Mark Zaifman's thoughts on Money, Global Economic Trends and Politics

Finding Your Financial Balance in 2016

Posted by Mark Zaifman on Wed, Nov 25, 2015 @ 12:50 PM


The stock market is volatile. Your bills are skyrocketing. Getting a grip on your finances, however, goes beyond your checkbook. Take a good hard look at your relationship with money, and you’ll finally figure out how the two of you can start getting along.

Money is many things to many people. For some, it beckons and entices; others find it scary and confusing. Whatever the relationship, that rapport directly affects our ability to attract, spend and hang on to what we have.

Whether there’s $10,000 in our account or $10 million, we follow the same behavioral patterns. Changing our approach to money comes when we’re able to take a good honest look at the inner workings of our relationship with money.

So how have you been treating your money lately - and how has it been treating you? Maybe you feel inferior to it or you don’t take it seriously. Maybe it bullies you around or seems to skip town when you need it most.

Money as the Judge

For some, money speaks in harsh, critical tones. It’s disappointed in the way you’ve handled it and it tells you so. Maybe you feel that your money has no faith in you. When you see it that way, you won’t feel positive, and that will have a negative impact on how you deal with it.

Perhaps you feel bad that you didn’t read the full 27-page prospectus on your mutual fund or that you haven’t saved enough for retirement. The effect? You feel inadequate and incapable which is not a good foundation for a healthy money relationship.

To begin to turn things around, find out where that voice is coming from. Your parents? Financially savvy friends who think they know more than you? Get to the source of it and question it. But even more important, take note of what sound decisions you have made, (and there must be some) put the criticism in perspective, and work on honing your gifts rather than calling out your weakness.

Make Friends with Your Finances

Building a healthier relationship with your money starts with how you treat it. Every relationship has its own specific needs. Your mission is to discover what your money needs from you before you can get what you need from it.

Consider the attitudes about money you learned at an early age. Was it the root of evil? The Holy Grail? Did you learn to seek it at all costs, or never give it a second thought? What did your first dealings with money; allowance, babysitting cash, $10 tucked inside a birthday card, teach you?

Now, think of one of your closest relationships and quickly jot down five statements that describe the way you treat that person - for example, “I worry about her”, “I make him laugh” or “I’m there when she needs me”. Now write down five statements that describe the way you treat your money. Do you worry about it? Guard it possessively? Enjoy it? This exercise can give you some insight into how to make money your ally instead of your enemy.

Start Fresh in 2016

Love it or hate it, money and how we deal with it impacts our lives in so many ways. With the New Year approaching, there is no better time to invest in this crucial relationship than right now.

Finding your money balance takes time, patience and practice. Yet this investment of time and energy can reap dividends for a lifetime.

We learn early on to focus most of our attention regarding money on the external. How much we earn, where we live, the type of car we drive, where we shop, the clothes we wear, etc. All this focus on the external, (the ego), works to undermine our relationship with money and creates a toxic link of equating our self-worth with our net-worth. And when/if our net-worth drops, so goes our self-worth.

Why not make a commitment to yourself that 2016 will be the year you put the time and attention to your money relationship that it needs? Why not have 2016 be the year you liberate yourself from fear, worry and stress around money? Why not have 2016 be the year you set yourself free?

Bottom line - If a healthy and abundant relationship with money is your desire, then you’ll need to summon the courage to choose a different consciousness. This will not be easy and you will have many setbacks along the way. Yet once you’ve transformed your relationship with money and put yourself on the road to financial independence, the feelings of personal accomplishment and self-empowerment will blow you away.

Photo credit James Jordan

Tags: relationship with money

Is Your Retirement is 10-Years Away or Sooner?

Posted by Mark Zaifman on Fri, Oct 23, 2015 @ 01:51 PM


If your retirement is 10-years away or sooner, you'll want to read, Get What’s Yours - The Secret To Maxing Out Your Social Security by Laurence Kotlikoff, Philip Moeller and Paul Solomon

One of the most overlooked elements of preparing for a successful retirement is deciding when to start drawing your Social Security. If you’re a married couple, the decision becomes even more complex.

Up until recently, the majority of people, usually by default, either started collecting Social Security at their full retirement age, early, at age 62, or waiting if possible until age 70. Simple on the surface right, three relatively easy choices.

Guess what. There are dozens of Social Security strategies that most people are unaware of. And remember, in the game of money, strategy is king.

Below are a few excerpts from the book Get What’s Yours - The Secret To Maxing Out Your Social Security that I hope entice you enough to read it.

