Financial Symmetry: Balancing Today with Retirement

Chad Smith, CFP® and Mike Eklund, CFP®

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only f

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Every 4 years it happens: an election comes along and threatens everything. Or so it seems. Video recap: https://youtu.be/7SkvyKEXH6s Regardless of how you feel about the candidates, we’re here to discourage you from making fear-based financial moves. Learn how to overcome your emotions so that you don’t derail your careful long-term investment strategy.  The media won’t help you achieve your financial goals It’s hard to get away from the drama of the election coverage. It’s everywhere you look: on the TV, in the newspapers, and even from the notifications on your phone. This kind of round the clock, in your face news coverage can heighten your anxiety about the state of the world and even make you worry about your investments. It is important to remember that the media is not there to help you. Its goal is to sell advertising, not to help you achieve your financial goals.  While 2016 may seem like a distant memory, many investors were concerned at the time that a Trump victory would surely tank the stock market.  We fielded a lot of calls leading up to the 2016 election discussing if a more conservative approach should be taken, at least until we had more certainty. While Trump’s victory was a surprise to many 4 years ago, it certainly was not devastating for the stock market.  In fact, the S&P 500 with dividends returned 21.83% in the following calendar year of 2017.  Investors who moved into cash to await more clarity would have swiftly regretted their decision.  Check out the chart linked below which shows annualized returns for each president dating back to 1969 with the red and blue bars depicting results for Republicans and Democrats. www.financialsymmetry.com/how-should-i-position-my-portfolio-before-the-election How to stay focused on long-term financial results during an election year Staying focused on your long-term financial goals can be a challenge when the short-term seems so uncertain. People often feel tempted to time the market when the world feels up in the air. It’s important to remember that the market is influenced by many other events, not solely the election. So even if it seems that the election is the only thing going on, you need to stay focused on your long-term financial goals, stick with your investment plan, and avoid market timing. Focus on the facts to help you through uncertainty One way to help you stay focused on your long-term financial goals is by looking at the facts. If you were thinking that this might be a good year to sit out the stock market, you may want to think again. On average, the stock market return in an election year is 11%, which is well above average. Another surprising fact is that it doesn’t matter to your portfolio who is in the White House. There is actually no correlation between stock market performance and which party leads the country. Listen in to find out which two presidents saw the same economic growth during their first three years in the Oval Office, the answer will surprise you. Focus on what you can control In investing, there are many factors that are beyond your control. However, that does not mean that your entire financial life is uncontrollable. Actually, the factors that you can control have a lot more to do with your financial success than which investments you choose. Think about all you can control: your cash flow, when you need money, when you stop earning income, what your income sources in retirement will be, how you pay for healthcare, and your estate planning. These controllables are much more important to your financial well being. Outline of This Episode [1:42] We go through this emotional roller coaster every 4 years [7:35] Sometimes the best thing to do is nothing [10:24] Have an investment plan and stick with it [13:14] Focus on what you can control [14:44] Today’s progress principle Resources & People Mentioned Episode 118 Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook

Sep 21

17 min

2020 has been a year of change. The pandemic has given people an opportunity to rethink their lives and many have been rethinking their career. Video recap: https://youtu.be/0RCME_Y8bdI Whether you are one of the millions of people that have been forced into a job change or whether you are considering a professional pivot on your own, there is a lot to think about when changing jobs. On this episode, Grayson Blazek and I will walk you through all the considerations when taking on a new job. If you are rethinking your career listen in to hear how you can take advantage of your human capital.  Think about the total compensation not just the salary Often when we consider a job offer there is only one number we look at. But there is more to a job than the base salary; it is important to consider the total compensation. The base salary helps you plan your monthly expenses but understanding the bonus and stock compensation is also important.  When thinking about the bonus structure of a potential job you’ll want to consider the target. Ask what the confidence in that target is. You’ll also need to understand how the bonus incentive works. How often does it payout? Is the bonus based on your personal performance or on the performance of the team? Some other financial considerations are the stock options and the sign-on bonus. That hiring bonus can be enticing, but don’t let it cloud your judgment. Remember a hiring bonus is only a one-time payment.  Consider the benefits package When comparing job offers you’ll also want to compare the benefits package. Make sure to request an employee benefits brochure if they haven’t given you one. The benefits package is often seen as secondary to the financial compensation but those benefits can add a lot of value to your life. First of all, you’ll want to consider the healthcare plan. Does the company offer one? How does it compare with your current plan? How much of the plan is covered by the employer? Do they offer an HSA? Healthcare isn’t the only benefit to consider. What about life insurance and disability? Does the company offer a student loan repayment program? How about a fitness membership. Consider the entire benefits package and how it could add value to your life.  What is the retirement plan like? In addition to the health benefits and salary, you’ll also want to investigate the retirement plan that comes with this new position. Do they offer a 401K? Will they match your contribution? What are the plan costs? What about vesting, will you actually realize that vesting period? Do they offer other ways to save for retirement? Your human capital is one of the biggest assets you have and the way you spend it will greatly impact your financial future. So when considering a job transition, there is much more to think about than the base salary. Tune in to this episode to discover all the details you need to consider when evaluating a job change. Outline of This Episode [2:50] Think about the total compensation not just the salary [8:30] What is included in the benefits package? [13:42] What is the retirement plan like? [20:22] Does the position include an employee stock purchase plan? [24:31] What about the flexibility factor? [27:54] Consider all your details Resources & People Mentioned Episode 97 - How to Make Decisions About Your Equity Compensation Plans Episode 47 - Why Do I Need an HSA? Episode 91 - Your Retirement Secret Weapon Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Sep 7

31 min

We know how important it is to save for retirement, but at the same time, it’s important to enjoy life now. In this episode, we’ll walk you through how to set up a framework for your investment strategy. Short Youtube Recap: https://youtu.be/LRcH7hwbUYY You’ll learn how important your behavior is to your investment success, how to think through your asset allocation choices and finally how to select the investments themselves.  Investment behavior matters more than any investment you pick What is your investment approach? How you make decisions with your investments can make or break your investment success. You may think that your returns are solely based upon which investments you choose, but the reality is that your investment behavior figures into your returns much more than any specific investment that you choose. Think about last March. What was your reaction to that volatile market? Did you buy, sell, or do nothing? Even though it’s challenging to know how to react in those moments, in a volatile market every move you make counts. The dominant determinant of long-term, real-life financial outcomes isn’t investment performance; it’s investor behavior. –Around The Year with Nick Murray Asset allocation is also important to your investment strategy The second driver to success in investing is your asset allocation. Asset allocation is simply the measure of how your portfolio is dispersed. How much do you have invested in stock and bonds? What percentage of your stocks are US-based? What percentage are international? Asset allocation also takes into account whether your stocks are large-cap, small-cap, etc. Your asset allocation is an important part of realizing your investment returns. How we pick investments  It’s important to have an independent mindset to help you pick your stocks. You don’t want to just follow the pack and do what everyone else is doing. There are several key areas that help us choose stocks at Financial Symmetry. The areas are ethical company culture, low costs, evidence-based, tax-efficient, and whether it is repeatable. We continually ask questions about the investments we choose. And if we don’t like the answers, we don’t invest in those companies.  Do you have an investment plan in place? What is your investment plan? Think about the strategy that you have used to make decisions about investing. An investment plan includes more than investments, it encompasses behavior and asset allocation. If you don’t have one consider working with a fee-only financial advisor. Having an investment plan could be the difference between a successful retirement and an uncertain one. What is your investment strategy? Try taking the quiz in our blog post to determine your investment composure. https://www.financialsymmetry.com/do-you-ask-these-questions-when-selecting-investments/ Outline of This Episode [2:25] Investment behavior matters much more than any investment that you pick  [5:28] How to pick investments [9:41] Active funds vs passive funds [14:41] Process is important [19:50] Think about the strategy that you have used to make decisions about investing [20:12] Progress principle of the day - take the quiz Resources & People Mentioned Dimensional Investing Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Aug 24

23 min

There are fundamental principles that we all need reminders of from time to time. As kids and grandkids are heading off to college, we're talking through 6 core principles to getting off on the right financial footing. We also include a chart demonstrating the power of saving 15% of your income.  Youtube video recap: https://youtu.be/LLlJjITn6B8 If you can follow these 6 steps, it's very likely your future self will thank you. 6 Tips to Begin on the Right Financial Foot Know where your money is going. Track your spending. Review your spending periodically so that you can hold yourself accountable. Budgeting brings awareness to your spending and money habits. There are many online tools that you can use to help yourself with this task.  Don’t underestimate the impact of a large purchase on your finances. People often underestimate the impact of a large purchase such as a large house or car. Big purchases that you aren’t ready for can really impact your future self. The payments you make toward these purchases add up over time. Give yourself more freedom by buying smaller. It’s also important to keep in mind the total costs associated with those large purchases. Maintenance and insurance increase the costs of those big purchases. When contemplating a large purchase think about the time value of your money. This exercise can really help you make these decisions. Sign up for your employer-sponsored retirement plan. It’s important to take full advantage of the retirement plan that your company offers. Make sure that you are signed up for the company matching option if it is available. You want to take full advantage of compounding interest over the course of your working life.  Invest in a Roth IRA. The Roth IRA gives you 30-40 years of tax-free growth. You may not have access to a Roth as you get older due to income limitations, so it is a good idea to take advantage of it while you can.  Don’t skip risk planning. Young people often think of themselves as invincible, but life carries risks. Plan for those risks accordingly by utilizing health insurance, life insurance, and disability insurance. It is also important to create estate documents like a will as well as a financial and healthcare power of attorney.  Discuss money in relationships. Discuss goals and financial expectations with your partner. Don’t shy away from discussing your feelings about gifts, debt, saving, and investing.  Visualize your future self Your ability to create wealth impacted by your ability to earn as well as understanding how you spend money. If you have had trouble saving and investing, visualize your future self. When you are making a decision think about how it will affect you and your finances, not just now, but 20 or 30 years from now. What are you doing now to help your future self? Outline of This Episode [2:35] Know where your money is going [5:15] Don’t underestimate the weight of bigger purchases [7:23] Sign up for your employer-sponsored retirement plan [9:27] Invest in a Roth IRA [11:23] Don’t skip risk planning [14:00] Discuss money in relationships [16:38] Today’s progress principle Resources & People Mentioned BOOK - Happy Money by Elizabeth Dunn BOOK - The Next Millionaire Next Door by Thomas J. Stanley Connect with Haley Modin Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Aug 10

19 min

2020 has brought us a new reality with our vacation mindsets. With many vacation plans put on hold or completely cancelled, the pandemic has become the impetus for second homes becoming more of a reality. Short Youtube video recap: https://youtu.be/dZvXxmFmDxM If you have been considering purchasing a second home, we lay out 5 questions to consider as you're analyzing your purchase decision. Questions to ask yourself before buying a second home Have you ever considered buying a lake house, beach house, or mountain house? Vacation home purchases have surged this year, quadrupling the sales of last year. After an amazing vacation, some people want to jump right in and buy. But before you apply for that second mortgage there are some questions you need to consider.  How much can you afford? Many people only consider the cost of the mortgage, but with a second home, there is much more to consider. Where will you get the down payment? How will you pay 2 sets of utilities? Will you have 2 HOA’s to pay for? If you or your spouse lost a job, how would you continue to pay for this second home? Remember, typically a second home is not a great investment. They can be hard to sell and generally do poorly in recessions. Another important consideration is: how will this purchase impact your other financial goals?  How often will you use it? When will you use your new home? Every weekend? Winters? Summers? Will you rent it out? Consider whether you really want a second home, or 2 nice beach vacations a year.  How much time will you use it? Will you feel like you have to go there? Will it limit other vacations? Is this really where you want to spend all of your time?  Many people end up selling their vacation home because they realize that they didn’t use it as much as they had envisioned. How close is it to your primary residence? Oftentimes, the amount of use a vacation home gets is based on proximity to one’s house. How will your life be affected by a second home purchase? Remember there are not only the financial costs to consider but the time cost as well. Another house means more maintenance. This upkeep requires a financial cost but it could also mean that you have to spend your own personal time fixing up the place. What will you be giving up in return for the new house?  If you are still keen on the idea of purchasing a vacation home after answering all of these questions, listen in to hear what steps you should take next are.  Outline of This Episode [2:37] This year second home purchases have increased [4:19] How much can you afford? [7:40] How often will you use it? [9:16] How will your life and kids’ lives be affected by this purchase? [10:32] What about the ongoing maintenance? [13:07] Describe your ideal second home [13:45] How far is it from your home? [15:47] Do you plan to rent it out? [20:57] The key takeaways from today Resources & People Mentioned Michael Hyatt’s Vacation Optimizer Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jul 27

23 min

You spend half your life preparing for retirement, but that doesn’t mean that there won’t be surprises when you get there. YouTube Recap here: https://youtu.be/zzEnHR9Qv8I Retirement can bring on both positive and negative surprises, so it's important to prepare the best you can beforehand. So in this episode we breakdown the different kinds of surprises you may experience in retirement and how you can be ready. A year of surprises 2020 has been a year of surprises. It seems that every time we turn around the world has something new in store for us. Life has changed substantially and we are all dealing with a new reality. A changing reality amidst retirement can be scary if you aren’t prepared. If you want to be prepared for any eventuality during retirement then listen to this episode now. 5 positive retirement surprises In retirement, there could be good surprises or bad ones. We like to start out with the potentially beneficial surprises. You’ll want to hear which surprises might start out negative but could lead to positive changes. A second career - Some people find that retirement brings them into a second career. They may find this second round more fulfilling or it could be a way to give back to their community. Being able to contribute and still earn an income is an unexpected surprise for many.  An unexpected inheritance - While the situation may not be that positive, an unexpected inheritance could completely change your retirement plans. Coming into money unexpectedly requires careful consideration and planning A layoff - Not everyone retires when they want to. If you get laid off close to retirement age you could turn that negative into a positive especially if it includes a severance package.  Increased travel - If you have family that moved across the country or even across the world this could bring more travel into your retirement itinerary. Although seeing new places is always exciting, it’s important to prepare for the added expenditure.  A change in family dynamics - You may be surprised by taking on a caregiving role in retirement. This role could be for aging parents or even raising the grandkids. Another way that family dynamics change in retirement is through grey divorce. Listen in to discover how changes in family dynamics can change your financial outlook as well.  Don’t let negative changes in retirement surprise you Unfortunately, retirement doesn’t always bring sunshine and rainbows. It’s important to be prepared for negative surprises in retirement as well.  A decline in health - Health changes can change your finances as well. You may find that your Medicare premiums are higher than expected. Find out how you can rectify that by listening to episode 104. Long term care can also have a huge impact on your retirement finances.  Downsizing didn’t have the expected effect. Sometimes we think that downsizing in retirement will bring substantial financial benefits but that isn’t always the case. Inflation can be the silent killer of retirement savings. Even if you pay off your home taxes and insurance are still there and they tend to increase over time. Is your portfolio prepared to battle inflation? Taxes continually surprise us. Many people discover that in retirement they are still paying high tax rates. A market correction - sometimes the timing of market corrections can come as a surprise (although it shouldn’t!) How you respond to a market correction matters. Learn how to factor your risk tolerance into your portfolio so that you can be prepared for any eventuality. Outline of This Episode [2:30] What are you going to do in retirement? [4:38] You receive an unexpected inheritance [6:01] Turn a negative into a positive [10:12] A caregiving role can be a surprise [13:42] Healthcare costs can be surprising in retirement [16:02] Sometimes downsizing doesn’t provide the expected financial benefits  [19:35] Taxes can be surprising [20:21] Market corrections can come as a surprise Resources & People Mentioned BOOK - The New Retire Mentality by Mitch Anthony Episode 104 on IRMAA Episode 98 on Long term care Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jul 13

24 min

No one can argue that the stock market has been tumultuous lately. During times of market uncertainty, investors seem to become even more certain about their predictions of the next stock market moves.  Short YouTube Recap: https://youtu.be/ShmeDGPQ3l4 As people make these predictions over time the stakes get bigger and bigger. Listen to this episode to hear what steps you can take to fight this prediction hubris.  Wealth isn’t determined by investments selected but by investor behavior When markets become more volatile, the desire to control our outcomes becomes stronger. Our instincts pressure us to make predictive moves of what we feel is going to happen. This is when the ability to stay disciplined can have the biggest impact. Otherwise, we find ourselves sweating out extreme buy and sell decisions that could cause you to miss the biggest market moving days. There was a good chance of this with our latest examples over the last 3 months, when you saw 3 of the worst 25 single day losses and 2 of the largest 25 day gains, happened in the S&P 500. This is why we created a thought exercise to help you reflect on your investment strategy during times of market stress. We’re calling it the “R” Plan, where we provide five steps to fight the inevitable prediction hubris that occurs during these periods.  The R plan  Remember your past predictions. Think about the predictions that you made over the past few months. How did those turn out? Do you remember that overwhelming fear we all felt in March? Do you remember 2008? How about the tech bubble? How did your stock market predictions turn out during those tricky times? Regret - The decisions you make in the short term can have a big impact on your long-term wealth. The day to day swings can be huge when the market is volatile. Retirees often feel that they don’t have the time or ability to make up for losses and many decide to sell and flee to the safety of cash. But deciding not to ride the wave can lead to serious regrets.  Resilience - We often forget how resilient the stock market is over time. People don’t acknowledge the fact that stock market declines are always temporary and that they advance 75% of the time. It’s also good to remember that bear markets are shorter than bull markets. Declines are temporary but gains are permanent Be more conservative if you are uncomfortable with the thought of losing half of your asset value. Diversify - we may have mentioned this a few times before. Hire a professional an investment planner as well as a financial planner Consider all your options Implement an investment strategy based on your financial goals Review - When markets are volatile take the opportunity to reflect on your portfolio. Think in dollar figures rather than percentages to make potential losses more real to you. Consider these tips as you review your portfolio Reward - Staying invested in a balanced portfolio with equity exposure has provided long-term rewards. Also, returns are strongest after the steepest declines. Sticking through the rough periods to get to the rewards is the hard part. Because it’s rarely a smooth ride. Returns in any given year have ranged from as high as 54% to as low as -43%. In fact, the S&P 500 had a return within plus or minus 2% points of this 10% average in only 6 of the past 94 calendar years, according to Dimensional research. Resources Worst Investing Dilemma - Blair Belle Curve Guide to Market Recoveries – Capital Group Investors Approaching Retirement Face Painful Decisions - WSJ Investing in Uncertain Times – Ally Bank When Stocks Are In the Red Don't Make This Mistake - CNBC Episode 27 - A Financial Advisor's Worst Investment Mistakes Outline of This Episode [2:06] How can you fight against your instincts of making predictions? [7:04] The decisions you make in the short term can have a big impact [10:21] The stock market is resilient [14:54] Tips to fight stock market worry [20:54] Focus on the reward Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts Stitcher Spotify Google Podcasts

