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.

That’s a fair question, but also a complicated one.

Many of you might be able to relate to this situation: your kids come to you with a question.  They are not really seeking you to answer with your wisdom.  Rather, the way they ask tips you off that they actually are seeking your affirmation or approval for their decision or behavior (even if they know better).

I decided to probe a little more deeply.  I wanted to gain a better insight as to what this family was thinking.

It became apparent that they did not seek my professional opinion.  Instead, they were seeking my approval –  to sympathize with the decisions they had already made long ago.

Even all of my best advice would never change their mind. They had already made their plans and wanted to go places. They worked hard and saved a long time for this moment.

So, what’s the answer?

The answer is different for every family.

You know the saying, in real estate it’s all about location.  In retirement, it’s all about budget.

Here are just a few of the many factors to consider:

• When should you take Social Security?
• How much savings could you afford to spend down?
• What if you need assisted living?
• What will your taxes look like?

After we talked and wrote out real numbers, we decided a hybrid approach would work best. My client needed a plan to generate income while chipping away at their debt.

One of the greatest investments a family can make is designing a measurable and achievable Financial Plan.

Retirement will change your life.

The truth is that retirement is one of the biggest decisions you will ever make. Having a plan for this stage of your life is the key to finding success.

I want to see as many people as possible avoid harmful mistakes and make the best possible decisions for their family.

I can’t say it enough. Find a true fiduciary financial planner to work with. You will most likely need a hybrid approach that is tailored to your family’s needs and goals.

My new client’s answer was complicated. For them, a little bit of both options ended up being best.

So, what’s your answer?

Let’s find out!

The post Which is Better: Savings or No Debt? appeared first on AWM.

Unfortunately, one in three families will not have enough money to maintain their lifestyle throughout retirement.

Through these conversations, I’ve been able to narrow down three major pitfalls that many savers make before retirement.

1. They have no plan.

Life gets busy. It’s so easy to put off planning for retirement. Tomorrow is a convenient excuse.

There’s a shocking statistic from AARP: only 23% of Americans have some sort of retirement plan.

Many people spend upwards of 30+ years in retirement. Having a strategic plan is the only way to successfully enjoy retirement with confidence.

2. They didn’t save enough.

This relates closely to #1. Without a plan, how can you know if you’ve saved enough?

There are so many factors that need to be considered. Things like inflation, health care expenses, taxes, the unexpected (like COVID-19), and much more.

If you’re not sure how much you need to enjoy a successful retirement, I strongly encourage you to seek out expert advice and start planning today. Retirement will come faster than you think.

3. They mismanaged their investments.

I see this every single day. And it boils down to three things:

People often invest their savings poorly. Whether it’s holding too much of one position or investing in unreliable holdings, I see people putting their retirement nest egg at risk and even losing a large portion of their assets.

Secondly, budgeting. I’ve known families that make several hundred thousand dollars in annual income, but have nothing in savings and too much in debt. It’s so important to follow a measurable and achievable budget.

Lastly, I think some people are too quick to gift their money to the next generation. Not only might you need those resources for your living expenses, but think about the lost potential returns and future income you might be giving away prematurely.

So, what does your future look like?  Do you know?

It is time to invest in yourself and reap the rewards of your labor.

Keep more of your income and pay less in taxes.

Let’s Talk

The post Why Do So Many People Fail in Retirement? appeared first on AWM.

When it comes to things where quality and depth of service do not matter, one might focus exclusively on price.  For example, consider health care.  If all you need is a bandage for a minor cut, then you might simply want to buy the cheapest generic bandages at your local supermarket.  (Or if you are a millennial, order it online and let a drone drop a box of 500 at your front door.)

However, what if your loved one needs critical surgery on his or her heart or knee?  Would you simply shop for the cheapest operation, not really knowing whether the surgeon does a good job or not?  What if the outcome of that surgery could impact the quality of your loved one’s life for years to come, maybe even a lifetime?

That is when you want to focus on value, not merely price.  You do not just want to spend the least amount of money for a product anyone can provide at satisfactory quality.  You want to find the best Doctor (or service) that will give your loved ones the highest chance for a successful outcome that will last for years to come.

People often confuse price with value. These are two different issues.

Or suppose you want to take your loved one out to eat?  Let us say you want to take them for tasty meat and salad.  You have a choice of two restaurants: Restaurant A and Restaurant B.  Restaurant A offers you such a meal for under $10 each.  Restaurant B offers the same meal for $100.

The buyer looking solely at price would opt for the cheapest deal at Restaurant A.  No questions asked.

However, the buyer of Restaurant A could have made a very bad deal.

Restaurant A is a fast-food burger joint.  It fulfills the basic requirements that the buyer sought in the first place.  Meat (hamburger), salad (lettuce in a bun), vegetable (French fries), and a drink (your favorite soft drink) were included in the package.  The buyer gives up quality of food to gain time. Whether you consider going through a drive-thru or eating in an open, noisy venue stuffed with kids as a romantic get together is open for debate.

Now consider Restaurant B, a high-end steak restaurant.  Several choices of the finest cuts of prime rib, salad bar, sautéed vegetables, and a mix of drinks make for a tasty menu.  A private, intimate dining atmosphere perhaps with music and a dedicated waitperson create an inviting ambiance. In this setting, the buyer is paying for a relaxing environment and understands the value of this high-end meal.

The buyer looking to treat his or her companion will gravitate toward Restaurant B.  B offers value.  The price might be higher, but the quality and level of service makes it a better value for what the buyer wants to do: to please his or her loved one.

Family wealth management is a value proposition, not a price transaction. 

