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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15 + 15 =

4 Kinds of Investors

ST. CROIX INSIGHTS

4 Kinds of Investors

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Photo by Alec Favale on Unsplash

For many, including myself, it’s easy to get fixed on one number: the value of our accounts. We never want or expect that number to drop below the number we have in mind. If my account value says $1,000,000 (or $100,000 or $10,000), but the following month my investment statement says $800,000 (or $80,000 or $8,000), I’m not happy about it, and I suspect neither are you when it comes to your own statements! But the fact is, markets fluctuate over time—and so do our investment account values.
When I look back over the past twenty years (boy, I sound just like my parents), I see three major market downturns: In 2001, the stock market went down 48%. In 2008, it went down a whopping 59%. And as recently as 2020, it went down a mere (!) 35%. And here we are in 2021, with the stock market continuing to reach all-time highs. While I may not always be happy about it, markets go up and markets go down; that’s what markets do.

As I’ve gotten older, so have our clients, and our time frames and expectations continue to change over time. That’s just the natural progression of life. Wouldn’t it be ideal if you and I could get significant returns during every stage of our lives, year after year, without any downside/market risk? Just think: all the fun and none of the drawbacks when it comes to investing. Who wouldn’t love that?

Sigh. It’s a nice dream, but expecting markets not to experience cycles given our financial markets is simply unrealistic. Well, we may not live in a world without risk, but we can each decide what level of risk we consider acceptable for our accounts.

As an investment/wealth advisor, I needed a reliable way to determine the level of risk an investor is comfortable with for their investments. It seemed to me that investors fell naturally into one of three levels of risk tolerance. I came to think of these categories as Ferrari, Minivan, and School Bus.

Many of you have heard me use this analogy. (I have three Hot Wheels on my desk as my visual reminder.) Every time I mention these visual images, my right-hand man Mr. Lewis rolls his eyes. Yet I chuckle quietly to myself every time I hear him quoting me using my own analogy. It must be good if Mr. Lewis is using it! These categories are understandable and relatable no matter your financial background. Each immediately conjures a certain image, and each implies a level of risk that has nothing to do with how much money one has. Let’s take a look.

#1: The Ferrari

The first type of investor is the Ferrari. Just like all the other types, these investors seek big returns, and they are willing to accept the downside risk associated with those significant returns. That’s the biggest difference with this type of investor: they won’t lose sleep over the kinds of losses we experienced over the last twenty years.

In fact, very few individuals fall into this category. We may admire Ferraris from afar, but when it comes right down to it, not many of us can look that kind of risk in the face and keep our cool. If this isn’t the approach for you, you may fit into the next investment category.

#2: The Minivan

The second type of investor is the Minivan investor. They know they’ll arrive at their destination, but they don’t seek the level of risk that comes with driving a Ferrari to get there. Plus, the cost of owning a minivan is a lot lower—and if you crash a minivan, chances are good that you’ll survive.

This type of investor is the most common. It’s the “happy medium” intersection of risk and reward that most of us are comfortable with: steady growth and acceptable risk. (If you are wondering, most of the time, I’m in the minivan.) But if even this moderate risk feels like too much, you might identify with the third type of investor.

#3: The School Bus

The third type is the School Bus level of investor. We generally don’t hear about a school bus crashing. (When I was a kid, they didn’t even have seatbelts.) With a school bus, you know you’ll arrive at your destination eventually, and the thought of driving a Ferrari or Minivan just isn’t appealing.

This type of investor is the second most common: they are more concerned with holding on to what they have and most comfortable when they can minimize most of their risk, even if it means taking a little bit longer to get where they want to be.

Bonus #4: The Park Bench

I’ve learned in my old age that we have a fourth type of investor: the Park Bench. Some investors, in moments of extreme economic uncertainty, simply want their money to rest and be at ease. They know that it’s not best to let 100% of their resources sit idle for the long term, but there are times when they feel too uneasy about what’s happening in the markets to want to participate in them.

If you’re losing sleep at night over uncertainties and you’d rather sit and wait on the sidelines, at least for now, you may be a Park Bench investor.

What’s Your Investment Style?

As investors, you and I have invested our dollars in each of these four categories at some point. Yet the most significant factor in determining which type of investor you are is your percentage of allocation in stocks, bonds, and cash.

