Twila Van Leer

Choose A Financial Advisor

February 3, 2018 By Twila Van Leer

Saving for retirement just makes good sense, but when retirement is still a long way in the future and you are intent on living now, the task can seem daunting.

Too often, people look at retirement preparation as a last-minute sprint instead of a long-term marathon. The process should begin early in one’s career and you don’t need a degree to figure it out. The process can be eased by involving a qualified financial adviser.

A qualified financial adviser can provide advice and guidance and provide services that might include investment management, income tax preparation and estate planning.

Building a sufficient retirement savings may require putting a rein on spending during the earning years. Your financial adviser can tell you how much you need to save and then guide you through what can be a confusing investment strategy so that the money you invest will give a good return.

Your local banking institution may offer free or low-cost adviser services, along with printed or online information that would be helpful, such as retirement calculators, trust and estate services, insurance options and others.

The AARP offers these guidelines to finding a competent financial adviser:

• Verify the individual’s credentials and get client reference.
• Study your options and don’t hire an adviser until you are certain he or she offers what you want for your particular circumstances.
• Be clear up front about the adviser’s fees. There are various ways an adviser can be compensated.

Saving for retirement need not be overwhelming. Take advantage of information provided by your employer and your financial institutions. Spend your money before retirement with an understanding of how that will affect the future and team up with someone knowledgeable about retirement finances. And then – happy retirement.

Personal Finance For Every Income

January 29, 2018 By Twila Van Leer

Some people hear the phrase “personal finance” and assume that it is meant for people with lots of money. Not so. In fact, it may be that the less money you have, the more important it is to track it and make the best use of it.

Even if you are living paycheck to paycheck, there are usually things you can do to make savings possible.

Start with a budget. Seeing your income and outgo in black and white gives you a good starting point. Then analyze your spending and see where there might be some wiggle room. Having a clear picture of where you are can help to plot out a direction.

Eating out too often? There is something to save if you discipline yourself to make less expensive meals at home. Lower the speed on your Internet. Choose a less expensive cable package, or dump cable altogether. Avoid compulsive purchases. Even if an item of clothing is on sale, it isn’t a good deal if it derails your savings intentions.

If you cut all the corners you can and still aren’t able to put a consistent amount into savings, it may be time to look at more extreme options, such as taking a second job temporarily so you can pay off debt.

Downsizing your living space may be possible. That means saving in several areas, including the housing itself and the cost of the utilities it takes to live there. Making drastic changes for the short haul to come out better over the long term is smart.

Bottom line: Don’t wait until you can easily afford it to begin a savings program. Scrimping a bit now will pay off in the future when your income is likely to be larger. You will have developed the habit so that retirement savings will come natural.

Clueless About Personal Finances

January 27, 2018 By Twila Van Leer

A recent survey of 1,000 Americans proved what the experts have known for a long time: About half the group lacked even basic knowledge of how finances work. The study was commissioned by GuideVine and looked at people in an age group over 30.

Among the findings:

• Half could not describe what a 401(k) is
• Forty-eight percent could not define interest
• Forty-eight percent did not understand the basics of bankruptcy
• Thirty-four percent were unclear on the principles of inflation
• Fifty-five percent said they were lost when it came to a long-term, stable financial plan.
• Thirteen percent said they had as five-year plan for their finances.

Lack of understanding of basic financial facts also created a lack of positive thinking about the future. Thirty percent said they believed they would never be able to own a home and about the same percentage said they could see no positive change in the future.

GuideVine officials said they were not surprised at the figures. They are consistent with other research over a long period of time. The company deals with many clients who are financially illiterate and don’t know where to begin to reverse their situations.

The lack of understanding is itself a deterrent to taking charge of personal finances, said Raghav Sharma, GuideVine CEO. Because people don’t have a clear view of the problem, they don’t feel compelled to act. They postpone positive action and making long-term decisions.

The survey showed that a majority of the respondents – 66 percent – make a budget, 70 percent of that number have a hard time sticking with it.

The most common mistake apparent in the research (51 percent) is failing to save enough. A paucity of emergency saving accounts also was apparent. Accumulating unnecessary debt is another sore point.

The majority (64 percent) said they are reluctant to seek the help of finance counselors, probably because close to half believe that such advisors are not trustworthy. That may be due to the thousands of representatives in the field and the confusing array of qualifications they have. As people age, they tend to have even less confidence in financial advisors, Sharma said. The younger set are more likely to seek information via family and friends and online.

Bach Learned Financial Facts Early

January 25, 2018 By Twila Van Leer

Self-made Millionaire David Bach got the best financial advice of his life when he was seven. His Grandmother, Rose Bach, helped him purchase his first stock – in McDonald’s – and taught him some personal finance facts that ruled his life.

What she told him was that “There are three types of people in the world: Those who come to McDonald’s and eat here, as you are now, and spend money; those who work here for minimum wage; and those who invest in the company. The investors get rich.”

“The experience of thinking like an investor at the age of seven changed my whole life,” says Bach, who co-founded AE Wealth Management. Consistently investing a portion of one’s income, a strategy he calls “paying yourself first,” is the key to building wealth.

In his New York Times best-selling book “The Automatic Millionaire, “ Bach shares the secret: “Becoming rich requires nothing more than committing to and sticking with a systematic savings and investment plan. Compound interest should lure would-be investors if nothing else does, he points out. “The sooner you put your money to work, the better.”

He and other experts advise that, rather than trying to pick stocks, you begin with investing in a tax-advantaged retirement account such as a 401(k) or an IRA or Roth IRA. A second step could be looking into index funds, which offer diversity at a low cost and pretty consistently deliver good long-term results.

He advises that if you are hoping to get your kids off on a good path financially, you follow Grandma Rose’s approach. Help them buy a share of stock in a company they know and then continue to encourage them to build on that small beginning. “It will change their outlook on everything” for a lifetime.

Not Buying A Home Is A Mistake

January 23, 2018 By Twila Van Leer

The single largest mistake America’s Millennials are making is failing to buy a home, according to millionaire and finance guru David Bach.

Although there is a school of thought that home ownership is the “American nightmare,” Bach holds to his premise that failure to buy a home limits young earners in their quest for financial well-being. “The average homeowner to this day is 38 times wealthier than a renter,” he asserts. “Buying a home is an escalator to wealth.”

Bach, author of “The Automatic Millionaire,” says he bought his first home in San Francisco. It skyrocketed in value. He then moved to New York, purchased another home and again saw a significant increase in value. He now owns a third home.

You have to live somewhere, he reasons, so why not make an investment in something that will pay you back over time? A renter can easily spend half a million dollars in rent over the years and end up with nothing to show for the expenditure.

“Or you can buy a house and spend the same amount paying down a mortgage and in the end wind up owning your own home free and clear.” As an example, he cites the math: $1,500 rent per month over 30 years equals $540,000 – money down the drain, in his opinion.

If you are considering the pros and cons of home ownership, he advises “Start by crunching the numbers. Do the math, starting with the smallest options. When you’re really clear on your goals, start shopping.

Rule of thumb: Make sure your total monthly housing payment doesn’t consume more than 30 percent of your take-home pay. Save for a down payment of at least 10 percent, more if possible. Don’t go overboard. Your first home may not be your dream home, but it is a step toward that end.

Buying a home puts you in the market, and, according to Bach, “You aren’t really in the game of building wealth until you own some real estate.”