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Face The Fear Podcast – Cash Value Life Insurance with Thomas Losher and Austin Ash
Thomas Losher and Austin Ash are two innovative experts in the cash value life insurance space and young leaders within their organization. From growing up together as kids in Fort Wayne, IN to pioneering the future of insurance as colleagues, Thomas and Austin have developed a steadfast friendship centered on challenging one another to become their best selves. In this episode, they share their unique perspective on the value of life insurance and its importance in an overall financial plan for people of all ages.
We cover topics like:
- What exactly is cash value life insurance? How does it work and why would someone want to consider it as a part of their financial plan?
- Are there downsides to having cash value life insurance?
- Can you access funds in a cash value life insurance policy? What does that look like, and how does it affect the policy long-term?
- What is tax diversification and why is it important, specifically as it applies to our generation – Millennials and Gen Z?
Connect with Thomas Losher: LinkedIn
Connect with Austin Ash: LinkedIn
Face The Fear:
P.S. Kaitlyn Duchien, Austin Ash, and Thomas Losher are registered representatives of First Palladium, LLC, Member FINRA and a wholly-owned subsidiary of Ash Brokerage, LLC. Supervising office located at 888 S. Harrison Street, Suite 900, Fort Wayne, IN 46802. 800-589-3000. Content provided is for informational use only and is not to be constituted as financial advice.
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CFP – Certified Financial Planner
On an upcoming podcast, to be released on Friday, July 19th, we will cover a few new terms! In preparation for this podcast, we wanted to link a quick article that explains what a CFP, or Certified Financial Professional is. You’ll hear our guest, John Redmaster, explain why it’s important to work with a CFP in planning out your long-term goals.
Click here to go to Investopedia’s definition of a CFP!
Here is a link for you to check out a CFP that you are considering working with: CFP Verification
Happy reading and don’t forget to tune in on Friday, July 19th for a new podcast!
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Face The Fear Podcast – Chad Tallman, Financial Advisor
In this episode, we chat with Chad Tallman, Financial Advisor*, about everything from investing, to budgeting, to retirement planning – all from a Millennial point-of-view. Chad debunks some common myths about financial advisors and provides tips for finding the right advisor who will best meet your needs.
Here are a few of the questions uncover in this episode:
- How does someone start investing?
- What does “risk tolerance” mean?
- Why is it important for Millennials to have a financial advisor and to develop a financial plan?
- What does a holistic financial plan look like for a Millennial?
- What questions should someone ask a financial advisor to make sure they are the right fit for them?
- What is one thing you wish you know about finances when you were in your early 20s?
Chad’s LinkedIn: https://www.linkedin.com/in/chadtallman/
Contact Us: facethefearfw@gmail.com
Don’t forget to subscribe and leave a review! XOXO
*(Securities offered through Sigma Financial Corporation, Member FINRA/SIPC. Investment Advisory Services offered through Sigma Planning Corporation, A Registered Investment Advisor. CLN Financial is independent of Sigma Financial Corporation and Sigma Planning)
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Compound Interest: How To Earn $ On Your Money
Have you ever had a terrible day that just seemed to keep getting worse? You didn’t hear your alarm go off, so you woke up 20 minutes late. When you jumped out of bed in a panic, you stubbed your toe on the nightstand (who put that there?!). At least you still had time to make yourself a fresh, steaming-hot cup of coffee! Unfortunately, on your way to work, an idiot cut you off in traffic and that steaming-hot cup of coffee flew out of your hand and on to your favorite white shirt.
Nice. Huffing and puffing, you barely make it into the office when a coworker stops you and says, “Are you ready for your presentation in the meeting this morning?” (Oh, sh*t. I thought that meeting was tomorrow!) Later on, you realized that you packed a can of cat food instead of chicken salad for your lunch (ew), gave your crush a fist bump in return to a high-five (awkward), dropped a stack of important documents everywhere, and ripped your pants when you bent down to pick them up (tragic). It’s 4:58pm. You’ve almost made it through the day (thank goodness), but you decide to send one last email before you head home. You need to send your coworker, Danielle, a spreadsheet she requested, and decide to mention how annoying your boss has been lately. Sent! Then your heart stops. That email didn’t go to Danielle. It went to Daniel…your boss.
