Kevin's articles

Personal budgeting. Why such a big deal when I have a new client or even somebody just slightly new and have a conversation with them about how they go about budgeting. It's amazing how consistent the issue is a problem. I often ask how much a client's discretionary income is in their budget, and I get a blank stare often. Either they don't have any idea, or they think they may have 10 or 15%. So, what is discretionary income? It is the amount of an individual's income that is left for spending, investing, or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing. Most of the time when I am with a client and we actually go through their budget, it's not even close to what it truly is, at all. Sometimes they don't even know what I mean by discretionary income. Hard to believe, but true. This brings us to discuss priorities in budgeting. People really don't know how to differentiate between what they need to have in their budget and what they don't, such as, fixed and variable expenses. It all boils down to those things that you must have and the things that you want to have. Oftentimes people really get those two things confused. Once they start breaking those apart. the discretionary part of their budget becomes a place that they can manage and help to put together the priorities that are necessary to be able to achieve their short-term goals and their long-term goals. Even breaking those goals apart can be a problem for a lot of people in the sense that they don't really want to take the time to do that. Once they have a budget written out, and it's broken out into fixed, variable, and discretionary expenses, they then have the power to make decisions on what they're spending. Oftentimes in retrospect, they look at how they spent their money and wonder why they're putting so much into things that aren't really that important to them or even supporting them in a healthy way. If they want to build a budget that includes personal long-term security, in other words, retirement planning, and having enough to be able to retire at a certain point in their life, they need to look at the priority on how they're spending money and create a pay my for myself first' attitude in their budgeting. I always emphasize to my clients always that their long-term security or their retirement savings should be the first item in their budget, oftentimes preceding fixed income, expenses, like shelter, food and clothing and absoluteness other necessities. When my clients take the time to really start to put thought and energy into their budgeting, they find that they have control and power over the outcomes of their budgets. The sad fact is that almost half of Americans reaching age 65 have saved less than $25,000 for retirement security and it is absolutely appalling and scary. The importance of budgeting can't be second guessed, and it really needs to be a part of financial review. My clients know I am always here to help build a secure budget.

_{Kevin Shreve offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN). Investment advisory products and services offered through Equitable Advisors, LLC, an SEC-registered investment advisor. insurance products offered through Equitable Network, LLC. Equitable Network conducts business in CA as Equitable Network Insurance Agency of California, LLC, in UT as Equitable Network Insurance Agency of Utah, LLC, in PR as Equitable Network of Puerto Rico, Inc. Financial Designs Wealth Strategies is not owned or operated by Equitable Advisors or Equitable Network. This informational and educational content does not offer or constitute financial, insurance, investment, legal, or tax advice. Your unique needs, goals and circumstances require and deserve the individualized attention of your own financial, legal, tax and other professionals. AGE- 5620202.1(4/23) (Exp.4/25)}

The secret sauce to retirement security. A lot of people don't know the basic concept that moves their possibility of success and creating retirement security is, basically, if you don't start, you'll never accumulate a savings account. The first concept of creating a retirement concept of paying yourself first. It may seem unreasonable or difficult to pay yourself first when you are faced with material financial obligations. Yet, it is critical to pay all your bills on time, planning for your retirement and future can not be thrown on the backburner. In other words, before you do any other spending you are putting money away prioritizing your long-term financial wellbeing. This really hinges on the fact that it removes the temptation to skip a contribution and spend the funds on expenses other than savings. The sooner you start saving and paying yourself first, the more power you will hold in building up those assets to levels to where you will be able to retire comfortably.

It's been said that the magic of compound interest put to work for you for many years, will put true power into your savings and accumulation of enough assets to be able to be secure in your retirement. I use a compounding interest example of a 21-year-old who started saving $2,000 a year for seven years, then stops. Another saver starts at age 28 and saves $2,000 a year and then continues until age 65. If you compare the results of the two by using the same annualized rate of return, you'll find that the 21-year-old has more assets or has as much or more assets as the 28-year-old, even though the 28-year-old has saved four or five times more in total actual savings. Hence, the true power of compound interest doing its job. This is all because compound interest includes interest accumulated in previous periods, it grows at an ever-accelerating rate.

Another aspect of the sauce is savings versus loaning versus owning which is another concept a lot of people have never been made aware of. If you're saving at a bank, you'll get a nominal interest rate. That won't even come close to the inflation rate. If you're loaning money depending on whether it's highly safe government bonds or slightly more, slightly more aggressive loaning to corporations (corporate bonds) in the United States, your returns will become more closely related to inflation. Therefore, at least replacing your buying power of your dollars as you save. However, if you participate in the United States business world by owning high quality dividend paying stocks, and even better a diversified portfolio of those plus other stocks, your returns will more likely over time be able to equal or be better than the inflation rate. This has proven over the years especially if you do not let the ups and the downs of the market cause you to make emotional decisions due to the fear of the downside markets. All these combined can allow you to develop and accumulate assets that will replace all your income and help assist by the time you're ready to retire. Especially, if you've started early enough, save consistently enough, and save and invest wisely. This is where investing on emotion comes into play. Investing based on emotion (greed or fear) is the main reason why so many people are buying at market tops and selling at market bottoms.

