The Acadia Lagniappe

Cobblestone Bridge, Acadia National Park                                                             (c) 2015 - John and Meghan Khairallah

Welcome to 2021 and the first edition of The Acadia Lagniappe!  This monthly email is designed to be an informative and enjoyable way to keep you up to date on financial planning, saving, giving, investing and taxes.  

2020:  Looking Back, Looking Ahead

It’s no secret that when we reached 12:01 of 1 January 2021, we all thought (naively), that somehow the challenges of 2020 were behind us forever. Um, that didn’t happen. Now what?

As I think about personal finance in this new decade, I’m captured by the thought, “the more things change, the more they stay the same.” While the experiences of 2020 were extreme in many ways, none of us have to think back very far to remember similarly troubling times. Here’s a short list just from my lifetime:

• 60s: Cuban Missile Crisis, Vietnam, civil rights movement and assassinations
• 70s: Oil embargo, gas lines, Watergate
• 80s: Prime rate was 21%, mortgage rate was 14%, and the ’87 stock market crash
• 90s: Trade and budget deficit, Savings & Loan crisis, recession, Desert Storm
• 00s: 9/11, mortgage crisis, corporate fraud (remember Enron?)
• 10s: Unemployment, continuing War on Terror, student debt, and, of course, COVID-19

This is not a depressing list of world and economic events, but rather a sobering reminder that “life happens” and we shouldn’t be surprised when things occur that are unexpected and difficult. The key is understanding how to prepare for and respond to the latest development. Here are some of the most critical steps to weather the financial storms of life:

• Establish your Emergency Fund. This is your first and most important financial “shock absorber.” You will never reach your long-term goals if you are always dealing with urgent financial needs. Note: there is a difference between urgent and important. A ringing phone is urgent while spending time with your family is important.
• Always play the long game. Develop a plan to save, give and invest for the long-term. Identify your important priorities and goals, and then develop a plan to steadily achieve them.
• Headlines are information, not education. That’s an important difference. Educate yourself on how to successfully plan, save, give and invest, and then you can peacefully (I hope), ignore the “noise” of headlines. Note: on 23 Mar 20, when the market reached its bottom, would anyone have guessed that 2020 would eventually become a record-setting year? Point: With a long-term plan, you can stay the course even in the most troubling of times.
• Lastly, don’t go it alone. Talk to your spouse, family, or Financial Advisor. Allow someone into the conversation that can provide wisdom and knowledge. Leverage their objectivity, experience and expertise. I’ve said for years that people, in the absence of knowledge, will assume the negative. It’s why we’re afraid of the dark, right? So, talk to your Advisor or find one who can help you navigate your financial world with wisdom and knowledge.

I’ve assembled a few recent articles that I found interesting and informative. I also added a little light diversion. 

Laissez les bons temps rouler!

What does "Lagniappe" mean? Click here to learn more.

Estate Planning:  Need to have a conversation with your family about the future?  Here's great article to help guide the discussion (it's focused on Millennials, but it applies to any age).

Investing:  What do we make of the markets in 2020?  Perhaps the best word for the past year is "surprise."   For a great summary of the lessons we should learn from this experience, read this Wall Street Journal article here.

Taxes:  What can we expect in 2021?  There is still much speculation, but no one doubts there will be changes.  For a thorough summary or known and possible changes, click here.

Diversion: Looking for a fresh view in 2021? Try WindowSwap..  People from around the globe share their view of the world.