Common Sense Financial Podcast: Mindset & Growth

How much does an average rate of return matter? Or does it even matter at all? And what about your 401k? Is the way you’re approaching it the right one? Listen to this episode to hear a few common myths being busted – and get all the positives that will come your way as a result. The other day, Brian came across a quote that read,‘If things you thought were true were actually false, when would you want to know?’ As someone who is continuously seeking information to either support his way of thinking or to provide more insight into what he’s thinking, he tends to be pretty grounded, thanks to that process. One of the biggest half truths out there has to do with an investment’s average rate of return. Brian often hears mutual fund companies, investment advisers, and colleagues of his discuss investment averages and he uses this information to make decisions about which investment to choose. If you look at the math, you’ll notice that an investment’s average rate of return doesn’t mean much. Let’s say you hear

Money is a HUGE part of our life, yet schools don’t spend time teaching us how to manage it and most families don’t share their experiences with one another. Without guidance and learning best practices to achieve success, we are set up for FAILURE before we even begin our relationship with money. It seems reasonable to believe that it would be a good idea to acquire some training on how to effectively think about and handle money BEFORE we get started. These are a few basic points about handling and thinking about money that I believe are the FOUNDATION for all other decisions you will ever need to make with money. Everything is about cash flow Work to control the outcome Average rates of return are misleading The government is not your friend Unicorns aren’t real Banks are not your friends Projections are made up Don’t be a consumer Know the difference between leverage and debt

What should you know, consider, and do when it comes to your social security benefits? And what about Medicare? Join Social Security and Medicare expert Rich Grawer and Brian to learn about how to determine your retirement age, whether or not a non-working spouse can qualify for their spouse’s benefit, understanding potential taxes on your social security benefits, and in which scenarios one can qualify for Medicare. Social security and Medicare expert Rich Grawer addresses some of the most frequently asked questions Brian gets asked by his clients. In order to qualify for a social security benefit, you need the so-called 40 credits. You can gain a maximum of four credits a year, and in 2017 you had to have earned and paid social security taxes on at least $5,200. The full retirement age is determined by the year you were born: if you were born between 1943 and 1954, your retirement age is 66. If you were born it would be 66 and 2 months – and it keeps going up. After that, they take your 35 highest years of

What should you think about when positioning your 401k and pension assets? How can you avoid the pension trap many people fall into? Find out about the two main purposes of your money, the role your cash flow plays, and how to make the most out of your pension choices in this podcast episode. When you’re accumulating money – when you’re working and accumulating – you’re not needing the money that you’re saving. You’re putting it away for retirement. You’re living on the income that you’re receiving. In this phase, everything is about watching your account value grow. On the other hand, when you reach retirement and shift over to utilization, it’s no longer about rate of return. The focus here is on having money available when you need it. When it boils down to your money, there are two main purposes. Money can be used as a resource to produce income (the proverbial “golden goose” that produces income each month or each year for whatever duration of time needed). However, money can also be the money that’s se

The truth is that we all, as human beings, carry around this proverbial backpack of beliefs and emotions, and we carry it everywhere we go. And when we show up somewhere that's in a relationship and a conversation having to make a decision, we unpack the backpack. There's no hiding the backpack. It's with us all the time. It is full of of a lot of good things, but mixed in with it our limited beliefs that can wreak havoc with our decision making. These beliefs are just an accumulation of information that you either hear you read, you experience that can have you instantly forming an opinion that then drives your behavior and decision making. It's what drives your thoughts, your opinions, your attitudes and your propensity. Think about it. You eat bad sushi and then you get sick. That belief forms that sushi is bad and you throw that belief into the backpack. You go into a store and have a bad experience. You belief into the backpack. You meet someone for the first time and within ten seconds a belief is cemen

What’s the #1 thing successful investors are doing that average investors aren’t? What are some of the traps people typically fall into when it comes to investing that prevent them from achieving growth and freedom? Find out about what you can learn from Yale endowments, and what you should do to become a successful investor. ‘Nothing changes if nothing changes’ is one of the mantras around Brian’s house. It’s a reminder to not complain about an outcome or circumstance, but rather to try to find a solution. Typically, a simple mindset, behavioral or attitude shift, is all that’s needed to make the difference and get to a more favorable outcome. According to Brian, the truth is that the wealthiest investors in the world keep getting wealthier. This happens not because they're lucky or privileged, but because they're playing a different game than the average investor. They do not rely on 401k's average rates of return and stock performance to find security for themselves. The attitude wealthiest investors have

Sorting matters related to your retirement isn’t something you should wait until the last minute to take care of. What can you do to make sure you’re ready for retirement when time arrives? Learn about 6 things you can do right now to ensure that you’re indeed ready for retirement. If you are within six months away from retiring, there are certain things you need to do now to help prepare yourself for the transition into retirement throughout this retirement preparation process. While, at times, the retirement preparation process feels as if you’re making a series of rapid-fire micro decisions (Social Security benefits, Medicare options, pension elections, etc.), it’s important to understand that the decisions to be made are many and they have serious long-term ramifications. People often underestimate the complexities that exist when preparing for retirement and find themselves in over their head when making important financial decisions. Without understanding the long-term effects of one decision over anot

