Financially Simple

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October 21, 2017

Should You Purchase Gold in Your Portfolio

We’ve all heard and seen the “buy gold” advertisements on radio and television. Usually, a paid celebrity will talk about how “bad” the markets can be and then pitch a gold product. The question is, how much attention should we give to these ads? Is gold a good investment? They tell us if the stock market crashes, this is one investment that won’t go belly up. However, gold is always compared to stocks, not fixed incomes like bonds. When I hear someone considering gold, it seems they always go to the extreme, ready to place all their money in gold. Investing all your money in any one commodity is always risky business. Opinions on the yellow metal always vary. Some, like Warren Buffett, say it has no place in a modern portfolio. Meanwhile, others say it should be included. So what exactly should you do? Keep in mind gold doesn’t have any intrinsic value; it doesn’t pay a dividend. I want to stress here that I’m not talking about gold coins or other collectibles, like jewelry. I’m talking pure gold bullion. The best way to make a decision on investing in something like gold is to look at history. According […]
October 20, 2017
Tax Triangle

What is a Tax Triangle and Why Does it Matter

The Tax Triangle – a concept I utilize with our clients that we work with for years and years and years, But what is a Tax Triangle? It is a concept I use to illustrate where to position our money today so that we end up with the most favorable income coming to us in retirement…for tax purposes. Tax-Free Accounts So there’s a triangle I use for positioning accounts for tax purposes. At the pinnacle of this triangle is the tax-free earnings. These are my absolute favorites. I mean really, who doesn’t love tax-free money? The idea is that we place money into these accounts and it grows, and it does so tax-free! So the idea is that in the future when we use it, we won’t have to pay taxes on the earnings. These accounts are: Roth IRA Roth 401k Health Savings Accounts 529 Plans/Educational Savings Accounts Cash Value Life Insurance (No really tax free but can be…This one is special)  Tax-Deferred Accounts Now the next point on the triangle is what is called tax-deferred. These accounts are where you invest money, and it grows, tax-deferred. So in other words, you do not pay taxes on it until you use the […]
October 19, 2017

The Black Monday Stock Market Crash: 30 Years Later

If you’ve ever had the ‘Monday Blues’, then you know they can be hard to beat. That feeling of dread and anxiety that carries into returning from your weekend. However, you probably conquer all by the end of the day and are ready to tackle the rest of the work week. That is unless you ended up starting the week off like stockbrokers did on Monday, October 19th, 1987. The Black Monday Stock Market Crash brought about some serious ‘Monday Blues’ for investors 30 years ago. That particular Monday was like no other for stock traders and investors. The DOW Jones Industrial plummeted by 508 points. Meanwhile, the S&P 500 dropped 20%. Imagine the gut-wrenching feeling investors experienced as they watched the market spin out of control, only to see the crash halt itself the very next day. What makes Black Monday, such of historic significance is the damage it brought about to the global economy. By the end of October 1987, most major exchanges had crashed, dropping more than 20%. However, despite all its panic-stricken lessons, many investors today still struggle with the question of market timing. It seems that right now I get asked almost daily, “Justin should […]
October 17, 2017

Be Wary of Unsolicited Calls from the IRS

Taxpayers who get an unexpected or unsolicited phone call from the IRS should be wary – it’s probably a scam. Phone calls continue to be one of the most common ways that thieves try to get taxpayers to provide personal information. These scammers then use that information to gain access to the victim’s bank or other accounts. When a taxpayer answers the phone, it might be a recording or an actual person claiming to be from the IRS. Sometimes the scammer tells the taxpayer they owe money and must pay right away. They might also say the person has a refund waiting, and then they ask for bank account information over the phone. Taxpayers should not take the bait and fall for this trick. Here are several tips that will help taxpayers avoid becoming a scam victim. The real IRS will not: Call to demand immediate payment Call someone if they owe taxes without first sending a bill in the mail Demand tax payment and not allow the taxpayer to question or appeal the amount owed Require that someone pay their taxes a certain way, such as with a prepaid debit card Ask for credit or debit card numbers over the phone Threaten to bring in […]
October 16, 2017

