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.
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.
Recent Numbers on Investing for Women Show Increasing “Clout”
The numbers of male clients to female clients at investment firms began to even out during 2016, says a recent CNBC article. Why? Because the number of women who have reached millionaire status is also climbing. In fact, it’s believed that in the next 13 to 15 years, as much as 66 percent of wealth in the U.S. will be owned by women. How do these numbers affect investing for women?
According to the article titled “For Women, Retirement Can Be a Serious Challenge,” wealthy women are emerging now in stronger numbers. Approximately 45 percent of millionaires in the U.S. are female, says the article. During the next 14 to 15 years, females will be responsible for at least 66 percent of the country’s wealth. As a reflection of these numbers, it’s no surprise that women are currently the chief money makers in nearly half of U.S. households.
What’s the Challenge?
The numbers are encouraging, yet unique challenges remain for women in investing. As of 2015, women earned roughly 80 percent of what men were paid. This means when retirement comes around, women will draw less in Social Security benefits.
Many women choose to shift focus away from their careers during top-earning years to turn more attention to raising children, meaning less money goes into their retirement accounts. Some work part-time for a season to raise their families, which often makes them ineligible for employer-sponsored retirement programs.
In addition, with 63 million women earning wages today, only 45 percent are enrolled in retirement savings accounts. Of those that are enrolled, they average 50 percent less in their accounts than their male counterparts.
Another challenge, say experts, is that women who reach the age of 65 will live, on average, another 20.5 years. This means many of them will need more money in their retirement accounts than anticipated to live comfortably. Ultimately, too many women may be underfunded in their retirement accounts.
Addressing the Challenges
Investments can be a challenge, even for those who consider studying financial and investment news an enjoyable hobby. That’s why bringing an advisor into the plan can create a number of advantages.
An advisor can put together a plan considering all your information, including your insurance policies, your tax returns and banking records, information about mortgages and loans and all the investment records on your retirement accounts. Your advisor will help you create a strategy, which includes prioritizing expenses in categories such as wants and needs. This will help you devise a savings plan that matches your goals for retirement.
If debt is a concern, an advisor can assist you here as well. You might be surprised to learn that some debt can actually be used as leverage to increase your success. Contrary to some popular thought, not all debt is a hindrance to reaching your goals.
One of the most important things a good investment advisor will do is help you establish your goals and an investment plan that will help you reach those goals – despite media headlines, emotions and market shifts.
A final note: When you look for an advisor, find one that operates as a fiduciary. When you partner with a fiduciary, you have an advisor that puts your interests first. Also, a “fee-only” advisor will never take a commission on an investment they recommend. This is how Family Investment Center has operated from the start. Contact us today and find out more about what makes us so unique.
Focusing on Investment Strategies
Feel like it’s too late to start on your investment future? Think again. There’s no hard and fast rule set on exactly when to start or build up your investment strategies. Although getting an earlier start reaps better results over the long term, it’s not too late to start.
Do you need to move past a feeling of intimidation? Compare it to this analogy: do you need to know how to build a car in order to drive it? To combat intimidation, remember there is nothing wrong with taking interest in how investments work, but you can leave the expertise to your investment advisor, a person who has the experience and knowledge to help you develop a goal-focused and personalized investment strategy.
Smart investment strategies are those that work for you personally, not for your friends, family, and associates. Unfortunately, too many investors get caught up in the advice they get from these individuals, all of whom are well meaning, but want to pass off investment advice that worked for them. It’s okay to listen and learn, but don’t be swayed by strategies meant for a person in a completely different situation.
Many decisions are based on emotion, but investment decisions based on emotion can be financially detrimental. Additionally, when you bring other peoples’ emotions into the equation, it quickly can turn into a poor decision for your financial future. Reacting to these heightened emotional situations usually results in actions that can negatively affect your finances. Instead, consider maintaining a calm, “big-picture” focus.
