You Knew All Year the Holidays Were Coming

I came to financial planning as a profession in my 40’s, having made a mid-life transition from retail management.  I worked in both department stores and specialty retail and generally enjoyed the work. I always enjoyed Christmas in the stores – the music, the new fragrances, the decorations, and generally upbeat anticipatory atmosphere.  

Christmas time was grueling, however.  The amount of merchandise that comes into a store through its loading dock, and then out the doors in the customers’ shopping bags, is enormous.  It is very physical work, in that all that merchandise needs to be unpacked, displayed, and stocked around the store. The associates who wait on you generally have competing priorities imposed upon them:  great customer service, while getting the new merchandise out of the bins and on the racks.  

No matter where I worked, at 6 PM on December 24th, there were always customers who needed to make last-minute...

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Financial Planning Frequently Asked Questions

Why do financial planning?

Short answer: because no one can hit a moving target. The financial plan informs all financial decisions: how to invest, what to save and where, and what insurance should I purchase or drop.

What should I expect when I come in to see you?

First of all, a warm welcome and a cup of coffee. We’ll meet in one of the conference rooms at our Miami office. We’ll give you a bit of personal introduction and will be interested to learn how you came to us.

From there, we listen. We want a general snapshot of your financial position, and we’ll really want to understand your specific concerns and goals for our engagement.

This is a time of seeing if we’re a good fit. You want to know if you feel comfortable with us. We want to know if you have reasonable expectations (i.e. you don’t want a 15% return per year with no risk). If all seems a go, we’ll enter into a financial consulting arrangement.

How many visits will this take?

It...

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165 Eaton Place

I recently finished watching the entire Upstairs Downstairs series on Britbox. Easily sixty episodes in all. My viewing interests are usually limited to either WWII or British crime stories, so this was a bit of a departure for me, and one I thoroughly enjoyed. As the name suggests, it is sort of a Downton Abbey Lite. The time spanned goes from before WWI to the New York Stock exchange crash. It is the story of all the residents of 165 Eaton Place in London – the home of a member of Parliament who married a titled lady (the upstairs folks) and their household staff (the downstairs folk).

Richard Bellamy, MP, had two children – a married daughter in New York, and a son at home – James Bellamy. James was up at Cambridge, though no mention of a degree. He worked at a job he hated, and then joined his regiment as an officer during the Great War. This is a fellow whose newspaper and shoelaces were ironed for him. Life was a series of dinner parties, weekends at...

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7 Financial Life Hacks While Living in Miami

1. Create a budget.
If this sounds too obvious, I’ll say it again for reinforcement – are you maintaining a budget? Seriously. Miami is one of the flashiest cities in the world. If you don’t have a budget I’ll put it another way — Estas loco? It has been proven that our propensity to spend money in Miami is directly proportional to our physical proximity to Brickell/Downtown Miami and South Beach. A budget is by far the best way to keep track of your money. If you have a budget, you’re already way ahead.

2. Want to build up your credit score fast?
Pay your bills on time. In other words, “Do what you say you’re going to do, Miami.” Your payment history comprises 35% of your credit score. By contrast, your length of credit history accounts for only 15% of your overall score.

3. Time is your biggest asset.
Spend extra time with the people you care for most in life. This is easier said than done in Miami traffic. You’ll need to...

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Watergate and Financial Markets

The Watergate Scandal and Today’s Financial Markets
I’ve always enjoyed a good political scandal. There’s something sort of satisfying in seeing powerful people get caught out. Sex scandals in particular. Remember Wilbur Mills and the Argentine Firecracker? You can’t make this stuff up.

The Watergate scandal of the 70’s has come to mind lately, and how it seemed to drag on and on. As I look at the current scandals in Washington (Hillary’s emails; the FISA Court), I began to wonder what happened to financial markets during Watergate, and whether there are any lessons for us today? I decided to do some research to find out.

Please note: I mean to observe historical facts here, and see if I discern any financial market parallel responses to political scandal. Although it is my objective to stay away from political opinion, please forgive any transgressions.

The Mid-70’s
President Nixon was running for a second term. The Vietnam war raged on....

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Hurricane Financial Preparedness: Top 6 Priorities Before A Storm Hits

As I write this, the Carolinas are experiencing the worst of Hurricane Florence. I’ve ridden out half a dozen hurricanes as a native Floridian. As a CERTIFIED FINANCIAL PLANNER™ professional, I’ve seen the difference that having (or not having!) a hurricane financial preparedness plan can make. The aftermath of a hurricane is not only about the damage to life and property, but for many it can take a serious personal financial toll. As you stock up on canned food, batteries, and bottled water, don’t neglect to address these top 6 financial priorities before a storm makes landfall.

1. Review your homeowners insurance policy for hurricane financial preparedness
Odds are your home is your most valuable asset. Why roll the dice on this? Not having homeowners insurance coverage is a mistake. Having a homeowners policy with little hurricane windstorm coverage could become a catastrophe. Typically, you’ll have a windstorm deductible for hurricane damage claims...

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Five Steps to Getting Financially Organized Before Retirement

Getting financially organized before retirement can be a daunting task. There are many unknowns and it can be hard to know where to begin. For that same reason people often wait too long to address retirement needs and, unfortunately, don’t achieve the financial freedom for which they long. When people get serious about retirement, many start by analyzing their investment account(s) (or lack, thereof). Ideally, they’ll meet with a CERTIFIED FINANCIAL PLANNER™ professional to get them on track. In this article, I’ll share with you five steps you should take to get financially organized before retirement. Spoiler alert: None of the five steps outlined involve contributing to a retirement account! Let me explain:

The first steps to getting financially organized do not involve dollars and cents.

Financial organization starts by identifying and prioritizing what is most important to you. This is a foundational financial planning concept you need to adopt in order...

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Should I Pay My Mortgage Off Early?

Should I Pay my Mortgage Off Early? This is actually a FAQ – a frequently asked question, so I thought I’d spend a little time on it here. Some other mortgage-related topics we’ve addressed are these:

  • How Much House Can I Afford?
  • Your First Home Purchase
  • How Much HouseMortgage Can I Afford?
  • Using an IRA for a First Home Purchase
  • The Fifteen Year Mortgage

A Mortgage Example
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. 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 mortgage,...

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The Fifteen Year Mortgage

This is a really good FAQ – a 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 shelled out $24,320.88 – your monthly payment times 12. Of that amount, $17,867.98...

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Using an IRA for a First Home Purchase

A first home purchase is a big financial commitment. Not only are you taking on a mortgage, but you often need to deplete cash reserves to come up with the down payment. But what if you don’t have enough socked away for a down payment? or what if you prefer not to use all your cash reserves, leaving some cushion in your savings account? Normally the Internal Revenue Service levies a 10% penalty on distributions from a Traditional Individual Retirement Account (IRA). They make an exception on distributions up to $10,000 for a first home purchase.

How does the IRS define a first home purchase?
To qualify, it’s important to know how the IRS defines a first time homebuyer. According to IRS Publication 590-B, a first time homebuyer is defined in the following way:

Generally, you are a first time homebuyer if you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or...

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