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Executive Message

Our Passion Is Your Financial Success

By | 2019, Executive Message, Money Moxie, Newsletter | No Comments

At Smedley Financial all of our efforts are focused on one thing: Your Financial Success! Let’s specifically define what those words mean. Financial planning is ultimately about getting you to where you want (and need) to be. It is using what you have to accomplish your goals.

How do we view our role as your financial fiduciary?

Being Your Financial Bodyguards: As your financial bodyguards, we strive to protect you from unscrupulous people. We strive to protect you from those that wish to separate you from your money permanently. At the other extreme, we strive to be your financial bodyguards between well-meaning friends and family. Simply put, few people can afford to lose any money. Loans to loved ones seldom get repaid. This is especially true if you have retired or lost a spouse. Hint: That’s why we need you to call us about any and all requests for money.

Taking the Right Types of Risk: Specifically, we strive to help you take more of the right types of risk and avoid the wrong types of risk. If you are too aggressive (greedy) or too conservative (fearful), you may end up broke. Caution: Being too extreme, either way in your risk-taking, may be dangerous to your wealth.

Protecting and Growing Your Assets: Protecting your assets is imperative for your financial success. The majority of people tell us they don’t want to lose what they have already worked for and accumulated. Hence the adage: First, do no harm.

Growing your assets is crucial going forward. We have had several clients live well into their 90s, and one even made it to 100! Hint: Our job is to strive to manage your personal wealth. Your job is to manage your emotions, never getting too high or too low.

By using Smedley Financial, what does this mean to you? It means we are fully invested in you. We not only put your interests ahead of ours, but we also strive to offer you our best advice, knowing what we know, based on what we would do in your same position. Our passion is your financial success.

Bullish Best Wishes,

Roger M. Smedley, CFP®
Chief Executive Officer

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Your Leading Indicators

By | 2018, Executive Message, Money Moxie | No Comments

Dear Financial Partners and Friends!

Leading economic indicators are predictive changes that give us clues about the future direction of the economy. Lagging indicators are after the fact. They confirm what has already happened.

Just as the economy has leading and lagging indicators, so does your personal financial preparedness. Regardless of your age, or alternatively, your personal lifecycle, ask yourself where you are in the following questions.

  1. Do you have a three-to-six-month emergency fund that matches your net income?
  2. Are you free of all debt?
  3. If you were to die suddenly, would your family have enough money to live now and through retirement?
  4. Do you have enough money saved for retirement? (See graph below.)
  5. Are the beneficiaries and contingent beneficiaries on your retirement accounts, life insurance policies, etc., the way you desire?
  6. Have you created will(s) and trust(s) and ensured they are up to date?

If you answered “Yes,” to all of these leading indicators, then you are financially prepared for the future. If you answered “Yes,” to most of these, then you are on the right path. If you answered “No,” to most of these, then you should take immediate action. Please come and talk with one of our expert wealth managers who have the experience, credentials, and training to get you to and through your retirement years.

So many changes can take place within a year’s time, that when it comes to your personal finances, it is better to be safe than sorry. The most important people in your life depend on you. Will they be harmed or helped by your preparation or lack thereof?

Bullish Best Wishes,

Roger M. Smedley, CFP®
CEO

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How Much Money Will You Need in Retirement?

By | 2018, Executive Message, Money Moxie | No Comments

Dear Financial Partners and Friends!

If we were to ask what percentage of your final salary you will need in retirement, you could probably come up with an answer off the top of your head. In reality, determining what you will need to live on and making sure you have enough to meet that need is extremely complex.

A front-page article in the Wall Street Journal’s Wealth Management section on September 4, 2018, by Dan Ariely & Aline Holzwarth, made this astute observation: “Answering a question as complex as this requires knowledge far beyond most people’s grasp—and far beyond the grasp of many professionals.”

Why is retirement planning so difficult? Because it’s all about longevity, the future cost of federal and state taxes, cost of property taxes, cost of health care, cost of long-term care, the opportunity cost of being too conservative or the penalty cost of being too aggressive, cost of living, as well as daily living and possible travel expenses, just to name a few. Retirement cash-flow planning is not for the faint of heart.

