Five Minute Finance

It’s smart to review your tax strategy and planning to keep more money in your pocket. Use the checklist below as a starting point to see what might apply in your situation. Maximize contributions to your employer retirement accounts (401k, 403b, etc) ✅ Maximize contributions to your Individual Retirement Accounts (IRA) ✅ Top off your Health Savings Account (HSA) ✅ Take your Required Minimum Di...

Julie heard about a real estate investment idea on the radio and was curious: Should I invest in this advertisement? We break down the topic into two parts:  Should you invest in Real Estate? How do you evaluate an investment opportunity that you are considering? Bottom Line Up Front: Yes , I believe that Real Estate has a place in a well-diversified investment portfolio. Pause , research , a...

I often recommend using your Health Savings Account (HSA) as another retirement account with tax benefits. This is different than the way most people approach the HSA because it starts with the word “Health” and you can pay for medical expenses. But you can invest the money for the far future allowing it to grow and compound tax-free. The best part is that you can even  pay yourself back &nbs...

Did you know that your investments cost money? Those mutual funds, ETFs, brokerage accounts, etc - are not free, despite the marketing. It takes people and companies to produce those products, so you better believe you are paying for them somehow.  It pays to understand the costs. The biggest one I want to cover today is called the  “Expense Ratio”  for a mutual fund or ETF because...

Do you recall how you felt in March 2020? You felt  terrible . How do I know? Everyone did. The news was bad, the future uncertain, the death toll rising and current events were spiralling downwards. The market had fallen 35% in 3 weeks. There were  no  bright spots. With the news and environment unchanged, the stock market started going up. And it kept going. Why?&nb...

We all know that you can barely get any interest, or return, on your savings account. The Fed is keeping the interest rate  very low , which translates into  low returns on savings  and safe assets like money markets and government bonds. With so little return in the traditional fixed-income side of your portfolio,  does that fundamentally change the way you should consider ris...

We all know the risks, we understand how to think about the pros and cons of a decision. But when it comes to the stock market,  are you certain you’re thinking about it the right way? The risk  isn’t  that your portfolio goes down in value, the risk  is  that you can’t reach your goals. What are your goals and when do you want to reach them? When do you expect to spend th...

Borrow, Buy, Die.    That’s how billionaire’s avoid paying much in taxes. When your assets are growing quickly (10%+ / year), you don’t need to sell stock or pay yourself a salary, you just borrow money at 2% interest / year. If you have significant wealth, and it continues to grow, you can take advantage of borrowing money at low cost. If there is a downturn in the economy or the market...

Finding a financial advisor is daunting because you know it’s important and yet it’s so hard to figure out.  Bottom line up front: Start with finding Certified Financial Planners (CFP®) that understand your situation; do a little online research and then interview a couple. Tune into this week’s podcast to learn more about: Hiring a CFP®.  This should be a minimum bar. There are plenty o...

In this bonus episode, Matt and I continue our conversation about stock market bubbles and in particular behavioral economics.  We discuss how the future investing models might change based on more studies of human behavior.  Smarter people than the two of us will study and dissect the market in new ways based on human participants. We also chat about different areas of the markets, diff...

The stock market is reaching new all-time highs, which begs the question:  Are we in a market Bubble?  There are two areas to review when thinking about “bubbles” in the stock market: the market fundamentals (valuations) and investor sentiment (or behavior). Both of these are looking quite hot.  On the fundamental side, the popular Shiller PE Ratio currently sits at  38.5...

BONUS Episode! Matt and I continue our conversation. Listen in to the discussion on Zombie investors: how the massive uptick in index investors may be affecting markets Is it Good? Are the capital markets still good for companies and investors? Have we gotten away from the point of investing? Complexity: If you can't explain it, don't invest in it. Find out more about Mike at https://www.mortonfin...

