest 35 working years to come up with the Average Indexed Monthly Earnings (AIME). However, every year is indexed up for inflation. What does that mean? The first year I worked and paid into social security was 1989. I made $1,992. However, that number is indexed up to almost $6,000. In 1996, I made $19,800, which is indexed up to $39,500. In 2000, I made $45,692 which is equivalent to $87,000 in today's dollars. The second thing that you need to know is that social security is taxed up to a cap. In 2023, if you make over $160,200, everything above that is not taxed at 6.2%. Once you have reached 35 working years, you divide the total amount by 420 and come up with your AIME. Once we have that number, we know what you will receive if you collect at full retirement age. But wait—there is a bit more. We have to take into account what is called the “bend point.” Let’s say you make $10,000 per month. The first $996 of your $10,000 you get a replacement rate of 90%. So you will get $869 in social security for that first “bend point.” The second bend point hits at $6,002, so your next $5,006 is a replacement of 32%, or $1,601. On the last $5,898 (but the $4,028 you have remaining) the replacement rate is reduced to 15%. So on the last $4,028, you get $600. Your monthly social security payment—if you made $10,000 a month—is $3,074 a month. Whew. So to answer the question, “Will they take my social security benefits away?” They already are. NOTE: The bend point is based on calculations from 2021. [bctt tweet="How are social security payments calculated? I break down the complicated formula in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

The Pros and Cons of Owning a Second Home, Ep #227

Fri, 04 Aug 2023 05:00:00 -0500

Have you thought about purchasing a second home? Does it sound nice to have a place to vacation that is all yours? Do you dream of owning a Florida home or a cabin “up north?” Have you considered the pros and cons of owning a second home? Before a second home becomes part of your dream retirement, consider some of these pros and cons so you can make the best decision for you. [bctt tweet="What are the pros and cons of owning a second home? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #InvestmentProperty" username=""]

Outline of This Episode

[1:10] Needs, wants, and wishes in retirement planning
[2:52] Have you thought about owning a second home?
[6:00] The hidden costs associated with owning a second home
[7:29] Tax, lending, and insurance considerations
[10:40] Would you consider renting out your second home?
[13:55] Will you lower vacation expenses?
[16:25] Will your second property steal your time?

The hidden costs associated with owning a second home

Think about the costs associated with owning your primary residence. You will have to factor in all of these same costs when you purchase a second home:

Appliances
Furniture
Cookware
Linens
Utilities (internet, cable, electric, water)
Down payment
Second mortgage
Property taxes
Insurance
HOA fees
Home repairs and improvements
Maintaining the yard

Even after factoring in all of the expected expenses, you have to consider unexpected expenses. What if your furnace goes out and you have to replace it? What if a storm damages your roof and you have to get it fixed? The hidden costs of owning a second home might make you seriously reconsider the idea.

Tax, lending, and insurance considerations

The maximum amount you can write off for state, local, and property taxes is $10,000 per year. It doesn’t matter if you have a second home. If you have a mortgage on the property, the combined mortgage interest that you can deduct from your taxes has been reduced to $750,000. Usually, you get better financing rates with your primary residence. Your second home might not get the best mortgage rate. Secondly, most lenders require at least 20% down to purchase a second home or investment property. Some insurers are completely pulling out of certain markets (such as Florida and California), so you will pay more for things like flood insurance. You need to think through these costs because these things add up. [bctt tweet="What tax, lending, and insurance considerations should you think through before purchasing a second home? I share some insight in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #RetirementPlanning #WealthManagement #InvestmentProperty" username=""]

Can you reduce the costs of your second home?

Why not rent out your second home part of the time? That might be a way to recoup some of the costs (But keep in mind that many towns have limitations on short-term or vacation rentals). How much can you make renting out the second home? If you only rent out the second home for 14 days, you will not have to pay Federal taxes on that gain. If you want to rent out for more than 14 days, at $10,000 a week, your costs will still add up. It might cost you $2,000 a week to maintain the residence (mortgage, insurance, cleaning, etc.). You will also have to pay Federal taxes. You will also be adding more to your adjusted gross income. That could push you into the IRMAA surcharge. You might have to pay more for healthcare. You might not be able to write off other things in a higher income bracket.

Will owning a second home equal fewer vacations?

Owning a second home might mean less travel to other destinations. Because you want to get the most use out of your second home, you might forgo other vacations you would normally have taken. But you might save money by vacationing at your second home. You will cut out hotel rooms, extra flights, etc. But do you want to cut down your travel to other destinations? Will your second house become a burden? Will your second property steal your time? Listen to the whole episode for more pros and cons to consider when owning a second home! [bctt tweet="Will owning a second home mean fewer vacations? Before you make a big purchase, listen to this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #RetirementPlanning #WealthManagement #InvestmentProperty" username=""]

Resources Mentioned

The True Cost Of Owning A Second Home

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the US Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Dissecting the Illusion of Moral Decline, Ep #226

Fri, 21 Jul 2023 05:00:00 -0500

I have client after client tell me that the world is going to hell in a handbasket. Leaders gain power by vowing a return to the “Good ‘ol days.” But is your mind playing tricks on you? According to research by Adam Mastroianni and Daniel Gilbert, your brain has tricked you into thinking everything is worse. There is a set of cognitive biases in our brains that cause us to perceive a fall from grace—even when it has not happened. These well-established psychological phenomena have us focusing on the negative. So before you empty your portfolio and bury your money in your backyard, listen to this episode of Best in Wealth. Because there is reason to remain hopeful. [bctt tweet="Is more decline an illusion—or reality? Hear my thoughts—and why it matters to investing—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:06] How good things used to be
[2:09] Is your mind playing tricks on you?
[5:53] The types of questions asked in the survey
[7:29] Biased exposure and biased memory
[13:30] People exempt their own social circles from decline
[15:40] How to remain positive despite our biases

Is your mind playing tricks on you?

Until now, researchers had only theorized why people believe that things have gotten worse. But Adam and Daniel were the first to investigate, test, and explain where that mindset comes from. They have collected thousands of surveys from all races, religions, economic backgrounds, etc. They have found that people believe that everything is worse now compared to 20, 30, 40, or 50 years ago. But people are wrong about the decline of morality. They have been collecting this research for 25 years. When they asked people the current state of morality, people gave almost identical answers over the last 25 years. Every year, people reported a decline in morality. But why does everyone always think things are worse? Is it because they are actually worse? Now I am not saying that things are not bad. We are facing a war between Ukraine and Russia. People in the US are divided on every front, politically or otherwise. We are dealing with high inflation. But is it noticeably different than 20, 30, 40, or 50 years ago? These two researchers compiled the evidence. What do they think? [bctt tweet="Is your mind playing tricks on you? Has the world actually gotten worse? Find out what the research says about moral decline in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Biased exposure and biased memory

It is all an illusion created by our brains because of biased exposure and biased memories. Biased exposure happens when people encounter and pay attention to negative information because it dominates the news cycle. All we see are bad things. Negativity is perpetuated in our culture. Secondly, humans have biased memories. The negativity of negative information fades faster than the positivity of positive information. When you get dumped, it hurts in the moment. But as you rationalize, reframe, and distance yourself from the memory, the sting fades. But the memory of meeting my wife for the first time? I can still see her walking into the bar. I will never forget that. I still feel giddy inside. When you remember your childhood, you likely remember the holidays, the birthdays, summertime, etc. Your world was great. But do you remember getting dumped? Do you remember getting in trouble? When you put these two cognitive mechanisms together, you create the illusion that things are worse off now than they were. In the article, Adam says, “When you’re standing in a wasteland—but remember a wonderland—the only reasonable conclusion is that things have gotten worse.”

The illusion of moral decline is just that—an illusion

The world is different. We cannot argue that. Bad things are happening. But can we really say things are so much worse? Or is it biased exposure and biased memory at play? As long as we believe in this illusion that things are worse today, we are susceptible to the promises of the aspiring new Presidents who claim they can return us to a golden age. But that golden age only ever existed in our imaginations. But before you bury you empty your portfolio and bury your money in your backyard, listen to this episode. Because there is reason to remain hopeful. [bctt tweet="In this episode of Best in Wealth, I share why the illusion of moral decline is just that—an illusion. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How to Choose a Financial Power of Attorney, Ep #225

Fri, 07 Jul 2023 05:00:00 -0500

What is a financial power of attorney? The financial power of attorney is a legal document where you specify individuals to act on your behalf in financial matters if/when you become incapacitated. If you become incapacitated, someone still has to pay your bills. Who is going to do it? Life must go on. If you do not have a financial power of attorney, who makes the decisions? The court. So many people do not have any estate planning documents because they think they are too young. They think they are too busy to get it done. They are worried that it is too expensive. So they do nothing. But that is the wrong decision. In this episode of Best in Wealth, I am going to walk you through answering four questions:

Who will be your financial power of attorney?
What financial powers do they have?
When are you granting these powers?
Why did you choose this person?

If you do not have a designated financial power of attorney, let this episode be the first step you take toward making this important decision. Disclaimer: I am not an attorney and this is not legal advice. [bctt tweet="What is a financial power of attorney? Why do you need one? Get the important details in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[4:54] What is the financial power of attorney?
[7:41] Question #1: Who will be your financial power of attorney?
[9:18] Question #2: What financial powers do they have?
[11:31] Question #3: When are you granting these powers?
[13:24] Question #4: Why did you choose this person?

Who will be your financial power of attorney?

For most people, it is your spouse. But what if you are not married? Who can you trust? Perhaps a sibling, friend, or other relative? You need to put a lot of thought into this decision. These are the people who will handle your finances—you better trust them. If you have already designated a financial power of attorney, review the document to remind yourself who it is.

What financial powers do they have?

Are you giving this person financial powers for everything or just some things? Can you trust them to make trades in your retirement account(s)? Can you trust them to write checks? What about changing beneficiaries on your IRA or revocable trust? Will they collect rent on your behalf? Can they sell your car? When you see an attorney, they will give you a list of what is standard AND a list of what is not. Maybe you will only give this individual financial power of attorney for the standard list. If you already have a designated financial power of attorney, review what powers you have granted to them. [bctt tweet="Do you have a designated Financial Power of Attorney? What financial powers do they have? Find out why it matters in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

When are you granting these powers?

Generally, you grant financial power of attorney to someone in two situations. The first is when you become incapacitated. But the power of attorney has to prove to the courts that you are incapacitated. So what is your definition of incapacitated? Is it spelled out in your document? Being incapacitated can be a gray area. Some people grant financial power of attorney immediately so their financial power of attorney does not have to prove incapacitation. But you have to trust that person with your life.

Question #4: Why did you choose this person?

If your spouse is no longer around, how do you choose who will handle your financial matters? You might list both of your siblings so you do not hurt someone’s feelings. But what if both people have to sign something every single time something needs to happen? What if both signatures need to be on every rent check? That sounds pretty inefficient, right? But it is also okay to designate multiple people. Someone can handle day-to-day expenses and someone else can handle your investment decisions. You cannot worry about whether or not someone’s feelings are hurt. You need to choose experts in each area whenever possible. Why did you choose them? [bctt tweet="Do you have a designated Financial Power of Attorney? Why did you choose this person? The person you choose matters a lot. Why? Learn more in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The Importance of Staying Disciplined in Asset Classes, Ep #224

Fri, 23 Jun 2023 05:00:00 -0500

Over the years doing this podcast, I have clearly stated that you cannot time the market and you should never try. But what about asset classes? Can you predict when one asset class will do better than another? Should you try? In this episode of Best in Wealth, I look at how value stocks and growth stocks have performed in the last few years. I will nail down why staying disciplined in asset classes is just as important as not timing the market. Check it out! [bctt tweet="Why is it important to stay disciplined with your investments in different asset classes? I share some thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:15] The importance of values and discipline
[5:54] What are growth and value stocks?
[8:27] The good news for growth stocks
[10:50] Why you have to stay disciplined
[12:39] What can you do to stay disciplined?

What are growth and value stocks?

According to Fama-French, companies that trade similar to what they would be worth if they liquidated are trading close to their “book value.” That is a value stock. Their prices are low compared to their intrinsic value. Companies that trade far from their book-to-market value are growth stocks. Growth stocks are undervalued and have the potential to grow significantly. Growth stocks typically consist of the companies we know and buy from every single day. They take their profits and reinvest them to continue to grow. A value stock might be a great company but things are happening outside their control and lowering the stock price. Airlines were considered value stocks during the pandemic when no one was flying. [bctt tweet="What are growth and value stocks? I cover some of the basics in this episode of Best in Wealth. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The recent history of growth and value stocks

Value stocks have been doing really well during the last two years (ending 12/31/22). Before that, growth stocks were doing well. Between July 2017 and June 2020, growth stocks averaged 17.6% per year while value averaged –3.1% per year. Growth beat value by 20.7% per year for three years. You likely have a growth fund and a value fund in your 401k. If you were looking at short-term returns, you might have gone “I’m getting rid of this value fund” and decided to buy more growth stocks. You would rationalize the decision because you had heard that you cannot time the stock market. But timing asset classes like value and growth is a loser's game, too. What if you could not take it anymore? Let’s say you did not get out of the market but you did decide to sell the value stocks and bought more growth. Why wouldn't you? Here is why you should not have: Because over the next two-and-half years, from July 2020 to December 2022, value averaged 28.7% per year. Growth averaged 6.6%. That is a difference of 22%. That is exactly why we cannot time asset classes. And it is why you have to stay disciplined.

What can you do to stay disciplined?

So far in 2023, growth is beating value. No one can time when growth or value will do better. No one can time when small will do better than large. No one can time when international is going to do better than the US. We need to stay disciplined in all of our asset classes. Staying disciplined starts by creating an investment policy statement. If you do not have one, you need one. It is the only way to stay objective about your money. Find a fee-only certified financial planner that can help you. You will not regret the decision. Secondly, you need to figure out what your risk level is. What can your stomach handle? Get concentrated in each type of asset class and stay disciplined in your lane. Then, strategically rebalance when growth and value stocks aren’t performing. Doing that can add half a percent per year to your portfolio. To get the full picture, make sure you listen to the whole episode! [bctt tweet="What can you do to stay disciplined in the asset classes in your portfolio? I share some key steps in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

The Value of Discipline in Value Investing

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Are You Rich? Ep #223

Fri, 09 Jun 2023 05:00:00 -0500

In 1991, I traveled to Alaska with three friends to get rich. Why? We had learned that we could make $5,000–$7,000 a month working in Alaska over the Summer. I thought I would leave Alaska having made $25,000. I was going to be rich. I was going to get a new mountain bike, leather jackets, and 100 new CDs. My list went on. What happened? We only worked for a month and a half. I did not get rich that summer. But how do you know if you’re rich or not? What does it mean to be rich? What is your definition of rich? In this episode of Best in Wealth, I will cover the definition(s) of rich, what rich is in terms of income, and what the three levels of wealth are according to Stewart Butterfield. Check it out! [bctt tweet="Are You Rich? What does it mean to be rich? I share how you can determine if you’re rich in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:07] I always wanted to be rich
[4:32] Does your income make you rich?
[7:07] What is the definition of rich?
[9:26] The three levels of wealth
[13:09] Are you rich?

Does your income make you rich?

Where do you stand compared to the broader population? The average income in the United States is $50,000 but the median income is $70,000. For married couples, the median is $106,000. If your income is $106,000 you are smack in the middle. If you want to be in the top 10% of richest households, you need to make $212,000 annually. Do you make that much? To be in the top 1%, you need to make $570,000 a year. Would you consider yourself rich? What if you made $300,000 but you have nothing in savings? What if your expenses equal your income? You might not be nearly as rich as someone who makes $100,000 but already has $1 million in retirement accounts. When we dig deeper, I think it is the second person who is rich. [bctt tweet="Does your income make you rich? Maybe…but maybe not. Find out what actually makes you rich in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The definition of rich

According to Google, the definition of “rich” is having abundant possessions and material wealth. It can also mean something of high value or quality. But is being rich all about the money, the income, or the nest egg? I do not think so. What if you have all the money in the world but you are in poor health, and your health prevents you from living the life you want? Are you rich? I would not call that rich. What if you do not have good relationships with loved ones? You have money, but you are miserable. Are you rich? Probably not. We need to think at a higher level. We need abundance in the cornerstones of wealth: Our careers, family, friends, spirituality, and health (mental and physical). If you are only making $100,000 and wish you were making more but your buckets are filled, I would argue that you are far richer than someone who just won the lottery but does not have good health or relationships.

The three levels of wealth

Stewart Butterfield, the founder of Slack, turned into a billionaire quickly. He believes there are three levels of wealth that you need to reach.

Level One: You no longer have to stress out about debt. Maybe you paid off your credit cards, student loans, etc.
Level Two: This is achieved when you no longer care how much a meal at a restaurant costs. You order whatever you want.
Level Three: This is reached when an individual doesn't care how much a vacation costs. They do not care about the cost of their hotel, flying first class, or where they go.

Stewart points out that these three levels are subjective. But are you in any of these stages? Do you spend like you are on a different level? While there is no single definition of what it means to be rich, the three levels show us how building wealth can provide peace of mind in different ways. Maybe it is the flexibility of being debt free. Maybe it is going on a dream vacation without worrying about the cost. What matters the most to you? What if you came up with your own definition? What are your “three levels?” Work with a financial planner to come up with a plan that makes sense to you. [bctt tweet="In this episode of Best in Wealth, I cover the three levels of wealth and dive into what really makes someone rich. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The Concept of Work Ethic vs. Life Ethic, Ep #222

Fri, 26 May 2023 05:00:00 -0500

I read an article titled, “The Sinister Side of Work Ethic,” and it got me thinking. I love work ethic. I believe God made us to work. But what is work ethic? Work ethic is defined as “The principle that hard work is intrinsically virtuous or worthy of reward.” Is that the way you see work ethic? What is your definition of work ethic? How does the concept of “life ethic” fit into the mix? Learn more about how to balance life and work ethic in this episode of Best in Wealth. [bctt tweet="What is life ethic? Is it the opposite of work ethic? Learn how it pertains to YOU in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:04] My dad’s work ethic was unrivaled
[2:02] What is your definition of a good work ethic?
[6:12] When there is a cost to work ethic
[8:29] How is your life ethic?
[10:42] How much life ethic do you need?
[12:16] Is it time to pay more attention to life ethic?

What is your definition of good work ethic?

Is it the person who works the most hours? Is it the person who is first to get to the office and last to leave? My old boss required us to be in the office from 8:30–5:30. I would leave at 5:32 and my boss would often say, “Are you taking a half day today?” Is working 80 hours a week a good work ethic? What is your definition of good work ethic? I think it is hard, constructive, work. We all learned from our family of origin. We carry some of that with us. When I drove to Alaska to work the salmon run, my friends and I were tasked to shovel mountains of ice into huge 4x4x4 totes. We got it done in record time. Because of that, we were known as the people that had the best work ethic. I believe we need work ethic. But is there such a thing as too much work ethic?

When there is a cost to work ethic

Do you believe that if you work harder and longer it will get you what you want? Will it get you a promotion or a raise? You are working 80 hours a week to get the next promotion to make more money, but what are you leaving behind in the process? Those with a strong work ethic can vilify leisure. We feel like we need to be productive. When is it enough? There can be a cost to work ethic:

The burnout of constantly and relentlessly pushing yourself to do more and never being satisfied. Burnout is not good for your family.
The toll on your physical health (high blood pressure, high cholesterol, no time for sleep or exercise, stress, binge drinking, etc.)

Is your work ethic taking over your life? [bctt tweet="Is there a cost to work ethic? I share why the answer is a resounding yes in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How is your life ethic?

Life ethic is focusing on leisure, slowing down, not always chasing the next title or raise, and enjoying life. A lot of Europeans have mastered life ethic. It takes the deferred life plan—i.e. working hard now to retire and travel later—and flips it on its head.

Instead of eating on the go, enjoy a leisurely meal with loved ones.
Instead of staying in the office for 80 hours a week, we are going to have deep emotional conversations with people we love.
It might even look like prioritizing your health and taking a nap.

Work ethic is about getting things done. There is nothing wrong with that. But life ethic is about being.

How much life ethic do you need?

Work ethic has made America the richest country in the world. But the culture of work ethic has made Americans worse off than many countries. We lag behind the world in paid vacation and parental leave. We have more people working beyond 65. We force people to prioritize work over family and friends. Some people need to work 50 hours a week to pay the bills and stay out of debt. I have been there. But once you move out of that, can you make a conscious effort to introduce life ethic into your every day? It might look like taking more time to travel. Maybe it is committing more time to meals with your family. Or maybe even take a nap when you feel tired. Is it time to pay more attention to life ethic? How does life ethic coexist with your retirement plans? It is time to look deep inside and make sure you can balance work ethic and life ethic to be the best family steward you can be. [bctt tweet="What is life ethic? How much life ethic do you need? I share my thoughts in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

The Sinister Side of Work Ethic

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Why A Recession Shouldn’t Be Scary, Ep #221

Fri, 12 May 2023 05:00:00 -0500

Many people greatly fear the thought of a recession. They cannot handle the idea that their investment portfolio will decline in value. They cannot handle the volatility. Fear leads people to make poor decisions. But I do not believe you should be afraid of a recession. Why? I share why you have reason to remain hopeful in this episode of Best in Wealth! [bctt tweet="I share why a recession shouldn’t scare you in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] One positive thing you can do today
[4:04] Are we in a recession yet?
[7:00] Why I do not fear a recession
[10:15] How to face recessions head-on

Are we in a recession yet?

In his recent article, “Are We In a Recession Yet?” Benjamin Curry discusses whether or not we are heading for a recession. He goes on to define a recession as, “Two consecutive quarters of negative gross domestic product (GDP).” This happened in the first half of 2022. Yet the organization that defines US Business Cycles (National Bureau of Economic Research) does not believe we were in a recession. They do not believe that we are now. When we think about a recession we immediately worry that the value of our portfolios will decline. We think about the Great Recession of 2008. In 2008, the S&P 500 was down almost 38%. It dropped 53% from its peak before the recession ended. That is why everyone is scared when talk of a recession abounds. But I do not fear a recession. Why? [bctt tweet="Are we in a recession yet? Find out why the answer is NO in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Why I do not fear a recession

When there is a recession, we get to buy everything on sale. If you could pinpoint the dollars that have multiplied that you invested in 2008–09, it is unbelievable. When the market is doing well, we cannot buy as many shares. I plan on investing for a long, long time. Why else do I not fear a recession? Because I expect one to happen an average of every six years. If you are an investor, you have to embrace a long-term mindset. We expect recessions—it is part of the deal. If you are retired, you still need a long-term outlook. We still follow the same philosophies. You have to expect a recession. Your portfolio will go down. But with the right advisor, the right withdrawal sourcing in place, and the right diversification, you do not have to be afraid. Even when we are not in a recession, we can expect the S&P 500 to have “down” years every four years.

How to face recessions head-on

I believe that if we look at what happened in the past, we will be less fearful about the future. We have reliable stock market data dating back to 1926. It sits at the University of Chicago at The Center for Research In Security Prices. Since 1926, we’ve had 16 recessions. Let’s say—in 1926—your parents put $100 in a diversified investment account. There was a mild recession immediately after. We have fluctuated through numerous recessions and depressions since then. In between every recession, the stock market rallied and bounced back quickly. Your $100 multiplied. Any guess what it is now? Almost 100 years later, that $100 is now worth around $900,000. What does the past tell us? Despite 16 recessions, we have always rallied. I do not fear recessions. I fear for those who do not expect and plan for recessions. So what do family stewards need to do? Listen to hear my thoughts. [bctt tweet="How can we face recessions head-on and stay hopeful for the future? I share the best strategy in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Inflation: Why There’s Reason to Remain Hopeful, Ep #220

Fri, 28 Apr 2023 05:00:00 -0500

Are you feeling positive or negative about the world today? Have you been watching the financial news and feeling a sense of doom because everything they report is negative? Do you feel like inflation is out of control? I am here to tell you that we have reason to remain hopeful and optimistic. I share why in this episode of Best in Wealth. [bctt tweet="With all of the news surrounding inflation, I still believe that we have reason to remain hopeful. Find out why in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:05] Do you believe most people are good?
[2:36] Is inflation out of control?
[5:47] The average inflation over the last 100 years
[7:18] Market sentiment regarding inflation
[9:13] We have reason to hope
[11:43] Will you be a positive or negative investor?

Is inflation out of control?

Inflation is the primary reason the stock market took a nosedive in 2022. The recent banking crisis had put inflation on the back burner. Now, inflation is back at the forefront. We have been hearing that inflation is not where we want it to be. A week and a half ago, the consumer price index showed that inflation was cooling in March—more than expected, actually. In June of 2022, the consumer price index was 9.06%. Every single month since then, the CPI has gone down.

Last August was 8.26%
September was 7.75%
December was 6.45%
February was 6.04%
March was 4.98%

What does the Fed want it to be? 2%. Unfortunately, it is still well above 2%. But we have made great strides.

The average inflation over the last 100 years

The average inflation rate over the last 100 years is right around 3%. We are currently 2% higher than the average. But we are seeing a trend. Every month, the reading has been lower. The problem is that we live in a society of instant gratification. Inflation is not going down quickly. It took two years after the pandemic started for inflation to hit its peak. When the pandemic started, everything shut down. Nothing was made or shipped. Everything got clogged for months. But we have almost cut inflation in half. If you ask me, that is significant progress—but it is not what we are hearing in the news. [bctt tweet="What is the average inflation over the last 100 years? Why does it matter to know? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Market sentiment regarding inflation

The financial markets have proven strong. Yet no one seems to believe it. You would think that the decline in inflation and rally in stocks would sway the doomsayers. But recent data suggests the opposite. A JP Morgan Survey showed that 95% of respondents expect stocks to be lower by year-end. A recent Bank of America Global Fund Manager survey shows that net allocation to stocks relative to bonds is at the lowest level since the great financial crisis of 2008. That means that the allocation is tilted toward bonds, which shows that fund managers do not think the stock market will do well. Warren Buffet advocates for investing in the market when everyone is feeling doom and gloom. Americans are still spending money, seeing a better-than-expected economy, and a downtrend in inflation. Those that are calling for the stock market demise are running out of ammunition.

We have reason to be hopeful

Businesses are reporting their earnings for the first quarter. Many publicly traded companies are still reporting great earnings. That is not good news for the bears. I cannot predict the stock market—but I do like the positive things we see in the market that are not being reported in the financial news. In 2023, earnings have been better than feared. So far, so good. The war on inflation is not over. We have a long way to go. We are certainly concerned about the Fed going too far with rate hikes, possibly leading to a recession. That could happen. But we need balance to the endless parade of negative headlines. There are good reasons to feel optimistic. Let’s shed light on the good news happening. [bctt tweet="We have reason to be hopeful about inflation. Find you WHY in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Investment Pros' Allocation to Stocks vs. Bonds Falls to Lowest Since 2009

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

March Madness: Your NCAA Bracket vs. Investing, Ep #219

Fri, 14 Apr 2023 05:00:00 -0500

Did you watch the NCAA basketball tournament? Did you fill out an NCAA bracket? An estimated 1 in 4 Americans filled out a bracket to try and predict who is going to win it all. I do not watch a lot of basketball, but I still fill out a bracket every year. This year’s tournament was a wild and crazy ride. There were numerous upsets. What is your strategy for filling out your bracket? Do you guess? Do you fill it in based on the best seed? Or are you like my admin and you make choices based on how long the college name is? This year, as I was filling out my bracket, I saw some connections between investing and filling out a bracket. Listen to this episode of Best in Wealth to learn some similarities and differences between the two worlds! [bctt tweet="How does filling out an NCAA bracket compare to investing? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:03] A BIG thank you to listeners!
[1:45] Did you watch the NCAA basketball tournament?
[4:19] Similarity #1: How is filling out a bracket like investing?
[6:20] Similarity #2: An informed approach improves your odds
[8:21] Similarity #3: Good luck and strategy are not the same
[9:47] Difference #1: The goal is to slightly better than average
[12:10] Difference #2: There’s always next year
[13:58] The BIG takeaway you must recognize

Similarity #1: How is filling out a bracket like investing?

It is pretty hard picking winners. In fact, the odds of correctly predicting the winner of all 63 tournament games are astronomically high. If you follow basketball, your odds are 1 in 120 billion. If you know nothing about basketball, your odds are even worse. It is hard to consistently pick winners in the stock market, too. In a typical year, most professional investors do not beat the market. Mutual fund managers have an uphill battle to overcome mutual fund expense fees. The cost of trading is expensive. If we look back over 15 years, only 25% of mutual fund managers actually beat the market. [bctt tweet="How is filling out a bracket like investing? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Similarity #2: An informed approach improves your odds

In the NCAA tournament, teams are seeded 1-16 in four different regions. If you want to do well with your NCAA bracket, you will have a better chance of winning more games if you pick the higher-seeded team. It does not mean you will be the champion of your pool. But year after year, you will pick more winners than most of your competitors. This year, with all of the upsets, everything went wrong. With investing, rather than trying to guess winners, take an informed approach that relies on decades of academic research. Choose to buy the whole market, or, in some cases, find different segments that do better over time and hold them. US stocks compound at 10% per year (from the Center for Research in Security Prices). Having a plan—and sticking to it—can help you position yourself for a better investment experience.

Similarity #3: Good luck and strategy are not the same

Some money managers will have THE best returns, just like someone wins their NCAA bracket pool. But in both cases, it’s unlikely that they will continue to come out on top year-over-year. When someone says, “Look at all the money I made on this stock,” I cringe. It is like someone saying they chose a one-in-a-billion upset in the bracket. Good for you—you got lucky. We often mistake luck and good strategy. Do not make that mistake. What are the big differences between investing and filling out an NCAA bracket? What is the biggest takeaway I want you to remember? Listen to the whole episode to find out! [bctt tweet="Good luck and strategy are not the same. What do I mean by that? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

The Center for Research in Security Prices

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How Vacations Make You Wealthier, Ep #218

Fri, 31 Mar 2023 05:00:00 -0500

As family stewards, we think of wealth differently. Many people focus on money. Our wealth might be our family, spirituality, friends, etc. Money might be further down the list. So how do vacations make you wealthy? When you are healthy, you are wealthy. Anyone who struggles with chronic illness would give anything for their health. In the article “Importance of Taking a Vacation,” Kathryn Isham shares seven health benefits of taking vacations. In this episode of Best in Wealth, I will share Kathryn’s research and why I think it holds up. [bctt tweet="How do vacations make you wealthy? I share my thoughts in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:04] What is the best vacation you’ve ever taken?
[4:03] Bonus benefit: Anticipating your vacation
[7:53] Benefit #1: Improved physical health
[8:27] Benefit #2: Improved mental health
[9:11] Benefit #3: Greater well-being
[9:57] Benefit #4: Increased mental motivation
[10:42] Benefit #5: Improved family relationships
[13:26] Benefit #6: Decreased burnout
[14:56] Benefit #7: Boosted happiness

Benefit #1: Improved physical health

Did you know that stress contributes to heart disease and high blood pressure? The Framingham Heart Study (FHS) found that women who took a vacation once every six years or less were eight times more likely to suffer from coronary heart disease or experience a heart attack, compared to those who vacation twice a year. What a great excuse to vacation, right?

Benefit #2: Improved mental health

Neuroscientists have found that chronic exposure to stress can alter your brain structure: “Stress can cause an imbalance…[which impacts] cognition, decision making, anxiety and mood.” Vacations help calm you and relieve stress. I do not know about you, but anticipating a vacation improves my mental health. [bctt tweet="Did you know that taking a vacation can improve your mental health? I share why this should matter to family stewards in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Benefit #3: Greater well-being

According to a Gallup Poll, “Making time for regular trips or vacations with family and friends is linked to higher overall well-being.” In her article, Kathryn also points out that three days after a vacation people sleep better and are in better moods compared to the time before their vacation.

Benefit #4: Increased mental motivation

Many people are more focused and productive once they return from a vacation. Studies have found that chronic stress can make it difficult to achieve certain tasks and lead to memory problems. Taking time off is a “tune-up” for your brain. It makes sense that you would be more revived and focused, right?

Benefit #5: Improved family relationships

As a family steward, I believe that family time matters. You can certainly create family time in everyday life—do not get me wrong. We make a point to eat family dinners together at least 2–3 times a week to build our relationships. But there is something special about taking vacations together. When we are on vacation, we share every meal together. We spend time at the pool, hiking, and biking together. Spending time with my family is the best time spent. [bctt tweet="Taking a vacation can improve your relationship with your family. Isn’t this one of our greatest desires as a family steward? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Benefit #6: Decreased burnout

According to the Harvard Business Review, “Employees are 43% less likely to experience high levels of burnout when they have a choice in deciding what tasks to do, when to do them, and how much time to spend on each.” I think vacations fall into that statement, don’t you? No one wants to experience a burned-out employee (or business owner). When we decrease burnout, we are addressing our mental, physical, and spiritual needs. Think about the weight you bear trying to be a good parent, provide for your family, and save for retirement. It is so easy to get burned out. We cannot afford it.

Benefit #7: Boosted happiness

Research shows that planning a vacation can boost your happiness. Some people experience an elevated mood up to eight weeks before their trip! If we can boost our happiness, we boost our health. The bottom line? If you can afford to take a vacation, take one. If you cannot afford one now, start saving. A vacation can help you feel refreshed and able to handle whatever life throws your way. [bctt tweet="Research shows that planning a vacation can boost your happiness. What else can it do? Find out how this impacts you in this episode of the Best in Wealth Podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

What is Your TRUE Net Worth? Ep #217

Fri, 17 Mar 2023 05:00:00 -0500

David Booth—the Co-Founder and Executive Chairman of Dimensional Fund Advisors—recently penned an article entitled, “What’s Your True Net Worth?” Here is the thing—your true net worth is not a calculation of your wealth. It stems from what you value. Find out what I mean in this episode of the Best in Wealth podcast! [bctt tweet="What is Your TRUE Net Worth? Find out what it really means in episode #217 of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Outline of This Episode

[1:01] What do you truly value?
[3:53] What is your true net worth?
[8:40] What’s important to you?
[11:18] Lifetime Integrated Financial Experience
[16:58] Legacy is a big part of net worth

What do you truly value?

My wife, two daughters, and I did an exercise. My wife had 100 pieces of paper with words listed on them that described something we might value, things like “God,” “Love,” “Career,” etc. We separate the pieces of paper into three piles. One pile was for words that did not define us. Another was a “maybe” pile. The last pile was for the words that resonated with us. We got rid of everything but the third pile. Then we had to quickly grab the two that were most important to us. My two words were “family” and “hope.” Call-to-action: Do this exercise with your loved ones. What two words were the most important to you?

What is your TRUE net worth?

In his article, David Booth shares that “Many apps today claim to instantly calculate your net worth by adding up your banking and investment accounts and then deducting what you owe on your credit cards and mortgage.” David goes on to say that this calculation only outputs your wealth. Your “worth” is far more complex. David believes that if you make life better for someone else, then you are worth something. It can be true in business and life. What’s your true net worth? This is a great conversation to have with a financial advisor. Why? You need to find where your wealth and your worth intersect. If you do not know what you value in life and your financial advisor can help you determine that, it is priceless. [bctt tweet="What is your TRUE net worth? Find out why it is not just a simple calculation in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What’s important to you?

Is your money working to help you meet your goals?

What’s important to you?
What are your goals?
What are your most important relationships?
What are your values?

Everyone answers these questions differently because everyone is different. It can be really hard to figure out what you value, right? It becomes apparent as you get older. But when I’m meeting with younger couples, it is hard. Your time is spent working and raising a family. You hardly have time to think about your future goals and aspirations. That is why it is important to go through the big three questions that I covered in episode #201. I use these questions to help my clients figure out what they truly value.

What would you do if you could do anything?
What would you do if you were given an end date?
What would you do if you had one day left?

Once you identify what’s important, your advisor can help you build a plan that gives you the best shot at reaching your goals.

Lifetime Integrated Financial Experience (L.I.F.E.)

Money management is about connecting life goals with financial goals. That is why you need a plan. You need to figure out your values, plan for the worst, and hope for the best. Life is full of surprises, some good, some bad. Every choice you make may change your goals or require you to adjust your plan. That is why your financial advisor should offer solutions personalized to you. Everyone is concerned about their financial future—but especially the people they will leave behind. Legacy is a big part of net worth. What memories will you leave with the people you care about? Do not deal with these tough questions alone. Tell your financial advisor what really matters to you. It might just help you figure out your true net worth. If you do not have a financial advisor, feel free to reach out. [bctt tweet="What does Lifetime Integrated Financial Experience (L.I.F.E.) mean and why does it matter? I share more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

What’s Your True Net Worth? By David Booth
Three BIG Questions to Ponder, Ep #201

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Savings Accounts: Earn the Interest Rate You Deserve, Ep #216

Fri, 03 Mar 2023 05:00:00 -0500

According to CNBC, 56% of Americans can’t cover a $1,000 emergency. They do not have enough money in the bank. If that is you, start building an emergency fund now. Dave Ramsey recommends saving $1,000 in the bank immediately. Then, you take any extra money you have and pay off your debt. After that, work to build savings of 3–6 months of living expenses. But once you have that, what do you do with the money? Where should you keep it? In this episode of Best in Wealth, I share the best way to keep your emergency fund liquid—and exactly how to get the interest rate you deserve. [bctt tweet="Learn how to earn the interest rate you deserve on your savings account in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:06] There was a time when I had nothing
[2:53] The basics of emergency funds
[4:09] Your emergency fund needs to be liquid
[7:18] Is your bank taking advantage of you?
[10:10] What you need to know about online banking
[14:21] How to open an online bank account
[16:45] Why do online banks offer high interest rates?
[17:28] What if you have more in your emergency fund?

Your emergency fund needs to be liquid

Once you have an emergency fund saved, what do you do with it? It needs to be liquid. You have to be able to access the money immediately. So you do not want the money in annuities, CDs, stocks, or bonds. You want the money in high-yield savings accounts or maybe money market funds. But you have to be careful with money market funds. Why? Some can go down in value. I understand that savings accounts earn very little interest. However, the Fed has been raising the Federal funds rate. That is bad news for anyone borrowing money. If you want a loan to buy a house, you are likely to pay 7–8% in interest on a 30-year fixed-rate mortgage. However, higher interest rates are great for people saving money. When you open a savings account, you are lending money to the bank in return for an interest rate. Why? It is in return for the bank using your money. Interest rates in your savings account should rise whenever the Fed raises interest rates. [bctt tweet="Your emergency fund needs to be liquid. Why? I share the details in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Is your bank taking advantage of you?

Do you know what interest rate your bank is offering you right now? Do you know what you deserve? Wells Fargo, Chase, and the Bank of America are only paying 0.01%. If you have a hefty balance, the interest rate might go up. But how much? Do you know? Now is the time to get what you deserve with your emergency fund. Some online banks are offering much nicer interest rates. Capital One is paying 3.4% in interest right now. Ally Bank is also offering 3.4%. American Express offers a high-yield savings at 3.5%. These banks are keeping up with interest rates. Plus, if you have an online savings account, you should receive notifications every time your interest rate rises. Brick-and-mortar banks rarely send out updates.

What you need to know about online banking

“Popular” and “My Savings Direct” are paying over 4%. Is that interest rate too good to be true? Maybe. There are some things you need to fully understand about online banks. Make sure you read the fine print. Do Popular and My Savings Direct have an account minimum? Maybe some banks paying higher interest rates are not FDIC insured. What does FDIC Insured mean? If you have $50,000 in your bank account and that bank files for bankruptcy, the Federal government guarantees that you will get your money back. You also want to check to see if the online banks require you to keep the money in the account for a specific number of days. What else do you need to look out for? Some banks may offer a high interest rate that is only an introductory rate. It may be for only a few months. If you have $50,000 and you are getting 0.01% interest, you are earning $50 on your $50,000 a year. What if you are earning 3.4%? That is $1,750 per calendar year and $1,700 more. That is worth the trouble of opening an account, right? How do you open an online savings account? Why do online banks offer high interest rates? What if you have more in your emergency fund? What do you do with the extra money? Listen to the whole episode to learn so much more! [bctt tweet="Learn what you need to know about online banking and savings interest rates in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Withstanding the Roller-Coaster of Investing, Ep #215

Fri, 17 Feb 2023 05:00:00 -0500

I have received many calls and questions from clients, friends, and family about how bad things were in 2022 and what they think is going to happen in 2023. I do not blame them. With the global pandemic, rapid inflation, the war in Ukraine, and the volatile stock and bond market, it is reasonable to feel uneasy. If you had knowledge of future events for the year 2020–2022—but did not know where the stock market would land—what would you have predicted? Probably not the 25% positive return that we saw. Investing in the stock market can feel like a roller coaster ride. But the truth is that it is normal. Learn more in this episode of Best in Wealth! [bctt tweet="How do you withstand the roller coaster ride of investing? Armed with the facts. Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] Do you have kids in sports?
[3:19] The stock market can be a roller coaster
[9:14] Taking a closer look at 2020–2022
[16:46] How can we explain normal returns?
[18:28] What do you think will happen in 2023–2025?

The stock market can be a roller coaster

Experts get paid millions of dollars to make predictions about the stock market. But no one knows what will happen. And despite the market being down 19% last year, the three-year average (2020–2022) was up almost 25%. How? Because the stock market was up in both 2020 and 2021 before we hit the decline in 2022. Let's look at the range of returns of the S&P 500 in the last 97 years:

In 21 years, the stock market landed up 10-20%
In 16 years, the stock market landed between 20–30%
In 15 years, the stock market landed between 30–40%
In two years, the stock market was up between 50–60%

In 1933, the stock market was up over 55%. But the flip side was rough.

There were 14 years the stock market landed between 0–10%
There were 14 years the stock market landed between -10–0%
There were six years the stock market landed between -20–00%

There was one year when the stock market ended down 45%. As you can see, stock market returns land in quite a large range. The best prediction of what will happen next year is a random draw from the last 97 years. [bctt tweet="The stock market can be a roller coaster. As family stewards, how do we handle it? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

A closer look at 2020–2022

In 2020, the stock market ended up between 10–20%. In fact, 2020 was part of a 21-year run of the stock market ending between 10–20%. In 2021, the stock market landed up 20–30%. Then 2022 hit. The stock market ended between –10–20%. There were only six years in the last 97 years that the stock market landed in that range. The last three years were a great representation of the history of the stock market. Sometimes we take two steps forward and one step back. From 1926–2019, the average return of the S&P 500 index was 10.2% per year. The average return on the one-month T bills (a “risk-free” asset class) averaged 3.32%. The equity risk premium was 6.88% per year. That is the reward you get for investing in the stock market. But what about the last three years? The average compounded return was 7.66%. The average return on the one-month T bills averaged 0.64%. The equity risk premium was 7.02%. That is higher than the average of the previous 94 years! The return you received for your risk was virtually the same. In retrospect, the last three years have been normal.

How can we explain normal returns?

How can we explain normal returns when it feels like the world is falling apart? The stock market is a giant information processing machine. When bad news comes in, prices drop. When good news comes in, prices rise. The stock market sets prices to get investors to invest. If there was a negative expected outcome every day, no one would invest. The stock market is constantly changing. And as humans, we are constantly trying to figure out how to get back on track. Innovation continues to happen at incredible speeds. Businesses adjust. We will make better products and better services with greater speed. Profits exist and fuel the stock market. One of the most important principles of investing is being a long-term investor with a plan that you can stick with. The stock market will go up and down. It always has and always will. If you felt like you needed to bail out, your plan may not have been right to begin with. Do you have a plan that you are confident in? [bctt tweet="How do I explain stock market returns to my clients to lessen their anxiety? I share some thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The Psychology of Spending, Ep #214

Fri, 03 Feb 2023 05:00:00 -0500

In the article, “The Art and Science of Spending Money,” Morgan Housel talks about the psychology behind spending money. I’m going to talk about the six points she made that hit home for me. Why? Because we need to understand why we are spending. I am a financial advisor. I want you to save money. But I also believe there needs to be a healthy balance between spending now and saving for the future. Maybe you are cutting back too much. Or you are spending too much and not saving for the future. There needs to be a healthy balance. To find that healthy balance, you need to understand what influences your buying decisions. Learn what influences those decisions in this episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth, I cover the psychology of spending money. Don’t miss this interesting episode! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:05] Do you have kids that are in sports?
[3:31] The Art and Science of Spending Money
[5:34] How your background impacts spending
[8:12] People become entrapped by money
[10:56] The concept of frugality inertia
[13:54] Emotional attachment to large purchases
[18:06] The joy of spending diminishes as income rises
[20:14] No one is impressed with your possessions as much as you are
[21:41] How will you approach your next purchase?

How your background impacts spending

Your family background heavily influences the way you spend money. We often handle money the way our parents did. The families with the biggest homes, fastest cars and shiniest jewelry often grew up snubbed in some way. Maybe they were made fun of for wearing old clothes. So part of their current spending is about healing wounds inflicted when they were younger (i.e. “revenge” spending).

People become entrapped by money

George Vanderbilt spent six years building the 135,000-square-foot Biltmore Estate, which consists of 40 master bedrooms and a full-time staff of 400 people. Allegedly, George spent very little time there. Why? Living there was not practical. The house costs so much to maintain that it nearly ruined him. He sold 90% of the land to pay for tax debt and the house became a tourist attraction. Many people believe that spending will make them happy, even though it never will. But they keep spending more. If a purchase makes you happy and it falls into what balance looks like for you, go for it. But do not be like George Vanderbilt and be entrapped by money.

The concept of frugality inertia

Some people listening are probably ultra-savers. I bet there are people saving 20–70% of their income. If you want to hit financial freedom as quickly as possible, more power to you. But when you spend your life being frugal, it is difficult to transition into a time of spending, i.e. retirement. If you never break away from that system, is that really winning? You are trapped by your frugality. This could ruin you. At some point, you get to spend your money. If you do not, where will the money go? To someone else, who will spend through it and not appreciate it?

Emotional attachment to large purchases

A few years ago, they built a Lifetime Fitness 10 minutes from our house. It looked pretty cool. So I took my family and went to the open house to check it out. I vowed we would not sign up for a membership. But when we walked in, we were awestruck. Everything was brand new. They offered free classes. They had an indoor and outdoor pool. And we made that emotional purchase. The truth is that endorphins bring you short-term satisfaction when you make a large purchase. But a week later, you will likely find yourself dealing with buyer’s remorse. [bctt tweet="Do you have an emotional attachment to large purchases? Do you attach joy to spending? Find out why these are problematic behaviors in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The joy of spending diminishes as income rises

The joy of spending diminishes as income rises because there is less sacrifice and sweat represented in the purchase. When I had my first job and saved up to buy my first stereo system, it was awesome. I felt so much joy. If you are successful and make a lot of money, you do not always feel joy when you spend. So what do you do? Get a good spending plan in place. My wife and I have “flex” accounts where we each have $200 we can spend every month. It used to be $20. We can save that $200 to spend on things I really want.

