Loss aversion is the tendency for people to strongly prefer avoiding losses at the detriment to obtaining gains. This puts an unnecessary fear on an investment not supported by the risk prima. This might be one of the most common
Everyone has heard a mantra about first impressions and their lasting impact. That works for investors too. Because our brains thrive on recognizing patterns and the relationship one element has with another. This mental phenomena is called anchoring. This want
A fiduciary is a person or organization that acts on behalf of another person or persons. They at all times must put their clients’ interest ahead of their own. Being a fiduciary thus requires being bound both legally and ethically
Inflation is a measurement of the rise in the cost of goods and services. Thus the inflation rate is the decline of the purchasing power of your money over time. So over time your money simply can buy less. Several
Cash flow is for us the best leading indicator of the success of a business or a personal balance sheet. Cash flow math is simple, revenue (income) minus outflow (expense) equals cash flow. This amount in surplus to outflow allows
Asset An asset represents a positive economic value owned in whole or in part by a company or individual. It represents ownership over the positive benefits and values that the entity inherently has, could have or creates continuously. Generally speaking
Future value (FV) is the value of a current asset at a future date. It is useful for extrapolating the expected return on an asset. The math uses an assumed rate of growth. For investors and financial planners the use
The present value (PV) is the current value of all future sums of money or stream of cash flows given a specified rate of return. Future cash flows are discounted based on the time value of money referred to here
Income, for planning purposes is any source of income that comes into your personal or professional balance sheet. Most people see this is income from their employment. We focus chiefly on investment income. This come from a few different sources:
Generally debt is any monies owed. it is broadly defined as “Any negative on your balance sheet.” But we think there are key distinctions in the way debt is owed. This causes us to divide debt into two definitions, erosive
A IRA without investment limitations Annual Contribution Max: $6,000 or $7,000 if over 50 years old. Why we like Self Directed IRA’s: Available to anyone Makes several non marketed assets available to invest (Including, Franchises, Commercial and Residential Properties, Precious
Getting corporate retirement plan benefits for when you are going it alone Annual Contribution Max: $57,000 or 25% employees pretax income Why we like Solo 401(k)’s: Easy to administer, low-cost retirement plan designed for self-employed individuals and owner-only (spouse can
