Pay Yourself First: The Simple Formula for Building Wealth
Meet Sarah. Sarah earns a strong income, has a well-documented budget, and keeps track of every dollar she spends. Yet, at the end of every month, she finds herself with little to show for her efforts. Bills pile up, unexpected expenses crop up, and her savings account barely moves. Despite her best intentions, Sarah feels like she’s treading water—always working hard but never truly getting ahead.
Now, meet Emily. Emily earns about the same as Sarah, but her approach is different. Rather than budgeting every expense down to the penny, Emily follows one simple rule: pay yourself first. Every month, Emily sets aside a fixed percentage of her income—without fail—into her savings and retirement accounts. Whatever is left, she uses for bills, discretionary spending, and fun. Unlike Sarah, Emily doesn’t stress about where every dollar goes because she knows her financial future is secure.
“Pay yourself first. Then pay everyone else.”
The Power of Paying Yourself First
The difference between Sarah and Emily isn’t income or discipline—it’s strategy. Paying yourself first is the cornerstone of financial success. It’s a simple shift in mindset: instead of saving what’s left after spending, you save first and spend what’s left. This approach helps ensure you’re building wealth systematically, rather than leaving it to chance.
Here’s why this strategy works:
Automated Success: By setting up automatic transfers to your savings or retirement accounts, you remove the temptation to spend the money elsewhere.
Freedom to Spend: When you’ve already saved, you don’t have to feel guilty about how you spend the rest. Whether it’s dining out, a spontaneous trip, or a new gadget, you’ve earned the right to enjoy your money.
Compound Growth: The earlier you start saving and investing, the more time your money has to grow. Small, consistent contributions today can turn into significant wealth tomorrow.
Why Budgets Often Fail
Budgeting can feel restrictive, and for many, it’s a system that’s easy to abandon. When you budget, you’re constantly making decisions about what to cut, which can lead to frustration and, ironically, overspending. Paying yourself first eliminates this decision fatigue. By prioritizing savings, you’re securing your future without obsessing over every expense.
Avoid the Interest Trap
There are two types of people in the world: those who earn interest and those who pay it. The “pay interest” group often spends first, saves whatever is leftover (if anything), and ends up relying on credit cards or loans to fill the gaps. This cycle of debt makes everything more expensive and creates a financial treadmill that’s hard to escape.
The “earn interest” group, however, saves first and lets their money work for them. They systematically invest, avoid unnecessary debt, and benefit from the power of compounding.
Building Wealth: The Core Principles
To position yourself for financial independence, follow these basic principles:
Live Below Your Means: Spend less than you earn, no matter your income level.
Pay Down High-Interest Debt: Attack high-interest debt like credit cards first, and free yourself from the burden of compounding interest.
Systematically Save: Set a savings goal—start with 10–20% of your income—and automate contributions.
Build an Emergency Fund: Aim for 3–6 months’ worth of expenses to cover unexpected events.
Max Out Retirement Accounts: Take full advantage of 401(k) plans, IRAs, or Roth IRAs for tax-advantaged growth.
Invest in a Diversified Portfolio: Use dollar-cost averaging to invest consistently in a balanced portfolio of stocks, bonds, and other assets. Avoid chasing high-flyers or timing the market.
The Bottom Line
Paying yourself first is the simplest and most effective way to build wealth over time. It shifts the focus from what you can’t spend to what you can save, creating a sense of freedom and confidence in your financial journey.
So, the next time you receive a paycheck, remember Emily’s example. Before you pay your bills, treat yourself—your future self, that is. Because true financial security begins with one simple act: paying yourself first.
Diversify Your Investments for Long-Term Growth: Building a Smarter Portfolio
The percentage of adult Americans who invest toward retirement is nearing an all-time high at over 63%.1 These days it is far easier to pursue different investment instruments to manage and preserve wealth and over the past few decades the average working person has realized that investing isn’t only for the rich. Whether you are new to investing or have some experience, the challenge of creating a portfolio that aligns with your financial goals remains ongoing.
There are several ways to “mix” your investments. You can invest in different instruments which are also broken up into sectors (both listed below). This is generally called “diversification.” The goal of diversification is to help avoid losing significant money from investments that don’t turn out as you may have hoped. However, just because you are diversified doesn’t mean you selected a safe composition of investments. For example, if you have many different high-risk penny stocks, the diversification may not have done much to decrease the risk that you could lose money. You have to be prudent in your investment decision-making and understand how each asset works.
