In today's episode, Mike Morton and Matt Robison introduce a revolutionary solution to alleviate financial anxiety: the Joker Fund. Inspired by the infamous line from The Dark Knight, "Nobody panics when things go according to plan," they emphasize the importance of planning ahead to tackle irregular expenses that often leave individuals feeling financially overwhelmed. With statistics showing that 76% of U.S. adults experience financial anxiety, it's clear people need relief.The Joker Fund turns unexpected expenses into anticipated by automating savings for things like insurance payments, tuition bills, summer camps and even vacations; things you know you will spend money on but don’t make it into any monthly budget because the timing varies. Get a step-by-step guide on implementing the Joker Fund, from identifying irregular expenses to setting up automatic transfers to a dedicated savings account. By embracing automation, individuals can plan and bid farewell to financial panic.Are you ready to create your ideal lifestyle?  Let’s Connect.Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

In this week’s episode, hosts Mike Morton and Matt Robison discuss IRA Beneficiaries. They delve into the critical decision of choosing a beneficiary for your Individual Retirement Account(s) (IRA) and its financial ramifications. Through a real-life example, you will see how one of Mike’s clients' strategic maneuver saved her family $150k in taxes by spreading the withdrawal of her spouse's $500k IRA over a longer period of time.They also explore the workings of beneficiaries for IRAs, 401(k)s, and 403(b)s, emphasizing the importance of proper estate planning to avoid tying assets up for long periods in probate court. Use the handy checklist provided by the hosts to review your beneficiary designations. Take proactive steps in securing your financial legacy for your loved ones' benefit, potentially saving them significant tax burdens in the future.Are you ready to create your ideal lifestyle?  Let’s Connect.Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

In this week’s episode, Mike Morton is joined by financial coach Adam Koren to discuss strategies for overcoming the stress and shame often associated with managing personal finances. They delve into the emotional aspects of money management, emphasizing the importance of recognizing societal barriers to financial literacy and fostering open dialogue. Adam shares insights on facing fears surrounding bank account balances and past expenses, highlighting the benefits of discussing financial concerns with trusted individuals. The episode also explores the value of structured conversations, such as monthly "financial date nights" with a partner, and emphasizes the role of self-compassion and gratitude in navigating financial challenges. Listeners are encouraged to approach finances with empathy and understanding, utilizing various strategies to empower themselves and achieve peace of mind.Are you ready to create your ideal lifestyle?  Let’s Connect.Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Join Matt Robison and I this week as we discuss the various ‘buckets’ your finances are in and if you have the right ratios for your needs. Inspired by a real client’s story, we talk about portfolio holdings such as real estate, brokerage and retirement. Having too much money “locked up” in assets such as your house and your 401k could make it difficult for you to cover unexpected expenses or even planned ones. Tune in to be sure you have your assets in a row. Are you ready to create your ideal lifestyle?  Let’s Connect.Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

In this week's episode, Matt Robison and I, Mike Morton, delve into the concept of asset location. No, we aren’t revealing CIA operatives' whereabouts but rather discussing the strategic placement of investments, which can significantly impact returns, potentially yielding a $74k difference. Asset location refers to where investments are held, such as 401ks, IRAs, or brokerage accounts, with a focus on optimizing tax savings, particularly by placing bonds in tax-free or tax-deferred accounts. Using a real client example, I illustrate how adjusting asset locations can notably enhance returns over time. We also offer practical tips like reviewing account types and balancing taxable fixed income and equities accordingly. Does this seem overwhelming? Fear not, we also give you the “good enough” strategy that does not include optimizing asset locations: save 15% of your gross income and invest predominantly in low-cost index funds.Are you ready to create your ideal lifestyle?  Let’s Connect.Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

This week I am joined by special guest Anne Lester to discuss the importance of educating young individuals about finances. In particular, we discuss Anne’s latest book titled Your Best Financial Life: Save Smart Now for the Future You Want and its focus on individual financial responsibility. We also talk about the shift towards personal financial management, overcoming behavioral biases in saving and investing, the benefits of automated savings, and the significance of educating young individuals about finances. Watch on Youtube   Retirement Savings - You’re on your own Anne and I begin our chat by acknowledging a historical shift in retirement savings. Back in the day (our parents’ generation and even ours, to some extent), companies would take care of their employees with pensions and retirement packages. It was normal for an individual to spend years, decades even, at the same job, or at least employer. The same cannot be said for today’s economy in which most people spend a maximum of five years in any one given position.  Why does this matter? If your job isn’t actively preparing you for retirement, that responsibility now falls on your shoulders. There is a lack of education and an abundance of complication when it comes to personally managing long-term savings. Let’s break those key issues down to their impact on you:   Educating kids and young adults on personal finance Math in elementary school covers the basics. In high school, it gets more complicated with advanced computations but most public schools do not spend much, if any time on personal finance. It is up to us parents to teach our kids about credit (cards, lending, etc), real estate (purchase, lending), and arguably most important: long-term savings. These concepts are not intuitive and they accompany two significant behavioral biases: loss aversion and present mindset.   Loss Aversion and Investing We’ve talked about loss aversion in the past on this podcast, in particular in the episode Be More Aggressive. Anne revisits this behavioral bias that is well defined by the Decision Lab as a “cognitive bias that describes why, for individuals, the pain of losing is psychologically twice as powerful as the pleasure of gaining. The loss felt from money, or any other valuable object, can feel worse than gaining that same thing.” How does this impact investing? It explains why so many people are afraid of the stock market. Even if they know that historically speaking, they will always gain money from investing in stocks, watching the tickers and tuning into the day-to-day market volatility wreaks havoc on the psyche and impacts one’s decision making. Putting money in a savings account feels safer than investing, even if we know that it is a financially detrimental decision. We just talked about this last week!

