Retirement planning is a constantly evolving process. Strategies that may have worked fine a few years ago may no longer be the optimal direction to continue. Your life may have taken unexpected turns, you may have different retirement goals you now wish to achieve, or you’ve realized your previous investments may not be working as well as anticipated to help you reach your financial goals.

Now is the time to consider a ‘retirement re-education’ by reviewing your retirement plan and overall strategies to see if they still align with your greater plans and goals.

Evaluating Your Current Plan

When sitting down to review your current retirement plan, you may want to:

• Check your current investments: Markets have seen significant fluctuations throughout the years, so it is crucial to observe if your investments remain on track to get you toward your retirement goals. Make sure fund percentage balances are still appropriate and that your portfolio is well-diversified and in line with your current situation and future plans.

• Check for contingencies: Ensure you have protection in place should the unexpected occur. This can start with insurance policies addressing long-term care, disability, and even death. You also want to ensure proper medical coverage to avoid being responsible for major medical expenses.

• Ensure your retirement plan is tax-efficient: Seeking tax benefits will help you find ways to minimize taxes in your retirement portfolio. This focus can include placing taxable investments into tax-deferred accounts.

• Evaluate changing family needs: If you have experienced recent adjustments in your family’s situation, consider how those changes can affect future finances and if any adjustments need to be made.1

Why You May Need to Revise Your Retirement Plan

Giving your retirement plan a once-over every couple of years is generally a good practice, but there may be situations when revising it sooner may be more urgent. Reasons to consider a revamp include:

• Life event changes: If you have had significant life event changes, such as a new marriage, a divorce, a serious illness, the birth of a child, providing for step-children or grandchildren, or the death of a spouse, you may need to make significant changes to your retirement plan to realign with your new future goals.

• Lifestyle changes: Moving to a new state, having significant changes in housing and related costs, or considerable health changes all may warrant a change in direction with your retirement goals.

• Dramatic economic fluctuations: If domestic or global financial conditions have become unpredictable or there have been significant market fluctuations recently, it’s smart to review possible effects on your retirement investments. Economic situations that may prompt an urgent review include rising or falling interest rates, inflation, recessions, and significant Social Security changes.1

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.

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.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. This article was prepared by WriterAccess.

LPL Tracking #1-05372230

Footnotes

1 5 Ways To Adjust Your Retirement Planning Annually, Forbes, https://www.forbes.com/sites/nextavenue/2020/03/05/5-ways-to-adjust-your-retirement-planning-annually/?sh=4110847f52af

What does the term “financial freedom” mean to you? For some, it means freedom from a particular workplace or industry. For others, it means the opportunity for an early retirement or the ability to start a long-desired business. Consider these three strategies that may help investors pursue financial independence on this Independence Day.

Start Early

The power of compounding might be significant—the more you invest sooner, the longer there is for the compounding effect to help. In general, having more time invested in the market helps manage day-to-day volatility and possibly major recessions. If your retirement is not for another 20 or 30 years, a recession may be good news for your investments, as it may allow you to invest funds in long-term assets at historically-low prices.

Accurately Assess Your Risk Tolerance

Suppose your investments lose 40% of their value; what might you do? Are you content to let them ride (after researching the stability of the underlying assets), or would you be tempted to go to cash for a while?

Everyone’s risk tolerance is different. It is crucial not to invest beyond your tolerance. For some, this means an aggressive portfolio that includes mostly stocks. For others, this may mean bonds, Treasurys, and other assets. There is no wrong answer, but forcing yourself to invest more than you are comfortable with or in assets you are not comfortable with could set you up to make unwise knee-jerk decisions the next time there is market volatility.

Build Your Desired Portfolio

Many investors subscribe to the “lazy” portfolio method—a set-it-and-forget-it mix of index funds or exchange-traded funds (ETFs) that follow a particular index. For example, many ETFs and index funds follow the major market indices, including the Dow Jones, the NASDAQ, the S&P 500, and the Russell 2000. By investing in these broader funds, you might diversify your portfolio without the effort of researching, picking, and following individual stocks.

