Reposted from BizJournals.com (March 20, 2015) – Article by Mike W. Thomas —
In seven years, PAX Financial Group LLC has grown from managing $50 million to more than $265 million for its clients, most of whom live in San Antonio. The firm specializes in providing financial advice to individuals and businesses from “Middle America.”
Darryl Lyons, a certified financial planner and founder of PAX Financial, spoke with the San Antonio Business Journal about the challenges to small investors today.
What are some of the biggest challenges people are facing in today’s market? There are a lot of income tax surprises popping up this year in Turbotax as the Affordable Care Act begins to take effect. The state’s franchise tax is also adding to a complicated situation. And business owners have a lot of new regulations to comply with. It may be time for some people to pay more for a (certified public accountant) who is more proactive.
Tax rules are constantly changing and expecting clarity in the tax code is wishful thinking. Once the presidential debates get under way it will bring more uncertainty and anxiety as to which way the government will move in the future. But we have been through the ups and downs of government meddling many times before, and we will work through it.
What are your expectations for the coming year? A recent Gallup poll showed that over the past six years more small businesses had closed than have opened. I think that is a troubling statistic because we depend on our small-business community to drive our economy. But I think as long as we don’t lose our ability to innovate we will be OK.
Innovation is something that is hard to get a handle on. It is what helps to pull a lot of companies out of bad decisions from the past. That is our advantage as a country and as long as we protect and enhance our ability to be innovative then our small-business culture will continue to thrive and grow.
The other thing we need to do as a community is to give more to those who are less fortunate. We are the wealthiest nation in history, but we only give about 1.5 percent of our income to charity. I think we can do better than that, and so we ask our clients to live within their means and consider setting aside more money for those in need.
What is the most common bit of advice you have for most clients? That they need to save more. We recommend that everyone save at least 15 percent of their gross income. But to do that they have to be very systematic; otherwise, they end up spending it on other things and have nothing left over.
A good example is Christmas. It happens at the same time every year, but people are always surprised by it. They buy things based on emotion and put it all on credit cards. Then they wonder where their cash flow went.
People also need to quit trying to compete financially with everyone else. You don’t need to go out and buy a pool just because your neighbor has one. We look under a lot of hoods, and what we find is that most everyone has the same problems. Our advice is similar to what Dave Ramsey says: “Act your wage.”
If you insist on buying that pool that you can’t afford and paying 7 to 9 percent interest over time, then one day you will wonder why you don’t have any money for your kids’ college or for retirement.
Mike W. Thomas covers technology/telecom, military, finance, regulatory issues as well as nonprofits/education.