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.

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.

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.

I hope you enjoyed a Merry Christmas and a wonderful New Year!

Our office is looking forward to what this new year will bring.

Quick Recap of 2020

A quick glance at your December statement might give you the impression that 2020 was smooth sailing. Unfortunately, that was not the case.

Do you remember the last time you were on a wooden rollercoaster? Your car trudges upward as you enjoy the view.  Suddenly, the track disappears!  You race towards the ground and fly around corner after corner.

That’s a good depiction of 2020.

Here’s a quick recap:

• Market started out with a bang in January
• Coronavirus hit the U.S. / world
• Market dropped nearly -40% from February to March
• Government went into rescue/bailout mode
• Treasury went on a money printing spree
• The Fed lowered rates and kept them at near-zero
• By 4^th quarter, markets recovered and ended positive

It’s important to look back on where we came from. For those of you with a Financial Plan in place, you were able to stomach the wild ride of 2020.

How We Manage Your Money

A client recently asked me how I managed their money, especially with so much volatility. How do I know when/what to sell and when/what to buy?

You might have seen a lot of activity on your accounts this last year. 2020 was a very challenging and unusual year.

We had to react quickly, stay vigilant, and be innovative to follow new trends in the economy. Things that worked before, stopped working, and vice versa.

Additionally, I have to make decisions for each of my clients based on their personal situation with the information I had.

My hope is to have enough information about each of my client’s finances to keep them on the right track.

The four big questions I try to answer are:

1. Do you need money to live off of your investments?
2. What kind of risk can you tolerate?
3. Where is the market going?
4. Are there any other factors I need to be aware of?

For those who have a very close relationship with us, we know where you stand and can act proactively for you, no matter what the market throws our way. Most of you have a Financial Plan in place and know what to expect during the good and rough seasons.

If you are still on the fence about scheduling a planning session, know that both you and we can benefit. I will be more informed of what your goals, needs, and plans are. You can have greater peace of mind knowing we have your back and will act in your best interest.

The more you share with us, the more beneficial it can be for you.

Who Benefits the Most? (*Hint* It is not necessarily how much you have!)

Our top clients who reap the most benefits from me do these 3 things:

• You engage with me because you see the value of getting the most out of us in a relationship.
• You share information so I am better informed on seeking to protect you and when to take opportunities.
• You introduce us to your other professionals so we can work as a team to optimize your planning strategies.

Clients who pay taxes can save money by having us explore and execute tax harvesting, Roth conversions, and RMD distribution strategies for you.

Do you know anyone who struggles with these roadblocks to financial success?  (See the sidebar below.).

What Happens When You Don’t Engage?

From my experience, clients are tempted to quickly become disengaged, passive, and lose sight of the big picture.

When we feel we’re missing information, we are forced to exercise caution, even for clients who could be taking more risks.

Disengaged clients can often experience fear and emotions without a plan to keep them grounded. Not willing to invest, because of fear, or staying out of the market because of emotions.

We serve you best when we are proactive. There is still time to engage and benefit more fully from working with us.

What to Expect in 2021:

1. The Market. Expect volatility – a new roller coaster ride?
2. A New Administration. Many things will change, including higher taxes and more regulations.
3. Taxes. Regardless of what happens in the market or the new administration, there will be tax changes. RMDs are back.

How Are We Watching Out for You?

We will be vigilant on investments and diversification, focusing on opportunities that will benefit from higher government spending.

Heading into 2021, we are less confident on things like fixed income that are dependent on interest rates staying low forever.

Inflation is also on the top of our minds.

Sincerely,

Petr Burunov, CFP®
President / Wealth Strategist

The post Client Newsletter 1Q21 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.

We’re encouraging everyone: don’t let fear rule your finances.

Many of you have developed a financial plan to achieve successful retirements and we’re very thankful that during these times, those plans have helped to mitigate uncertainty.

If you don’t have a plan, we encourage you to think about developing one and putting it in place. Knowing where you are going can help give you peace of mind and confidence, especially in the midst of economic and social uncertainty.

During seasons like this, our focus is to continue reviewing risks and looking for opportunities.

What have we been doing?

1. Continue to Further Reduce Risk.
   

   After such a strong market in 2019, we suspected we were due for some sort of correction. That said, we did not expect the coronavirus or a crash in oil prices to move the market to such an extent.

