Category Archives: Financial Independence

The financial independence movement is inspiring new followers - as young as 28 - who want to quit their day job and do their own thing.

The pandemic has prompted people like 30-year-old Michelle Ives to realise how fragile her financial security is.

"Anything can happen that has the potential to shake the normalcy of our lives. It has reminded me of what matters - it's not sitting at a desk for eight hours a day," says Michelle.

She is drastically overhauling her family's finances, so they have more control over their lives. She wants to have the freedom to make choices about her life and work.

Michelle was already plugged into the growing personal finance movement that offers an abundance of information about saving and investing online. It is FIRE, an acronym for financial independence, retire early. As well, there is a more laid-back version, FI, or financial independence.

"If anything, the pandemic has just encouraged us to reach our goal more aggressively," says Michelle.

Michelle and her husband are saving 70% of their income and hope to retire in a few years. They have been FIRE followers for seven years. While she loves running her own copywriting business, she wants to take back her life while she is in her 30s and healthy, and to get out and enjoy it.

"In some ways, COVID-19 has actually galvanised the importance of FIRE for many because we've now had a glimpse of what a better work-life balance feels like."

People have increasingly realised that they don't want to be stuck in a soul-crushing job, with long commutes, well into their 60s. They didn't want the anxiety that comes with working flat out, explains Serina Bird, who was connected to a work chat group and emails with alerts pinging from early morning until late at night.

So much so that two in five Australian workers (43%) are unhappy with their work and are planning to actively search for a new job in 2022, according to a survey by Elmo Software. Workers are prioritising more flexibility, working remotely more often, access to extra annual leave as well as increased wages and promotion.

A third of workers say they plan to quit their current job as soon as they secure a new role, with 19% intending to quit before lining up another job.

"The 'great resignation' is a thing and most employers don't get it," says Serina, who retired at 47 from a desirable public sector position.

There are newcomers switching onto the FIRE and FI philosophies to get rid of debt, rigorously save, invest sensibly and enjoy a modest, agreeable life. Those people on the FIRE journey retire in their prime.

"The pandemic has reinforced for many the value of the basic building blocks of FIRE, such as having a cash cushion in uncertain times," says Jason, who has accumulated $2.7 million and will retire early next year.

FIRE is based on the philosophy of Peter Adeney, aka Mr Money Mustache, who kicked off the movement in 2011 (see mrmoneymustache.com).

It is about building up enough investments so you can live off the returns for the rest of your life. Once you hit the point where the income exceeds your living expenses, you no longer need to work because you are financially independent.

Adeney came up with what he calls a "shockingly simple" formula. You take your annual expenditure and multiply it by 25. This calculation is based on "the 4% rule", where retirees withdraw no more than 4% of their total savings each year.

He says if you can save 50% of your take-home pay from the age of 20, you can retire at 37. If you can save 75%, you can retire in seven years.

Adeney's "mustachianism" lifestyle is about 50% cheaper than that of most of his peers and the surplus is invested in simple exchange traded funds and a rental house or two. He has inspired not only our six case studies but has resonated with millions of followers.

The philosophy of FIREs isn't about getting rich quick, but about taking a slow path. Forget about market timing - trying to find the best time to get in and out of the market - because, as Adeney says, it generally sucks.

The FIRE movement is evolving in a time of interesting financial changes. While the focus is still on saving and taking frugal steps, it is also about the choices that open up as you edge towards financial independence.

You can fire up any part of your life with a FI strategy. It can mean you live overseas and travel 52 weeks a year. You can volunteer to help others. Or, in Tasha's case, you can have a baby on your own.

You can connect with all sorts of FIRE communities for support and feedback from real people.

Financial independence increasingly is for people who don't want to retire young or sacrifice too many of life's indulgences, but want flexibility in their lives.

"Early retirement conjures up hazy images of long golf games and pastel leisurewear," says Jason. "For seekers of early retirement, this vision doesn't connect with them very often - they are usually highly motivated and goal-oriented people with no desire to sit around on the couch for 30 to 50 years following early retirement."

"Many actively seek alternative passion projects, or to simply approach work from a strong negotiating position. This has led many to observe - myself included - that it's the financial independence we seek first and foremost, with the retire early part being optional or even irrelevant."

Dave Gow, who retired at 28, says: "You can choose your own adventure. It's not a one-size recipe for early retirement."

Some FIREs, like Matt, who runs the Aussie Firebug podcast, wants to "start a small business, spend time with my family and not have to commute to work".

Matt says he has always wanted to be able to scale back his work from five to three days a week when kids came along.

"Also, the free time to keep fit is a priority for me. I understand that when kids come on the scene things change and most people give up some of their 'me' time. I don't want to sacrifice my health and still want to be able to do all things I do now," he told the blogger Adventures with Poopsie.

Some people may not believe that retiring early in their 20s, 30s or 40s is really an option, but our case studies show that you don't need a windfall or a high-paying job or a lucrative tech start-up to retire early.

Serina, Leo, Michelle all show it is possible to save and retire early with a young family despite plenty of people telling them that financial independence wouldn't happen if you had kids and all the financial responsibilities that came with them.

Of our six case studies, Dave, Serina, Michelle, Jason and Tasha run blogs. Dave Gow hasstrongmoneyaustralia.comand, with Pat Seyrak fromlifelongshuffle.com, hosts fortnightly podcasts, FIRE & Chill. Serina Bird:joyfulfrugalista.com. Michelle Ives:thatgirlonfire.com Jason runsthefiexplorer.comand doesn't give his real name as he is apprehensive about talking to his work colleagues about his plans to retire early. Nataasha Torzsa:tashagetsfrugal.com.

The pandemic, and now the Russia-Ukraine war, have challenged short-term plans for some FIREs, especially those who enjoy travelling.

