Is your holiday gift to yourself, peace of mind and more money?
It’s never too early or late to invest. But where do you go for the best service and highest rate of return? What investment options are best? Why now, during the holiday season? Smart personal investors get started during this season and they do it in groups to improve yield rates and encourage one another.

This the season to invest?
If you think this is the season to spend, think again. Some banks have seasonal needs to increase their deposits and you could benefit from higher interest yields. Additionally, the federal reserve’s quantitative easing strategy will most likely keep interest rates going down.

What is a safe investment?
Banks or Credit Unions are still the safest place to keep your money. However, they are the worst to offer a high rate of return, especially if you don’t get the right service. Ensuring you talk with the right person at your financial institution will yield better results. Make sure you talk to the branch manager or a person licensed to provide investment advice. Shop around for the best bank, but keep your entire deposit relationship with as few banks as possible. Shopping for financial institutions is something people should do more often. The truth is, consumers benefit from lower fees and higher yields if they keep larger deposits.

Which type of adviser is right for me?
The best way to decide where you place your money should always be based on the reason you invest and the purpose for future cash withdrawals. Personnel at financial institutions always change. If you have a good adviser, more than likely she or he will be promoted by the time you retire or need to move your money. Choosing the right investment partner should not only be based on convenience. While some like online banking others still like face to face interactions. Initially, most should visit their financial institution to carry out an investment plan and to get a higher interest yield exception.

What do I invest in?
Select your investment strategy based on a goal not a rate or term. Figure out your investment goals and the prioritize them. Most investment managers suggest you divide your goals by short-term and long-term. I would add that you categorize goals by possible, probable, and improbable. You know if you can stick to these goals based on your discipline and determination. Set yourself for success and find someone to encourage you. Most investment plans fail because of poor discipline.

Who do I trust?
Most banks, credit unions and brokerage companies offer pre-investment assessments. Some financial planners are fee only financial planners. This type of fee arraignment are for investors that have advanced and have frequent transactional needs. Be cautious of biased financial planners and always meet with more than one planner from different companies. You want someone who is not over burden with thousands of clients. Preferably someone who is easily accessible to answer questions once they have your money. Most financial planners give the same investment options, what differs is their knowledge, personality and time. Most people do not remember what they invested in, they remember how they are treated.

Savings, IRA, 401K, Annuities what’s the difference?
You need to ask your financial adviser to explain all these options. Depending on your wealth or wealth goal, you may have one or a combination of these investment options. Any account that has a purpose of saving for a large purchase within a 5 year period is not an investment, it’s a savings. A savings is typically withdrawn within a short period and at best keeps its principal value, or purchasing power. Investments are long-term and typically increase in value. The value of an investment is it’s equity and the benefit of the cash flow it provides. All these investment types can offer many choices in investment products. In some investments types, like annuities, the investments products are underwritten within a life insurance policy and provide insurance as an added benefit. This feature is not free so make sure you don’t already have it and you really need it.

What investment products do I choose?
There are a wide-set of financial products. These include, stocks, bonds, commodities, mutual funds, corporate paper, municipal bonds, treasury bonds, certificates of deposits (CD), structured CDs, money markets, and savings accounts to name a few. Your rate of return in variable rate investments will differ and in the short-term, (less than one year), you may lose value. The only way to avoid this is by selecting fixed rate services insured by a federally backed agency. If you’re concerned about having a large investment account without federally backed insurance, you may want to buy treasury bonds. These bonds are backed by the Federal Reserve, who backs the FDIC. However, most people wish they had this problem.

The secret to improving your yields
Most common fixed investments are bonds and CDs. Fixed CDs are typically bank products although financial advisers are willing to sell them as loss leaders to gain your business. CD’s typically have the lowest yield rates; don’t settle for the listed yield rates. Ask for a manager to make a rate exception. The larger the amount invested, the greater the chances of getting a higher exception rate. A good strategy is to visit your financial institution with family or friends that are also investing. Having the bank understand your household size does not means you need to pool your funds to invest. Let your financial institution know that you will cumulatively deposit and invest. You can keep your bank accounts separate and still leverage your common relationships. As a group, not only are your combined deposits larger, but you can encourage each other to continue the investment strategy.

