The topic for this blog is optimism. National Hockey League Hall of Famer Wayne Gretzky used to say “I skate to where the puck is going to be, not where it has been”. These are wise words today in our uncertain times. What I mean is, it’s impossible to know what our future holds, but we need to look ahead to when the coronavirus is under control with a vaccine and a widely accessible cure is available.
I choose to look at the world through a positive lens. As a glass half full guy. We’ve learned a lot about the virus and I believe we’ve seen the worst of it. Don’t get me wrong, no one knows our future, but we are a lot more knowledgeable now than we were back in March. Many schools are opening, businesses are ramping up and we’re learning that being outside with physical distancing is safer than we thought back in March.
So my take is for those of us who are generally healthy, we need to practice common sense safety habits as stated by the CDC guidelines and get on with our lives.
In keeping with my story, I’ll share this quote from Washington Nationals Manager Davey Martinez, after winning the 2019 World Series.
“Bumpy roads can lead to a beautiful place. This is a beautiful place”
To help you get to your beautiful place, check out this practical guide from Dave Ramsey of the 20 ways to save money. How to Save Money – 20 Simple Tips by Dave Ramsey:
https://www.daveramsey.com/blog/the-secret-to-saving-money?utm_source=source=cnl&utm_medium=email&utm_content=8.30_cnl_blog_everydollar_gsa&utm_term=everydollar_bu&utm_campaign=cnl_newsletter&utm_id=cnl_newsletter&cd17=B2C_DR_CNL_DRCOM-7652_GSA_AdB_200830&email_id=3178148
If you’re looking for help or a second opinion in your personal financial journey or need some specific advice with a financial challenge you’re dealing with, contact me at: www.fettermanfinancialsolutions.com and schedule a free consultation and coaching session. Best wishes to you and your family and stay safe!
Respectfully,
Mike Fetterman
Looking at the brighter side…
So here we are, many weeks into the terrible COVID 19 coronavirus pandemic. Living in Virginia, we’re under stay-at-home orders and we’ll be heading into phase one of getting our economy open, hopefully soon. Needless to say, it’s a trying time for all of us, and especially devastating for those who have been directly impacted by the virus. There’s no denying that this truly is an invisible enemy to all of us.
What I’d like to do in this blog post is try to share some advice and hope about how to cope during these trying and uncertain times. As Americans, we’re typically optimists. Some more than others obviously, but when we look at the glass half full, it helps make life’s ups-and-downs easier to swallow…pun intended. This leads me to what I’m writing about today…..Positive vs. Negative
There are things in life that we can control and things we just can’t control. As a financial coach, I know we can control many aspects of our personal finances. I’ve done it for my family for many years and you can too. It’s paying attention to the little things that help us stay on track…I call it “minding the store”. You may have heard that phrase before.
Cal Thomas, in a recent column in the Washington Times noted: “A cheerful heart is good medicine, but a broken spirit saps a person’s strength”.
All the negativity that surrounds us can cause anxiety and despair in even the most stable emotionally among us. This can lead to panic and unwise decision making when it comes to our finances and other important areas of our lives.
To stay positive, I try to limit my intake of the news to my morning newspaper and some evening news highlights to be informed on what I really need to know to stay safe and be aware of what’s going on with the pandemic and what’s expected of me and my family. When I watch too much or I worry too much, it truly brings me down and that’s a negative that I just don’t need or want. It also causes stress and anxiety which clearly isn’t healthy. Plus, most of what we see on the news is outside of our control. I go on daily walks with my family around our neighborhood, spend time working on my yard, reading books about my faith, finance and sports (since I can’t watch any live sports now) staying in touch with family and friends via Zoom, texting or the old fashioned telephone, relaxing playing family games and hanging out doing nothing just to chill out.
So where am I going with this? Being grateful. It’s certainly not easy if you are not working and don’t know when your next paycheck will arrive, but try taking a few moments of your day to thank God for all the blessings we have, thank your family for being there with you for those who are stuck with them , our government leaders at all levels, our health care teams, our scientists racing to develop a vaccine, our businesses making test kits and ventilators, our grocery store workers and our other store workers, our police, our fire fighters and our military (I’m a veteran, so I’ll never forget them) who are all on the front lines during this crisis trying their best to protect us.
Look for the silver lining, however faint, in all of the storm clouds that surround us. For the newly unemployed or furloughed among us, don’t forget to apply for unemployment benefits by going to your state’s website. For small business owners, the Paycheck Protection Plan and other government loans and grants are available by checking out the Small Business Administration (SBA) website at www.sba.gov .
This is the time to dip into your emergency fund if you need to keep up with the bills and needs of your family to keep the four walls (food, home, utilities and transportation) intact. Try not to use your retirement accounts if at all possible. Although, the rules have recently changed with all of the government aid being doled out to make it easier to access them, you’re stealing from your future self by doing that. I recommend only using these accounts as a last resort to keep the lights on and food on the table. I would hoard cash and limit debt as much as possible.
