The Golden Rule for Financial Success

This seemingly simple task is nearly impossible for many of us to do consistently and successfully. But, if you learn the rule early and stick to it, you will be well on your way toward financial freedom. So, what is the Golden Rule? Spend less than you earn.

Spend < Earn

Many of you working with us already know the rule. However, be sure to share this essential advice with your kids and grandkids to help set them up for financial success.

If this is the first time you are hearing this advice, pay attention. Spending less than you earn is the first step toward creating a REAL financial strategy. If you spend more than you make the only place you can go is into debt. When your debt becomes unmanageable you lose your financial independence. This means you may have trouble affording to do the things in life you want to.

The Benefits

When you spend less than you earn you can have money to:

My Advice

Regularly set aside money the same way you would pay any other bill. By doing this, you carve out savings from what you earn as if it were an expense.

“Never Spend Your Money Before You Have It” -Thomas Jefferson

Think of it as the cost of purchasing your financial freedom! As a rule of thumb, aim to save at least 10% of what you make.

What to Do if You are in Debt?

If you are deep in debt, get educated about your money and create a plan to dig out. You will need to find ways to:

  • Decrease your expenses
  • Maximize your savings

Online tools like First Step Cash Management, YouNeedaBudget.com, and Mint.com can help you monitor and control your cash flow. In addition, clients of Weiss Financial Group can track their spending in their Secure Client Website. I’ve found that these online tools really help you understand where your money is going so you can make informed decisions about your spending habits.

Video:

If you know anyone that could benefit from this advice, feel free to share this video with them. Good luck on your journey toward financial independence.

For more financial planning tips, download my free report: “8 Steps to Organize and Optimize Your Financial Life”. Thanks for reading!

3 Important Tips To A Healthy Retirement

Your Health & Your Wealth

This is a guest post by John Praino, Co-Owner of Training for Warriors Mahopac

You’re retiring!

You’ve made the announcement.

You’re family, friends and co-workers have thrown more parties and functions than the Yankees did for Derek Jeter.

But are you ready?

Just as you proudly grew your financial nest egg, hopefully you’ve also invested in your health.

How do expect to insure a secure retirement without your health?

How do you expect to enjoy all of your hard work if you’re going to the doctor the majority of those golden years.

So, investing in your health is just as important for your bottom line as investing in your 401(k)

A major life change like transitioning into retirement can be stressful, even if retirement is a happy and welcome change from working.

So what’s the secret?

Start now!  You’ve already planned for your fiscal future, why should your physical future be any different.

Here are 3 tips you can use to stay healthy as you move into retirement and beyond.

1. Get Moving and Stay Moving:

Regular physical activity also improves functional abilities we need for daily living.

These benefits are both physical and mental.  Physical activity improves mood and can create more energy.

Regular physical activity can reduce your chances of diseases such as cancer and Heart disease. It will improve balance, agility and strength.

Older adults can even increase muscle and bone strength through using their major muscle groups at least twice per week.

Age means nothing! staying active will allow you to feel healthier and enjoy life more than ever!

In the years before you retire, I would suggest developing a routine of regular physical activity that will carry on into retirement.

When you retire, your daily routines will certainly change.  This change can be a challenge; one of the best ways to adapt to retired life is to follow fun and fresh routines that include physical activity.

Here are some tips:

  • Do what you love to do. This could mean activities you have done for years, such as walking, swimming or tennis – or something new and different like Training For Warriors or yoga.
  • Lift weights.
  • Find a partner or a group of friends who enjoy similar activities. This can help motivate you!
  • Take advantage of available times while others are working and schedule your activities to avoid busy times on the golf course or ski trails, or at the swimming pool and gym.
  • Be active with your family, take your kids or grandchildren walking, hiking camping, fishing, cycling or even kayaking. Get involved with their lives and what they’re doing.
  • Aim for at least 3-5 days of physical activity each week, remember it doesn’t have to be super intense everyday.  Mix your and match your activities, keep it fresh!

 

2. Healthy Eating:

Are you looking to spend all of you money fixing problems caused by a poor diet?

I ask because your diet greatly influences your long-term health. I’m not saying you can’t enjoy yourself and never have some of your favorite (but less healthy) foods. However, you should pay attention to what you eat.

