Today I want to address a question I have been getting a lot from clients and friends. This question is usually premised by a comment or concern sounding something like this, “I am worried that this election in November means that [FILL IN THE BLANK] will win the presidency and that will have a negative impact on markets… does this mean that I should sell my stocks?” In order to answer this question, I need to take you on a little journey and give you a better understanding of how the stock market works. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Thoughts On Money [TOM]

A Leading Indicator

Here’s the problem with commitments, they take time and time is a finite resource. Personally, I need to learn to not overcommit. More and more, I see products promoting themselves with financing options. Everything from a mattress to a stationary bike is being marketed with long term financing options. Something with a $2,500 price tag might seem too rich, but a $60 monthly payment over 3 or 4 years becomes more palatable. Our culture has begun to create “luxury” everything and these price tags for these “luxury” items are meaningful. If lump-sum purchases were the only option, the demand would shrink. What happens is that these seemingly “micro” commitments compound, and as one accumulates more commitments, they begin to place an even greater burden on their cash flow. These commitments do not only come in the form of financing large purchases they also surface as subscriptions. Subscriptions to everything from streaming video services to theme park memberships. These subscription models make sense from a business perspective because businesses want predictable and sustainable income. For you, the consumer, this means that you have a defined amount of your income that has already been spoken for. Here’s where I want to encourage you to shift the way you think about subscriptions and financing. When you choose to commit to something today and plan to pay for it later you are choosing to allow your “current self” to enjoy the utility of your purchase and you are committing your “future self” to pay for it. Naturally, we have a tendency to derive the greatest enjoyment from a new purchase at the beginning, yet the cost lives on. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

The Commitment Crisis

Many researchers conclude that an average adult is responsible for making 35,000 decisions a day. Some of these decisions are big, like who you will marry, and others are small, like deciding whether you want cream and sugar in your coffee. To help us navigate these complexities, and the barrage of decisions to be made, we lean on heuristics – little mental shortcuts that help us make quick rule-of-thumb judgments. Today I would like to address one of these common finance simplifications, “Cash is king” and discuss how we should and should not be applying this to our personal finances. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Cash is Not Always King

Joined by TBG Advisor Sean Latimer, your host Trevor Cummings answers some questions of how markets really work. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Temper Your Tantrums

The human condition finds most of us being short-sighted. What I mean by that is that we tend to get caught up in current events and what’s happening in the here and now, leaving us more often lacking as long-term planners. But beyond solving the short-term (short-sighted) of say, needing a paycheck to keep the lights on, we (investors) also have other aspirations for our money and what it will finance in the future. That growing balance in our investment account represents the accomplishments that coincide with our goals and desires. Will we have enough to pass down to our heirs or the charities that are near and dear to our hearts or the comfort that our nest egg provides as an emergency resource. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Will I Make It?

Today’s article is about that day we hang up our occupation and step into retirement. The question is, will you love it? Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

I Worked My Whole Life for This?

The key to making good decisions is creating an environment that is conducive to success. When it comes to investing, much of this battle is fought in your mind and it revolves around expectations. Most bad financial decisions will be a result of an investor reacting to disappointment – an investment did not meet their expectations, and this triggered a feeling of disappointment which then lead to a poor decision. Here on TOM, we’ve stated that there are big differences between long term average returns and the actual returns you experience on a yearly basis. If you hear someone say something like, “The stock market has returned 9% on average over the last 100 years” then you might expect that if you invest in the stock market then you should always expect a 9% return. Whenever we see this word expect, it should be a warning sign. So… to equip ourselves for the realities of markets and to create that optimal environment for success, we need to first set the right expectations. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Expect The Unexpected

I love playing basketball, watching basketball, thinking about basketball. I love basketball. Maybe it’s because it not only requires skill, agility, and endurance but also because the best teams win because they have a good game plan, one that is able to adjust to their opponent, one that is disciplined and practiced to perfection. If you would be so kind as to indulge my obsession for a minute, I believe the analogies I use for my favorite sport and my favorite profession will be interesting and helpful. So let’s dribble on in to TOM. Sorry, I couldn’t help myself! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Portfolio Pick and Roll

This past week I had the pleasure of getting lunch with a recent high school grad to discuss the wonderful world of finance. He’s a bright young man and is exploring what he wants to study in school and the career path that most interests him. He’s got a knack for numbers and thinks investing and/or advising might be a good fit. These exploratory conversations about finance often tend to spark some really interesting dialogue, getting me to the core of why I do what I do. With such a tumultuous time in the market on his mind, this young lad asked a simple question – Why do people invest? While the question is simple, the answer does have some interesting components to it. This week’s Thoughts On Money takes on this and more. So off we go… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Why Would I Want to Invest in a Week Like This?

I typically devote some part of my weekend to researching on what I plan to discuss each week on Thoughts on Money [TOM]. I had no idea that my decision to write on topics of risk, drawdowns, and recovery periods, as I believe these are important topics for investors to understand, would also be so timely based on how the markets kicked off this week! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

The Endurance Sport that is Investing

Will the income from your portfolio satisfy all of your living expenses in retirement? This week's TOM looks at important factors to consider. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Living Off the Interest

In the past few weeks, I’ve found myself in multiple conversations explaining the need and purpose of life insurance. We’ve covered this topic in previous issues of TOM, but based on the recent inquiries, I thought it appropriate to provide a succinct refresher. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Are You Covered?

Topics discussed: In the old fable The Tortoise and The Hare we find this classic tale of the slow and steady vs. the erratic and volatile. This fable lends itself well to many financial analogies, and rightfully so. Looking back at my personal investments over the years, I am pleased with the prudent, tortoise-like decisions I’ve made yet I still experience some level of disappointment as I reflect on a few emotional, hare-like choices that I now regret. As an analogy for much of life, investing is a marathon, not a sprint. In TOM this week, let’s examine the nuances of taking one’s time when investments are involved and how easy it can be to rush toward a fast buck. And off we go… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Slow and Steady Is the Way to Go

Topics discussed: I had two conversations last week that came to opposing conclusions about 2020. One friend told me they had a gut feeling about 2020 and they felt strongly that the momentum from 2019 would carry over and their stock investments would do even better in 2020. Another friend told me that they felt like 2019 led to an overheated market and they were fearful whether they should own any stocks at all. To both conclusions, I replied with the same question, “Why so?” I asked this question because I wanted to know if their conclusion was grounded in logic and evidence or if it was simply birthed from a feeling. Our emotions can be deceiving, and our memories can be selective, which is why I don’t put a lot of confidence in these types of gut predictions. But, hey, let’s lean into these claims and parse them out in today’s Thoughts On Money. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Episode 17 - Only Hindsight is 20/20

Topics discussed: As we closed out 2019, I fielded a lot of questions about Donor Advised Funds (DAFs). For some, this inquiry was sparked by an interest in the tax benefits for 2019 planning and for others, it came from a place of curiosity whether a DAF would be suitable for their situation. I know we’ve touched on Donor Advised Funds before here at TOM but based on all the inquiries, it would appear to be worthwhile to conduct a refresher. Giving has its own rewards. This week, TOM helps you increase those benefits as you pay it forward. Join me as we discuss one of my favorite tools in personal finance. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com 

Episode 15 - Clarity on Charity

THOUGHTS ON MONEY [TOM] is a podcast looking at simple truths on money. Everything from budgeting to investing to decision making. A great place to come for answers to your personal financial questions or to spark thought on how to improve your financial life.

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Thoughts On Money [TOM]

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