Finance 101: September 2025
In September the financial advisors at Ruedi Wealth Management wrote four more columns for The News-Gazette’s Business Extra section. Make sure to look for them every Saturday in the weekend edition of the paper, but in case you missed any in September all four are below.
Advice from Your Future Self
Paul R. Ruedi, CFP®
I often browse social media forums in search of column ideas, and lately I’ve noticed a recurring question pop up in multiple different places. The posts ask something along the lines of: “40 year olds, what advice would you give your 20 year old self” or “50 year olds: what do you wish you knew at 30?”
My mind immediately assumed I’d see suggestions that people wear sunscreen, take exercise seriously, quit smoking, or simply enjoy the younger years. But almost every time I look at a post like this the very top answer is “understand compound interest.”
It is hard to appreciate the impact compound interest can have if you haven’t experienced it yourself. To get at least some perspective I usually suggest people work through examples using the rule of 72 to understand how much investments can grow and compound.
If you take the growth rate of an investment and divide 72 by that number, you will get a fairly accurate approximation of how long it will take your money to double. So for example, if a stock portfolio grows at 10% per year over time, it will take around 7.2 years for that portfolio to double. That means in a 20-year period (or 21.6 years to be more precise), your money will double around 3 times. 1 dollar will double to 2, which will then double to 4, and then to 8.
People in their 20s and 30s haven’t experienced the multiple decades of growth it takes to truly appreciate the impact of compounding. They may have seen a dollar that was invested grow to $2. But people 20 or more years into that journey have experienced a couple extra compounding periods. They are now watching the original dollar they invested grow from 4 dollars to 8. Or from 8 to 16. It is at this end of the investment journey that compound growth starts to feel really magical.
But it isn’t easy to stay invested for multiple decades to capture those compound returns. There will be moments where investors get too enthusiastic. They will be tempted to make mistakes like pouring money in on what’s “hot” at the time, rather than staying diversified.
There will be moments when investors get scared and will be tempted to make different mistakes, like selling during market declines. If you can simply avoid these mistakes and harness the compound returns investing can provide, your future self will thank you. If you aren’t able to do that yourself, you may want to talk to a financial advisor.
Paul R. Ruedi is a CERTIFIED FINANCIAL PLANNER™ professional with Ruedi Wealth Management in Champaign, Illinois.
The Future of Financial Advice
Paul R. Ruedi, CFP®
As financial advisors, a large portion of what we do boils down to mathematical analysis. We analyze a person’s current financial situation, their savings rate, their investment portfolio, etc. to give them a financial road map that helps them make decisions. All the moving parts can be so complicated, it really does take a special type of person to make sense of everything.
But as artificial intelligence gets even more advanced, the analysis we do will become less special. I recently challenged ChatGPT 5 with a question about deciding between saving in Roth vs. Traditional retirement accounts and predicting future tax rates. In the past I have seen AI tools take shortcuts or make incorrect assumptions that I could poke fun at given my level of expertise.
But the analysis the most recent iteration of ChatGPT performed was astounding. It analyzed everything that could possibly matter and even went the extra mile by considering less common things like company stock ownership programs that I did not prompt it to consider.
The writing is on the wall. Anything we do that is just pure math, no matter how complicated it is, will be able to be done by AI. In most cases, it already can be. I’d go so far as to say the analysis an AI system can perform has already surpassed that of a human advisor. But is there a role for an advisor in an AI-driven world?
Though an AI program can do the analysis, it us up to a human to take action. Not everyone is capable of taking action when it comes to their own finances. It often helps to outsource that responsibility to another person who is not emotionally involved in your finances.
An experienced advisor can also step in when emergencies happen, or when a temporary decline in the stock market is tempting a person to sell their investments and derail their financial plan. An AI program simply can’t connect to that human, emotional side the way a fellow human can.
I predict there is always going to be a place for a human advisor, for many of the same reasons we still have pilots in cockpits. When push comes to shove, we ultimately want a human to be responsible and accountable for making sure things go correctly. So even if you are doing a lot of complicated financial analysis yourself using AI, you may still want to consider working with a financial advisor to provide the human reassurance.