Risk: It bears Repeating Anything worth saying is worth repeating. - Humble the Poet We’ve talked about risk many times in the past. In particular, how you view risk. The reason the conversation bears repeating, other than the fact that I field this topic on the regular, is because it is tied to a strong emotion: anxiety.   Not taking a risk is the biggest risk Many people “feel” like the safest way to save money is to hide it under a mattress (ok, not really, but savings accounts are today’s mattresses). Why? Watch the news. The stock market ticker runs at the bottom throughout many newscasts. People have market changes pinged directly to their phones. Do you know how often the market fluctuates, daily? If you do, then you know exactly what I am talking about. Do you view taking a risk as losing money? Then this podcast is for you! Join Matt Robison and I this week as we discuss how you should be looking at risk. Spoiler alert: risk isn’t losing money, it is losing purchasing power.   Risk: How long until retirement? When deciding how to invest, consider the timeframe - it all depends on when you will need to spend the money. 30+ years until retirement: You are just starting in your career, maybe you have one or two young children at home. Your best option for long-term investments are stocks. Over long periods of time (40+ years), stocks have always outperformed any other type of investment.10-20 years until retirement: Your kids are (mostly) grown, you’re paying college expenses, etc. The strategy here is almost the same as above: Stocks are still your best bet for 10+ years of investment. However, you need to balance that with anticipated costs for the next couple of years. For instance, the 529 account for your high school junior should be invested more conservatively than your 401(k).About to retire or retired: Congratulations! Now your main concern is having your money last, being available when you need it, and keeping up with inflation. See below for the Retirement Bucket strategy! These time frames are important when you look at historical market returns.   Retirement Buckets Now that you are about to retire, or even better - you have already retired - you need to keep a close eye on your portfolio to ensure it will keep up with your ongoing needs. Cash: Keep the next 1-2 years of expenses in cash and money market funds. You don’t want to lose that money!Bonds: The following 2-7 years of expenses can be invested in very safe bonds or bond funds. This will get you some nice return (hopefully!) while not losing value.Stocks: Any money that you plan to spend in 7+ years from now, you can consider investing in low-cost stock index funds. Stocks tend to ourperform over long periods (10+ years) and you want your retirement portfolio to keep up with inflation The first two buckets above (1+2) are your war chest: the money you need to have to cover expenses over the next 5-7 years in case the stock market crashes.   Stocks for the Long Run Need more proof that stocks are your best bet? Let’s pretend that you were around in 1802 and you were rich. You had a crisp $1 to save. Had you put it under your mattress and pulled it out this year, it would be worth a whopping $.04. Yes, you read that correctly. Four cents. Do you see how the dollars don’t make sense? Had you invested that $1 in the stock market, it would now be worth $1,601,184. Here is where the purchasing power comes into play. That dollar bill in 1802 could probably purchase dinner for the whole family. Uh, not so much in 2024! You can see from the chart that a dollar from 1802 has lost so much purchasing power that it can only buy 4.7 cents worth of goods. Bonds have done better, with a modest return from $1 to $1,746. Obviously, stocks far outpace cash

