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The Love of Money

It takes money to make money.” is a famous cliché. In honor of St. Valentine’s Day, I’d like to explore this cliché with you by looking at it through the lens of other currency. By taking money out of the language and replacing it with other words we trade for the things we want, we might gain some insight. A new way of speaking can improve communication. And when our ears hear what they want to hear, we can be more loving with ourselves and others. The universe expands and abundance knocks on the door. Here it goes…

It takes time to make time! Have you ever paused a second before responding and found yourself doing just the opposite of what your instincts prepared you to do? That is what makes us human. The pause. Finishing a task, cleaning as we go, taking a moment to be proactive. These are all ways that spending time helps us create time. Keep spending time with people you love, find others who inspire you and there will be less room for time to slip through your fingers. Just like money.

It takes energy to make energy! Have you ever felt a bit sleepy and a walk of the dog or a ride on a bike then kickstarted your day or shifted it into high gear? Yes – me too! Have you ever lacked motivation? A word of encouragement, a friend’s extended hand, or flash of a smile can light a fuse that inspires us to act. Keep spending energy around people you love, find others who have good energy, and there will be less room for energy to pass you over. Just like money.

It takes love to make love! Have you ever felt surly and unloveable and a friend’s note or call snapped you out of it? We tend to spend more time and energy looking at our past faults and current flaws. Often we spend our money trying to pay off past debts and fix current problems over investing in what we love. Yet riches are attracted by stating goals and intentions that focus on improving the world around you and sharing your words of encouragement with others in notes and letters. Love notes and letters always follow the same formula. Look for the good in each other and feel love flowing back to you as you write it. Keep spending the words, throw them around among the people you love. Accept each other for who we are, find out what we want to become and keep the encouragement flowing through short notes. Celebrate success with letters of thanks, gratitude and pride. Share love through money when you have it.

Money is an energy that needs to move and flow in order to be of any value at all. You accept this when we speak of the other things we trade. Time, energy and love are no good if they are hoarded. We don’t all see money and its value the same way. There are seven natural ways to relate to money. In a relationship we are often confused by our partner’s approach. With money we can speak of these things in terms that make it more clear. Spending money is essential. So is earning it, saving it, investing it, leveraging it, giving it and taking it. We are each born with one of these dominant world views – Our Financial Nature. Our Nurture then interacts with us to make certain beliefs and habits stronger and wears away at our understanding of others. Dysfunction and discord arise within us and among us when we see any of these as evil. Respect and love each other in all ways. Use money when you have it.

There is a play we can call, a recipe we can write, and a history to be told of people using all their currency to create heaven here on earth. And money is one of the tools. Handle it well – like a good knife, it’s sharp and it can cut you, or it can save you and everyone around you. Use time, energy, words and money well. Use it with LOVE.

Tom Shepard, CFP

Financial Health Pulse

2021: Taking a Financial Pulse

As we step into 2021, so many were awaiting the results of the Georgia run-off to finalize what 2021 will look like on the investment front. However, designing a portfolio based on political outcomes is, on some level, a fool’s errand. The beauty of our democracy with all its checks and balances means that extreme changes are harder to enact. While politicians make bold universal promises to get elected, what can be accomplished is often earthlier. I am encouraged by this election as I was in 2016. Here’s why.

First. There is no election conspiracy. Friends of mine on the right point to every election having certain patterns, yet feel the burn of how this one violated the patterns we’ve come to rely upon as laid down by our Constitution. Therefore, something must be amiss. There must be fraud. In actuality, what’s different can be attributed to two factors:  COVID-19 and Trump’s presidency. As we know, COVID-19 led to massive mail-in balloting. It was the safest choice for citizens across the nation and expats to adopt to have their vote count. The approach resulted in the greatest number of votes ever being cast. But that alone didn’t tilt the outcome democratic. The result is the consequential sum, the defining reaction to Trump’s derisive and deflective nature that has underpinned every action he’s taken in office. By proclaiming fraud, challenging every state in which he lost, Trump created and furthered a sense of distortion. The American people were not afforded the traditional pattern of voting, a President conceding an election and transitioning his position of power with grace to the President-Elect. This week’s unfolding mayhem, incited by Trump’s own ongoing rhetoric, leaves me consoling the right in 2020 as I did the left in 2016. Then as now the advice is, “Don’t bite off your nose to spite your face.” The elections are over, Trump has been muzzled and censored.  Maybe now we can figure out how to truly listen to one another and work together. There is much work to be done.

