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Couple Retires By Mid-30s

Couple Retires By Mid-30s

What’s your definition of “early” retirement? Sixty? Fifty-two?

A California couple recently retired in their mid-30s with $1 million in the bank, according to a story in Forbes magazine. 

That remarkable accomplishment would be difficult for most of us to replicate. I know I couldn’t do it — not with four kids!

The couple, Travis and Amanda, had no kids, were well-paid tech professionals, and already had $350,000 saved when they undertook this project. But their story reinforces several important lessons about building wealth for retirement.

Set a goal. When Travis lost his information systems job in 2012, he quickly realized he really didn’t like working. He preferred the freedom of not working. So, he and Amanda set a goal of amassing enough money to retire as soon as possible. They pegged that number at $1 million. The couple planned to live on 3 percent to 4 percent of their portfolio’s value every year and expected a 7 percent annual growth rate.

Get organized. You can’t map a journey unless you know the starting point. Travis and Amanda put all their financial information into the free budgeting site and did a deep dive analysis of their assets and spending. They also combined several 401(k)s from former employers.

Your job is your biggest asset. Travis went back to work purely to make the couple’s retirement dream come true. He switched jobs three times in three years to obtain salary increases. Travis told Forbes he kept his eyes on the prize, which made a great employee. Amanda, a chemical engineer, stayed in her job and racked up seniority increases. At their earnings peak, the couple was making a combined $200,000.

Prioritize saving. The couple saved as much as 65 percent of their income during the three years it took to amass $1 million. They lived in a rent-controlled $2,200-a-month Oakland, Calif., house (crazy cheap for the Bay Area) and aggressively cut costs by doing things like riding bikes instead of driving, and hanging the laundry outside to save on running the dryer. The two credit their frugal parents for teaching them how to live modestly.

Watch out for fees, penalties and taxes. High fees can be a great return-killer. You should review and question every fee you pay, even on funds inside your 401(k). Amanda and Travis put much of their retirement money in low-cost ETFs and index funds. These paid off nicely, as the couple rode a more than 60 percent increase in the S&P 500 from 2012 until 2015.

The couple planned ahead and was able to avoid the 10 percent IRA early withdrawal penalty by using a Roth IRA conversion ladder. In this forward-looking strategy, they transferred a certain amount of money each year from their traditional IRA to a Roth IRA. Once five years had passed from the initial IRA to Roth conversion, they were able to tap the amount converted to their Roth in an annual laddered sequence and avoid the early withdraw penalty.

Simplify before retirement. As they approached their goal, Amanda and Travis sold much of the stuff in their two-story house.

Watch the outflow in retirement. While most conversations about retirement planning center in saving, you need to think carefully about your post-work spending if you want your nest egg to see you through 20 or more years.

Travis and Amanda are very disciplined about this. They stuck to their plan to spend no more than 4 percent of their portfolio’s current value per year. As a result, they sometimes had to cut back their monthly spending when the market dipped. They did so even while on their long-planned retirement adventure, a driving trip from San Francisco to Costa Rica. They made that journey in their frugal fashion, driving a used Toyota 4Runner that often doubled as their nighttime accommodations. When the couple arrived in Costa Rica, they leased a house for $1,000 a month — about $30 a night. They cooked most of their own meals and weren’t interested in expensive resorts or tourist activities.

Relocate and save. When Amanda and Travis returned to the U.S., they left the super-pricey Bay Area and bought a $270,000 house in Asheville, N.C. They chose the artsy mountain town because the cost of living is relatively low. They also believe it will be easy to rent the house during their coming summer travels.

Travis and Amanda insist they are done working. But they plan to have a family in the future. Their frugality is impressive, but the cost of kids is a game changer for any couple’s finances. So, we’ll see.

Again, this is an extreme example of achieving an early retirement. But if these two 30-somethings can accumulate about $650,000 in three years, surely you can achieve your savings goals in 20 or 30 years by adopting some of these same mindsets and tactics.

Hey, wait. We just learned a financial lesson from two millennials! Will wonders never cease?

Read the original AJC article here.


Money Matters with Wes Moss | March 20, 2016

Wes Moss covers important deadlines for major changes coming into law for social security and other updates on oil prices, minimum wage rates, and more.

