The Fundamentals Of Dollar-Cost Averaging

Whether you work with us or follow our blog, you may hear us reiterate specific themes. For instance, the professionals at Worth Advisors, LLC believe that financial management is for everyone regardless of their economic position or perceived status. Another one of our core messages is that you should stop trying to time the market. Recall movies such as The Wolf of Wall Street or just Wall Street. People unfamiliar with investments or investment strategies may need help understanding what financial advisors do. 

Specifically, we are referring to “timing the market.” Hypothetically, this is when you invest in something when it is low and before it suddenly increases in value. Then you sell your shares for a significant profit. Anyone who thinks this is what investing is may dismiss it outright. If they don’t understand the market and cannot foresee a trend, they assume investing is for those who do. This is unequivocally false, and we are about to explain why. 

Let Success Come to You 

Timing the market is difficult even for experienced investors! Instead of trying to predict the market, accept that it will fluctuate and irregular intervals. Dollar-cost averaging embraces this concept and can deliver long-term financial success despite fluctuations. The basic premise of dollar-cost averaging is that you invest at regular intervals regardless of the purchase price. To give you an easy example, imagine that you have $1200 to invest. Rather than spending your $1200 on one stock and hoping the market works in your favor, i.e., timing the market, invest $100 a month in a mutual or index fund. 

When the market is up, and prices are high, your $100 will yield fewer shares. When the market is down and prices are low, that same $100 investment will enable you to purchase more shares. People who invest this way shift their focus to the long-term. Why? Because over several years, you will likely see that your cost per share, on average, is lower than if you had invested the money all at once. 

Experience a Shift in Mindset

When you understand how basic dollar-cost averaging is—and how well it works—you will embrace the fact that investing is for anyone willing to do it. It comes down to discipline instead of studying and watching the market round-the-clock in hopes of gambling a sum of money on the market. Allow yourself the freedom to invest despite what the market is doing, and have confidence that you will succeed over the long term. 

Dollar-cost averaging is one way to survive the inherent corrections of the market. At Worth Advisors, LLC, we believe in a diversified approach by investing in stocks, mutual funds, ETFs, bonds, and closed-end funds. Although we incorporate principles that we firmly believe in, our approach to each client is customized to their needs and financial goals. When we design a portfolio for you, we will ensure it is tax-friendly. Why? Because taxes are your most significant liability. (You may have heard us say this before!)

Regardless, contact us today and discover why investing is for you. It’s your future, but we want to ensure you are financially prepared.

Midterm Elections, Change, & Common Concerns

Although the title of this blog contains the words “midterm elections,” it doesn’t have anything to do with politics or who you should vote for. Our goal has been—and will always be—to serve our clients while giving them the tools and advice they need for long-term financial success. Nothing will disrupt our commitment and loyalty to those who trust us to support them. We aren’t discussing politics because political views are not our concern. Many people we speak to are concerned about the changes that may occur because of the midterm elections.

How often have you heard people discussing the stock market, inflation, or an impending recession? These are at the forefront of people’s concerns and are directly tied to the midterm elections. Depending on your personal stances, you may have opinions on how these issues may improve because of them. 

Key Points to Put You at Ease

Many people want to know when the right time to invest is. We must reiterate the inherent dangers behind believing you can time the market. When Warren Buffet said that his favorite holding period was forever, he did so because you work the market over the long term. Look at the basic principles involved with dollar-cost averaging. By investing at regular intervals over a wide range of stocks, you can survive and thrive despite economic fluctuations. 

Secondly, when Worth Advisors, LLC, offers you financial advice, we always consider a wide range of factors. We want to know your age, your goals, and the type of investment you are making. We assess many factors because our goal is to protect your assets. This is why we wouldn’t tell someone in their nineties to invest in a start-up or advise a 20-year-old to only invest in Certificates of Deposit at the bank.

Will My Investments Plummet?

