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Mastering Retirement Planning: Strategies for High-Net-Worth Individuals

High-net-worth individuals don’t get to where they are by happenstance — it’s the outcome of a journey marked by choices, and at times, the lessons learned from mistakes.

Although 84% of wealthy Americans have financial plans designed to mitigate long-term risks, there’s more potential for mistakes in the second half of life compared to the first. When it comes to retirement planning, I like to use this analogy: Every year, thousands of people climb Mount Everest and studies show that the death rate is highest during the descent. This is similar to retirement planning where the likelihood of financial mistakes is highest leading up to and during your retirement years.

A recent study on retirement conducted by Northwestern Mutual, surveying 500 affluent pre-retirees and retirees, found that respondents underestimated their life span by an average of nearly two decades, with 81 years old the average self-reported life expectancy. Experts say 100 years old is what you should actually plan for, suggesting that many pre-retirees and retirees are ill-prepared when it comes to long-term retirement planning.

To help ensure you’re prepared for your golden years, consider these planning opportunities.

READ: Mapping Out Financial Success with Retirement Planning

Look at the big picture

As life expectancy continues to grow, longevity risk, or the risk of outliving your income, has increased.

The financial changes that may occur over such a long life include recessions, periods of high inflation, higher taxes, rising healthcare costs and more. And while there’s no single solution to the multitude of longevity risks, a comprehensive financial plan should include strategies to help mitigate financial-related longevity risk factors.

Save strategically

By getting specific about how you’d like to and when you will need to use assets in retirement, you should identify the right blend of financial instruments to ensure your hard-earned dollars go as far as possible. As you’re putting your money to work, keep these ideas top of mind:

Tax considerations

It’s important to pay particular attention to taxes by looking through the lens of income taxes, capital gain taxes and estate taxes. Additionally, by selecting the right mix of taxable and tax-advantaged financial instruments, you can minimize the impact of taxes, helping your dollars work as hard as possible for you both today and in retirement.

Asset allocation

Selecting the right asset allocation for your risk tolerance, investment time horizon and each life stage helps ensure your assets are appropriately positioned for growth, preservation or somewhere in between.

READ: 4 Key Asset Allocation Strategies for 2023

Income protection

By protecting your income during your earning years through a mix of disability insurance products, you can keep your retirement saving strategy on track in the event an unexpected change in your health or physical condition prevents you from working.

Guaranteed retirement income

Setting up sources of guaranteed income can help cover your essential living expenses in retirement. What’s more, guaranteed income sources like qualified and nonqualified income annuities help mitigate the risk of outliving your assets.

A plan for long-term care

The fact that most Americans turning 65 will need long-term care at some point, along with the rising cost of care, means you’ll want a multi-pronged plan in place to help pay for these services.

Legacy

Having a legacy plan in place ensures that your family’s wishes and assets are carried out in the event of illness or death.

Decide what you want to do in retirement

Whatever you decide to do with your time when you retire, it’s important to start planning in advance. Identify how you want to spend your time and who else has a role in those plans, including a financial advisor who can help achieve those goals. From there, develop a purpose plan to connect all aspects of your finances with what you want out of life once you reach retirement.

When people feel more secure in their financial situation, it frees up time and energy to focus on other parts of life that bring happiness and fulfillment. Northwestern Mutual’s study on retirement found that 66% of recent retirees who work with a financial advisor feel optimistic about their hobbies, passions and interests compared to 53% of recent retirees who don’t work with a financial advisor.

Trust in financial advisors

Those who use an experienced financial advisor are more likely to take the strategic actions needed to achieve their long-term financial goals. Of the affluent individuals surveyed, 70% work with a financial advisor compared to just 37% of the general population. What’s more, over half of wealthy people consider financial advisors to be their most trusted source of financial advice—more than four times any other source.

Retirement planning for high-net-worth individuals can be a complicated undertaking. Revisiting your retirement plan often and following the steps outlined above can help you gain the financial freedom to live the lifestyle you want in your golden years.

 

Scott Sparks HeadshotScott Sparks is the CEO and founder of Northwestern Mutual’s Sparks Financial. All investments carry some level of risk, including loss of principal invested. This publication is not intended as legal or tax advice. Financial Representatives do not render tax advice. Consult with a tax professional for tax advice that is specific to your situation.

How to Choose the Best Budgeting Method for Your Financial Goals

According to Nerd Wallet, nearly 74% of Americans have a monthly budget. With today’s mobile banking technology and easily seeing transaction details as your money comes and goes, why do so many people still budget? And what is the best budgeting method in today’s digital age?

The answer is simple, having a budget is one of the key steps toward financial success. However, there is no one-size-fits-all approach; your budget can be as structured and detailed or as low-tech as you like. But there are a few key tenets or best practices. Below are a few tips and tricks to help you determine the best budgeting method for your style.

READ: Securing Your Financial Future — Key Considerations and Questions for a Solid Plan

How to start budgeting

Determine how much time and how much detail based on what you hope to accomplish through the budgeting process. Budgeting can be a repetitive process and requires a level of commitment to establish a new habit. The first step is to make sure you pick a method that you can stick to and matches your organizational style.

