In today’s Office Hours, Eric answers Olivia’s question: “What advice would you give today that you wouldn’t have expected to 10 years ago?”
The advice does change over time, but with 30 years of experience as a financial advisor, it’s clear that some of the basic fundamentals don’t: paying yourself first and avoiding adverse debt. But economic conditions and products do change and there are things that we wouldn’t have recommended a decade or even 5 years ago.
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Eric Brotman [00:00:03]:
Welcome to Don’t Retire Graduate. The podcast that asks you what you wanna be when you grow up so you can graduate into retirement with purpose and passion. I’m your host in valedictorian, Eric Brotman. Welcome to office hours where we answer listeners questions about personal finance, retirement readiness, and more. We received a question from Olivia, who asked, what advice would you give someone today that you wouldn’t have expected to 5 or 10 years ago. Olivia First, thanks for recognizing that I’m not new at this. this is now my 30th year in the business. So, 5 or 10 years ago, not a problem. the reality is that advice does change over time in certain ways, but in other ways, the basics never change. So all the kinds of things that we talk about about paying yourself 1st and avoiding adverse debt and Some of the the fundamentals never change. But what does change is economic conditions, market conditions, and even product innovation And so it is real important to to navigate that. And so there’s plenty of things that I might suggest to someone today that I wouldn’t have 5 or 10 years ago. For example, For many years, I was, a not a believer whatsoever in a total bond fund. And what I mean by that is a mutual funder exchange traded fund that owned bonds of lots of different durations always made me nervous. It always felt like, the the kind of place where you would be you would be punished essentially for someone else’s bad behavior because people would sell out of that fund when interest rates moved and it would work against you. And so I wanted to keep fixed income incredibly short. Well, over the last 30 to 40 years, interest rates did nothing but drop from the eighties until about 18 months ago. And so the advice we were rendering made perfect sense for 40 years. But if unless you’ve been living under Iraq, you know that interest rates and inflation and all of these things have spiked over the last year, year and a half, And so it has changed the landscape for fixed income. And it means that suddenly things like don’t hold excess cash, which we might have rendered 5 or 10 years ago because cash was paying 0. Well, that’s changed. Now cash is an asset class again. It might make sense to hold some percentage of your portfolio or your wealth in cash or cash instruments, whether it’s whether it’s a savings account or a money market, or a certificate or deposit or a short term bond, some of that makes sense. But the fixed income side has changed a lot also. It absolutely makes sense Now that interest rates have gotten so much higher, it makes sense to lock in some of those interest rates for a longer period of time. And so it’s been basically my entire career that has not been an option, and now it is. So we have to rethink and reconsider those kinds of things when conditions change. Other things that that I might have, poo poo a couple of years ago that now I might not reverse mortgages. Reverse mortgages were something when they first came out. They were so expensive and so cumbersome and so difficult. that I thought they were absolutely horrendous. And yet now I see them as a viable tool in the right circumstance, And so we’ll advise folks to at least explore that as an option as a way to untap equity in their homes, especially since people are living so much longer. you know, 5, 10 years ago, I might have thought that it made sense to grab social security a little earlier simply because we were also afraid security wasn’t going to exist. And while I’m still not positive that that we were gonna legislate our way out of the mess, I also now realize that longevity is such a significant issue that in most cases, unless your health is compromised, it makes sense to wait longer to claim. So these are just a couple examples, and and I I’m sure there are 100 more, but it’s one of the reasons why it’s important for for financial advisors to keep our skills up to date to keep our continuing education and to make sure we’re still learning and also to be open minded because the things that fell like gospel years ago, aren’t necessarily true today. And it’s important that not only you as a consumer, but we as advisors also understand that. So Olivia, thanks for the question. I I it was fun to think about some of the the different ways in which, advice has changed over the years, and and I hope I’ve shed a little light on that for you. If you’d like to send us a question which we might answer in a future episode of office hours, posted on our Facebook page, or tweet us at Brotman Planning. I’d like to thank all of you for listening today. We’d love to hear from you. So please send us a message or leave comments at don’t retiregraduate.com or on social media and leave ratings or reviews on your favorite podcast platform, those are priceless to us. If you enjoy the show, please don’t keep us a secret. Share it with your friends and family, so they can join you on your journey to financial freedom. I thank you for coming to office hours. Be sure to tune in for new content every Thursday. For now, this is your host, Eric Brotman reminding you, don’t retire, graduate.
Voiceover [00:05:15]:
Securities offered through Kestra Investment Services, LLC, Kestra IS, Member, Finra, SIPC, Investment Advisory Services offered through Kestra Advisory Services, LLC, Kestra AS, and affiliate of Kestra IS, Kestra or Kestra AS are not affiliated with Brotman Financial or any other entity discussed.