Have you heard the news? There are now Bitcoin Exchange-Traded Funds (ETFs)! I can hear your head scratching from here but don’t worry. Matt and I are here to break down these new trade floor offerings on this week’s episode and give you the information you need to make an informed decision when it comes to investing in this new product.   What is a Bitcoin ETF? Let’s start by breaking down Bitcoin and ETFs. In a prior episode, we talked about cryptocurrencies in depth and how buying into them is more speculation than investing. At the time, two and a half years ago, cryptocurrencies were dangerous due to their associated risks, including regulatory, security, insurance, fraud, market, and liquidity. That hasn't changed much in the meantime. We also did an episode on ETFs. In it, we discussed how ETFs are wrappers for financial products. So what is a Bitcoin ETF? Essentially, it is an easier way for you to enter the cryptocurrency market. By purchasing a Bitcoin ETF, you gain exposure to cryptocurrencies without the complexities of directly buying, storing, and managing the actual “coins.”   Features of a Bitcoin ETF Here's a summary of how they generally work: Structure: Bitcoin ETFs are traded on traditional stock exchanges rather than cryptocurrency exchanges.Underlying Asset: The ETF might be backed by actual Bitcoin holdings (physically backed), or it may use derivatives like futures contracts to track Bitcoin's price (futures-based). These new Bitcoin ETFs are set up to hold actual Bitcoin, so you do not have the peculiarities of Future contracts.Accessibility: Since it's traded like a stock, investors can buy and sell shares of a Bitcoin ETF through regular brokerage accounts. This makes it accessible to a wider range of investors who may not be familiar with or comfortable using cryptocurrency exchanges.Regulation and Safety: ETFs are regulated financial products, which means they are subject to the oversight of financial authorities. This provides a level of security and legitimacy that direct cryptocurrency investments may lack. Custodial security: Your ETF is held by a Custodian (i.e. Fidelity) that is regulated by the SEC and has insurance against fraudAvoidance of technical complexity: Trade it like a stock, and you own Bitcoin.  You do not have to create new digital wallets, accounts, cold storage or any of that. Risk Management: Investors get exposure to Bitcoin's price movements without dealing with the risks associated with holding the cryptocurrency, such as hacking or loss of access to their wallets.Tax Efficiency: For some investors, particularly in certain jurisdictions, investing in a Bitcoin ETF can be more tax-efficient than holding Bitcoin directly. Basically, the reporting is the same as your other investments - Bitcoin will be represented in the year-end report so you don't have to track the cryptocurrency exchange personally.Liquidity: ETFs are generally more liquid than holding the cryptocurrency directly, as they can be quickly and easily traded during market hours.Fees and Costs: Investors should be aware of the fees associated with Bitcoin ETFs, which might include management fees and the potential costs associated with the fund's method of tracking Bitcoin's price. Now that you know what a Bitcoin ETF is, you can make an informed decision about investing in this new technology.

It’s January. The W-2’s and 1099’s are beginning to roll in. Your tax accountant is chomping at the bit to get your documents so they can begin preparing your returns. Why not take this opportunity to review your financial well-being? Join Matt Robison and me this week as we present a handy checklist of things you should examine every year to reach your financial goals. While it may seem daunting, taking the time to perform this review saves you money on taxes and makes you some extra cash with a few small tweaks to logistics. There are six main areas of concentration for you to review: a personal assessment, cash flow considerations, asset and debt factors, tax implications, insurance planning, and legalities. I’ve put this all in a handy dandy downloadable checklist, just click below to receive your free copy and keep reading to learn more about each category you should review.     Don’t just take my word for it…tune in and hear Matt talk about how he “earned” about $1,000 an hour by taking the time to complete this review!   Personal Assessment Do you need to assess the progress you made toward your goals last year? If so, consider the following: Review and compare your financial models, comparing a snapshot of where you are today to last year and/or a prior time. Inventory your recent accomplishments to identify what strategies worked well. Have you identified new goals for this year or the future? If so, assign a priority and time horizon, and incorporate them into your overall plan. Are there any life events that are likely to occur for yourself or your immediate family this year (e.g., move, marriage, birth, higher education, job change, retirement, illness, death)?Do you need to confirm whether you or any family members will reach a milestone age this year? If so, reference the “Important Milestones” guide.Are you concerned about any variables or circumstances that could potentially impact your plans for this year?   Cash Flow Considerations Do you expect your household income and/or expenses to change materially this year?Do you need to review your cash flow plan? If so, evaluate your actual income and expenses, and adjust your spending plan as necessary. Do you need to review your employee benefits to ensure that you are taking advantage of what your employer offers? If so, consider maxing out annual contributions to any retirement accounts, Health Savings Account, Flexible Spending Account, and/or Dependent Care Flexible Spending Account. Are you able to contribute to an IRA? If so, consider the following: Fund a Roth IRA, make deductible contributions to a traditional IRA, or make after-tax contributions to a traditional IRA, depending upon your eligibility.If you are married and your spouse does not have earned income, explore spousal IRA options. Do you need to confirm that you are adequately saving toward your goals? If so, review your target savings and funding rates. If you fully fund some goals early in the year, continue saving toward other goals. Do you have funds left in your FSA from last year? If so, consider spending such funds before the expiration of any grace period. Are you subject to taking RMDs (including from inherited IRAs)? If so, consider the following: If you are charitably inclined and age 701⁄2 or older, you can do a QCD to satisfy your RMD. Note the “first dollars...

