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The 5 most viewed blog posts on the Upperline Financial Planning blog in April:
You may know that April is Financial Literacy Month. What you may not know that last week was National Retirement Planning Week. While the whole month’s focus is to increase your knowledge (read: literacy) when it comes to all things financial, this past week was laser focused on retirement planning.
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We at Upperline Financial Planning are proud to announce that H. Jude Boudreaux, CFP® was recognized by Medical Economics Magazine as one of the Top Financial Advisors for Doctors again in 2012! We are humbled by the honor and work hard every day to be worthy of the recognition.
We are proud of the company that we are building here, and would like to welcome you to contact us if you’re interested in learning more about our unique approach to financial planning.
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This post is part of the Financial Rules of Thumb series. Check out the rest here!
(Today’s post comes from Trevor Acy, an Upperline Financial Planning intern)
Some companies offer great deals for employees to invest in their company stock. While it’s not exactly too good to be true, there are definitely risks you should be aware of.
The Upperline: Diversification is important. Having too much investment tied to the same place your income comes from can be risky.
It’s tempting, I know. They’ll give you a match or a discount to purchase company stock. There is nothing wrong with taking advantage of those options. We strongly recommend that you guard yourself against putting too many of your eggs in one basket.
Single stocks are riskier and even more so if it is your company’s stock.
Single stocks mean you are relying on the performance of one company to earn dividends and interest. If that same company pays you too, you run the risk of losing your investment and your job.
One day, you will no longer work for that company.
You are going to find another job or retire, they are going to downsize you, or you will die. You know your job is not going to provide an income for you and your family forever. You will have to rely on different sources of income at some point which should involve your investments.
If your company goes bankrupt and you’ve invested heavily in their stock you’ve just lost your income and your investments. That’s not a good one-two punch. Take the match or the discount, but don’t overload your investments in your own company’s stock.
Make sure you are spreading yourself wide enough that poor performance from any one investment doesn’t derail your financial goals.
How can you take advantage of employer stock benefits and remain diversified?
What questions do you have about your personal investments in employer stock?
This post is part of the Financial Rules of Thumb series. Check out the rest here!
(Today’s post comes from Trevor Acy, an Upperline Financial Planning intern)
This rule of thumb can trigger emotional response. It may seem selfish to begin your retirement savings without putting money toward your kid’s college education first. You want to do right by your children, but it is important to right by yourself too.
The Upperline: If you pay for your child’s college but haven’t saved for retirement, you’ll be depending on them or government care in your golden years. Retiring with dignity should take priority over college savings.
This is a rule of thumb that I agree with. I want you to be able to save for your child’s college, but you should start your retirement savings first. Both of these are important reasons to save. College may seem more urgent since your child isn’t getting any younger and it is easy to delay retirement saving “until later”. A key to retiring with dignity is taking advantage of the power of compound interest. The best way to do that is to start saving for retirement as soon as possible.
It is ultimately their responsibility for their education. Your responsibility is your retirement.
Having their parents pay for college isn’t their only option. Scholarships and grants exists for a reason. They can work to pay their tuition (did you know that college students that work actually make better grades? See this NYTimes article on a study by Laura Hamilton for more on that topic). They can also start their education at a community college to get credits for core courses at less expensive tuition rates.
We don’t want to encourage students to go into debt for their education. The number one reason people drop out of college is due to debt, not grades (see this great infographic for other reasons).
One note from Jude: Student loans can be a useful tool, but we have seen clients burdened with what amounts to a mortgage payment for their college educations. Using debt is always about making smart choices, and it’s important to make good choices bout the potential return one can expect on borrowing money for college.
Doing both is great, if you can afford it.
Let me be clear that your goal should be becoming financially capable of saving for retirement and college. If you are able, these two should be done concurrently. But while you are working toward that goal, your retirement takes priority over college savings. Don’t forfeit your retirement in order to be a blessing to your child now only to become dependent on them later. Refer to our post on how much to save for retirement and if there is more discretionary money to spend then you can begin funding an Education Savings Account (ESA) or 529.
We will cover education saving vehicles in an upcoming series, but be wary of using the following for college savings:
These do not provide maximum growth or keep up with inflation well enough to be a good savings vessel especially when ESA and 529 plans exist.
What are your questions about saving for college? Let us know and we may answer them in a future post!