This post and the contents in this site are not intended to be or is personal financial advice. Always speak with a licensed professional before investing.

Make sure you thank a veteran and those in the military every moment you can. I don’t think I was wise enough to do this with my stepfather who served in WWII and Korea.  After toting a gun in Germany as an army foot solder, he worked as an electrical engineer for over 40 years with the US Navy. He traveled overseas in every aircraft carrier built during his times. I never heard him complain about his work or pay. Today, he’s retired trying to make his garden stay pruned and clean. It is our obligation to learn from people like him and to pass on this knowledge. Many in the military are good role models who mentor inside and out of bases. Almost everyone has something positive about their lives. When you are celebrating Veteran’s day, remember who was a good role model and how you can be one too. Veteran’s day celebrates our military heritage and the sacrifices that make up our communities.

Those who served and volunteered should be respected and revered. Our mission is to help communities, including the military and their families. At military installations many hard working fleet and family support personnel are helping enrich the social and physical health of our military. Soon, many enlisted members will be provided with various financial education workshops to ensure military readiness. It had been reported that financial stress can be related to depression, domestic abuse, divorce, and suicides. Giving this community a relevant and useful dose of financial health is vital. However, it is also important to follow up with attendees during and after these workshops to ensure effectiveness, provide adequate support and to improve future implementations.

The leadership inside our military is never satisfied with and imperfect system. They are constantly working in making the perfect recruit. Leadership, service and mentorship is something our veterans provide and we should be grateful.

Today, 80% of our workforce is in the working class sector and most are making ends meet with frustration. In the U.S., 70% of people are living paycheck to paycheck. More consumers are opting to keep their late model car, reduce consumption and yet have made little progress in decreasing their overall debt. Fewer individuals are purchasing at their favorite stores in an attempt to be frugal. Unfortunately, too many still do not know how to be successful with money matters.

When asking successful people to share their secrets for success, many share this common tip. “To be successful, one should do the following exercise; every 50 minutes, take 5 to see what was done and 5 to make it better”. If people would look at their budgets consistently, on a weekly or monthly basis, they would be more likely to improve their personal wealth and live healthier lives.

I would add that we also need to pay attention to details to create a realistic budget. We forgive ourselves for forgetting to budget for unexpected events and expenses. However, there are those routinely forget or ignore common events in their budgets. Too many times, we forget to budget for the car’s annual maintenance. Depending on your car that can be as little as $50 or as much as $5,000. How about birthday parties or wedding anniversaries. Depending on your lifestyle this might be one of the largest reoccurring expense that few add to their budgets. Most people do add Holiday shopping on their budget but never stay under the amount they budgeted. If you add Halloween, Thanksgiving, and all those other holidays to your list, you might find out how unrealistically we prepare for these annual expenses. Most people figure that if its a discretionary purchase there is no need to place it in their budget. I would recommend that you place all discretionary items in your budget and if you don’t spend it you add it to your savings.

How you decide to spend and save will make you feel wealthy. It is this notion of financial health that will make the recession a thing if the past. The answer of how we move towards a recovery is not simple. It will take a concerted effort and personal responsibility to make it happen. Banks and people will need to do their part to make things better. What is really important is how we will take these experiences and pass then down to generations ensuring that our current history does not reemerge again.

It feels like we are still in the worst recession and perhaps too slow of a recovery for many. Economists at the Federal Reserve have reported the United States is no longer in a recession. Many economists state this economy is our new reality and that we should set expectations towards what is more realistic. After all, a faster recovery really would indicate unsustainable consumer purchasing. According to these economists, our economy has opened up to new frugal consumers. If we believe people are now more frugal, then why are personal savings still shrinking for most working class Americans?