There are several advantages to the lazy portfolio approach, including:

• Instant diversification

• Relatively low fees

• Simplicity

Though you need to monitor your investments regularly, you do not need to research particular stocks or companies in-depth to feel confident about the investments. The major market indices automatically rebalance—for example, if a company underperforms and no longer has the market cap requirements for the S&P 500, it is cycled off the list and replaced with a new company.

Your financial professional works with you to evaluate your risk tolerance and then can help you choose a basket of assets for your portfolio.

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.

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.

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.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

Dow Jones Industrial Average (DJIA): A price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry.

The NASDAQ-100 is composed of the 100 largest domestic and international non-financial securities listed on The Nasdaq Stock Market. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology, but does not contain securities of financial companies.

S&P 500 Index: The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization US stocks.

The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

This article was prepared by WriterAccess.

LPL Tracking #1-05370165

If recent market volatility has you questioning your opportunities for financial freedom, you are not alone. Due to rising inflation, higher interest rates, a volatile stock market, and recession fears, many investors find themselves wondering how to proceed.

Fortunately, history may help gain perspective on this market. Those who weather volatility might have more resilience. Here are some tips and tricks to help you deal with market volatility and assess the quality of your current investments.

Your Emotions are Real, Just Not Valid as Investment Guidance

 

Behavioral science research shows that most people left to their own devices are below-average investors.1 The reason for this is that it is easy to make poor decisions based on emotion, such as:

• Selling a stock that has dropped in value, only to see its value rise afterward.

• Sitting out of the market entirely during a recession and then beginning to invest again only after asset values rise, missing the chance to invest during the lows.

• Using the “you only live once” (YOLO) 2 strategy to invest (gamble) everything in the new hot penny stock or cryptocurrency.

But while it is natural to experience strong emotions during volatile times, acting on them is another matter. Unless you have insider knowledge about a particular stock or company (and trading on that knowledge is illegal), the market has already reacted when you hear the news that tempts you to change your investment strategy. In other words, it is almost impossible to time the market.

If You are Happy With Your Investment Plan, Sit Tight

If you avoid the temptation to tweak your investments when asset values rise, adjusting them during a market downturn may not be a good idea. However, market volatility may sometimes reveal weaknesses in an investment plan or suggest a different asset allocation. Working with a financial professional to outline your risk tolerance, desired asset allocation, and investment timeline to create a managed portfolio for both bull and bear markets might be helpful.

Ultimately, it can help if you have a portfolio that allows you to sleep at night, no matter what the market is doing. For some, this may mean holding a substantial cash balance. For others, this may mean investing in index funds instead of picking stocks. Whatever approach you select should help you mitigate investment anxiety and allow you to hold on for the long term. By being proactive and planning your investments before you face a crisis, you may better manage reactive decisions that might harm your portfolio in the long run.

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.

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.

Asset allocation does not ensure a profit or protect against a loss.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. This article was prepared by WriterAccess.

LPL Tracking #1-05370157

Footnotes

1 What FAs need to know about behavioral science in finance https://www.bcgbenefits.com/blog/behavioral-science

2 From YOLO to diamond hands, here are 9 pieces of lingo you need to learn before diving into Wall Street Bets https://markets.businessinsider.com/news/stocks/reddit-wall-street-bets-lingo-guide-glossary-yolo-diamond-hands-2021-5-103045077

Being a small business owner can be rewarding but also may bring a lot of stress. You may be experiencing the pressures of trying to grow your company while providing a solid future for your employees. On top of all that, you will also need to focus on building financial independence for yourself and for your business. There are many paths to financial independence; below are a few directions to get you started.

Optimize Your Current Assets

One of the first steps toward financial independence is optimizing your current assets. This could take the form of increasing the profitability of your business by increasing your marketing, reducing your current costs and expenses, finding ways to reduce your tax burden, or continuing your education. You will need to take an inventory of your current assets and expenses and develop a strategic plan to optimize these factors and help your company reach its potential.1

Pay Down Debt

There are two primary types of debt: productive and reductive. Productive debt is debt that helps nurture your financial growth and puts you on the path toward financial freedom. Reductive debt, on the other hand, is debt spent on items that will depreciate in value and not provide boosts to revenue or income. It is similar to credit card debt, and eliminating or at least reducing it can put you and your business on a path toward overall independence. Assess all of your debt and develop a plan to pay it down aggressively until it is eliminated.1