We’ve all had one of those days. But, what makes a day like this so bad? It’s not because just one little thing went wrong. Oh no. It’s because one bad experience seemed to lead to another, which led to another and another, compounding into a terrible day overall.
While this example of a bad day demonstrates how compounding can work against you, compounding interest is a financial tool that can actually work for you in a very positive way, even on a crappy day. Holla!
First of all, what is compound interest? Compound interest is a basic financial concept where interest is not only calculated on your initial investment (simple interest), but is calculated on your initial investment PLUS any interest you have earned previously. Your money is earning money on its money.
*Mind blowing, I know* Let’s break it down:
Say you put $1,000 into an account that is earning 5% simple interest for 10 years. At the end of the 10 years, you would have a total of $1,500. ($1,000 x .05 = $50 x 10 Years = $500). However, let’s also say that you put $1,000 into an account that is earning 5% compound interest for 10 years. In this case, at the end of 10 years, you would have a total of $1,628.89. How did you end up with more money using compounding interest vs. simple interest? Let’s break it down even further:
For the DIY-ers out there, here’s the formula used to calculate compound interest:
P [(1 + i)n – 1]
P= Principal (Original Investment)
i = Annual Interest
n = Number of Compounding Periods
So, to plug in the numbers from above:
$1,000 [(1 + .05)10 – 1] = $628.89
And here’s a comparison between simple and compound interest over time:
If you’re like me, you probably just glazed over that last section like a Krispy Kreme donut. (I donut blame you). So, we see how the numbers work. Why does it matter?
Compound interest could be the single most important factor either making or breaking your bank account over time. You could either be using compounding interest to your advantage by putting funds into a retirement or investment account and allowing it to compound (grow) more quickly over time. Or, compounding interest could be your worst nightmare if you’ve got high interest credit card or student loan debt, which would compound just as quickly, but in the wrong direction. (Yikes!)
As we can see in the chart above, compounding interest produces a greater return (grows faster) than simple interest over the same period of time. And the key word here is TIME. The concept of compounding interest is pretty spectacular on its own. However, without the crucial ingredient of time (no, not thyme, sorry G’ma), your compound interest will produce very bland results. The longer you wait to withdrawal any of your funds, the more powerful – and flavorful – the compounding effect will be. (Can you tell I’m hungry? Did someone say pizza??)
If you put $1,000 in a retirement account that grows through compounding interest, congratulations! You’re #winning at this game of life. But, if you become impatient and decide to take out $10 here or $20 there, you’ll quickly undermine all the positive benefits of compounding, while likely getting slapped with some hefty tax penalties as well (if you’re under 59 ½). Ouch – Game Over.
If you’re someone who struggles with delayed gratification (aka ME), here’s a life hack to make you think twice about taking money out of your compounding accounts. It’s called the Rule of 72, and it’s a fast calculation to show how quickly your money can double inside a compounding account (without taking withdrawals – no touchy).
Simply divide 72 by the annual interest percentage to see how many years it will take for your money to double. For example, if you’re earning an average of 8% annually in an investment account, your money will double in 9 years (72 / 8 = 9). You put in $1,000 today and you’ll have $2,000 in 9 years. Cha-ching! Obviously, the more money you can invest early on, and the longer you can let it grow, the better your outcome will be.
This is exactly why the best time to start saving is today. Like, NOW. (Actually, the best time to start saving was yesterday…but there’s no time like the present!)
If you want to see for yourself how compound interest works, check out this, this, and this. You’re welcome.Written By: Kaitlyn Duchien
Contact Us: facethefearfw@gmail.com
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Face The Fear Podcast – Randy Kitzmiller, Social Security
In this episode, we sit down with Randy Kitzmiller, Social Security Advisor and Retirement Income Consultant, to discuss the basics of Social Security: what it is, how it works, and how it may change in the future. (SPOILER ALERT: It’s not going away! *Phew*) Join us as we dive into Social Security and how it will affect Millennials’ retirement in the future.
