Daily Archives: August 28, 2020

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

Christina and Amon Browning, of Our Rich Journey, knew by their late 20s and early 30s that they wanted to retire early. While they reached financial independence in a relatively short amount of time they retired at ages 39 and 41 it required aggressive saving.

Living in the San Francisco Bay Area at the time, they had to navigate high costs of living. The couple also had to find ways to increase their income in order to save more, and reach financial independence on their timeline.

It took them about 10 years to reach their goal. At one point they were saving 70% of their income, the couple told personal finance expert Farnoosh Torabi on an episode of her podcast, So Money.

Their aggressive savings tactics are part of the reason they were able to reach financial independence in a short amount of time. Here are the three measures they took to make it happen.

"We didn't start saving 70% of our income overnight," Amon said on the podcast. Like most American families, they had expenses like car payments, a mortgage, and bills that kept them from saving a huge chunk of their income.

"Before we really got intentional about our saving and investing, we were investing and saving about 10 to 15% of our income," Amon said. "But when we got intentional about it ... we realized that there were a lot of things that we can start to save on."

It took them a little while to pare down their expenses and identify priorities. "We just tried to focus on getting 1% better," said Amon.

House hacking is a popular way to cut back on housing expenses and earn income, generally involving renting out your primary residence or another home to cover your housing costs. Christina and Amon used the method several times while living in California, and sometimes even made more than they spent.

One house-hacking mission involved buying a fixer-upper with a small down payment and updating it themselves. They then used the increased value and equity to buy other properties, and rented out the home on a home-sharing site. "Because we were able to make so much on Airbnb, it covered the cost of the mortgage on the house and the apartment, so we were able to live rent- and mortgage-free," Amon told Business Insider by email.

In another example, the couple rented a three-bedroom apartment, living in one room and renting the other two. "We rented each room out separately and used the money from the rented rooms to pay for the place," Amon said. They now live in Portugal with their two daughters.

Amon and Christina said that cutting down their expenses helped them to save more. "We stopped trying to keep up with the Joneses," Amon said. "We broke from the consumer culture."

One such expense was their luxury SUV. "At one point, we were driving a BMW X5," Amon said. In 2020, a new BMW X5 goes for about $59,000, according to the manufacturer's website. The couple decided to get rid of this cost, opting for a more affordable used car instead.

They replaced their daily driver with an $800 used minivan, Amon told Torabi.Without a car payment, and with no loan, the used minivan helped free up cash. "That was another huge area of savings," he said.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Here is the original post:

To retire before 45, a couple used 3 strategies to save 70% of their income - Business Insider - Business Insider

The financial independence, retire early (FIRE) movement was all the rage in 2018 and 2019, but the COVID-19 pandemic has changed the way we think about a lot of things. Has the upheaval in 2020 changed the desire to FIRE? And how might retirement plans be affected by the current situation?

5 min read

Photo by Getty Images

In recent years, the financial independence, retire early (FIRE) movement has caught the collective imagination of a subset of investors.

FIRE investors aim to save and invest enough to quit the rat race way before age 60 and focus on pursuits that provide meaning and fulfillment. Even if FIRE devotees continue to work or become entrepreneurs after early retirement, the idea is that its based on their choice, not on financial constraints.

But 2020 has been tough. Millions are out of work, the economy slipped into recession earlier this year, and concern is widespread about how long the stock market can continue its unprecedented run. How does a year like 2020 affect the FIRE movement, and what can investors do to protect their retirement plans in a pandemic?

One of the biggest aspects to reaching FIRE goals is investing. Many of those looking to achieve financial freedom have worked out a specific target net worth to obtain through investing, often using an indexing strategy.

Many in the FIRE community remain on track. Other than a somewhat-scary market drop in March, the stock market hasnt reflected that the underpinnings of the economy could be in trouble. In fact, the anonymous FIRE blogger A Purple Life recently wrote about hitting her FIRE number and moving forward with plans to retire this year.

But its not just about a stock market that continues to grow. Dara Luber, senior manager, retirement product at TDAmeritrade, pointed out that many in the FIRE community understand there are ups and downs to the market.

Most participants in the FIRE movement always had a plan, because this is something they know they want to do and they know how the market works, Luber said. Weve hit some volatility, but when youre planning for FIRE, you know thatll happen eventually and you plan for it.

So even if the current situation creates setbacks for some members of the FIRE community, many are equipped to move forward and keep working toward their goals. The current year hasnt been kind to many people, but for those who pursue FIRE, having a plan for volatility and being prepared can help them weather whatever 2020 throws at them next.

Sticking to the plan isnt always a straight line, however. In some cases, you might have to make some small pivots in your portfolio and in your spending.

First of all, in 2020 with the pandemic, people are naturally shifting where they spend their money, Luber explained. Eating out and traveling are budget items that have almost completely disappeared for many people.

