2022 EP0108 - PLANNING MATTERS RADIO - NEW YEAR

Plan planning matters. You welcome once again supplanting matters radio I'm here once again with our guest Peter Mershon. He is a Ramsey trusted smart investor wrote the author of understanding your investment options and he is a fiduciary financial investment and retirement planner serving clients throughout the great state of North Carolina dear are you doing today I'm doing well. Scott, thank you very much and first time didn't connect.

In 2022.

Happy new year to minute. Hope yours off on the right foot. It is great. It's really great to talk you can get through the holiday rush. Now is, it's the new year hard everybody breathes a sigh of relief.

Although a lot of resolutions may have been made and broken already. Today were going to talk a little bit about some ways that you can keep some of those resolutions and common financial goals. How to follow through on them. Be smart with them and then what the outcome of having that plan is going to be having a plan to achieve and accomplish those small steps that can make a big difference over time. Here I mentioned that your Ramsey trusted smart investor Pro can you take us to maybe some of the changes going over that, but that's nomenclature yeah really absolutely would love to. So Dave Ramsey I think most of our listeners are probably familiar with that name.

If not, having followers of of Dave. Dave is probably one of the best known financial gurus, coaches, mentors in the world, certainly in the country. He has the second highest listens to weekly radio program that weekday daily program. He's had it for more than 20 years. He is a multiply published best-selling author of the total Money makeover and that's his best-known book. It outlines the baby steps as he calls them to financial freedom on his course financial peace University is taught in churches all over the country and I love this. His course on financial literacy is actually being taught in an increasing number of high schools across the country before the Christmas break. I actually got a chance to go into a local high school here and teach four classes for different classes came and went.

One class, but the four groups of students on the value of saving early and often, and the difference between saving and investing and I hope I made an impact, but I have a whole new appreciation for teachers. Maybe some apologizing to different from but but the evolution that you mentioned Scott is that the nomenclature used to be a Dave Ramsey smart investor Pro. It has changed and evolved and we are now hearing from Dave from his team. The language of a Ramsey trusted smart investor Pro and here's the reasoning behind that is that Dave is probably at some point in time thinking about his own retirement. I mean, what good would it be taking retirement advice from a guy that never has the outlook that they want to retire or were never tires themselves. Now as a financial advisor.

I caution people to align themselves with with an advisor that that in all likelihood is not going to retire before they do or during their retirement when they need them the most. But in Dave's case he has built a succession plan and he's been grooming many of his team to help him fill the role when he does eventually retire and therefore they are trying to in in a light sensor remove Dave from the equation tying so much into Dave and brand the Ramsey trusted so same meaning for me is that I've gone through kind of an interview process to make sure that my views my values align with Dave his teaching. His team did background checks on me and then officially became that smart investor. The Ramsey trusted used to be the Dave Ramsey smart investor. Now the Ramsey trusted smart investor I been doing that as as an official Dave Ramsey smart investor Pro for a number of years since really I formed my own firm, but it is evolving and in the years to come we will hear much more about being a Ramsey trusted smart investor Pro fiduciary investment professional that can help you with the managing the monitoring and the growth of wealth. Once you kinda get through the Dave Ramsey baby steps one through three, which is making sure that your foundation is in place and that your debt-free, that's great. So in the future if you hear that your fiduciary advisor or financial advisor is because of Dave Ramsey smart investor Pro or that has been coming Ramsey trusted smart investor Pro, at least for the time being is one of the same piccata moving through the titles yet it's evolving, but they are trying to push the Ramsey trusted branding more and more quickly so you you hear more like Ramsey trust while the reason why you want to talk with the Dave Ramsey smart investor Pro like your shot is that you might have some common financial goals. If you're interested in talking with Peter personally about those you can call them at 919-300-5886 or go to his website www.richonadding.com Peter common financial goals. We all have some kind of broad goals that we want to achieve specially at this time of year. New Year's resolutions are are still on our minds and hopefully still active as you mentioned, financial speaking, there are many goals that maybe your self as a planner, you would hear about and help your clients, but so what are some of a few of those common goals that the folks out so I hear a lot about.

