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How To Ask for Reimbursement of Travel Expenses

March 3, 2021 by Jacob Sensiba Leave a Comment

At this point in time, business travel is less common than it used to be. I have a hunch that it will never return to pre-pandemic levels, as employers found it easier and less expensive to accomplish this through Zoom. It’s still important to know the ins and outs. Today we will cover how to ask for reimbursement of travel expenses.

What are travel expenses?

Travel expenses occur when an employee travels for business purposes. A business trip can include conferences, business meetings, client meetings, training, job fairs, etc. One thing about travel expenses, is you need to be sure you’re getting the best jet card program. You want to get as many points or cash back rewards as possible.

Travel expenses include lodging, food, rental car, tips for servers and bellhops, etc. Most organizations that require employees to travel on a regular basis have policies in place.

If an employee is traveling for an extended period of time or is at a particular location for an extended stay, the business may also include reimbursement to pay for your family to visit.

When entertaining a client or a business partner, there are limits on entertainment expense reimbursement, so make sure you check your company’s guidelines so you don’t breach that threshold.

How do employees pay for travel expenses?

Company credit cards, personal credit/debit cards, cash, or allowances given by the employer.

How to ask for reimbursement of travel expenses

If the corporate policies are unclear about the process, write a letter first. Before you go on a trip or take a client out for lunch, request the payment of the expense, or at least ask for some information about what is covered, what isn’t, and what the limits are. Establishing communication upfront is very important.

Per diem, aka travel allowance or an expense account, is recognized by the IRS. Per their guidelines, your expense report is due to your employer (usually HR) within 60 days. The report should include dates, location(s), and receipts.

If you have any allowances or advancements that haven’t been used or can’t be justified as a business expense, then you must return that to your employer. If you don’t return it, that money can be classified as taxable income.

Conclusion

As I said in the opening, I don’t believe business travel will return to pre-pandemic levels, but it’s important to know what travel expenses are and how to ask for reimbursement of travel expenses.

Review your company’s business travel policy for more information, and if your company doesn’t have one, speak to them about what’s covered, what’s not covered, and any limitations.

COVID-19 Crisis: Is Our Money Safe in Banks?

February 19, 2021 by Susan Paige Leave a Comment

The future is uncertain, and this uncertainty can cause you to wonder if your money in the banks is safe or not during an economic downturn.

The coronavirus pandemic has caused so many concerns that we otherwise wouldn’t have. In some cities and countries, the lockdown has caused panic among citizens and made them stock up on food, toilet papers, medicines, and cash. This is what an economic crisis will do to people around the world. [Read more…]

Signs That You May Need a Financial Advisor

February 17, 2021 by Susan Paige Leave a Comment

The key to financial freedom is planning your financial future wisely. [Read more…]

Red Flags When Choosing a Financial Advisor

February 17, 2021 by Jacob Sensiba Leave a Comment

Finding a qualified, trustworthy financial advisor can be very tough. Not all of them are created equal. What requirements and/or rules they follow are not the same. There are some financial advisor red flags you need to be aware of when shopping. We’ll explore those in today’s post.

How was the first meeting?

What kind of vibes did you get from the person you met with? Did you have a good gut feeling or a bad gut feeling? Was there good rapport? Did the conversation flow naturally? Did they answer your questions?

These are all great questions to reflect on after you met with your first prospect. You have to trust your gut. If the conversation was good and flowed naturally, but you just didn’t get a good vibe from them, shop elsewhere.

If you think they were walking a line of honesty, whether they held back on telling you things or they made contradicting statements, I would either address it directly or walk away. This is your financial future we’re talking about. You have to make the right decision.

How are they governed?

Do they operate using the fiduciary standard or are they only required to do what’s suitable? As a fiduciary, the advisor is legally obligated to do what’s in your best interest.

For example, when making investment recommendations, an advisor that operates using suitability is only required to make recommendations based on what’s optimal for your investment objective, time horizon, and risk tolerance.

With the fiduciary standard, they use that same suitability but take it a step further. If there are two options for investment – one charges 1% and one charges .50%, the advisor will use the lower of the two because that’s in the client’s best interest.

What are they offering?

If you meet with a potential advisor and they say that they’ll beat the market, run the other way. If an advisor recommends annuities or variable products, I’d either stress that you’re not interested or move along. These are insurance products and there could be a conflict of interest.

How are communications?

