Michele Clark
Clark Hourly Financial Planning - Chesterfield, MO Advisor
17295 Chesterfield Airport Road, Suite 200
Chesterfield, MO 63005 USA
Work 636.375.1813
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Michele Clark in the News: Wealth Gathering’s Moneymentals Blog

January 7th, 2013

Should you get your investment advice from a couple of plumbers?  I did and it turned into a wonderful career for me.   Those plumbers were my grandpa and my dad.

Learn how I got introduced to investing at a very young age and how it has influenced my thinking about investing ever since by reading “Blogger Interview: Hourly Planner’s Michele Clark” at the Wealth Gathering website.

Michael Goldman at Wealth Gathering asked me some questions about;

  • My professional background and why I didn’t stay in the traditional, commissioned-based brokerage firm environment.  I have worked in a bank, bank brokerage firm, a full commission brokerage firm, and a full service discount brokerage firm.
  • How does my family balance living in the moment vs. saving for the future.  Such a great question, because it is the essence of financial planning.
  • Who is your financial role model.  I could have gone on and on with this one.  I think I will do a future blog post of my own.
  • And do I think everyone is capable of learning enough about personal finance to do it on their own.  This answer may surprise you!

I know Michael through the Garrett Planning Network.  He is like me, in that he owns his own financial planning firm.  In addition he has the Wealth Gathering site which is so unique.  It is designed to offer online tools, coaching, and peer support.  It is structured like a financial fitness program.   As you know, I am a fee-only financial advisor, so I do not receive any compensation from them, and am not affiliated with Wealth Gathering.  If you have a chance to look at the interview, take a look around at the other information on the website.  Especially considering this is the time of year that so many people are tackling financial To Do items.

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Financial Resolutions

December 28th, 2012

I believe that just about everyone has some sort of financially related To Do item sitting on their To Do list.  And they have every intention of taking care of it.  However, so many other more time critical things seem to keep the financial items from getting to the top spot of the list.

If you are going to resolve to get some of your financial To Dos To Done, what actually matters – how it got done or that it got done?  I will come back to that thought in a minute.

When people come to see me they have accumulated a list of tasks, and it is so easy to see how  that happens in our busy lives.

You take a new job – a nice jump up the career ladder.  Something needs to be done with that old 401(k).  But what?   You’re busy with the new job right now.   So you put it on The To Do List.

Your income is higher now with the new job, should you have more life insurance?  Or is the life insurance at work enough?  You did buy some whole life from that guy that came to the house when you first got married.  Is that still the right policy for you or not?  So you put that on The To Do List.

Your kids are getting older, and you haven’t saved as much as you had intended for college.  How much can you afford to put away for their college vs. how much should you be saving for our own retirement?  Well, the kids are in middle school, you have a couple more years, so you put it on The To Do List.

At work they keep changing your investment choices and you don’t know what to pick.  You don’t have the tools to see all of your investments together and create a diversified portfolio that incorporates all of your accounts, but you know that you need to do it one day.  But you don’t have the time right now.  So you put that on The To Do List.

Sometimes when potential clients meet with me in the free Get Acquainted meeting they tell me that they feel bad about not taking care of these things themselves.  I stress to them, that I do not want them to feel that way.  I tell them that when I have electrical problems at the house, I call an electrician.  And when I have serious plumbing problems I call a plumber.  I have had a handy man come to the house a few times to work though lists of little things that were annoyances.  Sometimes you call in a professional to help you with your list.  And it feels great to work on that list.

So if you are making a resolution to get your financial To Do items To Done, make a plan to either do them yourself, or to contact a professional to help you do them.  Because when you mark them off the list, what actually matters – how it got done, or that it got done?

Resolve to take action today!

Have a Wonderful New Year!

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Michele Clark in the News: US News and World Report

September 12th, 2012

I was interviewed by US News and World Report recently about 401(k)s.  My thoughts appeared in an article on their website this week entitled “10 Strategies to Maximize Your 401(k) Balance.”

When Emily Brandon from US News and World Report called me I shared with her an idea for making it easier to save more in your 401(k), and we talked a bit about the new fee disclosure rules in 401(k)s and what that means for employees.  We also talked about the importance of adjusting your investment portfolio as you get closer to retirement.

If you would like to read the results of our conversation, and how she interwove it with the conversation she had with two other advisors, you can read the article here: 10 Strategies to Maximize Your 401(k) Balance.

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Annual Credit Report: Where to go to get your free credit report

May 18th, 2012

If you own a television, you have probably seen one of the many versions of commercials touting the free credit reports.  Or as you have browsed the internet, you surely have seen the banner ads with enticing “click here for your free credit report” messages.

The problem is, with so many companies saying that they offer the free reports; I have found that many people don’t know where they are actually supposed to go to get their free reports.  But they do know that if they go to those places that are advertising, they are going to be offered something to buy.

The website to use is www.annualcreditreport.com  or call 1-877-322-8228.

Equifax, TransUnion, Experion

Well, I hate to break it to you, but when you go to the official website, the three credit bureaus are going to try to sell you something too.  They are going to ask you if you want to buy your scores.  Do not buy them.  They are not the FICO scores that banks use so the score is not very helpful.  Getting the reports; now that is tremendously helpful, so definitely do that once a year.

