investing

June 2, 2014 by Kevin Mercadante ·

Why You Should Pay Off Debt Before Investing in Stocks

In another approach to Phase I: The Foundation Phase, Step 4, Pay Off All Consumer Debt, we’re going to emphasize the need to pay off debt before investing in stocks. While that may seem like something of a repetition of our general advice to get out of debt, it actually rates a special discussion when it comes to investing in stocks.

There’s a myth – or perhaps an excellent example of wishful thinking – that it’s possible to invest your way out of debt. That’s a process of investing and growing your money until it reaches the point where it’s greater than your debt obligations. If only that were possible. More often than not, human emotion gets in the way, and the strategy turns into a recipe for failure.
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March 3, 2014 by Kevin Mercadante ·

Why You Should Have an IRA Even if You’re in an Employer Plan

Have you ever heard – or used – the phrase, “I’m covered at work?” It comes in handy for putting off meetings with your Certified Financial Planner™. But if you’re serious about Phase II: The Accumulating Wealth Phase, you probably know already that you should never take cover under clichés. And so it is with retirement. You should have an IRA even if you’re in an employer plan.

If that sounds like overkill, consider the following . . . .
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January 18, 2014 by Michael Gauthier ·

The 10/10/80 Myth: How to Give and Invest With Intention

What’s popular isn’t always right.

Chances are, if you’ve studied personal finance for any length of time, you’ve come across the 10/10/80 budget allocation method. But is it the best for you?

The 10/10/80 method teaches that people should give 10% of their income, save or invest another 10%, and spend the rest – 80%. It is often advertised as a universally-viable method of handling your finances.

And the thing is, it sounds good, doesn’t it? That means it must be, right?

Think again.

While the 10/10/80 method correctly splits personal finance into three major categories (giving, saving, and spending), it inappropriately assumes that people should only give 10% of their income. Similarly, it assumes people should only save or invest 10% – as well as that they should start saving up to 10% right away.
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November 22, 2013 by Michael Gauthier ·

How to Avoid Taking Risks that Might Be Killing Your Returns

Risk is an important factor to consider any time you choose investments. There are a number of risks when it comes to investing, and learning how you can best mitigate those risks now will mean higher returns in the future.

Below are three concepts you’ll need to remember as you’re making investment decisions. Internalize this information, it will serve you and your portfolio well.

1. Understand that diversification is critical.

You’ve heard it said that you should diversify your portfolio. This is one of the easiest concepts to grasp and it is also one of the most important.

Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land. – Ecclesiastes 11:2 NIV

This timeless investing principle has one critical purpose: to eliminate risk. Keeping a portfolio containing a variety of investments smooths out the rough patches in the stock market. It lowers your volatility.
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November 4, 2013 by Michael Gauthier ·

5 Critical Financial Steps Before You Contribute to Your 401(k)

Pensions are a thing of the past. Social security is questionable at best. Why would a Certified Financial Planner™ tell you to wait on investing in a 401(k)?

There’s a simple answer . . . .

Many Americans are trying to do everything at once, and in doing so, they are spreading themselves to thin and not taking care of their immediate financial needs.

Build a Solid Foundation First

Jesus once told a story about a wise man who built his house on the rock:

Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash. – Matthew 7:24-27 NIV

The foundation is a critical component to any structure because it helps the structure stand the test of time. Though many storms may come, the structure stands firm because it is firmly planted in place.
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1. Understand that diversification is critical.

Build a Solid Foundation First

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