Financial Life Stages: A Journey

The Financial life Stage Journey

Have you ever uttered the words: “if I only would have known that 5,10,15 years ago!”

Well, you are not alone. Many people have felt the sting of hindsight: whether it was from a lost opportunity, a failed relationship or a shortfall in financial circumstances. Our firm attempts to give you the right information now, so you avoid saying, “I wish I knew.”

Mark Stevens, principal, has spent years researching ways to help others avoid what he calls “financial blockers”.  These “blockers”, whether learned through childhood, family background or developed as young adults, essentially are the “brakes” that hold some people back from future financial independence.

 Our firm has developed strategies that have assisted many hundreds of clients achieve their financial goals.  Below are some questions we would help you answer.  We have grouped them by age.  All groups assume a marriage or dependent situation.

Age 21-40– P.O.D.S

Power of Two –

When two parties join in a marriage, therein lies a powerful financial opportunity. You probably agree that you lived fairly well on your own, had your own place, transportation etc.  So why, when two parties come together, isn’t there an abundance of savings potential?

Our firm helps newly married or dependent couples align their financial situation to avoid financial pitfalls before they occur.

Offensive and Defensive strategies:

When two people develop a life together, there is passion, yes, and of course romance. But we are sure you also are aware that ego, power struggles and financial miss-communication are typically also present.  Part of the struggle is due to one party pushing offensive strategies, like “we need to save more”, while the other party is thinking defensively, like “he needs more life insurance”.

Guiding our clients through these discussions in a non-bias way helps alleviate much of the financial stress associated with new unions. Simply put, work out the bugs with us, and argue about the drape colors, not your finances.

Debt:

Are you aware that Mark Stevens, principal, teaches his clients about positive and negative debt?  Utilizing debt strategies are a powerful tool to help the “newly unified” establish a sound financial lifestyle that does not hinder their ability to enjoy their new life together.  When you meet with one of our consultants, be sure to bring your current statements of debt with you, as analyzing and including these debts are essential to your financial situation.

Survival kits for the “newly unified”

Is happenstance your consultant?  Are you really sure what benefits you and your spouse have at work, or guessing?  Below is a sample of a basic survival kit all “newly unified” couples need:

1)      At least 10 times income replacement through a Life Insurance policy(ies).

2)      At least 60% of your incomes, covered by disability insurances.

3)      One week’s wage should equal monthly mortgage with taxes, no higher.

4)      Savings should be in thirds: one-third short term, one-third mid range and one-third long term.

5)      Debt reduction paramount to savings.

Our consultants are trained to help you wade through the myriad of options and techniques to address these important areas.  When you visit with us, have your life policies, investment statements and employer benefits booklet with you.

Ages 40-60 The 4 “P’s”

If the assumption is correct that you and your spouse/partner have been together for sometime, planning here gets easier for us and more complicated for you.

Mark Stevens, principal, has often called this stage “2:00 am financial wake up call”, sighting that many people in this age group awaken at 2 am with the cold shiver and a “doe in the headlights” look, finally worried about their financial circumstances. Mr. Stevens often says, “if I had office hours at 2 am, I would be a baZillionaire.”

We have all said to ourselves: “where am I/we going financially?”

We understand.  Juggling children’s schedules, bills, vacations, schooling, love, and relationships, is daunting.  Why then, add financial or monetary stress to the mix?

What are the four “P’s”:

Participation

Perform/Performance

Parallel

Prepare 

Participation:

One of the major obstacles facing this age group is the realization that unlike their parents, they will be mostly “going it alone” regarding their latter years security.  The defined benefit or “corporate pension” as our parents and grandparents knew is all but gone; leaving 401k or other “you fund your own” plans.  The obstacle is this:  What is a realistic approach to the amount needed for the 40 to 60 age group to replace dad’s “old man pension”.  As Mark Stevens pointed out in “What are we teaching our children – Revisited”, adequate replacement of guaranteed retirement pensions (protected by the government) force individuals to save in the millions.  That’s a big “M” friends.

