From time to time over the last six weeks, our thinking has returned to the first commentary we sent to you during this crisis: “Nothing beats good preparation.”
Financial planning is at the core of good preparation. It is an important concept with many moving parts; the major ones are below. We hope this list serves as a catalyst for discussion and action once you’ve exhausted more exciting options, like ordering online groceries, cleaning your closet and binge-watching Netflix.
Update your goals and risk tolerance with your family and your advisor. Financial planning is a strategy to achieve your life’s objectives. It’s a means to an end. Consider what you want your life to look like in the short, medium and long terms. Your investment accounts should align with these goals.
Complete a comprehensive financial plan and budget, even if you live well within your means. This is the secret sauce for establishing confidence and peace regarding your finances. Current investments, income stream and expenses, and projected income and expenses, are elemental parts of a good plan.
Inventory your assets. Your family will thank you later. The inventory should include all financial accounts and advisors (overachievers will include a telephone number), a summary of insurance and agents, deed references to real estate, copies of titles to cars and boats, and appraisals of personal articles (jewelry, etc.).
Review your wills, trusts, powers of attorney and advanced directives for health care. A discussion few want to have. Do you and your family know where these documents are located? Have you reviewed them since they were signed? Remember to update your beneficiary designations while you’re at it.
Find a vault, virtual or otherwise. We use an internal (read: very secure) virtual vault for important documents, in addition to copies of passports, drivers licenses and social security cards. It’s a good back-up to a safe deposit box and offers greater access should items be lost when traveling.
We are now at a place where we sense that clients are becoming better acclimated to this new normal and its attendant consequences – increased market volatility and uncertainty related to the speed of the recovery. As a result, this will be our last Friday commentary until events present themselves that warrant remarks from us. Thanks for reading, and stay safe out there.