Making Finance Fun

In a new edition of "Rockie's Rants" Rockie talks about things that annoy the crap out him. And that probably annoy you too!   Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

Houses are flying off the proverbial shelf around here lately. If you've been wondering why that has been the case, I've got you covered in this episode.  Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn  Sources Mentioned In The Show https://www.bankrate.com/mortgages/current-interest-rates/ http://www.freddiemac.com/pmms/pmms30.html https://www.pjstar.com/news/20170726/caterpillar-expands-home-buying-incentive

In this episode, I discuss 4 ways to potentially reduce your tax bill for 2020 (before you file your taxes), even though its 2021!   Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

I have gotten a lot of questions about how all these stimulus payments (aka "the stimmy") may or may not affect your taxes. I address those questions and concerns in this episode! Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

In this episode, I talk about the different ways to buy Bitcoin along with the various places and institutions where you can buy Bitcoin.    Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

If you've had questions about the third stimulus check, you're not alone. In this episode, Rockie discusses several aspects of the stimulus check, including whether a third stimulus check is actually coming, how much it will be, if it's taxable, and more.   Sources mentioned: Kiplinger article - Third Stimulus Check Calculator Kiplinger article on Third Stimulus Check Update CNBC article on New Child Tax Credit AARP article - Are Stimulus Checks Taxed? Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

In today's episode, I talk with 5th district City Council candidate Ryan Hite. We talk about why he's running and his innovative ideas on how to improve the Peoria area.  Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

In this episode, we discuss where CAT is right now and where it might end up in 2021.  Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn   

I discuss the pros and cons of buying and owning rental property in and around the Peoria IL area.  Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn 

In this episode, I take a quick look back at my predictions for 2020. Did Apple, Amazon, Tesla, Disney, Caterpillar and others end the year where I predicted? Also, I will give you my "sure to go wrong" predictions for the Dow Jones Industrial Index, Apple, Disney, Caterpillar, Amazon, Tesla and others. Connect With Rockie Website  Twitter - @RPZ_3 LinkedIn   

What is my overall take on mutual funds? Should you invest in them? Or are they a waste? In this episode of Hey Peoria! Let’s Talk Money, I wrap up the series on mutual funds and share my assessment. I’ll talk about some research from the SPIVA US Scorecard that will shed some light on how different mutual fund sectors perform. After we walk through the numbers and get the big picture, I’ll share my hot take on this type of investment. What’ll my answer be? Listen to find out! Outline of This Episode [3:00] Domestic stock fund performance [8:44] International stock fund performance [10:20] Bond fund performance  [14:30] My overall take on mutual funds as an investment Domestic stock fund performance There are over 7,000 mutual funds out there and a large majority are stock funds. Twice a year, the SPIVA US Scorecard comes out. The scorecard is a research report on mutual fund performance. So I’ll be sharing the percentage of mutual funds that did NOT beat or outperform their benchmark.  In the domestic stock fund category—on a yearly basis—67% of funds underperformed the index. On a three-year basis, 70% lost to the index it was following. At 15 years, 87% underperformed the stock they were tracking. What does that mean?  In any given calendar year, it’s a coin flip to see if your stock fund will beat the index. The further you go out, the worse it gets. Over a 15-year timespan, only 13% beat the index they were tracking. The longer you own one, the worse your chances get to beat the index.  International stock fund performance On a one-year basis, 51% of international funds lost to the index they were tracking. Over 15 years, 84% lose to the index. International small-caps funds seem to perform slightly better. On a one-year basis, it’s a 50/50 shot that they’ll outperform the index. On a 15-year basis, you only have a 67% chance of losing to the index fund. So it goes to show that some categories are a little more positive.  Bond fund performance  The long-term government bond fund category is atrocious. It’s a 98% shot of losing to the index. An alternative is the investment-grade intermediate-term funds. They are considered a “safer” bond that is appropriate for the average investor. Why? Because there’s a good likelihood that your investment will get returned to you.  In the bond world, there are short-term, long-term, and intermediate-term bonds. Long term is a 20+ year maturity, intermediate is a 5–12 year maturity, and short-term can wildly differ. It can be 30 days and upward.  The intermediate-term category is about a coin-flip on a one-year basis. On a 15-year basis, it’s a 68% chance of losing to the index. With the global income fund category (that includes stocks from the US), 73% lost to the index it was tracking. Over 15 year, it’s 62%. My overall take on mutual funds as an investment Mutual funds are usually a diversified option, which is a positive. They’re also fairly easy to understand. They’re simply a bucket that houses a group of investments with a common purpose. The common purpose of a global income fund is to find you a good interest rate on bonds from across the world. The purpose of international funds could be to buy large-cap international companies. They’re also a one-stop-shop. If you like the utility sector, but don’t know what company to pick? A mutual fund may be a good idea. So what’s my hot take? How do they compare to ETFs? Listen to the episode to find out! NOTE: This is all public research. I’m not sharing a secret research project. You can access the PDF linked below to see the report.  Resources & People Mentioned BOOK: Mutual Funds Are So 1999 Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

I decided to change the name of this show and give it a new look. This episode explains why I decided to do so... Contact the show: HeyPeoria.net 

How do you properly analyze mutual fund performance? Does the historical performance of a fund give you the full picture? The short answer is no. I’ll answer the “why” in this episode of Making Finance Fun. I’ll talk about benchmarks and tracking error. I’ll compare actively managed funds, passively managed funds, and bond funds. The goal of this episode is to give you context to be able to judge the performance of any mutual fund. Don’t miss it!  Outline of This Episode [0:42] Mutual Fund Performance [3:20] Passively managed/index funds [4:18] What is tracking error? [7:09] Compare a mutual fund to its proper benchmark [10:01] Actively managed domestic (US) stock mutual funds [16:35] Bond mutual fund benchmarks Passively managed funds and tracking error When people ask me about performance, they’re generally asking about actively managed mutual funds. They don’t exist to surpass or beat an index—but simply to copy it. If you're looking at their performance, it should mirror the underlying index it’s trying to track and copy (i.e. S&P 500 or the Dow Jones). There shouldn’t be much of a performance difference.  But tracking error might creep in. What is tracking error? Let’s say—hypothetically—that this year the Dow Jones averaged a 10% annual return. Your mutual fund that’s copying the index only returned 9%. That’s a 1% tracking error. Tracking error should be very small—almost completely unnoticeable. But a passive fund won’t perform exactly the same as the index they’re tracking. Just keep this in mind as you’re analyzing passive mutual funds. You need to compare a mutual fund to its proper benchmark If there’s one thing that you take away from this episode, let it be this: as you’re analyzing actively managed mutual funds, do not analyze them on a standalone basis. You HAVE to compare them to the proper benchmark (for this discussion, I use “benchmark” and “index” interchangeably). You can’t compare a large-cap stock fund to a small-cap index. You can’t compare a bond mutual fund to the Dow Jones. They are two completely different things. It’s like comparing gas mileage in a Toyota Prius to a Dodge Ram. It won’t help you.  Actively managed domestic (US) stock mutual funds You can look at the average annual return to gain some perspective—but don’t put too much weight into it. Why? Because they ALL say “Past performance does not guarantee future results.” They’re not lying to you. You can look at historical performance, but it doesn’t mean it will be indicative of the future. What should you look at? The “style box.” According to Investopedia, “A style box is a graphical representation of a mutual fund's characteristics.” It’s a box with smaller boxes inside it. Each box represents a type of stock in one of three categories: Value stocks (under-valued, like Dollar Tree) and growth stocks (a company that’s growing like Tesla, Netflix, etc.). In the middle, you have a blend of both (i.e. Caterpillar).  It’s a simple tool that tells you where the mutual fund fits into the style box to analyze against the proper benchmark. If you buy a large-cap value mutual fund, you don’t want to compare it against a large-cap growth index. You want to compare it against a large-cap value index. It gives you the proper perspective and helps you look at the “style” of your mutual fund. The whole point? If you’re looking for a pure growth mutual fund, compare it to a pure growth index. The style box can help you do that.  Bond mutual fund benchmarks People are often really confused by bonds. The most popular bond index is the US Aggregate Bond Index from Barclays. There are also corporate bonds, municipal bonds, government bonds, etc. There are high-yield, triple-A rated, etc. If you’re looking at a high-yield bond fund, don’t compare it against the Barclays AGG index—compare it to a high-yield index. If you’re looking at a short-term index, don’t compare it to a long-term index. It won’t give you any relevant information. You can’t just look at whatever mutual fund you want and say, “Oh, it averaged 8% annually for the last 30 years.” That doesn’t tell you the risk you're taking. It doesn’t tell you what performance you can expect in the future. You need more perspective to find out how it will perform in changing market cycles. It’s just like how you need to listen to the whole episode to understand the full depth of the information I’m sharing!  Resources & People Mentioned Tracking Error Style Box Vanguard ETFs Vanguard S&P 500 ETF Bond benchmarks Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Today is part II of my latest Making Finance Fun series: mutual fund FUNdamentals. In this episode, I’m going to talk about US stock fund fees. Believe it or not, there is generally more than one fee involved. We will talk about active and passive domestic stock mutual funds, the two main types you can purchase, and the four kinds of fees that you may pay to own a mutual fund. Don’t miss it! Outline of This Episode [3:23] The two main types of stock funds [5:09] Fee #1: the expense ratio [9:00] Fee#2: Transaction Cost [12:55] Fee #3: Cash Drag [15:50] Fee #4: Taxes [19:38] Interesting nuggets of information [26:05] Check out my book! Fee #1: The Expense Ratio The expense ratio is basically a management fee. If you go online and type in the name of the mutual fund, you’ll find the expense ratio easily. So what is it? An expense ratio measures the operational costs of the mutual fund relative to the fund’s average net assets. It’s usually a percentage. It pays for the costs the fund incurs, fund managers’ salaries, advertising, and promotional activities, etc.  According to Morningstar, the average expense ratio is 1.1% annually for an actively managed fund. You are paying roughly 1.1% of whatever is in your mutual fund to the mutual fund company for their services. Yours may charge more or less. For an index fund, the average expense ratio cost is 0.49% per year.  Fee #2: Transaction Cost I’ve found that most people aren’t aware they’re being charged transaction costs. You generally see them in actively managed funds. Why? Mutual funds cannot buy or sell stocks themselves, they have to go through a broker. No one on wall street is running a nonprofit—so the broker charges fees. It’s really difficult to find what the transaction costs are. I’ve only found one average number (study done in 2007 linked below). The average cost is 1.44% per year. Woof. Transaction costs are likely lower on an index fund because they aren’t doing as much trading. Why? Because they’re copying other indexes. Fee #3: Cash Drag According to another study, cash drag costs you 0.15% a year. What is it? Whatever mutual fund you own keeps a certain amount of cash in the fund itself. Why? If they feel like the market is too high, they might put half the mutual fund in cash and wait for the stock market to drop. I’ve seen less than 1% all the way up to 80% in cash. They do this if they feel like there’s a pullback coming. If you’ve got $100 invested in the mutual fund and $5 is cash, you’re paying the fee on the whole $100—not just the $5. There is also cash drag in passively managed funds. But again, it depends on your specific mutual fund(s). Fee #4: Taxes We aren’t talking about ordinary income tax. I’m talking about capital gains tax. If you buy something for $50 and you sell it for $70, you might have to pay the capital gains tax on the $20.  The average tax that you’ll pay for an active fund is 1% per year. If you have $100 in a mutual fund, you can expect to pay $1 worth of capital gains each year. The fund manager might be buying and selling throughout the time you own the mutual fund. Most years—all of the buying end selling—generates capital gains for you. You may or may not have to pay capital gains taxes, but it varies depending on your situation and even the tax bracket that you’re in.  Index funds are well-known for being very tax efficient. They can pass on capital gains but it is rare. I don’t have an average cost. NOTE: If you have mutual funds in a 401k or a Roth IRA, this doesn’t apply. I share a few other interesting nuggets of information you’ll WANT to know if you’re going to invest in mutual funds. Listen to learn more! Resources & People Mentioned What are Transaction Costs? The Mutual Fund Fees We Don't Talk About 4 Lessons From Another Year of Falling Fund Fees Top 10 S&P 500 Stocks by Index Weight Why Do Indices Need to Be Rebalanced? How Mutual Fund Expense Ratios Work Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

