JW’s Financial Coaching Podcast JW’s Financial Coaching Podcast-A show devoted to answering your personal financial questions and covering current events in personal finance. Giving people a new perspective on their money!

February 29, 2016  
00:0000:00
  • Is your 401(K) or IRA balance down?
  • Four things to remember when the stock market is down
  • Can a short term down market actually be a good long term thing?
  • How to attend the Pre-Sale Launch Webinar for "A Tale of Two Houses"
  • Quote of the lesson from Urban Meyer

The JW’s Financial Coaching Podcast_97Have you checked your 401(K) or IRA balance lately? If so you might have noticed a smaller amount since the last time you checked. The reason is this

The chart above is the performance of the Dow Jones Index the past 6 months. After a nice buildup in the last part of 2015, we’ve definitely hit a dip to start off 2016. So it’s not just you who have experienced a dip. It’s ALL of us, including myself.

My 401(K) rate of return so far for 2016

Investing in the stock market is like riding a roller coaster. It always has its ups and downs; it’s rarely ever flat. It’s fun while the market is riding an upswing and you can see your balance grow. But it can be pure terror when the market dips and your balance decreases by thousands of dollars a month. It also doesn’t help when the 24 hour news cycle picks up on the dip and post headlines such as the following:

  • Dow falls triple digits as oil weight; energy, financials lag
  • US stocks open mostly lower as earnings news disappoints
  • Stock Market tumble could keep pension funds behind

With that being said, don’t panic, don’t sell off your investments, and don’t stop contributing to your retirement accounts. Turn off the TV, stop reading Yahoo Finance, and don’t check your balance every day. Below are a few things to remember while riding down the stock market roller coaster.

  • You are in it for the long run-One of the main things to remember when there is a downturn in the market is that if you aren’t retired, it doesn’t really matter what your balance is; there is time to recover. Even if you are retired or close to retirement today you aren’t going to use all your money today anyways. Yes it might hurt to look at your statement today, but the truth is that it only matters how much money is in your retirement when you go to use it.
  • Buying shares at lower prices-When a computer, TV, car, phone, or other consumer goods go down in price do we get worried and not buy that item? No, instead we usually go out and buy more of that product because it is on sale. Why then don't we do the same thing with the stock market? Looking at it another way, when the stock market dips down, that means we get to buy more shares of a stock or mutual fund then we would normally have with our monthly contribution. Then when the stock market roller coaster goes up we’ll have an even greater gain.
  • Diversification-When we have all of our eggs in one basket a down turn in the market is really scary. If we own single stocks or a large amount of our 401(K) is in our company's stock, downturns are going to hit us a lot harder. That just highlights the importance of diversification. Investing in several different types of funds amongst many different categories might not be the most exciting thing during a stock market increase, but it makes the dips a lot easier to manage.
  • The roller coaster climbs and dips are all relative-Earlier I showed you a picture of the Dow Jones Index over the past six months. Now below is one from the past 10 yearsAs you see, even after our dip, we’re still about where we were at the beginning of 2014 and a lot higher than we were in 2006, and have more than recovered the losses from the Great Recession of 2008-2009. So it’s all relative. Like a roller coaster, the stock market has its ups and downs but over history it has always continued to climb higher despite downturns.

Below are other materials I've written or talked about on the podcast on the topic of investing

Today's quote of the lesson is brought to you by my new book A Tale of Two Houses

"If your habits are not in alignment with your dreams you can either lower your dreams or elevate your habits”Urban Meyer

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

February 21, 2016  
00:0000:00
  • Why I track my net worth on a monthly basis
  • Can't move forward until you know where you stand
  • Shows where we've been and where we're going
  • How to calculate your net worth
  • Quote of the lesson from Ralph Waldo Emerson

The JW’s Financial Coaching Podcast_96Wikipedia defines the term net worth as is the total assets minus total outside liabilities of an individual. I've talked about net worth before but today I'm focusing on the ways that tracking our family's net worth has improved our finances.

I don't think you need to track your net worth each month, but it is definitely something I would do at least once a year. Tracking my family's net worth for the past 8 years has enabled us to do the following:

  1. Gives us an idea of where we stand financially
  2. It's a snapshot of what we did for the month
  3. Great reminder of where we've been
  4. Great reminder of where we're going
  5. Motivates me to continue doing what I'm doing

Presentation1

As mentioned on the show, if you want a basic template to keep track of your net worth please download it here.