With this change in spending, its possible to keep moving forward with FIRE plans, even during the pandemic.

For many, they were always going to save a portion of their income, Luber said. With changes to some of the biggest-ticket items, staying on track with FIRE might actually be a little easier. Youre stuck inside, what are you going to spend money on?

However, there are other pivots that might need to be made during difficult times. Although the stock market is doing well right now, Luber acknowledged that its not likely to last forever. Plus, the pandemic could lead to job loss, income reductions, and other challenges that could offset some of the forced spending cuts and result in FIRE setbacks.

No matter how well you think youre doing right now, Luber suggested three ways to potentially protect your portfolio during uncertain times so you have a better chance of staying on track for FIRE.

It may seem basic, but its an important part of making sure you stay on track for FIRE during 2020and even after you reach your financial independence goals.

Figure out your need to have and nice to have spending, Luber recommended. No matter what your age or stage of retirement, reviewing needs and wants can help you avoid problems later. Cover your needs and adjust spending on wants as necessary.

The key is to make those adjustments before youre forced to, especially during a year like 2020 when unexpected events (like a global pandemic) change the equation. Even if you havent been financially hit by current events, you dont know whats coming next. You probably dont need to cut everything unnecessary from your life, but Luber recommended reviewing your spending and making some changes.

Maybe you spend a little less on treats for yourself and bank the difference, she said. You still enjoy life, but maybe you dont spend quite as much so that you can better position yourself, just in case.

Another way to position your portfolio is to shift your asset allocation and use a bucket strategy.

Rather than keeping everything in stocks, the investor could consider if now might be a good time to sell a portion to get cash for the next couple of years, Luber said. It frees up some cash so you arent forced to sell during a crash.

Grant Sabatier, who reached millionaire status by age 30 and frequently writes about achieving FIRE through investing on his blog Millennial Money, suggested keeping any money you need in the next five years in cash.

Everyone has different comfort levels and risk tolerance, but it can make sense to protect at least some of your assets from immediate dangers related to economic stresses, while still leaving a portion of your portfolio in stocks to benefit from a potential recovery.

Finally, Luber recommended reviewing your investing plan and goals at least annually. This helps you identify small tweaks and pivots that can help you adjust to the landscape.

You dont know when life will throw you a curveball, whether its a change in life circumstances or a global pandemic, Luber said. You need to make sure your plan still makes sense for you. Although a good plan might not need major changes, its still smart to double-check and see if a course correction is in order.

Habits of the Financially Independent

4:00

Visit link:

Is the FIRE Movement Burning Out? Financial Independence, Retire Early in 2020 - The Ticker Tape

August25, 20205 min read

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Its official. Were in the golden work-from-home era. In tandem, were also in the golden era of financial independence for women. And what better time to discuss it than around the occasion of Indias 74th Independence Day.

It has been only six months since the corporate world deep-dived into the work-from-home routine, but its no longer the new normal. It is a way of life.

The COVID-19 situation might have thrown our lives out of gear, but it has opened up several opportunities especially for women across the country to take up jobs, and for companies who now have access to a larger candidate pool that is no longer hindered by geographical boundaries to hire seamlessly online.

So, for many women who were keen on a work-from-home role but never thought it would happen, its literally a dream come true. Not only has it opened up employment opportunities, it has also created sources of income for women whose domestic concerns have always overshadowed their career aspirations.

Around 70 per cent of women in India relocate after marriage and a significant portion of these migrate to tier II and tier III cities in the country where job opportunities are low, stemming the woman's career growth. Work-from-home jobs open up a world of opportunities for such women who already have the skills, qualifications, experience and drive to take up their careers again with gusto, and are waiting for the right window of opportunity to make that leap into their professional journey.

With the corporate world turning to a number of flexible working options, the ratio of women taking charge of their careers is also on the rise.

It is heartening to see that women no longer contemplate taking up work-from-home jobs on the basis of credibility and/or pay. They are more likely to opt for a flexible option today than ever before, thanks to top companies across industries world-wide opting for remote work for their employees.

Full-time roles are all being taken over by the work-from-home routine which is no longer frowned upon or seen as a low-productivity factor.

On the JobsForHer platform alone, in March there was a 30 per cent increase in work-from-home jobs, the period from April to July saw it increase to 62 per cent indicative of the positive trend.

And thats good news for everyone.

Back in the times before the coronavirus hit us, a work-from-home role meant that your pay scale would amount to half, if not less, than what youd earn in a full-time corporate job. So, before you jumped at an opportunity that allowed flexibility, youd weigh the pros and cons of taking up a job that you could do from home.

Today, however, with top companies hiring employees in full-time work-from-home positions, women are also open to exploring options that will give them the financial independence they crave.

