Tag Archives: Financial

Financial Well-Being in America

Posted on by

One out of every 15 Americans is a millionaire according to a recent UBS report. That’s 38% of all millionaires in the world.

Yet, headlines state that 58% of Americans are living paycheck to paycheck and that credit card debt is at an all-time high.

Two extremes of financial well-being in America.

The Consumer Financial Protection Bureau (CFPB) defines financial well-being as a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.

Consumer Financial Protection Bureau (CFPB) conducted the National Financial Well-Being Survey in late 2016. The findings revealed wide variation in how people feel about their financial well-being. Some subgroups fare relatively well, while a majority face greater challenges.

From 2017 to 2020, the average financial well-being score for U.S. adults increased slightly, reaching 55.

However, approximately 1 in 10 Americans still had low or very low levels of financial well-being2.

Unfortunately, recent reports indicate that financial struggles have intensified. In 2022, the average overall financial wellness score declined, and fewer workers reported being financially resilient.

Inflation has had a significant impact on financial well-being in America. When inflation hit 9.1%in June 2022, 83% of Americans were concerned about rising prices. Even though inflation has eased to around 3%, 73% still express concern.

Inflation continues to shape Americans’ sense of financial well-being and spending decisions, even as rates of inflation have eased in recent years.

References:

  1. https://www.consumerfinance.gov/consumer-tools/educator-tools/financial-well-being-resources/data-spotlight-financial-well-being-in-america-2017-2020/
  2. https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker/inflation-financial-wellbeing-consumer-spending-habits.html

Invest for the Long Term

Posted on by

When the market is uncertain, following your long-term financial plan will be the best approach for growing your money and long-term investing success.

Like a roller coaster ride, keeping up with the constant change in the stock market can be an intense experience. And, although those periods of market uncertainty can be unsettling, the good news is that investors who stay the course and continue investing tend to do better over time. It can be tempting to sell at a loss when markets are low, and some wait too long on the sidelines and miss a window of opportunity. If you’re concerned about investing at the right time, you could dollar cost average your investments, which is investing smaller amounts at regular intervals, as opposed to investing a single lump sum at one time. By spreading out your payments, you can take advantage of market corrections and discounted pricing without having to try to figure out the optimal time.  The key is to stay calm and stick to your long-term plans.

Consider the Big Picture

Sometimes, we forget that what’s happening in the market today is really just a snapshot in time. History has shown that even after a slump, the market recovers. Even better, given the lower stock prices, a down market could be a good time to add to your portfolio. You’ll likely be in a good position to take advantage of future gains, especially if you don’t plan to cash out your investments for years.

Turn Off the Noise

Resist the urge to make investment decisions fueled by emotion or the day’s headlines. Stay focused on your goals and how long you have to achieve them. Here are some ideas to help you follow or tweak your plan calmly:

Assess your goals.

Consider how long you have to achieve your goals. What do you hope to accomplish in 5, 10, 20 years? How long do you have until retirement? If your goals need to be tweaked or you need to cash out some investments sooner than planned, be sure to talk to a financial advisor.

Review asset allocation.

Review how much you have in stocks, bonds, ETFs and cash. Is your portfolio still a good fit based on your age, goals and risk tolerance? If not, rebalance it to stay on target.

Start or continue to invest.

Investing your money is the most reliable way to create wealth over time.

If you’re new to the investing world, it’s time to get started and make your money work for you.  Your goal is to grow your money, and investing will yield higher returns than traditional savings options.

Continue contributing to your future.

Keep making regular contributions to your retirement plan. Prioritize these contributions as part of your monthly budget, so you’ll continue growing account balances without even thinking about it. And, keep in mind—participating in an employer-sponsored retirement plan or contributing to an IRA provides you certain tax and other advantages.

Investing may appearing daunting, especially if you’ve never invested in stocks, mutual funds or bonds before. However, if you figure out how you want to invest, why you want to invest, how much money you should invest, and your risk tolerance, you’ll be well positioned to make smart decisions with your money that will serve you well for decades to come.

Whether you prefer a do-it-yourself investor or prefer to seek assistance from an advisor, it’s important for you to develop good financial habits and for you to make sound choices.

References:

  1. https://www.fool.com/investing/how-to-invest/
  2. https://www.navyfederal.org/resources/articles/life/investments.php?cmpid=em%7Cnl%7Cresources%7Carticles%7Carticles%7Clife%7Cinvestments%7C11/20/2020%7C31689%7CA%7Ccb4.4

Bach Wisdom—16 Timeless Truths

Posted on by

16 FINANCIAL TRUTHS, ACCORDING TO DAVID BACH, YOU CAN TAKE EVERYWHERE!

Advice from David Bach, author The Automatic Millionaire

  1. Always spend less than you make – your life will be much easier and less stressful.
  2. Pay yourself first – at least an hour a day of your income – you’re going to work 90,000 hours over your lifetime you should keep at least an hour a day of your income.
  3. Don’t budget – you’re too busy, and you will just get frustrated and fail–instead automate your financial life. When it’s automatic you can’t fail.
  4. Be an investor, not a borrower – investors get rich borrowers stay poor.
  5. Buy a home, don’t rent. Renters stay poor – homeowners and landlords build wealth.
  6. Don’t lend money to friends or family (you will lose both) — and you’re not a bank.
  7. Never invest in things you don’t understand. If the investment can’t be explained to you on one piece of paper it’s too complicated. Pass.
  8. Invest for the long-term – building wealth takes decades not days.
  9. Don’t try to time the market, it won’t work. Investors who time the market always fail.
  10. Never invest on margin – leverage kills you when things go wrong.
  11. This time is different — it’s never different. Things work until they don’t work. Never bet the farm, you can lose it.
  12. Once you become rich — stay rich. It beats starting over (ask anyone who has had to).
  13. Give back — because the more you give the more you grow – and you make the world a better place.
  14. Never give up. No matter what happens, no matter how many times you fail as long as you get up and try again you haven’t lost.
  15. Compound interest really is a miracle that works when you work it. Save $10 a day at 10% interest in 40 years you’ll have $1,897,244. Earn half of that and you’ll have close to half a million dollars. That will be way better than not having saved. Trust me. Your older self will thank you.
  16. To find the money to save and invest you need to find your Latte Factor. The Latte Factor is the simple metaphor that will teach and inspire you to realize you are richer than you think and small amounts of money can change your life – if you invest it! Come check more at www.thelattefactor.com.

———————————————————————-

These truths, according to David, have come from over 30 years of learning. Mostly from experience and also mentors. Feel free to pass them along. Peter Lynch, the genius money manager from Fidelity, definitely gets credit for #7.

Take what you love and leave the rest behind.

You don’t have to believe in them all…but, according to David, most of the truths will help you financially.

****AND SHARE AWAY****BECAUSE SHARING IS CARING.

Source: Bach Wisdom—16 Timeless Truths

David BachDavid Bach is a financial expert and bestselling financial author. He has written ten consecutive New York Times bestsellers with more than seven million books in print, translated in over 19 languages.

His book The Automatic Millionaire spent 31 weeks on the New York Times bestseller list. And, over the past 20 years David has touched tens of millions through his seminars, speeches and thousands of media appearances. He has been a contributor to NBC’s Today Show appearing more than 100 times, and a regular on The Oprah Winfrey Show, ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, PBS, and many more.