Category: Life Coach

Will you be able to retire? Good Question!

Imagine yourself as a 46-year-old woman married to a 48-year-old-man.  Both of you have a career.

  • Your combined income is around $250,000.
  • Savings in retirement plans totals about $400,000.
  • You would like to retire when he is 62 and you are 60.

Can you?

Unless you have prepared a retirement plan you don’t know.

There are a lot of moving parts that affect your retirement.  One of the biggest questions is how much it will cost you to live when you retire.  Each person is different; expectations for your retirement lifestyle are different than your neighbor’s.  Here are just a few of the things that factor into how much it will cost to live once you retire:

  • Your basic living expenses; your “needs.”
  • The cost of your “wants” and “wishes” above your basic expenses (travel, cars, weddings, education, gifts, etc.).
  • Life, disability, health and long term care insurance.

Then there are the other factors that determine what it will cost you to retire.

  • The age at which you want to retire.
  • The number of years in retirement.
  • What happens when one of you passes on?

What are your income sources in retirement?

  • Spousal income and, in two income families, the age at which each spouse retires.
  • Your pension benefits.
  • The age at which you apply for Social Security.

What are your personal investment assets to supplement your income sources?

  • The value of your investment assets at retirement.
  • The estimated return on your investment assets.
  • Your risk tolerance.
  • The rate of inflation during retirement.

The good news for this couple is that they have a decade or more to adjust their savings or their retirement goals.  Unfortunately, too many people leave the planning until too late.

The time to start planning is now.

Registerd Investment Advisors: 7 Services that a Registered Investment Advisor (RIA) Provides

Registered Investment Advisor Suffolk & Virginia Beach

Investing is serious business.  How well you manage your investments can make the difference between a comfortable retirement and working ‘till you drop.  Most people use a financial advisor of some kind.

Back in the day, people opened an account with a major investment firm and used a broker who would call and make recommendations to buy or sell.  They were essentially stock and bond salesmen whose loyalty was to their firms.

That has all changed.

The trend now is away from the major firms and toward Registered Investment Advisors – RIAs.  RIAs are fiduciaries whose duty is to put their clients’ interests ahead of their own.  They help people plan their future and take over the every-day investing decisions for them.

virginia beach

Registered Investment Advisor

What can an individual expect from an RIA?

  • Asset management. This means creating a portfolio appropriate to the client, making changes in the best interest of the client, and reacting to market conditions.
  • Financial planning. Organizing a client’s financial affairs.  Determining the best way of achieving the client’s objective.  Reviewing the client’s insurance and estate planning needs.
  • Reporting and record keeping. Maintaining the organization of finances.  Performance reporting.  Maintaining cost and purchase data.
  • Life planning. Helping the client uncover what they really want to accomplish and creating a roadmap to getting there.
  • Retirement planning. Providing a path to living well once the paycheck stops and people are dependent on fixed income sources and their personal savings.  Retirement is a major life change.  RIAs typically offer comprehensive retirement plans that help people decide when to retire and what how well they can live.
  • Estate planning. Leaving money to heirs and charities must be carefully planned or large portions of an estate can go to taxes or the wrong individuals.
  • Concierge services. This can include attending meetings with attorney, accountants or bankers.  It can include services such as buying cars, arranging for travel or hiring someone to pay bills.  Relations between an RIA and a client are often so close that they are even consulted on issues such are marriage or divorce.

Call 757-638-5490 or use our contact page for more information!

registered investment advisor

Advantages of Financial Advisors

What is the real value to hiring a financial advisor, and who uses them?  What is the value proposition?  What makes one car with four doors and wheels worth $300,000 and other $30,000?  Although we might have an answer, the answer differs from person to person.

Why People Use Financial Advisors

People use financial advisors for many reasons.  Some use them because they absolutely need them, others because they want them. Paying a fee for advice and guidance to a professional who uses the tools and tactics of a CFP™ (CERTIFIED FINANCIAL PLANNER™) and an experienced Registered Investment Advisor who is a fiduciary can add meaningful value compared to what the average investor experiences.

Anxious About Finances

Many middle-class investors are anxious about their finances and are not interested in learning the details of managing their money.  This anxiety often results in money left on the sidelines because they don’t know what to do or are afraid of making mistakes. That means earning a fraction of 1% at the bank when the Dow Jones Industrial Average (DJIA) is up over 25% in the last 12 months.

