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Managing High Inflation in Retirement

December 29, 2021 by Jacob Sensiba Leave a Comment

Inflation is high. We all know that. I’ve been writing about it for months and it appears that it’s here to stay. With all of that said, I saw a question the other day about how to manage the high inflation when you’re in retirement, and I thought it was a good topic to talk about today. So we’re going to discuss high inflation in retirement, how it’s impacting retirees, budgeting strategies, investment strategy changes, and if inflation will be an ongoing concern for retirees.

Inflation right now

It’s high…no surprise to anyone. In January it was 1.4%, in April it was 4.2%, in July it was 5.4%, in October it was 6.8%, and in December it was 5.9%. That’s historically high. The highest it’s been in 40 years. Will that stay, only time will tell and we’ll get into that later.

How is it impacting retirees?

Things are getting expensive, so when you set a budget at the beginning of your retirement you account for the current price of the things you need. You should also account for increased costs of items as time goes on because there can be big or small increases…either way, prices costs will go up.

Groceries and energy are two prime examples of things that have gotten more expensive recently. So when those things went up in price, it probably pinched people’s budgets, and/or pushed forward costs that probably weren’t expected for several years. Odds are, they’re spending more money now on food and energy than they anticipated. Hopefully, people have been able to make adjustments already.

Budgeting Strategies

There really aren’t a lot of tips I can give you. The best thing I can really say is to cut costs where it makes sense to account for things that are now more expensive. The other tip, though this is more of a gamble, is to not make any changes now and make changes in the future when inflation comes down.

Investment Strategies

With your investment, you’ll need to reallocate some assets. I wouldn’t take any money out of stocks. What I would do is take some money out of your bond investments and put it into precious metals. The FED said that they plan on hiking rates three times in 2022. Bond prices will go down when interest rates go up. Increasing your stock allocation or putting some money in precious metals could be a good way to combat inflation.

High inflation here to stay?

No, I do think it will be here until the FED hikes rates, but my reasoning for that has to do with what happened in 2018. If the FED can raise rates without putting a cork in the recovery, then I think there’s a possibility that inflation and the federal funds rate will stay elevated until the bubble pops.

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

End of Year Money Moves

December 22, 2021 by Jacob Sensiba Leave a Comment

We’re getting close to the end of the year so I think it’s a good time to review how to set yourself up for success for next year. Here are some end-of-year money moves you should make.

Year in review

I think it’s important to reflect on the year that has been – financially, emotionally, physically, and spiritually. If you’re not evaluating your progress as a human, I think you are doing yourself a disservice.

We’ll stick with the finance side of things in this article. Did you achieve the goals you set out to reach when the year started? If you had a goal to pay off debt, did you? If you had a goal to increase your savings rate for retirement, did you?

I think that’s important for two reasons. One, you review your progress to see if you were successful or not. Two, you use this year’s progress to help set your target for next year. If you achieved your goal, you can set a higher target for next year. If you didn’t, maybe keep the same goal and try to hit it next year.

It’s also a good idea to review your investment/retirement portfolio at the end of the year. If you’re investing your retirement savings, there are some sectors or asset classes that performed better than others throughout the year. If that’s the case with your portfolio, the percentage you’re at now is probably different from where you started.

Typically, I like to leave it be, but if you’re in a stage of life where you have to be more selective, then being overweight in a risky asset is probably not a good idea. When you review your investment portfolio make sure that you’re still in good shape with regard to your risk tolerance and time horizon, and you’re pleased with your account’s performance.

Set goals for next year

After you review your progress from this year, set your goals for next year. If you saved more than you set out to at the beginning of the year, use the ACTUAL savings as your goal for next year. If you paid off some debt, redirect toward another one.

What happens if you don’t have any more debt? Congratulations! Then make sure your emergency savings are adequate. If it’s sufficient, beef up your retirement savings or something else you’re saving for.

When you’re making your money moves for next year, make sure you’re designating time to assess your progress throughout the year.