Jason, for example, says his plans to travel around Australia and overseas are now "up in the air". But it's also an opportunity to "keep my head down investing, until the outlook becomes a little clearer".

The economic fallout from the war may also hit saving and investing targets in the short term, but it's the long term that counts.

"The war in Ukraine is many things - most obviously an urgent and tragic humanitarian event as well as an opportunity for giving - but it is not a reason to change overall investment direction for someone seeking financial independence through a well-diversified portfolio," says Jason.

Markets, especially sharemarkets, tend to climb a wall of worry and expand even across periods that are objectively challenging.

"There are always sensible-sounding reasons to hold off investing, and await more certainty, but inaction just delays the powerful force of compounding returns getting underway over time. Putting in place simple automatic systems can help avoid the temptation to just wait and see that can end up costing investors dearly as markets recover and grow."

Jason says most major events reflected in newspaper headlines today will have little impact on returns over long-time investment frames of 10, 20, and 50 years.

Stay tuned over the next three weeks as Michelle, Serina, Dave, Leo, Tasha and Jason share their FIRE journeys. Or,order a copy of the April issue of Money!

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How the pandemic has 'galvanised the importance' of early retirement - Money magazine

How to find the right financial adviser for you. Getty Images/iStockphoto

Question: Im about three years from FIRE (Financial Independence, Retire Early) status and have been looking at placing a portion of my investable assets with an advisor, which would still be seven figures. As Ive been conducting interviews with many of them, they all have two areas of concern that I do not like and give me pause. One, they want to charge a fee even if they are not making my assets grow (they get paid no matter what the portfolio does), and two, they want me to place my assets all at one time, whereas I prefer a leg in strategy over time, much the way I handle any stocks I buy. Since I dont know the advisor nor their firm, Id like to move assets over in tranches, perhaps 25% each quarter for 4 quarters. (You can use this tool to get matched with a financial adviser who might meet your needs.)

Have a question about working with your financial adviser or looking to hire one? Email chill@marketwatch.com.

Are these expectations of mine unrealistic, and am I going to have a very difficult time finding an advisor that fits my preferences with which I am comfortable? Ive been in the markets for over 20 years and have been comfortable, up to this point, in managing my own investments. But I want to spend less time on that and allocate time to other pursuits during my second act, and I also want to be sure the investments are being managed for my wife in the event I predeceased her since she is not financially savvy.

Answer: Lets start with your first issue: why all the advisers wanted to charge you a fee no matter how the assets performed. Thats probably because one of the most standard fee structures among financial advisers is for them to charge a percentage of your assets under their management (roughly 1% is common). They do it because markets do go up and down, and advisers want to protect themselves. And adds Steve Stanganelli, certified financial planner at Clearview Wealth Advisors: Many, not all, investment advisers will also be providing retirement projections, portfolio withdrawal scenarios, advice on Social Security, tax projections budgeting and cash flows or even real estate issues in addition to standard rebalancing and investment allocation. No doubt, they want their time on those tasks paid for as well, so the assets under management system may work well for them.

Thats not to say that you cant find someone who doesnt work like this. Some advisers charge performance-based fees, though certified financial planner Mark Brinser of Stewardship Advisors says this may be difficult to find. Performance based fees are when an adviser only collects a fee if they outperform a certain benchmark and the fee is forfeited if the adviser does not beat the benchmark, says Brinser. This compensation method was actually banned for registered investment advisers for a time, and now, its only allowed for clients who meet certain criteria. (You can use this tool to get matched with a financial adviser who might meet your needs.)

And one thing to note: Even in a traditional assets under management model, should an account value drop and the dollar amount decrease, the adviser still has an incentive to make good investment decisions to help the account recover as quickly as possible, says Brinser. In fact, I would argue that a good financial adviser demonstrates their value the most when markets are volatile. We can listen to clients concerns and help them develop a strategy to get through market turmoil, says Brinser.

One option you may want to consider is paying an adviser hourly or a one-time fee to set you up a plan. You might be able to enlist an advice-only, fee-only, certified financial planner to help streamline your investments to a point where you can still enjoy your pursuits without handing it over to someone else, says Jay Zigmont, certified financial planner and founder of Live, Learn, Plan. The challenge is that you are going to have to find a sweet spot between do-it-yourself and delegating responsibility, says Zigmont. For this reason, you should work with your adviser to create a comprehensive financial plan that takes into account both your preferences and consideration and the advisers approach and experience. (You can use this tool to get matched with a financial adviser who might meet your needs.)

Zigmont says its not odd for people to move only part of their portfolio to an investment adviser and plenty of advisers should be willing to work with you on this.

So why did the advisers not let you move money slowly over to them? One possible reason is this: The more assets they have under management, the more they take home from your accounts, so they want more, not less money. Some firms even have asset minimums. Advisers can make such accommodations given a clients particular circumstances, but each firm has an assets under management minimum for a reason, says wealth adviser Bruce Tyson at Morton Wealth. The reason firms may have minimums is to keep their client roster within a certain range and to possibly dissuade short-term investors from taking up time that could be spent on longer-term clients. And moving over the funds in increments creates special challenges when planning a clients asset allocation. As with any business, there is much more under the hood than most clients may initially realize, says Tyson.

You can use this tool to get matched with a financial adviser who might meet your needs.

If youre concerned about your less money-savvy spouse, Stanganelli says you should consider adding life insurance to the mix. This will provide replacement income and even liquidity for any state-level taxes that your wifes estate may ever end up having to pay, says Stanganelli.

