I hope you had a nice February. If you live in Mississippi, we had our usual volatile whether. You may need snow gear one day and a swimsuit the next (slight exaggeration but you get the point).
Personally, this February is certainly one to remember as I had hip surgery. Fast forward to today, I’m doing well thankfully. I still have a journey of recovery ahead of me. But, to say it has been a joy ride would not be honest of me.
I had a close friend stop by recently to check on me. He was gracious to listen to me share how hard things have been. We all need folks to just listen sometimes, right? And sometimes, we need a friend to challenge us.
After hearing me share about the things I couldn’t do right now, he asked, “What are things you can do?” I paused. That had certainly not been my focus. I reflected on his question that night and the next morning. I started thinking about not just things I can still do, but what are new things I can do? I mentally came up with a long list and took action on some immediately. My spirits were lifted and some contentment returned.
I’m not writing a message about the “power of positive thinking,” but I am challenging myself, and you, to reflect on this question: “What are things you can do?” More specifically, “What are things you can do to make progress financially?”
With financial planning, there are many aspects that we can’t control and are forced to use some assumptions: inflation, rates of return, life longevity, etc. However, there are many aspects of financial planning that we can control.
What are steps that you can take TODAY to-
- Begin a debt elimination plan?
- Implement a budget?
- Call the lawyer to get your will completed?
- Increase your life insurance coverage?
- Increase your charitable giving?
Don’t be overwhelmed by this list. Prioritize. Need help taking steps and prioritizing? That’s exactly what we do. Give us a call. We’d love to help.
Spring is just a few weeks away which I always welcome (well, minus the pollen). Spring is a time of new life, and it can be a time of new hope and purpose.
Take a few new steps and see what happens.
I hope your January was a good start to 2018. I read an article recently referring to the third Monday of January as “Blue Monday: The Most Miserable (Planning) Day of the Year.” That certainly got my attention as I’m a planner by trade (and by personality my wife and others would say).
Why is that Monday so bad? Well it does make sense to me that the third week is quite hard for any weekly goals set. Getting motivated for two weeks isn’t too hard. But week #3? That’s hard. Maybe just acknowledging this will help some of you give yourselves a break, get back on the saddle and make the progress you desired for this year. Now to our topic…
The financial services industry has gone through some significant changes the past few years, particularly as it relates to advisor products, services and compensation. Many would say the industry began with stock brokers in the 1970’s. If you wanted to buy stock of a particular company, you would call your stock broker and pay a commission. Since then, insert the discount brokers: Scottrade, e-Trade, etc. You can do your own research, buy the stock(s) you want, and pay far less in commissions.
Then mutual funds became popular… particularly in the 1990’s. To have access to certain mutual fund families, you had to go through a licensed financial advisor who got paid a commission. Later on, came the “online mutual fund supermarket” as one advisor calls it. You no longer had to go through an advisor to access top-notch mutual funds.
Fast forward to today, our industry is working through significant legislation initiated by the Department of Labor. In short, advisors who work with clients’ retirement accounts are legally now fiduciaries with the exception of some accounts set up prior to this law. What does that mean? Simply put, advisors must put the clients’ interests above their own. I know what many readers may be thinking: “Wasn’t that requirement already the law?” Well, the short answer is “no” depending upon the setup for the advisor.
So what about us? “Us” being the Rivertree team. Know that we have always operated under the mandate to put our clients’ interest above our own. One way we have done this is by being an independent company. What does that mean? No quotas. We never want to have a conflict of interest when making recommendations simply to meet a quota.
What’s another way? All current Rivertree advisors have accountability to a certification board to operate in a fidiciuary capacity to clients. We did not need a law to make us do this. We wanted to have this additional accountability and have it through Fi360® (Brent and Jonathan) and the Certified Financial Planner® Board (Scott).
In addition, advisor compensation has been under additional scrutiny…and it needed to be. Clients need to know how advisors are paid, whether it’s by fee, commission or both. Which method is better? Well it depends. Our team sees the benefit of having both options available as one size doesn’t necessarily fit all.
For example, larger investment accounts can benefit from a fee-based management that involves multiple money managers using different strategies and investments. Additional oversight and accountability can also add value. However, we believe some accounts benefit from commission-based strategies where fees are less over the long run. The clients’ goals can be better accomplished utilizing this method.
Once we meet with prospective clients, listen to their goals, and gather their information, we fully disclose the compensation structure we believe makes the most sense for them rather than giving them a long list of “potential” fees and commissions. Prospective clients can then ask additional questions and make sure they have a full understanding.
