Financial professionals may possess a variety of certifications and designations. These credentials instill a sense of competency. In recent years, however. the number of financial credentials has expanded significantly. If you are choosing to work with a financial professional, you should understand what these credentials mean. The prestige of certifications and designations and their usefulness to clients varies considerably. The Financial Industry Regulatory Authority, or FINRA, has a designation lookup feature on its website, https://www.finra.org/investors/professional-designations. The tool is very helpful, especially because you can compare different designations side by side. FINRA does not endorse or recommend any of these designations. The list of designations on the FINRA website is extensive. Currently, there are more than 200 listed. How do you determine which are the most meaningful? Look up what is required to achieve and maintain the various designations. If you need help with retirement planning, what are the prerequisites for…
How to Dig Out of Debt
Prior to the coronavirus outbreak, the US economy was doing quite well. The unemployment rate was near record lows. Housing values nationwide were climbing, as was the stock market. Despite these favorable economic conditions, Americans continued to take on debt. According to the Federal Reserve, aggregate household debt totaled more than $14 trillion as of March 31, 2020. This amount exceeds the prior peak, which occurred in the third quarter of 2008. Because there is a short delay in reporting individual credit figures, The Federal Reserve cautions that these figures do not fully reflect the impact of the COVID-19 shutdown that began during the last two weeks of March. There is economic uncertainty ahead, so people must analyze their finances and work to strengthen their situation. Getting out of debt must become a high priority. There are different approaches to dig out of debt. The best method for you depends…
Time to Focus on Your Retirement
Most women are caregivers. We often put others’ needs—whether our parents, our spouse, or our children—before our own. We all have heard the advice that we cannot help others without taking care of our individual needs first, which is also true for our finances. Women take on many roles throughout their lives – daughters, wives, mothers, and, increasingly, businesswomen. The Small Business Administration reports that 50% of all small businesses in the US are home-based, which equates to approximately 15 million. The Census Bureau estimates that women run nearly three-quarters of home-based businesses. Running your own business offers independence and flexibility. These appealing attributes are sometimes the primary reason why women start businesses, especially those who are mothers. At the same time, women business owners need to be even more diligent and disciplined about planning for retirement. Saving enough for retirement is the biggest concern for many of us. For…
Build a Budget Template
My Build a Budget Template helps you categorize and analyze your spending. More important, it helps you identify ways to make changes. Click on the link below to download. Budget Template
Georgetown University Center for Financial Markets and Policy Panel Discussion
On April 28th, the Georgetown University Center for Financial Markets and Policy, the Wall Street Alliance, and the Office of the Provost hosted a panel discussion featuring Nancy Doyle entitled The Markets Have Been Rocked! Where Are They Headed?
Financial Truths
Managing your financial life is not a “set it and forget it” exercise. You must take a comprehensive view and stay engaged. As you work through the process and become more conversant with concepts, many financial truths are worth remembering: The importance of time: Compounding is powerful. The importance of risk and return: There are many types of risk. The importance of discipline and conviction: Stay true to your plan. The importance of patience: Study your investment decisions and don’t rush. The importance of value: Value is not what you paid for something. It is what someone else is willing to pay for it. The importance of supply and demand: Both have an impact on value. The importance of expectations: They also drive value. The importance of liquidity: How easily something can be converted to cash is key. The importance of total return: Look at both appreciation and income. The…
Technology: Convenience and Risk
Advances in technology and mobile communication have changed the way we manage our finances. These innovations save time and allow us to be more informed consumers. But the innovations have also introduced new risks and exposures. With time, your financial accounts will grow, and so will the potential losses from identity theft and fraud. Review your credit report regularly. You can download your free report and search for errors or indications of fraud at www.annualcreditreport.com. If you will not be in the market for a new loan soon, it is possible to freeze or lock your credit profile to reduce the chance of identity theft. In that case, you need to contact each of the three credit bureaus: Equifax, Experian, and TransUnion. Here is a link to learn more. https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs If you receive a suspicious email, text, or voicemail that appears to come from your credit card company, do not…
Tax Efficiency
As an investor, you need to consider the impact of taxes. The taxes owed on investments depend on the type of investment account. For tax-deferred accounts, such as 401(k)s and 403(b)s, you contribute money from your paycheck before it is taxed, known as “pre-tax dollars.” In other words, you do not pay taxes on the portion of your salary that goes directly into your 401(k) or 403(b). Moreover, you do not pay taxes on the income or capital gains generated each year. Instead, you pay taxes when you withdraw money from the account. Roth IRAs and college savings plans, such as 529s, are examples of a tax-advantaged account. You fund these kinds of accounts with after-tax dollars, and you do not get a tax break upfront. After you fund a Roth IRA or 529, the income, appreciation, and withdrawals are tax-free. For taxable accounts, income and capital gains are not tax-exempt or tax-deferred, so you…
Understanding Fees
In the investment arena, fees are usually charged as a percentage of assets quoted in terms of basis points. A basis point is one one-hundredth of 1 percent, or 0.01 percent. In other words, 100 basis points equals 1.0 percent, and 50 basis points equals one-half of 1 percent, or 0.50 percent. There are many kinds of fees. Some fees are transaction-based: these compensate brokers for putting clients in an investment or for executing a trade. With a commission, the brokerage firm charges a fee for each transaction. In contrast to brokers, who charge commissions, fee-based advisers charge an annual fee based on a percentage of assets under management. The adviser is paid to manage your money and not to execute trades. If the investments perform well, the portfolio grows, and the financial adviser also does well. Unlike brokers, who charge transaction-based fees, incentives are aligned for fee-based financial advisers and their clients.…
Think About Cash Flow
Establishing sound personal finance practices while you are young is essential. For those who are new to personal financial management, you need to think of the long run. Discipline and having the right mindset will help you stay out of debt and achieve your financial goals. Cash flow depends not only on your income but also on changes in your savings and debts. If, at the end of the year, you have not saved, and your credit card balance has grown, there is only one explanation – you consumed more than you earned. If, at the end of the year, you were able to save money or your debts have declined, you consumed less than you earned. In terms of your take-home pay, you either spend it, consume it, or save it. The difference between income and spending or consumption is your net savings. Your net savings depends not only on…