Articles - Page 2 of 3

23Jun 2020 by Martin@FIgoals.com No Comments

Is Social Security Racist?

Money Mindset

Social Security is a program designed to take care of you during retirement but has it ever dawned on you that it may be racially biased? Disclosure This article will take a little departure from my usual pure financial planning advice. Politics and race are involved, so if either type of discussion makes you cringe please just read the next paragraph and you’ll get the gist of it. While I do have strong political views as a libertarian, the point of this post is not to insert my own political ideology. Rather, the point is to just talk about an issue I see that I don’t see anyone else talking about. Every person reading this will have an opinion based on their own political beliefs, and that’s fine! Just make sure you respect the fact…

14Jun 2020 by Martin@FIgoals.com No Comments

ETF or Mutual Fund – Which is Better?

Investing

Most people are familiar with mutual funds because they’ve been around longer and are available in everyone’s 401K’s. Exchange Traded Funds (ETFs) are similar to mutual funds but have powerful advantages. Mutual funds and ETFs They both invest in an underlying group of securities that offer easy diversification. You only need to own a few funds for complete diversification because each fund owns dozens, or even hundreds, of individual holdings. They can be broad-based like a total stock index or specialized, only focusing on biotech, small cap growth, or even a specific country. All in all, mutual funds and ETFs serve the same purpose in your investment strategy. So why would you choose one over the other? ETFs have some advantages your average investor either takes for granted or doesn’t know about. An obvious…

04Jun 2020 by Martin@FIgoals.com No Comments

The Secret to Using Debt the Right Way

Budgeting, Money Mindset

Debt can be a tool used to improve your life but if it’s not used smartly debt could ruin you financially instead. We’ll first take a look at what debt is and how it can be used. We’ll then dive into the secret of using debt to your advantage. It’s easier than you think. What is debt? In its most basic form, debt is borrowing money from someone now and paying them back later. The person lending you the money will want something in return for the risk they are taking. What risk? There’s a chance you may not pay them back! So, you have to agree to pay them back the original amount plus a little extra called interest. The amount of interest will be tied to how much risk the lender thinks they are taking…

26May 2020 by Martin@FIgoals.com No Comments

Target-Date Funds Aren’t Smart, They’re Lazy

Investing

Target-date funds may seem like a smart way to invest without having to think about it again but there are some serious drawbacks you should consider. Do you know of any good results that come from being lazy? I can’t really think of a single one. Hard work will yield some results. Working smart will yield even better results. But being lazy has never led to results you can be proud of. So why do advisors and financial “gurus” keep recommending target-date funds? They’re sub-optimal, and it’s very easy to get much better results. Do they really think that the average person trying to save is so stupid that they can’t pick three funds rather than one? A three-fund portfolio (link), while still not optimal, is far better. Target-date fund fees are all over the place. Why…

10May 2020 by Martin@FIgoals.com No Comments

“Sell in May and Go Away”? May-be not.

Investing

"Sell in May and go away" is an often repeated saying that most people assume has some truth to it. After diving deeper into the theory, it might be a dangerous saying for people to follow. Is this the path to alpha? I received a call the other day from a client that caught me off-guard and made me laugh. Amidst the current corona-virus climate, the vast majority of calls have been people panicking and needing to be talked some sense into, and those seeing a huge buying opportunity and tempering those looking to go 100% equity. This call was different, though. The client asked if he should sell everything now and get back in after the summer. "Sell in May and go away". I laughed. And then I realized he was serious. I explained to…

03May 2020 by Martin@FIgoals.com No Comments

Stock Investing Made Easy

Investing, Money Mindset

Remember that investing is taking ownership in a company. Let that drive your long-term strategy. Every investor has a strategy. In general terms, you could be a ‘growth’ or ‘value’ investor. You could read a book by Joel Greenblatt and swear by his analysis and logic. Your neighbor over the hedge can probably tell you some secret formula for picking amazing stocks. You might not even think you have a strategy; in that case, your strategy is to randomly pick your investments. Remember this one thing no matter what your strategy is - owning stock in a company is owning a tiny portion of that company. A lot of people lose sight of this since they focus on stock prices, momentum, technicals, fundamentals, ratios divided by other ratios, if the wind blows from the west…

27Apr 2020 by Martin@FIgoals.com No Comments

PSA: Covid-19 Unemployment is NOT 30 Million

PSA's

You've probably seen articles where all jobs created since the great recession have been destroyed. Current unemployment numbers aren't as bad as they seem, though, because the current numbers are artificially inflated: 1) The most obvious reason - we voluntarily shut down the economy! What did people expect? Joe's Pizza Place didn't just decide it couldn't afford to pay its employees and fire them. Customers didn't just decide they didn't like Joe's pizza anymore. Once covid19 is past us, Joe's business will be back to full power. Maybe not 100% the day the stay-at-home orders are lifted, but it will get there. 2) The less obvious reason - the government adjusted the unemployment formula which makes unemployment more attractive than working. Instead of unemployment aiming to give 40% of their previous earnings, it now gives 40%…

02Apr 2020 by Martin@FIgoals.com No Comments

What are Dividends in Stocks?

Investing

Dividends are one way a company rewards its shareholders. They can also be the basis for powerful investment strategies. You see a lot of talk on this site about dividends. Well, what are dividends? I take it for granted that everyone knows the ins and outs of what dividends are. So let’s zero in on this fundamental concept of investing. It’s something I focus on a lot in my investing and want you to share the same depth of knowledge and love for dividends! What is a dividend? In its simplest form, dividends are how corporations share their profits with the owners of the company. That’s right - if you own a share of stock, you a part-owner of that company. It might not feel like it since you’re not making day-to-day decisions for the…

04Mar 2020 by Martin@FIgoals.com No Comments

The 4% Safe Withdrawal Rate Is Safer Than You Think

Income, Investing

Knowing the sources of your income makes a big difference in safe withdrawal rates. What's the 4% safe withdrawal rate rule? Various economists and financial analysts have studied what would be a safe withdrawal rate in retirement based on past data. They would look at the returns of stocks and bonds for each year from 1926 to 1994 (or whatever time period they had access to). They would plug in different return rates over a thirty-year time period (a typical retirement). The results showed there was no period that would deplete the portfolio with a 4% withdrawal rate. It became a very easy rule of thumb to go by. You could then calculate your retirement needs something like this: I need $40,000 a year to live on so I need…

04Mar 2020 by Martin@FIgoals.com No Comments

How to Hire a Great Financial Advisor

Money Mindset

Not all advisors fall under the real fiduciary rule What qualities should you look for when hiring a great financial advisor? There are a few terms you should always be on the lookout for when hiring a financial advisor. 'Fiduciary' is one. 'Fee-only' is another. Let's go over what those actually mean, along with a few other qualities to look for. Fiduciary: This means putting a client's interests ahead of your own. The advisor's thought process should be: how does this help my client, rather than how does this help me. An example is choosing the best technology fund rather than the technology fund that gives a kickback to the advisor. Fee-only: A fee-only advisor will have clear and transparent fees that you know upfront. This could be a flat…