Managing Funds

/in ,

Greetings, all! We hope your year has gotten off to a productive start! At the Bona Fide base, we have been busy and it is shaping up to be an amazing year of growth and development. For this newsletter, we are going to focus on a topic we haven’t really touched upon in the past. It is a question we receive from time to time and we felt there would be some value in devoting a newsletter to it. The question is, ‘Why do I have to transfer my accounts to TD and/or Betterment for you to manage them?’. If this is something you’ve ever wondered about, we hope the following links will provide you with some answers.

  • Read: This article from Investopedia highlights the best way to move from one advisor to another. Many of the same reasons apply to why someone would want to move their accounts from one location to another. One of the great benefits of working with an advisor to do so is that we handle all the details for you so you have the time and peace of mind to focus on your other obligations – consider this a concierge or white-glove service. Once all the accounts are in one place, keeping track of investment records and transaction history, maximizing tax efficiency, ensuring investment fees are as low as possible, and securing trades at the lowest possible cost are all easily achieved.
  • Watch: If you are working with us, we hope you are already sold on the reasons for having a financial advisor. The Money Guys do an excellent job of illustrating the value of working with a financial professional, and more so, a CFP, who is a fiduciary working for you and only you! In How and When to Hire a Financial Advisor, a stat we love is that of the 271,700 financial advisors in America only 3,700 are fee-only. We are proud to be fee-only fiduciaries, not driven by commissions or other sales fees. When you work with Bona Fide Finance and move your accounts over, the fees you pay are transparent and you can be sure that we are working to maximize your gains and minimize your fees. When you have accounts spread all over the place, you have no such assurances. As touched upon in the video, talking about this sometimes feels a bit self-aggrandizing, but sometimes it is important to beat on your own drum.
  • Listen: Ok, so we are deviating a bit from our original topic, but we felt with all the news around Robinhood and Gamestop these days, you might forgive us for this detour (and it does relate in a very important way). This podcast from MarketPlace breaks down what has gone on so far with Robinhood, Gamestop, and the Reddit group that has been making waves through the market. To bring this back to our original topic, one of the benefits of having your accounts under the Bona Fide umbrella is that we act as a kind of filter for you when these kinds of stories pop up. When we handle your investments, we ensure that you will stay above the fray when storms of irrationality flair up.

We hope these links have provided you with some clarity as to the benefits of moving your accounts to be managed by Bona Fide. It is an important decision and part of the holistic management process that is crucial to your long term financial success. Lastly, we want to remind you that your accounts are always yours. You always have full control of them and your money isn’t locked away from you. If you would like to chat more about this aspect of the business, we are always happy to take the time and answer any questions you may have. Feel free to share these links with friends and family and please reach out with any comments you have.

Make it an amazing month!
The Bona Fide Family

Mistakes to Avoid in the New Year

/in

Without a doubt, 2020 has been a challenging year and most people are looking forward to the promise that the new year brings with it. Resolutions receive a lot of attention, but we at Bona Fide don’t mind being a bit contrarian in our approach. In that spirit, we are focusing this newsletter on the mistakes and pitfalls that you want to avoid in the New Year. Leave those bad habits in 2020!

  • Read: One of the biggest mistakes in any person’s financial picture is unnecessary complexity. Have too many bank accounts? Too many credit cards? Too many things floating around to keep track of? We are huge fans of simplicity and efficiency. This blog post from Mint.com does an excellent job of detailing a few ways to simplify your finances for the New Year. We especially like the tip regarding reviewing your monthly subscriptions. Don’t let those small ticket items grow into a monthly monster!
  • Listen: Tired of hearing about all these mistakes to avoid in the New Year? Take a break with this podcast, where the host Shannah Game (another CFP) talks about money mistakes that are OK to make. She is extremely easy to listen to and identify with. These are 30 minutes that are sure to make you feel better about any ‘mistakes’ you may have made in the past and give you a sense of wellness to move forward into the future. 
  • Watch: While this video focuses on pitfalls to avoid during the pandemic, the lessons here can be extended to your whole life (and most do). The hosts are both CFPs (yay!), along with holding other designations, so we know the information we are getting is sound. We love the breadth of information presented in this video and the way they make suggestions for people of all ages. This is a great one to share with family and friends!

We love putting together these resources for you and helping you win with your finances! Please reach out if you have any questions or just want to chat about any of the links we’ve provided. Happy New Year!

Warmly,
The Bona Fide Family

Cybersecurity

/in ,

Welcome to November! This monthly newsletter’s topic, cybersecurity, is focused on that which we interact with every day, while we may not be aware of the implications of our online presence. As we are spending more and more of our lives in virtual spaces, we feel it is of the utmost importance to know the basics of protecting our personal information. Take some time with these links and make sure to protect yourself. As usual, feel free to share the content with your friends and family. Reach out if you have any questions! 

