Tag: Financial Goals

The Twelve Days of Financial Wisdom: A Holiday Guide

December 13, 2023
Finances, Financial Lessons, Financial Planning, Guidance

The holiday season is in full swing. Throughout the years our family has grown to include new family members from different cultures and traditions. As we navigate a growing family and offer flexibility around busy holiday schedules, we want to embrace the joy and wonder this time of year without succumbing to the humbug feeling that can easily overtake us if we cling too tightly to old rhythms in this new life-phase. This year I find myself smack dab in the middle of a home remodel with no kitchen and zero furniture downstairs. In fact, I even found myself cooking dinner in our Master Bathroom the other night! It would be easy to focus on the inconveniences of a remodel, so we’ve chosen to stay positive and be thankful for all that we have been blessed with. Like the Grinch, I’m having my heart melt by connecting with people this season. An extra smile at the grocery store, a friendly wave and a thank you to the hard-working delivery people. I can see joy and wonder surrounding me this time of year if I just look around. I recognize this season isn’t the easiest or merry for many. It can be full of tough memories and lost loved ones. There is conflict all over the world reminding us that not everyone is safe and happy this year. Elvis knew what he was talking about when he sang about a blue Christmas. There especially seems to be a healthy tension this year for holding space for both hurt and hope. If you find yourself in a season where jolly and laughter elude you, then it is my sincere hope that my feeble attempt at some holiday humor brings a smile and a laugh. There’s a reason that I’m a Wealth Advisor and I’m not a stand-up comic, so let’s just keep that in mind too! Without further I do, I give you, “The Twelve Days of Financial Wisdom.” (P.S. If you can’t help but think of me singing this, let’s just pretend that I’ve got the voice of Mariah Carey belting out these great lines!)

Day 1: Diversify Your Assets Wisely

🎵 “On the first day of Christmas, my Wealth Advisor said to me: Diversify your assets wisely!” 🎵

Just like a well-balanced fruitcake, a diversified investment portfolio is a key ingredient for financial success. While fruitcakes might not be everyone’s favorite, diversification is almost universally adored by savvy investors. Spread your investments across various asset classes – stocks, bonds, real estate – with a goal of reducing risk and increasing potential returns.

Remember, just as a fruitcake brings together different flavors for a delicious outcome, diversification brings together different assets for a well-rounded and resilient investment strategy.

Day 2: Compound Interest, Oh What a Joy!

🎵 “On the second day of Christmas, my Wealth Advisor said to me: Compound interest, oh what a joy!” 🎵

Imagine compound interest as the holiday gift that keeps on giving. Much like a snowball rolling down a hill, your savings can accumulate and grow over time with the magic of compounding. The earlier you start, the larger the snowball – uh, I mean, your savings – becomes.

So, this holiday season, give yourself the gift of an early start on savings and watch your financial snowball grow into a winter wonderland of wealth.

Day 3: Budgeting Bells Are Ringing

🎵 “On the third day of Christmas, my Wealth Advisor said to me: Budgeting bells are ringing!” 🎵

While the holiday bells may be jingling, it’s essential to keep your budget from jangling out of tune. Create a realistic budget that includes your holiday spending, but don’t let it snowball into a financial avalanche. By tracking your expenses, you’ll avoid the post-holiday blues when the credit card bills start singing a less festive tune.

This season, let your budget be your guiding star, ensuring a harmonious and stress-free celebration.

Day 4: Hark! The Herald of Emergency Fund Angels

🎵 “On the fourth day of Christmas, my Wealth Advisor said to me: Hark! The herald of emergency fund angels!” 🎵

Life is full of surprises, and having a robust emergency fund is like having a team of financial angels ready to help when unexpected expenses arrive. Whether it’s a car repair or a sudden medical bill, your emergency fund can be a guardian angel, ensuring your financial stability in times of need.

This holiday season, let your emergency fund be your silent protector, allowing you to enjoy the festivities without worrying about unforeseen financial hiccups.

Day 5: Five Golden Retirement Rings

🎵 “On the fifth day of Christmas, my Wealth Advisor said to me: Five golden retirement rings!” 🎵

Retirement may seem like a distant future, but like the five golden rings in the classic song, it’s a valuable gift that requires careful planning. Help your retirement plans shine brightly by regularly contributing to your retirement accounts. The magic of compounding (Day 2, remember?) can work wonders over the long term, making your golden years truly golden.

