Wednesday, September 19, 2018

Generations X, Y and Z: Are You Ready To Manage Great Wealth?













By Willie Thomas Butler, LPA

No Longer Just Passbook Savings Accounts

If you watch TV, cable, read newspapers, magazines or simply cruise Internet websites, then you know how your generations are being marketed as future wealth management clients.  That’s right.  Every bank, brokerage firm and financial services company has you in their sights as the generations to appeal to for the next thirty years.

Why, you might ask?  According to a recent article on the next great wealth transfer in America, author Phillip T. Tobin says that “Americans are currently experiencing the greatest transfer of wealth in history, and many may be unprepared to successfully navigate it.” 

He goes on to say “The statistics paint a picture: An estimated $59 trillion will pass from an aging generation to younger generations by 2061, including $21 trillion destined for charities. At its peak between 2030 and 2045, 10 percent of the total wealth in this country is expected to change hands every 5 years. This massive transfer of wealth between generations presents significant challenges for the parents or grandparents who now own this wealth, the heirs and charities who will be beneficiaries of transferred wealth, and the professional advisers who will guide their clients through this transfer and ideally remain as trusted advisers to the heirs after the wealth eventually transfers.

Navigating through today’s Financial Landscape

For those of you in Gen-X, you no longer have to imagine what a significant transfer of assets could mean to you at this stage of your life.  Unfortunately, some are experiencing the loss of parents due to early death or severe illnesses such as Alzheimer’s disease well before they or their parents are old.  Others may have become recipients of what a grandparent has set apart for them at their death.  And, unless you were ready for what followed, that being unexpected financial responsibility, you may have found yourself ill-prepared and even loss some of the benefits of inheritance.

On the other hand, if your family is the type that shares all confidential information including any documentation involving the family finances, you are quite fortunate.  Why?  Because as many have learned in their brief season of navigating through budgets, savings, debt and spending, without some guidance, the financial landscape can be daunting.  In fact, you could be the type that wants nothing to do with managing finances, but you want all the benefits of lavishing in it.

Discover Your Financial Profile

In my book, “The Kingdom Life Approach: A Purpose-driven Strategy for Living Your Best Life,” I describe five money managers types which coincide with examining ones’ financial bent or leaning using EQ or Emotional Quotient to Money Management.  “Because emotions play a huge part in everyday decision-making, we must become self-aware of how they affect us as we endeavor to serve God, our family and each other.”  This is important because one of the most basic lessons to grasp about your role as a future wealth or money manager is that none of it belongs to you.

We are now at the intersection of life where believing in God and accepting Jesus Christ as Lord makes all the difference in how you should approach wealth and money management.  Simply stated, the Bible teaches us that the earth and everything in it—including you—belongs to the Lord. (Psalm 24:1)  This means that even though our tendency is to think that whatever we possess we have every right to manage it however we please, we don’t. 

A key word to remember on this subject of wealth and who owns it is the word stewardship.  For our purposes going forward, start to see you as a steward, that is, God’s resource manager on earth who manages things on His behalf.  Adopt this view and you will have no problem in managing money in the future.

The Five Money-Managers

This leads us to the task of identifying how you might align with the function and characteristics of one of these five manager types.  This is important because it will help you determine what type of financial advice and support you should seek starting today.

Most individuals will see themselves as closely aligned with and practicing money management from one of the following mindset: 

  1. Hubristic-    Many believe the world and everything in it belongs to them.
  2. Irascible -   Make decisions that are overshadowed and influenced through anger.
  3. Apathetic-   Much too easy-going and carefree to commit to money management.
  4. Avaricious- Lustful, greedy and covetous in wealth and money matters.
  5. Kingdom-    Seeks first and foremost to serve the Kingdom of God in all ways.

Additional information for each of these can be found in my Kingdom Life Approach book, available through Xulon Publishers, Amazon and other online bookstores.  While this approach to becoming wealth and money managers may seem different, it is, nonetheless, a necessary step in preparing to manage significant wealth either amassed or inherited. 

Only One Master Can Be Served

There is the world’s way of viewing money and traditional wealth management strategies, and there is a financial management process that God has designed for those who serve in His Kingdom.  If you profess to be a Christian, than that is you.  Remember, that the Bible warns us against serving two masters, citing Mammon as the other focal point of our worship.  Wealth and managing money or, worst yet, working, scheming and living solely to amass as much money as you can is not God’s plan for any of us.  This is why He warns us that “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. ... You cannot serve both God and money”.(Matthew 6:24-NIV).  So, let the buyer beware!