While many think that health care cost will be the largest expense in retirement, the surprise is that for most folks, taxes are the single, largest expense. It’s impossible to generalize for everyone, but taxes are levied on withdrawals from qualified retirement accounts such as IRAs, 401(k)s, and pensions. If you have too much income, your Social Security benefits may also be taxed during retirement.

Integrating tax planning with cash-flow planning may help bring considerable and tangible benefits. Preserving your hard-earned dollars through tax planning is crucial in delivering and providing a sustainable cash flow during your retirement years. Having said this, melding tax planning and cash-flow planning is very complicated.

The great news is that you don’t have to go it alone. At Smedley, we can help you navigate the white waters of retirement tax planning and cash-flow planning. Please come and talk with one of our expert wealth managers who have the experience, credentials, and training to guide you to and through your retirement years. Your financial success is our passion at Smedley Financial.

Best Wishes,

Roger M. Smedley, CFP®
CEO

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Just In Case You Missed It

By | 2018, Executive Message, Money Moxie, Newsletter | No Comments

Dear Financial Partners and Friends!

How is the U.S. economy really doing? Here are a few quotes and facts regarding the past, the present, and the future.

The Past: “We Ran Out of Words to Describe How Good the Jobs Numbers Are,” (“The Upshot,” Neil Irwin, The New York Times, June 1, 2018.)

The Present: The U.S. economy jumped to an annualized rate of 4.1 percent GDP in the second quarter of 2018. That’s almost double the first quarter’s rate of 2.2 percent. This is the fastest rate of growth since 2014. This is great news for all of us!

The Future: The following quotes are from Elizabeth MacDonald’s, “Evening Edit,” Fox Business News, July 19, 2018. MacDonald said,“(Here are) CEO commitments for more jobs over the next 5 years.”

FedEx®: “FedEx® will train or reskill 512,000 people over the next 5 years.”

General Motors®: “General Motors® is proud to offer 10,975 workforce training opportunities.”

The Home Depot®: “The Home Depot® is pleased to provide enhanced training and opportunities for 50,000 associates.”

Raytheon®: “Tom Kennedy from Raytheon® and we pledge 39,000 enhanced career opportunities.”

The U.S. economy is doing well. As a result, most Americans are doing well. Remember this: Your financial success is our passion and our mission at Smedley Financial.

Best Wishes,

Roger M. Smedley, CFP®
CEO

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Good Planning Could Save Your Retirement

By | 2018, Executive Message, Money Moxie | No Comments

As individuals, many of our philosophies and habits about money and finances originate from our personal experiences and from the experiences we have observed from those around us–parents, family, friends.

Good or bad, we engage in behaviors that we believe will bring us financial success and happiness. If we see someone suffer from a financial shock, like the loss of a job, we think: “I am not going to live paycheck to paycheck. I am going to build an emergency savings account so that I will have money to fall back on.”

So, what happens when people plan based on preconceived ideas developed from bad information? This poor planning will kill your retirement dreams. And unfortunately, it’s more common than you think.

I recently came across a report compiled by the Society of Actuaries–2017 Risks and Process of Retirement Survey. The focus was retirement concerns and preparation and overall financial wellness among pre-retirees and retirees. It covered everything from debt in retirement, to housing concerns, to the impact of financial shocks, to working longer. It also covered the sense of well-being and preparedness among pre-retirees and retirees that use an advisor and have implemented a plan.

After reading the report, I was surprised at the percentage of retirees that felt unprepared for the financial aspects of retirement and their income needs. I included some of the highlights in the graphics on the next page. My conclusion? Many retirees have too much debt, poor spending habits, and would benefit from the help of a financial advisor.

We are so grateful for the opportunity to help you, our clients, plan for a successful financial future. We thoroughly enjoy creating each plan, focusing on the known and preparing for the unknown events that may impact you. Thank you for allowing us to help you on your financial journey.

Best Wishes,

Sharla J. Jessop, CFP®
President

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What Drives Happiness?

By | 2018, Executive Message | No Comments

Dear Friends and Financial Partners!

It’s true that 2017 was and will remain one of the most memorable years for the stock market. We all have much for which to be grateful and not just in the monetary sense.