  • Read: This article discusses the future of cybersecurity. It touches upon several issues such as how large companies handle your data, government regulations, the growing cybersecurity industry, and (in our opinion one of the most important takeaways) the biggest security threat to the average person. Hint: it is something you use every day. 
  • Listen: Appropriately named, Down the Security Rabbit Hole will take you deep into an issue of what the hosts term the 31st human right, data ownership. It is an interesting idea. Most of the services you use for “free” on the internet aren’t really free. The sites are harvesting your personal information and selling it to companies who target you for ads. The hosts speak with Richie Etwaru, a human data ethicist about how data ownership is a fundamental human right, the principles of data ownership and how they’re different from privacy or security, and how data ownership is a great leveling factor for society. 
  • Watch: This video is presented by the talented actor (Blossom, Big Bang Theory) and neuroscientist (yes, you read that right!) Mayim Bialik. She goes over the basics of cybersecurity in an easy to understand manner. It’s only a 6-minute video, so it’s a quick way to get yourself thinking about the key points of cybersecurity. 

BONUS: Here is a link to our favorite password manager, One Password. Trust us – your password “system” isn’t as good as you think it is. Create one great password and remember it. Add all your passwords to One Password and everything is safe and sound. It is easy to use and the interface is great. If you aren’t using a password manager, we highly recommend it!

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!

Student Loans and Politics

/in ,
Read. Listen. Watch.To say the first of the Presidential debates was memorable would be an understatement. Something that seems to have gotten forgotten in between all the one-liners and talking points was the subject of student loans. Many of our clients and their loved ones currently have student loans or will in the future, so we wanted to devote this month’s newsletter to what is an incredibly important issue to so many Americans. As usual, feel free to share these resources around and follow up with any questions you may have. We are here to help!Read: Bank Rate does a wonderful job of going over some of the most pressing questions many people have regarding President Trump and Biden’s respective stances on student loans. They give a measured and level-headed estimation of what is happening with student loan debt now and what may happen in the future.Listen: When saddled with a massive amount of student loan debt, one of the most difficult things to do is wrap your head around trying to make your payments and live your life at the same time! Luckily, due to forbearance, you’ve got some time to take a breath and do some planning. In this recent episode of the Student Loan Planner podcast, consultants Rob Bertman and Meagan Landress share their best tips to find balance with budgeting, saving, investing, and paying off debt without sacrificing your quality of life. Yes, it is possible to deal with your student loans and live your life! Make sure to scroll to the middle of the page where you’ll find the audio.Watch: In this episode of the Zack Beck Show, Zach goes over the proposals (and their probability for success) by both Trump and Biden (in a non-partisan way) and touches upon the offer Elizabeth Warren and Chuck Schumer made to Trump which would give him the power to cancel up to $50,000 in student loan debt for all Americans.If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!

Presidential Elections and the Market

/in ,

What does history tell us about presidential elections and the market? Check out these resources below:

  • Read: This article from Business Insider says the market has been correct a whopping 87% of the time in predicting the outcome of the presidential elections since 1984. If the stock market has been going up in the 3 months prior to the election, the incumbent wins and vice versa. 
  • Listen: Did you know that presidential elections share something in common with lions, sharks, and mosquitos? You’ll have to listen to this amazing podcast with Meb Faber to learn more as Meb gives great direction on healthy investor mentality.
  • Watch: Investors often wonder whether the market will rise or fall based on who is elected president. Watch this video from Dimensional as they share the effects and patterns of presidential elections on the capital markets. The conclusion at the end of the video may surprise you! 

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!

Investing in Real Estate

/in , ,

Real estate is a powerful investing tool that can create wealth and financial benefits for investors in ways other assets cannot. We receive questions about this all the time; below are some resources centered around understanding this important financial subject. Whether you are interested in real estate on a personal level or as an investment, these links are a great way to dive deeper into a fascinating topic:

  • Read: This article from Million Acres (a Motley Fool company) details the basics of real estate from an ownership and investment perspective. With the great variety of real estate topics about which to learn, this article is an excellent jumping-off point to utilize as there are tons of links to follow.
  • Listen: One of the tricky things about real estate is that it is so location-specific. Even if you have the desire and funds to invest, you may not be able to find any good deals in your geographic area. That’s where investing outside your local market comes into play. Nick Giulioni discusses his own approach of building a portfolio of real estate in Indiana though he is based in California. While the idea makes many people nervous at first, investing in out-of-state markets opens you up to countless opportunities to find your next great deal!
  • Watch: Bigger Pockets is one of our favorite sources for real estate knowledge. They present real estate concepts in easily digestible bites and this video is no different. Here, Brandon goes over calculating numbers on a rental property. Understanding these calculations is absolutely critical if you intend to invest in real estate.

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!

Factor Investing

/in ,

Factor investing is an investment approach that involves targeting quantifiable firm characteristics or “factors” that can explain differences in stock returns. Over the last fifty years, academic research has identified hundreds of factors that impact stock returns. The following three resources provide varying degrees of depth into this topic. Check them out below:

  • Read: Factor Investing Fact Check: Are Value and Momentum Dead? by Wes Gray, PhD. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago. His interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management firm that delivers affordable active exposures for tax-sensitive investors. You can also listen to this conversation between Wes Gray and Meb Faber.
  • Listen: Dr. Daniel Crosby touches on the psychology of investment momentum in this 14-minute podcast. He is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets.
  • Watch: What is factor investing? This handy article and accompanying brief video from Investopedia give an overview of this perspective in investing.

