When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor, proudly serving clients in the Triangle of North Carolina for over 20 years.
Our 3 Step Investing Process
What are you investing for? Many say higher or better returns--but higher or better than what? What do those higher returns make possible for you?
Video recap: https://www.youtube.com/watch?v=tKC2ulw3cz8
To have a successful investment experience you need to have a plan in place. Mike Eklund joins me once again on this episode of Financial Symmetry to discuss our 3 step investing process. This process creates the guideposts for all Financial Symmetry clients. Listen in to learn why failing to plan means you are planning to fail.
Why do you need a plan? Have you ever thought about why you are investing in the first place? Before creating your investment plan you’ll want to set your goals. This way you can understand what kind of returns you need in order to achieve your goals.
We are all often guilty of the lottery mindset--that mindset that thinks if we could choose that one next big thing then we would be set. All we needed to do was buy Apple in 2000, or Tesla in 2012, or Bitcoin at $1000. But the reality is, successful investing requires a plan. Your investment plan can help you understand when to buy and sell or increase or reduce risk in your portfolio.
Our 3 step process At Financial Symmetry, we use a 3 step process to help our clients achieve their financial goals.
Determine when you need the money. Will you need it sooner or later? When you need the money determines the amount of risk you can take. The longer you own stock the more the risk diminishes, so as investors, we are short-term pessimists and long-term optimists. Have a plan in place. Having a plan means that you won’t have to react to market events. This is why the rules-based process is so important. Think about what you can control and implement the plan by using low-cost, high-quality investments. Whether you use index funds or active funds doesn't matter as much as how you plan. Monitor your investment plan so that you can stay invested. Take advantage of opportunistic rebalancing and buy and sell based on your target percentage. Many people leave out this step but it is just as important as the other two steps. 5 things you can expect as a Financial Symmetry client You may be wondering what we at Financial Symmetry offer to our clients. Our clients can expect these 5 things from us.
Our focus is to help you achieve your goals. We focus on long-term success over short-term results. Clients can review their investments on a daily basis in the Client Center. We know that communication is important, so we make sure to answer your questions. We understand that it's your money we are working with. We provide years of experience and do extensive research on all our investments. We all invest in the same way as our clients. We can help you reach your goals What is your investment plan? Do you have a rules-based process? Investing is a lot like fitness. Everyone wants to start, but it can be hard to keep up. We can be your financial personal trainer and help you stay on track to reach your goals.
We can make investing easier for you. If you don’t have the knowledge, experience, and interest to do this all on your own we can help.
Outline of This Episode Why are you investing in the first place? [3:40] We follow a rules-based process [6:02] Monitor your investment plan [15:32] 5 things to expect as a Financial Symmetry client [18:21] The progress principle [23:25] Resources & People Mentioned Episode 118 Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh @TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts > Stitcher > Google Play
What to Expect from a Financial Advisor - The 5 C’s
Have you been on the fence about hiring a financial advisor? This indecisiveness can cost you. This episode will help you decide whether hiring a financial advisor is right for you. You’ll learn the 5 C’s that you can expect when hiring a financial advisor. Press play to find out what you should expect from your financial advisor.
Video Recap: https://youtu.be/zuTdjdDkqUI
4 reasons you may be looking for a financial advisor Have you been considering hiring a financial advisor? If so, then you may be seeking assistance in one of several areas.
Competence - You are looking for someone who knows more than you and is an expert in their field.
Coaching - You may know quite a bit, but knowing and doing are 2 different things. A financial advisor can be like a personal trainer and give you the push you need to get things done.
Convenience -A financial advisor can do what you don’t have time for.
Continuity - You may want someone to help you coordinate with others for family or legacy planning.
Do any of these reasons seem familiar to you? Keep listening to hear what a financial planner can do to help you.
What to expect from a financial advisor Collaboration - Your financial advisor will co-create a plan that serves you and helps you reach your financial goals. This should be a collaborative process between the two of you. In your first meeting, you can expect to be asked a lot of questions so that they can learn about you and your goals. You want your financial advisor to lead with a planning focused approach. If you receive a sales pitch instead, this should raise a red flag.
Credentials - Many people are surprised to learn that you don’t have to have any qualifications to be a financial advisor. However, you may see a bit of an alphabet soup after a financial advisor’s name. It is important to understand what these letters mean. Are they real credentials or simply sales designations? Look for the gold standard CFP certification. CFA and CPA are two other certifications that may be relevant to your situation.
