Echo Blog

Echo Blog

Should I Change My Asset Allocation When I'm About to Retire?

By Echo Huang, CFA, CFP, CPA

It takes years to accumulate and grow your nest egg with disciplined saving and investing to an amount where you finally feel comfortable hanging up your spurs and starting the next phase of your life, Retirement.  Now you are about to start ticking off the items on your bucket list; perhaps traveling with family to amazing destinations, pursuing your passion in music or the arts or volunteering with some non-profit organizations. Your portfolio, on the other hand, must continue to work hard for you in order to last at least your lifetime, and that can be 30 years or more.  

In this post, I would like to share what I think you should consider to review your portfolio and make adjustments as needed.

Although it's hard to go very wrong with a simple 50% stock/50% bond mix, there aren't any one-size-fits-all asset allocations for retirement portfolios. An individual's age, retirement income such as social security and pension income, withdrawal rate, and risk profile, among other factors, can all dictate higher or lower equity or bond weightings.  

  1. Allocation to Equity (stocks).  Assume that you have an average appetite for risk, you can take your age, subtract from 110 to determine how much of your portfolio should remain in stocks.  For example, if you are age 65, then allocate 45% to equity and 55% to bonds and cash. If you have longevity gene in your family history and your personal life expectancy is over age 90, consider using 120 instead of 110 to calculate your equity allocation.  As a general rule, you don't want to have too much money tied up in cash, and while you most definitely need an emerging fund going into retirement, that money should be in its own separate account.

Congratulations to Tyler Lodahl for Earning the Distinguished CERTIFIED FINANCIAL PLANNER™ Designation!

By Echo Huang, CFA, CFP®, CPA

We are very excited to announce that Tyler Lodahl has been awarded the Certified Financial Planner™ designation by the CFP Board of Standards. He now becomes one of the youngest CFP® practitioners in the country, as only 4.71% of active CFP® professionals are under the age of 30! Based on the recent data from the CFP Board, the current total number of active CFP® Certificants is just 80,981.

The CFP® certification is recognized as the highest standard in personal financial planning. Anyone can call themselves a "financial planner". Only those who have fulfilled the rigorous certification and renewal requirements of the CFP Board can use the CFP® certification trademarks which represent a higher level of competency, ethics and professionalism.

Through the hard work of our team members and the loyalty of our wonderful clients, Echo Wealth Management has been growing!

Avoid Lifestyle Inflation

By Amy Ng, Associate Wealth Manager

As you age and realize your earning potential, it’s only natural that you will add to and enhance your quality of life. Economic theories assume that humans are rational beings, yet the irrational action of spending beyond ones’ means is a very common reality. Many people see every income boost as a means of buying more stuff. Each raise at work results in a new addition to an increasingly cushy lifestyle filled with unnecessary purchases. The result is people putting off retirement. Even with plentiful salaries, the ever increasing investment in stuff leads them to constantly feeling like they don’t have enough money. Most of us have, or know others who have, experienced the allure of lifestyle inflation. Today’s post covers five things to consider when experiencing this enigma:

  1. Identify Your Goals
    Upon receiving a raise or bonus, one of the first best things you can do is sit down with your loved ones and discuss your personal and financial goals. Talk about where you want to be in two, five, or even ten years. Whether you want to travel more, save for your children’s educations, pay off debt, or buy a home, you’re more likely to avoid lifestyle inflation if you understand how those funds can bring you closer to achieving those goals.
     
  2. Get The Money Out Of Your Hands

Get to Know Jared Johnson, Our New Team Member!

By Echo Huang, CFA, CFP®, CPA

As my company successfully expands, I am pleased to welcome Amy Ng and Jared Johnson as the newest additions to our team. Both Amy and Jared started working here on June 11, 2018 and they are in training to be Associate Wealth Manager, overseeing and enhancing the Echo Dashboard and designing customized financial plans for clients.

These two distinguished individuals are passionate about serving people and they have various skills and strengths that will bring our company’s personalized services to a higher level.

Amy joins EWM with seven years’ experience in client administration, with three of those years specific to finance management. She graduated from Metropolitan State University Summa Cum Laude in 2017 with a BS in Finance. Amy currently studies for her MBA at Hamline University.

Jared is a recent graduate of Saint Mary’s University of Minnesota where he competed in NCAA hockey and graduated Summa Cum Laude in 2018 with dual Bachelor of Arts Degrees in Finance and Business Intelligence & Analytics.

They will enroll in a CFP® certification program soon to obtain comprehensive study of all areas of financial planning in order to become a CFP® practitioner in two to three years.

Get to Know Amy Ng, Our New Team Member!

