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Baby Boomers, Business Owners and Real Estate Investors - Different Stresses, Different Solutions

Baby Boomers, Business Owners and Real Estate Investors - Different Stresses, Different Solutions

January 12, 2023

FOREWARD - Thursday, January 12, 2023

It appears that the tide of market momentum is coming back to the positive.  Today, CPI numbers were as expected.  The market reacted positively to the news and is a welcomed change as of late.  

The question often asked after experiencing market storms as we recently have is, "is it safe to come out of the harbor?"  That of course is for those who have much of their money deposited for safe keeping at their local bank or credit union.  There are those who have committed a portion or all of their money to the market, either out of necessity or who have dealt with such storms in the past, and are more confident than others, especially if they have a financial advisor as the "ship's captain."

Ok boomer...... Now that I got that out of the way!  While the next two articles discuss baby boomers, you can shift some gold from these two snippets as the sooner you deal with the issues the better off you will be.  Nip it in the bud, be proactive, not reactive.  Learn from others, you don't need to experience the stress boomers do in their golden years.  Deal with it now! 


A recent Forbes article dealt with the issue of baby boomers putting their retirement at risk due to being heavily invested in stocks.  Fidelity investments stated that half the boomers have their 401(k) invested in riskier allocations than recommended for their age group.  In addition to that, they state that due to a market downturn, they could lose a significant chunk of what they worked so hard to save.  Fidelity further points out that 8% of all boomer investors have their 401(k) invested in completely in stocks.  

I believe one of the key issues is lack of direction, information and education.  In many instances the company sponsored 401(k) advisor is either not available or is and the respective employees choose the "do it yourself" allocation model.  The challenge is, for many, they neither have the time, experience and wisdom to make the correct allocation models based upon their risk tolerance (what risks they are willing to assume) and suitability (The right investment based upon their age, when they will need to access that money and overall investment objectives.).  

Due to the recent financial tsunami of last year, many investors 401(k)'s are under water.  They are stressed out.  They most likely are experiencing the shoulda, woulda, coulda, but didn't time of reflection.  If only I had done....  If only I would have paid attention to my instincts.  My gut told me to get out, but no, I stuck it out.  Their emotions get the best of them, they are miserable and beat themselves over the head.  They will never recover.  It's over!

Fortunately, it's not over.  Like any storm, you survey the damage.  You seek advice from an expert (financial advisor) and ask, what can I do to recover, to rebuild, and have a meaningful retirement?  A plan is created based upon the survey of the damage, what your financial and retirement goals are, and then review the recommendations to rebuild your portfolio.  After reviewing, you commit to the plan and implement it.  It's a process, and at the end of it, you should be confident that you are in a better position now than you were before.  Understand that adjustments can and will be made as time progresses, due to economic and financial cycles, as well as changes to your financial and retirement goals.  It's about being informed, educated and receiving direction from an expert (financial advisor).


The "Great Wealth Transfer" is stressing out boomer benefactors.  A recent study indicated that over two-thirds (70%) of high-net-worth investors are concerned about their heirs “using their inheritance wisely,” according to new research and a survey of 4,500 high-net-worth investors–individuals with more than $1 million in liquid assets.  About three-fourths (76%) of those surveyed indentified "the smooth transfer of assets" as one of their key financial worries.  Meanwhile 70% said that they are concerned about passing money to heirs in the most "tax optimized way" possible.

I discussed this in my previous blog post on "Leaving a Legacy".  It provides you with some initial issues to consider and how to deal with handing down wealth to your heirs.  Preparation, discussing the subject with your team of advisors (financial, tax, estate) will lead to the implementation of a plan that will provide welcomed relief and peace of mind.  It's all about that meaningful life that is the goal of most individuals and families.


A majority of my clients are either business owners or individuals who have made the bulk of their income from real estate.  As a business owner myself for 29 years, I consider myself an expert in that department.  I have found that we all basically share the same challenges.   If you aren't a business owner, or real estate investor, you might find this information interesting and also perhaps you face the same challenges as well.

Cash Flow and Cash Reserves - When anyone starts a business, unless they were raised up as a child with business owner parents, you really don't get the importance of cash flow until you are "thrown into the fire."  Cash flow is the amount of money going in and out of your business.  You need to pay close attention to it.  Monitoring it will help you pinpoint problems before they get too big to handle.   It's extremely important to have cash reserves as well.  How does one determine it? Much like an emergency fund, you should have off to the side, three to six months worth of expenses.  An excellent, yet unfortunate example today would be real estate agents and mortgage reps.  They had some phenomenal years of explosive income.  The challenge for many is, like that the old saying, "the more you make, the more you spend" comes to haunting them if they did not have that cash reserve fund off to the side.  They find themselves frantically figuring out how to make ends meet.  Perhaps they start selling their investments, incurring capital gains to pay bills.  Worst yet, perhaps they start taking early distributions before age 59 1/2 to pay their bills.  Challenge is, they will incur a 10% IRS penalty for early withdrawal and also are taxed on distributions at their tax rate as income. 

