2021 EP1211 Planning Matters Year End Planning

Plan force planning matters. You welcome once again supplanting matters radio show try to shed a little light on the cob's financial issues of the bed. Have a little fun along the way, my guest today is Peter Rochon. He is a Purdue Sherry financial, investment, retirement plan, or any offers that proprietary optimize retirement plan for all his clients throughout the great state of North Carolina is also a Dave Ramsey Smart investor Pro dear X rejoin the show. Always a pleasure Scott and yet they were getting into the holiday season here so try to keep it light.

Maybe have a little bit more fun on today's program but always touching on those important financial topics. Given some tips provide some clarity trying to help people in their planning. Also, if you want to talk directly to Peter you can call him at 9193005886919, 358, 86 or go to his website www.rochonplanning.com that's rich on planning.com were the homestretch. It's been a crazy year ;-) I feel like we've been saying this every year but 2021. Sure has been a crazy year.

So what we try to keep saying and balanced during this holiday season for one now it's easy to do as I say not as I do, but were to try to keep saying this holiday season so will review a couple lists here Peter out to see what you think about them. The good folks at Ramsey solutions have a provide a list of great ways to boost your holiday budget. I will ask you what what things stuck out in this list to you but I want to start with one that stuck out to me. Number one on the list is try the four gift rule. I love that I love that and it's it's diff you if you had try to cut back on on giftgiving while still providing some great gifts.

It's four gift rule, something they want something they need something to wear and something to read. Now that rhymes what must be true but it simple and practical and really does allow you to connect cut down on that holiday budget what we would make about what you have done that for someone bought them for gifts, something they want something they need something to wear and something to read you given them value and I hope so you've given them some of the desires right so you you've really checked off a lot of boxes there and if you covered those four things you may not need to buy 100 other things. I mean I remember Christmas is where the the line of gifts stretched way beyond the base of the tree into the living room seemed like down the hallway around the corner and I remember them myself as a kid I can't say that you know I I went without.

I was pretty blessed in that aspect. Now I grew up in a single parent teacher household but somehow mom always got it done for Christmas and some Christmases were better than others, but I also remember doing it for my own son and in both instances, I remember that the week after Christmas.

Probably 90% of the toys and the stuff was just junk laying around the house didn't get played with it didn't get used. It broke almost immediately and so if you cover these things something they want something they need something to wear something to read, like maybe you don't need to get a million other pieces of of junk that will accumulate around the house and end up unused and in the trash in a month or two. Yeah, it is the law of diminishing returns as it mean if you are well aware of your financial expertise to me. The more you have of something, perhaps the less that each individual unit of whatever that thing matters so you get someone 10 books. That's great, but if you get them the one that they really want and maybe you were able to spend more time pondering what that book would be then they'll appreciate it more beer or what are some other things that sister stick out to on this list. How does how you set holiday spending goal well.

So, for one, I am as you are aware and and stated in the beginning of the program. A Ramsey trusted Smart investor Pro so I believe in a lot of the heat things that Dave Ramsey and the Ramsey team talk about Anna day-to-day, week to week, month to month basis and and over the years. I think that they have probably help more people get out of debt, build a found financial foundation and begin to build and accumulate wealth then any other financial's documented system on record so setting spending goals.

That's just maintaining the budget through the holidays right. We really should be paying attention to our budget and I know a lot of people that don't they.

They are lucky or hard-working or blessed enough to be earning more income than it takes them to cover their expenses right and so fantastic.

But it also leads to maybe not paying as much attention to the budget and expenses they need something they go out and buy it no problem. Not not really pinching pennies are watching where dollars are going well guess what, for those same individuals when they leave their paycheck they leave the job when they retire. Not only does it become important, but the change in income is that much more dramatic. So we really should be. No matter what our financials status is be paying attention to where our money is going and setting a holiday spending goal specifically is just doing that for the holidays, so it shouldn't be a leap to do that.

