As I recently watched my first anniversary with LWA come and go, I had a chance over the Memorial Day weekend to reflect on the year I have spent working and getting to know some of you. Let me start by saying when my uncle told me on the day I graduated from high school, now 10 years ago, that time only speeds up from here, boy was he right. Over the past year not only did I move across the country to Arizona, where I could count on one hand the number of people I knew, I found a firm that strongly aligns with my belief system as a financial planner, and colleagues that truly care about each other and the clients they serve as if they were family. I feel privileged to have been able to work in this environment over the past year and meet many of the client’s that make what we do worthwhile. Many of you may know friends or family members who have stories of financial planner’s viewing people for their assets and not for their values, goals, or dreams. That is not the case at LWA. I would like to take this moment to thank Todd, Pattie, and each of you for making this past year as great as it was and taking a “chance” on hiring some guy from Wisconsin – THANK YOU!
P.S. without you guys I never would have experienced my first taste of 115 degrees in a suit jacket.
Since I have been in a reflection state of mind, some of you may be surprised to be reminded that 2020 is almost halfway done. Most of you may be happy to hear this, however, I can’t help but hear the Greek philosopher Herclitus’ quote in my head when he said, “Change is the only constant in life”. As I sit here writing this on June 1st, that statement could not be more accurate than it is today. Only 5 months into a new decade and we have already experienced a global pandemic resulting in nationwide lockdowns and record level unemployment, the impeachment and acquittal of a sitting president, the United Kingdom separating from the E.U., the premature death of an icon known globally by one name – Kobe, and recently national protests on a scale not experienced in over 20 years. Not sure about you but nowhere in my goals for 2020 did I make plans to navigate any of this. Yet somehow through everything that has happened in the first 152 days of the year, and for everything to come over the next 214 days, one thing remains constant – CHANGE. Once we accept that, it can help us strive with each new day to make the best of the opportunity in front of us and to be better than you were yesterday – personally, spiritually or maybe even financially – please see below.
Jumping off the reflection train I would like to remind everyone during these trying times of ways you can help prepare for any uncertainties that might affect you or your family’s finances. Here is a list of 6 items for you to consider:
- Work to Build an Emergency Fund – Now more than ever a surplus of cash can help prevent you from borrowing or tapping into investment accounts at inopportune times. We recommend having at least 3 to 6 months of your monthly cash flow needs in a safe FDIC-insured savings account. Ally bank is currently yielding 1.25% interest on their online savings accounts.
- Create a Budget – Living within your means has always been the most important thing you can do to create wealth no matter your income. This means that you spend less than you earn, and you capture the surplus. If you do not already adhere to a budget, now is a great time to start.
- Have Additional Income – Even if you have a great full-time job, having a second source of income is never a bad idea. This can take the shape of consulting or part-time work with employers in industries that have benefited from lockdowns.
- Invest for the Long Term – It is prudent not to invest anything you anticipate needing in the next 1-2 years especially during increased market volatility. The investments you currently have should be viewed for the long term and if you know you will need a lump sum of cash from your investment accounts within the next 24 months, please notify us as soon as possible so we can begin planning accordingly.
- Review Your Risk Tolerance – Many times investors overstate their risk tolerance in “up-market environments” to find out during a market correction they may be allocated more aggressively than they are truly comfortable with. Now is an opportune time to re-address this to ensure you can ride out any volatility knowing you are invested appropriately for your investment time horizons, goals, and objectives.
- Diversify Your Investments – Diversification of investments in its simplest form means you own the sector winners and losers. You will not have the highest earning portfolio, but you also will not have the lowest or worst earnings either. Over time diversification helps to reduce the volatility experienced year to year and allows you to consistently capture the markets highest performers.
A quick reminder – we have now reopened our doors to in person meetings for individuals that are interested in them. Due to the wonderful presence of technology, we can also meet remotely via Zoom if this is still preferred by any of you over meeting in person. As always we ask that you please contact our office if you have any questions regarding your specific financial lives and/or if you would like assistance implementing any of the above strategies to help position your finances for the future. Again, thank you to all of you for your continued patronage and loyalty and we hope the remainder of your 2020 will be different than the first (almost) half of the year. Remember, what you see today will not be the same tomorrow. Your attitude and the optimism you bring with you into each new day will be the differentiator and allow you to triumph through anything life has in store.
Wishing you all the best Success,
Jon Launder, CFP®