Wealth in Words

For those unfamiliar, the late Jim Rohn was one of leading minds in the business coaching and personal development field. His work covers topics such as business strategy, time management, goal attainment, and personal finance. Rohn’s book “7 Strategies for Wealth and Happiness” contains a plethora of useful, applicable tactics that can dramatically improve your lifestyle through creating paradigm shifts in mindset and actions. He spends a portion of the book discussing an outline for managing a budget.  Specifically, Rohn calls it his 70/30 Rule. The premise is simple to follow and easy to implement. First, you start with your after-tax net earnings each month and multiply that value by 70%. Expenses for the month should not exceed this number (i.e. 70% of net wages). Second, subtract this expense target from after-tax monthly income and you will have 30% remaining. Lastly, this 30% is to be divided evenly into thirds. Rohn advises that the first third (10% of after-tax ...

In a recent interview entrepreneur Daymond John, founder of FUBU and member of ABC’s Shark Tank, offered some noteworthy money advice to the audience.  John has amassed a fortune estimated to be around $300 million primarily through his FUBU business, as well as smaller ventures, so it is always worthwhile to learn from his perspective. When asked what advice he would give a younger version of himself he said, “Make sure [I] have financial intelligence.” Sound fiscal principles that constitute being financially intelligent are ubiquitous with success. Importantly, this skill set can be learned. Attaining financial aptitude can be accomplished through studying the successful investors and entrepreneurs throughout history (i.e. create a personal financial plan that is a mimicry of a successful person’s process), reading books or blogs that will increase your financial IQ, as well as having discussions with individuals in your social circle who exhibit sound financial decision m...

According to the National Bureau of Economic Research (NBER), an economic recession is a period when a significant decline in economic activity spreads across the economy and can last from a few months to more than a year. Generally speaking, recessions are recurring economic phenomena which are characterized by a slow-down in economic activity. Recessions occur routinely, but unpredictably, due to the cyclical nature of the world economy. The duration of a recession can only be identified in hindsight, but the experience of living through one is easily identifiable. The most recent recession in 2008-2009 was also the most severe in many decades. Not surprisingly, the impact from this contraction is still being felt throughout the global economy. Common events that accompany a recession include layoffs, a declining stock market, slowing economic activity, falling consumer confidence, and an interest rate lowering cycle used by the Federal Reserve to artificially stimulate economi...

Realizing your investment goals takes time. Warren Buffett famously remarked, “Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.” While this comment is somewhat tongue-in-cheek, the premise of staying the course for the long-term when investing should not be overlooked. Investors should write out and review goals at least annually. More visual people can use images or physical objects to help them focus on reaching their investment goals. Ultimately, you as an investor need to have a method to keep yourself focused on the long-term objective. Given the ever-present volatility in financial markets, which can create painful unrealized and realized losses in our portfolios, it is easy for investors to become distracted by transitory price shocks and shift to myopic thinking. For example, w anting to withdrawal all your money during a...

Company 401K plans are popular, accessible retirement savings vehicles for most individual employees. A 401K plan allows for workers to accumulate retirement savings by contributing a portion of each paycheck before taxes are taken out, thereby letting one’s savings grow at a higher, tax-deferred rate. Ultimately, taxes are paid once money is withdrawn from the account. In addition to the tax-deferred benefits, employees usually have an employer match program for the plan. For example, the employer will match up to 50% of the first 6% that the employee contributes to the account. Consider the funds from this employer match a “bonus” that is received each pay period and contributed immediately to savings. Within each 401K account every company will have its own list of pre-selected funds through which an employee can create an asset allocation. If no action is taken by the employee, he or she will most likely be automatically enrolled and begin investing contributions into a Targe...