Ask HTM - Investing Deadlines, Building Generational Wealth, & Coping With Financial Regrets #808
Apr 1, 2024
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Topics include investing in stock market while maximizing real estate, building generational wealth, dealing with individual company stock from 401k, contributing to Roth IRA for 2023, and financial regrets. Discussion on money gear, HTM newsletter, Facebook group, credit card tool, and reducing cell phone bills. Enjoying Boneshaker beer by Moat Mountain and spreading the word about the podcast.
Maximize real estate investments alongside stock market for financial growth.
Invest in different investments for generational wealth building strategies.
Avoid concentrating investments in single company stock to mitigate risks and diversify portfolio.
Deep dives
Influencing Your Financial Future
To positively impact your financial future, make informed decisions when selecting a financial advisor, such as a certified financial planner (CFP) dedicated to your best interests. Consider income-boosting opportunities like creating a side business or investing in real estate, such as converting your home into an Airbnb while traveling. Address listener queries on investing deadlines, building generational wealth, and financial advice for their younger selves, exploring optimism and investing paths.
Optimal Vacation Spending
Evaluate how much to spend on vacations based on personal finance data, considering an average of 2% of income spent on vacations. Reflect on the pros and cons of allocating 5% to 10% of your income on vacations, while highlighting the importance of creativity in planning vacations and generating memorable experiences without overspending.
Maximizing Family Time
Prioritize spending quality time with family members, especially when children are young, to build strong relationships and create lasting memories. Emphasize the importance of preserving family bonds through intentional time allocation and shared activities like family routines, which contribute to deeper connections and mutual understanding.
Strategic Wealth Transfer Planning
Adopt tax-efficient strategies for transferring wealth to future generations, such as leveraging 529 accounts for educational savings and considering contributions to Roth IRAs to build tax-advantaged funds early on. Explore alternatives like custodial brokerage accounts and annual financial gifts to support children's financial growth and security. Utilize real estate investments and inherited assets with stepped-up basis for long-term wealth preservation and effective estate planning.
Diversification and Employer Stock Exposure
It's risky to invest substantial sums of money in a single stock, particularly if it's the employer's stock. Concentrating investments in one company raises the risk levels, putting both job security and retirement funds in jeopardy. Experts recommend never exceeding 5% of total investable assets in employer stock, emphasizing the importance of diversification.
Investing Strategies and Managing Company Stock
Taking a dollar-cost averaging approach can help in transitioning out of company stock positions into more diversified investments. By consistently selling and purchasing stocks without trying to time the market, you reduce the risk and simplify the investment process. Avoiding frequent logins to retirement accounts helps prevent impulsive decisions, encouraging a steady investment approach for long-term growth.
Let’s dive into the week with some fresh listener questions we have lined up for you! And don't just stand on the sidelines- if you have a question you’d like us to answer, toss your voice memo our way. It only takes about 90 seconds to record and you can find a step by step guide over at HowToMoney.com/ask . Regardless of how random or bizarre you might think it is, we want to hear it!
1 - Should I invest in the stock market if I’m planning to maximize my real estate holdings?
2 - I’d like to build generational wealth so how should I look to invest money for my son?
3 - What do I do about the individual company stock I own that I acquired via a 401k match?
4 - Is it too late to contribute to a 2023 Roth IRA?
5 - Financial regrets: how would we have invested $500, knowing what we know now?
Want more How To Money in your life? Here are some additional ways to get ahead with your personal finances:
Knowing your ‘money gear’ is a crucial part of your personal finance journey. Start here.
Sign up for the weekly HTM newsletter. It’s fun, free, & practical.
Find the best credit card for you with our new credit card tool!
Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.
During this episode we enjoyed a Boneshaker by Moat Mountain- thanks for donating this one to the podcast Todd! And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!