Beef Up Your Savings

Savings are vital for yourself and your business since they will help you build wealth and financially prepare you for unexpected expenses. One way to increase savings as a business owner is to take advantage of your company’s savings plans. This can include IRAs, 401ks, and health savings accounts. You may also want to look at the various investment options for your personal and company funds that can create long-term returns.2

Give Your Insurance the Once Over

While growing company assets is crucial to achieving solid financing, so is insuring them. Without proper insurance, you risk losing what you’ve gained through your hard work. Review your insurance policies to make sure that you not only have all of your assets covered but that you have proper coverage limits. Policies you should consider reviewing include life insurance, disability, business, long-term care, health, and property and liability coverage.2

Follow the above tips to put yourself on the path to financial independence. Assistance from a financial professional can assist you in your wealth management efforts and overall financial 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. To determine which investment(s) or insurance product(s) may be appropriate for you, consult your financial professional prior to investing or purchasing.

Investing involves risks including possible loss of principal.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05370165

Footnotes

1 “The 4 x 4 Financial Independence Plan for Entrepreneurs,” Entrepreneur.com, https://www.entrepreneur.com/leadership/the-4-x-4-financial-independence-plan-for-entrepreneurs/306064

2 “How Entrepreneurs Can Safeguard Their Financial Futures—And Work Toward Financial Freedom,” Forbes, https://www.forbes.com/sites/forbesbusinesscouncil/2023/02/14/how-entrepreneurs-can-safeguard-their-financial-futures-and-work-toward-financial-freedom/?sh=123c28f17a65

Golfing and investing may not seem to share much common ground at first glance. But the more you think about it, a successful golfer and a successful investor share a number of traits such as patience, perseverance, attention to detail, and intellectual curiosity.

Below, we discuss a few areas investing and golf have in common—as well as a couple of tips you can use to make sure your investing game is as successful as your golf game.

One Bad Shot Can Ruin Your Game

Even if you make it to the 16th or 17th hole while staying well under par, just one triple-bogey can put you back at square one. Similarly, one bad investment can wipe out a major chunk of your balance sheet. This is one reason it’s a bad idea to invest in a single stock or asset—diversification is key.

The More Information, the Better

You wouldn’t take a swing while blindfolded—so why would you invest in assets you aren’t familiar with? The more information you can obtain about your investments, the more comfortable you’ll be in making investing decisions. Don’t invest in a new asset without first considering the potential consequences. Remember, every dollar you have invested in one asset is a dollar you can’t invest somewhere else, so choose wisely.

Consider Your Appetite for Risk

Golfing requires a number of risk-assessment decisions—to try to escape a sand trap or take a drop, or to attempt a difficult shot on the off chance you’ll make it. But if you’re consistently playing (or investing) beyond your risk tolerance, you could find yourself disappointed in the results. Instead, consider the risks you’re willing to take and make sure they’re compensated ones—that is, risks that have a reasonable chance of turning out in your favor.

Even the most experienced golfers have off days—and often, there’s not much you can do to combat them other than playing through and trying again the next round. But by sticking to a consistent process, practicing, and reevaluating when things don’t work out, golfers can increase their chances of a successful day on the links.

While outcomes are important, in a diversified portfolio, the rise or fall of an individual investment shouldn’t be more than a blip on your radar. Because individual investments can be fickle, especially when chosen seemingly at random, creating an investing system and sticking to it can increase your likelihood of positive future outcomes.

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.

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.

This article was prepared by WriterAccess.

LPL Tracking Number 1-05367404

For kids, teens, and college students, summer break often represents freedom from schedules, responsibilities, and all those other drains on your time. Retirement actually can provide a similar level of freedom, but only if you’ve adequately prepared, planned, and saved. Below, we discuss three ways that planning ahead for your retirement can be like scheduling your summer.

Deciding What to Do

After spending decades at a 9-to-5, you may struggle to find ways to fill your time after retirement. Just like summer break, a couple of weeks of well-deserved decompression may turn into boredom.

