Want content like this in your inbox each week? Leave your email here.
Author: Caitie Leibman
Here Be Dragons!
It is hard to imagine embarking on a long trip these days without the use of technology. Hours spent studying an atlas have been replaced by seconds of typing in your destination. An additional quick search alerts you to nearby fueling stations, rest stops, lodging—all the known resources along the way!
Long before GPS and atlases (and even truck stop chili dogs!), explorers had no choice but to set off toward destinations unknown. Cartographers would sketch the journey as they went, creating a compounding resource of information.
If the destination proved fruitful, the voyagers would have a way to return with their bounty. If nothing of interest materialized, well, at least they knew to no longer waste their time in that direction.
Looking over some of the earliest explorers’ maps, you’ll see intricate details of the paths traveled. You’ll also find, in some of the unmarked terrain, the words, “Here be dragons!”
Two possibilities might explain the drama of such labels. There’s fear, and there’s greed.
The fear: the harrowing journey brought such new and challenging experiences that they convinced themselves dragons are indeed real and are probably lurking in those unexplored pockets of the world. Thus, shouting ensues… “Here be dragons! Stay away!”
The greed: there could still be interesting stuff out there, so it was worth trying to scare off those other explorers.
Clients, we’re in the business of uncharted territory: the future isn’t mapped out for us. You can hear the shouts of other supposed explorers all day, every day. Dragons, treachery, treasure… It’s enough to throw anyone off course.
But luckily for us, we have our guiding lights—our principles, our goals—to keep us on track. Dragons be darned!
Clients, questions or concerns? Reach out anytime. It’s our pleasure to explore alongside you.
Want content like this in your inbox each week? Leave your email here.
Play the audio version of this post below:
Here Be Dragons! – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
Ready or Not: The Seasons Change
A Job Jumper’s Treasure Hunt
Changing jobs ranks way up there, as stressful life events go. It can be as overwhelming as undertaking a big move, welcoming a new family member, or saying goodbye to a partner.
One of the great privileges of our work is getting to bear witness to those big moments. And there are ways that our perspective might help smooth the rough edges during times of transition.
In fact, you might think of changing jobs as an opportunity: there are plenty of housekeeping issues that come with change, but it’s also a chance to get some things tidied up.
It’s likely worth the time to track down 401(k) plans from any previous jobs. It may seem like a chore—like going through the garage or getting into the couch cushions—but it could result in finding some forgotten treasure.
Just like loose change can end up spread out all over the couch or the car or the junk drawer, you’ve likely left some resources here and there along your career. But it can’t be put to work if you don’t track it down again.
This reminder applies to a lot of different folks. Young people may have a new job—or two!—every year throughout their early 20s. Even many of my contemporaries have had, on average, maybe a dozen jobs across their working years. The earlier we can get our accounts organized, the easier it will be to keep up the good habits. It’s a potential stressor we can work on before it gets to be a headache!
There are different ways to make the most of those retirement accounts. Some options include leaving them as they are, moving them to a 401(k) with your current job, or rolling them into an IRA at a different financial institution.
The big idea, though, is that a treasure hunt now may provide some comfort even in a challenging transition. It can be such a relief to know that your money can work as long as you do—and beyond!
Questions for us? We’re happy to talk, anytime.
Want content like this in your inbox each week? Leave your email here.
Play the audio version of this post below:
The Job-Jumper's Treasure Hunt – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
A Tangle of Time, Money, and Enjoyment
Ever notice how hard it is to say, “Okay Einstein…” without sounding sarcastic? So I’m no Einstein, but I am thinking about my own theory of relativity. Spoiler: don’t let the project of accumulation blur the enjoyment out of life.
Want content like this in your inbox each week? Leave your email here.
Nothing Succeeds Like Success
The world is full of advice, from self-help resources to lists, “listicles,” and everything in between. (Incidentally, check back next week for our post “48 Ways to Know that You’re Not Famous Enough Yet!”)
We’ve noticed that a lot of this content focuses on the things to avoid. Getting familiar with common mistakes sounds logical enough on the surface, but we’re also contrarians… so we’ve been thinking about this for a while.
This is the model that’s just about always been used in our schools and even our pastimes. Our work is returned to us with the errors marked so that we can correct them, review, and push on. When a team loses, even by a small margin, the plays get scrutinized so that the team can learn from the defeat. Makes a certain kind of sense.
But there are a million ways to mess something up. More finite, however, is the list of ways to really shine at something. How often do we stop to consider what went right? We suggest we should be learning from our successes, too.
“Was this success a win or a fluke?”
“What made Company X a strong one?”
“In this project, I’m glad I paid attention to…”
These are just a few ideas for prompts, because goodness knows we don’t need any more lists about “how to not get it wrong.” We’d like to know more about how to get it right.
