VR SAM welcomes Jon Vinge, Financial Advisor, Investment International Equities Corporation, as a new contributor to our newsletter and the VR SAM® forum.  As a former Naval Officer with 10 years of service, Jon is certainly not new to the challenges facing our Military Families.  Nor is he new to Financial Planning.  Jon has 8 years in the industry and practices a “wholistic” approach to financial planning.  He is a NROTC graduate of the University of Minnesota and completed his MBA at the University of San Diego. He specializes in pension maximization, portfolio analysis, strategic wealth management, and estate planning.  Jon counts among his many long time clients numerous Military Families.   Welcome Jon!

It is a pleasure to be part of this growing forum and a resource of sound financial advice to some of our most deserving Americans – our active duty, reserve, and retired military service members.

More so than ever, our Military Families need a “wholistic” financial strategy and plan.  And not a canned one from the talking heads on today’s most popular day time shows.  This requires a trusting personal relationship with your financial planner combined with the personal discipline to save towards your wealth “accumulation” goals.  Even more vigilance and discipline, or “wealth management,” are required to ensure that your investments will not evaporate as you approach your retirement.  My forum posts and newsletter articles will be designed to help you get your arms around a “wholistic approach” to both wealth accumulation and management that so few people ever achieve.    

A recent study published by the Employee Benefit Research Institute reports indicated that only 20% of retirees are “very confident” they have sufficient assets to maintain their desired retirement life style.  For those not yet retired, that percentage is a dismal 5%, which is of course a 95% failure rate!   

With higher levels of education, better financial analysis tools, and highly trained financial planners, how is it that financial independence is more elusive than it was for our parents? 

I find in many cases that these sad results are not due to our failure to follow our financial roadmap, but rather that the roadmap isn’t the right one!   The right road map MUST articulate a clear, comprehensive approach that adequately considers short, medium and long term goals.    

To be clear there is no “cookie cutter” approach as everyone’s circumstances and goals will differ.  To refine your plan, you  should work with a financial advisor who uses a “wholistic” approach which focuses on the present first, then medium and long term goals.  To be effective, it must involve both spouses and a professional, objective coach / financial advisor, who understands the spectrum of financial tools and products.  More importantly, the “coach” must be able to encourage a dialogue that leads to discovery of how you feel and act with regard to  your finances.      

Your coach should help you evaluate your current goals, strategies and investments, and assess their suitability and tweak where necessary.   Your coach should work with you continuously to keep you out of that “95% club.”  Here’s where to start.       

1.    Select the Right Coach / Financial Advisor for Your Family.   Select an objective, experienced advisor who demonstrates a willingness to truly “coach.” 

2.      Plan and create specific and measurable goals together.  An honest self-assessment with your spouse and coach, and strong desire for success are critical to a successful outcome.  Make your plan and goals specific, measurable, and something you can hold yourself accountable to. 

3.     Commit to Change, and be prepared for the discomfort that change will create.  Just like a weight loss or physical training plan, a financial plan will require discipline and a bit of pain but achieving the end goal is well worth the pain!   Keep your goals visible.  

4.     Create a budget that “pays you and your family first.” 

For my upcoming article, I ask that you consider the following question:  What is your marginal and effective tax bracket and what is the difference?

If you don’t save for your retirement, who will?   Are you ready to start?

So at what point should a person consider talking with a financial planner?  Is there a specific amount of money we should have or make for it to be effective? 

Hi Mike,

This is a great question.  I believe this is a large contributor inhibiting people to take the first steps to developing a comprehensive financial plan. 

A financial plan shouldn't cost much to develop the framework, so don't be intimidated by that.  What you should be prepared to spend is time discussing and analyzing what you have or don't have and what your expectations are.  This time spent will have the biggest (read “compounding”) positive net effect, because it will bring you closer to a point of implementing a plan or  at least deciding the type of advisor you do or don’t want to hire. 

“Who should I include in my plan” is a question I often get.  And my response is anyone who pulls on your "purse strings" and can be a decision maker on how your hard earned income or assets are spent.  This means a spouse for sure.  Or it can mean the people you are dating, roommates, and even prospective business partners.  It can't hurt for those around you and who care for you to learn about the seriousness you consider your financial future.  I don't usually recommend involving children at the initial planning meeting, but I will have more on that in the future.

Another question I get is, “who should I go with for the advice since there are different types of advisors out there”?  For this I recommend checking with a few different advisors.  The type of resource you want is one that doesn't push you into a relationship, but rather takes the time to develop the rapport to be a comfortable fit for you. 

Don't be afraid to take recommendations from your trusted friends and family.  Just remember that everyone is at a different point on their financial path, so ensure the resource you choose is adequately equipped to deal with your specific needs.

For instance, I've had numerous prospective clients come in having had their parent’s financial advisor referred to them.  In many of those cases they had already started with that trusted family person.  But when I asked them what their comfort and confidence level was working with that person, it became evident they had more confidence in who referred them then in the person giving them the financial advice.  In few circumstances have I found using a parent's financial advisor was of significant benefit (when dealing with estate planning this is not the case).  And when the parent's advisor was told their services would no longer be used, the response from that advisor was generally very positive.

Here are a few recommendations you can take to help minimize the costs while continuing to discuss setting up your financial plan.

1-Don't be afraid to ask if an initial consult is free.  Believe me, it is in the advisors best interest to be certain it is a client he wants to take on, and charging a fee has some binding requirements that may not be worth it. 

2-Get your own financial documents in order; tax returns, retirement statements, credit card statements, pay stubs, etc...  If you don't know where they are, don't waste anyone's time whether it is free or not.  This shows the advisor you are at least organized and serious about your financial future.

3-Consider who you want to be part of the decision making process and coordinate schedules.  If you don't have that person(s) with you initially, the second or third consult will likely start to cost you. What can it hurt to have someone with you who you can talk to about what you thought you heard?

4-Think "big picture".  Do you want a plan suitable for you now and to continue to develop in the future, or do you want do you want to pay for a plan now and then worry about updating a later time? Don't let your plan be a book end on your shelf collecting dust.

To simply answer your question; if you are ready to commit some time (and maybe a little money), then you are ready to develop a plan.  Don’t let imaginary net worth values dissuade you from drafting your financial roadmap.