Today I almost fell out of my seat when I heard a news commentator share that the national average cost per gallon of gas is $3.27. Immediately, I thought no it’s not $3.27 but actually $4.27 in my neighborhood. As usual, this talk about gas brings up many commentaries on who’s to blame for the high prices. Many families are not at liberty to rely upon public transportation just because the price of gas has spiked. Unfortunately, in Los Angeles County a car is required. Of course, there are some transportation options, but for most people they fall short of meeting the requirements to fully replace the need to drive.
If you are a member of the Democratic Political Party it’s the Republicans. If you are a member of the Republican Political Party it’s the Democratic leaders – especially this current administration. I am not here to have a political conversation, but to explore some strategies for winning the money game in light of these turbulent market conditions.
In light of the raising prices, we still are looking for ways to recast our financial standing. I challenge us to consider ways to win at the money game. To gain additional perspective, I had an opportunity to interview Melanie Perry a Registered Representative and Financial Advisor of Park Ave Securities LLC.
The responses to the questions are for informational purposes only and that individual risk tolerance objectives must be reviewed prior to making any specific recommendations.
So Melanie, what ways can we prepare to win the money game?
A. The key to winning the Money Game is to master a concept I have coined called the Full Circle of Wealth. It is based on the premise that you find your life purpose. Identify what are your God-given gifts, talents and resources that will be of benefit to humanity, and then monetize it. Turn it into cash. We live in a capitalistic world and need money to address our needs and satisfy our wants. As your wealth grows, you protect it from anything that could set you back, buy income generating assets, live off those assets in retirement and structure that remainder to go efficiently to your heirs and the community. It is this Full Circle of Wealth concept that I use to help and position people to live a life of abundance while giving back. I encourage everyone to take the necessary steps to find their life purpose and live a life of financial peace and abundance.
A result of the last few years of economic turbulence is that many people have realized severe losses. Some have realized lost value with stocks, bonds, and real estate. How have you addressed these issues with your clients? What suggestions do you have for a potential client feeling jolted as a result of these grim market conditions?
A. You know many people focus their attention on the rate of return of stocks, bonds and real estate however there is little focus on true risk management and how to structure your finances accordingly. When one really begins to understand how monetary policy, economics, investments and the IRS interrelate, one will see that it is the management of the risk not rate of return that determines a successful outcome. My philosophy as well as Pacific Advisors is to first protect your current wealth and then create a solid savings plan that helps to insure that you will get to your targeted goal. Any monies over and above that amount can be directed to volatile investments. This idea is not new, however it is uncommon. I tell my clients we are going back to old economic principles. Live at or below your means, save, protect your wealth, buy income generating assets and transfer your legacy to the next generation and to your community. ~ If you were to learn anything from this economic debacle, this a wakeup call to make some major changes with how you manage your assets and as long as your monies are properly structured based on a protection first philosophy you can weather any storm.
What opportunities does this current business cycle provide?
A. Many economic forecasters feel that of the four business cycles we are somewhere in the expansion phase. While there is no guarantee that cyclical stocks will outperform, history shows us that in the expansion phase new hiring occurs, jobs are created and income generally rise thus creating opportunities for cyclical stocks that are evaluated for growth. Knowing that business cycles are normal and just a part of the financial world it is critical to take a risk management approach balancing tax exposure, insurance, interest rates, type of asset, risk tolerance and time horizon. This is how to create and maintain sustainable wealth.
People often relate to bull and bear markets – how might a client prepare for each market condition?
A. There are many ways to prepare and position you as a winner in a bear or bull market. The first thing to do is to identify your profit prior to making the investment. In other words do your homework. While this does not guarantee a profit it allows one to make decisions based on facts verses emotion, the major cause of most every investor today. Secondly in your analysis you would have determined when you should buy, sell or redirect cash flow so when that scenario comes up you act based on a plan and not reactionary. Finally, if your projected outcome comes out at a loss, your overall plan is not affected because you are implementing the protection first philosophy.
I reviewed The Living Balance Sheet ® – this appears to be a powerful tool, how effective has this been with organizing your clients?
A. As an authorized user of The Living Balance Sheet, ® it not only has been a tremendously efficient tool for clients that need financial order, it helps me to keep better track of where they are with their goals, allows me to better advise efficient cash flow strategies and it allows me to show the client potential pitfalls and how we can plan for these uncertainties.
What are some key considerations for clients with still at least ten-years remaining to work?
A. You want to get a cash flow assessment whether you are a business owner, professional or have a modest income. One of the major factors in reaching the targeted retirement goal is not always how much you have but more so where it is going. By focusing on cash flow and redirecting that flow to tax efficient assets that generate income you can get on track or even a better track with more efficiently. With proper planning, 10 years is more than enough time to help insure a solid retirement plan given the client is willing to do their part and take action.
Melanie Perry is a Registered Representative & Financial Advisor of Park Ave Securities LLC (PAS) 1550 W. Colorado Blvd. Pasadena, CA 91105, (323) 255-8800. Securities, products/services and advisory services are offered through PAS, a registered Broker-Dealer and Investment Advisor. PAS is an indirect wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian), New York, NY. Financial Representative, Guardian . New York, N.Y.
Pacific Advisors, Inc. is not an affiliate or subsidiary of Guardian. Pacific Advisors, Inc. is not an independent Registered Investment Advisor. “Guardian, its subsidiaries, agents or employees do not provide legal or tax advice.”
PAS is a member of FINRA, SIPC.
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