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When Do You Need a Financial Advisor?

By | 2018, Money Moxie | No Comments

Last week I attended the Silicon Slopes Tech Summit that celebrates the booming Tech sector along the Wasatch Front. As I spoke with vendors and attendees, a consistent theme came up: “When do I need an advisor?”

Here are my thoughts on this and other similar questions I was asked.

Do I really need an advisor? You may not always need an advisor, but you always need a plan. If you don’t have a roadmap, how do you know if you have reached your destination? Many people have vague ideas in their heads of what success looks like. Maybe it’s retiring at the age of 50 and sitting on a beach drinking lemonade. Maybe it’s starting up your own company. Maybe it’s giving back to the community.

It is important to sit down and write out your ideas of success. Then take one more step by defining the path that will take you there. Without creating the stepping stones, your ideas will only remain wishful dreams.

Do you need an advisor to create that plan? No, as long as you are willing to do the research. Nowadays there is so much information available on the internet that you can become an expert in any area…as long as you are willing to do the research. As our CEO Roger Smedley puts it, “You don’t know what you don’t know.” Even more dangerous may be the things you think you know with certainty.

So, if you want to create your own plan, but fear you are missing something, consult with a professional that can identify potential pitfalls and help turn your stepping stones into concrete, actionable ideas.

Don’t advisors cost a lot? At SFS, our initial consultation is free. I love to see young college graduates come in who are ready to conquer the world. I give them some time to help create a plan. I know that if I help guide them in the right direction, they will be more financially secure, and who knows, they may even become one of my top clients in the future.

If a person becomes a client, then there are fees that vary depending on the services provided. Comparing our fees and our in-depth planning, we are a far better value than our competition. I have had people question our cost, but I have never had them question our value.

What you don’t want to do is to get your advice at the water cooler. While good advice may not be cheap, bad advice will always cost you dearly no matter how little you pay for it.

Is it best to talk to an advisor before or after my company goes public? Anytime you are dealing with a potential windfall, you should talk to an advisor. As human beings we constantly overestimate how much something is worth. When I was young, I thought $100,000 for retirement was a lot of money. Now, I know it could disappear in a heartbeat.

So, if you get a windfall, reward yourself by using some of the money to take a trip or do something fun. Just don’t blow it all in one place. The world is full of once-rich people that are now broke.

Make sure your money helps you accomplish your goals according to your plan. And if you don’t get the windfall you were expecting, still talk to an advisor. We can help you reach your goals.

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Women Bridging the Retirement Gap

By | 2017, Money Moxie, Newsletter | No Comments

It’s true that women average longer life spans than men. What is often unknown, or in some cases marginalized, is that we will need a larger nest egg to provide income for those additional years. This requires creative planning. Not necessarily more risk; rather a more defined plan for using the money we have saved for retirement.

As women, we also tend to focus on quality of life. We value things that give us purpose and enjoyment: traveling, giving back to our community, or creating memories with our children and grandchildren. These ideals drive our financial goals and decisions while money helps us achieve them.

Women often feel insecure about their financial
decision-making abilities. Building financial confidence is important. We need to be educated and have a better understanding of the decisions that need to be made and the options available to meet our needs. Once we have financial confidence, we are committed to our plans. We have a real desire to stay on track to attain what we consider to be financial success.

Developing financial confidence is the foundation to financial success. This comes naturally from our financial experiences – good and bad. It can also come through an exerted effort and a desire to have more knowledge and a greater understanding. Here are three ways you can take control:

Get Educated: Rather than wait for the life lessons to take shape, make an effort to learn more. You can attend educational seminars in the evening. Caution advised, most seminars offering free meals etc. focus on selling you a product. Our seminars are designed to educate you regarding specific topics and concerns. If you are busy at work, watch an educational webinar while you have lunch or in the evening from home. Our website has a collection of resources focusing on women and their unique needs. You can find it by clicking on Women and Wealth from our home page at SmedleyFinancial.com. If you have additional questions or want information on a specific topic, give us a call. We have a library we can draw from to provide you with the resources you are looking for.

