Joel’s Published Column

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The “New” New Year’s Resolution

I was just reading an article on huffpost.com, that by Valentine’s Day, 92% of all New Year’s Resolutions have been broken. In light of that statistic, I thought it would be valuable to send out an encouraging word and some thoughts that may help you get back on the horse and finish what you’ve started.

I applaud New Year’s Resolutions

Any time someone wants to change, better themselves, create new behaviors – I’m all for it! Craig Groeschel, one of my personal all-time favorite pastors, states that “successful people do often what unsuccessful people do occasionally.” In our instant gratification society, we have a very difficult time with small, incremental changes. During that first week of January, we hop on the treadmill three times, eat healthy, then step on the scale the following Monday, see that we’ve actually gained a pound and lose our minds. We scream “this doesn’t work!” and head to the fridge to eat a half-gallon of ice cream.

Before we set any “new” New Year’s Resolutions

I want you to try something different. Instead of focusing on the goal for yourself, like losing 20lbs or getting out of debt, focus first on who you want to be. Once you’ve determined that, you can start to change your decision-making process. Here’s the trick, you have to make all future decisions based on you actually being that person. Here’s an example: If you want to be a healthy, fit person who feels great about themselves, you have to start by believing that you are that person now. The sum of all of your past decisions had formed you into who you used to be.

The person you ARE is constantly being created

Once you have decided who you want to be, you can start making decisions based on who you are becoming. I know it sounds a little “new-ageish,” but the mind is in control of your decision making and you have to retrain your mind to realize that you have already changed. Once you grasp this concept, you will be able to see the world and view your decisions through your new lens.

Let’s say you’re a smoker and your New Year’s Resolution is to quit. When someone asks if you would like a cigarette, don’t answer, “I can’t. I’m trying to quit smoking.” By speaking those words, you are admitting that you ARE a smoker and training your brain for failure. When someone asks you if you’d like a cigarette, you answer “No thank you. I don’t smoke.” You see, the OLD you used to smoke, but that isn’t who you are anymore.

Remember, even though the first step to succeeding at making meaningful change in your life is to shift your mindset, don’t be discouraged if you don’t see instant results. It is the million little changes you make that will achieve the long-term difference. You didn’t gain 30 extra pounds, get into financial trouble or sabotage your relationships all over night. Getting out of debt, getting back into shape, having better relationships will take time.

Successful people do often, what unsuccessful people do occasionally

State who you want to be. Write it down. Believe it is who you are … and repeat. This is one recipe for making meaningful, long-term change and keeping those New Year’s Resolutions. I know it’s the middle of February; but that means there is a 92% chance that you’re in a great spot to make your “New” New Year’s Resolution.

Experience Matters: Get an Internship!

Many of the articles I write for our My City Readers relate to an older generation of investors and are often not applicable to the younger generation. This article is a departure from the usual subjects, but in the end pertains to the financial world in that it offers advice for achieving success in a future career.

As the job market has been red hot as of late, we have had the opportunity to work with a few different college students in different capacities. A common theme has emerged with our most dynamic and successful student interactions. Experience in the field that they are attempting to enter post-college gives them a significant advantage above other students entering the same field.

The Intern’s Journey

Looking back at my internships in the financial world revealed to me how they guided my path through my college and career. While I was a sophomore in college, I attempted to get an internship with Merrill Lynch. I was practically laughed out of the building. When I had inquired about the internship, I was dressed in khakis and a polo shirt. I had no idea that a suit and tie was a requirement, even when just poking your head in to inquire! This was just one of the things on my long list of educational tips that my internships eventually taught me.

A few months later, I landed an internship with a friend-of-a-friend’s father, who owned his own boutique financial planning firm. This was not a paid internship, but it got my foot in the door and what I learned about the financial industry with Dean Oliver as my mentor, was priceless.

The next spring, I was able to secure an internship with Smith Barney (now Morgan Stanley). This was a minimum wage-paid position, and I gained even more insight into the field that fascinated me. The following winter, I was able to leverage these two internships to apply for a full-time personal banker position at Huntington Bank, which allowed me to become fully-licensed in securities while I was still a senior in college.