On this episode, I have a very special guest on the show: WMBD TV Anchor & Television Producer Rebecca Brumfield!  We discuss her recent wedding, her day to day life as a local news anchor/producer, as well as a look behind the scenes on what it's like to be a news anchor.  Connect With Rockie   Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice

What are mutual funds? Why would you want to buy them? How can you buy them? These are just a few of the questions I’m going to answer in—drumroll please—a whole series about mutual funds. In this episode of Making Finance Fun, I’ll cover the mutual fund fundamentals: what they are, their history, why they were created, and more. If you’re interested in investing in mutual funds, do not miss this series! Outline of This Episode [3:11] What are mutual funds? [8:52] The history of mutual funds [11:02] Why mutual funds were created [15:13] The lowdown on modern Mutual Funds What are mutual funds?  According to Fidelity, Mutual Funds are “Investment strategies that allow you to pool your money together with other investors to purchase a collection of stocks, bonds, or other securities that might be difficult to recreate on your own.” It’s often referred to as a portfolio. The decisions to buy or sell funds are made by managers. It’s a gigantic pot of investments that someone manages that you can purchase. Why would you want to do this?  I don’t know how many publicly traded stocks are out there—but there are a lot. Trying to own a chunk to get a diversified portfolio is difficult. Even deciding what qualifies as “diversified” is difficult. Then you have to manage that portfolio. That’s a lot of time and mental energy. Mutual funds are a one-stop-shop for stocks, bonds, and other types of investments. You can buy one investment that does the work for you.  Think of your mutual fund as a public pool with lifeguards monitoring the pool. The people swimming in the pool are your investments. The lifeguards are the mutual fund portfolio managers. They watch over the investments and decide what to buy and sell.  What is their common purpose? And what is a prospectus? Listen to learn more! The history of mutual funds The first mutual fund was invented in 1924 and is still around today: the Massachusetts Investors Trust. It’s a stock mutual fund with 71 holdings in it (things like Microsoft, Google, Medtronic, J.P. Morgan, Apple, etc.) that includes a broad range of investments. It’s 26% technology, 18% healthcare companies, 11% communication, and 10% financials with a few other smaller categories. There are just under $6 billion in the fund with 3 portfolio managers.  WHY were mutual funds created? There are a few different reasons mutual funds were created:  It’s an easy way to diversify your investments in one fell swoop. You can get everything you’re interested in buying in one order. It’s convenient.  They offer professional management. They’re the lifeguards at the pool. They have access to resources and research to make decisions on what to buy, hold, or sell. You unload the decision-making to someone else. A mutual fund offers liquidity and convenience. It’s easy to buy and sell online. I haven’t heard of anyone who couldn’t sell their mutual funds.  What Modern Mutual Funds look like As of right now, there are approximately 7,945 mutual funds to choose from in the United States alone. The total investment in mutual funds in the US is over $21 trillion (as of the end of 2019). To put that into perspective, the entire US economy is somewhere around $20 trillion. There’s more money sitting in mutual funds than the US economy. It’s mind-boggling.  What can a mutual fund look like? There are stock mutual funds, bond mutual funds, real estate mutual funds, alternative investment funds, sector mutual funds (i.e. technology or consumer staples), and much more. There’s probably a mutual fund for any sector you can think of.  Should you buy mutual funds? How do you choose a mutual fund? Which one is best for you? What are the common fees? To learn more, listen to the whole episode. You can also learn more by subscribing and follow along through this special series on mutual fund fundamentals.  Resources & People Mentioned Episode #31: Choosing Between Mutual Funds And ETFs Number of mutual funds in the United States What are Mutual Funds? Massachusetts Investors Trust Total net assets of US-based mutual funds Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Are you new to the investment game? Do you know how to get started? If you’re a beginner looking for a simple guide to get on your feet, this episode of Making Finance Fun is for you. I’ll help you define why you’re investing, how you’re going to invest, and what you’re going to invest in. My 3-step guide to get started is so easy, a caveman could do it. (But really, who else remembers those hilarious commercials?) Outline of This Episode [3:23] #1: WHY are you investing?  [7:09] #2: HOW are you going to invest?  [8:58] Pros and cons of the Roth IRA [12:52] Pros and cons of the Traditional IRA [16:27] The lowdown on the 529 account [20:27] All about your 401k options [23:55] #3: WHAT could you invest in? #1: WHY are you investing?  You need to define why you’re investing. Here are some reasons I often come across: You’re investing for retirement Saving for your kid’s college fund You’re focused on wealth-building You want to increase your net worth To fulfill some short-term goals (i.e. a new car) Why do you need to define your why you’re investing? To determine how you’re going to invest.  #2: HOW are you going to invest?  What vehicle are you going to use for your investment? If your goal is to save for retirement you can open a Roth IRA, Traditional IRA, 401k, 403B, a Simple IRA, or a SEP IRA. If you’re saving for college for a child, you can open a 529 account. But what do I get asked about the most? Roth IRAs, Traditional IRAs, 401ks, and 529 accounts. So I’ll briefly talk about each of these options. Roth IRA vs a Traditional IRA The Roth IRA is a great account for saving for retirement. If you’re under 50, you can contribute up to $6,000 per year (as of 2020). If you’re over 50, you can contribute $7,000 a year. You do not get federal or state tax deductions. The plus side? You don’t owe taxes on the gains. Whatever you withdraw after turning 59 ½ will be withdrawn tax-free and penalty-free. However, if you withdraw the gains before 59 ½ you can be assessed taxes AND a 10% penalty. With a Traditional IRA, you DO get a federal income tax deduction for what you do contribute. You also get tax-deferred growth. But you have to pay taxes when you withdraw money. If you need an immediate tax deduction, this may be the way to go.  What are your options if you make above the tax-deduction threshold? Listen to learn more! The lowdown on the 529 account A 529 account is the first thing people think of when they want to save money for a child or grandchild for college. Some states even give you a tax deduction. For example, Illinois allows you to receive a deduction for up to $10,000 individually or $20,000 in a joint account. To find out which state does (or doesn’t) offer deductions, see the chart linked in the resources.  What if your kid doesn’t go to college? What if they want to start a business instead? The worst case scenario is that you pay income taxes and a 10% penalty on the earnings if the child decides not to go to college. Or, you can transfer the ownership. Are there other college savings options? Listen to find out! Plus, I share some details on 401k plans.  #3: What could you invest in? There are many investment options: ETFs, stocks, mutual funds, bonds, money market funds, CDs, brokerage CDs, bank CD’s, hedge funds, etc. That isn’t even an exhaustive list. However, inside a 401k you are limited to the choices they give you.  Sometimes, a brokerage window can open up that allows you to invest in whatever you want (not just the options they normally allow). But this can be dangerous if you aren’t an experienced investor. Within an IRA you can virtually invest in anything you’d like. The only three things you can’t own includes life insurance, collectibles, or—generally speaking—physical precious metals. You can even own real estate in an IRA.  To hear more information about my 3-step guide to investing, listen to the whole episode! Resources & People Mentioned Maximum 529 Plan Contribution Limits by State 529 Tax Benefits by State A Penalty-Free Way to Get 529 Money Back Hardship Distributions What Are Salary Deferrals? 5 Investments You Can't Hold in an IRA/Qualified Plan Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

