Think of the difference between the term “medicine” and health.” Medicine conjures up images of doctors, hospitals, operations, pills, nurses, etc. All of these things are transactional. You may have an operation and only know one person in the room. The assisting doctors and nurses have no relationship with you. You are simply buying their services.
How do you help your clients put money in its rightful place?
Think of the Charles’s Dickens’s Ebenezer Scrooge. Here is a guy who had lots of money but a miserable lifestyle. The ghosts of Christmas past, present and future showed him the errors of his ways. When he woke up on Christmas morning he had what we call holistic wealth. He valued his friends and family. His aspirations were more positive. Sure he had money, but he valued it more as a tool than a hoarding thing. I would guess that his ideology and his legacy were more valuable to him. Life is not just about money.
You’ve said that most of your clients are retired and living off their savings and investments. How do you help them do that with the crazy stock market we have?
What a retiree needs is a steady stream of income from their portfolio which hopefully goes up over time to keep pace with inflation. There is no guarantee than any strategy will work all the time. However in our strategy we combine three types of portfolios: one is a stable portfolio, one is an income one and the other is a growth one. Think of Neapolitan ice cream, chocolate, strawberry and vanilla. Mixed they are something different.
We mix these three flavors of portfolios to attempt to accomplish the client’s goal. Current cash flow comes from the stable portfolio. The interest and dividends from the income portfolios are paid out. The growth portfolio is allowed to grow and harvested when there are gains. It is a very fluid situation which requires insight and constant monitoring.
You are starting a question and answer column on this website. What can readers expect to see?
Some people are inundated by financial noise. Others don’t trust financial advisors and still others simply want to do it themselves. I did a questions and answer column for a local newspaper for 11 years. We had all sorts of questions. Sometimes people needed referral help. Others simply wanted to discuss a point or get confirmation. It is a very open forum and the answers are always in plain English.
It should be both fun and educational. I would like to thank WSBT-TV for asking me to do this for their viewers. It helps to keep me sharp and allows them free access for their financial questions.
These are the opinions of Paul Reasoner and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.
Compass Wealth Advisors, LLC is an advisor owned independent Registered Investment Advisory Firm. Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, FINRA/SIPC. Cambridge and Compass Wealth Advisors, LLC are not affiliated