Legit Money Laundering: After-Tax 401k Contributions  Are we really talking about money laundering in a financial advice podcast? Yes, but it is completely legit and could give you an extra $25k/year! This week Matt and I explored a unique and powerful strategy for maximizing savings and potential earnings: After-Tax 401k contributions. The short story involves using your taxable brokerage account for living expenses and contributing your maximum amount to an often overlooked employee benefit: after-tax 401k’s. Does this strategy apply to you? Let’s break it down with the long story. First, who does this strategy even apply to?  Anyone with access to make after-tax 401k contributions as an employee benefit or people not maximizing their contributions to the pre-tax 401k (check with human resources to find out if you are offered this benefit) ANDAnyone with long-term investments in a brokerage account Now that we’ve established the ‘who,’ let’s look at the what: But I can't save more money! The ‘money laundering’ strategy involves transferring funds from a taxable brokerage account into a 401k, but it's not a direct transfer because that isn’t permitted. In order to make contributions to a 401k (pre-tax, post-tax or after-tax), the money must come directly from your paycheck. But Mike, if I am transferring even more money from my paycheck into my 401k’s, how will I pay my mortgage and feed my kids? Good question. Here’s where the laundering happens.  Refer back to number two in the above “who” guidelines. That money sitting in the brokerage account gets transferred to your checking account for you to spend on your everyday life. The goal is to bridge the gap between contributions to the 401k and general budgeting, allowing for the full after-tax contributions to be made. Why bother with all these transfers? Why bother with this? Won’t you have to pay capital gains on the money taken out of your brokerage account? The answer is yes, but the benefit far outweighs the tax.  Let's take a look at the following chart to see the difference between that money staying in your brokerage account or growing tax-free as after-tax 401(k) contributions. Using the following assumptions, it is clear that choosing the right account type makes a significant impact on your overall savings. Compounding Growth: 6% Growth + 2% Dividends (8% total)Income Tax Bracket: 24%Capital Gains Tax Bracket: 15% YEARBROKERAGEAfter-Tax 401kAccount BalanceValue (After Tax)Account BalanceValue (After Tax0$30,000$30,000$30,000$30,00010$61,946$58,123$64,768$64,76820$127,911$116,193$139,829$139,829 ...

It’s that time of year when we all swear we are going to get to the gym more often, eat healthier, limit our time on social media, and make a better effort to stay in touch with family and friends. Looking ahead feels good, but how many times have you set those goals only to have abandoned them by January 31st?  In this year-end review episode, Matt Robison and I discuss looking back before you look forward. In particular, when examining your finances it is imperative to understand past actions in order to prepare for future financial decisions.  Let’s say last year at this time, you resolved to make exercise a priority for the New Year. If you are like most people, you probably stuck with it for a few days, maybe a few weeks, perhaps even a month but then it fell by the wayside. Did you ever stop to ask yourself why you were making the goal? To get healthier? Why did you not succeed? Was it the time commitment? The discomfort of sore muscles and stretched lungs? Looking at your past behavior can be the key to succeeding in future endeavors, including financial goals. Matt loves colorful metaphors. The best way to approach your year-end financial review is with a 💩 sandwich. Yes, you read that correctly. What are we talking about?  Figure out what you did well (your first slice of bread). Make the time to sit down and review your expenses. Look at your income sources over the year, including salary, investments, rental income, etc. Take a look at what you can improve (the 💩). How were your expenses this year? Examine your spending patterns and identify areas where expenses may have increased or decreased.How’s your debt? Assess your progress in debt reduction, including credit cards, mortgages, student loans, etc.Have you checked your portfolio lately? Evaluate the performance of stocks, mutual funds, retirement accounts, etc. Make progress and plan for moving forward (the last slice of bread). Be sure to look at all your employee benefits to take advantage of everything offered to you. Identify the positives and focus on consistency. Did you do one thing really well this year? Anyone can perform exceptionally once in a while. Consistency is what truly creates greatness. Take professional athletes, for example. All the best are the first in and last out because they play consistently. The best way for you to be financially consistent is to work on one thing at a time and do that job well. If it is budgeting, look at your past expenses, predict future spending, set limitations and stick to them every month. Achieving consistency will help you realize financial success.   Remember, look back before you look forward to enjoy a prosperous 2024.