As you go through life, you may find yourself in one category today and a different one ten years from now. You may find yourself returning to the one you left ten years prior because an investment opportunity arose. That’s natural. That’s investing. That’s life.

Wherever the markets are in their cycle, whatever fluctuations our investment statements reflect, it’s important not to lose sight of our long-term investment strategies and our objectives for growing and protecting our resources.

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Being Impactful with Your Money

ST. CROIX INSIGHTS

Being Impactful with Your Money

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

My grandparents owned a local grocery store in St. Paul. They lived through the Great Depression, and they passed along many core values from their experience, but most important among them was to always make sure your neighbor has food. They never let their neighbors go hungry, even when they didn’t have enough money to pay.
When I was growing up (and some of you might argue I haven’t yet), I worked at Baker’s Square during high school, college, and a couple of years after that. I know what hard work is and what it’s like to cook in a hot kitchen in the dog days of summer. But cooking wasn’t the hardest position there. Not even close. The most difficult (and yet most important) position in any restaurant is the dishwasher. It’s a gross, wet, and smelly job. Even thinking about this, I want to start bringing my own silverware when I eat out.  

One consistent and hardworking dishwasher at the Square was Brian. A grown man working to provide for his family, he’d gone back to school to study seminary, and at times I know he was hungry. Not just once, but on a number of occasions, I would see him eating food from the bus tubs full of dishes that had just been cleared away from where customers were eating.   

There I was, surrounded by food, and Brian was eating from strangers’ plates. Whenever anyone saw him eating food out of the bus tubs, I would make him a fresh meal of his own. I should have paid for it, but I didn’t. We did, after all, receive a 50 percent discount on our food, and even as a high school kid, I had the money. I simply told Brian the extra food was a mistake. But it wasn’t.

Looking back on this experience gives me pause, because I know I wouldn’t handle it the same way now. Sure, this time I would pay for the food—but I’d also make sure this proud, hardworking father had food for himself and his family. That’s one core value I try to pass down that I hope my kids will incorporate in their lives.  

Today, Mrs. Anderson and I are currently focused on helping those who are hungry. We invest a portion of our life energy and resources in helping others, and we’ve consolidated our giving so that we can be even more impactful in the areas we want to be impactful in. We used to give to a host of organizations throughout the year, but now we’ve selected only a few, so that we can be the most impactful.

Developing a gifting/impacting plan allows us to freely give away thousands per year, knowing we are impacting others with our wealth. Some of my favorite meetings throughout the year are those where I help clients give their money away. We’ve incorporated this into their overall planning, allocating a portion of their treasures each year for gifting in ways that align with their core values. 

For some, the thought of giving money away is stressful, while for others, giving brings them great joy. The truth is, giving money away isn’t always easy, even when we know we can afford to do it. This makes sense: our life experiences helped to shape our attitudes toward our finances. We may have enough money now, but that may not have always been the case, and somewhere in the back of our minds is that little worry: “What if I end up needing that?”

But being impactful with your money isn’t just about donating to a non-profit organization. It can also mean impacting your family, friends, or someone you don’t even know. Our world revolves around money, like it or not. I’d like to share a few ideas that I’ve seen implemented over the years for sharing our money with others.  

Your list might look a little different than mine, and that’s OK—we’re different people. Personally, we’ve focused our giving on organizations devoted to food, mental health, and four-legged friends, as well as our church.

Non-Profit

There isn’t a non-profit around that can’t use more money to meet its programming needs. The good news is that you don’t need to spend big dollars to be impactful. Rather, contribute a meaningful amount toward something you are passionate about.

Over the years, I’ve looked for ways to help our clients be as impactful as possible with their resources. So many of you have taken my advice and narrowed down the number of non-profits you give money to. More than a few of you have told me, “Brett, you’d be so proud of me. I’ve thrown away all but five of these year-end requests.” Excellent! Those five organizations will receive a greater amount of money than they would have otherwise, which will have a greater impact on each one.  

To make your dollars go even further, think outside the box. Non-profits love being able to generate new donors or increase current donors’ gift amounts by offering matching contributions. Many organizations receive dollars from larger organizations specifically allocated to help increase donor contributions. When making a contribution to an organization, call and ask if they are currently running a matching program or plan to run one soon. It’s great when you can double your contribution by being willing to match the donations of others.

