Blog | Castlerock Financial Planning | Mendota Heights, MN 55118

How to Choose a Financial Planner

February 15, 2018 By Lauri Salverda, CFA, CFP®, AIF®

The search for a good financial planner should be exactly that: a search. This is a person who is going to get to know a lot about you, so don’t just pick the first one your search engine kicks back.

First, take some time to identify between three and five people you want to interview. Before someone makes your short list, be sure they are a certified financial planner. How do you know? In their biography or on their website, look for CFP® following their name. For no cost, you can visit www.napfa.org or www.letsmakeaplan.org to find qualified planners.

CFP® professionals, when providing financial planning, are required to act as fiduciaries as a condition of their certification. Why does that matter? Simply put, it means they’re bound to put your interests first when offering advice. And only those with certain certifications are required to do this!

What to Ask a Financial Planner

After you’ve got your list of qualified (on paper) candidates, it’s interview time. Make a list of questions and bring some notes about yourself. Do you know what you’re looking for in a financial planner? “I’ll know it when I see it” isn’t very helpful, so be concrete and think about your values and your situation. Do you want someone experienced with locally-based investments? Someone who shares your values around philanthropy? Someone who works with a lot of single parents?

As you sit down with each planner for an interview, look up from your notes long enough to check that the individual is really listening to you. Are they multitasking? Or are they focused on you, and even taking notes themselves? Second, how does the conversation make you feel? Are you instantly comfortable, trusting and excited about working with this person? If there’s no rapport, you should keep looking.

As you’re keeping tabs on those less concrete aspects of the interview, you can run through the 10 questions to ask provided by letsmakeaplan.org. For example, ask about their experience, qualifications, services, costs, and how the office runs their client relationships. Take notes, take the answers away and consider if they match what you’re looking for. With solid information about each person you’ve interviewed, choosing the right planner should happen almost automatically.

What You’ll Learn About Lauri

We look forward to a productive conversation with all potential clients, where we can get to know one another better. Here’s a brief sneak peek into what you’ll learn about how Lauri operates as a CFP®:

- She knows her clients personally. Lauri will get to know your likes, fears, comfort level with financial conversations, values, goals, and how your needs are changing over time. This way, when you call her with an issue, she hones her advice to what’s most important to you.
- She educates her clients. Lauri believes you should feel empowered to make your own decisions, not be told what to do. For example, if an advisor recommends you roll your 401k into an annuity, you should understand why, on top of knowing the other options.
- She understands that all areas of a client’s life are interrelated. Your values influence who you are and what you need. For example,
  - If a person is philanthropic, giving is important to them. How does this impact their retirement goals?
  - If a family has an active lifestyle that includes boats, trampolines, and other recreational items, their insurance coverage should reflect that.
  - If a couple is making decisions about putting their kids through college, their values come into play. Perhaps their parents didn’t pay for college, so they value teaching their kids the discipline of working through school. How do changes in today’s rising college costs influence the reality of this?

Take your time, make your list, and come to your interviews prepared. We’ll be here when you’re ready.

Managing the Emotional Side of Finances

January 15, 2018 By Lauri Salverda, CFA, CFP®, AIF®

In our experience, one emotion new clients often bring to our first meeting is guilt. We have heard apologies from folks who think they should have made their appointment months ago, who feel they aren’t organized enough when they come in, and still others who are dwelling on past mistakes. Our first piece of advice in cases like this: acknowledge the emotions that are present, so you can manage them and move forward towards a more productive financial future.

An empowered financial future

While the title on our office door may say “financial planning”, we do more than just crunch numbers. We work with clients to replace their guilt with a sense of empowerment. Before we can make a solid go-forward plan, it’s vital that clients forgive themselves and move away from any negative emotions clouding their decision-making. It doesn’t matter what happened in the past; it can’t be changed. Instead, we help our clients learn how to focus on what can be done from this moment forward.

Easy actions make a big impact: Take Control of Your Finances

The way forward will vary some from person to person, considering individual goals, aspirations, history, current income and investments, and more. However, we have a go-to list of easy actions anyone can take to start on the right foot for the future. We can almost guarantee that after you make just a few adjustments, your feelings about your financial future will be better and brighter.

