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What We Mean by “Plans and Planning”

Clients, when we say “plans” and “planning,” what exactly is it that we’re talking about? From Day 1, our conversations center on you: your goals, your concerns, and how your life and your money work together. So planning, we believe, includes any and all topics that affect your financial wellbeing. 

Our planning services are included as part of our process working with clients. Some investment advisory shops do bill separately for time spent selling “Financial Plans,” so it bears mentioning that we do not. 

Instead, we tend to use wide-ranging planning conversations throughout our relationship. They’re handy when we’re first meeting each other, and they give us useful talking points over time, like when we’re reconnecting at or in between our annual reviews. 

Not every client will bring up the same topics or concerns, but generally, people’s questions tend to focus on some similar desires. Maybe some of these statements resonate with you: 

  • “I want to figure out how to organize my finances.” 
  • “I want to feel like I’m financially secure, independent, or free.” 
  • “I want to be able to support the life I want to live.” 
  • “I want to be able to create the legacy I have in mind.’” 

These desires are not universal, and they’re not necessarily linear. Not everyone moves through them like one step to the next, and sometimes we loop back around to revisit them again and again. And they take some thoughtfulness to maintain. 

But you might notice these four items do capture some trends and progressions. They cover a range of chapters in our lives—from getting started, to getting a grip on things, and then to getting what we want out of the whole deal. Once we know where we are in the process, it can be easier to get down to the details. 

Consider some examples. 

“I want to figure out how to organize my finances.” Does my monthly cash flow comfortably cover my outlays? Where does my time and money go right now? How is my job or career outlook? What are some good first steps for me given where I am? 

“I want to feel like I’m financially secure, independent, or free.” Do I have what I need in terms of an emergency fund and a support network? What demands affect my cash flow now and in the near-future? What financial challenges and financial goals can I anticipate in the coming chapters of my life? 

“I want to be able to support the life I want to live.” Am I living where I’d like to live? Working how I’d like to work? Enjoying what I’d like to enjoy? How do my saving, spending, and investing align with what I want now and what I want later? 

“I want to be able to create the legacy I have in mind.” What’s on my heart? What estate or charitable considerations are on the horizon? What opportunities have presented themselves? What impact would I like to have? 

Clients, our operation is continuing to grow, and we need to be able to serve you not only in the months and years ahead—but for the decades ahead! Your beneficiaries and the generations to come will be better served if we’re thinking about how this work persists beyond any one of us. 

That’s why we’re taking the time here to try to define our terms.  

It’s important that we’re on a common mission here. Financial planning prompts like these aren’t a script, and they aren’t something that will be “one-size-fits-all.” Instead, they give us a jumping off point. They give us somewhere to start from or begin again—together. 

Are we due for a conversation? Call the shop or send us a message, anytime. 

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Play the audio version of this post below:

What We Mean by "Plans and Planning" – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://228main.com/2023/06/21/what-we-mean-by-plans-and-planning/.

Video

TRANSCRIPT:

[MARK LEIBMAN] They say the journey of a thousand miles begins with a single step. Really, the whole journey, every inch of it, happens one step at a time. Everything you can think of is made of tiny things, tiny actions, single steps. The secret to accomplishing anything is basically to put one foot in front of the other.

The training of an Olympic swimmer happens one stroke at a time. Our quaint quarters at 228 Main were built one brick at a time. Books get written one word at a time. The 25 year history of LFS happened one day at a time. A $1 million 401(k) account gets built one fraction of a paycheck at a time. Healthy eating habits are formed one bite at a time. Relationships blossom one conversation at a time. A portfolio gets put together one opportunity at a time.

Humble, common actions within the reach of anyone are what great stuff is made of. You do this simple thing. Then you do it again. Then you do it again.

The secret to accomplishing anything great is to put one foot in front of the other, while you are aimed in the general direction of something worthwhile.

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The Abundance Conundrum

© Can Stock Photo / Thilien

People reaching retirement age these days have witnessed a huge evolution in how people live. Growing up, many never saw the inside of a restaurant except maybe once a year. Family road trips usually included a picnic basket with cheese or balony sandwiches. Larger families lived in smaller houses back then, so now each person has about double the living space.

