Jul 182014
 

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How often should you review your 401K?

You should evaluate and review your 401k every 90 days because as the markets change, so will your returns in your 401k. It’s amazing to me how many people believe they can retire just because they have a 401k yet they never bother to look at it. That’s just like someone saying, “Well, I must have money in the bank because I have a checkbook.” It just doesn’t work that way.

Avoid these mistakes with your 401k

Just because you have a 401k doesn’t mean you’re on track to retire and achieve your dreams and goals. You might not be putting in enough money on a regular basis to help you reach your goals. Also, the funds allocated in your 401k might be underperforming.

Another mistake many people make is setting up their 401k just like another person who works with them. You should never do this because they could have different retirement and lifestyle goals than you. Also, they may be able to handle more volatility in their portfolio than you can.

The best way to set up your 401k

The best way to make sure your 401k is set up to work towards your goals and the lifestyle you want to have in retirement is to create a financial blueprint. By doing this, you are able to project what kind of rate of return your 401k needs in order for you to reach your goals.

How to consistently track and review your 401k

A financial blueprint will also help you track your 401k so you know the returns it is generating for you. Then you will know if you are really on track to achieve your retirement goals.

Once you set up these basic fundamentals, you will need to review your 401k every 90 days so you can make adjustments according to the changes in the markets.

The 401k that performs the best

The 401k that performs the best is the one where the owner was very active in it and updated it on a regular basis. I have encountered many situations where two different people set up their 401k’s exactly the same but the one that out performed the other did so because that person had a financial blueprint, stayed on top of it, tracked it, and made adjustments with the market’s fluctuations.

How to Create a financial blueprint

I would love to help you create a custom financial blueprint that will help you maximize and review your 401k. You can work with me and our entire team of specialists to build Your Financial House©. You can find out more about that process here. Then you can live confidently knowing you have a plan that is guiding you towards your specific dreams and goals.

Please send me an email here or give me a call at (205) 989-3498. I would enjoy talking with you.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

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Greg Powell is President and CEO of fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Jul 022014
 

Inflation vs Deflation

Investors need to have a good understanding of inflation vs deflation because each can impact investments in different ways. Here are two simple definitions to help you better understand inflation vs deflation.

Inflation is prices going up

There are two causes of inflation:

  1. When there is little supply but a lot of demand
  2. Where costs go up for a business so they charge more for the product or service

(More in the video)

Deflation is prices going down but no one is purchasing

When companies keep lowering their prices but no one is buy their goods, they begin to lay people off. That is called a deflationary spiral.

If you have any questions regarding inflation vs. deflation and how it might affect you, please call me or send me a comment below. Also, if are any investing terms that you would like to know more about, please send them to me in the comment section below.

Franklin Bradford, CMT
Senior Vice President
Wealth Consultant

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Franklin Bradford is a Chartered Market Technician and part of the Portfolio Strategies Team at fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
inflation vs deflation definitions

Jun 182014
 

Four biggest mistakes in planning for retirement

I’m going to quickly give you four of the biggest mistakes in planning for retirement that I see people make.

The no. 1 mistake: Not having a plan

This is the most popular mistake that you will see across the internet and in “mistakes in planning for retirement” articles. There are many reasons people don’t plan for retirement. The reasons vary from procrastination or feeling it’s too early to start planning for their retirement. On the other hand, people can also feel like it’s too late to start a plan.

The no. 2 mistake: Living outside your means

Your retirement plan should tell you exactly what level of lifestyle you can live at and still achieve your retirement goals. If you step outside of than plan, you could seriously train wreck you retirement.

The no. 3 mistake: Not planning for an unexpected dependent

Is there someone in your life that could rely as a dependent later in life? It would be a mistake to not consider a child with a drug problem or a dependent parent who made need your support later on in life.

The no. 4 mistake: Not keeping your financial plan up to date

Your life will go through many changes over time and your retirement plan needs to evolve with it. You may make less or more money at times, change careers, have children, buy a house, etc. and this all affects your retirement plan.

Please comment below with your question or concern. If you would like to talk with me personally about any possible mistakes in planning for retirement that you may have, email me here or call me at (205) 989-3498.

Quint Cook
Executive Vice President
Wealth Consultant

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Quint Cook is the Executive Vice President and Wealth Consultant at fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
mistakes in planning for retirement

Securities And Advisory Services Offered Through LPL Financial a Registered Investment Advisor. Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

 Posted by at 12:32 pm
Jun 132014
 

Reverse mortgage

We are seeing more and more commercials and advertisements about reverse mortgage on TV and in print. We’ll come right out and say it that we are not big fans of reverse mortgages.

Why do people take out a reverse mortgage?

