Annual reviews and why you need one

1
00:00:00,140 --> 00:00:02,680
Welcome to Something More with Chris Boyd.

2
00:00:03,040 --> 00:00:05,840
Chris Boyd is a certified financial planner, practitioner,

3
00:00:06,120 --> 00:00:08,600
and senior vice president and financial advisor at

4
00:00:08,600 --> 00:00:10,900
Wealth Enhancement Group, one of the nation's largest

5
00:00:10,900 --> 00:00:12,500
registered investment advisors.

6
00:00:13,040 --> 00:00:14,940
We call it Something More because we'd like

7
00:00:14,940 --> 00:00:17,060
to talk not only about those important dollar

8
00:00:17,060 --> 00:00:19,240
and cents issues, but also the quality of

9
00:00:19,240 --> 00:00:21,680
life issues that make the money matters matter.

10
00:00:22,080 --> 00:00:25,420
Here he is, your fulfillment facilitator, your partner

11
00:00:25,420 --> 00:00:28,580
in prosperity, advising clients on Cape Cod and

12
00:00:28,580 --> 00:00:29,660
across the country.

13
00:00:29,960 --> 00:00:32,460
Here's your host, Jay Christopher Boyd.

14
00:00:33,420 --> 00:00:35,720
Hello, and welcome to another edition of Something

15
00:00:35,720 --> 00:00:36,660
More with Chris Boyd.

16
00:00:36,740 --> 00:00:38,200
My name is Jeff Perry, and I have

17
00:00:38,200 --> 00:00:41,800
the privilege of co-hosting this episode with

18
00:00:41,800 --> 00:00:43,220
my team member, Russ Ball.

19
00:00:43,420 --> 00:00:44,120
How are you doing, Russ?

20
00:00:44,540 --> 00:00:45,520
Pretty good, pretty good.

21
00:00:45,540 --> 00:00:46,480
How are you this morning, Jeff?

22
00:00:46,820 --> 00:00:47,100
Good.

23
00:00:47,160 --> 00:00:48,040
We're in a new month.

24
00:00:48,180 --> 00:00:48,700
It's May.

25
00:00:49,220 --> 00:00:49,860
That's right.

26
00:00:49,940 --> 00:00:50,360
That's right.

27
00:00:50,480 --> 00:00:52,280
I did notice the calendar this morning.

28
00:00:52,440 --> 00:00:52,540
May Day.

29
00:00:53,080 --> 00:00:54,660
For those of you who are in the

30
00:00:55,440 --> 00:00:58,220
Northeast or listening in other parts where you

31
00:00:58,220 --> 00:01:01,240
have cold weather, I can see that your

32
00:01:01,240 --> 00:01:04,459
hope is springing forward and saying, it's May.

33
00:01:04,600 --> 00:01:05,500
It's going to get warm.

34
00:01:06,440 --> 00:01:06,840
I know.

35
00:01:06,920 --> 00:01:07,160
I know.

36
00:01:07,180 --> 00:01:08,660
It's starting to feel like it out here,

37
00:01:08,820 --> 00:01:11,020
but I did check that about the next

38
00:01:11,020 --> 00:01:12,700
week, it's going to be raining every single

39
00:01:12,700 --> 00:01:12,980
day.

40
00:01:13,680 --> 00:01:15,680
It's a nice way to welcome in May.

41
00:01:17,040 --> 00:01:19,140
April and early May showers, right?

42
00:01:19,140 --> 00:01:20,700
Yeah, I guess so.

43
00:01:20,840 --> 00:01:21,340
I guess so.

44
00:01:21,900 --> 00:01:23,520
Well, for the listeners who listen in, they

45
00:01:23,520 --> 00:01:26,220
know that I'm primarily in Florida, and that's

46
00:01:26,220 --> 00:01:26,980
where I am today.

47
00:01:27,200 --> 00:01:29,220
We're still in the dry season.

48
00:01:30,100 --> 00:01:34,040
We start getting rain in June, and that's

49
00:01:34,040 --> 00:01:36,960
our rainy season, June to September.

50
00:01:37,900 --> 00:01:40,400
We all have seasons of rain.

51
00:01:40,780 --> 00:01:41,420
Yeah, yeah.

52
00:01:41,480 --> 00:01:42,520
At least everyone gets it.

53
00:01:42,620 --> 00:01:46,060
It's not just us out here.

54
00:01:46,220 --> 00:01:48,600
It's been an interesting couple of months.

55
00:01:48,740 --> 00:01:50,500
It's just gloomy in Cape Cod.

56
00:01:50,900 --> 00:01:51,180
Yeah.

57
00:01:51,460 --> 00:01:54,780
I think spring comes.

58
00:01:54,940 --> 00:01:57,240
I remember I lived on the Cape for

59
00:01:57,240 --> 00:01:57,740
decades.

60
00:01:58,320 --> 00:02:00,180
Spring comes, you get that date on the

61
00:02:00,180 --> 00:02:01,940
calendar in March, and you get that little

62
00:02:01,940 --> 00:02:03,060
glimmer of hope.

63
00:02:03,180 --> 00:02:07,520
Then baseball season starts, and then April ends,

64
00:02:07,580 --> 00:02:08,840
and it still hasn't shown up.

65
00:02:09,880 --> 00:02:10,360
Exactly.

66
00:02:12,620 --> 00:02:13,540
Don't despair.

67
00:02:13,940 --> 00:02:14,280
I know.

68
00:02:14,320 --> 00:02:14,520
I know.

69
00:02:14,540 --> 00:02:15,600
It's right around the corner here.

70
00:02:15,600 --> 00:02:17,580
You're almost there, right?

71
00:02:20,280 --> 00:02:23,900
Well, for this episode, Russ, I think we

72
00:02:23,900 --> 00:02:27,600
should talk about annual reviews.

73
00:02:29,180 --> 00:02:32,680
Our listeners certainly hear us talk about the

74
00:02:32,680 --> 00:02:36,100
need or recommendation for people to have a

75
00:02:36,100 --> 00:02:37,500
comprehensive financial plan.

76
00:02:37,500 --> 00:02:38,720
We talk about that a lot.

77
00:02:40,040 --> 00:02:44,600
Whenever we bring on a new client, 99

78
00:02:44,600 --> 00:02:46,740
% of the new clients go through this

79
00:02:47,440 --> 00:02:50,200
onboarding process that revolves a few meetings and

80
00:02:50,200 --> 00:02:53,080
the development of a financial plan.

81
00:02:54,920 --> 00:02:56,200
We've talked about it on the show.

82
00:02:56,280 --> 00:02:58,960
It's really at least a two-meeting process

83
00:02:58,960 --> 00:03:02,300
where the first meeting, we describe it as

84
00:03:02,300 --> 00:03:03,380
getting to know you.

85
00:03:04,060 --> 00:03:09,860
We're not welcome to asset management resources, AMR

86
00:03:09,860 --> 00:03:13,360
team, wealth enhancement group, and here's what we

87
00:03:13,360 --> 00:03:13,780
recommend.

88
00:03:14,000 --> 00:03:17,000
That's not how we run our business.

89
00:03:17,780 --> 00:03:21,420
You listen to talk radio, you see some

90
00:03:21,420 --> 00:03:26,020
shows on TV, and they give the financial

91
00:03:26,020 --> 00:03:29,420
plan or 15 seconds of information and they

92
00:03:29,420 --> 00:03:30,720
start making recommendations.

93
00:03:31,760 --> 00:03:33,480
That's just not possible.

94
00:03:33,620 --> 00:03:36,020
It's like meeting your doctor for the first

95
00:03:36,020 --> 00:03:38,600
time and not having any tests or not

96
00:03:38,600 --> 00:03:40,380
having any conversation, and it gives you a

97
00:03:40,380 --> 00:03:40,760
prescription.

98
00:03:42,640 --> 00:03:45,400
We go through this process of developing a

99
00:03:45,400 --> 00:03:47,600
financial plan, two meetings, getting to know you,

100
00:03:47,700 --> 00:03:52,220
getting to know not only your balance sheet,

101
00:03:52,320 --> 00:03:53,880
not only your net worth, not only your

102
00:03:53,880 --> 00:03:57,520
investments, but your goals, your fears, your concerns,

103
00:03:57,840 --> 00:03:59,180
your unique challenges.