Sugar and Ultra-Processed foods are making us fat and shortening our lives.  Live happier and healthier by eliminating all processed foods such as grains, sugar and industrial oils.

Fruits and vegetables can help your health, as can nuts, fish, and other heart-healthy foods. Also, consider “brain foods” like salmon and blueberries. These can improve your mood and help your brain avoid deterioration.

I have profiled healthy food options off of the TFW Warrior 20 nutrition checklist and broken down the foods into Proteins, Carbohydrates & Fats.

Avoid spending your money on future medical bills and start incorporating these foods into your diet.

Proteins:

1. Lean Meats

Including meat in a well-balanced diet is a way to get a sufficient amount of high-quality protein. You don’t need to give up meat just because you’re trying to lose weight. The key is to stick with lean meats because they contain less total fat, as well as lower amounts of saturated fats.

Examples: Organic Chicken & Turkey, Grass-Fed Beef, Lamb & Bison,  Look for phrases like “grass fed” (beef, bison) “free range” (chicken, turkey), “organic” (all meats)

2. Wild Caught Fatty Fish

Fatty fish is high in protein and provides heart-healthy omega-3 fatty acids. If it’s not wild caught don’t eat it!

Examples: Salmon, Sardines, Mackerel, Anchiovies

3. Eggs

Eggs are a nutritional powerhouse. The white packs a lot of high-quality protein and the yolks healthy fats & cholesterol as well as micronutrients like vitamin A, calcium, and phosphorous.

If you can afford it, look for local varieties of pasture raised eggs. Try the farmer’s market or gourmet grocery stores. If not, at least stick with organic, cage free, free range eggs. At  the very least they weren’t packed into cages and pumped with drugs. These eggs tend to be pricey however your health is worth money.

Carbohydrates:

This just in….Carbs are not the ENEMY! If you are a person that likes to exercise (and you all should be that person) then a low-carb diet for a long period of time may hurt more than it helps. Reducing your intake of healthy carbs can lead to a slow metabolism, lower levels of muscle/strength-building hormones & higher levels of stress hormones. As a result your weight loss will probably slow down or stop.

1. Sweet Potatoes & Yams

Tubers like sweet potatoes are loaded with carbohydrate energy.  They are loaded with Vitamin A, which is important in the synthesis of protein.

2. Quinoa

Known as the “mother of all grains” by the Incas.  Quinoa is higher in protein than most grains and can be a great replacement for rice.  It is also gluten-free making it an option for those of us with gluten intolerance.

3. Legumes

Beans such as Lentils and Kidney contain complex carbohydrates as well as fiber & protein.  Beans are loaded with antioxidants and minerals such as magnesium, iron zinc & potassium.

* Beans are difficult to digest so if you are a person that likes to eat beans I would suggest soaking them prior to consuming.

 

Healthy Fats:

Our bodies need healthy fats. They help slow down the digestion process so our bodies have more time to absorb nutrients, and help provide a sustainable level of energy.

1. Coconut Oil

Coconut oil is one of the few foods that can be classified as a “superfood.”

It  has a unique combination of fatty acids that have a positive effect on fat loss and better brain function. Other health benefits include skin care, stress relief, cholesterol level maintenance, boosted immune system, proper digestion and regulated metabolism.

2. Nuts

Many nuts are rich in mono-unsaturated & omega-3 fatty acids. Omega-3 fatty acids help with inflammation and brain function.

Examples: Almonds (almond butter), Cashews (cashew butter) Walnuts, Pecans, Macadamias, Pistachios.  Avoid processed nuts as they lose a lot of nutrients instead opt for raw nuts.  The same goes for nut butters, avoid nut butters that are high in hidden sugars and hydrogenated oils.  Look for the most minimally processed options possible.

3. Seeds

Seeds, like nuts are a good source of fat.  Seeds are rich in fiber and can help you feel fuller longer

Examples: Chia, Flax, Hemp and Pumpkin.

 

Warrior 20 Graphic small

Start building your healthy diet and DOWNLOAD our Warrior 20 checklist FREE.