I'd like to save more I like to spend less as being the most common financial goals and I think that those are monumentally important. They all those to boil down to a better understanding and control of your budget. What comes in and what goes out. They must be in alignment in order for you to make every other bit of financial progress in your life and when I say in alignment. What comes in needs to be more than what goes out. In order to take those next financial steps now.

Not everybody is in that situation, not everybody has that luxury.

Unfortunately of of being able to snap their fingers and simply say oh well I'm gonna control my expenses and and earn more. I'm going to spend less, but it is something that we should be striving towards and paying attention to your money maybe step one opening your mail. I've had conversations with people that say you the way I say to them, you're never going to have the basis of of an outlook for financial success.

If you don't open your mail and pay attention to the bills when they come in. You gotta pay attention to those, but after that Dave talks about every dollar having a purpose before the beginning of the month being intentional with what money is coming in and where you're going to send it out to making sure that your obligations are met. You're getting out of debt.

That's another big big financial resolution. This time of year.

I'd I'd like to get out of debt and a lot of us unfortunately did that hole a little bit deeper during the holiday season. It's just very easy to go out and overspend in and swipe the plastic rather than paying cash that we actually have. But designing, implementing and sticking to a budget really important to achieve all of the other ones which I generally do help a little bit more with which is achieving better growth funding retirement getting more reviewing life insurance.

That's a big one completing those legal documents and you know not something I handle, but I would say the majority of people that I talked to don't have legal documents in place and a lot of people are getting ready to make the transition to retirement when those are of paramount importance. Now I think that any mature responsible adults over the age of 18 with a spouse with a mortgage with the house with children.

You need to have your legal documents, but need to be reviewed and if you don't have them by the time you're transitioning to retirement. Here's here's your sign now is the time get those done. So that's a big one. Understanding and handling risks, you know, a lot of us are worried about what the market is going to do and don't want to lose a great deal of money if the market does see a downturn in 2022. A lot of people have a resolution or or maybe they don't but they have a concern that they'd like to address that I help with that are creating the retirement timeline and deadline thereof. Yes I would like to retire this year or sometime in the next few years giving gifting starting savings accounts for kids or or grandkids college education. Those are a lot of the financial goals that I hear about and I help with on a day-to-day basis, even if you're having fabulous success with your investments in future planning. Or if you're having less success in the market with your investments.

If you don't understand how well or or how poorly you're doing any given time and it's a real hard to get a handle of you mentioned in past episodes rebalancing your accounts. If you're doing even if you're doing really well. You can't just let go of the balloon if you you with that case you would still need to rebalance things keep them kind of in the where they're going, just as you would if you were perhaps having a downturn.

Yeah. And rebalancing is something that a lot of people forget about and overlook or or just don't really understand the importance of if my allocation for retirement start software I want to be 75% at risk, let's say, and then we go through a decade like the last decade were the market has done phenomenally well. I am overexposed to the appropriate level of risk because the risk side of my portfolio has grown and with 401(k)s being kind of automatic and out of sight and out of mind.

A lot of people don't do that if you fall into that category. That should be one of your resolutions.

I mean started at the base of it doing that she rebalancing probably takes the grand sum total of 30 minutes of your time over the course of the year. If you understand what you're doing maybe 30 minutes to get educated on what you're doing and why it's important, but 30 minutes then to execute it on it over the course of the year. That's the minimum time that you should be committing to making sure that you are not exposing more of your hard work life savings to the risks of the market than you've found appropriate and you mentioned like that everybody kinda wants to know where they stack up. You know the question is will what's the measuring stick there right if I'm comparing myself to my peers, some peers may be way ahead of me some pink peers wait may be way behind me in the amount that they have saved. Does that make the amount that I have saved abundant or insufficient well, there's really no way of knowing that because there's not a measuring stick. The measuring stick is you and your life circumstances and it's why going back to those resolutions of saving more and spending less and creating and controlling a budget are so important.

