2022 EP0101 - PLANNING MATTERS RADIO - NEW YEAR

We want you to plan for success. Welcome to Planning Matters Radio. Welcome once again to Planning Matters Radio. I'm here once again with our guest Peter Rishon.

He is a Ramsey trusted SmartVestor Pro, the author of Understanding Your Investment Options, and he is a fiduciary financial investment and retirement planner serving clients throughout the great state of North Carolina. Peter, how are you doing today? I'm doing well, Scott. Thank you very much. And first time getting to connect in 2022. Happy New Year to you. Hope your year is off on the right foot. It is great.

It's really great to talk to you. Kind of getting through that holiday rush. And now we've kind of hit the new year hard. Everybody breathes a sigh of relief, although a lot of resolutions may have been made and broken already. Today we're going to talk a little bit about some ways that you can keep some of those resolutions, some common financial goals, how to follow through on them, be smart with them, and then what the outcome of having that plan is going to be. Having a plan to achieve and accomplish those small steps that can make a big difference over time. So, Peter, I mentioned that you're a Ramsey trusted SmartVestor Pro.

Can you take us through maybe some of the changes going on with that nomenclature? Yeah, well, absolutely. Would love to. So Dave Ramsey, I think most of our listeners are probably familiar with that name, if not avid followers of Dave. Dave is probably one of the best known financial gurus, coaches, mentors in the world, certainly in the country. He has the second highest listened to weekly radio program, weekday daily program.

He's had it for more than 20 years. He is a multiply published best selling author of The Total Money Makeover, and that's his best known book. It outlines the baby steps, as he calls them, to financial freedom. His course, Financial Peace University, is taught in churches all over the country.

And I love this. His course on financial literacy is actually being taught in an increasing number of high schools across the country. Before the Christmas break, I actually got a chance to go into a local high school here and teach four classes. Four different classes came and went.

One class, but to four groups of students on the value of saving early and often and the difference between saving and investing. And I hope I made an impact, but I have a whole new appreciation for teachers. Maybe some apologizing to do from from back in the day. But but the evolution that you mentioned, Scott, is that the nomenclature used to be a Dave Ramsey smart vester pro.

It has changed and evolved. And we are now hearing from Dave, from his team, the language of a Ramsey trusted smart vester pro. And here's the reasoning behind that is that Dave is probably at some point in time thinking about his own retirement. I mean, what good would it be taking retirement advice from a guy that never has the outlook that they want to retire or never retires themselves?

Now, as a financial adviser, I caution people to align themselves with with an adviser that that in all likelihood is not going to retire before they do or during their retirement when they need them the most. But in Dave's case, he has built a succession plan and he's been grooming many of his team to help him fill the role when he does eventually retire. And therefore, they are trying to, in a light sense, remove Dave from the equation, tying so much into Dave and brand the Ramsey trusted. So same meaning for me is that I've gone through kind of an interview process to make sure that my views, my values align with Dave.

His teaching, his team did background checks on me and then officially became that smart vester. The Ramsey trusted used to be the Dave Ramsey smart vester, now the Ramsey trusted smart vester. And I've been doing that as an official Dave Ramsey smart vester pro for a number of years since really I formed my own firm.

But it is evolving. And in the years to come, we will hear much more about being a Ramsey trusted smart vester pro fiduciary investment professional that can help you with the managing, the monitoring and the growth of wealth. Once you kind of get through the Dave Ramsey baby steps one through three, which is making sure that your foundation is in place and that you're debt free. Well, that's great. So in the future, if you hear that your fiduciary advisor or financial advisor has become a Dave Ramsey smart vester pro or then has become a Ramsey trusted smart vester pro, at least for the time being, those are one of the same.

They're kind of moving through the titles. Yeah, it's evolving, but they are trying to push the Ramsey trusted branding more and more quickly. So, yeah, you'll hear more Ramsey trusted. Well, the reason why you'd want to talk with a Dave Ramsey smart vester pro like Peter Rishon is that you might have some common financial goals. If you're interested in talking with Peter personally about those, you can call him at 919-300-5886 or go to his website, www.richonplanning.com. Peter, common financial goals. We all have some kind of broad goals that we want to achieve, especially at this time of year.

