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Going Beyond Money to Find Meaning in Retirement Planning

Going Beyond Money to Find Meaning in Retirement Planning

By Joe

In October of 2018, I had the opportunity to attend the annual BAM National Conference, a gathering of like-minded professionals who ascribe to the ethical, evidence-based values of the BAM advisor community. One speaker’s talk about everything beyond money in retirement planning was especially eye-opening.

Alan Spector is now retired himself, from his position as Director of Worldwide Quality Assurance for the Procter & Gamble Company. He has also done a lot of consulting on management and quality assurance and has written four books. In his experience, people often ask, “Can I afford to retire?” and stop there.

But there is so much more to consider.

His talk, “Financial Planning: Beyond the Numbers,” shifted the focus of the conversation to what retirement will actually look like. While financial security is often the first concern, it is also important to consider what you need to do to ensure your retirement is fulfilling.

For example, if you have a passion for experiencing the world through travel, you will want your financial plan to make it possible to do it in retirement. You assume that it will be a fulfilling experience. The trouble with assuming is that acting on passion in practice is often different from what we envision.

It may turn out that travel actually takes you away from what you are more passionate about in practice. Once you start globetrotting, you may realize there are social organizations close to home you miss being more engaged in. Or there are charitable causes in which you long to take a leadership role.

What Spector recommends is a concept he calls “practicing” retirement. It’s a way of testing out your retirement plan, and it should start about five years before you take the plunge.

Using the travel example, one suggestion is to start a vacation-of-the-month club. Plan something you can fit into your schedule each month. Even regular day-trips or overnights at a B&B can help you get a sense of how fulfilling this direction you want to take your life will be. You can build from there.

This idea works for many retirement plans. Let’s say you want to start a business in retirement; you might want to engage in serious research first to hit the ground running. That way, you can begin working in the business sooner upon retiring, rather than on building it.

Or let’s say you want to teach; you might want to ask a local community college if you can speak to a class and share your experiences. This is a good way to get a feel for teaching before building the next phase of your life around that plan.

Practicing retirement will help you discover potential practical problems as well. Pursuing your passion to the degree you wanted to might make it too difficult to care for your aging parents, for example. Or you may discover health limitations of your own. A more realistic plan is clearer. It’s more likely to be fulfilling if it works.

Spector and co-author Keith Lawrence spent a decade doing research for their book, Your Retirement Quest: 10 Secrets for Creating and Living a Fulfilling Retirement. They say advisors consistently tell them they can help their clients develop a better financial plan when clients have a clear picture of what they want to do in retirement.

I can tell you from personal experience just how true that is.

As a financial lifeguard, I am always focused on the financial aspect of my clients’ retirement … but Spector’s talk reminded me that retirement planning is always about more than money. My goal has never been just to stuff as much money into the coffers as possible. That alone would be meaningless.

My goal is to help my clients have a wonderful, fulfilling retirement. That means helping them – helping you – take steps to develop the self-knowledge that will ensure your activities in this phase of life match your greatest passions.

We’re all on a journey to learn more about our own passions and find ever more meaning in life. Part of my journey requires helping you do just that. So, consider this an invitation.

Let’s help each other.

Please consider Lifeguard Wealth both a resource for financial knowledge and a source of personalized, fiduciary aid that goes beyond money. By guarding the personal fulfillment your wealth can afford you, we are fulfilled. Your passion is ours.

To our current clients, thank you for the privilege of serving you. To everyone considering Lifeguard Wealth, we look forward to starting the conversation about retirement fulfillment planning.

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.

The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
© 2018, Lifeguard Wealth
As always, if you have any questions please contact Lifeguard Wealth.
The S&P 500 Goes Supernova

The S&P 500 Goes Supernova

By Jared Kizer

I think most investment professionals are generally aware of how well the S&P 500 has done relative to virtually every other asset class since the end of the global financial crisis (GFC). A bit more precisely, the S&P 500 is up 352 percent from March 2009 through October 2018 while international developed stocks, emerging markets stocks and bonds are up 140, 142 and 39 percent, respectively. What you might be surprised to know though (I certainly was) is that it’s almost impossible to simulate another same-length period where the S&P 500 had better risk-adjusted returns. In other words, saying the S&P 500 has done well during this period is a gargantuan understatement. As we will see, it’s done so well that it’s reasonable to ask whether anyone alive will ever experience a better performance period for U.S. large-cap stocks.

