Light Bulbs Reveal a “Better Idea”

In 1967 Ford unveiled a “see the light” marketing campaign for its new Mustang.  That campaign utilized a light bulb which was turned on to illuminate the room with the new Mustang model.  This symbolized how seeing something in a new light can result in an epiphany moment – the message: “Ford has a better idea”, a different approach.

With the start of another year, every investment company is eager to provide their “crystal ball” forecast.  Make no mistake, forecasts are helpful and the pages of this newsletter share our perspective about probable key themes for investors in 2021.  We believe these insights are thoughtful and backed by fundamentals; they influence how we are tactically positioning portfolios.  But the reality is that no one can say for sure what will develop in the months or year ahead or even more important how the markets might react in the short-run.  There are those who don’t know that they don’t know (are dangerous; attempt to jump in an out of the market on news and often miss significant portion of performance), and those who know they don’t know.  For those wise enough to know they don’t know, they focus most intensely on what they can control.

In stark contrast with the illusive working crystal ball, we all know that functional light bulbs exist.  Light bulbs brighten the picture; they bring the picture into clear view and eliminate darkness and uncertainty.  At Nvest, we believe we can provide a light bulb experience.  We call that light bulb LIVING LIFE, and believe our approach to financial planning is relatively unique; a “better idea” if you will.  Let us explain.

Anyone can find good tools online or utilize excel to project what savings today might grow to become in the future.  But it displays just a piece of the picture.  The other important insight to the picture is how you allocate or use your financial resources today.  We call our financial planning LIVING LIFE because we strongly believe that how most people live life today is very similar to how they will desire to live life in the future.  Most people do not change how they live today, or in retirement.  But their income changed.  While our process is not interested in the detail of where you spend money, the total cash flow or “income statement” picture is powerful information for long-range planning.

Our LIVING LIFE financial planning effort strives to help clients link their “balance sheet” (savings assets) with their “income statement” (spending) and present it in a format that is both comprehensive and easy to “see” how financial life will actually work down the road.  It shares how and when accounts and assets will be drawn upon.  The process answers, how much do I really need to retire and continue living life the way I am accustomed?  How will social security, retirement accounts, pensions, insurance and etc. fit together?  What will taxable income look like?  How can market volatility impact the success of my plan?  It also aids keeping perspective when markets behave in unexpected ways or turn stormy.

These questions and more are what the Nvest approach to financial planning directly reveals, and it is unique to/for each client.  Clients share that the insights and analysis are like a “light bulb” being turned on for the first time.

While most financial planners may use tools to look at a piece of the picture (balance sheet or income statement), few strive to marry the two together.  That’s unfortunate, because this clarity and “light” reveals how savings/assets (we refer to it as one’s “life effort compressed”) will provide for living life, which is what everyone seeks to understand.  This knowledge “delivers financial peace of mind” (our tag line).  If you need help with financial questions, or your plan needs updating, resolve to partner with us in this area during 2021.

Author: Steve Henderly, CFA | Nvest Wealth Strategies, Inc. – January 4, 2021
Posted in Personal Finance, Quarterly Newsletters.