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2 things all the financial advisers I talked to told me that I dont like - MarketWatch

Press Release - Apr 12, 2022 12:00 EDT

CALVERTON, Md., April 12, 2022 (Newswire.com) - Potomac Financial Group (PFG), a Maryland-based provider of premier financial planning and wealth management services,announced today that Managing Partner Todd Wike has once again been named to Forbes'distinguished list of America's Best-in-State Wealth Advisors. Out of approximately 34,925 nominations,the annual ranking spotlights more than 6,500 advisors who are researched, interviewed, and assigned a ranking based on an algorithm of qualitative and quantitative criteria. This is the third consecutive year Wike has appeared on the prestigious list, which was released on April 7, 2022.

"To be recognized among the nation's leading wealth advisors for a third consecutive year is an honor and tribute to the entire PFG team," said Todd Wike, Managing Partner at Potomac Financial Group, Financial Advisor and CERTIFIED FINANCIAL PLANNERprofessional at Raymond James Financial Services."In these uncertain and often volatile times, we understand more than ever our important role in delivering financial confidence to our clients. It's this very commitment that drives us every day as we help our clients find their financial freedom."

The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors that are considered have a minimum of seven years of experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Out of approximately 34,925 nominations, more than 6,550 advisors received the award. This ranking is not indicative of an advisor's future performance, is not an endorsement, and may not be representative of individual clients' experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please visit https://www.forbes.com/best-in-state-wealth-advisors for more info.

Visit PotomacFinancialGroup.com to learn more about PFG's wide-ranging financial planning and personal wealth management solutions.

Media Contact:SaraAulebachExecutive Assistant & Marketing CoordinatorPotomac Financial GroupTel: 301.595.8600Sara.Aulebach@RaymondJames.com

About Potomac Financial Group|Since 1973, Potomac Financial Group (PFG) has served as a premier financial planning and wealth management firm singularly committed to helping its clients and families achieve financial independence and security. With almost 50 years of combined experience, PFG has grown to be one of the region's most trusted financial planning firms through its innovative financial solutions and commitment to exemplary personal care. To learn more, visit PotomacFinancialGroup.com.

4061 Powder Mill Road, Calverton, MD 20705Phone: 877.595.8605

Potomac Financial Group is not a registered broker/dealer and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC.

Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP, CERTIFIED FINANCIAL PLANNER, CFP (with plaque design) and CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Source: Potomac Financial Group

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Potomac Financial Group's Todd Wike Named to Forbes' 2022 List of Top Wealth Advisors for Third Consecutive Year - Newswire

Money has a bit of a bad rep. Especially when women prioritise their financial well-being above marriage or having children. But at the same time, every woman has, at some point, faced the inevitable question of whether she should let her life partner take care of her financially or continue to remain largely independent.

Which is why we just had to talk about thisRedditthread where women are discussing what they would do if their partner asked them to quit their job, in exchange of financial support. Maybe we can all find something to relate to in here? Let's take a look.

-contextISeverything

-Idrialis

-windysunshine

-kitty_withlazers

-Idrialis

-freckled8082

-No_Airline_970

-19CatsInATrenchCoat

-Batsarebest

-WuTangraisedme

Financial independence is freedom. You never know what could happen and he would always have the upper hand. Want space? Too bad cant afford it. Want some thing he doesnt want to pay for? Too bad, cant afford it. He does something warranting breaking up? How will you afford leaving? Itll be hard, it'll take much longer. Big nope. Unless there is some form of monetary compensation for running the household (and using your tax credits, in certain countries).

-Ladidaladidi

-MyLife-is-a-diceRoll

-malaavida

-tsh87

-Kind-Set9376

-shrimpfajita

-Joia_Floof

-ClaireHux

What would you do if you were in a similar position?

Link:

18 Women Reveal What They Would Do If Their Partners Asked Them To Quit Their Jobs - ScoopWhoop

(Justin Paget via Getty Images)

As people are living longer and many young adults are struggling to gain financial independence, about a quarter of U.S. adults (23%) are now part of the so-called sandwich generation, according to a Pew Research Center survey conducted in October 2021. These are adults who have a parent age 65 or older and are either raising at least one child younger than 18 or providing financial support to an adult child.

Americans in their 40s are the most likely to be sandwiched between their children and an aging parent. More than half in this age group (54%) have a living parent age 65 or older and are either raising a child younger than 18 or have an adult child they helped financially in the past year. By comparison, 36% of those in their 50s, 27% of those in their 30s, and fewer than one-in-ten of those younger than 30 (6%) or 60 and older (7%) are in this situation.

Men and women, as well as adults across racial and ethnic groups, are about equally likely to be in the sandwich generation, but there are some differences by educational attainment, income and marital status. About a third of married adults (32%) are in the sandwich generation, compared with 23% of those who are divorced or separated, 20% of those who are living with a partner, and just 7% each of those who are widowed or have never been married.

To assess the share of U.S. adults who are in the sandwich generation, that is, who have an aging parent age 65 or older and are raising children younger than 18 or providing financial support to adult children, the Center surveyed 9,676 U.S. adults during the period of Oct. 18-24, 2021. Everyone who took part is a member of Pew Research Centers American Trends Panel (ATP), an online survey panel that is recruited through national, random sampling of residential addresses. This way nearly all U.S. adults have a chance of selection. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories. Read more about the ATPs methodology.

Here are the questions used for the report, along with responses, and its methodology.

Adults with at least a bachelors degree (30%) are more likely than those with some college or less education (20%) to be in the sandwich generation. And while 27% of those with upper incomes are sandwiched between an aging parent and their own children, a smaller share of those with lower incomes (21%) are in this situation. About a quarter of adults with middle incomes (24%) are part of the sandwich generation.

The family circumstances of sandwiched adults vary considerably by age. In their 30s and 40s, most have an aging parent and at least one child younger than 18, but no adult children theyve supported financially. This is the case for nearly all sandwiched adults in their 30s (95%) and 65% of those in their 40s.

By the time theyre in their 50s, far smaller shares of sandwiched adults are raising children who are minors. Instead, a majority of those in their 50s (59%) and those 60 and older (83%) are sandwiched between an aging parent and an adult child theyve helped financially.

