Behind the Scenes: How I Manage & Invest My Own Money

Behind the Scenes: How I Manage & Invest My Own Money

October 31, 2023

Have you ever heard the saying “Practice what you preach”? It means doing the same things in your own life that you advise other people to do. It’s a great way to describe how I personally use the exact same financial strategies I suggest to my clients. 

Keep reading for an inside look at how I manage and invest my own money. 

Budgeting

First things first; you have to put a proper budget in place. Think of it as the foundation for a consistent investment strategy.

I prioritize my family’s budget as follows:

  1. Tithes and offerings. I start by deciding how much money we want to give to our local church and the programs we’re involved with.
  2. Taxes and mortgage payments. Next, I ensure that our taxes and mortgage payments are an integral part of our budget.
  3. Investments. At this point, it’s time to consider our investment strategy. In general, and this is exactly what I tell my clients to do, I keep in mind that almost all investments contain potential risks and rewards.
  4. Spending. Now that I have our financial goals taken care of, we can spend the rest of our money guilt-free!

Investing Basics

The first thing I consider when I’m thinking about investments is which investment vehicle makes the most sense for me and my family at the time. This can change from year to year based on our family situation and goals. 

I ask myself the following questions:

  • Should I focus on investments that help reduce our taxes this year?
  • Should I focus on my Roth IRA to ensure as much future tax-free income as possible?
  • Should I focus on non-qualified liquidity investments for future expenses, like the kids’ college education?

Investment Strategies 

Now it’s time to match each investment account with the time frame for my goals. Here’s how I do that:

  1. I like to have a second-level cash reserve in my non-qualified account. I often use low-risk investments with returns that are much better than my bank accounts.
  2. My IRAs and Roth IRAs are invested using the following strategies:
    1. Long-term focus. In his 1988 letter to his shareholders, Warren Buffet famously said,“Our favorite holding period is forever.” I have the exact same opinion as Warren when choosing what to invest in; I really have to like the investment enough to hold on to it forever.
    2. Diversity. I like to invest in actively managed mutual funds; they make up the bulk of my portfolio. When the market takes a big hit (15%+ loss), I look for opportunities to invest in companies I love and monitor regularly. I have a high degree of confidence that these companies will grow over the next 10+ years. However, I only invest in them when I can buy at a discounted price that’s brought on by the market’s downturn.
    3. Buy and hold, but monitor. I trust the people managing our family’s funds, but I like to make sure they’re performing at the level I need them to. This requires looking at the context of the performance (e.g., fees, return of peers, risk taken). Failure to perform doesn’t mean I sell the investment immediately, but it does mean that more work and thought is needed.

These investment strategies might sound familiar to you if you’re already a client of mine, because, as I mentioned earlier in this article, this is the exact same guidance I provide to all my clients.

We’re Here to Help

At Center for Wealth Management, we think you deserve more than a vanilla-flavored wealth management plan. That’s why we create and manage your portfolio customized to your personal situation and goals. You can feel confident that the investment guidance we provide precisely matches what we use for our own money.

Take the first step toward a successful financial future by calling (248) 220-4321 or emailing robert@cwmfinancial.net. You can also schedule a meeting by visiting www.calendly.com/cwmrob/initial.

About Rob

Robert Moore is senior partner, financial planner, investment advisor, and co-owner of Center for Wealth Management, an independent, fee-based wealth management company based in Troy, MI. With over 20 years of experience, Rob provides customized advice and solutions that are in the clients’ best interest. He strives to always go above and beyond his clients’ expectations, helping them retire with more security than they had before, and invest their time and energy in what’s most important to them. Rob specializes in working with DTE Energy employees, helping them maximize their benefits so they can reduce taxes, prepare for retirement, and protect their families through a comprehensive planning process. Rob graduated from Michigan State University and holds the CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant® (ChFC®) certifications.

Rob is known as a diehard family man who enjoys spending time with his beautiful wife, Jill, his daughter, Brookelyn, and his son, Brayden. When he’s not working, you can find him playing basketball once a week, squeezing in a round of golf, and watching college football and basketball with friends and family. He is passionate about enriching the lives of others through his church involvement and service at a community addiction program. Learn more about Rob by connecting with him on LinkedIn