Net Worth Hacks

Ken hijacks the Cultivation Roadmap to take a quick sidebar about unplanned charity. Unplanned charity is tricky as it pulls directly on your heartstrings as opposed to an impulse purchase. You need to find that fine balance between generosity and managing your net worth. The solution for this is ridiculously simple: plan for the unplanned. Decide for yourself what % income or fixed amount you want to save monthly to go toward giving. Stick to that plan and stay on track.

In a change of pace, rather than talk about the technical aspects of handling money, Ken addresses the emotional aspect, particularly fear. Humans are hardwired to be fearful, as it is a survival instinct that allowed our species to survive. Recounting the old adage, “you miss 100% of the pitches you don’t swing at,” Ken dives into fears that often hinder asset cultivation. Balancing fear with well thought out decision making is critical. Ken offers these insights: Don’t make rash decisions. Don’t sit on the sidelines, get into the game. Get an adviser, and work with them, don’t just delegate to them. Do your own homework. Ignore the news, which is built around playing with your fears. Finally, disregard misleading bias.

This podcast episode is merely the personal experiences and opinions of Ken Kaufman and not a guarantee. Ken is not liable for any financial decisions you make as a result of this podcast. It is advised that you consult a certified financial adviser and be aware of the risk involved before entering the Stock Market.

Ken shares with you some of the stock market gaffs that he made in his youth. His inability to time the market resulted in missed opportunities and misfired picks. Ken discusses the lessons of stock volatility he learned. A stock can dramatically spike and correct itself in the course of 10 seconds. Timing the market is quite impossible; monkeys have a better performance numbers then experts. Literally. In the wise words of Warren Buffett, the Oracle of Omaha, “Buy and Hold. That’s how you win.” Ignore the headlines, pick a strategy and stick to your guns. Ken explains how this works and how you should always have faith in the market.

This podcast episode is merely the personal experiences and opinions of Ken Kaufman and not a guarantee. Ken is not liable for any financial decisions you make as a result of this podcast. It is advised that you consult a certified financial adviser and be aware of the risk involved before entering the Stock Market.

The financial service industry is riddled with fees and expenses that hurt the individual investor. Today’s episode is simple, Ken will create awareness of a majority of these expenses that can erode away your lifetime earnings. Getting hypothetical, Ken talks about how a 1% fee could cost you $600,000 over the course of your lifetime. Do we have your attention now? Ken covers all the fees that you will come across, and which ones you should be wary off. Tired of the fine print and obscure fees? This episode for you.

Links Referenced:

How Fees & Expenses Affect Your investment Portfolio
https://www.sec.gov/investor/alerts/ib_fees_expenses.pdf

Ken explores the concepts of passive and active management. What are the assets in your life that should be actively managed as to not go into disarray? Things that you should actively manage include your business, time, money, family relationships as well as a few others. Dan Sullivan once said human creativity, innovation and leadership can not be commoditized - hurrah for active management! However, active management doesn’t have a place in investment portfolios. People who try to beat the market generally don’t win over time. The market is volatile, thus portfolio diversification and passive investment is ideal. Tune in to learn more!

This is merely Ken’s personal opinion and is not to be considered investment advice or a guarantee. Please consult a certified financial adviser and be aware of the risk involved before entering the Stock Market.

Additional Links:

Don’t Be Fooled, Stock Picking is Still a Loser’s Game

https://www.marketwatch.com/story/dont-be-fooled-stock-picking-is-still-a-losers-game-2018-01-17

This is how many fund managers actually beat index funds

https://www.marketwatch.com/story/why-way-fewer-actively-managed-funds-beat-the-sp-than-we-thought-2017-04-24

More evidence that it’s really hard to ‘beat the market’ over time, ~92% of finance professionals can’t do it

http://www.aei.org/publication/more-evidence-that-its-really-hard-to-beat-the-market-over-time-92-of-finance-professionals-cant-do-it-2/

Why Don’t Professional Investors “Beat the Market”?

https://www.thesimpledollar.com/investing/blog/why-dont-professional-investors-beat-the-market/

3 Reasons Most Stock Pickers Don’t Beat the Market

https://www.nerdwallet.com/blog/investing/3-reasons-stock-pickers-dont-beat-market/

Why I Don't Use Actively Managed Mutual Funds

http://www.stage2planning.com/blog/why-i-dont-use-actively-managed-mutual-funds-to-manage-my-goals

When you grow old, you hope one of your children will step up and take care of you, right? Ken didn’t want to take his chances so he went ahead and had eight! In all seriousness, the value of diversification can’t be understated. Diversification is all about risk management, putting your eggs in different baskets. Ken provides some eye opening insights about the markets and how betting on a single horse could be detrimental. It’s important to understand all the sub-asset classes available to you, either growth-oriented or value-oriented, domestic or international, and the list goes on. Ken covers this variety available to you as well as some other considerations when diversifying your portfolio.

Links Referenced:

10 Things You Should Know About Diversification

Diversification with Different Equity Asset Classes - The Equity Style Box

Continuing down the roadmap, Ken further discusses cultivating assets. There are different kinds of asset classes that you can look to invest in: Cash (or Cash Equivalent), Bonds, and Stocks (Equity). Exploring these different fields require an understanding of risk and what is called a “glide path.” Understanding your target date for retirement as well as your age factors into this glide path model, which outlines the amount of investment risk you take over the course of your life. Younger investors typically take on more risk, while those nearing retirement typically take minimal risk. Take a listen to this episode to understand where you should consider allocating your assets.

So you’ve begun saving for the common scenarios of your day to day life. You’ve accumulated cash to cover credit card float, living expenses and anticipated costs or emergencies. What about the long term? Say tuition costs or even retirement? When looking to the future to save for these types of expenses that are 10 to 40 years down the road you must factor two things: Investment Objective and Tolerance for Risk. Ken dives into these concepts and where best to place your assets depending on these factors.

Paul Merriman

First Time Investor - How to Grow and Protect Your Money

Moving on to Part II of Cultivating Assets, Ken focuses his attention on saving for non-routine events in your life. Have you ever had a car break down or an untimely birthday expense? What about a medical emergency? Ken shares how you can tackle all of these types of problems in three different types of savings plans: Goal-Per-Month, Balance By a Specific Date, and a Balance Goal. You will be amazed of the logic behind these easy to manage savings plans that will weather any disaster. It’s far more targeted then that of a generic “Emergency Fund” and allows cash to accumulate in a sensible way.

Circling back to the IMPACT model, Ken begins the Iteration Process (a roadmap) in order to start Cultivating Assets. Cultivating assets always starts with learning to save; Every dollar that you make and do not spend, is an asset. Ken discusses percent allocation of income and the best approach. Ken walks you through his roadmap including misconceptions about so-called emergency funds and addressing credit card debt. He discusses accumulating cash and creating a sense of security so you no longer feel the stress of living paycheck to paycheck. Ken covers all this and so much more.