Among those in their 40s and 50s, the two age groups most likely to be in the sandwich generation, about one-in-five have both a child younger than 18 and an adult child theyve helped financially, in addition to having an aging parent. There arent enough sandwiched adults younger than 30 to analyze separately.

Adults who are sandwiched between an aging parent and a minor child or an adult child theyve helped financially are more likely than those who are not in this situation to say they are very satisfied with their family life (48% vs. 43%, respectively). This difference is particularly pronounced among those in their 40s: About half of sandwiched adults in this age group (49%) say they are very satisfied with their family life, compared with 38% of other adults in the same age group.

When it comes to assessments of some other aspects of life, adults who are and are not sandwiched give similar answers. About a quarter in each group say they are very satisfied with their social life and with the quality of life in their local community, and 17% in each express high levels of satisfaction with their personal financial situation.

Adults who are sandwiched between an aging parent and their own children are about as likely as other adults to live in a multigenerational household, though they may not be living with the family members they are sandwiched between. About one-in-five in each group live with multiple adult generations under the same roof (19% of those in the sandwich generation vs. 18% of other adults).

A Pew Research Center survey conducted in 2014 also found that 23% of U.S. adults were in the sandwich generation. However, the 2014 survey was conducted by phone rather than the Centers online American Trends Panel, so these results arent directly comparable.

Note: Here are the questions used for the report, along with responses, and its methodology.

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More than half of Americans in their 40s are 'sandwiched' between an aging parent and their own children - Pew Research Center

In North America, the issue of diversity within the financial workplace has improved in the past few years.

A report conducted by McKinsey and LeanIn.org found that at an entry level, women accounted for 52% of the workforce and had also significantly improved at senior levels. Despite this, female representation is still low, especially for women of color. From entry to C-Suite, the number of women of color fell by 80%.

Although representation varies according to the sector, the results are clear; there is still much work to be done to enhance diversity within the financial services industry.

The issue affects not only the people who aim for a career in the financial sector but also the engagement of the general public with companies and the development of varied, innovative solutions to improve the whole of the general population.

McKinsey reported back in 2015 a correlation between greater diversity and increased profits. They stated, Our latest research finds that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians.

While correlation does not equal causation, the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful.

Various reports and surveys since, carried out by entities such as the Harvard Business Review, have corroborated this conclusion.

As we see that entry-level percentages are now relatively equal, it seems that the problem lies not only within the employment itself. It is the access to the culture surrounding the employment that for many is so essential to climbing the career ladder.

According to Women in Consumer Finance (WCF), the issue comes from three primary sources; access to a professional network, problems with confidence, and lack of career examples.

The annual event focuses on targeting these issues and improving female access to employment opportunities in a holistic and immersive way.

Stephanie Eidelman, CEO and WCF conference co-chair, said, It feels like everything Ive done has led me to Women in Consumer Finance. I have often found myself to be the only woman in a room or one of just a few.

As I think back on my career, I realize that nobody ever really took me under their wing. Although Ive achieved success, I cant help but wonder how it might have been different if I had a stronger hand guiding me along the way.

Women in Consumer Finance is designed to be that guiding hand for anyone who needs it.

Established in 2017, the WCF event aims to bring a community of female finance professionals together, enrich the sector, and support ambition.

The WCF sees a lack of opportunity to access the same social networks as men in the sector, resulting in a disadvantage when applying for promotions, especially at a senior level.

They have found there to be a general lack of confidence when applying to senior-level roles and a lack of leading female role models for entry-level women to follow and learn from.

With the use of the event as a focal point, they have various programs which tackle these issues during the conference and throughout the year. Through the Magic is in the Connection and The WCF Advisory Board programs, they target the problems of networking, confidence, and mentorship head-on with small focus groups matched together by the WCF administration.

In addition, they have introduced the use of the Storyboard, an online platform for articles and testimonies, providing insight and guidance for female professionals.

The co-chairs of WCF, Stephanie Eidelman and Shelly Sheppick, both come from established backgrounds, dedicated to improving the communitys access to career prospects. Sitting on the boards of LIFT and For The Good, they integrate the work they do with WCF into these initiatives.

The two charities focus on empowering women and families to lift themselves out of poverty and financial exclusion.

LIFT provides families with life coaches tailored to family needs to achieve long-term goals and professional connections to create financial stability. For the Good is based in Kenya and is directly involved in improving girls education, encouraging inclusion in secondary education, and financial independence as they grow into womanhood.

We partner with hand-picked organizations where we can make a real impact to help support women and girls, said Eidelman. We support them both financially and via exposure through the conference and inspiring content during the year.

The event targets deep-rooted issues and preconceptions with a three-day networking experience. Ranging from group activities and excursions to panel discussions and team-building seminars aimed at building connections, the conference sets out to enrich the professional outlook of the attendees.

The personal focus on active network building within small groups and story sharing is said to create a friendly and intimate atmosphere.

Testimonials from women at all levels of the career ladder praise their approach, valuing the opportunity and the importance of the event in their professional path during the following year.

This is not a passive listening exercise but rather a 100% immersive experience. There is nothing else like it. In short, we take a unique approach to building confidence, connection, and careers. concluded Eidelman.

RELATED LINKS :

Isabelle is a creative project manager and freelance journalist with a BA Honours Degree in Architecture and a MA in Photography and Visual Media.

With over five years in the art and design sector, Isabelle has worked on various projects, writing for real estate development magazines and design websites, and project managing art industry initiatives. She has directed independent documentaries on artists and the esports sector and assisted in producing BBC Twos Venice Biennale: Britains New Voices.

Isabelles interest in fintech comes from a yearning to understand the rapid digitalization of society and the potential it holds for our future, a topic she has addressed many times during her academic pursuits and journalistic career.

