Check the background of investment professionals associated with this site on FINRA’s BrokerCheck.

Tuesday, May 1, 2018

The Three Wealth Building Assets

As advisors, we have the opportunity to meet people of all walks of life at different points in their journey to prosperity. One of the biggest misconceptions is that “Wealth” is a number on the balance sheet. But what if this net worth was really the output of other, less obvious resources?
Financial wealth does come from somewhere. It comes from the value we provide to the world (our Human Assets), to whom we provide that value (Social Assets), and by making good financial decisions along the way (Capital Assets).  Let’s shed some additional light on these different resources.

Human Assets

We will start with Human Assets.  Be forewarned, they are by far the most “touchy-feely.”  Human Assets include all of our knowledge, skills, and abilities – all the value that we have to offer as individual human beings. Human Assets cannot be taken away, nor given. They belong solely to the individual.
Athletes exemplify Human Assets. Although there are many other factors that impact the career of a track sprinter, at the end of the day the race is won or lost on the skill, ability and determination of the individual.
The development and deployment of Human Assets requires self-awareness and self-discipline. Knowing our past, understanding our strengths and weaknesses, and being able to communicate our values, are key elements in growth.
Why bother? Human Assets are often what determine the trajectory we take personally and professionally. Without self-awareness, building strong relationships (Social Assets) is more difficult. Knowing our strengths, weaknesses and passions help us bring our authentic selves to each of our relationships.
Growing our Human Assets helps us find friends and advocates that share our values. It helps us guide our efforts towards our professional sweet spots where our strengths overlap our motivations.

Social Assets

Social Assets are where we find both opportunities and significance. These are the quality and the quantity of the meaningful relationships we acquire and maintain over the course of our lives. Relationships, by definition, cannot belong to just one individual; they are shared. They ebb and flow.
The career success of politicians (for better or for worse) hinges on their Social Assets. No one can “achieve” elected office without the support of the electorate.
There are two environments where Social Assets are acquired and then deepened.
The Inner Circle. The key feature of the Inner Circle is providing wisdom and support. These are relationships where we can be vulnerable, share our doubts, misgivings, frustrations, and fears. These are the people we give permission to challenge us, hold us accountable, and to open our eyes to blind spots.
The Network. Our Network is the sum of all the various relationships we’ve made over the course of our lives. They are the people that know us, or know of us. Success comes from engaging both our strong ties for their support, and also exploring our weaker ties for new opportunities.
Social Assets are our access to wisdom, judgement, experience, and support outside ourselves. These relationships provide the deepest sources of significance and opportunity in our lives.

Capital Assets

Capital Assets are the traditional measure of “wealth”. These are the various things that we own or possess. They can be businesses, currency, contracts, commodities, and the list goes on. At a very basic level, these are external resources that we can control. For the purpose of our conversation, we will stick to financial assets that can be measured in dollars and cents.
At the risk of being redundant, venture capitalists are an example of exaggerated Capital Assets. These individuals use their wealth to purchase and own other companies. The professional success of a venture capitalist depends on the performance of the capital deployed.
There are too many topics in this category to give full attention to, so we will limit our discussion to the two primary concepts in broadening your Capital Assets: Creation and Utilization.
Creation is the value that you bring the world. It is the translation of your Human Assets (your labor) into Capital Assets. To responsibly develop Capital Assets with integrity, creation of value must be the motivation, opposed to consumption. We will spend time covering how we measure the overall creation of value by using a personal income statement.
Utilization describes how we employ the Capital Assets that we have generated over time. Where accumulation is backward-looking and involves trying to do well, by projecting the past into the future, Utilization is forward looking, anticipating opportunities to create additional value. We keep track of how our Capital Assets are being utilized by the personal balance sheet. 
Capital Assets are the easiest assets to quantify, but also the easiest to lose track of their meaning. Capital Assets are generated by the creation of value, and maintained through Utilization.

Two Cautions

Human, Social, and Capital Assets are resources, and only resources. They are means to cross the river between where we are, and where we want to be.
My first caution to you is never to mistake the means for ends. Human Assets are not ends, nor are Social Assets. And as much as the world would have you believe otherwise, neither are Capital Assets. When we lose sight of our values, our principles, or our faith, we start chasing the wrong things.
The second caution is that the outcomes of developing assets take on the character of the individual. The benefit or loss to society depends on who is using their resources and to what end.
My sincerest wish is to create a means of helping many people make the world a brighter place.


Geoffrey Sadek, CFP®

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Tuesday, March 20, 2018

Is It Luck?


    In light of the recent celebration of Saint Patrick’s Day, it seems all too fitting to acknowledge the ever-recognized term of “luck.” When it comes to prosperity or even hardship it seems this idea of good fortune, as a result of chance, is often credited for our circumstances.

