Simple investment allocation principle to reduce Anxiety

This post is meant for people with anxiety, and these are the only people whom I would recommend this strategy for. As with any financial opinion you see on this blog, it is simply my opinion. Before making any financial decisions you should seek out as much information as possible to make an informed decision. All that said, as individuals with anxiety, even discussing money can be agonizing. What do you do then if you are functioning with anxiety, working and investing?

You need some way to help navigate investment allocations. What are those exactly? An allocation is exactly as it reads, how much you are allocating to a specific asset class, like cash, stocks, bonds. Rather than go in blind or with no knowledge at all you want to have at least some strategy. Again, you should be doing some research on your own to help educate you on finance but often we don’t have the energy to do this.

There is a simple method to determine allocations, and mitigate risk. Again, this is meant for people with Anxiety not seasoned comfortable investors. It is the rule of 100. The assumption in the rule is that the maximum age you are likely to live to is 100. You take your current age (let’s say you are 45) and subtract that from 100, that number 55 (or 55%) is what you should be invested into equities (which are stocks and include mutual funds that invest in company stocks). This would leave 45% of your assets into more conservative investments (bonds, CDs, Treasury’s, Cash). The older you get the less investment into higher risk investments and more into lower risk.

The Finance Industry bombards you with fear

This particular strategy is very simple and is actually pretty effective. One of the myths of the finance industry is that you have to have targeted funds managed by professionals to “guide” you through your life. Of course that’s the sales pitch, it’s an industry, be a little cynical here, they are selling you something…. With this technique you manage your risk based on anticipated age of death. Morbid? Yes, but we have to use something and once you’re dead, it doesn’t really matter.

100 is kind of a max, if you live to triple digits’ bravo and it’s reasonable to assume as technology improves life spans will as well. The “100” number can be substituted with any number you want, 80 is a good number. Now this strategy is considered conservative, fiscally I always advise people to be conservative first until knowledge is obtained, experience is obtained and more granular decisions made from the accumulation of both. That said, this blog hopes to serve those with anxiety. Money and investing is a huge source of anxiety but both are required for our long term prosperity.

Thank you for coming by and supporting my blog! Please remember to like, subscribe and share I truly appreciate the support. Want to see another post like this one? Click here.

Do this to ensure your financial success in 2021

2020 is over its time to move on from it and get back on track and become more disciplined. We are in January, and it’s likely that you will have a credit card bills coming in from the holidays. Did you overspend? You aren’t alone if you did, many people who were at home found it easy to shop online and spend. Even if you didn’t overspend below is how you can ensure financial success in 2021.

Step 1: List all your debt’s smallest to largest. (total owed)

Step 2: Next to each debt, if you know it, list the minimum payment for each.

Step 3: Next to each Minimum payment, list the type of debt. (credit card, Auto loan, house payment.

Step 4: next to each debt, if you know it, list the minimum payment for each.

You should now have a matrix of 4 columns, if you did it in Excel even better, paper is fine too. You now have a list of the all the items that are crippling you financially and holding you back from obtaining wealth and freedom. It’s at this point you should take a break from this task. To this point it likely took you from 15-30 minutes to organize but emotionally you might be exhausted.

Now we start on ensuring your financial success in 2021.

Come back to your list when you are ready, but no longer than a week. (you should work on this for at least ½ hour a week, you can do that). Add the column of minimum payments, this is how much you are spending a month on debt. This is IN ADDITION TO your rent, food, utilities, travel. Calculating those are a separate exercise. For now, stick to the total number in column “minimum payment”.

Total DebtMinimum PaymentType of DebtInterest Rate
2$97,000.00$0.00Student loans8.00%
3$17,500.00($585.00)Car Payments5.50%
5$800.00($25.00)Master Card17.50%
Total Debt($2,185.00)
Total Fixed($1,815.00)
Grand Total($4,000.00)
A simple spreadsheet is enough

For my example it is $2185.00. Now add to this your other fixed expenses for the month. Rent, food, utilities all the things you have to have to live, not the things you want. Let’s say that number is $1815, add those two together = $4,000.00 below the 4000.00 put your monthly take home pay.

Your half hour is up, take a break and come back when you are emotionally ready. You now have the blue print to ensure you financial success in 2021. If your monthly take home pay is less than your total expenses your pay has to increase or your expenses have to decrease. You can increase your take home pay by working more, reducing your retirement contributions as an example. Expenses can be reduced by moving to a cheaper apt, less food as an example.

