North Bay wealth advisers have been taxed with making their clients money count and last, after enduring the past year filled with challenges relating to COVID-19.
Some of those challenges of 2020 remain, as companies to varying degrees emerge out of shelter-in-place orders and a changing economic landscape predicted to not be fully recovered until 2024.
In these unsettling times, the North Bay Business Journal asked: “What is the No. 1 way to accumulate and retain wealth in the age of a pandemic and new administration?”
David K. Brown
Encore Wealth Management and The Wealth Consulting Group investment advisory representative
The number one way to retain and accumulate wealth post COVID is to follow a recipe that has always worked. Spend less than you make, invest and add money to your retirement accounts as well as build a rainy-day fund. (Also), increase your learning and add skills that you may not have had. Those that added computer skills were able to work remotely have thrived financially, namely because they were not able to go out and spend money, (AKA – spend less than you make. Pay down your debts. Don’t buy crap or a better way to state it is: don’t do retail therapy! Avoid scams, there are more ways than ever to get scammed. Be an investor, not a gambler or speculator, people that get rich quick get poor the same way, and like every good and successful athlete, have a really good coach and enjoy the game of life.
JDH Wealth managing partner
A) Great question — the best way to preserve wealth during a pandemic is to stick to your plan and not panic. In other words, continue investing. If you have money to invest, invest it. If you need money for living expenses, take it out. Leave emotions and the chaos out of it. They don’t belong.
The same logic applies for a change in administration on Pennsylvania Avenue. There may certainly be some changes that we will see in the next four years, but they shouldn’t alter your strategy. Focus on what you can control: Save 15% of your paycheck, live within your means, diversify your portfolio and work with a financial adviser who should be serving as your constant financial quarterback through the ups and downs.
John E. Mackey
Exchange Bank Trust and investment management senior vice president
The current environment is hard, dramatic change is always hard. But change also creates tremendous opportunity.
The No. 1 way to accumulate wealth in the current environment is to take risk! Indulge your entrepreneurial spirit and start a business. When you invest, take advantage of how risky assets have proven to help wealth grow over time. Save, watch fees and commissions carefully (the goal is to send your children to college not your advisor’s kids) and invest in a manner that has proven successful; then, keep an eye on taxes.
Charles J. Root Jr.
Double Eagle Financial managing director
A) First, one needs to know what not to do in investing — avoid the television investment shows. The talking heads throw out the 3-second ideas that are not translatable to any future growth.
Most people we talk with have no idea of where they are going when we talk about retirement or leaving a legacy. There needs to be some major decisions about family and where one wants to end up at the end of their life.
One should not listen to several people when getting investment advice. One needs a trusted adviser and should mostly discount most everything else. You need to go to great lengths to find this adviser, but it’s worth the time.
One of the criteria for choosing an adviser should be where he/she gets her advice and how (the) fees are charged.
The critical need is for a plan, one that is detailed and includes all your goals and what you want to accomplish for the future. A good adviser will have a process to help you determine and clarify those goals. An effective plan will include some benchmarks and test points to make sure you are on track for success. That adviser will watch and check on you to ensure you’re doing what you said you wanted for success.
Understanding of how the market works is never easy, even for professionals. Fundamental analysis will tell you which companies or funds are good ones, but it doesn’t tell you the time to buy. Nor does it tell you whether the market is safe to buy at the moment.
Always look at the market from the top down — the broader market first, then which sector is best, (onto) the individual investment. Do not be afraid to stay in cash or money market funds while the indexes are upside down.
Also, the pie chart is misleading, as is the re-balancing. This concept says take money away from markets that are performing and put it in losing sectors or other areas. There are many quotes that say, invest in what’s going up and watch your account. Stocks, ETFs or funds do not go up forever. They have cycles just like everything else.
If this sounds complicated it is.
What is important is to watch the short term, when it doesn’t go up. That’s when your account goes south and takes a long time to recover. This also saps your confidence in your plan. Sit down and make a list of all your dreams, then get an adviser to help to turn them into goals and a plan. You will be a winner.
Montgomery Taylor Wealth Management CEO
Many people are spending less during the pandemic, due to the lack of travel opportunities, so there is potential for saving. The question is, will you save it or spend it on something else? I think saving, during a pandemic, or otherwise, is a mindset which takes discipline. You just have to ask yourself, do you want to live for today or put something away for the rainy days and retirement ahead?
Also, when you get your Biden Bucks (stimulus money), if possible, you should stick that into your long-term investment account. It is like “found” money, so invest it for your future.
To accumulate wealth, you must develop a habit of saving and living on less than you are making. This may not seem easy sometimes, and sometimes it is easier than others. The key is to start with something. Even if you feel you can only put $50 per month into an investment account, you really must do it. You will be surprised how it grows. You’ll be on your way to a brighter future.