104
00:03:59,360 --> 00:04:03,120
Maybe you have some in your family, cash

105
00:04:03,120 --> 00:04:04,080
flows, debt.

106
00:04:04,380 --> 00:04:06,940
We go through the whole thing and develop

107
00:04:06,940 --> 00:04:07,800
the financial plan.

108
00:04:07,940 --> 00:04:10,420
I know you, in the months that you've

109
00:04:10,420 --> 00:04:12,980
been with us, you've dug right into that.

110
00:04:13,120 --> 00:04:14,920
You've actually been working on a lot of

111
00:04:14,920 --> 00:04:15,839
financial plans, right?

112
00:04:16,160 --> 00:04:16,779
Yep, absolutely.

113
00:04:17,160 --> 00:04:19,100
That's a big part of my role right

114
00:04:19,100 --> 00:04:22,380
now is the financial planning process and getting

115
00:04:22,380 --> 00:04:24,620
all the information that we gather in our

116
00:04:24,620 --> 00:04:29,960
initial meeting into a financial plan and trying

117
00:04:29,960 --> 00:04:31,780
to figure out the best ways to optimize

118
00:04:31,780 --> 00:04:35,560
and create a plan that works for the

119
00:04:35,560 --> 00:04:35,900
client.

120
00:04:36,320 --> 00:04:39,000
I know you came from the financial services

121
00:04:39,000 --> 00:04:42,980
sector before you joined our team, but were

122
00:04:42,980 --> 00:04:45,780
you surprised at the amount of detail that

123
00:04:45,780 --> 00:04:48,200
these plans go into, or is this something

124
00:04:48,200 --> 00:04:48,740
you expected?

125
00:04:49,620 --> 00:04:50,140
No, definitely.

126
00:04:50,320 --> 00:04:52,980
I think, especially in the big wire house

127
00:04:52,980 --> 00:04:55,620
world, they're just starting to catch on to

128
00:04:55,620 --> 00:04:58,380
the financial planning side of things and the

129
00:04:58,380 --> 00:05:01,200
importance of it and what clients are looking

130
00:05:01,200 --> 00:05:01,380
for.

131
00:05:01,460 --> 00:05:03,100
They don't want to have just a purely

132
00:05:03,100 --> 00:05:06,820
transactional relationship with their investment managers.

133
00:05:08,120 --> 00:05:11,100
For me, it was coming in and right

134
00:05:11,100 --> 00:05:13,020
off the bat, we're right into planning mode.

135
00:05:13,020 --> 00:05:15,000
I really think that's in the best interest

136
00:05:15,000 --> 00:05:18,140
of clients because we get the whole picture.

137
00:05:18,320 --> 00:05:19,480
We're not just trying to sort out what

138
00:05:19,480 --> 00:05:20,820
you're going to do with this X amount

139
00:05:20,820 --> 00:05:21,960
of dollars that you have sitting on the

140
00:05:21,960 --> 00:05:22,220
side.

141
00:05:23,060 --> 00:05:24,780
We're really trying to get a full picture

142
00:05:24,780 --> 00:05:27,860
and then offer our guidance and suggestions and

143
00:05:27,860 --> 00:05:28,200
advice.

144
00:05:28,760 --> 00:05:29,020
That's right.

145
00:05:30,480 --> 00:05:34,040
For our regular listeners, we're not convinced that

146
00:05:34,040 --> 00:05:36,600
you need a comprehensive financial plan by now.

147
00:05:36,840 --> 00:05:38,200
I don't think we're going to convince you.

148
00:05:39,000 --> 00:05:41,300
It's almost in every episode.

149
00:05:41,540 --> 00:05:43,040
At some point, it comes in.

150
00:05:44,280 --> 00:05:45,740
If we're talking about a problem, we say,

151
00:05:45,860 --> 00:05:47,080
how's it fit in the financial plan?

152
00:05:47,140 --> 00:05:48,760
If we talk about, did you do something?

153
00:05:48,840 --> 00:05:49,620
Should you do something?

154
00:05:49,940 --> 00:05:52,120
We talk about the comprehensive financial plan.

155
00:05:52,780 --> 00:05:56,800
For this segment, I thought what happens after

156
00:05:56,800 --> 00:05:58,400
the plan would be a good discussion.

157
00:05:59,140 --> 00:06:02,260
For us, it's an annual review.

158
00:06:02,760 --> 00:06:04,420
That doesn't mean we don't talk to our

159
00:06:04,420 --> 00:06:07,240
clients more than once a year.

160
00:06:07,360 --> 00:06:09,740
If a client has a question or a

161
00:06:09,740 --> 00:06:13,580
concern or they want to model something out,

162
00:06:13,740 --> 00:06:16,260
they're thinking about buying a second house, downsizing,

163
00:06:16,460 --> 00:06:19,700
taking a trip around the world, giving $50

164
00:06:19,700 --> 00:06:22,380
,000 to their child for a down payment,

165
00:06:22,920 --> 00:06:28,020
wedding coming up, whatever it is, we talk

166
00:06:28,020 --> 00:06:28,720
to them all the time.

167
00:06:28,720 --> 00:06:30,300
We like to hear from them, actually.

168
00:06:30,480 --> 00:06:32,700
We're better planners the more we hear from

169
00:06:32,700 --> 00:06:34,660
our clients because we understand what they're facing,

170
00:06:34,780 --> 00:06:35,640
what they're thinking about.

171
00:06:35,860 --> 00:06:36,140
Absolutely.

172
00:06:36,820 --> 00:06:39,440
At least once a year, we are reaching

173
00:06:39,440 --> 00:06:42,620
out to our clients and saying, time to

174
00:06:42,620 --> 00:06:44,660
come in, time to jump on a call,

175
00:06:45,600 --> 00:06:49,200
whatever you prefer, remote or in person, because

176
00:06:49,200 --> 00:06:52,760
let's review that financial plan.

177
00:06:53,560 --> 00:06:54,840
Let's go over it.

178
00:06:56,180 --> 00:07:00,940
If you invest on your own, if you

179
00:07:00,940 --> 00:07:04,140
have your own financial plan and it's working

180
00:07:04,140 --> 00:07:08,300
for you, no judgment at all, but I

181
00:07:08,300 --> 00:07:09,500
hope you're reviewing your plan.

182
00:07:09,600 --> 00:07:10,560
I hope you're updating it.

183
00:07:10,660 --> 00:07:12,800
It's not something like you don't make the

184
00:07:12,800 --> 00:07:14,340
plan, put it on the shelf, and walk

185
00:07:14,340 --> 00:07:14,680
away.

186
00:07:15,240 --> 00:07:16,780
If you're our client, we're going to be

187
00:07:16,780 --> 00:07:18,720
reviewing this with you.

188
00:07:19,240 --> 00:07:21,940
If you're working with another financial advisor and

189
00:07:21,940 --> 00:07:24,560
you don't have a plan and you don't

190
00:07:24,560 --> 00:07:28,300
have regular reviews, I'm not saying that person's

191
00:07:28,300 --> 00:07:30,480
not a good financial advisor, but it's not

192
00:07:30,480 --> 00:07:31,220
how we do it.

193
00:07:31,560 --> 00:07:33,720
If you'd like to get a second look

194
00:07:33,720 --> 00:07:36,180
at your plan or create a plan, that's

195
00:07:36,180 --> 00:07:36,660
why we're here.

196
00:07:36,700 --> 00:07:37,340
We're here to help.

197
00:07:39,000 --> 00:07:42,880
We do complimentary reviews of people's plans or

198
00:07:42,880 --> 00:07:45,320
portfolios, whatever they want us to do initially.

199
00:07:45,320 --> 00:07:47,800
So you're welcome to give us a call.

200
00:07:48,280 --> 00:07:49,800
But back to the annual review.

201
00:07:50,320 --> 00:07:53,080
I think everyone needs an annual review, if

202
00:07:53,080 --> 00:07:54,540
you have an advisor or if you don't.

