Financial Tips Corliss Group Online Magazine on 4 Essential Money Mistakes Entrepreneurs Overlook

As I get rolling on a new startup with my partners at Startup.SC, a startup incubator in South Carolina, I am reminded of a few painful mistakes many entrepreneurs, myself included, make when starting a business.

Now, if you are starting a business, you probably have not put too much thought into how you are going to exit. There are, after all, countless considerations to make as you get started, from applying for business licenses, developing working prototypes to setting up your website. If you ever plan to sell your business or bring on investors to grow, how you run your business from the start is just as important.

Fortunately, it is not difficult to get started properly. Simply consider these four tips, often overlooked by most startup entrepreneurs.

1. Prepare your general ledger.

Setting up your accounting books may seem bland and tedious, especially for entrepreneurs without experience. Many rely on off-the-shelf accounting software, which provides general guidelines and templates to get you started. These are fine and completely acceptable for most startups, but to fully understand the financials of your company and, in the future, provide the evidence of the value you have built, you should give your set up careful consideration. Although a little pricey, it would benefit you to hire a professional when getting started.

2. Keep business business.

It is completely acceptable for entrepreneurs to pay for a variety of expenses with company funds, so long as those expenses meet the generally acceptable accounting standards (GAAP) for business expenses. Too many entrepreneurs, however, use company funds for personal use, trying to justify it with very liberal interpretations of GAAP or simply improperly reporting.

Not only could this get you in hot water with the IRS and open you up to a great deal of liability, it will be difficult in the future to separate these expenses when valuing your company. From the onset, it is best to just keep all personal expenses out of the business.

3. Report all revenues.

It is not difficult, and definitely enticing, to skim money from the business at the start, especially if you do most of your business in cash. Again, not only could this ultimately get you in trouble with the IRS, but it undervalues your business in the long run. It is going to be difficult to prove value and growth if you are not reporting real numbers from your business.

4. Keep careful records and receipts.

OK, excluding personal expenses and reporting all of your revenue just means giving more of your hard-earned money to Uncle Sam in terms of taxes. Not necessarily true. If you understand the extent of what you can expense and, more importantly, you keep copious records of your activity (both for audits and due diligence of potential buyers and investors), you can ultimately work down your taxable income without hurting the value of your company.

Grab yourself a good book or, better yet, find yourself a trusted professional advisor to learn how to best run your business this way.

I was part of a business team that looked at investing in businesses a number of years ago. It was not uncommon to meet an entrepreneur of a small business whose only proof of success and value was a shoebox full of cash. A few would emphasize that the company was paying for personal utilities, auto expenses and even groceries and that we should consider these expenses as part of the value.

The problem was that they often could not prove these claims satisfactorily because they had not accounted for them properly. In the end, it hurt the valuation of their company and gave us tremendous leverage during the negotiations.

Most entrepreneurs are not thinking about an exit when they are in the startup stages of a business. If you ever have a goal to divest or grow through investment, how you run your business before you start is just as important as after.

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Financial Tips Corliss Group Online Magazine: 10 Things Liberals Believe the Government Does Well

Is there anything that big government does well? I mean sure, our military is really pretty practiced at breaking things and shooting people; which (I guess) explains why they are being sent to fight Ebola. (If that logic escapes you, don’t worry… I think a lot of us feel that way.) And yeah, the IRS is pretty good at separating me from my hard-earned money; but, then again, so is Banana Republic. At least Banana Republic has the good taste to compete for my cash.

This basic question (“What does big government do well”) seems to confound liberals. We on the right have been asking it for decades… And we still haven’t been able to solicit a single honest answer from defenders of of the state. In fact, satire, sarcasm, and a little incredulity, is the general response from our esteemed colleagues on the other side of the ideological divide. I did, however, receive a list of “ten things government does well” from someone over the weekend. Of course, I couldn’t help but share it (and a few observations of my own) with the rest of the world:

Things that Government does well

(According to someone who I assume is a card-carrying member of Obama & Company):

1. Protecting our freedom

So that little dust-up in the 1770s was because government was just protecting our freedoms too vigorously?

