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Staying Invested During Volatile Markets

Staying Invested During Volatile Markets

Economic Analysis by Jeff Platt and Kai Kramer

 

You may have been watching the news and wondering about the recent market turbulence. We see several main factors affecting markets at this time:

    • Unemployment rate increased from 4.1% to 4.3% in July
    • Jobs growth totals 114,000 in July, coming in lower than the expected 175,000
    • Jobless claims for the week ending July 27 climbed by 14,000 to 249,000

Additionally, the Bank of Japan raised their interest rates last week from 0% – 0.1% to 0.25%. The rise in interest rates has caused the yen to appreciate versus the dollar, which is putting an end to a common strategy called a “carry trade.” This is where investors borrow in a cheap currency to buy other (higher yielding) global assets.

 

So what are we doing about the market drop?

We have all heard the phrase, “Don’t just stand there; do something!” John Bogle, founder of Vanguard, modified this for long-term investors to say, “Don’t do something; just stand there!” In today’s investment environment, both expressions are true. This may sound familiar to many of you as it is exactly what we wrote in our quarterly newsletter of April 2020 when we saw a similar market drop at the beginning of the COVID-19 pandemic.

You might also remember how we stayed the course through that turbulent time by maintaining equity positions, rebalancing portfolios to long-term strategic asset allocation (IPS), and doing some tax loss harvesting. These responsive moves benefited portfolios.

We believe that the recent movement in the markets may be another opportunity for investors with a long-term perspective.

 

Strategically, we will continue to maintain each client’s asset allocation because even if we were 100% convinced a recession was coming and we sold out of equities, we would still need to decide when to reenter the market and we DO NOT want to miss that window.

The graph below shows how annualized returns would diminish by missing the 10, 20, 30, 40, 50, and 60 best trading days of the 21-year period between 2002-2023. During that time, the S&P 500 would have returned 9.0% annualized. If you missed just the best 10 days, the annual return fell to 4.8%. If you missed the best 30 days, your returns would be negative! This illustrates the difficulty of trying to time the market and how detrimental this could be to one’s portfolio.

Maintaining portfolio allocations is more difficult when markets experience this type of volatility. Over time, however, investors are compensated for their stock market exposure. Remember, too, that the proper asset allocation is the one you will not abandon during difficult times.

We hope this information provides you with some peace of mind at this time. If you have any questions about what you are seeing in the news or about your portfolio, please do not hesitate to get in touch.

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Your Ultimate Guide to Dividend Investing

Your Ultimate Guide to Dividend Investing

The best any expert can say about the stock market right now is that future returns will be uncertain, and volatility may be the new normal. Although there are slivers of light shining on some parts of the economy, many storm clouds darken the near to intermediate-term outlook on the stock market.

 

Make no mistake; this is not a gloom and doom stock forecast. Quite the contrary, investors should maintain a cautious optimism and remain invested in the stock market, albeit fully hedged against uncertainty and volatility.

 

One of the best strategies for accomplishing this is investing in dividend stocks as a portfolio stabilizer and a source of returns in an uncertain economy. In order to help you decide if dividend investing is right for you, we’ve put together this comprehensive guide. Of course, always consult with your financial advisor to understand what you’re buying and why you’re holding it in your portfolio.

 

What is Dividend Investing?

 

Dividend investing is a strategy focusing on investing in companies that regularly distribute a portion of their profit as dividends to shareholders. The most direct way a business can affect shareholder performance is through a cash dividend. A cash dividend is simply a return of investment to the shareholders. Each year, or each quarter, the board of directors announces a dividend that is paid in cash—sometimes in stock—directly to shareholders. 

 

The better-performing companies will periodically increase their dividends. Some companies have been paying dividends for decades, so it becomes an expectation and a way to attract new investors. Once a company starts paying a dividend, it will go to any length to continue to pay it because not doing so indicates the company may be in trouble. 

 

Creating Your Dividend Investing Strategy 

 

Not all dividend stocks are created equal. As with any investment class, it’s important to establish strict criteria for selecting the stocks that best match your profile and meet some standard of quality. Chasing the highest yields can be as risky as investing in junk bonds. Over the long term, companies with an established record of uninterrupted dividends, a clean balance sheet, and a positive earnings outlook will outperform the higher-yielding investments in terms of both dividend income and capital appreciation. 