In summary, our industry is shifting to a model of less-conflicted compensation. We have been ready for this change.
As always, please let us know if we can be of service. It would be our pleasure.
It’s no secret that Mississippi generally ranks first in the bad categories and last in the good categories. But, in this article on MarketWatch, we finally show up first in a positive category! (please pardon the artwork in the article…it’s not ours).
I love my State. I was born and raised here. And after 4 years in the happening city of Nashville, we returned to Mississippi. Why leave Nashville, many ask? Simply put, it wasn’t home for us. After being back for over 10 years now, we don’t see ourselves leaving.
So is $1 million enough for retirement? The article suggests this amount of money will get the average Mississippian retiree 25 years and 6 months of living, almost double that of Hawaii. So forget the islands, folks, come to Mississippi for good livin’!
So reader, do you have a number? Is it $200k, $500k, $1 million, $3 million, or more? Some investment company commercials sell us (not “tell us”) that having a number is critical to your retirement success. I don’t agree. I’d argue that living on a budget and not owing money is more critical to accomplishing your goals than a specific number.
We see it week in and week out in the office with our clients: Those who don’t owe money and live within their means experience far more freedom and peace than those who are working towards a number. Certainly, there’s nothing wrong with having savings goals. Just don’t forget the other “nuts and bolts” of financial planning which are critical to success.
Speaking of “success,” I’m reminded of Tim Keller’s book Counterfeit Gods. Keller wrote this book in the midst of the Great Recession when many of our counterfeit gods were taken away, including money, power, and success. Consider the opening of this book (warning: it’s graphic):
“After the global economic crisis began in mid-2008, there followed a tragic string of suicides of formerly wealthy and well-connected individuals. The acting chief financial officer of Freddie Mac…hanged himself in his basement. The CEO of Sheldon Good, a leading U.S. real estate auction firm, shot himself in the head behind the wheel of his red Jaguar. A French money manager who invested the wealth of many of Europe’s royal and leading families, and who had lost $1.4 billion of his clients’ money in Bernard Madoff’s Ponzi scheme, slit his wrists and died in his Madison Avenue office.” And the list goes on.
How can we come to this point when life is no longer worth living? Despair. Consider this:
“There is a difference in sorrow and despair. Sorrow is pain for which there are sources of consolation. Sorrow comes from losing one good thing among others, so that, if you experience a career reversal, you can find comfort in your family to get you through it. Despair, however, is inconsolable, because it comes from losing an ultimate thing. When you lose the ultimate source of your meaning or hope, there are no alternative sources to turn to. It breaks your spirit.
What is the cause of this ‘strange melancholy’ that permeates our society even during boom times of frenetic activity, and which turns to outright despair when prosperity diminishes? [Alexis] de Tocqueville says it comes from taking some ‘incomplete joy of this world’ and building your entire life on it. That is the definition of idolatry.”
Whew…this can be hard to read. But how can these writings be helpful? Keller gives some tools at the end of the book to help identify where we may have idols:
- Imagination: “The true god of your heart is what your thoughts effortlessly go to when there is nothing else demanding your attention. What do you enjoy daydreaming about? What occupies your mind when you have nothing else to think about? One or two daydreams are no indication of idolatry. Ask rather, what do you habitually think about to get joy and comfort in the privacy of your heart?
- Money: Jesus said, “Where your treasure is, there is your heart also. (Matthew 6:21). “Your money flows most effortlessly toward your heart’s greatest love…Our patterns of spending reveal our idols.”
- For Christians: “What is your real, daily functional salvation? What are you really living for, what is your real – not your professed – god? A good way to discern this is how your respond to unanswered prayers and frustrated hopes.”
- Emotions: “Look at your most uncontrollable emotions. Just as the fisherman looking for fish knows to go where the water is roiling, look for your idols at the bottom of your most painful emotions, especially those what never seem to lift and that drive you to do things you know are wrong. If you are angry, ask, ‘Is there something here too important to me, something I must have at all costs?’ Do the same thing with strong fear or despair and guilt. Ask yourself, ‘Am I so scared, because something in my life is being threatened that I think is a necessity when it is not? When you ask questions like that, when you ‘pull your emotions up by the roots,’ as it were, you will often find your idols clinging to them.
Keller goes on to give tools for dealing with idols. I highly recommend this book for everyone, including nonbelievers. If you’re reading this and struggle with a belief in the one true God, I’d recommend The Reason for God by Keller.