New Year's resolutions are still on our minds and hopefully still active, as you've mentioned. Financial speaking, there are many goals that maybe yourself as a planner you would hear about and help your clients with. So what are some of a few of those common goals that folks have? So I hear a lot about I'd like to save more. I'd like to spend less as being the most common financial goals.

And I think that those are monumentally important. They all, those two, boil down to a better understanding and control of your budget, what comes in and what goes out. They must be in alignment in order for you to make every other bit of financial progress in your life. And when I say in alignment, what comes in needs to be more than what goes out in order to take those next financial steps.

Now, not everybody is in that situation. Not everybody has that luxury, unfortunately, of being able to snap their fingers and simply say, oh, well, I'm going to control my expenses and I'm going to earn more or I'm going to spend less. But it is something that we should be striving towards and paying attention to your money. Maybe step one, opening your mail. I've had conversations with people that say you will, the way I say it to them, you're never going to have the basis of an outlook for financial success if you don't open your mail and pay attention to the bills when they come in.

You got to pay attention to those. But after that, you know, Dave talks about every dollar having a purpose before the beginning of the month, being intentional with what money is coming in and where you're going to send it out to, making sure that your obligations are met, that you're getting out of debt. That's another big, big financial resolution this time of year.

I'd like to get out of debt. And a lot of us, unfortunately, dig that hole a little bit deeper during the holiday season. It's just very easy to go out and overspend and swipe the plastic rather than paying cash that we actually have. But designing, implementing and sticking to a budget really important to achieve all of the other ones, which I generally do help a little bit more with, which is achieving better growth, funding retirement, getting or reviewing life insurance. That's a big one. Completing those legal documents. And, you know, not something I handle, but I would say the majority of people that I talk to don't have legal documents in place. And a lot of people are getting ready to make the transition to retirement when those are of paramount importance.

Now, I think that any mature, responsible adult over the age of 18 with a spouse, with a mortgage, with a house, with children, you need to have your legal documents, but they need to be reviewed. And if you don't have them by the time you're transitioning to retirement, here's your sign. Now is the time. Get those done.

So that's a big one. Understanding and handling risks. You know, a lot of us are worried about what the market is going to do and don't want to lose a great deal of money if the market does see a downturn into 2022. A lot of people have a resolution or maybe they don't, but they have a concern that they'd like to address that.

I help with that. Creating the retirement timeline and deadline of, yes, I would like to retire this year or sometime in the next few years. Giving, gifting, starting savings accounts for kids or grandkids college education. Those are a lot of the financial goals that I hear about and I help with on a day to day basis. Even if you're having fabulous success with your investments in future planning, or if you're having less success in the market or with your investments, if you don't understand how well or how poorly you're doing at any given time, then it's real hard to get a handle. I mean, you mentioned in past episodes, rebalancing your accounts.

Even if you're doing really well, you can't just let go of the balloon. In that case, you would still need to rebalance things, keep them kind of in the way they're going, just as you would if you were perhaps having a downturn. Yeah, and rebalancing is something that a lot of people forget about and overlook or just don't really understand the importance of. If my allocation for retirement starts off where I want to be 75 percent at risk, let's say, and then we go through a decade like the last decade where the market has done phenomenally well, I am overexposed to the appropriate level of risk because the risk side of my portfolio has grown. And with 401Ks being kind of automatic and out of sight and out of mind, a lot of people don't do that.

If you fall into that category, that should be one of your resolutions. I mean, Scott, at the base of it, doing that key rebalancing probably takes the grand sum total of 30 minutes of your time over the course of the year. If you understand what you're doing, maybe 30 minutes to get educated on what you're doing and why it's important, but 30 minutes then to execute it on it over the course of the year.

That's the minimum time that you should be committing to making sure that you are not exposing more of your hard work, life savings to the risks of the market than you've found appropriate. And you mentioned like that everybody kind of wants to know where they stack up. You know, the question is, well, what's the measuring stick there, right? If I'm comparing myself to my peers, some peers may be way ahead of me. Some peers may be way behind me in the amount that they have saved. Does that make the amount that I have saved abundant or insufficient?

