Are you on track for retirement? Do you have enough money saved at this point in your life to retire or reach financial freedom by 65? One of the biggest questions I hear is: How much money do I need to save for retirement? In this episode of Best in Wealth, I do my best to answer that question using the formula Charles Farrell outlines in his book, (https://www.amazon.com/Your-Money-Ratios-Financial-Security/dp/1583334165) . You need to take actionable steps now to be prepared for your future. Outline of This Episode[0:35] What do you dream about doing? [3:58] Are you on track for retirement? [11:15] Why you need 80% of your current income [13:51] How do you come up with the $60,000? [17:37] What’s your job now? Get retirement ready with Charles Farrell’s formulaYou need to create a detailed retirement plan to really zero in on your goals and get the right steps in place to prepare. In his book, Charles Farrell shares a simplified version of how much savings you’ll need. I’ll give you some simple guidelines from this book that demonstrate where you should be at each stage of life. The goal is to hit at least 12x your household income in order to retire, so you can live off of 80% of that of your household income in retirement. Charles developed the Capital to Income Ratio. You can use it to find out if you’re on track to get to 12x your income by the time you retire. If your household income is $100,000 annually, you need to save $1.2 million for retirement. So where do you need to be at each age? Here are the income ratios by age, with the approximate amount you should have saved if your household income is $100,000 annually: Age Income Ratio Savings Required 25 0.1 $10,000 30 0.6 $60,000 35 1.4 $140,000 40 2.4 $240,000 45 3.7 $370,000 50 5.2 $520,000 55 7.1 $710,000 60 9.4 $940,000 65 12 $1.2 million So are you on track for retirement?Based on the table above—are you on track for retirement? Here’s how to calculate it: Take your household income and multiply that by the income ratio that correlates with your age to see if you’re currently on track. It’s easy to calculate if you’re paid a salary. If you aren’t, count the average of your pay for the last 4 years as your income. By the way, by money saved, we’re talking about things such as your 401k, IRA, annuities, CDs, life insurance, checking and savings, real estate, etc. Please note that your home is NOT a capital investment. How do you live on 80% of your current income?How do you live on 80% of your current income in retirement if you need 100% of it now? Where did Charles come up with that number? If you’re going to get to 12x your income by retirement age, you have to be saving 12–15% of your $100,000 annual income to get there. If you’re saving 12% now, you really only need 88% of your income to live off of. In retirement, you won’t be saving for your retirement anymore. Plus, your mortgage should be paid off by the time you retire. If your mortgage accounts for 20% of what you pay and we take off another 12% for savings, 7.65% for social security taxes, that brings you down to $60,000. So you really only need $60,000 to live off what you’re making right now. Social security will play a role—it typically replaces 20% of your income. If you’re making around $100,000 a year, it will make up the other $20,000 to bring you to the projected $80,000 a year in retirement. You want that extra $20,000 cushion to account for things like yearly inflation, medical expenses, or perhaps even vacations. Keep listening to find out why I think the 5% rule can be dangerous—and what I think you should do instead. What is your job now?But Scott, what if I’m not on track? Are you anywhere close? What if you’ve fallen behind? If you’re not on track for retirement, your job is to get on track. Once you figure out what you should have saved at your current age, there are some things you can do: If...

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How to Get on Track for Retirement, Ep #149

When I’m about to shake someone’s hand, pat their back, or give them a hug I stop short and say to myself: “Welcome to the new normal.” The COVID-19 crisis is new to all of us. The inability to shake hands, social distancing, the necessity of wearing face masks—it’s all new. But the phrase “The New Normal” isn’t, it’s been in use for decades. An article was published on the cover of Business Newsweek on August 13th, 1979 that was titled: The Death of Equities. In the article, they called inflation the new normal. Inflation was destroying everything and negatively impacting the stock market. The article said the stock market was a loser’s game and that—besides a lucky few—you wouldn’t make money in the stock market. The phrase has been tossed around numerous times throughout history—but what does it really mean? How does the new normal pertain to the stock market? In this episode of Best in Wealth, I talk about what the new normal has meant historically and what it should mean. [bctt tweet="Welcome to The #NewNormal. In this episode of Best in Wealth I talk about what that means—and what it should mean. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:18] Welcome to the new normal [3:44] The New Normal as it pertains to the market [7:01] The best way to deal with a crisis [9:06] We need to call it something different [14:18] Let’s make planning the new normal [15:06] What if you had listened to that article? What every “New Normal” has in commonWhat can we learn from the past that is predictive in the moment? Almost nothing. People are saying it’s different this time—and they’re right. This recession is because of a pandemic. But there were other crises that led to recessions. The Vietnam war, the savings and loan crisis, the Asian financial crisis, the.com bubble, the great recession of 2008, and many more. Every financial crisis has a different cause and crises keep happening. Why? Because they're NOT predictable. If downturns in the market were predictable, things would self-correct easily. The truth is, all of these events only have one thing in common: each time they happen, people say “It’s different this time”. The best way to deal with a crisisEvery crisis IS different, but the best way to deal with them is always the same. We can’t control the crisis. But what we can control is how we respond to them. You need to prepare to deal with the unexpected before it happens—not when you're stuck in the middle of it. When you're stuck in the middle of it, you make bad emotional decisions. We should call it the old normal—because these things happen. Go back to the principles of dealing with the uncertainty in the stock and bond markets. Things don't line up exactly the way that we want them to, ever. So what do you do? [bctt tweet="What is the best way to deal with a crisis? Listen to this episode of Best in Wealth for my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #NewNormal" username=""] Two things we MUST doYou want to make sure you are doing two things to be prepared when every new normal comes around. Firstly, look at the probability of various outcomes and then decide how much risk you want to take. What is your risk tolerance? What is your risk capacity? What is your required rate of return to achieve everything that you want to? Then we can develop a portfolio that matches your risk level. Secondly, be prepared for market downturns once or twice a decade. Accept that you’ll never know when they’re going to happen. You don’t have to predict the crisis that’s coming, you just need to be prepared for it. When you have a plan and are prepared for a crisis, you feel better before and after they come. You don't need to stress out about your investments because you already know what the outcome is...