Coaching

There are others who are interested in learning about investing and may want to hire an advisor to “look over their shoulder.”  They want to hire an “investment coach.”

Too Busy For Investing

A third category are people who hire professionals because they are busy doing things that are more important to them: building a career or a business, being with family, or living an active retirement.  They hire an expert to manage their money the same way they hire a lawyer for estate planning, a CPA to prepare their taxes, and a doctor to keep them healthy.

Mistakes

A fourth category is people who were making their own investment decisions but ended up making a huge financial mistake.  This leads me to a story about a really smart, highly paid high tech executive who is very knowledgeable about investing; but he hired an advisor:

It’s not because he lacks the knowledge or interest, obviously. Rather, he figured out he had behavioral blind spots and understood he was at risk of great financial loss. He’s paying someone just to take that risk off his plate.

Determining your goals, controlling risk, managing portfolios well, and knowing your limitations – knowing you have “blind spots” – has led many smart people to hire an advisor.

Vanguard, the hugely successful purveyor or no-load mutual funds (that appeal to do-it-yourselfers) estimates that a financial advisor is worth about 3% net in annual returns.  They attribute this to the seven services that a good advisor provides:

  1. Creating a suitable asset allocation strategy.
  2. Cost-effective implementation.
  3. Rebalancing
  4. Behavioral coaching
  5. Asset location
  6. Spending strategy.
  7. Total return versus income investing.

How Korving Can Help

If you have an advisor but he is not meeting your objectives, ask us for a second opinion.  If you don’t have an advisor but may want one, we offer a free one-hour consultation to see if we are compatible.

A good Registered Investment Advisor is a “Life Coach.”

People who are not familiar with Registered Investment Advisors (RIAs) too often view them as stock brokers.  They are not; they are held to a higher standard and are focused on the client, not the money.  RIAs are trusted advisors who put their clients ahead of themselves.    They are fiduciaries that are skilled in the art making good financial decisions.

The Financial Advisor as a “Life Coach”

Younger professionals who are building careers would do well to find an RIA as their financial guru, a “Life Coach.”  It takes time, experience, and a high level of expertise to manage money well.  The young lack that expertise but have the biggest advantage of all: time.  They are in a perfect position to build wealth with the least amount of effort if they can lean on experts who can show them how to navigate the risky ocean of investing.  Just as important, they need a wise guide who can advise them on managing their income.  Too many people, even those with six figure salaries, live paycheck to paycheck.  Knowing what to spend and how to save is the role of the advisor.

a life coach can be found in a financial advisor.

This is very important for the independent professional – the doctor or lawyer.  Focused on building a practice, they need someone to advise them on managing their money wisely.

For The Business Owner

For the business owner, the entrepreneur, it’s even more important.  There is no career track and the challenge of building a business often results in poor money management.  Excessive debt can lead to bankruptcy, a common result in many industries that depend on debt financing.  A good advisor can help the business owner create a personal portfolio that’s independent of his business.  At the same time he can advise the owner the best way of financing his growth.

Once the business is established the owner needs guidance setting up retirement and benefit plans for himself and his employees.  This all part of the RIA’s skill set. And finally, as the business matures and the owner starts thinking of retirement, the advisor provides the guidance to transition the individual and his family to life beyond work.

That’s the point at which the coach gets the pleasure of knowing he’s done a good job as part of a winning team.

Conclusion

For more information on how a financial advisor can act as a coach for you, reach out to us through our contact page today.

Rent or Buy?

Should you rent or buy a house?  That’s a question often asked by young couples, those in the military, and people who are undergoing life changes.  The main reason that people want to buy rather than rent is because they view renting as throwing money away and not building equity.  Additionally, buying a home provides a feeling of stability.

However, there are downsides to buying.  Buying a house locks you into a situation.  If your life changes, you lose your job, or wish to move, selling a home can be difficult and expensive.  Owning a home means that you have upkeep and maintenance costs.  If you rent those costs are borne by the landlord.  The cost of rent is often less than the costs associated with home ownership; mortgage payments, real estate taxes, insurance, maintenance and all the other costs that a home owner faces.

Over the long term, owning a home has been a good investment for many families.  But more recent history has clearly shown that the assumption that a home will always go up in value is not true.  Just ask the people whose homes went on the market as “short sales.”

If you are an individual who is contemplating whether to rent or buy, keep these issues in mind.  If you’re not sure, get the advice of a financial planner who can run the numbers for you and help you make the right decision.

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