Bradley Associates Madrid Media Financial Tips, FOR RICHER OR POORER: SOME TIPS FOR NEWLYWEDS

Summertime is upon us, and with that comes a very popular time of the year for folks to marry. Before tying the knot, you both need to take financial inventory–seriously. With student debt at historic highs and people waiting longer to marry, the likelihood of people saying “I do” changes some part of that vow to “Yes, I will accept your debt, too.” Have the talk now; don’t wait.

So let’s start with simply comparing spending habits. DO NOT assume that your spouse shares the same beliefs about spending and saving. Talk about how you feel about cars; retirement accounts; a good cushion for savings; and, of course, the largest purchase you both will ever make--your home.

Next is coming out of the “financial closet.” Please discuss your incomes, student debt, credit card debt, and what you may or may have not saved for retirement. Compare statements and credit history. Know your financial scores (you can obtain free credit reports). This is important. When you marry, you take on your partner’s debt–like it nor not. If your partner would ever have to file for bankruptcy, that will affect you. If you want to buy a house, his or her credit score will affect what you can buy and the rate you will pay for it.

Combined salaries, we’ve hit the jackpot! That means we can live a super crazy lifestyle!  Yes, two can live as cheaply as one and will most likely save you money on rent, utilities, food, and so on. However, when combining two salaries, some couples feel that it’s a windfall and go bananas. Don’t do that. Create a budget. If possible, try to live on one salary and save some of the other. One of you could get laid off, change careers, or go back to school. Then there’s the family you could start, and I don’t need to tell you children are expensive. Avoid credit cards–if you can’t pay cash for it, you can’t afford it (sorry).

Try to put away at least 10 percent of your combined gross income each year toward retirement. Take advantage of employer matched plans to the fullest extent. You may think you have time to save for retirement and this is not necessary now, but it is. Considering the staggering amount of people with no retirement savings; they may have thought the same as you and thought they had plenty of time to save. If you can’t do 10 percent, start with something. It can make a difference.

You may want to consider getting some insurance. There are many different types of insurance such as term life, catastrophic medical insurance, and long-term disability. Although some of these policies are offered through employment, check to see if it’s enough and compare. This is a very important but often ignored part of financial planning.

If this is a second marriage, the time is now to find out about financial obligations to the ex or the children from the marriage.

Lastly, when all the dust settles after the big day, you may want to create a will. Even if you have one, you may need to update it after you marry. If something were to happen to either of you, or both of you, and there is nothing legal in place, it can become a huge mess for your surviving family members. Contact an attorney today and get to it. It’s not everyone’s favorite thing to do, to discuss mortality after such a wonderful event, but it’s really important.

Money discussions are not an easy task for anyone, especially newlyweds. But you are a team now, and it’s important to have an open mind and get these things on the table. This is a time to enjoy life–but do it within your means so you can both sleep at night.

Bradley Associates Madrid Media Financial Tips on The Best Financial Advice for Small Business Owners Now

More than a few of our clients at Glassman Wealth Services are small businessowners and entrepreneurs, so I’m often asked to give advice on ways to improve their businesses or share ideas that will give them a competitive edge.

As a small business owner myself, I know first-hand the challenges that many of my fellow small business owners face. But there are some smart things that small business owners should consider doing now. Here’s my top 3 tips:

1.  Access Capital Now

We’re five years out from the Great Recession and the start of the financial crisis that all but dried up access to capital especially for small businesses. That’s changing now as banks have money to lend and more of an appetite to lend it. The requirements are still the same like having good credit and a solid business plan, and you may need to be prepared to personally guarantee the loan. Most small business owners should consider accessing capital for three reasons:

Expanding your business by buying another company, launching new products or services or hiring new employees

Refinancing any old debt at today’s lower interest rates

Establishing a line of credit (LOC) for a rainy day. You may need the liquidity a LOC provides to occasionally meet day-to-day business obligations like payroll or temporary cash crunch needs.

2.  Engage Rather Than Employ

Working in Washington, D.C., we’ve been known as the lawyer capital, but today, this area is also known as being rich in consultants. Fortunately great consultants exist in many parts of the U.S. So rather than hiring for a position that may be just part-time, like a marketing strategist or legal counsel, instead, consider retaining a consultant that is an expert in their field.

Keep in mind that many of these consultants left big companies to start businesses of their own. We use consultants in our own business to fulfill many of our business functions. In fact, we outsource most functions outside of our core business. To learn more about outsourcing, read:  Make Outsourcing a Competitive Advantage.

The best benefit to hiring a consultant is that they cross-pollinate. What I mean by this is that they work with dozens, maybe hundreds of other businesses and bring a perspective and advice formed by best practices from working with many clients. This insider’s view can help you avoid costly mistakes and enhance any number of areas of your business.

3.  Have a Lean Start-Up

I recently read a fantastic book, The Lean Start-Up by Eric Ries which is a must-read for all businesses regardless of size. The main point of this book is that if you’re starting a business or launching a new product, you don’t need to start with the grandiose office or spend years developing a finalized product or service before you launch.  Instead, this book champions the idea of testing your vision by launching a more rudimentary form of your concept to gain interest and feedback.

Companies like Starbucks or Proctor and Gamble test new concepts on smaller markets before launching their products worldwide. Small companies can learn from this approach. Develop a prototype to get the product out, launch it in smaller markets, test it, get feedback, pivot, and then refine it.  By using this cost-effective process, you’ll have a refined product or service designed to the taste and needs of potential clients because they told you what they liked and wanted along the way.

As the economy continues to improve, small businesses will have more opportunities to expand and grow. By taking advantage of opportunities that exist now, you’ll improve your chances of success.

