In working to serve clients better, I use a tool to gain insights into preferences and tolerances people have towards investing. A Risk Profile Assessment tool helps me understand your ability and disposition towards taking on financial or market risks. It aids in determining the proper investments or portfolios to invest in; it helps align investors with the appropriate risk level associated with their personal goals.

The easiest way to discover your risk profile is through a Risk Profile Assessment, like the one you can find on Yieldfa.com. It’s like a financial personality quiz that reveals a person's ability or willingness to take on risks. It consists of questions that measure your attitude and understanding of financial markets. It also helps gauge how you might react to certain investment scenarios. Your calculated responses determine your risk level. The results are used to develop a portfolio. 

Typically, there are five types of investors. Your Risk Profile Assessment score will determine which type of investor you are. 

Conservative

Conservative investor’s focus is on protecting principal instead of seeking higher returns. They are comfortable accepting lower returns for a higher level of security and more liquidity of their investments. Overall, a conservative investor minimizes risk of loss.

Moderate-Conservative

Moderate-conservative investor’s objective is principal preservation but is comfortable accepting a small degree of risk to seek some degree of appreciation. This investor is willing to accept lower returns, and is willing to accept minimal losses.

Moderate

Moderate investor permits some risks in an effort to enhance returns. They are prepared to accept modest risks to seek higher long-term returns. A moderate investor can endure a short-term loss for the trade-off of long-term appreciation.

Moderate-Aggressive

Moderate-aggressive investor places a higher value on long-term returns and is willing to accept significant risk. This investor believes higher long-term returns are more important than protecting principal, and may endure large losses in favor of potentially higher long-term returns. 

Aggressive

Aggressive investor prizes profitability and is willing to accept substantial risk. This investor believes maximizing long-term returns is more important than protecting principal. An Aggressive investor may endure extensive volatility and significant losses.

Because people change over time, it is important the risk assessment is updated on a regular basis. If it has been a year or more since you have completed one, I highly encourage you to take our risk assessment on our website, www.yieldfa.com (scroll down a tad to find the assessment). Knowing your risk tolerance gives us, as we work together, an understanding of what’s important to you as an investor, and will help in reaching your overall goals.

We’re nearing the time when the school year ends and seniors graduate, eager to start the next stage of their lives. But what does this mean for their parent’s insurance? There are pros and cons for keeping your kids on your family plan. Regardless what direction you choose to go listed below are a few age limits regarding insurance to get you planning for this new phase of life.

Auto Insurance

Kids can stay on their parents' auto insurance even if they have moved out and they’re away at school and still listing the parent’s home address as their primary residence. In addition, children not enrolled in school, considered an eligible dependent (insurers have different definitions), still drive a vehicle owned and insured by a parent, are eligible to stay on their parent's insurance.

If an adult child has a driver's license and is living in at home, then normally your auto insurance company may require that she or he is listed on your policy, regardless of their age.

People living in the same household have access to the insured vehicles, so insurance providers want all licensed household members placed on your car insurance policy. This allows your auto insurance company to look at all drivers' risk factors and calculate car insurance rates accurately.

Health Insurance

Per federal law, a child can remain on their parents' health insurance until their 26th birthday in most states. There are no restrictions before then, so the child is eligible for coverage under their parent's plan even if married, and/or not in school.

Claim As Dependent For Taxes

The Federal Government allows you to claim dependent children until they are 19. This age limit is extended to 24 if they attend college. If your child is over 24 but not earning much income, they can be claimed as a qualifying relative if they meet the income limits and/or if they are permanently disabled. In order to be claimed as a dependent, a child cannot have a gross income of more than $4,300 in tax year 2021 or (2022.Source: IRS)

These days more and more Americans are finding themselves in debt. Debt is a heavy burden to bare. The more in debt we become the heavier that burden feels. Once in debt the borrower becomes a slave and their debt is bondage. How is it so many people become trapped by debt? Usually it comes down to the interest you incur on that debt.

“Interest never sleeps nor sickens nor dies…it has no love, no sympathy; it is as hard and soulless as a granite cliff…Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away form it; you cannot dismiss it. It yields neither to entreaties, demands, or orders; and when you get in its way or cross its course or fail to meet its demands, it crushes you.” -J. Reuban Clark, Jr.

