Month: February 2017

Resolution #2: Make a List of Retirement Goals

As mentioned in our Weekly Wire dated January 24, 2017 about planning for retirement, here is another practical retirement-related resolution you can set. This one is also very simple, and can apply to pretty much everyone.

When it comes to retirement, besides the myriad of things you know you need to plan for financially, don’t ignore creating a very important VISION of your future that may help you to look forward to retiring rather than be concerned over it!

A good way to start is to make a list of 5 to 10 things you want to DO or ACHIEVE in retirement. Some parents teach their children to MAKE A LIST and then cross off the things they accomplish. It almost seems too simple of a task to be of the great value that it is. Making lists are a great way to organize your information and prioritize. They provide a simple structure and are easy to read and write.

Every goal or dream you have can be broken down into steps. And as you follow each step you will begin to see your goal come to fruition, and it is so pleasing to enjoy the anticipated end result. It’s good to make a list because some things do take planning ahead of time, especially when it comes to retirement.

We read that when you make a list (like for groceries as an example) with bulleted or numbered points, even if you forget to bring the list with you, it is easier to recall what was on the list because you can think back to the location of the words on the paper. Lists can appeal to our general tendency to categorize things, and then we can process information more easily.*

We encourage you to stop for a minute from your usual daily schedule, and make this list with a real pen and paper, (or an electronic version) of a few things you would like to do or achieve when you retire. As the saying goes, “Put it Down in Ink.” Writing it down makes your goals easier to visualize. Then begin a sub-list under each goal for the first step you would need to take in order to reach this goal. You may be magically surprised at what you write down! You may have some subconscious ideas that you didn’t even know you had.

If you are not comfortable making a list, then at least imagine it.

We heard a story about a retired gentleman, who was asked if he missed working now that he was retired. We really liked his answer, “I don’t have time to go to work! I don’t know how I got anything done before retirement!” In this case, he didn’t have an official “bucket list,” but his motto and attitude (posted on his refrigerator) created his own bucket list without even being aware—to help everyone he could, and to be cheerful and happy with life … and he enjoyed every minute of his retired life! And every day he made a list of things he needed to do that day whether written or in his mind, including such things as helping a neighbor with a project, picking up something at the store for one of the widows on his street, visiting a sick friend, giving a ride to grandchildren to and from school or other appointments, counseling boy scouts, and a myriad of projects at home! The best thing about retirement for him was that he had time to do what he always wanted without worrying about a clock or a boss!

Remember, “If you can dream it, you can do it!”

Retirement is more than just saving money and finances, but in having dreams and goals in your life. Everyone has different things they would really like to do. Now is your chance to plan for them!

Source:
* “A List of Reasons Why Our Brains Love Lists,” December 2, 2013, The New Yorker. http://www.newyorker.com/tech/elements/a-list-of-reasons-why-our-brains-love-lists

Gone Phishing

Imagine this scenario. You get an email that appears to be from your bank. You open it and read a message riddled with misspelled words that direct you to “click the link below.” You click on the link, and are taken to a page that looks almost exactly like the website you’re used to visiting … almost.

You’ve been phished.

Hopefully, this scenario has never happened to you. Or if it has, you recognized the warning signs and knew to stay away. Unfortunately, many people don’t recognize those warning signs, and fall prey to a particularly insidious form of Internet fraud called phishing.

Phishing is defined as “the creation of email messages and Web pages that are replicas of existing, legitimate sites and businesses. These Web sites and emails are used to trick users into submitting personal, financial, or password data. These emails often ask for information such as credit card numbers, bank account information, Social Security numbers, and passwords that will be used to commit fraud.”1 A play on the word “fishing,” (with regular people as the prey, and fake emails/web sites as the bait), the crooks behind phishing like to target the following areas:

• Retail/Service
• Payment Services
• Email
• Social Networking

People who fall for these scams are often duped into giving out sensitive information, like their Social Security numbers, account passwords, credit card numbers, or even bank PIN numbers. Or, they may be directed to sites that proceed to install malicious software onto their computer or mobile device. Either way, phishing poses a major threat to your finances, your identity, or your data.

Thankfully, phishing is easy to avoid if you follow a few common-sense rules:

• Legitimate banks, retailers, and social media sites should never ask for your personal information via email. If you receive a message from someone asking for this info, assume it’s a scam.
• Furthermore, as a general rule of thumb, do not reply to any message, electronic or otherwise, that requests your personal information.
• Never use links in an email to connect to a website. Open a new browser window and type the site address in directly.
• Always double-check the URL of any site you intend to visit. Some thieves set up sites with URLs that look very similar to a legitimate site. For example, “amzon.com” instead of “amazon,” or “facebok.com” instead of “facebook.” You get the idea.
• When doing business online, look at each website’s address. Secure websites should have a small symbol of a lock next to their URL, or the letters https (instead of merely http) at the beginning of the address. Both the lock and the letter “s” indicate that the site has been verified as secure.

Also, learn to recognize what common phishing messages look like. There are often a few telltale signs:

Dear Costumer,
We have recieved notice that your identity is not secure! This could put your account in

danger. To register for a higher lvel of security, simply:

1. Click the link below to open a secure portal to our site
2. Confirm your the owner of the account by answering a few simple questions

If you do not comply with these instructions in 7 days we have no choice but to permanently delete your account.

