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
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.
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.
A Roth IRA is simply just a type of account. Law makers write the rules on how different types of accounts are being taxed. The way you invest in them depends on the company offering the account.
If you opened a Roth IRA account in a bank, you might only have the option to invest in CD-like products that pay you an interest payment.
If you opened a Roth IRA account with a brokerage institution, you would be able to purchases stocks, bonds, mutual funds and other market securities.
If you opened a Roth IRA account with an insurance company, you would invest in an annuity probably.
Most people have their Roth IRA account invested in the markets. Depending on the performance of the markets and the securities chosen for the investor, the account will fluctuate accordingly.
I hope this helps.
Thank you for sharing your situation with us. I'll try to give you as much help as possible within what I can do within this post. However, I believe you guys need to seek help outside of Investopedia.
Every time I help someone with their debt, I always help them set-up their budget first before we put together a payment plan. The reason is that you don't want to pay huge penalties and get back into debt if you didn't fix the root of the problem. Here's a few rules of thumb, you might want to check:
1) Are you spending more than 25% of your net income on your mortgage payments (including your real estate taxes and insurance)? If so, you might be house poor. This puts a lot of pressure on the rest of your expenses.
2) Are you spending more than 60% of your net income on fixed expenses (other bills that occur regularly including your mortgage)? It gets really hard to be able to save if you spend more than 60% on these types of expenses and try to live life a little.
(BTW net income means your take home pay + contributions into retirement plans if any)
If your answer is yes to either one of these, you might want to downsize or work more. Having less money outflow or more money inflow will help you stabilize your problem. I would focus on this before doing anything else.
Once you fix the first issue and are seeing a positive inflow of money you can contribute to savings every month, you can then look at payment strategies. You are owing a large amount to credit cards. It is possible that you spend about $13,000/year in interest which adds to the problem. If you are not making big strides in paying the debt down after you adjusted your lifestyle and/or getting fully employed, I would then think about using your retirement funds as a last resort. However, I would try to do it in chunks. Splitting withdrawals in $20,000 chunks over the next 3 years will help you reduce taxes possibly, and you might find out that you are able to handle and payoff a smaller credit card debt with your cashflow, as interest amounts get smaller.
You also had another set of questions about what's enough retirement savings to have at your age. My answer is it depends on your lifestyle you will have after you fix your first issue. To help you get an idea of what you need is the rule of 72. If you take 72 and divide it by a rate of return, you get the amount of years it would take to double your money.
In your situation, if you have $177k and earned 6% on your money every year, it should be worth $708,000 at retirement (72/6=12 years, your money would double twice before retirement 41 to 53 and 53 to 65, $171,000 x2 x2=$708k). This also works on your lifestyle needs however. If you need $5000/m to live on and inflation is about 3%, you will need $10,000/m in 24 years (72/3=24 years, 41 to 65, $5000/m x2= $10,000/m).
Another rule of thumb in financial planning is the 4% rule. If you take out 4% of your retirement funds during the first year of retirement for income and increased it over the years because of inflation, this money should last you about 30 years. Therefore, if you took 4% at retirement out of $708k, you should be getting about $28,000 during the first year, out of that money.
$28,000 + $20,000 from your husband's pension, you would need another $70,000 of income ($120k (12x$10k/m) - $28k - $20k = $72k). Social Security should be there to help, but even in today's standards, it won't cover the rest of your need. Therefore, you definitely need to invest more, but I think you are on pace if you get back on track quickly...
I hope this is not too confusing. I gave you a lot of information to think about because I wanted to give you the framework of a financial plan, which is what you need to put together. Again, I recommend that you reach out to someone for help and the sooner the better.
I hope this helps.
Here's a look at the logic your financial planner is trying to explain to you.
Under the EFC calculations, students' parents assets are assessed to find out how much financial aid can be received. With other non-retirement assets, your 529 will be added to the amount of assets that can be used in the calculation. Your 529 will affect your EFC by a maximum of 5.64%. Which means that it will increase your EFC number by $1410. Life insurance cash value is not included in the calculation. However, this small savings would only grant a smaller portion of student aid.
Making the conversion would cost you much more than what you would gain!!! Cashing $25,000 out of a 529 plan, would mean that you would have to pay 10% penalty on your growth + taxes. Depending on the amount you contributed to it, this might be a lot more than the small amount of financial aid you would gain.
You would also probably lose upside! Depending on the age of the student, you might be looking at years of possible investment growth. Cash value insurance are front-loaded with fees, which makes it hard to make money on short/medium term investment goals.
I think you get the point... It would be your financial planner/insurance agent that would benefit the most from the transaction he/she is recommending.
I hope this helps.