203
00:07:55,460 --> 00:08:00,880
And Russ, have you participated in some annual

204
00:08:00,880 --> 00:08:02,120
reviews with clients so far?

205
00:08:02,440 --> 00:08:02,540
Yeah.

206
00:08:03,080 --> 00:08:06,900
I'm involved in pretty much everyone with Chris,

207
00:08:07,940 --> 00:08:11,100
sort of assisting and taking some notes, but

208
00:08:11,100 --> 00:08:13,120
I definitely had a lot of exposure to

209
00:08:13,120 --> 00:08:14,680
that since I started, which has been great.

210
00:08:16,420 --> 00:08:19,060
I think from the start, we take a

211
00:08:19,060 --> 00:08:23,860
look at how the portfolio is performing, what's

212
00:08:23,860 --> 00:08:26,860
changed with performance, what's changed with the investments,

213
00:08:26,920 --> 00:08:29,160
if they haven't watched the quarterly updates from

214
00:08:29,160 --> 00:08:30,320
Brian and the team.

215
00:08:31,299 --> 00:08:32,559
We kind of go over that.

216
00:08:33,380 --> 00:08:34,980
And then, like you said, we dive into

217
00:08:34,980 --> 00:08:38,120
the financial plan and say, all right, what's

218
00:08:38,120 --> 00:08:39,179
changed since the last time we saw you?

219
00:08:39,220 --> 00:08:40,720
Sometimes it's been more than a year since

220
00:08:40,720 --> 00:08:41,620
we've seen clients.

221
00:08:42,179 --> 00:08:44,260
And sometimes significant things have changed.

222
00:08:44,380 --> 00:08:46,540
It's like, oh, yeah, actually, no, that mortgage

223
00:08:46,540 --> 00:08:47,300
has been paid off.

224
00:08:47,520 --> 00:08:49,400
Or no, we don't have that credit card

225
00:08:49,400 --> 00:08:49,860
debt anymore.

226
00:08:50,480 --> 00:08:52,800
And we're thinking about buying a house.

227
00:08:52,940 --> 00:08:55,800
And it's interesting how right off the bat,

228
00:08:55,880 --> 00:08:57,420
some clients are like, no, I'm not really

229
00:08:57,420 --> 00:08:59,400
sure what I need to talk about.

230
00:08:59,900 --> 00:09:01,380
And then when we start going into it,

231
00:09:01,380 --> 00:09:03,260
it really starts going out like, oh, maybe

232
00:09:03,260 --> 00:09:05,720
my plan is a little bit different.

233
00:09:06,280 --> 00:09:08,340
Maybe my risk profile has changed a little

234
00:09:08,340 --> 00:09:08,540
bit.

235
00:09:08,660 --> 00:09:10,980
Maybe I'm less inclined to take more risk.

236
00:09:12,820 --> 00:09:14,700
Let's dig into some of those, because there's

237
00:09:14,700 --> 00:09:15,280
a lot there.

238
00:09:15,660 --> 00:09:17,280
And I think you started at the exact

239
00:09:17,280 --> 00:09:17,940
right spot.

240
00:09:18,480 --> 00:09:20,380
It's like you haven't seen an old friend

241
00:09:20,380 --> 00:09:21,780
in a year.

242
00:09:21,860 --> 00:09:23,100
And you start out with what's new.

243
00:09:23,960 --> 00:09:24,720
What's new?

244
00:09:25,600 --> 00:09:28,040
Changes in health often come up.

245
00:09:28,340 --> 00:09:31,700
People who had a plan to maybe work

246
00:09:31,700 --> 00:09:35,360
till, say, age 65, and they have a

247
00:09:35,360 --> 00:09:35,900
health issue.

248
00:09:36,340 --> 00:09:37,860
And they're like, I had to retire this

249
00:09:37,860 --> 00:09:38,160
year.

250
00:09:38,440 --> 00:09:40,680
Or people who think they're going to retire

251
00:09:40,680 --> 00:09:42,540
at age 65 and say, I don't know

252
00:09:42,540 --> 00:09:43,260
what I'm going to do.

253
00:09:43,640 --> 00:09:44,680
I love my job.

254
00:09:44,860 --> 00:09:45,780
I'm going to keep working.

255
00:09:47,020 --> 00:09:50,680
Or maybe they bought a house.

256
00:09:50,840 --> 00:09:52,740
Maybe they bought a boat.

257
00:09:53,780 --> 00:09:54,980
And if you have a boat, you definitely

258
00:09:54,980 --> 00:09:56,340
need to change your financial plan.

259
00:09:58,060 --> 00:10:00,640
Or maybe they have a child who is

260
00:10:00,640 --> 00:10:01,520
heading off to college.

261
00:10:02,040 --> 00:10:04,360
And who knows what the situation is?

262
00:10:05,080 --> 00:10:06,240
It's like, what's new?

263
00:10:06,440 --> 00:10:08,800
And by that question, we mean not just

264
00:10:08,800 --> 00:10:11,420
what's new today, like, oh, the Celtics won.

265
00:10:11,560 --> 00:10:12,400
They're going to round two.

266
00:10:12,540 --> 00:10:14,760
No, we're talking about changes in your life,

267
00:10:14,820 --> 00:10:19,360
life changes that will impact your finances, positively

268
00:10:19,360 --> 00:10:20,060
and negatively.

269
00:10:21,700 --> 00:10:23,820
Sometimes it can be kind of both.

270
00:10:24,040 --> 00:10:26,760
Oh, well, my mother passed away this past

271
00:10:26,760 --> 00:10:27,080
year.

272
00:10:27,320 --> 00:10:28,200
Very sorry.

273
00:10:28,360 --> 00:10:29,840
We talk about that.

274
00:10:30,480 --> 00:10:31,460
And she left me $10 million.

275
00:10:32,320 --> 00:10:35,300
So OK, well, both those things affect your

276
00:10:35,300 --> 00:10:35,620
life.

277
00:10:35,900 --> 00:10:38,880
And we talk about those things.

278
00:10:39,400 --> 00:10:42,380
And then we go into, as you said,

279
00:10:42,740 --> 00:10:44,240
after we get kind of the life changes,

280
00:10:44,320 --> 00:10:46,340
anything significant that we need to be aware

281
00:10:46,340 --> 00:10:49,380
of, we review their portfolio, the assets that

282
00:10:49,380 --> 00:10:52,040
we have under management, review all the accounts

283
00:10:52,040 --> 00:10:52,680
that we have.

284
00:10:52,700 --> 00:10:54,000
And if they have other accounts they want

285
00:10:54,000 --> 00:10:55,960
us to, we can take a look at

286
00:10:55,960 --> 00:10:56,620
those as well.

287
00:10:57,200 --> 00:10:59,900
But just to make sure they understand where

288
00:10:59,900 --> 00:11:03,740
they're invested, make sure they understand their performance

289
00:11:03,740 --> 00:11:06,440
over the past, in our discussion and annual

290
00:11:06,440 --> 00:11:08,840
review here, over the past year or five

291
00:11:08,840 --> 00:11:09,860
years and so forth.

292
00:11:10,320 --> 00:11:12,200
We want them to have knowledge.

293
00:11:12,300 --> 00:11:14,400
We want them to understand how they're doing.

294
00:11:15,220 --> 00:11:17,360
And then the next thing that you mentioned,

295
00:11:17,480 --> 00:11:19,400
which I think is right along the line

296
00:11:19,400 --> 00:11:23,320
of where these usually go, is during the

297
00:11:23,320 --> 00:11:26,980
conversation about life changes and reviewing their portfolio,

298
00:11:27,180 --> 00:11:31,060
their investment accounts, their risk often comes up.

299
00:11:32,640 --> 00:11:33,840
And it's a natural thing.

300
00:11:33,960 --> 00:11:36,720
I say this a lot because it comes

301
00:11:36,720 --> 00:11:37,380
up a lot.

302
00:11:37,940 --> 00:11:39,080
It's a natural thing.

303
00:11:39,160 --> 00:11:42,660
As people get older, they tend to get

304
00:11:42,660 --> 00:11:43,700
more conservative.

305
00:11:44,580 --> 00:11:45,900
And that's a broad statement.

