Wealth Management & Financial Planning

Wealth Management & Financial Planning

Five Critical Areas of Finance That You Shouldn’t Ignore

There are five critical areas of finance that we see generate profound happiness or absolute frustration for families. The stress of retirement and when to take Social Security can be overwhelming. The dreaded thought of tax planning before the end of the year let alone tax reporting in April creates anxiety for nearly everyone. How to invest and when to buy or sell is simply more than most want to consider. The legacy planning and proactively discussing your own demise would likely lose out to a trip to the dentist. But there is one other category that is simply accepted as it comes along: Life happens.

Life Happens

The good, bad and ugly of life are not probable for most of us today but are likely over the course of our lives. Having children, buying your first home, seeing your daughter get married or caring for an elder parent are likely at some point in your life. Our experience has been that these events (especially the bad and the ugly) go without any planning or forethought before the situation is at hand.

The discussion of any of those five critical areas of finance can and do lead to stress and frustration but trust me, dealing with them the day a decision has to be made is much more difficult than the planning. A dear friend had to close his business this year and in a remark, he made to a group embodies the essence of what I am trying to say in this column, “Learn to be humble while it is still an option.” How true. We need to plan while choices are still available.

This week one of our families faced this very issue but fortunately had done the proper planning. The sudden loss of a husband, father, grandfather, and friend is unimaginable and yet common. The emotional loss is immense but having things pre-planned (financial and legacy) removed a part of the stress that so many other families have to bear.

As we head into the final quarter of this year, I would encourage you to do your tax planning now. Figure out your income, your marginal tax bracket and what retirement plans you have the opportunity to be participating. Know your options for charitable gifting and family transfers and have a plan for next year. Plans don’t always make it to the battlefield but they certainly provide direction.  That is step one.

For next year, as you look at your goals and objectives, simply promise yourself to take on one of the four known categories (retirement, tax planning always in fourth quarter, investment positions and legacy planning) each quarter. As they say, you eat an elephant one bite at a time! Your financial world may not be an elephant but it will likely feel overwhelming if you look at all categories and take them seriously.

There is no greater power on earth in my opinion than momentum. Once you start the project, the feeling of success will many times drive you forward.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see our Disclosure page for the full disclaimer.

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