Five New Ways We Could Use Credit Cards In The Future

Presented by Mark Phillips

Tired of pulling your credit card out of your wallet every time you want to make a purchase?  What if you only had to use your hand?  Or maybe instead of going to the grocery store, you could order groceries right from your refrigerator!  This article shares some possibilities for the future – that may or may not make life easier.

http://qz.com/609642/refrigerators-bots-and-cars-nine-ways-you-can-use-your-visa-card-in-10-years/

Who Is Your Go-To Person For Financial Advice?

Presented by Nick Bautista 

Have you ever thought about the people in your life who you turn to for financial advice? Think about that for a minute. When you have a financial question, who do you call or text, and why? Is it because you perceive them to be smart, or wiser than you? Or is it simply because you believe they have the experience to handle your similar situation.

Whatever and whoever you listen to when making your financial decisions, there is one thing you should know. It goes back to the old saying you used to hear when you were a kid. “If Johnny were to jump off a bridge would you do jump too?” Although a ridiculous analogy for following what others do, the message is clear. Why do we blindly follow the advice from someone who doesn't necessarily know or understand our financial situation?

Okay maybe this doesn't hit too close to home or is just too simplistic. So instead, think of the first person you would ask if you had/needed medical attention, a gaping wound, would your parents or best friend know if you needed stitches and be able to do it right then if you did need them. Of course not, you would go see a doctor immediately. So why is it that in our financial need we turn to those who do not understand our situation?

Everyone agrees that finances are extremely important yet we automatically assume those around us with little or no experience can help us with our questions. No one financial situation is the same. Let me repeat that so it sinks in, no one financial situation is the same. Just ask any doctor and they will tell you how no one patient is exactly the same.  

So again I ask who do you ask for financial advice? How much experience do they really have and is it the exact same or similar situation you are in? If the answer is yes, then think one step further. Does your financial friend know if you should do a Roth Conversion or how much you should defer in 401k contributions to save on taxes now? Do they know how much you can contribute to your retirement in a given year based on your retirement plan? Do they understand the history of the stock market or the correlation between asset classes in a given time period, knowing what your allocation should be based on your age and amount saved already? Do they know your goals, and what the money is needed for in order to invest it in a suitable place? Do they know the effect on your retirement plan for buying that car or house you are thinking about?

If your answer is no to any of the above you are getting poor advice and ultimately the wrong answer. While your wound may be okay without stitches you don’t want to find out 30 years later you really needed them, or more importantly you were given the wrong financial advice and your retirement plan is now underfunded to meet your goals.   

Making Good Decisions

Make good financial decisions can be hard when you see people making bad decisions being rewarded.

It can be really hard to behave correctly if we see examples of people being successful while doing things we know have higher odds of a bad outcome (e.g., buying lottery tickets). But as you’ve probably learned by now, investing isn’t always fair. Bad choices get rewarded, while people who made prudent decisions sometimes appear to be punished—at least in the short run. So even though it’s tempting, I strongly encourage you to judge the investment advice you receive based on the validity of the principle and not the outcome. For instance, one story I shared in The Behavior Gap dealt with a client who had stock in his grandmother’s mining company. Over time, the family had invested and lost millions trying to keep the business afloat. As you might imagine, the family stories around the business made it seem like a sacred thing to protect, regardless of the cost. At this point, the stock had reached a low of $2 a share, and my client debated what to do. He worried that if he sold the stock, then it might recover and his family would regret the sale and wish they’d kept it. I acknowledged that if he sold the stock and it doubled or tripled—which was a real possibility—he’d feel badly. But the catch was that if he kept the stock and it went to zero, he’d feel much, much worse. The underlying factor was that he needed to make a decision based on a principle (e.g., did owning this stock support his long-term goals) instead of the emotion and family lore surrounding the stock. There’s no guarantee that good investment decisions won’t lead to a painful result. But we need to remain committed to making good decisions based on sound principles and not just luck. Carl

Who’s Rich Anyway?

