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My financial adviser’s advice changed how I see my retirement savings

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  • When I started working with a financial adviser in my mid-20s, she gave me one of the best pieces of financial advice I’ve ever received.
  • “The one thing you don’t want to do is treat your retirement accounts like an emergency fund,” she said. “Once you put the money in there, pretend it doesn’t exist until you’re ready to stop working.”
  • I resolved never to touch my retirement accounts unless I’m adding to them. In my mind, they’ve gone on lockdown, unable to be accessed for the next 35-or-so years.
  • I’ve been putting measures in place to make it easier to leave my retirement accounts alone, like building an emergency fund I can turn to when unexpected expenses inevitably crop up.
  • SmartAsset’s free tool can help you find a financial adviser to help create your own financial plan »

When I reached my mid-20s, I knew I needed some financial help. By that time, I had already learned the basics of personal finance like paying off my credit card each month and saving up as much money as I could, but the one thing that I couldn’t wrap my head around was planning for retirement.

I knew I should be saving, but I had no clue how to go about actually doing it. As a self-employed writer, I didn’t have the traditional, employer-sponsored 401(k) plan to fall back on. Creating my retirement plan was up to me and, at that point, all I had managed to do was invest a small amount of money in stocks that weren’t growing.

Obviously, that strategy wasn’t going to work long-term, so I set out to find a financial adviser. Luckily, I was fortunate enough to find a great match. In my first few meetings with her, we talked about my financial goals, drew up a comprehensive plan for my finances — including retirement — and she also gave me one of the best pieces of financial advice I’ve ever received.

To this day, her advice has totally changed the way I look at my finances and, hopefully, it will change how you look at yours, too.

My financial adviser told me never to touch my retirement savings

In the middle of setting up my new retirement accounts, my financial adviser suddenly got more serious. “Listen to me,” she said. “The one thing you don’t want to do is treat your retirement accounts like an emergency fund. Once you put the money in there, pretend it doesn’t exist until you’re ready to stop working.”

She then told me a story about a man she knew years ago. By her account, he was diligent about contributing to his retirement funds. However, every few years, he would also pull from them. Each time, he had a good reason for doing so. One time, his home needed extensive repairs. Another, he and his wife badly needed a new vehicle.

Unfortunately, though, the amount of money he was contributing to his accounts each year wasn’t enough to cover the semi-regular withdrawals and, when it was almost time for retirement, he found that his account balances were much lower than he had expected.

By that time, it was too late for him to do much of anything to rectify the situation.

According to my financial adviser, it would have been better if he had found another method for covering those expenses — or even gone without — instead of turning to his retirement accounts.

She wrapped up the story by telling me that if my retirement accounts are going to be my main source of income, my goal should be to make sure that I have as big of a cushion as possible. After all, I have no way of knowing how long I’m going to be retired.

From now on, my retirement savings are on lockdown

With that cautionary tale fresh in my mind, I resolved never to touch my retirement accounts unless I’m adding to them. In my mind, they’ve gone on lockdown, unable to be accessed for the next 35-or-so years.

However, I’ve also been putting measures in place to make it easier to leave my retirement accounts alone. For one, I’ve taken the initiative to start building an emergency fund I can turn to when unexpected expenses inevitably crop up. While I’m still working on building it up to cover the requisite three to six months worth of expenses most experts suggest having, it’s getting there, and it gives me a sense of comfort to know that I’m covered in the event of an emergency.

The last thing you want to happen as you head into retirement is to be unpleasantly surprised by how much you have saved.

SmartAsset’s free tool can help you find a financial adviser to help create your own financial plan »



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Read This Before You Buy First Savings Financial Group, Inc. (NASDAQ:FSFG) Because Of Its P/E Ratio – Simply Wall St News

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Of late the First Savings Financial Group (NASDAQ:FSFG) share price has softened like an ice cream in the sun, melting a full . But there’s still good reason for shareholders to be content; the stock has gained 12% in the last 90 days. Looking back over the last year, the stock has been a solid performer, with a gain of 30%.