(Mrs. Anderson believes we should just give regardless of a match, and we do—and let’s be real, I’m not always in charge—but I always try to make the call first. I’m happiest when I’m able to double my gifts, and so are the non-profits!)

Here’s another example. Recently, a client of mine was asked to fund a new critical staff position for a non-profit organization for one year. After brainstorming on how we could help the organization financially, we decided that instead of my client fully funding the position, they would offer to match a second donor for half. It took about a week for the organization to find another donor willing to match the contribution, but it happened. Shortly after, I sent the funds off at the client’s request. Isn’t that cool? 

(Maybe you’re thinking I’m all about being a do-gooder, but let’s not overlook the fact that I use my Marriott Rewards Visa card for our monthly tithe. Points with Marriott and God, all at the same time? I can’t be the only one!)

Family

Some of us wait until we are gone to give money to our loved ones, while some prefer to begin the process a little sooner. Whatever the case, I am not suggesting that you give all your money away today. How we each choose to impact our families can vary greatly. For example, family Christmas gifts might become things like the joy of travel for the entire family (and no longer involve the stresses of shopping for that sweater). You might even volunteer at your local non-profit together and leave a donation when you’re finished.

Another way to be impactful is to help fund your kids’ Roth IRA accounts when money is tight on their end. Many times, our kids need more help as younger adults than they will later in their lives. I have a hard time recalling the physical gifts my parents bought me over the years, but I do remember the times they’ve helped me and the events we shared.
 

When you have your financial house in order, it can feel so good to help others in your own meaningful way. You don’t have to worry about giving freely, and you are able to impact others with your treasures. If you’d like to discuss developing a gifting strategy, please drop me a note. 

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

5 + 9 =

Hello, 2021! We’re glad you arrived

ST. CROIX INSIGHTS

Hello, 2021!
We’re glad you arrived.

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Not everyone does New Year’s resolutions. Sometimes I do, and sometimes I don’t. Sometimes I’m successful in completing them, and sometimes I’m not.

One resolution I adopted (and actually maintained) over this past year was to ask myself two key questions around nearly every decision I made. Some of you may already ask yourself these questions when faced with a decision without even realizing it.

About two years ago, my best buddy Terry turned me on to a book called Your Money or Your Life by Vicki Robin and Joe Dominguez. The first ninety pages or so had me hook, line, and sinker. The book didn’t say anything you or I don’t already know, but the information was, as they say, “presented in an impactful way.” It certainly impacted me.

Let me back up a bit. Terry wanted to help his kids prepare financially for today and tomorrow, so with the book as our guide, we set ourselves on a journey. Over the course of six months, we started having “family meetings” every few weeks to help his kids prepare for their money, life, and dreams, not only for today, but also for the future inheritance they would receive one day.

Money is not always easy. Sometimes it’s complicated. And it’s almost always a pain to think about, let alone deal with. (Three key reasons I do what I do.) Your Money or Your Life helped us get our minds right and broke down the whole journey for us so we could see clearly what decisions were or weren’t in alignment with achieving our goal.

During these family meetings, I began to share my own personal financial journey, which I’d been learning or relearning, not only from this book but in my daily walk of life. I felt I needed to join Terry and his family on this important transformation. That’s how I started asking myself two key questions at the onset of any financial decision:

  1. Does this simplify my financial life?
  2. Do I want to spend my life energy on this?

Today, if it doesn’t simplify my financial life, I’ll pass—and if it doesn’t cross the threshold of something I’m willing to work night and day to have, I won’t spend my life energy on it. Put another way, if I don’t need it, I won’t buy it or direct my financial resources, time, or energy toward it.

Around the time of these family meetings, my car lease was up on my Honda Accord (I know—such a fancy car you drive, Brett). I asked myself, “Do I really need to lease a new vehicle? Do I want to spend my life energy on making the monthly payments?”

The easy option was to just push the decision down the road and lease another vehicle. (Who doesn’t love that new car smell?) I was tempted. I took a few test drives and even brought a new car home for the day. (Dealers will let you do that, you know. After all, they want to sell you a car!) Plus, as a business owner, I could deduct the lease payments. It would all be so easy.