 

When investing for the long term, diversification is always the key. With dividend stocks, you can invest across many sectors and among various dividend-paying investments, such as common stock, preferred stock, real estate investment trusts (REIT), ETFs, and mutual funds. 

 

What to Look for in a Dividend-Paying Company

 

With dividend stocks, investors need to apply the same due diligence they would use to purchase any stock, careful not to focus strictly on the dividend yield, which can be especially alluring after the stock price has fallen. It would be essential to know why the stock price fell and whether there may be the possibility of a dividend adjustment. 

 

One of the most important factors to consider is the company’s debt-to-equity ratio, which could put pressure on the dividend during a down economy if it is too high. Dividend payers that have no trouble generating excess cash flow can be relied upon to pay their debt and dividend in any economic environment. 

 

You also want to look at a company’s dividend payout ratio, calculated by dividing the annual dividends per share by earnings per share. The dividend payout ratio represents the portion of net income the company is paying out as cash dividends. Companies with a payout ratio of less than 50% are considered financially stable, with the potential to increase earnings over time. 

 

What to do with Cash Dividends

 

Investors need to decide what to do with their cash dividends. If the company is performing well and driving solid investment performance, you probably want to reinvest them back into the company. That drives investment performance further. However, if the multiples become unattractive over time, reinvesting in the company may not make sense. That should prompt a decision as to whether the stock is still attractive.

 

Whether you hold or reinvest your cash dividends in the company, they are subject to income taxes. The advantage of dividend income over other forms of income is it is taxed at a maximum rate of 20% (plus a 3.8% surtax for the highest-earning taxpayers). The tax rate for taxpayers in the lower tax brackets is 15%. 

 

Why Now Is the Time to Invest in Dividend Stocks

 

While high-quality dividend stocks are not likely to generate market-leading returns in any given year, they will lose less money on the downside, which is the key to growing portfolio value over the long term. Investing in high-quality dividend stocks is not about generating outsized returns; instead, it is about generating a rate of return meaningfully greater than the inflation rate while preserving capital during protracted market declines. Dividends are always positive, so they are a counterweight in down markets.

 

Many investors are unaware that dividend yield and growth have accounted for approximately 40% of long-term stock returns since 1930. During decades when inflation averaged more than 5%, they accounted for 54%. 

 

Eventually, the U.S. economy will right itself, and sanity and stability will return to the markets with large-cap, dividend-paying companies leading the way. Until then, and even then, dividend stocks will provide an effective counterweight to most risks investors will encounter, including inflationary pressures (or stagflation), increased market volatility, interest rate fluctuations, or market declines. There has never been a better time to make dividend stocks an integral part of your investment portfolio.

 

Adding a dividend stock component to your portfolio will not only increase your tolerance for volatile markets, but it can also become an enduring source of income regardless of the movement of stock prices, inflation, and interest rates. 

 

Ready to find out if dividend investing could be the ballast you need in uncertain times? Or perhaps a source of income you could use to fund your future retirement?

 

No matter where you are in your investing or retirement journey, our team at Platt Wealth Management can help. Simply schedule an appointment with one of our trusted advisors to discuss your opportunities today.

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

10 Money-Saving Tips for Planning Your Next Vacation

10 Money-Saving Tips for Planning Your Next Vacation

Vacation travel is on the rise, but so are travel costs. Increasing demand is driving up gas prices, hotel, and airline costs, making planning the perfect vacation challenging for most people. However, with some thoughtful planning using these cost-saving tips, you can stretch your travel bucks a lot further on a memorable vacation.

 

Set a Strict Budget

 

Don’t start booking travel until you determine how much you can afford to spend on your vacation. Allocate specific amounts for accommodations, transportation, food, activities, and souvenirs. It helps to get a baseline understanding of costs associated with where you’re going to see how realistic your budget is. 

