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Peter Locke

Divorcing Women and their Unheard Financial Goals

Financial problems are one of the most cited causes of divorce and crafting a Divorce Financial Plan can be your best opportunity for a new start. The compounding stresses of money management and home economics can act as an accelerant for the underlying causes of marital strife and ultimately divorce. It should also come as no surprise that divorce often results in a change in financial direction for both parties, who through the process of divorce find they have several financial goals and needs that are not part of the current marital financial plan. So for one of the parties, it’s time for a change in the methods, tools, and priorities addressed in the financial plan.  On the heels of a divorce, here are some of the most commonly shared priorities that went unaddressed in prior relationships with investment professionals and financial advisors: 66% Hope to pay off debt accrued in or before the divorce 41% Want to save for a comfortable retirement 38% Would like to start or have a  larger emergency fund 34% Would like less risky investments 27% Would like a new home 20% Want more new streams of reliable income 19% Are hoping to build their wealth through investments 12% Want to gain confidence in their insurance  We feel that most of the divergence between the goals of these surveyed divorcees and their financial plans started long before the divorce proceedings. The disconnect between the financial goals of a single party and those established in a marital financial plan likely existed well before the topic of divorce arose and stems from a lack of communication and shared vision.   A staggering majority of recently divorced women comment that their post-divorce financial plan looks nothing like their marital financial plan. Furthermore, an alarming number of women developing a financial plan reveal that they have not yet discussed these priorities with a financial professional which begs the question of how a financial plan that fails to uncover the goals and needs of the woman became enshrined in the first place. As a result, many don’t have a clear path on how to achieve their stated financial goals.  These unheard financial goals compound the already frustrating and stressful situation a divorce brings.  A Certified Divorce Financial Analyst® or CDFA® can play a significant role when uncovering the value of shared assets, divining a tax-based strategy for the future value of different investment types, and assisting in dividing marital assets during the divorce process. Additionally, a CFP® professional can assist you in understanding your options, documenting your financial goals, and putting you in the best position possible to help you achieve your financial goals post-divorce. Generally speaking, women live longer, have different expectations for their money, and prioritize investment returns and strategies. As such, their financial plans should be developed differently. Having a financial advisor by their side during divorce is crucial for combining their long-term financial planning expectations with their current asset make-up. If from the outset, a divorcee lays out a road map for their financial life, the advisor and attorney can better negotiate the terms of the settlement for their shared client. However, in a 2018 survey by the publication Worthy survey, 56% of women getting a divorce, discussed the marital house and debt as a priority, but only 48% discussed taxes, 34% discussed alimony, and 39% discussed the ongoing cost of child care. All of these have a more impactful weight on the long-term success of retirement and the border financial plan.  This makes working with a CDFA® and CERTIFIED FINANCIAL PLANNER™ even more crucial when facing a divorce. A financial professional can help you overcome emotional turmoil to bring you the financial vision and stability you deserve after divorce. The Complete Playbook

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July 22, 2022 No Comments
Boulder Financial Advisors
Articles
Kevin Taylor

