Time to FALL into a good habit!

It is that time of year again where children are thinking about Halloween and adults are planning for the Homecoming at Thanksgiving. At least that what the retailers would have one believe. But for me, I begin to think back over the year that was and where I am headed in the coming year. That’s right, I am talking about assessing what when right and what when wrong in 2018 and then planning where I want to go in 2019. I, personally, learned some very valuable lessons in 2018, none of which 

I will share publicly, but all which have left an indelible mark on my life.

Most people miss the mark concerning goals because they confuse resolutions with goals. Resolutions are notoriously negative. What I mean by that is that resolutions are normally made to stop a behavior that one has identified as detrimental to one’s existence. Goals are notoriously positive. That is, goals tend to be set to achieve something that is fundamentally positive in a person’s life.

The problem with resolutions is that they force you to focus on the very behavior you are trying to stop. Goals, on the other hand, force you to focus on the very thing you desire to achieve and if written properly, will cause you to practice positive behaviors in the process of that achievement.

I have always advocated that goals, especially strategic goals, give you a lot of flexibility that resolutions do not. Most resolutions require the “setter” to eliminate something from his or her life in order to achieve the desired outcome. If that things is not eliminated, achievement is impossible. 

However, goals retain a steady target with many paths to achievement. That is because properly written goals must have two critical elements, in addition to the goal itself, that provide guidance when things go wrong. And let me tell you, when you are on the right track, things will go wrong.

In 2008 I experience my first layoff in the 28 years I had been working. Starting in my sophomore year of high school, I started working for Arbys. Even though I changed employment over those 28 years, I had never been unemployed. That is because most of the time I was working two and even three jobs at a time. But then came 2008. After working steadily for over 21 years, my employer executed a RIF (reduction in forces). That’s a fancy way to say they laid a bunch of people off.

However, as luck would have it, I had another employment opportunity lined up almost immediately. I never even missed a paycheck between employers. Then, seven years into that employment, the company decided to move my position to another state and decided that I would be part of a larger lay-off. Again, within a month of being laid off, I was once again employed. Then came 2017. After falling into an opportunity where I thought I would ride out the rest of my employable years, I was blind-sided by the politics of a government position.

This time I had to make major adjustment. This period of unemployment would last for over four months. For the first time in my life I filled for unemployment benefits. I found myself attending employment workshops, job fairs, and support meetings. I found myself questioning if this was how I was going to enter retirement. The emotional rollercoaster I experienced was one that I had never experienced before and one I hope to never experience again.

As I look back over 2018 there is one thing that stands out. One thing kept me holding on when it would have been easier to just let go and fall into the abyss of depression. Having goals actually caused me to focus on what I needed to do in order to ensure that I did not have to give up on them. Resolutions would have been easy to give up on. Resolutions do not have the power to sustain you in the face of difficult struggles.

That is why every year, around this time, I begin to look back at what this year offered in terms of challenges that needed to be overcome. I think about how my goals stood up to the forces that tried to disrupt their achievement. And I consider what I might have done differently in the areas where the waves of life breached the walls. Life has a way of taking things from you. Like the waves on the ocean which gives up its treasures during a Nor’easter and then takes them back during a hurricane, life is a constant ebb and flow of challenges; revealing opportunity and then snatching it back from you just as you reach for it.

Even though I had been setting informal goals in high school, I began to write out my goals in 2005. A goal not written out is nothing more than a hope or a dream. You have to write your goals out and refer to them when times get tough… and times will get tough, trust me. Since then, I have become an expert in developing strategic goals that make positive impacts in my life and I have helped countless people change their lives by writing out their goals.

The truth is, I can’t imagine not setting goals. I can’t imagine living life without focus. That is why I am offering to work with any individual who wants to begin 2019 with more focus, more intention, and more purpose. Of course, my time is valuable and the information I provide will continue to pay dividends far into the future. The consultation is free. So why not take a chance and discovery how much you have been missing by not living your life with focus, intention, and purpose?

If you want to take the next step in designing your future by making this the year you learn how to really set strategic goals, connect with me on LinkedIn or email me at krupert1964@gmail.com. You are not paying for a service, you are investing in your future.

Beware To Be Aware Of Replication

Most people who take advantage of a company sponsored tax-favored retirement or health savings plans often commit a cardinal sin of investing. They fail to research the investment options before allocating their contribution and the company’s match. It is not enough to research the mutual funds. You also need to look at the underlying securities. Much to my chagrin, many options within 401k and HSA plans often overlap the underlying securities, albeit at different percentages. What do I mean by that? Let me give you an example.

Not too long ago, an acquaintance asked me to help him analyze his investments across three accounts. He had the standard brokerage account, a traditional IRA, and a Roth IRA. After reviewing his current position, all of which were chosen by a “professional” financial planner, I discovered this sin of replication.

The following example includes actual numbers. I use this example to highlight the repetition in just one of the accounts. Based on the common top ten holding, if the industry takes a hit, so too does each of the four CEFs (Closed End Funds). The result is a magnifying effect of losses. Of course one could argue that if the industry does well, the gains will also be magnified in the positive direction. However, one needs to know the industry before committing this type of strategy.

