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How To Retire With Less

How To Retire With Less

If you had to totally trash your retirement strategy, how would you do it?

There are plenty of extravagant solutions—a gambling spree in Vegas, buying a boat, or shopping only at designer stores would probably do the trick!

But there are less obvious ways to retire with less. There are subtle misteps that may not lead to financial trainwrecks, but may still result in retiring with less. Here are a few!

Never start saving for retirement. The same is true for every undertaking. The easiest way to torpedo your music career? Never practice. It’s unwise to expect your retirement to be financially sound if you don’t start preparing and saving for it today. Starting is the most important step in your journey!

Buy a house you can’t afford. Few things will consume your cash flow and ability to build wealth more than a house that’s out of your budget. Mortgage payments, emergency repairs, and renovations can be costly even after extensive planning and saving. These expenses can scuttle your ability to build wealth if you end up becoming “house poor”.

Buy things you don’t need. Make no mistake—there’s a place for splurging and treating yourself. But there’s a point where buying more stuff simply weighs you down, both emotionally and financially. And if you’re using debt to keep shopping, you might be setting yourself up for less in retirement.

Be afraid of change. It’s incredibly difficult to pursue better opportunities if you fear change. Improving your financial situation, by definition, requires you to do something different, whether it’s spending less or changing careers. Unless you’re already on track for retirement, a fear of change can hinder your ability to reach your goals and live your dreams.

Never learn how money works. This is the easiest item on the list to avoid. Most people are never taught what their money can actually do and how to build wealth. But it can have serious consequences for your future. Not knowing how money works can prevent you from using critical tools like the Rule of 72 and the Power of Compound Interest to detect both bad deals and wealth building opportunities.

If any of these rung a bell with you, contact me. We can discuss strategies to start preparing for retirement, cut your spending, and find opportunities to increase your income!


How Can Graduates Start Building Wealth?

How Can Graduates Start Building Wealth?

If you’re a recent graduate, congratulations! You made it.

Your degree is in your hands and the world is now your oyster. If there’s one thing you should know, it’s that life after graduation isn’t all about partying with friends and family until next summer rolls around again. No, it’s time to start building wealth!

That’s because you have a secret weapon at your disposal—time.

Your money has the potential to grow via the power of compound interest. The longer your savings accrue interest, the more potential they have to grow.

Let’s say you’re 22 and fresh out of college. You’re able to save just $160 monthly in an account earning 9% interest. After 45 years, you would have grown over $1 million!

And, as your income rises, you can increase your savings rate and level up your goals.

But how can you save $160 per month?

It’s pretty straightforward—you should at least implement a budget ASAP, and maybe even start up a side gig. These are simple ways to decrease unnecessary spending and earn more money that can go towards wealth building.

If you want to learn more about building wealth reach out to financial professional you trust and schedule an appointment! They may have the knowledge and expertise to help you start on the path towards financial indepedence.


5 Common Financial Mistakes That Parents Make

5 Common Financial Mistakes That Parents Make

It happens every day. Parents make financial blunders that can impact their children’s future.

These mistakes are often avoidable. But a parent who has the best intentions and lacks the knowledge needed to properly manage their finances may not recognize these errors until the damage has been done.

Here are 5 common financial mistakes every parent should be aware of!

1. Not saving for their children’s education. You know the numbers—it seems higher education is growing more and more expensive every year. So the time to start financially preparing for your child’s university years is today. Meet with a financial professional to discuss how you can pay for college without resorting to student loans!

2. Not saving for retirement. Skimping on your long-term savings might be tempting, especially if your budget feels stretched to the breaking point by the basic expenses of providing for your family!

But saving can support your long-term financial position. It gives you a shot to pay for your own retirement, it can reduce the impact of long-term care on your family, and it might even create a financial legacy to leave to your children.

3. Spending too much on credit cards. It’s not just parents. Many Americans overuse their credit cards. But it can be a little too easy to do for parents on tight budgets. Don’t have enough in cash to buy your child a new toy? Just put it on the card!

Unfortunately, credit cards can become a significant drain on your cash flow. And the less available cash you have on hand, the less you’ll be able to save for your other financial goals!

4. Buying a house they can’t afford. Make no mistake—your family needs space. You need space! Just make sure that the house you buy is actually within your budget. Mortgage payments can chip away at your cash flow and reduce your wealth building and education funding power. And don’t forget to factor in the cost of house maintenance before you move in.

5. Buying things they don’t need to impress other parents. You love your kids and want the best for them. That’s what makes you a great parent!

But be mindful of why you buy things for your family. Are you providing for your kids? Or are you simply trying to impress your friends and neighbors? Take care that you put the wellbeing of your family first, not the opinions of others.

If you need help navigating your financial responsibilities, contact me! We can discuss strategies that might give your family the upper hand they need to thrive.


Step by Step Guide to Creating Your Budget

Step by Step Guide to Creating Your Budget

Creating a budget doesn’t have to be confusing!

In fact, it can be a straightforward—and profoundly enlightening—exercise that reveals your available cash flow and where you can reduce spending.

Here’s your step by step guide to creating a simple budget!

Get a pen and paper (or laptop). You’ll need a place to write and crunch a few simple numbers. If you’re “old school”, a pen, piece of paper, and a calculator will work perfectly. But you can also use a text document or spreadsheet if you’d rather!

Also, consider using a budgeting app. They’re simple tools right on your phone that you can use to track your income and outgo.

Make a list of all your monthly expenses, including housing, utilities, groceries, and transportation. Then, log in to your online banking account. You should be able to determine your average monthly spending in all of your expense categories. Write down those numbers in your budget.

Add up how much you spend in each category. That’s your total average monthly spending!