To give you a better idea of what we mean by focusing on the long term, we should put forth some interesting statistics released by Vanguard. They went back to 1860 and showed that historically, investments had performed the same in an election and non-election year. Additionally, take a closer look at this: 

  • The annual compound return with a Republican president: 8.3%
  • The annual compound return with a Democrat president: 8.4%

Ironically, long-term investments won’t get derailed by short-term fluctuations and changes. If you still have concerns, schedule a consultation with the trusted financial professionals at Worth Advisors, LLC. Our goal is to serve you, and we will do that despite what is happening worldwide. For more information about how we can achieve that, reach out and schedule a consultation.

We Want To Be Part Of The Solution

Today, we are discussing how and why it is important to close the financial literacy gap between men and women. The poorly-conceived stereotypes connected to gender and money are inaccurate as they are harmful. For example, there are surveys that show that millennial men are almost three times more likely to marry someone who can pay off their debts. Although we are not here to dispel every misconception regarding gender and money, it is essential to discuss why it is so fundamental. 

People live longer—and women, on average, tend to live five years longer than men. It is paramount to have the ability to accumulate long-term wealth. Financial literacy is a prerequisite thereof. What’s particularly staggering is that women have made tremendous progress. They are well represented in higher education and the workplace. The Stanford Center on Longevity says, “… the gender gap in financial literacy persists regardless of age, education level, and marital status.” 

The Root of the Issue

Although what we are about to discuss may seem abstract, it is based on the findings of a survey conducted by the Stanford Center for Longevity. Their survey was taken by people ranging from 20-94. The questions were meant to determine two things: confidence and their level of involvement in financial decision-making, 

The results concluded that women were less confident than men when making financial decisions. However, that conclusion did not apply to all financial decisions. In terms of the types of financial decisions we encounter on a daily basis, men and women were equally able to navigate them. Regarding major decisions (the kinds involved in long-term financial planning), women had lower scores. The survey asserted that this wasn’t due to a lack of knowledge but a lack of confidence. 

We Are Working to Be Part of the Solution

One of our core beliefs at Worth Advisors, LLC, is that financial planning is for everyone. Regardless of your financial situation or gender, you deserve to reap the benefits of having a sound financial future. Another component that makes us uniquely qualified to assist you is that we have a licensed mental health counselor (LMHC) on our staff. In addition to being the Chief Operating Officer, he helps a wide range of people working through difficult times or struggling to make decisions—some of which we have already discussed in this article. 
Wherever you are in life, regardless of your circumstances, you can come into Worth Advisors knowing that we offer a holistic approach to financial planning. Our role is to support and empower you to make the types of decisions that will positively impact your future. Give us and call, so we can learn more about how we can serve you.

How Identity Theft Affects Your Finances

This topic hits close to home for reasons we will not get into at the moment. For anyone who has been a victim of identity theft, we empathize and understand what you are experiencing. For those who have not, it’s unnerving. People may open their mail and discover that goods or services have been purchased in their name. Others learn that money has been withdrawn from their account without their knowledge.

Imagine discovering that a loan has been taken out using your personal information. What’s worse is that the person who defrauded you never intended to pay back the money. Now, you are being targeted by collection agencies. Many of which will not likely stop calling when you tell them you were a victim of identity theft. It’s a powerless and frustrating experience that no one deserves to go through. 

The Financial Ramifications of Identity Theft

Credit scores take years to build and seconds to destroy. The financial implications of identity theft can (potentially) last for years. These aren’t the types of cases where you notice that someone put a charge on your credit card that you hadn’t authorized. With these scenarios, your credit card company will investigate the charge and issue you a new card. You caught it early. 

Others aren’t as fortunate. They could have been victims for years without knowing it. A hacker can access a business or organization that has a record of your Social Security Number (SSN). They can then use your number to take out loans or purchase under your name illegally. If they defaulted on a loan while using your SSN, you might discover you have a lien on your property. Sometimes, people may not realize this until they go to sell their home and a title search discovers the lien—which could possibly halt the sale. Due to how powerful an SSN can be, victims of this magnitude may be able to receive a new SSN. However, your previous number still exists and is on record. 