2. Giving away land to common people

Um… What property are we talking about here? Because as far as I know, the government isn’t actually a “producer” of land – which tells me that the land it gives away to “common people” was first confiscated from someone else… Sure, government has turned “redistribution” into an art form, but I don’t think the forcible confiscation and redistribution of land coexists real well with “number one” on this list.

3. Educating everyone

The national graduation rate is a mere 75 percent; and only half of U.S. adults can name all three branches of government… Watch a few “fan interviews” of the Jersey Shore, and then keep a straight face while telling me that government has done a great job educating our youth.

4. Helping us retiring with dignity

Because nothing is more dignified than depending on a paternalistic government Ponzi-scheme for financial security in your golden years, right?

5. Improving public health

Ebola. (And on the off-chance that you’re still not skeptical, here’s another one-word answer: Healthcare.gov.)

6. Building our transportation network

Federal data shows there are roughly 63,000 “structurally deficient” bridges in the US. Of course, this doesn’t even skim the surface of roadways that are deteriorating on a daily basis. Heck, on my way to the convenience store, I routinely have to dodge a pothole that has the capability of swallowing my Jeep Rubicon. And all of this deterioration is despite the massive amount of time and energy our state, local, and federal governments have dedicated to “stimulating” the economy with a little rush-hour timed construction work. (I actually have a running theory that my home state has no storage unit for traffic cones… After all, that’s the only logical reason for blocking off a four mile stretch of a major interstate so crews can repaint 25 foot of the HOV merging lane.)

7. Investing in communications

Sure, the government owns the radio frequencies… Too bad they haven’t been able to develop a dependable way to alert President Obama to impending scandals before the media breaks a story.

8. Building our energy supply

Because nothing says “efficient use of taxpayer funds” quite like a bankrupt green-energy company in California.

9. Inventing the future (NASA)

Wait… “Inventing” or “investing”? Because last time I checked, “Muslim outreach” wouldn’t necessarily fall under either one of those categories. (Well… Unless our defense against ISIS is far worse than even conservatives fear.)

10. Defeating totalitarianism

Right. So government is super effective at killing the effects of overbearing government. This makes total sense.

Financial Tips Corliss Group Online Magazine: Trust Facebook for investing advice? Not Yet

Social media and financial advice aren’t such an easy match after all.

Sure, the initial attraction is obvious. With one stroke, advisers can woo clients with regular investment tips on Facebook and Twitter, building an audience and drumming up business. Then, after establishing a rapport with their followers, they can follow up with one-on-one video conferencing to clients on Skype or FaceTime without leaving their screens.

But back up a minute.

Old-fashioned, face-to-face communication is still key, advisers say, even for those who use social media extensively. In-person meetings are a must to glean nuances about risk tolerance and financial needs that clients may not even realize about themselves, let alone be able to communicate. Worse, pat advice on Facebook and Twitter can run the risk of looking like a hot tip and other worthless advice littering some investment websites.

So, how best to proceed on social media? Here are some things to consider:

1. Set the right tone

Being on social media is about “being where the people are. It’s about being engaged, sincere, genuine and contributing something of value. And over time, you build relationships,” said Will Britton, a financial adviser in Kingston.

For him, social media is a place to begin a conversation. For instance, he hopes to open dialogues with his regular roundup of stories from financial media, acting as a mini news service for people following him on Twitter. By linking to these stories and affixing his Twitter tag, he’s effectively handing out electronic business cards to the world.

“My presence [on social media] is enough for people to know what I do professionally. There’s certainly some professional content, whether it’s sharing links to worthwhile articles or videos or stuff that I come across.”

It’s a faux pas, though, to look like someone selling something, he said.

