the-landing

You Have To Sell It Before You Can Buy It

Share on facebook
Share on twitter
Share on linkedin
Share on email

Imagine this. It’s early afternoon and you’re at the grocery store with list in hand. Your cart is overflowing. Only a few items remain, and soon you will be headed to the checkout counter.

Did you bring your checkbook? Oh, I see. That’s too old fashioned for you, huh? How about your credit or debit cards?

Of course, you’ll need to pay for your items after the cashier rings up your grand total. Have you ever given any thought about where the money comes from? Out of your paycheck perhaps? Sure, it may come from the bank, but it had to originate somewhere. Where did the next dollar you are about to spend come from?

Trading Time or Expertise for Income

We spend many years of our life trading our time or expertise for income. Whether you work for somebody else as a W-2 employee, or you’re self-employed, your paycheck is a result of trading your time or expertise for money.

Maybe you are CBO (Chief Bottle Washer) at International Bottle Co, and manage other bottle washing specialists. You earn a paycheck for the time you spend committed to your craft and running a successful team. Perhaps you are a solopreneur who happens to be the most sought-after meditation guru in your area code.  In that case, you trade your expertise in meditation techniques for a fee for service.

Whatever you happen to be world class at you trade time or expertise, perhaps both, for coin, moola, dough.  …to pay the bills, maintain your desired lifestyle, and perhaps save some for a rainy day or the longest vacation of your life, retirement.

Jobless but Not Penniless

What happens when you’re no longer in the market for trading your time or expertise? What happens when you are no longer employed and earning a paycheck? What happens when your retirement resources have to replace your paycheck? How will you fund your lifestyle? How will you pay for the big monthly expense, as well as the little day to day expenses like paying for your groceries?

Income Sources?

Maybe some of your basic living expenses will be covered by a source of inflation adjusted, government backed, and tax advantaged income like social security. Perhaps you are fortunate enough to have a pension to provide additional income for as long as you live too. These are both great foundational beginnings for a successful retirement lifestyle. However, what happens when these sources are not enough to cover ALL of your desired lifestyle living expenses? Then what? Where will the cash come from to pay for your groceries? 

Liquid Cash or Cash Equivalents

Ok, so you have cash in the bank. Probably a wise move on your part. Let’s imagine that you use the cash in your checking, savings, or money market account? Maybe for a while it pays life’s tab. At today’s interest rates it’s not likely that you will be able live off the interest alone. Your cash accounts may last for a while, but then what?

At that moment, when you are ready to buy your groceries, and there’s no cash in your account. Now where do you turn to? Aw I see, you own investments in your personal savings brokerage and retirement accounts. Today is the day you come face to face with the reality that you must sell something to buy something else.

Your Investments Are Property, not Cash

Stocks, bonds, mutual funds, limited partnerships, etc. These investments are property. You buy them with cash.

If your assets are currently invested in stock, mutual funds, bonds, or other marketable securities they are not cash. You have bought something at some point in time, and hopefully at the time you need your money in order to pay for something else you will be able to sell the investments that you bought for at least what you paid for it, and perhaps more. However, as many have experienced recently, this is not a guarantee.

All of the previously mentioned investment items must be sold to someone else, in the open market at current market prices, for cash before you can pay for your groceries.

Raising A Few Questions

How quickly can you sell my investments?

That depends on the investment. Stocks are often quickly sold throughout trading hours, and mutual funds are redeemed daily. Selling an individual bond on the other hand requires a process of finding a bidder, and then accepting the ask price. This can be a bit more involved. Many real estate investment trusts (REITs) are often traded like stocks on an exchange, and can be sold at market price rather quickly. On the other hand, a real estate limited partnership (RELP) is very illiquid, and finding a buyer can take time since no formal market exists.

At what price can you sell them for?

That depends as well. If there’s a demand for what you have and a limited supply you will most likely sell your investment for a gain. What if what you own is in low demand for one reason or another. You may be forced to decide: sell at a loss, or lower your standard of loving until market conditions improve (AKA: step away from the lobster, and reach for the canned tuna).

At what point in time will they (your investments) be worth more than what you paid?

Who knows? Depending on what you bought, and when you bought it that answer maybe be “right now” or it may be “never.” Each investment carries risk of loss in exchange for a potential reward also referred to as gain. Prudent investing strategies, management of a diversified portfolio, and dollar cost averaging over time may increase your chances of success, but there is no guarantee that you will ever be able to sell an individual investment for more than you paid for it.

But My Statement Says…

Too often, we look at our investment brokerage account statements and see a dollar figure as if it were in our savings account at the bank. However, the statement you received on your brokerage account, or other investment accounts like an IRA or workplace retirement plan is a representation of the value of all of those investment assets if they were sold that day.