306
00:11:46,420 --> 00:11:50,000
Think about, especially in the category of risk,

307
00:11:50,100 --> 00:11:52,660
think about the things that you would do

308
00:11:52,660 --> 00:11:56,100
when you were 18 and not even consider

309
00:11:56,100 --> 00:11:58,020
the risk you were taking.

310
00:11:58,760 --> 00:12:01,220
Whether it be a sport, whether it be

311
00:12:01,220 --> 00:12:01,900
an activity.

312
00:12:02,940 --> 00:12:05,660
There's a reason our soldiers are young, because

313
00:12:05,660 --> 00:12:07,980
they are willing to jump out of airplanes

314
00:12:07,980 --> 00:12:09,860
or they're willing to go over the hill

315
00:12:09,860 --> 00:12:12,500
with the M16, et cetera.

316
00:12:13,280 --> 00:12:15,720
We all felt invincible when we're younger.

317
00:12:16,700 --> 00:12:18,800
And we are willing to take more risks

318
00:12:18,800 --> 00:12:19,500
just generally.

319
00:12:19,640 --> 00:12:23,140
I'm not specifically talking about finances and investing,

320
00:12:23,260 --> 00:12:24,500
but it applies there too.

321
00:12:25,920 --> 00:12:28,200
And as you get older, you start to

322
00:12:28,200 --> 00:12:32,800
think about your risk tolerance, how much risk

323
00:12:32,800 --> 00:12:33,740
you're willing to take.

324
00:12:34,240 --> 00:12:37,100
And it's even magnified, that kind of view

325
00:12:37,100 --> 00:12:39,520
of risk is magnified when you stop working

326
00:12:39,520 --> 00:12:42,860
and you don't have that ability to generate

327
00:12:42,860 --> 00:12:43,240
income.

328
00:12:43,400 --> 00:12:45,260
You may have income from a pension or

329
00:12:45,260 --> 00:12:48,160
Social Security or from your investments, but you

330
00:12:48,160 --> 00:12:51,840
don't have that kind of self-directed ability

331
00:12:51,840 --> 00:12:52,720
to earn income.

332
00:12:53,500 --> 00:12:56,220
So you start to think about, am I

333
00:12:56,220 --> 00:12:57,280
taking too much risk?

334
00:12:57,300 --> 00:12:59,540
Can I tolerate it if we have a

335
00:12:59,540 --> 00:13:01,240
three-year bear market?

336
00:13:01,460 --> 00:13:01,560
Yeah.

337
00:13:02,880 --> 00:13:04,900
And it can be pretty unsettling when you're

338
00:13:04,900 --> 00:13:06,980
thinking like, this is my nest egg.

339
00:13:07,040 --> 00:13:09,600
This is what I need to live my

340
00:13:09,600 --> 00:13:10,620
current lifestyle.

341
00:13:11,400 --> 00:13:13,820
And when that comes into question where you

342
00:13:13,820 --> 00:13:16,620
see some fluctuation, when there's some volatility, that

343
00:13:16,620 --> 00:13:18,880
can be all that much more unsettling when

344
00:13:18,880 --> 00:13:20,780
you're near retirement or in retirement.

345
00:13:21,580 --> 00:13:23,060
And that's really what you've built up.

346
00:13:24,080 --> 00:13:25,900
So during this annual review, if we get

347
00:13:25,900 --> 00:13:29,780
an indication that a client is feeling like

348
00:13:29,780 --> 00:13:33,020
they're not in the right risk profile, they're

349
00:13:33,020 --> 00:13:36,220
just not comfortable, gee, I know we did

350
00:13:36,220 --> 00:13:39,440
good last year, but I haven't slept in

351
00:13:39,440 --> 00:13:42,400
the last three weeks because of volatility, which

352
00:13:42,400 --> 00:13:44,560
our listeners know we've been talking about a

353
00:13:44,560 --> 00:13:46,340
lot in this last month.

354
00:13:47,240 --> 00:13:49,080
And so we have that discussion and we

355
00:13:49,080 --> 00:13:51,120
use a questionnaire to help guide us.

356
00:13:51,380 --> 00:13:53,700
And we look at the overall goal.

357
00:13:54,080 --> 00:13:57,500
Maybe you don't need to take that risk

358
00:13:57,500 --> 00:13:58,480
to stay in your plan.

359
00:13:58,600 --> 00:13:59,940
You and I just did this for a

360
00:13:59,940 --> 00:14:04,880
client, a woman who's retired, and she was

361
00:14:04,880 --> 00:14:06,960
concerned about the risk because of all the

362
00:14:06,960 --> 00:14:07,680
headline news.

363
00:14:07,760 --> 00:14:09,960
And she had a very solid financial plan,

364
00:14:10,340 --> 00:14:12,260
and she was taking a certain degree of

365
00:14:12,260 --> 00:14:12,560
risk.

366
00:14:12,720 --> 00:14:16,140
And throughout the annual review, it came to

367
00:14:16,140 --> 00:14:21,360
the focus that she was not comfortable taking

368
00:14:21,360 --> 00:14:21,820
the risk.

369
00:14:21,960 --> 00:14:25,180
And so the plan that I asked you

370
00:14:25,180 --> 00:14:27,860
to review, because you had access to the

371
00:14:27,860 --> 00:14:31,800
original plan, was what happens, Russ, if this

372
00:14:31,800 --> 00:14:36,120
client decides to reduce their risk from a

373
00:14:36,120 --> 00:14:36,640
certain level?

374
00:14:36,740 --> 00:14:39,740
I think she was a 60% exposure

375
00:14:39,740 --> 00:14:40,420
to stocks.

376
00:14:41,480 --> 00:14:43,480
What if we reduce it to 30%?

377
00:14:44,060 --> 00:14:46,260
How does her outlook look for the rest

378
00:14:46,260 --> 00:14:46,680
of her life?

379
00:14:46,800 --> 00:14:49,400
Does she still have the cashflow she needs?

380
00:14:49,520 --> 00:14:52,700
Will she still be stable in her goals

381
00:14:52,700 --> 00:14:54,180
and be able to do what she wants

382
00:14:54,180 --> 00:14:54,940
to do as lifestyle?

383
00:14:55,220 --> 00:14:57,180
And the answer in this case was yes,

384
00:14:57,280 --> 00:14:58,140
she was fine.

385
00:14:58,140 --> 00:14:58,840
Yep.

386
00:14:59,320 --> 00:15:00,980
So she doesn't need to take the risk.

387
00:15:01,680 --> 00:15:04,520
You can have the same person, not the

388
00:15:04,520 --> 00:15:05,760
same person, you can have two people with

389
00:15:05,760 --> 00:15:07,880
the same circumstances, they have the same net

390
00:15:07,880 --> 00:15:11,100
worth, same income, same everything.

391
00:15:11,320 --> 00:15:13,400
It's like these two people have, they're twins

392
00:15:13,400 --> 00:15:14,040
financially.

393
00:15:14,720 --> 00:15:20,300
And one person can say, well, my plan's

394
00:15:20,300 --> 00:15:20,940
100%.

395
00:15:20,940 --> 00:15:22,080
I'm really solid.

396
00:15:22,740 --> 00:15:24,980
Therefore, I don't need to take any more

397
00:15:24,980 --> 00:15:25,280
risk.

398
00:15:25,420 --> 00:15:26,480
I feel better that way.

399
00:15:27,200 --> 00:15:30,400
And that's not a wrong position to have.

400
00:15:30,700 --> 00:15:33,960
And their financial twin could say, my plan

401
00:15:33,960 --> 00:15:34,540
is solid.

402
00:15:35,380 --> 00:15:36,200
I'm good.

403
00:15:36,520 --> 00:15:38,700
I can take a lot of risk, because

404
00:15:38,700 --> 00:15:40,860
I can afford to have down years.

405
00:15:41,060 --> 00:15:42,300
So I'm going to take a lot of

406
00:15:42,300 --> 00:15:44,040
risk and think about my legacy.

407
00:15:44,240 --> 00:15:46,840
Think about generation, building generational wealth.

408
00:15:47,980 --> 00:15:50,960
And it's the same setup free the person,

409
00:15:51,460 --> 00:15:53,240
but it's how they feel and what their

410
00:15:53,240 --> 00:15:56,180
vision is with their investment objectives.