Well, there's really no way of knowing that because there's not a measuring stick. The measuring stick is you and your life circumstances. And it's why going back to those resolutions of saving more and spending less and creating and controlling a budget are so important. The budget is the mechanism to create the measuring stick. And I may have a completely different budget than my brother or my neighbor or other people in my age group based on how I live my life and what my goals and expectations are and what my bills are and the financial situation that I've put myself into or created for myself. So we really need to get an understanding that in order to achieve these financial goals, it's sitting down and just learning more about ourselves, being introspective and self-reflective about who we are and our behaviors with money that we've created, the relationship that we have with money and how to be the owner of that situation and the master and in control of the money that we are able to create. It's interesting you mentioned that even if someone decided to spend a portion of their money frivolously, at least they should know that they are doing that with intentionality as opposed to just money flying out the door willy-nilly. Not even if somebody spends money frivolously. You should have some part of your budget earmarked to have fun and enjoy life. Look, life is short and money is important but it's not the most important thing. We've got to enjoy our time here and money is the tool to support what's important to us. And if every dollar that we have coming in and going out is earmarked for an obligation or a necessity or subsistence and we have no fun in life, what is it all worth? And regardless of your beliefs, I mean I know my beliefs but we have lots of listeners and regardless of your beliefs, whether you think you go up, down, sideways or come on back, the money stays here. And to spend so frivolously that you run out of money or outspend your ability to earn, that's a bad situation.

But almost equally as bad and sad is those that pass away with a pile of money and this long unfulfilled bucket list, right? We've got to strike a balance there. So within that budget there should be a section earmarked after your obligations, after your subsistence of I'm going to enjoy my life and have a little fun and here's my allowance that I am allowing myself that will keep me between the ditches and between the gutters, the guide rails that will keep me making forward progress but still allow me to have that fun that life is really about. Great advice from Peter Rochon.

If you want to talk to him directly about those goals, that budget, that ability to stay within the bumpers of your budget, call him at 919-300-5886. We made it. It's 2022, Peter. I can't believe it's finally here. What do we have to look forward to from a financial planning standpoint in this year of 2022? Low interest rates may be creeping up a little higher.

Inflation, market volatility, taxes, I think those are going to be the leading stories of 2022. I do want to go back just for a moment and talk about the word budget. That's like the four letter word of the financial world. Nobody loves that word.

It's a bad word. Oh, I hate a budget. Let's replace that maybe with spending plans so that we feel like we have permission to spend rather than limitations on what we can spend. And sometimes during the course of conversations, I'll subtly begin to replace that word because I can tell somebody is just resistant to the budgeting process, but creating a spending plan. You know, it's weird. It's just a psychological thing.

They're all for that. So money is math, but money is also mental, emotional and psychological. And if you feel better creating a spending plan rather than having and sticking to and being limited by a budget, just start making that change in the language.

And it's going to help you accomplish the same goal of identifying what within your income is available for enjoyment of life rather than subsistence and obligations. But the stories of 2022, Scott, we've seen historically low interest rates now for more than a decade, and they keep getting lower and lower and lower. And geez, where is the bottom? And globally, there were actually places where if you wanted to keep your money safe, you paid for that privilege. There were negative interest rates being issued internationally.

Now, the U.S. never got there. But I know my savings account was like point zero one percent interest pennies on on the dollar over the course of the year next to nothing. Thankfully for savers, interest rates are probably going to begin to increase now.

Here's here's the kicker. When interest rates increase, guess what? The housing market is going to slow down because these low interest rates have driven the ability to buy larger houses for people who can qualify to upgrade and to refinance. And the housing market is a big driver and a leading indicator of the economy as a whole. So when the housing market begins to slow down, if and when they raise interest rates, it's going to have a couple impacts. A, the market is also impacted.

Right. Interest rates go up. Housing market slows down. Bond market also potentially loses value. Stock market inherently has some downward pressures.

