3 Ways To Prepare Your Teenager For Financial Independence

By Jeff Gilbert

Teenagers aren’t always known for being logical and responsible, especially with money. But given the right tools and opportunities, this is an ideal time for them to set a financial foundation that will benefit them for the rest of their life. So, before they leave the nest and head out into the real world, take these steps to help them prepare for financial independence.

1. Let Them Earn An Income

Kids learn best by doing, by having hands-on chances to try something, fail or succeed, and learn from the experience. If your teen is old enough, let them get a part-time job, either permanently or temporarily, during school breaks. If they’re not quite old enough (or too busy with extracurricular activities), pay them for doing jobs around the house, whether that’s mowing the lawn, making dinner, or cleaning out the garage. 

Letting your teen earn their own income is exciting! It teaches them about taxes, gives them their own spending money, helps them become a more responsible and independent person, and allows them to feel empowered and capable.  

2. Help Them Set Financial Goals

Once your teen has some income to work with, help them set financial goals. They may want to save for a car, some college expenses, or even a post-graduation trip with friends. Whatever it is, help them calculate how much they need to save each month to reach their goal by a certain date. This gives them something tangible to work toward and shows them the value of saving. If they are motivated to save for something in the future, it encourages them to weigh the opportunity cost of buying something now versus saving it for later.

3. Show Them How To Track Spending

We all know how little purchases can add up to huge expenses over time. Coffee on your way to work. Take-out on your way home. A small purchase on Amazon. Before you know it, $100 is out the window. 

Your teen can keep their spending in check by tracking their own expenses. As a tech-savvy teen, they’ll likely find a budgeting app more appealing than using the old pen-and-paper method. A quick online search will reveal several apps out there that can help your teen stay on top of their spending and track expenses in real time. 

Set Them Up For Success!

Teaching your teen the importance of financial independence is no easy feat. But if you put in the hard work now, they’ll be less likely to depend on you financially in their 30s and beyond. At Balboa Wealth Partners, we’re dedicated to helping you and your teen reach financial success. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com if you’d like us to do just that!

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

How To Prepare For The Potential Economic Impact Of Our Current Crisis

By Jeff Gilbert

COVID-19 may be primarily a health crisis, but it’s already had a significant impact on our economy. With thousands of businesses temporarily shut down and millions of people staying at home, we could be on the brink of a recession. And as some economists have predicted, the longer our economy is on pause, the harder this potential recession may hit. (1)

Regardless of what the future holds, here are 5 ways to financially prepare for the next economic downturn. 

1. Don’t Panic

Right off the bat, stop and take a deep breath. Accept that there are going to be things that happen during a recession that are out of your control. Your portfolio will dip. Your work hours may be cut or you could lose your job altogether. The media will go on and on about the disastrous state of our economy. There will be moments of fear and doubt. 

But instead of giving in to these feelings, focus on the facts. We’ve had 12 recessions since World War II—and we’ve recovered from all of them in an average of 11 months. (2) This too shall pass.  

2. Build Up Your Cash Reserves

Nearly 70% of Americans have less than $1,000 in savings. (3) If you’ve kept your cash reserves pretty lean up until this point, now is the time to build them up. Make sure you have at least six months of expenses in an emergency fund. If you’re nearing retirement, you may want to bump it up to a year or two. Keep this money in a liquid savings or money market account where you have easy access to it when you need it. 

One quick way to build up cash reserves is to cut out any unnecessary spending. This could be subscription services, shopping, vacations, and so on. You can also sell any items you no longer want or need. Remember, this isn’t forever. You can increase your spending once you’ve built up your savings. This is all about recession-proofing your finances so you’re ready for whatever comes next.

3. Pay Off Debt

Debt is an issue for most people even when the economy is at its best. But this issue magnifies when your investments take a hit and there’s a risk of losing your job. Make a plan now to pay off as much debt as you can. This could be anything like credit card debt, medical debt, car loans, and student loans. The more you pay off now, the fewer expenses you’ll have in the future (and the better off you’ll be if things take a turn for the worse).  

4. Don’t Stop Investing

Our gut reaction is to sell when the market is shaky and buy when it’s strong. But this is the exact opposite of what we should do. In reality, a recession is the perfect time to buy investments at a steep discount.