411
00:15:56,320 --> 00:15:58,240
And we spend a lot of time during

412
00:15:58,240 --> 00:16:02,400
these annual reviews, life changes, risk profile, but

413
00:16:02,400 --> 00:16:03,840
also what their objectives are.

414
00:16:03,960 --> 00:16:06,020
What are they trying to achieve in their

415
00:16:06,020 --> 00:16:06,800
financial world?

416
00:16:07,780 --> 00:16:07,880
Right.

417
00:16:08,060 --> 00:16:08,280
Yeah.

418
00:16:08,280 --> 00:16:10,700
What are their goals, near term, long term,

419
00:16:11,220 --> 00:16:13,000
cash flow needs, all that.

420
00:16:13,980 --> 00:16:17,320
One point related to that story you just

421
00:16:17,320 --> 00:16:19,700
brought up is a lot of clients will

422
00:16:19,700 --> 00:16:22,520
have some of their rollover IRAs with us,

423
00:16:22,640 --> 00:16:26,640
some taxable assets, and then have a work

424
00:16:26,640 --> 00:16:26,980
plan.

425
00:16:27,700 --> 00:16:28,980
And they're not necessarily sure.

426
00:16:29,060 --> 00:16:30,040
I think we've talked about this in the

427
00:16:30,040 --> 00:16:31,580
past as well, but they're not exactly sure

428
00:16:31,580 --> 00:16:32,680
how that's invested.

429
00:16:33,420 --> 00:16:35,080
And sometimes it's not at all in line

430
00:16:35,080 --> 00:16:36,000
with their risk profile.

431
00:16:36,300 --> 00:16:36,940
Super common, right?

432
00:16:37,140 --> 00:16:37,360
Yeah.

433
00:16:37,560 --> 00:16:39,800
And so a situation like that, where it's

434
00:16:39,800 --> 00:16:42,240
like, maybe their investments with us are in

435
00:16:42,240 --> 00:16:46,140
a more conservative preservation type strategy, but their

436
00:16:46,140 --> 00:16:49,760
work plan is a highly aggressive, all stock

437
00:16:49,760 --> 00:16:50,300
portfolio.

438
00:16:51,200 --> 00:16:53,120
And they just kind of set it and

439
00:16:53,120 --> 00:16:53,460
forget it.

440
00:16:53,520 --> 00:16:54,420
They never really checked it.

441
00:16:54,660 --> 00:16:55,960
So that's what we've been doing a lot

442
00:16:55,960 --> 00:16:58,920
lately is taking a look at those 401ks,

443
00:16:59,020 --> 00:17:02,600
403bs and kind of giving our suggestions and

444
00:17:02,600 --> 00:17:04,940
looking at it as a big picture and

445
00:17:04,940 --> 00:17:07,220
trying to see if it fits with their

446
00:17:07,220 --> 00:17:10,240
risk profile, because that could really throw a

447
00:17:10,240 --> 00:17:11,700
whole portfolio a little bit out of that

448
00:17:11,700 --> 00:17:14,060
risk alignment, I would say.

449
00:17:14,300 --> 00:17:16,359
But yeah, just a thought on that.

450
00:17:16,680 --> 00:17:17,420
No, it's very true.

451
00:17:17,500 --> 00:17:19,700
People spend a lot of time, like if

452
00:17:19,700 --> 00:17:21,220
they have their own investments or if they're

453
00:17:21,220 --> 00:17:24,420
working with advisors, so they're getting information from

454
00:17:24,420 --> 00:17:26,480
us frequently.

455
00:17:27,240 --> 00:17:29,640
Not only do they get the statement from

456
00:17:29,640 --> 00:17:32,660
Schwab and our case or Fidelity, but the

457
00:17:32,660 --> 00:17:35,120
custodians that we use, we send our own

458
00:17:35,120 --> 00:17:37,160
statements out with performance and we send out

459
00:17:37,160 --> 00:17:40,820
newsletters and emails and do podcasts and webinars.

460
00:17:41,020 --> 00:17:43,600
So if someone's watching, they get a lot

461
00:17:43,600 --> 00:17:48,020
from us and other advisors certainly do these

462
00:17:48,020 --> 00:17:48,780
things as well.

463
00:17:48,980 --> 00:17:50,940
But your work plan, which for many people

464
00:17:50,940 --> 00:17:52,800
is their largest investment.

465
00:17:53,720 --> 00:17:56,380
I almost said largest investment with the exception

466
00:17:56,380 --> 00:17:58,160
of their house, but we see people who

467
00:17:58,160 --> 00:18:02,660
have 401ks and other deferred comp plans that

468
00:18:02,660 --> 00:18:04,480
are larger than the value of most homes,

469
00:18:04,580 --> 00:18:04,900
certainly.

470
00:18:05,440 --> 00:18:05,680
Yeah.

471
00:18:06,540 --> 00:18:09,340
And they just don't know what's in it

472
00:18:09,340 --> 00:18:11,420
or they don't change what's in it or

473
00:18:11,420 --> 00:18:12,720
they don't monitor what's in it.

474
00:18:13,100 --> 00:18:16,000
So that's an excellent point of bringing in

475
00:18:16,000 --> 00:18:20,540
those outside assets and seeing, here's your risk

476
00:18:20,540 --> 00:18:20,920
profile.

477
00:18:21,080 --> 00:18:22,080
You're very clear about it.

478
00:18:22,140 --> 00:18:22,860
Here are your goals.

479
00:18:23,300 --> 00:18:24,020
We know you.

480
00:18:25,620 --> 00:18:27,080
How does this fit in?

481
00:18:27,100 --> 00:18:28,440
And if it doesn't fit in, we can

482
00:18:28,440 --> 00:18:32,400
make suggestions to make it consistent with your

483
00:18:32,400 --> 00:18:33,520
overall financial plan.

484
00:18:33,600 --> 00:18:35,620
You mentioned one thing that I want to

485
00:18:35,620 --> 00:18:38,040
dig into because it's another thing that we

486
00:18:38,040 --> 00:18:40,800
spend a lot of time focusing in during

487
00:18:40,800 --> 00:18:45,020
the financial plan, but annual reviews, cashflow.

488
00:18:45,760 --> 00:18:46,300
Yep.

489
00:18:47,180 --> 00:18:47,880
Yeah, we do.

490
00:18:49,300 --> 00:18:51,460
Through the financial plan, we can see a

491
00:18:51,460 --> 00:18:55,100
breakdown of cashflow based on goals and all

492
00:18:55,100 --> 00:18:57,780
the objectives and then your regular expenses, your

493
00:18:57,780 --> 00:18:58,400
regular needs.

494
00:18:58,940 --> 00:19:01,340
You can see each year broken down and

495
00:19:01,340 --> 00:19:03,600
I think that's pretty useful to get a

496
00:19:03,600 --> 00:19:04,620
big picture view.

497
00:19:04,900 --> 00:19:05,620
Where's the money going?

498
00:19:05,720 --> 00:19:06,600
Where's the money coming from?

499
00:19:08,020 --> 00:19:10,100
One piece of that that's always a little

500
00:19:10,100 --> 00:19:12,340
bit tricky is trying to figure out what

501
00:19:12,340 --> 00:19:16,340
your expenses are, but not everyone has a

502
00:19:16,340 --> 00:19:19,880
great handle of what those monthly expenses are.

503
00:19:20,400 --> 00:19:25,000
In general, having that cashflow overview, I think

504
00:19:25,000 --> 00:19:25,600
is very helpful.

505
00:19:25,800 --> 00:19:27,440
When people see that, they really appreciate that.

506
00:19:28,020 --> 00:19:28,120
Yeah.

507
00:19:28,640 --> 00:19:31,320
The cashflow, getting that, how much do you

508
00:19:31,320 --> 00:19:32,540
spend a month on your regular?

509
00:19:32,780 --> 00:19:34,780
And we'll talk in a minute about non

510
00:19:34,780 --> 00:19:37,140
-regular, like single expenses and how we handle

511
00:19:37,140 --> 00:19:37,500
those.