If you are tech-savvy, there are apps and online banking tools that can reduce the time and some of the repetitive tasks. For example, many apps will categorize your spending and even send an alert if you’re close to overspending. You can even calibrate these tools to work for you and tag or color code your different expenses to help you stay organized. Many of these options include video demos that help make getting started easier.

However, if you aren’t a tech-savvy person, it’s more important to start with a method that feels natural. Maybe pen and paper is more your speed. The important first step of budgeting is picking a method that you can stick with — consistency is more important than all the bells and whistles.

Budgeting basics 

Once you’ve selected your budgeting method, it is time to get started. The first thing you need to do is analyze your income and expenses. How much money do you have coming in every month and how much money are you spending?

As you list your expenses, tag them as mandatory or discretionary. Mandatory would be your mortgage payment, rent or utilities.  The next category is discretionary expenses.

Don’t worry, just because we’re labeling them discretionary doesn’t mean you’re giving them up. Discretionary simply means that you have more of a choice than you do with the mandatory expenses. Examples of discretionary can be expenses like eating out and entertainment like streaming movies.

This is where your preferred budgeting method can impact the amount of time you spend. An app or online tool can help categorize for you while pen and paper might take you a little bit more time.

If you decide to use an online tool, be sure to check that each expense is categorized correctly.

READ: Winning the Lottery of Life — Redefining Wealth and Happiness With Financial Planning

Take emotion out of the equation

As you look through your expenses, try to leave emotion and judgement out of it.

Mandatory expenses aren’t better than discretionary expenses. Ultimately, this process gives you clarity about where you have the most opportunity. It is okay to spend your money how you like, but you might need to adjust your spending to reach your goals.

By looking at your expenses all laid out, think about what triggers you to spend. Are you spending money on Instagram influencer posts or TikTok Shop? Or are you seeing a trend with meal delivery or restaurant spending?

Whatever it is, it is ok to spend your hard-earned money in ways that bring you joy and make your life easier while also planning for the future. The key to budgeting is still finding ways to spend your money so you can achieve your financial goals. As you look at your expenses, take away any guilt or shame and instead just use the information as just that — information.

Prioritize your spending 

Once you have everything broken down in an app or on a piece of paper, it is time to prioritize.

List your mandatory expenses on one side, such as utilities and rent. Next list your discretionary expenses in order of importance. Again, there is no shame or guilt here. If you enjoy eating out or you enjoy having all the different streaming services, list that first.

Ultimately, you’re trying to get to a point where you’re not overspending and racking up debt and you’re building a practice of saving for long-term priorities like an emergency fund and retirement. With all of your discretionary expenses listed in order of importance, you can begin weighing the pros and cons of each against long-term hopes and dreams like retiring. Now adjust your budget accordingly. Start small and celebrate consistency.

READ: Effective Debt Management for Colorado Businesses — Strategies to Navigate Economic Challenges

Do budgeting percentages really work? 

Historically, financial experts have recommended using percentages to establish your budget. For example, 50% of your income should go to needs (housing, car payment) or mandatory expenses, 20% to savings and 30% for other discretionary expenses. One of the most important aspects of these percentages is that it helps you think about today and tomorrow.

The key is to make sure you aren’t just spending on autopilot. You can use this part of the budgeting exercise to determine how much you are really spending in certain categories and then decide if that’s where you want to spend your money. It also helps you pause to think about big priorities like an emergency fund, home ownership, your child’s college fund and retirement.

Does the envelope method really work? 

You might have also heard about a technique of using envelopes for your expenses which means you set aside a certain amount of cash each month and when the envelope is empty, you are done spending in that category. One of the key benefits of this approach is that when the money in the envelope is gone, it forces you to stop and reassess.

This pause helps create a speed bump in autopilot spending.  The envelope approach may be hard to put into practice as some retailers are becoming cashless. Instead, you can use this idea to set up your budgeting tools. Most tools will let you create categories and ideal spending limits. Then you can check weekly to see how you are spending against your goals.

Stay focused on your goals 

Now that you’ve categorized and prioritized your spending, it is time to stay focused on your goals. Establishing why you are saving money can be a motivating factor to keep going. Budgeting and working toward a goal can give you some financial peace of mind and control over your spending.

Don’t hesitate to reach out to your financial advisor to discuss a budgeting method that will work best for your lifestyle and help you achieve your goals.

 

Cody Sparks is the executive vice president and director of retail banking at UMB Bank.

Financial Independence for Single Women: Trends and Strategies for Long-term Wealth

It is hard to imagine that in 1974 women were just being given the opportunity to have a credit card in their own name and secure a mortgage without a male co-signer. Fast forward 50 years and women have made huge financial strides. For example, single women now make up 17% of all homebuyers, compared to single men at just 9%, according to the National Association of Realtors (NAR). In addition, women are poised to inherit a large share of the $30 trillion that will be passed down from baby boomers, according to Investopedia. 