According to Dan Danford, CEO of Family Investment Center, there are some rules to follow regarding investment strategies that will help you fight drama and stick to a long-term plan (of course, these can vary person-to-person, so be sure to speak with an advisor regarding specifics):
· Don’t quickly respond financially to political or economic news
· Use payroll deductions for savings and retirement accounts
· Use mutual funds or exchange-traded funds (ETFs)
· Gauge performance at five-year (or longer) intervals
· Benchmark at broad market averages
· Performance only matters in reference to similar investments
· Increase your savings amount every year
In conclusion, Danford said one of the biggest flaws he sees with do-it-yourself investing is that people don’t set aside enough time for personal finance issues.
“Reading The Wall Street Journal once a week or visiting for five minutes on the phone with your broker isn’t enough,” he says. “If you want to do it right, dedicate one full evening a week or a few hours each weekend. If you can’t do that, then you need professional help.”
Professional advice is good idea for any investment strategy. Find a good fiduciary advisor, like those at Family Investment Center, who can listen to your ideas and concerns and help you move toward a clear plan in a commission-free environment. (In fact, this is our sole focus, every day.) Come find out why we’re a little bit different when it comes to investments … and why our clients like it that way.
Make the Most of Your 401(k) Investing Opportunities
If you are like the majority of investors investing through a 401(k), you are doing so through your employer’s sponsored plan. The recent T. Rowe Price benchmarking report can help you can gain some insights into practices that other 401(k) investors have used to make the most of their 401(k) investment options. We want to highlight a few of those findings.
1. Sign up. (Yes, it’s simple, but some people don’t). One of the practices many respondents said they take advantage of is auto-enrollment. This has been on the increase over the last few years, and it’s a benefit to the employee who might otherwise choose not to enroll and forfeit the company’s matching donations.
2. Put more money in. Raising your contribution rate can make a big impact. The maximum amount you can contribute per year is $18,000. However, if you’re 50 or older, you can invest a maximum of $24,000. Meeting that maximum amount every year can help you enjoy more freedom in retirement. However, the report from T. Rowe Price also shows that many people are saving too little or nothing at all. In fact, the average deferral rate is around seven percent, which is less than half the 15 percent that many experts recommend. More alarming is the fact that roughly a third of workers are putting nothing into their company’s 401(k) investing program.
3. Don’t say “next year I will” or “when I pay down my debt.”Many responded to the survey that they have too many outstanding debts to put money towards retirement. In waiting to invest until later, though, you will lose out on the benefits of compound interest and risk the possibility of not having enough saved for your retirement. Taking a hard look at expenditures will often reveal money that could be going to your retirement.
4. Don’t let yourself become overly perplexed at natural market ebb and flow. Despite market changes, many successful people maintain a simple, consistent approach and don’t let their emotions get too much attention. They also work with a professional investment advisor so they can set aside fears and move forward with confidence.
At Family Investment Center, we know each person has their unique investment challenges and goals. If you’re part of that one-third of workers who are putting off investing for retirement, or setting aside too little, we can assist you in building a strategy that will set you on the right path toward the freedom you want. Our investment advisors have experience working with individuals and families of all ages. Plus, we don’t use complex jargon and we have always been – and will always be – commission free and client-focused. Let’s talk.
Make Investing for College Work Alongside Other Investments
Parents are saving a little less for their children’s college. Do you fit the trend?
A recent report highlighted behaviors regarding how Americans are approaching investing for college. Sallie Mae and Ipsos collaborated on a survey and found that parents are setting aside an average of $10,040 for their kids’ college savings – a 25 percent decrease from 2014.
Cost of living increases and other unexpected expenses are the main reasons for this drop. The report shows that in 2013, Americans saved $110,188 with around $10,503 saved for college. The numbers jumped in 2014 to $115,604 and $13,408. This year, the survey finds that total savings are $98,867 and college savings are $10,040.
Interestingly, the rates aren’t consistent at different income levels. For instance, high-income individuals are seeing the same numbers in 2015 as they saw in 2014. Middle-income parents saw a noticeable drop in savings, while low-income individuals saw a slight increase.