   In January, we started reducing risks in your portfolios. Specifically, we reduced positions in emerging markets, small-cap equities, and intermediate high yield debt in favor of cash and gold.  We had concerns over international growth, especially from China, causing us to cut emerging markets. High leverage and higher credit risk (in part due to the collapse in oil prices first on lower China and air travel, then recently the collapse in OPEC talks with Russia) made us cut positions in small-cap and high yield.

2. Roth Conversions.

   This might be a good opportunity for some to think about doing Roth Conversions. Converting more shares at lower prices can potentially reduce your future RMD’s once the market starts to recovers.

   As a result, these conversions could reduce your taxable income in the future.

3. Tax Harvesting.

   Taking down risk in portfolios followed by the market’s subsequent decline has also created opportunities for tax harvesting in taxable accounts.

   This might be a good opportunity to start taking gains off the table and offsetting them with more current losses to minimize or even reduce future tax liabilities in taxable accounts.

4. Looking for Opportunities.

   This week we are slowly beginning to selectively re-enter the market when the opportunity presents itself and aligns with your goals. We are being patient and not jumping in too quickly.

   We are also seeking to enhance client portfolios in the process. For instance, one shift is to remove individual companies with more exposure to economic downturn and add more diversified investments (individual companies or broader equity baskets).

What might lie ahead?

Much uncertainty remains.

• Coronavirus quarantines will put economic activity on hold for much of the spring, if not longer.
• Low oil prices will pressure US energy producers for a while longer.
• Earnings are likely to decline in 2020.

However, US Treasury yields have collapsed below inflation. Relative valuation for equities, particularly those with sustainable dividend yields, have improved immensely. While their stock prices have cratered, US banks appear to be better capitalized than in 2008.

Valuation has not yet been enough of a compelling argument to boost risk-on assets like stocks and commodities. Yet, when the US economy eventually starts to resume operating at normal capacity with a peaking in Coronavirus cases, we think the market might start to recover on less bad news.

It’s impossible to know when the chaos will end. That said, we are proactive and vigilant.

What can you do?

1. Stay calm and don’t panic. Stay true to yourself and don’t let your emotions run your financial decisions
2. Have a plan. If you have a financial plan, lean into it and let it do its job. If you don’t have a plan, now is the time to get one.
3. Let’s look for opportunities. Tax season is upon us and we are encouraging you to look for opportunities to utilize the new tax code to save on tax liabilities.
   Now might also be the time to think about slowly re-entering the market in small increments.

Thank you for your trust in us as we partner on your financial journey with you.

The post Separating Emotions from Investing is Key to Surviving Coronavirus. appeared first on AWM.

We all know that one guy at the gym…

He stands in front of the mirror and curls the biggest dumbbells, but never works out anything else.

Picture his average-sized calves struggling to carry his ginormous biceps out the door.

It’s pretty obvious that he’s not following a balanced workout routine. You might be able to get away with that at the gym.  But can you do the same with your money?

So many of us are consumed with contributing to our retirement accounts that it’s easy to ignore our budget and unleash our impulsive spending habits.

Are you ready to start laying a solid foundation for a balanced retirement? Here’s where you can start!

Discipline.

It all comes down to living within your means.

A client I used to work with is the perfect example. She didn’t make more than $30,000 a year, but because she budgeted strategically, she was able to take extravagant vacations and save up for big purchases without tapping into her savings.

Discipline is creating a doable budget and sticking to it. Here are a few ways to get your budget started:

• • Pay yourself first—Each paycheck or raise, set a little aside for your future. Start by saving a small amount to your retirement account(s) and increase your contributions over time.
  • Use the envelope system—If you struggle with overspending, break down your expenses into categories. Either with real envelopes or separate savings accounts, budget a certain amount for each category and only spend what you have saved.
  • Have a little fun—Build some fun into your budget. It will motivate you to keep working towards your goals and live your life with purpose.

Have A Solid Plan.

Work with a trusted fiduciary financial planner to design a road map to follow. Think about where you want to be in 3, 5, 10 or even 30 years. What do you want to have accomplished? You deserve to be successful, and working with the right professionals will help you get there.

Don’t skip leg day.

No seriously, don’t skip leg day. At the gym… Or with your finances. 😉
Don’t focus on just one aspect of your finances. If you want to be successful, there has to be a balance.

Building financial discipline is a lot like building muscle. You have to start slow.  Add more reps and weight over time. You might be sore at first. As you push and stretch yourself, you will start to love the results!

Get Started!

The post How can I develop financial discipline in my life? appeared first on AWM.