Happy Valentine’s Day !

Valentine’s Day, a day that we express our love for each other. One of the things I realized growing up in the world was that you have to love yourself first before you can love another. Wise words that everyone knows and understands. Yet we can put so many things ahead of ourselves out of love and not realize that we are limiting our ability to give more in the future.

Yes, it is love when parents sacrifice their retirement plan for their children’s education, and it is love when careers vanish in order to take care of a sick child or parent.

Financially we can love ourselves by paying ourselves first. It is a basic concept in personal finance and one that so many of us still don’t practice. We pay the bills, and the kid’s education, and anything left becomes spending money or savings.
With this new year, consider reversing that trend. Pay yourself first. Commit to fully funding your 401K or put 10% of your gross income into savings. Do this on automatic deposit so it doesn’t cost you anything. Why? Because you want your money to be working for you right away. The power of compound interest is magic! Money growing at 6 percent per year will double in about 12 years, but it will be worth four times as much in 24 years.  Compound interest requires you to sacrifice today to reap a benefit tomorrow. The future reward will be greater than the sacrifice. For a detailed description of compound interest, check out the video here from Kahn Academy.
You will be surprised at what can happen. Most people don’t even notice that they have less money to spend but adjust their spending to whatever is left.

The upside is there is more for yourself and your family. More money for retirement, more money for the kid’s education, more money for vacation, and more money for taking a sabbatical.
We can all use a little more money…… pay yourself first, and watch the money pile up.

The post Happy Valentine’s Day- Now Love your Financial Self! first appeared on Whole Hearted Way.

Source: Morningstar

We can make a few observations about these data:

1. In all fund categories, investor returns lag fund returns. Why so? because investors tend to get in and out of a fund at the wrong time. They tend to chase past winners that are about to turn into losers.

2. The average lag by investors is 4.5% a year. That’s huge! Based on this data, in a decade, investors would make 45% less than the market would give them. (This is in fact what I try to help my clients avoid. My job is not to beat the market, but to capture all that the market gives.)

3. Investors tend to have less lags among boring categories, but more lags among exciting categories. For instance, the lag among Large Cap Value is only 0.4%, but among emerging market funds is 11.8%. This shows the most dangerous enemy of our financial well being is in fact our own emotion.

So how can we do better than the average investors?

At risk of sounding self-serving, I’d like to suggest using a fiduciary (fee only) financial advisor. Because such an advisor can help you stay on top of your personal finance without engage emotionally with your money.

Michael Zhuang is founder and principal of MZ Capital, a fee-only registered investment advisor firm located in the Greater Washington D.C. metropolitan area.

The post Investors Good At Hurting Themselves: Investor Returns vs Investment Returns first appeared on Whole Hearted Way.

We are told that we are all special and going to become president but we aren’t told that saving a few bucks every day will not make us millionaires but will make us a lot more comfortable than if we didn’t save. Don’t stress out for the top but be happy with the middle ground. It’s achievable with a few bucks every day.

Look back not forward because we can learn so much from our mistakes. Selling your gold jewelry to a what looked like a reputable firm only to find out after the fact that you paid a 30% commission. Mistakes like this teach us – buyer beware! Get fee disclosures and all the facts upfront.

Take action on what did work. I thought social media was for those GenX and Yers but now I get most of my clients through my social media marketing. I enjoy it and will continue to do it. Keep revising your goals. Times change. You change. Go with it. There is a tipping point where you must say- is this working for me or do I need to let this go? You don’t want to be the person who says after 30 years on the job that you should have left 20 years ago.

Track your progress. This is a reality check for me because the numbers don’t lie. You may think you are on track for a comfortable retirement but what does your calculation say? Tracking helps motivate and clear the path for you to keep plugging away.

Get good advice. There is a time to put the numbers aside and talk to someone or a lot of people. The best thing a mentor recommended to me was to get a personal “advisory board”. These were a combination of close friends and business associates that I trusted to tell it to me straight so that I could become not just a more successful business woman but also a better person in the world. Now I mentor others.

Keep these tips in mind when planning your new year, and celebrate your journey to success (before reaching success).

