When Things Don’t Go as Planned

When Things Don’t Go as Planned

Ever had a plan not go as expected? Yeah, me too. In fact, my family and I are living this reality right now.

After twelve years of being in the same house, we decided for several reasons that it was time to make a move. So, last fall we starting taking steps to get our house ready to sell. After decluttering, painting, and finally fixing those pesky issues we’ve been ignoring for months (okay, maybe years), we listed our house for sale. And yes, we then began to love our house more than ever! That’s how it goes, right?

We still decided to move forward with selling our house. Our house sold quicker than expected. So now what? Well, things haven’t gone as planned.

The Plan

We had a plan: Sell our house then quickly (and conveniently) move into the next house we’ll love for another twelve years at least. Many of us have a plan, right? The infamous boxer Mike Tyson had something to say about this: “Everyone has a plan ‘till they get punched in the mouth.” Pretty straightforward, you think?

I’m a planner by personality…and trade. Heck, “planning” is in our business name. It’s what we do! Does that mean we develop the perfect plans without a hitch? Obviously, no. We often say the only 100% guarantee is that the financial plan will not go 100% as planned. Expect the unexpected: Family illness or premature death, job loss, market under-performance, etc. These are all things we plan for but don’t know exactly how these things will look for each client.

So, does that mean don’t plan at all? I’d say not.

The Response

How do you handle a plan gone awry? I’ll be honest (otherwise, my wife will call me out). I generally don’t handle it well. I complain. I stonewall. I sulk. Just when I get irritated reading and hearing about the Israelites wandering after being freed from slavery, I realize – I. am. them.

So, what might be a better response? Perhaps focusing on the things we can control: Voicing our frustration and anger in a healthy way; being thankful that we are not in control; trusting that there is a better plan ahead…much better than my own.

The Peace

“For I know the plans I have for you, declares the Lord, plans for welfare[b] and not for evil, to give you a future and a hope. 12 Then you will call upon me and come and pray to me, and I will hear you. 13 You will seek me and find me, when you seek me with all your heart. 14 I will be found by you, declares the Lord, and I will restore your fortunes and gather you from all the nations and all the places where I have driven you, declares the Lord, and I will bring you back to the place from which I sent you into exile.”

There is a plan for each and every one of us. We just don’t know (and won’t know) what it fully is on this side of eternity.

What can we do? Find peace in the fact that we are not in control. Rest easy that there is a plan for good, not harm, for those that trust in Him, our heavenly Father.

So, how am I now handling this time of uncertainty with housing? Honestly, I’m finding peace. We’re calling it a “family adventure!” The kids are onboard. Who doesn’t want adventure! (Well, me, sometimes…but ready or not, this one has begun).

If you’re looking for a financial professional to partner with on your next adventure, we’re on-board. Give us a call.

Finding a Financial Mentor

Finding a Financial Mentor

I was challenged this morning by a pastor and friend who spoke to a group of fathers. The question initially posed was this: “What do I most need today in regards to decisions?” Answer: “Someone ahead of me, and someone behind me.” In other words, we were challenged to have a mentor and mentee in our lives. We briefly journeyed through the life of Luke in the Bible. Luke traveled with Paul. Paul was ahead of Luke. Luke also had Theophilus in his life who he mentored.

When we need counsel, we so often go to our peers who are most likely facing the same struggles (and making the same mistakes). Don’t get me wrong – I do think it’s helpful to share our struggles and burdens with peers; but are our peers best for counsel? Or could it be wiser to receive counsel from someone ahead of us in life and who has already faced the struggles? My pastor friend would argue the latter. How would this look for financial decisions?

Why can taking this step be hard for us? I’d say that simply asking for help doesn’t come naturally to us. We might be ashamed of our circumstances or situation. We might think that no one else gets it. We might think there’s just no better way than what we’ve come up with ourselves. As a person who struggles with trying to think myself through situations, I have come to learn that sharing and processing what I’m going through with others is extremely helpful; and that sharing with someone who is ahead of me is even better.

Think about financial decisions that you have made during your lifetime – the good, the bad, the ugly. How about buying your first house? First car? First timeshare (uh oh…). What did you learn? Now rewind: If you would have received counsel from someone at least ten years ahead of you, do you think the bad/ugly decisions could have been avoided? Probably so.

What about your peers? Most likely they are signing up for the same college credit card only to get a free t-shirt. Then yes, that “free” t-shirt ends up costing you hundreds to thousands of dollars in interest for the tv or vacation you really couldn’t afford. What if you had sought counsel from someone at least 10 years ahead of you who showed financial responsibility? Do you think that they would have advised you differently than your peers? Most likely so.

