It’s interesting to look back through the years and note the trends. There were things 20 years ago when I started that were in vogue that isn’t today. Conversely, there are things that we use every day that didn’t even exist 20 years ago. The iPhone, for example, is only 10 years old. Pretty amazing to think about since it’s so integrated into our lives. We have our contact list, calendar, photos, it’s the primary means of communication for many of us. When I started, I barely had a flip phone and it could only dial out numbers.
It’s very interesting to think about this especially with regards to the financial universe and what’s happening around us. That said, there are still things that were pertinent long before I came into the business and are still pertinent today. I think that’s important to keep in mind. There are certain concepts and thought processes that can still be very helpful to us today.
We’ve recently talked about football and finances, pumpkins and planning, so we’re going to keep with that theme. Thanksgiving and Christmas are some of my favorite times of the year mainly because of the food. From a metaphor standpoint, we’re going to look at the parallels between Thanksgiving dinner and your financial life. When we look at the thanksgiving table, can we make any parallels to the financial world? The answer is yes.
In terms of Thanksgiving dinner, many of us have the main course, side dishes and dessert to round out the festivities. In a parallel universe, your financial life can also be broken down into three portions. So, for this three-point sermon I’m going to focus on the main course (strategy), side dishes (tools), and dessert (estate planning).
Strategy is the main course and most important part of your financial universe.
If you’re looking at Thanksgiving dinner you have the main course, turkey. Some people have ham, lamb, a vegetarian option, whatever you choose we’re thinking about the main course. What is the main course in your financial life? This is something that is applicable to many of us. The main course, or anchors, that keep us grounded in our financial lives are specific and individual strategies. So, what are the things that are most important to you from a financial perspective whether things are going well, or not so well?
When we think about the main course, a strategy is the most important thing. I’m not talking about specific investments or financial investments but simply, why do you make the choices that you do. Then to be able to identify that and have clarity on it because that can get you to your goals and through the challenging times.
One of the things we do with our new clients at North Main Financial is to sit down and go through each person’s goals and objectives. Based on this information, we work with each client to develop a strategy that is specific to them. Remember, there is no one size fits all when it comes to a financial strategy.
Strategy guides you into what you’re going to do next in your financial life. Things like investments, insurance, tax deferral strategies, charitable strategies, and estate planning, having the strategy behind you pushes you in the appropriate direction. At North Main Financial we consider that to be an anchor, or main course if you will, of what we’re doing. Once you have that main course in place, everything else is a complement to it. When you think about Thanksgiving, the turkey is the focus, but all the side dishes complement it. Similarly, once you have a financial strategy in place, there is an abundance of tools to complement it.
Financial tools are like side dishes…there are a lot to choose from.
When we’re thinking about Thanksgiving, the next thing you think about are side dishes…and there are a lot of them. Once you have your strategy in place, what are the tools (or side dishes) that compliment it? The instruments that help move your strategy forward and towards the goals you have.
It may be your companies 401K and making sure you are maximizing the match. Perhaps you own your own business and you want to make sure you have the most advantageous retirement plan. It may be looking at your insurance portfolio and making sure the policies you have in place are the most cost-effective and covering off on all the risks you have. The list continues from charitable strategies to the stock market to real estate investments. The possibilities are quite endless so you can pick and choose the tools that line up with your individual strategy.
Once your strategy and tools are in place, make sure to look at all your “side dishes” to see if there have been any changes that may affect your strategy. Sometimes, not always, it is necessary to adjust depending on what’s going on in your life or other macro factors. This helps keep you in step with your strategy.
Just like dessert finishes a meal, an estate plan rounds out your financial life.
I don’t think any of us are going to disagree that dessert is the most enjoyable part of the meal. So, what does dessert look like? Dessert comes at the end of the meal so if you’re thinking about the end of your financial life, you’re thinking about estate planning and estate distribution. After you’ve made all the effort to put together your strategy (main course) then implementing certain tools (side dishes) to carry out your strategy, it’s time to decide what you want to have happen with what’s left over.
It’s important that you align your estate plan with your overall strategy. For example, you may want to set up a trust for children so they can utilize the trust with the oversight of a trustee after your passing. You may want your estate distributed to charity and there are tax-efficient ways to do that. Thirdly, when we’re talking about dessert, you should think about beneficiary designations. It can easily get overlooked and we see this a lot at North Main Financial. The end of the year is a great time to review your beneficiary designations especially if you’ve gone through a marriage, divorce, having children, a death in the family, etc.
We’ve used the upcoming Thanksgiving holiday to look at our main course, side dishes, and dessert. When thinking about your financial life the main course is your overall strategy. Make sure you are lined up in the way you should be going. Second, make sure that the side dishes, or tools you are using, compliment your strategy. Lastly, dessert, make sure your estate plan lines up with your overall strategies and you have the right tools in place to make sure that happens.
Interested in hearing more about this topic? You can listen to the full episode of the North Main Financial radio show on WSIC by clicking here:
If you have questions about your financial goals or would like to talk with us further about our services, give us a call at (704) 987-1425 or visit us at www.northmainfinancial.com. If you wish to schedule an introductory meeting, we would be happy to meet with you at no cost or obligation to you.
These Blogs are provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of SagePoint Financial or Iredell Broadcasting.