by Jonathan G. Cameron, CFP®

As a Millennial, you are in a unique position to start strong when it comes to your money. Financial planning for millennials looks very different than planning done for Baby Boomers, and requires special attention.

Top 3 Financial Priorities for Millennials

• How do I pay down my student loans?
• When do I begin saving for the future?
• What is the best way prepare to buy a first home?

In a nutshell, these 3 are the heart of financial planning for Millennials.

Who Does Financial Planning for Millennials?

Not many financial planners take on younger clients because millennials rarely meet advisor’s investment asset minimums. In other words, who wants to work with a Millennial with no money? While this may be true in most cases, their are financial planners who specialize in helping Millennials manage their money. Look for advice-focused, CERTIFIED FINANCIAL PLANNER™ professionals who focus on debt payoff strategies, wealth building rather than...

by Jonathan G. Cameron, CFP®

According to CNBC, there is more than $1.2 trillion in outstanding student loan debt, owed by 40 million borrowers, who have an average balance of $29,000. * Do you have student loan stress?

Do You Have Student Loan Stress?

Large student loan balances can be a significant cause of stress. Stress over loans can lead to resignation. “I’ll have student debt forever” is a refrain I hear from some clients. Resignation leads to denial and even inaction. Are you in this progression? Does this sound like you or someone you know? Are you a number of years out college or graduate school, yet it doesn’t seem like your loan balance is coming down?

Student Loan Stress: Don’t Deny it; Own it

Your mindset about student loans is crucial. Most importantly, own it. The loans are yours. You chose to make a strategic investment in yourself by taking on student loans. Accept this fact, and make a plan of attack to repay the loans. The #...

by Glenn J. Downing, MBA, CFP®

Can I Time the Markets? You can certainly try.  But remember the expression:  one man's ceiling is another man's floor.  
When the stock market becomes volatile, people often wonder, Is this a good time to go in? Or should I sell out?  What they are doing is trying to time the markets – they are making educated (or emotional) guesses as to market peaks and valleys, and investing accordingly. I’d put it to you that market timing doesn’t work, at least not consistently. If you look at a line graph in the first quadrant, there is nothing to say that the next data point will be above the last point, at the last point, or below the last point. Trends are real and visible, but they change.

We certainly understand the impetus behind market timing. You as an investor don’t want to put your money in on what turned out to be a high day for the year, and conversely you don’t want to have sold at what was...

Glenn J. Downing, MBA, CFP®

In what should I be invested?

We make no recommendations before completing our due diligence. Only after we have a clear picture of your risk tolerance, income needs, tax situation, time horizon, and cash flow position do we make any investment recommendation.
There’s no such thing as a perfect investment. Each investment product on the market was designed to accomplish a specific purpose and has its own risk and reward characteristics. Whether it is a managed account with mutual funds, ETFs, individual securities, bonds, annuities and insurance products, our job is to match you with the appropriate vehicle.

Will you do socially responsible investing for me?

Yes of course. There are several mutual fund companies that screen their underlying investments by various social and/or religious criteria. 

How much do I need to retire?

We can do a projection for you. For example, say you want to retire 10 years from now; you want to have an income of...

by Jonathan G. Cameron, CFP®

Many of my readers participate in an employer's 401k plan.  We get a lot of 401k questions at CameronDowning, so here’s a post with some tips to make the most of this fantastic benefit.

401k Plan Basics

The technical name for the 401k plan is an employer-sponsored defined contribution plan with 401k provisions. Money goes into your account in different ways:

• You, the employee, defer (i.e. contribute) part of your salary on a pre-tax basis to invest for the future.
• Your employer makes profit-sharing contributions. These can vary year-by year. Employer contributions serve as an incentive for you, the employee, to work hard and make the company successful.
• Your employer may make matching contributions.
• You may receive forfeitures. Your plan has a vesting schedule, which tells you how much of the employer’s contribution you’ll be able to take with you should you go work elsewhere. If an account is not fully vested, often the...