Communication - You can expect regular communication from your financial advisor. They may set up a communication calendar with you to help you set expectations in communication. This regular communication will help you stay updated. Your advisor may also reach out to discuss tax opportunities, set goals, and to review progress. Listen in to hear what red flags you should look out for in your advisor communications.
Compounding value - Are you better off after you pay your advisor than you would have been otherwise? This can be hard to quantify and may take a bit of introspection. Look at your return on life as well as the quantitative parts. Consider your investment returns, rebalancing, and tax deferral. If you think that your advisor is providing a free service then make sure to look for the hidden costs in your portfolio. A fee-only financial advisor discloses their costs upfront so that there are no surprises. If you are looking for a fee-only financial advisor you can find out more about our services at FinancialSymmetry.com.
Outline of This Episode The 4 reasons you may be looking for a financial advisor [2:57] What to expect from a financial advisor [4:19] Your financial advisor should communicate with you regularly [14:51] Is your financial advisor adding value to your life? [18:51] The progress principle [24:01] Resources & People Mentioned Episode 63 - Financial Acronymology, Decoded Episode 108 - What the CARES Act Means for You Episode 133 - Tax Planning with the New American Rescue Plan Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh @TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts > Stitcher > Google Play
5 Tax Planning Opportunities in the American Rescue Plan
The American Rescue Plan was recently passed, but do you know all the changes it will bring? You probably already know about the stimulus checks, but you may not know how it could affect your taxes and healthcare. This latest economic stimulus package could mean big things for your tax planning.
Video recap here: https://youtu.be/Vq8Y2CFYS6E
Since the American Rescue Plan has a heavy tax focus, I invited tax planning extraordinaire, Grayson Blazek, to brief us all on the risks and opportunities that we should be looking out for with the newest piece of legislation. He simplifies this complex topic down to 5 key areas. If you are looking for tax planning opportunities or want to know the risks to look out for, then make sure to tune into Grayson Blazek’s breakdown of the American Rescue Plan.
Who qualifies for the third installment of stimulus checks? The third round of stimulus checks may be the most widely known part of the American Rescue Plan. These checks are capped at $1400 per person. Although the income range of those who qualify has narrowed, many people who were not previously eligible for stimulus checks will be eligible for round 3.
The age range for dependents has been expanded to those in college and older high school students, whereas with the previous rounds of stimulus, dependents were limited to ages 16 and under. Listen in to find out how the income bracket for stimulus checks has changed and learn how you could use this stimulus package as an opportunity for careful tax planning.
How has the ARP changed health insurance premiums? If you were laid off or terminated like many others last year, your company must continue to offer health insurance through COBRA. The drawback with COBRA is that the full cost of the insurance premium was placed solely on the participant without the employer absorbing a share. The American Rescue Plan will now fully subsidize the premiums of COBRA until September of 2021. This means that if you are on COBRA your premiums will be zero.
That wasn’t the only change in health insurance premiums through the ARP. Find out how the thresholds of the Affordable Care Act have changed with the bill as well. Press play to hear how.
Changes to the child tax credit and the dependent care tax credit may have you rethinking your tax planning strategy Most people don’t pay attention to their taxes until the time comes for them to file. But maybe after listening to this episode you may want to start getting in front of your taxes and plan the year ahead rather than focus on the previous year.
If you have children, then this year is an especially good time to consider tax planning. You’ll want to take advantage of the expanded tax credit that went from $2000 to $3000 and $3600 for children under 6 years old. In addition to the child tax credit, the child dependent care tax credit was expanded to max out at $8000 per child.
Changes to unemployment compensation Lastly, the American Rescue Plan has extended state and federal benefits to unemployment compensation until September 6. Lawmakers also chose to make unemployment compensation tax-free for 2020.
Listen in to hear all the details so that you can develop a plan to utilize these changes in your tax planning efforts. This may be a good year for you to consult a CPA to help you file your taxes.
Outline of This Episode [1:20] Stimulus checks part 3 [9:10] Health insurance [15:54] The new child tax credit [23:54] The child dependent care tax credit [27:20] Changes in unemployment compensation [32:00] You may want to reach out to a CPA this year Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh @TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts > Stitcher > Google Play
How a Financial Advisor Invests Their Money - Cameron Hendricks
It’s always fun to peek behind the curtain and see the strategies and process people use for their decision making.