So this is something that they are really delicately trying to balance because the the weapon that the government that the Fed, not the government, the Fed is different than the government. But the Fed has against rising inflation is to try to tame that rising inflation by raising the interest rates. But raising the interest rates has an inverse effect on bond values and on the speed and the velocity of the housing market, which are two major drivers of the economy. By the way, the bond market dwarfs the size of the stock market. We hear all about the stock market all day, every day. But the bond market is about four times the size of the stock market.

And so those things are going to be factors that I pay attention to as I am helping clients to make financial decisions for 2022 and the year to come. Inflation plays a part in that. I don't think that we have even begun to see the end of the story with inflation.

I talk to a lot of people that have jobs and occupations that are in various parts of the supply chain in different industries. And unfortunately, we're, I think, just the tip of the iceberg on on the full story scope and size of this inflation. Hopefully we can slow that down. But what that's probably going to take is rising interest rates. And if you have debt, that's not going to be in your favor.

If you have savings, it may work well for you in one aspect, but it may have some side effects as well. Market volatility could potentially be a result. Now, the market has been uncannily unvolatile for a number of years here. I mean, we've we've seen a few hiccups, but the number of times in a given year where the market moves more than one percent in a given day up or down is one of the main measures of volatility.

And twenty twenty one twenty twenty minus covid twenty nineteen twenty eighteen twenty seventeen all the way back to about two thousand nine. The number of times that the market moves more than one percent in a day has been comparatively very low. And I think that we may begin to see a little bit more market volatility. And unfortunately, I'm concerned that it could be a downward volatility. Volatility can be good, by the way.

It can go up as well. And then taxes. We know some of the story of the future of taxes and it doesn't look good. So I'm doing a lot of proactive planning for my clients. I did it last year. I'm doing it this year.

I'm doing it for several years. But in twenty twenty six, tax rates will go up and included in the infrastructure bill and the build back better bills and proposals and the language that is coming out of future things to come. A lot of the opportunities to better control our taxes into the future and minimize what impact these changes have on us could be going away. So proactive planning for your tax, because keeping more of your money is just as effective as shooting for higher returns. But with lot with a lot less risk involved.

So let's be efficient with those those taxes as well. Peter, what does it make you feel in your professional opinion, what does it make you think when kind of the current events in the news that we're seeing don't seem to line up with market performance that we're seeing at a given time? You mentioned that the market has been steady and yet the world seems to be unsteady.

Where is that incongruency coming in? Is that something to be concerned about? Is that something to be glad about?

What do you think? Well, part of the problem, Scott, is that the news, their number one job isn't to report the news, it is to gain viewership. Right. The number one job in Washington is that the politician's main job is to get reelected. The number one problem with the news that we receive is that their their job is to generate revenue for the news station or the news media outlet. So blood shed cells, if it bleeds, it leads, you know, the sensational, awful things that we hear about. It is human nature to watch the proverbial train wreck. And those things that make us scared, that they draw an emotional reaction are the things that they are going to lead with and talk about constantly. And that really is is the separation in my mind, the divide between what you hear on on the media and then going out in your neighborhood and actually talking with your neighbors.

Like if you just paid attention to the news, the world is full of hate and ugliness. We did a drive over the holiday season here in the office where we ask for people to make Christmas a little brighter for kids that might not otherwise have a very good Christmas and seniors that were in need. Oh, my goodness. The outpouring and the generosity from our community and our neighbors just floored me.

It was amazing. And if I go out and talk to my neighbors, I don't experience the kind of hatred or divide that I see on the news. Likewise, what we hear about in the news when it pertains to the stock market. Yeah, the stock market is volatile. Yes, the stock market can lose value.

No, we don't want to see it. It could it can swing significantly, but they're going to talk about it as if the end of the world is tomorrow. I get a lot of questions about email marketing material and radio commercials in particular that say, hey, the collapse of the dollar is imminent.

You know, we are going to see the crumbling of our financial system. You know, the dollar has not always been the world reserve currency before World War Two. It was the British pound sterling. And yet Great Britain is still a country as far as I know, like their civilization did not crumble in and decay as soon as it was switched over to the dollar. And even within Europe, you know, it's gone over several changes since then. They went from the British pound to the euro with the European Union and back out of that with Brexit.

