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Plan for Bittersweet Life Transitions

Lupe CamargoIt’s true. One day you’re holding a baby in your arms, and then the next you land where I am today – watching your child walk across the stage at her high school graduation, and entering into a new chapter of her life away from home. It does feel like a flash. How do you plan for bittersweet life transitions like this?

Reflecting back, there were many choices made along the way that helped create a path paved with options for her future. So much planning and preparation is required in raising a child. Ultimately, it is how we use resources under our control that can increase the likelihood of creating opportunities down the road for our child. Those resources include our energy, care, time, money, skills and experience. Success can come when all of these resources are carefully balanced.

The Next Stage

As I think about this next stage in life, I am delighted to see my daughter become a kind, independent and mature young woman. When that bittersweet moment arrives as I drop her off at college, I hope she remembers these life lessons my husband and I have imparted to her:

Only spend what you have. Living on modest means early on will give you freedom and options later.

  1. Be grateful for what you have and, for those things you have, use them wisely.
  2. Success is not measured by status or what car you drive. It is determined by who you are, how you treat others, and how you lead your life.
  3. Pay attention to the things that matter, and don’t get distracted away from your goals.
  4. You are part of a community, so remember to always give back and support those in need.

Shifting from an active participant to a spectator in her life will be challenging; however, I trust she is ready to handle what life throws her way.

I also share with her three things that I have always carried with me, and hope that she carries them forward as well: Be brave, be wise and be kind.

By |May 21st, 2018|Financial Planning|

Merits of Wedding Insurance

merits of wedding insuranceHave you ever thought about the merits of wedding insurance? According to a survey by TheKnot.com the average cost for a U.S. wedding is now more than $35,000. That’s also about the average price paid for a new car, according to 2018 figures from Kelley Blue Book. And few would argue the merits of car insurance.

What if storms shut down a major airport, causing you to postpone the wedding? Or, what if that adorable ring-bearer drops the diamond-studded bands off the pier at your beach ceremony? Wedding insurance is a type of special event insurance (also called one-day insurance) that covers injuries and venue damages. It can also cover loss or damage of things like photos, attire, gifts and rings, as well as deposits in case of cancellation.

Before you buy insurance, check with your vendors to see what sort of coverage they have for their services and facilities. You wouldn’t want to pay for overlapping coverage if, for example, the reception hall has liability coverage for accidents. Ask for copies of any vendor policies, and then sit down with your insurance professional to determine where you may benefit from additional coverage.

By |May 7th, 2018|Current Affairs, Insurance|

Baby Steps to Your Financial Future

Baby Steps to Your Financial FutureMy wife and I were recently blessed with our first child. Like most parents, we were excited to start this new chapter of our lives as a family. Accompanied by all the wonderful emotions and thoughts of being new parents were our worries about providing for our baby’s future. My wife asked how we should save for his education, knowing the current economic environment requires that parents start saving for higher education costs as soon as possible. It’s natural to feel overwhelmed by this question, because there are many options to explore. Ease those feelings by taking baby steps to your financial future.

First Things First – Create a Budget

Before you can make an informed decision about how to start saving for post high school education, however, you should go back to the basics. Start by creating a budget that includes all of your current necessities (including saving for your own retirement) and then add all the needs of your new little one (items such as diapers, formula, baby clothes, daycare and so on).

Once you have that information organized and prioritized, you can decide how much can be saved for your child’s future education. The cost of education has been steadily rising over the last several decades. According to a USA Today report, the average inflation rate for university tuition is about 6 percent, double the national average for inflation.

Explore College Saving Options

One of the best ways to combat this problem is a college savings vehicle known as a 529 plan. Contributions to a 529 are invested in mutual funds to help your money keep up with or outpace inflation; earnings grow tax-deferred and, as long as the funds are used for education costs, the withdrawals are tax-free. There are many 529 plan options, and your Perspective advisor can help you compare and choose the one best for your family.

Having a budget and making a decision on how to invest for education is sure to free up time, so you can enjoy the fleeting moments of wonder with your new bundle of love. They are only babies for a short time!

Baby Steps to Your Financial Future Bonus: This article in the Schwab.com resource center offers a solid overview of 529 college savings plans.

By |April 24th, 2018|College Planning, Financial Planning|

Successful Investors Keep Seatbelts Fastened

Successful Investors Keep Seatbelts FastenedLooking back two years, U.S. stocks have risen more than 30 percent. There have been occasional dips along the way, though the rise has been pretty much non-stop. The first week of February 2018 jolted investors back to reality, as stocks fell more than 10 percent in a short period of time. The numbers themselves sounded scary. The Dow Jones Industrial Average fell 1,800 points in a few days; it was easy to forget the drop was from record heights of 26,000. Since then, markets have recovered more than half of that unnerving slide.

Successful Investors Keep Seatbelts Fastened

It’s a challenge to remain calm during a substantial market decline for some investors. Once again, we have witnessed how important it is to block out “The sky is falling!” media warnings. Emotional reactions are likely to be detrimental for investors. The fact is volatility is a normal part of investing. It is always there. It’s interesting to note that we most often see the term “volatility” used when markets fall, and yet markets are “volatile” on the upswing, too, as we have seen for a good stretch of time.

Investors are well-advised to “stay in their seats with seatbelts fastened” when things get bumpy. Intra-year market declines are common, according to academic research by Dimensional Fund Advisors (DFA). Looking back to 1979, DFA found that about half the years experienced declines at some point of more than 10 percent. Despite those significant drops, calendar year returns finished positive 32 of 37 years.

The DFA study also determined that trying to avoid short-term losses through market timing is apt to hinder long-term performance. A substantial piece of long-term stock returns comes from just a handful of up days. An investor attempting to time the market is all too likely to be on the sidelines on strongly positive days. Through the period of 1990 to 2017, missing out on only the five best days cut returns by a full one-third.

As the markets jump and jolt, try to remain seated and relaxed. Better yet, get up and do something you enjoy. Go for a walk or out to a movie, and let the markets do what they will from day to day knowing that you have a long-term plan.

By |April 16th, 2018|Current Affairs, Investing|