Long-term care might not be the first thing that comes to mind when you think about retirement, but it's often an important part of the puzzle that impacts both time and money. This is part 4 of a series that dives into the topic and discusses how you might be affected.

There are a lot of ways to put together a long-term care plan and there are a lot of options in paying for care. In Episode 21, we reviewed some of the most common self-pay options, including writing checks and paying as you go, using a reverse mortgage, life settlement or a bridge loan. If you do need care and plan on writing checks each month (or using any of the other options listed above), there are a few things you should take into consideration.

Read more on the topic and see the video by clicking here.

Long-term care might not be the first thing that comes to mind when you think about retirement, but it's often an important part of the puzzle that impacts both time and money. This is part 3 of a series that dives into the topic and discusses how you might be affected. In this episode, we get into the transition from in-home care to a facility and eventually hospice. Erin Johnson joins as a special guest to share her family's personal story.

Long-term might not be the first thing that comes to mind when you think about retirement, but it's often an important part of the puzzle that impacts both time and money. This is part 2 of a series that dives into the topic and discusses how you might be affected. In this episode, we take a 10,000 foot view at the costs by using some surprising statistics.

Read more about the topic by clicking here. 

Long-term care might not be the first thing that comes to mind when you think about retirement, but it's often an important part of the puzzle that impacts both time and money. This is part 1 of a series on long-term care where we'll dive into the topic in great detail and answer many of the questions associated with it. In this episode, we're talk Clarissa, who has been providing care to her mother-in-law, to get her perspective on how it's affected her family's retirement.

You can read more on the topic and watch the podcast by clicking here.

Are you normally a do-it-yourselfer and you want to apply the same strategy to your finance? That's awesome and it can definitely be done but certain people don’t have the proper skillset or mindset when it comes to finances. And certain parts of your financial life might require some expert help. Your finances are just like everything else in life – some people have the skills to do it yourself, others do not!

For more on this topic, check out our blog by clicking here.

Financial advisors are always talking about financial plans; well, we are on this show, at least! But are they really THAT important and, if so, what goes into it, what can you skip over and what does it even do for you? First, is it really that important? In a word, YES! However, don’t take my one-word answer, let’s look and see what other smart people say...

Forbes: 10 Reasons why financial plans aren’t just for the 1%

For the full corresponding blog post for this episode, visit: https://wp.me/paQKv1-7E

This episode is focused on earning more, right where you’re already at – your current job. There are two things to look at here, getting a raise or promotion and, second, increasing your take home pay by adjusting your withholdings.

Read more about this topic and see the resources here. 

If you’re going to invest for your future (which you should), you may come across arguments for and against different styles of investing, like passive investing and active investing. There are plenty of “money gurus” out there who are very vocal about both styles, so let’s break them down so you can have the information needed to decide which one is right for you and your personal situation! First, what exactly IS passive and active investing?

Full show notes: https://yourmoneypuzzle.com/podcast/money-puzzle-14-passive-vs-active-what-are-they-and-whats-right-for-you

Passive investing, according to Investopedia, is an investment strategy to maximize returns by minimizing buying and selling. Index investing is one common passive investing strategy whereby investors purchase a representative benchmark, such as the S&P 500 index, and hold it over a long-time horizon. Passive investment is cheaper, less complex, and often produces superior after-tax results over medium to long time horizons than actively managed portfolios.

The most common type of passive investing is index investing, which is akin to investing directly in the overall “stock market”, or one of the markets. It has long been argued that it is difficult, or perhaps impossible, to beat the stock market’s performance over a long period of time by picking individual stocks, mutual funds, bonds, etcetera. Investing in an index is considered one of the least expensive ways to invest. The fees are typically very low because there are not very many moving parts – no individual investments that need to be managed.

Passive investing’s goal is to build wealth gradually. Also known as a buy-and-hold strategy, passive investing means buying a security with the intention to own it long-term. Unlike active traders, passive investors do not seek to profit from short-term price fluctuations or market timing. The underlying assumption of passive investment strategy is that the market posts positive returns over time.