The last sentence may sound extreme, but I think returns data for the S&P 500 illustrates just how mind-blowingly astounding the post-GFC returns experience has been. Using a technique called bootstrapping (also referred to as re-sampling), you can take the entire historical returns history for any asset class and build out an extremely large number of alternate histories of any length. For example, you can use the entire monthly returns history of U.S. small-cap stocks to build out 100,000 unique, 10-year-length histories to get a sense of what’s theoretically possible, performance-wise, over a 10-year period.

As you might guess, bootstrapping is very similar to Monte Carlo simulation with the key difference being that bootstrapping directly utilizes historical data as opposed to simulating returns according to a particular distribution (e.g., the normal distribution). Bootstrapping is widely used in a variety of other fields outside of finance (and was recently used in a paper by professors Gene Fama and Ken French), and there are a multitude of online resources that you can check out if you want to more deeply understand the procedure. For most, though, all that you need to know is that it’s a great way to get a sense of the possible range of outcomes that you can then utilize to compare to specific, actual historical periods of returns data, as I’ll do here.

From a financial market point of view, it’s been about 116 months since the official end of the GFC. This period covers March 2009 through October 2018. In years this is just shy of a decade of time. Over this period, the S&P 500’s excess return, i.e., the return in excess of the Treasury bill return, has been 16.5 percent per year (or 1.35 percent per month)! In terms of the growth of a dollar, $1 invested in the S&P 500 had grown to $4.52 by the end of October. Most impressively, however, the S&P 500’s excess return achieved a Sharpe Ratio of almost 1.30. While Sharpe Ratios are generally a bit harder to interpret than the growth of $1 or annualized returns, this Sharpe Ratio is about three times higher than its long-run historical value. In other words, not only have raw returns been astounding in the post-GFC period, but the risk-adjusted returns (i.e., Sharpe Ratio) have been otherworldly.

Using bootstrapping, I create 100,000 other 116-month returns histories for the S&P 500’s excess return and analyze them below. The excess returns history I utilize for this bootstrapping procedure encompasses the complete history of January 1926 through October 2018. Let’s first look at a histogram of the average monthly excess return across each of these histories.

Figure 1: Bootstrapped Average Monthly Excess Returns

Notably, the graphic shows that a wide range of outcomes are possible over a decade, a good lesson in and of itself. We see a significant number of 116-month periods where the average monthly excess return was zero percent or less. The average 116-month period achieved an average monthly excess return of 0.67 percent. It also shows, however, that an average monthly return of 1.35 percent — what the S&P 500 actually achieved from March 2009 and October 2018 — is an outlier outcome. Less than 10 percent of the 100,000 samples achieved monthly returns higher than what the S&P 500 has recently achieved. You might say this is noteworthy but not overly impressive and I’d mostly agree. It’s been a great run for returns but there are at least a significant percentage of bootstrapped histories that exceed the March 2009–October 2018 result.

The picture changes when we look at risk-adjusted returns. Figure 2 is a histogram of the Sharpe Ratios across all 100,000 samples.

Figure 2: Bootstrapped Sharpe Ratios

As it turns out a Sharpe Ratio of 1.30 or higher was achieved in less than 1 percent of the 100,000 samples! The actual percentage of samples with a Sharpe Ratio higher than what the S&P 500 achieved was 0.57 percent. In other words, the risk-adjusted returns the S&P 500 actually achieved from March 2009 through October 2018 are almost outside the range of the possible.

The practical lesson here is that the returns the S&P 500 has achieved relative to the volatility investors experienced is virtually unparalleled and may not repeat for many, many decades to come. This result also lends strong support to expectations for very modest returns going forward. It’s hard to imagine how the S&P 500’s excess returns, or certainly risk-adjusted returns, could be anywhere near as high over the next decade as they have been recently. This, of course, isn’t a prediction that the market will crash, but it is a prediction that it’s highly unlikely this amazingly strong (approximately) decade of performance will repeat over the next decade. Wise investors should maintain a globally diversified approach and appreciate that at least some portion of their portfolio benefited from a historically great run for the S&P 500.

