This is the best in Wealth podcast – A show for successful family stewards who want real answers about Retirement and investing so we can feel secure about our family’s future.
Scott's mission is simple: to help other family stewards build and maintain their family fortress. A family steward is someone that feels family is the most important thing. You go to your job every day for your family. You watch over your family, you make sacrifices for your family, you protect your family. I work with family stewards because I am one; I have become an expert in the unique wealth challenges family stewards face.
Scott Wellens is the founder of Fortress Planning Group - an independent, fee-only, registered investment advisory firm. Fortress Planning Group is dedicated to coaching clients toward a holistic view of wealth and family stewardship. Scott is a certified financial planner, a fiduciary and has been quoted in the industry’s leading websites including Forbes, Business Insider and Yahoo Finance. Scott is also a Dave Ramsey Smartvestor Pro in the greater Milwaukee and Madison areas.
The Next New Normal Is On the Horizon, Ep #168
The 5 Types of Retirement Savers: Which One Are You? Ep #167
Do you know what your personality type is? Do you know what kind of saver you are? Knowing these things can help you learn more about yourself—and determine what you need to do to have a successful retirement. If you’re interested in learning more about the 5 personality types—and what it means for you—listen to this episode of Best in Wealth!
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Outline of This Episode[1:14] The 4 types of personality traits
[5:27] #1: The ambitious risk-taker
[7:33] #2: The cautious preparer
[10:52] #3: The optimistic dreamer
[13:14] #4: The purposeful planner
[17:35] #5: The uncertain struggler
[20:15] What each type should do
The 4 types of personalitiesHave you taken a personality test to learn more about yourself? According to an article published on https://www.today.com/health/personality-types-average-self-centered-role-model-or-reserved-t137902 (Today.com), there are four main personality types, scored based on personality traits: openness, agreeableness, extraversion, neuroticism, and contentiousness. Understanding where you rank can help you predict your personality type. So what are they?
Average: Most people are “average” and score high in neuroticism and extraversion while scoring low in openness.
Reserved: reserved people are introverted and conscientious, neither open nor neurotic.
Role models: Role models are natural leaders. They are agreeable, open, extraverted, and conscientious.
Self-centered: Self-centered people score high in extroversion but are below average in all the other categories: openness, agreeableness, and conscientiousness.
To grow, you need to know who you are. I scored the highest on the need for recognition and it’s true—I love a pat on the back. Once in a while, at a previous job, my sales manager would say, “Good job, Scott.” Unfortunately, he always followed it up with, “Your personality trait says I should do this.” Where do you land?
#1 The ambitious risk-takerAccording to Barrons, ambitious risk-takers are educated, optimistic, and young.
49% of the people surveyed were under 45
28% were under the age of 35
72% worked full-time
52% have a bachelor's degree
Men are 54% of this group
43% have a financial advisor.
They are more likely to be open to new opportunities. 75% expect their income to last throughout retirement. They think they are experts in retirement planning. Is this you?
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#2: The cautious preparerAre you a cautious preparer?
56% of this group are men
40% hold a bachelor’s degree
68% are 45 or older (20% are 65-75)
Many cautious preparers have prepared for the worst and stuck with tried and true investment strategies. They’re full of questions, do a ton of research, but rely on the experts. 27% are actually retired (the highest percentage of any type).
#3: The optimistic dreamerHere are the stats on the optimistic dreamers:
Women make up 57% of this group
49% are under 45 and 26% under 35
Only 46% have a high school diploma
To this group, retirement seems to be far away. They expect to lead active and rewarding lives as seniors. They’re optimistic—but don’t have the assets they need. They have a basic understanding of retirement plans but aren’t comfortable with it. But they’re usually making contributions to their 401k. Few optimistic dreamers know their income needs for retirement. They make financial decisions based on instinct—an
3 Reasons Why Bitcoin is a Speculative Investment—At Best, Ep #166
John Oliver once said, “Everything you don’t understand about money combined with everything you don’t understand about computers—that’s Bitcoin.” Bitcoin is the most famous of over 4,000 different cryptocurrencies. All of these currencies are the subject of both endless debate and fascination. Many people are speculating about what role it should play in your portfolio. So in this episode of Best in Wealth, I talk about the volatile path of Bitcoin—and three reasons why financial stewards shouldn’t hedge their bets on cryptocurrency.