Some of the investment instruments people consider for their portfolio include:
Stocks – Fractional ownership interest in a company. If the company does well, the investor tends to do well, and vice versa.
Bonds – A debt security, like an IOU. Borrowers issue bonds to raise money from investors who earn interest over time.
Mutual Funds – A company that pools money from investors and invests the money in securities such as stocks, bonds, and short-term debt. Unlike ETFs, mutual funds can only be bought and sold at the end of the trading day.
Exchange-traded funds (ETFs) – A collection of securities that tracks sectors of the market or seeks to outperform an underlying index. Unlike mutual funds, ETFs trade throughout the day on a stock exchange and their price fluctuates based on supply and demand.
Fixed-income investments (that aren’t bonds, such as certificates of deposit (CDs), money market funds, and commercial paper. Sometimes preferred stock is considered fixed income since it is a hybrid security bringing together equity and debt features) – Debt instruments that pay a fixed rate of interest.
Annuities – Financial products that provide a guaranteed income stream. Investors fund the product with a lump-sum payment or periodic payments.
Derivatives – Financial contracts between two or more parties that determine their value from an underlying asset, a group of assets, or a benchmark. These tend to be higher risk investments and you want to be extremely careful and consult a financial professional before treading in these volatile waters.
Investment Trusts – A public limited company that strives to earn money through investing in other companies. Investment trusts are closed-ended funds with a fixed number of shares and can only be traded once per day at the end of the trading day. Investment trusts generally cost less to own that a similar mutual fund but are typically more expensive than an ETF.
The sectors investors select from include:
Industrials – (Stanley Black & Decker, Caterpillar, A.O. Smith, etc.)
Historically (according to officialdata.org), since the inception of the S&P 500 in 1957 the index has produced an annual return of 10.26%. If you are an individual stock picker you know that it is hard to beat the S&P 500 over time. Even the greatest investor of all time, Warren Buffett didn’t beat the S&P 500 over the past twenty years, missing matching its return by .05%.2
What is the S&P 500 index? The S&P 500 Index or Standard & Poor’s 500 Index is a market-capitalization weighted index (market capitalization is the total dollar market value of a company’s outstanding shares of stock. Market value is the amount for which something can be sold on a given market) of the 500 leading publicly traded companies in the U.S. It is considered one of the best gauges to measure top-tier American equities’ performance and the overall stock market.
Thanks to the advent of ETFs, in 1993, that mirror the S&P 500, investors are now able to buy shares of funds that aim to produce returns equal, or close that of the S&P 500. For an investor who doesn’t have the time to conduct their own research, these investment options could be part of their overall program to assist in their long-term retirement savings goals.
Another aspect of investing that is often overlooked is the power of compounding. Compounding occurs when your investment begins to earn interest on the interest as well as the principal. The longer you hold the investment the more extraordinary the compounding has the opportunity to become. Albert Einstein is credited with saying, “Compound interest is the eighth wonder of the world. He who understands it earns it; he who doesn’t pays it.” The secret to compound interest working in your favor is being patient. Morgan Housel, the author of The Psychology of Money, said, you don’t have to be particularly smart or lucky to do well in the stock market. You just have to invest according to your risk tolerance and then be patient. Warren Buffett’s partner, investing legend Charlie Munger once said, “The first rule of compounding: Never interrupt it unnecessarily.” The concept when it comes to compounding and value investing over many decades is to buy and hold and wait. But first you have to figure out your risk tolerance.
Determine your risk tolerance
Everybody has a different risk tolerance based on their income level, lifestyle, life experiences, and many more factors. It is critical that you figure out your own risk tolerance and not somebody else’s because of FOMO (anxiety that something exciting is happening and you are missing out), which can be damaging to your finances and significantly impact your financial condition and strategy.
Allocation of assets
Based on your risk tolerance and your investment goals, you want to decide how you plan to allocate your investments, for example, a percentage in stocks, bonds, etc. This includes how much you want to keep on hand in cash.
While asset allocation does not ensure a profit or protect against a loss, being consistent with your investment allocation helps to lower volatility as you maintain your portfolio diversification. It helps to stay focused on your long-term goals and reduce impulsive decision-making based on speculative news. Remember, it is impossible to predict the future of the market or its volatility as much as it is futile to try and predict natural disasters, wars, and pandemics. Things happen in life, but consistency can help you navigate those unpredictable times.