And yet they maintained a civilized society. Look, I don't think that we're going to lose our status as the world reserve currency in the imminent immediate future. Could it happen?

Potentially. But all this marketing material acts as though it's going to happen tomorrow and the solution is to buy gold. Now, nothing wrong with gold. I own a little bit of gold in a couple of different forms. But if they're so convinced that the dollar is going to collapse and that gold is the solution, then why are they asking me to send them my dollars and they're going to send me their goal? Right.

It just doesn't make any sense that there is money to be made in the sale and it's created by the fear and the emotion that they are inducing in people. So, you know, that's I've probably gone on a little too long and deep about that. But the headlines are not the reality, unfortunately, is the bottom line. Nine one nine three zero zero five eight six four more smart things like that from Peter Roshan, if you want to talk to him directly. Peter, this time of year, a lot of people are focusing on their resolutions. It's kind of a time to reset, refocus, reflect. So this might be the time of the year where someone is the most receptive to kind of advancing their financial situation in a positive way.

What are some ways that people can stick to these financial resolutions that they make at this time of year? So I don't know if you've ever heard the acronym smart, but your resolution should be smart, specific, measurable, attainable, realistic and timely. Specific.

There is a certain thing, not this grandiose kind of idea, but a very specific thing that you want to achieve. Measurable. You can see that thing happening. Attainable. It's realistic, right? I want to win an Emmy this year. Well, that's not realistic.

I'm not producing a whole lot of music or anything, right? We've got to make them attainable, realistic and timely. I want to achieve this goal by the date, you know, whenever. I've got a specific period I want to achieve it. So if you want to lose 50 pounds, don't set that as your goal. Do five pounds this week instead or five pounds this month. And that breaks it down to a smaller, realistic, timely, measurable chunk.

Right. For a physical kind of analogy there. Equally with a physical analogy, I could read all of the books about lifting weights and working out that exist in the world.

But if I don't take action on them, it's never going to get done. So it takes more than studying. It takes doing in order to achieve those goals. And if I go to the gym by myself, I see all this fantastic workout equipment. I might not know how to use some of it properly to achieve the goal that I want. So having a trainer to teach you how and hold you accountable works in the physical fitness world as it does in the financial fitness world.

Having an adviser to teach you the tools and to hold you accountable. And, you know, speaking back to the individuality of every situation, a yoga instructor and a bodybuilder both have a similar goal of being in shape. But the way they get there is going to be very different.

The yoga instructor probably has a keto diet with very few carbs and and not a whole lot of calories, where the bodybuilder might eat 20000 calories before most people are out of bed. The way they go about achieving those goals is very different. So, you know, all of those things taken into account, it's really about starting. A long journey starts with the first step, I think a wise man once said, and it's true. So you've got to take that step. You've got to be motivated and keep those goals in mind and be smart, specific, measurable, make them achievable, realistic and timely. No better way to keep track of all those things than with a checklist or a plan.

If you want to get your hands on that optimized retirement plan from Peter Rishon, you can call 919-300-5886 or go to www.richonplanning.com. It's a fresh new year. We all want to do the best things for ourselves and our families.

Peter, we're so happy to have had you here. Any closing thoughts for us before we wrap up our first show this new year? Well, you mentioned the checklist. I've got a quick checklist.

It's one page. It's five high level items, the 2020 financial and retirement planning checklist. If all the boxes are checked off, you're probably in good shape. If one or two of them are not, then give us a call and we can talk about how to make sure that you have done everything that you need to do and call us for the list. We can email it out to you.

It's a great thing to have in your hand to go over on your own time and understand and identify the areas that you may need to pay more attention to. That's a great resource. Peter, thank you once again for your time.

It was a pleasure having you on the show today. Folks, 919-300-5886, you can get your hands on that 2022 checklist or all the great information from Peter Rochon. And we do hope you join us next time here on Planning Matters Radio.

This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to take investment tax or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss principle. Advisory services offered through Brooks' Own Capital Management, a registered investment advisor. Piduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.