Video recap: https://youtu.be/DDp2dBUhrSg
During this conversation, we review some of my core beliefs around:
importance of tradeoffs - how every financial decision affects others being intentional in being a good steward Defining the balance between enjoying today while saving for tomorrow Structuring your money management around the give, grow, owe and live philosophy 4 Primary Uses of Money You can use it to live, give, owe or grow. For us, we rank these in the following order: give, grow, live, owe.
Giving is at the top of our budget. Giving first breaks the power of money and releases its hold over people. Therefore, tithing to our church has been at the top of our priority list.
We then focus on the growth aspect. This starts with automating our savings so that we can reach 15% of our income. As for how we invest we focus on various types of accounts from 401K to Roth IRAs to 529s for the kids. We explain in the episode how we've set up a system to where we don't lose sleep over our 90% stock allocation.
With 3 yr old twins, a large part of our spending goes to daycare costs. My spouse and I try to spend our money on the things that create joy, including going to NC State sporting events and going on camping trips.
I've always used debt as a tool for large, low-interest purchases such as his home and car. We only hold one credit card and doesn’t want to open any more accounts than are necessary.
Outline of This Episode [4:25] What are Cameron’s money influences? [9:07] How does Cameron divide up his resources? [15:27] Does he worry about his 90% stock allocation? [21:26] How does he see debt? [26:30] What was the best money he spent in 2020? [31:15] The power of small wins Resources & People Mentioned In and of Itself movie Episode 126 - How a Financial Advisor Invests Their Money: Mike Eklund BOOK - Happy Money by Elizabeth Dunn Connect With Cameron Cameron's book, Where Family and Finance Meet Connect on Twitter @cam_hendricks @TeamFSINC Follow Financial Symmetry on Facebook Follow Our Podcast Here Apple Podcasts Stitcher Spotify Google Podcasts
Hidden Financial Mistakes and How to Spot Them
Have you wondered if there are any financial mistakes that you may have been making?
Video recap here: https://youtu.be/9fsWlp56R2U
Sometimes our financial mistakes aren’t obvious, so in this episode of Financial Symmetry, we discuss 3 hidden financial mistakes that you may be making and how you can spot them.
Uncertain outcomes cannot be predicted Are you guilty of believing an uncertain outcome is certain? Sometimes we feel confident that things are going to happen. This can be true even with geopolitical events like the Coronavirus. You may have known the virus would happen, but could you have predicted this current situation?
People are naturally overconfident, but the market is smarter than you. Trying to anticipate corrections will cost you money. In fact, trying to anticipate market corrections will end up costing you more money than the market corrections themselves.
One way to prevent overconfidence is by talking through potential outcomes with a financial advisor or a financial accountability partner.
Don’t underestimate the market’s ability for positive surprises Many people have a negative money script or way that we view finances. This scarcity mindset could penalize their financial potential. There will always be reasons to wait it out or not invest, but instead of focusing on those reasons focus on not missing out on opportunities. You don’t want to take a pay cut in retirement because of missed opportunities.
We often delay financial decisions to give ourselves time to think about it more or evaluate the alternatives and to consider all outcomes. But often the best investments are the most difficult ones that you have to make. This is why having an investment plan makes sense.
“Investing is a lifelong journey. Making money slowly is much better than making then losing money quickly.” -- David Booth. Are you missing hidden tax opportunities? There are different tax opportunities that can be taken depending on your phase of life and how the laws change. One opportunity that many retirees were able to take advantage of this year was the lack of required minimum distributions (RMDs). This allowed people to do Roth conversions. Retirement brings on a wealth of tax planning opportunities since you have more control over your income in retirement. Advanced tax planning early in retirement can help you save on your lifetime tax bill. Listen in to hear how long-term tax planning can save you money over your lifetime.
Estate planning pitfalls Estate planning is often the last part of a financial plan that people want to address since it is the least enjoyable part of financial planning. But if you want a say in what happens to your money after you are gone then you’ll need to create an estate plan and review it periodically. Check out episodes 102 and 122 to learn more about estate planning.
Do you have enough? Are you saving enough? When is the best time to invest? Are you missing out? These are all questions that can be answered with the right financial plan. Think about what a financial plan can do for you. If you are looking for a financial advisor to help you create a financial plan click through to our website.