Often the reason people do a reverse mortgage is because they didn’t have a good financial plan, which we call a financial blueprint, and they are in need of more money to live off of. A lot of these advertisements are playing on the emotion of the elderly who are in need of more money.

Another reason that people take out a reverse mortgage is that people may have had a good financial plan but they did not follow it, and they had a horrible spending habit that. Ignoring their plan, they continued to spend their money and now they need a reverse mortgage to give them more money to support their spending habit.

The history of the reverse mortgage

Legally, reverse mortgages have been around since the 1950s. Reverse mortgages really took off in 2009. After the financial crisis in 2008, many retirees were not able to keep living the same lifestyle they had been living. Because they had a good amount of equity in their homes, they would take out a reverse mortgage so they could support the lifestyle they were use to living. Often they were taking lump sums from reverse mortgage and using the long term value on short term items. If they used it to pay off credit card debt, that was just robbing one part of your assets to pay for another (more in the video).

The allure and danger of a reverse mortgage

What makes a reverse mortgage so enticing is that in many advertisements they say you don’t have to pay it back until you die or move. But the expense component is through the roof. The interest rate is 2.5% higher than the national average on a mortgage and that interest rate, that you are not paying, it’s compounding. The foreclosure rate is also double that of the average mortgage foreclosure (more in the video).

Many times the older spouse living in the house can get a higher payout so the reverse mortgage is in their name. If that person dies, the surviving spouse is left with an overwhelming debt and they can possibly lose their home. This could be an additional danger as their children were counting on selling the house and using that money for assist living and care for their parents (more in the video).
reverse mortgage video thumb

Why are we seeing so many advertisements about reverse mortgages?

Sadly, most of the people taking out a reverse mortgage have the least ability to make informed decisions. That’s why we are seeing so many commercials on TV with “All American” celebrities as spoke persons for the reverse mortgage companies.

Please share this with any of your friends and family who are thinking about taking out a reverse mortgage because it could threaten their financial situation as well as their heirs.

We would be happy talk with you or anyone you refer to us about the pitfalls of a reverse mortgage. Comment below, call us at (205) 989-3498 or email us here.

Greg Powell, CIMA
President/CEO
Wealth Consultant

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant

Jun 062014
 

Listen to our Investor’s Insights podcast

Click here to listen to or learn more about our podcast.

Question about investing with HELOC

Today we answer a viewers’ question.

Joe writes, “Have you seen any retirees with paid for homes consider opening a home equity line of credit (HELOC), draw down say 50% of the line and invest same in the market.

The HELOC rates are at historic lows and the interest is deductible.  Could be a 5% plus pre-tax profit/ cash flow spread between the dividend income and interest expense.

Not sure that I want the risk and debt but curious if many people do same.”

With a home equity line of credit (HELOC), as long as you are making your payments, you are fine. The moment you miss a payment, however, all the legal agreement was on the side of the bank and not on the borrower’s side.

HELOC risks

In general we don’t recommend HELOCs for anyone because of four main risks.

  1. Interest rates risk
  2. Market risk
  3. Credit risk
  4. Regulatory risk

Banks and HELOCs

Banks like HELOCs as they have the lowest default rates because people don’t want to leave their homes. From a credit risk, however, they can pretty much put whatever they want into a HELOC agreement. 99% banks will reprice your interest rates once a year or renegotiate it. But if your payments aren’t consistent, they can accelerate this increased interest rates.

How HELOCs can change

In 2008 and the real estate market dropped, many people would go into the bank thinking it would be a rate adjustment only to find the bank wanted extra collateral. Then their HELOC becomes a totally different type of loan.

These four risks can work against can work against you singularly or in combination. Now we are not saying HELOCs are bad. What we are saying is that you shouldn’t borrow against your house to go speculating in the markets. HELOCs are structured for an intended purpose and if you deviate from that purpose, there is more danger than pick up.

More questions

Thank you, Joe, for your great question. We ask all our followers to send us your questions and we will do our best to answer them as soon as possible in an upcoming blog and podcast.
Retirees Investing with HELOC
Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley here

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

May 302014
 

Markets are still reaching all time highs

Six months ago I posted a video concerning the markets hitting all time highs and how that relates to your portfolio. Here we are now, months later, and we are still seeing stock market all time highs. While this is good for the markets, this can be a stumbling block for some investors in relation to how they view their investments.

Importance for investors

I am reposting this vlog with a new introduction because I believe it is important for investors to have a proper perspective on the markets so they can make good investment decisions. The question you need to ask is, “How should you evaluate your portfolio in comparison to the record highs of the various stock market indices like the S&P 500 and the DOW?”

If investors gain a proper perspective on these indices, they can learn much about their investments and how to work towards achieving their financial goals.
Stock market hit all time high
Greg Powell, CIMA
President/CEO
Wealth Consultant

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Greg Powell is President and CEO of fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.