As financial considerations and options continue to shift and evolve, being mindful of personal priorities, goals and choices is paramount to success. Knowing where you are, where you want to be and what it will take to make it there requires focus and intentionality. Consider these strategies to ensure you’re set up for financial success now and in the future. 

READ: Becoming a Stay-at-Home Parent — Navigating the Pros, Cons and Financial Implications

Financial considerations for the single woman 

There is an abundance of financial advice and best practices for the traditional family. However, there are specific nuances to keep in mind if you fall outside this category. Establishing a plan based on personal goals and needs is essential in ensuring you are using your wealth to its full extent. Here are a few things to keep in mind:

  • Identify your financial priorities. Whether you want to travel, buy a home, continue your education or are ready to retire, making a list of your short- and long-term goals and aspirations will help ensure you can achieve them.
  • Establish a financial plan. Determine your current budget and any disposable income. Make sure you are tracking your current income and spending. Monitor your savings to make sure you have an adequate amount of emergency savings as well as an appropriate plan for any long-term savings goals. Carefully evaluate any current or future debt and how it will affect your overall cash flow.
  • Address important financial commitments. Outside of your personal finances, plan for other potential financial commitments like caring for elder parents or family members, or upcoming major purchases.

READ: Securing Your Financial Future — Key Considerations and Questions for a Solid Plan

Create financial security with multiple income streams

According to the Pew Research Center, women have surpassed men and now account for more than half of the college-educated labor force in the U.S. Despite the increase in women attending and graduating from college, there is still a significant gender gap in pay that has remained relatively stable over the past 20 years. In 2022, women earned an average of 82% of what men earned, according to a Pew Research Center analysis. 

For these reasons, women may choose to have multiple streams of income to create financial security. Additional income doesn’t just mean a second job — it can come in many forms, including rental properties and passive income like investing in the stock market. If you choose to have multiple streams of income, it’s important to work with a financial advisor to ensure your financial plan encompasses these activities, and you are set up for success when tax season comes around. 

Saving for retirement should be a priority

Regardless of your age or marital status, saving for retirement should still be a priority. In the U.S., the average life expectancy of women is 79, which is six years more than men. For these reasons, saving for retirement is even more important to ensure you have a plan to live out your golden years in comfort. 

READ: What Does the Secure 2.0 Act Mean for Retirement Planning?

Here are a few steps to consider when starting a retirement savings strategy: 

  • Determine your unique needs. A common standard for post-retirement income is 70% of the annual salary you made while in the workforce. The average retirement lasts about 20 years, so you should plan to fund at least two decades of post-work life. 
  • Review your options. There are a variety of retirement plans to choose from that may provide tax benefits including:
  • Set your goals and begin saving. Start the habit of contributing a small amount from each paycheck. Using an automatic payment, like a direct deposit into your account, helps you establish regularity and enables you to consistently save. 

Being financially independent is something to be proud of, and should be protected so you can fully maximize and enjoy what you have earned. Working with a financial advisor and understanding how you can best plan and save to support your goals will help ensure you are achieving that throughout your life. 

 

Gattis KimAs a financial planner, Kim Gattis is responsible for creating dynamic plans for individuals, families and business owners. As part of the wealth team, she helps clients identify their life priorities, and assists them with formulating a plan to meet their specific needs while helping them find direction and meaning through the process of wealth accumulation, preservation and transfer. Kim joined UMB Private Wealth Management in 2009. 

How to Get Out of Payday Loan Debt in Colorado

Despite all the advantages and disadvantages, payday loans remain the most convenient option for people to meet immediate cash needs. Payday loans can cost you much more in the long run than you originally intended to borrow.

Payday loans can quickly become a trap for borrowers due to their high-interest rates and fees. The bill comes due, and they take out another commercial loan with yet more fees because they can’t pay it. Many predatory lenders are abandoning customers by using deception, and deceive consumers by approving loans in states where payday loans are illegal.

Below, are some of the essential facts about Colorado payday loan laws to help you make an informed decision about payday loans. Also, I will discuss how to get out of payday loans living in Colorado.

5 Important Colorado Payday Loan Laws to Know

1. In Colorado, payday lending is legal at a lower cost.

2. The maximum amount that can be borrowed through payday loans in Colorado is $500. One or more payday loans can be used to meet the $500 limit. Although payday loans in Colorado have no maximum terms, they have a minimum term of six months.

3. Payday lenders can charge up to 20% of the loan amount in finance fees for amounts up to $300. For every $100 above the first $300 borrowed, lenders can charge up to $7.50 on top of the standard finance fee. The law allows lenders to charge a 45% interest rate if a borrower renews a payday loan.

4. Law allows for repayment plans. Though, the terms of these plans can differ between lenders as long as they are legal.

5. The collection of outstanding debts is restricted under Colorado payday loan laws. For “insufficient funds” penalties, lenders can charge up to $25. Lenders can sue borrowers for unpaid payday loans for the total amount of the loan plus any attorneys’ fees. Borrowers cannot be sued unless they have closed their checking accounts before fully repaying the loan or debt.

