Do you worry about losing your money? If so, this isn’t necessarily all bad; worry can prompt you to make smart moves that lower investment risk when needed. The following steps can all help reduce investment risk: increase the percentage of portfolio cash, diversify asset classes, buy undervalued assets, own noncorrelated investments, manage bond risk, …
11 Ways to Reduce Investment Risk While Building Wealth Read More »
The percentage of net worth that should be in retirement accounts is the percentage that will allow you to accumulate as much as possible in those accounts before retirement, as well as be able to pay for your lifestyle throughout retirement. Factors that determine the ideal percentage of net worth to allocate to retirement accounts …
What Percentage of Net Worth Should Be in Retirement Accounts? Read More »
Wealth is determined differently by different people but from a financial perspective, people often ask: Does net worth determine wealth? Research shows that while net worth specifically doesn’t determine wealth for most people, having enough money to do many of the things that do determine wealth requires financial assets. Net worth measures the amount of …
Deciding how much of your net worth to keep in cash is a huge part of managing risk while building wealth, as well as contributing to a peaceful existence as an investor. The simple formula to figure how much of your net worth should be in cash is the amount you need to cover all …
How Much Of My Net Worth Should Be in Cash (Liquid Net Worth, Cash Percentage) Read More »
Every day more investors are using alternative assets to generate income in retirement for a variety of valid reasons. Small business and real estate are among the most popular alternative investments now given the opportunities and ease of entry for each of these assets. There are many types of small businesses and many types of …
Owning a Business Vs Real Estate | What I Learned from Each Read More »
Asset allocation refers to the percentages of investment capital put into the various types of investments. The goal with asset allocation is to achieve maximum return within an acceptable amount of risk. There are four major types of asset allocation: Constant weight asset allocation, strategic asset allocation, dynamic asset allocation, and tactical asset allocation. In …
The word is getting out about asset rotation investing after decades of popular buy and hold investing. What is asset rotation exactly? Asset rotation investing rotates into asset classes that are increasing in price and out of assets that are decreasing in price. Rotation timing is often based on technical factors for the asset classes. …
What has been the best investment over the past 10 years? The best investment over the past 10 years was large cap U.S. stocks. The benchmark used to represent large U.S. stocks in this investing quilt was the S&P 500 index. The annual return for the past 10 years was an average of 8.81%. Apple, …
Future retirees looking to live off retirement account withdrawals need to feel confident they have enough money to sustain those withdrawals for their remaining lifetime. This means estimating how much money you’ll have when it’s time to retire might be the biggest single step in planning for retirement. There are several factors that go into …
How To Estimate Future Growth of My Retirement Account Read More »
True financial independence is being able to live off investment income without spending down your investment capital. How to calculate investment income: Multiply investment cost by the yield to get the amount of annual income. For example, if an investment that costs $100,000 yields 3%, investment income will be $3,000 a year. After calculating investment …
How to Easily Calculate Investment Income and 4 Common Mistakes Read More »
The All Weather Portfolio is has performed well during certain times in the past. By the end of this post, however, you’ll know why the All Weather Portfolio might work well for the extremely wealthy Dalio family for whom it was designed, and why it may not work so well for investors like you and …
All Weather Portfolio Pros and Cons | ETFs | Performance | Chart | Videos Read More »
Are you searching for an advanced investing course? An advanced investing course should cover the different methods that can be used by investors, not just go deep into one method. It should also emphasize what drives returns and how to manage risk. The instructor should be unbiased and experienced in various investing strategies in different …
The closer you get to retirement, the more important it becomes to avoid nasty, major stock market moves down, and capture those lucrative stock market moves up. This fuels the drive for investors to know if the stock market will go up or down over the next few years with a higher degree of likelihood. …
How to Know If the Stock Market Will Go Up or Down Read More »
In my own investing for over 40 years and working with financial coaching clients as an AFC (Accredited Financial Counselor), I know the complexity that can come with having multiple investment accounts at different places vs the simplicity of using one brokerage firm. Should all investments be in one place? Benefits of having all your …
When feeling uncertain or overwhelmed about managing your investments, you may consider hiring a financial advisor. In this post I’ll share what I learned about the pros and cons of using a financial advisor after having hired and worked with multiple financial advisors over the years. The pros of using a financial advisor are …
Pros and Cons of Using a Financial Advisor (with Cost Charts vs DIY) Read More »
