Be Wealthy & Smart

Before we get started, I wanted to let you know about another awesome podcast called Profit Boss Radio. Profit Boss Radio is hosted by MBA and Certified Planner, Hilary Hendershott, who highlights inspiring women who have created success in their financial and professional life. Each week you can tune in and hear how women have paved the road to sustained success with both beliefs and actions. Check out www.profitbossradio.com. Its listener question Friday! Linda, My husband is the major bread winner and plans to retire in 2 years. He wants to buy a new TV and sectional. Im advising against it, but he insists we buy them. What can I say to show him why its important not to be making purchases like this right now? Although you are close to retirement and some of our listeners are too and some are younger, theres a good point to be made here. Youre probably looking at a $3,000 to $6,000 purchase. Is it really going to improve your life? Spending wisely is one of the traits that will make you wealthy. Spending foolishly is one of the traits that will make you poor. I have a friend who keeps buying new furniture, redecorating, remodeling and while some remodeling will improve the value of a home, once its updated, re-updating it doesnt help! Changing from vinyl to granite is an improvement, but changing the granite countertops to different granite makes no improvement and just wastes money! 5 things you can do to spend money wiser: 1. Sit your husband down and talk about retirement. Bring him into the reality of what will happen in 2 short years. There will be no more income from his job and you will be relying on savings for the rest of your life! Do you have the amount you will need already saved or do you need to save more? 2. There are some things that will add quality of life to your standard of living, such as moving to a state that has better weather. Some purchases are like rearranging deck chairs on the Titanic, and this is one of them! Having a new TV or sectional will not add happiness or a better quality of life. The thrill might last a week and after that youll just have bills to pay. 3. If youre spending $3,000 to $6,000 on the TV and sectional, think about how much that will grow to in 20 years. Using the investment calculator, at 8% it could become almost $14,000 to almost $28,000! Thats the opportunity cost of what youre buying. 4. When youre a few years from retirement, you want to avoid making large purchases on household items, cars, RVs, anything that depreciates. You want to be focusing all your efforts to getting your retirement savings as large as possible! Theres a hard deadline to retirement and its coming soon! 5. Create a plan. Where do you plan to live when you retire? Are you going to be downsizing and moving south? Are you going to stay where you are? Is your home paid off? Housing and medical expenses are your 2 major costs when close to retirement age (besides elective travel), so you want to be sure you have adequate coverage for both. If you home is not paid off by age 65, that is a worthwhile goal to focus on instead of furnishings! Also, create a plan by estimating what your retirement income will be. Take your retirement funds and multiply by 4%. That is the amount of income you can have without outliving your money. Add your Social Security (and pension) benefits onto that and then you will know how much income you will have. Most people are not real happy with that number! That may wake your husband up to the reality that he needs to be saving, not spending until he retires! I'd like to share recent listener reviews with you. They always blow me away and I'm so grateful when someone leaves a review. Please subscribe and leave me a review on iTunes or Stitcher Radio. Move your net worth in the right direction by getting 11 Quick Financial Tips to Boost Your Wealth at www.lindapjones.com.

