Design Your Future Today

It’s December and before the holiday parties kick off, this is a great time to look back on the past twelve months. So for just a few minutes, set aside the tinsel, cocktails and holiday cheer to review your year. Your future self may thank you!

The best way to evaluate this ending financial year is to ask yourself some questions. Hopefully you had a good year and this should be no more than a tweak of this year’s success. If your year was less than stellar, you may need to take a hard look at what went on.

Here are some questions to consider to 

Design Your Future Today

and ensure that 

2017 will be your best year so far!

What bad habits are preventing me from being financially successful or stable?

To become wealthy or build your wealth, you may need to modify your actions and behavior. Don’t allow the good you have achieved, such as saving or investing, to be negated by any bad financial habits such as over spending or debt.

You can’t build or maintain wealth, without creating an environment of positive thoughts, surroundings, habits, and behaviors. Replace any negatives in your life with new positive people, thoughts, and behaviors. The best way to do this is to clean house. Just as you can’t add more books to a full shelf, eliminate or pare down the negative or excess and make room for the good and beneficial to flow in.

What are the habits of those successful people around me that I need to emulate?

Part of reorienting yourself towards greater success is to look at the people around you. Motivational speaker Jim Rohn famously said that we are the average of the five people we spend the most time with. Is your circle lifting you up or dragging you down?

This doesn’t mean you need to immediately stop seeing your childhood friends or run after those who are more successful than you. It does mean that you should re-orient your contacts and behavior to be more like those you know who you admire or are significantly more successful than you.

Be cautious around people who are negative. Even though they may be your best friend, don’t get sucked down that vortex of negativity. It uses a lot of energy and will never produce positive results. If they are truly in need, you can serve them much better once you have created your own success and wealth.

If you think that is unfeeling, remember the airline safety instructions: Secure your own oxygen mask before attempting to help others. You cannot successfully help anyone if you are in distress yourself!

What financial habits do I need to improve to be, or become, financially comfortable?

This is a good time to review your finances and prepare for next year. Good goals are to eliminate any debt and to have sufficient savings. A good benchmark of a healthy savings account is to have enough to cover living expenses for six to nine months.

Surprisingly, most people don’t have a plan to save income on a regular basis. Some people think that their income from work will be sufficient to cover their expenses. This may be true – until some life event such as illness or job loss affects the family. It is not negative or inviting misfortune to think that there may be some large expense in one’s future. Most people will have them – even if it is something expected - like a roof replacement. It is prudent to have savings and these situations are exactly what savings are for. The worst-case scenario is that a person will be prepared in advance for retirement.

Another habit worthy of adopting is insurance. For the sake of your own peace of mind if not for your loved ones, insure your valuable possessions such as your home or car. Perhaps your most asset is your ability to provide for your family. Even if you don’t have a family now, a term life insurance policy is a good way to provide for your family’s future needs in the event of a tragedy.

Where should I focus? 

Success is often defined as a high paying position. True success would be better defined as financial freedom to pursue one’s passions. 

In order to do this, a person must design their own life’s plan.

Most people would prefer to enjoy their leisure time following personal interests. However, using some of that time now to master skills that will increase your financial health for your future will ensure that you will be the master of your own destiny and able to enjoy your time for years to come.

“If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much. 

-Jim Rohn

It takes discipline, but living within one’s means is key to accumulating wealth. Being financially responsible in the present is a good way to ensure a comfortable future.

These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.

Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs and desires. Get the help you need to achieve financial freedom. 

Above all, believe in yourself and believe that you will achieve your goal!

_________________________________________
Sources:

Lynda at Sonoran Sun | Private Equity Investments 

Seven Strategies To Grow Your Funds

This is a wonderful time of year  when most people are in a very generous mood. It is a joy to see the happiness and excitement about the upcoming holidays. There is a lot of holiday shopping going on, combined with a lot of spending.

The extreme commercialization of the holidays is astounding. We have become conditioned to spend, spend, and spend. It is sometimes surprising that people are so willing to purchase luxury items or needless things that will be under-appreciated or even forgotten in the new year. Many will even go into debt during this time of year.