It seems like it’s been an insanely nasty election season, doesn’t it? Many people are left wondering how it’s impacting the stock market—and your investments. An election season riding the wake of the Coronavirus pandemic leaves everyone with a lot of uncertainty. So what should you do with your current investments?  In this episode of Making Finance Fun, I talk about the historical impact of elections on the stock markets. I also share a few things I’d recommend NOT doing with your investments, along with  a few things you might consider. Check it out! Outline of This Episode [3:35] The average election-year stock market return  [5:29] The misconception that stocks get volatile [9:00] How stocks perform during election years [11:27] The market performs well under both parties [14:49] The economy is never radically changed [17:47] The historical narrative is not how you remember it [21:00] Why it’s okay if you don’t like the president [23:25] This isn’t the nastiest election cycle that we’ve had [26:20] Market predictions tend to be wrong [28:32] What should you do with your money? The misconception: stock market volatility Vanguard wrote a piece called “Elections matter, but not so much to clients' investments.” In the article, they share some research starting from the 1860s. They found that the average return during election years has been 8.9% (of a 60/40 stock/bond portfolio). The average return during non-election years? 8.1%. Stocks—historically—do better during election years.  According to the same article, from 1/1/1964 to 12/31/2019 the S&P 500’s annualized volatility was 13.8% the 100 days before and after the presidential election. That’s lower than normal volatility levels. Plus, volatility doesn’t always have negative connotations. It can simply mean a move up or a move down.  Since 1980—in my lifetime—we’ve had 10 election years. 8 out of the 10 years, The S&P 500 went up. On average, it’s averaged a 7.89% return during elections. The 2008 global crisis likely even skews the average a little. 10 Truths No Matter Who Wins In the article, “10 Truths No Matter Who Wins” Brian Levitt shares 10 points related to elections. I think a few of them were on-point and needed to be shared with you: Markets perform well under both parties. Since 1860, a 60/40 portfolio has averaged 8.2% under Republican presidents and 8.4% under Democrat presidents.  No matter who wins the economy isn’t radically changed. While presidents can have signature pieces of legislation pass, they haven’t significantly impacted the stock market.  The historical narrative is never how you remember it. I’ve heard “this is the most important election of our lifetime” every election. It’s ridiculous. Listen to hear why.  Markets don’t care if you don’t like the president. Some of the best returns came with low presidential approval ratings (36-50%). Stocks still averaged over 15% during that time.  This isn’t the nastiest election cycle that we’ve had. I share an insane story you’ve probably never heard about political candidates—listen to hear what it is.  Market predictions are usually wrong. No one knows when the market will tank. So don’t pay attention to predictions and take them with a grain of salt.  I discuss each one of these points in-depth and share some supporting information that you’ll definitely find interesting. Listen to learn more! What should you do with your money? Election years are tricky for investors, especially as you edge closer to election day. Politics are emotional and it’s hard not to make some emotional decisions with your money. That being said, there are some things you shouldn’t do: Don’t try to time the market. You might get lucky but then you have to decide when to buy back in—and most people don’t do it at the right time. Don’t panic sell. For example, the Dow Jones dropped 400 points when Trump said he wouldn't approve a stimulus deal before the election. The next day, the Dow Jones went up 420 points. Had you sold, you’d never think the market would snap back that quickly.  Don’t panic-purchase. Some folks panic buy because they’re worried they’ll miss out on an upswing.  So what are some things you could do? If you have stocks or ETFs that you’ve made gains on, sell some of it so you can sleep at night. You don’t keep your investments forever, right? Secondly, if you have some extra cash, you can hang on to it. You could pay off some debt, put a down payment on a house, buy a car, fix your roof, and so forth. If you want to buy some investments, use the extra money to purchase some while they’re low.  This episode is an interesting discussion centered around the upcoming election and how I (and other researchers) think it will impact the stock market. Some of the research might not be what you expect! Give it a listen.  Resources & People Mentioned Elections matter, but not so much to clients' investments 10 Truths No Matter Who Wins by Brian Levitt What U.S. Elections Mean for Investors Stock Market Performance in Presidential Election Years Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

In honor of my upcoming 40th birthday (which may or may not be on October 3rd), this episode of Making Finance Fun is a special edition. In this episode, I share my top 40 investment tips, personal finance tips, and observations from my 13-year career as a financial advisor. I share ten tips in this post. But if you want to hear ALL of the wisdom I’ve learned throughout the years, give the whole episode a listen! Outline of This Episode [1:56] My top 40 investment tips [2:29] Investment tips #1–10 [14:24] Investment tips #11–20 [23:31] Investment tips #21–30 [30:38] Investment tips #30–40 Tip #2: Have a reason you’re investing Too many people buy an investment without thinking through the WHY. Is it for a short-term gain? Do you want to own it for the long-haul? Do you want to make 25% and move on? Do you like what the company is doing? It doesn’t necessarily matter the reason—but you NEED to have one. Tip #5: Turn OFF the financial media 2020 has been hard on everyone. The market took a steep drop but has steadily come back to new highs. But the worst thing you can do is bombard yourself with the financial networks that speculate 24/7. They rotate guests who all have different opinions on the market. It’s all about driving dear, and fear leads to poor decision-making.  Tip #8: Remove as much emotion as possible When stocks go up people get crazy excited—but it’s even harder on the downside. I’ve lived through multiple market downturns. It’s HARD not to get emotional. When you have a plan and a strategy for your long-term investments, it’s easier to let go of the emotion and stick to the plan.  Tip #9: Rental properties CAN be good investments Many financial advisors disagree with me, but I believe a rental property can be a good source of income. While real estate can be a good investment, it’s also far more hands-on then buying stocks. I talked about it at length with “Money Honey” Rachel Richards in episode #39.  #13: The ups and downs are accelerated High-frequency trading, hedge funds, large banks, etc. trade quickly. This means drops in the market are accelerated—but so are upswings. We had a huge downturn of 35% in three weeks, followed by 6 months of near constant market increase. Things turn quickly. #18: Don’t put too much stock into savings projections Everyone has heard financial advisors say “You have to save this much by this age” in order to retire by 65. The truth is, those projections don’t necessarily tell the whole story. Maybe the people that have $2 million saved by 40 invested in a startup. Maybe their grandparents left them money. The amount of money needed for retirement depends on a LOT of variables. Don’t compare yourself to where others are at—and talk to a financial planner who can help you implement realistic goals.  #27: Performance numbers can be easily manipulated There are a lot of ways performance data can be manipulated to tell a story. It’s like comparing MPG on a Ford F150 versus a Prius. You can’t compare. They’re two very different things. Time-frames can easily be manipulated to frame it in a way someone wants you to see it. Fees can often be hidden as well—so keep a close watch.  #29: When someone gives you financial advice, take it in context The best example I can think of is when the CEO of a bond-mutual fund says the market will drop, take it in context. That dude is selling what people buy when they’re freaking out about stocks. When anyone—from friends and family to trusted businessmen—give financial advice, question their motivations or outside influences. #35: Evaluate your 401k twice a year I think you should check out your 401k at least twice a year. How is it performing? How is the allocation? Are you comfortable with how much you have in stocks versus bonds? Are you comfortable with what the stocks are? Do you own real estate? What bond funds do you have? If you want an analysis done by a financial advisor, feel free to reach out! #38: retirement isn’t the finish line  If you retire at 67, it’s not the finish line. If you retire at 45, it’s not the finish line. I’ve heard the misconception that you save, invest, and grow your money over and over again. Then—when you retire—you just live off the interest. That’s not how it works. You still have to grow your money, especially if you’re taking an income from your investments. You want to leave money for your family? It needs to keep growing. To hear the rest of my investment tips and strategies, listen to the whole episode of Making Finance Fun! Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

How can you retire at any age? What does it require? The “Money Honey” Rachel Richards is my guest on today’s episode of Making Finance Fun. Rachel is a former financial advisor, the best-selling author of two books, a real estate investor—and she retired at 27 with $15,000+ a month of purely passive income. In this episode, she shares what motivated her to build a passive income large enough for her to retire early. She also talks about HOW she made it happen. Free Gift To All Our Listeners! Passive Income Starter Kit Money Honey Book On Amazon Passive Income Aggressive Retirement Book On Amazon Outline of This Episode [0:24] The Money Honey Rachel Richards joins the show! [3:53] The backstory of Rachel’s books [8:48] Rachel‘s journey in real estate [14:07] Rachel’s experience managing properties [16:27] What Rachel’s day-to-day life looks like [17:38] How did she decide to retire at 27? [22:47] Where the desire to be different comes from [29:07] Time or money: which is your most valuable resource? [32:47] How to start where you are now [38:08] Rachel’s four main streams of income [40:53] Build a consistent income stream first [43:14] How Rachel chose to follow her own path [46:55] How to connect with Rachel Richards Resources & People Mentioned Jim Carey motivational Video Rachel's 1st book: Money Honey Rachel's 2nd book: Passive Income, Aggressive Retirement Connect with Rachel Richards Passive Income Starter Kit Follow her on Twitter Connect her on Facebook Follow her on Instagram Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

What are stock splits? Why would a company want to split their stock? Did you know you can now by fractional shares of a company? In this episode of Making Finance Fun, I talk about what a stock split is and why companies do them. I also touch on Apple and Tesla’s upcoming stock splits and what could happen in the aftermath. Lastly, I refute some common misconceptions about stock splits. If you’re wondering what all the fuss is about stock splits, this is a can’t-miss episode.  Outline of This Episode [4:48] What is a stock split? [7:26] WHY do companies split their stock? [10:48] Buying fractional shares of a stock [14:05] Apple’s upcoming stock split [17:02] The Tesla stock split [17:39] Misconceptions about stock splits What IS a stock split? According to Investopedia, a stock split is: “A decision by a company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders.” The share price is reduced in conjunction with the number of shares increasing. For example, if you’ve got a company that’s trading at $200 a share and they do a 2-for-1 split, it will go down to $100 a share. A 3-to-1 split will go down to $66 a share. But it’s a net-zero event when it happens. Why? If you’ve got $10,000 worth of stock before a split, you still have $10,000 worth. It’s just more shares at a lower price.  WHY would companies split their stock? Apple has been trading around $500 a share. Because it’s so high, it can be a deterrent to purchase the stock and it might scare some investors away. So there are two reasons I see why a stock might split.  A company's Board of Directors wants to make the sure price more attractive to regular everyday investors.  The second reason is that it increases the number of shares that are eligible to be traded, which increases liquidity. In the case of a 2-for-1 stock split—the number of shares outstanding doubles. People like to buy stocks because they’re liquid and fairly easy to sell—unlike, say, a house. Even if you sell your house the same day you list it, you still have to wait for the deal to close. They’re an illiquid investment. How could buying fractional shares of a stock change the split game? Keep listening to hear my take.  The history of Apple’s stock splits Apple announced a 4-to-1 stock split that will take place—or took place, depending on when you’re reading this—on August 31st, 2020. According to 9to5 Mac, “Apple has split its shares four times in its history, with the value of those shares typically rising by an average of 10.4% in the year following the split, eToro said.” Apple split in 2014 and 1 year later, the stock was up 36%. But when Apple split in 2000, its stock was down 61% the following year (which could have been impacted by the Dot-com Bubble). Of course, we don’t know what will happen this go-around.  In this study, eToro analyzed 60 years of data and found that—on average—companies that split their stock saw share prices surge by a ⅓ in the 12 months after the split. Averages can be deceiving, so I advise you to be careful.  What do I think about the Tesla stock split? They’ve NEVER split before, so no one knows what will happen. However, by the time this episode airs, it will be after the 5-to-1 split that happened on August 28th. So I guess we wait and see! Common misconceptions about stock splits What are the common misconceptions I hear about stock splits? Misconception #1: The stock is going to explode after the split. “MegaBrands” often see share growth within the year after a split. Apple averages over 10% in the year following a split. But there is no guarantee that stocks will go up after a split.  Misconception #2: I should buy after the split. Whether you invest in the stock before or after the split, you’re still investing the same amount of money. Instead, you should focus on WHY you’re buying the stock in the first place.  Misconception #3: They just want to buy their own stock back at a cheaper price. Maybe? But that isn’t usually why companies do stock splits.  A stock goes up when more people buy it then sell it on a given day. A stock price goes down because more people are selling than buying. If this keeps occurring, the performance could suffer. If it occurs because a stock price is too high, splitting the stock is an easy fix to protect their shareholders. To hear the full details about stock splits, be sure to listen to the whole episode!  Resources & People Mentioned Understanding Stock Splits Apple’s Stock Split Tesla Stock Split eToro Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

