Patrick Traverse, founder of MoneyCoach, decided to get into financial services after an 18-year professional hockey career. His journey to his new career started as a young investor during his early twenties as he became frustrated with the type of help he was getting from his advisors. He felt compelled to learn on his own about everything he needed to know to make proper financial decisions. His new passion for the intricacies of the markets and personal finance pushed him to choose financial planning as a second career.
Patrick and his team know that clients are busy with their life and sometimes feel they don’t have the time to get to learn everything they need to know. Patrick thinks it is important that he advises his clients on every facet of their financial life. He feels that every piece plays hand in hand with each other and if an area of their finances is neglected, it could mean that their whole life plan could come down crashing.
After more than 4 years in the business, Patrick founded MoneyCoach in 2016. He uses his experience as a top-level athlete to help his clients become financially successful. He feels that the most important missing component that most investors do not have is accountability. By being their financial coach, Patrick guides his clients to control their money. Not that money is everything, but so much of our lives depends on how we manage money!
Organizational Leadership, Quinnipiac University
Assets Under Management:
MoneyCoach LLC and/or Patrick Traverse offer Investment advisory and financial planning services through Belpointe Asset Management, LLC, 125 Greenwich Avenue, Greenwich, CT 06830 (“Belpointe), an investment adviser registered with the Securities and Exchange Commission (“SEC”). Registration with the SEC should not be construed to imply that the SEC has approved or endorsed qualifications or the services Belpointe Asset Management offers, or that or its personnel possess a particular level of skill, expertise or training. Insurance products are offered through Belpointe Insurance, LLC and Belpointe Specialty Insurance, LLC. MoneyCoach LLC is not affiliated with Belpointe Asset Management, LLC. Additional information about Belpointe Asset Management is available on the SEC’s website at www.adviserinfo.sec.gov.
Patrick Traverse Investopedia Interview
It depends of what your goals are. You shouldn't compare to others as you might want something that out of the norm. Many young adults these days are trying to find financial freedom early in life. Many of these people are trying to save more than half of their take home pay, but if you have a normal goal to be able to work until 65 and live a comfortable life while you're working and in retirement, here's a few of the metrics that you can follow:
- You should try to save 15% of your before-tax income. Use different types of accounts (401k, Roth, Individual) to get different benefits. If you are diversified that way, you should be able to have money for whatever life throws at you.
- Try to maintain to housing expenses to no more than 25% of your net income. This includes rent or mortgage payment, insurance on your home and real estate taxes. This should make sure you are not house poor.
- Maintain your committed expenses below a max of 60% of your net income (And that is the ultimate max!!!) These expenses include your housing expenses and any other bills you get on a regular basis. Your goal should be to lower this amount as you pay down debt and earn more.
- Lastly, you should have about 20% of your net income to spend on your lifestyle expenses. This is anything that makes your life more enjoyable (restaurant, clothes, trips, entertainment...) As your other expenses are lowered compared to your net income and you are staying on track to reach your investment goals, you should be able to spend more of your income on lifestyle expenses. Which is what it should be about.
You should be proud of yourself! At the age of 22, you are light years ahead of most people your age. If you put together a budget plan like I just demonstrated for you, you will be successful at controlling your money. You will make money a key to more freedom instead of having it become a source of stress in your life.
I hope this helps.
P/E is short for Price to Earning ratio. Therefore a high P/E means that the price of the stock for every dollar of earning is high. P/E is a good ratio to look at when comparing investments, but you need to understand how to use it:
1) Depending on the sector the company resides in, a 20 P/E ratio could be normal or high. Technology stocks normally have higher P/E ratios than lets say Consumer Staples stocks. Therefore, make sure you compare your company P/E to a similar one.
2) What makes a P/E high or low, depends mostly on the growth prospect of a company. The stock market is always forward looking. Which means that traders look at today's information to try to find out which companies will thrive in the future. If you are looking at a fast-growing company, it is possible that it will command a 30-40 P/E or more. It could be at its early growth stage. It might not have much earnings, but Wall Street think it will grow them fast over the next few years...
3) In contrary, if a company has a 12 P/E, but it's revenue and earnings are not growing, it could be labeled as expensive and its stock might face selling pressure.
3) You should also take a look at PEG. It's P/E ratio divided by its assumed growth projections. This gives a better idea of which stocks are cheap compared to its ASSUMED growth. As long as the growth projections are correct!!!
I hope this helps.
With the small amount of information you have given us, I would recommend that you put all your savings in cash at this time. The next 6 months should be about building your cushion. The more you can save the better. Your goal should be to give yourself enough time to find the next job and not having to compromise or panic...
If your cash amount is too low, you might eventually have to dip into your retirement savings which would be very costly. It is better at this point to lean on the conservative side until things get back to normal.
I hope this helps.
Great question! The answer is once you put together your emergency fund, you should invest your other savings. Here's something to think about: The markets are volatile in the short-term (0-3 years) but over the long-term they tend to go up. Therefore, because your goal for your money is considered short-term, you should be careful in the amount of risk you are taking. You do not want to face a drop in the market when you need the money! Here's how I would aproach it:
1) Anything you need within a year, invest in a cash like investment. (Money Market, Savings, Checking)
2) Anything you will need within 1-3 years, invest in a conservative investment. (CD ladder, short-term bonds, ...)
3) Anything you will need within 4-7 years, invest in a moderate risk investment.
4) Anything longer term, you would be able to take more risk for possibly more growth.
Find out exactly what your goals are for this money and invest your buckets accordingly.
I hope this helps.
I think you are on the right path. Here's a few recommendations:
1) I would hold on to 3 months-worth of expenses in a cash account. The rest can be invested in a low-turnover conservative portfolio of assets. The goal is to reduce short-term capital gains and volatility. When you need some cash, you would be able to sell some of the assets while being tax efficient. Stocks and ETFs work great for this purpose.
2) I recommend that my clients end up with a 1/3 of taxable assets (401k, IRA,...) 1/3 in Roth and a 1/3 in after-tax investments at retirement. This will help you become tax-efficient in retirement and maintain flexibility before retirement. Depending on when you will retire and by using conservative growth assumptions, try to figure out how much you need to put away in each of these types of accounts. This will help you figure out if you need to max out your 401k or not.
3) Depending on your income and if you have any IRA assets, you might not be able to contribute into a Roth IRA. If your income is higher than $184k, but you DO NOT have any IRA money, use the Back-Door Roth contribution strategy. The idea of using a Roth account for college planning is a great. However, you might not be able to use it...
I hope this helps.