If we have nothing but a house payment, two car payments, three credit card payments, and four kids that require more monthly maintenance that the two cars… how on Earth do we get started with an investment plan? Most of us don’t have a large inheritance or a winning lottery ticket — so where do we get that principal? The answer of course is that we must tend to the difficult and disciplined work of budgeting and saving money.

I know… it’s not fun to even think about, much less to execute. But it is essential to financial health and success. Plus, the imagined drudgery will turn into enjoyment when you’re able to control your finances by managing them, instead of them driving you to the poor house. Knowledge is power, as they say!

Getting started with a home budget

If you are a budgeter, you wouldn’t believe how many people don’t have a home budget. If you’re not a budgeter, you probably know you need to be but just keep putting it off. If you’re procrastinating on this, I’ve got two suggestions:

  1. Your financial health won’t improve in any length of time unless you’re on top of your spending habits.
  2. You’ll likely be disappointed with your retirement, if you don’t know what it will truly take for you to live the life you desire.

The on-line tools for budgeting are great these days, and many are available for free. There’s also a lot to be said for the old method of using pad and paper, and separating cash for budgeted items into envelopes. If it isn’t there, you can’t spend it. Somewhat old-school, but it works for many!

Once you have the desire and the tools, start following the essentials like taxes, food, rent, and clothing. Savings is one of the items that need to be high on the list as well.

The benefits of compound interest

Consider this: if you invest $100 on the first day of the month, every month for forty years — and you earn a 2% annual return – you’ll have over $73,000 in savings. Think of this as money you wouldn’t have had if you hadn’t started saving! Shoot, even if it returns zero percent… you still have $24,000 socked away!

Conversely, if that return happened to be 6%, then there’s almost $200,000 in your nest egg. And if you put away $500 each month – you see where this is going! Compound interest over time can do wonderful things for your savings or IRA, but if you don’t save at all you’ll simply end up with zero.

Start saving today

In any case, I strongly recommend that you start saving right away – and if you already are saving, start increasing the percentage you save every year. You don’t have 40 years until retirement, you say? The truth is that every day counts, regardless of your income or age. If you’re having trouble coming up with an investment or savings plan, a financial advisor can help.

Think of it as building your dream home. Every dollar of debt paid down is a brick in the wall; every dollar saved is another brick. Over time, you’ll build that home, the retirement and lifestyle you seek.

Updated March 2019

Originally posted May 2016


You can’t time the market. You have heard that, right?   This is an accepted truism in the investment business. It is also a simplistic load of poppycock; sheer balderdash I say.

If we can’t time the market, then why do investors with the best track records keep cash on hand for a “buying opportunity?” You might argue that isn’t trying to time the market but is simply value investing. I don’t argue that it’s wrong, quite to the contrary, it’s very smart, but it is “timing the market” from my perspective.

Please don’t let me lead you astray. I am a big proponent of buy and hold, but I do want us all to re-examine our thoughts about our criteria for buying and selling.

Nick Murray is a fellow I’ve referenced before in my writings. He’s an advisor to financial advisors in the investment business. His book for clients of the financial advisor may be of interest to you. You can find it at: http://www.nickmurray.com/bkwealth.htm.

I have heard Nick speak and read his newsletter and some of his books. He preaches that you can’t time the market and makes his point thusly: “When do you buy? When you have the money. When do you sell? When you need the money.”

My job as a financial advisor is to get you, the client, to follow a plan of that ilk. There are, of course, other issues.   First, you have to save some money, then you have to decide when you want/need to spend it. This is all part of that financial plan I’ve been harping on for most of the past two years.

The problem, and the ugly ramifications of trying to time the market, appears when those two emotional investment decision drivers come into play: fear and greed.

Too often fear and greed make investors, even the best and brightest of us, into complete dolts. Human nature makes us sell when the markets are falling (i.e., stock prices are cheaper and falling lower) out of fear we are going to “lose it all,”. It also makes us buy out of greed and fear that we may be missing an opportunity when the market is running to new highs out of.

I often tell people this is the only business where people shy away from buying when things are on sale, and people rush to buy when prices are at “an all new higher price!”

Today, stock markets in the U.S. have seen significant price increases since November of 2016. The uncertain world is even more uncertain today: Tomahawk missiles fired into Syria; demonstrations of military might in and around Korea. What will this do to the markets? Will they go up more this year or will they fall?

You know me well enough by now to know my answer to that either/or question is, “yeah, maybe.”

