Creating a Vision Plan for 2015


Can you believe today’s episode is the last show of 2014? We’ve had an incredible year at The Money-Guy Show and within our Tightwad Nation community, and it’s important that you know how much of a difference you’ve made both in our lives and for a wonderful cause.

We launched The Big Give at the beginning of this year and have raised thousands of dollars for autism awareness through the sale of our Tightwad Nation gear — and we couldn’t have done it without our wonderful community.

If you haven’t gotten in on this effort yet, there’s still time to do so. When you purchase your Tightwad Nation apparel from the shop, you’re making a statement: you’re a trendy tightwad who supports an amazing cause, because 100% of the proceeds from gear sales go straight to charity.

How to Set Up for Success with a Vision Plan

With this last show of the year, we wanted to do something a little different and get you set up for success in 2015 — although Bo and Brian did quickly run through some year-end tax planning tips for those of you who were looking for that free financial advice The Money-Guy Show loves to provide.

The real focus of this episode was to walk you through how to set up your vision plan for 2015. Brian underlined the fact that personal vision planning can mean going bigger than the typical resolutions that people forget by February.

You can take action and do something huge. You can change your life in the new year with the right drive, determination, and dedication to your goals. There are no limits!

7 Steps to Vision Planning for 2015

With that in mind, Brian explained the 7 steps you need to go through in order to create a personal vision plan for 2015:

  1. Write it down! Record your goals.
  2. Know and understand your why. What’s driving you?
  3. Recognize that passion and purpose can win out over anything life throws at you.
  4. Plan for the worst, so you can get through tough times.
  5. Don’t shy away from the path that’s hard or not fun. Do what needs to be done to reach success, even if it’s not your favorite thing in the world to do.
  6. Develop benchmarks and track your progress.
  7. Be generous and connect with generous people.

Bo also mentioned an important practice that can further set you up for success. He agreed that writing things down does wonders for your goals, and explained how the practice of writing things down and revisiting what you’ve put on to paper (or on the screen in a spreadsheet) can help you achieve success.

Getting up close and personal with the numbers and the details affects how you think about things throughout the year — and can encourage you to make better decisions that get you closer to those big goals.

A Big Question for Money-Guy Show Listeners

Brian closed the show with a special, important question for the Tightwad Nation and all listeners of The Money-Guy Show. Be sure to tune in to catch the question — and email Brian and Bo with your answer and thoughts.

The Real Road to Wealth

Road to Wealth

What are you doing to become wealthy? Are you truly happy in life right now?

If you can answer a resounding yes, you’re the minority. (And also probably a member of the Tightwad Nation, right?)

Most individuals aren’t on the road to wealth because they take the easy way out in the majority of their financial decisions.

That may be harsh, but it’s true.

We don’t have to look any further than the amount of credit card debt in the US to know that. The number is an astounding $881.8 billion. The average credit card debt is $15,608, and the overall debt numbers are increasing.

The secret to success is through delayed gratification and taking the road less traveled, but it’s clear that most people opt for instant gratification. That damages both their present and future financial situation.

There are other differences between the affluent and those that are going to end up in the average, less-than-ideal financial situation.

What Does Wealth Look Like?

Many people are familiar with The Millionaire Next Door, written by Stanley & Danko. They profiled a number of millionaires to learn what qualities they all had in common.

They found the following:

  • The majority of wealthy families included business owners, including self-employed professionals. These people made their wealth, and did not inherit it.
  • 20% of affluent households are retirees; of the remaining 80%, two-thirds are self-employed owners of businesses.
  • In the US, only about 18% of households are headed by a business owner, but the business owner is 4 times more likely to be a millionaire than the families that work for others.

There’s a clear pattern here, isn’t there? Many of the millionaires next door took the road less traveled, and created their own businesses.

They made the decision to take their employment into their own hands, and create something from nothing. That takes a lot of hard work, but the rewards can be well worth the effort to create your own career. 

And get this – wealthy families are five times more likely to send their children to medical school, and are four times more likely to send them to law school over other parents in the US.

These millionaires urge their children to become physicians, engineers, attorneys, architects, accountants, and dentists, because it’s possible to become a self-employed professional in any of these fields.

While the education is rigorous, remember that the difficult paths are the ones you want to go down, as they will yield more success.

