What’s in your financial Arsenal? Open your gun cabinet or safe. What’d you see? Is there one gun or two? Just kidding. Are there five or twenty-five? Here’s a question you’ve probably never heard before. “Why do you need another gun?” Aside from simply liking them, we all know that if you’re serious about your pursuits, you want the best tool for the job.
Your target and conditions make it practically impossible to conclude that a single gun is the best option for all occasions. You wouldn’t use a .375 H&H for pronghorn, and your first choice for moose wouldn’t be a .223. Sure, you may be able to get the job done, but in either case, things could get messy. It’s less than optional. The idea of taking a .223 to moose camp is downright silly. Why? Because you know better, that’s why.
This year, I turned 54 and now have a few guns. For most of my hunting career, I chased whitetails with a bow and spent little time thinking about guns. My Arsenal started with a Red Rider BB gun when I was 5. When I turned ten, I upgraded to a Crossman 760 pump. Those were the days. I roamed alone all day with my pellet gun and an apple. Things got serious when I was legally able to hunt. Dad bought me a Winchester 12 gauge pump with a slug barrel. It swung like a stick of lead. When I was 12, he got me a Remington 760 Bushmaster for Christmas in 30-06: those guns and a bow made up my Arsenal for the next 20-plus years of my life. And based on my pursuits, served me well.
But things change. Life changes, and interest expand. My hunting pursuits diversified and became more complicated. I’ve found myself looking for ways to improve my chances of success in these broader pursuits. When I was 32, I added a Benelli Super Black Eagle to the group in preparation for my first out-of-state- duck hunt. Ten years later, I added a Christensen 6.5 PRC for an antelope hunt in Wyoming. Most recently, Nosler’s mountain rifle was acquired in .28 Nosler topped with equal quality glass.
These are my first steps in preparation for fulfilling the long-held, seemingly unattainable dream of hunting the high elevations of Asia. Whether rifles or shotguns, the instruments of our passions become more specific. We want, even need, a different level of performance from our equipment as our sporting “careers'' advance.
Guns are easy. You possess an understanding, and if you have questions, you probably have several people with credible standing that you can ask for guidance. Besides, it’s what you love. You have the drive to learn, and it’s fun. With personal finance, not so much. You enter the workforce, and you’re offered some retirement plan, like a 401k. Or maybe you start a business, and your CPA recommends contributing to a SEP plan. Much like that first rifle, these instruments provide a solid beginning, and depending on your career path, they may satisfy most of your long-term investing needs. It could be that you want nothing more.
For many of us, like our hunting careers, we want more. We need more. Financial matters have become more complex as we acquire assets and pursue new objectives throughout life. Incomes increase, and your financial Arsenal begins to expand. Restricted stock units, stock options, and ROTH 401ks now require new considerations. For the growing small business, it could be the addition of a “safe harbor provision” in a new 401k—or deferred compensation for the owners and “key man” insurance for your top salespeople.
Things can and should require more attention. This is an excellent time to explore new, more specialized instruments for your financial Arsenal and professional guidance on deploying or leveraging newly acquired assets. The acquisition and setup of these financial instruments are more complex and intuitive than purchasing a new gun. And it’s not the investor’s or business owner’s fault.
We aren’t born knowing and understanding the tax code. And you can’t casually flip through a financial periodical and expect to educate yourself on a financial instrument that can’t be sold in a sound bite. Your requirements have outgrown the overly-simplified catchphrases like “access to research” or an “advanced trading platform.”
Shooting a white-tailed deer at 75 yards doesn’t require the same level of technical competency as shooting a mule deer at 500 yards with a crosswind. If you want to be successful, you’ll probably invest a little extra time preparing for your moment of truth. And you may find that there are better options out there when it comes to your instrument of choice. Adopting the same process when building your financial Arsenal can go a long way when life becomes more complicated. New frontiers and challenges can be met by building on the basics and adding more sophisticated instruments to your financial Arsenal.
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy
or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on
sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.