Financial Resolutions

  • James H. Lee
ResolutionsAccording to a recent article in the Journal of Psychology, almost half of all Americans make a New Year's Resolution.   What to most of us want to do differently?  Lose weight, save money, get organized, and spend more time with the family.  
Financial planning won't necessarily help you burn off the stuffing from holiday turkey, but it can help you with the other three.  We're here to help you get started on the right track.
Success is often about setting priorities - let's start with the basics first.
1) Eliminate your credit card debt. This may be the highest and safest return on your money. Check out sites like and look at credit cards that can enable you to consolidate debt at a lower interest rate. If you need more help, consider free resources such as the Consumer Credit Counseling Service.
2) Know your monthly budget. How much do you have each month in income? What are your monthly expenses? There are some great expense tracking tools out there, such as Your income needs to be more than your outgo!
3) Build some cash reserves. Ideally, everyone should have 3-6 months worth of cash in a savings or money market account in case of emergency. If you need to rely on payday loans to make your rent or car payments, you may need to move somewhere less expensive, work longer hours, or find a job that pays more.
4) Get your profile on LinkedIn. Think of this as your online resume. The average job only lasts 3-4 years, so start planning for your next job before this one ends.
5) Pay yourself first by putting money into savings at the beginning of each month. If you wait until the end of each month, you might find that you don't have any money left!
6) Get insured. In this order, you need car insurance (some states won't register your car without it), renter's or homeowner's insurance, health insurance, disability insurance, and life insurance. Nothing can send you into bankruptcy faster than medical bills combined with a physical inability to work. Thankfully, with Obamacare, more people have access to health insurance than ever before.
7) Save for a home. If you have a stable situation and plan to live somewhere for at least 3-5 years, think about buying a home. If you are looking for a safer or better neighborhood, considering going onto Google Maps and looking for a location with more trees (this is simple, but it works!) You will need to figure out how much you can reasonably afford. Buying a home that is less than you can afford gives you some flexibility for improvements, furnishings, and to pay for life's many surprises.
8) Contribute to your future retirement. If your employer has a qualified retirement plan, try to save at least 10%-15% of your monthly income, especially if you have completed steps 1-7. If you don't have these benefits at work, set up an IRA account with a mutual fund company like Fidelity or Vanguard. There are some big tax benefits here, but remember that this is money that you shouldn't touch until you reach retirement age. If you are in your 20's or 30's, you can start by considering index funds that invest in stocks, or "lifecycle" funds that are rebalanced as your get closer to retirement.
9) Get your will written. This isn't something you do for yourself, but for the people that you care about. Keep this in a safe place, along with copies of financial records and account passwords. Meet with a family lawyer in your state, or consider inexpensive software such as WillMaker.
10) Look for professional guidance. Now that you've completed the basics of financial fitness, it is time to get some coaching! Talk with friends and family to find out who they recommend for financial advice, and don't be afraid to interview several advisors until you find someone that you trust and feel comfortable with. GuideVine and the Paladin Registry are both excellent ways to find a qualified pre-screened financial advisor in your area.
Here is the key to successful resolutions - write them down, build a plan, and monitor your progress.

What Comes After the Dollar?

  • James H. Lee

The Euro recently hit a two-year low. Meanwhile, Russia is tipping at the brink of a deep recession. Japan just received a credit downgrade by Moody’s.

These days, I don’t envy speculators in the currency markets.

Trading currencies is like judging a beauty contest in a small town, when none of the girls are particularly attractive. There aren’t that many good choices. Sometimes you just have to do the best you can.

Bitcoin is like the mysterious new girl in town, but unfortunately one of her old boyfriends has an unsavory reputation – a bit of a scandal, really. Bitcoin prices are off 70% this year, yet nobody is talking. It’s been shunned.

So, the winner (for now) is everyone’s sweetheart, the U.S. dollar. In a deflationary environment, when prices for oil and gold are falling, the dollar is able to buy more than it did last year. Furthermore, a strong dollar has also shored up investment in our own stock market.

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The Greek Fraternity of Finance

  • James H. Lee

Animal House

When we are not nerding-out in front of our computers, or binge-watching CNBC, financial analysts have really interesting lives.

Sort of.

Like members of most other secret fraternities, we are somewhat obsessive about things that make absolutely no sense to anyone in their right mind. Take our passion for Greek letters, for example. What they signify in finance is entirely different than what they might mean in mathematics, or, well Greek.  Alpha, beta, delta, epsilon, and theta all have their own unique personalities.  So who are these guys, anyway?

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What Home-Run Stock Picks Have In Common

  • James H. Lee

Let's admit it - we all like to swing for the fences once in a while. Few things are as exciting as hitting a double, a triple, or better yet, a home run in investing.   During some years, it is harder to hit home-runs than others.  2013 was pretty amazing in this respect, this year is a little more challenging.  It takes time and practice for everyone, veterans and rookies alike.


The well-respected mutual fund giant T. Rowe Price recently did a comprehensive study of small to mid-size stocks that completely hit it out of the park - generating six-fold gains or more over a ten-year period. In other words, these stocks grew at annualized rates in excess of 20% per year.

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Investing in the Future of Cybersecurity

  • James H. Lee

Wake Up and Smell the Coffee

About a year or two ago, I logged on my online bank account to find a $280 charge for the purchase of a dozen World Wrestling Entertainment t-shirts with expedited shipping to Hyderabad, India. I didn't realize that I was such wrestling aficionado and had absolutely no recollection of doing this. My bank (god bless them), cancelled the transaction and no harm was done.   But it served as a reminder that even fairly diligent people need to be vigilant about their data and financial activity.

Identity theft and online crime are on the rise, and your digital pockets are most likely to be picked by someone on other side of the globe.

The costs are now $445 billion per year, and growing rapidly.   Aside from the risks of bad publicity, many corporations are acutely aware of the potential impacts on their bottom line and this fits into our Digitize Me investment theme. As we all spend more time online, we'll also be spending more money protecting ourselves from threats that we cannot see.

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Koans for Futurists

  • James H. Lee

KoanWhat is harder than finding the right answers?  Asking the right questions.

In Zen Buddhism, a koan is a short story or question that is simply worth meditating on.  There might not necessarily be a single good answer, but the process of contemplating the question itself is a worthwhile pursuit that may lead to sudden insights or enlightenment.

Futurists tend to be "big picture" thinkers.  However, some puzzles are too complex for any one of us to solve. 

Here are a few....

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