Little did I know when I posted my last blog in February that I would be weathering a financial COVID storm. As I began tax season, I did not know how life would turn upside down in the coming months. So much as has changed, including a tax season that never seemed to end. My boy’s education went online as well as his scouting and Taekwondo activities. Church and my fun activities have gone virtual as well. Zooming became the norm for meeting with folks in professional and personal circumstances.
Despite the wild changes of life, like shortages of toilet paper, one thing continued to work for me through the pandemic. That is the financial planning philosophy I share as a member of the Alliance of Comprehensive Planners (ACP). My own use of processes and philosophy in my personal life leveled out the financial bumps. Ultimately it provides more much more security and peace of mind than a large stash of toilet paper.
Weathering the Storm with ACP
The stock market has had some wild swings as the virus effected the economy and our ways of life. Through the conservative ACP planning approach, I use, I have had quite stable personal finances as have my clients. I have had very few calls from clients about the market. More importantly, during meetings my clients have been pleasantly surprised when the saw their net worth was better than they thought.
While we have no idea, what the future will hold. The ACP philosophy and system that I began following a decade ago has proven itself to me. The system that started in the 1970s has survived and thrived through every economic cycle ever since. Through the tech bubble, the great recession, and several more financial and otherwise chaotic times.
ACP System
Fundamental to the ACP System are emergency funds and adequate cash to financially weather rough periods like the COVID storm. With these safeguards in place, it is easy to have financial peace of mind. That is to not worry about the fluctuations of the financial markets. The emergency funds are designed cover mortgage and other needs during financial storms or times without employment or adequate income. Knowing where funds will come from to weather the dire times gives me peace of mind. The peace of mind to leave investments alone and ride out the storm. For me, it means, I don’t have a fear reaction and head for the hills after cashing my investments. Historically I will do better both financial and mentally.
The system is predicated on a foundation of living within ones means and having a regular practice of saving. The Pyramid used in the ACP system help folks prepare for times of inflation, deflation, and prosperity by allocating resources between Interest Earning, Real Estate, and Equities. This further helps prepare for the ebbs and flows of the economic cycle that are outside the control of the individual. Thus, reducing the likelihood of becoming an economic victim. While there are no guarantees, this system has weathered 40 or so years of economic cycles.
Living Within My Means
In order to help and discipline myself to live within my means, I use the budgeting software You Need A Budget also known as YNAB. I have been using YNAB for just over year. (Note: I pay for the service and receive no compensation as result of my comments.) After having gotten through the initial learning curve, I have been able to observe were I was spending and how much I was spending. Armed with this data I made changes to my spending and saving habits. Thus, I could make adjustments that helped me weather the current financial storm.
During the early months of 2020 like many others I was not venturing out much except for essential trips to the grocery store and my office. Life was shut down or moved to virtual platforms and as a result my spending decreased dramatically far less than pre-pandemic. As result, I have been able to review with even more clarity what is truly a need vs. a want of my lifestyle. What new clothes do I really need? How can I continue to make and eat wholesome food?
With more hours at home, I chose to start a new hobby of cooking outside. While many folks have gas grills, I did not. I do now as I could afford with the budget review to purchase one. I also started near weekly cooking with an old fashion cast iron Dutch oven using charcoal. These have added to the quality of my life during challenging times. They are not “rocket science” rather just doing a new thing that add variety and expand my mind as I think through new food projects. It gives me more variety in my eating and options if the power goes out. It is likely that I wouldn’t have started this new hobby without the pandemic and my financial refocus.
Thanks ACP
Living within my means during this financially stormy weather time has given me freedoms to try new things that bring joy and variety to my life. Despite the challenges surrounding living in COVID 19 times, I have been able to add to quality of my life. I thank ACP and the system it has taught me. I enjoy the financial peace of mind I earned by using the ACP system in my life. A peace greater than any stash of toilet paper could provide.
Until next time.
Rorik, thanks for this view of how your professional values and beliefs support your own serenity of mind in challenging times. How great, for your clients to realize that you walk your talk, and for you to find new pursuits that give you even greater skills to help you through unexpected challenges. I’m always proud to call you a colleague.
Ken, Thank for your kind comments. They are truly appreciated. Rorik