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What Are You Thinking?

Excerpt Adapted From: The Financial Shepherd-
Why Dollars + Change = Sense by Glen Wright and Sy Pugh

Our financial goals should not conclude simply at getting rich, but rather, they should also incorporate building wealth. Although there are a lot of rich people in the world, many of them are not wealthy because they cannot sustain their riches. Wealth is like an evergreen tree that always remains the same regardless of the season. Think about what an evergreen looks like. It has full, green, plush leaves or spines even if it is surrounded by bees buzzing in the spring in search of pollen, or drenched from a late summer shower, or swayed by a mid-autumn breeze, or weighed down by a late winter’s snowfall. Underneath whatever else is going on, is still that same healthy, stable, viable tree. Much like wealth, evergreens are unburdened by external circumstances and the environment because their roots run much deeper than the temporary situations around them.

We should aspire to build wealth because it brings peace of mind by allowing an individual to focus on future goals instead of being consumed by the day-to-day ups and downs of their finances. Most wealthy people live well below the means of what they can actually afford – mainly because they understand the true value of money; what it is, what it isn’t, and what matters most.

One of the best lessons you can learn about money is this: When you change your mind, you can change your destiny. ‘As a man thinketh, so is he’ (Proverbs 23:7 KJV). What are you thinking about?

Estate Planning

Excerpt Adapted From: The Financial Shepherd-
Why Dollars + Change = Sense by Glen Wright and Sy Pugh

 

Estate planning is not just for the rich and famous. If you do not have a will (a document expressing how you wish your assets to be distributed upon your death), you are basically asking for trouble and essentially begging the government (of the state you live in) to give away your stuff as they see fit – regardless of your dying wishes.

Not only do we recommend preparing a will, but advise that you consider developing a trust also, which is a prepared document that privately dictates how you’d like your assets to be distributed while you’re alive and upon your death. The process for creating a Revocable Living Trust involves an attorney who prepares a trust agreement (also called a declaration of trust) which is signed by the settlor and the trustee; and then the settlor transfers property to the trustee to be held for the beneficiary named in the trust document.

A trust is classified as a “living” trust when it is established during the settlor’s lifetime and as a “revocable” trust when the settlor has reserved the right to amend or revoke the trust during his or her lifetime. The primary reason for this procedure is because you ALWAYS want to avoid the estate going to probate (high attorney costs, delays, unwanted publicity, court costs, etc).  This type of trust does that. Other benefits include the ability to manage funds for heirs for a specified period of time—or until they reach a certain age or level of maturity—and to prevent reckless or irresponsible spending which might put the assets in jeopardy. If the person setting up the estate becomes incapacitated, the trust has built-in provisions for a successor trustee to oversee management of the estate.

While most wills and trusts are future-focused, something few people think about in estate planning is if a parent who is still living becomes the “child” through illness, injury, or disease. In that situation, the child taking over management of the parent’s affairs must oversee decisions in the areas of Finances, Medical Care, Benefits, and Key Documents (e.g. health care directives, durable power of attorney, trust documents, living wills, etc.)  

If an individual becomes incapacitated and is no longer able to care for him/herself, another trusted individual will need to step in to handle affairs on their behalf. When considering the steps to take to ensure a smooth transition, the following documents should be drawn up to be executed if necessary:

Durable Power of Attorney – a written document (not just a verbal agreement or acknowledgment) by which the principal person allows another person (agent, attorney-in-fact, proxy) to act on his/her behalf. The appointee has the power to make key household and financial determinations.

Durable Power of Attorney for Health Care – a written document (not just a verbal agreement or acknowledgment) by which the principal person allows another person (agent, attorney-in-fact, proxy) to act on his/her behalf regarding health care and medical treatment issues.

Living Will – this document is also known as a “Directive to Physicians” and provides information regarding the types of medical procedures or treatments to be administered or withheld.

It is a very good and worthwhile investment of your time to put in place documents, plans, and procedures to protect your assets from strangers (probate), Uncle Sam (taxes), and time (inflation). In this, the Information and Technology Age, there is no excuse not to have your affairs in order.

The preference for establishing and maintaining up-to-date estate planning documents such as trusts and wills is to have them prepared and reviewed by an attorney. However, there are many other places to get wills and trusts. You can purchase and download software that feature fill-in-the-blank will and trust templates for as little as $20.

Though you might be tempted to spend $20 on software rather than $500 with an attorney, remember that you get what you pay for. Working with a professional who specializes in estate planning will offer ease of process and peace of mind. You don’t want to squander away your children’s and grandchildren’s inheritance because you were too cheap to let a professional protect the assets you worked your entire life to acquire. In the end, it’s worth it to make sure you get the best results, take advantage of the most tax breaks, and provide an inheritance for your loved ones. Additionally, over the course of time as your assets increase, a simple online template may not adequately address your financial planning needs. More valuable accounts, legislative and regulatory policy updates, changes in family structure, or other events may require you to update your will or trust. Utilizing the same person and/or firm can help minimize costs and ensure a seamless process.

