A Life Well Planned - Episode 1: Navigating a Windfall

In the inaugural episode of "A Life Well Planned," we journey back to the year 2000 to meet Megan and Josh, a young couple navigating life's financial challenges. When Megan inherits $250,000 from her grandmother, they face crucial decisions that will shape their future. Join them as they seek guidance from financial advisor Andy at Raymond James, exploring their goals, dreams, and the importance of smart financial planning. Discover how they aim to build a prosperous future while avoiding the pitfalls of financial trends and market volatility. Start your own journey to financial success with Megan and Josh in this engaging episode.

Transcript

Opening MUSIC --

MUSIC transition --

Narrator: Looking to pass down some of your hard earned wealth? Just beginning to invest and looking to provide the best life possible for you and your family but don’t know where to start? Are you looking to create a road map to your retirement? Then you’re in the right place. Welcome to “A Life Well Planned,” the Raymond James podcast that follows a family just like yours as they plan out a smart and savvy financial path to a prosperous future.

Sounds of crowds CHEERING from a NEWS CLIP...

We hear the crowd counting down as the ball drops on New Years Eve.

DICK CLARK: 5... 4... 3... 2... 1, Happy 2000!

REPORTER: Y2K Watchers have a lot to say today...

GOVERNMENT OFFICIAL: The information centers and government agencies worldwide are reporting normal operations for critical systems in areas such as power, telecommunication, finance, and transportation. We hear WEDDING BELLS and CHEERING --

Int. Megan and Josh's apartment.

Narrator: Meet Megan and Josh. The year is 2000 and these two college sweethearts have just tied the knot. Like many young couples, they’re learning how to navigate sharing their finances, which as you might know, isn’t always as easy as we think. Recently Megan has been mourning the death of her grandmother Rose, and is wondering what to do with the $250,000 in inheritance money she’s received. This is a once in a lifetime opportunity, and the decisions they make now can effect their family decades down the line. How will Megan and Josh decide to better help themselves and their future family? Find out now, on “A Life Well Planned.”

We hear the voices of Megan: and Josh: (late 20s).

Josh: How’re you feeling?

Megan: You know. Still kind of processing everything.

Josh: Yeah. I get it.

Megan: I guess we should talk about the money...

Josh: Yeah, I mean. I don’t know what the smartest thing to do here is.

Megan: Well, I guess we can start seriously thinking about buying a home.

Josh: Yeah. So does that speed up or slow down the timeline for kids?

Megan: I mean, I don’t want to wait too long... Maybe we should talk to a financial advisor. My dad always liked the guy he has, at Raymond James, I think? Maybe I’ll give him a call.

Josh: That’s a good idea. I don’t know have a clue when it comes to this stuff.

Megan: Oh, I know.

Josh: Hey!

Megan: I’ll just call him now. He could probably use someone to talk to anyway.

Josh: Well when you call your dad, tell him it was definitely not me who threw out the chicken.

Megan: Are you seriously still thinking about that?

Josh: He was very upset! I need you on my side here.

Megan: (on phone) Hey dad? How you doing? Yeah... Yeah. I know. Well, we were just talking about what to do with grandma’s inheritance, and I wanted to ask you about your financial advisor. Oh, and also to tell you it was definitely

Josh: who threw out the chicken.

Josh groans.

Int. Raymond James offices.

We hear the voice of Andy (early 30s).

Andy: Megan and Josh?

Megan: Andy, hi, nice to meet you.

Josh: Pleasure to meet you.

Andy: Please, come in. So your family works with Bill?

Megan: Yes, they’ve been with Raymond James for years. They’ve always been really happy here.

Andy: That’s great. Bill’s my mentor. He taught me everything I know about finance, and I taught him how to use email.

Megan: and Josh: chuckle.

Josh: I’m still working on my parents with that one. The dial up sound scares my mom.

Andy: I understand your grandmother passed away, Megan: . I’m so sorry for your loss.

Megan: Thank you. She was old, but it was still rather unexpected... Anyway, we’ve had, sort of a windfall, I guess you could call it, with her inheritance. Josh: 250,000.

Andy: I see. Well I can see why you’d want to come in, it can be difficult navigating this stuff. So in this meeting I’d love to just ask you some questions about what you’re hoping to achieve and see if I might be able to help. Everyone has different circumstances and expectations from a financial advisor, so it’ll be really helpful for me to just learn a little bit more about you.

Megan: Sounds good to us.

Andy: Great. So why don’t we start off by talking about what some of your life goals are. It’s a big question, but where do you see yourself in the future?

Megan: Long term or short term?

Andy: Both. Let’s say the next five years for now.

Josh: We’d like to buy a home, we’ve been talking about it for awhile.

Megan: And we’re looking to start a family.