The budget is the mechanism to create the measuring stick and I may have a completely different budget than my brother or my neighbor or other people in my age group based on how I live my life and what my goals and expectations are and what my bills are in the financial situation that I've put myself into work created for myself so we really need to get an understanding that in order to achieve these financial goals it's it's sitting down and just learning more about ourselves being introspective and self reflective about who we are and our behaviors with money that we've created the relationship that we have with money and and how to be the owner of that situation. In the master and in control of the money that we are able to create. It's interesting. You mentioned that even if someone decided to spend some portion of their money frivolously. At least they should know that they are doing that with intentionality as opposed to just money flying out the door willy-nilly, not, not even if somebody spends money frivolously. You should have some part of your budget earmarked to have fun and enjoy life. Look. Life is short and money is important, but it's not the most important thing we got to enjoy our time here, and money is the tool to support what's important to us and if every dollar that we have coming in and going out is is earmarked for an obligation or necessity or subsistence and we have no fun in life. What is it all worth and regardless of your beliefs. I mean, I know my beliefs but we have lots of listeners and regardless of your beliefs. Whether you think you go up, down, sideways or or come on back the money stays here and to spend so frivolously that you run out of money or outspend your ability to earn that's a bad situation but almost equally as bad and sad is those that pass away with a profile of money and this long unfulfilled bucket list right, we've gotta strike a balance there. So within that budget. There should be a section earmarked after your obligations after your subsistence of I'm going to enjoy my life and have a little fun and and here's my allowance that I am allowing myself that will keep me between the ditches and and between the gutters. The guide rails that will keep me making forward progress, but still allow me to have that fund that life is really about great advice from Peter Shaw.

If you want to talk to him directly about those goals that budget that that ability took to stay within the bumpers of your budget. Call them at 919-300-5886 made it is 2022 Peter I can't believe it's finally here. What do we have to look forward to. From a financial planning standpoint. In this year 2022. Low interest rates may be creeping up a little higher inflation, market volatility taxes.

I think those are going to be the leading stories of 2022.

I do want to go back just for a moment and talk about the word budget.

That's like the four letter word of the financial world. Nobody loves that word. It's a bad word. I hate a budget. Let's replace that. Maybe with spending plan so that we feel like we have permission to spend rather than limitations on what we can spend men sometimes during the course of conversations. I'll suddenly begin to replace that work as I can tell, somebody is just resistant to the budgeting process but creating a spending plan he know it's weird it's it's just a psychological thing there all for that.

So money is math but money is also mental, emotional, and psychological and and if you feel better, creating a spending plan, rather than having and sticking to them being limited by a budget just start making that change in the language and and it's gonna help you accomplish the same goal of identifying what within your income is available for enjoyment of life rather than subsistence, and obligations, but the stories of 2022. Scott, we've seen historically low interest rates now for more than a decade, and they keep getting lower and lower and lower and geez where is the bottom and globally. There were actually places where if you wanted to keep your money safe you paid for that privilege. There were negative interest rates being issued internationally.

Now the US never got there, but I know my savings account was like .01% interest pennies on the on the dollar over the course of the year next to nothing. Thankfully for savers. Interest rates are probably going to begin to increase.