How can a mindset shift help you avoid one of the most common retirement planning mistakes? And how can you know assets you should set aside to generate the income needed to retire? Learn about the Five Minute Retirement Plan and why it’s an invaluable resource to leverage as you’re planning your retirement. The most common mistake people make when planning their retirement is assuming that the way wealth was created is the same way they should hold wealth in retirement, with the added twist of being a little bit more conservative. Popular belief suggests that, as you age, the level of risk an investor should take declines in an effort to preserve assets and protect them from market loss. Most people face a dilemma: by taking on too much risk they run the risk of losing money, while by not taking on enough risk they run the risk of running out of money. One approach often used is to simply keep the risk moderately high with the belief that profits can be skimmed from the portfolio while remaining below the t

Most people think about what investments they should be making or what stocks they should have in their portfolio when they approach retirement age, but they are going about it backwards. Brian Skrobonja breaks down the calculations you need to make in order to understand how ready you are for retirement and what your retirement plan needs to factor in to be truly financially free. How do you know when it's safe to retire? The answer depends on your plan and understanding the most important numbers in retirement. Success is the result of following a plan to fruition. The more specific the plan is, the higher the probability of reaching the goal. If you’re on the cusp of retirement, you may have a number of new questions and concerns starting to enter your mind. Are you invested in the right assets for retirement? How much should you be withdrawing from your accounts? Do you have enough saved up to last your whole retirement? If you search the internet, you’ll end up finding a lot of often contradictory advic

What can you do right now to make this year the best year financially that you've ever had? And what is the one thing that makes some people achieve financial freedom faster than others? Learn about the simple mindset shift that will change the way you think about financial freedom and a quick mental exercise you can do to make that shift right now. There is a hidden danger that most people don’t even realize is a risk to their wealth and it’s the status quo. The slow slide of entropy limits your potential for growth. Brian made a commitment to himself a few years ago to get into better shape, and as much as the actual exercise and nutrition helped him lose weight, it was breaking his routine and changing things up that really unlocked things for him. The mindset shift from being someone “who doesn’t work out” to someone “who does work out” was a monumental change. Even a small mindset shift can make a difference when followed up with action. Many people dream but most never execute. For the majority of the

The Chinese proverb “rags to rags in three generations” says that family wealth does not last for three generations. The first generation makes the money, the second spends it and the third sees none of the wealth.   The Chinese aren’t the only ones who acknowledge this as a problem. In the U.S. it is referenced as “shirtsleeves to shirtsleeves in three generations,” and in Japan it’s “rice paddies to rice paddies in three generations.”   These sayings contradict what I hear clients tell me they want their money doing for them after death. After nearly three decades of assisting families with estate planning, what I have found is that the majority have a deep desire to leave a legacy for their family. The idea of leaving a thumbprint on future generations seems to give meaning to what people spend a lifetime accumulating. So the question is, if people have an inherent desire to leave a legacy for their families, why is there such a high failure rate among generational wealth? I believe the answer lies in how

When I talk about my definition of retirement, I think it sometimes catches people off guard.   In my mind, retirement is not who you are or where you’re at in life, rather it is the transition of your time and money.    In other words, it is a process you go through … not your identity.   The transition for money is a transition from accumulating money to utilizing it.    For time, it is a transition of reallocating the 40-plus hours per week you spent working.   This distinction of what retirement means is an important one to make, because many people identify themselves with their work — but when someone is no longer working, they default to labeling themselves as “retired.”    Here is the problem: This default “I’m retired” mindset leaves people stuck, and they never really progress toward reinventing themselves.   In essence, they have made retirement their new identity, which just seems odd considering when you say something is “retired” it often infers that it has outlived its usefulness.   But I don’t

We all have blinders about various things in our life that leave us blind to things we do not know or understand. What is a blinder?  Well, it could be a bias about something, it could be a protection mechanism to ignore something, it could be immaturity about something or it could simply be ignorance of not knowing any better.  In fact, what I have found is that for most people who are experiencing investing immaturity is that once they are provided more education about how to invest, they often move past this stage into more advanced wealth strategies. The best way to look at this is that like anything: We only know what we know.  In other words, the root cause of investing immaturity for most people is simply not knowing any different. To make the most of your investments, you need to think about them in the right way because investing immaturity can hold you back from reaching the next level with your finances.     This is an encore presentation of one of our most popular episodes.