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WCF tackles the issue of diversity head-on - LendIt Fintech News

As a first-generation Australian, and having grown up in a household that was not so fortunate financially, Robert keenly knows the importance of financial independence and wealth.

It's what saw him study business at university, later applying for a job at NAB within its Private Wealth business. But after nine years with the bank, Robert realised that money doesn't buy happiness.

In 2015, he launched his own practice,Baharian Wealth Management and, over time, has developed a love for quant-based investing and ETFs.

While he uses active strategies for his clients' fixed income exposures (there just aren't short-dated floating-rate ETFs available yet, he says), Robert has given up on active investment management within equities - having sold out of his last active equities exposure - in the Magellan Global Fund - around 12 months ago.

In the second edition of our new series Meet the Adviser, Robert lays it all on the table and shares the ETFs that both he and his clients use for long-term success, as well as how the financial advice industry needs to change to better serve Australians.

Why did you choose this profession and how did you get started as a financial adviser?

Im a first-generation Australian and grew up in a household that was not so fortunate financially.

I was about 10 years of age, and I distinctly remember sitting at McDonalds with mum in Doncaster. Its closed down now the BMW Doncaster showroom sits there now. To this day I remember precisely where we were sitting, and I asked her, Mum, which job makes the most amount of money?

I went through high school studying business, economics, and commerce I couldnt get enough of it, I loved it. From here, I knew I wanted to be involved in investing. At university, I studied financial and risk management a deep dive into financial academia. I loved it so much that I began my search for an entry-level job. I landed one at NAB working during the day and completing my studies at night school. I also started a business or two during this time.

And since this realisation, I feel like my job is not only to manage peoples money but to also help them articulate and gain clarity on the purpose of their money. What is it that they are really searching for? I feel like my job is far deeper than just the money. And this is what gives me great joy.

What do you believe makes you different to other advisers in the industry?

I believe our industry is really about relationships. Being genuine is super important. Yet being comfortable being yourself can be really hard. There are so many expectations of what someone in our industry needs to look like, how they should speak, act or just be. Ever since starting Baharian Wealth Management, I have never felt freer to speak my truth. I feel like I can be absolutely open, transparent, and truthful to people.

I think I look at relationships more deeply. I feel the process is more personal now - beyond the money. Sometimes this backfires, there are folk who dont want this, and thats ok too.

I also have a hard time trying to sell an idea to a client if I genuinely cant convince myself of it Im not a very good liar. I think people can sense your conviction when you truly believe something.

Can you share a bit about your process for building portfolios and selecting investmentproducts?

It all starts with the purpose and intention. What is it that we are trying to achieve and why? Deciding whether were going to take the car, train, or plane without knowing where we are going is kind of pointless.

We then design the asset allocation to support these goals and priorities. How much risk can one tolerate? How much risk can they take? How much risk should they take? We spend a lot of time and undertake a lot of work to understand risk tolerance, capacity, and risk required.

When it comes to equities exposures, we use ETFs and rules-based funds. I think of market-cap-weighted ETFs as momentum strategies - you are buying the companies that are going up, and selling those that are going down. I know people think that's "buy high, sell low", but there is a lot of evidence supporting the momentum factor as a persistent investment strategy.

Currently, our fixed income exposure is slightly different. Our fixed income exposure used to be made up of index-based exposure, which in hindsight worked extremely well for us and our clients.

As a result, we decided to use PIMCO as our manager of choice for our "core" fixed income exposure, both in Australia and globally. What we really liked about this was that it was a quasi index exposure with the ability to dial-up and down the duration, with certain limits - so it couldn't blow with the wrong call. I guess it was the rules we liked.

We then complement this exposure with managers such as Realm, which manages our Australian credit, and Bentham, which manages our international credit. Further to this, in circumstances that allow, we further diversify in private real estate debt which is unlisted and provides a great source of income. I think this is an asset class that is very misunderstood by traditional equity and fixed income folk.

...

Managed Fund

PIMCO Australian Bond Fund

Australian Fixed Income

Managed Fund

PIMCO Global Bond Fund

Global Fixed Income

Managed Fund

Bentham Global Income Fund

Global Fixed Income

...

Can you share two of your go-to funds with us?

This gives our portfolios an excellent starting point as a core exposure. We would typically allocate around 10-15% of our clients total portfolios to this ETF. A dirt-cheap, globally diversified portfolio of assets. The management fees on this ETF are 0.18% per annum.

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ETF

Vanguard MSCI Index International Shares ETF

Global Shares

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The days of having to pay a fund 2% to gain exposure to a global quant-based strategy are long gone. We can now access these strategies via a cheap, systematic, listed instrument. We have increasingly been allocating to this ETF over the past 12 months. The management fees on this ETF are 0.35% per annum.

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ETF

BetaShares Global Quality Leaders ETF

Global Shares

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How do you discover new managers and investment opportunities in a market saturated withproducts and issuers? What makes a manager stand out?

This is part of the problem and challenge for investors. There is always so much going on. Its like visiting a Las Vegas casino. Where the heck do you even look!? The colours, the bright lights, the noise, its enough to make you go nuts.

And for this reason, I think it is imperative that advisers and investors have a very clear investment philosophy and methodology. We have a very clear investment strategy, one that is based on evidence, which cuts out about 90% of the noise.

A pitch deck from a fund manager arrives in your inbox, what happens next?

To be brutally honest, not much. It depends on where it came from. If it's completely unsolicited, its generally deleted. If it's through a contact or my network, Ill always look at it. Ive never met a manager whose fund has underperformed their chosen benchmark. And so, I think its super important that we kick the tyres internally. Well run the fund through our internal software and give it a test. Generally speaking, theres a lot of good marketing in our industry. My starting point is always a sceptical one, and so it takes a lot to convince me otherwise. Ill always ask myself, 'Would I invest my personal money into this thing?'

