Don’t Look At Us

Dec 18, 2020 | Economy, Financial Planning, Investing, Retirement

The Federal Reserve spoke this week.  What did they say and how will it affect your portfolio?  Plus, Oliver Norman joins Karl to discuss your financial reality.

Karl Eggerss:                      Hey, good morning everybody. Welcome to the show. This is Karl Eggerss and this is Creating Richer Lives the podcast. Thanks for joining me as usual, as this is our last show before Christmas. So we are finally getting to Christmas and finally getting to the end of 2020. If you want to get ahold of us, (210) 526-0057. Our website is creatingricherlives.com.

We still have that free report on the website, by the way, which is the 10 ways to increase your investment income. It is up there to download and you can get that information, so make sure you do that. And in just a little bit, we’re going to be talking about setting a realistic financial reality and what that looks like and how to do it. We’re going to have Oliver Norman, one of the advisors here at Covenant, he’s been on the podcast a few times before, and he’s got some great information for us and we’re going to ask him just what does that mean, setting a financial reality and then executing it? So stay tuned for that. That’ll be coming up in just a few minutes.

Very quickly, before we get to Oliver, who’s patiently waiting, I did want to talk about the markets briefly. We’re continuing to get news of not only vaccines and the approval process and continue to move that funnel and that channel forward, if you will. Now, we’re hearing about supply and who’s getting the vaccines, but that definitely has a positive tone. We continue to hear about fiscal stimulus, of course, which has been there for months and continuing to see economies recovering. But it seems like some of the good news seems to be fading a bit. And I think that’s why, really, when you have an overbought market like we have, and I’ve been talking about, you tend to get this lackluster reaction.

And again, if the markets can hold their own here, sometimes overbought conditions work themselves off through time. The markets don’t have to fall for them to become a good deal. They could move sideways for a while. There could be some rotation, but they don’t have to fall. But we have been extremely stretched and wouldn’t surprise me to see a pullback, but whenever we get a day, it seems like the next day we get some buying coming in. So it’s a very strong market. And again, overbought markets can remain overbought. I’m not the first to say that, you guys know that if you’ve been listening for a long time, and that can happen. So just because something’s gone up, doesn’t mean it has to come down.

But when things are stretched on a lot of the technical indicators we look at, you tend to get a pause. You might tend to get a pullback, but it can also be accomplished through time.

And again, most of the news this week was probably surrounding the Federal Reserve. And really what we heard from the Federal Reserve is that they’re not going away. And what I mean by not going away is they’re saying we’re going to be here until we are not needed anymore in terms of financial support, low interest rates, bond buying, they gave some specific figures this week. And I titled the podcast Don’t Look At Us, because that’s the message I’m getting from the Fed is, “Look, we need the fiscal stimulus. We’ve done our job and don’t look at us. We’re doing our job. We told you what we’re going to do, and we’re doing it and it’s helping, but we need some more help. We need the fiscal side to take over here.” And so, Chairman Powell begging for fiscal stimulus help.

And again, it’s coming at a time, remember it’s coming at a time when the economy recovery is slowing down. I’ve been talking about it for weeks and it’s continuing, we saw retail sales this week that were really bad, frankly. And so is that just a one hit wonder, or is it something that we should be more concerned about? Again, we need to keep the recovery momentum alive, and one of the ways you do that is this fiscal stimulus package. And it feels like we’re getting closer, but we’ve had this discussion for months, literally. So Powell said, “Hey, we’re doing everything we can, we’re not going anywhere. We’re going to continue to keep rates low.”

And so look, I agree with him. He’s getting a lot of praise for what the Federal Reserve did, but that was probably the biggest news of the week because some of this news with the vaccines, with Moderna and Pfizer, these are on schedule. These are doing what we thought they would do, as far as from the beginning of November. Once we got the first announcement, we started to get that chain reaction. So I’m not saying we knew this would happen in July. I’m saying we knew that this would happen once November came and they announced this, that this would be the natural progression. Of course, we know President Trump was pounding the table saying, “It’s going to come in 2020.” And indeed it has come in 2020, but it still can’t come fast enough for a lot of people.