Author Eric Barker notes that we probably have far more now than in the past, but we seem to be no happier. We instinctively believe that more will fix it: more money, more food, more things. The problem is the quest for what makes us feel good doesn’t have a finish line. “It’s a pie-eating contest and first prize is more pie.”

The pressure to fit in, to keep up with the neighbors is now compounded by social media, which generally shows the best version of everyone we know, and none of the problems. There have been many more pictures of expensive cars than of the tow trucks sometimes sent to repossess them. You see vacation photos from exotic places, but not the credit card bills which detail how they were financed.

Aggravating the situation, technology has given many the option of working all the time. Flexibility is nice, but in the olden days, you could leave your work at work and be engaged with your family when you were home. Now our work is in our pocket, so we have to make a decision: answer emails, or play with the kids or talk to neighbors or enjoy some other leisure.

Going with the flow is perhaps more costly than ever to our wealth and sense of wellbeing. Thinking about the fundamentals of our own happiness, pursuing our fondest ambitions in a mindful way, being thoughtful about how we spend our time: these might be the answer to the battle between “more” and “enough.”

Financial planning is at the root of a balanced approach to life and living. It begins with the attempt to define life on your terms, to learn your internal motivations, to clarify your understanding of success.

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

Special Relativity

© Can Stock Photo / Alexis84

A friend wrote to me recently about the two kinds of time. The time that gallops onward in an undistinguished blur, versus the time that resolves itself into perfect crystal moments that stretch on to forever. Haven’t we all had those kind of peak moments?

We seem more prone to the ‘undistinguished blur’ sort of time as the years go by, and routines get set. Perhaps breaking the routine, new experiences, are what sets those forever moments apart.

My friend concluded that if there is a secret to keeping time in a bottle, it must involve moving forward – a special kind of special relativity. This notion has some interesting aspects, including one that bears on our work for you, I believe.

Many financially independent retirees have noted that they spent much time when younger worrying about having enough money in later years. Then, when they get there, they discover that money is abundant, compared to time, which is finite.

If we spend our working years on a treadmill of accumulating a fortune for enjoyment way down the road, perhaps we live life in a routine, in which time is an undistinguished blur. This shortens the subjective experience of our lives.

Alternatively, we can work to understand and perhaps moderate what “enough” means, and balance living in the moment against our longer-term objectives. Would this leave us open to more new experiences, new ways of thinking and being, and that sense of moving forward that might bring about more of those ‘forever’ moments?

Hey, I don’t know either. But I’m in favor of more special moments, and less undistinguished routine. Clients, if you would like to talk about this or anything else, please email us or call.

Change: Lasting or Fleeting?

© Can Stock Photo / martinan

The efforts to slow the spread of Covid-19 are reshaping our lives. Work-from-home (WFH), social distancing, and self-isolation mean big changes, with some unforeseen consequences.

We have been thinking and studying some of the impacts on society, striving to understand the effects on commerce and the economy. There are many unknowns.

Fewer people commuting means less traffic past the coffee shop, less wear on automobiles, emptier workplaces. When the virus has faded, will these effects be lasting, or fleeting?

Will work-from-home gain a permanent boost, reducing the long term demand for office space?

Do those who formerly stopped at the coffee shop everyday resume that habit when they begin commuting again?

After enjoying more free time from less commuting, will more people seek to live closer to their work?

“Dinner and a movie” has given way to carry-out, cooking from scratch, and streaming services. What happens when the crisis fades?

What is the future for movie attendance?

Does cooking replace some fraction of restaurant meals?

What effects will these trends have on commercial real estate?

There have been other effects, too. Online shopping got a big boost from mass retail store closings. Weddings, funerals, and other kinds of gatherings have been cancelled or postponed. Some people report an increased interest in improving their health; others talk about using food or alcohol to deal with stress. Are these changes lasting or fleeting?

After the 1918-1919 great influenza pandemic, the Roaring Twenties followed. Were exuberance and celebration a bounceback from the isolation, sickness and death of the pandemic?

We have many questions. What do you think? If you would like to talk about this or anything else, please email us or call.

Confusion, Wealth, and Options

© Can Stock Photo / bruesw

A confession: I am confused about a fairly important life question. Some of you have been, or will be, facing similar conundrums.

You may be surprised, depending on how well you know me. Clarity is something I strive for.