The post Why You Don’t Reach Goals And Why You Will This Year first appeared on Whole Hearted Way.

“Fern, can you get me 20% return on this money?”

Why did this so sad? Because here is a very intelligent guy with a great career and a good net worth and he doesn’t even have a clue as to what is a possible return with his money.

The S&P 500 Index is a the best gauge of the US equities market, and if you were to chart the returns of this index since its inception to now you will see that it has historically done 6.64%. Now that can be up or down from that –but that is our historical average.

His of getting a 20% return from our markets are about the same chance as getting hit by lightening. Of course, there are lots of commodities speculators, short sale traders, forex trader, and penny stock traders who will gladly tell him what he wants to hear. But they won’t tell him about the risk he needs to take to get that kind of return. They also won’t tell him that any money that he loses right now, he will have a slim chance of making that back now that he is much older. They also won’t ask him what other money is available to supplement his social security benefits.

Financial Illiteracy is widespread and that is why I publish Mindful Money Magazine. We all need to start learning more about how to manage our money and not rely on salespeople who don’t have our financial interests first. You can do this and I can help. Send me an email at fern@wholeheartedway.com and let me know what you need to make the right financial decisions.

Take advantage of FREE Financial advice by fee-only Financial Advisors, February 12. See here for more information. 

The post The 20% Return You Won’t Get first appeared on Whole Hearted Way.

I want to change the way you think about money! It’s hard to find the real truth in financial
information today and even harder to know whom to trust. That is about to change.

Among the key findings in the CFP Board (Consumer Federation of America Household
Financial Planning) survey are that people today are facing tough choices about how to allocate
more limited financial resources. “Saving enough money for future goals…while also
maintaining an adequate emergency fund and staying out of serious debt has always been a
challenge…Advances in technology have made accessing and analyzing financial information
much easier, however a lack of understanding about savings and investments options as well as
how to best manage household finances remains a serious obstacle to Americans financial
preparedness.”

55% of Americans say, “It’s hard for me to know who to trust for financial advice.”
Our financial planning articles are written by fee-only Financial Advisors and Certified Financial Planner licensees.

52% say, “Investing seems complicated.”
After every article, we have action tips in each financial planning category to make it easy for you.

55% say, “I’m worried about losing my money if I invest it.”
In each issue, there are proven tools and resources to help you make money, not lose it.

My meditation teacher told me that the mind is a powerful ally that helps us focus on what we
need to do: study, play sports, cook, save and invest, etc. Look for insightful articles from spiritual teachers on how to connect to and attract abundance in your life.

There are no ‘“Get Rick Quick!” schemes. This is about making the best of each dollar to support you and your family in what you want to do now and in the future. You will hear from financial psychologists who will offer advice on how to build healthy financial behaviors.

Let’s not forget the inspiring stories from people successful at getting out of debt, saving and investing.

Subscribe today by downloading the trial issue here Mindful Money

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enter 3free to get a 3 month free subscription.

I appreciate a review, and don’t forget to spread the wealth and share.

The post Putting Your Money Where It Matters- Mindfully first appeared on Whole Hearted Way.

I received this reader question recently and wanted to respond publicly:

“I would like to no more about this programs and does it really works? I have made a few investments on the stock exchange through information that i got from Penny Stocks newsletters but was unsuccessful. I want  more wealth but dont no how to start or what to begin with.”

This program is not something I made up or just discovered on my own. It is a well researched and verified process that Certified Financial Planner Licensees use if they practice comprehensive financial planning (which many do not). I have used it personally and in my financial planning practice and found that it works ALL the time if followed correctly. The problem is that many of you will not follow it. Why? Because it isn’t fast, it isn’t sexy, there are NO get rich quick schemes and NO, your life is going to change forever moments.  What it does is give you a road map to arrange your finances to support your current lifestyle and your projected lifestyle (and that means different things to different people). It means taking into consideration how you live, play, what your risk tolerance is, what your tax bracket is and a host of other details.

Where do you start? You start with a strong money foundation and that is following Step 1. to Step 3.

