Ep. 63 Launch Financial-Cyber Monday & Giving Tuesday at Sherman Wealth

Overview: Join us on this week’s post-Thanksgiving episode of Launch Financial with Ashley and Brad as we discuss our Giving Tuesday plans and local charities, along with Black Friday/Cyber Monday data and the new Omicron threat. 

What You’ll Learn:

  • Cyber Monday/Black Friday consumer data 
  • Market data and digestion 
  • The Fed’s response to Omicron variant 

Show Notes:

https://www.cnbc.com/2021/11/30/powell-says-fed-will-discuss-speeding-up-bond-buying-taper-at-december-meeting.html 

https://www.instagram.com/p/CWYziFXJL2_/ 

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Ep. 61 Launch Financial- All Time Highs In Crypto World & The Stock Market

Overview: Tune into this week’s episode of Launch Financial with Ashley and Brad as we discuss all time highs in the market and in the crypto world, along with truck driver and supply chain shortages continuing into holiday season, pandemic milestones, Biden’s infrastructure bill, and more! 

What You’ll Learn: 

  • How third quarter earnings season unfolded 
  • About All-Time Highs in the market and bitcoin

Show Notes: 

https://twitter.com/RyanDetrick/status/1457814095126741005?s=20 

End Of The Year Financial Checklist 

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Mortgage Strategies for Self-Employed Home Buyers

Morgages for self-employed applicants

Being your own boss is a great feeling with many benefits, but those benefits do not include a fast track to a great mortgage. Gone are the days of the easy mortgages, the no-income-verification loans, and The Big Short. In fact, qualifying for a mortgage may rank as one of the biggest challenges you face as someone who is self-employed.

However, given that the 30-year rates have plunged below 3%, marking the lowest they’ve been in over a month, you should move quickly because now is a great time for refinancing and home buying to lock in those historically low rates. According to data company Black Knight, “In the U.S., homeowners withdrew $63 billion in equity from their properties through more than 1.1 million cash-out refinances in the second quarter of the year — the largest quarterly volume since mid-2007”. As you can see from the data, with these all-time lows, now is the time to act.

As a self-employed business owner who just bought a new home for our growing family, I can testify that the mortgage process is not for the faint-hearted. Every time I completed a lender’s checklist they come back to me for more information. This was not my first mortgage but the time and energy it took this time around was beyond what I expected – and I’m a credit-worthy borrower and financial pro with a background in the mortgage world.

So what’s the best way to prepare? To understand the issues, think like a bank. In deciding to lend you hundreds of thousands of dollars, the bank wants to know, first and foremost, that you will be able to pay them back – steadily, regularly, over time.

Here are 3 of the biggest hurdles you may have to overcome:

SHOW YOU MEET THE INCOME REQUIREMENTS

The first thing a potential lender asks to see is your W-2 form, the document that shows salaried workers’ annual wages and withheld taxes. Business owners and independent contractors are unlikely to have W2s, and instead need to present their full tax returns, including profit & loss and deductions & depreciation, as well as their own income.

Not only are lenders not likely to be expert at understanding your business and your cash flow, but the salary you show on paper may be deceptively low. That’s because most business owners invest a sizable chunk “back into the business” when they’re getting started as well as taking deductions for travel, leased vehicles, and purchases of computers, office supplies, and even their phone.

Getting ready: If you’re thinking about buying a house, consult a financial planner, your accountant, or a trusted mortgage professional (we’ve suggested a few below) about how much to accurately deduct – or not – this year to show sufficient income and an acceptable debt-to-income ratio.

HAVE ALL THE PAPERWORK

Having paperwork that tells the full story can make all the difference, so now is the perfect time to prepare a file with the documents you’ve already collected for the IRS. Remember, though, that this year’s tax returns and records may not be enough to show your business has been steadily growing. Be prepared with records from previous years, and bonus points for data about how your sector has been doing as well.

Getting ready: Keeping good records is key so if you haven’t already started, get started now, and see what you can put together for previous years.

MAKE SENSE OF COMPLEXITY

Every company and every consultant is unique and it may be hard to reconcile your business’ specific challenges and trajectory with the solid predictability a mortgage lender is looking for. You may want to bring a trusted accountant or financial or business advisor to the meeting with the lender – someone who knows your business well and can explain its structure, operations, and cash flow in context. If your advisor can’t be there, ask them to write a brief document explaining your data. Consider also requesting profit-and-loss statements prepared without personal expenses to show the difference between reported income and actual income.

Getting ready: be prepared to explain what your numbers mean in context and turn to a trusted advisor, if possible, who can translate your numbers for the lender and help them understand you’re a good candidate.

