Do you remember your last vacation? Recall the planning and preparation it took to get you there? Kathryn and I just returned from a 6-day vacation to beautiful Manuel Antonio, Costa Rica.

We booked direct flights into San Jose. Then, we booked a one night’s stay at a hotel near the airport because we had to catch an early morning flight to Manuel Antonio. After several weeks of research, we found the perfect place to stay. Our private villa was perched in the trees on a hillside offering 180 degree views of a protected cove overlooking the azure waters of the Pacific Ocean in a small community called Tulemar. Our villa had a full kitchen, maid service, gas grill, shuttle transport and a private beach outfitted with kayaks, boogie boards, comfortable lounge chairs and a friendly wait staff.  One day, as I watched clouds drift by and the golden sun sink into the calm sea, I took a sip of my Pina Colada and reflected on the amount of effort and planning it took to park our butts on this beautiful patch of sand. Continue Reading…

Calming the Storm: 5 Steps to Meaningful Devotional Time aka Quiet Time

• Have you ever wondered why your day spirals out of control?
• Have you disconnected God from your work?
• Do you ask yourself “Where is God at 3 O’clock in the afternoon”?
• Do you go to bed wondering why God seems so far away?

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If you missed the Cashion Financial Webcast discussing the ’2 Stages of Financial Life’, there is no need to worry. Below is a link to watch the ’10 Minute Takeaway’. These short Webcasts are designed to teach you something you did not know about personal finance in about 10 Minutes.  In the ’2 Stages of Financial Life’ I discuss accumulation specialists vs income specialist and the difference. I also briefly discuss how you can avoid the next 2008-2009 market downturns in regard to your retirement accounts.  You can also visit my Webcasts page where all webcasts will be archived.

Play Video Below or Click on WMV Link below post. Continue Reading…

There are retirement lessons from 2008 and 2009 that we need to discuss. Millions of retirement accounts and portfolios where decimated or seriously damaged in those years. I’m not going to discuss the mortgage crisis or politics. I’m going to focus on market performance and its relationship to the value of retirement accounts. Then, I’m going to give you some action steps to insulate yourself.

What happened?
The S&P 500 is the industry benchmark for performance for the majority of portfolio managers. In fact, most active large-cap fund managers try to beat the S&P 500. Sadly, over the last 3 years 64% of those managers have underperformed the benchmark.

In 2008, the S&P 500 lost over 13%. This means that if your accounts value was $1,000,000 at the beginning of 2008, it was worth $870,000 by the end of the year.

In 2009, the S&P 500 lost approximately 26%. This means that your $870,000 account would now be worth a whopping $640,380 at the close of 2009.

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401k plan Fees and Disclosures:
In May of 2012 there will be major regulatory changes occurring to employer sponsored retirement 401K-type plans. I’ve chosen two changes that will affect clients the most and I will cover them on a high level so, that you can act accordingly. I’m not going into great detail. However, I will provide you with resources to get more information.

For over a decade there has been a growing movement for more transparency on the part of the 401k industry particularly in regard to fees and expenses. While plans disclose some fees and sales charges, etc., other fees exist in a murky world of non-disclosure.

How much does it cost to own your retirement portfolio?
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Loss Aversion has a Hidden Cost

“In human decision-making, losses loom larger than gains.”
- Kahneman & Tversky (Prospect Theory)

In economics and decision theory, loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Some studies suggest that losses are twice as powerful, psychologically, as gains. (Wikipedia).

Simply put, losses have the same psychological effect as pain and have twice the impact of gain (pleasure). Our brains are wired to avoid pain. This affects the decision making process without our being conscious of it. The ramifications can be devastating. It leads to risky behavior.

The loss averse person attempts to avoid loss at all costs. But what are those costs? Continue Reading…

We have been brainwashed in regard to retirement, like retirement is some magical phenomena that happens when we reach our mid-60s. We deserve it, right?  Retirement is less about age and more about income.

Let’s think about it. If your living expenses are $42,000 per year and you want to retire at age 65, you’ll need $756,000 to support you to age 83. This does not take into consideration inflation, taxes, etc. The Consumer Price Index (CPI) as of July 2011 was 3.6%. This means that you’ll need a lot more than $42,000 in annual income. Every year we lose purchasing power.

What if you live to 85 or 90 years old? What if you need long term health care? What if you want to help fund education for your grand-children or plan travel during retirement?

If living expenses are $42,000 per year, your retirement accounts need to be kicking out more than $60,000 per year a decade from now.  Plus, you want to ensure that you don’t outlive your income. Continue Reading…

A tornado warning was issued at 5:17pm on May 22, 2011.  Seventeen minutes later a monster category EF-5 tornado unleashed it’s furry on a town. Within a few minutes 160 were dead, nearly 1000 injured and a town of 50,000 people were dealing with a new reality. I’m sure the residents of Joplin, MO woke up like any normal Sunday. By the time they went to bed Sunday night their world had been turned upside-down. Lives were changed forever.

On January 5, 2011 I wrote out my 3 year goals. One of those goals was to go on a mission. I have never been on a mission.  My focus verse for 2011 is; “Be devoted to one another in love. Honor one another above yourselves. Never be lacking in zeal, but keep your spiritual fervor, serving the Lord.” (Romans 12:10-11). When I first saw the devastation from the tornado on TV, I felt a tug on my heart. Those poor people was all I could think. What if it was my family? A few weeks later, our church announced that they would be sending teams to Joplin to help with relief efforts. This time I felt compelled to act. I remember saying to myself, “I must go to Joplin”. Normally, we would send a check to help in relief aid.  However, God had other plans.  I mentioned this to my wife and she looked at me and said she was not surprised at all. Then she followed with encouragement to act. Frankly, I was surprised by her not being surprised!

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