Taxes - Payroll, your keeping up with tax and payroll regulations, let alone being sure to pay your quarterlies in a timely manner.  Don't wait until the end of the year, and then file an extension to be able to buy yourself some breathing room.  Identify the challenges you are facing and deal with them.  Hire a competent tax advisor.  I know I do and value their service and advice.  If you own a business, my advice would be don't be a do-it yourselfer.  Pay the money to get expert advice.  Use the time you save by allocating it to other areas of your business that need your attention rather than spending so much time on your taxes.

Time Management / Productivity - I remember a mentor of mine saying that Seneca, the Roman Philosopher was quoted as saying, "If you don't know where you want to go, any road will do."  As business owners and real estate investors, we need to be laser focused on time management and productivity.  We need to have a system, otherwise you will taking many detours on roads that you should not have taken, due to distraction, a "shiny new object" that captures your attention, or the perennial favorite - monkey brain syndrome.

Like the woman above, you can be distracted by numerous things throughout your day.  I thought I would share some of the strategies that have helped me to remain focused and manage my time and productivity very well.  In the evening, I plan for the next day.  I have a one-page productivity planner.  I like one page documents.  They help me keep focused as well!  The layout of the single page is as follows:  The top section has three areas, call for today, appointments for today and operations (paperwork, emails, information request, research, marketing).  The middle section is dedicated to emergent tasks.  Tasks that arise during my day in which I need to address and take care of.  Perhaps a client calls in and has a specific request that has to be completed today on their behalf.  The bottom portion of the page is dedicated to notes that I write to remind me, or perhaps something that comes to mind while doing the "work" and I can forward that to my task list at the end of the day.  You might ask, well, what productivity/time management software do you use?  I use Evernote.  It is a great tool that assists me in managing not only my tasks, but information that I can upload into specific files for later retrieval.  I also use an in-house (CRM) tool provided to me by Avantax Wealth Management.  It provides me a place to see my clients accounts, notes, and contact information.  Basic, to the point, no frills.

Growing Your Business - This can be one of three scenarios for the typical business owner.  They are in survival mode, growth mode, or thrive mode.  What separates the three many times is that thing between their ears, their mind.  Mindset is essential if you are running a business or as a real estate investor.  You can't allow your emotions to get involved in your decision making.  You are the leader and you must be decisive if you want to really succeed in business.  You have to be as Ray Dalio says, operate in radical reality, based upon radical truth and radical transparency.  I want to emphasize the word radical, as it is only then, that you can be real with yourself, observe the challenges you are facing and creating solutions to overcome them.  Procrastinating doesn't work.  Look, I tried it, and it's a dead end.  Coming back to it later only allows it to fester and become an even bigger challenge.  You'll notice I use the word challenge instead of problem.  Yes, it's semantics, but the reason I do is that challenges can be overcome, problems many times seem overwhelming.  In order to grow your business, you need to be a radical in being real with what you enjoy about your business, who you work best with, knowing your strengths and your weaknesses.  Continue to refine those strengths, like working out, you get stronger.  Those weaknesses, acknowledge them, work on them, or realize that the segment of business just isn't your "cup of tea".  As time goes on, you gain invaluable experience, which turns into wisdom.  Wisdom that you can use to assist your clients in providing them a valued service or product and whom they walk away telling others about their experiences.  Those wow moments!

Taking Time Off to Reenergize - I believe all business owners will confess that there is never a good time to take off to go on vacation or get away from the office.  Yet, it is essential that you do so, otherwise you subject yourself to burnout, which is never good.  I remember I attended a top producer meeting some time ago.  Here I was, in a room full of my top producer peers.  The objective of the meeting was for all of us to share what we attributed our success. What things I imagined I could learn!  I was thinking, perhaps someone will share some time management tips.  Perhaps someone will talk about their marketing efforts and how they just really "tore the cover off the ball" with their recent marketing campaign.  Well, it didn't quite work out that way.  The most valuable thing that many of my colleagues shared was that you have to take time to reenergize.  Take vacations, allocate for yourself - me time.  Otherwise you'll end up feeling like a cog in a machine, droning away and feeling like a hamster who cannot get off the wheel.  I took that advice and have continued to make sure I do just that.  I don't want you to think that it is easy, but it is planned and an essential part of my life and practice.  I want to continue another 15 to 20 years, so I better do it!