Create a Financial Plan: A financial plan focuses on your personal financial needs, goals, and current circumstances. No matter where you are financially, you need a plan to move forward. Women often start a financial meeting by saying, “I don’t have very much….” The truth is, the less you have, the more important every dollar becomes. A plan will help maximize the assets you have available, creating a clear path to your financial goals and direction that will help you circumvent potential roadblocks.

Design a Retirement Income Plan: Most women want to know, “How will I replace my paycheck when I retire?” A retirement income plan is just as important as, if not more important than, a financial plan. Making sure that our money lasts throughout our retirement years is essential. By the time we retire, few of us will have the luxury of picking up another job to provide additional income. If we overspend in the early years of retirement, we may impede the success of our plan long-term. The same can be said about taking too much or too little risk; the results can be devastating. An income distribution plan must be updated each year to evaluate our ability to maintain our desired lifestyle.

You have the resources and ability to take control of your financial future. I understand you are very busy. Still, I challenge you to take the next step. Find one topic you want to know more about. Visit our website, give us a call for resources, or attend a seminar or webinar to learn more. There is never a better time to begin a financial journey than today!

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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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Your Future Is Here. Now What?

By | 2017, Money Moxie, Newsletter | No Comments

You’ve worked hard for your future and now it is here. Thirty-six holes, a fishing trip, and a dip in the hot springs–and it’s only Thursday. Now what?

Maybe you have always dreamed of working with 4H or the Boys and Girls Club of America. Perhaps you’ve realized that you need a little bit more income in retirement for the lifestyle you want; or you retired early and want health insurance until Medicare kicks in.

If any of these situations sounds familiar, it might be worth considering an encore career. Some encore careers are part-time roles in similar industries, while others involve finding a new role.

Luckily, there are several resources available for those considering an encore career. The AARP website (www.aarp.org) has a section on encore careers while organizations like encore.org (www.encore.org) aim to create a movement to give back to communities.

There is also another resource that you may be overlooking: SFS. Hopefully, a successful career and your relationship with us has put you on the path to financial freedom.

We can help you develop an income distribution plan using your current assets to subsidize your new, probably reduced income, and to ensure your monthly income is sustainable.

In addition to helping with the transition, we can help you throughout your encore career. We will continue to monitor your financial health and manage income distribution while also providing advice on things like health insurance, Medicare, and Social Security strategies.

Discuss the options for an encore career with us. It can be a great way to continue being involved in your community and it can help with your financial freedom.

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Women in Transition: The Loss of a Spouse

By | 2017, Money Moxie, Newsletter | No Comments

One of the hardest life transitions women face is the loss of a spouse. Whether it is from death or divorce, picking up the pieces and moving forward is challenging – emotionally and financially.  One of the hardest life transitions women face is the loss of a spouse. Whether it is from death or divorce, picking up the pieces and moving forward is challenging – emotionally and financially.

Where there were shared responsibilities, suddenly you are in charge of everything from getting the car fixed to managing the daily budget and long-term financial plan. It can feel quite overwhelming. Not to mention, this transition comes at an incredibly emotional time.

Adjusting to your new conditions will not happen overnight and may actually take several years.  This is a time of profound self-discovery for women, who may find themselves examining issues of identity, life meaning, and aging. Creating a support group – family, friends, and professionals – gives you a pool of people you can use as a sounding board that will keep your “best interest” in mind when providing advice.

While there will be many things to tackle over the next year, here are some important things to do in the short-term:

Locate and organize your important documents and financial records. It is easy to overlook something when you are dealing with emotional stress. Having a system for gathering and organizing financial records can provide some sense of control.

Important financial documents and records are generally the first items to focus on. The bills still need to be paid and the cash flow needs to be managed.

  • Checking and savings accounts statements
  • Investment account statements
  • Retirement plan statements
  • Stock and bond certificates

Legal documents may need to be updated, reviewed, or available for reference. These include:

  • Will
  • Trust
  • Power-of-attorney
  • Medical directive

Other important papers should also be organized so that you can determine if adjustments need to be made, such as updating ownership records or beneficiaries. Some may be required for documentation as you make changes.

