Tag: Wealth Management

Financial Stewardship is often described with words such as planning, management, attention and care. All good words. All right on point. The key, though, is how do you make it a topic worth spending your time on? Well, it’s all in how you package it. For example, I’ve really come to enjoy if/then statements. The perfect combination of hypothesis and conclusion. My family uses them on me all the time:

Son # 1: “If I get a full scholarship, then you have to buy me a new car.”

Son # 2: “If I make this shot, then I get to stay up later.”

Son # 3: “If you can’t guess what number I’m thinking of, then I get to keep your guitar.”

Son # 4: “If I eat twenty goldfish at one time, then you have to play basketball with me.”

Wife #1: “If you don’t put up these clothes, then I’m going to…” (You get the point.)

As you can see, conditional statements can cover a wide variety of subjects. That said, most of the above center around time and money – two things folks seem to always want more of.  And while I can’t provide you with more time, I can offer a few suggestions on the financial side. (See what I did there? Now you’re interested in financial stewardship.) So, here’s a quick list of financial if/then statements you may find valuable:

1. If you don’t contribute to your 401K, then you might be missing out on the employer match.

Some employers will put a matching contribution into your 401(k) if you’ll just – contribute. That’s called free money, by the way. Technically, it’s called an employer match, and if you want as much of that free money as your employer is willing to give, then max the match.  For example, if they match 50% of your contribution up to 6%, then consider putting in 6%.  Disclaimer: Don’t stop paying your bills or putting food on the table in order to put money in your 401(k), but do consider taking advantage of this employee benefit if offered. The employer match is often a discretionary match, meaning, it’s up to the employer’s discretion to offer it or not. So, if you’re eligible for an employer match, look into it. You’ve heard the expression, “There’s no such thing as a free lunch?” Well, this is pretty close.

2. If you want to know where your heart is, then check your credit card or bank statements.

Warning: If you look, then you will surely find. Every dollar you make is going somewhere, right? Take ownership of that. You have the authority, if not the responsibility, to account for every dollar that comes in. Let’s be honest, not every purchase is accounted for or was part of your financial plan, now is it? It’s likely, as you have at least a passing interest in financial stewardship, that you have a good accounting of where your money is going. But life happens, and thanks to the marvel of auto-pay for example, you may have unwittingly fallen victim to subscriptions to music and video services, magazines, jelly of the month clubs, etc., that you weren’t even aware of…but that your kids were. (This may or may not have happened to me.)  And each and every month, they’re helping themselves to your dollars (the auto-pay…and your kids, too, possibly). And be aware, fraud is a big business. As in billions with a “b” in 2020. One report suggests that over $117M of that originated from social media scams alone. There are different rules with debit and credit cards as to how much of a fraudulent charge you may be responsible for, so check those statements for charges that may not be yours. Time is important here. Review often and report right away.

3. If you don’t model financial stewardship for your kids, then who will?

Please discuss financial stewardship with your kids. If you don’t model it for them, then culture will. The same culture that brings us such family friendly hits as Miley Cyrus, Howard Stern and The Bachelor. As part of our client experience, we engage in an Honest Conversations® exercise that highlights what clients value most out of life and serves as the foundation for their financial plan. More often than not, how financial stewardship was modeled for them when they were young is the impetus for how they model financial stewardship for their kids. It was either discussed as a family concern, or it was never discussed and deemed none of the kids’ business. I would encourage you to model financial stewardship for those you have influence with and bring them into the conversation (as age appropriate) thereby establishing a healthy appreciation for money and a head start on financial stewardship.

4. If you’re working and NOT saving for retirement, then what’s wrong with you?

I’ll spare you the grim statistics on the percentage of Americans who are nearing retirement and aren’t prepared for it. On second thought, let’s talk about it. In a 2019 GOBankingRates survey¹ of 2000 respondents, 64% reported they will likely retire – broke. Here’s an even harder to believe statistic, 48% didn’t care. What? Here’s the deal. Your retirement is not your government’s responsibility, nor is it your employer’s.  It’s yours. So make a plan. Age is not an excuse, by the way. You’re never too young to be introduced to the value of planning and preparation. As a matter of fact, the younger the better!  Insurance is typically less expensive, your investment time horizon is likely longer, and your margin for course correction is typically much greater. Seek wise counsel. If you were only able to remember a single thing written in this article, then remember those three words:  Seek. Wise. Counsel.

5. If you think Social Security is going to take care of your living expenses during retirement, then you’re wrong.

Read most any recent article on Social Security and you’ll discover the uncomfortable truth. If changes aren’t on the horizon, then Social Security won’t be either. Reserves are projected to last until 2037, or so, unless significant changes are made. Still, Social Security is certainly worthy of your consideration, and we can assist with a strategy tailored to your plan. It’s a part of your retirement strategy, but it shouldn’t be your retirement strategy.

6. If you’re investing in the stock market and aren’t adhering to a financial plan, then you may be taking more (or less) risk than you need to.

We believe a well-designed financial plan is a vital component in reaching the financial goals you have for you and your family, and your investment strategy should support the goals within your plan. Your investment strategy is a tool – it’s not the plan itself. Once we determine how our clients want to live their one best financial life, we devise a plan, with a corresponding investment strategy to help them get there. And we prefer you not take any more risk than is necessary to accomplish your goals. So what happens if the amount of return that’s required to reach your goals is more than you’re comfortable with? That’s when priorities and tradeoffs are made. Rarely does financial stewardship or living one’s best financial life happen by accident. It requires action.

If you don’t know how much risk you should be taking to accomplish your goals and objectives, or maybe you’re not even sure where to start, then start with an Honest Conversation. We can have one.

7. And finally, if your son wants you to play basketball with him, then by all means – play.

They don’t stay 12 for very long, do they.   

If you would like to learn more about CapSouth Wealth Management please visit our website at www.CapSouthWM.com  if you would like to have a conversation to discuss this article further, I’d love to chat. 334.673.8600.  

by: Billy McCarthy, Wealth Advisor

¹64% of Americans Aren’t Prepared For Retirement | GOBankingRates

CapSouth Partners, Inc., dba CapSouth Wealth Management, is an independent registered Investment Advisory firm.  This material has been prepared for planning purposes only and is not intended as specific advice. 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.

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