Disclaimer:

How to Set Investing Goals

December 15, 2021 by Jacob Sensiba Leave a Comment

Saving money for the future is important, but I believe it’s even more important to invest that money and make it work for you. With that said, you can’t just start investing. You need to lay some groundwork first, you need to have goals in mind, and you have to be intentional so that when things get difficult, you stick with the plan instead of abandoning it during the discomfort. Today, we’re going to talk about how to set investing goals.

What kind of goals are there?

There are typically three-goal time horizons: short-term, medium-term, and long-term. A short-term goal is something you plan on achieving in 2-10 years. Saving for a down payment is a pretty common goal that fits into that window. A medium-term goal is 10-20 years. Saving for educational expenses for a child fits into that window. A long-term goal is retirement or anything else that’s 20+ years down the road.

These time windows are my opinion, though I think they’re pretty close to conventional opinion. Also, there are more goals than the ones I listed above.

How to think through your goal-setting

There are three things to keep in mind when you set investing goals (not to mention figuring out the goal itself). How much time do you have? Is this a short-term, medium-term, or long-term goal? Do you have time to take some risks or do you have to play it safe?

Speaking of risk…what are you comfortable with? Usually, this goes hand in hand with how much time you have. A short-term goal like saving for a down payment will need to be invested conservatively, if at all. In this scenario, you’ll have a set price you’re saving for so you can’t take a chance that the market dips and your savings fall below what you need it to be at.

Conversely, when you’re saving for retirement, you’ll have an opportunity to be more aggressive (at least in the beginning) because you have time to make back the money that you’ve potentially lost.

The last part of positioning your portfolio according to your goals is your comfort level/investor psychology. Time horizon and risk tolerance are small factors here, but it’s more about how volatility affects your mind. If the market drops and you’re panicked, maybe you need to be more conservative.

How to invest based on your goals

Here are some thoughts on how to invest based on your goals. If you’re saving for a short-term goal, like a down payment, I wouldn’t even invest it. UNLESS you’re very confident and you’re an expert in the particular field (though that applies to all of the time horizons).

If you’re saving for a medium-term goal, like saving for college, here’s what I’d do. You can be a little aggressive in the beginning because you have time to earn some money back. As you get closer to the end of your window, you’ll need to be more cautious. Maybe start 50/50 (stocks/bonds) and as you get closer, either get out of the market entirely or something like 10/90 or 20/80.

For your long-term goal, you’re able to be more aggressive for a longer period of time. 90/10, 80/20, 70/30, 60/40 all work great here. It depends on what you’re comfortable with. Same as the last one, as you get closer to the end of your window, you need to shift your allocation to be more conservative.

Keep in mind, these are blanket recommendations. I don’t know your situation, so you need to talk to a professional first before you set investing goals and make investment decisions.

Disclaimer:

Financial Resolutions: Debt, Savings, Investing, Real Estate, and Crypto

December 8, 2021 by Jacob Sensiba Leave a Comment

The new year is right around the corner so I thought it fitting to layout some resolutions for a few different financial topics. Here are financial resolutions for crypto, investing, real estate, savings, and debt.

Debt

Pay down or pay off your debt. If you have credit card debt, make it a goal for next year to pay it off completely. The interest rates that credit card companies charge are so brutal. Getting rid of credit card debt would relieve a lot of stress and save you a lot of money that you’re wasting on interest. Not to mention, whatever you’re currently paying towards your credit card can be used for something way more productive.

If all you have is a mortgage, make extra payments. If you have no debt, congratulations! Try and save more so there’s no chance of you going into debt again.

Savings

Would you like to buy a house next year? Save for your down payment. The bigger your down payment is the smaller your responsibility will be; in terms of monthly payments and in terms of total money owed. Especially if your down payment is 20% or more. If that’s the case, you don’t have to pay mortgage insurance (AKA PMI).

If a down payment isn’t something you need to save for, increase your savings rate for retirement. Or set yourself up to cover some unexpected expenses by creating an emergency fund. Do some math, establish a goal number (emergencies, down payment, retirement savings), and then create a plan to save and hit that number.

Investing

For the most part, investing will take place in your retirement account. And for most people, the amount of time you have until retirement is a couple of decades. With that said, you can be a little more aggressive with your investments.