If your account states that you have $500,000, do you really have $500,000? The answer is probably not. You may have some cash, or cash equivalents within your investment holdings. But the $500,000 on your statement is a representation of what you could’ve sold your investments for on the day the statement was generated.

What about today? What about the next day? What about six months from now? Only the market will determine what your assets are worth at that time you sell.

The Cashier Is Waiting

Now that you’re ready to check out, could somebody point you to the customer service desk where you can exchange your GE stock for ground beef? How about your US Gov. Treasury notes for toilet paper and Cheerios?

You need to make dinner tonight, so you need these groceries and your quarterly brokerage account statement last night indicated that you have plenty of money to cover you bill.

Where in this supermarket do you convert your investment holdings to cash so you can take home your bounty (literally, you needed paper towels)? There’s got to be somebody here that can help us out. Oh, wait. That’s not how it works?

Freedom of Choice

Choosing which investments to hold, and which ones to sell can be another perplexing decision. Should you sell the worst performers in your portfolio before you lose anymore? Should you sell the best performers and take a profit before the market turns?

What if the worst performing investment from a price perspective happens to be a stable and profitable company generating significant dividend income? What if the best performing investment is a growth company that has reached an all-time high? Could its share price keep rising? Could it go down?

These questions are a lot easier to consider when you are not facing the pressure of being next in line at the figurative supermarket checkout line needing cash fast. Under those circumstances it may be difficult to come to a logical conclusion when you’re forced into a fast decision.

Whew, We Made It the Long Way Around the Mountain (You’re Still Here?)

In retirement you’ll have income sources like Social Security, and maybe a pension if you’re lucky enough to have one. Then you may have some coin (cash) in the bank at the ready. Besides that, you’ve likely saved money in retirement accounts, or have personal savings in an after-tax brokerage account. These are investments, not money, even though your statement represents the total value as such.

You’ll be using these investments to fill the gap between what you need to maintain your lifestyle, and what you currently have coming in from your income sources.

Continually placing yourself in a position where you must potentially sell your investments at a loss in order to maintain your lifestyle, or choose to reduce your lifestyle to a less desirable one can be quite frustrating. However, there are steps you can take to give you self-choice and flexibility.

  • Consider purchasing additional lifetime income to compliment social security
  • Develop a loss avoidance strategy where you can pull money from during down market cycles
  • Minimize the impact of market risk, interest rate risk, and other forces that could force you to sell investments at a loss

 

Don’t back yourself into a corner!

It’s better to prepare today, then re-pair tomorrow.

Want To Learn More?

Financial education is at the heart of all we do.  Check out all of our financial education resources.

Want To Get Started?

Our goal is your happiness and success. We’ll be here to help you retire with purpose on time.

“Investment Adviser Representative of and advisory services offered through Royal Fund Management, LLC, a SEC registered investment adviser.”

You Did It!

Congratulations on taking the first steps towards your financial future!
We have received your information and will be in touch
to schedule your appointment soon.

TWFC Logo BW copy

Medicare Open Enrollment, WOI-DT, 10/19/21

Get Started Today

Episode #7 Audio

Video

Play Video

Episode #15 Audio

Video

Play Video

Episode #14 Audio

Video

Play Video

Episode #13 Audio

Video

Play Video

Episode #12 Audio

Video

Play Video

Episode #11 Audio

Video

Play Video

Episode #10 Audio

Video

Play Video

Episode #9 Audio

Video

Play Video

Episode #8 Audio

Video

Play Video

Episode #6 Audio

Video

Play Video

COVID-19 Vaccine/Stimulus Latest, KCCI, 12/16/20

Get Started Today

Episode #5 Audio

Video

Play Video

Episode #4 Audio

Video

Play Video

Episode #3 Audio

Video

Play Video

Episode #2 Audio

Video

Play Video

Episode #1 Audio

Video

Play Video

When to Claim Social Security

Get Started Today

The Triplett-Westendorf Financial Group Difference

Commitment & Discipline

When you work with us...

we help you structure a retirement income plan that reduces stress and anxiety so you can enjoy life in retirement. Through your commitment and discipline and the Triplett-Westendorf Financial process, we’ll help you identify any weak areas, define priorities, and build a stronger, clearer, more precise plan to achieve financial success.

We introduce you to financial strategies...

that you need but may not have heard of from other firms. Then we show you how to use those strategies to effectively maximize your retirement savings because you deserve the clarity, transparency, and comfort of owning a guaranteed retirement income that lasts as long as you do.

Income You
Can Count On

Ways You Benefit

Get your arms around your financial life...

once and for all when you work with us. After we take an inventory of your resources and goals, you’ll have clearer picture of where you are, which is essential to achieving the retirement you’ve worked so hard for. Along the way, we’ll answer your questions, educate and empower you to take charge of your financial affairs. Together, we’ll take the worry out of your money.