Are they honest with their pay schedule? When you asked them about what they charge, were they clear with their answer? This is important. A wishy-washy answer is enough grounds for you to walk away.

Do they talk a lot or do they take time to listen to you? Advisors that talk more than they listen are often pitching a narrative that they believe instead of listening and creating a plan customized to your needs/wants.

How are they with following up? Does it take them forever to get back to you? An advisor that doesn’t make you feel important is a red flag.

Are they a “yes person”? Do they always agree with you? A key characteristic of good advisors is the ability to correct you or express their opinion about your financial plan. If there’s something that you would like to do, but they don’t think that it’s a wise move based on the plan you created, they need to tell you that.

Conclusion

Are there financial advisor red flags? Absolutely. We illustrated them here. Keep them in mind when you’re shopping and trust your gut. There are fantastic advisors out there, you just have to do a little work to find one.

How To Regain Control Of Your Finances Amid The Pandemic

February 12, 2021 by Justin Weinger Leave a Comment

Who knew the global health crisis would have such a negative impact on personal finances? Close to a year after the coronavirus pandemic started, many people are hanging on by a thread. As if being self-sufficient in America wasn’t already strenuous, reduced hours and unemployment only added to the problem. Government assistance (though better than nothing) is minuscule compared to their rising expenses, leaving many to make poor financial decisions to survive.

Emergency savings and retirement accounts are all but tapped out. Robbing Peter to pay Paul has become the concept for paying bills. Credit cards (that you don’t have the means to repay) seem to be the only way to handle medical expenses, utilities, and groceries. Though these practices provide temporary relief, they come with consequences that will take years to recover from.

Turning Things Around

Though the coronavirus pandemic continues, failure to get your finances back on track now will only lead to more significant problems down the road. As difficult as these times are, you can start taking steps towards turning things around. Continue reading to learn more.

Take Advantage Of Assistance Programs

The stimulus package isn’t the only form of assistance available to Americans struggling amid the pandemic. If you haven’t done so already, look into other financial assistance programs. Whether you’re having a hard time paying your mortgage or you can’t afford groceries for your children, you’ll be surprised to learn that there are several options for those in need. Even if you’ve been turned down in the past, many programs have altered their eligibility requirements to accommodate those affected by the pandemic. The best thing you can do is apply as any assistance is better than none.

Re-Evaluate Necessary Expenses

One of the first things you learn about maintaining financial stability is being mindful of your spending. By reducing or eliminating unnecessary items from your budget, you can free up cash to use for essentials. As hard as you try, however, there are some costs you can’t (or shouldn’t) get around. For example, allowing your car or life insurance to lapse could leave you or your family with a financial burden in the middle of a pandemic.

Though these things are crucial, you don’t have to break the bank to have them. Review your necessary expenses to determine if there are ways to save money. Comparing insurance providers and using tools like a term life insurance calculator could help you find a more affordable policy. Using coupons or sales flyers when shopping for groceries can take quite a bit off food for you and your family.

Start Generating Cash

You may have a hard time finding a full or part-time job at the moment, but there are still opportunities to generate some extra cash. Whether it’s a few bucks or several hundred dollars, it can go a long way in helping you cover expenses, pay down debts, or boost your emergency savings. You can have a yard sale, help seniors in your neighborhoods with odd and end tasks, become a rideshare driver, deliver groceries or takeout, answer surveys, or start a small business.

Consider Downsizing

If you’re in dire straights amid the pandemic, you may need to consider downsizing. Although not an ideal solution, it may be the only way to regain control of your finances. Review the equity in your home and the housing market to determine if selling would be lucrative. If necessary, move in with relatives or find an affordable place to rent. If you have a car you’re still making payments on; perhaps you should trade it in or sell it and use public transportation.

If you’ve made ineffective financial decisions amid the pandemic to survive, you’re not alone. Millions of people felt they had no choice. If you’re going to avoid the substantial consequences that come with making these decisions, now is the time to start. By implementing the strategies suggested above, you can begin the process of regaining control of your finances amid the pandemic and beyond.

Justin Weinger

A married father of three, Justin Weinger works in private equity as a Corporate Finance Manager, he is also an avid blogger and personal finance enthusiast with a strong history of working in the automotive and publishing industry.

Crypto, Reddit, Stock Market Thoughts

February 10, 2021 by Jacob Sensiba Leave a Comment

The last couple of weeks have been crazy in the stock market. With Reddit putting a short squeeze on Wall Street, crypto assets going gangbusters, and speculation about what inflation will do in the near future, there’s a lot to talk about.

