Medicus Wealth Planning
Kevin enjoys helping clients from all stages in life with sound financial planning. Kevin has especially found a niche in advising small business owners who’d like to create or improve upon their existing company retirement plan.
Kevin got his start in the financial planning industry by going to work for one of the largest discount brokerage and mutual fund companies in the world, Fidelity Investments. While at Fidelity, Kevin held his Series 7 and 63 Licenses which allowed him to work as a trader, completing transactions in stocks, mutual funds, and options. After being promoted to a department that focused on helping clients with their company retirement plans, Kevin found what he had a passion for, helping small business owners and their employees successfully prepare for retirement.
Kevin left Fidelity to come work with David Luke as a partner in Medicus Wealth Planning. Having the opportunity to work with clients on a fee-only basis allows Kevin to give objective and sound financial planning advice that is never tainted by a hidden agenda.
Kevin graduated from Utah Valley University with a degree in Personal Financial Planning. Utah Valley University’s Financial Planning Program has been recognized on numerous occasions as a top 10 Financial Planning Program in the country.
Shortly after graduating with a degree in Personal Financial Planning, Kevin became a Certified Financial Planner™ (CFP®).
Kevin lives in Riverton, Utah with his wife Lauren, and their two children. Kevin spends much of his free time with his family outdoors, playing sports, and watching Jazz games. Kevin and Lauren enjoy living close to both of their families and spending time with them.
Personal Financial Planning, Utah Valley University
Assets Under Management:
The actual stock price of a company has nothing to do with how profitable or valuable the company is. In very simple terms, the value of a public company is determined by the stock price multiplied by the number of outstanding shares. So in theory, you could have a company that is trading at $1,000 per share and have 100 outstanding shares for a total market capitalization of $100,000. Compare this to a company that is trading for $10 per share and has 100,000 outstanding shares for a total market capitalization of $1,000,000.
Back in 2014, Apple was trading around $700 per share and did a stock split of 7-1. When this took place, shareholders shares were multiplied sevenfold, but the price of Apple was reduced sevenfold. So if you owned 100 shares of Apple at $700, your total investment was worth $70,000. When Apple split 7-1, you would have owned 700 shares at $100 per share for a total investment of $70,000.
In some cases, the price of a stock appreciates so much that it makes it hard for everyday investors to buy shares. The volume of trading is reduced and the stock is harder to buy or sell. This could increase spreads (the difference between the buy and sell price). By doing a stock split, the price is reduced and it allows for more investors to begin buying/selling the stock.
Great question. The stock market, as measured by the S&P 500 Index, has had an average annual return of 10.31% from 1970 - 2016. The real estate market has had an average annual return of 11.42%. That is measured by the publicly traded REITS (the NAREIT Equity REIT Index from 1970-1977 and the DJ Wilshire REIT from 1978-2016). To put this into dollar terms, if you would have invested $10,000 in the S&P 500 in 1970, by the end of 2016, your investment would have grown to $1,005,588. If you would have invested $10,000 into the DJ Wilshire REIT index, your investment would have grown to $1,609,932. The Real Estate market is a little bit more volatile than the stock market, but not by much. The standard deviation for the S&P 500 is 17.12% which means there is a 95% chance that your return in any given year will fall between -23.93% and 44.55%. The standard deviation of the Real Estate market is 18.92% which means there is a 95% chance that your return in any given year will fall between -26.42% and 49.26%. The worst 1 year return for the stock market was in 2008, it dropped 37%. The worst 1 year return for the Real Estate market was also in 2008, it dropped 46.49%.
The most common one you'll hear is Warren Buffett. I greatly admire Warren Buffett, not at all for his skill to pick stocks, but what he has used his fame for. Warren Buffett is honesty and upfront and doesn't say things to generate headlines. He has repeatedly told common investors to invest in indexes, something he doesn't do, but understands that the vast majority of investors will be better of doing. He is patriotic, charitable, and a great businessman.
With $5,000, it would be hard to diversify your portfolio if you were only investing in individual stocks and bonds. The best thing to do would be to start with some ETFs. Most mutual funds have minimum investments of at least $1,000 - $2,500, but not ETFs. Find a broad range of low-cost ETFs that cover different asset classes (large cap, mid cap, small cap, international, emerging market, bonds) and start investing in those. As you begin building up capital to invest, you can replace an ETF that represents an asset class with a few stocks. For example, you could sell your large cap ETF and replace it with a few large cap individual stocks that you like.
For now, until you have more experience and more capital, I would go with some ETFs.
I love your commitment to saving at a young age, it's definitely going to pay off!
With an extra $5,000 - $10,000 in savings capacity at your age, I would first try and save in a Roth account. Since you are already maxing your Roth IRA, you could contribute to a spouses Roth IRA (if you're married) or look into your employers 401(k) plan to see if they offer a Roth 401(k) option. If they don't, make the recommendation, it's not going to cost them time or money and is easy to add on to a retirement plan. In the case you can't contribute to a spouses Roth IRA or your employers Roth 401(k), put additional money into your Traditional 401(k). If you get to the point where you're maxing that out, then put the remainder in your taxable brokerage account. At your age, you'd most likely be investing in high growth funds or stocks that shouldn't generate much income, so your tax bill won't be high unless you build up a large capital gain and sell.