_One of the biggest concerns for retirees and near-retirees alike is, “will I have enough income to cover essential living expenses throughout the course of my lifetime?” Many retirees from the “pension era” are often able to live off of a combination of pensions, Social Security, savings, and IRAs. Because of their pensions, these retirees are often able to make ends meet by taking only the required minimum distributions from their retirement accounts.

Those days are quickly coming to a close now that many companies and institutions no longer offer traditional pension plans. The result is that for many, the various ways in which they fund their retirement will change, if they haven’t already. Those without pensions will have to rely solely on accumulated savings to bridge the gap between Social Security and the cost of living.

How can you turn your retirement savings into a guaranteed income that will allow you to enjoy the lifestyle you envisioned for your retirement?

    Annuities for many retirees may provide the answer.

Annuities come in many forms with a wide range of options. Both benefits and expenses vary widely from company to company, so it is best to do your homework and discuss your options with an advisor. Among the most popular types of annuities for generating guaranteed income are:

    Income or Immediate Annuities.

These interest-rate-sensitive annuities can be purchased with a lump sum investment with the goal of providing an immediate income. They begin paying out a fixed immediate amount of income each month for the remainder of one’s life, and depending on the type you buy and options you choose, you can even guarantee that the income last not only your lifetime, but the lifetime of your surviving spouse as well.

For more information on the various options for guaranteeing retirement income, give me a call at 480-320-2302 or Email me at paul.mann@empirewealthaz.com.  Click here to subscribe to our weekly email and receive stock market and economic updates in your inbox every Friday.

I believe that anyone can manage their own investments as they plan for and live through retirement.  However, you must have an investment strategy, the time to develop your strategy as well as research which investments will fit best within your strategy, and the self-discipline to stick to your strategy when times are tough.  If you are lacking any of these 3 things, you most likely need to hire a financial advisor to make sure your portfolio stays on the right track.  

1.       Strategy:  Do you have a proven investment strategy that not only helps you choose your initial investments, but also tells you when it is time to make adjustments or rebalance your portfolio?  Additionally, do you understand what makes certain investments go up and down, what a negatively or positively correlated portfolio is and how to create one?  Also, do you know what systemic risk is and how to protect your portfolio from it?

2.       Time:  Do you have the time it takes to research potential investments, watch the markets and keep up to date on current economic conditions as well as the current political environment?  It also takes additional time to stay educated on new investment products.  If you lack the time, or lack the desire to take the time to do all of these and more, then you may need to hire a financial advisor.

3.       Discipline:  When the markets aren’t acting in a favorable manner, do you have the mental discipline to stick with your investment strategy?  Most individuals find it extremely difficult, if not impossible to separate their emotions from their money.  Although the stock market boasts a long term average annual return of 10% to 11%, most individual investors squeak by with an average annual return of 2% to 3%.  The reason for this discrepancy is that we, as humans, allow our emotions to have an effect our investment decisions.  Too many investors allow themselves to get caught up in the hype of a stock that has recently had a 30% jump.  Then after the same stock drops 40% on bad news, they will sell out in a panic.  The result, they end up buying the investment at a high price, and selling it at a lower price.  Thus resulting in a less than desirable return on their investments.

If you cannot honestly say that you have all 3 of these areas completely covered, do yourself a huge favor and at least speak with an experienced financial advisor.  Email me at paul.mann@empirewealthaz.com to schedule a free consultation where we can discuss your financial plan.  Click here to subscribe to our weekly email and receive stock market and economic updates in your inbox every Friday.

When I was 18 years old, my then girlfriend’s older brother gave me some great advice on how to establish good credit.  He told me to save up $1000, and then use that $1000 as collateral for a secured bank loan. 

If I remember right, my credit union charged me about 4%.  They also set the payments up to be automatically transferred from my savings account on a monthly basis for 13 months.  It was simple, I didn’t have to remember to make any payments, and I only had to pay $40 in interest to jump start my personal credit history.  The best part was I didn’t risk being another vulnerable 18 year old with a credit card.