We also have clients bringing opportunities to us. Weve invested in some PE and VC deals this way. Theres a lot of "who you know" that plays a key role in those asset classes, I think.

How would you describe your personal investment strategy?

Great question. I compartmentalise my portfolio to align with my personal goals - its very structured. I have real estate because I wanted it to satisfy a need. I didnt have a view that real estate was going to outperform.

I dont hold any defensive assets. Im too young. I dont care what happens in the short term. Id happily ride volatility and illiquidity. So, Im all in for risk. The task for me, however, is how do I break down the risk within the risk.

I touched on this earlier, but running businesses have a higher degree of risk, and so I have a portfolio of liquid investments that are made up of global listed investments that I believe are lower risk.

What are the top three holdings, in percentage terms, in your personal portfolio and can you tell mea bit about why you hold each of these positions?

Its a clean, simple and cost-effective way to gain exposure to the Australian market with some factor tilts that have generated consistent alpha. This fund is an actively managed quant-based fund, which provides index-like returns, but with a little more alpha and without human bias.

It acts as my global anchor, and I can build exposure around this core holding.

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ETF

Vanguard MSCI Index International Shares ETF

Global Shares

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This sits alongside my VGS exposure and concentrates on the biggest and the best 100 companies around the world. I think this is one of the cheapest products in the market and a great momentum strategy.

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ETF

iShares Global 100 ETF (AU)

Global Shares

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Could you tell me about your worst investment? How did you deal with this falling position orfund?

Will my wife see this? Where do I start? The RAMs IPO (acquired by Westpac in 2007), Murchison Metals (acquired in 2014), Zip Co (ASX: Z1P), the list goes on. Ive lost hundreds of thousands of dollars in the past, taking the advice of brokers, picking the next winner, or just having FOMO. Ive learnt a lot from these experiences, and I think its helped me become the investor I am today and a better adviser to clients. Although I bought Bitcoin in 2021 at, I think, precisely the top ha!

What conversations are you most frequently having right now with clients? And what is youranswer to these questions?

Im quite proactive with our clients. I write to them weekly. This gives me an opportunity to provide a point of view on whatever is making headlines at the time. It means we generally address any market-related queries proactively without our clients wondering what this means for them. Having said this, the most topical questions we are receiving are:

My response: Of course, we will. Will it be in the next 12-18 months? Maybe, who knows. History tells us we have a recession, on average, about every 3-4 years. And they last around 18 months. Since WWII however, we've gone an average of about 5 years without a recession. The last one was less than 24 months ago, and the one before was almost 15 years ago.

These things never play out on averages. In fact, the average return in the stock market is about 10% per annum. However, the stock market has returned 10% per annum in only a handful of years. Youre more likely to experience a double-digit loss in a given year than a return thats close to the long-run average. And more than one-third of all years have seen a gain of 20% or more.

History says there's a 37% chance of a recession in the next 18 months. The real cause of the recession won't really be known until after the fact. Even then, well, we may never know what really caused it. Just like the stock market, averages are averages because that's what they are. We also know they dont last forever.

Youve got cash to help fund expenses/Youve got time on your side to see this through and you dont need the funds.

When we look at the data, we see that geopolitical events unfold all around the globe far more frequently than what is perhaps originally thought. What is obvious to me after seeing the data, is that the long-term impact on financial markets is almost non-existent. Here are some of the facts:

From this, we can deduce:

The challenge this time around for markets is that they were already trying to deal with inflation and higher interest rates coming off the back of a stellar few years in the market. Although some aspects of the data surprised me, others didn't. The obvious one is the market's ability to evolve, adapt, improve, and grow, even in the face of adversity.

The challenge for us as investors is to look beyond the now. By the time you and I can react or respond to the news, the market has probably already priced in the information. It does it pretty quickly and pretty well.

What are the most common mistakes you see in the portfolios that you inherit and how do you go about fixing them?

Great question. The mistake is only my point of view of the situation. Im sure there is always a good reason for certain holdings or the way the portfolio was designed. I would say the portfolio has just been managed differently.

Its an education process, and it takes time. Early on, as a young university student, I spent years looking at financial research, speaking to brokers, and losing hundreds of thousands of dollars betting it all on stocks. I remember when I was 23, a broker convinced me to invest in the RAMS Home Loans IPO. After the stock fell 80%, he called me and tried to convince me to buy more, because Westpac was taking the company over. That was the straw that broke the camel's back, so to say, and got me interested in a rules-based methodology.

I spend a lot of time going through facts, figures, and evidence. I try and present this data in a simplified way. Eventually, when clients see the data, they make decisions themselves. I think part of what Im here to do is to empower people to make confident and thoughtful decisions with their money.

If you could change one thing about the industry so that it can better serve Australians, whatwould that be?

Wow. This is a tough one. Just one? I feel like our industry and profession is treated with little respect by regulators. I feel like advisers are like rag dolls being pulled in all sorts of directions. Rules come in, and rules get thrown out. More rules come in, then get thrown out.

We need simplification, not more complexity. Rant over.

Can you share a personal passion or ambition you have for your future?

I run a company called The Good Company. Its a profit for purpose food company. We use profits to help fight poverty and hunger around the world with our partnership with The Hunger Project Australia. Id love to be able to contribute to human consciousness and global change, albeit in a very small way. Its been running for around six months, we have some products in retailers around Melbourne. You can check it out here.

I quit my corporate job to spend more time with my family, and ironically, have ended up starting two new companies afterwards. Its really important for me to spend quality time with my family and explore new places during holidays.

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Meet Robert: Fed up with the noise, this adviser has a few secret weapons - Livewire Markets

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You dont need an astronomical salary to retire early.