When I am home in Louisville Nebraska, there are no traffic lights between my modest abode and my shop at 228 Main Street, a ten minute walk if I choose. Life is simple, inexpensive, and easily within the means of future benefits from Social Security and a small pension.

I also have a home in Florida which is not particularly modest. We chose it a few years ago, when I was part of a ‘we.’ It met the needs of my high school sweetheart as she worked to extend her life in the face of serious health challenges. The original rationale for the decision no longer holds, as Cathy passed away last summer.

You may recall our original decision a decade ago to adopt a snowbird lifestyle, in the hopes of making my plan to work to age 92 a sustainable one. I had no appetite then for decades more of Nebraska winters.

Now I am confused.

• I still have little appetite for Nebraska winters.
• The Florida home is more than I need.
• It takes money to maintain a second home.
• Where I will want to spend how much time in the future is something I cannot answer now.

What is needed to cure my confusion is time. The old rule of thumb about dealing with wrenching personal change is “don’t make any big decisions for at least a year.” Now I understand this rule, after giving myself whiplash trying to make plans prematurely.

The answers will become clear with time.

What gives us the time we need is money. I have some; you have some. Money for its own sake has little value, but the time and flexibility it provides is priceless.

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

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

 

This Land is Your Land

canstockphoto6823114

I have an interest in some land adjacent to the Platte River, near my home. A fairly extensive parcel, it includes small lakes, good places to have a picnic or campfire or pitch a tent, and lovely hiking paths.

Have you ever been mesmerized by the sight of moving water? Ripples on a pond, waves on a lake, or a river flowing seem to connect with us on a deep level. This land offers ample opportunity for inspired introspection.

Walking it in different seasons provides a different experience every time. The leaves of the cottonwoods provide early color in the spring, spring and summer breezes murmur through them, and autumn winds make them rattle as they turn yellow and dry out, before they fall. When bare of leaves, the cottonwoods stand vividly against purple winter dawns and red sunsets.

The time I spend on this land promotes my well-being in every dimension: physically, emotionally, spiritually.

The other day I wondered how much it would cost to buy the parcel today. I was grateful that there is no need to do that; it would be quite expensive.

The interesting thing is, I never bought it, not any fraction of it. My interest in it arises from a state park annual pass. The pass covers the Louisville State Recreation Area, 65 other recreation areas, eight state parks and nine historical parks. Each of us has the same right to it, whether we leave a large mansion or a small apartment to access its wonders. Clients, the twenty states you live in each have something similar.

As we enjoy the present and plan for the future, we benefit ourselves by finding and taking advantage of the opportunities to enrich our lives that are free or nearly so. The ability to be cheaply amused, a valuable trait, is a great one to cultivate.

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

Saving for a Successful Retirement

© Can Stock Photo / 4774344sean

When you picture a successful retirement, what does that look like to you?

To some people a successful retirement means luxury cruises, European vacations, and a big house with a pool for the grandkids. To others a successful retirement might mean a quaint cabin with a porch to watch the wildlife from. Some people picture retirement as never having to work again, others might view retirement as a new stage in their working career where they can focus on their hobbies and passions.

The answer to this question is going to have a lot of impact on your retirement planning. If you want to build your dream house and have a second vacation home on the beach, you will need to save a lot more than if you just want a quiet cabin near the fishing hole.

When you go looking for financial planning advice some sources will recommend saving as much as 25% of your earnings for your entire working career. We have known some impressive savers in our day and watched them build incredible nest eggs through the magic of compound returns. We know many more who saved far less than that, though, and not many of those would consider their retirement a failure.

A cynic might conclude that financial planners have a vested interest in trying to convince you to save and invest as much money as possible with them. A more charitable interpretation might be that they want to make that luxury retirement lifestyle possible for you. That takes a lot of money, and if that is the retirement you want you would do well to heed those aggressive saving recommendations. But you might also consider whether that is the retirement lifestyle you want or need and adjust your financial plans accordingly.

There is no one size fits all plan for retirement, and you might not even know what you want to do with your retirement at this point. Obviously, the more you save, the more options you will have in retirement. But we think it is also important to have a little fun every day. You never know how long you have left, and it does you no good to live like a monk to fund a retirement you may not get a chance to enjoy.

Clients, if you would like to discuss your financial planning, please call or email us.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.