Then, subtract that number from your income to calculate your average available cash flow. That’s how much money you have leftover each month to tackle debt, save for emergencies, or use to start building wealth.

If it’s a smaller number than you expected, it’s ok. You’ve taken a very important step to face reality and move forward financially! You now know what you’re spending each month, and on what. Look at categories like entertainment and dining out. Can you reduce your monthly spending in these areas?

If your budget is tight and cash still isn’t flowing as freely as you’d like, you may need to consider starting a side hustle or part-time business to help make up the difference.

Ask me if you need help constructing your budget. It’s a simple process that can seriously improve your financial wellness.


3 Simple Steps to Prepare for Retirement

3 Simple Steps to Prepare for Retirement

Are you intimidated by the prospect of saving for retirement?

It may not be as daunting as you might think. In fact, there are simple steps you can take today that can help position you to retire with the wealth you desire.

Pay yourself first. It’s simple—schedule a recurring transfer to your retirement savings account when you get your paycheck. This transforms building wealth for your future into an effortless process that occurs without your even thinking about it.

Save your bonuses. Unexpected windfalls are exciting! But don’t forget to pause for a moment before you take off for the Bahamas. If you hadn’t gotten that bonus, would your life and your current financial strategy still be the same as it was last week? Consider putting (most of) that extra money away for later, and using a fraction of it for fun!

Reduce your debt. Credit cards and any high interest loans are the first priority when retiring debt—so that you can retire too someday! Do you really know how much you’re paying in interest each month? (Once you know this number, you can’t “unknow” it.) But take heart! Use this as a powerful incentive to pay those balances off as quickly as you can.

Every month you chip away at your debt, you’ll owe less and pay less in interest. (You’ll feel better too.) And you know what to do with the leftover money since you knocked out that debt. Hint: Save it.

But keep this in mind—life is about balance. It’s okay to treat yourself once in a while. Just make sure to pay yourself first now, so you can REALLY treat yourself later in retirement.


How You Can Make Money By Thrifting

How You Can Make Money By Thrifting

Thrifting doesn’t just save you money—it can make you money, too.

Here’s how that works. Items are typically cheaper in thrift stores and flea markets than they are online. That means there’s potential to make a handsome profit if you buy something at a thrift store and then sell it on a digital marketplace.

Let’s look at an example…

You notice an item at your local thrift store that you’re certain sells online for about $60. You check the price tag—it’s only $5. You buy it and make a listing on your favorite digital marketplace. It sells! Let’s say shipping costs and selling fees are also $5 each. Your net profit is $45. You’ve made back triple the cost of your initial investment and business expenses.

It’s a simple, elegant, and fun business model that can potentially generate extra cash flow.

If you decide to start a thrifting business, consider these tips to maximize your profits!

Start at home. Before you send something to a landfill or thrift store, search for it on an online marketplace. You might be surprised how much of your “trash” is actually treasure! Make no mistake—some items aren’t worth your time salvaging and selling. But if you have clothes, toys, and books that are in good condition, consider listing them online and see what happens!

Scout out the right locations. Whenever possible, shop at thrift stores in wealthier neighborhoods. They’ll typically have higher-end products that fetch better prices. Also, consider using an app like Nextdoor to monitor local garage and estate sales—those are where you’ll find the real treasures at potentially deep discounts.

Prioritize the right items. Not all resale items are created equal. Books, textbooks, picture frames, and designer clothes tend to have strong returns. But always check the price of an item on eBay or another online marketplace before you buy it.

Buff up what you buy. Before you buy anything from a second-hand vendor, check it for damage or blemishes, but don’t be put off by surface-level issues. You might be surprised at how many items are simple to repair, fix, or clean. Putting in a little elbow grease may substantially boost the selling price.

Remember to have fun while you’re thrifting. The beauty of the reselling business is that it allows you to make money and enjoy a hobby at the same time. It’s perfectly fine if you don’t walk out with an incredible find. Embrace the process, see what’s out there, and make some extra cash while you’re at it!


Are Subscriptions Reducing Your Cash Flow?

Are Subscriptions Reducing Your Cash Flow?

Most Americans don’t know the cost of their subscriptions. Are you one of them?

A recent survey revealed that 83% of respondents underestimated their subscription spending by a wide margin.¹ On average, they thought subscriptions only cost them $80 per month. In reality, it was over $230.

That was back in 2018. Since the COVID-19 Pandemic started in 2020, that number has dramatically increased. A 2020 survey discovered that, on average, consumers added $192 in new subscriptions after lock downs started.²

The takeaway? Subscriptions might be consuming more of your cash flow than you realize.

Scroll through the apps on your phone. Are there streaming, dating, or wellness subscriptions that you pay for but never use? Unsubscribe and uninstall them!

If you and your family regularly use a streaming service, consider cancelling your cable subscription. They’re expensive, and your streaming services probably carry your favorite shows as it is.

It’s also worth investigating the value of any subscription boxes you receive. Is a monthly shipment of makeup or comic books significantly improving your life? Or do most of the items go unused? If the latter is true, consider cancelling your subscription.

Once you’ve cleared out unnecessary subscriptions, you might be surprised by how much cash flow you’ve freed up for reducing debt or building wealth.

¹ “You probably spend more on subscriptions than you realize,” Angela Moscaritolo, Mashable, Feb 20, 2019, https://mashable.com/article/you-probably-spend-more-on-subscriptions-that-you-realize/

² “Americans More Than Tripled Subscription Service Spending Amid Social Distancing,” David Dykes, Greenville Business Magazine, May 14, 2020, http://www.greenvillebusinessmag.com/2020/05/14/308970/americans-more-than-tripled-subscription-service-spending-amid-social-distancing


Savings Rates Need Some Serious Saving

Savings Rates Need Some Serious Saving

Ever hear the old story of the 7 years of plenty followed by 7 years of famine?

