Category Archives: Financial Literacy

8 Ways to Help Close a Retirement Income Gap | Wells Fargo

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Have you discovered a gap between the income you’d like to have in retirement and the income you think you’ll get based on your investments and current savings rate? It happens to lots of people.

“They have a number in mind about how much they need to save before they can retire,” says Will Larson, Retirement Planning Strategist at Wells Fargo Advisors. “Sometimes they can get there and sometimes they can’t.”

As concerning as it might be to discover a retirement income gap, knowing it’s there is the first step in closing it — usually by increasing your income and assets, reducing retirement spending, or both.

— Read on communications.wellsfargoadvisors.com/lifescapes/8-ways-close-retirement-income-gap/

Spend Less Than You Earn

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If you want to get out of debt and build wealth…spend less than you earn.

The wider the gap between what you earn and what you spend can remain constant or grow, the greater your cash flow and the more financial success you’ll achieve.

WEALTH = WHAT YOU EARN – WHAT YOU SPEND

Frugality is an important part of personal finance. When you decrease your expenses, your cash flow increases.

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”  Charles Dickens

There’s no magical way to change the fundamentals of personal finance. Although. there is one irrefutable financial truth…to build wealth, you must spend less than you earn.

Spend less than you earn is a golden rule of personal finance.

Paying Yourself First

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“Why would you wake up in the morning, leave your family, not do what you want with your day, go to work all day long for 8, 9, 10 hours a day, commute back home, get up and do it all over again? Why would you do this 5 days a week, 4 weeks out of the month, 12 months out of the year? Why would you do all that to earn money and not pay yourself first? Most people pay everyone else before themselves: the government, their creditors, and their bill collectors. Everybody else gets paid first and then if anything’s left over, then they pay themselves. That system stinks and is designed for you to fail financially. If that’s the system you’re using right now, and you don’t have money, that’s why. The odds are set up against you. It’s too tough for you to get rich if you’re paying everybody else first. You need to change this. You need to completely redirect your income so the first person who gets paid is you.” David Bach, The Automatic Millionaire

Paying yourself first is often referred to as “the golden rule of personal finance.” Paying yourself first means saving before you do anything else with your paycheck, like paying bills, buying groceries, or shopping. You allocate a percentage of your pay or income to a savings or investment account. Paying yourself first prioritizes savings and investing, but not at the expense of necessary expenses like housing, utilities and insurance.

Prioritize savings

If you deposit money directly into savings or brokerage account every time you get paid, you may be less likely to spend it on your everyday expenses. Following this system can help you foster a habit of saving that will add up over time and help you be prepared for retirement or unexpected expenses.

A good target is to save 10 – 15% of your take-home pay and put it toward your savings and investment goals. Saving even $125 or $150 a month is one small step you can take to help you get into the habit.

The first bill you pay each month should be to yourself.

By paying yourself first, you make saving a top priority. You make it a priority to pay your savings and investment accounts first, before making the first monthly payment or paying the first bill.

Most people say they don’t save enough money for retirement, or invest enough, or save a big enough emergency fund, because they don’t have the money to save more. That’s why personal finance advice says that you should pay into those savings and brokerage accounts first. Treat it like a bill. Approach it the same way that you treat your phone bill or your electric bill.

Most people wait and only save what’s left over after paying bills or spending on other discretionary items—that’s paying yourself last. Conversely, before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account.

Automate Your Savings

A quick way to begin paying yourself first is by setting up an automatic transfer to a savings or retirement account every time you receive a direct deposit, like a paycheck.

Most people wait and only save what’s left over after paying bills or spending on other discretionary items—that’s paying yourself last. Conversely, before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account.
Paying yourself first makes saving money and investing in assets a priority without sacrificing other financial needs and obligations. No matter what your level of earning or responsibilities are, you can afford to pay yourself first with a few small changes.

Most people wait and only save what’s left over after paying bills or spending on other discretionary items—that’s paying yourself last. Conversely, before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account.
Most people wait and only save what’s left over after paying bills or spending on other discretionary items—that’s paying yourself last. Conversely, before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account.

Most people wait and only save what’s left over after paying bills or spending on other discretionary items—that’s paying yourself last. Conversely, before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account.

Most people wait and only save what’s left over after paying bills or spending on other discretionary items—that’s paying yourself last. Conversely, before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account.

Paying yourself first should really be called investing in yourself first.

7 reasons to consider this little-known retirement saving strategy – MarketWatch

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Despite enjoying the longest-running bull market in history, most preretirees have a substantial retirement savings shortfall.