Invest in What You Know
When it comes to investing, experienced investors often reiterate the importance of investing in what you know.
Choose businesses and companies that you are familiar with their products and services.
Do your research to get an understanding of the various investment vehicles available.
Start with investments that you are familiar with.
As you become more knowledgeable about how investing works you can begin to expand your portfolio with various forms of instruments and strategies.
Work to Master the Fundamentals
It is hard to earn a dollar, but it isn’t as hard as you might believe to build wealth over time with the right guidance and strategy. And, you don’t have to have a high-income job to do it. Think of investing as you would golf, boxing, or any other sport or skilled hobby. We’ll use golf and boxing in this example: The next time you watch either sport, notice each player’s swing looks different and in boxing each fighter’s stance is unique, however, despite their different approaches they still are able to put themselves in the position to win. This is because they understand the fundamentals. Investing is the same thing. You don’t have to have the same stock portfolio as your neighbor, co-worker, relative, or investing guru to do well over time. As long as you understand the fundamentals of investing and create the mix of investments that works for you, you can be unique and manage your wealth using your own strategy.
Everybody’s retirement and financial goals are different, their strategies are unique to them, their life experiences are distinct from their friends and neighbors, and the reasons why they make the decisions they do are personal. There is no right or wrong mix of investments when you are building a portfolio, however, there are strategies that may help you lower some of the risk of investing while preserving and working to grow your wealth.
If you have invested for a while, you probably understand that there are absolutely no guarantees that you will come out on top as an investor. Most great investors from Warren Buffett to Peter Lynch had a mentor that they learned from. They weren’t just born with financial acumen. Warren Buffett learned from Benjamin Graham. Peter Lynch’s lifelong mentor was George Sullivan. Getting help so you can improve your financial situation is a step that highly motivated investors take.
Consider consulting a financial professional
Want to learn more about your retirement planning? Just as history’s most notable investors sought the help they needed, you too can do the same. Consider consulting a financial professional to help you create an investment portfolio and strategy that can align with your retirement goals.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. All indexes are unmanaged and cannot be invested into directly
An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors.
Because of their narrow focus, investments concentrated in certain sectors or industries will be subject to greater volatility and specific risks compared with investing more broadly across many sectors, industries, and companies.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Footnotes:
1 Hiltzik: Passive investing is facing critics from all sides – Los Angeles Times (latimes.com)
2 Even Warren Buffett is no match for the S&P 500 – MarketWatch
Sources:
Guide to Fixed Income: Types and How to Invest (investopedia.com)
Warren Buffett Has Underperformed the Stock Market for the Last 20 Years (linkedin.com)
Quote by Albert Einstein: “Compound interest is the eighth wonder of the w…” (goodreads.com)
The Dark Side of Deals: Beware of These Cyber Monday and Black Friday Scams
Black Friday and Cyber Monday are great times to find amazing deals, but they’re also a prime time for scammers. While you’re hunting for bargains, stay alert to avoid getting caught in a scam. Here are some common tricks to watch out for so you shop safely.
Fake Websites
Sometimes a scammer may send an email with a link to a fake website that looks like a real store. Before you buy anything, check the address bar. Many scam websites use extra letters in the URL or a capital “I” instead of an “L.” For example, WaImart.com (with a capital “I”) is almost indistinguishable from Walmart.com (with a lower-case “L” appearing as “l”). These may be hard to spot, so if in doubt, use a free URL checker like Google’s Safe Browsing. Also look at the beginning of the web address; a secure web address begins with “https.”
Too-Good-to-Be-True Deals
If something sounds too good to be true, it probably is. Scammers frequently offer dirt-cheap prices on brand-name electronics or popular shoes, etc. Stay alert; compare prices with competing stores. If one site has a product for a fraction of what everyone else is offering, you’re probably being ripped off.
Fake Order Confirmations
Beware of any email that tells you that you ordered something that you didn’t. These emails try to make you panic and click a “cancel order” button. If you are at all in doubt about whether you ordered something, check your accounts directly through the store’s website.
Gift Card Scams
Gift cards make ideal holiday presents, but sometimes they may be risky. Scammers might try to sell you worthless or stolen gift cards, so buy them only from trusted stores. Never buy electronic gift cards listed for sale on online markets, or from people or entities outside a retailer’s normal distribution channels.
