Today’s Objective…Hopefully your famous last words in life won’t be “Hey y’all, watch this!” And in the financial world, there’s quite a few phrases that you don’t want to be your famous last words either… Dan talks through some common financial phrases that certainly aren’t words to live by.
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Tactical Points:[2:58] “I want to get out of the market and stay out (after 2008)”
- Dan says this is not the kind of person who would be his client.
- Taking all your money out of the market will mean you will experience some depreciation with inflation.
- This is like saying, “I haven’t gone to the doctor since 2008 and I feel okay, so I don’t think I’m going back.”
- Dan spends time convincing several clients to keep money in cash to cover emergency funds or upcoming life events.
- It is good to have some money in cash, but not all of it.
- Long-term wealth creation, however, only works with some money in the market.
- You have to have some risk to keep up with inflation.
- This one is self-explanatory, right?
- Statistically, you are more likely to go into a nursing home than not.
- The burden is often shifted to your children.
- Dan shares a personal example of having to make decisions regarding this type of care for family members.
- It all depends on whether you are physically, cognitively, and emotionally able.
- It’s not a plan, but often failure to plan that leads to this result.
- Between the trade war and tension with the president and congress, Dan gets a lot of clients calling about their portfolio.
- Dan recently read Your Money and Your Brain by Jason Zweig which listed some statistics including: about 41 percent of high net worth investors wish they had more self-control over their investing decisions.
- Devise a plan that considers your age, goals, and risk tolerance, but then remember your portfolio was designed for turbulence.
- Gretchen inherited a lot of stocks and mutual funds from a relative, and a friend told her she would have to pay a ton of taxes on the gains. Does this sound right?
- When a person passes away, stocks and mutual funds get a step-up in basis.
- The value on the date your relative passed away is the basis, so you only have to pay on the gain from that.
- Speak to a CPA or estate planning attorney to be sure based on your situation.
- Do you have a favorite movie that you could re-watch over and over?
- Dan chooses a few that are philosophical, aspirational, and sentimental.
- Check out Dan’s YouTube Channel
- Book link: https://www.amazon.com/Your-Money-Brain-Science-Neuroeconomics/dp/0743276698
- Step-up in basis: https://www.investopedia.com/terms/s/stepupinbasis.asp
Sit down and devise a plan that has the amount of risk that is commensurate with your age, overall goals, and risk tolerance. Just like flying in a plane, when you hit turbulence remember that the plane is designed for turbulence--so is your portfolio. - Dan BetzelTweet This