Is This You?

Sudden wealth.

There is a variety of reasons this may have happened: an inheritance, company stock has done well, or maybe you recently got divorced and now have more money to manage. This new wealth can be both exciting and scary. We have seen the good and the bad of these events.

• What does this new money mean? Can I quit work, buy a new car, buy a new house, etc.?
• How do you manage it? Do I buy rental properties, invest with a venture capital firm, etc.?
• How do I feel about it? Lucky, scared, unsure, etc.

All of these questions above are typical.  If there is one word that sums up what a client needs in this situation it would be perspective. To get this, we suggest these 3 steps:

1. Don’t do anything different with your spending. If the money is in a checking or savings account, move it out where it can not be accessed on a daily basis.
2. Find an independent Fee-Only™ advisor that has experience in this space.
3. Get a clear financial plan in place. Know what this money can and can’t do for you, e.g. it can help you retire earlier, but it can’t let you quit today.

There are two main pitfalls that we see often in this space.

1. Individuals/couples start spending without a plan, and slowly spend money until little is left.
2. Throw money into risky investments with the hopes of “turning the money” into more money.

If this is you, we highly suggest sitting down with a seasoned Fee-Only™ planner and build a plan. Whether it is us or someone else, this plan will help you have more control and better insight into how to handle and manage this new wealth.

Financial Anxiety/Stress.

Whether it is anxiety, stress, tough decisions, or nervousness — your feelings are quite normal. Did you know that 25% of people say they have moderate to severe anxiety just to come see an advisor? They state a number of reasons:

• Telling a stranger about their finances.
• They are embarrassed with what they don’t know.
• They feel they should be further along.
• They have fear around money (i.e. they aren’t saving enough, they spend too much, etc.).
• They have some anxiety over the market and aren’t sure if their current portfolio is allocated properly.

The first step is framing stress itself. Kelly McGonigal who wrote The Upside of Stress, found stress to not necessarily be bad. On the contrary, it can be the starting point to a happier life and more success. To control stress and turn it into something positive there is a four-step process one can go through: (1) acknowledge its existence, (2) take steps to identify what the stress is AND what portion THEY have control over, (3) come up with several options/solutions, and (4) act on the options.

That sounds simple right? Often people get hung up on “what portion they have control over.” The most successful and happy people in this world always are looking at this — what they have control over. They acknowledge this, take steps to adjust to their mistakes and then stop worrying about what they can’t control. This process allows you to have control over more aspects of your life and thus reduce your anxiety. We can either let stress be the guide to solving problems or allow it to be the anchor that keeps us from a happy and fulfilled life.

A lot to juggle.

Life is busy! Add finances and all its different components into it and it just gets more complicated. To be candid, this is one of the reasons we love what we do! For over 20 years we have been taking the chaos of one’s life and helping them put order into it.

When we organize a client’s financial life, new solutions to both financial and personal questions emerge. Imagine clearly showing a client a solution to retirement they hadn’t seen! It is like seeing only in black and white, then someone gives you glasses to see in color. Or driving your car in the fog or a heavy snow storm and then the sky suddenly opens, the sun comes out, and you can see everything clearly!

We love the relief clients feel when they realize they don’t have to spin the financial plate any longer… we can do much of it for them.

What is on your plate? Managing your portfolio, figuring out how to pay for kids’ college, planning for retirement, paying off bills, knowing when to buy a new car, how much to spend on things like a house, furniture, etc. Creating this plan can be a lot of work for both individuals or couples, if they are doing it alone. Getting it right (optimized) is even tougher! 

Received Poor Advice.

There are four primary reasons people have bad experiences with financial advisors:

1. Communication from their advisor is poor. Emails aren’t returned promptly and phone calls are not returned. This lack of communication makes them feel like they are unimportant.
   1. This just doesn’t happen at Lynch Financial Advisors. Candidly, we don’t get why an advisor wouldn’t communicate with their clients. We look forward to talking with them!
2. They don’t trust that the advisor has their best interests first.
   1. For the most part, if you are selecting a Fee-Only™ advisor from NAPFA, you are safe. The vast majority of advisors I have met in this organization are VERY trustworthy and TRULY want to help their client(s).
3. The portfolio returns weren’t what they expected.
   1. This typically is due to one of two issues: 1. Poor communication from the advisor on how the strategy that he/she uses performs in different markets, 2. Client expects the advisor never to lose money and always wants to beat the market.
4. The advisor had no original ideas.
   1. The reason that wealth management/financial planning is so rewarding to us is the opportunity to “think” and to come up with new ideas as well as new ways of looking at new and old problems. Bring us your thoughts and your questions. We look forward to the opportunity to come up with more than one solution and to give you a clear guidance on which path has the highest probability of success.

We don’t want to pretend that we don’t make mistakes — everyone does. It is how you handle them that makes the difference.  We love the book Extreme Ownership by Jocko Willink and Leif Babin. We have embraced their rigorous process of constantly looking at client experiences to find any holes. We know that every “hole” we find, only makes our client experience better. We are intent on delivering the best client experience possible.

Had financial arguments.

Couples come to us seeking help getting on the same page. Couples’ reactions to their spouse is often driven from fear. If we can help elevate or at least put light onto those fears, it opens the couple back up to meaningful conversations. They find when they get closer, they get back to being able to share new dreams and thoughts without the other person acting negatively.

How do we help? We speak both partners’ languages: whether it is through a spreadsheet or emotions. Often, one partner tends to think 2, 5, even 10 years into the future. While the other partner is concerned with today: paying bills, this year’s vacation, etc. This split view of money leads many married couples into arguments. However, when you think about it, this can make for a great situation as you are each focusing on different areas.

If it is sounding like marriage therapy, well, many of our clients call us their therapist just as much as their advisor. Like therapists, we sit back and listen to our clients. The difference comes in our financial acumen. Where a therapist is MUCH more skilled in therapy, we are MUCH more skilled in financial guidance. Translator may be a more accurate term.

One client might be much more “feeling” motivated and another may be more “fiscally” motivated. It isn’t always that one person is wrong and the other is right. It the lenses with which each person looks through that gives them their opinion.  Knowing these lenses helps us to translate their view to the other person.

Did you know that couples in healthy marriages are 2x more likely to discuss money together? (2017 State of finances in the American household survey. Conducted by Ramsey Solutions) When you think about it, most couples start their relationship by talking about their “dreams”, aspirations, etc. So it makes sense that if couples are still able to discuss these dreams together, they have a better chance at being happy.