Often I am asked why I use the example of the flight path of a plane when speaking about someone’s financial plan. My finance professor in college would often say, “if you don’t know where you are going, any road will get you there.” That statement has stayed with me throughout my career advising our clients. Each of us is unique in what really matters when it comes to our financial future. Some may want to travel, others may want to spend more time with their grandchildren, while many simply want the financial freedom to know that the hard-earned funds they accumulated will not run out. In the same way, every plane has a unique flight path to reach its destination. There is a destination that is known in advance, but the path will vary based on the weather forecast and other planes in the airspace.
To get to your destination, it is beneficial to have a co-pilot who will provide a second opinion to help keep errors to a minimum. They may see something that is a blind spot to you and offer that calming influence, especially when the storms of life occur. Along the way, an alteration in the course of your financial flight may also be necessary. That is when your trusted advisor, your CERTIFIED FINANCIAL PLANNER™ professional, can provide that necessary input to make adjustments to your financial flight path.
Over the past six months, the most common concern that is being expressed by our clients is the amount of uncertainty they are feeling. With the 24-hour news cycle that is ever present along with expert opinions seeming to diverge strongly from one another, it can feel like you are riding an emotional roller coaster that will not end. As we begin the fourth quarter of 2021, now may be the time to review your unique financial flight path. Are your investments allocated in line with your personal tolerance for stock market volatility? Strong equity market returns over the last 18 months (March 2020 – September 2021) have largely been driven by government stimulus. As the season of stimulus comes to a close and cyclical market movements begin to show signs of resuming, the likelihood of a market correction remains a high concern for many investors.
Unless you have an “answer ball” that identifies the time of a correction, prudent financial planning urges the set aside of cash for emergencies and for spending needs during the next 12-18 months.
The review of your financial path with your advisors should include a discussion of new tax legislation that is being proposed to fund government debt and to provide for an infrastructure plan. I am reminded of an infamous tax quote from the Helvering v. Gregory case in the Second Circuit, later affirmed by the Supreme Court, by Judge Learned Hand, that “[a]nyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.” There are tax strategies that may be available and appropriate for your specific situation in order to minimize income taxes. However, these discussions need to be discussed well in advance of the holiday season which we all are so looking forward to enjoying together in 2021.
If any of these concerns have crossed your mind lately, and you are seeking advice to going into 2022, contact Tull Financial Group. We provide professional assistance for the review of your unique financial flight path, and we would welcome the opportunity to meet with you. Give us a call today at 757-436-1122.