lifestyle planning

When a Hunch Is Good Enough: Invest Wisely, Spend Well (Whenever)

It’s a new school year for so many of our children, grandchildren, and neighbors. Maybe you’ve enjoyed the flood of perennial back-to-school photos. Some families have their children hold up chalkboard signs, to record the details—their new teacher’s name, their favorite color right now, and even what they’d like to be when they grow up. 

I can’t help but imagine what surprises are in store for some of these little ones! Who among us could’ve known exactly what form of work would find us in the future? Bike courier, hotel manager, a director of photography who specializes in making food look good in commercials—did any of these folks call their shot as kindergarteners? 

It’s an interesting question, and maybe we should keep asking it. What do I want to be when I… reach my next birthday? Or the one five or ten years hence? 

What do I want to have in the next chapter of my life? 

What doors would I like to keep open? 

These might sound like daydreams, but even the hazy hunches of children can be revealing, if not instructive. Sometimes new clients visit our office with apologies ready: they don’t exactly know what their goals are, they don’t know what to ask for, or they can’t begin to imagine what will be possible down the road.  

And that’s okay. Just like the question on those little chalkboards, a hunch is good enough. Memoirist Katrina Kenison wonders, “Who knows, really, where dreams begin?” Maybe we’ve been on a certain winding path since we were children. Maybe we discover what we’re about later in life. Maybe our circumstances change, and we get dealt a hand we didn’t imagine we’d ever be playing. 

A friend of mine used to tell their children, “This is the plan… until it isn’t.” And that’s life, right? 

It’s okay to settle on a general direction, even in your financial life. Growth, an eye on sustainability: these are worthy plans all by themselves. You don’t have to know the destination of every penny. Such a privilege means that you’re buying your future self some options. Resources bring flexibility. 

You can always invest wisely, now; the “spend well” part can wait. And what a journey that will be! We’re glad to be here with you.

Want content like this in your inbox each week? Leave your email here.

Play the audio version of this post below:

When a Hunch Is Good Enough – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/.

Throwing Yourself for a Loop

Sometimes life’s big milestones arrive in a neat, straight line. And sometimes that’s just not what happens—or what we want to happen. How do we plan for a swoopy life?

Want content like this in your inbox each week? Leave your email here.

To Cheap or Not To Cheap: It’s Not Really a Question!
photo shows a dictionary page with the definition of "quality"

Remember Rich Uncle Pennybags? He’s the mascot from Monopoly. Top hat, monocle, sacks of cash. As kids, he might have been the cartoonish dream for some of us, the ultimate image of what “rich” looks like.

Obviously the reality is different, and our dreams mature as we do. Clients, in our conversations with you, it doesn’t seem like his life or image is the one you’re pining for.

But there is one surprising realization about the life of the “rich”: it is usually much, much less expensive to be rich than to be poor.

Why? Having money enables us to live more efficiently and avoid many painful financial pitfalls.

To begin with, credit may sound like a bargain—after all, you’re getting more money now than you otherwise could spend! But there really isn’t any such thing as “cheap credit.” If you are able to lay down cash for major purchases, you don’t just save on fees and interest: you may even be able to negotiate a better price.

If you are funding large items on a credit card, you are likely to wind up paying many times what they are worth. If you find yourself in a spot where you need to turn to high-risk credit in the form of payday loans, things get even worse.

There are other ways that having money allows you to stretch your resources out, too. Buying quality merchandise may take more money up front, but the alternative is buying shoddy products: if you find cheap furniture that falls apart every year or two, you’re still paying to replace pieces more often. You may save money in the long run by paying more up front. (Of course, care must still be taken to select your purchases carefully: higher cost does not always correlate to higher quality!)

Also, when you have a life of plenty you have the luxury of being able to shop around and wait for a better price. The rich get to be rich in time, too. Be a little choosy, not cheap.

These habits are ones that all of us can use to help us build and maintain our own wealth.

The wonderful conundrum that some have discovered is this: the less you spend, the more wealth you accrue; the more wealth you have, the less you need to spend.

Clients, write or call when you’d like to talk about what this means for you.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Want content like this in your inbox each week? Leave your email here.

Play the audio version of this post below:

To Cheap or Not To Cheap: It's Not Really a Question! – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/.