AVOID CREDIT SCORE SURPRISES

You wouldn’t be the first, or last, person to find discrepancies in your credit score. Correct any discrepancies and make sure it’s correctly updated before applying for a mortgage. And – obviously – pay off any outstanding debt.

Getting ready: get credit reports from the major agencies and make sure that they are accurate.

If you’re in the market for a new home, let us help you and guide you through the process. With interest rates at all-time lows, whether applying for a mortgage or refinancing, we are happy to schedule a call with you for a free analysis of how that may affect your purchasing power.

We are well versed in the latest options from different lenders that may be most appropriate for your situation and have online tools to help you look at your overall financial situation to determine how much of a mortgage it makes sense for you to take on. We also have resources and experts we can refer you to, or, if you already have a mortgage professional, we will work with them to determine how much your can afford.

And we have experience: I’m pleased to report that, after what seemed like a never ending process, I succeeded in getting a mortgage with very favorable terms and – most importantly – we love our new home.

Don’t be daunted by the challenges involved with getting a mortgage when you’re working for yourself. With the right preparation and the right help, you too can make your dream home a reality!

Here are three resources trusted referral partners in the Washington area:

(As a fee-only financial planner, we have no financial vested interest in referrals. We just want to make sure you have the best advice possible!)

Jody H. Eichenblatt, Senior Mortgage Consultant at Prosperity Home Mortgage

Josh Friedson, Senior Vice President of Mortgage Lending at Guaranteed Rate

James Schneider, Loan Officer at Eagle Creek Mortgage

***

The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions.  They are for information purposes only. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Sherman Wealth unless a client service agreement is in place.

If you have any questions regarding this Blog Post, please Contact Us.

Ep. 58 Launch Financial- Unpacking The Bitcoin ETF Launch & 403(b) Plans For Teachers

Overview: Tune into this week’s episode of Launch Financial as we discuss a news heavy week including the Bitcoin ETF Launch, 403(b) plans for teachers and how they are rated around the DMV, earnings season, supply chain shortages, 2021 Black Friday Deals, and more… 

What You’ll Learn: 

  • The importance of investing and diversifying your portfolio 
  • 403(b) plans and how we can help you
  • Understanding the supply chain shortages 
  • The importance of your credit score 

Show Notes: 

Check out this episode!

Ep. 57 Launch Financial- Are Inflationary Numbers Here to Stay?

Overview: 

Join us this week on Launch Financial for Ashley’s special birthday episode as we discuss whether inflationary numbers are here to stay, southwest cancellations and holiday travel, and market volatility. Not an episode you want to miss! 

Show Notes: 

Ep 56 Launch Financial- Debt Ceiling & Market Volatility

Millennials Top $10 Trillion in Assets for First Time

Are Inflationary Prices Here To Stay?

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Ep 56 Launch Financial- Debt Ceiling & Market Volatility

Overview: Tune into this week’s episode of Launch Financial as we unpack a big news week, including debt ceiling, inflation, market volatility, Facebook’s social media outage, and more. 

What You’ll Learn: 

  • 10 things to discuss with your partner before marriage 
  • Updates on the current debt ceiling
  • Market volatility explained 

Show Notes: 

https://twitter.com/carlquintanilla/status/1446090653688008704?s=12 

10 Important Things To Discuss Before Marriage

The Financial Services Industry Is Evolving

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10 Important Things To Discuss Before Marriage

7thingsbeforemarriage

10 Things to Discuss Before the Big Day

You are excited, in love, and planning the wedding of your dreams. Probably the only money questions on your mind are the down payments for the caterers and the florists!

Yet – whether your wedding reflects a minimalist sensibility or is a no-holds-barred extravaganza – it’s better to have a good understanding of each other’s finances before the “I Do’s”. This is a time when procrastination could cost you a bundle, even if neither one of you currently have a lot of assets.

Getting married is more than just substituting the word “ours” for “yours” and “mine”.  It’s combining your finances, histories, dreams, aspirations, possessions – even your music – and making all of that “ours too. Since a significant part of those dreams and aspirations involve money, having multiple financial conversations before marriage (or right after, if you’re newlyweds!) can help you start married life on a firmer footing, with regard to financial goals.

Here are a few conversations that will get your marriage off to a smoother financial start:

1) Views on money. How we feel about money is often very emotional and very personal. Our family’s views on money can have a big impact on the way we see finances. In some families money may not be talked about. In others, one partner may hide money or spending from the other. While we might not consciously have these same behaviors, our upbringing will have an impact on how we feel about money and how we save, spend, and budget.

The best way to address unconscious – and sometimes conflicting – money behaviors is to start by recognizing how you each feel about money. Then you can take a practical approach and implement the best strategies from the past and incorporate them into your new relationship. This will also give you a chance to address any not-so-beneficial attitudes and behaviors and work to consciously change them.