This holiday season, make a resolution to invest in your retirement future and enjoy the sparkle of those golden rings in the years to come.

Day 6: Let Tax-Efficient Reindeer Lead the Sleigh

🎵 “On the sixth day of Christmas, my Wealth Advisor said to me: Let tax-efficient reindeer lead the sleigh!” 🎵

Just as Santa relies on his trusty reindeer to navigate the skies, you can rely on tax-efficient strategies to guide your financial sleigh. Take advantage of tax-deferred accounts, tax-free investments, and strategic tax planning to reduce your tax burden. It’s like leaving milk and cookies for the IRS – they get less, and you keep more.

This holiday season, let your financial sleigh be led by tax-efficient reindeer, ensuring a smooth ride toward your financial goals.

Day 7: The Magic of Giving – Charitable Contributions

🎵 “On the seventh day of Christmas, my Wealth Advisor said to me: The magic of giving – charitable contributions!” 🎵

This holiday season, let the spirit of giving extend beyond wrapped presents. Consider incorporating charitable contributions into your financial plan. Just as the warmth of a cozy fire spreads throughout the room, your generosity can create a positive ripple effect in your community and beyond.

Whether it’s supporting a local charity, contributing to a cause close to your heart, or volunteering your time, the act of giving not only makes a difference in the lives of others but also adds a meaningful dimension to your financial journey.

This holiday season, let the magic of giving be a guiding light, illuminating the path to a more compassionate and fulfilling financial future.

Day 8: Making a List, Checking It Twice – Financial Goals, That Is!

🎵 “On the eighth day of Christmas, my Wealth Advisor said to me: Making a list, checking it twice – financial goals, that is!” 🎵

Santa isn’t the only one who needs a list. Outline your financial goals clearly and revisit them regularly. Whether it’s saving for a dream vacation, a home, or your children’s education, having a well-defined list keeps you on track. Checking it twice? That’s reviewing and adjusting your goals as life evolves.

This holiday season, take a cue from Santa and keep your financial list in order – it’s a key to turning your dreams into reality.

Day 9: Wise Men (and Women) Seek Professional Advice

🎵 “On the ninth day of Christmas, my Wealth Advisor said to me: Wise men (and women) seek professional advice!” 🎵

Even the three wise men sought guidance when following the star. Similarly, seeking advice from financial professionals can provide you with the direction needed for a successful financial journey. Whether it’s investment strategies, tax planning, or retirement advice, a wealth advisor can be your guiding star.

This holiday season, be wise and seek the expertise of financial professionals to navigate the complex constellations of the financial world.

Day 10: The Gift of Education Keeps on Giving

🎵 “On the tenth day of Christmas, my Wealth Advisor said to me: The gift of education keeps on giving!” 🎵

Investing in education is a gift that lasts a lifetime. Whether for yourself, your children, or future generations, education is a powerful tool for personal and financial growth. Like the knowledge passed down through generations, the gift of education can open doors and create lasting legacies.

This holiday season, consider the gift of education as an investment in a brighter and more informed future.

Day 11: A Partridge in a Pear Tree – Invest in Your Home Nest

🎵 “On the eleventh day of Christmas, my Wealth Advisor said to me: A partridge in a pear tree – invest in your home nest!” 🎵

Just as the partridge nests in a pear tree for security, your home is your nest egg. Invest in your property wisely, keeping it well-maintained and considering home improvements that can enhance its value. Your home is not only a place of comfort but also a significant part of your financial portfolio.

This holiday season, let your home be a cozy and well-nurtured nest, providing both emotional and financial security.

Day 12: Drumroll, Please – The Beat of Financial Independence!

🎵 “On the twelfth day of Christmas, my Wealth Advisor said to me: Drumroll, please – the beat of financial independence!” 🎵

As we wrap up our Twelve Days of Financial Wisdom, let’s revel in the grand finale – financial independence. Just as the drumroll builds anticipation, the path to financial independence requires steady and disciplined beats. By saving diligently, making thoughtful investments, and planning for the future, you orchestrate the melody of financial success. Picture the day when you can confidently march to the rhythm of financial freedom, knowing your efforts have created a harmonious and secure future.

