Personal Brands are the new oil! Is Coinbase halting trading?
What is Private Lending? Strategies in Real Estate for married couples
👋 Hello Everyone.
A quick reminder that not all financial journeys are the same and why you have to figure out the strategies that work the best for you! There is never a one size fits all so always research, ask questions and get proper guidance.
I see it every day where people have an advisor with the set it and forget it method. Well guess what - that doesn’t work and over time you could leave tens if not hundreds of thousands of dollars on the table due to your money not being properly invested or optimized.
Here are the top 5 reasons you need to actively manage your funds or have a professional help (some of these mistakes can be life changing):
Ignoring Asset Allocation: One of the fundamental aspects of investing is asset allocation - spreading your investments across different asset classes like stocks, bonds, real estate, and crypto. Neglecting to maintain a suitable asset allocation can lead to an unbalanced portfolio that is either too risky or not generating enough returns.
Failing to Rebalance: Over time, certain investments in your portfolio may outperform others, causing your asset allocation to drift from its original intended mix. If you don't periodically rebalance your portfolio (actively manage), it may become overly concentrated in certain assets, exposing you to more risk than you intended.
Ignoring Changing Life Circumstances: As life circumstances change (e.g., marriage, having children, nearing retirement), your investment goals and risk tolerance may evolve. Failing to adjust your portfolio to align with these changes can hinder your progress toward your financial objectives.
Not Reviewing Investment Performance: While a "set it and forget it" strategy is designed for minimal intervention, it's essential to review your portfolio periodically. Ignoring investment performance and failing to address underperforming assets can result in missed opportunities for improvements. This is one of the worst things that can happen to those that do not keep an eye on their investments and simply leave it to others or chance. DO NOT be this person.
Overlooking Tax Efficiency: Some investments generate more tax liabilities than others. A "set it and forget it" strategy may lead to inefficient tax planning, such as holding taxable assets in a non-tax-advantaged account or not considering tax-loss harvesting opportunities.
To avoid these mistakes, consider the following actions:
Regularly review your investment portfolio, at least quarterly, to ensure it aligns with your financial goals and risk tolerance.
Rebalance your portfolio as needed to maintain your desired asset allocation.
Stay informed about changes in the financial markets and economic conditions to make informed decisions.
Consider consulting with a financial advisor who can provide personalized advice and help you optimize your portfolio based on your specific circumstances and goals.
Remember that investment strategies should be tailored to individual needs and objectives, and a balanced approach that includes periodic review and adjustments can be more effective in the long run.
📣 What is the sunken cost fallacy - and how do I learn from it??
The sunk cost fallacy is a cognitive bias that can cloud judgment when making investment decisions. It refers to the tendency to continue investing in something because of the resources already invested, even when the future prospects of that investment are poor. To handle the sunk cost fallacy effectively when investing, consider the following five strategies:
Adopt a Forward-Looking Perspective: Focus on the future potential of the investment rather than dwelling on past costs. Evaluate the current and future prospects of the investment objectively and independently of the resources already committed.
Set Clear Investment Goals and Criteria: Establish clear investment goals and criteria before making any investment decisions. Having predefined criteria helps you make rational choices based on your investment objectives, rather than being swayed by past commitments.
Regularly Review and Reevaluate Investments: Regularly review your investment portfolio to assess each investment's performance and alignment with your goals. Be prepared to exit an investment if it no longer meets your criteria or if new information indicates that the prospects have changed.
Seek External Opinions and Advice: Emotions can play a significant role in investment decisions. Consider seeking advice from a financial advisor or a trusted and objective third party. They can provide an unbiased perspective and help you avoid being influenced by sunk costs. NO EMOTIONS ALLOWED
Practice Mental Accounting: Mentally separate the sunk costs from your current investment decisions. Treat the resources you've already committed as a sunk cost that is no longer relevant to your current choices. This mental accounting can help you focus on the future costs and benefits of your decisions.
Remember that everyone is susceptible to the sunk cost fallacy, and it requires conscious effort and discipline to overcome it. Making investment decisions based on future potential and current circumstances rather than past commitments can lead to more rational and effective portfolio management. Additionally, maintaining a well-diversified portfolio can also help mitigate the impact of any individual investment's performance on your overall financial position.
