Are You Managing Your Finances Wisely?

Is your money being invested wisely? Are you nervous about the stock market right now?

If you are curious about how you could invest profitably right now, why not see if I can help you?

I will not try to push you into making any quick decisions and I will not waste your time.  I will just give you the honest facts about your financial situation.  And maybe I will help you earn a few dollars along the way! 

Just give my office a call at 804-897-3919 (Richmond area) or 757-223-0790 (Tidewater area) to arrange an appointment.

Factor Investing: Is It The Right Strategy or You?

The European debt crisis that arose late last year and has continued since is putting the best-laid investing plans to the test. The reason? Correlation. 

Correlation refers to how securities or asset classes perform in relation to each other and/or the market. A 1.0 correlation indicates that two security types move in exactly the same direction. A -1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relationship.

Last year, the correlation between the stocks in the S&P 500 index and the index itself went from as low as 0.4 in February to as high as 0.86 in October, according to Birinyi Associates.

That level of correlation can make the diversification you’ve worked so hard to create in your portfolio ineffective. Never fear, though. One option for addressing highly correlated markets like today’s is factor investing.

Factor investing replaces traditional asset allocation with a focus on specific attributes that researchers say drive returns. These factors can include familiar attributes, such as small-cap or dividend yield. They can also include more complex attributes, such as economic sensitivity and volatility.

To utilize factor investing, you would look at your current factor exposure. To simplify things, you may want to consider just a few factors - such as the three most researchers agree on, which are beta, size and style. Next, decide whether that’s appropriate. Finally, tilt your portfolio toward the factors you think will outperform.

Factor investing isn’t new. It originated in academia 20 years ago, and now is finding favor among institutional investors.

Want to Feel Good? Try Decluttering Your Life

Decluttering is in. A Google search on “decluttering your life” generated 1.16 million results in just a sixteenth of a second. Everyone from professional declutterers to Zen masters has something to say about it. Simply said, though, it boils down to this: Declutter, feel good, achieve more. Following are some tips to help you declutter:

• Many experts recommend you start small. A post at www.zenhabits.net recommends spending five minutes a day on decluttering. Before you know it, that junk drawer or hall closet will be a thing of beauty. 

• As you’re going through that junk drawer or closet, ask yourself if you’ve used items in the past six months. If not, get rid of them. 

• Delegate a box for the undecided - items you might want in the future. If you don’t open the box in three months, get rid of the contents.

• Everyone has things that don’t live anywhere. Consider the often-lost TV converter or recharger for your electronics. Make it a mission to find these things.

• How many knickknacks do you really need? Pick your favorites and take memory pictures of the rest. Then pass them on to charitable organizations.

• Buried under papers? One suggestion: Every paper that comes in the door lands in a single place. Sort through the pile every two days and discard or file every piece.

• Last but not least, learn to love the decluttered look. You’ll stay decluttered for life.

How to Get Yourself Unstuck

It doesn’t matter if you’re an artist, an inventor, or a shoe salesman. There are times when you’re stuck, unable to move forward with a big project or something on your to-do list.

Here are four ways to get going:

Just start. It sounds simple, doesn’t it? But you can’t get moving until you start to move. It doesn’t matter what you do; grab a pen, contribute a thought, start a conversation. The momentum will follow.

Get in touch. Sometimes, taking a deep breath and getting in touch with what you’re ultimately trying to accomplish can help you identify the one thing that might be getting in your way.

Ask for help. Sometimes you need to get out of your own way to see things clearly. Ask the people around you for some advice on what to do first. Allowing yourself to detach from your own thinking and consider someone else’s perspective may give you the shift you need.

Take a walk. Taking time away can open new ways of thinking. Go for a walk, outside if possible. Notice your surroundings, listen to nature, and recharge your brain.



GOLF - More Than Just a Long walk for No Good Reason!

The game of golf is described by critics as “a long walk for no good reason,” but actually there are a number of reasons why taking up the sport could help keep you in tip-top condition.

First of all, of course golf does involve a good deal of walking, and walking is one of the best forms of exercise that we can get.  In fact, a round of golf will typically see you having to walk for around four miles – and that’s if you play well!  Keep sending the ball off in entirely the wrong direction and you could probably add an appreciable distance on top of that.  The great thing about it, though, is that if you’re engrossed in the game, you barely even notice how far you have traveled on foot.