The average bear market lasts 1.3 years with an average 36% dip. But bull markets usually last 6.6 years with an average 339% increase. (4) This means that if you buy when the stock market is at its worst, you’ll reap the benefits of huge gains when it rebounds (which it historically always has).

5. Diversify Your Skill Set

Losing your job is everyone’s biggest fear during a recession. Minimize your chances of a layoff by keeping your skill set sharp. Some common ways to do this include: 

  • Maintaining certifications
  • Taking online classes
  • Earning an advanced degree
  • Taking on new responsibilities at work

Even if your company ends up downsizing and you’re on the chopping block, improving your skill set will make you more marketable to future employers, which will make it easier to find a new job. 

How We Help

Recessions are inevitable. There’s nothing we can do to stop them. But there are concrete ways you can prepare for the next one. In addition to the suggestions above, one way to recession-proof your finances is to get unbiased advice and guidance from a financial professional. 

At Balboa Wealth Partners, we’re dedicated to guiding you toward financial independence. Whether you need help managing your assets or creating a financial plan to help get you through the next recession, we’re here to help. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com to get started.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

____________

(1) https://www.brookings.edu/blog/up-front/2020/04/01/covid-19-and-the-economy/

(2) https://www.nber.org/cycles.html

(3) https://www.gobankingrates.com/saving-money/savings-advice/americans-have-less-than-1000-in-savings/

(4) https://www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d

How To Manage Your Finances In A Crisis

By Jeff Gilbert

Change is hard on everyone. And the changes that are happening daily due to the coronavirus pandemic, not to mention the roller-coaster ride our markets are on, are disrupting our lives, causing us to feel uncomfortable and worried about the future. We are living in unprecedented times and no one can predict what will happen or what our nation’s and world’s recovery is going to look like. 

But just because we didn’t see this coming doesn’t mean you are powerless. There are certain measures you can take to give you peace of mind now, as well as opportunities for you to improve your financial picture and make positive changes that could benefit you for years to come. 

Here are 5 financial actions you can take during these turbulent times.

1. Check In With Your Advisor About Your Portfolio

Your advisor is educated about what’s going on and will be able to give you clarity on exactly what is happening to your portfolio. This is an important first step since you should feel confident that you have a well-balanced portfolio, based on your needs and your risk level. 

2. Take Advantage Of Lower Prices By Maintaining Discipline 

This quote by Warren Buffett is all too applicable: “Be fearful when others are greedy and greedy when others are fearful.”

In every stock market downturn, opportunities are waiting for those with the right perspective to see it. Where many people go wrong in volatile times like these is selling near the bottom of a bear market, staying on the sidelines during a good portion of the recovery, and then jumping back in closer to the next top. Put that together, and you not only lose money but also lose out on potential growth and compound interest from the time you were out of the market. Emotional investing will cost you.

It may seem counterintuitive, but keep investing consistently. When stock market prices are down, think of it as an opportunity to snap up some bargains before the recovery takes place. In the previous market crash of 2008/2009, the people who continued to invest strategically made a significant return on their investment. 

3. Consider Tax Loss Harvesting

Tax loss harvesting is the strategy of selling a security that has experienced a loss. By realizing a loss, investors can offset taxes. The sold security is usually replaced by a similar one to maintain the desired asset allocation and expected returns. With the markets hitting low points, it might be an ideal time for you to sell something and take the loss, but then buy something to participate in the market’s recovery. If you look for the opportunity to invest in something similar or rebalance, you win and have a tax deduction to use for this year and potentially even future years. 

Before doing this, talk with your advisor about how much of a difference this could make on your financial plan.

4. Look Into A Roth Conversion

Market downturns are the perfect time to convert to a Roth IRA and pay significantly less in taxes, not to mention we may be at the lowest tax rates we will see in our lifetime. Let’s say you have an IRA that used to be worth $100,000 and is now worth $75,000. You could convert this position now and pay less in taxes than what you would have paid when it was worth $100,000…25% less.

There are many factors to consider when deciding if a Roth conversion is right for you, such as your current income versus your expected retirement income, your projected minimum required distributions, the tax implications, current liquidity, etc. Making this decision is something you should discuss with your advisor. 

5.  Look For Unique Opportunities

A few other opportunities you could take advantage of with lower interest rates and stock prices are the following:

  • Consider refinancing your home.
  • Purchase future travel at a discount. 
  • Fund a 529 for your child’s college tuition with low market prices.
  • Refinance any outstanding debt.
  • Buy a home at a discount if you are renting. 

