Your retirement might depend on it.

2022 has been a rough year.  2023 might not be much better.

You cannot control what the market gives. But there is one important decision you have control over.

Can you still trust the professionals who are managing your money?  Ask them these tough questions:

1. 1. What did you do to cushion my gains from a market pullback?
      

      It seemed easy to “fall in love” with the bull market.

      Yet 2022 has been a bit different.  Not only were stocks expensive, but bonds also were overvalued.  Neither did a good job of protecting your nest egg from falling markets.

      Most advisors were scripted to tout “buy and hold” and not “think outside the box”, be it traditional stocks and bonds or being wed to too many mutual funds.

      If your nest egg fell like the stock market (regardless of how many investments you had), then your investments are not diversified.  Having “too many eggs in one basket” can damage your family’s future.

   2. Why am I paying so much tax even though my nest egg has declined?

      Too many mutual funds in a down market might be a double whammy. Mutual funds can decline in price, yet pay out capital gains that make you pay more in taxes. (Remember 2008.)

      It is not about how much money you make; it’s about how much money you keep.

   3.  Does the person managing my money know who I am (and do they really care)?

      Do they know you don’t have forever to wait for your money to bounce back? Do they call to give you ideas before problems arise in your family?

      Or is your advisor simply a “stock jockey” who ignores the big picture of your family’s needs?

      Does your advisor give you ideas on how to lower your taxes and care for yourself and your heirs? Does your advisor care enough about you to be honest about the challenges ahead?

Don’t be afraid.  Open your statements, review them, and ask your advisor (or yourself) the tough questions.  Hold them accountable.  Accountability can help you have a successful retirement.

If they are not giving you answers that satisfy, it might be time to consider a change. Don’t fall in love with certain investments or advisors. Do what is best for your family.

Give us a call if you want some straight answers and ideas to help.

The post When Should You Fire Your Advisor (Or Yourself)? appeared first on AWM.

Many of us don’t like to open financial statements. You don’t want to be disappointed, especially when the market is down. Frankly, I am not sure which is worse: disappointment or failure.

We can’t make our problems go away by simply ignoring our issues.

It’s okay to be disappointed once in a while. When your health is in jeopardy, you don’t sweep it under the rug or bury it in the sand. A majority of the time, things don’t get better on their own. We all know someone who ignored their health problems for years, if not decades. It can be fatal to your friend who is sick and have a huge impact on their entire family.

For some reason burying our heads in the sand can makes us feel better for a time. But the harsh reality is for those who turn their head away from danger and take no precautions.

The last 12 months have been volatile, mostly on the downside. Watching your assets decline is not pleasant. During these times most people are looking for safety, which begs the question: what is safe?

• Cash in the bank – inflation eats away at it, lowering your purchasing power in the process.
• Real Estate – rising rates will eventually force reductions in equity.
• Fixed Income – rising rates are forcing down prices of bonds.
• Equities – are subject to all of the above.
• Annuities – guarantees are not always what you think they are and can cost large penalties.

So, is there such a thing as safety?

There are a few things prudent investors should consider to avoid failure in retirement:

• Quality is golden.
• Cash flow is king.
• Debt is slavery.

When evaluating investments consider a few things: if a company has quality earnings and sustainability, does it have a healthy balance sheet and ability to weather the storm? The more debt a corporation has, the more it’s subject to other risks which will impact earnings. Finally, cash flow provides the ability to have the freedom to invest and grow in the future.

I try to remind folks: it is not about how much you make; it’s about how much you keep.

I encourage you to open your statements, review them, and talk to your advisors. They work for you, and you have the right to ask questions to keep them accountable.

You can bury your head in the sand, or you can open up your statements and give us a call.

We’re here to answer your questions.

The post What Are You Hiding From? appeared first on AWM.

I want to put you to the test. It’s time to take a hard look at your financial life and figure out what habits you need to change.

Remember, sitting on a pile of cash does not equal a successful retirement. Here’s where most people go wrong:

You Have No Idea What You’re Doing.

This can be hard to admit. Put yourself to the test, do you resonate with any of these?

1. You are constantly stressed and don’t know if your money is working for you.
2. You don’t know your numbers, have a budget, or understand your cash flow.
3. You don’t have a plan. Or maybe you did put together a financial plan at one point, but that old binder has become a decoration on your bookshelf. Plans need to be updated as life changes.

You Make Bad Choices.

Bad choices come in all shapes and sizes and can be extremely detrimental to your financial health and future. Here are a few examples:

1. Bad investments. Think of it this way: the turtle always wins. Chasing the next winner seldom works.
2. Life happens and how you react impulsively to your needs and wants can make your budget hurt you in the long run.
3. Reacting Emotionally. This is simply an effect of not having a plan or budget in place to give you peace of mind.