This is the worst kind of “fix” imaginable! While being generous can be a great “high,” the repercussions in the new year may be staggering. If this shopping is done with credit and the bills are not paid in full, interest rates of up to 29% will certainly rob you of all joy in the new year.


Perhaps the best gift you can give to your family and loved ones is being financially secure. The peace of mind that comes with being debt-free will be appreciated. Being debt free will open new possibilities for the future and offering a sound financial future may be the greatest gift of all!

It's not about turning into Scrooge or being the Grinch.

Taking care of your family's future is the best way to demonstrate your love.

There is no secret or magic to have healthy finances. It takes a willingness to change, work and discipline. Understandably, this can feel even harder this time of year when clever marketing keeps tugging on your purse strings.

If you are not sure how to get onto the path of financial freedom, it may not be as difficult as one might think.

Here are seven strategies to help you grow your funds.

1. Pay Yourself First

If you are tempted to spend your whole paycheck, initiate an automatic transfer into a separate account. For most people, out of sight equals out of mind. Train yourself to live on less, if need be, but deposit a portion of your income into your savings each and every paycheck.

Mark that account for investing and don’t touch it until it is time to invest. Find out the minimum amount your financial planner will invest at one time. Keep depositing into a high interest account until you have saved enough to transfer it.

Don’t wait until you have a huge sum! Your financial planner should be able to invest it for far greater return than the high interest account. So, don’t keep your precious funds idling!

2. Pay All Your Bills

Most people pay their bills on time. This avoids any penalties and shows well for your credit score.

To get a handle on your bills it may be wise to divide them into needs and wants. Examples of needs are housing, electricity, water and food. Insurance, phone, Internet service, and any other regular bills should be paid on time to avoid any interest, penalties or other charges. Today, most issues are with the wants of the package level for many of these services. Generous cell phone data plans (instead of voice and text), unlimited Internet (as opposed to a basic account) or expansive cable packages (that you may not even watch) and dining out or other entertainment.

If you are struggling to pay your bills on time, it might be worthwhile to see what expenses can be cut until you are back on track. Look for items you can cut or reduce so that you are not scrambling to find money. Reducing your wants are a good place to start. Review what you think you need compared to what you actually use. The truth of your actual consumption may surprise you. 

If you can do without, cut or reduce the service. If you have money left over in your budget, use it to treat yourself.

Most advisers would cringe at this, but I feel it is OK to use a credit card to earn points while you are paying bills if you do not carry a balance from month to month. Getting cash back rewards is a nice way to treat yourself with a splurge. If the reward is for travel or merchandise, make sure you understand the terms of the rewards and that it is something you can use (and would have bought anyway).

Never be tempted to spend more in order to get these points.

3. Separate Your Spending

Paying your bills is easier if you can separate your spending. Most utility bills are predictable from month to month. If you live in an area where utilities get high with summer heat or winter cold, find out if your utility company offers equalized payments so you can budget for your bills. This keeps you from getting behind with any surprise seasonal increases in your billing.

Another way to separate your spending is to have a set amount to use every two weeks for discretionary items - kid’s activities, entertainment, dining out and new clothes. This may help to keep your spending in check because these are the areas where most people get into trouble with impulse purchases.

Keep a separate card for these monthly expenses that is always paid in full.

Have a separate card for emergencies. While just about everyone has an emergency from time to time that may require carrying a balance for a month or two, there is no reason to pay interest on your regular payments because of one of these unexpected events.

It is also important not to habitually overspend or view credit cards as “free money.” The only one getting free money is your creditor when you pay interest!

If you carry a balance, you are robbing your future self of money.

4. Manage Debit Cards

Most debit cards charge a transaction fee per use. If you have a banking plan that offers you some free transactions, by all means take advantage of them – but keep track to avoid any fees for debit withdrawals over the limit.

Maximize any free withdrawals by taking out cash once a month - or less often. This is important if you are charged a fee for your debit use after your limit. Instead of withdrawing weekly, make one withdrawal for the month and divide up the cash for each week so you are not tempted to spend it all at once. You will save yourself three withdrawals for other uses!