In the years when there was an abundance of crops, it was wise to store up as much as possible in preparation for the years of famine. However, if instead of saving you ate it all up during the 7 years of abundance, the result would be starvation for you and your family during the 7 lean years. This might be an extreme example in our modern, First World society, but are you “eating it all up” now and not storing enough away for your retirement?

The definition of retirement we’ll be using is: “An indefinite period in which one is no longer actively producing income but rather relies on income generated from pensions and/or personal savings.”

According to this definition, the “years of plenty” would be the years that you are still working and generating income. While you still have regular income, you can set aside a portion of it to save for retirement. This amount is called the “Personal Savings Rate.”

According to the latest statistics, the monthly personal savings rate for Americans is approximately 13.6% of their income.¹ For much of the past decade it’s hovered around 7% to 8%, briefly spiking during the first months of the COVID-19 Pandemic to over 30%.

Suppose you’re looking to retire for at least 10 years (e.g., from 65 years old to 75 years old). Even if you’re planning to live on only half of the income that you were making prior to retirement, you would need to save up 5 years worth of income to last for the 10 years of your retirement. Just raw saving at average rate without the power of interest would take years before it became the wealth most people need to retire.

So unless you’ve found the elixir of everlasting life, we’re going to need to do some serious “saving” of the personal savings rate. Is there a solution to this dilemma? Yes. If you’re looking for possible ways to store up and prepare for your retirement, I’d be happy to have that conversation with you today.

¹ “Personal Saving Rate,” U.S. Bureau of Economic Analysis, Federal Reserve Bank of St. Louis, Nov 25, 2020, http://bit.ly/2qSGrR3.


How to Make the Most of Your First Job

How to Make the Most of Your First Job

So you’ve just started your first job. Congratulations!

Whether you’re a highschool student working a cash register or a fresh-out-of-college graduate who just landed a cubicle, a first job often comes with a steep learning curve. But don’t let that weigh you down! This is your once in a lifetime opportunity to start your financial journey strong and develop skills that will last you throughout your career.

Here are two simple steps you can take to make the most of your first job.

Start saving.
A first paycheck is a magical thing. It makes you feel like the hard work has finally paid off and you’re a real adult. You might just become unstoppable now that you’ve got a regular income!

But that empowerment will be fleeting if you spend everything you earn.

It’s absolutely critical that you begin saving money the moment your first paycheck arrives. This practice will go far in establishing healthy money habits that can last a lifetime. Plus, the sooner you start saving, the more time your money has to grow via compound interest. What seems like a pittance today can grow into the foundation of your future wealth if you steward it properly!

Evaluate your performance.
There’s much that you can learn about yourself by studying your job performance. You’ll get an idea of strengths that you can leverage and weaknesses that you need to work on.

But most importantly, you might discover moments when you’re “in the zone”. You’ll know what that means when you feel it. Time slows down (or speeds up), you’re totally focused on the task at hand, and you’re having fun.

That feeling is like a compass. It helps point you in the direction of what you’re supposed to do with your life. Do you get in the zone when you’re working on a certain task? With a group of people? Helping others succeed? Pay close attention to when you’re feeling energized at work and delivering quality results… and when you’re not!

Above all, keep an open mind. Your first job might introduce a passion you’ll pursue for the rest of your life… or it might not. And that’s okay! Whatever it is and wherever it leads, be sure to save as much as you can and to pay attention to what you like. You’ll be better positioned both financially and personally to pursue your dreams when the time comes to make your next move!



3 Ways to Teach Your Children How to Save

3 Ways to Teach Your Children How to Save

A study discovered that most children have established their money habits by age 7.¹

Before they might know what a 401(k) or mortgage even are, their financial future is already starting to take shape. It’s never too early to teach your kids the wisdom of budgeting, limiting their spending, and paying themselves first. So the sooner you can instill those lessons, the deeper they’ll sink in!

Fortunately, teaching your kids about saving is quite simple. Here are two common-sense strategies that can help you instill financial wisdom in your children from the moment they can tell a dollar from a dime!

Give your child an allowance
The easiest way for your child to learn how money works is actually for them to have money. If it’s within your budget, set up a system for your child to earn an allowance. The more closely it relates to their work, the better. Set up a list of family chores that are mandatory, and then come up with some jobs and projects around the house that pay different amounts.

What does this have to do with saving? The simple fact is that spending money you receive as a gift can feel totally different than spending money that you earn. Teaching your children the connection between work and money instills a sense of the value of their time and that spending isn’t something to be taken lightly!

Teach your child how to budget
Budgeting is one of the most essential life skills your child will ever learn. And there’s no better time for them to start learning the difference between saving and spending than now! The same study that revealed children solidify their spending habits at age 7 also suggested they can grasp basic financial concepts by age 3!

So when your kid earns that first 5 dollar bill for working in the yard, help them figure out what to do with it! Encourage them to set aside a portion of what they earn in a place where it will grow via compound interest. Explain that the longer their money compounds, the more potential it has to grow! If they’re natural spenders, help them determine how long it will take them to save up enough to buy the new toy or game they want and that it’s worth the wait.

Start saving for yourself
Remember this–the most important lessons you teach your children are unconscious. Your kids are smart. They watch everything you do. Relentlessly enforce spending limits on your kids but splurge on a vacation or new car? They’ll notice. That’s why one of the most critical means of teaching your kids how to save is to establish a savings strategy yourself. When you make and review your monthly budget, invite the kids to join! When they ask why you haven’t gone on vacation abroad for a while, calmly inform them that it’s not in the family budget right now. Model wise financial decision making, and your children will be far more receptive to learning how money works for themselves!