Here are the links Randy mentioned in the podcast:
Social Security Website: https://www.ssa.gov
National Social Security Advisers Website: https://www.nationalsocialsecurityassociation.comFace The Fear Website: https://www.facethefearfw.com
Contact Us: facethefearfw@gmail.com
Don’t forget to subscribe and leave a review! XOXO
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The Bills and The Fees: How to Talk to Your Parents About Money (Without Making It Awkward)
If the thought of talking to your parents about money makes you cringe, you’re not alone. In fact, the majority of Americans would rather talk about “the birds and the bees” than “the bills and the fees” of finances with their own family. When given the choice, we would prefer to talk about our own DEATH than asking our parents about their will or estate. (Now, that is just ridiculous). There’s no question that money is a taboo topic that makes you want to run 100 mph in the other direction anytime you hear the words “budget” or “debt.”
But, why is it so uncomfortable to talk about cash money with our family? And does it even really matter? After all, you’ve made it this far without diving into the depths of financial awkwardness with your parents. What’s the worst that could happen?
Well, here’s a few stats for ya:
- 52% of people turning 65 will need some form of Long-Term Care
- 64% of people with Long-Term Care needs rely exclusively on friends and family for care
- 25% of all caregivers are Millennials
- Average annual cost of caregiving ranges from $18,000 (Adult Day Care) to $91,00 (Private Room in Nursing Home)
- 55% of Americans have no will or plan to transfer assets at death
- Only 35% of Baby Boomers are confident that they are financially prepared for retirement
To summarize these lovely statistics: the odds that your parents may eventually require some form of Long-Term Care (assisted living, nursing home, etc.) during their lifetime is 1 in 2 (a coin flip). The chances that you will need to help pay for some of these costs are also quite high, especially if your parents don’t have any kind of long-term care insurance coverage or other savings in place. AND, if your parents are in the minority of those who have already established a will, congratulations! But, even if they do have a will, are you sure it’s up-to-date? You’d hate for your mother’s ex-husband’s cousin’s half-brother to end up inheriting money that was meant for you, right? Yikes! Talk about awkward.
With that said, yes. Having a conversation about finances with your parents is obviously very important. So, what are you waiting for?? Go ahead and throw those taboos to the wind and dive right in! OK, easier said than done, right? Let’s look at three simple conversation starters that will make the money talk a little less awko-taco.
- You’ve taken good care of me, so I want to take good care of you.
When I was visiting my parents over the holidays, I asked them if we could set aside some time to talk about money. Specifically, I wanted my parents to know that, if anything should ever happen to them, I would be adequately prepared take care of them and their finances. Just as my parents have spent years caring for me and preparing me for my future, I want to be able to return the love by taking care of them when the need arises. We discussed what kinds of insurance policies, investments, and savings they have in place, where they keep financial records, and who they use as a trusted financial advisor. I didn’t ask to see any financial statements or specific policy information (because that’s usually where the awko-meter starts to rise) — only where this information is kept, so I know where to look if I need to access it at some point in the future. By emphasizing that my purpose behind the conversation was love and care for my parent’s wellbeing, we were able to talk open and honestly — without any hurt feelings or awkward outcomes.
YESSSSSSSS 2. I’m interested in visiting a financial advisor, but I’m not sure where to start. Would you mind introducing me to yours?
This is a win-win conversation starter. Not only does it provide you an opportunity to visit a financial advisor for the first time (without spending lots of money), but it also provides an ideal environment to discuss difficult financial topics with your parents. Their advisor can guide the conversation and act as a third-party mediator if needed. While meeting with the advisor, you may want to discuss your parent’s current retirement plan, including protection against long-term care events, and to review any beneficiaries on your parent’s insurance policies to ensure they are up-to-date. (You’d be shocked how often an ex-wife, ex-husband, or estranged family member ends up receiving a death benefit, simply because policy information was not current). AND, while you’re in the office, you might as well glean some insight from the advisor on your own financial plan. Most likely, the advisor will be more than willing to assist you, as they see you as a potential future client. (If the advisor doesn’t see your value, you may want to look for another advisor).
Even if your parents don’t already have a trusted financial advisor, this is the perfect time to find a reputable professional together. It will be an opportunity to bond as a family, while also tackling your finances in an efficient and holistic manner.