Josh: But we’ve also thought about maybe starting a business one day?

Megan: And we really need to start saving for our retirement.

Josh: Not to throw too many things on the table.

Andy: Not at all. Those are all great goals. Why don’t I ask you a couple more questions so I can kind of wrap my brain around what’s best for you. You’re both currently employed?

Josh: Yep. I work in IT at a bank.

Andy: So Y2K must’ve really kept you up at night.

Josh: I don’t want to talk about it.

Megan: I’m a vice-principal at a private school.

Andy: That’s great, and if you don’t mind me asking, what are you both currently making?

Megan: I make $70,000 a year.

Josh: And I make 65-ish.

Andy: Alright. And do you plan on that being the case for awhile?

Megan: That’s the plan.

Josh: You know, who knows. I’m kind of dying to get out of there. Which is where the business may come in.

Andy: Do you have an idea what kind of business?

Josh: Well, it’s sort of a pipe dream.

Megan: But, an achievable pipe dream, I think.

Josh: We’ve always talked about selling coffee. Opening a shop, but also maybe selling our own brand of beans.

Megan: We’re kind of coffee fanatics.

Andy: Hey, I’ll be your first customer. No one is allowed to be near me until I’ve had a least one, preferably two cups. And you said you want to have kids as well?

Megan: We do. One or two.

Josh: Maybe more.

Andy: Great. Well now that I have a sense of where you’d like to go, let me tell you a little bit about what I do. I want to help you achieve the success that you define as success. Not the things that other people consider success, or the government thinks is success, but your dreams of success specifically. The actual investment management, wealth management is really only about 20% of what I do. The rest of what I do is all kinds of other ancillary services. Insurance needs, tax needs. Analysis is understanding what the client needs, because we meet the clients where they are. We help them to find where they want to go, and then we build the scaffolding to get there, using the financial tools and acumen that we have.

Megan: That sounds like just what we’re looking for.

Andy: Great. We tend to work best with families and small businesses, people sort of just starting out like yourselves. If starting a business was the route you wanted to go, that’s our area of speciality. And then hopefully if we work together in the longterm, I’ll have more tools at my disposal to pull certain levers for you, whether that’s tax, or insurance, or trust. I’ll always be learning and growing, too.

Megan: It’s really a long journey, huh? My dad did always say that time is the most important thing when it comes to saving.

Andy: Absolutely. We’re young, so there’s no better time to get ahead on planning. Because a lot of us don’t. Or, a lot of us, in a situation like yours might make a risky decision and end up losing more than they started out with. And my role is to help you avoid that.

Josh: Sounds like Dustin.

Megan: Yeah. Dustin is my brother, he made a lot of money very quickly with the .com’s and then...

Josh: Poof. All gone.

Andy: And there are going to be so many things like that throughout our lifetime. Trends that will be really tempting to jump on, but I’ll help figure out what’s best for you and not what might be what we call a cocktail party stock.

Josh: Cocktail party stock?

Andy: So if I’m at a cocktail party and say I’m a financial advisor, people might wander away and be more interested in talking to say, a dentist at the party. When everyone would rather talk to the dentist, that might be a good sign the markets about to turn up...

Josh: So... we like cocktail party stocks.

Megan: Let him finish.

Andy: So then say the market is up 30, 40% compared to where it was at the last party, everyone is talking stocks, and suddenly people are asking for advice, or even giving me advice.

Megan: The dentist is now giving the financial advisor stock advice.

Andy: Exactly. That’s a pretty tell tale sign the market has reached a peak and is due for a downturn. So my job for my clients is to stay away from the fads and always keep our eyes on the horizon.

Josh: So never talk stocks at a party in order to avoid a recession.

Andy: That’s all just to say markets change over time, what type of investments we use today, whether defensive or cyclical, may not be suitable for the future. We’re always evolving our asset mixes based on the economic indicators and trying to anticipate future potential needs for our clients. Like we’ve said, it’s a long, and sometimes complex process with ups and downs. I won’t say it’s going to be sunshine and daisies. But just like how markets are always changing, we’re always changing too. I’m going to be constantly learning how to best serve your interests though both good times and rough patches.

Megan: So how often would we typically meet?

Andy: It depends, but I like to do a quarterly review, or a semi-annual review. A little more frequently in the beginning. But I would call and tell you things like when your portfolio comes in the mail.

Josh: Sounds like a pretty consistent conversation.

Andy: I’d say so, but I also stay out of my clients’ hair as much as possible. Money is freedom. And a big part of that freedom is not having to worry about it all the time.

Megan: That’s the goal, right? So what are some things we can be doing now, especially if kids are on the way?

Andy: Let’s see. Do you know what your company’s maternity policy is?

Megan: I think it’s twelve weeks.