512
00:19:37,660 --> 00:19:39,580
But how much do you need to maintain

513
00:19:39,580 --> 00:19:41,400
your house on a regular month?

514
00:19:41,520 --> 00:19:44,860
If you're cashflow positive, meaning you're bringing in

515
00:19:44,860 --> 00:19:47,160
more than you're spending, a lot of people

516
00:19:47,160 --> 00:19:47,800
don't know.

517
00:19:47,800 --> 00:19:48,940
They're just like, I have enough.

518
00:19:49,240 --> 00:19:50,740
I don't know what it is.

519
00:19:50,820 --> 00:19:52,280
We have a couple of different methods.

520
00:19:52,480 --> 00:19:55,080
We can drill down independently with you and

521
00:19:55,080 --> 00:19:56,420
really get a solid number.

522
00:19:56,800 --> 00:19:58,320
For the people who don't want to do

523
00:19:58,320 --> 00:20:00,960
that, we have a couple of other practices

524
00:20:00,960 --> 00:20:03,780
to get really good estimates.

525
00:20:05,060 --> 00:20:08,640
Most people left on their own, underestimate how

526
00:20:08,640 --> 00:20:09,400
much they spend.

527
00:20:10,880 --> 00:20:15,040
They might know, my electric bill is this.

528
00:20:15,040 --> 00:20:16,680
My auto insurance is this.

529
00:20:16,900 --> 00:20:19,580
I spend this much on groceries, but they

530
00:20:19,580 --> 00:20:23,720
forget things that are regular, but not automated.

531
00:20:24,800 --> 00:20:26,420
They forget about entertainment.

532
00:20:26,680 --> 00:20:27,920
They forget about vacations.

533
00:20:28,100 --> 00:20:30,820
They forget about car repairs.

534
00:20:31,220 --> 00:20:34,200
They think about, I pay auto insurance every

535
00:20:34,200 --> 00:20:36,400
month, but does your car need a repair

536
00:20:36,400 --> 00:20:37,000
every year?

537
00:20:37,320 --> 00:20:37,880
Probably.

538
00:20:38,000 --> 00:20:39,600
If you think brakes, tires, even if you

539
00:20:39,600 --> 00:20:41,560
have newer cars, you still need these maintenance

540
00:20:41,560 --> 00:20:42,040
issues.

541
00:20:42,460 --> 00:20:44,860
We help drill down on that.

542
00:20:45,080 --> 00:20:48,840
Then we also go into, how do you

543
00:20:48,840 --> 00:20:49,480
buy a car?

544
00:20:50,320 --> 00:20:52,460
They'll say, I pay cash or I finance

545
00:20:52,460 --> 00:20:53,000
or I lease.

546
00:20:53,280 --> 00:20:55,840
We model that out in the financial plan

547
00:20:55,840 --> 00:20:56,180
as well.

548
00:20:56,340 --> 00:20:58,500
Plan so that you do have a new

549
00:20:58,500 --> 00:20:58,760
car.

550
00:20:59,040 --> 00:21:03,260
If someone just says, I spend $5,000

551
00:21:03,260 --> 00:21:03,900
a month.

552
00:21:04,400 --> 00:21:07,020
I look at my finances.

553
00:21:07,240 --> 00:21:09,660
I can withdraw $5,000 a month.

554
00:21:09,780 --> 00:21:10,600
I'm all set.

555
00:21:11,720 --> 00:21:13,120
They're missing a lot of things.

556
00:21:13,320 --> 00:21:15,640
We go through that with individual questions.

557
00:21:16,920 --> 00:21:19,700
Some of the questions are common sense like

558
00:21:19,700 --> 00:21:22,860
car, but some of them really make people

559
00:21:22,860 --> 00:21:25,580
think, do you plan on helping your children

560
00:21:25,580 --> 00:21:26,260
in the future?

561
00:21:26,340 --> 00:21:27,260
I was going to mention that one.

562
00:21:27,500 --> 00:21:28,520
That's usually a big one.

563
00:21:28,520 --> 00:21:29,840
I'll talk about that some of the things

564
00:21:29,840 --> 00:21:31,820
that come up in that category because it's

565
00:21:31,820 --> 00:21:34,680
broader than just a gift sometimes.

566
00:21:35,580 --> 00:21:35,680
Yeah.

567
00:21:35,680 --> 00:21:39,780
Sometimes it's ongoing support for family members or

568
00:21:39,780 --> 00:21:43,780
helping a grandkid or even college expenses for

569
00:21:43,780 --> 00:21:46,480
kids, grandkids, that sort of thing.

570
00:21:47,020 --> 00:21:50,680
Maybe those aren't really baked into the cash

571
00:21:50,680 --> 00:21:52,100
flow or the cash flow needs.

572
00:21:52,680 --> 00:21:54,500
It's just like, oh, well, it's family.

573
00:21:54,740 --> 00:21:56,900
It's a separate category.

574
00:21:58,280 --> 00:22:00,700
We like to include that, of course, to

575
00:22:00,700 --> 00:22:03,800
get a real sense of how that's going

576
00:22:03,800 --> 00:22:04,540
to play into the plan.

577
00:22:04,760 --> 00:22:10,940
Some families are extremely generous, rightfully so, to

578
00:22:10,940 --> 00:22:11,860
their children.

579
00:22:13,080 --> 00:22:15,480
But it does play a role in the

580
00:22:15,480 --> 00:22:15,960
plan.

581
00:22:16,120 --> 00:22:17,620
We want to see how that models out.

582
00:22:18,140 --> 00:22:18,240
Yeah.

583
00:22:19,080 --> 00:22:22,280
In that family category, sometimes we have a

584
00:22:22,280 --> 00:22:24,380
family or an individual with a special needs

585
00:22:24,380 --> 00:22:28,500
situation where they want to make accommodations for

586
00:22:28,500 --> 00:22:31,680
a child, say, who needs some support after

587
00:22:31,680 --> 00:22:33,840
they're gone, after the parent's gone.

588
00:22:34,720 --> 00:22:39,360
It can be sometimes unexpected where you may

589
00:22:39,360 --> 00:22:41,580
think your children are all set and then

590
00:22:41,580 --> 00:22:43,260
there's a divorce or a death of a

591
00:22:43,260 --> 00:22:43,620
spouse.

592
00:22:44,480 --> 00:22:48,680
Talking about these issues and putting a placeholder

593
00:22:48,680 --> 00:22:51,800
for those families who think it's possible or

594
00:22:51,800 --> 00:22:54,660
likely gives you peace of mind in the

595
00:22:54,660 --> 00:22:57,540
plan because if one of those things come

596
00:22:57,540 --> 00:23:00,540
up and you have a placeholder, a certain

597
00:23:00,540 --> 00:23:04,420
amount that you might spend for family support,

598
00:23:05,320 --> 00:23:07,800
it makes your financial plan more accurate and

599
00:23:07,800 --> 00:23:11,020
it also serves as confidence that if it

600
00:23:11,020 --> 00:23:13,400
comes up and you want to do that,

601
00:23:13,440 --> 00:23:16,760
if it's helpful, you know you can without

602
00:23:16,760 --> 00:23:18,540
disrupting the financial plan.

603
00:23:19,400 --> 00:23:21,400
That's just not for those unknown things.

604
00:23:21,600 --> 00:23:23,720
We put in vacations.

605
00:23:24,180 --> 00:23:25,220
You're just retired.

606
00:23:25,680 --> 00:23:29,240
Most people have some vacation goals, some travel

607
00:23:29,240 --> 00:23:31,280
goals, and we put those in.

608
00:23:31,440 --> 00:23:32,880
Other things, home repairs.

609
00:23:33,060 --> 00:23:33,960
How old is your roof?

610
00:23:34,520 --> 00:23:35,720
Oh, it's 30 years old.

611
00:23:35,860 --> 00:23:37,460
Well, I guess we should plan for a

612
00:23:37,460 --> 00:23:39,400
new roof sometime in the next five years.

613
00:23:40,360 --> 00:23:42,140
This is a long process, but we put

614
00:23:42,140 --> 00:23:43,880
them all in and it helps create a

615
00:23:43,880 --> 00:23:47,000
plan that when those things come up, it's

616
00:23:47,000 --> 00:23:49,420
almost, I call it, I haven't come up

617
00:23:49,420 --> 00:23:50,120
with a better word.