Choosing to serve God’s kingdom in the earth is choosing to allow the Lord to make most, if not all, financial decisions.  After all, He is the source through which you are going to be blessed with wealth in this life, and He understands that you may need counsel to help you manage what is entrusted to you.  So, remember, it belongs to God, and He allows you to exercise use with some discretion.  However, He knows what He wants to do with what He makes available to you, and you must learn to seek Him before spending it to find what He plans for His resources.

Wealth Transfer is for Kingdom Service

Proverbs 13:22 teaches parents to set aside an inheritance for grandchildren and not just their children.  So inheritance is also commanded by God for the sake and well-being of those left behind.  Not only is there a secular forecast that a massive transfer of wealth will inure to Generations X, Y and Z, but there have been Christian prophecies for the past decade that God will be orchestrating a mass transfer from the world’s repositories to the Church, which is you and me.  So we have multiple reasons to hear the clarion call to prepare.

Inheritance can empower a beneficiary to achieve many things they would otherwise never do, and the Lord certainly knows and understands this too.  However, keep in mind that inheritance can help someone plan their future, care for loved ones, provide charity to those in need and financially underwrite the preparation of those called to fulfill their life’s purpose. 

Let Us Help You Prepare

Because of how important this instruction is to you, do not just choose any financial adviser or wealth management firm that says they can manage your money for you, but search for those who are Christian and Kingdom-centric who understand that any education and management training must incorporate God’s plans and instruction.  Again, remember Psalm 24:1 which says that “The earth is the Lord’s and the fullness thereof; the world and all that is in it.”  So let’s choose to honor Him!  And, may the Lord bless your efforts to serve Him first and always…


Willie Thomas Butler  is Founder and President of Kingdom Seed Foundation (KSF) and The Life Planning Institute (LPI), in Norfolk, Virginia.  An ordained minister and associate pastor, Butler is author of several books available in online bookstores, such as Google and Amazon Books, and creator of The Kingdom Life Approach Ten-Week Course.  For more information, please visit www.MyLPI.org.    Also, for practical insights in Biblical Stewardship and wealth management strategies, please visit our other blog titled LifePlanning Institute at Blog.MyLPI.org.  

References: 

1)  Wealth Management.com Article- Ten Questions to Help Families Navigate the Great Wealth Transfer, by Phillip T. Tobin (September 19, 2018):

2)      The Kingdom Life Approach: A Purpose-Driven Strategy for Living Your Best Life Ever (2012), by Willie Thomas Butler

3)      The Holy Bible Scripture References




ENDING THOUGHTS:

  1. Is this helpful? Please let me know in the comments below what you’d like to watch and read more of.

  2. Do you know someone who will find this conversation just as interesting as you? Take a second and use the social buttons below to share it with them. I create these blog posts and videos for you, and your closest friends.
________________________________________________________________________



 Sign-up for our eNewsletter



Copyright © 2014 | LifePlanning Institute, Inc. | All Rights Reserved.

Thursday, June 28, 2018














               Will Having $Trillions of Dollars More Help You In the Future?

June 28, 2018

In March of 2018, realdaily.com ran a online report that similarly run by UBS in June of 2017, which stated that the millennial generation could be worth as much as $24 trillion in three years' time, or by 2020.   “The wealth of this demographic group, now roughly ranging in age from 21 to 35, is driven by inheritance, entrepreneurial activities and income gains” according to UBS.  “That’s roughly 1.5 times the size of the U.S. economy in 2015” the bank said.

I recall reading a similar report in the eighties about the Baby Boomer Generation; how we would be inheriting—it was thought—about $42 trillion based on assets accumulated and transferring from our Post-WWII “Silent Generation” parents.  They were considered to have been the most industrious and frugal of past generations and would pass on to their heirs homes, investment property, savings bonds, cds and investment securities and, in some instances, good old fashion cash (or gold) because many were leery of banks or brokerage companies after the Great Depression.

