Retiring Soon? Do You Have all Your Questions Answered?

Written by on November 4, 2011 in broken arrow, Certified Financial Planner, CFP, fee based, fee only, Fee Only Financial Planner, Financial Planning, Investing, Retirement Planning, Tax Planning, Tulsa - No Comments

If you are looking at retiring soon, do you have the answers to the questions to adequately prepare for this time in your life?  I have listed below and also included in the video typical questions I help clients answer.  If you have these questions, you may want to consider seeking out a financial planning professional.

  • Will I outlive my retirement savings?
  • What will I spend my time in retirement doing?
  • Will social security be available to me?
  • Should my annuity really be inside of an IRA account?
  • How much money do I really need to retire?
  • I want to retire early.  How much should I be saving now?
  • I am a teacher.  What pension payout option should I select?
  • What will be my cost of living in retirement?

Looking for a Planner? Want to know who we serve best?

Written by on November 2, 2011 in broken arrow, Enrolled Agent, fee based, fee only, financial planner, Investing, Oklahoma, Retirement Planning, Tax Planning - No Comments

I often get asked who would be a good fit for the services we offer here at Step By Step Financial.  Well just watch this short 2-minute video and you will find out.

Five Fundamentals of Fiscal Fitness

Written by on July 21, 2011 in fee based, fee only, Financial Planning, Home Buying, Investing, Oklahoma, Tax Planning, Tulsa - 1 Comment

Are you looking for a way to heat up your financial plan? Check out the fundamentals of fiscal fitness below.
1. Save 10% of gross income
2. Have proper cash and emergency reserves
3. Buy house you can actually afford (usually 2-2 1/2 times gross income)
4. Fully fund available retirement plans
-Take advantage of the “guaranteed” tax savings the government wants to give to you.
5. $0 Consumer and Credit Debt

Services Offered By Step By Step Financial

Written by on February 8, 2011 in Uncategorized - No Comments

I often get asked to give a brief summary of the services I offer here at SBS.  With that in mind, I have written the following blog post.  Enjoy and please comment!

At this time, we have three predominant services we offer to individuals and businesses:

1.  Fee-Only Financial Planning Retainer Service for Pre-Retired Married Couples and Entrepreneurs

Step By Step Financial is a fee-only financial planning firm in the metro-Tulsa, OK area. What makes us different from many financial firms is that we offer professional, objective tax and financial planning services on a one-to-one personal level. We are an independent firm whose complete focus is on the client.

We work with a small number of individuals in order to best serve each one, remaining focused on the needs of our clients. The only compensation we receive is directly from our clients. We do not receive commissions, referral fees or third-part incentives. 

2.  Individual and Business Tax Planning and Preparation

Along with the holistic financial planning services we offer to our clients, Step By Step Financial, LLC also services the tax preparation needs of many individuals and businesses. Kevin Jacobs, CFP®, EA is enrolled to practice before the IRS.

The fees for tax preparation are very straightforward. We serve the needs of our tax preparation clients on an hourly basis. For individual clients, the hourly rate is $75/ hour for the first four hours and $37.50 for each additional hour after the initial four. For business returns, the hourly rate is $75/ hour. There is a minimum fee of $75 for all returns.  If you are looking for a second opinion on your individual or business return, we also offer that service at our standard business tax preparation rate.  There are no additional charges for e-filing or document preparation.

3.  401k Retirement Plan for Small (as few as one participant) to Medium-Sized Companies

If you are looking to start a 401k plan for your company or if you are not happy with your current provider, please contact me so we can discuss the benefits of a multiple employer plan.  Most small businesses do not know the liability they take on in offering a plan to their employees.  On top of that, the fees charged by most providers are astronomical for the small to medium-sized businesses.  You have nothing to lose by setting up an initial consultation for us to discuss your company’s retirement plan.

What makes a “fee-only advisor” different?

Written by on May 31, 2010 in Annuities, broken arrow, Economics, fee based, fee only, Financial Education, financial planner, Financial Planning, Investing, Oklahoma, Security, Tulsa - No Comments

I am frequently asked:  what is a “fee-only advisor” and why should I work with one?  First, a fee-only advisor’s compensation comes directly from the client.  The advisor does not receive any commissions or referral fees from selling financial products (such as annuities, insurance or investments).  A fee-only advisor may receive compensation from assets under management, retainer fees or an hourly rate.  I focus the majority of my business on retainer fees.

In contrast, a “fee-based” advisor receives compensation from both charging a fee for completing a financial plan and from commissions on the products recommended as part of the “implementation strategy.”  Many times the financial plan is offered at severe discount.  Their real profit comes from selling you the products they recommend.  Their belief is that by charging you a fee for their “objective” advice you are more likely to “implement” the strategies they recommend.

