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Episode 27 - When Life Throws You Curveballs

In this episode of Blue Money, Jim and Kevin are talking about pivoting and making changes even when life doesn’t always go as planned. Jim, one of the cohosts of Blue Money podcast, recently had some major life changes occur, resulting in accelerating a timeline he had had outlined for himself. So Jim is speaking from first-hand experience in this episode.

Jim explains how beneficial his long-term financial plan or portfolio that he’s had set up has been through this process. Whether it be due to retirement, health issues, family changes, or anything else, the guys at Valley Financial Group just want you to be well-prepared in case something happens.

The guys have a discussion about the importance of having a financial plan in place. They answer your questions about fees. Kevin wants you to have a goal, and listening to this podcast will help you get there.

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Episode 27 – When Life Throws You Curveballs

Jim:   I want to welcome everyone back to the Blue Money Podcast. This is your host, Jim Donnelly. I’m here with my co-host, Kevin McGarry.

Kevin: What’s up, Jimmy?

Jim:   Today’s podcast, I thought it would be important just talk about how life throw curve balls at you once in a while. Threw me a curve ball about a month ago, a month and a half ago and my future plans totally went upside down. I always planned to work until I was 52 at Bensalem, and then doing the financial planning full time. Obviously some events occurred that obviously I retired from Bensalem Township, police Department at this point. Some actions that were totally my fault. I take full responsibility. Now I’m diving into financial planning full time 24/7, 365 a year. I’m looking forward to it. Things happen to everyone. It could be health. I mean, someone can get cancer, someone can get MS, anything can happen. Wife, a spouse can pass away, kids can pass away. So, many curve balls could be thrown at you. For me, it was almost like my career boom. Now I would be full-time financial advisor.

Kevin: Well, I think, first of all you had a plan though. And you were going to come work full-time as a financial advisor once you were at 52 that’s been pushed up.

Jim:   Yeah. Four years.

Kevin: So, but at least you had that plan. So many people, come in here being law enforcement or not, they don’t have a plan. A lot of guys that sit in your shoes, out every day, protect society, they retired. They don’t know what the hell they’re going to do.

Jim:   And I think that was important, Kevin, especially what happened to me is I’ve been planning for years and years and years in case something happened. Not just so much one for another job when I retired, which was going to be Valley Financial, but paying off my debt. My mortgage is paid off. I have no credit cards, cars are paid off. I’ve been saving in the 457, 401, maxing those accounts out for years. So, I had a big nest egg there waiting for me. I could touch the 457, even though I’m not 59 and half. I could touch that 457 because I’m retired now. So, that’s a little nest egg there. I had at least six months of bill money just in my savings account. So, all these steps that I was doing, basically saving my 457, have a nest egg for me, paying off my debt. It really helped me out because when a life changing event happened for me, and I have to walk away from the law enforcement career, I’m okay. Because I’ve been doing stuff the right way for the last 25 years of my law enforcement career, set myself up. So, I think it’s really important to share that message and let people know that anything can happen, but you got to start taking steps now.

Kevin: Because so many people think it’s not going to happen to them.

Jim:   Correct. I never would’ve thought it, never.

Kevin: You don’t wake up one day and say, man, I’m retiring soon. I got to change my career. And that’s hard too, when people retire. You’re going from being a lieutenant to a financial advisor. Now you prepped all that, but that’s a whole different world.

Jim:   Sure. Totally.

Kevin: And from a mental standpoint, you just want to be prepared, not just for law enforcement, for anyone that’s going to retire. You just have to be prepared and visualize what that’s going to look like. And a lot of people right now, Jim, I would say most Americans, most people that come in here are under prepared for retirement. And not so much from maybe financially, but just from a planning standpoint. Schwab did a study a year or two ago, and 42% of the people they surveyed didn’t think they had enough money to do a financial plan. 19% of the people surveyed said they didn’t have enough time. And 22% of the people, and I think this number’s low, think planning, financial planning or having a plan for retirement is too complicated. Just getting it on a piece of paper or what your goals are and visualizing those goals, will probably, and I believe this wholeheartedly, we do it for a living leads to personal and financial success.

Jim:   So, yeah, I think for law enforcement community, Kevin, one thing is everyone usually comes to us for answers. Like, I mean, we get flagged down for directions. We get flagged down for a flat tire, we get caught… So, we’re always the guy that knows stuff. I mean, we’re women out there working, they always know stuff. So, for law enforcement to put their hand up and say, I have no idea what I’m doing with investing. I have no idea what plans are. They kind of just go with the flow. That’s right. They’re getting paid every two weeks. They know checks coming in that can stop. Look, it’s going to stop with me. So, like you need to have a plan. It’s very important. And I think the other reason is they think they’re just going to plan when it’s getting closer to the end of the line and it’s almost too late.