No one is impressed with your possessions as much as you are

I bought my second new vehicle—that I have ever bought—last year because the SUV I had been driving was falling apart. I washed my new truck every few days. When I drove down the road, I imagined that everyone was looking at my new truck. But the truth is, no one cares but me. The next time you make a purchase, think about your triggers and cultivate an awareness of your spending. What influences your choices? [bctt tweet="No one is impressed with your possessions as much as you are. So why do we take so much joy in it? I cover the psychology of spending in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

The Art and Science of Spending Money

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Can Your Investment Plan Withstand the Stock Market? Ep #213

Fri, 20 Jan 2023 05:00:00 -0500

Think back to December 2019. Unemployment, interest rates, and inflation were historically low. Then what happened? A pandemic. By the end of March 2020, the S&P 500 had dropped nearly 20%. By the end of the year, scientists had developed a vaccine and markets roared back. Facebook, Apple, Amazon, Netflix, and Google (FAANG) stocks soared. Bitcoin and crypto reached record highs, then they crashed. Meme stocks soared, then toppled. Inflation spiked to the highest levels most of us have ever experienced. Russia invaded Ukraine. Could anyone have predicted any of this? Let us pretend that you had. What would you have done? Would you have stayed in the market if you had known the market would still see an average yearly return of 10%? It is impossible to out-guess the markets. So what should you do instead? Find out in this episode of Best in Wealth. [bctt tweet="Do you have an investment plan that will get you through the good AND the bad times? Learn why this is important in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:10] Did you open your year-end statements?
[3:10] If you could see the future, what would you do?
[7:15] What we can learn from the past three years
[8:39] Do you have a good investment plan?
[12:16] Do not forget your obligation as a family steward

What we can learn from the past three years

We can expect that the markets will capture human ingenuity across thousands of publicly traded companies around the world. When news of a pandemic hit, the markets adjusted and prices went down. When uncertainty peaked in March 2020, investors demanded a higher return to jump into the market. When news of a vaccine spread, the market adjusted expectations accordingly. But in between those times, the market was volatile. Making any changes was dangerous. The past three years were a good test of whether or not you had an investment plan that was sensible to stick with. So that begs the question, do you have a good investment plan? [bctt tweet="What can we learn from the past three years in the stock market? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Do you have a good investment plan?

Do you have an investment policy statement? Did you test the risk of your investments and what you could expect them to do? Were you comfortable with the downside of the risk that you were taking? Let us think about it. Did you make any mistakes? Now is the time to prepare for the next time. The next three years will be just as uncertain. We just do not know what the uncertainties will be. Make sure your investment plan is sensible and based on financial science. You also need to know your investment philosophy. Know that it is not based on opinion. Secondly, make sure your plan is realistic. Do not copy your friends. Your goals will be different. Your risk tolerance will be different. A plan is no good if you can not stick to it during hard times. Find a risk level that is right for you. So when you open up your end-of-the-year statement, you might not be happy, but you will not be surprised. If you are not sure what is right for you, talk with a financial advisor. Feel free to reach out to me or check out the thousands of financial advisors on NAPFA.

Your obligation as a family steward

Let us develop and stick to plans that take us through market fluctuations to capture the long-term benefits of the stock market. The stock market is all about people developing better products and services to solve our problems. That leads to profit. As family stewards, we have an obligation to stay in our seats. And if we can stay in our seats, we will be just fine. Do not follow an investment plan that has you swinging in and out of the market based on people’s opinions. Follow the science. [bctt tweet="As a family steward, it’s important to capture the long-term benefits of the stock market. How do we do that? Learn more in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

NAPFA

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Stick With It: How to Build Good Habits in the New Year, Ep #212

Fri, 06 Jan 2023 05:00:00 -0500

Building good habits can be hard. Half of dieters give up within one week of starting. So what is the answer to lasting change? How do you make it easier to achieve? Dr. Sean Young studies behavior change. He has helped people develop good eating, sleeping, and exercise habits. He literally wrote the book, “Stick with It: A Scientifically Proven Process for Changing Your Life-for Good.” In episode #211, I covered how to break bad habits. So in this episode of Best in Wealth, we are going to cover how to stick with it and build good habits in 2023. [bctt tweet="How do you “stick with it” and build good habits for the new year? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:29] What are your good habits?
[4:54] Step #1: Small steps beat big dreams
[6:28] Step #2: Call for backup (do it with friends)
[7:46] Step #3: Why is it important?
[8:41] Step #4: Make it easy to accomplish
[10:35] Step #5: Act before you think
[12:23] Step #6: Make sure you reward yourself
[13:58] Step #7: Build a routine
[15:57] Answer these three questions

Step #1: Small steps beat big dreams

Focusing on small steps allows you to achieve goals faster. It keeps you happier and more motivated to keep trying because you get rewarded more frequently. Consistency is the most important part of building habits. It is not a habit when you are not consistent, right? If you want to create a new habit, simplify the behavior to make it easily achievable. You are more likely to stick with it.

Step #2: Call for backup

Just like you need an accountability partner to break bad habits, you need one to help you develop good habits. Be around people who are doing what you are doing. Social support and competition foster change. If you want to become healthier, do not hang out at the bar—hang out at the gym. Spend time with people who are aligned with your goals. [bctt tweet="Just like you need an accountability partner to break bad habits, you need one to help you develop good habits. Find out why in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Step #3: Why is it important?

Why do you want to build this habit in the first place? When a doctor says, “Change your diet or you will be dead in six months,” you are motivated to change. Why is making this change important to you? What answer(s) to this question will motivate you? Motivations around money, social connections, and health stick the most.

Step #4: Make it easy

The more hoops you have to jump through to accomplish something, the less likely you are to do it. When you are trying to break a bad habit, you want to make it as hard as possible to do that thing. It is the opposite with building good habits. What can you do to simplify it and make it easier? According to Sean’s research, if you make it 3–20 seconds easier to start, you are more likely to do it. To make completing our morning workout easier, we set out our workout clothes on the bathroom counter. I will even get our water bottles ready. [bctt tweet="What can you do to simplify a good habit to make it easier? I share some ideas from Sean Young’s book, “Stick With It,” in this episode of Best in Wealth. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Step #5: Act before you think

Do not try to change your mind so your behavior will change. Change your behavior and your mind will follow. People think they can change their behavior by imagining change. But Dr. Young believes this is wrong. You will not stop smoking by willing yourself to do so. Change your actions first. Just do it.

Step #6: Make sure you reward yourself

Research shows that every habit has three components:

The trigger for an automatic behavior to start
The behavior itself
The reward

Rewarding yourself is how your brain learns patterns and makes them automatic. What can you give yourself to enjoy as soon as a behavior is done? Is it chocolate? A smoothie? A few minutes of relaxation? What is important is that there is a reward.

Step #7: Build a routine

When does it happen? Where does it happen? How does it start and end? Repeat this. It is easier to build a routine if you can do something at the same time and in the same place every day. It will teach your brain that it needs to remember this behavior. How do you build a routine around the habit you want to build? Tune in to the whole episode to learn more!

Resources Mentioned

Stick with It: A Scientifically Proven Process for Changing Your Life-for Good

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Say Goodbye to Bad Habits in 4 Steps, Ep #211

Fri, 23 Dec 2022 05:00:00 -0500

What are your bad habits? When I finally climb into bed at night—I grab my phone and start scrolling. Before I know it, 30–40 minutes have passed. Looking at screens right before bed negatively impacts sleep, yet I continue to do it. So in this episode of Best in Wealth, I share four “laws” from James Clear’s book, “Atomic Habits,” that will help you say goodbye to your bad habits. [bctt tweet="In this episode of Best in Wealth, I share four “laws” from James Clear’s book, “Atomic Habits,” that will help you say goodbye to your bad habits. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[2:37] What is your bad habit?
[5:23] Get an accountability partner
[6:54] Step #1: Make it invisible
[8:40] Step #2: Make it unattractive
[10:06] Step #3: Make it difficult
[11:52] Step #4: Make it unsatisfying

What is your bad habit?

What is your worst bad habit? Describe that behavior. What is undesirable about the habit that you want to break? What is offensive about it? What does it keep you from obtaining? Why do you want to change? What do you want to do instead? Are you committed to improving? If you are not committed, breaking your habit will never work. Clarify your bad habit, why you have it, why you want to change, and why it is good for you to change so you can develop a plan to overcome it. Many habits happen automatically—but you still choose the behavior. It is frustrating to try to change a habit through willpower alone. So what is a smarter way to conquer your automatic behavior? What is the first thing you need to do?

Step #1: Make it invisible

James Clear’s first law is to make it invisible. How can you reduce your exposure to your bad habit? If your habit is spending too much time on your phone, you can silence your phone or charge it in another room. If you drink too much, clear the booze out of your house. The goal is to reduce how much that habit is confronting you. [bctt tweet="What is step #1 to help you break your bad habits? Make them invisible. Learn what that means in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Step #2: Make it unattractive

How do you make a bad habit unattractive? Reframe your mindset. What are the benefits of avoiding bad habits? If I avoid my bad habit, I will get more sleep because I will go to bed sooner. Secondly, I will fall asleep easier if I do not spend time on my phone or watching TV. Consistently highlight the benefits of avoiding your bad habits to make them seem less attractive.

Step #3: Make it difficult

Place multiple steps between you and your bad habits. Restrict future choices to ones that benefit you. If you want to spend less time on social media, what can you do? Log out of social media apps or uninstall them from your phone. If you got rid of the alcohol in your home, to get a drink, you have to drive to the liquor store. Is it worth it? Likely not. [bctt tweet="How do you make a bad habit so unsatisfying that you break it? I share some steps in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Step #4: Make it unsatisfying

Ask someone to watch your behavior. Make the cost of your bad habits public and painful. If you know someone is watching and judging you, you are less likely to do something. You can also ask an accountability partner to give you a consequence for your actions. What would be a consequence that would keep you from continuing your bad habits? It’s time to learn from your past mistakes and break your bad habits. What will you change moving forward?

Resources Mentioned

Atomic Habits by James Clear

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

What is Driving the Stock Market Gains? Ep #210

Fri, 09 Dec 2022 05:00:00 -0500

What question am I asked the most? It is usually along the lines of: “What do you think the stock market is going to do? When will we be out of this horrible downturn? When will things turn around?” These are the questions I will try and answer in today’s episode of the Best in Wealth podcast! [bctt tweet="What is driving the stock market gains? We share what we think it is and why it might stick in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:22] What question am I asked the most?
[3:07] Reminder: We do not have a crystal ball
[4:54] What has happened since the 4th quarter?
[7:27] Why investors are feeling bearish
[8:48] What the data is pointing toward
[13:45] How we invest, bear or bull market

Why I am sharing this piece

My company, Fortress Planning Group, brought on a new partner in march—Brian Cayon. He is a Certified Financial Analyst (CFA) and a Certified Public Accountant (CPA). Brian recently wrote a piece about where the stock market is headed. But let’s be clear here—we do not have a crystal ball. The economy is impacted by thousands of things, some things we cannot be aware of. You should not listen to anyone who says where the stock market is headed next with 100% certainty. But the reason I want to share the piece Brian wrote is because it is a message of hope. Let’s dive in!

What has happened since the start of the 4th quarter?

After a horrible year, the financial markets have seen a significant rally in the last two months. In October and November, the S&P 500 was up over 14%. The MSCI Index (foreign stocks) is up over 15%. The Aggregate Bond Index is up 2.33% quarter-to-date. Is this nothing more than a bear market rally, when you see a solid month before another market drop? After all, we saw this in the first month of the third quarter. While this could be a bear market rally, Brian believes that this rally is justified. Why? Because of the improved outlook on inflation. The Feds response to inflation is the single biggest driving force to the 2022 decline in the financial markets. [bctt tweet="What’s happened since the 4th quarter in the stock market? Why does it give us hope? I share some thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Why investors are feeling bearish

The general consensus among investors is this: inflation is sticky and will remain elevated for years (until it falls to a target of 2% per year). Others think the Fed will not slow rates until inflation nears the target of 2%—or something breaks. Still others think the US Economy is tipping into a recession. They do not see a meaningful recovery until after we have a recession. But what if they are wrong?

What the data is pointing toward

Inflation is already breaking to the downside and is now being reflected in the hard data. The October CPI print slowed to a 3–4% annualized inflation rate. The November print is expected to be similar. The Fed has also acknowledged softening inflation data, which means they might slow rate hikes. December could be the last hike (expected to be half a percent). The labor market has slowed considerably, without a big rise in unemployment (over 200,000 jobs were added last month). The US economy is resilient and consumer spending remains robust. Corporations have absorbed rising costs without much demand destruction or a major hit to earnings—so far. In the last two months, the data has improved. But investors are still bearish. This is shown in investor surveys, fund flow data, and fund manager surveys. The Bank of America survey shows that the risk appetite is the lowest it has ever been. But none of this is surprising. Why? Learn more in this episode of the Best in Wealth podcast! [bctt tweet="What does data being published about the stock market tell us about the future? I share some research in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The Best in Wealth Guide to Understanding Medicare, Ep #209

Fri, 25 Nov 2022 05:00:00 -0500

It is time for open enrollment for every insurance option—including Medicare. Are you confused? You are not alone. If you are not 65 and do not qualify for Medicare yet—do not tune out. This episode is for you, too. Everyone nearing retirement age needs to understand the process and the costs. So in this episode of Best in Wealth, it is my goal to help you understand the basics of Medicare. [bctt tweet="In this episode, I share a simple guide to understanding Medicare. This is something everyone nearing retirement age NEEDS to understand. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[4:47] Step #1: What is Medicare?
[7:31] Step #2: What does Medicare cost?
[10:54] Step #3: What does Medicare cover?
[14:34] Step #4: Understanding supplemental coverage
[23:29] Medicare planning is for everyone

What is Medicare?

Medicare is split into three parts: A, B, and D. Part A is hospital coverage, which pays for room and board if you are hospitalized or in a skilled nursing facility (not to be confused with assisted living or nursing home). Part B is “outpatient coverage,” which includes pretty much everything else: Doctor visits, equipment, lab work, surgeries, diagnostics tests, and more. Part D is prescription coverage. You are eligible for Medicare on the first day of the month during which you turn 65 (or earlier if you qualify due to a disability). You should enroll in Medicare three months before you turn 65. However, if you are still working and covered under your employer, you can apply for a waiver to wait to enroll until you are fully retired. But if you are already 65, you might be penalized if you do not enroll immediately.

What does Medicare cost?

Part A is free. Yes, you read that right—free! It has no premium attached. In 2023, Part B will cost $164.90 per month (for most people). If you are a high-income earner, you will likely have to pay more ($238, $340, $544, or $578 depending on how much you make). Part B premiums come directly out of your social security check monthly, unless you are delaying social security (then you will get billed quarterly). Part D drug coverage has many different options. But the national average is around $34 a month in 2022. These premiums also vary based on where you live and how much you make. [bctt tweet="What does Medicare cost? Learn more about the basics of Medicare in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagemen" username=""]

What does Medicare cover?

Medicare covers most of your healthcare costs. However, you’ll still be responsible for your deductibles, co-insurance, and copays. Part A will pay for 60 days in the hospital. Your share of the cost is a deductible of $1,556 in 2022. After 60 days in the hospital, you have to pay a larger share in the form of a copay—which could be hundreds of dollars per day. This could cost you a lot of money. Part B covers 80% of outpatient care after a small deductible of $233 per year. You will always have to cover 20% of services with no cap. Part D helps cover prescription medications—but not everything. It is around $35 a month and some things are excluded.

Understanding supplemental coverage

Some sort of supplement is necessary for every individual. Medicare covers approximately 80% of your healthcare. But what if you end up with cancer? What if your medical treatments cost $100,000? 20% of that is still $20,000. There are two main types of supplemental coverage: a Medigap plan or a Medicare Advantage Plan. A Medigap plan or Medicare supplement covers things that would normally be your share—such as the 20% Medicare does not cover. Some plans also cover Part A and Part B deductibles. These plans cost more but allow freedom of choice in medical care. You can see anyone who accepts Medicare. The additional monthly cost is approximately $150. A Medicare Advantage Plan (or part C coverage) is the other option, instead of a supplement. These plans were created as a low-cost alternative and pay instead of Medicare. They are private insurance plans with their own local network of providers (HMO or PPO style). You see a set provider, group, or network to keep costs low. You pay copays for services as you obtain them. This option is typically lower cost than Medigap plans. I know this can get complicated. That is why it is important to work with a financial advisor who knows a lot about Medicare so they can help guide you through the process. You need someone on your side who you can trust. Listen to the whole episode for more details about Medicare coverage! [bctt tweet="I help you understand Medicare and supplemental coverage in this episode of Best in Wealth. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagemen" username=""]

Resources Mentioned

Medicare

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The Pros and Cons of Being Rich, Ep #208

Fri, 11 Nov 2022 05:00:00 -0500

I know what you are thinking—how could there possibly be cons to being rich? While everyone has a different definition of what “rich” is, most can agree that becoming rich would be life-changing. But I would argue that it is not always life-changing in a good way. Find out what I mean in this episode of Best in Wealth! [bctt tweet="What are the pros and cons of becoming rich? Hear my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[2:09] Who would not want to be rich?
[3:16] The pros of being rich
[7:58] The cons of being rich
[13:41] How will becoming rich change you?

What if you won the lottery?

The other day, I had lunch with my dad and brother. Our lunch conversation centered around the Powerball jackpot being at $1.5 billion. We were all amazed by the cost of the chicken we had ordered, which led to the conversation about winning the Powerball. My dad said, “If I win the Powerball, I am gonna buy your company.” But honestly—what would life look like if you won the lotto? What would the pros and cons of being extremely wealthy be? Let’s dive in.

The pros of being rich

Everyone wants to be rich, right? Who would not? I am sure being super-rich would be a nice problem to have. Let’s say you won the lottery, got a huge insurance settlement, or inherited a windfall from a relative and became super rich. So what are the pros?

Financial freedom: Financial freedom allows you to make decisions based on things that bring joy to your life. I love what I do, so I would continue to run Fortress Planning Group when I am financially free.
Go on vacations whenever and wherever you want: Maybe you can own or rent a yacht wherever you want.
Build a dream home: You can build houses in different states or countries. We just built our house five years ago and my wife is already talking about things she wants to change.
Fund your passions: You will be able to pay for all of your favorite pastimes.
Wear the best clothes: My kids would wear Lululemon day and night.
Pay for the best healthcare: You could have the best healthcare possible and pay for cosmetic surgeries not covered by healthcare.

You could put in a swimming pool, throw the biggest parties, and the list goes on. What would be on your list? In his book, “The Psychology of Money,” Morgan Housel writes that “Money’s greatest intrinsic value is its ability to give you control over your time.” Isn’t that what financial freedom is all about? It is a luxury. If you are wealthy, you do what you want, where you want, when you want, and with who you want. Does that not sound amazing? But there are downsides. [bctt tweet="What are the pros of being rich? I share what I think some pros are in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

The cons of being rich

Some people would say that there are no cons to being rich. But the reality is that there are. We have read stories about the curse of those who have won the lottery. Many become broke or their lives are far worse than they were before.

Money will not make you happy: Once you hit a certain income level, your happiness does not increase. If you have nothing and you are living in a house that is falling apart, more money will make you happy to an extent.
The end of your goals and ambitions: If your goal is becoming financially free and you reach that goal, what is next? If you get there on your own through hard work, you will feel satisfied. You need a substitute for your old goal of achieving financial freedom.
Being judged unfairly: People might judge you because of your nice clothes, car, and house. Having money does not mean you are a bad person, but people might assume that you are.
Someone is always richer than you: Being rich does not make you different or better than anyone else. Someone will always have more than you. It cannot be about “Keeping up with the Joneses.”
Guilt: Who are you going to help? Parents, siblings, friends, distant relatives? How far will you go? When is enough, enough? Will you feel guilty when you have to say “no?” That is a burden of being rich.
The constant scammers and fraudsters after your money: You will face different stress and anxiety than when you did not have money. You will have to pay financial advisors and tax accountants to handle your money. Can you trust them all?

What will money do to you? Will it change you? List out the pros and cons and make sure that if you become “super-rich” it does not consume you. Can you remain your true self? [bctt tweet="I believe there are some cons to being rich. Why? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

The Psychology of Money by Morgan Housel

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How 17 Different Countries Define Meaningful Lives, Ep #207

Fri, 28 Oct 2022 05:00:00 -0500

What brought meaning to your life today? I got to wake up healthy kids. I got to drink coffee with my wife. I got a text from my 24-year-old living hundreds of miles away. I help my clients navigate retirement. All of these things bring meaning to my life. Pew Research surveyed 17 different countries to find out what was meaningful to each of them. In this episode of Best in Wealth, I cover some of the results of this study and share why a meaningful life is an important piece of retirement planning. Check it out! [bctt tweet="In this episode of Best in Wealth, I share how 17 countries define “meaningful lives” and why it matters for your retirement. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:07] What brings meaning to your everyday life?
[3:32] What makes your life meaningful [5:07] The four most important sources of meaning
[12:18] The other sources of meaning
[13:18] Faith, religion, and spirituality
[14:24] Under 30 vs. 65 plus
[16:58] Why this exercise is so important

What makes life meaningful?

At Fortress Planning Group, we focus on the cornerstones in our lives. If you can figure out those cornerstones, you can build a plan around each of them to build abundance. But most clients do not know how to answer “What brings meaning to your life?” What do you want to accomplish before you die? When do you want to retire? How do you want your retirement to look? How are you going to address healthcare? What about being snowbirds for part of the year? Many people have not thought through how they want to live in retirement. And if I ask them what makes life meaningful, I might get a blank stare. That’s why you need to think about what brings your life meaning now and if that will change in retirement.

Family is the #1 source of meaning and fulfillment

The countries surveyed were the United States, New Zealand, Australia, Canada, the Netherlands, Germany, Greece, Italy, Singapore, Spain, Taiwan, the UK, Belgium, France, South Korea, Sweden, and Japan. By far, the #1 thing that brought meaning to people’s lives was their family. Family was the #1 choice in 14 of the 17 countries. People highlighted their relationships with parents, siblings, children, and grandchildren and quality time with them. They are proud of the accomplishments of their relatives. Family makes their lives fulfilling. [bctt tweet="For most people, family is the #1 source of fulfillment in their lives. Why does this matter when you’re about to retire? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

People find fulfillment in their occupations

The second source of fulfillment was one’s occupation/career. Think about that for a second. Does your occupation bring meaning to your life? Some say, “yes.” Others do not find meaning in their occupation at all. Before I started fortress and I was in sales, I did not find it meaningful. Maybe occupation is at the top for you, but maybe it is not. Maybe you are just working for a paycheck so you can create abundance in other cornerstones of your life. But if you want your career to be meaningful, figure out how to make that transition.

Source of meaning #3: Material well-being

What is material well-being? It includes satisfaction with a range of economic concerns, such as the government's handling of the economy, taxes, the cost of necessities, household income, pay, financial security, etc. That was the #1 source of meaning in South Korea. It was #2 for numerous other countries. It was #3 for the United States. What else was important in these 17 countries?

Family and friends
Physical and mental health
Society and institutions
Freedom and independence
Hobbies and recreation
Education and learning
Nature and the outdoors
Romantic partner
Travel and new experience
Retirement
Spirituality
Faith and religion
Pets

Faith, religion, and spirituality

Outside of the United States, religion is never one of the top 10 sources of meaning cited. In the United States, religion is #5. I thought that was surprising. And only 15% of people in the United States mentioned religion and/or God as a source of meaning. What else was fascinating about this study? How can it be applied to our lives? Why is finding meaningful things in your life so important? Listen to the whole episode to learn more! [bctt tweet="Only 15% of people in the United States mentioned religion and/or God as a source of meaning in their lives. What is the #1 source of meaning? How does it apply to RetirementPlanning? Find out in this episode of Best in Wealth! #wealth #retirement #investing #FinancialPlanning" username=""]

Resources Mentioned

What Makes Life Meaningful? Views From 17 Advanced Economies

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How Do You Earn More Time? Ep #206

Fri, 14 Oct 2022 05:00:00 -0500

We cannot control the stock market, right? But there are many things we can control. At Fortress Planning Group, we do intense tax planning to help you save every dollar you can. There are so many facets of financial planning to consider. Are you doing estate planning? Do you know how much insurance you need? Are you strategically optimizing your dividends and rebalancing so you buy at the lowest possible point? Let’s control what we can control. And there is one thing you can control to add more years to your life. If you’re behind on retirement planning, this could be the key to a successful retirement. Find out what it is in this episode of Best in Wealth! [bctt tweet="How do you earn more time? How do you add years to your life so you have more time to invest in the retirement of your dreams? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:07] Let’s control what we can control
[3:25] How do you earn more time?
[7:09] The difference between lifespan and healthspan
[8:40] How much do you need to exercise?
[10:31] What else can add years to your life?
[13:53] What are you doing to increase your healthspan?

How do you earn more time?

How do you make up time? Is there an option other than saving as much as you can? Or taking too many risks in your portfolio? I typically recommend saving as much as you can. However, an article written by Nick Maggiulli called “How to Get More Time” made me realize that I was looking at this all wrong. Instead of focusing on how to get and save more money—why not focus on getting more time? There is more time to save, more time for the stock market to recover, and more time for compounding interest. So how do you get more time? You have to earn more time. And you earn more time by exercising. Exercising regularly to improve your strength and cardiovascular health is the most effective way to increase how much productive time you have left on this earth. Anything can happen to anyone at any time. But all things equal, exercise has the most influence on earning more time. [bctt tweet="How do you make up time? Is there an option other than saving as much as you can? Or taking too many risks in your portfolio? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The difference between lifespan and healthspan

Peter Attia shares that “Proper cardiovascular fitness can add three to five years to your lifespan and six to eight years to your healthspan.” Healthspan is how long you live while in good health. Doesn’t 6–8 more years of living the life that you want sound wonderful? Isn’t that what everyone wants? If you could earn that through cardiovascular and strength training, isn’t that motivating? I am up and down with my fitness journey but gaining years on my life is highly motivating.

How much do you need to exercise?

But what if you hate exercising? What do you have to “give up” to gain 6–8 years? Turns out, if you spend four hours a week exercising for 50 weeks a year for 50 years, that would be 10,000 hours of lifetime exercise. One year of exercise gets you 6–8 additional years of disability-free health. Every hour you spend exercising is 6–8 hours of additional healthy living. Of course, it is not guaranteed, nothing in life is. But why not stack the odds in your favor? That is also why we invest in highly diversified portfolios. That will give you the greatest chance for financial success. What else can add years to your life? What can take away years from your life? Listen to the whole episode to find out what you can do to increase your lifespan! [bctt tweet="Did you know that you can increase your lifespan by doing one simple thing? If you need more time to invest in your dream retirement, listen to this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

How to Get More Time by Nick Maggiulli

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

7 Tips to Help You Navigate Money in Your Marriage, Ep #205

Fri, 30 Sep 2022 05:00:00 -0500

7 Tips to Help You Navigate Money in Your Marriage, Ep #205 Did you just get married? Or have kids about to get married? Maybe you fight about money and need to recommit to a healthier money mindset. Rachel Cruze wrote an article where she shared 7 tips for a healthy relationship with money in marriage. I will share what those tips are and what I might do differently. Even if you do not fight about money, this episode of the Best in Wealth podcast is full of tips and tricks anyone can implement to change the money conversation. Check it out! [bctt tweet="In this episode of Best in Wealth, I share 7 tips to help you navigate money in your marriage. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:05] My oldest daughter is getting married!
[2:52] 7 tips for a healthy relationship with money
[5:37] Tip #1: Keep a joint bank account
[8:02] Tip #2: Discuss lifestyle choices together
[9:37] Tip #3: Recognize your difference in personality
[11:45] Tip #4: Do not let salary differences come between you
[13:22] Tip #5: Keep your purchases out in the open
[14:40] Tip #6: Set expectations together
[16:37] Tip #7: Do not let the kids run the show
[18:12] Learn how to talk about finances productively

Tip #1: Keep a joint bank account (if it works for you)

One of Rachel’s tips is to only have a joint bank account. When we got married, we kept separate counts and a joint account. I thought we would pool some money in the joint account to cover bills (based on how much each person made). It did not work out as I anticipated. Instead, when we are creating our spending plan, we set aside a flex account for money that each of us can spend monthly—no questions asked. It is the only line item that rolls over into the next month.

Tip #2: Discuss lifestyle choices together

You and your spouse may have different shopping habits. One might spend money on designer clothes and the other might shop at thrift stores. Get on the same page and come to a compromise about where and how to spend money (another reason I love each person having a flex account).

Tip #3: Recognize your difference in personality

Dave Ramsey talks about two types of people: The “free spirit” and the “nerd.” In any relationship, there is usually someone who likes to spend more than the other. Who is the nerd in your marriage? That person should handle the day-to-day operations of your finances. But when you create your spending plan and allocate where every dollar is going, do it together. You must both look at it and agree on it. [bctt tweet="Dave Ramsey talks about two types of people: The “free spirit” and the “nerd.” Learn how your personality can help you navigate money in marriage in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Tip #4: Do not let salary differences come between you

I see this time and time again. The higher income earner in a marriage feels like they should have more power over what is happening with the money. Remember, it is not your money. When you get married, it is “our” money. Even if you keep separate accounts, do not use it as a power trip in your marriage. You are on the same team!

Tip #5: Keep your purchases out in the open

The #1 reason people get divorced is infidelity. The second reason is because of money. Being unfaithful to your spouse does not always involve an affair. What if you are keeping a separate account and hiding money and purchases from your spouse? One in three people has hidden purchases from their spouse. It will not end well. [bctt tweet="The #1 reason people get divorced is infidelity. The second reason is because of money. Learn how to keep money from being an issue in your marriage in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement" username=""]

Tip #6: Set expectations together

How did your family of origin talk about money? Does one spouse have a family with more money? Do they buy nice things and go on fancy vacations? Maybe one spouse went camping for vacations. Set expectations together. If you want to go on a great vacation, save for it. Discuss your dreams and go after them together.

Tip #7: Do not let the kids run the show

What are you willing to do for your kids? How much will you spend and on what? Set spending plans for back-to-school shopping and Christmas gifts. Do not let your kids dictate the money you spend. Kids have unrealistic expectations about money—now more than ever—because of their access to technology (and even what their friends are given). Any of these tips stick out to you? I encourage you to implement these and start having conversations about money. It is a game-changer!

Resources Mentioned

Money and Marriage: 7 Tips for a Healthy Relationship by Rachel Cruze

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

8 Reasons to Remain Positive about the Stock Market, Ep #204

Fri, 16 Sep 2022 05:00:00 -0500

The first two quarters of 2022 were horrible in the stock market. The third quarter started well, but the last three-and-a-half weeks have not been great. One of my partners at Fortress Planning Group wrote an article about inflation, the Fed, and the midterm elections. In this episode of Best in Wealth, I am going to highlight some of Brian’s key points. My end goal is to encourage you to remain hopeful about the economy. [bctt tweet="In this episode of Best in Wealth, I share 8 reasons to stay positive about the stock market. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:10] The positive impact of routines
[2:45] Inflation, the Fed, and midterm elections
[7:40] 8 reasons to have a positive outlook
[10:17] The impact of midterm elections on the stock market
[12:49] Discipline is the key to successful investing

Inflation, the Fed, and midterm elections

On August 26th, Jerome Powell told investors that the Fed is committed to raising rates to fight inflation until it gets the job done. The stock market has steadily declined ever since. However, Brian points out that September is traditionally a weak month in the market. The upcoming midterm elections also leave people fearful. Why? The Fed is getting aggressive with interest rates. Their end goal is to return inflation down toward the 2% range, or a “neutral rate of inflation.” In the 12–15 years before 2021, we averaged 2% inflation. The labor markets are still tight and economic slowing is needed. Europe is about to enter a recession. China is still implementing its zero-Covid policy, impacting supply chains. Russia is causing problems with global energy supplies. Add all of this up and we likely see little upside in stocks. [bctt tweet="What do inflation, the Fed, and midterm elections have in common? Find out in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

8 reasons to remain positive about the stock market

I believe we can have hope. Here is why.

Leading indicators continue to point to deviation/disinflation. Over 40% of the components that make up the consumer price index have declined from their recent highs.
US corporations remain impressively resilient, emerging from the global pandemic efficiently, with better cost discipline. They are weathering the inflation surge impressively.
The US economy has absorbed the massive Fed rates.
Labor issues are improving, evidenced by last month's job reports showing an increase in participation rates.
Investor sentiment remains near rock bottom, worse than the great financial crisis. Why is that good news? When it is low, it is a sign of the bottom.
There has been a drop in energy, housing, and commodity markets which supports a lower inflation outlook.
We were supposed to hit $140 per barrel of oil this summer. Currently, oil sits at $86 a barrel—far below the Russia/Ukraine crisis levels. Oil was higher when the war with Ukraine started.
ISM manufacturing prices paid index fell to the lowest levels of the year, in line with pre-pandemic figures.

These 8 positive signs show us that we can see positive outcomes in the remainder of 2022. This is all good news for investors and the mainstream media is not pointing it out.

The impact of midterm elections on the stock market

We cannot forget about the role of elections. The midterms are Tuesday, November 8th. Historically, in the 12 months before election day, market performance has been muted at best and is generally volatile. But in the year after midterms, the S&P 500 sees market returns on average of over 16%—regardless of which party is in power. The S&P 500 has produced positive returns every 12 month period following a midterm election since 1940. Does that mean it will happen again? It is never guaranteed. But it helps to look at what is happening historically. We may have already seen peak inflation. The economy remains healthy and unemployment rates are low. Publicly traded companies have absorbed interest-rate increases. Maybe, just maybe, the worst is behind us. [bctt tweet="What is the historical impact of midterm elections on the stock market? I share some data in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Inflation, the Fed, and midterm elections

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

What Should Your Net Worth Be Right Now? Ep #203

Fri, 02 Sep 2022 05:00:00 -0500

What should your net worth be? Where do you compare to the average investor? As a listener of this podcast, I think you are an above-average person. So what should your net worth be if you are above-average? In this episode of Best in Wealth, I share seven traits that make you an above-average person. Then I will share what the net worth of an above-average person might look like. Do nit miss this episode! [bctt tweet="What should your net worth be? Where do you compare to the average investor? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:07] Do you compare yourself to others?
[3:50] The average net worth in America based on your age
[6:11] The traits that make you an above-average person
[12:34] The net worth of an above-average person

The average net worth in America based on age

According to the latest Federal Reserve Consumer Financial Survey, the average net worth per age is:

Under 35: $76,000
Between 35–40: $288,000
Between 45–54: $727,000
Between 55–64: $1.2 million

I do not love these numbers. Why? They do not account for above-average people and they are skewed by the numbers of the super-rich. The median net worth in America is much lower than reported in the survey at $97,300. $97,300 accounts for all age groups and net worth's. I do not want a skewed number. And I think we need to push ourselves to financial freedom as quickly as possible. [bctt tweet="What is the average net worth in America based on age? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The traits that make you an above-average person

Here is what I believe makes an above-average investor:

You must be a hard worker. You have to put in the time to be successful. Do not expect great things to happen if you are not working hard.
You must take responsibility for your actions. You are in control of yourself. Do not blame others for the situation you are in.
You need to believe in yourself. If you do not believe in yourself, you will never be an above-average person.
You need to spend less than you make. You need a great spending plan to do that. People that find themselves in debt spend their whole lives trying to get out of debt.
You need to be committed to saving for the future. The first line item in your spending plan should be the percent you are saving for the future. You should all strive for 15% of your gross income (if not more). Max out your 401k, IRA, and investment accounts.
Understand compounding interest. You need an investment policy statement that dictates how you invest (stocks, real estate, bonds, etc.).
You need to look in the mirror and say, “I’m going to be disciplined.” Be disciplined with your spending plan, the amount of money you are going to save, and how much you invest.

If you implement all of these steps, I believe you are an above-average person.

The net worth of an above-average person

I do not have data to support these numbers. But it is a good place to start. What could your net worth be if you are an above-average person?

By 30: $250,000 or more
By 35: $429,000
At 40: $660,000
At 45: $914,000
At 50: $1.25 million
At 55: $1.68 million
At 60: $2.1 million

We all spend time comparing ourselves to others—but everyone is different. We will all have a different net worth depending on our unique retirement plan and how we want to live out our days. Listen to the whole episode to learn more about net worth and working your way toward financial freedom. [bctt tweet="What is the average net worth of an above-average person? I share some ideas in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Changes in U.S. Family Finances from 2016 to 2019

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Giving Money to Loved Ones: 4 Things You Need to Consider, Ep #202

Fri, 19 Aug 2022 05:00:00 -0500

Are you in a place to help your kids, siblings, or friends? What if you want to help your parents financially? How do you give money to loved ones? This is when things get dicey. This is not an easy subject to think about. But you will likely face it at some point during your life. So in this episode of Best in Wealth, I cover four things you NEED to consider before giving money to loved ones. [bctt tweet="In this episode of Best in Wealth, I share 4 things you need to consider before you give money to loved ones. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:01] How do you want to be remembered?
[3:02] How to give money to your loved ones
[4:22] Question #1: Does your financial plan allow you to give?
[5:59] Question #2: What is the money for?
[7:28] Question #3: Is there another alternative?
[9:57] Question #4: How can you set boundaries?
[13:53] The money conversation is never easy—but it is important

Question #1: Does your financial plan allow you to help others monetarily?

Does your monthly cash flow allow you to give money away? Is someone’s need more than your monthly cash flow will allow? To give away money, do you need to save for 3–6 months first? You must remember that you cannot sacrifice yourself—and your family—for someone else. Does your long-term plan allow you to give out money to a loved one who is in need? If you do not plan for these things but give your money away, you may be the one asking for money down the road. It helps no one. Takeaway: Create a financial plan that addresses short-term and long-term giving.

Question #2: What is the money for?

If someone is asking you for money, you are allowed to ask what the money is for. If a parent or child needs money, make sure the reason adds up. Is it to pay off debt? Is it a one-time bill? Recurring bills? Did they lose a job? Is it gambling or drug addiction? Takeaway: This conversation is not easy, but it is your right. [bctt tweet="Why is a loved one asking you for money? You have every right to know before you give. Learn more in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning" username=""]

Question #3: Is there another alternative?

Why would you want to seek out other alternatives? Maybe they can handle the financial problem on their own. Maybe you can help them create a spending plan and empower them to pay off their own debt/bills. Throughout my life, I have donated time to the church to help folks who are in debt. I have taught Dave Ramsey’s Financial Peace University for many years. I take on pro bono cases on occasion to help people get out of debt. Takeaway: Many people can tackle their debt head-on with the right help. Why else do you want to look for an alternative? Listen to hear another reason!

Question #4: How can you set boundaries?

It is not a good idea to give loans to loved ones. Whatever you do should be a gift. Why? What if they cannot pay you back? What if they do not pay you back? What if you see them making poor decisions with the money? It will damage the relationship and that is not worth the risk. If the loved one needs recurring money—and it is not a one-time gift—figure out what you can afford to give regularly (that your spouse agrees with). This will protect your short and long-term plan. And your loved one knows what they are getting. It prevents your loved one from coming back to you to ask for more. What other boundaries do I recommend you set? When is it okay to say no? Listen to the whole episode to learn more! [bctt tweet="If you give a loved one money, how can you set boundaries? Listen to this episode of Best in Wealth to hear my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning" username=""]

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Three BIG Questions to Ponder, Ep #201

Fri, 05 Aug 2022 05:00:00 -0500

Have you heard of George Kinder? He is a well-known life planning expert. When it comes to retirement planning, it is not all about the money. The hard part is figuring out what is important. George has come up with three big questions that I want everyone to think about. Each of the questions is tough to answer. It will take meditation, prayer, time alone, and conversations with your loved one(s) to answer these questions. Do not miss this deep and introspective episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth, I’ll share George Kinder’s 3 BIG questions and how they’ll impact your life! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:07] You never know where life will take you
[2:55] Three big questions to ponder about your future
[6:31] Question #1: What would you do if you could do anything?
[9:44] Question #2: What would you do if you were given an end date?
[12:48] Question #3: What would you do if you had one day left?

Question #1: What would you do if you could do anything?

Imagine that you are financially secure and you can do whatever you want. How would you live your life? Would you change anything? Would life stay the same? Give yourself some time to get deep in thought and imagine what you would want your life to look like. Describe a life that is everything that you desire. How will you live out the rest of your life if money is n0t a factor? Many people march hard toward financial independence as if it is the finish line—but it is only a goal. You still have a life to live. And if you’re reaching financial independence sooner rather than later, you have more life to live financially free. Describe a life that is richly yours. [bctt tweet="What would you do if you could do anything? This is one of the three important questions I ask in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Question #2: What would you do if you were given an end date?

Imagine you visit the doctor and you are told you only have 5–10 years left on earth. You will remain healthy and productive. You will not feel sick but your time is restricted. What will you do in the time you have remaining? This question forces you to think about the end of your life and helps you narrow down how you really want to spend your final years. Those become your priorities.

Question #3: What would you do if you had one day left?

You just found out that you have one day left to live. What will you regret the most? What will you miss? What did you regret not being or doing? What relationship did you not have time to mend? What are all the things you wish you would have done differently? In the end, money does not matter. If you do not know what is truly important to you, you will not live a life of complete fulfillment. Question #1 focuses on designing the life you want to live. Question #2 is about narrowing down what is truly important. Question #3 makes you realize you need to seize the day. Do what you need to do to live a fulfilled life. How are YOU answering these three questions? [bctt tweet="What would you do if you had one day left? If you think about this answer and are filled with regret, don’t miss this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The FIRE Movement Retirement Strategy, Ep #200

Fri, 22 Jul 2022 05:00:00 -0500

The book “Your Money or Your Life” by Vicki Robin was the book that is credited with launching the FIRE Movement. FIRE stands for “Financial Independence, Retire Early.” The FIRE Movement has exploded and become popular among Millennials. So what is the FIRE Movement? In this episode of Best in Wealth, I will share the three non-negotiable rules and three variations of the FIRE Movement. Do not miss it! [bctt tweet="What is the FIRE Movement retirement strategy? Learn all about it in this episode of Best in Wealth! #wealth #retirement #investing #EarlyRetirement #RetireEarly #FinancialPlanning #RetirementPlanning #WealthManagement #FIREMovement" username=""]

Outline of This Episode

[1:01] Best in Wealth reaches 200 episodes!
[3:38] What is the FIRE Movement?
[10:35] The variations of the FIRE Movement
[15:03] The three non-negotiables of the FIRE Movement
[18:22] Do you want to become part of the FIRE Movement?

What is the FIRE Movement?

FIRE is the retirement movement that takes aim at conventional retirement (retiring at age 65). It is all about finding a way to retire early. Those who adhere to the FIRE Movement dedicate a majority of their income to savings, with the hope they can quit their full-time jobs and live off of small amounts of their retirement portfolio for decades. You might quit your job, switch to part-time, or retire entirely. FIRE followers are proponents of an extreme saving lifestyle—up to 70% of their yearly income. But can you imagine saving that much? You need your savings to reach 30x your yearly expenses. Let’s say that number is $1 million. That gives you a little over $33,000 to spend each year. But you want to keep investing and growing that money. If you are 40 years old with $1 million, you will need to live off of 4% of the income each year. That is only $40,000. If you think about the 4% rule, adjusting for inflation, there is a high probability that you will make it through a 30-year retirement without running out. That sounds great, right? So what is the issue? If you need to make the money last more than 30 years, 4% might not be the way to go. Maybe you need to operate closer to 3%. But this all depends on your desired lifestyle. You need to track how much you are spending and make sure you do not overspend in retirement. The same holds true for any retiree. You need to do everything you can to drive your expenses down to reach financial independence to retire early. This requires extreme diligence to monitor expenses and remain dedicated to saving. [bctt tweet="What is the FIRE Movement? Can it really help you retire early? Find out in this episode of Best in Wealth! #wealth #retirement #investing #EarlyRetirement #RetireEarly #FinancialPlanning #RetirementPlanning #WealthManagement #FIREMovement" username=""]

The three non-negotiables of the FIRE Movement

So what are the three rules anyone following the FIRE Movement must adhere to?

A detailed plan: Anyone that wants to retire successfully must have a plan. According to the Board of Governors of the Federal Reserve System, 1 in 4 Americans has nothing saved for retirement. That is why you need a plan.
Economic discipline: To achieve a FIRE retirement, you have to maximize your income while minimizing expenses. If you want to retire by 40, you have to take extreme measures to succeed. Everyone can benefit from making and sticking to a spending plan while saving as much as possible.
Wise investment: No one can achieve a secure retirement without investing their retirement savings. People who adhere to the FIRE Movement invest large portions of their income. They need their money to work for them for 30+ years. You need a plan that is highly diversified with strategic planning that gives you the greatest chance to succeed.

But what if this lifestyle does not work for you? You are in luck—there are three variations of the FIRE Movement that may be a better fit for you!

The three variations of the FIRE Movement

Fat FIRE: You are an individual with a traditional lifestyle who aims to save substantially more than the average worker but you do not want to reduce your current standard of living. You are not concerned with reaching financial independence as quickly as possible. You still want to enjoy your life—while still saving at a high rate (maybe closer to 30%).
Learn FIRE: This requires stringent adherence to minimalist living and extreme saving. This lifestyle is extremely restrictive. If Learn FIRE is for you, you will have to live on $25,000 or less per year. That is only $2,000 a month. But if you make $10,000+ a month, think how quickly you could reach financial freedom.
Barista FIRE: Folks in this subset want to exist between the two choices. If this is you, you want to retire as quickly as possible so you are saving at a high rate. But what makes you different? You are okay with working a bit once you quit your traditional 9–5 job. That may look like a combination of part-time work and living off of your savings to obtain the lifestyle you desire.

Listen to the whole episode to learn three things you need to be careful of if you decide to adhere to the FIRE Movement! Do you think it could work for you? [bctt tweet="In this episode of Best in Wealth, I share three variations of the FIRE Movement. Find out which one could work for you—listen now! #wealth #retirement #investing #EarlyRetirement #RetireEarly #RetirementPlanning #WealthManagement #FIREMovement" username=""]

Resources Mentioned

“Your Money or Your Life” by Vicki Robin
Board of Governors of the Federal Reserve System
How to Retire Early with FIRE

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The 6 Traits that Make You a Smart Person, Ep #199

Fri, 08 Jul 2022 05:00:00 -0500

The 6 Traits that Make You a Smart Person, Ep #199 What are the 6 traits that make you a smart person? Why is it important to exhibit these traits? “Smart” used to mean having access to information or memorizing endless facts and figures. That is an outdated belief. I believe that smart, ambitious, and hard-working people focus on soft skills. In this episode of Best in Wealth, I will share the 6 traits I think define a smart person. [bctt tweet="What 6 traits do I believe you need to master to be “smart?” Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:10] Surround yourself with smart people
[2:58] What does it mean to be smart?
[5:48] Trait #1: The ability to read the room
[8:25] Trait #2: Fast decision-making
[10:59] Trait #3: Learn to save time
[14:35] Trait #4: The power of self-awareness
[16:22] Trait #5: Personal responsibility
[18:15] Trait #6: Remove ego from leadership
[20:21] Memorization and access to information

Trait #1: The ability to read the room

Can you tell if someone loves you OR cannot stand you? The ability to read a room and assess how individuals are acting around you is paramount. If you can read a room, it allows you to better develop relationships and avoid conflict. The best part is that this is an acquired skill that anyone can learn. Learning to read body language and facial expressions helps you know where you stand. I have seen too many college-aged kids who act like they know everything but if they could read the room they were in, they would not be so confident. They would be better served spending more time building relationships.

Trait #2: How to make decisions quickly

The average person is a slow-moving dinosaur. If you ask them to make a decision, they hesitate, get overwhelmed, call their husband or wife, and need days or weeks to think something over. It is a slow process in an unforgivingly fast-paced world. If you cannot make a decision quickly, someone else will make it for you. Tim Ferriss uses a pros/cons list to make every decision. Write down your options then use logic, your gut, and courage to make a decision. Remember, not making a decision is still a decision. You cannot be afraid to make decisions quickly and make mistakes. Why? In the book, “Creativity, Inc.” Ed Catmull talks about failing fast and early. Make mistakes now so you get better with decision-making as time goes on. [bctt tweet="Can you make decisions quickly? This is a trait I believe is important to master. Find out why in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Trait #3: Learn to save time

No one has the time to spend on everything they need to do and know. Thanks to technology, people who can save us time are valuable. It is why we buy online courses. They bring information together in an easily digestible format so you can take it in quickly. You can dig deep and find the scattered information and bring it together—but it costs you time. There are apps, courses, and systems for organizing and doing. Leverage them to your advantage.

Trait #4: The power of self-awareness

Reflect on your strengths, flaws, and everything in-between. Knowing yourself lays the foundation to build these traits. People, books, and courses can help you get there. My go-to resource is “The 7 Habits of Highly Effective People.” How do you become more self-aware? Write down your beliefs. Write down your values. Spend time auditing yourself against your standards and be truthful.

