Minding Your Money 360 - Quick tips to manage your money for success

What's in your portfolio?

Today on the minute – what’s in your portfolio?

I got a question from Tammy and she said she was just starting to invest and she wanted to create a portfolio of investments but she wasn’t sure where to start.

Today on the minute – what’s in your portfolio?

I got a question from Tammy and she said she was just starting to invest and she wanted to create a portfolio of investments but she wasn’t sure where to start.

Well, Tammy a great place to start is with the basics. So let’s start at the beginning. There are only three basic categories of investments —cash, stocks, and bonds. So in building your portfolio, you will want to include something from each category. You don’t necessarily need to purchase these individually, you can purchase mutual funds or ETF (electronically traded funds) that will bundle one or more categories together. The amount of each that you hold in your portfolio will depend on your goals, your time frame and your risk tolerance level.

Briefly, cash investments can be accessed quickly with little or no loss of principal. They add liquidity and stability to your portfolio. Examples include money market accounts and funds as well as CDs, and Treasury bills.

Stocks represent equity or ownership in a company. Stocks are often classified by the size and/or type of company. Examples include: small cap stocks (companies with an aggregate value of less than $1 billion) and blue chip stocks (companies that are well established and have been around for a long time.

Finally, bonds are the equivalent of an IOU because when you buy bonds, you are loaning money to the government or a corporation. In return for your loan, you receive a fixed rate of interest, usually paid twice a year and when your bond matures, you get your original investment back. Bonds are rated based on the creditworthiness of the issuer. The lower the rating, the higher the return bondholders expect because they are taking on more risk.

While these brief descriptions are just the tip of the investment iceberg, keep in mind that you don’t need to know everything to start investing. So keep learning, but start investing while you are learning. Remember, experience is one of the very best teachers.

And that’s the minute for today. I love helping people with all aspects of their financial lives. If you have a question, send it to me at [email protected].

Thanks for listening and as always remember that minding your money really is the path to a richer life!

Are You Wired for Wealth?

Today on the minute – are you wired for wealth?

Klontz, Klontz and Kahler in their book, Wired for Wealth say that although the secret to achieving wealth can’t be distilled into a tidy one-size fits all formula, the truth is that people who are wealthy think and act...

Today on the minute – are you wired for wealth?

Klontz, Klontz and Kahler in their book, Wired for Wealth say that although the secret to achieving wealth can’t be distilled into a tidy one-size fits all formula, the truth is that people who are wealthy think and act differently than those who are not. One of the problems are the types of money scripts that we have running through our heads. Money scripts are thought, beliefs and attitudes that we have about money. With scripts that can keep you poor there is typically a grain of truth so we believe them. Money scripts such as “more money will make things better” or “I deserve to spend money” often do more harm than good.

Regardless of where you currently are they do believe though that you can rewire or change the scripts for better ones. Examples of money scripts that promote wealth include “it is important to save for a rainy day” and they felt that this belief alone explained 75% of the difference between those who are wealthy and those who are not.

Another money script to promote wealth is “giving money to others is something people should do. This is founded on the spiritual principle that you must give to receive. However, there is a caveat here, before you can give money to others, it must be yours – not borrowed money.

And, that’s the minute for today. I love helping people with all aspects of their financial lives. If you have a question, send it to me at [email protected].

Thanks for listening and as always remember that minding your money really is the path to a richer life!

Word of the Week: Rule of 72

It’s Friday and time for the Word of the Week! Our word this week is the Rule of 72.

I chose the Rule of 72 because it is a great tool to use to calculate how long it will take for a lump sum of money to double, or how long it will take for prices to double. To use the rule of 72 simply divide 72 by your rate of return.

It’s Friday and time for the Word of the Week! Our word this week is the Rule of 72.

I chose the Rule of 72 because it is a great tool to use to calculate how long it will take for a lump sum of money to double, or how long it will take for prices to double. To use the rule of 72 simply divide 72 by your rate of return.

