This podcast will review the fundamentals of financial planning. After 25 years of working with clients, posting blogs, presenting at conferences, and writing a book about financial planning, Lou Melone, CFP® has created a podcast to talk about financial planning. There is not a lot of information about the fundamentals of financial planning but there are daily shows about stocks up and stocks down. Retirement is important to everyone but a path to get there isn’t always understood. Financial planning may be the most secure way to retirement.
As a board CERTIFIED FINANCIAL PLANNER™ professional, Lou provides comprehensive financial planning strategies for higher net-worth families to help protect, preserve, and grow their current levels of wealth and plan for retirement.
With over 25 years of financial planning experience, Lou has focused on helping answer two critical questions, which most investors desire: Do you know exactly how much money it is going to take for you to retire in comfort? Do you know how much money it is going to take to remain comfortably retired?
R.J. King is editor of DBusiness magazine, DBusiness Daily News, Tech and Mobility News, and Detroit 500, all of which cover companies in metro Detroit and Michigan that are expanding locally, nationally, and internationally. He is the author of five books — “Detroit: Engine of America,” a gold medal recipient of the Midwest Book Awards, “8 Track: The First Mobile App,” “Passport to the Corner Office: The Starter’s Guide to Corporate Life,” “Grounds For Freedom: Saving Chernobyl,” and “Mystical.”
The new podcast episode addresses the four criteria everyone should consider when choosing a financial advisor. The four criteria when evaluating a financial advisor are team, firm type, planning strategy, and compensation model.
The discussion includes client vs. customer, the quantitative value of a financial advisor, the fiduciary standard some advisors adhere to, the different credentials advisors have, a list of ten questions to ask a potential financial advisor and much more.
Next Episode: The Portfolio
The next episode launches soon and will review the financial planning topic Building the Portfolio for Retirement to Match Your Plan and How to Take Withdrawals So Your Money Outlives You.
Why has the average investor continually, not only underperformed the indexes, but their own investments?
What are the components that make up The Anatomy of Investor Returns?
The investment return is the last component in a comprehensive financial plan which has three components. In this order of importance, first goals, next, the plan, and only then the portfolio. Unfortunately, human nature gets it backwards with obviously the help from financial media in our conditioning.
Why The Anatomy of Investor Returns?
Provides the client with a simplistic understanding of why they shoot themselves in the foot. It explains a process of combining the data and human nature. For example, it's the rational brain versus the intuitive brain. By understanding the history of rational versus intuitive behavior, you can become aware of your shortcomings.
The Components of The Anatomy of Investor Returns
Stimulus: The virus that affects your rational thinking
Investor Behavior: How the stimulus affects your behavior. Five behaviors with which investors may struggle.
Volatility: Volatility vs Risk. What volatility is, what it isn’t, and the anxiety people sometimes feel when they hear the word volatility
Retention Rate: How volatility affects retention rates
Asset Class: How retention rate affects asset class. A look at the performance of asset classes over time that often surprises many people.
What is the VIX?
Next Episode: Advisors
A discussion about what an advisor does, what to look for when you're ready to hire a financial professional, a review of titles in the industry and what everyone wants to know: how do they get paid for their services?
Some of the foundational elements of this podcast series and financial planning are:
Winning Race to Wrong Finish Line
The fundamental question we ask, which are what most retirees are most worried about (and are core to planning) is… ‘will you outlive your money, or will your money outlive you? …And the answer comes down to having a plan and understanding behavioral investing.
What is Behavioral Investing?
The fundamentals of behavioral investing and the 9 Behaviors to Avoid
Everywhere People Turn There is External Pressure
What is the hardest part about following the fundamentals of behavioral investing? Where do people go wrong?
What all of this can all mean to someone’s retirement in terms of numbers.
Advisor and Coach
The value an advisor provides is in crafting a plan first. A plan that is appropriate for the client’s most cherished financial goals. An advisor provides behavioral coaching during the most challenging emotional times, - whether it be at euphoric market tops or terrifying market bottoms.
Closing: Recap & What’s Next
Next podcast will review the fundamentals of investor returns. It is a model Lou has developed after 25 years of financial planning. The five components are: The Stimulus, Investor Behavior, Volatility, Retention Rate and Asset Class.
Tens of millions of people are stampeding into retirement on their last major financial run expecting a retirement lifestyle of independence and dignity. Unfortunately, they are following a leader off a financial cliff, due to the traditions and habits that have led to a misunderstanding of long-term planning—not to mention the prehistoric cognitive bias that is tugging at their behavior.
In this case, the leader is not a person, but an archaic set of principles and practices hauled around in their minds by generations of misinformation and a culture that works against long-term planning. These ideas are packed into a mental suitcase that many people carry with them through retirement planning.