“I try to stay away from overt marketing, A) because we get into compliance issues from an industry point of view, and B) I just don’t think that that’s what the people on those platforms want anyway. They’re looking for connections and conversations and engagement. They’re not looking for spam and ads and ‘Come buy this from me,’” he said.

2. Differentiate between public and private

Investment professionals need to draw a clear line between public and private, a line that’s not always clear in social media, nor in real life.

Take this easy scenario: a conversation at a children’s hockey game. In the stands, parents inevitably get to talking. Often the topic will turn to money and, sooner or later, an investment pro such as Mr. Britton will have to mention that he’s a financial adviser.

That’s when another parent may get serious and ask a direct question about the family’s finances. That’s when the informal conversation needs to stop and continue in private. It’s best to think of social media as a giant referral service for investment advisers, he said.

“I think a lot of the time, people definitely aren’t going to the Yellow Pages [to find advisers], and I don’t even know if they’re going to Google any more,” he said. “They are crowdsourcing that information. They’re going to their community, wherever it is, whether it’s online or off, and saying, ‘Hey, does anyone know a good financial planner?’”

3. Social media still isn’t seen as a replacement for traditional financial news sources

There’s skepticism surrounding social media as an information source in the investment community.

Institutional investors remain particularly wary, according to a global poll by communications network AMO conducted in January this year. Their survey of 105 institutional investors in 12 countries found that 85 per cent feel that social media sites are generally not reliable for financial news.

Yet, at the same time, they also indicate a future for it, with 82 per cent saying that social media is growing in importance in financial communications. Thirty-nine per cent of these are prone to looking at investment forums for work regularly or occasionally, and 28 per cent consult them under exceptional circumstances. LinkedIn was the most popular of the social media sites, with 59 per cent consulting it at some point, although a large 41-per-cent segment reported never using it professionally. About 46 per cent reported ever consulting Twitter professionally.

Similarly for retail investors, an online survey in August of 2013 for BMO InvestorLine found that social media platforms, such as LinkedIn and Facebook, were still slow to be seen as reliable investment-news vehicles. Only a third of the 1,020 Canadian investors surveyed said they use social media for investment insights.

In comparison, 69 per cent of those investors surveyed said they found TV current events and business news trustworthy, and 55 per cent said the same for newspapers and magazines. So linking to more traditional news sources may still be a good habit for advisers online, rather than linking to blogs, forums or other social media.

All of this suggests that social media continues to make inroads, but it still has a way to go.

4. Organize online advising more effectively

Victor Godinho, a financial planner in Toronto and still in his early twenties, sees social media as perfectly suited to the 20- to 40-year-old crowd he caters to. Every Friday, he posts a financial tip on his social media sites, from Instagram and Facebook to Twitter and Pinterest. He has a client in Ottawa with whom he conferences on Skype.

Yet he adds that Skype and social media require a more effective use of time, rather than just chatting for an hour in his office. “You need to keep their attention [online], or you need to make sure they’re on the same page as you, considering you’re in two different locations.”

It’s a supplement to in-person meetings. “Every year when we do our annual review, we’ll meet in person,” he said, and “when you’re in-person, you’re inclined to talk more than just business.”

But for a video conference, advisers need to send clients documents ahead of time. Time onscreen needs to be managed more efficiently, and the meeting needs to move along at a faster speed. More pre-planning is required to make the meeting more effective. It requires a different communication skill, with a focus on not wasting time.

“If you can make that easier on your client, that’s the best thing you can do,” Mr. Godinho said.

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Financial Tips Corliss Group Online Magazine: Essential Money Tips for New College Grads

Graduation is the theme all around my neighborhood. It is a time of excitement and big dreams. Unfortunately in most cases, personal financial sense is not a taught at college.

Once out of college, going from living broke to a big paycheck every month can easily encourage lifestyle inflation and a downward spiral of bad financial habits. Hence, it is essential to establish a good personal finance foundation to avoid getting trapped in a lifetime of debt. Here is a checklist I would hand over to a new graduate to make sure they start on the right path.