IRAs: They can make you want to rolloverHost Matt Robison asks me this week about his rollover IRA. In an enlightening episode for us both, you will learn the ins and outs of Individual Retirement Accounts (IRAs) including the different types, rollovers, and the strategic moves you can make to optimize the tax benefits of these accounts. While I’d have thought the answers were all in the name, it turns out IRAs are not nearly as intuitive as I believed them to be.Individual Retirement Account: IRAThere are many different types of IRAs, from rollover to Roth, traditional to back door, and everything in between. The one key thing to remember is that they all share a common thread—they end in ‘IRA.’ Each Individual Retirement Account comes with its own set of rules for things like transfers, withdrawals, and contributions, and has its own tax implications. We’ve gone over these in previous episodes, such as the Clean Back Door IRA, Traditional vs. Roth, 529 to Roth, and the oldie but goodie SEP-IRA vs. Solo 401k.Consolides IRAs and 401(k) for SimplicityIn this episode, Matt shares his personal experience of rolling over an IRA from one financial institution to another. Seems like it would be a straightforward process, right? Not exactly. First, we talk about the challenges Matt faced as he attempted to ensure a successful rollover and then we dive into the importance of careful consideration when managing accounts tied to previous employers. So, where to begin? Consider consolidating multiple IRAs into a single rollover IRA for simplicity and ease of management. Do you have previous employer retirement accounts such as a 401(k) or 403(b)? You could also transfer those funds into one account so that you can maintain centralized control over older, tax-deferred funds. But be careful: there are reasons to leave them in that 401(k)! So make sure to consider the consequences (Clean Back Door Roth)Tax BenefitsSpeaking of taxes, IRAs are designed to give you tax benefits. That is why putting savings into these accounts, versus your checking, savings, and brokerage accounts is so important. Decide how much liquidity you need (for instance, an emergency fund) then put the rest in a place where it will make you more money.

If you’ve been a listener to this podcast for some time, you are likely well aware of the things to look for when hiring a financial planner.  However, your friends may not be.  If the topic of finances comes up, do the right thing: educate your friends and family on how to find a good advisor. What happens when you don't help your friends and family I recently had a client who came to me with a concern for a family member. Her cousin inherited a sizable sum of money and hired a financial advisor to assist with the logistics. My client expressed concern about a few aspects of the plan her cousin received, in particular, the number of life insurance policies she was encouraged to obtain, and did not understand some of the recommended investments. When it comes to Financial Advisors: Ask the Right Questions We talked about how my client could help her cousin with regard to asking the right questions of her new financial planner. This advice applies to anyone interested in obtaining financial services so I decided to share her story and a list of nine questions anyone should ask when hiring a financial advisor. I’ve also taken the liberty of including my answers as a reference point for any interview conducted with potential financial planners. 9 Questions to Ask When Interviewing a Potential Financial Advisor Are you a fiduciary? YES! I started my own Registered Investment Advisor (RIA) company, licensed in the states of MA, CA, and PA. These states require that I act as a fiduciary for my RIA and all my clients. What are your professional qualifications and credentials I am a Certified Financial Planner (CFP®), a Registered Life Planner (RLP®) and a Chartered Financial Counselor (ChFC®).When I started my RIA in 2018, I immediately enrolled in the CFP® curriculum. It took a few years to complete the required college-level courses, pass the comprehensive exam, and fulfill the work requirement (2-3 years of full-time work in the industry).I have also taken the required coursework for the Registered Life Planner in 2021 - a year of classes and work provided by the Kinder Institute. How are you paid? What are your fees and how are they structured (hourly, flat fee, percentage of assets under management)? Are there any additional costs I should be aware of? I typically work with new clients in a flat fee arrangement to provide comprehensive planning. You can always find the latest fees and services listed right on my website. This is a one-time fee to cover all the initial planning together.Often, clients will engage me to provide ongoing services. This service is also a flat-fee, yearly arrangement, based somewhat on net worth and paid monthly. Again, those transparent fees are listed on my website.There are no other fees paid to me. Sometimes I will recommend services that have associated costs (estate planning, tax preparation, life insurance, etc) - but I always let you know the potential costs of these services, paid directly to other professionals, with no commissions or incentives for me. How long have you been working as a financial advisor? What is your experience with clients in situations similar to mine? I started my own RIA in 2018 and have been working with clients in the years since. I primarily work with busy parents who want to get organized with their finances to ensure a successful future for themselves and their children. What is your investment philosophy? How do you select investments for your clients? Can you explain your approach to risk management? I believe in using low-cost index funds, in a mostly buy+hold approach, which involves...