Questions that used to plague a womans mindsuch as, how many hours can I dedicate to my job? Will I be able to break even with my monthly expenditure? Am I ready to redefine my salary, job security?are no longer an issue.

Times have changed and so have working preferences. You get to work without having to hustle between office and home, and you get paid well. Whether you are looking to start or restart your career, work-from-home is a great option. One can no longer underestimate the potential of a well-paying work-from-home job.

Research has shown that there is a spike in womens participation in contributing to family income after a crisis when they feel the crunch of having a sole breadwinner whose job is now uncertain. Women are thus encouraged to focus on their careers and become equal breadwinners, thereby increasing their financial independence.

The work-from-home concept is not just about earning money but also saving and creating wealth. Picture this. You work from the comfort of your home in a job which gives you satisfaction and financial freedom. It gives you an opportunity to save because, clearly, there is nowhere to spend all the money youve earned except on essentials. Limited travel. No schools. A ban on crowded spacesfrom theatres to malls and restaurants. A ban on get-togethers and high-profile weddings, festivities and celebrations. A curfew that allows you to get out of your house for just what you need, and get back at a particular time.

In short, its a good time for savings. Its a good time for women in the world to take stock of the situation and rise. Its a good time for women to start, restart and rise in their careers.

Go here to see the original:

The New Normal Is the Newest Way to Women's Financial Independence - Entrepreneur

Were all interested in the topic of lifespan. Whats the average lifespan of men and women? What factors influence lifespan? What can I expect for my own lifespan? Yet, you may also want to think about your healthspan that is, how long you will live in generally good health. How should you factor in your potential healthspan when creating your financial strategies?

To begin with, youll want to be aware of the gap between lifespan and healthspan. Consider this: The average healthy life expectancy in the U.S. is only 68.5 years, according to World Bank data cited in the 2020 Edward Jones/Age Wave Four Pillars of the New Retirement study. This means that, on average, Americans can expect to spend about 10 years in poor health, which, unfortunately, is more than in most other developed countries.

Of course, everyones situation is unique, and many variables are involved in the lifespan/healthspan comparison: differences in projected longevity between women and men, family health histories, environmental factors, and so on. And there are certainly plenty of people whose healthspans essentially match their lifespans that is, they enjoy healthy, busy lives right up until the end. Yet, even the possibility that you could face a decade or more of less-than-ideal health in your retirement years should be cause for concern. The health issue, by itself, is already worrisome, but the accompanying threat to financial independence is also on peoples minds. In fact, 72% of retirees say one of their biggest fears is becoming a burden on their families, according to the Four Pillars study.

So, given these concerns, here are a few moves to consider, possibly with the help of a financial professional:

If you could see into the future, youd know exactly where your lifespan intersected with your healthspan. But since this certainty is unattainable, youll want to be prepared for whatever comes your way.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Sean Payne, CFP can be reached at (562) 596-3722.

Please follow and like us:

The rest is here:

Can you afford the years beyond your healthspan? - Orange County Breeze

Parents in the UK are assigning their children paid chores from the age of five to teach them the value of money, research suggests.

While most parents about 28% first put their kids to work around the house between the ages of eight and 10, a fifth put kids as young as five to work, washing dishes and hoovering to earn their keep, a survey of 2,000 byVoucherCodes found.

On top of this, over a third (36%) encourage their kids to start saving between the ages of five and 10, while one in 10 (11%) even do it before this.

Over half (52%) of parents say teaching their children to be financially responsible is something they consider important, and nearly two in five (38%) do so in the hope their children will eventually become self-sufficient with their cash.

READ MORE:

Despite this, parents dont believe their children will be financially independent until the age of 21, whether its because they will be paying for driving lessons (55%) or supporting them through university (47%).

One in five parents even said theyre happy to pay for holidays for their over-18-year olds, while two in three (43%) pay for their food shop and a quarter (26%) pay their rent, the survey found.

When it comes to financial independence, more than two thirds (68%) think the most significant sign is earning your own money, and more than half (52%) cited opening your own bank account something they think children should do at 10.

This suggests todays children are under high pressure to be financially savvy at a young age, VoucherCodes said.

READ MORE:

Dads have a slightly more relaxed approach to their childrens financial education, with just two in five (39%) thinking its important to discuss financial responsibility with their kids, compared to almost half (47%) of mums, the survey found.

Teaching children about money from an early age can be crucial to setting them up for a financially responsible life, and our research shows the majority of parents agree, said Anita Naik, lifestyle editor at VoucherCodes.

Whats interesting is that some families start this conversation from a very young age in some cases with kids as young as five.

Whether thats asking them to do the dishes or wash the car, its clear many children are learning the value of money early, which can have really positive impacts later in life when it comes to budgeting and managing their spending.