Now here's here's the kicker. When interest rates increase. Guess what, the housing market is going to slow down because these low interest rates have driven the ability to buy larger houses for people who can qualify to upgrade and to refinance and the housing market is a big driver ran a leading indicator of the economy as a whole. So when the housing market begins to slow down if and when they raise interest rates is going to have a couple impacts a the market is also impacted right interest rates go up. Housing market slows down bond market also potentially loses value stock market inherently has some downward pressures so this is is something that they are really delicately trying to balance because the the weapon that the government that the Fed not the government. The Fed is different than the government that but that the Fed has against rising inflation is to try to tame that rising inflation by right raising the interest rates but raising the interest rates has an inverse affect on bond values and on the speed and the velocity of the housing market, which are two major drivers of the economy. By the way, the bond market dwarfs the size of the stock market we hear all about the stock market all day every day, but the bond market is about four times the size of the stock market and so those things are are going to be factors that I pay attention to is I'm helping clients to make financial decisions for 2022 and the year to come. Inflation plays a part in that. I don't think that we have even begun to see the end of the story with inflation. I talk to a lot of people that have jobs in occupations that are in various parts of the supply chain in different industries and unfortunately were I think just the tip of the iceberg on on the full story scope and size of of disinflation. Hopefully we can slow that down but what that's probably going to take his rising interest rates and if you have debt that's not gonna be in your favor if you have savings, it may work well for you. In one aspect, but may have some side effects as well.

Market volatility could potentially be a result. Now the market has been unknown cannily on volatile for a number of years here only. We've we've seen a few hiccups, but the number of times in a given year where the market moves more than 1% in a given day, up or down is one of the main measures of volatility and 2021 2020 minus Kovic, 2019 2018 2017 all the way back to about 2009, the number of times that the market moves more than 1% in a day has been comparatively very low and I think that we may begin to see a little bit more market volatility and unfortunately I'm concerned that it could be a downward volatility volatility can be good by the way can it can go up as well and then taxes we know some of the story of the future of taxes and it doesn't look good so I'm doing a lot of proactive planning for my clients. I did it last year of doing it this year I'm doing it for several years, but in 2026 tax rates will go up and included in the infrastructure bill and the bill back better bills and proposals in the language that is coming out of future things to come. A lot of the opportunities to better control our taxes in the future and and and minimize what impact these changes have on us could be going away so proactive planning for your tax because keeping more of your money is just as effective as shooting for higher returns, but with lot with a lot less risk involved, so let's be efficient with those those taxes as well make you feel in your professional opinion, what is it make you think when kind of the current events in the news that were seeing don't seem to line up with market performance that were seeing at a given time.

You mentioned that the market has been has been steadily has been steady and yet the world seems to be unsteady. Where is that in congruency coming in. Is that something to be concerned about is that solidity glad about what what what you think part of the problem Scott is that the news their number one job isn't to report the news. It is to gain viewership.

Write the number one job in Washington is that the politicians main job is to get reelected. The number one problem with the news that we receive is that there their job is to generate revenue for the news station or the news media outlet so blood shed cells if it bleeds it leads. You know the sensational audible things that we hear about it is human nature to watch the proverbial train wreck and those things that make us scared that they draw on emotional reactions, are the things that they are going to lead with and talk about constantly and that really is is the separation in my mind the divide between what you hear on on the media and then going out in your neighborhood and actually talking with your neighbors like if you just paid attention to the news. The world is full of hate and ugliness. We did drive over the holiday season here in the office where we ask for people to make Christmas a little brighter for kids that might not otherwise have a very good Christmas and seniors that were in need.

Oh my goodness, the outpouring and the generosity from our community and our neighbors just floored me.

It was amazing and and if I go out and talk to my neighbors. I don't experience the kind of hatred or divide that I see on the news. Likewise, we hear about in the news when it pertains to the stock market yet. The stock market is volatile. Yes, the stock market can lose.

Now you know we don't want to see it. It could, it can swing significantly, but they're going to talk about it as if the end of the world is tomorrow.

I get a lot of questions about email marketing material and radio commercials in particular that say hey that the collapse of the dollar is imminent. You know, we are going to see the crumbling of our financial system, you know, the dollar has not always been the world reserve currency before World War II was the British pound sterling and yet Great Britain is still a country as far as I know, like their civilization did not crumble in and decay soon as it was switched over to the dollar and even within Europe. You know it's gone over several changes since then they went from the British pound to the euro with European Union and back out of that with bricks it and and yet they maintained a civilized society. Look, I don't think that were going to lose our status as the world reserve currency in the imminent immediate future could happen potentially but all this marking material acts as though it's going to happen tomorrow and the solution is to buy gold now nothing wrong with old Iona little bit of gold and in a couple different forms, but if there's so convinced that the dollar is going to collapse, and the gold is the solution then why are they asking me to send them money dollars and they're going to send me their goal right. It just doesn't make any sense that there is money to be made in the sale and it's created by the fear and the emotion that they are inducing and people so that's I probably gone a little too long and deep about that but the headlines are not the reality. Unfortunately is the bottom line 19300586 for more smart things like that from your shot if you talk to him directly. Peter this time you hear a lot of people are focusing on the resolutions.