3. Do you have a legacy plan? AKA: If you die tomorrow, what kind of legacy to do you want to leave and how do you want it accomplished?
Most people don’t like to think about dying until a death actually occurs. Can’t blame you. Death isn’t the first topic that comes to my mind when I think of “fun conversation starters.” BUT, the problem we create when we avoid talking about death is that we miss out on the opportunity to plan for a legacy — until it’s already too late. While your parents may want to leave their house behind to the family, donate their art collection to a local museum, and divide the rest of their assets equally among you and your siblings– if they don’t have these wishes expressly written in a will, they’re not likely to happen. When someone dies without a will (called intestate in legalese), your state will then determine how your assets should be dispersed. This could be okay, except that your state has no idea that you don’t even really like your spouse, you’re estranged from your son, and your daughter is a compulsive shopper who blows every penny she has on lottery tickets. But, the state doesn’t really care about your family issues. It will still divide up your assets among each of these individuals anyway. (Sorry ‘bout your luck).
Contrary to popular belief, establishing a will (and keeping it current) is not as much of a headache as many people think. For a simple estate (think: relatively small and not paying estate taxes), it may only cost around $100-$150 for an attorney to draft a will. (If you’re looking for a lawyer, start here). Or, you can also write your own will by using a reputable online software program or following a template. HOWEVER, if you complete your will on your own, you are doing so at your own risk, as each state has different regulations surrounding what is required to validate a will and, if done incorrectly, it may not hold up in court.
I’ve only scratched the surface on the importance of writing a will (both you and your parents). And I haven’t even started to explain all of the incredible information that can be contained in a will, such as designating power of attorney or establishing a living trust. But, I realize I’ve already bored you to tears, so I’ll save these enthralling topics for a different time. (Psst: stay tuned for an upcoming Face The Fear Podcast episode on Estate Planning 101, coming soon!)
In summary, you know you should probably strike up a conversation with your parents about money. It’s on your to-do list, right below “Clip grandma’s toenails” and “Watch paint dry.” At least now you’ve got a few conversation starters in your back pocket to break the ice. I promise, it won’t be as bad as you think. (Or, maybe it will be. In that case, I don’t know you). Either way, challenge yourself to start a conversation with your family about finances this week. Even simply cracking the door open today could provide fruitful opportunities for future discussions and prevent a flood of heartache, confusion, and financial strain later in life. Friend, it’s time to #FaceTheFear!
Written By: Kaitlyn Duchien
Contact Us: facethefearfw@gmail.com
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Power of Attorney
“What is a POA?” This is a question I heard while at work recently. Prisoner of Azkaban? (Where are my Harry Potter fans at?!) Pledge of Allegiance? Plan of Attack? These could all be used for the abbreviation of POA but in the insurance world, POA generally stands for Power of Attorney.
So, what the heck is a Power of Attorney?
Translation: This means that someone can give another person power over their assets both legally and financially. The person that you name as your Power of Attorney can act on your behalf to handle business such as financial transactions like buying life insurance, making gifts of money, making health care decisions, etc. The Power of Attorney can either be set up for specific financial or healthcare matters or it can be set up to cover everything.
Because we care (awww), we want to add in a little note to advise the importance of choosing your POA. Please make sure that when you are thinking of who you want to be your Power of Attorney, you are giving this decision a lot of care and consideration. Take your time with this selection, as this needs to be someone that you completely trust as they could have access to both your physical and financial needs and you want to make sure that they will always act in your best interest.
Side note: A Power of Attorney cannot change a person’s will. A will is a separate document that can be set up to legally state who obtains what parts of your estate at the time of your death.
To name someone as your Power of Attorney, you must be of sound mind and mentally competent. This document must be signed and notarized by a notary. Fun fact: Attorneys are unnecessary to place a Power of Attorney in execution. (This is highly recommended though!) A Power of Attorney is typically put in to execution in advance of someone being incapacitated. The Power of Attorney can be revoked at any time (this means that even though you have something written down, if you are mentally competent and want to make changes, you can do so.)
So, why is it important for younger people (as well as older) to have a Power of Attorney?