That doesn’t mean the only way to wealth is by going out on a career limb and working for yourself. But people who do successfully become self-employed or own some form of business usually have some qualities that not everyone shares:

  • They’re self-motivated to learn; they ask questions, do research, and seek out professional help when their own knowledge falls short.
  • They’re willing to work hard now — and delay the things that want today — in order to build a more secure tomorrow.
  • They don’t settle for Plan A. They have Plans B through Z and are willing to keep trying when things go south, when they fail, or when they struggle. They take ownership and responsibility and believe life is something they make, not just something that happens to them.

So how does all this set the wealthy apart from the average?

What the Average Individual Does Differently

The main difference between the affluent and the average individual comes down to effort and investment. Most people aren’t willing to put in the time or the effort. They stick with the status quo, and wonder if life will improve on its own.

The average individual:

  • puts off investing in their Roth IRA or maximizing their 401k at work, in favor of spending on frivolous items to appear more successful.
  • hates their boss and their job, but does nothing to change their situation out of fear.
  • dismisses the dream of being self-employed (or pursuing a better career, or creating a side hustle) because they’re overwhelmed with how to get started. 

The truth is, most Americans are unhappy at work. They are working for a paycheck, dragging themselves through the workweek, living for the weekends, and returning to the daily grind come Monday. There’s next to no passion for their work. 

If you want to get on the real road to wealth, you need to be happy about the work you do while earning a decent living. There’s no one right way to do this, but you can consider full-time self employement, part-time self employment, or working on career development so you move into a position as an employee that you feel passionately about.

Does Money Buy Happiness? It’s Actually About Fulfillment

It’s a cliche, but money truly doesn’t buy happiness. Or at least, there’s a limit to how much it can buy — and it matters how you spend it.

Money can help buy happiness, but not if you spend it on stuff. If you try to live in, drive, or wear your money, you’ll only look rich instead of truly being wealthy. And you certainly won’t be happy.

Align your spending with your values and focus on investing your money in experiences, relationships, and of course, financial security and stability.

In our experience working with wealthy families, we see a common theme when it comes to financial success and happiness: fulfillment.

It’s very likely that Americans are dissatisfied with their work because they’re not fulfilled. They’re working out of necessity (for pay), not following their dreams.

When you build a business, or work for yourself in some capacity (full-time or part-time) you’re putting your heart and soul into it. It should be fulfilling.

There’s a strong sense of accomplishment associated with taking risks and coming out on the other end with a thriving company growing under you (or a successful side hustle or side business).

Considering most millionaires attribute their wealth to being business owners, it’s a great way to combine happiness, financial independence, and fulfillment.

At The Money-Guy Show, we believe the secret to happiness isn’t solely money, but personal fulfillment. You have to do what makes you happy while earning enough to live today while establishing financial security for the future.

What does the real road to wealth look like to you?

The Financial Decisions to Get Right at Every Stage and Age

Financial Decisions

This week, your Money Guys were joined on the show by special guest Alan Moore to discuss the various financial decisions that everyone needs to make at different stages and ages of their lives.

Alan is the co-founder of the XY Planning Network, the leading organization of fee-only financial advisors that specialize in working with Gen X & Gen Y clients. He’s also the President of Serenity Financial Consulting, a fee-only RIA and location independent financial planning firm. He currently lives in Bozeman, MT so that he can hit the slopes on powder days.

In this episode, Alan, Bo, and Brian each walk through some pitfalls to avoid, blind spots to be aware of, and solutions you can implement with your personal finances.

Money Matters to Think about When You’re in Your Teens and 20s

Alan takes on what younger generations should watch out for and think about. For those in their teens and 20s, he says to take your financial decisions seriously.

This decade isn’t a “throwaway,” and it’s never too early to think about developing financial independence and investing in your future. The decisions you make now do matter. Alan also has a few suggestions for people who are just starting out:

  • There are a lot of big things and changes happening right now — but don’t forget about the little things. Don’t let small mistakes trip you up and hinder your financial progress!
  • Invest in financial assets.. and your own skills, knowledge, and abilities.
  • Don’t be afraid to ask for what you want — but understand you’ll need to do your homework before you do. Don’t plan on getting what you ask for if you don’t put in the work first.