  • Social Security statements
  • Insurance policies
  • Marriage, birth, and death certificates
  • Property deeds
  • Ownership titles – vehicles and recreational equipment

Keep in mind that everything does not have to be done immediately. Gathering this information will allow you to set up a system for tracking important details. Keep a notebook or use a computer spreadsheet that you can easily access for account numbers, phone numbers and addresses, who to call for information on accounts, professional contacts, and deadlines to monitor.

After the initial legal and financial matters settle, you will begin adjusting to your new financial circumstances. As you move forward, remember that it may be two steps forward and one step back. Take comfort in knowing you are making the best decisions you can, financially and otherwise, for you and your family.

Remember, you are not alone. Even though you believe you can do it all, reach out to us as your trusted advisors. We can help you navigate this new landscape, avoid some of the pitfalls, give you advice, and be a sounding board as you make important decisions.

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What Tech Employees NEED from Financial Advisors

By | 2017 | No Comments

I recently surveyed tech employees to find out how financial advisors can better address their biggest concerns. Here’s what they had to say.

Make me believe that my company is a unicorn, but help me save as if it isn’t.
Even with the tech boom, only 15 to 20 new companies per year will eventually reach the mark of $100 million in revenue. The good news for Silicon Slopes companies is that the majority of those companies are coming from outside the San Francisco area.i The new 2017 list shows that Utah is home to 4 Unicorns: DOMO, Qualtrics, Pluralsight, and InsideSales.com.ii

Are you working for a unicorn? Many tech employees sink all of their excess cash into stock options. This can create a huge windfall or a major money pit. Britt Hawley from InsideSales.com says that tech employees need financial advisors to, “help them understand, manage, and factor (stock options) into their financial planning.” A good financial advisor can help you create a holistic plan that still optimizes your stock option purchases while giving you some balance through your 401k, insurance planning, and other investment planning. Dan Preece from HealthEquity found this to be true when the company he works for went through an IPO; “One of the biggest things for me was having help navigating through stock options, IPOs.”

Part of a holistic plan is creating a way for you to reach your goals even if your company doesn’t get bought out or go public. There is a lot of value in diversification and multiple income streams. You should still be contributing 10-15% of your salary into your 401(k). If your 401(k) ends up being the smallest piece, then it is still icing on the cake. If your 401(k) is your main retirement, then you will be grateful you chose to save. You don’t want to have to delay retirement because you are still hoping that your company will go public.

Help me without taking all of my money
Too many times tech employees seek out good advice only to find a sales person, masquerading as a financial advisor, pushing the “hottest thing since sliced bread.” Kayden Holt from Pluralsight put it this way, “Employees need people to help them without taking all of their money.” Unfortunately there are a few rotten “advisors” that taint the whole bunch. Be wary if an investment planner is only playing on a one string guitar or sells you something that is too good to be true.

Seek out a holistic advisor, typically a Certified Financial Planner®, that will look at all of your goals and will devise a plan to help you get there. Also make sure the fees they charge are in line with the service provided and that they can prove the value they are providing. Tech employees “like to know in a tangible way how they are benefitting from a financial advisor,” stated Mr. Hawley. Good advice does not have to be expensive, but bad advice always costs you dearly, no matter how little you pay for it.iii

Educate me about how to invest.
Tech employees are more savvy than most. “They like to understand the why” behind an advisors investment actions, said Mr. Hawley. Good investment advisors will be able to explain the details of their investing process with its pros and cons. They can explain in concrete ways what they can do for you that you can’t do for yourself. If you want to do your own investing, they can help you do it. If you want to have someone else manage your money, they can do that too. Most importantly they will be a teacher. “Just as much as we needed grade school to learn how to read and write,” said Mr. Holt, “we need financial advice to learn, grow, and earn.”

Give me different ways to access advice.
The world of advice is changing. The old stockbroker model of paying commissions for stock trades is dying. In its place you can find different models: Do it yourself, monthly retainer, or assets managed for a fee.

Technology is changing the landscape and making better advice and trading platforms available to the masses. Many do-it-yourselfers are drinking in the information and trading their own account.

Paying a monthly retainer, like $100 a month, is a newer model. It allows you to call up and ask questions anytime you want. It also helps people start out on the right foot even if they don’t have a lot of investable assets. It begs to reason that if you are willing to invest $100 in a phone every month, you should be willing to invest $100 in your financial security.