Presented By Nick Bautista

Think about this, in the US the top 20% households make $107,628 annually. If your networth is more than $415,700 you are also in the top 20%. Here is the total breakdown:

Household Income Annually
Top 1%	$521,411
Top 5%	$208,810
Top 10%	$148,688
Top 20%	$107,628

Household Net Worth
Top 1%	$6,816,200
Top 5%	$1,863,800
Top 10%	$952,200
Top 20%	$415,700

WSJ: 2012 data from Tax Policy Center
 

To put this into further perspective what is considered the poverty line for a two person household is $15,510. Meaning that a two person household making $46,530 makes 300% more than someone in poverty.  (http://aspe.hhs.gov/poverty/13poverty.cfm)

So who is rich anyway? This week I was reminded that the little things in life are what matter most. I read an interesting article about Brett Favre. When asked if he would return to the NFL with all the injuries to key quarterbacks, he simply said no. A man who made millions upon millions (top 1%). He thought he put his family on hold for 20 years and couldn’t stand the idea of putting them off any longer and he gets to fulfill being with them doing the things he loves, which actually isn’t football related. I found that refreshing, that someone who was defined by their work became something more, a father. No matter how much money he made he ultimately valued the things money and fame couldn’t buy.
 

What are you striving for today, this week, or in life? Do you have more than you need, or do you constantly need the next best thing? We all, including myself need to be reminded that what we have is enough. Don’t let money rule your life, for you might find out it’s not that satisfying.

 

Brett Farve article: http://espn.go.com/nfl/story/_/id/9872646/brett-favre-return-sources-saying-rams-reached-out

Why we believe in setting up “Tripwires” in your financial life…

Presented By Mark Phillips

Carl Richards, one of our favorite thinkers on the art of planning and advice – not all financial, shares a great reminder of the value of the “tripwire” in his latest post on his blog site (Behavior Gap). Using a story about a medical procedure he underwent Carl relates, with his typical elegant simplicity, the beauty of the well-designed tripwire.

We believe in a huge way in the tripwire tool. After all we are only human, life is ever more busy and complicated, and mistakes, especially those not caught for a long time, can be expensive.

Please give yourself a well “invested” five minutes to enjoy and think about Carl’s article.

Click here to read the article.                                                                                                                 

Please jot down 2-3 tripwire opportunities in your life to share with me at our next meeting. They need not be explicitly financial in nature. After all, we have all discovered that the non-financial problem eventually often becomes a financial problem as well.

The search for Happiness is not done by direct route…

Presented by Mark Phillips

Emily Esfahani Smith's recent article "There's More to LIfe Than Being Happy"speaks to the pathway to happiness and vitality in our lives. She provides a thoughtful summary of the work of Viktor Frankl and others who have studied the issue of happiness and longevity. Her work on this matter has appeared most recently in The Atlantic.

This may indeed provide great insight into the successful pursuit of happiness and longevity – or it may help confirm what you already believed to be so.

Share and discuss with friends and family freely!

Mega-Weddings: Say "I Don't"

By Melanie Vu

 

New research has found that there is no positive correlation between having an extravagant wedding and a long successful marriage. “We find evidence that marriage duration is inversely associated with spending on the engagement ring and wedding ceremony,” write Andrew Francis and Hugo Mialon, two economics professors at Emory University in Atlanta.  This study was based on the wedding budgets and marriage track records of over 3,000 U.S. adults.

In their study, they found that 60% of couples whose wedding cost over $20,000, say their marriages ended in divorce. Men who spent $2,000 to $4,000 on their engagement ring ended up divorced 30% more often than those who spent between $500 and $2,000.

There are several reasons as to why costly weddings don’t necessarily lead to long and happy marriages.

·         Expensive weddings may attract the people who are materialistic and narcissistic – who are less likely to sustain a successful marriage due to money issues. Financial planners note that money troubles consistently feature as a leading cause of marriage problems.