 

Travel During Off-Peak Seasons

 

Traveling during peak season ensures you will pay higher prices. You’ll find more affordable options when you plan your travel during off-peak seasons or less popular months, and you’ll avoid crowds. Studies show that airfares for holiday season travel averaged 41% more than those booked for non-holiday season travel. They also show an average of 25% savings when booking flights six months out as opposed to one to two months out. 

 

Be Flexible with Dates

 

Flight and hotel prices can fluctuate significantly from one day to the next. So, be flexible with your travel dates and use fare comparison websites to find the lowest-priced travel days. For example, flying on Tuesdays, Wednesdays, and Saturdays is typically cheaper than flying on Mondays and Fridays, which are busy commute days.

 

Open a Travel-Friendly Bank Account

 

Whether you’re going on a big trip or a small one, it’s likely you’ve been putting money away to make the trip happen for some time. It’s often helpful to keep this money in a separate account so you can see how much you’ve accumulated in advance and track spending more easily while on the trip. It’s hard to see what you’ve blown through on a trip so far when you’re looking at your everyday bank account with bills and other reoccurring charges coming out.

 

Plus, you’ll want an account for traveling that allows for unlimited ATM withdrawals abroad and won’t charge you transaction fees. This is huge and can easily save you hundreds of dollars!

 

Consider Alternative Accommodations

 

Look beyond traditional hotels. You can often find great vacation rentals through Airbnb and Vrbo, which can be more cost-effective, especially if you’re traveling with a group of people. Watch out for those extra fees, though. Make sure you know what you’re signing up for before you sign your entire entertainment budget away in exorbitant cleaning fees!

 

Save While You’re There

 

Travel budgets tend to blow up around all the small stuff, such as dining out, transportation, activities, and souvenirs. While it’s fun to splurge once or twice at a nice restaurant, you can save a substantial amount of money by dining in, which is why it’s essential to find accommodations with a kitchenette. 

 

You can also save by shopping for groceries and snacks so you can always have food on hand. Also, you won’t have to buy expensive bottled water at the airport or in tourist locations if you pack your own water canister. 

 

Research Free and Low-Cost Activities

 

The costs of activities and attractions can often exceed other travel costs. Get the most out of your vacation bucks by looking for free or low-cost activities like free walking tours, museums with free entry days, and outdoor activities like hiking or picnics to layer on top of a couple of well-chosen attractions. 

 

Pack Light

 

If possible, confine your packing to carry-on luggage. This will save you those annoying check-bagged fees and make it much easier to get around, especially if you’re using public transportation.

 

Use Public Transportation

 

Public transportation is often cheaper than renting a car or taking taxis. It’s also a great way to experience local culture. 

 

Sign Up for Travel Deals and Rewards Programs

 

If your travel plans are far enough ahead on the calendar, consider joining a loyalty or rewards travel program offered by airlines, hotels, and credit cards to accumulate points towards free air, car rental, and hotel accommodations. Some hotel credit cards offer free hotel night certificates. Plus, some cards offer additional benefits and perks, such as upgrades to elite status. 

 

Look for Bundled Deals

 

Some online booking websites offer bundled travel deals that can save you money by booking your flight, hotel, and car rental together. Shop and compare a few booking websites to see who offers the best deal. 

 

Happy Traveling!

 

We all love to travel, and we all love to save money. Unfortunately, the two don’t always go hand in hand. By incorporating these money-saving tips into your vacation planning, you can enjoy a memorable and budget-friendly trip without compromising the overall experience.

 

Happy traveling!

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

5 Tips to Stay Calm During a Market Downturn

5 Tips to Stay Calm During a Market Downturn

Is the economy slowing down? How will rising interest rates impact my finances? Is a recession around the corner? Scroll through any newsfeed and you’ll hear these unsettling questions. And while the headlines can be alarming, we remind our clients of the benefits of staying calm, cool, and collected—keeping their eyes off the headlines and focused on the end goals we have set up for them. 

 

Stay Invested

 

Some of the costliest mistakes investors make come down to one thing and one thing only…their emotions! If you have a sound investment strategy, there’s no reason to “jump ship” in a downturn. This is called panic selling. Panic-selling is when you sell your assets when values are down to try and avoid further loss, with the intention of “jumping back in” when the market has recovered. The thing is, though, that we never know when or where the bottom is, nor do we know when it will recover.