“We’ve written this book to help people maximize the Social Security benefits they have earned and therefore, we believe, deserve to get. We three authors-Boston University economist Laurence Kotlikoff, journalist and aging expert Phil Moeller, and PBS News NewsHour economics correspondent Paul Solman-have spent years studying the system and making it intelligible to the public.”

“Why have we bothered to write this book? Because Social Security is, far and away, Americans’ most important retirement asset. And that’s not only true for people of modest means. Middle-income and upper-income households actually have the most to gain, in total amounts, from getting Social Security right. Toting up lifetime benefits, even low-earning couples may be Social Security millionaires.”

“So, this book is for nearly every one of you who’s ever earned a paycheck and wants every Social Security benefit dollar to which you are entitled-entitled because you paid for it. You earned it. It’s yours.”

“Social Security is the most complicated “simple” program you’re likely to encounter. This book contains minimal math. Rather it explains in the simplest possible terms the traps to avoid and basic strategies to employ in maximizing a household’s Social Security retirement.”

“We will point out Social Security’s windfalls and pitfalls-explain obscure benefits and more obscure penalties; benefit collection strategies like file and suspend (applying for benefits but not taking them)and start, stop, start (starting benefits, stopping them, and restarting them) We’ll also get into details of Social Security’s deeming rules (being forced, in some cases, to take certain benefits early at a very big cost)and related gotchas that can handicap you financially for the rest of your life.”

“We have embraced a model of human behavior based upon a competition among various internal “selves”. So our advice is to enfranchise one of them-the adult within; the long-term planner; the life preserver self. Keep reminding yourself: You are the guardian of your future self.

How was that for a good trailer? Hopefully, you’re enticed enough to put this on the must-read list.

For anyone you care about, please, turn them onto this book, it’s really that good, that important, that valuable, and believe me, they will be extremely grateful you did. As always, my suggestion is to pick this up from your local library. I’m sure there’s a waiting list, but unless you need it urgently, what’s the rush? And local libraries need all the support they can get.

To all my clients, you’re way off the hook as I got you covered. For a numbers/strategy geek like yours truly, this book is my candy store.

To all those with financial advisors already, this book is a must read if your advisor holds themselves out as a comprehensive financial planner or has chosen to work in a fiduciary capacity.

I receive great tips about books, articles related to financial planning or investing, latest tax strategies, you name it; from my clients on a regular basis and I’m very appreciative for that. It’s that collaboration aspect of my work that I love the most. So if you’re not in the habit of emailing your advisor suggestions or inquiring if they have read this book for example, give it a try. Helping them will help you.

Bottom line: Put simply, these three wise authors have ‘cracked the code’ on how to unlock the mystery of claiming Social Security benefits. Read it or listen to the audio book version or make sure your advisor has read it. As the saying goes - just do it!




Tags: book recommendation, investing, retirement planning

Sticking with Your Financial Plan When the Going Gets Tough

Posted by Mark Zaifman on Wed, Sep 30, 2015 @ 02:38 PM


Next week, your monthly investment statements will arrive via mail or email. And unless your portfolio has been invested 100% in Treasury Bonds, you’re going to see unrealized losses on your statement, as it’s been a terrible month/quarter in the stock market.

First thing to remember, those losses are paper losses, also called unrealized losses. When do they go from being unrealized losses to actual losses? Answer: When you actually sell the fund or stock that’s underwater.

With the resurgent popularity of tax loss harvesting, where your aim is to strategically sell securities at a loss to offset the capital gains in your portfolio, you welcome the opportunity to lower your tax bill at the end of the year by booking losses. With the recent correction in the markets still going on, there should be opportunities galore to harvest losses to offset gains.

Yet, while the benefit of reducing your overall tax bill by tax loss harvesting is a net positive, the challenge for many investors still remains sticking to their overall financial plan. Easy for most to do when the stock market is performing well, not so easy during very volatile times like we’re experiencing currently.

Stick with your plan….even when the market gets scary

Making changes to your investment strategy while global markets are going through a much needed correction is highly risky, potentially harmful to your financial future and could very easily backfire. Yet over and over and over again, statistics show that the biggest mistake investors make year in and year out is attempting to time the market, in other words, the proverbial mistake of selling low and buying high.

During emotionally charged times like we’re currently experiencing, it seems there’s always a person you know or work with that hears about someone they know, or someone that knows someone that has the true scoop about the markets and that someone has moved all their investments into cash or gold.

That’s right, this someone special with exclusive insider knowledge has sold everything and moved all their money into cash or gold because why? Well who knows why really? And has that someone really moved all their money into cash or gold? And if they did, what’s the point and more importantly, what’s the strategy post cash/gold?