·         A Fairy-tale wedding may also raise unrealistic expectations about marriage. Couples who plan an extravagant wedding may trap the fiancé or fiancée who is having second thoughts, not wanting to speak up because of all the effort going into planning the wedding and all the guests who have already bought their plane tickets.

According to Michelle Fait, a financial planner in San Francisco, “those who spend the most are often seeking external validation”. Modern couples are under pressure from family, social media and friends to spend more on the wedding. The wedding should be the special day for husband and wife, instead it turns into trying to please and impress guests. History has repeatedly shown that obsession with impressing others is all too often a formula for disaster.

These assumptions are only based on one study, so we shouldn’t put too much weight on the price of a wedding and the success of the marriage. Having an expensive wedding does not cause an unsuccessful marriage, but couples who plan a wedding need to ask themselves if spending more on the wedding will help the future of their marriage.

Click here to read the full article.

 

One of the most Amazing Gift Catalogues in the World!

Presented by Mark Phillips

 

Heifer International's mission is to work with communities to end hunger and poverty and care for the Earth.

It all started with a cow.

Moved by the plight of orphans and refugees of the Spanish Civil War as he ladled out meager rations of powdered milk, Dan West, an Indiana farmer, volunteer relief worker and Church of the Brethren member, grasped that the people needed "a cow, not a cup"—cows that could produce milk so families would not have to depend on temporary aid. From that simple idea, Heifer International was born.

 

 

In 1944, the first cows sent abroad were donated by West's neighbors and distributed throughout Europe following World War II. More than 67 years later, Heifer has expanded its mission, just as it expanded to 30 types of animals it now provides—from goats, geese and guinea pigs to bees, silkworms and water buffalo.
 

Through their Web site Catalogue you can reach out and help change the face of the world through changing the human experience.
 

(Charity Navigator Rating for Heifer Int’l)

The 5 Keys to Wealth?

Presented by Mark Phillips

A recent article on Marketwatch provides a summary of some not so surprising yet compelling behavioral keys to financial independence…

Will you be rich, or will you struggle financially? How you answer five simple questions today may reveal the answer.

According to research released this month by the Federal Reserve Bank of St. Louis, “five simple questions may predict personal financial health and wealth surprisingly well.” Researchers William Emmons and Bryan Noeth, looking at data from 1992 - 2013 found that there was a strong correlation between how 38,385 different families scored on these questions and their net worth today – as well as a correlation with how likely they were to be financially comfortable in the future.

Click here to go to the article

Clearing Out Catalog Clutter

Presented by Mark Phillips

In my role as your advisor I work hard to find ways to help de-clutter your financial lives. But as consumers, we’re all faced with other forms of clutter, like the clutter we find in our mailboxes.

To help you simplify life from a nonfinancial perspective, I’m calling your attention to Catalog Choice, a cost-free service that enables you to slow down—or stop entirely—catalog delivery to your mailbox. Using its website, www.catalogchoice.org, is simple:

1. Sign up. Your contact information won’t be shared, except to initiate catalog receipt preferences.
2. Find the catalogs you receive; then select receipt options.
3. Watch for a reduction in the number of unwanted catalogs. It could take up to 12 weeks to be dropped from the mailing cycle, but the results will be worth the wait.

I hope that you can take these steps to de-clutter your mailbox. Meanwhile, I will continue to work diligently to make your financial life as clutter-free as possible. If you have questions about the information shared here, please contact me at 949-333-6394

Tips and Tricks for Smart Holiday Shopping

Presented by Mark Phillips

 

As the end of the year approaches, shopping malls and online stores will soon be bustling with bargain hunters on a mission to check items off their gift lists. Yes, the holidays are just around the corner, and, according to the National Retail Federation, the average person will spend about $740 on presents, decorations, and the like this year. Although the thought of crowded parking lots, long lines, and sold-out items may be daunting, these smart shopping strategies can help you ease the stress of gift-buying.

