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.

Where do we fit in?

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 or 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.

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 am 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 will be honest (otherwise, my wife will call me out). Generally I don’t handle it well. I complain or stonewall. I may even 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.

*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.” Tom Hegna, an internationally renowned expert on retirement planning, was the presenter.

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.

Retirement Success

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 can be 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.

Avoiding Risks

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 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. The ultimate battle has already been won, but 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.

*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.