Past Not Always A Predictor of the Future, However…

My reason for mentioning my generation’s experience with generational wealth transfer is a cautionary tale.  Why?  Because so much of these forecast were way off base.  Our actual distributions and transfers were sometimes mired in the cost to liquidate or convert tangible assets and real property into cash or other investable instruments that would earn much higher annual returns.  So, for some of us, while inheriting our parent’s home were intended to be a God-send, sometimes there were costs associated with the transfer, sale or attempt to fix up an old property that significantly reduced what actually transferred.

Be Pro-Active If Possible

In short, the warning here is to think through your potential inheritance, and if you can assist in making the proper transfer today for an inheritance many years in the future, please seek expert counsel and get help.  For not every inheritance comes free.

Take the Baby Boomer whose aging parents are still alive today.  Now in their nineties and, if fortunate, living independently of their children or grandchildren.  In about 35% of cases, Boomers are caring for their aging parents in their own homes, some of whom have only Medicare as health coverage but need financial assistance every month.  And, being the moral society we are, the same Boomers might still be supporting their own children—now in the 30’s and 40’s—also living in the same home.  We called this being “The Sandwich Generation.”

Can the same thing happen to Millennials as happened to Baby Boomers?  Can anyone really predict or forecast the outcome?  Probably not…however, there are key differences in the administrative oversight and pre-wealth transfer process that Millennials can exercise.  And there are many healthcare related improvements and home design changes that can accommodate many of the inevitable outcomes that aging populations need, issues that can have direct impact on successor generations. 

In the realdaily.com article, it predicts that Millennials will receive this $24 trillion wealth transfer from the following sources and changes in lifestyle:

 

1)   Millennial wealth will come from inheritance, entrepreneurial activity and income gains.
2)     Expect growth in impact investing as Millennials focus in on sustainability.
3)  Millennials already make up half of on-demand consumers, compared to 22 percent for those ages 55 and older.

Millennials are expected to be quite industrious spurred through entrepreneurial initiatives which have produced many technological advances and a heightened sensitivity to environmental concerns and their desire to live high quality lives.  These are all great goals and they give evidence that Millennials will not be standing idly by waiting for financial handouts while their parents are still living, although Lifetime Gifting strategies have been a major estate planning and generational wealth transfer technique promoted for decades. 

Compassion and Knowing Each Other Matters Greatly

Millennials, be aware of what lies ahead both in law and, most importantly, in the hearts of your loved ones.  More than structuring things to be executed with legal and accounting precision, hearing for what the aging person wants to truly accomplish through their estate is vitally important.  This is the last opportunity for some individuals to feels as if their life-long contribution has made a difference.

Your Efforts Can Begin Now!

Some financial and legal aspects of generational wealth transfer can be arranged today while both the Grantor and Beneficiary or, in some cases, the Trustee(s) or Executor/Executrix can still sit together and discuss a Grantors wishes and concerns.  To accomplish this, I recommend the following:

1.   Contact a mutual third-party such as a financial planner, attorney, accountant, etc. who can mediate between all parties towards any future arrangement.
2.  Consider the aspirations and desires of the Grantor (or person(s) leaving the inheritance) and make certain to include them in any legally binding agreement that is recommended by your financial or legal professional.
3.   Attempt to discover all potential wealth transfer assets and in whose name and possession they might currently be held.  We consider this “taking inventory,” and it is a critical step if any type of trust document is recommended.  One reason being that for a trust to be a viable estate administration tool, it must contain (and control) assets that are either titled to it or stipulated as an asset being retitled to the trust.  Believe me, there are many war stories about unfunded trust having to be decided by courts ultimately as certain jurisdictions do not see the trust document has having any legal force.  Instead, the estate may be subject to Probate.
4.       Since today’s technology can provide a means to record and permanently document anyone’s estate or even their Last Will and Testament, I would strongly recommend you consider this strategy.  Kept in the hands of a legal professional or any other place where it will remain secure and protected against—possibly even in today’s Internet based storage clouds, could prove useful.  That is, of course, only possible if a second copy is stored with your legal advisor.
5.  Once all interest have been codified and any necessary paperwork has been developed, signed and secured, then and only then can you begin to schedule meetings to periodically review the estate plans made and make any adjustments required by the grantor(s), your legal advisor or changes in the law relating to estate accumulation, transfer and distribution.

