Your Money Multiplier Series Recap | Series 2.9 - Enjoy More 30s: Family Finance

Episode 9

Your Money Multiplier Series Recap | Series 2.9

Published on: 10th May, 2021

A quick review of all 8 Your Money Multiplier Episodes to help you take positive action.

  • Plan what you want to do with bonuses ahead of time (01:38)
  • Segment your vacation specific money (02:36)
  • Umbrella policy: insuring against the catastrophic (03:47)
  • 36% ratio: a simple budgeting approach (04:31)
  • Uncertainty tends to drive volatility in the market (06:21)
  • Three legal docs for your family's protection (07:08)
  • Turn your variable income into a systematic paycheck (07:56)
  • Restricted stock units, stock options, stock purchase plans (09:20)

Quote for the episode: "If we take even positive action on one of these eight relevant episode topics, you're better than you were before. And you should feel proud if you do that."

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcript
Voiceover Audio:

Welcome to the Enjoy More 30s: Family Finance

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podcast, the only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out and distract our focus

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from simply enjoying life.

Joseph Okaly:

Welcome to the Enjoy More 30s: Family Finance

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podcast. This is our series two, "Your Money Multiplier" series

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recap. We really covered a lot so far this season- from

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bonuses, to stock options, to standardizing a regular income,

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to even a five minute cash flow calculation. So there's really a

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lot of valuable, actionable information. But at the same

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time, it's kind of easy to be overwhelmed by it if we let it.

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If we take even positive action on one of these eight relevant

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episode topics, you're better than you were before. And you

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should feel proud if you do that. We also want to make sure

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we're remembering the goal; remove anxiety and financial

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worry so we can focus our energy on what matters most- enjoying

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more living with family and friends. Get your legal

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documents out of the way- less worry. Know you're saving what

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you should be every month- less worry. So be proud of these

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steps as you take them. You're making life more enjoyable than

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for you, and by a natural consequence, for your loved ones

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as well. It's not just for yourself- if you get to spend

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more time with your kids, that makes your kids happy too.

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Lastly, stay tuned to the end, as we're going to be releasing

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the focus of the next series to come which takes us in kind of a

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different direction. And I'm really excited to share that

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with you too.

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So without further ado, get together with your spouse, and

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let's start reviewing. Number one- bonuses aren't free money.

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So the first most important thing to take from this episode

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is that it kind of borrows the title "Bonuses Are Not Free

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Money", you need to plan for what you want to do with the

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funds ahead of time. The second thing to take from this episode

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is if you do treat it as free money and spend it, you're

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actually hurting yourself in two distinct ways. One is obvious-

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you have less saved. But two- you're also getting accustomed

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to living on more, which means now we also have to replace more

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long term. The third thing to take from this episode is you do

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not have to save all of it as part of your plan. Any portion

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benefits you in those same two ways that we just covered. Any

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portion that you save, obviously, you'll have bigger

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accounts down the road, and two, you're accustomed to living on

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less because of that, so there's less to replace long term.

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The second episode we covered was vacation accounts, it was

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called "Live It Up! Vacation Accounts." The first thing that

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you should be taking from this episode is segmenting your

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vacation specific money can give you a much higher likelihood of

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having and taking that vacation you otherwise would maybe not

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have taken. The second thing to take from this episode is you

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have different places you can save every month to accomplish

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this. The bank account option is very easy and straightforward.

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Just push money every month to a bank account, and that's your

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vacation specific bank account. The other option, though, is if

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you have a general investment account that is already built up

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to some degree, you can instead save this monthly vacation

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amount into that general investment account. And saving

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the funds here, the additional potential advantage is if you

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wind up having enough money on the side anyway to cover the

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vacation, now there's more in the investment account than

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there otherwise would be. And now this money can build up for

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a bigger vacation, a house, or just earlier retirement,

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whatever the goal might be. But you're putting yourself in a

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position to potentially have more saved for yourself long

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term.