Your Plan Is Not Working for You.

Most people tend to stand in their own way.

As a famous boxer once said, “Everyone has a plan until they get punched in the mouth.” Or to paraphrase a former US president, “Plans are of no particular value, but planning is indispensable.”

It’s not enough to have a plan on paper. You need something that can adapt to unforeseen circumstances. And you need someone who can help you to update the plan and carry it out. That is what a financial advocate can do for you.

You can do better. Hope is not a strategy.

It’s time to master your money and take back control. If you effectively manage your finances to make your money work for you, you can enjoy life today and in the future.

Remember it’s not about how much money you make, it’s about how much of it you actually keep.

The post What If $1,000,000 Is Not Enough? appeared first on AWM.

Fear can push many people into making emotional decisions that might cost your family dearly.

Many people in vain seek safety in bank accounts, insurance annuities, or cash “under the mattress?”

In guarding against one type of risk, they assume other types of risk.

1. Inflation Pressures Your Standard of Living

Most of us know what’s happened with the price of gas.  And food.  Travel.  Real estate.  Taxes….

Prices are going up.  The latest official government numbers in July of 2022 show consumer prices rose over 9% from a year ago, the worst in 41 years.[i]  Food rose over 10% and energy over 40%.

Sitting on “safe” investments still reduces your wealth.  Your money flows out more quickly to maintain your standard of living.

2. Locking in Low Rates of Prospective Return If the World Gets Better

Current rates on 5-year bank CDs are still less than 1%.[ii]  Fixed annuities pay slightly over 4% for a 5-year term (but beware of hidden charges, surrender penalties, and lockups).[iii]   Cash in the wallet or mattress earns you about zero.

Ignoring stocks, real estate, and other investments might cost you opportunity as they have produced stronger returns over longer time periods.

People who work with us benefit from our insights on the right mix of assets to seek to protect and grow their wealth.

3. “Hotel California”

Have you read the fine print on “safe” investments such as annuities and CDs?

It’s easy enough to “check-in” and invest in an annuity.  However, if and when you want to take money out, you might find it’s a lot more difficult (and more costly) than you realized.

Surrender charges, stated values versus what you actually get, and pushy insurance people can complicate your access to your money – and how much you might pay to get it out.

So, what should you do instead?

Find a rational, compassionate advisor who will know your family and work for your best interest.

Don’t get on the emotional roller-coaster, otherwise, you will sell at the bottom and buy at the top.

All that glitters is not gold.  Neither is all that advertises “safety”.

I would be more than happy to guide your family in thinking through these issues logically.

Schedule A Call Today

[i] https://www.bls.gov/news.release/cpi.nr0.htm  accessed on July 18, 2022.
[ii] https://www.bankrate.com/banking/cds/cd-rates/#top-cd-rates-by-term  accessed on July 18, 2022.
[iii] https://www.annuity.org/annuities/rates/  accessed on July 18, 2022.

The post Is Anything Safe? appeared first on AWM.

Finances can have a big impact on your lifestyle. Just ask people who wanted to retire during the 2000 or 2008 corrections. Many of those who had wanted to retire but did not plan beforehand suffered.  Some had to keep working. Others settled for a reduced standard of living.

Today’s challenges include rising taxes, inflation, interest rates, and market volatility.

It is understandable to be nervous about the future. Your bills are going up even if you’re not buying more.  Taxes are higher and more complicated. News of war, violence, and famine adds uncertainty.

1. Take Advantage of Opportunities

Returning to the first question, let me answer with another question.  In these uncertain times, would you benefit from less help – or more?  Today, if you sit in cash, you are already losing money!  Look at your grocery or gas bill. Inflation of even just 10% a year means you can afford to buy 10% less simply by sitting in cash.

2. Be Prepared for All Surprises

The AARP claims that 32% of Americans have a financial plan.[1] That’s less than 1 in 3 families.

I’ve watched families drown in the news cycle, only to end up depressed or in a panic. Others are too easygoing and ignore the bad news around them.

Rather than avoiding it, face your family’s challenges head-on.

3. Protect Your Family by Seeking Help

A fiduciary advisor will help you understand real problems that affect your family. He can help you to prioritize what’s important and address tough questions to prepare for your future.

Advisors offer solutions to help deal with today’s volatility and advise against mistakes that you might regret later on. We help our clients budget, manage and diversify their investments, and leave a legacy for the next generation.