By Glenn J. Downing, MBA, CFP®

A flexible spending account (FSA) is an elective benefit offered by many employers. There are generally two types: the FSA for healthcare expenses, and the FSA for dependent care expenses. This is part two of a two-part series. Here I describe the dependent care flexible spending account. You’ll find my post on the healthcare FSA here.

Dependent care flexible spending account

The Dependent Care FSA is a great way to fund, on a pre-tax basis, childcare expense incurred so that the parent can go to work. You must claim the child as a dependent on your tax return. Also, the child must be under age 13. The maximum tax-free reimbursement under a dependent care FSA is $5000/year. If married, both spouses must work in order to benefit. There is an exception if the non-working spouse is a student or disabled. If one spouse earns less than $5000, the benefit is limited to the earnings of that spouse.

What are the eligible expenses?

There are many....

by Jonathan G. Cameron, CFP®

To me an annuity in an IRA is usually a dead giveaway that the client worked with a salesperson and not a financial planner.

Annuities, like any other tool, are not inherently bad. They work best when they do the job they were designed to do – and that job is income distribution.  The job of a retirement account, however, is asset accumulation. 

Where are Annuities Best Used?

Annuities can be a useful accumulation vehicle for those with a conservative investing outlook.  If you can accept absolutely no investment risk then a fixed annuity is for you.  If you have non-qualified money to invest (that is, not retirement funds) and you're in a high tax bracket, then an annuity might be a good option for you to defer current income taxation.  

As a distribution vehicle, an annuity is also a safe way to create a perpetual stream of income without market risk.  A pension payment is simply another name for an...

By Glenn J. Downing, MBA, CFP®

A lot has happened in our regulatory world since I posted the original blog piece, The Advice Industry. The DOL rule is void. The SEC is now working on final new rules for standards of client care.  

The government regulates this industry – investments, advice, and insurance – via the Securities and Exchange Commission (the original 1940 Investment Advisers Act), the Department of Labor (ERISA comes under DOL, or the Employee Retirement Income Security Act), and the insurance commissioners of the 50 states. Just as it takes a team to give a client comprehensive advice (financial planner, investment adviser, estate attorney, accountant, and maybe more), apparently it takes a team of government agencies to regulate all of us in the industry to their satisfaction.

The Now-Dead DOL Rule

The 1940 SEC Act requires a fiduciary standard of client care for investment advisers. The SEC made concessions to the brokerage industry, known...

By Glenn J. Downing, MBA, CFP®

This is a really good Frequently Asked Question. Instead of taking out a 30-year mortgage, should I take out a 15-year loan? How much more are the payments? How much would I save? Can I afford it? Great questions all.

A Sample 30-Year Mortgage

Let’s use a sample mortgage. $400,000 borrowed, at 4.5%, over 30 years. The monthly payment is $2026.74. That means over the life of the mortgage you will have paid $729,626.85 in principal and interest payments to repay that $400,000 loan – and, of course, $329,626.85 of that amount is interest.

You pay interest each month on the unpaid balance. That means in early years your payment is mostly interest, with very little principal repayment. In later years, situation reverses: you pay mostly principal, with much of the interest having been paid in the earlier years.

Using our sample 30-year mortgage, in the first year you will have paid $24,320.88 – your monthly payment times 12. Of that...

by Glenn J. Downing, MBA, CFP®

I know many people reading this blog post have never engaged a professional financial planner before, and may be a bit anxious about what to expect. So let me tell you all about working with a financial planner at CameronDowning.

The First Meeting is Always Complimentary

You can book an appointment online, or just call in.  One of our support staff will ask you several questions to determine if we are equipped to advise you properly.  This will involve asking you a series of questions:  What is your main concern?  What is your current financial status (assets; debts).  These aren't to be nosy, but to prepare for your meeting with a financial planner.  You'll be given a list of documents to upload to a secure vault in preparation for that meeting.  

When you have your first meeting - in person or virtually - it will be with a financial planner.  You'll have a deeper discussion then, and share more of your...