Second. Given Trump’s polarizing and reactionary presidency, I find it comforting to know that the electorate sought more of a middle ground. The result is not a total repudiation of the economic policy of the last 4 years. If it was, the pendulum would have swung further. This election was lost by a man who has put himself above all others. That he is adopted by people who see God as being first and service the way of the Lord has baffled me. I am impressed that moderates tried to balance his loss by placing more republicans in the house and holding the Republican majority in the senate. The Georgia run off was an opportunity for Trump to lead the Republican Party and graciously usher in a new administration with a split congress. Instead, he alone is responsible for bringing out the vote from the left and pushing enough moderates to vote democrat to snatch defeat from the jaws of victory. There is much work to be done. Let US figure out how to do it together.

Third. The first women vice president has been given a very unique platform. Only three times before in this nation’s history was the Senate spilt 50/50 – 1881, 1953 and briefly in 2001. John Adams had this to say about the vice presidency: “My country has in its wisdom contrived for me the most insignificant office that ever the invention of man contrived or his imagination conceived.” I think Kamala Harris will find it far more significant. But it will be hard. Every senator will matter. The American people are tired of polarizing politics. They want common sense and centrist ideas to be led with civility. That is our take and we are investing based on it.

Here’s what that means. Certain industries will have a friendly tail wind, others will be sailing a reach, and others still may face a bit of wind in the face. We may actually get some kind of coherent plan for healthcare. Transparency may allow executives to plan rather than react. Whether anything can get through congress is beside the point. Green energy could have already put up the spinnaker and legalization of marijuana may take another step forward. More stimulus is probably on the way and the leadership around COVID will take its cues from what has worked in other places like New Zealand and Australia. That should be good for growth, But lockdown and the prospect of greater interest in curbing monopolies could temper some enthusiasm. We expect that diversification will work, corrections may happen, sectors could rotate and a wall of new worries will give wall street more footholds to climb. The pandemic is still the most powerful force in the room and is a slow-moving natural disaster being met with equally powerful monetary weapons. At some point the pandemic will end, the money printing will stop, and a successful economic recovery will be met with a Wall Street sell off.  But that too shall pass.

ProtectManage and Pursue are the three motivations that drive investing. If you had an amazing year in 2020, it might make sense to trim a little profit and reallocate. That management technique may be hard to do if your focus is on making more. If you are still on the sideline, you might do well to start nibbling at the things that are starting to show signs of life. For most of us, it’s more important to “live life with the money we have” rather than “live for the money with the life you have left.” 

Find your purpose and go fulfill it and four years from now we will all be better off. “If you can’t find someone to fly with give me a call, I’ll be your wingman.”

Tom Shepard, CEO/Founder
Shepard Financial

Holistic Financial Planning the shepard FINANCIAL Way

Many wealth management firms are embracing holistic financial planning which is a trend based on improved client relationships and a more client-centered approach to planning & wealth management. This is good news! It’s meant to better serve individual clients and their families in a long-term way, but to us “holistic financial planning” has a much deeper meaning. In the mainstream, holistic financial planning is still very much about an advisor’s performance, using existing products & services to provide a broader strategy, and using updated technologies to report across varied investment accounts. It’s still about what the advisor is doing, not who the clients are and how they naturally understand money. Without that crucial understanding, attempting “holistic financial planning” is like trying to paint a house with one arm tied behind your back.

Here’s what we know: every single person is born with a specific understanding of life. We’ve called this the 7 Financial Natures because that’s how this pertains to our business. You have a set of financial skills, an innate understanding of how money functions, how to get it, how to use it, how to value it, and how to trade it. Money and finance do not need to be upsetting, threatening, judging, confounding, or immobilizing. Money and finance can be supportive, safe, exciting, uplifting, and positive. This is the perspective from which we operate, and this is what we want all clients to understand- a perspective shift is necessary to evolve with your money. It usually means letting go of what you think you know about yourself and money so that you can learn new ways to relate to it, interact with it, build wealth, prepare for the future, exist in partnership with your finances, and grow as a person as your money supports the life you want.

