Thanks to the internet, we are fortunate enough to have plenty of financial information and advice available at our fingertips. Some individuals, however, don’t have the time to evaluate the complexities of investing and the long process of taxes. Nor do all individuals have the patience and discipline to manage their assets with a data-driven mindset. If you fit into this description, working with a trusted advisor may be the most advantageous option to grow your assets.
Unpredictable life circumstances:
Life is full of unpredictable twists and turns that alter the course of your finances. If you have recently endured a significant life change: divorce, retirement, new occupation, or newfound wealth, an experienced financial professional can help you navigate these distressing circumstances with a logical financial plan.
Unique career paths:
For those with unconventional career paths such as entrepreneurs, athletes, celebrities, or entertainment professionals, figuring out an efficient financial strategy is much more complex. Athletes, entertainment professionals, and other individuals who become suddenly wealthy usually require an early retirement plan. “Instead of finding themselves in the lap of luxury, 70 percent of people who come into sudden money are broke within a few years, according to the National Endowment for Financial Education” (Polyak, 2014, para. 2). It may be hard to believe, but the most wealthy individuals usually benefit from financial planning services the most. Many who become wealthy very suddenly blow their entire salary without any consideration for their future financial needs and retirement. However, with specialized financial guidance, these individuals can ensure that the wealth gained throughout their short careers will last their lifetime.
Additionally, business owners must be financially savvy to handle employee payroll, business taxes, and business expenses. Business owners occupy the majority of their time with work responsibilities. As a result, many of them hire a financial advisor to ensure the financial aspect of their business is taken care of with no effort on their part, allowing them more time to manage their company.
Data-driven decision making:
When it comes to managing finances, many investors have trouble keeping their emotions at bay during economic downfall and when investments are crashing. The logical approach usually requires seeing past a crash and knowing that the market will improve if given some time. However, as we saw with the beginning of the pandemic in 2020, investors were fearful of the unknown and began to sell their investments prematurely. “Between February 12 and March 23, the Dow lost a stunning 37% of its value” (Zarroli, 2020, para. 2). Within months, the stock market saw all-time highs with the promise of a vaccine. "By year-end, the S&P 500 gained roughly 15%, supported by historic levels of government spending and monetary policy" (“2020 Stock Market Report", 2020, para. 3). If investors trusted the market to bounce back, many would have survived the crash with no damage. But this is much easier said than done. During a period of not only an economic downfall but also a health crisis and political unrest, it’s not surprising that many feared leaving their assets in an unpredictable position. However, a trusted financial advisor can see past falls in the market by solely focusing on a data-driven mindset.
Our trusted staff of financial advisors at U-Vest® can help you handle the many financial complexities that come with unique circumstances and the ever-changing investment markets. If you find yourself struggling to make the time for developing a logical investment and budget strategy, our U-Vest® advisors can create an individualized financial plan to suit your life circumstances.
This article is meant to be general in nature and is not intended, and should not be construed as personal advice of any kind. Please consult your financial advisor prior to making financial decisions. Michael P. Davino, CFP® is a Financial Advisor with U-Vest Financial®, a separate entity from LPL Financial and can be reached at 850.300.7055. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/ SIPC.
Investing involves risk including the potential for loss of principal. (8/21)
Zarroli, J. (2020, December 31). Stocks 2020: A Stunning Crash, Then A Record-Setting Boom Created Centibillionaires. NPR. https://www.npr.org/2020/12/31/952267894/stocks-2020-a-stunning-crash-then-a-record-setting-boom-created-centibillionaire.
2020 stock market report. Fidelity. (2020, December 31). https://www.fidelity.com/learning-center/trading-investing/markets-sectors/2020-stock-market-report.
Polyak, I. (2014, October 1). Sudden wealth can leave you broke. CNBC. https://www.cnbc.com/2014/10/01/sudden-wealth-can-leave-you-broke.html.