Reddit vs Wall Street

Gamestop and AMC Entertainment are the two biggest names when we talk about Reddit investors.

A large number of shorts were put in by hedge funds and other big players on Wall Street. A specific Reddit account “recruited” its following to pile into the two companies named above. This group of “retail” investors drove the stock price up (as well as other investors that caught wind of their efforts).

Those hedge funds were forced to cover their shorts so they didn’t lose more money. The stock price for those two companies plummeted in the following days, but that doesn’t negate what Reddit did – they beat the big guys.

What’s a short?

A short is a type of trade. What you do is you borrow shares of a stock at a specific price in hopes that the stock price will drop. If it does, you buy back those shares at a lower price and collect the difference.

For example, if you bought shares of XYZ company at $20 and the share price of XYZ drops to $10, you would cover your short and earn $10 per share as a return.

It’s not for the faint of heart because stock prices effectively have no ceiling, so you could lose A LOT of money.

Crypto

Cryptocurrencies gained traction over the last few years as investors saw potential. After Bitcoin rose to $20,000 per BTC and crashed, it lost its allure.

Social media brought it back, thanks to Elon Musk. Slight changes in his Twitter bio moved the needle very effectively. Bitcoin is now hovering at $50,000 per BTC. Tesla invested a healthy sum in Bitcoin and will now accept payments in Bitcoin.

I believe other companies will adopt this policy and we will see Bitcoin used for purchases more regularly. There is a place for cryptocurrencies in this world, but it’s uncertain what kind of role it will play.

Short-term Thoughts

I go through quite a bit of research each week to get an idea of what the market environment looks like, what the economy is doing, and where there are risks and opportunities in the market.

With that said, the amount of times I’ve read the word “bubble” is alarming. The comparisons to the Dot Com Bubble and the Great Financial Crisis (GFC) are also a cause for concern.

Pundits are using the word “euphoria” more often.

There are a few things to pay attention to:

The divergence between the stock market and the economy. Typically, near the end of the business cycle, a difference between how the market is doing and how the economy is doing grows. Eventually, things will revert to the mean. That’s to say, the difference between the two will shrink.
Inflation. The Biden Administration is taking a different stance from past presidents. Inflation and overstimulation of the economy were areas of concern. President Biden is taking the other side of this argument, saying that he’d rather do too much, than not enough. Look for increased stimulus and less regard for inflation. If inflation starts to run hot, expect the FED to cool it down somehow.

Conclusion

Short-term policy changes and speculative movements in the stock market have little to no impact on the long-term performance of your portfolio. The one thing that really moves the needle is your behavior and how you respond to the news.

If you keep your long-term perspective in mind and keep your emotions in check, you should fare better than those that don’t.

What Is the Difference Between Strategic and Tactical Asset Allocation?

February 3, 2021 by Jacob Sensiba Leave a Comment

We’ve talked a lot about asset allocation on this platform. It’s my preferred method of investing and is often the one I recommend to my clients. There are different types of asset allocation, though. Tactical and strategic. What’s the difference between strategic and tactical asset allocation?

Asset Allocation

Before we explore the difference between those two, we should define what asset allocation is.

Asset allocation is a simple, but effective approach to investing your money. It takes into account your risk tolerance, investment objective, and time horizon (also known as suitability).

Using those three pieces of information, you divvy up capital to three (sometimes more) asset classes. Those are stocks, bonds, and cash. Other asset classes that can be included in your allocation include precious metals (i.e. gold and silver) and real estate.

For example, if someone has a moderate risk tolerance, an investment objective of using those funds for retirement, and a long term time horizon, an adequate asset allocation could be 60/30/10. 60% stocks, 30% bonds, and 10% cash.

The goal is to balance the risk/reward dynamics in a way that’s comfortable to you as the investor, using those three suitability items as the barometer.

What is strategic asset allocation?

Strategic asset allocation uses a long term approach. Uses your risk tolerance, investment objective, and time horizon to create the optimum asset allocation that balances risk and reward to fit the above criteria.

What is tactical asset allocation?

Tactical asset allocation uses a short to mid-term approach. Requires more flexibility as you will move in and out of securities as they fall in and out of favor. Strong discipline and understanding of markets are required to utilize a tactical approach.

The difference between strategic and tactical asset allocation

For the everyday investor, strategic allocation makes the most sense. It accomplishes what you’d want in any portfolio – it balances the risk and reward, and creates a portfolio that maximizes return potential while minimizing any inherent risks tied to those asset classes. It’s a “hands-off” approach to investing.