If you don’t enjoy researching investment ideas, you don’t have the time, or you’re afraid of not knowing what you don’t know, then seek out a holistic fee based firm that will also give you advice as part of that fee. The fee based model makes sure the advisor’s interests are aligned with yours.

Shield me from taxes
Tech employees tend to excel and have some great financial rewards. You may also be working for a unicorn and end up with a windfall. In either case you are probably getting killed by taxes, figuratively of course. Mr. Preece stated that reducing tax liability is extremely important because “I’ve worked hard to earn what I’ve got (often putting in late hours) and I want to ensure that I can enjoy as much of what I’ve earned as I can.” The best financial advisors will work in concert with CPAs specializing in stock transactions to make sure you can shield yourself from as much tax as legally possible.

Tech employees have some unique needs. The right financial advisor can help address those needs and make sure your future is all that you expect it to be. As Mr. Holt said, an “advisor is one of the only ways to balance your money and invest in yourself.”


i https://www.strictlyvc.com/2014/12/01/many-tech-companies-break-year/
ii https://www.cbinsights.com/research-unicorn-companies
iii http://www.cbsnews.com/news/quest-for-alpha-the-final-10-rules-for-being-a-successful-investor/

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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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Sharla Jessop–President of Smedley Financial

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

Dear Friends and Financial Partners!

Smedley Financial Services, Inc.® is pleased to announce that Sharla J. Jessop, CFP®, was elected and has accepted the position as President of Smedley Financial, effective immediately. Sharla was elected by acclamation at our annual Board of Directors meeting in February 2017.

Sharla officially joined forces with Roger on March 1, 1994. Sharla had previously worked as an insurance agent for 10 years in Ogden and Salt Lake City. Shortly after starting, Sharla astutely passed four exams in four months.

Sharla became a Certified Financial Planner® certification holder on October 10, 2006. This includes meeting rigorous professional standards and passing multiple challenging examinations plus a 2-day, 10-hour comprehensive exam.

One of the best things about Sharla is her love for people. With Sharla, you, our clients, have always been first and foremost in her mind. She has always put your best interests first. Her ethics are above reproach.

Sharla has always been a powerhouse. From the beginning she has demonstrated great drive, energy, and ability. In so many ways Sharla has been fearless. She has met challenge after challenge. Sharla has always been teachable. If she didn’t know something, Sharla wouldn’t stop researching until she found the correct answer.

What you may not know about Sharla is that she is well-respected nationally. Many of her peers throughout the United States seek her input on a regular basis. Sharla has made time for mentoring new advisors throughout the United States.

So, at Smedley, we are entering a new era. I’ll still be around as the Chief Executive Officer (CEO).

Bullish Best Wishes,

Roger M. Smedley, CFP®

CEO

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Retirement is Full of Surprises

By | 2017, Money Moxie, Newsletter | No Comments

Retirement was only a few years away for Dan and Patti, and they knew it was time to get everything in order. Living in sunny southern California was wonderful, but they felt it was not the best place for them to retire. It was crowded, the cost of living was high, the traffic deplorable, and it would not allow them to be debt-free at retirement. All things pointed to finding a new city to retire to.

Five years ago, Dan and Patti started their search. Resources, such as Forbes 10 best places to retire, helped them create a list of potential cities. Some cities were easy to check off–they didn’t meet Dan and Patti’s list of must haves:

  • Small but with services including a hospital and modern medical facilities
  • Home price that allowed them to retire debt-free
  • Outdoor activities
  • Favorable tax structure
  • Growing economy
  • Community activities like continuing education

By 2015 they had created a short-list and began visiting the cities to get a feel for the local culture and people.

One year from their proposed retirement date they started planting the seeds in their new city. They purchased a home that could be rented until they were ready to move. They started preparing their home in California to go on the market. The wheels were in motion.

Throughout this five-year process they planned, reviewed, and updated their retirement and income distribution plans. This helped them feel financially confident about this exciting, but unnerving, life transition. It also gave them the financial framework to make their important decisions.

Today, Dan and Patti are living their retirement dream. They are excited about building their new network of friends, doctors, and social connections in their new community. Their new favorite saying is “We don’t have to if we don’t want to because we are retired!”

