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FEBRUARY 2019
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LESSONS FROM THE ICE What Hockey Taught Me About Being a Financial Architect
Sitting down to write this newsletter, I’ve found it’s impossible to talk about myself or my philosophy as a Financial Architect without talking about hockey. The sport has played many roles over the course of my life, from fun and games to a deeply grounding source of stability. Now, as winter draws to a close on what may be my last season as a coach, I’d like to spend some time reflecting on what hockey has meant for me. It’s difficult for me to remember when it all started — growing up in Detroit, it was impossible not to be a hockey fan from birth. I learned to skate at a young age, and started learning to chase a puck shortly thereafter. My first real clear memory is a particularly good season I had as a boy, one that made me realize I wasn’t just having fun, I was excelling. I began to get serious, learning the skills that take a hockey player from being good to great: leadership, teamwork, commitment determination, perseverance, and mental toughness. What I learned on the ice became principles to live my life by, providing a grounding influence when I needed it most. When I was a young man my family went through some hard times. My home life became pretty unstable, but even in the roughest moments, I knew I could strap on my skates and practice. At an age and in a situation where a lot of kids get into
trouble, the sport kept my nose clean and my grades up. In a very real way, the sport helped secure my future. Not only did I graduate high school, I was offered an athletic scholarship to the University of Michigan Dearborn. It was at the University of Michigan that I first discovered my passion for finance. I had a great and passionate economics professor who had worked in the Federal Reserve, and had made it his mission to make sure his students truly understood the nature of money. It was an empowering experience, one that made me realize I wanted to impart the same lessons to others. As graduation drew closer, my athletic director asked me what field I wanted to go into — he had connections in just about every conceivable industry and wanted to do his part to give his player’s bright futures. He introduced me to Turner Thompson. By 1990 I was a full-fledged Financial Architect, something that wouldn’t have been possible without all those years spent on the ice. So it was fitting that shortly after becoming a financial advisor I started coaching. Finance isn’t quite as fast paced as ice hockey, but teaching the two practices is remarkably similar. Coaching and advising are a team effort that requires confident leadership and an eye
–Patrick Marody As hard as it is to close this chapter of my life, I view it as a positive thing. I’ve had to juggle many hats and helmets over the years, it will be a nice change of pace to narrow my focus and simplify things. I’m still blessed to go into a job I love every day, helping folks strategize for their future, and giving newer Financial Architects the same mentorship Turner and Ken gave me. I may not be chasing a puck, but I still use and teach all the principles hockey instilled in me today. for what big-picture success looks like. I’ve even advised several NHL players over the years, and they’ve appreciated having someone who could talk to them like a coach. But as I mentioned at the beginning, I’m thinking it’s about time I hang up my whistle. I’ve coached two of my sons’ youth hockey teams, and found a lot of joy doing it. But with my eldest now playing for the Edmonton Oilers Organization, and my youngest going into high school, I’ve taught them all I can. Building the rink in my backyard took a lot more out of me than it used to, as much as I’ve enjoyed seeing that spark ignite in young player’s eyes, it may be time to place all of my focus on continuing to coach advisors and clients at FAI.
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WHY DO WE NEED A LEAP YEAR? The Calculations That Leave Us in Need of an Extra Day
Get Your Finances in the Zone What Hockey Can Teach Us About Protection and Liquidity A hockey rink is divided into three areas, or zones. There’s the defensive zone, where the goalie and defenders work to protect the net. Across the rink is the offensive zone, where a team needs to get the puck to put points on the board. To get from the defensive to offensive zone, a team needs to be effective at transitioning the puck through the neutral zone. The same can be said for finances. Any effective financial strategy not only has areas of wealth protection (defensive zone) and areas for opportunity (offensive zone), it has means of transitioning wealth between the two (neutral zone). Just like in hockey, it may at first appear as though the offensive zone is the most important to focus on — after all, that’s where goals are scored. But no advisor worth their skates would tell you to only focus on offense. Investing all of your money without maintaining your assets would be like pulling your goalie in the middle of the game. At Financial Architects, we prefer to develop a strong defensive zone first, making sure assets are diversified and protected. As Pat would say, scoring goals doesn’t mean much if you aren’t protecting your own net. It’s only after you have a solid backline of assets that you should start thinking about going on the offensive. That’s where liquidity comes in. When an emergency arises or you spot a good investment, you need to be able to react quickly and effectively. Just like how a pro hockey team transitions between defensive to offensive formations in the time it takes for a puck to bounce off the crossbar, your wealth needs to be flexible enough to respond to the unexpected. That’s why liquidity structure is one of our “5 Foundations of an Effective Strategy” (see following page). Lastly, no hockey team would be complete without players and a coach. Players are facets of your overall finances, such as your retirement strategy or insurance strategy, and each comes with their own strengths and weaknesses. A Financial Architect, much like a great coach, gets to know each player and unites them toward a single cause. Only then can your team’s potential be maximized.
