knowing where your money's going

 When people think of financial planning they often think of planning for their retirement, investing their money, learning about strategies to save on taxes, etc. These are great topics that I enjoy helping people with, but one of the most important topics is often one of the most overlooked, budgeting. It is important to know how much money you spend and where it is going. There are many variables in financial planning of which we have little or limited control over, such as how the stock market performs, tax rates, how long we’ll live and others. One area we have more control over is where we spend our money, so it needs to be done responsibly. We’re all familiar with stories of lottery winners or professional athletes who go broke. In their case, it wasn’t a lack of income but a lack of controlled spending. Below is an example of a pretty typical conversation in my office: Me: As part of financial planning it’s important to understand how much money you spend, and I’d like to evaluate your expenses. To get started, do you have an idea of how much you spend in an average month? Client: Um, I’m really not sure, but it’s probably about X each month. We continue the conversation and I provide details on how to obtain this information. After a week or two and doing some digging: Client: So, we were a little off. You know that number we gave you, we should probably DOUBLE IT. It’s amazing how quickly expenses add up. In retirement some things will be different, you likely won’t be saving towards retirement any longer, you may be in a lower tax bracket, if you receive Social Security some of it won’t be taxable, your health insurance and medical expenses will likely be different, you may want to budget extra travel, etc. For this reason, looking at current expenses as well as future expenses is necessary. Most people really don’t like the idea of living according to a budget, and I’m not saying that everyone must keep track of every penny. If you’ve demonstrated that you can live within your means and save for future needs, you don’t need to track every dollar. However, if you feel financial stress, your next paycheck can’t come soon enough, you carry ongoing credit card debt or you feel like you don’t have control over your money, a budget is probably the best thing you can do to improve your financial picture. It may tell you that you must make some tough decisions such as cutting back on things you like doing, or you may need to earn more income to sustain your lifestyle and meet your goals. Either way, this information will be helpful to you. It may seem painful to sacrifice certain items, but it is less painful than not accomplishing your goals and living with regret. If you’d like some resources to get started on putting together a budget, email me at advisor@blakegallion.com.  Advisory services offered through Arbor Point Advisors. Securities offered through Securities America Inc., Member FINRA/SIPC. Arbor Point and Securities America are separate companies. CA Insurance #0E88557

CA Earthquake Insurance, Should I buy it?

did you feel it? earthquake insurance

My family has a tradition on the 4th of July to begin our celebration with what we’ve titled Papa’s Patriotic Pancakes at Old Poway Park. I was talking with my dad on the 4th when I thought I felt a slight shake. I asked him if he felt it, but he didn’t, and no one else around seemed to react too much. Later he told me I was right and there was an earthquake in Ridgecrest, CA that morning. It turns out it was pretty significant at a magnitude 6.4, and the following day there was a 7.1 earthquake in the same area (I didn’t feel that one). California experiences about 90% of the nation’s earthquakes, yet that is about the same percentage of people without earthquake insurance in the state. Earthquake insurance is exactly as it sounds, it covers your home and property against damages caused by earthquakes, which are not covered by your homeowner’s policy. In the past, most people felt it was too expensive, as costs skyrocketed and many insurers stopped issuing coverage after a series of devastating earthquakes in CA. As a result of that, the California Earthquake Authority (CEA) was formed. Many of the most popular insurance companies now affiliate and write policies through CEA. As has always been and continues to be the case, earthquake insurance generally has high deductibles. This coverage is designed to insure against major damage. Here are a few reasons you may want to consider purchasing earthquake insurance: Homes are often a significant asset and large part of household net worth in CA.I believe it can make the most sense to insure against events with low probability but high impact. These tend to be relatively less expensive to insure compared to high likelihood events, which often make more sense to plan for, or self-insure.Costs have come down in many areas and you can design a policy balancing the coverage and premium that you’re comfortable with. Those that have discussed insurance with me know that I tend to lean towards putting enough insurance protection in place to give you peace of mind and protect you and your loved ones from significant financial impact. Yet, I don’t want anyone spending exorbitant amounts of money insuring against events that you hope never take place, knowing there is a higher probability that you could invest that money for you to spend and enjoy in the future. The right types of insurance coverages are unique for everyone and knowing your options and what is available can help you make informed and purposeful decisions. To learn more about earthquake insurance and to get a cost estimate, go to the California Earthquake Authority website at https://www.earthquakeauthority.com/. The California Department of Insurance also has information available at  https://www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/eq-ins.cfm.  Advisory services offered through Arbor Point Advisors. Securities offered through Securities America Inc., Member FINRA/SIPC. Arbor Point and Securities America are separate companies. CA Insurance #0E88557

Q2 2019 Market review

The second quarter of 2019 was positive across the board. The US market was up over 4%, with international right behind it and emerging market stocks squeezing out a small gain. Bonds both in the US and globally were up around 3%. For a detailed Market Overview as well as an article titled “The Uncommon Average” which discusses average market returns and the actual range of outcomes experiences, click here. Planning note: I must admit, sometimes it feels a bit amazing how long this bull market has continued as it is over 10 years old, the longest on record. For years I’ve been hearing concerns that the market is too high, at its peak and overextended. I understand those sentiments, but they haven’t stopped the market from going higher. The same holds true for the bond market as rising rates (and therefore declining bond prices) have been a concern to many people for a long time. There is no doubt the market will have struggles, there will be another recession and this bull market will end. That said, my advice is to have an investment strategy designed around your financial plan, not the latest headline news or your emotions, there is too much at stake.   Advisory services offered through Arbor Point Advisors. Securities offered through Securities America Inc., Member FINRA/SIPC. Arbor Point and Securities America are separate companies. CA Insurance #0E88557

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Retirement Planner in San Diego

 

Advisory services offered through Arbor Point Advisors. Securities offered through Securities America, Inc., Member FINRA/SIPC. Arbor Point Advisors and Securities America are separate companies. This site is published for residents of the United States and is for informational purposes only and does not constitute an offer to sell or solicitation of an offer to buy any security or product that may be referenced herein. Persons mentioned on this website may only offer services and transact business and/or respond to inquiries in states or jurisdictions in which they have been properly registered or are exempt from registration. Not all products and services referenced on this site are available in every state, jurisdiction or from every person listed. CA Insurance #0E88557

Advisory services offered through Arbor Point Advisors. Securities offered through Securities America, Inc., Member FINRA/SIPC. Arbor Point Advisors and Securities America are separate companies. This site is published for residents of the United States and is for informational purposes only and does not constitute an offer to sell or solicitation of an offer to buy any security or product that may be referenced herein. Persons mentioned on this website may only offer services and transact business and/or respond to inquiries in states or jurisdictions in which they have been properly registered or are exempt from registration. Not all products and services referenced on this site are available in every state, jurisdiction or from every person listed. CA Insurance #0E88557​

Rancho Bernardo Financial Planner