10 Year-End Financial Moves  As the year draws to a close, it's crucial to take a closer look at your finances and ensure you're getting the most out of 2023. In this podcast episode, we've compiled a checklist of 10 financial considerations that can make a significant impact on your overall financial well-being. Listen to Matt and I discuss the following checklist (it is far more entertaining in audio!) and refer to the notes below to ensure you end the year strong.  ☑️ Maximize Retirement Contributions: Start by contributing as much as possible to retirement accounts such as 401(k), 403(b), IRA, and HSA. Not only does this help secure your future, but it also reduces taxable income, providing an immediate financial benefit. ☑️ Charitable Donations: Consider making contributions to qualified charities before the year ends to potentially benefit from tax deductions. It's a win-win situation—supporting a cause in which you believe and catching a break from Uncle Sam. ☑️ Prepay Deductible Expenses: If feasible, prepay deductible expenses like mortgage interest, property taxes, and other eligible costs before the year concludes. You could receive valuable deductions on your upcoming tax return (keeping in mind that you would not be able to take advantage of them for 2024). ☑️ Utilize Education Tax Benefits: Explore education-related tax benefits, including the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). These credits can provide substantial financial relief for qualified education expenses. ☑️ Review and Offset Investment Gains/Losses: Take a closer look at your investment portfolio. Consider offsetting gains with losses to potentially reduce your overall taxable income. Read more about this strategy in the Wall Street Journal. ☑️ Utilize Health Savings Accounts (HSAs): Maximize contributions to HSAs to reduce taxable income and cover medical expenses.  ☑️ Maximize Child and Dependent Care Credits: Ensure you've accounted for all eligible expenses related to child or dependent care for potential tax credits. This includes childcare costs, summer day camp expenses, after-school care, and contributions to a Dependent Care Flexible Spending Accounts (FSAs). ☑️ Evaluate Business...

Not your Father’s Personality TestThis week, Matt and I are joined by Registered Life Planner and former guest Andrea Miller, to delve into the fascinating world of Sparketypes. You’ve probably heard of the Myers-Briggs personality test developed in the 1920’s or the DISC assessment that followed two decades later, but the Sparketype tool is the first to come along in almost a century designed to help you identify “your unique, source code for work that makes you come alive, whether that gets deployed in your job or career, in your personal life, or on-the-side.” Andrea explains the essence of Sparketypes— a concept developed by Jonathan Fields, author of the 2021 Sparked: Discover Your Unique Imprint for Work that Makes You Come Alive. Unlike other personality assessments, Sparketypes focus on understanding what truly energizes and fulfills you, steering away from the complex jargon that often accompanies psychological frameworks.Start by taking the free online quiz to discover your Sparketype. This 10 to 15-minute survey provides you with two out of ten Sparketypes, your primary and shadow. Each Sparketype represents a unique aspect of your core nature. Why am I talking about a personality assessment on my finance podcast? Anyone who has worked with me knows that my approach to helping people set and obtain financial goals is about more than just numbers. Learning that I am a Sparketype Advisor allowed me to articulate why I love my job as much as I do, and I want to share that discovery with others. Learn your Sparketype today and let’s use that insight to create your ideal life.

The 60/40 401k Portfolio is Dead! 😯Are you one of the many who set up a 60/40 stock-bond split in your retirement portfolio, thinking it was the golden ticket to a worry-free retirement? Well, think again. Recent market events have signaled a paradigm shift, leaving the classic 60/40 401k portfolio gasping for breath.The Rise and Fall of the Classic PortfolioAccording to the Wall Street Journal (paywall), the classic 60/40 stock-bond split, comprising the S&P 500 index and 10-year Treasury notes, earned a respectable 15.3% in 2020. For decades, this strategy rode on 40 years of tailwinds from falling bond prices, offering investors a relatively smooth journey toward their retirement goals.However, the landscape drastically changed in 2022. For the first time in over 50 years, both stocks and bonds experienced a downturn. The culprit? Inflation! It turns out that the real killer isn't market crashes; it's the relentless rise in inflation that's wreaking havoc on traditional portfolios.Inflation has emerged as the silent enemy, eroding the purchasing power of your hard-earned savings. The 60/40 portfolio, once considered a stalwart, is now facing a wide range of outcomes. What worked for the past four decades may not necessarily be the silver bullet for the future.How can you learn from the past and protect your future?Don’t rely on market timing metrics: The attempt to time the market using metrics like CAPE10 or any other value-based indicator has proven futile. Studies show that trying to tilt your portfolio based on specific market values above or below a certain line is no more effective than blind luck.Rebalance: In times of uncertainty, it's essential to be adaptive. Instead of sticking rigidly to a pre-determined allocation, consider rebalancing your portfolio based on market conditions. Take what the market gives you and adjust your holdings accordingly.Build a War Chest: In the face of economic uncertainty, it's wise to hold a financial "war chest." This means having seven to ten years of spending set aside. This cushion can provide peace of mind, ensuring you have the financial flexibility to weather storms without compromising your long-term goals.Explore alternative investments: The Wall Street Journal suggests looking beyond the traditional. Small-capitalization, emerging-market, and value stocks offer the benefit of diversification at seemingly more affordable prices. This diversification can act as a safeguard against the challenges posed by a volatile market.The classic 60/40 401k portfolio may be on life support, but all is not lost. By adopting a flexible approach, avoiding market timing traps, and exploring alternative investments, you can navigate the turbulent waters of today's economic landscape. The key is to be proactive, stay