What you do need is a clear strategy on how to pull from retirement accounts without leaving money on the table. In fact, the way you leverage your IRA or 401(k) as you pursue FIRE (Financial Independence, Retire Early) status could make or break your personal finance goals.

I have seen people achieve a FIRE lifestyle when each member of the partnership makes $45,000 to $50,000 a year, says Cait Howerton, a certified financial planner (CFP) with Facet Wealth, a firm dedicated to unbiased, conflict-free financial planning.

As you inch closer to financial independence, youll eventually want to make withdrawals from your IRA or 401(k). If youre under the age of 59 , however, this action comes with notoriously hefty penalties that can leave thousands of dollars on the table and throw off your freedom number (the amount of wealth you need to retire early) completely.

Here are your options and how to proceed if accessing retirement funds early is on your mind.

Proponents of FIRE aim to retire years or even decades ahead of schedule. But there are other scenarios in which you may want to tap into your retirement accounts sooner than expected: Financial hardship, big career pivots, or self-funding the launch of a new business are common reasons to dip into these accounts.

Whatever your situation may be, its good to be aware of what financial planners call retirement fund diversification. Your long-term savings plans usually fall into one of three buckets:

To achieve FIRE, Howerton says, folks in lower salary tax brackets do focus on cutting expenses as much as possible. But they also employ investing strategies that can help anyone tap retirement accounts early without resorting to extremes.

Retirement accounts are important for achieving financial freedom, but many people delay setting up a strategy until its too late. Maximize your savings across taxable, tax-deferred and tax-free accounts to set yourself up for whatever surprises and opportunities come your way.

One couple Took advantage of maxing out one of the partners 401(k)s, says Howerton. Then they took advantage of contributing to Roth IRAs and putting money into brokerage accounts so that they had tax diversification.

Dawn Dahlby, a CFP and behavioral financial advisor, agrees. Diversification creates a ton of flexibility for the pre-retiree, and it helps balance tax ramifications throughout your life.

So what accounts should you tap, and in what order? Heres the pecking order that will help you maximize your savings.

Roth IRAs have the most restrictive contribution limits. In addition to the income ceilings mentioned above, the maximum annual contribution for a Roth is $6,000 per year ($7,000/year if youre age 50 or older). But if you plan ahead, you can use these accounts to withdraw money completely tax-free.

The workaround here is to be aware of Roth conversions. In a Roth conversion, you can move money from a tax-deferred retirement account, like a Traditional IRA or 401(k), into your Roth account. There are no income or contribution limits on Roth conversions.

Youll have to pay taxes on the amount you move between accounts, but you wont pay early withdrawal penalties (And you would have had to pay tax on this money anyway, since the contributions were pre-tax). This money can then grow tax-free in your Roth account, and you can withdraw it after a five-year waiting period without penalty.

Because a Roth conversion is a taxable event one that not only raises your taxable income, but could also bump you up into a higher tax bracket you may want to split the move into multiple conversions over several years.

This is known as a Roth conversion ladder, and its a fantastic way to maximize savings while also pursuing your FIRE aspirations. The Roth conversion ladder is an example of how strategic savings and tax planning can get you to your retirement goals faster.

Maximize your tax-free income over time, says Janet Galloway, a CFP with B&B Strategic Management. Lets pay what we legally have to, but not pay more than we actually have to.

Roth conversion ladders have several steps and require careful planning with a financial expert. For example, the five-year waiting period applies to each conversion, so youre limited on when you can withdraw funds from your Roth accounts based on when and how you opened them. A financial planner can help you determine how much youll need each year in retirement before 59 1/2 and set up a strategy to make sure you have access to the funds you need at the lowest cost possible.

A Roth conversion ladder is a multi-year strategy that can save you thousands or even tens of thousands of dollars in the long run. As Dahlby points out, though, theres an opportunity cost to withdrawing funds from a Roth IRA early: Missing out on tax-free gains.

In a perfect world, we dont like people to take money from their tax-free accounts, she explains. We put clients most aggressive investments in the Roth because they grow [tax-free]. She recommends first tapping taxable accounts, such as an investment account with a brokerage, because they dont come with penalties or limitations. Additionally, the capital gains taxes youll pay are lower than the income taxes youd pay on traditional retirement accounts.

After that, it becomes about weighing the cost of an early withdrawal penalty from your tax-deferred accounts against the opportunity costs of pulling from a Roth account.

Just pulling from your Roth right away might not always be the best idea, says Dahlby.

A traditional 401(k) the most common retirement plan available through an employer comes with plenty of options for pulling your money out early in case you need it. These options come with major drawbacks.

Withdrawing money from a 401(k) before youre 59 1/2 years of age comes with a 10% penalty in most cases. The penalty is tacked onto your tax bill for the year on top of the income tax youll owe on your withdrawal. The IRS makes exceptions to this penalty: You can withdraw due to financial hardship, take out a 401(k) loan if the plan allows it, or take distributions if you leave your job at 55 or older.

Youre robbing Peter to pay Paul, says Galloway. Youre taking away from your retirement lifestyle to fund your current lifestyle.

However, as Dahlby says, you have to weigh this penalty against the potential gains youd forgo by withdrawing early from a tax-free account.

Paying a 10% penalty might not be the end of the world, she says. Sometimes paying the 10% penalty isnt as bad as you think it is for having the opportunity to get access to those funds.

The most important thing you can do especially if you have the advantage of starting early is give yourself options. Dont rely on one type of long-term savings account; it might not meet your needs down the road.

Life changes every three to five years, Dahlby suggests. So its never too early to plan.

If you find yourself forced to stop working early or suddenly become able to because of a windfall having both taxable and tax-free accounts to tap into without penalty could help you maintain your lifestyle in early retirement. Work with a financial planner to understand your options, and use your available resources strategically.

We live in an uncertain world, says Dahlby. Our goals and plans change constantly. You want to be able to pull different levers and pull different money from different buckets based on whats going on.

