When Making Major Financial Decisions, It Pays to Mind Your Qs – Presented by Mark K. Lund, Utah Financial Advisor

Financial Advisor UtahIt seems like all the pharmaceutical ads on TV (or wherever you stream your content) follow the same formula. They say a few words about an illness or condition, then they show ordinary people enjoying the kinds of wonderful activities that make us all jealous on social media: Driving a vintage convertible along the coast, riding bikes to a beautiful picnic spot, or enjoying a big family dinner in the front yard of a quaint farmhouse.

By law the pharmaceutical companies are required to mention the possible side effects to their drugs. These are listed by a soothing voiceover as you see the most stunning shots in the commercial.

Obviously, the drug marketers’ job is to emphasize the benefits of their product while drawing as little attention as possible to its potential downside. In other words, despite what the voiceover is saying, their visuals are designed to bias you in favor of their drug.

Fortunately, your physician does not prescribe medicine based on how a commercial makes him or her feel. Instead, they carefully consider the two Qs: the quantitative—how does the drug work and do diagnostics favor its use in your case? And the qualitative—how will this treatment affect the rest of your life?

Powerful drugs usually come with significant side-effects. There’s always a trade-off.

The same thing is true for major financial decisions. It’s important to look at both Qs—the quantitative and the qualitative.

Rob Myers, a financial planner and wealth manager, gives the example of a couple he helped with making a decision about how they should take their pension income.1 They had the option of receiving their money as a large lump sum or taking it as a monthly benefit guaranteed for the rest of their lives.

Myers began with a quantitative assessment, looking carefully at the pension’s survivorship options, and then running the numbers to determine how the lump sum would need to perform as an investment to match the monthly benefit. Based strictly on cash flow math, the guaranteed payout turned out to be the better option.

But then the couple needed to consider the second Q, the qualitative. They needed to answer more personal questions like “How much would having a large sum at your disposal mean to you?”

“Utilizing a goals-based approach and crunching the numbers,” said Myers, “allowed us to put the choices in front of them in an even-keeled way, eliminating any bias that might exist.”

We are all prone to bias when deciding what to do with our money, whether it’s making a major purchase or deciding how we’d like to save for retirement. It’s important to be able to recognize it for what it is and not let it hijack the prudent decision-making process.

Your trusted financial advisor can help you with these decisions by first conducting a thorough analysis of the financial ramifications for your unique situation, and then second, by helping you identify the course of action that’s most in line with your long-term goals.

If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc.
11576 S State Street, Bldg. 1002
Draper, UT 84020

Sources:
1. http://go.pardot.com/e/91522/n-engaging-financial-advisors-/93x7yv/2094476491/h/2D9l5kdI01aa_7nBgZIzXkH96hNP311gTIeM1-_k7wI

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This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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