Get Your Finances in Order During National Self Improvement Month

Elisbeth Embry of featured me on her Women Investing Network (WIN) podcast, where many topics were discussed that will help all of us take control of our financial lives. See the transcript from the segment of my interview.

Elisabeth Embry: It’s my pleasure to introduce Nancy Doyle. She’s the founder of The Doyle Group. She’s a finance expert and she’s also an author of the book Manage Your Financial Life. Nancy, welcome to the show and thanks so much for being here.

Nancy Doyle: Well, thank you for me having me. Glad to be here.

Elisabeth Embry: So I know that you have an extensive background in wealth management and finance. Do you mind giving our listeners a little bit of your background?

Nancy Doyle: Oh, sure. I’m happy to. First of all, my undergrad is in economics at Georgetown. I have a master’s, MBA in business from University of Michigan’s Ross School of Business and I also am a CFA or I have my Chartered Financial Analyst designation. I’ve had that for about 20 years now. I work in finance and investing for about 30 years in number of different roles: consulting, banking, corporate finance, equity analysis, and wealth management. For the last almost 11 years now, I’ve worked with one family helping them manage their investments. And what’s a little unique is I’m a consultant, I’m independent. I don’t work with one particular wealth management firm rather the family I work with, we invest with a number of different money managers across a lot of different asset classes. And that independence and objectivity is really nice because we can choose whatever investments, from whatever investment manager depending on the needs of the family I work for.

Elisabeth Embry: You know, that’s really cool that you have this, in essence, freedom. You have all of this depth and breadth that you have this freedom to provide specific and targeted support for individuals and I’m assuming corporations.

Nancy Doyle: Well, actually this is just a family that I work with, similar to someone who works with a family office type of model.

Elisabeth Embry: Oh, got it.

Nancy Doyle: So I’m not involved in the corporate entity. It’s helping this family, it’s taxable investments, so it’s just focused on investing for the needs of the family and they’re very long-term-oriented investors which is also helpful. We’re not trying to manage to one particular quarter or a particular investing benchmark, it’s really trying to enhance the wealth of this family for them and for future generations.

Elisabeth Embry: Oh, very cool. So Nancy, I was looking at your book, Manage Your Financial Life: A Thoughtful Organized Approach for Women. And I got to tell you, I loved it. It spoke to my need for things to be organized and decluttered and it was really very cool. Who’s the target audience for your book?

Nancy Doyle: The concepts I talked about applied about men and women. But for many reasons, I really am targeting women. Because I’ve been in the business for a long time, over the years many women have reached out to me with questions about managing their financial lives. They want to be more knowledgeable on the topic. And also most of us in our lifetime, especially women, go through transitions that have a financial impact whether it’s having children, buying a home, changing careers, starting a business, and unfortunately divorce and widowhood are also transitions that many women go through that have a financial impact. Because of these factors and because people know I’ve been in this business a long time, a lot of women have reached out to me with questions about, “Can you recommend a resource? Can you help me suggest some books that will help me be more knowledgeable?” So I look around trying to find resources for friends and family. And honestly, I didn’t find anything that I felt was truly comprehensive, easy to understand, and also independent and objective.

Elisabeth Embry: And there’s so much out there. I mean there’s just such a massive information glut out there. It’s crazy.

Nancy Doyle: Well, there is a lot out there and what I found was there are things written about a specific topic. For example, creating and sticking to a budget. There might be something about saving for your children’s college or saving for your retirement, even had a finance buying a home or other major purchases. It’s not comprehensive. But also what I found is there are a lot of things that have been written by people. Once you look into their backgrounds, they’re actually selling product or they’re aligned with the financial services firm. I’m not looking for more clients. I work with this one family and enjoying my work and I’m not selling any products. And that’s fine if people do that, but I think it’s really important to let the readers to know that, “By the way, I also have a business, I’m looking for new clients or I’m aligned with a firm and they sell this product that I may or may not recommend.” So for all those reasons, I decided to write the book about four years ago.

Elisabeth Embry: Really like a systematic approach that it has for achieving financial goals. Do you mind sharing with the listeners some of the highlights out of the book?

Nancy Doyle: The system I talked about in the book is really the system I follow and it’s evolved over the years as my life and my needs have changed, but it really boils down to four steps. First of all, get organized. Being organized is essential. Second, you have to analyze your financial profile objectively and I liken it to when I was an underwriter working in a bank. Or if you’re looking at an investment decision, think about your financial profile as an objective third party would analyze your financial profile and you need to do it before you make any big changes in your life. You have to objective and you have to do it before any big changes.

