The Money Doctor

DECEMBER 21, 2018 AUGUSTAMEDICALEXAMiNER

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THE MONEY DOCTOR

THE VALUE OF A ROAD NOT TAKEN

The holiday season is full of excitement and anticipation as we plan and participate in the holiday events and festivities. This is also a time for reflection on 2018 and preparation for 2019. As you are doing this, I would encourage you to revisit the poem by Robert Frost, “The Road Not

Taken.” The final three lines in the poem say, “Two roads diverged in a wood, and I – I took the one less traveled by, and that has made all the difference.” The poem and those famous final lines hold many lessons and insights that can be applied to your personal financial situation. Let’s start with things to consider as you are reflecting on 2018.

As you reflect back on 2018 or other years, you can probably identify some major life decisions that you have made. These decisions resulted in roads not taken. The poem is very accurate as it describes what happens to those road not taken, “Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back”. We typically do not go back and revisit that road not taken. However, we have found that revisiting decisions or roads not taken is often a valuable exercise.

When reflecting on your decisions, one of two different

feelings or conclusions are normally reached. The first is a feeling of satisfaction or job well done. People have said to us, we are so thankful we decided to downsize the house before retirement, or taking that extra vacation with the kids before they all went to college meant so much. The other feeling you may experience is regret or a decision not turning out as well as you expected. It is important to reflect on those and not beat ourselves up, but use those feelings to try and make better decisions going forward. One example is a couple that recently purchased a home. The next month they had six large trees fall down near their house from a large storm. During our conversation, they noted that they had an exclusion on their home insurance that would not have covered the damage if the trees had fallen on their house. The exclusion reduced the cost of the policy, but they realized that the risk of the road they took was not

worth the short-term savings. They decided to go back and update the policy.

So, how do you measure the value from expertise and guidance that helps you navigate the forks in the road? That is probably one of the hardest concepts to explain to people as they are considering working with a financial planner. The natural way to perceive value is by looking at things that are easy to measure and see such as investment returns and account balances. As part of the financial planning and risk management discussions you should be having across your entire financial plan, a good financial planner may recommend that you purchase additional insurance or spend money for estate planning documents. Tax planning is another good example, in low income years creating taxable income with Roth conversions or IRA withdrawals (if over 59.5 years old) to fill up the lowest tax brackets can help

you pay less tax over your lifetime although it seems counterintuitive.

Our natural tendency is to avoid doing things that feel counterintuitive, which often times puts us on the road that is most traveled. We end up following the herd or missing opportunities unique to our situation. It is hard because you may not know the right questions to ask or consider when you are at the fork in the road. We have found that reflecting on the roads taken (or not taken) and seeking guidance from qualified experts will help you find the road less traveled or even find a road you did not see, and to paraphrase Robert Frost – that can make all the difference. +

by Clayton Quamme, a Certified Financial Planner (CFP®) with Calvary Wealth, LLC (www.calvarywealth. com). Calvary Wealth is a feeonly financial planning and investment advisory firm with offices in Augusta, GA and Columbia, SC.

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