Debt is something that has followed mankind from ancient times to modern day. Countless leaders have advised against the plague of being in debt and the shackles it places on our abilities to progress and do the things we’d like to. Benjamin Franklin counseled, “Think what you do when you run in debt. You give to another power over your liberty.”

Don’t ignore your debts. When you are in debt you become a slave. In essence the debt becomes your task master and it owns you and your commitment until the bill is paid in full. Ignorant or irresponsible borrowers may find themselves ensnared by this financial captivity, struggling desperately to escape its clutches. Debt is inflationary. When you buy on credit you’re really buying at a higher price. This is in part due to rising inflation rates in the economy, but even more so with our own personal inflation rate- the escalating cost of living for our own families. When we purchase things on credit, not only do we pay interest, but we end up purchasing an item far greater than we can afford in the first place. Over time, this contributes to the inflation rates for our individual families. It can seem like a long dark endless tunnel. No one should have to feel helpless in their finances. Remember that little steps, small changes, and dedication is all it takes to start the process of regaining control of your finances. The next step is to stop borrowing and focus on saving. If there is something you want to purchase exercise self-control and set money aside for it.

Keep track of your spending and use a budget. By setting a budget and living within that budget obstacles created by debt will crumble away and the light at the end of the tunnel will begin to shine through. “If there is any one thing that will bring peace and contentment into the human heart and into the family, it is to live within our means,” insurance executive Heber J. Grant once expressed. “And if there is any one thing that is grinding and discouraging and disheartening, it is to have debts and obligations that one cannot meet.”

One way to avoid debt in the first place is to make purchases with cash. By doing so we can put a brake on our spending. People who have the cash or can write a check for the purchase of an item usually end up making much more modest purchases than those who buy on installment credit.

Avoiding debt bondage is a “happiness law.” When we undertake debt it’s often for things on our “want” list. Uncontrolled wants are insatiable. If you allow your wants to preoccupy your mind, you will never be satisfied. You will never find peace of mind, security, or happiness, only bondage and misery, thus we diminish our capacity for “happiness” experiences. Understand that freedom, peace, and contentment come into our hearts when we live within our means. Peace, prosperity, and success come to those who have interest working for them rather than against them. Pay your debt and enjoy the freedom that comes from it.

Global geopolitical events have historically affected oil and gasoline prices worldwide as production and supply issues evolve. As the largest oil producer in the world, the Unites States accounts for roughly 20% of total world production. Saudi Arabia accounts for 12% and Russia accounts for 11% of total world production. Even though Russia only produces 11% of total production, it accounts for over 10% of total world oil exports, making it one of the largest exporters of oil and a key global provider.

After their invasion of Ukraine, the imposed sanctions on Russia affects these markets since essential payment methods have been restricted, thus not allowing Russia to fulfill ongoing transactions. The result is a butterfly effect, affecting the rest of the world. The International Energy Agency noted that global oil markets were already tight before the Russian invasion, and commercial inventories have been at their lowest levels since 2014, thus compounding global supply constraints.

According to Eurostat, European countries import about 30% of their petroleum products and about 40% of its natural gas from Russia. The major gas/oil pipelines make their way across Ukraine from Russia to European countries in the western part of Europe. Ukraine has been charging Russia billions to use these pipelines since Ukraine broke free of Russia in the early 1990’s. It’s not just Europe that is feeling the ramifications of current events, we’re experiencing it here in the United States as well.

Even though the U.S. has curbed much of its appetite for oil and gasoline over the past few years, demand among emerging economies has increased. Fossil fuels, including natural gas, petroleum, crude oil, and gasoline still account for roughly 80% of energy consumption worldwide according to the International

Energy Agency. Since oil is a primary energy source, rising oil prices can quickly translate into higher prices in different parts of the economy.

Inflation, as measured by the Consumer Price Index (CPI), is made up of various components, including energy, food, and transportation. These three components represent about 20% of the CPI, all of which are directly affected by oil prices. As a larger portion of consumers’ budgets is spent on these three, the less disposable funds consumers will have to spend on other items.