What about us – financial planners? We are experts in this field, but does that mean we don’t need to seek financial counsel from someone ahead of us? I have been challenged to seek out a financial mentor. Just as you, we’ve found that it’s 100% impossible to check all emotions at the door when it comes to our own financial decisions. We need sound guidance – the same guidance we give to our clients.

As we seek out a mentor, we’re also challenged to seek out someone behind us that we can help. How do we find these people? Pray that the Lord would bring these people into your life. Open your eyes to those already around you. They may not be far away.

In closing, I’ll share wise counsel that the speaker received from someone ahead of him during a critical time in his life: “Make decisions today that you will least regret in ten years.” That’s good. What’s this all about? Priorities.

So now what? Make that call. Send that text or email. Take the risk. I just did.

Living a “Just In Case” Retirement

Living a “Just In Case” Retirement

Very recently a couple of us from the office attended a retirement income planning seminar. The seminar was titled, “Don’t Live a Just in Case Retirement.” The presenter was Tom Hegna, an internationally renowned expert on retirement planning.

The seminar concepts were helpful and timely. Many points were reminders, but a couple of points struck a chord with me and are worth discussing.

One key point was this: “The success of your retirement is really not about assets.” Well, that’s controversial. Isn’t retirement about having a certain number? (i.e. How much do you have in your retirement nest egg?) Assets are lost, stolen, divorced, etc.

His argument was that the success of your retirement really depends upon how much guaranteed, lifetime retirement income you have. His argument is not just based on emotion, but research.

I have to agree. Our most joyful, content clients are the ones that know each month a set, guaranteed direct deposit is coming that doesn’t depend upon market performance. It’s backed by a pension guaranty, Federal government or an insurance company. This deposit is what used to be called the “mailbox check.”

But what’s the problem? There are fewer and fewer companies offering the pensions of one to two generations ago. It’s too costly and risky for employers. Therefore, we see defined contribution plans more today, such as 401ks, 403bs, and deferred compensation.

The risk has been transferred from the employers to the employees. The employees are in charge and responsible for saving enough for retirement. Problem is, how much is enough? Is it a certain number? We’ve dispelled that myth before. There’s no magic number that works for every person. Each person and financial plan are unique.

What’s the good news? We firmly believe a joyful, content retirement is possible, but it must come with a plan.

The second and last point that struck home with me was this: “How will you avoid risks detrimental to your plan?” Great question. Ignoring current and future risks is not wise. They need to be addressed. What are some of those risks?

  • Not maximizing your social security benefit
  • Inflation
  • Long-term care expenses
  • Sequence of returns risk (How the market performs in the early years of your retirement is a critical factor to be addressed.)
  • Longevity risk (outliving your assets)

The purpose of this writing is not to invoke panic and hysteria. Really, it’s not. I do, however, hope the items discussed moves you to taking action. “Any plan is better than no plan!”, said Tom.

And let’s not forget to address this topic from a spiritual standpoint. Are the items addressed above important? Yes. Are they ultimate? Absolutely not. For those who’ve trusted in our loving, heavenly Father, we know that our ultimate care is in His hands. So much so that he cares for us in this way:

Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? 27 And which of you by being anxious can add a single hour to his span of life?[a] 28 And why are you anxious about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin,29 yet I tell you, even Solomon in all his glory was not arrayed like one of these. 30 But if God so clothes the grass of the field, which today is alive and tomorrow is thrown into the oven, will he not much more clothe you, O you of little faith? 31 Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. 33 But seek first the kingdom of God and his righteousness, and all these things will be added to you.

34 “Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble.” – Matthew 6:26-34 (ESV)

Living in the “already but not yet” is not easy. We know the ultimate battle has been won. We also know that on this side of eternity, the struggle and fight is real. Brokenness, hurt, loss and pain do exist. So how are we to respond? We trust. We follow. We love. We ask for help and forgiveness. And, we don’t give up.

Ask us for help. We’d love to walk alongside you through this journey of life. It’s not just about money for us. It’s a much bigger conversation.

Investment Lessons from “The Tortoise and the Hare”

Investment Lessons from “The Tortoise and the Hare”

“A Hare was making fun of the Tortoise one day for being slow.

‘Do you ever get anywhere?’ he asked with a mocking laugh.

‘Yes,’ replied the Tortoise, ‘and I get there sooner than you think. I’ll run you a race and prove it.’”

So the story of “The Hare and the Tortoise” begins…

We’ve all heard it. We’ve all read it (hopefully). What the heck does it have to do with investing? Well, quite a lot, I’d argue.

How did you feel during the time period of October through December last year (2018) as it relates to your investments? Confident? Opportunistic? Concerned? Scared? Fearful?