If this description doesn’t fit you, then figure out what works for you. Determine your time horizon, risk tolerance, and what you’d be able to tolerate in terms of short-term losses. If you’d like to get a good idea about what your preference is, take our risk tolerance quiz.

Real Estate

This one is a little challenging because it’s not like you’re going to move once per year. Also, investing in real estate isn’t for everyone. So I’m going to try and hit a few groups with this one.

Buy a new home. If you need more space for your growing family, you got a new job that requires relocation, you want to be closer to your church or family members, then make a move.

Make improvements to your current home to increase the value of your home or to make better use of the space. It can also improve tax credits especially if you use sustainable materials like solar panels. Either way, the improvement has a positive effect on your living situation.

Most people can invest in real estate, they just do it differently. Some people are going to invest in physical properties and some can invest in Real Estate Investment Trusts (REIT). Either way, you need to be picky (like all investments) so you get a good return on your money.

Crypto

This applies to everything in this post, but especially here…do your homework. I like crypto. I think there are investment opportunities, but I also think there’s a possibility it all collapses. I like the technology it’s created on, but I don’t know how it’ll transform and what the adoptability will be. Invest only what you can afford to lose is my best advice. With all that said, make financial resolutions to get more educated about cryptocurrencies and the blockchain.

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Big Tech Moving Into Finance

November 24, 2021 by Jacob Sensiba Leave a Comment

Big tech wants a bite of the financial services pie. I think technology and finance go hand in hand, but I also think it’s mostly a one-way street, in terms of benefits. Technology has definitely given the financial services industry an upgrade, but the finance industry tends to think of big tech as a threat. Why is that? Today, we’ll take a look at big tech, how they’re changing financial services, and if those big banks actually have something to worry about.

What do you mean by “Big Tech”?

The names you know off the top of your head. Apple and Google to name two, but there are other players that don’t get as much publicity. Cloud storage from Amazon and/or Microsoft. Software companies like Oracle. Chipmakers like Nvidia. Data companies like IBM. There are a lot of moving parts and it’s no surprise, everything uses technology. What’s different about financial services is the regulation, so adoption of new technologies is typically slower.

How tech changed finances

From a consumer standpoint, banking is easy. Checks are deposited directly into your bank account. You use your bank’s app to review expenses and deposit any real checks you may have. Practically all bills are able to be paid electronically. Not to mention you can automate bill payments and transfers. Also, if you want to save for retirement or invest some money, there are several companies that can do it all online (though we always advise you to speak with a person for advice).

Big tech in finance moving forward

Big tech is already offering some financial products. Google has Google Pay, Samsung has Samsung Pay, and Apple has Apple pay. Apple is also working on a Buy Now, Pay Later (BNPL) offering, but nothing is out yet.

Big tech will be able to compete with legacy financial services companies because they have a competitive advantage. They don’t have the regulatory oversight that current companies do and they have a customer base (and their data) that they can leverage with new offerings.

Parting thoughts

Do I think several big tech companies will come out with financial services offerings? No. I think there will be a select few that come out with some, but I don’t think it’ll be the scale of Wall Street, for example. I think it would behoove big tech and other large companies to remember that being a conglomerate doesn’t work right now. Just this year, there were several companies that split their business up, based on industry (like GE). Could the conglomerate model come back around? Absolutely, but I don’t think now is the time.

Should You Be Investing in Shiba Inu?

November 8, 2021 by Tamila McDonald Leave a Comment

During the past year, cryptocurrencies like Bitcoin and Ethereum have reached new heights. Additionally, Dogecoin – the most prominent meme coin around – garnered a lot of attention, ultimately having a relatively tumultuous year. Due to Dogecoin’s rise into the spotlight, many wonder if Shiba Inu – a newer coin – is a worthwhile investment. If you’re considering purchasing Shiba Inu, here’s what you need to know.