It’s important to have a plan to transition into retirement. Whether this means having a list of vacation destinations, a hobby to turn to, or an organization to volunteer with, giving yourself some options can help you remain active and engaged instead of simply vegetating.

Deciding Where to Go

Many new retirees spend a lot of time traveling now that they no longer need to worry about coming back to a pile of work or rationing a limited number of vacation days. As you spend time traveling during your working years, take note of the destinations you’d like to return to.

Planning for retirement in general can look a lot like planning a vacation: you’ll need a budget, a destination, a timeline, and a Plan B. More than just longer vacations, retirement may also mean traveling to a new home – whether downsizing, moving closer to family, or even heading to a senior living community.

When considering next steps, especially if debating an interstate move, take into account factors like:

• The way your state treats and taxes retirement income

• Whether the setup of your home allows you to “age in place”

• Access to amenities

• Access to necessities (like grocery stores and hospitals)

• Transportation options

• Cost of living

By keeping these factors in mind, you’ll be able to find the best fit for your lifestyle now and in the future.

Deciding How to Pay For It

How do you afford your current lifestyle? What expenses do you expect to lose in retirement – and which ones might you gain?

Just like planning a vacation, planning how you’ll fund your retirement can be an intricate process with many moving parts. Having a financial professional at your side can help streamline matters.

Your financial professional will probably help you work backward to create your retirement financial plan. This planning can begin by evaluating how much your retirement lifestyle will cost, then figuring out how much income you’ll need to afford it. By looking at sources such as 401(k), IRA savings, a pension, Social Security, and taxable savings, your financial professional will scour all your potential areas of income and help you figure out the most tax-efficient way to fund your retirement.

Retirement planning can take time and effort – but just as you wouldn’t embark on the vacation of a lifetime without doing a bit of preliminary research, you also don’t want to leap into retirement without a plan.

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.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

LPL Tracking # 1-05367403

Both offer valuable lessons from those who have come before you

The Masters golf tournament and successful investing may seem like two completely different worlds, but they share many similarities in terms of tradition. Both have established practices that have stood the test of time, and both require a combination of skill, strategy, and patience to succeed. Let’s take a closer look at the traditions of the Masters golf tournament and how they compare to the traditions of successful investors.

Traditions Matter

One of the most well-known traditions of the Masters is the Green Jacket. The winner of the tournament is presented with a Green Jacket, which has been awarded to every champion since 1949. Similarly, successful investors often have a signature item or practice that sets them apart. For example, Warren Buffett is known for his simple lifestyle and preference for Coca-Cola, while Peter Lynch famously suggested investing in what you know.

Another tradition of the Masters is the Champions Dinner. The previous year’s winner hosts a dinner for all past champions, where they select the menu and are given the opportunity to share stories and advice with the current competitors. This tradition emphasizes the importance of learning from those who have come before you, which is also a key aspect of investing. Veteran investors often share their experiences and knowledge with younger investors, providing them with valuable insight and guidance.

The Augusta National Golf Club, where the Masters is held, is known for its pristine condition and attention to detail. From the perfectly manicured fairways to the meticulously maintained flower beds, every aspect of the course is designed to be visually stunning. Similarly, successful investors pay close attention to detail when researching potential investments. They scrutinize financial statements, study market trends, and conduct thorough due diligence before making a decision.

Another tradition of the Masters is the Par 3 Contest, a light-hearted competition held the day before the tournament. This tradition shows that even in the midst of intense competition, it’s important to take a step back and have fun. Similarly, successful investors know that investing can be a serious business, but it’s also important to enjoy the process and not become too bogged down in the details.

Finally, the Masters is known for its exclusivity. Only the best golfers in the world are invited to compete, and only a select few are ever invited to become members of Augusta National Golf Club. Similarly, successful investors often seek out exclusive investment opportunities that are only available to a select group of investors. This exclusivity can often lead to higher returns and greater prestige.

Traditions Matter

While light-hearted, it is easy to see that the traditions of the Masters golf tournament and investing share many similarities. Both require skill, strategy, and patience to succeed, and both emphasize the importance of tradition and learning from those who have come before you.

By understanding and embracing these traditions, both golfers and investors can build confidence and work towards leaving a lasting legacy.

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.

This article was prepared by FMeX.

