Shepherd Wealth & Retirement - April 2018

WE A L T H Your 3 FINANCIAL VALUES And How Emotion Plays Into Them to Live By ®


APRIL 2018

T he emotional reaction to money is something that simply cannot be ignored. While we would love to have computers manage everything in an emotionless mathematical process that never causes problems, it’s not reality. In the real world, you’re either building your life to be free from worries about money or you’re creating a lifetime of hard, painful, and frustrating moments. This is where we come in. We work on solving these problems and creating a path for you toward financial freedom. The best way to understand how is by explaining three components of your financial future. 1. HOW YOU ARE PAID The first part of your personal financial interaction starts with your career. You show up to work, do your job, and get paid for the goods or services you supply. Your mindset toward how the world pays you money is the biggest aspect of your financial future. Carol Dweck is an expert in the field of human psychology and interaction. In her book, “Mindset,” Dweck establishes a key concept that permeates how people deal with money. She explains two types of approaches everyone takes for certain tasks that have a monumental impact on how you accomplish specific outcomes: a fixed mindset or a growth mindset.

In a fixed mindset, your attitude toward life is static. This outlook establishes limitations to what can be done with providing value and getting paid in your career. People with a fixed mindset feel they have hit their limitations. They can’t advance past their “lot” in life. In a growth mindset, your attitude toward your monetary future is one of constant growth and learning to overcome limitations. With a growth mindset, you become more intentional with what you want to do with your career, and this establishes opportunity to grow and move up. 2. HOW YOU INTERACT WITH MONEY This is perhaps the most important component of building a future that is free of financial burdens. In order to avoid the hard, painful, and frustrating times, it’s pivotal to establish proper habitual behavior with your money. I was recently asked what foundational principle most entrepreneurs overlook. The biggest determiner of whether you are rich or poor is whether you save money first and only spend what’s left. If you have that mindset and habit, everything gets easier. You can either look like a millionaire or actually start becoming a millionaire when you are younger. When you really break it down, working to become a millionaire comes down to a concept called “deferred gratification.” Do you want to

spend your life looking the part right now, or do you want to spend your life living the part later? If it’s the latter, then it’s important to learn proper habits and prioritize saving. 3. HOW YOU INVEST So, how do these concepts tie in with retirement? Well, I’ve visited with plenty of people who have great money habits. They saved and built a great nest egg, but they approach their savings either one way or the other. Some view investing their savings as a great way to grow their future livelihood. Others view it more like gambling. This is why understanding how financial markets work is paramount. In our book, The Forever Millionaire, we discussed moving average crossovers and how you can strive to mitigate losses, but this is also where the emotional aspect of money comes into play. People react differently when things hit the fan. Often, the pain of losses will cause people to avoid investing again. Even worse, they’ll try to alleviate the hurt quickly by changing direction at the wrong time. How you react to the emotional aspect of money is what separates a good saver and a good investor from the average. Having a growth mindset, being willing to learn from setbacks, having good habits, and striving to be more intentional in your actions pays off in the long run. -Dave Shepherd

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We tend to picture energetic dogs and cats thriving in young families with children, but animals are often happy to live with older, less active adults. These kinds of homes are especially suited to older animals that might otherwise have to spend their last days in the pound. Depending on your schedule and mobility, you might not want to adopt a large dog. But small lap dogs, cuddly cats, and even birds can make a great addition to your home. As long as you do not suffer from allergies, having a pet can be great for your health. The American Heart Association says pet ownership, particularly dog ownership, may be linked to a reduced risk of cardiovascular disease. Researchers found evidence to support this claim when they discovered that registered dog owners in Sweden had lower rates of cardiovascular disease and a lower risk of death than individuals without dogs. Physical fitness is far from the only benefit of pet ownership. The love and companionship our animal friends offer can alleviate depression or loneliness. Linda Anderson, founder of the Angel Animals Network in Minneapolis, says, “Older pet owners have often told us how incredibly barren and lonely their lives were without their pet's companionship, even when there were some downsides to owning an active pet." Caring for a pet takes work, but for many people, the benefits greatly outweigh the challenges. An energetic dog encourages you to leave the house and go for walks, a talkative parrot makes time spent alone less lonely, and a soft cat curled up on your lap helps alleviate a stressful day. If you can’t have a pet in your home due to lease restrictions or mobility challenges, you don’t have to miss out on the benefits of being around animals. Consider volunteering at a local animal shelter. You can help care for cats, dogs, and other animals while they wait for their own forever home. There are thousands of pets in shelters across the country waiting for someone to care for them. If there’s room in your retirement plan, why not invite one into your home? You might discover both you and your new friend have something to gain.

Everyone loves it when a slugger steps up to the plate and smashes one out of the park. The crowd roars as the player rounds the bases, fist pumping in the air. The stock market is the same way. Investors love to be tantalized by the fast-rising stock in hopes of reaping big rewards. But getting dazzled by the home runs in the market may be costing you big money. There's a big difference between a home run in stocks and a home run in baseball. In baseball, the run stays on the board and can never be taken away. In stocks, that home run can turn into an “out” in a matter of minutes. Cryptocurrencies are a great example. Bitcoin dazzled everyone with an astronomical rise late last year. Entire investment portfolios changed overnight to try to capitalize on this stock market slugger in December. By February of this year, the value had plummeted by 75 percent. In baseball, it’s common to overlook the player who plays good defense. These guys aren’t stars, but they are crucial to every baseball team’s success. They come in every day, work hard, and are consistent performers. Managing your portfolio is like managing your baseball team. It’s important to have “players” that can protect your runs by not losing what you gained. A baseball team can hit a ton of home runs but consistently lose games and seasons. Believe it or not, out of the top ten teams in home runs last season, only three of them made the postseason. Stocks are the same way. You can have a portfolio of home run hitters that put up some solid numbers for a brief time, but when those stocks slump, it’s your “team” that takes the hit. Offense and defense over the long haul are as crucial to developing a well-performing portfolio as they are for a baseball team. Contact us today at 520-325-1600 and let us show you how we can build you a portfolio that does both.



