Woodley Farra Manion Portfolio Management

Behavioral Finance - How Early Money Beliefs Drive Financial Habits and Decisions ? The beliefs we form about money in childhood are powerful influences on our financial habits and decisions as adults. From an early age, we observe how our parents or caregivers handle money, what they say about wealth, and how they react to financial challenges. These observations become ingrained beliefs, shaping our attitudes toward spending, saving, and even debt. For example, a child raised in a family that stresses financial security may develop a strong inclination to save, while one who sees frequent spending might come to view money as readily available and easy to replace. These early beliefs lay the groundwork for lifelong financial habits. ? Psychologists call these unconscious financial beliefs "money scripts," which typically fall into one of four categories: money worship, money status, money avoidance, and money vigilance. People with a money worship script believe that more money will bring happiness, often leading to overworking or overspending. Those with a money status script equate wealth with self-worth and may engage in conspicuous consumption to project success. Money avoidance reflects a discomfort with money, causing individuals to shy away from financial matters, sometimes resulting in neglected finances. Finally, money vigilance describes a cautious approach to money, emphasizing saving but sometimes leading to anxiety about spending. Each script influences financial decision-making, often in ways the individual may not recognize. ? Becoming aware of these scripts and understanding how childhood beliefs about money affect our behaviors is the first step toward building a healthier relationship with finances. By recognizing which money scripts influence our behaviors, we gain insight into the unconscious forces driving our spending, saving, and investing patterns. Whether it’s loosening up around spending or finding comfort in saving, reshaping our beliefs helps us make financial decisions that align with our goals rather than with unconscious influences from the past.

According to research conducted by Fidelity, seventy-one percent of women believe that investing is essential for building generational wealth. Unsurprisingly, the primary reasons motivating women to invest are securing a good quality of life for their children, maximizing earnings, and achieving financial goals like retirement and major purchases. While Millennials prioritize building generational wealth, older generations are more focused on being able to afford future objectives. Despite progress, the financial confidence gap still exists, and women continue to experience higher levels of financial stress than men. While more women are recognizing the importance of investing to build generational wealth and secure their financial futures, certain trends and challenges stand out. The increasing number of women investing, their regrets about delayed decisions, and their need for clearer guidance underscore the broader shifts taking place. As the data reveals, women’s investment behavior is evolving, but there are still barriers to overcome, especially in terms of confidence and access to resources. The following statistics offer a closer look at these emerging trends: - Increase in Women Investors: 7-in-10 women now own investments in the stock market, marking an 18% rise from 2023. - Gen Z Women Investment Growth: Currently, 77% of Gen Z women own stock market investments, a 6% increase from 2023. - Regrets About Late Start: More than 7-in-10 women wish they had started investing their extra savings earlier. - Need for Guidance: 68% of women would be more likely to invest if they had clear steps on how to do so.

We are proud to announce that we have been named to the CNBC Financial Advisor 100 List for the 5th consecutive year, which highlights firms nationwide that assist clients in defining and reaching their financial objectives. We celebrate this prestigious recognition alongside our clients and sincerely appreciate their trust and confidence in our firm!

Patience and discipline are easy to understand but difficult to practice. Arguably, they are two of the most important factors driving long-term investment success. One of the best ways Americans can become millionaires is by consistently contributing to their retirement accounts, not by timing the market or being early investors in startups. However, the investing world is full of distractions, speculations, and noise. Some investors even blur the line between the stock market and a casino, confusing long-term investing with short-term trading.

Investing involves different types of risk, and it is important to understand how each can affect your investments. Volatility is one of them, usually referred to as the fluctuations in asset prices. Volatility can be measured and managed by adjusting a portfolio’s allocation and diversification. Other investment risks to consider are business risk, interest rate risk, inflation risk, liquidity risk, currency risk, commodity risk, and political risk.?

Thinking about investing in Real Estate? Whether you're new to investing or expanding your portfolio, keep these key points in mind: 1. Market Trends Understand current conditions and future projections. Are property prices rising, stable, or declining? Is there new construction coming into your desired market? How is the supply compared to the demand? In competitive markets, it’s easy to get caught up in bidding wars and overpay for a property. Overpaying can drastically reduce your expected returns and make it difficult to recoup your investment if market conditions change. 2. Budget Properly Underestimating potential rental income and costs can significantly impact your actual return. Key expenses to consider include buying/closing costs, financing costs, property maintenance, property taxes, property insurance, property management fees, new tenant commissions, HOA fees, special assessments, business structuring fees, and accounting and filing fees. 3. Assess Your Involvement Decide how hands-on you want to be with your investment. Hiring a property manager usually costs 8-12% of the annual gross rental income. Self-managing your property can save expenses but comes at the cost of your time and effort.?Assess if this aligns with your lifestyle and goals. 4. Evaluate Opportunity Cost Weigh the opportunity cost of investing your time, effort, and money into real estate against other investments with similar returns, time commitments, and satisfaction. Ensure your choice aligns with your overall financial and personal objectives. 5. Liquidity Real estate is considered an illiquid asset because?the process of buying and selling properties can take much longer compared to financial assets like stocks and bonds. In the case of an emergency, turning the asset into cash can be challenging. 6. Diversification Real Estate investing can add diversification to your portfolio if you have exposure to different property types and locations. However, new investors will likely be concentrating risk and decreasing diversification by investing excess capital into only one or two properties. If you want to learn more about the top challenges of self-managing a rental property and how to overcome them, here is a helpful article: https://lnkd.in/e9ueawec.?To see the opinion of 764 American residential real estate?investors on the broader picture of the residential real estate market, here is a Clever Survey: https://lnkd.in/eGkh8iHb.

Thinking about investing in Real Estate? Whether you're new to investing or expanding your portfolio, keep these key points in mind: 1. Market Trends Understand current conditions and future projections. Are property prices rising, stable, or declining? Is there new construction coming into your desired market? How is the supply compared to the demand? In competitive markets, it’s easy to get caught up in bidding wars and overpay for a property. Overpaying can drastically reduce your expected returns and make it difficult to recoup your investment if market conditions change. 2. Budget Properly Underestimating potential rental income and costs can significantly impact your actual return. Key expenses to consider include buying/closing costs, financing costs, property maintenance, property taxes, property insurance, property management fees, new tenant commissions, HOA fees, special assessments, business structuring fees, and accounting and filing fees. 3. Assess Your Involvement Decide how hands-on you want to be with your investment. Hiring a property manager usually costs 8-12% of the annual gross rental income. Self-managing your property can save expenses but comes at the cost of your time and effort.?Assess if this aligns with your lifestyle and goals. 4. Evaluate Opportunity Cost Weigh the opportunity cost of investing your time, effort, and money into real estate against other investments with similar returns, time commitments, and satisfaction. Ensure your choice aligns with your overall financial and personal objectives. 5. Liquidity Real estate is considered an illiquid asset because?the process of buying and selling properties can take much longer compared to financial assets like stocks and bonds. In the case of an emergency, turning the asset into cash can be challenging. 6. Diversification Real Estate investing can add diversification to your portfolio if you have exposure to different property types and locations. However, new investors will likely be concentrating risk and decreasing diversification by investing excess capital into only one or two properties. If you want to learn more about the top challenges of self-managing a rental property and how to overcome them, here is a helpful article: https://lnkd.in/e9ueawec.?To see the opinion of 764 American residential real estate?investors on the broader picture of the residential real estate market, here is a Clever Survey: https://lnkd.in/eGkh8iHb.