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Investment Strategy and Avoiding Emotional Interference

Plan Ahead to Overcome the Emotional Reactions that can skew prudent Investment Strategy
Wednesday, 13 January 2021

Investment Strategy and Avoiding Emotional Interference

As humans, we are emotional creatures, and our feelings can have a tremendous impact on our behavior. When it comes to investing, this can inhibit our ability to make sound financial judgments. In fact, many poor investment decisions have been made by investors who became too emotional and let their behavioral biases overrun their rational thoughts.

For this reason, it’s crucial to understand how emotion can interfere with your investment success. We all go through life with various ups and downs and hiccups along the way. This can cause fear and uncertainty – both fertile fields for emotional financial decision-making.

Below we will discuss three emotional biases in particular that can wreak havoc on your investment strategy – if you let them.

Why Young Investors Should Choose Roth Over Traditional IRAs

Savings Considerations for Your Early Earning Years
Monday, 21 December 2020

Why Young Investors Should Choose Roth Over Traditional IRAs

When it comes to investing, an earlier start means your retirement savings will have more time to grow and you can take full advantage of the magic of compounding. However, many young investors find it challenging to truly focus on saving for retirement, let alone get choosy about the different savings vehicles like Roth IRAs or Traditional IRAs. After all, life is often full of hectic changes and transitions, both at work and personally. If you’re a young investor, you’re in your early earning years when potential job mobility is high, and you’re probably focused on things like buying a home, getting married, and having children. Even if you do find the time and resources to put a bit away for retirement in the midst of all this, you may not believe it’s enough to require a meaningful tax strategy.

Of course, the opposite is true. It is during those early earning years when the true impact of your savings is strongest. The sooner you begin saving – any amount at all – the better off you’ll be in the future when you become much more focused on building your nest egg for retirement.

RMD Strategies to Reduce Taxes

How Planning Ahead Can Help to Minimize Your Tax Burden in Retirement
Friday, 30 October 2020

RMD Strategies to Reduce Taxes

Are you saving for retirement with a traditional 401(k) or IRA? If so, you’re probably enjoying the fact that these investment vehicles are tax-deferred, meaning you haven’t had to pay any taxes on your contributions yet. That won’t happen until you take withdrawals from your accounts once you retire.

Most people assume this is advantageous because their income tax rate will be lower in retirement than it is while they’re working, and that’s certainly true for some people. So, for these folks, it’s savvy to save tax-deferred and then pay taxes on their savings later when the tax rate will be reduced. This is the ideal scenario.

So, what happens if your retirement tax scenario is… less than ideal? What if you tap into your accumulated wealth when you retire and, combined with Social Security and Required Minimum Distributions from your 401(k) or IRA, you end up in the same or higher tax bracket? Fortunately, there are a few strategies you can use to minimize the impact of your RMDs in order to reduce taxes, and we’ll discuss each of them below. First, though, let’s review RMD basics.

HSA or FSA: Which Flexible Spending Arrangement Should You Choose?

How to Choose the Tax-Advantaged Account That's Right for You
Monday, 28 September 2020

HSA or FSA: Which Flexible Spending Arrangement Should You Choose?

There’s been a lot of buzz in recent years about Health Savings Accounts and Flexible Spending Accounts – HSAs and FSAs respectively. Both are tax-advantaged accounts that let you save for medical costs, and many companies offer them as options in employee benefits packages. There are good reasons to take advantage of both HSAs and FSAs, but there are key details that differentiate them. Since you typically cannot have both, it’s important to determine which is the better option for you.

Doctors: How to Use Debt to Your Advantage

When to Use Leverage as a Means for Growth
Wednesday, 02 September 2020

Doctors: How to Use Debt to Your Advantage

For many people, doctors included, the word “debt” has only negative connotations. After all, most of us took out considerable student loans to finance our educations. However, debt can also be used to your advantage when you leverage it for growth.

Investing for Growth Versus Paying Down Debt

Some doctors are quite comfortable with excessive debt, choosing to invest more of their income in tax-advantaged accounts, while others eschew investing at all in order to throw every available dollar toward erasing their debt. Most doctors, though, fall somewhere in the middle and are constantly asking themselves how to best balance investing in tax-advantaged accounts versus paying down debt.