- Healthcare decisions – Having a trusted Power of Attorney means that you can lay out what your wishes are when it comes to medical care. What you do and do not want if you were not able to make your own decisions. (You can even specify who can make the decisions on who bathes you, what you eat, etc.)
- Financial Matters – If it were needed, a financial POA would be able to file your taxes, collect your debts, pay your bills, access your bank accounts, manage any property that you own, help apply for government benefits like Medicaid/veterans’ benefits, and make future investment decisions.
- Religion or Culture – If your religion or cultural dictates portions of your life, this can be considered. Say that you need to make sure all your food is Kosher or you have specific brands of products that you might use, your Power of Attorney can make sure that this happens.
- Reproductive Material – Let’s say that you have either your eggs or sperm stored. Naming someone as your personal care Power of Attorney would give them the right to access these items if something were to happen to you.
- Pets – We all LOVE our pets, right?! (Shout out to my cats Jasmine and Sophia! Mama loves you!) Having a Power of Attorney in place ensures that your pets will be taken care of in the way that you wish.
There are many, many more reasons to consider obtaining and creating a Power of Attorney, these are just a few reasons!
In the future, we will be covering conservatorship, how and when these take place and why they are important. (Hint: Britney Spears and Stan Lee.)
Until then, face the fear!
**Disclaimer: I am not a financial professional. Please seek the advice of a financial professional when planning for your retirement and own financial situation. **
Written By: Nicole Ellsworth (@lacelemonslove)
Contact Us: facethefearfw@gmail.com
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403B
In the article that Heidi wrote, we learned about what a 401(k) plan is and how it works. So, what is a 403(b) plan and who is eligible for one?
A 403(b) plan is a type of retirement plan for tax exempt organizations, specific employees of public schools (teachers, school administrator, professors), certain ministers, nurses, doctors, or librarians. A 403(b)-retirement plan is like a 401(k) in how it is funded through employee contributions. There are three types of accounts for 403(b) plans: annuity contracts with insurance companies, custodial accounts made of mutual funds – called a 403(b)(7), and retirement income accounts for church employees, typically invested in mutual funds and annuities – called a 403(b)(9). An employee usually can choose among several investments to build his or her portfolio, and design the account based on risk tolerance, such as conservative, balanced or aggressive. (As discussed in the podcast with Erin Martin, make sure to check the fees when choosing where to direct your funds.)
Like a 401(k) plan, your employer may choose to do a matching program. For instance, this means that if you put in 3 percent of your salary into a 403(b), your company could put in the same amount if they do 100% matching. Other companies may do a 50% matching rate. This means that if you put in 6%, they will match up to 3%. (Free money!!) Make sure to check with your HR department on if and how your company matching program works when setting up your 403(b) so that you can take full advantage of the program
Like a 401(k), a 403(b) has a contribution threshold. For the year of 2019 the contribution amount is: $19,000. If you are age 50 and older, you can contribute an additional $6,000 a year. Also, if permitted by the employer, a 403(b) plan may allow for an additional catch-up if an employee has worked for fifteen years or more. You may be able to stack these additional contributions, although there are limits and it is a bit confusing, which is why it is important to seek the advice of a financial advisor to navigate these additional contributions.
Another way that a 403(b) plan is like a 401(k) is that you will be penalized if you withdraw funds before the age of 59 ½ at a rate of 10 percent. (Yikes!)
One caveat is that there are certain circumstances that funds can be withdrawn without penalty such as separating from an employer when a person reaches age 55, a qualified medical expense, death of the employee or disability.
Phew!!
So, what happens if you change employers? Well, potentially there are four possibilities: roll the funds into an IRA, keep in the current plan, transfer to a new employer plan or cash out the account. Not all of these options may be available to you, so this is where speaking with your financial advisor and human resources department before leaving your current employer is very important.
As a reminder: I am not a financial professional and urge you to seek the advice of a financial advisor when making your own financial decisions.