Lenders are required to issue refunds for the prorated amount of the APR when borrowers fully repay payday loans before the loan term ends APR.

5 Ways to Get Payday Loan Debt Solution in Colorado

You must pay off your debts as soon as possible because these loans come at higher interest rates that accumulate until you pay off the debts. Usually, you need to pay the debt when you get your next paycheck, but lenders allow you 30-day extensions to pay.

It can seem impossible to get out of a payday loan when you have one. Fear not, there are ways to get the payday loan debt solution and get back on your feet. The sooner you can repay a payday loan, the better.

Here are some of the ways to escape the clutches of a payday lender:

1. Make Payment in Full

It is advisable to make your entire loan payments. This is undoubtedly the best way to eliminate your debt. Most of the lenders prefer it as well. With the help of a well-planned budget, you can afford it. When you make your payments in full, you needn’t worry about incurring extra debt.

Some states don’t allow you to obtain a new payday loan unless the earlier one has been paid off. Once you’ve made the entire payment, you can pay attention to improving your financial health.

2. Go for an Extended Payment Plan

You can work up an extended payment plan (EPP) with your payday lender. This will allow you to pay off the loan in smaller installments over a more extended period without incurring any additional fees or interest.

Examine your finances and determine the most significant amount you can quickly pay toward your loan each month before speaking with your lender. Make an appointment with your lender to discuss loan restructuring before the last business day before your loan is due.

If you need to sign a new loan arrangement for your EPP, study the terms and conditions well before signing. You’ll avoid any unpleasant surprises down the line this way.

Remember that not all payday lenders will participate in an EPP. However, it’s always good to inquire about your lender’s flexibility if you can’t afford to repay your loan within the set time frame.

3. Consolidate Your Payday Loans

Why should you consider payday loan consolidation to repay your predatory debts?

Usually, when there is a high-interest rate, all of your monthly payments go towards paying the interest rate payments. The interest payments are the minimum monthly payments you have to make. Thus, if the minimum monthly payment is a lot, you are unaware of making any more payments. Your principal amount remains intact, and your payday loans stay the same. As a result, decreasing the interest rate through negotiations will help you pay back your debts fast.

You may also avoid debt collectors as the payday loan consolidation company will deal with your creditors. Thus, you can decrease the interest rate on your payday loans to make total payments on them; you can also make single monthly payments to pay online.

Various companies offer such services. However, not all such companies are legitimate. Contact a reputed debt consolidation company to enroll in a consolidation program.

4. Settle Your Debts

Debt settlement allows you to get out of your debt situation. It will serve as a proposal to your creditors that you are unable to pay off your debts in full and that, as a result, you wish to pay off only a portion of your total debt. Most lenders and financial institutions will refuse to enter into a settlement agreement with you and argue over the lump sum amount you will offer. However, if you can strike a reasonable settlement agreement, all you’ll see is profit!

The first step, is to approach your creditors and lenders on your own and request that they reduce your overall principal amount to a discounted lump sum. The second step, is to locate a reputable debt settlement firm or debt law firm and hire them to complete the task. Following the second path will increase your chances of success. Working out a settlement agreement on your own is a difficult task.

5. Consider Taking Out a Payday Alternative Loan

Consider getting a payday alternative loan (PAL) if you belong to a credit union. The National Credit Union Administration allows federal credit unions to provide members with loans ranging from $200 to $1,000. When applying for a PAL, the credit union can only charge an application fee of up to $20 to cover the actual costs of processing the application. The borrower must be a credit union member for at least one month.

Getting a PAL can be a great way to pay off a payday loan and get out from underneath the high-interest rates. The length of these loans ranges typically from one to six months. During six months, the same borrower may receive up to three PALs.

Can You File Bankruptcy to Get Out of Payday Loan Debt?

Bankruptcy should always be a last resort choice. Declaring bankruptcy has numerous long-term consequences that will harm your credit for years. This is why it’s critical to evaluate all other possibilities before taking this path. If you have too many obligations and not enough money to repay them, bankruptcy may be possible. Payday loans and your other debts might be erased as part of a bankruptcy filing.

Advice

You should avoid getting into debt again. Payday loans are hazardous. Make an effort to raise your income and avoid living paycheck to paycheck. Payday loans are never a long-term answer for your financial need, but they can certainly harm your financial situation. Furthermore, many unlawful payday lenders utilize your bank account details for theft and other illegal actions. I hope you agree that payday loans should be avoided at all costs. Manage your money in a better way for a secured financial life.

 

Lyle SolomonLyle Solomon has extensive legal experience as well as in-depth knowledge and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California in 1998, and currently works for the Oak View Law Group in California as a Principal Attorney.

 

Steps to Consider Now Toward Estate Planning

The Census Bureau reports the average age of widowhood in the United States is only 59 years old. With this being the case, many women should be prepared financially to live another 20-30 years after the death of their spouse. Tragically, I have three clients who unexpectedly lost their husbands to a heart attack, inoperable cancer, and suicide. While this is incredibly heart-wrenching on a personal level, fortunately, they had the financial resources to keep paying the bills. Being single in your fifties is hard, but not having enough money is a hundred times worse.

