July: America’s Birthday 2021

ST. CROIX INSIGHTS

July: America’s Birthday

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Photo by Luke Stackpoole

Americans have been fighting for our freedom since 1776.

As America’s birthday is approaching its 245th birthday, I’ve been thinking. These days, I have trouble watching the news, local or national; I suspect you do too. We’ve reached a point in our society where front porches have been replaced by back porches, we hardly see or talk to our neighbors as the world moves faster and faster each day, social media and the rest of the internet seems to divide us, and let’s not forget all this COVID stuff. Even the mere mention of politics can cause fierce debate and hot emotions among friends and family. Even as I write this, I suspect I might be offending someone with the subject of this post: America’s Birthday. Our independence.

After my own birthdays, I often find myself reflecting on how quickly each one came and went, reviewing the highlights, the lowlights, and the things I want to accomplish between each birthday. This got me thinking about my history classes in elementary, middle, and high school. I can hardly remember that far back (I’m dating myself here)—but I truly don’t remember when I last read the Declaration of Independence or the Constitution of the United States. Recently, I decided that this Fourth of July, I’m going to pause to reread those essential documents. I want to revisit what our founding fathers wrote and refresh myself on what we learned in our history class all those years ago.

America is special, even with all the challenges we might see or experience in our daily walks of life. Independence is a common theme in my daily conversations. I feel the freest when I’m in the middle of nowhere: in the mountains, in the woods, on a gravel road, sitting in a fishing boat in the Icy Straits as endless amounts of whales dot the water around me, or walking a cornfield in search of that redneck bird. As far as possible from the tallest buildings that usually surround us, one with nature. For me, that’s the independence I strive for as I celebrate America’s Birthday.

Happy Birthday, America, and here’s to many more.

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Achieving Financial Security

ST. CROIX INSIGHTS

Achieving Financial Security

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

I’ve tried saying no, but it does occasionally offer some benefits…
These days, I limit the time I spend on social media. I check to see what’s happening with family, friends, and clients, and I log off quickly. I don’t even have the Facebook app on my phone. One useful group I did find on Facebook was a retirement group where people pose retirement/investment questions to strangers to solicit advice. In many respects, I find this scary (you have no idea who these people are or what their background or qualifications are for giving financial advice), but at the same time, it’s helpful to see what different people are thinking about as they approach or experience their retirement years.

One common theme among those I interact with is that most are seeking financial security. And why would anyone not? But “financial security” looks and means something different to each of us based on our background, our upbringing, and our lifestyle, as well as what we strive for down the road.

Many times, what “security” looks like is not just a mathematical calculation but an emotional one. One recent Facebook post broke down the three levels of financial security one can achieve: financial security, financial independence, and financial freedom.

Financial security is defined as having enough income to cover your basic living expenses. It’s a foundational level that takes decades of hard work and saving to achieve, where you’ve worked for thirty or forty years and can finally put in your two-week notice and not look back. (I often hear people say you need a million dollars saved up before you can retire. The truth is, you don’t.)

Financial independence is what I think most people seek when they use the term “financial security,” but it’s hard to differentiate between financial security and financial independence. Financial independence just means having more passive income to cover your lifestyle, which includes more than the basic necessities of financial security. That might include extra income to travel once or twice a year, eat out a few times a week, and have extra spending money each month.

The third level is financial freedom. Very few people will ever truly achieve this level of freedom. This is when you have multiple passive income streams in place to create the life you’ve always dreamed of, which enables you to do the things you love while also giving back. You still live within a budget, but this level of freedom allows you additional choices on how you live.

Common to all three of these definitions is the phrase “passive income.” Passive income comes in a host of different forms, from Social Security, an income stream from your investment/retirement accounts, a pension (though this is becoming less and less common for younger people), income from a business you own, rental real estate, and so on. For some, passive income is even viewed as part-time work in a low-stress position where they aren’t taking their job home at night.

When I think about financial security, I think about time. Time to take a relaxing vacation—so relaxed you don’t adhere to a rigid timeline. Time to cook those meals that take hours to prepare and eat, take naps you don’t have to set alarms for because you slept so well the night before, and finally start to conquer that mile-long to-do list. That time to invest in ourselves is what I want to help all my clients achieve.

