Welcome to another edition of Finance Friday.

I hope everyone has had a great week so far!

Thank you to those who filled out the survey last week, those responses are very helpful in improving this newsletter.

For those who were not able to – and would like to –  I have included the link again in this letter. Your responses are anonymous.

Here is the survey link.

Thank you for your input.

Here is what I have come across this week, I hope you enjoy.

Quote I am pondering:

“The secret to getting ahead is getting started. All of the planning in the world doesn’t mean anything if you never put anything into practice. Take what you know and make a start. There will always more to learn but if you never start, you’ll never achieve.” – Mark Twain

This is a quote my mom shared with me about a year ago. I have thought about it often since.

I love learning, but I also get caught up in it at times. This is especially true when it comes to business.

I find myself overthinking and complicating the path forward. Since I read this quote, I have tried to act on what knowledge I already have – while adding useful information I can apply right away.

While I am still not perfect at it, I have made a lot of progress.

I have found there is a fine line between learning and using learning to delay action. For me I have tried to immediately implement what I learn instead of consuming as much content as possible.

I am reading less than I used to. Instead, I reflect much deeper on what I have read before moving on.

I have found that I am actually learning more by reading less, especially when I am being more intentional with what I am reading.

Good question to ask yourself: Am I using learning as a distraction for action?

Both are important, but must be done with balance.

Finance Tip:

The tip for this week is a reminder to review your retirement accounts.

In working with my clients, I have come to understand how foreign investing, and specifically investment accounts are to many people.

When you leave an employer, you can usually leave your 401(k) with that employer, or you can roll it over to an IRA account.

When I ask some of my clients about the 401(K)’s they have had with other employers they usually laugh and say, “I have no idea where that money is or how much is in it.”

I have even had clients say they assumed they lost some or all of that money when they left that job.

I don’t blame them for not knowing, employers usually do a poor job of explaining this process and what your options are when you leave.

The tip for this week is to do an accounting of all of your 401(k) accounts.

You will likely have to call past employers and talk to their human resources department to request your account info.

Once you have this account information, and know how much you have in 401(k) monies, it may not be a bad idea to move these funds so they are all in the same place. This is my personal preference, but it isn’t necessary.

You can either roll past monies into an IRA account, or you may be able to roll it into your current 401(k) – depending on the rules of your current plan.

Having this money accounted for will give you a better idea of how you are doing with retirement.

Word of caution, for some it may be tempting to take this money and use it to pay off debt or a nice vacation.

Not only will you pay taxes and hefty fines if you do this, it will also have a substantial impact on your compounding growth.

I ran a scenario for a client yesterday, he wondered if his $20,000 in a previous 401(k) should be used for paying down debt instead of rolling it over into an investment account.

Over a 30-year period of investing, with his specific scenario, if he had taken that money out to pay off debt, he would have had $170,000 less at retirement.

That is the true power of what $20,000 now will do for you with 30 years of compounding growth.

With the fees and taxes, he would have walked away with $12,000 to $14,000 of that $20,000 he had in his account – immediately losing $6,000 to $8,000.

Not only do you lose a lot of money up-front, you will also lose the $170,000 at retirement because of lost growth.

As temping as it may be, don’t do it!

If you have money at a few different places, now is a good time to get it organized so you know exactly what you have.

Stock Market Update:

Those 401(k)’s we just talked about are doing better every day.

The market has almost completely turned course and now only wants to go up.

We have seen volatility drop substantially. This is key because prior to the market turning around, the volatility index was flashing red for the prior three months.

Despite political concerns and a few low corporate earnings, none of this seems to be concerning the market.

It will be interesting to see how this affects real estate this coming spring. Sentiment is important when it comes to housing.

If there is concern over a recession, people are less likely to buy. So, having the stock market turn course could help rekindle the housing market as well.

News broke on Thursday afternoon that the US may be easing their tariffs on China. The market immediately shot up on this news.

If this indeed happens, the market will likely continue to go up.

Book I am Reading:

For My Pinterest Account, I have a new board that reviews some of the financial books I have read in the past few years – if I am being honest my wife gets the credit for this work, I know very little about Pinterest.

I thought I would outline a few of these books here as well.

The first book I read in personal finance was: The Wealthy Barber, Everyone’s Commonsense Guide to Becoming Financially Independent, by David Chilton.

I read this book in my first semester of business school. The concepts in it are simple but powerful.

The idea I remember taking from this book is that building wealth doesn’t mean you have to make a lot of money, what matters is how you manage the money you do make.

Hence the title, The Wealthy Barber. This is a great read, especially if you are early on in your financial journey.

The second book is: Reminiscences of a Stock Operator, by Edwin Lefevre. 

I read this book years ago and have thought of it often. I will likely re-read this book in the near future.

This book was published almost 100 years ago, but its concepts are still valid.

This text will appeal to both the seasoned investors as well as a beginner who wants to better understand how the stock market works.

It is written in story format, which to me makes it a more captivating read.

Interesting Topic:

The government is still in shutdown mode.

Last week we reviewed the difference between essential and non-essential government employees. Many employees that are in the non-essential category are being called back to work.

They are still furloughed, which means for now they will not be paid for their work.

A few of the agencies that will be brining workers back include: Federal Aviation Administration, IRS, and the Food and Drug Administration.

Even though these agencies are bringing back part of their workforce, they are still not functioning at 100%.

Good news for those who are worried about getting their tax refunds, If the shutdown goes until the 28th, the IRS will still be able to process your returns and refunds.


Thank you for reading, I hope you have a great weekend!