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Improving Investor Behavior: Retire to What?

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This article originally appeared in the Denver Post, June 16, 2019.

If I asked you to define retirement, how would you describe it? Take some time and think about it. You’re probably envisioning white sandy beaches, trips to the golf course, and visits with family, free from the constraints of work and email. Sounds nice, right?

That’s how a lot of people see retirement. The belief is that upon reaching a certain age (usually around 65), retirement should be an expectation – a foregone conclusion. And once retired, people will get to enjoy “the good life” of unlimited freedom, time, and fun.

But when I’m asked to define retirement, I do it a little differently. I think back to 1996.  Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Managing Your Time Like Money

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This article originally appeared in the Denver Post, April 21, 2019.

As a financial advisor, I am typically hired by clients to help them manage their resources. Most often, these are financial resources including cash, investments, etc. Sometimes I help people to manage their business resources such as connecting professionals, encouraging action, and providing advice to help make sound decisions. But there is one resource that I help investors to consider, one that we all have, but tend to be terrible at managing.

That resource is time.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Learn to Love a Falling Market

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This article originally appeared in the Denver Post, January 20, 2019.

The financial markets have given investors quite a ride in the past few months. Not only have we seen a drop in the prices, but the volatility and multiple-percentage point days seems to have investors feeling a little seasick. The first thing queasy people want to do is to get off the boat.

This is precisely the wrong thing to do, and here’s why. Thinking fluctuation is bad for investors is an incorrect perspective. Volatility is the stock market’s way of redistributing shares of great companies to their rightful long-term owners. When markets fluctuate as they have in recent months, it is nearly impossible to divorce yourself from the emotional powers of fear and greed. The price per share does not matter unless you are buying that day, or selling that day. Other than some “entertainment value.” daily fluctuation should be ignored.

“What makes stocks valuable in the long run is not the market. It is the profitability of the companies you own,” said Peter Lynch in Worth Magazine in 1995. I agree with him. Over time, as corporations become more valuable, sooner or later, their shares will sell for a higher price. Our contention is you need to remember you own a piece of successful, profitable companies. Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Focus on the Right Number

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This article originally appeared in the Denver Post, December 16, 2018.

With the year coming to an end, 2018 has been a tumultuous one for investors. For the first time in 46 years, there has not been a clear winner in any asset class: from stocks to bonds, emerging markets to precious metals. As of this writing, none are on track to generate a better than five percent return according to a recent article from Bloomberg.

With all the attention focused on performance and prices, little appreciation goes to what we believe is a most desirable outcome for investors: income. Why do most people invest? Income. Whether you need that income today or tomorrow, most people invest with the belief that doing so will provide, maintain or improve their income. Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Longevity and the Fear of Running Out

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This article originally appeared in the Denver Post, July 15, 2018.

When do you plan to die? Weird question, right? It’s one that financial advisors have to ask their clients. The typical approach to retirement planning involves spending down the portfolio, a lifetime of savings for a client, at a rate that will ensure they have enough to live on now and for the rest of their life. The hard part is knowing how many years a person has left.

If risk is defined as the potential of making a mistake, I believe the most significant risk facing investors and their retirement is judgment about their life expectancy or longevity. Live too long, and you’re liable to run out. Die young? Well, you can see the problem with this. It’s a variable that few people like to discuss, so it gets tossed to the backburner with a “let’s just say 85 and go from there” type answer. Ask a client how long they’ll live, and nine times out of ten they say they will die at the same age their parents did.

The problem with this approach is advancements in healthcare, education, and technology. I think most Americans significantly and consistently underestimate their life expectancies. Much of this is due to the increased rate at which people are living longer.

Life expectancy is increasing due to innovations in vaccines and antibiotics; they have indeed caused our health to be significantly better. Stories of pandemic flu today are solved in a matter of weeks or months, yet just 100 years ago it wiped out millions. Tuberculosis and polio were common in the early lives of today’s 70-year-olds. Today they are non-existent. Knee, hip, and shoulder replacements are common, as are cataract and heart stents, enabling people with worn out parts to lead active lives free of what used to be life-limiting pain.

When baby boomers consider their life expectancy, they are using a measuring stick for someone who was born in the 1930’s, expecting continuing improvements in healthcare. But advancements in the past 30 years have been exponentially greater. This creates a significant gap between the estimates of how long retirees will live, and how long they actually live.

More concerning is the combination of a couple in retirement, and their joint life expectancy. It’s like taking the same issue and multiplying it by two.