For a more experienced investor that doesn’t mind putting in the time and effort required to analyze and understand the market, trends, etc. tactical asset allocation makes more sense. Proceed with caution, however, as market timing can be very risky.

There are two key differences between strategic and tactical asset allocation. Tactical allocation requires more work, more knowledge, and more experience. Tactical allocation also requires the investor to be more disciplined and more tolerant to risk.

Additionally, tactical allocation takes more of a micro view of economics and the markets. Macroeconomists and strategists view investing from 30,000 feet. Tactical investors look at capsize (the size of a company based on shares outstanding and share price), industry, geographic location, etc. What’s performing well, what are the trends, what industry, location, etc. is likely to outperform in the near term.

How to Protect Your Assets When Merging Households

February 1, 2021 by Tamila McDonald Leave a Comment

protecting your assets when merging households

When you and another adult decide to cohabitate. A significant portion of each of your financial lives end up merging. You’ll often share or split household bill responsibilities. In some cases, your assets may become a bit entangled. If you’re worried about protecting your assets when merging households. There are things you can do to maintain the needed amount of separation. Here are some options that may work for you.

Don’t Add Anyone to Your Accounts

With joint accounts, both parties have legal access. While this may not be problematic for living expense-related bills like utilities. If the account is tied to an asset, like a bank account, retirement fund, investment account, or home equity line of credit (HELOC). It could become an issue.

Generally, you shouldn’t add another person to any of your asset-based accounts if you want to keep them protected. That way, no one else has access but you.

Create a Legal Agreement

Usually, when people think of legal agreements for protecting assets, prenuptial agreements are what spring to mind. If you go this route, it is usually wise to work with a legal professional that deals with Minnesota prenup agreements(or prenup agreements in your area). That way, the agreements can be formal and aligned with local law. It allows both parties to formally outline ownership of pre-marital assets, ensuring that, if they ultimately divorce, specific assets go back to the party who brought them into the relationship.

If you aren’t getting married, it may seem like that form of protection isn’t available. However, that isn’t necessarily the case. When you merge households, you can create contracts that operate similarly to a prenup even if you aren’t intending to marry. In these, you would essentially agree to who has legal ownership of what, allowing both parties to protect any assets that matter to them.

If you go this route, it is usually wise to work with a legal professional. That way, the agreements can be formal and aligned with local law.

Define Ownership with New Assets

If you need to acquire a new asset, you and other household members may need to define ownership in advance. This is especially true for assets that are purchased by one person but are made available to the household for use, like furniture, vehicles, or home purchases.

In some cases, you may need to craft legal agreements to protect any of your new assets. For unmarried couples, this may be especially true in states with common law marriage or other cohabitation-related legislation directed at unmarried couples that give the other household member rights to newly acquired assets.

For married couples, whether new assets acquired during the relationship can be protected may depend on local law. Community property states have rules that usually make certain (but not all) new assets jointly owned, even if only one spouse handles the acquisition. However, that doesn’t mean there aren’t options available.

Final Note on Protecting Your Assets While Merging Households

If you aren’t sure about your state’s laws, contact a legal professional. They can help you review the state’s views on the ownership of the asset and provide you with guidance about any steps you may need to take to protect it, suggesting that it is actually a possibility legally.

Do you have any other tips that helped you when protecting your assets when merging households? Share your thoughts in the comments below.

Tamila McDonald

Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.

Moving Back to the House

January 27, 2021 by Jacob Sensiba Leave a Comment

For today’s personal reflection, I’m going to talk about moving back to the house that K and I are currently renting.

K is my son’s mother and we are getting back together. I’m excited to grow with her and to make our relationship into something even better than it was before. But that’s not the point of today’s post. Today we’re talking about moving back to the house that’s being rented.

Current living situation

As a result of K and I getting back together, we had a conversation about where we wanted to live and raise our son. My current place that I’m renting was an easy choice because it’s within two minutes of my work and has a large enough basement that our son can play when it’s cold and/or rainy outside.

We’re moving!

After we had a conversation and I had time to reflect, the better choice is to move back into the house we own together. Our renters are moving out at the end of their lease and mine is up at the same time. I feel more at home in that house and in that city than I do currently. The drive is significantly longer, but I enjoy driving. It gives me time to either get into work mode or get out of work mode (depending on the time of day).