The third step is educating yourself about investing and you have to start with the fundamental investing concepts. That’s really the foundation of your education. You need to learn about the different kinds of asset classes or investments and also the different types of investment accounts. The last up is actually investing your money which starts with determining what your needs are. You also have to look at the different investing options you have. And last, you have to be actively engaged. You have to monitor your investments and learn how to assess the performance of the various investments you have. And also from time to time, look at your overall asset allocation. You have to revisit it and make sure that you’re investing correctly, you may need to make some changes. So it’s a set-it-and-forget-it exercise. You have to be actively engaged going forward.

Elisabeth Embry: You know that’s true. I see so many women early in their career, they set up their “I rather work for a company for five years” or “I started 401(k).” They’ve got a bunch of money going into a fund that they know very little about and they’re not really paying attention to. I mean money is growing because they’re putting money and their company putting money in, but they’re not really managing their financials with that.

Nancy Doyle: Well, I think you raised a good point because I think what happens is when you set up say your 401(k) selection or you have other taxable investments too, I recommend that everyone look at their entire pie, if you will, and look at common aggregate asset allocation. Over time, your asset allocation is going to change because different investments make row more than others, your needs may change. So you have to stay actively involved. I also think in the book, I try to lay out some of the key risk factors that I think people need to understand. If you’re investing in a mutual fund, what are a couple of metrics or a couple of information points you can look up, you can look up online, and just see how really risky an investment might be? Also at the beginning of the book in the educate section, I talked about what causes different investments to change in value. And I think a lot of people may not really understand how these different asset classes or investments, types of investments, change in value. I think that’s important for everyone to understand.

Elisabeth Embry: So a lot of the audience here is they’re real estate investors. What are your thoughts about real estate? From my experience, the coast or more of a cyclical market and they have a lot of volatility where the Midwest is more a linear market, it has a lot more stability but certainly less appreciation. What are your thoughts?

Nancy Doyle: Well, are you talking about residential real estate, someone deciding whether or not to buy a home or investing in real estate as an asset class like with the REIT or other investment?

Elisabeth Embry: So I personally don’t have a REIT, but I have rental properties that are cash flowing with rentals. There are other people that are starting out that just get into REITs because it’s a great way to take a smaller dollar or amount and kind of distribute your potential risk.

Nancy Doyle: Exactly. I think in terms of real estate, a couple of things, I think REITs are a nice way to get diversification so you’re not tied to what — say if you can only invest in one property, there can be some risks there if you’re tied to one geographic region that’s reliant on one particular industry that may be a factor. But whether you’re looking to buy a home for yourself or invest on property, I could see your point about the coast being cyclical, but I think it’s helpful to look at what’s happened over the last five years with demand. Also, think about supply coming to market. If you’re in an area where there’s been a lot of building recently and you go to invest in a property, at some point, there may be excess supply which will have an impact on the value of your investment. And in the book, I talk about supply and demand as one of the fundamental investing concepts that everyone needs to understand and I think it does have a big impact on the real estate market.

Elisabeth Embry: I couldn’t agree with you more. Remember, in the — what was it, the late ’80s, when Dallas got completely overbuilt? And that was the first time that I ever saw just whole building sitting idle. It’s amazing.

Nancy Doyle: Well, I think it’s also a good lesson for people about liquidity, another fundamental investing concept I talk about in the book because supply and demand is clearly a factor. But if you, for example, live in a part of the US say Arizona during the last housing bubble where there was a lot of overbuilding and people who whether it was an invest in property or their own home who were in Arizona, some of them it wasn’t the right thing to do to sell their home. And if they were trying to change jobs or had lost their job, it ties you to a particular community if you’re not able to move because you are stuck in a home that you’re not able to sell. That’s just one example. That can happen anywhere in the US, but I think looking at the building over the last five years in a particular area, looking at the underlying economic trends in the community, our company is coming in, our company is leaving, all those things will have a value on your real estate going forward or have impact on the value.

Elisabeth Embry: That’s so true. Looking at a trend line and if you can live an area for 20 years and see where the ebbs and flows but then you layer in all of that other intelligence that you’re talking about. I love these tips. Are there other tips that you want to share with the listeners especially around this concept of this financial spring cleaning since we’re in spring?

