December 16, 2017

Items in italics are direct quotes from the articles below

https://www.marketwatch.com/story/the-inventor-of-the-401k-says-he-created-a-monster-2016-05-16

Most religious men find the answers to their prayers in scripture. Ted Benna found them in the U.S. tax code. Fed up with clients only interested in getting the maximum tax break for themselves while doing as little as possible for their employees, he began to feel he could either remain a workplace benefits consultant or a Christian, but not both. In fact, just weeks before his life’s eureka moment came in September 1980, he thought about leaving the Johnson Companies, his suburban Philadelphia firm, to take a job at a local Christian college. Instead of quitting, Benna, 74, helped turn a little-noticed new subsection of the tax code into the least likely of household names: the 401(k). With a 401k you can put aside pre-tax earnings with a company match up to a certain percentage into a retirement account. This retirement account is managed by a financial services company that will invest your money into the stock, and bond market and overtime build your retirement. This process would replace the typical pension plans that companiess had used for years, and put the financial responsibility on the employee to take care of their retirement. In fact, the original purpose of section 401(k) was to limit the use of executive cash-deferred plans. The Johnson Cos. administered 50 401(k)s in 1982, mostly to its own employees. Today Americans have some 50 million plans holding roughly $3 trillion in assets. Benna’s firm earned its money on the record keeping for the plans (with the help of a $65,000 Wang computer), but outsourced the actual investing component to the Vanguard Group, back when the future mutual-fund giant was still in its nascent days. “Ted was the moral standard within the company and thought it was a conflict for us to also handle the investments,” Wright said. “He believed in doing the right thing.” But like many critics, in recent years he began to think 401(k)s might not be the right thing. He’d created “a monster” that should be “blown up,” Benna lamented in 2011. The 401k plans themselves have grown so complicated. They’re filled with hidden fees, and have so many opportunities for bad decisions that the financial industry benefits more than the savers. “For all its issues, the 401(k)’s biggest value is that it turns spenders into savers,” he said. “Not that I spend much time basking the glory of the 401(k). What matters most to me now is spending time with my grandchildren and my horses.” I think that this forced process of making spenders into savers by the government can be risky, and there needs to be a re-examination of what components are missing from the public education system. Financial education is topic that should be, but isn’t often talked about in homes. In my profession, I see a lot of people that don’t understand the importance of managing credit and risk. I believe a person should look to build multiple streams of income, and not be 100% dependent on their job and the government to take care of them. It’s about taking personal responsibility and learning, and not just handing your money over to someone.  Personally I do have a 401k, but I also look for opportunities to build my income producing asset column, and fight to lower my own consumer debt. I do these things with two things in mind: legacy and eternity. What’s your why?

https://www.inc.com/jessica-stillman/use-self-made-billionaire-ray-dalios-2-minute-rule-to-radically-improve-your-meetings.html

Why do so many of us hate meetings? There’s no shortage of reasons, from wasting time in entirely unnecessary get togethers, to overlong scheduling, and meandering conversations. But somewhere towards the top of nearly everyone’s meeting pet peeve list is oafish meeting behavior. I’m sure you’ve experienced the type of thing I’m talking about – the spotlight hogging, endless interrupting, and under informed bloviating that can make getting together with colleagues about as much fun as watching paint dry. So how do you ensure everyone gets a turn to speak, but that the loudest of the group don’t monopolize the meeting and drown out other good ideas? Ray Dalio, founder of $160 billion hedge fund Bridgewater Associates and self-made billionaire, has a simple rule that can ensure everyone gets their time in the spotlight. On the TED Ideas blog recently Dalio shared nine rules for meetings from his new book Principles: Life and Work . The entire post is definitely worth a read if your organization struggles to keep meetings under control, but one idea stands out as both exceptionally useful and dead simple. Dalio calls it “the two-minute rule”:

The two-minute rule specifies that you have to give someone that uninterrupted period to explain their thinking before jumping in with your own. This ensures everyone has time to fully crystallize and communicate their thoughts without worrying they will be misunderstood or drowned out by a louder voice

This concept isn’t new, and it was instilled in us at an early age. But these two minutes of freedom will allow a person to express his thoughts without interruption. You may need to enforce this time constraint, but make sure you know your team knows this constraint is in force going in. if you’re in leadership/management role, give it a try and see if it changes your work environment. The purpose is to ultimately bring the team together, and find the areas that can be improved together.

