Wisdom On Wealth

CafeCredit.com / Flickr.com https://tinyurl.com/y56unpze

How much money should keep on hand in the bank? And what if that money doesn’t earn very much while it’s there?

One of the first recommendations I often make to new clients is that they stuff some money in a boring old bank account, ignore the interest rate the bank is paying and see even a 0% paying account… for the wonderful wealth building opportunity it can be.

How much should you have? I often hear three months’ worth of your spending.

Mike Lawrence / Flickr.com https://tinyurl.com/y4xglkbh

How do you teach your children about money?

First, remember that a little bit goes a long way in this area with children.

When they are young (pre-school, early elementary), keep it simple and concrete. They will likely have a very limited appreciation for the concept of money, so teach them a few basics that will carry over as they get older.

Fouquier ॐ / https://tinyurl.com/y3slryav

We need to talk about the retirement smile.

I’m not talking about that silly grin you daydream about having the day you walk out of your office for the last time. More on that in a moment.

You want to plan for an enjoyable period of retirement, and we all instinctively know that we’ll be in the best physical (and perhaps mental) condition to enjoy those years earlier in our retirement. 

GotCredit / FlickR.com https://tinyurl.com/y4e9jbn9

I’ll never forget the guy who told me he paid all of his earned income to the IRS in taxes. At first, I laughed it off internally, assuming he was mistaken or exaggerating, but he wasn’t.;

I found out his tax bill was literally the same number as his entire earned income! How could that be? What I discovered was that he was a victim of his own success.

The first thing to understand is that all of us are taxed by the federal, state and local governments in several different ways.

GotCredit / FlickR.com https://tinyurl.com/y6thldq9

Here’s a situation I see too often - a young adult child runs up a credit card bill. Mom and Dad find out and learn that the interest rate is outrageous. Then they come to me asking how can I help him transfer the balance to another card with lower interest?

My question is, “Why would you want to do that?”

The answer usually involves high interest rates being wasteful, etc. OK, we can agree on that.

GotCredit / FlickR.com https://tinyurl.com/y68uojek

“Barn, lemmie tell ya. I don’t want to make my kids rich.” 

I’ve had countless men (it’s usually men) say those very words to me. So much so I can almost see it coming and mouth the words as they are being spoken. 

But before just accepting that statement on face value, I like to ask a few clarifying questions.

“So if you had $100 million or more than you could ever spend, you’re saying you would not want to leave any of that to your kids?”

University of Essex . / FlickrR.com https://tinyurl.com/y5eqvgys

We’ve just graduated a fresh crop of high schoolers and college students. This time of year, I’m often asked the best way for a young person to get a solid start financially. 

Here are four rules any young person can follow to get off on the right foot:

1. Control yourself. The first step in getting a healthy financial start is habits. Habits are a lot like getting in good physical shape. The hardest part is the beginning. There’s a lot of pain, agony and discomfort. But after the initial phase, you notice it gets easier and easier. 

Frozen by Fear

Jun 26, 2019
Marco Nedermeijer / FlickR.com https://tinyurl.com/y2qaea29

When someone has experienced significant tragedy or trauma in their life, they oftenare surprised by how long the fear lasts.  

C.S. Lewis wrote after he lost his wife how surprised he was to find that grief feels a lot like fear. And fear can literally freeze you. And if that’s the case for you, you may need both a plan and a person.

First, for anyone dealing with loss, trauma or tragedy, my heart goes out to you. Sometimes there is nothing more I can say but, “That must be really hard.” Because it is.

Mike Lawrence / FlickR.com https://tinyurl.com/y3pgjadj

If you want a plan for your money, get a plan for your life.

A life plan is like a flight plan for an airplane – it gives direction. It is also like a nation’s constitution, expressing the values important to that nation, and building laws to reflect those values.

Once your life plan is in place, your financial plan can then be a natural reflection of your values. Suddenly, it can all “make sense,” since you now can see the bigger picture and the longer term.

401(K) 2012 / Flickr.com https://tinyurl.com/y2osszzj

When you do a financial plan, where do you start?

Do you fund your retirement first or get out of debt? Is trying to save on taxes part of it? One marriage partner thinks you spend too much money on insurance, while the other worries that they are not sufficiently protected.

It can feel like you’re all over the map!

So back to the original question - where should we start?

My answer is to start with the most important thing – to you.

It is my contention that (1) you already have a financial plan, and (2) your plan is built around priorities.