Every four years, February gains an extra day at the end of the month. But what does this contribute to the year as a whole? You might be surprised by what this one day does for us! The 365 days in each year represent the time it takes for the Earth to circle the sun. However, the orbit actually takes nearly a quarter of a day longer than that. The additional 0.2421 of a day might not seem like it would make a significant impact, but after a few decades, it adds up. To ensure the calendar and seasons stay on the right timeline, the leap day was created. THE START OF THE LEAP YEAR The Egyptians were the first to officially calculate how many days it takes to orbit the sun, revealing the need for a leap year. Europeans at the time used a calendar that followed a lunar model, which needed an entire month added to retain consistency. The leap year wasn’t introduced into Europe until the reign of Julius Caesar. With the help of astronomer Sosigenes, Caesar created the Julian Calendar, which included 12 months and 365 days, with a single day added every fourth year. However, the Julian Calendar wasn’t perfect, because 0.2421 of a day can’t be rounded to a multiple of five, so it caused the calendar to have an extra 11 minutes every four years. Pope Gregory XIII fixed the problem in 1582 by creating the Gregorian Calendar. Now, a leap year occurs every four years except for the years that are evenly divisible by 100 and not 400. For instance,1800 and 1900 were not leap years because they were divisible by 100. A LEAP DAY BIRTHDAY The odds of being born on Feb. 29 are about 1 in 1,500, which leaves approximately 187,000 people in the U.S. and 4 million people around the world celebrating their birthdays on Feb. 28 or March 1. People born on a Leap Day are faced with dilemmas such as which date they should receive their driver’s license. Although it varies from state to state, most consider March 1 the appropriate day for leap-year 16-year-olds — who are celebrating their fourth “official” birthday — to receive their license. With all the changes the calendar has undergone, it still isn’t quite perfect. Experts say that in about 10,000 years, it will need to be changed yet again.
The information contained in this newsletter is derived from sources believed to be accurate. You should discuss any legal, tax, or financial matters with the appropriate professional. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Securities offered through The O.N. Equity Sales Company, Member FINRA/SIPC (www.FINRA.org/ and www.SIPC.org). Investment Advisory Services offered through O.N. Investment Management Company and FAI Advisors, Inc. Financial Architects, Inc. and FAI Advisors, Inc. are not subsidiaries or affiliates of The O.N. Equity Sales Company or O.N. Investment Management Company. We have representatives currently registered in the following states: AL, AZ, CA, CO, DC, FL, GA, IL, IN, LA, MD, ME, MI, MN, MS, MO, NC, NJ, NV, NY, OH, OR, PA, SC, TX, VA, WA, and WI.