    Looking at finances specifically (because that’s the industry we’re in), it’s not too often we can count on finding that one pot of gold. Financial success is work. It involves planning, lifestyle adjustments, goal-setting, self-control, and likely the help of a professional. Whether “luck” has anything to do with it, I suppose it depends who you ask. What I do know is, those who most of us would consider ‘prosperous’ or of ‘good fortune,’ are those who have successfully adhered to plans that lead them to a prosperous future. In the same way, those who don’t plan or prepare for their lives ahead, will often face unanticipated hardship.

    It’s also very important to note that you don’t have to be wealthy to be prosperous. For some, this might mean a tweak in your definition. If you look at the origin of the word “prosperous,” you’ll learn that it means doing well, and that is a very vague definition that can have a lot of different meaning for all of us. One of the best stories I’ve heard was about a friend who traveled to an impoverished country and was completely shaken and empowered by the JOY and happiness of the people she met.

    From my perspective, “luck” has nothing to do with it. You either achieve prosperity with hard work and dedication, or for you, it’s a condition of your heart and mind. I suppose in that regard, some might say we’re all lucky.



Crystal Schneider, Client Relations Manager


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Thursday, February 1, 2018

Financial Goals for Real People

“I want to retire” is not a goal

Just as “leadership” has become a buzzword in corporate management, so too has the concept of “financial goal-setting” in finance. Seeing the way some firms market themselves, there is a lot of misinformation on what makes a good financial goal.

Simply saying, “I want to retire,” doesn’t meet the criteria of a good financial goal. Chances are, you can retire today if you so desire, but the income you would be forced to live on may not meet your minimum standard of living. How can we improve this goal? By adding information, we can specify our minimum requirements. “I want to retire in 10 years with a monthly income of $8,000 in today’s dollars.” This gives us a far better idea on when we’ve crossed the finish line.

Components of a good retirement goal

·         Specific – Identify the dollar amount you need as income
·         Measurable – you can gauge whether you’ve hit your goal by using dollars to measure
·         Attainable –your goal should reflect your time horizon and your risk tolerance
·         Relevant – your goal should carry personal weight to you
·         Time bound – you should have a deadline to measure your progress

Retirement isn’t the only worthy goal

Once they have set a retirement goal, many couple’s think they are finished goal setting, but retirement isn’t the only goal worthy of our efforts. Many people don’t realize that there are several financial goals worth setting. Below are some often forgotten goals:

·         Providing assistance for children or grandchildren to go to college or private school.
·         Leaving an inheritance for children.
·         Paying off debts (student loans, car loans, mortgages).
·         Generating passive income from investments.
·         Planning a large purchase (home, cottage, business).

There are as many other worthy financial goals as there are people who set them. The challenge is how to make consistent meaningful progress towards them. Your financial advisor should be your chief accountability partner in pursuing these objectives. If you would like to explore setting financial goals for yourself, or staying on target, we can help.

Geoffrey Sadek, CFP®

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

 

Wednesday, January 17, 2018

Writing It Down

"I want to lose some weight."  "I want to eat better."  "I want to take more time off."  "I want to get out of debt."  These are just a few of the many phrases I hear once the clock strikes midnight on January 1 each and every year.  And what’s wrong with these statements?  Well, absolutely nothing if a person wants to stay the same.  Because, despite the thought of desired improvement, these statements stay just that-thoughts-until they are put into action.

So how do we turn a thought into reality?  First, it starts by making specific goals. "I am going to go to the gym 4 days a week."  "I am going to eat 1800 calories or less a day."  "I am using all of my allotted vacation time this year."  "I am going to pay off my student loans in 2018."  These are specific goals that are more likely to be accomplished.  

Secondly, the goals need to be written down in a place that can be seen each and every day.  Writing down goals and stuffing them into a drawer to never be seen again will probably not help.  Write them on a note card and put them on your bathroom mirror, in your car, on your desk...what better way to hold yourself accountable than to have to read the exciting goals you wanted to achieve at the beginning of the year?

As you accomplish each goal put a little check mark by it.  You would be amazed by the happiness felt when you glance at your goal list and notice a few check marks.  I would hazard a guess that seeing a couple of check marks might just motivate you that much more to strive to complete another agenda item or two.  Notice a pattern here?

The same strategy can work when it comes to achieving financial goals.  "I want to retire at 60." "I want to have no debt other than my house." "I want to leave a legacy to my grand kids."  These goals don’t happen overnight.  It must start with paying off a specific debt or two this year, maxing out a Roth or 401k this year, and building on that momentum next year.  The best way to get on track financially is to meet with your financial advisor to comprise a financial plan. Then, meet with your advisor, at least annually, to make sure you’re on track and to hold yourself accountable.  Before you know it, you’ll be on your way toward achieving your goals!


Ryan P. Smith, ChFC®, CASL™, CFP®, AEP®


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.