In our previous blog, we provided the first seven financial strategies to help you come out on top. But we aren’t done yet! Here are seven additional actions to take now to secure your financial future.

Here are seven additional actions to take now to secure your financial future.

1. Fast-track any type of long-term saving: If your employer matches your 401(k) contributions, you should try to contribute the minimum amount to earn that free money. Hypothetically, let’s say you are 25 years old and have a $50,000 salary. If you save 4% ($2,000 per year), and your employer matches that same 4% (another $2,000 per year), and you have a 7% rate of return on your investments, you will have $828,522 at age 65. If you wait just five years and start at age 30, the ending value earning a 7% rate of return is only $573,708. So, by starting at age 25, investing the extra $10,000 over those five years, and receiving the employer match, you will make $254,814 more by the time you reach retirement age.

2. Budget and save using the “envelope method”: Some find it very helpful to set up “envelopes” and save cash from each paycheck to go towards their specific savings goals (e.g., a new house, vacations, an emergency fund, or a new car). You can do this electronically by setting up savings accounts for each of your goals. Go a step further by automating the transfer after each paycheck.

3. Don’t overpay for financial advice and investment management: The typical fee for financial advisors can range from 0.25% to 2% of assets under management per year. For an account that has $200,000, this can be as much as $3,000 annually … or even more. There are also options to pay a flat hourly fee or an annual flat retainer fee. Make sure you know what you are getting for your money. Is the fee just for managing your money, or does the advisor also provide financial planning and advice as part of the fee?

4. Time your major purchase spending: If you plan to make a major purchase in the upcoming year or two, time your purchases for when the best deals are available for that specific product. A quick Google search will help you find the time depending on the item. For example, the week before Labor Day is a great time to buy large appliances and December typically offers the best deals on new cars.

5. Don’t overpay for mutual funds: There are two types of mutual funds: active and passive. Active funds have costs associated with highly paid fund managers who research investment options in an attempt to outperform the market. Passive funds, on the other hand, mirror an index such as the S&P 500. This means their fees are much lower than active funds. Fees over a long period of time greatly diminish your returns. According to Morningstar, only one out of every four active funds topped the average of their passive rivals over the 10-year period ending December 2022.

6. Make sure you are taking advantage of your company benefits: Open enrollment is right around the corner for many employees. Are you leaving great benefits on the table by just keeping the same selection you had the previous year? Take time to review each option. Can you add a life insurance policy for your spouse? Would switching to a high-deductible health care plan be in your best interest? Should you be taking advantage of the flexible spending accounts offered? Benefits make up a significant portion of many compensation packages. Make sure you are taking advantage of all that you are offered.

7. Reduce your taxes: There are many ways to reduce your taxes by taking some simple steps. Contributing to any of the following can help: traditional IRA, traditional 401(k), health savings accounts (for those with high-deductible health care plans), and flexible savings accounts for health care and dependent care expenses. If you itemize your tax return, you also can make tax-deductible charitable contributions. If you choose to donate stock to a charity, you get the benefit of donating the fair market value of the stock at the time of donation without having to realize the tax gain.

There you go. If you have any specific questions about how these strategies could work for you, ask Tilly! We’re happy to help.

In the classic tale, A Christmas Carol, the mean-spirited Scrooge appears to spend all of his time managing and worrying about his wealth. While there’s no need to act like Scrooge in real life, most of us should spend some time keeping an eye on money matters.

Here are seven big picture strategies to improve your long-term financial results.

1. Save half of your pay raises: Because you didn’t have access to these funds beforehand, make it a habit to invest or save half of each pay raise. This best practice will have a profound effect on your net worth over a long period of time.

2. Invest tax-efficiently: To encourage savings, the government has established all sorts of tax incentives. Some of these opportunities are downright confusing and require a little research or asking for help. Free money goes a long way, so it’s best to figure this stuff out – and not miss out on good wealth-accumulation opportunities.

