Chad Willardson is the founder of Pacific Capital, best selling author of “Stress Free Money”, and elected city treasurer managing over 360 million dollars in investments. Today we dive into the reality of wealth creation, why so many people are stressed financially, and how to resolve it all to build the life of your dreams.
Read insights from Chad Willardson who explains that basics of a fiduciary financial advisor. If you’re serious about growing not only your business but your confidence and peace of mind, you need to learn how to grow your wealth.
“You Probably Have No Idea”
Are you paying commissions or unnecessary fees for investment management?
Can you imagine buying a new suit at Nordstrom without knowing how much it costs? Or filling up your car with gas and the pump doesn’t have a price?
It sounds pretty ridiculous. Unfortunately, you might not have a clue what you’re paying for your investments. In fact, 71% of 401(k) plan participants think there are no fees, while 92% admit they don’t know what the fees are. It doesn’t help that the actual fees you’re paying might be buried deep within the fine print of the investment company’s literature.
Some of the fees you may be paying include:
- Front-load sales charges on purchases of mutual funds
- Ongoing fees for mutual funds that don’t beat their benchmarks
- Excessive transaction fees for trading
- Hidden fees for buying or selling bonds
- Additional fees for proprietary funds
- High commissions on private investment deals
Eric and Mandy were working with an advisor who was a friend of theirs in college. They never got a bill and assumed they didn’t pay anything for his services – a great deal! They felt too embarrassed to question his practices, but decided to go through a Financial Life Inspection™ to have a second set of eyes take a look at their plan and investment mix. A statement review showed that they were paying their advisor 1.5% annually and also were in a mix of high commission products and mutual funds that had expense ratios of 1.5%, effectively paying over 3% per year. They had an uncomfortable discussion when they had to tell him they were transferring their money away, but they know they are being taken much better care of now.
Back to the original question: Are you paying commissions or unnecessary fees for investment management?
If you can’t answer this question confidently, then we should talk. You deserve to work with people who are open and transparent about the cost of their services. Through your Financial Life Inspection®, Pacific Capital shows you exactly what you are currently paying for investment management and ways to save you money.
“Create your own plan”
Do you know what will happen to each of your assets and liabilities when you become ill or when you pass away?
When you hear the words “wills, trusts, estate planning lawyers, guardians, powers of attorney, medical directives,” you might feel some anxiety. It all sounds very complicated and potentially expensive.
However, if you have children, elderly parents, savings, or a home, you would benefit from creating a formal estate plan. If you fall in the 55% of people that don’t have a will, you risk potentially leaving your family with high court fees and a drawn out legal process during this sensitive time. You might put off estate planning because you think you aren’t rich enough, you aren’t old enough, you’re too busy, or you simply don’t know where to start.
If you don’t have your own formal estate plan, your state laws will dictate how, when and to whom to distribute your assets.
Eric and Jill reached out for help after Jill’s dad passed away without a will. He had remarried late in life and his new wife was fighting for control over the assets. Jill knew her dad would want her to be taken care of, but without a will there wasn’t much they could do. Our Financial Life Inspection® will take a look at your current estate plan for any potential issues, or we’ll recommend steps to take if you’re just getting started.
Back to the original question: Do you know what will happen to each of your assets and liabilities when you become ill or when you pass away?
If you can’t answer this question confidently, then we should talk. Don’t leave your family picking up the pieces if something happens to you. Through your Financial Life Inspection®, Pacific Capital shows you exactly what you need for your estate plan and can help you get started or review your existing plan. Reach out to us to get started today.
“What am I paying you for?”
Do you know what your financial advisor is doing for you?
With over 300,000 financial advisors in the U.S., it can be hard to tell if you are working with the right person and to know if you are getting good value for what you are paying them. You’ve worked hard for your money and it can be a leap of faith to entrust your financial life to someone else. Vanguard outlinesand puts a value to working with an advisor instead of trying to manage your financial life by yourself.
As shown, financial advisors can add value in a variety of ways – all of which could help you. According to this study, the top three ways in which advisors add value is through behavioral coaching, spending strategy and asset location advice. This includes helping you identify how much to save, making sure you keep investing even during volatile markets, and making sure you have a personal financial planthat achieves your long-term goals.
This small list was determined to add about 3% in net returns annually. An independent fiduciary advisor can be a steady and professional guide to help you accomplish your goals and help prevent you from making meaningful financial mistakes.
Ron and Samantha were on track to meet their retirement goals until 2008, when the stock market crashed and Ron got scared. He sold out, locking in a 30% loss in their investments, and has been too nervous to get back in the markets. Now that they are planning on retiring, their retirement goals have been drastically cut since they missed out on substantialgrowth in the market. An advisor makes sense if you don’t have the time, the knowledge, or the emotional fortitude to make good investment decisions.
Back to the original question: Do you know what your advisor is doing for you?
If you can’t answer this question confidently, then we should talk. Through your Financial Life Inspection®, Pacific Capital will help you make sure that you are receiving quality advice at a fair price from your current financial advisor.
Are your important financial documents safe, secure and conveniently accessible to you?
You might remember the tragic news in September of 2016 that Jose Fernandez, one of baseball’s brightest young stars, passed away in a boating accident. He left behind a grieving family including his unborn daughter.
Fortunately, some small comfort could be found in the fact that his sports agent, Scott Boras, sets up “in case of death” files for each of his clients. All too often, after tragedies like this occur, your families are caught scrambling to sort out your life insurance policies, financial account information, loan obligations and other important documents they may need.