The AI Showdown: Unveiling the Global Race for Technological Supremacy

The global AI race between the United States and China has been a prominent topic in recent years, as both countries strive to establish themselves as leaders in artificial intelligence. This competition has spurred significant investments in AI research, development, and infrastructure, with particular emphasis on chips and AI technologies. The United States, with its long-standing tradition of technological innovation, has been at the forefront of AI advancements. American tech giants such as Google, Microsoft, and IBM have heavily invested in AI research and development, establishing themselves as key players in the industry. The U.S. government has also recognized the strategic importance of AI and has taken steps to support its growth through funding initiatives, regulatory frameworks, and collaborations between academia and industry. On the other hand, China has rapidly emerged as a formidable competitor in the AI race. The Chinese government has set ambitious goals to become the global leader in AI by 2030, outlining plans to invest heavily in research and development, talent acquisition, and infrastructure. China’s large population and vast consumer market provide a fertile ground for AI implementation, leading to the proliferation of AI-powered applications in various sectors such as e-commerce, finance, and healthcare. Chinese companies like Baidu, Alibaba, and Tencent have made significant advancements in AI technologies and have been actively expanding their influence both domestically and globally. Chips play a critical role in AI development, as they form the foundation for powering AI algorithms and applications. The United States and China have recognized the strategic importance of chip manufacturing and have made substantial investments in this area. The U.S. semiconductor industry has long been a global leader, with companies like Intel, Nvidia, and Qualcomm driving innovation. However, China has been making significant efforts to reduce its reliance on foreign chip technology and establish its domestic semiconductor industry. The Chinese government has invested billions of dollars in supporting local chip manufacturers and fostering collaborations with international semiconductor companies. Both the United States and China understand that AI has far-reaching implications, not only in terms of economic growth but also for national security and military applications. AI technologies have the potential to enhance military capabilities, automate warfare systems, and drive advancements in autonomous weapons. As a result, there is a growing concern about an arms race in AI between these two superpowers. To support their respective AI ambitions, both countries have also been investing in military-related AI research and development. The United States has established the Joint Artificial Intelligence Center (JAIC) and is actively exploring the integration of AI into defense systems. Similarly, China has made significant investments in military AI applications, with the People’s Liberation Army (PLA) focusing on areas such as autonomous vehicles, intelligent surveillance, and battlefield decision-making systems. It is important to note that while the United States and China are at the forefront of the global AI race, other countries and regions are also making significant strides in AI research and development. Countries like Canada, the United Kingdom, and Germany, among others, have their own AI initiatives and are fostering innovation in this field. As the competition intensifies, the United States and China must balance their pursuit of technological dominance with ethical considerations, transparency, and international collaboration. The development and deployment of AI technologies should be guided by principles that prioritize human rights, privacy, and accountability. By fostering a cooperative approach, global collaboration can drive the responsible and beneficial use of AI, benefiting society as a whole. The global AI race between the United States and China presents various investment opportunities and potential conflicts. Let’s explore them further: Investment Opportunities: AI Research and Development: Both the United States and China are investing heavily in AI research and development. This creates opportunities for companies and startups specializing in AI technologies, algorithms, and applications. Funding and partnerships from government agencies, venture capital firms, and tech giants can fuel innovation and growth in this sector. Semiconductor Industry: The development of AI requires high-performance chips, and investment in the semiconductor industry is crucial. Companies involved in chip manufacturing, design, and fabrication, as well as those focused on AI-specific chips, can benefit from the increased demand for advanced semiconductor technology. AI Infrastructure: The race to develop robust AI infrastructure, including cloud computing, data centers, and network capabilities, offers investment opportunities. Building scalable and secure infrastructure to handle the vast amounts of data and computational requirements of AI applications is a key focus area. AI Startups and Incubators: The growing interest in AI creates a fertile ground for startups and incubators specializing in AI technologies. Investors can identify promising startups and provide funding, mentoring, and resources to help them flourish. These startups can offer disruptive AI solutions in various sectors, presenting attractive investment opportunities. Conflicts and Challenges: Intellectual Property and Technology Transfer: The competition between the United States and China can lead to intellectual property disputes, as both countries strive to protect their AI advancements. Issues related to technology transfer, trade secrets, and patent infringements may arise, potentially leading to conflicts and legal battles. Talent Acquisition and Retention: Both countries face challenges in attracting and retaining top AI talent. The demand for skilled AI professionals exceeds the current supply, creating a talent shortage. This talent competition can result in wage inflation, poaching of experts, and brain drain from certain regions, leading to conflicts and talent imbalances. Ethical Considerations: As AI technology advances, ethical considerations become increasingly important. Conflicts may arise when different countries or organizations have divergent views on the ethical use of AI, particularly in areas such as privacy, bias, algorithmic transparency, and autonomous weapons. Establishing international standards and regulations to address these concerns can be a complex and contentious process. National Security and Military Applications: The militarization of AI can heighten conflicts between nations. Developing AI for military applications, such as autonomous weapons and cyber warfare, raises concerns about arms races and the potential for escalating tensions. Striking a balance between innovation and ensuring responsible use of AI in the military domain is crucial to

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June 28, 2023 No Comments
Boulder Wealth Building
Articles
Kevin Taylor

