7 Deadly Sins & Retirement Planning

Welcome to Mr. Stillman's opus sets judged over the course is here. As always and today we are talking about the seven deadly sins and John again way to get in this conversation number one of the list. Seven deadly sins, pride, envy, raft, greed, sloth, gluttony, and lust and will start with pride. And of course how they relate to your retirement plan exactly yeah I'm a Manchester though so pride we often see when people essentially are too proud to get help. Or maybe they come to get help. But there too proud to ask questions that they know they need to ask for like it's questions that they should know the answer to. So they just don't ask.

Or maybe, if an advisor is explaining something to them and they don't understand it, they don't ask for clarification because you're too embarrassed.

There are different types of personalities that are more likely to be this way than others. I have some clients who will interrupt me midsentence if they need me to repeat something but then I have other people who are so there such people pleasers and peacemakers that they feel like it's creating conflict to say wait a minute. Can you explain that again and I think that's a form of pride gets in the way of you really understanding what's going on with your money is a set for some people it's it's the pride of say well I can do this myself and the fact of the matter is you may be able to but I do have one client and I think this is really wise on his part. He was in his mid 60s and he said look I can do this myself.

I like doing it myself.

I've done a good job over the years of doing it myself.

However I'm 67 I recognize that 10 years from now, I'm probably not going to have the mental acuity to be able to continue to manage all these investments myself and make the best decisions that I can and so I would like to go ahead and establish a relationship with somebody that I can trust. When I get to that phase of life and so that was actually really bored looking on his part.

I thought to come to that conclusion, but you most people and can operate that way.

Most people say well I can do it myself and if I ever get to the point that I need help. Well, I find some help in well often is absolute too late. There maybe everybody should take a page out of David reference book David Ruffin the temptations too proud to beg her to go into pride, ask questions, envy, how does that and that's one of the seven deadly sins envy what you do that so a lot of times people are comparing their investments or the size of their 401(k) to maybe their neighbor or other people at work and you know they're trying to see who's got the bigger balance in their accounts and the fact of the matter is it doesn't matter what your neighbor has, because they might have a completely different lifestyle. They may have completely different income streams. I got a client who's just stressed out to know in that she only has $750,000 in her neighbor next door has 1.5 million have twice as much money and it freaks her out but she has two rental properties. She's going to have a big state pension when she retires her neighbors have none of that. So they need more assets and so people get caught up in comparing account balances, or maybe even comparing performance in all my account hasn't been doing much the last couple years my my neighbor, my friend at the gym is been making a lot on is my my buddy at work is really been making a lot of money last couple years. What may be that person's a different phase of life. Maybe somebody's 45 they're taking more risk in the market and they are experiencing more the run up that we had for the last couple years if you're 65, you can't really afford to be taking that risk. You need your investments not every single dollar but you need a decent percentage of your investments probably to be a little more conservative.

So you just have to be careful comparing yourself to other folks were talking about the seven deadly sins when it comes to retirement planning. We been through two of them so far, pride and envy.

Next on the list. Number three is wrath yeah and I'll see people make decisions out of anger that are it's kind of the cutting off your nose to spite your face kind of situation they will actually hurt themselves just to get back at somebody from a financial standpoint so as an example somebody came in here just a couple months ago and he was in a situation where he got into this variable annuity that somebody had sold and I think within three or four months of getting it he realized it was a bad deal. Well we called up the variable annuity company figure out exactly what his fees are exactly what it did and didn't do, and then he was even more unhappy with it, but it was a situation where his surrender fees were pretty high to get out of accusing to be penalized if you can leave the money in for a certain period of time. That's all his work and so he was actually willing to lose a ton of money to take the investment out to cash it out instead of just sucking it up and leaving it in until the end of the term and saw I was begging him to not take the money out because he was gonna lose so much in penalties but he was so ticked off at the other advisor who had sold it to out of spite. He was willing to hurt himself thinking that he's hurting the other guy in the process and so you know, I don't see wrath necessarily a lot when it comes to financial planning, but situations like that can manifest themselves in that you just have to be really careful so it does make a lot of sense think like that, pride, envy, wrath. Next on the list. This is greed well get crazy when it comes to their money. That's an easy one, and we see all the time when the market is running up like this. I have so many clients who you'll three or four years ago we put together a portfolio for them. That was relatively conservative because they're going to be retiring in the next few years and it takes constant reeducation to say what remember. Why do we do this, it's because we can afford the risk. Well, a lot of people maybe their 401(k) is more aggressively invested in nursing their 401(k) really doing well in the market environment that we been in and so now there wanting to change their more conservative investments that here. To be able to capture some of that game and that's greed taking over your seeing all these games out there. The market you say. Well let me get that with all my money well again if you're close to retirement. You can't afford that kind of risk with all your money.

