When unexpected or worrisome financial news hits, what do you do? Constantly checking your portfolio can derail you from long-term goals, while having zero awareness of your finances can lead to reckless overspending or other bad behavior.

Information travels faster than ever these days, and it’s easy for investors to feel alarmed or panicked about finances when they read the headlines. Get a handle on financial anxiety with a few helpful strategies.

  • Start to see others’ fears as opportunities. When the markets go down, investments can lose value and appear on sale. That’s when some say it’s time to buy rather than sell. Whatever you choose, zoom out on S&P 500 charts to get some perspective and look at the long-term picture.
  • Revisit your goal-based investment plan regularly but not necessarily in response to world events. Sometimes all it takes is a check-in to remember why you have a particular portfolio set up just so. If changes must be made, consider timing them with significant life events like a birth, death, career move or change in marital status.
  • Begin incorporating mindfulness techniques and meditation into your daily life. Not only are these practices ideal for reducing anxiety and stress, which can lead to larger health conditions that are expensive to treat, but they can also improve cognition and concentration.

With the potential for more volatility on the horizon as markets tend to fluctuate during presidential election years, there’s no time like the present to practice taming financial anxiety with the above suggestions. Employing thoughtful techniques can help you stay balanced and on track, both mentally and financially.

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

With higher education costs escalating faster than traditional inflation, it’s important to treat the college selection process as the serious investment it is. Whether you, your child, grandchild or other loved one is researching colleges and universities, calculating the actual value of higher education can help whittle down the options and justify the escalating costs. Here are three interesting metrics to consider:

  1. Total Debt at Graduation — Earning an undergraduate degree is a crucial milestone, but starting a new life chapter saddled with tremendous debt can disrupt that momentum. States and institutions can take different approaches to student loans, so pay attention to the student debt trends at each university or college to set realistic expectations.
  2. Alumni Earnings Above Expectations — While U.S. News & World Report provides a popular college ranking list each year, the minds behind The Economist created their version with a unique, finance-oriented premise. The magazine’s first-ever ranking of four-year, nonvocational colleges is based on how much money graduates earn compared to how much they could have made had they studied elsewhere.
  3. Highest 4-Year Graduation Rates — While overall graduation rates matter, the ideal situation is earning the degree in as little time as possible since college costs can skyrocket as more semesters are added. Looking at graduation rates for those who completed college in four years can help prospective students find campuses with similar work ethics.

College is a booming business, and it’s critical to consider the financial impact from a variety of angles, especially if your goal is to help yourself or someone else on the path to lasting success

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

Financial planning is an ongoing process meant to build and protect your wealth as you go through life. Along the way, certain milestones can have an impact on your financial goals. When these crop up, it’s important to consider making adjustments to your strategy sooner rather than later.

While it’s by no means a conclusive list, here are some major life events that can warrant a revision of your financial plan:

  • Coming Into Sudden Wealth — Whether you’ve just landed a whale of a gig or been left a sizable inheritance, sudden wealth can have an impact on your financial goals. In addition to allocating these new dollars in a tax-aware fashion, your estate plan may need updating too.
  • Changing Jobs — Remember that 401(k)s are essentially portable. When switching jobs, be mindful of your accounts and handle them properly to avoid paying costly fees and penalties. It’s also important to maintain proper life, health and disability insurance coverage for you and your family; this may require special timing or out-of-pocket coverage.
  • Evolving Family Structure — Whether you’re getting married or divorced, expecting a baby or supporting an aging parent with escalating medical needs, these changes have financial implications. From education funding and estate planning to exploring long-term care options, waiting too long to put a plan into action can be a costly mistake. Taking the time for a review of your accounts and strategy can benefit you down the road.

There may be hidden costs or advantages with life’s changes. Maintaining a close working relationship with a trusted professional can help you stay on track.

