July, 2022 | Live a Life By Design

The Elusive Measure of Time

Posted on July 22, 2022July 22, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

One of the curious hobbies I enjoy is reading grave markers when attending a funeral or during a day of honoring our loved ones. My wife often remarks, “What fascinates you with grave markers?” I often smile and simply say, “time”. She looks at me with that look of confusion she gives me and walks back to the family and friends we met while visiting the cemetery.

The primary fascination for me is not simply the design and epitaphs engraved on the stones but rather the dates and the dash between birth and death. This simple mark represents, in some cases, only a few years. In other cases, it represents a century or more. In my journals, I often wax philosophically about time and its power.

Time is an element of life that is studied by physicists and cosmologists that continues to be a mystery to this day. There are many theories about the beginning of time and the passing of it. However, my focus on this powerful environmental phenomenon is the use of the tool. Yes, to me, time is a tool or power that can be wielded in great ways. Conversely, time can be squandered by those who don’t understand its power or their ability to control it.

What is important about time and why write about it in a financial column? When something as powerful as time is not recognized by many until its too late, it would behoove us to begin today with an acknowledgement of all the wonderful attributes and uses of this facet of life. First, time is the creator of all memories for humans. My father, a great storyteller of our family’s history, always starts a story with, “when I was younger…”. Hearing this opening sentence piques my mind and perks up my ears for another great tale of the Williams Family and potential joys and hardships of pioneer life. (As a side note, I am laughing while writing this column as thoughts about my father’s stories of his six mile walk to school which always included unusual terrain like “uphill both ways” and meteorological phenomena such as “in a foot of snow”.)

Second, time is a power that yields exponential benefits. When it comes to investing for your future, you have read many times in this column that time is the one factor we can’t control but can utilize to achieve greatness. A favorite song of mine as a teenager (this may reveal my age) was called, “Time in a Bottle,” by Jim Croce. The songwriter imagines what he would do if he could capture time and use it with his own discretion. Of course, he is dreaming and the song is pure fiction but the writer’s life ended abruptly at the young age of 30 when a single-engine plane in which he was a passenger hit a tree on take-off in 1973. Truly he did not control time or he would have wished for longevity.

One of the benefits of time is the growth of money. By starting to save as young in age as possible, one has the potential to accumulate a significant investment portfolio by retirement age. For example, if you initiate your lifetime savings plan by age 25 and save for the next forty-two years, you will have saved a considerable amount of funds, if invested properly, to retire at age 67. This is called compounding of your investment. What you invest today will, theoretically, earn interest that will then earn interest on itself which compounds or builds your savings at a greater pace as time passes.

Lastly, time is finite for humans. No one throughout history has lived since the beginning of time. Each of us will one day be remembered by the dash placed on our grave marker. This is not meant to be a depressing statement but rather one to empower and motivate you to live a life of abundance creating memories and assets. Your dash can be as powerful as the dash of presidents or celebrities such as Elvis Presley. The world is waiting, and was established, for you to contribute to society for the purpose you were born.

Starting today, smile more, laugh more and serve more to create a story your ancestors will be proud to share of the life you lived with fullness. To help you plan for the future, contact a CERTIFIED FINANCIAL PLANNER^TM professional. Your legacy and lifetime fulfillment are in your control. It is time you made a plan to utilize and harness the time in your dash to become a bigger, better and bolder you. See you on the walking trail!

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Thriving in Volatile Markets

Posted on July 7, 2022July 7, 2022 by Jimmy J. Williams, CPA/PFS, CFP®

Do you dread challenging markets? Do you break out into a cold sweat when your investment statement arrives in the mail? Many of us don’t understand the positives, yes, I said “positives”, of the opportunities that present themselves in volatile markets. Retail investors exhibit several common traits. First, they typically like to “buy high” and “sell low” based on fear and not sound research. Second, their idea of diversification is to own several different accounts with a myriad of investment positions in each one. This is not only a complicated method of living but fraught with issues such as investment overlap and possible sector concentration.

A better method of achieving your long-term investment goals is to develop a plan of investing that does not change with market cycles. This type of approach will serve you well in the long-term since you are dollar-cost averaging by investing each month (or some predictable cycle). In a market expansion, your constant investment amount will buy fewer shares or units of a particular investment. However, in a declining market, such as the one being experienced in the United States at this time, your consistent investment amount will buy more shares of a particular investment due to the lowered buy price.

