Wise World Investment Planning Q1 2022 Townhall

View the rest of our videos here:

Welcome we have arrived to the wise world investment planning town hall quarter one 2022 let’s see what we can learn about investment planning today wise world investment planning four words i’ve given them some thought and i hope today you do as well do we want to live in a wise world where we get the facts and the information we need to make smarter decisions

Because there’s a lot of misinformation out there as well the world is a big place are we invested globally so wise world and then investment planning it implies we’re talking about wealth planning and investments so planning as i define it is bringing the future into now so that it can be improved and wealth as i define it is the ability to earn income without

Any additional input from you so what’s the first step in the investment plan what are your goals that’s probably a good cornerstone question to start with when you’re building an investment plan are they short-term medium term long term are they dream type goals your grand goal for the meaning of your life almost philosophy are they bucket list goals things you

Want to do while you’re on this path so what are goals let’s start there to build a pretty solid investment plan a second question we want to consider when developing a solid investment plan is when do you need to reach those goals so now that you have the goals we can’t do everything at once there’s an old joke about why our creator invented time it’s so that

Everything wouldn’t happen at once well there’s some truth to that so as we now have the goals let’s start time slicing them short medium long term goals of a lifetime that’s the next step so once we have the goals in step one we’ll start to lay in the time horizons on step two so question three is how much do you have to invest now or incrementally as time goes

By so some of your goals may be retirement some of your goals may be college some of your goals may be a child getting married we all have different and varied goals they also don’t all come due at the same time fortunately so how are we going to fund and invest over a reasonable period of time to prepare and have the power of compound interest working for us our

Fourth question in the investment planning process is do you have concerns about taxes or assets you already own both mission critical questions that need to be addressed we all have the same uncle uncle sam and how are his tax laws going to impact our investment plan and the assets we have now are they working as they should are they performing as expected is

The risk and reward balanced properly we need to look at taxes and the asset quality and make sure they’re doing what you expect them to do and they’re working hard for you the next question is how much risk are you comfortable with sounds like an easy question until you contemplate it for a moment are you conservative are you moderate are you aggressive are you

Somewhere in between on those spectrums like moderate plus or aggressive minus and how does that change over time and environments and current administrations and all the things that we have to deal with in this wise world that we’re navigating through so let’s really consider risk today and tomorrow and get it to the point where you’re very comfortable with your

Current risk levels it’s something that we have to manage on an ongoing basis and the last question is how often do you want to adjust your plan i will suggest that you don’t want to be like rip van winkle the old famous story and look at it 35 years from now and hope you turned out okay kind of take a nap under the tree that would be neglect and not often enough

If you look at it three to four times a day you probably have other things in your life you could be focusing on as well i like to do account reviews on a weekly basis that seems to be enough active process review and plan review for me but maybe it’s quarterly for you every 90 days like the town halls maybe it’s twice a year maybe at a minimum an annual review

So we have to find out what is a good review process and a plan adjustment process as you see it so now that we’ve covered what is an investment plan focusing specifically on your investments how does that compare and contrast with a financial plan and there are light financial plans there are comprehensive financial plans what are some of the components that go

See also  Best Loans for Real Estate Investors for 1 to 4 Unit Properties - Episode 101

Into a financial plan first of all you can see summary of all of your assets and all of your debt so are we above water are we underwater holding our breath how are things going how does it look so taking a snapshot of assets and debt is a good place to start then the old budget word i know you like the word cash flow plan instead but budget based on your income

Based on the expenses to help you save for the future realistically just like our nation we need a budget then evaluation of all your insurance coverage and needs because there’s never enough to have all the insurance coverage that we could we’d be insurance poor having no insurance is obviously not a viable option truth lies somewhere in the middle of those two

Positions so an evaluation of our insurance coverage and needs is critical next the investment plan for how to seek growth for the money we put aside now you’re committed you have a lump sum or you’re going to do incremental investing dollar cost averaging over time what is your plan going to be where are those funds going to be allocated are we going to become