The rise in cost of education is far outpacing the rise in cost of living; one example lies in the reality that the average four-year institution costs around $22,000 a year to attend. For some parents, a sense of panic sets in as students approach high school graduation and tough decisions have to be finalized regarding tuition and school choice. In many cases, the answer to these questions is student loans.
The thought of student loans may not seem daunting – at least at first. However, leaving college with student debt can mean putting off activities like marriage or buying a home, which may also delay setting up retirement accounts. Students leaving school with significant debt may be delayed a decade or more toward investing for their future.
However, there are also risks involved for parents who put their kids’ education costs as a higher priority than their own retirement plans. While students have access to low-interest student loans, parents may not have access to the same type of money when it’s time to retire. Parents who put off adding money to their retirement fund in favor of saving money for their kids’ education may find themselves falling short when they reach retirement years – thus passing along the financial burden to their children.
Certainly there are many questions and options, as well as media articles circulating about the pros and cons of investing for college. Talking over your options with a professional investment advisor can help you make decisions that benefit your student and your retirement plan. Get a clearer view of what you can do by reaching out to Family Investment Center and talking to our team.
Did you know students are leaving college with an average student loan debt of $27,000? New parents today are looking at that number and shaking their heads in defeat. Some are inspired to start a savings account for their child’s tuition, but they could be running the risk of shorting themselves in their own retirement savings.
Planning for kids’ college so that they can graduate debt-free is a noble task. It takes a good amount of hard work, preparation, and an ability to manage money and investments. The earlier you start socking away money in tools like an Education Savings Account, or ESA, the better start to higher education your child could have. If you’re familiar with an IRA, then you already know how an ESA works. However, with an ESA, you can only contribute $2,000 per year per child into the accounts. This tax-advantaged fund allows any earnings to go untaxed, unlike regular savings or investment accounts.
If your child is older and you want to invest more than $2,000 per year, you can choose the 529 plan. The state or educational institution you plan to send your child to operates this educational savings plan, although some states (Missouri included) allow state tax advantages for contributions to any state’s 529 plan. Named after Section 529 of the IRS code, you can use this plan for costs related to college across the nation. In fact, almost every state now operates a 529 plan.
You should know that before you start a savings account for your child’s college education, you should have your own finances in order. Don’t jump into this unless you are already out of debt. Some professional investment advisors suggest putting 15 percent of your income into a retirement fund for yourself. You’re not being selfish by putting your retirement plans first. If you short your retirement fund, it could mean expenses far beyond student loan debt for your children as they work to support you through your golden years.
Remember, student loans are generally low-interest. Advisors might suggest that it makes more sense for your child to come out of school with some debt rather than leaving yourself short on income during retirement. (Your child has more earning years left than you would at retirement, and your child may end up paying more money than a student loan to help arrange for your expenses if you outlive your retirement fund!)
Here’s another tip to consider -- private college isn’t for everyone, especially if you have a child in high school and you’ve got a smaller egg saved for their tuition. Grants and scholarships to local or community-based institutions may be more readily available at a non-private school. While it seems simple, advisors also suggest that you pick a school that is more affordable and offers tuition that lines up with your child’s anticipated income. Some parents successfully invest in two years at a community college where tuition is usually much cheaper than a public four-year institution, thus cutting expenses virtually in half.
It may be helpful to know that many students will work part-time to help pay for the essentials at college, and their academics don’t suffer. (In fact, some do better while arranging their schedules around work and school).
Planning for kids’ college is something that can be filled with emotion, anxiety, and anticipation. Consider working with a professional investment advisor who is on your side. You can talk openly about your goals, and investment advisors are trained to help you decide which type of account is best and to help you take advantage of tax and growth opportunities you may not know about. Come to Family Investment Center and see what we have in our toolkit to help you build confidence in saving toward your child’s higher education.
Watching professional football on Sundays and Monday nights, we see players making millions of dollars perform their magic in the limelight. However, some of these players are making financial blunders from which we can learn.