Welcome to The New Normal, Ep #148

Do you have a plan for retirement? Or are you just living life and allowing the everyday busyness to drown out thoughts about your future? I firmly believe you need to have a retirement plan in place. In this episode of Best in Wealth, I’ll explain why. I talk about 3 decisions that can impact your retirement plan—either positively or negatively. [bctt tweet="In this episode of Best in Wealth, I share 3 Decisions That Could RUIN Your Retirement Plan. Listen to hear what those are and which path you could take. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Retire #Retirement" username=""] Outline of This Episode[1:02] The THREE decisions that could ruin your retirement [1:43] Two things I learned from a funeral [6:06] Making decisions IS hard [8:54] Decision #1: Failing to plan for retirement [13:38] Decision #2: Planning to work longer as part of your plan [17:42] Decision #3: Not hiring a financial advisor Life is a series of decisionsMaking decisions is hard. Some of us are quick decision-makers while others struggle to make the easiest of choices. But what we don’t always realize is that life is all about decisions. You have to decide whether or not to get married, whether or not you’ll buy a home, and whether or not you’ll have kids. Sometimes, we lock up and don’t make any decisions. But a non-decision is still making a decision. Some people do this with investing. They’re sitting on hundreds of thousands of dollars of cash, but they don’t know how to invest the money. So they let it sit and forego making a decision—and waste everything that they could be doing with that money. Decision #1: Failing to plan for retirementWhy do you need to plan for retirement? Firstly, you want to be on the same page as your spouse. What if your ideas for retirement aren’t the same? It will become a BIG issue down the road when you’re close to retirement and you have each planned two different paths. You need to coordinate and compromise with your spouse now. Secondly, if you don’t plan your retirement, you may never get it. So I advise you to start with the end in mind. Think of your life as a book: You want to write the last page now—or someone else will write it for you. You have really big dreams, right? Start retirement planning now to make sure you have the resources in place to accomplish your dreams. You don’t want to look back on your life and be filled with regret. Regret will leave you bitter, and we don’t need more bitterness—we need more wholesome family stewards. Are there things holding you back? Do you know where to start? Do you need a financial advisor? Not starting and not retirement planning is a non-decision—but still a decision. [bctt tweet="Why do you need to plan for retirement? I share my thoughts in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Retire #Retirement" username=""] Decision #2: Planning to “Just work longer”I knew a guy who was the VP of a large company and was doing quite well for himself. Then the great recession hit. He didn’t have an investment strategy and retirement plan in mind and he panicked. He sold all of his investments at the lowest point he could. He thought he’d be okay, because he’d just work longer and push back retirement. Flash-forward one year, his company started downsizing, and he lost his job. Planning to work past normal retirement age is all well and good—until a wrench is thrown in your plans. And life has a tendency of throwing curveballs when you least expect them. Sometimes your health doesn’t allow you to work longer than you want to. What if your spouse passes away? Suddenly, you’re left trying to hold things together alone. You need to prepare for those curveballs and think about what life could throw your way. Plan for what your...