The average 65-year-old in the U.S. will outlive their savings by almost a decade, according to a new report by the World Economic Forum. And the typical household nearing retirement has only saved enough in their combined 401(k)s and IRAs to provide them at most $600 a month, according to the most recent Federal Reserve Survey of Consumer Finances.
— Read on www.marketwatch.com/story/7-reasons-to-consider-this-little-known-retirement-saving-strategy-2020-01-09

How much money you’d have if you invested $500 a month since 2009

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CNBC calculated how much you’d have now if your investments had grown at a 4%, 6%, or 8% rate of return over the past decade.

In order to beat inflation and ensure that your savings will work for you long term, it’s crucial to invest in the stock market, whether through an employer-sponsored 401(k) plan, a traditional or Roth IRA, an individual brokerage account or somewhere else.
— Read on www.cnbc.com/2020/01/07/how-much-money-youd-have-if-you-invested-500-dollars-a-month-since-2009.html

How To Stop Living Paycheck To Paycheck – Fidelity

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Nearly 8 out of 10 workers (78%) live paycheck to paycheck, according to a new survey from CareerBuilder.com.1 That’s up from 75% last year, and it applies even to those making 6 figures: 1 in 10 workers making $100,000 or more say they live paycheck to paycheck.

“In working with many clients over the years, I have found that most people tend to spend their entire paycheck if it is available in their bank account, regardless of whether they are at a low/middle level or are highly compensated,” says Marc Kodomatsu, a financial planner in Lake Oswego, OR.

If you’re putting away adequate savings for your goals and you have a healthy emergency fund, living paycheck to paycheck isn’t necessarily a disaster. But a quarter of Americans have no money saved for an emergency, according to Bankrate, and 20% have less than 3 months of living expenses in the bank.

“The events in Houston are a stark reminder of the perils of living paycheck to paycheck,” says Thomas Balcom, a financial planner in Lauderdale-by-the-Sea, FL. “For those folks who have flood insurance, they may not have the funds available to cover their deductible or tie them over until they return to work.”

Breaking the paycheck-to-paycheck cycle takes discipline and a plan. Here’s what top financial experts recommend as the best steps toward more financial independence:
— Read on www.fidelity.com/mymoney/how-to-stop-living-paycheck-to-paycheck

2020 CES | LAS VEGAS

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Monday, January 6, 2020 | 2020 Consumer Electronic Show (CES) in Las Vegas.

Attended the early morning session entitled “CES 2020 Trends to Watch” in the North Hall of the convention center. The session was presented by Steve Koenig, VP, Research, Consumer Technology Association. During the session, Steve previewed trends in consumer technology, the next big things and disruptive innovations that will redefine consumer technology in 2020. Essentially, Steve attempted to answer the big question many attendees are asking “What’s happening in consumer tech?”

Steve talked about how a New IoT, a new Intelligence of Things, will dominate the consumer technology landscape, and will influence the culture during the upcoming decade.

Global 5G deployment in 2019.

It is forecast that 5G handsets shipments will reach 20.2m in 2020 and 133M by 2030. Furthermore, it will take time for 5G network to happen and be rolled out. As 5G propagates, it will be led by enterprise applications.

5G will provide ultra reliable, low latency connectivity.

5G of the future is expected to enable digital tools to solve problems, enhance efficiency and increase productivity over the next decade in areas such as in agriculture productivity. Essentially, according to Steve, a lot of the devices we attribute to science fiction will become reality during the next decade.

AI of Things will enhance user experience.

Intelligence of Things is enhancing the Home (Smart Home).

Over the past ten years, the conversation was about connected things or the Internet of Things. Over the next ten years, the discussion will be connected intelligence things. AI chips in 8K television and smart phone cameras and smart ovens. For example, you put a pizza in a smart oven, the oven recognizes the pizza and adjust the oven temperature and controls the cooking time instead the consumer .

AI in McDonald’s Drive Thru

Manning a drive-thru can be a stressful job. Adding AI to automate part of the task can improve productivity and the delivery of service to the customer.

Human – Machine partnership in which some portion of the task becomes automated to improve customer service. in the case of a fast food restaurant drive-thru, AI machine can take the order and payment; human fulfill the order and provide inter personal service.

Streaming Wars – Abundance of choice and competition

With companies such as Netflix’s and Roku dominating the video streaming, big media corporations, such as Disney, ComcastNBC and AT&T, are striking back by launching their on over the top video streaming services. It appears that big media wants to control relationship with consumer.

Overall, it appears tat the next decade will be dominated by 5G and AI.

Diversity and Inclusion Dividend

During the afternoon, I attended a session called “The Hidden Diversity Dividend”. The essence of the session was that after two decades of conversation about diversity and inclusion in the C-Suite and technology industry, the problem still persists. Over the two decades, progress has been slowed and measured in millimeters.

The excuses of unconscious bias and lack of dedicated effort by senior continue to prevail as major reasons for the lack progress regarding diversity and inclusion of women and people of color.

