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

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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? 

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Make a Dream Board: Life Lesson 49 of 50

ST. CROIX INSIGHTS

I’m Done Asking for Permission

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

make a dream board

Photo by Rana Sawalha

When you make a dream board, you’re setting powerful internal forces in motion that will move you toward your goals, even when you’re not consciously aware of it. Visualization is one of the most powerful tools we humans have for achieving our dreams. 

It may seem silly that by collecting words and images on a piece of paper, we can channel some magic power that influences our lives—but studies have shown that through visualization, we can actually train our brains to work for us in surprising ways.

Make your subconscious work for you

There’s a reason cultures and traditions around the world use visualization to effect powerful change. By constantly envisioning ourselves achieving the things we really want in life, we’re forming habitual thought patterns that keep us moving toward that goal.

Make a dream board- it isn’t just a symbolic action; it’s a way to keep your mind focused on achieving your goals so your subconscious can keep working for you.

Focus your energy through constant reminders

It’s not enough just to jot your dreams on a piece of paper and file it away somewhere; dream boards work best when you keep them in plain sight. Post yours in your office, your bedroom, even your bathroom—anywhere you’re sure to see it every single day.

I personally use a dream board to help focus my personal and professional financial decisions. It hangs right next to my desk as a daily reminder of the ideas, goals, dreams, plans, and visions I have for myself and my future. By keeping it within sight every single day, it’s easy for me to get motivated to do something about my dreams.

Help others help you

Some dreams just can’t be accomplished alone. There is power in sharing your dream board with others. As soon as you start to tell people about your goals and desires, they’ll be able to help hold you accountable for making them happen.

 

Article: I Don’t Want To Share

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

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Your Money or Your Life? – Life Lesson 41 of 50

ST. CROIX INSIGHTS

Your Money or Your Life?

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

your money or your life

Society tells us that accumulating money is what life is all about, but you and I know that isn’t the whole story. We’re all trying to survive, but making a living isn’t just about accumulating as much money as possible—it’s about living. When it comes to the guiding force in your life, you have just one choice to make: Will you choose money or your life?

It may sound odd to hear this from a financial planner—someone who makes his living by helping others manage their wealth—but it’s the truth. In my experience, more money tends to lead to more stuff, and more stuff leads to more stress.

As the Notorious B.I.G. once observed: “Mo’ money, mo’ problems.

It’s not like this is the first time we’ve heard this, though I know I still need to be reminded of it myself at times. We’ve all been told to buck this materialistic trend. That long-term happiness isn’t about stuff; it’s about the people we surround ourselves with, the connections we form, and the difference we make in the world.

No one’s asking you to choose a life without money. I’m simply asking you to choose life.

Work on building a fulfilling life, one with more focus on family and friends, God, and meaningful experiences…and less focus on having the right material stuff to impress others.
After all, you can’t take your stuff with you when you go, but you can make a lasting impact while you’re here.

Article: Don’t Retire with a Mortgage

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Don’t Retire with a Mortgage. Life Lesson 38 of 50

ST. CROIX INSIGHTS

Don’t Retire with a Mortgage.

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

retire with a mortgage

This lesson is a short one, but that’s because it’s simple: don’t retire with a mortgage.

Other financial advisors might disagree with me on this. They might tell you about the great interest rates, they might highlight the tax deduction benefits, yada, yada . . . but they’d be wrong.

As far as I’m concerned, the question of whether or not to retire until your home is paid off boils down to one simple fact: debt sucks! Why deal with the burden of a major monthly payment when you’re on a limited income?

Don’t retire with a mortgage!

I don’t care about the interest rate, the tax deduction, or any of the other “benefits” you’ll hear about; it’s just noise. Take my advice and don’t retire with a mortgage—period. Your future self will thank me for it.

Investopedia has some sound information on the matter as well: Part of the rosy picture associated with retirement is the thrill of kissing that monthly mortgage payment good-bye—on the presumption you’ll have paid it off by then. Lately, there has been a shift in thinking that has seen many financial planners suggest that retirees continue to carry a mortgage into and throughout retirement. Reinvest the money from your home equity, and suddenly you’ll have a stream of new income, making your golden years a little more golden.

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

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Pursuing Your Passions: Life Lesson 29 of 50

ST. CROIX INSIGHTS

Pursuing Your Passions

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

pursuing your passions

Photo by Kal Visuals

If you’ve postponed pursuing your passions for the pursuit of money, don’t worry: there’s no shame in this, and you’re not alone. Over the years, I’ve found myself doing the same thing — but I’ve come to believe there’s a more fulfilling way to live.

There might have been something you enjoyed or loved doing when you were younger. But society, parents, or others in your life said you couldn’t make a living doing it. Their negativity ended up deterring you from pursuing your passions. Now you—and, sadly, many others—are just too tired from the daily grind to have the energy to spare for those passions. As a result, many people postpone the things they want the most until that magical future date called “retirement.”

Well, you know what? Retirement is, for many of you, in the future. This is now. Don’t let anyone tell you that you can’t make a living with your passions. People do it all the time! If you’ve got a calling, don’t let anyone tell you that you don’t deserve to go for it. Money is great, and it’s important to plan for your retirement, but life is too short to spend it waiting for the future. Time is a precious gift, and it’s your responsibility to spend yours pursuing your passions so you can live a fulfilling life.

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

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