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SEPTEMBER/OCTOBER 2022
Financial Horizons Your Connection for Wealth, Lifestyle & Legacy
McBeathFinancialGroup.com
309.808.2224
Risky Business LESSONS FROM THE GREAT RECESSION Investors remember September 2008 particularly well as a cataclysmic month. The stock markets crashed as a global financial crisis unfolded. It eventually came to be known as the Great Recession. Businesses filed for bankruptcy, homeowners lost their properties, and ordinary workers watched their 401(k) savings collapse. All across the world, people were distraught and saw their financial security shattered. I remember it well because I was doing my best to help families preserve their retirement accounts. It felt like a trial by fire, as it was early in my career as a financial advisor. Fortunately, I had an edge when guiding my clients through the tumultuous period. I came from an insurance background, so it was natural to help protect my clients from market risks with fixed indexed annuities (FIAs). These investments sheltered people from market losses while still earning a reasonable return. It was the right move at the time, and I wouldn’t change it. But yesterday’s strategies are not necessarily the ones I’d recommend now. With the unprecedented inflation seen in 2022, many people worry about a repeat of 2008. But while some commentators are making comparisons, the environments are fundamentally different. Fixed indexed annuities still have their place in some portfolios, but most of today’s safe money products usually have limited upside potential that may not keep pace with a high inflation environment. I absolutely understand the desire to protect from market losses, but a different investment strategy may be necessary to protect from loss of purchasing power. While safe money options, such as FIAs, CDs, or money market accounts, may grow in balance, they may have less buying power than they did upon investment! Furthermore, you may not suffer direct losses to your initial investment, but you also won’t have the full benefit of market gains while assets are tied up. Not only are market upswings impossible to predict, but most safe money options also sacrifice liquidity. While locking in a guaranteed annuity may be a relief at the time, it can be
heartbreaking to watch a huge market rebound, knowing assets are stuck in a much lower return contract.
In this unprecedented market, no easy solution is right for everyone. Fortunately, I’ve evolved with the times and gained valuable experience. I’ve also added a toolbox that can create custom solutions to adjust my clients’ portfolios to the changing markets. While I once relied upon only annuity solutions, I now typically recommend market-based solutions to match my client’s risk tolerance. It is challenging to navigate market risks, inflation, and tax opportunities, but it’s exactly what I’m equipped to do! Of course, we never know what the market will bring. There are no guarantees in investing, but I feel much better prepared for whatever comes our way than I did 14 years ago. When I opened McBeath Financial, I couldn’t have predicted the conditions we would soon enter. But ultimately, it has made me better at my job and ready for whatever may come my way. Starting a business right before a massive recession is what some may call bad luck. I feel fortunate to have survived the downturn while learning a lot in less-than-ideal circumstances. The timing may not have been perfect, but little about life is. All we can ever do is make the most of it and try to pick up a lesson or two along the way. –Krista McBeath
309.808.2224 1
The Pros and Cons of Retirement WHAT THE ‘UN-RETIREMENT’ TREND MEANS FOR YOU
If you’ve been out and about in your community, you may have noticed more gray-haired folks working as cashiers at the grocery store and pouring lattes at your local coffee shop. There’s a reason for this upward trend in older workers — and it goes back to 2020. That year, thousands of people near retirement decided they didn’t want to stress about pivoting to remote work or potentially catching COVID-19. So, they threw in the towel and retired early! Experts called this movement the “Great Retirement.” Now, the exact opposite is happening. This year we’ve seen what CNBC calls an “un-retirement” trend: Folks who were retired are returning to the workforce to fulfill the high demand for labor, and pre-retirees are pushing their retirement back in favor of new full- or part-time jobs. About 1.7 million people “un- retired” between April 2021 and April 2022. Should you join them? Pad your retirement fund. This hasn’t been a great year for stocks or bonds. If your retirement fund has dipped, working full or part time may give it the boost you need to feel secure in your old age. • THE BENEFITS OF ‘UN-RETIREMENT’ • Experiment with a new career path part time. Are you a long- time accountant who has always loved flowers? Taking an “un- retirement” or “bridge” job at a florist shop will give you a taste
of the career you’ve always secretly wanted without pressure to climb the ladder. Ward off age-related diseases. Engaging
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physically and mentally in learning a new job can reduce your risk of illness like dementia and depression.
THE COSTS OF ‘UN-RETIREMENT’ • Your travel options might be limited. If you have a long bucket list, “un-retiring” for a year or two may prevent you from getting to every place on it. • You’ll have less time to enjoy your hobbies/family. More hours at work mean fewer hours for your granddaughter’s track meet or working on your classic car. • There’s actually a higher risk of illness. Yes, your health is on both the benefit and cost lists! Work-related stress can take a mental health toll, which you can avoid by choosing retirement. To help you make the smart choice, visit Forbes.com and read “Is It Worth Delaying Retirement One Year?” It’s an older article but a good one!