View post:

Parents assign five-year-olds paid chores to teach them the 'value of money' - Yahoo Finance UK

JERSEY CITY, N.J., Aug. 27, 2020 /PRNewswire/ --Advisor Group, the nation's largest network of independent wealth management firms, and network member firm Royal Alliance Associates today announced that Financial Foundation Services, an East Brunswick, N.J.-based wealth management firm with approximately $120 million in total client assets, has joined Royal Alliance. Financial Foundation Services, founded by veteran financial professional Robert Rafano, has affiliated with Royal Alliance through one of its top independent producer groups, Affiliated Advisors, which is headed by Founder and President Rita Robbins, a pioneering leader in the Super-OSJ space and a well-known wealth management industry veteran.

In addition to Royal Alliance, Advisor Group also includes FSC Securities Corporation, KMS Financial Services, SagePoint Financial, Securities America, Securities Service Network, Triad Advisors and Woodbury Financial.

A Certified Financial Planner and Chartered Retirement Planning Counselor, Mr. Rafano has been providing financial services to clients in central New Jersey since 2002. He specializes in holistic financial planning, including management of savings and debt, wealth management, insurance and tax planning.

Mr. Rafano said, "I am very pleased to be part of the Royal Alliance and Affiliated Advisors team, and to have the support of Advisor Group, as well. The technology stack and service offerings that Advisor Group, Royal Alliance and Affiliated Advisors bring to the table are second to none in the industry, and will provide the robust support and infrastructure to give my clients the boutique, one-on-one service experience they expect from Financial Foundation Services. This move allows me the freedom to run my business as I choose, while providing top-flight support and infrastructure I need. With so much change occurring in the wealth management industry, it's truly reassuring to know that I have such strong partners to rely on in the decades to come."

Founded in 1994, Affiliated Advisors supports 85 financial professionals with total assets of more than $2.4 billion in 45 branch offices across eight states.

Ms. Robbins said, "It is with great pleasure and pride that I welcome Financial Foundation Services and Robert Rafano to Affiliated Advisors. From the beginning, our mission has been to help advisors build the businesses of their dreams while serving their clients with integrity, creativity and compassion. In our experience, a great practice's growth trajectory is limited only by the financial professional's aspirations. Robert has the drive and work ethic to continue to expand his business well into the future, and we will be there to empower him every step of the way."

Dmitry Goldin, President and CEO of Royal Alliance, said, "Robert Rafano is a tremendous addition to the team at Royal Alliance, Advisor Group and Affiliated Advisors. We look forward to supporting him as he continues to move ahead in building his business and providing exceptional service to his clients."

Jamie Price, President and CEO of Advisor Group, concluded, "On behalf of the entire Advisor Group network, I congratulate Royal Alliance and Affiliated Advisors for bringing aboard a financial professional with such a long, successful career as Robert Rafano. We are in the business of using our scale and resources to provide financial professionals with the value-added platforms, services and support they need to grow, and we are honored that Mr. Rafano is placing his trust in us to help him shape the future of his practice. As we move forward in collaboration, we will be in his corner as we are for all our financial professionals."

About Royal Alliance AssociatesRoyal Alliance Associates, Inc. is part of Advisor Group, the nation's largest network of independent wealth management firms, and a Registered Investment Advisor, member FINRA and SIPC. Royal Alliance has more than 3,600 affiliated independent financial advisors and is headquartered in Jersey City. It was founded in 1969 and employs a client driven approach focused on meeting the unique demands of businesses and individuals. For more information visit http://www.royalalliance.com.

About Advisor GroupAdvisor Group, Inc. is the nation's largest network of independent wealth management firms, serving approximately 11,100 financial professionals and overseeing over $450 billion in client assets. The firm is mission-driven to support the strategic role that advisors can play in the lives of their clients. Cultivating a spirit of entrepreneurship and independence, Advisor Group champions the enduring value of financial professionals and is committed to being in their corner every step of the way. For more information visit https://www.advisorgroup.com.

Securities and investment advisory services are offered through Advisor Group, Inc. subsidiaries, FSC Securities Corporation, KMS Financial Services, Inc., Royal Alliance Associates, Inc., SagePoint Financial, Inc., Triad Advisors, LLC, and Woodbury Financial Services, Inc., broker-dealers, registered investment advisers, and members of FINRA and SIPC. Securities services are offered through Investacorp, Inc., Securities America, Inc., and Securities Service Network, broker-dealers and members of FINRA and SIPC. Advisory services are offered through Arbor Point Advisors, LLC, Investacorp Advisory Services, Inc., Ladenburg Thalmann Asset Management, Inc., Securities America Advisors, Inc., SSN Advisory, Inc., and Triad Hybrid Solutions, LLC, registered investment advisers. Advisor Group, Inc. is a holding company. Advisor Group, Inc. is separately owned and other entities and / or marketing names, products or services referenced here are independent of Advisor Group, Inc. 20 E. Thomas Rd., Ste. 2000, Phoenix, AZ, 85012. 866.481.0379

Media InquiriesJoseph Kuo / Chris ClemensHaven Tower Group424 317 4851 or 424 317 4854[emailprotected]or [emailprotected]

SOURCE Advisor Group

https://www.advisorgroup.com

The rest is here:

Advisor Group And Royal Alliance Announce Recruitment Of Financial Foundation Services To Super-OSJ Affiliated Advisors - PRNewswire

Dr. Shigeaki Hinohara had an extraordinary life for many reasons. For starters, the Japanese physician and longevity expert lived until the age of 105.