The advice was so instrumental in starting me on the road to good credit, my wife and I were able to buy our first home just a few years later.  Throughout my career I have given this same advice to hundreds of people attempting to rebuild their credit after a history of bad financial decisions.  As long as they stick to the plan, it is instrumental in getting their credit on the right track every time.

Fewer than half of Americans regularly check their credit scores, and over 60% of people have major misconceptions about what information plays a role in determining their score.  Your credit score has nothing to do with your age, gender, or career.  Instead, it is built simply by plugging transactional information about how you have managed your bills and credit lines into a formula.  The formulas used by credit reporting agencies all vary slightly, but they each have five basic components:

1. Payment History – The overall history of payment to all lenders and other billing organizations accounts for about 35% of your score.
2. Debt-to-Income Ratio – Approximately 30% of your score is determined by the total number of accounts you have, your credit limit, and how much of that credit is being used.
3. Credit History – Another 15% of your score is bolstered by the amount of time you’ve used credit responsibly.

For more useful information and financial advice, including the 2 other components that make up your credit score, subscribe to our weekly email update by clicking here.

When I was around 5 years old we had one of those above ground swimming pools. The walls were about 4 feet high and although it seemed huge to a 5 year old, it was only about 12 feet in diameter. Every year, on the first day of summer vacation, my dad and older brothers would spend several hours pulling the pool out of storage, putting the walls together piece by piece, carefully putting the liner in place, and then filling the pool with the garden hose.  I would then spend the next 3 months of my life in the pool.

Because I grew up in Mesa, and as you probably know it gets hot in the summer time, the water would slowly evaporate from the pool.  To keep the water level at ideal swimming level, every couple of weeks we would need to add a few inches of water.  On one of these occasions we had the garden hose in the pool while we were all swimming.  If you’ve ever had this experience you know that the water coming directly from the hose is a few degrees colder than the water in the pool.  One of my older brothers, being the typical older sibling, thought it would be funny to spray my head when I came up for air.  I’ll never forget the shock I felt when my head popped above the water and… BOOM!  I was hit with what seemed like a fire hose of ice cold water!  Out of surprise and protest I yelled out, “MOM TOLD ME NOT TO GET WET!”  It wasn’t until I looked around at my giggling siblings that I realized how foolish I sounded, yelling this phrase as I stood in a pool with water up to my chin.  For the rest of that summer, every time we would go swimming, that line was our family joke.  As I’d jump into the pool, my older brothers would yell at me, “MOM TOLD YOU NOT TO GET WET!”

The reason I share this story is because it reminds me of how many of us treat investing.  As humans we typically make our investment decisions based on either fear or greed.  Bill at work tells you about a penny stock that he read about in a stock chat room.  Everybody, including Bill, fully expects the stock to jump from 5 cents to 10 cents a share over the next couple of weeks.  As you think about how great it would be to double your money in just 2 short weeks, you begin to think about the new car you could buy with your gains.  The more you think about that car, the more excited you get about making the same investment that Bill made.  You get so excited that your adrenaline starts to flow and your heart rate increases significantly.  Finally, you decide to disregard your spouse’s advice, and take $20,000 out of your fixed annuity, because it wasn’t growing very fast anyhow.  With the $20,000 check in hand, you walk into a discount brokerage firm, open a new account, and instruct the Stockbroker to invest all of the $20,000 into the same penny stock that Bill is invested in. 

It’s done!  You are all in!  Now all you have to do is sit back and wait for the profits to start rolling in.  Unfortunately, just as your stock is gaining momentum, somebody in Bill’s chat room posts a very convincing argument against your penny stock and it drops to 2 cents per share.   Out of surprise and protest you scream, “MOM TOLD ME NOT TO GET WET!”  But it’s too late.  You are standing in a pool with water up to your chin.