3 Decisions That Could RUIN Your Retirement Plan, Ep #147

Do you have the right investment mix in your portfolio? Does it include a balance of large and small companies? In this episode of Best In Wealth, I talk about the differences between small and large companies, why you’d want to own either of them, what the science says, and whether or not you can time when to own a small or large company. If you’ve considered adding small companies into your investment mix, check out this episode! [bctt tweet="What should you have in your investment mix? In this episode of Best in Wealth, I talk about small companies and large companies—and why you should invest in both. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:19] What’s been going on with the stock market [3:50] Do you have the right investment mix in your portfolio? [4:43] Where the stock market stands right now [6:31] The definition of what makes a large or small company [8:11] Why would I want to own a small company? [12:22] Why you should demand a higher rate of return with small [14:56] What the science of investment tells us [18:34] Why you shouldn’t apply market timing tactics [21:05] What the performance of small and large companies tells us [22:20] Know what your goals are before you develop your investment plan What defines a small or large company?A large company is calculated by taking its outstanding shares and multiplying them by their current stock price. If the resulting number is $10 billion or higher, it’s considered a large company. Think brands like Apple, Amazon, Facebook, McDonald’s, etc. A small company is calculated in the same way—by taking their outstanding shares and multiplying them by their current stock price. However, If the resulting number is between around $500 million and around $2 billion it is considered a small company. These still aren’t “small” by most people’s definition of small (i.e. a local plumbing company). Right now, year-to-date, The S&P 500 is only down 3.5% and small companies are down about 15%. Keep listening as we discuss why that’s important. Why your investment mix should include small companiesLet’s say McDonald’s is worth $200 billion. McDonald’s has amazing brand recognition, thousands of locations, and years of positive cashflow. Versus Shake Shack—hypothetically worth around $2 billion, less brand recognition, fewer locations, etc. It makes sense to invest in McDonald’s. After all, the odds of them going belly up are slim-to-none. About 3% of small companies go out of business in any given year, and up to 6% during economically tough years. But it’s also far easier to take a $2 billion company and double it to $4 billion than to double McDonald’s massive $200 billion empire. Shake Shack is a riskier investment, but as an investor, you can demand a higher rate of return owning Shake Shack vs. McDonald’s. [bctt tweet="Why should your investment mix include small companies? I share the details in this episode of Best in Wealth. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] What does science tell us?The first key I emphasize when you invest in anything is that it has to make sense. The data has to be persistent and robust and the science has to be pervasive, in the US and around the world. So what does the science tell us? From 1928 to 2019, large companies average a return on your investment of approximately 9.9% a year. Small companies average a return of investment of 11.94% a year. A 2% difference might seem minuscule, but think about it this way: If you allot $100,000 to large companies, hold it for 30 years and obtain a 9.9% ROI, you’d see a $1.7 million return. If you allot that same $100,000 to small companies, hold it for 30 years, and get the 11.94% return on your investment—you’d see a $2.9 million...

Your Investment Mix: Small Companies or Large Companies? Ep #146

Do you and your spouse fight frequently about money? Are you on completely different pages when it comes to spending money? Do you feel like you’re being heard? You should start the conversation now by having regular meetings with your spouse to discuss your financial plan. If you’re ready to win with money in your marriage, listen to this episode of Best in Wealth! [bctt tweet="In this episode of Best in Wealth I share 4 Steps you can take to WIN with Money in Your Marriage! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:42] How are you surviving Coronavirus? [4:42] 3 reasons married couples fight about money [9:32] Step #1: Actively listen to your spouse [13:00] Step #2: Respect what your spouse said [14:11] Step #3: Compromise to find a middle ground [15:53] Step #4: Commit to a spending plan [20:11] Where are you in your marriage? Three common reasons married couples DON’T win with moneyMost couples that fight about money fall into one of these three categories: You have debt: One or both of you have debt. The higher your debt the higher the chance you’re fighting about it. Debt breeds stress which leads to more arguments. Different values: Do you and your spouse hold different values about money? Does one of you find comfort in saving money and the other like to spend money on comfort? My wife enjoys spending money on vacations while I’m more of a homebody. Neither is bad—just different. Income disparity: Does one of you work outside the home and the other is a stay-at-home parent? OR does one spouse make more than the other? Sometimes, the spouse that makes more starts referring to the household income as “my” money—which is dangerous to get caught up in. Everyone comes from different family backgrounds and has different beliefs about money. But there are some steps you can use to overcome those differences to get on the same page. Step #1: Actively listen to each otherThe first strategy is to actively listen to each other. Spend time talking about short and long-term goals for your future. What’s important to you? When do you want to retire? What do you need to save monthly to retire when you want to? To win with money, I recommend setting monthly “money dates” where you meet in a low-tension setting to discuss your budget for the month and where your money will be allocated. It’s important to set aside time for each other to talk and listen. [bctt tweet="In order to #WinWithMoney, married couples need to actively listen to each other. Listen to this episode of Best in Wealth to learn more! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Step #2: Respect your spouse’s feelingsSo you’ve set aside time to chat with each other about your money goals and have listened to your spouse’s desires. Now you need to take it a step further and respect what your spouse said. Just because something isn’t important to you doesn’t mean it isn’t important to your spouse. When you take the time to actively listen and comprehend what your spouse wants to do with your budget and respect their opinions, you’re less likely to fight. Step #3: Compromise is KEYOnce you’ve practiced active listening and chosen to respect your spouse's opinion you move on to find a compromise. Compromise will allow you both to feel comforted with how you’re handling your money. Compromise is powerful. It shows that you really listened and are willing to make sacrifices so that each person is happy with the decisions you land in. Don’t let the connotation of compromise be negative—compromise is a wonderful way to build a foundation of trust in your marriage. [bctt tweet="Compromise is KEY to a healthy money mindset in your marriage. Learn how to win with money by listening to this episode of Best in Wealth! #wealth...

