Broker Check
February 2022 Newsletter - Revamp Your Plan

February 2022 Newsletter - Revamp Your Plan

February 25, 2022

"Real wealth isn’t money: Real wealth is not having to go to meetings, not having to spend time with jerks, not being locked into status games, not feeling like you have to say “yes”, not worrying about others claiming your time and energy. Real wealth is about freedom. Money can achieve these things, but there are plenty of people who make lots of money yet aren’t free” – James Clear

Dear First Mates,

Happy February Everyone! At the time of writing, Russia has invaded Ukraine and the markets are down around 10%. Let us all pray this ends swiftly with minimal suffering. Human tragedy definitely puts financial tragedy in perspective.  

Focusing on the financial side of things, I can think of no better time than now to get back to basics and revamp your financial plan. The financial plan illuminates whether or not you are on track to reach your goals. If you are not on track, no big deal. We just need to course correct!

First, what is a financial plan? A financial plan is a living, breathing document that should be frequently updated based on changes throughout your life. Life is hard to predict and it is currently impossible to know what will happen tomorrow, let alone years from now. Therefore, it is crucial to continue to re-evaluate your financial plan.

To help with this endeavor, I am excited to announce that I recently added Right Capital to my financial technology stack. I will use this software to revamp all client financial plans. Whether your goal is retiring, funding college for the kids, buying a new home, or determining if you have adequate insurance coverage - this tool will help answer “Will I Be OK?” 

Right Capital is an extremely powerful engine with its own mobile app available for download. My goal is for clients to eventually replace eMoney with Right Capital as their main financial portal. Why should you take the time to revamp your plan with Right Capital (and lil’ old me)?  

  • First, financial planning software like Right Capital allows multiple goals to intersect with one another. For example, if you would like to retire three years earlier than expected while sending your children to an elite college (which often can be very expensive) this software can illustrate the feasibility of those goals.

  • Second, this software can illustrate the likelihood of reaching your goals within different market environments. For example, what if the current situation in Ukraine causes the market to suddenly lose 30%? We can see illustrate this scenario to identify how this impacts your plan!

While reviewing your financial plan is the priority, here are 5 other things to complete in 2022!   

1) Discover your Rich Life

What do you want? What do you really want? I recently discovered the “How To Design Your Rich Life” mini-course by Ramit Sethi. The first step in designing or revamping your plan is answering the question: What do you truly want? Answering this question helps crystallize your needs, wants, and wishes. If you don’t have time for the mini-course, check out my Financial Purpose Statement newsletter and (or) this Master List of Goals document.

2) Update or create an estate plan

A core part of a financial plan is your estate plan. What is an estate plan? Your estate plan refers to documents that include a will, power of attorney, health care proxy, living will, and trusts. If you do not have these documents, please, create them with a qualified attorney. If you have them, but they were made more than 3 years ago or have since experienced a major life event– please, review them with your attorney to ensure they are in good order and up to date. 

3) Make sure your beneficiaries are up to date on all accounts and insurance policies

Any account with a balance should ideally have both a primary and contingent beneficiary(ies) on them. Accounts include a 401(k), 403(b), bank accounts, brokerage accounts, IRAs, and life insurance policies. If you can’t add a beneficiary to a certain account, make sure this gap is addressed in your estate plan documents.

4) Conduct a comprehensive insurance review

There are many types of insurance coverages out there including, health insurance, life insurance, disability income insurance, auto insurance, and property & casualty insurance. Make sure you are adequately covered at a reasonable cost.

5) Beef up your cybersecurity game (Bonus)

For online sites, be sure you are using strong passwords that are different for each site. For your phone and personal computer, make sure you are using proper anti-virus software, enabling Two-Factor Authentication, and, if possible, implementing a password management system such as Keeper Security, LastPass, or 1Password

Personally, I use Keeper Security and have found this to be an amazing time saver and internet security life-saver. 

Personal Anecdote: I went to the bank years ago to have a real estate investment form notarized. The banker needed a statement which I did not have on me. Using my password manager, I was able to log on my phone and email her a statement. If not for that tool, I would have lost hours to redo this task. And time is money! 

In conclusion, let’s shift our attention from the things that you can’t control, such as market volatility, economic shocks, and geopolitical events, to the things we can control. Let's cut out the meaningless "noise" that won't matter to your situation in the long run. Of course, I am here to answer any questions and most importantly - help you build your financial plan!!

P.S. Here is my YouTube vid o’ the month!

P.S. Here is my track o’ the month!

P.S. Here is my read o’ the month!

With gratitude,

David Warshaw, CFP®

If you really feel like a go-getter, check out “Your 2022 Financial To-Do List” by Christine Benz and this piece entitled “What Issues Should I Consider At The Start Of The Year.” 

If the markets are making you nervous and you need some strength, please read my newsletters “First Principles” and “On Risk.” You, unlike others, have a clear investment philosophy that we follow to a beat.