Author: Marcos

Baby Steps for Dave Ramsey Fans

We like a lot of things that Dave Ramsey has to say.  Last year Stephen joined the Dave Ramsey SmartVestor Pro program, where people who are ready for baby step 4 can contact investment advisors who are familiar with and aligned with Dave’s process.  Ramsey’s Financial Peace program has been presented in many area churches and we have conducted several of them ourselves.  At the core of Dave’s program is a seven-step process to eliminate debt and build wealth. 

Ramsey is a student of human behavior.  He calls out people who get into financial difficulty by “running around buying things they couldn’t afford with money they didn’t have to impress people they didn’t even like.”  He tells people to “live like no one else today, so you can live like no one else tomorrow.”

Because we get referrals from Dave’s program, we have met many people who are debt free or have at least gotten their debt under control and are saving rapidly but are not totally sure about the next step.  They are putting money aside monthly, but they are not familiar with the mechanics or intricacies of investing.  Their savings in the bank are getting almost no interest.    

That is where we come in with our decades of investment and financial planning experience.  Part of our job is to teach and educate, helping to alleviate some of the fear, mystery and complexity of investing.  We listen to our clients, identifying their goals and concerns.  We offer them an opportunity to get a personal financial plan.  We help them establish the right kind of accounts they need in order to achieve their goals, including individual accounts, IRAs, Roth IRAs, 401k accounts, college funding plans or trust accounts.  And we create and manage investment portfolios customized to their goals and needs. 

Once the accounts are in place and the money is invested, we monitor their performance, make appropriate corrections and provide regular reports on their progress toward their goals.

We are a local, family-owned small business and treat our clients like family.  We believe in another one of Dave Ramsey’s sayings: “If you wouldn’t want your mother to buy the item or the service then don’t sell it.”   We realize that finance and investing is confusing to many people, so we watch out for our clients, advising them as if they were a member of our family who was asking for our help.  If you have questions about investing or financial planning, schedule an appointment to meet with us either in person, on the phone or via video conference.

While Changing Jobs, Simplify Your Financial Life

How many times have you said to yourself that you wish that investing was not so complicated?  It is a fact, investing is complex.  There are a huge number of choices and decisions that need to be made, investing becomes complex.  On top of this, unless you are an expert, the terms used are seldom clear and often hard to understand.

One of the best times to meet with a financial advisor is when you change jobs.  An advisor can often provide advice about benefits packages offered by your new employer.  They can also help you make sure that your beneficiary designations are correct and provide advice on your life and health insurance needs.  They can explain the investment choices in your new employer’s 401k and tell you how much you should contribute to take full advantage of your new plan. 

This is the ideal time to take care of something known as “orphan” 401k accounts.  When changing change jobs, people often leave their 401k accounts behind.  Changing jobs involves lots of paperwork: personnel forms, tax forms, benefit health insurance forms, retirement forms, etc.  This is often the time people do not want to go to the trouble of transferring the old 401k or rolling it into an IRA.  That means that the job-hopper often leaves a series of “orphan” 401k plans behind; each one of them representing a part of their retirement savings.  A financial advisor has the experience to guide you through the process.

When we first meet new clients, we often find that they have accounts with several investment firms.  Some do this because they believe they are diversifying.  In reality, that’s not what diversifying means.    They are just complicating their lives unnecessarily. 

Changing jobs is an ideal time to consolidate your investments, create a formal retirement plan and review your estate plan to ensure your family is taken care of. 

This is the role we play in our clients’ lives.  In fact, we have written the book on it: Before I Go, complete with a fill-in-the blank workbook. Before I Go Workbook

If you have recently changed jobs or are planning to change jobs soon and you would like this kind of guidance, give us a call us for a free introductory appointment. You will be glad you did.

Looking Back, Looking Ahead

2020 was a momentous year.  It was dominated by a new kind of war: a war against an invisible enemy that fought most acutely against the sick and the elderly.  It caused fear, unemployment and temporary shortages.  It was a war that tested the American people and the American economy. 

The good news is that we are winning; the American economy stood the test and survived.  The government’s initial reaction to the COVID-19 virus was to close schools and businesses and ask people to stay home to “flatten the curve” so that hospitals would not be overwhelmed.  The economy slowed dramatically, and the stock market dropped by 30%.   

Reacting to widespread economic distress, the Federal government passed the CARES Act, injecting several trillion dollars into the economy to protect jobs and put money into the pockets of workers and small businesses.  People used technology to work and learn from home. 

On the medical front, the government created “Operation Warp Speed,” a public-private partnership to develop vaccines and therapeutics to combat the virus in record time.    

As we learned more about the virus, businesses began re-opening and people began very slowly returning to more normal lives.  The economy achieved a record 33% annualized growth rate in the 3rd quarter, giving the U.S. a V-shaped economic recovery.  The stock market also soared, reaching record highs despite continued lockdowns in several important states. 

We referred to this as a war because it resembled the year following the surprise attack on Pearl Harbor.  Despite a string of defeats, the American people went on to win a decisive victory and the American economy rallied.  The attack of COVID-19 has been a test of the American people and the free market system.  We have survived the test and are confident of a looming victory over this enemy.

As we write this, the Presidential election is still undecided.  In Congressional elections, Republicans picked up some seats but the House of Representatives will remain in Democrat hands.  Democrats have picked some Senate seats, but Republicans will hold a majority.  This means that no matter who is President, the odds are strong against any radical changes in domestic policy.  The American people have voted for stability.  Free enterprise, entrepreneurship and great American companies will continue to thrive.  There is a lesson hidden in all of this for investors: don’t let your politics influence your investment decisions. 