So what to do during market volatility? Perhaps nothing.

If you're watching the recent market correction and wondering what to do, consider learning how to cope with volatility instead of changing your financial plan.

Often, the wisest thing to do during periods of extreme market volatility is to stick with the investment plan that you've already developed. Equity markets have reaped sizable gains over the past six years. Such setbacks, while unnerving, are inevitable.

A 'do nothing' prescription might be tough to swallow if you've been caught off-guard by recent volatility. But no action is an active decision, and can be the right decision for reaching long-term financial goals.

Here are a few simple tips to help you through the current market volatility.

#1: Recognize that volatility and periodic corrections are common in equity markets.

The key to getting through unexpected turbulence is to understand that swings in the financial market are normal—and relatively insignificant over the long haul. The best approach to protect portfolios is to diversify among a broad mix of global stocks and high-quality bonds so that you are better poised to buffer the declines in the equity market.

#2: Tune out the noise, and remove emotion from investing.

Seeing the same story at the top of every news site you visit, as well as seeing related portfolio fluctuations, is likely to worry you more than it should.

If you're a long-term investor, resist the urge to make drastic changes to your investment plans in reaction to market moves. You may find what's driving the overreaction in markets is nothing more than speculation.

Making shifts to your portfolio in hopes of avoiding a loss or finding a gain rarely works long-term. Investors who panicked and dumped stock holdings in 2008 and 2009, believing they could get back in when 'the coast was clear', likely suffered equity losses without the benefit of fully participating in the recovery. Vanguard research finds that a buy-and-hold approach outperformed a performance-chasing strategy by 2.8% per year on average during the 10-year period analyzed.

Also, try not to look at your accounts every day. It's unnecessary and may do more harm than good. Remember that portfolio changes, aside from routine rebalancing, can result in significant capital gains. And don't forget you need to know when to jump out of the market and then get back in—decisions few investors can and should tackle.

Rule #3: Make volatility work for you.

Save more, and continue to invest regularly. Boosting savings is important to your long-term financial goals. If you invest regularly through payroll deduction, an automatic investment plan, or a target-date fund, you're putting the market's natural volatility to work for you. Continue making contributions to take advantage of dollar-cost averaging. Buying a fixed dollar amount on a regular schedule offers opportunities to buy low during market dips. Over time, regular contributions can help reduce the average price you pay for your fund shares.

The Inaction Plan

If your portfolio is broadly diversified and has the appropriate balance for your financial goals, time horizon, and risk comfort level, sticking with it is a wise move.

Because no one knows what the future holds, a globally diversified strategy can be more advantageous than shifting too much in any direction. You can resist the temptation and save yourself the stress by tuning out the noise. It's okay to ignore volatility—that's part of the plan.

Bottom line: Emotions and investing can be a losing combination. Don’t abandon your investment strategy because the market is uncertain. Instead, practice being fearless.


Photo credit FrankieLeon

Tags: investing, stock market

Keeping Stock Market Volatility in Perspective

Posted by Mark Zaifman on Thu, Sep 03, 2015 @ 10:02 AM


It’s often impossible to explain stock market volatility until long after the dust has settled. And these past couple weeks of volatility are no different.

That’s why it’s a good idea to take day-to-day market events in stride and stay focused on your long-term objectives.

If you read the business section of a newspaper or watch CNBC or other financial shows, you’ll hear the talking heads discuss bull and bear markets, market corrections, and the like. As an investor, you should be aware of what these terms mean, but you should also know that it usually never makes sense to think about changing your investment approach based on today’s headlines.

The Markets are Unpredictable

From December 31, 1986, through December 31, 2013, the monthly performance of the Standard & Poor’s 500 Index ranged from a high of 13.47% (in January 1987) to a low of –21.54% (in October 1987).

However, despite the stock market’s ups and downs over that 25-year period (including bull and bear markets), the S&P 500 Index averaged a 10.30% annual return, a solid performance for investors focused on the long term.

4 Tips for Dealing with Stock Market Volatility

One of the most common mistakes investors make during bull markets is to move money into their “winning” investments in hopes of hitting it big.

Conversely, during bear markets, investors sometimes lose patience and sell the investments that are declining in value. Unfortunately, investors seldom get this timing right and react too late to be able to capitalize on gains or avoid major losses.

1) Maintain Your Balance Hold on to the mix of stocks, bonds, and cash investments that are tailored to your objectives, time horizon, risk tolerance, and personal financial situation.

2) Continue Investing Regularly Keep making regular contributions to your employer-sponsored retirement plan, IRA, and other investments so as to take advantage of dollar-cost averaging.