Another typical example is the person who files their taxes and learns that someone else has already done so in their name. In all likelihood, the hacker did this because they wanted the tax return. The IRS uses a specific form (IRS Form 14039) for people in this situation. Not only has someone taken your return, but this issue has to be resolved for you to file your tax return and receive your refund successfully. 

Speak With a Professional & Compassionate Financial Advisor 
Everyone who works at Worth Advisors, LLC embodies the belief that we exist to serve you. Never assume that you cannot benefit from speaking with a financial advisor who will work with you regardless of your challenges—including identity theft. Make the decision to take command of your finances and your future by speaking with a financial advisor who wants to help. Contact us to schedule an appointment.

The Unique Financial Planning Considerations For Professional Coaches

Great leaders understand that success belongs to the team and failures land on the coach. When the team isn’t winning—regardless of the reasons why—the coach is the person who has to answer for those losses. Typically, this equates to the coach being forced to resign or asked to leave. Fans of sports such as NCAA basketball may quickly offer the adage that coaches are hired to be fired. As true as that is, it is too easy to overlook that coaches are people with families, mortgages, and plans for the future. The stress and pressure of being a professional coach, especially someone who has been successful enough to earn a chance to run a Division 1 team, is overwhelming. Losing affects more than the fans; it impacts a coach’s family and their ability to provide for them. 

The Challenges of Being a Coach

At Worth Advisors, LLC, we have been fortunate enough to work with several Division 1 college coaches, primarily those who work with men’s and women’s basketball teams. From a financial perspective, coaches have some very unique considerations. The NCAA is a competitive business, and if you look at the 2021-2022 season as an example, you will see at least five basketball coaches within the infamous SEC have been fired for their team’s performances. 

No one gets to that level without being in the top percentile of their field, despite your opinions of the coach’s effectiveness. Even coaches with winning records and relative success in the NCAA Tournament can lose their job if the program wants a new voice in the locker room or someone with a different approach to the Xs and Os of the game. 

Coaching From a Financial Planning Perspective

Although we hope that each of our clients has the storied career of Coach K (apologies if you are a UNC fan), it would be an understatement to say that level of longevity is atypical. Although a Division 1 basketball coach earns three to five million dollars a year, there is no guarantee that they will have another job that pays on that level when they leave the organization. Coaches have to save aggressively. We advise our clients never to have less than 12 months of living expenses. Two of those twelve months should be in the bank, and the rest should be invested. 

Even coaches who haven’t risen to the level of Division 1 college athletics have even more significant challenges. In addition to taking on the financial risks of being a coach, they are also not earning the income that a Division 1 coach does. Because that is where most hope to go, they may have to take less money to get there. Consider the coach who has to choose between being a head coach at a smaller, less-paying school and becoming an assistant coach at a larger program. 

Coaches earn their future jobs by proving their abilities at the lower levels. In the example we just provided, that coach may opt for less money now for the opportunity to be a head coach—which they may try to parlay into a head coaching role that pays more in the future. That same coach needs to be in the proper financial position to make that move.

Worth Advisors, LLC

As both fans of the sport and as professional financial planners, we are blessed enough to have been able to work with several NCAA basketball coaches. We understand the demands of being a coach and are in the best position to advise you on how to mitigate the risks associated with your job from a financial perspective. For more information about how we can serve you, contact Worth Advisors, LLC, and schedule an appointment. We look forward to meeting you.

Rental Property 101


Nicolas Deboeuf, CFP®

Financial Planner

Worth Advisors

If you are looking to achieve financial freedom, there’s a good chance that you have considered buying an investment property. After all, owning an income-producing asset that appreciates over time seems like a good vehicle to build wealth and a fun way to learn valuable skills.

While this is true, it is far too common to hear people say that things did not go as planned. In this article I provide a short overview of things to keep in mind when considering getting into real estate.

An investment property is not for everyone.