There you have it – “The Twelve Days of Financial Wisdom!” May the holiday season bring not only cheer and laughter, but also a renewed focus on your financial well-being.

As we close the chapter on this financial carol and wave goodbye to the year that’s making its exit, let’s hold on tight to the everlasting beat of relationship wisdom in our lives. Think of it like the cozy soundtrack of laughter we share with our favorite people, the easy flow of understanding that feels like a familiar tune, and the big, exciting moments we hit together – they’re all part of the warm symphony of our collective journey. Just like a family dinner where everyone’s got a seat at the table (that you hopefully didn’t prepare in your Master Bathroom), our connections make the kind of music that gives life its colorful rhythm. So, here’s to the echoes of good times, the easy chats, and the solid support that keep our shared story sounding just right.

Wishing you and your loved ones a wonderful holiday season filled with warmth, joy, and a financially sound future. Cheers to a prosperous New Year ahead!

To learn more about CapSouth Wealth Management, visit https://capsouthwm.com/what-we-do/

Article by: Jennifer Fensley, CFP®️,CRPS®️

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature, and is not intended as specific advice. This article was produced with the assistance of ChatGPT (Version 3.5) in December 2023; Chat GPT is an artificial intelligence model owned by OpenAI. CapSouth is not affiliated with OpenAI.

Exercise Financial Muscles to Get Financially Fit

March 6, 2023
Uncategorized

“Those who work their land will have abundant food, but those who chase fantasies have no sense.” This ancient advice from Proverbs illustrates the importance of financial fitness.

What is financial fitness? Well, we are all familiar with the term physical fitness. If pressed for a definition, we might define it in terms of our own ideas and circumstances.

When it comes to an explanation of financial fitness, the same applies. A lot may simply depend on the season you are in. Financial fitness might mean something different to someone who is single versus a couple with young kids, an empty-nester or a retiree. Even within those demographics, one’s perception could be colored by personal circumstances. Are you saddled with debt, debt-free, renting or a homeowner?

There are many ways to get ahold of your finances; you can increase earnings, lower spending, start saving more (short-term and longer-term) and implement debt management. For many, earnings are difficult to influence in the short-term. For most, tackling the spending side of the equation will yield the quickest results. Below we consider six principles that will help you get into financially fit shape wherever you find yourself in life.

6 principles for financial fitness

“An investment in knowledge pays the best interest.”—Benjamin Franklin

Set goals. If you don’t have concrete financial goals, both shorter term and longer term, reaching some level of financial fitness becomes much more problematic. Simply put – you don’t have a destination. You are financially adrift. As George Harrison has noted, “If you don’t know where you’re going, any road will take you there.”

Short-term goals you might consider: Establishing three to six months of cash in an emergency fund, saving for a down payment on a home or auto, or saving for a vacation.

Long-term goals you might consider: College savings for your kids or saving 10-15% of your income for retirement.

Do you know what ‘buckets’ your income lands in? How do you spend your income? If you aren’t tracking expenditures, you won’t have a holistic picture.

You might be surprised at how much you spend on eating out, on entertainment, and even on a daily habit of barista-prepared lattes.Unnecessary spending can be diverted into savings or paying off debt, especially high interest rate credit cards. Make timely payments. This will not only prevent you from accruing needless fees, but it will raise your credit score.

Once credit cards are paid off, channel the excess funds into savings. When you accomplish shorter-term goals, reward yourself. It need not be extravagant, but accomplishments should be celebrated.

Finally, you will struggle to follow a plan that is too draconian. Trim frivolous spending but leave some room for fun and hobbies.

Your lifestyle shouldn’t exceed your income. If it does, you are burning through savings or taking on debt, and your stress level will likely reflect it.

Excessive spending is not a path that leads to financial fitness. You want financial space in your life. You want ‘money at the end of the month,’ not ‘month at the end of your money.’ A budget is your blueprint that helps achieve this goal.

Invest wisely. Among various factors, your financial goals, both shorter and longer term, will greatly influence the proper mix of investments. A diversified portfolio that crosses the spectrum can reduce risk and enhance your return over the long run.

