Financial Fitness for Editors

Presenter: Bob Toomey

Presenter Bio:

Bob Toomey is vice president and director for research at S.R. Schill & Associates, a financial advisory firm on Mercer Island. He is a Chartered Financial Analyst TM and Certified Financial Planner TM and has a background of over 30 years in the financial industry. Bob has published extensively in his career in publications including the Seattle Times and Puget Sound Business Journal, and has also made numerous appearances providing expert commentary on CNBC and KCTS’ Serious Money program.

Meeting Description

What should editors do to maintain financial fitness in the short and long term? Northwest Independent Editors Guild members and their friends are invited for an evening discussion about financial planning. This meeting is inspired by a recent Seattle Times Money Makeover article about a local editor and writer. While the article itself focuses on an editor well into her career, our financial expert, Bob Toomey, will also address financial issues that arise at various stages of life. Mr. Toomey will discuss financial strategies accessible to the range of Guild members and after his presentation will field questions from the audience.Bob Toomey is vice president and director for research at S.R. Schill & Associates, a financial advisory firm on Mercer Island. He is a Chartered Financial Analyst TM and Certified Financial Planner TM and has a background of over 30 years in the financial industry. Bob has published extensively in his career in publications including the Seattle Times and Puget Sound Business Journal, and has also made numerous appearances providing expert commentary on CNBC and KCTS' Serious Money program.

Presentation

Bob has kindly provided us with a copy of his complete presentation for members. Please click here to view the PDF (and click the downward-pointing arrow in the top right of your screen if you would like to download it).

Meeting Notes

(Written notes from the 03/12/18 meeting by Amy McKendry)

Elaine Duncan made opening remarks, including a request for photos of four-legged friends for weekly Stet Pet posts on Twitter. Please email photos to social@edsguild.org. After Elaine’s announcements, Bob Toomey began his talk.

Bob announced that he planned to cover the following topics during his one-hour presentation:

Financial planning—what is it?
Retirement strategies
Where and how to invest
Strategies for life stages
Essentials of estate planning
Special considerations for women
The new tax bill

These are the enduring concepts of financial and retirement planning:

Abide by the 10% rule. That means every time you get paid, set aside ten percent of the money you receive and invest it.
Don’t put all your eggs in one basket. Diversify your investments by choosing a mix of savings, stocks, bonds, etc.
Make a financial roadmap. Be sure you are following a thought-out plan.
Be aware that entrepreneurs are historically less well prepared and often put off saving for retirement.
Keep in mind that you can’t live on social security alone.

Financial planning is a process that involves the following:
1) Finding the answers to key life questions, such as: What are my goals? How do I achieve them? Where am I now? How do I stay on track to achieve them?
2) Determining your optimal path to financial “security.”
3) Providing for the best disposition of your estate.

Where and how to invest:
If you were to go to a financial planner, you and the planner would analyze your income and your expenditures, account for your assets and liabilities, review your income tax records, look at estate planning and insurance needs, and talk about education goals.
The planner might use a statistical probability program to run simulations and make an educated guess as to the money you’d have at different ages based on various investment scenarios. Your expenses would be analyzed for a “terminal age.”

There are many types of investments. (See slide show for complete list.) When you buy stocks, you are buying a piece of a company. When you buy bonds, you are loaning out your money.
For the last 117 years the investment market has grown at an average of 10% per year.
Bob Toomey likes exchange-traded funds, which are easily traded and very low cost.
You can design your investment portfolio to achieve your savings goals while managing risk. Diversification confers stability. For example: stocks are riskier than bonds but tend to make more money. So you can include a mix of stocks, bonds, and other types of investments to protect yourself from the ups and downs of the markets.

To reduce investment risk you can:

Diversify your investments
Do periodic rebalancing to retain your desired ratio of stocks to bonds, etc.
Use exchange-traded funds
Don’t try to time the market
Limit holdings of individual stocks
Avoid trading and day trading
Have a thorough financial plan
Take the lowest risk necessary

Helpful hints:

Always take advantage of a company match—that’s free money.
Use will power and discipline.
Avoid credit card debt.

Mechanics of investing:
There are many ways to invest for retirement, including employee pension plans, company matching plans, 401Ks, traditional and Roth IRAs, and Keogh (defined benefit) plans. You can open an investment account using a low-cost brokerage firm, a registered investment advisor, or a bank or credit union.
Be careful of online brokerage firms—they aren’t high service. Be careful, also, with annuities: they are expensive because they have a lot of associated fees. Mutual funds are also high cost.
Pm asked: How do you know if your financial planning needs are simple or complex?
Answer: This needs to be decided on a case-by-case basis.

Strategies for life stages:
You can take higher risks when you are young and continue to take moderate risks into middle age. When you reach your 50s and 60s, you should reduce your risk by moving your money into less volatile funds. In retirement, you are in the “drawdown phase” and would likely want low risk investments.

Special considerations for women:
Women make less money than men on average, but they live longer. (See Bob Toomey’s PDF for additional information.)

Effects of the new tax bill:
There will be some changes in income tax rates because of the recently passed federal tax bill. (See PDF for detailed information.)

Other questions from the audience:
Are long-term care benefit policies worth it? Answer: Maybe not. Research them before buying.
Does real estate have a place in a diversified portfolio? Answer: Yes.

Bob Toomey ended his talk by stating that he would make his presentation materials available to the Guild. See above (“Presentation”) for the link.