To us, holistic financial planning doesn’t begin with what we can do for you. It begins with your financial nature. There are always a number of ways to reach a goal, but your plan has to respect your nature. For example, a Taker might need convincing to accept that they are not broke. Spenders often need some help reframing their expenses and feeling good about that. Earners would likely love to know about unearned income so they can relax a bit. Telling a Saver the only way to prepare for the future is to invest every penny from their savings would likely result in a panic attack and losing a client. Investors often need some guidance in terms of investing- they’ll want to do it themselves. Levers can get into trouble by trying to make their lives less expensive. Givers are going to need some support to seize an opportunity like a financial gift.

Without knowing what a client’s nature is, there is no way to completely tailor advice and create a strategy that supports them the way they need. Our focus is first on a client’s nature, how they need to receive information, and what role time plays in rolling out a considered plan. Plans can include conventional products & services but knowing when and how to implement specific products is fully informed by each individual client. It’s not that we’re saying what other advisors do is wrong. It’s that we believe there is a way to be of greater service and we’re dedicated to taking our practice to a higher level.

Retirement Planning vs. Life Planning

People do not retire. They are retired by others. ~Duke Ellington

Retirement is usually held up as something we all must prepare, plan and save for because it’s the ultimate, natural end-game. However, there is nothing natural about it. In fact, the concept of leaving the workforce at a certain later age and having the money to support oneself was originally a socialist idea! It was adopted by the United States government in the early 20th century as a means to force older workers out of the workforce so there would be room for younger workers. The government then sold the idea to all Americans, branding it as the reward for decades of hard work which spawned many new industries and the rise of Florida as the go-to retirement destination. Though we may think of this as completely normal, it’s only been a popular model for a couple of generations. (The New York Times has this great overview of the history of retirement.)

We’re not fans of the idea of retirement or the notion of retirement planning. It suggests the end of life as you know it or the end of life, period. It’s off in the future, some idealized “some day.” If the picture of that “some day” isn’t your own, or if you don’t find value in delayed gratification, retirement planning may be stressful, painful, or impossible. Some people give up and give in to the pitfalls and distortions of their natures, trapped by self-imposed ceilings. Many people never become aware of living like this, but others do. Each scenario is equally tragic.

We favor the idea of life planning which includes the goal of financial independence plus room to keep living and growing beyond any one financial level, life stage, or age limit set by legislators. Life planning is in the present. It’s a process powered by your intrinsic motivation rather than discipline, which is a lot more comfortable. Our approach begins at the core of who you are rather than a foundation of external factors. Life planning is about being fully alive, growing and developing, and evolving with your money.

Our goal is to help you create and practice a financial strategy that looks out for all your needs, wants, goals, and aspirations. That starts right now and keeps a healthy eye on the future. That’s using your money to support your life as it unfolds, expands, and evolves.

Age in unimportant. Good planning is about what we’re being called to do now and getting on with it.

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. They do not necessarily reflect the views of LPL Financial. No strategy or process assures success or guarantees against losses.

Adventures in Middle School

As many of you know, we are developing an educational arm, Currency Camp, which will start out teaching kids to know & embrace their natures then move into much needed financial literacy skills. The first actionable step, we thought, was to talk with people we know in the financial and educational worlds to get their thoughts and advice. We were invited into a classroom right away, and it was an amazing experience.

A friend made through business networking, (2 Degrees Portland), happens to be a teacher with the Jobs for Maine Graduates program, (JMG), at Freeport Middle School.  She was about to launch into a unit on self-awareness. Our philosophy of the 7 human natures fit right in with her curriculum, so we decided to collaborate on a 4-day adventure teaching 11-14 year-olds about their superpowers. Here is a short look at some of the things we learned:

  1. No matter how much they may roll their eyes, middle schoolers are curious about themselves and life around them, and they want supportive, useful information. They’ll even go home and talk with their parents about it. They’ll even dream about it!
  2. Middle School students are as able to make the most out of a “learnable moment” as educators are able to make out of a “teachable moment.” The level of interaction, engagement, and the types of questions the students asked were unexpectedly deep & relevant.
  3. The pre-teach/discover/interact/reflect model is highly enjoyable, no matter one’s nature. We started with an overview of the natures, a developmentally-appropriate survey to discover theirs, a game that got their bodies & minds active, and finished with summaries of their experiences in their own words.
  4. This material, so far, seems to be easier for kids to grasp, accept, and integrate than for adults.