Until next time, face your financial fear! 😉
Written By: Nicole Ellsworth (@lacelemonslove)
Contact Us: facethefearfw@gmail.com
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New Year, New You: 5 (MORE) Ways You Can Take Control of Your Finances in 2019
Earlier this week, we talked about 5 simple ways to get your financial sh*t together in 2019. If you’re looking for that article, here it is! If you have been sitting on the edge of your seat waiting eagerly for the 5 MORE ideas to tackle your finances in the new year…well, my friend, you need to get a life. (Just kidding! You’re my favorite). Wait no longer. Here are 5 MORE ideas to show your finances who’s boss in 2019:
- Start that Side Hustle
Everybody’s got a knack for something. Whether it’s photography, writing, event planning, car-fixing, baking, nannying, or playing music, your “knack” can be turned into a side-hustle money maker. The New Year is an excellent time to begin monetizing your skill set.
Think you don’t have any valuable skills that can translate into a profitable business? Think again. Can you drive a car? (Think: Uber and Lyft). Can you put together a piece of IKEA furniture faster than your mom can say, “Honey, make sure you read the instructions”? (Think: TaskRabbit) Can you speak English? (I hope so if you’re reading this article. Think: Teaching English online through VIPKID). Can you take a BuzzFeed survey to find out what your spirit animal is? (Think: SwagBucks). Can you walk someone else’s dog? (Woof! Think: Rover).
I prove my point. It’s easier than you may think to pick up a few extra dollars here and there. You just need to dedicate a little time and energy to get it started. Ultimately, those extra bucks could jumpstart your emergency fund or pay down a credit card faster. Score!
2. Find a Financial Mentor
If you’re interested in seeing a financial advisor, but aren’t sure where to start looking or don’t feel like it’s the right time yet, finding a financial mentor may be the perfect first step.
Like most mentors, a financial mentor is someone who has walked the path before you, achieved success with managing their own finances, and can help illuminate your way. This person could be a parent, coworker, friend, teacher, pastor — really anyone who you admire for their practical, disciplined, and knowledgeable approach to money. The purpose of this mentorship is simply to establish a relationship with someone who can provide constructive advice, hold you accountable to your financial goals, and even recommend a financial advisor who’s a good fit for you. Ideally, your financial mentor will be someone who you know, trust, and feel comfortable discussing finances with — and who isn’t afraid to call you out on your BS and give you some tough love when needed.
BUT, remember: a financial mentor is not a replacement for a financial advisor. While it may be tempting to imitate every financial decision your mentor has ever made in hopes of achieving the same success, your mentor’s approach may not be suitable for your unique circumstances. Take all advice given as a mere suggestion and make sure to run it past a financial professional first. Your mentor cannot be held liable for a poor investment suggestion or financial strategy that went sideways. (Sorry ’bout your luck).
3. Face the Fear of Money Talk
Asking a coworker how much money they make? GASP! I would never. Pestering my parents to purchase life insurance, long-term care, or write a will? No way. Too uncomfortable. Touching the topic of student loan debt on a first date? WOAH. Now that is just too far!
(OK, maybe not on the first date). As a society, we have become afraid of talking about money, and all of this secrecy is ultimately hurting our finances. Why?
Consider this. You just received a job offer in a brand new city. YASSSS! After your initial excitement settles, you realize that #1, you have no idea what a reasonable job offer may be for this position and #2, you have no idea what a reasonable apartment costs in this new city. Thankfully, you have tools like Glass Door and Apartments.com to assist with these decisions. However, can you imagine how much more straightforward it would be to simply ask someone in that position what they are being paid or ask someone in the city how much they are paying for their apartment? For whatever reason, money has become a taboo topic that most Americans feel uncomfortable discussing. It’s time to change that — for everyone’s benefit.
Here’s a New Year’s challenge to spark up these conversations at least once in 2019. (But remember, these are still sensitive conversation topics for some, so please use tact. And if you’re going to ask the question, be willing to answer it yourself):
- Ask a coworker how much they’re making. (Just in case you asked yourself, “But, is that even legal??” Yes, it is.)
- Ask your boss if there are opportunities for promotion and set up a plan to get you there.
- Ask a friend how much they are paying for their apartment.
- Ask your parents if they have life insurance, long-term care, and have written a will. (P.S. These are hugely important topics that no one ever talks about until it’s too late. Don’t be that person).