3. Shop around: The financial industry emphasizes relationship-building and trust to dissuade you from shopping for the best deal. But remember: Financial firms offering these products change their prices frequently. It’s best to get three quotes. Tilly can help with that process.

4. Stay in your lane: This is a big one. If you aren’t a highly trained financial professional, steer clear of purchasing high-risk investments such as options, commodities, small stocks, and cryptocurrency. In the short-term, you may win on some of these trades, but the long-term is another ball game. (Reading articles on the Internet does not make you a highly trained professional, FYI.)

5. Strive for competitive interest rates on your cash savings: When it comes to your emergency funds and cash savings, if you readily accept the paltry interest rate your bank provides, you’ll lose thousands of dollars in interest over the long-haul. You must proactively manage your savings to get a good rate by finding better rates without sacrificing your risk tolerance.

6. Maintain a “Goldilocks” amount of insurance: While insurance provides security and peace of mind, you don’t necessarily need to purchase too much insurance or buy expensive features such as whole life policies. Instead, consider purchasing what you need and using good financial management to protect against smaller risks.

7. Purchase financial products that are best for you, not just suitable for you: There’s a big difference between a suitable product and the best product. For example, a suitable product might imply there is a less expensive, better product available that you aren’t aware of. Many financial professionals will recommend the suitable product, so beware!

So there you have it. In future blogs, we’ll dive deeper into some of these strategies. If you have questions, ask Tilly today. We’re here to help.

Today, we’re sharing how Tilly clients benefit from working with us. Clients pay only $800 per year and in exchange secure these vital services.

1. Experienced Financial Decision-Making: Do you have someone to help weigh if you should make a particular investment? Or if you should refinance your mortgage? Do you struggle deciding which mutual fund to buy? Do you have access to someone who can run various retirement savings scenarios? Are you dialed into the latest tax code changes? Tilly offers you access to a CERTIFIED FINANCIAL PLANNER™ so you’re in the know!

2. Task Management: One of the biggest challenges managing money is just getting things done. If tasks aren’t handled, money is lost. For example, let’s say you need to roll over your former employer’s 401(k) plan into an IRA. However, like most of us, you kick the can down the road getting this completed. Weeks turn into months, months turn into years before you get it done, if ever. Meanwhile, your retirement savings aren’t being optimally managed. That’s where Tilly comes in. We maintain a list of your tasks online and nudge you along without being a pest. A bonus feature is that we also track completed tasks — providing you that satisfying feeling of accomplishment.

3. Tracking Your Net Worth and Optimal Asset Allocation: Tilly’s goal is to grow our clients’ net worth — and so we track it for you on a quarterly basis. Each quarter, we email our clients their statements of net worth and update any changes. On an annual basis, Tilly reviews your investments to make sure they are properly balanced to reach long-term goals. We evaluate equities, bonds, cash, etc. (asset allocation), and if your investments are out of balance, Tilly provides recommended trades to get you back where you need to be.

4. Big Mistake Avoidance: The average American estimates they waste around $1,819 per year due to their lack of financial knowledge, according to a 2022 survey from the National Financial Educators Council. This amount keeps rising each year. There are so many reasons for mistakes — such as not understanding the complex US tax codes, or overpaying for investment products. Tilly helps our clients avoid these mistakes.

5. Access to Money-Saving Financial Tips: Tilly provides our clients with many financial tips. For example, we’ve had several clients saving money at a bank earning 1% interest or less. We have shown them how they can invest their intermediate to long term cash in similar low-risk investments such as US government I-Bonds. The I-Bonds yield at least the rate of inflation, providing them much higher interest. Over a long period of time the added interest more than pays for the cost of Tilly.

6. Financial Counseling: When you need to make important financial decisions, it’s helpful to have access to someone who listens and understands your needs. That’s where Tilly steps in. Our CFPs understand your personal challenges and goals, which are important to you on an emotional basis. We help you remove the emotion and guide you to make good fact-based decisions without being overbearing with our advice.

