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I in sound mind spent it all

 The retirement quandary: How to avoid dying with a large pot of money for your “daughter-in-law to spend.” After a lifetime of savings most clients wish to enjoy the fruits of their discipline. A retirement spending plan which gives you financial reassurance doesn’t simpy happen; you must have a strategy. See below for the full […]

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It is never the bus you see coming that hits you…

Written by: Lynn Phillips-Gaines, CFP®, CLTC

Published in Starkville Daily News on Sunday, March 7, 2021.

As a dear friend and mentor reminded me, it is rarely the things I worry about that come to fruition. It is the things you never see coming.  I guess that is why I became a financial planner versus a stock broker.

Throughout my years working with individuals and small business owners, this axiom proves to be true repeatedly. Take the COVID shut down of the economy.  By the time it was upon us, it was too late to do anything.  So, how do we handle this type of disruption and time of fear and upheaval?

What have we learned from the pandemic financially?

  1. Create or revisit your financial plan.  Look at the entire financial situation, not merely your investments. Recently, we talked to a divorcee who focused solely on her investment to the exclusion of her financial plan. It turns out that she neglected to take the Social Security benefit she was eligible for from her ex-husband for many years, costing her income of over $100K.
  2. Emergency reserves are imperative! How long could you fund your expenses with no cash flow/income? Review your cash reserves and maintain the appropriate amount. (For your personal or family’s living expenses, as well as for your business if you are an entrepreneur).
  3. Always have a defined investment policy statement, which identifies what assets you will own, why you own them, and at what point you would no longer hold those investments. If you are in retirement and need income, you should not jump from your dividend-producing assets to hot tech stocks. Look at Uncle Warren (Warren Buffett); he didn’t ditch his dividend stocks during the pandemic.
  4. Avoid making investment decisions because of FOMO (Fear of Missing Out) in your portfolio. It is hard for us as humans to invest when things look the worst; instead, we tend to buy the stocks we wish we had owned, thus purchasing at high prices before earnings can catch up.
  5. Stress-test your plan yearly to make sure you can recover from the unexpected. Take a look at your overall retirement situation if the market were to drop as it did in March 2020 or 2008-2009.  Can you still accomplish your goals?
  6. The internet makes it easy for the opinions of speculators to reach the masses. These types of investors think the stock market is a place to get-rich-quick. Usually when something is too good to be true, it’s because it is. While you might be able to do this in the short-term, usually profits are given back in the next cycle.
  7. One of the best things you can do to aid in having future financial confidence is set-up a dollar-cost-averaging investment plan (automatic drafting allowing you to invest periodically without needing to think about it often). This helps you commit money to the market when you are least inclined to buy. The best time to invest is when the market is down, yet that’s the opposite of how the general public views it (investing appropriately during a market pull-back is like buying a good quality product when it goes on sale during Black Friday).
  8. Avoid getting your information from the media. Nothing sells like emotionally charged messages with the intent of drawing viewers, hence more advertising revenues. You can successfully invest your money in these hot areas until it is all gone.

If you do not have the knowledge or discipline to develop a wealth accumulation or preservation roadmap on your own, please contact a financial planner with a wealth management process that begins with wanting an understanding of your life, goals, and financial needs and includes a written plan before the first investment or insurance product is purchased.

Phillips Financial | 104 West Lampkin Street, Starkville MS 39759 | (662) 324-2889

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Phillips Financial is not a registered broker/dealer and is independent of Raymond James Financial Services.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lynn Phillips-Gaines and not necessarily those of Raymond James.

Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results.