3) Make Change Gradually If you need to make adjustments to your portfolio, make the changes gradually and with clear purpose and intention. Do your best to not let your emotions override your long-term investment strategy.

4) Tune Out the Noise These days, investors are bombarded by an amazing amount of financial news and information. Try to ignore all the noise and keep your focus on your long-term goals.

The month of September, traditionally speaking, is usually a pretty volatile month in the markets. On top of that, the Federal Reserve will decide this month if it’s the right time to begin raising interest rates. So buckle-up, as this month could very well be a repeat of August, but with even higher volatility.

Then again, it could turn out to be a smooth ride through the month. It’s the uncertainty, the unpredictability of gauging where the markets are headed that will definitely make for an interesting September. Stay tuned…..

Photo credit Dave Herholz

Tags: risk management, investing, stock market

Bond Funds and the Prospect of Rising Interest Rates

Posted by Mark Zaifman on Wed, Jul 29, 2015 @ 01:21 PM


Since the stock market crash of 2008-2009, interest rates, especially the 10-year Treasury, have stayed historically low. Last quarter, the 10-year Treasury saw its largest rise since the end of 2013, halting a streak of five consecutive quarters of falling yields.

Most bond funds of all stripes, sizes and flavors have performed well since the crash. It’s been such a smooth ride, interest rates have stayed low for so long that it’s easy to forget bond prices don’t just go in one direction - up.

They can also go down in price as we’re seeing now. When interest rates rise, the prices of bonds fall, whereas when interest rates fall, the price of bonds rise. Wait, what?

If you’re confused, as most people are, about the inverse relationship between bond prices and interest rates, let me help.

For the sake of not getting too wonky and hopefully avoiding the risk of your eyes glazing over, below are some links to a few pages on Investopedia that help explain, mostly in plain English, how this crazy inverse relationship with bonds work and how that impacts your bond funds. Gain just enough knowledge to be dangerous.

Bond Basics: Yield, Price And Other Confusion

Why do interest rates tend to have an inverse relationship with bond prices?

How Does Duration Impact Bond Funds?

Bond Funds Hedge Your Stock Market Risk

Many investors, whether individual or institutional, hold a diversified bond portfolio primarily to mitigate the volatility inherent in stocks or other risky assets, while others, especially those in retirement, hold bonds for the income they produce as part of a portfolio spending strategy as well. However, with yields presently at or near historic lows, more investors view the bond market as abnormally risky.

The majority of thought currently is that when interest rates rise, the fixed income portion of an investor’s aggregate portfolio may face volatility and loss. Coincidentally, the phrase ‘bond bubble’ is gaining currency among the talking heads of Wall Street. So with all that said, please allow me to put this potential bond risk in context.

As interest rates begin to rise, some say that will happen in September, I’m thinking more like December, many investors will see the price of their bond funds go lower. Ouch! After the pain wears off, your next thought may very likely be - I need to do something. What should I do? Sell my bond funds, move into cash? Help.

Per Vanguards plain talk bulletin - Interest Rates, Bonds & Misconceptions:

- Rising rates reduce the returns of most bond funds in the short term, but can boost returns in the long term.

 - If you’re investing only for income (and can ignore fluctuations in your fund’s share price), rising rates won’t make much difference to you in the short term.

 - What’s essential is that you understand why you own the bond fund.

Interest Rate Rise is Good News for Long Term Investors

Rising interest rates are good news for long-term investors and here’s why. Yes, your bond fund prices will decline initially, but between five and seven years later, the portfolios returns are higher than they would have been if rates had not risen. How does that work?

Here’s the secret sauce about rising rates when you have bond funds in your portfolio. Remember, your bond funds generate monthly interest income. That interest income is reinvested monthly at higher yields and over time, those higher interest rates produce higher yields for your bond funds.

Summing Up: The Right Response

If you’re holding bond funds as part of a long-term asset allocation, rate changes are rarely a good reason to change your investment plan. In fact, as long as you reinvest your interest income-or invest new cash-higher rates can enhance your long-term total returns. And if you’re investing for income, rate changes won’t make much difference in the dollar amount of a fund’s income distributions, at least in the near term.

What about getting out of bonds before rates rise, then getting back in after rates have settled?

That approach sounds good in theory, but in reality, rate changes are impossible to predict with accuracy.

The best reason to take action is if you discover that your bond fund no longer fits your needs. Maybe your circumstances have changed. Or you may decide that you picked the wrong fund. Maybe you invested in a long-term bond fund, tempted by its relatively high yield, and now find you took on more risk than you bargained for. If you can’t tolerate any fluctuation in the amount of your principal, your best options are money market funds.

