Month: March 2019

The Los Angeles Lakers

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The Los Angeles Lakers are iconic. A dynasty. They’re one of the great franchises – not just in basketball, but all sports. They’ve won 16 NBA Championships. Their roster has included legendary players like Magic, Kobe, Shaq, Wilt, Kareem, Mikan, Worthy, Baylor, Jamal, LeBron and The Logo.

I grew up watching the Laker’s in the ‘80s with Show Time. Their battles with the Celtics, Pistons and Bulls were epic. A Magic led fast break, or a Kareem sky hook was magical. Listening to Chick Hearn enhanced the experience.

This season the Laker’s have fallen on hard times with a dismal record of 32-41. They’ll miss the playoffs for the 6th year in a row and snap LeBron James playoff streak. He had made the playoffs every year since 2005 and appeared in eight consecutive NBA Finals.

LeBron James is arguably the greatest player of all time. Despite his pedigree, it wasn’t enough to get his team into the playoffs. His abilities couldn’t make up for a less than stellar roster. When Mr. James was winning championships, he was surrounded by strong teammates like Dwayne Wade, Chris Bosh and Kevin Love.

It takes more than one strong performer to generate wins. It takes a team balanced with specialists.

Most investors are familiar with story stocks like Facebook, Apple, Amazon, Netflix, or Google (Alphabet). These high-flying brand names probably anchor most individual portfolios. It may be easier to identify these companies because they’re constantly mentioned on the airwaves and social media. But how do you expand beyond these highfliers? How do you build a supporting cast? How do you identify the 15th best stock in your portfolio?

Is it possible for a superstar company like Apple or Amazon to carry a portfolio of average, or below average, stocks? If you owned Weight Watchers, Camping World, Stamps.com, PG&E, PetMed Express, Red Robin Gourmet Burgers, Shutterfly, Kraft Heinz, Tupperware, United Rentals or Zillow your portfolio would have had disastrous results as each of these stocks was down more than 35% last year.

A portfolio of individual stocks may leave you exposed to concentrated losers, especially if you only own a handful of companies.  In addition, your portfolio may ignore categories like small companies, emerging markets, real estate holdings, or (gasp) bonds.

A diversified portfolio of low-cost mutual funds or ETF’s will give you an opportunity to find winners around the globe.

Dimensional Fund Advisors Global Allocation Portfolio is an excellent example of a diversified portfolio. The fund’s asset allocation is 60% growth, 40% income. It owns more than 13,500 securities scattered around the globe through eleven different mutual funds with exposure to stocks, bonds and real estate. It has generated an average annual return of 9.47% for the past 10 years.[1] It’s not dependent on one superstar stock. It performs well because it’s diversified with a strong supporting cast.

Rather than trying to find one stellar stock, build your investment portfolio with a broad mix of low-cost mutual funds based on your financial goals. Your diversified account will give you exposure to several magnificent companies. It will also remove anxiety by eliminating the need to find the “best” stock. You’re no longer dependent on the daily movements in the stock market because you now own thousands of investments from around the world.

So, go ahead and draft a portfolio of low-cost funds based on your goals and start winning the investment game today!

The game’s in the refrigerator, the door’s closed, the light’s out, the eggs are cooling, the butter’s getting hard and the Jell-O’s jiggling. ~ Chick Hearn

March 26, 2019

Bill Parrott, CFP®, CKA® is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.

 

[1] YCharts: March 2009 – March 2019

Are You Behind The 8-Ball?

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Several years ago, I met with a couple in their mid-fifties who reached out to me because they needed help with their budgeting. I had known them for a few years, and it appeared they were doing well based on our past conversations and their Facebook posts. Looks can be deceiving, however.

As I reviewed their financial situation, I was shocked at what I saw. They didn’t own their home and they had a mountain of debt.  Their only asset was a small checking account. If they attacked their debt aggressively, it would have taken them more than fifteen years to become debt free. This assumes they were willing to curtail their spending, which was going to be a tall order. Their high debt level was robbing them of their ability to establish an emergency fund or save for retirement.

