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The Twelve Days of Financial Wisdom: A Holiday Guide

The holiday season is in full swing. Throughout the years our family has grown to include new family members from different cultures and traditions. As we navigate a growing family and offer flexibility around busy holiday schedules, we want to embrace the joy and wonder this time of year without succumbing to the humbug feeling that can easily overtake us if we cling too tightly to old rhythms in this new life-phase.  This year I find myself smack dab in the middle of a home remodel with no kitchen and zero furniture downstairs. In fact, I even found myself cooking dinner in our Master Bathroom the other night! It would be easy to focus on the inconveniences of a remodel, so we’ve chosen to stay positive and be thankful for all that we have been blessed with.  Like the Grinch, I’m having my heart melt by connecting with people this season.  An extra smile at the grocery store, a friendly wave and a thank you to the hard-working delivery people. I can see joy and wonder surrounding me this time of year if I just look around. I recognize this season isn’t the easiest or merry for many. It can be full of tough memories and lost loved ones. There is conflict all over the world reminding us that not everyone is safe and happy this year.  Elvis knew what he was talking about when he sang about a blue Christmas. There especially seems to be a healthy tension this year for holding space for both hurt and hope. If you find yourself in a season where jolly and laughter elude you, then it is my sincere hope that my feeble attempt at some holiday humor brings a smile and a laugh. There’s a reason that I’m a Wealth Advisor and I’m not a stand-up comic, so let’s just keep that in mind too! Without further I do, I give you, “The Twelve Days of Financial Wisdom.”  (P.S. If you can’t help but think of me singing this, let’s just pretend that I’ve got the voice of Mariah Carey belting out these great lines!)

Day 1: Diversify Your Assets Wisely

🎵 “On the first day of Christmas, my Wealth Advisor said to me: Diversify your assets wisely!” 🎵

Just like a well-balanced fruitcake, a diversified investment portfolio is a key ingredient for financial success. While fruitcakes might not be everyone’s favorite, diversification is almost universally adored by savvy investors. Spread your investments across various asset classes – stocks, bonds, real estate – with a goal of reducing risk and increasing potential returns.

Remember, just as a fruitcake brings together different flavors for a delicious outcome, diversification brings together different assets for a well-rounded and resilient investment strategy.

Day 2: Compound Interest, Oh What a Joy!

🎵 “On the second day of Christmas, my Wealth Advisor said to me: Compound interest, oh what a joy!” 🎵

Imagine compound interest as the holiday gift that keeps on giving. Much like a snowball rolling down a hill, your savings can accumulate and grow over time with the magic of compounding. The earlier you start, the larger the snowball – uh, I mean, your savings – becomes.

So, this holiday season, give yourself the gift of an early start on savings and watch your financial snowball grow into a winter wonderland of wealth.

Day 3: Budgeting Bells Are Ringing

🎵 “On the third day of Christmas, my Wealth Advisor said to me: Budgeting bells are ringing!” 🎵

While the holiday bells may be jingling, it’s essential to keep your budget from jangling out of tune. Create a realistic budget that includes your holiday spending, but don’t let it snowball into a financial avalanche. By tracking your expenses, you’ll avoid the post-holiday blues when the credit card bills start singing a less festive tune.

This season, let your budget be your guiding star, ensuring a harmonious and stress-free celebration.

Day 4: Hark! The Herald of Emergency Fund Angels

🎵 “On the fourth day of Christmas, my Wealth Advisor said to me: Hark! The herald of emergency fund angels!” 🎵

Life is full of surprises, and having a robust emergency fund is like having a team of financial angels ready to help when unexpected expenses arrive. Whether it’s a car repair or a sudden medical bill, your emergency fund can be a guardian angel, ensuring your financial stability in times of need.

This holiday season, let your emergency fund be your silent protector, allowing you to enjoy the festivities without worrying about unforeseen financial hiccups.