Keeping on the Right Financial Track in Your 30s and 40s

Bo picked up after Alan to help those at a little later stage in life — those who are in their 30s and 40s.

If you’re in this age group, you’re still young! But you’re not “entry-level” anymore, and it’s likely that this stage is bringing new experiences and life changes to you.

Bo brings up some common pitfalls that people in their 30s and 40s need to watch out for, including issues with your investment portfolios, spending temptation and lifestyle inflation, and simply forgetting to re-check your financial to-do list after you go through some big life milestones.

Finishing Strong with Your Financial Decisions After 40

Brian then addresses the over-40 group and the financial decisions they need to think about and the blind spots to be aware of.

The biggest issue? Time flips on you, and it’s no longer an advantage but a liability. That doesn’t mean it’s too late to take action, but it does underline the fact that you do need to jump on your financial goals if you haven’t gotten serious yet.

Remember, “someday” is not a day of the week. Think about these things, and if you need to take action on anything, do it today:

  • Understand your risk capacity. Even if you still feel comfy with risk, you may not realistically be able to handle swinging for the financial fences anymore.
  • Organize and tighten up your finances. Don’t get sloppy, and don’t abandon a plan of action at the finish line!
  • As much as you don’t want to think about it, you need to understand your mortality. Even if you feel young mentally, you can’t pretend you’re not aging at all. (Sorry.)

No matter what your stage or age, there are financial decisions to think about — and to get right. It’s never too early (or too late!) to take smart action and improve your financial situation.

So no matter what group you fall into, keep up the good work in avoiding pitfalls and making the right money moves.

Want help with this? You can always reach out to financial pros to help get you on the right track. You can also email your Money Guys at and — and you can email our special guest, Alan Moore, at


We appreciate all our listeners and members of Tightwad Nation — and you can show your appreciation for The Money-Guy Show by leaving us a review on iTunes. You can either go directly through iTunes or leave a review with this link. These reviews help new folks find the show.

5 Steps to Maximize and Manage Your Retirement Savings

Maximize and Manage Your Retirement Savings

There are a few common mistakes that many people make when managing their retirement plans. They either don’t put enough toward retirement and leave money on the table (by not taking advantage of matching contributions), or their savings get eaten up by expenses and fees.

Adding to the problem can be issues like holding on to the wrong asset allocation or failing to diversify (or diversify enough). Too many savers and investors ignore the fact that their portfolio needs to reflect individual age, retirement, and risk needs.

If you’re younger, you can get away with a more risky, aggressive asset allocation, because you have several years to make up for any losses. Those that are closer to retirement need to scale back on the risk in order to keep what they currently have for retirement.

And if you don’t pay attention to the funds you’re buying, you could experience an overlap in investments. Some funds have the same holdings or objectives, which means your returns are going to be average.

You don’t want to be making any of these mistakes when it comes to planning for retirement. And you can avoid them with our tips on how to maximize and manage your wealth.

5 Steps to Maximize and Manage Your Retirement Savings

Generally, maximizing your retirement savings can be boiled down to simply understanding what your choices are and choosing investments according to your goals and circumstances.

Unfortunately, many people hesitate to dig deep into their options when it comes to retirement plans, and as a result, their earnings suffer.

Let’s help you avoid that and make sure your retirement plan is on the right track with these 5 steps:

Step One: Locate and Organize Your Retirement Plan Investment Options

Investment options within retirement plans can vary. Some plans offer 6 to 10 investment choices, while others offer thousands of investment choices.

Look into the choices that are available to you, and evaluate how well they work with your retirement goals, risk profile, and outside investments.

Don’t be afraid to ask your employer for help, especially if you have a plan with numerous choices to pick from. It can be overwhelming to look at first — but you don’t want to potentially be losing out on thousands of dollars a year, right?

Educate yourself, ask for help, and put the work in. It’ll be worth the effort.

(And if you’re self-employed, don’t be afraid to ask for help from a financial pro that’s willing to work as your fiduciary. This applies even if you’re employed and have someone at work to help you. Don’t hesitate to seek out third-party advice.)

Note – if your retirement plan uses mutual funds, track down the ticker symbols for each investment option. You’ll need it later!

Step Two: Review Retirement Goals

Think about what retirement will look like for you. There is no one right or wrong answer here, but your answer will help you to determine how much money you”ll need. This will largely be based upon your age and when you want to retire.