Sincerely,

Your Bank, Privacy Division

The warning signs aren’t hard to spot. Look for misspelled words (costumer, recieved, lvel, etc.), links to click on (“Click the link below”), threats (“If you do not comply”), and references to a well-known business or organization.

I hope you found this information valuable. Just remember that by keeping your eyes open and remembering a few common-sense rules, you can protect yourself, your loved ones, and your data from phishing scams.

1 “Phishing scams,” Canadian Anti-Fraud Centre, modified March 11, 2015. http://www.antifraudcentre- centreantifraude.ca/fraud-escroquerie/types/phishing-hameconnage/index-eng.htm

Dow hits 20,000

Imagine you are driving a car down a lonely highway at night. You have no idea where you’re going or why you started driving in the first place. Because the sun isn’t out, and because you don’t have a compass, you have no idea which direction you’re going. It’s disorienting, but you have no choice but to keep driving—because at least if you keep driving, you know you’ll end up somewhere.

Then, all of a sudden, you see it: a green sign on the side of the road that reads

MILE 32

That seems encouraging, but a few minutes later, you see another sign that says “Mile 33.” Then Mile 34, 35, and so on. The brief spark of excitement you felt is gone, because it doesn’t take long for you to realize the truth:

Milestones tell you where you are. But they can’t tell you where you’re going.

Why are we asking you to imagine all this? Because it’s a useful exercise in light of the recent news out of Wall Street: for the first time ever, the Dow has hit 20,000.

The media always makes a big fuss whenever an index (or an average, as the Dow technically is) hits a milestone. That’s because milestones are inherently interesting to humans. They suggest a good story, and humans have always been suckers for a good story.

But for investors, market milestones shouldn’t be seen as particularly meaningful.

Of course, that’s not to say milestones serve no purpose. After all, if you’re driving down the highway and you do know where you’re headed, a milestone becomes a useful barometer of your progress. Similarly, if you’ve set a goal for yourself, milestones can be a great motivator. A form of encouragement to keep going.

As far as the markets go, however, a milestone can be a bit like fool’s gold: shiny and exciting, but of little value in and of itself. It can even be a little dangerous, because it suggests a story while masquerading as a statistic. Because it fools us into thinking it’s the needle on a compass rather than a mere measurement of distance traveled. (A number feels high, so the markets will probably keep going higher! Or, a number feels low, and will probably just keep getting lower!) But really, milestones tell us no such thing. They only let us know where we are. Not where we’re going.

The circumstances behind this particular milestone confirm this. Ask just about any market analyst and they’ll tell you the Dow hit 20,000 by riding a wave of optimism about President Trump’s economic agenda. Take this line from a recent New York Times article:

Or this one from CNN:

Wall Street is clearly betting that Trump’s plans to slash taxes, ramp up infrastructure spending and cut regulation will make the American economy grow faster.2

The recent postelection surge toward 20,000 has been driven by what investors are calling a

reflation trade, or a bet that the economy under President Trump will benefit from proposed tax

cuts and a move toward more aggressive government spending.1

The key word in both passages is “bet.” Investors don’t know how much of Trump’s agenda will actually be enacted, or if it will work, or if it’s even possible. They’re simply betting on it. This is a perfectly natural thing to do, because investors have always tried to get ahead by setting educated expectations for the future.

But when that big, round 20,000 is achieved on the back of a bet, it doesn’t look quite so momentous, does it? It tells us what investors are doing and feeling right now. It tells us where we are. But it doesn’t tell us where we’re going.

The point of all this is not to say that the Dow hitting 20,000 is a bad thing. The point is that it’s just a milestone, just a story, and we should be properly cautious about both. That’s especially true with regards to the Dow. As you probably know, the Dow is comprised of only 30 companies. Important companies, to be sure, but hardly representative of the overall economy. So 20,000 is not only a story, but a fairly limited one. It would be like watching only the first 30 seconds of the Super Bowl, and then trying to predict the outcome.

So as you read about this milestone or any other, don’t allow yourself to get too caught up in the story that goes with it. Don’t try to predict where we’re going just by looking at where we are.

Instead, do this:

Whenever the markets hit a new milestone, turn off the TV or shut down that internet browser. Try to tune out the noise. Then, focus on your own personal financial journey. Ask yourself: “Do I still know which direction I’m heading? Has anything changed that may have put me off track?” In essence, pull out your personal compass and see which way the needle is pointing. Are you going north or south? Then, make a list of your own milestones. What great things have you achieved lately? How far have you come? And what milestones are you looking forward to reaching over the next few years?

By doing this every time the financial media starts selling the latest story, you’ll actually be setting a wonderful habit: consistently reviewing your financial situation and planning your financial future. If there’s anything we’ve learned over the course of my career, it’s that this is the road to success.

After all, milestones are only meaningful when you know where you’re going … and on the road to success, the only story that matters is yours.

We will continue watching the markets, tracking portfolios, and keeping our clients’ financial compasses pointing north. In the meantime, please let us know if you have any questions or if there is ever anything we can do to help you work toward your own personal milestones!

Sources:
1 Landon Thomas, “The Dow Hit 20,000. Now What?” The New York Times, January 25, 2017.

2 Matt Egan, “Boom: Dow hits 20,000 for first time ever.” CNN Money, January 25, 2017. http://money.cnn.com/2017/01/25/investing/dow-20000-stocks/