Active investing, according to Investopedia, an investment strategy that involves ongoing buying and selling activity by the investor. Active investors purchase investments and continuously monitor their activity to exploit profitable conditions. Active investing is highly involved. Unlike passive investors, who invest in a stock when they believe in its potential for long-term appreciation, active investors typically look at the price movements of their stocks many times a day (or week, at least).

Usually, active investors are seeking short-term profits. Active investing’s goal is to out-perform the stock market by choosing individual stocks that can be bought and sold under the right conditions to turn a bigger profit than simply leaving money invested in the market itself, which should post positive returns over a long period of time.

The short answer is, it depends on what your goals are. We’ve talked about the Warren Buffett challenge before, where he bet $1 million dollars that no hedge fund manager using active investing could beat the performance of the S&P 500 over a 10-year period. One hedge fund manager accepted the bet and was subsequently beaten. The market (passive investing) outperformed the hedge fund (active investing) by almost 5% per year over the next 10 years!

But what if your goal is NOT to outperform the markets? What if your goal is to get similar returns as the market, but do it in a safer way? What if your top priority is to produce income, and growth of your investments is a secondary priority? If either of these cases are true, active investing in specific portfolios that help you achieve those goals might be your better option, even IF the stock market has higher, long-term returns. There are other considerations that might make one style of investing better for your personal situation, such as tax-efficiency and diversification.

Again, the short answer is, it depends on what your goals are. Both styles of investing can and do work, and it might be that you need to invest using some of each style! You may choose to invest some of your money passively and some actively if that is the best way to reach your goals. This is where a professional advisor can help, by designing a plan and portfolio specific to your needs AND give you guidance as to which style of investing is right for you.

The bottom line is this. Passive investing, active investing – these are just tools to use to reach your goals. Don’t be afraid of either of them or let anyone talk you into believing that only one style works. Evaluate both based on what you’re trying to do so you can make the best decision for your family.

Elevated testosterone causes bull market trading.

• Edgin Insurance & Financial Services Website

Earning More with Side hustles

Today we’re following up on the conversation we started a few weeks ago about earning more vs spending less and which is better for getting ahead. We talked about spending less being better if you’re in a financial crisis or in need of some very fast acting money fixes, because spending less is IMMEDIATE! But there is only so much cutting you can do.

We also talked about earning more being better for the long-term, big picture, MULTIPLIER of your finances, and there are really only four ways you could increase your earnings – ask for a raise or promotion, get a side-gig or side-hustle, start a business or adjust your paycheck withholdings. Today’s episode focuses on side-hustles.

When I was 19, I opened an insurance agency for Allstate and, for a short time, I was the youngest Allstate agent in the country. My agency paid my bills, barely. And my wife worked to help pay them too! On the side, I also owned a magic shop at a kiosk in one of our local malls. It was called Hocus Pocus. I wore a name tag that said master illusionist, which I was not. I paid someone to run the shop during the day and then, on nights and weekends, I was there selling magic tricks for extra money.

I wasn’t working on the side to pay my bills; it was to get ahead. My wife and I were living in a crappy little apartment and we wanted to buy a house. My side hustle was going to provide the money for the down payment.

A few years later, when my agency was more established, my wife and I, and now our new daughter, were living in a house instead of that crappy apartment. My agency was paying my bills, but I was going out at night and selling vacuums. That’s right, I was a vacuum salesman! The vacuum sales were for extra money. We were paying our bills with our jobs, but we weren’t getting ahead. We weren’t creating any wealth. Selling vacuums allowed us to earn some extra to pay off some debts and accelerate our wealth.

Years later, after I had been in the financial industry for about 12 years, I started a side business selling little rubber thumb bands that said things like, TXTNG KLLS and DNT TXT N DRIVE. They were called texting thumb bands, and we sold millions of them! My dad got involved and helped run it because I was working full-time in my financial planning practice. We were selling these little bands online and through the mail along with other anti-texting schwag for parents and schools to use with young drivers who are prone to text and drive.

