Your Guide: Financial Strategies for Staying on Track in Today's Economy (099)

What happens when financial stability suddenly feels distant? Temporary cash flow challenges can feel overwhelming but they don't have to derail your long-term financial goals. In this episode I explore strategies to keep your head above water without compromising your future, such as adjusting savings contributions for a bit of breathing room. 

This episode is for anyone grappling with financial decision-making during uncertainty. Whether it's planning for a child's college education or managing the impact of rising interest rates on your home payments, the key is maintaining flexibility and patience. I'll guide you through real-life scenarios, offering insights to help you make informed choices that align with your financial objectives.

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▶️ YouTube: What the Wealth / Paradigm Wealth Partners

If you or someone you care about could use the help of a financial advisor and sees the value in establishing a financial plan, please reach out to me.

Thanks for Listening!

Jonathan

Transcript

Speaker 1: 0:08

Today I had a conversation with a client, we had a meeting and we just talked about kind of the ebbs and flows of life and when things get tough it causes kind of an increase in anxiousness and am I doing the right thing? And, like I've said a lot of times, what even is the right thing? So this is the what the Wealth podcast. I'm your host, jonathan Bednar, and today we're going to talk about how we come alongside clients and help them make decisions, zoom out to the bigger picture and understand. You know it might be uncomfortable now, but that's life, but also it's not going to stay that way forever. So let me just kind of bring you into a conversation and kind of give you an understanding of how we work with clients. So I recently had this meeting and the conversation was really about kind of cash flow and about a year ago life was really good. They had a house that they purchased 10 years ago. The rate was low and they had gotten to a point where they purchased 10 years ago, the rate was low and they had gotten to a point where they'd outgrown the house and so they'd been kicking around the idea to buy a new house and where to buy and what to buy, and finally found it. They pulled the trigger, but obviously rates are not at 2% and 3%, they were at 7.5%. And so, while they loved the home, it became a little bit uncomfortable from a cash flow perspective their payments and so, while they loved the home, it became a little bit uncomfortable from a cashflow perspective their payments and so their cashflow. They went from having about $3,000 to $5,000 a month extra every month to not having that, and a lot of it is a bigger house costs more money. Interest rates are higher, so more of the money is going to interest instead of the principal, and so they've gone from not necessarily paycheck to paycheck because they're still saving a lot of money, but it feels like paycheck to paycheck because they don't have that monthly surplus they had.

Speaker 1: 1:59

And so the question is are we doing the right thing? Should we sell? Should we, you know? Should we buy another rental? Because then we could have some cash flow. You know some additional cash flow from that, and you know my job there was not to go back and spend the time thinking about, you know, talking about the portfolio or dialing in all the minute details of the financial plan, but to really to kind of help them see the big picture your early 40s.

Speaker 1: 2:29

You know you've got a million dollars or a million and a half dollars saved. You're doing great. You're saving $100,000 a year. You're going to have times like this where you know things aren't maybe the most ideal but you're still saving a great amount of money. If we need to raise some additional cash flow, that's okay. We'll back off some of the contributions, some of the savings. You're still going to be saving quite a bit of money and give yourself a little bit more freedom for the next, you know, 6, 9, 12 months to just give yourself some of that breathing room. It doesn't mean your plan's derailed. I actually did pull up the plan and just show them. You know here's where you are. You know you're still on track. Even if you scale back for a little bit, you're still perfectly on track for where you need to be, for what your plan is.

Speaker 1: 3:18

There were some questions about, you know, adding additional rental property or buying another rental property in order to collect more rent to help offset some of these expenses, and I said that's just not something I would recommend in this case, because you're going to owe money. You know you're going to have a mortgage on that, so it's going to add additional stress for you in order to do that. So, while the money on the other side you know the net rent that you would get after you pay all the expenses sounds good, the additional $1,500 or $2,000 a month Knowing that you've got a nut to crack every month because of that mortgage is actually going to cause additional stress, and so it's not something I would. I would. I would worry too much about they. Have conversations, you know, worry about, you know their kids starting college the next couple of years and and you know how will that, how will they pay for that?

Speaker 1: 4:07

And so you know a lot of what we do as financial advisors is is the, the investments and the financial planning, but a lot of what we do is is just being a voice, someone that you can come and talk with. Am I thinking about this the right way? Should I consider X or Y? Or? You know, jonathan, I just need some help. Can you help me understand? You know a particular strategy, and that is where probably our biggest value is to our clients is wrapping our arms around you in these times of confusion, of chaos, of high anxiety, and saying, look, you're going to be okay. We have a plan for this. You're doing just like you need to be. You're still on track. Even if we make a tweak or two, you're okay, and talking through that and showing them and being human really helps them understand. Okay, I am okay. I do have an advocate on my side, I don't have to go through this alone, and that is really probably our greatest value proposition.

Speaker 1: 5:14

We have hundreds of clients across the country, and it's not only this client that we just had a conversation with, but it's all of them. I have clients that are facing cancer battles. I have clients that have kids with drug addictions. I have clients that are going through divorce. Life's not always roses, and that's okay. There is light at the end of the tunnel. The sun will still come up tomorrow. There's clients that just panic about the market, watch the market every single day. So anytime there's missiles flying across borders overseas or, you know, during COVID, you know the market, you know, fell quickly 30% in a matter of, you know, a month, and so it just becomes a lot, and a lot of times someone just needs someone to say hey, jonathan, paradigm team, I just need to talk, and so that's what we're here for Again, that's one of our biggest values that we provide to clients is just having the ability to talk, and a lot of times it's not even about money, it's just I've got a hard time, I need an ear to talk with.

Speaker 1: 6:21

It's not going to judge me. That, you know, understands this. So what I want to challenge you is if you're having, you know, some of those hard times and you're not sure where to do, or you're not sure if you're on track or if you're going to make it, or you know if you pull this lever or twist this knob, reach out. We'd love to have the conversation and you our opinion, let you know how we think we can help you, but also let you know that we're humans and we understand that our clients are humans too, and we're here to walk this journey with you, to be kind of that guide, so that you have someone that you can rely on and not have to go this journey on your own. That's what I want to leave you with on this podcast. If you have questions, reach out. Be confident in your retirement. That's what I want to leave you with on this podcast. If you have questions, reach out. Be confident in your retirement. Have a wonderful day. Thanks for joining me on another episode of what the Wealth. If you enjoyed the episode today, smash that subscribe button. It helps me more than you think. Also, if you found this episode insightful and a light bulb went off, share it your friend, aunt Judy, the random guy in the office who's always talking about investments.

Speaker 1: 7:24

Wealth isn't about just the chain. It's about our choices, chances and changing our financial futures. The information in this podcast is informational in general in nature and does not take into consideration the listener's personal circumstances. This podcast does not intend to be a substitute for specific and financial, legal or tax advice. You should consult the approved qualified professional prior to making a final decision. Securities offered through LPL Financial member FINRA SIPC. Paradigm Wealth Partners is the other business name for Independent Advisor Alliance Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Paradigm Wealth Partners are separate entities for LPL Financial.