This person’s financial advisor had him invested in 4 CEF's in his brokerage account. The top 10 holdings in these 4 CEF's duplicate each other as seen in the tables below. (Price is of 4/18/2018)

Notice the repetition of companies; over $90,000 invested in essentially the same companies although at varying percentages. This is not diversification. It is replication and is actually a risky strategy.

For those who participate in any company sponsored 401k or HSA plans, understanding the underlying securities that make up the mutual funds in which a person may invest is important. For example, in the HSA account offered by Health Savings Administrators, there are five Vanguard funds that replicate their top ten holdings. This is astounding. The following table illustrates my point.

If, for some well-intentioned reason, a plan participant distributed his or her contribution across these five mutual funds, he or she is at risk of magnifying any potential loss based on the number of times a security is replicated. If the If Facebook, Apple, Alphabet, and Microsoft took a hit, all five mutual funds would take a hit and the loss would be magnified.

My suggestion is before you invest in any mutual fund, regardless of the type of account, do some analysis on the underlying securities. True diversification means not replicating the underlying securities, especially not the top ten holdings. If you have questions about how to analyze mutual funds, leave a comment.

Ten “Do Nots” About Setting Goals

I put together this short list to highlight the mindset a person needs to be successful in achieving personal goals. There are times when the application of all of the rules will be required. There are other times when the nature of the goal will dictate the rules that apply. Although this list is a list of “do nots,” reading the rule in the affirmative will help guide you to taking the correct action when setting goals.

If you need additional guidance on setting goals, I have an entire chapter in my book, Simple Wealth Building Strategies. In this book, I go into great detail on setting goals from both an physical and intellectual perspective. I believe this resource will help you change the trajectory of your life, but you will have to do the work of learning and applying the information. I hope this short list of “do nots” help you focus on your future success.

Here is the list of things you should refrain from doing if you want to be successful at achieving your goals.

1.    Do not set goals that require someone else to change. I want my husband to love me more is not a goal YOU can achieve. People change because they want to, not because you want them to. Your goals should be about changing you, not others. Tying your goals to changing others is a sure way to become frustrated, bitter, and, in the end, a failure.

2.    Do not set goals that require someone else to accomplish something so that you can accomplish something. Goals that are dependent on someone else’s accomplishments often cause frustration because the goal becomes more about controlling someone else’s behaviors than it is about controlling yours.

3.    #160;Do not set goals that focus on changing the circumstances in which you live. Rather, set goals that change how you interact with the circumstances in which you live. Trying to change the circumstances is like swim upstream on the Mississippi River, you might make it, but you’ll waste a lot of time in the process.

4.    Do not set goals that compromise your character. In the end, you may have what you want, but no one will want you. Every life leaves a wake upon the shores of those with whom they interact. Compromising your character will erode your relationship and destabilize your ability to achieve future success.

5.    Do not set negative goals. Removing something from your life is not as important as adding something to it. Instead of setting a goal to lose weight, set a goal to eat healthier and exercise more. Instead of setting a goal to reduce spending, set a goal to save more. Focusing on the positive is far more fulfilling than always focusing on the negative.

6.    Do not set goals that conflict with other life priorities. Always keep the most important things the most important. When your goals compromise you commitment to your faith, family, and friends, the achievement is never worth the cost. Have rock solid priorities and your goals will always compliment them. 

7.    Do not set goals that lack discipline. Discipline is a combination of three elements: character, stamina, and wisdom. Goals that challenge your current abilities build character, develop stamina, and produce wisdom. Your character is who you are when no one is watching. Stamina is the ability to stay committed even in the face of overwhelming negative odds. Wisdom is the appropriate application of knowledge gained through experience and observation. Discipline is the capstone of achievement.

8.    Do not set goals that are too easily achieved. Goals that are too easily achieved produce a false sense of security and accomplishment. Training yourself to overcome trials and tribulations will sustain you when times get tough. Stretch goals force you to be uncomfortable. When you are able to achieve your goals in the face of adversity, you will have a greater sense of accomplishment and confidence.

9.    Do not set goals that are unable to produce a return on your investment. Time is the single greatest resource of which you have no ability to create more. Why waste it on pursuing goals that do not add value to your life? There is a distinct difference between goals that build wealth and those that waste resources. Your goals should move you towards a financial target, not further away from it.

10. Do not set goals that fail to have a sustainable target. That is, once the goal is achieved, it has the ability to self-sustain a pattern of continual growth or improvement with little or no effort. The best measure of a goal is one that eventually becomes a way of life. Once you have overcome the major roadblocks to achieving the goal, you are able to sustain the activity without struggling to continue to achieve the goal.

If something here has helped you, please share this post with your contacts. Don’t forget to pick up your copy of Simple Wealth Building Strategies and keep your eyes out for my new soon to be released book 10 Roadblocks To Successful Investing, And What You Can D0 To Overcome Them.