Recently Walter Wisniewski and Allie Vanaski sat down with Cheddar on the floor of the NYSE to share their advice on what you need to know before filing your taxes this year.
On December 27, Allison Vanaski sat down with Chuck Jaffe, senior columnist for MarketWatch and host of the Podcast MoneyLife, to talk about her new book, The Millionaire Within, the importance of financial planning for all ages and stages, and balancing life and work.
Your time has finally come. You spent your years since high school scraping by on ramen noodles and pulling all-nighters so that you could score that great job, right? Now you have paid your dues for a few years and the time has come for you to get a raise or a bonus. This is certainly a cause for celebration!
Rewarding your hard work with some new clothes, a night out on the town or possibly something bigger like a new car is okay, but don’t get too carried away. It is important, to maintain a sharp perspective on your cash flow and your goals when your income begins to increase.
Distraction from the media, uncertainty or volatility in the markets, or pressure to buy and sell from friends, colleagues, financial “gurus” and other less than reliable sources for investment advice can directly challenge an investor’s ability to make consistent, rational and logical investment decisions. The barrage of information coupled with some inherent behavioral biases can make long term investing a challenge for most people.
Behavioral Finance has been an academic area of study since the early 2000s when Daniel Kahneman, a psychology professor at Princeton University published research that demonstrated “repeated patterns of irrationality, inconsistency, and incompetence in the ways human beings arrive at decisions and choices when faced with uncertainty.” Dr. Kahneman’s findings won him the Nobel Prize in economics in 2002 and the research strongly suggests that investors will often make decisions based on their emotions rather than on logic and historical data, even if it is right in front of them.
Parents are a child’s first and most important teachers. Natural learning opportunities arise daily to teach children lessons in health, safety, manners and morals: eat your vegetables, don’t touch the hot stove, always say “please” and “thank you”, and treat others the way you wish to be treated. All are essential truisms for leading a productive and satisfying life. Just as learning and living these lessons will help forge a path to a successful and happy existence, instilling solid financial values early and often can set children on a healthy financial path and help avoid common but painful financial pitfalls later on in adulthood.
Teaching children the importance of prudent money management is a lesson that is sometimes neglected by even the most caring and astute parents. Among the many crucial lessons children learn at home from their parents, basic financial literacy is often overlooked. Sometimes parents skip this lesson because they themselves struggle with understanding core financial concepts. If parents, as natural family teachers, fail to take the lead by modeling unhealthy attitudes towards money and its true value, children may grow up gaining independence in every aspect of life except when it comes to their money. Achieving a certain level of financial independence is essential to being successful as an adult. Parents can attain much peace of mind by educating themselves on basic financial literacy and passing that knowledge down to their impressionable children.
In a perfect world, planning for retirement should be exciting (I can’t wait to retire early!), easy (automatic savings/contributions) and not stressful (I have so much money to save!)
In reality, thinking about retirement can make people feel very anxious. How much should I be saving? Will I have enough to live? Will I run out of money? Planning for the future can be very overwhelming and it can be difficult to picture how saving into an investment portfolio can actually provide an income for you when you are no longer working.
Many times, people don’t realize the importance of starting to save early on. The earlier you begin to save money for retirement, the more successful you will be. You will have saved more dollars, and you are giving it a longer time to grow and earn interest.
As we get older, the idea of no longer earning an income and receiving a paycheck is hard to comprehend. We’ve seen a lot of our clients fearful of making a mistake as they near retirement and they become very fearful of market declines. As you approach retirement, it is so important to discuss any concerns that arise with your trusted advisor.
As financial planners, we hope our clients can achieve a peaceful transition into retirement. Here are a few suggestions:
“Life is like a mirror, we get the best results when we smile!”
Looking directly into a mirror gives you one perspective of yourself. However, if you turn the mirror at a right angle to another you will discover several images of yourself. Some may appear distorted and backward, like in an amusement park fun house. Nevertheless, each one allows you to see yourself differently. Similarly, the choices available to us when making decisions with our money can appear to be hard to figure out as well. Like the right-angle mirror, we are forced to view our finances differently even though they are the same.
Whether you are a budding Millennial or an aging baby-boomer our attitude and behavior regarding money and the way we consume it is crucial.
It is not the strongest of the species that survives, nor the most intelligent. It is the one most adaptable to change.
How much should you save? How much should you spend in retirement? How much do you leave to your children? How little do you leave? What happens if some unforeseen event happens? Is your investment portfolio safe in case of a sudden change in the world economy?
I was traveling on family business to the Emerald City, Seattle, Washington. While there I visited the 605-foot tourist trodden tower called the Space Needle which was built to celebrate the 1962 World’s Fair. As I observed the enormous edifice from the base, it appeared to gaze in soulful benediction over the sprawling city. After I stepped into the elevator it swiftly lifted me to the top floor. As I exited the doors high above the city, I walked onto the deck of the brightly lit observation turret. The sun’s rays were so bright they seemed to kiss the expansive windows as the visitors inside enjoyed the spectacular views. Near a set of elevators, a teenage attendant with red streaked hair was talking excitedly to a group of eager tourists. He spoke about the substantial sturdiness of the structure and how it was riveted into a foundation of reinforced steel and cement that can withstand a 9.1 earthquake as measured on the Richter scale. He added that the materials in the design were not only strong but also very flexible. In case of a hurricane, the tower had the special design capability to sway back and forth on very windy days even with winds of 200 miles an hour! The elevator may have to slow down during these conditions, but the structure was built resilient enough to adjust for sudden changes in the forces of nature. I thought of the many modern buildings and physical structures built in this way to withstand the daily effects of nature and weather, including our human bodies. If they were not flexible like the Space Needle structure, they would also suffer the strains of daily living causing us discomfort and pain.
Recently Walter Wisniewski and Allie Vanaski sat down with Cheddar on the floor of the NYSE to discuss the impact of emotions on investing and how getting a handle on those emotions can lead you closer to the Millionaire Within you.
In a recent article, How To Keep Your Financial Resolutions In The New Year, published on New Year's Eve by Megan Gorman, Walter Wisniewski contributed to the conversation, “The secret to staying grateful is to stay in the present moment and appreciate everything we have and can control. Focusing on what we can control helps us feel safe and connected.”
In a recent article, Best IRA Account Providers, published in U.S. News and World Report on December 13, 2018, by Maryalene LaPonsie, Walter Wisniewski contributed his expertise to the discussion.
In a recent article, Money lessons from the ups and downs of 2018, Walter contributed his advice regarding estate planning and other retirement planning topics. Published onPublished on December 2, 2018, By Sheryl Nance-Nash.