Not only does golf give your legs a good workout, the arms and upper body get plenty of exercise with all those long (and hopefully accurate) drives down the fairway.  Like many sports, the focus and concentration also mean that it’s good mental exercise.

Many people take up golf when they are in their 40s and older, and in fact the older age groups derive tremendous benefit from the workout that they get from the sport by increasing muscle strength and bone density, two things that often dwindle naturally with age.



Is Being in the Company of Big Spenders Hitting Your Pocketbook?

Keeping hold of your cash can feel difficult at the best of times, but when you’re in the company of big spenders, it can become all but impossible. 

Although you might not normally be the type to be influenced by the behavior of others, there are actually three main reasons why people are sometimes tempted to emulate the spending habits of others.

The “keeping up with the Jones’s” effect.  They don’t want to be seen as any less affluent than the people they associate with and so they not only match the latter’s spending, but even outdo it.

Watching others spend freely gives them a sense of entitlement, even though they may not be able to afford the expenditure.  They tend to think, “If they can, then why shouldn’t I be able to?”

The loss of self-control.  Although it’s often easy for people when they’re alone to talk themselves out of spending their hard-earned cash on things they don’t really need, being in the company of big spenders can tempt some people to think only of today and deal with the consequences later.

Think about the people you associate with and whether any of them have any of these effects on you.  If so, you might want to think carefully about the situations in which you meet with them to reduce your chances of letting yourself be led astray.

Financial Resolutions for 2012

Here’s the thing about most financial resolutions: They don’t usually last even until the end of January. That’s because making a permanent change in our behavior requires both time and a steely resolve. But I’ve found that we can develop financial character one action at a time.

So in that vein, here are some financial practices to take you from pauper to prince or princess if you add one each year. If you’ve already got one down, move to the next on the list.

#1 MOST CRITICAL: Resolve to become (and stay) debt free. Now, I’m not Dave Ramsey, but there’s a reason why he’s become so popular: his approach works. I’d say that you can have a fixed-rate fixed-year traditional mortgage on your house — but nothing else, please. No equity line of credit on your house. No car payments. Certainly no credit card debt. Because you simply have to learn to live within your income — which, unfortunately, sometimes means going without. The millionaires among us really are frugal. So learn to enjoy that process, and it’s a fantastic start.

#2 Automate your savings (AKA Pay Yourself First). You can start by getting the entire match if your company offers a 401(k) plan. Usually this translates to saving 5% of your salary while the company contributes a 4% match, which is the fastest way to get an 80% return on your money. Most Americans forgo this match, believing they need to spend 100% of their salary. But you can learn to think like a millionaire and live well on 95% of what you make. If you don’t have a 401(k) plan, act like you do, and sock away 5% automatically.

#3 Fully fund your 2012 Roth IRA. This is $5,000 in 2012 and $6,000 if you are older than age 50. If you can’t manage the entire amount in January, put in $416 monthly. Automating deposits in an employer-defined contribution plan is easy. Fortunately, automating saving in a Roth IRA or a taxable savings plan is equally painless. Most brokers offer an automatic money link between your checking account and an investment account. Set your savings on autopilot, baby!

Remember — these steps build off one another, so if you already have done the first 3, here’s your next step:

#4 Save another 5% in a taxable investment account. Automating savings is great, automating investment is even greater. Key word here: automate. At this point, you’re hitting a mark of saving 15-20% of your income. That’s a fast-track to long-term prosperity.

Take Charge of Your Next Performance Review

Do you dread your upcoming performance review like a patient being wheeled into surgery? It doesn’t have to be a traumatic experience. Try taking an active, positive role in the process:

Before

• Learn what to expect. If you’re new to an organization, ask how employee performance is evaluated and what formal reviews consist of. Look at any paperwork you or your manager will have to fill out.

• Document your achievements and efforts. Don’t rely on your manager to remember accomplishments from eight or nine months ago—or on your own memory, for that matter. Keep a workplace diary to record results, training, problems, and anything else that might affect your next review.

• Communicate throughout the year. Ideally, your manager will meet with you on a regular basis to discuss goals and performance. Even if that doesn’t happen, keep him or her informed about what you’re doing, and ask questions designed to show your commitment to high-quality work.