I would say for most of you, particularly those in or close to the retirement years, that the last three words better describe how you felt. And if so, I don’t blame you. When media networks exclaim that “the sky is falling” and “to take cover,” it’s hard to ignore these statements. We’re human. Our left-side logic part of the brain doesn’t usually rule in these scenarios. The right-side emotional part of the brain often rules; and if acted upon, the effects can be devastating.

If you decided to cash-in at the end of 2018, you would have most likely locked-in investment losses for the year depending on your investment allocations. The Hare certainly would have advised that you cash-in.

Fast forward to February 22, 2019. Below are year-to-date investment returns for a several indices:

S&P 500: +11.3%

Dow Jones Industrial: +11.6%

MSCI ACWI: +10.1%

MSCI EAFE: +8.6%

Not too bad of returns for just 1 ½ months of the year. Of course, we may not finish the year within these return ranges, but the point is made: Had you let fear reign in October through December of last year, you would have missed the upside we’ve received so far this year.

The Tortoise would have capitalized on these investment returns, because “slow and steady wins the race.” The Hare? Perhaps he cashed-in last December, took a nap, and is still waiting for the “right time” to invest again (i.e. buy-in when the price is much higher).

We often say to clients in our office that we sure wish investment returns were these pretty little stairsteps that only went up and never down. Unfortunately, that’s not how long-term investing works. You have to take the good years, and the not so good years. Research continually shows this type of investing to give you the highest probability of achieving your investment goals.

We are sympathetic to our clients when the market volatility occurs. We won’t shame you for feeling the way you do. We will listen. And we will revisit your financial plan that we prepared together and see where we are. This strategy brings us back to the long view. This strategy has proven to be helpful.

The story ends here: “The Tortoise meanwhile kept going slowly but steadily, and, after a time, passed the place where the Hare was sleeping. But the Hare slept on very peacefully; and when at last he did wake up, the Tortoise was near the goal. The Hare now ran his swiftest, but he could not overtake the Tortoise in time.”

As shared by a billionaire investor to my old boss Dave Ramsey: “Every time I read this story to my grandkids, the Tortoise wins the race.”

We are here to run (or walk) the race alongside you.

For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.

Diets and Money – Quite the Pair

Diets and Money – Quite the Pair

You may have noticed (or not) that we took a two-month sabbatical from the Rivertree blog. We take advantage of the holiday season to plan, regroup and recharge for the new year. We are excited about 2019 and hope you are as well.

On a personal note, I am doing something I have never done before – a restricted diet. What exactly is a “restricted” diet? Well, prior to January 1st of this year I couldn’t have told you. But as of this writing, I’m now on day 29 of 30 and have learned quite a few things about food I never knew.

In the simplest terms, a restrictive diet is saying “no” to food groups that could potentially be harmful to your body. After the 30 days, you slowly re-introduce excluded food groups and see how it makes you feel. Sound like the Whole30 elimination diet? Well, it is.

My motivation for this diet was not to lose weight but to see how food was impacting my overall health. To say this diet has been enlightening would be an understatement. All my aches and ailments haven’t been cured, but I have certainly seen the benefits in eating healthier, wholesome foods.

So, what does dieting have to do with money? Well, quite a bit, I’d argue.

When I ran into Books-a-Million on January 1st, guess which books greeted me immediately at the door? You got it – money and dieting. Dave Ramsey, Suze Orman, Tony Robbins, Keto, Paleo, Plant Paradox, and Whole30 all shared a nice, wooden table that you couldn’t miss upon entry. I had settled on Whole30 prior to arriving, but I couldn’t help but thumb through each book on the table.

Then it hit me: What do we often say to our clients and seminar attendees as we discuss budgeting/cash flow planning? Give the system we teach a try. If it doesn’t work, you can always go back to your old system!

I was dreading saying “no” for the first time to many foods I love. But knowing that I could go back to my “old system” in just 30 days gave me what I needed, expecting that I wouldn’t want to go back completely.

Consider this quote about change:

““We change our behavior when the pain of staying the same becomes greater than the pain of changing. Consequences give us the pain that motivates us to change.

― Dr. Henry Cloud & Dr. John Townsend

Does this quote resonate with you? What are consequences of poor money habits or diets that might motivate you to change? Often, it’s a serious health diagnosis, high-balance credit card statement, overspending in retirement, or even bankruptcy.

Don’t let it come to these consequences. Start the process of change now. Dr. Cloud also says that change comes this way: Grace + Truth + Time = Change.

We hope 2019 is a great year of healthy change for you. If you need help or counsel to begin this journey, please don’t hesitate to contact us. We’d love to help.

 

For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.