Earn

Learn to network efficiently: Invest time in networking. Learn about your colleagues. Find a mentor and build relationships at every level, both above and below yours.

Start a case study file: By "case study file," I mean make a list of all your accomplishments rather than a list of projects you worked on. For example: Cut 20 percent of production costs while maintaining the same product quality. Include information on which project and what you did to achieve that. This will be of great use in many situations like an annual review, a salary negotiation or a new job search. In addition, keep your resume updated at all times.

Promote your personal brand: As a job candidate, 86 percent of potential employers will look at your social profiles, so spend some time cleaning up all your social media profiles.

Spend

Create a budget: You might feel like you are flush with cash going from a student's pay to a full-time-job's pay. Create a budget even before you get your first paycheck. Continue as much as possible to live like a student and set money aside for your future goals.

Save

Pay yourself first: The first bill you should pay each month should be to you. Before you pay for your groceries, before you pay your mortgage, before you do anything else, put money aside in your savings. Most people will wait to pay all the bills and save the money left over. It is fine in theory, but the problem is there is almost never anything left over. If you pay yourself first, even if it seems impossible initially, you will learn to live with what is left over. This way you will always spend less than you earn.

Borrow a book or two on finances: Knowledge is power. Arm yourself with as much personal finance knowledge as possible. I recommend "I Will Teach You to be Rich" by Ramit Sethi, if you are just starting out.

Start an emergency fund: Establish a rainy day fund as soon as possible. Start with $1,000 to cover small emergencies, then move on to saving 'X' number of months' expenses to make sure a sudden job loss or illness won't put you in debt.

Think five and ten years ahead: Right now your 20-year-old self might say that you are never going to get married or you will always be renting. But in five or ten years, it is very likely you would have changed your mind completely. Do yourself a favor and start saving for standard goals anyway -- a wedding, down payment for a house, or your dream vacation. If you don't end up spending money on a wedding, you can always reallocate it to another goal.

Invest

Get started today: Time is the most powerful ally when it comes to investing. Many people keep waiting to learn everything about investing to start. Don't get stuck on debate minutiae. Get started with some basic, low expense, index funds -- total stock market or life-cycle funds. As you learn more about investing, you can adjust them accordingly.

Don't pass up free money: If your company offers a 401(k) plan, especially with matching funds, take full advantage of it. Sign up to contribute the maximum. That way you will never see the money in your wallet, you won't miss the money, and you won't be tempted to spend it.

Borrow

Manage your debt: If you have student loans or credit card debt, pay them off aggressively, starting with the highest interest rate loan.

Avoid consumer debt: I do not believe credit cards are evil, but they are not for everyone. Understand the pros and cons of credit cards. Do not buy things you cannot afford. If you want something, save for it.

Build your credit: Unless you are determined to pay everything in cash, you need decent credit to get a good interest rate on your loan, whether a car loan or a mortgage. Even if you are in the cash camp, it is still a good idea to maintain a great credit score as it is now used by utility and insurance companies to give you preferred rates.

Protect

Insure adequately: When you are in your 20s, you might feel invincible and be tempted to skip health insurance to save money. Don't! Accidents happen, and so do sudden illnesses. If your company offers health insurance, that is most likely the cheapest option. If you are under 26, you can also check the cost of insurance as a dependent on your parents' plan. If you are single with no dependents, you probably don't need life insurance, unless you have a loan that someone else co-signed for, if that is the case, insure yourself at least to cover that loan amount.

Nobody cares more about your money than you do. By setting up a good financial foundation, you are setting yourself up for success.

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Saving Money: Tips everyone in their 20s should know by Financial Tips Corliss Group Online Magazine

Financial advisers stress that there are several money lessons everyone in their 20s should know. For example, start saving at least 10 percent of your monthly income.