Jun 29

28 min

Special needs financial planning is an intricate and delicate process. Youtube Recap Here: https://tinyurl.com/y7wchxee A process loaded with challenging emotional and financial decisions. So below we provide 4 steps to think through if planning for your special needs loved one’s future. More than 40 million individuals or about 10% of total American population are living with a disability according to the US Census. This takes a careful planning approach to assure needs are met. More Detail Here: https://bit.ly/2BbvxLv Summary Approach – Highlighting the importance of constructing an experienced team to help guide families through the special needs planning process Benefits Available – What governmental benefits and programs are available to my special needs loved one now and as they age? Consider Your Estate Plan – What steps should be taken to align your estate plan to provide ample financial support to your special needs loved one while making sure their benefits are not negatively affected. Develop Your Savings Strategy – What accounts are available for special needs individuals and which are the best fit for your situation

Jun 15

35 min

In times of crisis and uncertainty, the potential need to access our savings seems to rise to the forefront. However, many of the accounts that we utilize for our savings are tied to certain restrictions. For example, the age 59.5 restriction for retirement account withdrawals without facing a 10% penalty, or HSAs and 529 accounts which must be used for medical expenses and education expenses respectively. These unique accounts are great tools to efficiently invest our savings given the tax deferred or tax-free growth. The issue though is what happens when we need funds to cover items that don’t meet the parameters and restrictions set forth by these accounts. COVID-19 has me pondering my own finances and how well equipped they are to be flexible in times of need. These circumstances we’re in have produced many implications to our finances and society with a big one being the impact of education from pre-school age all the way through college. We’ve seen a shift to more online educational resources in recent years and this has only escalated with the impacts of COVID-19. College students have spent the better part of their spring 2020 semester living at home and completing their coursework online. While certainly not the college experience these students anticipated, they’re still able to receive a quality education without the cost of living in a dorm room on campus or 3+ meals per day at the campus dining hall. We’ve even seen some refunds returned to students which if were withdrawn from a 529 account originally, then that money needs to go back into the 529 account to avoid taxes/penalties. So what does this mean for our college savings strategy? For my two 2.5-year-old boys I’ve been saving monthly in a 529 account since they were born with intention to provide a portion of their college education from the 529 account. However, I’ve reconsidered this strategy this week and am shifting to utilizing a couple other accounts for their future savings. At Financial Symmetry we had many discussions with clients about not over-funding college savings accounts given the high taxes and penalty if not used for education along with discussions about savings for the parents own retirement and financial independence. Roth IRA A great savings tool as the contributions can we withdrawn at any time tax-free, and the earnings grow tax free and can be withdrawn after age 59.5. This is the primary account I’ll now be using for future education needs for my twin boys as I’ll be able to withdraw the contributions for the education if needed. If for whatever reason they don’t need those funds for college then no worries as I can retain the Roth IRA for my own future financial needs. With a 529 plan though, I wouldn’t be able to do that as those funds would be restricted to education expenses. Brokerage Account I ran the numbers on the actual advantage 529 accounts do provide. Say my monthly contributions add up to $15k and earn $5k over the years to equate a $20k balance. Those earnings would be tax free in a 529 account for education expenses. If those funds were instead in a taxable brokerage account and assuming a 22% federal tax bracket this would be $1,100 of tax due on those earnings. You must weigh the flexibility of a non 529 account vs. the tax savings it can provide. Also consider that with proper tax planning in a brokerage account could mean even less taxes due given accessibility of tax efficient funds, tax loss harvesting, donating earnings to charity as ways to lower that tax bill. So who should use a 529 account? For those that already are maxing Roth IRA contributions, contributing a large amount to 401ks, and maxing HSA contributions. Those who exceed the AGI limitation of Roth IRAs and are unable to utilize the back-door Roth strategy High probability of attending private grade school as 529 accounts can now be used for earlier education than college. If grandparents or others are making gifts to the child, then a 529 account is still a great vehicle to receive those gifts. If you live in state with tax deduction for 529 contributions (North Carolina does not offer this). Certainly nothing wrong with using a 529 account as you’re still saving for your children’s future needs, but just consider there are other vehicles that may be more appropriate given your financial situation. Also, depending on your financial situation there are other factors to consider such as financial aid. Resources and Other Podcast Episodes Best Tips for Your Young Child’s College Savings Great Options to Save for Your Child’s College Education Tax Breaks and Loan Options to Pay for College My Best Spring Break Ever (The Cost of College) College Planning Night  7 Ways to Use Your 529 Plan

Jun 1

22 min

Why is the stock market doing so well when the economy is not? Short Youtube recap here: https://youtu.be/QubNZjHHN04 With headlines about skyrocketing unemployment and an impending recession, how has the stock market rebounded so quickly? Despite the historic drops in March, the S&P 500 is only hovering in a range 10-15% from its overall highs. While the stock market and the economy are influenced by each other, there are key differences that emerge during market extremes. The economy has taken a beating We have all heard the negative news surrounding the economy. It seems to be one of the only topics that news channels talk about. GDP declined 5% in the first quarter and is expected to decline by 20-30% in the second quarter. Unemployment has shot up at a historic pace from 5% to 15% in just a few short months. However, the Federal Reserve and the CARES Act have helped keep people and companies on their feet. Why is the stock market doing so well? The stock market went through record-setting drops back in March but since then it has bounced in the 35-40% range off the lows. We are still nowhere near the all-time highs that preceded those March declines, but the S&P 500 continues to rise and has been trading in a range 10-15% below it's all time highs reach in February. This creates confusion for most in the face of terrible economic headlines. One reason is that companies and investors are constantly looking at what is to come. They aren’t making decisions based just on the next 6 months, instead, they are projecting the growth over the next 5-10 years. It’s also important to remember that for every distressed seller there is a buyer. Investors are considering their bets for the future and if they anticipate we've seen the worst, then better than expected potential outcomes can drive stocks higher. The stock market recovers before the economy Historically, the stock market tends to make a recovery before the economy. For example in 2009 the stock market hit its bottom in March, but the country continued in its recession until the second half of that year. World War II is another example. The stock market was up every year during that period, despite all the turmoil going on in the world and the restrictions that were put in place by the war. What will happen in the stock market going forward? Well, unfortunately, we don’t have a crystal ball. But there are plenty of opinions you can find from watching the headlines or talking to your neighbors. This type of information can be detrimental not only to your mental state but also to your pocketbook. Allowing your emotions to take the investing wheel, can leave you second-guessing your investment strategy. In fact, the next time you want to look at your investment statements, we'd suggest opening your financial plan instead. You’re better off focusing on what you can control, like your risk tolerance, your rate of saving and spending, and your tax situation. Evaluating how your personal economy has changed, can leave you better positioned for the long-term. This allows you to have the appropriate investment allocations, so your worry can be abated, no matter how wild the stock market or economy gets in the short-run. Outline of This Episode [1:27] Investments, forecasting, and good investments strategy [5:14] The stock market looks forward [6:24] What will happen with the economy and the stock market going forward? [9:09] The stock market doesn’t trade on good or bad, simply better or worse [11:43] Focus on what you can control Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

May 18

16 min

Today we're taking a deep dive to explore the retirement changes within this landmark piece of legislation. On this episode, you’ll learn what CRD’s are, who are qualified individuals, and how to note CARES Act withdrawals on your tax return. Join us to hear about financial opportunities that you may not have considered. Short Youtube video recap: https://youtu.be/2QjSpi3op_U   What is the purpose of the CARES Act? The CARES Act was recently passed to help Americans get through this difficult time that has been filled with job losses, furloughs, lay-offs, and the mandatory closing of workplaces. The goal of the new law was to make it easier for citizens to access their money during these stresses. The CARES Act makes retirement account withdraws easier and more accessible without the standard early withdrawal penalties. What are Coronavirus Related Distributions (CRD’s)? Coronavirus related distributions or CRD’s allow for qualified individuals to take up to $100,000 from their retirement accounts during the period of January 2020 to January 2021. This withdrawal for qualified individuals is taxable but you can pay the taxes on these withdrawals over a period of 3 years. It’s easy to remember what the CRD’s offer by thinking of the 3 R’s.  Relief - The CARES Act offers relief from the standard 10% penalty when you pull money from an IRA or 401K. Repay - You can repay the withdrawals over a 3 year period.  Regimented - The taxes from these withdrawals are regimented and can be paid over a 3 year period.  Who are qualified individuals? The CRD’s are only available to qualified individuals, but who exactly can qualify for these withdrawals? You can qualify if you or your spouse has been diagnosed with COVID-19 or if you have experienced a loss of income during this time. You may have experienced a job loss, a reduction of hours, or an inability to work due to lack of child care. If you do qualify for a CRD you’ll want to examine all of your options before you make this choice. Make sure to work with a professional to see if this is the best choice for you.  This year you do not have to take an RMD The government doesn’t want to force you to sell your stocks at lower prices, so for 2020 RMD’s will not be required for anyone. If you have already taken your RMD for the year you can even pay it back. Listen in to learn how. Instead of taking your RMD, you may want to consider doing a Roth conversion.  Outline of This Episode [1:27] $100,000 withdrawal for qualified individuals [4:46] Examples of how to use your withdrawals [5:55] Who are qualified individuals? [8:00] This year you do not have to take an RMD [13:10] Make sure to note the CRD on your tax return Resources & People Mentioned Episode 108 Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts Stitcher Google Play

May 4

17 min

Today we explore some of the most common questions that people ask during a market decline. We discuss what a financial advisor does and doesn't do for their clients in bear markets, whether you should refinance, and the benefits of tax-loss harvesting. Listen in to hear what you could be doing to stay proactive during this market decline.  Youtube recap here: https://youtu.be/QUCpQcf2vu8 What are the benefits of working with a Financial Advisor during a Stock Market Decline? Financial advisors can be a great resource during a stock market decline. The fear you feel in these situations can be paralyzing. If you don’t have a financial advisor to help you act in your best interests, you may end up not taking any action at all. So what are some things a financial advisor can do for their clients during these challenging times?  Creating a financial plan and an investment plan. You need to know what your strategy is and why you are investing. Not having a plan is putting yourself at too much risk. Listen to the wise words of Warren Buffett, “risk is not knowing what you are doing.” Rebalancing. When the market takes a dive, it could be an excellent time to rebalance your portfolio. Tax-loss harvesting. Nobody likes to pay taxes and tax loss harvesting is a great way to minimize your current and future taxes.  Help avoid making irrational decisions. It’s hard not to sell when the market drops 10% in a day or 30% in a month. A financial advisor can help talk you down off of that cliff and show you the light Should I Refinance my Home? One way to give yourself a bit of control during times when life is feeling out of control is to consider refinancing your home. Since mortgage rates have declined in recent months now may be the right time for you to refinance. You’ll want to analyze what your break-even point is to see if it is worth it. There are many different ways you can go about refinancing. You could use a mortgage broker, you could go through your own bank, or you could use an online mortgage lender. Listen in to hear the differences between those 3 options.  What is Tax-Loss Harvesting and why is it important during a market decline? We all feel the urge to do something right now. But instead of doing something that could be detrimental to your wealth, tax-loss harvesting can give you the opportunity to do increase your wealth over time. The biggest question we hear surrounding tax-loss harvesting is why would I want to lock in losses? The answer is don’t think of it as a loss, but an exchange. You are taking that loss to reinvest in something similar. Look at tax-loss harvesting as a one way to help you rebalance. Find out if tax-loss harvesting is right for you by listening to Allison Berger’s excellent analysis.  Outline of This Episode [0:27] Should I use a financial advisor during a market decline [4:50] Should I refinance my home? [8:36] What is tax-loss harvesting? Resources & People Mentioned Preparing Your Portfolio for a Bear Market Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts Stitcher Spotify Google Podcasts  

Apr 20

17 min

The CARES Act was just recently passed and the new law will impact just about every American. But do you know how it will affect you? View Youtube recap here: https://youtu.be/BTaeWH0aEB0 On this episode of Financial Symmetry, Grayson Blazek joins me to give you some actionable information that you can use to help you consider how best to take control of this challenging financial situation. During this stressful time, it will be helpful to learn as much as you can to give you a feeling of empowerment. Who is eligible for the recovery rebate?  The most discussed part of the CARES Act is the recovery rebate. The full rebate is eligible for taxpayers that make $150,000 or less when filing jointly with their spouse or $75,000 for single filers. If you make more than that you can use a calculator discover how much you will receive. The full rebate is a one-time payment of $1200 per adult and $500 per qualifying child. The recovery rebate will be directly deposited into the bank account listed on your most recent tax return. Listen to this episode to hear if you should file your taxes right away or if it would be best for you to wait a bit longer.  What happens if you or your income is impacted directly by Coronavirus? If you have been impacted directly from the Coronavirus directly or if you have experienced lost wages then you will be able to pull funds out of your retirement accounts in the year 2020 without the usual 10% early withdrawal penalty. These funds will still be taxed, but you can spread the tax burden over a period of 3 years if needed. The CARES Act also changes the maximum 401K loan limit from $50,000 to $100,000. You’ll want to carefully consider before taking the full loan amount.  What else did the CARES Act change? There were several other changes that should be noted as well.  No RMD’s in 2020. The CARES Act waived the required minimum distributions for the year 2020.  You can take an above the line deduction of up to $300 for charitable giving. To encourage citizens to continue supporting their favorite charities during this crisis the law has created this deduction for one time charitable giving.  Federal student loans have been suspended until September 2020. This is only for federal student loans, but this was designed to help people free up their cash flow. There has been an increase in unemployment benefits in both the maximum amount of money you can receive and the amount of time that you can receive it.  If you have a federally backed mortgage you can extend your loan by up to 6 months. How did healthcare change with the CARES Act? This landmark legislation didn’t only affect people’s finances, it made some changes to health care as well. The CARES Act has ensured that health insurance will have to pay for any COVID testing or potential vaccines that are developed. It also expanded qualified medical expenses for HSA’s. What will be the biggest change brought to you by the CARES Act? Outline of This Episode [1:27] Who qualifies for the recovery rebate? [8:18] What happens if your income is impacted directly by Coronavirus [13:12] What has changed with RMD’s? [14:30] Qualified charitable contributions have changed [17:38] Federal student loans have been suspended until September 2020 [20:11] Increase in unemployment [23:44] Will your mortgage payment be delayed? [26:52] What changed in health care? Resources & People Mentioned Stimulus check calculator Connect with Grayson Blazek Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts Stitcher Google Podcasts

Apr 6

31 min

We’re all surprised at the speed of changes the coronavirus has brought in our lives. Working from home, school closures, and social distancing have become our new norms. Stock markets have fallen in to a bear market in less than a month. Uncertainty related to COVID-19 grows daily, as we all know the amount of new cases are destined to rise. It can be hard to find positives through the barrage of more disappointing news each day. But there are steps you can take to prepare your portfolio during this bear market. In today’s episode, we share 7 tips to help ease your worries during this challenging time. Behavior Determines Results We all feel nervous about stock market drops. Despite bear markets happening an average of every 6-7 years, it never gets easier to handle emotionally. During these times, investment behavior determines your returns more than the investments themselves. Having an investment plan beforehand adds discipline to your decisions amidst the turmoil. If you’re questioning what you should do, then referring back to your plan will remind you of your highest priorities. When you think about it, you only really have 3 options to choose from. Sell and go to cash Hold tight and don’t do anything Buy and take advantage of the discounts With the first one, being much more damaging long-term than the others. To cope with this, we’ve put together seven things you can do to help ease your worry so you are better prepared to make more sound financial decisions. 7 things you can do to prepare your portfolio during a bear market Don’t react to panic – Panic is the enemy of a sound investment strategy. In the heat of a decline, is not the time to rush into irrational thinking. Even though it’s difficult to fight your emotions, your investment behavior will determine your return more than the investments themselves. Write down how you’re feeling – Do you remember how you felt in 2008? With the passage of time, our brains rewrite our history. If you write down how you are feeling now, then you can reflect back and read how you really felt during that time period rather than reciting stories your brain selectively chooses to remember. This will help you more accurately temper or accelerate your risk once things start to look up again, depending on your situation. Take advantage of tax-loss harvesting – Help your future tax bill by making some moves now. Tax-loss harvesting is a strategy that is used by selling one holding that has a loss in a taxable account to buy a similar holding, so that your overall allocation doesn’t change. You can then use the realized loss to offset investment income (and up to $3k of ordinary income) in the future. Often there are a few investments that you may have been holding because of large capital gains. This may now allow you to exit those holdings and bank realized losses providing a nice silver lining. Roth conversions – If you were looking to convert money from a pretax IRA to a Roth IRA then this may be a good time to evaluate. With stock market values lower (currently over 30%), IRA accounts could be significantly discounted. If converted to a Roth IRA, the growth that occurs when the market recovers would then be tax-free. This maneuver takes careful analysis for your specific tax situation as the IRA conversion will be taxable. Could be good buying opportunity – This might be a good time to think about dipping your toes back into the water. The hardest times to buy are when you typically get the best returns. Depending on your cash flow needs, this could be a very attractive long-term buying opportunity. No one knows where the bottom will be, but by buying now you’ll be saving 30% from just last month. Focus on what you can control – You can’t control what’s happening in the stock market but you can control your spending. You can also think about other controllable actions like whether you have enough life insurance or if your estate documents in place. Having a financial advisor can help you – if you are struggling right now and doing it all on your own an advisor can help you talk through your feelings and use the tools you have in your toolbox. Outline of This Episode [1:27] Don’t rush into irrational thinking [5:58] Record how you feel now so you can reflect on it later [7:23] Take advantage of tax-loss harvesting [10:25] Roth Conversions [14:26] Focus on what you can control [17:36] Having a financial advisor can help you walk through your feelings Resources & People Mentioned Tax Loss Harvesting: When Investment Losses are a Plus Your Bear Market Survival Guide Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts Stitcher Google Podcast

Mar 23

22 min

Cornoavirus concerns continue to impact the financial markets, as have all the numberless crises that have gone before it. While the potential human and economic effects are very unsettling, what actions should a prudent investor take given this new development? Short Video Recap Here: https://youtu.be/Wsy6OTuY-yI It remains impossible to predict when and how this problem will be resolved.  Likewise, it is impossible to know when and how the markets will anticipate (or react to) such a resolution.  In this episode of the Financial Symmetry show, hosts Chad Smith and Mike Eklund, evaluate all the available information to determine how you should approach your investment strategy. Market declines are a regular occurrence and happen frequently. Selloffs provide an opportunity for investors to absorb new information, squeeze out excesses and reset values to more attractive levels. For existing retirees, we set-up portfolios to include 5-7 years’ worth of high-quality bonds/cash to absorb market declines.  For savers, market declines are great news as it allows you to buy stocks at lower prices through regular contributions. We understand the desire to try to head off market declines by moving into safety. However, our view is that the only way to capture the full permanent returns of equities is to ride out their temporary declines. The danger of trying to time the market is that you will sabotage your personal investment strategy by getting out at the wrong time and then compounding that by getting back in at the wrong time. Summary Fear is a natural reaction. It's impossible to predict the future. There is always uncertainty in investing. Disciplined investing is hard. If you are feeling uncertain, review your financial plan before your portfolio. Other Helpful Links Capital Group: Coronavirus Rattles Markets: What's Next for Global Growth? Dimensional Fund: The Coronavirus and Market Declines Our Ebola commentary from 2014 CNBC: Avoid this investing mistake as coronavirus fears grip the markets Episode 71: How to Ignore Stock Market Noise Episode 75: The Bear Market Survival Guide A Wealth of Common Sense: What If You Only Invested at Market Peaks? The Financial Symmetry Podcast is an original podcast from Financial Symmetry in Raleigh, NC. To learn more about the show or the past 105 episodes, visit https://www.financialsymmetry.com/retirement-podcast/. The hosts and guests in this video do not render or offer to render personalized investment or tax advice in this podcast. This podcast is for informational purposes only and does not constitute individualized advice or a guarantee that you will achieve a desired result. You should consult with appropriate tax and financial advisors for advice specific to your situation.