4 Steps to WIN with Money in Your Marriage, Ep #145

This episode of the Best in Wealth podcast is a crash course: Credit Scores 101. I answer some of the questions you may have: What is a FICO score? Why do you want a good credit score? How do you improve your credit score? When should you consider closing a credit card? I break your credit score down to help you understand how it works for you and why it’s important. If your credit score has you confused, don’t miss this informative episode. [bctt tweet="In this episode of Best in Wealth I talk credit scores: Everything you NEED to know. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:53] My wife’s credit score is always... [5:50] How your credit score is determined [9:15] the NEW standard that just came out [10:23] Why do I want a good credit score? [13:34] How do you build your credit score? [18:48] When should you CLOSE a credit card Credit Score 101: What IS a credit score and HOW is it determined?When someone is talking about a credit score, they’re typically referring to a FICO credit score. FICO stands for “Fair, Isaac, and Company”. It is the oldest and most well-known of the credit reporting agencies. A FICO score can range from 300 to 850—a higher score is better. Your credit score is based on your credit history. Its purpose is to help lenders estimate how likely you are to repay the money that you borrow. How are the scores rated? Poor = 579 or lower Fair = 580–669 Good = 670–739 Very Good = 740–799 Exceptional = 800–850 Now that you know what a FICO credit score is, and what the ranges are—how do they calculate your rate? It’s based on these things: Credit Card Payment History: This accounts for 35% of your credit score. Credit Utilization: Your credit card limit and how much you’re using accounts for 30% of your score. You want to use under 30% of your credit limit at all times or it will negatively impact your score. Age of Credit History: How long your credit accounts have been open accounts for 15%. Credit Account Types: This accounts for 10%. Hard Inquiries: When a bank, car insurance, employer, etc. check your credit score it impacts your credit and counts as much as 10% towards your score (NOTE: Checking your OWN credit score doesn’t make an impact). A NEW standard was just announced that will shift these percentages. Listen to find out what those changes are! Why you should strive for a good credit scoreThere are 6 reasons why you want a good credit score: A better credit score typically equates to a better interest rate on loans when you go take out a loan. It can be a difference of thousands of dollars. Insurance companies use your credit score to calculate your rates. The difference between a poor score and a high score can impact your rates as much as 67%. Your credit score is checked and impacts whether or not you can rent an apartment or home. A high credit score can get you a security deposit waiver on utilities when you purchase a new home. If you’re buying a new phone and have a poor credit score, a carrier may require a deposit. Prospective employers may look at your credit score to determine whether or not they’ll hire you. [bctt tweet="Why should you strive for a good credit score? I share 6 reasons in this episode of Best in Wealth (and so much more). Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Build a better credit scoreWe’ve established WHY you want a good credit score. So what do you do if you have a poor score? Can you build it up? The simple answer is yes—you CAN rebuild your credit score. Here’s a few ways you can increase your credit score: Don’t be late paying your bills—EVER—it will have a long, far-reaching impact. Avoid maxing out your lines of credit—keep...

Credit Scores 101: Everything You Should Know, Ep #144

Is it time to prepare for a recession? I predicted at the end of 2019 that one would be coming—and many argue that we are already deep in the trenches. But what is a recession? What indicates that we ARE in a recession? In this episode of Best in Wealth, I’ll share those indicators, what we can learn from past recessions, and 5 tips to prepare yourself and your family. [bctt tweet="In this episode of Best in Wealth I share 5 Tips to prepare for a recession. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[4:25] How I predicted a recession was coming [6:20] What is the definition of a recession? [7:03] What are the indicators of a recession? [10:07] What we can learn from past recessions [16:30] Recessions don’t need to be scary [17:40] 5 Tips to prepare for a recession [24:55] What did we accomplish while life was standing still? What IS a recession?The definition of a recession is a period of economic decline within a certain region such as the United States. There must also be at least two quarters of negative Gross Domestic Product (GDP). Technically speaking, we won’t know if we’re in a recession until the GDP reports for the 1st and 2nd quarter of 2020 come in. So what are the indicators of a recession? An increase in unemployment numbers A downturn in the stock market A downturn in the housing market Negative returns in GDP We are slowly checking the boxes on all these indicators. Unemployment is past 20%. The stock market at its lowest was down -37.5% from its 52-week high. It’s projected that home sales will drop 35% in the 2nd quarter compared to the end of 2019. The GDP will be the final nail in the coffin, but it appears we are well on the way to our 16th recession. What we can learn from past recessionsThe question at the back of everyone’s minds is “Should I be afraid?”. The best way to answer that question is to look at statistics from past recessions. There have been 16 recessions since 1929 The average recession lasts 16 months 11 of 15 recessions end with your portfolio in positive territory after 2 years 4 of the 15 recessions required holding your portfolio 3-5 years to see positive returns Only one recession—the great depression—required holding your portfolio for over 10 years to see a positive return Recessions don’t need to be scary. The mass media wants us to believe they are so we make emotional decisions. Stocks WILL go down, but the WILL recover. So hold tight and don’t make emotional decisions. [bctt tweet="What can we learn from past recessions? Listen to this episode of Best in Wealth to find out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] 5 tips to prepare for a recessionI wanted to share 5 tips to help you prepare for a session. You don’t have to panic and make hasty decisions. Instead, this is what I recommend: Keep investing. The money you invest this year will have more growth potential than what you invested in 2019 because you’re buying in at lower values. Have any extra money on the sidelines? Put it to work! Don’t take your inflation adjustment. If you’re retired you typically take out 4% from your retirement plus a percentage for the rate of inflation. I recommend leaving the extra in your portfolio this year to extend its longevity. Build a spending plan. Put a budget in place and track your expenses so you use your money wisely. You’ll often be able to find extra money that was being wasted. Increase your emergency fund. I recommend having 3-6 months worth of expenses in an emergency fund. The larger it is, the longer you can withstand not getting a paycheck. I recommend splitting any extra money (stimulus checks anyone?) you have between your emergency fund and investments. Cut back on your