This commentary originally appeared November 19 on MultifactorWorld.com

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.

The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
© 2018, Lifeguard Wealth
As always, if you have any questions please contact Lifeguard Wealth.
Temperament Trumps Intellect in Investing

Temperament Trumps Intellect in Investing

By Larry Swedroe

Legendary investor Warren Buffett famously stated: “Success in investing doesn’t correlate with IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people in trouble investing.”

The reason temperament trumps intellect is that having the right temperament is what allows you to ignore the “noise” of the market and be a patient, disciplined investor, adhering to your well-thought-out plan through the inevitable bad times—times when even good strategies deliver poor outcomes.

What does it take to be an investor whose temperament allows you to be patient and disciplined? My almost 25 years of experience as an advisor has taught me that there are seven keys to success. The first—and most important—one is that you need to understand the nature of the risks of an investment before you commit to it.

1. Understanding the Nature of Risks Before Investing

When investment strategies are working, delivering positive returns, it’s relatively easy to stay the course. However, your ability to withstand the psychological stress that negative returns (or even relative underperformance) produces is inversely related to your level of understanding of the nature of risks of an investment.

That means you have to understand the sources of risk (what could cause returns to turn negative or be below expectations) and return for an investment. You should also understand how the risks of each investment correlate with the risks of other investments in your portfolio (whether correlations tend to rise or fall when your other portfolio assets are doing poorly).

2. Know Your Investment History

To paraphrase a noted Spanish philosopher, those who don’t know their investment history are condemned to repeat it. Before investing, you should not only have an estimate of the expected future returns (based on valuations and historical evidence, not opinions) but also the knowledge of the historical volatility of returns.

In addition, you should know how often returns have been negative for such an investment over one-, three-, five-, 10- and 20-year periods. For example, according to factor data from Ken French’s website, you should expect that U.S. stocks will underperform riskless one-month Treasuries about 10% of future 10-year periods, and about 3% of even 20-year periods. While having such knowledge won’t prevent you from being disappointed if that occurs, it should keep you from panic-selling because you were prepared for that eventuality.

Finally, you should have a strong understanding of the potential dispersion of returns: Are they expected to be normally distributed around a mean, or are there reasons to expect the distribution exhibits skewness and/or kurtosis? Skewness measures the asymmetry of a distribution. In terms of the market, the historical pattern of returns doesn’t resemble a normal distribution, and so demonstrates skewness. Negative skewness occurs when the values to the left of (less than) the mean are fewer but farther from it than values to the right of (greater than) the mean.

For example, the return series of -30%, 5%, 10% and 15% has a mean of 0%. There is only one return less than zero, and three that are higher. The single negative return is much farther from zero than the positive ones, so the return series has negative skewness. Positive skewness, on the other hand, occurs when values to the right of (greater than) the mean are fewer but farther from it than values to the left of (less than) the mean.

Studies in behavioral finance have found that, in general, people like assets with positive skewness. This is evidenced by an investor’s willingness to accept low, or even negative, expected returns when an asset exhibits positive skewness. The classic example of positive skewness is a lottery ticket—the expected return is -50% (the government only pays out about 50% of the sales proceeds) and the vast majority end up worthless, but investors hope to hit the big jackpot.

Some examples of assets that exhibit both positive skewness and poor returns are IPOs, “penny stocks,” stocks in bankruptcy and small-cap growth stocks with low profitability. Alternatively, investors generally don’t like assets with negative skewness. High-risk asset classes (such as stocks) typically exhibit negative skewness.

Kurtosis measures the degree to which exceptional values, those much larger or much smaller than the average, occur more frequently (high kurtosis) or less frequently (low kurtosis) than in a normal (bell-shaped) distribution. High kurtosis results in exceptional values that are called “fat tails.” Fat tails indicate a higher percentage of very low and very high returns than would be expected with a normal distribution. Low kurtosis results in “thin tails” and a wide middle to the curve. In other words, more values are closer to the average than would be found in a normal distribution, and tails are thinner.

An asset that exhibits both negative skewness and excess kurtosis should have high expected returns. However, it should also be expected to occasionally produce very large losses. Successfully investing in such assets requires acceptance of that risk and the ability to stay the course, rebalancing, and thus buying more after those large losses—just when it’s hardest psychologically to do so.

