The Frailty of Life
By Jeff Headrick, Financial Planner
Photo by Ben White
As a financial advisor, it may be a misnomer to write about the frailty of life. After all, if I am in the business of making people money on their money by making solid financial recommendations, why would I waste time discussing anything other than perfectly blue skies?
Wall Street does seem to want financial advisors to portray an image of prosperity. And, this is the way it should be. Just not all the time.
For instance, I believe that every new investor I meet wants to hear and see a confident presentation from a confident financial advisor. Any new coach would want to portray the same for his or her athletes.
But I’ve learned through the years, that some people who really need financial advice don’t always seek it out unless their current financial season is a good one.
Those who have just lost a job, made poor decisions, or just plain had a bad year--- often feel uncomfortable sharing their woes. And to me, that’s incredibly unfortunate. It’s in the winter that the roots grow the deepest. If your current financial season of life has taken some hits, this could be a great time to dig in and make some soulful changes.
Life is Fragile
One of my first blogs last year was on budgeting. The driving force behind the post was that all of us need a budget—even those—who are in a season of prosperity. It’s just smart business. If life is fragile, and can change on a dime, then having had a banner year in 2019 just means that you better have a larger Murphy’s Law fund (AKA Emergency Fund) in 2020.
Murphy doesn’t care how financially healthy you think you are, or how impervious you might feel to financial loss. That’s why I recommend a solid financial plan for folks from just about all seasons of life. (You can read our Beginner’s Guide to Working with a Financial Planner here. )
Bankruptcy & Stupid Debt
Bankruptcy is something that many go through. If this has happened to you don’t feel bad. Many smart people and companies have had to file, and it is not the end of the world. Do you know what Coca-Cola, Kodak, Marvel, General Motors, and Radio Shack have in common? I’ll bet you guessed it. All have gone bankrupt at least once. While Ford Motor Company has never filed bankruptcy, its founder, Henry Ford, went bankrupt twice before he got it right.
But maybe your situation is not so dire. Maybe you just made some poor decisions with what Dave Ramsey would call “stupid debt”. Stupid debt is when you did something that was financially—well—not such a good idea. For example, you may have gone on a vacation that you couldn’t afford. Or, you may have spent some money before you had it by placing a purchase or two on your Visa.
Not to worry, you just have to pay the stupid tax. In other words, pay your debtors, plus interest.
Stay Inspired No Matter What
This Christmas season don’t get taken down by the past. The past is gone, and you can’t get it back. But you can learn from your mistakes—or misfortune—and get busy rebuilding.
Also, please know that not everyone’s financial health is perfect when they seek out a financial advisor. And yours doesn’t have to be either. Financial advisors are doing a better job these days helping people from all financial seasons because life, after all, is fragile.
About the Author
Jeff Headrick is an independent financial planner and wealth manager with Inspire Financial Planning. When Jeff was still in his teens his father died unexpectedly. While his father was a hard worker and a good provider, he did not have the best financial plan in place when he died.
This left his family at a tough financial crossroad. This personal experience, coupled with being inspired by Sir John Templeton, Warren Buffett, Dave Ramsey, and the laws of compound interest, prompted Jeff to enter the financial services industry in 1999. He has been helping people with their financial planning ever since.
Jeff lives in Wilmington, NC with his wife and two children. He spends most of his spare time just across the Intracoastal Waterway in Wrightsville Beach, enjoying the beauty of the NC Coast.
Charts and graphs contained herein should not serve as the sole determining factor for making investment decisions. All hypothetical scenarios are for illustrative purposes only. Investment Advisory Services offered through AlphaStar Capital Management, LLC a SEC Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results.
You cannot invest directly in an index. Consult your financial professional before making any investment decision. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Inspire Financial Planning and not necessarily those of AlphaStar Capital Management, LLC, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.