Between the fires on the west coast and hurricanes Harvey and Irma, the events of the past few weeks have brought devastation, heartache, and significant loss to so many. As we here in the Orlando area prepared for Irma alongside our families, neighbors, and friends, we did so with anxious thoughts of our loved ones near and far. In the wake of Irma’s wrath, as we rebuild our homes and wait patiently for waters to recede, roads to be cleared, and power to be restored, we do so with a renewed sense of that which is most important to each of us.
It is in this spirit that I felt compelled to draft this edition of Worth Considering.
Our community on the west side of Orlando felt the direct impact of Irma. Our house was no exception. As I write this, we still have some trees lying on the roof and our power is likely to be out for a few more days. So while we’ll be without air conditioning and in the dark for a bit, and there’s no doubt we’ll need a new roof, everyone is safe and life is wonderful. I’m grateful to say that all of my colleagues have similar endings to their stories as well. Physical damage is everywhere, but thankfully there are no reports of serious injury or complete loss.
Events like these serve to sharpen our focus on what really matters. There’s an old saying that “pressure doesn’t create character, it reveals it”. In the same way, life-threatening events put a remarkably accurate scope on what you really want your life to have meant.
I can assure you that as my wife and I sat huddled together in the hallway beside our two boys, the furthest thing from my mind was the price of Apple’s stock.
In the middle of the dark night, when you can hear the winds howling and the trees twisting and cracking just beyond your walls, you simply don’t care about when the Fed will reduce the size of its balance sheet and what it might mean to the markets for the next few weeks.
And when you have no choice but to realize that you are not truly in control of the timing of your life’s major turning points, all you want to know is that you did all you possibly could to love the important people in your life and that you’ve given them a worthwhile path to follow through the examples you modeled.
It is simple to inaccurately prioritize details ahead of meaningful missions when all is calm. When life is humming along nicely, we’re lured into believing luxuries are necessities. In terms of financial markets, when things appear to be calm, we’re lulled into complacency and forget that risk is real. But when we are handed the inevitable setback in every situation, we more clearly see what genuinely mattered to us all along.
At Winn Partners Financial Group, ours isn’t at all the numbers business as it might initially appear to be. It’s a human business. A client’s financial goal evolving into financial achievement is what our work is about. But sometimes it might look like it’s more about investment results relative to some specific benchmark.
In reality, the only benchmark that matters is the peace of mind that comes from having comfort in knowing your hard earned assets are going to be maximized and ultimately distributed as you’d hoped; throughout life and beyond. The S&P 500 index doesn’t know or care about when you want to retire, when you want to start taking income from your portfolio, or when you’re going to die. So called “Mr. Market” isn’t real, but your longstanding aspirations of how you want to enjoy life and leave a meaningful legacy are.
Nobody wants to worry their life away. The remedy for this is having a plan. And that plan needs to be nimble and incorporate the need for contingencies.
Years ago it became obvious to me that those who get the most out of life are those that do the best with Plan B. We all have a Plan A in mind and we do our best to make that plan a reality.
But how often does Plan A play out as we’d scripted it in our minds? Ever? I like the old saying “if you ever want to hear God laugh, tell Him your plans”.
As financial planners, our job is nowhere near done if all that we have considered for our clients is Plan A. That’s essentially malpractice.
Is anyone’s Plan A to be in a car accident or suffer a sudden illness? Is their Plan A to end their working years at the onset of the next economic downturn or bear market? Or to hear tragic life altering news of a spouse, parent, child, or any other loved one?
Plan B is the more likely situation to manage. Not just manage through, but thrive in. And it is totally possible.
Our motto here at Winn Partners Financial Group is “Stability in Motion”. When we talk about this concept we aren’t just talking about enhancing stability throughout the sometimes vague motions of the investment markets. We’re really talking about creating stability through the twisting and turning motions of life itself…….shortened lives, longer than expected lives, and all the various outcomes in between.
This involves some dry topics. It involves discussions of things that are nowhere near as exciting as some convincingly written piece about a stock that is supposedly sure to double. It means being honest about how the investment markets sometimes can and can’t be the major factor in attaining our ultimate financial goals.
Before we skip to the line-item aspects of our financial life – things like stock prices and short term economic projections – we need to attend to the big-picture of planning for our future retirement income and eventual estate passage. This is likely where our true financial peace can be found.
This will mean something different for everyone reading this piece. While there are a few universal aspects to our financial health, there are many more elements that are specific to our unique circumstances.
Let me point out just a few bullets that come to mind immediately when considering how we should all know the distribution plan for our nest eggs both in our living years and after we’re gone. Depending to some degree on our unique situation, we each should be sure we have:
- Proper asset and insurance coverage for our surviving spouse and family in the event of our earlierthan
anticipated passing; and vice versa. - Beneficiary designations updated on all applicable accounts and policies.
- An organized plan in place for our executor to follow – not only to be sure things actually happen as
we’d like, but also to not make a mess of their lives as they try to help us pass along the assets of ours. - All the details of our business dissolution or continuance in place. Do we have key man insurance and
buy/sell agreements in place and funded as they need to be? - Our wills or trusts reviewed and updated every few years.
- A plan for how to replace our income if we were to either die in our working years or fall victim to a
disability that no longer allows us to work as we currently might. - A plan for how to address potential long term care expenses.
- A living will that spells out the specific measures wanted in the
event of a terminal illness. - A health care proxy designating someone to speak on our
behalf if we’re unable to speak for ourselves. - Enough immediate liquidity in our estate to cover final
expenses so valuable assets don’t need to be sold at lower
prices in a rush.
Keep in mind this is just a partial list of things to consider.
Aren’t these riveting topics? Of course they’re not. They’re boring and downright uncomfortable.
Don’t you want to jump out of your chair to hurry up and pull together your estate plan? Yeah, right!
These are the very things we tend to get cynical or apathetic about, but we really shouldn’t. Let’s face it, they matter….a lot. It’s why we do so much of the work and saving that we do in the first place. Decades of work deserve a proper finish. Your lifelong vision should be fully realized and not become a loved one’s stressful situation or awkward workload that only serves to whittle away the very nest egg you honed your skills to create.
We want you to know that we are here and able to help in any way you might need.
Retirement income planning, life insurance, long term care insurance; these things are likely to more immediately come to mind. But please take advantage of things like our universal financial organization software, retirement and estate planning programs, and electronic vault safeguarding offerings. We combine our decades of investment management and financial planning experience with various software programs to hopefully help you make the very most of your assets, all while sleeping well at night.
It’s been a whirlwind of a week here in Orlando, and it I know it’s only worse in Houston. And I know we’ve all been through some sort of ordeal at some point in our lives, so everyone can empathize with the suffering of others to a fair degree.
I recently read somewhere “Let us always remember to be sincerely kind to others. You may be wealthy, handsome and fortunate, but know that you’re no better than somebody less handsome, less fortunate or less well off. The wheel of fortune always turns, and your position is never permanent. Be resilient when the wheel turns against you. Laugh, hug, and make others smile. Enjoy this ride without taking yourself too seriously. You never know when your ride – or the ride of those you love – will end. Start now!”
Seems like some decent logic to me.
Let me finish by saying Thank You to so many of you who reached out with your well wishes and status checks. All of us here greatly appreciate your concern and value our partnerships and friendships.
Whatever we go through, let’s go through it together.