This week’s theme is investing in bonds.

Bonds will likely be a critical component of your investment portfolio in retirement, so this week I’m sharing with you what I’ve learned from working with clients over the last 11 years, and trading upwards of $100 million dollars worth of bonds over that time.

Today, let’s try to shed light on an important debate: Individual bonds vs. bond funds.

Individual bonds are bonds you own from a single entity - like a CD bought from a bank, a corporate bond issued from a single company, or a municipal bond issued from a specific city, county, or state.

Bond funds, on the other hand, are a basket of bonds. So if you buy a municipal bond fund, you might own hundreds of different bonds all with different maturity dates, from a wide variety of municipalities. All in that one bond fund.

Bond funds provide more diversification than owning individual bonds, which is their greatest perk. But bond funds have some downside too. Unlike their individual bond cousins, bond funds have no maturity date, which means you could be underwater for years if the bond fund drops in value, with no specific date when you can expect to get your money back.

The income from bond funds is also variable, not fixed like individual bonds, so there is more uncertainty about what you will actually collect from the bond fund in terms of income.

And lastly, bond funds have ongoing fees, so they are usually more expensive to own over the long-haul.

There is no one best way to invest in bonds, but it is important to understand the trade-offs between individual bonds and bond funds when managing your portfolio.

That’s it for today. Tomorrow, we’re going to recap the week and I’m going to give you a little preview of next week’s theme.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, investing in bonds, investing in bond funds, benefits of investing in bonds, are bonds a safe investment, fixed income, fixed income vs equity, fixed income mutual funds, types of fixed income, fixed income examples, why invest in bonds, bonds investment definition, are bonds risky, are bonds safe, interest rate risk, interest rate risk definition, high yield bonds, junk bonds, non-investment grade bonds, how do bonds work, individual bonds vs bond funds, bonds vs mutual funds

This week, school’s in session on investing in bonds.

Bonds will likely be a critical component of your investment portfolio in retirement, so this week I’m sharing with you what I’ve learned from working with clients over the last 11 years, and trading upwards of $100 million dollars worth of bonds over that time.

Today, I’m sharing with you my favorite way to invest in bonds - the bond ladder.

In order to explain how this works, I want you to picture a ladder. Each step or rung on the ladder represents one year. The ladder might have 5 rungs or 10 rungs, or somewhere in between.

So if I build a 5 year bond ladder for a client, I buy bonds of ideally equal weightings that mature this year, next year, and so on for 5 years.

Here’s why I love bond ladders...Bond ladders provide predictable income, because one year of bonds will mature each year, but the other 4 bonds stay invested, so the income tends to be very stable. Bond ladders are generally more liquid too because of their shorter-term nature, and they work great in a rising interest rate environment, because you get to gradually re-invest your bonds at higher rates each year as your bonds mature and cash out, rather than being locked-in for years to come.

I would encourage you to google the term “bond ladder” or ask your financial advisor about it, because it’s a strategy we’ve used successfully with our clients for decades.

That’s it for today. Thanks for listening.

Tomorrow we’re going to talk about an important debate in the bond world: Bond funds vs. individual bonds.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, investing in bonds, investing in bond funds, benefits of investing in bonds, are bonds a safe investment, fixed income, fixed income vs equity, fixed income mutual funds, types of fixed income, fixed income examples, why invest in bonds, bonds investment definition, are bonds risky, are bonds safe, interest rate risk, interest rate risk definition, how do bonds work

This week’s theme is investing in bonds.

Bonds will likely be a critical component for your investment portfolio in retirement, so this week I’m sharing with you what I’ve learned from working with clients over the last 11 years, and buying and selling upwards of $100 million dollars worth of bonds.

Today, I’m going to share with you the 3 biggest mistakes that I see over and over and over again when I review people’s bond portfolios. When I talk to prospective clients, I have the opportunity to look under the hood of their portfolio, and when I see people make blunders with their bonds, it usually falls into 1 or more of 3 categories:

1. Owning bonds that are too risky
2. Reaching out too far for income, and
3. Having too much or too little in bonds

Let’s break down each one of these:

1. Owning bonds that are too risky. Think General Motors or Puerto Rico bonds. Credit quality or in other words the likelihood of default are very important factors when selecting bonds. If you buy individual bonds and the issuer files bankruptcy, you can kiss your money goodbye in most cases, so its important to keep a close watch on credit quality. Bonds have ratings to indicate their quality or likelihood of default, so watch those ratings carefully, especially if you own individual bonds.
2. Reaching out too far for income. Here’s what I mean by that - you might buy a bond that’s maturing in 30 years because it’s paying you 6% or 7% a year in income, but when rates climb higher, you can expect that the bond price will drop - and it could drop by 10-20% or more, so don’t be tempted to reach out too far into the future for income.