A commission-only advisor makes his compensation strictly from selling you financial products that have a “load” or commission attached to them.  In my humble opinion, I tend to trust “commission-only” advisors more then “fee-based” advisors because you know they are only getting paid from what you buy from them and they do not have any ulterior motive in offering you a “plan.”

I personally believe each of these advisors has a place in the financial service industry.  However, the main thing I ask from each one of them is to disclose to the client how they are going to get paid.  The main reason why you should work with a fee-only advisor is they can give you objective, unbiased financial advice free from the potential conflict of interest inherent in product sales.  Yes, the fee-only advisor is still selling to you, although the “product” he is selling is an education and trustworthy advice.

When it comes to your money follow this common sense rule:  “When you know how your advisor is getting paid you will know who he is really working for!”

You may find this article from Money Magazine interesting:  http://money.cnn.com/2007/09/27/pf/planner_advice.moneymag/index.htm

Taking Stock of the Dow

Written by on May 6, 2010 in Financial Education - No Comments

Today was an unprecedented day in the stock market.  At one point the Dow Jones was down nearly 1,000 points (I can’t believe I am even writing that number).

I want to stress that the best thing to do is to remain focused on the things you can control, i.e. your savings rate, your asset allocation, your debt-to-income ratio, etc.  You can not do anything about what the market does day to day,  but you can do something about those things mentioned above.  You are going to hear many “talking” heads on the radio and TV give various explanations for why things happened the way they did.  However, the real question is how these events are going to affect you and the ones you love.  We have a tendency to get lost in the stress of everyday life and we forget to make note of the blessings we have each day.

I am not telling you to be oblivious to what is going on in the world but that you need to work on the things you can do something about and let everything else take care of itself.  It is important you do not overreact to short-term market events.  During times like these it is important to remember the basics regarding your financial life:

  1. Live on less then you make
  2. Have $0 consumer debt
  3. Don’t buy more house then you can afford
  4. Pay as little in taxes as you are allowed
  5. Have proper cash and emergency reserves
  6. Save for the short-term and invest for the long-term
  7. Spend time with your family and those you love instead of watching the latest stock market charts.

As for the rest of it, take a deep breath and remember with me to control the things we can and let go of those things that are outside of our power.

Avoiding the Extremes

Written by on April 18, 2010 in Uncategorized - No Comments

I believe one of my greatest responsibilities is to help my clients avoid extremes.  It seems like there is a lot of “extreme” talk right now.  I hear it everywhere.  Regarding politics, this is either the worst time in American history (if you are a conservative) or this is the beginning of a new era of Enlightenment (if you are liberal).  I hear it with sports as well.  How many people said the last Super Bowl between the Saints and Colts was the best Super Bowl ever?  How many times did you hear reporters ask Coach K if he thought this year’s Duke team was the best ever?  How many people are already comparing LeBron James to the all-time greats of NBA history?  On the other hand, how many people would watch “Makeover:  Home Edition?”

The reason why I say this is to show you how all this “extreme” talk effects people’s view of their finances.  When people believe the investments they own will either go to one extreme or the other, then they will make an irrational decision not based on the facts, but based on fear or foolishness.  It is my job and the job of any Financial Advisor worth the fee you pay him to help you avoid the “extremes” regarding your financial life and financial decisions.  It is okay to be concerned about the future of the economy and to invest more conservatively or to feel a need to invest more aggressively because you think the market will go up.  However, it is not okay to go extreme!  The saying is true:  Do not put all your eggs in one basket.  The basket is your emotions and it is important to know the facts and to make decisions based on facts, not the latest idea conjured up by the talking head on TV or the “guru” you read about in the paper.

If you are looking for financial guidance, I encourage you to seek out a Financial Advisor that can help keep you from making “extreme” decisions about your money.  You do not want a “yes-man” who is only looking out for themselves but rather, you need to look for an advisor that will keep you and your emotions in mind, so you do not make inappropriate long-term financial decisions.

Revisiting Financial Security

Written by on April 5, 2010 in Economics, Financial Education, Investing, Motivational, Security, Tax Planning - No Comments

When I first started this blog, I wrote an entry about defining and achieving financial security.  As I talk to more and more people about their experiences over the last 18 months during what the popular culture has called the “Great Recession,” I am witnessing some common themes of concern:

1.  The stock market is up considerably since its low in March of 2009, but how do we know it won’t “crash” again tomorrow? We don’t know! It used to be common knowledge and belief that you knew you would have some ups and downs in your investments, but in the long run you would achieve profits by investing in market.  From the conversations I have had with many people, it seems like there is this general sense they are waiting for the “next shoe to drop.”  It reminds me of the weeks and months after 9-11 where I was glued to the cable news networks waiting to hear about the next terrorist attack.  I sense an underlying fear in most individuals and business owners.  They are waiting to see how everything works itself out.  The danger of this view is that you become a market timer and try to “guess” what your latest stock holdings and the economy as a whole will do.  The danger is you get so consumed with things you can’t do anything about and fail to make a difference in your life and the lives of those you care about the most.