Plan ahead

It may seem obvious, but planning ahead is key to efficient holiday shopping. Knowing what you want from different stores and how much you can spend will help you make quick work of your list. Here are a few ideas for getting organized before the rush starts:

·         Make a detailed list. There’s nothing worse than forgetting someone and having to make a last-minute trip to the mall. In addition to friends and family members, think of any coworkers, teachers, or neighbors you’d like to acknowledge this year.

·         Set a budget. Before you spend a dime, ask yourself how much you want to shell out overall. (Be sure your total is realistic.) Then, break out costs for each individual on your list.

·         Do your research. It’s helpful to compare products and prices online before heading to the mall. Making a game plan for what you want to buy and where can help you avoid rushing from store to store looking for the items on your list.

·         Get there early. Some retailers program their registers the night before a sale, so shopping after 6:00 p.m. the night prior can be a great way to take advantage of advertised discounts before the crowds descend.

Try shopping online

Visiting brick-and-mortar stores during the holiday season often means waiting in traffic and searching for scarce parking spaces, all to get inside and wait in another line at the register. Although some of the best deals may be found in-store, buying gifts online has its advantages. Here are some factors to keep in mind:

 

·         Consider the time value of money. It’s safe to say that browsing products online is much less time-consuming than wading through crowds at the mall, especially if you’re not sure what you want. Staying home and hopping on the Internet can save you time (and gas money), at least until you’ve figured out what you’re buying and where.

·         Weigh your shipping options. Many online retailers can ship your purchase to a different location than the billing address. This can be a useful feature if you’re traveling and want to send gifts directly to your destination. Some merchants also let you buy online and pick up the item at the store.

·         Check return policies. Stores’ policies vary significantly, so before you buy anything online, get the details on returning and exchanging items. For instance, who pays for return shipping? Can you return an item you order online to your local retail store?

·         Stick with trusted retailers. It’s best to do business with merchants you know and to avoid any too-good-to-be-true online promotions. If you’re interested in an item on an unfamiliar website, look for the site’s security and privacy seals or check out other customers’ experiences at www.bizrate.com.

Find creative ways to save money (and time)

Whether you plan to shop online or at the mall, saving a little money here and there can really help stretch your holiday budget. For example:

·         Compare prices on the go. If you need to check prices while you’re out and about, consider using a smartphone app like Red Laser, which lets you scan a product to see if it’s available anywhere else for less.

·         Use cash. Shoppers who pay with credit cards are likely to spend more than those with cash in hand. It’s all too easy to buy on impulse this time of year, and making cash purchases may help deter you from blowing your budget.

·         Outsource gift wrapping. Many charity groups offer gift-wrapping services in malls and stores. For a small donation, you’ll save yourself some time, not to mention the cost of supplies like ribbon and tape.

·         Don’t overlook coupons. During the holidays, coupon specials abound. Browse your local newspaper supplements, and look online for deals from retail stores you plan to visit. Apps like Coupon Sherpa can even deliver discount offers to your phone.

Make a post-shopping to-do list

After you’ve finished your shopping, there are still a few things you can do to avoid last-minute hassles:

·         Keep track of purchases. Save your store receipts and print out confirmations for online purchases. This can come in handy when checking your credit card or bank statements, and also if you need to return or exchange items.

·         Include gift receipts. As you wrap your packages, enclose a gift receipt so recipients can easily return the item, if necessary.

·         Get to the post office ASAP. If you plan to mail any packages, it’s best to do so as soon as your shopping is done. The U.S. Postal Service and other shipping companies only get busier and busier as the holidays draw near.

Here’s to a more peaceful season!

The holidays shouldn’t be stressful, but they certainly can be if you wait until the last minute to finish your shopping. We hope these tips will help make your preparations a bit more pleasant—and give you more time to celebrate with your loved ones!

Mark Phillips is a financial advisor located at Mark Phillips & Associates, 19712 MacArthur Blvd., Suite 225, Irvine, CA 92604. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network^®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at (949)333-6394 or at mark@phillipswealthmanagement.com.

