Illumination Wealth November 2013: Don’t Be Gone From November

Hey there!

November is always a meaningful month for us. It represents family, service, gratitude and change.

In that tradition, there are two very significant things we are doing in November and we want you to join us.

First, as an Illumination Wealth family, we are volunteering our time to Feeding America on November 16th. Feeding America distributes nutritious food items directly into the hands of local students and their families through various programs. We would love for you to join us and you can find more information about our event here.

Second, we are pro-actively setting ourselves up for a successful 2014 by taking November to set our personal, professional and financial goals. We know everyone is busy.

Think about this – if you don’t even have the time to write you goals down now, where are you ever going to find the time to actually accomplish them? This is why we are starting now. Here’s what we cover this month to help you on your journey:

· The Market Scoreboard for October 2013

· Illuminating Insights: Your Financial Future Step 2: Goal Setting for Goal Getting

· Readings of Illumination: Curated Articles for Your Enlightenment

Market Scoreboard

Here is the market scoreboard for October 2013:

Notes: S&P 500, MSCI World Index ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: www.stockcharts.com. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

U.S. Stocks rose approximately 1% for the month of October after politicians got out of their own way again at the 11th hour. The government shut down and debt ceiling debate was once resolved in the form of can kicking. Federal government offices opened again because of their own reprieve of continued funding thru January 15, 2014 and the debt limit being suspended until February 7, 2014. With congress out of the way for a few months, investors attention is back on corporate earnings.

The S&P 500 is sitting around all time highs as corporate earnings having continued to impress. The impressing aspect has been the near record high in corporate profit margins as company’s have cut costs to grow earnings as top-line growth remains lackluster. Profit margins are mean reverting and have little room for appreciation and significant downside potential which may be a weight on stock prices in the years ahead. Furthermore, U.S. equities remain expenses from a long-term perspective and current valuations suggest massive headwinds to returns in the decade ahead.

As for foreign stocks, international markets kept pace with the U.S. rising slightly over 1% for October. World markets as a whole are at their highest prices in close to 6 years. Foreign stocks continue to trade at a valuation discount to their U.S. counterparts. Despite the U.S. markets hitting all-time highs, investors have been allocating additional funds to their international counterparts as they have outperformed their U.S. brethren. We see emerging markets and foreign markets providing opportunity in the years ahead to due favorable valuations and growth trends.

Far from robust U.S. economic data help push treasury yields lower in the month of October. Only modest job growth was experienced in September and corporate expenditures remained sluggish. This news suggests that the Federal Reserve will continue it’s asset purchases (a/k/a money printing) at it’s current pace and not taper as was indicated several months back. The decline in yields may provide an opportunity for homeowners to refinance their purchase at rates close to 10% lower than the previous months.

Illumination’s Insights: Your Financial Future Step 2: Goal Setting for Goal Getting

“The trouble with not having a goal is that you can spend your life running up and down the field and never score”. – Bill Copeland

Did you put together your financial statements in October? How did it look? How do you feel about it? No matter what it looked like, you should feel good that you put it together. That is truly the first step to financial independence. As we have spoken about in the past, to get where you want to go, you have to first know where you are.

The second step on our journey to your best financial future is goal setting. You can’t wait until January to set your goals for 2014. At that point it is too late. We shared an article earlier in the month about how “Real Millionaires” set up their goals. They all do very similar things by planning for the year ahead in advance (like we are doing now), creating very specific goals and action plans (next month). By setting goals you are pro-actively choosing a life path with self-responsibility and making a choice to control your own destiny. If you don’t set goals, you are setting yourself up for disappointment and shortchanging your financial future.

By setting goals, you open yourself up to opportunities that otherwise may have been missed because of your new-found awareness to the goal.. Will you be one of the few who actual create real wealth, retire early,  and have financial security or not?  Setting goals is free, extremely valuable, and essential to your success.

So how do we properly set goals?

Step 1: Create Your Vision

Visioning is creating a picture and feeling of what you want your future to be like. Take some time to close your eyes and imagine your life in it’s fullest and most ideal form.