The time to start teaching your kids how to save is today. Whether they’re 2, 8, or 18, offer them opportunities to work so they can earn some money and give them the knowledge and resources they need to use it wisely. And the sooner your kids discover concepts like the power of compound interest and the time value of money, the more potential they have to transform what they earn into a foundation for future wealth.

“The 5 Most Important Money Lessons To Teach Your Kids,” Laura Shin, Forbes, Oct 15, 2013, https://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/?sh=2c01a4956826


Set Yourself Up For (Financial) Success In The New Year

Set Yourself Up For (Financial) Success In The New Year

A new year is a massive opportunity.

There’s something liberating about closing one chapter of your life and beginning a new one. You realize that this year doesn’t have to be like last year, and that there are countless possibilities for growth.

Now is the perfect time to write a new financial chapter of your life.

In the mindset of new beginnings, the first thing is to forgive yourself for the mistakes of the past and start fresh. Now is your chance to set yourself up for financial success this year and potentially for years to come. Here are three simple steps you can take starting January 1st that might make this new chapter of your life the best one yet!

Automate wise money decisions ASAP
What if there were a way to go to the gym once that somehow made you steadily stronger throughout the year? One workout would be all you need to achieve your lifting goals!

That’s exactly what automating savings and bill payments does for your finances.

All you have to do is determine how much you want to save and where, set up automatic deposits, and watch your savings grow. It’s like making a year’s worth of wise financial decisions in one fell swoop!

Give your debt the cold shoulder
Debt doesn’t have to dictate your story in the new year. You can reclaim your cash flow from monthly payments and devote it to building wealth. Resolve to reduce how much you owe over the next 12 months, and then implement one of these two powerful debt strategies…

Arrange your debts on a sheet of paper, starting with the highest interest rate and working down. Direct as much financial firepower as you can at that first debt. Once you’ve cleared it, use the extra resources you’ve freed up to crush the next one even faster. This strategy is called the Debt Avalanche.

-Or-

Arrange your debts on a sheet paper, starting with the smallest debt and working up to the largest. Eliminate the smallest debt first and then work up to the largest debt. This is called the Debt Snowball. It can be a slower strategy over the long-haul, but it can sometimes provide more motivation to keep going because you’re knocking out smaller goals faster.

Start a side hustle
You might not have thought much about this before, but you may have what it takes to create a successful side hustle. Just take a moment and think about your hobbies and skills. Love playing guitar? Start teaching lessons, or see if you can start gigging at weddings or events. Are you an embroidery master? Start selling your creations online. Your potential to transform your existing talents into income streams is only limited by your imagination!

Start this new year strong. Automate a year’s worth of wise financial decisions ASAP, and then evaluate what your next steps should be. You may even want to meet with a qualified and licensed financial professional to help you uncover strategies and techniques that can further reduce your debt and increase your cash flow. Whatever you choose, you’ll have set yourself up for a year full of potential for financial success!


Why Losing Money Is Bad For Your Health

Why Losing Money Is Bad For Your Health

What do cigarettes, junk food, and losing money have in common?

It turns out that all of the above can be damaging to your health. The first two may come as no surprise, but it turns out people who experience “negative wealth shock” are 50% more likely to die in the following 20 years than their neighbors.¹ That’s an insane uptick! So why are the numbers so high?

Let’s start by defining negative wealth shock.

It can happen when someone loses 75% or more of their wealth. Imagine if you woke up one day and discovered that your $100,000 nest egg had dropped to $25,000. That’s the level of loss needed to be considered negative wealth shock.

Obviously, a loss of that magnitude would be emotionally devastating.

But why does it seem to have such an impact on mortality?

Part of it might have to do with losing access to medical services. People with less money can’t visit the doctor as often and sometimes can’t afford the treatment they need.

It’s also worth considering that dangerous health conditions sometimes result in negative wealth shock.² Perhaps the statistic says more about the seriousness of staying healthy than it does staying rich!

However, there’s also a strong likelihood that losing the vast majority of one’s wealth causes dangerous levels of stress. For example, The Great Recession of 2007 to 2009 actually increased the risk for heart attacks and depression.³

Unfortunately, negative wealth shock is astoundingly common.

A survey discovered that a quarter of participants had experienced it.⁴ Americans aren’t just losing vast amounts of money. They’re experiencing devastating emotional, mental, and ultimately physical damage that could cost them their lives.

So how can you prevent a traumatic negative wealth shock?

First, determine how volatile your net worth is. Is all your wealth concentrated in one investment? What would happen if that investment crashed?

Second, discover how sturdy your protection is. How would you pay the bills if you were out of work or unable to work? Do you have the savings and insurance to protect you and your family?

Third, assess how stable your income is. Would your paycheck vanish if you couldn’t work or if your employer went belly up? Or do you have a team and system in place that could keep you financially afloat?

How did you answer these questions? Let’s talk if you feel that you’re vulnerable to a negative wealth shock. We can brainstorm strategies to insulate your wealth against the worst and protect it for your future.

¹ ⁻ ⁴ “Financial Ruin Can Be Hazardous To Your Health,” Rob Stein, NPR, April 3, 2018, https://www.npr.org/sections/health-shots/2018/04/03/598881797/financial-ruin-can-be-hazardous-to-your-health


Questions to Ask About Your Retirement Strategy

Questions to Ask About Your Retirement Strategy

So you’ve decided to create a retirement strategy. Good for you!