618
00:23:50,540 --> 00:23:51,560
I call it permission.

619
00:23:52,680 --> 00:23:56,360
A client will say, hey, I'm thinking about

620
00:23:56,360 --> 00:23:59,260
going on this month cruise this year.

621
00:23:59,560 --> 00:24:00,720
Do you think I can afford it?

622
00:24:00,840 --> 00:24:03,120
Well, yeah, you've planned $15,000 a year

623
00:24:03,120 --> 00:24:04,540
for vacations.

624
00:24:04,740 --> 00:24:05,680
How much is the cruise?

625
00:24:05,980 --> 00:24:06,820
Oh, $50,000.

626
00:24:07,280 --> 00:24:08,320
Well, maybe not.

627
00:24:10,080 --> 00:24:11,280
Let's model the plan.

628
00:24:11,360 --> 00:24:12,420
Let's test the plan.

629
00:24:13,980 --> 00:24:15,860
We spend a lot of time on cash

630
00:24:15,860 --> 00:24:16,200
flows.

631
00:24:17,140 --> 00:24:17,980
That's a good point.

632
00:24:18,740 --> 00:24:20,820
It's not static.

633
00:24:21,000 --> 00:24:21,700
You already mentioned that.

634
00:24:22,140 --> 00:24:25,220
If you say, oh, there is a $20

635
00:24:25,220 --> 00:24:27,140
,000 vacation I'd really like to take.

636
00:24:27,900 --> 00:24:29,540
I wonder if I can afford that.

637
00:24:30,180 --> 00:24:32,880
We have a way to answer that to

638
00:24:32,880 --> 00:24:37,320
a pretty reasonable conclusion of if it's going

639
00:24:37,320 --> 00:24:37,880
to work or not.

640
00:24:39,440 --> 00:24:41,840
Just something to reach out to us about

641
00:24:41,840 --> 00:24:43,660
and we can put it into the plan

642
00:24:43,660 --> 00:24:45,900
and see how it plays out and model

643
00:24:45,900 --> 00:24:46,820
different kinds of scenarios.

644
00:24:47,840 --> 00:24:50,000
Another topic I want to touch on about

645
00:24:50,000 --> 00:24:52,720
what we do in our annual reviews, we've

646
00:24:52,720 --> 00:24:54,680
talked about a lot, but another big thing

647
00:24:54,680 --> 00:24:55,960
that we do with our clients in the

648
00:24:55,960 --> 00:24:58,180
annual reviews is talking to them about their

649
00:24:58,180 --> 00:24:59,280
liquidity needs.

650
00:25:01,080 --> 00:25:04,120
Liquidity just means available money that's not exposed

651
00:25:04,120 --> 00:25:07,020
to a market that may be volatile.

652
00:25:07,420 --> 00:25:10,340
You could have funds in your liquidity bucket,

653
00:25:10,480 --> 00:25:11,060
as we call them.

654
00:25:11,100 --> 00:25:12,980
We call buckets, in other words, places to

655
00:25:12,980 --> 00:25:14,440
hold certain types of money.

656
00:25:15,320 --> 00:25:17,820
We want our clients to have liquidity, not

657
00:25:17,820 --> 00:25:20,740
only to meet their cash flow, but in

658
00:25:20,740 --> 00:25:22,900
the event that we have a down market.

659
00:25:22,900 --> 00:25:25,860
If you think if someone is spending $100

660
00:25:25,860 --> 00:25:29,800
,000 a year, for example, and they're taking

661
00:25:29,800 --> 00:25:31,540
it all from their investments, just to keep

662
00:25:31,540 --> 00:25:34,640
this simple, we'd offset it with social security

663
00:25:34,640 --> 00:25:36,740
or pensions or annuity or whatever they may

664
00:25:36,740 --> 00:25:40,220
have that's guaranteed, but we don't want that

665
00:25:40,220 --> 00:25:42,980
client to be having to time the market

666
00:25:42,980 --> 00:25:45,560
and saying, all right, I'm going to take

667
00:25:45,560 --> 00:25:49,540
out whatever that is, $8,000 something each

668
00:25:49,540 --> 00:25:51,180
month out of their investments.

669
00:25:52,060 --> 00:25:53,900
We want to have a liquidity bucket.

670
00:25:54,100 --> 00:25:57,040
We monitor the liquidity bucket, that's money that's

671
00:25:57,040 --> 00:25:59,180
not exposed to the market.

672
00:25:59,400 --> 00:26:03,040
They can withdraw that from non-invested assets

673
00:26:03,040 --> 00:26:07,040
without having to worry about, the market was

674
00:26:07,040 --> 00:26:09,280
down 20% a couple of weeks ago.

675
00:26:09,520 --> 00:26:11,120
You don't want to be taking money out

676
00:26:11,120 --> 00:26:13,040
when you're in the middle of a correction.

677
00:26:14,140 --> 00:26:16,280
It's too much for this episode to go

678
00:26:16,280 --> 00:26:20,120
into how we do this and the breadth

679
00:26:20,120 --> 00:26:23,020
of liquidity buckets that we use, but just

680
00:26:23,020 --> 00:26:24,720
know that this is something else that comes

681
00:26:24,720 --> 00:26:25,840
up in the annual review.

682
00:26:26,620 --> 00:26:27,840
How much do you have set aside?

683
00:26:28,180 --> 00:26:29,000
Is it enough?

684
00:26:29,520 --> 00:26:30,600
How long should it be?

685
00:26:30,900 --> 00:26:32,840
Depends on where your income comes from and

686
00:26:32,840 --> 00:26:34,660
all that, but it's something else that we

687
00:26:34,660 --> 00:26:36,220
do during these annual reviews.

688
00:26:37,400 --> 00:26:40,740
Where should that money that you need for

689
00:26:40,740 --> 00:26:41,760
retirement come from?

690
00:26:42,540 --> 00:26:46,280
In a tax-efficient manner, and where are

691
00:26:46,280 --> 00:26:47,880
we taking it from first?

692
00:26:48,120 --> 00:26:49,420
Yeah, the sequence, right?

693
00:26:49,540 --> 00:26:51,280
The sequence, exactly, yeah.

694
00:26:51,560 --> 00:26:51,660
Yep.

695
00:26:52,880 --> 00:26:56,640
We're scratching the surface here, but what we

696
00:26:56,640 --> 00:26:58,500
want to get across today is you have

697
00:26:58,500 --> 00:26:59,400
a financial plan.

698
00:26:59,700 --> 00:27:01,060
If you've done it with us, you know

699
00:27:01,060 --> 00:27:03,600
the process and you have confidence in your

700
00:27:03,600 --> 00:27:03,820
plan.

701
00:27:03,880 --> 00:27:04,820
We actually give you a number.

702
00:27:05,040 --> 00:27:05,800
We give you a grade.

703
00:27:06,460 --> 00:27:08,180
I love giving good grades.

704
00:27:08,620 --> 00:27:10,300
I think I know how teachers feel.

705
00:27:10,580 --> 00:27:12,400
People from students are really trying, but they

706
00:27:12,400 --> 00:27:13,420
don't get a good grade.

707
00:27:16,100 --> 00:27:18,000
You can have confidence that if you have

708
00:27:18,000 --> 00:27:19,740
a good grade, you can stick to your

709
00:27:19,740 --> 00:27:20,060
plan.

710
00:27:20,220 --> 00:27:22,180
You can live that life that you've earned

711
00:27:22,180 --> 00:27:23,520
from your saving and investing.

712
00:27:24,200 --> 00:27:27,900
If you don't have a great score, there's

713
00:27:27,900 --> 00:27:29,220
things that we can do to help you

714
00:27:29,220 --> 00:27:31,440
get that score up.

715
00:27:31,760 --> 00:27:34,120
These annual reviews, we certainly review the score,

716
00:27:34,580 --> 00:27:36,180
like what's changed, all these things that we

717
00:27:36,180 --> 00:27:36,760
talked about.

718
00:27:37,080 --> 00:27:39,180
Market performance plays into it.