Learn which ETF's have performed the best so far in 2017. Photos of this page will be posted on my website at http://lindapjones.com, podcast 239. Please subscribe and leave me a review on iTunes or Stitcher Radio. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn what's happening in the economy with jobs and interest rates. Looks like the jobs number came in strong enough for the FED to justify a .25% rate hike next week. Interestingly, GDP growth is down from 1.9% in Q4 to an estimated 1.2% rate this quarter. That is not a good sign. You don't want to be raising rates when GDP is slowing dramatically because higher rates slow down the economy. See the article posted on my website at http://lindapjones.com, podcast 238. Please subscribe and leave me a review on iTunes or Stitcher Radio. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn what interest rates rising means to the economy and to you personally, why rate "normalization" still means rising interest rates, and what you can expect from the FED going forward. Link to the MarketWatch article is in the show notes on my website at www.lindapjones.com. Please subscribe and leave me a review on iTunes or Stitcher Radio. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn why profits matter. Snapchat, the social media turned camera company went public last week. It was the biggest IPO Wall Street has seen since 2009. With little revenue (and much of it mysteriously appearing right before the IPO, like $1 billion from Google), it is nowhere near worth a $24 billion valuation! Years ago Facebook tried to buy it for $3 billion which was very generous. SNAP's $30B market cap, 74X sales and $15million per employee. Could be the sign of the peak of the stock market bubble here. SNAP lost $514 million last year and says "it may never be profitable" according to Business Insider. You have to detach yourself from looking at a stock price and look at this as a business you're investing your hard earned money into. There are many established, profitable businesses with market valuations less than SNAP. I'll post a chart on my website in the show notes. According to IBD, "Snap is set to be the first IPO of a high-profile unicorn since the term, which describes privately held companies with a market valuation of $1 billion or more, emerged. More than 200 firms currently fit that definition with a total valuation near $760 billion, according to TechCrunch." I'm having major deja-vu from 1999. Valuation matters. Even if the price rises, this is all hype and not much substance, so I would steer clear of this unicorn. I think it's aptly named, since unicorns are just a made up illusion. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn how to know when to sell a stock or investment. It's listener question Friday! I had a question from a listener about their investment portfolio: Linda, It is my very first stock "try's" . A very dear friend of mine started this portfolio for me and she has tried to teach me a little about stocks along the way. I want to learn more. I just am looking for a little direction. I have about $100,000 to invest. This is outside the my emergency savings of about $75,000. _______ She sent me a list of her stocks and I could see a great many of them were not quality names nor were they profitable. It concerns me to hear that a friend is making your investing decisions. You want to be in control of your investments and know what you own and why. Why do you want to own certain companies? Are you familiar with the company or do you think the sector they are in is going to be fast growing and profitable? Remember you are buying businesses. I couldn't tell the investment strategy from what I saw, so I'm a bit perplexed how your friend was selecting your stocks. Having said that, many of your stocks had losses. If you have more than an 8% loss, perhaps consider selling it. I'm not saying that at the bottom of the market after a steep decline, in which I might attribute some of the decline to the market But this is in a bull market, so I would consider selling and reallocating the money. You want to sell your losers and keep your winners. Give the winners time to run and continue to go up. Stocks that have been rising tend to keep rising, so keep those. I would get yourself up to speed on investing (good job joining the VIP Experience) so you can learn about investing. We have all levels of investors in the VIP Experience and I'll be keeping you up to speed with important articles and market commentary as well as ETF selection. I have lots of podcasts about investing, so I suggest you check them out. They are evergreen and most don't get dated. I try to keep them classic so you can use them as your investing library along with the VIP Experience. When creating an investment portfolio from scratch, I always recommend that investors follow an asset allocation model meaning they have some large caps, mid caps, small caps and international. You can add real estate and precious metals to that and have a well-diversified portfolio. If you want to add bonds, I would use short-term bonds since we are now in a rising interest rate cycle. I prefer to use ETFs because they are low cost and diversified, so you're buying a basket of stocks and not individual stocks. That's a better plan for a beginner. I'd love it you'd leave me a review on iTunes or Stitcher Radio. Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Devin Carroll, a seasoned financial advisor specializing in Social Security and retirement planning, dives deep into the complex world of Social Security benefits. He discusses the critical decision of when to take benefits, weighing the pros and cons of early versus late retirement. Listeners gain insights into the impact of these choices on income, trends in retirement planning, and the future sustainability of Social Security. With real-life examples, he emphasizes the importance of strategic planning to secure financial stability in retirement.

Learn where most millionaires live and don't live and 2 reasons why it may change in the future. This article was on CNBC. It listed where millionaires live and don't live. It was thought provoking for a few reasons. First let me read you the list of 5 cities most millionaires live in. 1. Maryland – 7.55 percent 2. Connecticut – 7.4 percent 3. New Jersey – 7.39 percent 4. Hawaii – 7.35 percent 5. Alaska – 7.15 percent This is not surprising for a couple reasons. I learned a long time ago that people can make a lot of money by being where large amounts of money flow. Since Maryland and WA DC are where large amounts of government money flow, it makes sense these are in the top 10 per capita. (I'm not suggesting anything illegal is occurring). It reminds me of the Tom Wolfe novel Bonfire of the Vanities when Sherman, the protagonist and "Master of the Universe", his wife describes to their daughter, Campbell, what her bond trader husband does: "Just imagine that a bond is a slice of cake, and you didn't bake the cake, but every time you had somebody a slice of the cake a tiny little bit comes off, like a little crumb, and you can keep that. […] If you pass around enough slices of cake, then pretty soon you have enough crumbs to make a gigantic cake." Chapter 10, page 229 That can apply to many types of businesses, but if a lot of money is flowing, someone's going to be taking crumbs from it, so it's no surprise to me that #1 is Maryland, near the government and #2 is Connecticut, home of many of the largest hedge fund traders and #3 is New Jersey where a lot of Wall Street firms work. WA D.C. is #9. #4 is Hawaii - you have to think a little harder, but their real estate market is very high from selling to Americans and Japanese, so I would imagine real estate has made a huge contribution to that market. Having a limited population due to small land mass also helps the per capita number. #5 being Alaska is a bit trickier. Of course Alaska is known for oil and military among other things but since this is per capita and Alaska doesn't have a huge population, it skews it a bit. For total numbers, CA, TX & NY win hands down. I don't think anyone is surprised by that. The bottom five are: 47. Alabama – 4.46 percent 48. Kentucky – 4.32 percent 49. West Virginia – 4.22 percent 50. Arkansas – 4.08 percent 51. Mississippi – 3.77 percent I'll post a link to the article on my website at lindapjones.com. Not really a surprise here either. Real estate, high tech, etc. are not these states' strong suits. But here are the game changers… 1. People still don't realize you can work from anywhere and make a very good living with your computer. They don't realize there's a quiet entrepreneurial revolution. Money is being made online from anywhere with a computer. Get your domain name, set up hosting and learn how to start a blog. Everyone should have a website. Grab your name as a domain name. Go here for directions how to get started: http://www.lindapjones.com/how-to-start-a-blog/ 2. Recently I saw a flying car. I will post a link to it on my website. It drove and flew! What are the ramifications of being able to fly door-to-door to where you want to go?! If this technology becomes commercially viable, property that is out farther will start to sell because the commute will be shorter. You also won't have to live near your job if you're an online entrepreneur. Entrepreneurship is the future. You could live in the San Juan Islands and fly into Seattle. How many years are we away from this? Who knows but it's coming and so are more creative ways to make money. You won't need to live near overpriced real estate for much longer. Please leave me a review on iTunes or Stitcher Radio. I really appreciate it! Move your net worth in the right direction by getting "11 Quick Financial Tips to Boost Your Wealth" at www.lindapjones.com.