[bctt tweet="In this episode of Best in Wealth, I share 3 reasons why Bitcoin is a speculative investment—at best. Don’t miss it! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement #Crypto #Cryptocurrency #Bitcoin" username=""]
Outline of This Episode[1:08] I got my first COVID shot!
[4:13] What to Make of Bitcoin now?
[7:50] Why the steep rise?
[9:08] Bitcoin and gold as an investment
[12:13] THREE issues to consider
The volatile journey of BitcoinBitcoin hasn’t been around that long. It was steady for a long time around a couple hundred to a couple of thousand dollars. But had a dramatic rise to $20,000 in 2017. What happened next? It plunged at the beginning of 2018 and a lot of people lost money. In October 2020, it shot straight up. It’s worth over $53,000 per coin. It has proven extraordinarily volatile—gaining or losing 40% in a month or two. It’s been a wild ride.
So what’s led to this volatile track record? Why is the cost of Bitcoin continuing to rise? Bitcoin is earlier to purchase now. There are also a lot more people talking about it. More millennials and institutions are buying. Others feel it’s a great hedge against inflation. But Bitcoin is of limited value as a reliable medium of exchange and as a risk-reducing asset. It’s not a hedge against a well-diversified portfolio.
Bitcoin and gold as investmentsAssessing the merits of Bitcoin as an investment can be difficult. It means you have to lower your allocation of stocks, real estate, or bonds. You have to give up something to get Bitcoin, right? We expect to receive future income from stocks, real estate, etc. As a stock-holder, we participate in the profit.
Bitcoin is similar to holding gold as an investment. Even if they’re held for decades, the owner may never receive more Bitcoin or gold. It isn’t clear that Bitcoin offers investors positive expected returns. You own a coin or a lump of gold, hoping that supply and demand drive the worth in an upward trajectory.
Some say Bitcoin is worth more than gold. Why? Because you can discover more gold, which means what you’re holding would inevitably be worth less. On the flip side, there’s a finite number of Bitcoins—as far as we know. But could they make more coins? Can code be written differently in the blockchain scheme? Could cryptocurrencies merge? There is no guarantee.
[bctt tweet="Why has the price of #Bitcoin been so volatile? What made it skyrocket? Listen to this episode of Best in Wealth for my thoughts! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #WealthManagement #Crypto" username=""]
THREE reasons why Bitcoin is speculativeBitcoin—and other cryptocurrencies—are speculative at best. Here are three reasons why, as family stewards, investing in Bitcoin isn’t responsible.
Firstly, it’s not backed by an issuing authority and exits only as computer code, kept in a digital wallet accessible by password. What if you forget your password? There is NO resource for any forgetful owner of Bitcoin. After a limited number of password attempts, you can permanently lose access, therefore rendering it useless. A holder of more than $200 million worth of Bitcoin can’t access them. Can you imagine being that person? This isn’t unusual. 20% of all outstandi
6 Behavioral Biases that Can Negatively Impact Your Long-Term Investments, Ep #165
Financial discipline is imperative to the success of your long-term investments. But your behavioral biases can get in the way of that long-term success. Biases allow you to be short-sighted and you forget about the big-picture consequences of your actions. What are some of those biases? How do you avoid them and make sound investment decisions? I talk about 6 behavioral biases in this episode of Best in Wealth. Don’t miss it!
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Outline of This Episode[1:07] Leave Best in Wealth a review!
[2:13] Personal + financial discipline
[4:28] The definition of discipline
[7:13] Behavior #1: Herding Behavior
[9:30] Behavior #2: Overconfidence
[11:48] Behavior #3: Myopic Loss Aversion
[13:29] Behavior #4: Recency Bias
[16:05] Behavior #5: Home Market Bias
[17:58] Behavior #6: Disposition Effect
[19:58] What’s your punishment?
The Definition of DisciplineAccording to a quick internet search, https://languages.oup.com/google-dictionary-en/ (discipline) is “The practice of training people to obey rules or a code of behavior using punishment to correct disobedience.”
Investors often think that they’re disciplined, right? But the truth is that most of us aren't good investors. That’s why you must practice discipline. But we all deal with behavioral biases that impact our investing experience. 6 behaviors that can affect your investment returns. What are they?