Remember pay yourself first and leave your emotions out of your investments. Do not make others financial incompetence your retirement problem. Enjoy the secret sauce and Goodluck.

This article is provided for general educational purposes. It should not be should not be construed or relied upon as investment, tax or legal advice. Equitable Advisors and its affiliates do not provide tax or legal advice or services. Past investment or market performance is no indication or guarantee of future results. It is not possible to invest directly in an index. Investments in stocks, bonds and mutual funds are not FDIC-insured and are subject to fluctuation in value and market risk, including loss of principal.

_{Securities offered through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA/SIPC (Equitable Financial Advisors in MI & TN). Investment advisory products and services offered through Equitable Advisors, LLC, an SEC registered investment advisor. Annuity and insurance products offered through Equitable Network, LLC, which conducts business in CA as Equitable Network Insurance Agency of California, LLC, in UT as Equitable Network Insurance Agency of Utah, LLC, in PR as Equitable Network of Puerto Rico, Inc. The information in this article is not investment or securities advice and does not constitute an offer. Financial Designs Wealth Strategies is not a registered investment advisor and is not owned or operated by Equitable Advisors or Equitable Network.}

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 _{individualized attention of your own financial, legal, tax and other professionals. AGE- 5620202.1(4/23) (Exp.4/25)}

In finance there are a plethora of different titles and designations professionals can obtain and have. Here, the goal is to break it down simply. Many people think of the well-known CFA, CLU, ChFc, and CFP designations but with over 100 different designations, it can get hairy. The list can go on and on and on but through this we want to simply break it down and point out key differences. Your financial goals will help you determine which professional is right for you.

The way I see it - it can be broken into three categories: Financial Professional, Financial Advisor, Financial Planner. What makes a financial professional does not necessarily make a financial planner. They can all share similarities but are ultimately very different in their own respective ways due to the registrations and licenses they each hold.

Financial Planner & Financial Advisor: Every financial planner is a type of financial advisor, but not every financial advisor is considered a financial planner. There are more than 100 certifications and registrations that a financial advisor might attain. A financial planner is a professional who helps individuals, families, and organizations identify and map out long-term financial goals. These goals may be, but are not limited to planning for retirement, building a college fund, financing a home, etc. The most important standard with a financial planner is that they are always required and held liable to upholding a fiduciary responsibility to their client. They also provide comprehensive financial plans for a set fee vs a commission on a particular product sold.

Financial advisors, as well as financial planners, are required to pass the FINRA Series 65 exam to cement their place in working with the public. A financial advisor is a term for someone who helps you manage your finances. It can be an even broader term for somebody who is involved in money management or financial products. They may, for instance, provide life insurance or real estate strategies. The two overlap but truly differ in the aspects of upholding fiduciary duties.

Financial Professionals: Financial professionals are sometimes referred to as a financial consultant where they are educated on a variety of money topics from life insurance to investments. These individuals often recommend products and services based on customers' needs and are commissions based.

The key differences of the three can be explained through certifications and scope of work they perform. Advisors and planners can be more intertwined and commonly confused because they provide both broad and general guidance as well as comprehensive planning. A financial planner is usually a Certified Financial Planner® professional and has met the rigorous education and training to serve their clients' best interests. A Financial Advisor has the registrations and licenses to provide advice to clients on holistic planning – making investment suggestions or insurance analysis.

It has been my experience over the years helping clients that there are some things that concern me.

• I see clients that were not communicating and meeting with their advisor to discuss their concerns and their situation.
  
• I see clients that didn't update their risk tolerance as life changed, putting their retirement at risk.
  
• I see many advisors that merely talk about market, not about the individual client's situation.

For these reasons, if there anyone that you care about who you think could benefit from a fresh perspective. I would be glad to help them.

Kevin W Shreve, CLU, ChFC

_{Kevin Shreve offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN). Investment advisory products and services offered through Equitable Advisors, LLC, an SEC-registered investment advisor. insurance products offered through Equitable Network, LLC. Equitable Network conducts business in CA as Equitable Network Insurance Agency of California, LLC, in UT as Equitable Network Insurance Agency of Utah, LLC, in PR as Equitable Network of Puerto Rico, Inc.. Financial Designs Wealth Strategies is not owned or operated by Equitable Advisors or Equitable NetworkThis informational and educational content does not offer or constitute financial, insurance, investment, legal, or tax advice. Your unique needs, goals and circumstances require and deserve the individualized attention of your own financial, legal, tax and other professionals. AGE- 5431094.1(2/23)(Exp.2/25)}