Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.
We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.
Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.
Retiring Early Requires the Right Mix of Investing Strategies and Diversification
Do you dream of an early retirement? If you want to get out of the workforce before the traditionally targeted age of 65, your investing strategies may need to be adjusted. It may seem simple, but a quick reminder can be very beneficial. Here are some important steps to take:
Get Involved Early
It’s an overused saying but it is true: the best time to start saving is yesterday; the second-best time to start getting serious about investing for your future is today. If you want to retire early, you need to start planning as early as possible, which is why Millennials should consider strategies now that will put them in a position to make that early retirement decision in a couple of decades. The sooner you begin saving, the more compounding you’ll have working in your favor later.
If you’re making up for lost time, don’t worry – you’re not alone. Many investors pick up the intensity of their investments in mid-life. It’s important to start where you are and move forward consistently.
Establish Solid Goals
If you’re in your mid-to-late 20s, your vision of the future is likely going to alter by the time you’re in your late 30s. That’s fine, but establish your goals for retirement now so you have a plan to guide your investing strategies.
“Where should I put my money?” It’s an appropriate question, and most investment advisors will point to an IRA and an employer-matching 401(k) as excellent vehicles for early retirement. Talk to your investment advisor about diversifying your investments in a variety of types, as this will give you the best chance at growth, especially when the market is volatile.
Keep an Eye on Taxes
Being tax-efficient in your investing strategies is important for an early retirement. For instance, tax-deferred savings vehicles like 401(k)s and IRAs can help you boost your savings. If your employer offers a match on your 401(k) contributions, you're going to see your savings grow more quickly.
Healthcare Can Get Expensive
This is an area of retirement planning that you may not have thought about – your health. Maybe you haven’t been to a doctor in 15 years and any sickness you’ve had has been managed from home. Unfortunately, you’re likely going to be visiting your family practitioner more often when you hit your golden years, which will increase your cost for healthcare.
Even though you may not have medical problems now, you need to budget for costs related to healthcare because your medical issues can wipe out your savings if you’re not prepared.
At Family Investment Center, we’ve established many investing strategies for our clients who want to retire early. Every situation is different and requires a customized approach, which is why you should come in and talk to us about your retirement goals. We’ll help put you on a path where an early and comfortable retirement may actually be attainable.
The Benefits of Having an Investment Advisor on Your Side
Taking the DIY approach can be a fiscally responsible and perfectly acceptable way of approaching a variety of projects. But when the project is complex and requires a great deal of skill to pull off, it is valuable to bring in a professional. When it comes to retirement planning or building up investments for other things in life, taking the DIY route is risky. Working with an investment advisor can ensure you have all the right information you need for your investment planning.
Dan Danford, a frequent contributor to Investopedia, writes in a new column about the joys of the do-it-yourself process and the realities of the complex investment planning that requires a professional investment advisor. Using the analogy of lawn maintenance, Danford dives into the DIY vs. hiring a professional lawn service approach.
“If you want a lawn to look nice and enhance the value of your home,” Danford said, “you can do-it-yourself or you can hire a lawn service. Either approach can create stunning results, but that’s where the similarities end.”
Danford argues that to take care of your lawn, you must purchase all the necessary tools and know how to use them if you want to see a greener lawn. A mower, irrigation system or hoses, fertilizer, grass seed, organic applications, nutrients, blower, spreader, etc. – these are the tools that will cost you a lot of money, not to mention the man hours you have to put in, to make that lawn lush and green.
Granted, some people really enjoy the process of caring for their lawn. Perhaps they find it meditative or an activity shared by the family. And the results are satisfying, if they’ve done it right. The risk is that if you make a mistake, it could take years for the lawn to recover, just as it would if you make a DIY investment mistake.
When you hire a professional lawn service, it “requires less personal attention,” Danford said. “They just show up when something needs doing and they take care of it. They own and maintain the equipment, provide supplies and hire the required labor.”
The investment business offers similar parallels. A full discretionary investment management service offers many more tiers of options than a DIY investor can gain access to. You can spend time and money on the necessary tools to make an investment plan, and perhaps come up with a solid one, but the money (fees) you put toward an investment advisor who does this full time can offer more promising results.
“Many investors would be far ahead to let professionals do their heavy lifting,” Danford said. “A green thumb – in lawns or money – grows ever greener with quality professional help.
Danford and his team at Family Investment Center have the tools required to assist you in your investments. They will discuss your options with you and assist you in making fact-driven decisions regarding your financial future.
Safeguarding Investors Should be Mandatory
The Department of Labor (DOL) is taking a close look at the fiduciary rule as opposing sides are heating up their banter. On one side, people argue that the rule has prompted many frivolous lawsuits against brokers whose clients believe they breached their fiduciary duty. On the other, proponents say the rule protects investors from conflicted investment advice.
Will the increase in litigation cause the cost of advice to go up? That’s something the DOL will be looking at. Also, regulators want to look into any abuse upon sponsors of defined contribution plans.
While the rule is focused on making sure those who want to offer conflicted advice have a disincentive to do so, President Trump signed an executive order to review and perhaps rescind the fiduciary rule, which went into effect in April.
Before the rule went into effect, a financial advisor who is also a registered broker was only supposed to recommend investments that were “roughly suitable” for their clients. This means that if one fund would offer that advisor a better commission, they were more inclined to offer it to you, regardless of how it would fit your investment planning.
The rule took several years to develop, but it has some flaws, including the fact that advisors have found some ways to work around the rule. Regardless of weak areas, it’s estimated that without the rule, investors were losing close to $17 billion a year due to conflicted advice.
Some in the industry are saying the DOL will find that litigation has increased, which means it could be rescinded. Others, however, believe the DOL will recommend adjustments to the rule, not a full rescinding.