A shoebox, zip drive or file cabinet doesn’t cut it anymore. Keeping your documents stored securely online can help them from getting lost, stolen, or damaged. Additionally, you and your designated family members can access your documents and information from anywhere that you have internet access. Too many times family members need to spend unnecessary time and resources to gather their financial information in urgent situations. You need to make sure you’re protected during these times.
Some examples of documents you should have safe and convenient access to include:
- Wills and Trusts
- Investment Accounts
- Loan Obligations
- Life Insurance
- Medical Directives
- Powers of Attorney
- Property Deeds
- Recent Tax Returns
- Passports and Licenses
- Social Security Cards
- Birth Certificates
- Wedding Certificate
Ryan and Melissa had all their financial and important life documents together, with the help of their advisor, in a binder they kept easily accessible in their house. Unfortunately, an electrical failure caused a fire in their home that burned through their bedroom, taking the binder with it. They had no secure, electronic backup and spent months gathering the documents again. This time, after going through a Financial Life Inspection®,they will have a secure, online portal to store their documents.
Back to the original question: Are your important financial documents safe, secure and conveniently accessible to you?
If you don’t already have a cyber security and document storage plan set up, we should talk. Pacific Capital utilizes a secure, online portal to store your most important financial documents and can help designated family members obtain information should the need arise.
“Is it worth it?”
Do you have a written care management plan for your immediate family members?
You might be shocked to hear that if you reach age 65, you haveover a 70% chance of entering a nursing home during your lifetime. With the median annual nursing home rate being over $91,000, it’s important to protect yourself from this potentially devastating cost.
The earlier you plan for your future retirement health care expenses, the easier and cheaper it is. Almost 80% of the elderly that need long-term care require help from family members and friends and more than a quarter of expenses are paid out of pocket.
If you are healthy and young today, it’s hard to imagine that one day you may need assisted living care services. Some key things to think about regarding long-term care insurance include:
- Buying younger is better (and cheaper)
- Policy provisions vary widely – it’s important you understand them
- There are ways to make it more affordable by being flexible on the coverage terms
- Premiums also vary widely – it’s important to shop around
- Some policies have cash value and death benefits for your beneficiaries
Rob and Karen were adamant about staying on track for their savings goals for retirement, even if that meant planning a cheaper vacation or cutting back in certain areas. When Rob turned 50, his widowed mom had a stroke and needed constant care. Living off of Social Security, there was no way she could afford the type of care Rob wanted for her. With no long-term care in place, Rob was forced to dip into his retirement savings to take care of his mom. A Financial Life Inspection® will take a look at any possible ways this situation might play out for you. We’ll recommend long-term care insurance when it makes sense.
Back to the original question: Do you have a written care management plan for your immediate family members?
If you can’t answer this question confidently, then we should talk. Through yourFinancial Life Inspection®, Pacific Capital shows you exactly where your gaps are in your financial plan and how you better can take care of your family.
“The Sky Is Falling!”
Does your investment portfolio align with your goals and allow you to be stress-free?
Emotional headlines have been around as long as news companies have been in business to make money. With up-to-the minute news in the palm of your hand, it’s nearly impossible for you to avoid hearing about the crisis of the day. Fear is a strong emotion, and investing is one area where emotions don’t belong. Warren Buffet once said, “If you can’t control your emotions, you can’t control your money.”
You can reduce the stress and emotions of investing by having a clearly written investment plan that is aligned with your goals and focuses on what you can control:
- How much you save
- Investment diversification
- The cost of investing
Ron and Samantha were on track to meet their retirement goals until 2008, when the stock market crashed and Ron got scared. He sold out, locking in a 30% loss in their investments, and has been too scared since to get back in the markets. Now that they are planning on retiring, their retirement goals have been drastically cut since they have missed out on great market returns.
Back to the original question: Does your investment portfolio align with your goals and allow you to be stress-free?
If you can’t answer this question confidently, then we should talk. Your investment success depends on following a clear financial plan that allows you to avoid the noise and hype of the markets. Through your Financial Life Inspection®, Pacific Capital provides you a plan to optimize your investment portfolio to reach your goals.
“It was all a dream”
Do you have a clearly written withdrawal plan for retirement?
“A goal not written down is just a dream.”
When you think of retirement, your imagination may take you traveling to some tropical locations, playing more golf, skiing in the mountains or relaxing and spending more time with your children or grandchildren, etc. It’s easy to picture all the enjoyable activities you will finally be able to do with no more work obligations. However, the most important part of preparing is to make sure you are financially ready to live the retirement lifestyle you’ve been dreaming about.
Do you know how much income you need to be stress free and financially secure? Do you know how and from where your retirement income will be coming from? Knowing this is an essential step on your path to financial freedom, yet you might not. Over 2/3rds of people admit they have no idea how much money they will need. Nearly half of families have NO retirement savings at all!
A few common sources of retirement income are:
- Retirement investment accounts
- Social Security
- Rental real estate
Robert and Susan had always dreamed of having $1 million dollars. It was their “number” and they knew they would be set forever if they could get there. Finally, right before retirement, their accounts reached the magic level. However, they had never had any more of a plan than that and were spending $100,000 per year, an unsustainable 10% withdrawal rate. Fortunately, they decided to get their Financial Life Inspection®, and we were able to help them understand an appropriate level of withdrawals and how they could still meet their goals.
Back to the original question: Do you have a clearly written withdrawal plan for retirement?
If you can’t answer this question confidently, then we should talk. Through your Financial Life Inspection®, Pacific Capital will help you formulate a clear and specific plan for retirement withdrawals that maximizes your opportunity for success.