Mistakes are Expensive: A New Generation Embraces Financial Planning at the Mid-Stage

Financial planning has evolved beyond investing assets. The old model limited comprehensive planning to a wealthy few with high levels of manageable assets. For many people, their first engagement with a financial advisor was when they needed to create a retirement income plan.

The new fee-only model allows financial advisors with experience and knowledge to assist across the landscape of financial life. And a new generation with very different goals is taking advantage of all the elements to create plans that work for them.

  • Retire early, create “work optional,” or work part-time
  • Save for kids’ college
  • Enjoy life now – and save for the future
  • Invest in a second home or rental property

This generation has created high income and realizes they do not have to wait another 20 or 30 years to have the lifestyle they truly want. They understand that financial planning is all about tools, tactics, and strategies that can be deployed in tandem to help them keep more of what they make and actively grow their wealth.

It’s about understanding the options, making the right choices for a highly individual path forward, and solving problems.

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GMB #136: Taming the Cost of College With Brad Baldridge

Properly planning for a college education has become one of the crucial decisions that could define the future of a young adult. This week on Grow Money Business, we’re joined by Brad Baldridge, a licensed financial planner, consultant for college funding, and main podcaster for the “Taming the High Cost of Education.” Brad assists families in preparing and saving for college by offering individualized planning services and insights on the most recent tax, cash flow, and academic strategies. Throughout the episode we discuss many important strategies for reducing the cost of college expenses.

 

 

Show Notes

[01:54] Background – Brad describes how he became interested in college planning and shares some thoughts on why it is so expensive.

[05:23] Sticker Price – Brad explains the evolution of sticker pricing and how it impacts college planning.

[21:24] Process –  Brad walks us through his advising process on how he helps individuals apply, enroll, and select the best school for them.

[27:16] Strategies for Business Owners –  Brad explains what company owners should know about planning and paying for their children’s college education.

[45:36] Common Mistakes – Brad outlines several common mistakes people make when planning for a future college education.

[50:22] Best Choice – Brad explains how to differentiate between applying to a college with a reputable financial aid office versus one that may not be as transparent.

[59:42] Taming the High Cost of College – Brad describes how his college funding company serves its clients.

 

Resources

GMB Ep #97: My Current Thinking on Cryptocurrency

 

A lot has happened in the cryptocurrency arena since we last covered this topic on Grow Money Business. Last week China announced that they are banning all activities in cryptocurrency while a month ago, El-Salvador announced that it would accept Bitcoin as a legal tender. In today’s episode, Grant shares his current thoughts and observations on cryptocurrency-related developments in the United States and around the world.

 

 

Show Notes

[02:46] Recent Events – Grant starts the conversation by briefly explaining the impact of both China and El Salvador’s approaches to using cryptocurrency.

[05:17] Benefits of Cryptocurrency – The benefits of cryptocurrency and why it is an appealing and convenient alternative for existing currency issues.

[07:05] Growing Chinese Economy – Grant compares the pace of China’s economic growth to the USA and reviews its intention of overtaking the USA as a world economic power.

[08:50] World Reserve Currency – Grant dives into the world reserve currency from numerous perspectives, including economic privileges that it opens for certain countries and why the USA needs US dollars as the world reserve currency.

[12:45] China and Cryptocurrency – The cryptocurrency activities in China before the government-imposed ban and Grant’s take on the reasons behind that government action.

[14:46] El Salvador and Cryptocurrency – El Salvador’s economic background and impacts on the country’s social context by encouraging citizens to transact in Bitcoin.

[15:52] Benefits and Challenges for El Salvador – The possible future occurrences related to cryptocurrency, as well as Grant’s take on the probable risks and benefits El Salvador may experience with the decision to accept cryptocurrency.

[18:40] Future Cryptocurrency Approach of Countries – The future measures of the world, and how China’s recent decision has knocked the price of cryptocurrencies.

[21:00] Increasing Credibility and Viability of Cryptocurrency – Grant explains the widespread adoption of cryptocurrency at the institutional level and how it has enhanced the credibility and viability of cryptocurrencies.

[22:58] Bitcoin and Ethereum – Cryptocurrency consists of numerous types of coins, including Bitcoins and Ethereum. Grant reveals his thoughts on the benefits and usage of each.

[28:01] Conclusion – Grant sums up his takes on recent changes of monetary and economic policies related to cryptocurrency and how countries will decide and set rules regarding cryptocurrency in the coming future.

 

Resources

Ep #65 – My Take on Bitcoin & Cryptocurrency

growmoneybusiness.libsyn.com/website/ep-65-my-take-on-bitcoin-cryptocurrency

Ep #64 – Where to Invest an Extra $50,000 Right Now

growmoneybusiness.libsyn.com/website/ep-64-where-to-invest-an-extra-50000-right-now

JPMorgan Warns Big Investors Are Suddenly Dumping Bitcoin for Ethereum Amid A $150 Billion Crypto Price Crash:

forbes.com/sites/billybambrough/2021/09/26/big-investors-are-suddenly-dumping-bitcoin

China’s top regulators ban crypto trading and mining, sending bitcoin tumbling:

reuters.com/world/china/china-central-bank-vows-crackdown-cryptocurrency-trading

GMB Ep #94: 4 Tactics for Reducing Capital Gains Taxes on Appreciated Assets

 

Following the financial crisis of 2009, we entered one of the longest running bull markets in history. During this time, the Federal Reserve has injected a massive amount of US dollars into the monetary system, which has driven up the value of capital assets across the board. If you’re someone who holds equities or other assets at a substantial gain, you might be hesitant to sell them because of tax concerns. In today’s episode, Grant dives into four strategies you can use for exposure to appreciated assets and/or taxation when selling at a gain.