Shipping Scams
Shipping scams are common at this time of year. Perhaps you’ll get a message that an item is having trouble being delivered and you should pay a fee by mailing a check or by providing some personal information. Always track shipments directly from the store or the delivery company’s website.
Social Media Scams
You may get a pop-up on your social media feed advertising a huge discount code. It might be fake. Do your homework before clicking on a link or buying anything, especially if it is from a brand you aren’t familiar with.
Fake Reviews
Scammers may leave fake reviews designed to improve the perception of their item’s quality. When looking up reviews, be discerning. Most reviews should be mixed: some good, some bad. A “perfect” rating or nothing but glowing reviews might be a red flag.
Limited Time Offers
Scammers may tell you that it’s your only chance, that the deal won’t last. They are counting on you to make an impulse purchase. DON’T. Instead, go online and see if the deal is real.
By staying alert and following these tips, you may enjoy the holiday deals without falling for a scam. Stay safe and happy shopping!
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
The Power of Purposeful Giving: Tax Planning Insights For Charitable Deductions
Charitable contributions are personally rewarding and also have the potential to be tax-saving opportunities. A donation is a gift, such as cash or property, that is given to a non-profit organization to help them in pursuit of their goals. The donor must receive nothing in return to get the full deduction value for their contribution.
How Does it Work?
Contributions must be claimed as itemized deductions on Schedule A of IRS Form 1040. The limit for cash donations is generally up to 60% of the taxpayer’s adjusted gross income; however, in some cases 20%, 30%, or 50% limits may apply. Deductions are permitted by the IRS for cash and noncash contributions depending on that year’s rules and guidelines which may change, so individuals should stay up to date.
Is it Counted as a Charitable Deduction?
Deductions can only be made for contributions that plan to serve a charitable purpose. The IRS also requires the organization to qualify for tax-exempt status.
What Determines a Qualified Organization?
According to the IRS, qualifying organizations include those that operate for charitable, scientific, literary, religious, or educational pursuits, or to combat child or animal abuse. There is a long list of qualified organization examples that can be found on the official IRS website.
What if I Have Noncash Gifts?
Charitable contributions of goods such as household items and clothes, are acceptable just like artwork and real estate, and must be in good condition so the recipient can use the donation. The deduction amount is based on the item’s fair market value. If the deduction for the noncash gifts is over $500, individuals, corporations, and partnerships must include Form 8283 when they file their tax returns.
Vehicles
Vehicle donations are a bit different. If the fair market value of the vehicle is over $500, taxpayers can deduct the lesser of:
The vehicle’s fair market value on the date the gift is given, or
The gross proceeds from the sale of the vehicle by the organization.
However, if the individual sells the vehicle for $500 or less, a taxpayer can deduct the lesser of:
$500, or
The vehicle’s fair market value on the date the gift is given.
Capital Gains
Appreciated capital gains are generally limited to 30% of the taxpayer’s AGI if they are made to qualifying organizations and 20% of the AGI for non-qualifying organizations.
What if There is an Economic Benefit Attached to a Donation?
If a donor is given an economic benefit in return for their gift, for example, a calendar, this is called a “quid pro quo” donation. If this is the case, their contribution is limited to the amount of the donation in excess of the fair market value of the calendar. If the fair market value of the calendar is $10 and the contribution is $50, the deductible amount is $40.
Non-Financial Benefits of Purposeful Giving
Not everything is about money. Some of the non-financial aspects of giving include:
Making a difference in people’s lives
When you give to charity you are providing less fortunate people with a way to make their lives more manageable and less stressful.
Improving your own health
It may make you feel good, and that can make you happy. According to Northwestern Medicine, happiness is great for your health. It may lower your risk for cardiovascular disease, lower your blood pressure, improve sleep, and numerous other health-related benefits.
Helping to foster a sense of purpose within yourself
Giving provides some people with a sense of purpose in life. Studies indicate that individuals can fair much better in their lives when they have a purpose.
Helping to build stronger, safer communities
People can benefit in several ways from charitable giving, such as improving life skills, learning a trade, or some other activity that can give back to the community. This, in turn, can help grow, develop, and inspire a culture of giving within the community.
Consider discussing giving ideas with a financial professional
Charitable giving can be complex and impact you in a variety of ways. To get the most out of your charitable donations, consider consulting a financial professional to ensure you are taking the steps necessary to align with your financial strategies and goals while working to mitigate the risk of financial implications due to uninformed decision-making.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax advisor.
