Market Crash or Market Opportunity?

At the end of every year I take some time to evaluate my portfolio and how I’ve allocated all of my investments.  I always take into account changes that have occurred over the past 365 including sectors or investments that have take off, and others that have hit the downhill slope.

2015 was an interesting year.  After a rough August, things ended fairly flat, and my portfolio overall endured a .4% loss.  Pretty close to how the S&P 500 performed.

Anyone paying attention to the markets so far in 2016 may be feeling a bit rattled at this point.  My personal advice… Don’t Be!  Investing is a long-term game.  2016 may very well be a down year or even the beginning of a multi-year bear market.  Take advantage of the opportunity!

A good friend of mine is an Advisor at Morgan Stanley.  His opinion is that based on his personal analysis of the fundamentals, it’s likely that we’ll see a market retraction this year.  But is that any reason to run for the hills? Heck no! Stay the course and treat the market decline as an opportunity.

Don’t forget about dollar cost averaging!  Aside from compound interest, dollar cost averaging may be one of the most killer investing phenomena to take advantage of.  If you invest money consistently – through the market ups and downs – you will end up with a lower cost basis over time.

Think about it this way, if you continuously save and invest your money in the market, you will inevitable buy more stock when the market goes down and less stock when the market is going up.  That’s the beauty of dollar cost averaging!

Continue reading Market Crash or Market Opportunity?

Why Index Investing IS Sexy

Has anyone heard of Technit360? It’s a cutting edge company on the verge of exploding returns. They’ve developed this new proprietary technology that’s used across all mobile device platforms!

I’ve read too many articles and received too many texts from friends with similar pitches… Whether it’s a cutting edge tech company or a pharmaceutical company on the verge of FDA approval for a lifesaving drug; typically these types of investments never yield the expected returns.

When it comes to my retirement investments, I take a more prudent approach. I’m not one to sacrifice by diligently saving and then gamble on some high risk, high reward investments.  Remember, investing is not gambling.  At the end of the day, I’d rather gradually accumulate wealth and watch my net worth increase over time by using index funds. Let me tell you why index investing is sexy.

Proven Returns with Less Risk

One of my all-time favorite investors, Warren Buffet, said it best when he stated that by “periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals”.

That’s a lesson that took me a while. I made plenty of financial mistakes in my 20’s. One of which was convincing myself that I was the next great stock picker. What I soon realized is that index investing is sexy as hell.

Continue reading Why Index Investing IS Sexy

Should You Pay Cash or Credit?

With my dreams of winning the Power Ball dashed last night, so are my visions of swimming in a pile of cash… *sigh.

Think about being able to walk around with a fat wad of bills in your pocket and drop greenbacks for everything you buy. It’d be pretty nice huh?

But back to reality, why would you want to use cash in the first place? There are some clear benefits to using cash, but if you’re a financial superhero you should have the wherewithal to take advantage of credit cards.

So why use cash??

Using cash is a great way to curb spending. A Dun and Bradstreet study found that people generally spend 12-18% more when they pay with a credit card. There’s something about human psychology that makes it far too easy to swipe a card and voila! You bought something. For some reason, people are far more reluctant to shell out a few Benjamin’s when they have to pull it out of their wallet to pay.

Plus, if you can’t manage a credit card balance then cash is the way to go. With APRs as high as 20% no one can afford to pay that kind of interest. If you aren’t diligent enough to pay off your credit card balance then USE CASH!

So why use a credit card??

Let’s face it, credit cards are convenient. You practically need them today to pay for anything online, book flights or use Amazon.

Not to mention, credit cards give you a paper trail of your transactions without keeping physical receipts. I use our credit card statements to feed into our budgets each month. It’s an easy way to see where all of our money is going.

The single biggest benefit of using credit cards… BENEFITS! From airline miles to cash back, there are tons of offers out there from credit card companies.

My wife and I choose to limit ourselves to two credit cards for simplicity sake. We used to rack up Alaska Airlines miles until I determined that the Fidelity Amex would be more beneficial.

Basically we get 2% cash back on ANY purchase deposited straight into our Fidelity account. Right now we have it feeding directly into my son’s college 529 plan. It’s unbelievable how quickly it adds up when 2% of everything you buy goes into the account automatically (and we try to put every purchase we can on it). Plus, those contributions grow since they’re auto invested into a long-term target date fund.

In the end, everyone needs to have a financial plan. Maybe credit cards don’t work for your particular situation. But if you have the discipline to use them wisely and pay off the balance every month, then why not take advantage of a free flight or cash back?!


photo cred: Tax Credits

4 Side Hustles That Have Paid Off

When it comes to personal finance, there’s plenty of advice out there to budget and control expenses. But I think it’s equally important to pursue multiple sources of income. Let’s face it, there’s a ton of benefits to having more than one income stream: security from a job loss, additional income to pay off debt or to save, opening the door for new opportunities, and so many more.