The panelists stressed that there is a playbook that has been proven to work to solve this problem. And, focus and systematic effort is necessary along with getting industry on board with the program. To end the problem permanently, industry executive leader must:

  • Become aware and share the good, bad and ugly regarding the lack of diversity and inclusive
  • Except that equality and inclusion are choices; unconscious bias is an excuse.
  • Understand that it is not about representation, it is about reflection. It takes hard work and consistently
  • Appreciate that it takes critical and systematic change, a Scorecards, Mentoring, and Holding people accountable

Bottomline, consumers must hold companies accountable for their lack of diversity and inclusion in the C-Suite and for perpetuating the good old boys network. Take telecommunications and media company AT&T for example, the projected successor to AT&T CEO Randal Stevenson is a non-diverse majority white male. No women or persons of color were apparently even considered for the top job at communications and media conglomerate.

To change and grow, companies and people must get comfortable with being uncomfortable And to create a more equitable, diverse and inclusive industry, organizations must be willing to change for the better.

Lifestyle changes to make if you want to get rich in 2020

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If you want to build more wealth in 2020, start with these five lifestyle changes endorsed by self-made millionaires.

If your’re looking to build more wealth in 2020, money won’t simply appear — you’re probably going to have to make some changes to reach your goals.

Here are five lifestyle changes that have helped self-made millionaires get to where they are today. If they worked for them, they could also work for you.
— Read on www.cnbc.com/2020/01/03/lifestyle-changes-to-make-if-you-want-to-get-rich-in-2020.html

2020 Consumer Electronic Show | Las Vegas

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2020 CES | Sunday, January 5, 2020, Las Vegas, Nevada

It is easy to observe the pending presence and impact of #CES2020 Show on Las Vegas. With more than 170K plus expected attendees, the 2020 CES Show and attendees literally take-over the “City of Sin”.

Today, listened to CES Tech Talk Podcast entitled “Making Space for Drones“, which featured Steve Dickson, Administrator, Federal Aviation Administration (FAA) and Mark Blanks, Director, Virginia Tech Mid-Atlantic Aviation Partnership. They discussed facilitating and regulating the safe operation and testing of drones. During the CES Tech Talk, the FAA Administrator emphasized that if someone operates a drone, they’re considered a pilot and are subject to FAA regulations and guidelines. FAA is expected to have a significant presence at 2020 CES.

Las Vegas Weekend Happy Hour

Additionally, my intent was to locate the best on the Las Vegas strip or just off the strip venue for a weekend happy hour and to simultaneously watch NFL Wild Card Football games.

Thus far, made a brief stop for food and drink at MB Steak located adjacent to off-strip Hard Rock Resort and Casino. From the hour of 4 pm to 5 pm, the restaurant’s small bar area offered a very limited happy hour menu of cocktails and appetizers. Although enjoyed the happy hour offerings of brisket sliders and Gentlemen’s Mule, the venue was absent of life and nearly empty. And, the bartender seemed a bit surly and provided service with a pained expression.

Another weekend happy hour venue worth a visit is the Tex-Mex El Segundo Sol’s Loco Hour from 4 pm to 7 pm at Fashion Show Mall. The Tex-Mex restaurant offers a Loco Hour menu at the bar consisting of quesadillas, tacos, Margaritas, draft beers and well drinks to name a few. The daily Loco Hour draws a decent size crowds of Las Vegas locals and visitors stopping for nourishment and hydration. The food was okay and the beverages were above average. Overall, an excellent venue for an early evening happy hour.

People Watching

Afterwards, spent time wandering the nearby casinos and people watching.

First brief wandering was inside the Wynn Casino. And, must say that I was impressed by the design of the entrance and the holiday decorations that adorned the lobby and entrance to the casino.

After the Wynn, I crossed the elevated pedestrian walkway and wandered into the Palazzo to sit in the casino and people watch in the vicinity of Bar Luca. Regretfully, smoking remains permissible and a guy smoking a foul smelling non-American cigarette forced me to leave a prime people watching area.

Afterwards, I found a perch in Venetian near the blackjack pit to people watch. Unfortunately, the new location paled in comparison to the seat in Palazzo and concluded that the people to watch were in the Wynn and Palazzo.

Overall, I terrific day wandering around the Las Vegas Strip casinos.

7 Rules for Wealth: #4 Retirement Cost-Cutting

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Are you paying 1% for portfolio management? Why?

You want to be invested in a collection of index funds with an average expense ratio no worse than 0.1%. That’s easy to do. Fidelity has index mutual funds with 0% fees. Or you could easily put together a small, well-balanced assortment of exchange-traded funds costing 0.03% to 0.06%. (Check out the Forbes Best ETFs for Investors ranking.)

Or you could put all your money in the Vanguard Balanced Index Fund at 0.07%.
— Read on www.forbes.com/sites/baldwin/2020/01/04/7-rules-for-wealth-4-retirement-cost-cutting/