Whether interest rates are rising, flat, or falling, the same principle should govern all investment decisions. Know how each investment fits into your overall financial planning strategy and why you own it. If you can answer those questions, rate changes are just part of the markets’ daily spectacle.

So tune out the noise as much as possible and enjoy the rest of your summer.


Photo credit Banspy

Tags: bond funds, investing

Your Investment Strategy-Never Confuse Risk Tolerance with Risk Capacity

Posted by Mark Zaifman on Fri, Jul 03, 2015 @ 11:12 AM



If you have a financial advisor who manages your investments, at some point you most likely completed a multiple choice risk tolerance questionnaire and answered some version of the following hypothetical question:


If the stock market dropped 20% in one week, would you:

a) Sell 100% of your stock positions

b) Sell a portion of your stock positions

c) Use the downturn as an opportunity to buy at a lower price point

d) Not make any changes to your portfolio

So as you sit in the comfort of your home or office and contemplate the answers to the above types of what-if questions, thinking and feeling like you’re able to tolerate higher levels of risk is very common and easy to do.

After all, it’s one thing to imagine having the risk tolerance to see your portfolio drop 20% in one week and not panic. But in real life, when it really does happen, that’s when an investor discovers their true tolerance for risk.

If you slept well the night of the hypothetical 20% drop in the stock market, chances are you have a very high tolerance for risk and would most likely be considered an aggressive investor. Aggressive investors want to take risk, lots of it, and usually like to have portfolios constructed that have at least 80% of their investments on the equity side of the ledger if not 100%.

Risk Capacity

The other component of assessing risk is your capacity for risk taking. Never should an investor or potential investor confuse risk tolerance with risk capacity. To do so could and often will lead to awful consequences.

Say your risk tolerance answers assessed you as aggressive. At our firm, an aggressive risk tolerance score would mean a portfolio constructed with a 95% allocation to stocks and a 5% allocation to bonds. Stock market volatility is this type of investor’s best friend. This is a high risk, high reward investment strategy.

With a 95% allocation to the stock market, the potential hit to your portfolio if/when the markets have a wicked downturn would be significant.

Now imagine you retired in your early 50’s. You’ve been a risk taker your whole life, in fact that’s how you were able to achieve much of your financial success. You live large because that’s the way you roll. Your portfolio is your only source of income. So far, your high risk taking has been a winning strategy and you see no reason to change course.

Over the past few years, your annual spending has increased rapidly but you’re not concerned about it because your high risk investing strategy has paid-off in a big way. The bull market we’ve had has made you feel invincible. You invested in a start-up, purchased a second home, bought a new Tesla and racked up lots of new debt because the banks were making it so easy to borrow.

Then, a crisis somewhere on the globe occurs and the stock market drops 20% - not in a week, but in two days. You shrug it off, only to watch the market drop another 20% the following day. Suddenly, it dawns on you that although you have a high tolerance for risk, the capacity you have to take risk was not as high as you had imagined or hoped.

As you slowly start to assess the damage, you realize that the lifestyle that you’ve grown accustomed to is about to get altered in a big way. In order to meet your monthly overhead costs, you need to withdraw the same amount of money from your portfolio as you’ve been doing - only now, you’re doing it with a portfolio that’s lower in value by 40%.

To add insult to injury, after blowing through the 5% of bonds in your portfolio, and because you did not set aside any emergency reserve cash funds in the event of a stock market crash like this, you’re now forced into selling your stock positions at a huge loss. What were unrealized losses in your portfolio suddenly become realized losses.

In the course of one week, your life as you knew it, your lifestyle has changed dramatically. Loans and lines of credit you established over the past few years that seemed like no big deal now feel like an albatross around your neck. How did your life turn so quickly from living the dream to living the nightmare?

Eyes Wide Open

Although the above is a fictional story, there are plenty of people taking much more risk than they have the capacity to handle. Taking risk, even being an aggressive investor - it’s all good, but please, do not purely use a risk tolerance questionnaire to make that crucial decision. It’s just too important to rely strictly on that one data point.

A financial advisor looking out for YOUR best interests and not their own, will always go deeper and play the role of devil’s advocate by modeling worse case scenarios before recommending an investment strategy. Only then can you understand your true capacity for risk.

Many investors are do it yourselfers and going it alone has its advantages for sure, yet from what I’ve observed, most of these investors tend to focus too much on best case scenarios and too little on worse case.

So the moral of this story is - never confuse risk tolerance with risk capacity and never underestimate the value of a professional, independent and objective, second opinion. That opinion could and often is worth its weight in gold.