Crude oil is priced in two primary markets, international Brent and as domestic West Texas Intermediate (WTI). Both are priced per barrel and determined by multiple factors, including production, supply, demand, economic growth, weather, and geo-political issues. Unfortunately, Brent and WTI prices had already been rising due to supply constraint issues and increasing demand. The emergence of the Ukrainian conflict has propelled prices even higher, eclipsing $100 per barrel for Brent in February, a level not reached since 2014.

Someone once said, “Inflation means that your money won’t buy as much today as it did when you didn’t have any.” We may chuckle at this, but inflation is no laughing matter. Some people even think that a small amount of inflation is good, showing that demand is slightly higher than supply, indicating that the economy is growing.

By definition inflation is an increase in the price of a good or service without any corresponding increase in the quality of the good or service. In other words, you pay more money for the exact same item. I’m sure everyone has noticed the jump in prices at the grocery store and the gas pump, as well as in housing, cars, and even utilities, with electricity prices surging 4.2 percent in January alone. Inflation has risen 7.5 percent in the last year, which is the biggest spike since 1982.

As a teenager/young adult, I remember well the inflation of the 1970’s and early 1980’s. At that time housing was going through the roof in Los Angeles, where I was raised. Proposition 13 was put on the ballot to roll back property taxes and limit their increases, because property taxes had inflated so much due to the massive increase in home values.

During this same time period gas went up from about $0.36 per gallon in 1972 to over a dollar, around $1.19 per gallon in 1980. I did a lot of homework for my high school classes while sitting in gas lines on the odd numbered days of the month. Now we have a return to the highest inflation in the last 40 years.

Inflation is a regressive tax, meaning it is applied uniformly, taking a larger percentage from low-income earners than from high-income earners. This results in a heavier impact on people with lower-incomes or that are higher-consumers. This recent, steady rise in prices has left many Americans less able to afford food, gas, and other necessities.

It’s a bit like high blood pressure, known as the silent killer. It usually increases in such small amounts that a person doesn’t notice it, not until they look back and see how much it has increased over 20 or 30 years. Twenty years at two percent is a forty percent increase (not including compounding). It’s the large increases within a year that catches the attention. We all know what it does at the gas pump, here is how it works with investments.

Let’s say that your rate of return on an investment is 10 percent, and you are in a 24 percent tax bracket-how much of your 10 percent return vaporizes into taxes? Twenty-four percent of it. That leaves you with a 7.6 percent return. Now let’s say we have a five percent inflation rate. Your 7.6 percent return now becomes a 2.6 percent return, because five percent of it vanishes due to inflation. Do you see what just happened? You lost 74 percent of your anticipated return to taxes and inflation. In other words, if you are in a 24 percent tax bracket and inflation is at five percent, it’s like being in a 74 percent tax bracket. Your real return-after taxes, after inflation-is 74 percent less. Five percent inflation destroyed as much of your return as a 50 percent tax rate.

In spite of the dark shadow cast by inflation, there are ways to plan and protect your finances. You can establish a plan to overcome many obstacles created by inflation. Minimizing personal spending and creating a budget (and sticking to it) can create a cushion of security. Reducing housing costs by trading in a large home for a smaller one can reduce monthly outflow for items most subject to inflation: property taxes, utilities, insurance, and maintenance. Another tactic could be to add investments to your portfolio that are more likely to increase in value as inflation rises, while at the same time, balancing stock investments with conservative options to maintain stable returns. Above all, remember it’s how much you keep that matters most.

Since the pandemic erupted onto the scene back in 2020 government spending has again been on the rise, and so has their role in our day to day lives. The Federal Reserve (the Fed) is starting to reduce its holding of mortgages and Treasury securities. The Fed grew the money supply in 2020 by 26 percent, in 2021 they grew it by five percent. We are starting to experience the effects of this inflation.

With mounting regulatory burdens, higher taxes, out of control government spending, and all the new mandates, the government seems to have become the leading lady in our own individual stories. There are those that are determined to push Washington back to its pre-pandemic role. “Government, to me, should be in a supporting role, not a leading role; a watchdog, not a cow to be milked,” said Sen. John Barrasso (R-Wyo.). “The goal is to help people get back on their feet but not to make this the new normal.”

A survey done by Gallup in 2021 found that more and more Americans have shifted back to favoring a less-interfering approach when the government is addressing the nation’s problems.