The objective of Hope for the Best, Plan for the Worst is to help you prepare for anything and everything that might arise to derail your life-long efforts to build a good, quality life for you and your family. The priority of all retirement planning, insurance policies, and estate planning is to make sure that you never outlive your money.

Small Changes May Be Necessary

Excerpt Adapted From: The Financial Shepherd-
Why Dollars + Change = Sense by Glen Wright and Sy Pugh

I have a client who told me that she had been taught to have zero debt; none. She paid cash for everything, had no credit card debt, and even paid off the mortgage of her first home in 10 years. On the surface, this sounds like a really good thing. Fast forward a few years, and she wanted to move to a more prestigious part of town and was wondering how to make this happen. Her thoughts were to sell her home and take all of the earnings and invest in her new home, then sign up for a 15-year mortgage to pay it off faster. All of this sounds great, except that she had a few holes in her plan.

First, she did not have an emergency reserve fund; she only had a line of credit on her home. She also has a son who was 10-years-old at the time and she had not saved anything toward his education. At age 45, she would have to work until age 70 before she could retire comfortably because she had not saved enough in her retirement to cover her living expenses. So I recommended some changes in her plan:

  1. Save and invest. Put only 20 percent down on the new home and invest the difference. Her mortgage rate was 5 percent fixed for a 30-year loan (versus 4.75% for the 15-year, not including its deductible); and over the last 10 years the S&P 500 index has averaged over 8.5 percent.
  2. Invest for the future. The payment difference between the 15- and 30-year mortgages was $900 per month. I recommended that she save that extra $900 to invest and help build a college savings fund for her son.
  3. Earn rewards. She loved to travel, so I suggested she get a travel reward credit card and pay it off every month to get extra bonus travel points. She put everything on her credit card and paid it off every month and received multiple free airline tickets which saved her thousands of dollars per year simply by paying with a reward card.

Just by taking some basic, straightforward steps, she was able to take a good financial situation and make it much better in addition to being much better prepared for the future.

The Importance of Wise Counsel

Excerpt Adapted From: The Financial Shepherd-
Why Dollars + Change = Sense by Glen Wright and Sy Pugh

At the end of this book, in the Top 50 Financial Terms section, we define what to look for when identifying Wise Counsel: advice, information, warning, direction, suggestions, recommendations, caution, guidance, or admonition that provides direction as to a decision or course of action or in setting standards or determining a course of action. When it comes to finances, rarely does Wise Counsel come in the form of friends and family who haven’t been professionally trained as financial planners or licensed counselors to help you face or navigate some of life’s more complex issues. If your money and your children’s futures are on the line, it is worth investing the time and energy to locate quality, well-trained, certified individuals who have some level of accountability for properly handling your money and money-related matters.

A good place to start is with referrals from respected individuals whose judgment you trust. Be prepared to ask a lot of questions and take notes to identify reputable financial planners and counselors in your area. It’s also worthwhile to research the recommendations of various professional associations such as the Financial Planning Association, the National Association of Personal Financial Advisors, the American Institute of Certified Public Accountants, and the National Board for Certified Counselors.

Licensure is the key when looking for a qualified counselor/therapist. Be mindful that the terms counselor and therapist are often used interchangeably. In fact, the terms themselves can be related to many other areas outside the intended use in this book. People without any specified skill sets are calling themselves counselors and therapists. For example, there are credit counselors and massage therapists. Neither of these two jobs requires the licensure process that identifies the service provider as a counselor/therapist that is highly skilled and trained in this area of expertise. The difference in the use of the term and the actual discipline is the licensure and the stringent requirements that are needed to obtain and maintain such licensure. This licensure comes with a governing body by which ethical guidelines are provided and enforced. This licensure also tells the consumer that this person, at the very least, completed a master’s degree program

from an accredited university. Among professional groups, a Licensed Professional Counselor (LPC), Licensed Clinical Social Worker (LCSW) or Licensed Psychological Associate (LPA), are good resources that should be considered when seeking wise counsel to help guide you and your family through uncertain or challenging situations.

[Glen] The Bible says in Proverbs 11:14 (KJV), “Where there is no counsel, the people fall; but in the multitude of counselors there is safety.” As a certified financial planner with a firm that has vast resources, I could help my clients with their banking needs. However, I feel that it would be a disservice to my clients because that is not my expertise. Keep in mind that your financial planner should act as the quarterback for your team and pass the ball to the appropriate receiver at the right time – with no interceptions. Remember, ultimately, you are the owner of the team, so make sure you have the right players on your squad.

Women Worth More – Business Summit – May 2017

Women Worth More Business Summit

 

TIME

May 25, 2017
11:00AM – 1:00PM

LOCATION

Covenant Presbyterian Church,
1000 E. Morehead St,
Charlotte, NC 28204

HOW MUCH

Free Event

RSVP REQUIRED

Register Now!

Jennifer Davis

Jennifer Davis
Jennifer P. Davis & Associates, LLC

Biography

Jennifer Davis

Natalie Williams
Women’s Business Center of Charlotte

Biography

To Be Added

Detective Tawanda Garrison
CMPD – Financial Crimes Unit

Biography

 

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Should Children Be Involved In Family Financial Discussions?

