McBeath Financial - July 2020
JULY/AUGUST 2020
Financial Horizons Your Connection for Wealth, Lifestyle & Legacy
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I Wish I Could Ask My Dad Offering the Practical Financial Advice You Need
F ather’s Day just passed, and we are in the midst of My summer vacations were always spent at a lake in northern Minnesota with my family. Wonderful memories were created, and I fondly remember all the lessons from my dad. He taught me how to captain a boat, tackle DIY projects, and wrap my head around life. I’ve always had great respect for his wisdom and knowledge, whether it was how to fix something or how to cope with the hand life had dealt me. summer. It’s a time of year that will always remind me of my father, the memories we made on summer vacations, and the time we shared together. Since his passing, there have been so many times when I’ve needed answers to my questions, and I’ve immediately thought, “I wish I could ask Dad.” I’m forever grateful for the many practical things Dad passed on to me through the years. He continues to live in my heart, and I strive to practice the wisdom he passed onto me. I’m sure anyone who has lost a parent has felt this way. We feel the loss in a complex system of emotional and practical connections, and as a result, it’s difficult to know where to find help. Personally, I find myself turning to YouTube a lot when it comes to DIY projects. For other things, YouTube will never be a replacement for the answers I would get from my dad. Our relationship gave those interactions depth. I know some people received financial guidance from their parents, and it makes sense to do so. Who didn’t consult their mom or dad about their first car or home? When it comes to advice, Google isn’t going to be an adequate substitute. Parents impart so much to their children through their actions, teachings, and continued support. Financial lessons taught at an early age can set the direction for kids and are so important for raising financially literate and confident adults. (I’ve even dedicated an article in the newsletter to this very idea. Check it out on Page 2.) But we never fully grow out of our need for advice. Sometimes, later in life, we need someone who can help us find the answers to many of life’s big decisions, especially when it comes to financial
moves. When you no longer have your parents around to help, who do you turn to when you’re wondering if you should consider retiring or if you’re prepared enough for what the future might bring? You may wonder about keeping your mortgage, what your taxes will look like when you retire, and what insurance options you should consider.
For some, parents are great confidants for these answers, but
others may no longer have a parent they can turn to. That’s where I come in. I make it
my mission to get to know my clients, understand their values, and offer a guiding hand like any trusted figure in their lives would. Now, I’m no substitute for a beloved family member, but I am qualified to answer some of the common burning questions you may have. And unlike answers you might find on the internet, I know my clients and can answer your questions with your background, values, and needs in mind. In fact, one of the many benefits of the financial planning process is this very relationship we build together. My father helped shape me into the person I am today, and I believe his guidance influenced my desire to offer that same level of nurture for my clients. I may not be a replacement for a father, mother, sibling, or other trusted relative, but I’m proud to offer the familiarity of the supportive hand we all need and deserve.
—Krista McBeath
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Feel Bad About Throwing Away Photos?
4 Rules for Guilt-Free Photo Downsizing
If you’ve reached a point in your life where you’ve started to downsize, then you’ve likely grappled with the difficult task of getting rid of photos. After decades of life, how are you supposed to choose which memories are important enough to keep and which aren’t? These four rules can help make this daunting task easier.
places you’ve been to are far less special than pictures of the people you love.
RULE NO. 2: TELL A STORY When you look at a photo, does it make you want to tell a story about the people or places in the image? Could you share plenty of stories about riding around in Dad’s old truck or about how funny your best friend from college was? Keep those photos. Pictures of people whose names you can’t remember or blurry photos you can’t make out can all go. RULE NO. 3: EDIT WELL If you have a lot of photos from a specific event or part of your life, think about how long each “chapter” of your life story would be. How much time would you spend writing about your cousin’s wedding or high school prom? If a certain event didn’t have that much meaning in your life, why dedicate pages and pages of a photo album to it? RULE NO. 4: THROW PHOTOS AWAY If a photo isn’t important enough to put in an album or frame on the wall, then it doesn’t need to stick around. Don’t put them in a box you’ll have to sort through later. Let the rejects go.
RULE NO. 1: CUT SCENIC VIEWS You don’t need dozens of photos of that campsite you went to on vacation one summer. If a location was really meaningful, like the beach at your honeymoon, then
keep a few, but pictures of the
After all that hard work, treat yourself to a photo album shopping spree so you can start organizing the meaningful photos you have left.
Multigenerational Wealth Planning From teaching honesty to nutrition, there are many ways parents and grandparents can shape future generations. Yet financial literacy is a key lesson that’s often overlooked. According to a study by the Program for International Student Assessment, as of 2017, approximately 1 in 5 teens lacks basic financial literacy. And that statistic doesn’t improve much with adults. The Financial Educators Council found that the national average on financial literacy tests is 63% among adults. And Instilling Good Habits in Future Generations
The next part of the conversation should focus on you. Finances touch every part of our lives, and by sharing your experiences, your mistakes, and the lessons you’ve learned, you can help your children avoid those same missteps. If you’re comfortable doing so, then share some of your past financial mistakes and talk about what you would have done differently today. And when your child does mess up, don’t fix the problem. Support them, use it as a teaching tool, and remind them that they are not alone. Finally, share the details of your long-term plan, how this is better preparing you for what’s ahead, and why these values are important. By simply showing your child what you have planned for — or possibly inviting them to a conversation with your financial planner — you are encouraging them to also consider their future.