Mar 6

17 min

Will your retirement regrets list be full of "I wish I would have...?" What if you could use regrets of other retirees to change or improve your current course? Short Youtube Recap here: https://youtu.be/CiGxXeem2yI Listening to the wisdom of those that have gone before you, can help you avoid their big mistakes and take advantage of financial opportunities you may have missed. In our role as financial advisors, we have the unique opportunity of hearing a long list of retirement regrets. In listening to their perspectives, we gain an understanding of the path they took and the things they wish they could have done to prepare for retirement. In this episode of the Financial Symmetry podcast with Chad Smith and Allison Berger, we break down the top retirement regrets that investors typically experience. Listen in so you can learn from others and ensure that you don’t make the same mistakes they did. 9 Avoidable Retirement Regrets I wish I had a detailed retirement plan. 3 out of 4 baby boomers don’t have a detailed retirement plan. Without a retirement plan, it makes it hard to anticipate what may come next. You'll need to consider those big purchases, how often will you buy cars, and if you are going to move. Life can feel much more uncertain in retirement, without the dependability of a steady income you’ve relied on your entire working life. Without a plan, opportunities could be passing you by each year. I wish I hadn’t planned to work so long. There are many people who plan to work until age 70, but due to unforeseen issues, they had to stop working before they were ready. Some had to stop due to family illness, layoffs, or forced early retirement. Whatever the reason, running what-if scenarios could leave you more prepared to face the unknown risks that are lurking. I wish I would have started saving in a tax-free account earlier. An often overlooked strategy while saving, is your lifetime tax rate. By focusing on tax-free savings, it creates flexibility for future retirement withdrawals. There are many that think they can’t take advantage of a Roth IRA due to having a high income, but there are options. Back-door Roths, after-tax 401k savings and HSA's all offer other opportunities. We've included past detailed episodes on all three in the links below. I wish I didn’t have such a big house. Many people become enamored with the idea of a mansion. So much that they sacrifice saving in retirement accounts. More expensive homes require more expensive upkeep. The social pressures in higher priced neighborhoods cause extra lifestyle creep. Years pass, and you realize savings isn't where you thought it would be. Once reaching retirement, downsizing becomes the new trend but moving is often delayed due to frustrations of moving and decluttering their homes. I wish I hadn’t worried so much about market drops. The idea that you could lose half of your savings is scary. There is always a reason you should not invest, but inflation is the silent killer that awaits you, if you don't. Finding the appropriate risk is vital to helping you sleep at night. Research shows a tremendous difference when missing the best days in the market. So while timing market drops is tempting, a buy and hold strategy with appropriate percentages of risk is your best bet. I wish I hadn’t counted on rental income. Be careful about counting on rental real estate if that is your plan. Assure you are factoring in all expenses to your calculation with forecasting returns on rental real estate. Appreciation rates will suffer, if proper maintenance is not kept up on properties. This could affect the long-term health of your financial plan. I wish I would have invested more in friendships. Think intentionally about how you will spend your time in retirement. Many people end up socially isolated in retirement. Retiring to something vs. from something can add to happiness levels and improve your odds of a successful retirement with less regret. I wish I hadn’t taken Social Security so early. Delaying Social Security can be a benefit in multiple ways. An alarming amount of people (57%) take Social Security before their full retirement age. This decreases the amount they could receive and provides more tax flexibility. Less guaranteed income, provides for more IRA/401k withdrawals at lower tax rates potentially.  If you are married, you might also consider the survivor benefit element. Listen in to hear details of the benefits of delaying your Social Security. I wish I had had more experiences. Many wish they had traveled more while they were healthy or while their kids were still at home. Too many look back with the regret of waiting to late to travel. Outline of This Episode [3:07] I wish I would have had a detailed plan earlier [5:06] I wish I hadn’t planned to work so long [7:07] I wish I would have started saving in a tax-free account earlier [10:30] I wish I didn’t have such a big house [12:47] I wish I hadn’t worried so much about market drops [17:45] I wish I hadn’t counted on rental income [20:33] I wish I would have invested more in friendships [22:45] I wish I hadn’t taken Social Security so early [26:00] I wish I had had more experiences Resources & People Mentioned Episode 47 - Why do I need an HSA? Episode 101 - The Social Security Tax Bubble Episode 22 - Don’t Fail in Retirement Episode 36 - Money Can Buy Happiness Episode 91 - Your Retirement Secret Weapon: After Tax 401k Article - High Earners Can Still Save in a Back-door Roth IRA Nerdwallet - How to have a "no regrets" retirement BOOK - The New Retirement Mentality by Mitch Anthony Book - Your Retirement Quest by Alan Spector BOOK - Happy Money by Elizabeth Dunn The Financial Symmetry Podcast is an original podcast from Financial Symmetry in Raleigh, NC. To learn more about the show or the past 104 episodes, visit https://www.financialsymmetry.com/retirement-podcast/. Connect with us here: Allison Berger on Twitter @AbergerCFP Chad Smith on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe to this Podcast: Apple Podcasts <> Stitcher <> Google Play  

Feb 24

31 min

How closely did you look at your Medicare premium notice letter this past December? If it mentioned an IRMAA adjustment, and you experienced a life-changing event, you may want to look again. There's a few steps you can take that can save you thousands of dollars in Medicare premiums. In this episode, we are breaking down the the tax cliff known as IRMAA and how proper planning can help you avoid overpaying for your Part B and Part D Medicare premiums. YouTube recap: https://youtu.be/BQ7K_DeJiHs What is IRMAA? This often misunderstood or overlooked area of the tax code is how Medicare determines the premiums that are automatically taken from your Social Security check. IRMAA stands for Income Related Monthly Adjustment Amount. Understanding the IRMAA threshold is key to understanding your Medicare premium.  Watch out for the IRMAA tax cliff Generally, when you think about Medicare you think about age 65 and above. It’s actually important to begin thinking about Medicare when you are 63. Your Medicare premium at age 65 is actually based on the income that you made 2 years prior. So if you were in one of the higher income brackets before you retired, your Medicare premium will reflect that. There are 5 tiers of IRMAA and if you go even $1 over you will be knocked into the next bracket. If you end up in the highest tier you could be paying over $4000 in extra Medicare Part B premiums.  How can you plan ahead? Now that you know about IRMAA you can begin to plan ahead. If your AGI is $87,000 or less for singles or $174,000 or less for a married couple then you will qualify for the Medicare Part B baseline premium which is $144.66 per person per month. It’s important to understand your income sources and whether they are taxable or not. Knowing where you fit in the IRMAA tiers will save you money. Listen in to hear more about IRMAA and how it can affect your retirement plans.  What can you do to appeal? If you didn’t plan ahead and are stuck with high premiums you may be able to appeal. You can appeal based on marriage, divorce, death of a spouse, work stoppage, work reduction, or loss of income. If you qualify for an appeal then you’ll need to fill out an SSA44. There are 5 steps to follow to appeal process. Listen in to discover what you can do if IRMAA has got you down.  Outline of This Episode [3:27] Which parts of Medicare does IRMAA affect? [7:20] An example [9:55] How can you appeal? Resources & People Mentioned IRMAA Tables Connect with Grayson Blazek Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast

Feb 10

22 min

How do you best invest at all-time market highs? In this episode, we are walking through the strategies and disciplines you'll need to be a successful long-term investor.  Short Youtube recap here: https://youtu.be/fEXnQ8GaCuk Visit full article notes here: https://wp.me/p6NrVS-3i0 Short-term market forecasting is impossible to predict We often get the question of whether people should continue to invest given the all-time market highs. Well, let’s take a look back to just a year ago. At the end of 2018, the U.S. stock market declined by 20% and everyone was worried about a potential bear market. But it turned out that 2019 was a fantastic year despite all the worries. We can’t tell you when will be a good time to invest in the short-term. No one can. No one has a crystal ball that can predict those outcomes. It is important to formulate a decision-making process that is not outcome-based. Financial decisions should always be processed based instead.  What does the long-term history of investing tell us? Think about where you were in December 2009. You probably weren’t too optimistic about the economic future. But it turned out the S&P 500 was the best place to invest over the past 10 years. But in the 10 years preceding it was the worst place to invest.  There is never an easy time to be an investor. Investing always involves risk and many see that risk as a reason not to invest. There is always a risk and plenty of reasons not to invest. But when you look back, you’ll realize recessions, while painful, happen quickly but the market rises over the long run. A diversified portfolio will always include something you don’t like After the S&P’s strong run the past 10 years many people wonder why bother to invest internationally or why they should hold any bonds in their portfolio. Even though the S&P 500 performed quite well over the past 10 years, it was the worst place to invest during the previous 10 years. To protect yourself, you’ll need to be diversified. Bonds can not only provide diversification but they can provide income and capital preservation as well. They may not be the most exciting, but bonds will ensure you don’t have all of your eggs in one basket.  So what is the 2020 market outlook? Once again we find ourselves in a time of uncertainty. There’s the threat of war, a presidential election, and who knows what else could happen next. Given this time of uncertainty, what changes should we be making to our portfolios? The only sure answer is that you should only be taking as much risk as you can handle. Don’t let recent market performance lull you into taking too much risk. Listen in to hear the outlook for 2020 and beyond.  Outline of This Episode [2:27] Short-term market forecasting is impossible to predict [5:35] Let’s look at how the markets have performed in the long-term [10:52] Take a look at bonds [15:10] What has happened with consumer confidence? [17:35] Why hold foreign stocks? [20:15] What changes should we be making to our portfolios given the current climate? [23:54] What do the experts predict to happen over the next 10 years? Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Spotify <> Google Podcasts

Jan 27

31 min

The SECURE Act is the biggest piece of retirement legislation to pass since 2006. On this episode, we discuss what the SECURE Act is and how it will affect you and your retirement plans. The acronym SECURE stands for "Setting Every Community Up for Retirement Enhancement."  Watch corresponding Youtube video here: https://www.youtube.com/watch?v=d0K8KBlCYhs&t=2s In our breakdown of the new bill, you’ll learn about the highlights including new IRA rules, changes to 401K’s, non-retirement changes, and extenders. The Stretch IRA is not as stretchy One of the most impactful changes in the legislation deals with the Stretch IRA provision for non-spouse beneficiaries. Under the old law, upon a person’s death, the non-spouse beneficiaries of their 401K’s and IRA’s could withdraw savings over the span of their entire lifetime. Now, as of January 1, 2020, the Secure Act compresses that time period to only 10 years after the year of death, thus speeding up the timeframe for taxes to be paid on these pre-tax savings. This complicates some old strategies being used, but creates new planning techniques for others. There are a few eligible designated beneficiaries that will avoid the 10 year payout. These include: the surviving spouse of the deceased account owner a minor child of the deceased account owner a beneficiary who is no more than 10 years younger than the deceased account owner a chronically-ill individual a disabled individual Tune in to see how you may need to tweak your retirement withdrawal strategies to best work for you and your heirs. More changes to IRA’s The Stretch IRA wasn’t the only thing that changed with IRA’s. The required minimum distribution (RMD) age was raised from age 70 ½ to 72. This means, for those yet to reach 70.5 by 1/1/2020, that you won’t have to take funds out of your IRA until age 72. You’ll have a year and a half longer to convert those funds to a Roth IRA, depending on tax brackets. Despite the RMD age moving back, you still have the option to make a qualified charitable distribution (QCD) at age 70. If you'd like a refresher for some of these financial acronyms we're mentioning, check out episode 63, our Financial Acronymology guide. Additionally, those over 70 and still working can now contribute to a traditional IRA if they have earned income. In the old law, this ability stopped at 70.5. But people are living and working longer now (without adequate retirement savings for many), so the SECURE act makes this possible. Good news for 401K’s Finally, we get to the part about setting communities up for retirement. With the changes in the Secure Act, more small business owners will be able to offer 401K’s to their employees. The bill makes it easier to be auto-enrolled to help those people that never get around to setting up their 401K contributions. Part-time employees will also benefit from the new bill. Now part-timers who have worked 500 hours over the past 3 years will have access to 401K’s. These changes are designed to make retirement savings a bit easier. How will the Secure Act change your financial plans? The Secure Act is a great reminder of how quickly laws can change. Without close attention, your original intent could no longer be the most optimal strategy for your retirement plans. One of our primary responsibilities is to help you uncover tax saving or planning opportunities when they become available. Remember, financial planning is like putting together a puzzle. Make sure you have all the pieces by learning as much as you can to improve your financial opportunities. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for 20 years. Outline of This Episode [3:04] The biggest changes with the Secure Act are to IRA’s [11:44] Small businesses will find it easier to offer 401K’s to their employees [17:07] Non-retirement changes [18:55] The extenders Resources & People Mentioned Fidelity – The SECURE Act and You Fidelity – SECURE Act FAQ’s Lexicology – The Good News and Really Bad News for IRA Owners Under the SECURE Act Kitces.com – SECURE Act and Tax Extenders Episode 63 – Financial Acronymology Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Spotify <> Google Podcasts

Jan 13

25 min

Are you in the Social Security tax bubble? Tax rules are complicated enough, and Social Security benefits during retirement years add another layer of complexity. Watch corresponding Youtube video here: https://www.youtube.com/watch?v=0RnQY0NxhSM&t=39s Your Social Security income can cause your actual tax rate to be much higher than expected. Not understanding how and when Social Security benefits are taxed can lead to an unpleasant surprise when Uncle Sam comes calling. You’ll also learn why multi-year tax planning is so important in retirement.  How should you decide when to take Social Security? If you are approaching age 62 you may be considering when to take Social Security. It can be tempting to take that low hanging fruit as soon as possible. But we often recommend that you delay taking your Social Security benefit for as long as you can. If you don’t take Social Security early then you need to think about how you’ll make enough money to cover the costs of your lifestyle. Do you have IRA’s, 401K’s, or even an old-fashioned pension? When planning your retirement income you’ll also want to think ahead to age 70 ½ when you’ll have to take the required minimum distribution or RMD. Have you decided when to take your Social Security benefit?  Social Security tax bubble or tax torpedo? Your Social Security benefit can be taxed like any other income source. But there is a way to determine if and how your benefit will be taxed. You can use a special calculation that is determined by the IRS. To do this, add up your taxable income and add half of your projected benefit. If it is over a certain threshold then it will be taxed. You’ll need to be careful when determining your income since tax rates increase slowly and then suddenly jump from 22% to 41%. You don’t want those taxes to torpedo your retirement planning. Listen in to find out how to plan ahead. It pays to plan ahead Sure, you want to pay the lowest amount in taxes each year, but retirement tax planning is a bit more complicated. You’ll want to consider your lifetime tax bill. You don’t want to pay 0% in taxes this year only to be stuck with a 24% tax bill next year. You’ll want to have a comprehensive retirement plan which considers when to take out more money for those big-ticket items that will inevitably come up. With a little bit of planning, you can spread your tax burden out over multiple years. You also need to consider that your 60’s provide you with a unique opportunity to name the income that you won’t have in your 70’s. Discover why your 60’s may be the most important tax planning decade by listening to Will Holt’s tax expertise.  Understand all the tax opportunities and risks that are out there There are plenty of risks involved with retirement tax planning but there are also lots of opportunities to save on taxes as well. One tax opportunity you shouldn’t miss is topping out your tax bracket with Roth conversions to help minimize your RMD once you turn 70 ½.  If you are planning to retire early the Affordable Care Act could throw you another curveball. It is important to understand the income levels needed to qualify for the subsidies available. There is a lot to consider when in retirement tax planning.  Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients by providing financial planning to the Triangle residents of North Carolina for 20 years. Outline of This Episode [1:27] When should you take Social Security? [4:12] A brief overview of the Social Security tax bubble [9:00] Why you should not only consider this year’s tax bracket [13:22] Can you change your mind when to take Social Security? [15:44] Why would someone take Social Security early? [17:32] What are other considerations? Resources & People Mentioned Episode 99 Connect with Will Holt Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Dec 2019

24 min

What does it take to get to 100 podcast episodes? In his book, Shoe Dog, Phil Knight describes his emotions upon starting the company that became Nike, as a crazy idea. When describing how he felt, he realized that many of the world’s greatest achievements started as crazy ideas. Watch corresponding Youtube video here. What seemed like a crazy idea for us 4 years ago, has turned into more than we could have ever imagined. We recently shared about what motivated us to start the show in our review of FINCON. In this episode, we’re pulling back the curtain, as we reflect on our 4 year journey to episode 100. We discuss lessons learned, surprises we encountered along the way, and mistakes we made. We also reveal some of our favorite episodes and you’ll also hear what’s next for the Financial Symmetry show. But this exciting milestone wouldn’t have been possible without you! What we have learned over the past 100 episodes We were fortunate to start our passion project at a good time. The strong tailwind of meteoric growth for all podcasts propelled our show to a 600% growth rate in downloads since our first year. Most of our listeners find us on Apple Podcasts currently, but we included an article below discussing the growing popularity of Spotify as a podcast deliverer. Podcasts also allow for listeners that would otherwise never hear about us. To that point, 20% of our listeners are in California. The magic of a technical tool that will continue to expand and grow. We’ve enjoyed using this medium to share our views about unique financial planning opportunities and uncover risks that our listeners may not be aware of. We’ve also learned how much fun creating a podcast can be. After overcoming the difficulties of getting started, we were reminded that consistency is key. We have learned from our mistakes Mistakes are inevitable part of any journey. The key is to use them to propel you to be something better. Our podcast was a treasure trove of bumps in the road when getting started. Just dial up our a few of our first episodes, especially if you enjoy hearing someone reading directly from a blog post. Thankfully we learned fairly quickly to ad-lib and play off of each other. Listening to yourself, also provides a great opportunity to critique your communication style. Inviting other experts in the firm, added a nice potpourri of voices as well. I’m sure our listeners appreciate the fact that we have learned to use an audio editor to improve the quality of our material. A key truth that translates to many areas of life. Bring your expertise to your specialties and find experts in other fields to do the rest. Our favorite episodes, and yours Inevitably, some episodes are better than others. Regardless, our aim is to always provide you with content that plants a seed that might motivate you to dig a little deeper on a specific planning topic. But we also try to present the content in an entertaining and engaging way. A few of our favorite episodes include episode 20 where we drew comparisons of common financial planning conversations to one of our favorite movies, The Usual Suspects. Another favorite was episode 27, where we broke down Mike’s top 10 investment lessons he’d learned just after turning 40. We share a few more along with the top 4 most listened episodes since we started. What’s next for the Financial Symmetry show? We’re continually learning how to improve our content and provide you with material that you can learn from and implement. We are excited to make better use of an editorial calendar to plan future episodes. Is there a topic that interests you that you think we should cover on the show? Let us know what you would like to hear by sending us an email with your suggestions. Outline of This Episode [2:27] Some listener statistics [6:27] What we have learned along the way [14:17] Surprises we have encountered [15:35] Mistakes we have made [19:26] Our favorite episodes [25:24] Most listened to episodes [29:12] What is to come on Financial Symmetry? Resources & People Mentioned Shoe Dog by Bill Knight Atomic Habits by James Clear Happy Money by Elizabeth Dunn Article – 20 Podcast Predictions for 2020 from Top Industry Leaders Episode 99 – Don’t miss out on the Social Security joke! Episode 20 – The Usual Suspects episode (Chad’s favorite) Episode 27 – Top Ten Investment Mistakes (Mike’s favorite) Episode 4 – Setting Goals Episode 45 – How Likely You Are to Build Wealth Episode 24 – Investing Your Year-End Bonus Listen in to find out how! Episode 36 – Money Can Buy Happiness – the best ways to spend your money Episode 91 – The Retirement Secret Weapon Episode 60 – 5 Ways to Improve your financial decision making Episode 75 – The bear market survival guide Episode 61 – Planning a more enjoyable summer vacation Episode 48 – Making better decisions with the laws of wealth Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Spotify <> Google Podcasts

