How often do you have questions about money and finances and there is no one that you feel comfortable enough with to talk to? Well, now you do! Meet Brian Carden, Financial Professional. Brian has 27 years of experience in dealing with the questions that come up in the lives of his own friends & clients.
Regardless of how much or how little you have, money seems to be on the minds of almost everyone these days: how to manage it, how to invest it, how to save it, how to protect it, and of course, how to spend it. All of these thoughts revolve around ways that we can be better with our hard earned dollars.
Every two weeks, Brian will be answering a different set of your questions regarding money, investing, saving, insurance, and a variety of other issues. So if you have a question about money and need straight forward answers, just “ask Brian”.
Send your questions, along with your first name, age, and zip code to: khorrell@nashvillelifestyles.com
Questions from you:
1. Are commodities the best place to put my money?
There is one major advantage to owning commodities over stocks and bonds. You can touch it, feel it, and see it. Gold and silver are two examples. Then again, so are corn, soybeans, and if you remember the movie “Trading Places”, frozen concentrated orange juice. The price of gold seems to get a lot of attention when the stock market declines, as its price has historically increased when this happens. So now, when it is in vogue, and the prices are close to a 30 year high, would you really want to own it now? I’ve always it was in the investor’s interest to “buy low and sell high”…but that’s just me.
2. I have credit card debt. Should I cash in a 401 K and pay it off or should I go to a bank and get a 7% interest rate loan to pay it off. I want to avoid paying those high interest rates.
If you’ve been contributing to a 401(k), just emotionally earmark those assets for retirement and forget about them. Let them continue to work for you and do what you originally intended. The only way you can get to that account is to terminate employment, or qualify for a hardship distribution, of which consumer debt is not a hardship. Let’s play this out. Assume you had a $10000 account balance one year ago. Now, with the market correction, you are down 40% to $6000. If and or when you leave your employer, you will be able to cash in the 401(k) account; you’re going to pay a 10% premature withdrawal penalty (if you’re younger than 59 ½), plus income taxes on the $6000. Using the assumption that you’re in a 20% tax bracket, that could be a total of $1800 in taxes and penalties. By not staying the course with the original intentions of the 401(k) account, you’ve just turned a $10000 investment into $4200, and you’ve guaranteed yourself you will never recoup what that $10000 would have grown to when you are ready to retire. (By the way, $6000 invested at an 8% average annual return for 25 years would have been worth $41000!) A better solution would be (1) stop funding the 401(k) and put those dollars towards the debt (2) if you’re getting a tax refund for 2008, throw those dollars there as well (3) if you have good credit, and also the discipline to stop spending, you can find 0% credit cards online. Just be sure to pay them off ASAP…the deferred interest can come back to bite you.
3. I’m shopping for a new financial planner and want to choose one who has a track record of good decisions. I keep asking advisors to give me their composite rates of return and they won’t. Why?
There is a huge misnomer in our industry and that is the belief that “my financial advisor manages my money”. Money managers get paid to manage money. My belief is that a prudent financial advisor’s true role is to (1) create and implement the financial planning process on behalf of their clients (2) manage the expectations and emotions of the client on an ongoing basis and (3) choose the most prudent money managers that will meet the criteria set by the advisor and the client. What do you want your financial planner to do: get you the highest return possible or help you reach all of your financial needs, wants, and desires? You could get the best return in the world, and then find yourself disabled for life by a drunk driver with no car insurance. A 25% average annual return on your portfolio won’t help recover that economic loss. In spite of the best efforts of the best money managers in the country, most equity investors were down somewhere between 30-50% last year. If your advisor is more focused on returns than on the overall process, then you should be shopping for a new advisor.
4. I just got divorced and got to keep my 4-carat diamond engagement ring as part of the settlement. Should I sell the diamond and invest it in stocks or should I just keep the diamond. I can see my ex-husband’s reflection in it so I need an answer soon.
4 carats, wow! Well, love is grand…divorce is several hundred grand…If you are seeing his reflection, that’s obviously not a good sign and you’re probably feeling the negative energy wearing it around on your “other hand”. My first thought is congratulations to you. You are thinking prudently as to using the ring’s value as an asset to use for your financial future, which is a very good thing. Get the ring appraised, find reputable diamond brokers, and see what the diamond market will offer based on the current market and diamond’s quality. The “Rule of 72” says that what ever interest rate divided into the number 72 will equal the number of years that a dollar amount will double. $50000 at a 7% average annual return will be worth $100000 in 10 years, $200000 in 20 years, $300,000 in 30 years, and so on.
About Brian
Brian Carden is a Financial Professional with Peachtree Planning of Tennessee, LLC, and is located in Brentwood. Brian is a part of a 12 person team of professionals within Peachtree. Their practice focuses on the needs, wants, and dreams of individuals, entrepreneurs, and business owners.
Brian’s mantra is and will continue to be “If I can’t explain what we’re going to talk about on a 3 x 5 card, then we’re not going to talk about it.” He is a graduate of UT-Knoxville and has been published nationally on a variety of financial matters. He writes a monthly e-article on finances, life experiences, and family. To read his current article and to learn more about Brian, go to www.briancarden.com
Company Information and Disclaimer:
Brian E. Carden, Registered Representative and Financial Advisor, offers securities products and services through Park Avenue Securities, LLC (PAS), 5040 Roswell Road, Atlanta GA 30342
1-800-366-0839
Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York, N.Y.
Peachtree Planning of Tennessee, LLC is not an affiliate or subsidiary of PAS or Guardian.
PAS is a member FINRA/SIPC.
www.finra.org www.sipc.org
Neither Park Avenue Securities, Guardian, nor their representatives render legal or tax advice. Please consult with your attorney, accountant, and/or tax advisor for advice concerning your particular circumstances.
Brian E. Carden is securities licensed in TN, NY, NM, & LA and the material is strictly intended for individuals residing in those states. No offers may be made or accepted from any resident outside this specified state. Brian E. Carden is insurance licensed in TN, NY, NM, & LA.
The information on this site is intended for the residents of Tennessee. The financial representatives of Peachtree Planning of TN, LLC, are not licensed to sell insurance in all 50 states. To find out if an agent is licensed in your state, please contact Darrell Dawes, General Agent at 615-376-8300.
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