You will need time and a solid financial foundation to get started. Whether it is looking for contractors, tracking expenses, filing taxes, dealing with tenants or unexpected repairs, your investment property will keep you busy too often at a time that is not convenient. Hiring a property management company can save you some time but will come at a cost.

In addition to finding time, you will also need a strong financial foundation. Replacing a central air conditioner, fixing a leaking roof, could cost you thousands of dollars. Not being able to make mortgage payments because your tenant does not pay the rent could have dire consequences. We recommend having at least 12 months’ worth of living expenses in liquid assets, after making the down payment.

You will also want to have a good credit score (720+) to secure a low interest loan. A $300,000, 30-year term loan with a 4% interest rate will cost you $215,607 in interest over the term of the loan. In comparison, that same loan with a 6% interest rate will cost you $347,515 in interest, 61% more (1).

Looking for your first property.

Just like any investment, there are good and bad apples. We recommend focusing on finding a place that meets the following criteria:

  • Located in a currently growing area
  • Low maintenance
  • Good overall condition
  • Attractive household amenities
  • Low gross rent multiplier relative to other properties (see below)

A large backyard, a high-end kitchen or a pool can be attractive, but remember that you are not looking for your dream home. The end goal is to make a profit, stick to the numbers and do not let your emotions cloud your real estate judgment.

The cash flow vs. capital appreciation dilemma.

Understanding how your investment will make you money is key. 

The main way a rental property can make money is through cash flow. It is the difference between the rent collected and all operating expenses. That form of income is very important because it is liquid, meaning it is readily available, can be reinvested or used to cover upcoming expenses. 

Another way to make money is through capital appreciation, a rise in your investment’s market price.    While home prices have skyrocketed in recent years, they have historically appreciated at a rate of 5.3% per year over the past 20 years (2)

First-time investors and investors with a relatively low cash reserve should stick with properties that offer positive cash flow at the end of the month, rather than speculate on high projected appreciation properties. 

Crunching the numbers

The Gross Rate Multiplier (GRM) functions as the ratio of the property’s market value over its annual gross rental income. While you should not rely solely on that ratio, it is a quick and simple way to compare and screen properties. A lower value is best. 

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The Net Operating Income (NOI) is a calculation used to analyze the profitability of income-generating investment. The formula is straightforward, subtract all operating expenses from gross operating income.


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Do not forget about taxes.

You are responsible for reporting rental income to the IRS, even if it is paid in cash. A tax specialist can help you reduce your income tax liability by taking the appropriate deductions, such as interest, property taxes, depreciation, travel expenses, advertising, utilities for instance, etc. Tracking your expenses will be key.

You will also be responsible to report capital gains at the disposition of the property. Failing to do so could lead to large tax penalties from the IRS. Once again, your tax specialist will be able to give you options to minimize or defer capital gains tax. A 1031 exchange for instance, will let you swap your investment property for another “like-kind” property without recognizing a gain. 

Playing the Long Game.

Finally, you will have to play the long game. Sellers must pay their own closing costs and those costs can add up to 8% –10% (3) of your home’s final sales price. You will incur closing costs at the time you decide to sell the property. If your home sells for $300,000, then, you can expect to pay from $24,000 – $30,000 in closing costs.

We highly recommend discussing this with your advisor prior to making any financial decisions. 


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Paradigm Shift

H. GREG GOODLETT- Chief Investment Officer

When will inflation peak ? How long will the Federal Reserve continue to raise interest rates? Will we incur a recession, and if so, how severe will the downturn be? Anyone who is 100% confident in their ability to forecast where the markets are headed during this period of the economic cycle is, in technical terms, non compos mentis. We are coming out of a global pandemic and experiencing the Federal Reserve increasing interest rates due to inflation for the first time since 1974. 

What we do know is that against a backdrop of sky-high inflation, rising rates, and growing recession concerns, the S & P 500 Index had its worst start to the year since 1962 finishing down 20.6%. The tech-heavy NASDAQ performed more dismally (-29.5%), with the Dow Jones Industrial Average off (-15%).