 

Remember Big Dips Can Precede Large Surges

 

And, because the market has some of its best days right after some of its worst, most investors miss out on the recovery and end up re-buying similar assets at a higher price—plus the liability on tax events they may have triggered by liquidating their assets. Just consider those who sold at the bottom of the March 2020 COVID-induced drop and missed out on the miraculous, V-shaped recovery we saw over the next two years.  If fear prompts you to sell, you could miss the upside.

 

Take Your Eyes (and Ears) Off the Market

 

Where focus goes, energy flows. The more you buy into the headlines, the more emotionally affected you may be by them. But no matter how diligently we watch the headlines, none of us can control what will happen with the stock market. So, if you feel the noise in the media tempting you to make a financial move you might regret, just tune out the noise. And of course, connect with your financial advisor to discuss your concerns. This is often all that is needed to restore a sense of peace and confidence in the financial plan.

 

Focus on What You Can Control

 

There are some aspects of our financial lives that we can control with our actions, and others we cannot. As discussed earlier, we can’t predict market volatility – and we certainly can’t control it – but we can understand that its disruptions are temporary and won’t result in permanent loss. As long as your advisor is re-balancing and speaking with you about how they are handling your portfolio during the downturn, it’s unlikely there is much needed from you—except, of course, your trust in the process, the plan, and the long-term goals your advisor set up for you.

 

Lean on the Help of Your Financial Advisor

 

Your financial advisor is here to help you with more than just investment management, tax planning, and retirement planning. We are here to help you stay even-keeled and level-headed when major and minor events threaten your cool. Of course, we update, re-balance, and diversify your portfolio ongoing to make sure you stay on track to reach your goals, but if a market downturn has you worried, we’d be happy to go over your financial plans with you at any time.

 

Remember, the market moves up and down daily. Market downturns (and upswings) are par for the investing course. We’re here to help you make the most of each situation to maximize your returns long-term.

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Is the 60/40 Portfolio Allocation too Risky Now?

Is the 60/40 Portfolio Allocation too Risky Now?

For over seven decades, the 60/40 portfolio allocation has been the stalwart strategy of retirement planners with a high degree of success until recently. More recently, the tried and true portfolio mix has come under pressure, mounting uncharacteristic losses that may indicate it has lost its luster. What has changed for the 60/40 allocation, and has it become too risky?

 

Background on the 60/40 Allocation

 

The 60/40 portfolio has been around for more than 70 years, but it was popularized by Vanguard founder and investing great John Bogle. The research and data available at the time showed it to be an optimal allocation using stocks to drive returns and bonds to provide ballast during volatile markets. It was considered a balanced portfolio that could achieve growth while minimizing volatility and downside risk. A 60/40 portfolio regularly outperformed all stock or all bond portfolios.

 

It worked because, during most of that period, stocks and bonds had a low correlation with one another. When stocks were performing well, bonds were underperforming, and vice versa. But in 2021, that equilibrium suddenly changed. In the final quarter of 2021 through the current month, stocks and bonds became highly correlated, with both performing poorly. Instead of a portfolio where bonds are tempering the slumping returns of stocks, they have now become an additional drag on it. That’s not what investors sign up for with a 60/40 portfolio allocation.

 

It’s important to understand that the 60/40 rule was established long ago under different economic and market conditions. It performed exceptionally well over the last several decades because it was a time of historic gains in the bond market. That’s because interest rates had been in a sustained decline since the 1980s. Not anymore.

 

That was Then. This is Now

 

With the recent surge in inflation, the likes we haven’t seen in more than 40 years, the conditions for bonds have changed to the detriment of 60/40. To cool inflation, interest rates must rise. When interest rates rise, bond prices fall, which they have been doing for most of this year. Interest rates will continue to climb depending on how long and high inflation will run, making it difficult for bonds to fulfill their role as a defensive hedge.

 

If you believe the experts, investors in a 60/40 portfolio should downsize their return expectations over the next decade. Vanguard forecasts a relatively low median annual return of less than 4% through 2031. That’s well below the 7% annual return target of a 60/40 portfolio, primarily due to declining bond prices. 