When he died, in 2017, Hinohara was chairman emeritus of St. Luke's International University and honorary president of St. Luke's International Hospital, both in Tokyo.

Perhaps best known for his book, "Living Long, Living Good,"Hinohara offered advice that helped make Japan the world leader in longevity. Some were fairly intuitive points, while others were less obvious:

The average retirement age, at least in the U.S., has always hovered at around 65. And, in recent years, many have embraced the FIRE movement (Financial Independence, Retire Early).

ButHinohara viewed things differently. "There is no need to ever retire, but if one must, it should be a lot later than 65," he said in a 2009 interview with The Japan Times. "The current retirement age was set at 65 half a century ago, when the average life expectancy in Japan was 68 years and only 125 Japanese were over 100 years old."

Today, he explained, people are living a lot longer. The life expectancy for U.S. in 2020, for example, is78.93 years, a 0.08% increase from 2019. Therefore, we should be retiring much later in life, too.

Hinohara certainly practiced what he preached:Until a few months before his death, he continued to treat patients, kept an appointment book with space for five more years, and worked up to 18 hours a day.

Hinohara emphasized the importance of regular exercise. "I take two stairs at a time, to get my muscles moving," he said.

Additionally, Hinoharacarried his own packages and luggage, and gave 150 lectures a year, usually speaking for 60 to 90 minutes all done standing, he said, "to stay strong."

He also pointed out that people who live an extremely long life have a commonality: They aren't overweight. Indeed, obesity is widely considered one of the mostsignificant risk factorsfor increased morbidity and mortality.

Hinohara's diet was spartan: "For breakfast, I drink coffee, a glass of milk and some orange juice with a tablespoon of olive oil in it." (Studies have found that olive oil offers numerous health benefits, such as keeping your arteries clean and lowering heart disease risk.)

"Lunch ismilk and a few cookies, or nothing when I am too busy to eat," he continued. "I never get hungry because I focus on my work. Dinner is veggies, a bit of fish and rice, and, twice a week, 100 grams of lean meat."

According to Hinohara, not having a full schedule is a surefire way to age faster and die sooner. However, it's important to stay busy not just for the sakeof staying busy, but to be active in activities that help serve a purpose. (The logic is that one can be busy, yet still feel empty and idle on the inside.)

Hinohara found his purpose early on, after his mother's life was saved by the family's doctor.

Janit Kawaguchi, ajournalist who considered Hinohara a mentor,said, "He believed that life is all about contribution, so he had this incredible drive to help people, to wake up early in the morning and do something wonderful for other people. This is what was driving him and what kept him living."

"It's wonderful to live long," Hinohara said in the interview. "Until one is 60 years old, it is easy to work for one's family and to achieve one's goals. But in our later years, we should strive to contribute to society. Since the age of 65, I have worked as a volunteer. I still put in 18 hours seven days a week and love every minute of it."

While he clearly promoted exercise and nutrition as pathways to a longer and healthier life, Hinohara simultaneously maintained that we need not be obsessed with restricting our behaviors.

"We all remember how, as children, when we were having fun, we would forget to eat or sleep," he often said. "I believe we can keep that attitude as adults it is best not to tire the body with too many rules."

Richard Overton, one of America's oldest-surviving World War II veterans, would havemostlikely agreed.Right up until his death at age 112, the supercentenarian smoked cigars, drank whisky and ate fried food and ice cream on a daily basis.

Hinohara might not have approved of Overton's diet, but, to be fair, Overton did credit his longevity to maintaining a "stress-free life and keeping busy."

Hinohara cautioned against always taking the doctor's advice. When a test or surgery is recommended, he advised, "ask whether the doctor would suggest that his or her spouse or children go through such a procedure."

Hinohara insisted that science alone can't help people. It "lumps us all together, but illness is individual. Each person is unique, and diseases are connected to their hearts," he said. "To know the illness and help people, we need liberal and visual arts, not just medical ones."

In fact, Hinohara made sure that St. Luke's catered to the basic need of patients: "To have fun." The hospital provided music, animal therapy and art classes.

"Pain is mysterious, and having fun is the best way to forget it," he said. "If a child has a toothache, and you start playing a game together, he or she immediately forgets the pain."