Are You Ready To Take Control?

When this market volatility has passed (and it will), some will lose, some will break even, and some will get ahead. We at Balboa Wealth Partners want to see you get ahead, and we welcome the opportunity to help you make decisions that will enhance your finances so that when we go back to our regular routines, we do so with more clarity and confidence. To get in touch, email us at jgilbert@balboawealth.com or call 949-445-1465 to set up a phone or virtual appointment. 

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

The Biggest Financial Mistakes I See

By Jeff Gilbert

Life is hectic. If you’re like me, you run around day after day trying to finish a to-do list that never ends. This infinite to-do list is loaded with tasks we know we should do but can never seem to find the time to do them.

One of these neglected tasks is taking time to examine our financial health and make sure we aren’t making mistakes that will come back to bite us down the road. Unless we are constantly reminded of these common financial mistakes (and their consequences), life tends to take over and we forget.

Well, today I’m giving you a friendly nudge. Here are the three biggest financial mistakes to avoid—mistakes that are easy to make but that have huge consequences.

1. Failing To Set Up A Will And A Trust

One mistake I often see with new clients is that they don’t have a will or a trust set up. Nobody likes to think about accidents or death, but if you fail to set up these documents, you’re putting the well-being of your loved ones at risk. Let me explain.

A will is a document that gives instructions on how to distribute your assets when you die. It also indicates who will become the legal guardian of your minor children. Without a will, you are leaving this all up to chance—not a good idea! So, unless you are single, broke, and have no kids, you need a will.

A trust is another document used to transfer your estate when you die. Depending on your situation, a trust could make the asset distribution process faster (and less expensive) for your beneficiaries. The best way to find out if you need a trust is to speak with a financial advisor. 

2. Waiting Too Long To Start Saving

When you’re young, life is complicated. You’re busy studying, starting a career, finding a life partner, raising kids, and frantically trying to squeeze in a social life. That’s a lot of time, energy, and expenses. And unfortunately, it usually means your retirement plan is put off until “someday when things settle down a bit.”

This common mistake has serious consequences.

If you wait until mid-life to start saving for retirement, you lose your most powerful wealth-building tool: time. Every year you wait to contribute to a retirement account is a year less of compounding interest.

Whenever I ask people why they waited so long to start, it’s usually related to procrastination. “Oh, I’ll start contributing to that Roth next year when I have fewer expenses.” But then one year turns to two, two to five, five to 10—and before they know it, they’re 45 years old with zero dollars saved for retirement.

Please don’t do this!

3. Not Having A Plan

The last critical mistake I see is when people move through life without a financial plan. They have no written road map outlining the steps to reach their short-term and long-term goals. Many times, they don’t even know what those goals are!

Here’s a hard truth: You can’t just save some money here and there and hope for the best. It doesn’t work that way. This path leads to disaster. If you want to build the wealth needed to reach your lifestyle goals, you first need to define those goals, and then you must work backward to create a step-by-step plan.

This is exactly what we at Balboa Wealth Partners help our clients do. If you’re interested in a no-obligation conversation about how we can help you design a personalized program to reach your financial goals (and avoid the above mistakes, among others), give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

How Much Life Insurance Do You Need?

By Jeff Gilbert

Life is full of unpredictable events. If you start thinking about everything that could go wrong, you’ll give yourself gray hair and a hefty dose of anxiety. That’s where life insurance comes in. It may not solve all your worries, but it does protect your loved ones if the worst-case scenario becomes a reality.

But knowing you need life insurance is only the tip of the iceberg. Life insurance can be complicated and is not a one-size-fits-all product. Everything from the type of insurance you get to the amount of coverage you receive will depend on your unique situation. Even though there’s no exact formula, here are a few questions you can answer to help you evaluate your life insurance needs.

Is It Necessary?

Not everyone needs life insurance. If you have enough money saved so that your death would not create a financial hardship for your loved ones, an insurance policy might be an unnecessary line item in your budget. If you are a single young adult with no dependents, you may only need a small policy to cover the expenses of a funeral and burial. Take a good hard look at your financial situation and decide if life insurance is the right fit for you.

Permanent Or Term?