2012 was an incredible year for Upperline Financial Planning, and I’m so thankful to all of you who visit the site and contributed to our success! Below is a list of the 10 most viewed blog posts of 2012, I hope you enjoy them, and hope we can contribute great information for you in 2013!
We are often telling our clients that most of what comes from the financial media is just noise, so to help you cut through the chatter here’s the best of what we’ve been reading lately. Today’s update comes from the newest member of the Upperline Financial Planning team: Kevin Sweet.
IMF sees alarmingly high risk of deeper global slump
(IMF sees global growth at slowest since 2009 and “Confidence in the global financial system remains exceptionally fragile.”)
Using Menu Psychology to Entice Diners
(The Science & Psychology behind the placement and pricing of menu items.)
Richard Feynman on Beauty (VIDEO)
(The Nobel Prize winning scientist and world renowned thinker on the beauty of everyday objects.)
What subjects would you like to see us cover in future dispatches? Let us know in the comments below!
In preparation for the arrival of Isaac in the coming days, we have evacuated the Greater New Orleans area. While we don’t expect a catastrophic result from this storm, it is critical to us that we protect our families and are able to serve our clients if urgent financial needs arise, which we may not be able to do in the case of an extended loss of power or communication ability in a disaster-affected area.
Contact:
Jude is available on his mobile phone at 504-610-5833. The emergency phone number is 773-696-5929 which will ring his mobile phone or his hotel room in Houston, and in the event of an extended evacuation will become our primary phone number. Our email is hosted outside of Louisiana and thus we are not expecting any service interruptions, so please contact us at jude@upperlinefinancial.com with any questions that you may have.
Data:
The security of client data is one of our most critical performance measures. We use a top-ranked hosting provider that is not located within the storm affected area and anticipate no issues.
Investments:
If you need to access funds from any of your investment accounts, please contact us. You may also contact your investment managers or their third-party custodian directly for any withdrawal requests or other service-related issues.
We are hoping for the best for our client families and the city that we love. Please reach out to us if there’s anything at all that we can do to assist you, or simply to check in.
Yours truly,
Jude
My daughter recently broke her arm. There was no spectacular fall or story, just a fall like any number of hundreds of other tumbles she’s taken as a toddler. She just happened to catch this one just right, and she has a very small buckle fracture in her right arm (which is healing nicely, thanks for your concern).
Watching her with her arm the day after the fall, and in the early days of her cast was fascinating to me. She definitely had an instinct to protect it. She’d hold it with her other arm. She’d turn so her right arm was further away from other people or doors. She also would try to pull it away from those who were trying to help her, like her mom and I, or the nurses and doctors.
She’s not quite two yet, so she’s too young to understand that those people are there to help her, and if she lets them help she’ll feel better sooner. I’d like to think that we all know this as adults, but how often do we try to shield our hurts from those who could help us with them?
How often do we hide our money histories or problems from our spouses? How often are we reluctant to ask a friend (or a financial planner) for help when we’re facing a challenging or overwhelming situation?
It’s natural that we want to protect and hide our hurts. Let’s all understand that we’ve all got them, and we can help each other recover and grow if we’ll only trust those who truly have our best interests at heart to help us heal.
I recently had a conversation with my wife where I told her that an event was going to be held next friday. We left the conversation, and thought we both understood what I meant there. Problem is, we didn’t. She thought it was the next friday on the calendar. I meant next week friday. I can see how we both drew our conclusions based on the words that I used, and how being a little bit more specific (I could have just said, Friday the 20th) would have left nothing open to misinterpretation.
I’ve been thinking about this small example for the past few weeks, and how it relates to money. How often do we use words about saving or spending that we assume mean the same thing to our spouse or partner?
Plato once said that “the beginning of wisdom is the definition of terms” and so I encourage you and your partner to get wise about each other. Here are 9 questions about money that can get you both talking and help you better understand each other.
How much money is a lot of money?
How much money is ‘not very much?’ What’s the upper limit?
How much do you need to have in a savings account in order to feel comfortable?
How much debt is too much?
How much should we both feel comfortable spending without at least checking in with each other?
How often should we review our goals around spending and saving?
What’s the best financial decision you’ve ever made?
Can you tell me about a time when you felt in control of money in your life?
When you’re feeling stressed, where do you find yourself spending more money?
What other questions would you add to my list? Please add them in the comments below!