5 Tips to Prepare for a Recession, Ep #143

Is it ever a good time to take your money out of the market? I’m sure everyone was tempted to jump ship when they saw the S&P 500 drop to negative 37.4%. Numbers like those can make anyone reconsider their investment strategy. Will we be better off if we step out of the market for a while? In this episode of Best in Wealth, I dissect 3 market timing strategies. I’ll cover which yields the most favorable results—and land on one strategy that outperforms the rest. [bctt tweet="In this episode of Best in Wealth I dissect 3 Market Timing Strategies—and share which gives you the best return. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:12] When people say “I told you so” [4:07] Stick to a set of fundamental principles [9:59] The two decisions you have to make [11:36] Market timing strategy #1 [14:22] Market timing strategy #2 [16:31] Market timing strategy #3 [19:17] The buy and hold strategy [21:15] What can we learn from these numbers? [23:01] How do we maintain control? Market Timing Strategy #1If we owned stock in the market from July of 1926 to December 2019, we’d have an annualized rate of return of 9.57%. In the following strategies, we will be comparing the approximate annualized rate of returns to that average. The first timing strategy involves taking your money out when the market is down 10%. Then, you wait either 100, 200, or 300 days to inject your money back into the market. After each time-frame, this is what the returns look like: 100 Days: Annualized rate of return of 7.11% 200 Days: Annualized rate of return of 6.67% 300 Days: Annualized rate of return of 5.89% As you can see, these numbers are far below the average of 9.57%. We need a timing strategy that outperforms these numbers. Market Timing Strategy #2In this strategy, we hold our money until we hit bear market territory—a 20% drop from the high. If we pulled our money out of the market and reintroduced it at: 100 days: 6.8% annualized rate of return 200 days: 6.08% annualized rate of return 300 days: 5.75% annualized rate of return This strategy still isn’t faring any better—let’s move on to the 3rd. [bctt tweet="One market timing strategy consists of pulling your investment out of the market when it’s down 20%. Listen to this episode of Best in Wealth for a full explanation! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Market Timing Strategy #3You’ve waited almost as long as you can bear. The market has dropped 30% and everyone feels the need to bail. We want to get to safety and wait for better times. So what happens if you yank your money at this point? 100 days: 8.71% annualized rate of return 200 days: 8.55% annualized rate of return 300 days: 8.66% annualized rate of return Alright, so this is by far the best strategy. It’s a decent rate of return—but still over a percent away from that 9.57% average that we want to be hitting. So what do you do? The BEST strategy: Buy and HoldAs much as it pains you to think about it, the buy and hold strategy is your best bet. In fact, leaving your money in the market will add up to hundreds of thousands of dollars throughout your lifetime of investing. Granted, these are all hypothetical numbers based on looking at the indexes, but the concept holds true. Financial downturns are unpleasant for everyone, but investors are trained to reduce an exasperating circumstance by adhering to our core principles. A famous quote of unknown origin goes: “You don’t rise to the occasion, you sink to the level of your training.” It’s why we diversify your assets, consistently allocate them, and move towards higher expected returns. We stay away from market timing and stock picking because it undermines your ability to...