James Madison University graduate Nandi Alexander, 22, from Washington D.C., celebrates after the Conferring of Degrees at the College of Arts and Letters ceremony during the spring commencement, May 4, 2013, in Harrisonburg, Va. Financial advisers stress that there are several money lessons everyone in their 20s should know, such as saving at least 10 percent of your monthly income.

Changing your financial state requires a kind of time travel to commune with your future self. Where do you want to be in 10, 20 years? Are you on the right path, or heading in the wrong direction?

The time value of money—that is, how savings, investments and debt levels compound with the passing of years—means that money habits, good or bad, created when we start to earn cash echo into the decades that follow. And a whispered bit of wisdom up front can keep you from howling over your mistakes later in life.

We polled our NerdWallet network of Ask an Advisor certified financial planners about the greatest regrets and lessons you should learn in your 20s, 30s and 40s. Taken together, these could be considered 12 steps toward securing your financial future. And they all hinge on two keys skills we must learn—and often relearn—in our money lives: prepare and stick to a budget, and establish good savings habits.

We’ll address the 30s and 40s later this week, but first: your 20s.

“Understand that the world has changed. You will be more responsible for your financial future in regard to earning a living, retirement planning, funding and investing, health insurance coverage and costs and less coverage through government programs,” says Jerome Deutsch, managing director of U.S. Institutional Markets for Index Strategy Advisors in Decatur, Georgia.

“Learn, plan and live mindfully and with a long-term perspective. It may not sound like fun, but you have a long life ahead of you.”

Pay yourself first

Save at least 10 percent of your monthly income. “The earlier you start this, the easier it becomes,” says Michael Keeler, president of GFS & Association in Las Vegas. “If you can learn to live without 10 percent of your income, you’ll do great in retirement.”

Use the savings to set aside the  equivalent of six months’ gross income. “This money shouldn’t be subject to market whims and shouldn’t have the goal of making a lot of interest,” says Larry R. Frank Sr. of Better Financial Education. “The objective is to develop the war chest for unexpected expenses and to develop the habit of keeping your standard of living within your means”—to spend less than you earn.

After you’ve built your emergency fund, focus on paying down debts or begin to invest.

“Student loan debt comes next,” says Sara I. Seasholtz, president of Preferred Financial Strategies in Mooresville, North Carolina. “Then they should participate in the 401(k) where they work and contribute whatever is necessary to get the match from their employer. This figure seems to be 6 percent in most cases.”

Don’t go crazy with credit

Live within your means and resist the new spending power that comes with having income and a few credit cards. Otherwise you will spend your 30s paying for your 20s—and your future self will hate you for it.

“My number one piece of advice for those in their 20s is—beware of debt and credit! So many of us have made the mistake of bankrolling our 20s with credit cards, and spent our 30s digging ourselves out,” says Carrie Houchins-Witt, owner of Carrie Houchins-Witt Tax and Financial Services.

“As tempting as going out and buying that new car may be, I would advise against it. Now is the time to start building up emergency funds and a strong foundation to invest in assets that appreciate,” says Jeremy S. Office, principal of Maclendon Wealth Management in Delray Beach, Florida. “The pleasure of not having debt or paying it down will last much longer than that new car or luxury item.”

Marriage? Think again

The heart rules, but if the head were in charge you wouldn’t think of marrying in your 20s. Why? Roughly half of all Americans get divorced in their lifetime, true, but those who marry before the age of 30 are especially likely to.

In 2012, 80.6 percent of all American women who had a divorce and 72.8 percent of all men were below the age of 30 when they married. “I started family before settling in on long-term career plans [and that] made it difficult to transition back to career later after 10 years and divorce,” says Jean Schwarz, managing director of Lumina Financial Consultants in Vienna, Virginia.

“Experience shows [that] all of us change so much between 20 and 30. Looking back, we wouldn’t recognize or want to be ourselves at 23-to-25 when we are 30,” adds Seasholtz. “To be a good mate and partner one needs to know themselves well. They need to be established and have some successes in life.”