Will your plans be durable enough to withstand your working years and sustain you through your retirement? The answers to the following questions can help give you clarity on if your retirement strategy has what it takes!

How’s it constructed?
Not all savings vehicles are created equal. For instance, stashing all your cash in a mattress until retirement is a great way to torpedo the value of your savings. Why? Because inflation will slowly but surely reduce the value of each dollar you earn today. The same goes for low-interest saving options like CDs, bonds, and checking accounts. Even a 401(k) might not be enough!

Realistically, you want to put your money in a place where it can leverage compound interest. That means the cash you save generates interest, and all the interest you earn also generates interest. Interest earning interest on interest eventually unleashes a huge tidal wave of wealth creation that can help carry you through your final years.

What percent of your income will you live on?
Nobody wants to take a pay cut when they retire. But that’s exactly what people relying on Social Security will do; it’s only designed to replace 40% of your annual income!¹ Instead, it’s better to live off of 80% of your salary.²

So what does that number look like now? Assuming you live 30 years after retiring, how much would you need to save before you hit that goal? If you make $60,000, 80% of your income is $48,000. You would need $1,440,000 saved to maintain your lifestyle for three decades.

Once you have that number estimated, determine how much you’ll need to save starting today. You can use a nifty compound interest calculator like this one to get an idea of how much that will be!

Is it tax efficient?
There are few surprises nastier than saving for decades only to have the government bite a huge chunk out of your nest egg at the finish line. We won’t dive into the details of taxes now, but you need to decide when you’ll pay Uncle Sam his share. You can either:

Pay now. CDs and Roth IRAs are options where you pay your taxes, then save the money. You end up only paying the tax rate of today.

Pay later. You don’t pay any taxes now, but you cough up a percentage of whatever you earn in the long haul at a future rate. This is how a 401(k) works.

Pay never. No, you don’t have to hire a Swiss lawyer and hide your money on an island to do this. Ask a licensed and qualified professional about legal ways to achieve tax free growth.

Whatever option you choose, make sure you understand its implications for how much you’ll have when you need it.

It’s always best to review your strategy with a licensed and qualified professional. They’ll have insights and knowledge to help you achieve the retirement of your dreams.

¹ “How Much Can I Receive From My Social Security Retirement Benefit?,” Investopedia, Oct 30, 2020, https://www.investopedia.com/ask/answers/102814/what-maximum-i-can-receive-my-social-security-retirement-benefit.asp#:~:text=The%20maximum%20monthly%20Social%20Security%20benefit%20that%20an%20individual%20can,the%20maximum%20amount%20is%20%242%2C324

² “How Much Money Do You Need to Retire?,” John Waggoner, AARP, Sep 17, 2020, https://www.aarp.org/retirement/planning-for-retirement/info-2020/how-much-money-do-you-need-to-retire/?cmp=RDRCT-3c5a7391-20200917


COVID-19 And The Largest Wealth Transfer In History

COVID-19 And The Largest Wealth Transfer In History

COVID-19 coincided with one of the most important events in modern times.

Millions of Baby Boomers were preparing for retirement and to pass their wealth to a new generation right as the virus and its fallout blindsided the world. Here are two ways that COVID-19 has transformed the largest wealth transfer in history and how this impacts you and your family.

The transfer has accelerated
COVID-19 seems to be more dangerous for people over the age of 65. Of the 231,197 mortalities recorded by the CDC, 183,324 have been 65+.¹ That’s nearly 80%!

Those numbers represent a staggering amount of tragedy on a personal level. But they also mean that the wealth transfer that’s been predicted for years is off to an early start. Money, resources, and assets that were supposed to last the 20 to 30 years of retirement for Baby Boomers are now being passed on to Gen-Xers and Millennials.

The transfer has been complicated
The simple fact of the matter is that 44% of Baby Boomers don’t have estate plans.² That means a potentially vast amount of wealth has wound up in the hands of grieving family members who have to make tough choices about how it’s distributed. There was never any doubt that the Great Wealth Transfer might get complicated. But the large number of transfers occurring earlier than expected and at the same time will mean that more families will need guidance and wisdom as they navigate these challenging times.

The transfer has been reduced
Perhaps the largest impact of COVID-19 will be a serious decrease in the size of the Great Wealth Transfer. Experts have estimated that around $68 trillion dollars would be transferred from retiring Baby Boomers to their children.³ But 2020 has been a year of economic upheaval. Shutdowns have transformed our economy and caused high unemployment among older workers. It’s not just employees: nearly 100,000 businesses have shuttered due to the lockdowns. That represents years of hard work suddenly evaporating.

People impacted by these events and who are also approaching retirement age have two choices. They can either work into their late 60s, 70s, and maybe 80s to generate a livable income, or settle for less from their retirement years. It seems reasonable to believe that: Fewer family businesses will pass down to younger generations The businesses will be worth less than anticipated Children of employees will have to financially support their aging parents Early retirees will have less to leave future generations

The future of the transfer
We still don’t fully understand the extent to which COVID-19 has impacted the Great Wealth Transfer. Only time will tell! But it’s clear that there’s a massive need to guide families through the challenges of estate planning in the midst of current events. There will also be a huge demand for opportunities and business models that allow Baby Boomers approaching retirement to build wealth and leave financial legacies. Let me know if either of those are of interest to you. We can discuss ways for you to start helping your family protect their financial future.

