Would you focus on paying off debt or investing first?
Does that matter if you’re giving up on not getting a 401(k) match?
Never put off saving until you get out of debt.
Human nature and habits show that once you are out of debt (or close to it), people often feel comfortable about their progress and end up buying another car, upgrading their homes etc.
When this happens people often never get started saving because are perpetually ‘putting it off’.
The time-value of money is such that every year you wait costs you exponentially more than you save in paying down interest debts.

How much of an emergency fund should you build up before funding a retirement account?
All the traditional financial talking heads say that six months of emergency savings is advisable.
However, most people mix up the term ‘savings’ versus ‘investing’.

They are not the same thing.

If you want secure wealth and retirement you need to build a safe foundation that won’t fall when the market crashes.

This does not happen by investing in the stock market.
The stock market is more akin to a casino and that’s not solid ground to depend on for your retirement.

Instead, people should build a foundation of wealth based on savings, not investing, that will never disappear in a market crash but still creates growth and wealth.

Only after your foundation is built should you risk your ‘extra money’ in volatile investments, which could be lost; then it won’t impact upon your family or wealth.

When would it make sense to max out your 401(k) or retirement accounts?
In my opinion It only makes sense to max out 401ks when you are fully funding tax free retirement alternatives like a Roth IRA or an IUL.

With taxes near all-time lows and Government debt at an all-time high, deferring taxes to the future is a sure fire way to crush your savings when you pull out income, because tax rates could be double what they are today.

That’s why looking for and using assets that give you tax free retirement in the future is so important.

What’s the risk of putting funds in a retirement account or 401(k) when you’re in debt?
Is taking a loan ever advisable
The risk of putting money in a retirement account while still in debt depends on what type of account you are using.

The problem with traditional retirement plans like 401k or IRA’s is that they severely restrict access to your money.

If an emergency arises such as a loss of job or an investment opportunity comes around that you want the money for it can be extremely costly to pull it out.

In these cases it may make sense for more savvy investors to borrow against their retirement plan; but this is not recommended for most people as it is high risk.

Is this a factor investors should take seriously, or is it just entertaining to argue about?
The presidential election is typically not enough to make major investing decisions in itself, however, based on how highly inflated the market is right now, it makes sense to be precautionary.

Is this unusual election year likely to make the markets break with past patterns?
The thing that makes this election year cycle unusual is the fact that the stock market has been so highly inflated artificially to begin with. That’s the reason to be leery, not just because of the election itself.

How will the general economic conditions in the U.S. and around the world change things this year?
If you believe the fed and wall street is in the tank for the democrats then more than likely they will prop up the stock market until the election to help a democrat get elected.
If the market is down, this would lead more people to vote for a republican.

Is it a time for investors to be cautious, perhaps putting cash on the sidelines?
I believe now is a great time to be cautious, but again, not simply because it’s an election year, but because of the fundamentals of the economy and the bubble we are sitting on.

How do you decide whether to get a financial advisor rather than just go it alone?
For most people hiring a financial advisor is totally unnecessary.

Why? Because financial advisors usually underperform the market index and cost you more.
In fact 86% of money managers underperform their benchmarks. 86%!

Warren buffet. John bogle and Charles Schwab all recommend average people use index funds to grow wealth as they have the most predictable outcomes.

You can also use a cam-IUL strategy to grow money when the market goes up with no risk of loss when it crashes. And you can do it all without paying a financial advisor.

How do you know whether a given advisor has experience matching your needs?
Remember financial advisors are a fancy word for stock salesperson.

Most of them are much more interested in accumulating assets under management than they are managing your money to profit you. They get paid whether you make money or not.

It’s advisable to find an advisor who has a large book of clients ‘just like you’.
You don’t want to be working with an advisor who caters to the middle class if you are extremely wealthy and vice versa.

What are the pros and cons of various compensation structures – commission, asset-based, fee-only? Which do you recommend? Why not simply ask your mutual fund company? How about the financial advice offered through your 401(k)?
A fee-based planner can be an advantage if you truly aren’t still paying a percentage of your assets under management. However often they charge high front end fees that can be prohibitive for average people to afford and you never know how well they will actually perform for you.

Counting on accurate advice from your 401k company or mutual fund broker is like asking the wolf to guard the hen house. The people who run these plans are motivated by getting more assets under management.

They usually have very little experience with real estate, private lending, or insurance backed assets for income planning. You definitely aren’t getting a well-rounded unbiased financial advice from your 401k plan administrators or mutual fund brokers.

What should you expect to spend as, say, a percentage of assets.
Anytime you are paying a percentage of assets you are hurting the compounding power of your wealth.

Take for example the difference between $100,000 compounded at 8% versus 5% over 35 years.
At 8% you have $1.48 million dollars.
At 5% you have a staggering difference of just $551,000!

That ‘little’ 3% fee just cost you a million dollars!
And who got all that growth at your expense? Wall Street and your financial adviser.

Ouch!

Paying any fees is undesirable, but anything over 1-1.5% is unacceptable especially if your results aren’t beating the S&P 500 index at 10%; which historically 86% of money managers never do.

Almost everyone ends up paying 2-3% between all the fees loaded into stock market investments, and most never know how to calculate how much they are paying.

1. Get your house in order.
Create a war chest of cash that will allow you to pay for expenses if you lose your job. A war chest is cash In the bank that isn’t going to disappear when the stock market crashes

2. Stockpile right now.
Make as much money as you can right now by finding ways to increase your income. That might include freelancing or moonlighting or starting a new business. But most of all, don’t depend on one source of income.

3. Move your assets from risk to safety.
Once the crash hits it’s too late to protect your wealth. Don’t be foolish and repeat errors of the past by letting greed drive your decisions to leave money in the market because you don’t want to miss out on some little bit more growth. This is how the typical person operates and the typical person gets burned over and over and over again.