Argent Financial Group, INC

Argent Financial Group, INC http://www.argentmoney.com/blog Just another WordPress site Mon, 17 Jun 2013 15:16:26 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 MAKE UP YOUR MIND: HOW TO MAKE FINANCIAL DECISIONS http://www.argentmoney.com/blog/?p=271 http://www.argentmoney.com/blog/?p=271#comments Mon, 17 Jun 2013 15:16:26 +0000 admin http://www.argentmoney.com/blog/?p=271 Continue reading →]]> Question: I’ve got to decide about a job change. My job is killing me, the hours are too long, I never see my family and I just don’t like what I do. But the money is a lot better than I can do anywhere else. Switching jobs would mean a huge lifestyle change for us. How can I know when the right time is to make a change?

Answer: I think you already know.

For most of us, making decisions feels very difficult.

Making a decision means you are saying yes to one thing and no to a myriad of alternatives (sort of like getting married). Keeping the door open to the perception of unlimited choice is usually dissatisfying, but it keeps the stress of making an actual decision at bay.

Making financial progress (or progress in any realm of life) is only going to happen if you grow in the skill of decision making. Here’s a process you can use to make a hard decision:

Get the important facts. You do not need all the facts. A neurotic search for every last fact is a delay tactic. Aim for getting 80% of your facts straight. Waiting and searching for every last fact is a waste of time and energy.

Seek wise counsel. By all means, talk to people whom you respect and who have been through a similar situation, or who you simply regard as wise. In most cases, you don’t need to discuss a big decision with more than three people. Seeking many more opinions than that is usually simply practicing procrastination.

Pray for courage. Ah, now here is the issue. Most of the time when someone comes to me with a worried look on their face, saying, “I just don’t know what to do,” they know exactly what to do.

They just don’t want to do it.

Courage is not the absence of anxiety when taking action. Courage is acting anyway.

So whether you are the praying sort, or someone who looks deeply within themselves for this kind of character quality, you’re going to have to tap into courage to make a hard decision. Because ultimately, you’ve got to…

Pull the trigger. Take the action. Quit the job. Fire the employee. Sell the house. Ask for the raise. Take the risk. Live your dream.

You hate your job. Sounds like your job hates you. You never see your family. If someone offered you a handsome sum to ruin your life to this degree, would you accept the money?

You know what to do. Make the decision.

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Byron R. Moore, CFP^® is managing director / planning group of Argent Advisors, Inc. Email him at bmoore@argentmoney.com. Write to him at 500 East Reynolds Drive, Ruston, LA 71270 or call him at (318) 251-5858. The views expressed in the preceding commentary do not necessarily reflect the views of Argent Advisors, Inc. No forecasts can be guaranteed. Argent Advisors, Inc. does not offer tax, insurance or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax, insurance or legal advice.

]]> http://www.argentmoney.com/blog/?feed=rss2&p=271 0 DIVERSIFY YOUR DIVERSIFICATION http://www.argentmoney.com/blog/?p=268 http://www.argentmoney.com/blog/?p=268#comments Fri, 07 Jun 2013 14:10:07 +0000 admin http://www.argentmoney.com/blog/?p=268 Continue reading →]]> Question: How many mutual funds do I need to own to be properly diversified?

Answer: A lot more than you think.

Your question tells me you are thinking about diversification in a very one dimensional sense. You need to diversify your thinking about diversification.

First of all diversification is fancy language for not putting all your eggs in one basket. It is the art and science of embracing variety over specificity for the purpose of reducing the risk of significant loss.

It is an ancient practice. Wise King Solomon advised, “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

The word diversification has come to be associated almost solely with investments. That’s too bad. The need for diversification is much broader. Here are just few areas in which you need to diversify to reduce significant risks:

Investment diversification. General Motors, Lehman Brothers, WorldCom, Enron, Pacific Gas and Electric, Delphi…all names that in their day stood for solid profits and strong balance sheets. All of them went into bankruptcy. Some emerged in some form; others are gone forever, with 100% of their investors’ money. Obvious lesson: don’t put all (or even a lot) of your money in one single company’s stock.

Liquidity diversification. This could also be called “the need to spend money” diversification. You just never know when an auto accident, a hospital stay, a leaky roof or a lost college scholarship may call on you to spend money you were not expecting to spend. That’s why we advise clients to keep at least six months spending needs in accessible, liquid form – otherwise known as cash.

Tax diversification. Has someone told you to put all the money you can in a 401K plan? The usual rational for such advice is that you can defer money from a high income tax bracket to a lower one, when you retire. But who guaranteed you that your taxes will be lower? What if they are higher? I have absolutely no clue where tax rates will be when I retire. That’s why I don’t want to bet the farm on a single tax strategy of deferring my tax obligation until that time. I’m doing some of that – just not all.

Actuarial diversification. Because you don’t know how long you (and your spouse) will live, the only rational thing to do is to plan on living a very long time. An insurance company or a pension plan does not have that problem. Because they are looking at the average of multiple lives, they can tap into actuarial science and determine the average life expectancy of the group. And since the average life expectancy will (by definition) be shorter than the longest one might expect to live, the cost per person of retirement income is lower.

That’s why annuities and permanent life insurance can be useful tools when skillfully paired with investments in a balanced fashion. Always work with a licensed professional advisor concerning these matters.

No doubt investments are what most of us think when diversification is mentioned. I hope you now see the area that needs the most diversification is your diversification.

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