Step 1. Cash and Credit. Cash flow and credit is the life blood of your financial plan. Understanding how much you take in and how much you spend shouldn’t be a painful exercise but a motivator to work with what you got in the best way possible.

Step 2. Risk Management. Everything you acquire can be taken away in one full sweep (and I know you have seen it happen) without the proper insurance.  Getting the right insurance that fits your needs and your budget is a strong step in preserving what you are building on.

Step 3. Estate Planning. You are not building wealth just for you but for your family. A few easy legal documents can insure that they get what you have worked so hard to build and get it easily and without taxation. I have seen so much grief and family burden due to lack of a few simple estate planning documents.

Step 4 is Identify Goals. There is a saying that if you reach for nothing, that is what you will get. What does the future hold for you? Do you see yourself working part-time at age 50? Or would you like to not work at all at age 60? Or maybe you want to change careers or open up a small business? Maybe you would like to send your kids to a private college? Maybe you want to go back to school to learn a new trade? Perhaps you just want to get out of debt and start an investment plan? Whatever you want, that will cost money and you can figure out how to afford those things by goal setting. Unfortunately, it isn’t going to just happen one day. You are going to make it happen by planning for it. Now that you have a solid wealth foundation, you can begin to invest.

Step 5 Investment Planning.  There is nothing complex here.  You pick out (a process called asset allocation)  no-load mutual funds with a variety of asset classes and asset styles based on the return you want, the risk you are willing to take, and the taxes you are willing to pay. Once you have your allocation, it is set it and forget it time. Sorry, I just haven’t seen the research that market timing (darting in and out of investments) works but asset allocation does. You revisit this asset allocation once a year.

Step 6 Retirement Planning. Retirement planning is all about using  these wonderful tax deferred retirement plans (401K,403b,457,etc.) to help us build wealth to meet our goals. Let’s face reality folks. Even if you loved your job and will work everyday until you drop, there will be days,  months, or years during your lifetime that you cannot work. Then you should have your investments replace your earned income.

Step 7 Tax Planning.  I am all for getting the most bang for your buck and tax planning provides that in your wealth building program. For every dollar that you invest, if you can get ten cents to fifty cents back from the government, well why not do that?  That is why so many deferred compensation plans, IRAs, SEPS , etc.  are so popular. They provide a lot of bang for the buck. Don’t get greedy by wanting tax free everything but do take tax implications into every investment decision you do. The difference between 5% taxable and 5% tax free is huge if you are in a high tax bracket.

Those are the 7 steps to build wealth and I go into detail for each one. I have also given you  resources that I value to help you even more. There are links to get a free credit report, and links to fee-only Financial Advisors, and links to financial calculators.  If you aren’t the do-it-yourself type, I am always available to help mentor you through the steps. What is different about me, Wealth Coach Fern, is that I empower you with the information and the tools to build your own wealth program.

Why is that so important? Because studies have shown that most of you will follow through on a comprehensive financial plan if you “own” it. That is what attracted me so much to the coaching model. I want you to be successful and I can coach you through a complete personal financial plan. I have 30 years (gulp! I am old) experience in this field and very passionate about it. If there is any way I can make it easy or if you need more info on a topic, let me know. I want you to build wealth and wealth beyond money!

The post Does this Wealth Program Really Work? first appeared on Whole Hearted Way.

Most people don’t move until the last minute to finish their NUTS especially when they come to see me, a Wealth Coach. Time and money are the biggest obstacles that keep people from getting their finances in order. But not addressing your NUTS can drive you into the poor house.

Take for example, Mr A & Mrs. B, they couldn’t agree on what to do with their money and so did nothing . Mrs. B is worried that that they won’t have enough for retirement and Mr. A might lose his job and both worry about the rising costs of college tuition. They worried about their assets declining in value and talked about it and still did nothing. . Both have no idea of how much they spend annually and both haven’t had decent raises in years . They came to me wanting to fix their Nagging, Unfinished, Tasks. It took hourly phone calls every other week for nearly a year at a cost of $6,500 to take eliminate their financial N.U.T.s.. What happened over that time?

