Enhancing Your Wealth One Step at a time

ST. CROIX INSIGHTS

Enhancing Your Wealth One Step at a time

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

It’s time to start enhancing your wealth one step at a time. But how do you accomplish this? Break it down and take it slowly. It doesn’t happen in one day.

It starts with small decisions that build up over time to create a big impact. Take a step back and look at your life. How do you feel about money? Do you feel secure, confident, and covered? Do you worry, get upset and feel insecure about money? Do you avoid the topic altogether? Assessing your relationship with money is important before you start to take these steps.

Once you understand where you are coming from, it will be easier to begin to shift your thinking. Money is just a means to be able to do the things that you enjoy. If you aren’t enjoying your life, no amount of money is going to change that.

1. Determine your values. What is it that sets you on fire and gets you up in the morning? What do you look forward to at the end of the day or the end of the week? What truly brings you joy and happiness in this world? Maybe when you think about all of this you realize that the best things in life are free for you. In that case, wonderful. However, the fact of the matter is that life costs money. Even just spending time with those you love usually involves a meal, a destination, or some type of entertainment.

2. Cut out the unnecessary stuff. Do you have a junk drawer at home? The one with miscellaneous pens, rubber bands, and free giveaways? Why is it that we hang onto so much that has no value? We live in a culture that loves stuff. It somehow became a sign that someone has ‘made it’ when they have a bigger house, more toys, and a flashier lifestyle. But what in your life could you do without? I’m guessing most of it.

3. Reframe your thoughts. When you think about saving vs. spending, shift your mindset. Would you rather get an expensive coffee drink with a flavor shot and whipped cream on top every day of the week or retire to a house on the water where nobody knows your name? Life is full of trade-offs, and unless we begin to think of the future as something to consider in this moment, we will never have what we think we need down the road.

4. Finally, discuss with others. Yes, it’s taboo to talk about personal topics. But get a feel for what other people make, spend, and save. Determine whether you’d like to make your money go further for you now or in the future. Talk to trusted advisors, friends, and people who are willing to engage in conversation. Especially if you’re struggling financially, talk about it.

In short, I am simplifying your life and saving your time by taking care of this end of the deal. You can focus on your kids’ sporting events, family birthdays, and work deadlines while I worry about your money. Know that it is in good hands.

One common thread that you and I have is 24 hours in a day. If you don’t protect your calendar, before you know it, you are no longer in charge of your schedule. We need to protect one our most important resources – time.

I’ve become guarded of my schedule over the years, so I don’t feel overwhelmed with the day to day expectations of my family and clients. I know I live by a calendar, I have to in order to keep it all straight each day. It’s even typical for my wife and I to compare our schedules to meet the demands of our family. Yet, that’s usually while we are in bed, with computers in each of our laps. Do you have a favorite calendar resource you use to track and schedule your meetings? Do you make a checklist on there too?

The bottom line is that neither you nor I can meet with everyone. I wish I could, I truly enjoy hearing each person’s stories. However, we need to protect our time and our calendar to focus on the items that are most important to us in helping us reaching our goals – personally and professionally.

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Can my portfolio support my lifestyle in my retirement? 

5 + 4 =

Financial Freedom – what it means to me

ST. CROIX INSIGHTS

Financial Freedom – what it means to me.

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Everyone’s definition of financial freedom varies based on their background, upbringing and life experiences. It seems today on TV, social media and movies, we have all types of expectations set forth for us to live up to. Yet, what is real life these days? From what I see – most of it isn’t real.

Almost every day, I ask someone what financial freedom means to them. Most reply with a dollar amount so they don’t have to worry about money or expenses and they can financially handle whatever life brings their way.

I’m no different. I believe financial freedom is being debt free and having an asset base provide enough monthly cash to support my lifestyle. That’s it. Basic. What that framework, it’s easy to understand and figure out what your number should be.

There are three steps to help achieve this type of financial freedom:

1. Don’t purchase what you can’t afford.

Sounds easy but it’s not. For example, do you purchase a new car at 100,000 miles or do you drive it in the ground? Drive it in the ground. At 100,000 miles you’ve barely went through two sets of tires. And that dream home you desire – “right size” it. Don’t over buy.

2. Pay yourself first.

Sounds easy but it’s not. For those in your working years, target 15 – 20 percent of your gross Income. Yes it’s a lot, but that is what’s required to achieve financial freedom. Numbers don’t lie.