Talk to your partner now, and make a comprehensive plan just in case the worst happens much sooner than expected.

Here are a few things to consider:

Personal and Organized Information

One of the best ways a couple can prepare for a life event is by creating a binder containing all personal and financial information in one place. This organizer should include social security numbers, beneficiary information, passwords, and the contact information of your professional advisors. Write down any information regarding your personal residence or vacation/rental homes.

In addition, you should include funeral and burial information, where to locate any important financial, insurance, estate, tax, and legal documents.

The best way to protect your standard of living is to buy as much term life insurance as possible.

Term Life Insurance

One of the biggest mistakes couples make is not having enough life insurance or underinsuring their spouse. The best way to protect your standard of living is to buy as much term life insurance as possible.

Term is the cheapest form of insurance and the easiest to get. Use the 4% withdrawal rule when deciding how much insurance you will need.

For example, if your spouse makes $100,000 a year, buy at least $2,000,000 worth of term life insurance. This should provide $80,000 a year of income using a 4% total return withdrawal rate. Also, buy a 30-year term policy which is the longest time frame possible; this will lock in the annual premium for the next three decades.

The earlier in life you buy the life insurance policy, the cheaper the premium. It is also easiest to get insurance before any health issues arise, and much better to buy in your 40s than in your 50s or 60s.

Will and Trusts

Everybody should have a will, which is a road map as to who receives your assets and when, upon your passing. If you have a will, it is also a good idea to set up a revocable living trust to avoid probate. The probate process typically takes a long time, is expensive, and makes your will public record. Irrevocable trusts happen after you die, which move your assets out of your estate and provide creditor protection. Trusts are particularly useful if you are in a second or third marriage and have a blended family. You can specify in a trust which assets you wish to leave to your children apart from your current spouse, who may not be their birth parent.

Get to know the team of experts you work with now, to help guide you through what could be one of the most stressful times of your life.

Team of Professional Advisors

If your spouse handles the family’s finances, then you need to get to know his or her team of advisors. These experts would most likely include an investment advisor, life and property insurance agent, personal banker, mortgage broker, and the executor of your will(s). Make an appointment to meet via Zoom or even better, in person. Establish a relationship so there is a rapport of trust and comfort. You will be glad you did so when you need it most.

If your spouse suddenly passes away, you do not get a second chance to buy life insurance or redo your financial picture, so it is best to be prepared well ahead of time. This means you should have all personal and financial information recorded in an easy-to-find location, and enough life insurance to cover living expenses. Write a will and set up a trust. Get to know the team of experts you work with now, to help guide you through what could be one of the most stressful times of your life. The rule of thumb is, to avoid making any major decisions for at least a year to 18 months because of the trauma from the grief associated with losing a spouse.

The less you must worry about by being organized and in the loop now, the better, especially if your partner handled all of your finances in the first place.

 

Thumbnail Fred Taylor HeadshotFred Taylor is a managing director and partner of Beacon Pointe Advisors’ Denver office. He helps individuals and families build wealth, live off their wealth and leave a legacy for future generations. A former economic advisor to Governor Bill Ritter, Fred has more than 35 years of financial services experience.

 

Important Disclosure:
Frederick Taylor is a Partner, Managing Director at Beacon Pointe Advisors, LLC. The information contained in this article is for general informational purposes only. Opinions referenced are as of the publication date and may be modified due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Past performance is not a guarantee of future results. Beacon Pointe has exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, Beacon Pointe has not independently verified or attested to the accuracy or authenticity of the information. The discussions, outlook, and viewpoints featured are not intended to be investment advice and do not consider specific investment objectives or risk tolerance you may have. All investments involve risks, including the loss of principal. Consult your financial professional for guidance specific to your circumstances.

Johnson Financial Group Appoints Kristin Keffeler: Chief Learning Officer

 

Kristin Keffeler will help Johnson Financial Group incorporate a more holistic approach in helping clients achieve well-being beyond preserving and growing their wealth.

Johnson Financial Group takes an integrated approach in finding better ways to manage wealth, tackling the complexities that often come with investment and financial planning to finding the right advisor team. Based in Denver, the Group operates as a family office with more than 40 years in generational service.

In a recent progression, the firm has created the new position of ‘Chief Learning Officer’ and appointed longtime coach and consultant, Kristin Keffeler, in order to incorporate a more holistic approach in helping clients achieve a financial health of well-being beyond preserving and growing wealth.

“We believe that Kristin’s interactions with our clients will be truly transformational, giving the families we work with the opportunity to learn the best practices about communication, strength building and establishing a healthy legacy,” said Brandon Johnson, Principal and CEO of Johnson Financial Group.

Kristin Keffeler
Kristin Keffeler, new Chief Learning Officer at Johnson Financial Group.