Start incorporating this important checklist in your diet: http://bit.ly/1nkwu7s

3. Attack Your Bucket List:

How often do you say you wish you had more time to do amazing things like drive cross country or sky dive.

Well you will when you retire!

Retirement opens up doors and once in a lifetime opportunities for bucket list activities to become a reality. You can do anything and become anything that you want. If you’ve always wondered what would have happened if your life had taken a different turn, this is your  opportunity to make that turn and see what happens.

Start fresh!

Today people that adopt a healthy lifestyle can live well into their 80’s and 90’s. So get out and hike the Appalachian Trail , go back to school, learn to play an instrument or open a business like Colonel Sanders who started Kentucky Fried Chicken at age 65!

With a healthy body, strong mind and solid planning you can look forward to a happy, active and fulfilling retirement.

How to Take Advantage of A Down Market

This article was originally published on NerdWallet.com

You’ve heard the old saying about investing success: Buy low and sell high. It sounds easy, doesn’t it? The problem is, no one knows exactly where the peaks and valleys are until after the market has reached them. That’s why it’s important to have an investment plan and stick to it.

How can the average investor find success in buying low and selling high? Here’s the secret: continually contribute to a diversified portfolio and rebalance it when your portfolio’s allocation falls outside its target range.

The Secret: Dollar Cost Averaging

Dollar-cost averaging is the key to a long-term investment strategy. It means contributing a set amount of money to your portfolio on a regular basis.

If you contribute to a 401(k) or 403(b) plan, you’re already doing this; every time you get paid, a certain percentage of your paycheck is deposited and immediately invested into your portfolio. There’s no consideration of market conditions. It doesn’t matter if the market is up or down; your money will get invested.

Here’s where the magic happens with dollar-cost averaging: When the market is down, it’s like getting your investments at a discount. You get to buy more shares of the same investment for less money.

Compare that to the alternative — a lump-sum portfolio, in which a larger sum is invested at one time, without regular additional contributions. With lump-sum investing, the available cash has already been invested, and taking advantage of sale prices becomes more difficult.

How Do I Benefit When the Market Recovers?

When you’re contributing regularly to your investment portfolio and purchasing shares at a discount during a bear market, you increase your upside potential when the market recovers.

When you take a lump sum of money and invest it, you initially have many more shares in a given investment than you would have if you spread those contributions out over a longer time. When the market declines, your lump-sum portfolio declines with it, but you’re not buying any additional shares at a discount like you are with your dollar-cost-averaged portfolio. You could end up with the same number of shares in both portfolios, but the average price per share in the dollar-cost-averaged portfolio will be lower.

This is why your 401(k) and 403(b) portfolios will seem to perform better than your lump-sum investment portfolio. In fact, they often do perform better because, over the long term, you end up purchasing your investment shares at a lower overall cost per share. So when the market recovers, you can be proud of yourself for buying at the bottom.

Stay Invested for the Long-Term

Dollar-cost averaging gives you an advantage over lump-sum investing, but in either case it’s important to stay the course and stay invested. Heading to the sidelines during market volatility greatly reduces your chances of long-term investment success.

The key phrase here is “long term.” If you are investing for the short term, market volatility is not your friend, and frankly, you probably shouldn’t be investing at all. Having a short-sighted view of the market causes many to abandon ship at the worst possible time and potentially end up buying high and selling low — the exact opposite of what you should be doing.

If you do have a lump-sum investment portfolio, don’t fear. You can still take advantage of market downturns by rebalancing your portfolio. What this means is that you move money out of the best-performing asset classes — whether they be stocks, bonds or Treasuries — and into the underperforming asset classes. This allows you to maintain your target asset allocation and helps you avoid being “overweighted” in an asset class that has performed well but may decline in the future. This is the essence of buying low and selling high.

Be the Tortoise

Although market downturns are no fun, they’re inevitable. The reason you have the potential to receive higher rates of return on your investments is because you take on the risk of losing money.

The best advice is to be the tortoise, not the hare. When you’re in the accumulation stage and building your nest egg, practice a slow and steady approach to investing. Stay the course, no matter what the markets are doing.