In closing, we all struggle with putting our hope and faith in things that don’t last (if we’re honest). Don’t let your ultimate hope be in accumulating a certain “number,” because once achieved, your happiness and joy will be short-lived.
Growing up is not as easy as it once seemed. As a kid, I always wanted to be doing the things that older kids were doing – driving, going out, “unlimited” freedom (so it seemed). I quickly accounted for the privileges granted for grown-ups. But I was ignorant to the additional responsibilities and realities.
As a child, we primarily see the good in life. We get toys from others. We get fed by others and often get our way. Now when we don’t, we certainly see the bad in life. In fact, everything in life can seem difficult in those moments. But for the majority of childhood (depending on your childhood), we are sheltered from many of the harsh realities of life.
For the past year and a half, I have been confronted with this idea of “Living in the Both” – the both being the good and the bad. Recent life experiences have challenged me. I’ve lost a very close friend to cancer, watched family members bury their 10-month-old, and heard a father deliver a eulogy for his 14-month-old daughter. These experiences have forced me to reckon with grief in a deeper sense than ever before.
My tendency would be to ignore the depth of the grief. “Man up, Scott. You can handle it.” As I’ve hit the mid-life crisis age, I’ve faced the reality of why this age is so dangerous, particularly for men. Around this age, I do think we hit a crossroads of life disappointments. Could be marriage, parenting, work – fill in the blank. Simply put: expectations were not met, whatever those expectations were.
The Good and the Bad
In Dr. Henry Cloud’s book “Changes That Heal,” he speaks to this reality:
“The world around us is good and bad. The people around us are good and bad. We are good and bad.
Our natural tendency is to try and resolve the problem of good and evil by keeping the two separated. We want, by nature, to experience the good me, the good other, and the good world as ‘all good.’ To do this, we see the bad me, the bad other, and the bad world as ‘all bad.’ This creates a split in our experience of ourselves, others, and the world around us – a division that is not based on reality and cannot stand the test of time and real life.
In the world around us, we require perfection, and we devalue any church, group, or job that fails our expectations. Either we withdraw from church, group, or job, only to move to another imperfect and disappointing situation, or we idealize situations in a way that blinds us to their bad points. In short, if we do not have the ability to tolerate and deal with the simultaneous existence of good and bad, we cannot successfully deal with and live in this world.
The Comparison Game
So what does it look like to respond in a healthy way to this reality? For me, it started with honesty – honestly talking about the grief to others. I’m quick to minimize my grief by comparing it to others in worse conditions. Their situation may be worse, but comparing my situation to others is not a healthy response.
As I talked to other men about the grief, one friend who is a therapist recommended that I write a letter to the baby girl, telling her what I saw and experienced. I haven’t yet. Why not? I could say that I’ve been busy, or I thought this was a silly idea. But if I’m honest, I just don’t know if I can go there yet.
At a funeral, it’s hard for me not to imagine others in the casket, including myself and my family. What would that mean? How would I respond? What would I start doing differently? As hard as these funerals have been, there is also great good. The good is that we pause to reflect. We are challenged to slow down and check our priorities. Where are we spending our time, talents and treasures? In eternal things, or things that will perish?
The Ongoing Journey
This journey will continue. We will continue to experience both grief and joy. “But we do not want you to be uninformed, brothers, about those who are asleep, that you may not grieve as others do who have no hope. For since we believe that Jesus died and rose again, even so, through Jesus, God will bring with him those who have fallen asleep.” (1 Thessalonians 4:13-14)
By God’s grace, I will remain hopeful in the midst of trials and sufferings, because He knows our grief. He knows what it’s like to lose a child. He knows what it’s like to suffer. We do not serve a god who rules without purpose. We serve a sovereign God who has walked before us and knows our insides and outs.
So how does all of this relate to finances? Well, I’m not quite sure…other than I often see the “good and bad” with money. I see the good that comes when someone gives generously, knowing that they can’t take it with them. I also see the bad in money, when it becomes a person’s main goal to accumulate more without thought that it could all be taken away.
The more we grow into living in the good and bad, the sooner we can sing with confidence, “It is well with my soul.”
We would like to introduce Phillip Holmes as the newest member of the Rivertree team. Phillip officially joined us as an Associate Advisor and Creative Director in August 2016. He will be handling all marketing and communication efforts as well as assisting those in need of debt and cash flow planning. As a recently licensed insurance agent, Phillip will also assist clients in getting the coverage that they need.