If you find yourself in this middle ground, here are a few basic recommendations, in order of financial importance:

Five Tips for Retirement Planning in Your 50s

How to Move Smoothly into Your Next Chapter of Life
Wednesday, 19 August 2020

Five Tips for Retirement Planning in Your 50s

Many people find that their 50s are an eventful decade, full of milestones like children leaving the nest and mortgage loan amounts finally dwindling to zero. It can also be the time in life when you find yourself earning more than ever, while also seeing your retirement looming close on the horizon.

All of these things make this decade of life a great time to make financial tweaks to ensure you’ll be on track for the retirement you’ve always dreamed of. Here are five tips to take in your 50s to help you achieve your retirement goals:

1.     Give Your Savings More Attention

Once you hit your fifties, it pays to boost your savings. That’s because the IRS allows you to take advantage of “catch-up” contributions to your tax-advantaged accounts. Even if you’ve already been maxing out your 401(k) contributions, you can contribute an additional $6,500 once you turn 50. You can also begin contributing an extra $1,000 per year to your Roth IRA.

If you’re interested in going above and beyond catch-up contributions, you may find benefits in a deferred annuity, too.

Have You Built Your Business Succession Plan?

Here’s How to Get Your Road Map in Place Right Now
Tuesday, 21 July 2020

Have You Built Your Business Succession Plan?

If you own your own business, you have most certainly considered that someday you will leave the company, whether to retire or for another professional pursuit. If you were working for someone else, it would be as easy as announcing your retirement or giving two weeks’ notice, but it’s much more complex for business owners. You’ll need a road map for the continued success and financial viability of your company, and one that provides a sense of certainty for your employees and your clients or customers. This road map is called a business succession plan.

Your business succession plan should plot out everything from leadership transition, to how ownership will be transferred, to the price and terms, to how to avoid disputes during this process. It should also be a means to ensure you will have enough money to retire. It is meant to be an all-encompassing plan that will allow you to make your exit confidently, knowing that you have prepared everything necessary for the business to continue to thrive, and for you to take your next step.

Naturally, a plan of this magnitude requires thoughtful strategy. If you’re just beginning to build your business succession plan, this is how to begin.

Small but Important Ways to Prepare for the Unexpected

Here’s a little reminder from the year 2020: anything can happen.
Monday, 22 June 2020

Small but Important Ways to Prepare for the Unexpected

If you’re like most people, you never envisioned that this year would bring a global pandemic, economic uncertainty, or monumental transitions in the way people live and work. However, this is where we find ourselves and, though there is much to be anxious about, there’s a silver lining, too. We’re all facing challenges that remind us just how important it is to prepare for the unexpected and to avoid complacency and procrastination when it comes to our priorities in life.

One of the most important aspects of financial advising – and the most fulfilling one – is helping people determine how to protect their families in the event of an unexpected life change like death or disability. These aren’t comfortable topics to discuss, which causes too many people to put off planning for another day. For most people, though, protecting family is their number one priority and recent world events provide the important perspective that we need to be prepared for whatever might lie ahead.

Here are a few steps you should consider taking now if you haven’t already:

Financial Planning in Your 40s: Six Moves to Make

This is the decade that sets the stage for your long-term goals.
Tuesday, 02 June 2020

Financial Planning in Your 40s: Six Moves to Make

Your forties can feel like a momentous decade for several reasons, one of which is that it may be the time in your life when you truly begin to feel financial pressure. Your retirement could be looming in the distance, you may be sending children to college soon, and you might begin focusing more on building your net worth. With the economic fallout and market volatility caused by the novel Coronavirus, you may be feeling the pressure even more than expected.

As you navigate this consequential decade, here are six steps to take that are designed to help you prepare for your financial future.

Retirement Planning: How to Determine Your Personal ‘Enough’ Number

Do the Math Now to Set Clear Goals for Your Future
Tuesday, 19 May 2020

Retirement Planning: How to Determine Your Personal ‘Enough’ Number

Retirement planning forces you to think about lots of different numbers: annual investment returns, your debt to income ratio, your net worth, and more. Perhaps the most important number, however, is your personal “enough” number.

Your “enough” number is that magic figure that defines exactly how much you need in order to have the retirement you desire. It’s the number that helps you set financial goals that are tied to your lifestyle goals. Identifying it is a necessary step in setting your retirement savings goals and in understanding whether you’re on track to meet them. At this stage of life, while you’re still working, your “enough” number includes the amount you need to fund your basic needs, as well as the wants that make your life enjoyable and the savings-plan required for you to meet your retirement goals.