Whether you are expecting your first child or have been a parent for years, finances and building a future for your family go hand-in-hand. Luckily, there are money moves you can make now to help manage financial stress, support yourself and your loved ones, and help your children as they get older. Here are three key financial moves all parents should consider making.

Review and Update Your Life Insurance

For many, life insurance is a necessary but unmanaged expense for a good reason. It is not pleasant to consider a situation where your life insurance policy may become relevant to your loved ones. However, for parents, in particular, having adequate life insurance might be the difference between your children struggling or enjoying a comfortable future.

Many employers offer life insurance to their employees, often at a specific multiplier of their salary. For some families, this amount may be adequate; but in other cases, you may need to purchase an additional term policy that provides coverage until your youngest child is an adult. It is worth reviewing how much coverage you have, then comparing this with your average projected earnings over the next decade or so.

Also, update your beneficiaries after any major changes. A divorce decree does not remove an ex-spouse’s name from a life insurance policy. For any changes in your marital status or if a named beneficiary passes away, you must update your list of beneficiaries with your insurer.

Consider a College Savings Account

As anyone who is still paying their student loans could confirm, college costs may be a major expense. For many, student loans are second only to the cost of a home purchase. Fortunately, time is on your side when saving for college for those with young children. The funds you put toward your child’s future college education may have years to grow. In many states, contributing to a 529 college savings account might even provide you with a state tax credit.

Additionally, 529 funds do not have to be for a specific child. If your child gets a scholarship or decides not to attend college, you are free to change the beneficiary to someone else, even yourself. These accounts may also pass down and can be used by grandchildren.

Check Your Health Insurance Coverage

Health care costs might also be a huge part of any family’s budget. And while many employer-sponsored health insurance plans may provide you with decent coverage at a reasonable cost, this is not always the case. Some families with fixed annual health care expenses may benefit from a lower deductible plan that provides more coverage, while other families with infrequent health care costs might find a high-deductible health plan with lower premiums is an easier expense in their budget.

If you are not sure about your options, a financial professional or insurance broker may be able to provide more information.

Important Disclosures

The opinions voiced in this material are for general information only and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

This article was prepared by WriterAccess.

As an engineer, you already likely know the importance of accurate input when it comes to the final equation, which may put you ahead of the game when it comes to managing your finances. Below are a few ways engineers could apply their skills to their financial planning process.

Automate and Optimize Your Finances

 

In today’s digital society, it’s easy to put bills on autopay and make payments online most of the time. And for regular, steady bills like cable and internet, your mortgage or rent, your cell phone, and any student loans or auto payments, setting up recurring payments may relieve you of the need to remember to pay dozens of different bills each month. As long as you have an adequate financial cushion to cover these bills when they come due, automating your finances may save you time, effort, and the potential for late fees and collection notices.

Stay Flexible

 

It may be easy for many people, engineers in particular, to treat their finances with a certain amount of rigidity—especially if you have a steady wage and relatively stable expenses. However, the ability to pivot or adjust your finances to account for changes in income, unexpected expenses, and other surprises may be invaluable. Try to keep an open mind and remain flexible when challenges or opportunities come your way.

Invest for Your Future

Engineers may make anywhere from $50,000 to $80,000 or more per year, well above the median individual income in the U.S.1 Use this salary to your advantage by setting aside some funds for your future, including your retirement.

If your job provides a 401(k), this may be a useful place to stash up to $20,500 per year (or $27,000 per year if you’re age 50 or older).2 Your 401(k) contributions won’t count toward your taxable income, saving you money in taxes while allowing you to save for future expenses. Some employees also contribute up to $6,000 per year to an individual retirement account (IRA) or Roth IRA as long as your earned income meets certain limits. Setting aside these funds now may not only provide you with a nice nest egg upon retirement, but it may also get you in the habit of saving and help you avoid lifestyle creep when your income increases.

Important Disclosures

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking: 1-05217801

1 https://www.ziprecruiter.com/Salaries/What-Is-the-Average-Engineer-Salary-by-State 2 irs.gov/newsroom/irs-announces-changes-to-retirement-plans-for-2022

Financial goals are essential. Setting them will help you to obtain the things you want out of life as well as live the lifestyle you desire, both during your working years and in your retirement. But obtaining these goals isn’t always easy unless you develop a money mindset that aligns and drives you to these goals. So how do you create this mindset to give you the ideal chance of obtaining your financial goals?

