I’m moving. And it’s a royal pain.
Beyond the hassle of physically getting all of our stuff from one state (Florida) to another (Texas), I have to deal with a mortgage lender on the new house. At first, against my better judgment, I called Bank of America.
As I told the guy I spoke with, I’ve hated the bank for the entire 23 years I’ve been with them. There’s been way too many hassles for what should be simple business transactions.
But the local people I’ve dealt with the last few years have been very helpful, so I took a shot, despite my gut.
It lasted three days. By the fifth call to follow up on docs and verify what was going on, I realized that every time I speak with them I have to go through a phone tree.
Yes, I know the guy’s five-digit extension. And yes, after entering, I can verify that’s the extension I want. Then, after he answers, he’s required to recite his mortgage lending number, his name, and that the call is being recorded.
After that, I’m required to prove who I was by reciting my full mailing address and social security number… Every. Single. Time.
I told him that, as much as the bank told me this was a personal banking relationship, I couldn’t help but think that friends don’t operate this way. He said it was just protocol. I said goodbye.
It doesn’t matter how much the bank advertises that it wants to be my “friend,” or that it “knows what I need,” the truth is that it’s just business. Period.
I wish advertising wasn’t so hypocritical, but that’s a story for another day.
Today, the lesson learned – or at least reiterated – is that no one really looks out for you better than you.
No one is as interested in your success as you.
No one will care as much if you fall short of your goals as you.
And no one’s going to be as concerned as you are if things don’t work out the way you planned.
That’s why every one of us must be as diligent as possible when making life choices. And after choosing a spouse, mapping out a secure financial future has to be at the top of the list.
So with the markets looking for direction as President Trump gives Democrats, other world leaders, and even many Republicans heartburn, now is a good time to think about what you own, and why.
When I look in my accounts, I’m happy that I can explain much of what I own, and how I think it will lead to a more comfortable future.
I’ve written on retirement planning a number of times, and my theme remains the same.
I’m more interested in building streams of income, automatic ones if possible, than I am buckets of wealth. Many people think they’re interchangeable. They aren’t. If you end up with a big bucket of money in an account, good for you. But then what? Do you spend it down? And how are you going to build it? Through high-risk investments that might or might not pay off?
I know that sort of thing works for some people, but not me. I like to sleep at night, so I take a different approach.
I have a few life insurance policies with dividend riders that grow tax free. I’m able to borrow against them without taxes as well. When I pass, the insurance proceeds will settle up against anything I’ve borrowed, and then pay out to my heirs outside of probate. This part of my plan falls into the “set it and forget it” category.
I also have an allocation to equities, where I use a proven strategy to grow the value over time. It’s not high risk, but the value does fluctuate with the markets. My goal is to obviously outperform buy-and-hold, which I’ve been able to accomplish. But there is risk.
The last big piece of my plan involves fixed income, which I can use today in the accumulation phase of my plan, and keep using once I get to retirement age and start drawing from my investments.
This is where I use a strategy very similar to what Charles plans to talk to you more about next week, when he reveals important, income-boosting secrets; ones that are designed to hand you automatic checks every month. In fact, it’s modeled on my personal investment approach.
The key to this part of my portfolio is to understand how the investments react to interest rate changes, and then consider what lies ahead. Rising rates hurt certain funds more than others. But falling rates give these funds a bigger bang for the buck. Also, they can trade above or below their estimated value, depending on how investors view them at the time.
Rates have jumped since last summer, dealing these investments a setback. For this reason, investors are shying away, so many of them trade below their estimated value. Because I think rates will trend lower in the months ahead instead of higher, right now is a good time to add such holdings to my portfolio. As I said, Charles will reveal much more next week.
I mentioned that fixed income was the last big piece of my plan, and it is. But I do keep a small amount on the side for high risk, high payoff investments. These tend to be private investments that are illiquid, but could be home runs.
It doesn’t make much sense to get involved in these things, but something in me just calls out to swing for the fences once in a while. To date, I’ve made five such investments. Two lost money, one paid off modestly, and the remaining two are still in play.
It’s a good thing I allocate most of my holdings to more conservative investments. Otherwise, I’d find myself in retirement looking for someone to care about how much I lost along the way.
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