Firm:
Bridgeview Capital Advisors, Inc.
Job Title:
President
Biography:
David N. Waldrop has earned the trust and respect of his clients during his career in the financial services industry. His wealth of knowledge allows him to provide the superb personal service and financial perspective upon which our customers have come to rely. He works closely with clients and has a proven ability to respond and plan for their needs.
As a Certified Financial Planner and President of Bridgeview Capital Advisors, Inc., David is responsible for advising clients in the areas of retirement plans and portfolio management. Specializing in financial planning and consulting, David brings together all aspects of his clients’ finances while incorporating their goals and objectives, both personal and financial.
After graduating from Cal Poly San Luis Obispo in 1998, David joined the lending division of a well known national bank where he specialized in consumer credit analysis and finance. In 2000, David steered his focus toward investments and insurance planning. In addition to providing auto, home, and life insurance, David worked directly with clients and public institutions to establish and promote retirement savings through various qualified plans.
After completing the professional and educational requirements of the Certified Financial Planner Board of Standards, David earned the marks of a Certified Financial Planner or CFP®. In this capacity, David focused on high net worth clients and prepared asset allocation analysis, cash flow planning, and insurance strategies. As a Financial Advisor with Bridgeview Capital Advisors, Inc., David provides his services to a broader clientele and customizes the scope of planning for each client.
In his time away from work, David enjoys spending time with his family, golfing and playing guitar. He is also a proud supporter of Shriners Hospitals for Children in Sacramento.
Education:
BA, Political Science, California Polytechnic State University-San Luis Obispo
Assets Under Management:
$35 million
CRD Number:
4214855
Great question. There are many differences between the two. Here are just a few:
- 401(k) has higher annual limits. In 2017, you can contribute $18,000 to a 401(k) ($24K if age 50 or older). IRA limit is $5,500 per year or $6,500 if age 50 or older.
- 401(k) plans can have loan provisions where you can borrow money and pay the account back. IRAs do not allow loans. I wrote an article about 401(k) loans that you might find helpful.
- 401(k) plans are funded with a salary reduction through your company payroll. This is known as “pre-tax.” IRAs are funded with your after-tax dollars. Then, if eligible, you can deduct the amount you contributed from your income when you do your taxes.
- 401(k) plans are offered by employers as part of a profit sharing plan. The “401(k)” part is what allows the employee to contribute a portion of his/her own salary (See item 1). A 401(k) can also be funded with matching contributions from the employer. For example, the employer might match each dollar you contribute up to a certain limit. This matching is a very attractive component to a 401(k) plan. If an employer offers matching, you would be hard pressed to come up with a reason not to participate.
- 401(k) plans offer a limited list of investments to choose from. The 401(k) is administered under a trust document for the benefit of employees and the trustees are responsible for selecting the investments to make available within the plan. The 401(k) participant must choose among those offered. An IRA gives the investment decision making to the individual. With and IRA, the investment options are vast compared to a 401(k). For example, in an IRA you can invest in individual stock whereas most 401(k) plans don’t allow this (unless it is company stock).
I just realized I could probably write 5 more pages on this, but will stop here. I wrote an article called Don’t Neglect Your 401(k) Plan that goes into a little more detail about these plans. I hope you find it helpful.
Please note that this should not be considered investment advice and is only educational in nature. Please be sure to consult with your own legal, tax, or investment advisor regarding your specific situation.
Best of luck!
David N. Waldrop, CFP®
Steadily increasing interest rates shouldn’t be a problem. We’re coming off of record low interest rates for a record period of time. Normalizing interest rates should be viewed as a positive development. However, interest rates that rise too quickly could be problematic.
If mortgage rates rise too quickly, it could price people out of making a home purchase. Real estate is a huge economic driver for the economy and if rates rise too quickly, it could cause a slowdown.
Small business relies heavily on access to credit to fund new investment, hiring, and payroll. Most businesses make reasonable plans to plan for future costs. If the costs (interest rates) rise too quickly, that could hurt small business.