Learn how to prioritize paying bills, debt and expenses. Listener question today. Dana asks: Linda, there are several things we want to do this year and are wondering about the best use of our funds to do so. 1. Consolidate some miscellaneous credit debt or pay it off in full ($8k range) 2. Home updates/renovations - small scale projects like painting, lighting, window treatments ($5k total range) 3. Upcoming medical expenses for birth of child ($3000 based on max out of pocket per policy) 4. Upcoming 1st installment property tax bill ($4500) We have the following sources to draw from to do all of the above: 1. Cash - enough to pay all of the above and still have 12+ months worth of total monthly expenses in cash savings 2. Credit - several rewards/points cards, average interest rate 11-15% 3. Home equity - access to $32k from our existing Home Equity line of credit at 4.25% interest/only 4. Sell some securities from a brokerage account - $58k in non-retirement investment accounts that we sell some shares 5. Federal Tax refund - expecting $8k-$9k refund per CPA Are there advantages/disadvantages to doing the above via one form of payment or another? My personal comfort level is to keep plenty of cash accessible. I have allocated several different savings accounts specifically for taxes, home improvements, travel, etc and can pull from those. Income will vary so I am not really counting on using our income for these items, as it will just be used for our regular recurring monthly expenses. Thanks, Dana Before I answer that, let's prioritize the payments and then look at the best way to pay them. I want to look at the non-elective expenses - ie. those things you can't put off. #1. Property taxes of $4,500. This is a MUST do, no wiggle room here! The consequences of NOT paying your taxes are too high, so this has to be priority #1. #2. You also can't put off the birth of a child. You will have medical expenses. Must allocate the $3,000 maximum costs. #3. Normally, I would look at the credit card debt first but because you had 2 non-negotiable goals above this, it became priority #3. Look to normally eliminate credit card debt as your #1 goal because it is so expensive. Dana tells us it's 11 - 15% interest. When you pay it, it's like earning that rate of return. Where else can you earn 11 - 15%? Pay off the credit cards. #4. Remodeling. This is the one with the most wiggle room that you can put off, do part of it, or do all of it. Minimize costs as much as possible.

Learn the truth about money and wealth building. I'm going to push back on experts who write about how to build wealth! The articles usually go something like this: Budget yourself silly. Don't spend any money. Don't live beyond your means. Pay off all debt. Contribute to your 401k. Have a great life! Lol! Some of these have merit, but some don't. I'll go through each point in a minute. I'm going to give you a step-by-step plan. There are two different financial scenarios - one scenario for people that have massive credit card debt and one for those who don't. Credit card debt and student loans are a real problem that need to be taken care of first. High interest rates compound and grow quickly so the debt will grow fast unless you vigorously attack it. Make them Priority #1! Student loans may be at low interest rate, but it is not excusable in court even in bankruptcy. It's a permanent weight around your neck that has to go! Let's revisit the points I mentioned earlier. 1. Budget yourself silly. 2. Don't spend any money. Budgets can be hazardous to your wealth! Like diets: feel restrictive, want to go off them, can give you a bad relationship to money. Don't live beyond your means - Obviously! Don't get yourself into consumer debt except a mortgage. Pay off all debt - wrong! A mortgage is ok, tax deductible. You need to establish credit. Pay off debt that's not mortgage debt or business debt that you are successfully using to grow your business. Contribute to your 401k - yes, but it's not enough if that's all you do to save and invest! Have a great life! Lol! How can you spend nothing, try to pay off a huge mortgage, pay for kids to go to college and have any money left to enjoy life? The second financial scenario is for people who earn more than they spend. For them I have advice that I call the 6 Steps to Wealth. 1. Create a wealthy mindset Work on a positive mind, thoughts, goals. Repetition. 2. Save a nestegg Save money to invest, need capital to start. 3. Find a mentor Follow people who have successfully made millions, not starving journalist. 4. Invest in a money engine Must invest to create wealth! Can be a business, stocks, real estate, etc. No one way is right, but be smart about valuations you are paying! Money moves in cycles and peaks in bubbles. 5. Compound at a high rate Let your money compound. Try to improve your rate of return. Bank vs. stocks 6. Protect your wealth Don't lose the wealth you have created. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.