- Ask your significant other how much personal debt they have (credit cards, student loans, car loan, etc).
- Ask your kids if they have any questions about money, (such as how much you make, how much it costs to buy a car or a house, how much a college education costs, etc). Talking openly and honestly with your kids about money could be the single most influential way to improve the financial habits of the next generation.
- For the ULTIMATE challenge-seekers: Ask a stranger if they feel financially stable. Their response could be eye-opening, and it may spark a life-changing conversation unlike any you’ve experienced before. (Or they may just say, “Nope!” and walk away. Who knows).
4. Make Your Money Do The Work For You
Investing. You’ve heard about it. You know you should probably do it. And you’ve watched The Wolf of Wall Street and The Big Short, so you’re basically an expert.
OK, pump the breaks. You may not be an expert, but you definitely don’t need to be one to start putting your money to work for you.
If you have a retirement account such as a 401(k), 403(b), or IRA, you’re probably participating in the stock market already through the mutual funds inside these accounts. In other words, you’re halfway to being the next Warren Buffett. (Just kidding. But dream big, kids).
So, how do you start investing when you’ve only got a few dollars to spare and your current investment knowledge is limited to binge-watching Shark Tank?
The most old-school, yet time-tested method is to begin working with a financial advisor who is a Registered Representative with FINRA. (How do you know if an individual is registered with FINRA? Check here). This professional can evaluate your current financial situation, assess your risk tolerance, and pair you with suitable investments that both align with your goals and your personal values. Fortunately, we will be speaking with one of these fantastic professionals on our February Face the Fear Podcast episode! Make sure you’re subscribed so you don’t miss it.
An alternative is investing through robo-advisors and investment apps. While you’re missing out on the face-to-face interaction and personal relationship built with a financial advisor, these online tools can be a beneficial and inexpensive option for beginners who don’t have billions of dollars to invest (yet).
As per usual, here’s a quick disclaimer. Investing is one method of wealth accumulation that should be accessible to everyone, regardless of net worth or investment experience. However, investing does involve risks along with it’s rewards. So, make sure you are fully aware of these risks and have received all required informational materials (such as a prospectus) PRIOR to chucking all of your pretty pennies into an investment. Also, here is a Beginner’s Guide to Investing published by the SEC (Securities and Exchange Commission — an independent federal agency established to protect investors). You’re welcome.
5. Subscribe to Face the Fear (Shameless Self-Promo)
You know you want to.
- Website: www.facethefearfw.com
- Twitter: @Face_The_Fear
- Instagram: @Face.The.Fear
- Facebook: www.facebook.com/facethfearfw
- YouTube: Face the Fear
- Podcast: Face the Fear on iTunes, Spotify, Google Play
Written By: Kaitlyn Duchien (@ktaylor1395)
Contact Us: facethefearfw@gmail.com
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New Year, New You: 5 Ways You Can Take Control of Your Finances in 2019
New Year, New You — am I right? As you start to prepare for 2019 to be your best year yet (and vow to actually USE your gym membership for more than a month), don’t forget about getting your financial sh*t together, too. Even if you don’t feel like you’re in a good place with your cash money, now is the perfect time to assess what money mistakes you’ve made in the past, what financial goals you have for the future, and how you’ll start taking baby steps to get there.
For those procrastinators out there who wish they’d started investing/saving/budgeting earlier in life (myself included), it’s not too late! Hear me out: starting today is WAY better than never starting at all — or even waiting a year from now and having the same conversation with yourself all over again (not a cute #ThrowbackThursday moment).
So as we gaze longingly to the year ahead (or at least longingly at that last remaining Christmas cookie calling your name), let’s look at 5 ways you can get your finances in check during 2019:
- Open a Retirement Account (and start contributing to it)
This is important. You know this is important. But, it doesn’t seem like a top priority when you’ve got student loans, credit card debt, and bills knocking at your door today, and retirement is still decades away. You’ve still got plenty of time to save up, right? Wrong.
Let’s use a little analogy. Every year before Christmas, you have a mental conversation with yourself that goes something like this: “I really should get my Christmas shopping done early this year. That way I don’t have to stress about it later….Eh, I’ve got plenty of time, I’ll get around to it.”