Living off investments defines financial independence, but getting there can be challenging. How much money do you need to live off investments? Here’s the formula: Divide the desired annual income by the expected yield. If you want $10,000 monthly investment income, and expect a 5% yield, divide $120,000 by 5% for the amount of money …
How Much Money Do You Need to Live Off Investments? [Videos+PDF] Read More »
Many retirees are realizing a million dollars isn’t what it used to be. Therefore, a lot of investors are now looking to retire with more than originally planned. Is 1.5 million enough to retire? The math shows if you’re using a 3% retirement withdrawal rule, and can live on $3,750 a month plus other …
Selling in the money covered calls can be an excellent income generating strategy for stock investors trying to live off investment income. An in the money covered call strategy involves selling a call option with a strike price lower than the market value of the underlying stock. This strategy is commonly used when the call writer …
In the Money Covered Call Strategy | Benefits and Examples Read More »
It can be challenging to choose the best opportunity to maximize your valuable time and capital. Is it better to start a business or invest in stocks? For the amount of capital required, starting a business has high income and capital gain potential yet requires far more time from the owner; investing in stocks has …
Start a Business or Invest in Stocks: Which Is Better? Read More »
Selling covered calls can generate income of roughly 2 to 12 times that of dividend income received from the same stocks. Living off traditional investments has become challenging since the real yields from both stock dividends and bond interest are low, leading investors and retirees to consider covered calls. Is living off covered calls is …
Homes are the single most valuable asset many people own, yet homes cost money to buy and maintain. Living in a highly desirable home is alluring since it has a huge effect on lifestyle. As a result, a large percentage of net worth can get tied up in a home without considering overall financial goals. …
Investing within acceptable risk is one of the most important things we can do as investors. Occasional bear stock markets challenge even advanced stock market investors when it comes to managing risk. After investing through several bear markets over the past 40 years, I’ve learned that one of the best ways to lower stock …
What Goes Up When Stocks Go Down? 7 Hedging Assets Read More »
A wealth coaching client recently asked “How much do I need to invest to make $10,000 a month in income?” We explored several options to accomplish her income goal based on her net worth and chosen level of risk. To see how much you need to invest to make $10,000 in monthly income, or any …
How Much Do I Need to Invest to Make $10,000 a Month Read More »
Many investors end up with a huge position in just one stock. This is a “good problem” that often happens with older investors, in particular. Is It Bad to Hold One Stock for a Long Time? It’s risky to have too much net worth tied up into one stock, period. It’s true that concentrated positions …
Buy and hold investing is the most popular investing method for individual stock and bond investors due to it’s simplicity, low cost and good long term results. There are, however, some excellent alternatives to buy and hold investing available to individual investors. In this post I’ll cover information about these alternatives to buy and hold …
We investors, that is, are almost always wrong collectively about which direction the stock market will go. Here’s the holiday looking colorful chart (compliments of AAII) to support my points below: The AAII (American Association of Individual Investors, that’s most of us reading this:) reported that those expecting a rise in stocks over the next …
Are Individual Investors Wrong Most of the Time? Read More »
Asset allocation can be the driver of investment returns as well as the primary risk management component in an investment portfolio. Its importance, therefore, cannot be overstated. The factors affecting asset allocation are investor age, net worth, liquid assets, emergency fund, time frame, financial goals, risk tolerance, alternative investments, and investment correlation. As you will …
Investors often wonder about the difference between strategic investment vs tactical investment strategies. Strategic investing is usually passive, or buy and hold, and follows a fixed asset allocation among different types of investments, while tactical investing makes investments in assets that appear to be better at any given time based on their return potential. What …
Asset allocation defines the percentages that are invested in various types of assets, like stocks or bonds. It is the foundation for traditional investing that seeks to lower risk through diversification. There are pros and cons to asset allocation. The pros are improved risk management, structure, past data availability, low implementation cost, alternative investment potential, …
It’s never too early or too late to set financial goals. Financial goals for a 50 year old should evaluate progress toward a previously defined savings goal, as well solutions to decrease spending, increase income, increase savings, and improve investment returns to enable the accomplishment of retirement goals. In this article, each of these factors …
This investor emotions chart outlines the 14 stages investors experience during stock market cycles. Investor emotions are real. Emotions affect our actions, often negatively, which hurts our ability to have enough money to retire comfortably when we want. That’s a big price to pay for something that can be remedied, so let’s do that. It’s …