Clients, when you’re ready to chat, please write or call.
Want content like this in your inbox each week? Leave your email here.
Play the audio version of this post below:
Nothing Succeeds Like Success – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
The Magic Pie
Did you know that the main ingredient to the magic pie is stock ownership? Common stock is more than just a transaction on the computer—it’s an investment, a share of an enterprise that’s out there in the world, trying to do something. Best part about a magic pie? There is plenty to go around.
Want content like this in your inbox each week? Leave your email here.
Financial Planning, Starring You!
Some pros rely on the idea that financial planning is a mysterious process, requiring advanced mathematics and cold, hard reasoning that mere mortals cannot achieve.
We keep seeing language to this effect across the financial services industry. Maybe you have, too?
- “We’re the best solution for objective planning.”
- “This is a strategic, objective process for financial freedom.”
- “Everyone needs an objective partner to shape their plan.”
Being “objective” gets held up as a pinnacle of professionalism, but what’s so great about it? Objectivity is the idea that we’re more interested in the reality that exists beyond an individual’s experience—that truth is out there beyond one’s feelings and deliberations.
Objectivity is overrated, in our opinion.
Clients, what’s so bad about being the main focus of your own story? The objective part—the math!—should be working backwards from the goals you bring to the table.
I will never tell you how much you “should be” spending in retirement: you are the boss of your life.
I can’t know what portion of your assets “should be” more liquid: let’s talk about your mid-range goals first.
I don’t have an opinion on what your employment plans “should be”: you’re the one who has to wake up each day and make the most of it.
You are the star of this show, and it’s an honor to be here with you. Whether we’re trying to get some better lighting on things or rehearsing for what’s ahead, the focus is… you!
Clients, is it time to revisit any goals? Write or call.
Want content like this in your inbox each week? Leave your email here.
Play the audio version of this post below:
Financial Planning, Starring You! – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
Should You Spend Like You’re Rich?
The so-called “rich people” in my life don’t carry around big bags of money or wear monocles. One thing that sets them apart? How they spend. Our resources actually allow us to live more cheaply and avoid more pitfalls.
Want content like this in your inbox each week? Leave your email here.
The Stability Tax: A Smoother Ride to Foregone Gains
One school of thought about investing holds that ups and downs are the same as risk itself. A related belief: the role of a professional advisor is to minimize this volatility, to select investments and products and strategies that are more “stable” in the short term than traditional long-term investments, such as stocks.
We have a different view, one that says the ups and downs are an integral, inseparable part of seeking long-term investment returns. In striving to grow long-term money over the long term, we work diligently to communicate the attitudes and strategies of effective investing. (It’s why you’ll hear us repeat ad nauseum, “It goes up and down.”)
But don’t mistake us for pessimists. One of the attitudes of effective investing, we believe, is to embrace the idea that we get paid to endure volatility. Volatility is just the inevitable short-term wiggling, in our view. It’s not the same as risk if it’s just part of the ride.
There are plenty of quizzes out there to “measure” one’s aversion to risk. Many produce a “risk number.” But one of the realities of investing is that risk and reward are related. So the higher a person’s “risk number,” the greater their potential returns. The lower the number, the less wiggling—and the stymied potential returns. There is a trade-off.
We disagree with the notion that wiggling is a good measure of risk for long-term money, and it’s worth pointing out the consequences of this approach. Let’s do the math.
Over an extended period, the foregone returns of a less-wiggly portfolio are, in effect, a stability tax. A lump sum invested for 25 or 30 years might only grow to half as much as a more effective portfolio that embraces that longer time horizon.
For instance, imagine a person starting to invest for retirement at age 40: a monthly investment of $1,000 to reach their desired goals in an effective long-term portfolio would take $1,500 monthly in a less wiggly portfolio! All things being equal, less volatility would be nicer, maybe—but if this were you, would you take $500 every month from the rest of your budget to pay a stability tax?
Put this way, the cost of avoiding some uncomfortable volatility is actually quite a burden! Half your future wealth? It’s a lot to pay to smooth some bumps now.
Clients, that is why we work with you to determine if you can live with volatility on some fraction of your money. Instead of pandering to the fear of wiggling, it is more gratifying for us to strive to be effective long-term investors. We’re all about trying to grow the bucket, not giving you a smoother ride to a likely-poorer future.
To be clear, this isn’t for everyone, and it is not suitable for short-term goals. But when you would like to talk more about avoiding the drag of stability on your long-term investing, please email us or call.
Want content like this in your inbox each week? Leave your email here.
Play the audio version of this post below:
The Stability Tax: A Smoother Ride to Foregone Gains – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
You must be logged in to post a comment.