This article was prepared by LPL Marketing Solutions
LPL Tracking # 630183
Finding Your Financial Zen: Tips for Managing Financial Stress
Finance these days may be overwhelming and stress-inducing. Whether it’s following up on overdue bills or saving for the future, financial woes may cause a domino effect that challenges the calmness you work hard to preserve.
What if you could bring that same zen that flows from your meditation studio into your money matters? Finding financial zen is all about a more balanced, less weighty approach to money that might calm your heart and soul. Here are some suggestions to help you find your financial Zen so that you may enjoy a calmer life with fewer money worries.
Create a Simple Budget
Step one is figuring out where your money is going. The place to start is with a budget. A budget is simply a record of your income and expenditures. List your monthly income and write down everything you spend your money on in a corresponding month – your rent, groceries, utilities, taxi fares, etc – and when you make each expenditure.
With this method, you know exactly where you spend all your money. You may see what areas might be cut back and others with a need to put away more money.
Build an Emergency Fund
Unexpected expenses happen. Stay ahead of the curve by having something in reserve. This helps you feel less stressed when an emergency throws a monkey wrench into your finances. A good rule is to have three to six months’ worth of living expenses in a safe savings account.
Set Realistic Financial Goals
Putting a goal in terms of money could motivate you. Whether your aim is to pay off a debt, save for a vacation, or build a retirement fund, make your goals specific, measurable and doable. Break them down into chunks and reward yourself at each milestone.
Automate Your Savings
One of the simplest money-saving hacks is to automate your savings. Make automatic transfers from your checking balance to your savings account each month so you never see the surplus. By saving automatically, you’ll develop a habit of saving a little here, a little there, until you’re on your way to your goals and extra cash is building up.
Live Below Your Means
The first and most important tenet of financial calm is to live on less than you earn, avoid going into unnecessary debt, and don’t spend every dollar you make. Remember that needs differ from wants, and spending in these two ways is entirely different. But here is the huge payoff. If you live on what you make, you may have plenty left over to save, invest, and enjoy. You’re now on your way to experiencing financial nirvana.
Invest in Your Future
Save regularly for your future, particularly in your retirement accounts – an employer-provided 401(k) or IRA. Take your company’s 401(k) match if you get one. Talk to a financial professional to develop an investment plan designed to pursue your goals along with your risk tolerance.
Educate Yourself
To work on financial zen, develop financial literacy. Learn about personal finance, investing and money management. There’s an abundance of books, podcasts, online courses, and more on these topics. The more you know, the greater your chances of making better financial decisions and reducing stress.
Seek Balance
Financial zen is about finding the middle way. Save and invest for the future, but also enjoy your life today. Strike a balance between spending and saving that allows you to live well and also have something put aside for the future.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
This article was prepared by WriterAccess.
LPL Tracking # 626347
Donor Advised Fund (DAF)
Author: Nina Breen CFP®, RICP®, CPWA®
Wealth Planner
Service Offering at Gatewood Wealth Solutions
INTRODUCTION
At Gatewood Wealth Solutions, we understand that giving back is an essential part of financial planning for many clients. To help clients maximize their philanthropic impact in a convenient and tax-efficient way, we offer Donor-Advised Funds (DAFs) in partnership with the American Endowment Foundation (AEF). This service allows our clients to support the causes they care about, with flexibility and professional guidance.
HOW IT WORKS
Establishing the Fund: Clients work with our team to determine an initial amount, allocation, and investment model for their DAF. Once agreed upon, clients choose a name for their fund, typically something personal, like “The [Family Name] Charitable Fund.”
Account Setup: We coordinate with AEF to create the DAF account. The client fills out a donor application, which includes the fund name, initial gift amount, and naming successor advisors, usually family members, to continue the fund’s legacy.
Funding and Management: Once the account is set up, it can be funded with cash or appreciated securities. Clients can then use AEF’s easy-to-navigate online portal to recommend grants to their favorite charities, with a minimum gift amount of $250 per grant.
Gatewood Advisory Strategies: Our Investment Committee will execute the appropriate in-house investment strategy within the DAF, pursuing long-term returns to help clients work toward their charitable giving goals.
WHY CHOOSE A DAF?
Tax Efficiency: Clients receive an immediate tax deduction on their contributions and can strategically fund charities over time.