But even if you're not one that pays a large amount of attention to the budget to the spending, limiting yourself during the holidays is going to prevent pain into future months. The following year, it's going to get you in a better situation come January you will have those credit card bills to pay off and you know you can you can maintain and stay on track with spending and savings goals are some good methods, techniques that you know about for someone to cut to save up for Christmas all year long, as opposed to paying for Christmas last Christmas next year and end redoing the cycle all over again. Yeah well unfortunately that's the way Americans have actually been taught to do it pay for last Christmas next year that's going to credit credit card going into debt. We don't want to do that. There used to be something offered through a lot of employers called the Christmas club. I remember that it was up. That's is a fairly interesting concept is basically you budget a little bit of money to go to a separate savings account right out of your paycheck and then it's a bear for you to buy your holiday gifts and goodies and that was a pretty interesting concept. It was very useful. I wish that the Christmas club money had earned a little bit more throughout the year had been put to some some better use rather than just being kind of cold storage for your dollars but you know if you don't have that Christmas club it at your employer, you can do the same thing with your personal money set up an extra little savings account at your bank and just every month or every week or every paycheck move a few dollars over that and then you don't have to use the credit card you've got the money that's in that account earmarked specifically for an intended purpose which is to buy the Christmas gifts and and bring joy to your family and loved ones.

Yeah, I mean Stecker you could make your own Christmas club essentially end and if in an ideal world to your appointment make it so it pays you a little bit more interest or or or avoids fees or whatever, in the most effective way out know you know there there are other things that we can do. You need to earn a little extra money plenty of seasonal jobs out there on me no matter where you turn it you see. Five. Help wanted signs on every corner, so you could go out and earn a little extra money. A lot of people I know. Bake at bake there there Christmas gifts have something nice to eat is always appreciated. Whether it be sweets or breads or what have you through the holidays we we love those things you can make your gifts know that that handmade heartfelt gift may be the one that is the most appreciated. Even if it's just an ornament to hang on the tree for next year to remind whoever you're getting it to that you love them and continue to have left them no, those are the kind of great things that that I really appreciate. I love experience gifts just now, I am time with my my loved ones. Those are the things that I like knife I try to give those kind of things to others as well.

This this holiday season is a great time to cut a reset your your financial situation. Maybe your situation with your advisor. If you or someone who may be does not have a financial advisor does not have sufficient financial advisement this time of year. What would you are the type of questions that you would ask him. Maybe if you're betting financial advisors this time of your work. Whatever questions would you ask it and why would you ask them listen. Money is important, but ultimately it is not the most important thing is a tool that supports the values that you have that are the most important thing and so you want to make sure that your your advisor, your source of advice aligns with your beliefs and your values.

So really, the initial interviewing part of this should be, who are you tell me some of your experiences with money. Why do you believe that money is important, what does money mean to you. What are some of your good or bad experiences with money. You know that I think those are conversations that advisors and clients should have in this question should go both ways like that information should be shared reciprocally so that both people know that they've got similar values with money so that the planning can be done together. Now look, I'm not can hop into somebody else's profession and be able to to do what they do on a high level. Day one and for most people seeking financial advice. They don't know everything that I know because I'm in this profession day today but at the core of it. The values around money should be in alignment. There you know you and he should get a good feeling that I'm talking to somebody who believes a lot of the same things that I believe they may be in a different kind of financial situation, potentially, they may be 20 years older 20 years younger than me, or have more or less, and end up depending on what side of the advisor client relationship ought all your on you decide which one of those is important you but but the values I think are are really the most important thing beyond that, I think that you need to talk about big events in your life.

I think you need to talk about where you are in, where you want to be. If you've already done some planning what the results have been from that what you envision to be your lifestyle when you retire. Not everybody, believe it or not, envisions retirement to be the same thing. I talked to more and more people all the time that they want to keep working in retirement. I like well will so is that retirement yes it's retirement because I'm not going to do what I've been doing for the last 30 years.

I'm no longer going to do what I have to do. I'm going to work the way that I want to work. Some people don't want to work at all.