Excerpt Adapted From: The Financial Shepherd-
Why Dollars + Change = Sense by Glen Wright and Sy Pugh

Training and teaching children how to become Financial Shepherds starts before they know anything about money. It begins with the toys and the belongings that parents provide for them. As parents, we should teach our children to take care of the things that belong to others even better than their own things. Notice this change from the typical mindset of our society.

Since everything belongs to God, we teach our children “everything belongs to God”: the house, cars, money, everything! Since this is the case, we are to take care of God’s possessions better than our own. Children are more impressionable, so this will sink in sooner than you realize. In fact, my 5-year-old daughter finds joy in saying, “Daddy, this is God’s house.” If she understands that lesson at age 5, imagine how far ahead of the financial game she will be when she’s older and responsible for her own finances. The most important way to teach this principle to children is for parents to live it daily. When you change the way you think about finances, those that depend on you and follow your lead, will also have a changed mindset.    

Don’t be afraid to talk to your children even if you aren’t where you want to be financially. Make it a point to tell your children the truth (age-appropriate information that they can comprehend). Even if you are in a bad place, give them a basic sense of your family’s financial reality so they don’t live in fairy tale land and have unreasonable expectations. This level of honesty will prevent your children from making the same mistakes you made. On the flip side, if you are financially stable or well-to-do, inform your children of that as well. Focus on the fact that God has blessed your family with more resources so that they will demonstrate the principle of ‘blessed to be a blessing.’ The point is to be honest with your children and prepare them to be good stewards and future Financial Shepherds.

Invest in Yourself – March 2017

Notes from The Financial Shepherd

Why Dollars + Change = Sense by Glen Wright and Sy Pugh

 

Proper investing allows you to purchase into tangible companies, products, and services that meet a real need or supply a demand. True investing correlates with the cycle of business and the production of goods and services, not a whim, lucky numbers, or a hunch. Even still, it is important to seek out qualified professionals to lessen the chances of losing in the market. And remember there are some strategies that allow you to participate in market gains, but not market losses (Index Annuity). Did you know that (former) Federal Reserve Chairman Ben Bernanke has nearly all of his retirement dollars in annuities? Not a bad strategy. And if it is good enough for the chairman of the FED, then it might work for you as well.

 

When you invest in the stock market you are literally buying companies. The stronger and larger the company, the better the odds are for success. For example, we know Walmart probably will not be going away anytime soon. Also, investing allows you to participate in the collective brain trust of experts and access the experience of successful people. I often hear people say that because they didn’t go to the “right” school or get in the “right” circles, they can’t succeed on a higher level. That is not the case. Although you may not know John Bogle personally (Vanguard Funds Founder) and may not have his Ivy-league education, you can still invest in his Vanguard mutual funds and benefit from the company’s expertise. Investing opens a whole new world!

 

The people who are most successful in life are those who envision the future-based version of themselves and use their present-day self to plan on achieving that goal. Our God is a God of vision, and not just for today. We can learn a lot from other people who are already where we want to be in life. We can pray to God to send us the right people to help guide us down the path to financial independence so that we don’t get misled by wolves in Financial Shepherd clothing. If you desire to be wealthy, you have to purposely meet with professionals who are trained to work with wealthy individuals and who know how to grow and maintain wealth. Also, if you know someone who has amassed wealth the right way, don’t let your pride get in the way of reaching out to them.

Here and Now

Notes From The Financial Shepherd

Why Dollars + Change = Sense by Glen Wright and Sy Pugh


The next step to overcoming failure in finances and being a good financial steward is understanding that choices have consequences. When looking at the past, present, and future, we must realize and accept that the only thing we can control or change is the “here and now.” We are in a present state of being because of what we did in the past. And even though we cannot change the past, we can glance back over our shoulder to learn from past experiences (good or bad) and then adjust our behavior to make different or better decisions in the future. Even though we can’t predict or dictate future occurrences, we can make decisions that will positively affect our future results.

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Life has its Challenges, Be Prepared

Notes From The Financial Shepherd

Why Dollars + Change = Sense by Glen Wright and Sy Pugh


I find that there are many families that are stable with good employment, savings, and low debt levels – but who still demonstrate poor financial planning. This is one good reason to establish a board of directors and to be surrounded with other Financial Shepherds who support your life vision and want the best for you. One of the dangerous things about venturing into unknown territory is that you simply don’t know what you don’t know.

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Budgeting 101

Notes From The Financial Shepherd

Why Dollars + Change = Sense by Glen Wright and Sy Pugh


The main purpose for the budget is to plan how someone’s money will be spent. Since most of us have limited resources, budgeting provides a way for us to monitor and manage personal cash flow, and to meet both current and future needs. Everyone needs a budget, regardless of how much or how little money they have, because everyone needs to have a solid understanding of their individual financial position. Following the example of the wealthy, it is important to know that most affluent people have an excellent understanding of their personal budget and a keen awareness of how money comes in and where money goes out.

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