So again, positive news from that standpoint and other positive news, but clearly investors are going to start focusing on this economy. Does it roll over or do we have some type of sustainability because of fiscal stimulus?

All right. As I mentioned at the beginning of the podcast, we have somebody that’s frequenting the podcast more and more often, because he’s got a ton of good information, one of my colleagues here at Covenant, Oliver Norman, good morning.

Oliver Norman:                 Merry Christmas Karl.

Karl Eggerss:                      It is, it’s coming up. This is the last podcast before Christmas. And you and I were chatting offline, and we said, we’re not going to do a podcast on resolutions. Everybody has resolutions, to lose 20 pounds, what have you. A lot of people have financial resolutions, I need to get a budget, I need to spend less. We know those. You and I though were talking about something that’s probably more important. And you mentioned it, you phrased it in a way that I really liked, which was people, if they have one goal for the new year, or one resolution, it should really be what? To define their financial reality, is that how you phrased it?

Oliver Norman:                 That’s it. Understanding your financial reality. I’ve had a number of people come up to me and Karl, when we’re talking about 2020, gosh, what a year of reflection, right?

Karl Eggerss:                      This wasn’t in anybody’s resolutions.

Oliver Norman:                 Oh man, yeah. And talking about reality, gee whiz. I think we’ve all seen things that we’ve never come across and we’ve never been here before. And what a great time to be thinking about this stuff, over December when we all have maybe a little bit more downtime and time with our families and reflecting on what’s important.

So that being said, what’s your financial reality? And as I was saying, it’s not until you get into the numbers when you realize, “Oh, I have more flexibility and financial freedom now that I’ve explored this,” and that’s a comfort to many. But also conversely, we’ve seen the other side where people may think, “Oh, I’m going to retire well ahead where I want to be. I’m going to be doing all this stuff. I’m going to be giving to my children. I’m going to be going and buying that second home,” et cetera. And the financial reality is just something quite different.

But either way, you need to face the bear and you need to marshall, and understand exactly what your financial picture looks like. And there are many elements to that.

Karl Eggerss:                      Yeah. And we do a lot of financial planning and the idea is not to get things down to the penny, because there’s always little tweaks here and there about returns, about inflation, about expenses, a lot of input variables that change, and it can change a plan. And life brings you changes, death, divorce, job loss, COVID, all these different things. And so for us, a good financial planner is somebody that walks alongside their clients every step of the way. So when there’s a curve ball, we modify.

But the very first thing we do is set that financial reality. And I like the way you phrase that because it’s, what’s possible here? What’s possible? Let’s get it in the guard rails, let’s see what mathematically is possible. And then let’s work on a plan to execute those different things.

I will give you another example of the other direction. So when we hear about financial reality, it has a negative connotation, what’s really possible here? Well, that’s not possible to do that because of the numbers. Another financial reality could be some clients I recently met with where the father/father-in-law was moving money out of his estate and setting up trusts for them and their kids. And it’s going to materially change their net worth and financial picture in cashflow going forward. This is a couple that has been fairly conservative with their money and watching the details and so forth. And now they’re having trouble comprehending what this money can do in terms of taking trips, what they’re really allowed to spend. So I said, let’s set that in motion, so we can see what those numbers might look like in the future.