Or, the alternative: I could just purchase the Honda outright, have no car payments for the next ten years, and plan on paying cash for the next car.

At the next family meeting, I was able to share that I had just purchased the car outright and planned on driving it into the ground before purchasing the next one. If I hadn’t read Robin and Dominguez’s book and had the discussions I’d been having with Terry and his family, I know I would have made the “easy” decision—and paid for another lease each month.

Our society tells us we can have it all, even when our checkbooks say otherwise, and society makes it far too easy to have things today and pay for them tomorrow, the next month, and the month after that. But no matter what short-term need we’re addressing when we spend what we don’t have, debt limits our future lifestyles.

Put another way: debt sucks.

That’s why I continue to use a dream board to stay focused on what’s most important to me and remind myself where I should be directing my resources, time, and energy. Being purposeful with our resources is powerful and freeing, and for me, that outweighed the need for a new car. Don’t get me wrong, I’ll be purchasing cars again in the future; I just won’t do it as often as I used to, nor will I spend as much when I do buy. This frees me to continue to focus my life energy on the things I really want.

Many of you reading this have children who will one day inherit a meaningful amount of money. Are your kids prepared to handle your resources in a meaningful way? If you have doubts, it’s time to consider a strategy to help change that. A great starting place is for you to read Your Money or Your Life.

There is something reassuring about having money in the bank, being impactful with others financially, and knowing that you and I can continue to master our money and accomplish what is truly important to each of us. With a good strategy in place for the future of your finances, you can help ensure that your family will enjoy that reassurance for years to come.

With the start of 2021 finally upon us, if you are looking for an impactful book, starting new financial habits, or seeking to master your money on another level, drop me a line.
Happy 2021!

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

1 + 14 =

Christmas 2020

ST. CROIX INSIGHTS

Christmas 2020

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

I rarely get surprised at my young age, but it can happen.
Last year, I shared my mom’s recipe for my favorite green Christmas cookies, which she used to make for me each year—a family tradition. I wasn’t even going to make them for myself last year; it brings a level of sadness, knowing my mom is gone. I know so many of you can relate.

Yet much to my surprise, my new best friend Deb made a batch for me last Christmas! Let me tell you, these are not the easiest cookies to get right. It takes practice, and trying to find the mint chips is no small task. It took Deb three tries to nail it. From what I was told, the first two batches didn’t turn out, but she kept trying.

As you know, I wouldn’t say I like to share, even with my family. I had no intention of sharing these cookies—I’m not kidding!—so I hid them in the garage for safekeeping so that I could enjoy them during the winter. These are a real treat for me, and they freeze well. The problem is, I have two kids who can sniff this stuff out. As I was unpacking the car during our family Christmas travel, what did I see in the trunk but the container with the green cookies! (I assure you, I am not the one who packed them, though Mrs. Anderson continues to tell me to share.) My kids ended up enjoying the cookies too, despite my objections. Thank you, Deb, for the cookies! I’m so appreciative that you took the time to make me a batch.

We have kept one family tradition going: My mom used to purchase the grandkids and us the same gifts each year. At times, you had to be careful not to mention anything you wanted throughout the year, because you might end up with it. Just ask my wife: one year, she received some lamps. (We are still unclear when she told my mom she wanted gold lamps.) On another occasion, the grandkids all received a MyPillow and not the airline tickets they thought they were receiving to accompany the small suitcase they had also received. Nope—just the suitcase with nowhere to go. (The level of disappointment was high among them.) It got to the point where only one of us had to open a gift to see what everyone had received. Last year, I purchased Grandma’s gift on her behalf: blankets. (Though adorable and warm, my oldest son left his behind when he went back to Houston.) This year’s family gift is a Flippy Multi-Angle Soft Stand for Tablets, Books & E-Readers. I might videotape the opening of these!
I know so many of you look forward to our holiday party each year, but with the coronavirus, we’ll just have to wait until 2021. Eating out isn’t the same these days. In-person church services have resumed at Eagle Brook, yet our church is empty (online is preferred these days). I still plan to attend in person; if you’d like to join my family for a “social distance” service, just let me know.

Merry Christmas and Happy New Year!
~ Brett Anderson

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