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

Significant student loan debt is certainly a growing trend. If you’re the parent of a child . . . you already know! Either you’re looking at the impending costs with concern, looking at the checking account and contemplating if you should take that elaborate vacation instead, or you’re counting what the costs were and hoping your child is making the educational investment worthwhile. Certainly, there are scholarships and grants; furthermore, we’d be the first to encourage students work, save, and help pay their own way. But, when it’s all said and done, parents usually end up helping and students usually end up finishing with some debt.

The Good

The good news is that most students who actually graduate are eventually finding decent employment. According to the New York Federal Reserve, persons with a bachelor’s between the ages of 22 and 27 have 4.6% unemployment. Now, we can argue about what the true unemployment figure is, however this 4.6% figure is at least in line with general unemployment currently reported.  Also, of note, is that both the average salary ($50,651) and the median salary ($43,000) are up in 2015 from previous years for Bachelorettes.

The Bad

That said, student debt is becoming a much bigger concern. There are over 40 million Americans who collectively owe over $1.2 Trillion in student debt. Furthermore, the variance from the average wage after graduation is significant with upper margins being held mostly by information technology, healthcare, finance, and engineering majors. The lowest paying majors are varied, but include sociology, theology, and education. Also to consider is work experience when graduating and where the student is willing to move for a job, which can also impact income greatly. The average student loan debt is also at a record high of over $37,000 with seven in ten graduates borrowing for their education, according to Cappex, a website that connects students to colleges and scholarships.

The Ugly

As if the bad, was not bad enough, we have the ugly. The ugly truth is that it’s not the graduates with student loan debt, which are the greatest concern. According to Mark Kantrowitz, publisher of Cappex, most graduates’ debt burdens are “manageable” meaning they can be paid off in 10 years. The bigger problem is non-graduates who take on the debt, but don’t earn the degree. Kantrowitz states, “We don’t have a student-loan problem so much as we have a graduation problem.” And to exemplify how this could impact all of us, Lori Harfenist of The Resident summarizes a Wall Street Journal article stating, “7 million Americans are flat-out refusing to pay back their student loans because they feel scammed by their universities and government.” And, who are all student loan programs now managed by? You guessed it, the federal government, which means the American taxpayer is the one on the hook. In conclusion Kantrowitz states, “ . . . if current trends continue, we may be in a crisis point in two decades from now.” We think it could be sooner than that.

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

If you’re like most of our clients, you’ve thought long and hard about the financial aspects of your retirement. You’ve likely worked hard and saved diligently. But, retirement for each person is different. Perhaps you plan on a working retirement with a new job and less stress, focused on what you love. Or, perhaps you plan to travel, play golf, or just rock on the porch. Or, maybe you want to downsize to a smaller house, spend time with the grand-kids, or take up sky diving. Who knows? Whatever the plan, don’t forget to consider the location you plan to call home.

Where you “officially” call home can make a difference in your retirement lifestyle. Even if you plan to travel or live out of your RV, the place you officially live can impact your taxes and other living cost factors. Obviously, most people realize that retiring to California or New York will be generally more expensive than retiring to Tennessee. So, what are some of the factors to consider when picking a retirement destination?

For most retirees, the two largest expenses in retirement will be medical care and taxes. Yes, a milder climate not only means a more enjoyable tennis match, but it can also mean lower utility bills. However, lower utilities are not likely to be as big of a financial factor as other considerations. Regarding medical expenses, BenefitsPRO recently completed an analysis on healthcare costs in the US. Now, keep in mind that the analysis merely compares Medicare premiums, but this can still be a fair comparison on what average medical costs by state may be because Medicare premiums consider medical costs as a major factor. Believe it or not, the cost to have a heart attack is different in different parts of the country. So, on average, Florida has the highest Medicare premiums running 35% more than Hawaii, which has the lowest. This makes sense from a supply and demand standpoint; there are many more retirees in Florida needing medical care, which likely means there are consistent strains on supply, which in turn drives up the cost. Tennessee did not make the top ten lowest or highest for Medicare premiums.