Kevin: It’s too late.

Jim:   It’s too late. It’s better than nothing at the end. But every person we bring in here, Kevin, it’s the same story. They say, I wish I would’ve started sooner.

Kevin: A hundred percent.

Jim:   Everyone says that. Everyone says, I wish I would’ve started sooner. Or I wish somebody would’ve came in and talked to me and told me the right path to go. We hear the same two stories every time.

Kevin: But not even that, like having a plan in life or a financial plan with you and your family, it not only leads to success, but at least to healthier money habits. I mean, look, this is from Schwab. 65% of the people that work with planners have an emergency fund where 33% that don’t work with planners do. 71% that work with planners are aware of fees and investment costs where 45% of the people that don’t work with planners don’t know what that cost. And the big thing is, one number is pretty interesting. People that work with planners, 47% of them never carry credit card balances and make payments on time where people that don’t work with financial planners, it’s 29% of them. So, you just have healthier habits working and people are going to come in here and we just had this conversation recently, like, well, your fee’s 1% or whatever the fee is, and they’re nervous of that fee. And they don’t realize like what it’s really costing them in the long run by not working with a financial professional.

Jim:   And I think that’s a big thing with fees all law enforcement wants. We talked to numerous of them, a lot of them have no idea what’s getting taken out of their accounts. They don’t see it. A lot of these places in fiduciary where they don’t have to show you, Valley Financial took this amount, these other places just take it. One night, you’re sleeping, boom they take it out. Next day the market goes up and down. You just think it’s the market. You really don’t realize that you just paid your quarterly fee, your maintenance fee, administration fee, whatever fees these people are charging. So, if don’t get scared of fees, guys. How funny was that, Kevin? We called a company and we were trying to figure out fees.

Kevin: They wouldn’t tell us. They wouldn’t tell us.

Jim:   They wouldn’t tell us.

Kevin: And they’re a 401k company.

Jim:   It was crazy. I mean, to me that was just so shady. So, thing about fees. So, guys, you can’t be scared of fees and wherever your money’s at, call find out. They’ll tell you look online and you can find it. No one will tell you straight out what these fees are.

Kevin: And we got to do cost analysis on that and on a 401k to a rollover to an IRA. But the thing is, when people bring up fees, we’re a hundred percent transparent on our cost here at Valley Financial Group. But I think the big thing is, is like, what are you comparing it to? Doing it yourself, working with your 401k provider, working with a broker, working with commissions, insurance. There’s all different types of fees out there or commissions. It’s just trying to understand what you’re used to, if you’re used to anything.

Jim:   That’s the big thing. And I always try to preach it to the law enforcement community is don’t be scared of fees. Sometimes if it’s a 1% AUM, that’s assets under management. That’s fair. It’s standard across the board. See what you’re getting for it. See if they’re going to be doing your taxes. If you’re doing estate planning, doing your will, there should be so many things that people do for you. And if they’re not doing anything for you, just run your account. Go to the next financial advisor. There’s thousands and thousands and thousands of financial advisors out there. Go on and feel comfortable. It’s worth paying. Whatever the fee is, if you feel comfortable with the service you’re getting because in the long run it, it’s going to be a better experience for you. It’s going to be a better experience for your children. It’s worth the fee. It really is looking into it.

Kevin: I think the big thing to wrap this up is, have a goal. Have a plan with you and your family as you did, number one. And not just in your mind. Have it written down. Have it written plan. Sit down with a financial professional and finalize that plan. That plan, it doesn’t go straight up. Obviously you know this better than anyone. It goes up and down and all over the place. It’s just constantly communicating with the person you are working with, or your spouse or your partner, whoever you live, with your family to make sure everyone’s on the same page of that plan. Because what I’ve seen in the past, over 20 years in this industry, if you don’t have it planned, plan to fail. And do not be scared of the fees. You don’t have to stay. It’s not Hotel California. You’re not locked up here working with most financial planners. You can leave anytime you want. But I think the most important thing is have a plan. Communicate your plan with your family and make sure it’s written down.

Jim:   That’s great advice, Kev. So, I want to thank everyone for listening to the Blue Money Podcast. We’re going to be running on these a lot more now since I’m working here full time. So, for the people that enjoyed them, you’re going to be getting a lot more content out there. Some good information. I want to thank everyone for listening and be safe out there.

Kevin: Be safe.

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