July 2023: What does it mean to be truly independent? In my mind, it means financial security. That doesn’t equate to being a millionaire, of course. It just means finding that perfect balance of being able to care for yourself and your loved ones throughout your life. So this month, we celebrate independence in all its glorious forms.
Let’s start with a bit of history: July 4 commemorates the passage of the Declaration of Independence by the Continental Congress on July 4, 1776. It voted in favor of independence from Great Britain on July 2. Still, it did not actually complete the process of revising the Declaration of Independence, originally drafted by Thomas Jefferson in consultation with fellow committee members John Adams, Benjamin Franklin, Roger Sherman, and William Livingston, until two days later.
The celebration was initially modeled on the king’s birthday, marked annually by bell ringing, bonfires, solemn processions, and oratory. Such festivals had long played a significant role in the Anglo-American political tradition. Especially in the 17th and 18th centuries, when dynastic and religious controversies racked the British Empire (and much of the rest of Europe), the choice of which anniversaries of historical events were celebrated and which were lamented had clear political meanings. The ritual of toasting the king and other patriot heroes—or of criticizing them—became an informal kind of political speech, further formalized in the mid-18th century when the toasts given at taverns and banquets began to be reprinted in newspapers. During the republic’s early years, Independence Day was commemorated with parades, oratory, and toasting in ceremonies that celebrated the new nation’s existence. With the rise of leisure, the Fourth of July emerged as a major midsummer holiday. Learn more here!
Now, let’s talk about how you can take the power of those patriots and become financially independent. Here are a few ways I can help:
In the News:Also, scroll down to read some of the articles I am quoted in and have written to national media outlets this month, packed with information that I hope will help you understand more about your financial future.
Scroll down to read some of the articles I’ve been quoted in this month. I think there’s some great information in these stories that you can apply to your financial plan.
July 27, 2023: Strategies like tax-smart allocation and tax-loss harvesting save big bucks in taxable investment accounts, By Marguerita Cheng — Although taxable investment accounts do not offer additional tax benefits, investors can still minimize taxes by carefully selecting the assets they buy and using a tax-smart investment strategy.
Investing involves assuming some risk and buying assets that will appreciate in value at a rate greater than inflation over the long term. Investments can decline in value, and it is important for investors to understand the impact of taxes on their returns. It’s not just about the tax bill, but the opportunity cost of the compounding benefit that could not be derived from that amount.
While there are tax-advantaged accounts (whether tax-deferred or tax-exempt retirement accounts) that provide tax benefits to investors, these accounts are not usually flexible, with multiple rules regarding withdrawals and limits on contributions.
On the other hand, taxable investment accounts provide flexibility and freedom in terms of withdrawals and contributions but no tax benefit. Click here to read more!
Marguerita Cheng is named #2 of 100 in The Investopedia 100
Juluy 15, 2023: A Note from Caleb Silver, Editor in Chief, Investopedia.com: Dear Marguerita — On behalf of Investopedia, we’d like to congratulate you, once again, on being named among the top financial advisors on The Investopedia 100, our list of the most influential independent financial advisors in the country.
There’s a reason you continue to top this list, year after year, for the past seven years. You use your platform and your influence in the financial planning industry to make your clients and your fellow advisors smarter and better equipped to handle today’s challenges. Your work in your community also exemplifies what we mean by “influence”.
As you know, our ranking heavily weighs peer nominations as part of our methodology. It should come as no surprise to you that you were nominated by dozens of your fellow advisors who are grateful to you for the guidance you provide and the education that you so generously share. That, in and of itself, is an honor you should be proud of. We congratulate you, and we salute you for all of your efforts.
These concerns have been top of mind for me recently as my daughter graduated from high school and will be attending school out of state. If you’re like me and want to be proactive, below I discuss what you can do to make sure you stay informed if your adult child has a medical emergency. What information is protected?
Rethinking65.com, June 22, 2023 — “Guiding and nudging caregivers to also help themselves can reduce the long-term stresses of caregiving,” explains Jerilyn Klein in today’s article on Rethinking65.com.
Jerily explains: In a poignant statement that President Jimmy Carter’s family recently issued about First Lady Rosalynn Carter’s dementia diagnosis, the family shared that “As the founder of the Rosalynn Carter Institute for Caregivers, Mrs. Carter often noted that there are only four kinds of people in this world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.”
No matter where your clients are on this journey, you can help them find ways to reduce the many stresses that often come with the job, including retirement-security risk. Asking clients if they’re providing or receiving caregiving is a good first step. Seniors receiving care may be concerned about or oblivious to the burden they’re placing on their loved ones.
“Being a caregiver, it is not just financial stress: It’s emotional, it’s mental and physical stress,” Marguerita (Rita) Cheng, CFP, CEO of Blue Ocean Global Wealth in Gaithersburg, Md., says from experience.
“My dad was diagnosed with Parkinson’s in 2004, before my third child was born. His condition started to decline precipitously in 2010,” she says. “Discussing caregiving and being sandwiched is important to me professionally and personally.” Like other professionals who responded to Rethinking65’s queries about this topic, Cheng encourages family caregivers to put on their oxygens masks before helping others. We’ll get to their suggestions shortly, but first a look at some eye-opening statistics.
CNBC, June 18, 2023 — Marguerita Cheng is featured in today’s article by Cheyenne DeVon who writes, “By age 30, you should have close to the equivalent of one year’s salary saved for retirement, Fidelity Investments recommends. But if you’re not there, you’re not alone. Americans between the ages of 30 and 39 have a median balance of $17,400 in their 401(k)s as of the first quarter of 2023, according to Fidelity Investments data provided to CNBC Make It. The average is a bit higher at $46,000 but can be skewed upward by a few accounts with larger balances, which is why the median is generally a better measure.”
If your retirement savings fall below either of those amounts, the first thing to remember is that you’re not a failure, Marguerita Cheng, certified financial planner and CEO of Blue Ocean Global Wealth, told CNBC.
“Fixating on one number may not be healthy,” she says. “You don’t have the context and it doesn’t take into consideration progress made along the way.” Instead, keep this key number in mind: your retirement savings rate, which is the percentage of your income you’re contributing to your 401(k). Fidelity recommends saving about 15% of your incomeeach year for retirement, including any available employer match. If that seems like a lot of money to stash away right now, you can start off small and increase your contributions over time.
June 13, 2023: Advisor Insights, “Value Innovation” And Helping The Elderly With Their Finances — Marguerita Cheng, CFP®, RICP®, discusses “value innovation” as a founding principle of Blue Ocean Global Wealth, the importance of taking care of our elderly’s finances, and how protecting clients from themselves can present some ethical questions. Don’t miss this interview on Advisor Insights TV!
This new title is by Julia Taylor Brandus (with a little help from her dad Paul Brandus — a historian and keynote speaker, including at seven presidential libraries, Paul is a columnist for USA Today and Dow Jones/MarketWatch, and one of the most followed journalists in the White House press corps, with more than 375,000 Twitter followers: @WestWingReport).
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