Three steps to teaching your kids about money

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Nick Foy, CFP®

Most kids aren’t great with money. But then again, neither are most parents.

When it comes to teaching kids about money, I find few know where, or when, to start. Not many of us had parents of our own who taught basic financial literacy lessons, and we all know that just about nobody ever receives information about personal finance in school.

A couple of weeks back, the Wall Street Journal ran an article providing some ideas on the topic, but for the most part, the story was focused on teens (and later). But, in order to truly have an impact, I think parents should start teaching basics at a younger age.

It’s tough to get 96% of people to agree on anything, but check this out:

“Some 96% of 128 college students in a recent study said they wished their parents taught them practical skills such as budgeting and saving (emphasis mine).”

I’ll assume the remaining 4% either learned practical skills about money as kids, or were recovering from a late night frat party and didn’t really understand the question.

So when, and how, should parents start teaching their kids about money, debt, and investing?

Continue reading “Three steps to teaching your kids about money”

Don’t be like that guy

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Nick Foy, CFP®

From Nobel Prize winning economists to Warren Buffett, a consensus has formed for investor-centric advisors and thought leaders: Index (or passive) investors stand a better chance of having a great investment experience than their active counterparts. Decades of research and data have provided us a deep insight into the ways of the market. Stock markets don’t always make sense; sometimes, in fact, they go completely berzerk. But investors who focus on those things they can control: costs, taxes, diversification, and their own behavior, are probably going to capture more of the return that markets provide than those who overspend in what the data shows us is likely to be a futile attempt to beat a benchmark.

I drew this conclusion after studying the markets for the past 17 (or so) years, 11 professionally. Now, as a relatively young (middle aged?) advisor, I’m grateful to have developed this understanding early in my career.

Some aren’t so fortunate.

Continue reading “Don’t be like that guy”

What are you turning money into?

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Nick Foy, CFP®

In 2005, I bought my first house. It was a total starter home north of Charlotte. New construction, 1,500 sq feet, it became the place that my wife and I lived for five or so years after we married.

Toward the end of the construction process, I realized I was really just taking money and turning it into a house. In 2011, we moved closer to town and ended up building a home in which we still live. I had the same feeling the second time around.

Turning money into other things can be either good or bad, depending on what’s on the other side of the exchange. Continue reading “What are you turning money into?”

More income doesn’t make you rich

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Nick Foy, CFP®

The media and politicians make this mistake all the time, but it’s worth pointing out: More income doesn’t make you rich.

A couple of months ago, Business Insider answered the question entirely incorrectly: How much money you have to earn to be considered rich in 42 major US cities.

The article proceeds to tell us how much income someone needs to earn in order to be in the top 1% in cities all over the country. What they don’t mention, though, is that income has almost nothing to do with wealth. Continue reading “More income doesn’t make you rich”

Where we’ve been; where we’re going

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Nick Foy, CFP®

Every so often I plan to use this format to spend some time talking about me. Or, more specifically, about us, as in Greenway, our employees and our clients. And our (hopefully) future clients.

In some ways, I got into this business accidentally (hence the name of the blog). I never had any intention of going into finance; it was far too stuffy for me. I knew I wanted the focus of my career to be about doing something that I found meaningful, but I’m sure I could’ve made anything seem meaningful somehow. Continue reading “Where we’ve been; where we’re going”

Why revenue source matters

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Nick Foy, CFP®

An unfortunate reality of my industry is that you can make money as a “financial advisor” no matter who pays you. After the recent failure of the effort to require advisors act in their clients’ best interest, I’ve determined it’s time to call a spade a spade, and shed some light on those who masquerade as advisors.

The determining factor for each of these is the source of the revenue. Is the professional being paid to offer financial advice, to manage a portfolio, or to sell a product? If the latter, it’s likely they’re not actually a financial advisor. Here are a few of my favorites:

Continue reading “Why revenue source matters”

Homes aren’t savings accounts

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Nick Foy, CFP®

Back in 2011, when we still had cable, my wife and I would waste time vegging out watching HGTV. We saw people searching for their first home, renovating their current home, and looking for the perfect vacation home, sometimes all in the same episode.

Experts would help them with their construction and/or transaction, and by the end of a thirty minute segment, everything would be clean and beautiful and ready for living their best life.

Before (and sometimes after) a renovation project was complete, they’d often show the homeowner how significant the improvements were from a financial perspective, revealing their estimates for how much could be expected to be recouped were the owner to sell.

And it was totally, entirely, misleading. Continue reading “Homes aren’t savings accounts”

Don’t Do Dumb Stuff – The Best (Unintentional) Financial Advice I’ve ever received

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Nick Foy, CFP®

As a 13-year old, my 7th grade science teacher use to get (understandably) pretty upset with me. Mr. Morris was easily in his 60’s, with well-groomed grey hair, and polos that typically fit too tightly around his bulging biceps.

He also taught 7th grade PE, and would frequently find the need to recite this phrase to me, for one reason or another. He’d look me straight in the eye, as I sat in the back row of science class, or as I did something other than what was required of me on the field during PE:

“Nick, don’t do dumb stuff.” Continue reading “Don’t Do Dumb Stuff – The Best (Unintentional) Financial Advice I’ve ever received”