Now that you have an idea of how much coverage you need, you’ll need to choose the kind of life insurance that is most appropriate for your situation. Here’s a breakdown of the two primary types of life insurance.

Permanent Insurance

Permanent insurance is coverage that is not limited to a specific duration of time, meaning it can potentially last your entire life. There are several types of permanent insurance, including Universal Life, Indexed Universal Life, and Whole Life. The benefit of permanent insurance is that it can last longer than a term policy so that a death benefit will be paid to your beneficiary no matter when you die (assuming your policy has been funded properly). This type of insurance is typically more expensive than term insurance.

Term Insurance

Term insurance offers coverage for a specified length of time, which can be anywhere from 10 to 35 years. The downside to term insurance is that it only covers you for your specified length of time, so if you pass away after the term is over, no death benefit is paid to your beneficiary. But depending on your situation, you may only need insurance for a certain time period—until your kids are grown or you have enough money saved to avoid financial hardship. One of the major benefits of term insurance, as opposed to permanent, is that it is usually the most inexpensive out-of-pocket option.

What’s My Ideal Coverage Amount?

Finally, the question at the forefront of your mind. Here’s how to dig into the numbers to calculate how much coverage you need to protect your family adequately. 

The DIME Method

Conduct a needs analysis by separating your finances into different areas:

  • Debt and final expenses
  • Income
  • Mortgage
  • Education costs

In addition to these areas, two of the biggest factors that affect how much insurance you need are your marital status and your financial dependents. The more people depend on you, the more coverage you need. 

Multiply It

After calculating and totaling each of those dollar amounts, apply an income replacement multiplier to determine your needed coverage amount. The multiplier varies based on your age and the status of your home mortgage. For example, if you’re under 50 years old, you can likely use a multiplier of 20. Older couples may be able to use a multiplier of 10 or 15, depending on the number of years left on their mortgage. 

Keep in mind that these are just guidelines designed to give you a general idea of the amount of insurance coverage you need. There may be adjustments for your particular situation and what makes the most sense for your family. 

Put It All Together

You now have a sheet of paper with a lot of different numbers on it. Here’s how to put it all together.

  • Combine your annual income (plus the multiplier), your mortgage balance, your debt load, estimated future financial needs, and death expenses. 
  • Then subtract your liquid assets (think savings, life insurance policies you already hold, any college funds, etc.).
  • The number you end up with should give you a general idea of how much insurance you should buy. 

Now What?

If you’re ready to take the plunge into life insurance, it can be helpful to talk to a financial professional and review your options. Our team at Balboa Wealth Partners is experienced with insurance policies and can offer you guidance on the products available to you and how they can integrate into your other financial strategies. If you have questions about your life insurance policy or would like to schedule a review or discuss your options, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

What Should You Do About Market Volatility?

The U.S. stock markets had the worst day of the year on Monday, reacting to news of escalating trade issues with China and fears of an economic slowdown. After the Dow closed down 767 points, investors are understandably nervous. If you are worried about your retirement accounts, you’re not alone. But during stock market volatility, it’s important to keep a level head to avoid financial mistakes.

To put our current market environment in perspective, let’s take a look back at history. Single-day 1,000-point gains or losses for the Dow Jones have only happened eight times in stock market history, but in 2018 alone, there were five separate occasions when the Dow Jones moved more than 1,000 points in one day. (1)

It’s understandable to be worried with so much volatility in the air, but we want you to know that we’re here if you have questions or want to talk. Here’s what we recommend during times of increased market volatility.

Stay Calm

At times like these, it’s important to put current conditions into perspective. This is not the first time the market has taken a tumble and it won’t be the last. Declines in the Dow Jones Industrial Average are actually fairly regular events. In fact, drops of 10% or more happen about once a year on average.

Play Dead

There’s an old saying that the best thing to do when you meet a bear market is the same as if you were to meet a bear in the woods: play dead. While easier said than done, successful long-term investors know that it’s important to stay calm during a market correction. 

Market volatility has increased in recent years and the media can often make it seem like each episode is worse than the one before. In reality, volatility does not hurt investors, but selling when the market is down will lock in losses. We recommend not making changes in your long-term financial plan due to short-term market fluctuations.

Remember That Your Portfolio Is Diversified

Volatility and market declines are stressful. But keep in mind that while the stock market may be down significantly, your portfolio is made up of both stocks, bonds, and other assets that are designed to work together to decrease overall losses in times like these. If you have questions about your portfolio, please get in touch.