Complex and ever-changing tax and estate laws can feel daunting, but a fiduciary advisor can make these issues manageable for your family.

So, the real question is “Are you ready to work with someone who can help you face the future with confidence?”

If the answer is yes, give us a call.  We would love to help your family!

Contact Us

[1] https://blog.aarp.org/money-talk/americans-financial-plan-is-not-to-plan  accessed on May 16, 2022. 

The post Should I Wait Out Uncertainties in The Market and Start Planning When Things Settle Back Down? appeared first on AWM.

Happy New Year! I hope you made some wonderful memories in 2021.

The beginning of the year is a prime time to focus on understanding your money.

Are you ready to set some new financial resolutions? I encourage all of my clients to design a personalized, comprehensive Financial Plan to guide them towards their goals.

Here are a few tips to get you started:

Every Adult Should Consider Having a Financial Plan.

From my experience, families that take the time to structure a plan tend to:

1. Be more in control of their finances.
2. Have more confidence in their ability to reach goals.
3. Save more for retirement.

You might be surprised how these could impact the success of your retirement.

What Should Your Plan Include?

It’s important that your plan is comprehensive and includes:

1. Short- and Long-Term Savings Goals
2. Tax Planning
3. Investment Strategies
4. Insurance Planning (health, life, and long-term care)

Remember, your goals don’t have to be strictly business. Maybe you want to save up for a new TV or a nice family vacation. Either way, these goals should be reflected in your plan.

What Does That Look Like for Various Age Groups?

Young adults in their 20s-30s will probably focus on paying off student debt, building an emergency fund, and possibly saving up for a down payment.

Most 40-50-year-olds prioritize paying for their kids’ college, eliminating debt, and ramping up their retirement savings.

The pre-retirement crowd (usually 60+), tends to focus on maxing retirement contributions, paying off their mortgage, arranging for long-term care insurance, and preparing for a successful retirement.

How to Get Started:

Meet with a Fiduciary Financial Advisor who specializes in planning and understands tax implications. It’s important to find an advisor who will watch out for your best interest.

Together, you can design a plan that entails your personal dreams and goals and keeps you accountable.

Start working on your plan now. The sooner you start, the sooner you’ll see your plan come to fruition.

The post What Should I Include in My New Year’s Resolution? appeared first on AWM.

This makes August a stellar time to work on your finances. My advice? Don’t put it off until December.

Here are a few year-end planning items to check off your list:

1. Get Ready for Upcoming Education Costs

For students: this is a great time to start looking at college scholarships. Find 3 or 4 you would like to win and start working to make yourself the perfect candidate and apply early.

For the parents: take a look at some college calculators to get a sense of how much your expected family contribution (EFC) will be and the best tax-efficient way to pay for it.

Even if college is a few years out, planning now can help keep costs down later. Make sure everyone is on the same page and only look at schools that you can afford.

2. Do You Need to Rebalance Your Investments?

Consider the market. Is your current asset allocation up-to-date and working for you? This is a good time to review your portfolio with your financial planner.

Also, consider the tax consequences of reallocating your investments. This might be a good time for a tax planning session.

3. Revisit Your Budget and Goals

Do you have dreams of buying a home, paying for college expenses, or ramping up your retirement savings?

Take a look at your budget. How are you doing? It might be time to trim down some costs by eating out less and ditching subscriptions you no longer use.

Write down your goals and how you plan to reach them. This is the first step in making those dreams a reality.

4. (Bonus!) Plan for Your Next Tax Bill

August is usually a slow month for accountants and other tax experts. This means it’s a good time for tax planning.

Don’t wait until December. Estimate your upcoming take bill, and start preparing for it.

If you don’t already have a team of professionals ready to help you through this planning season, consider talking to a certified financial planner who offers hourly consulting—and keep the conversation limited to tax strategies.

A 2-hour planning session could help you keep more of your hard-earned money.

The post Don’t Wait to Start Your Year-End Financial Planning appeared first on AWM.

I mean, if we all knew the secret to investing, we’d be richer than Warren Buffet, am I right?

Jokes aside, the “secret” is often disappointing.

True investing success boils down to hard work and patience, or what I like to call discipline.

What do I mean? Let’s take a look at three types of discipline I work to develop with my clients:

1. The Discipline of Planning

Before you even think about investing, you have to plan. Do your homework.

What do you hope to accomplish? What do you dream about? What is most likely to happen? How long until you need this money? Are you prepared to weather out good and bad years?

Without a plan, it’s near impossible to reach your goals. Developing discipline is thinking about the future.

2. The Discipline of Commitment

You have to ask yourself, “Am I in this for the long haul?”