- Automatically send money to savings. You won’t miss what you can’t see. Even a small amount going into your savings account every month will add up faster than you think.
- Put pay increases towards retirement. Every time you get a raise, put that amount into your 401K. Your take-home income will look the same, and you’ll painlessly increase your retirement income. You’ll be amazed at how this small addition compounds over time.
- Be realistic about spending. If debt is weighing on you, start a new monthly check-in practice. Always pay off what you spent that month, the interest, and a little more. If you’re not doing that, you’re spending too much.
- Eliminate impulse purchases. If credit cards are causing your debt to rise, leave that card at home! If you have to make an extra trip to buy that special something not in your budget, or on your list, you’re much less likely to follow through.

Start today

If feelings of guilt, or hesitation, or uncertainty have been keeping you from your financial goals, its time to make a change. Take stock of what is preventing you from moving forward, acknowledge it and let it go! There are simple things you can start doing today that will alleviate feelings of being overwhelmed, unsure or unprepared. You can become an empowered, intentional person who is achieving goals and laying the groundwork for a bright financial future. We can help.

Holiday Gift Ideas from a Financial-Advisor Mom

December 1, 2017 By Lauri Salverda, CFA, CFP®, AIF®

No matter your religious or spiritual traditions, chances are good your family gives gifts during November and December — or gets barraged by ads talking about them. As a mom to four adult children, I’ve sometimes experienced a certain panic around finding the “right” gifts for my family, including my children, nephews, nieces, and other relatives.

In our busy society, it’s easy to default to buying gift cards or throwing last-minute toys on the pile. But as I got further into my career as a financial planner, I realized I could give gifts with a long-term impact instead. Rather than simply spending money, I wanted to go deeper and teach my kids the value of it. I realized that like many adults, young people need to be taught how to spend wisely. Delaying gratification, planning ahead, and being intentional are important values I wanted to instill in my family.

7 Holiday Gift Ideas from a Financial-Advisor Mom

If you’re feeling overwhelmed by the prospect of buying gifts this holiday season — or if you want gift ideas for any time of year — consider this list. It comes from my own playbook as a mom (who also happens to be a financial advisor).

Think about your family as you read. Is there someone you know who might benefit more from a long-term legacy than a short-term thrill? The ideas below will continue to serve the recipient long after the excitement of the holidays passes.

At some point over the years I’ve given every gift on this list with great success! Now it’s your turn.

Gift idea #1: Write a Blank Check for Charity.

Give kids a check with the “pay to the order of” blank so they can choose a charity to support. If it’s local, take them there to give the check in person. (You might consider making arrangements first with a contact there, so the connection can happen at a good time.) The trip will show your youngster what a great feeling it is to give to others. Experiences like this can create lifelong memories. Make it a tradition!

Gift idea #2: Invest in a Roth IRA.

If a young person has worked and has earned income that will receive a W-2, no matter the age or amount, put some money in a Roth IRA in their name (see minimum and maximum contribution limits). For those under 21, you can set up what’s called a custodial Roth IRA. This means you’ll manage it until the individual turns 21. Whether or not they see the value today, as the years pass they’ll thank you a million times over.

Gift idea #3: Set up a Brokerage Account.

To teach children about investing, set up a brokerage account and purchase one share of stock. Remember this isn’t about you: the company has to be one the youngster wants to watch over time. When I did this with my kids, they chose companies that matched their interests: Disney, Sony, John Deere, and Electronic Arts. Follow these steps:

Start with a product, restaurant, service — something tangible that’s caught your loved one’s attention. (Bonus: This is a great opportunity to get to know your family in a new way. The bond that can form from this shared experience may surprise you both!)
Do some research. You might have to dig to find out the parent company. Embrace the learning opportunity and do it together!
Talk about the company. Figure out why it intrigues your child, and ask: Do they think it will continue to do well? Does it need to develop new ideas, change with trends, or does it serve an ongoing need? If the company has other products, how are they doing? Give your child some homework/research they can do on the company over the internet. Maybe they can even earn another share by making a persuasive argument.