Dec 2019

33 min

Who you gonna call? Retirement Mythbusters! Short Youtube recap here: https://bit.ly/2R0QJcA Visit Full Article Here: https://wp.me/p6NrVS-3g5 Not as catchy as Ghostbusters, we know, but these retirement myths can be much more hazardous to your long-term financial health. Many of us have certain beliefs, internet rumors or family hearsay that are passed down about retirement rules of thumb. But believing in these stories could be detrimental to the long-term success of your retirement. On this episode, we do our best Mythbusters imitation (of Discovery Channel fame) to bust these common retirement myths. Listen in to hear why you may want to challenge conventional thinking, and discover what it could cost you to continue to buy in to the hype.  8 common retirement myths I’m not going to live that long. So many people don’t think they will live until age 90. But the truth is, men who are 65 today have a 20% chance of living until 90 and women have a 33% chance. Couples have a 48% chance of one of them making it to age 90. You need to make sure your money will last as long as you do. Does your financial plan cover you until age 90? I’ll work until age 65. The actual median retirement age is 62. Many people plan to work longer, but they are forced into retirement early. Some people try out a second act. Whenever you do choose to retire, be sure that you are retiring to something, not away from something. Do you have big plans for your retirement?  Social Security will run out. Some people use this myth as an excuse to claim their Social Security benefit early. But claiming Social Security below your retirement age greatly reduces your lifetime benefit. If you delay until age 70 will result in an 8% increase per year! Once I reach X amount of money I can retire. The reality is that everyone’s situation is different. There is no magic number! There is so much more to retirement planning. What magic retirement number did you have in mind? Paying the lowest amount of tax is always best. Are you trying to be too tax efficient? Think about optimizing your tax situation rather than minimizing your taxes. Consider working with a financial planner and an accountant to help you consider long-term tax planning.  When I retire my investments should be conservative. This isn’t always the case. People are living longer than ever so you may need your investment portfolio to last you 30 or 40 years. There is actually a bigger risk of being too conservative rather than risky.  I need to pay off my mortgage now. A mortgage is the cheapest money you can get in a loan. So not paying it off and investing the difference actually makes more sense financially. But for some people paying off their mortgage provides them with peace of mind. Which camp do you fall into? Would you prefer the peace of mind that a paid-for house provides? Retirement spending is the same throughout retirement. Retirement planning is more complicated than you think. Your spending in retirement changes throughout the years. In the first 5 years of retirement, people spend a huge amount of money. You may spend it on travel, fixing up your home, eating out, or whatever it is that interests you. You finally have the time to spend all the wealth that you have built. Then spending slows down as you do. Unfortunately, retirement spending tends to increase the older you get, but this time it’s on medical expenses. Have you planned to spend the same amount each year in retirement? Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for 20 years. Outline of This Episode [2:47] I’m not going to live that long [5:30] I’ll work until age 65 [9:22] Social Security will run out [13:12] I can retire after I have $1 million saved [15:10] Paying the lowest amount of tax is best [18:00] When I retire my investments should be conservative [21:00] I need to pay off my mortgage now [23:55] Retirement planning is more complicated than you think  Resources & People Mentioned Episode 52 BOOK - The New Retire-Mentality by Mitch Anthony BOOK - Your Retirement Quest by Alan Spector and Keith Lawrence Article – Starting Over in your 50’s – What to do when you’re laid off Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Spotify <> Google Podcasts

Dec 2019

30 min

How do you know if long term care insurance is worth it? Short Youtube video here: https://bit.ly/3akBTVZ This is a topic we discuss with our clients regularly.  With an aging population comes increased options for retirement living, assisted living and nursing care options.  Along with increased options come increased costs as well which can be exorbitant in some cases. If long-term care insurance has been on your mind, you’ll want to have a listen to our objective viewpoints as we consider if long-term care insurance is really worth it.  Why do people consider long-term care insurance? There are 3 different ways that people may fund their long-term care needs. They may self-insure, or use their savings. They buy long-term care insurance, or they may rely on government funding. Many of our listeners are in the sandwich generation, where they are both helping their kids and helping their parents at the same time. As they watch their parents age they begin to see the emotional and financial stress that can arise and it affects the way they think about aging. 70% of people will need some sort of long-term care. Usually, a stay in long-term care is only a couple of years but 1 in 10 men will require a stay of more than 5 years and 2 out of 10 women will stay more than 5 years in long-term care.  At what age should you buy long-term care insurance?  As you probably know, long-term care insurance only gets more expensive as you age. But you probably don’t want to buy into it too early, what if the insurance company goes out of business? We think the best time to buy long-term care insurance is in your mid-50s. Costs tend to jump about 6-8% each year that you wait. But even if you do buy early the premiums could increase. Often times the actuaries don’t fully understand the risk and end up raising premiums for current policyholders.  What does long-term care insurance cover? Generally speaking, people go into long-term care when they can no longer perform the activities of daily living or ADL. This includes going to the bathroom alone, eating, moving about the home, or they experience a decline in mental state. Often the long-term care insurance covers a maximum period of 6 years or less. There is a daily benefit amount that you can choose from. Often that benefit is between $100-$200 per day. Many long-term care insurance packages come with an inflation rider. Your premiums will be related to the variables that you choose.  So, how much does it cost? Long-term care is not cheap. A private room with skilled nursing can cost $100K per year. Going down the scale, assisted living averages about $75K per year. And home health can be about $50K per year, but you do have to factor in household expenses as well.  A 65-year-old couple can buy a long-term care insurance policy for $4800 per year with basic benefits totaling $180K. If that same couple waits until 75 to purchase a policy that amount will increase to $8700. You also need to consider the fact that not everyone gets approved. The longer you wait to buy a policy the harder it is to get approved.  It’s important to have as much information as possible before making costly decisions. You need to understand all of the factors before you commit. We’re here to help you make informed choices. Listen in to hear all of the factors that you should examine when considering whether to buy long-term care insurance. Outline of This Episode [4:27] Why do people consider long-term care insurance? [6:57] At what age should you buy long-term care insurance? [10:14] Won’t Medicare cover this? [10:50] What am I paying for? [13:47] How much does it cost? [16:46] A case study about self-insuring [20:07] What types of policies are there? [23:25] What questions should you be asking yourself? Resources & People Mentioned Kiplinger - How to Afford Long-Term Care Genworth - Cost of Care Survey CNBC - Not having it can be serious Morningstar - An Action Plan for LTC Vanguard (PDF) – Planning for health care costs in retirement AALTCI – Long-Term Care Statistics Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Nov 2019

30 min

Does your place of employment offer an equity compensation plan? Are you one of the 76% of people who have not exercised their stock options or sold shares of their company stocks? Mike Eklund is back after a hiatus and he is jumping in with both feet. He dives deep into the nitty-gritty of equity compensation plans. Since this can be a complicated subject you may want to consult a financial professional before making any big decisions about what to do with your company stock options.  Watch corresponding Youtube video here. Why do companies offer equity compensation plans?  Many companies offer equity compensation plans as a part of an overall hiring package. The main reason is to align the company and employees. If the stock price goes up then you make more money. These compensation plans can be a big draw when you are trying to decide where to work. There are 4 main types of plans offered by companies.  Employee stock purchase plans (ESPP) Owning stocks directly Restricted stock Incentive stock options (ISO). These are non-qualified stock options.  It is important to know how these types of plans differ and what their advantages are. What kind of equity compensation plan does your company offer? Don’t let taxes wag the dog The biggest question of owning stocks is when to sell. Don’t let the taxes wag the dog means don’t let taxes impact your investment decisions. So many people choose not to sell a position simply because they don’t want to pay taxes on it. It helps if you understand how the taxes work in each situation.  If you own stocks outright for over a year and sell then that is a long term gain and you will be subject to capital gains tax at the rate of 20% at most. If you own for less than a year then it is considered a short term stock and is subject to a higher tax rate of 37%. In this case, you’ll want to own for over a year for the best result.  If you own ESPP stocks then it is important to know whether you hold a qualifying or disqualifying disposition. A qualifying disposition is better. It is tied to how long you own the stock. You’ll want to own for at least a year before you sell.  Restricted stock is taxable when it is vested. Although restricted stocks are pretty straight forward your financial advisor can really help you with saving money in taxes.  ISOs can provide significant tax savings but they have many requirements. They are more tax advantageous than nonqualified stock options. You have more control over when the tax event occurs. Ask these questions of yourself to discover how much company stock you are comfortable owning What percentage of my net worth is tied to the company stock today? How secure is the company? How long do you plan to stay with the company? Are you willing to wait it out? Am I comfortable with the risk of owning a large share of company stock? Think about your limits. How will you feel when the stock rises or falls?  What can you do if you own a lot in company stock? If you own a lot in company stocks you’ll want to lower your risk and make sure that you are protecting yourself from a potential downturn. You can use these tools to think about how to create a framework for making better investing decisions.  Purchase a put option. This will ensure the stock sells at an agreed-upon price. Trading plans allow corporate insiders to diversify stocks through prearranged stock selling plans. Gift it to a donor-advised fund Gift the stock to family or friends.  Listen in to hear how you can use a combination of these strategies to help you decide what to do when you own company stock.  Outline of This Episode [4:17] Why do companies offer equity compensation plans? [7:25] Don’t let taxes wag the dog [14:26] What can you do if you own a lot in company stock? [19:51] Some important questions to consider Resources & People Mentioned CNBC article on the risks of company stock options  Things to know before exercising your stock options ESPPs and taxes Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play  

Nov 2019

28 min

There’s a lot of conflicting information about buying a timeshare. Some call it the worst financial decision you could make. But is that true? On this episode, we invite Allison Berger to discuss the pros and cons of buying a timeshare. If you’ve ever been roped into one of those high-pressure sales meetings you’ll want to listen to consider if you made the right decision. Short YouTube video: https://youtu.be/RqfiAvdPS-I In this episode of Financial Symmetry, host Chad Smith talks with Allison Berger about strategies for spotting timeshare scams and thinking through decisions about timeshares. If you have ever been on vacation at a nice resort you may have sat in on a timeshare presentation. These high-pressure sales meetings are designed to make you a buyer and they pull out all of the stops to get you to sign on the dotted line. They claim to only need 90 minutes of your time, but those 90 minutes can be pretty intense. According to the American Resort Development Corporation, 2018 was the 9th consecutive year of growth for timeshare sales. Out of 127 million households in America, 9 million own at least 1 shared vacation product. So 7% of families are also timeshare owners. That means they must not be too bad, right? But what exactly are you buying? What is a timeshare? If you have ever stayed at an upscale resort, you may have sat in on a timeshare presentation. These high-pressure sales meetings are designed to make you a buyer and they pull out all of the stops to get you to sign on the dotted line. They claim to only need 90 minutes of your time, but those 90 minutes can be pretty intense. According to the American Resort Development Corporation, 2018 was the 9th consecutive year of growth for timeshare sales. Out of 127 million households in America, 9 million own at least 1 shared vacation product. That means they must not be too bad, right? But what exactly are you buying? We all know about the incentives to get you to buy a timeshare (or even just to sit in on the sales meeting), but what other positive experiences can be had from buying a timeshare? You will guarantee yourself a vacation each year if you buy a timeshare. The accommodations are typically very nice and often include two-bedroom suites with a kitchen. This beats staying in a cramped hotel room. Typically the break-even point of buying a timeshare is between 8-14 years, so if you vacation every year for 20-30 years you’ll come out ahead.  But there are many negatives that come along with timeshares. Even though the average maintenance fees are only about $1000 a year, the average sales price is $21,000. If you change your mind and wish to resell the timeshare you may be out of luck. There isn’t much of a market for timeshare resales. Timeshares are complicated and can be challenging to book. If you don’t know the jargon of the timeshare company you could be lost and stuck vacationing somewhere you never wanted to be. Tell us about your experiences with timeshares. Shoot us an email, we’d love to hear your stories.  Resources Mentioned in the Episode Consumer Reports: Why inheriting that beautiful timeshare can bust your wallet Don't Fall for Timeshare Exit Scams Article - Considering a Timeshare? Don't You Ever What is a timeshare and how does it work? Breakdown of Sales Process using Robert Cialdini's book - Influence

Oct 2019

27 min

Every year there are approximately 140 million tax returns filed with the IRS and of those, 4 million will receive an IRS letter stating that there is a discrepancy. Your first instinct might be to panic, but don’t overreact. Grayson Blayzek is here to help us understand what you can do if you receive the dreaded CP2000. You’ll want to listen in not only if you have received a letter, but also to learn what you can do to prevent receiving one in the first place. Short Youtube video recap here: https://bit.ly/2NBiVkm  You can take a proactive approach or a reactive approach to receiving an IRS letter There are 2 different approaches when dealing with an IRS letter. You can take a proactive approach or a reactive approach. The reactive approach happens after you receive the letter, but a proactive approach helps you get in front of any tax confusion and reduce the chances that you will receive a letter. Here’s what you can do to take the proactive approach.  Keep accurate and complete tax records, including W2’s, 1099’s, and investment documents.  Make sure you receive all the tax information before you submit your tax return. Be patient as you go through the filing process. Check your records as they come through. Make sure the information looks accurate. Include all of your income. Make sure you don’t underreport any income Follow the instructions when you fill out the 1040 and fill it out completely and accurately.  How can you amend your tax return?  The first step to amending your tax return is to realize where your mistake was. Did you transpose a number? Did you receive a tax document after your return? A tax professional can help you look at your return and find the problem. Sometimes a backdoor Roth strategy is the culprit in a tax return error. Funds that were converted to IRA’s might get reported on the tax return when they shouldn’t. The process of filing an amended tax return is similar to filing an original return. But instead of filing a 1040, you’ll file a 1040X.  What should you do if you do receive the dreaded IRS letter? If you do receive a letter from the IRS it will come via snail mail. They will never email you, text you, or send you any other type of message. The letter you will probably receive is a CP2000. 4 million taxpayers receive a CP2000 each year. Basically this form is stating that something in your tax return doesn’t match the IRS records. It isn’t a bill, but do realize the burden of proof is on you to correct the error. Here’s what to do if you receive the CP2000: Review the letter and determine what the IRS is saying and make a note of the response date.  You typically have 30 days to respond. If you don’t respond to the 30-day letter they will issue a notice of deficiency or 90 day letter. At this point, you’ll have fewer rights to appeal, so it’s very important to respond to the first letter in a timely manner. You can agree or disagree with the letter. If you agree, then complete the response form, send in the taxes due and you’re done. If you disagree you’ll need to gather the relevant information and mail it to the IRS.  After you have responded to the notice it will typically take 6-12 weeks before you get a response.  Don't overreact Taxpayers spend the first 3-4 months of the year gathering documents and working through the tax filing process so it can be frustrating to receive an IRS letter stating that there is a discrepancy. But make sure that you don’t ignore it. Read it carefully and don’t overreact. Take time to digest the information to get a clear understanding of what the IRS is proposing. Get tax advice if you need it. No one likes paying taxes but it is a function of our society. Annual tax planning can reduce your tax burden but we still have to pay the appropriate level of tax fro our level of income. Maintaining appropriate tax records is a great way to avoid a tax notice from the IRS. Outline of This Episode [1:40] Every year there are approximately 140 million tax returns are filed with the IRS [3:22] What should you do if you get a letter? [8:40] How do you amend your tax return? [12:54] All information you receive from the IRS will be through the mail [15:30] What steps should you take if you receive a CP2000? Resources & People Mentioned Do’s and Don’ts for Taxpayers Understanding Your CP2000 Episode 81 Connect with Grayson Blazek Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Oct 2019

25 min

Many of you are inching closer to retirement and the decisions you make now will have a big impact on your retirement lifestyle. It’s time to start thinking ahead and seriously consider your retirement strategy. Are you concentrating on the best ways to save to set up for the life you want in retirement? This is why we have created a pre-retirement checklist with 8 key wealth builder areas for you to consider. Listen in now to discover what you need to think about now that you are rounding the final stretch in this race to retirement.  Your pre-retirement checklist How will you spend your time in retirement? Explore what you might enjoy doing and give it some practice. Try to structure a calendar of your average week. How might you allocate your time? How will you challenge yourself? What new skills will you learn? How will your income change? What will it take for you to retire? How much will you need and where will that money come from? Most people have a combination of 6 sources of income to provide for their retirement which includes: social security, pensions, deferred compensation, withdrawing from savings, part-time work, and passive income. What will your retirement lifestyle be like? The more you spend the more income you’ll need and the less you spend the less income you’ll need. Think about how much you plan to spend and how will you spend it.  What is your current net worth? In retirement, your accounts will no longer grow and they may start to fall in value. Take an inventory of what accounts you have. Are they pre-tax or post-tax? Do you have an HSA? Brokerage accounts? Annuities? Where do you stand financially? Lay it all out on paper so that you can decide what you need to do next.  Tax diversification is as important as investment diversification in retirement. How tax-efficient are your savings? A 401K conversion is a great way to save in taxes. You should also consider what your tax bracket will be in retirement.  What is your investment strategy? How do your emotions play a role in investing? What is your risk capacity? What is your risk tolerance? You will need to understand when and how much you will need from your investments and have the appropriate asset allocation. Know what your expected returns will be. This will help you understand how long your portfolio will last you. Healthcare can be the deciding factor for how and when you retire. If you are planning to retire before the age of 65 you’ll want to factor in healthcare costs. How will you bridge the gap until Medicare kicks in? Will you take COBRA or use your state’s health insurance exchange? You should also consider whether you want to get long-term care insurance.  Do an annual review of your estate. Block off some time each year to check if your estate plan still reflects your wishes.  Are you in your catch-up years? Your 50’s are often referred to as the catch-up years when it comes to retirement planning. There are lots of opportunities to think about as you approach retirement. Successful retirees look at all of these considerations as they make decisions. The decisions you make now can have a major impact on your retirement lifestyle. Use this pre-retirement checklist to help you begin to plan your retirement strategy. Outline of This Episode [2:27] Are you on the final stretch to retirement? [6:33] How will you spend your time in retirement? [7:37] How much income will you need? [11:35] What is your net worth? [14:24] What is your investment strategy? [20:11] What kind of insurance do you have? [23:45] Do an estate review Resources & People Mentioned BOOK - The New Retire-Mentality by Mitch Anthony BOOK - Your Retirement Quest by Alan Spector and Keith Lawrence Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play  