.Outline of This Episode [2:40] Believing an uncertain outcome is certain [10:16] Missing hidden tax opportunities [14:50] Are you taking advantage of an HSA? [17:15] Estate planning pitfalls [21:18] Today’s progress principle Resources & People Mentioned Charlie Munger Episode 91 - Your Retirement Secret Weapon Episode 47 - Why Do I Need an HSA? Episode 102 - How the SECURE Act Will Impact Your Retirement Episode 122 - Leaving and Receiving an Inheritance by the Decades Roger Whitney - The Retirement Answer Man podcast Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh @TeamFSINC F
During Stock Market Manias, Ask These 3 Questions
Stock market manias have an uncanny way of capturing our attention.
Short video recap: https://youtu.be/wr04xy1pDnU
Not only do they dominate weekly headlines, but create visions of what could be. The most recent example is the rapid rise of meme stocks, including Gamestop, AMC and Blackberry among others.
In this episode, we’ll explore what happened with this most recent mania, and describe the why behind how we can become enamored with this type of approach. We'll then offer three questions to provide a framework for the next time you're facing similar feelings.
What happened with Game Stop? You may have seen a Game Stop store at your local mall or shopping center. Game Stop is a video game retailer whose future did not look promising. Many people compared it to Blockbuster Video.
This uncertain future attracted the interest of short-sellers and the retailer ended up becoming one of the most heavily shorted stocks. When an online Reddit group discovered what was happening to the stock, many people decided to jump in and stop the short. This sudden influx of investors drove the share price up to unprecedented levels.
There’s a difference between gambling and investing Manias are nothing new. We've seen them in many forms including the Nifty Fifty in the 1950s, the tech bubble in the 1990s and BRIC Countries during the 2000s. The speed and size of these rallies can foster a fear of missing out feeling that's is more analogous to gambling.
There's a fine line between gambling and investing. In stock market manias, it's easy for people to throw risk considerations out the window because the possibility of life-changing gains takes over. Subsequently, this mentality could lead to detrimental results when investors are using money they can't afford to lose.
With Game Stop, investing quickly becomes interesting when the stock is increasing like a rocket ship within a week. For many, this strategy looks miles more exciting when compared to a disciplined long-term strategy. This is when the gambling temptation can circumvent the longer-term evidence based approach you may have used up to that point. Enter diversification.
That's because diversification decreases your investment risk. When you diversify, you invest in many different types and sizes of companies all over the world. The goal of diversification is to ensure the performance of one specific stock won’t impact your entire portfolio.
3 Questions to Ponder when Tempted If you find yourself considering a specific stock purchase, there are a few questions that can help your decision.
What does this strategy claiming to provide that's not already in your portfolio? What will this investment reasonably add to your portfolio by including it? Could you increase your expected returns? Will it reduce volatility in your portfolio? Does this help you achieve a goal? Are you going to be comfortable with the range of possibilities this purchase creates? Your investment strategy will be most appropriate for you when it's created in service to your financial plan. A plan that is specifically created for your goals and circumstances. Understanding the interaction between your income and future expenses for the next few years.
What will you need your savings rate to be? How much longer will you plan to work? Do you have other resources where this risk won't derail your long-term financial picture? Carefully considering your investment decisions and ensuring that they align with a cohesive and diversified investment strategy will help you stay on target to reach your long-term goals.
Outline of This Episode [1:32] What happened with Game Stop? [6:03] There is a difference between gambling and investing [9:29] The benefits of diversification are far-reaching [14:39] Time is the ultimate thief [17:33] Today’s progress principle Connect With Chad and Mike https:
A Must listen to show! Really knowledgeable hosts!
I’ve been listening to Chad and Mike for a while now and they have only gotten better with time. The shows are intentionally brief, but contain actionable items.
Their latest episode 118 provides a deeper insight into their investing philosophy. I like that some episodes are designed for beginners and then they mix in other episodes that are more technical and you may have to listen to twice.
Well worth your time!
Regarding episode #179, wealth building by the decades: Many good points and summary but it seems to have missed a little on the 40’s, 50’s, and 60’s. For many, maybe most folks, those years are very fruitful and can make or break a good retirement. At the point of their 50’s lots of people are good at their jobs and have lots of experience and are generally paid for it. Consequently, they are making much more than they were in the early years and usually have a chance to really stuff money into savings. You don’t get as much compounding but big deposits into retirement accounts go a long way!
Thanks for what you do!