Review Your 401(k) And Other Accounts

Now is a good time to take a look at all of your investment accounts, including your 401(k), to make sure they are diversified well. If you have not reviewed your other investment accounts, get in touch with our office and we’ll take a look and offer recommendations to minimize potential losses.

Turn Off Your Phone (Or TV)

In today’s digital world, we have 24/7 access to the countless number of news media outlets. Because sensationalism sells, most of what you hear will be dramatic. While things may be down for the moment, history shows us that if you wait a couple of years, the gains will likely outweigh any losses you have experienced. 

For example, think back to where you were in 2000, 2011, and 2015, all difficult years for the stock market. Do you remember what you did then? Probably not. Over time, these swings look more like bumps in the road as you zoom out and put today’s upheaval into the broader picture. 

Speak With Your Advisor

Whether you’re new to investing or an experienced investor, it’s helpful to consult with an objective third party. Human nature causes us all to act out of emotion when our accounts go down. As an independent firm, we put your best interests first. We seek to serve as a support system for our clients, helping them make informed financial decisions that aren’t driven solely by emotion. 

We’re Here For Your Friends And Family

If you have friends or family who are worried about their financial plan, we are happy to offer a complimentary portfolio review and recommendations. We can discuss what is appropriate for their immediate needs and long-term objectives. 

Sometimes simply speaking with a financial advisor may help investors feel more confident and less concerned with the day-to-day market activity. We’re never too busy to help those you care about, so please forward this email if you know someone who needs our help.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

___________

(1) https://www.cnn.com/2019/01/01/investing/dow-2018/index.html

Love And Money: Financial Planning Considerations For Couples

By Jeff Gilbert

When you’re part of a couple, you’re a team. You plan vacations together and support each other’s pursuits, but do you manage your money as a team? Whether you have joint or separate accounts, are savers or spenders, enjoy talking about money or would rather stick your head in the sand, you’ve probably experienced the tension that finances can cause in a relationship.

Is it even possible for love and money to peacefully coexist? Here are a few simple strategies that may help couples avoid financial friction.

Be Honest

As nice as it would be, financial honesty isn’t a guarantee in a relationship. It’s important for both partners to offer full disclosure of their finances. You and your spouse should be aware of how you spend your money, especially when it comes to significant expenses, loans, or ongoing fees. By maintaining an open line of communication regarding spending habits and upcoming bills, you may be able to keep financial arguments at bay.

Time It Right

Since conversations about money are often emotionally charged, choose a time to talk about your financial situation or make decisions when both of you are at your best. Don’t wait until the end of a long, stressful day or right before you have to walk out the door. It’s also important to be preemptive, having discussions to set boundaries and expectations to avoid future problems. In other words, don’t wait until one of you splurges on a new TV or you go over budget on a vacation to set limits on spending.

Take Ownership 

Most often, one spouse acts as the Chief Financial Officer of the household, managing all bills, budgets, savings, investments, and insurance policies. However, it can be helpful for both partners to understand their financial situation. If time allows, sit down together once a month for a financial check-in to review credit card statements, account transactions, and other bills and check for any possible errors. Ongoing input from both partners will strengthen your relationship and create a true partnership.

Find The Right Fit

You don’t have to go far to find financial advice, but not every system or philosophy will work for your relationship. Glean ideas from experts, family members, or friends, but be flexible, allowing yourself to experiment and find a financial framework in which you both can thrive. Don’t be afraid to experiment with different methods of budgeting, saving, or debt payoff, and remember that as life changes, you may need to adapt your finances to your new circumstances. 

Reward Yourself

Set aside a portion of pocket money that you and your spouse can each spend every month on something you love, whether it’s a massage, a round of golf, or a steak dinner. Along with saving for long-term goals, set small objectives you can reasonably accomplish each month and celebrate your success.

Bring In A Third Party

Sometimes the best way to ease money tensions is to work with an objective third party, whether that’s a financial professional, a marriage counselor, or both. A financial professional can work with you and your spouse to review your financial landscape, identify any gaps in your insurance coverage, assist you in establishing short-term and long-term goals, help you stay on track, and provide professional and knowledgeable advice.