How To Be A Better Investor Than The Experts

If you watch any of the so-called financial experts on TV, then you know their market predictions are always spot on, right? Think again. I watched a financial guru take to the airwaves touting his phenomenal record of correctly predicting market returns over the last 10 years. He suggested 2017 is the year to top all others with historic gains, even going as far as predicting the DOW will hit 21,000, which it has at this point. As the host began taking viewer phone calls, his answer to a viewer’s questions showed his accuracy wasn’t as good as he’d initially suggested. A caller asked how often the expert nailed returns over the last 10 years. His response: In 2008, 2014 and 2015. The viewer then said, “So in the last 10 years, you’ve been right three times.” This led the pundit to claim it’s about knowing when and how to call the markets. Basically, this guy was right 30% of the time in the last 10 years. You’d actually have a better chance of winning a coin toss or predicting the sex of a baby than listening to him. Here’s what we know for sure about investing in the markets: Had […]
October 16, 2017

Asset Allocation: How Should I Invest Today to Prepare for Tomorrow?

When looking at the world around us, it’s hard not to question where the best place to invest your money is. Every 24-hour news cycle is filled with doom and gloom from one end of the earth to the other on any given day. In just the past couple of months we’ve seen, several major hurricanes consistently popping up; massive wildfires engulfing the western half of the United States. The shooting massacre of Las Vegas claiming several dozen lives. Globally, we are battling countries threatening to exit the European Union. We have countries talking about default. Then there is Venezuela dealing with hyperinflation to the point that their citizens are literally starving to death. Terrorism is an ever constant threat. On top of all that, we have this crazy North Korean crisis that could possibly catapult the world into World War III. Everywhere we turn something is happening. Then on the financial side, we have markets hitting all-time highs. Several companies are racing to be the first trillion dollar company. Everyone wants to know, will it be Amazon? Will it be Facebook? How close is IBM or Microsoft? We are in our ninth year of this current bull market with […]
October 14, 2017

Seven Mistakes that Cost Financial Advisors Clients

Financial advisors are a dime a dozen. You can find just about any flavor of advice you’re looking for and at almost any price point as well. So how exactly do you drown out the noise and find one to meet your needs? I put together a few tale-tell signs that an advisor might not be the right fit for you. These are the seven mistakes that cost financial advisors clients. 1. Lack of communication The average financial advisor is pushing to serve over 500 clients. At our company, Heritage Investors, we pride ourselves on being an exclusive boutique firm—meaning each advisor works with about 50 clients. Why would we limit ourselves that way? It is simple. We aren’t trying to be all things to all people. We want to be all things to a select few people. If you’ve ever heard of the “Dunbar Number,” then you know the number of individuals a person truly connects with tops out at around 150. So if you’re working with a stockbroker in a transactional environment, it’s very possible they are working with 500 or more clients. If that’s the case, then they likely aren’t connecting with you the way you want. That means they’re probably […]
October 13, 2017
when will the bear come out of hibernation

The Market is High But Should We Still Buy

We’ve all heard the old adage, what goes up must come down. Attributed to Sir Isaac Newton, who is accredited with discovering the law of gravity, the proverb means just what it says. What does that have to do with a financial blog? Everything—especially with a bull market that is hitting all-time highs. At some point, the market will pull back as well. Knowing that the market could drop may make you a little leery of jumping in and investing. However, investing now could increase your liquid net worth and here is how. In a recent meeting with a prospective client, they expressed concerns about a market correction. Point blank they asked, “Justin wouldn’t I be better off to stay in cash position and just make just 1% until the markets crash? Then I could take my money and buy in, right?” This is actually an excellent question. It’s a question I myself have asked. Paul Tudor Jones once said, “I learned that even though markets look their very best when they are setting new highs, that is often the best time to sell.” What he is saying is, that when you look at the markets which often go up […]