Step 2: Ask Yourself the Right Questions

You need to decide what you want to create with your life by asking yourself some very important questions.

What do I want in 2014?

What will it take for 2014 to be an excellent year?

What is frustrating or dissatisfying about my life and how can I change that?

If I were to grade the different parts of my life on a scale of 1-10, what grade would each area receive and what do I want to do this year to create the grades I want (Health, Money, Relationships, Career, Recreation etc.)

What objectives would make the biggest impact in your life if you accomplished them?

Step 3: Prioritize Your List of Goals

Once you have answered those questions, determine your priorities for the year ahead. It’s difficult to achieve goals when there are so many all competing for your time and attention.

If you have a significant other, each do step 1 and 2 independently. Then come together and create a combined goal sheet for the family. Then break that list down into 2 sections: 1. Finance & Business and 2. Personal & Family Life.

From there, cull the list of goals down to the most important ones in each section in order to have the focus to succeed. Less is more for goal success.

Write out why you want these goals? Be very specific and clear. Your goals need to matter to you and and engage you emotionally.

Step 4: Get SMART

Your goals must be specific and SMART.  SMART is an acronym that stands for:

S – Specific

M – Measurable

A – Attainable

R – Realistic

T – Time-lined

Step 5: Write Your Goals Down & Review Them Regularly

Harvard Business School conducted a study and found that only 3% of their MBA students had goals in writing. After a 30 year follow up, the study found that the 3% with the written goals earned 10x the amount of the 83% who didn’t have clearly defined goals. That study, amongst several others show the value of goal setting (and it’s not just limited to finances, but health, happier marriages and the like).

In order to achieve any goal, you must bring attention to them daily and weekly. Keep your goals in a highly visible place – on your mirror in the bathroom, on the refrigerator or even considering recording them and playing the audio back daily. There will be constant distractions throughout the year, but by regularly reviewing them they will maintain top of mind awareness about what is truly important in your lives.

As you have seen, November is all about setting goals – where we want to go with our life and financial future. Setting goals is a very simple and cost-effective way for personal and financial growth. Next month, we will discuss goal getting that comes out of our goal setting.

Readings of Illumination

Here’s our monthly compilation of interesting articles and videos designed to keep you informed and engaged in the areas of personal fiance, the economy and life. We hope you enjoy this month’s edition. Please send us your thoughts on this month’s articles and suggestions for future posts.

Personal Finances

Wall Street Journal Financial Issues to Discuss Before You Get Married

Carl Richards Beware Financial Comparisons With Others

Economy & Business

Adam Bryant Four Executives on Succeeding in Business as a Woman

Live Bravely Outside When In Doubt, Go Higher

Life

Eventual Millionaire Setting & Achieving Your Goals

Success Life Tips from 18 of the World’s Wealthiest

Great TED Talks & Videos

Dan Ariely What Makes Us Feel Good About Our Work?

Elizabeth Gilbert Your Elusive Creative Genius

“Goals. There’s no telling what you can do when you get inspired by them. There’s no telling what you can do when you believe in them. There’s no telling what will happen when you act upon them.” – Jim Rohn. Goal setting is a very powerful tool and by doing it now you are planting a seed that with the proper care and nutrition can provide a lifetime of fruit. We know that by helping you to create a clearly defined set of priorities we can help you to make decisions that fundamentally improve your entire financial life. Please let us know if there is anything specific that we can help you with.

All the Best,
Matt & The Illumination Wealth Team

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The opinions and forecasts expressed are those of Matt Rinkey, President of Illumination Wealth Management (IWM) and may not actually come to pass. Mr. Rinkey’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Illumination Wealth services. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of IWM’s services. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Rinkey or Illumination Wealth nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Entities including, but not limited to IWM, its officers, directors, employees, customers and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. The analysis contained is based on both technical and fundamental research. Although the information contain is derived from sources which are believed to be reliable, they cannot be guaranteed. Past performance is never a guarantee of future results.