• Having too much or too little in bonds. We talked about this yesterday when I gave you some guidelines to consider when building your bond portfolio for retirement. By far, what I see most often is that a retiree has too little in bonds and too much in stocks. So be sure to look at your overall mix of stocks and bonds and ask yourself if you could afford to lose 25-30% or more in the next recession because you had too much in stocks.

That’s it for today. Thanks for listening! Tomorrow we’re going to talk about my favorite way to invest in bonds - the bond ladder.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, investing in bonds, investing in bond funds, benefits of investing in bonds, are bonds a safe investment, fixed income, fixed income vs equity, fixed income mutual funds, types of fixed income, fixed income examples, why invest in bonds, bonds investment definition, are bonds risky, are bonds safe, interest rate risk, interest rate risk definition, high yield bonds, junk bonds, non-investment grade bonds, how do bonds work

This week we’re talking about investing in bonds.

Bonds will likely be a critical component for your investment portfolio in retirement, so this week I’m sharing with you what I’ve learned from working with clients over the last 11 years, and through that, buying and selling upwards of $100 million dollars worth of bonds over that time.

Today, let’s talk about how much of your portfolio should actually be invested in bonds. The answer to that depends.

It’s a delicate balance - too much in bonds could hamper your growth potential, and too little in bonds could cause you to panic and sell when your portfolio drops in the next market downturn.

Owning bonds is like the story of Goldilocks and the 3 bears - not too much, not too little. We want a bond portfolio that is just right.

And just right could be anywhere from 40% in bonds to 70% in bonds in retirement. That’s the range we typically recommend for clients.

If you want to know the mix of bonds that we recommend for our clients by age, you can email me and I will send you our age-based asset allocation cheat sheet. It’s a guide to what your stock and bond mix should be for your age in 5 year increments, and it’s the foundation that we use to determine stock and bond percentages for our clients. There are other factors to consider other than age, but this guide gives you some specific guidelines and is a great place to start.

Just shoot me an email - [email protected]. That’s [email protected] and I’ll send you your free age-based asset allocation cheat sheet, to help you determine the right mix of stocks and bonds for your portfolio.

That’s it for today! Thanks for listening. Tomorrow we’re going to talk about the top 3 bond investing mistakes that I see people make over and over again.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, investing in bonds, investing in bond funds, benefits of investing in bonds, are bonds a safe investment, fixed income, fixed income vs equity, fixed income mutual funds, types of fixed income, fixed income examples, why invest in bonds, bonds investment definition, asset allocation, stocks vs bonds, stock vs bond, investment allocation, what are bonds

This week’s theme is bond investing.

Bonds will likely be a critical component for your investment portfolio in retirement, so this week I’m sharing with you what I’ve learned from working with clients over the last 11 years, and buying and selling upwards what I estimate to be over $100 million dollars worth of bonds for clients over that time.

Today I want to focus on why you should consider investing in bonds for your retirement in the first place. Some people object to bonds because the returns are lower than stocks. And that’s true. Over the long-run, you might only expect to receive about ½ of the amount in return that you could earn from investing in stocks.

But here’s why owning bonds is worthwhile: Bonds provide income and stability - two very important characteristics for an investment portfolio in retirement. So let’s talk about each one of these separately:

• Income - Bonds provide steady and reliable income as long as you invest in high quality bonds. This becomes critically important in retirement, as you’ll want to make sure that if you need to pull out $40,000 of income annually from your investments, that a significant portion of that is coming from the income that’s already baked in. That way, you won’t have to rely solely on growth to provide the income you might need from your investments.
• The other key benefit of owning bonds is that they provide stability during downturns in the stock market and the economy. As long as you stick with high-quality bonds, you won’t have to worry too much about your bond portfolio cratering in value in the next recession. But rather, it provides some much needed stability from your stock portfolio that’s gyrating more than a drunk girl at a bachelorette party when the economy heads south.