Gift idea #4. Purchase a Stock in a Dividend Reinvestment Plan.

Another option is to set up a Dividend Reinvestment Plan (DRIP) directly with your selected company. These plans can provide advantages not available when opening a brokerage account, such as buying shares without paying a commission and automatically having the dividends reinvested in additional shares of the company.

While every company’s policy is different, there are many companies that offer free plans. Others charge fees or have minimum investments. Possibilities children may recognize include General Mills, Kellogg, 3M, Polaris, Toro, Johnson & Johnson, Foot Locker, and Dr. Pepper Snapple Group.

Gift idea #5. Play the Stock-Market Game.

Sometimes experiences make the best gifts. Bring fun and learning to your family by playing the virtual stock market through an experience from Best Prep, an organization founded to teach Minnesota students business skills.

For less than $15 per team, play for your choice of three, six, or twelve months. You pick the teams: cousins, parents versus kids, random pairings, family friends, or neighbors are all fun options. It’s up to you! (Note: This gift involves more advance planning, but the effort is worth it.)

If playing for bragging rights doesn’t appeal to your family, sweeten the pot by offering a prize to the winning team. Game winners receive imaginary money, but your prize can be anything you decide. Consider a monetary gift, or — my personal favorite — a gift to a charity of their choice.

Gift idea #6. Participate in a Microlending Campaign.

It can be great fun for older kids to make a decision as to whom they would like to lend money and for which projects. An excellent site is the nonprofit Kiva. For as little as $25, anyone can make a loan to a help people around the world create opportunities for themselves, their families, and their community.

Gift idea #7. Piggy Bank Sets: Share Save Spend.

This concept was started by a local Minnesotan, Nathan Dungan. Start younger children out with an allowance and three piggy banks. Label the banks Share, Save, and Spend. Shopping for the banks themselves can be fun (and if your kids like crafts, this paint-your-own piggy bank could be a great activity to do together)! You can adapt this gift for older recipients by increasing monetary amounts and replacing the “piggy bank” with setting up checking accounts.

For inspiration and family-friendly tips about these concepts, check out Share, Save, Spend: Money + Meaning. I highly recommend the site for young people and adults who are learning to understand the importance of money and the role it plays in our lives.

Now that you’re equipped with some new concepts to inspire your holiday giving, give one a try! Whether you use these “out of the box” or as starting point for your own ideas, you’re on track to give your loved ones the gift of deeper financial capability. I’m a firm believer that it’s never a bad idea to combine education with generosity.

As you decide what gifts you give this winter, I wish you and yours all the happiness that the holiday season has to offer. Happy gifting! Contact us >

Do You Know What a Fiduciary Is?

November 10, 2017 By Lauri Salverda, CFA, CFP®, AIF®

If you know what a fiduciary is, you’re in the minority of Americans. In April of 2016, entrepreneur and life coach Tony Robbins stood on a Manhattan street and interviewed passersby, finding that the only respondent who could define the word was a fiduciary. Although it’s not a prayer, it is, as one respondent guessed, “something awesome”.

Obviously, there are a lot of questions on the topic that need answering.

So, what is a fiduciary?

A fiduciary is a financial advisor who is required by law to put the client’s interests ahead of their own, and to disclose any possible conflicts of interest.

Don’t all financial advisors put client interests first?

Unfortunately, this is not the case. The majority of financial advisors are held to a suitability standard. Meaning, these advisors need only suggest items that are suitable for your objectives, income level and age. Suitable doesn’t always mean best. Additionally, they do not need to disclose any conflicts of interest.

Is disclosing a conflict of interest that important?

It really is. According to a recent article by Bloomberg, there are half a million brokers who earn commissions if they can convince you to buy an expensive alternative to the thriftier, better-performing investment options on the market. That’s more than ten times the number of advisors who adhere to a fiduciary standard.

Government research estimates that consumers lost $17 billion a year to conflicted advice in the recommendations made by brokers and sales agents posing as advisors related to retirement plans. This, to put it bluntly, helps explain why so many Wall Street brokers are insulted if their annual bonus is in the low seven figures.

Why is working with a fiduciary so important?

Let’s put it in perspective:

Say you’re looking for a restaurant for dinner tonight. You want a place that’s not too far away, and is open on a Thursday night. A quick online search will turn up a whole host of “suitable” options. But how will you know which one is going to best cater to your customer experience? Do you take the top “sponsored” result on your search? Or do you turn to outside resources, like Yelp, where feedback is based on the diner experience, not sponsored by their marketing department? More than that, you probably confirm multiple sources — asking your foodie friend for a recommendation, and checking the restaurant’s rating on Google, too. You don’t trust a single biased source for dinner, and you certainly shouldn’t trust an advisor who has motives other than your best interests in mind.

How do I find out if my financial advisory is a fiduciary?

Just ask! If you are currently working with or looking for a new financial advisor, simply ask, “Are you acting as a fiduciary at all times? Will you sign an oath stating that you will always put my interest above all others?” They’re obligated to answer, and if they can’t, or won’t, be prepared to find someone who can, and will.

Remember, at Castle Rock, your interests always come first.

The Financial Nomad: Conserving Your Retirement Money by Becoming an Expat

October 13, 2017 By Guest Blogger

This post is by guest blogger Victoria Thompson, a U.S. expat who is excited to share her experience abroad in Argentina with others exploring the idea of living abroad.

In the wake of healthcare law changes, inflated premiums and rising housing costs, life in the United States can be a struggle. But if you’ve the free time and flexibility retirement affords, you might want to consider a move to another country — not only to save money, but for the adventure of a lifetime.

“But I can’t do that, I’ve got pets, grandchildren, responsibilities, health problems,” you protest.

I assure you, you can.

In the wake of a divorce in my 50s, the Great Recession, my son leaving for college, getting laid off, and massive changes to my professional industry (print publishing), my life resembled the spin-cycle of an overloaded Maytag. When my house had to be sold as part of a divorce agreement, I shouted to the universe, “You want to see change? I’ll show you some change!” I did what I felt was the only sensible thing: I moved to Buenos Aires.

“Madness!” you may think — but it was a calculated madness. The U.S. dollar was worth four times the value of the Argentine peso. My Minnesota winter was an Argentine spring. So, into a storage unit went the accumulation of 20 years of married life stuff, and onto a plane I stepped. I spoke no Spanish, but I had lots of free time, no responsibilities, and a cache of cash from selling the house. I’d planned on staying six months, with the option of a longer stay if I found the city agreeable and Buenos Aires would have me. The recession would be almost over by then, right?

If the idea of packing it all in and departing to lands unknown is appealing to you, here’s some hard-earned wisdom I’d like to impart:

Preparation

Research the countries that interest you, taking into consideration favorable exchange rates and quality medical care. A good site to begin reading is internationalliving.com. Many sites have discussion groups where you can ask question of expats already living there, and their assistance is invaluable. I used BAexpats.com a little before I left (and a lot when I arrived). I got help on everything from how to activate a Spanish-language cellphone to what bars showed American football. I used it to get invited to parties and to invite others to mine, and make a lot of new friends in the process.

Finding a Place to Live

You can arrange an apartment or house to rent online, but I wouldn’t recommend it. One needs to learn the neighborhoods, or “barrios” as it was for me. Photos are well and good, but sometimes don’t match up to the real life experience. It’s also good to meet your landlord so you know what kind of service you’ll receive. Airbnb or Vacation Rental by Owner are good options for a short-term stay while you hunt for a residence. In some countries where corruption is the norm, it’s helpful to bring an interpreter or friend with you as you visit rental agencies. I brought an Argentine friend to help me when looking for apartments. After we walked out of one agent’s office, she told me he bragged to his assistant (in Spanish) that he was planning to scam both the homeowner (and me) by skimming money off the top. He’d forgotten that my friend was Argentine.

It’s also helpful to know cultural and societal norms. In Argentina, to rent a dwelling for a year you need to pay a year in advance in cash, and have a citizen vouch for you to get a lease. Otherwise, you’ll pay tourist rates. I paid tourist rates. I found my home on Vacation Rental by Owners and because I was staying for six months, negotiated a lower rent. Educate yourself on how to negotiate a long-term rental. Once again, expat websites are your new best friend. Another option is renting a room in an established household. I have a friend who teaches English all over the world and she prefers to live in other people’s homes for the company. She’s become close to several families this way and still keeps in touch. You’ll learn more about the culture living in someone’s home, and it’s often much less expensive.

Medical Insurance

It’s important to understand the options for healthcare in the country you choose. In my case, the BAexpats site was very helpful as a research tool for choosing a health insurance company. For $100 a month, I purchased a comprehensive plan with no deductible and no copays. During my stay I needed a root canal and a crown, and it paid for those as well. I also had a full physical. As an American, the reasonable cost astounded me.

Social Connections

I made friends with my hairdresser, the guys who owned the cafe across the street, the two Argentine guys who owned the local expat bar, and the man who fixed my laptop, as well as friends and acquaintances from BAexpats. I went to a fabulous New Year’s Eve party at the former Russian Embassy, attended several “pop up” dinners, danced tango and hosted Thanksgiving dinner, Christmas party, and Australian Day parties at my home. I had a much more vibrant social life in Buenos Aires than I ever did in Minnesota, made even easier by being single.

Spend some time learning to understand the cultural norms around affection and friendliness where you go. Argentines are warm and outgoing generally, and the expat crowd — because they’re away from their homes too — are very easy to meet. If you’re moving alone, consider what the cultural norms might mean for your social life. (If people are generally more reserved and slow to make friends, are you okay with having a small social circle?) I’ve heard from other expats that it is difficult to make friends when people find out you’re only there for a finite time because they don’t want to make the social investment, but wasn’t the case for me.

Transportation

Being in a large metropolitan area with a subway, buses, trains, and cheap taxis made getting around without a car easy. You can always rent a car if you want to explore more of the country, but in my case that was unnecessary. I walked many miles every day — an excellent way to get to know the neighborhood. It also was the source of some wonderful memories: it’s while walking that I came upon the stunning Art Deco building, the surly French coffee shop proprietor who warmed up when asked about the vinyl records he’s playing, the pet store where puppies ran free and visitors were welcome to play with them.

Language

Because I spoke no Spanish, I prioritized finding a reasonably-priced tutor who came to my home three times a week. Most Argentines in Buenos Aires were not bilingual, even in the professional classes. And I never met one taxi driver who spoke English. But, with a little creativity you can get by. I always wrote my destination address on a piece of paper to give to the driver. It also helped that I’m also totally unashamed to make a fool out of myself: I once employed pantomime to act out the action baking soda takes when it’s incorporated into cookie dough (which I was attempting to make). As I swooshed my arms upwards in imitation of a chemical reaction, I gathered a small crowd in the store. People began shouting out their guesses to me. It felt like I was in a game show!

Putting it All Together

People often ask me “How did you find the courage to move to another country alone?” The hardest part is adjusting your attitude. Once that’s accomplished, the rest falls into place.

If the country you choose is not what you envisioned, consider your options and context.

Culture shock can be extremely difficult, especially if you’ve had a very monocultural upbringing or social context. Consider that perhaps you need to be there at least a year to acclimate to the culture or build social connections.
If you’re certain this isn’t the locale for you, move to another country. If your stuff is in storage and you’ve tied up loose ends at home, you’ve nothing to lose. Spend some time figuring out what it is that was difficult for you, and research how those challenges might surface or fade away in other cultural contexts.
Or simply go home. There’s no shame in that.

Thank you for reading about my journey. I’ll be starting a new one soon as I approach retirement age this year and prepare to move to Madrid. One expat experience usually leads to another. In my case, three friends from my stay in Buenos Aires are in Madrid, waiting to welcome me.