Trait #5: Personal responsibility

Own your responsibility and do not place the blame on others. The victim mentality is epidemic. Institutions and governments have taught us all to be victims and think we have been oppressed based on petty human traits. And when you live as a victim, you blame all of your problems on someone else. You live without accountability. You will never be strong if everything is someone else’s fault. But there is always something you can do. Stop outsourcing your happiness to excuses. If you own your problems—even if you did not create them—you unlock personal power and reach a level of success in life that most normal people could not dream of. [bctt tweet="Personal responsibility. Personal responsibility is something that every “smart” person owns wholeheartedly. Find out why I believe this so strongly in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Trait #6: Remove ego from leadership

You have to be proactive and responsible. You have to care for and serve your subordinates, customers, readers, and family. People celebrate mediocrity. They want to be seen doing the right thing but do not follow through. They give fake compliments. They obsess over status and job titles. People brag about how much money they are making. The so-called “desirable traits” defined by modern leadership exist to feed your ego and make you feel special. What is real leadership? Listen to hear my thoughts.

Resources Mentioned

You Just Don’t Understand by Deborah Tannen
That’s Not What I Meant! by Deborah Tannen
Creativity, Inc. by Ed Catmull
David Allen’s “Getting Things Done®” methodology
The 7 Habits of Highly Effective People by Stephen Covey

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Timing the Market? Here’s What It’ll Cost You, Ep #198

Fri, 24 Jun 2022 05:00:00 -0500

As most of you know, inflation is high—higher than expected. Things do not look good in the news. Things do not look good in our portfolios either. As humans, when we feel like we are losing, we get the urge to sell our investments, sit on the cash, and wait on the sidelines for the news cycle to get better. It is natural and normal to feel nervous. The thought of selling everything likely crosses everyone’s mind. In 2020, the market dropped 37%. When it was down around 20%, one of my clients sold everything and went into cash. They said there was no way the market was going to recover. But no one tells you when to get back in. No one knows when to get back in. So what does it cost you? I did some research and tried to answer that very question in this episode of Best in Wealth. [bctt tweet="Trying to time the market? Find out what that could cost you in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:10] Trying to cultivate a perfectly curated lawn
[6:33] The cost of trying to time the market: Statistics
[8:44] What if you missed the best week?
[12:56] What if you missed the best month?
[14:03] What if you missed the best 3 months?
[15:22] What if you missed the best 6 months?
[17:48] What is the best thing you can do?

Analyzing a hypothetical investment over the last 25 years

Let’s say you had a hypothetical $1,000 that you invested in the Russell 3000 in 1997—25 years ago. The Russell 3000 is broadly diversified with large, mid-size, and small US companies within it. What would it look like now? If it were an actual investment, that $1,000 would be worth $10,367. Pretty cool, right? That investment lived through Democrats and Republicans being President. It lived through wars, the dot-com bubble, great recessions, the housing market crash, and much more. Even though you occasionally thought about selling, you stayed disciplined and remained in your investments.

What if you missed the best week?

But what if you decided to remove your investments from the market and sideline them for a period of time? If you missed THE very best week in the last 25 years, what would you have? The best week was the week ending November 28th, 2008. This week was in the midst of the great recession. No one would have guessed that this would be the best week. If you pulled out of the market, your investment would be down 17%, at $8,652. Think of that impact. You have 17% less than you deserve. [bctt tweet="What if you missed the best week in the stock market in the last 25 years? I dissect a hypothetical investment to share a stark truth in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning" username=""]

What if you missed the best month?

The best month in the last 25 years ended on April 22nd, 2020, the beginning of the pandemic. Stocks had already started declining in February. The news was not good. If you pulled your money out for that month, you would have 20% less—$8,279.

What if you missed the best 3 months?

The best 3 months in the stock market in the last 25 years were the 3 months ending June 22nd, 2020, during the pandemic. That is when someone I knew pulled their money out of the market. They missed a chunk of the very best 3 months if not all of it. The market shot up. If you pulled out of the market and missed the best 3 months, you would have 30% less: $7,308.

What if you missed the best 6 months?

The best 6-month period ended September 4th, 2009. The market hit bottom at the end of March and was down 53%. Your $1 million was now $500,000. Would it not feel smart to pull your money out? No one knew it was the bottom of the bottom. You had all the reason in the world to let your emotions get the best of you and sell out. So what would have happened if you had sold out during these 6 months? The BEST 6 months in the last 25 years? Listen to this episode to find out what it would have cost you. [bctt tweet="What if you pulled your money out of the stock market during the best month, 3 months, or 6 months in the last 25 years? Find out what that could’ve cost you in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning" username=""]

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

The Basics of Tax-Loss Harvesting, Ep #197

Fri, 10 Jun 2022 05:00:00 -0500

We are set to have one of the worst weeks in the stock market in a long time. The stock market was down over 20% the day this podcast was recorded—in bear market territory. We cannot control the market, no matter how much we would like to. But something that we can control—to some extent—is tax-loss harvesting. What is it? How can it help you avoid paying excess taxes? Learn what you need to know in this episode of Best in Wealth. NOTE: I am not a CPA and this is not formal tax advice but purely informational. Please contact a CPA or reach out to Fortress Planning Group for professional advice. [bctt tweet="What is tax-loss harvesting? Learn the basics in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Taxes" username=""]

Outline of This Episode

[1:11] Can you boycott financial news for 30 days?
[4:28] So just what is tax-loss harvesting?
[8:03] Two ways tax-loss harvesting helps manage taxes
[11:40] Two kinds of gains when you sell investments
[13:28] Gains and losses in mutual funds
[15:59] The details on wash-sale rules

So just what is tax-loss harvesting?

Tax-loss harvesting can only be conducted in a taxable account—not a retirement account. You can make as many trades as you want in an IRA and it will not impact your taxes today. But if you have an account other than your retirement accounts, you have to pay taxes on dividends you receive. You are obligated to pay taxes when you sell an investment and have a gain and when a mutual fund sends out a distribution. Tax-loss harvesting can help you reduce taxes now and in the future. How? Tax-loss harvesting allows you to sell investments when they are down, replace them with something similar (but NOT the same), and offset the gains you might have with the losses you are realizing now. The result? Less money goes to taxes and more stays invested and working for you. [bctt tweet="Learn what you need to know about tax loss harvesting in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Taxes" username=""]

Two ways tax-loss harvesting helps manage taxes

The first way is that losses can be used to offset gains: If you sell an investment and see $10,000 worth of losses, you can buy something similar to stay in the market. But it cannot be the same or you will not see the benefit of the loss. Now you have $10,000 worth of losses on the books. At some point in the year, other investments spit out dividends or gains. If any gains equal $10,000, they can be offset. No taxes for you! Or, the losses can offset $3,000 worth of income on a joint tax return in one year. If you realized $10,000 worth of losses and you do not have dividends, gains, or profit from sales, you can use $3,000 to offset $3,000 of income from your job or an IRA distribution. The other $7,000? You can carry it into the next year and the next year until it is depleted.

Two kinds of losses when you sell investments

There are short-term losses and long-term losses. Short-term losses are losses you realize from a sale of an investment that you have owned for less than one year. Long-term losses are losses that are realized after selling investments that you have held for more than one year. The rate at which they are taxed is different. Short-term gains are taxed as income at your regular tax rate. The top margin of federal tax is 37% for high-income earners. The net investment tax income adds 3.8%—adding up to 40.8%. State and local income taxes can put you in tax rates in excess of 50%. Long-term capital gains tax is significantly lower. If your taxable income is $80,800 or less, you won’t be taxed on long-term capital gains. If you make up to 500,000, the tax is around 15%. If you make above $500,000, long-term gains are taxed at 20%. How do gains and losses work with distributions from mutual funds? How does the “wash-sale rule” apply? Listen to the whole episode to learn more! Please note, while you can do tax-loss harvesting yourself, many people who try their hand at tax-loss harvesting do it incorrectly. Tax-loss harvesting needs to be incorporated into your year-round tax planning and investment strategy. [bctt tweet="There are two kinds of gains when you sell investments and each is taxed differently. Learn what this means for tax-loss harvesting in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Taxes" username=""]

Resources Mentioned

Best in Wealth Episode #195
Best in Wealth Episode #196

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Don’t Let Recency Bias Destroy Your Retirement, Ep #196

Fri, 27 May 2022 05:00:00 -0500

Has recency bias affected your investment decisions, now or in the past? The Schwab BeFi 2021 study found that recency bias is the most common behavior that advisors believe impacts clients’ decision-making. 78% of Millennials, 75% of the Silent Generation, 74% of Gen X, and 56% of Baby Boomers suffer from it. But what is recency bias? Why does it matter? What can you do about it so it does not ruin your retirement? On May 20th, 2022, we hit bear market territory—a 20% drop from the S&P 500’s high. It has a lot of people concerned. But should it? In this episode of the Best in Wealth podcast, I cover what recency bias is and how to keep it from derailing your retirement. [bctt tweet="Recency bias can destroy your retirement if you let it. Learn how to keep that from happening in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Bias #RecencyBias" username=""]

Outline of This Episode

[1:45] Being a Milwaulkee Bucks fan
[4:17] What is recency bias?
[8:06] Two reasons why recency bias is a problem
[10:57] The cost of chasing hot investment trends
[12:22] How to combat recency bias
[18:42] Takeaways from this episode

What is recency bias?

Recency bias is the tendency to place too much emphasis on experiences that are fresh in your mind—even if they are not relevant or reliable. It is when you make decisions based on recent events, expecting that those events will continue. Recency bias can lead to irrational decisions. But recency bias can be hard to avoid. Have you watched Jaws? If you watched the movie last night, would you want to swim in the ocean today? The answer was a big “no” for me. But when I was in Florida over spring break, I swam in the ocean every day. The movie was not on my mind. But if I had just watched it the night before, chances are I would not go in the ocean either (even though the risk of being attacked by a shark is minuscule). [bctt tweet="What is recency bias? How can it impact your retirement portfolio? Learn all about it—and how to avoid it—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Bias #RecencyBias" username=""]

Two reasons why recency bias is a problem

In February and March of 2020—in less than two months—the S&P 500 dropped 19.9%. It hit bottom. But because the market bottomed out, it triggered new money into the stock market—over $1 trillion. I have started investing money that I have had on the sidelines because I know that now is a great time to invest. Why? Because the stock market is down and many people are fearful. Also, because in April and May of 2020, the S&P 500 shot up 18%. If you sold out of the stock market in March 2020 and lost thousands of dollars, you probably watched the S&P 500 climb almost completely back to where it was. You likely felt burned by the stock market. Recency bias is what led you to deviate from your investment plans, which likely had damaging effects and long-term consequences on your retirement plan.

How to combat recency bias: focus on the long-term

My goal is to help my clients see a different perspective and focus on how markets move over time. A long-term focus is always in your best interest. You will always see short-term upticks and downticks. The reality is that the market averages a correction (a 10% drop from its high) at least once a year. A bear market happens a couple of times a decade. During the rebalancing process, we illustrate which investments have fared well and those that have fared poorly. We invest in asset classes that are doing the worst but snap back the most. In 2020, we saw great success with this strategy in small value and real estate. We continuously educate our clients to avoid impulse decisions. What else can you do to combat recency bias?

Limit your daily news intake and avoid being frightened by flashy headlines
Agree on an amount of time to wait before making investment decisions
Focus on meeting goals rather than individual return figures
Work with a financial advisor to create an investment policy statement

Remember, the market averages one down year every four years. Not all downturns lead to down years. In 2009, we saw a 27% downturn but the market ended the year up 28%.In 2010, we were down 16% and ended up 17%. Listen to the whole episode for a solid reminder that recency bias is dangerous—but it can be avoided with the right mindset. [bctt tweet="How do you combat recency bias? I share some strategies in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Bias #RecencyBias" username=""]

Resources Mentioned

BeFi Barometer 2021

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Should You Buy I Bonds? Ep #195

Fri, 13 May 2022 05:00:00 -0500

What is an I bond? How do you buy an I bond? What are the risks? Are there risks? Who should buy I bonds? I bonds are a hot topic in the news because of the staggering high interest rates. So in this episode of Best in Wealth, I will answer these questions. I will help you decide if you are the right person to buy I bonds. Listen to learn more! [bctt tweet="Are I bonds a good investment? Should you buy some? Listen to this episode of Best in Wealth to hear my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Ibonds" username=""]

Outline of This Episode

[1:13] Control what you CAN control
[6:23] What is an I bond?
[10:40] How to buy an I bond
[13:17] The risks of buying I bonds
[19:00] Who should buy an I bond
[21:17] What are the alternatives?

What is an I Bond?

“I bonds” is just another name for Series I savings bonds. The interest rate on Series I bonds is indexed to inflation. The rate changes every six months based on the previous six months' change in inflation. It resets every May and November. The current interest rate is 9.62% which is extremely attractive. If you were to take advantage of the annualized rate of return, you would want to buy them now. You would be locked in at 9.62% for six months. Inflation has been high, so we expect it to be high but will it continue to be? Will it be higher, or lower? I bonds can protect you from inflation, be used as supplemental retirement income, and can be given as gifts. They are subject to federal taxes. However, they are protected from state and local taxes. You can cancel them after one year. However, if you cancel them before holding them for five years, you lose the previous three months of interest. If I bought an I bond today and cashed it out in 18 months, I would only get the first 15 months worth of interest. But that 9.62% interest rate is attractive, right? [bctt tweet="What is an I Bond? Is it a good investment? I share what they are and who would be a good candidate to buy them in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Ibonds" username=""]

How do you buy an I bond?

If you wanted to purchase an I bond before tax season, you can use your tax refund to purchase I bonds. You would have been issued paper series I bonds, which you are limited to purchasing up to $5,000 per calendar year. You would have filed form 8888 and submitted it with your 2021 tax return. But most people do not buy them this way. How do they buy them? I bonds are available for purchase electronically, up to $10,000 per calendar year. You need to open an account with Treasury Direct. Once you do so, you will be able to buy and manage all of your bonds purchased from that account. Children under the age of 18 cannot open an account or purchase bonds but a parent can open an account and link it to their account and conduct transactions on behalf of the child.

The risks of buying I bonds

Is there a risk to this investment? I bonds need to be actively managed. If you buy them at the attractive 9.62% rate and inflation falls off a cliff (it eventually does), where does that leave you? The federal government does everything it can to control inflation by raising interest rates. If you are not managing your I bonds well, you can be stuck with low interest rates. At that point, online savings accounts may pay better interest than an I bond. In most brick-and-mortar banks, you will earn about a whopping 6 cents on your $50,000. You might be earning 0.4 or 0.5% with an online bank. As interest rates go up, brick-and-mortar banks are slow to react. Online savings accounts—which are also insured by the FDIC—react faster, letting you earn a higher interest rate. Even if you are managing your bonds—and achieving over 9%—what will it reset to in six months? When I look at historical rates, the last couple of resets looked good. It is about an annualized rate of 4%. But when you look back to 1998, I see very few instances where you would be earning much of an interest rate over 1%. I have even seen some negative rates. So who should buy an I bond? What makes you a good candidate? Listen to the whole episode to learn who should—and who should not—buy I bonds. [bctt tweet="Is buying an I bond a risky investment? I share my thoughts in this episode of the best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Ibonds" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

To Buy or to Lease? How to Choose the Right Option for You, Ep #194

Fri, 29 Apr 2022 05:00:00 -0500

Replacing an automobile is an inevitable and recurring life event. Many of my clients struggle with the question—buy or lease? If you buy, should you buy new or used? What would Dave Ramsey say? He does not want you to borrow money, lease a car, or even buy a new car. Do not get me wrong, I love being able to pay cash for a car. But I have been in situations where I have been presented with 0% or 0.9% financing. I went to a dealership with cash and was told if I got a loan—even for 3 months—I would get a percentage off the car. The bottom line is that the preferences and needs of each individual must be considered along with the overall costs. Many competing factors bear differing degrees of importance. Fortress Planning Group has a flowchart to cover the key things to consider: cost, cashflow, mileage, safety, technology, depreciation, and flexibility. In this episode of Best in Wealth, I want to help you identify the best course of action for you. Let’s walk through the questions you need to consider to make an informed choice. [bctt tweet="Should you buy or lease a car? In this episode of Best in Wealth, I walk through the variables you should consider to make the best choice for YOU. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #lease #NewCarSmell" username=""]

Outline of This Episode

[1:29] Did you buy your kids a car?
[4:30] Should you buy or lease a car?
[6:46] Factors to consider when making the decision
[8:55] When you should consider leasing a car
[11:32] When to consider buying a new car
[15:55] When to consider buying a used car
[18? Revisiting the pros and cons of each option
[20:04] What is the most important thing for you?

When you should consider leasing a car

Many people are working from home because of Covid. People are traveling far less. If you like a new automobile every few years and you don’t drive a significant number of miles, you could consider leasing. Secondly, are you a business owner? You may be able to deduct leasing and operating costs associated with the business use of your vehicle. It can be done on a per-mile basis or you can break down your costs—the lease that you are paying, the depreciation, the gas, and the maintenance. Leasing offers several advantages, including a short-term commitment, warranty coverage, and temporary use of a depreciated asset. The worst part about a new car is that the moment you drive it off the lot, depreciation sets in. Do you drive a significant number of miles each year? If yes, then leasing—even with a high mileage lease—may not be advisable due to mileage limits and the expensive per mile overage and wear and tear fees. You have to consider your driving habits when you make a choice. [bctt tweet="When should you consider buying a new car versus a used one? I share some variables to consider in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #lease #NewCarSmell" username=""]

When to consider buying a new car

If safety is a large deciding factor, consider buying new. Safety features and technology quickly become obsolete. I bought my wife a brand new Subaru Outback a couple of years ago. The safety features are considerably different from my 2015 vehicle. But if new safety features and the “new car smell” are not a big deal, do you want flexibility in how long you keep it and what modifications you can make? If you want flexibility, explore financing options that work for your budget, including paying cash or low financing rates. There are many options out there. I bought a minivan when my two youngest were little. I thought I was buying that van with cash but it was better financially to get a loan and pay it off six months later. Do not be afraid to explore financing options when you buy new—but stick with your budget. If you are building wealth—already have an emergency fund, are contributing 15% to retirement, and are debt-free—then you can consider splurging on a new car.

When to consider buying a used car

If you want to minimize the immediate costs of deprecation and minimize the purchase price, buy used. Take advantage of the depreciation that has already occurred. There are plenty of vehicles you can buy that are just a couple of years old. I am driving a vehicle that I bought in 2015 that was brand new in 2014. I may not get that brand new car smell but I sure saved a lot of money. It was a point in my life where my company was still getting off the ground. I was not in the position to buy a new car. If you have other debt or want to retire in five years, do not buy a new car. On the flip side, if you are just getting started in the workforce, do not buy the new car when you could buy a perfectly fine used car and start investing in your Roth IRA. I dissect more of the pros and cons of leasing, buying new, and buying used in this episode of Best in Wealth. If you’re in the market for a new—or new-to-you—vehicle, do not miss this one! [bctt tweet="When should you consider buying used, new, or leasing a car? I share the factors you need to consider to make the right choice for you in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Buy or Lease a Car Flow Chart

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Teach Your Kids that Investing is NOT a Game, Ep #193

Fri, 15 Apr 2022 05:00:00 -0500

As a family steward, it is not only important to teach your kids how to invest—but that investing is not a game. With the surge of meme stocks that have gained cult-like popularity, it is easy to get caught up in the rat race. But buying one-off stocks is not the role of a family steward. So what does good investing look like? What should family stewards avoid when it comes to investing? Listen to this episode of Best in Wealth to hear my thoughts! [bctt tweet="Investing is NOT a game—so why are people investing in meme stocks? Learn how to teach your kids that they must invest carefully in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] Being a family steward is hard
[4:58] The popularity of meme stocks
[10:40] Why individuals cannot beat the average ROR?
[15:32] What good investing looks like
[18:28] Your job as a family steward

The rise of meme stocks

Have you heard of meme stocks? Meme stocks refer to shares of a company that have gained a cult-like following online through social media platforms. They can also be defined as shares of a company that has seen a recent surge in viral activity, fueled by platforms like Reddit and Twitter. The viral nature prompts retail traders to buy the stock with the knowledge that its share price will likely rise. GameStop was—and still is—the most popular meme stock. We have been conditioned to see these investors in opposition to Wall Street. They want to “Stick it to the man.” But retail investors and Wall Street actually have a lot in common. They both want to beat the market. They want to buy low and sell high. But Wall Street stands to make a lot of money off of meme investors because of trading costs. Many companies offer free trades. However, there are other costs involved. When was the last time Wall Street gave anything away for free? It is all a spin. A long-term investment strategy has little to do with picking the right stocks and everything to do with investing in human ingenuity. Human ingenuity is the engine that drives the stock market. The anti-wall street revolution is not meme investors. It began in academia in the 1960s and evolved into the formation of index funds. The first retail index fund came on the market in 1975. The academics found no compelling evidence that any individual can consistently beat the market, which averages a 10% return per year. [bctt tweet="What does the rise of meme stocks teach us about investing? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Why individuals cannot beat the average rate of return (RoR)?

But why do individuals have such trouble beating the average RoR of 10% per year? In transparent stock markets, enormous numbers of buyers and sellers come together to trade. Each side has to feel like they have received a good deal, right? If someone sells me Apple stock, they think selling is the right thing to do. I think buying is the right thing to do. If people did not feel like this, they would not trade. But no one knows the real intrinsic value of any company at any given time. There are too many factors to consider. That is why we say stocks are priced fairly. If you or your child bet on individual stocks, you might win—but you might lose. And you are unlikely to harvest better returns than if you invested in the whole market. That is what your kids need to learn. Markets respond to all new available information that comes in every day. The new price reflects the new information that just came out. Nobody knows when a stock will go up or down. It is a fact everyone needs to acknowledge. This is contrary to what Wall Street and meme investors want you to think. There is no algorithm to predict the future. When Wall Street or meme investors want to capitalize on pricing, they are betting against human ingenuity: the millions working hard to maximize the value of their company. I do not call what they are doing investing. At best it is speculation but in truth, it is gambling.

What good investing looks like

At Fortress Planning Group, we use history and academia to tilt our portfolios into areas that have proven to give us better returns when held for long periods of time. We stick around during the good times and bad times. Buying the market—a highly diversified portfolio of thousands of companies—is not picking stocks. It is investing in human ingenuity to maximize the value of public companies. They adapt to improve products. They create new processes. They solve problems. While we cannot predict what any one person will do on any day, we can predict that humanity will persevere. The stock market reflects this simple truth. This is the heart of our investment philosophy. Listen to the whole episode for some sage investment advice. [bctt tweet="What does good investing look like for a family steward? I share my thoughts—from years of experience—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

3 Types of Retirement: Which One is Right for You? Ep #192

Fri, 01 Apr 2022 05:00:00 -0500

We are all used to traditional retirement—save money and fully retire when you hit retirement age. But did you know that there are two other types of retirement? The other two types may even have a better impact on your mental health and sense of purpose in your retirement years. In a black and white world, multiple answers do not exist. But sometimes there is more than one right answer. In this episode of the Best in Wealth podcast, I will share the three types of retirement and help you think through which one is right for YOU. [bctt tweet="Did you know there are 3 types of retirements? Learn which path is right for you in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:15] Can you live in the gray instead of black and white?
[3:48] How retirement impacts your sense of purpose
[9:22] The three different types of retirement you can consider
[17:42] Plan your finances according to your chosen type of retirement

How retirement impacts your sense of purpose

Most of us are working hard now so that someday we do not have to worry about working. Retirement is viewed as a time of freedom. It is when you have the opportunity to do whatever you want with your time. Research has shown that retiring can lead to gains in satisfaction and decreases in depression. However, research has also shown that retirement reduces an individual's sense of purpose. When you work, you are contributing to society and people are counting on you. When you leave, you may feel less purpose. We often forget about this aspect of retirement. Individuals who do have a career with a sense of purpose need to consider how they will replicate this feeling in retirement. I check in with my retired clients regularly to see how retirement is going. Why? Because many new retirees experience an initial heightened sense of emotions—i.e. the honeymoon phase. After that feeling wears off, they feel like they are lacking a sense of purpose.

Socioeconomic status and its impact on purpose

An article entitled, “The Effects of Retirement on Sense of Purpose in Life: Crisis or Opportunity?” explored the question: Does socioeconomic status have an impact on one’s sense of purpose after retirement? The authors found that retirement had a positive impact on the sense of purpose of individuals with low socioeconomic status. It seems backward, right? But many of those with a low socioeconomic status did not have jobs that provided a sense of purpose in the first place. How could they lose a sense of purpose they never felt? Being free of an unsatisfying job to pursue meaningful activities improved their sense of purpose—even if it means living with a reduced income. [bctt tweet="How does socioeconomic status impact one’s sense of purpose in retirement? Listen to this episode of Best in Wealth to hear the surprising results of a study. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The three different types of retirement

In his article, “3 Types Of Retirement And Their Very Different Savings Strategies,” Michael Kitces describes three different types of retirement. Which one resonates with you?

Traditional retirement: You save early and often. Your socioeconomic status is probably average or high. You invest prudently for growth and retire as soon as able. If you grow your portfolio fast enough, you can even retire early. Your time in retirement is filled with leisure or volunteer work. You are not thinking about earning more money. Will you still feel a sense of purpose?
Semi-retirement: Work is scaled back but not eliminated. This might include starting a new business or career, becoming a consultant, or working part-time. Semi-retirement means retiring from a full-time job but not from any work. You likely need ongoing paid work. This helps lend personal fulfillment. It also provides substantial ongoing financial assistance. If you are thinking of semi-retirement, you can reach this earlier than traditional retirement. I work with clients who have retired and switched to consulting for the same company they had worked full-time for.
Temporary retirement: These are sabbatical breaks that occur after which you return to the working world, either in a new job or career track. The retirees in this category actually never retire. Instead, breaks are dispersed regularly throughout productive years. Have you taken a sabbatical before then started a new career path? These people are recharging their batteries throughout life. Retirement years would be shortened as they have been redistributed into earlier years of life. What a different way to frame retirement.

If you want to keep your sense of purpose, a series of temporary retirements throughout your career or a semi-retirement can improve your overall well-being. You want increases in life satisfaction, decreases in depression, and to maintain your sense of purpose. Learn more about how to determine which path is right for you in this episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth, I share the three different types of retirement and help you think through which type is the best for you! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Retirees: You Might Be Able to Spend MORE Money, Ep #191

Fri, 18 Mar 2022 05:00:00 -0500

I read an article in Barron's entitled, “Retirees Aren’t Spending Enough of Their Nest Eggs. Here’s Why.” Why are people not spending enough? Should retirees be spending more? How do you figure out how much you can spend? In this episode of Best in Wealth, I talk about sequence of return risk, the Bengen Rule, and how you can live your best life in retirement—by spending more. [bctt tweet="Retirees: You might be able to spend MORE in retirement. Learn how in this episode of the Best in Wealth Podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:26] Making financial decisions in the context of your life
[5:32] You probably will not spend enough in retirement
[8:34] Understanding the sequence of return risk
[12:48] What happens when you follow the Bengen Rule
[16:48] How to live your best life in retirement
[23:23] Why everything comes down to planning

You probably will not spend enough in retirement

That statement seems odd, right? Don’t most people overspend? The truth is that you can probably spend more in retirement than you are going to. A couple came to Fortress Planning Group a few weeks ago. Their financial advisor had developed a financial plan and told them they had a 90% probability of being able to retire in three years. They walked through the plan. The advisor shared what things would look like at the end of their plan—if the wife lived until 94 and the husband lived until 92. He estimated they would have millions of dollars left. He told them that’s what made the plan 90% probable. The couple looked at each other and said, “I think we want to retire much earlier—why not today?” Their advisor quickly told them their probability of success would decrease significantly. They came to me for a second opinion.

Understanding the sequence of return risk

It is usually my goal to help clients avoid overspending. Most people nearing retirement are concerned they will not make it through retirement. That is why advisors need to explain the potential downsides of sequence of return risk to permanently reduce a client’s safe spending rates for the remainder of their retirement. What does that mean? If my couple has millions of dollars left, why are they not taking out more now? Why don’t they take out 7%? If their average return is around 9%, why can they not take out 9%? Because of sequence of return risk. Let’s say you have $1 million. You want to leave your kids money when you die but they do not need millions. So you are going to take out 7% per year. Let’s say year one is a bad year and your portfolio decreases 25%. That’s $250,000 you’re losing on paper. At the end of year one, you’re left with $680,000. Year two was also poor. Your portfolio is down another 15%, and at the end of year two, you are left with $480,000—less than HALF of what you started with. The stock market goes on a bull run for several years but you are still withdrawing $70,000 every year. Because it is only at $480,000, you are suddenly taking out 14.5% of your portfolio to get $70,000 to live on. Because of sequence of return risk, you never get back to where you need to be. Your portfolio ends up running out of money. This is a real risk that cannot be discounted. But people are dying with millions in their portfolios. So can they spend more? Yes, probably… [bctt tweet="How does the sequence of return risk impact what you can withdraw from your retirement accounts annually? Learn all about it in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What happens when you follow the Bengen Rule

These are the people that love watching the number in their retirement accounts increase. No amount of new cars, new vacations, and new homes will replace that feeling. I will leave these people alone, there is no reasoning with them. The other subset of people is already doing everything they want to do. But the majority of people do not spend more because they are afraid they are going to run out, they do not want to be a burden on their kids, or they are relying too much on their portfolio for income. Too many people are sticking to a 3–4% withdrawal rate because they are sticking to the Bengen Rule. The Bengen Rule dictates that you withdraw 4% every year and only take a raise for inflation. If you are going to be around for 30 more years, there is a 93% chance that you will never have to change a thing—with the right portfolio. But what about halfway through the trial? The research shows that the median return is ending up with what you started with—$1 million. Only 7% of 1,000 trials ran out of money. But over half ended with more than they started with. Some ended with $2 million or more by following the Bengen rule. So again—could they be spending more? The answer is likely yes.

How to live your best life in retirement

I want you to live your best life in retirement. So what is the fix? Be flexible.

Lower your monthly expenses: Pay off your house before you retire. You will spend more in retirement when you have a lower monthly output. You will be less reliant on your portfolio to survive.
Eliminate ALL debt whenever possible: Pay cash for your vehicles when you can.
Do your best to have monthly spending taken care of in inflation-protected annuity-type payments: David Blanchett and Michael Finke found that spending in retirement is greater for individuals who receive a larger portion of their income from guaranteed sources such as defined benefit pensions, annuities, social security, etc. If you can get annuity-type payments for regular expenses, research suggests that you will end up spending more in retirement because you are not reliant on your nest egg.
Delay collecting social security: If you delay it as long as possible, you and your spouse get an 8% raise every year you delay. You might have enough in social security to cover monthly expenses.
Come up with an inflation-protected bond or security that’s laddered: Work with an advisor to do this.

All of these things afford you flexibility. Your life, the returns you see in the stock market, inflation—it will all fluctuate. That is why flexibility is key. It is also why Fortress Planning Group follows the Guyton Rules for retirement planning. We help you determine if you can spend more systematically and thoughtfully. Learn more about it in this episode of Best in Wealth. [bctt tweet="Learn how you can live your best life in retirement in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How the Russia-Ukraine Crisis Will Impact Your Investments, Ep #190

Fri, 04 Mar 2022 05:00:00 -0500

Russia began its invasion of Ukraine on February 24th, 2022. Not surprisingly, the stock market did not respond well to the news. Investors sold off considerably in the morning’s open. But things began to stabilize when no one expected it to. On day three of the conflict, the S&P 500 was up almost 3%. Why did that happen? It’s not clear what the end game of the conflict is—it is just getting started. One thing is for certain: the market doesn’t like uncertainty. On Thursday, there was considerable angst among investors. Many investors—in an attempt to time the market—moved into less risky investments than stocks. Is that a wise move? To determine the best exit and re-entry points, my colleague looked at the market six months prior to the invasion and 18 months after in five of the most recent wars. When was the best time to get back in? Find out in this episode of Best in Wealth! [bctt tweet="How will the Russia-Ukraine crisis impact your investments? I share my educated opinion in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:09] How do you handle it when your child is sick?
[3:51] The Russia-Ukraine conflict and its impact on your investments
[6:33] The last 5 times we had major conflict in the world
[7:57] The Vietnam War (November 1, 1955 – April 30, 1975)
[9:17] The Gulf War (August 2, 1990 – February 28, 1991)
[10:51] The Afghanistan War (October 7, 2001 – August 30, 2021)
[12:15] The Iraq War (March 20, 2003 – December 15, 2011)
[13:28] The Crimean Crisis (February 20, 2014 – March 26, 2014)
[15:42] Why you should not sell everything and wait it out
[18:29] Everything is changing day by day

The Vietnam War (November 1, 1955 – April 30, 1975)

August 2nd, 1964 was invasion day. The bottom of the market happened two months before invasion day. 18 months later, stocks were considerably higher.

The Gulf War (August 2, 1990 – February 28, 1991)

US intervention started on January 17th, 1991. Six months prior to the invasion, the S&P was around $370. It dropped all the way to $300, moved up, and hit a huge drop. By invasion day, you should’ve already sold everything. You would have to buy back on the very day of the invasion—the opposite of what most people think. After invasion day the stock market climbed considerably in one week alone ($300 to $370). 18 months later, it was a little over $400. You were best buying the dip 45 days before invasion day.

The Afghanistan war (October 7, 2001 – August 30, 2021)

The air campaign started on October 7th, 2001. The S&P was around $1,100 six months before the invasion. The market started climbing but took a serious drop two months before the invasion. 20 days before the invasion, we hit rock bottom. That is when you needed to get back in. The top of the market was 4.5 months before invasion day and buy-in was 30–45 days before invasion day. Because of the Dot-Com bubble, the stock market was down 18 months later. [bctt tweet="What can previous wars such as Vietnam and Afghanistan tell us about how the market will react to the Russia-Ukraine Crisis? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The Iraq War (March 20, 2003 – December 15, 2011)

Six months prior to the first airstrike, the S&P 500 was hovering between $850–$900. Three months before was the high point (and when you should have sold). The best time to buy back was a week and a half before the invasion occurred. If you sold everything then, it would have been a big problem. Eight months later, the stock market was back up over $1,100. The sell and buy point was months before the airstrikes.

The Crimean Crisis (February 20, 2014 – March 26, 2014)

Six months prior to the crisis, the stock market was down to around $1,650 after steadily rising for six months. 30 days before the invasion, the market hit a big dip. Two weeks before the invasion was the best time to buy back in. What happened next? The stock market rose considerably over the next 18 months.

The Present-Day Russia-Ukraine Conflict

Just like other wars, I expect that we will see some tough weeks and months because of the Russia-Ukraine Crisis. Stocks always seem to bottom out before the point of invasion. In ⅘ of the wars, stocks were significantly higher 6+ months later. But people are asking—does it make sense to sell everything and wait it out? To get back into the market when the dust settles? In this episode, I share my answer to these questions. Don’t miss it! [bctt tweet="How should you manage your investments as the Russia-Ukraine Conflict is upon us? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Reframe How You Think About Retirement, Ep #189

Fri, 18 Feb 2022 05:00:00 -0500

I routinely talk about why you need a new routine in retirement, that you cannot just wing it. Retirement gives you time to accomplish everything you have wanted to do that you have never had the time to do. Retirement can be fulfilling and full of purpose. I have always referred to what you want to accomplish in retirement as your bucket list. In this episode of Best in Wealth, I talk about why I am reframing the way I talk about retirement—and you should, too. [bctt tweet="In this episode of Best in Wealth, I share why you need to reframe the way you think about retirement. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:11] Have you ever really challenged yourself?
[4:28] James Kerr: Why My Retirement Won’t Include a ‘Bucket List’

Have you ever really challenged yourself?

I went scuba-diving on my honeymoon. I had one lesson from a guy who spoke three words of English and we went straight to the ocean and down 25 feet. Would I ever do it again? No! Am I glad I did it? Yes. The second thing I challenged myself to do was skydiving (because my wife wanted to). I am terrified of heights—but I did it. When we got to the ground my wife said, “I want to do it again.” She got a resounding no from me. The third challenge I faced head-on and accomplished was working in Alaska. I lived in a tent for three months working the fish. It was one of the most difficult three months of my life. But I did it. I am 100% glad I saw a challenge, took it on, and accomplished it.

James Kerr: Why My Retirement Won’t Include a ‘Bucket List’

In his opinion piece, James shares that he will never have a bucket list. He finds the idea of checking off items on a list until he “kicks the bucket” to be horrifying. Instead, he has created a challenge list of things he wants to achieve or experience in his retirement. Your retirement can be whatever you want it to be. You can challenge yourself to adventures you would have never thought were possible. You can learn a new skill. You can stretch yourself to do something that terrifies you. The point? Make the focus of your retirement achieving great things, not watching the clock run down as you check off a list. Listen to the whole episode to hear James’ entire piece on his challenge list! [bctt tweet="Why should your retirement NOT include a bucket list? I share my thoughts in the newest episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Many people are retiring early

The stock market has been on a tear for the last 10 years, portfolios have grown, and people realized they could retire early. Many couples come to me to get a second opinion to make sure they are financially able to retire. Once they know the answer, we move on to the next important topic: are they mentally ready to retire? I ask a lot of questions to make sure they are ready. As a Certified Financial Planner, my job as a fiduciary is to make sure my clients are prepared for retirement both financially and mentally.

What challenges will you tackle in retirement?

Are you an early retiree? Are you thinking of retiring in the next 5–10 years? Humans thrive on routine. The routine that you come up with in retirement will be far different than working life. What is going to fill up your “challenge list?” It is time to challenge yourself to reframe the way you think about retirement. Are you ready? [bctt tweet="In this episode of Best in Wealth, I share why you need to reframe the way you think about #retirement. What challenges will you tackle? Don’t miss the different angle I take, listen now! #wealth #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Why My Retirement Won’t Include a ‘Bucket List’ by James Kerr
The Long Walk Home: How I Lost My Job as a Corporate Remora Fish and Rediscovered My Life’s Purpose
James’ blog: Peaceable Man

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Market Predictions: Where is the Stock Market Heading? Ep #188

Fri, 04 Feb 2022 05:00:00 -0500

I am a huge Packers fan. The Packers recently hosted the 49ers in a playoff game they were expected to win. They had the home-field advantage and key players who had been hurt were returning. Even better, the Packers had beat the 49ers earlier in the season. Analysts and Vegas odds gave the Packers the edge. All of the information available pointed to a Packers’ victory. But they lost. We did not have future knowledge of what was going to happen during the game. The Packers were awful offensively. That is the thing with predictions. Everyone has predictions about everything, including the stock market. But all you have is the information that is available today. So what does that say about future market predictions? I share my thoughts in this episode of Best in Wealth. [bctt tweet="Where is the stock market heading in 2022? I share my thoughts on market predictions in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:06] An unexpected playoff loss
[4:02] Where is the Stock Marketing Heading?
[7:18] Two banks made opposite predictions
[10:18] When market predictions are dead wrong
[16:30] The Fed makes their announcement

Optimism regarding the stock market

I recently recorded an episode about being optimistic about the stock market. But there hasn’t been a lot of optimism going around. So much is going on and everything has been volatile. I am recording this episode on Friday, January 28th. Two days ago, the Fed made its announcement about 2022. Up until that day, the S&P 500 was down 9%, the NASDAQ was down almost 15%, and Bitcoin was down almost 20%. The big question was: Before the Fed chairman steps in front of the microphone, is it time to buy the dip? Or sell everything?

Two banks made opposite predictions

A MarketWatch article shared that two giant banks made opposite predictions Wednesday morning. Goldman Sachs—led by Peter Oppenheimer—argued that it was time to buy the dip. Goldman Sachs is one of the biggest banks in the country with a team of strategists behind it. They believed that returns would be lower but the bull market would continue as long as the economy continues to grow. They argued that the market would be fine and they encouraged buying. But Barclays argued that it was time to sell. Interest rates continue to rise. There is conflict with Russia. The COVID-19 pandemic is still running rampant. They said do NOT buy the dip. They believed valuations were too high and there was downside risk to earnings after the binge in consumption goods. They believed that the S&P 500 would drop at least 8% and as much as 20%. What would you do after reading this article? With two large banks at odds, who do you trust and believe? [bctt tweet="Two large banks recently made opposite predictions about the future of the stock market. Do their predictions matter? Find out in this episode of the Best in Wealth Podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

When market predictions are dead wrong

One of the most egregious predictions that I had ever heard came from Ken Fisher. He was the Executive Chairman and Co-Chief Investment Officer of Fisher Investments. He is a fiduciary that believes in timing the market. I do not. In 2003, he predicted the bubble in tech stocks and he was right. But if you make enough predictions, everyone is right eventually, right? In 2008, he predicted that the year would be a good year for stocks, particularly bank stocks. He was dead wrong. The S&P 500 ended down 38%. Bank stocks were the worst in the world. He thought that the very best stock to buy in 2008 was AIG, the insurance company. The government had to bail out AIG from bankruptcy. That stock dropped over 90%. Do you think Fisher Investments emphasized this incorrect position? It was THE worst performer in the S&P 500.

The Fed makes its announcement

On the 26th of January, the Fed made its announcement. With every word, the stock market continued to drop. They planned to further reduce bond purchases in February and completely cease the purchase in March. Drop. They issued a March rate increase for the Federal funds rate—i.e. Interest rates would increase, which we already knew. The markets dropped. The final dagger was that interest rates would likely be raised multiple times in 2022. The DOW sank 350 points. But guess what? The market stabilized. We only have the information that is available today. No one knows how the game will play out. So many things can impact the market. All of these predictions are causing confusion, anxiety, and stress—especially for those getting ready to retire. It is leading to emotional decision-making. What should you do instead of listening to market predictions? Listen to hear my thoughts! [bctt tweet="What happened in the stock market when the Fed made its announcement about 2022? Learn all about it in this episode of Best in Wealth! episode of the Best in Wealth Podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Why it Pays to be Optimistic about the Market, Ep #187

Fri, 21 Jan 2022 05:00:00 -0500

Think back to the beginning of 2021. Do you remember what was happening? Do you remember how you were feeling? The odds are that you would not remember because of recency bias. Recency bias means that you are more likely to remember things that happened in the immediate past. You might have made some predictions at the beginning of 2021, right? But no one thought the S&P 500 would go up over 25%. Did you? So in this episode of Best in Wealth, I will share why your best plan of action is to remain optimistic. [bctt tweet="Why does it pay to be optimistic about the stock market? Hear my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Optimism #Optimist" username=""]

Outline of This Episode

[1:11] Predictions about 2021 were likely far off
[4:30] Why you should be optimistic about the market

The economy has us worried—how can we be optimistic?

An article by MarketWatch, “U.S. Consumer Sentiment Falls Close to 10-Year Low on Inflation and Omicron Worries,” said that “Consumer sentiment index drops to 68.8 from 70.6, the second lowest reading in a decade.” The decline was not only due to Omicron worries but also increasing inflation rates. It goes on to say, “Economists predict the U.S. will bounce back quickly if the coronavirus surge fades soon and supply chain bottlenecks begin to ease.” But if inflation does not ease, there may be a pullback in spending that will impact the economy. I feel that people are worried about the economy in 2022. Will the stock market overcome these fears? Will we get control of the Covid virus and inflation? What is your prediction? [bctt tweet="The economy has us worried—how can we be optimistic? In this episode of Best in Wealth, I share why optimism is the best path forward. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Optimism #Optimist" username=""]

The market has no memory

In an article by David Booth, “Why I’ll Always Be Optimistic about the Market,” he reminds people to not make forecasts about the future of the market. Why? Because the market has no memory. We cannot make guesses or assumptions about the future. The stock market rarely ends the year up 8–10%. Over the last 95 years, it has landed there 6 times. Yet we expect a good return. If we did not, we would never invest in the stock market. Why does David always bet with the market? Because you can bank on human ingenuity and finding paths through the crisis. Markets are forward-looking and reflect optimism innate to humanity. However, if you always expect a positive return you are in for disappointment because the market cannot be forecasted or predicted. We saw about a 70% return in small value that was completely unexpected. But if you were shifting money around you likely did not see that return. Only 25% of actively managed mutual funds beat the market. But when you begin to understand how markets work, the game changes.

The surprising reason David Booth maintains optimism

No one knows what will happen in the market. David Booth firmly believes—based on 50+ years of experience—that the market responds to new information based on fairness. Market transactions can only happen if both sides of a trade agree they’re getting a fair price, right? In the article, David goes on to say “I wake up every morning believing the market will go up a little but prepared for if it drops. And you should too. Markets will go up and down, but you should expect them to be positive, and that is what history has also shown. If you can hold this in your heart, you can be optimistic and resilient, you can manage the central challenge of human existence. It is hard to do. But it is worth it.” While it pays to be optimistic, it is essential to have a plan in place that prepares you for the bad times to feel secure. Once you have confidence in your retirement plan, you have a great reason to be optimistic. [bctt tweet="In this episode of Best in Wealth, I share the surprising reason David Booth chooses to remain optimistic about the stock market (and why I do, too). #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Optimism #Optimist" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How Family Goal Sessions Can Move Your Family To The Next Level, Ep #186

Fri, 07 Jan 2022 05:00:00 -0500

We all understand what goals are and at least intuitively, we know that they are a good thing. As has been famously said, “If you aim at nothing, you are sure to hit it.” And we all know as well that regrets are no fun. I have a few regarding my educational pursuits in the past and I wish I could change them. But I cannot because the past is past. All I can do is aim toward better things in the future. In other words, set goals and strive to achieve them. But have you ever considered that you can put the power of goals to work in your family as well? As a family steward, you have both the opportunity and the responsibility to empower your family to live above the regrets by aiming higher. This episode explains what a family goal session is, how you can pull it off, and how it benefits everyone in your family. [bctt tweet="Listen to learn how family #goal sessions can move your #family to the next level! It’s on the #BestInWealth podcast! #investing #PersonalFinance" username=""]

Outline of This Episode

[1:27] Regrets: Do you have any? One of mine is slacking in school
[3:59] Family goal sessions: ideas and tools to move your family to the next level
[15:23] My family goals from the past (as food for thought) - I had a 50% success rate
[21:15] Your turn to get your family together and organize those family goals

Our quarterly family goal sessions have been a game-changer for us

I must give credit where it is due, my wife came up with this idea. She felt that all of us in the family could benefit from setting goals together and holding each other accountable for our progress (or lack of it) on our goals. I thought it was a great idea so we started implementing it a few years back… and it has been great. We decided that each family member would set one goal in each of four categories: Reading || Physical Health || Fun || Mental. It has been amazing to see what is possible and how this united focus can bring us together as a family. Listen to hear all the details on how we have organized it and tried our best to pull it off. [bctt tweet="Our quarterly family #goal sessions have been a game changer for us. It may sound like a crazy idea, but it’s SO helpful. Find out more on this episode of the #BestInWealth podcast! #investing #PersonalFinance" username=""]

How to pull off your own family goal sessions

What I love about our family goal sessions is that they not only give our family a common area of focus, they also provide ample food for conversations and interaction throughout the year. We are able to discuss our goals each week around the dinner table and do a little “check-in” to see how everyone is doing. You might think of it as having in-the-family accountability partners, which I think fits perfectly in the family stewardship approach I take to life and finances. We decided to organize our goals around quarterly completion dates. Why? Because it is tough to remain focused for a 12 month period. 3 months enables us to focus in short bursts and receive the payoff of satisfaction from seeing smaller goals completed more regularly. We also did our best to set S.M.A.R.T. goals, which I have spoken about many times before. See episode 17 as one example. These are specific, measurable, achievable, realistic, and time-bound goals.

