Let's Talk Money

Definition
The geometric mean is the average of a set of numbers.

Why It's Important
This is not to be confused with arithmetic mean.  The arithmetic mean is what you learned in school when your teacher taught you about "mean".  As a refresher, let's look at the following set of numbers: 3%,7%,10%,6%,4%.  You find the mean by adding all the numbers together (3+7+10+6+4=30%) then dividing by the total number of records (5).  The arithmetic mean in this scenario would be 6%.  In contrast, a geometric mean would be calculated as (1.03x1.07x1.10x1.06x1.04)^(1/5)=~5.5015%.  

Now that you have the concept, let's apply it to personal finance and investing.  The geometric mean is typically used to calculate the average return on investments.  You would look at the past annual rates and calculate the mean to find out what your overall return was over the time period.  

For example, let's say one year you enjoyed 10%, the next 15%, and the next 8%....

Do you like to write, take pictures, or shoot video?  Join Tiffany as she sits down with Candace Howze, a local creative that does all three!  She shares how she started her freelancing jobs and her tips to keep them sustainable.

About Our Guest
Candace Howze is a North Carolina-based writer and multimedia artist with a passion for photography, literature, and film. She hosts Meraki Mentors, a podcast that provides a virtual mentoring platform for women creatives. In her spare time, you can find her listening to music, baking, or losing time in Target.

Visit her website: www.candacehowze.com

Follow her on Twitter: www.twitter.com/aceisjoy

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Definition
The head and shoulders pattern in technical stock analysis is used to predict what the support level (lowest price it will potentially go before traders make it rise again) of a stock is.

Why It's Important
You probably saw this and wondered why I would be talking about a shampoo.  LOL!  This is one of many charting patterns that technical analysts use to make stock price predictions.  I will warn that this is an advanced investing topic so if it does not make sense, do not worry!  

As you can see from the chart below, the trend looks like a head and two shoulders.  The "neckline" is a support level.  The stock price hit that level then bounced up.  Then, it hit it one more time and bounced up before breaking through the support and trending downwards.  

This same charting pattern can also happen in the opposite way as shown below.  In this scenario, the neckline shows the price ceiling instead of the support.  It is the same...

Building a successful business is not easy!  Join Tiffany as she sits down with Jazz Elyse of Luxe Fragrance Bar.  They talk about stresses, struggles, and overcoming obstacles while starting and growing their respective businesses.  Jazz knows her stuff, so listen up!  Have a pen and paper handy. 

About Our Guest
Jazz Elyse Whitaker is the founder of LUXE FRAGRANCE BAR, a tailor-made skincare, hair care, and fragrance company she created with a $10 investment as an undergrad at North Carolina A&T State University. That ten dollars has turned into a dream, on the Southside of downtown Greensboro, where she operates the first LUXE FRAGRANCE BAR flagship location and creates custom skincare and fragrances for her clients. She is also the founder of the Dove Enrichment Academy, where she home-schools her son, Marlon Jey. Jazz Elyse's latest business venture is helping small business owners with proper business structuring and asset protection.

Jazz Elyse was...

Definition
A fiduciary is a person or organization that acts on behalf of another person or persons to manage assets.

Why It's Important
The term fiduciary has been thrown around a lot lately but do you really know what it is? A fiduciaries' responsibilities and duties are both ethical and legal. Once the advisor or organization says that they are a fiduciary, they have to act in your best interest. This means that they are not supposed to do things just to pad their pockets (make money).

What does an advisor not acting like a fiduciary look like? They may try to sell you products you don’t need to make a commission. They may initiate trades unnecessarily just to get commission (also called churning). It is important to stay educated and ask questions.

Definition

Inflation is the increase in the prices of goods and services over time. It occurs at a specific rate according to the countries consumer price index.

Why It's Important

As prices rise, your money buys less than it used to.  You know when the older generation says, "Well, back in my day, this _____ used to cost $0.10!"  So, why doesn't that same item cost $0.10 today?  One word: Inflation!  Ronald Reagan said, "Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man."  It is true!  If inflation goes unchecked, it could wreak havoc on the economy.  In the US, the Federal Reserve (remember them?) curbs inflation by implementing monetary policy (printing new money, raising interest rates, etc.)

Join Tiffany as she sits down with Joe Driscoll of Average Joe's Financial Independence.  Joe is active duty military but on a mission to be debt-free.  They talk about moving around from assignment to assignment and the side hustles that propelled them both to paying off debt faster.

About Our Guest
Joe Driscoll has been leading people from all walks of life (including military and civilian) toward achieving financial independence. He has been married to his lovely wife Michelle for 16 years and they have two kids Benjamin (11) and Molly (7). As a family man, he understands the responsibilities and pressures that can bring. He and his wife have walked in most people's shoes living paycheck to paycheck and feeling like they can’t ever get ahead.

Follow him on Instagram: https://www.instagram.com/josephadriscoll

Follow him on Facebook: https://www.facebook.com/AverageJoesCoaching

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...

Definition
In economic terms, expansion is an increase in the level of economic activity.  It is a period of economic growth as measured by a rise in real GDP (Gross Domestic Product).

Why It's Important
An expansion means that the economy is doing good.  This typically coincides with the stock market.  Think about it.  If the economy is doing good, that means companies are generally doing good which means they are profitable.  It directly effects the stock market.  This is only one phase of the economic cycle.  

Are we currently in an expansion?  You can tell by figuring out if: 

• Real GDP has grown for two or more consecutive quarters, moving from a trough to a peak
• There is a rise in employment
• There is a rise in consumer confidence
• There is a rise in equity markets 

Expansion is also sometimes called a recovery and the economic cycle is sometimes called the business cycle.  Don't let the different terms...

Tiffany has a lot of travel this year so she wanted to share how she gets it done on a budget.  She goes over her favorite websites and tools to travel cheaply while continuing to tackle debt.

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Definition
A durable power of attorney is a designation that is given to someone in order to handle financial transactions if another person becomes incapacitated and can't make decisions on their own.

Why It's Important
This is one of the main documents needed when you start thinking about estate planning. It is important to have a person in place as a durable power of attorney in case an accident happens tomorrow.  Who could you trust to take over your financial matters?  

What is the difference between a durable power of attorney and a general power of attorney? With a durable power of attorney, the document remains in effect if you are unable to think for yourself.  With a general power of attorney, it is only in effect while you are alive and competent.  If you have a general power of attorney, once you become incompetent, it loses its enforcement.  

I highly recommend going for a durable power of attorney from the beginning so you don't have to worry about...