¹ “Weekly Updates by Select Demographic and Geographic Characteristics,” CDC, accessed Nov 25, 2020, https://www.cdc.gov/nchs/nvss/vsrr/covid_weekly/index.htm

² “Baby Boomers Aren’t Creating Estate Plans — What That Means for You,” Robert Kulas, Kulas Law Group, Apr 30, 2020, https://www.kulaslaw.com/baby-boomers-arent-creating-estate-plans-what-that-means-for-you/

³ “Here’s how to prepare your heirs for the $68 trillion ‘great wealth transfer,’” David Robinson, Feb 25, 2019, https://www.cnbc.com/2019/02/22/how-to-prepare-your-heirs-for-the-68-trillion-great-wealth-transfer.html

⁴ “COVID-19 and retirement: Impact and policy responses,” Martin Neil Baily, Benjamin H. Harris, and Siddhi Doshi, Brookings, Jul 28, 2020, https://www.brookings.edu/research/covid-19-and-retirement-impact-and-policy-responses/

⁵ “Yelp: Local Economic Impact Report,” Carl Bialik and Daniel Gole, Yelp, Sep 2020, https://www.yelpeconomicaverage.com/business-closures-update-sep-2020.html


The True Cost of Debt

The True Cost of Debt

Debt is expensive.

Americans spend about 34% of their income on servicing their mortgages, car loans, and, of course, credit cards.¹

Assuming a household income of $68,703, that translates to roughly $23,359 going down the drain each and every year.²

Obviously, converting that money from debt maintenance to wealth building would be a dream come true for most Americans. But there’s more at stake here than retirement strategies.

The true cost of debt is your peace of mind.

Take the example from above. A third of your income is going towards debt and the rest is split up between everyday living and transportation expenses. You feel you can make ends meet as long as the money keeps coming in.

But what happens if a recession causes massive layoffs? Or if a pandemic shuts down the economy for months?

The sad fact is that the hamster wheel of debt prevents a huge chunk of Americans from saving enough to cover even a brief window of unemployment, let alone a shutdown!

That lack of financial security can have serious repercussions, including bankruptcy. And feeling like you’re always one unexpected emergency away from a financial crisis can result in a myriad of mental health issues. Numerous studies have shown that high levels of debt increase anxiety, depression, anger, and even divorce.³

Conquering debt isn’t about changing numbers on a page. It’s about reclaiming your peace. It’s about securing financial stability for you and your family. Your income is a powerful tool if you can protect it from lenders.

If you’re stressed about debt and seeking some relief, let me know. We can review your situation together and come up with a game plan that will recover the financial security that’s rightfully yours.

¹ “Study: Americans Spend One-Third of Their Income on Debt,” Maurie Backman, The Ascent, Mar 6, 2020, https://www.fool.com/the-ascent/credit-cards/articles/study-americans-spend-one-third-of-their-income-on-debt/#:~:text=And%20recent%20data%20from%20Northwestern,feel%20guilty%20about%20their%20predicament

² “Income and Poverty in the United States: 2019,” Jessica Semega, Melissa Kollar, Emily A. Shrider, and John Creamer, United States Census Bureau, Sept 15, 2020, https://www.census.gov/library/publications/2020/demo/p60-270.html#:~:text=Median%20household%20income%20was%20%2468%2C703,and%20Table%20A%2D1)

³ “The Emotional Effects of Debt,” Kristen Kuchar, The Simple Dollar, Oct 28, 2019, https://www.thesimpledollar.com/credit/manage-debt/the-emotional-effects-of-debt/#:~:text=In%20that%20study%2C%20Gathergood%20found,including%20depression%20and%20severe%20anxiety.&text=The%20study%20also%20reported%20that,stress%20also%20report%20severe%20anxiety.


Pay Yourself First

Pay Yourself First

Your paycheck makes everyone rich… except you.

Allow me to explain.

Your labor actually is helping make your boss rich. He gives you a portion of earnings in exchange for your time and effort. No harm, no foul. But what becomes of that paycheck?

It goes right back to people just like your boss.

The owner of your favorite coffee shop gets a piece.

Whoever dreamed up your favorite streaming service gets a piece.

Your landlord gets a huge piece.

And your credit card provider? They gobble up whatever’s left.

Everyone gets rich while you’re left scrambling to make ends meet. You get another paycheck and the cycle repeats.

So how do you escape this endless cycle and begin building wealth?

Before you do anything else, you’ve got to pay yourself first.

Start treating your personal savings as the most important bill to pay. Here’s the simplest way:

  • Decide how much you want to pay yourself each month and adjust your budget accordingly
  • Set-up a recurring automatic payment from your checking account to your savings account. Schedule it right after your payday.
  • Pay rent, utility bills, and buy groceries after your automatic transaction goes through
  • Use whatever is left for your lifestyle

Remember, the most important person you owe money to is you. Prioritize your own savings and use your income to build wealth for yourself.


One Simple Rule For House Hunters

One Simple Rule For House Hunters

The real estate market has witnessed a wild year.

Nationwide shutdowns and social distancing orders bottomed out home buying in the spring, only for demand to skyrocket over the late summer and fall.¹ All the ups and downs and uncertainty about the future have made it hard to tell if now is the time to buy or if it’s better to wait things out!

Fortunately, there’s a simple principle that can bring some clarity to your house hunting process. The 30/30/3 Rule can help you determine the right amount of house for you, whatever your stage of life! It’s composed of three mini-rules that we’ll explore one at time.

Rule 1: Don’t spend more than 30% of your gross income on mortgage payments
In other words, don’t sign away too big of a portion of your income in mortgage payments. This rule makes sure you have a healthy chunk of your cash flow available for other essential spending and building wealth. There’s definitely wiggle room to pay more as income increases, but 30% of your gross income is still a good target!

Rule 2: Have 30% of the home’s value saved in cash before you buy
Banking up a solid stash of cash before you purchase can protect you from several threats. Using about 20% of that cash as a down payment can get you lower mortgage rates and dodge private mortgage insurance.² Also, keeping a 10% buffer provides you with a useful line of defense against unexpected repairs and appliance replacements. Just remember to keep your housing fund away from risk. Think of it as an emergency fund for your house rather than a savings vehicle!