Intentional progress and connection are the most important parts of family goal setting

As a family steward, it matters to you if your family is growing or not. It matters to you whether your family members are moving in positive directions in their lives. For that reason, a family goal-setting session makes perfect sense. You are able to encourage forward motion in positive areas of life and encourage your family members as they make progress toward those goals. Take my ideas and tweak them to fit your family. But whatever you do, take this idea seriously. You can see great changes in many areas of family life through this process of family goal setting. [bctt tweet="Intentional progress and family connection are the most important outcome of family #goal setting. Learn how you can make it a reality on this episode of THE #BestInWealth podcast! #investing #PersonalFinance" username=""]

Resources Mentioned

My previous episode about reflection (episode 185)
See episode 17 to learn more about S.M.A.R.T. goals

Connect With Scott Wellens

Subscribe to Best In Wealth

Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Reflecting on the Past to Build a Better Future, Ep #185

Fri, 24 Dec 2021 05:00:00 -0500

This last year, when the COVID lockdowns happened, I took advantage of the space in my schedule to get started on a physical fitness routine, and I tell you, I made some great progress. It was a decision that benefited me in multiple ways and made me feel better overall. But once the pandemic restrictions lessened, I slacked on my new habit. It was a choice I made, but it was fueled by a handful of lies that I was telling myself, things like, “I do not have the time anymore” or “It is not that important.” The reality is that my fitness routine was one of the best things I was doing for my health and overall productivity and success. I did not come to this realization until I took time to reflect on the past year. When I did, it all came into focus and I found an area in my life where I can make a change that improves my life going forward. Taking the time to reflect is powerful. This episode is aimed at giving you the tools you need to use the power of reflection in beneficial ways in your life. [bctt tweet="CHALLENGE: Do you regularly reflect on the past to build a better future? Listen to this episode of #BestInWealth for a guided self-assessment tour! #investing #PersonalGrowth #retirement #PersonalFinance " username=""]

Outline of This Episode

What is reflection? [1:29]
Studies that show the importance and benefits of reflection [9:10]
Questions to help you reflect on the last year [11:32]

What IS reflection?

If we are going to take the time to reflect, we should start out with a clear definition of what we mean. REFLECT: Serious thought or consideration This kind of consideration can be focused on anything — your day, your week, the last year (what we will be doing), recent events, or serious situations or truths. There is honestly no limit to what you can spend time reflecting upon. In this episode, what I am encouraging you to do is to come with me on a guided process of reflection on what took place in the past year (2021). If we are going to take our role as Family Stewards seriously, then reflection is essential. Why? Let us just recap the situation we all went through this past year: When COVID hit, we were all busy with the activities and responsibilities of life. But the pandemic slowed our pace of life, in some cases to a crawl. We had the opportunity to sit with family at dinner, to have deeper and longer conversations, to reflect on things in ways we truly needed. But now that life has picked up its pace once again, we have pushed some or many of those things out of our lives again, to our detriment. A time of intentional reflection is going to serve all of us well if we wish to keep the benefits of the things we learned in the past year. [bctt tweet="What IS reflection and why is it so beneficial? Listen to this episode to hear what recent studies say about the benefits and power of personal reflection. #BestInWealth #investing #PersonalGrowth #retirement #PersonalFinance " username=""]

QUESTION: Was 2021 mostly a good year or mostly a bad year?

When we answer questions like this our minds take a very natural and expected turn. We recall one or two major life events and whether or not those were positive or negative, we make our assessment of the entire year. So, for example…

Did you get married in 2021?
Following the advice outline on this podcast, did you get out of debt?
Did you buy or moved into a new home?
Did you start a new career or job?

Those are all exciting things, so if you experienced them in the last year you may feel your year was a good one. But what if you…

lost your home or your job?
Experienced the death of a loved one?
Endured a health crisis?

If those types of things characterized your 2021, you may say it was a bad year. But here is the point: Good or bad, there are many lessons that can be learned from the things we experienced. Circumstances, mistakes, etc. can be used to our benefit if we take the time to reflect on them and glean the lessons they have to teach us. Our mind has the ability to view circumstances as opportunities or obstacles, it is our choice. As we make changes based on the lessons we learn from 2021, we can make 2022 a great year.

QUESTION: How did you grow as a person?

This is one of my favorite reflection questions to ask myself. Why? Because it forces me to take a long hard look at myself and to make an assessment of the kind of person I am day to day. This is so helpful when it comes to making improvements in my life. So, ask yourself, compared to the previous year, how did you improve your character or personality traits in 2021? Use what you find as indicators of areas where you can make improvements to continue growing. If we all did this, the world would be a different (better) place. But it can only start with you and with me. We have to make the decision to reflect and then to take action based on our reflection. I highlight a handful more questions in the episode, so be sure to listen! [bctt tweet="QUESTION: How did you grow as a person in 2021? It’s time for some self-evaluation and changes! Listen to this episode of #BestInWealth for a guided self-assessment tour! #investing #PersonalGrowth #retirement #PersonalFinance " username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth

Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Why Health Savings Accounts Are A WIN For Most People, Ep #184

Fri, 10 Dec 2021 05:00:00 -0500

Have you heard of Health Savings Accounts (HSA's)? They are a government-approved tax savings tool that enables you to save money specifically for health-related expenses in a way that enables you to avoid paying tax on that money. So whatever tax bracket you are in, an HSA is one of the smartest ways to ensure you are not paying too much in taxes. Some people shy away from HSA's for a variety of reasons, but the info I provide on this episode might change your mind.

Outline of This Episode

[1:02] What was it like when you got hurt as a kid?
[3:30] The 10,000 foot level about Health Savings Accounts (HSA's)
[6:01] Did you know you can make investments INSIDE an HSA?
[8:06] Who can make a deductible contribution to their HSA account?
[10:26] How much can you contribute to an HSA?
[13:29] Additional rules regarding HSA contributions and special circumstances
[18:30] Eligible expenses that are not “doctor visit” related

Who can use an HSA to save on taxes?

Do you have a high deductible health plan, with a deductible that is at least $1,400 for individuals or $2,800 for families (2022 guidelines)? If your plan has deductibles less than those figures you cannot contribute to an HSA. But if you DO have a high-deductible plan and are contributing to an HSA, and then MOVE to a lower-deductible plan, then you will still be able to use the funds you have put into that plan, for qualified health care expenses. That is qualifier # 1.

Qualifier #2 has to do with the guidelines for the HSA eligible plan you participate in. Is this plan with a maximum out-of-pocket expense for individuals at $7,050 or $14,100 for families? If so, you can move on to Qualifier #3, which has to do with your “dependent” status.

Are you able to be claimed as a “dependent” on anybody’s tax return? If not, you can contribute to an HSA!

Will your HSA distributions be tax and penalty-free?

When the money comes out of an HSA, it must be done according to the rules and guidelines so that you do not have to pay any penalties or taxes. That is the way to go because if you have to pay penalties and taxes, you are losing the benefits of an HSA. When it comes to taking money out of your HSA, what you need to be able to answer is this question; "Was the distribution used to pay or reimburse for an expense to treat or prevent a physical or mental illness." There is a whole list of what is considered an eligible expense. Next, you need to ask, "Was the qualified expense paid or reimbursed by any health insurance plan, or was the qualified medical expense claimed as a medical expense deduction?" If so, the distribution is not a tax-free disbursement… and that is BAD news all around because not only will you pay taxes, you will also pay a 20% penalty for using your HSA for non-qualified expenses.

Qualified expenses outside the normal parameters

Most of the eligible expenses are related to direct health care, like doctor’s visits, vision care, and expenses, etc. But there are other health-related expenses you can use that money for. One of them is long-term care insurance premiums. A portion of the premiums can be paid, depending on your age at the end of the year the funds are used. Some examples...

If you are 40 and under you can use up to $450 to pay for long term care premiums
If you are 41-50 years old, that number jumps to $850
And moving all the way up to 71 years old and older, you can pay for long term care insurance premiums up to $5,640

Medicare can help you use up your HSA funds when needed

Some people do a great job funding their HSA account and have very little need to draw money out of it (that means they stay pretty healthy). So, what should they do with all those healthcare-designated dollars as they get older? Medicare provides a great opportunity to make use of those funds. You can pay Medicare part A premiums with HSA dollars (if you are a high-income earner and therefore have premiums on Medicare part A). All Medicare part B premiums can be paid with HSA dollars as well. The same goes for Medicare part D. AND… if there are co-insurances attached to those parts of Medicare, their premiums can be funded with HSA dollars. The main exception to that is that Medicare supplemental policies are not typically eligible for HSA use. But if you do need to use the funds for those policies and you are over 65 years old, you will pay taxes only, no penalties.

This is just a snapshot of how you can benefit from Health Savings Accounts. To hear everything you need to know, listen to the episode!

Resources Mentioned

HSA accounts (Investopedia article)

Connect With Scott Wellens

Subscribe to Best In Wealth

Audio Production and Show notes by

PODCAST FAST TRACK

https://www.podcastfasttrack.com

Podcast Disclaimer:

The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

Greenlight: A Great Tool to Teach Your Kids about Money, Ep #183

Fri, 26 Nov 2021 05:00:00 -0500

Why is it important to teach your kids about money when they are young? How do you teach your kids about money in a day and age where everything is moving digital? I still have an 11 and 13-year-old at home who I need to educate on spending, saving, and investing. I have found a great tool that anyone can use to teach their kids about money—Greenlight. Learn all about it in this episode of Best in Wealth! NOTE: I am not an affiliate of or compensated by Greenlight. I simply think it is a great tool to teach your kids how to be financially responsible. [bctt tweet="In this episode of Best in Wealth, I share a great tool that you can use to teach your kids about money. Check it out! #wealth #investing #PersonalFinance #FinancialPlanning #WealthManagement #Greenlight" username=""]

Outline of This Episode

[1:13] Visiting my daughter in Washington, D.C.
[3:40] Teaching my 23-year-old financial responsibility
[8:49] Use the “Greenlight” app to teach your kids about money

How to teach your kids about money in a digital world

I have a 23-year-old, a 13-year-old, and an 11-year-old daughter. Life was a lot different when my 23-year-old was younger. I carried more cash at the time. I wanted to teach my oldest daughter how to save, spend, give, and how to invest. Dave Ramsey—who has been instrumental in getting my family out of debt—offers “Financial Peace Junior” to help teach kids how to manage money. It is exactly what I used with my oldest daughter. When she earned money, it was allocated between spending, saving, and giving. When her savings account was large enough, we opened up a brokerage account for her to start investing money. She was investing in mutual funds when she was 12 years old. I have not done as good of a job with my 11 and 13-year-old daughters. I decided to put an end to that. But the problem is that I do not carry cash anymore. Secondly, when I do finally give my kids money, they end up spending everything that they are making because I am not equipping them with mechanisms to save and give. We have told all of our kids that if they want a car they have to save up money to buy it themselves. We are willing to match $1 for each $1 they save to buy their first car. My 23-year-old saved $2,000 and we matched it and got her a $4,000 Toyota Corolla. If my 11 and 13-year-old do not save money, they will not get money. So they need to start now. So what am I using to teach them how to be financially responsible? Greenlight. [bctt tweet="How do you teach your kids to be financially responsible in a digital world? I share a great tool in this episode of Best in Wealth! #wealth #investing #PersonalFinance #FinancialPlanning #WealthManagement #Greenlight" username=""]

Why you need to use the app “Greenlight”

Here is why I think you should sign up for this app. When you sign up, you have to link your bank account. Once you do that, you can move money from your checking account into the Greenlight account, where you can set up an individual account for each of your kids. Your kids can download the same app on their phones. With the basic Greenlight plan, your kids will have access to a spending account and a savings account. You can also give right from the app. So I can take money from my checking account and transfer it into the master account. Last Friday, my daughter Eva spent 7 hours cleaning the house. We had a conversation about how the money would be allocated and most of it went into her savings. So I took the money I wanted to give her and assigned it between her savings and spending account. When I moved the money, she immediately got a text to check her app because she got paid.

Other features of the Greenlight app

What else does Greenlight offer? Greenlight will send you a debit card for your child that is accepted anywhere Mastercard is accepted (the card is customizable, too). Secondly, as the parent, you can limit what your child spends at any one place. It is still their debit card but we can put constraints on it. This debit card is the next best thing compared to cash. The cheapest service is $4.99 a month. For our lifestyle, this is the easiest way to teach my kids about money in the modern world. I am fine with paying $4.99 a month for the ease of use. For $7.98 a month, you can upgrade to Greenlight + Invest which allows your kids to begin investing in the app. Lastly, for Greenlight Max, you can pay $9.98 to earn cashback, identity theft protection, purchase protection, and more. For now, we are fine utilizing the spending, giving, and saving features. What else can the app do? I can assign and set up a weekly allowance that is automatically deposited into my kid’s accounts and is allocated between spending, saving, and giving. You can even assign chores to your kids in the app. If I want my daughter to sweep the floor or do the dishes, I can assign it, and she can check it when it is complete. I can check the chore complete on my end and it will send her the money. It is that simple. I can also assign an interest rate to their savings account as if they had it in a regular bank. I will gladly give them a higher interest rate than the best interest rate at an online bank. These likely are not all of the features of the Greenlight app. I am just getting started with it and am sure I have more to learn. But I had to share this with my listeners. It seems like a great tool to teach your kids the basics of good finances. [bctt tweet="What are the features of the Greenlight app? How can it help you teach your kids about saving, investing, and giving? I share my thoughts in this episode of Best in Wealth! #wealth #investing #PersonalFinance #FinancialPlanning #WealthManagement #Greenlight" username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

3 Tips to Boost Financial Satisfaction in your Marriage, Ep #182

Fri, 12 Nov 2021 05:00:00 -0500

According to Dixie Meyer and Renata Sledge in their article, “The Relationship Between Conflict Topics and Romantic Relationship Dynamics,” personal habits, communication style, household chores, finances, big decisions, quality time together, sex, parenting styles, and in-laws are the topics most married couples most frequently argue about. The three biggest things? Finances, differences in parenting styles, and sex. These three things cause lowered relationship quality. But I only have the expertise to talk about finances. So in this episode of Best in Wealth, I will talk about the importance of transparency in financial decision-making and three tips to boost financial satisfaction in your marriage. [bctt tweet="In this episode of Best in Wealth, I share 3 tips that can help you boost financial satisfaction in your marriage. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] I fought with my wife this week…
[3:50] The relationship between conflict topics and romantic relationship dynamics
[7:53] The importance of transparency in financial decision-making
[11:54] How to overcome the trap of financial infidelity
[16:41] Three tips to boost financial satisfaction in your marriage
[21:07] Why my wife and I do not fight about finances

The importance of transparency in financial decision-making

Professor Jenny Olson and Professor Scott Rick are two leaders in this growing space. They recently summarized their freshest findings in a piece called, “You Spent How Much?” They found that when it comes to joint financial decisions, transparency wins the day. Early in his career, Professor Rick developed the Tightwad/Spendthrift scale to measure the extent to which someone feels pain at the prospect of spending money (tightwad) versus someone who does not feel enough pain (spendthrift). Tightwads and spendthrifts tend to attract. Even though they attract, they are likely to engage in conflict around money issues. Think about your relationship. Every relationship has a nerd and every relationship has a spender. One person always spends more than the other, even if they are both tightwads or both spendthrifts. It is clear, according to the research, competing ways of spending can lead to serious conflict. [bctt tweet="Why is transparency in financial decision-making so important in a relationship? I share some research-backed thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How to overcome the trap of financial infidelity

So what happens when conflict begins to occur? Financial infidelity. Partners begin to lie about how much they spend or where they spend their money. Most people do this to avoid confrontation. But sustained financial infidelity over time is not unlike sexual infidelity. It may cause deep rifts in your relationship. I do not want this in my relationship! So how do you avoid financial infidelity? One thing you can do is have a joint account with your spouse. When we got married, we thought separate accounts might lead to fewer fights. We thought if I made 75% of our income and she made 25% we would each contribute that much of our pay to a joint account to cover bills. Then we would have our own accounts to spend money as we wished. But as we thought about going out to eat, buying Christmas presents, paying for college for kids, and retirement planning, things got complicated. So we decided a joint account was the way to go. Turns out, couples with joint accounts tend to have higher levels of relationship satisfaction. One study I read sampled newlyweds and randomly assigned them to either have joint accounts or separate accounts. Those with joint accounts saw eye-to-eye on financial matters but also had higher relationship satisfaction two years later.

Three tips to boost financial satisfaction in your marriage

So what can you do as a financial steward to boost financial satisfaction in your marriage? Here are my thoughts.

Develop a spending plan together: This allows you to communicate about your budget every month. My wife and I have been doing this for many years. We have gotten to the point that we have a great financial plan. We are saving what we need for retirement, spending less than we make, have money saved for weddings, and more.
Have a line item in your spending plan with a flex account for each person: We each get our own dollar value allotted monthly and we cannot complain about how each person spends their money. It is our money to spend how we please. And if we do not spend it all, it rolls over to the next month.
Decide on a dollar amount that you will have a "check-in" on: Pick a dollar amount and if you are thinking about spending more than that dollar amount on one specific thing, have a conversation about it first. Make sure you are both on the same page.

The bottom line is that communication is the key to finances not becoming a contentious part of your relationship. Listen to the whole episode for the full conversation! [bctt tweet="What are three tips you can use to boost financial satisfaction in your marriage? Check out this episode of the Best in Wealth podcast to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Resources Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How to Avoid These 5 Mistakes in Retirement, Ep #181

Fri, 29 Oct 2021 05:00:00 -0500

I recently came across an opinion piece, “I Failed at Retirement: How to Avoid My Mistakes,” by Mike Drak. Mike worked in the banking industry for over 30 years. His wife is an investment advisor. But when he retired, he quickly felt like he had failed to prepare. How did he fail at retirement? I will dissect the five mistakes he said he made in this episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth, I share 5 retirement mistakes and how to avoid them! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:27] Why I was unprepared for Fortress Planning Group
[5:11] Mistake #1: Focusing on the money
[7:34] Mistake #2: Thinking retirement would be easy
[10:20] Mistake #3: Believing the retirement commercials
[12:26] Mistake #4: Retiring makes your problems disappear
[14:39] Mistake #5: Not having something to retire to
[17:12] How you can apply these mistakes to your life

Mistake #1: Focusing on the money

There is a belief that the quality of your retirement depends on how much money you have. While you do need money to fund your retirement, there is something bigger at play. You have to design a life for your retirement years that you will enjoy before you retire. If you retire at 65, you may have 25+ years of quality life left. What are your values? What makes you happy? How can you satisfy those questions in retirement? The one thing I have learned being a business owner and financial planner for eleven years is that it is not all about the money. Build a board of your goals, dreams, and aspirations. Figure out what they are before you retire.

Mistake #2: Thinking retirement would be easy

Quitting your job is considered one of the ten most stressful life events. You are doing the same thing for years and suddenly you hit the brakes and you are done. The unknown is stressful. When you are at your job and people count on you, you are in a comfortable room. But the moment you leave your working life, you are kicked into the hallway. The hallway is cold, dark, and unfamiliar. But there are a lot of rooms you can decide to enter. You finally walk down the hallway and look through a door. Maybe it does not fit, so you investigate until you find the room that fits perfectly for you. You just have to find it. [bctt tweet="Find out why thinking retirement would be easy is a huge mistake in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Mistake #3: Believing the retirement commercials

The narrative is that you can just slow down, play golf, and do whatever you want in your retirement—and you would be satisfied. There is nothing wrong with golfing, vacations, and spending time with your grandkids. For Mike, this was not enough. He was not built to slow down. But retirement does not have to mean slowing down. You just have to find somewhere else to continue your fast-paced life.

Mistake #4: Retiring makes your problems disappear

I think a lot of us fall into this category. Are you miserable at your job? Are you miserable in other areas of your life? Quitting your job will not make you magically happy. It will not transform who you are if you were not happy before. You will not magically hit the gym, eat healthily, or travel more. Make sure as a family steward that this is not you. Do you have an unhealthy routine right now? Build a new routine that you thrive on. It will take thought and work—so get started before you retire. [bctt tweet="Despite popular belief, retirement doesn’t make your problems disappear. I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Mistake #5: Not having something to retire to

You need to have a plan for a new routine that you execute when you retire. Why? When you retire, your sense of purpose can take a major hit. Some people may be forced to retire due to downsizing or even health issues. That’s why you need to figure out how you’ll fill that void. What did the author of the article do? He went back to work. He became an author, coach, and public speaker. It gives him the autonomy and flexibility that he always craved. Is that what you’re missing from your job?

Resources Mentioned

I Failed at Retirement by Mike Drak

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How a Family Steward Should React to Record-High Stock Market Prices, Ep #180

Fri, 15 Oct 2021 05:00:00 -0500

When people find out I am a financial planner, they often ask things like “The market is so high right now, where is it going to go from here? Should I pull money out of the market? Should I move it around?” So in this episode of the Best in Wealth podcast, I will share how I think family stewards should react to record-high stock market prices. [bctt tweet="How should a family steward react to record-high prices in the stock market? Listen to this episode of Best in Wealth to hear my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] Club volleyball tryout weekend
[5:05] How to view record-high market prices
[11:28] How family stewards should treat record-high prices
[14:39] 30% of the last 94 years saw record highs

Ignore the headlines—look at the data

At the time of recording this podcast, the S&P 500 is up almost 17% YTD. People keep expecting a dramatic downturn and are reluctant to keep investing. If you are thinking about making changes, listen to the episode I recorded about unintended market timing (and the consequences of it). Financial journalists try to write the most dramatic headline they can to get people to read their articles. They want clicks to make money. It is their job to stoke your anxiety during record-high periods. They suggest that the laws of physics apply to the stock market (i.e. “What goes up must come down”). Article after article correlates physics with the stock market. What is actually happening in the stock market during record highs? The stock market averages a correction—a 10% drop from its high—once a year. The stock market averages 2–3 bear markets a decade (a 20% drop from its high). There is also a recession or two per decade, which can be more devastating to the stock market. Those of us that find those observations alarming will shy away from purchasing stocks at record highs. You may have a healthy savings account and are waiting for a pullback. But history offers evidence that investors can be rewarded for the capital they provide these companies—when the stock market is high or low. [bctt tweet="Why should family stewards ignore the headlines about market highs and look at the data? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How family stewards should treat record-high prices

You as a family steward should treat record-high prices with neither excitement nor alarm. You should treat the stock market with indifference. Today's share prices reflect every stockholder's collective judgment on what tomorrow’s earnings and dividends are likely to be. Who in their right mind would invest in the stock market if it did not have a positive expected return? The stock market is expected to go up and that is why you invest. Over the long run, stocks do better than bonds. Bonds do better than cash. You expect a higher positive return and in return, you have to put up with corrections, bear markets, and recessions.

What 94 years of the S&P 500 tells us

Reaching record highs is the outcome you should expect. And we are constantly reaching record highs. Would you not want to see record highs regularly if you are expecting decent returns? The market fluctuates and there are bad months, years, and decades. Using month-end data—over a 94-year-period ending in 2020—the S&P 500 produced a new record high in more than 30% of those monthly observations. That means that one out of every three months there is a record high. Stop waiting to invest. Stop holding your money on the sidelines. You could be missing positive returns. Purchasing stocks, mutual funds, and ETFs at all-time records, on average, has generated similar returns over one, three, and five-year periods compared to purchasing stocks on a sharp decline. Want to hear what those statistics are? Listen to the whole episode to learn more! [bctt tweet="What 94 years of the S&P 500 tell us about market highs? I share some eye-opening information in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Episode #177: The Unexpected Way You’re Timing the Market

Connect With Scott Wellens

Subscribe to Best In Wealth Audio Production and Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

How Your Home Can Benefit You in Retirement, Ep #179

Fri, 01 Oct 2021 05:00:00 -0500

Your home provides shelter, right? Homeowners' houses are also investments—just like stocks and bonds. Unlike living in an apartment, you can bequeath your home to someone after you pass away. Houses—like any product or service—provide benefits. What are they? And can your home be a source of income in retirement? Listen to this episode of Best in Wealth to learn what your options are!

[bctt tweet="How can owning a home benefit you in retirement? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:10] My parents built their house and made it home
[3:13] The three benefits of homeownership
[11:51] Spending source and spending use pyramids
[17:55] Four different ways to use your home for retirement
[20:41] Don’t let anyone talk you into a decision you don’t want

The three benefits of homeownership

There are three types of benefits you receive when you own a home—and each one is important:

Utilitarian benefits: What does something do for me and my finances? All houses provide shelter and protection. Your home value can fluctuate and be worth a different amount at a different time.
Expressive benefits: What does something say about me to others and myself? Expressive benefits convey tastes and social status (i.e. having the money to buy a house in the first place).
Emotional benefits: How does something make me feel? You may have peace of mind and security or experience the pride of ownership.

As a financial advisor, my job is to help clients understand these benefits from an investment standpoint. I’m often asked if someone should buy or rent a home, pay off their mortgage, or sell their homes and buy something smaller. The benefits you receive from your home influences these decisions.

Should you pay off your mortgage before retirement?

I usually coach my clients to pay off their homes if they can—but not always. I love the emotional and expressive benefits that come with homeownership. But interest rates are at 2–3%. It can make more sense to invest that money instead of putting it into paying off your mortgage. It feels right in my head—but not in my heart. Many of my clients need to pay their mortgage off to lower their monthly expenses and alleviate stress. It also adds stability to your life when the stock market is volatile.

Some people have zero emotional ties to their house and holding a mortgage isn’t a big deal to them. Others want to say “This is mine. No one can take it away from me.” Some advisors simply run the numbers, which will always tell you that you’re better off keeping a mortgage. But it sets aside the emotional and expressive benefits of homeownership. Weighing all three leads you to the right decision for you. Everyone’s financial plans are different. Houses don’t just play a role in our portfolios, but also in our lives.

[bctt tweet="Should you pay off your mortgage before retirement? I share a few thoughts—and other options—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Spending source and spending use pyramids

There are three layers in spending source pyramids.

Consistent income: Part-time job, social security benefits, pension, or annuity.
IRA or 401k: retirement accounts where you access them as a source of monthly income to bridge the gap between expenses.
The things that you’re going to give away someday. The top of this layer is typically your home. It can be a strategy for retirement income.

The spending use pyramid also consists of three layers:

The things you must have: Food, shelter, support for children,
What you want to have: vacations, new cars, and “unnecessary” expenses.
The top layer consists of the things you’ll pass on to future generations (i.e., your house).

When you look at both, your house is at the top. Behavioral life cycle theory predicts that investors are reluctant to dip into things in that top layer. Your home equity makes up a large portion of your wealth. Most people don’t sell their houses to support non-housing consumption.

Only 2% of Americans who are eligible homeowners choose to do a reverse mortgage on a paid-off house. It can add income for retirees for many years, yet most people don’t do it because they’re emotionally attached to their homes. But there are some cases where I can look at prospective clients and say they can retire early—if they’re willing to do a reverse mortgage or downsize.

Four different ways to use your home for retirement

From a utilitarian perspective, there are four different ways you can use your home in retirement:

You can downsize your home, purchase something far cheaper, and invest the difference.
Sell your home and move to a cheaper location in the US or abroad.
You can take out a reverse mortgage.
Take out a home equity line of credit and use it for your retirement.

Above all, don’t let anyone talk you into a decision you don’t want before you work through all of the emotional and expressive benefits. The emotional benefits can be completely priceless. I cover each of these options in-depth in this episode. Listen to get the whole story!

[bctt tweet="There are 4 different ways to use your home for retirement. What are they? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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The 22 Age Milestones in Your Financial Journey, Ep #178

Fri, 17 Sep 2021 05:00:00 -0500

Are you familiar with the 22 age milestones that you will experience throughout your—and your children’s—life? Maximizing these 22 milestones is incredibly important for a successful monetary journey through life. Listen to this episode of Best in Wealth to learn what they are and why they’re important!

[bctt tweet="What 22 age milestones in your financial journey should you be aware of? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:17] The psychological impact of turning 50
[2:48] Financial milestones from birth to age 49
[10:00] Financial milestones after age 50
[23:44] Apply this information to your life

Your financial journey begins at birth

Did you know that any person’s financial journey begins at birth? How? As soon as a baby is born, you can name them as the beneficiary of a 529 plan. You can invest for them early and throughout their college years. You can start Uniform Transfers to Minors Act (UTMA) or Universal Gifts to Minors Act (UGMA) accounts as well.

The second milestone is when your kids turn 13 and they’re no longer eligible for the child independent care credit. It’s a huge tax credit to take advantage of for kids who go to daycare. In 2021, that credit for 2 or more kids went from $4,000 to $8,000 but after 13, they no longer qualify.

The age of majority in most states

The next milestone begins at age 18. Your child is no longer eligible for the child tax credit. When your kids are under 6 years, you get a $3600 credit as long as you fall under the income levels. It’s based on last year's taxes. A lot of people are currently getting monthly checks because the government has decided to give people half of the credit upfront. But since you’re getting half upfront, only half will apply when your taxes are filed—which means you may end up owing money.

Another milestone at 18? Kids reach the “age of majority” i.e. when kids are recognized as adults. If they have an inheritance that isn’t in a trust, they get the money at age 18. It’s also the age of termination for UGMA or UTMA accounts. Your child is no longer subject to the kiddie tax. Fun fact—in some states 21 is the age of majority.

What about ages 24 and 26? Listen to learn more about these two milestones!

[bctt tweet="What is the age of majority in most states? How can it be a financial milestone in your—and your child’s—life? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

The Rule of 55

When I turned 50, I became eligible to make catch-up contributions to 401ks, 403Bs, and a 457. That means I can contribute an extra $6,500 for a total of $26,000. With an IRA, I can contribute up to $7,000 a year. If you turn 50 on Dec. 30th you can make the contributions during the year.

At age 50 you can also become eligible for Social Security if you’re a disabled widow/widower.

At age 55, you’re eligible to make catch-up contributions to a Health Savings Account (HSA). you can normally contribute $3,600 individual or $7,200 family. After 55, you can contribute $4,600 individually or $8,200 as a family.

The “Rule of 55” also applies. Some employer plans allow you to take money out without penalty. If you get laid off, fired, or quit your job, you can pull money out of your 401k or 402B without penalty anytime during or after the year of your 55th birthday. If you’re an early retiree, there are workarounds (The 72-T rule).

Financial milestones in your latter years

At age 59 ½ you can withdraw money from any other retirement account without the 10% early distribution penalty being incurred. When you turn 60, you can claim social security survivor benefits as a widow or widower early at a reduced rate. It’s a great benefit if you need the money.

The next important milestone is age 62—when you can claim social security benefits. I don’t recommend drawing social security this early because you’ll take a large hit on your benefits. When should you collect at 62? If you’re in poor health, you have to, or you’re worried social security benefits won’t stick around.

Age 64 years and 9 months is the start of your initial enrollment period for Medicare. This is your first chance to sign up. The initial period ends 3 months after you turn 65. If you wait and miss your enrollment period, you may pay a surcharge on Medicare Part B for the rest of your life. So get signed up as soon as you can.

You’re then eligible for Medicare coverage at age 65, as well as non-medical withdrawals from an HSA without being penalized. You can use the money for anything you want—you’ll just have to pay taxes when the money comes out.

What about ages 66 and older? What milestones are important to know about your retirement years? Listen to the whole episode for the full picture!

[bctt tweet="When do retirement benefits kick in? What other financial milestones happen in your latter years? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Social Security

Connect With Scott Wellens

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The Unexpected Way You’re Timing the Market, Ep #177

Fri, 03 Sep 2021 05:00:00 -0500

You don’t think you’re timing the market, but guess what? You probably are. In this episode of Best in Wealth, I’ll talk about what the average investor looks like and why you don’t want to fall into that category. I’ll share why I think you’re timing the market and what you should be doing instead. Check it out!

[bctt tweet="In this episode of Best in Wealth, I share the unexpected way you’re timing the market—and what to do instead. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:32] I take every chance I can get to love on my wife
[5:24] What Dalbar studies say about the average investor
[8:30] Why the average investor doesn’t achieve the benchmark
[13:35] How the major asset classes performed in 2020
[17:39] How the asset classes performed in quarter 1 of 2021
[20:22] If you shouldn’t make unplanned adjustments—what DO you do?

What Dalbar studies say about the average investor

Dalbar researches all of the mutual funds that exist in the world. They can tell how the average investor compares to the performance of the overall market. Dalbar is the financial community's leading independent expert for these types of evaluations. It launched in 1976 and has earned a lot of recognition. The study that covered the first 6 months of 2021 says that the average investor does worse than the benchmark. Why? That’s what we need to figure out. You don’t want to be on the losing end. If you’re going to take a risk, you want to get what you deserve from the asset class. You want the reward.

Why the average person underperforms the benchmark

Part of the reason you’ll never achieve the benchmark is because ETFs and mutual funds have an expense ratio. After that expense, you want to do as well as the benchmark—or beat it. You want to reach financial independence as quickly as possible.

Another reason that people tend to underperform the benchmark is because they try to time the market. They sell when the market drops and sit on the sidelines until things are “better.”

But it’s not just that. I think it’s more subtle.

Most of the people I talk to claim they don’t time the market. They say it over and over. But it’s not just getting all the way in or all the way out of the market. The real problem is that you don’t have an investment plan. You might have a great idea in your head. But you don’t get a documented plan down on paper.

Instead, you do a lot of reading and research and you pick your investments. You throw 50% in one thing, 25% in another, and so on. You make your selections off the yearly averages and you invest. Or you look at certain asset classes that are doing well and invest in them. Maybe periodically you see how things have changed and you make adjustments. But if you want to be a successful investor, you need to be methodical. You need a plan. This is what separates you from the average investor.

[bctt tweet="Why does the average person underperform the benchmark? I share some research—and my thoughts—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What asset class performance tells you about your investment strategy

Pretend for a moment that it’s the 4th quarter of 2020. The S&P 500 averages 10% per year looking back 95 years. In the last 10 years, they averaged around 14% per year. Why was it on a tear? Facebook, Apple, Google, Amazon, Microsoft, etc. So a lot of people tilt their portfolios toward the S&P 500.

In the last quarter of 2020, the S&P 500 finished up 12.15%. Not bad, right? Except large-value did a lot better, ending the year up 16.25%. Small finished up 31.27%. Small value did even better, ending at 33.36%. Real estate was up 13% and international funds ended up 16%. The S&P was one of the worst performers of the largest asset classes.

So the funds that tilted toward large growth really missed out on these asset classes because they were concentrated on the S&P 500. Was it an anomaly?

The S&P 500 averaged 6.17% in the 1st quarter of 2021—but was still the worst performer. Here’s how other asset classes performed:

Large value 11.26
Small: 12.7%
Small value: 21.17%
Real estate: 10%
International 8.33%

A good family steward probably looked at those returns and saw missed opportunities. So you made changes because you can’t take it anymore. But what was the best performing asset class in quarter two? It was real estate. The S&P 500 did 8.55%. But you shifted toward better returns from the past and didn’t consider the future.

You think you’re doing the right thing, but you end up being closer to the average investor and underperform the benchmarks. That happens when you don’t have a plan. Stop trying to chase returns—it’s just another form of timing the market.

I’d love to help you—schedule a 15-minute phone call with me!

[bctt tweet="Learn how each asset class performed in quarter 1 of 2021—and what it tells you about your investment strategy—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

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Retirement Savings Research: Are You on the Right Track? Ep #176

Fri, 20 Aug 2021 05:00:00 -0500

A recent Charles Schwab survey of 401k participants found that they believed they needed to save at least $1.9 million for their money to last through retirement. When Schwab did this survey in 2019, the target retirement savings was $1.7 million. People are projecting needing $200,000 more over a short two years! So let’s pretend that your number is $1.9 million for retirement. What will it take to get there for the average person? What are some tips to help you get on track? Listen to this episode of Best in Wealth to learn more!

[bctt tweet="In this episode of Best in Wealth, I look at some retirement savings research to help you determine if you’re on the right track. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:36] Teach your kids financial literacy
[4:43] How much do I need to save for retirement?
[7:51] How to reach $1.9 million by retirement
[9:55] The median retirement savings across different age groups
[16:57] My top tips to help you achieve your savings goals
[21:56] Are you ready to get focused and disciplined?

How to reach $1.9 million by retirement

While the prospect of having $1.9 million seems daunting, you know that saving early and often will increase your chances of reaching this goal. A 401k or 403B is a great way to start saving and can help you build your nest egg. These plans are capped at $19,500 in 2021 unless you’re over 50, then you can contribute an extra $6,500.

You can also contribute to a Roth IRA/IRA, which can be up to $6,000 annually (or $7,000 if you’re 50+). What about a Backdoor Roth IRA or the Mega Backdoor Roth IRA? It’s highly technical but that’s one of the reasons we all need trusted advisors, right?

The median retirement savings across different age groups

Every three years, the Federal Reserve examines the changes in US family finances, including how much people have saved in retirement accounts. Using data from the 2019 survey, The Center for Retirement Research at Boston College calculated the median retirement savings across several age groups:

The median IRA/401k balance for someone 35–44 is $51,000.
The median IRA/401k balance for someone 45–54 is $90,000.
The median IRA/401k balance for someone 55–64 is $120,000.

If you’re looking to get to $1.9 million by retirement and you’re a median saver, how much will you need to save to hit that mark? For the sake of this experiment, I’m going to assume an 8% savings rate (a number slightly lower than the average US stock market return). It’s better to be conservative than not save enough.

A 35-year-old who has saved $51,000 is clearly in the best position to save more. To get to $1.9 million you’ll still need to save $900 a month over 30 years. Can you do that? Of course you can. But older workers would have to save far more. A 45-year-old with $90,000 saved has to save $2,475 a month to hit the $1.9 million by age 65. Can you save that much a month? These are the questions you need to be asking yourself. A 55-year-old with $120,000 saved has to save $9,000 a month to hit the $1.9 million by age 65. That seems extremely daunting, right?

[bctt tweet="What is the median retirement savings across different age groups? If the numbers describe you, is it enough to last through retirement? Learn more in this episode of Best in Wealth! #wealth #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

My top retirement saving tips

If the numbers seem daunting, here are my top recommendations:

Tip #1: Start saving now.
Tip #2: Start maxing out every retirement account you have, if possible(401k, 403B, 457, IRA, Roth IRA, regular investment accounts, etc.).
Tip #3: Focus. Stay disciplined.

Get with your spouse and make a plan to reach your goals. It’s difficult if you’re not saving the right amount of money. Where can you make cuts? Get a spending plan together and make it happen. You don’t want to depend on your kids because you didn’t have the discipline or focus to make it happen during your working years.

But the truth is, $1.9 million might not be your number. If you use the Bangden 4% rule and you have a diversified portfolio and take inflation adjustments, you’ll have $80,000 to spend year one on a $1.9 million portfolio.

If you’re 65 and getting ready to retire and your social security is $40,000 a year and you only need $80,000 to live on, your situation is far different. You only need $1 million! On the flip side, you might need more than $1.9 million. That’s why you need a comprehensive financial plan that optimizes everything.

If you’re ready to get killin’ it and you’re a high-income earner, schedule a 15-minute call with me. Let’s see if you’re a good fit!

[bctt tweet="In this episode of Best in Wealth, I share some retirement savings tips to help you get on track for your dream retirement! #wealth #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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Everything Screams Inflation: What Does it Mean For Your Portfolio? Ep #175

Fri, 06 Aug 2021 05:00:00 -0500

A Wall Street Article, “Everything Screams Inflation,” was published on May 5th, 2021. The opening line says, “We could be at a generational turning point for finance. Politics, economics, international relations, demography and labor are all shifting to supporting inflation.” Is inflation headed higher? The short-term answer is that it already has. So what does this mean for you and your portfolio? Learn more in this episode of Best in Wealth!

[bctt tweet="Everything is pointing to inflation. So what does it mean for your portfolio? Hear my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Outline of This Episode

[1:23] Did you know I’m a movie star?
[4:51] Inflation is heading higher
[7:55] Is inflation moving higher a negative?
[10:54] Adjusting your portfolio during inflation
[16:50] Why does any of this matter?
[20:31] Build a risk-adjusted portfolio

Inflation is heading higher

Two years ago, the New York Times reported that the Federal Reserve was worried that inflation was too low. It could leave the central bank with less room to maneuver in an economic downturn. But inflation has averaged 2.9% since 1926 and nothing in recent years has come close to 3% (except for 2006 at 3.4% and 2008 at 4.1%). The early ‘70s and 80s demonstrated the worst inflation periods. The worst was in 1979, where we experienced 13.3% inflation. But is inflation trending higher something to actually worry about?

The answer to that question depends on where you are in the economic food chain. Airlines now have fully booked flights. Restaurants are struggling to hire cooks and waiters. Why wouldn’t you expect the cost of airfare and meals to rise? Stock prices for JetBlue and Cheesecake Factory surged over 150% from their lows in Spring 2020.

Do price increases signal a coming wave of inflation? Or a temporary snapback following the economic downturn in 2020? This is THE great debate. Is this a sign for years to come? We don’t know. But future inflation is one of many factors that investors must take into account when crafting their initial portfolios.

Why adjusting your portfolio during inflation = market timing

If rising inflation will persist—and do so for a long time—investors may want to hedge against higher inflation. Others might see it as a market timing signal and make changes to their investment portfolio. Remember this: Market timers would need a rule that directs exactly when and how to revise current investments. “I’ll know it when I see it” isn’t a strategy at all. I believe that a rule based on inflation estimates its market timing dressed in different clothes.

A successful effort means you have to somehow guess when to revise your portfolio and when to change it back. Market timers get it wrong over and over again. Remember, current market prices already reflect the concerns—including inflation. Market timing creates a lot of stress when you should just remain disciplined with a strategy.

[bctt tweet="Why is adjusting your portfolio during inflation the same as market timing? Hear my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Is inflation moving higher a negative?

Imagine it’s New Year's Day in 1979. The market produced a positive return in 1978, ending up 6.6%. What’s the problem? The return failed to keep pace with inflation for the second year in a row. Inflation in 1978 was 9%. Your crystal ball should inform you that over the next two years you’d see back-to-back years of double-digit inflation for the first time since WWI. You’d be right. Inflation was 13.3% in 1979—the worst on record. In 1980, inflation was 12.5%.

If you had a crystal ball, you may have gotten out of stocks. In 1974, the inflation-adjusted total return for US stock was -35.05% among the five worst returns going back to 1926. The only problem? You didn't know what stock returns would be in the face of inflation. In the same two-year period that inflation accumulated over 25%, the S&P 500 was up 56%! If you took your money out, you missed out on those returns.

Why does any of this matter?

So much of the recent news regarding inflation is linked to things like government spending and US debt. We can’t minimize the problem. But the expected consequences of these issues are likely already reflected in the stock prices, mutual funds, and 401ks. There are always concerns. The future is always uncertain. But the willingness to bear uncertainty is what gives you the opportunity for profit. We have to put up with bad news and negative returns. There will always be something to worry about. That’s why you must address the uncertainty in your initial portfolio design instead of in emotional responses. Don’t risk your future on your emotions.

[bctt tweet="Why do you need to address uncertainty in the market in your initial portfolio design? I share the “Why” in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

The Big Basement Video on the DIY Network
Everything Screams Inflation by James Mackintosh

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The 4 Pillars of the “New” Definition of Retirement, Ep #174

Fri, 23 Jul 2021 05:00:00 -0500

Edward Jones recently completed a large study on the 4 pillars of the “new” retirement. So in this episode of Best in Wealth, I’m going to talk about some of the topics covered in this study: changing times, the definition of the new retirement, the definition of success, and the 4 pillars. Don’t miss it!

Outline of This Episode

[1:37] How do you feel about change?
[4:08] The speed of change is accelerating
[8:13] The definition of the new retirement
[14:00] The definition of success
[18:56] The 4 Pillars of the New Retirement

The speed of change is accelerating

Retirement has completely changed over the last 10–50 years. People used to work until 65, retired, and didn’t live much longer. People lived on pensions and social security. 401ks weren’t in existence. Now, people are living longer than ever (the average life expectancy is projected to skyrocket from 47 at the start of the 20th century to 85 by 2020).

The aging of the massive Boomer generation is unprecedented. 86 million people will be over the age of 65 in 2050. People are also less prepared for retirement than ever before. Of people ages 45–54%, 42% do not have any retirement savings. The median retirement balance is only $100,000. Retirement was already transforming before COVID-19, the pandemic disrupted retirement as we know it.

The definition of the new retirement

56% percent of people think that the definition of “New Retirement” is a new chapter in life. I’m a positive guy and I think this is a great way to think about retirement years. 28% think it’s a time for rest and relaxation. But I think this is missing the mark. You can’t just wake up and watch Netflix all-day-every-day. It won't create meaning in your life. You want to build a routine with purpose.

9% believe retirement will be a continuation of what life was. Some people don’t want to leave their job or career because it brings fulfillment to their life. Others believe retirement is a continuation because they can’t afford to retire. 7% of people called new retirement the beginning of the end. I hope anyone listening to this podcast doesn’t feel this way.

That’s why you need to start planning your new chapter right now.

The definition of a successful retirement

This study also covered what people thought the definition of success was, defined per age group. So they asked Millennials, Gen Z, Gen X, Baby Boomers, and The Silent Generation the same questions about their definition of success: Is it achieving wealth? A career that you’re proud of? A positive impact on family and others? Or being happy with who you are and what you do?

A lot of people define success early in life but it evolves and changes as they get older. 26% of Gen Z, 13% of Millennials, 6% of Gen X, 4% of Boomers, and 3% of The Silent Generation believe that success is achieving wealth.

What about having a career that you’re proud of? 18% of Gen Z, 19% of Millennials, 9% of Gen X, 7% of Boomers, and 11% of The Silent Generation believe that success is having a career that you’re proud of. The older people get, the less important it becomes.

What about having a positive impact on family and others? What about being happy? Listen to hear where these landed on the spectrum!

The 4 Pillars of the New Retirement

I talk often about building abundance in the four cornerstones. Money is only one facet that fuels the other things. According to the Edward Jones study, their four pillars are:

Health: A longer lifespan and more years in retirement is the future. The most feared condition in America is Alzheimer’s and other forms of dementia. 90% of Americans older than 50 believe that the definition of “health” is being able to do the things that you want to.
Family: According to this study, family is the greatest source of satisfaction, support, and purpose. But adults 50+ don’t want to become a burden on their families. They’re willing to offer financial support to their family even if it impacts their financial future. 72% of retirees fear being a burden to their families.
Purpose: Retirees say their greatest source of purpose comes from spending time with loved ones. They value learning and growing in their new chapter. Sadly, one in three retirees struggles to find purpose in retirement. They don’t realize they can use their talents and knowledge for the benefit of others.
Finances: The role of money in retirement is to provide security and freedom. Over half of retirees wish they had budgeted more for unexpected expenses. The cost of healthcare worries them more than a recession. ⅔ of American’s who plan to retire say they have no idea what their health and long-term care costs will be in retirement.

These are all reasons why you must plan now for the next chapter of your life. Learn more about this topic by listening to the whole episode!

Resources Mentioned

The Four Pillars of the New Retirement

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Don’t Let Your Investments Drift Away, Ep #173

Fri, 09 Jul 2021 05:00:00 -0500

What is style drift? Style drift is when the fund you’re invested in drifts away from its investment objective. Why is this problematic? How can it impact your portfolio if your mutual fund isn’t actively managed? In this episode of Best in Wealth, I’ll share more about style drift, give an example of what it looks like, and I’ll tell you one of the best ways to avoid it. Check it out!

[bctt tweet="Don’t let your investments “drift” away! Find out what I mean in this episode of Best in Wealth. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:09] My summer working in Alaska
[5:40] Why I prefer mutual funds and ETFs
[9:24] You want allocations in every major asset class
[10:21] Using the small-value asset class as an example
[19:43] Don’t let a huge drift impact your portfolio

Why I prefer mutual funds and ETFs

After I got my Bachelor’s degree, I took a lot of classes on investing to learn how to buy/sell stocks. After all of that, I realized that traditional active management is probably not the right method for a family steward. Why? When I look at The Center for Research in Security Prices, I see that the smartest people—who are being paid millions—don’t do very well. Only 20–25% actually beat the market—and the odds only get worse over a 15-year timeframe. I knew traditional active management wasn’t for me, so I turned to index funds.