Day 5: Five Golden Retirement Rings

🎵 “On the fifth day of Christmas, my Wealth Advisor said to me: Five golden retirement rings!” 🎵

Retirement may seem like a distant future, but like the five golden rings in the classic song, it’s a valuable gift that requires careful planning. Help your retirement plans shine brightly by regularly contributing to your retirement accounts. The magic of compounding (Day 2, remember?) can work wonders over the long term, making your golden years truly golden.

This holiday season, make a resolution to invest in your retirement future and enjoy the sparkle of those golden rings in the years to come.

Day 6: Let Tax-Efficient Reindeer Lead the Sleigh

🎵 “On the sixth day of Christmas, my Wealth Advisor said to me: Let tax-efficient reindeer lead the sleigh!” 🎵

Just as Santa relies on his trusty reindeer to navigate the skies, you can rely on tax-efficient strategies to guide your financial sleigh. Take advantage of tax-deferred accounts, tax-free investments, and strategic tax planning to reduce your tax burden. It’s like leaving milk and cookies for the IRS – they get less, and you keep more.

This holiday season, let your financial sleigh be led by tax-efficient reindeer, ensuring a smooth ride toward your financial goals.

Day 7: The Magic of Giving – Charitable Contributions

🎵 “On the seventh day of Christmas, my Wealth Advisor said to me: The magic of giving – charitable contributions!” 🎵

This holiday season, let the spirit of giving extend beyond wrapped presents. Consider incorporating charitable contributions into your financial plan. Just as the warmth of a cozy fire spreads throughout the room, your generosity can create a positive ripple effect in your community and beyond.

Whether it’s supporting a local charity, contributing to a cause close to your heart, or volunteering your time, the act of giving not only makes a difference in the lives of others but also adds a meaningful dimension to your financial journey.

This holiday season, let the magic of giving be a guiding light, illuminating the path to a more compassionate and fulfilling financial future.

Day 8: Making a List, Checking It Twice – Financial Goals, That Is!

🎵 “On the eighth day of Christmas, my Wealth Advisor said to me: Making a list, checking it twice – financial goals, that is!” 🎵

Santa isn’t the only one who needs a list. Outline your financial goals clearly and revisit them regularly. Whether it’s saving for a dream vacation, a home, or your children’s education, having a well-defined list keeps you on track. Checking it twice? That’s reviewing and adjusting your goals as life evolves.

This holiday season, take a cue from Santa and keep your financial list in order – it’s a key to turning your dreams into reality.

Day 9: Wise Men (and Women) Seek Professional Advice

🎵 “On the ninth day of Christmas, my Wealth Advisor said to me: Wise men (and women) seek professional advice!” 🎵

Even the three wise men sought guidance when following the star. Similarly, seeking advice from financial professionals can provide you with the direction needed for a successful financial journey. Whether it’s investment strategies, tax planning, or retirement advice, a wealth advisor can be your guiding star.

This holiday season, be wise and seek the expertise of financial professionals to navigate the complex constellations of the financial world.

Day 10: The Gift of Education Keeps on Giving

🎵 “On the tenth day of Christmas, my Wealth Advisor said to me: The gift of education keeps on giving!” 🎵

Investing in education is a gift that lasts a lifetime. Whether for yourself, your children, or future generations, education is a powerful tool for personal and financial growth. Like the knowledge passed down through generations, the gift of education can open doors and create lasting legacies.

This holiday season, consider the gift of education as an investment in a brighter and more informed future.

Day 11: A Partridge in a Pear Tree – Invest in Your Home Nest

🎵 “On the eleventh day of Christmas, my Wealth Advisor said to me: A partridge in a pear tree – invest in your home nest!” 🎵

Just as the partridge nests in a pear tree for security, your home is your nest egg. Invest in your property wisely, keeping it well-maintained and considering home improvements that can enhance its value. Your home is not only a place of comfort but also a significant part of your financial portfolio.

This holiday season, let your home be a cozy and well-nurtured nest, providing both emotional and financial security.

Day 12: Drumroll, Please – The Beat of Financial Independence!