Perhaps the least advantageous catch of debit cards is that it can be difficult to keep track of spending. Most banks don’t describe what the debit transaction is for. It’s certainly convenient to use a debit card for that occasional unplanned coffee or lunch purchase with friends or colleagues, but don’t do this as a habit. If you do not keep your receipts to review your spending each month, you may be leaking funds without being able to identify the source.

5. Performance Review

If you are using credit cards, it is important to review these statements every month to make sure there aren’t any fraudulent charges. In addition, while you are reviewing these charges, make note of how much you are spending each month on food, clothing, entertainment and transportation – or whatever else you spend on.  Look for any areas that need improvement and revise your budget for future months.

Each month – or at least every three months – take the time to review your spending habits. Are you on track? Is there something that should be reduced or cut to keep your finances straight?

6. Pay Down Your Mortgage Before Retirement

Equity is a great nest egg. Paying off you house is liberating. You can channel those payments onto your retirement fund, or just have some breathing room with your monthly expenses.

Before you blow any of that money be sure that all other bills are paid off and that your emergency fund and home maintenance fund are topped off. 

In addition, if you are approaching retirement, you may wish to start a separate fund for any potential medical expenses.

7. Teach Your Kids About The Value Of Money

Help ensure your kid’s future by teaching them the value of money. Your kids should contribute to their college funding. This gives them a vested interest in getting through college with good grades by appreciating the cost of education.

A summer job is a great way to earn money and get work experience. It also gives them a sense of responsibility for their own future and to earn a degree that will enable them to have a satisfying career.

The best lesson you can teach them is that there are no free rides in life.

It takes discipline, but living within one’s means is key to accumulating wealth. Being financially responsible in the present is a good way to ensure a comfortable future.

These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.

Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs and desires. Get the help you need to achieve financial freedom. 

Above all, believe in yourself and believe that you will achieve your goal!

_________________________________

Sources:

Lynda at Sonoran Sun | Private Equity Investments 

Further Reading:

Design Your Future Today

Do You Recognize the 3 Myths of Financial Planning?

5 Things Kids Need To Know About Money

5 Tricks To Treat Yourself With Extraordinary Wealth

It’s fall and a great time to review this year’s performance and to start planning for next year.  October is the perfect month to do it. This weekend is well in advance of any holiday planning and partying for the coming months. It is also far enough along to evaluate how successful your financial goals have been this year.

For some people, that thought may be as scary as a Halloween Haunted House!

It really doesn’t need to be! If you look closely at how a haunted house is put together, it’s probably not that frightening at all!

The same is true for building wealth. There are a few secrets too, so let’s demystify them right now!

Expenses Are Like Apples

It is difficult to follow an individual apple when a whole bunch are floating around in one tub. The same can be said of your monthly expenses! There is no way to know what your expenses are if you don’t pin them down and keep track of all the details.

Just drawing from your bank account when needed doesn’t help you distinguish where your money is going. It certainly doesn’t help you track that bad apple that could be costing you more each month than you think!

You must have a budget! This is not a dirty word! It is simply a list of planned expenses within a month. You must know the budget, and you must understand the budget.

It should include all the basic items such as housing -  whether it’s rent or a mortgage, utilities and insurance, healthcare, car or other travel expenses, food and sundries, vacations and visits with family. Your budget must include money for you to enjoy yourself as well. Add anything that is a particular interest to you such as entertainment and hobbies, pets and their care, and, don’t forget some room for unexpected expenditures.

Compare these expenses to your income and adjust accordingly. Remember that you will also need to set some of your income aside for your emergency fund (if it is not already topped -off) and for your future. The purpose of the budget is to ensure that you have the ability to stay on track with your financial goals, enjoy life and even create additional wealth.

Beware The Double Edged Blade!

Debt is like a chain saw. A chain saw can fell a tree with a few skillful swipes, or it can reduce something to a useless pile of dust! Debt can be skillfully leveraged to make you rich, but it is more likely to bankrupt you if you are not careful.

The best way to live within your means is to use cash. That doesn’t mean you need to carry around a stacked wallet. If you have credit cards that you can use responsibly and pay in full each month to avoid any interest payments, by all means collect those reward points!

If you find that you are carrying a monthly balance more than a few times a year, either reign yourself in or cut the cards! Paying interest to your creditor is robbing yourself of your future funds!