An index fund replicates an index (like the S&P 500). An index is not an investment, it’s simply a benchmark to use to compare investments. The S&P has several indexes, with the S&P 500 looking at the largest 500 companies. Russell is another company that builds indexes (i.e. the Russell 2000 looks at the 2,000 smallest companies).

Listen to hear why I think you need allocations in every major asset class!

Using the small-value asset class as an example

Small-value has been on a tear for 9 months. When that happens, you want to capture everything it has to offer, right? AMC and GameStop are priced squarely in the large-cap growth space, yet represented 2% of the Russell 2000 value index (as of May 31st, 2021). How can that be? Investors tracking the Russell 2000 value index may be surprised to learn that the list of holdings inconsistent with the index’s definition goes much deeper.

At the end of June, Russell does an “annual reconstitution.” That means that the companies that no longer fit the “style box” of that index are removed. Then it brings other companies in. What’s the issue with that? They only do it once per year. Since June 30th of 2020, a lot of things have happened. As of May 31st, 2021, 16% of the index’s weight was accounted for by stocks that didn’t belong there. That’s a problem! If you want small-value, it’s now drifting away from where it should be. Why is it a problem? You aren’t capturing everything value has to offer.

[bctt tweet="How can the small-value asset class be used as an example of style drift? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Invest in a different management strategy

If you’ve listened to me for a while, you know I like companies like Dimensional Fund Advisors. Why? They have a small-value fund that is reconstituted as often as possible. When you don’t, it’s like brushing your teeth once a year for 24-hours straight instead of doing it twice a day every day for 2 minutes. A straight index fund is only brushing their teeth once a year. If a company like GameStop moves from small-value to growth, it can be removed. These funds don’t have to wait until the scheduled yearly reconstitution day.

Research tells us that the performance of small-cap value tends to be delivered by a small subset of the asset class. You don’t know when it will show up. So when you don’t rebalance frequently, it can reduce the likelihood that you’ll be holding the right companies at the right time when the premium comes in. The fix? Daily portfolio management.

The Russell 2000 Value year-to-date is up 27.47%—awesome, right? The DFA Small Value is up 35.35%, in part, because of daily portfolio management. That doesn’t even mean rebalancing every single day. If you can rebalance portfolios incrementally and keep the fund focused on the target asset allocation, you can be in the best position to capture exactly what the market has to offer. Listen to the whole episode to learn more about style drift and how to prevent it!

[bctt tweet="Why do you want to invest in mutual funds that are actively managed? I share my thoughts (and some research) in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

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4 Factors that Help Determine What You Need to Save for Retirement, Ep #172

Fri, 25 Jun 2021 05:00:00 -0500

“How much do I need to save for retirement?” This is a question I am asked all the time, often before I know anything about the person I am meeting with. Do they need $1 million? $2 million? People talk to friends and family about retirement and question if they have enough. People often think that everyone has the same number. But the truth is that everyone’s needs are different. What you need to save for retirement depends on four factors. Listen to this episode of Best in Wealth to find out what they are.

[bctt tweet="What 4 factors will help you determine what you need to save for retirement? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:29] A reminder that I am getting old
[3:29] How much do you need to save?
[7:08] Factor #1: How much will you spend?
[12:00] Factor #2: How much will you earn on your investments?
[15:3] Factor #3: How long will you live?
[17:40] Factor #4: How much can you withdraw yearly?
[21:24] Your number is unique to you

Factor #1: How much will you spend in retirement?

Do you have a monthly spending plan? Will your spending in retirement be the same it is now? The rule of thumb is that you will need 80% of your pre-retirement income in retirement. Why only 80%? When money comes out of your pre-tax accounts, it does count as income—minus 7.15% in social security and medicare taxes. That brings you down to 93%. What else brings it down to 80%? Hopefully, you are maxing out your 401k, which could make up 25% of your income. This can bring it down to 80%. But you need a spending plan to figure out what you will need.

Any client we work with has to set up a spending plan, which goes in one column. A second column will look at expenses in retirement. There may be other things you are spending money on in retirement that you did not pre-retirement. Are you planning on traveling? We make a goals-based plan for your retirement. We start with necessary living expenses like property taxes and healthcare. Then we add in dream expenses like buying a house up North or your dream boat.

Factor #2: How much will you earn on your investments?

You may be thinking, “How will I know?” Well, we know the S&P 500 has averaged around a 10% return for the last 95 years. Secondly, different people have different risk levels. Most people are not 100% in stocks. My riskiest retirees have 60% in stocks and 40% in bonds. Others may have closer to 60% bonds and 40% stock. We expect a lower return in the long run with less risk. To figure out what your number is, you must figure out how your money is being allocated in retirement. We will do things like strategic rebalancing and drawdown strategies to add value to your portfolio. There is a chance you can earn more on your investments. We can come really close to estimating what your return will be before expenses and plan from there.

[bctt tweet="How much will you earn on your investments? Estimating this can help you figure out what you need to save for retirement. Learn 3 other factors in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning " username=""]

Factor #3: How long will you live?

When you are planning for retirement, the age you retire matters. But how long you are going to plan matters, too. Some people plan their retirement to age 110, though the odds of living that long are slim. It is probably not in your best interest to plan that far out. But only planning until 80–82 is not a good rule of thumb either.

You need to discuss what your health is like. Are you a smoker? What is your parents' health history? Did they live longer than the average person? What about your grandparents? Without knowing your health history, planning until about 93 is a good place to start. Why? There is a 30% chance you will live until 90. If you are married, the odds are higher. But the general rule of thumb is 93.

Factor #4: How much can you withdraw from your savings every year?

People with riskier portfolios can probably afford to take a higher percentage out each year versus those with a conservative portfolio. A man named William Bengen coined the 4% rule: If you have $1 million in year one of retirement, you can take out 4% or $40,000. In year two, you take a raise for inflation. If it was 5%, you then take out $42,000. Each year you take a cost of living raise. After 10 or 20 years, you may be taking out $60,000–$70,000. If you do that with a 50/50 portfolio, you have a good chance (93%) of not running out of money. Different rules allow you to take more or less when you need to. Flexibility really helps your portfolio. If you do not have flexibility, you will have to take a consistently low amount. Get the full picture by listening to this episode of Best in Wealth!

[bctt tweet="How much can you withdraw from your savings every year? Knowing this can help you decide what you need to save for retirement. Learn 3 other factors in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning " username=""]

Resources Mentioned

William Bengen: https://en.wikipedia.org/wiki/William_Bengen

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Should You Buy the Top 10 Companies in the US? Ep #171

Fri, 11 Jun 2021 05:00:00 -0500

Everyone is familiar with the top 10 companies in the US. We’re talking companies like Apple, Microsoft, Google, Facebook, etc. But should you have a large amount of money in the top ten? They have all done really well the last 5–8 years. How many of the top ten biggest companies should you have in your portfolio—if any? I share my thoughts in this episode of Best in Wealth!

[bctt tweet="Should you buy the top 10 companies in the US? Listen to this episode of Best in Wealth to hear my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:12] What did you do for Christmas?
[2:51] The biggest companies in the US
[5:04] Before reaching top ten status
[9:46] After reaching top ten status
[12:28] Stop chasing the biggest stocks

The performance of the top 10

The S&P 500 consists of the largest 500 companies in the United States. It’s averaged 10% per year in the last 95 years. How have the top 10 companies done compared to the S&P 500?

How did companies perform 10 years before they reached top-10 status? The top 10 averaged 10% per year better than the benchmark—almost 20% per year—before reaching top 10 status.

What about five years before they hit the top 10? The returns were 19% higher than the S&P 500 (on average). If you can figure out who the top 10 companies are 5 years before they hit the top ten, you’ll do 20% better than the benchmark. Even better, three years before they hit top ten status, they performed 24.2% better than the benchmark. As these companies grow really quickly they garner awesome returns.

But the difficult part? You have to figure out who these companies are well before they reach the top 10.

[bctt tweet="How did the top 10 biggest companies in the US perform the 10 years before hitting top-10 status? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

After reaching top ten status

Most people chase the top 10. They look at past returns and expect those to be future returns. But is it worth it? Three years after reaching top ten status, these companies are still doing better than the S&P 500—but only 0.07% better. Five years after reaching top ten status, companies have lagged the S&P 500 by an average of -0.6%. 10 years after reaching top ten status, they lag the S&P 500 by 1.5%. You’d be better off investing in the S&P 500 versus the top ten companies.

Intel posted average annualized returns over the benchmark of 29% in the 10 years before it hit the top ten. It underperformed the market by almost 6% per year after hitting the top ten. Google’s returns were cut in half after hitting the top ten. If you finally invested in them, you’re chasing returns.

Stop chasing the biggest stocks

When you chase past performance, you’re likely losing money. You can’t afford to be a loser when you’re taking care of your family. You must be in an investment philosophy that gives you the best chance for success. Chasing the top ten biggest companies is a loser’s game. What do you do instead?

Develop a strategy that you can stick with that isn’t based on chasing performance. It must have discipline at its core. You’ll be set up for when returns start pouring in. Too many people don’t stay disciplined and chase returns they aren’t seeing. That’s the last thing you can afford.

[bctt tweet="Stop chasing the biggest stocks. Learn WHY—and what to do instead—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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3 Things People Question about Dave Ramsey’s Baby Steps, Ep #170

Fri, 28 May 2021 05:00:00 -0500

We can all agree that sleep is important, right? Children need 9+ hours of sleep. Adults need at least 7–8 hours of sleep. In our house, we go to bed really early, between 8:30–9. Why? If I don’t get a good night’s sleep, everything else goes wrong. Many people struggle to get a good night’s sleep because they’re stressed about money.

If money keeps you awake at night, there are some things you can do. Dave Ramsey’s Baby Steps are a great place to start—but many people struggle with some of the steps. So in this episode of Best in Wealth, I’ll talk about the objections many people have and how you can overcome them.

[bctt tweet="In this episode of Best in Wealth, I talk about 3 things that people question about Dave Ramsey’s Baby Steps. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #BabySteps #DaveRamsey " username=""]

Outline of This Episode

[1:04] Leave Best in Wealth a Review!
[1:30] The importance of good sleep
[3:36] What keeps you up at night?
[7:25] The topic of emergency funds
[11:38] Why pay off your house early?
[15:00] Why should I own bonds at all?

Does money keep you up at night?

Does money trouble keep you up at night? I’ve been there. I had a lot of debt and was constantly worried about paying bills and climbing my way out. I don’t have any debt now—but I do have stress. Will I have enough for retirement? Have I saved enough for my kids to go to college? Do I have all of my estate planning documents and will in place? That’s why I like Dave Ramsey. His Baby Steps can take a lot of stress out of your life.

Step #1: Do you have $1,000 in savings?
Step #2: Have you paid off all of your credit card debt? Would you feel less stressed then? Would you sleep better at night? Probably.
Step #3: Do you have an emergency fund?
Step #4: Are you saving 15% of your gross income for retirement?
Step #5: Are you saving for your child's college education?
Step #6: Can you pay off your house early?
Step #7: Are you able to build wealth and give freely?

Doesn’t all of this sound great? Would it lead to less stress in your life? Here’s the problem. Many family stewards have problems with some of these baby steps.

Question #1: Why would I want my money wasting away in a bank?

I’m often asked, “Why do I need an emergency fund if I can do better in the market with my money?” People say things like, “I’ll just use a home line of credit as my emergency fund.” They’d rather invest the money in the stock market than have an emergency fund sitting in the bank making nothing. Here’s the thing, it’s not always about what’s going to get you a better return. Sometimes it’s about sleeping better at night.

A lot of people used their home equity line of credit as their emergency fund. Remember that housing bubble crisis? Banks were in deep trouble. There were no emergency funds because banks stopped offering lines of credit. The bank can take it away whenever they want. That’s not security. That’s why you want 3–6 months of an emergency fund in your bank account.

[bctt tweet="What’s the point of an emergency fund? Why would I want my money wasting away in a bank? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #BabySteps #DaveRamsey" username=""]

Question #2: Why pay off your house early?

Why should you pay off your house early if your interest rate is 2–3%? It makes sense to invest that money in the market and do better. My head thinks the same way. There are a couple of ways we can look at this. If you’re investing 15% of your income and savings for your kids' college, why not pay off your house sooner rather than later? Paying off your house is a goal, why not make it happen now?

Here’s an alternative: You could create a brokerage account just for paying off your home. You can put an extra house payment in it every month, knowing that you’re going to use the money to pay off your house in the end. There’s no guarantee in the stock market, but it’s a decent alternative.

Question #3: Why should I own bonds at all?

People often ask me why they should own bonds when stocks perform better overall. Dave Ramsey doesn’t like bonds either. Stocks perform better than bonds because they are far riskier. Bonds carry far less risk. They’re in your portfolio to lower your overall risk. If you’re trying to get the most return you can possibly get, but stress out every time the stock market is down, it does you no good.

William Bernstein says, “When you’ve won the game, stop playing with the money you really need.”

How much risk can you actually stomach? How old are you? How long can you handle a downturn? This helps advisors create a portfolio. I prefer to look at it differently. I want to know what your required rate of return is. If you only need to average 6% a year, why take the extra risk?

To hear the full discussion about Ramsey’s Baby Steps—and the issues people have with them—listen to the whole episode!

[bctt tweet="Why should you own bonds at all if stocks perform so much better? I share some thoughts on the matter in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #BabySteps #DaveRamsey" username=""]

Resources Mentioned

William Bernstein

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Start with the End in Mind, Ep #169

Fri, 14 May 2021 05:00:00 -0500

Everyone listening to this podcast is going to die someday. It’s not always fun to think about, but it’s true—death is our destiny. What do you want to do with your life before you die? Are you putting things off consistently, saying “I’ll do it later?” What if there is no later? It’s time to start planning with the end in mind. Learn how to do it in this episode of Best in Wealth!

Outline of This Episode

[1:19] You’re going to die someday
[3:56] Start with the end in mind
[9:01] Why do you start at the end?
[11:44] How do you do it?
[12:49] A visualization exercise
[16:30] Design your retirement path

The journey to the end

Steven Covey wrote the book “The Seven Habits of Highly Effective People.” The 2nd habit in his book is based on your imagination. It’s the ability to envision in your mind what you can’t see with your eyes. It’s starting with the end in mind! It’s based on the principle that all things are created twice—first in your mind and then physically.

If you’re a basketball player, you can lay in bad and imagine yourself making free throw after free throw. Then you get out on the court and do it. I taught both of my daughters this strategy. Envision yourself 20 pounds lighter and what you can do differently. Then you can go make it happen. You can do this with anything.

Why you NEED to start with the end in mind

There are three reasons you need to start with the end in mind.

It brings clarity. This is why I love retirement plans. You can view and change your dreams whenever you want—but you have to think about it first. Do you want to go to all of the national parks? How will you feel when you check off the last one? Dreaming brings clarity.
It brings efficiency. If you know where the end is, you can fill in the steps to get there. If you don’t know where you’re going and let the waves take you wherever they may go, where does that leave you?
It brings you purpose. We live day by day going to work, watching Netflix, and eating meals. But when you think about the end, you think about what will fulfill you. What gives you a purpose? Purpose comes after having the confidence that you know you can retire.

You know what it is and why you should do it. But how do you do it?

How to start with the end in mind

How do you figure out what you want your retirement to look like? You want your basic living expenses and healthcare covered, right? Now think about the things that you want. A cabin up north? Vacations in warm weather? A new boat or sports car? What about wishes? If you have money left over, are you giving money to your kids, church, or favorite causes? You have to start with a dream. If you need help, work with a financial planner to walk through the process with you.

An important visualization exercise

If you’re listening, close your eyes. Imagine that it’s morning and you just got out of bed. You have to prepare to go to an event later in the day. You don’t know what it is, but you know it’s important. Imagine yourself getting ready. What clothes will you wear? How will you style your hair?

What’s the weather like outside? What are your neighbors doing? Is there a lot of traffic? You arrive at a building, walk to the front doors, and walk in. As soon as you walk in, you’re greeted by your loved ones.

You walk into a giant auditorium, greeted by even more loved ones. Everyone who has ever mattered to you is there. How do you feel being there? It hits you: you’re at your own funeral. Everyone is there to celebrate and reflect upon your life.

What will all these people say at your funeral? What do you want them to say? This exercise helps you realize what and who matters to you. Use this to your advantage. Your end is how you’re remembered.

What do you do next? Listen to this episode of Best in Wealth to learn more!

Resources Mentioned

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The Next New Normal Is On the Horizon, Ep #168

Fri, 30 Apr 2021 05:00:00 -0500

At the end of March 2020, the S&P 500 was down nearly 20%. The world was scrambling. Many experts hypothesized where we’d be in the next year. Everyone had an opinion. But I don’t remember anyone that said the S&P 500 would be up 56% over the next 12 months. No one could have predicted that.

David Booth wrote an article months ago about the “new normal.” He talked about expected market downturns a couple of times in a decade. When we have corrections, bear markets, and recessions—it’s normal. We just don’t know when they’re coming. You can’t predict a crisis—but you can plan for it. So how do you do that? What is the next “new” normal? Listen to this episode of Best in Wealth to hear my thoughts!

[bctt tweet="The next “new normal” is on the horizon. What does it look like? Hear my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:17] The importance of a calendar
[6:33] What is the next normal?
[12:00] The US Small Cap Value Fund
[16:19] Sticking to a long-term investment plan
[17:57] Are you investing—or gambling?
[20:27] What is the next new normal?

The US Small Cap Value Fund

Smaller companies tend to do better over time. The expected return is higher. The US Small Value was down 39.02% at the end of March 2020. What happens when you look at a small value asset class and see that it’s down that much? Most people make a change. People kept saying that “value was dead” and that you should get out. But that’s not what a family steward does. Instead, we did some strategic rebalancing.

Instead of fleeing, we invested more money into that asset class. Why? Because we believe in long-term expected returns. We want to stay invested and stay in our lane. Fast-forward to March 31st, 2021. The US Small Value is up 112.09%. The Russell 2000 Value—the benchmark for this dimensional fund—had a gain of 97.05% but still nowhere near Dimensional’s. The S&P 500 was only up 25.71% overall.

Sticking to a long-term investment plan

Sticking to a long-term investment plan isn’t easy. But discipline and patience are necessary for a family steward. We were all stressed last March. We all felt pressure to make changes for the sake of reacting. People wanted to get out of the market to reduce uncertainty. But getting out of an asset class increases uncertainty. It forces you to choose the best time to get back in. There are people right now that got out of the market and are still sitting on the sidelines. I know people who pulled out during the 2008 recession who are still out of the market.

[bctt tweet="Why is sticking to a long-term investment plan important to your long-term success? I share some thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Are you investing—or gambling?

Many people who think they’re investing are actually gambling. It’s a simple distinction. If you’re trying to time short-term market movements, you’re gambling. Staying focused on a long-term strategy is hard work. It’s not doing nothing. Short periods like the 1st quarter of 2020 aren’t signals of future performance. It’s a reminder of how hard being a long-term investor can be.

If you’re investing in all of the asset classes you should be in, you don’t know when returns will show up. That’s why you stick to your plan. Every financial crisis is different but the best way to deal with them is always the same. You can control your response to the crisis. Talk about this stuff when times are good so you’re prepared when times are tough. The market will go up and down.

The new normal is expecting uncertainty and committing to a plan that addresses it. It’s rising above the temptation to make changes when things get tough. It’s understanding the difference between investing and gambling. It’s remembering how good it feels when things work out. Make thoughtful planning your new normal. Need help doing that? Schedule a call with me!

[bctt tweet="Are you investing—or gambling? Many people who think they’re investing are actually gambling. What’s the distinction? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

Best in Wealth Episode #148
Best in Wealth Episode #161
The Next Normal by David Booth
Dimensional US Small Cap Value

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The 5 Types of Retirement Savers: Which One Are You? Ep #167

Fri, 16 Apr 2021 05:00:00 -0500

Do you know what your personality type is? Do you know what kind of saver you are? Knowing these things can help you learn more about yourself—and determine what you need to do to have a successful retirement. If you’re interested in learning more about the 5 personality types—and what it means for you—listen to this episode of Best in Wealth!

[bctt tweet="There are 5 types of retirement savers: which one are you? Learn more in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:14] The 4 types of personality traits
[5:27] #1: The ambitious risk-taker
[7:33] #2: The cautious preparer
[10:52] #3: The optimistic dreamer
[13:14] #4: The purposeful planner
[17:35] #5: The uncertain struggler
[20:15] What each type should do

The 4 types of personalities

Have you taken a personality test to learn more about yourself? According to an article published on Today.com, there are four main personality types, scored based on personality traits: openness, agreeableness, extraversion, neuroticism, and contentiousness. Understanding where you rank can help you predict your personality type. So what are they?

Average: Most people are “average” and score high in neuroticism and extraversion while scoring low in openness.
Reserved: reserved people are introverted and conscientious, neither open nor neurotic.
Role models: Role models are natural leaders. They are agreeable, open, extraverted, and conscientious.
Self-centered: Self-centered people score high in extroversion but are below average in all the other categories: openness, agreeableness, and conscientiousness.

To grow, you need to know who you are. I scored the highest on the need for recognition and it’s true—I love a pat on the back. Once in a while, at a previous job, my sales manager would say, “Good job, Scott.” Unfortunately, he always followed it up with, “Your personality trait says I should do this.” Where do you land?

#1 The ambitious risk-taker

According to Barrons, ambitious risk-takers are educated, optimistic, and young.

49% of the people surveyed were under 45
28% were under the age of 35
72% worked full-time
52% have a bachelor's degree
Men are 54% of this group
43% have a financial advisor.

They are more likely to be open to new opportunities. 75% expect their income to last throughout retirement. They think they are experts in retirement planning. Is this you?

[bctt tweet="When it comes to retirement planning, are you an ambitious risk-taker? Find out what category you fall into in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

#2: The cautious preparer

Are you a cautious preparer?

56% of this group are men
40% hold a bachelor’s degree
68% are 45 or older (20% are 65-75)

Many cautious preparers have prepared for the worst and stuck with tried and true investment strategies. They’re full of questions, do a ton of research, but rely on the experts. 27% are actually retired (the highest percentage of any type).

#3: The optimistic dreamer

Here are the stats on the optimistic dreamers:

Women make up 57% of this group
49% are under 45 and 26% under 35
Only 46% have a high school diploma

To this group, retirement seems to be far away. They expect to lead active and rewarding lives as seniors. They’re optimistic—but don’t have the assets they need. They have a basic understanding of retirement plans but aren’t comfortable with it. But they’re usually making contributions to their 401k. Few optimistic dreamers know their income needs for retirement. They make financial decisions based on instinct—an awful idea.

#4: The purposeful planner

Purposeful planner sounds good, right?

Men are 58% of this group
52% have at least a bachelor's degree
42% are 55 or older.
Many are nearing retirement or are already retired

These are well-positioned to enjoy retirement. They devote time to retirement planning. About 50% have extensive knowledge and enjoy managing their finances. 50% hire a financial planner. 78% of this group expects their income to last throughout retirement. They’ve done projections and know how much they need to save. They average 7 retirement goals or more and have a solid retirement plan. These are the most confident of the bunch.

[bctt tweet="A purposeful planner is well-positioned to enjoy retirement. Learn about 4 other categories of retirement savers in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

#5: The uncertain struggler

The “uncertain struggler” group is generally pessimistic about living comfortably in retirement. Many expect to rely on social security and help from family to get by.

Women make up 61% of this group
Only 56% have a high school diploma
39% work full-time
50% are 45 or older

They rely on instinct and recommendations from family and friends to make financial decisions. They don’t know much about retirement planning, don’t have a plan, and don’t know what their income needs will be in retirement. Only 24% expect their savings and income to last throughout retirement. This is the lowest percentage among the 5 groups.

Are you struggling with a lot of anxiety as you get closer to retirement? If you don’t have a fiduciary or CFP, seek one out today. Why? Everyone needs growth in their retirement—and whether you’re too cautious or too risky—you need a balanced approach.

Resources Mentioned

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3 Reasons Why Bitcoin is a Speculative Investment—At Best, Ep #166

Fri, 02 Apr 2021 05:00:00 -0500

John Oliver once said, “Everything you don’t understand about money combined with everything you don’t understand about computers—that’s Bitcoin.” Bitcoin is the most famous of over 4,000 different cryptocurrencies. All of these currencies are the subject of both endless debate and fascination. Many people are speculating about what role it should play in your portfolio. So in this episode of Best in Wealth, I talk about the volatile path of Bitcoin—and three reasons why financial stewards shouldn’t hedge their bets on cryptocurrency.

[bctt tweet="In this episode of Best in Wealth, I share 3 reasons why Bitcoin is a speculative investment—at best. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Crypto #Cryptocurrency #Bitcoin" username=""]

Outline of This Episode

[1:08] I got my first COVID shot!
[4:13] What to Make of Bitcoin now?
[7:50] Why the steep rise?
[9:08] Bitcoin and gold as an investment
[12:13] THREE issues to consider

The volatile journey of Bitcoin

Bitcoin hasn’t been around that long. It was steady for a long time around a couple hundred to a couple of thousand dollars. But had a dramatic rise to $20,000 in 2017. What happened next? It plunged at the beginning of 2018 and a lot of people lost money. In October 2020, it shot straight up. It’s worth over $53,000 per coin. It has proven extraordinarily volatile—gaining or losing 40% in a month or two. It’s been a wild ride.

So what’s led to this volatile track record? Why is the cost of Bitcoin continuing to rise? Bitcoin is earlier to purchase now. There are also a lot more people talking about it. More millennials and institutions are buying. Others feel it’s a great hedge against inflation. But Bitcoin is of limited value as a reliable medium of exchange and as a risk-reducing asset. It’s not a hedge against a well-diversified portfolio.

Bitcoin and gold as investments

Assessing the merits of Bitcoin as an investment can be difficult. It means you have to lower your allocation of stocks, real estate, or bonds. You have to give up something to get Bitcoin, right? We expect to receive future income from stocks, real estate, etc. As a stock-holder, we participate in the profit.

Bitcoin is similar to holding gold as an investment. Even if they’re held for decades, the owner may never receive more Bitcoin or gold. It isn’t clear that Bitcoin offers investors positive expected returns. You own a coin or a lump of gold, hoping that supply and demand drive the worth in an upward trajectory.

Some say Bitcoin is worth more than gold. Why? Because you can discover more gold, which means what you’re holding would inevitably be worth less. On the flip side, there’s a finite number of Bitcoins—as far as we know. But could they make more coins? Can code be written differently in the blockchain scheme? Could cryptocurrencies merge? There is no guarantee.

[bctt tweet="Why has the price of #Bitcoin been so volatile? What made it skyrocket? Listen to this episode of Best in Wealth for my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement #Crypto" username=""]

THREE reasons why Bitcoin is speculative

Bitcoin—and other cryptocurrencies—are speculative at best. Here are three reasons why, as family stewards, investing in Bitcoin isn’t responsible.

Firstly, it’s not backed by an issuing authority and exits only as computer code, kept in a digital wallet accessible by password. What if you forget your password? There is NO resource for any forgetful owner of Bitcoin. After a limited number of password attempts, you can permanently lose access, therefore rendering it useless. A holder of more than $200 million worth of Bitcoin can’t access them. Can you imagine being that person? This isn’t unusual. 20% of all outstanding Bitcoin are stranded and unavailable to rightful owners.
Secondly, Mt. Gox—the Bitcoin exchange launched in 2010—handled over 1 million accounts in 239 countries and 90% of transactions. It suspended trading and filed for bankruptcy in 2014. They announced that hundreds of thousands of Bitcoins were lost or stolen. Your investment was gone. Sounds like the wild west to me.
Lastly, The UK Financial Conduct Authority prohibited the sale of crypto products to investors. Why? Because of the nature of the underlying assets, the presence of market abuse and financial crimes, extreme price volatility, inadequate understanding of assets, and the lack of clear investment needs.

I wouldn’t personally gamble my future on Bitcoin. Listen to this episode for the whole story!

[bctt tweet="In this episode of Best in wealth, I share THREE reasons why Bitcoin is a speculative #investment. Listen to learn more! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement #Crypto" username=""]

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6 Behavioral Biases that Can Negatively Impact Your Long-Term Investments, Ep #165

Fri, 19 Mar 2021 05:00:00 -0500

Financial discipline is imperative to the success of your long-term investments. But your behavioral biases can get in the way of that long-term success. Biases allow you to be short-sighted and you forget about the big-picture consequences of your actions. What are some of those biases? How do you avoid them and make sound investment decisions? I talk about 6 behavioral biases in this episode of Best in Wealth. Don’t miss it!

[bctt tweet="6 behavioral biases can negatively impact your long-term investments. What are they? Find out in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Behavior" username=""]

Outline of This Episode

[1:07] Leave Best in Wealth a review!
[2:13] Personal + financial discipline
[4:28] The definition of discipline
[7:13] Behavior #1: Herding Behavior
[9:30] Behavior #2: Overconfidence
[11:48] Behavior #3: Myopic Loss Aversion
[13:29] Behavior #4: Recency Bias
[16:05] Behavior #5: Home Market Bias
[17:58] Behavior #6: Disposition Effect
[19:58] What’s your punishment?

The Definition of Discipline

According to a quick internet search, discipline is “The practice of training people to obey rules or a code of behavior using punishment to correct disobedience.”

Investors often think that they’re disciplined, right? But the truth is that most of us aren't good investors. That’s why you must practice discipline. But we all deal with behavioral biases that impact our investing experience. 6 behaviors that can affect your investment returns. What are they?

Behavioral Bias #1: Herding Behavior

One word: Bitcoin. We are hard-wired to look to others for the right way to behave. The problem is that this leads to a lack of independent thought and evaluation. You see Bitcoin continue to climb because of supply and demand. We feel like we need to follow the herd and buy into Bitcoin now. But it means you’re chasing the returns. If you buy in at $50,000 and the market corrects, you may be down thousands of dollars. If you look at stocks as a whole in the last 6 months, there are so many better places you could’ve been than technology stocks.

[bctt tweet="Humans are hard-wired to look to others for the right way to behave. How does this impact your #investment decisions? Find out in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Behavioral Bias #2: Overconfidence

Overconfidence bias leads investors to overestimate their knowledge and ability—while underestimating risk. We think we are smart. But it’s nearly impossible to outsmart the market. Only about 25% of actively managed funds beat their index. The efficient market hypothesis states that stock prices reflect all market information. Remember one thing: everything that we know about a company or sector is already priced into the market. If you aren’t diversified, you are pinning yourself against millions of investors. Overconfidence can kill your portfolio.

Behavioral Bias #3: Myopic Loss Aversion

Loss aversion means that investors are more sensitive to losses than gains. This occurs more frequently when investors check their performance every single day. Oversensitivity creeps in when you do that. This causes investors to behave irrationally and sell after a market drop which means taking a loss. When you feel good about a market gain and then see a loss—it hurts twice as bad. It makes us irrational about our money and we lose subjectivity.

Behavioral Bias #4: Recency Bias

People—including me—have short memories. We recall recent events more clearly than those in the past. It’s especially dangerous in investing. We forget about prior market declines. We take more risks when things are going well. We’re overconfident and following the herd behavior. Then we see things dive 20–30%. The same holds true when the market is doing poorly. We want to reduce our risk and attempt to time the market. It’s causing problems in your portfolio. You’re not disciplined.

Behavioral Bias #5: Home Market Bias

As investors, we have more than 90% of our money invested domestically—even though the US represents only 50% of the global market cap. We aren’t as diversified as we could be because of home bias. People like to hold their own company stock. We think we know more than the next guy or gal. We are overconfident because we “know” this company. When we have home market bias, we hold more company stock than we should. Or we hold stocks longer than we should. You have to remember that millions of people know the same stuff you do.

[bctt tweet="What is home market bias? How does it impact your #investment decisions? I share more about behavioral biases in this episode of Best inn Wealth. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Behavior #Bias" username=""]

Behavioral Bias #6: Disposition effect

Investors hate admitting that they’re wrong and even worse—taking a loss. Because of this, we tend to hang on to losers all the way down. Our overconfidence can lead to taking too many in the market. Your portfolio may have dropped quickly. You feel like you have to hold even though you’re beyond your risk level. You hold on hope that the market will ride back up. The losses hurt.

All of these behavioral biases work together to make it difficult to stay disciplined. This is what happens when you don’t have a written plan. You aren’t as disciplined as you think you are. When all of these biases are working together you’re not getting what you should from your investments.

Resources Mentioned

Dalbar

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Your Guide to Strategic Rebalancing, Ep #164

Fri, 05 Mar 2021 05:00:00 -0500

What is strategic rebalancing? Why should you rebalance your portfolio? How do you rebalance your portfolio? In this episode of the Best in Wealth Podcast, I share what it is, why you want to do it, and the best way to strategically rebalance your portfolio. Don’t miss it!

[bctt tweet="This episode of the Best in Wealth podcast is your guide to the strategic rebalancing of your portfolio. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Balance" username=""]

Outline of This Episode

[2:37] Cleaning out my junk drawer
[5:15] What is strategic rebalancing?
[9:09] Rebalancing reason #1: Risk tolerance
[12:14] Rebalancing reason #2: Buy low and sell high
[14:05] Time-based portfolio rebalancing
[18:22] Employ strategic rebalancing
[22:05] Invest in the low performers

What is strategic rebalancing?

What is strategic rebalancing? Why do you do it? Let’s say you have allocated your 401k into five different mutual funds. For example, you may be invest 20% into the following asset classes; a US fund, an international fund, an emerging markets fund, a real estate fund (REIT) and a bond fund.

Then, over time as the market goes up and down, let's say the US markets are down and the international market is doing well. Your 20% allocation in the US mutual funds drops to 18% and your international funds might be at 23%. Now, your portfolio is out of alignment. Rebalancing a portfolio is getting it back to square one, with each fund at 20%. But there are different ways to go about it.

The TWO big reasons to rebalance

At Fortress Planning Group, we define risk between 1 and 99. “1” means you hide your money under your mattress (and have next to zero risk tolerance). If you are a “99,” you are able to invest in volatile stocks (you have a high risk tolerance). Your risk tolerance should be somewhere in-between 1 and 99.

You set your portfolio to a certain risk level because it fits your risk tolerance. The market will go up and down. You cannot time it. But if your risk tolerance is a 65 and you are in a portfolio that is a 70, you may not be able to handle a volatile market. Your emotions will lead to poor decisions.

You need your risk tolerance to be in the right place. You have to rebalance so your risk tolerance stays aligned. You cannot be at risk of making emotional decisions. This is the #1 reason why you rebalance.

Reason #2 is that rebalancing offers you the opportunity to buy low and sell high. If your international mutual fund is doing well and is now at 25% of your portfolio, you can "sell high" to get your portfolio back to 20%. You can then buy your US mutual fund and while it is down, "buy low" and get the fund back up to 20% while it is underperforming.

[bctt tweet="What is strategic rebalancing? Why do you do it? Learn more in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Balance" username=""]

Time-based portfolio rebalancing

How do you rebalance your portfolio? One option is to do it at a set time monthly, quarterly, or yearly. In most 401ks, you can set it up so that it automatically rebalances. What is the best option? How often should you rebalance?

A Vanguard study says there is no perfect time to rebalance. Rebalancing monthly might be excessive and you may pay too much in fees. If you rebalance too soon, you can miss out on momentum. If recessions and corrections lasted the same amount of time, you could do time-weighted rebalancing. But no one knows how long a recession and correction will last.

If your choice is regular rebalancing, aim for yearly rebalancing. But this is not the method that I recommend. What is?

Strategic rebalancing 101

At Fortress Planning Group, we employ strategic rebalancing as often as we need to. The research suggests this is the way to get the most bang for your buck. We do not want to leave money on the table. We are okay if your balanced portfolio drifts away from the 20% allocations. We set up tolerance bands to determine when to rebalance.

If the mutual fund drifts 5–10% away from its target allocation, it is okay. We set the tolerance bands at 20%. When an allocation creeps up from 20% to 24%, it is now 20% away from its target allocation. We get a trigger to make a trade (and use sophisticated technology to manage this). I sell the proper percentage to rebalance the portfolio.

We use a 20% tolerance band because research suggests that it is the best to use. A 5% tolerance band leads to overly frequent trading and possible fees. Strategic rebalancing is believed my many to be the best way to rebalance a portfolio.

What is the upside of this strategy? What does it allow us to do that boosts the performance of your portfolio? Listen to the whole episode to learn more about the strategic rebalancing strategy we employ.

[bctt tweet="What is time-based portfolio rebalancing? In this episode of Best in Wealth I share what it is—and what the better strategy is. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Balance" username=""]

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Take Your Family Stewardship to the Next Level with These 5 Steps, Ep #163

Fri, 19 Feb 2021 05:00:00 -0500

COVID has turned the world upside down. We are all entrenched in the depth of winter. There’s a lot of hatred permeating politics. The economy is overwhelming. It feels like the walls are caving in around you, right? But none of these things are under our control.

Focusing on these things won’t make your walls stronger. You’re the one responsible for building your four walls. No one else will do it for you. You don’t want a weak house that leaks. You want a strong fortress. So how do you build your fortress? In this episode of Best in Wealth, I share 5 things you can control and focus on. Check it out!

Outline of This Episode

[1:15] Welcome!
[2:04] Growing up a carpenters kid
[4:14] The state of our world
[9:18] How to build your fortress
[10:00] #1: Take care of your family
[11:36] #2: Build your financial fortress
[14:59] #3: Be kind to others
[16:41] #4: Take care of yourself
[19:27] #5: Get spiritual

Step #1: Take care of your family

Don’t take your spouse for granted. Everyone can work on their marriage. Are you a parent? Become the best parent that you can be. How? Be present. Don’t stress about what you can’t control. Listen to your kids. A client told me that instead of asking your child “How was your day?” you have to say “Tell me about your day.” It’s a game-changer. When you work to be present, you’re pouring a strong foundation.

#2 Build your financial fortress

How can you take care of your financial fortress? Here are some ideas:

Set up a budget! Get a spending plan in place. You feel so much better. It isn’t a constraint on your money—it’s permission to spend. Don’t feel guilty when you have it as part of your spending plan.
Set up a great retirement plan. You’ll feel more secure and like you’re making better decisions with your money.
Get a sound investment plan in place. When you have an investment policy statement in place, you feel less out of control when the market dips.
Get the insurance you need (and get rid of what you don’t need).
Pay attention to your taxes.
Get estate-planning documents in order.

If this is too overwhelming, reach out to me! This is what I do for a living. I can help you get it all together.

Step #3: Be kind to others

I’m tired of all of the hatred in the world—aren’t you? Why can’t we just be kind to others? Let people pass you on the freeway. Open the door for someone. Smile. Give. You can do three things with your money: spend it, save it, or give it away. You will be happiest when you’re giving. Give a little now so you can give a lot later. It doesn’t have to be monetary—you can give your time, too.

Step #4: Take care of yourself

Everyone focuses on self-care at the beginning of a year, right? It’s so easy to start strong, then you start to go downhill. It’ll be rough at first. But once you get in the groove, you’ll want to keep those endorphins around. You also need to take care of your mental health. If you aren’t in a good physical or mental state, you’re like a hollow door. But when you’re strong—both physically and mentally—you can take on the world.

Step #5: Get spiritual

You need a sense of purpose in your life. The world is bigger than you. Don’t forget that you have someone to lean on. We all fall, but you can get back stronger than ever. When you have a strong spiritual base, it’s hard to get knocked down. You are being protected. When you feel that, your fortress is growing even stronger. You can work to be a better person every day.

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The GameStop Stock Frenzy: Do You Want In? Ep #162

Fri, 05 Feb 2021 05:00:00 -0500

If you haven’t heard about what’s happening with Reddit and GameStop stock, you must be living under a rock. It all started in a Reddit forum whose sole intent was to punish “the man.” Thousands of users banded together to run the price of GameStop up. GameStop went from $20 to $460 in a matter of days. Some people have made millions of dollars—others have lost their entire life savings. Should you get in on the frenzy? Listen to this episode of Best in Wealth for my thoughts!

[bctt tweet="Do you want in on the #GameStop stock frenzy? What do I think about it? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Stock #StockMarket #Reddit" username=""]

Outline of This Episode

[1:13] My experience with sports betting
[3:34] The Gamestop stock frenzy
[5:49] What is shorting a stock?
[10:15] The impact on short-sellers
[11:29] The impact on individuals
[18:35] Is this trend unprecedented?
[19:37] Why this trend scares me

What is shorting a stock?

Shorting a stock is when you borrow shares from a company (like a mutual fund) that owns shares of the stock you want to short. You promise to give those shares back after a set time and pay the mutual fund interest and fees for borrowing these stocks.

When the hedge fund borrows the shares, they usually turn around and sell them, betting the stock will drop. So if they sell at $20 and make $2 million and the stock price drops to $5, they go out and rebuy the stock for $500,000 to return to the mutual fund. In the process, they make $1.5 million. The hedge fund gets to keep the difference.

Hundreds of thousands of people bought GameStop, driving the price up. One year ago, the stock was selling at $4 a share and in recent days it’s hit over $400. It’s experiencing wild price swings. But you have to remember: there’s no profit until you sell.

How it impacted the short-sellers

As the stock price went up, the hedge funds got squeezed. This happens when they have to cover their losses. Some of the hedge funds had to buy back the shares that they borrowed and give them back to the mutual funds.

If they sold a stock at $20 and now have to buy it back at $300 a share, it costs them $30 million. If they previously sold them for $2 million, they lost $28 million. During this GameStop saga, hedge funds have collectively lost over $3 billion.

[bctt tweet="How has the #GameStop + #Reddit market frenzy impacted the short-sellers? I explain what’s happening in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Stock #StockMarket " username=""]

How it’s impacting individuals

I read that one kid got $50 for Christmas and turned it into $1,000. But he hasn’t sold the stock yet. Another guy had a few thousand in his account. The next day, it went up to $1 million. He quit his job to do this full-time. But he didn’t cash out. He’s holding on thinking it will go higher. Why are people holding on to stocks that aren’t worth anything?

These Reddit groups are encouraging risky trades with your whole net worth. They’re betting as much as they can at the highest possible risk. It’s the very thing that makes my stomach turn over. They seem to be more interested in the game than the outcome. But this is real money. This can be extremely dangerous. One student bet $6,000 and lost it all. So he took all of his student loan money and sold his car—just to lose another $30,000.

True investors focus on long-term investments, diversification, and costs. These Reddit investors don’t want to wait 20 years for a payoff. They want to get rich quick. The guy that started the frenzy is reportedly up $14 million. But he left millions in his tracks that will lose big time. A lot of people bought high are going to be in for a rude awakening. This is high stakes gambling.

Why this trend scares me

When I was a kid, a local bookie let me get in on some sports betting. I thought I could easily turn the $200 I had earned into $2,000. Boy was I wrong. I lost it all. Family stewards are not gamblers—we’re investors. The stakes are higher. This type of gambling isn’t any different than betting on football games. Financial stewardship is about limiting risk and being disciplined with a long-term strategy. Are you going to participate? Be careful. Only play with what you can afford to lose—because betting on worthless stocks is just like going to Vegas.

[bctt tweet="Why do I think this #GameStop trend is so dangerous? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Stock " username=""]

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Chase the Expected Returns—Not the Unexpected, Ep #161

Fri, 22 Jan 2021 05:00:00 -0500

I expect the stock market to go up every day. What do I mean by that? Is it a realistic expectation? In this episode of Best in Wealth, I dissect a Business Insider article written by David G. Booth about chasing expected returns. I also share WHY his opinion is one that matters. Don’t miss it!

[bctt tweet="As a long-term investor, you need to chase the expected returns—not the expected. I talk through what I mean in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:09] Listeners: I need YOU to weigh-in
[4:04] Just who is David G. Booth?
[11:36] What David Booth’s Business Insider article tells us
[22:35] Why you should pursue expected returns

Three facts about David G. Booth

There are three facts you need to know about David G. Booth:

Firstly, David Booth went to the University of Kansas and graduated with a Bachelors Degree in Economics and a Masters Degree in Business. He graduated in 1969 and went to the University of Chicago School of Business. The University of Chicago is where The Center for Research of Security Prices (CRSP) is. All of the information on all stock prices exists at the CRSP. If you’re reading research papers, they need to talk about the CRSP.

Secondly, David Booth was the research assistant to Eugene Fama, the father of modern portfolio theory. He was named a Nobel Laureate and highly recognized in the field of finance. Thirdly, the University of Chicago School of Business is now called the Booth School of Business. Named after—you guessed it—David Booth.

A brief—but important history—of David G. Booth

David Booth left the University in 1971 to work for Wells Fargo. In the early 1970s, the very first index fund was developed—the S&P 500. Before this, every available mutual fund available was actively managed. This S&P 500 was only available to institutional investors. In 1976, John Bogle started Vanguard, with the first retail index 500 fund.

In 1981, David left Wells Fargo and started Dimensional Fund Advisors (DFA). Why did he start a company? He believed that a small-cap index could be developed. People said no way—that trading costs would outweigh any benefits of being in an index fund. He didn’t care. So he built a board of directors including the brightest minds in financial market research. He proved everyone wrong. The small-cap index proved to be a winning strategy.

[bctt tweet="In this episode of Best in Wealth, I share a brief—but important history—of David G. Booth. Why? You’ll have to listen to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What’s different about Dimensional Fund Advisors?

An index fund beats approximately 83% of actively managed mutual funds. The longer you hold, the better chance you have of beating the equivalent actively managed fund. The DFA manages over 600 billion dollars. They follow the science and build strategies around science.

Since their inception, they’ve developed numerous successful strategies. Since 2000, only 17% of actively managed mutual funds beat the market. 84% of DFA funds beat the market. Index funds make up trillions of dollars worth of assets. Why is this important? Why am I telling you a story about David Booth? Because you need to listen to him.

What David Booth’s Business Insider article tells us

Please Note: This is not a recommendation to purchase a specific index fund. It’s simply talking through an article by someone you should listen to.

David expects the stock market to go up but isn’t upset when it doesn’t. He’s there to capture the long-term ups. The S&P 500 sees an average 10% annualized return, right? 10% seems sensible. When it’s divided throughout the year, you expect your portfolio to grow 0.0275% every day. But the market rarely goes up 10% per year. In the past 100 years, the stock market has never landed on 10%. It has only landed between 8–12% size times.

What happens when it doesn’t hit the historical average? An unexpected return. Pandemics, trade wars, and interest rates impact the market daily. People are trying to explain the unexpected returns, but it’s not relevant. David emphasizes that “What happened today may not inform what happens tomorrow.” So what is relevant?

Grasping unexpected versus expected returns

As investors, we have a difficult time grasping expected versus unexpected. There will be years when the stock market is up and years it is down. Staying in your seat is one part of investing that you can control. It’s what allows you to get those expected returns.

All you can do as a long-term investor is pursue expected returns, manage your costs, and accumulate compound interest. How? By investing in a broadly diversified portfolio for the long run. One of the best tools you have as an investor is time. Don’t panic when you see unexpected returns. Stay in your seat and you’ll realize those long-term expected returns.

Is your investment philosophy following the science? Do you have data to support your decisions? If you don’t, it’s time to speak to a trusted financial advisor.

[bctt tweet="What is the concept of unexpected versus expected returns? Why is it important to grasp? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Resources Mentioned

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The Best in Wealth One-Word Challenge, Ep #160

Fri, 08 Jan 2021 05:00:00 -0500

Forget about New Year’s resolutions. 87% of people make New Year's resolutions, but by the end of January, 50% have already failed. By summer, most people forget about their goals. You end up feeling like a failure when you do not reach your goals. That is why I do not think we should set ANY goals for 2021. You heard me right—zero goals for 2021. Why? I think you should focus on one word instead. In this episode of Best in Wealth, I will talk about a concept shared in the book—The One Word That Will Change Your Life. I will walk you through how to come up with your one word for 2021.