3. Pay attention to the tax man.

Remember that our money belongs to the government and if we don’t understand the rules, they keep more of it. That’s not ideal if they keep more of your hard earned money.

Financial Freedom doesn’t happen overnight. You and I have to work for it. You know that saying, “Freedom isn’t free.”

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2 + 12 =

I’m rightsizing my home

ST. CROIX INSIGHTS

I’m rightsizing my home

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

I have to tell you, preparing your home for sale is a pain in the rear, period! I thought hiring a professional would make it easier, but it wasn’t.

Here is what I’ve learned from this process. I know when you look at me you think of style, fashion, hipness and the list goes on. All true of course, but the truth is I wanted someone good with color and design to help prepare my home for sale. So we hired an interior designer to help us. I asked all the right questions and if they would have answered my questions correctly, more importantly honestly, I never would have hired them. I have no problem paying for their services, but this is how they really get paid.

First, is I purchase all the items to stage my house.

Furniture, lamps, drapes, bedding and the list goes on. But this is what gets me. When my house sells, the interior designer keeps each and every item I purchased and if I’d like to keep any of them I pay them again for the item. What? Sure, I wouldn’t mind updating my bedroom sheets, comforters, pillows, etc., but I have to pay for them twice? Huh?

Second, is when I asked for the carpets, granite and all those other big items if there was an additional fee.

I was told no. Turns out when the carpet guys came to my house to collect the remaining balance the math didn’t add up to the invoice I agreed to pay the interior designer. They do indeed charge additional fees. I only wish I could charge their markup rate.

Third, I just wanted to pay an hourly rate for these services.

Initially, I was told it would cost $1,500 for their services and I was fine with that. Yet, by the time we would have paid her $7,000 to pick some carpet, granite, faucets, etc., for my home. That’s good money and I’m in the wrong business.

If they would have answered my questions honestly, I would have never hired their firm. And they know it. When I questioned what they told me, they couldn’t come clean for almost 15 minutes.

I asked the right questions but was given the wrong information. So here is what I learned for the next time. In my business, I’m required to provide my clients an outline of services, how I’m compensated, etc. I’ll going to require that from other service providers as well. I also want to make sure I’m dealing with a decision maker of the company. No middle men or middle women.

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Can my portfolio support my lifestyle in my retirement? 

14 + 4 =

Leaving your kid(s) a million dollars as your departing gift

ST. CROIX INSIGHTS

 

Leaving your kid(s) a million dollars as your departing gift

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Tears of sorrow or tears of joy. That’s the discussion I have with my family about that day I depart Earth in the physical form. As much as my family “loves” me, there will be tears of joy ☺. Mrs. Anderson now can hire that pool man I’ve denied her all these years. Not to mention the son who loves cars. He’s only had a bicycle until he was 25 years old because his old man was too cheap to buy him a car. Now he can buy that Ferrari he’s dream about all these years.

Let’s talk about leaving your kids money.

Being in the money business, I see how greedy loved ones can become when their “loved one” dies, sometimes even before their body arrives at the funeral home. I hope to avoid this in my household. I’m looking to treat everyone the same – fairly, as I define fairly. That generally means equally barring any outside circumstances. These include health, disability, mental or other illness that would limit their ability to take care of themselves financially. Hopefully, I’ve done my job well enough and taught my children about the value of money which hasn’t been always easy. I have one kid who has the first dollar he earned because he uses mine (which is smart on his part) and another kid that if they have a dollar, it’s a dollar too much. So I know I have more to work on with them.

Yet I want to make we sure have ongoing conversations as a family around what kind of responsibility comes with having this type of money.

I believe there are different kinds of money.

There’s money you’ve earned and that which is found (which comes in different forms). The kind of money we’re talking about requires a greater level of responsibility because it wasn’t earned for those receiving it. I have no desire that this money becomes easy come, easy go. If I ever suspect that’s the case, I’ll have the necessary precautions in place to prevent that. Because the money they’d receive was either hard-earned through the fruits of my labor, or I literally had to die for it.

Yet I want to make we sure have ongoing conversations as a family around what kind of responsibility comes with having this type of money. I believe there are different kinds of money – money you’ve earned and that which is found (which comes in different forms).

The kind of money we’re talking about requires a greater level of responsibility because it wasn’t earned for those receiving it. I have no desire that this money becomes easily transferable. If I ever suspect that’s the case, I’ll have the necessary precautions in place to prevent that. The money they’d receive was either earned through the fruits of my labor, or I literally had to die for it.