I wasn’t selling the bands to pay my bills, my financial planning practice did that just fine. My wife and I, and now our two kids, were living in a bigger home and were very comfortable. My side hustle wasn’t for the house, it was to help me buy rental properties. It helped pay for two, AND do some awesome extra stuff, like taking a week-long rafting trip through the Grand Canyon with my son and dad. It also paid for my wife and I to take our kids to Maui for a few weeks.

A side hustle is not what you do to pay your bills, it’s something extra that you use to accelerate your wealth. It helps you put together all the pieces of your money puzzle faster! It might be a part-time job, or a speaking gig, or selling things online, but it’s for the EXTRA earnings. The “above and beyond” money that you DON’T need to use to pay your bills.

If you need to work overtime or get a second job to pay your bills, then you’re living beyond your means and that needs to be adjusted. But that’s a different conversation. This conversation is about the 6 reasons to think about getting a side hustle, depending on your age and financial situation. Let’s break them down!

First, you may find yourself in some kind of debt situation that you don’t want to be in. Maybe you’re not sure how you got into all this debt, but you know it doesn’t feel good and you know you want out. Earning an extra $500 on the side each month and using it to pay down debts like credit cards, student loans or car payments will accelerate your wealth, because most debt is an enemy of wealth.

Second, maybe you have some big financial goal you are trying to accomplish, like moving out of a crappy apartment and into a nice home for your family. Maybe you want to take your entire family on a 2-week tour of Italy or do something on your bucket list. Your job pays you enough to pay your bills and save some, but something on the side could help you accomplish your BIG goals YEARS faster.

Third, you want to accelerate your retirement date or build some passive income streams. You want to create more wealth! Maybe you want to own rental properties or retire 5 years earlier. It just makes sense that getting more money working for you will accelerate your timeframe to reach your goals.

Fourth, maybe you’re getting close to retirement and you hate your job! You’ve been doing it forever,

and you want to spend more time with the grandkids or traveling or…whatever else it is you dream of. A side hustle can help you have a semi-retirement. I’ve got these clients; we’ll call them John and Jane. Jane is a few years older than John and she’s already retired. John and Jane did a good job of saving, paying down debt and doing all the other things that needs to be done before you retire but, based on what they want to do IN retirement, we had calculated that John would have to work for 3 more years. Unless…

John has a pretty cool set of skills that he’s acquired over his working years., so we looked at the numbers and the money puzzle that John and Jane were trying to put together and, instead of working full-time for 3 more years, If John would get a little side-hustle and earn just $1000 a month, he could retire within 6 months from the job he didn’t care for and travel with Jane, which is what he really wanted to do.

Even better, he could do his side-gig for the next 5 years, online, from anywhere they happen to be. It was a personal choice that doesn’t work for everyone, but John would much rather spend 10 hours a week for 5 years doing something little on the side, than 40 hours a week for 3 years doing something he didn’t like doing. It’s a choice they made for the lifestyle, and they couldn’t be happier about it.

The fifth reason to get a little side hustle is sometimes considered to be a hidden reason, and that’s the tax benefits! What?!? Tax benefits from making some extra money?!? That’s right! If you’re a W2 employee for someone right now, you’re limited on your tax deductions. If you’re married, you’re probably using your standard deduction to lower your taxes owed, but that’s about it.

We’ll talk about deductions in a different podcast, but that’s what the IRS allows you to use to lower what they consider to be your “income”, for tax purposes. If you have a little side hustle, it may work out to provide you some big tax breaks. If you have an office in your house and you use it for your side hustle, you may be able to get a deduction on your taxes for a part of your mortgage or rent payment. If

you start using your car for your side hustle, you might be able to write off some of the payment or get a deduction for miles driven. Do you use your cell phone for your side-gig? That’s a possible deduction.

If your hobby was collecting dinosaur bones, and you now start selling some of those bones online, the costs you have in collecting the bones may now be a deduction for you. Suddenly, you’re not paying for that hotel room in the middle of Africa for your bone collecting hobby, now you’re possibly deducting that hotel stay as a cost of collecting those bones, so you have them to sell online! I don’t know if you go to Africa to collect bones, by the way, just a guess. The point is, when you have some kind of side-hustle, it gives you the opportunity to deduct things on your taxes that you cannot deduct if you are just a W2 employee.