7. Tips for Completing Complex Tasks: Tilly clients are do-it-yourselfers, but every now and then you may get stumped by financial forms and platforms that are difficult to complete. No worries, Tilly can provide a helpful hand. Tilly also helps our clients with questions about making trades on Schwab, Fidelity, MerrillEdge, employer 401k platforms, and others.

Tilly clients really do gain a big return on their $800 per year investment.

There are two types of return on investment (ROI): “hard” ROI and “soft” ROI. Hard ROI is calculatable. For example, if your savings account balance $30,000 and you earn 2% interest, you will earn $600 per year. If Tilly provides you advice that earns you 4% interest with the same or less risk, you will earn $1,200 per year. You extra $600 is hard ROI. Another example of hard ROI is the time we save our clients from having to conduct their own research. There are many other examples of Tilly providing clients with hard ROI – and we will cover those in another blog post.

When it comes to soft ROI, these are more difficult to quantify, but they are valuable. Examples include counseling our clients and the confidence we provide them knowing they have a second opinion with big financial matters.

I hope this post helps. If you’re interested in learning more about how Tilly can benefit you specifically, please let know. We’re happy to provide prospective clients a free, 30-minute session.

Investing pundits, mainly financial advisors, have this “formula” for financial success that looks something like this: Invest 80% of your money into mutual funds. Over a long period of time — you’ll earn enough to retire.

There’s nothing wrong with this formula; it’s fine and works for many. But don’t believe it’s the best or the only way to save and invest. For starters, much of the reason advisors believe in this theory is because they’re naturally incentivized to do so. Most are paid based upon “assets under management” which are stock and mutual fund investments.

Yet, investing is highly personal and based upon your skills, biases, and belief systems. Look at these real examples of investors who have taken a different approach.

• A person who invests a majority of his assets into rental properties. He has purchased one every 3 or 4 years and today, getting closer to retirement, owns 15 of them with very little debt. Voila!
• A person who invests a good percentage of assets into “nano” stocks — or stocks with a market cap less than $50 million. He enjoys learning and reading about these fascinating companies and has been successful at it. And, yes, he understands the risks.
• A person who invests 90% of his assets into very low risk assets such as treasury bonds, but invests 10% of his assets into much risker, higher return assets. Think The Black Swan philosophy.

This is America so you can choose to invest however you wish. Be smart — be thoughtful — and enjoy the ride. Oh, and feel free to ignore the pundits!

Many investors think of stock options as confusing and risky. Not always. Sometimes they can be used to reduce your risk — or earn you a nice profit.

Here is how a common type of options work, called “call” options. In the real world, this deal below would be completed using a computer wherein the buyer and seller never meet, but this way you can visualize the transaction.

Let’s say Henry owns 100 shares of XYZ stock, and today, the shares trade for $34.00 per share. John comes along and offers Henry this deal:

Henry, I’ll pay you $1 per share [$100] if you’ll give me the right anytime in the next 90 days to buy your 100 shares of XYZ stock for $35.00 share [a dollar more than the stock is currently trading for]. Deal?

Henry agrees to the deal, and they shake on it.

John is betting that XYZ stock price will increase because he’s offering to pay $100 just for the right to buy Henry’s shares for more than they cost today! Henry is betting the opposite because if the stock price remains under $35.00, no matter what, he gets to keep John’s $100 without outlaying of cash.

Forty-five days into this contract, XYX stock trades for $38.00 per share. John still has the right to buy Henry’s shares for $35.00. John could now go to someone else, e.g., Sally, and sell his right to buy Henry’s 100 shares for more, e.g. $3 each, or $300.

John has tripled his money in only 45 days. He paid $100 and sold for $300. Henry keeps this $100, but he lost the profit from the stock price increase he would have enjoyed had he not sold the call option to John.

Look out for Part II where we’ll explain how call options could benefit your own investment strategies.