What is whole life insurance? Should you invest outside of a work-funded retirement plan? How will the election influence the stock market? The questions have been rolling in! So in this episode of Making Finance Fun, I finally give you some answers. If these are some of the questions that have been on your mind—give it a listen! Outline of This Episode [0:52] A listener Q&A Show [4:11] Question #1: What do you think about whole life insurance? [16:25] Question #2: Should I invest outside my retirement plan at work? [18:53] Question #3: When is Apple stock going to split? [24:55] Question #4: Are we going to get another round of stimulus checks? [27:09] Question #5: How will the election influence the stock market?  [29:49] Question #6: My *Certain to be wrong* predictions Just what is whole life insurance? What is whole life insurance? According to Investopedia, “Whole life insurance provides coverage for the life of the insured. In addition to paying a death benefit, whole life insurance also contains a savings component in which cash value may accumulate. These policies are also known as “permanent” or “traditional” life insurance.”  To restate the obvious: Life insurance is an insurance policy on your life. You take out life insurance to take care of dependents or family members who depend on your income to survive. If you pass away, a sum of money would be disbursed to those people. With whole life insurance, you have to keep the premium payments going and it is designed to last your entire life. Whereas term life insurance policy is designed for a length of 5, 10, 15 years, etc. Let’s define some important terms:  Cash Value: This is the money you pay into life insurance. It is similar to a savings account. If you pay $100 a month for the policy, part of it goes into “savings.” It will earn interest and grow. You can also take a loan against your cash value, which is used as collateral.  Death benefit: This is the amount of money that goes to someone if you die. My opinion is that whole life insurance is an expensive life insurance policy. The premiums are higher than term life policies. On the flip-side, once a term life insurance policy terms, it’s gone. So a whole life insurance policy could be a good idea in some situations—but it depends on your circumstances. The one benefit is that it does act as a savings account for you that can be invested and used in retirement as income. They’re sold as an investment vehicle. In my opinion—it’s not necessarily the best vehicle to save for retirement. To hear question #2—and my answer—keep listening!  Apple’s impending stock split: What does it mean?  As of August 31st, Apple stock is going to do a 4-for-1 stock split. But what is a stock split? A stock split is “When a company divides the existing shares of its stock into multiple new shares to boost the stock's liquidity. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because the split does not add any real value.” For every share you have, you’ll get four. So each share—according to today’s value—will go from $450 down to $112 a share. Technically speaking, the split doesn’t add any real value. There is no immediate value added to the stock itself. If you want to invest $10,000 in Apple before the split, you’re still investing the same amount. You just get more shares. However, if you’re planning to hold stock for a long time, a split can benefit you.  Why do companies split their stock? To lower the trading price of the stock and increase liquidity. People are simply more comfortable buying stock at a lower price per share. Up until recently, you had to buy a whole share of a stock. Some institutions now allow you to purchase a fraction of a share. Keep listening as I answer questions about how the election will influence the market and share my thoughts on another round of stimulus checks My *100% Certain to be wrong* predictions Just for fun—because this podcast is all about making finance fun—I’m going to throw out some stock predictions. Please note this is NOT actionable advice, just my thoughts on what the market could do—and likely 100% wrong. The Dow Jones is currently around 28,000. My prediction is... Apple is currently around $460 a share. My prediction is... Caterpillar stock is at $141 today and my prediction is... RLI stock is at $89 a share and my prediction is.... Tesla stock is at $1,650 as of the date of recording and my prediction is... Amazon stock is at $3,200 a share and my prediction is... Disney stock is at $131 per share and my prediction is... I’ll track these predictions throughout the rest of the year and see where we land in 2021. What do you think these stocks will do? Let me know—I’d love to hear your thoughts!  Resources & People Mentioned Whole Life Insurance What a Stock Split is The Apple Stock Split Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

What is a stock? What are the main types of stock? How can you buy stock? If you’re new to the world of investing—or simply want a refresher on industry terminology—listen to this episode of Making Finance Fun. Beginners and savvy investors alike can all benefit from getting back to the basics! Outline of This Episode [2:24] What is a stock? [4:59] What are the two types of stock? [10:50] How can you own stock? What is a stock?  According to Investopedia, “A stock is a security that represents the ownership of a fraction of a corporation.” NerdWallet defines stock as “A type of investment that represents an ownership share in a company.” I prefer the latter definition. Basically, a stock is a fractional ownership share of an organization.  If you want to own a small piece of Caterpillar, it will cost you around $140. A share of RLI will cost you $90. Simply put: when you buy a stock, you’re buying a fractional ownership share of whatever company you decide to buy into. Everyone thinks of publicly traded companies when they think of stock, but a stock can be a piece of a public OR private company. Theoretically, a small business can sell shares of their business (though most don’t).  The Two Types of Stock There are two types of stock: There is common stock and there is preferred stock. There are pros and cons to each. What are the main differences? According to The Balance, preferred stock owners “Do not have voting rights, but they do receive set dividends…” The main reason that people buy preferred stock is for the dividend. You may—it’s never guaranteed—get a higher dividend than if you had purchased common stock of the same company. It’s also more thinly traded, meaning you don’t typically see day-to-day stock swings.  On the flip side, according to Investopedia, “Common stock usually entitles the owner to vote at shareholders' meetings and to receive any dividends paid out by the corporation. Preferred stockholders generally do not have voting rights, though they have a higher claim on assets and earnings than the common stockholders.” The biggest difference between common stock and preferred stock? Those who own shares of preferred stock receive dividends before common shareholders. If the company goes bankrupt and is liquidated, preferred stockholders get paid back first. The common stockholder may or may not get anything at all.  Generally speaking, if a company wants to change its name, change its CEO, or change its board members they need to get stockholder approval. You as a common shareholder get to vote on it—preferred stockholders don’t get a say. What about taxes? What do they look like for each type? Listen to find out! The various ways to own stock What are your options for buying a stock? Here are the most common ways: The first way you can own stock is to buy individual stocks or equities. You can just go on a platform and buy the stock directly in the marketplace.  The second way is more indirect—through mutual funds. They’re just a collection of investments and most own stocks. Rather than own one stock, you own a small portion of a collection of different stocks.  You can also own stocks by purchasing ETFs.  You can own stock inside your 401k or IRA. Most 401ks’ typically only allow you to own mutual funds or ETFs versus individual stocks. Resources & People Mentioned What is Common Stock? Investopedia’s definition of a stock NerdWallet on Stock Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

There are four main types of ETFs: passive, active, factor, and sector. In 2019—According to this article—there were 6,970 ETFs globally. With so many options to choose from, how do you determine which fits your investment mix? Or if you want to invest in an ETF at all? In this episode of Making Finance Fun, I explain the four different types of ETFs to give you the information you need to accomplish what you want with your investments. Outline of This Episode [1:28] The 4 main types of ETFS [2:06] Passive ETFs [5:38] Active ETFs [9:24] Single and multifactor ETFs [16:02] Sector ETFs What is a passive ETF?  According to Investopedia, a Passive ETF is a vehicle to track an entire index or sector with a single security. What does that mean for you? It simply tracks an index. Single security is just a fancy term for an investment. A passive ETF is simply trying to get the same performance as some sort of index. With one purchase you can get roughly the same performance. For example, the Dow Jones is comprised of 30 large US-based companies. So rather than trying to buy equal amounts of all 30 you can buy an ETF that tracks the Dow Jones. As the types of ETFs go, these will generally be the cheapest ETFs you will find to own and you’ll likely see a market-like performance.  The definition of an active ETF So what are Actively Managed ETFs? These types of ETFs have a manager or team making decisions on the underlying portfolio allocation, otherwise not adhering to a passive investment strategy. Generally speaking, they may be trying to beat the S&P 500. An actively managed ETF will likely be more expensive than a passive ETF as far as investment fees and expense ratios go. Why? Let me explain—let’s say the investment group is buying Coke and they're selling Pepsi on a daily, weekly, monthly, quarterly, and yearly basis. The reason an active ETF is more expensive is because it consists of a team of people making investment decisions on an ongoing basis. You've essentially hired people to do something for you—not just copy an index. So they’re the exact opposite of a passive fund. What’s the deal with single factor and multifactor ETFs? A Factor ETF takes a factor from an index and makes an ETF out of it. For example, they might take the S&P 500 and create an ETF of only the companies that pay dividends (the dividend would be the factor). A factor ETF could choose to extract the companies with the highest dividend amount in terms of dollar amount or yield. So a single factor ETF chooses companies from an index based on ONE factor—whether it be by dividend, the largest companies, growth rate, etc. After they’re chosen, they’re more passively managed.  A multifactor ETF is simply an ETF that’s created from two or more factors. For example, the ETF could be composed of the companies with the highest dividends AND the largest annual growth. Let’s use Vanguard as an example: Vanguard has a Mega Cap ETF that is a single factor ETF. Vanguard also has a multifactor ETF—the Mega Cap Value ETF. To hear more specific examples and explanations about these two types of ETFs, make sure you listen! Sector ETFs explained The fourth type of ETF is a Sector ETF (what I prefer to refer to as a specific ETF). According to Investopedia, these types of ETFs invest in the stocks and securities of a specific industry or sector, typically identified in the fund title. Examples might be Pepsi, Coke, Proctor & Gamble, Walmart, Costco, etc. They can be referred to as consumer staple companies. So the ETF consists of a company or companies that sell consumer staples. With these types of ETFs, you get a little bit better exposure and diversification versus simply purchasing the stock itself. Ultimately, the types of ETFs you choose to buy—or don’t buy—depends on what you’re looking for. If you want something more affordable, you can choose a passively managed ETF. If you want to invest in very specific companies or industries, a factor ETF may be the way to go. Hopefully, I’ve explained each of the types of ETFs so you have a better understanding of what will work the best for you and your investment portfolio. Listen to the whole episode for ALL the details!  Resources & People Mentioned SPDR® S&P 500® ETF Trust Vanguard Mega Cap Value ETF iShares MSCI Brazil ETF The Consumer Staples Select Sector SPDR® Fund The Number of Exchange Traded Funds Worldwide Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Recently, the North Central region of Illinois advanced into Phase 4 of the Restore Illinois coronavirus response package put together by JB Pritzker. Indoor dining has resumed (on a limited basis), as has the ability for movie theaters to resume operations.  Phase 4 is entitled "Revitalization." While face coverings are still to remain the norm in this phase, we have begun to "reopen." What does this mean for our local economy here in Peoria IL? If you are a small business owner, what are the challenges and opportunities now? In this episode, I discuss a little bit about how The Restore Illinois Phase 4 will impact the economy in Central Illinois.  Connect With Rockie Website Twitter : @AnxiousAdvisor LinkedIn  Sources Mentioned https://coronavirus.illinois.gov/s/restore-illinois-phase-4 https://www.chicagotribune.com/coronavirus/ct-cb-coronavirus-illinois-phase-4-guide-20200622-5brcl4dphrg25dzoqzu5jicwd4-story.html https://www.google.com/search?q=illinois+phase+4&rlz=1C1CHBF_enUS859US859&sxsrf=ALeKk013QWbiIbjH6pTSQY34U6Az9PHbPw:1594390192977&source=lnms&tbm=isch&sa=X&ved=2ahUKEwiqnteo7sLqAhWEX80KHdfQBcMQ_AUoAnoECAsQBA&biw=1920&bih=937#imgrc=zCuJsyX6ij3rXM  