 

 

Show Notes

[02:29] Concentration and Risk – Why it’s risky to hold on to assets for too long and why it can be beneficial to repurpose your assets at the right time.

[07:57] Exchange Fund – Exchange funds can be used to diversify your holdings without triggering a taxable event. Grant shares his thoughts on the pros and cons of this method.

[13:28] Options – How to use stock options to reduce the risk of losing the value of your holdings during price fluctuations.

[20:05] Donor-advised Funds – Grant explores how donor-advised funds work and how investors can get tax benefits while contributing to charity.

[28:58] Charitable Remainder Trust – How charitable remainder trusts work, how they differ from donor-advised funds, and how to get started with them.

[34:38] Family & Insurance –Grant shares some ways you can reinvest the benefits of a charitable remainder trust to avoid financial stress within your family.

 

Resources

Donor-Advised Funds:
irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds

Convert Appreciated Assets into Income with a Charitable Remainder Trust:
schwabcharitable.org/maximize-your-impact/develop-a-giving-strategy/align-your-giving-vehicles/charitable-remainder-trust

GMB Ep #91: Why Mutual Fund Managers Are Converting to ETFs

 

One of the trends we’ve been recently observing is the tendency of mutual fund managers to convert their fund structure to Exchange-Traded Funds. Throughout this episode, Grant reviews the structures of mutual funds and ETFs, what makes them different from each other, the reasons why it makes sense for mutual fund managers to switch to ETFs, and what investors should keep in mind about mutual funds being converted to ETFs.

 

 

Show Notes

[01:43] Mutual Funds – Grant reviews how mutual funds are structured and how the mutual fund managers use funds from a group of investors to generate greater returns than what individual investors have the capacity to generate on their own.

[08:42] Limitations – Limitation of mutual funds and how these limitations may create unfavorable situations for mutual fund managers in some scenarios.

[13:50] Understanding ETFs – What led to the creation of Exchange-traded Funds, how they work, and the difference between mutual funds and ETFs.

[21:51] Benefits – Grant dives into the attractive characteristics and tax benefits of exchange-traded funds.

[25:00] Popularity of ETFs – Grant shares his thoughts on how ETFs became popular in the last decade and the trend of some mutual funds being converted to ETFs.

[30:00] Why Investors Should Care – How this trend of mutual fund managers converting their structure to ETFs affects the investors in terms of expenses, taxation, benefits, and what to do if their mutual funds are being converted.

 

Resources

Investor Bulletin: Mutual Fund Conversion to Exchange-Traded Fund (ETF):
investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/mutual-fund-conversion-exchange-traded-fund

Making the Switch: Turning a Mutual Fund into an Exchange-Traded Fund:
bbh.com/us/en/insights/investor-services-insights/making-the-switch-turning-a-mutual-fund-into-an-exchangetraded.html

GMB Ep #90: This is Exactly What to Do With Your Student Loans

 

With roughly 44 million borrowers that collectively owe nearly $1.7 trillion, student loans, the second-highest consumer debt category, has become something that’s pervasive for young people in the United States. We dedicated this episode to exploring some of the ways borrowers can make their student loan repayment manageable. Throughout the episode, Grant dives into how the interest rates and other characteristics vary depending on the lender, repayment options, income-based repayment, federal student loan forgiveness, and more. Stay tuned until the end of the episode, where Grant shares some strategies to reduce your monthly payments by suppressing your adjusted gross income.

 

 

Show Notes

[01:43] Background – The pervasive nature of the U.S. student loan programs and why they have become pervasive.

[05:10] Who Lent You the Money – Grant explains how the interest rates and repayment options may vary depending on the institution that is underwriting a student loan.

[07:38] Repayment & Refinancing – Once students have graduated and their forbearance period has finished, it’s time to paying back the student loans. Grant explores some of the options available for students at this point and how to decide whether to refinance with a private lender.

[10:19] Staying in the Federal System – Although it might make sense in some cases to refinance with a private lender, staying in the federal system has its own benefits. We talk about what these benefits are and how students can take advantage of staying in the federal system.

[13:07] Income-based Repayment – How the income-based repayment programs work, requirements for eligibility, and how they help people make their monthly payments manageable.

[18:13] Forgiveness – One of the features in income based-repayment is being able to get your debt forgiven after a certain number of years. Grant dives deep into how debt forgiveness works, how taxation comes into play at the point when the debt is forgiven, and what to consider when deciding whether to pursue forgiveness.

[22:32] Administrative Forbearance – As a part of the stimulus package introduced under the CARES Act, an additional forbearance period was introduced for student loans. Grant shares his thoughts on how to take this into consideration when making decisions about student loan repayment.

[27:15] Strategy for the Federal System – Grant shares some strategies for those who are in the federal system to make loan payments manageable by suppressing their adjusted gross income.

 

Resources

Episode #34: Why College Is So Expensive & How to Pay For It With Robert Farrington:

https://podcasts.google.com/feed/aHR0cHM6Ly9ncm93bW9