Keffeler is a professional advisor who has spent more than 15 years guiding families on wealth and enterprise management, residing in a dual role as founder and coach of her consultancy, illumination360. She specializes in facilitating conversations about crucial subjects, and collaborates with families in identifying their values, principles that guide decision-making, and visions to realize success as individuals and as a group.

At Johnson Financial, Keffeler will lead the way in supporting clients to identify opportunities and challenges through their planning, while providing guidance on family governance, family dynamics, behavioral change, and intergenerational collaboration.

Keffeler holds a master’s degree in Applied Positive Psychology from the University of Pennsylvania, including a master’s degree in Business Management and undergraduate degree in Biology and Chemistry from the University of Denver.

A sought-after speaker, Keffeler has presented for the Financial Planning Association, the Denver Estate Planning Council, The Kinder Institute of Life Planning, and Resource Generation.

Keffeler serves as Dean of Psychology at the Purposeful Planning Institute, and is an advisory board member of the Bailey Program for Family Enterprise at the University of Denver’s Daniels College of Business.

Additionally, Keffeler has contributed toward the book, “Wealth of Wisdom: Top Practices for Wealthy Families and their Advisors,” and has written for Entrepreneur, Journal of Financial Planning, Trusts & Estates, Journal of Practical Estate Planning, and Denver Business Journal.

Her research on the traits and skills that guide intergenerational collaboration was recently published in 2018, “Becoming the Rising Generation: Uncovering the Path to Thriving for the Next Generation in Ultra-high Net Worth Families,” supporting a path for the next generations and their families to thrive.

 

“Kristin is a national thought leader in this space, and we’re thrilled to share her talents with our clients.” -Brandon Johnson, Principal and CEO of Johnson Financial Group

 

About Johnson Financial Group
Johnson Financial Group is one of the country’s most exclusive, integrated family offices, offering a unique understanding of the complexities and challenges facing affluent families. Through its wealth management arm, the firm provides advising, investment management, financial planning and private capital access. Johnson Financial Group’s history as a single-family office extends across 40 years and encompasses four generations.

4 Reasons to Keep an Investment Journal

Whether you’ve already built an investment portfolio or are just getting started, it’s important to understand your investment goals and track your progress along the way. Keeping an investment journal is a simple and effective way to monitor your journey.

An investment journal is more than a log tracking your net worth. It can give you insight into who you are as an investor and what you hope to accomplish with your portfolio. Here are four reasons to keep an investment journal and how you can make it work for you:

1. Track Progress Over Time

At its core, an investment journal is a place for you to track your investments and how they perform. You can do this on a computer or in a notebook. Just make sure you keep your journal in a safe place that you can access easily. Log specific information in your journal, such as:

  • The date you invested
  • How much you invested
  • What you invested in — rental property, stock shares, etc.
  • What you expect to get out of the investment
  • Risks that might be involved

Regularly update gains or losses, as well as any information that may explain changes. You should also track expenses related to your residential real estate investments so you can deduct them when filing taxes. Tracking this data over time will help you monitor your wealth and make future decisions.

2. Set Financial Goals

Making money and building wealth are the overall goals of investing, but it’s important to set specific short- and long-term goals. Your short-term goals might be to earn extra money for your savings account, while your long-term goals might be to live off the dividends of your investments. You can use these goals as benchmarks to track your overall progress and make adjustments accordingly.

Set your goals for a specific time period, such as quarterly, biannually, or annually. At the end of each period, look at your investments to see how they’re performing. If an investment exceeds your expectations, you may want to increase how much you’ve invested to grow your wealth more quickly. If your investment is underperforming, it might be time to sell and invest the profits elsewhere.

If you’ve invested in real estate, you can take advantage of a 1031 Exchange, which allows you to defer paying capital gains tax by reinvesting the profit into the purchase of a like-kind property. Research the best 1031 Exchange companies, including by state as applicable, to help you maximize the earnings on your investment.

3. Log Lessons Learned

Your investment journal is a place where you can keep research you gather over time as you make investments. For example, real estate investors who buy and flip homes have more than one option for selling property. They can hire a real estate agent, sell to a company that buys houses for cash, or sell the property themselves to avoid paying a three-percent real estate commission.

Research what each choice entails and make notes of what you learn. You’ll have a convenient reference guide when it’s time to decide what to do.

4. Understand Decision-making and Investment Style

There’s no one way to build wealth over time. How you invest and what you do with your investments are personal to you. By tracking why you made a particular investment, you can gain insight into your decision-making and investment style, which in turn can help you make future decisions with more confidence.

If you’re buying and flipping a house, experiment to find which approach works best for your skill set and your overall goals. If you’re selling for-sale-by-owner, you can keep all the profit, but you’ll need specific skills and experiences to succeed. With an agent, you’ll have an expert on your side, but you’ll have to pay a percentage of your earnings for commission. By selling to a company for cash, you’ll have a faster turnaround, but you’ll typically sell below market value.

When you look back at your investment journal, you can see what makes the most sense for you financially looking forward. You can remove the guesswork, and make future decisions with a keen understanding of why it’s the best option for you.