Every market correction is different. During the late 1900s corrections were brought on by oil shocks and monetary tightening, while the largest corrections since 1990 have been brought on by the retrenchment in the private sector after build ups of excessive leverage. The current market correction has been driven by The Federal Reserve raising interest rates, as markets have priced in further tightening this year while simultaneously worrying that such front-loaded increases will ultimately drive the economy into recession and the need for a policy reversal. The market is unlikely to get a clear signal from the Fed that rate increases will be ending until more obvious signs of slowing growth and easing inflationary pressures become clear. Chairman Jay Powell said the Fed is “acutely focused on returning inflation to our 2% objective.” But the gap between that target and the most recent 8.5% jump in CPI has injected uncertainty and volatility into both equity and fixed income markets. Today’s narrative is that the Federal Reserve needs to cure inflation only through monetary policy. This is a common misunderstanding because today’s inflation is also being driven by a supply shock as well as an increase in demand. Supply and demand must work together which will require fiscal policy in coordination with monetary policy. 

Markets are transitioning away from a decade with ample liquidity amid easing rates. While volatility and declines are unsettling and emotionally draining, they do reset the market environment and provide opportunities for future, longer lasting gains. I don’t know if the U.S. is heading into a recession, but history shows that equity markets usually bottom before recessions. If the average bear market decline for the S & P 500 is (-30%), then we are already 2/3 of the way there. The time for a flight to safety or to get defensive would have been last year. The age-old adage of “Buy low, Sell high” runs counter to human instinct when markets are in a decline. But these times of pain present ideal opportunities for the future.

Sources: Blackrock, Goldman Sachs, First Trust, Merriam- Webster

Taxes Are Your Biggest Liability

When we refer to something as being a “liability,” we are speaking about owing money to another person or party. They stand in stark contrast to “assets” because assets are things you own that can be used for financial gain. For example, your mortgage is a liability, whereas the money you have in a checking or savings account is an asset. 

Ask a few people what their most significant liability is, and most of them will say it is the thing we just mentioned: their mortgage. At Worth Advisors, LLC, we want you to understand two things: 

  • – Taxes are your most significant liability
  • – They do not have to be

Take control of your finances by truly understanding and appreciating both points. Most people assume that the ability to lower tax liability is reserved for wealthy individuals who have access to a team of accountants and attorneys. Tax strategies are for you regardless of your income level, and we want to explain why. 

The Basics of Lowering Your Tax Liability 

Tax liability and tax due are not synonymous. Your liability is based on your taxable income. Tax due is the money you owe after credits, deductions, and withholdings have been taken out. We needed to highlight that distinction because you must reduce your taxable income to minimize your tax liability.

Doing this is not as complicated as you may assume. For example, you can achieve this by increasing your contributions to your retirement account. These include traditional IRAs and employer plans that allow you to make pre-tax contributions, such as a 401(k) or a 403(b). (Roth IRAs allow you to withdraw money in the future without paying taxes on the funds, which is why they are different from traditional IRAs.) Here are some other examples of ways to lower your tax liability:

  • – Sell any stocks that have lost money and claim the loss on your taxes.
  • – Make donations to charity, document them, and claim them. 
  • – Deduct the interest you have paid in student loan debt.
  • – Start a Health Savings Account (HSA).

Worth Advisors, LLC

You may understand how to limit your liability, but you still want to know how to put this into practice. Contact the financial advisors at Worth Advisors, LLC, and set up a consultation. Let us learn more about your unique situation and explain your options for successfully lowering your largest liability. 

These strategies are not for the gifted or privileged few; they are for you. Allow us to make your money work more efficiently for you.

The Error Of “Timing The Market”

Buy low, sell high. That is a common adage that people put forward to explain why some investors are so successful. When it comes to timing the market, we tell our clients the following: You cannot time the market. At Worth Advisors, LLC, we want you to take that information and be optimistic about how successful you can be at investing. Stop thinking that there are gifted or one-of-a-kind financial advisors who can turn thousands into millions instantly by telling you when to invest and how much to generate a quick profit. 

