Posts Tagged ‘Finances’

Remembering Black Tuesday

Remembering Black Tuesday

Summary of the Dow Jones Industrial Average on Black Tuesday and the closing numbers for October 29, 2013.

Does anyone remember Black Tuesday? It was the day that marked the beginning of the Wall Street Crash of 1929.

Eighty-four years ago today, we were on the brink of the Great Depression. We call it the Great Depression – not because it was good but because of the scope and duration of this event. Today we are entering into unprecedented territory once again as the market reaches new highs. Reflecting on the last eighty-four years, what lessons have we learned and how can we use that information going forward?

Manage risk properly.

Speculative trading magnifies profits AND losses. Understand the risks going in and develop an appropriate risk strategy. If you are emotionally involved, consider working with a professional to give perspective. You can still make the final decision. I remember a time shortly after 9/11 when the markets were particularly uncertain. I spoke to an investor who sold all of their holdings because they feared losing money. They succeeding in locking in losses and when they finally felt safe enough to buy back in, they purchased at a higher price. Instead of paper losses they realized capital losses. Ouch! They were upset with their decision and in hindsight wished they had not sold at a loss. Tough lesson on the price of allowing your emotions to make your investment decisions.

No one has a crystal ball.

If you had asked someone in 1929 to predict where the stock market would be in 2013, they would have been hard pressed to imagine it would be in the 15,000 range.  The truth is that the market will continue to do three things – rise, fall and stay flat. It is possible to make money in each environment and understanding which strategies work best in different market conditions will make you a more successful investor.

Knowledge is power.

Understanding your values, goals, time horizon and risk tolerance pays big dividends. Most people distract themselves with market movements and are looking at those numbers to check their performance. That is useful information however, it is more important to measure your progress towards your goals. The market may be down but if you are on track with your goals, you sleep better at night and it is less scary to open up your quarterly statements. Conversely, the market may be up and if you are not on track to meet your goals, you are feeling a false sense of security and it is time to reevaluate your plan and get back on track. Up, down or sideways – it is important to measure YOUR progress against YOUR goals.

Remember these lessons and learn from Black Tuesday.






The Road to Financial Literacy

via Unsplash by Simon Waelti

Have you mapped out your path to financial literacy?

It has been a long day at work. You are busy. You have things to do, places to go and people to see. You open the mail and read your 401(k) statement. You look at the charts and graphs and numbers and wonder what it all means. Are you saving enough? When can you retire? Are you making the right investment choices? The phone rings and you put away the statement and resolve to do something about it next week.

Sound familiar?

Most people continue to put off planning for retirement. They are too busy. Too confused by all the choices. Intimidated by the technical aspects of planning. Afraid to make a mistake. Wanna know a secret? There is hope and there is help. Today there are a host of tools available online and offline to help you get the knowledge you need to bridge the gaps in your financial education. Armed with information, you can make smarter choices about your money. If you invest the time, you will feel more confident and you can increase your skills.

The first step is to carve time out of your schedule to devote to learning. Decide how much time you can spare. In as little as 15 minutes a day you can make progress. Look at your schedule and block that time out. NOW. Stop reading this article and get out your calendar. I can wait….

Okay – so now you have decided how much time you are going to devote to learning. The next step is to define what it is that you want to learn. I am a huge fan of lists. Create a list of all the things you do not know. Include all the questions you have about anything related to your finances  (even the ones you are too scared to admit to not knowing). Once you have a good list going, you can sort through the list and rank in order of priority.

Now you are ready for some learning tools and resources. There are all sorts of classes available online and offline.

The FDIC offers a series called Money Smart that covers the basics of financial management. There are also modules available for youth, older adults and small business owners. In as little as 30 minutes per module you can increase your knowledge base on a variety of topics from how to track your money to understanding how credit works.  Another option developed by Texas AgriLife Extension Service under contract with  the U.S. Department of Labor Women’s Bureau is WiseUp. WiseUp educates Generation X and Y women and offers modules on money basics, record-keeping, insurance and risk management, investing and achieving financial security. Money Smart and WiseUp are free and require registration to get access to the learning modules.

Prefer your learning online with ed2go?  With a course catalog that includes courses on everything from accounting and finance to writing and publishing, you can take classes on a variety of topics to increase your skills and knowledge base. There are now about 9 courses on personal finance and investments.  Each course provides details, a syllabus, requirements and reviews. Most courses typically last 6 weeks and you have access to interactive student forums where you can post and discuss your questions. The pricing varies and discounts may be available through your college, university or local library.

If you are serious about your learning quest, you may want to consider taking educational courses designed for Certified Financial Planners(CFP®). Courses include general principles of financial planning, insurance, investments, income tax, retirement, estate, and financial plan development. You can take the courses without committing to taking the exam. I took the tax class with a woman who was not on the certification track and she discovered an error in her tax return and was able to recoup the cost of the class by amending her tax return and requesting a refund. Knowledge is powerful stuff. For more information about the CFP® program you can visit the CFP Board online.

These are only a few of the many options that are available to increase your financial knowledge base. Investing your time pays big dividends and increases your confidence. Regardless of whether you are working alone or with a financial professional, the more you know, the easier it is to make smarter choices about your money.


Welcome to my Blog!

The name of my blog is Roadmap to Change. I chose this name because as a money mentor coach, I help people create their own financial roadmap so they can get and keep their financial house in order.  Often – this means change. The word change has multiple meanings. Change can mean to replace or remove something. Change can be about becoming or making something different. It also means to convert one currency into another or to exchange money for smaller units. When it comes to your finances, change (action) can lead to change (¢) and over time it all adds up.

Is Change good or bad? Depends on your perspective. Sometimes change feels scary. Change can lead to something different and many of us value the tried and true. Maybe we are not 100% happy with the status quo and yet we are not willing to rock the boat and take a chance on change.  We settle for less because we are afraid of making the wrong choice or losing what we have.  I have found that personally, when I take a chance on change, I am seldom disappointed. Things may not always turn out the way I want and yet somehow more often than not, I end up with something better than what I left behind. When I want something different, I do something different. Sometimes I take baby steps and sometimes I take quantum leaps.

I invite you to join me on this great adventure exploring how to change your money story and open up to a whole new world of possibilities! Stay tuned for more tips and ideas about creating change.