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Take A Break
At Financial Architects, we don’t believe in “cure-alls.” Some would say that if a doctor prescribed a remedy without understanding the root problems that exist, that would be called malpractice. In the same way, our process is designed to identify the problems that would cause a financial plan to fail. Once the problems are fully identified, we seek out remedies to help our clients’ financial plans succeed under multiple circumstances. We are able do this by examining five foundations that are central to any effective financial strategy. These are Foundation of Protection, Wealth Building, Liquidity Structure, Critical Thinking: Retirement Accounts, and Strategic Money Flow. These foundations aren’t solutions or products in and of themselves; they’re a means of assessing your overall financial health. To return to the medical metaphor, the five foundations are a lot like your vital signs. When you go in for a checkup, the medical staff will first take your weight, blood pressure, and a slew of other factors before the doctor sees you. Sometimes, even if you feel healthy, these measurements can reveal certain issues that could spell trouble down the road. By using these five foundations, a Financial Architect can help you identify which areas of your financial health are strong and which areas need work. You may, for example, be getting a high rate of return on your assets but lack the liquidity for it to be useful to you. If you are looking to assess your own foundations, take a look at the graphic below. Do you see areas where you’re falling short? Schedule a talk with a financial architect today. We’ll work with you to build a strategy to strengthen all five foundations and optimize your financial health. The Vitals of Wealth Building THE 5 FOUNDATIONS OF AN EFFECTIVE STRATEGY
solution on page 4
TIRAMISU
This Italian favorite makes for the perfect Valentine’s Day dessert. It’s easy to whip up and will make the
holiday feel extra special. INGREDIENTS • 6 egg yolks • 3 tablespoons sugar • 1 pound mascarpone cheese • 1 1/2 cups strong espresso, cooled
• 2 teaspoons dark rum • 24 packaged ladyfingers • 1/2 cup bittersweet chocolate shavings, for garnish
INSTRUCTIONS
1. In a large mixing bowl, use a whisk to beat together egg yolks and sugar until thick and pale, about 5 minutes. 2. Add mascarpone cheese and beat until smooth. 3. Fold in 1 tablespoon of espresso. 4. In a small, shallow dish, combine remaining espresso with rum. Dip each ladyfinger into mixture for 5 seconds. Place soaked ladyfingers at the bottom of a walled baking dish. 5. Spread half of the mascarpone mixture on top of the first layer of ladyfingers. Top with another layer of ladyfingers and another layer of mascarpone. 6. Cover and refrigerate 2–8 hours. 7. Remove from fridge, sprinkle with chocolate shavings, and serve.
Inspired by foodnetwork.com
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Inside This Issue 1 | Lessons From the Ice
2 | Why Do We Need a Leap Year?
2 | Get Your Finances in the Zone
3 | The 5 Foundations of an Effective Strategy
3 | Tiramisu
4 | Prepare for an Adventure in Lapland
Into the Arctic Circle ADVENTURE IN SWEDISH LAPLAND
If you’re eager for a new adventure in 2019, you’ll surely find it in Swedish Lapland. As the northernmost region of Sweden, this unique area is home to national parks, glaciers, reindeer, the beguiling midnight sun, and spectacular night skies. Though it’s cold this time of year, one benefit of traveling to the region in winter is to catch a glimpse of the night sky. In late winter, the northern lights are visible from a few remote locations like Abisko National Park, one of the first established national parks in Sweden. Traveling to Abisko is an adventure in and of itself. From Stockholm, the fastest option is to take one of only two airlines that fly into Kiruna, then travel by train to Abisko. Despite the challenge of getting there,
adventure-seeking visitors from around the world arrive each winter to experience the beauty of the Arctic. Winter attractions include ice skating, snowshoeing, and the Scandinavian sauna — though this is a must-visit any time of the year. Befriend a Scandinavian and you might be treated to some pickled herring or even a princess cake, a raspberry-filled dessert covered in marzipan. Scandinavians cherish their public lands, and the trail systems are well taken care of. Hikers and backpackers can enjoy the stunning beauty in both late spring and summer, as well as have a chance to see the midnight sun. Because of its far- north location, Swedish Lapland receives close to 24 hours of sunlight from June through August. Diverse terrain and varied landscapes make hiking here a treat,
between the boulder fields, mountains, and stunning glacial lakes.
While hiking, you may spot some reindeer herds or lemmings (a small rodent similar to a hamster) racing around rocks. The Sami people have herded reindeer for thousands of years through this very land. In the summer, keep an eye out for blueberries, lingonberries, and the brightly colored cloudberries. Because of the Arctic climate, weather conditions can change quickly from sunshine to rain and heavy fog, so it’s best to dress in layers and bring wind and rain protection if you plan to venture into the backcountry. The fantastic scenery of Swedish Lapland awaits you, no matter when you decide to take your trip. What are you waiting for?
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