The real reason money is not finding it’s way to the bank has many alarmed. It seems that there are more individuals using cash. As times get harder people feel the comfort of that cold hard cash in their pocket.

Now more than ever, everyone is analyzing money matters. Banks are also finding new ways to improve their cash flow. Finding new clients and reducing costs are the current marching orders for banks. In order to reduce costs and increase deposits, banks are trying to take away your cash. Banks have found that under-bank and un-banked communities hold a valuable place in their current strategic plan. However, those that don’t use the banking system are growing in numbers and for several reasons.

Why do people stay away from banks is a matter of poorly educated consumers. The distrust in financial institutions has grown and many don’t understand the benefits in using banks. Others don’t think their small deposits are adequate to open or maintain a bank account. When it comes to being realistic about money, people don’t seem to get the real picture. Recently, banks have been blamed for the poor economy when they only did what was asked of them and what they were allowed to do. Others blame industry greed or poor regulations. What is universal is that most people don’t buy the notion that banks are charitable organizations. The media has reported banks generating record profits and looking after the interest of their depositors, stockholders and regulators. Simply put, banks are in the business of creating profits for their stakeholders just as individuals do what’s in the best interest of their estates. However, what is “best” can also be socially right. When financial institutions work at improving their communities, everyone wins. In most cases its not a good idea to stay away from banking. Educating consumers about the benefits of using banks has always been a challenge. This concept is called financial literacy, smart money, or being money wise. These skills are rarely taught in California’s schools. As of today, financial literacy standards are non existent and those great teachers that incorporate financial skills in their class do so under math or language arts standards.

Banks that are working harder at educating low to moderate income communities, with improved financial education. They know this will bring new customers and reduce their operating costs. Most individuals in low to moderate income communities are cash based consumers that cost banks millions every month. Banks and government agencies find managing cash is very expensive. It’s expensive for banks to hold millions in their vaults. They can’t lend out cash on hand and its costly to move, audit, and hold cash. Many banks are even purchasing money recyclers that attempt to automate this activity. Additionally, bank regulators and compliance departments are avoiding cash. For agencies, it is costly to account for illicit cash deposits. Federal agencies would like to see cash paid for services go away. It’s easier to track those who do not pay taxes if we removed cash from the system. It costs the Federal Reserve more to print and stamp cash. Banks have another expense that seems to be costing in the millions. Money laundering costs are also a costly reputation risk. Today’s goal for banks is to take away your cash. This will save banks and consumers money.

Should we be grateful that banks are trying to take cash out of the system? As more people become bankable, the economy and personal wealth should improve. It is a win-win for banks and consumers, right? Well the answer depends on how well the banking industry implements their community based financial literacy programs. So why aren’t banks doing more to strengthen their communities’ money skills? With the high price of cash management and an opportunity to bring in an untapped market, why wouldn’t a savvy bank attempt to improve their communities with better financial literacy programs? Even large banks are understaffed and limited in their support for financial literacy. Bank regulators are coming at banks from every direction and will continue until we see a real recovery in the financial system. Large banks have community relationship officers that help reach out to community non-profits in support of efforts that improve economic vitality and self sufficiency. Unfortunately, these inter bank departments have seen their budgets downsized in recent days. Additionally, the banks’ charitable foundations are getting smaller and funding fewer non profits.

Like most other companies, banks are expecting more with fewer resources.

There is no better time to change our outlook and behaviors towards money matters. Shifts in cultures don’t come around often. Policy makers all around are trying to use this opportunity to make sustainable changes. We all know that the banks and our government cannot make us save if we are not engaged. It will take individual initiative to improve our financial success. We can look around for those who are better money managers and ask for advice. I would suggest that bank customers know their branch manager and that they sit down with a financial planner at least once a year. For those that do not have a savings account, I would recommend that they open one and pay into it like it was their phone bill. Finally, if you don’t have a budget, I suggest you get black tape place it on your top of your car’s gas gauge and when you run out of gas, take the time to write down a miles per gallon chart along with your budget.