Maybe settle for a long engagement.

Know and build your FICO score

Your FICO score is a measure of your creditworthiness, and is based on your payment history, credit utilization and length of credit history, with scores ranging from 300 to 850.

Tracy Becker, president of North Shore Advisory Inc., a national credit repair company, cites an example when suggesting  how to building a strong credit rating in your 20s: First, have your parents add you as an authorized user to one of their credit cards. Then open a secured credit card, which usually requires a cash deposit roughly equivalent to your credit line. Six months later, the woman in the example had a FICO score of 660.

“The reason her score was this high without much credit is due to her Mom’s old Visa card being reported. The Visa card aged her average age of credit substantially, giving her extra points,” Becker says.

This opens the door for future credit lines and securing bank loans when you want to buy a house. Key, of course, is keeping your balance low and paying on time.

Ultimately, you are young and you have time to make mistakes and recover. But you’ll be far better off if you get off to a good start now.

“I never considered the impact that waiting to build savings and investments would have on my long-term financial security,” Schwarz says. “I didn’t think about time value of money until my mid-30s.”

Financial Tips Corliss Group online magazine: Here’s How to Navigate the Noise and Find the Best Market Tips

There’s a whole lot of noise out there in financial media these days. Investing blogs are everywhere, CNBC and Fox Business Network broadcast investing advice 24 hours a day, and even when the U.S. market is closed there’s some issue in an emerging market that threatens to affect stocks at the next opening bell.

So how can you make sense of this, tuning out the noise and tuning into the information that matters?

Jeff Macke — the current host of Breakout on Yahoo Finance and one of the founding fathers of CNBC’s Fast Money — recently penned a book to help you do just that.

His book, Clash of the Financial Pundits (available here on Amazon and co-written by fellow pundit Josh Brown), is an exploration of how pundits make calls and sometimes even move markets.

But it’s also a guide into how financial media works, what makes pundits tick and how individual investors can better use the information at their disposal to make more money.

The book’s most valuable section, in my opinion, includes these tips on examining pundits, offered by Jeff Macke and Josh Brown:

1.         Who is this expert, and what firm or organization does he represent?

2.         What does her professional affiliation mean in terms of the opinions she’s sharing?

3.         Does he have the same time frame or investment objectives that I do?

4.         How many ideas is she generating each day or week? How much thought is going into each one?

5.         What are the consequences for him if he is wrong? Will we ever hear more about this idea in a follow-up?

6.         How does the opinion I’ve just heart relate to my own portfolio or investing goals? Is there any real relevance?

7.         Why am I reading or listening to this in the first place? Intellectual curiosity? Entertainment? Or do I have an actual need to employ this sort of information?

8.         Is there a publicly available archive of this person’s previous opinions and forecasts? Have they been mostly accurate or mostly wrong? What were the driving factors behind the accuracies or the great calls? Luck? Skill? Good timing? Strong research? Some combination of these elements?

I love this list. And the only thing I would add to it is:

Buy Clash of the Financial Pundits, both to improve your media literacy and to have a better understanding of just how the financial advisory business works.

A Conversation With the Author

Author Jeff Macke has a lot of great advice on how to navigate both the markets and financial media. But mostly, his advice centers around embracing personal responsibility and the imperfection that is inherent with investing.

“Your goal is not to really become a master of investing or trading, it’s to be able to become at least up to the level where you know what you don’t know and you don’t get yourself in trouble,” Macke told me last week via telephone. “Don’t do things like day trade the hot IPOs, or pay more commissions than you should, or stay uninvested because you’re just going to sit on the sidelines with 50% cash and wait for a pullback, or start thinking things like the market should do something or else.

“You have to be an informed investor and ask the right questions, but it doesn’t mean answering everything yourself.”

Asking the right questions doesn’t just involve searching for the best big investment opportunity, either, but also searching for the right place to get your financial news.