Taxes are the other major factor for most retirees. Kiplinger recently listed six factors to consider when picking a retirement destination and each of the six factors were different types of taxes. Most retirees consider income taxes and while income taxes can be a major factor for some retirees, Sales Tax, Property Tax, and Estate Tax can be even more important. This is because once you reach retirement, you may have already earned most of your income; now it is more a matter of spending it. If income taxes are really your biggest issue, you might actually consider life outside the US. Over half-a-dozen countries actually have no income tax, but keep in mind, you’ll have to give up your US citizenship and other expenses may far outweigh the income tax savings unless your income is significant. Also keep in mind, the IRS will make you pay tax on your IRA before you expatriate, so don’t look to leaving the US as a way to avoid your Required Minimum Distribution (RMD). One income tax you may want to watch out for is income tax on certain investments. For instance, Tennessee has no income tax on earned income; however, it does have income tax on interest income over a certain level. These hidden taxes can sneak up on you and make a difference. Another somewhat hidden income tax is Social Security income tax. Some states have been moving away from taxing SS, but as of this writing, thirteen states still do tax it.

If you are less affluent, then sales taxes and property taxes will likely be more significant factors. When considering property tax, keep in mind that most often this is a function of county government rather than state or federal government. If you own or plan to own significant amounts of real property, moving across the county line could mean a significant difference. Also consider if the county/state allows for a property tax “freeze” for owners who reside in the property. This can ensure that property taxes do not go up for you.

As for sales taxes, this is a function of states and local municipalities, but usually more dependent upon the state’s rate. Again, moving across a state or county line or even out of city limits can be factor. Also be aware that the sales tax rate may vary by item. For instance, some states do not charge sales tax on food or may charge a different rate on certain large purchases.

Finally, there are estate and inheritance taxes. The difference in these two is the way they are calculated. Estate taxes are charged to the estate, but inheritance taxes are charged to the inheritor, which may have differing rates depending upon whether the inheritor is a spouse, child, sibling, or unrelated. And, not only do the rates vary, the exemption amounts (how much you can pass on without having the tax) varies by state. Some states match the federal government’s exemption, but most don’t.

In all determining where to retire is an important consideration for which weather may be a big consideration. Just don’t forget to look at the financial implications of location too. And, if you need help evaluating those consideration, call us at 877-5WEALTH.

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.


This is a scenario everyone has played out in their head hundreds of times. What would I do if I suddenly came into $1 million? Most of us already have a plan, to either get out of debt, or to buy a new car or a new house. But, assuming those things were already taken care of, what would most of America do with $1 million?

Million dollar question

According to a recent survey of Mirador Wealth, most Americans would choose to invest their newly acquired fortune in land. In fact, Americans in 17 different states choose to invest in land. The respondents were given five choices: land, investments and business, travel, a small plane, or a boat. So given these options, why are more people choosing to either buy a boat or plane rather than invest? There are a few reasons why this could be the case. First of all, when given a large sum of money, history shows us that most people tend to be spenders, and not savers. According to Forbes, 44% of lottery winners who have won a large prize have gone broke within 5 years. If people already have a lack of financial discipline, access to more money merely amplifies financial mistakes. Another reason people are choosing to spend instead of invest is because of a lack of financial knowledge. According to a recent Gallup poll, 43% of Americans are not financially literate. This means that they struggle with paying bills and building their credit. So when these people receive a large quantity of money, they already have bad habits, and their money will not last as long.

Interestingly enough, the people in states with the lowest median household income chose to buy land, while the people in states with the highest median household income chose investments and business. So that leaves you with the question, what would you do with $1 million?

If you’d like to gain more financial knowledge and discipline to handle your first $1 million or even have a little guidance to help you get there, give us a call!

Piggy Bank

Depending upon your circumstances and everyone’s is different, the order that you prioritize for investing may vary. However, in general most people should prioritize investing for the short-term and then the long-term. Short-term investing, which I prefer to call savings, is most commonly for an emergency fund. An emergency fund is basically a small accumulation of money to pay insurance deductibles and co-pays plus other small, unbudgeted expenses like a hot water heater replacement or new tires. An emergency fund should also be available as a replacement income during a time of unemployment. Most experts recommend having three to six months of expenses in an emergency fund. For many this may be the same as three to six months of income, but the distinction should be drawn here between income and expenses. To help evaluate how much you might need, look at the job market for your career. What you need to ask yourself is, “How long would it take me to find a replacement position to earn my current income?” Only you can be the judge, but that’s why three to six months is used as a rough guide. Statistically, the higher your income and the more specialized your field, the harder it is to replace your income. Some may want to plan for unemployment lasting more than six months.