Covered calls can be an excellent way to generate extra income from stocks but they don’t always go exactly as planned. Fortunately, covered calls can be rolled when the underlying stock moves in an unexpected or unfavorable way. If you’re wondering how to roll covered calls, it’s relatively simple. To roll covered calls you buy …
While we usually think our stocks have performed well because we chose the right stock, fund, or financial advisor, the economy is usually the driving factor for stock prices. How does the economy affect stock prices? In general, stock prices increase when the economy expands and stock prices decrease when the economy contracts. The …
Most people think of wealth as being made only from investing in the stock market. While many investors do successfully grow a stock portfolio over time, you’ll find that most high net worth investors make wealth in other ways. Wealth is commonly made from significant income increases, company bonuses, increases in the value of assets …
It can be impossible to know who to listen to amongst the many past and present investment experts, most with varying opinions. Investment performance, however, reveals the truth, as you’ll see in this post. Almost anyone following the stock market news has heard of Cathie Wood. She’s become one of the more prominent …
There are the wildly popular if not overly simplified asset allocation models of investing in stocks and bonds. Then, there are alternative wealth strategies we know the wealthy use that can seem out of reach for us normal investors. Are they really out of reach for us individual investors? If not, which alternative wealth …
Alternative Wealth Strategies That Worked (And Didn’t) Read More »
Does everything you need to know about investing really fit onto one side of a cocktail napkin as touted by more than one wildly famous financial author? Well, the answer depends on: Your personal wealth plan How long you have to save and invest Your net worth How much money you need to retire …
Beginner To Advanced Investing Strategies | What’s Best for You? Read More »
Inflation is a lurking but serious danger that can destroy your ability to live well in retirement. If you’re wondering how to account for inflation in retirement planning, the main thing is to simply do it. First, use calculators that factor inflation into the numbers. Next, plan for inflation a little higher than what you …
How To Account For Inflation In Retirement Planning Read More »
Saving a million dollars used to mean that you were financially set for life. Can you live off a million dollars today, and for how long? If your plan is to make 4% retirement account withdrawals, and you can live on $40,000 a year, a million dollars should support you for about 30 years. This …
There are simple ways to make money when stocks drop using more traditional investing methods and there are also more advanced strategies to make money when stocks drop. In this post, I will cover simple to slightly advanced strategies that both investors and many wealth managers use to make money in down markets for their …
Covered calls can be an excellent income source for stock investors, but it can be confusing to select the best option expiration for the call being sold. The further out the option expiration, the higher the premium and the longer the stock has to reach the strike price. How far out you should sell …
The simplest and only sure way to avoid losing money in the stock market is to not own stocks. Stocks, however, can be a profitable passive investment for busy investors who understand stock market losses, are aware of stock market cycles and have chosen how much stock market risk they want. That’s what this post …
An exciting and promising shift is happening right now in the way we retire. Fortunately, changes stemming from the rise of the internet now lead to rewarding retirement opportunities for those not interested in living on less while working crossword puzzles for brain stimulation in their golden years. The younger generations are living proof …
Stock market returns by decade are often used as markers for measuring past performance and estimating future performance more reliably for retirement planning purposes. And we all know that stock market gains can be excellent passive wealth builders in most decades, so let’s see what happened last decade, and how can we use that data …
Stock Market Return 2010 through 2019 and Why You Care Read More »
One of the fastest, lowest cost and most fulfilling ways to increase income in retirement is to start a consulting business. If you’re older, like me, and have undoubtedly developed some amazing skills over the years. But you may not be as much of a marketer, or as tech savvy as the younger generations, unless …
How to Start a Consulting Business in Retirement Read More »
No one wants to run out of cash. By cash, I mean that super safe stash you keep in a money market account that won’t fluctuate in value the way stocks do. But just how much should you keep in a money market account? It depends on some personal things like your investments, portfolio allocation, dependents, …
How Much to Keep in Money Market Accounts | 15 Factors Read More »
The foundation for building wealth is knowing your net worth. If you’re not sure how to calculate net worth, you’ll simply list everything that you own, subtract everything you owe, and the difference is your net worth. There are many apps and online net worth calculators. Call me a nerd, but I still like to …
The old model of retirement no longer works for a lot of people who want to live well in retirement. Old retirement strategies include basics like delaying social security, working longer and part time employment. But, fortunately, there are now some more innovative and lucrative retirement strategies that can be a real godsend for retirees. Many millennials are already using some of these new retirement …