Frankly, I find that I just have difficulty saying “NO”. Combine that with the fact that I’m a complete busy body and a finance nerd and I can’t help but get my hands into a number of side hustles. Trust me, I’ve jumped into quite a few opportunities that haven’t panned out; but here are 4 side hustles that have paid off:

1. Construction Accountant/CFO

A friend of mine recently got out of the military and started a construction company in 2013. Initially, I was pretty apprehensive to take on the accounting and finance strategy for his budding business.   Not only was it a fairly large commitment, I really had no experience in the construction industry.

I’m technically a contract CFO for the company and oversee all things financial. But the employment relationship is very informal. I get the payroll and tax filings done in a timely manner and handle the bookkeeping throughout the month on my time.

In the end, this has turned out to be a great opportunity. The income isn’t significant, there isn’t even a set pay schedule. I’m typically paid once jobs are completed depending on the profit margin. However the knowledge that I’ve gained is incredible. I had no idea all of the ins and outs of job costing, required filings, and accounting specifics for the construction industry.

Income: Ranges from $2,000 – $4,000 a year.

2. Adjunct Accounting Faculty

Back in 2012 I saw an opening for a part-time accounting faculty at the community college in my area. It was one of the few positions that didn’t require a Master’s degree as long as I had a CPA license.

With no prior teaching experience, I figured I didn’t have a great shot at landing the job. Luckily for me they recently had a resignation and really needed someone to step in on short notice. I was hired on a probationary period beginning fall quarter and I’ve never looked back. Since then, I’ve been teaching the Accounting 200 series (1 class each quarter).

Class is held twice a week for 2 hours, so it’s definitely not a passive income. But it’s an evening class which allows me to teach outside of my 9-5. The greatest benefit to me (besides the additional income) is that I’ve been able to improve my public speaking and coaching skills (which helps as a Manager). I’ve also discovered a big passion of mine and who knows? Maybe I’ll pursue teaching as a career.

Income: $3,100 per quarter x 3 quarters = $9,300 a year.

Continue reading 4 Side Hustles That Have Paid Off

The Cost Of Raising Kids

There is no job that’s been more rewarding in my life than being a dad.  It’s not always cupcakes and balloons, but raising my kids (now age 2 and 4) gives me more satisfaction than anything.

Being the finance nerd that I am, I can’t help myself but to go back and analyze all of the dollars that we’ve spent (and will spend) raising our two boys.  Just to forewarn you, there are so many intangibles that outweigh any amount of money that can be quantified, but this post is aimed at looking at our true cost of raising kids.

According to the latest annual “Cost of Raising a Child” report from the U.S. Department of Agriculture, it will cost the average American family $245,340 to raise a child from birth to age 18, not counting the cost of college.

So let’s take a look at what the cost of raising kids has been in the Hinson household:


From the moment your children are born you will be paying for their medical expenses.  For the birth alone, we ended up paying about $1,200 for each kid.  Remember, it’s not just the healthcare costs for my wife but it also includes co-pays and tests for your new addition as soon as they enter the world.

My wife and I both have excellent insurance and currently we have both of our kids on her plan.  Her company’s premiums are 100% paid for an employee, but jump to $246 per month to cover both kids.

Let’s not forget all of the doctor’s visits outside of their scheduled checkups.  We meet our $100 deductible for each child every year, pay a $30 co-pay for doctor’s visits and any emergency care. So far we’ve been to the emergency room on two different occassions, each visit costing $300 just to be admitted.  I have no doubt that with our two little monsters they’ll be on a first name basis with the E.R. doctor in no time.

By my calculation, I estimate about $64,476 in healthcare costs (barring braces or other medical conditions…). Continue reading The Cost Of Raising Kids

To Blog or Not to Blog?

7623744452_7222654f38_zYou may have noticed that I quit blogging for some time.  My last post Top 5 Financial Successes in my 20’s was from September!  So why the sudden hiatus?  Well, to be perfectly honest, I’ve been busy.  As you know, I’m a huge advocate of increasing your number of income streams.  I truly believe that the best way to increase your wealth (besides the power of compound returns) is to diversify and increase where you generate income.

Blogging has always been extremely enjoyable to me.  It’s incredible to have a platform to get your ideas out there and be heard.  But, at the end of the day I’m under no illusion that blogging will get me rich.  In fact, I think there are far more lucrative avenues to pursue in order to reach my financial goals.

I am in no way quitting the blog or abandoning my own financial advice, but I do want to give an update on what I’ve been up to before I continue on.

1. Securing new clients.

Recently I’ve been engaged to assist a small tech startup with establishing a new system for their accounting records.  I posted an advertisement for accounting/finance training and I received an inquiry from a gentleman that started a coding school.

He’s an extremely bright guy and has had plenty of experience with start ups but he definitely needed a hand setting up his financial processes.  Through the end of the year we’ve been working on setting up his books in Xero and figuring out what the best practices will be for his budding business.