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🎙️ I am also really excited about how quickly the podcast has grown. So thank all of you that have downloaded and given it a listen. We have climbed the charts very rapidly and we are currently ranked #5…For those of you that have not stopped by it is the Rich Habits podcast on Spotify and Apple. And please feel free to DM me or message on any platforms and let me know your thoughts and takeaways.
For all PAID community members please note that the private livestream is now being held on ZOOM and its awesome. It is scheduled every Thursday @ 7pm EST. This is so exciting and will add so much more personal/community interaction. So buckle up and let’s have some fun.
💸 Personal branding is the new oil - and why its so important as you grow your career or new company!!! Eyeballs are everything 👀 👀 👀!
Building a personal brand has become increasingly important in today's digital age and competitive landscape. Here are five key takeaways explaining why it is crucial:
Differentiation and Visibility: A strong personal brand sets you apart from others in your field or industry. It helps you showcase your unique skills, experiences, and expertise, making you more visible and memorable to potential employers, clients, or business partners.
Credibility and Trust: A well-crafted personal brand builds credibility and trust with your audience. When you consistently deliver value through your content, interactions, and work, people start to perceive you as a reliable and knowledgeable authority in your domain. This trust is invaluable for attracting clients, customers, or collaborators.
Career Advancement: In a competitive job market, a strong personal brand can make all the difference in landing desirable job offers or promotions. Employers often research candidates online, and a well-managed personal brand can positively influence their perception of your qualifications and potential fit within their organization. So no late night drunk videos please!!
Networking and Connections: A compelling personal brand attracts like-minded individuals and fosters meaningful connections. As your network grows, so do your opportunities for collaborations, partnerships, and referrals.
Long-Term Asset: Your personal brand is an enduring asset that stays with you throughout your professional journey. Unlike specific jobs or companies, your personal brand is portable and adaptable so it is important to continually grow and adapt your content to remain relevant.
In summary, building a personal brand empowers you to stand out, gain trust, and connect with others in a way that can positively impact your career or business. In today's interconnected world, investing in your personal brand can yield significant benefits and create a foundation for long-term success.
😭😭 Is COINBASE halting trading besides Bitcoin?? NOOOOOO
The Securities and Exchange Commission asked Coinbase to halt trading on all cryptocurrencies except for bitcoin before it sued the company in June (old news), Coinbase’s chief executive told the Financial Times.
The SEC’s request left Coinbase, America’s largest crypto exchange, with no choice but to take the matter to court, CEO Brian Armstrong said, because stopping those trades would have “essentially meant the end of the crypto industry in the US,” he said.
“We really didn’t have a choice at that point,” Armstrong told the FT in an interview published Monday.
So please everyone don’t make panic decisions based on misinformation and click bait.
🤔 What is Private Lending and how can it work for you in your investment portfolio?
Private lending, or peer-to-peer lending, is a form of investing where individuals or entities lend money directly to borrowers without the involvement of traditional financial institutions like banks. In this arrangement, you act as the lender and provide funds to borrowers, typically in the form of personal or business loans. The borrowers can use the funds for various purposes, such as real estate investment, small business financing, or personal loans. There can be great returns in Private Lending but know the risks.
Here's how you can initiate private lending into your investment strategies:
Educate Yourself: Before venturing into private lending, it's crucial to educate yourself about the process, risks, and potential rewards. Understand the lending regulations in your area, the types of loans you want to offer, and the due diligence required before lending.
Identify Your Risk Tolerance: Private lending carries inherent risks, like any investment. Determine your risk tolerance and understand that there's a possibility of borrowers defaulting on their loans. Assess how much capital you can comfortably allocate to this form of investment.
Build a Network: Start building a network of potential borrowers and other investors who might be interested in participating in private lending deals with you. Networking can be done through real estate investment clubs, local business communities, or online platforms.
Perform Due Diligence: Thoroughly evaluate potential borrowers and their proposed projects or businesses. Assess their creditworthiness, financial stability, and the purpose of the loan. For real estate deals, consider the property's value, location, and market conditions.