With so much changing in the areas of finance and law and the policies that govern them, it is always wise to keep abreast of these activities or to know and trust others who do.  Here at the Life Planning Institute, Inc. (https://www.MyLPI.org) and Heritage Wealth Management Group, Ltd, that is our specialty.  So, feel free to contact us for any assistance.Text Here!!
Willie Thomas Butler  is Founder and President of Kingdom Seed Foundation (KSF) and The Life Planning Institute (LPI), in Norfolk, Virginia.   Butler is Director of Financial Planning with Heritage Wealth Management Group in Norfolk, VA.  He is a 25 year financial planning and investment adviser and author of several books available in online bookstores, such as Google and Amazon Books, and creator of The Kingdom Life Approach Ten-Week Course.  For more information, please visit www.MyLPI.org.    Also, for practical insights in Biblical Stewardship and wealth management strategies, please visit our other blog titled LifePlanning Institute at Blog.MyLPI.org

ENDING THOUGHTS:

  1. Is this helpful? Please let me know in the comments below what you’d like to watch and read more of.

  2. Do you know someone who will find this conversation just as interesting as you? Take a second and use the social buttons below to share it with them. I create these blog posts and videos for you, and your closest friends.
________________________________________________________________________



 Sign-up for our eNewsletter



Copyright © 2014 | LifePlanning Institute, Inc. | All Rights Reserved.

Friday, June 10, 2016














    They Say "Financial Worries Cloud Optimism."  Is This True For You Too?

  By Willie Thomas Butler

As we approach the mid-year point of 2016, Americans are still skittish about getting back into the stock market, buying large ticket items such as homes and cars, or of incurring more debt through student loans or credit card use.  In one sense, this could prove a good thing long term.  Americans have had one of the world’s lowest personal savings rates among highly industrialized nations.  During our Great Recession (2009 – 2013) our savings rate did climb slightly almost hovering around 5.5 percent.  But, it did not last as the economy—based on increased jobs creation—seemed to signal that spending is okay again.

Don’t Sing “Auld Lang Syne” Just Yet!

On the other hand, perhaps we are not done with the most obvious object-lesson, namely, that your lifestyle should not outpace your budget, assuming you have one.  Rather, your budget should help you form an appropriate lifestyle with realistic spending, saving and investing goals.  Otherwise, the return to a much happier time economically may never materialize, at least to some.  Here’s why.

“Based on this latest survey from Northwestern, it seems Americans’ money worries aren’t going anyway anytime soon.”  And, last year, the Pew Charitable Trusts surveyed 7,000 households and determined that "financial worries cloud optimism." Only 21% of those surveyed by Pew were planning to retire and 36% said their households had no savings.

“Our findings show that despite a steady economic recovery, many Americans continue to feel vulnerable,” Erin Currier, director of Pew’s financial security and mobility project, said in a statement when the survey came out in March 2015. “Many worry about their finances, and record numbers — more than 9 in 10 — say it is more important to them to achieve financial stability than it is to move up the income ladder.”

In fact, the last recession has been so impactful in altering traditional optimism after a long protracted period of no growth or significant change that many have settled on simply hoping to keep their head above water.  After all, it only takes one major repair or health-related expense to put many Americans in a difficult financial bind.  And, the older you get, particularly as you become a Social Security and fixed income recipient, the tendency is to hope and pray all the more for no calamity or unexpected issue to arise that requires the household budget revert to “robbing Peter to pay Paul,” so to speak.

The Most Constant Event In Life Is Change

So, what amount of optimism should we seek and embrace given these statistics?   Are there scripture verses that might encourage an individual to have faith in a God that cannot fail us?  Or, does the average person need something more than good spiritual inspiration?   Could people everywhere actually be witnessing and experiencing something more than a lack of optimism toward future financial security and their economic outlook? 

Our next article will address both obstacles and opportunities for the remainder of 2016 and beyond.  Remember, the two will always co-exist, but that does not mean that opportunities won’t outweigh challenges.  It is all in the perspective that one embraces. 


ENDING THOUGHTS:

  1. Is this helpful? Please let me know in the comments below what you’d like to watch and read more of.

  2. Do you know someone who will find this conversation just as interesting as you? Take a second and use the social buttons below to share it with them. I create these blog posts and videos for you, and your closest friends.
________________________________________________________________________



 Sign-up for our eNewsletter



Copyright © 2014 | LifePlanning Institute, Inc. | All Rights Reserved.