The Verus Team

The Timing Matters

Written by: Derek Majkowski. Any opinions are those of Derek Majkowski and not necessarily those of RJFS or Raymond James.

Recently I sat with two sets of clients that are both affluent and successful in their respective lives and careers.  One couple is in their mid-forties, and the other is in their mid-sixties.  One set of clients had been with us for almost 10 years, and the other couple was a recent introduction from another relationship.  Both wanted to meet in order to get caught up on their finances, organize / reorganize their affairs, and engage / reengage on some of their financial goals and priorities.

As we held these meetings, I was struck by how both had similarities in their respective careers, family paths, and successes, but they were in completely different positions financially.  Of course there are different general goals and objectives when you are in your 40’s vs being in your 60’s, but it was the differences in organization and flexibility over their respective affairs that really stood out.  

One couple had plenty of liquidity and flexibility in order to address any potential short-term financial surprises, and they were in a position to thoughtfully reassess their current life and prioritize their finances accordingly.  They have been putting funds aside for long-term investments, and were financially addressing, or preparing to address, goals that would require money, or tackle risks that could derail their future plans.  

They committed to some form of planning and organization, and had a good balance between liquid, less liquid, and illiquid assets.  They addressed their liabilities, insurance, and estate planning needs to some degree, and while constantly changing, have an overall good handle on their affairs.  The craziness of life had caused things to be difficult to predict, but they were at a point recently where they felt it was a good time to review their overall affairs.

With the other couple, there was less liquidity, and thus less flexibility.  The assets, while not insignificant, are heavier in the illiquid and less liquid categories.  To date, there has been less attention paid toward the things that could derail their future plans, and it appeared as though there was little focus paid, thus far, to their insurance, liability, and estate planning.  In fact, it was the estate attorney who suggested they come and see us for a consultation.

As I’m sure you are recognizing, the couple that had been with us for 10 years were much more organized and prepared to discuss and address their life today, because they took the steps to seek assistance and guidance 10 years earlier.  As we worked with these clients along the way, we educated and discussed with them the importance of being liquid and flexible in their approach to things, while also prioritizing and addressing other longer term aspirations.  We made it a point, based on the realities of their life, that we assist them with making timely decisions in preparation for the many unknowns that can come along in life. 
 
This approach has helped and conditioned these clients to not sweat the short-term things that can require or impact money, but also allow them to be thoughtful and constructive around their long-term goals and objectives.  They are in a much better position, over time, to prepare for and navigate their future. 

The other couple took it upon themselves to manage their own financial affairs over the years.   This point is not a criticism, it is simply a fact. In reviewing their affairs now, there are several things that will have to be weighed and considered all at once, rather than something that can be prioritized, managed, massaged, and tweaked over time.  Adding the fact that this is the couple in their sixties, and you are putting a bit more stress on the timing, planning, and prioritization of an effective strategy.  

Unfortunately, we see circumstances like this many times.  A scenario where someone manages their own affairs over the years with no real cohesive plan or understanding of the consequences or trade-offs of their decisions.  This does not necessarily mean that this person has not built up wealth or saved.  It is not that simple.   

What it means is that a financial plan and strategy is a long-term evolving thing that can change and be impacted by many variables that occur during one’s life.  These may be controllable or uncontrollable events.  The sooner you step back and get a comprehensive plan pulled together, the easier it is to address the needs of tomorrow, or prepare for the hazards that could throw you off track.

When we discuss this with people, there is this perception that you need to have a certain amount of wealth before you can begin addressing a plan.  That is why some believe it makes sense to begin planning later in life.  Nothing could be further from the truth.  Like preparing for a marathon, you do not start the first day running 26.2 miles.  It takes time and conditioning to prepare and tackle such an endeavor.  

Beginning a financial planning and “getting organized” journey is something that starts small and slowly, and builds over time.  One needs to be conditioned, and at times coached, in order to prepare for the long-term race.  The sooner someone begins that process, the sooner one becomes conditioned for that ongoing and unpredictable journey.

Too many times, we meet people who think they have been preparing for a marathon when all they have been doing is sprinting out of the blocks and tackling select and specific topics.  This approach typically addresses some parts of a strategy, and can do so effectively.  However we have found in many situations, that those who address just parts of a strategy often neglect others.  
 
The idea of getting some coaching or assistance when you are ready, or feel makes sense based on the size of your balance sheet, is not the right way to look at it.  Just like preparing for a race, or getting in shape, you need to be conditioning early and in a disciplined fashion.  The sooner one begins planning and getting organized, the sooner it becomes more habitual for a longer term healthier lifestyle.

When comparing the two sets of clients I mention herein, I know that the clients in their mid-forties will be far more prepared for their life and financial choices when they are in their sixties.  They have already spent a decade preparing and conditioning for their financial life and lifestyle.  All we need to do is change and reconnect on the priorities.

As for the couple in their sixties?  Well the good news is that they are looking to get organized, and to keep with the analogy, it is always a good time to get into shape.  Like most things as one gets older however, it just may be a little harder, or require a little more recovery time.  It’s tougher to undo and change things that we have been conditioned to do for quite a while.  Eventually though, one should see results.


Raymond James Financial Services, Inc and its advisors do not provide advice on legal issues, these matters should be discussed with a legal professional. Working with a financial professional does not ensure future investment performance or guarantee a favorable outcome.