It will be challenging for this couple to make ends meet, especially in retirement. With zero assets saved for retirement, they’ll have to rely on Social Security. The average Social Security check is $1,400.[1] If they both received this same amount their annual retirement income would be $33,600 – before taxes.

In addition, one of the spouses was reluctant to go back to work because most of the jobs being offered were beneath his skill set and level of training.

During my career I’ve met with about a half-dozen families who were in similar financial situations. It’s heartbreaking. As a financial planner, I never want to tell anybody bankruptcy is their best option, but, on occasion, it is.

What should you do if you’re behind the financial 8-ball? Here are a few suggestions.

  1. If you’re in a financial hole, stop digging. Reduce your expenses. Stop spending. Create a budget. Cut up your credit cards. After analyzing your spending habits create a needs-based budget. What are needs? Food, clothing and shelter. Until your financial situation improves put your wants and wishes on hold.
  2. Reduce your financial footprint. Rent a smaller home. Sell one of your cars. Bring your lunch to work. Brew your own coffee. Get rid of cable. Play board games with your family. Visit a National Park for vacation.
  3. Contact your bank or credit card companies to negotiate better terms. They might reduce your interest payment or waive late fees. According to Credit Karma they may offer you a hardship plan due to a job loss or illness.[2]
  4. Find a non-profit or credit-counseling company to help you reign in your debt. These organizations will help you with budgeting and debt consolidation.
  5. Get a job. Any income is better than no income. As I mentioned, the husband in this article was reluctant to get a job that was beneath his social status. The current unemployment rate is 3.8% so finding a job shouldn’t be too difficult. At my local Home Depot, they have scores of orange signs screaming: “We’re hiring.” A sales associate at Home Depot can make between $11 to $14 per hour.[3]
  6. Cut your kids loose? Is it time for your adult child to support themselves? Are they ready to leave the nest? According to a recent Barron’s article, parents are spending $500 billion per year supporting adult children and their families.[4] This money is a drain on the parent’s resources forcing many to continue working well beyond their golden years. Chris Hogan, author of Everyday Millionaires, reports that 71% of millionaires do not provide monthly support to children over the age of 25. I love my daughter dearly, but after college she’ll need to start working.

Life is hard and balancing financial resources is difficult. I’m currently teaching a financial class at my church and one of the biggest benefits from the people attending has been identifying how their money is being spent. If you know where your money is going, you can make life changing decisions today. I know you can do it!

The rich rule over the poor, and the borrower is slave to the lender. ~ Proverbs 22:7

March 23, 2019

Bill Parrott, CFP®, CKA® is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.

 

 

[1] https://www.fool.com/retirement/2018/10/16/heres-the-average-social-security-benefit-for-2019.aspx, Maurie Backman, October 16, 2008

[2] https://www.creditkarma.com/advice/i/negotiate-debt-credit-card-company/, Satta Sarma Hightower, December 4, 2018

[3] https://www.payscale.com/research/US/Employer=The_Home_Depot_Inc./Hourly_Rate

[4] https://www.barrons.com/articles/how-to-protect-your-retirement-from-your-kids-51553285595, Reshma Kapadia, March 23, 2019

Beware Ten Year Track Records

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Mutual fund companies and asset managers will start touting their 10-year performance record with dazzling numbers. The marketers will try to lure you in based on their outsized performance. But, before you invest, dig deeper. Ask to see their 15-year track record. If they don’t have one, review their performance from 2008. How did the fund perform during the Great Recession?

These companies are rejoicing, as they should, because it’s March 2019 and they’re now able to report their 10-year track record without including the disastrous year of 2008. The bear market is finally in the rearview mirror for reporting purposes.

How significant is this change? Well, the 10-year average annual total return for the S&P 500 from March 2009 to 2019 has been 16.5%. By comparison, the 10-year return ending 2018 was 7.13% – a difference of 9.37%! Since 1926 the S&P 500 Index has averaged 10%, so the recent returns are well above the historical average.