While that answer may not feel particularly helpful, let me give you another Nick Murray quote wherein he paraphrased the eminently quotable Winston Churchill: “A buy and hold investment strategy is the worst strategy known to man … except for all the others.”

So yes, I feel your pain (never mind who I’m quoting there). It’s an unsure world out there and there will be times we wish we had a crystal ball. If you want to be a market timer, then keep some cash on the sideline for rainy days – either days you need the cash to pay some bills or buy some bargains. Otherwise, plot your course and keep a steady hand on the tiller.

I went to see “King Kong” a few weeks ago. It was a hoot…at least it was for me. I can remember how exciting it was to see the old 1933 version on our little black & white TV back around 1960.   Given the reception we had, I thought it snowed on tropical islands until I finally made a trip to the Bahamas about 20 years later!

So what, you may ask, does the big guy have to do with investing? Not much, I’ll grant, but there is this: I believe the movie I saw last week corresponds to reality with just about the same level of fidelity as what I hear reported out of Washington today.   While we can sometimes chuckle, it’s a sad state of affairs when the affairs of state are reduced to so much foolishness, dishonesty and absurdity, isn’t it?

If that isn’t bad enough, it’s doubly insulting that the disingenuous pontificating that we get from our elected officials, and the over-the-top screaming dialog the press somehow has the gall to label as reporting, is so obvious in its transparency. It seems as if they are not even trying to present believable information. It is wearing me down…can you tell?

And the problem is, of course, that it matters. I will admit, however, in this age of social media everything seems to matter.   I am quite confident after hearing the recent hullabaloo over “Shaq” (jokingly) endorsing a “flat earth” belief that there are all too many that will take the leap from watching matinee monster movies to assuming there are dinosaurs and the like roaming the Pacific Islands.

I got up early to see the 7 AM monster movies on Saturday mornings when I was a kid. They switched off with Tarzan movies every few months or so as I recall.   On rainy afternoons, the double-bill Creature Feature was just the thing to pass the dreary day. Unfortunately, my over-protective mom wouldn’t let me watch monster movies until I was in my 30s (ok, that’s a bit of an exaggeration); perhaps it was because I didn’t sleep the second half of my fifth year on earth after watching those flying monkeys steal Dorothy away. Full Disclosure: They still give me the creeps.

Now it’s the creatures’ features in Washing DC that are keeping me awake. When did the culture of Professional Wresting and Jerry Springer TV extend itself into our political discourse? I’m not sure when it happened, but happened it has.

Okay, that’s probably enough venting on my part.   Let’s get down to what matters to investors.   At this writing, the probability of smooth passage of new health care legislation looks shaky at best.   If this effort fails in March, it will likely cast doubt on the market’s confidence in the ability of the administration and the congress to cooperate, regardless of party affiliation. This, then, casts doubt on the ability of congress to pass meaningful tax relief this year, and at this point, faith in tax relief is the biggest driver for the stock market.

I believe we’ve seen a significant increase in the US equity markets since the November election. The DOW was a nominal 18,000 during the first week of November and hit an intraday high of 21,000 on March 16th.   That’s a smoking 16.7% by my calculation. It’s also an indication that the new administration’s commitment to regulatory easing and the Federal Reserve’s projection for slow tightening are now priced into a market that was starved for hopeful signs from Washington for a long time.   If we get tax relief, we will probably see some additional upside, but if we don’t, we will more than likely see a significant pullback.

This, as you might guess, leads me to the conclusion for my investing of “stay the course”. Neither a potential market surge’ nor a possible pullback in the latter half of 2017 have me planning a significant change to my long-term strategy. As I’ve told you, I am a long-term investor and I believe in holding good quality and growth over time.   Steady as she goes, is where I’m living these days, even if the politicians and the markets aren’t.

Wow. Donald Trump has been President of the United States for less than three weeks and he has caused a stir that no one predicted. Okay, perhaps he predicted it, but none of us were taking him at his word by the date of election. As Brian Wesbury (Chief Economist for First Trust Advisors Chicago, IL and our speaker at the annual Lakeland Economic Forecast Breakfast) said, “you don’t necessarily take Donald Trump literally, but you must take him seriously”.

By the way, if you missed the Economic Forecast Breakfast and haven’t heard the podcast yet, go to Allen & Company’s website and find the presentation at:


Brian is interesting, funny and encouraging and it is certainly worth a listen. Laura Hawley introduces him beginning at the 19:00 mark of the pod cast.

So back to President Trump, what is he going to do next?   It is high entertainment for me to watch the Twitter blasts coming out of the White House and the subsequent wringing of hands in the media each day. It is more interesting than college basketball even…at least until March.