Lots of confusion exists in the press about whether financial planning and family wealth management is merely a pricing issue or a value proposition.  Many writers (and cookie-cutter robo-operations) would have you believe that managing family wealth is simply a “price” issue.  They claim that the lowest price wins because all the buyer needs is a cheap portfolio that looks like everyone else’s and needs no specialized service.

At Ambassador Wealth Management, we cater to customers and their families who seek custom advice. They deserve more than being thrown into a “one size fits all” bucket of investments and services.  Our clients benefit from aligning with our firm that thinks globally but acts locally. They are people and families whose lives matter to us.

We work best with clients who can benefit from a long-term relationship that includes and extends beyond investments to their families.  You benefit by us helping keep you on track and step aside from emotional decisions that cost many of your neighbors dearly.

In other words, the press and their robo-friends would have us all eat fast food simply because of price.

But if you want to eat steak in the context of a comprehensive health and nutrition program that might empower you to live with purpose, seek value.

Schedule appointment

The post Value Vs. Price: The Difference Between Celebrating Your Anniversary at McDonald’s Vs. Morton’s appeared first on AWM.

1. Sloppiness

   Screen junkies live by “analysis by paralysis”. They might think they know it all, but they cannot make a strategic decision for a holistic plan with their current and future wealth.  They ignore the idea of strategic planning and live by emotion instead.

   Some of them worry more about basis points than big dollars.  They have a warped concept of how the different buckets of their wealth are supposed to work for them.  What they should put in the bank, they end up putting in higher risk investments (even real estate).  Where they might invest more aggressively when they will not touch it for years, they leave in cash that earns next to nothing.

   Some of them are vulnerable to “get rich quick” schemes in a desperate effort to catch up when they did not plan or save.  Someone often “gets rich quick”, only it is not them.

   We are here to help people who realize “hope” and absence of planning is not a strategy.

2. “Managing” by emotion

   When markets are toppy, they get excessively excited.  When markets are choppy, they sell at the bottom.  Why such illogical behavior?

   Without a solid discipline, we are all capable of making foolish mistakes.  The reality is that most American investors invest emotionally.  And they pay dearly for such emotion.

   According to research firm Dalbar[source], the average investor in America with $100,000 in 1996 lost over $150,000 in potential gains over the last 20 years just by relying on emotions to jump in and out of the market.  (Click here to find out why.)

   Let us help you to keep your emotions in check regardless of what the market is doing.

3. Be an investment lemming. 

   Others trade, not invest, based on the latest tip from CNBC or their neighbor.  All of their office buddies bought into the hottest illiquid alternative, so they should do the same, so they think.  When the Uber driver is giving the latest stock tip, they go “all in” on the penny stocks.  They also make sure to listen to all their friends who are following the herd and tell the others who have not heard.  Cocktail parties, not sound discipline, drive their portfolio!

Who do you want to be: a screen gazer or the wise farmer? Let us help your family to succeed with discipline, not fail with emotional screen gazing.

Schedule appointment

The post Stop Emotion from Shortchanging Your Investments appeared first on AWM.

Unfortunately, most of your neighbors do not understand this critical concept. Industry website creditcards.com reports that 3 in 4 parents still subsidize the spending of their adult children.[1]

You should not take comfort from repeating the mistakes of the crowd.

When you give your adult children free handouts, you might actually be harming them. Here’s how: 

1. 1. You reinforce irresponsible behavior. When your children’s spending exceeds income, that’s bad behavior. We all need to learn to live within what we earn (unless you want to go deep into debt like many of your neighbors).[2]  Do not subsidize their excess spending.
   2. You transfer this misbehavior to your grandchildren. Imagine if your children passed these destructive habits to your grandchildren! According to the Center for Retirement Research at Boston College, this is precisely what can happen.[3]  Spoiling grandchildren now can tarnish your legacy of the values they live out later.
   3. You ruin your children’s budgets. The reality is that most parents consider gifts to children as one-time in nature. However, many adult children might forget that fact. Their spending adjusts to permanent levels, despite the fact that your gifting is not permanent.
   4. You deprive your children of joy. Adult children who truly love their parents desire for their parents to be happy. While money cannot buy you happiness, being poor does appear to go along with emotional problems, according to debt.org.[4]
   5. You might endanger the future financial well-being of your children. Adult children often fail to consider one very important risk: the risk that they themselves might have to support their parents in their old age.  This risk rises when their parents’ health grows worse. Parents can serve their children best by taking care of themselves first through responsibly enjoying their wealth for their own benefit. They might lessen the risk of children having to support their parents financially later on. Wise parents who successfully raised their adult children to be independent should take pride in that success. Such parents often enjoy better health.

Healthy parents ought to make their children happier, too.

Parents ought to live out the purpose for their lives first. Prudent financial planning can empower you to do this, perhaps with some room (on occasion) to spoil grandchildren.

We would be pleased to help you empower your family to live with purpose.

Schedule appointment

[1] Brady Porche, “Poll: 3 in 4 parents with adult kids help them pay debts, living expenses” on https://www.creditcards.com/credit-card-news/pay-adult-childrens-debt-poll.php  accessed on June 13, 2018.
[2] Tae Kim, “Total US household debt soars to record about $13 trillion” on https://www.cnbc.com/2018/02/13/total-us-household-debt-soars-to-record-above-13-trillion.html  accessed on June 13, 2018.
[3] “Parents Pass (Bad) Money Habits to Kids”, Center for Retirement Research at Boston College on http://squaredawayblog.bc.edu/squared-away/parents-pass-bad-money-habits-to-kids/  accessed on June 13, 2018.
[4] https://www.debt.org/advice/emotional-effects/  accessed on June 13, 2018.

The post 5 Ways You Can Ruin the Financial Future of Your Adult Children appeared first on AWM.