It's kind of a time to reset, refocus, reflect, so this might be the time and here were somewhat is the most receptive to kind of advancing their financial situation in a positive way. What are some ways that people can stick to these financial resolutions that they make at this time. He so I don't know if you've ever heard the acronym smart, but your resolution should be smart, specific, measurable, attainable, realistic and timely specific there is a case at a certain thing, not not this grandiose kind of idea, but a very specific thing that you want to achieve measurable you can see that thing happening attainable it's it's realistic right I want to win an Emmy this year will that's not realistic. I'm not producing a whole lot of music or anything right which we gotta make them attainable, realistic and timely. I want to achieve this goal by the date you know.

Whenever I got a specific. I want to achieve it.

So if you want to lose 50 pounds. Don't set that is your goal.

Due 5 pounds this week instead or or 5 pounds this month and that breaks it down to a smaller, realistic, timely, measurable chunk right for a physical kind of analogy.

There are equally with a physical analogy I can read all of the books about lifting weights and working out that exist in the world but if I don't take action on them.

It's never going to get done, so it takes more than studying it takes doing in order to achieve those goals and if I go to the gym by myself. I see all this fantastic workout equipment I might not know how to use some of it properly to achieve the goal that I want. So having a trainer to teach you how it hold you accountable works in the physical fitness world as it does in the financial fitness world having an advisor to teach you the tools and to hold you accountable and you know speaking back to the individuality of every situation.

A yoga instructor and a bodybuilder.

Both have a similar goal of being in shape, but the way they get there is going to be very different. The yoga instructor probably has a Quito diet with very few carbs and and not a whole lot of calories where the bodybuilder might eat 20,000 cal before most people are out of bed the way they go about achieving those goals is very different so all of those things taken into account.

It's it's really about starting the long journey starts with the first step.

I think a wise man once said in and it's true. So you've got a take that step. You gotta be motivated and keep those goals in mind, be smart, specific, measurable, make them achievable, realistic and timely. No better way to keep track of all those things and with a checklist store a plan if you want to get your hands on that optimize retirement plan from your shot. You can call 919-300-5886 or go to www.richonplanning.com it's a fresh new year don't want to do the best things for ourselves and our families. Peter was so happy you had to hear any closing thoughts forced before we wrap up our first show this new year will you mention the checklist. I got a quick checklist. It's one page. It's five high level items the 2020 financial and retirement planning checklist.

If all the boxes are checked off, you're probably in good shape of one or two of them are not then give us a call in and we can talk about how to make sure that you have done everything that you need to do and call us for the list we can email it out to you. It's a great thing to have in your hand to go over on your own time and and understand and identify the areas that you may need to pay more attention to that's a great resource. Peter, thank you once again for your time.

It was a pleasure having you on the show today Oaks 919300586. You can get your hands on that 2022 checklist for all the great information. Sean, we do hope you join us next time here on planning matters. Matters. The content of this radio shows provided for informational purposes only and is not a solicitation or recommendation of any investment strategy you are encouraged to think investment tax or legal advice from an independent professional advisor. Any investment and/or investment strategies mentioned involve risk and possible loss of principal by three services offered through Brookstone capital management, a registered investment advisor. Fiduciary duty extends only to investment advisory advice does not extend to other activities such as insurance or broker-dealer services advisory clients are charged a quarterly fever as a belligerent product pay a commission which may result in a conflict of interest regarding compensation