Independent Wealth Management
Who scrutinizes your investments, designs and tests your retirement and education plan, searches for new investment ideas, patrols insurance agents and mortgage brokers, shows you strategies designed to reduce your investment costs and income taxes, monitors your 401(k), promptly responds to your email, provides one monthly statement, day-to-day net performance across all of your accounts and does all of your paperwork...We do!
6 Ways to Reduce Debt
The importance of saving for retirement cannot be overstated. In addition, no matter how much money you are setting aside for retirement, you may also have credit card debt. Even those with expansive investment accounts and retirement funds able to support them for years, are still paying costly credit card debt. Does this make sense? Is there a way to break the debt cycle that has you putting away less than you could be and paying more than you need to?
A credit card is a convenient tool…but it can be one of the most expensive. We commonly meet investors with an ample cash reserve and a significant retirement portfolio yet they carry (non-mortgage) debt month to month. How do you break the hold debt has on you? How can you stop paying interest so you can start earning interest on your education accounts and retirement investments instead? Here are six ways to put more money into your pocket and less into the creditors.
Real Cost of Retirement Living
Your long-term goals and medical condition will dramatically impact the true cost of retirement. In the past, it was common for people to enter retirement facilities such as nursing homes when they were too old to care for themselves or their home. Today, most people intend to stay in their home as long as possible but are willing to consider alternative living arrangements such as retirement communities and assisted living facilities to provide them with sense of community and assistance they need.
As you plan for retirement, you must take into consideration the true cost of retirement housing, in any form. Retirement communities, assisted living or skilled nursing facilities or simply staying in your home are all viable options. The question is what are the likely costs of each of these decisions?
Senior Independent Living Facilities
Long Term Health Care
Skilled Nursing Facilities
Staying Home
Rafael Velez
in Financial Planning, Retirement
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Buffett Partnership Letters, Part 2
When you run money, you run people. Unlike money, people make phone calls, write letters, send emails and basically toss more logs on the fire. In the first few years of the partnership, Warren Buffet was only managing a few million dollars. The beginning sentiment in his letters was one of a confident, yet cautious optimism. A reading of the letters from 1963-1966 finds Warren Buffett a bit frustrated, albeit still very focused and successful.
It is refreshing to see that Mr. Buffett actually does have veins with red stuff in them. He is not a money-making machine with total mastery of emotions at every human juncture. At one point (and one that I appreciate more every year) he basically tells his investors, “If you don’t like the way I measure success, get out.” Interesting that the partners question him after phenomenal year over year performances.
The principal of compounding became a frequent topic in the mid-year communications. Either we compound our money or figure out how to live longer is the sentiment. The clear point is, your money is going to have to go ahead of you and establish your future.
Employee Stock Options
In 1960, American corporate executives earned approximately 12 times the wage of an average employee. In 1980, the multiple had grown to 42 times the average employee. Today, according to Mercer Human Resource Consulting, executive salaries are over 550 times an average salary.
These surveys neglect to take into consideration one new class of professional. One that is changing the classical connotation of "average salary." I call them EE's for elite-employees. EE's are represented by relatively young, well-educated, and technologically elite professionals that are generally not members of corporate boards. They don't maintain traditional executive titles, but are paid as though they do. Many work within the internet, or one of its highly-skilled peripheral industries. Although they receive great salaries, a large portion of EE wealth is, or will be generated via incentives.
Incentives have become vital to the increase in salaries, and can make up more than half of a total compensation package. The most popular incentive is the stock option. Closely tied to company stock performance, the financial benefit gained from this granting derivative can be substantial. The option allows one to purchase the underlying corporate stock at greatly reduced prices, and at much later dates. If your employee stock options represent a substantial portion of your net worth, you must begin to view yourself as the CEO of your own personal stock option enterprise. Properly managing these options is mission critical.