They'd they'd rather gardener travel or sit on the La-Z-Boy and read books. Nothing wrong with that but defining what that means to you and what that looks like to you is going to be an important part of that process.

If you want to let somebody else do the worrying for you. If you're not a financial professional, and don't want to become one when you retire. That's a reason to start having those conversations. Some people have had that relationship but aren't necessarily thrilled with the results that may be a time to talk with an advisor, but those are the things that that conversation really should should be about, and at its core, really all about education, how do I know more about my money and what my money is doing form a study show that you those folks that avoid going to the dentist there reason for avoiding that is that they haven't been to the dentist in a long time and they're kind of afraid of what they're gonna find out what you say to the person who kinda has that relationship with their financial advice that they haven't.

They put off getting the proper planning or being proactive for so long that they're almost afraid to talk to someone about what they're getting here.

The fear is real and I I get it. I understand that I'm worried about what I may uncover I am scared of going to the dentist because I have not been to the dentist and so long they're going to tell me that I have cavities listen if you don't know that problems not going to get better as good as guys we are notoriously slow to ask for directions and go to the doctor just kind of the facts there. Whether that's it. Whether whether that's a wild stereotype or not, whether you it is what it is we don't get less lost by not stopping and asking for directions. We don't get more healthy by not addressing existing health issues. You don't get in better financial shape without addressing some of the problems. Some of the behaviors and formulating a plan so I will get over that inertia. I would encourage people to be proactive and I know this is the time of year where other things are higher on the priority list but they really shouldn't be. We want to move into 2022, with a plan in place and and knowing that were making solid financial progress will that doesn't start on January 1 or second that that starts now and I have another analogy that I've I've heard if if I wanted shade in my yard the best time to have planted a tree would've been 30 years ago, but I don't have shade. Now the best time to plant the tree is today right if if I want shade. Eventually I need to go ahead and start planning that tree today were soon as possible.

Just because I didn't previously I can't beat myself up for that. I probably can, but I shouldn't. I should just start where I have the ability to start now.

Knowing what I know now that you mention at this time of year is is so fraught with both the stress of and stress can be good and stress can be bad. I mean there there is it's it, that's part of the fun and the anxiety of this time of year that the idea of letting someone else do the worrying for you. That sounds pretty attractive for me as someone who is seen overwhelmed with not just every day issues, but the holiday and specific codebook of value is that for the clients that you have but that you're doing the worrying for the well.

I see this most commonly as people are making the transition to retirement and I do see this across the spectrum, but particularly as as somebody who may have done a very good job in working and earning money and then putting some of that money away and saving in building and accumulating when you leave the paycheck behind it is a whole different set of worries and so we don't want to say whoops I made a mistake with retirement will better luck next time it'll go better next time know there's an old saying smart people learn from their own mistakes and geniuses learn from the mistakes of others. Well in retirement. We don't have the luxury to just be smart and learn from our own mistakes. We really need to be geniuses and learn from the mistakes of others. But if you don't know the mistakes that others have made, and often times when were working week, we haven't really focused on a lot of what are the retirement mistakes others have made.

We may not know what those are, nor how to avoid them and that is the benefit of letting somebody else do some of that worrying for you and I'll let you know when I do that worrying. I'm worried like I II could somebody situation and I look at Murphy and Murphy's Law as though it's optimistic right what can go wrong will and it's probably going to go very wrong and right at the worst time and if that happens, what's the outcome right and and we poked through that on paper during the planning process so that after were done. It doesn't sound like that's a whole lot of fun during that process, but after were done hey now, we don't have to spend a lot of time worrying about those because we prepared and plan for them. We not now know what the worst case and scenario may be, and how we will handle it if it does happen that is a true plan for the worst and hope for the best kind of situation and if we land somewhere in between. We were ready for it and we are comfortable and that's that's really where letting somebody else do some of that worrying happens in the planning process. I don't have to worry for a lot of my clients day-to-day. No there there are some things that I worry about in the financial world. II don't love seeing this inflation that were going through. I.e. I worry that there may be a market downturn in the future. I worry about what what happens if taxes go up or their healthcare events that my clients go through.