By Echo Huang, CFA, CFP®, CPA

As my company successfully expands, I am pleased to welcome Amy Ng and Jared Johnson as the newest additions to our team. Both Amy and Jared started working here on June 11, 2018 and they are in training to be Associate Wealth Manager, overseeing and enhancing the Echo Dashboard and designing customized financial plans for clients.

These two distinguished individuals are passionate about serving people and they have various skills and strengths that will bring our company’s personalized services to a higher level. 

Amy joins EWM with seven years’ experience in client administration, with three of those years specific to finance management. She graduated from Metropolitan State University Summa Cum Laude in 2017 with a BS in Finance.  Amy currently studies for her MBA at Hamline University. 

Jared is a recent graduate of Saint Mary’s University of Minnesota where he competed in NCAA hockey and graduated Summa Cum Laude in 2018 with dual Bachelor of Arts Degrees in Finance and Business Intelligence & Analytics. 

They will enroll in a CFP® certification program soon to obtain comprehensive study of all areas of financial planning in order to become a CFP® practitioner in two to three years.

To learn more about Amy and Jared, please read their bios and see their pictures here on our web site:

http://www.echowealthmanagement.com/our-team

Let's learn more about Amy in addition to reading her bio.  She's answered these questions I asked this week:

  1. What excites you the most about your work?
    Being able to assist our clients in achieving their goals and of course building relationships!  As someone who values human connection, I revel in learning about the diversity of our clients.

What Should You Expect from Your Financial Advisor?

By Echo Huang, CPA, CFP®, CFA

You may be working with a financial advisor and wonder what you should expect from your financial advisor. You may be someone who is thinking of hiring a financial advisor as your financial picture becomes more complex and you really want to have an expert in your corner to help you better plan for your financial future. I’ve put together a list of expectations that I believe are important to consider when choosing or evaluating a financial advisor.

Savings Alone Won't Pay for College

By Echo Huang, CPA, CFP®, CFA

A college diploma opens the door to a lifetime of higher earnings. Based on Bureau of Labor Statistics, in 2016 dollars, Bachelor's degree holders earn nearly $1 million more over a lifetime than those who have only a high school diploma. Those with professional degrees earn over $2 million more. In addition, college graduates enjoy much better job security and opportunity, especially during economic downturns. Based on "The State of Entry-Level Employment in the U.S. March 2017" by The Rockefeller Foundation, seven in ten U.S. employers look for college degrees when hiring entry-level workers.

For many parents, college is one of life's most important, and expensive, investment goals. How much does it cost? How much can you expect from financial aid? How can you invest and earn more while borrowing less? I would like to answer these questions here and provide some strategies for successful investing.

Why Invest in Bonds?

By Echo Huang, CFA, CFP®, CPA

In the year 2017, the US Bonds’ return was just 3.54%, much lower than stock market returns. Globally, stock market returns were great in 2017: US Stocks (measured by S&P 500 Index) 21.83%, International Stocks (measured by MSCI EAFE Index) 25.03% and Emerging Market Stocks (measured by MSCI Emerging Markets) 37.28%. Bonds, they say, are a pretty boring asset class. The stock market is far more exciting. That’s where the biggest returns are found and it’s also the segment that the financial media tends to focus on.

Bonds have been out of favor for several years, with low interest rates not seen for several decades resulting in tiny yields. Why should you invest in bonds at all?

10 Money Management Tips for Teens

Echo Huang, CFA, CFP®, CPA

It feels just like yesterday when my daughter Nina turned one year old and was an adorable chubby little girl. She will turn 13 in three months! She loves reading, skiing, tennis, travel, choir and piano. Lately I find her watching Youtube videos on Minecraft for hours and she has created some intricate theme parks with rollercoasters and petting zoos. As a parent, I feel the urgency to teach her important skills before she goes off to college. Financial literacy and money management skills are critical for her success and happiness. So this blog post is written for her and other teens in your life.

  1. Write Down Your Needs vs. Your Wants. It's easy to spend money. What's not easy is spending money wisely. One way to help you spend money wisely is to separate your wants from your needs and spend money primarily on your needs. Try to think of the needs as immediate and what you will need in the next few months. Write down what you need with those costs in one column and write down what you want and those costs in another column. Ask yourself "Can I do without these wants?" and "Are there alternatives to my wants?". For example, you have decided that you need a cell phone. Is a used cell phone an alternative to a brand new cell phone freeing up money to spend on other items you need? Writing them down helps you prioritize your spending.

Echo Huang is Featured by Winona State University News Center Today

 

We are pleased to announce that Echo Huang, CFA, CFP®, CPA was interviewed by Maddie Swenson from Winona State University recently and is featured today in the “This is WSU” campaign:

https://news.winona.edu/11418/this-is-wsu-echo-huang/

Winona State University: A Community of Learners Improving Our World

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