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Category: Financial Lessons

Your Account is Open

April takes its name from the Latin word Aperire, meaning to open.  Naturally, my mind goes to the opening bell of the NFL draft at the end of the month, or maybe the opening of the tomb at the beginning of the month, or maybe in a moment of sensitivity (sensitive in a manly way of course), the opening of flowers and such.  Lest we forget, there are things that absolutely should not be opened – Pandora’s Box, for example. We certainly don’t need any more evils flying over the Earth now do we. Or maybe that can of worms often sitting on the tip of your tongue. Nope. I’ve opened that can more than a few times, sadly.   

While we’re on the subject, here’s a quick list of things that you might consider in this season of opening:

  1. 529 College Savings Account: A 529 account for your kids and or grandkids – Some offer some pretty nifty state tax deductions and a plethora of investment options. And when you withdraw the money for qualified educational purposes, you don’t pay taxes on the gains. Anyone can contribute to one on behalf of the beneficiary, and there are no age, income or residency limitations for the beneficiary. Beneficiary not going to college? No problem. You can change the beneficiary to another member of the family. For a more comprehensive review of such an account, check out:  https://www.collegecounts529.com/
  • Two-eth by Checking and Two-eth by Savings:  For checking, consider one checking account just for your bills and another just for spending money. For savings, maybe you have one account serving as an emergency fund and another for long-term savings goals.  The goal being to make your financial life easier to manage. Of the above, I strongly recommend an emergency fund. (It is what it is, and not everything is an emergency, now is it.)
  • Roth IRA Account:  Offers tax-free growth and tax-free qualified withdrawals in retirement.  Because none of us know what the tax code will look like in the future, Roth accounts offer some diversification in retirement as not all your retirement accounts would be tax deferred.  Speak with your financial advisor about your particular situation to see if the Roth IRA is a good option for you.
  • Health Savings Account (HSA):  Are you covered by a High Deductible Health Plan (HDHP)?  If so, you may want to investigate a Health Savings Account. An HSA allows you to make annual pre-tax contributions to pay for qualified medical expenses, and in some cases, it offers significant tax advantages.  
  • Investment Account: 401(k) opened and contributing to? Check. Roth IRA opened and contributing to? Check. Emergency Fund opened and maintained? Check. Consider a (non-retirement) investment account. This may be in the form of an individual or joint account that you contribute to, and it serves as your “do life out of “account. It’s funded with after-tax money, invested how you please and with no contribution limits. If there was a trinity of financial accounts, it may be the third. 1) The Tax Deferred Account. 2) The Roth Account. 3) The Taxable Account.  Speak with your advisor to see how this may fit into your financial plan.  

Your particular situation may or may not lend itself to one or more of the above. And for some, the above may just be scratching the surface. Speak with your advisor on how they may fit into your financial plan.

To learn more about CapSouth Wealth Management and the services we offer, visit our website at www.capsouthwm.com or www.capsouthwm.com/what-we-do/

Now, here’s a freebee for April readers. It’s very likely that you’re reading this article prior to Mother’s Day. That means – it’s still not too late!  Remember the can of worms reference from above? Avoid one altogether by remembering that Mother’s Day is May 14th .  Here’s a little something to get your juices flowing – and don’t say you weren’t warned!

Just How Does

It’s just after Mother’s Day

And all through the house,

The messes are so many

And I feel like a louse.

I had given my best shot

And used all of my might,

To keep the messes un-messed

And the fallen upright.

With dog hair in the hallway,

And my undies on the floor,

Reality sets in…

It’s Mother’s Day no more.

The kids run in from playing

While discarding shoes and socks,

With none of them landing in (or near)

The laundry basket box.

“This ain’t mommy’s job!” I bark,

“Come pick up all this mess!

Who did you think would get it?

Never mind. Let me guess…”

“Keep cleaning till you’re finished!

She’s on her way just now!

And when she passes through that door

She’d better be like, ‘Wow!’

Cause this year will be different!