After a few years working for the bank in their investment company, I was able to get a full-time financial advisor position back at Smith Barney. In 2009, my wife and I started our own financial planning firm, LaGore Wealth Management. Lastly, in 2012, I rejoined my original mentor Dean Oliver, forming Oliver LaGore VanValin Investment Group.

Transition to Employee

Being successful in the transition between student to employee can be quite arduous. If you are currently a college student, I can’t stress enough the importance of getting experience in the field that you wish to enter. There is no easy road to securing employment, but showing potential employers that you have the discipline and dedication to study their industry, is a great place to start. It may be difficult finding an applicable internship for your field, but volunteering, as well as accepting an unpaid internship, may very well provide you with the experience you need to start your climb up the corporate ladder.

The New Year has just begun

Start 2019 off right by searching for your summer internship program. Employers will be impressed by your forward-thinking and ability to plan ahead. No one is going to care more about your future than you do. Happy New Year!

So the Mid Terms Happened . . .

So many investors are asking, “What’s going to happen after the midterm elections to the markets and the economy, if the Democrats take back the house?” Although I had to return my crystal ball to the store (because its past accuracy has been sketchy at best), I’d still like to offer my opinion. So, here are my guesses:

First Guess – I think the Democrats have a very good chance of taking back the house for two reasons. First, there are over 30 Republican congresspeople retiring, which takes away the incumbent factor. Second (and this is totally, 100 percent my own opinion), I think that female Democratic voters between the ages of 21-45 are going to show up at the polls in droves to ensure that their voices are heard, and that a repeat of the 2016 election doesn’t happen. I think this demographic could run this election. Historically, midterm elections are boring and hardly anyone shows up, when compared to general or presidential elections. This one could be very different.

Second Guess – I think the economy is moving along at a very fast pace and this is going to continue through the end of the year, no matter who is in charge of Congress.

Third Guess – If the house goes back to the Democrats, Trump could view this as an opportunity to become the most effective president in history.

Please, follow me down this rabbit hole … Trump has used the Republicans for about all they were good for – corporate tax reform. He tried healthcare reform and had no success, so he knew he had to get something done with the current Congress. President Trump has already announced that he wants to do an even bigger and better infrastructure spending bill than President Obama wanted to do – a spending bill that the Republicans are by no means going to allow him to pass. He wants this infrastructure spending bill because he knows it will continue to goose the economy and spur even more hiring. I believe President Trump could very well run the entire Obama playbook with a Democrat-run Congress. I could easily see him attempt to negotiate with the Democrats for his massive infrastructure spending bill, by giving them the ultimate in Democratic desires. He may be willing to give them universal health care, immigration reform and common-sense gun control, in return for his infrastructure spending bill (which, of course, includes his wall).

So, to answer the question “What’s going to happen after the midterms?” I think the economy will continue going great; but, next year is going to be a year of massive volatility. Spending may start to slow after the initial spending frenzy due to corporate tax reform. Once President Trump completely turns on his party’s policies and starts working with the new Democratic House, the economy could pick up again and we could see “1990’s-like” economic growth during the 2019-2025 timeframe. This could be one huge economic party if it plays out at all like I think it could. Bottom line: Stay diversified and stay invested. It’s going to be a bumpy ride! Remember, tough markets don’t last – tough investors do.

“The Balancing Act”

As we enter Michigan’s beautiful fall season, we remember that it is the uniqueness of life’s seasons that create opportunities for us to reflect on our experiences and learn from our past. There is a time for everything: Ecclesiastes 3 of the Christian Bible reiterates exactly that. “A time to be born and a time to die, a time to plant and a time to uproot, a time to scatter stones and a time to gather them.” As a financial planner I will add one of my own – a time to store and a time to use.

When evaluating a retirement plan or a wealth savings plan, people tend to focus on maintaining the standard of living they had while they were engaged in the workforce. This can sometimes be very difficult, because they are no longer generating income and solely relying on their retirement income and savings. This becomes a delicate balancing act as we transition from the season of work into the season of retirement.

