The Best Strategy for Preserving Wealth

How did you learn to manage money and understand the value of investing? Did your parents relay to you what they knew about money or did you read books on budgeting and investing in figuring it out yourself? The reality is that many of us did learn through trial and error. An alarming statistic is that in the US only 14 states require a class in personal finance and 20 states require a class in economics to graduate from high school. If you aren’t teaching your family about money management and investing, they aren’t getting it. One of the ways families maintain wealth and pass it to future generations is through financial literacy. Financial education will preserve the wealth of the current generation and onward if you adopt it as part of your family’s legacy to educate versus becoming a statistic.

If you don’t consider yourself an expert in financial literacy, we would like to help take some pressure off of you. Understanding how money works and learning to resist the temptation of spending more than one earns should start at an early age . Even children at a young age understand their purse or wallet being empty and not being able to buy a treat when they go to the store. Not giving in when they have no money and purchasing it anyway doesn’t teach them anything. Even in a crowded store with your child throwing a temper tantrum, some lessons will last their entire life, if you take the time to teach them.

How do you start the conversation with children? By asking them what they think investing is, naming types of investments, and what they want to learn about money and investing. Teaching concepts and terms related to investing, its importance, and managing their money is part of the conversation. If you think about it, this is very similar to how we start the discussion with adults after our initial meeting; what do you know about investing, why is it important to you, and how should we invest so that you can live a more fulfilled life?

Focusing on the importance of math, giving the next generation a look into the world of investing starts with basic Finance 101; the bank accounts for spending and saving, brokerage accounts, and the ‘why’ behind investing. Children don’t always equate that an investment can be anything from a house to a brokerage account being used to save for retirement. If we give our children the basics of money management, we help them develop the best strategy to preserve their wealth, the wealth of their children, and so on. There’s no better strategy to preserve wealth than financial education for this and the next generation.

 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

The Second Half of Life – Discovering Your Passion

At some point along your life’s journey, you might find yourself at a crossroads looking back thinking, “Is this it?  Is this all there is to life?” while considering the path ahead of you. It can happen at any time- you’ve spent your life building something that has taken all your blood, sweat, and tears and you realize you’re looking ahead to the remainder of your life and pondering how you will be remembered.  For many, this is the impetus for a life change- not the money they accumulated or the business they built, but what they intend to do with the years they have left, and what legacy they will leave

As a society, we tend to focus on the first half of life and not the second half, which many times can become the most fulfilling.  The first part of life is filled with plans, projections, and goals to get to the next phase of our business (or life). It’s easy to become consumed with what you need to do to achieve success, but the joy often fades when success comes.  Sometimes the more successful one becomes, the harder it is to find happiness and fulfillment.  Success and money suddenly aren’t as compelling as they once were.

When people discover their passion, sometimes they realize that all of the successes and skills gained and wealth accumulated, can be used to better the lives of others, and ultimately the planet.  Bill and Melinda Gates, The Buffet Family and other successful entrepreneurs have been inspiring examples of prioritizing higher causes and donating significant wealth during their second half of life.  For these individuals, it has become their focus to create something impactful, lasting, and personally fulfilling instead of just retiring with a pile of cash.

You alone have to decide if your life goal is success or significance- it’s your life.  It takes opening your eyes, looking inside yourself, and determining if you’re happy with the life you’ve created.  If you’re not satisfied, commit to discovering your passion, whatever that may be. Saving for your second half of life is essential, but so is having a love for it. 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Positive Impacts of the Financial Crisis

The financial services industry is still recovering from the effects of the financial crisis.  Positive impacts from the crisis include new regulations and clients taking an increasingly active role in their economic destiny.  Reinforcing this is that all participants—financial advisors, clients, and regulators—are all welcoming the greater transparency and convenience that new financial technology (FinTech) is bringing to the relationship.

Another positive of the crisis is that it has created new client experiences and a new role for financial advisors. Clients are now in charge more than ever and know what they want and expect.  They demand real-time information in everything they do, whether it be shopping or accessing investment information. The smartphone, in particular, has facilitated this. Investors clamoring for transparency and technology helps create a new, more empowered investor.  Financial firms that do not address these changes run the risk of losing their clients. 

Today is a pivotal time for an industry that was previously shrouded in secrecy before the financial crisis. Today, financial intelligence—through transparency and more high-value advice—is the only way that the financial services industry can survive.  Online access and portfolio automation have allowed clients full access to their accounts and greater insight into its workings. This gives investors more piece of mind and a longer-term view of their goals while allowing the advisor to be more strategic with their advice. 

FinTech helps the advisor focus on the role they should occupy—the giver of financial advice.  This advice takes into consideration the whole client, their evolving situations, values, and expectations.  With transparency and technology at the forefront, a higher value relationship between the client and their advisor is happening.  Time is not wasted on administrative tasks since technology takes care of the heavy lifting. Clients have full access to update information and make changes themselves, with technology notifying the advisor.  

With regulatory changes after the crisis and the new technology developed by startups and financial companies, there isn’t a better time to be an investor or a financial advisor.  FinTech tools are available to us to see the real-time performance and plan accordingly to an investor’s ever-changing situation. We encourage all investors to take an active role in their financial lives by discovering and using the technology tools available today and the new tools in the future.

 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Questions Every Investor Should Ask Their Adviser

Many investors evaluate not only their portfolio performance but also their relationship with their financial advisor from time to time. Many times people base their evaluation of their advisor on their portfolio performance, but there are other components to consider. Asking these questions can help you determine if you and your advisor are mutually aligned:

Question #1: Are you a fiduciary? 

A fiduciary has a legal and moral responsibility to take care of your assets and act in your best interest. A fiduciary is a financial advisor (person) who receives compensation for the management of your assets and the financial advice they give.

Why is this important? There is a critical distinction between being a steward of a client’s assets vs. pitching products to generate a sale. 

Question #2: What fees do I pay?

There is no such thing as an investment that doesn’t cost you anything.  You should always ask so that you know what you’re paying for. 

Fees that are a part of the assets under management include fund management fees, portfolio management or asset-based fees, platform fees, charges on commissions, trades, M&E fees, and rider fees. All costs associated with your portfolio are dependent on where the funds sit. We welcome your inquiry on what your specific fees are for each fund in your portfolio.

Question #3: How are you compensated, and by whom?

Advisor compensation can be very complicated when it involves commissions. Many times there is compensation for advice as well that may not include commissions. In reality, commissions are usually how an advisor makes their income, by selling you investment products. The commissions are paid to the advisor who sells you a product from the fund-company or broker-dealer; if they don’t sell you something they don’t get paid.

Understanding advisor compensation is essential for determining an investment’s true cost.

Question #4: Where do my portfolio and investment recommendations originate at your firm?

Many times when you purchase investment products, the product itself sits with the broker-dealer or at the wirehouse. Sometimes the firm, not the advisor, often is responsible for creating portfolios. The recommendations advisers give you in these circumstances originate from the broker-dealer or wirehouse based on the portfolios they’ve designed. There may be other recommendations or products that ensure the client’s portfolio meets their situation, timeline, or risk tolerance.

Question #5: Who handles my account?

Depending on your situation, your account may sit at a broker-dealer or with a wirehouse. You may need to have one person assist you with one transaction while another helps you with something different if you rely on customer service if you don’t work directly with a financial advisor.

In other business models, the advisor will focus on specialties they each have. They will help you because each client is a client of their firm.   You have access to each member of their team depending on your circumstances, which may change from time to time and require individualized help or advice.

Asking questions of your adviser is your right; after all, they work for you. If you have questions about our relationship or your investments, please don’t hesitate to ask. We’re always here to help. 

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