Purposeful Strategic Partners
I work with clients to help them live their great life, both now and in the future. Financial planning isn’t about sacrificing today for tomorrow; it’s about giving purpose to your money. I guide clients in exploring the lifestyle they want to achieve now, the goals they have for their future, and how best to use their financial resources to accomplish both.
Throughout the planning process, the focus is on providing education and ensuring you understand how you’ll meet your goals and are comfortable with the plan. The goal isn’t to impress you with big words or confuse you into agreeing with a recommendation. The goal is to provide you with transparent advice without conflicts of interest.
I begin your planning process by understanding your life goals, and then develop recommendations to help you achieve them. Every plan and every recommendation is designed with one goal in mind: to get you to your goals.
Planning takes on an integrated approach, which considers your entire financial picture. Planning goes beyond investments and retirement to incorporate all of your goals and includes cash flow analysis, tax planning, college funding, risk management, career development, debt management, estate planning, and more.
FIDUCIARY & FEE-ONLY
As a Registered Investment Advisor, I chose to be held to the highest fiduciary standard in the industry. I am required to serve my clients' interests first in all aspects of planning and to fully disclose potential conflicts of interest. This isn't just a policy, it's a legal obligation.
As a fee-only financial planner, I only accept compensation directly from my clients for the advice I provide. No product sales. No commissions. No referral fees. No other hidden kickbacks.
In addition to being a financial advisor, I’m also a tenured professor of Business at El Camino College in Los Angeles. I hold an MBA and recently passed the rigorous CFP® exam. I have also had a unique perspective on the last two market downturns, having been a Vice President at a credit union in 2008 and the Director of Marketing for an internet technology firm in 2000.
My journey to becoming a financial planner began with me rejecting being a financial planner. In the early- and mid-2000, a long-time friend of mine asked me to join him at Merrill Lynch as a financial advisor – I turned him down multiple times.
Shortly after the 2008 credit crisis, I began instructing college Personal Finance courses. Watching the incredible impact the course had on students' lives is what finally sparked an interest in joining the financial planning profession. But I wanted to join a profession, not an industry.
Teaching is a profession, because it is dedicated to improving the lives of the students, not enriching the professors. Sadly, what I saw in much of financial planning was an industry that created products and hired sales representatives to push the products. But I also saw a noble version of financial planning as a service profession where a trusted adviser helped guide clients toward their life goals.
MBA, Azusa Pacific University
Professional Financial Planner certificate, UCLA
While there are some differences between the plans, it is the underlying investment options and fees which should really drive this decision. Each of the plans will have predominantly the same tax advantages; so instead look at the types of investments and the expense ratios of the funds you have access to in the 401(k), 403(b), 457(b) and 401(a) plan.
If your 401k plan has significantly cheaper fees and better investment options, then you should max out the 401k first ($18,500 in 2018) before looking to invest in the other plans. 403b and 457 plans, for example, often limit you to investing in high cost annuities, which will have a hard time outperforming cheaper investment options net of fees.
If all the plans have similar investment options and fees, then I recommned funding the 457 plan. These plans allow you to take penalty-free withdrawals before age 59 1/2. If you retire young, the 457 can be a beneficial source of income while you wait to have access to your 401k and IRA plans. You will still have the normal income taxes which are due on withdrawals at any age, the same as a 401k.
I also recommend talking with your financial advisor who is managing your Vanguard mutual fund. They should be knowledgable about the account details and be able to give you more accuarate advice based on your entire financial picture. If they aren't able or willing to offer advice on your entire financial picture, you may wish to consider if working with a different advisor would be better for your comprehensive financial plan.
Yes, this will in fact improve your credit score. Your score is calculated based on a number of factors, and this change will impact two of them; capacity and mix of credit. Your capacity is determined by the amount of revolving debt (like credit cards) you have divided by the total limits you have on the revolving debt. By paying off the credit cards (and keeping them open), you will increase your capacity by lowering your revolving debt. The second factor is improved because the credit score treats certain loans as good and certain loans as bad. Credit card debt is treated less favorably than a personal loan by the credit score. Make sure if you do this, that you lock the credit cards away so you won't use them. Go to 100% paying with cash at least until the personal loan is paid off.
