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.
Those Working With an Investment Advisor Have a Better Understanding of Financial Terms and Concepts
When it comes to working with an investment advisor, many Americans say that they feel they don’t need to work with an advisor. Getting to the reasons behind this decision, respondents in a recent survey from Plan Adviser were asked why they preferred not to work with an investment advisor and 44 percent responded that their assets didn’t warrant any planning.
Among the respondents that reported not having enough assets to bother with an investment advisor, 28 percent had an income of at least $75,000 a year. These individuals could see many benefits by working with an advisor and planning for their financial future.
Overall, those Americans that reported working with an investment advisor were more comfortable with their understanding of financial terms, including “long-term care insurance”, “Roth IRAs,” and “annuities.” Among those respondents that were working with an investment advisor, there was a high rate of confidence that they understood these terms, at a rate of 41 percent, 69 percent and 49 percent, respectively.
For those not working with an investment advisor, there was a significantly lower level of comfort with financial terms. Using those same terms, only 31 percent felt confident they understood the term “long-term care insurance,” 42 percent understood “Roth IRAs” and 28 percent understood “annuities.”
Of those who did not have an investment advisor, the reasons were varied. As noted above, many didn’t feel that they had the kinds of assets that warrant seeking out a professional opinion. Still others said they preferred to manage their own finances (38 percent) or felt that an investment advisor would cost too much (36 percent). Some don’t know what kind of professional to hire (14 percent) or don’t understand the value of engaging these types of services (10 percent).
Yet in addition to the value of having an investment advisor help you plan for your future and work with you in creating a strategic investment plan, working with an investment advisor positively affects other aspects of your financial life outside of your investment or retirement planning. For instance, those that hired an investment advisor were also more likely to have an emergency fund and a retirement plan. Seventy-seven percent of those working with an investment advisor had an emergency fund or a retirement plan, versus 46 percent of those that had never worked with an investment advisor.
If you’re looking for ways to take some of the guesswork and the emotions out of your investment future, make an appointment with an advisor at Family Investment Center. We can take a look at your current financial picture and help you develop a plan in a client-first, commission-free setting.
401(k) Investing is a Valuable Tool, Yet Underutilized
One of the most widely overlooked investment vehicles today is the 401(k). Surprisingly, two-thirds of all Americans don’t contribute at all in a 401(k) or other retirement account available through their workplace, and that number could shift even more if Congress stops auto-enrollment. 401(k) investing is a remarkable tool, yet often overlooked as an important part of planning for retirement.
According to tax records gathered during the most recent U.S. census, only 14 percent of employers offer a company-sponsored 401(k) plan. However, the majority of Americans work for larger companies which do offer these plans. Ben Steverman covers this topic in a Bloomberg article this year, saying bigger companies are the most likely candidates for offering a 401(k) plan and around 79 percent of Americans work for large companies.
“Four out of five workers are employed by companies that offer a 401(k) or similar plan, but many workers aren’t using them - either because they’re not eligible or because they aren’t signing up,” Steverman says.
These workplace plans create an environment where employees can build up their investments on a tax-advantaged basis. Unfortunately, too many Americans feel that it’s not worth the effort to get involved, probably because in order to get the most out of the plan, the money is tied up for a span of time and a penalty is assessed if the employee withdraws from it early.
Another possible reason for why so many workers aren’t getting involved in 401(k) investing is because they’re not willing to send incremental dollars to a long-term retirement plan, especially those who earn low wages.
People who change jobs often or who work part-time are also less likely to be eligible to participate in a workplace retirement plan. Many companies require employees to work for months or a year before they become eligible to participate in a plan, thus complicating the issue further.
Making investment decisions is difficult for many people. They’re intimidated by the choices that have to be made, so they don’t make any choices. Also, the cost of many plans can be high, which has been widely scrutinized in the media, drawing even more negative feelings out of workers, further complicating their savings plans.
Many companies that offer a 401(k) plan will automatically enroll their workers, as it costs the worker nothing. However, Wall Street believes this practice creates an unfair advantage against the products they sell. Unfortunately, Wall Street has the ear of many lawmakers in the Capitol, which is why there is a real threat that auto-enrollment could be wiped out.
At Family Investment Center, we can assist you in overcoming any fear, intimidation, or trepidation about investing your hard-earned money. Contact us today and let’s discuss your financial goals and how to accomplish them.
Maybe the New York Stock Exchange comes to mind when you think of investing and investments. But you’re faced with investment decisions every day. Being aware of these choices can ease worries and help lay the groundwork for a profitable future.
Dan Danford, chief executive officer of Family Investment Center in St. Joseph, offers these tips:
- Be mindful about money. You’re faced with hundreds of decisions every week. Don’t automatically respond. Think it over first.
- Make wise buying decisions. Look for the differences between price and value in making a purchase.
- Make wise use of any debt. Some things are good to finance, while others are terrible. Buying a house at three or four percent interest is a good investment.
- Keep track of net worth. Make a list of what is owned and what is owed for tracking purposes. It’s easy to do on a monthly basis.
- Credit cards should be used for convenience alone. Pay off cards at the end of each month.
- Use tax-savings vehicles, like college savings plans for students or retirement plans, as much as possible.