Laughter is a powerful coping mechanism during this virus crisis. Reach out to some old friends and family you haven’t talked to in awhile. There’s a good chance they’ll be home…ha ha! My wife and I recently reached out to dear friends that moved to Texas a couple of years ago and it was so much fun to connect and laugh about the times and memories we shared together while they were here. If you’re technically inclined, you could Zoom or Facetime or use some other similar app with friends and family to see how long their hair is growing (for those who still have hair, in my case not so much).
Taking this challenge and making it an opportunity to help others can soothe your well-being and give you some feeling of accomplishment and happiness.There are many good news stories out there that are inspiring. You could be a part of that story with your new found time and the talents you can share with others. I took on a mini challenge by being a videographer for my wife’s video that I’m sharing below that has already helped create joy and fun for some of our family and friends. I’ve never done that before and it was a fun project for us.
If you’re looking for something fun to do that can bring you joy, my wife, who is a teaching artist, has posted a beautiful way to pass the time while painting using acrylics. It’s a “how to” video that I helped create that takes you step-by-step to include the supplies and paints that you can use to complete a painting, even if you’ve never tried painting before. I can’t draw a stick figure and she has guided me in a couple of paintings in the past that I’m actually proud of and I had fun painting them.
Click on the link below to learn how you can paint and have fun by going to Lesson One: “Painting Virginia Bluebells”. It’s only 23 minutes to watch, but you can pause it to go step-by-step when you’re painting. It’s quite entertaining to watch even if you decide you don’t want to paint. She plans to do more of these, so if this interests you, please check out her site periodically for more videos.
www.art-together.com/announcing-free-online-spring-classes/
I’ll close for now wishing and praying for your safety, health and financial fitness during these uncertain times. Let’s accentuate the positive, minimize the negative. We’ll feel better and it might have a side effect of benefiting our immune systems.
Please note that these ideas I share on my blog posts are meant to be informative and may not pertain to your specific situation.
If you’re interested in another opinion about your personal finances and getting a free financial coaching session to help meet your goals, just go to my website to get more info about me, my services and schedule an appointment with me at: www.fettermanfinancialsolutions.com
Dave Ramsey sent a good article that I’d like to share with you. It’s common sense advice, that in these times, sometimes we have trouble adhering to. This could be a possible buying opportunity for those of us investors who have a long term view. If you have any cash that you’ve waited to put in the stock market for your 401K, IRA or any other long term accounts you have, dollar-cost-averaging into the markets could be another option. I recommend that you have an adequate emergency fund (3-6 months of cash and/or other liquid assets).
If you would like to discuss this or any other personal finance topics, or get a recommendation that could help you turn things around or to help you stay on course, just contact me and I’ll work to be your calming financial coach in your corner. Have a great day and don’t forget to wash your hands….to read the article, click below.
The Coronavirus and Your Money
Respectfully,
Mike Fetterman
Oh my, it’s tax season again. April 15th will be here before we know it. For most of us, we’re hoping that we don’t have to write a check to the IRS. Hopefully, we’ll be able to get a decent refund. For the procrastinators among us, you still have time to get your act together but the clock is ticking….
70% of taxpayers are eligible to file for free according to the National Taxpayer Advocate’s Office. The IRS Free File program at IRS.gov/freefile partnering with tax preparation software businesses allows taxpayers whose adjusted gross income (AGI) is $69,000 or less to use it. Only 2% of eligible taxpayers use the program. Some specifics: It’s not widely publicized and some say it’s a bit confusing to use because the partner sites don’t readily point to the free portion. It’s at least worth checking out to spend less on tax prep. It’s legal, will get you accurate calculations and save you money.
Once you round up your W2s, 1099s and other tax forms, you could either use the IRS free file option if eligible, a tax preparer or any of the many do-it-yourself tax software programs out there. Unfortunately, it seems that the cost for tax prep keeps going up like most other things. You’ll have to make the decision on how to proceed.
A red flag to be on the lookout for is tax scams. The scammers are out in force and they sadly try to capitalize on the vulnerable and low informed. We need to remain vigilant to spam and scam phone calls that are NOT from the IRS. The IRS will never call to request immediate payment of your taxes owed without first mailing you a bill. The IRS will not request payment with a specific method (ie. debit card, credit card etc.) and it will never ask for the numbers of those cards or social security numbers over the phone. Lastly on this, the IRS will NOT threaten you with any police or law enforcement action. It’s terrible as Americans that we have to endure this awful practice, but we do.
I’m not a tax expert and I’m not an accountant either, so please don’t take this as specific tax advice, but you still have time to make tax deferred contributions to your Individual Retirement Arrangements (accounts) IRAs. If you are a parent trying to help your college student(s) with their increasing education costs, you may be eligible for the American Opportunity Tax Credit (AOTC) worth up to $2500 and/or Lifetime Learning Credit (LLC) worth up to $2000. Eligibility is determined by your modified adjusted gross income (MAGI). For investors, you can offset capital gains with capital losses, called tax loss harvesting. If you’re able to, it’s smart to max out retirement accounts in tax efficient investments.