About two years ago I came across a TED Talk: “What makes a good life? Lessons from the longest study on happiness by Robert Waldinger.”1 Waldinger is a Clinical Professor of Psychiatry at Harvard Medical School. He is the fourth director of one of the longest-running studies of adult life ever done. It is the ongoing 75-year-old Harvard Study of Adult Development.

The study answers the important questions about what keeps us happy and healthy. Here’s a hint: It’s not about fame or money or our stations in life. It’s about family. It’s about relationships. It’s about the people in our lives.

Another validation about relationships comes from the late Randy Pausch. “People are more important than things,” Pausch said in his book The Last Lecture.2 When Pausch, a computer science professor at Carnegie Mellon, was asked to give such a lecture, he didn’t have to imagine it was his last lecture, since he had recently been diagnosed with terminal cancer.

Again, “People are more important than things.” The keys to a good life involve the family and friends in our lives. It’s the people we know and our relationships with them that truly drive happiness.

We cherish you, our clients, and our special relationship with each of you. We never want to take you for granted. Thank you for being the greatest people on the planet.

Bullish Best Wishes,

Roger M. Smedley, CFP®
CEO

1. Robert Waldinger, “What Makes a Good Life?,” TED Talk, November 2015.
2. Randy Pausch, “Last Lecture: Achieving Your Childhood Dreams,” Carnegie Mellon University, December 20, 2007.

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What’s Up with the Stock Market?

By | 2017, Executive Message, Money Moxie, Newsletter | No Comments

Dear Friends and Financial Partners!

In spite of turmoil, tragedy, and terror, the U.S. stock market has not been suppressed during the last 12 months. Rising jobs and wages continue to support strong economic growth. In the U.S. we are experiencing the lowest unemployment in 17 years, according to the Bureau of Labor Statistics. Simultaneously, we have the highest consumer confidence in 17 years, according to The Conference Board Consumer Confidence Index®. Keep in mind that seventy percent of the U.S. economy is driven by consumer spending.

This rise in the stock market is not limited to the United States. It is a global phenomenon. The stock markets of Britain, France, Germany, and a host of other countries are also performing well.

Here’s how the S&P 500 has performed in the last two years. In 2016, the S&P 500 reached 18 new highs and was up 9.54 percent. This year, through November 30th, there have already been 57 record highs for a return of 18.26 percent. The Dow Jones Industrial Average and the NASDAQ have also set new record highs this year.

Dealing with the Wall of Worry
Many of us will readily recall Black Monday, October 19, 1987 when the Dow Jones Industrial Average (DJIA) dropped 508 points and finished the day at 1,738.74. That’s a decline of 22.61 percent. Thirty years later, on October 19, 2017, the DJIA finished the day at 23,557.99 points. That’s a compounded interest rate of 9.08 percent per year. (By the way, most people forget that even with that large of a drop in 1987, the year finished up a positive 2.26 percent.)

Gross Domestic Product (GDP) is one of the most important indicators used to gauge the health of our economy. GDP is the value of all finished goods and services produced by the U.S. Here’s the GDP by quarter in 2017: 1st Quarter—1.6 percent, 2nd Quarter—3.1 percent, and 3rd Quarter—3.3 percent. Wow! It has been several years since GDP has been this high. Researching money managers around the country, most managers believe that this climb in the stock market can continue and, yes, that there may be a Santa Claus rally in the works.

Bullish Best Wishes in 2018,

Roger M. Smedley, CFP
CEO

*Consumer Confidence Index is a registered trademark of The Conference Board.
**The S&P 500, NASDAQ and Dow Jones Industrial Average indexes are widely considered to represent the U.S. stock market. One cannot invest directly in an index. Investing involves risk, including potential loss of principal. Past performance does not guarantee future results. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based upon changing conditions. This is not a recommendation to purchase any type of investment.

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Preparing for Disasters

By | 2017, Executive Message, Money Moxie, Newsletter | No Comments

Watching nature unleash her fury over the last two months has been upsetting. Our hearts go out to those who are reeling from the devastation as they pick up the pieces of their lives.