After the last day with the students, we talked about what we experienced and observed. Given that last take-away, we wondered what happens as we get older that closes our minds to new information. Is there a reason adults seem to struggle to embrace certain information while kids can easily relate to it? What does it mean for us that we seem to develop an inability to embrace deeper self-knowledge and strategies for honest, true personal evolution?

This experience has motivated us to continue to develop our educational program, Currency Camp. Though this time we focused on the 7 natures, we have plans to go back during their financial literacy units, and we expect to have our minds blown again.

 

This is your life: Ages & $tages.

Where are you in life and what does that mean for your financial plan?

There is a time to work, a time to relax, a time for joy, a time to help others, and a time to be helped by others. We all experience predictable, natural life stages, times when we’re naturally inclined to do, think, and perceive our lives in a specific way. Knowing your nature is part of knowing how to use your money to craft your best life, but understanding your life stage is, too.

Our blog this week is actually a vlog, a short video we created to show you all the life stages, what’s important when, and the true possibility of the human lifespan if we take good care of ourselves. We hope this will help you enjoy your life, every step of the way.

What is Financial Planning?

Often financial planning is too closely associated with investing alone. Our approach is a seven-spoke wheel taking into account all the ways in which you interact with money and value as well as all the elements that go into a healthy financial strategy.

Financial Planning Spokes 2

By pulling these pieces together you’re able to create a financial practice and strategy that supports itself as you evolve with your money.

Here’s how we do it:

Investing: Of course this includes your investment portfolio and our investment philosophy, but it can also include investing in yourself, your family, your community, small businesses, and in other ways that create more value for  you. When helping you plan your investments we help you understand all your options, interpret information and market trends, balance near-term and long-term priorities, and stay connected to your money.

Tax Planning: Taxes are an inevitable aspect of your financial picture. We help you leverage your financial strategy to minimize your taxes.

Estate Planning: This is not only for those with millions in assets. In the event of anyone’s death or incapacitation, estate planning will help ensure loved ones are taken care of, that you are taken care of in the event of incapacitation, minimize estate taxes, and will help avoid legal battles. As your life and finances evolve, so must your estate planning.

Spending: We help you examine how and why you spend your money so that your spending can become intentional, based on creating more value for you. Much financial wisdom tells you to decrease or stop spending your money. We believe that you can spend your money in ways that support your health and wealth.

Earning: Just like your spending, your earning can drain you or empower you. We help you determine your capacity to earn, how you earn, and how to increase the amount of money you earn. Sometimes that means working more, sometimes it means working less. We look at how and in what ways to add value to your earning so you can earn more and protect your ability to earn money, manage savings, invest to diversify earnings, and truly evolve with your money.

Insurance: Part of your full financial plan is recognizing the need to protect what you’ve got so that you can manage your current situation and pursue the next level. We help you prioritize your protection needs and the insurance plans to meet them, which can change through out your financial evolution.

Leverage: We help you find ways you can make your life easier, less expensive, and move closer to financial independence. Often what you do in one area of your financial plan will benefit another, for example you can may leverage your investments to reduce your taxes or spend money in  a way that gives you the ability to earn, save, or invest more money. As your financial plan evolves new opportunities will emerge, and having a full, comprehensive, customized financial plan positions you to make the most of them.

 

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. They do not necessarily reflect the views of LPL Financial. No strategy or process assures success or guarantees against losses. LPL Financial and shepard FINANCIAL representatives do not offer tax or legal advice. We suggest you that you discuss your specific situation with a qualified tax or legal advisor.

Camp Counselor: teens & young adults working outside the home.

Allowance: Adolescents to Young Adults

Before jumping in, take a look at the broader context and relevant details, and find your child’s nature.

