Charles A. Smith, CEO

The Cumberland Financial Group LLC

 

 

Introduction:

 

Forty years in the financial services industry have taught me to be patient about many things, eg, markets advancing and retreating, industries rising and falling, experts enjoying their moment of fame.   There is one constant, however, that appears to defy market conditions.   It is the constancy of financial planning mistakes made by most people. I would like to share a short list with you. 

 

 

 

Orphan money is money that we are not paying attention to. The best example is a 401-K account we left with a former employer. The department of labor suggests there are literally millions of these accounts valued at several trillion dollars.

 

Orphan accounts often reflect outdated asset allocations, investment options that are limited or restricted, lack of professional advice; cumbersome account access and quality customer service often diminishes for ex-employees. When your account is out of sight, the account is easily out of mind.

 

The glaring need is for Americans to reclaim their orphaned money. While every situation is not the same one simple and effective solution is to roll-over orphaned accounts into a “self-directed” IRA account.   These accounts offer unlimited investment options more consistent with your time horizon, risk tolerance and financial goals. 

 

Never allow your 401K accounts to languish. Reclaim them and manage them responsibly.

 

 

 

Going naked in public will certainly get you arrested along with a few nights in the local slammer. Ironically, 70.2% of Americans go “legally” naked everyday and no one seems to notice….until a problem arises and then, it’s too late.

 

Two recent surveys indicate “that 210 million adults….have not prepared a will” and that “69% of Americans have no living will or medical directive.” “Just 27%...have created powers of attorney for healthcare.”   When we die intestate (without a will) responsibility for distributing our personal and business property becomes the responsibility of the state. This may result in disinheriting those closest to us.

 

 

Every adult in America needs a will valid in their state of residence, a living will describing the medical care they desire, a health care surrogate and a durable power of attorney. Going naked might be fine for babies but it is a formula for disaster for adults who have assets and loved ones.

 

 

 

Denial is not a river in Egypt. Denial is the familiar way we as humans deal with inconsistencies in our lives.   When we are confronted with inconsistencies our natural tendency is to deny them or make excuses for them. Stated simply, we refuse to face reality.

 

When it comes to financial planning, denial has a familiar sound:

 

 

The remedy for denial is to accept personal responsibility. “Who is responsible for me?” The answer is, of course, “I am.”   I am always the best resource for solving my problems. 

 

 The American College reports that “31% of the American workforce has no savings for retirement.”   The Life Foundation reports that “31% of households with children in America have no life insurance.” The net savings rate in America in 2009 is just below -1% according to the Savings and Loan League.

 

This evidence suggests a challenging inconsistency in our financial planning behavior. The source of this inconsistency is denial.  Only when I am willing to accept responsibility for my life and hold myself accountable will denial lose its grip. No more excuses.

 

Simply stated, “If it is to be, it’s up to me!”

 

______________________________________________________________________________

 

Charles A. Smith CLU, ChFC, AEP

Chartered Financial Consultant

Investment Advisor Representative

 

Charles Smith does not provide legal advice but will work with your qualified attorney or independent tax or legal advisor.  Charles Smith is a Registered Representative offering securities through Questar Capital Corporation (QCC), Member FINRA/SIPC. 5701 Golden Hills Drive Minneapolis, MN 55416,888-446-5872. Advisory Services offered through Questar Asset Management (QAM), a Registered Investment Advisor. The Cumberland Financial Group LLC is independent of QCC and QAM