What to look for on your reports

Make sure that there are no duplicate accounts, errors in information reported, or activity that isn’t yours.  For information about identity theft refer to the FTC identity theft website.

Which one to get first

This is my personal preference; I like the summary that Equifax provides at the beginning of the report.  If you have not printed your free credit reports before, I suggest printing the Equifax report first and looking over the summary, it is educational as well as informational.

How often to get your Free Annual Credit Reports

You can pull all three at once and be done with it until next year.  Or spread it out and get one every four months as a way to monitor your information on an ongoing basis.  Just keep in mind that, surprisingly, information can vary from credit bureau to credit bureau so spreading it out does not guarantee that errors will be caught in a timely manner.   But if you consistently pull them, any errors will be caught once a year.

For further information see the Federal Trade Commission website for the Free Annual Credit Report.

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Peter Cottontail Makes A Lousy Financial Advisor!

April 6th, 2012

Oh, I know he’s beloved by millions. And I can’t wait to bite off those chocolate bunny ears he will bring me on Sunday. But let’s face it; you wouldn’t want to get your financial advice from someone who puts all his eggs in one basket! You have probably heard that old adage, but do you know what it means?

Portfolio Diversification

Have you ever been in rush hour traffic and the lane you are in is practically stopped but the other lanes around you are moving faster. So you decide to switch lanes, but as soon as you change lanes, your new lane slows down and the lane you were in finally speeds up. That’s the problem with only being able to make one choice at a time, you have to pick the right one or you lose. With investments it is even trickier because there are so many different areas in which to invest. Luckily, with investments, you do not have to choose just one. You can diversify, and put a little bit of money in each area so that you are sure to be invested in the best performing area but you do not have all of your money invested in the worst performing area either.

Asset Classes

So what are these areas of investing that we are talking about? A portfolio should be diversified, or spread out, among stocks, bonds, and cash. Whether you should invest in an asset class or how much depends on your particular situation.

Depending on your situation, your stock portion can be divided up among the following asset classes:
* Large Company, United States stocks
* Mid-Sized Company, United States stocks
* Small Sized Company, United States stocks
* Developed International stocks
* Emerging Markets stocks

Depending on your situation, your bond portion can be divided up among the following asset classes:
* Short Term Bonds
* Intermediate Term Bonds
* Long Term Bonds

Portfolio Rebalancing

You have probably seen the investment pie charts, either in your work retirement plan materials or if you have an investment account, in the materials they provided you. Have you ever wondered “Why is it that everyone keeps telling me to use these darn pie charts?” Each different color of the pie chart represents a different asset class and that illustrates the diversification of the portfolio. So once you pick your asset classes and populate them with investments you are done right? Not so fast!

Annual Portfolio Rebalancing: The most important part!

The marketing materials give you the pie charts; they just don’t tell you how to use them. And that is a shame because, when used properly, in a disciplined fashion, they can take a lot of the stress out of market downturns. Here’s how.

Picture your pie chart, let’s say that your pie chart tells you that you should have 35% in Large Company United States stocks and that area of the market has had a terrific year and you have watched that portion grow from 35% to 38% to 40% to 45% in a year’s time! “Wow”, you say, “I have finally found an investment that makes money!” So human nature tells us, “Add more money to it”. But not so fast. Haven’t we all heard that to make money we are supposed to “Sell High and Buy Low”? Well, fortunately for us, the pie chart is going to help us do that. More on that in a minute.

Picture your pie chart again, let’s say that your pie chart tells you that you should have 15% in Small Company United States stocks and the market has not been kind to small companies this year. You watched your Small Company slice of pie shrink from 15% to 12% to 10%. Your first instinct might be to sell this investment because it didn’t do as well as the others. But that is not what you should do, instead, you should “Buy Low”. Without a plan, human nature makes us do the wrong thing at the wrong time.

Now that does not mean you buy a poor quality investment, speaking to the topic of diversification again when you buy a single stock it can go out of business, when you buy an investment that represents an entire asset class, such as an S&P 500 index fund, it is highly unlikely that all 500 companies will disappear at once.

Annual rebalancing is simply the discipline to evaluate the portfolio once a year to look for changes in the quality of any of the investments and then to check to see if your asset allocation (slices of pie) have gotten out of alignment over the year. If they are more than a few percent off, make some changes. Please keep in mind there may be tax consequences, unless you can make the adjustments in retirement accounts.

What Annual Rebalancing will do for you:

1) Help you sell high (the best performing asset classes) so you can take your money off the table.

2) Help you sell high so you can protect yourself if when “the bubble bursts”.  Have you ever noticed that it is often the investments that have gained the most, that end up falling the most when the market corrects?

3) Help you buy low (the underperforming asset classes), when prices are low.

4) Helps you prepare for when the underperformer rebounds.
2008 worst performing asset class was MSCI Emerging Markets -53.18%
2009 best performing asset class was MSCI Emerging Markets +79.02%

5) Removes emotion! Emotion has you selling when you should buy and buying when you should sell. But having a diversified portfolio and using a pie chart with an annual rebalancing plan will get you through every type of market cycle.

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Clark Hourly Financial Planning, LLC, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties' informational accuracy or completeness. All information or ideas provided should be discussed in detail with an adviser, accountant or legal counsel prior to implementation.

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