Why You Need Compounding Working for YOU!

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”- Albert Einstein

If you are in business, a mid to high level manager or a high-end Account Manager, you need to take investing very seriously.  Specifically, you need compounding working for YOU!  You need business ownership and profits working for you!

Prior to starting my investment firm, I had been in corporate America for 20+ years.  I have seen firsthand how companies today are lean and resource starved.  CEOs talk about organic growth, accountability to shareholders and increased margins.  We all have to do more with less.

If you are in a customer-facing role or management and have your compensation linked to a quota or MBOs, every year you need to do more (sometimes a lot more!) to earn the same as you did the year prior.  When you combine these YOY increases just to make the same “target compensation”, you can definitely feel the squeeze in your wallet.  I have seen highly talented account managers have their targets increase 60% to 100% over a 3 or 4 year period while their “target compensation” stayed about the same.  This is very frustrating!  These increases combined with a tough economy, growing inflation (healthcare, education, energy, food) and a serious lack of time, it is no wonder that many people feel like they are falling behind.

We understand your challenges.  Here are some things you can do to help.

1) It is important to be an investor and get compounding working for you!  Capitalism works over time; by owning stocks and bonds, you get to share in profits and appreciation.  Don’t listen to the financial media, the S&P 500 is already at a new all-time high (see my previous post) and your portfolio should also be at a substantial all-time high.  If not, you may have a strategy problem.

2) Most people need coaching and assistance to hit their goals and stay on track.  Most people in corporate America don’t have enough time to do what they NEED to do.  The important / not urgent items get pushed forever down the road.  This is a significant problem if you want to retire early or retire at 65.  These goals typically don’t happen without deliberate planning, goal setting and focus.

3) The best time to plant a tree is 15 years ago!  The next best time is today!  Take action regarding your investing strategy and retirement.  If you want to retire in _______ years (reasonable time), I encourage you to take action NOW!

4) Get a free 2nd opinion from a FEE-ONLY FIDUCIARY Advisor.  Most people don’t know if he/she is on track or not.  Do not go to a bank, insurance rep, broker, wirehouse rep or anyone who is not a FEE-ONLY FIDUCIARY Advisor…. and get it in writing!

5) Focus on the Academic Approach to investing.  Reduce fees and expenses.  Active management doesn’t work.  In a typical multi year period, 80% to 85%+ of active funds fail to beat their benchmark.  See my previous blog for data on a 10 year period.

6) Odds are that you need to save more than you currently are saving.  Target saving 15% or more of gross earnings.

Compound interest is the eight wonder of the world

Who we are:

Integrity Investment Advisors, LLC is a fee-only Registered Investment Advisory Firm.  We are headquartered in Colorado and serve clients on a national basis.  2013 Press Release: Integrity Investment Advisors, LLC and Managing Partner Todd Moerman are pleased to have recently joined an exclusive group of wealth managers offering the low cost mutual funds of Dimensional Fund Advisors (DFA) to its clients.

At Integrity Investment Advisors, We Believe Investors Should… 1) Have a fee-only fiduciary advisor working for you. Most Wall Street firms, banks, and insurance companies do not have this legal obligation. 2) Use low-cost passive investments. Costs & fees make a HUGE difference.  Our fees are .6% on the first $1M of assets under management and decline to .25% over $1M. 3) Focus on asset class investing. Diversify! 4) Focus on the Academic Approach to investing. 5) Trust but verify your current financial advisor

Contact us:

You owe it to yourself to get a 2nd opinion about your financial strategy, please call Todd Moerman 303-549-4720

www.IntegrityIA.com

Twitter @toddmoerman