As each potential disaster becomes a reality, it forces us to focus on our personal situations. We have heard numerous clients and friends – including myself – say they have pulled out their emergency “go” kits and reviewed their plans to make sure everything is in order. These plans often focus on food, water, clothing, and the essentials to maintain life for a short period of time. We want to be ready should we find ourselves in an emergency situation.

But, what if your emergency situation is financial? Your ability to weather a financial crisis may depend on your financial plan. Financial plans are designed to take into account and help you prepare for the many financial situations you may encounter.

Financial disasters can range from how will I pay for the car when it breaks down to how will I pay for care in my aging years when I can no longer stay at home? There are a myriad of situations to consider. Knowing you have a plan in place to address a financial emergency can help you take control should a situation arise.

Good intentions will not help in a financial disaster. Get prepared. If you have not created or reviewed your financial plan, I invite you to do it now! Your financial success is important.

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A Confession from a Successful Investment Advisor

By | 2017, Executive Message, Money Moxie, Newsletter | No Comments

Dear Friends and Financial Partners!

That’s quite a headline, “A Confession from a Successful Investment Advisor.” Here’s the confession:

The truth is astonishingly simple, “If we’ve been at all successful, it’s because you, our clients, have been successful. Our success only comes through your success.” Since June 4, 1982, when we became a Registered Investment Advisor, we have always strived to put your best financial interest first.

Over the years, many clients have shared with us how we helped them send their children through college or on missions, retire early, or live comfortably during their declining years. They have told us how our financial planning and investment management have allowed them to maintain lifestyle, travel, and handle life’s major medical expenses.

As a fiduciary, we strive to put ourselves in your shoes, endeavoring to give you the best advice based on our professional financial knowledge. So thank you, thank you for trusting us with your financial concerns and assets.

We are grateful to be your financial and investment advisor. By far the most gratifying—not just satisfying—part of our job is seeing you reach your financial goals throughout your lifetime.

Bullish Best Wishes,

Roger M. Smedley, CFP®
CEO

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Forge a New & Powerful Financial Paradigm

By | 2017, Executive Message, Money Moxie | No Comments

Dear Friends and Financial Partners!

How can you improve your savings and investing before and during your retirement? Here are some nifty (some might say awesome) tips to immediately change your personal money paradigm.

Change Your Money Mind-set: Chris Reining, who lives in Madison, Wisconsin, became a millionaire at age 35 by doing one thing differently. Chris started working to save and invest, rather than working to spend. By going through a self-imposed paradigm shift, your life can also transform from a working-to-spend environment to a savings-and-investing world. The outcome speaks for itself. This is one powerful idea.

Get Professional Financial Help: Ours, of course. When you are accumulating assets in your 401(k) or 403(b), you are in an automatic investment mode. If you don’t know what the sequence-of-returns risk is or how dollar-cost averaging works against you during your withdrawal years, you are already behind and need our help. Social Security has over 2,700 rules and hundreds of exceptions to these rules. Medicare is filled with land mines. Distributing assets during the decumulation phase is exponentially more complex than adding assets.

Take Charge of Your Emotions: Don’t let your emotions take charge and dictate your actions. Specifically, when the stock market is dropping or has dropped, don’t lock in your losses! Remember: Stock market drops are temporary. Locking in losses is permanent. Locking in losses by selling at or near the bottom of a market may be a mistake you and your loved ones will pay for the rest of your lives.

Ignore the Media: Call us. We know your specific financial goals. We manage money and segment your accounts by time to avoid the sequence-of-returns risk. Even when the media is all doom and gloom, there’s a good chance your accounts will be doing just fine with respect to your own financial goals. “The Sky is Falling” mentality illustrated by Henny Penny, more commonly known in the U.S. as Chicken Little, may cause you to want to lock in your losses. Don’t do it. Even well-meaning friends and family members can push you away from financial goals.

Remember: Contrary to many, investing is not about beating the market. Financial planning and investment management are about meeting your goals, including having a sustainable income stream during retirement. At Smedley we strive to help you forge a powerful, yet personal financial paradigm. As always, we are on your side.

Bullish Best Wishes,

Roger M. Smedley, CFP®
CEO

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