© 2013 Commonwealth Financial Network^®

Busy States of America

Presented by Mark Phillips

Happy with how your life is working and what your time is yielding you?

Everyone you know happy with the outcomes they are getting from their time investments?

Click anywhere on this graphic and you will have access to the fully interactive version…

Notice that for an average American:
     • Education is ~29 min. per day, including Americans as young as 15,
     • Education drops below 1 min. per day for those over 54 years old (why??)
     • Television is ~2 hours and 46 min. per day for the average American,
     • Television time eclipses Education time for all age and gender groups in the study.
     • For someone over 75 less than 12 min. is devoted to helping others (family and non-family combined) per day

Perhaps we all have an opportunity to improve our results… Please share the opportunity with those you care about….

Coursera.org

Khan Academy

Mooc List  

Volunteer Guide

Great Non-Profits

Non-Profits on Yelp

 

Please note: The information is provided to you as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites.

Words of Wisdom from a few of the Wise…

Warren Buffett: Be greedy when others are fearful.

 "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."
  -Source: 2004 shareholder letter








Philip Fisher: Know the value of your investments.
 

“The stock market is filled with individuals who know the price of everything, but the value of nothing.”
 - Source: Investopedia









Wikimedia Commons


 
Barton Biggs: There are no relationships or equations that always work.

"Quantitatively based solutions and asset allocation equations invariably fail as they are designed to capture what would have worked in the previous cycle whereas the next one remains a riddle wrapped in an enigma."
  - Source: Barton Biggs via The Gartman Letter








 
John Templeton: This time is not different.

"The four most dangerous words in investing are 'This time it's different.'"
  -Source: Marketwatch










 
Ken Fisher: Keep history in mind.

"You can’t develop a portfolio strategy around endless possibilities. You wouldn’t even get out of bed if you considered everything that could possibly happen... you can use history as one tool for shaping reasonable probabilities. Then, you look at the world of economic, sentiment and political drivers to determine what’s most likely to happen—while always knowing you can be and will be wrong a lot."
  -Source: Markets Never Forget (But People Do)




 
Charles Ellis: Invest for the long run.

"The average long-term experience in investing is never surprising, but the short term experience is always surprising. We now know to focus not on rate of return, but on the informed management of risk"
  -Source: Winning The Loser's Game








YouTube


 
Thomas Rowe Price Jr.: Know who's running the business, and why.

“Every business is manmade. It is a result of individuals. It reflects the personalities and the business philosophy of the founders and those who have directed its affairs throughout its existence. If you want to have an understanding of any business, it is important to know the background of the people who started it and directed its past and the hopes and ambitions of those who are planning its future.”
  -Source: Valuewalk








 


Peter Lynch: Do your homework.



"Investing without research is like playing stud poker and never looking at the cards."
   - Source: One Up On Wall Street











 
John Neff: Do what's smart, not what's popular.

"It's not always easy to do what's not popular, but that's where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized."
   -Source: John Neff On Investing 

Bill Payment Made Easy(ier)!

One of our good clients enlightened us to the PayTrust service offered by Intuit and this does indeed look like it would help us to stay organized and in control more easily.

Their pitch…
For less than the cost of an average late fee, PayTrust is an investment that pays off.

• It manages your bills, so you don't have to

• Includes scanning of all paper bills (never file or keep a bill again)

• Includes 25 transactions, $0.65 for each additional transaction*

• No contracts - cancel any time

• No more wasting precious time

• Avoid late fees & keep a healthy credit score
 
We are not endorsing this however it certainly looks interesting and is supported by Intuit, a firm that has brought us many good and useful tools (Quicken, Mint, etc.) 

For the PayTrust site Click Here

Who Is Your Go-To Person For Financial Advice?