Nancy Doyle: Well, that’s something that I’ve been talking about recently especially going into tax time. That’s the perfect time to do a financial spring cleaning and that’s a big part of the “Getting Organized” section of the book because to manage your financial, you really have to know what you need, what you have, and where it’s located, and there’s really three steps. First, you gather up all of your documents, everything you have in your home related to banking, credit card, retirement accounts, brokerage accounts, legal, tax, anything related to big purchases, gather it all, you’ve got a sort. And some of the rules you know that everyone talks about with your tax returns, you need to keep your tax returns, all supporting documents for seven years from the date you file your taxes. It’s not seven years from December 31st of a tax year, it’s seven years from the date you file.

Elisabeth Embry: I really like that. That’s a great callout.

Nancy Doyle: Yeah. And you never know that could be something that could trip you off if you don’t keep records for the right amount of time. Also, I would recommend people keep their banking credit card statements for that same seven-year window. I personally think whenever you have a loan or a path notice, keep that documentation indefinitely. I think it’s important.

Elisabeth Embry: Now that we’re on more of an electronic age where you’re no longer getting your paper copies, you’re starting to get electronic copies, are there other, in essence, different rules, things to think about when you’re getting electronic versions of these? I’m relying on my bank to keep that information. Is that something that I should be doing?

Nancy Doyle: I recommend that people keep both. What people are unaware of is that banks and financial services firms don’t necessarily keep the seven years archive that I recommend that everyone have. So what you can do for example with an investment account or a retirement account, but more importantly for an investment because it relates to taxes, you’ll get an annual summary, you can get a PDF version, keep that on your hard drive obviously password protected with all your financial files, but I would also print out a hard copy, if you have an investment account, the year-end summary. I would keep that for as long as you have the investments in that account. Also, it’s very important that you keep documentation related to any new investment you make. So if for example you make an investment in a REIT fund, keep the initial confirmation as long as you have that investment, both in electronic copy and a paper copy. Because again, you just don’t know how long banks are going to keep information. At some point, we can all just keep electronic copies, but now, I mean I’m not sure if my bank has information going back seven years. I can get three years but not seven years. So you might want to keep the hard copies too and you can keep annual statement for most of these things.

Elisabeth Embry: And that makes a good callout especially if you’re selling an asset, you need to have the information that you —

Nancy Doyle: Well, just like with your home. Any improvements that you make to your home, you need to keep track of that because that has an impact on the cost spaces which is important when you go to sell your home.

Elisabeth Embry: Absolutely. So are there other specific tax advice that people should be thinking about? And also, for the lucky people that may be getting tax refunds, what should they be doing thinking about with those?

Nancy Doyle: Well, two things. First of all, something that we can all do to help us at tax time is in the book, I talk about the importance of creating a filing system that works for you and one file, whether it’s electronic or paper, it’s really helpful to keep what I call a current year tax file and it sounds very simple, but a lot of people don’t do it. Keep a file folder in your desk any time you have an expense that might be deductible, a donation, anything that occurs during the year, make a copy or make an electronic copy and keep a folder on your hard drive of anything related to taxes because you may not remember that come next April. And I think a lot of people are going to their checkbooks whether online or their paper checkbook trying to remember their donations and other expenses they may have incurred that are deductible for taxes. So that’s one tip that saves me a lot of time and I recommend everybody to do it.

Elisabeth Embry: That’s a good advice.

Nancy Doyle: Because think of all the documentation you receive at your end, it doesn’t all come on the same day whether it’s proved that you have health insurance or if you take a distribution from a college savings plan, you need to document it, things come electronically or in the mail at all different times, so it’s good to have one folder to gather that. And don’t wait till December. Set it up in January because you incur those expenses and make those donations all year long. Now in the terms of the tax refund, I think it’s very tempting to go out and buy yourself something nice, but I really recommend that you start with, as I say in the chapter on investing, you need to start with your needs and you need to make sure you have your basis covered. I mean everybody needs to first look at, “Okay, do you have credit card debt outstanding?” If that’s the case, your tax refund really I believe should go toward addressing that credit card balance that you’re carrying.

Also, do you have your emergency fund? I know everyone talks about that, but you need to have those two things squared away. And if you’re in good shape with both not having credit card debt and having your emergency fund established, I think it’s important to look at your retirement accounts because the vast majority of us have not saved enough for retirement and you’ll be thankful down the road rather than buying yourself something nice with your tax refund if you put the money away for retirement. That’s really important.

