Before I jump into a nerdy series where I break down Net Unrealized Appreciation, I thought I would take a step back and share some quick thoughts of what I have noticed in a post-Covid world. These are just a few items related to personal finance. The observations come a bit from news articles, but mostly conversations with clients. And they are in no order of importance.
First, I am having more conversations about making life simpler as it pertains to investing. I have always been a proponent of KISS (Keep It Simple, Stupid). Over the years I have seen many clients do what I refer to as the “squirrel method of investing.” This is where they have multiple and often redundant accounts doing the same thing. Well, a trend recently has been to consolidate and eliminate extra and unnecessary accounts if possible. This includes even tracking down old 401k balances and moving them into one IRA. Call it housecleaning, consolidation, making life simpler, or another term. Ultimately, the trend I see is to organize their finances to get things as simple as possible.
Next, quite a few clients are realizing they can now start working differently than they had for years and still be at least as productive as before. The conversations have now shifted from retiring in a year or two to continuing to work for another 4-5 years, but not as they had before. For example, I have a client who used to travel a lot for work. The client now realizes they can work from wherever and meet with clients remotely. This allows the client to continue to do what they love, stay mentally engaged, but with a better balance so they spend less time in airports and more time doing what they enjoy. I guess this is working longer, but actually working less. Not a bad tradeoff.
Finally, I’ve seen a huge uptick in prospective clients reach out to me and the conversation often begins – I want to stop working in my current position, but am not ready to fully retire. These situations are similar to the previous point, however, it is slightly different in the person wants to keep working, but step back from their current position to one less stressful. In these cases, the clients aren’t ready to become the full-time golf course ranger. However, they are more than ready to take a cut in pay if it means less stress and more enjoyment. We then work together to see how we can make it work financially.
Ultimately, it has been an interesting dynamic. Or maybe I have to break out the old paradigm shift phrase. We’ve gone from conversations focused on growing wealth as much as possible so a retiree can do nothing but being fully retired when the time comes to conversations about making retirement more personalized and flexible to meet individual goals. All I know is I’m glad my practice has evolved over the years from focusing on assets to doing more financial life planning. And most importantly, it is wonderful to see clients achieve these goals.
I’m Dan Johnson, CFP®, founder of Forward Thinking Wealth Management. I run a flat-fee financial planning and investment management firm located in beautiful Akron, OH. Although I am in Akron, OH, I work with clients regardless of location. I cater to owners of equity compensation positions who are looking to organize their financial lives, keep more of what they make, and do the things they want in retirement and even now.