As we close out the year and approach the Holiday season, we count our blessings.  For those who are looking for some guidance as we approach 2021, we invite you to call, email or drop by.  We look forward to meeting you.

While Changing Jobs, Simplify Your Financial Life

How many times have you said to yourself that you wish that investing was not so complicated?  It is a fact, investing is complex.  There are a huge number of choices and decisions that need to be made, investing becomes complex.  On top of this, unless you are an expert, the terms used are seldom clear and often hard to understand.

One of the best times to meet with a financial advisor is when you change jobs.  An advisor can often provide advice about benefits packages offered by your new employer.  They can also help you make sure that your beneficiary designations are correct and provide advice on your life and health insurance needs.  They can explain the investment choices in your new employer’s 401k and tell you how much you should contribute to take full advantage of your new plan. 

This is the ideal time to take care of something known as “orphan” 401k accounts.  When changing change jobs, people often leave their 401k accounts behind.  Changing jobs involves lots of paperwork: personnel forms, tax forms, benefit health insurance forms, retirement forms, etc.  This is often the time people do not want to go to the trouble of transferring the old 401k or rolling it into an IRA.  That means that the job-hopper often leaves a series of “orphan” 401k plans behind; each one of them representing a part of their retirement savings.  A financial advisor has the experience to guide you through the process.

When we first meet new clients, we often find that they have accounts with several investment firms.  Some do this because they believe they are diversifying.  In reality, that’s not what diversifying means.    They are just complicating their lives unnecessarily. 

Changing jobs is an ideal time to consolidate your investments, create a formal retirement plan and review your estate plan to ensure your family is taken care of. 

This is the role we play in our clients’ lives.  In fact, we have written the book on it: Before I Go, complete with a fill-in-the blank workbook. Before I Go Workbook

If you have recently changed jobs or are planning to change jobs soon and you would like this kind of guidance, give us a call us for a free introductory appointment. You will be glad you did.

Preparing for the Biggest Transition of Your Life

Last month we wrote about one of life’s major transitions: changing jobs.  We recommend using that as an opportunity to organize and simplify your life. If you want a copy of that article, call me, or send me an email.

This month I want to talk about a much bigger life-changing event – your final exit – and what you need to do to care about those left behind.

One of the key roles we play in our clients’ lives is to ensure that when they pass on, those left behind are cared for and that their financial affairs are properly managed. 

Everyone is different but here are some of the questions we help our clients resolve in discussing their estate plans

  • Who gets your physical property: your home, car, collections, etc.?
  • Who gets your bank and investment accounts?
  • Who are the beneficiaries on your IRA and other retirement accounts?
  • Do you need life insurance and if so, who is the beneficiary?
  • What is going to happen with your pension and social security income?
  • Who will manage your investments if you become incapacitated or are no longer here?
  • Where are your estate documents?
  • What is the difference between a will and a trust?
  • What is an advance medical directive, and do you need one?
  • What is a Power of Attorney and do you need one?
  • Who will pay the bills when you no longer can?
  • What are your basic living expenses, and can your surviving spouse afford them?

When we began our practice over 30 years ago we were surprised at how many people had not prepared adequately.  As a result, those left behind often spent months trying to understand the departed’s financial affairs.  To help our clients we wrote a book to answer these questions.  It is called Before I Go.  We also created the Before I Go Workbook to give people a fill-in-the-blank guide. 

To order from Amazon, type “Before I Go Korving” in the search bar.  Or you can come to our office for a discounted copy.

If you have questions about financial planning, estate planning or investment management please call for an appointment.  We are always happy to be of service. 

The News is Bad, the Markets are Up

What a year.  We are living in an amazing time.

If we had told you at the beginning of this year that the S&P 500 would be up 3.5% and the NASDAQ up 25% by the end of the third quarter, you would not have believed us.  Heck, we would not have believed us!

COVID-19 has altered, in many ways dramatically, the way that we live our daily lives.  It has also had a huge impact on our economy due to decisions made by our government.  It is one thing for a Fortune 500 business to have hundreds or thousands of their employees switch to working remotely.  However, a local restaurant owner with only a handful of employees cannot go “remote” and cannot shift to a take-out only or partial capacity model without a significant drop in revenues.  Small businesses are the backbone of the economy.  Economists estimate that there are 30 million small businesses and they provide employment for about half of the American workforce.    

During the second quarter, as the economy shut down, economic activity dropped at a 35% annualized rate!  During the third quarter, as the economy gradually began to open back up, the economy is rebounding at about the same rate.   This will be the fastest increase in real GDP for any quarter since at least World War II.

We have just lived through the strangest recession and recovery we have ever seen.  Because it was a government-created recession in reaction to a health and medical emergency rather than an economic issue, we have seen an incredible V-shaped recovery to this point.  However, looking forward we do not believe it will continue to be V-shaped from here.  The rate of economic growth is going to slow from what it was in the third quarter.  Economists predict that it will take several years for the economy – including employment – to get back to where we were in late-2019. 

Despite the virus, the lockdowns, election risks and headlines, the stock market has continued to march upward.  The primary reason is that aggregate corporate earnings are rising, mostly led by several huge technology companies, and interest rates are near zero. 

Ignore the noise.  Many economists are predicting that corporate earnings next year will equal or exceed all-time highs.  Stock market investors believe that higher profits and lower interest rates outweigh the risks.  This is the basic reason that stock prices continue to rise. 

With this as background, we continue to be cautiously optimistic and our portfolios are constructed to participate in market advances and cushion market declines.  We welcome your questions and comments.

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