Here’s an example of a test you should take before investing in the emerging markets. In 2008, the MSCI Emerging Markets Index lost 54%. Would you have been able to not only stay the course (avoid panic-selling) but buy more to rebalance your portfolio, as emerging markets were the worst performing asset class? If the answer is no, you should not invest in them. I would note that, in 2009, the MSCI Emerging Market Index returned 75%, but only for those investors who stayed disciplined.

There’s one other important point we need to cover regarding knowing your investment history. When recent returns have been well above averages, historical results can be misleading and should not be blindly projected into the future.

Consider the following: From 1928 through 2017, a portfolio that was 60% S&P 500/40% five-year Treasuries returned 8.5%. However, from 1982 through 2017, it returned 10.4%. This “Golden Era” is not likely to be repeated, because three favorable tail winds are not likely to recur:

  • Equity valuations rose sharply—CAPE 10 increased from 7 to 30(as of Oct. 24, 2018).
  • Yield on 10-year Treasury fell from about 14% to about 3%.
  • Corporate after-tax profits as a percent of GNP about doubled, from 5% to 9%.

The result of the favorable tail winds is that current valuations (our best estimate of expected returns) result in the expected returns for that 60/40 portfolio of around just 5%, about half the return of the prior 36 years. Investors need to understand not only the historical returns, but that current valuations matter in projecting future returns.

3. Ignore All Guru Forecasts

Benjamin Graham, legendary investor and co-author with David Dodd of “Security Analysis,” offered this observation: “If I have noticed anything over these sixty years on Wall Street, it is that people do not succeed in forecasting what’s going to happen to the stock market.”

William Sherden came to the same conclusion in his excellent book “The Fortune Sellers.”

He noted: “Despite recent innovations in information technology and decades of academic research, successful stock market prediction has remained an elusive goal. In fact, the market is getting more complex and unpredictable as global trading brings in many new investors from numerous countries, computerized exchanges speed up transactions, and investors think up clever schemes to try to beat the market. Overall, we have not made progress in predicting the stock market, but this has not stopped the investment business from continuing the quest, and making $100 billion annually doing so.”

The evidence on the lack of economic and market forecasting ability led Graham and Sherden to draw their conclusions.

It’s also what led Jonathan Clements, writing at the time for the Wall Street Journal, to offer this advice: “What to do when the market goes down? Read the opinions of the investment gurus who are quoted in the WSJ. And, as you read, laugh. We all know that the pundits can’t predict short-term market movements. Yet there they are, desperately trying to sound intelligent when they really haven’t got a clue.”

The problem with listening to forecasts is that not only is there no evidence of the ability to accurately forecast markets, listening to them can lead to the abandonment of well-thought-out plans.

One reason is confirmation bias. If you are concerned about an issue’s impact on the economy and the market, and a guru predicts that issue will lead to a bear market, you become much more likely to sell.

On the other hand, if another guru predicts that the same issue will be good for the market, you are likely to experience cognitive dissonance and ignore the advice. It’s hard for humans to ignore their biases. Yet successful investing requires us to do so. Remember, you are best served by following Buffett’s counsel: “Inactivity strikes us as intelligent behavior.”

4. Do Not Take More Risk Than You Have The Ability, Willingness Or Need To Take

Most battles are won in the preparation stage, not on the battlefield. If you take more risk than you have either the ability (in terms of job stability and investment horizon), willingness (ability to absorb the stomach acid and sleepless nights that bear markets can cause) and need to take, you increase the odds that the inevitable next bear market will cause you to lose your head while more disciplined investors are keeping theirs.

Losing your head leads to the stomach taking over decision-making. And I’ve yet to meet a stomach that makes good decisions. The result will likely be that your well-developed plan will end up in the trash heap of emotions.

5. Understand That Even Good Strategies Can Have Bad Outcomes

In his book, “Fooled by Randomness,” Nassim Nicholas Taleb noted: “One cannot judge a performance in any given field by the results, but by the costs of the alternative (i.e., if history played out in a different way). Such substitute courses of events are called alternative histories. Clearly the quality of a decision cannot be solely judged based on its outcome, but such a point seems to be voiced only by people who fail (those who succeed attribute their success to the quality of their decision).”