And all the world will know,

That Mother’s Day in this one house

Is a twenty-four-hour show!”

So…

Dishes were cleaned and mostly put up.

That’s almost every plate and almost every cup.

Brooms were swishing and mops were swashing,

And most every elbow in the house was washing.

Many things needed doing.

A lot of straightening and even some gluing.

Then…

“The garage door just opened!

And soon she’ll be inside!

To witness what we’ve done!”

(As we all just beamed with pride.)

She passed right by the dog hair

– A little less now in the corner.

Over the damp and freshly mopped floor

 – Before we thought to warn her.

She scooted by the laundry,

And the sink which held no dishes,

And saw NOT the broken vase

As had been ALL our wishes.

She then plopped herself down

On the couch (once) covered with stuff,

And noticed not the pillow

And its lack of fluffy fluff.

She cared not about the mess

That once had covered the house,

Or the peanut butter stain

That was hiding on her blouse.

She cared only to be home

With the family she surely loves.

For whom she does so much for

Despite the mess and shoves.

She was gone but for an hour

And you’d think it was for days,

By all the attention that she got

In lots and many ways.

“But mommy did you notice?”

“And mommy did you see?”

“All the special things we did?

“All for you, all by me!”

And as they went on and on,

Telling tales of all their deeds,

I sat and wondered just how does

She attend to all our needs?

She is, after all, one person

Who’s the primary for all six,

Just how can she do it all

With such chaos in the mix?

She’s the mother of four boys

And the husband of this one.

She’s been given special gifts,

And we’re blessed by everyone.

So I left them to their gushing

For she’s deserving of every word.

And I wandered down the hall,

Twas their laughing that I heard.

No mention of the messes

That still lingered all around.

For with just the slightest glance 

One was certain to be found.

Every day should be for mom.

 A day for just – receiving.

A day where our love for her

 Is right there for – believing.

Show mom each and every day

That you don’t need a date,

To show how much you love her,

 And do appreciate

Everything she does for you

Things so big, things so small.

And show her that you love her

Everyday. One and all.

April, by the way, just happens to be National Poetry Month, as well.

CapSouth Partners, Inc, dba CapSouth Wealth Management, is an independent registered Investment Advisory firm. 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. Any performance data quoted represents past performance; past performance is no guarantee of future results. This article 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 article. 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 either entity.

Pigskins and Procrastinations

So, I have two sons who have flirted with college football. One, a quarterback, opted to forego several college football opportunities turning instead toward a career in medicine. Fine, whatever. Maybe I’d have better luck with number two? Sure enough, despite numerous run ins with the law – me – he managed to graduate near the top of his class and was presented with numerous opportunities to play football at the next level – only to delay the decision until the absolute last moment. For us parents, this was, as you might imagine…unpleasant…and ripe with anxiety, frustration, regret and maybe a few four-letter words from his mother. (Or maybe that was me. Heck, I don’t recall.)  And we’re just talking about football here! How might a belabored, or in some cases, a broken decision-making process affect your family when it comes to your finances?  And why is it so difficult at times to make financial decisions?

Large Financial Decisions are Ripe with Emotion:

Decisions involving money can take on a life of their own. For most of us, or unless you’re the Fed, there’s not an endless supply of money. We just can’t print more when we need more (the aforementioned once again excluded). Money is inextricably linked to provision, and provision is tied to those we care for most.  And therefore, large financial decisions can be ripe with emotion. As objective as we may believe we are, when we make large financial decisions, we invariably do so with emotions having a seat at the table. And understandably so, right? Emotions are involved because we recognize the weight of the decision and how it may impact those around us. Can we afford this home? Can I afford to remain in this career? Can we make it with one income? Will we have enough to live off during retirement?  Now, with those questions, you may have some control over the outcomes. But what about those you have zero control over? Are we about to enter a global recession? What happens if Europe and Asia become further unstable? Will inflation continue to rise?