According to the NFL Players Association, the average career only lasts 3.5 seasons. Players either become injured, self-retire, or get cut from their team in those first few seasons. The minimum annual salary for a rookie is $390,000. They have the potential to earn an average of $1,365,000 over their football career, which is a large sum of money, but it must be invested wisely.
Unfortunately, many of these players live large and eventually come away with nothing. The first wealth management lesson we can learn from players is that spending control is vital to anyone who wants to live comfortably in retirement. Enjoying the finer things in life is possible when you keep it in check – especially when you’re young. The money you might be spending now could be compounding in an investment account instead that could lead to a nice nest egg in 20-plus years.
NFL players come out of college and step into large sums of money. Their fans come out of college and step into a 9a.m. – 5p.m. job that may pay only a modest salary in many cases. What they have in common is that both demographics may struggle with commitment in planning their wealth management strategy. Many young careerists don’t think they have enough money to invest, but a professional investment advisor will tell you that it’s never too soon to start investing.
Investment advisors often see a lack of interest from young people in investing because they believe it’s something they can do later. With every year you don’t invest, you may have to invest even more in the following years just to catch up.
We’ve also heard a number of stories about how NFL stars fall victim to bad investments due to partnering with the wrong people who have the wrong experience. While your salary may not match these multi-millionaires, your investments are just as important – and choosing the right investment advisor is critical. Look for one that isn’t motivated by high-pressure sales, but instead is motivated by your success.
Family Investment Center is a company offering wealth management professionals who can share strategies with you to approach your situation, regardless of your status in life. In fact, Dan Danford, our founder, is an NFL Players Association Registered Financial Advisor. (Plus, we’re commission-free). Call us today and see how we can help get you on the right road to the financial future you’ve been picturing.
Ahh…vacation. There’s nothing like saving up and preparing for a week or two away, and then when the time comes, relaxing while letting the time pass. But interestingly enough, U.S. research shows that more people are planning for vacations throughout the year than they are planning for their own retirement.
An Edward Jones study, which surveyed more than 1,000 adults, asked what they spend more time planning for: vacation, college or retirement. Nearly 30 percent said they focused more on vacation planning and even less said they spend time planning their retirement. This is an indicator that nearly one-third of Americans are likely to live their golden years short of the dream of idyllic vacations and property rentals.
Many people who don’t plan ahead for retirement may believe common myths including not having enough to invest or not needing to be concerned with it so early in their lives. In fact, less than 10 percent of people ages 18-34 put any emphasis on retirement planning. But what if they knew that with a steady rate of return, saving $250 a month starting at age 25 could turn into a million dollars in retirement? Waiting until you’re 50 to start saving for retirement means you’ll have to dole out more than $3,000 a month to hit the same goal.
Many young people are experiencing crushing student loan debt, credit card debt, and leading lavish lifestyles, all of which leaves little room for investing. However, any financial advisor will tell you that no matter how little you put away for retirement, anything is better than nothing. The closer you become to retirement, the more anxious you may get about your lacking retirement account. Starting investing early will put you in a better financial position later. Seriously, if you think putting away $400 a month is difficult now, how do you think you can save $3,000 or more at age 50; alongside loans, debts, and other payments?
By no means does this mean you have to stop enjoying life or stop taking your annual earned vacation. It simply means that by prioritizing the way you think about your finances now, and trying to put a little more emphasis on goals for the future, you can experience even more golden sunsets at your favorite vacation destinations once your golden years arrive.
We know it takes knowledge and experience to make wise investment decisions, which is why we want you to choose a financial advisor to provide that guidance. Working with a professional investment manager can give you more peace of mind to focus on what you want or need to focus on. Consider seeking out fee-only advisors who don’t work on commissions, so that your investments receive the ongoing and long-term attention they need in your retirement planning.
If you want unbiased advice from professionals who spend many hours each week studying investment strategies for each of their clients and accounts, visit us at Family Investment Center. Retirement planning is one of our true areas of expertise, and we’ll always put your needs above all else so that you can hopefully enjoy vacations now and also in your retirement future.