Declaration of Financial Independence | Jordan Ranly, MBA

Happy Independence Day – a day synonymous with our nation’s freedom from foreign rule. Might this be an opportune moment to declare your financial independence? Similar to how our nation’s founders envisioned a future of opportunity to better control our own destiny, LIVING LIFE financial planning empowers one to shape long-term dreams.

Begin by envisioning your future. Where do you see yourself in 5, 10, or even 20 years? Perhaps it’s traveling the world, owning a second home, funding children’s (or grandchildren’s) education, retiring comfortably, or leaving a significant legacy for your loved ones or charitable causes. Our LIVING LIFE goals worksheet can help guide you and loved ones through this process. Visualizing these goals provides direction and motivation for your financial planning journey.

To effectively map your financial future, it’s crucial to set SMART goals:

• Specific: Define each goal clearly. Instead of “saving for retirement,” partner with Nvest to specify how much to save and by when.
• Measurable: Set criteria to track progress; an annual savings target and budget.
• Achievable: Ensure goals are realistic based on your current financial situation and resources. Divide larger goals into smaller, manageable steps to maintain momentum.
• Relevant: Align your goals with your values and priorities. Consider how achieving these goals might lead to overall well-being.
• Time-bound: Establish deadlines for achieving each goal. This adds urgency and helps one stay focused on taking consistent and disciplined actions.

For example, if your goal is to retire comfortably at age 65, LIVING LIFE financial planning is here to help.   We can calculate how much to save each month to reach your retirement savings target based on current assets, income, living expenses, and desired lifestyle.

A comprehensive financial plan that integrates savings, investments, and risk management strategies is imperative. Is it appropriate to maximize pre-tax contributions to retirement accounts like IRAs, 401(k)s, or 403(b)s to benefit from potential tax savings and employer contributions? Are you building flexibility into your plan via regular contributions to a Roth and/or personal brokerage account?  Are any other investment ideas (ie: rental property, private equity, etc.) worth considering and how does that impact diversification across asset classes to manage risk and optimize long-term growth potential?  Nvest is happy to study these questions.

We encourage clients to meet periodically with Nvest to review financial plans and consider adjustments as circumstances change. Life events such as marriage, children, career change, or economic shifts may necessitate modifications to your goals or strategies. Periodic reassessment ensures your plan remains relevant and adaptable to evolving needs.

Don’t forget to celebrate milestones along the way! Whether it’s paying off a significant debt, achieving a savings goal, or reaching a milestone in your investment portfolio, acknowledging progress reinforces your commitment to financial independence.  Enjoy that special restaurant you’ve been wanting to try or make plans to visit one of your “bucket list” locations.  This can serve as a great reminder that wealth is simply a tool toward realizing dreams.

By taking deliberate steps to set and pursue financial goals, you’re not only securing your financial future but also embodying the essence of independence by achieving personal freedom and financial peace of mind. This July 4th, commit to declaring your financial independence; where your dreams are within reach, your retirement is secure, and your legacy is preserved for generations to come.

The Next “Financial Eclipse” | Jordan Ranly, MBA

We hope your year is off to a nice start!  Our Nvest team is enjoying an exciting start to 2024, and we are feeling settled in the new office space at 9757 Fairway Drive.  Please schedule a time to visit!

Unexpected financial challenges can obscure from view well planned goals – a sort of “financial eclipse”.  Just as the moon veils the sun’s brilliance this month, we too will experience various “financial eclipse” events in our life.   An organized and holistic financial plan can illuminate the path forward even during challenging times.  LIVING LIFE  Financial Planning is here to help.Continue reading→

THE PITFALL OF FINANCIAL SPRAWL

Happy New Year from your team at Nvest!  As you turn the page to 2024, is this a good time to reflect on your financial big picture?  Is it appealing to make financial life simple?

Many clients in the Columbus area, as well as other urban areas, are well aware of urban sprawl.  It’s seems to be a growing concern and frustration.  Developing and sticking to a “grand plan” can be challenging for local politicians.  Despite good intentions, communities often deviate from the grand plan as differing views and priorities are brought forward.  These quickly distract from the big picture.Continue reading→

Engineers often utilize feedback loops when designing control systems.  A feedback loop is a control that integrates the system’s output back into an input stream to control future operations.  Here are some common examples of a feedback loop:

• Your home’s thermostat: As the temperature drops below a set target, the thermostat provides input to the furnace to activate and warm your home.  When the temperature climbs above the desired setpoint, the thermostat signals your furnace to turn off.
• A microphone sends an input signal into an amplifier/speaker and the speaker generates sound. If the microphone is held too close to the speaker, it captures the sound from the speaker and creates an unintended “circular” loop; this generates an unpleasant “squeal” we are all familiar with.
• The NFL draft: Every year, teams with the worst record are provided the earlier opportunities to select the best players coming out of college. As these teams “rebuild” with more talented players, they should eventually improve their win-loss record and move down in the draft (in theory).

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Inflation Begins to Ebb Lower – Impact to Savers

In recent articles titled iPod, iPhone, iPad… now the I Bond and The Upside to Rate Hikes, we highlighted the positive impact of the Fed’s ongoing battle with inflation.  Mainly, savers are once again being rewarded with “reasonable” rates.  I-Bonds were rewarding savers with rates approaching 10% just a few short months ago!Continue reading→

As shared throughout 2022, the Fed’s battle with inflation is the dominant force driving challenges in both the stock and bond markets.  In addition to a challenging market, borrowers are feeling pain in the form of higher rates on mortgages, credit cards, auto loans, etc.  These are the painful realities of reversing the Fed’s previous interest rate (ie. free money) and quantitative easing (QE) policies.

There is an attractive positive to higher interest rates however.  For savers, cash is finally returning a “reasonable” rate… if you know where to look! Continue reading→

Perhaps the most unsettling aspect about 2022 is not the degree to which the stock market is experiencing pain (not that unusual), but it’s the “double whammy” of also seeing meaningful depreciation in traditional safe fixed income. A recent headline, “The worst year in US history for the 60/40 portfolio”, underscores there being no place to hide in this bear market. During these challenging days, we continue to encourage maintaining a longer-term perspective. One way to do that is recalling “buckets of time” investing. Our well-seasoned clients may recall our “buckets of time” framework to unemotionally establish the investment objective (asset mix) for each account. This process helps align a client’s time horizon and purpose to investing the account.Continue reading→

Similar to the steady stream of successful products developed by Apple, it seems the US government hit a homerun with the “I Bond”.  Although this US government savings instrument is not a new product, popularity is spiking (along with inflation) in 2022.  Through mid-June the government sold $14.4 billion of I Bonds, which is 40x more than was sold in all of 2020!  We are receiving a number of questions about “I Bonds”.  As interest rates and inflation increase in 2022, the headline attractiveness of this product is enhanced.

So what is a “Series I Savings Bond”?  What should investors know about this product?

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If you are fortunate enough to have a company sponsored 401K plan, you will likely see some new (and potentially confusing) illustrations on your statements in the coming months.  The changes are related to the 2019 Secure Act passed by congress.  The mandate requires 401k administrators to provide an estimate of “guaranteed lifetime income” assuming your current 401K was completely “annuitized”.

What does it mean to “annuitize” your current 401k balance?  Continue reading→