[bctt tweet="In this episode of Best in Wealth, we are doing the one word challenge. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:11] Just keep digging, digging, digging
[4:02] The one-word challenge for 2021
[10:23] How to come up with your one word
[13:57] What do you do once you have your word?
[17:50] My one word for 2021

The proven way to create clarity, power, passion, and life change

The one-word challenge is a proven way to create clarity, power, passion, and life change. We need to embrace our word and live our word, right? I believe it will have a powerful impact in 2021 on the 6 dimensions in your life: spiritual, physical, emotional, relational, mental and financial. When I read the book, I thought it sounded a lot like the cornerstones that I talk about in this podcast. The goal is to find this one word that will have an impact on all of your cornerstones.

How to come up with your one word

The first step is to prepare your heart and commit to the investment that you will make to this word. Secondly, unplug! Spend time alone praying, meditating and thinking about the word. Ask yourself these questions:

What do I need?
What’s in my way right now?
What needs to go in my life?

If you are a spiritual person, talk to God—then listen. Think about who and where you are today—and who and where you want to be at the end of 2021. What do you need to do to get from here to there? What word will help bridge the gap?

You can write down some goals, do a brain dump, create a mind map—just get everything out. Then create a list of words that describe what you need to do to meet your goals. What will help you be a better person in 2021?

Take your favorite words and mull them over for a few days. Choose the word that speaks to you. Choose the word that you can say over and over in your head and still feel inspired by. I get it, it sounds fluffy. Do not overthink it. If you spend just a little time on it, your word will hit you in the face, just as mine hit me.

[bctt tweet="What is the one word challenge? How do you come up with your one word? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What do you do once you have your word?

Live out your word. How? Write it down in prominent places. Create a screensaver with your word. Craft a sign and hang it somewhere. Keep a journal. Talk about it with other people. Create a weekly challenge. Find a song that relates to it. Write a poem or prayer about your word. The more you think about it, the more you will take 2021 to the next level. Is that not what we all want?

All of your big plans, goals and promises are narrowed down to this one word. How can you live out your word in 2021? What word sums up who you want to be? What word can you focus on all year long? Think of the great things that could happen. This one word could shape who you are forever. It will become the compass that directs your decisions and guides your steps.

[bctt tweet="You’ve done the one word challenge. What’s next? I share my thoughts in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

My one word

You will have to listen to the episode to hear my "One Word"

Resources Mentioned

The Big Basement Video on the DIY Network
BOOK: The One Word That Will Change Your Life

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Why You Need to Know Your Benchmark, Ep #159

Fri, 25 Dec 2020 05:00:00 -0500

What is a benchmark? Why is it important to be familiar with what your benchmark is? How can it impact the decisions you make? In this episode of Best in Wealth, I walk you through why it is so important to know your benchmark. I guide you through how to figure out which benchmark to follow and break down why you need to rethink your strategy. Do not miss this important episode!

[bctt tweet="What is a benchmark? Why is it important to know what your benchmark is? I share more in this episode of Best in Wealth! Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:50] Scams are running rampant
[5:43] The most common benchmarks
[8:07] Why it is time to rethink your strategy
[9:58] Look at other asset classes
[13:08] Why you need to know your benchmark
[18:31] Do not be chasing the hot dot
[19:55] Do you have an investment policy statement?

The most common benchmarks

We always hear about the common benchmarks or indexes such as the Dow Jones, The S&P 500, and the NASDAQ. The Dow Jones consists of 30 large companies representing different sectors in the United States. The S&P 500 is the 500 largest companies in the US. The NASDAQ consists of tech-heavy stocks. But none of them represent every asset class you can invest in. None of these are how your portfolio should look.

You might have an index fund in your portfolio tracking one of these indexes. If so, your return might be pretty good in 2020. It would be a little over 14% as of December 17th, 2020 (minus the fund cost). A lot of people look at 14% and think that’s the benchmark for their portfolio. I am going to walk you through why that is not the case—or should not be.

Why it is time to rethink your strategy

The S&P 500 averages 10% per year. If you are following that with your portfolio, you have gained 10% minus fund expenses. But research shows that these traditional active management funds do not do as well as the index. Only 23% have beat the index. If you are just in the S&P 500, you have to consider longevity. You can see very dark times for a long period of time if you are only invested in one asset class. For example, from 2000–2009 the S&P 500 averaged -1% per year. If you started retirement with $1 million and you only invested following the S&P 500 for 10 years, you lost $100,000 in 10 years. Look at other asset classes.

[bctt tweet="Why do you need to rethink your strategy when it comes to tracking benchmarks? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Look at other asset classes

There are thousands of companies that trade in the U.S. You might want to look at another index fund that tracks the Russell 2000. It is doing pretty well this year, but people never reference it. Russell 2,000 was down most of the year but is now up over 10%. What about a large value fund? They may look at the top 1,000 companies. Your benchmark would be the Russell 1,000 Value Index (it is down 1% this year). What if you are investing internationally? You might be tracking the MSCI World Index (that excludes the US). It is up 2.91% as of 11/30/2020. What about emerging markets? What about real estate? If you are in any of these asset classes, your benchmark is not the S&P 500.

Why you should not chase the market

Are you looking at your 401k or IRA and seeing less of a gain than the S&P 500? When the market dropped a lot in March, most people did not get out of the market. However, a lot of people have been chasing returns ever since. They try to make changes in their portfolio to track the S&P 500—when it is not their benchmark. That has cost investors millions and millions of dollars.

What if your 401k was tracking US Small Value? US Small Value was about even for the year as of October 1st, 2020—severely underperforming the S&P 500. So let’s say you decided to make a change and get into a different mutual fund to chase the performing indexes. But what happened? Now, it is 11/30/2020, and the S&P 500 is up 10% in two months. You are patting yourself on the back. But what about the small-value space that you were in? It’ is up 32.5% since October 1st. If you had stayed disciplined and had patience, your money would have grown significantly more.

What can you do instead of chasing the market? How do you determine what index is your benchmark? What other things can you do with your portfolio? Listen to hear my thoughts!

[bctt tweet="I share WHY you shouldn’t chase the market in this episode of Best in Wealth! Listen to learn why it’s NOT the best strategy for your investments! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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End-of-Year Financial Planning: 5 Things to Look at, Ep #158

Fri, 11 Dec 2020 05:00:00 -0500

What five major areas should you look at at the end of every year? End of year financial planning should include looking at assets and debt, tax planning, cashflow issues, insurance planning, and estate planning issues. Why does it matter? How can it help you from a tax-saving standpoint? Learn more in this episode of the Best in Wealth podcast!

[bctt tweet="In this episode of Best in Wealth, I share 5 things you NEED to look at in your end of the year financial planning. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:08] Why you need an investment policy statement
[8:00] #1: The asset/debt issues to consider
[9:45] #2: Tax planning issues
[15:17] #3: Cashflow issues
[17:11] #4: Insurance planning issues
[18:52] #5: Estate-planning issues

Why you need an investment policy statement

Are you staying disciplined and staying in the stock market? Are you staying disciplined in each asset class? An investment policy statement can help you stay disciplined. The S&P 500 is doing quite well with a few companies driving them forward. People have started moving out of other assets to capture some of the returns of the S&P 500. But that isn’t sticking to your plan.

Small-value is up 27%. Small companies are up 21% and large value is up 17%. You missed out on the recovery if you got out of these asset classes. An investment policy statement will keep you disciplined through the good and the bad times. It puts YOU in control.

The asset/debt issues to look into

Do you have unrealized investment losses? If you have a taxable account and you did tax-loss harvesting, it means you have some losses generated in the account. What can you do? You can look at where you might have selling opportunities to offset the losses with gains (and offset the taxes). If you carry those losses, you’re allowed to write off up to $3,000 each year. You can deduct this from your regular income. If you generated $9,000 of losses in your taxable account, for the next 3 years you have a $3,000 deduction because the loss carries forward. It’s a great way to offset gains or carry forward and offset income.

[bctt tweet="What asset/debt issues should you look into as part of your end of the year financial planning? I share some thoughts in this episode of Best in Wealth. Go check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Tax planning: How to save on your taxes

There are so many things you can do to save on your taxes. Do you expect your income to increase in the future? Many people were victims of the pandemic and lost their jobs. If you’re one of those people, it means you won’t make the kind of money you’d normally make. Your taxable income may be lower than it ever has been. If you’re in this situation, now might be the time to contribute to a Roth IRA. Why? Because you’re in a lower tax bracket. If your tax bracket is lower this year, consider doing a Roth conversion. The money starts growing tax-free.

If you make around the same amount as you have previously, are you on a threshold of a tax bracket? We live in a progressive tax system which means the first $19,750 you make is taxed at 10%. If you make more than that, you’re taxed at 12%. If you make more than $80,250, you’re taxed at 22%—which is a huge jump. So how do you stay in the lower tax bracket? You could fully fund your HSA or your 401k. Anyone on a threshold should make the same maneuvers if you have the money to do so. What else can you do? Listen for a few other tax-planning savings ideas! I also share some ideas to mitigate cashflow and insurance issues—don’t miss it.

Estate-planning [unexpected things you can do]

One of the big things you need to look at is your beneficiaries. Did you have a baby? Do you want to remove someone? Are your personal representatives still the right people? Is your financial power of attorney correct? Make sure it’s all exactly the way you want it.

Secondly, if your net worth is growing and you want to give away some money now, you can gift up to $15,000 per person tax-free. You get about a $12 million exemption. The downside is that the government can change this law at any time and lower that amount. As you start getting older and you don’t plan on spending all the money in your portfolio, wouldn’t you want to see the joy in someone’s eyes while you’re still living?

[bctt tweet="What are some unexpected things you can do with estate-planning? Find out in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources Mentioned

My PDF Checklist!

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The Six Stages of Retirement, Ep #157

Fri, 27 Nov 2020 05:00:00 -0500

What is just as important as building wealth for retirement? Understanding and preparing for the six stages of retirement. You experience different situations and emotions through each stage of the journey. If you know what to expect ahead of time, you can strategize how to emotionally—and monetarily—prepare. Listen to this episode of Best in Wealth to help prepare for your retirement.

[bctt tweet="What are the six stages of retirement? Listen to this episode of Best in Wealth to learn how to navigate them! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:26] Health comes before wealth
[4:40] Stage one: pre-retirement
[8:48] Stage two: retirement day
[10:07] Stage three: the honeymoon stage
[12:03] Stage four: disenchantment
[17:37] Stage five: your new identity
[19:55] Stage six: Moving on
[22:04] How do you want to be remembered?

Stage one: pre-retirement

You need to make sure you have the right amount of money in the bank, right? This tends to be one of the only things people think about when planning for your retirement. But all of your dreams need to come to the surface, too. All of your goals and what you want to leave behind need to be discussed.

Do you have enough to accomplish your goals? Are you addressing everything? What if you end up in a nursing home? Will you and your spouse have enough to provide for that? Can you withstand social security being cut in half? We go through all of these scenarios in the planning stage of retirement. If you’re not sure if you’re prepared—or don’t want to do this on your own—feel free to reach out to me. I work with clients all over the United States.

Stage two: retirement day

This is your last day of work. You’ve likely worked for the last 30, 40, or 50 years. Your last day is a HUGE deal. There’s a ton of excitement around the big day. You can do whatever you want without the stress and burden of your job.

[bctt tweet="The big retirement day is here! Now what do you do? Listen to this episode of Best in Wealth as I talk through the six stages of retirement! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Stage three: the honeymoon stage

Once the retirement celebrations are over, retirees can begin to do everything they’ve always wanted to do. They may travel, complete a honey-do list, visit family, or pick up a new hobby. The length of this phase varies depending on how much activity you’ve planned. Everything is awesome. But eventually, the excitement wears off. Eventually, you run out of planned activities. That’s when you move to stage four.

Stage four: disenchantment

One day you wake up and think that retirement isn’t all that you thought it would be. You may feel like you’ve lost your identity. You were needed at your job. People counted on you. You felt more self-worth while you were working. The honey-do list is done. But you have so much free time left.

The feeling of disenchantment can be accompanied by depression. This is the time when it’s important to ask for help. Talk about it with your family, spouse, friends, or even your financial advisor. This is just as important as all of the money that you saved.

This might be a time to invest in something bigger than yourself. You need a sense of purpose. Maybe you can volunteer at a local organization or your church. Maybe you could take some continuing education classes. Maybe it’s time to plant a garden. Find people to talk through this stage with you. Find the deeper meaning of your life.

Stage five: your new identity

You familiarize yourself with the landscape of your new circumstances and new higher purpose. You manage the inevitable self-examination. You begin to find answers to the question: Who am I now? In this new stage, you start to figure things out. You find your “new” purpose. When you find answers to this question, you begin to feel closure about your work life. It doesn’t mean this stage is easy.

[bctt tweet="What does the disenchantment phase of retirement feel like? Learn what to expert in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Stage six: Moving on

This is the stage where you settle into the new routine that you’ve built around your new identity. It will feel good. You have new rules around your marriage and the time you spend together. You’re both building your new identity. You know where you’ll be in this new normal that you’re creating. Eventually, the new landscape becomes familiar territory and you can enjoy the phase of your life.

Resources Mentioned

Schedule a conversation with me!

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How to Build Your Family Fortress, Ep #156

Fri, 30 Oct 2020 05:00:00 -0500

How do you build your family fortress? I talk about cornerstones often, including how to figure out what yours are and how to build abundance within them. Your family is one of—if not THE—most important cornerstones in your life. But what do I mean by building your family fortress? How do you do it? Listen to this episode of Best in Wealth to learn more!

[bctt tweet="How do you build your family fortress? What does it mean? Find out in this episode of Best in wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:02] My dream of being a coach
[3:43] Build your family fortress
[7:26] The family cornerstone
[8:16] The Single Page Life Plan
[9:26] Determine your mission statement
[10:32] What are your top cornerstones?
[11:27] Actionable steps in the SMART goal format
[18:42] Spend time building your family fortress

Building abundance in your cornerstones

If you’re listening to this podcast, you’re likely your family steward. You handle the finances. You need to build abundance in your cornerstones to build your family fortress. It’s why I call my business the “Fortress Planning Group.” Building your fortress isn’t all about money. But money is the fuel to help you build abundance.

We have some castles scattered in our office to remind our clients that our job is to help you build your fortress so you can feel peace and security. We handle your financial cornerstone to allow you to concentrate on your family.

It’s not about overly-focusing on one cornerstone. You can’t lose sight of all the others. Friends are important, but you can’t spend all of your time with them at the expense of your family. You need to build balance within the cornerstones.

Place your family first

Some people place their spirituality first—which is understandable—but family is usually the most important cornerstone. Are they the most important thing in your life? Your spouse and kids? Your parents? Siblings? If the answer is yes (and it is to a lot of people) let's build abundance there. To do that, you need to build a plan around it.

The book “Single Page Life Plan” says that people who don’t care where they are going don’t need a roadmap. But I recognize the value of adding direction to my life and setting a course that aims my family toward our dreams and aspirations. Builders need an architectural plan. Pilots need a flight plan. CEOs need to build a business plan. Coaches need a game plan. Leaders need a life plan. We are the leaders of our family and responsible as a family steward to build a plan. So how do you do that?

The single page life plan process

What does the process of crafting a life plan look like? Here’s the single page life plan framework:

Start with a mission statement. For example, “Be a positive influence in the lives of others at home and at work. Lead by example.”
Secondly, you list your life categories (or what I call cornerstones): Family, friends, spirituality, health, career, finances, hobbies/interests, travel and entertainment, etc. Everyone’s cornerstones are different. You just need to nail down 6 cornerstones.
Under each cornerstone, you need to list actionable steps to take following the SMART goal format (specific, measurable, achievable, relevant, and timely).

The plan that you’re making should be well thought out by you. Here are some examples from the book:

Schedule time with your spouse: Life gets busy. It’s necessary to make sure you’re giving your spouse intentional time together.
Prepare and eat meals together: Plan and cook fun meals with your family.
Continually strengthen your marriage: I use an app called “Lasting” which is geared towards strengthening your marriage. It helps you work through conflict, communication, trust, money, etc. you read, respond, and take quizzes to strengthen your marriage.
Provide spiritual leadership: Keep your family on track. Make sure you’re going to church or watch church together online.
Be present in your kid’s lives: Make an effort to attend and be present for your kid’s activities. Put ball games, plays, recitals, parent-teacher conferences, etc, in your schedule. Look for activities for the whole family to participate in (i.e. board games or a movie night).
Visit your parents or siblings: The greatest thing that came out of the pandemic was a weekly Zoom call with my family every Sunday. Starting something like this strengthens the whole family.
Go on family vacations: It can be a week away or a simple weekend camping trip. It’s simply important to spend time together as a family

Start being intentional with the most important cornerstone in your life and build abundance in your family cornerstone. Don’t regret the time that you haven’t had together. Learn more about the topic by listening to the whole episode!

[bctt tweet="How do you craft a mission statement? How do you create actionable steps to meet goals? I share a simple process in this episode of Best in wealth. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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Will the Outcome of the Election Impact Your Investments? Ep #155

Fri, 16 Oct 2020 05:00:00 -0500

How will the election impact your long-term investments? Will the election impact your long-term investments? Everyone is reading the headlines that are written for shock, awe, and impact and taking them as the gospel truth. Doing so can harm your investments. You need a long-term perspective on the stock market. Listen to this episode of Best in Wealth to hear how I think the election will impact your investments—and why you shouldn’t do anything about it.

[bctt tweet="Will the outcome of the election impact your investments? I share my thoughts in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:13] No one has a long-term outlook
[4:33] The two questions I get asked
[7:42] It doesn’t matter who is in office
[10:51] The annualized market returns for 9 presidents
[15:43] Why you should embrace a long-term outlook

What should you do if either president is elected?

Most of the questions I’ve gotten recently about the stock market have to do with the election. They're one of two questions:

What should I do with my investments if Biden is elected?
What should I do with my investments if Trump gets reelected?

I want to start by saying that the market does get volatile around election season because the market hates uncertainty. People make their trades based on millions of opinions. But if you check out the graph linked below, it separates each president from 1929 to 2020 and shows what their stock market returns looked like.

There were 8 Republican presidents and 7 Democratic presidents during this time period. No matter who was president, the growth of your money has gone up in the long-run. There have been recessions, but the market always corrects itself. Keeping your money in the market is good for your long-term success.

There is NO discernible conclusion

Based on the information presented, it’s challenging to draw any conclusion. The market does just as well when a Democrat is in office versus when a Republican is in office. There is no discernible pattern between the two.

We as investors want to see a connection so we can conclude what will happen in the stock market. But the reality is that there are so many different factors that impact the stock market beyond who is president. Investors want to simplify things to one driving factor, but that’s possible.

What about oil prices? Interest rates? How will other countries impact the market? What about the pandemic? What if we go to war? Any of these things—and thousands more—can influence the stock market. They impact stock prices every single day. That’s not to say that the president can’t have an impact on the stock market and the economy. But there are so many other factors at play.

[bctt tweet="What should you do with your investments if Trump is elected? What about Biden? I share my thoughts in this episode of the Best in Wealth podcast. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What the annualized market returns tell us

What do the annualized market returns (of the S&P 500) for the last 9 presidents show us?

Richard Nixon: annualized return of -2.9%
Gerald Ford (Republican): annualized return of 20.2%
Jimmy Carter (Democrat): annualized return of 11.7% per year
Ronald Reagan (Republican): annualized return of 15.8% per year
George Bush (Republican): annualized return of 13.9% per year
Bill Clinton (Democrat): annualized return of 17.6% per year
George W. Bush (Republican): annualized return of -4.4% per year
Barack Obama (Democrat): annualized return of 16% per year
Donald Trump (Republican) = based on my research, his approximate annualized rate of return was 8.25% per year

This is why it’s hard to predict what will happen in the stock market. Other than a couple of years likely influenced by recessions, the returns between Republicans and Democrats is indiscernible. There is NO pattern.

The bottom line? Embrace a long-term outlook

I advise you to put aside political views when it comes to your long-term investments. Doing so gives you the greatest chance of success. I’m not saying it will be easy, but it is wise as a family steward. People are still going to work and innovate and make discoveries. Shareholders and companies are investing in growing their businesses regardless of who is in the white house. Your job is to make sure you’re well-diversified in all areas of the stock market and stay invested.

[bctt tweet="What does the annualized market returns from presidencies over the last 100 years tell us? Find out by listening to this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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How Do Millionaires Become Millionaires? Ep #154

Fri, 02 Oct 2020 05:00:00 -0500

What do millionaires do to become millionaires? What are some of the habits that contribute to their success? In this episode of Best in Wealth, I share 25 survey answers that were conducted by Chris Hogan in his latest book, Everyday Millionaires. If you want to achieve millionaire status in your lifetime, I highly suggest you give this a listen—and implement these strategies.

[bctt tweet="How Do Millionaires Become Millionaires? That’s the topic of the latest episode of THE Best in Wealth podcast. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Millionaire" username=""]

Outline of This Episode

[1:05] Schedule a 15-minutes call with me!
[2:21] The importance of grit & resilience
[4:18] How millionaires become millionaires
[7:34] The first thing that millionaires do
[9:58] Millionaires control their own destiny
[10:44] Statistics on millionaire habits
[22:52] Millionaires DO stay married

The misconception about millionaires

74% of millennials and 52% of baby boomers believe that millionaires inherited all of their wealth. Survey says...that is a LIE. Don’t believe it. Most millionaires do not inherit their wealth. 8/10 come from families at or below the middle-class income level. It goes to show that anyone can become a millionaire with discipline and hard work. Each person starts at a different place. Each has their own obstacles to overcome. Millionaires come from all walks of life and socioeconomic backgrounds.

In Chris Hogan’s book Everyday Millionaires, he talks about the things that millionaires do to be successful. I go over some of these things to help you rethink your finances and your investments. Sometimes we need to reset our mindset to have a better shot at success. I want everyone listening to this show to become multi-millionaires. Why? So you can build the cornerstones in your life to full abundance.

[bctt tweet="What do millionaires do to become millionaires? What are some of the habits that contribute to their success? Find out by listening to this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Millionaire" username=""]

Millionaires believe in themselves

Before they were millionaires, they believed that they could become millionaires. They reject the voices that say “it cannot be done.” Instead, millionaires put their heads down, get to work, and make it happen. If you want to build abundance in your life it is up to you. Not your family, friends, or the government. It isn’t about owning your own business or taking huge risks. It’s about working hard and controlling your destiny through solid and sound investing.

Speaking of investing, most people achieve millionaire status by contributing to their 401k or other retirement plans (IRA, Roth IRA, SEP IRA, 403B, etc.). Many of them have more than one retirement account. They’re likely contributing to a backdoor Roth or Mega Backdoor Roth, too.

Millionaires stick to a budget

Millionaires live on less than they make, plan for big purchases and pay with cash, and they use shopping lists and stick to them. In fact, 93% of millionaires use coupons! You can use an app like the EveryDollar Budgeting app to help you track your expenses. When you’re eating virtually all of your meals at home, the grocery line item can get VERY expensive. But if you stick to your list, you spend less.

The average millionaire drives a 4-year-old car. I’m driving a 2015 truck with thousands of miles on it. Large car payments can disrupt you hitting millionaire status. That money should be going into savings instead. Speaking of savings, 70% of millionaires save more than 10% of their income. At one point in my life, I saved 50% of our working income.

The bottom-line? Reaching millionaire status is more about how hard you work than how much you make. If you spend less than you make and consistently save, you can do this. I share some more astounding statistics about millionaires and their habits in the rest of the episode. Don’t miss it!

[bctt tweet="Did you know that most millionaires stick to a budget? What else contributes to their success? Find out in this episode of Best in Wealth! #Millionaire #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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Want to Refinance Your Mortgage? Here’s What You NEED to Know, Ep #153

Fri, 18 Sep 2020 05:00:00 -0500

I often get asked, “Should I pay off my house early?” and “Should I refinance my mortgage?” So in this episode of Best in Wealth, I answer those two questions. But to answer those questions, there are a few other questions YOU have to consider. What are they? How do they influence your decision? Which route should you take? Listen to find out!

[bctt tweet="When Should You Refinance Your Mortgage? In this episode of Best in Wealth, I share my thoughts on WHEN and HOW to refinance. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Outline of This Episode

[1:06] Should I pay off my house early?
[3:57] How to determine if you should refinance
[8:10] Which loan option is the best choice
[9:27] What are your needs or goals?
[15:10] The obstacles faced with a 15-year mortgage
[17:12] The two refinancing strategies to use

What does paying off your mortgage early really mean?

I like the idea of paying off your home and reaching financial freedom—but what does it actually mean? Interest rates are as low as they've ever been. If you’ve got a great credit score and 20% down, you’re going to get a low interest rate. Possibly under 3%, depending on where you live.

But if you took that same money and invested it, you could reasonably expect a 10% annual return (based on the history of the S&P 500 index). So you might say that your money is better off in the market from a net worth standpoint.

But others may prefer the peace of mind of paying off their home. If you retire and your house is paid off, it helps your retirement projections. It feels good and it means freedom. Do you want freedom? Or do you want a higher rate of return on your money?

How to determine if you should refinance

If you’re considering refinancing, there are some questions you need to ask yourself first:

Do you plan to remain in your home for a few years? If the answer is no, the cost may exceed any benefit. If you save $50 a month in interest by refinancing, but you plan to sell in 2 years, 50x24 months is a savings of only $1,200. If it costs you $2,000 to refinance, you probably shouldn't refinance—you’ll be losing $800 in that deal.

Are you nearing a milestone event? Retirement? The end of an adjustable-rate mortgage (ARM) or balloon term? If the answer is yes, consider refinancing before your options become limited by income restraints. At that point, you might not qualify to refinance.

Is your loan to value ratio greater than 80%? If the answer is yes, you don't have 20% down on your home and will have a hard time refinancing. You’ll still be subject to (private mortgage insurance) PMI.

Has your credit score recently improved? You may be in the category of wanting to refinance. Are you locked into a fixed rate? Do you expect the rates to go up or down from here? They’ll probably go up from here. If you’re in an ARM, it might be time to lock in a fixed-rate now.

What’s the interest rate environment? The interest rates have gone down in the last few months. After answering all of these questions, if you’re still in the category of, “Yes, I think I want to refinance.” then you need to look at what loan is the best for you.

[bctt tweet="How do you determine if you should refinance? What are your options? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Which loan option is the best choice?

If your current interest rate is 3.5%, how much lower does it have to be to be worth it? If you can lower your rate even half a percent, then you are winning. But you need to seek loan terms that best match your needs and goals. So—what are your needs and goals?

Are you a veteran? Do you live in a rural area? Do you have a lower credit score or income? Then a VA loan, a USDA loan, or an FHA loan may work for you. They can offer lower down payments, good rates, and relaxed guidelines.
Is your primary goal to reduce your monthly payment? If yes, consider a thirty-year fixed-rate mortgage. You’ll have a lower monthly payment. But the caveat is that it adds another 30 years to pay off your home.
If you have excess income and want to reduce your interest expense over the life of the loan, consider a 15-year mortgage. This is the happy medium that can pay off your house early. It also allows you to invest some while paying more on your mortgage.

Keep listening as I take a deep-dive into the pros and cons of a 15-year mortgage—and paying off your home early.

Two ways to refinance your mortgage

There are two different places you can go to refinance your home. The first is a local bank or credit union. You can obtain a closing cost and interest rate from them. NOTE: Different banks charge different rates at different times. Do your homework and get multiple opinions.

Secondly, you can go to a mortgage broker. They have relationships with numerous banks. They will work to find you the best interest rate and closing costs at all of the banks they have relationships with. If you can find multiple mortgage brokers who have relationships with different banks, you can choose from 10+ different closing costs and interest rates to get the best deal.

The bottom line? Always figure out where your break-even point is before you make a decision (i.e. how much you’ll save offset by the closing costs). If you’re saving $100 a month and the closing costs are $500, you break even in 5 months. Do your homework, get multiple opinions, and talk to your financial advisor. To hear my full thoughts on paying off your home early and your refinancing options, be sure to listen to the whole episode!

[bctt tweet="There are two ways you can go about refinancing your mortgage. What are they? I share your options in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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How to Execute a Mega Backdoor Roth IRA Contribution, Ep #152

Fri, 04 Sep 2020 05:00:00 -0500

What is the Mega Backdoor Roth IRA Contribution? How can it be a game-changer for some high-earning individuals who are already maxing out their 401k plans? If you’re investing the maximum you can a year, think of how quickly you can hit financial freedom. If you’re passionate about investing as much of your income as you can—this is the episode for you. I explain the step-by-step process of finding out if you qualify. Don’t miss it!

[bctt tweet="How do you execute a Mega Backdoor Roth IRA contribution? Find out in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:33] Dissecting the total compensation package
[4:34] Executing a Mega Backdoor Roth IRA Contribution
[6:55] Does your 401k plan allow non-Roth after-tax contributions?
[9:46] Is there room under the ACP test to make additional contributions?
[11:39] Calculating how much you can contribute
[13:23] Does your plan allow for in-service distributions?
[16:44] Are the non-Roth after-tax contributions moved to a separate account?

Mega Backdoor Roth 101

The first question you have to ask: Have I made the maximum salary deferral contribution of $19,500 into my 401k? If you’re 50 or older, have you contributed $26,000? If you haven’t maxed it out, you don’t qualify for the Mega Backdoor. You have to focus on maxing out your 401 contributions first.

Secondly, Does your 401k plan allow non-Roth after-tax contributions? The answer can be found in your summary plan description. Your employer is legally required to give this to you when you’re hired—and if you ask for it again. If you login to your 401k provider’s website, you’ll often find it under the “documents” tab. If you can’t find it, email your HR rep and ask for a copy.

If your plan doesn’t allow the non-Roth after-tax contribution—you can’t move forward. If it IS allowed, you can contribute above and beyond $19,500 (or $26,000). You CAN continue along this journey. The truth is that most plans don’t allow this, but it’s worth finding out.

Is there room under the ACP test to make additional contributions?

An ACP test is typically conducted each year to make sure the 401k plan doesn’t unfairly benefit a highly-compensated employee. It limits the amount that highly compensated employees can make. If you’ve maxed out your 401k, you’ll likely fall into that category. Ask your plan sponsor if you’re considered highly-compensated.

What happens if you don’t ask? When the ACP test is done at the end of the year—after you’ve made the contributions—the money you contributed can get sent back. But if the plan sponsor says you aren’t considered highly compensated, you can move forward.

[bctt tweet="In this episode of Best in Wealth, find out how to calculate how much you can contribute to a Mega Backdoor Roth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How to calculate how much you can contribute

How do you calculate how much you can contribute? Add all of the employee and employer contributions that have been made this year—unless you’re 50 or over. You do NOT count the extra $6,500 contribution. Once that’s added, subtract it from $57,000. Why?

In 2020 you can make up to $57,000 worth of retirement contributions inside of your plan. If you have more than one 401k, add up every plan you've contributed to. So you take $57,000 and subtract $19,500 and what your employer contributes you arrive at $31,500. That’s the amount you can contribute to the non-Roth after-tax portion of your IRA.

Does your plan allow for in-service distributions?

You can find the answer to this in your summary plan description as well. Generally speaking, to withdraw money from a retirement plan, you must either retire or leave that employer (unless you’re taking out a loan). But most plans allow an in-service distribution. So, while you’re still working for the employer, you can withdraw money.

Many plans that allow the non-Roth after-tax contribution allow for in-service distributions of that money. If your plan does not allow in-service distributions you can still make a Mega Backdoor Roth IRA distribution—but you will lose some of the tax benefits.

If you leave your employer, you can roll the whole portion into a Roth IRA. But any earnings on that portion will be taxed as income when you roll it over. If your 401k allows for a non-Roth after-tax contribution AND an in-service distribution then you can move on to the final step.

[bctt tweet="Why do you want a financial advisor to help you navigate a Mega Backdoor Roth IRA contribution? I share my thoughts in this episode of Best in Wealth! #wealth #retirement #investing #invest #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Have you moved the non-Roth after-tax contributions to a separate account?

If your 401k allows for a non-Roth after-tax contribution AND an in-service distribution—are the non-Roth after-tax contributions moved to a separate account? If the answer is yes, you CAN do the Mega Backdoor Roth IRA contribution. Once the contribution goes in, you can immediately take that after-tax portion and roll it into a Roth IRA while working for your employer. It will grow tax-free for the rest of your life. That is a Mega Backdoor Roth IRA.

How do you manage the Mega Backdoor Roth contribution? Do you need a financial advisor? If you’re not paying attention, this could blow up in your face. How? I share my thoughts—and all the nitty-gritty details—in this episode.

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THE Best in Wealth Business Startup Checklist, Ep #151

Fri, 21 Aug 2020 05:00:00 -0500

Do you enjoy your job? Are you working every day in a field that you’re passionate about? Or are you like me and realized that doing something you’re passionate about means starting your own business? In this episode of Best in Wealth, I share a business startup checklist. I’ll cover many of the questions you need to consider before you start a business. If you’re ready to take the next step, give this one a listen!

[bctt tweet="In this episode of Best in Wealth, I share my business startup checklist. It’s packed with important questions to consider before starting a business. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[2:04] How much do you enjoy your job?
[4:45] Issues to consider when starting a business
[6:27] Determine your personal cashflow issues
[13:30] Business cashflow issues to consider
[16:39] Legal and business formation issues
[21:50] Tax planning considerations
[22:26] What other issues might crop up?
[24:09] Get the full checklist in the resources below!

What does your personal cashflow look like?

You NEED to ask yourself some questions about how starting a business could impact your personal cashflow:

How is your personal cashflow going to change? Will you need a side hustle or a spouse's income?
Will you need to use personal assets to start this business? Emergency fund? Savings?
Do you have other income sources available while building your business? You don’t want to pull money that was earmarked for retirement.
Will your risk tolerance need to change in other areas? Your risk tolerance will likely need to grow with your business.
Do you need a contingency plan? Most businesses stall, go belly up, or don’t make the money you project so it’s important to have backup plans in place.
Do you have an emergency fund? You need to keep some liquidity for emergency expenses.

The bottom line is that you can't sacrifice your family for your passion. The best way to build a business is by building a large runway of cash. I worked my day job FOUR extra years while starting Fortress Planning. It was important to me to have everything in order before I quit my day job.

During that time I took the necessary classes and got needed certifications. If I had quit my job before taking these steps, I’d be eating up my cash reserves while not building the business. My suggestion is that you make sure you're doing everything you can before you quit your day job OR plan to have a side hustle to help with income.

Lastly, if you’re married, make sure your spouse is bought into the vision. It’s a stressful endeavor and the support of your spouse is instrumental. If it wasn’t for her belief in my passion I may never have started this business. If she wasn’t for it, it would’ve been a tough road.

Business Cashflow Considerations

There are three main business issues to consider before launching your business:

Do you need to research the amount necessary to launch or run the business? You need to put together a capital sheet to know how much you need to start the business.
Will you need cash or financing to cover the costs until you become profitable? Many people take out a loan to start a business instead of saving the money needed. Starting a business in the red can be stressful and painful. If you don’t have a long enough cash runway, you can go out of business before you truly have a chance to build it.
Do you expect income to fluctuate? If you’re getting a consistent paycheck now, it’s likely pretty different with a business. Can you get a line of credit to ease the business flow? The best recommendation is to have enough of a runway so that a line of credit isn’t necessary.

We need to answer those questions before we quit our day jobs.

[bctt tweet="What business cashflow questions do you need to take into consideration when starting a new business? Listen to this episode of Best in Wealth for more information! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Legal and business formation issues

You also have to consider what type of business you want to form:

Sole proprietorship: With this option, business assets and liabilities are NOT separate from your personal assets. If you’re sued you could lose everything—not just your business.
Partnership: A partnership is formed with two or more partners where you have commingled personal and business assets. Your personal assets are not protected (unless it’s a limited partnership).
C-corp: This is the most formal business structure with the strongest protection, with separate taxes, but business profits are subject to double taxation.
S-corp: This is treated as a pass-through entity (no double taxation). It does offer protections because your business assets are separate from personal. So if your business goes bankrupt, you don’t lose personal assets. One limitation is that the number of shareholders is limited to 100 or fewer. An S-corp might be the better bet from a tax standpoint.
Limited Liability Company (LLC): Your business is a separate legal entity, it’s unincorporated and shares and taxes are handled differently.

Other questions to consider from a business standpoint include:

Do you need assistance forming that business? You can hire an attorney to help you or go straight to your state to form the business.
Will you have employees? You’ll need to clearly outline employment terms, job descriptions, policies, and HR issues. Do you need to register with state agencies? Get workers compensation or other employment insurance? Should you hire an accounting firm? Will your employees have a 401k plan option?
Will you have a business partner or partners?
Do you need a business succession plan?
Do you have intellectual property to protect?

Listen to the whole episode for more information and don't forget to download the FREE checklist in the resources!

[bctt tweet="Listen to this episode of Best in Wealth for more information about the legal issues you need to consider when forming a business. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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Accounts that Will Help You SAVE More, Ep #150

Fri, 07 Aug 2020 05:00:00 -0500

Are you trying to figure out how to save more? Are you in debt right now? Are you motivated to get out of debt? You can use your abilities to make more and save more. But how do you accomplish that? In this episode of Best in Wealth, I share some of the accounts you can use to not only save more money—but help it grow. Financial freedom makes the stress roll off your shoulders. If you’re ready to be in that place, listen to this episode for numerous strategies and resources.

[bctt tweet="What accounts will help YOU save more? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #DebtFree" username=""]

Outline of This Episode

[0:34] The economy: Good news and bad news
[5:02] Invest in depleted asset classes
[7:04] Focus on becoming debt-free first
[9:20] Healthcare savings: two things to think about
[11:50] Take advantage of Roth/Roth IRA contributions
[13:53] The Backdoor Roth
[14:50] The Mega Backdoor Roth
[16:15] Look into employer stock purchase plans
[19:23] Consider an annuity or brokerage account

Become debt-free—then focus on emergencies

We want debt to be gone before you start to save more. Debt makes it difficult to truly save and reach financial freedom. Those who have adequate savings either make an incredible amount of money OR they make modest incomes but still save 30-50% of their income. How? By living below their means.

Once you have your debt paid off, your focus needs to shift towards saving. But what? And how? You need to start with an emergency fund. How long of an emergency fund should you save up?

3 months: if both spouses are working
6 months: if you’re single
18 months: high-income earners or entrepreneurs

Why so much for entrepreneurs? You may want at least 18 months of expenses set aside to take advantage of mobility and business opportunities that come your way.

Health savings options: FSA and HSA

If you have a Flexible Spending Account (FSA), it’s a great place to put away pre-tax money when you know you’re going to be spending money on medical expenses (medical, dental, and vision). If it’s through an employer, you usually have to spend it before the end of the calendar year.

If you have a high deductible health care plan, start using a Health Savings Account (HSA). If your employer doesn’t sponsor one, you can open one with a bank (or online bank). A single person can contribute up to $3,050 a year and a married couple up to $7,100. They help your current year taxes, you save more money, and when you pay medical you don’t pay taxes. Plus, you can carry the balance over to the next year.

Many people don’t know this, but If you stay healthy—you don’t have to use the money on healthcare. You can keep the money in that account and invest it. Then, once you turn 65, the HSA acts like an IRA and you can withdraw that money in retirement (and hopefully get taxed in a lower tax bracket). Listen to the episode to learn more.

[bctt tweet="Did you know that you can invest the money that you keep in an HSA? I talk about this and other ways to help YOU save more money in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #DebtFree" username=""]

Roth IRAs, IRAs, and non-deductible IRAs

If your employer offers a 401k, you’re allowed to contribute $19,500 in 2020. If you’re 50+ you can contribute up to $26,000. Another option is a separate IRA or Roth IRA. If you make too high of an income, you won’t get a tax break upfront. It will be considered a non-deductible IRA.

What does that mean? Money still grows tax-free, but when you withdraw any money out you’ll have to pay taxes as if it were income. So what are the income limits? As a family, you can make around $200,000 in taxable income and still contribute tax-free. You can contribute $6,000 or $7,000 if you're 50+. When it comes to the IRA contributions, if you’re over the income limit, there are some neat tricks you can use to save more money.

The first one is the Backdoor IRA. If you make a non-deductible contribution because you’re a high-income earner, we can turn around and roll that traditional Roth into a Roth IRA because there is no income restriction there.

The second option is the Mega Backdoor Roth. If you contribute $19,500 to your 401k, you max out and can’t contribute more. But TWO things allow you to make a higher contribution (and very few 401k plans allows this):

Your 401k plan must allow after-tax contributions
Your 401 allows in-service withdrawals on after-tax contributions once a quarter while you’re working

Both of these things allow for the potential of a Mega Backdoor Roth. With this type of Roth, you can put in about $35,000 that you can convert to a Backdoor IRA every single year. Both of these options get complicated, and there are other rules involved, so feel free to reach out to me with questions.

How to save MORE for retirement

If you still have excess income and would like to save more, look into employer benefit plans, such as a stock purchase plan. If you’re a business owner, you could also open a SEP IRA or Solo 401k. You could even start thinking about your kids—do you want to pay for their college? If that’s something you’re open to, you could open up a 529 Plan to begin saving for their education. There’s a lot of misinformation out there that you need to know so you do everything right—schedule a chat with me to talk more about it.

You can also purchase an annuity. There are very few out there that I would recommend, but some are sold with low commissions, no surrender charges, and you can put money away after-tax that grows tax-free. Those gains become income in retirement. Lastly, you could open up a brokerage account—it’s a far better option than a simple savings account. Why? Listen to the whole episode for more details on how YOU can save more!

[bctt tweet="How do you save MORE for retirement? What are the best ways to save more? Listen to this episode of Best in Wealth for my thoughts! episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #DebtFree" username=""]

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How to Get on Track for Retirement, Ep #149

Fri, 24 Jul 2020 05:00:00 -0500

Are you on track for retirement? Do you have enough money saved at this point in your life to retire or reach financial freedom by 65? One of the biggest questions I hear is: How much money do I need to save for retirement? In this episode of Best in Wealth, I do my best to answer that question using the formula Charles Farrell outlines in his book, Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage of Life. You need to take actionable steps now to be prepared for your future.

Outline of This Episode

[0:35] What do you dream about doing?
[3:58] Are you on track for retirement?
[11:15] Why you need 80% of your current income
[13:51] How do you come up with the $60,000?
[17:37] What’s your job now?

Get retirement ready with Charles Farrell’s formula

You need to create a detailed retirement plan to really zero in on your goals and get the right steps in place to prepare. In his book, Charles Farrell shares a simplified version of how much savings you’ll need. I’ll give you some simple guidelines from this book that demonstrate where you should be at each stage of life. The goal is to hit at least 12x your household income in order to retire, so you can live off of 80% of that of your household income in retirement.

Charles developed the Capital to Income Ratio. You can use it to find out if you’re on track to get to 12x your income by the time you retire. If your household income is $100,000 annually, you need to save $1.2 million for retirement. So where do you need to be at each age?

Here are the income ratios by age, with the approximate amount you should have saved if your household income is $100,000 annually:

Age Income Ratio Savings Required 25 0.1 $10,000 30 0.6 $60,000 35 1.4 $140,000 40 2.4 $240,000 45 3.7 $370,000 50 5.2 $520,000 55 7.1 $710,000 60 9.4 $940,000 65 12 $1.2 million So are you on track for retirement?

Based on the table above—are you on track for retirement? Here’s how to calculate it:

Take your household income and multiply that by the income ratio that correlates with your age to see if you’re currently on track. It’s easy to calculate if you’re paid a salary. If you aren’t, count the average of your pay for the last 4 years as your income.

By the way, by money saved, we’re talking about things such as your 401k, IRA, annuities, CDs, life insurance, checking and savings, real estate, etc. Please note that your home is NOT a capital investment.

How do you live on 80% of your current income?

How do you live on 80% of your current income in retirement if you need 100% of it now? Where did Charles come up with that number? If you’re going to get to 12x your income by retirement age, you have to be saving 12–15% of your $100,000 annual income to get there. If you’re saving 12% now, you really only need 88% of your income to live off of. In retirement, you won’t be saving for your retirement anymore.

Plus, your mortgage should be paid off by the time you retire. If your mortgage accounts for 20% of what you pay and we take off another 12% for savings, 7.65% for social security taxes, that brings you down to $60,000. So you really only need $60,000 to live off what you’re making right now. Social security will play a role—it typically replaces 20% of your income. If you’re making around $100,000 a year, it will make up the other $20,000 to bring you to the projected $80,000 a year in retirement.

You want that extra $20,000 cushion to account for things like yearly inflation, medical expenses, or perhaps even vacations. Keep listening to find out why I think the 5% rule can be dangerous—and what I think you should do instead.

What is your job now?

But Scott, what if I’m not on track?

Are you anywhere close? What if you’ve fallen behind? If you’re not on track for retirement, your job is to get on track. Once you figure out what you should have saved at your current age, there are some things you can do:

If you’re 50 years old and you don’t have half a million saved yet, start saving more than 12–15% a year. Or perhaps plan on working a couple more years and retiring at 67. Remember, when you retire isn’t always your decision. It’s better to have a plan in place now in case things don’t go the way you’d expect.

What if you’re ahead? It’s time to start dreaming big and start thinking about the one thing you want to accomplish with your future. Either way, you need a comprehensive financial plan. Feel free to reach out and schedule a conversation with me!

Resources Mentioned

Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage of Life

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Welcome to The New Normal, Ep #148

Fri, 10 Jul 2020 05:00:00 -0500

When I’m about to shake someone’s hand, pat their back, or give them a hug I stop short and say to myself: “Welcome to the new normal.” The COVID-19 crisis is new to all of us. The inability to shake hands, social distancing, the necessity of wearing face masks—it’s all new.

But the phrase “The New Normal” isn’t, it’s been in use for decades. An article was published on the cover of Business Newsweek on August 13th, 1979 that was titled: The Death of Equities. In the article, they called inflation the new normal. Inflation was destroying everything and negatively impacting the stock market. The article said the stock market was a loser’s game and that—besides a lucky few—you wouldn’t make money in the stock market.

The phrase has been tossed around numerous times throughout history—but what does it really mean? How does the new normal pertain to the stock market? In this episode of Best in Wealth, I talk about what the new normal has meant historically and what it should mean.

[bctt tweet="Welcome to The #NewNormal. In this episode of Best in Wealth I talk about what that means—and what it should mean. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:18] Welcome to the new normal
[3:44] The New Normal as it pertains to the market
[7:01] The best way to deal with a crisis
[9:06] We need to call it something different
[14:18] Let’s make planning the new normal
[15:06] What if you had listened to that article?

What every “New Normal” has in common

What can we learn from the past that is predictive in the moment? Almost nothing. People are saying it’s different this time—and they’re right. This recession is because of a pandemic. But there were other crises that led to recessions. The Vietnam war, the savings and loan crisis, the Asian financial crisis, the.com bubble, the great recession of 2008, and many more.

Every financial crisis has a different cause and crises keep happening. Why? Because they're NOT predictable. If downturns in the market were predictable, things would self-correct easily. The truth is, all of these events only have one thing in common: each time they happen, people say “It’s different this time”.

The best way to deal with a crisis

Every crisis IS different, but the best way to deal with them is always the same. We can’t control the crisis. But what we can control is how we respond to them. You need to prepare to deal with the unexpected before it happens—not when you're stuck in the middle of it. When you're stuck in the middle of it, you make bad emotional decisions. We should call it the old normal—because these things happen. Go back to the principles of dealing with the uncertainty in the stock and bond markets. Things don't line up exactly the way that we want them to, ever. So what do you do?

[bctt tweet="What is the best way to deal with a crisis? Listen to this episode of Best in Wealth for my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #NewNormal" username=""]

Two things we MUST do

You want to make sure you are doing two things to be prepared when every new normal comes around. Firstly, look at the probability of various outcomes and then decide how much risk you want to take. What is your risk tolerance? What is your risk capacity? What is your required rate of return to achieve everything that you want to? Then we can develop a portfolio that matches your risk level.

Secondly, be prepared for market downturns once or twice a decade. Accept that you’ll never know when they’re going to happen. You don’t have to predict the crisis that’s coming, you just need to be prepared for it. When you have a plan and are prepared for a crisis, you feel better before and after they come. You don't need to stress out about your investments because you already know what the outcome is going to be when you live through the economic downturns.

