Justin's Financial Philosophies
Budgeting | If you track it, you can control it.
Tracking every inflow and outflow is very important, as it is the foundation for everything related to your personal finances. You can’t go wrong with this age-old guideline: give 10%, save 10% and spend 80%.
Debt | Some debt is okay, but less debt is better.
Debt can be good and bad. Credit card debt is bad. Auto loans are not a great idea. Student loans are okay. Mortgage debt is good and likely the only way most people can own a home.
Taxes | Consider taxes in view of your entire financial situation.
Being aware of taxes and their impact on your overall financial situation is important. Tax benefits/drawbacks can be a reason, but should not be the only reason, to take action. Remember this old adage: "don’t let the tax tail wag the dog".
Investments | Buy, hold, rebalance and repeat.
First, create a proper asset allocation based on your financial situation. Then, buy and hold a well-diversified portfolio of low-cost, index investments to fill out the desired asset allocation. Finally, maintain the portfolio by rebalancing about annually and/or making adjustments as needed.
Retirement Planning | Save early and often.
The power of compound interest is an amazing thing, so save early and let your money work for you. And remember, the next best thing to starting early is starting now.
Life Insurance | Keep insurance and investments separate.
Life insurance and investments should almost never be combined, like in complicated cash value type policies. Term insurance is inexpensive, easy-to-understand and simply the best choice for most people.
Disability Insurance | Disability insurance is crucial.
Long term disability insurance is a must, as it replaces a portion of your income if you become disabled and are no longer able to work.
Property and Casualty Insurance | Insure against catastrophic losses only.
Property and casualty insurance is most appropriate for guarding against catastrophic losses, not nickel-and-dime claims. High deductibles and adequate emergency reserves are often the best way to go.
Estate Planning | We all die, so be smart and plan for it.
Estate planning is not about you, it’s about your loved ones. Help them out by planning ahead. At a minimum, proper estate planning includes having proper beneficiary designations, a will, a financial power of attorney, a health care power of attorney, a living will and/or a health care directive.
Education Planning | Save for college, but save more for retirement.
Saving for a child’s college education is important, but should not outweigh a parent’s need to save for retirement. This rule of air travel applies: "place the oxygen mask on yourself before assisting others".
Budgeting | If you track it, you can control it.
Tracking every inflow and outflow is very important, as it is the foundation for everything related to your personal finances. You can’t go wrong with this age-old guideline: give 10%, save 10% and spend 80%.
Debt | Some debt is okay, but less debt is better.
Debt can be good and bad. Credit card debt is bad. Auto loans are not a great idea. Student loans are okay. Mortgage debt is good and likely the only way most people can own a home.
Taxes | Consider taxes in view of your entire financial situation.
Being aware of taxes and their impact on your overall financial situation is important. Tax benefits/drawbacks can be a reason, but should not be the only reason, to take action. Remember this old adage: "don’t let the tax tail wag the dog".
Investments | Buy, hold, rebalance and repeat.
First, create a proper asset allocation based on your financial situation. Then, buy and hold a well-diversified portfolio of low-cost, index investments to fill out the desired asset allocation. Finally, maintain the portfolio by rebalancing about annually and/or making adjustments as needed.
Retirement Planning | Save early and often.
The power of compound interest is an amazing thing, so save early and let your money work for you. And remember, the next best thing to starting early is starting now.
Life Insurance | Keep insurance and investments separate.
Life insurance and investments should almost never be combined, like in complicated cash value type policies. Term insurance is inexpensive, easy-to-understand and simply the best choice for most people.
Disability Insurance | Disability insurance is crucial.
Long term disability insurance is a must, as it replaces a portion of your income if you become disabled and are no longer able to work.
Property and Casualty Insurance | Insure against catastrophic losses only.
Property and casualty insurance is most appropriate for guarding against catastrophic losses, not nickel-and-dime claims. High deductibles and adequate emergency reserves are often the best way to go.
Estate Planning | We all die, so be smart and plan for it.
Estate planning is not about you, it’s about your loved ones. Help them out by planning ahead. At a minimum, proper estate planning includes having proper beneficiary designations, a will, a financial power of attorney, a health care power of attorney, a living will and/or a health care directive.
Education Planning | Save for college, but save more for retirement.
Saving for a child’s college education is important, but should not outweigh a parent’s need to save for retirement. This rule of air travel applies: "place the oxygen mask on yourself before assisting others".
Garrett Investment Advisors, LLC, a Fee-Only SEC registered investment advisor. Tel: (910) FEE-ONLY.
Nichols Financial Advice may offer investment advisory services in the State of Kansas and in other jurisdictions where exempted.