719
00:27:39,300 --> 00:27:41,240
Your health plays into it, what you do

720
00:27:41,240 --> 00:27:42,620
with your family, all these things we talked

721
00:27:42,620 --> 00:27:43,760
about today on the episode.

722
00:27:44,280 --> 00:27:45,460
We update your score.

723
00:27:45,760 --> 00:27:47,920
The score doesn't change very much.

724
00:27:48,480 --> 00:27:50,740
People think when you get your first score,

725
00:27:50,980 --> 00:27:53,740
it's there, but people think in this market

726
00:27:53,740 --> 00:27:56,520
turmoil where I said, oh, my score must

727
00:27:56,520 --> 00:27:58,720
have went 95 to 50 because we had

728
00:27:58,720 --> 00:28:01,920
a bad year or a bad few months.

729
00:28:02,480 --> 00:28:04,060
That's why so many people, when we do

730
00:28:04,060 --> 00:28:06,680
the stress testing and they see, even from

731
00:28:06,680 --> 00:28:09,180
here, if we drop the market 20%

732
00:28:09,180 --> 00:28:13,900
tomorrow, that it still has a 90 plus

733
00:28:13,900 --> 00:28:17,180
percent chance of success, that's not too bad.

734
00:28:17,620 --> 00:28:19,700
They're usually very pleasantly surprised.

735
00:28:19,980 --> 00:28:20,140
Yeah.

736
00:28:20,220 --> 00:28:22,540
They're so impacted by the recent things that

737
00:28:22,540 --> 00:28:22,980
have happened.

738
00:28:23,720 --> 00:28:25,660
We use the Monte Carlo simulation.

739
00:28:26,600 --> 00:28:30,080
It projects a thousand different scenarios based upon

740
00:28:30,080 --> 00:28:33,520
market history, long periods of good markets, long

741
00:28:33,520 --> 00:28:34,560
periods of bad markets.

742
00:28:34,660 --> 00:28:35,900
We get a range of where we think

743
00:28:35,900 --> 00:28:37,720
you'll be at, and then we get a

744
00:28:37,720 --> 00:28:40,020
prediction and that's what that score is, which

745
00:28:40,020 --> 00:28:41,220
is zero to a hundred.

746
00:28:41,820 --> 00:28:44,280
Like any student, you're shooting for the hundred,

747
00:28:44,460 --> 00:28:46,580
but you walk out with a 95 and

748
00:28:46,580 --> 00:28:47,660
you say, I'll take it.

749
00:28:47,820 --> 00:28:48,160
Right.

750
00:28:48,600 --> 00:28:49,000
Exactly.

751
00:28:50,260 --> 00:28:51,420
We're about out of time.

752
00:28:51,500 --> 00:28:52,560
I think we did a good job at

753
00:28:52,560 --> 00:28:55,300
covering things that we go over in annual

754
00:28:55,300 --> 00:28:55,760
review.

755
00:28:56,080 --> 00:29:00,060
There's other things, like we'll ask you, do

756
00:29:00,060 --> 00:29:01,140
you have your estate plan?

757
00:29:01,460 --> 00:29:03,020
And if you do have your estate plan,

758
00:29:03,220 --> 00:29:04,940
when's the last time you reviewed it?

759
00:29:04,980 --> 00:29:06,700
So it might be more of an accountability.

760
00:29:07,020 --> 00:29:08,420
We're not going to do your estate plan

761
00:29:08,420 --> 00:29:10,760
with you, but we're more of an accountability

762
00:29:10,760 --> 00:29:11,300
partner.

763
00:29:11,300 --> 00:29:13,380
Like, well, you have an estate plan is

764
00:29:13,380 --> 00:29:14,220
20 years old.

765
00:29:14,640 --> 00:29:16,420
Let's put that on your to-do list

766
00:29:16,420 --> 00:29:17,420
to review it.

767
00:29:17,480 --> 00:29:18,400
First of all, read it.

768
00:29:18,580 --> 00:29:21,320
If it's not accurate, go back to your

769
00:29:21,320 --> 00:29:22,900
estate planning attorney to get it.

770
00:29:23,040 --> 00:29:25,160
We'll review things like life insurance.

771
00:29:25,520 --> 00:29:27,320
Now people think, well, I have life insurance.

772
00:29:28,060 --> 00:29:29,440
Why do I need to review it?

773
00:29:29,540 --> 00:29:31,700
Well, maybe it's not enough because of life's

774
00:29:31,700 --> 00:29:33,460
changes, or maybe you don't need it anymore

775
00:29:33,460 --> 00:29:35,340
because of life changes.

776
00:29:35,680 --> 00:29:37,400
So review things like that.

777
00:29:37,460 --> 00:29:39,600
We help you with making your decisions on

778
00:29:39,600 --> 00:29:43,520
when to take social security, what your risk

779
00:29:43,520 --> 00:29:47,460
is to long-term care, potential needs, all

780
00:29:47,460 --> 00:29:49,680
these things we do in the financial plan.

781
00:29:49,780 --> 00:29:51,420
And we do them every year.

782
00:29:51,480 --> 00:29:54,280
Some of them superficially because you're all set,

783
00:29:54,400 --> 00:29:57,020
or we've decided that this is irrelevant to

784
00:29:57,020 --> 00:29:57,280
you.

785
00:29:58,740 --> 00:30:00,340
But this is how we serve you.

786
00:30:00,380 --> 00:30:01,780
And this is the way to keep you

787
00:30:01,780 --> 00:30:04,240
on track so that you can stay on

788
00:30:04,240 --> 00:30:07,360
your plan and reach your goals, live your

789
00:30:07,360 --> 00:30:10,140
goals, and live your dreams happily without having

790
00:30:10,140 --> 00:30:11,720
to worry about, am I going to run

791
00:30:11,720 --> 00:30:12,300
out of money?

792
00:30:13,080 --> 00:30:14,200
Am I not going to be able to

793
00:30:14,200 --> 00:30:15,480
do something I wanted to do?

794
00:30:15,720 --> 00:30:18,740
And a financial plan and any reviews really

795
00:30:18,740 --> 00:30:20,620
give clients a peace of mind.

796
00:30:21,020 --> 00:30:24,000
So if you don't have one, you should

797
00:30:24,000 --> 00:30:24,540
have one.

798
00:30:24,740 --> 00:30:26,120
And if we can help you with that,

799
00:30:26,360 --> 00:30:28,120
please feel free to reach out to us

800
00:30:28,120 --> 00:30:30,660
and make an appointment where you offer a

801
00:30:30,660 --> 00:30:32,080
complimentary consultation.

802
00:30:32,740 --> 00:30:35,060
We'll help you create a financial plan if

803
00:30:35,060 --> 00:30:36,300
you have one, or if you have investment

804
00:30:36,300 --> 00:30:38,780
somewhere else, we'll certainly be willing to be

805
00:30:38,780 --> 00:30:40,460
a fresh set of eyes and give you

806
00:30:40,460 --> 00:30:41,360
our thoughts on those.

807
00:30:41,980 --> 00:30:43,800
To do so, you can call our office

808
00:30:43,800 --> 00:30:48,120
at 508-771-8900 and ask for an

809
00:30:48,120 --> 00:30:49,100
initial consultation.

810
00:30:49,320 --> 00:30:50,840
Russ, thank you for joining me today.

811
00:30:50,980 --> 00:30:53,240
I think we did a decent job at

812
00:30:53,240 --> 00:30:57,840
explaining a lot of information that happens after

813
00:30:57,840 --> 00:30:59,940
the financial plan during an annual review.

814
00:31:00,780 --> 00:31:00,900
Yeah.

815
00:31:01,000 --> 00:31:02,640
We like to cover all the bases, but

816
00:31:02,640 --> 00:31:02,920
yes.

817
00:31:03,040 --> 00:31:04,320
We certainly try.

818
00:31:04,940 --> 00:31:05,800
Thank you for listening.

819
00:31:06,040 --> 00:31:07,340
I hope you'll join us next week.

820
00:31:07,480 --> 00:31:10,240
Until then, keep striving for something more.

821
00:32:02,160 --> 00:32:09,380
Transcribed by https://otter.ai Revised by https://otter.ai