Sep 2019

27 min

Are you looking for money and/or time-saving tips now that the summer is over and the kids are back to school? Summer can always feel expensive with summer camps, vacations, and then back to school shopping. With fall approaching and the kids back in school, we put together a list of ways you can save time and money to make this year better than the rest. Time-saving tips Look at how you spend your time at home and see what you can contract out. Can you hire someone to clean or cut the yard? The more you can hire out the more quality time you’ll have with your family. Back to school means back to fundraising. If you have a volunteer requirement at your kids’ school get the volunteer hours in early. You could also see if the grandparents would be willing to volunteer. It’s a great way for them to get involved in their grandkids' lives. You can also check if you can donate goods rather than time.  Online grocery shopping saves lots of time. Oftentimes online shopping will save you money as well since there is less impulse buying. Another bonus is your kids won’t be asking for sugary snacks. Have you tried online shopping? Try meal planning. Some people use traditional meal planning using pen and paper, but you can also utilize services like Clean Eats or Donavon's Dish. These services will save plenty of time while still managing to feed the family a healthy meal. Have you tried using a meal planning service or a subscription service? Get the kids to help. Kids can pitch in from a young age. They can help set the table, make a salad, sweep up or wash the dishes. You may get pushback at the beginning, but after making dinner chores a regular habit they will feel proud of their hard work.  Skip the carpool line. The morning and afternoon carpool line can suck up to an hour out of your day! You can utilize before or after school programs to help you get more out of your time at work. Another idea is to have local grandparents help pick the kids up after school.  Strategically work from home. You can skip additional time in the car by occasionally working from home. This may not work out for the whole day. But you could come home after lunch and work before having to go pick up the kids for their after school activities.  Money-saving tips Think about the holidays now. Consider how much you want to spend and create a budget. Do you want to travel? Plan out the travel in advance so that you know what you are going to spend. You can use an Amazon Wishlist to help you plan the gift-giving. Make sure to start saving for the holidays now. Reassess your monthly expenses. Fall is a great time to think about your expenses. If you have any decrease in your monthly expenses you can think about increasing your savings. Up your 401K contributions or max out your Roth. It always helps to have an automatic draft to savings. Focus on putting more toward long-term goals rather than short-term.  What do you do to save time and money at home? Have you started any new routines this school year? What is working for you? Let us know your money and time-saving tricks. Send us an email at aberger@financialsymmetry.com or csmith@financialsymmetry.com. Outline of This Episode [2:47] Look at how you spend your time at home [4:08] Back to school means back to fundraising [7:37] Meal planning [11:38] Skip the carpool line [13:02] Strategically work from home [15:15] Think about the holidays now [16:27] Reassess your monthly expenses Connect with Allison Berger Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook DISCLAIMER: This podcast is property of Financial Symmetry Inc. The hosts and guests of the show do not render or offer to render personalized investment or tax advice through this podcast. This production is for informational purposes only and does not constitute financial, tax, investment, or legal advice. Listeners should consult with appropriate advisors for advice specific to your situation.  

Sep 2019

22 min

How do you make financial decisions? Are you intentional with your money? Short Youtube recap here: https://youtu.be/9g3s36KPm9E Most people have trouble articulating their framework for making financial decisions. It begins with finding a healthy balance between spending and saving. After these short-term decisions, examining your longer-term goals will have more meaning. So in this episode, we asked Cameron Hendricks to join us to help you understand how to create an intentional framework to make the right financial decisions for you and your family.  There are only 5 ways to use your money in the short-term When planning to use your money, you need to consider what your options are and whether you are facing short-term or long-term decisions. Many people will be surprised to discover that there are only 5 ways to use your money in the short-term.  Lifestyle Give it away Pay taxes  Pay debt Save Each one of these short-term ways to use money impacts the other. Think about your spending as a pie chart. If your lifestyle expenses increase then one of the other options has to decrease. If you increase your savings then another option has to give.  You can start your planning by considering your long-term goals Making intentional decisions means your short-term decisions should be driven by your long-term goals. It’s a good idea to start with long-term planning and work your way back to your short-term goals. There are 6 items to think of working towards from a long-term perspective.  Financial independence - are you looking to retire or leave your job with its security? Charitable giving - this is more than just short-term charitable giving. You will need to have a process to achieve a higher goal. Freedom from debt - how much do you pay toward your debt? Pay down your miscellaneous debt first before tackling the mortgage. Lifestyle desires - this could include a second home or a boat Family needs - Many people want to save for their children’s college but also feel the need to help their elder parents. Starting a business - This takes planning and capital. Find ways to simplify your financial decisions Many people think that financial planning has to be complicated. But actually the more simple you can make your planning the better. Complexity gives a comforting impression of control while simplicity is hard to distinguish from cluelessness. You may seem like you are missing out on things when you plan simply, but it’s really about understanding the flow of money. Understand how your cash flow looks now and how it will impact the long-term financial decisions. You know there will be trouble ahead if you haven’t planned for the long-term.  Create a financial framework to plan your financial decisions Financial decisions can seem daunting but if you have an intentional decision framework to help you walk through your financial choices then your choices will be more clear. We all have the temptation to spend, especially if we get a lump-sum payment or a bonus from work. But we need to find a way to balance our short-term satisfaction with delayed gratification. When you layout your long-term financial plans you can then start planning how to spend your money in the short-term.  Outline of This Episode [2:27] What are your options? [5:44] Find ways to automate [10:40] There are 6 items to think of from a long-term perspective [14:35] What should you do with a large one-time increase in income? Resources & People Mentioned BOOK - Happy Money by Elizabeth Dunn Connect with Cameron Hendricks Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play  

Aug 2019

26 min

The Mega Backdoor Roth IRA could be the secret weapon you have yet to use in your retirement saving strategy. If you consider yourself a super saver, looking for alternative ways to save tax efficiently, this could be a great option. This strategy is of most interest to those maxing out all other tax-efficient savings accounts. Including standard employee 401k contributions, Roth IRA, 529, and HSA. In this episode, you'll see why we call this the secret weapon for super savers, as we breakdown who the Mega Backdoor Roth is for, why you might be interested in it, and how it compares to other IRAs. Who should take advantage of the Mega Backdoor Roth IRA? In order to take advantage of the Mega Backdoor Roth IRA, you first have to have access to a 401k that allows after-tax contributions. These are contributions on top of your regular $19k allowable contributions to a 401k in 2019. Hence the "Mega" moniker. So if you are already maxing out your 401K, Roth IRA, 529, and HSA contributions then the Mega Backdoor Roth IRA could be a great extra additional savings opportunity. Many get confused as to why it's called a Mega Backdoor Roth IRA when we are talking about your 401k. Good question. The name derives from where the money will be after you complete the consolidation process. You're now seeing more larger companies and solo 401ks allow for "in-service" distributions. Meaning, you could withdraw portions of your 401k savings, while still employed. The real benefit with this savings strategy, is when you can save the extra after-tax contributions and then roll them to a Roth IRA in the same year. Meaning, you could get a larger amount in to a tax-free savings account to grow for years to come. What’s so great about the Mega Backdoor Roth? If done correctly, the Mega Backdoor Roth can allow you to contribute up to 6X what you can contribute to a regular Roth IRA. With a regular Roth IRA, you can contribute only $6,000 per year in 2019. The Mega Backdoor Roth allows you to contribute up to $37,000 extra each year on top of your normal employee 401k contributions. Many people don’t know this, but the limit for 401K contributions is $56,000 or $62,000 and for those over 50. Many people assume that the limit is only $19,000. But this $19,000 limit is for pretax contributions. You can actually contribute up to $37,000 more after taxes are withheld (depending on your employer match amount). You can ask your employer if they contribute to after-tax contributions. If you aren’t sure then you should contact your HR department. They may not even know about the Mega Backdoor Roth, but if you communicate with them you could get it started in your company. What is the difference between the Mega Backdoor Roth and the regular backdoor Roth? If your income for a married couple is over $203,000 then you are ineligible to contribute to a typical Roth IRA. Instead, you can implement the Backdoor Roth IRA strategy. But this strategy has multiple steps to assure it's done correctly which we wrote about in a previous post. To be a good candidate for this strategy, you need to first move existing pretax accounts to an existing 401K, if you have one. The next step is to contribute $6000 to a regular non-deductible IRA. After completing this, you can convert the non-deductible IRA to a Roth IRA. The issue with the Backdoor Roth is that you can only contribute $6,000 per year. The Mega Backdoor Roth allows you to contribute much more and would be a provision of your 401k account. Essentially, is the amount above your normal employee contributions ($19k in 2019; or $25k if over age 50) plus your employer match contributions. It’s important to consider all of your options to see if the Mega Backdoor Roth is right for your circumstances. Outline of This Episode [2:27] Who is the Mega Backdoor Roth for? [4:31] What is the difference between the Mega Backdoor Roth and the regular backdoor Roth? [12:33] How do you know if you can take advantage of the Mega Backdoor Roth? [17:59] What are the risks? Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Aug 2019

25 min

How do you pick the books you read? Do you get book recommendations from friends or are you in a book group? Do you use an Amazon Wishlist or social media to help you discover what you want to read next? In today’s episode, we have some book recommendations for you to consider. We try to bring you a variety of genres ranging from finance to self-help, to fiction. Check out our favorite books of the year and let us know which ones you have read or plan to read.  Digital Minimalism Digital Minimalism might be the book for you if you are addicted to your smartphone or tablet. If you feel the need to constantly check your notifications you might want to check this book out. The idea behind Digital Minimalism is to help reduce the time you spend attached to yan electronic device. It discusses the psychology surrounding our need to constantly check those notifications and offers tips to scale back your tech usage. If you enjoy this book you also might enjoy Cal Newport’s other book called Deep Work. Chop Wood Carry Water  Chop Wood Carry Water is a quick, 110-page read that offers life lessons that are learned by a kid who wants to become a samurai warrior (think Karate Kid). This book is about learning to appreciate the process behind the mundane work you have to do in life. The thesis is that if you can focus on doing the boring everyday work with excellence then you can make great things happen. The book encourages you to take each challenge you face not as a test but as an opportunity to learn and grow.  Redemption Redemption is a work of fiction by David Baldacci which is a mystery-thriller. The main character is a Baldacci favorite, Amos Decker. Redemption makes for an exciting beach or vacation read. Like binge-watching a tv series, you’ll want to rush through it quickly to discover how it ends.  Principles The book Principles is another self-help book written by Ray Dalio. It is essentially laying out his 5 step process for building success. He encourages readers on how to deal with setbacks and continue to move forward. These are the 5 steps that he covers in the book: Step 1 - instead of feeling frustrated and overwhelmed see pain as nature’s reminder that there is something important to learn.  Step 2 - potential problems are actually potential improvements Step 3 - diagnose problems to get to their root cause Step 4 - design a plan Step 5 - push through to completion Books we haven’t read yet but plan to We also have several books on our wishlist or that we plan to read soon. Mike is looking forward to reading Personal Financial Planning for Executives and Entrepreneurs to help him provide the best service possible for his clients. The Happiness Advantage is another book Mike would like to read that redefines success and happiness.  Chad is looking forward to reading Messy Marketplace which is about buying companies. He thinks this will help him serve his clients who are in the process of selling businesses. The Family Board Meeting is a book that encourages people to enjoy the experiences they have with their children. The Algebra of Happiness and 30 Lessons for Living are 2 more books that he’d like to read. Outline of This Episode [2:17] Digital Minimalism [6:05] Chop Wood Carry Water [10:54] Redemption [13:38] Principles [16:01] Books we plan to read Resources & People Mentioned BOOK - Digital Minimalism by Cal Newport BOOK - Deep Work by Cal Newport BOOK - Chop Wood Carry Water by Joshua Medcalf BOOK - Redemption by David Baldacci BOOK - Principles by Ray Dalio BOOK - Personal Financial Planning for Executives and Entrepreneurs by Michael J Nathanson BOOK - The Happiness Advantage by Shawn Achor BOOK - Messy Marketplace by Brent Beshore BOOK - The Family Board Meeting by Jim Sheils BOOK - The Algebra of Happiness by Scott Galloway BOOK - 30 Lessons for Living by Karl Pillemer Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jul 2019

23 min

Most people know little or nothing about sequence of returns risk. The subject doesn’t make for the most interesting topic for cocktail party discussions. Some refer to it as your biggest retirement risk. Reason being, sequence of returns risk can have a major impact on how long your hard-earned savings will last through retirement. This week's episode we dive in to examples of how you could be affected and steps you could use to fight against it. Dollar-weighted returns vs time-weighted returns Many people aren’t familiar with the difference between dollar-weighted returns and time-weighted returns. Dollar-weighted returns are the actual returns you get. The dollar-weighted return is a more accurate representation of your actual return. A time-weighted return impacts your cash flow. A time-weighted return assumes you don’t contribute or withdraw any money during a period of time. If you put a lot of money in the bottom of the stock market and pull the money out at the top of the stock market then you will have a better dollar rated return than a time-weighted return.  An example of sequence of returns risk Let’s consider a couple that is 60 years old with a million dollars who just retired. In the first example, they earn 8% each year over the next 30 years. They withdraw at 6% which leads them to the ideal scenario and after 30 years in which they end at zero dollars. Their money ran out just as they did. The second example takes the same couple but rather than earning 8% each year they had great returns of 25% for the first 2 years, then they averaged 8% and then the last 2 years they averaged 0%. This scenario left the couple with a million dollars at the end of 30 years. The last scenario has the couple experience a bad market the first few years then 8% returns and then a great market at the end. This scenario leads the couple to run out of money. Although all of these examples had the same average return the end results were completely different. The first few years have a big impact on your long term success.  Why did Chad and Mike end up with different balances at the end of their careers? Chad and Mike work for the same amount of years, they make the same pay and save the same amount each year. One of them begins their career before the other and they retire at different times. The last years before retirement Mike experienced poor returns. Chad had poor returns when he was just starting out. This is an example of a good sequence of returns for Chad and a bad sequence of returns for Mike. The difference ended up being a $300,000 difference between Chad and Mike’s final balance. When you are younger your balance isn’t that big so how the market performs doesn’t matter as much. When you are older it is important to your balance sheet that the market rate of returns are high. What strategies can you implement to protect yourself from the sequence of returns risk? Diversification is important. Think about a globally diversified portfolio. U.S. stocks, international stocks, large and small cap investments.  Consider your asset allocation. The time right before and right after you retire is not a time to take on a lot of stock risk. Adjust your spending based on portfolio performance. Adjust the amount of stock you own based on market valuations. If the market is expensive you should own less in stocks, if the market is cheap you can own more. Don’t get nervous and go to cash and bonds. Stocks are a good hedge against rising costs of inflation. Remember that people are living longer, you may need that money to stretch farther than you thought. Outline of This Episode [4:27] What constitutes good or bad returns? [8:56] The first few years have a big impact on your long term success [11:15] Why did Chad and Mike end up with different balances at the end of their careers? [14:23] What strategies can you implement to protect yourself from the sequence of returns risk? Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play  

Jul 2019

26 min

Often in social conversations, it’s not uncommon to hear us say, “That reminds me of a scene in the movie…” to emphasize a point. Movies have a powerful way of presenting memorable situations where real life decisions and money intersect. Given the financial lens we view the world through, these financial themes jump off the screen to us. So in today’s episode, we put on our movie critic hats and have some fun discussing lessons we’ve spotted in films that we all can learn from. Some are obvious but in others, you have to dig a bit deeper. Allison Berger joins us in this fun-filled episode to discover financial influences in the best and worst that Hollywood has to offer. Financial references from the best and worst Hollywood films Many times, the large financial outcomes in life are a result of a lot of little decisions along the way in emotionally-charged environments. The circumstances range from pressure-filled decisions amidst a tragedy to pre-conceived notions of long-held family belief systems around money. Some can seem more cliche, like always have a plan B or pay attention to the small print, but paying attention to the emotions that lead to these moments can provide the most intriguing insights. Other messages reinforce strong values that help position you for long-term success, like the benefit of hard work and having an open mind. Here’s a summary of the movies we discussed: Gone Girl – This is an intense 2014 thriller with loads of money themes. The movie begins during the 2008 financial crisis and the featured couple loses their jobs. A twisted and circuitous journey ensues from there. Money themes: This couple could benefit from better financial communication. Strangely, a financial advisor wasn’t around to help (wink, wink). Separately, she keeps all her money in a money belt after she goes on the run. This is a terrible idea! It’s no wonder her money gets stolen as you should never keep all of your money in one place, even when on the run. Finally, do your best to set yourself up so you are not forced to rely on someone else financially. Edge of Tomorrow – Tom Cruise stars in this 2014 Sci-Fi film. He plays a public relations guy thrown into the battle who gets stuck in a time loop. Financial lessons: You may not see a financial theme here but we can’t help but think about what we might do financially if we could do yesterday over again with the knowledge that we have today. There are so many uncertainties when dealing with investing which is why balance is so important. When you have a process to help you deal with all the options that are out there. We all have 20/20 hindsight but this movie can be a great thought exercise. What would you learn from today? Would you invest more? Spend differently? Or maybe create an automatic savings plan to make sure you’re saving? Crazy Rich Asians– This 2018 film is rich with money themes. It is basically set in a rich fantasyland in Singapore. Financial themes: Money alone will not make you happy, it’s the experiences money buys that can provide lasting happiness. Related, it’s dangerous to have your identity attached to money. Communicating openly with your partner about finances can prevent larger emotional disagreements along the line. Even further, the pressure of misplaced expectations around money can be problematic between spouses. This is why it’s important to choose your spouse wisely as research shows in The Next Millionaire Next Door. Miracle – This is a family-friendly 2004 Disney movie. Miracle is the story of an Olympic hockey team before Olympians were allowed to be professionals in their fields. Money lessons: The movie shows the value of hard work without money attached. At the end of the film, it showed what each character’s career was after their hockey career. This movie holds powerful lessons to show kids not to rely on one thing, especially a sport, to provide income for the rest of their lives. Be sure and listen to the rest for the our takeaways from 3 other movies, including one in Allison’s favorite classic series of movies. Resources & People Mentioned Episode 84 Episode 80 Book – The Next Millionaire Next Door Connect with Allison Berger Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jul 2019