Maximized Deduction Limits: Donors can deduct up to 30% of AGI for long-term appreciated securities and up to 60% of AGI for cash gifts, allowing them to maximize tax benefits while supporting charitable goals.
Flexibility in Giving: Through AEF, clients have the flexibility to support multiple charities over time without the administrative burden of managing separate gifts.
Legacy of Giving: Clients can name successors to continue their charitable giving, creating a lasting impact through generations.
FINAL THOUGHTS
Our commitment at Gatewood is to make philanthropy simple, meaningful, and aligned with each client’s broader wealth plan. If you’re interested in learning more about how a DAF could fit into your financial strategy, please reach out to our team.
For more information about Donor Advised Funds (DAF’s) and the American Endowment Fund, (AEF), please visit their website at:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal. No strategy assures success or protects against loss. This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
If you’ve followed politics for any length of time, you’ve heard it all before: “This is the most important election in history.” Or, “It’s different this time.” These phrases are part of the cycle, resurfacing every few years. Just last week, our preferred custodian, LPL Financial, echoed the sentiment with a blog titled “This Time Will Be Different.”
Maybe they’ll be correct, but we doubt it.
POLICY SHIFTS & MARKET RESILIENCE
Yes, policy changes are inevitable. If the Democrats have a strong showing, we will see higher taxes. Their proposals mostly fall within the historical range for tax brackets and aren’t entirely new for markets or taxpayers. Sure, higher taxes will pressure corporate profits, but resilient companies have shown they can weather these shifts and generate growth.
Consider Alphabet (Google’s parent company), which reported 15% revenue growth last week. Democrats often push for breaking up Big Tech over anti-trust concerns, while Republicans challenge their censorship policies. However, Alphabet remains resilient, growing profits and making prudent investments regardless of which party is in power. Strong businesses can navigate through regulatory pressures and continue to reward shareholders.
WHAT CAN WE EXPECT?
Markets dislike uncertainty, and the weeks leading up to an election often bring plenty of it. Historically, election years bring October volatility as markets brace for uncertainty, frequently followed by a rebound in November and December when outcomes become increasingly certain.
In the short term, we may see markets react by favoring specific market factors, such as certain Sectors (Financials vs. Technology), Size (Large vs. Small Cap), or Geographies (Domestic vs. International Developed and Emerging Markets), depending on the anticipated policy impacts of the winning party. In the long term, politics will be noisy, and allocating to good businesses at a fair price has always won.
FINAL TAKEAWAY: HISTORICAL MARKEY TRENDS & OPPORTUNITY
We’ve been showing election slides all year, and here’s the recurring theme: markets tend to rise over time, regardless of whether a Democrat or Republican is in the White House. Gridlock, which remains a probable outcome, has been the preferred outcome for stock market returns. In any case, opportunities will exist under all outcomes. Regardless of the outcome, we’re always prepared to identify and act on those opportunities. We’ll close with perspective from Dave Ramsey “What happens at your house is a whole lot more important than what happens in the White House.”
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.Investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Five Easy Steps to Building Your Emergency Fund
In today’s unpredictable world, having an emergency fund is not just a financial recommendation – it’s a necessity. The reality of unexpected expenses, whether they come from a medical emergency, sudden unemployment, or urgent home repairs, can create significant financial stress.
An emergency fund acts as a financial safety net, empowering you to manage these unforeseen costs without resorting to high-interest debt options like credit cards or loans.
Building an emergency fund requires a systematic approach, and here’s how you can do it in five practical steps:
1. Decide How Much to Save
The first step in creating an emergency fund is to determine the amount you need to save. A common guideline is to have enough to cover three to six months of living expenses. This figure should include rent, utilities, groceries, and any other regular expenses that would need to be paid even during a period of financial distress. To personalize your fund, consider your job security, the stability of your income, and any dependents who rely on your earnings.
2. Set Your Savings Target
Once you know how much you need to save, the next step is to set a realistic timeline for achieving this goal. Start by reviewing your budget to see how much you can comfortably set aside each month without compromising your daily financial health.
For some, this might be a modest amount, while others might be able to save more aggressively. The key is consistency; even small amounts can grow significantly over time due to the power of compound interest.
3. Choose Where to Keep Your Fund
The ideal location for your emergency fund is somewhere accessible but not too easily spent. High-yield savings accounts are a popular choice because they offer higher interest rates than regular savings accounts, helping your fund grow faster. These accounts also provide liquidity, allowing you to withdraw funds quickly and without penalties in case of an emergency.
