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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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Now displaying: September, 2020
Sep 21, 2020

Every 4 years it happens: an election comes along and threatens everything. Or so it seems.

Video recap: https://youtu.be/7SkvyKEXH6s

Regardless of how you feel about the candidates, we’re here to discourage you from making fear-based financial moves. Learn how to overcome your emotions so that you don’t derail your careful long-term investment strategy. 

The media won’t help you achieve your financial goals

It’s hard to get away from the drama of the election coverage. It’s everywhere you look: on the TV, in the newspapers, and even from the notifications on your phone. This kind of round the clock, in your face news coverage can heighten your anxiety about the state of the world and even make you worry about your investments. It is important to remember that the media is not there to help you. Its goal is to sell advertising, not to help you achieve your financial goals. 

While 2016 may seem like a distant memory, many investors were concerned at the time that a Trump victory would surely tank the stock market.  We fielded a lot of calls leading up to the 2016 election discussing if a more conservative approach should be taken, at least until we had more certainty.

While Trump’s victory was a surprise to many 4 years ago, it certainly was not devastating for the stock market.  In fact, the S&P 500 with dividends returned 21.83% in the following calendar year of 2017. 

Investors who moved into cash to await more clarity would have swiftly regretted their decision.  Check out the chart linked below which shows annualized returns for each president dating back to 1969 with the red and blue bars depicting results for Republicans and Democrats.

www.financialsymmetry.com/how-should-i-position-my-portfolio-before-the-election

How to stay focused on long-term financial results during an election year

Staying focused on your long-term financial goals can be a challenge when the short-term seems so uncertain. People often feel tempted to time the market when the world feels up in the air. It’s important to remember that the market is influenced by many other events, not solely the election. So even if it seems that the election is the only thing going on, you need to stay focused on your long-term financial goals, stick with your investment plan, and avoid market timing.

Focus on the facts to help you through uncertainty

One way to help you stay focused on your long-term financial goals is by looking at the facts. If you were thinking that this might be a good year to sit out the stock market, you may want to think again. On average, the stock market return in an election year is 11%, which is well above average.

Another surprising fact is that it doesn’t matter to your portfolio who is in the White House. There is actually no correlation between stock market performance and which party leads the country. Listen in to find out which two presidents saw the same economic growth during their first three years in the Oval Office, the answer will surprise you.

Focus on what you can control

In investing, there are many factors that are beyond your control. However, that does not mean that your entire financial life is uncontrollable. Actually, the factors that you can control have a lot more to do with your financial success than which investments you choose. Think about all you can control: your cash flow, when you need money, when you stop earning income, what your income sources in retirement will be, how you pay for healthcare, and your estate planning. These controllables are much more important to your financial well being.

Outline of This Episode

  • [1:42] We go through this emotional roller coaster every 4 years
  • [7:35] Sometimes the best thing to do is nothing
  • [10:24] Have an investment plan and stick with it
  • [13:14] Focus on what you can control
  • [14:44] Today’s progress principle

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Sep 7, 2020

2020 has been a year of change. The pandemic has given people an opportunity to rethink their lives and many have been rethinking their career.

Video recap: https://youtu.be/0RCME_Y8bdI

Whether you are one of the millions of people that have been forced into a job change or whether you are considering a professional pivot on your own, there is a lot to think about when changing jobs.

On this episode, Grayson Blazek and I will walk you through all the considerations when taking on a new job. If you are rethinking your career listen in to hear how you can take advantage of your human capital. 

Think about the total compensation not just the salary

Often when we consider a job offer there is only one number we look at. But there is more to a job than the base salary; it is important to consider the total compensation. The base salary helps you plan your monthly expenses but understanding the bonus and stock compensation is also important. 

When thinking about the bonus structure of a potential job you’ll want to consider the target. Ask what the confidence in that target is. You’ll also need to understand how the bonus incentive works. How often does it payout? Is the bonus based on your personal performance or on the performance of the team?

Some other financial considerations are the stock options and the sign-on bonus. That hiring bonus can be enticing, but don’t let it cloud your judgment. Remember a hiring bonus is only a one-time payment. 

Consider the benefits package

When comparing job offers you’ll also want to compare the benefits package. Make sure to request an employee benefits brochure if they haven’t given you one. The benefits package is often seen as secondary to the financial compensation but those benefits can add a lot of value to your life.

First of all, you’ll want to consider the healthcare plan. Does the company offer one? How does it compare with your current plan? How much of the plan is covered by the employer? Do they offer an HSA?

Healthcare isn’t the only benefit to consider. What about life insurance and disability? Does the company offer a student loan repayment program? How about a fitness membership. Consider the entire benefits package and how it could add value to your life. 

What is the retirement plan like?

In addition to the health benefits and salary, you’ll also want to investigate the retirement plan that comes with this new position. Do they offer a 401K? Will they match your contribution? What are the plan costs? What about vesting, will you actually realize that vesting period? Do they offer other ways to save for retirement?

Your human capital is one of the biggest assets you have and the way you spend it will greatly impact your financial future. So when considering a job transition, there is much more to think about than the base salary. Tune in to this episode to discover all the details you need to consider when evaluating a job change.

Outline of This Episode

  • [2:50] Think about the total compensation not just the salary
  • [8:30] What is included in the benefits package?
  • [13:42] What is the retirement plan like?
  • [20:22] Does the position include an employee stock purchase plan?
  • [24:31] What about the flexibility factor?
  • [27:54] Consider all your details

Resources & People Mentioned

Connect With Chad and Mike

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