And then, once you know what those numbers are, then we start setting goals of philanthropy, legacy, lifestyle, which is our tagline, not in that order. But the other thing I recommended to them Ollie, was to come up with a discretionary spending account. So this account, if it grows at the end of the year, great. If it goes to zero it’s okay, because we’ve built it into the plan and that can be a $20,000 trip, that can be a new purse, that can be given to charity. It’s whatever they want it to be, but they don’t have to worry about those dollars. And so it’s literally a monthly amount going into a checking account that’s not there for the bills. And you talk about a periodic

Karl Eggerss:                      Like spending account. This isn’t really that, this is more of a discretionary spending account that’s a slush fund. And they really liked the idea of, that would be great because we know everything else is moving towards our retirement and our goals. This is kind of our play money. And so I think when you’re looking at financial reality, it can be for good or bad, but you need a financial advisor to set those boundaries first to say, “Let’s be real here about good or bad.”

Oliver Norman:                 Absolutely. And Karl, let’s just widen it this thing. When we’re talking about financial reality, you may be okay financially, but again, pertaining to your finances, you might have a spouse who just doesn’t know what you have. They might not even be able to know how to log into your joint bank account if something were to happen to you. And it’s about facing that. No one’s… So there are some people who want to know how the clock works and there’s other people who want to know just what time it is, and that’s fine. But I think, on a basic level, there is a education there to be had for both you and also educating those around you to help them as well. So there’s a comfort there. So not just about, “Oh, well, how much can I or can’t I spend? Or what our objectives are for the next five years, et cetera?” But it could be things like, “I just want my spouse to know what we have and can get acquainted with our financial picture.”

Karl Eggerss:                      Yeah. I don’t remember if I talked about this on a podcast recently, but I met with a couple. Husband does very well and has free cashflow in his business and he’s kind of like, “I don’t really ever want to retire. This is fun. I’m doing great. And just want to figure out what to do with this cash.” But wife, I could tell by her body language and through some questions I was asking that she’s concerned that most of their net worth is tied up in this business. And what if he passes away and she’s left with no income and no savings outside of the company? And because it’s just him, the company doesn’t have any value, right? And so for us, we had to acknowledge. I told her, I said, “I sense that you are a little concerned about not having savings outside of the company. The company is worth something with him alive, but if something happens to him, that goes away.” And she said, “Exactly.”

So now what we’re doing is saying, “You can still have your company goals, but let’s take some of this money and start saving it in just a taxable joint account and filling up that bucket.”

Oliver Norman:                 Exactly.

Karl Eggerss:                      That solves her issues. So again, it’s not necessarily about math, it is about making sure everybody’s on the same page. And clearly this couple wasn’t. They just didn’t know that. They didn’t communicate that to each other. And it took an advisor to ask the right questions to get those things out of them. And now we’re saying what’s possible in the financial reality. So tell me when you say financial reality in determining that, what are the factors that go into getting that answer or getting those answers of a financial reality for one couple or one individual?

Oliver Norman:                 Well, for me, Karl, we’re in an incredibly privileged position because not only are we advisors, but we’re also teachers. So the ability to communicate sometimes complex ideas in simplistic ways is huge. So the real understanding for me is… The points, which you touched on are great, having everything backed up with a thorough and comprehensive cashflow, [inaudible 00:14:39] what so, how much? What do you have coming in? What can you spend? And I think about it as offense and defense, right? I mean, offense being the income, which could be potentially as far as you want to go, and then on defense, where can we save money? And then really three years from now, what needs to happen personally and professionally for you to feel like you’re making progress.

And like you said, honing those questions until you get down to a point where you can really put some comprehensive numbers and objectives and timescales to those objectives in a really good, powerful way, because the reality of it, Karl, is that we’re all pretty similar in terms of, well, we want to make sure our money outlives us. And a lot of people, if you have a family, you want to provide something for them, but we really want to try and see what does your picture look like overall? And then we can go into more of the specifics about where are the big gaps, which could hinder you making progress in those areas and as well as what can help accomplish either those objectives quicker or more efficiently.

Karl Eggerss:                      Yeah. And efficiently can be-

Oliver Norman:                 Or maximize it.

Karl Eggerss:                      Yeah. Or maximize it. I noticed you used the analogy of offense and defense. And I have a feeling that’s because in the Covenant Fantasy Football League, you’re number one currently, which is not a shock to anybody in the company that I’m hoping you’re not spending too much time doing these things, but what makes you so good at this fantasy football?