Of course, the returns are what they are, but they’re exaggerated due to the sharp sell-off during the Great Recession when the S&P 500 Index fell 53%. The index bottomed on March 9, 2009 and then it went on an extraordinary run for the next 10 years, rising 317%! If, and it’s a big if, you invested $10,000 at this juncture it would be worth $41,750 today.[1]

Despite these outsized gains a majority of U.S. Large Cap Funds still underperformed their index. In fact, only 10.9% of actively managed mutual funds beat their index over the past 10 years. The funds with the lowest cost did slightly better as 17.3% of this group beat the index. However, funds with high fees were destroyed as only 2.1% managed to do better than the market.[2]

Here are a few suggestions to help you build a mutual fund portfolio.

  • Invest in low-cost mutual funds managed by Dimensional Fund Advisors or Vanguard. Adding Exchange Traded Funds (ETFs) from Blackrock or Vanguard will help keep your costs low.
  • Diversify your assets across large, small and international funds. Adding bonds and real estate holdings will further diversify your portfolio.
  • Build your portfolio around your financial goals and risk tolerance. These two ingredients will help determine your asset allocation.
  • Time is your friend when investing in the stock market. A time horizon longer than five years should include a heavy dose of equity funds.
  • Rebalance your investments once or twice per year. This will keep your asset allocation and risk tolerance in check.
  • Review past returns for as long as the data is available on your fund. You can research this data on several sites including Yahoo! Finance, Morningstar, YCharts, or the Wall Street Journal.
  • Analyze the fee structure. Avoid funds with a front-end sales charge, a deferred sales charge, or a 12b-1 fee.
  • Incorporate a buy and hold philosophy. Don’t fret the daily fluctuations in the market or listen to the “experts” about the pending correction.

This past decade has treated investors well. What will the next decade bring? Who knows, but if history is a guide, it will be a good one.  Stay invested my friends.

I can only control my own performance. If I do my best, then I can feel good at the end of the day. ~ Michael Phelps

March 20, 2019

Bill Parrott, CFP®, CKA® is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog. Past performance does not guarantee future results.

 

 

 

 

 

 

 

[1] YCharts – March 9, 2000 – March 20, 2019

[2] https://office.morningstar.com/research/doc/Feb%2007%202019_US_ActivePassive_Barometer_-_7_Takeaways_from_the_2018_911724, Ben Johnson, 2/7/2019

7 Ways to Handle A Windfall

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Growing up, my friends and I often attended the horse races. One afternoon, I hit an exacta and won $150 – a fortune for me at the time. I bought dinner for my friends with my windfall.

Financial windfalls can come from various sources like an acquisition, year-end bonus, tax-refund, or lottery winnings. A windfall is a relative term, of course.  A $10,000 windfall is pocket change for Bill Gates, but life changing for someone with limited means. Regardless of the source or the amount, you’re now faced with several financial decisions. Here are 7 ideas to help you with your new-found wealth.

Give. Giving a portion of your windfall to help others will benefit many. According to the World Bank, half the world lives on less than $5.50 per day, so donating your money to an organization or group you support will pay dividends to a multitude of people.[1]  In addition, you’ll be able to write off your contribution on next year’s tax return.

Reduce your debt. If your windfall is substantial, reduce, or eliminate, your debt. Let’s say you have 20 years left on a $300,000 mortgage. If you paid off your note, you’d save about $238,000 in interest and $19,000 in annual mortgage payments. Can you find a better way to invest or spend $19,000 per year?

Create an emergency fund. Use your bounty to establish an emergency fund. Your enhanced cash flow can be used as a financial buffer. A recommended amount to save is 3 to 6 months of expenses deposited in a savings account or money market fund. If your expenses are $10,000 per month, then the value of your emergency fund should be $30,000 to $60,000.

Invest. Investing your haul will help grow your nest egg. A $10,000 investment in the Vanguard 500 Index Fund five years ago, is worth $16,400 today.[2]

Spend. Do you want a new boat? Car? If your financial house is in order, go for it. Spend a portion of your windfall on something you’ve had your eyes on for a while.