Here’s an example:

Two investors, age 42, have $20,000 to invest. Investor A uses a 9% rate of return in estimating the growth of her money, while Investor B uses a 6% rate of return. Using the rule of 72, Investor A’s lump sum will double every 8 years (72 divided by 9), while Investor B’s lump sum will double every 12 years (72 divided by 6).

And, the same is true for prices and how long it will take them to double. For example, if a loaf of bread increases 3% a year, the price will double in 24 years – right in the middle of a lot of people’s retirement. So don’t forget about factoring in price increases of things like food when calculating how much money you will need in retirement.

Our word of the week: the Rule of 72. Use it to calculate how long it will take your money to double and or prices.

And, that’s the minute for today. Hey, if you like the minute, please go over to iTunes, iHeartradio or your favorite service and leave us a review. I will be ever so grateful.

Thanks for listening and as always remember that minding your money really is the path to a richer life!

Is there really an advantage to investing early?

Today on the Minute – Is There Really An Advantage to Investing Early?

I had a conversation with a woman the other day and she could not believe that there was a real advantage to investing early especially if you stopped after a few years. She couldn’t quite wrap her head around that...

Today on the Minute – Is There Really An Advantage to Investing Early?

I had a conversation with a woman the other day and she could not believe that there was a real advantage to investing early especially if you stopped after a few years. She couldn’t quite wrap her head around that concept so I showed her an example. In the example, I used Susan and Jason. And, here is how the story goes.

At age 18, Susan sets up an investment program and she invests $2,000 a year for 4 years for a total of $8,000 and then she stops and doesn’t add anything else to her investment. Her friend Jason waits to start investing until he is 30 and he adds $2,000 to his account every year until age 65 for a total of $70,000. Then I asked, if they both earn 10% on their investments, at age 65, who do you think has the most money Susan or Jason? And, she picked Jason. But she was wrong.

Despite the fact that Jason invested so much more money than Susan -- $70,000 versus $8,000 – Susan’s money had more years to take advantage of compounding – a truly remarkable concept and at age 65 Susan had $615,000 versus Jason’s $596,000 – a $19,000 difference!

I know that concepts like these can sometimes be tough to wrap your head around – but don’t just dismiss them because they don’t seem plausible. Instead, do the math.

The takeaway here, start investing as early as possible. In fact, if you have kids get them involved at a young age. Your older self or their older self will thank you for it.

And, that’s the minute for today. Hey, if you like the minute, please go over to iTunes, iheartradio or your favorite service and leave us a review. I will be ever so grateful.

Thanks for listening and as always remember that minding your money really is the path to a richer life!

Do you have your college costs covered?

Today on the Minute, do you have college costs covered?

There’s no doubt about it, college can be expensive. But did you know that the fastest rising age group for student loan debt is 60+. That’s because many parents and grandparents end up footing the bill...

Today on the Minute, do you have college costs covered?

There’s no doubt about it, college can be expensive. But did you know that the fastest rising age group for student loan debt is 60+. That’s because many parents and grandparents end up footing the bill and it comes at a time when it could jeopardize their retirement. I get so many questions about helping kids with college versus saving for retirement and I always recommend retirement. But that’s a discussion for another day.

In the past, college was an automatic, a given. That was your ticket to a better job – more money, a better life. But things have changed. College doesn’t automatically guarantee a great job, more money and a better life. You can no longer just dive in, go to just any school, major in anything and end up with a great job – you need to be strategic – you need a plan.

A plan that allows for things like…

How to blend your talents and skills with marketplace needs to increase your chances of finding employment when you graduate.

Which schools offer you the best options? So many students have ended up worse off because they chose schools that made outlandish promises. Your job is to do your due diligence and be sure that the school you choose is a good fit for you.

How you will pay for it. Consider savings, jobs, scholarships and finally loans. However, if loans are going to be a part of the mix, workout how you will pay them back before you get the loan.

College is expensive and it’s not an automatic ticket anymore. Consider all the pros and cons and then create a plan that will help you get to where you want to go.

And, that’s the minute for today. I love helping people with all aspects of their financial lives. If you have a question, send it to me at [email protected].

Thanks for listening and as always remember that minding your money really is the path to a richer life!