- Keep learning. There are nuggets that can be picked up by reading. The lessons parents learned may not necessarily apply today. Many innovations are being created daily.
- Ensure that student loans are in sync with career opportunities. Make automatic arrangements to make monthly payments.
- Stay healthy. It’s a whole lot cheaper to belong to a health club than seeing a doctor all the time.
- Choose the right mate. What your mate does for a living can have a huge influence on your finances.
Ray Scherer - St. Joseph News Press / Tomfoolery Magazine
Investment Advice for Making the Most of Your Tax Refund
You’ve likely already received a nice refund on your tax return. If you’re like most people, your wheels have started turning. Do you add a few days onto your summer vacation or finally splurge on that new furniture you’ve been eyeing? Few want to consider investment advice that starts with not spending your entire refund, but you may find that you’re happier in the long run investing into a solid retirement fund.
There’s more than one way to invest, though, and it is important to carefully think about your options before you plan your strategy for handling a small windfall that comes in the form of a tax refund.
Why would you want to think about investing some of your refund, rather than spending it all on entertainment, luxury items or home improvement? The average refund enjoyed by Americans is $3,000, an amount that may seem perfect for a good, guilt-free splurge. It’s sizable, but not life-changing, so it may be easy to justify buying yourself a treat.
However, with the average rate of return that the stock market delivers, you could potentially turn $3,000 into $50,000 in 30 years because investment growth and compounding interest.
You could choose from an index, like the S&P 500 or the Dow, but you can also invest in a mix of blue-chip stocks and enjoy solid returns over the course of your investment time. What matters most, of course, is that you don’t go out and spend all of your refund, but invest a portion instead.
At Family Investment Center, Dan Danford, CEO, has a three-part strategy for making the most of your tax refund, or any other small fortune that comes your way. Take a look at these steps for what could be a more satisfying approach to tax refunds:
Blow it: Whether it’s a weekend trip or a great pair of shoes, you should get to spend part of your refund on something that improves your quality of life. Making memories and enjoying a treat are great ways to invest in your satisfaction. Danford believes that many financial plans fail simply because they fail to include some joy and some fun into the mix.
Mow it: Part of your refund should go to maintenance that protects your investments, such as your home or your car. Maybe you have a leaky roof or a fence that needs repaired, or maybe you need to upgrade to a vehicle that is more reliable. These are also important ways to spend your money and are a good option for a portion of your refund.
Grow it: Take part of your refund and invest it in your retirement savings or a college fund. Even a small amount invested will multiply over time and can yield impressive growth. Don’t limit your investments to traditional accounts, though. Danford suggests that taxpayers receiving a refund also consider investments that could further their career, like a college class, or experiences that might widen their horizons.
A balanced approach to investing is always best, and we believe that you’ll have the most satisfying results if you get to enjoy spending some of your money and enjoy watching some of it multiply over time. Make an appointment with us today at Family Investment Center. We welcome you to enjoy jargon-free but experience-based conversation around our table.
Avoid Retirement Planning Missteps and Plan Your Exclusive Freedom Tour
If you’re intimidated by retirement planning, you share a similarity with a great many Americans. However, this intimidation leads to the first big mistake – not planning at all.
“I’ll get to my planning for retirement later,” many people say to themselves. You may think you’ve got decades ahead of you before you have to start worrying about it. Don’t fall victim to this thinking.
Another mistake many people make in retirement planning is that they have a faulty vision of what they’ll be able to spend in retirement. A survey conducted by Fidelity Investments reveals that more than 10 percent of Baby Boomers think they can withdraw 10 to 12 percent of their income on an annual basis. Following that line of thinking can drain a retirement account within a decade.
Everyone’s vision of retirement is unique, as are the strategies one must use to plan for their retirement. A common denominator in all scenarios is that an accurate forecast for retirement relies on how old you are today, how much money you’re saving and how you’re investing it.
This means that if two people have the same vision of living on a golf course in Arizona during retirement, they could have vastly different prospects for reaching that goal. If one of them has a few thousand dollars in the bank while the other has hundreds of thousands, the retirement planning is going to be just as disparate.
To get into the right mindset for reasonable retirement expectations, you have to stop thinking about retirement as a single event; it’s actually a long, extensive event. There are 70,000 people in America right now who have reached the age of 100. Not many of them will tell you they thought they’d reach that milestone.
Think of your retirement as a freedom tour, a series of events that you are free to choose to do during your years of retirement. Here are a few tips for a successful retirement freedom tour:
· Think about your retirement in terms of a theme or idea
· It takes expertise to plan this theme, which some might consider a “tour”
· Planning for the tour begins months before the excursion takes off
· All stops along the way are planned
· There will be emergency stops, so have money set aside for them (think medical emergencies)
· Working together with family and investment advisors provides for a smoother tour
The snapshot of your tour is going to differ from others’ snapshots, which means you can’t rely on someone else’s investment strategy to make yours become a reality. Work with an investment advisor to make sure you’re not making mistakes that could keep you from enjoying retirement.
At Family Investment Center, we love assisting our clients in retirement planning. In fact, we form relationships that have followed through to the next generation of our clients’ families. Let us help you plan your tour.