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The third episode we covered was called "Just Get An Umbrella

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Policy Already". The first thing to recognize from this episode,

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excuse me, is that your standard coverage that you have from a

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liability perspective, so if people sue you resulting from an

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auto or home related lawsuit, may not be enough to cover what

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you need. The second point though is, thankfully, it's very

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easy and very cost effective to double or even triple this

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coverage to better protect you. So remember the general

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protection mindset. We want to make sure we're always insuring

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against the catastrophic, which could derail everything you have

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worked for. That's what we want to at least at a minimum make

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sure that we're protecting.

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The fourth episode we covered was "36%: The Golden Cash Flow

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Ratio". This is probably my favorite episode this season

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because it is so easy for anybody to incorporate and take

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some level of positive action off of. The first point that you

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want to remember here is to rethink the goal when it comes

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to scary words like budgeting. The goal is not to account for

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every single penny; it's to make sure you're saving a good amount

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towards yourself and keeping within your means. That's it-

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save toward yourself, keep within your means. That's a lot

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easier than accounting for where every single little penny goes

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month to month for an entire year, years on end- not a

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sustainable way of doing it. Second, use that 36% ratio that

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we provided to you to quickly get an idea of where you stand.

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Gross, or pre tax income, times 36%, minus those expenses that

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are specific to you, so things that you have but other people

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may not have. Again remember the 64% covers all the groceries,

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the taxes, all the stuff that you and everybody else in

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America has. And so when you get to that end, gross pre-tax

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income minus those expenses specific to you, minus any

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savings that you might be making, you're done and you have

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a starting point. You have an amount where you feel like okay,

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this is probably what most families should have as an

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excess, or what most families may be having a little bit of a

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deficit if my numbers aren't coming out, but you have

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something to go off of in about five minutes time. The last part

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of this is take action. Make a conscious choice to now do

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something with that extra savings, or to take actions to

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balance your cash flow. Saving at the expense of mounting

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credit card debt is kind of like swimming backwards. So we don't

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want to be doing that.

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Next episode, "Stocks Lead, Don't Follow". Anybody who has

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any kind of investment whatsoever could probably

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benefit from this episode here. We want to first understand that

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the stock market is a leading indicator. And that uncertainty

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is what often drives the vast majority of the volatile times.

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Less uncertainty usually means less volatility. Second, once

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you see the market went down or is going up, there's a good

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chance that it may be already too late to act. When there are

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a lot of waves again, we don't want to try jumping on a

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different boat. If you touch your investments and miss time

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when you take money out or go back in, you could very well

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wind up with significantly less than if you were patient and

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just did not touch it at all.

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Next episode, probably the least fun to go through, but the most

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important in many respects- "The Seven Year Task- Legal Docs".

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First thing that you want to remember from this episode here

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is if you don't have anything yet, forgive yourself, it's

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fine, you're definitely not alone. Second, there are three

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documents which are all provided together generally as part of

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the process- will, power of attorney, and living will with a

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medical directive. Third, take one small step of action to put

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yourself in motion towards this today. Remember the family

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member that would win an argument in getting custody of

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your children in a court, may likely not be the one you would

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actually consciously choose to raise your kids, if God forbid

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something happened to you.

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Next episode here, episode eight, "Make Irregular Income?

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Have Regular Pay". So for anybody out there that is an

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entrepreneur, or self employed, or gets a lot of variable

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income, this is really a great episode for you. First want to

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make sure that we acknowledge that irregular income is

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definitely more challenging. And it is a problem that needs to be

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handled a little bit differently than people that get regular pay

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month after month. How we handle this is we set up two buckets.

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One, you have your all income bucket- receives all the income

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from the various income accounts, commissions, bonuses,

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what that might be. So that's bucket one. And then this bucket

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pushes money every month to your spending bucket, or bucket two.

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The same exact amount comes every month to handle all those

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groceries, cell phone, mortgage, all those things that are

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essentially the same every month that you need to do. The last

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part of this is make sure you just take enough time to

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calculate how much you actually need to live on each month, so

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that you can obviously set the transfer up accordingly to be

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able to match what your monthly expenses might be. Last part of

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this process, make sure to look regularly, either quarterly or

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annually, for the amount that may be building up in your all

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income account to hopefully invest a sizeable portion

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towards yourself, but also on any other specific goals or

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expense items that you might have.