I absolutely love what software can do for us, freeing up our time and energy to focus on the less mundane. And when Robo-Advisors first launched, with simple portfolios of low-cost index funds, they were great. Taking away the human emotions, keeping you invested correctly with a massively diversified portfolio - what's not to love? However, I've recently come across a few problems that stem from...

On today’s show, Meg Bartelt, CFP®, MSFP joins me to talk about how you should think differently about your total compensation in order to take advantage of your employer benefits.  Meg is the founder of  Flow Financial Planning , LLC, a fee-only, virtual financial planning firm dedicated to women in their early-to-mid career in tech. She specializes in  equity compensation  an...

How do you make your money work for you?  Do you take it to the casino and bet on black? Do you have fun at the race track? Do you save into your 401(k) and put the money into an index fund? Or do you buy individual companies each week on Robinhood? Each activity may  win  or  lose  you money in the future. Does that make it investing, speculating, or trading? Each word me...

You need to have a plan in case of an emergency and typically you need some money to go with that plan:  your Emergency Funds.  First, let’s define Emergency:  something which happens unexpectedly, which you could not easily predict would occur at this moment.  Examples include losing a job, having a severe accident or having to take care of a loved one. As you can tell, these...

With the advent of the index fund in the 1970s, the battle began: actively managed funds versus passive index funds.  Which belongs in your investment portfolio? Actively managed funds have people responsible for deciding which companies to invest in and include in the fund. These funds will typically have a strategy to invest in a certain sector or style such as  US large-cap growth com...

The majority of advice online is too generic to take seriously for your personal finances. The 60/40 portfolio (60% stocks and 40% fixed income) is used in academic research and might be the median portfolio for retirees - but that doesn’t make it appropriate for you. How should you construct your own portfolio for now and the future? Think about when you are going to spend your money and divide i...

As Independence Day approaches, it makes me think about all of our freedoms including the choice to make  work optional . It’s a modern convenience, to be sure: retirement is a very modern idea. The interesting thing about financial independence is that it leads to other freedoms. Not only can you choose how to spend more of your time, you can speak your mind without fear of being cancel...

Bitcoin and other cryptocurrencies are all the rage. But should you invest your money in them? I recently received this listener question: “There is a lot of talk going on about Bitcoin and Dogecoin.  Are they good investments?“ Bottom Line Up Front:  I do not currently recommend putting money in cryptocurrencies, because it would be mostly speculation and not investing. Realize that if...

Inflation is all over the news: it’s a scary subject encouraging you to read more headlines. But how should you actually prepare your investment portfolio for potential inflation? As always: it comes down to planning. If you have a well-diversified portfolio of stocks and bonds then there’s good news: you can do nothing. Be ready to make adjustments as those investments go up or down, as you typic...

How can you create a financial plan before you know where to aim? Your unique goals in life, what drives you, what you want to accomplish and what’s truly important - those are the targets. Not simply “retire someday”. You don’t have to read a ton of self-help books or try to discover this on your own. There is a process that has been refined by the Kinder Institute of Life Planning to help indivi...

Congratulations! As you approach retirement, your investment portfolio has grown to a size that you suspect you’ll be fine to stop working and live the good life. But…. how do you actually generate income from those retirement accounts?  And how should you invest now that you’re so close to retirement? I use a bucket strategy to talk about investing in retirement.  There are three mental...

You don't often think of a retirement account for your children, but the Roth IRA is too appealing to pass up. Once you get money into a Roth IRA, it grows tax-free forever, which is a very long time for a young child! Megan Russell from Marotta Wealth Management joins me to discuss the myriad of benefits of this amazing account. Tips covered in this episode include: How Young? : You can start thi...

Yes, you can turn $3,000 into $50 million dollars. What's the catch? It takes a long time. So, unfortunately, you won't be around to spend it. But this is a great way to think about setting up your kids or grandkids for long-term financial success. It's really simple math that relies on compound interest to generate significant growth over many years. The basics: Invest $3k into a Small Cap Value...