Andy: I ask because sometimes these are the kind of things that will pop up over time. I know when my wife and I were having our son we were lucky that her company had a pretty generous maternity policy and we didn’t end up losing any income during that time, but that’s not always the case. One thing that might be good to talk about right off the bat might be RRSP’s.

Josh: What are those?

Andy: An RRSP is a Registered Retirement Savings Plan.

Josh: Oh, right, I knew that. (to Megan: ) What? I did.

Andy: So it’s a retirement savings plan that you establish with the government. I like to think of it as a kind of tax deferral box. Whatever is contributed grows tax free. Until you retire, access the money and then take it out. When that happens it converts to a RRIF and the income is taxable, at your new and lower income level. So really, its a tax deferral tool. It doesn't eliminate tax, it just defers it until you are in a place to use it. It’s about getting your money to work for you.

Megan: Well, that sounds pretty good.

Andy: And if you have an accountant we can work directly with them, and if you don’t have one, I can recommend some really excellent ones. Basically, my role for my clients is to help maintain and grow your investments with the least amount of risk. And, you know, we all have different risk tolerances.

Megan: I would say neither of us are very risky.

Josh: But it is alright to be a little riskier in your investments when you’re younger right?

Andy: Well, yes and no. Like I said, now is the best time to get started. But sometimes people make the mistake of getting a little too risky when they’re younger, and I want to try and protect your finances now as best as we can. Honestly, one of my biggest goals is not just growing your wealth, but making sure you’re keeping what you’ve earned. We’re looking for slow and methodical growth. So, a house, kids, and a coffee business. In that order?

Megan: I think so, yes.

Josh: Money really makes you have to sort priorities, huh?

Andy: That’s a good way of looking at it, Josh: . I get that these are personal questions. You don’t need to know right now exactly how may children you’re going to have.

Josh: Thank God.

Andy: But these are all good things to factor into your longterm plan.

Megan: What about life insurance? I’ve been meaning to look into it and keep forgetting.

Andy: Good question. You’re at a point where you can get a very cost effective life insurance policy. In order to protect your income and preserve your wealth for your family, life insurance might be a great consideration. There’s lots of insurance products out there. I can help navigate which ones might be appropriate for you. You’re young, healthy, it’ll be much more affordable now and could include Life, Critical Illness, Disability. And if you’re considering a mortgage, we should talk about a life policy that would be an alternative to buying bank mortgage insurance, because that's a group product, and the fees go up every year. Whereas we can lock in the price today and match it to the term of your mortgage.

Megan: So it’s more affordable that way?

Andy: Exactly.

Josh: So, and I’m sorry if this is a stupid question.

Andy: There really are no stupid questions here.

Josh: So, back to the inheritance, say we take 100,000 of it to put into a down payment on the house, what could a mortgage for us look like?

Andy: Sure. So one thing I like to do is just breakdown what a mortgage actually is, right? It’s a contract between you and a financial institution, that allows you to make a large purchase, you typically enter into a contract that comes in five-year terms, so you’re agreeing to pay a set amount of interest for that loan in that given five-year term. There’s variable rate loans, fixed rate loans. There can be opened or locked mortgages, but it’s effectively a contract where the bank holds your house as collateral for the mortgage you pay off in a 25 year term.

Josh: Got it.

Andy: Do you know what your price range for a home might be?

Megan: Let’s say 500,000.

Josh: Could we put down 125,000 now, if we found the right place?

Andy: Quite possibly, if that’s the plan you’d like to make.

Josh: So it’s all about planning, huh?

Andy: I’d say so.

Josh: Good thing my wife is such an amazing planner.

Megan: Speaking of planning, what do you recommend for retirements savings, beyond the RSP’s?

Andy: Well, there’s lots of things we can discuss. Stocks, bonds, mutual funds. These are all great considerations and we would want to put together a proposal for you on what asset mix, risk tolerance, and time horizon would be for you.

Megan: Right, my dad was recommending mutual funds.

Andy: Mutual funds are great because there’s so many to choose from, and they can really diversify and balance your portfolio. A mutual fund is another type of box where investments are put into, and you as an investor buy a unit of that box, essentially. It has 100 to a 1,000 different individual securities in it, and the fund manager manages all of them. So you’re essentially buying someone else’s portfolio. But we look at all these things together. Because you may own a company someday and sell that, we factor that in to your entire retirement picture.

Josh: How about companies to invest in? I know you said not to follow fads, but is there anything you recommend for longterm investing?

Andy: Yes, I’d probably encourage you to look into investing in essential services. No matter what the economic climate, we have to turn our lights and heat on. And often times when you invest in companies like that you’ll get paid a dividend too, which allows you to keep up with the cost of inflation.