Determine Your Values

The easiest way to be confident with your financial goals is to align your spending habits with your values. This will allow you to better stick to your spending habits. So to start, you will need to determine the values that are important to you. Ask yourself, what do you value most, your family, your freedom, your security, or your health? In what order do you place these priorities?

Once you have established these values, you need to spend your money in a way that correlates with these values. For example, if your family is most important, you may want to focus on saving for your children’s future education, instead of spending the money on expensive clothing or take out.

Determine What You Need to Do to Work Toward Your Goals

Once you have established your goals and determined what you value most in your life, you will want to make a plan to pursue those goals. Want to be able to travel during your retirement? Come up with ways to increase your retirement savings. Invest more in your employer-sponsored account. Cut back on spending that is not necessary. Learn how to develop and manage a financial portfolio that may help you to address your goals.

Start Small

 

Changing your money mindset involves changing the way you think about money and spending it. But making large changes quickly will rarely work over the long term and may act as a deterrent, causing you to give up on your goals before you have a chance to obtain them. After you have determined the changes that you need to make, implement one change each month. That way, you will have time to get used to the small change and how they affect you, without feeling overwhelmed. The changes should be simple such as tracking your spending for the month or opening a retirement savings account.

Follow the tips above to change your money mindset and get your head in a better place which may make your future financial goals seem easier to obtain.

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.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL tracking #1-05318508.

Sources

https://www.iwillteachyoutoberich.com/psychology-of-money/

https://www.ruleoneinvesting.com/blog/personal-development/4-valuable-tips-for-a-healthy-money-mindset

https://lauradadams.com/money-mindset-tips-tools-for-financial-success

The Gatewood Wealth Solutions Investment Committee is excited to announce our new investment strategy: Cash Flow.

For those of you who have been with GWS for a while, you know that one of our core financial planning strategies is creating and maintaining clients’ cash Hub Accounts, which remain liquid should they be needed in the case of a market downturn. That way, clients can keep the rest of their money in the market, without needing to pull it out in uncertain times. This has been the cash portion in your personal risk bucket, which allows us to invest for long-term returns and weather bear markets in your market risk bucket.

The key is figuring out exactly how much money to keep in the cash hub and how much to keep in the market, which depends on a number of economic and personal factors (click here).

As a client, your cash Hub Account acts as an important buffer in providing you a sustainable cash flow no matter the economic conditions. This intentional margin of safety has proved quite helpful during the trailing three years of two bear markets.

But what if that money could also be working for you and earning interest, while still serving as a buffer?

Enter our Cash Flow strategy. This approach brings together the best of both worlds — keeping your cash Hub Account intact, while also using it to generate additional interest for you. Before we implemented this strategy, the money in cash hubs typically generated only 0.35%, or 35 bps. The National Deposit rate for savings accounts is 0.37% with checking accounts much lower.

Source: www.stllouisfed.org

Am I a Good Fit for the Cash Flow Strategy?

This strategy works best in certain situations, such as:

• You meet the account minimum: $50,000 (24-month cash Hub Account target of $50,000)

• You like the “personalized pension” approach: Prefer getting monthly checks, similar to pension payments, for living expenses

• You’re planning to take out money for big lump sum purchases: Saving for a house, taxes, or anything big lump sum payment in the future with a known time horizon.

The goal of the strategy is to protect you from ever having to sell from your market risk portfolio during a drawdown. By growing your cash Hub Account now, you’ll be better equipped to keep your personalized pension payments coming while also preparing to take out lump sums in the future.

How Does It Work?

We’ve been coordinating the plan and delivering the personalized pension for clients for years; we just haven’t yet maximized the yield in the cash bucket. Historically, we have raised cash to a 24-month target, meaning we don’t have to pull from your portfolio for two years. If you have 24 months of cash, you’re now leaving a lot of yield on the table considering the recent rise in interest rates. So, there is a spread to earn above pure cash (i.e., cash equivalents and bonds).

