Reverse Financial Set-Back, & Keep Eyes on Employers

I trust that this day finds you well. With all the U.S. impeachment drama, I suspect you can use some positivity in your life.

Here’s some weekly explosive motivation for you – it’s the winning 100-meter race by Christian Coleman at the World Track and Field Championships in Doha (I’ll save you the map lookup – Doha is in Qatar). I am a former track athlete and there is nothing like the competitive spirit displayed at a track meet to keep me motivated. The lesson here is simple – keep striving to overcome a previous set-back; Christian Coleman worked extremely hard to finally beat his idol, Justin Gatlin, who beat him in this very race two years ago.

I suspect that you may have experienced a financial set-back that feels insurmountable and prevents you from moving forward. As you manage your money and investments over the last few months of the year, I want you to stay positive and take action to change the outcome. You are in control of your own destiny – remember, you are the CEO of your money.

Have you already thrived this year in overcoming an investing or money challenge? Leave a comment below.  

So, I’ve been reflecting a lot this week on how intertwined we can often be at our places of employment, and thus you should be aware of how your employer-sponsored healthcare costs are rising and what opportunity may exist in your employer retirement plans. Check these out:

-          Cost of Employer-Provided Health Coverage Passes $20,000 a Year. The Wall Street Journal reports that “the average total cost of employer-provided health coverage passed $20,000 for a family plan” in 2019 and the “the average annual amount workers paid toward premiums for the family plans grew 8%, to $6,015 this year.” Employees are thus bearing approximately 30% of employer-sponsored health care costs. And, if that isn’t scary enough, deductibles are also rising as well. Sadly, the rate of growth in coverage costs, including those borne by employees, has continued to outstrip rises in inflation and wages. Keep watch of how much you are paying in health care costs, and how much your employer is asking you to bear.

-          Bit by Bit, Socially Conscious Investors Are Influencing 401(k)’s. Want to get exposure to socially conscious investment portfolios? Make sure you’re inquiring for such opportunities in your employer-sponsored 401(k) plan. The broad category of ‘sustainable and responsible investing’ grew 38 percent in the U.S. from 2016 to the start of 2018, to $12 trillion in assets under management, according to the US SIF Foundation. That represented one out of every four dollars of the $46.6 trillion under management, the group noted. Now, you may think that socially responsible funds generate less return than non-socially responsible funds. But, I challenge this way of thinking. Morningstar, which has funds that screen for environmental, social and governance (or ESG) reported that, “among the most rigorously screened 10 indexes, eight outperform their non-E.S.G. equivalents — in some cases, by substantial margins.” That said, I want you to keep a few things in mind as you consider how to take advantage of socially responsible investing:

-          Figure out how the fund is defining social responsibility. E.S.G screens are common, but you still want to see exactly what the funds hold in your portfolio.  

-          Check the fees. By definition, E.S.G. and socially responsible investing funds are actively managed and typically carry higher expense ratios than passive index funds.

-          Check the overall performance returns. See the portfolios fare relative to the other non-ESG funds. Remember, under federal law, plan sponsors have a fiduciary obligation to employees to put the economic interests of participants ahead of other considerations when making decisions about retirement benefits.

And, speaking of employment, I often get questions of what I do day-to-day at Next Street in my role as a Partner. Well, I’ll tell you – check out my guest appearance on BridgePrep’s Podcast. I talk about leadership, perfecting your craft, and building relationships – all factors that can help you improve how much value you bring to an organization, which hopefully translates into the income you earn as well. I am pumped because BridgePrep was started by Charisse Says member Jamal Austin, an entrepreneur extraordinaire who aims to provide accessible, affordable, and high-quality learning opportunities that meet the needs of individuals pursuing in demand careers.

Until next time, have a wonderful week!