A Word About Cryptocurrency

Before worrying about whether Shiba Inu is worth investing in specifically, it’s important to understand the risks involved in putting money into any cryptocurrency. While Bitcoin and some other older coins have seen values rise, the overall crypto market is incredibly volatile. Values rise and fall rapidly, at times with seemingly very little reason for the change. As a result, money can be made or lost in mere moments, often without much warning.

Additionally, it isn’t clear how future regulations may impact the market. Since long-term investing is often based on the desire for long-term growth, changes to laws could significantly alter the viability of cryptocurrency as an investment.

Finally, cryptocurrency scams are commonplace. While Shiba Inu isn’t necessarily a scam, it’s crucial to take any new coin with a grain of salt. Without some due diligence, the odds of making a mistake go up dramatically, potentially causing significant losses.

The Pros and Cons of Shiba Inu

The Pros

One of the points Shiba Inu has going in its favor is a sense of likability. The meme-based coin has an edge on the branding front, making it feel grassroots and accessible. That perception can make Shiba Inu more attractive to certain investors, potentially boosting its potential.

Shiba Inu is also part of Shibaswap, a form of peer-to-peer-style decentralized exchange that gives investors the ability to trade a select number of coins without a traditional platform. With Shibaswap, generating yield and tracking returns are possible, leading some to take great interest in the coin.

The Cons

On the downside, Shiba Inu is technically a Dogecoin parody. Some of its popularity is placed purely on investors who appreciate meme culture and not necessarily because the coin has any real value or long-term potential. As a result, interest in Shiba Inu can be a bit fickle, ebbing and flowing quickly.

Additionally, some of the interest in Shiba Inu is based primarily on familiarity. Some investors attempted to get Shiba Inu added to Robinhood, leading to some media attention that caused a value increase. However, that coverage had nothing to do with the merits of the coin.

Unlike Bitcoin, Shiba Inu currently has no meaningful applications outside of the investment space. Mainstream companies don’t allow shoppers to use the coin as payment. Additionally, since there is nothing functionally unique about Shiba Inu, the likelihood companies will choose it as a payment option over others is slim.

Shiba Inu also isn’t in short supply. Part of Bitcoin’s appeal was that the number available is relatively small. With Shiba Inu, there are one quadrillion coins, so it doesn’t have a sense of scarcity on its side.

Finally, there has been a lot of volatility surrounding Shiba Inu. Most investors are only holding the coin for weeks, indicating that many don’t view it as a long-term investment. As a result, there’s a good chance many will move away from the coin rapidly if something else catches their attention, potentially leading to significant value declines in a short period.

Should You Be Investing in Shiba Inu?

In the end, determining whether any particular cryptocurrency is going to be a success is challenging at best. Shiba Inu does have a few things going for it, particularly when it comes to widespread recognition and its meme-friendly positioning. Plus, while it isn’t a standout functionally, it operates like many other coins, so it isn’t falling behind when it comes to use potential.

However, companies aren’t actively behind Shiba Inu as a payment mechanism, and some platforms like Robinhood aren’t supporting Shiba Inu trading at this time. That could hold back the coin, essentially limiting its potential.

Additionally, the large supply of Shiba Inu coins prevents a sense of scarcity. As a result, prices may not reach the same heights as options like Bitcoin, which doesn’t necessarily work in investors’ favor.

Inherently Higher Risk

Finally, cryptocurrency is inherently higher risk than many investment alternatives. New coins regularly emerge, drawing attention away from those that were trending in the past. Even without those, the sheer number available means there isn’t any way to determine which ones will gain broader traction outside of the crypto investing sphere. Until companies start welcoming more as a form of payment, it’s incredibly difficult to figure out which will rise and which will fall.

Ultimately, only you can decide if Shiba Inu is worth buying. If you do your research and are comfortable with the risks, then adding it to your portfolio shouldn’t automatically be off the table. You’ll simply want to figure out what’s right for you. That way, if you move forward, you’ll know what could potentially occur.

Do you think investing in Shiba Inu is a good move? Have you already bought in and want to tell others about your experience? Share your thoughts in the comments below.

Can Public.com Help You Build The Best Stock Portfolio For Your Goals?