Walking dogs is a great job for teens.Job & Own: from 16 to 18 it’s important for kids to do something for the world at large and get paid for it. Babysitting, mowing lawns, scooping ice cream, walking dogs- owning the responsibility of reporting on time, working diligently, having a good attitude, keeping commitments, and planning ahead are all important things to learn at this stage. Their ability to earn money and have savings is a gift made possible by your generosity, and they will need help securing that first outside job or turning a hobby into an entrepreneurial venture. Your time, connections, attitude, energy, and love are more important than your money as you help them become independent, (rather than “I-dependent”). Introduce them to the costs of more independence and consider charging them for services rendered or backing off some of their allowance. Up to now their stuff has actually been yours, and they are motivated to get a job so that they can own their own things. They’ll become more selective about their friends, clothes, activities, etc., letting go of some things and cling more dearly to others. This is a time to allow them to learn about how money works and become engaged in the ownership of money gifted to them, and if you have investments earmarked for college consider transferring unofficial ownership to them.

Suggested allowance: again, customize appropriately.

Suggested expectations: engaging with money as a source of positive energy.

 

You've done a great job, and it's time to let go of adult children. Self-Development & Leverage: there are many ways to continue to invest in our kids and ourselves. In the 19-21 stage kids learn to be interdependent because nobody can accomplish much on their own; we all need good people, and people need us to be good. Help your kids maintain interconnectedness through summer jobs, inviting them to participate in the care of their homestead through chores when they are around, and schedule these in the mornings. The more people invested in their success, the less likely they are to give up, and the more likely they are to stay connected to the value of the experience not just the price. Your kids should be involved in all factors that go into paying for school, including having a say in how assets are liquidated, how much money is borrowed, and how much of a work-load to take on in order to actually learn. If they need to borrow money it’s best to go to the bank and apply in front of someone they know; kids at this age should be able to make a case that they are a good risk, and the bank or others extending credit should be clear about their expectations. At this stage you’re really there to encourage, support, and ground your kids. As long as they know you’re there for them they can feel free to reach for the sky. The challenge at this point is to let them go and allow them to make small mistakes that help them learn without snowballing into something that can take your financial house down with it.

 

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. They do not necessarily reflect the views of LPL Financial.

 

Tween Mowing Lawn

Allowance: Tweens & Teens

Before diving in, read this overview of the whole strategy for important details and review finding your child’s nature

Sponges: get creative with household chores for the kids.

Chores & Earn: from 10 through 12 kids can adhere to some routines that help the household function better. The tasks they once helped you with now become chores that are their responsibility. When children have ownership and responsibility they have things to trade; the more entrepreneurial among your family may end up doing all the work, but they might end up with all the money, too. (A good book: Lunch Money by Andrew Clements about a kid who makes a fortune off his older siblings.) In this stage you are helping them with chores that are under their purview. “Let me help you (insert chore),” or “how can I help you XYZ” are a great means to give them jump-start getting something done. A slight increase in allowance will empower and enable them to start buying the things they want, like specific clothes or shoes, that you were likely to purchase anyway.

Suggested amount: $10+, customized to your family.

Suggested expectations: their ownership of their chores should come with a new level of quality and few reminders.

 

kids on swing rideWork & Save: in early adolescence children go through another great developmental leap. From ages 13 to 15 they are far more socially aware, and often they want to buy the cool stuff or go to awesome places but don’t have the money. Now is a time to impress upon them the idea of having a financial goal and working to earn money over and above what they, and you, have come to expect. Doing more voluntarily because they have needs and desires should be encouraged. You’ll need to support creativity and expose them to more and more of your finances and financial decisions. Kids in this stage can learn to do more at home and venture outside the home to earn extra money. They are primarily interested in fitting in and being a part of a peer group, so they are beginning to respond less to what you say and pay more attention to what you do. Speak less and work along with them more. Pay them with cash and open a bank account for them to put a portion of their earnings into savings. They may ask for more work only occasionally, but you can offer opportunities to earn more money.

Suggested amounts: customize fairly according to job.

Suggested expectations: (clear communication is critical), vacuum & wash the car, clean the windows, vacuum & dust the house, watch younger siblings, mow the lawn. Outside the home: babysitting, yard work & mowing, pet-sitting, etc.

