5 Tips or Financial Success and Independence

Save Early and Often – It’s some of the most popular financial advice out there – start saving in your 20’s, and yet so many people don’t do it.  I understand that people have other obligations such as paying off debts and getting established in their careers which can interfere with implementing a savings plan.  However, most people don’t properly prioritize saving.  If you treat saving like paying a bill and you make it totally automatic, you’ll forget you’re doing it.  Create an automated savings plan when you’re young and get started.  Even if the amounts are low at first, it’ll be easy to increase the amounts as your income level rises and your debts disappear.

Live Beneath your Means – Like saving, this is easier said than done.  Those who get used to it will come out ahead in the end.  If you earn $10,000/month, live on $5,000.  If you earn $20,000/month, live on $10,000.  Having a cushion in life really alleviates stress which, in turn, makes you even more capable of leading a successful, productive life.  Those who live beneath their means are happier and richer.

Enjoy Your Work – if you hate your job, it’s probably not going to lead you to financial independence.    If it does, the misery you incur while practicing that job probably won’t be worth it.  Find something you enjoy doing.  You only live once and throwing away half your life to earn a few extra bucks is probably the wrong move.  People who love their jobs get a true sense of fulfillment from it and don’t count down the minutes till the weekend.  I realize this may not be possible for all, but try to take a risk while you’re young and not pinned down by a big mortgage and family.  You have the power to change the course of your life.

Quantify your Goals – I’m not just talking about big life goals such as buying a house or paying for your child’s college education.  You should be setting goals for each day.  I have a little book in my office where I write down what I hope to accomplish each day.  That includes which clients to call and e-mail, what trades to place, a new technology to learn, etc.  I make a little check mark next to each activity once it’s complete.  Successful people have very detailed visions about the future and specific plans about how to get there.  The clearer your path, the faster you’ll get there.  Try setting daily, weekly, and monthly goals for yourself and see how you do.  Be realistic in the process.

Be Healthy – Yes, it’s directly related to your success.  In life, the trifecta of food, sleep, and exercise have a tremendous impact on your daily mood and ambition level.  When your body and mind are feeling right, it’s easier for everything else to fall into place.

As always, feel free to contact me with any questions.

Russell Bailyn

Premier Wealth Advisors, LLC

14 E 60th Street, #402

New York, NY 10022

P: 212-752-4343 *231

F: 212-752-7673

rbailyn@pfawealth.com

Securities offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Financial Planning offered through First Allied Advisory Services & Premier Wealth Advisors, Inc. Premier Wealth Advisors, Inc is a Registered Investment Advisor. First Allied Securities & Premier Wealth Advisors, Inc. are not affiliated entities. 

Analyzing the Value of Life Insurance as an Asset

One of the more challenging aspects of advising clients about life insurance is helping them to recognize that life insurance is an “asset,” rather than an “expense”.  For many people, this view is a bit of a foreign concept in a world where other types of insurance (auto, homeowners, health, and liability, just to name a few) merely reimburse the policyholder for a contemporaneous, out-of-pocket, economic loss that the policyholder hoped would never occur – leaving the policyholder in the same economic position as he or she was in before the loss took place.  Life insurance is unique in the sense that it covers a loss that is certain to eventually occur:  It is not a question of whether the policyholder will have a claim, but instead when.  As long as the policy is maintained, the stream of premium payments will ultimately result in the policyholder’s receipt of the death benefit – which allows for a rate-of-return calculation that is inapplicable to other types of coverage.

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Simple Ratios and Rules of Thumb for Financial Planning

I often get asked quick questions such as “how much house can I afford?” or “how much life insurance do I need?”  Personal finance is a very subjective science and the answers can vary widely depending on who is doing the asking.  That said, it’s nice to have some basic rules of thumb which can be used to make sure you’re not totally off base when making a quick financial estimate.  Below are a few of these rules which apply to saving, spending, housing, and insurance.  Enjoy!

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3 Reasons to Rollover Your 401K

I’m a big fan of rolling over 401K plans into IRA accounts.  For many people, a 401K plan will represent one of their retirement income ‘prongs’ along with after-tax savings, pensions, and social security.  Many workers of various ages have money in 401K plans because they’ve learned that salary reductions into 401K plans will reduce one’s taxable income and grow those funds on a tax-deferred basis until those funds are withdrawn during retirement.  It’s a very widely used retirement savings vehicle.  So why not just leave those funds in your 401K if you switch jobs or retire?  I’ll give you my take on this below:

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2014 Mid-Year Market Recap and Outlook

2014 is looking smooth right now for stock and bond investors.  The year didn’t start off that way with a fairly steep decline in February, but like all the dips of 2013, it was ultimately another buying opportunity for those able to look past the noise.  Just this past Wednesday, Janet Yellen reiterated the Federal Reserve’s intent to end quantitative easing by this Fall – removing the economy’s training wheels –  and even talked about reducing the economy’s longer term “target interest rate” to 3.75% from 4.00%.  That’s good news for stocks and housing, and hopefully for the unemployed as well.

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Building a Standard for Financial Advice

There was a good article in Research magazine last month about the business of financial advice and how it needs improvement.  Research is an industry publication so it’s not the sort of article which would be distributed to the general public.  That said, I’ve read articles in consumer publications which comment on many of the same points.  Part of the problem is that the financial advice industry doesn’t really have an official designation, perhaps one that is state-issued, required for  inclusion in the industry, and that has a rigorous set of practice standards.  Accountants have the CPA, financial analysts have the CFA, lawyers have the JD, etc.  Some might say that people in the business of giving financial advice have the CFP (Certified Financial Planner) designation, which they do, but that isn’t a requirement for inclusion in the industry.   In fact, many people don’t know about or distinguish between the various financial planning designations which exist.

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Should You Buy Bonds at a Premium?

You buy a corporate bond at par or at a discount, right? It just seems like common sense. What would lead you to purchase a corporate bond at a premium? Actually, investors do sometimes buy fixed-income securities with coupon rates above current market rates. If interest rates are on the way up, buying a premium bond when interest rates are still relatively low represents a defensive play. The move does involve risk, however.
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When Should You Apply for Social Security?

When it comes to the question of Social Security income, the choice looms large. Should you apply now to get earlier payments? Or wait for a few years to get larger checks? The first thing you want to do is consider what you do and don’t know. You know how much retirement money you have; you may have a clear projection of retirement income from other potential sources. Other factors aren’t as foreseeable. You don’t know exactly how long you will live, so you can’t predict your lifetime Social Security payout. You may even end up returning to work again. In terms of your eligibility to receive full benefits, the answer may be found on the Social Security website. If you haven’t already created a profile, you should do that.

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Financial Planning for the Middle Class

It’s no secret that financial advisors prefer to work with wealthy people. Speaking from experience, managing a $2,000,000 account only takes a little more time and energy than managing a $500,000 account, yet the $2,000,000 account generates nearly 4x more revenue for the advisor. An advisor who fills their practice with smaller accounts will deal with more headaches while receiving lower compensation. I’m pointing this out to illustrate why advisors don’t spend as much time going after the middle class. That doesn’t mean middle class people don’t need good financial advice! They very much do.

Fortunately, many advisors (at least in the independent channel) are willing to work with people that aren’t multi millionaires. In many ways they need more help because planning their eventual retirements, how they might pay for kid’s education costs, etc, is much more of a careful balancing act. So don’t be shy about getting some good financial advice. We all know navigating everything from investments to taxes to estate planning and life insurance requires a huge amount of knowledge which many people don’t have.

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New York Financial Planner – NYC Financial Advisor