 

Screen Shot 2021 12 28 At 113128 AmLuke Babich is the Co-Founder of Clever Real Estate, a real estate education platform committed to helping home buyers, sellers, and investors make smarter financial decisions. Luke is a licensed real estate agent in the State of Missouri and his research and insights have been featured on BiggerPockets, Inman, the L.A. Times, and more.

6 Tips for Starting Your Small Business Finances on the Right Track

Running a small business can be fulfilling — you make major decisions, you can make an adaptable timetable for yourself, and as a rule, you’re accomplishing something you’re passionate about. However, it’s additionally accompanied by its reasonable share of difficulties.

As entrepreneurs and banking administrations will often tell you, even though business proprietors recognize monetary administration as their greatest concern, most battle with accounting — yet, important in overseeing their finances. This is the way toward beginning your business on the right track, and assuming powerful responsibility for your money.

Make a Financial Plan.

Financial plans aren’t fun, however they’re critical for dealing with your income. They’re fundamentally a rundown of your projected monthly or yearly income and costs. Expecting the costs of your business assists you with keeping away from shocks, planning for the future, and recognizing and addressing areas of concern.

It’s vital to be as exact as possible with your projected income. Contrast your financial plan with your real income and expenses to get a genuine image of your small business’ finances.

Set Up Your Bookkeeping.

Tracking your pay and costs are basic measures. You’ll have the option to settle on better monetary decisions about charges, drawing a pay, financing, and then the sky’s the limit from there. There are so many free or low-cost bookkeeping programs that permit you to make the reports you want to assist you in better dealing with your income and finances.

Project Your Income.

Income issues — for example, delinquent receivables or surprising duty-related costs — can be a major torment and prompt a greater number of businesses to come up short rather than benefit. An income projection that incorporates your start-up expenses, finances, and deals forecasts, will assist you with keeping away from these issues and assist your business in flourishing. Follow up your projection with an income explanation, which is a real record of the money that enters and leaves your ledger consistent.

Make a Benefit and Misfortune Proclamation.

Make certain to track your productivity on a monthly premise. Get ready by surveying a benefit and misfortune articulation monthly, and on a financial year-to-date premise. It lets you know how well you’re dealing with your business and incorporates deals, cost of products sold, net benefit, upward and net benefit.

Capitalize on bookkeeping programming, for example, QuickBooks or FreshBooks, which naturally produces a benefit and misfortune proclamation for any timeframe as indicated by the boundaries you enter.

Conduct Banking in the Countries Where Business is Being Established.

Opening bank accounts in the countries where the business is being established can be very beneficial. Hong Kong, for example, is considered one of the monetary focuses of the world, with a strong financial framework and a business-accommodating monetary environment. Seventy of the best 100 banks on the planet have some form of operations in Hong Kong banks, and 29 multinational banks have their regional base camp in Hong Kong. The best Hong Kong banks, including their international counterparts in some cases, are:

  • HSBC
  • Hang Seng Bank
  • Bank of China, Hong Kong
  • Citibank, Hong Kong
  • Standard Chartered, Hong Kong

There are also an enormous number of foreign banks in Hong Kong. Hong Kong banks are managed and directed to guarantee banking solidness, which is an element in the general monetary security of the country.

Plan for Charges.

Set up charge accounts when you lay out your business and keep steady over them so that you’re not scrambling during charge season. Depending on your income, you might have to consider sales taxes specific to locality, for example GST/HST in Canada. See whether import charges concern you. Assuming you’re running a sole ownership, explore keeping duties and whether they apply to your business pay.

The Future  

Understanding your business finances can provide you with a reasonable image of your organization’s monetary well-being and assist with informing significant business decisions, such as recruiting representatives or putting resources into gear. Once you’ve dominated the rudiments of small business bookkeeping, you’ll be better positioned to set up your business for future development.

A guide to financially adjusting to life as empty nester

As parents, you’ve probably spent the last 18 or so years prioritizing spending money on your children, their activities and their needs. When they finally leave the nest, your entire financial picture can change.

Now instead of paying for dance lessons or club sports, you will likely shift your spending to different aspects of your life.

Discover four financial considerations you may want to evaluate.

Have a family conversation

When your child leaves the house for college or for their first professional job after graduating high school, you should have a family conversation about finances.

Before you sit your child down for the talk, you should decide if you want to still financially support them and what that looks like for your family.

Do you want to fully pay for their expenses, help out within a budget or are you not planning to offer money at all?

Once you decide, you can have a productive conversation. You may also want to share some of the things you learned about managing finances when you were their age.

If your child is interested, share the new UMB Financial Education Center with them and encourage them to explore some of the modules.

Build a new budget

After your family conversation, start by reviewing where your expenses have changed. Your grocery bill and utilities might decrease since fewer people will be in the home raiding the fridge and using water and electricity.

You might also need to shift some money to send to your college student or young professional every month if you are helping them cover their school or work expenses.

By reviewing where you can allocate your funds now, you can set some new financial goals like adding more to retirement savings, taking a long vacation or paying down debt.