Despite these sobering statistics, we believe it’s never too late to teach your children about preparing for their future — no matter how old they are. Before launching into your first lecture, though, gauge where your loved ones are on their financial journeys. Your children may be well-versed in savings and mortgages, but they may struggle with strategic long-term retirement plans. They may not need a basic lesson on credit, but they may be among the 22% of Americans who have less than $5,000 in their retirement accounts, according to a 2019 report. That could be worrisome for their future. However, knowing where they are allows you to approach the conversation with understanding while leveraging your knowledge in the most appropriate way. Pro Tip: Get an idea of your family’s financial literacy with a free assessment at FinanicalEducatorsCouncil.org.
At McBeath Financial Group, we value financial literacy education at any age. We can facilitate multigenerational conversations about long-range financial planning, tax strategies, and personal goals. If your children would like help planning for their future, then direct them to us.
2 McBeathFinancialGroup.com
Guidance for Retiring in a Volatile Market
SUDOKU
Retirement is often referred to as our golden years, and for many on-the-cusp retirees, it’s exciting to anticipate what the future will be. But for those just beginning or near retirement, the market spiral following COVID-19 could create uneasy feelings about the future.
Retirement plans shouldn’t be discarded, nor is this the time for hasty actions, but it’s the time
to be patient and employ strategic long-term planning that involves proactive moves to protect your retirement goals. These five steps can help you through it. 1. Stay Patient: The market thrives on emotions, so it’s important to remain calm and patient. We’ve seen fluctuations in the market like this before. Studies show that those who try to time the market with knee-jerk financial decisions often fare worse than those who stay the course. While this is difficult, it can be detrimental to let short-term circumstances and emotions affect your long-term plan. 2. Meet Your Needs: If you’re retired, then you may need to pull from your accounts each month in order to survive. But during a volatile market, you have to regularly monitor your cash flow and spending. Create a budget for the items you need to pay for each month and ensure your needs are met. 3. Be Conservative: Similarly, assess your spending habits and avoid unnecessary withdrawals. This isn’t the best time to raid retirement accounts for your dream car. 4. Find Balance: This is an excellent time to reevaluate your current portfolio. If you are managing your assets yourself, then a rebalance may be needed. Depending on how the market downturn has impacted you, you might also need to assess your allocation in order to achieve your goals. Please keep in mind it is always important to consider your risk tolerance. 5. Find the Silver Linings: Market downturns are often excellent times to pursue retirement strategies. Conversions of Roth IRAs, tax planning, and investment opportunities are just a few of the financial planning considerations that can pay off over the long term in retirement. At McBeath Financial Group, we believe proper planning is the best strategy to prepare for retirement — regardless of when you choose to do so. If you have questions about the status of your retirement plans or concerns about how the market will affect these plans, then please reach out. We’re here to guide you through this downturn.
Solution on Page 4
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I N S I D E
1
If Only We Always Had Our Parents’ Advice
2
4 Steps to Finally Sort Through Old Photos
Finance 101: How You Can Teach Good Habits
3
Retirement After a Market Crash? How to Keep Calm
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The Power of the Golden Spice
Advisory services are offered through McBeath Financial Group and Motiv8 Investments, LLC. McBeath Financial Group and Motiv8 Investments, LLC are not affiliated. 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 information 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 2020 McBeath Financial Group.
The Power of the Golden Spice
People have raved about many superfoods over the past few decades, but one that’s garnered notable attention is turmeric. Fittingly known as the golden spice due to its orange-yellow hue, turmeric is famous for being a crucial part of Indian cuisine, ayurvedic medicine, and Chinese medicine. But does turmeric actually help people? And if so, how? Let’s start with the basics to find out. What’s in turmeric? First, it’s important to know what the spice contains and why researchers are so excited about it. Turmeric is packed with a chemical known as curcumin, which has been shown to provide anti-inflammatory effects, pain relief, antioxidants, and a decrease in the risk of cancer. Pro Tip: You should not consume excessive amounts of turmeric if you take medication that has blood-clotting effects, such as aspirin. However, a moderate amount typically doesn’t react with these or other medications and has many other benefits. Can it improve joint health? In many cases, yes! The Arthritis Foundation recommends taking a 400–600-milligram tablet of turmeric up to three times daily. Multiple studies cite turmeric’s ability to reduce inflammation and relieve arthritis pain, and one study even notes that turmeric seemed to work just as well as ibuprofen (Advil) for people with arthritis in their knees. Participants
in that study took 800 milligrams of turmeric every day.
Can it help the liver? Yes. One of the spice’s most
notable characteristics is its powerful antioxidant abilities. Antioxidants play an important function in our bodies. The average person is exposed to refined and processed foods, smoking, environmental pollution,
and chemicals found in pesticides and drugs. Turmeric can protect the liver from damage due to these toxins, which also aids those who take strong medications known to cause long-term liver damage. Can it decrease symptoms of hay fever and depression? Some symptoms, yes. The curcumin in turmeric can help reduce hay fever symptoms like sneezing, itching, runny nose, and congestion. When used in tandem with antidepressants, turmeric may help reduce symptoms of depression. There are many benefits to using turmeric in your weekly meal routine. Try out some Indian or Chinese recipes or prepare some Instagram- worthy golden milk. In whatever you make, enjoy the rich flavor combinations turmeric offers!
4 McBeathFinancialGroup.com
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