Protecting assets

reducing stress with financial uncertainty

Times like these tend to make us reassess everything, including investment risk tolerance. Big market pullbacks are scary. It’s no wonder some are reconsidering mattress cash stashes. Fortunately, there are ways for reducing stress when faced with financial uncertainty. This pandemic forced us all to reflect on what it’s like to go without pay. Whether gainfully employed, on unemployment, or struggling with reserves, we all felt the effects. It makes you wonder about doing things differently in the future. That’s not a bad thing. America’s credit card debt is trending up, logging in at $887 billing during the second quarter of 2022, according to the Federal Reserve Bank of New York. That’s up from $841 billion in the first quarter. We’re wracking up debt in housing costs too. Rents have skyrocketed along with the purchase price for homes this year. Add in rising interest rates and many are paying a lot […]

Hold or sell to find bulls in a bear market?

It’s been a tough couple of months for just about everyone with investments. The traditional advice of not selling during a retraction is starting to hurt. Buying high and selling low defeats the goal of having your money appreciate they say. Bear markets recover to levels higher than prior bull market gains, the assurances go. What we’re seeing today, though, is unprecedented. Hold or sell isn’t as easy a question as it used to be. Fortunately, even in bear markets, there are patterns. Spending behavior is different when the economy is suffering. Doing nothing and depending on dollar cost averaging to save the day might not work with the kind of retractions happening today. The biggest losers Large-cap and high-tech stocks are taking a pounding. The top tech stocks have lost $3 trillion this year in market capitalization. Sure, they were overpriced, but that’s trillion with a “T,” which […]

Do you know what those 401(k)s or IRAs are costing you?

Most people think it’s smart to divert income regularly to an employer sponsored retirement account or an individual IRA. Of course, those folks are miles ahead of the majority of Americans in setting money aside at all, but how you do it can make a big difference come retirement time. I see people losing thousands of dollars every year when they don’t look at tax consequences, especially possible savings, as they make decisions about funding retirement. Diversifying gives you more control with tax liabilities IRAs and 401(k)s are great investment vehicles if they fit your individual situation. Sometimes it makes more sense to maximize your benefit in a brokerage account. This can help reduce your taxes when you have other financial matters to consider with your household. For example, perhaps you had an unusually low-income year. It’s common for small business owners to experience profit ebbs and flows. It might […]

Don’t forget real estate in your net worth

Wealth is defined as an abundance of valuable possessions or money. How much wealth you have is determined by subtracting liabilities from assets. This is also how you calculate your net worth. Have you thought about what that number is lately? It’s probably different than it was before COVID-19 came on the scene. The time we’ve spent in isolation during 2020 has caused most to do a lot of self-reflection. Too much for many of us to be comfortable with. Still, it’s always a good idea to periodically assess where you’re at and where you’re going. Why not spend some of this navel-gazing time doing and in-depth evaluation of your finances? You might be pleasantly surprised at what you discover. Get creative to build wealth I often find, when working with families and business owners to assess their net worth, that real estate is a significant portion of their wealth. Most, though, […]

Making your home a better asset

There’s been a big uptick in purchases at home improvement stores. Stocks are rising and revenues climbing at some of these retailers during a time most other businesses are struggling. It’s no wonder. People are spending more time at home, looking for something to do, and fixating on home issues. According to Baron’s, “. . . home improvement spending rallied 16.4% year over year in May, with the adjusted figure coming in up 5.2% for the three months ending in April.” Home Depot and Lowe’s “comparable sales climbed 6.4% and 11.2%, respectively during this time.” Yes, as we’ve been hunkering down, we’ve been tinkering with our living spaces. Retirement planning with real estate Typically, people think about 401ks and other traditional retirement savings vehicles when they calculate assets. As you plan your investment strategies and review your net worth, don’t forget to include real estate. What’s also important to consider, […]