Dollar-cost averaging doesn’t guarantee success of your portfolio but it does utilize the natural market cycles to help you achieve a potential lower average cost in the shares/units you purchase over time. For example, if you are investing $1,000 each month in your portfolio and the shares are $50.00 each, you may buy 20 shares during the month. However, if the market is declining and shares are now $40.00 each, you may buy 25 shares during the period. Over time you may experience a lower average cost of investment in each share.

In our previous example, assume the investment is a company that has a history of paying excellent dividends and has weathered many difficult business cycles. The company’s management gives you confidence that it will, once again, keep the company moving in a positive trajectory despite the economic hardships. By focusing on facts and not emotions, the probability that you will achieve your investment goals is much greater. Remember the quote from the “Oracle of Omaha” Warren Buffett, “If you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes.”

I understand it is difficult and takes great courage to weather some of the more difficult economic cycles the United States has suffered. However, remember that you will be using the totality of your investments for supporting your lifestyle in retirement and it took you many years to accumulate the funds. One or two negative market cycles will give way to more positive cycles at some point. The future isn’t hard to predict if you create it yourself.

Establish your investment plan based on sound logic and economics. Don’t attempt to time or “outsmart” the markets. Many bankrupt individuals have attempted these approaches. If you have questions on establishing an appropriate strategy for your lifetime accumulation of retirement funds, contact a CERTIFIED FINANCIAL PLANNER^TM professional. The best counter to emotional disruption during a negative market cycle is to think long-term and stay with the plan you developed. Now, go out and enjoy your day. You got this!

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Young & Investing

Posted on July 1, 2022July 1, 2022 by Shelby Heflin

Have you ever thought about what all your smartphone can actually do for you? Generation Z, also known as Gen Z, has taken full advantage of the services it has to offer. Gen Z is now using social media and online search engines to get their finances in order. Recent studies found that fifty four percent of Gen Z holds at least one type of investment, including mutual funds, exchange-traded funds, or even cryptocurrency. These same individuals have also learned how to control their cash flow, cut unnecessary expenses, pay their debt quickly, and even how to raise their credit score. Although these are all topics that should be learned at an early age, this is not always the case.

Gen Z has shown that they are working hard to be financially satisfied and are using technology to make it happen. Social media apps such as TikTok and YouTube have become everyday life coaches for almost everything, including finances. According to a recent study conducted by Qualtrics on behalf of Credit Karma ¹, 56% of Gen Z and Millennials intentionally seek out financial advice online or through social media. They have introduced many opportunities that Gen Z were unaware they even had.

When you get your first adult job and start making adult money, but there is no one to guide you on how to spend it, you quickly realize that you may need some help. If you are already having money trouble, you clearly cannot afford to seek help that may cost you more money. Someone along the way realized this and started sharing how to be financially successful on your own. Financial professionals now give advice on online platforms for free. Not only is this information helpful, but it also in small bits and easier to digest. Most of the time it is even entertaining. Research shows that 38.8% of Gen Z have learned about personal finances through TikTok, YouTube, or other social media platforms and 7.2% said they did their own research online. Only 22% stated that they had learned from their parents or another family member.

The best part is you can do all these things you are learning from the device you are learning them on. There are many apps that help budgeting, paying bills on time, and keeping track of your credit score. You can now even open an investment account directly from your smartphone. All you have to do is download an app, add your information, and deposit your funds. They make it too easy! From there you can personalize all your investments. Although the account is easy to setup, actually investing and managing it is another story. So, how are they choosing their investments?

Yep, that’s right. They use what they have found on their online platforms. Gen Z takes information from strangers to manage their investment portfolios and doesn’t even question it. That does not mean that they do not care though, Gen Z tends to be very hands-on and active in their investments. According to an article on Nasdaq.com, 48% of Gen Z investors check their portfolios multiple times a day and 24% check their portfolio at least once per day. Unlike generations before, Gen Z has taken it upon themselves to do research and find their own way to earn money. This has been much easier and hands-on since technology makes it all possible.

Starting to invest at an early age only means you have room for more risk and growth. As their account grows and they feel like it has outgrown their knowledge, they will be financially stable enough to seek professional help, such as a CERTIFIED FINANCIAL PLANNER^TM. The convenience of technology has made becoming wealthy a bit easier and so much more convenient.

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