“Don’t look for the needle in the haystack. Just buy the haystack!” advises John Bogle, founder of Vanguard. In other words, diversify!

We are here to assist you with that. Our recommendations are tailored to your financial goals and your unique circumstances.

We avoid get-rich-quick schemes, which are usually nothing more than schemes minus the riches. Accumulation of wealth over a longer period is our goal. We believe it should be yours, too.

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” says Paul Samuelson, the first American to win the Nobel prize in economics.

Enjoy your retirement. Many enter retirement after accumulating wealth over decades. They have learned how to save. For some, suddenly relying on that savings rather than earning income from labor seems like a daunting leap, one they may be ill-prepared to make. It doesn’t have to be that way.

Your financial plan continues to be a valuable resource in retirement. Your level of spending in retirement, both regular expenses and those planned extras along the way, along with how much risk you should be taking, when and how to draw Social Security and other sources of income…these factors and more should be considered within a sound financial plan.

Clients are often surprised when we encourage them to spend more money. As you work to identify your values and what is important to you, we want to see you realize those dreams and enjoy your life to the best of your ability. Your plan serves as an outline that arms you with knowledge of necessary guardrails and enhances your financial fitness.

Protect your assets. Do you have life insurance, health insurance, and personal liability insurance? Do you have a will and estate plan? Who are your beneficiaries? What happens if you become disabled? Do you have a trusted advisor to handle your affairs? What about a back-up?

If you own your home without a mortgage, do you have homeowners’ insurance? Surprise, not all do. If you rent, renters’ insurance is cheap. It’s a must-have item in our opinion.

Absorbing the fundamentals—the foundation for success

Those who fail to put sound principles into practice are like those who build their homes on sand. The rains come and the winds blow, and financial misfortune overtakes them.

Wisdom encourages us to build our homes on a solid financial foundation. Though the rains come and the winds blow (and they will), the house and foundation are designed to withstand financial storms. In the words of Maren Morris, “If the bones are good, the rest don’t matter!”

Every situation is unique. You may have mastered the fundamentals, and only need to apply the principles we highlighted selectively, plugging small holes and shoring up your finances. Or a more aggressive approach might be in order. Focus on one theme at a time. Some may apply. Others may not.

Having said all that, we never want to give the impression that you are all alone on a financial lifeboat. We are always here to assist.

To learn more about CapSouth Wealth Management and the services we offer, visit our website at www.capsouthwm.com or capsouthwm.com/what-we-do/

By: Scott F. McDowall, CFP® | Wealth Advisor

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature and is not intended as specific advice. Any performance data quoted represents past performance; past performance is no guarantee of future results. This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth). CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from this article. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

Women and Money: Taking Control of Finances

August 11, 2022
Finances, Financial Planning, Wealth Management, Wisdom

As a woman, you have financial needs that are unique to your situation in life. Perhaps you would like to buy your first home. Maybe you need to start saving for your child’s college education. Or you might be concerned about planning for retirement. Whatever your circumstances may be, it’s important to have a clear understanding of your overall financial position.

That means constructing and implementing a plan. With a financial plan in place, you’ll be better able to focus on your financial goals and understand what it will take to reach them. The three main steps in creating and implementing an effective financial plan involve:

Developing a clear picture of your current financial situation
Setting and prioritizing financial goals and time frames
Implementing appropriate saving and investment strategies

Developing a clear picture of your current financial situation

The first step to creating and implementing a financial plan is to develop a clear picture of your current financial situation. If you don’t already have one, consider establishing a budget or a spending plan. Creating a budget requires you to:

Identify your current monthly income and expenses
Evaluate your spending habits
Monitor your overall spending

To develop a budget, you’ll need to identify your current monthly income and expenses. Start out by adding up all of your income. In addition to your regular salary and wages, be sure to include other types of income, such as dividends, interest, and child support.

Next, add up all of your expenses. If it makes it easier, you can divide your expenses into two categories: fixed and discretionary. Fixed expenses include things that are necessities, such as housing, food, transportation, and clothing. Discretionary expenses include things like entertainment, vacations, and hobbies. You’ll want to be sure to include out-of-pattern expenses (e.g., holiday gifts, car maintenance) in your budget as well.