This week, I’ve included The 13 Truths – Matthew McConaughey [MOTIVATIONAL SPEECH] from the Mulligan Brothers YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.”

Proverbs 28:26 MSG

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January 25, 2017

http://www.investopedia.com/articles/retirement/08/retire-millionaire-million-dollars.asp

Having a million-dollar portfolio is a retirement dream for many people. Making that dream come true requires some serious effort. While success is never a sure thing, the 10 steps outlined below will go a long way toward helping you achieve your objective. The steps are: set the goal, start saving, get aggressive, prepare for rainy days, save more, watch your spending, monitor your portfolio, max out your options, catch-up contributions, and have patience. Briefly I’ll highlight some points that author made. Savings can be started by taking advantage of your company’s 401k plan, or even something as simple as an Acorns account. Be sure to save if you want to build your way to being a millionaire. If you are constantly spending as much as you make, then you won’t have anything to set aside for when you stop working. It’s also important to have a strategy when it comes to asset-allocation. As time passes you want to set aside more to save. Take advantage of tax deferred savings plans to set aside income that won’t be taxed. An important thing to remember is to monitor and re-balance your portfolio. Finally, the power of compounding takes time so be patient and consistent. If you’re interested in having your own account that will build your wealth for you, then click on the following link:

https://acorns.com/invite/PE7WB6

Retirement might seem far away, but when it arrives nobody ever complains about having too much money. Some people even question whether a million dollars is enough. That said, with lots of planning and discipline, you can reach your retirement goals and live a comfortable life after work.

http://www.investopedia.com/advisor-network/articles/011317/rough-guide-your-future-retirement-needs/

Friends and family often ask me how much savings they need in order to retire. While I am more than happy to talk in generalities, I try to steer away from giving any specifics when I don’t have all the facts. Without a complete view of their financial picture, it would not only be impossible but also irresponsible of me to answer their questions. Unfortunately, more often than not, before I have a chance to respond, they hastily begin shouting out numbers. “Do I need half a million? One million?” Typically this leads to me awkwardly trying to explain that the solution isn’t that simple and ethically I really shouldn’t answer their question. This response is usually met with a bewildered look and the inevitable “So you’re saying that’s not enough?” (Heavy sigh) At this point, I coyly suggest that if they really want to know the answer they should become a client. (For related reading, see: 10 Habits of the Healthy, Wealthy & Wise.) In an effort to provide friends and family with some guidance (and to quell the family banter), I have devised a quick back of the envelope calculation to give a ballpark estimate of how much savings one needs to retire. The calculation is rather easy to complete but does require some preliminary information before you can get started. I have included a list of the necessary data as well as a simple worksheet that will walk you through this approach. Please bear in mind that this is a rudimentary calculation that won’t give you an exact figure, but it can be used as a reality check to see if you are on target to retire comfortably.

Here’s the information that the author recommends that you’ll need:

A pay statement, federal and state tax returns, social security statement, pension statement, and estimate of any other income you may receive in retirement. The author presents a scenario for analysis. In this scenario, the author examines ten line descriptions: net pay, number of pay periods, basic annual income needs, taxes, medical expenses, total annual income needed, retirement income (social security, pension, etc.), annual income needed from savings, multiplier, and savings required. Understand that this scenario is a static model, and doesn’t consider the fluctuations of life. Also, keep in mind that this model doesn’t replace income producing assets. If your passive income is greater than your expenses, then you are wealthy.

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included Money Doesn’t Buy Happiness, But It Is… – Motivational Video from the Endless Motivation YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs
28:26 MSG‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