Assuming no other changes, a sharply higher share price makes a stock less attractive to potential buyers. In the long term, share prices tend to follow earnings per share, but in the short term prices bounce around in response to short term factors (which are not always obvious). So some would prefer to hold off buying when there is a lot of optimism towards a stock. One way to gauge market expectations of a stock is to look at its Price to Earnings Ratio (PE Ratio). A high P/E implies that investors have high expectations of what a company can achieve compared to a company with a low P/E ratio.

Check out our latest analysis for First Savings Financial Group

How Does First Savings Financial Group’s P/E Ratio Compare To Its Peers?

We can tell from its P/E ratio of 9.65 that sentiment around First Savings Financial Group isn’t particularly high. We can see in the image below that the average P/E (12.9) for companies in the banks industry is higher than First Savings Financial Group’s P/E.

NasdaqCM:FSFG Price Estimation Relative to Market, December 14th 2019

Its relatively low P/E ratio indicates that First Savings Financial Group shareholders think it will struggle to do as well as other companies in its industry classification. Since the market seems unimpressed with First Savings Financial Group, it’s quite possible it could surprise on the upside. You should delve deeper. I like to check if company insiders have been buying or selling.

How Growth Rates Impact P/E Ratios

Generally speaking the rate of earnings growth has a profound impact on a company’s P/E multiple. That’s because companies that grow earnings per share quickly will rapidly increase the ‘E’ in the equation. And in that case, the P/E ratio itself will drop rather quickly. So while a stock may look expensive based on past earnings, it could be cheap based on future earnings.

It’s nice to see that First Savings Financial Group grew EPS by a stonking 45% in the last year. And it has bolstered its earnings per share by 23% per year over the last five years. With that performance, I would expect it to have an above average P/E ratio.

Remember: P/E Ratios Don’t Consider The Balance Sheet

It’s important to note that the P/E ratio considers the market capitalization, not the enterprise value. Thus, the metric does not reflect cash or debt held by the company. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth.

Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof).

How Does First Savings Financial Group’s Debt Impact Its P/E Ratio?

First Savings Financial Group has net debt worth a very significant 115% of its market capitalization. This level of debt justifies a relatively low P/E, so remain cognizant of the debt, if you’re comparing it to other stocks.

The Verdict On First Savings Financial Group’s P/E Ratio

First Savings Financial Group trades on a P/E ratio of 9.6, which is below the US market average of 18.6. The company has a meaningful amount of debt on the balance sheet, but that should not eclipse the solid earnings growth. If the company can continue to grow earnings, then the current P/E may be unjustifiably low. Given First Savings Financial Group’s P/E ratio has declined from 9.6 to 9.6 in the last month, we know for sure that the market is more worried about the business today, than it was back then. For those who prefer invest in growth, this stock apparently offers limited promise, but the deep value investors may find the pessimism around this stock enticing.

Investors should be looking to buy stocks that the market is wrong about. If it is underestimating a company, investors can make money by buying and holding the shares until the market corrects itself. So this free report on the analyst consensus forecasts could help you make a master move on this stock.

Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with modest (or no) debt, trading on a P/E below 20.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

These great dividend stocks are beating your savings account

Not only have these stocks been reliable dividend payers for the last 10 years but with the yield over 3% they are also easily beating your savings account (let alone the possible capital gains). Click here to see them for FREE on Simply Wall St.



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Airport van service SuperShuttle going out of business at the end of the year

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LOS ANGELES — SuperShuttle, the shared van service that has carried passengers to and from airports across the U.S. and in Latin America, Canada, Europe and Asia, is going out of business, according to a newspaper report Thursday.

A letter obtained by the Los Angeles Times from the company to a Los Angeles-area franchisee says: “SuperShuttle plans to honor all reservations and walk-up requests for service” through Dec. 31.