What is a cash balance pension plan? What do you do with a cash balance pension plan? How is money contributed and how is it dispersed when you retire? In this episode of Making Finance Fun, I answer some frequently asked questions about this specific type of pension plan. If you work at the Hallmark Cards Inc. facility in Metamora, IL—this episode is for you!  Outline of This Episode [1:30] Just what is a cash balance pension plan?  [2:47] What does all this mean? [3:54] What makes cash balance pension plans unique?  [8:21] The pros + cons of monthly payments [9:58] The pros + cons of the lump sum option [11:17] What does your final decision come down to? Just what is a cash balance pension plan?  According to Investopedia, A cash balance pension plan is: “A pension plan with the option of a lifetime annuity. For a cash balance plan, the employer credits a participant's account with a set percentage of their yearly compensation plus interest charges.” They also note that changes in the portfolio will not affect the benefits received by the participant when they retire or are terminated.  So what does all this mean? There are generally two types of benefit plans: There is a defined contribution plan such as a 401k or 403B where you’re the one contributing the money and your employer may or may not match it. This is what most people are familiar with. Then there are defined benefit plans, where you have upon retirement a specific defined benefit dispersed monthly or in a lump sum. The second category is where a cash balance pension plan lands.  The key difference between the two types of plans The biggest difference about a cash balance pension plan is that you—the employee—are not contributing money into the plan. Another difference is that each participant has their own account vs. one large pension that’s dispersed among all participants. The employer contributes a specified amount each year, typically a percentage of their yearly compensation (i.e. it could be 5%). There will also be an interest credit that will be applied. These types of plans also give you two choices for disbursement of the funds once you retire or are receiving a severance package.  Option #1: a guaranteed monthly payment The first option for the disbursement of a cash balance pension plan is monthly payments. Commonly, you are offering a guaranteed monthly payment of a specified amount until the day you die. You may also have the option of choosing how the amount is distributed—such as split between you and a spouse, a higher monthly amount for 10 years, etc. At this time, I’ve only seen this for Hallmark Cards Inc. employees. So how do you decide if this is the right option for you? Think about your monthly expenses during your retirement. Do you need an extra dollar amount per month? Will your social security be enough to cover your expenses? Or you just haven’t saved enough? The monthly payments may be the route to take if you NEED the guaranteed payments. What are the possible disadvantages of this option? What happens to the money if you pass away? Listen to find out! Option #2: taking one lump sum The second option for the disbursement of a cash balance pension plan is taking the money in one lump sum. The biggest advantage is that you can take that lump sum and do whatever you want with it. You can roll it into an IRA, you can use it to pay off debt, or even towards vacations. The bottom line is you can spend it however you like. The downside is that there aren’t a lot of investments that can guarantee you a monthly payment for the rest of your life that the first option offers. You’ll also likely be charged taxes on the lump sum.  So what does it boil down to? Really, it’s what is most important to you. It’s a highly personal decision. If you’d prefer a lump sum to do with as you please then go that route. If you would like a guaranteed monthly payment for life to help with necessities then that’s a great option as well.  If you participate in a cash balance pension plan—such as Hallmark Cards Inc. employees—I highly recommend connecting with a certified financial planner (even if it isn’t me) with experience with these plans. What you decide is a choice that will impact the rest of your financial future, so you want to choose wisely. A financial planner can help. If you have more questions, feel free to reach out! Resources & People Mentioned What is a Cash Balance Pension Plan? The Department of Labor on Cash Balance Pension Plans Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

What is the difference between a mutual fund and an ETF? Which should you buy—a mutual fund or an ETF? What are the deciding factors? In this episode of Making Finance Fun, I take a deep dive into mutual funds and ETFs. I’ll define the two terms, talk about FOUR key differences, and even give you a glimpse into the book I wrote: Mutual Funds Are So 1999: How & Why ETFs Have Disrupted the Trillion Dollar Mutual Fund Industry.If you’ve thought about investing in mutual funds or ETFs, don’t miss this episode! ***Put Buttons Above DATE in final post*** Outline of This Episode [1:54] The definition of a mutual Fund and ETF [3:40] How are mutual funds and ETFs similar? [6:52] The FOUR key differences [7:30] Difference #1: Fees/expense ratio [13:52] Difference #2: Management style + performance [19:54] Difference #3: Buying and selling ETFs/mutual funds [25:19] Difference #4: Which is more tax efficient?  [30:10] Which to buy: Mutual funds or ETFs? So just what are mutual funds and ETFs? According to Investopedia, an Exchange Traded Fund (ETF) is: “A type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies.” A mutual fund is: “A type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.” The long and short of it is this: Both mutual funds and ETFs are a group of investments with a collective purpose.  Difference #1: Fees/expense ratio Nearly every single mutual fund has some sort of fee involved in it somehow. The associated fee (or expense ratio) differs between whether or not your mutual fund or ETF is actively managed or passively managed. Actively managed simply means that a manager(s) buys and sells on a daily, weekly, monthly basis on your behalf. Passively managed means that the mutual fund or ETF is following a benchmark they’re associated with (Dow Jones, S&P 500, NASDAQ, etc.).  On average, an actively managed mutual fund charges 1.09% annually. A passive mutual fund charges an average rate of 0.79%. On the flip side, a passively managed ETF costs roughly 0.57% annually versus 0.6% for an actively managed ETF. The cost differences make sense—after all, if someone is actively managing the group of investments, they have to get paid. Difference #2: Management style + performance Hypothetically speaking, the running theory is that if you pay more, you should do better. Right? So I did some digging and took a look at the SPIVA US scorecard, which attempts to look at performance differences between actively managed funds and passively managed funds. According to this report, 70% of domestic stock funds lagged the S&P Composite 1500 making for the 4th worst performance since 2001. Actively managed funds did NOT have a good year last year. Looking over the performance for 15 years, less than 10% of actively managed funds beat the S&P 500.  Keep listening as I dissect the numbers and share how different sectors performed in actively and passively managed mutual funds and ETFs.  Difference #3: How Mutual Funds and ETFs are bought and sold I’ll cover this briefly, but if you want an in-depth look at how these are bought and sold, be sure to check out my book! An ETF trades throughout the day on an exchange (trading platform) just like a stock. You can buy an ETF at 10:30 and sell it at 10:45. You’ll know what share price you’re buying and selling it for. You can also set a limit order so that your ETFs sell at a minimum amount (if the value is dropping) or a maximum amount (if the stock is rising).  It is NOT the same with a mutual fund. You’re buying directly from and selling to the mutual fund company. A mutual fund doesn’t sell instantly and you don’t know what price you’re selling at. Typically, you don’t know the price you’re getting until after the stock market has closed. You cannot set limit orders with mutual funds. When you sell them, you choose the number you’re selling and hope for the best.  Difference #4: Tax efficiency When mutual funds sell investments, any profits are passed on to the funds’ shareholders via capital gains distributions. If you have an actively managed fund you will probably pay capital gains taxes on it most years (though it is a little different with a Roth IRA or qualified accounts). Capital gains are unlikely with ETFs due to how they’re constructed and traded. In this episode, I share THREE different examples going back 10-15 years where ETFs have NOT made capital gains. Passively managed ETFs are the most tax-efficient of mutual funds and ETFs.  So how do you decide which one to buy? The bottom line is this: it depends on what you’re trying to accomplish, what type of account you have, your risk tolerance, and the goals of the investment. Do your research and make the best choice for you. Reach out to your financial advisor—or myself—if you have any questions.  If you want to learn why I believe the ETF structure is superior to the mutual fund structure, check out my book: Mutual Funds Are So 1999: How & Why ETFs Have Disrupted the Trillion Dollar Mutual Fund. Resources & People Mentioned BOOK: Mutual Funds Are So 1999 Dividend Distributions What is an ETF? What is a Mutual Fund? SPIVA U.S. Scorecard Difference between ETFs and Mutual Funds Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice

On today's episode, we get to know Amanda LeQuia a little bit  better. Among other things, she is the Operations Manager at my firm RP Zeigler Investments, the Operations Manager at The Pizza Peel, a military fiance, and just flat out a great person to be around.  We dive into such topics as her upcoming wedding this fall, her job duties here at the firm and at the Pizza Peel, her current obsession with candles, favorite movies, guilty pleasures, hobbies and much more.  "I'm an open book," as she likes to say, and all of you listeners out there will get a peek into her life on this episode.  Amanda LeQuia everybody...... Find out more at: https://rpzeigler.com/about-the-firm/team-members    

Has the stock market reached a point of stabilization? Are the volatile swings up or down beginning to equalize? In this episode of Making Finance Fun, I’m going to do my best to answer that question. I’ll define what ‘stabilization’ means, look at how the S&P 500 and Dow Jones behaved in March-May, and address where we could go from here. After you hear the information I present, I’ll let YOU decide where the market stands. Outline of This Episode [2:00] What is the definition of stabilization? [3:40] Stock market activity in March [4:44] Stock market activity in April [5:20] Stock market activity in May [10:16] Where do we go from here? [14:30] Have the stock markets reached stabilization? What IS the definition of ‘stabilization’? According to Lexico, stabilization is “The process of becoming or being made unlikely to change, fail, or decline.” When I look at the market, the question I ask myself is this: Has the insane volatility—big upswings and big downswings—stopped? Volatility is often viewed and referenced negatively. However, I do want to point out that volatility can also mean an upward spike—not just down.  Stock market behaviors in March, April, and May Although the Coronavirus pandemic technically started in February, I want to focus on how it impacted the market starting in March. The S&P 500 dropped 20% in March and the Dow Jones dropped 21%. Talk about a HUGE negative trend. From what I’ve read, it sounds like it was the worst-performing month of the stock market since the great depression. March brought wild swings in the market—sometimes 6–8% in a single day.  April seemed like a polar opposite to March, with both the S&P 500 and the Dow up 13%. It can be categorized as one of the best months we’ve had in 35–40 years. But the market was still quite volatile. The Monday before the CARES act was passed, the market anticipated that it wasn't going to pass and the market was DOWN. When the Senate passed the bill, the market had a huge upswing. Trillions of dollars were pumped into the economy.  May has been largely uneventful and relatively calm in day-to-day activity, with the S&P and Dow both up 3%. Here and there we learn more about the virus or receive some good news about potential vaccines and treatment. There have been a few trading days with swings of 3–4%.  Where will the stock market go from here? My opinion—NOT my prediction—is that wall street is waiting for a catalyst. Will the Fed send out another round of stimulus payments? Will a company come out with a proven vaccine? Will the relationship with China improve or deteriorate? We can’t forget a big election is coming up. The stock market is looking for the next big thing and will react accordingly. The month of May brought some market stabilization and we’ve seen less volatility. We may be moving in a positive direction. Only time will tell.  Resources & People Mentioned The definition of ‘stabilization’ Dow Surges 900 Points Illinois ‘Stay At Home’ Orders Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Oil prices have been all over the board in recent months. We even saw a barrel of oil drop into negative price territory, which is an extremely rare event. Gas prices have been very volatile, as well.  What does this mean for our economy on both a local and national scale? If you'd like to know my thoughts, tune it today!  Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn

Tax return season is upon us and with it comes many unwanted opinions. Some experts say that it’s better to aim for a small or break even tax return so you keep the extra income throughout the year. Others understand that people prefer a large return that feels like a yearly “bonus”. So which is better? Is there a right or wrong answer? Listen to this episode of Making Finance Fun for my hot take.  Outline of This Episode [0:11] Hot take: large or small tax return? [1:27] The Big Scary Disclosure [2:05] Why I think it’s OK to get a big tax return [5:30] Americans are conditioned to expect a tax return [6:53] You could set yourself up at break-even [8:39] There are valid points on both sides [11:28] The whole point of the show Plain and Simple: Most Americans Can’t Budget Americans—across the board—aren’t the most disciplined of budgeters. If you’re the rare breed that has an excel spreadsheet of your budget, kudos to you! The majority of us don’t budget well. It’s like a diet—simple in theory, but difficult to carry out. If you’d normally get a $5,000 tax return, it would be approximately $416 extra in your pocket monthly.  You could save $416. Perhaps you’d be practical and invest it in stock or your 401k. Maybe you’ll pay off school debt or a car loan. But would most people do anything significant with that extra cash? probably not. Most people just blow it—I’m guilty of it too. We’d all probably have a lot more in savings than the national average if we were more disciplined.  Let’s be honest—a tax return feels like a yearly bonus Americans have become conditioned to expect a lump-sum tax return. It feels like a bonus, even though it's money that YOU overpaid throughout the year. You know, just an interest-free loan to the government. In the end, it’s still your money. The plus side is the government ‘saved’ it for you throughout the year and then plopped it back into your lap. Think about advertising around this time of year—it’s all geared towards spending your tax return. Need new furniture? Ready for a vacation? Perhaps you need a down-payment on a car? People aren’t good budgeters, so the reigning theory is that perhaps they’ll make smarter choices with a lump sum.  What to do to keep more money in your pockets throughout the year If you’re one of the expert-budgeters and prefer to keep and use the extra income throughout the month, there are ways you can do that. But it’s difficult to find that break-even point where you don’t owe money but don’t get a return. You could adjust your withholding and file a W-4 and submit it to your employer. Most people attempt to come within a couple of hundred dollars, either owing it or receiving a small tax return.  The long and short of the debate I don’t mind getting a large tax return. I’ll use the extra cash to knock my mortgage down, increase my savings, make an extra car payment, etc. I don’t know what everyone else does with it, but I can say this: there are valid points on both sides of the argument.  Don’t let anyone ridicule you for the choice you make. Don’t let people tell you you’re dumb—everyone is different. Can’t budget? Take the lump sum. Amazing with money? Spread your money out over 12 months. Either way, it’s cool. The bottom line? Just be smart with your money. Resources Mentioned How to calculate your tax withholding Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

This is one of the questions my clients are asking frequently right now: HOW is the stock market performing well when the economic data that’s being released is SO bad? In this episode, I talk about 3 things: what the economic data is, how the stock market and the economy are linked, and WHY the stock market is still performing. If this is one of the questions burning in your mind—listen now. Outline of This Episode [2:37] Questions my clients ask me: why are stocks going up? [3:25] Stock market and national GDP data and percentages [6:49] How some of the top stocks are performing [8:52] The stock market and the economy are NOT the same [15:14] Wall Street: Sometimes bad news is good news [19:48] The pentagon acknowledged the existence of... What does the stock market look like? Looking at the numbers can be confusing, but they can tell us a lot about what the stock market is projecting.  Dow Jones Industrial Average: As of the recording of this episode (4/29/2020), the Dow Jones was down 16% from its all-time high that was recorded in February. Year-to-date it’s only down 13%. It’s risen 32% since its lowest point this year. The S&P 500: The S&P is down 13% from it’s high for 2020. Year-to-date it’s only down 9% and up 31% from its lowest point. NASDAQ: The Nasdaq is only down 9% from it’s high. Year-to-date? It’s flat-lined—only down half a percent. It’s up 42% from its bottom.  While the stock market is still down, it performed well in April given the economic circumstances we find ourselves in. It was announced that out 1st quarter GDP was negative 4.8% --- a full 1% WORSE than what was expected. Yet, the stock markets rallied. Amazon, Apple, Microsoft, and Caterpillar all went up in April. Why does any of this make sense? Keep listening to find out! How the stock market and the economic data correlate In March, most indexes were down 40% or so, give or take a few percentage points. Plus, we witnessed the fastest bear market in history too. We experienced a 3-week crash. US payroll plunged 701,000. Jobless claims exceeded 8 million. Jobs may not come back for years after this economic plunge. Yet the stock market continues to rally.  That’s because the stock market and the economy are not 100% correlated. The stock market and the economy are NOT the same and don’t do the same thing. Nor do they perform or move in lock-step with each other. The stock market tends to be a forward-looking indicator, often predicting what things will look like in 6 months.  In April we saw some comebacks, which begs the question—is it the performance of the March version or the April version of the stock market that will predict the future? Will we have a V-shaped recovery, or will it be a slower U-shaped comeback? 2nd quarter GDP is projected to be anywhere from -10 to -40%. The bottom line? Only time will tell.  Bad news is good news and good news is bad news I get it. You’re probably thinking “Hold up Rockie—wait a second—that makes ZERO sense!”. I know, it’s confusing. But here’s why it makes sense: When good news about the economy breaks, Wall Street begins to worry the Fed will hike interest rates. Conversely, when bad economic data is released they expect the federal reserve to slash interest rates. This sometimes triggers good performance in the stock market. It all depends on what Wall Street chooses to focus on, on any given day.  The Coronavirus overwhelmed the news cycle and we missed something HUGE Guys—the Pentagon acknowledged the existence of UFOs and no one cares. They confirmed that 3 videos that have been circulating for years indeed show what they’ve now termed “Unidentified Aerial Phenomena” (their attempt to avoid the stigma associated with “UFO”). The Coronavirus, the economy, and the stock market have so dominated the news cycle and our very existence so much so that a topic that would’ve been headline news is on the sidelines.  But back to the task-at-hand—the economic data paints a different picture than the stock market and vice versa. To hear the full-details—the ins and outs—listen to the whole episode of Making Finance Fun! Resources & People Mentioned US Payroll Plunges 701,000 Economists on Return of Jobs Jobless Claims Exceed 8 Million Weekly Jobless Claims Double States Hit with Biggest Job Losses ISM Manufacturing Index at 49.1 The Effect of the Coronavirus Pentagon Acknowledges Existence of UFOs Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

If you have a 401(k) and/or IRA, listen up. Big changes have arisen due to COVID-19 that allow you to make easier, and more tax friendly withdrawals from your retirement account(s).  I go over all of the recent changes in this episode.  As always, a written review is greatly appreciated. If you leave a written review, send a screenshot of it to Rockie@rpzeigler.com and I'll send you my most recent report: My Thoughts On The Coronavirus and The Stock Markets. Resources & People Mentioned  Morningstar Article Fortune Article Connect With Rockie Website Twitter: @anxiousadvisor On LinkedIn