Oliver Norman:                 The truth of it is, Karl, I can divorce the names from the numbers, but coming from England, I don’t have the first clue. I don’t even know why it’s called a football. I still don’t. It should be called egg bowl, right?

Karl Eggerss:                      Egg bowl?

Oliver Norman:                 Yeah. There you go. Exactly. So I can divorce the names from the numbers, I will say as well, I love it. I love. For me, fantasy football is like the classic car that you’re always tinkering with. I love the draft. I love the planning of your team lineup. And most of all, and this is a big shout out to our fellow colleague and friend, Barry Bill. I love the negotiation. I love the negotiation. That’s one of my favorite parts. So yeah. They-

Karl Eggerss:                      Well, on a serious note, you attack that the way you attacked and attack family plans and looking at this, where you’re looking at this from this big picture view, and you’re saying, “Let me look at all the variables and all the situations, and we’re going to do the best we can with what we have here. We can’t make miracles out of some situations, but we’re optimizing, we’re making things better.” And that’s what you do with fantasy football. And that’s what you do with some of these families and doing some of the planning.

So when you think about this, when people first come in here, the Covenant, what we do is, obviously, ask a lot of these questions. And I like to ask questions such as, if you had six months to live, what would you be doing from a financial standpoint or nonfinancial standpoint? Because maybe we can start doing those things, even though you don’t have six months to live. And then we go the other way, what if you had all the money in the world, what things would you be doing with that? And those helped me get a little better idea of what people are, what their goals are, real goals, goals is a cliche word, but real things they want to do.

And so we had these conversations, but we also literally use our Covenant Wealth Central software to start populating the inputs. And you mentioned it, the offense and defense, right? We want to know the income, including future raises, supplemental income, we want to know the expenses, we want to know the assets, the liabilities. We put all that in, and then we can see with the clients, okay, we’re starting to narrow what the possibilities are here. We’ve done this long enough to know what you want isn’t possible or you’re not striving high enough. You can actually do a lot more than you’d think. And those are fun conversations.

Oliver Norman:                 That’s right. And Karl, I mean, typically, in our line of work, I would condemn these top six things that people look for is one, they want to make sure we understand their situation. Two, educate. Three, respect your assets. Four, solve your problems. Five, monitor their progress. And six, keep in touch. And that’s what we strive to do, but I like to go deeper than that and just say, “Okay, you came to us for a reason, what is the pebble in your shoe, so to speak?” On a personal note, about three years ago, for us, that my biggest thing was helping my wife just really get a good understanding of everything that we have. And also, I think it’s good to just, if you can get into the habit and we do this, like looking at your, am I making progress? What was my balance sheet like a year ago, five years ago? How are we making progress?

And the other thing is as well, and for those of you who are listening, who are clients, really, if there are questions that you have, and you really want to get educated, I really try and facilitate this, but even if it’s just right, Karl, I’ve got all these different accounts, how much can I contribute to each one every year? Because I think I’ve got a 401(k), but can I also do an IRA as well? I’ve got an HSA, how much can I put into that? Am I eligible for any of these accounts? Which one’s can I or can’t I do? And why not? I mean, those kind of questions are really just knowing the power of the vehicles that you have at your disposal is massive.

Karl Eggerss:                      Yeah. I mean, classic examples. In 2020 due to COVID, the CARES Act, individuals did not have to take out the required minimum distribution from their IRAs or inherited IRAs this year.

Oliver Norman:                 Yep.

Karl Eggerss:                      Some clients and one in particular called me and she’s said, “I’m just used to getting that, kind of it, at Christmas time every year. I know it’s not required because you told me it’s not, but can I still take it?” And I said, “Let’s do this. Why don’t we push it back to January 4th?” That’s not much different than getting it at Christmas time, right?

