Packing for the Right Financial Trip - 3 Basic Filtering Questions | Series 4.2 - Enjoy More 30s: Family Finance

Episode 2

Packing for the Right Financial Trip - 3 Basic Filtering Questions | Series 4.2

Published on: 19th July, 2021

How to interpret the advice you come across...and how to filter it to you!

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcript
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Welcome to the enjoy more 30s family finance

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podcast. The only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us stress us out and distract our focus

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from simply enjoying life.

Joseph Okaly:

Hello, and welcome! We are here in the

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second episode of The Your Major Money Misnomer Series. Last

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week, we discussed cryptocurrency, we talked about

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its origins, reasonings for development, and how those

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haven't really exactly matched the quick wealth creation and

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speculation headlines that you're probably seeing today.

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Today's episode is titled Packing for the Right Financial

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Three Basic Filtering Questions, and what we're really

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going to get into today is whether it be, you know, Aunt

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Betty, or Grandma Jane or someone we don't even know on

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Twitter, we've come across a lot of random tidbits of advice,

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right? What's good, what's not so good, it can be really hard

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to tell. So today, we're going to cover what you need to know

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about how to interpret that financial advice or

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recommendations you're invariably going to come across,

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and what you can do in the form of three basic filtering

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questions to make sure they're relevant to you, and what you

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should actually be working into your own plan.

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Now, a passion of mine that has really come up over the years

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since I've owned a home is landscaping and gardening. And I

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don't really know when it kicked in exactly as I distinctly

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remember very much not liking it as a kid, you know, picking out

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weeds from the patio cracks, though probably as a kid was not

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exactly gardening. So I guess I have a little bit of a pass on

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that. But since owning my home, and you guys out there may have

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experienced this as well, it really feels great to make the

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outside of your house look nicer. And in that process, you

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kind of come across plants that you like others that you may not

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like so much. And one of my favorites that has kind of

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developed there are hydrangeas. It's not anything that's exotic,

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or really all that fancy, and I'm sure everybody out there has

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heard of them. But when they're in bloom, they're just these big

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flowers, so lush and beautiful. And you know, the problem

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though, when it comes to trying to make a beautiful hydrangea

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area of your garden, is that the deer, around me at least also

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love them. Now, they don't love them in the way that I love

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them. They love them in the way of eating them. Devouring all of

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the hydrangeas is a great pastime of all deer out there!

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So I tried some different locations, I tried some

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repellents, you know everything out there, you kind of name it.

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But at the end of the day, it's been pretty much the same result

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- every year, they get eaten down to pretty much nothing. And

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in my neck of the woods from my property, its just hydrangeas

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just really are not possible without completely gating them

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in or something to that effect.

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So what you need to know is that it can be very similar when it

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comes to financial advice or recommendations that you may be

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coming across out there. A lot of it could sound like it's a

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good idea, but it needs to fit into what you are actually

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trying to do. So my opinion on most financial products out

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there is that, by and large, there's not necessarily good

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products or bad products, just that products that are a good

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fit for one situation or maybe not such a great fit for another

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situation. If you listen to past episodes that I've done, so

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series 1.6 'Investments Should Be Boring', you know that I

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wouldn't recommend a market timing type of approach. But

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take something like an annuity. Most of these can have benefits,

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but they can also have trade offs for those benefits. So they

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again need to fit with a particular situation.

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One of the examples that we most often use just to kind of drive

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this point home, is when you think about a pickup truck

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versus a small car. One is not inherently better than the

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other, you need to really attach a task to that scenario first.

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If you're driving cross country, thie small car is probably

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better as it will likely get much much better gas mileage. If

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you need to pick up a load of mulch, well now the pickup truck

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is clearly the better choice. We don't want to be pouring mulch

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into the back of the Prius. So if someone says you should be

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using multiple banks, or that you should max out your 401k or

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that you should have a certain type of an annuity or that you

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should have a certain type of life insurance. You really need

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to consider if that car or pickup truck is a fit for your

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specific task or situation.