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The Dreaded B-Word

ST. CROIX INSIGHTS

The Dreaded B-Word

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Photo by Carlos Muza

Not a day goes by when someone doesn’t say to me, “I wonder where all my money goes?” or “I wish the month were a week or two shorter” or “I make a lot of money, I just don’t understand how I can spend so much of it.” Most of us wish we better understood where we’re really spending all our money. Luckily for me, Mrs. Anderson has followed my financial advice over the years. (Almost too well—I’ve created a financial ninja. Sure, it’s great at times…but other times, she asks what I purchased from Amazon for $19.28) Everyone’s on a budget, whether formal or informal. But knowledge is power, and we can all stand to be more impactful with our resources.
If you’re the type of person who has no interest in budgeting, guess what? Unless you’re consistently spending beyond your means, you are already using a budget. Congratulations! Now, to curb your spending, just focus on achieving these three numbers:

  • 20 percent savings
  • 30 percent lifestyle
  • 50 percent housing

If you conquer your spending and savings rates, you’re more likely to enjoy life down the road. But no matter how well your informal budget may be working, one way or another, you still need to start tracking the numbers.

So what three steps can you take to understand where your money is going and how you can finally plug your financial leakage?

1. Make technology your friend.

Some Saturday or Sunday while you’re watching a movie or a ball game, invest a couple hours in improving your finances. Try using software like Mint, a website like www.youneedabudget.com, or Google for a host of other options to choose from.

Don’t worry about what happened six months ago; this your opportunity to start fresh. Establish where you are spending money each day, week, and month. You can categorize your spending by restaurants, events, home items, and any other useful category, right down to stamps. If you watch your pennies, the dollars will follow.

2. Create a budget.

I know, the word “budget” makes you cringe. (I hate budgeting too, and I’m in the money businesses!) But we all need to establish a baseline for how much we really have to save, spend, or give away each month. To truly achieve financial peace, you need to create a margin between your income and your spending. This is so much easier when you make technology your friend.

By looking at the numbers in detail, you can finally see each day, week, or month where you are over- or underspending. I know what you’ll discover: you actually have more money than you thought you did, and you’ll wish you would have done this exercise years ago.

3. Understand your priorities.

Prioritizing your goals for your money is the only way to truly master it and direct it where you want it to go. Priorities can range from paying off your debt, saving 20 percent of your gross income, tithing, helping others, paying cash for that new car, and so on. I believe that more stuff means more money and more stress; look for opportunities to spend your money in creative, thoughtful ways, not just on the acquisition of more “stuff.”

Spending a few hours reversing the flow of your financial leakage will be empowering. Now, you can direct where you want your money to go and align your actions and values. Become the master of your money instead of letting your money master you.

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Ask yourself- can my portfolio support my lifestyle in my retirement? 

7 + 9 =

When Your Bus Ticket Gets Punched

ST. CROIX INSIGHTS

When Your Bus Ticket Gets Punched

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Photo by Danist

My favorite breakfast place in my hometown of Woodbury, Minnesota, is Keys. The Italian sausage is the best. I can’t remember ever ordering anything different there for breakfast. My friend Jack enjoyed a Keys breakfast too. We’d meet up a couple of times a year to catch up and solve the world’s problems over hash browns and orange juice.
One of Jack’s passions was politics. It was a topic he would talk about for hours during our breakfasts. Yet one topic Jack never wanted to focus on in our conversations was his cancer diagnosis. I get it, but this time was different. I arrived for breakfast early to get a few things done prior to our meal, and I noticed Jack’s walking style as he entered the restaurant. He was shuffling his feet four or five inches at a time—nothing like that stride you and I would use to walk forward. I had a suspicion that this would be our last smart-talking meeting of the minds, solving the world’s problems over breakfast. And it was.

The most common question people ask me is, “What would you do?” Sometimes we just need someone as a sounding board to help us make a big decision: to retire, purchase that dream home, or finally snag that car you’ve always wanted. Sometimes, even when they know exactly what Brett’s answer would be, people do the opposite anyways. Life is short, and sometimes we throw caution to the wind. And I’m no different, even though I get in trouble with Mrs. Anderson when I purchase a $200 cooking pan or replace my holey socks when I could have just sewed them up instead. (I’ve created a financial ninja!)

Those are the easy questions to answer. But sometimes, it’s not always possible to answer these types of questions for others.

One afternoon, I was sitting on the coach next to my mom, my sister’s dog snuggled against her. At that time, Mom was going through extensive chemotherapy to reduce a tumor in her pancreas. She was in a battle for her life. The chemo and cancer were winning, and she knew it…which is why she asked, “What would you do?” I knew what she was asking. She was tired, and the battle seemed to be nearing the end. And I know Mom didn’t want to give up on living.