It’s been talked about for weeks: we all know that stimulus checks are being dispersed to Americans. But who qualifies? How will you get it? Will everyone get the full amount? Are the checks taxable? In this episode of Making Finance Fun, my goal is to answer all of your need-to-know questions. Check it out!  Outline of This Episode [0:00] Write a review for my free eBook! [1:10] What’s the deal with the stimulus checks? [2:25] Do you qualify for the tax credit? [6:45] Who doesn’t qualify and why [8:31] Are these stimulus checks taxable? [12:03] How you’ll get your check [14:21] Embrace this time the best you can Who qualifies for the stimulus checks? Here’s the breakdown:  For single adults making less than $75,000: You get $1,200 For married filing jointly and making under $150,000: You get $2,400 Head of Household making less than $112,500: You get $1,200 Each child under 17: You (the parent) get $500 They base this on your 2018 tax return—only if you haven’t yet filed for 2019. There IS a phase-out if you make over $75,000 (individual), $150,000 as a married couple, or $112,500 as head of household. Who doesn’t qualify?  If you make MORE than $99,000 (individual), $198,000 filing jointly, or $136,500 as head of household, you will NOT get a stimulus check. The only saving grace is that you will STILL get $500 per each child under 17 in the household. Plus—there’s no limit on the number of children that you can claim. Are these stimulus checks taxable? The short and easy answer is no, they are NOT taxable. Why? Because these checks are considered a “refundable tax credit”. If you’re staring blankly and crickets are chirping in the background—you’re not alone. I get it, it’s 100% confusing. Here’s a simple way to break it down:  Let’s say you have a child and you’re filing your taxes. Once everything is processed, it’s calculated that you owe $10,000. But wait—because of a child tax credit, $2,000 of that amount is knocked off. So you only owe $8,000.  The stimulus checks are a one-time (currently) tax credit applied to your 2020 taxes that you’re getting in advance in the form of cash. It will not affect your 2020 tax filing in the slightest.  HOW and WHEN will you get the money?  If you have direct deposit on file with the IRS you’ll get your money via that route—and fairly quickly. As of the date this episode is airing (4/21/2020), I’ve heard of numerous people already receiving their credit.  If you typically receive your tax refund via check in the mail, things will be a little trickier for you. When I recorded this episode, the IRS stated they’d be creating a portal when you can give them your banking information. UPDATE: The link to the portal is below. If you opt-out of giving the IRS your banking information, you’ll see your stimulus check far later, perhaps even July, with the latest projection into September. Either way, it will take longer than you expect if you wait for it to be mailed to you.  Resources & People Mentioned Business Insider Article Forbes Article on Stimulus Checks IRS information on Stimulus Checks IRS Portal Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

What do you do to manage your 401k when the economy is diving headfirst into a recession? The Coronavirus has forced itself to the forefront of our minds day-in and day-out—there’s no escaping its reach. You may be getting nervous about the money you’ve allocated for retirement. Or you’ve found yourself short on cash as you sit at home, waiting to return to work. In this episode of Making Finance Fun, I’ll share 5 things you can do to manage your 401k. Outline of This Episode [2:16] What should I do with my 401(k)? [2:52] Tip 1: Know exactly how much risk you’re taking [11:40] Tip 2: Keep contributing if you can [16:22] Tip 3: Position yourself for the recovery [20:04] Tip 4: What to do If you have to take a hardship withdrawal [26:55] Tip 5: Know the rules if you take out a 401(k) loan #1: Know the risk you’re taking with your investments If you’ve been watching your 401(k) take a nosedive and it’s left you unable to sleep at night—maybe you aren’t the aggressive investor you thought you were. That’s 100% okay. Extreme drops in the market are an indicator of your risk tolerance. If it’s low, it may be time to re-think your strategy, which I talk about a little bit more in this blog post. The bottom line is, assess your risk tolerance and if your current stock and bond allocations don’t align, make some changes until they do. #2: Continue to Contribute to your 401(k)—if you can If you’re lucky enough to find yourself still employed—and not one of the 3 million people to have filed for unemployment—you may be tempted to stop paying into your 401(k). If you need the extra cash and can’t keep contributing, it’s understandable. But if your employer matches your contributions, it’s retirement money that you’ll be losing out on. Listen to the episode as I talk about contribution limits for yourself (and your employer) and how it applies if you’re self-employed.  #3: Position yourself for a market recovery “This time is different” is something we all say at the beginning of a recession—and it’s true. The beginning is always different but the end is always the same. A drop in the market has historically ended with an eventual rise back to normalcy. Dial-in your risk tolerance, and then reallocate your assets accordingly. The caveat will always be that we don’t know (and can never gauge) what will happen moving forward, but there’s reason for hope.  #4: What to do if you have to take a hardship withdrawal I’m not advising for or against taking a withdrawal, but there are a few things you need to consider before you withdraw money from your 401(k). There are 6 criteria you must meet to qualify for a withdrawal: You’re dealing with unexpected medical expenses.  The withdrawal is directly related to the purchase of a home. If it’s to help pay tuition and/or school expenses. Payments are needed to prevent eviction or foreclosure. The money is used for burial or funeral expenses. The funds are needed to repair damage to your home. Exemptions are allowed if you’re disabled, have medical debt that exceeds 7.5% of your adjusted gross income, or the court is mandating it to go towards alimony or child support. Before you make a move, you need to know that your 401(k) is protected from creditors and bankruptcy. Think long and hard before opening up yourself to losing that money.  #5: Know the rules if you take out a 401(k) loan If you’re at a point where you need to weigh the idea of withdrawing money from your 401(k), take a pause and consider a loan instead. Not all of them allow it, but most do. Typically, you’re required to pay the loan back over a period of 5 years. But any interest you pay during the 5 years goes back into your account. However, if you lose your job or change employers during this time, one of two things will have to happen. The first is that you’ll have to pay off the entire amount of the loan. The other option is to roll it over to another 401(k). The downside to option #2 is that you will be taxed on it and could also face a 10% penalty if you’re under the age of 59 ½.  Weigh your options carefully, and do what’s necessary to support yourself and your family through this time. If you have questions—don’t hesitate to reach out to me. For my full take on managing your 401(k) check out the whole episode.  Resources & People Mentioned The IRS on 401(k) contribution limits 401(k) Hardship Withdrawal  Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

With the panic and hysteria that’s surrounding the Coronavirus, everyone is worried about the stock market. Is the market going to continue to plummet? Will we go into a recession—or worse, a depression? Is our economy going to hold up? In this episode, I’m going to lay out where the stock and bond markets are today, March 10th, and 4 things to consider during this market downturn. My goal is to educate you on where we are and possible routes to take as we move forward in this uncertain time.  Outline of This Episode [0:33] Panic and hysteria surrounds the Coronavirus [2:20] The Big Scary Disclosure [2:50] Where is the stock market at?  [6:21] The sudden drop in oil prices [7:55] How the coronavirus will impact the stock market [11:07] Where bonds are at right now [15:28] The value of the two markets [19:12] #1 - Don’t panic sell [23:25] #2 - Look for opportunities [27:17] #3 - Reassess your current risk-tolerance [29:41] #4 - Look at the dividends you’re earning The stock market is DOWN from its 52-week high As of the date of recording this episode, the stock market has hit a historic downturn. It’s the biggest point downturn in history (since recording, it has dropped even more).  The Dow Jones is down over 2,000 points (19%).  The S&P 500 is down 19%. NASDAQ is down 19% The Russell 2000 Index is down 23% None of these numbers are surprising. No one knows what’s going to happen with the Coronavirus (now labeled a pandemic). People are now being banned from travel and businesses are shutting down. Wall Street is afraid people will stop spending money. 70% of our economy depends on us going out and making purchases. If we aren’t spending money, the economy might suffer.  The bond market seems to be holding steady Bonds can sometimes be the forgotten asset class. They provide a level of safety when the stock markets are going crazy—like they are now. Right now, the majority of bonds are up (as of March 10th). The Vanguard Long-Term Treasury ETF is up a whopping 40% Vanguard Total Bond Market Index Fund is up 10% The Bloomberg Barclays US Aggregate Bond Index is up 12% At this point, bonds are holding up well and are thriving. Interest rates keep falling, and as they fall bond values tend to go up. Just to give you a bit of perspective, if someone were to outright buy the stock market, it’s valued at 70 trillion dollars. The bond market is worth 100 trillion dollars—significantly larger than the stock market.  The 4 things you need to consider during a downturn in the market There are 4 things that you need to keep in mind when the stock market is in a downward trend: Don’t panic sell. I get it—it’s a national emotional reaction to want to get away from the thing that’s causing the negative emotions. It’s normal to feel anxious. But if you sell all of your investments, when do you get back in? No one alive knows where the bottom is. If you sell it all, it’s hard to know when to buy back in. No one knows when the dust will settle. Look for Opportunities. Stocks are down right now, but some of them may be smart to buy into before the market begins to climb again. Listen to the episode for 2 stocks that aren’t necessarily performing as poorly as the rest of the market—and 2 that are doing far worse.  Reassess your current risk tolerance. I use a program that sets an actual number from 0-99 that shows your level of risk. A number like 25 is low-risk, while a number like 90 is considered high-risk. Sit down with your financial advisor and see if you need to make changes. The higher-risk your portfolio is, the more it could drop in rough times.  Look at dividends you may be earning. While they’re not guaranteed (unless it’s a CD) some stocks (such as Procter & Gamble and Caterpillar) will continue to pay their dividends even when the market is down. We are entering uncertain times. We don’t know which direction the stock market will go just as we don’t know how the coronavirus will travel. I caution you to focus on the facts and make smart—not panicked—decisions. Listen to the whole episode of Making Finance Fun for details on the market and what’s influencing it.  Resources & People Mentioned Size of the Markets Explaining the Bond Market Vanguard ETFs Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Do you know what a High Impact Business Program (HIB) is? Were you aware that it impacts how you file your taxes in the state of Illinois? There are 4 companies in Illinois where the HIB allows you to subtract your dividends from your gross income when you file your taxes. So what does that mean for you? Listen to this episode of Making Finances Fun to find out! Outline of This Episode [0:15] New name—same show! [2:35] The ‘Big Scary’ Disclosure [3:23] The 4 Stocks whose dividends can be excluded [7:45] What does it mean if you own one of these 4 stocks? [10:25] Here’s how you file your taxes to exclude the dividends [12:38] Verify that your tax professional is aware of these stocks What is a High Impact Business Program (HIB)? According to the Illinois Department of Commerce, a HIB program “supports large-scale economic development activities by providing tax incentives to companies that make substantial capital investments in operations and create or retain an above-average number of jobs. Businesses may qualify for: investment tax credits, a state sales tax exemption on building materials and/or utilities, a state sales tax exemption on purchases of personal property used or consumed in the manufacturing process or in the operation of a pollution control facility.”.  On a basic level, to qualify for the program, a business must:  Invest a minimum of $12 million and create 500 full-time jobs OR make a $30 million investment with the retention of 1,500 full-time jobs Illinois added a few other things that could qualify a company to be part of the program, but those are the need-to-know basics. Essentially, the government is giving them tax credits if they stay, spend, and grow their business in Illinois.  This is important because it allows you to exclude the dividends (from HIB designated companies) from your gross income on your state tax return. What 4 Companies in Illinois have the HIB designation? I’ve come across 4 businesses that are part of the HIB program. As of Feb. 25th, each pays a yearly dividend as outlined below:  Caterpillar Inc.: Pays $4.12 per share per year Abbott Laboratories: Pays $1.44 per share per year AbbVie Inc.: Pays$4.72 per share per year Walgreens Boot Alliance: Pays $1.83 per share per year If you own stock in any of these companies you will have brought in dividends this year. So what do you do with your tax return? What to do when you file your taxes If you live in Illinois, own stock of any of these 4 companies, and receive dividends—you can exclude the dividends from your gross income on your STATE return (you can verify all of this with your chosen tax professional). To clarify, dividends are lumped into gross income. However, they are still federally taxed. This ONLY applies to your state return. Here’s how you file: attach a Schedule 1299-C to your 1040 to report the subtraction from your gross income. The company you own stock in will send you a 1099 form at the end of the year, which means the IRS gets a copy as well, so they know you’re receiving dividends. Wouldn’t you like more money in your pocket? A lot of people aren’t aware of HIB programs and how it affects filing your taxes—even some tax professionals. While it is rare, I have run into it. I recommend going back and looking at previous returns to see if the 1299-C was filed with them.  Most professionals are educated and know their stuff, but it doesn’t hurt to verify. If you use a tax professional, be sure to provide them with the 1099 form and let them know you own stock in one of these 4 companies.  It’s akin to getting a state tax reduction. Illinois is basically saying, “Hey look, it’s cool, we are just gonna pretend you didn’t get these dividends”. Don’t pay unnecessary tax if you don’t have to—keep your money in your pockets. Resources Mentioned High Impact Business Program (HIB) Walgreens Boot Alliance Caterpillar Inc. Business Designation Abbott HIB designation Connect With Rockie Website On Twitter: @AnxiousAdvisor On LinkedIn Subscribe to the show on the app of your choice Show notes by PODCAST FAST TRACK https://www.podcastfasttrack.com