“‘Consider the source’ is rule No. 1, whether you’re on the playground or watching television or whatever you’re doing,” Macke said. “For some reason there’s this void in understanding of financial media that it’s a product. That, when people would criticize CNBC on the up days for being a bunch of cheerleaders … that’s a ludicrous criticism; It’s a television network. It’s being run by people who are not finance majors who are not even necessarily CFAs, and it’s being produced like a television show is produced like MSNBC, like Fox News, like all of them are produced — by generally younger people who are getting on the phone and calling folks who can articulate their ideas in friendly soundbites and look good doing it.”

In other words, Macke said, if you’re blaming the pundits for leading you astray … you should probably look in the mirror instead.

“The people who are harshest on pundits usually have a problem with their own level of accountability,” he said.

The trick is to understand that being personally accountable does not mean being perfect. You will be wrong sometimes, but that’s OK. After all, even the greatest investors get it wrong — and in the book, Macke has some great conversations with pundits from Jim Cramer to Jim Rogers to Ben Stein about their mistakes and how they learned from them.

In fact, making mistakes gracefully — and honestly — is actually a more important quality than most think.

“The commonality, the theme that runs through each of the conversations is that these people have been wrong, they’ve made mistakes and they’ve learned something from it,” Macke said. “If you’re in the business of judging the pundits, look at the ones who have handled mistakes and how they’ve gone about their process and how it has changed them — to be wrong or right in public. That will tell you a lot about whether or not you want to listen to them.”

So if you’re willing to make some mistakes, how should you invest right now?

“If you’re in this game, you’re just going to have to concede the fact you’re going to want to take a couple flyers in there. Well, put 10% of your portfolio away and do that, knock yourself out,” Macke said. “If you truly believe and feel like you understand two or three companies, then create your own little portfolio.

“But your staples, your main food, you’re kind of bread and water should be index funds. That should be your core position — long the S&P 500 — because man, it is tough to beat.”

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Financial Tips Corliss Group Online Magazine - Top 7 Financial Tips From Nancy J. Lapointe, Navigate Financial

I was asked at a social wine event, “What are the most important tips you have learned that people typically don’t know, but need to know?”   That is a loaded question and very subjective.  Basically, you are asking me what I think people need to know and giving me permission to get on my high horse.  That sounds like fun!

1.            At age 70 ½, Required Minimum Distributions are not an option on some IRAs.  You have to take the distribution. However, you do not have to spend the money.

2.            Credit cards are loans and could have very high interest rates.  Avoid paying credit card interest.

3.            Income is income and money is money, so leaving money in a low interest account, while paying a high interest credit card seldom makes sense, even if the money in the low interest account came from your Grandmother.  Pay yourself back at zero interest and get rid of the credit card interest.

4.            A Home Equity Line of Credit is not an emergency fund.  It is an open loan with interest and it must be paid back.  It is a good stop gap measure as you build up a proper emergency fund for you situation.  An emergency fund needs to be accessible and be cash or cash equivalent.  An emergency is an event out of your control such as accidents, illness, etc.

5.            An emergency is not paying your property taxes or getting new tires.  Those are expenses of living and you should plan for these types of costs.

6.            A car is a mode of transportation and not a reflection on your self esteem. Be reasonable in buying depreciating assets.

7.            A CERTIFIED FINANCIAL PLANNER™ (CFP®) Professional and a Broker are not interchangeable.  If the CFP® Professional is practicing according to the CFP Board of Standards, he or she is consistently striving to integrate the client’s plans with the client’s activities.  A broker is trained to manage investments and to focus on performance and investment related opportunities.

Nancy LaPointe is a financial advisor located at Navigate Financial, 4520 Intelco Loop SE, Suite 1D, Lacey WA 98503. She offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. She can be reached at 360-628-8175. This communication is strictly intended for individual residing in the states of AZ, CA, GA, IA, MT, NM, OH, OR, WA. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products  and services.