Achieving Financial Security


Achieving Financial Security


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

1 + 7 =

The Dreaded B-Word


The Dreaded B-Word


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, 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? 

1 + 6 =

When Your Bus Ticket Gets Punched


When Your Bus Ticket Gets Punched


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

6 + 5 =

4 Kinds of Investors


4 Kinds of Investors


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

7 + 12 =

Hello, 2021! We’re glad you arrived


Hello, 2021!
We’re glad you arrived.


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? 

9 + 3 =

2020 Presidential Election and Your Money


2020 Presidential Election and Your Money


2020 presidential election
As we all know, our next Presidential Election occurs on November 3, 2020. I don’t know about you, but I’m ready for November 4, 2020!
It seems that with the power of the internet, we are all in a cycle of constant news, content, and connectivity. But even in today’s world, it’s still possible to find yourself without cell phone coverage, cable TV, or even the internet. I found myself in a place just like that for five days over the summer, and it was heavenly.

As I write this, we have about 49 days until the next President of the United States is elected. Those of you reading this are Democrat, Republican, Independent, Conservative, Liberal, and my list could go on. Yet one major commonality we all have is our money:

We’re all concerned with things like planning for our retirements, managing our investments and 401k plans, and funding our kids’ college.
We have two choices this next election. How will this outcome impact us, our money, and our investments? As of this writing, here’s what I’ve been able to decipher, along with my overall thoughts for the end of 2020 and the beginning of 2021. Keep in mind that I have no idea who is going to win (but I sure wish I did—it would make my job a lot easier!).
The markets have demonstrated it can perform well under both Democratic and Republican administrations.

No matter who wins the next Presidential Election, here are some of the common threads I see in the future we face:

  • Telemedicine was already growing and has now hit overdrive due to the coronavirus.
  • We strive for faster internet, and 5G will impact all of us.
  • Green/clean energy (e.g., electric cars) will continue to become more common, right down to autonomous driving.
  • Let’s not forget about the increase in automation.
  • Are you receiving more packages at home than ever these days? I don’t see that   changing.

If Vice President Biden wins, these are some potential market sectors to own:

  • Hydroelectric.
  • Solar and Wind.
  • Infrastructure companies that focus on roads, bridges, and airports (assuming people start flying again).

If President Trump wins, these are some potential market sectors to own:

  • Heavy equipment companies.
  • Heavily sales-driven internet companies.
  • Social media companies (Twitter loves him!).
  • Overall US-based manufacturing companies.

Under Vice President Biden’s tax plan (versus President Trump’s):

  • Capital gains tax would move to 39.6% on the wealthy.
  • Step-up in cost basis would be eliminated.
  • 1031 exchanges would be eliminated.
  • Corporate tax rate would increase to 28% (from 21%).

I’ve seen slightly different figures, but the Federal Reserve has printed over $3,500,000,000,000 in a matter of months. I don’t know what comes after a trillion—do you? I haven’t talked to anyone who hasn’t asked how this is going to get paid back.
Today, over 1,000 people a day are moving to Florida from the Northeast alone. I suspect income tax-free states will continue to see an increase in their populations thanks to newcomers from high-tax states.

This year, we’ve seen big stock market swings, though lately that’s settled down. You may be concerned about this presidential election. If you become worried about your investments or the markets or just need a sounding board, give me a shout.
Finally, here’s a reminder you’ve heard me stress: having some amount of cash on hand continues to be a solid strategy.

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

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