Although the topic of finance can occasionally cause tension, money doesn’t have to become a constant source of concern in a relationship. Invest the time to address spending habits and savings goals, uphold transparency regarding purchases, and communicate effectively.

How We Can Help

At Balboa Wealth Partners, we care about your relationship. We want to help you and your partner by walking you through the challenges of life and acting as your advocate as you pursue your financial goals together. If you know that your relationship and your finances would benefit from the objectivity and experience of a professional, we are here to help. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com to set up a no-obligation appointment and start down the road to financial harmony. 

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals and to worry less about their finances and more on their passions in life. Based in Orange County, he works with clients throughout Southern California, as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

$1 Million Isn’t What It Used To Be

By Jeff Gilbert

It used to be that $1 million was synonymous with financial security and success. Unfortunately, those days are over. While $1 million is still a considerable amount of money, it may not provide the independence you dream about. With the impact of rising living expenses, healthcare costs, and unexpected life circumstances, $1 million in your savings account might not get you as far as you’d think. Here’s why.

Big Bad Inflation

Put simply, inflation erodes your money’s value. Inflation has often been nicknamed the silent retirement killer because so many people forget to account for it in their income planning. While there’s not much in life that’s guaranteed, inflation is a certainty. Over the last 50 years, the cost of goods and services has increased an average of 3.7% per year. (1) Let’s say inflation continues to average 3% a year. In 40 years, $1 million will be worth $306,000 in today’s dollars, and that’s definitely not enough to buy you a comfortable 30-year retirement. 

To put these numbers in perspective, let’s look at history. If you wanted to have the same purchasing power as a millionaire from 1914, you would have needed $3 million in 1980. But here’s the shocking number: in 2019, you would need $25 million to match the $1 million of 1914. (2)

Rising inflation tends to happen so gradually that it’s hard to see the effects of it on your wallet year to year. When saving for retirement, you need to calculate that effect forward anywhere from 10-50 years in the future. So if a new car costs around $5,000 in 1980 and $34,000 in 2019, you could find yourself spending over $65,000 to upgrade your vehicle in 2041. (3)

Protect Your Retirement From Inflation

We can’t predict the future, but we can prepare well based on historical data. Since you need your retirement savings to last as long as you do, implement these potential solutions in your financial plan. 

Stick To Conservative Withdrawal Rates

Since you know that stocks have historically earned an average of 7-8% a year, you might assume that you can afford to withdraw 7-8% of the initial portfolio value (plus a little more for inflation each year). (4) But in reality, to protect against the uncertainty of the market, you may need to limit your withdrawals to less than 4%. (5) Because there is no simple, one-size-fits-all plan, you need to figure out what will work for you and your unique situation, taking various factors into account, such as time horizon, risk tolerance, asset allocation, and unexpected living expenses.

Set Up Contingencies

There is sophisticated software available to factor in inflation and calculate how long your money will last based on where you live, which withdrawal rate you choose, and what the markets will do. But there are some things a computer just can’t predict, such as your health. 

According to the Employee Benefits Research Institute, the average couple at age 65 will require anywhere from $151,000 to $255,000 just to cover their healthcare costs in retirement. (6) Build contingency funds over and above your regular retirement account to give yourself a bit of a savings buffer. There will always be unexpected expenses in life, whether it’s needing a new car, home repairs, or unexpected long-term care expenses. Planning ahead will give you peace of mind. 

Save More And Spend Less

The longer your planning horizon, the more resources you will need for retirement. The most obvious way to lower the risk of outliving your money is by saving more before you retire and underspending when you reach retirement. If you have any debt, focus on reducing it as much as possible so your resources can be devoted to saving.

Adjust Your Mindset

Retirement often means major lifestyle changes. As a result, your expectations may need to change as well. If you want a comfortable retirement, you may have to rethink how much you will be able to give your children as a down payment on a house or an inheritance. 

You may even need to downsize your home or relocate to a more affordable area. Cost of living varies drastically across the U.S. When you are determining how much money you need for retirement, location can make all the difference. For example, if you live in California, $1 million (in today’s dollars) will only last about 15 years and 6 months. But if you live in Mississippi, it’s estimated that $1 million will last almost 26 years because of affordable living expenses that fall below the national average cost. (7)

Stay flexible and be willing to make adjustments in order to secure your financial future and stretch your wealth as far as possible.