In my 12 years as a Financial Advisor, I have seen and heard this scenario thousands of times.  Not always as drastic.  Usually not with penny stocks, but it always happens when investors allow their emotions to drive their decision making.  A large part of my job as a Financial Advisor is to counsel my clients.  There have been times when certain clients want to move all of their retirement savings into high risk investment vehicles, hoping for that home run.  It’s my job to help them see through the fog we call greed, and take a look at reality.  Yes, there is a possibility that the stock could jump from 5 cents to 10 cents.  But it could just as easily drop from 5 cents down to 2 cents per share.  On the other hand, when the stock market is going through a cyclical correction, fear naturally kicks in, and some may want to abandon their investment strategy and sell all of their stock investments.  At these times my job is to sort through the tripe that the media generates, find the information that is truly relevant to my clients’ investments, and then talk them down off the ledge.    

The stock market is not for everyone!  I know that phrase is the last thing you would expect to hear from someone with over a decade of experience as a Financial Advisor.  Don’t I make my living by getting people to invest in the stock market?  Well, truthfully, the answer is no.  I make my living by creating the best investment strategy for my clients, and then finding the best investment tools that fit within that strategy.

In the 1987 movie Wall Street, Gordon Gekko said:  “The point is ladies and gentlemen that greed, for lack of a better word, is good.”  I propose that fear and greed are neither good nor bad.  They are both necessary emotions that help us, as human beings stay in check.  Greed drives us to find higher potential returns, and fear keeps us from making stupid investments that are unsuitable for our situation.   However, fear and greed must be controlled with a short leash.  When we allow either one of these emotions to control our financial decisions, we have truly become a slave to our money.

My intention with this blog is to share some of the knowledge and insights that I have picked up over the past 12 years that I have been employed as a Financial Planner. Throughout the year, I will be posting information on financial issues that I think may be pertinent or that the followers of this blog are interested in or concerned about. So, please feel free to suggest a topic that you are interested in at any time. It’s my opinion that my industry has spent the last 100+ years attempting to make investing sound as complicated as it possibly can. One of the things I will attempt to do with this blog is to demystify my industry.

That being said, I guess I should introduce myself a little better. I am number 4 out of 5 kids. Although I have always considered myself a native Arizonan, my family moved here from Hawaii when I was 1 year old. I grew up in Mesa and have lived all but 3 years of my life in the East Valley. When I was 19 I volunteered to serve a mission for my church and received a call to serve in the Taipei, Taiwan Mission. For 2 years I served the people of Taiwan, learned their language (Mandarin Chinese), and learned their culture. I have not been back to Taiwan since I returned home in 1994, but I have promised my wife I’ll take her there before I turn 45. Let’s just say I have less than 10 years to fulfill that promise.

When I met my wife in 1995 I was working as an Auto Detailer at a large dealership in Tempe. When we got engaged I figured $17,000 a year was not enough to support a family on so I started looking for ways to improve my income. Because we were in the middle of the tech bubble of the late ‘90s I started reading books on day-trading. I became somewhat of a specialist in trading stock-options and over the next couple of years I made a lot of money, and unfortunately, I lost a lot of money too. I realized that if I was going to make and keep money as a professional investor, I needed to find a new career in the Financial Services Industry. I figured that was the best way I could not only watch the market on a daily basis, but also learn how to invest a portion of my money more conservatively so I didn’t lose all of my gains in one bad trade.

I was lucky enough to find a job at Charles Schwab. After going through their training program I successfully tested for my Series 7 and Series 63 licenses. I worked on their Option Trading Team at their inbound call center in North Phoenix. My job was to take phone calls from clients wanting to place option trades, discuss trading strategies and discuss market and economic conditions. I averaged about 100 calls per day, so you can imagine the abundance of different situations I experienced in the 5 years I worked there.

After 5 years at Charles Schwab, I made a move to AXA Advisors, a Life Insurance Company where I learned the Insurance side of my industry. After a short career with AXA, I landed a position at Chase Bank as Vice President of Investments. By this time my purpose in working in the Financial Services Industry had evolved. I was no longer in it solely for my own financial gain. I had realized that many people need help with their retirement planning and basic money management.

As Vice President of Investments at Chase I learned the annuity side of the industry. I learned about the three different types of annuities and where each one of them is appropriate for my clients. Chase is also where I met my current business partner, TJ Tillman. Together we were able to help several of our clients achieve their investment goals. In 2010 we decided we could do more for our clients with our own firm and we founded Empire Wealth Management, LLC.