Dissecting 3 Market Timing Strategies, Ep #142

The CARES Act—Coronavirus Aid, Relief, and Economic Security Act—is at the forefront of everyone’s mind right now. It’s an estimated $2 trillion relief package with over $500 billion being allocated to individual rebate checks. $500 billion is being dispersed to affected industries, $400 billion for small businesses, $300 billion for state and local government, and $150 billion for hospitals and healthcare systems. That is a LOT of money. In this episode of Best in Wealth, I aim to help you understand what affects you as an individual. I’ll cover who qualifies for a recovery rebate check and how it’s calculated. I’ll also talk about when and how you’ll be receiving the money—and what the government wants you to do with it. Don’t miss this episode that’s packed full of need-to-know information. [bctt tweet="In this episode of Best in #Wealth I dissect what you NEED to know about the CARES Act—and the rebate check you may get. Don’t miss it! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Coronavirus" username=""] Outline of This Episode[2:13] Every corner of our house is spotless [3:28] Breaking down the CARES Act [5:21] Details on the recovery rebate checks [12:40] How your qualification will be calculated [17:57] WHERE and WHEN will we be paid? [20:16] How else will the CARES Act help? [27:35] Embrace the practice of patience Breaking down the recovery rebate checkEveryone is eligible for a rebate check. Just let that sink in for a second. Every single adult qualifies up to $1,200 and couples filing jointly up to $2,400 in total. You will receive up to $500 for each child under the age of 17 (NOTE: that does NOT include ages 17 & under). The average family with two children would receive $3,400 in total. Notice how I said "up to" in the previous paragraph. That's because there are thresholds in place—for every $100 you are over the threshold you lose $5 of the rebate check. For an individual, the income threshold is $75,000. If you are married-filing-jointly the threshold is $150,000. Hypothetically speaking, if you are married and have 4 children (with an excluded 17 y/o) you’d qualify for $3,900. If you make $176,000 then you are $26,000 above the threshold. $5 being removed for every $100 is a 5% deduction. 5% of $26,000 is $1,300. So the maximum you would’ve received is $3,900 minus $1,300 = a $2,600 rebate check. Keep in mind this is calculated from your adjusted gross income—so student loan interest payments, IRA or HSA contributions, etc. would be excluded from the calculation. How are they calculating WHO will receive the rebates?If you have filed your 2019 taxes your rebate will be based on your 2019 return. If you have not already filed your 2019 taxes, they will determine who gets the rebate based on your 2018 tax return. If you have not filed and made less in 2019 than you did in 2018—file immediately. If you made more in 2019, hold off on filing your tax return if it puts you over the threshold (but be sure to file before July 15th). Technically speaking, this is a 2020 tax rebate. Luckily, if you’ve already received the rebate check and you file your tax return for 2019 and are over the threshold you won’t have to return the money. The downside is for those who made well over the threshold in 2018/2019 but have since been laid off—joining the 3.3 million people who have already filed for unemployment. Your taxes will indicate that you don’t deserve the rebate check—until you file for 2020. If you fall under the threshold at that point, then you will receive the rebate after filing 2020 taxes. [bctt tweet="How are they calculating WHO will receive the #Coronavirus relief rebate checks? Listen to this episode of Best in #Wealth for the details! #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] What is the payment time-frame and...

What you NEED to Know About the CARES Act, Ep #141

What do I mean by ‘build wealth’ while you’re quarantined at home? Many businesses are closing for the foreseeable future. Schools are closing. Parents are learning to navigate working from home while keeping their kids occupied. Our routines are being ripped apart. We are living in unusual times. What was normal yesterday won’t be today. So what do we do? How do we manage this ‘free’ time at home? In this episode of Best in Wealth, I’ll share 3 ways—that aren’t what you think—you can build wealth during the Coronavirus quarantines the world is experiencing. [bctt tweet="In this episode of Best in Wealth, I share 3 unexpected ways to build wealth during the Coronavirus. #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""] Outline of This Episode[1:13] Start a family movie night! [3:47] What you think the episode is about [6:50] Wealth is about all of your cornerstones [7:42] #1 - Reconnect with your family [12:17] #2 - Focus on personal development [17:02] #3 - Stay positive amidst the negativity [21:14] How I overcame a stutter and found my voice What you think I mean when I say ‘Build Wealth’This would be the perfect time for me to tell you to buy into the stock market right now, while they’re at rock-bottom prices. You could get them at steep discounts. Or I could tell you to take some time to assess your risk, perhaps rebalance your portfolios into different asset classes. I could tell you to refer back to your personalized investment policy statement so you don’t make panicked decisions. I could tell you to stay disciplined—it is one of the most important things you can do during this time. But I’m not going to talk about any of these things. So what are the 3 things I am going to share? #1 Reconnect with your familyWealth refers to all of your cornerstones. It isn’t just about building something of monetary value. Have you noticed lately how busy you’ve been? Have you looked at your calendar, like I have, and questioned how you’re going to get everything done? Now, suddenly, we’ve been forced to slow down and take a step back. Volleyball tournaments are canceled. Birthday parties are no more. Church services are being moved online. All of the things that overwhelmed my schedule have disappeared. So I’m going to be intentional about this time and spend time with my family. We’re going to have movie nights and Netflix binges, play board games, and even put on scarves and gloves to play basketball on a still chilly Wisconsin day. We’re going to make meals together. Focus on building a bond with your family. At the end of your life, your pile of money won’t matter much without them. [bctt tweet="In this episode of Best in Wealth, one of the topics I cover is taking this time to reconnect with your family. Listen to the whole episode for other quarantine ideas! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] #2 Focus on personal-developmentWe aren’t watching sports, going to the movie theatre, and we’ve spent time with our family—now what? Why don’t we focus on reconnecting with ourselves? What are things you’ve been putting off? You could read a book, take an online class, or take up a new hobby. Go for a walk in nature and enjoy the beauty around you. If you’re a spiritual person, it's a great time to reconnect with God. Start reading your bible and setting aside time for prayer. Of course, you could take this time to think about your financial cornerstone. Build your habit goals, define a spending plan, sit down with your spouse and go over your retirement dreams. #3 Stay positive amidst the negativityLearn how to stay positive in the negativity. We can choose a different direction. We need to take the COVID-19 pandemic seriously, but that doesn’t mean giving in to panic. You are allowed to go through this...

