By Jason Oshins, Financial Advisor, MBA
As the calendar changes from December to January, we take stock of ourselves – our health, our habits, our finances. We then formulate garish, outrageous resolutions, oftentimes setting ourselves up for failure. We commit to cutting out all fat, never eating ice cream, waking up four days a week to work out, running five miles the other three days, learning how to play guitar, and joining a book club. According to the messages all around us, we must be “all in”, after all. Invariably, when January turns to February, we eat dessert, no longer wake up to go to the gym, don’t run five miles, haven’t yet signed up for guitar lessons, and – oops – forgot to look for that book club to join. This happens year after year after year – lather, rinse, repeat.
Not long ago, my wife and I were out to dinner with friends. Earlier that day, the couple had just completed a 5k race. This would have been unthinkable just a year ago. Feeling the tailwind of age, the husband had recently lost over 50 pounds and had just spent the past three months at his college-graduation weight of 175 pounds. With three children under age 18 and having recently turned 50, he had people who depend on him, and he was confronting mortality. He was reconciling the real fear of dying early with the real likelihood of living long.
So, how did he lose the weight? He started working with a coach at his local gym who helped him progress from zero to 5k. So many of us commit to a seismic change each year, only to succumb to the temptations that created the situation in the first place. Just a little bit better each day is all we need. The idea is that we can accomplish our objectives – whether doing more of what’s good or less of what’s bad – through incremental improvements. Evolution instead of resolution.
In fact, we can use the changing of the calendar as an impetus to improve in a way where we set ourselves up for success. How about instead of proclaiming to work out more than we ever will, read more than we ever will, and eat better than we ever will, we instead commit to being just a little bit better in all areas? While we advisors certainly discuss incredibly intimate issues with clients, this focuses on the financial side of the power of incremental change. So, clients are on their own to do their version of a little more working out, a little more brain feeding, and a little better eating.
The following list is a starter list and is far from comprehensive. It addresses those major financial categories we all would benefit from addressing. Many are presented in absolute terms – after all, why not stretch if you can? The combination of just a little bit in each area will provide substantial benefits. That said, the most effective planning occurs when advisors apply their deep-rooted knowledge to their clients’ specific situations. It’s not when the advisor does “to” the client, and it’s not when the client dictates the planning. The most effective planning is collaborative and is when the advisor does “with” the client. That’s what results in greater protection during wealth accumulation, improved cash flow during retirement, and more fluid wealth transfer at death. This list, used collaboratively, propels the client forward.
When going through the categories, ask the following questions:
- How can I do just a little better?
- If I don’t address this, what are the consequences?
A New Year’s Resolution Financial Starter List:
1. TAKE CARE OF MYSELF: I will prioritize my personal financial well-being by meeting with my advisor to make sure I’m on track.
2. TAKE ACTION: I will make necessary course corrections.
3. PROTECT MY FAMILY AND ESTATE: I will obtain a professional analysis of my protection, so my life insurance, disability insurance, long term care, excess liability, auto, and homeowners insurances are at optimal levels.
4. ORGANIZE MY ESTATE: I will organize my financial picture, so I can see my assets, liabilities, cash flow, and protection in a single view, thus enabling me to make better, more robust financial decisions.
5. SAVE MONEY: I will save at least 15% of my gross income.
6. ATTACK DEBT: I will assess my debt and attack “bad” debt systematically.
7. INVEST PRUDENTLY: I will obtain a professional analysis of my investments to make sure they are grounded in academics and science and not subject to stock picking and market timing.
8. UPDATE ESTATE PLANNING: I will review my estate planning to ensure that my beneficiaries, trustees, guardian, et al. are up to date and reflect my current desires.
9. PROCEED WITH HONESTY: I will seek assistance where I need it, recognizing that even Michael Jordan needed a coach.
10. PLAN WITH OPEN-MINDEDNESS: I will keep an open mind to planning ideas and make sure those strategies and products I implement are grounded in facts and not opinions.
We all wish we could wake up to a new year as an improved version of ourselves, with our “imperfections” made perfect. To address these imperfections, we often proclaim impossible resolutions, which we can’t possibly implement. A way to set ourselves up for success is through incremental improvement in many different areas. Just a little bit better each day can result in substantial benefits.
ABOUT THE AUTHOR
Jason Oshins is a Financial Advisor with Wealth Strategies Group. He works closely with clients throughout the country to increase wealth during lifetime, improve income during retirement, and provide a greater legacy upon passing, while also protecting their estate from taxes, inflation, and market volatility. He specializes in the areas of estate planning, investments, retirement planning, insurance planning and design, disability protection, long-term care, wealth transfer, and business planning. Jason obtained his MBA from the University of Michigan in Ann Arbor. He can be reached at (702) 735-4355 x 218 or at email@example.com.