I worry about no there there legacy if they pass away there. There's worry they are for specific events, but we have planned for them. So it's not like we gotta spend every moment of every day.

Having those in carrying those worries and I think that's what my clients experience by going through that planning process with the professional as well. Pretty smart if you want to talk to Peter Sean directly about these issues. Best case scenarios. Worst case scenarios all the scenarios in between. You can call them at 919, 300-5886 Peter you have.

If someone does have a relationship with a financial advisor. What are some of the red flags may be that they should be thinking that maybe they should. They should change their relationship or or find a different financial advisor where some of the things to keep to keep an eye out for so a few of the big ones. If all the conversation pertains to his rate of return and and nothing else is really been discussed as far as your goals are your life. What what money means to you.

That to me is a little bit of a red flag and I love rate of return is much as anybody but but but it's it it's got to pertain to what your specific goal is with your money. You can have a fantastic rate of return in the wrong place and it does you no benefit. You can have a moderate rate of return in the right place and you didn't need to take unnecessary risks to to achieve your goals in addition to that, I think that if you have not heard or talk about the tax implications of your investment it if if it's been all about the investments and the growth but not about how you're actually going to be taxed on this money in the future. That's like the tip of the iceberg that sank the Titanic on down the occasions that something is is missing that you are missing the picture. If if you are within earshot of retirement and your advisor hasn't talked to you works spoken with you or discussed Social Security claiming strategies or Medicare or long-term costs and expenses like warning red flag indicator that you are missing half the story in and look there are a lot of good accumulation advisors out there but not every advisor is everything to everybody right and and and there are a lot of advisors that are specifically geared what they do is for the first half of the game in accumulation while your paycheck supports your standard of living and your ability to invest a lot of people haven't thought about that, but the paycheck is what supports the investment portfolio. Yet you never done the other most most of the time the investment portfolio during the accumulation years has not supported the paycheck. Well that is that the specific focus of a different group of advisors. Often times the same advisor is not well-equipped to handle both they don't specialize in both areas right and you know I've got a general practitioner. Dr. but if I've got something specifically wrong with my eyes or my heart or my bones. They they refer me out to a specialist and that sort of in the financial planning world. There are growth in accumulation specialists and then there are preservation and income, and retirement specialist and you really at some point needs to get that that transition through a second opinion review and and talk about that second half of the game so it's not it's not even that is anything good or bad, necessarily about the advisor. Your situation may have changed just through the stages of life to matter low. I see a lot of people who have done a fantastic job with great advisors right. The plans not complete right they have done nothing wrong.

Up to this point, it is just moving to the next phase of planning and that that that takes some work and that takes a little bit of guts to understand that hey, the person that has has done well for me may have done absolutely nothing wrong but it's time to double check and make sure that no no hole has been left unaddressed.

No stone has been on turned in what is next to come right this is planning it's not reacting. So we gotta look forward and be proactive and prepare for what's next. Some folks might feel obligated to the person that they've had a long and end like you said may be very fruitful and successful relationship with what are some ways where some appropriate ways. What are some tactful ways to cut. Start that conversation and not necessarily with the choice already being made that you're going to move on because starting to situate the conversation about changing strategies, or perhaps in an extreme scenario finding a different advisor. What are some ways to do that delicately and and you know we have to do what's best for us. So wow there may be a very good business relationship and maybe even in some cases personal relationship.

We also have to look at our personal situation and make sure that were doing the best things for ourselves moving forward and as is it a fiduciary advisor when I'm providing advice to clients.

My responsibility is to give them the advice that is best for them. So we've got to make sure that a we are dealing with that fiduciary advisor. That being there.

Their advice is geared not only to where we are today, but to to our future. Some ways to address. That is, hey, you know, we've made great progress we've made great returns. We haven't talked about tax implications.