And if you have a good investment policy statement, that's what you will do. You will rest easier if you don't already have a plan that includes crises and the range of possible outcomes. It's not too late to create one. I don't care if you're 25 or 75, it's never too late. Having a plan should be the new normal.

What if you had listened to that article?

What if you had listened to the Business Week article from 1970? You’re 30 years old, and let’s say you decided to pull all of your money out of the market. If you had $50,000 in treasury bills it would be $250,000 now. If you put the $50,000 in the S&P 500 (which I wouldn’t recommend now) you’d have $4.3 million now. That’s the difference between a good retirement and a great retirement.

If you think the “new normal” is what the media is telling you, you could be the person losing out on millions of dollars. Instead of trusting the media, make your new normal planning for your future. That means investing, estate planning, planning insurance, having a spending plan—all of it. And if you do that, you will have a successful outcome in retirement.

[bctt tweet="What is the #NewNormal? Why do people keep using this phrase? Hear my take in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

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3 Decisions That Could RUIN Your Retirement Plan, Ep #147

Fri, 26 Jun 2020 05:00:00 -0500

Do you have a plan for retirement? Or are you just living life and allowing the everyday busyness to drown out thoughts about your future? I firmly believe you need to have a retirement plan in place. In this episode of Best in Wealth, I will explain why. I talk about 3 decisions that can impact your retirement plan—either positively or negatively.

[bctt tweet="In this episode of Best in Wealth, I share 3 Decisions That Could RUIN Your Retirement Plan. Listen to hear what those are and which path you could take. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Retire #Retirement" username=""]

Outline of This Episode

[1:02] The THREE decisions that could ruin your retirement
[1:43] Two things I learned from a funeral
[6:06] Making decisions IS hard
[8:54] Decision #1: Failing to plan for retirement
[13:38] Decision #2: Planning to work longer as part of your plan
[17:42] Decision #3: Not hiring a financial advisor

Life is a series of decisions

Making decisions is hard. Some of us are quick decision-makers while others struggle to make the easiest of choices. But what we don’t always realize is that life is all about decisions. You have to decide whether or not to get married, whether or not you’ll buy a home, and whether or not you’ll have kids.

Sometimes, we lock up and do not make any decisions. But a non-decision is still making a decision.

Some people do this with investing. They are sitting on hundreds of thousands of dollars of cash, but they do not know how to invest the money. So they let it sit and forego making a decision—and waste everything that they could be doing with that money.

Decision #1: Failing to plan for retirement

Why do you need to plan for retirement? Firstly, you want to be on the same page as your spouse. What if your ideas for retirement are not the same? It will become a BIG issue down the road when you are close to retirement and you have each planned two different paths. You need to coordinate and compromise with your spouse now.

Secondly, if you do not plan your retirement, you may never get it. So I advise you to start with the end in mind. Think of your life as a book: You want to write the last page now—or someone else will write it for you. You have really big dreams, right? Start retirement planning now to make sure you have the resources in place to accomplish your dreams.

You do not want to look back on your life and be filled with regret. Regret will leave you bitter, and we don’t need more bitterness—we need more wholesome family stewards. Are there things holding you back? Do you know where to start? Do you need a financial advisor? Not starting and not retirement planning is a non-decision—but still a decision.

[bctt tweet="Why do you need to plan for retirement? I share my thoughts in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Retire #Retirement" username=""]

Decision #2: Planning to “Just work longer”

I knew a guy who was the VP of a large company and was doing quite well for himself. Then the Great Recession hit. He did not have an investment strategy and retirement plan in mind and he panicked. He sold all of his investments at the lowest point he could. He thought he would be okay, because he would just work longer and push back retirement. Flash-forward one year, his company started downsizing, and he lost his job.

Planning to work past normal retirement age is all well and good—until a wrench is thrown in your plans. And life has a tendency of throwing curve balls when you least expect them. Sometimes your health does not allow you to work longer than you want to. What if your spouse passes away? Suddenly, you are left trying to hold things together alone.

You need to prepare for those curve balls and think about what life could throw your way. Plan for what your retirement plan could be at 55, 60, or 65. Plan to get to financial freedom as quickly as you possibly can so you do not HAVE to work longer.

Decision #3: Hire a financial advisor

Part of my life plan was doing a podcast. I never started this podcast to gain more clients. I simply want to reach more people and keep them motivated on their financial journey. But I will say this: you NEED a financial advisor.

There are many reasons why you should obtain a financial advisor. You can hire an advisor to simply help you make a financial plan. OR they can sit next to you through your entire financial journey. You need someone who can come alongside you and be objective about your money when you are only able to be subjective.

Normally you are the one creating the investment plan, creating a retirement plan, trading, working the 401k, etc. But what happens if you are no longer around? What is your spouse going to do? Do they have access to bank accounts, trading accounts, and passwords? If you do leave this earth first, do not leave your spouse hanging. Think this through and get a retirement plan in place. You need someone you trust in your corner.

If you are interested in connecting with me, go to Fortress Planning Group and schedule a conversation with me. I would love to help you in whatever capacity I can so that you have a plan for financial freedom.

[bctt tweet="In this episode of Best in Wealth, I touch on why you NEED a financial planner in your life (and other decisions that affect your retirement plan). Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Retire #Retirement" username=""]

Resources & People Mentioned

BOOK: I’m Dead, Now What?

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Your Investment Mix: Small Companies or Large Companies? Ep #146

Fri, 12 Jun 2020 05:00:00 -0500

Do you have the right investment mix in your portfolio? Does it include a balance of large and small companies? In this episode of Best In Wealth, I talk about the differences between small and large companies, why you’d want to own either of them, what the science says, and whether or not you can time when to own a small or large company. If you’ve considered adding small companies into your investment mix, check out this episode!

[bctt tweet="What should you have in your investment mix? In this episode of Best in Wealth, I talk about small companies and large companies—and why you should invest in both. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:19] What’s been going on with the stock market
[3:50] Do you have the right investment mix in your portfolio?
[4:43] Where the stock market stands right now
[6:31] The definition of what makes a large or small company
[8:11] Why would I want to own a small company?
[12:22] Why you should demand a higher rate of return with small
[14:56] What the science of investment tells us
[18:34] Why you shouldn’t apply market timing tactics
[21:05] What the performance of small and large companies tells us
[22:20] Know what your goals are before you develop your investment plan

What defines a small or large company?

A large company is calculated by taking its outstanding shares and multiplying them by their current stock price. If the resulting number is $10 billion or higher, it’s considered a large company. Think brands like Apple, Amazon, Facebook, McDonald’s, etc.

A small company is calculated in the same way—by taking their outstanding shares and multiplying them by their current stock price. However, If the resulting number is between around $500 million and around $2 billion it is considered a small company. These still aren’t “small” by most people’s definition of small (i.e. a local plumbing company).

Right now, year-to-date, The S&P 500 is only down 3.5% and small companies are down about 15%. Keep listening as we discuss why that’s important.

Why your investment mix should include small companies

Let’s say McDonald’s is worth $200 billion. McDonald’s has amazing brand recognition, thousands of locations, and years of positive cashflow. Versus Shake Shack—hypothetically worth around $2 billion, less brand recognition, fewer locations, etc. It makes sense to invest in McDonald’s. After all, the odds of them going belly up are slim-to-none.

About 3% of small companies go out of business in any given year, and up to 6% during economically tough years. But it’s also far easier to take a $2 billion company and double it to $4 billion than to double McDonald’s massive $200 billion empire. Shake Shack is a riskier investment, but as an investor, you can demand a higher rate of return owning Shake Shack vs. McDonald’s.

[bctt tweet="Why should your investment mix include small companies? I share the details in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What does science tell us?

The first key I emphasize when you invest in anything is that it has to make sense. The data has to be persistent and robust and the science has to be pervasive, in the US and around the world. So what does the science tell us?

From 1928 to 2019, large companies average a return on your investment of approximately 9.9% a year. Small companies average a return of investment of 11.94% a year. A 2% difference might seem minuscule, but think about it this way:

If you allot $100,000 to large companies, hold it for 30 years and obtain a 9.9% ROI, you’d see a $1.7 million return. If you allot that same $100,000 to small companies, hold it for 30 years, and get the 11.94% return on your investment—you’d see a $2.9 million ROI. So that 2% makes a pretty large impact after all!

Can you apply market timing to large and small companies?

I believe market timing is dangerous and doesn’t work in the long run. I don’t recommend the strategy, and here’s why: We don’t know WHEN small companies will beat out large companies. The percentages are an average of over 90 years—some years small companies perform better and in other years they have a dismal return.

Large companies have performed extremely well in the last 10 years, while small companies have outperformed their average by a minuscule amount. Market timing strategies will give you a stomach-ache and leads to emotional decision making. The longer you hold small companies the better chance you have of them outperforming large companies and get closer to that 2% premium.

That’s why you should have a balanced investment mix of both large and small companies and hold them long-term. You’ll have a much higher probability of seeing a higher expected return for your retirement. Regardless, you shouldn’t dive into small or large companies without a plan. You must know your risk capacity, risk tolerance, and required rate of return to develop a plan with the proper investment mix.

To hear my full thoughts and an in-depth explanation of each section, listen to the full episode!

[bctt tweet="Can you apply market timing to large and small companies? Hear my take in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources & People Mentioned

Connect With Scott Wellens

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4 Steps to WIN with Money in Your Marriage, Ep #145

Fri, 29 May 2020 05:00:00 -0500

Do you and your spouse fight frequently about money? Are you on completely different pages when it comes to spending money? Do you feel like you’re being heard? You should start the conversation now by having regular meetings with your spouse to discuss your financial plan. If you’re ready to win with money in your marriage, listen to this episode of Best in Wealth!

[bctt tweet="In this episode of Best in Wealth I share 4 Steps you can take to WIN with Money in Your Marriage! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:42] How are you surviving Coronavirus?
[4:42] 3 reasons married couples fight about money
[9:32] Step #1: Actively listen to your spouse
[13:00] Step #2: Respect what your spouse said
[14:11] Step #3: Compromise to find a middle ground
[15:53] Step #4: Commit to a spending plan
[20:11] Where are you in your marriage?

Three common reasons married couples DON’T win with money

Most couples that fight about money fall into one of these three categories:

You have debt: One or both of you have debt. The higher your debt the higher the chance you’re fighting about it. Debt breeds stress which leads to more arguments.
Different values: Do you and your spouse hold different values about money? Does one of you find comfort in saving money and the other like to spend money on comfort? My wife enjoys spending money on vacations while I’m more of a homebody. Neither is bad—just different.
Income disparity: Does one of you work outside the home and the other is a stay-at-home parent? OR does one spouse make more than the other? Sometimes, the spouse that makes more starts referring to the household income as “my” money—which is dangerous to get caught up in.

Everyone comes from different family backgrounds and has different beliefs about money. But there are some steps you can use to overcome those differences to get on the same page.

Step #1: Actively listen to each other

The first strategy is to actively listen to each other. Spend time talking about short and long-term goals for your future. What’s important to you? When do you want to retire? What do you need to save monthly to retire when you want to?

To win with money, I recommend setting monthly “money dates” where you meet in a low-tension setting to discuss your budget for the month and where your money will be allocated. It’s important to set aside time for each other to talk and listen.

[bctt tweet="In order to #WinWithMoney, married couples need to actively listen to each other. Listen to this episode of Best in Wealth to learn more! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Step #2: Respect your spouse’s feelings

So you’ve set aside time to chat with each other about your money goals and have listened to your spouse’s desires. Now you need to take it a step further and respect what your spouse said. Just because something isn’t important to you doesn’t mean it isn’t important to your spouse. When you take the time to actively listen and comprehend what your spouse wants to do with your budget and respect their opinions, you’re less likely to fight.

Step #3: Compromise is KEY

Once you’ve practiced active listening and chosen to respect your spouse's opinion you move on to find a compromise. Compromise will allow you both to feel comforted with how you’re handling your money. Compromise is powerful. It shows that you really listened and are willing to make sacrifices so that each person is happy with the decisions you land in. Don’t let the connotation of compromise be negative—compromise is a wonderful way to build a foundation of trust in your marriage.

[bctt tweet="Compromise is KEY to a healthy money mindset in your marriage. Learn how to win with money by listening to this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Step #4: Commit to a spending plan

The first step of commitment is putting an action plan in place. Write it down so you don’t sink back down to where you were previously. Need help setting a budget? Review episode 137 to help define a spending budget for your daily.

The second part of committing to a plan involves creating a retirement plan—what I like to call your financial freedom plan. We all aim to be financially free by retirement age, even if we don’t plan to retire. Let these monthly meetings be times where you dream together about your future and what you want your retirement to look like.

I go in-depth on each of these strategies to help you and your spouse win with money. Be sure to listen to the whole episode for more detail!

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Credit Scores 101: Everything You Should Know, Ep #144

Fri, 15 May 2020 05:00:00 -0500

This episode of the Best in Wealth podcast is a crash course: Credit Scores 101. I answer some of the questions you may have: What is a FICO score? Why do you want a good credit score? How do you improve your credit score? When should you consider closing a credit card? I break your credit score down to help you understand how it works for you and why it’s important. If your credit score has you confused, don’t miss this informative episode.

[bctt tweet="In this episode of Best in Wealth I talk credit scores: Everything you NEED to know. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:53] My wife’s credit score is always...
[5:50] How your credit score is determined
[9:15] the NEW standard that just came out
[10:23] Why do I want a good credit score?
[13:34] How do you build your credit score?
[18:48] When should you CLOSE a credit card

Credit Score 101: What IS a credit score and HOW is it determined?

When someone is talking about a credit score, they’re typically referring to a FICO credit score. FICO stands for “Fair, Isaac, and Company”. It is the oldest and most well-known of the credit reporting agencies. A FICO score can range from 300 to 850—a higher score is better. Your credit score is based on your credit history. Its purpose is to help lenders estimate how likely you are to repay the money that you borrow.

How are the scores rated?

Poor = 579 or lower
Fair = 580–669
Good = 670–739
Very Good = 740–799
Exceptional = 800–850

Now that you know what a FICO credit score is, and what the ranges are—how do they calculate your rate? It’s based on these things:

Credit Card Payment History: This accounts for 35% of your credit score.
Credit Utilization: Your credit card limit and how much you’re using accounts for 30% of your score. You want to use under 30% of your credit limit at all times or it will negatively impact your score.
Age of Credit History: How long your credit accounts have been open accounts for 15%.
Credit Account Types: This accounts for 10%.
Hard Inquiries: When a bank, car insurance, employer, etc. check your credit score it impacts your credit and counts as much as 10% towards your score (NOTE: Checking your OWN credit score doesn’t make an impact).

A NEW standard was just announced that will shift these percentages. Listen to find out what those changes are!

Why you should strive for a good credit score

There are 6 reasons why you want a good credit score:

A better credit score typically equates to a better interest rate on loans when you go take out a loan. It can be a difference of thousands of dollars.
Insurance companies use your credit score to calculate your rates. The difference between a poor score and a high score can impact your rates as much as 67%.
Your credit score is checked and impacts whether or not you can rent an apartment or home.
A high credit score can get you a security deposit waiver on utilities when you purchase a new home.
If you’re buying a new phone and have a poor credit score, a carrier may require a deposit.
Prospective employers may look at your credit score to determine whether or not they’ll hire you.

[bctt tweet="Why should you strive for a good credit score? I share 6 reasons in this episode of Best in Wealth (and so much more). Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Build a better credit score

We’ve established WHY you want a good credit score. So what do you do if you have a poor score? Can you build it up? The simple answer is yes—you CAN rebuild your credit score. Here’s a few ways you can increase your credit score:

Don’t be late paying your bills—EVER—it will have a long, far-reaching impact.
Avoid maxing out your lines of credit—keep it under 30%.
If you can’t keep your running credit under 30%, consider increasing your limits.
Patience is key: the longer you have credit history, the better your score will be.

The THREE instances you should close a credit card

Closing lines of credit typically negatively impact your credit score. You’ll see an initial drop followed by a slight raise when credit checks realize you’ve closed a card. But it likely won’t get back to where it was.

So why would you want to close a credit account? There are 3 reasons when you’d want to consider closing a credit card:

If you have a high fee on a card you never use. You can close the card, or see if you can switch to a different card with a lower fee.
If you’re worried about identity theft and want to lower the odds of your identity being stolen, it’s advantageous to have fewer credit cards open.
Close your credit card accounts out to regain control of your finances. If you’ve maxed out credit cards, can’t control your spending, or want to get in control of your debt, this is important.

Listen to the whole episode to find out what you can do if you decide to close out your credit cards, or have no credit history whatsoever. There are still options out there.

[bctt tweet="There are THREE instances in which I believe you should close a credit card. What are they? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources & People Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth

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5 Tips to Prepare for a Recession, Ep #143

Fri, 01 May 2020 05:00:00 -0500

Is it time to prepare for a recession? I predicted at the end of 2019 that one would be coming—and many argue that we are already deep in the trenches. But what is a recession? What indicates that we ARE in a recession? In this episode of Best in Wealth, I’ll share those indicators, what we can learn from past recessions, and 5 tips to prepare yourself and your family.

[bctt tweet="In this episode of Best in Wealth I share 5 Tips to prepare for a recession. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[4:25] How I predicted a recession was coming
[6:20] What is the definition of a recession?
[7:03] What are the indicators of a recession?
[10:07] What we can learn from past recessions
[16:30] Recessions don’t need to be scary
[17:40] 5 Tips to prepare for a recession
[24:55] What did we accomplish while life was standing still?

What IS a recession?

The definition of a recession is a period of economic decline within a certain region such as the United States. There must also be at least two quarters of negative Gross Domestic Product (GDP). Technically speaking, we won’t know if we’re in a recession until the GDP reports for the 1st and 2nd quarter of 2020 come in. So what are the indicators of a recession?

An increase in unemployment numbers
A downturn in the stock market
A downturn in the housing market
Negative returns in GDP

We are slowly checking the boxes on all these indicators. Unemployment is past 20%. The stock market at its lowest was down -37.5% from its 52-week high. It’s projected that home sales will drop 35% in the 2nd quarter compared to the end of 2019. The GDP will be the final nail in the coffin, but it appears we are well on the way to our 16th recession.

What we can learn from past recessions

The question at the back of everyone’s minds is “Should I be afraid?”. The best way to answer that question is to look at statistics from past recessions.

There have been 16 recessions since 1929
The average recession lasts 16 months
11 of 15 recessions end with your portfolio in positive territory after 2 years
4 of the 15 recessions required holding your portfolio 3-5 years to see positive returns
Only one recession—the great depression—required holding your portfolio for over 10 years to see a positive return

Recessions don’t need to be scary. The mass media wants us to believe they are so we make emotional decisions. Stocks WILL go down, but the WILL recover. So hold tight and don’t make emotional decisions.

[bctt tweet="What can we learn from past recessions? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

5 tips to prepare for a recession

I wanted to share 5 tips to help you prepare for a session. You don’t have to panic and make hasty decisions. Instead, this is what I recommend:

Keep investing. The money you invest this year will have more growth potential than what you invested in 2019 because you’re buying in at lower values. Have any extra money on the sidelines? Put it to work!
Don’t take your inflation adjustment. If you’re retired you typically take out 4% from your retirement plus a percentage for the rate of inflation. I recommend leaving the extra in your portfolio this year to extend its longevity.
Build a spending plan. Put a budget in place and track your expenses so you use your money wisely. You’ll often be able to find extra money that was being wasted.
Increase your emergency fund. I recommend having 3-6 months worth of expenses in an emergency fund. The larger it is, the longer you can withstand not getting a paycheck. I recommend splitting any extra money (stimulus checks anyone?) you have between your emergency fund and investments.
Cut back on your spending. Anyone else have Amazon packages on their doorstep every day? It’s easy to spend more than necessary when you have more time on your hands. But it’s important to curb your spending and save it for necessities.

These 5 simple tips help you prepare for a recession—and get through to the other side.

Hopefully the season we find ourselves in never happens again. But I want you to ask yourself: What am I doing to take advantage of this time? Are you spending this season of your life complaining? Or finding ways to accomplish something positive? I want to leave you with that challenge. These are trying times—but you can come out on the other side stronger and proud of how you navigated this season.

[bctt tweet="Want to learn 5 ways you can prepare for a recession? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources & People Mentioned

Home Sales Projections
Best in Wealth Episode 137
Best in Wealth Episode 140

Connect With Scott Wellens

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Dissecting 3 Market Timing Strategies, Ep #142

Fri, 17 Apr 2020 06:00:00 -0500

Is it ever a good time to take your money out of the market? I’m sure everyone was tempted to jump ship when they saw the S&P 500 drop to negative 37.4%. Numbers like those can make anyone reconsider their investment strategy. Will we be better off if we step out of the market for a while? In this episode of Best in Wealth, I dissect 3 market timing strategies. I’ll cover which yields the most favorable results—and land on one strategy that outperforms the rest.

[bctt tweet="In this episode of Best in Wealth I dissect 3 Market Timing Strategies—and share which gives you the best return. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:12] When people say “I told you so”
[4:07] Stick to a set of fundamental principles
[9:59] The two decisions you have to make
[11:36] Market timing strategy #1
[14:22] Market timing strategy #2
[16:31] Market timing strategy #3
[19:17] The buy and hold strategy
[21:15] What can we learn from these numbers?
[23:01] How do we maintain control?

Market Timing Strategy #1

If we owned stock in the market from July of 1926 to December 2019, we’d have an annualized rate of return of 9.57%. In the following strategies, we will be comparing the approximate annualized rate of returns to that average.

The first timing strategy involves taking your money out when the market is down 10%. Then, you wait either 100, 200, or 300 days to inject your money back into the market. After each time-frame, this is what the returns look like:

100 Days: Annualized rate of return of 7.11%
200 Days: Annualized rate of return of 6.67%
300 Days: Annualized rate of return of 5.89%

As you can see, these numbers are far below the average of 9.57%. We need a timing strategy that outperforms these numbers.

Market Timing Strategy #2

In this strategy, we hold our money until we hit bear market territory—a 20% drop from the high. If we pulled our money out of the market and reintroduced it at:

100 days: 6.8% annualized rate of return
200 days: 6.08% annualized rate of return
300 days: 5.75% annualized rate of return

This strategy still isn’t faring any better—let’s move on to the 3rd.

[bctt tweet="One market timing strategy consists of pulling your investment out of the market when it’s down 20%. Listen to this episode of Best in Wealth for a full explanation! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Market Timing Strategy #3

You’ve waited almost as long as you can bear. The market has dropped 30% and everyone feels the need to bail. We want to get to safety and wait for better times. So what happens if you yank your money at this point?

100 days: 8.71% annualized rate of return
200 days: 8.55% annualized rate of return
300 days: 8.66% annualized rate of return

Alright, so this is by far the best strategy. It’s a decent rate of return—but still over a percent away from that 9.57% average that we want to be hitting. So what do you do?

The BEST strategy: Buy and Hold

As much as it pains you to think about it, the buy and hold strategy is your best bet. In fact, leaving your money in the market will add up to hundreds of thousands of dollars throughout your lifetime of investing. Granted, these are all hypothetical numbers based on looking at the indexes, but the concept holds true.

Financial downturns are unpleasant for everyone, but investors are trained to reduce an exasperating circumstance by adhering to our core principles. A famous quote of unknown origin goes: “You don’t rise to the occasion, you sink to the level of your training.” It’s why we diversify your assets, consistently allocate them, and move towards higher expected returns. We stay away from market timing and stock picking because it undermines your ability to achieve your investment goals.

[bctt tweet="What is THE BEST strategy to get you the highest % annualized return this year? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

How to maintain control in a time of uncertainty

I’ve found that the best way to maintain control of your emotions is to practice gratitude. Maintain a positive attitude and hope for a better future. I’ve linked an inspiring Ted Talk by Shawn Anchor below about how an attitude of gratitude changes you biologically. Be sure to give it a listen.

In the rest of the episode, I deep-dive into the reasons WHY the ‘buy and hold’ strategy is the way to go. Listen to the whole episode to help minimize some of the fear you’ve been experiencing.

Resources & People Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth

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What you NEED to Know About the CARES Act, Ep #141

Fri, 03 Apr 2020 05:00:00 -0500

The CARES Act—Coronavirus Aid, Relief, and Economic Security Act—is at the forefront of everyone’s mind right now. It’s an estimated $2 trillion relief package with over $500 billion being allocated to individual rebate checks. $500 billion is being dispersed to affected industries, $400 billion for small businesses, $300 billion for state and local government, and $150 billion for hospitals and healthcare systems.

That is a LOT of money. In this episode of Best in Wealth, I aim to help you understand what affects you as an individual. I’ll cover who qualifies for a recovery rebate check and how it’s calculated. I’ll also talk about when and how you’ll be receiving the money—and what the government wants you to do with it. Don’t miss this episode that’s packed full of need-to-know information.

[bctt tweet="In this episode of Best in #Wealth I dissect what you NEED to know about the CARES Act—and the rebate check you may get. Don’t miss it! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Coronavirus" username=""]

Outline of This Episode

[2:13] Every corner of our house is spotless
[3:28] Breaking down the CARES Act
[5:21] Details on the recovery rebate checks
[12:40] How your qualification will be calculated
[17:57] WHERE and WHEN will we be paid?
[20:16] How else will the CARES Act help?
[27:35] Embrace the practice of patience

Breaking down the recovery rebate check

Everyone is eligible for a rebate check. Just let that sink in for a second. Every single adult qualifies up to $1,200 and couples filing jointly up to $2,400 in total. You will receive up to $500 for each child under the age of 17 (NOTE: that does NOT include ages 17 & over). The average family with two children would receive $3,400 in total.

Notice how I said "up to" in the previous paragraph. That's because there are thresholds in place—for every $100 you are over the threshold you lose $5 of the rebate check. For an individual, the income threshold is $75,000. If you are married-filing-jointly the threshold is $150,000. Hypothetically speaking, if you are married and have 4 children (with an excluded 17 y/o) you’d qualify for $3,900. If you make $176,000 then you are $26,000 above the threshold. $5 being removed for every $100 is a 5% deduction. 5% of $26,000 is $1,300. So the maximum you would’ve received is $3,900 minus $1,300 = a $2,600 rebate check.

Keep in mind this is calculated from your adjusted gross income—so student loan interest payments, IRA or HSA contributions, etc. would be excluded from the calculation.

How are they calculating WHO will receive the rebates?

If you have filed your 2019 taxes your rebate will be based on your 2019 return. If you have not already filed your 2019 taxes, they will determine who gets the rebate based on your 2018 tax return. If you have not filed and made less in 2019 than you did in 2018—file immediately. If you made more in 2019, hold off on filing your tax return if it puts you over the threshold (but be sure to file before July 15th). Technically speaking, this is a 2020 tax rebate. Luckily, if you’ve already received the rebate check and you file your tax return for 2019 and are over the threshold you won’t have to return the money.

The downside is for those who made well over the threshold in 2018/2019 but have since been laid off—joining the 3.3 million people who have already filed for unemployment. Your taxes will indicate that you don’t deserve the rebate check—until you file for 2020. If you fall under the threshold at that point, then you will receive the rebate after filing 2020 taxes.

[bctt tweet="How are they calculating WHO will receive the #Coronavirus relief rebate checks? Listen to this episode of Best in #Wealth for the details! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

What is the payment time-frame and delivery method?

If you received your last tax return to a bank account via direct deposit, that’s how you will receive the rebate check. If you were mailed a check, it will be sent to your last known address that was submitted with the tax return.

Treasury Secretary Steven Mnuchin says the expectation is that “most people” will get their payments by April 17. However, that doesn’t include those who received their last tax-return by paper check. It also doesn’t include anyone who may have to amend back accounts.

The government will supposedly set up a portal (and have a phone number available) for anyone who needs to submit a change of address or different bank routing information. If you fall into this category, it will likely be longer before you receive a check.

Other ways the CARES Act can benefit you

During this timeframe, if you’ve been impacted by the Coronavirus—and the IRS is being very liberal with this—it changes distributions you can take out of retirement accounts. You can take up to $100,000 from your IRAs (401(k), 3B, 457, Simple IRA, SEP IRA, etc.) and not have to pay the 10% penalty if you’re under 59 ½. Secondly, the federal government won’t take 20% of Federal taxes upfront.

You can also take up to three years to put the money back into your IRA. You can also take the distribution now but spread over three tax years or have all of it count against 2020 taxes. This is especially helpful if you’ve recently lost your job and find yourself in a lower tax bracket.

I share a few other ways the CARES Act impacts you in the remainder of the episode. Be sure to listen for details!

[bctt tweet="Learn other ways the CARES Act can benefit you (other than a check) in this episode of Best in #Wealth. #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Resources & People Mentioned

CARES Act

Connect With Scott Wellens

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3 Unexpected Ways to Build Wealth During the Coronavirus, Ep #140

Fri, 20 Mar 2020 03:00:00 -0500

What do I mean by ‘build wealth’ while you’re quarantined at home? Many businesses are closing for the foreseeable future. Schools are closing. Parents are learning to navigate working from home while keeping their kids occupied. Our routines are being ripped apart. We are living in unusual times. What was normal yesterday won’t be today.

So what do we do? How do we manage this ‘free’ time at home? In this episode of Best in Wealth, I’ll share 3 ways—that aren’t what you think—you can build wealth during the Coronavirus quarantines the world is experiencing.

[bctt tweet="In this episode of Best in Wealth, I share 3 unexpected ways to build wealth during the Coronavirus. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]

Outline of This Episode

[1:13] Start a family movie night!
[3:47] What you think the episode is about
[6:50] Wealth is about all of your cornerstones
[7:42] #1 - Reconnect with your family
[12:17] #2 - Focus on personal development
[17:02] #3 - Stay positive amidst the negativity
[21:14] How I overcame a stutter and found my voice

What you think I mean when I say ‘Build Wealth’

This would be the perfect time for me to tell you to buy into the stock market right now, while they’re at rock-bottom prices. You could get them at steep discounts. Or I could tell you to take some time to assess your risk, perhaps rebalance your portfolios into different asset classes.

I could tell you to refer back to your personalized investment policy statement so you don’t make panicked decisions. I could tell you to stay disciplined—it is one of the most important things you can do during this time. But I’m not going to talk about any of these things.

So what are the 3 things I am going to share?

#1 Reconnect with your family

Wealth refers to all of your cornerstones. It isn’t just about building something of monetary value. Have you noticed lately how busy you’ve been? Have you looked at your calendar, like I have, and questioned how you’re going to get everything done? Now, suddenly, we’ve been forced to slow down and take a step back.

Volleyball tournaments are canceled. Birthday parties are no more. Church services are being moved online. All of the things that overwhelmed my schedule have disappeared. So I’m going to be intentional about this time and spend time with my family.

We’re going to have movie nights and Netflix binges, play board games, and even put on scarves and gloves to play basketball on a still chilly Wisconsin day. We’re going to make meals together. Focus on building a bond with your family. At the end of your life, your pile of money won’t matter much without them.

[bctt tweet="In this episode of Best in Wealth, one of the topics I cover is taking this time to reconnect with your family. Listen to the whole episode for other quarantine ideas! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

#2 Focus on personal-development

We aren’t watching sports, going to the movie theatre, and we’ve spent time with our family—now what? Why don’t we focus on reconnecting with ourselves? What are things you’ve been putting off? You could read a book, take an online class, or take up a new hobby. Go for a walk in nature and enjoy the beauty around you.

If you’re a spiritual person, it's a great time to reconnect with God. Start reading your bible and setting aside time for prayer. Of course, you could take this time to think about your financial cornerstone. Build your habit goals, define a spending plan, sit down with your spouse and go over your retirement dreams.

#3 Stay positive amidst the negativity

Learn how to stay positive in the negativity. We can choose a different direction. We need to take the COVID-19 pandemic seriously, but that doesn’t mean giving in to panic. You are allowed to go through this experience however you choose, but here are some ideas to stay positive:

Keep a daily gratitude journal. Write down 3 things that you’re thankful for today.
Exercise. Exercise releases endorphins that boost your mood.
Limit the amount of news you’re watching. The news sensationalizes everything.

Stay informed—watch the news, read articles, do deep-dive research, but don’t spend all of your time clinging to the latest news. You will end up in a negative state of mind, which will make this phase more difficult.

What are some things that you’re going to do during the Coronavirus pandemic to build wealth?

[bctt tweet="How can you stay positive amidst the negativity and panic surrounding the Coronavirus? Listen to this episode of Best in Wealth to hear my take. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources & People Mentioned

Connect With Scott Wellens

Subscribe to Best In Wealth

Podcast Disclaimer:

Will the Coronavirus Outbreak Affect my Investments? Ep #139

Fri, 06 Mar 2020 08:00:00 -0500

The coronavirus is making waves around the world, inciting fear in its wake. But what will it’s true impact be on a global scale? Will it affect my investment portfolio? In this episode of Best in Wealth, my goal is to quell your fears. I’ll talk about recency bias, how past pandemics affected the stock market, and what to expect from the coronavirus.

So what is the coronavirus? The official name is COVID-19. According to the CDC, current symptoms include mild to severe respiratory illness with fever, cough, and difficulty breathing. The virus originated from an animal (similar to MERS and SARS) but can be transmitted by human-to-human contact.

[bctt tweet="Will the Coronavirus Affect my Investments? I share my thoughts on the pandemic In this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Outline of This Episode

[1:59] The topic of the day: coronavirus and your investments
[2:05] What do you do when your kids get hurt?
[3:37] How will the coronavirus affect my investments?
[6:14] Current global toll from the coronavirus (Feb. 27th)
[7:54] SARS impact on the stock market and global economy
[9:20] The impact the Bird Flu had—lethal but short-lived
[10:21] The Swine Flu was the most widespread pandemic
[12:09] Put the current pandemic in the proper perspective
[12:49] The impact of Ebola and the Pneumonic Plague
[13:14] The market will recover quickly based on past trends
[14:54] What happens next?
[17:17] What do we do with our investments?

You must overcome recency bias

Recency bias is a simple construct: you remember clearly what’s happened most recently, compared to something that has happened in the near past. With every new virus that becomes widespread, we forget the impact of those that have come previously. Human instinct—and certainly that of the media—is to revert to panic.

I’ve done extensive research this week to gain information about pandemics that have struck within the last twenty years to see what the recent past tells us. Outbreaks come and go, but we need to be sure to educate ourselves and be prepared for the potential outcomes.

How global pandemics of the past impacted the stock market

I’ve narrowed down and gathered some statistics on a few outbreaks and how they impacted the global economy:

Severe Acute Respiratory Syndrome (SARS): Sars began to spread in early 2003 with an outbreak concentrated in Asia. It reduced the global GDP by 33 billion dollars. The first month after it broke the market was up 86%. After 6 months, the market was still up 21.5%.
The bird flu: In 2016, the bird flu affected fewer people but had a higher death toll, which was quite scary. While lethal, the epidemic was short-lived. After one month the market was flat, but 6 months later the market was up 10%.
The swine flu: The CDC announced the spread of the swine flu in 2009. It originated in Mexico and could not be contained. It became so widespread that President Obama declared a public health emergency. Between 700 million and 1.5 billion people contracted the swine flu with close to half a million deaths. Despite everything, the market was up 11% a month into the epidemic and was up 40% after 6 months.

Keep listening as I share a few more statistics on widespread viruses. But the long-term impact of nearly all of them was a rebounding market.

[bctt tweet="In this episode of Best in Wealth, I share how global pandemics of the past impacted the stock market—and what we could expect from the coronavirus. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Put the Coronavirus in proper perspective

In light of our tendency towards recency bias and the impact of past pandemics, it’s important to put the coronavirus in the proper perspective. Currently, as of Feb. 27th, Covid-19 has affected 82,550 people worldwide and 2,810 people have died. While it is still scary, it pales in comparison to past pandemics.

Every time a pandemic hits we are in different stages of the economy—expansion, recession, a bear market, etc. Right now, we’ve hit a correction territory, which on average happens once a year. The market has dropped by about 10% since the end of December. But from my experience, the quicker it drops, the faster it snaps back.

Perhaps the virus will have greater consequences on the global economy than anticipated. We don’t know where the pandemic is headed or what will happen next. But if it follows the trends of the past, confirmed cases will rise sharply for 8-10 weeks and the infection will taper off come spring. The coming weeks will be horrible—but the market will recover.

The all-consuming question: What do I do with my investments?

It’s possible that the coronavirus could trigger a recession in the global economy. But the economy could already have been vulnerable. There is no real way to know the impact. So what happens next for your investments?

Do not panic. A short-term pandemic doesn’t equal changing your long-term investments. If you’re investing the right way from the beginning a downturn doesn’t affect your portfolio. The right asset classes will still produce your monthly check. Don’t make emotional decisions based on fear. The markets will recover. So stay calm, carry on—and wash your hands.

To prevent the spread of germs: wash your hands frequently, cover your mouth when you cough, eat well, get adequate sleep, and exercise. Avoid health risks by practicing good hygiene.

[bctt tweet="In this episode of Best in Wealth I answer the all-consuming question about the coronavirus pandemic: What do I do with my investments? Listen now! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""]

Resources & People Mentioned

Annie Nova’s Article on the Coronavirus
Jeffrey Kleintop’s Market Commentary
Mark DeCambre’s article on the stock market
You, Your Investments, and the Coronavirus by Rick Raybin
The CDC on the COVID-19 “Coronavirus”

Connect With Scott Wellens

Subscribe to Best In Wealth

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You Need Retirement Goals, Ep #138

Fri, 21 Feb 2020 00:00:00 -0500

Podcast Intro:

Do you want to finish your life well? Today in an All-Pro Dad group that I run at my kids' elementary school we talked about finishing well. I talked about trying your best but knowing you will make mistakes in any sport, instrument, or competition that you are involved in. The key is learning from the mistake and then forgetting about it so you can finish well. If you dwell on your mistakes you will not finish well. What about your life? How will you ensure that you will finish well? To finish well we need to plan well. In the world of financial planning, that means turning our dreams into goals and eventually our goals into reality.

Podcast Topic of the Day: You Need Retirement Goals

Three Reasons You Need Retirement Goals

1. Otherwise, it is just a pile of money. People who focus on the dollar amount they have saved and not what they will do with their money have a hard time dreaming. They also have a hard time spending the pile since they spent their whole life focusing on the number.

2. Goals help you stay MOTIVATED. If you want to finish well, you need motivation. Life is hard and busy so we need to keep our eye on the goals we will finish well.

3. Goals will determine how much you actually need to save. Maybe you are not saving enough, or perhaps you can afford to enjoy some of life now because you are saving too much.

Tune in and listen to the podcast as I share some of the most common dreams and goals people have in retirement. Listen to the end to ensure you will finish well!

Podcast Closing Words:

We all have a desire to finish well. Once in a while, I imagine myself in my last days. I want to say to myself, “Scott, you finished well.” I want you to say the same thing.

Show Links:

Fortress Planning Group

Best In Wealth episode 137 - Set Up a Budget in 7 Steps

Best In Wealth Episode 134 - The Number 1 Reason You Won't Reach Your Goals

Podcast Disclaimer:

Thanks for listening

Best In Wealth Trailer

Mon, 17 Feb 2020 20:37:00 -0500

Listen to the podcast trailer to learn exactly what you're going to hear in the Best In Wealth podcast.

Set Up a Budget in 7 Steps, Ep #137

Fri, 07 Feb 2020 08:00:00 -0500

Podcast Intro:

Scott starts the podcast by discussing the recent roller coaster ride that has happened in the global financial markets over the past couple of weeks and how the ups and downs can make many people feel out of control. Feeling out of control is often how people feel when they have a lot of debt. Scott mentions that he is teaching Dave Ramsey’s Financial Peace University (FPU) at his church and his job is to help motivate and provide encouragement to people that have a lot of debt so that soon enough these people will feel in control of their finances.

Podcast Topic of the Day:

How to do a Budget

The topic of the day is How to do a Budget. During the podcast, Scott covers 7 easy steps to create a budget, or a “spending plan” as Scott prefers to call it. According to Scott, all people need a spending plan.

Step #1 for building a spending plan is to acknowledge that both people in the relationship must participate in the development of the spending plan (or budget). If you are single, then you can skip Step #1. Scott discusses how it is likely that one person may be the budget “nerd” and their partner may be the “free spirit”, but it is critical that both participate in the development of the spending plan.

Step #2 for building a spending plan is to acknowledge that you are going to make a zero-dollar budget. In other words, you are going to assign every dollar you make to a budget entry.

Step #3 for building a spending plan is to list out all monthly expenses by category. Everything that you spend money on during a month needs to be listed. This list should also include your monthly saving and your monthly giving, and it should cover every dollar of your household take home pay. Scott reviews Dave Ramsey’s basic guidelines that Dave recommends for various expense categories; however, he cautions that these are just basic guidelines and may vary by an individual’s unique situation. The first category Dave recommends placing at the top of your monthly expenses is giving, and Dave recommends starting with 10% of your take home pay be allocated to giving. Even though you may be in debt, it is important to start giving now so that when you are out of debt later in life you can give more. The second category is saving, with a recommended allocation of 10-15%. Depending on how you are saving, you may already be saving 10-15% in a 401(k), therefore, you may not need to save anymore out of your take home pay. The third category is food with a recommended 10-15% allocation. Mortgage or rent is the 4^th category with a recommended allocation of 25%. Those that are spending more than 25% on their mortgage or rent often find that there is not a lot of money left to spend in the other budget categories. Your utilities are the 5^th category with a 5-10% allocation. Vehicle expenses such as gas, maintenance and oil changes should be allocated at 10% and are the 6^th category. Note, this 10% does not typically include car payments. Fun money, or as Scott categorizes in his spending plan, a “flex fund” category should be included next. The fun money or flex fund should be allocated at 5-10% depending on your overall spending plan. The final categories are clothing 5-10%, entertainment 5-10% and a miscellaneous category that is 5-10%. The miscellaneous category is a great category to cover items that are missed or not known at the beginning of the month, such as a birthday party gift for a kid’s birthday that you or your child was invited to.

Step #4 is to add up all the irregular expenses that do not occur on a monthly basis. Examples of these irregular expenses are annual car insurance payments, water bills, property tax bills, family birthday gifts, etc. Once you have identified and added up all of these expenses, divide the total by 12 and add a line item to your spending plan called escrow. This escrow budget line item will be used to pay irregular expenses as they occur throughout the year. When budgeting is done correctly, this escrow line item should be zero at the end of the year. Scott points out that this particular line item can often be where a budget fails because these irregular expenses were not properly accounted for. Additionally, the timing of these irregular expenses may require that this escrow budget line be funded at the beginning of the year in order to pay for expenses that occur at the beginning of the year before the escrow account has a chance to build up.

Step #5 is to make budget adjustments as needed. In other words, has every dollar been accounted for? Are there dollars left over that need to be allocated or do adjustments need to be made because there are not enough dollars to cover all the expenses. Scott discusses debt and the need to make sure that all debt payments are included in the budget. He references Chris Hogan’s analogy that debt is a budget thief. Debt payments “steal from” or take money away from the budget categories that we want such as giving, saving and entertainment. During Step #5, you need to make all the necessary spending plan adjustments to make sure that you have all your take home dollars allocated in order to have zero dollars left over at the end of the month.

Step #6 is to be proactive and track the budget throughout the month. You cannot wait until the end of the month to see how you did, but rather you need to track spending throughout the month. Scott references an app he uses called the EveryDollar Budget app. Whether you use the EveryDollar app, another app or a spreadsheet, it is critical that you be proactive and that you are tracking your expenses as they occur throughout the month.

Step #7 is to have a monthly budget meeting or as Scott calls it at his house, a monthly spending plan summit. Scott recommends that you set this meeting up on your calendars so that it re-occurs on the first of the month, every month of the year. He also recommends that you have “mini” summit meetings throughout the month to make sure you are staying on track to your spending plan.

Podcast Closing Words:

In closing out the podcast, Scott shares 5 things that having a spending plan has accomplished for his family.

1. Out of debt

2. He and his spouse do not fight about money

3. Allocating every dollar has enabled him to start his own business

4. Has more time with his family (result of flexibility from owning own business)

5. Give like no one else

Show Links:

Learn more about the EveryDollar budget app

Learn more about Fortress Planning Group

Podcast Disclaimer:

New Retirement and Tax Opportunities provided by the 2019 Secure Act, Ep #136

Fri, 24 Jan 2020 09:00:00 -0500

Do you want to get a jump on the new retirement and tax opportunities provided by the 2019 Secure Act? In this episode, Scott explains some of the critical features of this new act and how we can use what we learn to plan our retirement and finances better.

RETIREMENT PROVISIONS:

Elimination of the stretch provision.
Lifting the restriction on making contributions to a traditional Ira after age 70.5.
Increase the time when you need to take RMDs from 70.5 to 72.
Penalty-free $5000 out of IRA for Adoption or qualified birth.
The use of life-income options, i.e. Annuity options in the 401(k) – BE CAREFUL.
Tax credits for small businesses to set up 401(k)'s.

NON-RETIREMENT PROVISIONS

Repeal of the kiddie tax laws from TCJA.
Adjustments to the medical tax deduction. (back to 7.5% of AGI for 2019 and 2020)
Expanded provisions in 529 plans.
Series of tax extenders for mortgage insurance premium deduction.
Higher education tuition and fees deduction.

2019 Year In Review. Ep #135

Fri, 10 Jan 2020 09:00:00 -0500

Let's review the 2019 market returns and then learn from it so we can crush 2020 and beyond.

The Number 1 Reason You Won’t Reach Your Goals, Ep #134

Sat, 04 Jan 2020 10:16:00 -0500

Did you set your 2020 goals? What is your process for setting goals? In today's episode Scott is going to show you how to set and crush your 2020 goals and be the family steward you always wanted to be.

A Recession is Coming! Ep #133

Fri, 08 Nov 2019 22:19:00 -0500

A Recession is coming! Find out why a recession is coming and protect yourself with Scott's eight-point plan.

Are Value Stocks Dead? Ep #132

Fri, 25 Oct 2019 17:25:00 -0500

The theoretical support for value investing is

longstanding—paying a lower price means a higher

expected return. However, realized returns are volatile.

A 10-year negative premium, while not expected, is

not unusual.

But history also tells us that changing course after

a disappointing spell for known premiums can lead

to missed opportunities. When those drivers of

outperformance have turned around in the past,

steadfast investors have been rewarded. A key to

successful long-term investing is sticking with your

approach, even through difficult periods, so that

you are there for the good times too.

3rd Quarter 2019 Stock Market Review, Ep #131

Fri, 11 Oct 2019 14:12:00 -0500

CLICK Here to Read 3rd Quarter 2019 Stock Market Re

The ONE Thing You Need to Teach Your Adult Children! Ep #130

Fri, 27 Sep 2019 16:17:00 -0500

Do you have adult children? What do they actually know about money? There is ONE thing they need to know. Listen today and find out.

Click HERE and read the Forbes article Scott was quoted in last week: "How To Become a Millionaire In Your 30's"

A Tale of Two Decades, Ep #129

Fri, 13 Sep 2019 18:24:00 -0500

The first decade of the 21st century, and the second one that’s drawing to a close, have reinforced for investors some timeless market lessons: Returns can vary sharply from one period to another. Holding a broadly diversified portfolio can help smooth out the swings. And focusing on known drivers of higher expected returns can increase the potential for long-term success. Having a sound strategy built on those principles—and sticking to it through good times and bad—can be a rewarding investment approach.

Key Questions for the Long Term Investor Part 2, Ep #128

Fri, 16 Aug 2019 17:47:00 -0500

Episode #128

Key Questions for the Long Term Investor Part 1, Ep #127

Fri, 02 Aug 2019 19:50:00 -0500

Episode #127

2nd Quarter 2019 Stock Market Review, Ep #126

Sun, 21 Jul 2019 19:52:00 -0500

Click Here to view the 2nd Quarter 2019 Stock Market Review

You Need to Know These Things Before Retirement, Ep #125

Fri, 28 Jun 2019 16:21:00 -0500

Episode # 125

Stay in Control! Ep #124

Fri, 31 May 2019 16:38:00 -0500

Episode #124

Making the Most of Your 401(k), Ep #123

Fri, 17 May 2019 19:07:00 -0500

Do you have doubts about how your 401(k) is invested? Listen now find out how you should be allocating your 401(k) and how much you should be investing.

