Portfolio Management and the Sources of Financial Risk

 

Doc Gallagher

The author of five financial books and more than two dozen articles, Doc Gallagher is well known for his experience in diverse wealth management topics. Also standing out as the host of “Your Family Matters,” Doc Gallagher speaks in-depth on financial matters ranging from taxes to risk mitigation.

Minimizing investment risk is a complex equation that ultimately comes down to two types of risk. Involving situations where assets are sufficient but wealth can’t be easily accessed, liquidity risk involves everything from restricted stock units to real estate holdings. It is typically avoidable simply by proper planning in advance. This can involve the selling of or borrowing money off of hard assets.

Solvency risk presents a more serious situation in which existing assets and generated income is not enough to meet structural obligations such as interest payments and medical bills. Solvency risk is often tied to poor savings and investment decisions and can eat through wealth at an unsustainable pace.

Rectifying these aspects of risk can sometimes involve taking a certain degree of investment risk through sensibly allocated stocks, bonds, and alternative investments within a well-diversified portfolio.

Reasons to Avoid Probate

 

Probate
Image: investopedia.com

Doc Gallagher, the president and CEO of Gallagher Financial Group, has been working in the finance industry for more than three decades. During this time, Doc Gallagher has written numerous books and professional articles, lectured at several seminars, and hosted radio shows focused on such financial topics as estate planning.

One of the reasons individuals should create an estate plan is to avoid probate. When a person passes, he or she typically leaves behind assets and debts. During probate, the court system pays these debts, takes stock of the assets, and distributes any remaining assets to a person’s heirs.

Unfortunately, the process is extremely slow and time-consuming. The entire probate process technically only needs to take six months, but it usually takes between one to three years or longer depending on how complicated an estate is. This means a person’s heirs do not have access to their assets until several years later.

The probate process can also be very expensive. Courts typically take between 5 and 10 percent of the gross estate to fund the probate process. This fee goes toward hiring lawyers to guard an heir’s interest if he or she is a minor or toward other parts of the process. If this happens, heirs may receive a much smaller amount at the end of probate than a person originally intended.

Further, any assets that are left behind are made public due to the fact that probate is a public process. Anyone is free to search these public records and determine how much each heir received after probate is completed.

Incorporating Tax Savings into a Retirement Plan

 

Simplified Employee Pension
Image: investopedia.com

For over three decades, Doc Gallagher has applied Christian values to his work as a radio host, journalist, and financial advisor. Currently, Doc Gallagher serves as the chief executive officer of Gallagher Financial Group, where he helps clients prepare for retirement.

A retirement plan should emphasize savings and avoid what is known as “lifestyle creep.” Savings in tax-advantaged accounts, which can help investments to grow faster, should also form a core part of a retirement strategy. There are a number of retirement savings options that offer tax advantages. Below are four of the most common:

– 401(k): An account that allows up to $18,000 of pre-tax income to be withheld via a payroll deduction. For nonprofit employees, this is known as a 403(b). Similarly, a sole proprietor can utilize a Solo 401(k), which allows contributions as both employer and employee.

– Simplified Employee Pension (SEP) IRA: Designed for owners of small businesses or people who are self-employed, this account allows up to $53,000 in contributions per year.

– IRA: Available to anyone, this account allows contributions of up to $5,500. A similar account, the Simple IRA, allows employees of firms with fewer than 100 employees to contribute up to $12,500.

– Roth IRA: A Roth IRA allows the investment of after-tax dollars, which then grow tax-free, with no tax on withdrawals after age 59 1/2. To qualify for a Roth IRA, individuals must make less than $131,000 if single or $193,000 if married filing jointly.

The Spectacular Senior Follies’ Worry-Free Guarantee

Spectacular Senior Follies
Image: seniorfollies.com

Doc Gallagher, president and CEO of the Gallagher Financial Group, helps individuals and families prepare for retirement. Dedicated to helping his community both inside and outside of the financial realm, Doc Gallagher supports local organizations and activities, including the Spectacular Senior Follies.

Created by Mark Carroll and Ned Startzel, the Spectacular Senior Follies provides entertainment to Dallas County in an effort to preserve the traditions of American performing arts. Individuals interested in attending a show put on by the Senior Follies can purchase tickets online, over the phone, or in person.

All tickets purchased in these ways through the Eisemann Center Ticket Office are backed by the Spectacular Senior Follies’ worry-free guarantee that ensures all tickets are delivered on time. The Spectacular Senior Follies maintains a 100-percent money-back guarantee for events canceled with no reschedule date.

Purchasers may also get their money back if their tickets are not delivered by the seller, if their tickets are shipped too late, or if the tickets they receive are invalid.