Dream Financial Planning Monthly Newsletter
Plan Proactively, Invest Intelligently, Minimize Taxes
Employee benefits are an important part of your compensation package, so I was happy to share my insights with Allison Pohle of The Wall Street Journal. If you’re starting a new job or going through open enrollment, you might see an option to open an FSA. While it makes sense for some people to put aside money pretax to spend on qualified expenses, these accounts aren’t right for everyone.
Clients frequently ask me, “How aggressive should my portfolio be?" There is no right answer. It depends on what your goals are and your ability and willingness to take on risk. The ability to take on risk is measured by factors like when you’ll need the money (time horizon), and age. I discussed the importance of using goals to determine your time horizon in this article for U.S. News. The willingness to take on risk essentially comes down to your “money personality".
Check out the Vanguard allocation models below to see if you’re comfortable with the historical risk/return of various asset allocation models that might resemble your portfolio.
Vanguard portfolio allocation models
How do you choose how much you want to invest in stocks or bonds? These allocation models can help you understand different goals-based investment strategies. Please contact your advisor or send me an e-mail before making a change to your asset allocation.
Being Too Conservative Could Cost You
I often see clients in their 20s and 30s with 401ks and IRAs that are too conservative. I know there isn’t a one size fits all investment strategy, but I believe young professionals should be invested in growth portfolios. See the Vanguard models above. If your portfolio is too conservative, you could be missing out on an additional 2-2.5% in annual returns. This could be a $100,00+ mistake by the time you retire.
I work with my clients to build a portfolio that’s aggressive enough to meet their long-term goals, but conservative enough to keep them in the market when the downturns, like the 35% decline we had last March, inevitably happen. I use Riskalyze and an extensive meeting process to help my clients understand the potential risk and return of their portfolios.
The Breakdown On Capital Gains & Taxes
Only three things in life are certain and taxes is one of them. Understanding the mechanics of taxes is crucial in maximizing your after-tax investment returns. This guide won’t have you paying $750 in taxes on millions in income like President Trump, but it will break down capital gains and cover strategies to reduce your taxes.
December Blog Posts from Dream Financial Planning
If Santa Fell Off the Roof, Would Your Insurance Cover It?
The holiday season isn't complete until you've watched your favorite Christmas movie. While you settle in with a cup of cocoa, think about how the aftermath of these favorite movie mishaps would play out in real life.
Protecting Your Parents: Identifying and Preventing Elder Financial Abuse in 2021
Growing older is a part of life, and while it's difficult to see your parents age, ensure that they have the protection they need by identifying and preventing these signs of elder financial abuse.
Read more from Dream Financial Planning on the blog.
I wish you the best as you start planning for your dreams!
Lamar Watson, CFP®
Founder and Financial Planner
Dream Financial Planning
Schedule an Appointment
With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio feel free to send me an e-mail.
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This month's newsletter is filled with information about Stock Options, Budgeting Resolutions, and Tips to Maintain a Work-Life Balance.
This month's Newsletter is filled with year-end Financial Planning topics you should consider. Including open enrollment, optimizing your 401k, and tax-loss harvesting
In this month's newsletter, I discuss how the stock market doesn't historically care who's in the White House. I also share a Fox Business Network article, where I'm quoted, about paying down debt or investing.
I've been getting a lot of questions recently about Insurance, so I discuss in this month's newsletter. Before you buy Insurance, make sure you're working with a Fiduciary and ask about the agent's fees and commissions, which are often very high or hidden for Whole Life Insurance products and Annuities. How do you know if this is what they're trying to sell you? Look out for terms like cash value, guaranteed return, no risk, or tax-free growth.
In this month's newsletter I discuss why I started Dream Financial Planning and the foundational principles of my firm. I also included two downloadable PDFs. One highlights what you should consider when paying off your student loans. The other provides guidance on Income-Driven Repayment ("IDR") Plans, which can be an attractive option for federal student loan borrowers.
In this month's newsletter I shared an article that discusses Regulation Best Interest vs. the Fiduciary Standard. I also included two downloadable PDFs. One highlights how to make sure your Health Savings Account (HSA) distributions are tax-free. The other provides guidance on if you should contribute to a Roth or Traditional IRA. Last, but not least there are articles on the recent jobs report, first time home-buyers, and mortgage refinancing.
Are you considering a Roth Conversion? I included a downloadable PDF flowchart to help guide you. I also mention the surging Stock Market and better than expected unemployment numbers. There's also a friendly reminder about the difficulties of trying to time the market.
What should I do with my 401k? This is a question I've been getting a lot recently, I answer it in this month's newsletter. I also include two downloadable PDFs. One is a checklist that outlines the primary issues you should consider when reviewing your taxes. The 2nd checklist outlines what you should do if you lose your job in these difficult times.
I discuss the recent economic stimulus package and what it means for you. I also include two downloadable PDFs with helpful tips to help you navigate these trying times. Lastly, I discuss the Behavior Gap, and how holding your emotions in check is essential for financial success.
In the words of Warren Buffet. “Be fearful when others are greedy and greedy when others are fearful.” Topics include Market Volatility, trying to time the market, and Mortgage Rates.
Topics include Millennials and home ownership, a tax calculator from the IRS, and January blog posts from Dream Financial Planning.
Disclaimer: Dream Financial Planning, LLC does not warrant that this information will be free from error. None of the information provided on this website is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall Dream Financial Planning, LLC be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the materials in this site, even if Dream Financial Planning, LLC or a Dream Financial Planning, LLC authorized representative has been advised of the possibility of such damages. Please consult with your own advisor before making any changes to your Financial Plan, Investments, or Insurance coverage.