🎵 “On the twelfth day of Christmas, my Wealth Advisor said to me: Drumroll, please – the beat of financial independence!” 🎵

As we wrap up our Twelve Days of Financial Wisdom, let’s revel in the grand finale – financial independence. Just as the drumroll builds anticipation, the path to financial independence requires steady and disciplined beats. By saving diligently, making thoughtful investments, and planning for the future, you orchestrate the melody of financial success. Picture the day when you can confidently march to the rhythm of financial freedom, knowing your efforts have created a harmonious and secure future.

There you have it – “The Twelve Days of Financial Wisdom!” May the holiday season bring not only cheer and laughter, but also a renewed focus on your financial well-being.

As we close the chapter on this financial carol and wave goodbye to the year that’s making its exit, let’s hold on tight to the everlasting beat of relationship wisdom in our lives. Think of it like the cozy soundtrack of laughter we share with our favorite people, the easy flow of understanding that feels like a familiar tune, and the big, exciting moments we hit together – they’re all part of the warm symphony of our collective journey. Just like a family dinner where everyone’s got a seat at the table (that you hopefully didn’t prepare in your Master Bathroom), our connections make the kind of music that gives life its colorful rhythm. So, here’s to the echoes of good times, the easy chats, and the solid support that keep our shared story sounding just right.

Wishing you and your loved ones a wonderful holiday season filled with warmth, joy, and a financially sound future. Cheers to a prosperous New Year ahead!

To learn more about CapSouth Wealth Management, visit https://capsouthwm.com/what-we-do/

Article by: Jennifer Fensley, CFP®️,CRPS®️

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature, and is not intended as specific advice. This article was produced with the assistance of ChatGPT (Version 3.5) in December 2023; Chat GPT is an artificial intelligence model owned by OpenAI. CapSouth is not affiliated with OpenAI.

Home Improvement – The Good and The Bad

The National Council on Aging recently shared a story about a scammer who targeted a homeowner in Massachusetts.

The victim alleged that a contractor damaged his home’s foundation and didn’t return to finish the work—even after taking thousands of dollars in payments.

Since 2007, around 109,000 home improvement scams have been reported to the Federal Trade Commission (FTC), resulting in about $207 million in losses in roughly the same period.

But that may just be the tip of the iceberg, since many victims of scams do not report the crime.

Sadly, scammers often seek out older homeowners, who they expect to be more trusting, wealthier, and more likely to have memory or cognitive problems.

The value of home improvement

Of course, there are many legitimate home improvement companies out there. Many businesses suffered during the pandemic lockdowns, but homeowners funneled an estimated $420 billion into remodeling projects in 2020 alone, according to Money, as lockdowns and social distancing curtailed outside entertainment.

Making improvements to your home not only enhances your enjoyment but can also increase the return on investment (ROI) if and when it is time to sell.

The projects you decide to tackle may be influenced by the ROI, your personal choices, or a combination of these and other things. For many of us, our home is the largest purchase we will make. You may want to consider ways to increase its value.

According to the National Association of Realtors 2022 Remodeling Impact Report, hardwood floor refinishing and new wood flooring provide the top return, 147% cost recovery and 118%, respectively.

Insulation upgrades offered 100% cost recovery.

Bathroom renovation and kitchen upgrades don’t top the list in terms of investment, but do improve your own enjoyment of your home. They provided 67% and 63% return on cost, respectively.

Of course, these are simply averages. Location plays a big role in the value of your upgrades. And it goes without saying that a very expensive renovation in a modestly priced house will lead to a diminished ROI.

If you are planning to sell your home, an experienced real estate agent can help you find the sweet spot between outlays and returns. Don’t think your home has to be perfect to list it; we are typically our own worst critics!

The dark side of home improvement

Home remodeling isn’t as simple as walking into Walmart or Home Depot and making a purchase. There is a high level of comfort that a major retailer will provide a good product and stand behind its warranty.

Home improvement companies, however, are everywhere and exist at every level of quality. Some are trustworthy, and their work stands out. Others are looking to make a fast buck. Quality of work isn’t a high consideration.

Then there are actual scammers who make empty promises and leave you, your finances, and your home worse off than when you started. They have one goal—take your money and leave you with little value.

