Balliett Financial Services, Inc.
What if I save more (or less) or spend more (or less)? That will happen; it's inevitable. That's why a one-time study is marginally useful. We recommend a yearly update. If it shows you are off track, an adjustment can be made.
What's involved in your financial-path study? You tell us your income, expenditures, assets, and liabilities. In return, we tell you where we think your present financial path will take you, whether or not you figure to run out of money, and how much return on savings or investments will keep you out of trouble.
A stockbroker did something called a Monte Carlo study for a friend of mine. Is that what you do? No. Monte Carlo is software that creates a chart showing many paths. Many.
Each path is a tad different from all the others, because of inevitable variations in the rate of inflation, differences in patterns of spending and saving, and unpredictable variables.
At Balliett Financial, we believe Monte Carlo is useful only as evidence that a one-time financial forecast is certain to be wrong.
What's the most likely glitch? Inflation. For more than a half-century (since 1945), inflation has averaged about 4% yearly.
At that rate, the dollar buys half as much in about 17 years--and half again that much in another 17.
If you happen to be 34 years old, now you know what's happened to the dollar since you were born. If you're age 68 or older, you probably think almost everything costs too much.
Also, now you know why so very few people become financially secure by saving their money and shunning investment. Savings rates are mostly lower than inflation rates.
What inflation? Computers cost less than they did 17 years ago. That's true. COLI (the cost of living index) is useful as a rough indication of representative spending patterns for food, shelter, health care, clothing, basic transportation, debt service, insurance premiums, taxes--and computers.
COLI suggests what many of us are up against.
Every month, I'm more in debt. I don't have a chance. Or do I? Maybe not, but you probably do. We can help you see if your cash flow is as bad (or good) as you think it is.
Once we have seen the problem (if any), we can look for a solution. It's what we do. An overlooked glitch in one's spending pattern can often be corrected with minimal pain and thus provide cash for paying down debt.
My parents have a different problem. They make plenty of money, but they're afraid of losing it. What about them? Many people feel that same anxiety -- some, for good reason. Some others just have no clear view of their financial future. Once they see it, some can relax and live happily on their money and some others can adjust their spending and saving to get on the right track.
My dad never stops complaining about the stock market. What can you do to help him? We offer lots of information and advice to clients who manage their own investments, but much of it goes unheard and unread or is quickly forgotten.
Also, we refer our do-it-yourself investment managers to good informational resources. AAII.com and finance.yahoo.com come quickly to mind, and there are others. For an example, go to BalliettFS.com, then click Clients.
Would you invest my parents' money for them? Not necessarily. Some people need to be in control and cannot delegate. Some have unrealistic expectations. Some cannot be pleased.
We like working with reasonable people who understand that, unlike certificates of deposit, the securities markets go up and down and up and down and up and down.
Back to me. Can you help me find more money to save? Not necessarily. We can evaluate your present holdings, make specific suggestions on what to sell or hold, and provide you with substantial informational assistance. Also, we can encourage you to stick with a sound spending plan. It's what we do.
Are there ways to rescue big bucks that people tend to overlook? Yes, there are. Some couples (and singles) with good jobs can painlessly shift big bucks into savings or investing.
They can rescue even more cash if they are willing to tolerate a little pain.
I've seen some of my dad's suffering with the stock market. I want nothing to do with it. Now what? I'm guessing you need to know more about it than your dad does. The more you learn about the market, the less anxiety and fear you will have.
Do you invest clients in anything you don't invest in yourself? No, except when we like an investment but are fully invested elsewhere and can find nothing we'd sell to raise cash.
Are you stockbrokers? Insurance agents? No and no. We are not salespeople, and we never work on commission. We are paid by our clients and no one else.
We are portfolio managers, resource managers, consultants on personal finances--and on business finances that apply to most businesses and professional practices. Our roots are in medical practice management. But much of what applies to the business of medical practice applies, too, to other small businesses.
Do you guarantee investment success? No. There's risk of loss in every kind of savings and investment (as in every aspect of life). But we do know how to create portfolios that have shown consistent gains year over year.
We have no control over inflation. The born savers among our clients hadn't known that the dollar loses half its purchasing power every 17 years or so, nor that FDIC insurance doesn't always protect savings accounts in banks.
What's more, we've helped some of them understand that inflation makes conservative investment necessary. We've even helped some of those to learn how to buy and sell securities for themselves.
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Balliett Financial Services, Inc.
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