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financial planning

Perspective on Market Direction

From time to time we are asked about where we think the market is heading, whether or not another crash or “correction” is imminent and whether or not investing in the stock market is a wise investment. To give a little perspective on this, I want to share a story with you. In January of 1995 I was starting the second semester of my senior year in high school. Like many high school seniors, I was excited for graduation and ready for my learning to be over (oh, the ignorance!). In my senior social studies class we had an assignment. We were to pick a major, recurring news theme that we could track and report on for the entire semester. Naturally, when the time came for us to initially report on the news theme we had selected, I had completely forgotten about the assignment and the due date. In a […]

Pregnant Men and Tattooed Aristocrats

  When you read the title to this article your mind immediately processed the words as unfamiliar and not particularly logical. After all, how many pregnant men do you see and how many tattooed aristocrats do you run into? The title was actually taken from the book, Thinking, Fast and Slow by Daniel Kahneman. I’m currently in the middle of my third time through the book and it seems like each time I read it I gain valuable insight as to how our minds work and how we perceive things. Most notably, these words stuck with me as a way to inform our readers of other financial words and pairings they may encounter and to make readers aware that these word combinations will seem and are illogical. The goal is to help inform readers that should they see some of the following phrases, they should immediately realize that something doesn’t […]

How to Take a Frugal Vacation

Vacations don’t have to be expensive. They certainly can be, but there’s no rule that dictates vacations must exceed a certain monetary threshold in order for the individual to enjoy it. Here are some ideas that readers may consider in order to take much needed vacations, but keep expenses from running out of control. Shop around for the best deals. Some simple research while sitting in front of the TV can pay huge dividends. There are many websites that offer coupons and discounts for stays at various hotel chains, bed and breakfasts, etc. Websites such as Airbnb, VRBO.com, Expedia, etc., offer visitors the ability to search out different homes or condos that individuals have for rent (Airbnb and VRBO.com) or prices on the best hotels in the area (Expedia). Many of these sites have reader reviews that can inform the future traveler about the cleanliness, ambiance and overall satisfaction with […]

A Small Step (and it’s free!)

Quick – can you tell me your net worth? How about the balance on your credit card (okay, cards)?  Your savings account balance? For many folks (okay, face it, most of us) the answer to those questions is only available after a multi-hour session of digging through statements, online accounts, possibly tax returns, and the like.  But it doesn’t have to be that way.  Getting a handle on questions like this doesn’t have to cost a lot of money, when you use free account aggregation tools. One of the first tenets of sound financial planning involves an understanding of where we are right now.  What is our current financial picture?  What assets do we have?  What liabilities do we owe?  What is coming due soon?  What income can we expect?  Without an understanding of where we are, it’s hard to figure just how we’ll move toward our goal, be it financial independence, […]

Forget Your New Year’s Resolutions?

Six months ago I wrote a price regarding New Year’s resolutions. I’d like to follow up to ask whether or not readers have followed through and are making good on the promises they made at the beginning of the year. If you find yourself as one of the individuals that has put together a plan of action and you’re moving forward – good for you! If not, what happened? Understandably, many individuals renege on their promises made at the beginning of the year. Many factors can be the culprit. From not having enough time, not making goals a priority or simply lacking a plan of action, many folks struggle to make their resolutions a reality. So how do we get back on track? Or better yet, how do we even start? The good news is that while making good on the resolutions does take work, the plan of action is […]

Check Your Vitals

Whenever you go into the doctor’s office for a check-up what’s the first thing he or she usually does? The doctor checks your vital signs. Generally, this is heartbeat, blood pressure, breathing, reflexes, etc. Sometimes either the doctor or the nurse practitioner will have a questionnaire asking various questions such as number of drinks per day, whether or not you smoke, and any allergies – to name a few. Most individuals give this information without thinking twice. Most of the time, the answers we give don’t change. So why does the doctor keep asking the same questions every time we have an appointment? The answer is because if one of these answers does change (such as an irregular heartbeat or high blood pressure) this changes the potential diagnoses and outcome. This is why it’s important in your financial planning to always check your vitals. In other words, even though you […]

5 Things to Check on Your Homeowners Policy

Just because an individual has a homeowners policy or renters insurance doesn’t mean that they are covered for everything. Sometimes individuals assume that because they have insurance, they don’t need to worry about checking into specifics. However, without understanding what may or may not be covered, in the event of a claim, it’s better to know beforehand rather than adding insult to injury and finding out there wasn’t coverage. Flood coverage. In most cases this is excluded on a homeowners policy. Coverage can be obtained separately through a broker found here. Additionally, many policies exclude water or sewer back-up. Individuals concerned about water/sewer back-up can generally get an endorsement for this coverage added to their policy. Trampolines and pools. Individuals that have a trampoline or a pool (or recently acquired these items) should notify their insurance carrier immediately. Some carriers will specifically exclude any liability claims resulting from injury or […]