 

Is it Time to Consider Total Return Alternatives?

 

If high inflation persists, investors now have to worry about the possibility of negative returns on their investments. For some investors, especially those with longer time horizons, it may be time to change the allocation rule with less emphasis on bonds and more emphasis on total returns. Several bond alternatives provide diversification while enhancing total return opportunities.

 

Utility stocks: Utility stocks act similarly to bonds because they offer high yields and relative safety. Some of the better utility stocks have a record of steady earnings and dividend growth. While utility stock prices can be sensitive to rising interest rates like bonds, they offer higher total return potential. 

 

High-quality dividend-paying stocks: High-quality companies with a long history of paying annual dividends and increasing them over time are a reliable source of income. They also tend to be less volatile than the rest of the stock market, making them a great diversifier. The dividend acts as a cushion against declining share prices. 

 

Real estate investment trusts (REITs): REITs are professionally managed real estate portfolios that hold up well in an inflationary environment. Many are required to pay out up to 90 percent of their earnings as dividends, making them a reliable income source. 

 

Though it may not be entirely over for the venerable 60/40 portfolio allocation, it may be a while before it recaptures its magic, which calls for some rule adjustments in the meantime. The adjustments don’t have to be radical—perhaps moving from a 60/40 stock and bond allocation to a 60/20/20 stock, bond, utility stock, high-quality dividend stock allocation, or some combination of all the above. 

 

However, any changes to a long-term investment strategy should always be made in consultation with an investment advisor with the expertise and tools to help you assess your circumstances and create an allocation consistent with your investment objectives, time horizon, and risk profile.

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand-alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Protect Your Inheritance. Enhance Your Life.

Protect Your Inheritance. Enhance Your Life.

Whether it is expected or unforeseen, receiving an inheritance can be life-changing. Regrettably, it’s not always in a good way. That’s because the reality is that many folks struggle to preserve what they’ve inherited in such a way that enhances their life over both the near and long term.

 

In fact, the track record for Americans is pretty abysmal. Only two-thirds manage to increase their wealth after receiving an inheritance, and nearly 90% of families manage to waste it entirely when it passes to the next generation. 

 

Much of this can be attributed to two factors: (1) the heirs’ unwillingness or inability to act responsibly and/or (2) a lack of true understanding about what it means to be a steward of the family’s legacy. The latter tends to happen when family members lack a shared vision and purpose for their legacies. But almost always, it really comes down to poor decision-making and money mismanagement. 

 

Inheriting money should be a blessing, not a curse. But it takes the right perspective and the willingness to manage it with a clear purpose to get right. An inheritance that is honored and preserved provides the potential to change you and your family’s financial trajectory (and that of your heirs, as well). 

 

With this in mind, we’ve compiled a list of five things you can do to protect your inheritance and enhance your life so your family’s legacy is put to purposeful use.

 

 

1) Take a Step Back. Pause. Reflect.

 

There’s no rush in deciding what to do with your inheritance. It will be perfectly safe sitting in a zero-risk money market account while you take the time to evaluate your next steps thoroughly. While you might be tempted to make some moves right away, we encourage you to wait until you’ve consulted with your advisory team before you start dispersing the funds.

 

Primarily, this is because major money moves should never be made in isolation, but in the context of your overall financial picture. You need to see how the implications of your decisions could or will affect the other financial areas of your life. There may be better options for the allocation of your funds you aren’t aware of, or tax implications for your decisions that could come back and cost you. Making strategic decisions will be imperative in preserving and maximizing what you’ve inherited.

 

 

2) Build Your Dream Advisory Team.

 

Managing personal finances can be complex, and receiving a large sum all at once can magnify the complexities and implications of your decisions, especially regarding taxes and the estate.

 

Not only will you need an investment strategy based on your family’s goals, priorities, and risk profile., you’ll also need to consider the increased risk exposure you could have and how to protect against it. All of these considerations, and more, need to be integrated into a comprehensive financial plan that will optimize the value of your legacy. 