We often hear the mantra that debt is bad. Yet that doesn’t stop the majority of people from assuming they will always have bank payments.  For many, using credit to purchase vehicles, take vacations or fund home improvement projects is a normal mindset for making their lifestyle work. They believe borrowing money to fill income gaps is the answer to supporting their lifestyle. In reality, it enters them into a money hamster wheel, which means they work to earn a paycheck and then spend the money they earn to pay bills and make payments to the bank. This is flawed logic and creates a trap or cycle of continuously relying on banks to fulfill your cash flow needs.   Reset Your Thinking and Reclaim Your Financial Situation Let’s take a step back and look at the big picture when it comes to money. That big picture is actually relatively simple: Money is either flowing toward you or away from you.  If money is flowing toward you, you have control.  If money is flowing away from you, you are giving up control. This

Employees love their 401(k)s, but love can be blind. These plans are riddled with traps, restrictions and caveats that are not apparent until you attempt to access your money out of the plan. Retirement savers need to open their eyes to some serious flaws built into these accounts. A 401(k) is a type of employer-sponsored retirement savings plan utilized in for-profit organizations. Related types of plans are the 403(b), used in not-for-profit and education, and 457 plans, designed for government employees. While all different, each is categorized as the same type of plan, designed for participants to save for retirement.   First, the Good The good news with these accounts is that they are an easy way to save for retirement. Through payroll deductions, you can set a percentage to be taken from your paycheck and deposited into the plan for your retirement. Often this contribution can be tax deductible, reducing your current year tax liability. Some plans even offer a matching contribution, which means that you

Finding Yield In a Low Interest Rate Environment    It is no secret that savers are having a difficult time knowing how and where to hold their cash in this low interest rate environment.  Storing money in traditionally “safe” places no longer makes sense and has pushed some into more risky alternatives — such as fixed income securities like bonds and, in some cases even the stock market — in search of yield. However, while fixed income securities may offer a potentially higher yield than deposit accounts, they are not a “safe” alternative for storing cash since there is potential risk of losing principal due to longevity and interest rate risk. So the question is, what do you do when traditional methods for storing money are no longer working?  There is an answer, but you must first understand two things: The future is looking to be much different than the past Looking back, we find that interest rates climbed for 40 years (early 1940s – early 1980s) then changed direction and began a steady decline for t

When my kids were growing up, many days my wife would sit with them on the floor putting puzzles together. They would laugh and talk as they worked together arranging the pieces to create the picture on the box. When the kids were young, the puzzles consisted of 20 pieces that could be put together without much need for the picture on the box. The older the kids got, the more complex the puzzles became and the more important the picture became for them to fully study, understand and refer back to in order to complete the puzzle. The same is true for a financial plan. When someone is just getting started with his or her financial life, the process can seem rudimentary without much consideration. However, as assets are accumulated and life becomes more complex, the picture on the box becomes the most important part of assembling the puzzle.   The Importance of the Picture on the Box Think of your personal financial situation as a puzzle made up of dozens of pieces.  The pieces represent all of the products, pro

The Chinese proverb “rags to rags in three generations” says that family wealth does not last for three generations. The first generation makes the money, the second spends it and the third sees none of the wealth.   The Chinese aren’t the only ones who acknowledge this as a problem. In the U.S. it is referenced as “shirtsleeves to shirtsleeves in three generations,” and in Japan it’s “rice paddies to rice paddies in three generations.”   These sayings contradict what I hear clients tell me they want their money doing for them after death. After nearly three decades of assisting families with estate planning, what I have found is that the majority have a deep desire to leave a legacy for their family. The idea of leaving a thumbprint on future generations seems to give meaning to what people spend a lifetime accumulating. So the question is, if people have an inherent desire to leave a legacy for their families, why is there such a high failure rate among generational wealth? I believe the answer lies in how

I’m an entrepreneur and just so happen to be in the business of providing other entrepreneurs with financial advice.   But I don’t typically offer up the usual status quo advice that tells you to do things that aren’t always in alignment with growing your business.   My views originate from my experiences and at times are contrarian to what’s being recommended by the usual tax preparer and other financial advisers, because I am in the trenches running a business just like you.   I know what it takes to grow a business, make payroll, deal with IRS notices and manage cash flow.   The truth is that being an entrepreneur can be isolating at times as a result of being wrapped up in the day-to-day of running your business.   When you are hyper-focused on your business, it is difficult to also be an expert at managing the profits of the company.  You may be great at making money, but once it’s made, what do you do with it?   Thinking differently about your company and how you will use it to build wealth is the key t

When I talk about my definition of retirement, I think it sometimes catches people off guard.   In my mind, retirement is not who you are or where you’re at in life, rather it is the transition of your time and money.    In other words, it is a process you go through … not your identity.   The transition for money is a transition from accumulating money to utilizing it.    For time, it is a transition of reallocating the 40-plus hours per week you spent working.   This distinction of what retirement means is an important one to make, because many people identify themselves with their work — but when someone is no longer working, they default to labeling themselves as “retired.”    Here is the problem: This default “I’m retired” mindset leaves people stuck, and they never really progress toward reinventing themselves.   In essence, they have made retirement their new identity, which just seems odd considering when you say something is “retired” it often infers that it has outlived its usefulness.   But I don’t