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So what you can do in sorting this out is asking three basic

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questions. What are my goals I'm trying to accomplish, am I able

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to implement it even if I wanted to, and who is providing the

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information? As always, for me, it starts with your goals,

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right? I'm always the high level "What is your mindset? What are

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you trying to accomplish?", let's make sure we're clear on

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that before we decide on anything that we may want to be

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using, what would actually make my life more enjoyable kind o f

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a thought process. Is retiring early a priority? If not, then

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maybe maxing out your 401k isn't the best approach. Sure, you

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want to put enough away to get to, you know, where you're going

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to, but if enjoying the present is more of a priority, maxing

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out your 401k may not actually be fitting with your goals. So

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again, this, to me, is always the first and most important

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filter. We just too often see people doing what they are you

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know, "supposed to do", not what would actually bring them closer

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to making life more enjoyable to them. So always remember that is

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the high arcing goal that we're trying to accomplish.

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The next question is implementation. Can you even

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implement this if you were wanting to? So a Roth IRA is

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great for sure in how it grows tax free, but you may be over

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the income limits. A term life insurance outside of work may be

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great to help in better controlling your own protection,

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but perhaps you have a health issue, and so Group Life

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Insurance through work is the better or maybe only option. Or

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in a different slant, something like calculating excess income

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every month and investing it may sound great, but actually taking

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the time every month to add it all up and make that

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contribution could prove too much of a hassle to really

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maintain long term. So make sure it's something that you can do

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and do so sustainably without too much effort.

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Lastly is in who was providing the information, as that can

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often give you some insight. If it's Great Uncle Al, well, he's

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probably not in your age or situation. So an annuity that is

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a fit for him could likely not be a fit for you. Aunt Marge may

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use three banks but maybe that's because she's over the FDIC

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insurance limits for each institution, and so for you,

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it's more of really just a hassle without adding any

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additional protection. If this is information you're getting

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from a bank or an article you find online, that company is

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likely providing you with that information for a reason. So

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make sure it's coming from a source you trust more than

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anything. Generally speaking, Nightly News, you know, the

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entertainment is not where you should be getting your financial

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information from.

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So a quick recap of today is that there is a ton in the way

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of financial advice and recommendations out there. It

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will not all fit your situation and the goals you've laid out.

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That doesn't necessarily mean it's bad advice, though, just

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that it may not be a fit for your situation and what would

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make life most enjoyable to you - what your goals are. Think of

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that small car versus the pickup truck example. What you need the

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vehicle for determines what's the best fit. Finally use the

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three basic filtering questions I provided to help and determine

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what may be most applicable to you. So one, would it get you

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closer to making your life more enjoyable? Would this actually

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add enjoyment to your life? Or is it something that just seems

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like it might be a good idea to do and may not necessarily help

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in this question. Two, is it implementable and sustainable,

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in an easy to follow way? There's a reason crash diets

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don't work long term. And the reason is because you may be

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able to do it for two weeks, three weeks, two months, but

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long term you can't, so make sure it's implementable in a

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sustainable, easy to follow way. Lastly, what is the sources of

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information? Does it meet where I am in my life? Do I trust who

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this is coming from?

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Thanks very much as always for tuning in today. Iif you are

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able to implement what we cover that is fantastic. You have less

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to worry about than before, you can just focus more on enjoying

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life. If you are wanting help with these things though, or

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have questions you need help and clarifying, check out the Ask

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Joe section on the show's website www.enjoymore30s.com,

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that's enjoymore30s.co. If you enjoyed this episode, please

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make sure to subscribe, follow review us on Apple podcasts or

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wherever you listen. There are literally millions of young

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families out there I'm trying to reach and help just like you.

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The next episode is tax refunds are bad, WHAT? Where we're going

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to cover why that check you may be getting at the end of the

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year could actually be to your detriment. Until next week.

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Thanks for joining me today and I look forward to connecting

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with you again soon.

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The conversations on this show are

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Joseph pinions and provided for general information purposes

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only. They do not constitute accounting legal tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first, Joseph affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS securities Inc and TFS advisory services an SEC

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registered investment advisor member FINRA s IPC

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About the Podcast

Enjoy More 30s: Family Finance
Family Finance for Young Professionals.
Young families receive little to no personal finance help. We all grow up to have jobs and money, yet our education system focuses on Shakespeare and Algebra. Even professional advice can be hard to come by, with the majority of the industry chasing retirees and existing wealth.

Joe Okaly's podcast is aiming to change this, providing personal financial advice geared specifically to professionals with young families. This podcast is dedicated to making life more enjoyable for young families, by hitting on the financial topics that tend to weigh on us, stress us out, and distract our focus from simply enjoying life.

Joseph P Okaly is a CFP Certified Financial Advisor who fits directly in with who this podcast is focused on - a young professional with a family. With over a decade of experience as an advisor, there is passion and knowledge to make a difference.

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.