THE NUMBERS DON’T LIE:THE NUMBERS DON’T LIE:

VOYAGER

FROM THE DESK OF… features rotating columns from Helmstar

partners Tom Steelman, and Ben Boettcher, ChFc, CFP.®

ISSUE 10 . NOVEMBER . 2018

The Power of Planning:

Ups. Downs. Bulls. Bears. Here’s how a thoughtful plan brings peaceof mind, even in times of turmoil.

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The Numbers Don’t Lie:

Timing the Market vs. Time in the Market

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Wealth & Income:

What’s the difference?

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FROM THEDESK OF…

From the outside looking in, it can be difficult to tell what led to someone’s good fortune. Hard work? Intelligence? Luck?

And there’s a host of cliches that capture our confusion: “Fortune favors the brave,” “Fortune favors the bold,” or (probably more accurate than we want to admit) “Fortune favors the fool.”

At Helmstar, we see it a bit differently. We believe “Fortune favors the prepared.”

World-renowned microbiologist Louis Pasteur spoke these famous words during a lecture over 150 years ago. He lived by them. Pasteur’s commitment and ability to stick to a plan allowed him to persevere through years of trial and error.

This paved the way for his success decades later when he made some of the largest scientific discoveries in human history. In his case, like so many, fortune did indeed favor the prepared.

Pasteur’s words ring more true today than ever, especially when it comes to planning for your future. Having a plan allows us to define our goals, build our confidence, measure our progress, and reach our unique version of “success.”

We can’t rely on luck. We can’t just wing it. We must prepare in every dimension of our lives — our minds, our relationships, our finances, and more.

Whether it’s the act of preparing or the actual preparation that matters most, I can’t say. But I do know Louis Pasteur’s words are as true today as ever.

Insights on wealth, personal finance and more

A R E G I S T E R E D I N V E S T M E N T A D V I S O R Y F I R M

BENBOETTCHER

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Read more...Visit helmstargroup.com/blog to read past newsletter articles, additional personal finance tips, & more.

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October 19, 1987: one of the worst days in stock market history. The US market fell 20 percent. Investors panicked and started preparing for the worst.

But here’s the irony: The investors’ panic wasn’t just a result of the crash. It was the cause.Before the crash, a rumor spread that portfolio insurance would be a death sentence for most investors. While this wasn’t a new concept or anything to fear, this created mass panic. Other investors lost trust in one another, creating a domino effect where investor after investor pulled out of the market.

No one saw that coming.

Human psychology tells us that we might be good gamblers in the moment, but we’re terrible fortune-tellers when it comes to predicting the future. And investors are no different.

All of us can fall victim to emotionally adjusting our investments based on the momentary patterns we observe in the stock exchange.

But despite what we think, the market has historically experienced more ups than downs. According to Forbes, the stock market has risen two out of every three years from 1871 to 2015.

Even though it goes against instinct, the research shows steadily staying in the market leads to larger rewards over time.

TIMING THE MARKET VS. TIME

IN THE MARKET

“By failing to prepare, you are preparing to fail.”

— BENJAMIN FRANKLIN

One of the reasons timing the market

often doesn’t pay off is that

transaction expenses — including trading fees and taxes — can significantly

eat away at your “profits.”

Have a friend or family member who you think could benefit from receiving our Voyager newsletter?

Let us know.

Go to helmstargroup.com/contact or call 208.429.0800

and we’ll make sure they receive it.

PASSALONG!

A 2010 Berkeley study on day traders in Taiwan

found that the average traderlost 0.25% of their

portfolio DAILY, and 93% quit day trading

within five years.

How Rising Interest Rates MAY IMPACT YOUIn September, the Federal Reserve decided to raise the federal funds rate for the third time this year, up to 2.25 percent as of September 26, 2018.

With a low unemployment rate and a targeted 2% inflation rate, the Federal Reserve believes there are good things in store for the economy.

The federal funds rate has been used as a tool to control inflation and maintain economic growth. It’s also a strong indicator of the nation’s current economic state, giving it the power to set the standard for savings rates and other loan products.

So, what does this mean to you?

Not-so-good news for borrowers... Mortgage rates will increase. Homeowners with an ARM might call their lender and look into freezing their rate or refinancing to a fixed rate. First-time homebuyers might consider asking to freeze their rates, and prospective homebuyers might consider renting for a while longer. Credit card rates will increase. For those carrying a balance with a lot of credit card debt, this might make a larger impact on your credit card and interest payments. Consider asking for a lower rate or looking for a new card with a good balance transfer offer. Other loan products will increase. Many private loans are tied to indexes like LIBOR,

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© 2018 The Helmstar Group.Material in this newsletter is for informational purposes only. It is not to be construed as tax, legal or investment advice. Information has been gathered from sources believed to be reliable, but individual situations can vary. Please consult with an investment, legal, accounting or tax professional about your unique situation.