4. Open Your Account
With a clear idea of where to keep your emergency fund, the next step is to open an account. Look for banks that offer competitive interest rates and low fees. Online banks often provide higher yields than traditional brick-and-mortar banks. Ensure that any account you choose is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) for added security.
5. Know When to Use the Fund
Finally, establish clear guidelines for when to use your emergency fund. It should only be used for true emergencies, such as unexpected medical expenses, crucial home repairs, or during a job loss – not for planned expenses or discretionary spending. After an emergency, focus on rebuilding the fund as soon as your financial situation stabilizes.
Financial Planning Matters
Building and maintaining an emergency fund is a fundamental aspect of a sound financial strategy. It provides not just financial confidence, but potentially may lead to less stress, knowing that you are prepared for life’s unexpected events. Start small, be consistent, and watch your safety net grow.
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Fortifying Your Finances: Cybersecurity Strategies for High-Net-Worth Individuals
The more assets you have at stake, the bigger the target on your back for cybercrime. This means that managing your financial wealth needs to go beyond traditional security measures. You also need a comprehensive cybersecurity strategy. Here are some risks for high-net-worth individuals and how to manage them.
Understanding the Risks
Phishing and Spear Phishing Attacks
HNWIs may be targeted by personalized messages sent by cybercriminals in an attempt to capture sensitive information. For example, you may receive a message supposedly from a loved one letting you know they’re traveling and had their passport stolen or were arrested and are in jail. They may ask you to wire them money without letting others know.
Ransomware
The term ransomware describes malicious software that may cause your information to become inaccessible unless you pay a fee. Unfortunately, if you fall victim to a ransomware scam, you may lose your data and money. Once you’ve given the criminals money to release your data, they may continue requesting money until you stop responding.
Identity Theft
If criminals have information, like your date of birth, mother’s maiden name, and Social Security number, they may impersonate you easily. Identity theft lets criminals access your bank accounts, investments, and other assets held in accounts that are accessible online. They may then send these assets to offshore accounts, which are more difficult to recover.
Key Cybersecurity Strategies
To manage your wealth and personal information, consider some of the following cybersecurity strategies.
● Advanced Authentication Methods: Always implement multifactor authentication (MFA) for your financial accounts wherever possible. You might also use biometric authentication methods, like fingerprints or facial recognition.
● Secure Your Devices: Make sure every smartphone, tablet, and computer has the most current antivirus software installed. Also, enable automatic updates to keep your software and applications up-to-date.
● Network Security: Set up a virtual private network (VPN) when you go online, especially if you’re connected to public WiFi. Put firewalls and intrusion detection systems in place to manage your home and business networks.
● Monitor Financial Transactions: Regularly review account statements and transactions, looking for any unusual or unauthorized activity.
By using these practices, you might get ahead of the game when managing the impacts of cybercrime.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
This article was prepared by WriterAccess.
LPL Tracking # 609848
How a Financial Professional May Be Your Valuable Business Advisor
Small businesses have new reasons to consider the value of financial planning in working towards their business goals. Many owners are “bandonneurs” (a French word for “jack of all trades”) who may successfully wear many hats, but trying a DIY strategy for your financial planning may be a challenge even for the most diligent entrepreneurs.
During National Financial Planning Month, consider why a financial professional might be of value in assisting you with steering your business toward long-term effectiveness.
Experienced Financial Guidance
A financial professional has vast experience in many financial issues to coach you through circumstances, such as how to use money day-to-day, how to manage complex concepts such as cash flow, how to take advantage of tax structures, and much more.
● Cash Flow Management: Keeping tabs on cash flow may help you to have enough to pay operating expenses, expand into growth opportunities, and prepare to weather an economic crisis.
● Tax Optimization: Tax laws are complex. Trying to figure them out may be a daunting task. A financial professional along with your tax advisor may help you develop a tax-efficient strategy to manage your taxes and improve your after-tax income.
● Business Expansion: If you want to expand your product offerings, enter new markets, or grow your staff, a financial professional may help you.
● Risk Management: Identifying risks may help to mitigate them. A financial professional could identify potential risks. Then, recommend proper insurance coverage and contingency planning to help preserve your business’s longevity.
● Investment Advice. It’s also important to look for clever investments to grow your business and maintain your presence in the market. Whether it’s buying new equipment or buying the neighboring land for expansion, a financial professional may help you figure out a strategy for improving your return on investment (ROI).