Photo credit Jake Rust

Tags: investing, stock market

Women & Money & the Fear of Being a ‘Bag Lady’

Posted by Mark Zaifman on Thu, Jun 04, 2015 @ 05:36 PM



“Despite the good withdrawal rate, I still fear some catastrophic situation and imagine sitting on the curb as a bag lady!  That, of course, requires a therapist--not a financial planner, eh?”



The above quote comes directly from a client, let’s call her Mary (not her real name) responding to an article I emailed her about the 4% withdrawal rule in retirement.

Mary’s retiring from the UC system at the end of the year. She’s very savvy with money, has a net-worth of close to $3 million and earned a Masters and Ph.D from UC Berkeley. Together, we developed a comprehensive financial plan focusing on a tax efficient retirement income strategy.

After much careful analysis, stress tests, modeling worst case scenarios, using Monte Carlo simulation - even after all those tools illustrated clearly that Mary had a secure retirement ahead of her, something still nagged at her.

I couldn’t quite put my finger on what it was. It seemed to me at the time, that like many clients that develop financial plans when they’re nearing retirement, it takes a while for the actual numbers to sink in and become your reality.

Mary’s annual portfolio withdrawal rate when she retires is projected to hover between 2-3% for the rest of her life. Much of this has to do with a pension she’ll be receiving from CalPERS as well as living well below her means. And because she likes to play it very safe, we assumed an annual investment return rate of 4.5%.

The Fear of Becoming a ‘Bag Lady’

If Mary’s email was a one-off, I probably wouldn’t have thought too much more about it. But this fear of becoming a bag lady that many women have is real and more common than most people would imagine possible.

I’ve heard this fear expressed by women so often that perhaps Mary’s response was a tipping point. I don’t think most men understand how prevalent a fear this is for women. On the surface, it seems irrational, right? How could someone with such a high net-worth that leads a frugal lifestyle be worried about being a bag lady?

In Mary’s case, she knows intellectually that her financial future is as secure as could be, it’s the emotion of fear about her future security that’s causing her problems.

Fear around money is a very primal emotion. When we feel our security, our future, is in jeopardy, all the financial analysis in the world is not going to alleviate the fear. We move into fight or flight mode. So e-mailing the article to Mary and hoping she would understand AND feel safe and secure about her future retirement was not going to do the trick.

The nexus of money and our emotional intelligence, (EQ) being mindful that are thoughts create our feelings is where I needed to go in order to help Mary deal with her anxiety. So that’s where we focused our energy and time after I received her email.

Be Mindful of Your Thoughts

Feeling safe is one of our primary human needs according to Maslow’s hierarchy of needs. And when we don’t feel safe, we worry and worry, which increases our stress level which negatively impacts our health.

Full disclosure - I’m a recovering worrier around money. Worrying about money was a skill I mastered at a very young age. If there were an Olympics for worrying about money, I would have taken the gold.

Fortunately for me, my turn around occurred after I read the seminal book on your relationship with money-Your Money or Your Life-Transforming Your Relationship With Money and Achieving Financial Independence.

I mention this because it’s so easy to relate to Mary and many other women clients that deal with this chronic fear of winding up homeless one day. On the surface, all looks good financially, but underneath the surface is a different story. And because women are not shy about sharing their feelings around money, I’ve heard their stories and felt their fear, pain and anxiety up close and personal.

Becoming mindful of your thoughts is one way to deal with your fear. Although easier said than done, if you’re someone that worries about money and it’s affecting your ability to feel happy, then being the observer of your thoughts is a good first step.

I used to keep a journal of all the crazy and irrational fears my overly active mind would conjure up. Getting them out of my head and into a journal allowed me to see more clearly that it was me and me alone causing my fear. Soon, being the observer of my thoughts became an ingrained habit that continues to this day.

Fear, worry, anxiety - these are not bugs or viruses we catch. These are our thoughts and we’re responsible for our thoughts. Our thoughts determine our feelings. So back to Mary, when she gets emotionally hijacked with thoughts of being a bag lady, rational thought get tossed aside and all she can think and imagine is the worst happening to her.

This pattern of going into a dark, spooky place when thinking about your money and your future becomes a dominant thought and easily overrides your ability to think clearly and rationally. It follows you around like a dark cloud and zaps your happiness whenever you begin to feel all will be well.

Fear around your money and your future will only grow stronger if you allow it to grow stronger. The enemy of fear is faith. Having faith in your future, shining a light on the darkness that fear thrives in is the path forward. You have the power to change the way you look at things and the things you look at will change.

