Gen One Legacy Podcast

Handing in a resignation letter and walking away from an unfulfilling career may be one of the most satisfying acts in an individual’s life. By some measures, there are an increasing number of satisfied people in the world today. Indeed, recent accounts increasingly show that people are leaving their jobs in droves. These developments are evident in articles about quit and vacancy rates and even rising Google Search trends for early retirement. To be sure, one study found that COVID has prompted a growing wave of early retirements, especially for people who had not planned to quit their jobs but are now thinking of doing so. Can you relate?

Maybe your investments have performed solidly over the past 18 months, and now you have the financial resources and confidence you need to pull the trigger and finally step into financial independence. Maybe your company has recently gone public, and you’ve come into a large financial windfall that has set you up for early retirement. Or, perhaps you’ve had time to consider whether the work you’re doing today truly aligns with what matters most to you in your life.

Whatever the case may be, now could finally be the time for you to take the next steps towards early retirement. But before you walk into your boss’s office and hand in that resignation letter, you’ll likely want to consider some potential pitfalls that might derail your financial independence early retirement plans. Indeed, not thinking through some crucial early retirement mistakes could leave your financial goals falling short.

Here are five financial mistakes that you’ll likely want to avoid as you take your next step towards becoming the master of your financial independence journey:

Mistake #1: Underestimating your retirement cash flow needs
Mistake #2: Relying solely on your 401k or IRA for early retirement
Mistake #3: Dismissing social security benefits entirely
Mistake #4: Forgetting to factor in healthcare expenses
Mistake #5: Not giving your money a purpose

Retiring early is an aspiration that many individuals can get excited about. Vicki Robin and Joe Dominguez, in their best-selling book, “Your Money or Your Life”, arguably introduced the concept of early retirement to the mainstream culture decades ago. Today, thousands of individuals are actively pursuing their goal of becoming financially independent and quitting their nine-to-five grind.

According to one Gallup study, individuals in their early 20’s were generally optimistic about their ability to save for retirement before age 60. Those same individuals, however, curbed their early retirement enthusiasm when later surveyed later in their 30’s as savings and other lifestyle realities made it increasingly clear that early retirement might just be an elusive goal.

Even so, data from Hearts & Wallets suggests that one out of every six Americans surveyed by the group expects to retire before the age of 55 – ten years sooner than the standard retirement age of 65.

This data illustrates one key point when it comes to the concept of retirement: individuals across all walks of life increasingly want to start the journey to become financially independent and retire early, rather than walking down the path of a traditional retirement later on in life. To be sure, retiring early has become so popular that it’s even earned its own name: the FIRE movement.

In this podcast, we discuss four ways to supercharge your retirement plans by participating in the FIRE movement. We’ll also discuss some factors to consider when calculating financial independence number.

Investors have had good reason to celebrate this year, but is it truly time to let our guards down? Thanks to practical policy guidance, more than half of the US population has received at least one COVID-19 vaccine in 2021. Add to this the boost from a $1.9 trillion fiscal stimulus package introduced in March, and the US economy today is on pace for its most robust recovery in nearly 40 years.

So, how have the financial markets taken these improvements? Well, risk assets have responded to the positive health and economic developments by posting solid gains in the first and second quarters. Looking ahead, however, the market and economic outlook appear less promising. A resurgent COVID variant, accelerating inflation, and a notable lack of bipartisan support for additional fiscal stimulus pose challenges to economic and market momentum in the second half of the year.

In this podcast, we discuss why we may not be out of the woods yet when it comes to the market and economic outlook. We’ll also discuss some steps you can take to ensure that your financial independence plans stay on the right track.

Many driven individuals are keen to identifying seemingly attractive investment opportunities to grow their savings in their pursuit of financial independence. More often than not, however, what they miss is an essential component to long-term financial success: a process to manage their investments that helps mitigate downside risks.

Indeed, various studies have shown that the key to success in life and money centers on the process used to produce results. Today, we’ll talk about the investment process we use at Franklin Madison Advisors to help our clients become masters of their financial independence journey.

Today’s show is a little unique because it features my interview with Chuck Jaffee on his podcast, the Money Life Show. In this episode, Chuck and I spend time talking about investment implementation within the context of a financial independence journey. We also talk about opportunities and risks given the current market environment.

My Money Life Show interview with Chuck Jaffee was published on June 1, 2021. You can listen to this episode in its entirety by visiting: https://moneylifeshow.com

You can also follow Chuck on Twitter and Instagram at @ChuckJaffee and Facebook at @MoneyLifeShow

Life changing money. That’s what happened to John Ratcliff. In 2013 the software developer from Colorado purchased 150 Bitcoin. Today, his $15,000 bet is worth millions as the price of cryptocurrencies (crypto) skyrocketed. Another individual who also came into life-changing money this year is Vitalik Buterin. The 27-year-old college dropout and co-founder of Ethereum is now the world’s youngest crypto billionaire as Ether went from $130 in 2020 to over $4,000 in 2021.

