Back to Basics (January 2019)

Everyone makes financial decisions.  People make them one at a time, with different people, at different points in their lives.  This creates a 'junk drawer' effect in people's financial plans.  They have 'stuff’, but no clear picture.  Because we use a model, you have a clear picture of your plan.  And not just a Balance Sheet that shows assets, liabilities, and net worth (appropriate for a business, but not people).  You have a ‘financial MRI' at your disposal.  It is a diagnostic tool.  Because of the model, we can coordinate and integrate all of your financial decisions.  In many cases, this creates more efficiency by lowering costs and increasing output, while improving protection benefits & keeping risk level the same or even lower. 

Three things to focus on this month: 

1) Defense wins championships.  Still.  This was supposedly the year of the Offense in the NFL, with the Kansas City Chiefs being the poster child of this ‘new norm’ since September.  The ‘experts’ said this year it was going to be different.  It wasn’t.  The Patriots didn’t play a flashy, glitzy brand of football on Sunday.  They just won.  And that’s what it’s about.  On your model, the Protection Component and Savings drawers 1-6 are your defense.  Not flashy, not glitzy.  But they will help you win.  If your defense is not positioned properly, you will not ‘win the game’ of retirement and you can be knocked out of the game for good before you even get there.  Let's review why you are positioned the way you are and if we can improve in any way. 

2) The 3 phases of financial planning are: Accumulation, Distribution, and Conservation/Transfer.  Each phase must be planned with the others in mind.  Most financial plans focus on one at a time.  This leads to inefficiency and in some cases disaster.  The right decision in the micro can cause calamity in the macro.   

3) If you are still in the Accumulation Phase of your financial life, you need to save at least 15% of your gross income each and every year in order to overcome the economic eroding factors and build long-term wealth.  If you are not saving at this level, is there something you can do this year to get you closer to that mark?  Call me to discuss.


I hope that 2019 will be a great year for you and your family in every way that you measure success.  I also hope that Tom Brady gets his hair messed up in Disney World.