He also cautioned investors that “History teaches us that things that never happened before do happen.” The following is a great example of the wisdom of Taleb’s advice.

Over the 40-year period ending in 2008, both U.S. large-cap and small-cap growth stocks, as measured by the Fama-French research indices, underperformed long-term U.S. Treasury bonds. Does this mean investing in U.S. large-cap and small-cap growth stocks in 1969 instead of 20-year Treasuries was a bad strategy? Or is it that the risks of equity investing just happened to show up over that particular 40-year period?

I would hope that investors didn’t abandon the idea that these risky equity assets should be expected to outperform in the future just because they had experienced a long period of underperformance. From January 2009 through August 2018, the Fama-French U.S. Large Growth and Small Growth Research Indices produced total returns of 378% and 374%, respectively, while 20-year Treasuries produced a total return of 40%. The per annum returns were 17.6%, 17.5% and 3.5%, respectively.

6. Minimize The Frequency Of Checking Your Portfolio’s Value

Nobel Prize winner in economics Richard Thaler, author of the book “Misbehaving,” has found we tend to feel the pain of a loss twice as much as we feel joy from an equal-sized gain. This tendency leads to the behavior known as “myopic loss aversion,” creating a problem for investors who check their portfolio values on a frequent basis.

Consider the following: Based on the historical evidence for the S&P 500 Index (1950–2014), investors who check their portfolios on a daily basis can expect to see losses 46% of the time and gains 54% of the time. However, while they see gains more frequently than losses, because we tend to feel the pain of loss with twice the intensity that we feel joy from an equal-sized gain, the more often we check the value of our portfolio, the more net pain we will feel because our pain/joy meter will be -38 ([-46 x 2] + [54 x 1]).

Over the period 1927–2014, investors who resisted checking their portfolio daily, and instead moved to a monthly check, experienced losses only 38% of the time. That reduced the net pain reading from -38 to -14 ([-38 x 2] – [62 x 1]).

Over the same 1927–2014 period, losses occurred only 32% of the time on a quarterly basis. Thus, investors who reviewed their values quarterly (like many who participate in 401(k) plans and receive quarterly statements) experienced a shift from net pain to net joy of +4 ([-32 x 2] + [68 x 1]).

Investors whose patience and discipline allowed them to check values only on an annual calendar year basis experienced losses just 27% of the time. That results in a big improvement in the net reading, from +4 to +19 ([-27 x 2] + [73 x 1]).

As you would expect, the frequency of losses continues to diminish over time. Using overlapping periods from 1927 through 2014, the frequency of losses at a five-year horizon falls to just 14%. That results in a pain/joy reading of +58. At a 10-year horizon, the frequency of losses falls to just 5%. That creates a pain/joy reading of +85 and will make for a happy (and more disciplined) investor.

If you’re a masochist, the implication for you is that you should check the value of your portfolio as frequently as humanly possible. For the rest of us, the implications are many.

First, the more frequently you check your portfolio, the less happy you are likely to be and the less able to enjoy your life. Second, all else equal, the less frequently you check the value of your portfolio, the more equity risk you should be able to take. Third, the more frequently you check your portfolio, the more tempted you will be to abandon your investment plan in order to avoid pain.

The bottom line is that if you cannot resist frequently checking your portfolio’s value, you should be more conservative because you will be feeling the pain of losses more frequently. Feel enough pain, and even the most well-thought-out investment plans can end up in the trash heap of emotions.

There’s another important message here. The less you watch and/or read the financial media and the less you pay attention to economic and market forecasts (since they can cause you to imagine pain), the more successful investor you are likely to be!

My long experience working with thousands of investors and hundreds of advisors has taught me that these six strategies are the keys to being a disciplined investor, greatly increasing the odds of achieving your goals. But I promised you seven.

The seventh comes from Meir Statman, finance professor at the University of Santa Clara: “Start keeping a diary. Write down every time you are convinced that the market is going to go up or down. After a few years, you will realize that your insights are worth nothing. Once you realize that, it becomes much easier to float on that ocean we call the market.”

Summary

Napoleon, perhaps history’s greatest general, observed: “Most battles are won or lost [in the preparation stage] long before the first shot is fired.” That advice applies to investing as well.