2.  What will higher taxes do to my future plans? I have been hearing this one especially since the passing of the health reform bill.  There is a general confusion of what is and what is not in the legislation and I think people are skeptical of what may happen to their individual tax situation in the future.  For the clients I work with, I tell them there is one thing for sure:  their taxes will go up!  How much their taxes will go up we do not know yet.  I tell them it is important we continue to plan and make the best tax and financial planning decisions we can at the time with the information available to us.

3.  How do I know I have reached financial security? I hear this quite often.  An individual may also say, “how do I know I will not run out of money?”  These are important questions to address no matter what the economy and the stock market are doing.  Where many people fail in their quest to achieve financial security is they fail to define what financial security is for themselves and instead they allow the “talking-heads” on TV or the magazine covers to define it for them.  Until you define what is most important to you and lay out a plan to achieve it, you will never reach financial security.

So these are some of the concerns people have right now is these difficult times, however, with all the chaos it is important to remember you are in control of your situation more then you believe.  You need to control the things you can, such as how much you save, how much you spend and what you invest in and let everything else take care of itself.

Control the Things You Can

Written by on January 18, 2010 in Financial Education, Security - No Comments

“Control the Things You Can” was written by Tedd Oyler, a member of the Alliance of Cambridge Advisors who practices in Saugatuck, Michigan.  This article was originally published as the second part of a series on how to do a financial check-up.

The lament of the powerless goes something like this: “It doesn’t matter how hard I work–the bills just keep piling up; the stock market and the cost of living are killing me; the politicians are ruining everything.”  You may have had these, or similar, thoughts before.  This is sad, for it is unnecessary to feel like you have no control over your financial future.

Our information culture offers a range of financial data and “advice,” ostensibly to help you take control of your financial life.  Perhaps you listen to daily (or even hourly) market reports.
Perhaps you are concerned that the Fed is changing interest rates.
Perhaps you care about the pundits’ predictions as to what the economy will do over the next quarter, or year, as if what they think matters.  Perhaps you even read books on investing, and there are certainly enough of those.  If we take seriously the notion that we can do something about our financial health, and if we acknowledge that money is but a tool that we can learn to master, then we are ready to look at what things we CAN control in our financial lives.

Read more…

Teaching Kids About Money

Written by on January 14, 2010 in Kids and Money - No Comments

This post was written by Virginia Nolen, a homeschooling mother, wife and occasional blogger.

While so many of us adults are struggling to learn to manage money and finance our lives, we often forget to make sure our children are receiving a proper financial education. If we want our kids to avoid the same pitfalls and traps we’ve experienced, we have to make sure we’re giving them the tools they need to succeed. Fortunately, we can learn alongside them and anything that leads to dinner conversation rising above the level of “Are we raising a cow, dear? Do you think our daughter could chew with her mouth closed tonight?” is a positive step in my book!

The first consideration is the age of the children in question.  It’s never too late (or too early) to start, but the sooner the better.  Kevin recommends the book Why Smart People Do Stupid Things With Money by Bert Whitehead for his clients, and there’s an excellent section within the Financial Life Cycle chapter dealing specifically with youth.  Bert Whitehead lays out a chart separating childhood into three stages:  early childhood, middle childhood and the teen years.  I won’t go into futher detail (read the book!) but I want to elaborate on his ideas.  I think about those years somewhat more concretely  (having children in the early childhood stage myself).  In addition to his very good suggestions for topics to be covered at those ages, I add the following general concepts for each age group:  in early childhood, the focus should be on the definition of money and it’s mathematical properties.  In middle childhood, the focus should be on the function of money and the variety of accumulatory functions it has.  In the teen years a focus on the consumer value of money (I’d like them to have a good idea of how much those fancy jeans cost) as well as the far more important ability of assigning a value to consumer products.  That teen year focus sounds redundant, but I assure you it is not.  The grocery store says that apples are worth $1.99 a pound while out of season, $1.25 a pound while in season but am I really willing to pay that much for apples in the first place?  Would my money be better spent buying bananas at $0.40 a pound so that I have money to buy yogurt with?  I’m starting to get hungry talking of food and about to go on a rant about the cost of fresh produce so let’s move on, shall we?

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