Founded in 1983 to serve Los Angeles International Airport, SuperShuttle has lost ground to competitors such as Uber and Lyft. In recent weeks it has pulled out of airports serving many cities, including Phoenix, Baltimore and Minneapolis, the Times said.

Attempts by the newspaper to reach Mark Friedman, identified as general manager in the letter’s signature line, were unsuccessful Thursday. SuperShuttle executives could also not be reached for official comment. But two SuperShuttle reservations agents reached by telephone confirmed to the Times that the company was going out of business, as did a company executive who was not authorized to speak publicly.

SuperShuttle is one of the few services that can still pick up riders curbside at LAX after the airport’s recent changes to help ease congestion. In November, Lyft, Uber and taxis were relegated to a pickup lot next to Terminal 1. Travelers can either walk to the lot or wait for an airport shuttle to ferry them.

The letter to the franchisee cited “a variety of factors” for the company’s closure, “including increasing costs and changes in the competitive and regulatory landscape” that “have called into question the economic and operational viability of the company’s operations.”

The company stopped operations at Hollywood Burbank Airport at the end of November, terminating the contract with the airport’s authority, airport spokeswoman Lucy Burghdorf wrote in an email Thursday.

SuperShuttle is owned by an affiliate of Blackstreet Capital Holdings, a private investment firm based in Bethesda, Maryland, court documents show. Blackstreet describes itself as specializing in acquiring small or mid-size firms “that are in out-of-favor industries or are undergoing some form of transition.”



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Japan vs. China : Why does Japan see China as a threat not as an opportunity?h

China and Japan are two vastly different countries with a difficult past and history with each other. Both are super powers in Asia, but are very different in almost every way imaginable.

In geopolitical terms China is a nightmare for Japan.

China occupies the whole continental East Asia and puts Japan in a corner. Imagine a Europe in which France, Germany, Italy, Benelux get united and leave only Britain outside. Britain will have no chance to bargain or influence the continental Europe (what is happening now).

Historically Japan’s strategy was to block, undercut, or keep China divided so much as possible.

In 1905 after the first Sino-Japanese war Japan demanded the annexation of Liaodong Peninsula, which would block the whole Chinese northern plains and broke the barrier of the Bohai sea, which otherwise was a Chinese domestic lagoon. This was found by the Western powers to be too much, under whose pressure Japan exchanged Liaodong for Taiwan, which in its term would block the Yangtze estuary, the most prosperous region of China.

During 1912 – 1931 Japan tried all its best to keep China divided under several equally strong warlords and keep them kill each other.

In 1931 Japan found Manchurian warlord was launching a very promising industrialization program, it annexed Manchuria.

In the following years it encouraged the splitting of North China and Inner Mongolia.

In 1937 Japan sensed that China’s Yangtze Delta was experiencing a boom of economy, it started the second Sino-Japanese war.

Eventually due to a series of misstep, the China adventure landed Japan in a disaster.

Up to 2001 China’s WTO entry ; Japan has an informal investment ban on China. On several occasions Chinese side sought the industrial co-operations from Japan, which were categorically rejected. At the same time Japan provided a huge amount of Overseas Development Aide to China, only to encourage China to stay in raw materials, timber, and agricultural goods production (for which many Japanese think even today that China should be thankful).

But since the economic crisis of 1997 when the Japanese business in Southeastern Asia was flattened, the rise of China as a manufacturing hub has become inevitable. Most Japanese companies entered China reluctantly only when they realized that, if they stayed out, they would be rolled over by the bus. But when they came to China, the Chinese market was largely occupied by other developed countries, mainly the Europeans, later also the Americans.

Until today China is the largest overseas automobile market for Germany, France, and the US. German VW, French Citroën, and American Buick, which are hardly seen elsewhere Asia, are ubiquitous in Chinese cities. China’s market is the major reason that German VW has become the largest automobile manufacturer of the world since 2016.

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