This strategy divides funds into four risk buckets: Cash Sweep, Cash Equivalents, US Government, and Credit.

1. Cash Sweep is the shortest-term bucket that holds 0-4 months of expenses, providing the lowest expected return but daily liquidity.

2. Cash Equivalent is for cash that will be needed within the next 10 months and is invested in money market securities with an average maturity below 60 days, offering higher expected returns than pure cash.

3. The US Government bucket invests in high-quality US government securities with a longer duration, offering higher yields from the term premium.

4. The Credit bucket invests in securities with longer maturities and higher credit risk, offering higher expected returns from the term premium and credit premium, with an investment horizon of at least 16 months.

By allocating your cash into funds according to time horizon and need, you can earn interest on your cash hub money while still keeping it appropriately liquid. While there is our Advisory management fee, it’s the same as your family’s current fee, and the yields net of fees are still much higher than the standard 35 bp interest you might make in a savings account or cash sweep account.

If you’d like to speak with your Client Care Team about this strategy and if it may be right for you, don’t hesitate to reach out!

* Please note that throughout this blog, “cash” refers to cash and cash alternatives, not cash sweeps, unless otherwise noted.

Disclosures

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Financial literacy is crucial, not only for adults but for everyone in the family. When you have a good foundation of financial literacy, you will have a greater understanding of money and prepare yourself for a brighter financial future. Ready to improve the financial literacy of your family? Below are a few ways to get started.

Help Them Understand How Money Works

One of the first steps in teaching your family financial literacy is helping everyone understand where the money comes from. When it comes to adults, income is most likely to come from a job. For children, their income is most likely an allowance, a part-time job, or the occasional influx of birthday or other gift money. Next, they will need to understand that the things they spend their money on are considered expenses. Get your children to understand the type of expenses associated with daily living, so it won’t come as a surprise when they encounter their expenses.2

Show Them How to Distinguish Between Needs and Wants

 

An important thing to instill in children early is the differences between needs and wants so that they learn how to spend their money appropriately. Tell them that needs are items that aren’t easy to live without, such as food, shelter, and clothing. Explain to them that wants are items that you would like to have but do not need. It is essential that they understand that spending money on wants should wait until after they are sure that all of their needs are met.1

Let Them Know the Importance of Savings

Children need to know that, in some instances, expenses will be larger than anticipated. Because of that, savings are critical. Saving money when possible is vital to have the funds for large or unexpected expenses. With kids, you may want to start teaching them to save by showing that if they put their money away diligently, they will be able to purchase a much more expensive item they really want.2

Teach Them to Budget

Teaching your children to budget is as important as teaching them how to save. With a budget in place, they will be able to satisfy their needs, learn to put money away for savings, and only spend their money on wants when they have it to spend. Budgeting is also a crucial tool to see where your money is going and find areas where you are able to cut back on expenses if needed. To create a simple budget, you need to account for all possible income and then calculate monthly expenses. If your income is less than your expenses, more income will be needed, or expenses will need to be cut. 1

Teaching financial literacy early on will help you prepare your family for the future and give them tools to help stave off financial problems while helping them pursue their financial 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

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05359966

Footnotes

1 Money Matters: Financial Literacy for the Whole Family, ABC Money Matters, https://abcmoneymatters.ca/wp-content/uploads/2019/02/MM-SeminarSeries-Financial-Literacy-2019.pdf

2 Teaching Children About Money, Family Ed Center, https://familyedcentre.org/money-matters-when-parenting/

We’re thrilled to announce that Barron’s has once again named John Gatewood to the Barron’s Top 1,200 Advisors List! The list is based on a variety of factors, including assets under management, revenue produced for the firm, regulatory record, quality of practice, and philanthropic work.

“I am tremendously proud of our entire GWS team for this recognition,” said Gatewood Wealth Solution’s Founder & CEO John Gatewood. “Our advisors go above and beyond every day to help clients become and remain financially self-reliant by providing the highest level of personal service and financial advice.”

Thank you to our hard-working team for helping us earn this recognition, as well as to our loyal clients. It is a privilege to serve you!

To review the full list or get more information, visit here.

Disclosures

Barron’s Top 1,200 Financial Advisors is based on assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work.