Golden Opportunities

Last week, when we huddled with Jim Lineweaver, he spoke about the importance of having a financial quarterback, one person who can envision the best game plan to help you reach your investment goals. Here to give us more details is Jim linebacker, er, Jim Lineweaver, our financial quarterback from the Lineweaver Financial Group.

Question: Jim, the last time you joined us, we discussed the need for our viewers to have an overall coordinated approach when it comes to their financial affairs. You gave the analogy of a football team trying to score without a quarterback calling the plays. The chances are slim! To help ensure financial success, we too need a quarterback-a financial quarterback.

Answer: For years I have been helping my clients make sure there is a coordinated approach to their financial affairs. If you or the people you are working with are making decisions that are independent of one another, you have 11 people calling the plays instead of one. You are going to fumble the ball, or you stand the chance of having the players on your team literally running into one another. Not a pretty picture, especially when it involves your financial future.
And the idea of having a financial quarterback isn't just for the wealthy. As we talked about on the last show, your financial team is comprised of your different insurance agents, your CPA or tax preparer, your bank, and any investment advisors with whom you are working. Most people have such a financial team, and they all need to have a financial quarterback.

Question: Can you give us an example of some pitfalls that may occur if you don't have a financial quarterback?

Answer: What happens if an advisor recommends you take money out of an investment and by doing so you have income to report? Will the receipt of that income trigger taxation on your Social Security? If you have a good financial quarterback, you will know before you make the change. If not, you may be surprised when you go to file your taxes. If you are a married couple, and your provisional income is above $32000, you will see 50% of your Social Security subject to income tax. Don't be surprised!
Let me give you another example. A couple has life insurance policies that they haven't looked at in years. And now they are concerned about the expense of long term care, so they purchased a traditional long term care policy. Would they have been better off combining the two types of coverage in one policy with the potential for better coverage and lower cost, with more money going to their kids after they pass away? If they need long term care, they have it. And if they don't their life insurance proceeds go to the kids. A financial quarterback can help draw up that game plan.
Or how about the couple that is taking money out of their IRAs to help cover their monthly living expenses, and at the same time they have mutual funds and they are reinvesting the dividends and capital gains. They are creating a tax liability by taking money out of the IRAs when they could be using the taxable distributions from their mutual funds to help pay the bills. If there is no overall coordination, there could be mistakes, and those mistakes can be costly.

Question: Can our viewers quarterback their own teams?

Answer: Sure they can. And if they don't have someone in that role already, they are their own, de facto, financial quarterback. If you are doing a great job of it already, keep up the good work. If you haven't started to think about your role as the Financial Quarterback, you will need to start by memorizing the play books, watch all of the game films every week, and know what the competition is doing. Are you able to get all of the players on your financial team talking amongst one another? And don't forget protection. You are going to need a helmet, shoulder pads, hip pads, etc. And be prepared to wake up on Monday morning and wonder what the heck hit you!

Question: It sounds like you need to have education and experience to take on such a role.

Answer: I tell people that want to take this role themselves, be prepared to get your shins kicked in a few times. If you are young you can take it, but as you get older it takes much longer to recover. The same think applies financially. How long will it take you to recover if you make mistakes? Will you be back in the game next week, or will you be on the injured reserve list for the rest of the season?

If your investments have taken a time out from growth, and if you want to get back into the game, don't pass on the chance to give Jim a call. The number's next.