In a time when many of us are re-evaluating our personal finances as we ride out economic uncertainty, long-term financial planning becomes even more imperative. So, how do you determine your personal “enough” number?

Scams Abound Amid Pandemic Panic

Protecting yourself from internet fraud during the COVID Crisis
Thursday, 02 April 2020

Scams Abound Amid Pandemic Panic

Sadly, as is the case in any crisis, there are those among us who are looking to capitalize on cruelty and take advantage of heightened vulnerabilities. Hackers are trying to lure victims to click on COVID-19 related hyperlinks that contain malicious software and other computer viruses. In some cases, these scams look like official messages from the government and they send people to fake websites where their sensitive information can be stolen. 

The following guidelines can help you protect yourself from these digital scams and stay clear of suspicious links you may come across in your internet travels.

CARES Act Signed into Law –Brings Relief to Millions of Americans

On March 27 the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to address the unprecedented public health and economic crisis related to COVID-19.
Saturday, 28 March 2020

CARES Act Signed into Law –Brings Relief to Millions of Americans

This $2 trillion bill is meant to impact both individuals and businesses and contains significant tax-savings measures. It could affect prior tax years while also creating immediate cash-flow.

Impact on Individuals

Stimulus Checks

Perhaps the most impactful provision for American citizens is the CARES Act’s promise of cash payments of up to $1,200 per single individual and $2,400 for a married couple. Parents will also receive an additional $500 per qualifying child. Payments are phased-out for individuals with incomes greater than $75,000 and for married couples filing jointly with income greater than $150,000.

Take a Pandemic Mental Health Break

Social Media and Viral Laughs are Important for Self-Care, Doctors Say
Tuesday, 24 March 2020

Take a Pandemic Mental Health Break

As we continue to live in uncertain times, self-care is more important than ever. With 24-hour news coverage of the COVID-19 pandemic and growing concerns about how far-reaching novel coronavirus will be in the United States, there are more than a few of us with heightened anxiety. Unfortunately, gone are the days when we could give ourselves a mental break from all the doom and gloom by grabbing a drink with a friend after work or hitting the gym for an intense workout session. Guidelines recommending social distancing and state-mandated lockdowns have made it difficult for many of us to manage our stress in typical ways, and this is concerning for our individual and collective mental health.

Enter social media. 

In an age when we are sometimes connected to our digital devices to a fault, social media is now providing us with much-needed feelings of connection to one another. There are bright spots in any time of darkness, and several feel-good stories and videos have gone viral thanks to Facebook, Instagram, Twitter, and Snapchat. These outlets are allowing people to share smiles, laughs, and breaths of fresh air from the constant, worrisome news coverage on the global health and financial crises.

Positive Viral Stories and Videos

If you’re in need of an optimistic story in these trying times, take a moment to check out each of the smile-inducing links below:

Tax News: IRS Announces Extended Deadline for 2019 Tax Returns

Americans Can Defer for 90 Days
Friday, 20 March 2020

Tax News: IRS Announces Extended Deadline for 2019 Tax Returns

As we continue to face uncertain times, the IRS has made a welcome announcement.

Treasury Secretary Steven Mnuchin has announced that the IRS has decided to extend the filing and payment deadline for 2019 tax returns, allowing taxpayers to defer until July 15. Mnuchin indicated this move will put $300 billion into the economy during a time of great economic concern over the consequences of the COVID-19 pandemic.

The payment deferment is subject to certain caps, however. Individuals may defer tax payments of up to $1 million, while corporations may defer up to $10 million. The limits were purposefully selected to benefit small businesses that report income through S corporations, partnerships or other pass-through entities.

How to Remain Hopeful and Keep Perspective During the COVID-19 Outbreak

Tuesday, 17 March 2020

We are facing something we have never faced before in our lifetimes. That is a fact and, in a time, when the news of the pandemic spreading and the recommendations on social distancing getting broader by the day, it can be hard to feel certain or safe about anything. 

As troubling as it is to watch the unprecedented market decline and hard it is to tune out the fact that you know you are losing a lot on your investments, we need to maintain our health and the health and safety of our family, friends and neighbors as the number one priority. Covid-19 which emerged late in 2019 in China has spread rapidly worldwide since then and is a global pandemic. The measures taken by leaders around the globe have been strong leaving most children without a classroom to go to, parents working from home or without a job altogether and investors panicking about what is to come.

This disruption to daily life and to our psyches is substantial and it’s terrible. The coming weeks will not be easy, but these measures are practical and prudent.


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