We Always Place You, the Client, First.

Organization

With us, you’ll get your arms around your financial life. We’ll do this together by taking a detailed inventory of your resources and goals.

Partnership

Our team gets to know you, and you get to know us. We work together every step of the way to make sure that your future is financially sound.

Objectivity

Hope is not a strategy. We work to clearly understand your goals and craft a plan that focuses on realistically meeting those goals.

Education

We find that informed clients are successful clients. You get answers to your questions and an education that will empower you to take control.

Proactivity

We are always looking forward to find and implement new strategies for you. We feel the best results are when we are ahead of changes, not reacting to them.

Accountability

We give you the clarity and transparency you deserve. We build your plan with your goals in mind and keep you involved and informed at every step.

Episode #16 Audio

Video

Play Video

Second Stimulus Bill Approved 2020, WHO, 12/28/20

Get Started Today

Episode #25 Audio

Sales Tax Holiday 2021, WOI, 08/06/21

Get Started Today

Episode #24 Audio

Work from Home, WOI-DT, 10/04/21

Get Started Today

Episode #23 Audio

Episode #21 Audio

Episode #21 Audio

Episode #20 Audio

Delta Variant Money Questions, WOI-DT, 09/14/21

Get Started Today

COVID-19 & Kids Moving Home, WOI-DT, 08/25/21

Get Started Today

Episode #19 Audio

Video

Play Video

Where is my Stimulus Check? 2021, KCCI, 01/14/21

Get Started Today

Mid Year Money Moves, WOI-DT, 07/20/21

Get Started Today

Episode #18 Audio

Video

Play Video

Episode #17 Audio

Video

Play Video

Inflation Concerns 2021, WOI, 06/23/21

Get Started Today

Summer Vacation Season Kicks Off, WOI, 06/02/21

Get Started Today

Financial Literacy Month 2021, WHO, 04/23/21

Get Started Today

Small Business Stimulus Update 2021, KIMT, 03/16/21

Get Started Today

Third Stimulus Bill 2021, KCCI, 03/16/21

Get Started Today

You Should Know How
Triplett-Westendorf Financial Group Is Compensated

Folks seeking financial planning and investment advice from a fee-based client-first fiduciary advisor may choose to engage with Triplett Wealth Management*, a division of the Triplett-Westendorf Financial Group. These folks would pay an annual fee deducted quarterly from their accounts, and in return receive conflict-free investment advice about their securities investments like equities (stocks for example), and fixed income (bonds for example), and any other securities-related investments.

Folks who are a good fit for this engagement are those who might feel good knowing that their advisor receives no commission or financial incentive to recommend one investment over another and that our firm does well financially when they do well.

Folks seeking this type of relationship pay a fee based on the assets managed within their plan. The fee covers the fiduciary management of market-based investments within their portfolio, as well as the ongoing maintenance of their personalized PT5 Written Retirement Income Plan designed to guide them to and through their very own vision of a successful retirement.

PT 5 Retirement Income Plan Screening – $2,400 – One Time Initial Planning Fee

  • Initial Comprehensive Plan Design – Steeped in our 6 cores values
  • Listen to, and take a record of, the vision you have for your future Establish written goals & organize your retirement resources
  • Evaluate social security & pension claiming options
  • Produce a comprehensive analysis of your current path projected forward
  • Included: Customized Social Security Analysis, Comprehensive Investment Analysis, Personalized Retirement Income Plan Examination.

PT 5 Retirement Income Plan Screening – $2,400 – One Time Initial Planning Fee

Includes Investment Supervisory Services & Ongoing Financial Planning & Advice – We Become Your Financial First Responder

  • $100,000 – $499,999 = 1.5%
  • $500,000 – $999,999 = 1.25%
  • $1,000,000+ = 1.0%

*Royal Fund Management doing business as Triplett Wealth Management

We believe every financial product is a tool. Each tool was designed to perform a specific job. Some tools are better quality or perform their intended job better than others. Freedom to choose the appropriate tool based on quality and effectiveness at getting the job done is important to our team. Sometimes insurance products like life insurance, fixed annuities, or long-term care insurance may be the right tool for the job. However, they are not all created equal, and specific manufacturers of these contracts are better at certain things than others.

When we have determined that it is in our clients’ interest to use an insurance contract issued by an insurance company to transfer specific risks away from them and their family, to an insurance company specifically specializing in handling such risk, those companies who we do business with pay our representatives a commission. Our insurance licensed representatives are completely independent, and therefore capable of representing a broad spectrum of companies. That means that they are free to choose the tool that they believe will provide the most economic value to our clients, from a quality manufacture, based on a specific job that needs to be accomplished.