Light at the End of the Tunnel: Good News toward a Vaccine
photo shows an out-of-focus pink, purple, and light blue sunrise

For up there is down; for day there is night. Sunrise, sunset. You’ve heard this from us before. It’s been challenging for many of us to apply this same awareness to the global COVID-19 pandemic. Some of the earliest cases of the virus were detected this time last year, and many of us in the U.S. have been living much more restricted lifestyles since early spring of this year.

The changes we’ve made—limiting travel, exposure, contact, among others—have been a reasonable price to pay for the possibility of preserving the health and vitality of ourselves and those around us. And yet, it’s still been a long stretch. It’s had its tough moments.

But the sun keeps rising, we continue to count our blessings, and the latest scientific developments may help provide some hope.

Following a recently completed phase of a COVID-19 vaccine trial, the National Institutes of Health reported promising results, suggesting this latest “vaccine is safe and effective at preventing symptomatic COVID-19 in adults.”

This isn’t a victory by itself, but it’s certainly an important milestone in the journey forward. Many partners are working together to figure out the logistics: how a vaccine would be produced, stored, transported, distributed; how its effects would be monitored; and how other areas might be affected as the vaccine takes priority. All that is to say… it’s complex.

But it’s not impossible. And it’s not forever. It may feel like we’ve been traveling through a long, dark tunnel. Here’s the thing about tunnels: they’ve got exits. It’s possible that things are dark and that we’re still on our way.

Let’s keep our heads up, toward that glimmer of light ahead.

Clients, when you’d like to talk about what all this means for you, your plans, and your planning, reach out.

Want content like this in your inbox each week? Leave your email here.

If These Walls Could Talk (About Retirement)
photo shows four small model houses in the grass in decreasing size left to right

It’s generally a good thing when more cash is coming in than going out.

When our planned retirement income is greater than our expenses, we have the basis for a solvent retirement. The equation could be stated pretty simply: income > expenses.

The bigger part of our work and time and energy is devoted to striving to build your capital. More capital means more cash flow from your capital. We’re trying to get you access to the income you’ll need and want.

But lifestyle decisions may have a bigger impact on our finances, by way of expenses—that other side of our equation.

I recently decided to buy a different home, selling one I had originally purchased for a life chapter now ended. There is no sacrifice involved: the new place thrills me, although it is less than half the size of the old one. It actually feels like an upgrade to my quality of life.

The new place also features less than half the utilities, taxes, maintenance, insurance, and other expenses. Those add up to more than $1,000 in savings per month for me.

When downsizing helps you wipe out mortgage debt, that might improve your annual cash flow by thousands of dollars.

The effect of this lifestyle change on my retirement picture is amazing. Projected Social Security benefits cover a larger fraction of the budget. So a reduction in my need for income produces a much larger reduction in the capital I need to retire comfortably.

Reducing expenses means our money goes farther. Perhaps it means we can retire at a younger age or live with greater flexibility.

Clients, I still intend to work to age 92. And I’m looking forward to a new chapter where my living arrangements make more sense to me.

We are happy to talk with you about your retirement plans and planning, whenever you are ready. Email us or call.

Birthday!

© Can Stock Photo / soupstock

One of my most cherished goals in life has been to get old without being old.

The first half of that is marked by having birthdays. These are signs of progress. Some people I knew do not have birthdays any more, and I wish they would. Getting older is a good thing, especially compared to the alternative.

The second part, not being old, is trickier. The plan to work to age 92 is surely part of the equation. While some of my peers are coasting toward the finish line, we are focused on the decades ahead. We work on figuring out how to serve you more effectively, how to be better. This plan is giving us a sense of vibrancy and growth one typically finds in younger people.

My birthday is coming up. Here is what it means, in years: 28 more years until retirement. Save the date: May 27, 2048. We are going to have a party.

The mindset is one piece of it. I won’t detail the other pieces. They are boring, and everyone already knows them: the five things you try to be healthy at in order to live a long time. In this new, more boring phase of life for me, I have time for those things.

Please note, I am not prescribing this working lifestyle to anyone else. I may have been dropped on my head as a child, I don’t know what makes me think this way. It goes back a long way. Good thing so many of you retired younger than 92, or plan to, so I have work to do!