Data reveals couples live longer than single people. This may be attributed to caring for one another, socialization, and plain old love. Living for another gives purpose to your day. Rarely do people plan for and consider the life expectancy of a couple. In all actuality, the issue becomes even greater than the sum of its parts.

Education is also a significant factor in determining life expectancy. Today, the vast majority of our population is well educated. Educated people have higher incomes, and are more active, eat better, and more in tune with their health. If education is the trump card to longevity, today’s Americans may break out way ahead in life expectancies.

Underestimating your longevity is a significant risk and can become a large financial problem especially for those planning to retire in the next 20 years. Pensions plans cover the life of the individual, but as those plans are replaced with independent retirement savings, will retirees be prepared? Social Security may provide a base of income, yet it escalates at an anemic rate (only 2 percent this year, 0.3 percent in 2017, and none in 2016) and inflation has historically risen at 3 percent per year. This means the purchasing power of your Social Security income falls in half in just 35 years. Live ten more years, say from 85 to 95, and you might see another 35 percent reduction in your purchasing power.

According to a study released this month from The Senior Citizens League, the reduction in the buying power of Social Security benefits from 2000-2018 was 34 percent. Some of the largest cost increases during this period were medical related: Medicare Part V monthly premiums (195%), prescription drugs (188%) Medigap (158%) and medical out-of-pocket expenses (117%). (Source: https://bit.ly/2ItT6NW)

Living longer is a goal to which we should all aspire. With advances in modern healthcare and technology, the goal seems more attainable than ever. As such, we need to start accounting and planning for longer lives and the effect it may have on your retirement. Your investments should support you at all stages of life, whether that’s 65 or 105, especially when going back to work is no longer an option. If you haven’t already, talk with your financial advisor to discuss your longevity plan so your money doesn’t run out before you do.

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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The 3 Paychecks of a Modern Retirement

On November 29th, the oldest living person in the world, Emma Morano will turn 117. Based on my research she is the last living person to have been born in the 1800s. While some people might marvel at all she’s seen and been through, I ‘m curious about what she did during her more than 50 years in retirement.

With life expectancies continuing to grow, from about 69 in 1970 to almost 79 in 2012 here in the U.S., this examples illustrates my point: I think the traditional picture of retirement will look very different in the coming years. Palm trees and Pina Coladas are fun for a little while, but 50 years of it would surely drive many of you insane.

With our dividend strategy we aim to keep checks coming for clients, because we believe in a steady growing income. But there are two other “paychecks” I encourage clients to pursue as well.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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The Role of a Fiduciary – Putting Your Interests First

Starting my career with a large very well-known investment firm some 38 years ago taught me valuable lessons we use to counsel and advise clients. During that 18 year period of disappointing (biased) research and proprietary investment products that were actually manufactured by that company, I continuously asked the question: “What about my clients?” You see, inherently I felt I worked for my clients, not some financial services firm. It was by my nature and core that I cared about clients first and always sought to put their interests above that of my own or the company that wrote me my paycheck.

As many of you have undoubtedly heard, regulatory changes are coming to the finance industry pertaining to “fiduciary standards” and the obligations we have as financial professionals with respect to retirement accounts.

Let me be clear: we embrace these changes as we serve as a fiduciary for your money in advisory relationships, just as I believe we always have.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Brainworks – Simple Strategies for Staying Sharp

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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The Power of Growing Dividend Income

We create and communicate ProsperOn’s to deliver timeless, valuable wisdom to our clients, with the hope to provide greater clarity, capability and confidence. In other words to help people be better investors. We hope these are valuable to you and your family.

By now most of you have heard us preaching the gospel of our Growing Dividend Strategy. At the very core of our investing philosophy is the notion that our clients invest for income. That income may be for today, or needed sometime in the future. But the crux is almost always income.

A focus on income invites unique challenges and opportunities. For instance, the largest challenge is a continually growing income that outpaces inflation, the “consistent hill” that always needs climbing. Without growing income the purchasing power of your money will decrease over time, along with your standard of living.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Are your Heirs Prepared for Their Inheritance?

If you’re anything like the majority of our clients, you already have an estate plan in place. This likely covers all the general aspects of passing your wealth onto your heirs. It details investments, savings, totals, and all the other items that require crossing the “t’s” and dotting the “i’s”. Yet we believe there are many important areas an estate plan does not cover. It boils down to one simple question: Your estate plan is in place, but are your heirs prepared?

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