We haven't talked about order of imp operations in creating income. We have talked about Social Security. Are these areas that you can help me address or do I need to speak with somebody else that's one area or you may have already gone out and got the education and and realize that those are areas you do need to address. There's nothing wrong with taking some questions back to a current advisor. If you've got a relationship with them.

There's also nothing wrong with moving on from a current advisor. If you feel they have not adequately prepared you for those next steps.

So it's it's kind of a personal case by case basis.

We we never, never forbid anybody from having a conversation with the person that has done well for that in itself would be a red flag. Yeah, you can't go back and talk with that would be a red flag on. I don't think that you necessarily owe it but a lot of people do feel like it is at. At the very least a courtesy to an advisor when when moving accounts and there's nothing wrong with that. Also, Scott, there is nothing that says you have to move every dollar that you have, to a single advisor and and we do not require exclusivity. In fact, I can be I can be a unaffiliated party providing advice on accounts have to manage accounts personally. If you've gotten advisor that has done well managing accounts and you just want to come and get advice that's the difference in fee-only and fee-based that advisor may be getting their compensation and being paid based on the amount that they are managing and I could be compensated based on the advice that I'm providing or if you want to move accounts over. I can be compensated based on managing the accounts. But if you got $1 million with them. There's nothing that says you have to move overall million dollars. You know, if we decide that you want to or three advisors and a lot of people with over $1 million do have multiple advisors there's there's nothing wrong with any of those things and if somebody tells you there is something wrong that is again a red flag right it would probably be important to tell if you did have multiple advisors tell each advisor that you have multiple advisors so they can kinda be aware. Oh, this is a more aggressive person is the more conservative person. This is what have you. I actually have that conversation pretty pretty often. I do not require exclusivity. But what I ask is if you've got other accounts, other advisors, other things going on that I am made aware of it so that when we are putting the plans together. I'm not duplicating it.

I'm not working against it. There is not problems within the plan because of unknown factors or accounts or amounts that are out there. You know it's it's not a problem that you've got multiple accounts in different places, but it is a problem if the plan does not account for all of them while well that's great stuff that's some good food for thought from Peter Sean there that maybe you can ladle on top of your holiday smorgasbord this year. If you want to talk directly to Peter. His number is 919300586.

That's 919, 358, 86 or go to his website www.rischonplanning.com Rich Anna planning.com is how it's spelled Peter any final thoughts before we say goodbye for the holidays. Here got some great checklists and Sanders got his list. He checks it twice for your financial progress and well-being. Why don't you have a couple lists and check them twice. We went through a couple already, but the 12 questions to know if you are ready to retire. I think that that is something that everybody within the window of retirement. If you are confident that you have to have answers to all 12. These you're probably in pretty good shape if there's a single one of them that you don't have a confident answer to. Then it probably is a strong indication, it's time for you to get a review so if you like that.

It's a one page list of 12 questions to know are you ready and it's great to go over on your own time.

If a coworker has been talking about retiring handed to them, a family member or friend. Love one spouse.

What have you. It would be good food for thought for them or for yourself to go over and then we also have the 2022.

Financial and retirement planning checklist. This is about 30 items that you just go through and you check off from an income and investment attacks, healthcare, and then a a legacy and a milestones perspective all things that I think are important for people to know and be aware and see where they are in the financial progress so if you like your checklist so you can check him twice, give us a call and were happy to email is out to you. 919, 300 586 is the number and that advice Peter much like the trees that many of us will have our houses this holiday season is evergreen, thanks so much for joining us on planning matters radio will see you next time. This is been planning matters radio content of this radio show is provided for is not a solicitation or recommendation of any investment strategy you weren't purchasing investment tax or legal advice from an independent professional advisor. Any investment and/or investment strategies mentioned involve risk and possible loss of principal advisory services offered through virtual capital management as a registered investment advisor. Duty extends only to investment advisory advice but does not extend to other activities such as insurance or broker-dealer services advisory clients are charged a quarterly fever as a management belligerent product pay a commission which may result in a conflict of interest regarding compensation