Suddenly, you wake up and it’s December 24th (how did that happen??). You now have to enter beast mode to somehow find, buy, and wrap presents for all 287 members of your family in 24 hours — putting Santa himself to shame.
While pulling off this Christmas magic may be possible (think: STRESSFUL), it’s not the end of the world. Your retirement savings, on the other hand, is a different story. You really only have one shot to make sure you’ve got enough buckaroos saved up, so when you’re ready to leave the office and spend the rest of your life on a beach, you don’t have to worry about running out of money. Right now, time is on your side, so START NOW. (You’ll thank me later.)
If you’re wondering where to go to open a retirement account (and what to do with it once it’s started), listen to our latest podcast episode with Retirement Investment Advisor, Erin Martin!
2. Boost Your Retirement Account (if you’ve already got one)
You may have breezed past #1 thinking, “Well, that’s easy! I already have a retirement account that I’m contributing to like a real adult.” First of all, CONGRATS! You’re #winning.
Second of all, it’s time to supercharge that bad boy (like Vin Diesel hitting the NOS in Fast and Furious).
One way to do this is by upping the percentage of your paycheck that you’re putting away for retirement savings. Simply increasing your contributions 1% per year (hardly a noticeable difference to your take-home pay), you might be AMAZED by how quickly your retirement savings compounds over time. To make things even easier, many plans allow you to select an automatic escalation feature, which will bump up your percentage each year without any effort on your part. Nice.
3. Make a Budget You Can Actually Stick To
Remember that one time you made a detailed budget that lasted for a solid two days before you blacked out during an Amazon shopping spree? Same.
The problem with a lot of budgets (and New Year’s resolutions for that matter) is that they are very optimistic, but not always realistic. I’m not saying you need to lower your financial goals. But, instead of trying to pay off all debt overnight while also saving 50% of every paycheck, simply develop practical mini-goals that can be maintained long-term. For example, try implementing one new budgeting strategy each month in 2019. January, put $10 per week in savings. February, continue setting aside the $10, but also aim to eat out only once per week. In March, keep the first two month’s strategies going, while adding another practical goal that bumps you even further in the right direction. By the end of the year, your budgeting baby steps will snowball into a realistic, maintainable financial lifestyle.
P.S. If you’re not already using a budgeting app like Mint, what are you doing? Seriously. Go download it right now. It’s a free app that allows you to manage your checking and savings accounts, investments, credit cards, retirement plan, and bills all in one place. Say goodbye to budgeting on boring Excel spreadsheets forever (unless that’s your thing — you do you, boo boo).
4. Give Gifts that Make Cents
Christmas is officially over, which means your finances are probably in recovery mode after a month of generous gift giving. While there’s nothing quite like the feeling of finding the PERFECT gift for your loved ones, the feeling might be quickly overshadowed by the feeling of doom when you check your bank account. Yikes.
Since you can’t avoid the gazzillion birthdays, weddings, and special occasions happening throughout the year (as much as you may want to), it’s time to get creative with giving gifts that won’t break your bank.
Here’s a few ideas:
- For the person who doesn’t need anything:
- Consider donating to a local charity or Kiva (an international nonprofit microloan organization) on their behalf. You’re not giving them anyTHING, but you are providing meaning in their honor and bettering the world in the process. Win-win.
- For the person who loves experiences:
- Score discounted tickets to local events on platforms like Groupon. Take a historic tour of your city, attend a concert or comedy show, or try a ballroom dancing class — all experiences that you can enjoy together.
- For the person who likes to pick out their own gifts:
- Sell or exchange your unwanted gift cards on platforms such as Cardpool or Amazon’s Card Cash. You can either swap out that gift card your grandma gave you to the iTunes store back in 2008, sell it and use the cash to buy something better, or buy discounted gift cards to help your funds go farther.
5. Subscribe to Face the Fear (Shameless Self-Promo)
You know you want to.
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5 (MORE) ideas of how to take control of your finances in 2019 coming soon! Stay tuned!
Written By: Kaitlyn Duchien (@ktaylor1395)
Contact Us: facethefearfw@gmail.com