We set up the plan initially with a very clear strategy and clear mission in mind and we can't just up and change that on a whim.

Just because the market is doing well right now that's the cycles that the market runs in as we get closer and closer to the top and releasing all-time highs almost weekly for the last couple months, usually when were in an environment like that we see a lot of greedy decisions start take over and I don't mean greedy from the standpoint of you know your ear trying to hoard as much money as you can and step on mother. That's not what I mean, it's just that at some point you need to stop focusing on maximum investment returns with all of your money you're listening to Mr. Stillman's opus and I have the conductor sitting down here actually talking about the seven deadly sins. We've been through pride, envy, wrath, greed, and next on the list. John should be here what you're safe about this sloth yes so sloth, laziness essentially hanging upside down.

Also that I don't see that as much but sometimes, so we usually see this manifests itself really in the form of procrastination. It's so easy to kick the can down the road not make a decision if it doesn't feel pressing right now. Well, let's make the decision another day and I'm guilty of doing that in many phases of my life so it doesn't surprise me when I see people doing that in their financial life. But I want to ask about sloth before but put it on her thought and put it off. Somehow I got around to it.

Just one glad you finally pulled the trigger on that but so often it's your people get scared and intimidated by the idea of financial planning, but the reality is, a lot of cases if you'll just pull the Band-Aid off and do a little bit of work. It makes so much easier down the road and then you have the stress lifted off your shoulders of not knowing where you stand in the stress of worrying about am I going to have an offer not if you just go ahead and do the planning upfront. It makes it a lot easier down the road so sloth comes back to bite you. When you put off too long and then you know maybe you miss out on some opportunities. Are you do get hit by this market crash that he could have avoided if so many things can happen.

Okay, next on the list seven deadly sins gluttony. What you have to say about that when John saw gluttony. Of course, that's when you if you keep eating and eating and you can't get enough of something and I've seen this happen with folks and certain stocks. Or maybe even industries so that this is essentially what happened in the.com crash right people were being gluttons for technology and telecom stocks and because those two sectors were such a massive percentage of the average portfolio when those two sectors crashed even though almost everything else in the market was fine during that three year. Those two sectors crashed because people have been gluttons on those two sectors almost everybody lost money. So if we hadn't been gluttons on those couple of areas of the economy probably would've made about 8%. Through those years, instead of losing 40 or 45 so you just have to be very careful of you know, just because something is doing well right now we don't want to binge on that particular thing. We still need to be well diversified. We still need to have a lot of different things happening with our money to be sure that were not exposed to too much risk.

Mr. Stillman says there are seven deadly sins when it comes to your financial planning for retirement, pride, and being wrath, greed, sloth, gluttony and ability for this one. Want to hear this lust what he think so. This kind of ties in to some of the other ones that we talked about the worse he lost in the financial world is people lusting after big returns right so anyhow I really if I can average 8% a year for the rest of my life on the money. You know that I really believe a lot of the kids are. You know if I can lust after that return for the last 10 years. My working life. I'll have this much when I actually retire when the reality is we can't have all your dollars exposed to that kind of risk.

Like I said before, some of that money.

The money that you're going to need for income within the next few years.

We can be chasing those kinds of returns. We really need to dial back the risk a little bit. Be sure there's more optimized for protection and income so that when you retire you know that the monies there so don't be lusting after the big returns if you're retired or getting close to retirement. Again, if you're 3704 take the risk.

You got a nice long timeline on that money. Most of our clients on 37.

Most of our clients are 57 or 67 and lusting after big returns. Now you will be doing at that phase of your life. While John the seven deadly sins. To recap, pride, envy, wrath, greed, sloth, gluttony, and lust. You have it.

John will be glad to talk to you about any of these come in for comfortable conversation. This is been Mr. Stillman's opus over everything was melodic and harmonious to your ears today. Thank you very much for joining him run sucks