The Asset Advisory Group
Chip Workman grew up in a household with the mantra “anything worth having is worth taking care of.” His parents taught him the importance of doing for others, a good education, and the value of a buck. Water was what you ordered at restaurants, the landscaper was looking at you in the mirror and the best way to get that toy or pack of baseball cards was to save, save, save.
Given his frugal upbringing, Chip was often someone that friends trusted for advice that revolved around money. It seemed a very natural transition to make this his career.
After graduation, Chip found the options available to follow this path disheartening. Opportunities that promised to help clients achieve their goals were, at best, thinly veiled schemes that put the company first and giving sound advice second. At worst, it was much more underhanded. He never understood why it had to be the company or the client. Why couldn’t it be both?
Instead, Chip joined the world of private banking, developing many close relationships with individuals and families. He enjoyed a successful career, but was still restricted to the bank’s products and services. He happened upon an opportunity to help some financial advising firms with their banking needs. They were fiduciary advisors, charged with putting their clients’ interests ahead of their own. A light bulb immediately flickered and he saw an alternative to the traditional investment model, a way to be the trusted counselor he always wanted to be.
After a thorough search, Chip was fortunate to find Jeannette and the rest of the team at TAAG. He is proud to be able to truly partner with his clients and offer conflict-free, holistic advice about the financial issues that impact their goals.
MBA, Finance & International Business, Xavier University
BA, Miami University
Assets Under Management:
Information provided by Chip on Advisor Insights should not be construed as financial or investment advice. Consult with a financial planner before taking action. All thoughts and opinions are his and not necessarily those of The Asset Advisory Group, Inc.
The answer to your question depends on a number of circumstances, but generally speaking, the best way to build credit is to start using credit responsibly. Often, the easiest way to do this is to apply for a credit card.
Depending on your age, income and a number of other factors, this may need to come in the form of a Secured Credit Card. These can generally be acquired through the bank or credit union that you currently use.
If you might qualify for a non-secured credit card, make sure you find the one that's best for you. A great resource to research what card might be best for you is Nerd Wallet. Click on the link, answer the various prompts to determine what might be best or most rewarding for you.
Not to sound like a beer commercial, but the most important piece of my response above is "start using credit responsibly." This means start charging one or two things a month to the card, never spend more than you can afford to pay cash for right now and then pay off the credit card IN FULL at the end of each month.
Only thing I'd add to the earlier answer in that private school tuition does not apply to debt to income calculations as far as the bank is concerned unless you've signed a not with the school is that it should absolutely figure into your calculations whether buying a new house or taking on some other debt. Unless you are certain the tuition is going to end at a certain date, don't necessarily trust the bank's approval limit for a given loan as what really works best for you.
Ah, Shark Tank. If valuing assets, businesses and the like were only so easy. Ultimately, the traditional way they show the sharks valuing the potential businesses is not wrong. If, for example, someone is asking X for 20% of their business, then, multiplying X times 5 will ultimately give you what they believe their company to be worth, or at least what they're valuing the equity in the shares being offered.
There are multiple ways of determining value in a business and it would be very difficult without significantly more detail to tell you how to value your opportunity. That said, a good place to start is with a fairly simple equation. . .
Price = Book Equity + (Expected future cash flows / discount rate)
In other words, take the expected future cash flows of the company, divide by the discount rate and then add your result to the book value, or the total assets of the company minus any intangible assets and liabilities. That should give you a total price that you can then divide by the total number of shares in the company to get some idea of a share price.
If contributions went over your limit of $18,000 (assuming you're under the age of 50 - if not, you're eligible to contribute up to $24,000), then your employer needs to return the amount of the contribution. You'll also need to ask for an amended W-2. All of that said, it is important to make sure that you're not including contributions that include a company match. In other words, if you contributed $18,000 or less and your employer(s) matched a certain amount, that amount should be excluded from your calculation of the limit. Make sure that the $22,576 your reference was all from your own payroll deductions and does not include any company match.
Generally speaking, you're asking a lot of good questions. Some of which are a little difficult to answer without further details. That said, you cannot continue contributing to a company's 401(k) once you separate from the company, so I'm not sure if the Fidelity Credit Card option would work unless you rolled your 401(k) into a Fidelity IRA and went from there.
As for your new company's 401(k), it definitely makes sense to contribute the 10% to receive the 5% match. That's free money, which you're unlikely to find elsewhere, plus you get the tax benefit of reducing your taxable income (unless you use a Roth 401(k) in which you get the tax benefit later on).
What you do with your current, soon to be former employer's 401(k) is tougher to answer without more details. If you particularly don't feel comfortable at Wells Fargo, go ahead and roll it into an IRA or leave it in your current employer's plan at Fidelity. The only caution there is to be sure the fees are reasonable on the investments and that you're careful to keep track of the account. I hope that's helpful in at least answering portions of your question.