There are a lot of other reasons to own bonds in retirement - like diversification and tax advantages if you own tax-free municipal bonds, but income and stability are the key characteristics that I always come back to when clients ask me why they can’t just put everything in the stock market.

That’s it for today, Thanks for listening!

Tomorrow I’m going to explain how much of your portfolio should be invested in bonds in retirement.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, investing in bonds, investing in bond funds, benefits of investing in bonds, are bonds a safe investment, fixed income, fixed income vs equity, fixed income mutual funds, types of fixed income, fixed income examples, why invest in bonds, bonds investment definition, what are bonds

It’s a brand new weekly theme here on the One Minute Retirement Tip, and this week we’re talking about investing in bonds. (snore) No, kidding! I love bonds and it’s important that you understand how to invest in bonds because they are likely to play a key role for your investment portfolio in retirement.

First off, to make sure we’re all on the same page here, let me backup and explain what I mean by investing in bonds. Technically, we’re talking about fixed income, but you can think about bond investing as everything from CDs that you buy at the bank, to corporate bonds, U.S. Treasury Bonds, or bond funds.

There are a lot of different ways to invest in bonds, but here’s why I’m focusing on this topic: Bonds will likely be a critical component of your investment portfolio in retirement. So it’s important that you have a basic knowledge of how to invest in bonds and why you should consider bonds for your retirement portfolio in the first place.

So this week, I’m going to help you better understand bonds - why you should invest in bonds, what % of your portfolio should be invested in bonds in retirement, the top 3 bond investing mistakes that I see people make, how to build a bond ladder, and how to decide between bond funds and individual bonds.

This is a big, important topic and I’m going to do my best to help you become a better bond investor this week.

That’s it for today. Thanks for listening!

Before you go, please leave a review for the One Minute Retirement Tip in Amazon. Your review is so important – potentially thousands of people will read your review and decide to enable (or not) based on your feedback.

My name is Ashley Micciche...and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, bond investment definition, investing in bonds, investing in bond funds, benefits of investing in bonds, are bonds a safe investment, fixed income, fixed income vs equity, fixed income mutual funds, types of fixed income, fixed income examples, what are bonds

It’s Sunday, which means...It’s recap time!

The theme for this week was: A strategic plan for retirement. Most well-run businesses have a strategic plan that outlines the company’s mission, vision, values & goals. It’s the roadmap for how a business plans to get from where it is today to where it wants to go.

You can replicate the business strategic plan to develop a strategic plan for your retirement, and that was the theme for this week.

Articulating your mission, vision, values, and goals will no doubt invigorate and inspire you to live the life that you envisioned for yourself!

In case you missed any of this week’s episodes, here’s what we covered:

• An overview of a strategic plan for retirement and the essential elements of that strategic plan
• How to define and articulate your mission, vision, and values
• How to set 3-5 retirement goals that are aligned with your mission, vision, and values
• And, the key initiatives that you can focus on for the next year to help you reach your goals

If you missed any of these episodes, you can find them on iTunes by searching for the “One Minute Retirement Tip with Ashley”.

That’s it for this week! Thanks for listening.

Tomorrow, come on back, because we’re starting a brand new theme: How to invest in bonds. For most of you, bonds will be a critical component of your investment strategy in retirement. And chances are that many of you already own bonds in your investment portfolio. So next week, I’m going to explain why bonds are so important for your investment portfolio in retirement, and give you some guidance on how to invest wisely in bonds so you don’t get burned.

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, strategic plan template, what is strategic planning process, what is a strategic plan, importance of strategic planning, personal mission statement, vision board, personal vision statement, retirement goals, core values, mission statement, personal mission statement examples, what is a personal vision statement, personal vision statement examples, goal setting, retirement goals, how to set goals, retirement goals examples

The theme for this week is: A strategic plan for retirement. Most well-run businesses have a strategic plan that outlines the company’s mission, vision, values & goals. This week I’m showing you how you can replicate the strategic business plan and apply it to your retirement.

When it comes to planning for retirement, many of us just start with our goals, without ever considering how those goals align with our mission, vision, and values. Focusing on your goals without establishing your mission, values, and vision is a mistake.

Yesterday, we did actually get to the goals part of your strategic plan for retirement. I encouraged you to focus on just 3-5 goals for your retirement, while not get carried away with setting too many goals.

Today, we’re drilling a little deeper into goals to complete your strategic plan for retirement. We’re talking about your key short-term initiatives.