2) Spending/Saving Habits. Chances are the two of you don’t spend and save money the same way. The interesting thing about spending and saving habits is that they give insight into priorities, both financial and otherwise because we tend to spend money on things we feel are most important and scoff at spending on things we see as unimportant.  Some people value saving more than anything and could be considered “tightwads”. Other people have a “live for today” attitude and spend whatever they have available, saving nothing or little for later. Most of us find ourselves somewhere in the middle.

Not agreeing on spending priorities can lead to serious conflicts down the line. While there is no right and wrong answer regarding priorities and habits, it’s valuable to know and understand each other’s habits earlier rather than later.

3) Divvying Up the Bills. This is an important conversation about how you will manage your money together. Will you have separate or joint accounts? Who will be responsible for paying the bills and investing for long term goals? A realistic understanding both of your current incomes and current debts is important so you can create a realistic budget based on your combined income and expenses.

4) Credit History. No one likes to talk about credit ratings because they highlight past mistakes and spending habits. Yet it’s essential to know and discuss your credit histories. This can help you talk about past money mistakes, current debt loads, and how to address any issues that are lurking. Having this conversation now will also help if you’re planning to borrow money for a large purchase, such as a home or car; credit history will effect how much you’ll pay in interest for loans, as well as how much it will cost for things like insurance. Many companies even pull credit for potential job applicants. When it comes to credit, it’s best not to have surprises down the road, so have the conversation now.

5) Risk Tolerance and Financial Goals. Couples often have very strong – and differing – feelings about risk and money that are deeply rooted in past experiences.  Your family may have gone through periods of unemployment, for instance, or  you may have grown up taking financial security for granted. One of your parents may have owned a business and you saw it go bankrupt,  so you might be very conservative with your money and not want to take unnecessary chances. Or perhaps they invested in a business that was a huge success.

Everyone brings a different level of comfort when it comes to risk tolerance and it’s important to understand your partner’s because it has an impact on spending and savings habits – everything from where you invest to how much money you want to set aside. Money provides a level of security that can be very powerful and risk tolerance is directly linked to that feeling of security.

6) Ongoing Financial Obligations. If this is a second marriage, are there child support or alimony payments that need to be considered in the budget process? If so, how much and how long will the obligations need to be fulfilled. Caring for elderly parents might also be a long term expense you will be facing as a couple.

7) Net Worth. When it’s a first marriage, often neither partner has much in the way of assets, but if one partner has more than the other, are you going to want a pre-nuptial agreement? When discussing net worth it is valuable to discuss not only current net worth, but also aspiring net worth. What household income level are you both hoping to achieve. Will reaching those aspirations include additional education? Will it mean switching jobs several times early in your career? Will it mean working 80 hours a week for decades? As a couple, understanding financial expectations and future net worth aspirations will help you plan a life together that will meet both of your needs, financially and emotionally.

8) Family Plans. The family size you hope to have will also have a big impact on your financial needs. Children, as wonderful as they are, are very expensive to raise. Do you both want to have children and, if so, one child or several children? Discussions about how the children will be raised and educated are also valuable from a financial perspective. Will one of you stay home to raise the children? Will you pay for day care? How far apart should the children be? Each of these answers will have a significant financial impact to the family budget.

9) Combining Physical and Financial Assets. Particularly with couples getting married later, both partners will have accumulated possessions that now need to be combined. This can be as simple as which sofa and bedroom set to keep, or more complicated when multiple homes, retirement accounts, and other investments are brought into the mix. Discussing whether property, accounts, and debt should be left in individual names or held jointly is also an important conversation to have.

10) Wills, Trusts, and Life Insurance. When you’re getting married, you don’t really want to think about death. Yet wills, trusts, and life insurance need to be updated soon after you say, “I Do.” This is true especially if you have assets or children. The process of obtaining a will or trust is fairly straightforward; it’s the discussions that lead up to it that provide the most value. Both of you should have a good understanding of what you have and what you want to happen, should the unthinkable occur.

Financial advisors can be a real asset, when it comes to pre-marital financial discussions. They can help you determine when it is best to hold assets jointly or separately. Assistance with budgeting and planning for long term goals will help you create a strong financial plan. Advisors can also guide you in building a strategy for reaching financial milestones.

So, if you’re getting married (or just got married), congratulations! And while these discussions may not be the most romantic ones you’re having, they do have the ability to bring you closer together. Planning together and sharing your dreams will give you better insight into the mind and heart of the person you’ve fallen in love with and allow you to become stronger partners when it comes to reaching your goals as a couple, emotional as well as financial.

***

The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Sherman Wealth unless a client service agreement is in place.
If you have any questions regarding this Blog Post, please Contact Us.