A time to store

Some investors have done an amazing job of living within their means during their employment years. Typically, this allows for them to aggressively “store” their money in many different savings vehicles. What is very interesting about these savers is that some have a very difficult time when it comes to spending their assets for enjoyment during retirement. They have lived in such a way during their working years to save for retirement, that they have developed habits of not spending. This makes for an exemplary financial client; but it doesn’t always make for the retirement they’ve planned.

A time to use

I encourage potential retirees, especially if they are married, to sit down with their financial planner and really map out their joint vision of retired life. The “balancing act” that ensues during retirement is that of living for the now and experiencing life to the fullest, while also planning for the future. Hiking the Grand Canyon is something that can be done by many 65-year-old retirees, but can become a big challenge for someone age 75, and almost an impossibility for people in their 80s. Make sure you plan to take your trips while you can still enjoy them. This is the time to “use!”

If you are a “storer” who hasn’t transitioned into a “user,” well, there are two things I would urge you to do. First, call me for a meeting, because the chances are good that you would make a wonderful client (just kidding). Second, really think about the assets you have left, the time you have left, and the family you have surrounding you. If you are 75, and have a sizeable portfolio, you could have about 7-9 years left to enjoy your hard-earned wealth. Spend this time using the money to create experiences and memories with your children and grandchildren. The old adage, “you can’t take it with you” is very true, but you can leave a legacy of love and generosity. A time to store, and a time to use … work with your financial advisor to develop your retirement game plan. It will be time well spent.

Saving for That “Rainy Day”

Well, it happened … in August, I turned the BIG 4-0! Honestly, I’ve kind of felt like I was 40 for the last ten years, so it’s really not much different. One thing that this old man has noticed lately is “Help Wanted” signs posted just about everywhere. As the economy officially printed its second quarter GDP at 4.1% according to the Bureau of Labor Statistics, and the official unemployment rate is wavering between 3.8% and 4%, it seems like even local McDonald’s restaurants are looking to hire at above $11/hour. Bank tellers I’ve asked are starting at $12/hour and more seasoned vets are now making $15/hour. Employment demand is outpacing people looking for work and it is resulting in average wages starting to make notable increases. This is a good thing, being that it has felt like wages really haven’t moved in about a decade!

I’m not writing this article about how well the economy is doing; I want to focus on what folks should be doing with those newfound raises or newly-found employment income. The first thing I encourage budgeters to do is to build an emergency fund. I urge clients to aggressively save enough money in a bank account to get them through a rough patch in life. Once that is done, we can start putting money into our employer-sponsored retirement plans or individual retirement accounts (IRAs). Lastly, I would encourage everyone to start a Rainy-Day Fund.

Rainy-Day Fund

I view the Rainy-Day Fund as something slightly different than the emergency fund. Emergency funds are there to cover large, unexpected periods of time when, for some reason, your income stream has been altered or interrupted. This fund should be kept separate so that once saved, we never dip into it unless there is truly an emergency. I view a Rainy-Day Fund as money that can help with unexpected expenses, not unexpected periods without income. Unexpected expenses might be something like: your car’s transmission goes out, your taxes were prepared incorrectly and you owe the IRS, you get a speeding ticket, or perhaps your unattractive kid gets invited to prom and now you have to buy the fancy outfit. (Just kidding on the last part.) The Rainy-Day Fund is just a small stash of money that’s there for life’s everyday “oopsie.”

Now that the economy is doing better and you may have gotten a raise or a promotion, I would encourage you to start systematically saving a small amount to help pay for these annoyance expenditures. I’m not talking about anything crazy here, but possibly give up your daily mocha and start putting that money in an account for a rainy day. It can add up quickly! A $20 weekly savings adds up to $80 a month and then, a year later, you’re looking at $1,000 saved for that rainy-day expense. So, in short, don’t let this increasing wage environment go to waste. Start slowly putting money into your newly-established Rainy-Day Fund.