On the other hand, during the decumulation stage of your portfolio, you may need to minimize your exposure to equities to protect yourself from not having the money when you need it. Most importantly, during this stage, make sure your retirement income plan accounts for the inevitability of market downturns — and follow through on that plan.

I hope this gives you the confidence you need to stick to your investment plan no matter what is happening in the markets. If you don’t have a plan, start building one and set the goal of seeing it through.

For more financial planning tips, download my free report: “8 Steps to Organize and Optimize Your Financial Life”. Thanks for reading!

Top Money Posts: Week of March 7, 2016

My Recent Posts on Nerdwallet’s ‘Ask an Advisor’

From Around the Web

  • Market downturns can have an adverse affect on a retirement income plan. Here are my tips for dealing with this inevitability.
  • Here’s a quick look  at your other options for college savings besides a 529 plan.
  • Retiring at 40 is a tough goal to achieve. Learn 5 lessons from people who actually pulled it off.
  • Many people have concerns about paying for traditional long-term care insurance policies since they may never use them. To combat these concerns, insurance companies have developed hybrid LTC policies that combine life insurance with long-term care. Are they right for you?

Great Resources

  • Need a simple and easy to use tool to help you keep track of your budget. Take a look at youneedabudget.com (YNAB). Great for people who love tech that can help improve their life!
  • Got taxes on your brain? The IRS has a pretty good YouTube channel. It’s particularly worth checking out their videos on ID theft.
  • Use our retirement Check-Up tool to see if you are on track with your retirement savings goals.

If you like this post, you might also like my FREE report: “8 Steps to Organize & Optimize Your Financial Life”. Check it out here!

Is There a Magic Number For Your Retirement Savings?

Sorry to burst your bubble, but I don’t believe in the ‘magic number.’ Unfortunately, your wants and needs along with the unpredictability of life cause your ‘number’ to change over time. If you are not regularly assessing your financial situation, having a single number stuck in your head could be counter productive to your success.

So What Do I Do Now?

Instead of focusing on your ‘magic number’, I recommend building a solid retirement plan, setting a goal to save 10% -20% of what you make, invest your money, and regularly review and update that plan. In order to more accurately determine how much to set aside for retirement, you need to have a clear idea of how much you are spending annually to support your current lifestyle. Next, you will need to think through how those expenses may change in retirement. Will you move to a less expensive location? What about commuting expenses? How often will you need to purchase vehicles?  Once you’ve thought through those possibilities, or any others, you will want to think about the lifestyle you hope to have in retirement. Do you want to travel or are you a homebody? Do you want to join a club or take up a new hobby? Think about how much each of these activities may cost and work that into your plan.

What Else Should I Look At?

The next piece of the puzzle is to take a look at any guaranteed income you may have from Social Security, pensions, or annuities. The more guarantees you have the less you’ll need in savings to replace your income during retirement. Also, it’s a good idea to think about whether you will continue to do some type of work to assist in meeting your income needs. My final recommendation is to factor in your health. Are you relatively healthy or do you need to plan for additional medical costs during retirement?

Run the Numbers

Truthfully, the closer you get to retirement the more accurate your projections will be. However, when you are younger you can still work with approximations and run monte-carlo simulations on your numbers. Just be sure to revisit those numbers on a regular basis to account for changes in your income, spending habits, and lifestyle. As a rule of thumb, you will typically need to replace 70%-90% of your pre-retirement income to maintain your pre-retirement lifestyle. But, keep in mind, this is merely a rule of thumb. Your personal needs can vary depending on the factors I just discussed.

How much you’ll need for retirement is directly dependent on the lifestyle you envision. If you are willing to make some sacrifices or have enough guaranteed income you may not need to save as much. On the other hand, for most people, if you want to maintain your current lifestyle you’ll need to save and invest regularly and monitor and adjust your retirement plan on an on-going basis in order to create the retirement lifestyle of your dreams.

Want a quick assessment of where you stand for your retirement? You can use my Retirement Check-Up tool to see how you are doing right now and if you might need to make any adjustments to your plan.

For more financial planning tips download my free report: 8 Steps to Organize & Optimize Your Financial Life. It’s packed with helpful advice, useful tips and valuable resources.

To learn what I can do for you visit www.weiss-financial.com.