Paul R. Ruedi is a CERTIFIED FINANCIAL PLANNER™ professional with Ruedi Wealth Management in Champaign, Illinois.
Home Equity and Financial Planning
Paul R. Ruedi, CFP®
Investors and retirees who have owned a home for five years or longer are likely sitting on a substantial amount of equity in their homes. But home equity differs from other assets because it can be more difficult to “spend.” Fortunately, there are a few ways we can incorporate home equity into a financial plan, especially for retirees worried about long-term care.
The first option people have is to borrow against their equity using a typical home equity loan like a HELOC (short for home equity line of credit) or a fixed rate home equity loan. These are simply loans against the equity the owner has built up in the house and can be an option for people who want a lump sum to achieve a financial goal without having to withdraw from their investment accounts.
Another option is to do a cash out refinance, where people get an entirely new mortgage against their home based on a higher home value that allows them to borrow more. The idea is to borrow more money than your current mortgage balance, pay it off, and hold on to whatever is left over for spending purposes. But as rates are now higher after a period of very low interest rates, people with low-interest rate mortgages may want to think twice before doing something that increases the interest rate on their current mortgage balance and accrues even more debt.
Reverse mortgages are another option, allowing homeowners to receive a lump sum, monthly payments, or a line of credit while continuing to live in their home. The bank that loans the money is typically repaid after the homeowners pass away or move out permanently. While reverse mortgages can be valuable tools, they come with complex rules, so make sure you understand what you are signing up for.
Last but not least, we often have clients plan to simply keep the house and sell it to pay for long-term care when/if the need arises. This is a very practical way to plan for long-term care, but as long-term care is very expensive people should make sure their home equity will adequately cover their long-term care needs.
Home equity often represents a significant portion of a household’s net worth and should not be ignored for financial planning purposes. But there are pros and cons to each of the different options to use home equity, so investors should do their due diligence before making any decisions. If you need help with that, you may want to talk to a financial advisor.
Paul R. Ruedi is a CERTIFIED FINANCIAL PLANNER™ professional with Ruedi Wealth Management in Champaign, Illinois.
Purpose and Planning
Paul Ruedi
When most people think about retirement planning, their minds go straight to the numbers. How much do I need? How much can I spend? Will my savings last? These are important questions, but they’re only half the picture.
Retirement is a big financial crossroads, but it is also a major life transition where people must now find purpose and fulfillment in a world where they no longer have a career. In addition to planning the financial aspects of retirement, people need to consider how they are going to spend their time.
After decades of work, many retirees are surprised to find themselves struggling, not with their bank accounts, but with their calendars. Without the structure of a job, days can feel aimless. A career often gives people not only income but also identity, community, and routine. When that’s gone, retirees sometimes find themselves asking, “Now what?”
That’s why true retirement planning goes beyond just turning your assets into a stream of income. It’s about designing a life that’s both financially empowering and personally fulfilling. Advisors who understand this can help clients think through not just how much they’ll spend, but how that spending will align with the things that make them feel fulfilled.
Some retirees thrive when they pursue hobbies they never had time for, like painting, golf, or gardening. Others find meaning in volunteering, mentoring younger professionals, or even working part-time in a passion project. Travel, family time, and new learning opportunities can also provide a sense of purpose. But these things won’t just happen. You need to be intentional and plan for them in advance.
This is where the financial and human sides of retirement intersect. A strong financial plan ensures the resources are there to support a meaningful lifestyle. If travel is important, the budget should reflect that. If philanthropy is a priority, charitable giving strategies can be built in. If staying in the family home matters, that decision can be incorporated into the plan. Money is simply the tool that enables the life you want to live.
The best retirements happen when people use their financial assets to live a life full of purpose. Yes, you need to know your numbers and plan the financial aspects of retirement. But don’t stop there. Ask yourself what will get you out of bed each morning when the alarm clock no longer does. Then find out if you have the financial means to make that a reality. If you need help with that, you may want to talk to a retirement planner.
Paul Ruedi is the CEO of Ruedi Wealth Management in Champaign, Illinois.
*Disclaimer: Past performance is no indication of future results. You should not make any investment decisions without first performing your own due diligence and consulting your financial advisor.