According to The New York Times, toward the end of his life, Hinohara was unable to eat, but refused a feeding tube. He was discharged and died months later at home.

Instead of trying to fight death, Hinohara found peace in where he was through art. In fact, he credited his contentment and outlook toward life to a poem by Robert Browning, called"Abt Vogler" especially these lines:

There shall never be one lost good! What was, shall live as before;The evil is null, is nought, is silence implying sound;What was good shall be good, with, for evil, so much good more;On the earth the broken arcs; in the heaven a perfect round.

"My father used to read it to me," Hinohara recalled. "It encourages us to make big art, not small scribbles. It says to try to draw a circle so huge that there is no way we can finish it while we are alive. All we see is an arch; the rest is beyond our vision, but it is there in the distance."

Tom Popomaronisis a leadership researcher and vice president of innovation atMassive Alliance.His work has been featured in Forbes, Fast Company, Inc., and The Washington Post. In 2014, Tom was named one of the "40 Under 40" by the Baltimore Business Journal. Follow him on LinkedIn.

Don't miss:

See the rest here:

Japanese doctor who lived to 105his spartan diet, views on retirement, and other rare longevity tips - CNBC

Robinhood, the investing app that pioneered free trading, saw record trades in June. But what's good news for the trading app is likely not good news for a user's long-term financial health, investing experts say.

Time and again, research has shown that the best way for the average person to accrue wealth is to invest for the long-term: Routinely contributing money to passive funds that track an index, like the S&P 500, shows historically better results than stock picking. Investing in a mutual fund or ETF spreads out risk; betting it all on a handful of stocks does not.

Of course, apps like Robinhood don't force users to trade, and they can be used responsibly. But critics say Robinhood gamifies investing, sending regularpush notifications to users about their individual stock positions. When a user makes their first trade, digital confetti "falls" in the app; it also includes a "watch list" of stocks for users to track.Those behavioral nudges can encourage investors to act with only their short-term interests in mind,Erika Safran, certified financial planner, tells CNBC Make It.A spokespersonfor Robinhood said the app's features "are meant for informational purposes only, and are not intended to serve as a recommendation to buy or sell any security."

Robinhood's main pitch is that users can make unlimited free trades: It bills its product as "investing for everyone." This encourages some to buy and trade stocks daily, says Safran, who owns New York-based Safran Wealth Advisors, a tactic that financial planners almost always warn against. She likens these trading apps to gambling apps, rather than investing apps.

"I don't see it as a serious vehicle for building wealth," Safran says. "A better way to build wealth is to recognize that investing is not a short-term gain. You need to have time for your investments to grow."

Day trading has always appealed to a certain type of investor, but Safran says apps like Robinhood are different because the barrier to entry is so low: Even novice investors can trade with one click, and they don't need a ton of money to get started, which has historically been an obstacle for some. In fact, halfof Robinhood's 13 million users had never invested before signing up.

"We believe that broader participation in the markets is more democratic and can bring opportunities to many," a Robinhood spokesperson tells CNBC Make It. "Those who dismiss retail investors as 'gamblers' or 'gamers' perpetuate the myth that investing is only for the wealthy and highly educated."

There's a level of sexiness, it's appealing, people find it exciting. Psychologically, it doesn't feel like real money.

Erika Safran

Safran Wealth Advisors

"There's a level of sexiness. It's appealing, people find it exciting," Safran says. "Psychologically, it doesn't feel like real money."

But it is real, and Robinhood still makes money off of its users, even if the company doesn't charge for each trade.

While the U.S. is facing record-high unemployment, the stock market is currently riding high, and some see trading as a way to make money. Robinhood's top three days based on trading volume all occurred in June 2020,and the app added 3 million accounts in the first four months of 2020, according to a spokesperson; TD Ameritrade, a similar investing service, is also reporting record trades.

But day trading as an investment strategy often has disastrous results, says Safran. Even the most seasoned brokers on Wall Street can't beat the market consistently. It's highly unlikely the average investor, home and bored from social distancing, will be able to. The ease of Robinhood's app may encourage users to make bad decisions.

The Robinhood spokesperson added that the vast majority of users are not day traders. "Most of our customers use a buy and hold strategy with their investments," they said.

The company is so successful in part because of how easy the interface is to use, Michael C. Whitman, a North Carolina-based certified financial planner, tells CNBC Make It. But ease-of-use doesn't necessarily translate to easily understanding what you're trading, particularly when you are a novice.

"These are super dangerous, because trading securities can be complex," says Whitman. "You should really weigh pros and cons before blindly purchasing stocks."

And it's not just stocks.The app provides its largely novice base access to trading more complicated instruments like options. An options contractgives the holder the right to buy or sell an underlying security at a specific price until a certain date, and Robinhood users traded them at the highest pace of any retail brokerage, according to a recent analysis from the New York Times. The app encourages users looking at their account settings to "step up with free options trading."

