The Milwaukee Real Estate Blog

As 2005 comes to a close, I want to reflect on the year that was and the year that will be. Since I now have this outlet, I thought I would share some of my thoughts with all of you. Don’t worry; this will not turn into one of those top 10 lists.

The year that was:
Overall, 2005 was a good year; my friends and family were able to get out of it alive and for the most part in good health. There were a couple of scares throughout the year, like when my son broke his arm, but there were joys as well, like when I found out my wife was expecting and we were getting a daughter. My business revenue increased by 29%, and I was able to add about 20 families to the list of those I help accomplish their goals. I also was able to get my first professional designation Chartered Retirement Planning Counselor (CRPC®) from the College for Financial Planning. Overall, I am well on my way to building the personal and professional life that I want to live.

The year that will be:
In 2006, I am looking to build on the success that I had in 2005 and not repeat any of the missteps. I eagerly await the birth of my daughter and look forward to all the joys that will bring. I look forward to working with my current clients to help them continue on the path towards their goals. And, I look forward to meeting new families that are looking for help accomplishing their goals and dreams.

The engineer and financial planner in me would be remiss if I didn’t spend sometime looking for what could go wrong. In that light, I need to review my budget and look for areas of spending reduction. This will help ensure that I am able to spend through the ups and downs of my income. (Base plus bonus can really be a pain sometimes!) I also need to review my protection coverage. Do I have adequate insurance to protect the things my family cannot afford to lose? I look at things like home owners, auto, life, disability, and health insurance. I reviewed some of that in November when open benefit enrollment occurred, but it doesn’t hurt to look at it again in a comprehensive review. The other thing I need to look at is my savings and investment strategy. I don’t plan on making any major purchases in 2006, so I just need to ensure that I have enough cash on hand to cover any emergencies that may arise. (I’ve already setup my Medical Flex spending account to cover the co-pays and deductibles associated with my daughter’s birth) On the investment side, I need to review my investment allocation and make sure that my investment mix hasn’t drifted since the last time I reviewed it. I don’t typically rebalance unless one asset class is more than 5% over or under weighted. Even then, I may not rebalance depending on where I think the investment world is headed. For example, if I think that international investments are going to out perform US investments, I’ll let them be a little over weighted. I never let any investment class get more than 10% out of spec. That’s taking too big of a gamble. Since most of my investments are in qualified accounts (Roth and Traditional IRAs) I don’t look to harvest losses for tax purposes, but if you have a regular brokerage account you may want to do that. Also, since I use load funds, I make sure all of my rebalancing occurs within the same fund family. That way, I avoid repaying the sales load.

That’s a small sample of what I’m thinking as 2005 comes to a close. I hope you found it helpful. In 2006, I’ll publicly announce what my 2006 resolutions are going to be. Have a great New Year’s and I’ll blog you next year.

I’ve been doing research for a marketing Idea at work recently and I’ve found some interesting things. With the holidays here and 2005 coming to a close we’re looking for a way to help people keep their New Year Resolutions. One of the things that I found out is the top New Years resolutions. They are:
1) Lose weight
2) Stop smoking
3) Stick to a budget
4) Save more money
5) Find a better job
6) Become more organized
7) Exercise more
Be more patient at work/with others
9) Eat better
10) Become a better person

Obviously, a good financial advisor can help you with items number 3 and 4. However, I would get to that financial advisor early in the year, because financial advisors are going to be very busy in 2006. According to a national poll conducted by KRC Research on November 17-21, that questioned 1,030 Americans aged 18 and older more than 58 million Americans aged 18 and older say they resolve to better manage their finances in 2006. I don’t think they are going to be doing that on their own. The question is will they have the wisdom to seek out help? Whether that help is discipline, checking assumptions and calculations, or getting access to the professional grade tools, a good financial advisor will be able to help.

The other question for the day is are you going to be making any resolutions? According to another survey, only 46% of Americans even make New Year resolutions. The rest have apparently given up the practice because they never keep them any way.

Just something to think about as we go into 2006. If I don’t post another entry before Saturday, Have a very happy holiday, what ever you celebrate.

Today I had lunch with Rodger Premeau, one of the authors of this blog. You see, originally Mike Polega and I got the idea to start a real estate blog, and in order to make it a better experience we asked Rodger to join us. Rodger and I didn’t know each other that well, so he invited me to lunch.

I have to admit, I was a little worried that he was going to try to sell me his services. Of course Rodger knows he’s in the relationship business first, and the selling business second so there was no sales pitch.

He did stun me with one thing, however. Now, personally, I have an MBA. Finance was my focus, and I enjoy that stuff. So, when it comes to financial planning it’s not the what or how that is the problem. It’s the discipline to stick with the plan that’s key, and that’s why I’ve never hired a financial advisor. Discipline is a personal thing, right?

So there I am talking to Rodger, and he tells me about his decision to get into this particular field. Turns out financial stuff was a hobby, and when he got “right-sized” out of his corporate job, he decided to make financial planning a career. I love hearing about people who find a way to make a living doing what they really want to do. Anyway, later he was talking about how found his first financial guy. What? I thought this was your hobby, why’d you hire a financial guy?

“For the discipline”, he says. He needed someone to help him get the things done he wanted to get done.

Turns out it that being a good financial advisor involves a certain amount of wheedling, cajoling, and nagging to get your clients to follow through on the plan you put together for them. Just writing out a plan doesn’t help most people; it’s helping them execute it that matters. That’s something Rodger learned that he’s carried into his own practice. Kind of like when you hire a maid to clean the house, and then find yourselves scurrying around cleaning before she arrives, so she doesn’t see the mess.

That’s a reason for hiring an advisor I’d never thought of before.