Changes are coming to your FICO score this summer. Why should you care? Well, your FICO score goes a long way in determining what types of loan(s) you can get and what interest rate you will pay. If your FICO score is good, then you will generally get favorable interest rates and terms. If it's not so good, you may not be able to qualify for a loan, and if you do in fact qualify, your interest rate will probably be higher than someone with a good credit score.  Sources:  https://www.cnbc.com/2020/01/23/fico-10-credit-score-changes.html https://www.google.com/amp/s/www.cnbc.com/amp/2020/01/27/ficos-new-credit-score-wont-ding-you-for-student-loans-or-mortgages.html  

Are the stock markets going to crash in 2020? No one knows with any degree of certainty, including me. However, anything can happen, especially during an election year. In this episode I go over 5 things that could cause a market meltdown in 2020.  I offer no predictions, and I'll be the first to tell you that I do not know where stocks are headed. Rather, I decided to have some fun going over a few current newsworthy events and explain how they may (and I stress "may") effect stocks this year.  Sources: https://www.investopedia.com/terms/s/stock-market-crash.asp https://www.google.com/amp/s/www.cnbc.com/amp/2020/01/04/stocks-began-2020-at-record-highs-heres-what-could-go-wrong.html  

If you own a 529 college savings account, 401(k), IRA or inherited IRA, then you may notice some changes this year and beyond. The SECURE ACT was passed by congress and signed by President Trump late last year. It laid out some sweeping changes for retirement accounts and college savings accounts which began January 1st, 2020.  In this episode, Rockie breaks down the biggest changes that will likely affect the lot of investors, both young and old.  Sources: https://www.investopedia.com/what-is-secure-act-how-affect-retirement-4692743

How should you invest your money when the stock markets are at, or near, all time highs? I go over a few strategies and ideas for you in this short episode. 

In this special Christmas episode, Rockie reveals his top 5 favorite Christmas songs and top 5 Christmas movies of all time.  Feel free to agree or disagree, but either way, let us know your top 5 songs and movies for the Christmas Season! www.FinancialPlannerPeoriaIL.com

Did you know that there are over 20 new taxes and tax hikes scheduled to hit Illinoisans Jan 1st, 2020? Well you do now! Most of them revolve around your vehicle. Registration taxes, parking garage taxes, cigarette taxes, taxes on beer, spirits and wine are all scheduled to either increase or, begin in the new year. In today's episode, Rockie talks about these new taxes & tax hikes, and what they mean for Illinois residents in 2020 and beyond.  Links Tax hike on vehicle trade-ins. https://www.illinoispolicy.org/illinois-imposing-car-trade-in-tax-on-jan-1-dealers-call-it-double-taxation/ 20 other Tax and fee hikes coming in 2020. https://www.illinoispolicy.org/20-tax-and-fee-hikes-totaling-4-7-billion-coming-soon-for-illinoisans/ Tax hike on parking garages, vaping, cigarettes.  https://news.wttw.com/2019/12/12/new-year-new-taxes-what-will-cost-more-2020

In the spirit of the season, in this episode, I talk about the top 10 things I'm thankful for in 2019. Five things professionally and five things personally.  I hope you enjoy the show!

I've been in this business for 12 years, and I've worked with clients from all walks of life. Both in terms of wealth, and in terms of age. With that said, I've noticed that I get similar questions from many of my clients regardless of their situations.  In today's episode, I'm introducing a new segment into the show. I hope you like it! Articles referenced in this episode:  https://www.thebalance.com/presidential-elections-and-stock-market-returns-2388526 https://www.capitalgroup.com/individual/planning/investing-fundamentals/presidential-election.html

How does the Federal Reserve lowering interest rates affect your investments? I explain in this short episode.  We welcome your feedback here at the show. Leave us a review on Apple Podcasts, or reach us the following ways: Email: Rockie@rpzeigler.com Blog/Podcast Website: www.FinancialPlannerPeoriaIL.com Firm Website: www.rpzeigler.com Call or text our office 309-240-8787   Article mentioned in the show: Bankrate.com - What Is The Fed Funds Rate?

Derick's resume is loaded. He has 2 Masters degrees. He is currently working on his PhD, is the father of a new baby girl, and the founder of For You The Culture, a non-profit whose mission is to "rewrite the narrative of the African-American Community." Derick & I get into some uncomfortable, but necessary discussions about his views on the African-American culture and what he feels needs to change. Derick is not just attempting to rewrite the narrative, he is living it out as an example for others to see. He is a fantastic role model and a great ambassador for Peoria Illinois.   I came away from this interview very impressed by this young man, and I have little doubt that you will too.  Eric Thomas Video: https://www.youtube.com/watch?v=7Oxz060iedY Inky Johnson Video: https://www.youtube.com/watch?v=zeWg73GzVbc For You The Culture Website: www.foryoutheculture.com Feedback for the show: Rockie@rpzeigler.com

One the hot topics right now, both on Capital Hill and on Wall Street, is a possible Presidential impeachment.  This show WILL NOT be an analysis of the political situation at the White House and in Congress, but rather a look back at historical Presidential impeachments and how the stock markets performed during the proceedings.  Full disclosure, the sample size is pretty small. There isn't much to really go off of, but I feel it's important to look back at the Clinton, Nixon and Andrew Johnson impeachment processes anyway. Hopefully we can gain some knowledge from history to better navigate today's possible Trump impeachment.  Please leave us a review on Apple Podcasts! It helps the growth of this show tremendously.  Here are the various ways you can contact the show if you're so inclined: www.FinancialPlannerPeoriaIL.com Twitter: @AnxiousAdvisor Email: Rockie@rpzeigler.com

When considering buying a mutual fund, or any investment for that matter, it's important analyze them properly. Factors such as fees, risk and tax efficiency should come into play when making a decision to buy an investment or not. However, when it comes to mutual funds, comparing a them to a benchmark (such as the S&P500 index or a Dow Jones Index, for example) should come into the equation, as well. Not just any benchmark though, it should be the PROPER benchmark.  You don't compare the gas mileage of a massive pickup truck, to a Toyota Prius, right? The same concept applies here. You generally won't get the info you desire by comparing a high-risk mutual fund to a low-risk benchmark. It just doesn't work that way.  I wrote a blog post about this back in June, but today, I rant about it. As always, reach out to me if you have any thoughts about the show, or have personal finance questions! www.rpzeigler.com www.FinancialPlannerPeoriaIL.com Rockie@rpzeigler.com 

In my 12 years as a Financial Planner, I've been asked many questions about the "stock market." It's a term that gets used quite often, but it rarely gets defined. I thought I'd take an opportunity to get back to the basics of investing and personal finance.  In this episode we go over what the stock market actually is, what the S&P 500 is, and what the Dow Jones Industrial Average is.  If you like the show thus far, please leave a review below. I truly appreciate it and it greatly helps the show's growth.  Find out more about Rockie: Rockie's firm - www.rpzeigler.com  Rockie's blog - www.FinancialPlannerPeoriaIL.com Email - Rockie@rpzeigler.com Twitter - @AnxiousAdvisor 

Taylor is a mother of one, a devoted wife and the Children's Ministry Director at Church 2:14 in Peoria.  She and her husband David have struggled with fertility issues in recent years, and they have also overcome three separate  miscarriages.  People sometimes wonder why God would allow such difficult things to happen to faithful followers, such as Taylor and David. While no one really knows the exact reason(s), Taylor & I discuss some possible answers to that difficult question. This episode is simply about how Taylor turned grief, sorrow and hardship, into a valuable, positive initiative for women currently suffering through what she overcame.  Taylor is a glowing example of how to turn a difficult set of circumstances into an opportunity to help others.  You can find out more about Taylor and her initiative online at: www.connectinghope.faith Or email her directly at TaylorL@church214.org