Oliver Norman:                 Yeah.

Karl Eggerss:                      But what it is big is we don’t pay the taxes on it this year. And at the same time, we satisfy potentially next year’s required minimum distribution. Now, we don’t know the exact amount because we don’t know the 1231 balances, which is based on, but we’re going to be real close and we can always settle up. But the point is, is that all I did was move that distribution back about two weeks, and it’s not going to change her life, but she’s going to get the money and she’s going to have to take it out next year, anyways, more than likely. And she doesn’t have to pay taxes on that money this year. She wouldn’t have thought of that little mini strategy on her own. And so again, that’s knowing that having these conversations with clients and I think that’s where your… We’ve already done the financial reality part of her life. This is about the optimization

Oliver Norman:                 Yeah.

Karl Eggerss:                      … and minimizing taxes, and all of those things that come along with that.

Oliver Norman:                 Yeah, and Karl, just again, wide netting this thing, and there’s going to be different financial pictures for each of our listeners out there. I mean, just familiarize yourself with the basics. I mean, Dave Ramsey’s financial piece is a great place to start, the seven baby steps which he talks about if you’re … even if you’re blown past and you’re already on step seven and accumulating your wealth and everything’s great, as part of this, please tell others about it, because I’m sure there may be family members who need this kind of assistance. So that’s certainly one place, but again, getting specific Karl, there’s never been a better time to get a command of your finances. The reason why is because often, when you do New Year’s resolutions and it’s like, oh, I want to make better nutrition choices or health choices, it often requires … well, it does require ongoing maintenance every single day. Am I going to eat this? What am I going to do? Do I need to go to the gym every day?

Karl Eggerss:                      Which is why people don’t stick to their … they don’t accomplish their financial resolutions. It’s because by August, they’re not sticking to it. Very, very similar when it comes to their finances.

Oliver Norman:                 Right. Exactly. But the beauty is with finances. Karl, is we can automate a heck of a lot of this stuff. Just imagine if Q1, you said right, for the first quarter, by the time the end of March rolls around, that 529 plan, which I’ve been meaning to set up for my grandson, I’m going to do it. I’m just going to get his social security number, and I’m just going to log on. It’ll take me 10 minutes, and I’m going to automate a payment. Away I go. Done. Next thing I’m going to do is just automatically review my retirement savings. I’m going to set up that automatic contribution to the HSA. That’s all my savings vehicles taken care of for this year. Done. Right, next thing I need to do is make a list of where everything’s at for my spouse. Done. It doesn’t have to be hard, and you can accomplish a heck of a lot in a short space of time.

Karl Eggerss:                      Well, and most people, I mean, we know most people use the standard deduction nowadays. But on January 1st, most people should know, within reason, what their financial picture is going to look like for 2021.

Oliver Norman:                 Yeah. That’s right.

Karl Eggerss:                      Right? Again, I say most people because you could lose a job, right? There’s things that pop up. I’m not saying it’s all perfect. I’m just saying most people get a W2. You know what your raise was. You know what your bonus was in the past. So you can assume those things going forward if you have a steady job. You know the income side, the offense as you put it. You know the defense, if you go back and do some analysis on what you spent the year before, and was there any extraordinary items. So you can put that together.

Then when you say I’ve got free cashflow of X, let’s say $30,000, now you can start figuring out where does that X need to go? Yes, my 401k is included in there. I’ve got 529s to fund. Put those on autopilot, as you suggest. Now you’re set up for the year and you have your rainy day fund, so that if it doesn’t go the exact way you thought it would, you can modify. But yes, you can do a lot of the planning in the first week of January. You could do a lot of the planning right now for the most part.

Oliver Norman:                 Oh exactly. Karl, that’s the point. A new year may be enough to ignite behavioral changes in your life, but it’s not enough to sustain it. Real change takes time, planning, action, and support. That’s the reality.