Leaving each of my kids one million dollars can be accomplished a couple of ways.

I can leave my IRA’s, investment accounts, business, home, etc., to them and we’re good. It’s subject to stock market risks, interest rates, income taxes, estate taxes, lifestyle costs, and healthcare expenses. I can run all kinds of financial scenarios including that Monte Carlo software that spits out the probability of hitting my goals. It’s still a guess at the end of the day.

Another way is I could accomplish my goal is – wait for it – life insurance.

Does it make sense to take a small amount of money now and purchase a single life insurance policy? Would a joint second life insurance policy make more sense? How do I guarantee that my kids will receive the gift I’d like to leave them? Do I want to eliminate the risks I’ve outlined above? If I fall short of my goal, does it matter? Many feel like the rate of return on life insurance stinks. Yet they factor the internal rate of return. Depending upon on circumstances and/or if I want a guarantee to accomplish my goals, could it be the most efficient use of money? Trade-offs – life is full of them.

I’d like to leave a legacy behind for my kids to be impactful with their families and community.

I know, some individuals have no desire to leave their kids any money and that’s your choice. I’m not judging either way. It’s a personal decision. I want to make sure I can accomplish my goal no matter what the future brings. I’d rather have the security of knowing that at my death I’ve completed my bucket list. This is just one of those items on my list.

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Can my portfolio support my lifestyle in my retirement? 

13 + 15 =

Unexpected Death or Disability

ST. CROIX INSIGHTS

Unexpected Death or Disability

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

What to do when the outcome is not what you expected? Now we know that outcomes can be both unexpectedly bad or good. Let’s get the bad news of unexpected death or disability out of the way first.

Unexpected death or disability is certainly bad news. I know, because I’ve been there. (Read more about my story in Bad Things Do Happen). Enough about me, though, I’ve also been there when it wasn’t about me when it was about my clients and friends. I’ve seen the results of unexpected death and disability firsthand and understand the havoc it wreaks, not just on surviving family members, but on a business.
The most important step to minimize these impacts (and forgive my redundancy, but it’s true) is planning. The more prepared you are in the event something should happen, the better off you are when something does happen.

Without the proper foundation, it is impossible to move up the pyramid of building wealth. Certain foundation elements that come in to play when unexpected death or disabilities strike are:

  • Disability insurance
  • Life insurance
  • Long-term care insurance
  • Medical insurance
  • Estate plans
  • Large short-term savings account
  • Protecting your assets

Should you have any questions on the above or are concerned as to whether or not you’ve laid a solid foundation should the unexpected should arise, please do not hesitate to contact me today. I may be reached at brett@stcroixadvisors.com or 651-337-1919.

“Remember, the key to any wealth strategy is laying the proper foundation.”

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Can my portfolio support my lifestyle in my retirement? 

15 + 12 =

Your Will Isn’t Good Enough

ST. CROIX INSIGHTS

Your Will Isn’t Good Enough

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Death and taxes are inevitable.  Subscribe to our blog for information on these timely topics. We provide tips to ensure you’re as prepared as possible. St. Croix Advisors is here to simplify your finances and in turn, your life.

Some (or even a majority) of your assets could be distributed against your wishes as outlined in your will.

Examples are:

  • Your 401(k) assets will transfer to your spouse, regardless of your intentions in your will, if you’re married.
  • Your spouse becomes the sole beneficiary to your 401(k) if you name them as the beneficiary regardless of when the account was established. Check to see who is the beneficiary of your retirement accounts.
  • If it is not your intention to leave your money to your spouse, I’d like to be a fly on the wall while you’re having that conversation. Spouses generally sign an acknowledgment on your 401k account.
  • Make sure that your beneficiary designation remains current. Filling out a quick form is all it takes.
  • Once you’re married, it’s time to update the beneficiary information.
  • Spell out your IRA beneficiaries separately, just as with your 401(k) plan. Claims go to the individual(s) you set forth on your beneficiary designation form.
  • Name whomever you want as beneficiary on your IRA. Make sure your beneficiary designations match your intentions in your will and estate plan.
  • Again, if you’re not married or if your marital status changes, ensure that your beneficiary designation remains current.

You worked hard for your money. Make sure it works hard for you.

Talk to your advisor(s) and attorney(s) as you create your estate plan. Contact us for further information.

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Can my portfolio support my lifestyle in my retirement? 

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