Take a trip. Hiking in the mountains or walking on the beach is good for the soul. Spending money on experiences may be more beneficial than buying things. A lifetime of family memories is worth the expense. Top travel destinations this year include the Amalfi Coast, Machu Picchu, and Yellowstone National Park.[3]

Remodel. Is your kitchen ready for an upgrade? Is it time to put in a swimming pool? Now’s your chance. The projects generating the best payback are kitchens, garage doors, and decks.[4]

Before you make any financial decisions spend time deciding on the best course of action for you and your family. Avoid an impulse purchase. Hold a family meeting to get input and buy in from your spouse and children. Regardless of what you do, don’t borrow to leverage your windfall. Pay cash and stay out of debt.

Working with a financial planner to help you decide on how to proceed would be a wise decision. A planner can guide you and your family on the best way to allocate your resources.

I almost forgot, congratulations on your windfall!

Money can’t buy happiness, but it will certainly get you a better class of memories. ~ Ronald Reagan.

March 19, 2019

Bill Parrott, CFP®, CKA® is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.

 

 

[1] https://www.worldbank.org/en/news/press-release/2018/10/17/nearly-half-the-world-lives-on-less-than-550-a-day, website accessed March 18, 2019

[2] Morningstar Office Hypothetical Tool: 2/28/2014 – 2/28/2019

[3] https://travel.usnews.com/gallery/the-worlds-30-best-places-to-visit-in-2018-19?

[4] https://www.bankrate.com/finance/real-estate/best-home-fixes-for-the-money-1.aspx, By Natalie Campisi, April 13, 2018

Operation Varsity Blues

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Operation Varsity Blues is the FBI investigation used to charge 50 people “with being part of a long-running bribery scheme to get privileged kids with lackluster grades into big-name colleges and universities.”[1] The FBI sting netted two actresses: Felicity Huffman from Desperate Housewives and Lori Loughlin from Full House. In addition, 33 parents have been charged including the former CEO of PIMCO and the founder of TPG Growth.[2]

The alleged scheme involved bribes, donations to fake charities, changed SAT and ACT scores, and “athletes” recruited for sports they never played.

The amount of money involved in this alleged scheme is staggering – $25 million!  Lori Loughlin and her family reportedly paid $500,000 to get their daughters admitted to USC as part of the crew team though they don’t row.[3]

We want the best for our children, of course, but how far should we go? Does attending the “right” school matter? Is a private school better than a public one?

Chris Hogan, the author of Everyday Millionaires, sheds light on this subject. According to Mr. Hogan, 62% of millionaires graduated from a public college, 8% attended a junior college and 9% never graduated. In addition, 43% of millionaires had a B average or lower in college.  Former president George W. Bush said, “To those of you who received honors, awards and distinctions, I say well done. And to the C students, I say you, too, can be President of the United States.” Mr. Bush graduated from Yale with a GPA of 2.35.

The University of Wisconsin currently has the most CEOs on the Fortune 500 list with 14. Wisconsin is a public university.[4]  The current tuition to attend Wisconsin is $22,500, including room, board, books and supplies.[5] Go Badgers and On Wisconsin!

If you have children who will eventually attend college, here are a few suggestions to help you with your journey.

  • Invest early and often in a 529 plan. The money will grow tax-free and when you’re ready to pay tuition your distributions will also be tax free.
  • If you have the financial resources to send your kid to a small private school, then go for it. However, if you don’t, then explore the junior college – state college combination. You and your family will save hundreds of thousands of dollars in tuition. You might avoid student loans as well.
  • Involve your children in charity work. Let them help others through volunteering, mission trips, or tutoring. This will give them a strong work ethic and keep them humble by serving others who are less fortunate.
  • Get them involved, legally, in athletics, band, choir, theater, or robotics. Extracurricular activities will build character. It will also give them the gift of team work and fair play.
  • It’s okay for your child to work during high school and college. Earning a paycheck and learning the language of business will serve them well for decades. Working at a fast-food restaurant, grocery store, or big-box retailer will teach them much about life. It may even provide a better education than they’ll receive in the classroom.
  • Grandparents, and others, can give $15,000 per person, per year including your child. Utilizing the gift tax exclusion is a great way for grandparents to reduce their estate and help pay for college. If grandparents are willing and able, this is a great funding option.

I was disgusted and upset as I read articles about the scam. The fraud and deception involved is off the charts. More importantly, there’s some kid out their working a part time job trying to save money so she can go to college and her spot may have been taken by one of these fraudsters.