How to Get Wealthy – The Basics of Wealth-Building

Introduction: What is Wealth? The traditional definition of “Wealth” is the quality of life that a person can enjoy, which can be measured in terms of material possessions and financial stability. But the InSight definition is more inclusive. We think “Wealth” is the lasting capacity for something to generate value. This means cash-flow-producing assets. This means your health, investments, age, and behaviors that are accretive to income creation are all part of “Wealth Building.” Leveraging as many of those different channels, at a high level, for as long as possible. Wealth is a term that is often used to describe the accumulation of assets, such as money and property. Wealth is also often used to describe people who have achieved significant success in their careers or other aspects of their life. What is missing in the traditional concept of wealth, and something our clients understand is that Wealth is not a snapshot of your assets, it is the expectation that those current assets have the potential to create future incomes that support your goals. Themes and Topics for Building Wealth In this section, we will explore various topics that one needs to know in order to build wealth. The first step is to have a plan for what you want your money for. It could be for a car, a home, or retirement. You will need to have an idea of what you want your money to do for you in order to make it work. Next, you need to set goals and track your progress with specific steps toward achieving those goals. For example, if your goal is $1 million dollars by the age of 30, then you need to set milestones on how much you should save each month and how much interest it should earn each month in order to reach that goal by the desired date. Finally, there are many ways that one can invest their money such as stocks and bonds, but there are also other options such as real estate investing or starting a business. You may be interested in exploring these avenues depending on what type of Wealth you are looking to create. The key to all of this is the understanding that these investments (of time and money) should have the ability to generate cash flow at the desired rate. Once you have created the “model” for how you plan to build wealth, it’s time to move on to the tool for executing your plan. Understanding Your Worth and Creating an Annual Budget A budget is a plan for the future that helps you to know what your income and expenses will be and how much money you have available at any given time. For many, it can be a very useful tool for making sure that your spending matches up with what you earn. But the limitation is that budget “drafts” rarely become lived out in a family’s financial habits. Budgets are a fine start, but it’s a traditional approach to finance that simply fails over time because the equation is wrong: Income – Budget = Savings We try to coach clients to pivot inversely. Instead of crafting a budget to find savings, craft a savings plan that results in a budget. This puts the most important wealth-generating number (savings) early in the equation. Because we shift that focus and take care of first things first – the budget – which might still be important, is less mission-critical to the success of the financial plan. Our clients think: Income – Savings = Budget Creating an annual budget is a good way to keep track of your spending, set goals, and make sure that your spending is deliberate. But it’s not a good way to drive your worth and execute a financial plan. A change in the budget mindset is key to long-term success. Achieving Financial Goals For Yourself Setting financial goals is an important step in achieving your goals. We think clients should “dream big” and “be honest.” We don’t think those are opposites because we have seen that through planning a financial goal setting they can work cooperatively. What are your current financial goals? What are your long-term financial goals? How much money do you want to make in a year? What is your desired lifestyle? It is pivotal that these expectations for your long-term wealth are established early. A financial goal can be a great way to start living the life you want. Financial goals are not just about getting rich, they are about having the freedom to do what you want. A pair of long-term habits to master are 1) reinvestment and 2) automation – we coach our clients to get comfortable with these concepts: Understanding Money Management Basics and How To Save and Invest Wisely Before you can master your financial goals, it is important to understand how compounding interest works. Reinvestment – Compounding interest is when the interest that has been earned in a period of time gets added to the principal sum, and then earns more interest on that sum. It’s when your money starts making money for you! This is the same as reinvestment. We focus on coaching clients to view their portfolios as a collection of assets that generate cash flow. That cash flow is then reinvested routinely and programmatically. This means that when markets are “down” they are buying new “cashflow” cheaper – then as the market rises, they are selling “cashflow” when it’s overpriced. Automation – Financial goals are important to set. You need to know what you want to save for and how much you need to save on a monthly basis. There are many ways you can automate your savings and make sure that your money is going toward the things you want it to go towards. One way is through your corporate payroll. Your payroll system will automatically withdraw a certain amount of money from your paycheck every month and put it in the brokerage account so

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January 4, 2023 No Comments

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