Feb 08 096

It is the quiet before the resolution storm, it is the aftermath of holiday madness, it is the week where the days become jumbled, schools are closed, schedules are erratic and if we eat another piece of Christmas candy/cookies/fruit cakes (insert as needed) we might just burst. We often have a difficult time “lingering” this week, floating between football games, 1000 piece puzzles, and catching the latest flick at the movie theatre. We are going to avoid discussing finances and ignoring Wall Street and instead focus our attention on what’s important – people. This provoking piece is worth consideration when we start to compile resolutions and goals for the year ahead. Sometimes we need to linger a little longer to realize what’s important in life.

We often talk about how to increase the savings you’ll have in retirement, whether it is by boosting your 401(k) or IRA contributions, reducing risk by investing in low-cost index funds, or using other tools and strategies to reach your goals.

One thing that often gets left out of that conversation, however, is the importance of protecting the money you already have. And that doesn’t always have to do with your investments — sometimes it is as simple as the card you choose to use when you are shopping.

A recent story in The New York Times notes that using a debit card instead of a credit card carries more risk, because debit cards are tied to your checking account.

According to the Consumer Financial Protection Bureau, you must notify the bank within two business days of a lost or stolen debit card to limit your liability to $50. That means you could be out hundreds of dollars if you don’t discover the problem quickly.

With data breaches becoming more and more common at retailers, it makes sense to take steps that limit your risk — just like when you are investing.

So when you are buying gifts this holiday season, or just picking up something for yourself at the after-Christmas sales, consider using credit instead of debit (if you can use it responsibly, that is).

You might save more than money in the event of a breach — you could also save yourself a lot of time and hassle.





This time of year is a test. A test in giving and receiving while filtering the copious amount of consumer noise.  It is part of our culture to consume, a guilty pleasure, an American tradition. However, we often struggle with the meaning of the holiday and how to balance traditions, the Target sales ad, and our in-laws. We enjoyed this article featured in The New York Times so much that we are also highlighting in our newsletter this month. As President Coolidge is quoted in the article, let this serve as a reminder to us all, “Christmas is not a time nor a season, but a state of mind. To cherish peace and good will, to be plenteous in mercy, is to have the real spirit of Christmas.”

Believe it or not, it is already December — and before you know it, we will be looking back on 2014.

You still have a few weeks, however, to do some end-of-the-year maintenance that can help you both now and in the long run.

The personal finance blog Get Rich Slowly just published a list of 14 “smart money moves” to make before 2014 is over. Many of them are common-sense things, but those often are the kinds of things people forget! The full list can be found via the link, but here are a few that struck a chord with us:

Rebalance your portfolio. As noted in The Coffeehouse Investor book: “At the end of each year, review the amount of money you have invested in each class of assets. If a substantial movement in the stock or bond market results in a significant shift away from your desired allocation, you should consider rebalancing your assets to your original allocation percentages.” This will help reduce volatility and maximize performance.

Maximize retirement contributions. You can contribute up to $17,500 for 401(k), 403(b) and 457 plans if you are younger than 50 — and up to $22,500 if you are over 50. If you haven’t hit the maximum, check with your workplace (now!) to see if you can ramp up your contribution on your final paycheck(s) of the year. For Individual Retirement Accounts, you have until April 15, 2015, to make contributions for the 2014 tax year.

Make your donations to charity. Donations must be made by Dec. 31 for them to be deductible on your taxes in 2014 — but consider your financial situation before getting all of those donations in. If you are going to take the standard deduction this year, but are likely to itemize next year, it might make more sense to wait to donate until January.

Do a review of where you are, personally and professionally. Life is about more than your finances, of course. Are you happy with your career? Satisfied with what you have achieved this year at work and home? Are there areas where you can improve? Successful people — and successful investors — regularly take stock of where they are and pursue the things that give meaning to their existence.

Here’s hoping we all can find some of that meaning, at the end of this year and beyond.

photoIt’s our turn to share our shameless plug on the most perfect gift (in our opinion) to give this year.  The Coffeehouse Investor book provides a wealth of advice on investing with common sense, financial planning long term, and how to get on with your life while ignoring Wall Street.  Bill’s quick wit and simple strategies are perfect for the beginning investor or the “expert” who continues to try and beat the market.