March 20, 2016 Hour 1

March 20, 2016 Hour 2

Wes Moss, Chief Investment Strategist, at Capital Investment Advisors is the host of “Money Matters,” a weekly radio show offering financial advice to callers and listeners. The show’s producer, Ryan Ely, is a fellow investment advisor. Listen live on Sundays at 9am on or subscribe to our iTunes Money Matters podcast updated weekly.


CIA Success Story: Couple Creates Income Streams Before Retirement

In today’s CIA Success Story, we share a story about a couple that was concerned they wouldn’t have enough money to live comfortably during retirement. After working their entire adult lives, and regularly receiving paychecks from their employers, there was a significant amount of anxiety surrounding the amount of money they would be receiving during their retirement.

The Question:

How can we be sure that we’ll have enough in retirement to be comfortable without receiving our regular paychecks?

The Scenario:

The husband worked as a manager for a large industrial company and the wife worked as a nurse for her entire career to become Chief Nurse. Their children were in their twenties and mostly independent from their parents, aside from one wedding. Both the husband and wife worked their entire lives, but the wife was starting to have some anxiety about not receiving a regular paycheck, which became her biggest obstacle regarding retirement.

How We Helped:

When consulting with our clients who are approaching retirement, it’s important to look at everything in their portfolio, including any investments, liquid assets, pensions, 401(k)s and Social Security benefit packages. If you find yourself in a similar situation, ask yourself these questions when considering your retirement:

  1. Have I been contributing to my 401(k) with every employer?
  2. Have I worked for any employers who offered a pension plan for my retirement?
  3. What investments have I made and how profitable have those been?
  4. Do I have any liquid assets that will generate income during my retirement?

Preparation for Retirement:

You aren’t alone when it comes to planning your retirement. Our trusted advisors at Capital Investment Advisors are trained to examine all funds to help our clients enjoy their retirement. We understand that making the transition into retirement often brings anxiety, and we are here to advise on the best investment strategies.

The Takeaway:

While working with this couple, we discovered that they have several assets which would allow them to enjoy a comfortable retirement. The husband had a pension from a former employer, both husband and wife had a significant amount of Social Security benefits, and they had liquid assets. When we put this together, it amounted to approximately 4 paychecks every month. We also explained that those funds are taxed significantly lower during retirement, and that they wouldn’t be putting money into their 401(k) savings plans.


Financial Market Fear: 2016 Isn’t Off To As Rough A Start As You May Think

Just a week into 2016, and the market is off to a difficult start. If it feels like déjà vu, it is. Chinese market volatility has once again reared its ugly head and is causing anxiety in the U.S. markets. As of Thursday’s close, the S&P 500 is down 10% from its May highs. While we don’t want to dismiss the turmoil, it is worth noting not much has changed from August. Meaning the economy continues to chug along and stock valuations are fair.

What’s different this time? First, oil continues to make new lows. Second, the Federal Reserve raised rates 0.25% in December. Let’s address both.

Oil prices are still low. Lower oil prices provide a tailwind for consumer spending, which accounts for 70% of U.S. GDP, and very rarely (arguably never) lead to recessions. The other piece of good news is oil’s decline has stemmed from oversupply and not lack of demand. Lack of demand sends worrying economic signs, not too much supply.

The Fed’s rate hike. Federal Reserve inaction/action over the past few years has produced market volatility. We expect this to continue, unfortunately. On the plus side, we also expect the Fed to move very slowly compared to prior cycles. This means while rates could rise over the next 12-24 months, our base case calls for a slow ascent and that the overall environment will remain accommodative.  

What’s the same this time? The U.S. economy remains on solid footing. Though we readily admit it’s acting more like the tortoise than the hare. GDP is growing in the 2.0%-2.5% range and is likely to do so again in 2016, disposable income has accelerated to near 4%, unemployment remains low fueled by solid job growth and the housing market is improving. These factors all pointing in the right direction lead us to the same conclusion from last time: a recession looks unlikely over the next 12-18 months.

The start to 2016 is not a welcome one, to be sure, but we think it has more elements of fear than fundamental merits. As always, we believe strongly that a balanced portfolio is key and are here to help.


CIA Advisor Comments on 3 Mistakes Unhappy Retirees Make

In a recent Dynamic Wealth Report articles, Wes Moss gave 3 examples that unhappy retirees make that can truly separate them from having an early and happy retirement.