All of these concerns have the potential to lead to emotionally based decisions.  And equally concerning, they can also lead to paralysis or making no decision at all. It’s a well-known question for a reason: Why do today, what you can put off until tomorrow? When you’re stressed and tensions are high, emotions go from having a seat at the decision-making table to holding the pen in their hand. And that doesn’t often end well.

In Light of the Above, Now What?  

Well, that’s the first step – acknowledging that emotion can play an important role in making financial decisions. Not that emotions are bad, mind you, they may just need to be tempered. You may need only to think back a day, a week, or five years ago when your emotions led to a decision, which then led to an outcome, which may have then led to regret. (If not, then you’ve not made many decisions up to this point, have you?)  Instead of rushing into a decision or putting it off altogether, let’s pause, take a step back, and insert a little objectivity. Can’t find it, you say?  Then allow me to offer the following:

  1. Are you able to recognize when your emotions are making the decisions? 
  2. What are the possible consequences of the decision that you’re contemplating currently?
  3. What emotion typically drives your decisions?  Fear? Happiness? Empathy?
  4. And if you have a spouse, do you have an agreed upon process with which to make large financial decisions?
  5. And finally, what is it that you value most out of life?

Here’s what I know about you, if I may be so bold.  If you’re willing to honestly address the five questions above, you’re on your way to living your one best financial life.  At the time this article was written, there’s quite a bit of uncertainty and volatility in the financial markets. And I’m going to presume that such times may create a little stress? If I’m speaking to you, as I’m speaking to myself, there’s little value in delaying a decision based on fear alone. Just as there’s little value in rushing into large financial decisions based on want alone.  If you’re in need of some objectivity within your financial decision-making process, that doesn’t make you unique, it makes you human. I happen to work with some pretty special humans who are quite gifted in helping with financial decisions.  You don’t have to go it alone. In CapSouth, you have a team to rely on. We can help.

So back to football. The second son did – finally – choose a school. In full disclosure, the emotional wear and tear was on that of his mother and me. He was dead set on what he wanted from a college experience, and he made a plan to get there. He contacted over 50 division1 football programs in search of a home, and he turned down nearly as many – some of which were financial no brainers. But that wasn’t his sole motivation. He was set on certain parameters and was willing to forgo others. He made a series of tradeoffs based on the realities of his recruiting process and chose – albeit 8 days before he was to report to camp – the opportunity that satisfied his ultimate goal – to be a part of a winning program and have an opportunity to play a role in the coming years. He didn’t do it alone, I must admit. He sought counsel from those he trusted and who could help him sort through the emotions that so often accompany large decisions.

If we can help you sort through your own emotionally charged decisions, please allow us. You don’t have to go it alone. We were made to live in community, and we’d be honored to serve our role in yours. You don’t have to go through it alone. We can help.

Happy fall and Go Eastern Kentucky Colonels!

To discuss this article further or to learn more about CapSouth Wealth Management, visit our website at www.capsouthwm.com or call 800.929.1001 to schedule an appointment to speak with an advisor.

by: Billy McCarthy, Wealth Manager

Investment advisory services are offered through CapSouth Partners, Inc, dba CapSouth Wealth Management, an independent registered Investment Advisory firm. 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.

Big Hat and No Cattle – 5 Financial Lessons from Cowboys

Those that know me, know that I love horses…I might have always been a bit obsessed with them.  Life in western times seems idyllic to me in many ways.  There were hard times, but there are financial lessons we can learn from the ponderosa.  Here are five financial lessons:

Don’t be afraid to fall

Few things in life are accomplished without taking some risk.  If we sit back and coast easy through life, we will miss those moments of thrill with achievement.  “Courage is being scared to death and saddling up anyway.” – John Wayne 

In investing, I believe this risk should be considered within the context of a solid financial plan.  I often refer to the terms “risk capacity” and “risk appetite”. 

Risk capacity refers to the range between the minimum amount of risk you must take to have a reasonable chance of meeting your goals and objectives, and the maximum amount of risk you should take to still have that reasonable likelihood of success.  Some clients would love to take all of their money and stuff it under their mattress, and others would love to take it all to the casino and bet on black; neither of those is likely a good option, nor is either of those likely to help them accomplish their goals.