It’s easy to be swayed by our friends and family. Are you ready to commit to your plan even when it’s difficult?

I like to think of farmers in this situation. They keep sowing and cultivating their dirt to prepare for the eventual harvest of their hard work.

They don’t listen to their neighbors who are disgruntled and walk away from their work. Instead, wise farmers stick to their crops and earn yields even when others gave up long ago.

Thinking strategically can help curb your emotions.

3. The Discipline of Adapting

How will you hold up to the pressures that life throws your way?

Successful investors do not react to temporary situations on the flip of a coin. Rather, they periodically evaluate their strategy, seek out prudent consultation, and make adjustments when circumstances have truly changed.

These tend to be big changes like retirement, age, health, inheritance, marriage/family, etc.

Discipline means adapting to these changes.

There you have it. The secret is out. To find success with investing, discipline has to be your priority.

I strongly encourage each of you to seek out a Fiduciary Advisor. They can help keep you on track and develop discipline in your finances.

Let’s Chat

The post What’s the Secret to Investing? appeared first on AWM.

Talks of downsizing your home can be a difficult and dreaded conversation, but it is necessary. I work with people all the time who delayed this conversation.  Now their house is too big to manage, they can’t keep up with maintenance, and some cannot afford it.

I understand it’s difficult to pull the trigger on such a big decision. Before making any hasty moves, let’s talk through some signs that it might be time to downsize.

Cost of Living

I think we can all agree that the elephant in the room is cost.

Most professionals agree that up to 30% of your monthly income should be allocated to living expenses. This might not be an issue while you’re still working, but that percentage can get too high for retirees.

This can lead to other problems, like having little to no leftover cash for savings or fun.

When the cost of living gets too high, many retirees find themselves needing to convert their equity into cash just to survive.

Don’t wait until it’s too late. If the cost of living in your home is getting too high, it might be time to downsize.

Maintenance

This one is especially difficult.

As we age, our bodies don’t work like they used to, which makes maintaining our homes that much harder.

If you are falling behind on upkeep for health reasons, or they’re just too expensive, it might be time to talk about downsizing.

Don’t wait too long. Your home will only continue to deteriorate and you could lose out on some hard-earned equity.

Lifestyle Changes

Back in the day when your kids built blanket forts in the living room, the bathrooms always had a waiting line, and your teens fought over who controlled the TV remote, there were times that your spacious house felt too small to contain that much chaos.

Now that you’re only using a handful of rooms in your house (master bed & bath, kitchen, living room), it doesn’t make sense to pay for heating, cooling, and lighting for rooms you don’t even use.

You might also find that you avoid parts of your house altogether due to lack of accessibility.

Choosing to downsize and when is difficult and tricky. I suggest working with a Fiduciary Financial Advisory to help you play your cards right.

It’s not about how much you earn, it’s all about how much you keep to enjoy your retirement.

The post When Is It Time to Downsize? appeared first on AWM.

Sound familiar?

Just last week we had another exhausting encounter with an annuity company.

Our client asked us to help him take money out of his annuity contract and transfer it to his investment account.

Should be easy, right?

Nope.  The annuity company messed up by giving out the wrong information and forms.  They also made our client jump through more hoops. To top it off, they even tried to sell him an additional annuity!

My client was so frustrated; he was willing to pay the penalties to get all his money out.

Our client asked, “Why does it have to be so complicated? There has to be an easier way. How can someone do this on their own?”

So, who is going to help you?

Not the person who sold you the annuity in the first place…

Unfortunately, most annuity salesmen have great incentives to keep your money locked up or even sell you another contract. This protects the insurance company, not you.

Instead, consider a Fiduciary Advisor who can advocate for your best interest.

What will that process look like?

At Ambassador Wealth Management, we break it down into three steps.

1. First, we get to know you, your objectives, and your concerns.
2. Then, we decipher the annuity contact to determine the best course of action for your family.

If it’s best for you to leave your money in, that’s what we’ll recommend. If it’s best for you to take money out, we collaborate on a plan to get it out and examine other investment options.

3. Finally, together we confront the annuity company. We know their lingo and the right questions to ask. We are with you, every step of the way, to help you regain control of your money.

Are you going to try to sell me some sort of contract?

Not us. We don’t sell annuities or illiquid products. We want our clients to be in control of their money.

Ambassador Wealth Management is an independent, fiduciary firm. Our goal is to remove conflicts of interest to better serve each of our clients.

If you feel frustrated and lost with your annuity, we would love to help you.

The post Are you fed up with your annuity? appeared first on AWM.