The mistakes Moss found were commonly reported when he conducted a study on the habits and traits of happy versus unhappy retirees for the book, You Can Retire Sooner Than You Think – The 5 Money Secrets Of The Happiest Retirees. Moss had 1,350 retirees across 46 states participate in my study, and learned a multitude of factors that unhappy retirees all have in common. The three most mistakes to avoid were:

  1. Unhappy Retirees Have 10 Or More Years Left On Their Mortgage

Through my research I found a correlation between happiness and retirees who had either paid off their mortgage or they are within five years of having it paid off when they retired. Unhappy retirees generally had 10 or more years until their house will be completely paid off. Removing a monthly mortgage payment from your budget is not only liberating, but also allows you to direct more of your retirement income towards your core pursuits.

  1. Unhappy Retirees don’t define the purpose of their money

After saving year after year, unhappy retirees seem to believe that the money from their retirement fund alone will create a happy retirement for them. Money itself, though, will not give you happiness; instead, it’s how that money is used that ultimately creates a happy retirement. Happy retirees go into retirement with plans to travel, volunteer, etc. and generally put their retirement fund towards following their passions.

In fact, I found that happy retirees have at least 3.5 core pursuits. These are essentially hobbies on steroids, and often what directs the purpose of happy retirees’ money. My unhappy retiree group only averaged 1.9 core pursuits, so if you find yourself with limited interests I suggest that you go out today and find a new sport, nonprofit or social club to join and enjoy.

  1. Unhappy Retirees Have A “Rich Ratio” That Is Under 1

I created the Rich Ratio formula several years ago, and have found it helps individuals and families easily understand their money. This formula is very simple: the amount of income you receive divided by the amount of money that you need. (This calculation should be done with after-tax amounts.)

To calculate your Rich Ratio in retirement, simply take the amount of monthly income you should or do have in retirement (Social Security + pension + any additional steady income streams) including what your nest egg should produce, and divide it by what you expect to spend each month to live the retirement lifestyle that you want: Have / Need = Rich Ratio.

Read the original article here.


Emotion Versus Fundamentals

Volatility is back in a major way. And it has investors wondering if there’s about to be a repeat of 2007 and 2008. Are we on the brink of another recession?

Our thought is that you shouldn’t jump to that conclusion so soon. The volatility is definitely there and we saw some major dips in the market throughout the past couple of months. However, just a few weeks ago we had the best stock market day of 2014. In fact, during mid-October, we saw the best week that the market experienced in nearly two years. Many of our clients will ask us how the market can be crashing one week with bad news globally, and then surge by 4 percent the next week? No one knows, on any given day, how or why the market will do what it does. But, as a long-term investor, it’s important to always remember the fundamentals. 

In short, you always want to remind yourself that there is an emotional toggle with investing. This toggle shifts between the emotions or sentiment that the collective marketplace is experiencing, versus, the fundamentals that fuel the market. The emotions could be anything from the fear of China slowing down to the European economy falling back into a recession. Another fear could be Ebola spreading and then causing a global economic impact. The fundamentals that fuel the market are things we think about when it comes to companies earning money or not earning money. It’s that simple. As a long-term investor, you want to pay attention to the balance of the fundamentals. 

Now, here we are in earning season where we get to hear about how companies are doing—a fundamental. After all, this is the lifeblood of the U.S. stock market. We’re about 40% through the earning season, and 70% of the companies that have reported so far have beaten expectations on the upside. Same thing with revenue, it’s coming in stronger than expected. These companies aren’t barely making it, they are actually selling more. 

So, before you worry about whether or not a recession is near, just remember the fundamentals and pay attention to emotion to determine if it’s necessary to can hone your strategy as a long-term investor.


CIA Presents at the Federal Reserve Bank and Southeastern Accounting Show

The Capital Investment Advisors team was recently engaged in a series of events on topics around retirement, paying off debt, and investing at various events around Atlanta.

On August 26 our Chief Investment Strategist Wes Moss, presented to employees at the Federal Reserve Bank of Atlanta and shared tips on how to retire sooner and how to retire happy.

On August 27-28, our team attended the Southeastern Accounting Show, a continuing education forum and conference highlighting the hottest topics in the accounting profession. This conference is hosted by the Georgia Society of Certified Public Accountants (GSCPA) who also invited Wes Moss to give the keynote address.



