Weekly TEN

(edited transcript) … [Daryl] There’s a saying that basically says, “Getting to your first $1 million is the hardest part.” And after that things get a little bit easier. [Ben] I think in reality, what it is, is the returns might not differ, but getting to the second hurdle, that $2 million mark, 10% of 100,000 is a very different number than 10% of a million. So, it’s like you start to see larger cash dollar amounts as a return. Right? Which gets people more excited because they see these larger dollar amounts. Instead of making 10,000 you’re making 100,000. [Daryl] Well and there’s also that point where you’re contributing– exactly, the same percentage is at play and it just looks like it’s, it’s basically a straight line. And then you hit that exponential piece– [Ben] Which is the same reason why we try to tell younger folks get started early. [Daryl] Exactly! [Ben] Get that 100,000, get that million built up. Because after that you’re going to get the benefit of that 10% return on a much bigger portfolio, which you’re not going to have to put as much of your own money in. And you’re going to be financially independent much earlier on. [Daryl] That also makes me think of a phrase that I like to tell people all the time. I have never met a person who hasn’t said, “I wish I started earlier.” Not a person. I’ve never heard that. But the reality is today is the very earliest that you can start. [Ben] You can’t change the past. [Daryl] You can’t change the past, but you can certainly change today.

(edited transcript) … [Tim] Sunday night when we got the call when we got the call that we were probably going to lose our house– we didn’t, as of right now. When we thought we were losing our home, there wasn’t a single thing we had bought that we were worried about losing. It was the kid’s artwork, some birth certificates, you know, there’s some things we’re like, man, we wish we would have probably put a handful of these things in a fireproof safe, or had one. You build a goal, you build a plan, but you refine it all the time. [Daryl] Yeah, absolutely. We’re a ways from the fire, but it still was just this opportunity for us to talk as a family. I mean, we actually do “top ten” lists all the time. Top ten rides at Disneyland. Top ten mac and cheeses we’ve had around the United States. Like all these things. Like that’s what we do, it’s totally important. But what it did is it afforded the opportunity to go ahead and say, “what is the top ten stuff that you would bring out of the house?” [Tim] Yeah, like when the moment of truth comes, whether it’s stock market volatility, fire, God forbid, you got to have that plan in place. [Daryl] Yeah.

It has been a tough week, and so many in the Spokane community have been impacted. Please know that we are here for you, whether you need help navigating the financial impacts of these fires or simply want to stop by the office for a friendly visit. Stay safe!

(edited transcript) … There’s always a tradeoff. We talked about this in a recent commentary, for one gentleman, he’s like “Well, I just didn’t really want to pay an advisor fee, so I was just doing it myself.” At some point, he realized his lack of confidence and clarity, even in his own abilities, was leading to hold way too much cash, which had a cost. But it was also costing him time away from his family, which he really wanted to have more time with. He was getting up, spending a few hours a day watching TV, reading things. Just that fear of being wrong gets paralyzing. And I get it! Making decisions, making wrong decisions is tough, but just sitting and not doing anything is a problem. Conversely, there are times where you shouldn’t do anything. Or do what at least you feel like you should do. Think, markets plummeting and you’re like, “I got to get out before it keeps going down!” But that’s why being able to articulate things out loud. Have someone, “This is what I hear you say,” “Really? Because that sounds not that great,”– is so helpful. We tell clients all the time, maybe we know more about you than this maybe we don’t, but we’re going to be better together. And I think it’s that idea of a partnership that, again, drives so much of our process.

(edited transcript) … As to the value of prediction markets, they certainly have seemed to be right more times than not. To use that as a true gambling or investing mechanism obviously seems pretty dangerous. You know you can be up a trillion percent and then down just 100% and you’re at zero. Right? And so, respect the downside. I think it’s just indicative though, kind of like the fact that we have more ETFs than we actually have stocks on the stock exchange. Everyone trying to find an angle, as opposed to just doing what they know they should do. Focusing on what they actually can control. Is there some silver bullet or magic mechanism or new take on things that will help get me from point A to point B? Like most things in life, we’ve talked about using weight as an analogy or whatever it may be. We kind of all know what we should do, we just don’t want to do it. It’s not fun, it’s not quick, but it is effective. And so, fix your focus on that outcome of what you want to do. Certainly, understand all the steps that are going to be there, so you’re not surprised or discouraged along the way. Avoid at all costs falling prey to a quick fix.