Traders use options contracts to speculate.Robinhood, like other brokerage firms, requires customers who want to trade options to disclose their investment experience and knowledge, among other information. They are also required to acknowledge the risk they are taking on, says a spokesperson.

An extreme example of the danger of trading options occurred earlier this year, when Alex Kearns, a 20-year-old college student in Nebraska,diedby suicide after his Robinhood account through which he was trading options appeared to show a balance of negative $730,165. Suicide is the result of many contributing factors, not a single event, but his family said Kearns, who was a novice investor, may have misunderstood his financial statement.

In the wake of his death, Robinhoodannounced it would make changes to its platform, including making it more difficult to access options trading. Other users have reported not understanding what they were getting into.

"During one of my conversations with a probono client, she asked me what the difference is between a swing trade and a day trade," says Safran, noting the client, who used Robinhood, had just $700 invested, total. "It wasn't important that she knew what the terms meant, most people don't. What was dangerous was that it was on her radar."

Trading isn't necessarily bad if you already have a strong financial foundation:You've paid off debt, built up your emergency savings, and you are investing consistently in a diversified portfolio of stocks and bonds with a long-term outlook. Most important, you needtounderstand the risks involved and do the research before you invest extra cash in individual stocks. (Robinhood does offer beginner investor guides on its website.)

If Atlantic City were open, I would recommend they go there. At least you get a free drink while you gamble.

Erika Safran

Safran Wealth Advisors

But day trading shouldn't be your sole investing or income strategy. This is especially true foryounger investors, who haven't yet built up their retirement investments or established their financial independence, says Safran. They should focus on long-term investments. While Robinhood does offer ETFs, it doesn't offer mutual funds. And there's no confetti for locking-in to a long-term strategy.

"If an investor has a core portfolio which they recognize is not a trading vehicle, then go ahead, gamble with Robinhood," says Safran. "If Atlantic City were open, I would recommend they go there. At least you get a free drink while you gamble."

Clarification: This was post was updated with additional comment from Robinhood about the app's features.

Don't miss:Here's how Robinhood is raking in record cash on customer trades despite making it free

Check out:Americans spend over $5,000 a year on groceriessave hundreds at supermarkets with these cards

Read the rest here:

Trading apps like Robinhood are having a moment. But users should be careful - CNBC

Armenia's Prime Minister Nikol Pashinyan and Azerbaijan's President Ilham Aliyev attend a meeting of heads of the Commonwealth of Independent States (CIS) in Ashgabat, Turkmenistan October 11, 2019. Sputnik/Alexei Druzhinin/Kremlin via REUTERS

Last month, Armenia and Azerbaijan had their second most serious flareup in fighting since their 1994 ceasefire during their war over Nagorno Karabakh. These latest clashes may have unleashed a dangerous new geopolitical dynamic: heavy weapons fire near strategic transportation assets, military posturing between Russia and Turkey, and lack of an appropriate mediation mechanism. In the absence of US or EU leadership, it may be up to Turkey and Russia to redirect Azerbaijan and Armenia away from the battlefield and toward the negotiating table.

Who shot first on July 12 remains unclear. Both sides agree a pair of Azerbaijani soldiers were riding that night in a jeep along the two countries un-demarcated international border. Yerevan claims its troops warned the two Azerbaijani soldiers to retreat and Azerbaijan responded with artillery fire; Baku claims Armenian artillery fired unprovoked. Ultimately, fifteen Azerbaijani soldiers, including a general, were killed, along with one civilian in Tovuz Province. Four troops and one civilian perished across the border in Armenias Tavush Province.

The location of these latest clashes is significant. Tovuz is far from Nagorno Karabakh, which, along with its seven surrounding regions, is internationally recognized as part of Azerbaijan but occupied by Armenia. Frustrated by Armenias non-compliance with four United Nations Security Council resolutions demanding Armenia withdraw immediately, Baku has threatened to liberate these territories by force. But Tovuz is different. It is one of the last places Baku would want to see fighting because it lies directly on strategic transportation lines that are essential to Azerbaijans independence, economic vitality, and strategic significance. These are the:

This infrastructure is also strategically important to the United States and NATO. Washington has promoted these oil/gas pipelines for twenty-five years to help its European allies reduce their dependence on Russia, while also avoiding Iran. Meanwhile, the road and rail lines and airspace above comprise a crucial US logistics channel into Afghanistan, enabling one-third of all non-lethal supplies to NATO troops at the height of the Afghan war. And by providing alternatives to Chinas Belt and Road Initiative, these transit links can also help the countries of Central Asia and the South Caucasus maintain their own financial independence.

