Once you’re ready to fully embrace financial planning, it’s time to take an educational deep dive and navigate the waters. Northern Michigan wealth planning firm Hemming& is here to help.
Wealth management can get a little murky. There are career shifts and evolving personal goals, volatile markets and shaky investments. Some years you’re successfully swimming along while others leave you reaching for a buoy.
The key to keeping things afloat is a doable plan—and an advisor to help educate you and cultivate a well-defined roadmap to achieve your goals.
A Three-Prong Approach
Any good financial plan is multi-faceted. Taking time to deep dive into clients’ desires and history and truly understanding what makes them tick and then building out a plan to achieve goals is a successful recipe. Northern Michigan wealth planning firm Hemming&’s three-step method—embrace, educate, empower—is unique, nurturing and one that the company has honed after harnessing prior professional backgrounds in teaching and counseling.
“We understand the value of explaining options in a way that is clear to our clients,” says Dawn Hemming, Hemming& founder and president of the Registered Investment Advisor (RIA) firm. “We help them gain a better understanding of the financial concepts of investing, retirement and wealth preservation.”
The key to getting started? Embrace what’s important to you. Embracing is all about committing and starting where you are financially. This is the deep dive. Data is gathered, a meeting is set and the sticky questions—like will you be able to retire with the lifestyle you want? — rise to the surface.
Once you’re intentional with financial planning—even the things that may give you anxiety or make you uncomfortable—you can set realistic expectations. Next, Hemming& professionals pull in the right amount of education. This is a critical step in the financial planning process.
Related Read: How Hemming& Can Help You Get Real with Your Money
The Power of Education
Successful financial planning leans heavily on having the right teachers and mentors in the industry; someone to fill you in on the ins and outs and next steps and to help you feel confident that your financial plan will afford your life’s goals. After taking a magnified look at where each client is and where they want to go, Hemming& advisors take an educational dive, exposing options and opportunities.
The educate step is where experts consistently use analogies and stories to relate complex concepts. Hemming& often uses visuals both on a large screen and on paper to illustrate concepts, centering everything on aspirations for an abundant life. Whether dreaming of a new car, lake house or retirement lifestyle, Hemming& calculates opportunities, makes purposeful decisions and ensures every financial plan is well coordinated and effective.
“Planning for a financial future can get overlooked, put off, deterred and rerouted. It can be overwhelming. But with a little education and background knowledge to gain your footing, you can soar,” says Hemming& financial advisor and partner Autumn Soltysiak.
When education isn’t a part of the planning process, Hemming has seen the best laid plans go a little bit off the rails.
One example? Business owners who tried to avoid social security tax by keeping their income low. Hemming& worked with their CPA to increase recognized income and the social security benefit for both they and their spouses dramatically improved. Clients who are focused on saving taxes and avoiding taxes with traditional methods are creating a larger problem down the road, Hemming says.
Another client, a retired police officer whose pension met his income needs, had decided he wanted to draw social security early because of a distrust of the government. Hemming& helped him realize the $520,000 benefit of waiting to draw social security.
The firm has worked with a couple who were CD investors, educating them about opportunity costs and comparing rates of return. The clients decided to make adjustments and grow these accounts to more than $1 million, a more than six-figure difference in actual earnings.
Each client’s experience is different. Past performance is not indicative of future results, which could be substantially different. Every individual decision should take into account any investors particular investment objective, strategies, tax status and time horizon and be coordinated with a client’s tax and legal advisors.
Often, our financial education, information or misinformation dates back to our upbringing. When Dawn Hemming was a teenager, she watched her dad read the Wall Street Journal every day. He encouraged his daughter to save her earnings, collecting her waitressing cash and paying her a hefty 12 percent in interest for socking it away.
Hemming says a client’s upbringing and parents’ attitude about money plays a big hand in their own adult relationship with money. Sometimes you learn great money concepts, such as the value of compound interest, from your parents, like Hemming did. Other times, you see your parents stash cash in coffee cans, losing buying power as the cost of gas and groceries continue to climb.
Because not every family passes along financial literacy, the need to get up to speed and get educated is crucial, including working with a team of experts on subjects such as:
- Pay taxes now or later. Talk to your tax advisor on strategies like Roth Conversions to turn the tax clock off to avoid paying taxes in a future anticipated escalating tax environment.
- Pension options. Being intentional about pension plan options, including survivor benefits, long before the decision needs to be made.
- Portfolio design. Clever risk management that doesn’t pigeonhole people into traditional portfolios. A good planner can help clients find clever ways to mitigate risk.
- Smart Debt Management. For mortgages at a low fixed rate, using extra savings to grow (instead of paying off mortgages early) can result in more money in your pocket over the life of the loan.
Achieve Life Goals
Once clients embrace their financial futures and are educated and armed with a roadmap, it’s time for empowerment. Hemming& advisors are always exploring new opportunities and staying on the forefront of tax laws, investments and financial planning strategies to ensure wealth management success.