Trust but verify

How can you tell if a contractor might not be reputable? According to the FTC, these behaviors are red flags:

  • Scammers knock on doors, claiming to be “in the area” looking for business.
  • Scammers claim they have materials left over from a previous job, which will save you money.
  • They pressure you into an immediate decision.
  • They ask you to pay for everything upfront and/or only accept cash.
  • They ask you to get the required building permits.
  • Scammers suggest you borrow money from a lender they know.
  • They won’t sign a contract, but insist on a handshake deal.

These seem almost obvious, but con artists don’t become con artists without learning the art of persuasion. They put you at ease. They evoke trust and your guard comes down.

Here is how it might work: A friendly home improvement tradesman might knock on your door and tell you they have noticed a problem with your house. They offer to inspect the issue at no cost and then provide a quote that seems reasonable because they just happen to have an oversupply of materials from a prior job, so they can give you a deal.

When you agree to their proposal, they insist on a large deposit or 100% payment upfront. Or they might request a payment method that isn’t common, such as an online money transfer or prepaid debit card.

Once your cash is in their hands, they disappear.

Step back for a moment and review this scenario. Somebody you don’t know knocks on your door and demands a big cash payment for work they haven’t yet performed. They would have to be pretty charming because that’s a huge red flag.

Homeowners are often targeted by scammers posing as contractors after a natural disaster, promising low-cost repairs and pressuring them to act quickly. But again, after taking the deposit, the service provider may disappear, or the work may be poorly executed or left incomplete.

Anyone can be susceptible to these scams. Following Hurricane Katrina, I served on a mission trip in New Orleans, hanging drywall in the very nice home of a real estate agent who thought he had done the right things…he had insurance, filed a claim, received the proceeds, hired a contractor, paid the contractor…and then the contractor disappeared. The stress of the crisis and perceived imminent need caused him to let his guard down regarding a questionable contractor.

Another scenario is when a project snowballs. After a contractor starts your project, they may try to persuade you that there are additional, costlier problems that require your immediate attention. If you refuse to authorize additional work, they may threaten to abandon the project, leaving it unfinished.

Another move is to intentionally perform low-quality work to ensure repeat business.

Be alert. If something doesn’t feel right, you are under no obligation to move forward.

How to avoid scammers

Here are some ways you can greatly reduce your odds of being victimized.

  • Consider only contractors who are licensed and insured.
  • Get recommendations from family and friends.
  • Check with the local Home Builders Association and consumer protection officials to see if they have complaints against a contractor.
  • Research a business online and read reviews but keep in mind that they may not be perfect. Instead, focus on the center of gravity, i.e., the bulk of reviews, and how complaints are handled.
  • Get written estimates and read the contract carefully.
  • Don’t pay the full amount up front. A downpayment will likely be required, but avoid those who want full payment upfront.

Loan scams

Remodeling projects are often financed by cash in the bank or a home equity loan.

Be careful about your financing:

  • Never agree to financing through your contractor without shopping around and comparing loan terms.
  • Never agree to any loan without understanding the terms of the loan.
  • Don’t sign a document that you haven’t read or one that contains blank spaces.
  • Don’t let anyone pressure you into signing an agreement.

Once again, let me remind you to be alert. If something doesn’t feel right, you are under no obligation to move forward.

If you have been the unfortunate victim of a scam, report the crime to your state attorney general’s office, the state’s consumer protection office, the BBB, your local media’s call for action lines, and the National Association of Homebuilders.

Many home improvement companies pride themselves on their workmanship. You can greatly reduce the likelihood of falling prey to a scam by taking some simple precautions and learning about the reputation of the company you are hiring.

Remember your advisor

We are here to help. Your advisor is not just here for periodic check-in meetings on your investments and long-range plan. We are here to do life with you and be partners with you in big decisions. Considering a home remodel? Considering selling or buying a home? Reach out to us and allow us to provide any guidance we might have on the process and how it fits into your overall picture.