Your goals will probably take some time to achieve, so your key short-term initiatives are the smaller actions you’ll take this year to make progress on reaching your goals. If you have a goal to run a marathon and you’re a beginner runner, the key term initiative to that big goal is could be that you’ll start running 3 days/week or you’ll participate in 5 10ks this year.

What are the 5 things you can do this year to help you eat the elephant one bite at a time?

Take the time to write out 5 key initiatives that will move you closer to the retirement goals that you outlined yesterday.

That’s it for today. Tomorrow, we’re going to recap the week and I’m going to give you a little preview of next week’s theme.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, strategic plan template, what is strategic planning process, what is a strategic plan, importance of strategic planning, personal mission statement, vision board, personal vision statement, retirement goals, core values, mission statement, personal mission statement examples, what is a personal vision statement, personal vision statement examples, retirement goals examples, key initiative, what is a key initiative

The theme for this week is: A strategic plan for retirement. Most well-run businesses have a strategic plan that outlines the company’s mission, vision, values & goals. It’s the roadmap for how a business will get from where it is today to where it wants to go.

When it comes to planning for retirement, many of us just start with our goals, without ever considering how those goals align with our mission, vision, and values.

Now that we’ve done the hard work of articulating your mission, vision, and values, let’s move on to setting some goals for retirement.

The first thing you’ll want to do when establishing your goals is to go back to your vision. What was that big, hariy audacious goal that you set for yourself earlier in the week. Your goals are not arbitrary, and they should be aligned your vision.

Any goal that distracts or reduces that chance that you reach your vision is a bad goal. Period.

It’s easy to get distracted here and if you’re like me, you tend to move into overachiever mode with goals like, I’m going to swim to hawaii, then do an ironman once I get to hawaii, and then swim home. All while I grow my business 20%, make my marriage better than it’s ever been, and pop out a 3rd kid - maybe while I’m on that swim to Hawaii.

I’m kind of a hippie when it comes to childbirth. Waterbirths and no hospitals for me, so I’m thinking an ocean birth is definitely the way to go.

I explained earlier in the week that your vision should be big and bold, but your goals should be realistic and achievable. So pick 3-5 goals for your retirement years that are aligned with your mission, vision, and values, and plug those in to your strategic plan.

And importantly, while these can and should be long-range goals, and they don’t have to be goals for this year, they should be time-based.

And they should follow the SMART goals framework, which stands for Specific, Measurable, Achievable, Relevant and Time-bound.

That’s it for today. Thanks for listening.

Tomorrow we’re going to talk about how you can set some key initiatives, which are the stepping stones of progress toward reaching your goals.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, strategic plan template, what is strategic planning process, what is a strategic plan, importance of strategic planning, personal mission statement, vision board, personal vision statement, retirement goals, core values, mission statement, personal mission statement examples, what is a personal vision statement, personal vision statement examples, goals, life goals, how to set goals, retirement goals examples

The theme for this week is: A strategic plan for retirement. Most well-run businesses have a strategic plan that outlines the company’s mission, vision, values & goals. It’s the roadmap for how a business will get from where it is today to where it wants to go.

When it comes to planning for retirement, many of us just start with our goals, without ever considering how those goals align with our mission, vision, and values.

Yesterday, we talked about how to articulate your personal mission and vision statements, and today, we’re turning to your core values.

You might have several values that are important to you, but I’m going to challenge you to pick just 3-5 as your core, non-negotiable values.

This is my favorite part of the strategic plan, because once you pick your core values, you’ll have so much more clarity in your decision making.

When we created our strategic plan for True North, we identified 4 core values for our company, and it’s amazing how much easier it becomes to make those hard decisions. If I’m dealing with an opportunity, a problem, or an important decision, and I put it through the test of our core values, the decision becomes so much clearer.

Honesty, faith, creativity, compassion, love, family, adventure, fitness, health, loyalty, patriotism, efficiency, reliability, excellence, positivity...You get the idea.

Print a comprehensive list, which you can easily find on google, circle the values that jump out at you as important, then narrow that list down to the 3-5 that are your most important, immutable, unwavering values.

That’s it for today. Thanks for listening! Tomorrow we’re going to move on to setting some goals for your retirement.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

----------

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----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, strategic plan template, what is strategic planning process, what is a strategic plan, importance of strategic planning, personal mission statement, vision board, personal vision statement, retirement goals, core values, mission statement