August 28, 2017

How a Business Owner can Growth Net Worth fast! Compound Interest: The Power Behind It

One of my all-time favorite quotes is the one about compound interest that’s attributed to Albert Einstien. “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it.” You will probably see that quote a million more times on my blog because it is one of the truest concepts ever! Sadly too many fail to understand and grasp it. Here’s an example to help you recognize the importance of compound interest if you don’t. The Choice If I offered you $5000.00 of cold hard cash or a magic penny that doubles every day for 31 days, which would you choose? Most people will choose the $5,000 because we simply want that instant gratification. Here’s the thing a penny doubled every day for 31 days is just over $10 MILLION! HOLY COW BATMAN!!  That’s a lot of money.  On day 10 your penny is only worth a measly $5.12. I get it! That doesn’t seem like much when you could have taken the $5000 and ran just nine days earlier. However, if you hold out until day 20 on the penny, then you have just over $5241.00. You would finally come out better […]
July 29, 2017
Debt Reduction

Pay my Mortgage Debt or Invest? Which Should I Do?

The thought of being debt free sounds like a dream come true for most of us. Many folks are wrapped up in credit card debt, car payments, mortgage payments, etc. However, there’s one debt that freeing yourself from could do more harm than good, from a mathematical standpoint. That is your mortgage debt. Honestly, it’s often not a good idea to pay it off or even pay extra on it before age 50. I know individuals in their 30s who received big inheritances, went out and paid cash for a house to avoid a mortgage payment. To them, it was a good idea. I also know individuals that decided they wanted to pay their home off as fast as possible. As a matter of fact, I have some friends that are also clients that ended up in this exact scenario. They bought a house in another state during the downturn of the market. Recently, they sold it and made $100k, to which they planned to pay off the mortgage on their current home making them debt free. I said to him, “You know that sounds good and I understand, but you‘re dealing with about a million dollar decision right now. […]
June 7, 2017
reasons you don't need an annuity

Reasons You Don’t Need an Annuity

In the world of finance, advisors are sometimes scolded for selling annuities. Dave Ramsey is especially popular for doing this. While I agree that annuities aren’t always the best option for every individual, there is a time and place for everything. When you’re trying to keep expenses to the client as cheap as possible, achieve an overall comprehensive plan, which includes everything, their asset protection, savings, investments, taxes, etc., an annuity considered holistically may not be the best recourse. However, I have used annuities for clients. So what are some reasons you don’t need an annuity? Reasons you don’t need an annuity The first is that you are smart enough to control your own money. You don’t have to allow annuity companies to manage it for you. Sometimes better investment tools exist, like mutual funds or exchange-traded funds. Even if you know nothing about investing you can typically invest money with a broker for cheaper than you can invest in an annuity. Another reason why an annuity might not be the best selection is, the fees are typically extremely high. While you may think they don’t cost you, there are several things you need to consider. How much is the surrender […]
May 24, 2017
liquid net worth matters

Liquid Net Worth Matters and Why

Finance is a multifaceted subject. It cuts across various aspects of human life and at certain times knocks the wind right out of us. For instance, today as I met with a client, we considered how to calculate liquid net worth. Yeah, I know liquid net worth doesn’t garner the attention that net worth alone does. However, both calculations have their place in your finances. So I’m going to share a little about why liquid net worth matters and how you can figure yours out. If you’ve never heard the term liquid net worth, then perhaps you are wondering what the difference between the two is anyway.  The difference is probably simpler than you think. Liquid net worth is more in depth than just net worth. With so many of us struggling to keep up with money as it is, let me explain in a little more detail. Imagine you walk into a bank, and the teller asks, “What is your liquid net worth?” Perhaps you look lost because you never took the time to figure it all up. (In case you don’t know what net worth is—it’s basically, all of your assets minus all your liabilities.) Or maybe you quickly […]