Behavioral Bias #1: Herding BehaviorOne word: Bitcoin. We are hard-wired to look to others for the right way to behave. The problem is that this leads to a lack of independent thought and evaluation. You see Bitcoin continue to climb because of supply and demand. We feel like we need to follow the herd and buy into Bitcoin now. But it means you’re chasing the returns. If you buy in at $50,000 and the market corrects, you may be down thousands of dollars. If you look at stocks as a whole in the last 6 months, there are so many better places you could’ve been than technology stocks.
[bctt tweet="Humans are hard-wired to look to others for the right way to behave. How does this impact your #investment decisions? Find out in this episode of the Best in Wealth podcast! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement " username=""]
Behavioral Bias #2: OverconfidenceOverconfidence bias leads investors to overestimate their knowledge and ability—while underestimating risk. We think we are smart. But it’s nearly impossible to outsmart the market. Only about 25% of actively managed funds beat their index. The efficient market hypothesis states that stock prices reflect all market information. Remember one thing: everything that we know about a company or sector is already priced into the market. If you aren’t diversified, you are pinning yourself against millions of investors. Overconfidence can kill your portfolio.
Behavioral Bias #3: Myopic Loss AversionLoss aversion means that investors are more sensitive to losses than gains. This occurs more frequently when investors check their performance every single day. Oversensitivity creeps in when you do that. This causes investors to behave irrationally and sell after a market drop which means taking a loss. When you feel good about a market gain and then see a loss—it hurts twice as bad. It makes us irrational about our money and we lose subjectivity.
Behavioral Bias #4: Recency BiasPeople—including me—have short memories. We recall recent events more clearly than those in the past. It’s especially dangerous in investing. We forget about prior market declines. We take more risks when thi
Your Guide to Strategic Rebalancing, Ep #164
What is strategic rebalancing? Why should you rebalance your portfolio? How do you rebalance your portfolio? In this episode of the Best in Wealth Podcast, I share what it is, why you want to do it, and the best way to strategically rebalance your portfolio. Don’t miss it!
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Outline of This Episode[2:37] Cleaning out my junk drawer
[5:15] What is strategic rebalancing?
[9:09] Rebalancing reason #1: Risk tolerance
[12:14] Rebalancing reason #2: Buy low and sell high
[14:05] Time-based portfolio rebalancing
[18:22] Employ strategic rebalancing
[22:05] Invest in the low performers
What is strategic rebalancing?What is strategic rebalancing? Why do you do it? Let’s say you have allocated your 401k into five different mutual funds. For example, you may be invest 20% into the following asset classes; a US fund, an international fund, an emerging markets fund, a real estate fund (REIT) and a bond fund.
Then, over time as the market goes up and down, let's say the US markets are down and the international market is doing well. Your 20% allocation in the US mutual funds drops to 18% and your international funds might be at 23%. Now, your portfolio is out of alignment. Rebalancing a portfolio is getting it back to square one, with each fund at 20%. But there are different ways to go about it.
The TWO big reasons to rebalanceAt Fortress Planning Group, we define risk between 1 and 99. “1” means you hide your money under your mattress (and have next to zero risk tolerance). If you are a “99,” you are able to invest in volatile stocks (you have a high risk tolerance). Your risk tolerance should be somewhere in-between 1 and 99.
You set your portfolio to a certain risk level because it fits your risk tolerance. The market will go up and down. You cannot time it. But if your risk tolerance is a 65 and you are in a portfolio that is a 70, you may not be able to handle a volatile market. Your emotions will lead to poor decisions.
You need your risk tolerance to be in the right place. You have to rebalance so your risk tolerance stays aligned. You cannot be at risk of making emotional decisions. This is the #1 reason why you rebalance.
Reason #2 is that rebalancing offers you the opportunity to buy low and sell high. If your international mutual fund is doing well and is now at 25% of your portfolio, you can "sell high" to get your portfolio back to 20%. You can then buy your US mutual fund and while it is down, "buy low" and get the fund back up to 20% while it is underperforming.
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Time-based portfolio rebalancingHow do you rebalance your portfolio? One option is to do it at a set time monthly, quarterly, or yearly. In most 401ks, you can set it up so that it automatically rebalances. What is the best option? How often should you rebalance?
A Vanguard study says there is no perfect time to rebalance. Rebalancing monthly might be excessive and you may pay too much in fees. If you rebalance too soon, you can miss out on momentum. If recessions and corrections lasted the same amount of time, you could do time-weighted rebalancing. But no one knows how long a recession and correction will last.