Secure Your Retirement  

It can be disheartening to look at the numbers and realize that what you were aiming for is not enough. But by making small changes now and planning ahead, you can set yourself up to experience the retirement you dream of. Use these pivotal years to implement strategies to protect, grow, and transfer your wealth. If you want a customized financial plan to get you from point A to point B, Balboa Wealth Partners is here to help. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com to set up a no-obligation meeting. 

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals and to worry less about their finances and more on their passions in life. Based in Orange County, he works with clients throughout Southern California, as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

__________

(1) https://www.usinflationcalculator.com/inflation/historical-inflation-rates/

(2) https://www.dollartimes.com/inflation/inflation.php?amount=1000000&year=1970

(3) Estimating 3% inflation rate. https://www.financialsamurai.com/are-you-a-real-millionaire-3-million-new-1-million/

(4) http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm

(5) https://www.nytimes.com/2015/05/09/your-money/some-new-math-for-the-4-percent-retirement-rule.html?_r=0

(6) https://www.ebri.org/pdf/notespdf/ebri.notes.oct13.retsvgs1.pdf

(7) https://www.gobankingrates.com/investing/how-long-million-last-retirement-state/2/

Our Mid-Year 2019 Economic Update

By Jeff Gilbert

Now that we are well into 2019, it’s time to take a look around at the economy. Despite the shaky start to the year, things are looking up! Here’s a quick overview to get you up to speed.  

Good Market Days

So far, 2019 has been a breath of fresh air for investors, who got the wind knocked out of them at the end of 2018. Not only have markets managed to recover from the tailspin that started at the end of September, but they have reached new highs. U.S. stocks were up 18.59% after the first four months of the year. (1)

While there were many factors that led to the market drop last year, two big ones were uncertainty over trade talks between the U.S. and China and fear that the Fed would continue to raise interest rates. Though still not solved, relations with China have improved greatly, leaving investors optimistic. The Fed also announced that they would halt rate hikes at the beginning of the year, paving the way for the impressive gains that we have seen thus far in 2019.

Employment Keeps Going Strong

The economy has also been bolstered by a continually tight labor market. Unemployment rates continue to hover near 50-year lows. This means that employers are having to increasingly compete for talent, which has pushed wages higher. Hourly wages are up 3.2%, (2) which is good for workers but will lower profit margins for businesses.

There was a moment of worry when the February jobs report was released with appallingly low numbers. However, fears were allayed with the March jobs report that exceeded expectations. Overall, the labor market remains robust, with slower job growth due more to a lack of qualified workers than anything else. (3)

GDP Is Growing

Gross domestic product (GDP), which measures our nation’s economic output, continues to grow. While there has been concern that the rate of growth is slowing down, first quarter GDP surprised analysts by growing at an annualized rate of 3.2%. (4)

The Fed Got Out Of The Way

Both the stock market and the economy owe some of their current success to the Federal Reserve. The Fed has been helpful not because of what they have done, but because of what they haven’t done.

After five successive quarters of rate hikes, the Fed finally pushed pause in March. Instead of continuing to raise rates, they indicated that they will hold off for 2019 to see what happens with the economy. This was enough to renew investor confidence and drive the impressive stock market gains that we have seen so far this year.

The World Isn’t Too Far Behind

While the U.S. economy continues to chug along, the rest of the world isn’t doing too bad either. There were concerns that China, the world’s second largest economy, was slowing, but some strategic moves by the Chinese government and a surge of industrial production led to better-than-expected GDP growth of 6.4% for them in the first quarter. (5)

Brexit is still a thorn in Europe’s side, as it seems the British government cannot agree on an exit plan. However, the negative economic effects have been minimal so far, especially with regards to the stock market. Thanks to continued growth worldwide, the MSCI All Country World Index is up over 15% so far this year. (6)

But It Can’t Last Forever

There is no doubt that we are now in the late-cycle phase of the expansion. Several months ago there was a real fear that the end was here, but concerns over a global recession have lessened. While we are seeing slowing in some quarters, the underlying economic fundamentals remain strong. We may be near the end of this expansion, but it’s still quite possible that this ending could last for several more prosperous years.