Seeking professional help may also be in order. Our recommended financial coach is Pat Chambers, Ph.D. She provides group coaching for women using ‘Money Salons’ and she’s also available for individual sessions as well as working together virtually.

Liberating yourself from the fear around money is one of the greatest gifts you can offer your divine self. We all deserve to lead a fearless life.

What’s stopping you from being fearless?



photo credit Sean MacEntee

Tags: retirement planning, women and money

Beware of 'IRA Rollover Specialists' Masquerading as Financial Advisors

Posted by Mark Zaifman on Fri, May 15, 2015 @ 06:33 PM


False Promises, Dashed Dreams

A couple weeks ago, a client in Oakland emailed me an article from Money Magazine titled: 4 Disastrous Retirement Mistakes and How to Avoid Them.

The premise of this must read article for anyone getting close to retirement and wanting to rollover their IRA is to see past the hype being touting by many a financial salesperson masquerading as an advisor, but really only concerned with their commission payout and not your financial wellness and security.

My client who sent the article expressed her outrage and disbelief that this practice is so widespread. She asked if I would highlight this topic in my next blog post. Oh yes I will, gladly, was my response.

So with that said, below you’ll find some excerpts/highlights from this well written and informative article. Please pass it on to anyone you know that may be vulnerable to these slick sales pitches.


“Lured by a promise of higher earnings or guaranteed returns, you could roll your money into an investment that’s far more expensive than what you already own. Financial advisers gunning for IRA rollover dollars like to pitch variable annuities insurance products that allow you to invest in stock and bond funds, tax-deferred, and later convert your balance into regular income.

The drawback is the high fees you’ll pay every year for a VA—typically 2.4% of your assets for investment management and extras like income guarantees, according to Morning­star. But the more serious trouble comes when an adviser won’t stop at one, exposing you to large penalties”


“Another pitch is the tantalizing prospect of early retirement. The danger is that it’s based on sloppy or misleading math, says ­Gerri Walsh, head of investor education at FINRA.

Verizon retiree Cindy Rog­ers says her adviser told her that her annuity would produce ample income to cover her expenses, while the principal would last her lifetime, according to her FINRA complaint. But Rogers’ $3,700 monthly payouts mean she’s withdrawing 8% a year—twice what’s typically suggested for a retiree who’s 65, let alone 49. Including fees, she’s depleting her savings at a rate of 11% a year. Plus, Rogers owes an estimated $9,000 in tax penalties.”


“Chasing high returns can get you in trouble. Rolling money into what’s known as a self-directed IRA so that you can shoot for the stars is especially perilous. The SEC estimates that in 2011 investors had $94 billion in this type of IRA, which lets you invest in pretty much anything, from real estate to tax liens.

Last year the state securities regulators association warned that because self-directed IRAs can hold exotic assets, which IRA administrators don’t generally vet, the accounts leave you vulnerable to risky pitches.

In a video of a 2013 sales presentation, Curtis De­Young, founder of American Pension Services, a Utah-based retirement plan administrator, promised retirees the freedom to “take control of your own destiny” with a self-directed IRA. At the end of 2013 his nearly 5,500 clients had IRA accounts worth $352 million. But a lawsuit filed in April by the SEC claims that ­De­Young steered $22 million in clients’ money into now worthless real estate investments and loans to friends. A lawyer for De­Young told MONEY that the retirees chose the investments; the firm was merely an administrator.”


Increase Your Financial Literacy

One of the best ways to guard against getting ripped off is to increase your financial literacy. Knowledge is power and the more knowledge you have around your money, the more self-confident you’ll feel about the many financial decisions you’ll need to make as you approach retirement.

Don’t let the title turn you off because Personal Finance for Dummies, written by Eric Tyson of Nolo Press fame, is one of the best money books out there. It will teach you just enough to be dangerous.

Also, if you decide to seek guidance from a financial advisor, my recommendation is to work with a fee-only advisor that works in a fiduciary capacity. The simple truth is that advisors working in a fiduciary capacity are legally obligated to provide advice that is in your best interest, not the other way around.

Retirement planning in the 21st century demands a more efficient and effective approach that is transparent, accountable and open to new ideas and strategies. At age 75 and 10 years into retirement for example, there are no do-overs in regards to the financial decisions you made ten years ago.

That’s why financially speaking, getting it right the first time and finding an advisor that you can trust is how in retirement -  peace of mind is yours for the asking.


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Photo credit by James O'Gorman

Tags: book recommendation, fee-only financial planning, fiduciary, registered investment advisor

Is Your Financial Road Map Outdated?