November 1, 2021 by Tamila McDonald Leave a Comment

Today, investing is often viewed as a pathway toward financial stability and long-term monetary growth. However, it hasn’t always felt like an accessible option. At Public.com, the company sees things differently. Not only does it strive to make investing something nearly anyone can do. Public.com also aims to help investors make wiser choices. If you’re wondering if Public.com can help you build the best stock portfolio for your goals. Here’s what you need to know.

What Is Public.com?

Public.com – formerly Matador – was founded in 2017. It’s a trading app that allows investors to access stock and ETFs using a fractional share approach. People can buy portions of a stock or ETF instead of entire shares. Thus, making it possible to invest as little as $1 at a time.

Like many similar online brokers and trading apps, Public.com is commission-free. Additionally, there are no account minimums or monthly fees.

However, unlike other brokers, Public.com doesn’t earn money using payment for order flow. Which is a somewhat controversial practice that’s recently been targeted by legislators and scrutinized by the SEC. Instead, it relies on a tipping feature. Users can decide to give Public.com a tip after they execute a trade. Thereby, leaving investors in full control.

Public.com also includes a social feature. Portfolios on the site are public. This way other users can see the activities of all member investors. Additionally, they can communicate with each other. Chat groups are available that can help investors learn more about why various members made certain trade decisions. Plus, it’s possible to create new chat groups to have discussions with family members, friends, or other community members.

Most of the social information is displayed using a social media feed-based approach, making it highly familiar. Along with member posts, the feed showcases information about companies, recent IPOs, and more.

What You Can Invest in on Public.com?

Public.com allows members to invest in a range of stocks and ETFs. Whether investors want a piece of a publicly-traded company or prefer the ETF approach for at least a bit of inherent diversification, they have options. Plus, investors can purchase fractional shares to get started, allowing them to snag a piece of their preferred investment vehicle for as little as $1.

Additionally, Public.com offers some crypto assets. For people interested in crypto, this can make investing simpler by centralizing all of their activity, keeping it on a single platform.

Unique Public.com Features

Aside from the tipped-based financial model and the highly social information sharing strategy, Public.com has some unique features.

For example, members can organize their portfolios visually, separating out their long-term investments from the rest. Once a stock or ETF is in the long-term category, if a user attempts to trade it within one year of acquisition, they’ll get a reminder that their original plan was to hold it longer.

Additionally, Public.com makes learning easy. When viewing an investment option, users can tap on key terms to see a definition. It’s a straightforward way to broaden investing-related vocabulary, ensuring users fully understand what each piece of information means.

Finally, Public.com offers more customer support contact options that you see on many other platforms. Users can use a chat feature to get assistance from a real team member, not just a bot. There are also six other contact methods available, giving users the ability to choose how they want to communicate with a company representative.

Can Public.com Help You Build the Best Stock Portfolio for Your Goals?

Ultimately, Public.com is a robust platform for investors looking for an affordable option for purchasing stocks, ETFs, and crypto-assets. The tip-based approach means the app isn’t a part of the payment for order flow controversy. Additionally, it leaves investors in control, allowing them to contribute as much or as little to the company financially as they choose.

The social approach is also intriguing. While there is no guarantee that advice given by anyone on the platform is sound, it is an interesting way to learn more about investing. Plus, it can make trading feel less intimidating or confusing as there is a large community that’s willing to speak with other members to answer questions or simply talk about their decisions.

Additionally, while Public.com isn’t the only place offering fractional shares, the fact that it’s available works in its favor. Being able to invest with as little as $1 is an attractive option for anyone just starting out, particularly those without a ton of income to direct towards investments.

If you’re looking for a commission-free, no-fee platform that supports fractional shares and would appreciate the social elements, Public.com is definitely worth considering. Just keep in mind that any advice shared by users should always be taken with a grain of salt and that doing your own research is still a must. That way, you can make choices that are ultimately best for you.

Have you used Public.com? Did it help you build a better stock portfolio? Share your thoughts in the comments below.

What Are NFTs And Are They Worth Investing In?

