Financial Fundamentals

How Credit Inquiries Impact Your Credit Score: Hard Pulls vs. Soft Pulls

Your credit score plays a critical role in your financial life—determining everything from whether you qualify for a loan to the interest rate you’ll pay. One often misunderstood factor affecting your credit score is the credit inquiry. Let’s break down what a credit inquiry is, the two main types (hard and soft pulls), and how they impact your credit score Types of Credit Inquiries Soft Inquiries or Soft Pulls A soft inquiry is a credit check that does not affect your credit score. These checks are often done for informational or promotional reasons, not in connection with a new application…

Required Minimum Distributions (RMDs): What You Need to Know

When it comes to retirement, one of the most important—but often surprising to learn—rules is the Required Minimum Distribution (RMD). RMDs are mandatory withdrawals from certain retirement accounts that begin after a specific age. Failing to take RMDs on time can result in tax penalties, so it’s important to understand how they work and how to plan for them. What Is an RMD? A Required Minimum Distribution is the minimum amount you must withdraw annually from your tax-deferred retirement accounts once you reach a certain age. These withdrawals are mandated by the IRS to ensure that retirement savings eventually become…

Should You Pay Off Your Mortgage Before Retirement?

Should I pay off my mortgage before I retire, or is it okay to carry a mortgage into retirement?This is a hotly debated question in retirement.The truth is, there isn’t a one-size-fits-all answer. Plenty of retirees live comfortably while still making mortgage payments, while others sleep better knowing their home is fully paid off. What matters most is understanding how your mortgage fits into your overall retirement plan. What A Paid Off Home Looks Like For many, the emotional and psychological benefits of owning their home outright are hard to beat. Making that last mortgage payment is incredibly satisfying. When…

The Power of Starting Early: How Saving Less Can Lead to More

This is a story of “Saving Sara” and “Delay Dan”. Both Sara and Dan start their first job at 21. While they aren't earning much, they do have money left over after their needs are met.Sara, having learned the power of saving early, begins investing $2,000 per year at age 21 and stops after just 10 years.Dan decides to put off saving and spends his surplus income. He waits until age 31. Trying to catch up, he invests $3,000 annually - $1,000 more per year than Sara did - for the next 35 years.So who ends up with more by age…

The Powerful Role of Compound Growth in Reaching $1 Million

When it comes to building wealth, time is one of the most powerful tools at your disposal. The image below illustrates a profound financial truth: the longer you give your money to grow, the less you have to invest each year to reach your financial goal. And the math is striking. The Cost of Waiting The chart shows how much money you need to invest annually to accumulate $1 million over different time horizons, assuming an 8% average annual return—a historically reasonable rate based on long-term stock market returns. The math is straightforward but stunning. Take an example of a new…

How to Track and Implement a Budget

Budgeting Program Using a budgeting program (an app, online website, software, etc) is a great way to develop and implement a budget. Here are the two general flavors. Aggregation Tools I love aggregation tools because it makes managing a budget so much faster. The less work you have to put into just getting the data, the more likely you are to stick with it. Aggregation software automatically pulls in transactions from your banks, credit cards, and other accounts; performs some basic categorization for you; tracks your progress in the budget; alerts you to overspending; and can provide some useful graphics…

Budgeting Terminology You Should Know

Budgeting guidelines use all sorts of terminology. Here are the most important ones you should be aware of as you start crafting your own budget. Essential Expenses Essential Expenses are those you cannot reasonably live without. What does that include? That’s where money is more of an art than a science and is different for everyone.For example, most agree that your mortgage payment falls within the essential category. What if your mortgage payment is from an 8,000-square-foot home with a pool and private tennis court? Essential or not?Generally essential expenses include the following: Housing Anything related to maintaining a residence.Mortgage…

A Guide to Popular Budgeting Methods

Choosing a budgeting method can feel overwhelming given the many strategies available. Each budgeting style offers a different way to approach spending, saving, and giving, depending on your goals, habits, and personality. Below is a detailed overview of some of the most popular budgeting frameworks used today.1. Backward Budgeting (Reverse Budgeting)Backward Budgeting, also known as Reverse Budgeting, is a powerful strategy grounded in the principle of "paying yourself first." Instead of allocating money toward expenses and saving whatever is left over, you first determine the amount you want to save or invest. Once your future goals are secured, the remainder…

Lifetime Gifting Without Regret: How to Give Without Compromising Your Future

Many individuals aspire to share their wealth during their lifetimes with family and friends. Lifetime gifting can be a meaningful expression of love, support, and generosity—helping children buy their first homes, supporting a grandchild’s education, or simply offering help when needed. However, these well-intentioned gifts can sometimes compromise the giver’s own financial security if not approached with thoughtful planning. The Impact of Gifting During Your Lifetime Unlike bequests that aren't received by the beneficiary until death, lifetime gifts allow you to witness and enjoy the benefits your loved one's experience from your generosity. For example, a gift toward a home…

What to Expect When Transferring Financial Accounts Between Firms

If you aren't used to moving money around, transferring your financial accounts can be a little nerve-wracking. The process itself is relatively straightforward process—but it helps to understand the steps involved.There can be several ways that transfers can be implemented depending on the account, the custodian, and the titling. At Gilbert Wealth, I help my clients through every step of the way. The Basic Transfer Process When you transfer an account from one financial firm to another, the process is typically managed behind the scenes by the institutions involved. In most cases, once you’ve signed the paperwork, the firm handles…