36 min

Nobody likes to talk about the 2 certainties of life: death and taxes. So much so that we delay important decisions on how to deal with our assets for our heirs. On this episode, Cameron Hendricks and Grayson Blazek join in to discuss specifics on how to handle accounts and property, filing taxes and how to better prepare for passing on your estate to your loved ones. Find out how to handle all of this now to save your loved ones added stress during a difficult time. Ensure that your loved ones are prepared to understand your financial life To ensure that others are prepared for your own passing, make sure that your loved ones understand your financial life as a whole. This will make your passing a much smoother process. It is important to ensure your will is readily available and is up to date. Another way to be prepared is to have your assets properly titled. It's also important to periodically check all of your accounts’ beneficiaries to ensure that you have the right beneficiaries named and that you don’t have too many. The more information that you provide up front will really help along the way. How to help your loved ones prepare for your passing Taxes can be confusing enough, but doing the taxes of for the deceased is even more challenging. This is why it is so important to ensure that your loved ones have all the information that they need to prepare your final tax return during this time. Before making someone an executor of your estate it is important to talk to them and give them all of the information that they may need. This will make sure that everything transitions as smoothly as possible. If you are the executor of the estate make sure that you know where all of these income sources are. The more information that you provide up front will really help along the way. How to prepare taxes for the deceased Preparing taxes for the deceased isn’t as complicated as you may think. A person that has passed is called the decedent. Whether you are the surviving spouse or the child of a parent that has recently passed someone will need to work through a couple of tax returns for the decedent. You will have to fill out the final 1040. It is similar to every other tax return that you have filled out. You can continue to file as married filing jointly if you don’t remarry within the year and you will include any income received. The second form you may encounter is the estate income tax return. The last tax form you may need is the gift tax return. Listen to this episode to hear Cameron Hendricks and Grayson Blazek provide their expertise on preparing taxes for the deceased. What are some common financial questions people ask about death? There is a myth that people think everything is going to be taxed upon death, but that is untrue. Life insurance is not taxed and 401K’s and IRA’s will not be taxed in the way you think. When passing wealth to your heirs think about whether they are ready to be heirs. You can set up a testamentary trust and create rules around the trust to prepare your heirs for receiving an inheritance. You want to make sure to have an estate plan. The default estate plan will certainly not be what you actually want. Remember, you won’t be around to clarify your wishes so make sure you clearly state your intentions. Outline of This Episode [2:47] Ensure that your loved ones are prepared to understand your financial life [7:17] What kind of income tax return will you need? [18:28] The estate income tax return [21:48] How to handle the 709 [26:58] What are the common questions people ask? Resources & People Mentioned Episode 57 Connect with Grayson Blazek Connect with Cameron Hendricks Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jun 2019

33 min

You may have seen more news stories mentioning Opportunity Zones of late, but there are still plenty of questions surrounding this part of the latest tax reform. Today we're discussing the ins and outs of investing in Opportunity Zones to help you understand how, in the right circumstances, they could help you save thousands on your taxes. We’ll discuss what opportunity zones are, why they were created, what the tax benefits are and how to spot the risks involved when investing in opportunity zones. What are opportunity zones under the new tax law? The new tax law was created to spur economic investment in low-income areas throughout the U.S. by providing individual investors with tax incentives for investing in impoverished communities. The low-income areas are called opportunity zones and are identified by governors of each state. Although it was rolled out in 2017 it wasn’t until recently that the IRS updated investors on how the program is actually going to work. This program is geared toward long-term private investors with a high net worth. There are 3 benefits to the tax side of this law: tax deferral, tax reduction, and tax elimination for an investment held for more than 10 years. The primary purpose of the reform is to help economically distressed communities and in turn, it can help you save thousands in taxes. Find out how by listening to this episode of Financial Symmetry. What are the benefits of the new tax reform law? Under the new tax reform law, you can defer capital gain tax from the sale of real estate, a business, or stock. You can also reduce your taxes on something you recently sold and even completely eliminate taxes by reinvesting. Here’s an example: You sell something and earn a million in capital gain. Normally you would pay $240,000 in taxes on that capital gain. Now with the opportunity zones if you reinvest your capital gains into a qualified opportunity zone fund within 180 days you get to defer the capital gain tax on the million dollar sale. So instead of paying those $240,000 in taxes in 2019, you won’t have to pay that until 2026. Then in 2026 if you continue to hold that investment in the opportunity zone then you only pay tax on $850,000 of the million dollar original capital gain. So you’ll save about $36,000 there. But the biggest benefit overall for the program is that if you put that money into a new investment for 10 years or more you’ll pay no capital gains tax on the original investment. What can you do to do to take advantage of the new tax reform? To invest in opportunity zones and save on capital gains taxes you can invest in a qualified opportunity fund. A qualified opportunity fund is a corporation or partnership that is created for the purpose of investing in qualified opportunity zone property and holds at least 90% of its assets in qualified opportunity zones. The typical investment options are real estate, such as multi-unit apartment buildings, or a business located in a qualified opportunity zone. You have to spend 100% of the purchase price in the first 30 months. So if you purchase a property for $800,000 then you have to spend another $800,000 within 30 months. The idea is that you are substantially improving the property for the amount that it is valued at. If you buy a business the same rules apply. You have to improve it somehow for that purchase amount. Remember, this is not an investment in the stock market, there is a higher degree of research involved. What are the different risks involved? There are different risks involved in taking advantage of the new tax reform law. As with all investing situations, attention to detail is key. Here are some of the risks with this type of investment. What happens if there is a political change? If Congress changes its course over the next few years they could overturn this law. You are invested in a limited partnership so you have to pay fees to the managers of the funds. They may charge 2% or you may pay a percentage of the profit. The fees involved may eliminate the tax benefits completely. The money isn’t liquid. You have to hold it in the investment for at least 10 years and you won’t receive the benefits if you pull out early. You’ll have to be an accredited investor. You must not only buy but improve the property. The 180-day rule may spur some people to rush into an investment rather than do their research into the options. Many people don’t take advantage of things because they don’t know about it. We’re here to give you ideas and strategies that you may not be aware of. The overall goal of the new tax law is a great cause but the investment options are still pretty new. This was just an overview of rules and regulations, so do your own research. Don’t let taxes decide your investment decisions. Remember a bad investment is still a bad investment no matter what the tax benefits are. Outline of This Episode [4:07] How should the tax strategy be implemented [9:19] What do you need to do to take advantage of the new tax reform? [12:03] There are 3 benefits to the tax side [13:45] What are the risks involved? [20:27] What are other alternatives for capital gains? Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jun 2019

26 min

Rolling over your 401K is a complicated process so we brought in a few experts that have helped our clients rollover hundreds of 401K’s. Understanding the unexpected roadblocks surrounding a 401K rollover is a vital step in making the best decisions with your money. So listen to this episode to hear steps of how to properly rollover a 401K quickly and efficiently. How to rollover a 401K? Maybe you just left a job or maybe you need an in-service rollover but you are at the point that you need to rollover your 401K. So how do you do it? Unfortunately, there isn’t only one way. It depends on the type of account you have and where you want the money to go. If you have a brokerage account linked to your 401K it will make the task a bit easier. Brokerage links give you the opportunity to invest in funds at a lower cost. If you have just quit or left your job you need to ensure that all of your contributions and your employer contributions have settled before you move your 401K or you will have to redo the process again once it does settle. How do you tackle the 401K rollover paperwork? 401K rollover paperwork can be quite daunting. Nowadays there are many forms that you can fill out online, but there are still actual papers that must be completed in person. The paperwork can be a bit confusing and overwhelming, but it is important to fill everything out correctly. Even if you mis-check just one box they won’t process your rollover and you’ll have to start the process all over again. Oftentimes you may need your spouse to sign, a notary to sign, and you’ll also need your plan administrator to sign. Sometimes finding the plan administrator can be tricky. If you know the right people to call the paperwork really doesn’t take much time. It can take a few days or even a few weeks to complete the paperwork. If you feel daunted by all the paperwork you might want to consider hiring a professional to help you out. What are some problems that can arise with a 401K rollover? It's important to reduce your risk of being out of the market. You want to ensure that your money is out of the market for as little time as possible. Pay careful attention to the timing and ensure that you have all your ducks in a row first. This means that you need to have the accounts where the money is going set up beforehand. If you have a brokerage link you can reduce the time out of the market. You’ll also want to double check where your allocations are in case you need to change those settings. There are many steps involved in moving your 401K and you may have to contact different service representatives to get all of your questions answered. How can you reduce your risk? Having your money pulled out of the market for any amount of time can be costly. If there is a way to expedite getting your check you’ll want to do it. Think about it, if you have your money out of the market and it goes up a few points you’ll be losing out trying to get it all back in. Getting the money back in as quickly as possible is important. Having a brokerage account linked to your 401K can give you the opportunity to invest in funds at a lower cost. Listen to the experts, Heather and Angela, to help you understand how to rollover a 401K to make your transition run as smoothly as possible. Outline of This Episode [1:27] How do I rollover my 401K is one of the most frequent questions [6:16] How do you tackle the paperwork? [7:24] How much time does it take? [11:03] What are some problems that can arise? [17:05] Where does the money go? [27:07] What can go wrong? Resources & People Mentioned Should I Make a Roth IRA Conversion? Connect with Heather Gudac and Angela Keeley-White Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

May 2019

35 min

What does your financial future look like? Do you feel it is secure and well planned out or are you just winging it? Winging it is a great idea for a Sunday afternoon drive or deciding to what to eat for dinner, but winging your financial future is a dangerous decision that will put your future stability at stake. Learn why people decide to wing it and what you should be doing instead, on this episode of the Financial Symmetry show. Short video recap here: https://www.youtube.com/watch?v=UCFFhFpRpVc What are the numbers and why are people winging their financial future? We love numbers on this show. They help to illustrate the point we are trying to make and sometimes they are truly shocking. 75% of Americans are winging it when it comes to their financial future Less than half of Americans cannot cover a $1000 emergency Most people feel they make about $1200 worth of financial mistakes per year 4 out of 10 Americans simply guess how much they will need to retire. Why do people do this to themselves? Why do they choose to leave their financial future up to chance? I think there are 3 main reasons. They don’t want to pay for professional advice. They can’t afford professional advice (or think they can’t afford it). They think they can handle the work themselves Are you letting overconfidence power your financial decision making? Are you overconfident about your ability to handle your finances? 57% of adults feel more confident today than they felt 3 years ago about their finances. Do you feel a bit overconfident due to the recent success of the financial markets? Overconfidence is a villain when it comes to good decision making. Usually the more intelligent you are the more overconfident you are. Mark Twain had a powerful quote that sums up overconfidence well, “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.” A great way to ensure that you aren’t being too overconfident in your financial decisions is to hire a financial advisor. Having an objective 3rd party view of things can really help you keep things in perspective. Is your confirmation bias affecting your financial future? The internet is starting to play a major role in creating greater confirmation bias. People tend to follow their own views and they will seek out news that confirms what they already think about something. If someone has a negative worldview and they read an article about how the market will be crashing they will nod their heads and think, yes this is the truth. To combat confirmation bias think of the acronym WRAP from the book Decisive by Chip and Dan Heath. Widen your options Reality test your assumptions Attain distance before deciding Prepare to be wrong Recency bias can affect your thinking about the future People think they know more than they do about how the future will unfold. More often than not, the future will surprise us. Our conclusions about the future are often based on our emotions. They can also be affected by recency bias. Recency bias is a bias based on the fact that people tend to think that what happened to them recently will happen to them in the future. This can be seen frequently with finances for instance, if you have received a big bonus, or especially when it comes to stocks. Are you allowing recency bias to affect your financial future? Outline of This Episode [5:27] Overconfidence can spoil your financial decisions [11:15] Are you allowing confirmation bias to affect your financial future? [13:46] Recency bias affects many financial decisions Resources & People Mentioned BOOK - Decisive by Chip and Dan Heath BOOK - The Little Book of Behavioral Investing by James Montier The Role of Confidence article Most People are Winging It article from CNBC Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

May 2019

20 min

Financial advice has long been a male dominated industry.  Women represent 51% of the US population, but only 23% of CFP® professionals are women and this percentage has stagnated over the past decade.  Why is there a feminine famine in financial planning?  Today we’ve invited Allison Berger and Grace Kvantas back on the show to discuss the 6 main challenges that prevent women from becoming financial advisors. As we shed light on these topics, we share ways we are fighting against these stigmas.  We also celebrate Grace as the latest partner of Financial Symmetry. Listen to this episode to hear why there aren’t many women in financial planning but also why that should change. See show notes here: https://wp.me/p6NrVS-3ar Why did Grace become a financial advisor? Grace is a rarity among women in the field.  She knew that she wanted to become a financial advisor at the age of 15.  Her dad was a CFP® and it was at that young age that she realized that she was taught money lessons at home that many others never received.  She wanted to help others learn what her dad had taught her. In college, she learned so much more about finance, but she still didn’t understand the depth of what one learns as a CFP®.  It was only on the job that she began to understand all that a financial advisor really does.  Listen to this episode to hear about Grace’s journey to becoming a CFP®. What does it take to become a CFP®? Many people don’t know the difference between a financial advisor and a CFP®.  The CFP® designation is the standard of excellence in financial planning.  Becoming a CFP® takes a bit of work. You must have a bachelor’s degree and take the coursework first prior to taking the CFP exam. Candidates also need to have 3 years of qualifying experience or 2 years working directly with CFP professionals. After obtaining the CFP designation, Certified Financial Planners must maintain continuing education. Why is financial planning a great field for women? Now is a fantastic time to become a financial advisor. The average age of financial planners is over 50 and ⅓ of advisors are projected to retire within the next 10 years.  Women are uniquely positioned to excel as financial advisors in the years ahead.  Listen to this episode to hear why 72% of women who pursue the CFP® designation report high levels of career satisfaction. Why aren’t more women in financial planning? We walk through the CFP Board whitepaper detailing recommendations to increase the number of women CFP® professionals and the reasons women are not pursuing this career path. You can’t be what you can’t see.  Financial planning is not top of mind as a career path for many women. Grace and Allison discuss their efforts to increase awareness and encourage others to consider financial planning. There are misperceptions about the work.  Most think that this career path is very math heavy. Make no mistake, the CFP® exam and coursework require math skills and you will use math every day in this field.  However, math is only one tool in the process toward helping clients reach their goals.  Successful financial advisors also require the ability to build relationships and counsel clients as life changes. Women’s own behaviors may be holding them back. This phenomenon was detailed in Sheryl Sandberg’s book “Lean In,” which we discussed in Episode 73.  Women may not feel as comfortable taking the career risk this industry may require.  This is a multi-faceted issue but learning more about the inner workings of the career can help break down these barriers. Gender discrimination and bias exist in the field.  Unfortunately, there are still biases and many women don’t feel welcome in the industry.  Both Allison and Grace are sometimes asked if they are someone’s wife or secretary.  The good old boys’ network is still alive and well in financial planning, but this is changing, and it is easier than ever to connect with other women on this journey. Work/Life Balance is not an issue.  When asked to respond to the statement, “Financial planning offers good work/life balance,” only nine percent of Men and 10 percent of women disagreed.  Contrary to popular belief, work-life balance is no longer a predominantly women’s issue. There are not enough female role models. Grace and Allison are working to change that.  Listen to this episode to find out where to turn for helpful advice and encouragement. Resources & People Mentioned WIN CFP - The CFP Board’s women’s initiative Connect with Grace Kvantas and Allison Berger Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Apr 2019

30 min

You've just sold your business. Or maybe you received an inheritance. Making decisions on how to handle the lump sum proceeds can be paralyzing. We all have that fear of making a mistake with the money and when the stakes are high, the fear is heightened. You might be wondering how wise it is to invest a big chunk of money with the markets near all time highs. When dealing with a lump sum, there is more to consider than just investment decisions. Listen to this episode to hear about the things you may not have thought about when considering your lump sum investment options. You have 3 options when you come into a large sum of money You may have received an inheritance, sold a business, or received stock options or restricted stock. However you received the money, there are really only three things you can do with it. You can spend it, pay down debt, or invest it. In fact, spending a portion of your newfound wealth to treat yourself is a good first step. Then take a step back and analyze your new financial picture. How have your goals changed? Is retirement now just around the corner? How will you need to invest to accomplish your new objectives? Many people are quick to want to pay off all debt. But first analyze the kind of debt you have before rushing to pay it all off. Paying off credit card debt is generally a good idea, but you might want to rethink paying off your mortgage. Before you make any decisions on what to do with the money you should take some time and consider all of your options carefully. Analyze the tax implications When receiving a lump sum of money, it is important to estimate the tax burden that comes with it. You don’t want to spend all of the money and then discover that you owe a large amount in taxes. No one likes to pay penalties so it is important to do some tax planning first. Take a comprehensive view of your tax strategies with a professional to help you consider all the options. There are many strategies you can consider to help ease the tax burden. A donor-advised fund is a great choice for the charitably inclined. Are their retirement accounts (SEP-IRA, 401k, Roth IRA, HSA's)  you haven't been maxing prior to the lump sum? Could front-loading a 529 account be right for you? What's your plan for health insurance and how will the premium tax credit affect you? You also want to consider the timing to ensure that your strategies are used in the same calendar year that you receive the lump sum. What are some lump sum investment options? We would all love to have a crystal ball to tell us the perfect time and place to invest our money. Instead, we ask questions like, should you invest it all at once? Should you invest in small increments over time? Or do what too many people do, and don’t do anything. Vanguard had an article which analyzed these lump sum investment options from a historical perspective. It turned out that about two-thirds of the time it was better to invest all at once. But, if you were prone to sell if experiencing a big loss in first few months, then investing over the next year may be best. Bottom line was that if you wait too long, you could end up regretting it. We all have that fear of making a mistake, but that fear of missing out in a rising market compounds the difficulty of long-term decision making. Understand that your decisions won’t be perfect but at the end of the day, it's all about the big picture. Think about your investment strategy. What assets make the most sense for your goals? Implementing a customized strategy for your specific desires will give you the comfort of being able to sleep at night, knowing you have a plan in place. Outline of This Episode [3:27] What are your options if you come into a large sum of money? [7:53] Analyze the tax implications [10:55] How to invest the lump sum [16:08] Update your estate documents [20:05] What is your cash flow? Resources & People Mentioned Episode 24 Episode 59 - Tax Solutions for Charitable Giving Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Apr 2019