T 208.429.0800 | F 208.429.0801250 S. 5th St. Suite 600 | Boise, ID 83702

The Power of PLANNING

HELPS YOU DEFINE YOUR GOALS. Financial planning isn’t just about calculating a number; it’s an ongoing conversation about what you value. It’s about envisioning the lifestyle you want, cultivating the things that matter, and cutting out the things that don’t.

HELPS YOU FIND YOUR BLIND SPOTS. Maybe you’re spending too much. Maybe you’re making the wrong types of investments. A plan helps us identify the mistakes — sometimes small, sometimes large — that we’ve been making but weren’t able to see before.

BUILDS YOUR CONFIDENCE. 52% of those who have a financial plan say they feel confident when it comes to managing money, savings, and investments, compared to 30% of non-planners. [Source: CFP Board Survey] Confidence can enhance many areas of our lives.

MOVES YOU MORE QUICKLY TOWARD YOUR GOALS. Most Americans save an average of 5% of their income. Those who have a financial plan typically save double that. [Source: CFP Board Survey] Double!

ALLOWS YOU TO LIVE MORE COMFORTABLY. Those who have a financial plan are twice as likely to say they’re living comfortably than non-planners. [Source: CFP Board Survey] Who doesn’t want more comfort?

PROVIDES A TOOL TO MEASURE YOUR PROGRESS. A plan places your values, dreams, and aspirations into a timeline that’s measured by hard data.

CONNECTS YOU TO YOUR NORTH STAR. The economy changes and recessions can happen. But even in the midst of change, chaos, and bad luck, a plan can guide and steer us back to what we truly value: our North Star.

One thing is certain: change is inevitable. While much of this change is — almost by definition — unforeseeable, there are steps we can take now to prepare.

Consider these seven reasons why having a solid plan can still help you prepare for the inevitable changes no matter what the future brings.

HAVING A PLAN...

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Ups. Downs. Bulls. Bears. Here’s how a thoughtful plan brings peace of mind even in times of turmoil.

THE BOTTOM LINE? THERE’S POWER IN PLANNING. But it can’t be simplistic “planning” via an online calculator or rules of thumb. Instead it should be an in-depth look at your unique situation under multiple scenarios.

In other words, are the steps you’re taking — with your savings, home, recreation… everything — aligned with your North Star, and will those steps help you achieve your life plans under most, if not all, circumstances?

The goal is to create a plan that can stand up to the ups and downs of the market and life. Through bulls or bears. Through good health or illness. At Helmstar, we use sophisticated software and more than a touch of expertise to help you see and adjust to potential risks before they get you off course.

Haven’t yet started on an in-depth plan? Get in touch.

WEALTH&INCOME:

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50% of those who have a financial plan feel like they are on track to meet all of their financial goals, compared to 32% of non-planners.

WHAT ’ S THE D I F F ERENCE?It’s common to confuse the difference between wealth and income. Those who earn the highest incomes should be the wealthiest, right?

Well…not exactly.

Consider this hypothetical scenario:

Meet Harrison. Harrison attended a ritzy private medical school on the east coast, taking out thousands in student loans. He eventually became a highly-paid osteopathic surgeon, got married, and moved into a colonial-style home. His four kids all receive the best private education in the state. On the weekends, his wife goes to the spa while he golfs at the country club.

Meet Jack. Jack worked full-time to pay for trade school on his own. He became a certified electrician and, while his paychecks aren’t impressive, he and his family live comfortably below their means. Jack started saving for retirement as soon as he had a steady income. His kids attend a local public school and they still live in the same small bungalow they paid off last year.

So…who’s wealthier?

Harrison might make six figures for his annual income, but he doesn’t take all that home. His paychecks go to his children’s tuition, vacations, new cars, and a sky-high mortgage. He’s secretly living paycheck to paycheck.

But with the right budget, Jack and his wife can still live comfortably even if he stops working.

The moral of the story? A high income does not always amount to wealth.

Income is the amount of money coming in over a set amount of time. It’s the paychecks we receive, the rent from our tenants, the interest building up in our savings accounts. Income can be used right away.

But while income can be reduced to the amount of money written on a check, wealth paints a larger picture of our financial standing. Wealth is the total sum of all the assets we’ve acquired and owned over time: real estate, expensive jewelry, cash. It takes time to create and reap the benefits.

Both can help you achieve your life goals. Your income can lead you to lasting wealth, but only if you have a plan to get you there. To be clear: a strong income is a great tool to building wealth. But it is wealth — and not purely monetary wealth — that gives you the ability to sustainably achieve your life goals, whether they be retirement, charity, or a lasting legacy that’s truly your own.

which means a rate increase at the federal level equals a rate increase for private student loans, auto loans and personal loans. If you’re planning on buying a car, do it sooner rather than later. If you’ve got private student loans, consider paying those off before any public loans.

Great news for savers…

Rates for products like savings accounts, money market accounts and CDs will increase. Savers can feel comfortable (and confident) about pumping money into a traditional savings account (or even a long-term product like a CD).

At Helmstar, we are dedicated to helping you navigate the changes (the good and the bad!) in an ever-evolving economy.

“HOW RISING INTEREST RATES MAY IMPACT YOU” Continued from page 1