Financial Planning – Outside the Lines

Financial Planning – Outside the Lines

Are you tired of taking sides? Tired of having to choose one over another? Simply tired of making so many decisions every day? Well, I’m not surprised given that some studies estimate the average person makes 35,000 decisions a day. I feel exhausted just thinking about this!

So, what’s a person to do? Well, a starting place is simply to acknowledge the exhaustion that comes from having to choose so many times on a daily basis (enter “decision fatigue”). And if you are symptomatic of the condition “paralysis of analysis,” it’s just that much harder.

What about financial planning? Think you have some choices to make? Well, I think we’d agree that you do. So, what does financial planning “outside the lines” look like? We have some thoughts.

Firstly, Giving Credit Where It’s Due

I read Scott Sauls’ book Jesus Outside the Lines about 2 years ago. The timing of this book was perfect for me. Scott’s writings resonated with me, particularly as it related to politics, money, and hope (or realism). He approached these quite sensitive topics with humility and grace. I greatly appreciated this. So, thank you, Scott, for your book and helping me with the title of this post.

Investments

Let’s name a few choices you have: stocks, bonds, mutual funds, ETFs, annuities, passive, active, momentum, contrarian, etc. Shall I go on? I’ll spare you.

So, what’s an investor to do? And which of these options are best? Ultimately, you have to make a choice. Or, you choose to hire someone to help you.

Insurance

Buy term and invest the rest? Buy term and spend the rest? Or buy permanent, whole life insurance? Perhaps variable universal life? Follow the duck to Aflac or rely on your traditional health insurance? Work with an 800# rep or have a local agent? Which is best? (Answer coming…)

Estate Planning

Save money and do a cookie-cutter last will and testament? Or pay a local attorney to help? Retitle all assets possible into a revocable living trust, or go through the probate process? Name specific beneficiaries on all accounts, or let your will do the work?

So many decisions here. What’s a person to do?

Financial Planning (Outside the Lines)

It’s this: Developing a financial plan specific to you and your needs, goals and desires. It’s not a robo-advisor or robo-plan. It’s not a one-stop shop online or a local company advertising that they have all the right answers and solutions. It’s not an insurance company promising (almost) to save you 15% on premiums.

I remember early in my career thinking I had the perfect plan and most all of the answers to clients’ concerns and questions. My heart’s motive was to help. However, I learned with time and experience that I needed to step out of my personal story and enter into their stories.

The client may communicate their desire to have life insurance that is guaranteed to always be there. They may communicate their desire to have retirement income that they can never outlive, regardless of market conditions. The client may share their desire to work with a more traditional “brick and mortar” bank rather than an online bank paying a higher interest.

It starts with you, not us. Our personal plan might (or will) look different than yours. We are happy to share what we are personally doing in our financial plan. But again, we expect our plans to look a little different.

Our job and passion is to walk alongside you in your life story. We are morally and legally obligated to put your interests above our own. That’s how it should be.

We are deeply thankful for those who have asked us to come alongside them. It would be a privilege to have a conversation with you about how that might look in your life journey. And be assured that your financial plan will be designed outside the lines.

*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.

A Counterintuitive Freedom

A Counterintuitive Freedom

I hope you are having a good summer. I always enjoy the 4th of July holiday. I anticipate good food, good fellowship, and of course, some fireworks!

Before I continue, I’d like to pause and thank those who have served and fought for our country’s freedom. From the bottom of our hearts, thank you! Thank you to those who are serving now and have served in the past. I am certainly guilty of taking this freedom for granted many times, which is why I’m thankful for holidays and special times as these, when we honor those who have served.

The topic of freedom was discussed in our last Rivertree team meeting. Specifically, we discussed what freedom looked like in regards to finances. We could have gone many directions here: budgeting, freedom from debt, retirement nest egg, etc. But our discussion quickly went into a different direction.

Children

Many of us have children, grandchildren, or children that we may not be related to but consider our own. What a blessing children can be! And oh, what a challenge they can be…

Children need us. It feels good to be needed. And sometimes, it feels good to just be alone. Both are good and healthy.

But something happens to all children. It’s unavoidable. They grow up! Yes, I’m stating the obvious here, but humor me and keep reading.

Children grow physically. They grow emotionally. Hopefully for many of us, they grow spiritually.

But here’s my question: Are they growing into adults? I’m not talking about age of adulthood per your State’s law (FYI it’s age 21 for Mississippi, not 18).

Adults

What am I talking about in regards to adults? A responsible, contributor to society and at the core, a desire to be an adult.

But what happens? It doesn’t always go this way. Children rebel. They leave home before they’re ready. They denounce the wisdom they’ve learned through their early years. They hurt the ones who love them the most.

It’s devastating. What went wrong? Is it our fault as parents? I’d argue for most of us the answer is, “No.” It’s not your fault.

The Counterintuitive Freedom

Thankfully, we find the story of the prodigal son in Luke 15 of the Bible. The younger son requested an early inheritance (which is seldom a blessing to a child I might add). The son lived recklessly, wasted his money, and found himself feeding pigs (and even desiring the pigs’ food!).

At this point, we learn that the son “came to his senses.” He finally reached his point of true brokenness and need.

So, where’s the counterintuitive freedom I keep referencing? It’s this – Allowing our children to reach the place of brokenness rather than rescuing them. We “rescue” by giving them money. We rescue by bailing them out (including from jail). We rescue by not allowing them to truly experience the natural consequences of poor decisions and behavior.

“But what about mercy and grace, Scott?” I hear ya. I treasure mercy and grace. I’ve received it time and time again, from humans and The Lord Almighty.

When they’re children, we often do extend mercy and grace. We may discipline using other consequences so they don’t have to experience the natural consequence (and tragedy) of crossing the road before looking or playing with (or in) the fire.

But our topic today is adults, not children. For adults, it’s time that they experience natural consequences. It’s what the father did for his prodigal son. He allowed him to squander his wealth and live with pigs. Don’t you think this father had the ability to find his son and go rescue him? We don’t find this answer explicit in Scripture, but I think we can infer that the father did have this ability. But in his wisdom, he waited.

As a father, I sure wish Scripture gave us more information about what the father did and what he felt while he waited. How long did it take? Was he angry with his son, and even God? Did he grieve? Did he weep? Did he lose faith? We just don’t know.

Know this: There is counterintuitive freedom in allowing our adult children to experience the natural consequences of their decisions and behaviors, even if we have the means and abilities to “help.”

Love your adult children. Pray for them. Share the burden with God, and others. Give them the space to come to their senses.

Don’t lose hope. And when you feel like you have, God is big enough to listen and meet you where you are.

(Recommendation: I’m 70 pages into the book “Reaching Your Prodigal” by Phil Waldrep. Although I have more to read, I feel confident in saying that the author gets it. It’s answering the questions: What did I do wrong, and what can I do now?)

*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.

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.

Mississippi Is First

Mississippi Is First

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.

Accepting the Good and the Bad Is a Part of Growing

Accepting the Good and the Bad Is a Part of Growing

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.

Life’s Experiences

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.”

Every Penny Is from Heaven

Every Penny Is from Heaven

What do financial advisors, prosperity preachers, and Jesus all have in common?

As a financial advisor, I’m constantly providing counsel to all types of people about how to manage their money well. Prosperity preachers talk about money as if it were an investment seed: you give to God, and he must give it back to you and more. As for Jesus, some scholars say that a third of Jesus’s parables revolve around money and possessions — and that the New Testament accounts of Jesus’s teachings mention more about money and possessions than faith and prayer combined.

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