3 Unexpected Ways to Build Wealth During the Coronavirus, Ep #140

The coronavirus is making waves around the world, inciting fear in its wake. But what will it’s true impact be on a global scale? Will it affect my investment portfolio? In this episode of Best in Wealth, my goal is to quell your fears. I’ll talk about recency bias, how past pandemics affected the stock market, and what to expect from the coronavirus. So what is the coronavirus? The official name is COVID-19. According to the CDC (https://www.cdc.gov/coronavirus/2019-ncov/faq.html#basics) , current symptoms include mild to severe respiratory illness with fever, cough, and difficulty breathing. The virus originated from an animal (similar to MERS and SARS) but can be transmitted by human-to-human contact. [bctt tweet="Will the Coronavirus Affect my Investments? I share my thoughts on the pandemic In this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Outline of This Episode[1:59] The topic of the day: coronavirus and your investments [2:05] What do you do when your kids get hurt? [3:37] How will the coronavirus affect my investments? [6:14] Current global toll from the coronavirus (Feb. 27th) [7:54] SARS impact on the stock market and global economy [9:20] The impact the Bird Flu had—lethal but short-lived [10:21] The Swine Flu was the most widespread pandemic [12:09] Put the current pandemic in the proper perspective [12:49] The impact of Ebola and the Pneumonic Plague [13:14] The market will recover quickly based on past trends [14:54] What happens next? [17:17] What do we do with our investments? You must overcome recency biasRecency bias is a simple construct: you remember clearly what’s happened most recently, compared to something that has happened in the near past. With every new virus that becomes widespread, we forget the impact of those that have come previously. Human instinct—and certainly that of the media—is to revert to panic. I’ve done extensive research this week to gain information about pandemics that have struck within the last twenty years to see what the recent past tells us. Outbreaks come and go, but we need to be sure to educate ourselves and be prepared for the potential outcomes. How global pandemics of the past impacted the stock marketI’ve narrowed down and gathered some statistics on a few outbreaks and how they impacted the global economy: Severe Acute Respiratory Syndrome (SARS): Sars began to spread in early 2003 with an outbreak concentrated in Asia. It reduced the global GDP by 33 billion dollars. The first month after it broke the market was up 86%. After 6 months, the market was still up 21.5%. The bird flu: In 2016, the bird flu affected fewer people but had a higher death toll, which was quite scary. While lethal, the epidemic was short-lived. After one month the market was flat, but 6 months later the market was up 10%. The swine flu: The CDC announced the spread of the swine flu in 2009. It originated in Mexico and could not be contained. It became so widespread that President Obama declared a public health emergency. Between 700 million and 1.5 billion people contracted the swine flu with close to half a million deaths. Despite everything, the market was up 11% a month into the epidemic and was up 40% after 6 months. Keep listening as I share a few more statistics on widespread viruses. But the long-term impact of nearly all of them was a rebounding market. [bctt tweet="In this episode of Best in Wealth, I share how global pandemics of the past impacted the stock market—and what we could expect from the coronavirus. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement" username=""] Put the Coronavirus in proper perspectiveIn light of our tendency towards recency bias and the impact of past pandemics, it’s important to put the...

Will the Coronavirus Outbreak Affect my Investments? Ep #139

Podcast Intro: Do you want to finish your life well? Today in an All-Pro Dad group that I run at my kids' elementary school we talked about finishing well. I talked about trying your best but knowing you will make mistakes in any sport, instrument, or competition that you are involved in. The key is learning from the mistake and then forgetting about it so you can finish well. If you dwell on your mistakes you will not finish well. What about your life? How will you ensure that you will finish well? To finish well we need to plan well. In the world of financial planning, that means turning our dreams into goals and eventually our goals into reality.  Podcast Topic of the Day: You Need Retirement Goals Three Reasons You Need Retirement Goals 1.  Otherwise, it is just a pile of money. People who focus on the dollar amount they have saved and not what they will do with their money have a hard time dreaming. They also have a hard time spending the pile since they spent their whole life focusing on the number. 2.  Goals help you stay MOTIVATED. If you want to finish well, you need motivation. Life is hard and busy so we need to keep our eye on the goals we will finish well. 3.  Goals will determine how much you actually need to save. Maybe you are not saving enough, or perhaps you can afford to enjoy some of life now because you are saving too much. Tune in and listen to the podcast as I share some of the most common dreams and goals people have in retirement. Listen to the end to ensure you will finish well! Podcast Closing Words: We all have a desire to finish well. Once in a while, I imagine myself in my last days. I want to say to myself, “Scott, you finished well.” I want you to say the same thing. Show Links: (https://fortressplanninggroup.com/) (https://bestinwealth.com/episodes/137-how-to-set-up-a-budget-in-7-steps/) (https://bestinwealth.com/episodes/134-the-number-1-reason-you-wont-reach-your-goals/) Podcast Disclaimer: The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice. Thanks for listening