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!

Budgets and Bear Markets

/in ,
Read. Listen. Watch.Times of crisis can bring with them unpredictability. We are all likely experiencing a change in our financial holdings, whether due to layoffs, reduced hours or wages, or through increased expenses as we navigate this current situation. We’ve put together some resources that will hopefully provide some financial solace and guidance as we enter a new month. Check them out below:Read: This article from a YNAB user highlights how utilizing a budget can change even a 75% reduction in pay from a crisis to an inconvenience. Some of you may be experiencing a similar trend in your finances right now from an income perspective – but if you’ve worked hard on your budget this situation doesn’t have to up-end your plans. YNAB also put together this video on budgeting in uncertain times. Trust your budget!Listen: Dr. Jim Dahle of White Coat Investor has a great podcast episode detailing a Bear Market Action Plan. He highlights what TO do in a bear market, and definitively what NOT to do in a bear market. He offers very steady advice for all of us where emotions may be running high with what to do given the current situation nestled in a pandemic.Watch: While this is not a video, the visual image is strong – check out this graphic that condenses the history of bear and bull markets since 1926. An interesting summary: the average bear market lasted 1.3 years with an average cumulative loss of -36%. The average bull market lasted 6.6 years with an average cumulative total return of 339%. Keep your eyes on the long-term view, not the short-term.If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!

Responding to COVID-19

/in ,

As much has changed since our last newsletter out, we are deviating from our typical format to bring some tips in how to respond financially to our current state of affairs with regard to covid-19. We all need to take this one day at a time and handle the ebbs and flows as they come.

  • How is the rebate (aka stimulus money) going to get processed?: The rebate from the CARES Act will be is estimated on 2018/2019 tax filing but the final tally will be decided when taxes are filed in 2020. So if a taxpayer has a child in 2020, there is no immediate benefit from the stimulus but the taxpayer will eventually receive a rebate for the child when they file their taxes in 2021, presuming all other conditions are met. If the taxpayer’s 2020 income would be too high to qualify for the stimulus otherwise, no clawback is noted in the bill. The taxpayer is able to keep the money even though their 2020 income would have disqualified them. 
  • How should I use the rebate?:
    • If you have no savings, save it.
    • If you have some savings but have good reason to think you may lose work soon, save it.
    • If you have plenty of savings and reasonable job security, plan to spend the money or invest it back in the market.
    • If you spend it, try to patronize businesses that have been hard-hit has they will appreciate any business they can get right now.
    • Otherwise, take this as an opportunity to buy some stuff you’ve been putting off for a while, like home projects, new appliances, a car, etc., or give the money to institutions, charities, or churches that have been affected.
  • What’s happening with student loans?: Student loan interest and payments are waived until September 30, 2020. No action is needed on the part of the borrower to get this benefit. This will happen automatically by all of the loan servicers for Federal loans. The $0 payments will count towards PSLF. This is all fluid, however, so keep up to date with the most recent developments. What may have been correct a week ago (or even yesterday) may have changed.
  • Additional benefits from the stimulus bill:
    • Pre-mature distribution penalty of 10% is waived if pulling money out of retirement accounts in response to the impact of the Coronavirus. The money taken out can be contributed back to the account over the next three years, something not usually allowed.
    • Unemployment benefits have been expanded. You can file immediately with eligibility starting the very first week you are unemployed. The benefit can be as high as $600 per week for the first four months.
    • Michael Kitces put together a very helpful article that dives into specific examples for understanding the implementation and implications of the CARES Act. You can read more here.
  • Continue to do your part to minimize the spread of covid-19: Live life as you’re able to, as much as it was before this all happened. Support those on the “front lines” and thank them for what they’re doing. Many are putting themselves in harm’s way and are going unrecognized. Our life is a whirlwind like many others and we’re taking it one day at a time. “It is what it is” has become a mantra of sorts as we navigate these waters alongside you.

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

Refinancing Your Debt

/in

Interest rates are at historic lows right now, due to two factors that have not happened at the same time in the past: low interest rates and low credit risk. This combination (see more in “watch” below) is enough to encourage you to consider refinancing whatever debt you may have, be it a mortgage, student loans, or other consumer debt. Check out the following resources:

  • Read: This article from Bankrate informs the reader the impact the coronavirus has had on rates and treasury yield in the United States. 
  • Listen: Refinancing your home mortgage could save you thousands, especially if you can get a shorter term note without increasing your payment much. However, you need to take a close look at the fees from different offers you consider, i.e. “closing costs.” Just because the interest rate is lower doesn’t mean a refinance is good for you. If you plan to move before you recoup the costs of the refinance, then it might not be a good option. Listen to more considerations on this ChooseFI podcast. 
  • Watch: Travis Hornsby from Student Loan Planner details how super low interest rates and super low credit risk have not happened to this level at the same time ever. If you have student loans and are not working towards PSLF or IDR, check out the rates and consider refinancing your student loans for a lower interest rate.

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources. Thanks for reading, listening, and watching!