Karl Eggerss:                      Yeah. Oh, effort, right? I think about … I always, for various reasons, think about Dennis Rodman, who was a crazy character, of course, but he built a career on hustle, period.

Oliver Norman:                 Yep.

Karl Eggerss:                      He was very athletic, but if he did not hustle, he would have not even made the NBA. He certainly wouldn’t have stayed in the NBA, but he built his reputation on defense rebounds. That does not take skill. It takes repetitions and hustle.

Oliver Norman:                 Discipline.

Karl Eggerss:                      Yeah, discipline, and that’s what he did, and so that’s the part that everybody can do. We can pay attention to our finances more. It’s not about my count went down 2% this month, or up 3% next month, and what’s the next battery technology stock? It’s not about that. There’s so many other factors that go into play here, but you’ve got to take this thing. You got to control it. Otherwise, it will control you.

Oliver Norman:                 Exactly. Karl, the other thing is about New Year’s resolutions. We often think, what are we going to do? What are we going to do? What are we going to add to our plate? Also, don’t forget to flip it and say, what are you resolving not to change? The date night with your spouse, the getting up early each morning and having your quiet time, or going to the gym everyday. What do you not want to give up as well? That’s just as important too.

Karl Eggerss:                      The donuts.

Oliver Norman:                 There you go, exactly.

Karl Eggerss:                      I’m not giving those up. I’m not giving up eggnog, even though it’s not available all year round. I mean, those are the things I’m just not giving up on. Now, I have to balance that with the gym, but certain things I’m not giving up.

Oliver Norman:                 Exactly. Yeah, so just being aware of how things make you feel as well. I mean, another one is the classic tax return, right? That big dark storm cloud that gets closer and closer throughout the early part of the year. You know what, that was stressful. Let’s just say, oh, that was really stressful for me last year. What can I do just to make that a little bit easier? Right, I know where my W2’s are issued. I know when my 1099 are coming out, etc. What can I do for me and my family not to make that as stressful?

Karl Eggerss:                      I don’t know if you can answer this. I don’t know if I could answer this, but how often do you meet clients as a percentage maybe that their financial reality is very different than their perceived reality of their finances, right? Where you look at it and say, your goals are way off. There’s no way you can achieve that. Or again, as I said earlier, you should be spending more. If you want to spend on lifestyle and not leave it to the next generation, you can afford to spend more.

Oliver Norman:                 Typically, Karl, as a percentage, it’s hard. Every so often, and there’s degrees, right? I mean, there’s the person who says, “I mean, I’ve done a great job. I’ve got my social security and I have 25,000 in the bank, and I’m good.” They rarely come across. I rarely come across to them typically, because normally, someone knows that there is an issue when they come to us. There’s something. There’s a reason why they’ve come to us, right? Th some embracing of a reality. No one calls me up just to say, “Hey, Ollie, I’m good. Bye.” You know what I mean? [crosstalk 00:29:15].

Karl Eggerss:                      Yeah. It is usually a trigger event, a life event. Some of them start with these, as we’ve said, but there’s lots of things, a liquidity event where people have sold a business. There’s something triggering that typically. What we’re seeing a lot of actually right now is there’s trigger event that’s not necessarily their trigger event. It’s from the government. People are concerned about tax law changes on the income side, the estate tax side, and so a lot of questions. A lot of people coming to us right now saying, “What do I do here?” I mentioned this situation earlier. If somebody’s setting up all these trusts, it’s an advance of potential estate planning or tax law changes coming down the road. So that’s an event that could trigger somebody to come see us. It’s not just something in their own life.

Oliver Norman:                 That’s right. Where I do see sometimes, Karl, is either a heightened level of exuberance. So someone saying, “I want to give so much to my kids.” It’s like, okay, right. Well, if we do that, and that’s irrevocable, what’s the long-term impact on your finances, and oh, and what if you needed to go into long-term care, for example, or requiring home nursing care? Well, that could be a significant impact as well. I think it’s thinking these things through, and it’s a dialogue. Sometimes the answer might be not a no, but a not yet. Often, you need that counsel just to really just add balance to that conversation, or at least another perspective. So that’s where I’ve often seen it come into play.