During

• Contribute to the discussion. Don’t sit back and passively listen to your manager. Talk about your year, ask questions, and renew your commitment to learning new skills and improving your performance.

• Brag (a little). Whether you’re filling out forms or talking face to face, don’t be shy about telling the boss what you’ve accomplished. Be prepared with specific facts and details. (“In May, I completed the Smith project, which generated $100,000 in revenue.) Focus on results, not efforts: Trying to close a deal isn’t as impressive as actually making the sale.

• Don’t get defensive. If the manager criticizes your performance, stay calm. You’re entitled to ask for clarification, and you should try to eliminate confusion about your achievements, but don’t turn the review session into an argument you’ll never win.

After

• Take something of value away. No matter what happens during the review itself, spend some time after it’s over thinking about what you’ve learned. Under the right circumstances, you’ll have a better idea of what your manager wants and how to succeed during the next review period. Even if the discussion goes poorly, you should pick up some pointers on what to avoid next time.

Money Worries

With all of the news about spiraling federal debt, it’s natural that Americans are taking a hard look at their own situation, and it sometimes leads to worry–even for those who are relatively secure.

Interestingly, my clients who have MORE cash in the bank often worry more! Funny, right? But it’s normal human nature….

You see, under all guidelines and measures, my finances are very solid. I’ve got a thriving business which is more secure than most people’s jobs. I work with numbers and am very good at taming balance sheets.

Yet, I still sometimes worry about money.

After a lengthy time of thinking, discussion and some more thoughts into the matter, below are a few techniques I’ve settled on which can help us ALL reduce our worries over money.

1. Realize that It’s Exaggerated – Worry is a funny feeling – it seems to exaggerate any problem. While there are certainly many people who actually run out of money, those are usually not the people that tend to worry.

2. Spend the Same Time Making Money Instead – If you are going to spend time worrying about money, why not use that time and get a side job instead? Maybe start a website (or two, or three). I know it’s easier said than done, but the more you work at it, the easier it gets.

3. Confidence – Part of the reason why we worry about money is because of the lack of confidence in our own abilities to earn an income. How can we boost our confidence you ask? Confidence comes from success, and success starts from taking action. So try a few low-risk entrepreneurial ventures. If they bomb, see it as a laboratory: learn from it and try again.

But never (never) allow it to touch your identity as a person.

4. The workplace plays a big role in worry. Are your colleagues encouraging? Is your boss supportive? If not, then do something about it. Don’t get into the thinking of “I can’t find another job”. Yes you can — especially if you HAVE a job right now. If you got this job, you can get another one!

5. Worrying is Actually Good – A little, measured worrying is actually healthy for us. It’s what drives us to be better. It’s what turns our energy switch to the “On” position. The right way to deal with it is to channel it into your work ethic, and your desire to be better.

How Do You Deal with It?

Of course, what I listed above is just the tip of the iceberg. How do you deal with worrying about the lack of money? Or do you? What has worked for you? I’d be interested to hear.

The Richest Characters in Fiction

Dreaming of being the next Warren Buffett is one thing; do you spend your nights fantasizing about having as much money as Scrooge McDuck? Forbes magazine, which tracks the world’s richest real people, also looks at the accumulated wealth of fictional characters.

Here’s a look at how much money you might have if only you lived in the imagination of a famous novelist, cartoonist, or screenwriter:

• Scrooge McDuck. The long-lasting Disney character’s net worth is calculated at $44.1 billion, thanks to his passion for mining and treasure hunting.

• Carlisle Cullen. The 370-year-old vampire from the Twilight saga is worth an estimated $36.2 billion.

• Artemis Fowl. A child criminal mastermind featured in a series of best-selling novels for young adults, Fowl’s ill-gotten gains amount to $13.5 billion.

• Richie Rich. The “poor little rich boy” of cartoons and comic books controls assets of $9.7 billion.

• Jed Clampett. The patriarch of The Beverly Hillbillies TV show, Mr. Clampett has $9.5 billion in Milburn Drysdale’s bank.

• Tony Stark. Those Iron Man suits aren’t cheap. The CEO of Stark Industries in the Marvel Universe is worth $9.4 billion.