Sometimes it’s Not a Good Fit

Whether you’re the prospective client working with a financial planner or the planner working with a prospective client, sometimes for whatever reason the relationship doesn’t make sense. The purpose of this post is to help prospective clients and planners in deciding whether or not a client/planner relationship is worth pursuing or maintaining. First, let me start from the perspective of the client looking for a financial planner. Initially, as the client you’re going to want to look for some of the minimums every financial planner should be doing. The first is the CFP® designation. This means that the planner has at least a minimal amount of financial planning education and had passed a rigorous exam. Next, make sure the planner is a fiduciary. This is not optional. This means that the planner is legally required to act in your best interests always. Additionally, make sure they are fee-only. This means […]

Information on 457(b) Plans

The 457(b) plan, sometimes known as a deferred compensation plan is a retirement plan that is generally set up by states, municipalities, colleges and universities for their employees. These plans have some similarities to their 401(k) and 403(b) counterparts, but they also have some differences that individuals with access to these plans may find advantageous. First, let’s look at the similarities. The 457(b) allows the same deferral limits as a 401(k) or 403(b). These limits for 2016 are $18,000 annually for those under age 50. For those age 50 and over, the deferral limit is $18,000 plus an additional $6,000 catch-up for a total of $24,000 annually. 457(b) plans may allow for pre-tax or Roth contributions. Individuals can choose among a variety of funds that the plan offers. At age 70 ½ the plans will require RMDs (unless still employed). At retirement or separation from service, individuals are generally allowed […]

A Note for New Advisors

This post is for an advisor just starting out in their career. Their work could range from working for a large broker-dealer, to a small financial planning firm with a few employees. The main point of this post is to give the advisor reading it some hope and inspiration. Having had experience working for both a large broker-dealer and a small firm (here at BFP) my hope is to give some advice thoughts as the advisor shapes their career. First, you are in one of the greatest positions in your career. You have the choice of determining how you want your career path to look. Determine the path and what type of financial professional you want to be moving forward. Identify if you are a hunter or a farmer. If you decide to be a hunter, you will spend the rest of your career “going for the kill”. This means […]

A Risk Management Checklist

Although many individuals have various risk management policies in place, sometimes those policies get brushed aside and every once in a while the dust needs to be wiped off of them and perhaps some updating needed. Here’s a checklist to consider the next time you review your risk management strategies. Auto Insurance – Review your coverage to make sure it’s still adequate. Liability limits of at least $250,000 should be the norm. Limits of $500,000 up to $1 million are better. If you drive an older car, consider raising your comp and collision deductibles or eliminating them altogether to save on premiums. Upside down on your car loan? Consider gap insurance. Better yet, don’t have a car loan. Home Insurance – Make sure your home is insured to its reconstruction cost. This is the cost to rebuild your home using today’s prices for materials, labor, etc. It is NOT the […]

5 Ways to Handle a Falling Market

Given the recent market volatility and the uncertainty that comes with it here are a few things to consider to reduce potential stress. Some individuals can perhaps make the best of a rocky situation. Do nothing. Before reacting or making a decision that could affect your returns and income in the future, take a moment to think about the situation. Is it as bad as it seems? Is it just like the previous market dips? What happened afterwards? If you’ve decided on the correct asset allocation for your portfolio then expecting market dips should be the norm, not the exception. Revisit your goals. Remember the reason why you’re investing in the first place. Is it for retirement and you’re in your 30s? Is it for a college education and you have a 6 month old? Is it for retirement income and you have a family history of longevity? This point […]

Tips for Tax Time

Given that it the start of tax season and individuals will be gathering and preparing their 2015 tax return information, I’d thought I’d put together some basic tax tips. Individuals may consider thinking about these items in order to have a smooth and (hopefully) stress-free 2015 tax season. Additionally, I’ve included a link to our 2015 Tax organizer. Please feel free to use it at your convenience to get your “tax ducks in a row”. Furthermore, please let us know if you’d like us to prepare and file your taxes for you. Many current clients have found Blankenship Financial to be cost effective and efficient compared to other big-named tax preparation services. As Enrolled Agents both Jim and I are well qualified to handle most tax matters and returns. And now with the tax tips… Beware the non-tax man cometh! Each year we field calls from clients and prospective clients […]

Why People Don’t Trust Financial Advisers (and Used Car Salesmen)

