The First Ever Financial Tech Pod Cast!

Like I said a few weeks ago, one of my goals for this year is to put out more multimedia on this blog. A good friend of mine, Jim Collison, is an avid blogger and podcaster – you can check out his blog at http://theaverageguy.tv/. He and I have teamed up to create a financial pod cast!

In this pod cast we talk about my roll at the Credit Union, the technology behind making a financial institution work, shared branching and service network, online banking, online services like mint.com, mobile technology with Check 21 and much more!

We also looked at an ABC News report on the happiest place in America.  You may be surprised by the results!

Give me some feedback! Did you like what you heard? What topics do you want to hear about?

What do Kevin James and Personal Finance Have in Common?

I love the show The King of Queens starring Kevin James. There is a great episode called “Net Prophets” where Doug (James) and his wife Carrie receive a Holiday bonus and decide to invest it on their own in the stock market. Carrie’s co-workers have been talking about how much money they have been making in the stock market and Doug and Carrie want to get in on the action. Long story short, after investing the money Doug can’t sleep, and is constantly logging on-line to check the balances. At one point he says something to the effect of: Carrie, we are long term investors, we will hold these stocks for at least two weeks!

Doug and Carrie are clearly not long term investors; they have just heard someone on a TV commercial say those words and it sounded cool. At the end of the day they didn’t understand what it meant to buy and hold an investment and they were not in for the long haul.

When Doug and Carrie invested in their Holiday bonus they were engulfed in the second reason why individual investors often underperform. Doug was fearful the value of his investment would decline or fluctuate. He was afraid that they would lose some of the $3000 they invested. They clearly had not taken an inventory of their risk tolerance and were investing in areas where they were not comfortable. By building a diverse portfolio of equity, fixed income and cash investments Doug and Carrie could have minimized the volatility in the value of the portfolio that they feared.

Expectations are one of the single most under addressed issues when it comes to investing.

Doug and Carrie had some pretty unrealistic expectations for their investment. They had been hearing stories from co-workers about doubling account balances, massive returns on small investments, and even early retirement.

When the value of their investment account wasn’t jumping through the roof, Doug and Carrie started to question their investments and ultimately made the knee-jerk decision to sell their securities too soon. They didn’t have realistic expectations! Short of winning the lottery, nothing could have satisfied Doug and Carrie – they were looking for a get rich quick scheme!

Here is what it comes down to:

It’s not about picking the right stock, buying or selling at the right time, or even having the best analysis on an investment. Successful investing comes from developing habits that will enable you to stay the course and truly be a long-term investor.

It all starts with being honest with yourself about your risk tolerance, return expectations, and time horizon. You are unique! If your brother-in-law, who has a cast iron stomach, invests in commodities, options and emerging market stocks – that’s O.K. you can be different. Take an assessment of your risk tolerance by asking yourself a few basic questions:

• How will you feel if your account value fluctuates from day to day or month to month?
• How long until you plan to withdrawal the money you have invested?
• If your account dropped in value by 25% how would you react?

Having realistic expectations for the performance of your account is essential as well! Have a discussion with your advisor about what you should expect from your portfolio, having this type of open conversation will enable you to have a better understanding of reaching your long term goals.

You have to stay the course. It’s more than just saying – it’s doing it!

Too many people started to fold up shop and get out of the market during the first part of 2009. These folks immediately realized their fears and took steep losses. If they had only stayed the course they would have recovered much of the lost ground over the last two years.

Be honest with yourself and you can be a better than average investor!

What Are My Goals for 2011?

I have heard a lot of people say that they don’t make resolutions for the new year because they feel like they will just be setting themselves up for failure. I tend to disagree! I am a reflective person by nature, so I am constantly looking back at where I was and where I am now. I think that resolutions - or we can call them goals, are an important tool to impact future success. So in the spirit of encouraging you to set some goals I thought I would share some of mine.

What are some of my financial goals? Well as a newly minted home owner there are a lot of new things my wife and I have to get used too - making a mortgage payment instead of a rent payment is one of them! I also plan to save 1.5% of the value of my house to use for house repairs.

This year we may not have any issues with the property but maybe next year we will have to re-paint the house, or replace the furnace. By saving a few bucks every month we will be prepared for those types of expenses. A new furnace, without this savings, used to be a major emergency now it is just an inconvenience. 

As most of you know, I am also a big fan of budgeting. Liz and I have had a budget for a long time but just like everyone else sometimes we get off the straight and narrow path and have to get back on board. In 2011 I want to budget more deliberately rather than just use the same old plan from the past. This includes sitting down each month as a team and looking through our bank statements to evaluate our budget versus actual spending.

On the career front, I want to continue to grow the relationships we have established with Guide Rock Capital, and meet new people that we can help reach their goals. We have experienced overwhelmingly positive feedback from our readers about this blog so I plan to add some new multimedia functionality such as pod casts, videos and new images. Keep an eye out for the new material and let me know what you think!

Finally, one of my biggest goals for 2011 is to get more involved in community efforts to improve financial literacy in our work place, schools, and neighborhoods. In case you couldn’t tell I am pretty passionate about influencing social change through increased Financial Wellbeing. Money is a taboo topic in our culture but it doesn’t have to be. By talking about personal finance we can create new understanding of how to improve our relationships and our lifestyles. I am not sure how this goal will look when I reflect in 2012, but I plan to keep my eyes open for opportunities to get involved. 

Leave a comment! What are you planning to do in 2011?