138 – You Need Retirement Goals

Podcast Intro: Scott starts the podcast by discussing the recent roller coaster ride that has happened in the global financial markets over the past couple of weeks and how the ups and downs can make many people feel out of control. Feeling out of control is often how people feel when they have a lot of debt. Scott mentions that he is teaching Dave Ramsey’s Financial Peace University (FPU) at his church and his job is to help motivate and provide encouragement to people that have a lot of debt so that soon enough these people will feel in control of their finances. Podcast Topic of the Day: How to do a Budget The topic of the day is How to do a Budget. During the podcast, Scott covers 7 easy steps to create a budget, or a “spending plan” as Scott prefers to call it. According to Scott, all people need a spending plan.  Step #1 for building a spending plan is to acknowledge that both people in the relationship must participate in the development of the spending plan (or budget). If you are single, then you can skip Step #1. Scott discusses how it is likely that one person may be the budget “nerd” and their partner may be the “free spirit”, but it is critical that both participate in the development of the spending plan.   Step #2 for building a spending plan is to acknowledge that you are going to make a zero-dollar budget. In other words, you are going to assign every dollar you make to a budget entry. Step #3 for building a spending plan is to list out all monthly expenses by category. Everything that you spend money on during a month needs to be listed. This list should also include your monthly saving and your monthly giving, and it should cover every dollar of your household take home pay. Scott reviews Dave Ramsey’s basic guidelines that Dave recommends for various expense categories; however, he cautions that these are just basic guidelines and may vary by an individual’s unique situation. The first category Dave recommends placing at the top of your monthly expenses is giving, and Dave recommends starting with 10% of your take home pay be allocated to giving. Even though you may be in debt, it is important to start giving now so that when you are out of debt later in life you can give more. The second category is saving, with a recommended allocation of 10-15%. Depending on how you are saving, you may already be saving 10-15% in a 401(k), therefore, you may not need to save anymore out of your take home pay. The third category is food with a recommended 10-15% allocation. Mortgage or rent is the 4th category with a recommended allocation of 25%. Those that are spending more than 25% on their mortgage or rent often find that there is not a lot of money left to spend in the other budget categories. Your utilities are the 5th category with a 5-10% allocation. Vehicle expenses such as gas, maintenance and oil changes should be allocated at 10% and are the 6th category. Note, this 10% does not typically include car payments. Fun money, or as Scott categorizes in his spending plan, a “flex fund” category should be included next. The fun money or flex fund should be allocated at 5-10% depending on your overall spending plan. The final categories are clothing 5-10%, entertainment 5-10% and a miscellaneous category that is 5-10%. The miscellaneous category is a great category to cover items that are missed or not known at the beginning of the month, such as a birthday party gift for a kid’s birthday that you or your child was invited to. Step #4 is to add up all the irregular expenses that do not occur on a monthly basis. Examples of these irregular expenses are annual car insurance payments, water bills, property tax bills, family birthday gifts, etc. Once you have identified and added up all of these expenses, divide the total by 12 and add a line item to

137 – Set Up a Budget in 7 Steps

Do you want to get a jump on the new retirement and tax opportunities provided by the 2019 Secure Act? In this episode, Scott explains some of the critical features of this new act and how we can use what we learn to plan our retirement and finances better. RETIREMENT PROVISIONS: Elimination of the stretch provision. Lifting the restriction on making contributions to a traditional Ira after age 70.5. Increase the time when you need to take RMDs from 70.5 to 72. Penalty-free $5000 out of IRA for Adoption or qualified birth. The use of life-income options, i.e. Annuity options in the 401(k) – BE CAREFUL. Tax credits for small businesses to set up 401(k)'s. NON-RETIREMENT PROVISIONS Repeal of the kiddie tax laws from TCJA. Adjustments to the medical tax deduction. (back to 7.5% of AGI for 2019 and 2020) Expanded provisions in 529 plans. Series of tax extenders for mortgage insurance premium deduction. Higher education tuition and fees deduction.

136 – New Retirement and Tax Opportunities provided by the 2019 Secure Act

Let's review the 2019 market returns and then learn from it so we can crush 2020 and beyond.

135 - 2019 Year In Review

We THINK DIFFERENTLY about wealth and investing. (You should, too.)

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