What is up with the economy these days? Look up what the housing market, stock market, and cryptocurrency have been up to, and the charts look a bit like a roller-coaster. 

Inflation is sky-high and the overall cost of living is increasing–though salaries aren’t keeping up. Americans’ portfolios hit a low last fall–causing a stir for Boomers with an eye on retirement–but are on a major upswing. Home values are up, though sales are slowing–and nobody’s quite sure what generational shifts and a wave of retirements are going to do to things. 

Depending on who you ask, some say the economy is on the brink of a recession. Others are optimistic; after all, the stock market has recently had some of its most consistent growth in over a decade! Many are somewhere in the middle of those two groups and treading lightly.

At Apex, we’re about thoughtful legacy planning for nonprofits and their donors–and many of our conversations focus on charitable giving. The economy often comes up, too. So when we met Financial Advisors Dena DeGroat and James Aman–who are part of Journey Financial Consultants, in the Thrivent Financial Network–we loved their holistic approach to finances and instantly had a list of questions we were eager to ask. They shared some observations and ideas for talking about generosity and the future, especially when things seem a little shaky. 

Without further ado, here’s what Dena and James had to say:

Apex: What is your approach to financial planning? When you meet with a new client, what are you interested in getting to know about them before talking about their financial options? 

Dena: We spend time finding out what’s going well, and also what areas of improvement they want to see with their finances. We don’t shy away from talking about concerns and fears they may have. Sometimes people have a worry that is based on some misconception, so it is great to let them air these things out! We touch on goals in 7 key areas of financial planning.

James: We really prefer to work with our clients on a holistic, comprehensive basis–where we advise in all key areas of financial planning: financial position, protection, investing, tax strategies, retirement planning, estate planning, and generosity. We want our clients to define what is important to them. Are they open to new ideas and suggestions? How much education would they like to receive?

Apex: We’re in an interesting time in our country. There’s a huge transfer of wealth that’s going to be happening between generations in the next few decades. And, well, we’re not quite sure what the economy is doing at the moment. How do you guide people and families through financial discussions with these things in mind?

Dena: I think that uncertainty is absolutely the only certainty–and that feels heightened for some right now. Many people hold wealth in real estate, business(es), life insurance, and all sorts of savings and investment vehicles. Our clients don’t have to accept a level of volatility that makes them feel scared; we can use vehicles with guarantees and such. When it comes to investments, sometimes I show people a visual of the 110+-year history of the stock and bond market. People can see that markets have always been volatile! 

There’s an old adage in the financial industry that says, “it’s time in the market, not timing the market that matters.” Missing out on just 10 of the best days in the S&P 500 between the end of 2021 and January 2002 would have reduced your average annual return from 9.52% to just 5.33%. IN ONLY 10 DAYS! Our team provides a voice of reason and calm amidst the turbulence of the market so people don’t let fear create regret.

James: We focus more of our attention on “levers” we have control over:

• Offering strategies to minimize lifetime taxes, which provide insight to the ideal time(s) to take Social Security and pension benefits
• Providing a roadmap of how assets should be positioned for distribution
• Factoring in comfort level with overall portfolio investment risk, safeguarding a percentage of assets to avoid market volatility and meet short-term spending goals

There are always reasons to be bullish or bearish on the markets, but planning and projections can provide clarity about when you personally need to access funds. Investments can be positioned accordingly, which takes pressure off of how the entire portfolio is performing from day-to-day.

Apex: Sounds like age and life stage play into financial planning in a big way. Do you notice any trends in how different age groups talk about their wealth or make financial decisions? As clients age, how do your conversations change?

Dena: I have not noticed a definite, patterned difference between generations, though it does seem that Baby Boomers are a little more reluctant to be generous toward organizations and causes in their legacy plans. And I think that my generation–Generation X–tends to value material possessions a bit more than those who are older or younger than us.

James: Yes, I’ve noticed several generational trends over the years. We work with many elderly clients who have a difficult time realizing income, or making use of the assets they’ve spent a lifetime accumulating. It may be they don’t want to pay the tax bill, they are perfectly content with their lifestyle, or frugality has become a defining characteristic of who they are. For some, paying full price for anything almost seems like a sin! 

It seems as though younger generations are more interested in work/life balance. They are willing to work less, earn less, and spend less, but often have very clearly defined financial goals. Sometimes these goals are too lofty, given their lack of emphasis on accumulating funds for the future. So we talk about setting realistic expectations or adjusting savings.

Many clients approaching or entering retirement–Baby Boomers–want to retire early, upgrade their homes, and travel more. The older generation seems to live frugally and stay in the same homes until they are no longer able to. So we spend a lot of time comparing income and spending models, talking through what it would take to move to a new residence, fund grandchildren’s education, or achieve other goals in this new chapter of life.

Apex: Generosity seems to be a big component of how you engage with clients in creating a comprehensive financial plan. Love that! What are some “best practices” for being generous when the economy is being a little unpredictable? Or, how do you help clients keep a healthy perspective on market dynamics in order to keep generosity at the forefront?

Dena: I like to remind people of all the parts of their net worth that are “up” and also what income or assets in their portfolio are stable or even increasing. It is human nature to focus on the problem, so positive reminders are important. 

Tax strategies are helpful no matter what the market. Their financial plan–and all the work we do together–already takes into account times of great volatility! We plan for ups and downs, because they simply are the way of things.

James: Our team identifies “generosity” as the seventh key area of financial planning. I believe an outward focus leads to greater contentment, which removes a level of emphasis on the economy or markets constantly needing to outperform. Our clients know and believe that, for the most part. But financial planning software can show that a down year here and there doesn’t derail things! Keeping that “big picture” perspective can provide a level of comfort and patience.

Apex: Love that approach. Once someone has a legacy plan in place–in other words, their long-term financial picture is more certain–they feel more freed up to give now. Some opt to gift from real estate, crops or business assets, pre-tax IRAs, or donor-advised funds. These are all non-cash assets that don’t impact their day-to-day, liquid income quite as much. Any other parting words of wisdom for our clients and readers?

Dena: Feeling comfortable with your advisor team is so important. You should be able to air the things that are truly causing worry or concern, even if they feel a bit embarrassing or awkward, is so important. To be trusted and have this type of relationship with clients–walking through the comfortable, fun stuff and the tough stuff together is a blessing for us!

James: Seek out a trusted advisor–or team–who gets to know you and understand what is important to you. They should be able to educate you and assist you in determining what “levers” to move, and when, to create the most ideal financial picture for you now, in your future, and even beyond.