Within that range of risk capacity falls a client’s risk appetite.  Once the financial plan has been established, it should be stress tested at varying risk levels to evaluate the risk/reward trade-off of varying allocations.  How much potential growth are we giving up if we maintain a lower equity allocation?  How much sleep are we going to lose if we go after that extra return?  There is a place on that spectrum for each individual, and it is part of the advisor’s job to help guide you to finding yours.

Get back on the horse

Unfortunately in life, things do not always go as we plan.  We set off in the morning with hopeful expectations of the ride ahead of us…the glow of the sunrise, the breeze in the air, the sounds of the birds.  However, as we gallop around the next corner of the trail, we (and our horse) might’ve forgotten about that rain shower from yesterday…and the resulting water puddle showing our reflection back to us.  Your noble steed balks…does he run through it, jump it, go around it?  As he fast approaches the puddle, he decides to jump around it in a quick maneuver fashion that you were not prepared for…and off you go into the mud.  Yes, I’m writing that one from experience.  My horse, Apache, actually loves water and would’ve done just fine.  However, that day I decided to ride a different horse with a bit more “spunk”.  I can say, though, that I did get back on.

In our financial lives, some endeavors will not play out in the manner we intended.  That business venture, that career position, or even that stock purchase – not every idea is a winner.  However, the important thing is to dust off your boots, learn from your mistakes, and go again…in maybe a more prudent fashion the next time.

Don’t squat with spurs on

Sometimes we can be our own worst enemy.  We know our vices and weaknesses, and yet we put ourselves in the same positions.  It could be as simple as going to the grocery store while hungry and ending up with loads of junk food and nothing of substance.  Or maybe we think we will just go test drive that new truck to see the new features, but not buy one.  Or maybe we have had a bad day, and it’s too easy to escape to the shopping mall or Amazon for some retail therapy.  In either case, we know better; we just get careless and set ourselves up for failure. 

A little self-discipline can go a long way.  Take time to know yourself and to create a budget and calendar to help set some guardrails.  You will be glad you did.

Big hat and no cattle

Ever seen that “cowboy” that is dressed to impressed…he has the Stetson hat, the pearl snap shirt, the boots, the Wranglers…he is styling.  But have you ever seen him even ride a horse?  Or is it all just show?

I would liken this to the family with the designer clothes, the newest of luxury cars, that new house on the corner…are they really doing well?  Or are their banks and credit card companies doing well off them and their debt?  Don’t be so quick to judge the book by its cover and be too easily impressed.  That neighbor down the street with the classic chevy may be debt free, have substantial savings for retirement, and fewer concerns.  Don’t get me wrong, I appreciate nice things.  We just need to make sure we aren’t sacrificing our long-term success for short-term luxuries.

Always drink upstream from the herd

Everyone seems to have ideas about everything.  Turn on any news channel, ask any friend, and they likely have at least a few suggestions for you on any given topic.  Change the topic, and all the sudden they go from an engineer to a chef to an investment expert to an estate planner.  And of course, they have all taken time to consider your values, your goals, your particular assets, and how they all fit into your financial plan, right? 

Seek wise, qualified, and appropriate guidance.  I wouldn’t want my financial advisor diagnosing my medical needs, and I wouldn’t look to my physician for financial lessons and direction on my investments. 

Most of us don’t wear spurs on a daily basis, or maybe ever.  However, these are timeless financial lessons that apply to everyone.  If these premises generate any thoughts for you about your personal situation and you would like to discuss further, please reach out to a CapSouth advisor.

By: Scott McDowall, CFP®/Wealth Advisor

To learn more about CapSouth Wealth Management, visit our website at www.capsouthwm.com or https://capsouthwm.com/what-we-do/financial-planning/ or call 800.929.1001 Click to Schedule a Discovery Call.

Investment advisory services are offered through CapSouth Partners, Inc, dba CapSouth Wealth Management, an independent registered Investment Advisory firm. 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.

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