Why Some Affluent People Don’t Become Wealthy From Riches to Rags
Countless Americans retire without sufficient wealth and assets to support themselves, even if they experienced affluence when younger. So, where did the money go, and why didn’t it translate into wealth? While unfortunate luck sometimes plays a role, bad decisions and habits are the more frequent culprits. Simply put, too many people fail to make their money work for them. Instead of investing excess income, they assume the money will always be there. They purchase depreciating assets like expensive clothing, unnecessary home upgrades, new cars when the old one was just fine, and countless technological gadgets. What was once a fun toy soon becomes outdated junk worth a fraction of its original value. The joy is fleeting, but the financial ramifications are long term. Some people have a similar yet different problem: They conclude early on they’ll never be wealthy. As a result, they don’t bother investing in their futures and making the most of their assets. Since they decided they’ll never need a financial planner or wealth management strategy, they become stuck and never maximize their potential.
on their attitude toward finances. Whatever their reasons, many people fail to prioritize their retirement and, as a result, wait until later in life to focus on saving. Others invest passively without a strategy or make risky investments instead of taking a more calculated approach. Unfortunately, some people are even misled by the same investment advisors who were supposed to help them build a more secure future. Though the mistakes are often easy to identify in retrospect, overcoming them is rarely so simple. In Krista McBeath’s book, “The Generational Wealth System” (available on Amazon), she provides guidance and principles for transforming assets into long-term wealth. Krista offers tips for all levels of investment knowledge, ranging from the basics of budgeting to managing your finances like a business and adjusting your mindset toward wealth. Remember, prosperity rarely happens overnight. And when it does — as in the case of many lottery winners or recipients of large estates — those affected often prove wildly unprepared. Accumulating and preserving wealth requires patience, dedication, and a growth mindset. How you think about your money today will help determine whether you improve or lose your financial position in the future.
Both cases reflect a failure to plan for the future. They also demonstrate that one’s ability to turn affluence into wealth hinges
2 McBeathFinancialGroup.com
When she left Normal, IL, to pursue her dreams, few outside our community knew who she was. In fact, she wasn’t even known by most of us locals before she became a sensation as a finalist on “American Idol.” Since the age of 9, 20-year-old Leah Marlene has been playing free concerts at the Uptown Normal Circle to sparse crowds at events such as the Sugar Creek Arts Festival or the Sweet Corn Circus. She was hardly a headliner at the time, but on a beautiful day in May of 2022, it was a little different … I was among the crowd of thousands who stood to cheer the return of our hometown hero! Leah had captured the heart of America as a top-three finalist on “American Idol.” My daughter had been watching Marlene since her first audition on “American Idol” and was a smitten 9-year-old fan. Robert and I aren’t big fans of the show, but it was a rainy day, and we needed something to do. So, we started watching the most recent season, and we also became intrigued by a quirky girl from our town with an incredible voice. Over the months, along with millions of other people, we found ourselves won over by her charm, voice, and stage presence! Along with millions of other viewers, we watched her transform into a star. Leah’s most famous song is “Wisher to the Well.” It contains lyrics like “Don’t waste my time, just read my mind,” “Here’s my two cents, better use it wisely,” and “Don’t forget that you’re working for me.” Those words struck a chord with me and how there’s often a misperception about my role when working with my clients. Some might think the role of a financial advisor is to simply choose an investment vehicle to grow their money. Much like the lyrics of the song, they might expect to just fork over their investments with little input and just watch their balances grow. The reality of the process is quite different. I’m not a mind reader, and part of the process is collaborating with my clients to choose the best path to help them achieve their goals. Only then can we work together as a team to build their future. While the process may not be as glamorous as a Hollywood reality show, I have witnessed many of my clients’ dreams realized. And while they may not have a parade to celebrate, I’m personally always excited to share in the moment! A Hometown Hero Watching Leah Marlene’s Dreams Come True
SUDOKU
SOLUTION ON PG. 4
–Krista McBeath
309.808.2224 3
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203 Landmark Dr., Unit A - Normal, IL 61761 - 309.808.2224
INSIDE
1
Krista Reflects on the 2008 Financial Crash
2
The Benefits of ‘Un-Retirement’
Why Don’t All Affluent People Become Wealthy?
3
Our Hometown Hero, Leah Marlene
4
Balance Training Key to Quality Movement
SOLUTION
Advisory services are offered through Landmark Wealth Management Inc, dba McBeath Financial Group, an Illinois Registered Investment Advisor firm. Insurance products and services are offered through McBeath Tax and Financial Services, LLC. McBeath Financial Group and McBeath Tax and Financial Services, LLC are affiliated. All content of this newsletter is for informational purposes only. Opinions expressed herein are solely those of McBeath Financial Group and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual financial professional prior to implementation. Copyright 2021 McBeath Financial Group.
Find Your Balance 5 EXERCISES TO IMPROVE BALANCE
THESE EXERCISES HELP WITH BALANCE. Balance training involves exercises to strengthen the muscles that help keep you upright and improve stability.
Though we may not always think about it, balance is essential to just about everything we do in our daily routines. From simply getting out of bed, leaning over to tie our shoes, or even walking to the mailbox, we need good balance to keep ourselves steady while performing normal tasks. KNOW WHY BALANCE IS IMPORTANT. Balance is the ability to control your body’s position, whether stationary or moving. It is a key component of fitness that many people neglect while developing their fitness regimen. Balance training is a great way to help your body recognize where it is and control movements in a given space. When the body knows where its limbs are in space — known as proprioception — it is able to produce smooth, controlled movements with fewer risks of injuries. Reaction time and agility are also improved with balance training. The body learns how to quickly correct itself but not overcompensate and has the ability to quickly change direction effectively and efficiently. Though balance training is important for everyone, it is especially important for those who have problems due to illness, weakness, or dizziness. It allows them to overcome stiffness or unsteadiness and to develop an awareness of body segments and how to align them.
These types of exercises can be done as often as you like or even every day.
Consider trying the following exercises:
• Standing with your weight on one leg and raising the other leg to the side or behind you. • Putting one heel right in front of the other foot, as if you were walking a tightrope. • Standing up and sitting down from a chair without using your hands. • Walking while alternating knee lifts with each step. • Stretching and gentle movement as part of yoga or tai chi. Balance is essential to living a healthy, functional life. It’s important to incorporate balance training into your fitness regimen. That way you can decrease the risk of injuries and help move freely and confidently.
4 McBeathFinancialGroup.com
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