October 26, 2021 by Susan Paige Leave a Comment

Several trends are rising in the cryptocurrency investing industry. And a good number of them are showing signs of becoming the cryptocurrency world’s next big thing, following Bitcoin and other main digital currencies’ footsteps.

One of the technologies quickly taking shape as an excellent passive investment method in the ever-evolving blockchain world is NFTs (Non-fungible Tokens). Do they sound familiar? Well, likely, you’ve already come across NFTs. It’s especially true if you’re one of those who’ve invested so much time online in 2021 due to the pandemic-related restrictions worldwide. That’s because they’ve been featured by many online resources, including news platforms.

[Read more…]

What Currently Present a Risk to Markets?

September 22, 2021 by Jacob Sensiba Leave a Comment

Where is the market going? What kind of risks do we need to be aware of? There are three or four things to pay attention to right now. The FED, interest rates, inflation, Covid, China, the government, and geopolitics. Do any of these present a risk to markets?

Okay, more than three or four things, but the first three can all be lumped together. Interest rate policy is enacted by the FED and what happens with interest rates has a direct impact on inflation. Furthermore, the government also has a chance to impact inflation.

And I apologize if we bounce around a little from topic to topic.

The FED, Interest Rates, Inflation

The government and the FED have a lot of control over what inflation is going to do. We had a lot of liquidity injected into the market because of the pandemic, and there’s a very good chance we’ll see more of that in the near future.

A $3.5 trillion bill is circulating through Congress right now. If this bill gets passed, we’ll have a lot more liquidity injected into the market. That’s likely to be a large tailwind for inflation (which is already running much hotter than expected). If the FED continues to provide an accommodative monetary policy, we’ll see inflation get out of control, and they’ll have to increase interest rates much sooner than they had planned.

Covid

Covid is still hanging around. 75% of the country has received at least one shot and now the administration is pushing booster shots. This is even after the CDC and the WHO have insisted on holding off on a third shot until less fortunate countries have a chance to get more of their first poke. The numbers need to level off soon or I fear lockdowns may rear their ugly head, and we all know how much the economy liked that the first time around.

China

China is a new story. Specifically, Evergrande. The ginormous real estate company is on the brink of bankruptcy. Comparisons have been made to the collapse of Lehman Brothers during the GFC (great financial crisis). We’ll see what happens and if the Chinese government decides to step in. Ripple effects through the global monetary system are possible.

Geopolitics

The last story is geopolitics. This has to do with the deal the US and Australia struck to help the Australian government build nuclear-capable submarines. It angered France because they already had a deal with Australia to help them build submarines (not nuclear-capable though). Britain feels pretty good because they helped broker the US/Aussie deal. Most likely, this will end up being only noise but could present a risk to markets. Something to keep your eye on.

Disclaimer:

What To Expect From A Full Service Precious Metals Dealer

September 16, 2021 by Susan Paige Leave a Comment

Many people choose to invest in precious metals for a host of reasons. Whether you’re looking to diversify your wealth, protect yourself from inflation or currency devaluation, or simply make some money on the side, there’s no shortage of information out there about how and where to buy precious metals. [Read more…]

Inflation right now

How is it impacting retirees?

Budgeting Strategies

Investment Strategies

High inflation here to stay?

Related reading:

Disclaimer:

Year in review

Set goals for next year

Related reading:

Disclaimer:

What kind of goals are there?

How to think through your goal-setting

How to invest based on your goals

Related reading:

Disclaimer:

Debt

Savings

Investing

Real Estate

Crypto

Related reading:

Disclaimer:

What do you mean by “Big Tech”?

How tech changed finances

Big tech in finance moving forward

Parting thoughts

Related reading:

A Word About Cryptocurrency

The Pros and Cons of Shiba Inu

The Pros

The Cons

Should You Be Investing in Shiba Inu?

Inherently Higher Risk

What Is Public.com?

What You Can Invest in on Public.com?

Unique Public.com Features

Can Public.com Help You Build the Best Stock Portfolio for Your Goals?

The FED, Interest Rates, Inflation

Covid

China

Geopolitics

Related reading:

Disclaimer: