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Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Financial Symmetry: Balancing Today with Retirement
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Now displaying: Category: general
Oct 9, 2017

Interest remains high of how to protect yourself after the Equifax Credit scandal. The good news is there are steps to take to mitigate your risks to guard your credit reputation. The bad news is that similar breaches have happened before and will happen again.

Listen this week as Chad and Mike discuss ways thieves will try and take advantage and the details on steps you can take to decrease your risk of having your credit compromised.

Sep 11, 2017

Picking out a small business retirement plan can be daunting. This is why we see many small business owners, or those with side hustles, not taking advantage of a retirement plan for them or their employees. This is often because they are overwhelmed by the number of plan options, plan administration requirements, fiduciary responsibilities or they think they are too expensive. On this episode we share some insights to potential options that are not as complicated or as expensive as you might think. Making this decision could put you on the fast track to significant tax savings while also saving more for your retirement goals.

You can find show notes and more information here: http://bit.ly/2xqX7kR

Aug 27, 2017

Once you hit your 40s, it becomes more important than ever to evaluate your financial plan and fill in any gaps in your future. Many of the planning tasks can be tedious or seem unimportant now, but you will thank yourself later when you look back on your conscious and careful financial decisions. Life throws a lot of curveballs and it’s easy to get busy and forget to keep your plan up to date. But taking time to get your ducks in a row will save you a lot of stress later on.

You can find show notes and more information here: http://bit.ly/2vdPDBd 

Aug 13, 2017

It doesn’t get much more stressful than preparing your child for college. From the testing and forms to the outrageous tuition prices, the process can truly be a nightmare without the right strategy. Cozy Whittman from College Inside Track joins us on the show today to share some really valuable information that could save your family tens of thousands of dollars over the course of the college process.

You can find show notes and more information here: http://bit.ly/2wMLyAp 

Jul 30, 2017

You know those things you know you should do - eat healthy, work out every day, sleep eight hours - but struggle to get done? We all do it, and skipping over financially healthy habits is another common way to cut corners.

Overlooking seemingly small aspects of your financial life now is just like skipping floss or skimping on sleep - they don't have a huge impact immediately, but can really affect you down the road. Tuning up your financial habits is a good way to keep yourself in good shape for the long run.

On another note, we'd love to see and hear how you're listening to the podcast. Walking the dog? On your commute? Let us know!

You can find show notes and more information here: http://bit.ly/2vekwVO 

Jul 16, 2017

There’s always more to learn when it comes to the world of finance. A great way to squeeze in some extra know-how this summer is through reading. So on this episode, we have a list of 13 great titles that you may want to add to your reading list, no matter where you are financially or what interests you have.

You can find show notes and more information by clicking here: http://bit.ly/2ukGIgu 

Jul 2, 2017

When was the last time you asked yourself: what purchases have I made in the last month that really made me happy? It might sound like a silly question, but as we'll reveal in this episode, the answer is key to making sure you spend money in a way that supports short- and long-term happiness.

In this episode, we're switching it up a bit and giving you a rundown of one of our favorite books: Happy Money: The Science of Happier SpendingHappy Money gives you the tools to spend in ways that can help you build and sustain happiness over a lifetime. And to make it even more fun, we're talking about popular movies that align with each of the book's five principles. 

You can find show notes and more information by clicking here: http://bit.ly/2tOcm2r 

Jun 18, 2017

How you take your retirement pension can be a more consequential decision than many people realize. The debate over whether to take your pension as a lump sum or as monthly payments can be tricky. 

On this episode, Chad and Michael share 5 things you should keep in mind when making decisions about your retirement pension. They cover some of the key terms you should know, and point out the importance of finding what age is the breakeven point in your calculations. Inflation is also key to factor into your decision, as well as how your pension will affect your spouse.  

You can find show notes and more information by clicking here: http://bit.ly/2sBJw8f 

Jun 4, 2017

We are so excited to welcome back Cameron Hendricks to the Financial Symmetry Podcast! He is back to discuss the journey of writing a book about financial decisions and how they affect your family dynamics. We chart his growth in thinking about financial planning and helping people achieve their financial goals.

You can find show notes and more information by clicking here: http://bit.ly/2rfNp0z

 

May 21, 2017

As with any financial decision, investing in real estate requires a lot of thought and planning. We've pulled together five of the most important things you should consider before you buy any time of investment property, be it residential or commercial.

You should also consider whether you're passionate enough about maintaining property to dedicate significant time and money to the endeavor. Real estate is no small undertaking, but can be fulfilling if you enjoy the process.

You can find show notes and more information by clicking here: http://bit.ly/2q5NC5T 

May 4, 2017

Everyone has a unique road to financial literacy. One common trait we all share is that we hope to pass our wisdom on to the next generation, and that they will learn valuable lessons while they are young. In today’s episode, Chad and Mike share their best tips and tricks for educating your children about money.

You can find show notes and more information by clicking here: http://bit.ly/2oTSL1K

Apr 13, 2017

Saving for retirement often feels like the biggest and most-talked about goal of financial planning. And while there's a lot that goes into successful retirement planning - healthcare costs, keeping track of spending, and tax planning - there are some pitfalls that a comprehensive financial plan can help you avoid. 

Today we're doing one of our famous Top 10 episodes and counting down the top ten retirement mistakes to avoid. We cover everything from how you should budget your spending, to unanticipated costs, to the tens of thousands you could save with intelligent tax planning.

You can find show notes and more information by clicking here: http://bit.ly/2oypJDI 

Apr 3, 2017

Today we're talking about one of the larger purchases you might make: buying a car. 90% of consumers say that price is their most important consideration when buying a car, and that negotiating is the most painful part of the process. Big purchases can be stressful and confusing, but there's no reason your financial planner shouldn't be able to make them easier. 

We walk step-by-step through the process of buying a car, beginning with determining what you can afford. You'll also have to consider the functionality of your new purchase, and what owning a car really means to you. We also cover the question of buying vs. leasing, and where to go to get independent consumer reports about cars you're considering.

You can find show notes and more information by clicking here: http://bit.ly/2nxfDAj 

Mar 16, 2017

The word "fiduciary" is being tossed around a lot lately, largely because of the Department of Labor's oncoming regulations. We thought it would be a good idea to talk about what fiduciary advisors don't look like, so you can choose an advisor that always puts your interests first.

First we talk about what fiduciary means and why it only applies to retirement advice. Then we go through a list of five examples of non-fiduciary advice so you'll know it when you see it. We cover the importance of transparency, duty of care, and the difference between suitable and fiduciary advisors. 

You can find show notes and more information by clicking here: http://bit.ly/2na4Iif  

Feb 21, 2017

For many of us, our parents getting older is a tricky situation to navigate. How do you respectfully offer your help? Ensure they get the best care? Know what to do with their bills and other finances?

For our first-ever interview, we're speaking with Cheryl Theriault of LifeLinks Care, a group of nurses, social workers, care managers, and other professionals that specialize in helping families navigate elder care. We've worked with Cheryl and her team in the past, and thought she would be an excellent guest to talk about this sometimes-sensitive topic.

You can find show notes and more information by clicking here: http://bit.ly/2kBFFiW 

Oct 11, 2016

New regulations for 401k regulations are putting even more responsibility on the employer. Understanding these new laws can be a complex, and time-consuming task. Join Chad and Mike as they walk through the basics of what employers need to know to ensure they are ready for the changes. 

Jul 19, 2016

This week, Chad brings on special guest Cameron Hendricks, CFP® to discuss his recent experience at the FPA NexGen conference, and why it is important for your financial advisors to attend conferences in general.

May 24, 2016

In this episode, Chad and Mike do a "Top 10 Ode to David Letterman" of little things you can do immediately to get your finances back on track.

Apr 13, 2016

Think about the last time you felt something surprised you.  If it was a pleasant surprise, the event likely exceeded expectations.  Then there’s the surprises that catch us off guard. A great example occurs around tax time each year as many people are surprised when they owe a large tax bill. It’s tough to find anyone that would describe that as a positive feeling.

If it stops at feelings, bad outcomes are generally avoided. It’s when events fall short of our expectations where our patience can run thin and our “do something” alarm begins sounding. When this type of decision making is applied to investing, it’s likely you find an average investor.

Who is the Average Investor?

The average investor is best described as a person attempting to time the market intentionally or unintentionally based on emotional influence.  By allowing their emotions to rule decision making, selling and buying of investments tends to follow the crowd.  This phenomenon is tied to research around the psychology from Daniel Kahneman who found that losses produce twice the mental anguish as an equivalent sized gain.

Cash flow data backs this up.  Studies show investors have more money invested in funds when they are doing poorly and fewer when they are doing well.

Most of us have either a personal story or a friend or family member experience of getting overly-exuberant in the tech markets of the late 1990’s or buying real estate just before the housing crisis in 2007.  The fact is we all have some of the average investor in us, which is why having a disciplined process in place is so important.

Common Behavior of the Average Investor

One of the most common identifiers around an average investor is the desire to chase performance of a hot area.  This plays out by investing in the best performing asset class over the last 12 months or selling all of your stock investments because a financial celebrity predicts a crash ahead.

This is one of the reasons, investor returns in Morningstar trail fund returns. A recent article by Morgan Housel, You May Be A Better Investor Than You Think, discusses how average investors don’t earn anywhere close to a benchmark.  The article uses the S&P 500 fund example and demonstrates how the 10 yr annual return is 6.3% while investor return is 4.4%.  Even further many are unfairly comparing their portfolio to the S&P 500 only when their portfolio is diversified across multiple asset classes.

A recent Vanguard study titled “Reframing investor choices: Right mindset, wrong market”, that demonstrates how behavioral performance chasing has a negative effect when investing across all asset classes.