Wes Moss Becomes Financial Planning Expert with

Join our team in congratulating our Chief Investment Strategist, Wes Moss, who is now a Financial Planning Expert with

As the expert, Wes will be contributing articles frequently and giving advice in categories that include: Budgeting, Saving Money, Personal Finance, Planning for Life Stages, Credit & Debt Management, Retire Happy, and Self-Employment.

Read some of the latest articles here:

5 Ways to Use Your Inheritance Wisely

4 Steps to Pay Off Your Mortgage

5 Easy Steps to Start Saving Today

4 Big Money Saving Tips for Families


Rebuilding on the Horizon

They’re back. The cranes have once again arisen on the Atlanta skyline. And it doesn’t fall short of indicating that there has been some sort of economic recovery that is attracting developers to finish old projects or start on new projects in the Atlanta area.

The rise of the crane makes us wonder if we’re on the brink of another real estate or economic boom.  If we were judging just based on the growth rate of the numbers of cranes in the sky, then maybe the argument would be valid. And we are in a position where we are paying close attention and cautious when it comes to the amount of new residential projects taking place, not just commercial. The good news is that existing and pending home sales are trending higher for the year and home prices continue to be in an uptrend. Mortgage rates are also falling this year, which provides opportunities for new home buyers at lower costs. 

For our younger generation, the idea of buying a new home in years past made many feel weary. After all, this is the same generation that has been burned by two stock market crashes and a less-than-welcoming employment market. Nevertheless, they’ve shown resiliency and are now talking about and acting on purchasing homes. These individuals have brought the words “home purchase” back into their vocabulary.

From the aspect of investing in real estate within the equity markets, it has paid off handsomely. VNQ, the Vanguard REIT index, is up nearly 20% for the year. The Dow and S&P 500 are up 0.52% and 5.77%, respectively. 

As we head towards the end of the year, real estate seems to be poised for a longer term uptrend despite the crane rising again in Atlanta. The future of real estate may be good with a young generation ready to buy. And from an investment standpoint, taking profits from a space that has dominated so far this year may not be a bad idea.


5 Financial Apps for 2014

Financial Apps, Retirement Planning, Capital Investment AdvisorsOur team recently did an informal survey of our Facebook Fans on Money Matters to determine some of the top financial websites and mobile apps that consumers are using when it comes to financial planning, investing, and advice. Based on the list, here’s ten of the apps that seemed to resonated well.

1. Mint: Mint has continued to increase in popularity by offering a free, user-friendly website and mobile app that allows you to categorize your spending, personal budget, and more. You can sync your personal bank accounts, loans, credit cards, and more to see a daily snapshot of your spending. You can also use it to set financial goals for specific things you want to accomplish.

2. Bankrate: Bankrate is filled with tools for consumers to use and top news on investing. Bankrate has a variety of financial calculators for savings, loans, and more. Many people use Bankrate as a reference to finding the best credit card offers, loan rates, or insurance rates. The site also has a number of tax calculators that come in handy.

3. Yahoo Finance: Yahoo Finance is a quick and easy reference for stock quotes, individual company news, world financial news, and market data. Yahoo offers a mobile app, and both the website and app are customizable to viewing the performance of the stocks you specify.

4. Morningstar: Morningstar provides data on approximately 437,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data.  Morningstar is used by many from inexperienced beginners to sophisticated experts. The premium version of Morningstar offers a more complete analysis of stocks. But here’s a quick tip: Many public libraries subscribe to Morningstar’s premium services if you just want to research something specific.

5. Credit Karma: Credit Karma offers a free credit score and basic monitoring service. Once you create an account, you can log in at any time to review your credit status. You can use the Credit Score Simulator tool to play around with various scenarios that may affect your credit. The site also lists an array of consumer reviews from several categories include credit card offers, auto loans, banks, insurance providers, and more.

Here’s a few more worth mentioning:

Finviz: Finviz, or Financial Visualizations, offers a stock screener that lets you browse through stock data at a glance. You can create lists and specify criteria to have a customized experience.

Wikinvest: Use this to sync all of your investments from various brokerage accounts in one place. It also calculates brokerage fees so you can monitor how much you are paying out.

Sigfig: App available for iPhones, Android phones, and Window phones. This website and mobile app allows you to sync all of your investment accounts, receive a personal and independent analysis, and stay on track with their tools.

*This listing does not endorse any of the websites or apps listed above. We always recommend you consult with an advisor when making decisions for financial planning.


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