In my next blog post, I’ll discuss the importance of having an emergency fund and how to set one up among other helpful tips to get or keep you on your financial peace journey.
Are you interested in a second opinion about your finances? Click on the “Schedule a Consultation” and I’ll be happy to help you get or stay on track to achieve your personal finance goals.
Have a great day!
Respectfully,
Mike F.
Quiz time. Is it True or False?
Most millionaires receive most of their money through an inheritance.
Most millionaires come from high income families.
Most millionaires use coupons when shopping.
Extra credit: Do you know the top three occupations that have the most millionaires?
See below for all the answers and other interesting facts based on research from the two books I highlight below.
I recently read two excellent books on this topic. Every Day Millionaires by Chris Hogan and The Next Millionaire Next Door by the father and daughter team of Dr. Thomas Stanley and Dr. Sarah Stanley Fallaw. Both books provide interesting insights into the early life impacts, lifestyles, behaviors and jobs held by the typical millionaire today. The tagline in the Chris Hogan book How Ordinary People Build Extraordinary Wealth and You Can Too highlights key points from Chris Hogan and the Ramsey Solutions research team’s recent study of over 10,000 U.S. millionaires. They asked about how they achieved wealth, the time frame to get there, where they came from, the financial behaviors they applied, the tools they used, and useful tips they pass on and more. The book is a very interesting read and it’s packed with true stories of actual everyday millionaires. It dispels the myths of people who successfully manage their money to accumulate vast sums of wealth. I highly recommend this book.
The Next Millionaire Next Door is an excellent update to the Millionaire Next Door by Thomas Stanley and Willian Danko, released in 1996. There are a lot of comparisons to the millionaires studied twenty years ago and today. A good bit of the discussion centers around the behaviors of “under accumulators of wealth” and “prodigious accumulators of wealth” and what separate the two. They reference a chapter in the first book called “Stop Acting Rich” where people seemingly think they are wealthy because of their McMansion, shiny new cars and other expensive items they have (not own) to “keep up with the Jones”. I highly recommend this book too.
Both books highlight the influences these millionaires had at various stages of their lives and how they manage their personal finances. I would be doing a serious injustice to both books to say that I can summarize them in a blog post.
Here are some interesting myths discussed in these books:
- The wealthy didn’t earn their wealth.
- They take big risks with their money.
- Most of them graduated from prestigious private colleges (actually 9% never graduated from college).
- They are in top management, business owner, pro athlete or a highly compensated entertainer.
Some other key takeaways:
- Millionaires take personal responsibility, practice intentionality, are goal-oriented, hard workers, consistent and disciplined.
- What you think about and what you do with your money is more important than what you make, although a good income is helpful.
- Your wealth building potential comes down to one person – You.
- Only 21% of millionaires received any inheritance and in most cases it was less than $100k.
- Millionaires aren’t afraid to work for their success – they believe winning with money is definitely better than losing, but winning with integrity is key.
- 8 out of 10 millionaires come from families at or below the middle income level.
- The top three occupations of millionaires are engineers, accountants and teachers (surprisingly not doctors, lawyers, top executives, athletes or entertainers).
- Millionaires think there’s enough opportunity to go around – they don’t fall prey to the victim thinkers who try to say otherwise.
- Millionaires state overwhelming that they achieved their wealth through discipline, consistency and focus on their finances over any kind of luck.
- There are no get rich quick schemes, instead it’s about gaining knowledge of saving, investing, balancing risk and reward and not getting distracted with “opportunities” from people who don’t know what they are talking about.
- 93% of millionaires use coupons when shopping.
- Wealthy people don’t rely on debt, in fact they are debt free in almost all cases and that includes personally financing their small businesses.
- Millionaires understand that it takes years and decades of consistent investing and using the power of dividends and compounding interest to build wealth.
- Having adequate emergency funds (3-6 months of expenses) and considering the outcomes of purchases on the budget are key actions.
- Financial decisions are based on the budget and the impact of future plans and goals.
- Start saving and investing early, live on less than you make and use the power of compounding interest.
- Establishing conscientiousness, discipline and self-control with all spending, saving, investing, budgeting and tracking cash flow is key.
- 97% of millionaires build their wealth through retirement plans.
- Not getting too fearful or greedy with the ups and downs of the markets -and as Warren Buffett says, “Be fearful when others are greedy and greedy when others are fearful” (ie. don’t panic and know your risk acceptance and tolerance).
That’s all for now. I’ll discuss some investing strategies, building an emergency fund and provide a tax prep checklist in my next post.
Are you interested in a second opinion about your finances? Click on the “Schedule a Consultation” and I’ll be happy to help you get or stay on track to achieve your goals.