“You got to be the dumbest smart kid I know.” —Bud Kilmer, Varsity Blues

March 13, 2019

Bill Parrott is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.

 

 

 

 

[1] https://www.washingtonpost.com/podcasts/post-reports/operation-varsity-blues-a-college-entrance-bribery-scheme/?noredirect=on&utm_term=.9bb7f2a0c178, March 12, 2019,

[2] https://www.wsj.com/articles/who-are-the-33-parents-charged-in-the-college-admissions-cheating-scandal-11552443487?tesla=y&mod=article_inline, March 12, 2019, WSJ Staff

[3] https://www.wsj.com/articles/lori-loughlins-daughter-a-social-media-celebrity-is-caught-up-in-college-admissions-scandal-11552430211?mod=article_inline, March 12, 2019, Erich Schwartzel

[4] https://www.cnbc.com/2018/11/28/these-30-colleges-produced-the-most-current-fortune-500-ceos.html, November 29, 2018, Abigail Hess

[5] Money Guide Pro

Free Solo

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Free Solo is a remarkable movie about Alex Honnold’s ascent of El Capitain. It was a masterpiece of a movie and the voters agreed as it won an Academy Award® for best documentary feature. The New York Times said, “Alex Honnold’s Free Solo climb should be celebrated as one of the great athletic feats of any kind, ever.” I concur.

My palms are still sweating thinking about his climb, especially when he successfully completed his karate kick maneuver near “The Boulder Problem.” He climbed the Freerider route that has 30 pitches and “it was newsworthy when a climber was able to summit using ropes for safety.”[1]

El Capitain is a beast and it dominates the Yosemite Valley. It’s 3,000 feet from base to top, an imposing vertical wall of granite.

Mr. Honnold didn’t wake up one morning and decide to free solo El Capitain. He spent years planning his route, working with his team, and taking copious notes. He was singularly fixated on achieving his mission.

Investors can learn much from Mr. Honnold’s incredible achievement.  Here are a few ideas that you can employ today.

Team. Mr. Honnold did the climbing, but he was surrounded by a team of elite climbers including his long-time climbing partner, Jimmy Chin. Mr. Chin and his team not only filmed the climb, but they helped him plan much of his ascent. Mr. Honnold consulted his team constantly. He and his team climbed El Capitain often exploring routes, holds, angles, nooks, and so on.

A team of advisors can help you achieve your goals. Working with a financial planner, CPA, and estate planning attorney will provide you with insight and data to make sure you’re making the best decisions for you and your family. Surrounding yourself with wise counsel is, well, wise.

Plan. He journaled often, taking notes whenever he had the opportunity. His notebook was filled with detailed notes and figures about his route.

Committing your plans to paper and taking notes about your progress can improve your investment and planning results. A quick review of your notes to make sure you’re on the right track is recommended. Your plan and journal will be your financial guide.

Live. He lived (lives) frugally and well below his means. In fact, he lived in a van down by the river during much of the shoot and it had everything he needed to live. When he and his girlfriend bought a home in Las Vegas he looked uncomfortable and even more uncomfortable shopping for a refrigerator. He finally settled on a small refrigerator, one too small for the space in his house. His house looked like the Taj Mahal compared to his van.

Living below your means is paramount if you want to obtain financial success. Controlling your expenses and watching your bottom line will allow you to live a stress-free financial life. Lowering your expenses will help build margin in your life allowing you to do the things you love.

Patience. It took him nearly 4 hours to complete the climb. And, prior to his amazing climb, he abandoned his first attempt. He was patient and deliberate with each move. At times he moved quick, others slow – his moves were calculated. At one point during his climb, he had to descend before he could ascend.

Investing success takes time – years, so don’t worry about the short-term moves in the market. Concentrate building wealth slowly, over time. Avoid quick-rich schemes and other promises of short-term profits.

Give. Mr. Honnold has established the Honnold Foundation (www.honnoldfoundation.org). Its mission is to reduce environmental impact and address inequality by supporting solar energy initiatives worldwide.