Dan Danford, founder/CEO of Family Investment Center, said as a fiduciary, he and his staff want to put all the information out that they can so their investors are safeguarded. For instance, over a 30-year period, investors seeking advice that turns out to be conflicted see a 12 percent loss in potential growth. That’s not something a fiduciary will find acceptable. Founding the Family Investment Center in 1989, Danford opened his doors as a fiduciary, which was rare at that time.
The best choice, regardless of what the DOL does or doesn’t do with the fiduciary rule, is to seek out a fee-only advisor. These are licensed professionals who don’t take commissions. Furthermore and perhaps more importantly, they’re only looking out for the best interests of their clients.
When you come to us at Family Investment Center, we’ll not only act in your best interests, we’ll walk you through everything you need to know about your specific investment planning strategy.
How Baseball Can Help You Know How to Approach Your Investment Portfolio
Warren Buffet, the “Oracle of Omaha,” has a reputation for being a great admirer of America’s pastime – baseball. So when he gives out investment advice, he likes to use a few baseball analogies. As baseball season is in full “swing,” take a look at some of these baseball parallels as they serve as a reminder of how to approach your investment portfolio.
“What’s nice about investing is that you don’t have to swing at pitches,” says Buffet. This is a good rule to follow, as many pitches offered by those who are selling products might often come with too much risk attached, and little to no insight into those risks. Buffet advises that investors only swing at the pitches that are right for them.
Buffet also says that in baseball, when one wants to score runs, they have to watch the playing field, not the scoreboard. He is a consummate student of what’s going on around him and only jumps at investments that have a long history of stable earnings. Investors who are planning their strategy would be wise to do the same – think long term and for the future, not of long shots meant to achieve short-term gains.
The Financial Post also jumped on the baseball analogy bandwagon, offering up the idea that a really strong baseball team will be proficient in pitching and batting, and they’ll have speed, excellent defense and a winning culture in the clubhouse. However, rarely are all of these components firing at the same time.
The same is true of a strong investment portfolio – you’ll have your money spread across many different products, from stocks to bonds and other investments. They all have different levels of risk, but while one is performing poorly, others may be bolstering the bottom line.
The New York Yankees have been notorious for paying big money for players who are no longer worth the large contract? The same could be said of investments people make on products that were once starlets, but have their good days behind them. The best scenario is to acquire them while they are on the rise but still at a low price.
Smart baseball managers won’t hold on to an under-performing player just because they overpaid for him. Similarly, smart investors won’t hold on to an investment just because they overpaid for it. Eat the mistake, learn from it and move on so your investment portfolio has a chance to grow.
Playing baseball at a high altitude is different from playing ball at sea level. The air is thin, which means batters can really let it fly. That’s why Denver’s team looks for batters who can consistently get the ball in the air. They also look for pitchers who can keep the ball low so as not to allow their competition to hit fly balls. They plan for their environment, which is what investors should do.
Every environment is different, which is why every investment portfolio has to account for these differences. When you talk to your investment advisor, they will look at your individual goals, your financial situation, and help you make the right choices to help you reach your goals.
We’re baseball fans at Family Investment Center, but we’re also huge advocates for smart investing. Let us assist you in building a strong investment portfolio for you. Contact us today and let’s talk about how we can improve your situation.
How Establishing Goals Can Improve Your Retirement Planning Strategies
Retirement planning should really be about planning with a purpose in mind. Many people avoid this crucial planning stage because the numbers confuse them and the whole process may seem daunting. However, money is more than a number; when you attach a goal to it, the planning process become less confusing.
Rather than thinking about dollars, try thinking about what you want your wealth to do for you in retirement. And remember – your goals will probably change, even in your golden years, which means you have to be flexible in your planning.
In fact, a recent Kiplinger article titled “To Make a Financial Plan, You Need a Financial Purpose” reminds readers of key questions to ask now, and to revisit often. As you embark on retirement planning goals, keep the following questions in mind:
· Which relationships are important enough that you will be willing to provide (financially) for them?
· Do you have health concerns?
· What lifestyle do you envision in retirement?
· What is your idea of a happy and healthy retirement?
· What hobbies would you like to pursue in retirement?
Answering these questions will help you round out more concrete ideas of what your future will look like and also give you an idea of how much money you will need in retirement. Here are some other questions to explore:
What will you do in retirement? Everyone has different ideas about that, which is why every plan has to be just as unique. For instance, do you plan to continue working part time into your 70s? If the answer is yes, your planning will differ from the person who plans to never work again after the day they retire. Do you want to travel extensively or just stay local and enjoy your family and friends? Again, the traveler will have to make extra room in their budget for the expense of traveling.
When will you quit your career? Do you have a set date that you’ve been looking forward to for years, or are you going to step down when you have saved enough money to retire and have enough for the goals you’ve set for yourself during those years?
Where you plan to retire will also have an impact in how you plan your investments. Are you planning to downsize your current living situation or upgrade to something less modest? Maybe you want to move to a different city in a different state or live with nearby family. The way you answer the question of “where” will also change how you approach your investments.
Getting an objective viewpoint from a qualified professional can go a long way in making the decisions that will put you on the road to reaching your goals. An investment advisor has the expertise to help you invest money in a way that is as unique as your goals. However, be sure to seek out the assistance of a fiduciary. When your investment advisor operates as a fiduciary, they will work for your best interests, not theirs. Instead of pushing products that pay them a commission, a fiduciary will only make recommendations that match your goals.
At Family Investment Center, we’ve looked out for our clients’ best interests since day one. We’ll listen to your plans for retirement and help you choose investments that provide you with confidence toward your future.