A debt of gratitude goes to you who employ me in this gratifying work. The plan will not pan out without you.

(We are planning to hire more younger-generation people. You will not need to worry about declining capacity on my part.)

Clients, if you would like to talk about this or anything else, please email us or call.

20/20 Foresight

© Can Stock Photo / leolintang

The New Year is upon us. Like Opening Day of baseball season, the first day of school, or any other beginning, it is a good time for plans and planning.

We’ve been able to focus on strategic issues in recent weeks, ones that will shape our work for you in the years to come. The general theme? Build an enterprise that will serve you well, and be durable enough to outlive me.

While we work ON the business, of course, we also need to work IN the business, taking care of things for you. Fortunately, we know exactly what the stock market and the economy are going to do: go up and down, same as always. Time tested principles and strategies will always be the foundation of our work with you. They do not eliminate the ups and downs, but they improve the odds we will survive them and come out on the other side.

The items on our list are wide ranging. The more significant ones: finding and developing more good people to join the team, figuring out office space, determining whether we need to form our own Registered Investment Advisor, guiding the evolution of our offerings, and building a more robust financial planning process.

But enough about us. What about your strategic issues? If you want to talk about retirement, changing where you live, sorting out who should get what after you are gone, or simply where to invest for the long run, email us or call.

Look Rich or Be Rich?
© Can Stock Photo / ragsac

Some people have so much money, it doesn’t matter what they do with it. On the other hand, some don’t have any. Our work tends to be with those in between, those who need their money to work effectively. Clients, that’s where you and I live.

Many financially independent people we know faced the choice of a lifetime: they could look rich, or be rich. And they chose to be rich. The cost of impressing others is quite high when it manifests in expensive homes, vehicles, and conspicuous consumption.

The difference between a $250,000 home and a $500,000 one is not just $250,000. The recurring expenses connected with the more expensive home may include higher property taxes, larger utility bills, more interest expense, and greater maintenance costs. Those recurring expenses reduce room in the budget for accumulating wealth to live on in later life.

A recent article about $10,000 watches had the headline, “Affordable Watches That Will Make You Feel Like A Millionaire.” This seems funny to us. We delight in asking people whose invested wealth has reached the $1 million mark whether they identify as a millionaire now. Not one has answered ‘yes.’ So if a million dollars doesn’t make one feel like a millionaire, what chance does a $10,000 watch have in getting that done? (A large fraction of the millionaires I know wear $39 watches.)

The paradox is that those who strive to look rich may never accumulate much in the way of assets. Meanwhile, those who chose to be rich may eventually learn how to spend well. They can afford the vehicles that provide the most comfort, the homes that make daily life better, generosity to descendants or charities, and travel to bucket-list destinations.

The flaw in attempting to impress others is, we do not control what others think. We only control our own choices. Those everyday millionaires (and those on the way) in our acquaintance seem to have learned this early, and made the wise choice.

Clients, if you would like to talk about this or anything else, please email or call.

Financial Wellness

canstockphoto15850454

We put a lot of time and energy into researching investments and managing portfolios. But there is more to financial wellness than being effective investors.

It is handy to understand where you are financially. Putting together a summary of what you have, and what you owe, is a great first step. What you own (your assets) less what you owe (your liabilities) is your net worth. This is a key indicator.

Not everyone is going to be great at creating and following a detailed budget. But it behooves each of us to think about where and how we spend money. At 228 Main, we don’t really have a lot of time to hector you or lecture you about spending money—you are the boss of balancing life in the present moment and preparing for the future.

When you know where you are, and understand the spending that needs to happen in your household, you can go to work on two ways to grow your net worth:

1. Reduce liabilities by paying debts off. One proven method is to pay some extra on the smallest one. When that is paid off, the amount of its payment plus the extra can be put on the next one until it is paid off, and so forth.

2. Increase assets by increasing your regular contributions to retirement or savings plans, or starting new accounts.

Once your plans are on track, there are some other niceties you might attend to, such as an emergency fund, managing your credit score, and beginning to think about your long-range goals.

What good is your money if it doesn’t connect at some point with your real life? That’s why we work to understand where you are, where you are trying to go, and the strategy and tactics you might use to get there.

Clients, if you would like to talk about this or anything else, please email us or call.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.