Thoughts On Money [TOM]

Another great episode with Trevor Cummings and Sean Latimer of The Bahnsen Group

Links mentioned in this episode:

This week's Thoughts on Money [TOM] is filled with some personal stories that, of course, I think are interesting but I promise that I get into some key financial principles for you to consider. I'm especially pleased this week's episode of the TOM podcast (with my co-worker, Sean Latimer) as we make dig into some key aspects of compounding of this week's blogpost.

The article ends with one of my favorite videos I've seen in quite some time!

Links mentioned in this episode:

• http://thoughtsonmoney.com

One attribute of outstanding leadership is one’s ability to cast vision; to clearly articulate the organization’s objectives in a simple and inspiring manner. We call leaders that excel in this area visionaries.

I’m currently on a team at church to develop a vision statement for our congregation. I didn’t realize coming into this project just how difficult that task would be. To assist in the process, the group has been reading, listening to, and watching content on what it takes to develop a great vision statement. One video/speaker stood out to me. He posed this question, “What kind of qualities do you want to have as a leader?” He noted that the common answers are qualities like integrity, honesty, etc. He argued that the attribute we should all aspire to is clarity. The speaker went on to say, “Sure, we value integrity, but we follow clarity.” A great vision statement, like a great leader, provides clarity.

Here at The Bahnsen Group, we are amid our own project that intends to clarify how we design and manage client portfolios. Appropriately named, we are calling this project, Operation Magnify. Our Chief Investment Officer and Founder, David Bahnsen, has been referencing this project throughout some of the content we produce, and it’s begun to spark lots of interest and inquiries. I thought no better place than TOM to provide my perspective on Operation Magnify and what it means to The Bahnsen Group clients.

Links mentioned in this episode:

• http://thoughtsonmoney.com

The bible tells us, “Pride goes before destruction, and a haughty spirit before a fall” (Proverbs 16:18) a warning about overconfidence and how arrogance frequently leads to failure. In our culture, we often hear these famous last words precluding a fall, “It’s a sure thing.”

If you’re a frequent visitor to Thoughts On Money then you know I love the game of basketball. I love playing basketball, talking basketball, watching basketball, and anything else that relates to the game of basketball. My wife can attest to the fact that I even sometimes let our two-year old eat in the living room with me, so we can watch the game during dinner – of course, this is absolutely justifiable, as we are amidst the NBA playoffs.

Today on TOM we will discuss basketball, Bitcoin, leveraged ETFs, gambling, and why investors should always beware of a sure thing. What a combination of topics! And off we go…

Featuring Sean Latimer, Private Wealth Advisor at The Bahnsen Group

Links mentioned in this episode:

• http://thoughtsonmoney.com

Financial planning is a math equation. This equation has multiple variables ranging from intrinsic metrics like your goals, financial resources, personal preferences, and so on, to external factors like inflation, tax rates, expected rates of return, and so on. For this equation though, the conclusion is less like a math solution and more like a report card: "A" is passing with flying colors, "C" is barely passing, and "F" is failing.

Do you know where you stand as an investor? Have you done sufficient planning with your advisor and are ready for a test of your financial plan? It would be best if you had clarity on what "grade" your current plan would receive and what steps you need to take to improve on that grade.

Today on Thoughts On Money looks at three financial planning grades and discuss what considerations each "student" (and "teacher/advisor") should focus on.

Links mentioned in this episode:

• http://thoughtsonmoney.com

Since the inception of Thoughts On Money, the objective has been the same - to help translate the complex world of personal finance into something more palatable and to address common questions that investors have. If you've been a long-time reader of TOM, you know that most investment questions don't have a one-size-fits-all answer; this is why I commonly encourage readers to address these particular issues we discuss with their advisor.

The problem with often concluding, "best to discuss with your advisor," is that you, the reader, don't get the opportunity to peek behind the curtain and see how an advisor would think through one of these financial solutions.

Today I am going to invite you to one of those problem-solving exercises. We are going to address a common financial issue/question, and I really want you to focus your attention on the process of how one would go about deriving a solution. These financial problem-solving skills are the key takeaway or learning opportunity, not the actual conclusion.

This lesson should not be too dissimilar to a high school math course that you've taken in the past. The textbook provides most of the answers in the back of the book because the teacher is less worried about you getting the right answer as much as your ability to structure the steps needed to come to that answer.

Just as the proverb goes, "Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime." Today I will teach you to fish.

Links mentioned in this episode:

• http://thoughtsonmoney.com

There is a debate out there in the world of finance. A debate about active vs. passive investing.

Today I take you on a journey through my personal timeline, how I bumped into this debate, and why I think we are all having the wrong conversation. Come find out why in, fact, all of us are exactly the same kind of investor at our core.

Links mentioned in this episode:

• http://thoughtsonmoney.com

This week's Thoughts On Money addresses the never ending quest for "free money." Whether it's some get rich quick scheme someone at work is whispering about or a "sure thing" at the local horse track, many people are enticed by the quick and easy path to riches.

In these COVID times, there are no shortages of people touting their short-term trading successes and mistaking gambling for investing.

The reality is that this kind of risk taking is a trap, a trap that can cost you your financial future. I hope this week's article will help you think twice before you gamble on a bad investment.

Links mentioned in this episode:

• http://thoughtsonmoney.com

Today I want to address a question I have been getting a lot from clients and friends. This question is usually premised by a comment or concern sounding something like this, “I am worried that this election in November means that [FILL IN THE BLANK] will win the presidency and that will have a negative impact on markets… does this mean that I should sell my stocks?”

In order to answer this question, I need to take you on a little journey and give you a better understanding of how the stock market works.

Links mentioned in this episode:

• http://thoughtsonmoney.com

Here’s the problem with commitments, they take time and time is a finite resource. Personally, I need to learn to not overcommit.

More and more, I see products promoting themselves with financing options. Everything from a mattress to a stationary bike is being marketed with long term financing options. Something with a $2,500 price tag might seem too rich, but a $60 monthly payment over 3 or 4 years becomes more palatable.

These commitments do not only come in the form of financing large purchases they also surface as subscriptions. Subscriptions to everything from streaming video services to theme park memberships. These subscription models make sense from a business perspective because businesses want predictable and sustainable income. For you, the consumer, this means that you have a defined amount of your income that has already been spoken for.

Here’s where I want to encourage you to shift the way you think about subscriptions and financing. When you choose to commit to something today and plan to pay for it later you are choosing to allow your “current self” to enjoy the utility of your purchase and you are committing your “future self” to pay for it. Naturally, we have a tendency to derive the greatest enjoyment from a new purchase at the beginning, yet the cost lives on.

Links mentioned in this episode:

• http://thoughtsonmoney.com