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This brings us to our last and definitely most confusing

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episode, or confusing topic overall, and that was "Stock

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Option Mayhem!". These things are confusing for everyone,

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definitely not just you. The two main elements that we want to

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remember whether you have RSUs, or stock options, or stock

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purchase plans, is that you need to make a decision when it comes

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to taxes and concentration. Taxes should be planned for.

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RSUs, restricted stock, will automatically be taxed upon

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vesting. Stock options and purchase plans, you have more

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control on when the tax is realized. The concentration

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element- RSUs are easier to emotionally diversify out of

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because they force you to realize the tax upon vesting.

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Selling isn't tax unfriendly after that, they're already

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fully taxable. So you might as well sell out of those, and

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reinvest into something that's a little bit more spread out and

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diversified. The other two can be more tempting to hold on to

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much longer, the stock options and the stock purchase plan. But

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always remember, you are paying tax on some of the gain whenever

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it may occur, you are still keeping most of it. Individual

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companies always pose a real risk tied to how that one

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company does or is perceived to do. Example that we use in the

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episode- if a CEO has a personal scandal, that company has its

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stock go down, despite really not being too different than it

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was yesterday than it is today. So always something to keep in

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mind.

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And there you have it, take some time to review all of these

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important areas. And if you can make one positive change, then

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you're one step farther along in having life be more enjoyable to

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you. If you can absorb and implement all these items,

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that's fantastic. I am so happy to be able to provide this to

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you. One more person that's able to provide more for themselves,

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add more enjoyment to their life, I'm perfectly good with

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that. It is overwhelming, though, if you have questions or

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you just want someone to help get all this stuff in order for

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you so you know exactly where you're going, what path you're

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on- head on over to our website at www . enjoy more 30s .com.

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That's enjoy more three zero s .com. And click the 'Ask Joe' to

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connect and we'd be happy to help in any way that we can.

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Overall, as always, thanks for tuning in going through the end

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of the series here with us. If you enjoyed this episode, please

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make sure to click follow and review us on Apple podcasts or

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wherever you listen. There are literally millions of young

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American families out there, I'm trying to reach and help just

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like you. Finally, as promised, I want to make sure I announced

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the topic for the next series, or the focus of the next series.

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The next series is going to be entitled, "Your Parent's Money

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Mindset". So this is something that is very well in line to

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affect you down the road, even though you may not even know it.

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We're going to help you bridge that gap when it comes to money

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and the conversations around it with your parents. How to make

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sure that they're taken care of, their health care and long term

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care concerns, how inheriting assets can affect you, the taxes

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and the responsibilities that come with it. There are a lot of

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really great topics in an area, if it's not properly under

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control, can cause huge issues for you and for them, which

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definitely makes life way less enjoyable. There's just so much

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out there that could impact them. And it's going to hit you

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one way or another if there is a problem, so you might as well be

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educated on it ahead of time. And if you can talk to them

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ahead of time, which we're going to cover and try to help you

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bring up better ways to have these conversations, then this

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is something that you can head off ahead of time for yourself,

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but also possibly improve the situation of your parents ahead

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of time as well. So really excited to go through that

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because it's something that is, again, not really discussed

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enough when it comes to the younger generation of what's

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coming their way, or just even how to handle it if they know

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it's coming. So as always, thanks so much for joining me

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today. I'm really, really looking forward to connecting

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with you again soon in this upcoming "Your Parent's Money

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Mindset" series to come.

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The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal, tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first. Joseph is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS securities Inc and TFS advisory services, an SEC

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registered investment advisor member FINRA/SIPC.

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About the Podcast

Enjoy More 30s: Family Finance
Family Finance for Young Professionals.
Young families receive little to no personal finance help. We all grow up to have jobs and money, yet our education system focuses on Shakespeare and Algebra. Even professional advice can be hard to come by, with the majority of the industry chasing retirees and existing wealth.

Joe Okaly's podcast is aiming to change this, providing personal financial advice geared specifically to professionals with young families. This podcast is dedicated to making life more enjoyable for young families, by hitting on the financial topics that tend to weigh on us, stress us out, and distract our focus from simply enjoying life.

Joseph P Okaly is a CFP Certified Financial Advisor who fits directly in with who this podcast is focused on - a young professional with a family. With over a decade of experience as an advisor, there is passion and knowledge to make a difference.

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.