Consistently saving money and investing it in stocks and bonds builds wealth over many years. The problem is that this strategy usually takes at least two decades, and most people don’t begin this discipline until it’s too late to save enough to retire comfortably. Alternative wealth solutions exist, however, for anyone willing to think and invest outside the …
Bear markets are a fact of life for stock market investors but they don’t have to be detrimental to your net worth. After investing through several bear markets, both alone and with financial advisors, I’ll share how to prepare for bear markets. While I’m an AFC® (Accredited Financial Counselor), I write from my own investing experience of 40 …
How to Prepare for Bear Markets | 11 Steps [Video, Chart] Read More »
Many investors have concerns about passive investing in stocks and bonds based on standard asset allocation models. Or maybe they have seen that passive investing won’t get the results they need to reach their financial goals. Many investors turn to more advanced investment strategies in an effort to increase returns without increasing risk. Popular …
Advanced Investment Strategies (You Won’t Hear from Your Advisor) | Video Read More »
Managing risk in the stock market becomes more important as you get older. We all learned this from the challenging 2000 decade when the stock market (S&P 500 index) had an annualized negative return of 2.72% (excluding dividends) for the entire 2000 decade! If you’re wondering how to manage risk in the stock market, investing …
For those planning to retire soon, retirement can feel scary from both a financial and a lifestyle perspective. Fear of retirement boredom is a very legitimate reality, especially for certain personalities. Here are 7 ways to address that subtle and almost embarrassing fear that you could be bored to tears in retirement. Read my own …
Every time I hear a retiree confidently tell me that they are invested in “safe stocks” so they’re not concerned about a bear market, I silently shudder. Are stocks safe for retirement? It all depends on your risk tolerance, net worth, stock market valuations and other factors explained below. After investing for almost 40 years …
Are Stocks Safe for Retirement? 8 Important Factors Read More »
True financial independence is reached when you can live off investment income. Living off investment income has many advantages that often require a shift from traditional investing in stocks and bonds, but there are also a few disadvantages to living off investment income. In this post, I’ll share and explain the 22 advantages and 6 …
Living Off Investment Income | Advantages and Disadvantages Read More »
If you’re concerned that investing in traditional stocks and bonds with a common asset allocation won’t provide a comfortable retirement for life, you’re not alone. We had those same concerns over a decade ago, along with millions of other investors over 50, and here’s what we discovered: Alternative retirement investment strategies can result in higher …
12 “Slightly” Alternative Retirement Investment Strategies Read More »
Downsizing can be a smart option for anyone who wants to retire soon but lacks the funds to retire comfortably for life. Is downsizing the right choice to retire earlier for you? The answer depends on your overall wealth plan, cost to downsize, alternatives to downsizing, downsizing calculations and how much it takes for you …
Is Downsizing the Right Choice to Retire Earlier? Read More »
Just past midlife, many people get super focused on increasing net worth before retirement. What net worth do you need to retire? You’ll need enough assets to allow you to cover all living expenses with retirement account withdrawals of 3% to 5%, plus any other income sources, including social security. Also, living expenses should be adjusted for …
Updated: October 9, 2019 By definition, retirement is the time when you can live off investments. The traditional retirement model is to withdraw 4% a year from your retirement savings to live but an increasingly popular alternative is to get income from investments instead. Is it safest to withdraw or get investment income to live in …
Is It Safest to Withdraw or Get Investment Income? Challenge Read More »
Updated May 6, 2020 At the end of the strong bull market of the 1990’s, a few brave financial experts predicted the next decade would not be a good one for stock investors. What will stocks do over the next 10 years? Ray Dalio, Warren Buffett, Rob Arnott, Liz Ann Sonders and John Bogle have told us what …
Knowing how much money you need to live off investments can seem daunting but it’s really just a few steps and math. Let’s say you want to generate $ 10,000 a month to live off investments. We can back into the amount of money you need with the following formula: Amount of Desired Monthly Income/Expected Yield = …
After surviving a few bear markets over the past 40 years as an investor, I’ve learned many lessons from them. Reducing risk in stocks before bear markets take full hold helps investors protect their net worth as well as have capital to invest in stocks again once unusually low valuations are reached. This sounds almost too obvious to write, but most investors don’t take …
Reducing Risk in Stocks | 13 Lessons from Past Bear Markets Read More »
You may have noticed that you’ve gotten both capital gains and dividends from investing. Or maybe you’re trying to decide if you should focus on dividends vs capital gains in selecting investments, leading you to wonder: Are dividends or capital gains better? Dividends are better for investors seeking income as a primary objective …