Karl Eggerss:                      Well, that’s what I was going to say, the other perspective, because again, a lot of stuff we do is math and formulas, but it’s the conversations. It’s our experience with several other clients that have been in those client’s shoes that we can say we’ve seen this several times before, and here’s what we did about it. They go, “I didn’t think about that.” It’s the experience we have, not just ourselves, but with other clients in their same situation, and talking through that, that’s a big part of having a financial advisor. It’s, there’s so many people that believe, unfortunately, that having a financial advisor means somebody that’s selling them products, right?

Oliver Norman:                 That’s right.

Karl Eggerss:                      It’s, number one, they shouldn’t be sold any product, number one. Number two is that it is about these conversations and really knowing your clients where you’re anticipating things like, for example, when the CARES Act came out and they said, “No, you do not have to take a required minimum distribution this year,” I already knew which clients were going to need it because I knew their situation, which ones did not need to take it. I mean, I had those conversations where I say, “Here’s what I’m choosing to do. You tell me if I’m wrong,” and they’re like, “No, no. You know exactly right.” So it is knowing your client and having that relationship.

Oliver Norman:                 That’s right. I mean, I also remember one scenario, which I was in. A client who wanted to purchase a business, and they were so excited and they rattled off 12 different reasons why they should purchase this business. I listened and there were many, many great points, and I just asked the question, what could go wrong? They paused for about 30 seconds. I was like, “Oh, well, I suppose there could be this, this and this.” Again, it’s not necessarily just giving you a final verdict automatically, but just helping others realize their emotional and practical sensibilities to things as well.

Karl Eggerss:                      Well, yeah. People tend to lean, right? Either they’re the world’s always half glass empty, or task half glass full. For you, you said, okay, this is somebody who always sees the positive side.

Karl Eggerss:                      … and

Karl Eggerss:                      What could go wrong was your question, and it made them think differently. Sometimes Debbie Downer, “The world’s ending, blah, blah, blah. I don’t have enough money,” and you’re saying, “No, I’m showing you the math. You have enough money. You can do this. Let me show you how the glass is half full. What could go right?”

Oliver Norman:                 Yeah. Exactly, exactly. And my proclivity, Karl, I’m very much a glass half full kind of guy. What are you?

Karl Eggerss:                      Honestly, I believe that I’m probably would err on the half glass empty side, if I had to really be truthful with myself. I’m a measure twice, three times, cut once type of person for sure. And it’s interesting because in 2020, I think those were exposed, and I’ve had to control myself where there’s negative headlines regarding COVID, elections, all these things. I’ve had to say, “I know through my history that most things aren’t as bad as the people fearing it are or as good as the people are saying completely ignore it are. It’s somewhere in between.” So I really try to be fairly level-headed with a lot of things, but I can tell you this, it takes me having conversations with other people sometimes to get that out.

No different than you with your finances. And again, when you have a couple, they may have different experiences or different philosophies, but they sometimes feed off each other in a negative way or an unrealistic way where their financial reality is out of whack because it’s kind of like, “Hey, I’d like to get that… We should have a lake house.” And it’s hard for the other spouse to say, “We can’t afford it.” Right? The other one’s saying, “You sure we can afford that?” And the other one really wants it, and so they’re trying to justify it. And all of a sudden you have two feeding on each other through pillow talk of, “Hey, let’s do this.” “Yeah, let’s do this.”

And the advisor’s going, “I’m sorry, that’s a 2023 goal. It’s not a 2020 goal. It’s just not. The financial reality is you should not do this right now.” And we’ve had those tough conversations before, but sometimes a couple can feed off of each other because they both want that. And they kind of ignore some of the… They don’t have the two people on either side of the equation or either side of their shoulder arguing both sides of it.

