Murphy’s Law is Expensive

One of the most critical factors of long-term personal financial success is… guess:

  1. The markets
  2. Spending
  3. Interest rates
  4. Stock selection
  5. Income level

And the answer is… SPENDING. This fact is why a truly competent financial planner will spend the most time on discussing spending, both today and future projected, along with GOALS (Goals are what people spend money on).

Things can go wrong at any time, therefore, count on one or more things going badly wrong along the course of a person’s life and financial life.

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Buy Dirt

In keeping with the theme that life is precious and worth planning for – enjoy this quick and meaningful tune. Do not hesitate to crank it up and play it several times to capture all the words.

Watch Jordan Davis – “Buy Dirt” (Official Audio) ft. Luke Bryan” on YouTube.

Thank you for reading AND listening… and of course TGIF!

Is NOW a Good Time to Invest?

The original title of this edition of TGIF 2 Minutes was “Remember Brexit?” The reason that seemed appropriate is because recently and often during client reviews, conversations with potential new clients and from friends I am hearing the question, “Is NOW a good time to invest?” The slew of events that occurred in late 2020 and so far in 2021 have led both new and experienced investors to question the timing of investing new monies today.

Looking at the chart below*, there are events since 1970 and as recent as Brexit in 2016 that posed immense uncertainty and likely the same question. In fact, the chart illustrates the TEN YEARS from 2000-2010 dubbed “the lost decade”.

*Please ask for a copy of the PDF to view or zoom in.

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Getting a New Car

There are few things as exciting as getting a new car: the “new car smell,” the test drive, the sound system, sunroof, heated seats… the feeling of “everything is new.” And these days, cars are advanced computers on wheels (and that means even the non-self-driving kind).

With that said, yours truly recently bought a new car – the first new car in 15 years! The old 2005 (Certified Pre-Owned) B-mer went 180k miles and could have gone another 100k but with a bit of maintenance here and there. Time for a new vehicle. But what new car to buy? New or used? Sedan or SUV? Buy or lease? And the cost: go expensive or reasonable in cost?

Any major purchase – housing, appliances, transportation, kids’ education, and the like – needs to be evaluated both from a financial and emotional perspective.

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Personal Board of Directors

As has been said, “No man [or woman] is an island.” The deeper meaning of the famous poem by this title may be somewhat philosophical: that we are all part of a bigger unit such as the world, a country, a family, or something. The less deep but equally serious meaning is more like,

  • why go it alone?
  • try reaching out to others from time to time to seek advice and larger perspective.

Regular readers of TGIF 2 Minutes may be thinking that Debbs has lost her mind here but the related idea of having a “Personal Board of Directors” has been worthy of featuring for some time. Coincidentally Brett Danko, my business partner and the principal and founder of Main Street Financial Solutions LLC, recently presented a similar topic including having and regularly consulting with a Personal Board of Directors which inspired this edition.

The Personal Board of Directors can be consulted regarding decisions of all sorts – personal, financial, and professional.

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CYA – But it’s Not What You Think!

This week brought long-awaited although not unexpected news from the US Federal Reserve Board: Fed officials expect to raise interest rates from the current level of “near zero” by the end of 2023 instead of sometime in 2024. Earth-shattering? NO. Cause for paying attention? YES. Even though 2023 seems fairly distant, interest rates have already begun to increase. It is not too early to pay attention to, review, and understand your overall Asset Allocation. Thus, today’s title, “CYA”. Cover Your Asset Allocation.

As quick background, the US Federal Reserve System, or the “Fed”, has as its mandate to maximize US employment and allow for stable prices. Its primary tool for accomplishing these goals is the setting of short-term interest rates – which then translate into to interest rates for anything from 30-day Treasury bills to 10-year Treasury notes, to 15- and 30-year mortgages. Even debt issued globally watches the Fed’s interest rate policy.

Fed officials expect to raise interest rates by 2023. It is not too early to pay attention to, review, and understand your overall Asset Allocation.

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Last Year’s Paycheck

Believe it or not, lots of people do not know how much they get paid. That is, in terms of total compensation. Of course, there are that handful of people who know exactly what they make – and most people know precisely their “net pay” that gets deposited into their bank account periodically. But in my years of discussing total compensation with my clients (who typically make a fair amount of money) a great deal of the time they do not know accurately enough how much they made in a given year.

Believe it or not, lots of people do not know how much they get paid.

January is an ideal time to take a closer look at a print-out of last year’s year-end pay stub to learn valuable details and information. Why is this important?

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Leap of Faith

These are trying times. Despite the strains of pandemic, home schooling, work furloughs, and entire families sitting at dining room tables on laptops… there are still BIG decisions and “leaps of faith” to be made. Namely,

  • Annual Healthcare Enrollment (deadlines looming)
  • 401k contributions by year-end amidst a year of zany cash flows
  • Kids’ high school enrollments (these have changed for lots of people)
  • College semester enrollment and tuition payments
  • Home improvements like, “Do I add a home office?”… and more.
  • Don’t even get me started on – “Do I know who my beneficiaries are?” or “When do I start taking Social Security?”

This is nuts!

Take the time to become informed in order to make proper leaps of faith where needed or to stay put where necessary.

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Biggest Losers

Upon recently personally experiencing the multiple shocks of:

  • Minimal amounts of people at rush hour in one of the typically busiest cities and train stations in the world,
  • Open parking spaces and empty parking lots at one of the busiest train lines in the world,
  • No lines at Starbucks in the typically busiest city in the world…

… I started thinking bigger-picture about who will be most deeply affected in the intermediate-term by the virus pandemic and the resulting slow-downs, shut-downs, cuts, and service eliminations. Near the top of the list of business types and job types negatively affected are (obviously),

  • Restaurants and their owners
  • Airlines
  • Commercial real estate property owners
  • Business conference managers
  • …the list goes on.
New York Penn Station at the morning “rush hour”, October 2, 2020.ation at “rush hour”

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Jobs In Demand

From an edition of TGIF 2 Minutes in early March 2020….

As we continue to watch both from the sidelines and the interior of the Coronavirus tragedy, there exist lessons learned and lessons yet to be learned. Mistakes made past and present. In looking at history and researching the aftermath of past global tragedies there is evidence of subsequent innovations along with lucky breaks that surpass the imagination.

Photo by ELEVATE on Pexels.comLogistics may be an under-rated career – perhaps never as valuable as today. And certainly, fairly recession-proof.
Photo by ELEVATE on Pexels.com

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