The NFL Draft & The Stock Market, Ep #122

Sat, 27 Apr 2019 19:31:00 -0500

Do you want to know how the NFL draft and the Stock Market are related? Listen now to find out.

Q1 2019 Stock Market Review, Ep #121

Fri, 12 Apr 2019 18:04:00 -0500

CLICK HERE to read the First Quarter 2019 Stock Market Review

Will I Run Out of Money in Retirement? Ep #120

Fri, 29 Mar 2019 15:43:00 -0500

Episode #120

119 – Beware of Investment (and diet) Fads

Fri, 22 Feb 2019 20:56:28 -0500

Investment fads are nothing new. When selecting strategies for their portfolios, investors are often tempted to seek out the latest and greatest investment opportunities. Over the years, these approaches have sought to capitalize on developments such as the perceived relative strength of particular geographic regions, technological changes in the economy, or the popularity of different natural resources. But long-term investors should be aware that letting trends influence their investment approach may be counterproductive. As Nobel laureate Eugene Fama said, “There’s one robust new idea in finance that has investment implications maybe every 10 or 15 years, but there’s a marketing idea every week.”

WHAT’S HOT BECOMES WHAT’S NOT

Looking back at some investment fads over recent decades can illustrate how often trendy investment themes come and go. In the early 1990s, attention turned to the rising “Asian Tigers” of Hong Kong, Singapore, South Korea, and Taiwan. A decade later, much was written about the emergence of the “BRIC” countries of Brazil, Russia, India, and China and their new place in global markets. Similarly, funds targeting hot industries or trends have come into and fallen out of vogue. In the 1950s, the “Nifty Fifty” were all the rage. In the 1960s, “go‑go” stocks and funds piqued investor interest. Later in the 20th century, growing belief in the emergence of a “new economy” led to the creation of funds poised to make the most of the rising importance of information technology and telecommunication services. During the 2000s, 130/30 funds, which used leverage to sell short certain stocks while going long others, became increasingly popular. In the wake of the 2008 financial crisis, “Black Swan” funds, “tail-risk-hedging” strategies, and “liquid alternatives” abounded. As investors reached for yield in a low interestrate environment in the following years, other funds sprang up that claimed to offer increased income generation, and new strategies like unconstrained bond funds proliferated. More recently, strategies focused on peer-to-peer lending, cryptocurrencies, and even cannabis cultivation and private space exploration have become more fashionable. In this environment, so-called “FAANG” stocks and concentrated exchange-traded funds with catchy ticker symbols have also garnered attention among investors.

THE FUND GRAVEYARD

Unsurprisingly, however, numerous funds across the investment landscape were launched over the years only to subsequently close and fade from investor memory. While economic, demographic, technological, and environmental trends shape the world we live in, public markets aggregate a vast amount of dispersed information and drive it into security prices. Any individual trying to outguess the market by constantly trading in and out of what’s hot is competing against the extraordinary collective wisdom of millions of buyers and sellers around the world.

With the benefit of hindsight, it is easy to point out the fortune one could have amassed by making the right call on a specific industry, region, or individual security over a specific period. While these anecdotes can be entertaining, there is a wealth of compelling evidence that highlights the futility of attempting to identify mispricing in advance and profit from it.

It is important to remember that many investing fads, and indeed, most mutual funds, do not stand the test of time. A large proportion of funds fail to survive over the longer term. Of the 1,622 fixed income mutual funds in existence at the beginning of 2004, only 55% still existed at the end of 2018. Similarly, among equity mutual funds, only 51% of the 2,786 funds available to US-based investors at the beginning of 2004 endured.

WHAT AM I REALLY GETTING?

When confronted with choices about whether to add additional types of assets or strategies to a portfolio, it may be helpful to ask the following questions:

What is this strategy claiming to provide that is not already in my portfolio?
If it is not in my portfolio, can I reasonably expect that including it or focusing on it will increase expected returns, reduce expected volatility, or help me achieve my investment goal?
Am I comfortable with the range of potential outcomes?

If investors are left with doubts after asking any of these questions, it may be wise to use caution before proceeding. Within equities, for example, a market portfolio offers the benefit of exposure to thousands of companies doing business around the world and broad diversification across industries, sectors, and countries. While there can be good reasons to deviate from a market portfolio, investors should understand the potential benefits and risks of doing so.

In addition, there is no shortage of things investors can do to help contribute to a better investment experience. Working closely with a financial advisor can help individual investors create a plan that fits their needs and risk tolerance. Pursuing a globally diversified approach; managing expenses, turnover, and taxes; and staying disciplined through market volatility can help improve investors’ chances of achieving their long-term financial goals.

CONCLUSION

Fashionable investment approaches will come and go, but investors should remember that a long-term, disciplined investment approach based on robust research and implementation may be the most reliable path to success in the global capital markets.

118 – Dave Ramsey’s Baby Steps

Fri, 01 Feb 2019 18:26:44 -0500

Dave Ramsey’s 7 Baby Steps

Save up $1,000 to start an emergency fund.
Pay off all non-mortgage debt using the debt snowball.
Save up 3 to 6 months of expenses to complete your emergency fund.
Invest 15% of household income into Roth IRAs and pre-tax retirement accounts.
Work on college funding for children.
Pay off your mortgage early.
Build wealth and give!

117 – 2018 Stock Market Review

Mon, 07 Jan 2019 17:59:40 -0500

CLICK Here to read the 2018 Annual Market Review

116 – Why is the Stock Market Freaking Out?

Fri, 07 Dec 2018 16:57:39 -0500

Why is the stock market freaking out? Is the stock market freaking out more or less than the average year? Find out the answers to these two questions and more in episode 116 of Best In Wealth.

115 – Midterm Elections: What Do They Mean for Markets?

Fri, 02 Nov 2018 17:02:18 -0500

CLICK HERE to read - Midterm Elections—What Do They Mean for Markets

It’s almost Election Day in the US once again. For those who need a brief civics refresher, every two years the full US House of Representatives and one-third of the Senate are up for reelection.

While the outcomes of the elections are uncertain, one thing we can count on is that plenty of opinions and prognostications will be floated in the days to come. In financial circles, this will almost assuredly include any potential for perceived impact on markets. But should long-term investors focus on midterm elections?

markets work

We would caution investors against making short-term changes to a long-term plan to try to profit or avoid losses from changes in the political winds. For context, it is helpful to think of markets as a powerful information-processing machine. The combined impact of millions of investors placing billions of dollars’ worth of trades each day results in market prices that incorporate the aggregate expectations of those investors. This makes outguessing market prices consistently very difficult.^[1] While surprises can and do happen in elections, the surprises don’t always lead to clear-cut outcomes for investors.

The 2016 presidential election serves as a recent example of this. There were a variety of opinions about how the election would impact markets, but many articles at the time posited that stocks would fall if Trump were elected.^[2] The day following President Trump’s win, however, the S&P 500 Index closed 1.1% higher. So even if an investor would have correctly predicted the election outcome (which was not apparent in pre-election polling), there is no guarantee that they would have predicted the correct directional move, especially given the narrative at the time.

But what about congressional elections? For the upcoming midterms, market strategists and news outlets are still likely to offer opinions on who will win and what impact it will have on markets. However, data for the stock market going back to 1926 shows that returns in months when midterm elections took place did not tend to be that different from returns in any other month.

[1]. This is known as the efficient market theory, which postulates that market prices reflect the knowledge and expectations of all investors and that any new development is instantaneously priced into a security.

[2]. Examples include: “A Trump win would sink stocks. What about Clinton?” CNN Money, 10/4/16, “What do financial markets think of the 2016 election?” Brookings Institution, 10/21/16, “What Happens to the Markets if Donald Trump Wins?” New York Times, 10/31/16.

FOR MORE CLICK ON THE ARTICLE BELOW......

CLICK HERE to read - Midterm Elections—What Do They Mean for Markets

114 – 3RD Quarter 2018 Market Summary….Plus Recent Volatility

Fri, 12 Oct 2018 18:59:04 -0500

CLICK HERE for Quarterly Market Review Q3 2018

113 – Taking Initiative in your Career Cornerstone

Fri, 28 Sep 2018 17:12:48 -0500

Do you love your job? If so, great! If you don’t like your job, then listen today and become unstuck.

112 – Mentally Preparing for Retirement

Fri, 14 Sep 2018 17:03:54 -0500

Are you mentally ready to retire? Being mentally prepared for retirement is just as important as being financial prepared. Today Scott discuss for things to think about to help you become mentally prepared for the best season of your life.

111 – HOW MUCH IS MY ANNUITY COSTING ME?

Thu, 30 Aug 2018 20:25:31 -0500

Variable annuity fees fall into the following five categories.

Mortality expenses (M&E)
This is a fee charged by the insurance company to provide you with a death benefit (often just a guarantee to pay out to your beneficiaries at least what was put in). This variable annuity fee can range from .50 – 1.5% of the policy value per year.
Administrative expenses
Many variable annuity policies have a separate administrative fee to cover the cost of mailings and ongoing service. This fee can range from .10 - .30% of the policy value per year.
Investment expense ratio
Inside a variable annuity, the underlying stock and bond investment choices, called sub-accounts, will have an investment management fee which can range from .25 – 2.00% of the value in that account per year.
Additional cost of riders
Riders are extra features on your variable annuity policy that provide you with additional guarantees or death benefits. Depending on the extent of the benefit, riders can cost .25 – 1.00% of the policy value per year.
Surrender charges
Many policies pay an upfront commission to the person who sells the policy to you. A surrender charge is put on the variable annuity policy so that if you cancel the policy early, the insurance company can thus recoup the commission they had to pay out.

110 – To Roth or NOT to Roth

Fri, 17 Aug 2018 18:13:37 -0500

Tune in today to see if it is in your best interest to start investing or converting your tax-deferred money into your Roth IRA or Roth 401(k).

109 – The Family Stewardship Approach to Investing (part 2)

Fri, 03 Aug 2018 15:19:56 -0500

108 – 2nd Quarter 2018 Market Update

Sat, 21 Jul 2018 19:04:31 -0500

CLICK HERE for Quarterly Market Review Q2 2018

107 – The Family Stewardship Approach to Investing (part 1)

Fri, 06 Jul 2018 23:31:38 -0500

We have discussed the importance of formulating an investment strategy that is informed by financial science. But a solid market philosophy and strong research are not enough. Good ideas are not enough. An investment manager must put those ideas to work each day in a competitive market.

This requires an approach that dynamically integrates the research with portfolio structure and implementation. This is where science meets investing.

We apply a different investment approach. It is informed by financial science and the view that market prices reflect all available information. We also believe that different securities can have different expected returns.

Guided by this perspective, this approach looks to academic research to gain insight into the dimensions that drive those expected returns, then integrates this knowledge into strategies designed and implemented to add value in competitive markets.

106 – The Pros (and cons) of Index Investing

Fri, 22 Jun 2018 21:10:51 -0500

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Indexing offers a number of investment benefits over a conventional approach. Broad-based indexes offer better diversification, have lower fees, and follow a more transparent investment process, which means investors have a clearer idea of what they are getting.

The problem with indexing is that the commercial index provider determines the stocks or bonds held in the portfolio. The firm publishes a list—usually annually or semi-annually—containing all the stocks composing that index, or benchmark. The manager attempts to closely track the benchmark. But rigid construction works against the strategy.

Most index fund managers are judged by their ability to closely track their respective index. The main problems with this approach are loss of control, trading disadvantage, and style drift.

Listen to the podcast for the rest of the story!

105 – The Results of Conventional Investing

Fri, 15 Jun 2018 19:59:43 -0500

CLICK HERE to view "The Results of Conventional Investing"

Mutual fund research shows that conventional investing has low odds of success.

Over the 15-year period ending in 2017, only 14% of stock managers and 13% of bond managers survived and outperformed their benchmarks. Said another way, 86% of stock managers and 87% of the bond managers who started the 15-year period underperformed their market index. About half of the stock and bond managers did not even survive the 15-year period.

Some investors try to improve these odds by picking managers who have outperformed in the past. There’s a significant amount of research into the persistence of manager performance. It shows that among managers that outperformed in the past, only a small fraction continued to beat their market benchmark in the future.

Should we be surprised by this poor record of performance? Not really. This makes sense if market prices are the best estimates of actual value.

Manager underperformance is not necessarily due to a lack of knowledge or expertise. In fact, many professional investment managers are very bright, educated, and hard working. The problem is that this high level of expertise and motivation results in intense market competition, which drives prices to fair value.

With the advent of computing power and data availability, academic research has documented the poor outcome of most conventional managers. This is one reason for the rise in the popularity of another investment approach—indexing.

The Search for Persistence

Some investors may resort to using track records as a guide to selecting funds, reasoning that a manager’s past success is likely to continue in the future.

Does this assumption pay off? The research offers evidence to the contrary.

The exhibit shows that among funds ranked in the top quartile (25%) based on previous three-year returns, a minority also ranked in the top quartile of returns over the following three-year period. This lack of persistence casts further doubt on the ability of managers to consistently gain an informational advantage on the market.

For example, in 2017, only 29% of equity funds were ranked in the top quartile of performance in their category in both the previous period (2012–2014) and subsequent period (2015–2017). Over the 12 years through 2017, top-quartile persistence of three-year performers averaged 26% for equity funds.

Some fund managers might be better than others, but track records alone may not provide enough insight to identify management skill. Stock and bond returns contain a lot of noise, and impressive track records may result from good luck. The assumption that strong past performance will continue often proves faulty, potentially leaving many investors disappointed.

CLICK HERE to view "The Results of Conventional Investing"

104 – What is Conventional Investing?

Fri, 08 Jun 2018 15:51:08 -0500

THE FOUR TYPES OF CONVENTIONAL INVESTING

PREDICT THE FUTURE

The most common approach is based on prediction and forecasting. Methods include:

Picking stocks expected to perform well in the future,
Moving in and out of industry sectors, or
Attempting to time the market

These methods are based on trying to predict the future direction of the economy, the stock market, or an individual stock. This conventional approach assumes that someone has a crystal ball.

Many people think this is the key to successful investing. In fact, when people meet financial advisors or others in the investment business, their first question is typically, “where do you think the market is going?” They are basically asking that person to make a prediction. Yet, no one can know the future—and if an investment person could predict the market’s future direction, why would he share that knowledge for free?

A prediction about an uncertain future is just an opinion, and it should not determine anyone’s investment decision. Many people learn this the hard way.

ACT ON IMPULSE

Some people approach investing from an emotional perspective. They act impulsively—and their reaction is typically sparked by fear or greed.

Some may get anxious about the stock market and decide to get out. This may ease their fear, but it may be replaced by the anxiety of missing out on a market recovery. Investors who flee the market ultimately have to decide when to get back in.

The 2008–09 global market downturn offers an example of how the cycle of fear and greed can drive an investor’s decisions. Some investors fled the market in early 2009, just before the rebound began. They locked in their losses and then experienced the stress of watching the markets climb.

The other side of the emotional coin is greed. Investors can get anxious about missing out on what they perceive as a great investment. They may follow the crowd.

The idea behind investing is to buy low and sell high. Yet, following an emotional investment cycle sparked by impulsive decisions may bring an opposite effect: buying at high prices and selling at lower prices.

TIPS AND HUNCHES

Other people approach investing from a “get rich quick” perspective and act on tips or hunches. They may seek out investment insight from cable news programs that feature Wall Street experts who appear to know something valuable, or from other sources.

There’s also a social element to predictive investing. People like to talk about their winning investments, but they probably don’t mention the losers. People often follow the advice of friends, neighbors, or family—especially if the “insight” offers potential to make a fast, easy return. Most of this advice is just noise.

We all know deep down that there’s no shortcut to growing wealth. So why do people keep investing this way? In some cases, it is all they know.

LISTEN TO THE MEDIA

The financial and popular media define what investing is for many people. Whether the message is crafted by a financial publication, a website, or a cable program, it often targets human emotion.

Consider the messages in these sample headlines from major publications. Some prey on an investor’s fear and anxiety about the future, while others suggest you can tap into special knowledge to gain quick, easy wealth.

Investors who are tempted to act on these media messages should remember the media is selling entertainment, not real financial advice.

103 – How Do I Access the Power of the Stock Market

Sat, 02 Jun 2018 19:47:49 -0500

The first step to access the power of the maket is to retrain your thinking. In this episode Scott explains in detail the one thing you need before accessing the power of the stock market.

102 – Diversify Like a Family Steward

Fri, 25 May 2018 17:19:35 -0500

Do you know what the four levels of family steward diversification are? Do you know if you are diversified like a family steward. CLICK HERE to view The Case for Global Diversification

101 – Investing Perspective

Sun, 20 May 2018 12:09:16 -0500

Do you want to have a successful investment experience? It all starts with investing perspective. Click below and download the chart and listen to episode 101 for stock market perspective.

Click Here for a chart about stock market Perspective

100 – Should I buy Bitcoin?

Sun, 21 Jan 2018 15:02:05 -0500

To Bit or Not to Bit: What Should Investors Make of Bitcoin Mania?

December 2017

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios.

Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional money, no paper notes or metal coins are involved. No central bank issues the currency, and no regulator or nation state stands behind it.

Instead, cryptocurrencies are a form of code made by computers and stored in a digital wallet. In the case of bitcoin, there is a finite supply of 21 million,^[1] of which more than 16 million are in circulation.^[2] Transactions are recorded on a public ledger called blockchain.

People can earn bitcoins in several ways, including buying them using traditional fiat currencies^[3] or by “mining” them—receiving newly created bitcoins for the service of using powerful computers to compile recent transactions into new blocks of the transaction chain through solving a highly complex mathematical puzzle.

For much of the past decade, cryptocurrencies were the preserve of digital enthusiasts and people who believe the age of fiat currencies is coming to an end. This niche appeal is reflected in their market value. For example, at a market value of $16,000 per bitcoin,^[4] the total value of bitcoin in circulation is less than one tenth of 1% of the aggregate value of global stocks and bonds. Despite this, the sharp rise in the market value of bitcoins over the past weeks and months have contributed to intense media attention.

What are investors to make of all this media attention? What place, if any, should bitcoin play in a diversified portfolio? Recently, the value of bitcoin has risen sharply, but that is the past. What about its future value?

You can approach these questions in several ways. A good place to begin is by examining the roles that stocks, bonds, and cash play in your portfolio.

EXPECTED RETURNS

Companies often seek external sources of capital to finance projects they believe will generate profits in the future. When a company issues stock, it offers investors a residual claim on its future profits. When a company issues a bond, it offers investors a promised stream of future cash flows, including the repayment of principal when the bond matures. The price of a stock or bond reflects the return investors demand to exchange their cash today for an uncertain but greater amount of expected cash in the future. One important role these securities play in a portfolio is to provide positive expected returns by allowing investors to share in the future profits earned by corporations globally. By investing in stocks and bonds today, you expect to grow your wealth and enable greater consumption tomorrow.

Government bonds often provide a more certain repayment of promised cash flows than corporate bonds. Thus, besides the potential for providing positive expected returns, another reason to hold government bonds is to reduce the uncertainty of future wealth. And inflation-linked government bonds reduce the uncertainty of future inflation-adjusted wealth.

Holding cash does not provide an expected stream of future cash flow. One US dollar in your wallet today does not entitle you to more dollars in the future. The same logic applies to holding other fiat currencies — and holding bitcoins in a digital wallet. So we should not expect a positive return from holding cash in one or more currencies unless we can predict when one currency will appreciate or depreciate relative to others.

The academic literature overwhelmingly suggests that short-term currency movements are unpredictable, implying there is no reliable and systematic way to earn a positive return just by holding cash, regardless of its currency. So why should investors hold cash in one or more currencies? One reason is because it provides a store of value that can be used to manage near-term known expenditures in those currencies.

With this framework in mind, it might be argued that holding bitcoins is like holding cash; it can be used to pay for some goods and services. However, most goods and services are not priced in bitcoins.

A lot of volatility has occurred in the exchange rates between bitcoins and traditional currencies. That volatility implies uncertainty, even in the near term, in the amount of future goods and services your bitcoins can purchase. This uncertainty, combined with possibly high transaction costs to convert bitcoins into usable currency, suggests that the cryptocurrency currently falls short as a store of value to manage near-term known expenses. Of course, that may change in the future if it becomes common practice to pay for all goods and services using bitcoins.

If bitcoin is not currently practical as a substitute for cash, should we expect its value to appreciate?

SUPPLY AND DEMAND

The price of a bitcoin is tied to supply and demand. Although the supply of bitcoins is slowly rising, it may reach an upper limit, which might imply limited future supply. The future supply of cryptocurrencies, however, may be very flexible as new types are developed and innovation in technology makes many cryptocurrencies close substitutes for one another, implying the quantity of future supply might be unlimited.

Regarding future demand for bitcoins, there is a non‑zero probability^[5] that nothing will come of it (no future demand) and a non-zero probability that it will be widely adopted (high future demand).

Future regulation adds to this uncertainty. While recent media attention has ensured bitcoin is more widely discussed today than in years past, it is still largely unused by most financial institutions. It has also been the subject of scrutiny by regulators. For example, in a note to investors in 2014, the US Securities and Exchange Commission warned that any new investment appearing to be exciting and cutting-edge has the potential to give rise to fraud and false “guarantees” of high investment returns.^[6] Other entities around the world have issued similar warnings. It is unclear what impact future laws and regulations may have on bitcoin’s future supply and demand (or even its existence). This uncertainty is common with young investments.

All of these factors suggest that future supply and demand are highly uncertain. But the probabilities of high or low future supply or demand are an input in the price of bitcoins today. That price is fair, in that investors willingly transact at that price. One investor does not have an unfair advantage over another in determining if the true probability of future demand will be different from what is reflected in bitcoin’s price today.

WHAT TO EXPECT

So, should we expect the value of bitcoins to appreciate? Maybe. But just as with traditional currencies, there is no reliable way to predict by how much and when that appreciation will occur. We know, however, that we should not expect to receive more bitcoins in the future just by holding one bitcoin today. They don’t entitle holders to an expected stream of future bitcoins, and they don’t entitle the holder to a residual claim on the future profits of global corporations.

None of this is to deny the exciting potential of the underlying blockchain technology that enables the trading of bitcoins. It is an open, distributed ledger that can record transactions efficiently and in a verifiable and permanent way, which has significant implications for banking and other industries, although these effects may take some years to emerge.

When it comes to designing a portfolio, a good place to begin is with one’s goals. This approach, combined with an understanding of the characteristics of each eligible security type, provides a good framework to decide which securities deserve a place in a portfolio. For the securities that make the cut, their weight in the total market of all investable securities provides a baseline for deciding how much of a portfolio should be allocated to that security.

Unlike stocks or corporate bonds, it is not clear that bitcoins offer investors positive expected returns. Unlike government bonds, they don’t provide clarity about future wealth. And, unlike holding cash in fiat currencies, they don’t provide the means to plan for a wide range of near-term known expenditures. Because bitcoin does not help achieve these investment goals, we believe that it does not warrant a place in a portfolio designed to meet one or more of such goals.

If, however, one has a goal not contemplated herein, and you believe bitcoin is well suited to meet that goal, keep in mind the final piece of our asset allocation framework: What percentage of all eligible investments do the value of all bitcoins represent? When compared to global stocks, bonds, and traditional currency, their market value is tiny. So, if for some reason an investor decides bitcoins are a good investment, we believe their weight in a well-diversified portfolio should generally be tiny.^[7]

[1]. Source: Bitcoin.org.

[2]. As of December 14, 2017. Source: Coinmarketcap.com.

[3]. A currency declared by a government to be legal tender.

[4]. Per Bloomberg, the end-of-day market value of a bitcoin exceeded $16,000 USD for the first time on December 7, 2017.

[5]. Describes an outcome that is possible (or not impossible) to occur.

[6]. “Investor Alert: Bitcoin and Other Virtual Currency-Related Investments,” SEC, 7 May 2014.

[7]. Investors should discuss the risks and other attributes of any security or currency with their advisor prior to making any investment.

099 – 2017 Market Review

Tue, 09 Jan 2018 19:06:47 -0500

Tune in today for Scott's 2017 market review.

Click here for Q4 & 2017 Yearly Market Review

098 – Catchphrase Investing

Fri, 15 Dec 2017 17:17:29 -0500

The financial media is drawn to catchphrases, acronyms, and buzzwords that can be sold as the new thing. FAANG (Facebook, Apple, Amazon, Netflix, and Google) is the latest of these. But does this constitute an investment strategy? For journalists, commentators, and marketers, acronyms like FAANG...

097 – Nine Key Questions for the Long-Term Investor…..and Being Thankful YOU Know the Answer

Fri, 24 Nov 2017 20:50:07 -0500

There are nine key questions every long-term investor should know. I bet most listeners know the answer to some or most of them. But the really confident investor knows the answer to all nine questions.

096 – 3 Ways to MAKE Your Money Goal

Fri, 10 Nov 2017 15:15:37 -0500

Do you stuggle with money goals? Do want to be finacially fit? Let me help you achieve your money goal with these three steps.

095 – HELP! Is My 401(k) Going to Tank?

Fri, 27 Oct 2017 19:45:27 -0500

Today I talk about the three ways to protect your 401(k) during the next market downturn. Want to know your risk number? Do you wonder if your risk number matches the risk number of your 401(k) or IRA? Send an email to scott@bestinwealth.com and ask to take the online risk number assessment. This simple step is Fun, FREE and may just save your financial life.

094 – 3rd Quarter 2017 Stock Market Review

Fri, 13 Oct 2017 14:40:54 -0500

Today we go over the 3rd Quarter 2017 Market Review.

CLICK HERE FOR THE - Quarterly Market Review Q3 2017

093 – Risk defined

Fri, 06 Oct 2017 01:01:15 -0500

This is part 9 of a 10 part series about behavioral finance.

092 – Diversification Means having to Say Your Sorry

Fri, 22 Sep 2017 17:32:21 -0500

This is part 8 of a 10 part series about behavioral finance.

091 – Excess Is Never Permanent

Fri, 08 Sep 2017 16:15:40 -0500

This is part 7 of a 10 part series about behavioral finance.

090 – Forecasting is for Weathermen

Fri, 25 Aug 2017 20:43:20 -0500

This is part 6 of a 10 part series about behavioral finance.

089 – Your Life is the Best Benchmark

Fri, 11 Aug 2017 21:09:19 -0500

This is part 5 of a 10 part series about behavioral finance.

088 – You Are Not That Special

Fri, 28 Jul 2017 19:29:09 -0500

This is part 4 of a 10 part series about behavioral finance.

[00:00:00] But before we get started, I want to let you know something that went down last week.

[00:00:06] My dad and I attended the Donald Driver Hall of Fame induction ceremony and for those of you who don't know, I'm from Wisconsin. I have a deep love for the Green Bay Packers. Do not hold that against me. Donald Driver was a great wide receiver and he was being inducted into the Hall of Fame. The Packers have this big party to celebrate. Tickets are very expensive. You get a nice steak dinner. You get some wine, and appetizers. Even some things to take home with you. And the reason we went is my wife got us tickets for Father's Day. She had a real hard time getting the tickets. To be honest with you when she got those tickets I was thinking of myself it a lot of money. Do we really need to be spending this kind of money for my dad and I to attend this Donald Driver thing? And then we went in it was well worth it. Let me ask you - Are you building abundance in your cornerstones. Do you even know what your cornerstones are the most important things in your life like your family your friends your health maybe your career your experiences your spirituality and your finances?

[00:01:30] If you can identify what they are early and plan to build abundance in these cornerstones, you will end your life with zero regrets. Is it difficult to sit back and think of what your cornerstones are? No. I think you can do that. It's making a deliberate plan to add abundance in them on a consistent basis. That's the hard part. We build abundance without even thinking about it just by going about our day to day activities. But what if you were deliberate about it. What if what if you set a plan in all the things that you were going to accomplish within each cornerstone. Would you be working at the same job as you are right now or would you be taking actionable steps to get to your dream job. Would you simply be an okay dad or are you going to be a dad that is present in your kids’ lives. What are your cornerstones?

[00:02:42] Are you building abundance in your cornerstones. I'm guilty of it myself and I really need to thank my wife for being deliberate in setting up this experience with my dad. When I think about it my dad and I haven't done that many things together.

[00:03:03] We spend a lot of time together but not always just this one on one time. It was one of the best experiences of my life because I was standing right next to my dad. That my friends is real wealth.

[00:03:20] Let's get to the topic of the day. You are not that special.

[00:03:34] Now what I mean by that because you know what we're all special people. But when it comes to behavioral finance my friend you are not that special. I'm not that special either. So, this series we're on behavioral finance based on Dr. Daniels book The Laws of wealth and this is one of the laws. Dr. Daniel starts out with a quote in his book and his quote was from Chuck from the fight club He states, "you are not special. You are not a beautiful or unique snowflake. You're the same decaying organic matter as everything else." Well, I'm starting off on the right foot trying to get people to listen to this podcast. But let me ask you a question. Do you think that you're a better than average driver? Be honest because 90 percent of drivers believe they are better than the average driver. However, this is impossible.

[00:04:43] Fifty percent are better and 50 percent are worse. Ninety percent of people can't be better than the average driver although 90 percent of us think that we are. There's names for this kind of thinking too; illusionary superiority. That's one of them. Another one is the better than average affect. It's not only driving. We think that we're more honest than the average person. We think we're more persistent, and we think we're more original than the average person. It's just impossible because only half of us can be better than average.

[00:05:23] The same is true in investing. You may not say it out loud but a lot of us think this way. If you don't know the rules of good investing and you rely on your own intuition about a stock or your risk level or where the market is headed you set yourself out as someone who is above average: someone who's better than the rules to follow. You have this feeling that this stock or sector is going to do better or country. I work for this specific company so I know the stock is going up because I have the inside scoop. Why do you think people think that they're above average in driving? Or more honest? Or are better and faster because the average is linked to something negative, not positive. People just don't want to be average. They want to be above average. It doesn't sound good. But as I learn from this book when it comes to investing investors who own their own mediocrity can rely on rules and systems and they do what works. The do what the research tells them they build a plan around it Ultimately, they’re able to reap rewards. But the opposite - those who believe they are better than average - they go down a completely different road because they don't want to be average. They want to beat the market or they want to get to financial freedom sooner than the guy next to them using risky speculation. They insist on flaunting the rules in favor of their own ideas and pay a steep price for their ignorance. This isn't just an inexperienced investor.

[00:07:25] This is somebody who went to college and then off to Wall Street. You know I'm a prideful person. I always have been. It's something I'm working on. My wife reminds me of this all the time and I suffer many times from something called overconfidence bias. I like to inflate my successes and deflate my failures. I do it with my business. If you listen to this podcast for a long time you know that I started Fortress Planning Group because it was my passion. And I let everybody know it. So, when people see me they ask how business is going. I always say great. My job is awesome - I made the right decision, I say. I do believe I made the right decision. But it's not always great. I still have bad days. There's parts of my job that I don't like. I have failures. There are prospective clients that come to me and decide not to hire me as their financial adviser. That happens but I enjoy telling people when new clients come aboard. I don't enjoy and I don't even bring up when new clients or prospective clients reject me. In the medical world, this is called fundamental attribution error. Thank goodness, I'm not alone or I would have a big ole complex. In the paper "In Search of Excellence" 100 percent of the men in the study thought they were better than average interpersonally and ninety four percent of all the people said they were better than the average person at athletics.

[00:09:24] James Monnier said Ninety five percent of people in his study think that they have a better than average sense of humor. Impossible - but I am of that 95 percent because I think I'm a pretty funny guy and I'm probably not. I'm probably in the bottom 50 percent. Dr. Daniel talks to about the worldwide mathematical proficiency in the US and the US is in the middle of the pack for mathematical proficiency. Ask and US citizens and they will say we lead the pack.

[00:10:03] The combination of mathematical mediocrity and overconfidence may just be what is wrong with Wall Street today. Trying to time the market or trying to find that next hot stock or getting over risky with your clients.

[00:10:21] All the mathematics in the world is not going to help you time the Market. I had a dog Frankie (my in-laws have Frankie right now). When Frankie was a puppy and even now w he's a little bit crazy. Even some of your dogs - when you're walking them in the morning and they're going this way and that way trying to smell every smell.

[00:10:47] You don't know what their next move is because are bob and weave and in and out and back and forth. You can't predict the next movement of your puppy. You never know what the dog is going to do next. That my friends is like trying to time the market. We do not know where the market is headed tomorrow.

[00:11:07] It's impossible to time the market because there is no (I repeat no) system or formula to help you do this. But both novice and professional investors try and do this all the time. We try to time when the U.S. is doing better or international or emerging or value or small or growth or large. The overconfidence makes us believe in their guess and they try to get you to believe, too. Every occasionally, we make a good decision and that good decision is what we own. This is what we talk about. This is what we remember. But that bad money decision or that bad market timing or that buying something we never should have bought - those failures we completely suppress in the end we think that we're a better than the average person with our money. We remember the success and forget our failures and it leads us to think that we're better than average with our money and with our investing. When your portfolio is up we credit ourselves. When stocks are down we blame something external. Jeremy Grantham was asked what people learned about the Great Recession and he responded, "In the short term. People learned a lot - in the medium term very little - and in the long term nothing at all."

[00:12:54] In the book Dr. Daniel says arrogance is the enemy of the very self-reflection that saves us from ourselves and allows us to learn from history. This happens in my business all the time. I work hard to try and determine a client's risk level both from a risk questionnaire but mostly from our conversations and past actions. When times are good clients wonder why we aren’t in more stocks -forgetting about the past. Forgetting that we're building portfolios for the long term not knowing in the short term what might happen. We are building Portfolios for financial freedom and in retirement and need to be built for a lifetime. Then the opposite happens. They're happy when the downside comes and they aren't fully risked up into the market because we're going to go through another recession. And then they're happy, but only for a short period of time because people start wondering we now aren't more in in bonds and in cash. They wonder why I had them in this much of a stock portfolio. Hey, it's as simple as admitting that you are not an above average person. It's the best thing you can do for your money is long term future. The one that admits he is not above average puts themselves in a place for the best chance of success.

087 – 2nd Quarter 2017 Stock Market Review

Sat, 22 Jul 2017 13:02:56 -0500

CLICK HERE TO READ THE Q2 2017 Stock Market Review

086 – If You’re Excited, it’s a Bad Idea

Fri, 14 Jul 2017 07:00:26 -0500

This is part 3 of a 10 part series about behavioral finance.

085 – Trouble is Opportunity

Sat, 08 Jul 2017 14:58:04 -0500

This is part 2 of a 10 part series about behavioral finance.

084 – You Control What Matters Most

Fri, 30 Jun 2017 19:32:09 -0500

This is the start of a 10 part season on behavioral finance. Do not miss the kickoff episode and take the first step in shrinking the behavior gap to increase your investment returns.

083 – 7 Steps to Financial Peace

Fri, 23 Jun 2017 21:29:58 -0500

Do you have debt? If so, are following the steps from the authority on getting out of debt - Dave Ramsey. Today we discuss these steps within the context of a listener's situation.

082 – Quantifying the Value of Financial Planning Advice

Fri, 09 Jun 2017 17:23:53 -0500

What is the true value of financial planning advice? When I buy a new coat or car, I can touch and feel my new purchase. I can visualize exactly what my investment is. We can't touch or feel financial planning advice. Today we will attempt to quantify the value of financial planning advice.

081 – Are You Hands-On or Hands-Off when it comes to investing?

Fri, 02 Jun 2017 17:34:23 -0500

The first step to investing is figuring out your investor personality. Tune in today and read the article below to determine if you are a hands-on or hands-off investor.

Are You a Hands-On or Hands-Off Investor?

How to Determine the Best Approach to Investing for Retirement

article by Scott Spann

Choosing your investment options in a 401(k) or IRA can be a challenge. This is because we do not all possess the investing knowledge and confidence to make an informed decision and the investing process itself can be emotional and test our own resolve during good and bad times.

Contributing to retirement accounts is an important step but isn’t the only step of the retirement planning process. Saving for retirement may not be enough if you aren’t investing in the right types of investments based on your goals and time horizon.

An appropriate level of desired growth and income is needed and every single investor needs a basic investment plan. If you don’t have an investment plan in place you may be hurting your chances of reaching important life goals such as retirement.

Begin By Reviewing Your Investor Personality

Successful investment planning starts with a basic understanding of yourself. This self-awareness includes knowing how you like to make decisions, whether you like advice or you like to do-it-yourself, and what you will most likely do when the going gets rough and your investments face obstacles such as a market downturn. An important first step when investing for retirement is to understand your risk tolerance, which is essentially an assessment of how comfortable you are with an aggressive, moderate, or conservative approach to investing.

To put your desired asset allocation plan into action, you must ask yourself a simple question — how involved you want to be in the day to day management of your investment portfolio?

Do you prefer more of a “hands-on” or a “hands off” approach to investing?

Hands-On Investing

Hands-on investors usually prefer being more actively involved in the process of designing an investment portfolio for retirement. Other preferences usually include setting target allocation weights for different asset classes (stocks, bonds, cash, real assets, etc.).

Other common activities that hands-on investors should be focusing on include regular monitoring and re-balancing of their investment portfolio. For example, hands-on investors may have a preference toward investing in individual stocks or actively managed mutual funds or setting up their own asset allocation (mix of investment types) of passive investments such as index mutual funds.

Hands-On Investor Checklist

Regularly monitor and review account performance
Complete a routine fee-analysis
Have confidence in your own ability to make important investment decisions
Prefer customizing investment allocations
Regularly research the details of individuals stocks, mutual funds, ETFs, or other investments.
Desire creating a portfolio that is tax-efficient
Rebalancing investments on a routine basis

There are many options for do-it-yourself investors, including self-directed retirement accounts, discount brokerage firms, and low-fee financial services firms where you can invest on your own with or without an advisor.

Hands-Off Investors

Hands-off investors are typically looking for a simple investment solution. Think about it as a preference for one-stop-shopping. As a result, hands-off investors are more likely to seek out pre-mixed asset allocation portfolios.

Popular examples of investments that fit this category include target date retirement funds, asset allocation funds, professionally managed porfolios, or use of an online investment platform or so-called “robo-advisor”. These more hands-off investment alternatives rely on professional guidance to set the investment portfolio strategy and automatically re-balance. This approach tends to be a good suit for people who prefer a more "set it and forget it" approach to managing an investment portfolio and who only plan to make just a few minor changes over the course of time. Passively managed index mutual funds or target date retirement funds are popular investment options for hands-off investors because they do not require regular monitoring.

Hands-Off Investor Checklist

Do not typically check your account on a regular basis

Lack confidence in your ability to choose your own investments
Prefer a pre-mixed portfolio or a set it and monitor approach
Generally unfamiliar with the structure of individuals stocks, mutual funds, ETFs, or other investments.
Rarely make asset allocation updates or changes
Do not rebalance your account on a regular basis
Not concerned about tax-efficiency

For the hands-off investor, consider using a low-cost, passive investment strategy that focuses on asset allocation (or how you divide your account across asset classes like stocks, bonds, real assets, and cash). This will usually work better than just trying to pick the top performers from previous years or dividing your contributions across each one of your investment options in a 401(k) plan. Another hands-off approach to help find a diversified portfolio that also provides professional guidance is to select an asset allocation mutual fund that fits your risk tolerance. The downside of this static approach is that your risk tolerance may change as goals such as retirement near and you may need to adjust your investments gradually over time. As an alternative, a target date retirement fund provides a glide-path approach to investing that automatically adjusts to become more conservatively invested as you approach retirement.

080 – 6 Steps to Buying a New Car

Fri, 26 May 2017 17:21:31 -0500

Is buying a new car a fun experience? Most people do not enjoy the process, and they rarely leave the dealership thinking they got a good deal. Follow the 6 steps in today's podcast, and you will not only enjoy the experience, but you will also get you BEST DEAL possible on your next new car purchase!

079 – This is Why You Should Never Retire

Thu, 18 May 2017 15:51:10 -0500

Do you have the ability to do the things that make you happy and not what makes you money? If so, it's time to start doing the things that make us happy. Tune in today to see if you are ready!

078 – The Stock Market Hates Uncertainty

Fri, 05 May 2017 18:40:28 -0500

“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon. Rather than ebbing and flowing with investor sentiment, uncertainty is an inherent and ever-present part of investing in markets. Any investment that has an expected return above the prevailing “risk-free rate” (think T-Bills for US investors) involves trading off certainty for a potentially increased return.

Consider this concept through the lens of stock vs. bond investments. Stocks have higher expected returns than bonds largely because there is more uncertainty about the future state of the world for equity investors than bond investors. Bonds, for the most part, have fixed coupon payments and a maturity date at which principal is expected to be repaid. Stocks have neither. Bonds also sit higher in a company’s capital structure. In the event a firm goes bust, bondholders get paid before stockholders. So, do investors avoid stocks in favor of bonds as a result of this increased uncertainty? Quite the contrary, many investors end up allocating capital to stocks due to their higher expected return. In the end, many investors are often willing to make the tradeoff of bearing some increased uncertainty for potentially higher returns.

MANAGING EMOTIONS

While the statement “the market hates uncertainty” may not be totally logical, it doesn’t mean it lacks educational value. Thinking about what the statement is expressing allows us to gain insight into the mindset of individuals. The statement attempts to personify the market by ascribing the very real nervousness and fear felt by some investors when volatility increases. It is recognition of the fact that when markets go up and down, many investors struggle to separate their emotions from their investments. It ultimately tells us that for many an investor, regardless of whether markets are reaching new highs or declining, changes in market prices can be a source of anxiety. During these periods, it may not feel like a good time to invest. Only with the benefit of hindsight do we feel as if we know whether any time period was a good one to be invested. Unfortunately, while the past may be prologue, the future will forever remain uncertain.

STAYING IN YOUR SEAT

In a recent interview, David Booth was asked about what it means to be a long-term investor:

“People often ask the question, ‘How long do I have to wait for an investment strategy to pay off? How long do I have to wait so I’m confident that stocks will have a higher return than money market funds, or have a positive return?’ And my answer is it’s at least one year longer than you’re willing to give. There is no magic number. Risk is always there.”

Part of being able to stay unemotional during periods when it feels like uncertainty has increased is having an appropriate asset allocation that is in line with an investor’s willingness and ability to bear risk. It also helps to remember that, during what feels like good times and bad, one wouldn’t expect to earn a higher return without taking on some form of risk. While a decline in markets may not feel good, having a portfolio you are comfortable with, understanding that uncertainty is part of investing, and sticking to a plan that is agreed upon in advance and reviewed on a regular basis can help keep investors from reacting emotionally. This may ultimately lead to a better investment experience.

077 – 5 Things that Stress You Out the Most About Money

Fri, 21 Apr 2017 20:20:30 -0500

Seventy percent of people indicate that the number one cause of stress in life is money. in today's episode, Scott outlines five things that stress people out the most about money.....and what you need to about it.

076 – 3 Questions You Must Ask Yourself

Fri, 14 Apr 2017 21:01:32 -0500

It is tough for most people to dig deep to see what they want to get out of life. What do you want to do? What do you want to accomplish? How do you want to be remembered? What relationships are most important to you. Join Scott in today's episode as he asks the three most important questions you must ask yourself that will help uncover what you most important cornerstones are in life.

075 – 1st Quarter 2017 Stock Market Review

Fri, 07 Apr 2017 16:09:43 -0500

CLICK HERE to get Q1 2017 Stock Market Review

074 – 8 Reasons You Won’t Plan For Your Future

Fri, 24 Mar 2017 15:51:18 -0500

Most people spend more time planning a family vacation than planning for retirement. Today I will give you the top 8 reasons you won't plan for retirement. I will also explain why it is never too late and why you should start planning now. It's your life, plan it well!

073 – Goals Based Financial Planning

Fri, 17 Mar 2017 17:31:19 -0500

There are two philosophies when it comes to financial planning - cash flow based financial planning and goals-based financial planning. At Best In Wealth, we like the goals-based financial planning. Listen today and learn about both philosophies and why Scott things goals based is the better route and start your path to financial freedom today.

072 – Investment Shock Absorbers

Fri, 10 Mar 2017 15:37:35 -0500

Ever ridden in a car with worn-out shock absorbers? Every bump is jarring, every corner stomach-churning, and every red light an excuse to assume the brace position. Owning an undiversified portfolio can trigger similar reactions.

In a motor vehicle, the suspension system keeps the tires in contact with the road and provides a smooth ride for passengers by offsetting the forces of gravity, propulsion, and inertia. You can drive a car with a broken suspension system, but it will be an extremely uncomfortable ride and the vehicle will be much harder to control, particularly in difficult conditions. Throw in the risk of a breakdown or running off the road altogether and there’s a real chance you may not reach your destination. In the world of investment, a similarly bumpy and unpredictable ride can await those with concentrated and undiversified portfolios or those who constantly tinker with their allocation based on a short-term rough patch in the markets.

Of course, everyone feels in control when the surface is straight and smooth, but it’s harder to stay on the road during sudden turns and ups and downs in the market. And keep in mind the fix for your portfolio breaking down is unlikely to be as simple as calling a tow truck. For that reason, the smart thing to do is to diversify, spreading your portfolio across different securities, sectors, and countries. That also means identifying the right mix of investments (e.g., stocks, bonds, real estate) that aligns with your risk tolerance, which helps keep you on track toward your goals. Using this approach, your returns from year to year may not match the top performing portfolio, but neither are they likely to match the worst. More importantly, this is a ride you are likelier to stick with.

Just as drivers of suspensionless cars change their route to avoid potholes, people with concentrated portfolios may resort to market timing and constant trading as they try to anticipate the top-performing countries, asset classes, and securities. Here’s an example to show how tough this is. Among developed markets, Denmark was number one in US dollar terms in 2015 with a return of more than 23%. But a big bet on that country the following year would have backfired, as Denmark slid to bottom of the table with a loss of nearly 16%.1 It’s true that the US stock market (by far the world’s biggest) has been a strong performer in recent years, holding the number three position among developed markets in 2011 and 2013, first in 2014, and sixth in 2016. But a decade before, in 2004 and 2006, it was the second worst-performing developed market in the world.1 Predicting which part of a market will do best over a given period is also tough. For example, while there is ample evidence to support why we should expect positive premiums from small cap, low relative price, and high profitability stocks, these premiums are not laid out evenly or predictably across the map. US small cap stocks were among the top performers in 2016 with a return of more than 21%. A year before, their results looked relatively disappointing with a loss of more than 4%. International small cap stocks had their turn in the sun in 2015, topping the performance tables with a return of just below 6%. But the year before that, they were the second worst with a loss of 5%.2 If you’ve ever taken a long road trip, you’ll know that conditions along the way can change quickly and unpredictably, which is why you need a vehicle that’s ready for the worst roads as well as the best. While diversification can never completely eliminate the impact of bumps along your particular investment road, it does help reduce the potential outsized impact that any individual investment can have on your journey. With sufficient diversification, the jarring effects of performance extremes level out. That, in turn, helps you stay in your chosen lane and on the road to your investment destination. Happy motoring and happy investing.

By: Jim Parker - VP Dimensional Fund Investors

071 – The Dynamic Index Fund Approach

Fri, 03 Mar 2017 17:38:05 -0500

The family stewardship to investing starts with the dynamic index fund approach to investing. Listen today if you are a family steward.

070 – The Index Fund Approach: Pros & Cons

Fri, 24 Feb 2017 16:39:53 -0500

In this episode, we talk about the pros and cons to index funds.

Click Here for S&P Indices

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069 – The Mutual Fund Landscape

Fri, 17 Feb 2017 19:59:14 -0500

Click Here to Download The US Mutual Fund Landscape 2016 Report