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Curious About FIRE? Heres How to Set Up Your Retirement Accounts Now to Avoid Hefty Penalties Later, According to Experts - NextAdvisor

Larimores philosophies investing and life

Larimore told me the keys to financial independence are to live below your means, save regularly, keep costs and taxes low, avoid large mistakes, keep things simple and stay the course.Larimore said the three biggest mistakes people make are:

Indeed, Larimores most recent book,The Bogleheads Guide to the Three-Fund Portfolios, shows how a simple portfolio of three total market index funds outperforms most investors with less risk.

The three-fund portfolio is simply:

Total, in this case, means owning large, midsized and small company stocks. The S&P 500, for example, is a large-company stock index of 500 companies. A total stock U.S. market index is a broad-based index of U.S. stocks, big, midsized and small, including more than 4,000 company stocks.

Larimore said that the main values of total market index funds are their low costs, low taxes, great diversification and simplicity. With just those three funds, adjusted to your desired mix of stocks and bonds that suit your goals and your appetite for risk, you can own virtually every publicly held company on the planet and the vast majority of U.S. investment-grade bonds. As part of his never-ending desire to give back, Larimore has donated 100 percent of his royalties to the John C. Bogle Center for Financial Literacy (I am a past board member).

I asked Larimore the single most important piece of advice he had for seniors and he said, Keep what youve got. This means dont take unnecessary risks. If you lose 25 percent of your portfolio, youll need to earn about 33 percent just to get back even.

Even more than his financial philosophies, what I admire most about Larimore are his views on life. He told me he thought his key to longevity and vitality could be that he seldom worries. I was a young paratrooper in World War II where I saw the horrors of war, he said. After the war, I flew around the world, visiting many poor countries where I saw terrible poverty. These two events made me very grateful to be an American from a loving family. Compared to others, I realize, deep down, that I am foolish to worry about myself.

I think Im going to focus on his life lesson and worry less about the small stuff; it has certainly worked for Larimore. As Morningstars Christine Benz told me, Taylor is an inspiration in how to live well. I couldnt agree more.

Unsurprisingly, Larimore has no shortage of admirers. I was honored to be one of more than 100 people from across the country and world who attended his 98th virtual birthday party, organized by the South Florida and Tampa Bay Bogleheads chapter coordinators. For roughly 90 minutes, we gave our tributes to this great man and shared what we learned from him. In my tribute, I thanked him for helping so many people achieve their financial freedom.

If you would like to learn more about Larimore and the wisdom he has offered over the years, you can go to Bogleheads.org and check out the more than 55,000 posts he has contributed. If you want some information on a specific topic on investing or personal finance from people not trying to sell you anything, simply type the subject into the search engine. With 116,000-plus members who have made more than 6.4 million posts on over 334,000 topics, the odds are good that there will be something for you. And you do not have to be a member to read these posts.

Thank you to all of the volunteers for the community theyve created and the countless hours theyve given to help people across the world achieve their financial freedom. And thank you, Taylor, for all you have done and continue to do. We look forward to your 99th birthday party and many more.

Read the original here:

Investing Lessons From Taylor Larimores 98 Years of Wisdom - AARP

NEW YORK--(BUSINESS WIRE)--Carefull, the first digital platform built to protect the daily finances of older adults, today announced a pilot program with Nationwide and their Innovation team, leveraging access to Carefulls safe money monitoring technology.

In using its technology to support the 45 million U.S. adults who coordinate and protect daily finances for an older parent, Carefull will join Nationwides broader effort to offer on-demand solutions for the uncharted territory often navigated by its members who are actively caring for an aging loved one.

The Nationwide team knows that supporting caregivers and older adults in this environment means more than educational pamphlets; it means offering customers industry-leading monitoring, family communication and identity protection technology, said Todd Rovak, a Carefull co-founder. We now know that financial caregiving is as much as a 20-year need, so its fantastic to see Nationwide offer the latest technologies and step up with a system that empowers both older adults and those who support them.

Carefulls artificial intelligence platform will help participating Nationwide caregivers by analyzing checking, savings and credit card accounts for more than 30 issues that can affect finances of older adults, such as late or missed payments, behavior change and mistakes, unusual banking activity, cash transfers and charitable contributions that unknowingly recur. Users of the technologyincluding seniors, select family members and caregivers who support themcan receive notifications if any fraud or issues are detected.

Nationwide hopes to support and augment the efforts of financial caregivers while enabling their aging family members to better maintain daily financial independence. Going beyond typical monitoring, the Carefull service will also enable robust communication among family members who are involved in the financial safeguarding process.

"We are always looking for ways to provide extraordinary care to our members and we think teaming up with Carefull is a great way to help us deliver on our Nationwide promise. Being able to do more for our members during their caregiving journey is what we are most excited to lean into and improve, said Bobbi Jo Allan, vice president of digital product management & innovation at Nationwide.

Participating Nationwide customers can use the Carefull service for financial accounts and credit and identity monitoring, and also gain access to Carefull's financial independence tools, advice and content on the Take Care blog, Financial Independence Guide, and Financial Caregiving Roadmap.

About Carefull

Carefull is the first digital platform built to protect the daily finances of older adults, along with the 45 million U.S. adults managing the daily finances of an older loved one. Founded in 2019, Carefull's technology integrates senior-specific financial monitoring, identity theft protection, communication, and how-to content, replacing the ad hoc paper pile, spreadsheets, bill stack and hold music that today greets adults caring for someone else's money. Carefull believes that creating safer, smarter tools for financial caregiving isn't only about money. It's about relentlessly simplifying the awkward tangle that happens when money and family come together. For more information visit http://www.getcarefull.com.

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Carefull and Nationwide Team Up to Support Financial Caregivers - Business Wire