Owners and own investments are we going to be keeping loaners and loan our money how are we going to make our money work for us with a reasonable risk reward next is an estate plan because now that you’re accumulating assets and we’re paying off debt and we’re making progress we’re going to have something to leave behind we don’t want our last check to the corner

To bounce we want to leave something to our heirs and our beneficiaries and of course last but not least in a good financial plan is consideration of the impact of income taxes and changes in the law that’s a full-time job because members of congress are still working hard every day to write new laws revisions some of the current law sun setting so it’s an ongoing

Portion of an active financial plan why should you benefit from investment planning there’s got to be some reason you would want to go through this process of planning your investment so that they work so number one would be financial independence it’s important because your family is important to you and they lean on you or look to you for having investments

That are carrying part of the weight yes you provide the income yes you make good decisions but your investments need to do that as well so financial independence i would put that at the top of the list second thing is efficiently manage income everyone that i talk to wants to be comfortable someday they want to have income coming in that pays the bills someday

They would like to be to the point where their investments are doing most of the work so their job becomes something they don’t have to go to every day another great benefit other than managing income would be just understanding the wild wonderful wacky world of investments is constantly changing it’s a neat topic to educate yourself and to get comfortable with

The terms the vocabulary some people you know speak two or three or four languages i speak a little aerospace because of my background i speak a little bit of finance and i’m still learning every day you can learn as well the well is never full let’s continue this lifelong learning process and getting understanding i think that’s a benefit the next is savings

Having that peace of mind money checking account savings account liquidity money that is there in case of unquote the air conditioning going out you know what i’m talking about and last but not least a nice benefit of investment planning is standard of living making sure not only the essentials are covered the food clothes gas etc insurances car insurance but also

Having some lifestyle being able to do what you want so your standard of living is directly benefiting from the quality of your investment plan so let’s have a quick review of some of the objectives of the financial planning process things that we want to make sure we include while we’re doing financial planning number one conservation of principle one of the main

Objectives of many investment planners is seeking to ensure the family is financially independent in this case one should invest in investment vehicles with low risk such as money market funds or us government bonds you want to make sure that you have a certain level of confidence that comes from your investments being in lower risk allocations income lower risk

See also  Watch This FAST If You Own Google, Meta, Or Amazon Stock!

Is good but if it doesn’t provide any income we’ve still not completed the journey so one of the objectives of financial planning is a steady predictable i’d say boring income that just does what it’s supposed to do remember the days of pensions some people have them some people have never had the opportunity to have them but that’s what we’re talking about lower

Risk and income words like pensions come to mind or as close to that as we can obtain then we also need overtime growth of capital because a lot of us are going to live longer than we originally thought yes some people live three five ten years in retirement but some people live 10 20 30 40 years or more in the retirement phase of their financial planning life

Growth of capital reasonable growth of capital is part of that process then another objective yes we’ve talked about it again tax minimization we owe caesar what we owe caesar we owe uncle sam what we owe uncle sam but to overpay taxes is not wise we need to have a process we need to actively proactively review our taxes to pay our fair share but not to overpay

Because we don’t understand exactly how the system functions and last but not least a solid objective of financial planning is liquidity knowing that you have money that can be converted to cash and you can grab the money when you need it the best time to invest is when you have the capital available the best time to take the money is when you need it liquidity

Ensures that it’s available when the demand arises what exactly are the steps of investment planning well obviously we want to make sure we have some savings you’ll notice in the upper left corner checking savings money that you can grab so you when your head hits the pillow at night you have some level of comfort so savings is first once we’ve established proper

Savings then it’s time to have our money get a promotion if you will to work harder for us to take more risk and hopefully receive proportion of more return than we have investing i think cash flow is a lot like water you want to have water at different levels for you like the local lakes where they’re all synced together this lake feeds this lake which fills this

Reservoir it’s a continuous process to eventually comes out of your tap and you can get your refreshing water you don’t want to run out of water in the desert nor do you want to run out of cash flow so step one if you look at the high noon or top position is when and how are we going to do what we need to do what is it we want to accomplish i want to retire in the