Cut the Cord on Cable and Streaming Services In the fast-paced world of entertainment, where streaming services have become the norm, the decision to cut the cord and bid farewell to traditional cable TV has become a common topic of discussion. But what about all those streaming services? The three-month free trial ends and suddenly you are paying $70/month to watch curling matches in some obscure Canadian village. You have a service for watching Marvel movies, one for sports, another for Ted Lasso…before you know it you are spending $3,600 a year on television!The escalating costs of streaming services has happened with inattentional blindness. With popular platforms like Disney+, Netflix, HBO, and Prime Video continuously raising their subscription fees, you may find yourself questioning the value of your entertainment expenses (or what those expenses amount to over the course of a month or a year). Subscription Streaming Services OverloadLet’s start with a simple question: How many services do you subscribe to? Not sure? You’re not alone! Many people experience difficulty keeping track of multiple subscriptions. As the number of available services grows, managing various accounts and remembering which shows or channels each one offers becomes increasingly overwhelming. To begin, go through your monthly account statements (credit cards, debit, etc.) and get a running list of all services you subscribe to and the cost of these services. If you use a budgeting platform such as Mint, check your “Entertainment” budget to see a list of your subscriptions. Once you have a handle on all your subscriptions, cancel them. You read that correctly. Go on a digital detox, live without streaming services for a while…a few days, a week, a month. Gradually reintroduce only the essential ones back into your life. There is no time like the present to reassess your entertainment needs and prioritize quality content over quantity.If cutting the cord completely is anxiety producing, use the following tips to pare down your subscription expenses:Evaluate your viewing habits: Identify the top shows or channels you regularly watch and find cost-effective ways to access them.Leverage family and friends: Explore sharing subscriptions with family and friends to optimize costs without compromising access to desired content.Stay vigilant with promotions: Be cautious about promotional deals and set reminders to cancel or renegotiate subscriptions before prices increase.Consider streaming platforms with bundled services: Explore platforms like YouTube TV, which offer bundled services, providing access to various channels at a more affordable rate.Check out NerdWallet and

Ongoing Pain in the Costs You’ve done the math, compared the options, and finally settled into your dream home. Or perhaps you’ve acquired that sleek, new car you always wanted. You know the one-time fee, but do you truly understand the ongoing cost? It's easy to overlook the continuous financial and time investments required for the maintenance of your possessions. Join Matt Robison and I this week as we delve into planning for the ‘not-so-one-off’ costs of upkeep. The dream of owning a home is often painted with idyllic scenes of family gatherings and cozy evenings by the fireplace. Yet, behind this picturesque facade lies the reality of constant maintenance. On average, home maintenance and upkeep can account for 1-2% of your home's value annually. Think about it - for every $100,000 your home is worth, you might spend $1,000 to $2,000 every year just to maintain its current condition. But it’s not just about money. It’s about time, too. The larger your home – in terms of lot size, square footage, and price – the more time it takes to manage it. Ignore it, and you might soon see your investment plummet in value. Consider the various components of your home that demand constant attention. From heating and cooling systems (furnace, dehumidifier, ducts, vents, AC unit, portable heaters) to electrical appliances (lights, outlets, generator, fridge, stove, microwave, dishwasher), plumbing (well pump, water filtration, sinks, faucets, toilets, copper plumbing), and the structural elements (roof, radon systems, vents, shingles, gutters), the list seems endless. if these items generally last around 25 years, you’re looking at potentially one significant replacement every year. It's a cycle that doesn’t end, and you need to plan accordingly. How to manage this pain in the wallet Understanding that every possession you acquire comes with an ongoing cost is the first step. Don’t let these expenses catch you off guard. Here are a few practical steps you can take: Budget Wisely: When you make a large purchase, factor in the ongoing costs of maintenance and repairs. Create a budget that accounts for these expenses.Educate Yourself: Learn the basics of home and car maintenance. Small repairs that you can handle yourself can save you both time and money.Regular Inspections: Conduct regular inspections of your home and car to catch potential issues early. Preventive maintenance often costs less than emergency repairs.Emergency Fund: Have an emergency fund set aside specifically for unexpected repairs and maintenance.Get Professional Help: Don’t hesitate to call in professionals when needed. While it might seem costly upfront, it can save you from more extensive and expensive repairs down the line. It is essential to recognize the ongoing responsibilities and costs that come with one-time purchases. By understanding and preparing for the continuous costs – both in terms of money and time – you can enjoy your investments without the constant stress of unexpected expenses. Expect...