Along with our normal consultation process, our firm focuses on helping clients maximize the funding and performance of the retirement savings they have through their current employer.  The participation piece involves restructuring debt (if necessary) and looking at current taxation to help our clients “find” the needed monies to boost savings.  Together, this comprehensive re-assessment attempts to optimize a client’s current strategy, offering better opportunity for future financial independence.

Perform/Performance

Performing a simple review of earlier savings is the simplest way to upgrade a person’s financial situation.  Jobs are more secure, incomes have increased and simple age related humbleness is found while counseling this age group.  Mr. Stevens, when referring to this age group, says, “the pupil is now ready, and the teacher has arrived”.  Meaning much of the youthful misconceptions and understandings of years past now yield “we need and desire guidance!”

Our firm, like most firms, wish to help our clients maximize the performance of their savings and investments. But at what risk? By using state of the art questionnaires, our consultants work hard to establish your personal risk profile, always mindful that, when investments are concerned, “ what goes up, most certainly can come down.”  This coupled with our independent business structure, offer you investment strategies based on your needs, rather then what some major corporation may mandate.

 Parallel Consultation

What is parallel consultation?  Unlike previous generations, it is quite common for parents to be funding for college and retirement while beginning to care for an older parent at the same time.  Marketers, in their simplistic wisdom, have called this the “sandwich generation.”  Of course, sandwiches are typically eaten, just like a person’s ambition, tolerance and assets, as caring for, preparing for, and saving for multiple parties at the same time is a daunting task.

We have developed many strategies to help this group focus on their own future while at the same time developing strategies to multi-task their financial picture to include others. 

Wrapping up this age groups planning? Always look to our fourth “P”.

Prepare for the “second lifer” age group.  60-80

We all know that 30 year olds are the new 20’s, the 50 year olds are the new 30’s and the 60 plus year olds, simply stay 60! This phenomenon has been unparalleled in our society, and as people live longer; the consultation process must be "re-tooled" as well.  While the “sandwich” generation is still considered part of this age group, there tends to be a significant amount of extra funds available to continue establishing and saving wealth.  Our firm utilizes a variety of asset management strategies that look to maximize performance when available, yet always watchful of downside occurrences in the market.  This coupled with the start of asset protection, estate succession and career exit strategies make out firm unique. By working with your other advisers, like your attorney, we can look to facilitate your goals to take care of “Mom and I” while intelligently looking to “protect and pass” assets to the next generation.  Note: Intelligently!

It is our firm’s beliefs that at this point, our clients need to begin to understand what kind of impact passing on unfettered assets will have on the next generation.  Why? Because, nine out of ten inheritances fail to succeed the 3rd generation (source: The Midas curse Cochell Zeeb 2005) Understanding Americas “Affluenza” within generations is key in this planning process, whether you have millions in assets to invest or not.

80 to end of life.  “Rebirth”

“Sitting with my eldest client, age 99 (2006) is always a blast”, says Mark Stevens, principal, “she offers me her experiences, tempered with the satisfaction of a life well lived.  She is altruistic in her intentions; as a matter of fact, we are positioning assets to house, feed and entertain 80 plus family members for her 100th birthday!”

Final life consultation require the skills of many advisers, all who work in concert for the benefit of the client. We believe that the elder is the “Team Owner” and we are merely their team managers.  Our firm views this final relationship with great pride and reverence.  End of life issues, and many non-financial issues must be bridged here,  requiring a special tempered skill set, and patience on the part of our advisers.  Rest assured, the elder owns the team, and our number one goal is for the elder to “stay in control” of the team they own.  We always stand beside our elder clients as team managers; protecting their interests, mindful of the person who really “owns the team”.

The various financial life phases are both separate, yet interconnected by a variety of non-financial beliefs and attitudes shown by the prospective client. I encourage you to schedule an appointment soon, so you too can help increase your personal “life stage”

 Mark J. Stevens