If your choice is regular rebalancing, aim for yearly rebalancing. But this is not the method that I recommend. What is?
Strategic rebalancing 101At Fortress Planning Group, we employ strategic rebalancing as often as we need to. The research sugges
Take Your Family Stewardship to the Next Level with These 5 Steps, Ep #163
COVID has turned the world upside down. We are all entrenched in the depth of winter. There’s a lot of hatred permeating politics. The economy is overwhelming. It feels like the walls are caving in around you, right? But none of these things are under our control.
Focusing on these things won’t make your walls stronger. You’re the one responsible for building your four walls. No one else will do it for you. You don’t want a weak house that leaks. You want a strong fortress. So how do you build your fortress? In this episode of Best in Wealth, I share 5 things you can control and focus on. Check it out!
Outline of This Episode[1:15] Welcome!
[2:04] Growing up a carpenters kid
[4:14] The state of our world
[9:18] How to build your fortress
[10:00] #1: Take care of your family
[11:36] #2: Build your financial fortress
[14:59] #3: Be kind to others
[16:41] #4: Take care of yourself
[19:27] #5: Get spiritual
Step #1: Take care of your familyDon’t take your spouse for granted. Everyone can work on their marriage. Are you a parent? Become the best parent that you can be. How? Be present. Don’t stress about what you can’t control. Listen to your kids. A client told me that instead of asking your child “How was your day?” you have to say “Tell me about your day.” It’s a game-changer. When you work to be present, you’re pouring a strong foundation.
#2 Build your financial fortressHow can you take care of your financial fortress? Here are some ideas:
Set up a budget! Get a spending plan in place. You feel so much better. It isn’t a constraint on your money—it’s permission to spend. Don’t feel guilty when you have it as part of your spending plan.
Set up a great retirement plan. You’ll feel more secure and like you’re making better decisions with your money.
Get a sound investment plan in place. When you have an investment policy statement in place, you feel less out of control when the market dips.
Get the insurance you need (and get rid of what you don’t need).
Pay attention to your taxes.
Get estate-planning documents in order.
If this is too overwhelming, reach out to me! This is what I do for a living. I can help you get it all together.
Step #3: Be kind to othersI’m tired of all of the hatred in the world—aren’t you? Why can’t we just be kind to others? Let people pass you on the freeway. Open the door for someone. Smile. Give. You can do three things with your money: spend it, save it, or give it away. You will be happiest when you’re giving. Give a little now so you can give a lot later. It doesn’t have to be monetary—you can give your time, too.
Step #4: Take care of yourselfEveryone focuses on self-care at the beginning of a year, right? It’s so easy to start strong, then you start to go downhill. It’ll be rough at first. But once you get in the groove, you’ll want to keep those endorphins around. You also need to take care of your mental health. If you aren’t in a good physical or mental state, you’re like a hollow door. But when you’re strong—both physically and mentally—you can take on the world.
Step #5: Get spiritualYou need a sense of purpose in your life. The world is bigger than you. Don’t forget that you have someone to lean on. We all fall, but you can get back stronger than ever. When you have a strong spiritual base, it’s hard to get knocked down. You are being protected. When you feel that, your fortress is growing even stronger. You can work to be a better person every day.
Connect With Scott Wellenshttps://calendly.com/fortress/15-minute-conversation-with-scott?back=1andmonth=2020-03 (Schedule a discovery call with Scott)
https://bestinwealth.com/contact/ (Send a message to Scott)
https://fortressplanninggroup.com/ (Visit Fortress Planning Group)
https://www.linkedin.com/in/scott-wellens-cfp%C2%AE-a066643/ (Connect with Scott on LinkedIn)
Great Podcast and Financial Advisor
Scott has been my financial advisor for the past several years and has provided me with great advise on investing, saving, and spending. His philosophy to building wealth meshes with mine - it’s something that is built slowly and deliberately over time. He is just as you hear in the podcast - honest, personable, informed, and humorous. If you aren’t able to have Scott as your financial advisor, listening to his podcast is the next best thing.
Scott is so knowledgeable and can relate to everyone no matter their financial well being.
Really enjoying Scott’s podcast. Great mix of personal stories and practical financial advice. Particularly liked the podcast on budgeting - have shared with my young adult kids. Keep them coming!