Past performance has a huge impact on the average investor’s decision making.  This is demonstrated in every market bubble that’s existed from tulips in the 1600’s to technology stocks in the late 1990’s.  Many of us remember this vividly, as the excitement around the S&P 500 peaked after investors experienced 15-20 years of earning double digit percentage returns every year in 1999 only to experience a much lower result in the next 15 years (ending 12/31/2015).

There are many studies that demonstrate how the average investor typically is penalized anywhere from 1.2% to 3% annually by making emotional decisions around their investments.

Requires Discipline

Even mutual fund managers experience poor investor returns at points. But the best ones, trust their research strategy and stick it out.  Another study demonstrated that outperformance over the long term goes hand in hand with shorter periods of underperformance as 96% of 10 year outperforming mutual fund managers had at least one three year period when they underperformed, and 47% were actually in the bottom 10% over at least one three year period.

Average investors tend to throw in the towel at some point during that 3 year period of underperformance. This is when their FOMO or FOLIA takes control– the Fear of Missing Out or the Fear of Losing it All.

Learning how to manage these emotions and implement a disciplined process is the first step in minimizing average investor type behavior.

How Do You Avoid Being The Average Investor?

Avoid short-term temptations or reactions and focus long-term – Studies demonstrate the average individual stock could move 47% to -39% over the next year but that range shrinks to 7% to 17% annualized over a 20 year period. Many investors capitulate at the wrong time, resulting in a mistake that can be detrimental to their long-term picture.

Start with a plan – Implementing a savings strategy with a disciplined investment approach helps avoid ebbs and flows in short-run.  By focusing on what you can control, the daily headlines become easier to digest.

Hire an advisor – This gives you a calming voice that can ease the uncertainty by providing historical perspective.  There’s a reason even our financial advisors aren’t their own advisors.  Finding an independent, objective fee-only financial advisor is a great step to helping you minimize average investor like thinking when it comes to your investments.

Mar 29, 2016

Young advisors often have more passion, technical knowledge and a longer runway than older financial advisors.

If we look like we could be your son or daughter, then you are likely on the right track to finding a financial advisor to form a relationship with. While we may look young, that doesn’t mean we are inexperienced or harder to relate to. Let me explain:

We entered the financial planning profession during the age of the rise of the comprehensive financial planner and we’ve had the unique opportunity of learning from a team of high quality financial planners. Many firms over the last few years have emphasized the hiring and developing of young talent. Financial Symmetry is no different and has been hiring and promoting advisors from within throughout the 15 year history of the firm. Young advisors are developed through an increased level of responsibility as well as the chance to benefit from years of observing older advisors in the firm. We have seen what type of advisor we want to be and have determined what approach best fits our personality and goals. We therefore know what we want to communicate with our clients and how to do it.

Think about those you are associated with that you trust the most…likely friends and family top the list. You have built a relationship with these individuals over time and have trusted their recommendations whenever you seek their advice. I can attest that the FSI advisors strive for this type of relationship with their clients. We want to get to know you on a personal level as well as your family so we can best see and understand your financial goals.

It is also easier to relate to us than you may think. After all our parents are just a few years from retirement themselves. We have observed firsthand from them as well as their friends and co-workers what their needs and concerns involving retirement and overall financial planning include. We are accustomed to conversing and socializing with people older than us as well as our clients are accustomed to communicating and interacting with individuals of the younger generation such as their children.

Benefits of A Young Advisor

There are some common differences you will find though, but I think they actually benefit us in a way that they won’t for older advisors.

  1. Technology: Yes, the amount of time we check our phones and social media sites may be unimaginable to you. However given this new technology age, knowledge and industry influencers are right at our finger tips. Every day we learn new and innovative ways to help us serve our clients better through reading of blogs, market commentary, and even sharing and learning ideas with other financial advisors. We are able to improve our processes utilizing the latest financial industry technology in order to better serve our clients.
  1. Retirement: We aren’t retiring soon…and that’s a good thing! As a result of this when we engage in a relationship with a client, we intend it to be for the long haul. If you are closing in on your retirement and are working with an advisor who is in the same stage of life as you then “guess what?”…they are going to retire soon as well! The years prior to and immediately after retirement can be some of the most challenging years as you juggle financial decisions and you want to make sure you have a reliable advisor by your side throughout this process, not one that is thinking about their own retirement and may pass you off to a new advisor during this time of need.
  1. Passion and Knowledgeable: No client wants to feel as if they are just a number, which can often happen when there is a lull in the advisor/client relationship. With a younger advisor we are “hungry” and “passionate” and helping our clients achieve their best financial life is our primary goal.

When you combine this passion with knowledge this can be a dynamite combination that can truly be the defining mark of an advisor/client relationship. At Financial Symmetry all of our advisors have obtained the CERTIFIED FINANCIAL PLANNER™ designation. As a result we have spent years in study, obtaining experience, and practicing in a fiduciary manner in order to engage in practices that are in the best interest of our clients.

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