 

To build your dream financial advisory team, you’ll need to enlist the help of the following professionals: a financial advisor, a tax professional (preferably a CPA), and an estate attorney. Your financial advisor, or team of advisors, can then guide the other members of the team to make the planning and tax decisions that are best for you and your circumstances.

 

 

3) Clearly Define Your Life Ambitions.

 

Getting clear on what you’d like your life to look life is critical before you start spending. Plus, this is the fun part. You get to dream big and decide how you’ll align your resources with what matters to you most. Maybe it’s retiring early, fully funding your children’s’ college funds, or even investing in real estate. Have you always wanted to start a business? Travel more often. Buy a vacation home. Perhaps be able to work remotely doing something you’re passionate about. The way to get there is with the right planning performed up front.

 

Plus, we have found that the people with no clear vision or purpose for how they want to use their money tend to waste it on the “pursuit of more,” which ultimately brings no lasting fulfillment and leads to a lot of personal and financial disappointment. But people who set clearly defined goals that align with the purpose they see in their life are able to make smarter decisions about their money. They have clarity and conviction about how they want things to turn out, and put the plans in place to get them there.

 

At the end of the day, clarity on your big picture helps to streamline your financial plans and investment decisions. Any decision, strategy, or investment option that doesn’t get you closer to your goal should be eliminated.  

 

 

4) Addressing Immediate Priorities.

 

We know you are likely anxious to cross some financial to-dos off your list. Depending on your circumstances, there may be some things you can do right now to enhance your financial position while checking off some financial planning boxes. Remember, any financial decision you make should be made in consultation with your advisory team based on your long-term goals. So, if you are unsure, always err on the side of caution and wait until you have sought the appropriate counsel.

 

  • Pay off Smaller, High-Interest Debts

 

If you have the capacity to pay off smaller, high-interest consumer debts that will improve your cash flow, it may make sense to handle these sooner rather than later. Student loans would be the next in line of priorities, but depending on the amount, you may want to consult with your financial advisor before selling equity positions to reconcile these debts. You need to weigh the relative merits of your desired outcome with the realities of the decision to see what makes the most sense for your long-term financial security.

 

  • Bolster Your Emergency Fund

 

Increase your emergency fund to make sure it can be used for unexpected expenses, such as major medical bills, home or car repairs, or to cover living expenses for up to six months if you lose your income to a job loss or disability. 

 

5) Bigger Picture Goals to Consider

 

  • Funding Your Children’s College Education

 

If the funds are available, this would be an essential box to check off your financial plan. It can be far less expensive to pre-fund your children’s education while they’re young, and if you can do it with a lump sum investment, you can set it and forget it. Your financial planner can help you determine how much to invest now to cover educational expenses and the best vehicle to use. 

 

  • Funding Your Retirement

 

Depending on how large your inheritance is, if you have enough to pre-fund your retirement, it would be another critical box to check. Allocating a portion of your assets to secure your retirement will give you the confidence to freely allocate your other assets to pursue other goals. Again, your financial planner can help you calculate your income needs in retirement and guide you in developing an appropriate investment strategy. 

 

 

6) Honor the Legacy 

 

To honor the legacy bequeathed to you, you must become its steward, ensuring that it will benefit both you and future generations. Your success in accomplishing that will rely primarily on the decisions you make and how well you prepare the next generation for their eventual job as stewards after your passing.

 

Work with your estate attorney to develop a plan designed to preserve your estate and maximize it for your heirs. Include your children in any discussions having to do with your family’s vision and purpose for the legacy, as well as the values and attitudes about money you want to instill in your children. 

Most people who bequeath a large sum of money want to know that it will benefit future generations. After all, that’s what leaving a legacy is all about.

 

Creating Your Financial Strategy

At Platt Wealth Management, we know that life is about so much more than accumulated wealth and that real, impactful financial planning starts with what you want most out of life. That’s why our mission is to provide the financial expertise our clients need to think through and achieve the dreams they never thought possible. If this sounds like the financial advisory relationship you’re looking for, we encourage you to reach out and schedule your complimentary appointment with our team today. Or you can call the office directly @ 619-255-9554. We look forward to meeting you.

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

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