Articles - FI Goals

06Sep 2021 by Martin@FIgoals.com

The Four Laws of Personal Finance

Money Mindset

Keep these four laws of personal finance in mind when making any financial decision and you'll set yourself up for success! When trying to reach financial independence, you can save every penny you possibly can, or you can not worry about your daily latte spending while you focus on the big three expenses. There are lots of different ways to set up a budget, track your investments, or plan your retirement withdrawal strategy. You can invest in rental real estate or set up other lines of passive income. No matter how you set up your journey to financial independence, I believe there are four main laws you need to always keep at the forefront of your mind. These rules are general in nature; this allows you to adjust and apply them to your…

02May 2021 by Martin@FIgoals.com No Comments

A High-Yield Portfolio’s Worst Nightmare

Income, Investing

The ultimate 'Sequence of Return' stress test to start your retirement. How did a high-yield, high-distribution retirement portfolio hold up during the pandemic, market meltdown, and economic shutdown of 2020? Despite naysayers saying a 7% withdrawal rate will never succeed, it just did during the ultimate stress-test. A year ago, I wrote an article titled “EARLY RETIREMENT: YOU CAN RETIRE 31% EARLIER”. I then showed the math on how a 7% withdrawal rate would allow you to reach your financial independence number 31% faster than a typical 4% withdrawal rate. It was a shot across the bow of all the people claiming you had to withdraw less than 4% to be safe during a prolonged retirement. My argument: the source of the distributions is a major factor and they had left it…

18Feb 2021 by Martin@FIgoals.com

Should You Pay Off Your Mortgage Early?

Budgeting, Money Mindset

Paying off your mortgage as fast as possible is a popular personal finance mantra - but should you pay off your mortgage early? In a previous article we explored buying a home versus renting and investing the difference. We're now assuming you ran the numbers and decided buying is best for you. On to the next question - should you pay off your mortgage early or invest the extra money? One of the most often asked questions from our clients is what should they do with extra money? Almost all of them think paying down their mortgage is a good idea. Their thought process goes something like this: once it's paid off, I'll be able to put more away each month and end up with more overall. A) No, you'll…

12Dec 2020 by Martin@FIgoals.com

Which is Better – Buying a Home or Renting?

Budgeting, Money Mindset

Buying a home has long been considered a smart move to build wealth but is it always the best use of your money or could renting be better? Is buying a home really the best use of your money? If you’ve ever bought life insurance, you’re probably aware the big decision is between whole and term policies. Whole life is much more expensive but you’ll be told there’s an investment portion to it that will grow and always be available no matter how long you live. Others will tell you to buy the cheaper term life policy and invest the difference in premiums in the stock market. Buying a home versus renting a home is a very similar concept to the life insurance decision. You can either commit a large sum to a…

15Nov 2020 by Martin@FIgoals.com

Your home as an investment… worth it?

Budgeting, Money Mindset

Wondering how much your home will appreciate in value? Let's take a look at historical data and see what that tells us about future home prices. There are many thoughts and emotions going through your mind when you purchase a new home. You picture your children growing up and playing in the backyard. You mentally decorate each room before you’ve ever moved in. You imagine all of the great times with friends and family you’ll have in the home. Maybe you even think about how much the home will increase in value; will this property make you rich? There’s a prevailing sentiment that purchasing a home is a great investment no matter what. “Real estate always goes up!” someone will always say. You would think 2008-2009 tampered that enthusiasm but home prices are already higher than…

08Nov 2020 by Martin@FIgoals.com

Inflation Will Crush Your Financial Plan

Income, Investing

How does inflation affect your financial plan? Inflation is something that's easy to understand but your financial plan could fall apart before you realize if you don't account for it. Don't let inflation crush you! Have you ever heard of the term purchasing power? It means you can buy the same basket of goods year after year even though inflation makes those goods more expensive over time. Your investment portfolio value must increase by the same amount as inflation to maintain your purchasing power. If you withdraw 5% each year and inflation is 2%, your portfolio should be returning around 7% each year to maintain your purchasing power. Let’s take a look at Frank. He put together a financial plan and is looking to retire early. He expects a 4% withdrawal rate…

22Oct 2020 by Martin@FIgoals.com

Closed-End Funds – The Ultimate Guide

Income, Investing, Top Posts

Closed-end funds can give your retirement income a boost through managed distributions in an environment where the fund managers can stick to long-term strategies. This ultimate guide to closed-end funds provides all of the knowledge and resources needed to start investing in CEFs. Article Outline: How closed-end funds differ from mutual funds and ETFsUnique attributes of closed-end fundsWhat is included in fund distributionsA deeper dive into return of capitalRules for buying closed-end fundsThe risks associated with closed-end funds Your introduction to closed-end funds Closed-end funds are the lesser-known cousins of the mutual funds you know and love. You see, there are two different categories of mutual funds: open-end funds and closed-end funds. Open-end funds are the typical mutual fund you are familiar with in your 401k. Closed-end funds are a tiny portion of the…

01Aug 2020 by Martin@FIgoals.com No Comments

The Best Investment You Can Make Right Now!

Budgeting, Money Mindset

Taking care of your physical and mental health will let you enjoy a longer, more fulfilling retirement. It will also improve your financial freedom, possibly allowing you to retire early. Have you ever heard the phrase “The best time to plant a tree was twenty years ago. The second best time is right now.” You can’t do anything about not getting started in the past but you do control getting started right now. It’s a great reminder that no matter how long you’ve put something off for, you can still start implementing that incredible new habit right now and reap the benefits. The same holds true for your finances. If you’ve never put anything away for retirement, right now is the best time to get started. Not tomorrow or next year. Right now! Your physical and mental…

21Jul 2020 by Martin@FIgoals.com No Comments

Best Withdrawal Strategy for Inherited IRAs Under the New Secure Act

Budgeting, Income, Top Posts

Googling the topic of inherited IRAs brings up a lot of articles outlining the new rules. There is very little outlining the best way to approach the withdrawals, though. This article rectifies that with the easy “Years Remaining” strategy that will maximize the amount of the beneficiary IRA you get to keep in the long-run. What happened? The SECURE Act changed how long non-spouse beneficiaries of IRAs have to withdraw the money and it makes a big difference in your retirement planning. The SECURE act stands for Setting Every Community Up for Retirement Enhancement. (Congress loves their acronyms, don’t they?). It was signed into law on December 20, 2019, and takes effect for any IRA inherited January 1, 2020, or later. Prior to the SECURE Act, IRA beneficiaries could take advantage of a feature…

07Jul 2020 by Martin@FIgoals.com No Comments

PSA: Brokerage Firms Went to Zero Commissions and You Shouldn’t Care!

PSA's

We all know brokerage firms have been in a race to zero commission fees. Charles Schwab, TD Ameritrade, Fidelity, etc, have all been lowering their commission fees to attract (and keep) clients. One would say “every trade only costs $12.95!”, then the next would say, “no, our trades only cost $11.95!” Then $9.95, $7.95, $3.95… you get the picture. Well, Charles Schwab decided to peel off the band-aid faster buy going straight to zero commissions on any trades. Holy cow, that’s a great deal! Of course, the other brokerage firms followed suit. TD Ameritrade announced the very next day that they don’t have any commission fees either. All of their stocks got crushed on the announcements, too. Did they doom themselves to zero profits? Perhaps in the short-term, but long-term they’ll figure out how to charge other fees…