How We Can Help

You may be breathing a sigh of relief after reading these optimistic updates, but what’s more important than how the overall economy is doing is how your personal financial situation is doing. If your financial plan needs some attention or you want to take advantage of our current market cycle, we at Balboa Wealth Partners can help. Call me today at 949-445-1465 or email me at jgilbert@balboawealth.com to plan your path to financial independence.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals and to worry less about their finances and more on their passions in life. Based in Orange County, he works with clients throughout Southern California, as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.

Advisory services provided by Balboa Wealth Partners, Inc, an Investment Adviser registered with the SEC.  Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice.  Neither firm is affiliated.

__________

(1) http://news.morningstar.com/index/indexreturn.html

(2) https://www.carsonwealth.com/insights/market-commentary/weekly-market-commentary-april-8-2019/

(3) https://www.carsonwealth.com/insights/market-commentary/weekly-market-commentary-april-8-2019/

(4) https://www.carsonwealth.com/insights/market-commentary/weekly-market-commentary-april-29-2019/

(5) https://www.carsonwealth.com/insights/market-commentary/weekly-market-commentary-april-22-2019/

(6) http://news.morningstar.com/index/indexreturn.html

We’re Never Too Busy To Help Someone You Care About

By Jeff Gilbert

What are the most important things in your life? Family? Health? A sense of purpose? While money may not top that list, it affects every part of your life and can give you the security and stability that positively impacts the things that matter most. But because of its far-reaching impact, managing money often leads to stress and worry. That’s why an advisor plays one of the most prominent roles in a person’s life, forming a long-lasting relationship and providing trusted counsel.

But how do you find an advisor who you can trust and want to work with for the long term? At Balboa Wealth Partners, we understand that this is an overwhelming and intimidating process. Trusting someone with your hard-earned money is not a decision you should take lightly. Knowing this, we are honored to have the opportunity to continue serving more and more families and individuals who conscientiously choose to place their finances in our hands.

We place the utmost value on our clients, and we greatly appreciate the opportunity to serve the important people in their lives as well. We gladly welcome the chance to connect and get to know new clients who may benefit from the services we provide. Your referrals are the highest compliment and an integral part of our continued growth.

The Balboa Wealth Difference

We’ve been fortunate to work with a wide range of clients who do refer their friends and family to us. We believe so many people have referred others to us for a few different reasons:

  1. A personalized approach. We know that no two individuals’ financial planning needs will be the same, which is why we create a plan focused on your financial goals. We take the time to outline a tailored strategy based on your specific needs, goals, and circumstances.
  2. Strong relationships. We prioritize a hands-on client-centered approach, which has led us to build long-lasting relationships with so many of our clients. We’re proud to serve as a go-to resource and support system when someone faces a tough decision or goes through a life transition.
  3. A dedicated team. With a diverse team of experienced professionals who maintain a high-touch and personalized experience, we seek to serve as our clients’ most trusted financial consultant and help them make smart decisions with their money. By having a dedicated team of experts on your side, we hope you can feel more confident as you navigate life’s challenges and planning opportunities.

The People We Serve Best

At Balboa Wealth Partners, we desire to take away your fear and anxiety and help carry your financial burden. Because we like to form trusted and close relationships with our clients, we strive to work with people we believe we can best serve. We specialize in serving ultra-high-net-worth individuals who require customized strategies for their unique challenges.

Our advisors specialize in overseeing your financial affairs and coordinating the day-to-day execution of your long-term financial plans. We deliver high-touch, responsive service strategically paired with access to institutional-caliber investment expertise in a way that eliminates conflicts, reduces fees, and opens the doors to truly comprehensive planning and reporting.

Do You Know Someone Who Could Benefit From Our Services?

One of the reasons we work with a select number of clients is so we can provide personalized attention and care to each of our clients as well as their loved ones. When you have questions about your portfolio or strategies, we’re here to help. When you experience a new milestone in life, we’re here to help. And if you have a friend or family member who has questions or needs unbiased advice, we’re never too busy to help.

If you’re a client with our firm and you’ve enjoyed working with us, we hope you’ll refer a friend, colleague, or family member who may benefit from our services. For a no-obligation consultation, please forward this article to them and have them contact us at 949-445-1465 or jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals and to worry less about their finances and more on their passions in life. Based in Orange County, he works with clients throughout Southern California, as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.

Advisory services provided by Balboa Wealth Partners, Inc, an Investment Adviser registered with the SEC.  Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice.  Neither firm is affiliated.