What is the National Financial Capability Challenge?

The National Financial Capability Challenge is an awards program designed to increase the financial knowledge and capability of high school aged youth across the United States so they can take control over their financial futures. It challenges high school teachers and other educators to teach the basics of personal finance to their students, and rewards students, educators, schools, and states for their participation and their success. Educators and top-scoring students will receive award certificates, and schools and states with the highest participation rates will earn special distinction.

Why is financial capability important?

The recent economic crisis and the increasing complexity of our financial system make it clear that strengthening the financial knowledge and skills of our young people is critical to their future success and to the future financial stability of our country. To better navigate their financial futures and be prepared to make smart choices, students need to learn more about earning and spending, saving and investing, using credit wisely, avoiding fraud, paying for college, and more.

Who can participate?

All high school teachers and other educators working with U.S. high-school aged students (ages 13-19) are encouraged to register for the Challenge, download the Educator Toolkit, prepare their students, and administer the online exam. Educators who have been teaching students about personal finance for years as well as those who never have before are urged to join this national initiative.

How does the challenge work?

This is a free program.

Registration: Educators are encouraged to go to challenge.treas.gov to sign up.
Educator Toolkit: Educators will have access to a free Educator Toolkit that includes ready-to-use lesson plans (in PDF format) that cover all the core concepts students need to learn to take the Challenge. Educators are encouraged to use whichever modules they like, use other existing resources, or create their own innovative approaches to teaching these concepts in an effort to help students increase their financial capability.
Best Practices: Throughout the Challenge period and beyond, we encourage educators to share ideas and suggestions about effective ways that they have found to help increase their students’ financial capability.
Challenge Exam: The Challenge online exam, which is designed to illustrate the relevance of financial topics to students, as well as to assess their learning, will be offered from March 7 – April 8, 2011. It took the average student less than 30 minutes to complete. Over 76,000 students participated in the spring of 2010.
Awards Program: The top two scorers at each school, plus all students scoring in the top 20%, will receive National Financial Capability Challenge Award Certificates. All participating educators will receive an official certificate, and educators from schools and states with the highest proportion of participating students will be recognized as well.
Educators – Sign up now to be part of the Challenge

California Foundation Fund (CAFF) mission is to break the cycle of poverty and the financial stresses that devastate our State’s low-income population. Through technical support services, CAFF provides financial educators the tools and benchmarks required to deliver successful personal and small business initiatives.  CAFF’s directive is to help improve the methods in which Financial Education is developed and implemented. Our goal is to standardize the State’s financial education while improving economic self-sufficiency for low to moderate income communities. Our programs create opportunities for all major financial institutions to implement curriculum that maintains a minimal set of standards in an effective and inspirational manner. Our work helps underserved communities develop their own micro credit services, initiate banking for the underserved, improve small business growth and sustain economic vitality. We foster collaborative relationships between communities and financial institutions to improve the State’s economy. Why is financial education needed in California?

  • 8 of 10 identify money as a source of stress.
  • 70% of Americans are living paycheck to paycheck.
  • 52% of Americans are distressed over financial matters.
  • 42% of American adults don’t follow a budget.
  • 26% don’t pay all of their bills on time.
  • 32% have no savings.
  • 29% handle emergency by using a credit card.
  • 33% haven’t allocated anything for retirement.
  • 41% admit limited knowledge of personal finance.
  • 100% of our State’s public schools do not have a financial literacy standard.


Workforce Financial Pain Cost to Employers

Financial issues are the #1 cause of workplace stress. The Cambridge Human Resource Group states that a lack of financial education for workers is “the most critical unaddressed workplace issue.” As reported in USA Today, financial stress “is having an impact on the workplace, potentially draining productivity and increasing emotional stress on the job.”

How many times have you asked yourself if there was a way you could use your knowledge to help our economy? CAFF is looking for financial planners, bankers and attorneys to become financial coaches. Through this effort, we can bring educational resources to the current workforce and improve our economic outlook.