Generally, though, you will not want to make this decision based on what it does to your credit score. Make sure by getting the personal loan you will improve your overall financial situation. The credit score increase should be a nice added bonus and not the reason you make this decision. You can determine if your overall financial situation will be improved by answering three questions:
- Is the interest rate on the personal loan lower than the credit cards?
- Will this enable me to pay off the debt faster?
- What is the chance that I will rack up more credit card debt in the future (you can't say no chance)?
If the answer to the first two question is YES, and the answer to the third is a low chance of using your credit cards again, then you will want to do this. Keep in mind, there are financial coaches who might be able to help you, as well as taking a Personal Finance class at a local community college.
Once you have the loan paid off, keep pushing forward by using the monthly loan payment money to take another step forward in your financial foundation. For example, if the personal loan was a $600 monthly payment, keep making the payment but to another financial goal. The following are some of my favorite places to consider.
- Use the money to build up an emergency fund so you can make it through a financial suprise.
- Contribute the money into your 401(k) or an Individual Retirement Account for your retirement.
- Put the money into savings for a major goal such as buying a house or purchasing your next car with cash.
There is definitely a chance you filled out the tax form incorrectly. While it is possible that the foreign income could have caused a swing,it seems unlikely to be that dramatic based on the amount of foreign income you earned. The tax credit should have taken care of the foreign income taxes owed. This is an area where you should definitely have a CPA and possibly a financial planner in your corner.
At your income, it is likely that having a CPA will pay more in tax savings than the cost. Additionally, a comprehensive financial planner could identify other ways to save on taxes going forward. (CPAs are historians by nature, while planners look forward. So the CPA minimizes taxes from last year, while a good planner should help with the future years).
While saving money by doing things yourself is often a good idea, most people don't have the expertise to get the most out of things like taxes and investing. A professional will pay for their fee many times over, if they are good at their job.
There are three ways to purchase Treasury notes directly; through a brokerage, a bank, or directly from the U.S. Treasury at https://www.treasurydirect.gov. Buying it directly through the U.S. Treasury will mean it is a noncompetitive bid purchase, so if that is a requirement, you will need to use a broker or a bank. There may be a fee with buying them from a bank or brokerage firm, but it likely won't be significant. As with all services, you will want to shop around to see what value each company provides and at what cost.
The amount you are looking at purchasing is significant, so it is probably worthwhile talking with a fiduciary financial adviser to get advice on the return expectations, opportunity cost, and risks of such a move. While most people think of Treasury Notes as risk-free assets, that is only partially true. While they are considered free from default risk, they still carry other risks such as interest rate risk and inflation risk.
If interest rates rise over the next few years, the market value of your portfolio will decline if you have to sell the notes prior to maturity. With a 10-year maturity, these notes are going to be impacted singnificantly by any potential increases in market interest rates. Similarly, with interest rates at their current lows, inflation could significantly eat away at the true value of this portfolio over the next decade. I am NOT saying this is a bad investment, as I have no idea what your goals are nor what the rest of your portfolio looks like. I do think, however, it will be important and benefit you to have a full understanding of how these and other risks could impact the portfolio so you are comfortable with the potential downsides.
Your analysis is actually correct, in that cash flow and growth rates are consistently changing, and generally they are changing for the better. As a result, future cash flow increases at a faster rate than previously expected and the stock price is adjusted up due to these increasing cash flows. Because no one can predict the future, as new facts become apparent it changes the expectations of future cash flows. This, of course, assumes we are looking at it over the long-term. Short term the stock price can go all over the place due to news stories, investor emotions, political uncertainty, and other factors.
The reason cash flow and growth rates continually increase are numerous, but a few of the most common factors include:
- Inflation - As general prices increase, the cash flow to a business for selling it's products will also increase. This of course does not provide a real return to the investor, but it is a component of the rise in stock prices.
- Technology - The development of new technology allows companies to be more productive, increasing revenues and decreasing costs
- Company growth - As a company becomes better known and sells more of their product, their cash flows increase beyond what was originally expected (this can be significantly impactful for small companies).
- Population growth - As more people are in the economy, they buy more stuff, which increases company cash flows
- New Markets - As other countries become wealthier, and as companies sell to those other countries, cash flows for international businesses increase.
- New Products - The development of new products can have a dramatic impact on company sales. An example is how much Apple's future cash flows changed once the iPhone was invented.