Assuming I have a choice when my bus ticket gets punched, I’m not sure how I’ll respond. Sure, today I can talk big, but that’s today. I simply told Mom that my ticket hasn’t been punched yet (that I know of). Many of us will eventually have life-changing decisions to make. My friend Jack and my mom had one thing in common: they both said they were grateful they got cancer. Grateful because they had time to process their situations and get their remaining days in order.

It’s a topic we talk about a little bit, but discussing it on a deeper level could help us be even more impactful with our family, our loved ones, our pastors, and even our advisors. Whatever our situation, we can all breathe a sigh of relief when we have not only our financial house in order but also our wishes on record for the host of events that could happen to us or a loved one, including sickness or death.

With all the upcoming Federal estate tax law changes I expect to come our way shortly, now is a good time to revisit your estate plan, from power of attorney to health care directives. Remember, not everyone gets a warning notice! If you need a referral to an estate planning or elder law attorney, let me know.

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6 + 11 =

Celebrating Twenty Years—Thank You!

ST. CROIX INSIGHTS

Celebrating Twenty Years—Thank You!

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Very few people have ever asked how I got started in the financial services industry. It’s not a story I generally volunteer unless someone asks, but now that I’ve survived this industry for twenty years, I thought I’d share it for those of you who haven’t heard it before.
Twenty years in business is no small feat. The financial services industry isn’t a forgiving one: 95 percent of those who start in it don’t last three years, and 98 percent leave within five. The odds are truly against you. With odds like that, you have to be a little off-centered to get into the field in the first place…or you just don’t know any better. I started out with no idea what the heck I was getting myself into, with no clients and no income. I left a good corporate job with paid vacation time and a nice paycheck every two weeks. But I wasn’t happy working in corporate America, and I had no plans of going back.

(I used to want to be a stockbroker, actually, but I’m glad I’m not today. I prefer to plan and create investment and financial strategies for people, rather than simply purchase a few stocks and hope they do well. This way, I get to participate in the joys and tears of each of our clients. How can you beat that? But back to the story…)

There was a video at church called “What’s Your Story?” It showed three or four people who couldn’t meet their tithing obligations they had made to the building fund. The church board had made financial decisions based on those commitments, and now they were coming up short. In the video, the loss of a job or other change in their financial situation caused these people not to fulfill their financial commitments.

Something just went through me that day: I knew that I could help these people manage their money so they would never have to miss their important obligations. I could help them change their lives. That realization started me on a twenty-year journey that continues today.

If you are reading this, I want to thank you. Thank you for continuing to place your trust in me. It’s not something I take lightly or for granted.

At the risk of leaving someone out, I would like to point out a few people who have impacted me and contributed to my continued success over the past twenty years.

Terry Townsend – He took this city slicker and turned me into a gun-totin’ outdoorsman who freezes easily in this cold tundra. He’s included me on so many adventures.
Ross Vass – I’m not making this up: he almost killed me trying to turn me into the great outdoorsman I’ve become. (Surprisingly, he’s still on Mrs. Anderson’s approved list of people I can hang out with. I think she wants to collect the insurance monies.)
Jeff Redmon – I learned so much from him about being a business owner myself and adding value to other business owners.
Ben Flottemesch – He’s extremely knowledgeable, and I enjoying learning from him.
Christopher Burns – My legal resource guru, even when I have dumb questions.
Tim Bohannon – I would never have read so many books in my life if it weren’t for him. Every book he brought up, I read it. I learned a lot from him in my first ten years in business, even though I disappointed him daily with my fashion trends. (My poor fashion trends continue today.)

These are the people behind the scenes. You don’t always see them, but they contribute to your success and mine, every month and every day.

Brad Lewis – He’s been my right-hand man for the last seventeen years. (Even though he rolls his eyes at me a lot, and it kills him when he has to admit I was right.)
David Montgomery – When you want to geek out on investment analysis, he’s your guy.
Drew Dewitt & Lee Heidgerken – When it comes to insurance planning, no one knows it better.
Rebecca, Sarah, and Ejaz – I’m always a work in progress, and they do the best they can to make me look good.

And most importantly, Mrs. Anderson. It wasn’t always easy for the first few years, since she was supporting our family financially. (Hey, nothing wrong with being a kept man! I must say I enjoyed it.) She’s always helped me to follow my dreams.

Despite the bumps in the road, I have the best career anyone could ask for. I get to impact others on a daily basis. I get to help people reach their goals, some days even stretch their goals. I get to educate people about their money and help them make better, more informed decisions in their personal, professional, and financial lives.

Thank you—all of you—for the first twenty years. God willing, I have another twenty in front of me.

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Ask yourself- can my portfolio support my lifestyle in my retirement? 

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