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Tuesday, 03 November 2015 11:37

Step Outside the Box of Conventional Thinking

Jack LaLanne 1961Time to take inspiration from the fitness expert, Jack Lalanne.

A self-described emotional and physical wreck while growing up, Mr. LaLanne began turning his life around after hearing a talk on proper diet at age 15. Mr. LaLanne started working out with weights when they were an oddity. In 1936 he opened the prototype for the fitness spas to come - a gym, juice bar and health food store.

At the time, doctors advised their patients to stay away from his health club, a business totally unheard of at the time. Patients were warned that, "LaLanne was an exercise 'nut' whose programs would make them muscle-bound and cause severe medical problems."

It's amazing to look back now and consider how the prevailing experts were wrong about the effects of exercise and fitness. 

It's also worth considering that much of the prevailing financial advice you hear from TV financial gurus or other "experts" may not be complete or correct either.

You're not going to create a financial strategy for yourself that is flexible, responsive to change and that will work in both a strong and weak economy by doing what everyone else has always done. And just like Mr. LaLanne, it makes sense, at times, to challenge the status quo and step outside the box of conventional thinking.

You have far greater financial flexibility, creativity and strategy available to you than just following the predictable, common-place and incomplete advice you hear every day:

  • "Stay in the stock market, ride out the downturn no matter what"
  • "Invest for the long term"
  • "Focus on rate of return"

I work with you to develop your skill and financial knowledge. We discuss your life choices, values, and overall personal, family or business situation and outlook.Think-out-of-the-box

Then together we choose appropriate financial products that fit into and support your customized, personal, lifetime financial strategy.

Published in Coach's Corner

You might have seen Wednesday's front page headlines from The Wall Street Journal and The USA Today:

"Markets Reel in Global Selloff"
"1,000 Point Sell-Off Rocks Stock Market."

Here we are again. Volatility, worry and advice: Sell! Buy! Don't sell! Don't buy!

It's easy to feel like you need to react and "do something" when the markets are turbulent and you're bombarded with advice. Often folks react in ways that hurt them financially more than help them.

Here are 3 Mistakes to Avoid. Don't..

1. React Emotionally

Angry-girlThis is what the stock market does: it goes up and then it goes down. Sometimes a lot. And sometimes very quickly. If you have a lot of retirement money in the stock market, it's hard not to be scared by these wild swings. But panicking isn't a good way to deal with your worry.

Use this market correction to evaluate your situation.

If you aren't comfortable with the stock market swings, or you can't afford to lose any of your retirement money in the short term, then the stock market is probably not a good fit for you.

You can't get financial peace of mind if you are emotionally and financially tied to riding market highs and lows.

2. Leave your money in the stock market, no matter what

stock-market-fluctuationWhen the market takes a nose dive the common and predictable advice is: "Stay in the market for the long-term." This advice may work if retirement is 10-20 years away. But it doesn't work for someone who wants to take a distribution from their 401(k) this month or in the near future.

As you think about your retirement needs, make sure that you can weather a stock market downturn with your retirement funds and still retire.

3. Keep all your money in one financial product

retirement-jarYou do better financially when you have diversification. Many people talk about diversified stock market portfolios. But this is not what I'm talking about.

My clients sleep better at night when they have a financial strategy that captures the upside that the stock market can offer, while limiting and, in many cases, eliminating the downside of a stock market plummet.

There are a number of ways to accomplish this.

For example, you may want to keep some retirement funds in the stock market to capture growth while placing other funds in different products that focus on safety.

My point is - there are lots of financial products that will fit into a well-conceived lifelong financial strategy. Take advantage of them.

One final thought - stock markets respond to world events and politics. Scary headlines and worrisome world events do affect your 401(k) and its long-term value. Ask yourself how much you want your retirement money tied to unpredictable and uncontrollable world events.

There are other options. I'm here to help you understand and implement them. Even in tumultuous times, you can have financial peace of mind.

Sincerely,
Dwayne

Published in Coach's Corner
Thursday, 26 February 2015 06:43

Is Your Money Working Together?

Ever been on a team that is working well together?

When you're on a strong team, be it a sports team or a business team, the unique gifts and strengths of the individual members contribute to the success of the whole.

Seattle-SeahawksIn fact, on a strong team, like say, the Seattle Seahawks, while the strengths of each individual member are obvious, it's the team working together that gets to the Super Bowl.

Let's apply this same team approach to your financial strategy.

Instead of thinking of your financial resources as isolated financial products, think of each financial product you have as a individual player on your financial team.

For example, don 't think about your bank account, 401(k), real estate, life insurance policy, certificate of deposit
(or any other product) as isolated money in "separate buckets."Money in cups

Instead, consider how your different financial products might actually work together to make your financial situation stronger.

When you develop a lifetime financial strategy that factors in the strengths and weaknesses of each financial product, along with your life values, then you create a winning financial team.

Your retirement strategy should take into account your life values and needs and potential life events - both planned and unplanned.

Then, each financial tool or product should be evaluated as to how it will contribute to your financial team and enable you to achieve your goals.