Based on some recent experience I’ve had in trying to purchase a vehicle, I thought I’d spend some time on helping advisers new to the industry trying to build their businesses the right way. Additionally, it may help some advisors who are or were being taught the wrong way to deal with clients and prospective clients. Perhaps this post will be better understood if I share my recent (and unsuccessful) experience trying to purchase a different vehicle. Over the last month I’ve inquired both private sellers and dealerships regarding certain vehicles they had for sale. Of the many features and benefits available, I’ve made clear (at least to the dealers) what features and benefits are important to me. Like many car buyers, I am looking for good gas mileage, reliability, and affordability. What I am not looking for is pushy salespeople, sales pitches and closing techniques. Nevertheless, it’s what I’ve […]

Without Action, Resolutions Don’t Matter

Given the start of the New Year it seems almost cliché to write a blog post about resolutions to make for 2016. While making resolutions is not a bad thing, I thought I’d spend some time talking about an arguably more important aspect to resolutions; and that is taking action. To help make some sense with the article I thought I’d share a personal experience. When I was in college I was considerably overweight. Between my junior and senior year I lost quite a bit of weight – about 75 pounds. I was never overweight growing up; I had just let poor eating habits and a sedentary lifestyle get the best of me. After the weight came off, several friends and family members asked me what I did and what my secret was. Really, there was no secret. It was simply eating less and exercising more. However, I became infatuated […]

Three Year-End Financial Moves

As 2015 comes to a close here are a few things to consider so you can make the most of your money for 2015. Take full advantage of your IRA contributions. For those age 50 and over, you’re allowed $6,500 and if you’re under age 50, $5,500. It may also be of benefit to see if you qualify for a deductible IRA contribution or if contributing to a Roth IRA makes sense. Make the maximum contribution to your employer sponsored retirement plan. Granted, there may not be much time left in the year to do this, but there is plenty of time to do so for 2016. Many companies have access to their plans online and employees can change contribution amounts when necessary. If you’re not already doing so, consider saving at least 10 percent of your gross income. Aim for 15 to 20 percent if you can. Pay yourself […]

The Power of Compounding

Many individuals understand the power of compound interest. They understand that compound interest means money or interest earned on interest received. That is, if I earn 5 percent interest annually on one dollar, in one year I’ll have $1.05, but in two years, I’ll have $1.1025, not $1.10. Granted, this may not seem like a lot; and it isn’t. But on several thousand or hundred thousands of dollars it really starts to add up. This post is mainly for those individuals who haven’t heard of this concept or haven’t started utilizing it to their advantage. Mainly, I’m addressing millennials and college students. Those individuals in the cohort I’m address have one powerful thing on their side: time. We’ve written before on this blog about the power of time and starting to save early. We showed the comparing of someone starting right away either during or right after college and another […]

Your Year End Financial Checklist

As 2015 winds down it may be an ideal time to consider wrapping up (pun intended) some loose ends regarding your finances and getting ready to welcome 2016 financially prepared. Here’s a list of things to consider as 2015 comes to an end. Have you made your maximum IRA contribution for 2015? If you have yet to contribute the maximum to your IRA there’s still time. Individuals under age 50 can contribute $5,500 while those 50 and over can contribute $6,500. Individuals have until they file their 2015 taxes or the 2015 tax deadline (whichever comes first) to make their 2015 IRA contributions. Expecting a Christmas bonus? Your IRA is a good place to put it. Consider increasing the amount you contribute to your 401(k). If you’re not already maxing out your employer plan contributions ($18,000 if you’re under 50 and $24,000 if you’re 50 or older) consider increasing the […]

5 Ways to Avoid Overspending for the Holidays

Tis the season! With just over three weeks until Christmas day arrives there’s still plenty of time to get your Christmas shopping done and be able to do so without breaking your budget. To help individuals manage their Holiday spending, here are five tips to keep your Holidays budget from exceeding your limits. Set a budget. This can be done by setting a budget per family you are giving to, or per child in your home. In addition, you could also set a budget regarding how much you’ll give to charity as well. Stick to your budget. A budget is not any good if it’s not adhered to. Avoid using credit cards to make your Christmas purchases. This gets a lot of folks into trouble and is truly the gift that keeps on giving in the form of excessive interest on the credit card balance. Only use your credit card […]

Advice I Would Give My Younger Self

  Last week marked the 30th anniversary of the date Marty McFly traveled 30 years into the future, from 1985 to 2015. A lot has happened in the past 30 years. Smartphones are part of our regular vocabulary, millions of individuals do their shopping online, and markets are still unpredictable. Naturally, I’ve changed over the last 30 years. And if I had a DeLorean that could take me back in time I’d try to impart some wisdom on my younger self. Unfortunately, the closest thing I have to a DeLorean is a silver mini-van (with sliding rather than gull wing doors) lacking a flux capacitor. My hope is that younger readers can benefit from what I am about to tell my younger self. From the moment you start earning money, save 10% of what you make. Whether it’s mowing lawns or stocking shelves you have the gift of time to […]

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