Save debt for business ventures where you can use it for a significant advantage over your competition. Otherwise, stick to cash - it will simplify your life.

Look At Yourself

Most people do not have a financial goal at all. Some have a vague idea that they will need money for their retirement, but the view changes drastically from day to day because they have never made a plan. It is like walking by a fun house mirror and seeing yourself distort. Most people will pick the view they like best whether it is realistic or not.

Are you accepting what you see in your financial future? Do you just have some generalized overwhelming number, like a million dollars? Or have you carefully considered what your annual expenses will be? 

While no person can see into the future, it is possible to take note and project your typical expenses, and anything else you plan to pursue in retirement.

Take the time to write it out and look at the estimated monthly and annual total. Your budget can be a great tool for this. These recurring expenses will give you a clearer idea of your undistorted target. This is a crucial step. How can you get focused, and make sense of your future when it is all warped out of shape with guesses and hopes?

Once you understand what your needs will be, it will be easier to know what contributions you will need to make to achieve this plan.

Distribute Fairly

Many people are familiar with the expression: You must pay yourself first. This is an important mindset to adopt when saving.

Most people think that a person must be very disciplined to build wealth. However, most people just don’t have that much discipline! Can you be satisfied with one piece of candy or one potato chip? 

Probably not!

But that’s OK. Discipline can be a mythical beast when it comes to creating your wealth. Find all the discipline that you can muster, and instead of promising yourself that you will save every month, use your discipline to setup an automatic savings plan. Have an amount automatically deducted from your income and sent to a separate account, such as your 401K, where you can not readily access the funds.

Don’t think of this as an emergency fund. An emergency fund (6 months of living expenses) should be a separate account. The emergency funds should be somewhat accessible. Your retirement funds should be virtually inaccessible.

Diversify

It may not be the best idea - or very satisfying - to wear the same Halloween costume as everybody else. 

In the same way, it’s probably not the best idea to keep all of your funds in the same place. By not diversifying, the investment can be subject to risk, or poor performance. This is especially true for the stock market, but can even apply to your savings account at your local bank. For healthy investments, it is best to diversify and hedge against any drop, bankruptcy or other financial misfortune. 

Diversifying your funds in a way where you rely more on compound interest than in market volatility. A good plan is to diversify your investments to ensure that you’re getting the best rate of return on your funds while staying within your comfort level for investment risk. A steady return may not be as exciting as playing the stock market, but it may help you get a great night’s sleep

Once you have placed some of your funds into safe, secure investments with a good return, it will become easier to invest more. The more money you make, the more opportunities you have to save and invest.

Rinse and repeat and your sacrifices will reward you with a life that can be enjoyed to the fullest! 

These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.

Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs and desires. Get the help you need to achieve financial freedom. 


Above all, believe in yourself and believe that you will achieve your goal!

_________________________________________
Sources:

Lynda at Sonoran Sun | Private Equity Investments 

5 Ways To Vet A Potential Investment

Most people know the story of the tortoise and the hare. 

As the story goes, tired of the Hare's boastful behavior, the Tortoise challenges him to a race. The hare soon leaves the tortoise behind and, confident of winning, takes a nap midway through the race. However, when the Hare awakes, he finds that his competitor, crawling slowly but steadily, has reached the finish line before him.

What does this have to do with investing?

The Hare, thinking that a swift departure is all that is needed, became complacent. The Tortoise, who slowly yet consistently advances, wins the day.

In today’s popular media, advertisers use a lot of pressure to get people to invest and invest quickly:

“Time is running out!!!”

“Start growing your savings today!!!”

“Make up for all the years you didn’t invest.”

“Social Security is running out!!!”

...and many other such calls to action. In most cases this is harmless – meaning the investor gets a little or no return. In other cases, a person could lose everything they invested.

 How is a person to know if an investment opportunity is really sound?

5 Ways To Make Sure 

You Have Considered All Aspects Of A 

Potential Investment

1. Never Make A Quick Decision.

You may have worked months or years to save those funds. Don’t make a sudden decision to place them. Although you may convince yourself you are thinking logically, and that you understand everything that was just explained to you, you may not be. Just because you don’t have any immediate questions, that doesn’t mean you won’t have some later that day.