Although timing the market is legal (as long as no insider information was used), it is challenging. Even on the rare occasion when it happens, you can’t rely on it consistently and throughout your life. Look at how quickly housing prices have dropped and increased in the last twenty years. Although you may not be familiar with stock trends (yet), the housing market shows how cyclical markets can and will be. Unlike houses, stock prices change rapidly. 

Financial giants such as Warren Buffet have found success in doing this, but that is not his cornerstone. Furthermore, as successful as Warren Buffet has been, he has also said the following:

“Our favorite holding period is forever.”

Rather than believing you can time the market, shift your perspective. Accept that you need to invest money and that you will do so over the long term. Perfect timing is not a prerequisite for financial success. For instance, studies have shown that you can invest with poor timing and still see favorable returns over twenty years or more. 

Dollar-cost averaging (DCA) directly applies to this mindset. DCA is when someone invests equal amounts of money at basic intervals in different stocks, regardless of the stock price at the time of purchase. These are how 401(k) plans operate. Rather than waiting for a stock to skyrocket, DCA allows you to protect your investment from the market’s inherent volatility. 

Shift Your Perspective With Worth Advisors

You no longer need to be too afraid to invest because it is the “year of volatility,” nor do you need to worry about the absolute perfect time to buy low. At Worth Advisors, LLC, we tell our clients that they need to stick with their investments over the long run because it is in their best financial interest. Furthermore, due to the cyclical nature of the markets, there will be new sectors that emerge. Technological growth is exponential, and there is innovation happening daily. Why would you not have to be a part of that? The good news is that you can, and if you aren’t concerned about the short term, you can do so without unneeded pressure. Contact Worth Advisors, LLC, to schedule a consultation.

A Glimpse From the Past

It seems like just yesterday…  but 1987 was the worst year of my life. I was 11 years old, my parents were getting a divorce, our newly divided family was struggling for money, and I was not handling it well at all. Despite my mother’s strength, wisdom, independence, and education—including a Master’s degree in Theology—at the end of the day, she was still a single mother trying to figure out how to make ends meet. 

As I watched the only life I had known fade into the distance, and experienced an unwelcome new reality filled with fear, disappointment, transition, doubt, and the devastation of not having enough of anything, I learned a lesson that would serve me well, and ultimately lead me to my current career as a financial advisor. At age 11, I realized that regardless of your age, race, class, background, education, or status, if you don’t have control over your own finances, then you don’t have any control at all. 

For the first decade of my life, I had grown up in what seemed to be an ideal, two-parent home where Dad was the primary breadwinner and chief financial engineer. Mom was the primary homemaker, caretaker, and nurturer with an income that was secondary to his; and as long as nothing ever changed, then everything would be OK. But things did change, and everything wasn’t OK. 

There’s an old saying that the only constant is change. It’s true. But if you don’t prepare and plan for change, then you are accepting financial defeat before the battle even begins. I decided to prepare myself by going to school, getting the appropriate certifications and degrees, and changing the way I thought about money. I acknowledged and embraced the idea that until I took control of my own financial destiny—in Christ—that my life would never be my own.

I accepted early on in my walk with the Lord that I would endeavor to know and embrace His word and His will for my life. One of the first and most enduring lessons I learned was that it is God’s will for His children to be blessed; for all the promises of God in Him are yes, and in Him, Amen. But I also realized that my future was not solely God’s responsibility. I had to do my part too. Once I understood this principle, there was no question in my mind about God’s position on money. The real question was, ‘How does God want me to handle the finances and abundance that He blesses me with?’ I learned that most people give money too much credit and associate it with values it simply does not possess. For years, parents, preachers, and Sunday school teachers have misquoted the same famous passage of scripture, often stating that “money is the root of all evil,” when in reality the Bible states in Ecclesiastes that money is a [defense] or asset and answers all things; while “the love of money is the root of all evil.” The irony of finances within Christianity is that everything belongs to God, yet at some point almost everyone manages their money like it only belongs to them.

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