photos courtesy of Gary Morrison

Will The Financial Past Repeat?

by Steve on April 9, 2015

I was listening to the car radio recently and two commercials that aired back-to-back struck me. The first one was for some expert who could teach me how to flip houses for profit. The one that followed was for a local casino. Both ads are promoting gambling. Not sure what it means, but start paying attention to the extent to which many people are engaging in speculative behavior these days. Please don’t be one of them when it comes to your future security.

“Those who do not remember the past are condemned to repeat it.”

– George Santayana
Spanish Philosopher (b. 1863 d.1952)

Power of Positive Money Habits

by Steve on April 7, 2015

A habit is something you do regularly or a fixed way of thinking. A habit is triggered by an external stimulus. For example, if you brush your teeth when you go to bed at night, it’s probably a habit triggered by the act of getting ready for bed. Or if you immediately feel fear when your tax documents start arriving in the mail in January, it’s a habit triggered by the mail. Some habits are negative – you know they are not in your best interest, but you do them anyway – and some habits are positive – they are good for your overall well-being (like always calling your sister on her birthday).

We all have money habits too. Most personal finance books are filled with suggestions to fix negative money habits – don’t overspend, eat out less often, keep a budget. These are not bad ideas, but I wanted to write about positive money habits instead. Here is a list of positive money habits I’ve observed from clients over the years. Can you add to this list?
• Observe the 24-hour rule before making a big purchase
• Pay bills on the 10th and 25th of each month
• Put loose change in jar and use accumulated savings for fun experience with wife
• Put every $5 bill that you receive in change into savings jar
• Do an annual net worth review on New Year’s Eve with spouse; celebrate success with bottle of bubbly
• Call wife before spending more than $20
• Review investment accounts at end of each quarter and rebalance if necessary
• Check Mint before using debit card
• Pay extra on mortgage every month so that an extra full payment is made over the year
• Shop with a grocery list; never buy anything not on the list
• Give two items your currently own to charity for every new one you buy

You can set up triggers to create positive money habits. For example, tape your annual money goals to your credit card so that every time you use your credit card, you’re reminded of the bigger goals. Or, you could put positive money habit reminders on your calendar for every payday to remind you, for example, “transfer $XX to the family vacation account. “

Creating positive habits takes time and we are not perfect. If you make a small mistake and don’t follow a habit you’re trying to create, give yourself a break and get back to the habit. Start small with a habit you know you can accomplish and do it for 21 days. Then try another one.

If you want to learn more about the power of habits and how to use them to your advantage, I suggest that you check out the website for James Clear ( He is a wonderful personal development writer/coach and his free eBooks are valuable.

Investment Winners Over Last 20 Years

March 31, 2015

Recently I was looking at the last 20 years of investment returns for five major asset classes: • Large U.S. stocks • Small U.S. stocks • Stocks of Developed Countries outside the U.S. • Long-Term Government Bonds (20 year bonds) • Government Bills (30-day U.S. government bills) Over the 20-year period from 1995 through 2014, […]

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Words of Wisdom

March 24, 2015

Nick Murray worked as a financial advisor for 25 years and now coaches financial advisors. He often has something interesting to say. Here are some thought-provoking comments I gleaned from a recent interview he gave. On financial success: “All financial success comes from acting on a plan. A lot of financial failure comes from reacting […]

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The Most Powerful Economic Force in Your Universe

March 17, 2015

It’s a positive money mindset. Today’s blog post is not about dollars and cents (or sense), efficient market theory, spending plans, insurance or compounding. It’s about our first SmartMoney Rule – creating and holding a positive money mindset. James Allen, an early 20th century thought leader and author of the book “As a Man Thinketh” […]

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March 9, 2009

March 9, 2015

Do you know why today is special? Six years ago today, the S&P 500 index hit its low point of the Great Recession of 2007-2008. The S&P 500 index closed at 676 on that day. Last Friday, the S&P 500 index closed at 2,071. That’s a gain of a little over three times in six […]

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Continued Good News for U.S. Economy

February 24, 2015

As they do each month, the Federal Reserve Bank of Chicago published its latest findings on the state of the U.S. economy earlier this week. Here is an excerpt from their press release: “Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) edged up to +0.13 in January from –0.07 in […]

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Reflections of a Financial Blog Post Writer

February 21, 2015

I’ve taken a break from writing blog posts for a few months because I was burned out. That’s right. Even I get tired of writing about personal financial matters. The press of client work, a State of Washington audit of our business (which occurs every few years), year-end tax planning with clients and a rush […]

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November Fed Indicators Show Strong U.S. Economy

December 22, 2014

The Chicago Federal Reserve Bank publishes a wonderful “state of the economic union” monthly. Their summary, published today, shows that the U.S. economy is purring along nicely. The three-month moving average of their indicators was above the historical trend. What this holds for the future is un-clear (seeing into the future is always impossible), but […]

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Six New SmartMoney Rules™

November 22, 2014

We created the basic six SmartMoney Rules™ that we encourage our clients to practice: Protect Yourself Tie goals to your values Use cash and debt smartly Invest wisely Know how much is enough for retirement Review regularly We have six more SmartMoney Rules™ to add to the mix. These are born out of our experience […]

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