Presented by Nick Bautista 

Have you ever thought about the people in your life who you turn to for financial advice? Think about that for a minute. When you have a financial question, who do you call or text, and why? Is it because you perceive them to be smart, or wiser than you? Or is it simply because you believe they have the experience to handle your similar situation.

Whatever and whoever you listen to when making your financial decisions, there is one thing you should know. It goes back to the old saying you used to hear when you were a kid. “If Johnny were to jump off a bridge would you do jump too?” Although a ridiculous analogy for following what others do, the message is clear. Why do we blindly follow the advice from someone who doesn't necessarily know or understand our financial situation?

Okay maybe this doesn't hit too close to home or is just too simplistic. So instead, think of the first person you would ask if you had/needed medical attention, a gaping wound, would your parents or best friend know if you needed stitches and be able to do it right then if you did need them. Of course not, you would go see a doctor immediately. So why is it that in our financial need we turn to those who do not understand our situation?

Everyone agrees that finances are extremely important yet we automatically assume those around us with little or no experience can help us with our questions. No one financial situation is the same. Let me repeat that so it sinks in, no one financial situation is the same. Just ask any doctor and they will tell you how no one patient is exactly the same.  

So again I ask who do you ask for financial advice? How much experience do they really have and is it the exact same or similar situation you are in? If the answer is yes, then think one step further. Does your financial friend know if you should do a Roth Conversion or how much you should defer in 401k contributions to save on taxes now? Do they know how much you can contribute to your retirement in a given year based on your retirement plan? Do they understand the history of the stock market or the correlation between asset classes in a given time period, knowing what your allocation should be based on your age and amount saved already? Do they know your goals, and what the money is needed for in order to invest it in a suitable place? Do they know the effect on your retirement plan for buying that car or house you are thinking about?

If your answer is no to any of the above you are getting poor advice and ultimately the wrong answer. While your wound may be okay without stitches you don’t want to find out 30 years later you really needed them, or more importantly you were given the wrong financial advice and your retirement plan is now underfunded to meet your goals.   

The King of Human Error

Presented by: Tracy Chiu

As this article from Vanity Fair points out, Nobel Prize-winning writer and psychologist Daneil Kahneman reveals the kinks of the human mind when it comes to reasoning and making rational decisions. In his new book, Thinking, Fast and Slow, he uses himself as Exhibit A and looks at the psychology and reasoning behind why people who buy lottery tickets also buy insurance and why people are less likely to sell their houses and their stock portfolios in falling markets, as a few examples. Knowing how the mind works (or not) is a great start to hopefully making better decisions in our daily lives.

Read further to learn more.

De-Stuff your Teen

Presented by Tracy Chiu

Raising a child is not only a challenge emotionally but one must consider the financial costs as well. According to the U.S. Department of Agriculture, the care and feeding of the average 15 year old runs about $13,530 per year. With the higher cost of living, this number today is much higher than say 5 or 10 years ago. Besides food costs, teens’ latest clothing and gadgets can put a dent on parents’ savings. What’s the solution? Teaching kids money management and bargain shopping are both essential.

If you have a teen, or soon to be teen, you can’t afford to miss this article…

Click here to read further

How to handle Medical Bill problems

Presented by: Tracy Chiu

Hiring a medical billing advocate was the best decision for an Arizona couple featured in this L.A. Times article. They learned to manage and reduce their overall medical bills from their son’s hospital visit. When faced with the reality of huge medical bills after a health situation, it may be imperative to have an agency like Medical Billing Advocates of America to help sort and understand what the charges consist of and what your rights are in terms of the law.

Don’t miss this. Read further to learn about other helpful resources and how an advocate can benefit your personal situation.  

Click here for article

Not Another Password

Presented by:  Nick Bautista

Think you have a strong enough password? Think again. Research shows that the most popular passwords are 123456 and password. Although these may be easy to remember, it makes it extremely easy for criminals to hack into your accounts.

Remembering your log in is hard enough with every website requiring them. So what can you do to create a strong password? Here is a link to some of the best practices to take.

Click here for the article