The following is an interview I did with Joe Messinger of Capstone Wealth Partners. I wanted Joe's take on some financial stuff that was on my mind and probably yours too.
Why should someone consider engaging with a
are 3 main reasons why people typically decide it is time to work with a
financial advisor 1. They take very little interest in financial matters and
they are intimidated by money 2. Their personal financial situation has become
more complex than they are comfortable with and they know
they are missing opportunities and 3. TIME!!! This is the biggest reason to
consider working with a financial advisor.
You simply don’t have time to stay up to date on all of the aspects of
your personal financial plan, and it is much more valuable to delegate those
matters to someone else that you trust to consolidate, coordinate and simplify
your financial life. Pay someone else to
worry about your financial matters so you can spend your TIME doing what you
are best at, and doing the things you love to do with the people you love to do
What are a few of the most common financial
mistakes people make with their money?
They wing it. People don’t
plan to fail, they fail to plan. A good financial plan should act as a guiding
document to help you make smart choices with your money so you can achieve YOUR
goals for the reasons that are important to you. An Easy exercise for planning retirement is
to ask yourself 3 questions; By when would I like to retire? What amount of net spendable money do I need
each month to fund a comfortable retirement?
Now that I am there, what are 3 words that describe what I am thinking
and how I am feeling now that I am there?
They procrastinate – everyone today knows they should be saving to fund
retirement and/or college. Don’t
wait! Get empowered and take action
They don’t seek advice when they know they
need it. It is hard to know who to trust, so make sure
to ask people that you trust who they work with and if they are loyal to them. If things sound to good to be true, they
probably are. Use your spider man sense!
They don’t pay attention to interest rates. An interest rate
is simply a lender telling you how much you need to pay them to use their money
for a period of time. Obtaining a lower
interest rate on your mortgage for example could mean tens of thousands of
dollars over the life of the loan, and increase your current cash flow at the
They don’t think it through. People often
times get in over their heads with a payment, or run a massive amount of credit
card debt. If they just thought it
through and asked themselves “Can I really afford this? Do I really NEED
this?” they would be much better
off. Buy with your brain, not your
It seems like we’ve got some major fiscal
hurdles (higher taxes, inflationary pressures, market ups and downs, etc.) in
front of us here in the U.S., what are some ways to protect and preserve the
money we make?
families today are living paycheck to paycheck.
One of the most important things you can do is set aside 6 months of
your house hold expenses in an emergency cash reserves account. FYI – the family vacation to Florida is not
an emergency! When times are good is the
best time to plan for the uncertainty that will indefinitely come. Another important thing is to make sure that
you are properly insured in case the unthinkable happens. Work with a professional to determine the
proper amount and type of insurance for you and your family. The market will always have ups and downs and
the most important thing with investing is to make sure that you are in a
diversified portfolio that is appropriate for your age and time horizon. Understand the risks associated with
investing and don’t let emotions drive your decisions for long term
Saving and paying for college is getting a
lot of attention right now. What are some practical things a person can do to
brighten up this part of their financial picture?
cost of a 4 year education at a state school has doubled in the last 10 years,
and the costs continue to rise. There
are 2 parts of the equation; 1. Saving
for College and 2. Paying for college
Every little bit helps in saving for college. I would recommend that you start saving at
least something into a 529 college savings plan, even if it is $25 a
month. Also, ask grandparents to
contribute to the plan. Perhaps instead
of giving the kids money to blow, ask them to split it 50/50. Half they can see them enjoy now, and half
can go to help fund college. As far as paying for college understand that
there are a lot of ways to pay for college.
Work to create a proactive plan, not
a reactive plan to pay for college.
Before you even apply to colleges, predetermine your Expected Family Contribution (EFC) as
determined by the Free Application for
Federal Student Aid (FAFSA). Also, determine
your family’s college funding philosophy; How much of college will you pay for,
for each child. For example “we are
committed to paying for up to 50% of what an in state school would cost
regardless where you go to college” or
“we will pay for $10,000 per year for each of our kids”. Federal Financial aid, Education Tax
incentives, Private Scholarships, scholarships and grants from the colleges and
universities, and student loans will likely all contribute to paying for
college. It is an elaborate process with
a lot of moving parts, so start early and be an informed buyer of a college
Do you have a strategy you recommend for
people that may have never put a dime into a mutual fund or a 401K?
START! Get educated on your options and go. If you work at a company with a 401(k) or
other retirement plan, that is a great place to start. Request a meeting with a representative from
the plan so that you are aware of your options.
Many retirement plans now have what is called a target date fund option. These funds are a great way to get
started. They essentially ask when you
plan to retire, and professional money managers do all of the heavy lifting to
select a portfolio of investments that is appropriate for you based on your
time horizon and your risk profile. These types of funds are also available in
self-directed Individual Retirement Accounts (IRA). If you are looking for one on one help, ask
people that you trust if they work with an advisor that they are loyal to. Don’t be afraid to meet with 2 or 3 advisors
to find one that is a good fit for you.
Joe Messinger began his financial planning
career in 2001, and worked with industry-leading financial services firms. His successes as a financial advisor lead him
to senior leadership roles where he had an opportunity to coach and mentor some
of the top financial advisors in the country.
After nearly a decade of working for some of the largest firms in the
industry, Joe concluded; “The only way to deliver truly comprehensive,
unbiased advice with no conflicts of interest is to operate as an independent
fee only Registered Investment Advisor.” In 2009 Joe co-founded Capstone Wealth
Partners to do just that