Next seven years i want to have cash flow for the next 33 years i want to the details i’ve heard the devil’s in the detail god is in the details it takes some work to figure out the wins and the house then we look at that in conjunction back and forth ying and yang if you will with setting your goals your realistic your practical goals your fun enthusiastic goals

Your living the dream goals back and forth we go between goals and the wins in the house as we’re doing the first two sure enough we’re looking at the risk analysis how much risk are we willing to take maybe we start the goals too late maybe we don’t give it enough time maybe we think compounding is amazing all these factors go back and forth and interweave as

We’re doing the risk analysis and then we have to learn about our choices what choices are available not all choices are available at all times the environment changes are you in a higher low interest rate environment are taxes normal what’s available to you so what are your choices then going into asset allocations what investment might work the best for you in

The current environment you find yourself and the foreseeable future the past is prologue we may not be able to use what worked in the past we may have to take advantage of new trends opportunities threats and things that are going on currently and then eventually you actually make some decisions create the portfolio and then monitor and adjust from there so those

See also  Retirement Planning: 3 Investing Tips From a Financial Advisor

Are the basic steps of investment planning is investment planning art or science yes you can tell it’s a trick question it is both art and science if it was only science at this point artificial intelligence would already be taking over the world but there is emotion involved because there’s people involved and there’s humans and human behavior so you should

Learn your behavioral biases or emotions in this process because most investors would be significantly better if they understood how they relate warren buffett had a famous quote and he said be greedy while others are fearful and fearful while others are greedy what’s he trying to teach us he’s in his 90s he’s been doing this for a few decades he’s trying to say

There’s people involved in the investing process both the investment planning and the fine art and science of investing benjamin graham said the individual investor should act consistently as an investor and not as a speculator so what is a saver what is an investor what is a speculator all of these terms mean different things to each of us the bottom line is

Simply this you can be your own best friend or your own worst enemy when it comes to the art and science of investment planning have an advisor we can always offer a third party perspective are you a business owner you probably are or you have been or you may consider it in your future being a business owner is wise in this world because of the current tax codes

And situations living in the united states of america so if you are within the sound of my voice you might want to seriously considering being a business owner etsy business ebay consulting photography drones there’s so many opportunities and options out there that’s the good news significant tax breaks well worth your time and effort if you’re so inclined it’s

Not for everybody but if you’re one of those people that says i think i might want to try being a business owner there’s issues how do you start it up how do you make it profitable how do you serve customers how do you solve problems three things to consider in this process of being a business owner when it’s related to investment planning is succession you’re

Going really i haven’t even got the idea yet and you want me to talk about succession yes it’s that important to have that process done from day one so before you dive in do i need an llc and how am i going to be taxed and am in s corporation and what forms do i need and what’s an ein number and all the stuff we wrap ourselves around all important we’ll get to

All those in time but you need a backup plan in case of death or disability who’s going to sit in your seat if you can’t serve your customers succession this could turn into a chapter this could turn into a book if peter drucker did it it would turn into several books related to succession is who’s sitting in your seat or succeeding you is exit creating value

Exiting your business successfully whether it’s a small little consulting or whether it’s a giant business or you own multiple businesses the topic of exit is an easy word to say there’s a lot that goes into it so if you would like to discuss exit planning we may be able to add some value and some insights and make it a wiser world along the way and then value

Creation as a business owner every day you’re going to make decisions every day you’re going to help your fellow man and as you do that every decision adds a premium in other words increases the value of your business and your life or is a discount and just decreases that so that’s an ongoing process i wanted to make sure you had succession exit and value creation

Weaved through whatever investment planning you’re going to do that entails a business so the wise world investment planning overview on investment planning financial planning we’ve covered a lot today from comprehensive to simple to art science emotions people value creation you get the idea there’s a lot to this i wish i could say read a book in reader’s

Digest and do it on a weekend there’s a little more to it than that thank you for being part of this town hall as a lifelong learner and learning about investment planning in this first quarter of 2022 you

Transcribed from video
Wise World Investment Planning Q1 2022 Townhall By Wise World Investment Planning