Now that you have the seven keys to being a patient, disciplined investor, you have the knowledge needed to prepare to win the inevitable war for control that occurs between your head and your stomach whenever bear markets occur or sound investment strategies deliver poor results. Forewarned is forearmed.

This commentary originally appeared November 16 on ETF.com

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.

The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
© 2018, Lifeguard Wealth
As always, if you have any questions please contact Lifeguard Wealth.
A Guide to Starting Family Financial Conversations

A Guide to Starting Family Financial Conversations

By Jeff Johnson

I’ve been a close observer of the way families make, communicate and implement financial decisions for most of the last four decades. In that time, I have learned that many individuals and couples make family wealth and lifestyle planning decisions privately, then avoid discussing them with other family members because it’s an uncomfortable conversation.

The family leader or leaders usually know it would be better, in many cases, to explain details, discuss issues, and secure commitments to and acceptance for the family’s financial direction. Clarity equals confidence, and being financially confident empowers a fuller life for all involved.

Yet many, if not most, family leaders struggle to share the intimate specifics, fail to collaborate on decisions, or neglect to have reasonable and open conversations about a range of family wealth and life planning matters. In my experience, the reason for this is twofold. First, as I previously mentioned, it’s just plain uncomfortable (or, at least initially, easier to do nothing at all). Second, few people are trained to hold money discussions and just don’t know where to start or how to do it.

So, you may ask, what exactly is involved in starting a constructive dialogue about your family finances and the decisions that affect them?

Having worked with hundreds of families to meet their life and long-term financial goals, and based on my unscientific observations, here is where and how you might want to start your family’s next important conversation about money:

1. The late Stephen Covey, a legendary author and speaker, advocated planning by “starting with the end at the beginning.” Before sitting down for the planned conversation, very carefully consider and decide what you hope to accomplish. Be very specific. Then, pen in hand, list the most important aspects of a desired outcome.

2. Next, envision the setting where this conversation could take place. Consider a location where its content can remain confidential, yet also is comfortable and unthreatening.

3. Decide who should be present. Will you ask only those other family members required to execute the decision in question or limit participation to a close group whose input and opinions you value? Do you wish to include every family member with a possible stake in the decision’s outcome or that it may affect? Additionally, given those who will be involved and the matters to address, imagine the ideal timing of your family discussion.

4. With the “who, where and when” in mind, consider the “how” part of the conversation. Are you, the family leader, the best person to lead the discussion? Perhaps a trusted financial advisor might be a better “meeting leader” in some instances.

5. With the big picture in mind, write down a first draft of an agenda or outline. Use it as a guide for the conversation that you (or your meeting leader) will have with your family member(s). Prepare to discuss not only what needs to be accomplished, but also why it is important. I have heard family heads explain why a given decision was theirs to make, but also why it was important to them that family members agree.

6. Set the stage for a successful meeting by introducing the conversation topic in advance (and individually, if several people are involved) and by offering a personal “invitation” to each impacted family member.

7. Review your initial agenda, editing and amending as necessary. Practice the delivery of your most important, core message. Consider a trial run-through with a trusted financial advisor, your attorney or your CPA.

8. On the appointed day, be prepared for emotions that could range from acceptance, acquiescence, approval and gratitude to sadness, disappointment, anger and resentment. There may not be immediate acceptance of the message or your choices. Consider how you will react to the various possibilities. If your plan and thinking have been thoroughly prepared and developed, stick to your final agenda with confidence. Remember that being a caring family leader and financial decision-maker doesn’t mean you cannot be firm in your resolve to achieve the best outcome for your family and its future.

Serious family financial conversations are rarely easy. Strong bonds, good relationships and family members committed to each other’s happiness and well-being don’t always make a difficult discussion easier. Indeed, some conversations can be even more challenging in those circumstances. If you have experience with making serious presentations and you are comfortable with your ability to take the steps I’ve outlined, set forth putting your plan together.

On the other hand, many people would feel uncomfortable, intimidated even, developing and leading such an interaction with their loved ones. A trusted, fiduciary financial advisor can be instrumental in helping to formulate the topic and effectively deliver the desired message. I know that I’m honored to be involved when asked.


By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.

The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
© 2018, Lifeguard Wealth
As always, if you have any questions please contact Lifeguard Wealth.
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