Rule 3: Avoid houses over 3X your gross annual income
This one is simple: Don’t buy a house you can’t afford! Do you make $50,000 per year? Shoot for a maximum $150,000 price tag. This is a simple way of narrowing your house hunting and managing your overall debt.

Why The Rule Works
Let’s say you’re earning the average American income of $56,516 per year, or $4,710 per month.³ You read the headlines about the housing market and decide to snatch up a home. An opportunity presents itself; there’s a gorgeous home in a good neighborhood that’s selling for $169,548 (3X your annual income) with a 3.1% interest rate (the national average). With monthly payments of $724 per month, you’ll only be handing over 15% of your income to the bank. Almost $4,000 dollars of cash flow would be at your disposal!

What if you had the same income level but were looking at a house worth $339,096 (6X your annual income) with a 6.2% interest rate (double the national average). You’ll be forking over nearly half your income for your house. That’s a huge amount of firepower that could be used to build wealth or start a business!

The 30/30/3 Rule is an easy way to simplify your search and protect your income from costly mortgage payments. Don’t forget to review your home buying plan with a financial professional who can help put this helpful principle into practice!

¹ “‘The housing market is on a sugar high’: Home sales are soaring, but is it a good time to buy? Here’s what the experts say,” Jacob Passy, MarketWatch, Aug 24, 2020, https://www.marketwatch.com/story/the-housing-market-is-on-a-sugar-high-home-sales-are-soaring-but-is-it-a-good-time-to-buy-heres-what-the-experts-say-2020-08-21

² “Should You Go Beyond a 20% Down Payment?,” Crissinda Ponder, LendingTree, Aug 30, 2019, https://www.lendingtree.com/home/mortgage/large-down-payment/#:~:text=Compensates%20for%20a%20lower%20credit,risk%20for%20your%20mortgage%20lender.

³ “Here’s how much the average American earns at every age,” Emmie Martin, CNBC Make It Aug 24 2017, https://www.cnbc.com/2017/08/24/how-much-americans-earn-at-every-age.html#:~:text=Here's%20how%20much%20the%20average%20American%20earns%20at%20every%20age,-Published%20Thu%2C%20Aug&text=The%20median%20household%20income%20in,men%20and%2040%20for%20women.

⁴ “Current mortgage rates – mortgage interest rates today,” Jeff Ostrowski, Bankrate, Oct 7, 2020, https://www.bankrate.com/mortgages/current-interest-rates/


The Many Roles Of A Financial Professional

The Many Roles Of A Financial Professional

The world is full of financial professionals.

Accountants, hedge fund managers, and even some attorneys fall under the umbrella of “financial professional”. But you don’t have to be a mega-corporation or global bank to use the services of a money expert. For any family, a financial professional can serve as an educator who assesses your financial health, a planner who can help you prepare for the future, and a trusted advisor who offers high-quality counsel as you navigate life.

Financial professionals as educators
Money management can be difficult. It’s full of confusing terminology, big numbers, and the constant fear that someone’s trying to take advantage of you. Financial professionals specialize in many different fields, but at the end of the day they’re all educators. An investment advisor has to teach you about different strategies and products so that you can make informed decisions about your future. A financial professional can show you how to make a budget and attack debt.

Don’t settle for a professional who just wants to manage your money. Look for someone with the patience and expertise to educate you about how money works.

Financial professionals as planners
There’s a significant debate in the financial service industry about the difference between a financial advisor and a financial planner. But the simple fact of the matter is that you should seek out a financial professional who will help you prepare for the future, regardless of their title. You want a professional who will help you map out a long term investment strategy. Someone who considers insurance, long term care, and estate planning. The best professionals, regardless of their speciality, help you gain some perspective and give you the tools to map out your retirement. Talk with your professional about your wealth and goals so you can draw up a financial blueprint for your retirement and beyond.

Financial professionals as advisors
The financial services industry used the term “advisor” in a specific way, but a high-quality financial professional has wisdom to offer you in any situation. Challenges like credit card debt and student loans can seem overwhelming, especially when unexpected expenses pop up. It’s easy to lose focus and have your debt strategy get derailed. But an advisor can give you the wisdom and insight you need to prepare for a crisis and stay the course of financial independence. They can encourage you to build an emergency fund that will protect your financial strategy from unexpected expenses. When the economy takes a dip, they can give you the perspective you need to not make hasty or emotional moves that could seriously impact your retirement timeline. The financial professional you want by your side is the one with the wisdom and expertise to advise you through all of life’s storms.

When your car breaks down, you turn to a car mechanic. When you’re planning an event, you turn to an event planner. The same should be true of your money. When you set out on the path of financial independence, be sure to look for a financial professional with the know-how to educate you, to help you prepare, and to advise you through the obstacles of life.


Is Survivorship Life Insurance Right For You?

Is Survivorship Life Insurance Right For You?

A survivorship life insurance policy is a type of joint insurance policy (a policy built for two).

You may not have thought much about that type of insurance before, or even knew it existed. But joint policies, especially survivorship policies, are important to consider because they can provide for heirs, settle estates, and pay for final expenses after both spouses have passed.

Most joint life insurance policies are what’s known as “first to die” policies. As the unambiguous nickname suggests, a first to die policy is designed to provide for the remaining spouse after the first passes.

A joint life insurance policy is a time-tested way of providing for a remaining spouse. But without careful planning, a typical joint life policy might leave a burden for surviving children or other family members.