(edited transcript) … What really are we trying to accomplish? Money is just a tool. In and of itself it’s not going to bring you the things you hope it’s going to bring. We think money in and of itself is going to create a certain level of happiness. We think a thing we might achieve is going to create a certain amount of happiness. And when it doesn’t, a subconscious panic starts to set in. And we’ve seen this time and time again, and I think we all can relate to it at some point. Really striving for something, getting it, and then we don’t feel the way we thought we should feel. That’s why we talk about purpose, then plan, then portfolio. Really defining it, and defining it with a lot more specificity, is critical. And I think people have ideas of what it is, but I’ve used the analogy of– it usually stays in the place of the good idea that you have when you’re brushing your teeth. Makes sense in your head and it sounds good in your head, and then you go to tell somebody else about it for the first time and it’s not quite as clear. And it doesn’t mean it’s not a good idea, but it needs to be refined, it needs to be fleshed out, and that usually needs to be done in conjunction with someone else. And that’s the kind of partnership, the kind of relationship that we certainly want to provide to our clients.

(edited transcript) … Clearly, independence is something that people in my line of work talk about all the time– financial independence. I’ve just had a litany of meetings here of late with new clients that have come on board, all people with a lot of money. Very few of whom had the clarity that they needed to really feel independent. So, I think when you talk about financial independence, it’s a two-part test. We meet a lot of people who are confident, they know they have money, but they don’t have the second piece of what it takes to achieve true financial independence, from our perspective, which is clarity. How exactly are you going to, perhaps, move from an accumulation phase to a distribution phase? What does all that entail, from asset location to where you take distributions from, to how you generate free cash flow. But even beyond that, what are we really trying to achieve? Where are we trying to get to? Speeding off in the wrong direction doesn’t get us any closer to achieving our goal than never having left the dock in the first place. And so, really walking through with clients, we’re going to build you plans and portfolios that address your goals. But we need to start with what is that goal? What is that destination that’s going to help you feel independent, and do you have, not only the confidence, but the clarity of the path, to really help achieve that?

(edited transcript) … Chris Rock would tell you that NBA players are rich and the guys who cut their checks are wealthy. We’re always focusing on wealth as, again, a four-pronged test. Certainly money– we understand why people are hiring us. It’s to build sound portfolios, build sound plans, but also, focusing or helping reframe those goals a little bit more broadly to think about health, think about their legacy, to think about time with family and friends. Right? If you can get all those four buckets, you’re making some deposits in all four of those buckets, not just the investment account, that’s what we would deem to be a wealthy life.

(edited transcript) … Reconciling just how bad a lot of sentiment indicators are with the data, which is stable, solid, some would argue on its way to being spectacular. There’s no doubt that you know, the K-shaped economy, which is for a lot of people, things are hard and for a lot of small local businesses, that data is more difficult. The market, again, reflects the top 500 companies in the world, and when you look at their global sales, when you look at the other part of the K, the top class, which tends to spend most of the money in the economy, they’re doing pretty well, right. Their assets have continued to inflate. They’ve got money to spend. Again, any indicator for us here isn’t really about trying to time the markets. As I’ve said, it’s really about emotional preparedness and just understanding what could transpire and being ready for it, so you don’t freak out when it happens, so you can think logically. For us it’s process of preparedness, not prediction. That’s where we would keep it. And you know, hopefully that that K begins to come together a little bit for people and hopefully people look to everything that’s going right, as opposed to just those aspects of life, political or otherwise, that they’re not fans of right now. I think there’s a lot of good things out there if people are looking for it.