Besides, gaining a wealth of knowledge on investing and the markets, Bill includes stories of his mountain climbs, growing up on the farm on the Washington Palouse, and his infamous pumpkin pie recipe to savor your taste buds.

Give the gift of common sense investing this year and we promise, you won’t regret it.



BS - 425 mag


In the latest issue of 425 Business, Bill reminds readers of the lessons learned attempting to beat the market. He references the work of Nobel Prize recipient Eugene Fama, “his study on the efficiency of markets should be a reminder to all of us that when you purchase stock in a publicly traded company, you aren’t really betting on the future success of the company. Instead, you are betting on your own power to predict the emotions of other investors and their expectations of a company’s success.”

Investors often ask “how can I beat the market” but Bill suggests the more relevant question would be “what is the price I pay if I try – and fail?” It may be a difficult question to answer or even more difficult to see the “price” in hard numbers, but if you play your odds attempting to beat the market, you need to be prepared for a bumpy road ahead.



The holidays are upon us, and for some lucky people, that means a little extra money is headed their way, too.

Whether it’s a year-end bonus at work, a cash gift from a family member or even the annual cash-back award from your credit card, how you handle a windfall can have a big impact on your financial future.

The personal finance blog The Simple Dollar just published a post with some strategies to put “extra” money to good use. Here are a few of our favorites:

Add to your retirement funds. Many people aren’t putting enough away for retirement in the first place — so when you find yourself with some “bonus” money, consider bolstering your 401(k) or IRAs.

Eliminate (or reduce) debt. If you are carrying high-interest debt, such as balances on credit cards, it’s always a good idea to pay it off as soon as possible. After all, paying off a credit card with an 18% interest rate is just like earning 18% on that money.

Make a will. This is something that far too many people put off, in part because it costs money to have a lawyer put together an estate plan. This might not be the most fun thing to do with your windfall, but it could wind up being the most important.

Donate. So you’re in good financial shape (you’re reading this blog, after all), and you don’t have any pressing needs for this money. Donating to charity will help those who do have pressing needs — and it will make you feel great.

There’s no right answer when it comes to spending your extra money, of course. But it’s always the right move to think about how that money can help you reach your long-term financial goals.

It’s the time of year to discuss pies – your “money pie” that is.  If you are unsure of what I’m referring to, you missed chapter five of The Coffeehouse Investor.  Bill writes extensively about the biggest piece of the investment pie, compounding.  When you reinvest your stock dividends instead of spending them, you are able to earn dividends on the original dividends and those dividends earn more dividends and as it continues, you get what we call “compounding.”  If you are continuously selling stocks and not giving your investments a chance to compound, you may be missing out on the largest piece of the “money pie.”

Whether its pumpkin or sweet potato or pecan pie you may be enjoying this Thanksgiving, remember to think about the investment pie and taking full advantage of the magic of compounding.

Speaking of pumpkin pie, if you missed the recipe in this month’s newsletter – we have published the infamous recipe found in The Coffeehouse Investor book below.

From our Coffeehouse family to yours, Happy Thanksgiving.

Pie recipe2




Grab your favorite beverage, a notepad and pencil, and spend some quality time with Coffeehouse Investor author, Bill Schultheis as he discusses financial strategies for the new year.  Stick around for the very end, as our Q & A sessions are a fan favorite.  To register, click here.


Building Wealth image

CaptureWe hope you received our November Coffeehouse Investor newsletter.  If not, sign up here!  We were notified that our mailing service, Constant Contact is having technical issues and you may not have been able to access the links we referred to in the newsletter.  For your convenience, we have published the two articles that included links below for you to reference. Thank you!

Stay Cool: The market’s latest fluctuations can make even the most tempered investor start to worry and contemplate taking action.  Vanguard highlights two research papers that prove staying put can have the greatest impact in turbulent times. Still worried? Ensure that your allocation of stocks and bonds represent the type of risk you want to take, regardless of market outcomes.

Simplify: Cleaning up your portfolio is almost as important as rebalancing. The Wall Street Journal suggests a few ways to straighten out the finances and clear out “cluttered” accounts, high fees, and simplify investment accounts.