I started with a financial foundation-I got them an emergency savings account, updated estate plan, and a detailed review of all of their insurance. I taught them how to continually get the ideal rates on their cash and even with the cost of an estate planning attorney, they saved over $1500 .

I got them to blend their accounts together and specify them for goals; IRAs,  Roth IRAs, pensions, 529 college plans, 401ks,  brokerage statement, etc. I helped them prioritize their goals and agree on what they wanted to do with their money as far as inheritances. Aligning money with values and goals is just as important as investing. They now know how to manage their own portfolio as a unit for the purposes they intended. They also agreed on what they strategy they would use when things go south.

Mr. A understood that he couldn’t contribute to retirement and college education if he was out of a job for a long time and Mrs. B understood that she would need to cut back on expenses if she still wanted the family to take vacations every year. Both knew what each had to do to meet their goals.

How much did they save? Hard to say,  but at least $15,000, and the peace of mind- priceless.  But both are extremely pleased that they have a plan and they know how to implement it on their own . Waiting so long to fix their Nagging Unfinished Tasks is their only regret .

If this couple went to a financial advisor, they would have easily paid $10,000 or more and had ongoing fees and expenses and still worried about if they were doing the right thing. Now they are armed with the education, tools, and resources to stay on track. They took the time and actually saved money,saved on taxes, and decreased their stress. Can you place a price on that?

The post Have You Fixed Your Nagging, Unfinished Tasks (NUTS)? first appeared on Whole Hearted Way.

Here’s the deal – You purchase the ebook and write an honest review on Amazon of  what you got out of it and then send me an email or make a comment below that you have done so.

In return, I will spend 15 minutes on the phone with you about any personal finance dilemma you may have. Each review earns you 15 minutes with me so you can get a whole hour of time with me, a Certified Financial Planner for over 26 years experience,  for only 4 reviews.

The 401K First Aid Kit: Stop Your Portfolio Losses and Get Back to Financial Health

The 7 Secrets of the Wealthy

The Top 7 Tax Saving Tips

The 7 Worst Pieces of Financial Advice

What’s the catch? You must be a newsletter subscriber. It’s free and spam free, and you can unsubscribe at any time- so put your name and email address in the upper right box on the home page and you will qualify immediately.

I look forward to talking to you soon!

-Fern

The post Awesome New Ebooks to Help you be Wealthy first appeared on Whole Hearted Way.

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One of the first things I learned when I had a coaching client was that the client had to be coachable. I didn’t really understand that since everyone wants to make money, and who wouldn’t want a professional to help them understand how to save and invest?

But over the years, I realized that my mentors were right. When you are “ready” to receive the information that you need to create wealth, then the wealth building starts. What does it mean to be ready? Follow these characteristics and see if they apply to you:

1)      You are not healthy so you spend a lot of mental time worrying about your physical self that you have no time to think about how to arrange your money to support your lifestyle.

2)      You are so obsessed with work that relationships and taking care of yourself are not a priority and so your wealth building strategies become last on your to-do list.

3)      You want someone else to do it for you but you don’t have a clue on what to tell them to do. You think that by outsourcing all of your financial affairs, it will get taken care of and also make your wealthy.

4)      You blame your work, family, friends, and spouse for your lack of wealth. If only you weren’t married to a spender or if only you didn’t have kids, or if only your husband didn’t leave you, then you would be wealthy.

5)       You blame the economy, the president, the tax code, etc., for preventing you from achieving great wealth.

When you stop blaming anything and anyone on how you got into your situation and start to rouse your inner energy to make things happen, then wealth will start to happen for you. But you really have to let go of the past and the future and say, “How can I start right now to make a real difference in my financial picture?  How can I make the money I earn make money to support me?”

When you are ready to say that, then you are ready to work with me, Wealth Coach Fern CFP. I will be here- waiting for you. Because I believe in you and I can help you build a financial infrastructure to support the lifestyle that you want. The sky is the limit but the limitations are inward not outward. Are you ready? I am waiting for your call or your email.

The post 5 Reasons Why You Are Not Wealthy first appeared on Whole Hearted Way.