Wealth Management Advice for Today’s Global Economy

5 action steps to take now


The global economy is complex, ever changing… and a hot topic.  There’s no shortage of opinions as to its impact on the future.  But, what’s it all mean to you, your family, your career and your portfolio… today, next week, next year?

Wherever you are in life, what should you be thinking about and doing right now to protect and grow your wealth? How do you prepare for what’s next and still live life today? If you haven’t been asking for this kind of wealth management advice, it’s time to start. The global economy matters, but what matters most is its impact on you.  This is where you and your financial advisor should be taking the conversation.  Translating the financial world to your world. Explaining what’s different today and why.  Moving from the same-old rhetoric to actual ramifications on your personal situation. Above all else, finding great opportunities out there for you, your family and your portfolio.                                                                                                                                                                                  

Wealth Management Advice:  5 Action Steps To Take Now

(1)  Understand you can expect lower returns on investments (stocks and bonds) in the near term.  These lower returns need to be factored into your financial plan. While the Federal Reserve’s strategy to lower interest rates and print money to pump up the economy has worked, the result, going forward, is lower returns. No one knows how long this market forecast will last, but better to take a conservative approach and prepare for low returns now rather than to expect high returns and be disappointed.

(2) Make a plan to offset the below average returns.

Whatever your age, the best plan for offsetting lower returns is to save more. 

Younger individuals and couples

A simple rule of thumb: save 10%. If you don’t think you can, work with your financial advisor and develop a plan to do so.  It may require you to reevaluate your career to make more money or spend less or both, but do yourself a big favor now and follow the 10% savings rule while you’re young and while the time value of money works to your greatest advantage. 

Adults with kids and grandkids

Talk to your kids and grandkids about finances and teach them to put away 10% a year.  If you can afford it, motivate the next generation by offering to match their savings on an annual basis.  Teach them to save early in life. Match their contributions to 529 Accounts and IRAs. Instilling good values around money can pay off now and for generations to come. This is truly the gift that keeps on giving! There are great books on this topic.  One of our favorites is Richest Man in Babylon by George Samuel Clason.


If you’re living off your portfolio, ask your wealth management advisor to model out lower returns. Run the numbers to make sure you are adequately funded to live the life you desire.  Understand what you’re spending. Understand your returns and their effect so that you don’t run out of money. 

WATCHOUT:  In this environment, it’s not enough anymore to use “rule of thumb” or just run numbers on a calculator. Sequencing of returns matter. Use Monte Carlo or a database with historical monthly returns back to the early 1900’s. Make sure you know what the impact will be if you increase or decrease your allocations to equities or if you don’t include international or emerging markets in your asset allocation. Make sure you know the difference between cash going out and “real” spending.  For instance, a common error is to principle payments and premium payments on life insurance as spending. Finally develop balance sheet targets and have a plan to meet end targets.

(3) Look closely at where your money’s going.

  • Revisit what kind of insurances you have, why you have them, and what you’re paying in premiums, how much cash value should you have and when? Am I paying too much in commission?
  • Refinance your mortgage. If you haven’t already done so or rates have dropped more than a ½% since your last refi, it’s time to consider what’s available.
  • Lease or buy your car?  There are savings to be had here based on your situation, especially if you have to pull money out of an IRA to pay cash.
  • Rethink how to save and pay for education.  Have you explored 529 Plans or saving money in a tax-free, cash value life insurance policy.

(4) Find more ways to cut expenses.

Besides limiting unnecessary spending, take a close look at your monthly statements for phone service, cable TV, Internet, bank and credit card fees, tax preparation, and other routine expenses.  Watch for hidden fees and “cost creep”. Pick up the phone, question the charges and negotiate a better deal, or take your business elsewhere.  We know people who have saved thousands of dollars by taking the time to go through this exercise, as tedious as it may be.  Also, adhere to payment due dates or set up auto-payments to avoid late-payment penalties.

(5) Make sure you’re getting best rates in all parts of your financial life.

One of the great benefits of getting wealth management advice from an advisor who works as a fee-only fiduciary as we do at Lenox is that we work just for you.  Compare this to a traditional broker/dealer who has to serve the overhead, products and profits of their firm as well as the client.  As an independent, your Lenox advisor is focused on providing you exceptional financial services and guidance while working to minimize your costs –- not selling you products to increase their compensation.

Because independents don’t get paid to promote products, we can and do go to any and every vendor to find the best policy, plan or product at wholesale pricing for whatever your need –– investing, savings, insurance, banking, mortgage, autos, education, etc. 

We sit down with you and your insurance agent, mortgage broker, banker, and whoever else to negotiate on your behalf and make sure all is being done in YOUR best interest and in line with your financial plan.  In this role, Lenox is your personal “family office”.  There’s no extra cost –- just the extra care you deserve across all parts of your financial life. We are delighted to bring you Lenox Family Office –– a level of service once available only to the wealthiest of families. Now available to you because of the value of being an independent fee only advisor. Learn more.