Russia, of course, opposes these routes, seeking to maximize flows of energy, goods, and data via its own networks. Tehran, meanwhile, is expanding its trade corridor into Armenia and onward to post-Soviet and European markets thanks to Armenias membership in the Eurasian Economic Union (led by Russia) and its Deep and Comprehensive Free Trade Agreement with the EU. Iran has also reportedly been delivering fuel to Nagorno-Karabakh via Armenia, while Irans airspace was essential for Russias delivery of weapons to Armenia following its clash with Azerbaijan in July.

Azerbaijans shelling of Armenias sovereign territory in Tavush, even if in self-defense, provides a justification for Yerevan to request military assistance from the Russia-led Collective Security Treaty Organization (CSTO), a military alliance that includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan. Armenias leaders have long tried to leverage the CSTO against Azerbaijan. They were unable to do so during larger military clashes in April 2016 because that conflict occurred on Azerbaijani territory (near Nagorno-Karabakh). At that time, then-Secretary General of the CSTO Nikolai Bordyuzha explained that the CSTO could assist Armenia only if an attack occurred on Armenias internationally recognized territory.

Last months fighting, in contrast, occurred partially on Armenias sovereign territory, which provided Yerevan an opportunity to request an emergency session of the CSTO. Yerevan quickly withdrew its request, however, as an evenhanded CSTO statement on July 14 criticized the violation of the ceasefire agreed by the leaderships of [both] Armenia and Azerbaijan.

Russia nevertheless responded unilaterally, launching its own snap combat drills in Armenia during July 17-20, drawing on its 102rd military base in Gyumri, Armenia.

Turkey also responded firmly. President Recep Tayyip Erdoan noted on July 14 that Turkey will never hesitate to stand against any attack on the rights and lands of Azerbaijan, with which it has deep-rooted friendly ties and brotherly relations, and condemning what he termed Armenias reckless and systematic attacks on Azerbaijan. Turkeys Defense Minister Hulusi Akar then warned on July 16 that Armenia will be brought to account for its attack on Azerbaijan. Large-scale Turkish-Azerbaijani military exercises followed during July 29-August 10.

While Turkey and Russia square off in the South Caucasus just as they are in Syria and Libya, neither seeks further escalation. Russia was fought to a standstill by NATOs second largest military in Syria last February and Libya in May. Turkey, meanwhile, has historically preferred to deter rather than confront Russias military adventurism, while preserving the countries strong economic relations.

The existing international mediation mechanism to contain conflict between Armenia and Azerbaijan, however, does not seem fit-for-purpose. The Minsk Group of the Organization of Security and Cooperation in Europe (OSCE) has mediated between Azerbaijan and Armenia since 1992. It is co-chaired by the United States, Russia, and France. (I was the US co-chair during 2006-2009). The groups mandate, however, limits its focus to Nagorno-Karabakh and its seven surrounding Azerbaijani regions rather than to Armenian territory. Even if its mandate were broadened, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev both seem to have given up for now on the Minsk Group. Pashinyan affirmed during an August 14 BBC TV interview that he had abandoned the basic principles of a Nagorno-Karabakh settlement negotiated by the Minsk Group to which his predecessor informally agreed in January 2009. Aliyev, meanwhile, cited meaningless negotiations with Armenia when he fired his respected and veteran Foreign Minister Elmar Mammadyarov on July 16. This occurred against the backdrop of tens of thousands of protestors in Baku demanding a revenge attack against Armenia for what they viewed as a military provocation in Tovuz.

It may therefore fall to Ankara and Moscow to fill a diplomatic vacuum and convince their respective allies to return to the negotiating table. Despite sharp differences with Russia and Turkey on many fronts, the United States and its European allies would be wise to encourage and shape such a forum. The alternative could be a mutual escalation of emotions and military tension between Azerbaijan and Armenia. While neither Armenia nor Azerbaijan could sustain a full-scale war, even a more limited armed conflict could knock out strategic assets on which NATO and the EU depend. The only beneficiaries would be Russia, Iran, and perhaps China and its Belt and Road Initiative.

Matthew Bryza is a senior fellow with the Atlantic Council Global Energy Center. He served as a US diplomat for over two decades, including as US ambassador to Azerbaijan and deputy assistant secretary of state for European and Eurasian affairs.

Fri, Jun 12, 2020

The Southern Gas Corridor (SGC) represents a historic success for Azerbaijan and the European Union (EU) in regard to their common quest for new energy supply sources and routes. Over the last decade, the EU has intensified its efforts to expand the SGC, seeking to attract gas from Turkmenistan. The time is now ripe to connect Turkmen gas with SGC infrastructure and the European market through a Trans-Caspian Gas Pipeline.

EnergySourcebyMatthew Bryza, Robert M. Cutler, and Giorgi Vashakmadze

More:

Russia and Turkey may fill in the diplomatic vacuum on Armenia-Azerbaijan conflict - Atlantic Council