I have been a financial advisor for more than 20 years, and more recently a Myeloma Financial Coach and Advocate. Often when speaking to a perspective client I'll ask if they are working with an advisor. Many will say “no, I don't have enough assets or make enough money to need one.", or, " I am very capable of doing everything on my own.". Usually they are referring to their 401k or savings in the bank. Comments will often range from , "I haven’t lost anything because I have everything in cash, cd's or bonds so I have been able to make some money on my own." Surprisingly, these remarks are not coming just from elderly people,who have the tendency to be very risk adverse with their money, but also from people in their 30’s through 60’s.
Have you really not lost any money?? I say you have. And have you made any money? Probably not! Let me explain. This is really important for you to understand and speak to a financial advisor who can help you based on your financial goals and needs. Doing this will make sure your assets including insurance assets are working the way they should to assure you can meet all of your financial obligations, both short and long term.
This is a concept that the money you have now is worth more than the identical sum in the future due to its potential earning capacity. A dollar promised in the future is actually worth less than a dollar today because of inflation. An example: Let's look at the cost of your first car. Let's say the purchase price brand new was $15,000.00. But you decided to hold on to that $15,000.00 for a few years and then purchase the car. That car no longer costs $15,000.00 but now it is $16,000.00. The cost of inflation has eaten up the original value of that dollar. so you cannot get as much now with $15,000.00 as a few years earlier.
This same concept holds true for anything you need that has a price attached to it. The cost of goods and services. Studies have shown that the cost of healthcare outpaces the inflation (3-4%) rate every year. Those of you that rely on your investment income to help you cover the cost of heath care need to be acutely aware of this, or you will be falling behind every year. If your investments are not earning even the inflation amount then you are not earning any money. Inflation is eating it up. Depending on if the investments are taxable, you now have to pay taxes on the earnings. If you have investments on low interest baring accounts like cd's bonds, money markets, you may find that after paying taxes and inflation you may be getting a negative return. The goal is to always have your money working in the correct investment and allocations. This is based on your risk tolerance, time frame for needing the money, and purpose or goal for the money for any of your life financial needs so that you can manage your expenses accordingly.
Now that I am helping you secure financial resources to help you stay on your treatment plan, personal investment accounts are one of the most flexible resources that can boost your bottom line, generate additional income and in some instances be more tax efficient.
Unfortunately, a large percentage of people do not even open their statements to review their accounts afraid of what they will see. On the other hand, if you were working with an advisor and you have established a plan specific to your needs this will not give you pause. All contingencies would have been considered in your plan. Even poor economic or political environments will not derail your financial plan.
Financial Advisors/Planners can help you make the best informed decisions. Never have I ever had anyone say they felt they could have done a better job on their own after finding out what a financial advisor can do for and with them. If you do not have anyone you work with now, I encourage you to find someone. Many advisors are well versed on the ever increasing cost of healthcare and insurances and are able to help you take control of your finances. A better way to help you manage all of your expenses including healthcare cost is possible.
If you have any questions about how to find an advisor near you, please contact me on the Myeloma Coach website.
Diahanna Vallentine, BCPA
about the author
Diahanna is the Financial Program Manager for the HealthTree Foundation, specializing in financial help for multiple myeloma and AML patients. As a professional financial consultant and former caregiver of her husband who was diagnosed with multiple myeloma, Diahanna perfectly understands the financial issues facing myeloma patients.