 

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. They do not necessarily reflect the views of LPL Financial.

 

 

Allowance: Teaching your kids about money and value.

Teaching our kids about money and financial health is critical. According to a great article from the Wall Street Journal, despite the best intentions, we’ve been getting this all wrong. “Most children still grow up into adults who can’t properly save, spend, and budget,” and invest, leverage, and give. In other words, kids are growing up without an understanding of money as a neutral tool to help them create the lives they want and instead arrive at adulthood with financial anxiety, unable to speak about finances rationally, and unable to distinguish cultural associations and personal emotions all too often attached to money.

So what do we do? How do we instill in our children a healthy financial perspective and the ability to navigate finances with confidence?

The answer is honestly simpler than you might think. We’ve gone back to our philosophy  to create a developmentally appropriate, easy to integrate approach to teaching children about money and value, and it centers around allowance. The benefits are many: kids learn about themselves and their relationships to money & value while earning some money, and parents are able to eventually off-load some work they’d otherwise have to do themselves. The plan is customizable, and each family can determine the amount of allowance as well as specific expectations and chores.

This strategy spans from birth to age twenty-one, and we’ve broken that time into 7 distinct stages. Each stage naturally comes with its own challenges and opportunities. Your role is to identify and make the most of them. They are:

Allowance Ages & Stages

 

Need to know: before jumping in we need to introduce some necessary vocabulary. Each stage goes through three phases: Assurance Ensurance, and Insurance. These phases will look different at each stage, and your children will need you to be responsive to each one. When in Assurance, they’ll need you to be supportive and to show, tell, and model what they need to know. Each stage will demand that you give your children Assurance support for a good while in the beginning, especially when they are younger, and it requires an investment of your time more than anything else. Ensurance isn’t a word you’ll find in the dictionary, but it’s absolutely the right word to describe making sure, ensuring, your children have enough practice and anything else they need to develop a strong, healthy habit. The Insurance phase is the pay-off for you: you’ve invested in your kids up front and installed in them habits that minimize their risk of back-sliding. By the time you and your kids reach Insurance they are moving along under their own steam.

Additionally your children are born with their natures intact. In order to be the best mentor and guide you can be you’ll need to do your best to identify their natures. It’s not as though they can take our survey like adults can, so we’ve created this guide to help you identify their natures as accurately as possible as early as possible. More here…

Jumping in: birth to 3 years is characterized by discovery and massive developmental leaps, something that doesn’t come around again until early adolescence. Your children will need you to be in Assurance all of the time. [Read more.]

Play & Competition: kids from 4 to 6 are fun, playful, and naturally competitive. Playing games introduces them to rules, winning, and losing graciously. When in Assurance you’ll demonstrate the rules of fair play and sharing. [Read more.]

Help & Cooperation: by the time kids are 7 they will want to help around the house. In the 7-9 years children naturally want to please their adults and relate their value within the family to being asked to do things and go places. [Read more.]

Chores & Earn: from 10 through 12 kids can adhere to some routines that help the household function better. The tasks they once helped you with now become chores that are their responsibility. [Read more.]

Work & Save: in early adolescence children go through another great developmental leap. From ages 13 to 15 they are far more socially aware, and often they want to buy the cool stuff or go to awesome places but don’t have the money. [Read more.]

Job & Own: from 16 to 18 it’s important for kids to do something for the world at large and get paid for it. Babysitting, mowing lawns, scooping ice cream, walking dogs- owning the responsibility… [Read more.]

Self-Development & Leverage: there are many ways to continue to invest in our kids and ourselves. In the 19-21 stage kids learn to be interdependent because nobody can accomplish much on their own; [Read more.]

You’ve likely heard the saying, “it’s the journey, not the destination,” and this strategy for helping your kids evolve with their money is a wonderful journey with a fantastic destination. You and your children will appreciate and learn a great deal from this intentional, organic process, and you both win at the end: you’ve raised a kid who has healthy money habits and perspective, a kid who knows herself or himself and understands money as it relates to his/her nature.

 

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. They do not necessarily reflect the views of LPL Financial.

No strategy or process assures success or guarantees against losses.