Your age is an important factor because time will be on your side if you’re younger (and against you if you’re older) due to the power of compound interest.

That doesn’t mean you need to immediately panic if you’re starting a little later. Know that getting your plan settled now will help you make up for any losses/lack of savings in your past.

Besides that, think about what you want from retirement. Do you want to travel around a lot, play golf year-round, or have the freedom to dine out every night? You’ll want to account for these expenses so you have an accurate idea of how much money you’ll need in retirement.

Try drawing up a mock budget for your ideal retirement. This exercise can help you get a better idea of what you’ll spend if you do everything you want to once retired. You can then get another estimate of how much you’ll need because you’ll have a detailed guess at what you plan to spend.

Step Three: Asset Allocation and Risk Profile

Your risk profile is one of the primary foundations for determining how to allocate and manage your retirement plan option. You may want to to speak with a trusted financial professional to help you evaluate your risk level and determine the portfolio strategy that is appropriate for your investments.

This strategy can then be used to create an investment allocation that matches your profile and retirement goals.

As a very general rule of thumb, if you’re younger you can afford to invest with more risk in mind. You have years to make up for any losses. If you’re older, you’ll want to scale back on the risk and invest more conservatively. You don’t want to face losses so close to retirement.

Step Four: Objectively Analyze Investment Options and Fees

Yahoo, in partnership with Morningstar data, has an outstanding fund analyzer that allows you to research the fees and expenses of your investments. The great part about the site is that, in addition to information pertaining to your funds, it also contains the category average for your investment. This lets you evaluate the strengths and trouble spots for your investment options.

To navigate the site, simply enter the ticker symbol in the box on the right side of the screen that says, “get profile for.” Once you’re on the fund profile page, you can also use the site to research past performance, holdings, risk, and purchase information.

Let’s discuss what you should focus on to research and analyze your investments:

Profile: This determines where the fund falls in the “Morningstar Style Box,” and will help you to determine how the fund fits into your asset allocation. You can also review the fees and expenses of the fund. (Aim for lower!).

You also want to avoid paying commissions. Look out for 12b-1 fees, front end sales load, deferred sales load.

You should make a point to review the “annual holdings turnover.” Remember, buy and hold is the name of the investing game. A low turnover ratio is goo  and can be an indicator of lower expenses. The exception to that rule is small and international investments, as they typically have high turnover.

Risk: The following statistics are of importance here:

  • Alpha is the measure of risk adjusted performance – positive is good.
  • Beta is the risk in relation to the market; usually in relation to the S&P 500.
  • R-squared is the percentage of an investment’s movements that are explained by movements in the index.

Performance: A great way to determine if you can handle the risk of a fund is to review the Best/Worst 1-year and 3-year returns. This is what we describe as true gut check.

You can also review the “annual total return (%) history” to see how the fund has performed in the past, compared to the category average.

Step Five: Check Beneficiaries

It is very important that you review the beneficiaries that you designated on your retirement plan, as it will protect your loved ones should something happen to you. There are huge tax advantages to having your assets pass through beneficiary designation as opposed to your Will.

(Speak with a trusted CPA for more information on tax advantages and why they matter.)

You should name contingent beneficiaries as well. To ensure that all branches of your family receive their share of assets, you can add “per stirpes” to your beneficiary designations. This means that, in the event one of your children passes away before you, your grandchildren will inherit what you originally intended for your child.

If anything has changed in your life since you first became employed at your company, you should definitely double-check your beneficiaries.

Stuck In a Bad Plan?

Did you go through these 5 steps and realize your retirement plan wasn’t making the best use of your contributions to maximize your wealth? You should bring your discovery to your employers attention.

The Employee Retirement Income Security Act (ERISA) was put in place to protect employees. From the site:

The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses.

If your employer is not taking their fiduciary responsibility seriously, ERISA will hold them accountable.

Make it a point to go through these 5 steps some time this month. You might be surprised at what you find – maybe fees and expenses are seriously eroding your ability to get ahead, or maybe the investments you chose are performing poorly.

In any case, it’s important to stay on top of your retirement fund so you can get the most out of it.

Are you making the most of your retirement savings? Do you feel your current retirement plan is being managed properly?