Oliver Norman:                 Exactly. That’s good.

Karl Eggerss:                      All right, Ollie, any last words on the setting a financial reality for 2021? Anything else that we did not cover? And if the answer’s no, that’s fine. I think we covered a lot and hopefully some things to think about because these lists of I need to have a budget for 2021, I need to lose weight, I need to spend less and earn more, those should be on auto repeat. That’s not what we’re talking about. We’re saying really get a hold of your finances, grab it by the neck, see what the situation is. And as you said the monitoring, the executing.

Oliver Norman:                 Absolutely. Don’t be paralyzed. And just, you don’t know what you don’t know. And there is no shame in leaning on people, lean on us, call us up.

Karl Eggerss:                      Well, if you lean on people though, you have to do but with six feet of distance though. Right? Am I correct?

Oliver Norman:                 Very good, Karl. Again, I’d just say real change. It just takes time, planning, action, and support. And certainly the good news is that you can get a lot done very quickly and a lot can change within three months. And certainly we can help with that.

Karl Eggerss:                      Well, and again, if you, I mean-

Oliver Norman:                 Sorry, that came across really cheesy, didn’t it? We can help with that. Yeah. Sorry.

Karl Eggerss:                      Hey, we can. I mean, if you have a financial advisor and you have all the tools that we have available to us, it can be done fairly quickly. It can be done. When you rely on yourself and you don’t have the technology, you don’t have, frankly, have some of the answers and experience, it does tend to draw out much further than it should.

Oliver Norman:                 Absolutely. Yep.

Karl Eggerss:                      So yes, we can help. Creatingricherlives.com, creatingricherlives.com (210) 526-0057. That’s it. All right, Ollie, you have a great Christmas.

Oliver Norman:                 Karl, very quickly before we go. What are some of your personal New Year’s resolutions? If any.

Karl Eggerss:                      I’ve never done them.

Oliver Norman:                 Really? Okay.

Karl Eggerss:                      Nope. I look at it like New Year’s resolutions is like, okay, the calendar flipping. So what? It’s like Valentine’s Day. “Hey, I’m going to really love you today. We’re really going to have a date and we’re going to… Because it’s February 14th.” So? Why don’t you just do that all year long? So, that’s why I don’t do resolutions. The worst holiday of the year is New Year’s Eve. The calendar flipping means nothing to me.

Oliver Norman:                 You’re a good lady, Amy, Karl’s wife.

Karl Eggerss:                      She’s filing the paperwork as we speak. All right, Ollie, well have a great Christmas. It’s been fun this year. We’re going to have you back on obviously next year and you guys have a great Christmas. We will be doing a show next week, but this is our last show before Christmas. So Merry Christmas everybody.

Oliver Norman:                 Yeah and Karl, big shout out to you as well. I mean, you faithfully deliver these podcasts and there’s a lot of great information and, excluding myself, you have a lot of wonderful guests on, and I thank you for what you do and yeah, appreciate you.

Karl Eggerss:                      Thank you. It’s my favorite podcast. Take care everybody. Have a great weekend.

Speaker 2:                          Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, including the investments and/or investment strategies recommended or undertaken by Covenant Multifamily Offices, LLC, Covenant, or any non-investment related content will be profitable, equal any corresponding indicated historical performance levels, be suitable for your portfolio or individual situation, or prove successful. Moreover, you should not assume that any discussion or information serves as the receipt of, or as a substitute for, personalized investment advice from Covenant. To the extent that a listener has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with a professional advisor of his/her choosing. Covenant is neither a law firm nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of our current written disclosure brochure discussing our advisory services and fees is available upon request or at creatingricherlives.com.

 

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A Simple Way To Stay Disciplined

A Simple Way To Stay Disciplined

The financial markets continue to move and with that investors may have a portfolio that doesn’t match their goals. Karl Eggerss was on the Trey Ware Show discussing a simple technique for staying disciplined.

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