Short-term savings may also include putting back extra for large purchases such as a large appliance, automobile, or vacation home. Though you may use similar instruments to help the money grow, be sure to keep this money separate from your emergency money. If you have the discipline to separate it through budgeting, you can use the same accounts, but this is difficult for most people. I recommend keeping separate accounts for your different short-term saving purposes. Obviously, it is difficult to save for your next car if you’re still paying on the old one, so debt elimination may be a factor in getting your short-term savings in place. Most would suggest getting a small emergency fund first, followed by debt elimination other than your home, followed by the rest of your short-term savings accumulation.

The objective of your savings instrument should be to outpace inflation while maintaining relatively stable principle values and high liquidity. We usually recommend a combination of a checking account, money market, and certificate of deposit for our clients. Each of these allows for good principle stability, but with varying degrees of return and liquidity. Having the least necessary in the most liquid investments is often the most advisable, but again only you can be the judge of what you will need access to.

In conclusion, the distinction between saving and investing is important. If you are merely “loaning” money with savings and not investing money, your assets will not truly “grow” in spending power. In fact, if you don’t keep up with inflation, the value of your money can go down even if the amount grows! Inflation is a real risk that should be considered for longer-term investing, so investment vehicles used for savings and investing should differ greatly for most people and businesses.

When it comes to investment risk, two facts are true for everyone! Everyone takes investment risk, but risk doesn’t necessarily mean additional return. You might be saying to yourself either, “I don’t take investment risk,” or  “I like risk, it means more return.” Well, I’m sorry to say it, but if you are either person, you’re wrong. Now, before you become defensive, please let me explain.

First let me address those of you who think you don’t take investment risk. The fact is that if you have any money (or possessions), you take investment risk. There are many types of risk associated with money and possessions that people do not consider. If you say, “I don’t invest! I purchase possessions.” You incur devaluation risk. If you say, “I don’t invest! I put my money under the mattress.” You incur inflationary risk. If you say, “I only use certificates of deposit that are FDIC insured.” You incur Interest Rate Risk. If you say, “I only use government bonds.” You incur Reinvestment Risk. The point is regardless of how safe you think your money is, you are taking risks if you have any money or possessions anywhere. The fact of the matter is that life involves risk. If you are alive, you have taken risk, you are taking risk, and you will continue to take risk in all areas of your life including money. Let’s look at a few different parts of life to draw some analogies. Relationships. If you believe you don’t incur risks in your relationships because you refuse to have any, you take on a whole new set of risks. For example, you risk growing old alone. Transportation. You refuse to fly in a plane because you believe they are dangerous. Consequently, you take on even more risk by driving long distances and increase your chances of having a car wreck.

Perhaps you’re the person who believes that risk equates to reward. You must understand that all risks are not created equal. Regulatory Risk, Business Risk, Call Risk, Currency Risk, Market Risk, Liquidity Risk, Event Risk, Opportunity Risk (Cost), Political Risk, Operational Risk, Prepayment Risk, and those previously mentioned are just a few of the types of risk that exist. There are numerous risks that you may take for which you are not compensated, and there are other risks that you may take for which you are more likely compensated. Let’s look at some more analogies. Relationships. You only date persons who have a history of lying, but taking on this risk will not reward you with better relationships. Transportation. You understand the driving with no brakes is dangerous, so you disconnect the brakes to your car in hopes of getting to your destination faster.

These analogies may seem silly, but hopefully they help you to understand that every individual takes risks with their money and that all investment risks do not have an expectation of return. Over the next several weeks we will explore some of these investment risks so that you can make more informed decisions about investing your money!

For more information on investing, visit our financial planning page.