Bradley Associates Madrid Media Financial Tips on Commonsense Financial Tips: Don't Put Money Under the Mattress

“I don’t know what to do,” said my good friend Rob after inviting my wife Jo and me to dinner for the third time in two weeks. “I know I should do something. Every time I think about it, it scares the hell out of me! Maybe I should just hide everything under the mattress.”

Rob is a sharp guy—he’s done well for himself and his family. He also recently settled the last details of his parents’ estate. Upon banking part of his inheritance, the branch manager magically appeared, introduced himself, and invited Rob into his office to discuss “some really good rates” the bank had to offer.

Not even the drive-through window has helped Rob fly under the radar. It still takes but a few seconds before the manager appears and starts his pitch. Rob has started to wonder if the drive-through tellers have a bright yellow “sic ‘em” button.

Rob is a veteran subscriber to Miller’s Money Forever. He reads our material faithfully and isn’t shy about asking questions. He knew for two years this large influx of cash was coming, and he’s made it a point to learn how to handle it.

Up to that point, Rob’s wealth consisted of home equity, retirement plans managed by others, and some collectibles. Now he has a sizable chunk of cash to invest, and he’s understandably scared.

So far, Rob has lots of book learning under his belt, but little real-life investing experience. Every option we discussed at that third dinner evoked a “Yes… but!” After much back and forth, I finally realized Rob’s Achilles heel wasn’t a lack of investment knowledge. Instead, it was his fear.

And Rob is not alone. The following morning, I received a timely message from subscriber and regular correspondent, Bee H. She shared a laundry list of places to put your money—banks, real estate, precious metals, annuities, a mattress—and all the horrible ends that money could meet in those places. Government seizure, market crashes, eminent domain, theft, inflation… the list went on.

Bee’s concerns are not unfounded. I even shared them with Rob under the heading: “See, you aren’t alone.”

Rob’s response: “Wow. She’s reading my mail! I’m stewing over this very same issue…”

Then it hit me hard: What are they afraid of? Not the market and investing, but rather the adverse consequences of government behavior. After nearly every “Yes, but,” Rob expressed fear about what the government might do: a haircut, bailout, bail-in, outright confiscation. Call it what you will.

These fears cross partisan lines. We all have some sense—even if we can’t quite put our finger on it—that our personal and economic liberties are threatened. Heck, every time I look in the sky now, I scan for NSA drones. If I see a tiny speck, I look at the television camera, wave my hand, and say, “Hi, Mom!”

Many of my friends—Independents, Libertarians, Republicans, Democrats, even a Green Party member or two—have told me, “For the first time in my life, I’m afraid of our government.”

Commonsense Alternatives to Your Mattress

If you’ve been reading my articles for any length of time, you know I worship at the altar of practical wisdom. So, my response to Rob and Bee came from that same place.

·         Maintain perspective. You can’t get rid of these political risks entirely (although a little international diversification will help). Vote for the candidates you think are least likely to make things worse and move on.

Learn the rules, pay your taxes, and fill out the proper forms. You don’t have to like it, but the punishments for noncompliance can be harsh. Behaving yourself is the best route.

Plan and execute a retirement approach that will be successful despite foolhardy government action. This is more challenging than it was for our parents’ generation, but it is within your reach.

·         Pay off debt. Rob told his accountant he was going to pay off his house with part of his inheritance. His accountant replied, “No! That’s a terrible plan. Invest the money! You can earn better returns than the interest rate on your mortgage.”

Are you kidding me? Rob’s a rookie investor who’s scared to death, and his accountant is telling him to go into the market with borrowed money? Hell, that guy might as well have shown him how to buy on margin while he was at it! Rob held his ground, saying, “I plan to get out of debt and stay that way.”

·         Keep saving. Once you’re out of debt, start making those debt service payments to yourself each month, first. Then live on the rest. Concerns about government confiscation or higher taxes should motivate you to save even more. If the worst comes, you want to have enough left over so you and your family survive.
 

·         Get a financial checkup. Find a good financial planner, preferably one with a fiduciary responsibility to you (not all have that). Mark your goals, set a realistic plan, and check in annually.
 

·         Never turn over all of your money to a money manager. Some money? Sure. But ultimately, the only way to protect your money is to learn how to invest it yourself.

The first time you click your mouse to make a real trade, your heart will be racing. It’s an emotional experience, but each trade—good or bad—teaches you something and brings more confidence.

·         Understand the motivations of brokerage firms, insurance agents, and banks. Rob experienced this in action. The branch manager offered him a “special rate” on a CD that wouldn’t even keep up with inflation.

Brokers and captive houses will gladly do a free financial checkup and encourage you to put your money in their company-sponsored funds. The same is true of insurance companies. While there may be better options, they push for what compensates them the best. Caveat emptor!

A money manager with a fiduciary responsibility must put your interests ahead of theirs. You want advice from people who are not stakeholders.

Always ask, “Are there better options available?”

·         Learn the lessons pundits cannot always teach. When you make an asset purchase, write down why. What is your stop loss, and what are your earnings targets? When you sell, investigate what made you successful or what happened that caused you to lose money.

You’ll take some losses. Just don’t panic! They don’t have to be expensive learning experiences. As a wise old baseball coach once said, “Make your outs count!”
 

·         Doing nothing is a choice. It’s an expensive one at that, as your cash loses its buying power to inflation. Invest to protect, invest for income, invest for growth.
 

·         Take a giant leap of faith… in yourself. Trust your ability to learn, assess a situation, control your emotions, and exercise sound judgment. You’ve already honed those skills in other areas of life; now it’s time to apply them to investing.

Throughout history governments have taxed, spent other people’s money, and made stupid rules. People have succeeded anyway, and you can be among them. Our free weekly newsletter, Miller's Money Weekly, can help guide you through the traps and pitfalls of personal finance and help you navigate toward a retirement on your own terms.