But don’t let my glib statement fool you, while it is interesting, captivating and yes even often entertaining to see the approach to governing this administration is taking, It is deadly serious business for all of us.

As an investor, I am encouraged by President Trump’s commitment to deregulation – the broad statement that departments must reduce the number of existing regulations by 2 to enact one new one is probably a good tone-setting approach to the beginning of this change in Washington. While not all regulations are bad, and many are essential, most of us would agree that the regulations stifling economic growth have swung to the excess level since 2008.

The old debates will remain: can we have economic growth fueled by fossil fuels, and maintain the quality of the environment?   Can we relax banking regulations to encourage lending and support business growth, but not create a lending bubble like we saw in 2008?

I will not try to sort out those arguments here because (a) it would take too many words and pages of carefully reasoned, unemotional thought-filled arguments, (b) at least 50% of you would get angry and stop reading me forever, (c) something closer to 100% of you will disagree with me anyway and find my arguments to be more emotional that factual, simply wrong in too many specifics, and generally ill-informed and unenlightened.   As I say: The debates will remain.

And while our country seems to be divided into camps that hurl the “you are more emotional than factual, simply wrong in too many specifics, and generally ill-informed and unenlightened” responses back and forth, there are a couple of things upon which the investor should focus.

While I was more pessimistic in 2016 regarding the equities markets than I have been in a long time, with the market up 10%+ since October, I am now cautiously about the equities market this year. Why do I feel this way?   Because the Administration’s commitment to cutting regulations, coupled with the commitment to tax cuts by both the Administration and Congress, has the potential to give freer rein to economic growth and could possibly move us above the anemic 1% to 2% growth range we have seen the past 8 years.

On the other side of the coin, I am fearful what a trade war could do to the US, as well as international, economies. The tendency to discuss international negotiations via Twitter is a concern, as is the stance on free trade and threatened tariffs.

But we will save international trade discussions for another day since the topic is too vast and I don’t understand all the nuances of cause and effect (like everybody else that pontificates on that particular subject).

But for now, let’s be cautiously optimistic and enjoy the day. If nothing else, it’s February in Florida and the highs are hitting 75 degrees F!

Okay, so the market was a little more positive than my prognosticated “meh”. I surely didn’t see a Trump victory in the making before the election. It’s further evidence to me that we just can’t trust our news sources anymore. I think most of us did have a measure of trust when we were younger, but perhaps we were simply naïve. It’s likely some of both, I imagine.

So what do we foresee now, with Republican majorities in both houses of congress, and having the presidency?   I anticipate a tax package reducing both individual rates and corporate rates. A return to 15% long term capital taxes may come about. There is some talk about eliminating the estate tax, but at an exemption of $5.45 Million (2016 data), there isn’t a lot of noise out there calling for action on this. The president-elect may have some personal interest in the matter, I suppose.

The annual gift exclusion for tax purposes is $14,000, so it can be a Merry Christmas for those grandkids if you are so inclined.   529 plans still allow front loading the plans with up to five years of gifting.

As to the recent stock market run-up, clearly investors expect to see a much more business-friendly and energy-friendly Washington in the next two to 4 years.   We can expect to see the previously mentioned lower taxes, reduced regulations on businesses, tax incentives for businesses staying in America, additional incentives to repatriate corporate profits that have gone overseas, less environmental restrictions on fossil fuel projects, and reduced criteria for both business and home lending.   All those things are good for growth, but a bit worrisome for those that remember the issues of 2008 when the first bad debt domino fell.

The trick is to not let the pendulum swing too far either way.   Ultra-stringent regulations and lending requirements stifle growth; the opposite can lead to credit and housing bubbles like we saw in 2008. It’s clear to all of us that voters decided the pendulum needed to reverse course.

As to The Affordable Care Act, or ObamaCare if you prefer, we will certainly see changes. My reading does not predict a wholesale repeal, however, without a significant replacement package. All indications are that any replacement legislation will make allowances for those “20 million” newly insured Americans, and for those who historically couldn’t get insurance due to pre-existing conditions.

So as we plan for the future and live in the present, the Christmas season is a time for me to remind myself to do just that. I remember so many happy times of my youth, and think of my parents and grandparents, other friends and family – it all passes so quickly, doesn’t it?

As this stage of life I celebrate the holidays with my three children and their families, all the while aware how fleeting time has become. So make sure you take the advice I give with a grain of salt, and then focus on celebrating the season with those you love.   Peace and blessings to you.