Elisabeth Embry: Back on your emergency funds purse, if you will, what’s the recommendation on how much is enough? How much should I keep in reserves?

Nancy Doyle: You know a lot of people talk about this and I’ve heard everywhere from three months to nine months. And the reason it varies is again depending on the person and their needs. For example, if you lose your job and face a number of restrictions for getting a new job, say you’re not able to relocate, say you require flexible work hours, say you’re not able to travel for business, any of those restrictions or limitations, it may take longer for you to get a new job, so you need to factor those things in. Say for example you have health issues or someone in your family has special needs, you need a bigger cushion. You might need more than nine months. I think you need to look at your particular financial profile. That’s why I talked about it in the book and that factors in to what sort of planning you have for your emergency fund. The other thing too that I think this is common sense, but make sure your emergency fund is in a very liquid asset class. It should be in a money market fund. It should not be invested in the market because the market as you know can go up and down and you want to be able to access that money when you need it if in fact you do need it. And if you do need it, it should be a priority to replenish it.

Elisabeth Embry: That makes a lot of sense. I really like that perspective. That’s assuming that people actually understand enough about their budget and their expenses which part of why I really like about the book is it helps you get that understanding of those expenses that are coming in, what your money really is doing, et cetera.

Nancy Doyle: And I know some people think it’s — they start with living on a budget and decide what they’re allowed to spend every month on particular items and I think that’s a good strategy for some people. Frankly, what I find sort of like the analogy of writing down all the foods you eat and then looking at it and saying, “Okay, I didn’t need this, that, and the other, and I can be healthier if I eliminate these two or three things from my diet.” If you do the same with your spending, it’s really not that hard to go on your bank website, download your activity for a month, three months, six months, and sit down with your partner if you have one and look through all your expenses and say, “You know what? We’re spending a lot more for this or that than we realize.” I also think if people can limit themselves to say two credit cards, it’s much easier to analyze your spending and you’re much less likely to build up a credit card balance if you only have two credit cards.

Elisabeth Embry: You know I completely hear you on the two credit cards because then you actually — they’ll produce nice reports for you on what you’re spending. But one of the things I particularly love that you said was go back and analyze what you’ve been spending for six months in what categories. So for instance I keep my information in Mint which is a little application that just kind of sucks in data. And when my husband and I looked at how much we were spending on eating out, we were floored. We were absolutely floored and it’s like, “Well, there’s an easy way to save a big chunk of cash.”

Nancy Doyle: Well, another thing that I think is surprising I know personally before we decided to buy a home, we sat down and my husband and I looked at the amount of money we’re spending on various categories and what surprised me was the amount we’re spending on our children’s activities which definitely our priority, but we were not factoring in all the wonderful opportunities that kids had to do classes and camps and things. You know that’s a bigger a part of our take-home pay that we realized and I think that exercise doing it with your partner or your spouse, if you have one, it really can help you be more disciplined going forward because you think about, “Well, if we’re spending this much on activities which are a priority, where can we find more money in other areas that are not the same level of priority?”

Elisabeth Embry: Fair enough. So Nancy, is there anything that we haven’t covered that our listeners should know?

Nancy Doyle: Well, we talked about it a bit, but I just want to really reiterate that managing your financial life, you really do need to start with getting organized. In the book, I talk about the financial spring cleaning and some other great exercise that will help you get started because a lot of people think you can just jump right in and pull out your retirement plan statement and start there. There really is a process. I also think that you need to take a comprehensive view that’s so important and you have to work with your partner if you have one because you both need to be up to speed, you both need to be knowledgeable and you have to be on the same page.

Elisabeth Embry: Couldn’t agree more. What’s your website? Where can people buy your book or get more information about you or your company?

Nancy Doyle: Sure. Well, I encourage people to come to my website which is ManageYourFinancialLife.com. You can also follow me on Twitter and Instagram which is @NancyFinance and my book, Manage Your Financial Life: A Thoughtful Organized Approach for Women, is available at Amazon, Barnes & Noble, and most independent bookstores.

Elisabeth Embry: Terrific! Well, Nancy Doyle, founder of The Doyle Group, finance expert, author of Manage Your Financial Life, thank you so much for joining us today.

Nancy Doyle: Well, thank you so much, Elisabeth.

Check out the audio here: Women Investing Network (WIN)

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