Toward the end of bull markets, it’s smart to see what stocks went up in past bear markets for recession proof investment ideas. While there have been some short and minor bear markets since 2008, the severe 2008 bear market continues to provide excellent data and investing lessons for everyone. Stocks that went up in …
Stocks That Went Up in 2008 | Plus ETFs, Bonds, Gold Read More »
You may have heard that selling covered calls can increase earnings from stocks. Here’s how covered calls work. A stock investor sells call options that give the call option buyer the right to buy the stock from the investor at the option strike price on or before the option expiration date. The option buyer …
If you’re exploring early retirement like we were well over a decade ago, you may be wondering about the income provided from the standard 4% retirement withdrawal rule. Does the 4% rule include dividends, specifically? The 4% rule can include dividends if they exist in the account since the rule is more about the amount …
Growth investing is usually done during an investor’s high income years while income investing is usually done during retirement, but the best time to transition from growth to income can be unclear. If you’re wondering when to switch from growth to income investments, the answer depends on several factors including net worth, income sources, wealth …
When to Switch from Growth to Income [With Videos] Read More »
If your net worth isn’t where you want it to be, you may be wondering how you can build wealth in a way that won’t take decades. The best assets to build wealth fall into two categories, almost all quality assets that can be bought at low valuations, and assets that can be created. After …
Best Assets to Build Wealth | Charts, Videos, Calculator Read More »
If you’re approaching retirement, that anticipated time when you can live off investments or at least work fewer hours own your schedule, you’re probably transitioning to income investing. You may be wondering how to buy assets that generate income. The way you buy income generating assets depends on the type of asset you’re buying. For example, …
You may know that you want to start an online business, but you don’t know what the focus of your business should be. This post has the steps for how to choose an online business to start based on your own financial goals, skills, and desired lifestyle. These are the things that I wish I …
If you’re concerned about having enough income to live comfortably in retirement, you may want to start one or more income streams beforehand but you’re not sure where to start. To choose the best income stream to start before retirement, consider your desired income, eventual capital gain, acceptable risk and lifestyle. It’s easy to get …
The Best Income Stream to Start Before Retirement Read More »
You may be thinking of transitioning from growth to income investing before retirement. The pros and cons of income investing are outlined in this post based on what I’ve learned from almost 40 years of investing in stocks and bonds with a focus on more alternative income investing for the past 15 years. While I’m …
Covered calls can be an excellent way to increase income from stocks but like all investments, covered calls aren’t perfect. The problems with covered calls include stock market risk, company specific risk, high required capital, forfeiting of potential capital gains, taxes on call income, and ongoing management of unexercised options. It is my belief, however, …
In this time of low dividend yields, increasing stock income by selling call options on stocks you already own sounds pretty appealing to yield hungry investors. Are covered calls a good strategy? Covered calls can be an excellent income strategy for stock investors willing to forego capital gains above the strike price should the call …
A personal wealth plan lays the foundation for building wealth but many investors aren’t sure of the steps. Are you wondering how to create a wealth plan? The steps are clarifying your desired lifestyle, updating net worth to see if you’re currently on track to build the wealth you need to live how you want, …
The more income streams you have the better, right? This is not necessarily true. How many income streams should you have? It have depends on your goals, available time, types of income streams, available capital, taxes, demonstrated success, income reliability, and desired lifestyle. In this post I’ll share what I’ve learned in each of these …
How Many Income Streams Should You Have? [Videos] Read More »
Net worth tracks your wealth building progress so it’s important that your net worth be calculated accurately. Often there is confusion how home values affect net worth. Does your net worth include your home? It should include the current value of your home less any amount of debt you have on your home. There are …
Very deep down have you ever thought that you may cause your own financial problems? If you’re wondering how to rewire your brain for success, the steps are to own the current problem, identify the source of the problem, resolve your feelings about the problem, and choose to no longer live from the past. In …
How to Rewire Your Brain for Success – The Missing Step Read More »
It’s been said keeping wealth is harder than getting wealth. You may be wondering how to keep your wealth safe. Cyber security, mail fraud, bear markets, liabilities, leverage and lack of diversification all pose risk for your wealth. In this post, I’ll address 11 ways to help keep your wealth safe from each of these lurking …
Most advice for how to increase net worth is geared toward investors with decades to save and compound wealth in the stock market. If you’re an investor over 50, it could be too late for that strategy before retirement. But you can increase net worth by taking advantage of cycles in stocks or real estate, …
How to Increase Net Worth Before Retirement [Videos] Read More »
