The year may not have started well, but there’s still the future to plan for. Are you looking at everything under the sun and making sure you’re still on track to building up your financial life?
Today, Bob and I talk about the core principles of making money. Have you been making any of the 4 biggest financial mistakes of 2020? We also take a look at the 5 main areas you should focus on right now.[spp-player url=”https://nopaynenogain.podbean.com/mf/play/m68zm1/NPNG_048.mp3″]
For our spotlight segment, Payne Capital Financial Advisor, Aaron Dessen tells us how he helped a couple go back into the market and increase their annual income by $25,000.
This is another phenomenal episode for our listeners. Don’t miss out by tuning in now to the No Payne, No Gain podcast!
Financial Propaganda of the Week
It’s time to call out those articles that are so egregious we just have to put them in the hot seat. Here’s what we’ve heard:
[03:50] – The perma bears seem to have forgotten that Warren Buffett owns billions of dollars in stocks. The sale of his airline stocks did not mean he’s out of the market.
[05:27] – Just because market prices are going down doesn’t mean it will continue to go down.
[06:26] – The financial media channels didn’t predict that the market would go down, so they don’t know what’s going to happen next.
[07:07] – Investing is not about buying low and selling high. It’s about achieving goals.
[07:39] – The economy and the stock market are not the same thing. The economy is what’s happening right now. The market is already looking past the recession.
[09:08] – The negative things being reported are not permanent. The market is looking at when things get back to normal. So don’t make decisions based on the current news.
Biggest Financial Mistakes of 2020
There might be so much uncertainty going on, but that doesn’t mean you should do nothing. Doing nothing can be the worst decision you make. Which is why we want to talk about the bad decisions you should avoid doing this year.
[12:48] – The number one mistake is when you stop putting money in your 401(k).
[13:03] – The point of having a game plan is you stick to it when things get chaotic. Keep on buying and dollar-cost averaging.
[14:04] – Another mistake is postponing getting your finances in order because we’re under a pandemic. Things may be different, but you still need a plan to reach your dreams and goals.
[14:37] – The third mistake is deciding to just postpone your retirement. When things are down, it’s the best time to audit and reevaluate your goals and make better decisions.
[15:43] – Your accounts might be down, but your spending is probably down too.
[16:31] – Financial independence is better than retirement. It’s a great feeling when you know that you’re set for life.
[17:54] – Don’t throw away or shred your statements because you don’t want to look at them. There are proper steps that you can make right now.
5 Main Financial Events To Address Now
The Tokyo Summer Olympics may have been postponed, but we can have our own financial planning Olympics. When it comes to your financial plan, there are financial events that you should be addressing. Let’s go over them now.
[22:45] – The inflation marathon can be nasty. Don’t forget to factor in that everything is going to cost more in the future. Worse is healthcare. Healthcare inflation is off the charts.
[24:01] – Another event you should be mindful of are recession hurdles. You can’t run through a recession, but you can hurdle over it with proper planning. Always assume that the sky will fall and make sure you have protection in place in your portfolio.
[25:56] – The next event is the hidden fee toss. Wall Street and the insurance industry are masters of hidden fees. Even with annuities or mutual funds, there could be a lot of fees that you didn’t know you were paying for.
[27:39] – You really need to understand what you own, what the expenses are, why you own it, and how it works.
[28:04] – Synchronized planning is the next event. It’s when you make sure that you have an income game plan, investment game plan, tax game plan, and state game plan which are all working together.
[28:31] – Make an inventory of all your assets and ensure everything is titled property. This way you won’t be passing an enormous tax burden on to your heirs.
Do you have a great question for us to answer? We love to help our listeners understand anything about the market, the economy, or investing. Send them over to us via email at email@example.com.
[34:08] – Question #1: “My portfolio dropped quite a bit in February and March, and though it recovered some in April, it’s still down quite a bit. I’m retired and rely totally on this money for income because I haven’t started my social security. I’ve been wanting to wait until age 70 to start it, but now I’m wondering if I should take it now.”
[36:39] – Question #2: “My wife is the main breadwinner in the family, and she’ll likely work for another 10 years or so. How much insurance should we have on her, enough to replace all of the money that she’d earned in the next 10 years or that too much?”
Today, we have Financial Advisor, Aaron Dessen. He tells us how she was able to help a couple with a very large annuity get a better understanding about it.
[44:58] – A small business owner was forced to close his business due to the Coronavirus pandemic and recession. He wanted to take a look at the big picture and see what he needs to do to maintain his lifestyle.
[45:28] – The couple was sitting on a lot of cash that wasn’t earning anything. Due to what happened in the 2008/2009 Financial Crisis, he was gun-shy about going back to the market.
[45:49] – Now, he sees the current recession as an opportunity to get back in.
[46:35] – You won’t reach your financial goals from cash accounts or low interest rate bonds. The market is still one of the most attractive places to generate income for retirement.
[47:34] – After looking through his assets, Aaron was able to show him that he was in great shape and can retire. But he needs to put his cash to work.
[48:27] – By taking only half of his money to invest back into the market, Aaron was able to increase his annual income by $25,000.
[49:14] – A lot of times you should ask yourself whether you’re taking enough risks, enough volatile assets that can offset inflation and enable you to achieve your dreams and goals.
Do you need a game plan for these volatile times? We’ll make sure you’re making the right decisions for your retirement plan. Schedule a call with one of us at https://paynecm.com/game-plan-call/
“The reality of it is, now’s the time to be invested, not waiting on the sidelines for some magical signal that’s never gonna work.”
To download 5 Ways to Maximize Your Retirement Accounts and Save on Taxes in 2020 and the Highlights from the new SECURE Act, text BULLISH to 555888.
If you have saved over $500,000 for retirement and need a plan based on your retirement goals, Bob and Ryan will create a 360 Financial Portal just for you! Text or call 844-752-6692 to check out the 360 Financial Portal with no strings attached!
Contact us for a consultation with our financial advisors to start a personalized plan
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Payne Capital Management, LLC), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Payne Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Payne Capital Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Payne Capital Management, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.