Stories like Ratcliff’s and Buterin’s have led to a crush of demand for the popular new asset class. To be sure, rapid price appreciation in crypto over the past year has prompted heightened media attention and arguably is fueling frenzied behavior among some market participants in tokens like Bitcoin, Ethereum, and even Dogecoin for fear of missing out.

But what exactly are cryptocurrencies? And more importantly, do they belong in a retirement portfolio?

That’s what we’ll talk about in today’s podcast.

In a speech delivered just outside of Pittsburgh in late March, President Biden introduced the American Jobs Plan. This sweeping initiative would spend over $2 trillion to prevent infrastructure disasters like the one in New Orleans and provide a renewed foundation for businesses and individuals to compete globally in the twenty-first-century marketplace.

To be sure, President Biden’s proposal is more ambitious than we’ve seen in generations. His package includes spending on preventable infrastructure failures while funding traditional bridge and road repairs. Simultaneously, the plan makes provisions for investments in quality-of-life essentials like clean water, quality education, and telecommunications improvements while funding caregiving assistance for an aging population and creating globally competitive U.S. manufacturing jobs.

Following decades of false starts, it appears that the U.S. is finally on the cusp of beginning its most ambitious infrastructure program in years. But will a deal get done?

Dave and Beth are a high-earning household stuck in the perpetual cycle of rising income and ever-increasing spending. While their situation ultimately led them to bankruptcy, their story is an extreme example of how getting stuck on the hedonic treadmill and pursuing other people’s money scripts can leave you emotionally empty and financially broke.

In today’s podcast, we’ll talk about some of the factors that led to Dave and Beth’s financial situation, how it wasn’t always like this for the couple and how becoming the master of your financial independence journey might prevent a similar for you or someone you know in a similar spot.

Whether you’re earning six figures and broke like Dave and Beth, or simply trying to take control of your finances, learning a new financial management technique, determining your “retirement number” or some material outcome may not be the approach you need. What might suit your situation better is reframing your relationship with money, rewriting your money scripts, and mastering your financial independence journey.

Some investors today are worried. They’re asking, “is now the right time to get into the markets?” Their primary concern is putting money to work at the top of the market, only to see their precious savings decline in a selloff. And they have good reason to be concerned. Volatility in certain parts of the financial markets remains elevated while asset prices continue to drive higher and, by many measures, are disconnected from fundamentals. So, what should an investor do to avoid losses associated with investing at the wrong time in such an environment?

Maybe you’re sitting on cash and asking whether you should put your money to work now or wait until conditions settle down a bit? Truth be told, not investing at market highs is a fallacy because there is generally no wrong time to invest in the markets. More specifically, the right time to be putting money to work in the markets is when your investment strategy balances your income needs with capital appreciation and other savings goals.

In fact, staying out of the markets at an inopportune time might cost you in terms of growth over the long-term for the benefit of avoiding a loss in the short-term. To be sure, the key to navigating financial markets during periods of uncertainty is to avoid market timing altogether. When it comes down to it, investing isn’t so much about divining market direction. It is about adhering to a strategy that enables you to achieve and maintain financial independence regardless of where you are in the market cycle.

Some people are getting rich in the markets today, so why aren’t you? As an investor, fear of missing out is a difficult emotion to manage, especially when others are seemingly making easy money and you’re not. In our latest podcast, we discuss:

• Why, when it comes to investing, few, if any individuals, enjoy going against the crowd for the sake of discipline, especially when their neighbors might be making money hand over fist in tech, bitcoin, penny stocks, and options trading.
• How by many measures, there’s little doubt that conditions in certain parts of the market today are frothy and consistent with a late market cycle. This sort of market euphoria has happened before, and if history is any guide, it likely won’t end well.
• But by looking past the latest investing craze, reminding yourself of your financial independence goals, digging deep to figure out what you have to lose, and staying committed to a long-term, disciplined investment strategy, you might just be able to maintain your sanity when it seems like the markets are going crazy.

This past year has been a period in history that many of us would like to simply forget. Concerns about our communities’ wellbeing led to a seismic shift in the way that we work, educate our children, socialize, and go about our daily routines. Without a doubt, 2020 has been a year that has tried our livelihoods, finances, health, relationships, and most importantly, our patience. Indeed, the one word that might best characterize an experience that happened to us is: survival.

Nevertheless, chances are good that the negative factors that have forced us to hunker down are likely to ease into the year ahead, enabling many of us to thrive once again. More specifically, widescale distribution of a coronavirus vaccine and a return to a seemingly normal political environment likely will foster greater business and household confidence in the months ahead. Such outcomes could support labor market improvements and a rise in business earnings. At the same time, accommodative central bank policy may provide much-needed support to the economy and boost financial market sentiment.

Even so, while government spending and money printing were a boon to financial markets in 2020, investing likely won’t be as simple as following the latest trading fad. Liquidity-induced momentum trades that provided handsome gains this year could be harder to come by in 2021. That’s why as we look into the year ahead, the key to thriving financially for investors with a long-term savings orientation could be as simple as sticking to the basics and focusing on fundamentals.