Humility is Central to Success

People are living longer – that’s a fact. Unfortunately, all those additional years aren’t always spent in optimum health. With longevity comes the complicated question of how to pay for the necessary health care for those additional years. Costs for unexpected and long-term chronic care are rarely covered by Medicare. People are having to face these costs on their own. Thankfully, the right type of planning can make this task less daunting.

Long-term care can be an overwhelming topic. The statistics are sobering. 52% of people turning age 65 will need some type of long-term care services in their lifetimes, and 14% will need long-term care for longer than five years. With the median annual cost of adult day care averaging $18,200 and assisted living facilities at $45,000, the financial implications can be staggering. It can sound like a complicated topic, but the way to protect you really boils down to three options.

• Self-insure: This is the option that many select by default because they don’t want to think about the possibility of illness creeping into their future. It’s a scary option, which they hope won’t happen to them. However, this option typically leaves them unprepared for the medical costs that eventually do occur.
• Long-term Care Policy: This is a good form of financial protection as it covers your risk but won’t wreck your financial plan. However, the down side with such a policy is that if you don’t use it, you lose it.
• Accelerated Benefit Riders (ABR’s): Lastly, you can invest in life insurance you don’t have to die to use. These riders in your insurance plan will allow you to receive your benefits prior to death due to terminal, chronic or critical illness. The ABR’s will cover your risk, and you’ll still receive the benefit if you don’t need to use it for long-term care purposes.

Now, there is no one-size-fits-all solution. It’s always best to meet with your trusted financial advisor to find the right option for you. Just know that when you do take the time to plan ahead and find the right option for your particular situation, you’re not only providing for your future but also your peace of mind as well.

[i] https://www.morningstar.com/articles/879494/75-must-know-statistics-about-long-term-care-2018-edition

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Over the course of hundreds of conversations with clients, I’ve found that quite a few them have wrestled with the idea of whether they should go back to school for an advanced degree. As their advisor, I am commonly asked if returning to school would be financially beneficial. The risk/return analysis is not always cut-and-dried in this situation. Investing X amount of dollars in a degree program does not always result in an equal or higher return in the future.

The True Value Of Education

Education is about more than just the money. After a recent conversation with a client, I had the realization that while I don’t need an MBA for my job as a financial advisor, the MBA experience itself shaped and molded me to become the advisor I am today. While I did take numerous finance classes to enhance my knowledge and quantitative skills, the greatest value I gained from earning an MBA came from improving qualitative skills, such as working with people, networking, effective communication, and time management. These are skills that I use daily in my current role.

Every experience we go through, especially those that push us out of our comfort zone and require plenty of work and time, leads to personal growth. Had I not gone through the MBA program at USC’s Marshall School of Business, I might not have developed the work ethic required to succeed as a financial advisor, and I could have ended up on a completely different career path altogether.

My Pre-MBA Self

Before entering the MBA program, I had a passion for the financial services industry, but like most college grads, I wasn’t sure how that would translate into a career. I didn’t have a clear direction for my future. I was interested in becoming an advisor but knew that it would be fairly tough to advise people on what to do with their finances when I hadn’t gone through many life experiences myself.

I had always loved the idea of making money and becoming more efficient with what I had, but I was young and dumb (and willing to admit that)! I fell into the cultural mindset of wanting to work typical business hours, earn a large salary, and enjoy life. In essence, I wanted the rewards but didn’t want to do the work involved to achieve those rewards. In my naive way of thinking, an MBA seemed to be the simplest path to achieve this end result. I can tell you that I was so wrong in this assumption!

What I Gained from My MBA

Networking Skills: USC is known for networking. Everything I heard about business school prior to attending was that the most important takeaway from the experience is to network, network, network. Unfortunately, my pre-MBA self was uncomfortable talking with people I didn’t know. I didn’t like to take the initiative to introduce myself and sometimes avoided conversing with people unless I was introduced first. As time went on and I experienced the pressure of competing against my peers and other highly qualified candidates for the same jobs, I was forced to rise to the challenge and become comfortable with being uncomfortable.

This skill alone has helped me immensely in my career when it comes to collaborating with a client’s other professionals, such as an estate attorney or CPA. In order to do a thorough job for a client, it’s often necessary to work with their other professionals to make sure we’re on the same page. In many cases, I’ve reached out to a client’s CPA to make sure they had my contact information so that if questions arise about the client’s investments, they call me rather than my client.

This skill has also helped me in reaching out to client referrals or prospective clients because I’ve found that people often want help with their financial planning, but they might not tell others or take the first step.

Effective Time And Task Management: During my time at USC, multitasking became the norm. If I wanted to effectively balance school, attend recruiting events, revise my resume, participate in mock job interviews, network for potential jobs, and somehow find time for a personal life, I had to become better with time management.

My job today is multi-faceted and includes juggling many tasks, such as answering client questions, servicing and monitoring their accounts, staying on top of changes in the industry, and dealing with changes life throws my clients’ way. Knowing that I was able to handle my heavy load in the past gives me confidence that I can prioritize my work today. Most importantly, I’ve come to realize that with all of these moving parts, it’s impossible to be rigid in only working business hours (again, something I aspired to when I was young and dumb), because not everyone is available from 8 am to 5 pm. Instead, I’ve become flexible with my schedule and instituted taking a day off during the week so that I can occasionally meet with clients on the weekend or do a phone call later in the evenings.

Is An Advanced Degree Right For You?

In my case, obtaining an advanced degree was one of my best decisions. It’s difficult to imagine doing anything else with my life and I am fortunate that I went down this path. If you or someone you know is trying to make this decision, I would love to give you some insight and help you look at the situation from an objective perspective. Or, if you would like to network and see if we could work together, call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com. I’d love to see you thriving in your life!