So far, it’s kept me fairly busy outside of my 9-5 but he’s already connected me with several of his colleagues with small businesses that may need similar assistance.

I also have a friend that recently started a kids furniture business.  It’s a small operation right now, but I’m working with them to finalize their financials and taxes for the year.

2. Preparing for Winter Quarter

The end of winter break also means that class is back in session.  This quarter I’ll be teaching the Accounting 200 intermediate series at the local community college.  It’s a 3-way ITV with two satellite campuses.  It’s kept me fairly busy setting up the course and planning out the quarter to the point that all that’s left is to lecture 2x each week.

3. Working the 9-5.

Let’s not forget how I keep the lights on in my household.  End of year means tying up all of the loose ends from 2015 and preparing for 2016.  I have some big plans and huge goals for the coming year and I’m excited to implement some positive changes for our agency.

4. Family Time.

First and foremost, my family will always be prioritized over any financial endeavor that I pursue.  The holidays were fantastic.  We took a vacation to Kauai (with some great vacation hacks I might add) and really got into the holiday season. From a Santa dinner cruise, a Gingerbread house building party, house decorating and everything in between; we really maxed out the holiday season with our two boys.

Across all facets of my life, I have some big plans for 2016 which includes dedicating more time to the blog.  I can’t wait to share my financial journey and any advice that I can along the way.  Here’s to a great year, cheers!


Photo cred: Tsahi Levent-Levi

Top 5 Financial Successes in my 20’s

For many, your 20’s can be considered lost years. Aimlessly trying to figure out the overall direction of your life. This is the era where mistakes are made and lessons are learned.

Earlier I detailed the top 5 financial mistakes I made in my 20’s. Let me tell you, it was difficult to whittle the list down to 5. As I wrote that post I reflected on those mistakes, but also realized that I had some great successes in my 20’s as well. It was the decade that I set a foundation for financial success for the future and I’d like to share the top 5 financial successes in my 20’s.

#1. Started Early

Looking back, I wish I would have had my parents open a custodial IRA account for me at 17. My first paychecks from making pizzas would have been much better spent in an IRA than on a knock-off sound system for my 1990 Chevy Corsica… yikes! It pains me to think about my financial priorities as a teenager.

Luckily for me, I took a couple of finance classes in college and realized early on how powerful compound returns are in building net worth. Albert Einstein said it best, “compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it”.

I knew long before I started earning a respectable paycheck that I needed to prioritize saving and investing. Taking advantage of a long-term mindset to build net worth has served me well.

#2. Established a Retirement Plan

I remember my first finance job in college was as a Finance Intern at a chemical distribution company. I’ll use the term “finance” loosely as I was usually tasked with restocking the company fridges and snack drawers when I wasn’t doing data entry.

One thing that stands out was the company’s policy of automatic enrollment in their 401K plan. I remember it because I recall opening my first paycheck and asking, “What’s this money being taken out for a 401K?” Not my proudest moment, but I had to google a 401K to figure out what the heck it was!

That initial 401K was eventually rolled into an IRA and I’ve never looked back. I began reading as much as I could on retirement planning and I mapped out a retirement plan in my early 20’s. Take a look at how my wife and I invest our Roth IRA portfolios for retirement. Continue reading Top 5 Financial Successes in my 20’s

5 Steps to Open an Investment Account

So you’ve decided to start investing… now what? Well, you’d be surprised how simple it is to get started. Just like many things in life, getting started is half the battle.

Let’s take a look at 5 steps to open an investment account so that you can start your journey to financial independence.

#1) Select Your Brokerage Company

Nowadays, there are so many options out there. Brokerage companies are all competing to manage your money and hold your accounts. My best advice is to take 3-4 of the most reputable companies and research them. Take a look at their FAQ page, look at their reviews, and get a general understanding of each company. There are pros and cons of each, and in a future post I’ll be doing a comparison of a couple of the major companies.

I currently use Fidelity for our retirement accounts. However, I’m a big fan of Vanguard as well and I use Capital One for our taxable investment accounts. There are benefits and downfalls of each, but for retirement, I think Fidelity and Vanguard provide a great service. I’ll be using Fidelity as the example for setting up an investment account because it’s what I’m most familiar with, however the steps are very similar to establish an account at any brokerage company.

So for this post… Fidelity it is! Go to and choose ‘open an account’ at the top of the screen.

#2) Determine the Type of Account

Are you starting a portfolio for retirement? If so, then a traditional IRA or Roth IRA will be the type of account for you. Are you saving for your child’s college tuition? Then the 529 account would be a great fit. Are you interested in general investing and just want a no-strings attached account to set up your investment portfolio? Then a standard brokerage account will work. There is even an option to open a “Managed Account” which means that an experienced finance professional will actively manage your investments. My personal opinion is to avoid actively managed accounts, become a financial superhero yourself and save the fees that a financial professional will charge.

Here’s a look at the account options you have at Fidelity. Continue reading 5 Steps to Open an Investment Account