We’ll take your questions on saving for weddings, capturing gains versus saving in taxes, and underperforming IRAs.
(Click the featured times below to jump forward in the episode)
First Things First.
- 00:44 – In The News: Unemployment Rates Falling For Uneducated Workers
5:31 – Mailbag: Jerry Asks How To Invest For His Daughters’ Weddings.
- This is an interesting question in that Jerry indicates he’d like to invest for his two daughters’ future weddings. However, we really think you should be saving instead. Your savings are comprised of money that will be needed at a particular time. Therefore, you’ll want to be sure your money is still there. Savings can be used for things like a new car, a downpayment on a house, or a college education. Those dollars should most likely be kept in a savings or money market account somewhere. Investing on the other hand involves risk. Think about what would happen if you invested the money for your daughters’ weddings, the market subsequently tanked, and you were left with nothing to pay for them. You’d most likely be pretty upset, and your two wedding-less brides would certainly be less than enthused. Save for timely expenses; invest for the long-term.
7:51 – Mailbag: Kate Wants To Know Whether To Prioritize Gains Or Low Taxes.
- Kate wants to sell her stock in Apple. She wants to capture the gains she’s made through the years, but she’s worried about the tax bill she’ll incur. This is a bit of a Catch-22. Yes, you’ve made gains if you’ve held onto Apple through the years, and yes, you’ll have to pay the taxes on those gains. However, the alternative is to wait until the stock drops, and while you’d pay less in taxes, you’d also see less of a return on your investment. Therefore, we’d recommend Kate go ahead and take her gains. It might be smart for her to work with a tax professional and take her gains in chunks. Doing so might help to alleviate her tax burden.
10:17 – Mailbag: Alec Asks Why His IRA Is Underperforming.
- This is a tough one to answer. It really depends on what your IRA is invested in. If you’re IRA is invested in a CD at the bank, then you should expect to see a low yielding investment. Furthermore, if your advisor has put you in a conservative account, you could also be seeing lower returns. Because of our current interest rate environment, conservative accounts have been struggling the last couple of years. Compared to the market, their growth has been practically stagnant. It really just depends on how your money is invested.
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Good News, Bad News
Sometimes you get good news and bad news at the same time. Which one will outweigh the other? More times than not, you are better off than you expected but you won’t know until you ask a professional. In this episode, we talk through a number of financial scenarios that can bring a bit of both good and bad.Read More
A 401(k) is a highly valuable, widely used investment asset for many people. But what should you know when you set one up or contribute to one? In this episode, we’ll talk through some of the things you’ll want to consider when using this powerful investment tool.Read More
Every generation has had a different experience and are currently at a different life stage. In this episode, Eric talks through some of the financial challenges that Millennials, Gen X, and Baby Boomers face. Understanding and acknowledging these different challenges can help you better plan according to where you are in life.Read More
Advisor Pet Peeves
We all have pet peeves, so in today’s episode we talk about some pet peeves financial advisors have. Eric shares his experience as a financial advisor and sheds light on some things in the industry that can negatively impact both clients and professionals. From cookie-cutter financial plans to hidden fees, these things can really rub you the wrong way.Read More
Grading Your Financial Competency
Financial competency is something that is not taught nearly enough. As an advisor, Eric focuses on teaching not only strategic investing decisions but also the basic foundations of money. It starts by knowing how much you have. Then, ask yourself, how much do you really spend? It’s easy to spend more than you realize, so getting that in check can make a huge difference.Read More
Financial Lessons from Yogi Berra
What kind of financial wisdom can we take from a baseball player’s quotes? Quite a bit! Today’s quotes from Yogi Berra have a bit of humor and a lot of truth when it comes to your financial plan. From navigating annuities to planning for inflation, Eric shares how these quotes can bring a lot of meaning and understanding to our finances.Read More
Mailbag: Should I be Worried about Investing in a Bank?
You may have seen the news about some bank issues with banks like Silicon Valley Bank. Is that cause for concern? If you have money in the bank, Eric explains how much is covered and what you can do to protect yourself. With any investments you make, realize which of the three components you’ll have: safety, liquidity, or growth.Read More
Ways to Ruin Retirement
Building a successful retirement requires careful planning and wise decision-making. Unfortunately, it’s all too easy to undo all of that hard work by falling prey to common pitfalls. Rather than risking the enjoyment and security of your golden years, we’ll discuss some ways to avoid these mistakes and secure your financial future in this episode.Read More
Every once in a while, financial concepts or strategies get misunderstood or misconstrued. It’s important to understand what you have and why you have it. On today’s show, we break down some financial ideals to find the “mistruths” or lies that can mistakenly be adopted.Read More
What’s the Difference? Traditional IRA vs. Roth IRA
Roth IRAs have been around for about 25 years, but a lot of people still don’t know how they differ from a traditional IRA. Understanding the difference between the two will help you determine which option is best for your retirement goals. In this episode, Eric shares what you’ll want to know about a Roth IRA and when to use it.Read More
Leave a Comment