Megan: It’s a lot to think about. Is there anything we missed?

Andy: Well, we haven’t talked about taxes yet. Of course, no one likes to talk about taxes, but it is one of the easiest ways to make money, if you understand them right. I can help you figure out where you can save money, or exercise tax credits, and use that as part of your financial plan. Basically, I’ll always be trying to make sure you’re keeping what you’ve already earned.

Megan: So I guess my last question would be, why Raymond James? Beyond my dad liking Bill so much.

Andy: Great question. One of the critical things about Raymond James that makes me proud to work here is that the firm doesn’t dictate specific investment vehicles. That means that myself and my team can assess every client as to their own particular needs, risk tolerance, all the things we talked about. They allow me to expand my horizons and create a portfolio and plan that best suits my clients. A lot of financial planners and banks have a very one direction, cookie cutter plan for their clients. We’re not a product issuer, for example. There’s no “one-size fits all” way to invest. At Raymond James, we understand everyone’s needs are different, and I have the freedom to stay flexible and agile as circumstances in your life or in the market change.

Josh: So I guess my question now is, where do we start? Like, what is the thing we do when we walk out of this office?

Andy: Well if you like what I’ve told you so far, we can set up another meeting and have some deeper conversations about moving forward. So if you’d like we can get you in sometime next week for some paperwork. I know you’re eager to figure out what’s best to do with your inheritance, so while you’re deciding on buying a home, we can put some of that in a term deposit and you can make some interest in the meantime.

Josh: Well, that would be great.

Andy: I also just want you to know that if we do end up working together, I will always be just a phone call away. Bill taught me the best financial advisors are accessible to their clients no matter what. So if you have a question, feel free to give me a call, and if I don’t know the answer I can find someone who does.

Megan: That sounds great. I guess we have some decisions to make.

Andy: Well, I’ll be right here when you need me.

Int. Josh and Meghan's car.

We hear the sounds of driving.

Josh: He seemed cool, I like him.

Megan: Yeah. He seemed to get where we were coming from.

Josh: So, house first, right?

Megan: Yeah. Let’s start looking this weekend.

Josh: Hey, there’s a sign in front of that house right there. Maybe it’s a...

Megan: A sign?

Josh: Yes.

Megan: I did always love that place.

Josh: There should be a pen in the glove compartment, I’m gonna turn around and get the number.

Int. Open House

We hear murmuring as people look around the house.

Megan: Look at this staircase.

Josh: You gotta go check out the master bedroom.

Megan: This is the best one, for sure.

Josh: And it’s in our price range...

Int. Josh and Megan's car

We hear the car doors open and close, the engine starting.

Josh: I know we just started looking but -

Megan: I want to make an offer.

Josh: Wow, really? That’s very... spontaneous of you.

Megan: It’s not spontaneous if it’s all part of the plan.

Josh: Well let’s give Andy: a call and see what he thinks.

MUSIC CUE --

Narrator: Join us in the next episode as we see how Megan: and Josh: ’s plan is turning out. Will they purchase a home? Will they start their coffee business? How will this unexpected inheritance change their lives? Find out next time on “A Life Well Planned,” wherever you get your favorite podcasts!

About Raymond James

Raymond James Ltd. is regulated by the Canadian Investment Regulatory Organization ("CIRO") and is a Member of the Canadian Investor Protection Fund. 3Macs, MacDougall, MacDougall & MacTier and Raymond James Correspondent Services are divisions of Raymond James Ltd. Raymond James Ltd. is an integrated financial services firm. Its subsidiaries, Raymond James Investment Counsel Ltd., Raymond James Financial Planning Ltd. and Raymond James (USA) Ltd. are not regulated by CIRO and are not Members of the Canadian Investor Protection Fund. Raymond James Ltd.’s trust services are offered by Solus Trust Company ("STC”). STC is an affiliate of Raymond James Ltd. and provides trust services across Canada. STC is not a Member of the Canadian Investor Protection Fund. Please consult each subsidiary’s webpages for applicable corporate, regulatory or membership information.

Disclaimer: This podcast is for informational purposes only. Statistics and factual data and other information are from sources Raymond James Ltd. believes to be reliable, but their accuracy cannot be guaranteed. Information is furnished on the basis and understanding that Raymond James Ltd. is to be under no liability whatsoever in respect thereof.

It is provided as a general source of information and should not be construed as an offer or solicitation for the sale or purchase of any product and should not be considered tax advice. Raymond James Ltd. advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters.

Securities-related products and services are offered through Raymond James Ltd. member of the Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Limited, which is not a member of the Canadian Investor Protection Fund.

Certain services mentioned in this series such as mortgages are not offered by Raymond James Ltd. due to Regulatory restrictions and are provided for information purposes only.

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