Negotiate Terms: Work with borrowers to agree on the terms of the loan, including interest rates, repayment schedules, and any collateral or guarantees provided to secure the loan.
Documentation and Contracts: Ensure all loan terms are properly documented in written agreements signed by both parties. Clearly outline the rights and obligations of each party.
Manage the Investment: Once the loan is funded, monitor the progress of the borrowers and keep track of their payments. Stay in communication with borrowers to address any concerns or issues that may arise.
Diversify Your Portfolio: To reduce risk, consider diversifying your private lending investments across multiple borrowers and loan types.
Remember that private lending involves real financial risk, so it's essential to approach it prudently and with a well-thought-out strategy. If you're new to private lending, consider seeking advice from experienced investors or financial advisors to help you make informed decisions.
👂👂 Are you married and building a real estate portfolio? If possible one of you should become what the IRS deems a Real Estate Professional. And NO you do not need to have a real estate license.
The criteria is: 1) You must simply spend more than 50% of your work time during the tax year working on or managing your property portfolio 2) Or spend more than 750 hours working on or in the properties during said calendar year (15 hours per week) 3) Spend material time and activity working on the portfolio. This can be split among both of the partners. Make sure to keep track of hours and activities in case of an audit later. Now on to the good stuff:
Here are five of the most significant tax benefits:
Rental Real Estate Loss Deduction: If the real estate professional spouse actively participates in rental real estate activities, they may be able to deduct rental real estate losses against their non-passive income. This deduction can help reduce the overall tax liability for the couple, especially if they have rental properties generating losses. This is great when one of the partners are high earners.
Active Participation Loss Deduction: Even if the real estate professional spouse does not meet all the criteria to be classified as a real estate professional, they can still potentially deduct up to $25,000 of rental real estate losses against their non-passive income if they actively participate in the rental activities.
Depreciation Deduction: Real estate professionals can take advantage of depreciation deductions on their rental properties. Depreciation allows the couple to deduct the cost of the property over time, which can significantly reduce their taxable income. Also read up on the potential for a cost segregation study to speed up depreciation.
Self-Employment Tax Savings: If the real estate professional spouse qualifies as self-employed in their real estate activities, they may be able to save on self-employment taxes by taking advantage of various deductions and tax breaks available to self-employed individuals.
Spousal Tax Strategies: As a married couple, they may be able to utilize various tax strategies to optimize their overall tax situation. This includes shifting income or deductions between spouses to ensure the real estate professional spouse's deductions are used most effectively.
Tax laws and regulations can change over time, so it's crucial to stay updated and consult with a qualified tax professional to ensure you're taking full advantage of the available tax benefits in a compliant manner. Every individual's tax situation is unique, and professional guidance can help tailor the approach to your specific needs. All of these strategies can make a huge difference in your long term wealth building outcomes - so please read up and take action.
Weekly Book Excerpt (“Advise is one thing that is freely given away, but watch that you only take what is worth having”) Richest Man in Babylon - George Samuel Clason
Love his book and this quote. There is so much bad information being circulated that I implore all of you to please always do your own research to flush out what is best for you. As I always say “take notes and take action”. This is just incredibly important in your lifetime to ensure you have a plan over the years and execute on it.
Reminder - Most people simply do not even begin to invest or ever truly make the time to create a wealth building strategy. That ends with anyone that follows along with me. I am here to help guide and create Rich Habits so everyone following along finds their way to financial freedom.
Money Mindset - Weekly insights
Have you tried Acorns yet. I know you all have heard me talk about this awesome platform for years but now I am officially working with them and I couldn’t be more excited. If you haven’t used Acorns yet its a must in your wealth building journey. Even if you use it just for the roundup feature.
How it works - You simply attach your bank account and set the rate of risk you want in your portfolio and Acorns does the rest by rounding up your daily purchases and investing those funds. It’s such a great investment tool because it is automated and just a few cents at a time. It’s like found money.
Brand of the month - Dun & Bradstreet
I am excited to add Dun & Bradstreet to my portfolio of companies that I proudly represent. A DUNS number is so important to the success of your small business. So if you have not applied for one please read up so you can understand the importance of it. Please use the provided link so you can check out all the amazing benefits for your company -
D&B link
Thanks for following along. See you soon!