Decision-Making
Running a business could give you tunnel vision. A financial professional operates at a distance, providing helpful support that could enable you to make choices based on data rather than emotion.
Succession and Transition Planning
Another important consideration is succession planning—a plan to hand over your business to the next generation. Another option is to make a plan to sell to a competitor who wants to buy you out. A financial professional may help you prepare a succession plan and consider the benefits and drawbacks of any buyout offers you may receive.
In Closing
Does your business have a financial planning challenge? By partnering with a financial professional, you gain helpful financial planning guidance, investment advice, and support for financial discipline, and you may also enjoy an overall enhancement to your business’s financial management. Financial planning advice is no longer a luxury for business owners—it’s an indispensable tool for navigating the complex financial challenges you face.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
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"My wife and I have had the benefit of working with John Gatewood for over thirty-five years. Initially, John worked with us planning our personal and business life insurance needs. As his service offerings expanded, we took advantage of his expertise to help us with our family's financial planning. We could not be more pleased than what we are with the plan the Gatewood Wealth Solutions team developed for us. The team members are well-trained, intelligent, friendly, enthusiastic, and very good listeners. We have two scheduled reviews of the plan every year with one of the principals and at least…"
"My wife and I have known and worked with John Gatewood and his team for nearly a decade. The values-driven team of Gatewood Wealth Solutions is motivated, caring, highly competent and personally fueled by character and integrity. I recommended Gatewood to friends and family - including my children - because their deep desire to help clients 'give purpose to their wealth' gives us all the opportunity to better serve our families and communities."
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"I have worked with Gatewood Wealth Solutions since its inception and could not speak more highly of my experience. Gatewood Wealth Solutions provides comprehensive wealth management services for my family in a very sophisticated way. Their planning services are comprehensive and consider all assets of our family, not just what they manage. This is important for our family since we have a real estate business which must be considered in our planning. They also help us with our estate and tax planning each year. Their service is exceptional and is proactive and not reactive. I have referred members of my…"
"I’ve been with Gatewood Wealth Solutions and its predecessor for 21 years as our financial advisors. I first met John Gatewood in 2002 when I purchased a life insurance policy from him when he was with Northwestern Mutual. Shortly after having additional discussions with John, we started using them as our only financial advisors. They continued over the years to more than perform above my expectations and also started to bring in additional talent within their organization in order expand and meet client’s expectations. Since they’ve organized as Gatewood Wealth Solution and separated from Northwestern Mutual, they’ve continued to add…"
"I have been with Gatewood Wealth Solution for seven years, and I would highly recommend them for wealth management services. They are a very efficient, effective, knowledgeable team that provides highly personalized, client-centered services. If I didn't know better, I would think that I am their only client! They have an excellent working relationship with a highly respected law firm that provides assistance with trusts and estate planning. They also have an excellent working relationship with a tax accounting firm. All of this so that all aspects of my financial planning needs are seamlessly coordinated. Their quarterly meetings are well…"
"Partnering with Gatewood Wealth Solutions has been one of the best decisions we have made in the last five years. I have met with numerous financial planners who’ve all come to me with similar ideas and recommendations that don’t seem to prove that they are thinking outside the box for me individually. But when Gatewood came to me with their plan it was strategically designed with so many aspects taken into consideration that I was surprised at how uniquely competent and professional they were. They brought me many ideas and recommendations that would not bring them profit. They brought me…"
"Gatewood Wealth Solutions gives me confidence that my retirement savings are being monitored and managed with MY best interest in mind. All of the staff is welcoming, friendly and respectful. They have comprehensive knowledge of long-term financial planning, estate planning and tax planning. I have been with Gatewood for many years and hope to be with them for many more years to come."
"I have known John Gatewood, the founder of Gatewood Wealth Solutions, for many years. We became friends well before we talked about business, and it was a natural decision to turn to John for help with our affairs when I needed it because I had grown to know and trust him. It really is true that John and his team at Gatewood Wealth Solutions are completely focused on helping ordinary families like ours to become financially independent. The family part especially means something: One day my 20-something son called to ask if I thought our group would be willing to…"
The statements provided are testimonials by clients of the financial professional. The clients listed have not been paid or received any other compensation for making these statements. As a result, the client does not receive any material incentives or benefits for providing the testimonial. These views may not be representative of the views of other clients and are not indicative of future performance or success.