Bonds also react negatively if rates rise too fast. Bond prices move opposite of interest rates. As rates rise, bond values decline. If they rise slowly, it isn’t much of an issue, if they rise quickly, that’s another story. I write about interest rate risk in an article called Bond Fund Basics and it goes into a bit more detail. I hope you find it helpful.
Please note that this should not be considered investment advice and is only educational in nature.
Best of luck!
David N. Waldrop, CFP®
Contrary to popular belief, there is no “borrowing” from Roth IRAs or Traditional IRAs. There are only distributions. “Borrowing” from a Roth IRA or Traditional IRA is a misconception likely due to the ability to borrow from some 401(k) plans. This is accomplished via a 401(k) loan. I wrote an article about 401(k) loans called 401k Loan – 3 Reasons Not To Borrow that goes into more detail.
With regard to Roth IRA distributions, there are ways to access the funds, but it’s not borrowing. Borrowing implies that you can pay it back. You can’t pay back distributions taken from Roth IRAs or Traditional IRAs. There is an exception for distributions from an IRA that are paid back within 60 days. However, that is a totally different subject and it is also a commonly misunderstood rule.
Roth IRA withdrawals (distributions) of principal are tax and penalty free. The reason is that contributions are made with after tax dollars. The IRS has already taken their bite with regard to the principal (what you contributed). The earnings are a different story. While there can be exceptions, early withdrawals can be subject to taxes and penalties that are attributable to earnings (not principal). If you’re looking to take a withdrawal from the Roth IRA due to education, first time home purchase, or to help with a disability, you should definitely read up on the exceptions.
Early withdrawals are those made prior to age 59 ½. Withdrawals made after age 59 ½ and after having the account for at least five years will allow for withdrawals that are tax and penalty free. I wrote an article called Roth IRA – 5 Things Retirement Savers Must Know that covers other important considerations of investing in a Roth IRA. I hope you find it helpful.
Please note that this should not be considered investment advice and is only educational in nature. Be sure to consult your own investment, tax, or legal professional for help with your specific situation.
Best of luck!
David N. Waldrop, CFP®
I caution against giving any president credit and blame for how the stock market behaves. Markets move for a variety of reasons including political developments and economic policy proposals. Financial news and news media in general love to point to the “reason” of events. In this case, credit for the rally is attributed to the election of President Trump. It’s worth noting that markets were hitting records before the election, even when many pundits were claiming Clinton would be the winner of the election.
Consider the way the markets performed when President Obama took office. The markets were in free fall and didn’t bottom until March of 2009. Was the decline that continued when he took office until two months later attributable to him, or were larger financial and economic forces at play? Similarly, the Dow Jones Industrial Index increased 125% during the Obama administration. Should President Obama get credit for that? My feeling is that all presidents receive far too much credit and blame for how the stock markets perform than they deserve.
For the most part, crediting or blaming presidents for stock market performance is just noise. I wrote an article called Investment Decisions And Tuning Out The Noise. It provides more examples of what investors should ignore. I hope you find it helpful.
Please note that this should not be considered investment advice and is only educational in nature. Be sure to consult your own investment, tax, or legal professional for help with your specific situation.
Best of luck!
David N. Waldrop, CFP®
The first step is to identify what the funds will be for. An example of this would be grad school, down payment on a home, starting a small business, retirement, etc.
The next step would be to identify the time horizon. Will the funds be needed in 5, 10, or 20 years? If you’re going to be investing funds for the short term like 1 to 3 years, you should steer clear of the stock market and stick with CDs despite the low rates. If you are investing with a longer-term time horizon, it would be completely prudent to allocate a portion of your investments to stocks.
Lastly, you need to identify your risk tolerance. Consider how comfortable (or uncomfortable) you would be experiencing a 10% to 15% drop in the value of your investments. If you couldn’t sleep at night, it might be the wrong investment for you.
I wrote an article called Diversification Is Not Enough that goes into greater detail on this subject. I hope you find it helpful.
Please note that this should not be considered investment advice and is only educational in nature.
Best of luck!
David N. Waldrop, CFP®