26 min

Have you checked out the new federal tax forms? You probably don’t want to wait until the last minute to prepare your taxes this year. With the new tax code here you’ll want to give yourself plenty of time to get familiar with the new federal tax forms. But before you get started you need to arm yourself with as much information as you can about the new tax code. That’s why today we brought our very own tax extraordinaire, Grayson Blazek to share his extensive knowledge of the new federal tax forms. Listen to this episode as Grayson helps us understand what the new tax forms look like, what’s changed, how to save and be more efficient on taxes, and what planning opportunities there are to prepare for next year. What’s different on the new federal tax forms? Well, that time of year is here again, everyone’s favorite season: tax season! You may have heard that there are many new changes this year to the 1040. The idea behind the new federal tax form is to simplify the tax filing process. The new 1040 is touted as a postcard, while not exactly postcard sized, it is down from 79 lines to 23. Although there are only 23 lines on the new tax form there are several addendums which utilize a building block approach. There might be a touch of confusion for the first few years, but the new tax forms should be pretty easy to get used to. Listen as Grayson explains the new federal tax forms and takes us on a tour of the new 1040. Here is the lowdown on the new schedules 1-6 Schedule 1 is similar to lines 10-36 of the old 1040. It is used to report extra income items like rental income and real estate and other above the line deductions. Schedule 2 generally covers the old lines 45-47. It is used for the alternative minimum tax. You may not even see this one since most people won’t come across it. Schedule 3 replaces lines 48-55 on the previous tax form. Schedule 3 covers child tax credits and dependent care credits. Schedule 4 is a replacement for lines 57-63 and covers self-employment. Schedule 5 is used for estimated tax payments and amounts paid with extensions Schedule 6 is the 3rd party designee. Besides the new federal tax forms, what else has changed? Obviously, the changes in the tax code are not only in the format. There are several other changes made as well. They eliminated personal exemptions which were $4500 per taxpayer on the 2017 return as well as dependents. The child tax credit used to be $1000 per child but has been increased to $2000 per child. The income threshold has been increased. There has also been a substantial change to standard and itemized deductions. And it is estimated that the number of people that will itemize their deductions will lower from 20% to 5%. Although there are fewer deductions your overall tax burden may be similar. Listen to this episode to hear what else has changed with the new tax code. What are the planning opportunities? When preparing your taxes each year you have the opportunity to reflect on what you could have done to decrease your overall tax burden and what you can do in the future to ease your tax burden. Consider whether you should be taking advantage of your retirement savings accounts or health savings accounts. You can also think about your deductions and how efficiently you can space your charitable deductions. Decide whether you could donate every other year to get past the new threshold for itemized deductions. A donor-advised fund is a great tool to use when planning for your taxes. There are many other planning opportunities to consider so listen in to discover how you can begin planning next year’s taxes. Outline of This Episode [1:47] A tour of the new 1040 [7:01] Besides the form what else has changed? [9:31] Changes to the schedule A were the main overhaul [14:26] How has the overall tax rate changed? [18:17] What are the planning opportunities? [27:20] What has changed with the qualified business income deduction? Connect with Grayson Blazek Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Mar 2019

31 min

It wasn't that long ago that the most popular television show in America was named "Who wants to be a Millionaire?" Before that, in the 1980s, we were enamored with "Lifestyles of the Rich and Famous." There's something about the idea of becoming a Millionaire that fascinates us. But what is it about the wealthy that sets them apart from the rest of the population? How are their choices different from the average investor? If you've ever read Thomas J. Stanley’s The Millionaire Next Door, you might have a bit of an idea. We recently read The Next Millionaire Next Door by Dr. Stanley's daughter, Dr. Sarah Stanley Fallow, to learn about new insights into the minds of the next generation of millionaires. If you're curious about the strategies, discipline, and characteristics of millionaires and how they may have changed over the past 20 years, you'll want to listen to this episode. See the full show notes here: https://wp.me/p6NrVS-39r What does today’s millionaire look like? It may be surprising to find out that wealthy people are just like you and me. Most millionaires that were surveyed drive practical cars like Toyotas, Hondas, and Fords that are about 3 years old. Remember millionaire is a term that describes wealth, not income. Your income is what you have today, and wealth is what you have tomorrow. In the U.S. in 2018 there were 11 million households with a net wealth greater than a million dollars. The book separated the wealthy into 3 groups, under accumulators of wealth (UAW’s), average accumulators of wealth (AAW’s), and prodigious accumulators of wealth (PAW’s). What Are the Most Common Characteristics of the Wealthy? There are 5 important characteristics of the wealthy. Wealthy people are well-disciplined. Millionaires are resilient and can persevere. Rich people are honest with others. Millionaires understand how to get along with others and work well with others. 90% surveyed were married and had a supportive spouse. (Divorce decreases wealth by 70%!) Do you have these characteristics of rich people? What are some success factors that lead to wealth? There were many interesting findings of the characteristics of millionaires in the book. Not surprisingly, education was critical to the success of most millionaires. 93% of those surveyed had a college degree and 60% had a graduate degree. What may be surprising to some, is that attending a private school or even a top-rated school was not important. The ability to focus is a key factor in the success of the wealthy. Another important characteristic mentioned, is the ability to track spending. The vast majority understand where their money goes. These are the least important success factors of the wealthy. Attending private school Attending a top-rated college Graduating at the top of the class Undertaking an internship in college How do millionaires spend their time? It sounds like wealthy people spend their time just as carefully as they spend their money. Wealthy people work more than the average American. They work about 38 hours a week on average, whereas the rest of Americans average 32 hours a week. Millionaires read more too. Books build a framework of knowledge for you to look back upon and analyze. Wealthy spend much less time on social media than the average Joe. They average only 2 hours a week and other Americans average 14 hours a week. Rich people also exercise more and spend more time caring for their family. How do you compare to the millionaires around you? Outline of This Episode [6:07] What are the different groups of millionaires? [6:29]What are some characteristics of the wealthy? [14:08] What are some success factors that lead to wealth? [18:52] How do millionaires spend their time? [22:06] Where is rich people's money invested? [26:08] What is Chad’s takeaway from the book? Resources & People Mentioned BOOK -The Next Millionaire Next Door by Thomas J. Stanley BOOK - The Millionaire Next Door by Thomas J. Stanley BOOK - Deep Work by Cal Newport Article - Lessons from the Millionaire Next Door Article - Top 5 Millionaire Investing Mistakes Episode 79 Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Mar 2019

30 min

Money and relationships don’t always go hand in hand. Making you wonder if you and your partner are speaking the same financial language. If money is causing stress in your relationship, you are not alone. 31% of couples say that the biggest cause of stress in their relationship is money. We want to help you communicate better with your partner about money. On this episode, Allison Berger joins us to discuss four common financial disagreements in couples. Listen in to learn how to better your relationship with your partner and with money. You spent how much on that? Does one person in your relationship spend more than the other? Oftentimes one partner feels that the other spends too much. This is so common since opposites attract in relationships. Our partners help to balance us out. So what can you do if you feel that your partner spends too much? Communication is key. It is important to be on the same team and make sure that you have the same financial goals. You can create a financial plan to keep you in check and keep you both on the same page. This way you can see if you are meeting your financial goals. Having a financial advisor can also be a great way to get a 3rd party’s view on the situation. The advisor can help take an objective opinion when there are arguments about spending that arise. Saving and investing takes coordination One spouse generally enjoys security more than the other and the other prefers to spend more money. When you have a financial plan in place, you can coordinate how best to save and invest for your specific objectives. Paying yourself first is a great first step. Automating your savings makes life so much easier. One way to easily increase your savings is by doing so when your income goes up. You can simply increase your 401K contribution whenever you get a raise. Another way to save more is to look for opportunities to increase your savings. If you pay off a car you can use the money you used to pay each month for savings instead. Deciding on how much risk to take with Investments The most common question we hear centers around people wondering if they will have enough? To best answer this question, the amount of risk in your strategy will play a tremendous role. Everyone has a different risk tolerance when it comes to investing. Sometimes one partner prefers to take risky investments and the other prefers to play it safe. Once again communication is key to understanding how your partner feels about investing. First, you should think about what your financial goals are as a couple. Open communication and education can help you understand each other’s feelings about risk tolerance. Learning about investments can also help you feel more comfortable about investing. Differing philosophies on debt Debt can be an unnerving issue for some causing some to lose sleep at night. Understanding your feelings on debt as well as your partner’s feelings can help defuse arguments before they even pop up. People have different feelings about money based on past experiences. Often our concerns about money manifest in childhood. Learning both why you and your partner feel the way you do about money can help you better communicate your needs and come up with a financial plan that you can both agree upon. Outline of This Episode [1:27] The biggest cause of arguments in relationships is money [3:22] What are the biggest disagreements with couples related to money? [6:12] Does one person in the relationship think the other is too spendy? [12:14] How much to save and invest and how much to spend? [17:33] What is the best practice on the difference in risk in investment strategy? [21:18] There can be a lot of emotions around debt Resources & People Mentioned VIDEO - Finding Confidence in Conflict - TED Talk BOOK - The Next Millionaire Next Door by Thomas J. Stanley BOOK - The Five Love Languages by Gary Chapman Article - Can Finance and Romance Go Hand in Hand? Article - Navigating the Financial Side of a Relationship - NY Times Article - Millions of Couples Keep This a Secret - Marketwatch Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Feb 2019

28 min

Our listeners and clients often ask: Is now a good time to invest? Or what should I invest in? We give feedback on both these questions in our 2019 Investment Outlook episode. Be sure to check out the show notes for this episode in particular as we provide detailed charts to help demonstrate our discussion. If you are curious as to whether now is the time to jump into the stock market, what role bonds play in your portfolio, or what the experts say about the future of the markets then you'll want to listen to this episode. 2008 Review After logging strong returns in 2017, global equity markets delivered negative returns in US dollar terms in 2018.  Common news stories in 2018 included reports on global economic growth, corporate earnings, record low unemployment in the US, the implementation of Brexit, US trade wars, and a flattening US Treasury yield curve.  Many are still wondering why should we invest overseas given returns in the US have been so strong?  Investors should remember that non-US stocks help provide valuable diversification benefits, and that recent performance is not a reliable indicator of future returns.  It is worth noting that if we look at the past 20 years going back to 1999, US equity markets have only outperformed in 10 of those years—the same expected by chance. We can examine the potential opportunity cost associated with failing to diversify globally by reflecting on the period in global markets from 2000­-2009, commonly known as the “lost decade” among US investors. While the S&P 500 recorded its worst ever 10-year cumulative total return of –9.1%, the MSCI World ex USA Index returned 17.5%, and the MSCI Emerging Markets Index returned 154.3%. In periods such as this, investors were rewarded for holding a globally diversified portfolio. Stocks Are there risks today to invest in the stock market?  Yes.  Have their been risks in the past?  Yes.  Through all these risks the global stock market has gone from $1 to $59 from 1970 to 2017 History has found certain periods have resulted in higher returns than others.  Part of this can be explained by starting valuation.  Valuation is one of the best indicators of long-term returns (i.e. 10 years), but it is a horrible short-term timing strategy.  One popular valuation metric we’ve discussed in the past is the cyclically-adjusted price-to-earnings (CAPE) ratio.  Instead of dividing price by the past 12 months of earnings, the CAPE ratio divides price by the average inflation-adjusted earnings of the past ten years.  The idea is to smooth out the good and bad years created by the business cycle. Is the CAPE Ratio a good predictor of future returns?  According to a study by Research Affiliates titled CAPE Fear:  Why CAPE Naysayers are Wrong, starting CAPE Ratio has between a 48% to 91% correlation to future 10-year returns across 12 countries.  So yes, starting valuations do matter over the subsequent 10-year period. In addition, below Exhibit 4 is the average future 10-year real return based on starting US CAPE Ratio. As of December 31, 2018, below are the current CAPE ratios of the major equity markets: US Stock Market = 29 MSCI EAFE (int’l developed) = 15.5 MSCI Emerging = 12.5 Source:  https://interactive.researchaffiliates.com/asset-allocation#!/?currency=USD&expanded=tertiary&group=core&model=ER&models=ER&scale=LINEAR&terms=REAL&tertiary=shiller-pe-cape-ratio-box&type=Equities As noted in our recent blog, Crystal Balls and CAPE, when one market (US or foreign) was trading at a material premium (such as today), the other market stock market outperformed over the subsequent 10-year period. What is the purpose of bonds in your portfolio? Our belief is that high quality bonds in your portfolio provide the following benefits: Balance – diversification from equities Safety – capital preservation Income – interest payments Bond returns are largely driven by the term and credit quality of a bond.  Long-term bonds experience bigger price movements for a given change in interest rates.  Investor are expected to be compensated for taking that extra risk as a result.  The same can be said for lower credit quality bonds such as high yield bonds.  As the current time the spreads – the gap between the yield on credit and Treasuries – have remained narrow by historical standards.  For bond investors, that means the compensation for taking on credit risk is relatively low, and the upside from here could be quite limited. Future returns of bonds are highly correlated to the starting yield. Therefore, as of 12/31/2018 the yield on the Barclays U.S. Aggregate Index was approximately 3.28% which is depicted in the exhibit below.  Therefore, over the next 7-10 years investors can expect returns similar to starting yield levels. Overall, bond yields have increased over the last couple years, but remain low compared to historical levels. How about Cash? The Federal Reserve raised rates four times in 2018 and nine total adjustments over the past four years.  The benchmark interest rate is in a range of 2.25% to 2.5%.  The benefit of this is many investors have seen higher returns from their bank accounts but borrowing costs have also increased.  What will the Federal Reserve do next?  I have no idea, but below are the current market/Fed expectations as of December 31, 2018.  You’ll notice the Federal Reserve and market is not expecting material rate increases from this point forward. Summary  To summarize, with low returns expected for US stocks and bonds many investors allocated primarily to US stocks will be disappointed with returns over the next ten years.  As a result, individuals may need to either work longer or spend less than expected to reach their financial goals. For current savers a market decline should be viewed positively as it allows them to buy stocks at cheaper prices.  For existing or soon-to-be-retirees it is important to understand your risk capacity and risk tolerance and adjust your asset allocation accordingly.  You’ll need equity for long-term growth, but it is important to have high-quality bonds for current spending. What can you do about potential lower returns?  First, focus on what you can control (spending, taxes, estate planning, etc.) and your long-term financial plan.  If you don’t have a financial plan in place, it’s the perfect time to contact a fee-only financial planner such as Financial Symmetry.  Second, implement a long-term, disciplined investment strategy.  And no, buying the mutual fund/ETF/stock that has done the best over the last three years is not a strategy.  If you don’t have a disciplined strategy or want to learn more about our process click here to download our white paper. Outline of This Episode [1:37] Is now a good time to invest in the stock market? [4:41] How do you evaluate when the best time to invest is? [12:22] What is the purpose of bonds in your portfolio? [16:53] What is the role of cash in a portfolio? [18:20] What do the experts say? [20:35] How do you prepare for lower returns? Resources & People Mentioned Episode 24 Blog Post - Crystal Balls and CAPE Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Feb 2019

24 min

What are the habits of successful investors? You may think that there are big differences between successful and unsuccessful investors. In the book Atomic Habits, by James Clear, he identifies the small habits that lead to success in life, these habits apply to investors just like anyone else. We all have intentions of doing the right thing, but there is a big gap between intention and action. Only about half of our intentions turn into actions. Join us on this episode to find out what sets successful investors apart from the rest of us. See the Full Show Notes Here:  https://www.financialsymmetry.com/6-habits-of-successful-investors-ep-77/ Small Habits Make a Lifetime of Difference Successful investors bridge the knowledge and action gap. They understand delayed gratification. Successful investors realize that small changes compound over time. The difference between success and failure is that the cost of good habits is in the present and the cost of bad ones is in the future. If you can delay your gratification to the future it will benefit you greatly down the road. This is true for exercise, eating well, saving, and investing.Successful investors don’t let emotions derail their strategy. In fact, successful investors find a way to deal with the boredom when most people don’t because the greatest threat to success is not failure, but boredom. Successful investors minimize the valleys of disappointment. These are the times when you don’t feel like you’re going anywhere. It’s a hallmark of any compounding process: the most powerful outcomes are delayed. Most people know that delaying gratification is the wise approach and all of us want the benefits of good habits, but those benefits are seldom top-of-mind at the decisive moment. For successful investors, that’s not the case. Successful investors possess the ability to implement their intentions. When one says they are going to do something, it’s not a general idea. The successful investor creates a specific plan with an actionable timeframe. Successful investors know how to track their habits. We all know that life is a balancing act. It is hard enough to balance work and family life. If you throw in exercise and fun then investing can quickly take a backseat. Tracking your habits can allow you to recover quicker after a time of difficulty. A good investor can compare their investing with planting a tree. You don’t go out and check on your tree daily to look for growth. Simply set up a system for care and watch it grow over time. Successful investors practice self-control. Self-control can be challenging in times of uncertainty. Luckily there are plenty of ways to automate investing. Hiring a professional is another way to help you practice self-control. You don’t have to try and be an expert at everything, put your investments on autopilot or ask for help. Successful investors refine and reflect on their strategy. Small changes can greatly improve your success at investing. When you make small changes it makes you more aware of your mistakes and opens paths to improvement. Small improvements now can lead to major improvements in the future. Are you ready to implement these habits for success? Making small changes can really make the difference in your life. When you bridge the gap between your intentions and actions you begin to change your habits and start on a path to success. Implementing these strategies can help to make you a better investor and they can be applied to many other areas of your life as well. Listen to this episode of Financial Symmetry to hear how you can create successful habits as an investor and these can bleed over to other areas of your life. Outline of This Episode [1:27] Half of all intentions actually turn into action [5:45] Understand delayed gratification [7:18] Minimize the valleys of disappointment [11:00] Implement intentions [13:14] Habit tracking [15:20] Controlling your self-control [19:11] Refine and reflect [21:57] A recap of the 6 habits Resources & People Mentioned BOOK - Atomic Habits by James Clear BOOK - Essentialism by Greg McKeown Article - Stop Teaching, Start Coaching in Morningstar Magazine April 2018 Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Feb 2019

26 min

If asked, most people are hopeful they will have a happy retirement. They're just not sure they are taking all the necessary steps to get there. We all have those moments in our busy lives where we stop and ponder, am I doing what I need to enjoy retirement? But then our busyness continues and takes over any productive changes we considered. As financial advisors, we work with people in all phases of life and often chat with retirees that have walked this path. The happiest of them agree, there are 4 main areas that contribute to their happiness. If you want to prepare for a happy retirement then listen to this episode to hear 4 secrets to a happy retirement. Happy retirees take their health seriously The happiest retirees are able to move their bodies so that they can remain active. Physical exercise has the benefit of getting the endorphins going and creating joy. Staying active is an important part of maintaining a healthy lifestyle as you age. You can’t wait until you retire to become active or it will be too late. Part of creating a healthy body is by moving more now. Even though it can be a challenge to find the time to create a healthy exercise habit, this is an important part of ensuring that your body will work the way you want as you age. Are you doing what you can now to make sure your body will still function the way you want in your golden years? Happy retirees have enough money because they had a financial plan Happy retirees have enough money to retire with and are financially independent. Are you doing everything you can to ensure that you will have a comfortable retirement? What savings rates do you need to have to have a comfortable retirement? How do you know that your money won’t run out when you retire? There are so many questions about money and retirement. A financial advisor can help ease your concerns about finances in retirement. Having enough money means you will have less stress. A financial plan will help you make sure that you are saving enough. This may be obvious to some, but the fact is, only 35% of pre-retirees have a written financial plan. If you are unsure if you are saving enough now is the time to meet with a professional that can give you peace of mind. We recommend finding a fee-only financial planner to help you make sure you are doing all that you can to have the savings you need so that you won’t have to worry your way through retirement. A strong sense of purpose can ensure a happy retirement You need not only have a financial plan but a personal plan as well. If you have a strong sense of purpose that drives you this will help you to spend your retirement in a fulfilling way. Volunteering your time is a great way to further your knowledge and pass on your wisdom. Creating a life of purpose doesn’t just ensure that you aren’t sitting at home watching tv all day, it can result in leaving a legacy behind. What are your retirement plans? Are you planning to retire to something rather than away from something? Relationships are important to a happy retirement Happy retirees have friends. The happiest retirees interviewed have stated that they have a sufficient amount of friendships. Those with fewer friends are 3 times less likely to be happy. Are you developing friendships right now that will transcend the test of time? Creating friendships through common interests is a great way to ensure that you will have a number of friendships when you finally leave the work world behind. So how are you doing in these 4 areas? Do you feel like you are setting yourself up for a happy retirement? Outline of This Episode [2:17] Happy retirees take their health and wealth seriously [4:52] Happy retirees have enough money to retire on and are financially independent [9:22] Happy retirees have a strong sense of purpose [13:03] The importance of friendships Resources & People Mentioned BOOK - Your Retirement Quest by Alan Specter and Keith Lawrence Episode 22 - Don’t Fail in Retirement Episode 68 - Your Pre-Retirement Checklist Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jan 2019