Some of the challenges they faced throughout the transition into retirement:
Timing the sale of their home
Continuation of medical coverage for a younger spouse
Slow response from employer’s human resource department regarding retirement benefits
Keeping important papers close at hand during the move
Finding temporary place to live until their new home was ready
Small things such as getting a library card while temporarily living outside of the city

Controlling your own time
Less stress and more fun is how Rolayne describes retirement. After a long and rewarding career she decided it was time to turn in her walking papers and she hasn’t looked back. Rolayne says she is busier now than she was before, but now she sets the pace.

Retiring gave Rolayne more time to help care for her aging father before he passed away; something she is thankful she was able do.
She lives an active lifestyle and as an outdoor enthusiast, regardless of the season, she can be found taking a hike or snow shoeing in the mountains. She also enjoys the flexibility retirement offers so she can spend more of her time volunteering for her church. Basically, she is doing what she wants, when she wants and loving every minute.

Retirement is delightful; however, there was some trepidation getting to this point. Navigating health care in retirement was a big concern. Rolayne found that putting the various pieces of Medicare and supplemental coverage together was frustrating and overwhelming.

While there are numerous resources available, it was still difficult to make sure she had the right coverage for her situation. Rolayne sought help from a health insurance professional who could review her options and help her find the right coverage.

Without a pension to provide a stable monthly income, Rolayne knew she needed a plan for using the nest egg she had created. Longevity runs in her family; her income distribution plan is designed with the goal of helping her nest egg provide income throughout her retirement years.

Looking forward to retirement
Retirement should be an exciting phase of life. While transitioning from a career into retirement can be stressful, a plan can help relieve some of that stress and provide a better understanding and framework for this chapter of life.

Using years of experience, we have helped clients navigate the many obstacles of this transition. Let us help you.

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Financially Empowering Your Adult Children

By | 2016, Money Moxie, Newsletter | No Comments

With life expectancy increasing each year, saving for retirement is becoming more important. You’ve worked hard your entire life, sacrificed to take care of others, and now, as you’re nearing retirement or are in retirement, it’s your time to live out your retirement dreams!

Sounds great, right? But then you realize the amount you’ve planned to live on each month is not enough because you are helping your adult child out each month financially. You could be helping them out with their mortgage, car loan, student loan, or the emergencies that come up each month; and you realize your retirement dreams will either have to wait or be downsized.

According to Consumer Credit, 31 percent of parents financially support an adult child on a monthly basis.1 If you find yourself in this situation, it’s time to set yourself free of the financial burden and empower your children to stand on their own feet.

Here are some ideas to empower your child:

Set boundaries
Let your child know you love and support them and want them to be able to take care of themselves without relying on you.

Have a candid conversation about your retirement plans and how your independence is impacted because of the money required to support them.

Explain that if something major does come up, you will be there for them. Define what those issues are and are not. For instance, compare medical emergencies to their kids’ need for new clothes. One you cannot plan for and the other you can.

For more information, the book, Boundaries: When to Say Yes, How to Say No to Take Control of Your Life by Henry Cloud is a great resource.

Create a game plan
Whether your adult child has just graduated from college or has a family of their own, it is critical to come up with a plan that will enable you to live your retirement dreams and allow your child to achieve financial independence.
Create a timeline long enough that your child will be able to get their finances under control.

Help them create a budget that will enable them to live on their current income. If expenses are higher than take-home pay, sit down and work through it by looking at their needs versus wants.

Budgeting is a great way to know how much money can be spent on items such as groceries, gas, clothing, etc. Once money is used up for the month, they will have to wait until the next month to purchase certain items.

Use personal growing experiences
Transparency can demonstrate to your child where you are financially and why it is important for your child to prosper without relying on you.

Use examples from your past where you wish you would have made better financial choices. Be sure to include what you learned and how the experience changed you. Your children will see that they too can make it out of a tough financial situation.

Financial conversations can be difficult. Yet, they are crucial to both your financial freedom and your child’s financial success!

1. http://www.consumercredit.com/financial-education/infographics/the-cost-of-supporting-adult-children-or-elders.aspx

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