A survivorship life insurance policy works differently than a first to die policy. Also called a “last to die” policy, a survivorship policy provides a death benefit only when both insured spouses have passed. A survivorship policy doesn’t pay a death benefit to either spouse but rather to a separate named beneficiary.

You’ll find survivorship life insurance referred to as:

  • Joint Survivor Life Insurance
  • Second-to-Die Life Insurance
  • Variable Survivorship Insurance

Survivorship life insurance policies are sometimes referred to by different names, but the structure is the same in that the policy only pays a benefit after both people insured by the policy have died.

Reasons to Buy Survivorship Life Insurance

We all have our reasons for buying a life insurance policy, and often have someone in mind who we want to protect and provide for. Those reasons often dictate the best type of policy – or the best combination of policies – that can meet our goals.

A survivorship policy is well-suited to any of the following considerations, perhaps in combination with other policies:

  • Final expenses
  • Estate taxes
  • Lingering medical expenses
  • Payment of debt
  • Transfer of wealth

It’s also most common for a survivorship life insurance policy to be a permanent life insurance policy. This is because the reasons for using a survivorship policy, including transfer of wealth, are usually better served by a permanent life policy than by a term insurance policy. (A term life insurance policy is only in force for a limited time and doesn’t build any cash value.)

Benefits of Survivorship Life Insurance

  • A survivorship life policy can be an effective way to transfer wealth as part of a financial strategy.
  • Life insurance can be difficult to purchase for individuals with certain health conditions. Because a survivorship life insurance policy is underwriting coverage based on two individuals, it may be possible to purchase coverage for someone who couldn’t easily be insured otherwise.
  • As a permanent life insurance policy, a survivorship life policy builds cash value that can be accessed if needed in certain situations.
  • Costs can be lower for a survivorship life policy than insuring two spouses individually.

The good news is that life insurance rates are more affordable now than in the past. That’s great! But keep in mind, your life insurance policy – of any type – will probably cost less now than if you wait for another birthday to pass for either spouse insured by the policy.


World Financial Group, Inc., its affiliated companies and its independent associates do not offer tax and legal advice. Please consult with your personal tax and/or legal professional for further guidance.


Financial Literacy Has Never Been More Important... And More Uncommon

Financial Literacy Has Never Been More Important... And More Uncommon

Here’s a misleading fact: the United States has the largest economy in the world.

It makes up nearly a quarter of the global economy and has a GDP of roughly $21.44 trillion.¹ But that statistic doesn’t tell the whole story. The truth is that only a few Americans have truly mastered how money works and the rest are lagging behind. Despite having the largest economy, the U.S. ranks 13th in GDP per capita.²

And it all begins with the state of financial literacy.

Knowing how money works has never been more important. But it’s becoming an increasingly rare skill among Americans. Here’s a quick look at the significance of financial literacy in the modern world and how ignorance is hampering our ability to build wealth.

The importance of financial literacy is increasing.
Americans are faced with a complex world. We have access to unlimited information on everything under the sun, endless opinions on every issue, and infinite options for entertainment. Money is no exception. The two tried and true safety nets of the past—social security and pension plans—can fall short, so we need to figure out how to provide for our own futures. The options for how to save and grow our money are myriad. Now it’s on us to figure out how to build wealth, save for retirement, and leave money behind for our kids.

Understanding how money works isn’t just helpful for achieving those goals. It’s absolutely mandatory. Saving, budgeting, and the power of compound interest are just a few of the concepts that you’ll need to master before you can start building your financial future.

Financial literacy is decreasing.
Americans are less able to plan and provide for their futures than ever. Financial literacy slid from 42% to 34% between 2009 and 2018.³ And that number is significantly lower for Millennials than for the rest of the population, with only 17% able to answer 4 out of 5 basic questions about finances.⁴ That ignorance shows in our decision making and our inability to build wealth. A stunning 33% of Americans have nothing set aside for retirement.⁵ 44% don’t have enough saved to cover a $1,000 emergency.⁶ We’re surrounded by money and opportunity but don’t have the knowledge to convert them into personal wealth.

There are several reasons why financial literacy could be decreasing. Financial education is not widely taught in public schools, with less than half of states requiring a personal finance course for a highschool diploma.⁷ Perhaps we’ve just been slow to keep up with the rapid changes in the global economy. Or maybe some people benefit from having a large chunk of the population stay in financial ignorance. The lack of financial literacy is most likely a combination of all these reasons! The real question is, do you know how money works? And if not, where will you learn?

¹ Caleb Silver, “The Top 20 Economies in the World,” Investopdia, Updated Mar. 18, 2020,https://www.investopedia.com/insights/worlds-top-economies/

² “GDP per Capita,” Worldometers,https://www.worldometers.info/gdp/gdp-per-capita/

³ Andrew Keshner, “Financial literacy skills have taken a nose dive since the Great Recession,” MarketWatch, June 27, 2019,https://www.marketwatch.com/story/americans-financial-literacy-skills-have-plummeted-since-the-great-recession-2019-06-26

Keshner, “Financial literacy skills have taken a nose dive,” MarketWatch.

Dani Pascarella, “4 Stats That Reveal How Badly America Is Failing At Financial Literacy,” Forbes, Apr. 3, 2018,https://www.forbes.com/sites/danipascarella/2018/04/03/4-stats-that-reveal-how-badly-america-is-failing-at-financial-literacy/#69cecb072bb7

Pascarella, “4 Stats That Reveal How Badly America Is Failing At Financial Literacy,” Forbes.

Ann Carrns, “More States Require Students to Learn About Money Matters,” The New York Times, Feb. 8, 2020,https://www.nytimes.com/2020/02/07/your-money/states-financial-education.html


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