21 min

2018 gave us a December to remember, with the S&P 500 index losing 9% for the month, locking in the worst December performance since 1931. From peak to the most recent bottom, the S&P 500 has fallen more than 20%, marking the first bear market since 2008-09. Now the bear market is here, are you prepared to deal with it? This most recent drop has given us all a scare. Does the drop have you worried?  Did you prepare for the bear market beforehand? Preparing for stock market drops prior to experiencing one, helps you digest results when it occurs. It doesn't change the fact that disciplined investing is difficult. And while you'll never be excited about stock market declines, you can be prepared.  On this episode, we clue you in on the tricks for surviving a bear market. You’ll learn what a bear market is, the questions people typically ask when the markets drop, how to prepare for a bear market, and how to recognize a bargain when you see one. The markets are always changing, are you ready for what’s ahead? Listen to this episode to help you weather the storms that bear markets bring. What do people ask when the markets drop? In long and strong bull markets, overconfidence is plentiful as positive returns inflate our perception of our investing skill-sets. But when the markets drop, we are quick to question our investment strategy. People ask themselves: Should I be doing something different? Should I be buying? Should I be selling? Should I buy cryptocurrency or gold? We feel the need to act when we see our nest egg evaporating. The biggest question people ask is: what do I need to do to preserve my money? If you feel like you need to sell and go to cash then you could be taking to much risk. Risk tolerance can be thrown out the window when things are going well. It’s when things go south, you learn your true risk tolerance levels. A poor decision in a bear market can often take years or even decades to recover from. Listen to this episode to help you learn how to make the right decisions in a bear market. What is a bear market? A bear market occurs when there’s a drop of 20% in a particular stock market. This differs from a recession which is declared after there are 2 consecutive quarters of negative GDP. Many people think there must be a recession to have a bear market, but not every bear market results in a recession. However, they do tend to work together. There’s about a 50/50 chance of having a bear market coincide with a recession. As painful, as bear markets can feel, they do happen much quicker than bull markets. The average length of your typical bear market is 1.4 years, contrasted with an average bull market at 4.5 years. How can you prepare for a bear market? Bear markets can be scary to watch and unfortunately, the news channels cover them constantly. People pay more attention to bear markets since they are sensationalized by the news media. The most important thing to remember is to follow your strategy. If you feel like you need to get out immediately and go to cash then you are likely taking too much risk. Unfortunately, we can’t follow our intellect and instinct when it comes to investing. Our instincts influence us to stop the bleeding and sell stocks to hold more cash. The problem with that strategy is big up days occur very close to big down days. So when volatility spikes, your time in the market matters than trying to time the market. How do you recognize a bargain? The silver lining of a bear market, is the buying opportunity they create. For many investors that are steadily saving in their investment accounts, bear markets present bargains for higher long-term returns. But how do you know the best time to invest more in stock? How do you ensure that you are not buying too early?  Studies show the best strategy is to invest a lump sum upon receiving, as your average long-term returns are higher with stocks vs. other alternatives. Our emotions tell a different story. Catching a falling knife is a risky game.  This is where personal circumstances matter most. What does your future income, spending and savings rates look like? When will you need your savings? Answering questions like these gives you a head start on the best choices for your life. Because “knowing” what will happen in the short-term is a fool’s game. Understanding the historical context can help, if it gives you the confidence to begin and stay invested through potential worsening conditions. Warren Buffet once said, “widespread fear is your friend as an investor because it serves up bargain purchases. Personal fear is your enemy and it will also be unwarranted.” Outline of This Episode [2:27] What do people ask when the markets drop? [5:48] What is a bear market in stocks? [10:22] How can you prepare for a bear market? [16:10] How do you recognize a bargain? [20:36] 5 Points to remember in a bear market Resources & People Mentioned Episode 71 – How to Ignore the Stock Market Noise Article – Burned by Bubbles Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Jan 2019

26 min

Welcome to Financial Symmetry, the podcast to help you discover financial opportunities that you may be missing as well as to warn you about many financial mistakes that you can make. We are here to help you improve your life through finances. Finances are so complicated which is why we are here to help you answer questions about your daily financial life. We are here to give helpful hints and education rather than financial advice. On this episode, we discuss our top 4 most popular podcasts of 2018. Listen to this episode to hear what our top 4 most popular podcasts were, as well as many of our favorite podcasts. Our most popular podcasts are quite diverse Our 4th most popular podcast aired relatively recently and we discussed why you should bother diversifying your portfolio with international stocks. On that episode, we highlighted why the U.S. has done so well and why you would want to have a mediocre portfolio by mixing it up with international stocks. We discussed the risks of investing internationally as well as our tendency toward home country bias. Episode 67 discussed the long-term benefits and how they can shine through our short-sighted viewpoints. Have you listened to the Why Bother Diversifying episode? What investment decision process should you implement? Episode 52 was the 3rd most popular podcast of 2018. The markets had just dropped when this one aired which makes everyone nervous. It’s important to remember that the markets frequently fluctuate. We often forget the rough times in the financial world which is why it is so important to have an investment plan. An investment plan isn’t there for the easy times when all is well, it’s there to help you through the hard times. That episode mentioned how to get through the emotional part of investing. We love to give you a glimpse behind the curtain so to speak so that you can see our own details and strategy that we use here at Financial Symmetry. Do you have a financial plan in place? 5 Easy ways to improve your financial decisions I’m glad this was the 2nd most popular episode in 2018. It discussed how we often act against our own best judgment. We tend to place more value in small rewards now rather than larger rewards in the future. This episode included easy steps that anyone can implement to improve their financial situation. We talked about small wins, automation, accountability, and how to have a bigger awareness of spending. Check out episode 60 to find out how to improve your financial decisions. The top episode took us by surprise We were surprised by the number one episode of 2018. Episode 61 was our most downloaded episode. This one aired in June and discussed how to plan a more enjoyable vacation. We love encouraging experiences over things. Experiences create lasting memories and things are easily forgotten. Check out episode 61 if you are planning your next vacation. Find out which episode didn’t make it into the final 4 as well as which podcasts we really enjoy listening to on this episode of Financial Symmetry. Outline of This Episode [3:27] What are our top 4 podcasts of 2018? [4:42] Why bother diversifying with international stocks [7:04] What investment decision process should you implement [10:25] 5 Easy ways to improve your financial decisions [15:20] Planning a more enjoyable summer vacation [17:58] What is the one that didn’t make it [19:28] Some other podcasts you might enjoy Resources & People Mentioned Episode 67 - Why Bother Diversifying Episode 52 - What Investment Decision Process Should You Implement? Episode 60 - 5 Easy Ways to Improve Your Financial Decisions Episode 61 - Planning a More Enjoyable Vacation Episode 62 - The Tumultuous Journey of Bitcoin and How Cryptocurrencies Work Psychology of Persuasion Podcast with Robert Cialdini Serial Podcast Planet Money Podcast Money for the Rest of Us Podcast - Why Health Insurance is a Mess No Laying Up Podcast (a golf podcast) What’s Good Podcast About the Beastie Boys Bill Simmons Podcast BOOK - Atomic Habits by James Clear BOOK - Happy Money by Elizabeth Dunn BOOK - Influence by Robert Cialdini Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook

Dec 2018

26 min

Working moms face a difficult balance. People often feel that most women have a choice whether to work outside the home, but the reality is, 65% of families need both parents to work. Women in the workforce is a family issue, not simply a women’s issue, so this episode is useful for more than just women. Allison and Grace join us again to dive into the topics of gender bias, women in the workforce, and they provide helpful strategies and resources to help anyone that is struggling with how to balance it all. Women face both internal and external gender bias Studies have found that as women achieve more success in the workplace they lose their likeability. This can make it a challenge for women who want to chase success. Even directly out of college women seem to start out behind men as they begin their careers. Only 7% of women negotiate their first salary whereas 57% of men do. Men are often rewarded for their drive and ambition while those same traits in women are considered self-serving and greedy. In Sheryl Sandberg’s book Lean In, she gives useful advice on how to make the most of your career and motherhood. Discover how to overcome your own gender bias on this episode of Financial Symmetry. What is truly essential to you? Working moms aren’t the only ones that seek the perfect work-life balance. But is work-life balance a myth? One way to bring more balance into your life is to consider what is truly essential to you. Once you give yourself permission to stop trying to do it all then you can make your highest contribution to the things that really matter. The book Essentialism by Greg McKeown inspires readers to prioritize what they really need. This book can help you reconsider what is essential in your life. How can you reconsider what is important to you? Listen to this episode to hear more about this book and other resources for working moms. How do successful women spend their time? Some people seem to be so great at managing their time. What Laura Vanderkam discovered is that when you focus on what matters to you then you will make time for what you want. She emphasizes that time is elastic and you can stretch it to get what you need out of life if you prioritize what is important to you. We are all given the same amount of time in a week, it’s how we use our time that counts. Successful women get paid for the quality of work that they do, not the hours that they put in. How do you prioritize your schedule and make time for what you really want? Discover resources for working moms As you come back to work after having a child your life changes immensely while that of your husband doesn’t change much at all. Even though men often take time off of work, they are not faced with the same kinds of difficult decisions that women face. When returning to work you have to consider how much you will miss your kids when you go back. You have to decide whether you should you stop your career and stay at home or continue to work. Those that normally cheer you on now question all of your decisions. Listen to this episode of Financial Symmetry to find some fantastic resources for working moms. Outline of This Episode [3:49] There are gender biases both internally and externally [12:45] What is essential to you? [17:12] How do you strike a balance with your spouse? [23:50] Can you achieve more by doing less? [30:10] How do successful women make the most of their time? Resources & People Mentioned Episode 51: Financial Savvy for Women BOOK - Lean In by Sheryl Sandberg BOOK - My Mother My Mentor by Pamela Lenehan-- for the guilt complex BOOK - Bossy Pants by Tina Fey -- for comic relief BOOK - Essentialism by Greg McKeown BOOK - Getting to 50-50 by Sharon Meers TV SHOW - Big Little Lies BOOK - Porn For Womenby Susan Anderson -- for comic relief BOOK - Drop the Ball by Tiffany Dufu BOOK - I Know How She Does Itby Laura Vanderkam TED TALK -Laura Vanderkam How to Gain Control of Your Free Time Connect with Grace and Allison Email Grace Kvantas Email Allison Berger Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Dec 2018

38 min

As the holidays near, visions of new tax savings dance in our heads.  But knowing how to spot them is what really matters. With all the new tax law changes, Will Holt joins us again to guide you through seven tax opportunities you can take advantage of before year-end. Some of these tips can save you thousands of dollars, so listen in to see how you they may benefit your personal situation. 7 Tax Opportunities to Take Advantage Of 1. Tax Harvesting (Loss or Gain) – This hasn’t changed with the new tax law, but depending on your tax bracket, that percentage of tax you pay may have. If you’re facing a significant amount of capital gains or expect large capital gain distributions, with the rough October performance, you may want to consider tax loss harvesting. This allows you to offset some of those gains and even go a step further, by using $3,000 of net losses against your income. It may seem counterintuitive to sell at a loss, but it could be an opportunity to offset high taxes. If you are in the new 12% federal tax bracket and lower, realizing more gains could be an opportunity instead, as these could be realized at 0%. But knowing your tax rate and all expected income is required. Discuss with a professional to know for sure. 2. Max Retirement Contributions – Understanding how close you are to the max of your retirement accounts, could present extra tax-advantaged savings at the end of the year. Maxing your 401K contribution is the first place to check. If you get a big year-end bonus, this could be a good trigger. Don’t forget your HSA, as this account provides a triple threat of tax savings (tax deduction, tax deferral, tax-free withdrawals). 3. Convert a Roth IRA? – Doing a Roth conversion can help you stay in your tax bracket by moving an IRA into a Roth. With the new lower tax rates, this could be an opportunity to lower the inevitable tax you were going to pay on this savings. Additionally, you will be taking money out of a tax-deferred account and moving it into a tax-free account. This is a good option for early retirees with large taxable accounts. But you’ll need to be more precise going forward, as the opportunity to recharacterize if you overshoot is gone. 4. Bunching Charitable Contributions – The new tax law has increased the standard deduction for individuals to $12,000 and for married couples from $12,000 to $24,000. This means around 90% of people will now be taking the standard deduction according to the Tax Policy Center. If you forecast your itemized deductions could be higher than the standard amount, consider bunching your charitable contributions into 2-year bundles. One way to do that is by using a bunching tool called a donor-advised fund.  The donor-advised fund allows for more flexibility in taking the deduction now, but still allowing for spreading contributions throughout the year. For more information about donor-advised funds, refer to episode 59 for more details. 5. Look at a Qualified Charitable Distribution Early in the Year – One of the opportunities, that hasn’t changed but is getting more attention, is the QCD or qualified charitable distribution. To enjoy this opportunity you are required to be age 70.5 and older as you can designate a portion of your required annual distribution directly to a charity. This takes some precision and should be targeted for earlier in the year when the RMD still needs to be taken as it must come directly out of an IRA and go directly to the charity of your choice. 6. 20% Deduction for Qualified Business Income – If you are a small business owner or entrepreneur the qualified business income deduction will be of interest. What’s come to be called the QBI deduction, or 199A deduction, is used for any business that is not a C corporation. If you have self-employed income or are an S Corporation, you can receive a deduction of 20% on your profit. However, there are income limitations. After you listen to this tip you’ll want to sit down with your tax professional and plan your taxes. We wrote a more detailed article on potential savings with QBI here. 7. Watch the Tax Torpedos – To truly understand your own tax planning, you have to watch specific income thresholds. We refer to these as tax torpedos. For example, if receiving a premium tax credit for health insurance, you could lose your entire subsidy if you surpass the income limitations by even $1. These are set according to the amount of family members (up to 4). A great example of why tax planning matters throughout the year as well. We discuss other important income thresholds dealing with the medicare premium surcharges, child tax credit cutoffs, and roth IRA limits. As you prepare for the holiday season, make sure you take a second look at your tax planning. By watching out for these financial opportunities, you could end up saving yourself thousands of dollars in taxes. It’s important to have a multi-year tax strategy and always consider the big picture, not just what is happening now.  Being financially smart means considering all aspects of your financial life.  This time of  year, that begins with looking for ways take advantage of new tax laws for your personal situation. Outline of This Episode [2:47] Tax loss harvesting [6:51] Retirement accounts tax savings [9:00] The Roth conversion [12:09] The new tax law increased the standard deduction [15:36] Qualified charitable distribution [19:43] The qualified business income deduction [22:37] Specific thresholds to look out for Resources & People Mentioned Episode 59 Tax Solutions for Charitable Giving Episode 63 – QCD’s Qualified Business Income Flowchart Connect with Will Holt wholt@financialsymmetry.com Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play Podcasts <> Stitcher <> Google Play

Nov 2018

30 min

If you've paid any attention to financial news recently, then you didn't have to look far, as stock market noise was at a peak. Media headlines were filled with phrases like: epic turmoil, getting crushed and no place to hide. Emotionally charged words that make you feel like you need to do something to prevent losing more of your nest egg. But following our instincts when investing, can lead to dangerous outcomes. In times like this, we need a strategy to give us proper perspective. On this episode of the Financial Symmetry podcast, we’ll discuss why market fluctuations are incredibly normal and provide techniques to help you cope with short-term volatility and keep your focus on long-term goals instead. If you’re getting nervous about the direction the market is taking, you’ll want to listen for steps to confront the inevitable next occurrence. How to Deal with the Emotional Roller Coaster of Investing When listening to financial news it's important to remember that the media’s ultimate job is to sell advertisements. It's not their job to help you see the long-term picture or help you reach your financial goals. Easier said than done when markets around the world experience a 10-15% drops. But if we back up, history provides a different perspective. Market volatility is reliably normal, but it can still make you feel nervous. To truly understand the ups and downs, take a look at the chart below from the Capital Group. There have been 12 full-blown bear markets since 1945. A 5% or more decline in the market typically occurs 3 times a year. And a 20% drop usually occurs about every 4 years. The past 10 years have actually been the anomaly. It is important to remember that a bear market isn’t a bad thing. It’s actually a great time to reassess your investment plan and evaluate your risk tolerance. Fight Stock Market Noise with Facts With breaking news coming at us as quick as we want it with social media, it's even harder to block out the noise. Whether tweets or 24 hour cable news, today's financial news is near immediate compared to 30 years ago when you may not hear it until the next day. In Jason Zweig's book, Your Money and Your Brain, he provides some powerful questions to prevent your feelings from overwhelming the facts. Instead of listening and reacting to the financial news du jour, stop to pause and think about if anything else has changed in your financial picture, other than price of your investment.  Consider if your reasons for investing in that investment is still valid?  If I liked this investment enough to buy it at a much higher price, shouldn't I like it even more now that the price is lower?  What other evidence do I need to evaluate in order to tell whether this is really bad news? Has this investment ever gone down this much before? If so, would I have done better if I had sold out-or if I had bought more? What Should you Do Next? To successfully navigate a bear market, you have a long-term strategy in place. Cliche? Sure, but considering where you are in life now is instructive in developing your treatment plan for market short-term sickness. If you're in your 20’s and 30’s don’t worry, there is still plenty of time. Investment choices still matter at these ages, but not nearly as much as your actual savings amounts. Choose and stick with an investment plan so you can steadily take advantage of the drop in stock prices, a fantastic long-term sale. If in your 50's and 60's, it's much more important to focus on your overall investment strategy. How does your asset allocation match your retirement timeline? For many in this walk of life, investment returns will be larger than your annual savings amounts. You'll also be facing the sequence of return risk which can eat a big portion of your retirement without a strategy. Professional help at this point, can help you respond accordingly to market events and more importantly, act as an accountability partner. Having a buffer between your emotions and the markets may be the most important financial decision you can make.  Outline of This Episode [1:17] Examples of fearful headlines in the news this month [4:01] Why you should not be worried about market fluctuations [7:32] Stick to your strategy and investment plan [12:26] What are your emotions telling you to do? [18:26] What should you do next? [23:45] Fight fear with facts [29:04] Next time on Financial Symmetry. . . Resources & People Mentioned BOOK - Your Money and Your Brain by Jason Zweig Warren Buffet Video - DFA's Tuning Out the Noise Capital Group - How to Handle Market Declines Episode 67 - Why Bother Diversifying with International Stocks Article - How Fear May Be Hurting Your Investment Strategy CBS Marketwatch - Ignore the Noise and Let the Market Do Its Thing Episode 48 - Making Better Decisions with the Laws of Wealth Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast Apple Podcasts <> Stitcher <> Google Play

Nov 2018

30 min

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