To help you stay on track with your budget:

Get in the habit of saving–try to make budgeting a part of your daily routine
Build occasional rewards into your budget
Examine your budget regularly and adjust/make changes as needed

Setting and prioritizing financial goals

The second step to creating and implementing a financial plan is to set and prioritize financial goals. Start out by making a list of things that you would like to achieve. It may help to separate the list into two parts: short-term financial goals and long-term financial goals.

Short-term goals may include making sure that your cash reserve is adequately funded or paying off outstanding credit card debt. As for long-term goals, you can ask yourself: Would you like to purchase a new home? Do you want to retire early? Would you like to start saving for your child’s college education?

Once you have established your financial goals, you’ll want to prioritize them. Setting priorities is important, since it may not be possible for you to pursue all of your goals at once. You will have to decide which of your financial goals are most important to you (e.g., sending your child to college) and which goals you may have to place on the back burner (e.g., the beachfront vacation home you’ve always wanted).

Implementing saving and investment strategies

After you have determined your financial goals, you’ll want to know how much it will take to fund each goal. And if you’ve already started saving towards a goal, you’ll want to know how much further you’ll need to go.

Next, you can focus on implementing appropriate investment strategies. To help determine which investments are suitable for your financial goals, you should ask yourself the following questions:

What is my time horizon?
What is my emotional and financial tolerance for investment risk?
What are my liquidity needs?

Once you’ve answered these questions, you’ll be able to tailor your investments to help you target specific financial goals, such as retirement, education, a large purchase (e.g., home or car), starting a business, or increasing your net worth.

Managing your debt and credit

Whether it is debt from student loans, a mortgage, or credit cards, it is important to avoid the financial pitfalls that can sometimes go hand in hand with borrowing. Any sound financial plan should effectively manage both debt and credit. The following are some tips to help you manage your debt/credit:

Make sure that you know exactly how much you owe by keeping track of balances and interest rates
Develop a short-term plan to manage your payments and avoid late fees
Optimize your repayments by paying off high-interest debt first or take advantage of debt consolidation/refinancing

Understanding what’s on your credit report

An important part of managing debt and credit is to understand the information contained in your credit report. Not only does a credit report contain information about past and present credit transactions, but it is also used by potential lenders to evaluate your creditworthiness.

What information are lenders typically looking for in a credit report? For the most part, a lender will assume that you can be trusted to make timely monthly payments against your debts in the future if you have always done so in the past. As a result, a history of late payments or bad debts will hurt your credit. Based on your track record, if your credit report indicates that you are a poor risk, a new lender is likely to turn you down for credit or extend it to you at a higher interest rate. In addition, too many inquiries on your credit report in a short time period can make lenders suspicious.

Today, good credit is even sometimes viewed by potential employers as a prerequisite for employment–something to think about if you’re in the market for a new job or plan on changing jobs in the near future.

Because a credit report affects so many different aspects of one’s financial situation, it’s important to establish and maintain a good credit history in your own name. You should review your credit report regularly and be sure to correct any errors on it. You’re entitled to a free copy of your credit report from each of the three major credit reporting agencies once every 12 months. You can go to www.annualcreditreport.com for more information.

Working with a financial professional

Although you can certainly do it alone, you may find it helpful to work with a financial professional to assist you in creating and implementing a financial plan.

A financial professional can help you accomplish the following:

Determine the state of your current affairs by reviewing income, assets, and liabilities
Develop a plan and help you identify your financial goals
Make recommendations about specific products/services
Monitor your plan
Adjust your plan as needed

Keep in mind that unless you authorize a financial professional to make investment choices for you, a financial professional is solely there to make financial recommendations to you. Ultimately, you have responsibility for your finances and the decisions surrounding them. There is no assurance that working with a financial professional will improve investment results.

To discuss this article further or to learn more about CapSouth Wealth Management, visit our website at www.capsouthwm.com or call 800.929.1001 or click to Schedule a Discovery Call

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. This material is from an unaffiliated, third-party and is used by permission. Any opinions expressed in the material are those of the author and/or contributors to the material; they are not necessarily the opinions of CapSouth. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature and is not intended as specific advice. Any performance data quoted represents past performance; past performance is no guarantee of future results.