In another survey Gallup found that at least half of Americans since 2005 have said that the government has too much power, peaking at 60% in 2013 and 2015.

So what does this all mean for our economy? There have been many academic studies which have shown an inverse relationship between the size of government and economic growth. For example, the economy of the U.S. used to grow at an annual rate of 3%, but the average rate has dropped to 2% in the last two decades, while government’s spending has increased. Since the terrorist attacks in 2001 big government got even bigger and has continued to enlarge its role ever since.

Government spending has increased from 35 percent to nearly 44 percent of the GDP over the last 25 years. While the National Debt has grown to 128.1 percent of GDP. Milton Friedman once said, “The thing you should keep your eye on is what government spends, because that’s the true tax.”

In other words, if the government is spending half of what our country is producing, that’s half the money out of our pockets, which leaves us only half free. In the big picture, it's not always the deficit that is the critical variable, the key thing to note is how the government is financed. The government is clearly taking on more debt than is logical in any circumstance.

A healthy economy does need some government to enforce appropriate regulations, but where is the line? How much is too much? Most economists would agree that there are always circumstances when higher levels of government spending would have a positive impact. More often than not, real economic growth happens with less government interference, and more freedom to the people, and business owners.

There is always a price to be paid when government spending gets out of control. That price is paid out of the pockets of the citizens and the economy slows down. According to The Heritage Foundation, there is overwhelming evidence that shows when government spending is too high, America’s economy slows.

Growth happens when we the people, and businesses, keep more of our income. That is why tax planning is so important. The more you are able to keep, save, invest, and spend yourself, the more the economy grows!

For example, in a business sense, if a business saves 10 percent in taxes, on $1.0 million in profit, that extra $100,000 could be used to pay for additional growth opportunities, hiring employees or increasing wages, new machinery, or other opportunities to help the business thrive.

A healthy economy, generally grows north of three percent, less than that and it is more of an anemic economy. Our current economy is anemic! We need less government, so we can grow and prosper. How we achieve this, I am not sure, as it seems most of our elected officials continue to vote against the people. With all that is happening, perhaps the best thing we can do is hold our elected servants responsible for the job they are doing, and remember to save first and spend what is left over!

Most of you know me, as I have either worked with you for many years, or a few months, I have been in some aspect of the financial industry since 1987. Though based in McKinney, Texas, I am able to help clients all over the country.

Years ago, I was meeting with an easy-going couple. They asked me a question that could have been answered with either a “yes” or a “no.” Being a little silly, I answered, “Yes, you can’t.” We got a chuckle from my oxymoronic answer, as we addressed their needs. Explaining my answer helped them understand that depending on their choices and overall goals, they could choose either strategy. They could proceed with the “yes” strategy, but it would take them down a road that wasn’t advisable. The “no” answer would give them a more positive solution.

Since that conversation I have given that answer, or one similar, to thousands of different questions people have asked. “Yes, you could proceed, but it may lead to an unsound position and might not have the best results.” Or perhaps, “yes, you could make that choice, but there could be something better.” It seems we always have choices.

Some time later I was meeting with a good friend of mine to discuss some marketing ideas. I was trying to come up with a logo that would represent the foundational ideals of my business. One important thing that I have always believed in is the ability to act, do something, or make progress towards a goal.

Being that I am, what I would say, a realistically positive person, I really do like to tell people, “Yes you can do this!” Why not develop a mark or symbol that represents a “YES” answer? Our discussion led to creating something similar to the

exclamation point, hence the Y with a dot under it. It was during this brainstorming session we developed what we named a Yestion Mark™.

The dot represents each of us on a path, and just like in the Y, our path will diverge with choices we encounter on a daily basis. Some of those choices can seem small and insignificant, while others may seem big. It’s times like these that we all need more encouragement and support. The Yestion Mark means, “YES! You can do this; YES! You can accomplish your goals!”

Part of my mission as a financial advisor has always been to help people make choices that will solidify their future in an uncertain world. To do that I advise my clients to make choices that Yield a Secure Tomorrow.

It's not always easy to Secure Tomorrow. Thankfully, we as people are able to do hard things, it's in our nature. That’s how we grow. I love assisting people with this growth process. At the start of a new year, as we all look to improve our current circumstances, when questions arise, remember I am here to help!