Benefits of Wise Financial Choices

Benefits of Wise Financial Choices

Devastating Results of Poor Financial Choices It takes time and effort to decide what our biggest priorities are. It takes even more time and effort to be sure that our financial decisions are always in harmony with these priorities. However, the reward is well worth the price. What is the alternative? Let me share with you some of the consequences I have seen people suffer as a result of poor financial decisions that were inconsistent with what they really wanted most: Constant stress and worry Nervousness Sleepless nights Obsessive preoccupation with money, with difficulty focusing on other things Fear of losing money or other possessions Taking too much risk with investments Missing out on investment growth opportunities Obsession over daily market fluctuations Poor physical health Poor mental, emotional, and spiritual health Strained family relationships Divorce Lack of freedom to change jobs or start a new business Lack of freedom to move to a new location Having to move in with extended family members Delayed retirement Inability to retire ever Inability to help others in need Poor performance at work Job loss Inability to appreciate the simple beauties of life Inability to obtain a quality education Inability to help provide a quality education for children or grandchildren Lack of passion, ambition, and excitement for life Lack of trust in others Lack of trust by others Indecisiveness stemming from fear of making another mistake Procrastination Overeating Oversleeping Shoddy personal appearance Loss of creativity Loss of self esteem Hopelessness Alcohol, tobacco, and drug abuse Suicide What is the cost of making casual financial decisions which are inconsistent with our biggest goals in...
How to Start Saving for Retirement (or Any Financial Goal)

How to Start Saving for Retirement (or Any Financial Goal)

Slow and Steady Wins the Race Often when I meet with people who are learning good financial principles for the first time, they are anxious to get started and want to do everything perfectly right away. I am glad for their enthusiasm, but this approach may not be sustainable. I would not normally recommend that people immediately start saving 20% of their income if they are only accustomed to saving 5%. That would be like trying to run a full marathon if they had never run more than six miles at a time. Marathon trainers recommend starting with a much shorter distance than the full 26.2 miles, then adding no more than 10% to the training distance each week. Otherwise, trainees could injure themselves and lose months of progress. Likewise, too big of a sudden increase in savings could cause “financial injuries” such as increased credit card debt, marriage tension, or spending binges. We may even become so frustrated that we stop saving completely. Of course any level of savings requires some sacrifice, but starting with a realistic amount that does not hurt too much is more healthy and sustainable. Then we can gradually increase it over time. How to Get Started Saving Those who are not saving anything at all right now might even want to try starting with only 1-2% of income. Most people are surprised how little they feel the difference when they increase their savings by modest amounts. Then gradually building from there is easier. Just remember that whatever amount we decide to save now, in the future we are likely to wish we had saved...
Putting Investors’ Interests First – By Choice or by Legislation?

Putting Investors’ Interests First – By Choice or by Legislation?

The DOL Fiduciary Rule After almost a decade of wrangling over the details, the Department of Labor’s Fiduciary Rule officially went into effect on June 9, 2017. What does this mean? All financial advisors are now required by law to always act in the best interests of their clients when providing advice on retirement accounts or retirement planning. This includes greater fee transparency, ensuring fees are reasonable, and disclosing potential conflicts of interest. How Does This Impact You? The good news is that this new rule has no effect on any of our clients’ accounts and does not impact the way we do business at Capstone Capital. Since our inception as an independent registered investment advisor in 2002, we have voluntarily adhered to the fiduciary standard as defined by the Advisors Act, and have clearly disclosed fees and potential conflicts of interest to our investors. Although this new rule has garnered significant controversy in the financial industry and certain aspects of it still need to be clarified, we feel that overall it will be a good thing for investors. We are especially pleased that substantial media attention surrounding the DOL Fiduciary Rule has increased public awareness and understanding of the importance of the fiduciary standard and the benefit it provides to investors. You may be thinking, “What’s the big deal? Don’t all financial professionals already put their clients’ interests first?” Unfortunately, the reality is that until now, many financial professionals were only bound by a “suitability standard.” In other words, they could recommend investment products that would give them the highest payout or count towards sales quotas, as long as...