We now start the methodical work of eliminating debt smallest to largest. In my example I have a surplus of $250.00 per month. I am going to take that surplus and ADD IT TO the minimum payment of the smallest debt, my $750.00 visa. In 3 months that card should be paid off. At that point I would then have a surplus of $275.00 a month, which I ADD TO the minimum payment of the next smallest debt the $800 master card which would be $300.00 a month payment. In 3 months that should be paid off.

You rinse repeat for every debt. Eliminating credit cards along the way (you only need one) and revisiting this matrix for ½ hour a week, every week through 2021. You will begin eliminating debt and increasing your net surplus every month. THAT is financial success. You have more money every month to live on, imagine when there is no debt? You have a surplus of 2K plus a month?

Vacations, retirement, new clothes, vehicle upgrades are all on the table at that point. The key to ensuring your financial success in 2021 is becoming debt free ASAP. Then instead of working to send your money to someone else, you get to keep it. ½ hour a week is all it takes. Focus on it, make it a ritual and really invest in your personal economy.

Any questions along the way ask and if I can I will help you.  

If you liked this post remember to like, subscribe and comment I really appreciate your support! Want to see another post like this one? Click here. 

How to navigate the finance industry

First a disclaimer: I have been a finance professional in many different roles for nearly 30 years. The advice I give on this blog should not be taken as fact but rather an educated opinion. When making financial decisions you should always do your own research and not trust singular voices a world away.

Now that out of the way let me tell you how to navigate the finance industry. The finance industry is the multi-billion dollar apparatus that uses fear to get you to give them money. I know it sounds sinister, because it is IMHO. “You need a million dollars to retire!!!!!!!!!” the shouts go up nearly daily. Really? Because I know many people who didn’t have a million dollars and had a good retirement.

Sure if you want to travel all over the world first class, yep you are going to need MILLIONS. If you intend on staying in the home you have purchased and been in for years, and live a normal life (dinner a few times a month a nice vacation once a year, a long weekend away twice a year as an example) then you need income to support this. Is this what you are doing now? Do you have millions in the bank?

The finance industry uses fear to get the outcome they want. They want you to give them money, so for a fee, they can invest it in products they created and give you money back in the future. Oh by the way there is no guarantee you will get MORE back, or even the same amount you put in initially. “As you age medical expenses go through the roof you need MORE INSURANCE

Am I contagious?
OMG what is this guy talking about?

Another cry goes out. Perhaps you will, perhaps you won’t. The important thing here is to step back and observe what is happening. You are being sold, and then they are upselling you. I know you are amazed to read that the nice men and women SHOUTING you need to save millions might be selling you products to make THEM money but hear me out.

When you go to an auto mechanic and he says “you need a new alternator coil” how do you know you actually do? You went to him for his expertise, you are TRUSTING that he is giving you the right information. He might be, or he might be upselling you something you don’t need because you are ignorant of what you really need.

I know I am rambling a bit, it’s because the finance industry annoys me. Maybe I am jaded (ya I am) or maybe I have a better way. So here it is, the pay off, the moment you have been waiting for….


You seek out teachers, not salesman.

Here is what I mean. All of the sarcasm I spewed above may actually be true. You may need millions, I don’t know your life or the life you desire to lead. Rather than place your trust in someone selling you a product, how about you place your trust in someone who is willing to teach you about the product? Finance isn’t complicated. I know you don’t believe me, because you’ve been conditioned not to. If you make 30K annually and you live on 29K annually you have enough to live. If you wish to live a life that requires 39K annually you have to make 9K more to do it.

Find someone who will teach you about finance, about how to make money grow. About what insurance you need at what phase in your life. Find someone to teach you about investing, about how to buy a car, about how to save for college. This knowledge is out there and it’s easier to obtain then you think.

You can navigate the finance industry with one simple step, commit to not be sold, commit to learning.

Thank you for supporting my blog I really appreciate it! Want to see other posts like this? Click here.

Couple of Financial tips during the Corona crisis

If you have been reading my blog for a while you know that I am a finance professional and have been for nearly 30 years. The stock market has crashed, countries are banning assembly of people, companies are having people work from home. Yes this is a crisis, how long it will last is anyone’s guess. If you have anxiety like I do, one of the things we are thinking about is our personal economic situation. Here are 5 things for you to think about and consider during this current calamity.