As always, it’s a privilege to know that you have chosen us as your financial advisor. Thank you for the trust you have placed in us. To learn more about CapSouth Wealth Management and our services, visit https://capsouthwm.com/what-we-do/

Article by: SCOTT MCDOWALL, CFP®

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. This material is from an unaffiliated, third-party and is used by permission. Any opinions expressed in the material are those of the author and/or contributors to the material; they are not necessarily the opinions of CapSouth. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. CapSouth does not offer tax, accounting or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature and is not intended as specific advice. This material contains external links to third party content (content hosted on sites unaffiliated with CapSouth). CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from this material. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to a third party entity.

Time is Everything

Given my profession, I’ve often wondered,” What are the most commonly used words or phrases in finance?”  What would you think?  Money, the stock market, Interest rates, rate of return, buy, sell, gains, losses? And depending on the day, some may not be suitable for mixed company, am I right? I don’t have an answer, really, and your guess is as good as mine. I would imagine time would have been one of those “also receiving votes” in the poll above, don’t you think?  The time value of money, for example. Or when’s the best time to buy or sell. The most popular use of that word, for me anyway, is when discussing timing the market vs. time in the market. It comes up quite frequently. So much so, I’ve recorded videos on the subject which have been shared with hundreds of investors. It’s that important. But this weekend, I witnessed two defining moments where time expanded the lives of some and tragically departed from others.

On a perfect Saturday afternoon in September, my wife and I traveled to a small, remote town in northwest Georgia to witness the wedding of one our best friend’s daughters. We’ll call this young bride, “Kaitlyn.”  And we’ll call her that because that’s her name.  She’s a brilliant, accomplished, and beautiful young lady who recently graduated from Auburn with honors – in three years – and all while working a full-time job. (I know, sickening.) And she’s marrying one of those “too-good-to-be-true” type of guys. His name is Garrett, of course. You know him, one of those handsome, chivalrous, strong, scraggily bearded leader-types who doesn’t need a set of pronouns to show he’s a man. (They still exist, folks.) Back to our friend. He adopted Kaitlyn many years ago and is as wonderful a father as the day is long. He’s also one of those too-good-to-be-true types – just with a little less hair and a little more weight. As the sun was setting across the hills of north Georgia, the tribute he offered to his daughter was one of those only a father of girls could deliver. A sweet glimpse of their relationship over the many years as father and daughter. He filled a paternal void in Kaitlyn’s life and became her protector, provider, care giver, and just what God knew she needed – a dad. A few memorable phrases used in his speech that evening:  There was the time, Do you remember that time, and I look forward to the time…

Fast forward 19 hours…

She was a beautiful, vibrant, young lady. A beloved daughter, sister, and cherished friend to many in the community. She was only 16 and tragically killed in an automobile accident earlier that week. And with no warning, she was gone. We attended her visitation on Sunday afternoon along with what must have been thousands of friends, family and acquaintances wanting to pay their respects. They waited for hours to love on her family and perhaps share stories of how she lived and loved so mightily.  The funeral home was adorned with hundreds of pictures of this sweet young girl surrounded by friends, families, and even one of her and her approaching homecoming date.  As we moved through the procession, I couldn’t help but think back to my friend’s speech just 19 hours earlier – There was the time, Do you remember that time, I look forward to the time.  And I imagined what questions were running through her dad’s mind at this moment. It was heartbreaking. If our world shares a common belief, it’s that parents shouldn’t have to bury their children. Children shouldn’t have to mourn their friends. And a sweet young lady shouldn’t have to lose her life. But as we’re all painfully aware, life doesn’t always work out that way. All of us will experience loss. It’s inevitable. And it’s a matter of time.

Forty-eight hours ago, this article was to have covered a vastly different topic.  But forty-eight hours ago, I hadn’t experienced a wedding and a wake. I am ill-equipped to even begin to capture the raw emotion of saying good-bye to a daughter until such time the Lord sees fit for a reunion. Each day, we witnessed two stories on this notion of time. Time spent, time hopefully to be shared again soon, and time to long for yet never get back. I’m apologetically incapable of expressing the weight that the word time carries for many families this evening. My prayer for all of us is that we’re blessed to make the most of what we have of it.

And God willing, maybe I’ll be able to write about that another time.

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm.

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