At the house, our son has a yard to play in, there are two playgrounds/parks within a few blocks, and we are near some water. What also played a role in the decision is where our son is going to school. We decided to enroll him in a private school, which makes the location of where we live a little less important.

Besides the drive, the only other thing I don’t like about this house is the basement. It’s a very old home. Over 100 years old, so the basement is very short and uneven.

The short-term plan

What we decided to do is to stick it out. We’re going to live in this home for a few years, pay down some outstanding debt, and save for a down payment. When we’re ready, we’ll look for a new home that checks all of our boxes.

There are some big and exciting changes coming down the line, and I’m very excited to take them on with K.

The FED, The Dollar, and Opportunities

January 13, 2021 by Jacob Sensiba Leave a Comment

My post for today was supposed to be a personal reflection, but in lieu of that, I’m going to lay out my thoughts on the market and the economy. Which includes the FED, the dollar, and inflation. In addition to that, I want to explain where I see risks and opportunities right now.

The dollar

We can expect the Federal Reserve to continue an accommodative monetary policy. They will invest in the fixed income market and they’ll resume the low-interest-rate stance.

If they continue this response to the Covid crisis, the dollar should go down in value. There are some risks and opportunities that arise if that happens.

Gold and cryptocurrencies should increase in value. A devaluing in the dollar is, normally, the right landscape for “alternative currencies” to do well.

International securities, especially emerging markets, do well when the value is priced lower. A large majority of international transactions take place using the USD. The value of their home currency goes up in relation to the USD.

The technology sector also has a negative correlation to a falling dollar. When the dollar goes down, that sector tends to outperform.

If the dollar, indeed, goes down look at these areas for possible investment opportunities.

The FED

As I mentioned earlier, the FED will continue to create an accommodative environment for the economy…until they don’t.

At some point, the recovery will gain momentum. GDP will go up and the population will gain confidence in that recovery. At this juncture, inflation will pop onto people’s radars.

If inflation runs too hot, the FED could possibly stop, or reduce, QE. They could halt the bond-buying program and they could raise rates. If that happens, keep your eyes out for a pullback.

We saw this happen at the end of 2018. The FED started raising rates until they went too far, and we had a 20%-25% decline in Q4. Then they reversed course and began easing again. We had a run-up in the market until March of 2020 when Covid hit.

Long term

I believe tech and healthcare will be the two sectors to watch over the next decade or more. With technology getting more advanced every day, investment opportunities will present themselves in these two areas.

Green energy, especially with the incoming administration, is also an industry with big potential. Technology will play a large role in the advancement of renewable energy.

My biggest concern

And I’ll preface this by saying I’m concerned because I truly don’t know the implications of it. MMT looks as likely as ever at this point.

The favorable stance by the FED plus the democratic party holding the House, the Senate, and the Presidency leads me to believe printing money is going to pop off.

An aggressive agenda to provide relief for Americans struggling because of Covid, a push for expanded Medicare/Medicaid benefits, possible student debt relief, as well as other initiatives.

It appears that reducing the national debt is not a concern. To be fair, it wasn’t a concern for the Trump administration either.

The bill comes due for everyone, and if other countries (namely China) are no longer buying US Treasuries like they were, I do not know how we can fund policies, branches, or even service the existing debt. Only time will tell.

Conclusion

I will close by saying that these are my opinions. Granted, I do a lot of research to come to these conclusions, but what I said above are still my thoughts and not foregone conclusions. Do your own research.

What are travel expenses?

How do employees pay for travel expenses?

How to ask for reimbursement of travel expenses

Conclusion

Related reading:

How was the first meeting?

How are they governed?

What are they offering?

How are communications?

Conclusion

Related reading:

Turning Things Around

Take Advantage Of Assistance Programs

Re-Evaluate Necessary Expenses

Start Generating Cash

Consider Downsizing

Reddit vs Wall Street

What’s a short?

Crypto

Short-term Thoughts

Pundits are using the word “euphoria” more often.

Conclusion

Related reading:

Asset Allocation

What is strategic asset allocation?

What is tactical asset allocation?

The difference between strategic and tactical asset allocation

Related reading:

Don’t Add Anyone to Your Accounts

Create a Legal Agreement

Define Ownership with New Assets

Final Note on Protecting Your Assets While Merging Households

Current living situation

We’re moving!

The short-term plan

Related reading:

The dollar

The FED

Long term

My biggest concern

Conclusion

Related reading: