BY: Mary Coane, CTFA, CFP®
Senior Vice President, Wealth Advisor
To say that my son Matthew loves everything “Star Wars” would be an understatement. He is truly a walking Wookiepedia of information and he recently reminded me that we need to celebrate National Star Wars Day. I did not even know that such a day existed, so when I asked my son when it was, I got a look of sheer disbelief and a “No way, Mom. I can’t believe you did not know about May the 4th!”
After a half hour conversation about the importance of the day, which apparently also involves buying a new light saber, Lego or T-Shirt, we moved on to talking about great quotes from the “Star Wars” movies. This got me thinking about how many of these quotes could be applied in everyday life and, specifically, in my role as a wealth advisor helping clients with their financial planning needs.
The financial planning acumen of Yoda
To start with a classic quote from Yoda in “The Empire Strikes Back,” “Do or do not. There is no try.” This means that if you are going to take on a task, you need to commit to finishing it and don’t just make an attempt. This holds true when creating and carrying out a financial plan. Financial planning is important because it provides a roadmap to reach a particular goal or set of goals over a given period of time. For a plan to be effective, it must be monitored and continually updated when significant financial or life events occur, such as changes in the tax laws, marriage, divorce, the birth of a child, death or inheritance. When a plan is updated, it should also include a review of all beneficiary designations on individual retirement accounts (IRAs), insurance policies, annuities and employer retirement plans. Creating a plan and leaving it unattended is a sure way to end up down the path to the dark side.
Another one of my favorite quotes is from Qui-Gon Jinn in “Star Wars: The Force Awakens.” He said, “Your focus determines your reality,” which means focus on what we want to happen and how to get there. When Carrie Fisher (Princess Leia) passed away on December 27, 2016, she left a sizable estate, including jewelry, art, real estate, ownership in limited liability companies and intellectual property rights, to her daughter, actress Billie Lourd. Fisher had worked with some of the best estate planning lawyers in Los Angeles to create a trust to avoid probate and to keep her assets private. However, her plan was partially flawed. According to reports, not all of Fisher’s assets were transferred into her trust, thereby potentially subjecting them to probate.
Probate is a legal process that takes place to prove the validity of a will and to transfer legal title from the estate of the decedent to his or her beneficiaries. It can be expensive and time consuming, and it is a matter of public record. While Fisher focused on proactive estate planning in terms of what she wanted to happen, the “how” part got overlooked. Asset titling needs to be coordinated with your estate plan to ensure your plan is carried out as intended.
Forceful advice from Obi-Wan
In the original “Star Wars” movie, now titled “A New Hope,” Obi-Wan Kenobi says, “In my experience there is no such thing as luck.” If there is one thing we have learned from the COVID-19 pandemic, it’s that markets can be volatile. There is a galaxy full of different investment options. It is important to understand the risks involved in certain asset classes, how to manage those risks through diversification, and the necessity of regularly rebalancing your portfolio to ensure it aligns with your financial goals. Most investors do not have the research, skillset or time to effectively manage their own portfolios and your chances of successfully timing the market are about the same as navigating an asteroid field in the Hoth system.
The need for Jedi training
Lastly, one of my favorite Yoda-isms, “Always pass on what you have learned.” The best way to create financially responsible padawans is to educate them on the importance of saving, budgeting, investing, establishing good credit, and borrowing wisely. Being open and honest about your financial situation can help them plan their own finances and manage yours in the event of incapacity. Failure to prepare young padawans for the responsibilities that come with managing an inheritance can result in them feeling like the Galactic Empire after the Battle of Endor — utterly defeated.
Don’t underestimate the power of planning. By working with a team that includes a financial advisor, portfolio manager, and tax professional you can develop and implement a plan to achieve your goals. Consult with an Argent professional today because only with sound financial advice, successful you will be. And May the fourth be with you on National Star Wars Day!