You can follow his lead by establishing your own foundation, contributing to a donor advised fund, or donating to organizations you support. Using your resources to help others will benefit many, including yourself.

You may not want to free solo El Capitain, or any other rock for that matter, but his techniques and tactics may help you improve your investment results. Focus on your long-term goals, follow your plan, save often, live below your means, and give to those you support.

Happy climbing!

Trust in the Lord forever, for the Lord God is an everlasting rock. ~  Isaiah 26:4

March 8, 2019

Bill Parrott is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog. I went rock climbing once in Joshua Tree and it was a blast. I used a rope.

 

 

 

 

 

 

[1] https://www.nationalgeographic.com/adventure/features/athletes/alex-honnold/most-dangerous-free-solo-climb-yosemite-national-park-el-capitan/ Mark Synnott, October 3, 2018.

A Watched Pot

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A watched pot never boils, or so I’m told. When I was much younger, I put this theory to test and, to my surprise, the water did boil as I kept my eyes glued to the pot.

Watching water boiling, grass growing, or paint drying is boring and a waste of time. Similarly, watching your investment accounts daily is not productive. Your investments will rise or fall whether you watch them or not. In fact, they may perform better if you don’t watch them at all.

In a study by Greg B. Davies and Arnaud de Servigny the authors discuss how often people check their investment accounts and their corresponding performance. They found that people who check their account balances daily experienced a loss 41% of the time. Individuals who checked their balances every five years experienced a loss about 12% of the time and those who checked it every 12 years never lost money.[1]

Last December stocks gyrated dramatically. If you looked at the stock market on Christmas Eve, it was down 3%. Had you waited until the day after Christmas to check in on the stock market, it climbed 5%. The Dow Jones averaged a 9.4% average annual return for the past five years. A $10,000 investment in the Dow Jones Industrial ETF (DIA) five years ago is now worth $17,798. However, during this impressive run, the market experienced several down days. The Dow had 107 down days of 200 points or more and two days where it fell over 1,000 points. And, 45% of the time, the index closed in negative territory. If you were micro-managing your portfolio, your urge to sell may have been high during these down days.

Trying to time the market is near to impossible. Rather than focusing on the daily moves in the market, pay attention to those things you can control. Here’s a list of items you should be watching.

  • Focus on your long-term goals and review them annually. Your goals will help guide your financial decisions.
  • Review your accounts quarterly or semi-annually. If they are allocated properly, you won’t need to make daily adjustments.
  • Review your fees often. Read the small print to make sure your fees are inline, and you’re not being over charged for services you didn’t agree to.
  • Check your credit reports annually. Credit Karma also recommends checking them before a major purchase or applying for a new job.[2]
  • Credit card and bank statements should be viewed monthly. A scan of your statements is wise to make sure your debits and credits are being applied correctly.
  • Utility bills and other household statements should be checked semi-annually. Your statements may be delivered electronically, and your payments deducted automatically from your bank account, so checking these accounts for additional fees and balances is recommended.
  • Your asset allocation should be reviewed annually. Over the course of a year, your accounts may move substantially. If your account balances are not in line with your risk profile, rebalance them to your original asset allocation.
  • Your financial plan should be reviewed every two to three years.
  • If you have a family will or trust (and you should), it should be reviewed every five years unless you have a major lifestyle change.
  • Your insurance policies – home, life, auto, should be reviewed annually.

Keeping a watchful eye on your household metrics is paramount. It’s important to be on guard and vigilant when watching your finances and other items that are important to your family, so you don’t get boiled accidentally.

Be alert and of sober mind. Your enemy the devil prowls around like a roaring lion looking for someone to devour. ~ 1 Peter 5:8

March 5, 2019

Bill Parrott is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.

 

 

 

[1] Greg B. Davies, Behavioral Investment Management: An Efficient Alternative to Modern Portfolio Theory (McGraw-Hill, 2012), p. 53. The Behavioral Investor by Daniel Crosby, Ph.D. – Kindle Edition, location 1423, accessed 2/10/19.

[2] https://www.creditkarma.com/credit-cards/i/how-often-check-credit-reports/, by Christy Rakoczy Bieber, 12/4/2018.