DIVERSIFICATION Minimize Risk and Maximize Strategy

One of the key concepts in investing is diversification. Some of the biggest losses we have seen — or perhaps you have heard about on the news — could have been reduced by diversification. But does that mean that more diversification is better? Some advisors think so, claiming that the strategy solves most investing problems. But there is one problem: If you diversify everything, your portfolio could include asset classes, stocks, or other investments that could hurt rather than help your return. Building a diversified portfolio is key to avoiding painful loses in individual companies or concentrated positions. But we believe in striving to generate consistent returns and getting the most out of your investments by TAKE A BREAK!

eliminating weak stocks, asset classes, and other investment areas. That way, you have better results with less risk. We do this by measuring strength (demand) for all the different investment choices and including the strongest (positive, fastest uptrend) in your portfolio. This gives you enough diversification, but it aims to keep the weak and declining areas out. Another way to avoid those painful losses is to have a strategy to sell declining assets before they become a big loss. Having a well-diversified portfolio doesn’t guarantee great returns. Market fluctuation is always going to be a factor when it comes

investing in our last edition and in our recently published book, The Forever Millionaire, and this method is an innovative way to pinpoint your investment strategy. Instead of buying and holding with an overarching diversified market portfolio, what if you could take your money and consistently plug it into asset classes that appear to be in their optimal seasons? This is why you need a money manager who is capable of providing this service. A tailored plan using the correct strategies could generate better returns for you than just letting your portfolio drift with market conditions. Contact us today and let us show you how this can address some of the biggest challenges with investing.

to investing. This means the concept of diversification has to be targeted in its application. We covered the seasons of

Recipe inspired by Food and Wine Magazine


INGREDIENTS • 2 pounds asparagus • 1/3 cup plus 2 tablespoons extra-virgin olive oil • Kosher salt • Freshly ground pepper

• 2 garlic cloves, minced • 1 cup panko breadcrumbs • 1 tablespoon flat-leaf parsley, chopped • 2 teaspoons lemon zest • Juice of one lemon (not packaged lemon juice)

DIRECTIONS 1. Heat oven to 425 F. Toss asparagus with 2 tablespoons olive oil and season with salt and pepper. Place on baking sheet and bake for 20–26 minutes, turning asparagus halfway through. 2. When asparagus is nearly done, heat remaining olive oil in a small skillet over medium heat. Add garlic and cook for 1 minute. Add breadcrumbs and cook for 5 minutes, stirring frequently. Remove from heat and fold in parsley and lemon zest. 3. Transfer asparagus to serving platter, drizzle with lemon juice, and top with breadcrumb mixture. Investment advice is offered through Shepherd Wealth Group, a Registered Investment Advisor doing business as Shepherd Wealth & Retirement. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration as an investment advisor does not constitute an endorsement of the firm by securities regulators, nor does it indicate that the advisor has attained a particular level of skill or ability. Content should not be construed as personalized investment advice or as an offer to buy or sell, or a solicitation of any offer to buy or sell any securities mentioned. Certain content was prepared by a freelance journalist.


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Avoid the Hard, Painful, and Frustrating Moments Do Pets Fit Into Your Retirement Plan? What You're Missing About Playing Offense and Defense in Your Portfolio Why Market Diversification Can Hurt You Roasted Asparagus With



Lemon Breadcrumbs The Message Behind Kindness Rocks


H ave you ever had one of those days when nothing seems to go right? You wake up late, you can’t find your keys, the kids aren’t ready, and the day continues to unfold in a negative fog. Those difficult days are the reason Megan Murphy started the Kindness Rocks Project. After her parents passed away, she found comfort in finding heart-shaped rocks and sea glass on the beach. She realized that these small tokens might make other people feel better, too. Megan’s friend, one of the first to pick up a rock Megan had left behind, sent her an encouraging message after finding it: “If you did drop this rock, you made my day.” Since then, Megan has inspired others with randomly placed messages of kindness. She finds a rock, paints a kind message on it, and leaves it on the beach for others to find. And the idea has spread. As the project has grown, so have people’s stories about finding kindness rocks. When people find a kindness rock, they get a boost to their day, but they also feel inspired to pay the kindness forward.

How to Make Your Own Kindness Rocks If you want to spread kindness, start with a few smooth 3- to 5-inch rocks. Part of the adventure is in finding the rocks, so take the time to explore outside to find them. Maybe take the kids for a trek to a nearby park or beach. Once you have your rocks, use nontoxic paint or spray paint to color them. Use bright colors so that others can spot them. After the paint has dried, use paint pens to write your messages on the rocks. These can be as simple as one word or as big as an inspiring quote or verse. After you’ve written your message, use a clear nontoxic sealant to protect your artwork so it will be there when others find it. Find an outdoor space to leave your rock — maybe even in the original spot you found it.

In a world that often seems dark, your message of kindness will serve as a beacon of hope for others.

“ One moment can change a day, one day can change a life, and one life can change the world. ” –Gautama Buddha

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