Finally, the sixth reason. I was meeting with a retired client just this past week who has been retired for a few years now. He has enough money to live the life he wants in retirement, but he told me he’s getting ready to go back to work for about 12 hours a week. I asked him if we needed to look at increasing what he was taking out of his investment accounts and he said he was good on money. It wasn’t that he needed more money, it was that he needed something to do. Some kind of purpose, and a good opportunity to meet new people and have some new relationships in his life.

The extra money he does earn will be nice, but that $500 a month could have come right out of his investments. He’s not even sure what he’s going to do with the extra money he earns. My guess is we’ll end up adding it to his investment accounts and letting it grow for the future. The side hustle is for his sanity and to keep him busy.

So, there you have it, six reasons to earn more through side hustles, and different ways you can use that extra money to further your future wealth and get your money puzzle put together faster. Now that we’ve done the learning, it’s time to put it into practice and do some extra earning! What kind of side hustle do you have? If you don’t have one, what can you do on the side to earn an extra $500 or $1000 a month?

We’ll be looking at some different ways that some of our clients do it over the next few weeks while we go through the three ways to increase your take home pay, but now it’s your turn! Learning what to do will make you wise, but only doing what you learn will make you wealthy. I’d love to hear about what kind of side hustle you come up with and the earnings you generate!

News Topic

“Three sought in $450k colonoscopy instruments theft at hospital”

https://news.yahoo.com/3-sought-450k-colonoscopy-instruments-theft-hospital-180359105.html

Episode 12 is all about the common investment terms that financial planners, investment advisors, bankers and others working in financial industries use every day. You may have heard them before but, even if you haven’t, these are the terms you should be familiar with if you are going to do some investing.

For the full show notes of today's episode click here:https://yourmoneypuzzle.com/podcast/money-puzzle-12-common-investment-terms-you-probably-dont-know

So you want to do some investing and, you go meet with your advisor. Or, maybe you’re watching some Jim Kramer or other investment show and they’re throwing around words that sound pretty cool but make no sense to you. They’re talking about alpha and beta and what the standard deviation is of a certain investment. You don’t want to seem like you don’t know what you’re talking about, so you nod your head and say oh yeah, that makes sense…

But secretly, on the inside, you’re like, what the heck is this guy talking about? Most industry people use a lot of industry jargon that only makes sense if you’ve studied the industry. A good financial advisor will act as a translator – they’ll bridge the gap between industry talk and the language that most people use – ENGLISH.

I had my business partner from Denver, Brian, here in studio to review some of the investment terms that you’ve probably heard, or will hear, so that you know what the industry people are talking about when you hear them. Here are the definitions of a few that we covered:

Investopedia - Basis point (BPS) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument. The relationship between percentage changes and basis points can be summarized as follows: 1% change = 100 basis points, and 0.01% = 1 basis point.

Investopedia - A strategy that allows an investor to buy the same dollar amount of an investment on regular intervals. The purchases occur regardless of the asset's price.

Investopedia - A term used in investing to describe a strategy's ability to beat the market, or it's "edge." Alpha is thus also often referred to as “excess return” or “abnormal rate of return,” which refers to the idea that markets are efficient, and so there is no way to systematically earn returns that exceed the broad market as a whole.

Investopedia - a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market.

Investopedia - The standard deviation is a statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance. It is calculated as the square root of variance by determining the variation between each data point relative to the mean. If the data points are further from the mean, there is a higher deviation within the data set; thus, the more spread out the data, the higher the standard deviation.

Investopedia - Used to model the probability of different outcomes in a process that cannot easily be predicted due to the intervention of random variables. It is a technique used to understand the impact of risk and uncertainty in prediction and forecasting models.

Elevated testosterone causes bull market trading.

• Edgin Insurance & Financial Services Website