Financial-Gears

Pete Carroll, the Seahawks Coach, looks for defensive players that fit his strategic vision. He bids farewell to highly capable players that don't fit his long-term goals or whose strengths don't match his needs.

Think about your financial products in the same way. Choose each financial player carefully with your retirement needs and goals in mind.

You don't have to build your financial team alone. We know Pete Carroll looks to his management and coaching staff for expertise.

And that's why I'm here. Together, we can build a winning financial team that provides you with a secure retirement.

Sincerely,
Dwayne

Published in Coach's Corner

Syndicated columnist Chuck Jaffe, in his January 26, 2015, Seattle Times column entitled, "Your Funds" recently made this statement about mutual funds:

"...But investors are pretty well versed in the evils of mutual funds. Funds can be expensive, tax inefficient, underperforming, opaque, hard-to-understand investment vehicles that seldom perform as expected no matter the market conditions.

Most investors know that, and they should."

Is this the performance you expect from your mutual funds?Gambling

I know I don't run into many individuals, families or business owners who want this type of performance from their mutual funds.

You want growth from your mutual fund. Enough growth and security to be able to retire.

Mutual funds are the common "go to" financial product. But often, they are not the best or the only product that is optimal for your financial situation.  Still, it's amazing to me that this is the only financial option offered to you again and again in articles by financial "experts."

There are financial products and strategies out in the market today that will capture market growth without the risk of loss.

With today's financial products and the right financial strategy, there's no need to ever lose money or place your money in what Chuck Jaffe describes as "hard-to-understand investment vehicles that seldom perform as expected."

Choose to look and think beyond the common. It will be worth your while.

Sincerely,
Dwayne

solutions

Published in Coach's Corner

Last Thursday, as I do every morning, I was perusing financial news and updates across a number of newspapers and online sites.

I took a look at the SigFig Analysis in the USA Today. SigFig notes that they have "over a half a million investors nationwide with total assets of 200 billion." (USA Today, June 12, 2014, Money3B).


USA-Today SigFig-Analysis J

 Reference:  USA Today, June 12, 2014 Edition, Money 3B, SigFig Analysis

Over the most recent 6-month period, engaged SigFig investors tracking the performance of their investments, and willing to accept moderate risk of loss, achieved a 4.32% return. Those investors willing to accept a highest risk of loss achieved a 5.08% return.

Yet these types of returns are comparable to those achievable with other financial products that achieve this level of growth but with no risk of loss.

My question to you is this: why live with the worry of the potential loss of your money?

I want to know my money will be available to me in retirement, not just hope that it will be. Why should we accept losing our money at any age for any reason?

We can get caught in the cycle of choosing high-risk investments that promise enticing rates of return. If we lose our capital or don't achieve the promised rate of return, we invest more money into another high-risk product.

We want to believe that our nerve and willingness to take risks will eventually be rewarded with a windfall that more than makes up for our losses. This approach is akin to sitting at the slot machines, feeding in dollar after dollar, waiting for the jackpot. Of course, you cannot rule out a big win. But this strategy is hardly one you want to use to anchor a lifetime financial strategy.

You don't need to hope that it will all work out if you just shut your eyes and believe. This approach may have worked for Dorothy in the Wizard of Oz, but it's not a solid strategy as we move into a volatile and rapidly evolving 21st Century.Dorothy

Win Win StrategyYou can set yourself on a different path to financial stability and peace of mind.  Choose financial products with predictable financial results AND growth as the cornerstone of your financial strategy.

And then, if you so choose, place money you can afford to lose, in the stock market or other investments.

We live in challenging times. But with knowledge and the right financial products, we can face our future with confidence.

 

Published in Coach's Corner
Thursday, 20 March 2014 11:44

Your Retirement Income: And Your Number Is?

Payday rev1
Why do we have a job? It's usually because we want a steady paycheck. We want guaranteed income.

A lot of people will not work on commission because they want a guaranteed paycheck. In fact, many people work in a job or career they dislike for months, years or a lifetime because of that guaranteed paycheck.

Yet, the great irony is that these same people put their hard-earned money from their guaranteed paycheck into the stock market.

Why?

A lot of people don't realize that the mutual funds they purchase in their 401(k) are a collection of stocks in the stock market.Investing-Gamble Rev-1

Does this make any common sense at all? How has this happened?

It's because we hear over and over again: "Put your money in a 401(k) for your retirement." But the performance of your 401(k) is not guaranteed. As most of us have experienced, you can lose money in your 401(k) at any time.

What's going on?

Yes, there are all kinds of stock market charts and graphs that show that over the long-term, your 401(k) will grow. You look at these charts and believe you will have enough income to live happily ever after in retirement. But is this a hopeful wish or guaranteed plan?

Stock Market Charts and Graphs rev 1By using a 401(k) as our primary retirement plan, we are trying to build a guaranteed retirement income with money that we are gambling with in the stock market.

Our 401(k) does not produce predictable results. How can it when the stock market is unpredictable? Mutual funds in your 401(k) come with no performance guarantee.

The risk is all yours.

 

Published in Coach's Corner

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