Use investment accounts If you are helping your child pay for college and the expenses that go along with it, you can still put money in a 529 account once their semester has started. This allows you to get a tax break, or you might want to consider refocusing on your own retirement savings.

This period when the children leave the nest can be peak earnings for parents, assuming you have a consistent career path and opportunities for advancement.

A financial advisor can help talk to you about how much of your new liquid funds should be allocated to your retirement accounts and set you on the right path for financial freedom.

Tackle debt

If you have funds freeing up, evaluate if you have debt that you can pay down. You can work with your financial advisor to establish financial goals and determine what debt you should pay down first.

Now might be a good time to also start a new savings strategy if you plan to make a large purchase, such as a new house, second home or vehicle so that you can avoid new debt in the future.

The transition from having a full house to an empty nest can be financially liberating. Take advantage of the new opportunities in your budget to reach your financial goals that might have been put on the back burner while you raised your family.

Nicole Watson is the Senior Vice President, Territory Director at UMB Bank.

Strategies for developing a financial legacy as an attorney

No matter the size of your family or fortune, you must intentionally build a financial legacy. Practical financial legacies are built by determining your financial goals and then focusing on each one individually.

What Are Your Goals?

With goal-based planning, you can balance several different financial goals, breaking them down into manageable action items. No matter what type of law you practice, you know that cookie-cutter plans rarely work for your clients. The same applies to developing a strategic financial legacy.

Far too often, attorneys focus only on one goal or what everyone else’s plan is, for example, retiring comfortably. Then, when they attempt to carve out what they require to fund their other plans, they end up subtracting from their fixed goal and merely hoping for the best.

Essential Goals

Your essential goals are the ones that must receive funding no matter what, such as healthcare and shelter. They protect you against financial uncertainties. If you can’t meet and fund your essential goals, it will be impossible to build a lasting legacy.

Important Goals

Providing for basic needs and expenses is necessary, but most people don’t want to stop there. You have goals that are personal and important, depending on your temperament and tastes. Perhaps you want to start your own practice, ensure your children receive excellent educational opportunities, or travel and enjoy the finer things that life has to offer. Maybe you want a larger home or a vacation home.

If you invest effectively, the greater the chances are that you will achieve and exceed these goals. You need to determine the balance you desire to strike between protecting the lifestyle you’re already living and assuming additional market risks as you seek greater wealth for your important goals.

Gratitude and Giving Goals

For most attorneys, a life well-spent also encompasses generating a legacy during their lifetime and beyond. Developing and accomplishing family, community, charitable, philanthropic goals requires precise financial logistics, including:

Don’t overlook personal logistics either. You should identify your legacy goals and prepare your heirs for their future roles in extending your legacy.

Creating a Generational Wealth Plan

Leaving generational wealth requires that you attain assets or save money you won’t spend during your retirement. Unless you inherited generational wealth, this process can be slow. However, if you are financially strategic, it’s attainable. Consider the following strategies to building generational wealth:

Consider a Money Market Account

If you have a savings account that you don’t usually access, consider putting those funds into a money market account to accelerate interest growth. Your money won’t accrue as fast as if it were invested; however, you won’t risk losing it like you could in the stock market.

Invest in Stocks

Stocks are one of the best ways to develop long-term and generational wealth. Your initial investment goal should focus on capital appreciation while you set aside more money, allowing the value to grow. As you age and don’t want to take as many risks, you can move to a capital preservation strategy. Transferable stock options can be a great choice as the optionee can transfer them to:

  • A family member
  • A trust
  • A limited partnership
  • Another entity for the benefit of family members
  • A charity

Invest in Real Estate

Real estate can produce income in several different ways. If someone inherits an investment property, there’s the potential for ongoing cash flows in the form of rental incomes, tax advantages, and other benefits.

While prices fluctuate, homes have consistently increased in value over time. If your offspring decide they don’t want to keep the property, they should be able to sell it for more than your initial investment.

Save Strategically

Wealth isn’t just the result of making money; it’s also from saving. As you collect distributions from all income sources, save what you can in a place where it will continue to grow. Ideally, in tax-advantaged accounts first.

Set Up a Trust

A trust can consist of cash, stock, real estate, or other valuable assets. You determine the beneficiaries and set the stipulations. For example, you might elect that beneficiaries receive a monthly payment and only use the funds for educational expenses, injury or disability expenses, or purchase a home.

Enlist the Help of a Financial Planning Group

Generational wealth and the steps necessary to build it can be complex. It’s not a task that many attempt to take on by themselves. Even if you are a trust and estate lawyer, it’s still essential to have support and knowledge from a financial planning group. When you work with an experienced financial planning group, rest assured you will understand all of your options and take steps to meet your generational wealth goals.

Mark Candler and Dave Owens of Maia Wealth are go-to wealth advisers for lawyers and law firms in Colorado. Specializing in debt reduction, investment management, retirement efficiency, and legacy planning, Mark Candler and Dave Owens are trusted professionals for attorney-focused wealth management strategies in the Denver metro area.