Posted by Mark Zaifman on Thu, Apr 30, 2015 @ 05:25 PM


When was the last time you reevaluated your personal financial goals? Did you set initial goals when you were in your 20’s and haven’t looked back since?

So many new clients I meet are operating from outdated financial road maps. Even though their lives may have changed drastically over the years, their financial goals have remained static, stuck in time and in major need of an overhaul.

Just like maps become outdated, so do financial goals. Many times, what our financial goals look like when we’re young bears no resemblance to what we desire as we live life, get knocked around a bit and gain further awareness of our wants and needs.

Whose road map is it anyway?

Often times, we set financial goals without much insight into what’s driving the goals we’re establishing for ourselves. Often times, it’s the ‘back story’ that usually informs these decisions.

For example, say you grew up in a family where making money, a lot of money, was prized and reinforced into your psyche. Quantity vs. quality of life approach to your money or your life.

Perhaps your Dad or Mom or both were very ambitious and self-motivated. Growing up, you watched them achieve financial success. Let’s say they were very driven in their careers and sacrificed much to reach a certain level of financial status and power.

You graduate from college, spend the first 10 years or so figuring out what you want to do with your life and by your early 30’s, you’ve landed. Your career looks very promising and you’re happy. Now it comes time to start saving money and setting financial goals.

It’s at this point in your life where your relationship with money or lack thereof truly matters. Maybe you will follow the path your parent’s role modeled for you, maybe not. Regardless of the path you choose and the financial goals you establish, what’s most important is that your goals represent you and your vision.

Being conscious of your choices around earning, spending, saving and investing requires you to be mindful of your past money history and the assumptions and financial baggage you may still be carrying around unconsciously that heavily influence and impact your life today.

Many new clients I meet have been operating on auto-pilot in terms of their financial goals for most of their lives. The default position for many of us is to follow exactly what and how our parents dealt with their finances. For some this works fine. For most though, not so much.

Striving But Never Arriving

Another crucial aspect of reevaluating and or updating your financial road map is to make sure your goals are realistic given where you are right now, financially speaking. Very often, new clients I meet have set very unrealistic goals for themselves. Often times this leads to taking unnecessary and sometimes reckless investment choices.

Are your financial goals attainable? Do you have a viable chance of reaching the goals you set? Or do you constantly beat yourself up for not reaching your goals, only to take ever more risk with your money and striving yet never quite arriving.

Or are you someone that keeps moving the ‘goal posts’ on the road to financial independence farther and farther out of reach, with the result that you sabotage your chances of achieving financial success and most importantly, peace of mind around your personal finances.

It’s never too soon or too late to reevaluate your financial road map, so as the Nike saying goes, just do it!

Photo credit Patrick Barry

Tags: financial success, financial planning, relationship with money, financial goals

Are You Playing Chess or Checkers With Your Money and Financial Future?

Posted by Mark Zaifman on Fri, Mar 20, 2015 @ 11:29 AM

If you’re a boomer, perhaps you’ll remember Hasbro’s famous “The Game of LIFE”? The Game of Life challenges players to manage their money and get to retirement wealthy. Different spaces on the game board offer life challenges like babies, houses, night school, you name it. Spin to win!

Like with any game you play, besides having fun, ultimately, you also would prefer to win the game. So in that spirit, as you think about the way you manage your money and plan for the future, stop and ask yourself; are you playing checkers or chess and are you playing to win?

If you’re a Spiritus client, the answer is a given. You play to win and you think and act strategically. You know where you’re going and you have a dynamic financial road map that illustrates how you’re going to get there, move by move. Checkmate for you is about achieving financial independence on your terms, on your schedule and just as you planned.

Below are what I think are a dozen major differences between these two types of money management styles. How do you stack up? And wouldn’t you rather be a playing chess than checkers when it comes to your money and your life?


I could probably list another dozen or two differences, but you get the point. At the end of the day, what often determines whether you wind up with an ‘ocean view; retirement or a ‘garden view’ retirement is how well you planned. As the saying goes, fail to plan, plan to fail. That’s truer than ever.

Planning is not easy. It requires lots of thought, tapping into your imagination, trusting your intuition, visualizing your future, and that’s just for starters. Procrastination, inertia kicks in, life gets busy, demands at work pile up, and next thing you know, guess what, you’re 50 years old. What happened?

Show me anyone that reached financial success in life, especially if early in life and you can be pretty assured that person had a plan and played the game of life as a chess player.

Now it’s your turn to play. And this time, play like a master, plot your moves strategically, look over the horizon, course correct when needed and most importantly, have fun and play to win.


Checkers photo credit Phillip Taylor

Chess photo credit Tristan Martin