1. Assess your income sources: This is the single most important thing to do. Income = survival in normal situations. If you still have money coming in you can still buy goods and services for now. If you think that your company might have layoffs, or you are a tip based wage earner your entire approach to this crisis is different.

2. Accumulate cash: don’t panic and sell of your investments (if you have them) or cash out your 401K’s but reduce your spending as much as you can to accumulate cash. Why? What if this gets worse? What if we are all stuck inside for 3 months? Think toilet paper is expensive now? I don’t mean hoarding physical cash in your home but cut down on spending if you can.

3. When you can, buy extra staples: You are going to use them anyway right? So you are at the store, buy a little extra toilet paper. I know this runs counter to item 2 but the point here is if this goes on longer than a month there could be supply issues. Buying a can of beans? Get 2-3. Don’t horde, other people need these items as well.

4. Don’t let Empathy rule your decisions: This is going to be a very hard one for some of you. People will ask you for help, friends, family etc. You have to be in a position to help, so if you don’t have enough money, goods etc. to be comfortable with your situation how can you help someone else? People play on empathy, I know in my family I have people who are practically travel agents for guilt trips. Help people of you can but remember to now allow that help to place you in a worse position.

5. Leave your investments alone: I realize many people who read my blog don’t have investments. If you do, leave them alone. Selling now in the middle of a panic crisis ensures you will have skewed results. Now isn’t the time to buy either, we are still in the middle of government reaction. There will be large swings in the market until likely the end of May. You could be up 10% one day and down another 12% the next. Now isn’t the time to try and be a market expert, hold tight, this will pass.

These are by no means the end all be all, hey if one small tip helps you that’s a good thing. God knows everyone has an opinion or an insight into what is happening. The best thing you can do right now is take care of yourself. That will put you in the best position long term to help others and to be okay once this all calms down. Having weathered a few, smaller situations like this in the past I suspect by June 1st things will largely be back to normal. Here’s hoping it happens way before then.

Take care of yourself

Anxiety and your money – Income

Anxiety takes on many different forms in the way it manifests itself within us. Often times we are unable to think clearly, so things are overlooked. A bill is due, the laundry hasn’t been done. We curl up in our safe spaces and wait it out. These times don’t often lead to productive outcomes, its essentially just holding on until the mood passes, sometimes it can take days. For some people it can take years. Regardless if we have anxiety or not, we all have to deal with money.

Money or your income is the basis in which you can survive in modern society. The degree to which you understand your income often leads to the quality of the survival. In simple terms, the more income you have the more resources you can muster to “weather the storm” we talked about in the first paragraph.

Let’s be clear on income first, Gross Income is the sum of all sources of income you have before deductions or expenses. Net income is the income you have left after all of your deductions or expenses. I know this is basic information but finance, for those of us with anxiety is often easiest when we establish the basics. The goal is to figure out how much gross income you need to pay all of your expenses, so you don’t end up with negative net income or a loss.

Many people get preoccupied with the amount of money they make or have. What’s critical is you make enough money to provide your necessities. More and more traditional income sources are falling by the wayside. There was a time where you worked for one company for decades and they were your primary income source. Today there are side hustles everywhere and you may be deriving income from multiple sources.

The important thing to remember is all sources of income have to be looked at carefully. What I mean here is if for instance you live in the U.S. and you are contracting, or you get ad revenue, or you sell items on eBay. In these examples the income is “true gross” meaning nothing has been deducted. You sell your marketing services for 1000, you get 1000. You then have “salary income” you work at a job, they take out taxes, you receive the net.

Its critical to understand your sources of income and where they come from. Most important here is to understand if you need to pay taxes on this income. The government will always get their money, its not a matter of if, it’s a matter of when. So, for those of us with Anxiety we need to be acutely aware of our income source. If for example you received 1000 and spent a 1000 but at the end of the year were required to pay 250 taxes on the 1000, you would have to get it somewhere else.

Income is the most important financial gauge you have to determining your future outcomes with money. Debt is often a choice, income is a reward for something you provided. If you have multiple sources of income and suffer from anxiety remember to keep it as organized as you can. Spend 15-30 a week focused on your finances, understand where your income is coming from and what kind of income it was. This can save you a lot of pain later on, as often we get money and we spend it. Understanding your income portfolio is extremely important don’t ignore it !

If you need help or have questions, feel free to email me directly and I will do my best to help you.