Today's quote of the lesson is brought to you by my new book A Tale of Two Houses

"Shallow men believe in luck. Strong men believe in cause and effect.”Ralph Waldo Emerson

As a followup here is some additional material I've done on finances and luck:

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

February 7, 2016  
00:0000:00
  • How many of us don't work together on our finances in our marriage.
  • Why financial infidelity is so destructive
  • What the power of a joint account brings to your marriage
  • How to become a member of the Launch team for A Tale of Two Homes
  • Quote of the lesson from Earl Nightingale

The JW’s Financial Coaching Podcast_95According to a poll conducted by creditcards.com currently in America there are about 13 million people who are committing financial infidelity. That is, they have a secret bank account or credit card that their spouse doesn't know about. Today I discuss why that is troubling and why having a secret account is not ok even if you aren't breaking the bank financially or doing something sinister.

Financial infidelity is a serious topic and I also explain why sometimes we fall into it. Not making excuses for anyone but in my years as a financial coach often this comes due to one partner in the marriage carrying all the weight of the money. To not disappoint or make the other partner mad they get a credit card on their own or take out a loan and that just starts a downward spiral. It isn't healthy because it adds a layer of deceit to the marriage.

Also we talk about the power of joint accounts and how that can help keep financial infidelity down. It's not a fool proof way but joint accounts unleash a power in your marriage and that power is called the power of forced communication. You see when you are working together by doing a budget and sharing the bank account you are forcing yourselves to communicate together. This allows you to agree on your spending and when you agree on your spending, in essence you are agreeing on your life.

For more information on joint accounts please check out the following resources:

Also I'm excited to announce that my new book "A Tale of Two Houses-Our journey of buying a home the right way after buying one the wrong way" is set to release this spring. In anticipation I'm taking applications to join the book launch team. If you are interested in getting an advanced copy and helping to spread the excitement for the release then consider joining my launch team. I'm taking applications until next week on the blog. You don't have to be in the market to buy a new home to be considered for the launch team, you just need to believe that this message can help people from making buying mistakes.

Today's quote of the lesson is brought to you by my new book A Tale of Two Houses

"We tend to live up to our expectations.”Earl Nightingale

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.

February 1, 2016  
00:0000:00
  • It's important to know what to do when purchasing a home
  • Even more important to know what to do before you start the process
  • The most important three things to do before we purchase a home
  • Revelation of the title to my book on buying and selling a new home
  • Quote of the lesson from Suze Orman

The JW’s Financial Coaching Podcast_94

The whole home buying process can be stressful. Because of that, I'm releasing a book this spring which details our experience in buying a home. Not only do we share our story but we also give tips and advice on what to expect as well as break down some of the hidden costs of buying a home.

On today's lesson we are going to discuss the three things to consider before purchasing a home. They are the following:

  1. Become debt free-Being debt free has a lot of benefits in other areas than purchasing a home but in purchasing a home, being debt free has a lot of benefits. It reduces risk, makes it easier to qualify for a mortgage, and frees up cash. These all help when becoming a home owner and allows your home to be a financial gain instead of a financial strain.
  2. Have an Emergency Fund-Having an emergency fund goes hand in hand with being debt free. Owning a home is a great thing, but anyone who has owned a home for more than 30 days can tell you that there are a lot of sudden expenses with buying a home. Some are small expenses but others such as a broken heater, leaky roof, or an air conditioner unit that isn't working are huge expenses. If we don't have an emergency fund then we usually turn back to debt to replace those large home expenses and that restarts the debt cycle. However with an emergency fund that buys us some time and space to make those repairs and it won't put us in as much risk.
  3. Knowing how much you can afford-We all have an idea of what we can afford when buying a home. But it is important to establish the boundary before you start to look at houses! Buying a house can be an emotional and impulse purchase so it's important to establish what your mortgage will be. Once we look at homes that are out of our price range we are probably going to end up purchasing a home that is out of our price range.

Now granted, doing all three of these things might slow down our ability to purchase a home. In fact it could slow down the process significantly. But you know what? I'm still doing it. If you do all of the above three things you will probably be better prepared than 99% of other home buyers and it will allow you not to rush into the home buying process.

Speaking of the home buying process, I've finally completed my book on our family's story of buying a home in 2013. It is scheduled to be released later this spring and on today's lesson I'm excited to announce that the name of the book is, "A Tale of Two Houses: Our journey of buying a home the right way after buying one the wrong way." Thanks to all of you who gave your thoughts on the book title. Also stayed tuned in the next few weeks as I get prepared to accept applications to become a member of my book launch team for those of you who are interested.

Also on today's lesson I give a quick review of Pat Flynn's new book Will it Fly. I've had a chance to read an advanced copy and love the book. If you are looking to or are even remotely thinking of starting a business of any size, please check this book out first. Pat's book will challenge you but also force you to look at some things before you put all the time, effort, and money in that you need to launch a successful business. You can order his book on Amazon.com

Today's quote of the lesson is brought to you by Audible.com.

"It's easy to underestimate the real cost of home ownershipSuze Orman

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, or by downloading the iPhone app. Or you may listen to the podcast on the JW's Financial Coaching Facebook Fan page.