No matter what, wait at least a day or longer to digest and think about the information. If you are being told that it is a limited time offer, or that “many other investors are waiting” recognize this as high pressure sales, or maybe even potential fraud.

2. Educate Yourself

Get data. In addition to learning more about the opportunity, find out the track record of the person offering it to you and the company they work for. Find out exactly how this product is going to help you reach financial independence. Don’t be shy or embarrassed. Ask questions — and expect complete answers.

3. Weigh It, Measure It And Make Sure Nothing Is Lacking

Create a list of outcomes. The good, the bad and the uncertain. Don’t just focus on the rosy return you are being offered. Make sure to write down at least a couple of ways this investment can go wrong (money locked in for a certain term, risky placement, etc.) and how much money you could lose (is the offering insured/backed/reputable?). If you think it's a sure thing and that nothing can go wrong, then that's a sure sign you need to dig deeper.

4. Talk About It

Discuss the opportunity with someone else. To do this, you have to actually understand something first so that you can explain it to someone else. second, you are getting feedback from someone who doesn't have an emotional vested interest from this decision.

5. Step Into Their Shoes

Don’t be swayed by grandiose promises of huge returns. In addition to asking yourself how this investment benefits you, also consider how the person or company selling it will benefit. Their motivation may not be in your best interest.

The Tortoise won the day by advancing slowly and steadily. Thinking more slowly and deliberately will help you with all your important decisions, not just financial ones. Doing so may not protect you from making mistakes in the future, but you'll make fewer and less costly ones.

These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.

Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs and desires. Get the help you need to achieve financial freedom. 


Above all, believe in yourself and believe that you will achieve your goal!

_________________________________________
Sources:

Lynda at Sonoran Sun | Private Equity Investments 

If Cash is King, Compound Interest is Queen

Most people have heard of compound interest.

Investopedia defines it as:

Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

In other words, you get interest… on interest!

The Power of Compound Interest

The Power of Compound Interest is that it accelerates your savings.  It’s a great way to put your money to work and watch it grow. When you earn interest on savings, that interest then earns interest on itself and this amount is compounded monthly. The higher interest, the more your money grows!

This chart shows the different returns depending on when the individual started to save. The difference between the red and blue lines is staggering. “Susan” (in blue) invests for only 10 years early in her career, ends up with more wealth than another saver “Bill” (in red), who saves for 30 years later in life.

Source: Business Insider

This difference is, of course impressive if one has the foresight to start saving in their twenties and thirties. For a lot of people that just wasn’t an option. Student debt or starting a family is often a priority for young adults. Saving takes a back seat. A lot of people decide that they will “make it up later” or do it when they “earn more when they get that promotion.”

From the example it is apparent that it is very difficult, if not impossible to make up for the delay. This leaves a lot of people frustrated in their mid-years and even fearful as they approach retirement.

While saving a modest amount early in life is probably the best approach, it is not the only way to save for retirement.

It is possible to “make up the difference” later in life, but not by throwing money at a savings account. With current interest rates, this will be about as effective as stuffing money under a mattress!

Another way to accelerate savings for retirement is to leverage available funds. Safe and secure investment opportunities that are backed by real assets and provide a significant return on a monthly basis can rapidly make up for an under-funded retirement account. By investing in tangible assets, these investments are not subject to Wall Street’s volatility. Returns over 5% are not uncommon, and real assets provide many additional benefits for the investor.

With these higher returns on secured investments it is possible to quickly make up for a late start in retirement preparation. By diversifying the portfolio, multiple income streams rapidly accelerate retirement accounts. In fact with a few well placed investments, some people find that they can replace their working income and retire early!

The best way to ensure a comfortable retirement is to leverage funds now. Smart investments now can yield substantial returns.

These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.

Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs and desires. Get the help you need to achieve financial freedom. 


Above all, believe in yourself and believe that you will achieve your goal!

To learn more, contact me to arrange a consultation! :)

_________________________________________
Sources:

Lynda at Sonoran Sun | Private Equity Investments 

Business Insider: These 3 Charts Show The Amazing Power Of Compound Interest