October is Financial Planning Month
Hello Eagle Wealth Community,
Everyone seems to be caught up in the autumn season. Pumpkin spice lattes and Halloween decorations are around nearly every corner. But here at Eagle Wealth, we’re celebrating a different fall tradition — October is Financial Planning Month! (Okay, so it may not be quite as thrilling as Oktoberfest or a haunted house but we’re excited!).
This fall we’ll explore the components of a financial plan. We’ll begin with how to build a solid financial foundation, and then we’ll touch on the importance of tax efficiency in retirement. Speaking of retirement, we’ll share 5 ways to stay confident in retirement, followed by the 7 principles of long-term investing, and we’ll finish the series off with a big question — “what’s your long-term focus”?
We talk an awful lot about financial planning because it’s the answer to most of life’s big money questions. Have I saved enough for retirement? When should I begin Social Security? Can I buy a boat? The answer is almost always “let’s check your financial plan”.
Last year, a Gallup poll found that just 38% of investors had a written financial plan. Gallup asked those with no written financial strategy why they lacked one. The top two reasons? They just hadn't taken the time (29%), or they simply hadn't thought about it (27%).
If you’re already part of the Eagle Wealth community then you’re ahead of the curve with your financial plan. But we think Financial Planning Month is an excellent opportunity to review how we develop a plan and why you can trust it. Here are our 6 steps to building a financial plan.
- Take a deep dive during the discovery process. When creating a plan, we take your entire life picture into consideration. We look at the objective information like your age, income, expenses, assets, liabilities, liquidity, and retirement accounts. But the subjective details of your life are just as valuable. That means talking about your health, life expectancy, and unique family circumstances. We ask questions about your values, expectations, and expected earning potential. Most importantly we discuss your life goals, needs, and priorities.
- Set a realistic timeline for your goals. During our meetings, we help you identify your potential goals. Then, our team makes reasonable assumptions and estimations on factors such as inflation, tax rates, and investment returns, checking to see if you can meet your objectives within your time frame. Having conversations about your aspirations along with realistic parameters helps you turn your hopes into actionable goals.
- Craft a personalized investment approach. When reviewing investment approaches, we consider your goals, time horizon, and risk tolerance. The result is a personalized investment strategy that aligns with your risk tolerance and values.
- Stress-test your plan. The true success of a financial plan only becomes known when it’s put to the test. That’s why we run through hypothetical scenarios with you. We can’t predict the future, but we can plan for ebbs and flows in the financial markets. Our powerful financial planning software helps us model how decisions made today could impact the future.
- Think of tax management in the long term. Tax rules are constantly changing, and there is no guarantee that the tax landscape will remain the same in the years ahead. That’s why we create an overall tax management strategy, to help save you money now and in the long run. We coordinate with your tax professional, and we now offer our own Eagle Wealth tax services too. Read more about it here if you’re interested in streamlining your tax preparation.
- Monitor progress and update the plan every year. Creating a financial plan is an ongoing process. As life’s circumstances change, we continue to monitor the progress of your plan and track the success of your goals. Our review meetings are most meaningful when we learn what’s on the horizon for you. This helps us shift our recommendations and implement new strategies.
Feeling confident in your plan is critical when life throws unexpected curveballs at you. But you’re not in this game alone. You have a team behind you, cheering you on as you reach your goals.
Your Eagle Wealth Team
It’s harvest time for Virginia and her family and they’re busy baking with ingredients straight from their garden. This month they made a decadent sourdough loaf with jalapeno and cheddar cheese. Here’s the recipe they followed if you want to join in on the fun.
What marks the beginning of the fall season for you?
The Week on Wall Street
The overhang of bumping against the federal debt ceiling was lifted last week with an agreement to extend the debt ceiling through early December, helping propel stocks to a weekly gain.
The Dow Jones Industrial Average increased by 1.22%, while the Standard & Poor’s 500 added 0.79%. The Nasdaq Composite index gained 0.09%. The MSCI EAFE index, which tracks developed overseas stock markets, was flat (+0.11%).1,2,3
Debt Ceiling Concerns Evaporate, for Now
After suffering losses on concerns over delays with raising the federal debt ceiling, stocks rebounded as the Senate moved toward finalizing a debt ceiling agreement. While the agreement is only a short-term solution, it was enough to embolden investors to buy stocks.
The week’s rally ran out of gas on Friday, however, on a surprisingly weak employment report. Though the debt ceiling was the dominant concern in the markets last week, the market grappled all week with the headwinds of higher energy prices, rising bond yields, inflation, and less robust economic growth.
Fuzzy Employment Picture
Employment remains a confusing and unpredictable element of this post-pandemic economic recovery. Automated Data Processing’s employment report showed private sector jobs rose by a robust 568,000. This hiring surge may have been aided by the end of extended unemployment benefits and the return of children to school.4
This improving labor outlook was reinforced the following day as weekly initial jobless claims fell below their four-week moving average, while continuing claims fell by nearly 100,000. The employment report on Friday was a different story. The economy added a disappointing 194,000 jobs, making September the slowest month for job growth this year. The unemployment rate declined to 4.8%, while an increase in wages generated inflation worries.5,6