This is my last post of 2024, and my last post as Engage Advising. Retirement calls! My goal over the years on this journey was to share learnings and information through these posts. Turns out, I also learned a lot from all of you over the years.

Here we are at week 4. The final step to financial independence is to take the previous steps and rinse and repeat. Just keep going! The most common refrain I hear from investors is that they wish they had started earlier. Stay vigilant and monitor your success. In week one, you learned that you need to assess your financial situation, week two you learned to set goals and reduce expenses, and in week three the step was how to invest and build wealth. Each of these steps takes time, patience, vigilance and determination.

Want to know a secret? By knowing your financial position, setting a budget and living within your means, your wealth building has already started. Retiring debt, or slashing outgoing cash flow really increases your wealth. This week we’ll cover the tools needed to take your wealth building to the next level. To start investing, start with yourself. By now you’ve made the decision to know yourself financially (step one), and you are getting spending under control, rightsizing your life, and freeing up cash (step two). What to do with that extra cash?

It’s step two of our financial independence journey and this week’s step is lifestyle and goal setting.  Time to tackle rightsizing your life and living within your means and setting some financial goals. Living within your means does not equate to living like a pauper. It’s not about that. It’s about matching your monthly cash flow to your basic needs and to your goals. Think of it as taking a surgical scalpel to your spending rather than a sledgehammer.

This first step, to know yourself, may seem patronizing. After all, most of us know who we are. This step is to get to know yourself from a detailed financial perspective. It can also involve being honest about how much you know about personal finance and financial planning. It’s admitting that you need some help and committing to doing the work to get yourself into a financially healthy and stable position to create financial freedom.

For many, financial planning boils down to their investments and how they are allocated. Of even bigger concern seems to be their “number.”  That magic dollar figure that says to a person, yes, you are safe, you can retire. But in reality, it’s much more than that. And that number? It too could use a little attention.

It’s that time of year where Christmas ads permeate even though we are barely at Halloween. As we prepare for the upcoming holidays and look forward to travel, days off, and spending time with friends and family, there is still time to for a few end-of-year financial planning maneuvers. Let’s take a look at a few things that can be completed.

This month is a great time to take stock of the situation with your 401(k). These days, many new hires are automatically enrolled in their plan, but are unaware of how much they are contributing, and how that money is being invested. If you have not checked your 401(k) in a while, October is a good time to take stock of the situation. You still have a little bit of time left in the current year to make changes.

Many people who work in sales and marketing refer to the final quarter of the year as, OND – October, November, December. OND is a heady rush of holidays, finalizing projects, using up your department budget at work, and spending time with family and friends. I joke that it’s the start of one big holiday, HallowThanksMas; Halloween, Thanksgiving, and Christmas all jammed together. Better start that diet now before all of the dinners and parties. OND is upon us so what should you be doing for OND from a financial planning perspective? Let’s take a look at a brief overview of each month.

October is Breast Cancer Awareness Month. This time of year, many individuals and organizations wear pink to raise awareness about this critical health issue. For those affected by breast cancer, whether directly or indirectly, having a solid support system and practical financial strategies in place can make a significant difference during this challenging time.

Since September is disaster awareness month, let’s talk about how to avoid a disaster in your portfolio. When it comes to building a well-diversified investment portfolio, the common misconception is that simply adding more funds will lead to better diversification. Disaster! More funds do not equal diversification. You have to consider that many funds may replicate top holdings. In fact, using core, low-cost index funds can be a more effective strategy for achieving true diversification.

We are approaching O-N-D, October, November, and December. OND is an expensive quarter for many people because of all the holidays, gatherings, and parties. It can be a lot of fun, or it can leave you with a financial hangover. Here are few tips to help you plan for OND starting now.

Divorce is a significant life transition that can have far-reaching financial and emotional implications. Whether you are pragmatic and ready to sign the papers, or more emotional and spelling it out like Tammy Wynette so the kids won’t understand, that D-I-V-O-R-C-E may be a financial challenge. As you navigate this process, it's crucial to be informed and proactive in addressing key considerations. Here are some essential tips to keep in mind:

September is National Preparedness Month. This is a reminder to have a Grab-N-Go emergency binder! We jokingly say that we have four seasons here in California: flood, fire, earthquake, and riot. These days, we need to consider other disruptions like what we saw during the pandemic and even cyber threats. It’s necessary to have an emergency binder for many reasons. Most notably, a medical emergency. It’s not a pleasant thought, but a disaster or health crisis is an event for which we should all plan ahead.

It's important to regularly review your estate plan to ensure it still aligns with your wishes and current life circumstances. Most experts recommend reviewing your estate plan every 3-to-5 years. Over time, your life situation may change - you may have gotten divorced, married, had children, or acquired new assets. Additionally, laws and regulations surrounding estate planning are subject to periodic updates. Failing to review your plan could mean it no longer reflects your current intentions or complies with the latest requirements. Here are a few recommendations on what to look for during your review.

As investors, we’ve grown accustomed to the steady, higher yields from our cash accounts as compared to prior years. It isn’t uncommon for some high-yield savings accounts and money market funds to be earning 5% or more these days. For cash savers and safety aficionados, these have been halcyon days. But, as the Federal Reserve contemplates lower interest rates, consumers will see the impact on their money market funds and high-yield savings accounts. Federal Reserve rate cuts mean diminished returns on these traditionally safe havens for cash. So, does that mean you should give up your emergency fund? Should you dump your money market fund? Not exactly. In a falling rate environment, it's important to have a plan to adapt.

Most of us know that maintaining a healthy credit score is crucial for securing favorable loan terms, renting an apartment, and even getting hired for certain jobs. Frequently, I am asked how to improve one’s FICO score? While there are a many ways to improve your FICO score, let’s focus on an effective strategy. The effective strategy to improve your FICO score is to make two payments per month on your credit card bills. Yep, two payments. Read on to learn when these payments should be made, and why.

To be honest, August is just hot and any time is a hot time for estate planning. The time to plan is now. You don't have to be old or super wealthy to need an estate plan. It may be possible for you to go DIY if you have a very simple situation, or you can hire an estate planning attorney for a more comprehensive package. The important thing is to do something sooner rather than later. Don’t put off estate planning thinking you have plenty of time.

Given that 2024 is an election year, many folks are concerned about their investments. This is a valid concern and it surfaces every four years. I’ve written about this topic several times over the years because every election cycle I get questions about what happens if so-and-so wins.

Do you remember the passing of the SECURE Act and subsequently, SECURE 2.0 Act (the Acts)? People were up in arms over the loss of the ability to stretch IRAs for beneficiaries over many years, if not decades, to take advantage of tax-deferred growth and build wealth. As a result of the Acts, we got eligible and ineligible beneficiaries, and a new 10-year rule to empty the inherited IRA. That 10-year rule destroyed the stretch IRA technique.