“For every minute spent organizing, an hour is earned.” - Anonymous You’re organized, right? You made an estate plan…set-up guardians for your kids, named beneficiaries in your will. Everything will go as smooth as butter should you meet your ultimate demise, yes? Maybe, but maybe not. The best way to ensure everything goes according to your plans is to get organized. Creating an assets and liabilities spreadsheet, while tedious, will help you and your loved ones navigate your financial wishes in the event of your incapacitation or death. How will a spreadsheet make the process easier? Let’s use a real client example to highlight the use case: I have a client, we’ll call her Amanda, that I’ve been working with for years. Amanda’s mother passed away two years ago, not unexpectedly. She had two children, Amanda and her brother and had remarried and acquired three step-children. She worked her entire life, leaving behind some assets in trust and a will to assign her retirement accounts and two businesses to her beneficiaries. While it may seem as though Amanda’s mother had her plan carefully arranged, it turns out that asset allocations were a lot trickier than anticipated. The plan was to give her retirement account, valued at $1 million to Amanda and her brother to split. The two businesses were valued at $500k each. $100k was set to be given to each step-child from that while the other $700k was to go to her widowed husband. Unfortunately, the businesses were not worth $500k each, making the distribution of funds a nightmare for her survivors. Had the assets been accounted for prior to her death, the plan could have been reevaluated without the tremendous effort and headache left for Amanda to deal with upon her passing. What can you learn from Amanda’s story? First, take the time to create an asset and liability spreadsheet to include all of your accounts and where they are held.   👉  Here's a handy template to get you started! Next, use that spreadsheet to review all your beneficiary forms for each account. Why is this important? The Wall Street Journal recently published an article explaining how different states have different rules for beneficiaries. For instance, if you name your eldest child the beneficiary of your 401(k), but then get married, the beneficiary automatically changes to your spouse, even if you later divorce that person. How do you keep it all straight? Via an asset and liability spreadsheet review completed yearly.  It may take you thirty minutes to prepare an itemized list of all your accounts and beneficiaries but it will save you and your loved ones hours of trying to organize everything in the event of an emergency or death.

What if I told you that you could be paying thousands of dollars in unnecessary taxes every year on your savings? You might think I have some savvy financial trick up my sleeve to save you from Uncle Sam, but the opposite is actually true. In this episode, it's all about the basics. Basic account types, that is: The Three Musketeers: Taxable, Tax Deferred, and Tax Free   Taxable Accounts: The Draining Leak in Your Pocket Taxable accounts include your checking, savings, and brokerage accounts. The unfortunate characteristic of these accounts is that every year, like clockwork, a portion of your hard-earned money gets siphoned off to pay taxes. Imagine this as a leak in your financial bucket, slowly draining your resources.   Tax Deferred Accounts: Delayed Taxation With these types of accounts, you haven't paid taxes on the money yet. Think of traditional 401(k)s, IRAs, and similar accounts. While it might seem like you've got a pot of gold, remember, a chunk of that treasure belongs to the government. You're merely holding it in trust until the taxman comes knocking.   Tax Free Accounts: The Holy Grail These accounts are the gems of the financial world. Once you've paid your taxes, your money gets to grow, flourish, and multiply without being haunted by the specter of taxation. Roth accounts, such as Roth 401(k)s, Roth IRAs, 529’s and the beloved Health Savings Accounts (HSAs), fall into this category. Once you've entered the realm of tax free accounts, you've found the holy grail of personal finance—a place where your money can thrive without the relentless bite of taxes.   Which is Best? In the world of finance, understanding these account types is akin to wielding a shield against the ever-present taxman. By choosing the right account types, you can strategize and minimize the amount you pay in taxes, leaving more money in your pocket.   Let's Review an Example To drive this point home, consider the following real-client scenario: Joe (not his real name) is a diligent saver with most of his funds parked in his brokerage account. While he had managed to save, he hadn't optimized where he was putting that money. A large portion of his savings sat in taxable territory, meaning he was hemorrhaging money in taxes every year. The story of Joe is not uncommon. Many individuals find themselves in similar situations, unknowingly losing substantial amounts to taxes, all due to a lack of understanding about account types. Need more convincing? Take a look at the following chart to see the difference between taxable, tax deferred and tax free accounts. Using the following assumptions, it is clear that choosing the right account type makes a significant impact on your overall savings. Compounding Growth: 6% Growth + 2% Dividends (8% total)Income Tax Bracket: 24%Capital Gains Tax Bracket: 15%   ROTH 401kTraditional 401kBrokerageYearBrokerageRoth 401kBrokerageTraditional 401kBrokerageTraditional 401k0$4,600$22,500$10,000$22,500$27,100$01$4,946$24,300$10,752$24,300$29,138$02$5,318$26,244$11,561$26,244$31,329$03$5,718$28,344$12,430$28,344$33,685$04$6,148$30,611$13,365...