Thursday, August 13, 2009

A Fascinating Profession

Pathways Advisory Group, Inc.
Dustin Smith, CFP®

I had a vision of Financial Planning when my career began seven years ago. Some aspects have gone as expected - some have not. When I began my CERTIFIED FINANCIAL PLANNER™ exam preparation in 2003, I knew that it would be quite an undertaking. I knew that less than 50% of the people in the exam room would pass. The process taught me a lot about myself and financial planning.

What I underestimated, however, is how much I would continue to learn from you.

Consider the following meetings:

On Monday, I met with a couple in the twilight of their lives. They’ve been married for 50 years. They are financially secure. We talked about their three adult children and 8 grandchildren. They have created a wonderful family that continues to grow and prosper. They are very proud. We talked about the world we live in today. We talked about the Great Depression. I love our meetings – I appreciate their perspective. They are wonderful and interesting people.

On Tuesday, I met with a couple in their 40s with three kids. We attempted to find some balance between retirement savings, college savings, insurance premiums and living month-to-month to support a family. Daycare, homework, soccer practice, music lessons – oh and we are supposed to meet with Dustin tomorrow. It is quite a balancing act. We can’t do it all and they have definitely taught me that. It’s a challenging time of prioritizing and patience. I enjoy helping them navigate these times. I am confident it will pay off – perhaps because of Monday’s meeting.

On Wednesday, I met with one of our youngest clients, the daughter of long-time clients. She is 21-years-old, very poised and bright, entering her final year of college. We covered many topics – careers, our tax system, the troubles in our economy. We discussed bull markets and bear markets. It was a great meeting. I was reminded of my journey since college. I look forward to helping her navigate the future – I will certainly draw on my experience from Monday and Tuesday.

I’ve learned to look at the world through the eyes of many people: young and not so young; married and single; widowed and divorced; big families; little families; employees and employers; farmers and firefighters; doctors and teachers; administrators and police officers; workaholics, spendaholics; saveaholics; travelers and campers; gardeners; artists; fisherman; golfers; sailors; cruisers; conservatives and liberals; Democrats and Republicans. What an education. What a profession. It is a blessing to know you all – thank you for allowing me the opportunity to be involved in your lives. You have certainly had an impact on mine.

Friday, August 7, 2009

Beach Balls

Pathways Advisory Group, Inc.
David L. Williamson, CFP®

Hey, it’s summer! Let’s go to the beach. Look at that beautiful ocean, blue skies, and sea gulls. I’ve got a couple of beach balls. The water’s warm. Let’s wade out and have fun.

Some of you know where I’m going with this. It’s my lame metaphor for the stock market. I trot this one out in client meetings now and then. I know I’ve mentioned it to a few clients more than once, but you are too polite to remind me.

So if you’ve heard it before – sorry.

Well, we each have a big, bright, multi-colored beach ball. If I gently push my ball just one inch below the surface and then release, what happens? It pops up nicely to the surface. If you push yours as far down as you can, using all your muscle, then release, what happens? It flies up and jumps out of the water.

This is what often happens to the stock market. Push stocks far down, they roar back. Since 1926, this has been true. Push down an “excessive” amount, they bounce back royally.

One client (not my favorite client) said “Hey, David, what if you push down right over a sea urchin & pop your damn beach ball? What then, huh?”

I told this wise guy I would kick sand in his face, steal his beach ball, and then run away as fast as I could…

That should teach him to mess with my metaphor.

Enjoy the summer (rally)!!

Tuesday, August 4, 2009

Waiting for 'Someday'

Pathways Advisory Group, Inc.
Michelle Carter, CFP®

After weeks of negotiations and political hoopla, California finally has a budget for the 2009 – 2010 fiscal year. However, if you read carefully, you will see that this budget was ‘balanced’ on the back of some grand expectations.

For example, state estimated tax payments will be increased for the first half of the fiscal year (July – December 2009). Although the total tax owed to the state has not increased with this budget deal, the estimated amounts paid will be accelerated.

Another example: The final paychecks for the 2009 – 2010 fiscal year will not be released on June 30, 2010, but rather July 1, 2010. This allows those salaries to count towards the 2010 – 2011 budget, instead of the current year.

A little tricky maneuvering on the part of our government, wouldn’t you say? The common theme is the hope that the economy will improve, and tax revenues will increase. If nothing changes, we have merely pushed our problems to a future date, with potentially devastating results.

As I shake my head at California’s situation, I guiltily remember times I have done the same thing in my own life: making financial decisions based on some anticipated, or even just hoped for, event. Do any of these statements sound familiar?

“Once I get my next raise, I’ll start contributing to my 401(k).”

“When I’m older and more settled, then I’ll contribute to a Roth.”

“After this vacation, I’ll buckle down and pay off debt.”

Life happens, and things change. After countless times watching my expected financial parachute fail, I have learned that there is no time like the present to save yourself.

Perhaps I can’t maximize my 401(k)? Well, I can contribute small monthly amounts instead. David always suggests trying out a higher contribution amount than first considered, and seeing whether you can make it work. Little tactics like this can help inch you closer to your objective.

So, my goal is to see what I can do today to improve my position tomorrow, no matter what the future brings. I may not be able to do it all, but any little bit is a start. Join me?

You pile up enough tomorrows, and you'll find you've collected a lot of empty yesterdays.
– Harold Hill (The Music Man)