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“Save, invest, protect” With David Flores Wilson

In my experience, people who take financial literacy seriously over their lifetime, do well. In financial planning, there are five main things you can do: save, invest, protect the wealth and income you have, manage debt correctly and minimize taxes. The hard part really is saving. I think that is what most people should focus […]

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In my experience, people who take financial literacy seriously over their lifetime, do well. In financial planning, there are five main things you can do: save, invest, protect the wealth and income you have, manage debt correctly and minimize taxes. The hard part really is saving. I think that is what most people should focus on. I have clients with multi-million-dollar balance sheets but they were smart about their expenses. They did not let increases in pay translate to increases in expenses. That is often the hardest and most tempting part.

I had the pleasure of interviewing David Flores Wilson, CFP®, CFA, CEPA®.

David helps Gen X and Gen Y professionals and business owners in New York City achieve financial freedom. Named one of Investopedia’s 100 Top Financial Advisors of 2019, he is a managing partner at Sincerus Advisory and Writer/Editor for Planning to Wealth. His financial guidance has appeared on Yahoo Finance, MSN News, CNBC and InvestmentNews.

Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

My career path brought me to the finance industry in many ways, but two distinct influences come to mind. The first being more recently — I was an investment banker right out of college and I had grueling late hours. I had taken a few investment-focused certifications like the CFA so my friends and colleagues started coming to me with questions like what their 401(k) allocations should be, etc. One late night in particular, I was putting together a rent versus buy sheet that later circulated around the office. I found this passion for financial planning and helping people. I was looking to transfer from investment banking to financial planning and wealth management. Right after the financial crisis in 2009, I turned my passion into a career.

I also believe that my drive for financial planning started in childhood. My dad was a CPA and worked from home. At an early age, I was exposed to how instrumental financial expertise and guidance are in people’s lives and economic success. Dinner table conversations included talk about financial literacy and why proper planning is so vital. In some ways, I feel like I won the financial literacy lottery growing up with these conversations being commonplace.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

About ten years ago, I had a client who had worked very hard and strategically planned for his future. He had built up a strong team in his years as a consultant, climbing the corporate latter. He was also getting pressure to leave his career and run the family business. We met up to chat and he expressed concern that this sudden career move was not as prestigious as his previous consulting work. I advised him to make changes and strategic plans to grow his small family business into a big business over time. Three years later, he was running an extremely successful business with solid growth prospects that came full circle with his family roots. What I love most about my job is being an instrumental part of people’s stories.

Are you working on any exciting new projects now? How do you think that will help people?

Currently, I am developing a process that helps people evaluate and respond to the financial impacts of COVID-19. This involves re-evaluating income, emergency funds, real estate and debt. From there, I help clients re-prioritize their goals and values. With a new frame of reference, we then work together to cut expenses that no longer match their goals. It is also important to factor in how the newly passed CARES act can benefit people. It’s vital during this time that we help clients update their projections and look for appropriate portfolio changes.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I am blessed to say that so many incredible people have helped me along the way. I wouldn’t be here without the strong and continuous support of my family and friends. I mentioned my dad earlier having a monumental impact on my career path. In addition to my dad, former colleagues, friends and family members were all really my first clients. They believed in me then and they still believe in me now. I am extremely grateful for their countless support and guidance.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

Above all else, it is important to remember that this storm shall pass and there will be a light at the end of the tunnel. The anxiousness and nervousness that people are feeling right now is absolutely justified. However, it is important to remember that these feelings will not last forever. Although financial crises like COVID-19 are rarely expected and never wanted, market fluctuations are natural. Bringing it back to the markets, bear markets are actually a normal and healthy part of the economy. It’s important during this time that we all come together, show kindness and empathy and support each other in any capacity we can through the storm.

As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

I would start by addressing your real life issues and then go back to the process of what is going to happen to your income and how much money you need to sustain through these uncertain times. The instinct for many people is to invest money in the market, as many stocks are “on sale”. Although it is tempting to buy these stocks at low levels, I think people need to first look at their situation and play defense, especially if they are at risk in terms of their income or expenses. Of course, there will be people who regret not investing now, however, I think it is more important to focus on real life issues such as people’s health, safety and job security.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

Overall, markets tend to recover months before an actual recovery. Historically, there tends to be several headshakes before the true market turnaround. I would not recommend people focus on particular sectors and try to play the betting game right now. Some research shows that if you miss the top 10 percent of the best performers in any given year, you’ll have dramatically lower performance over time. So for most people, it would make sense to take the guesswork out of the equation and stay diversified. It’s wise to not time the market turnaround based on particular sectors.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

N/A

Are there alternative investments that you think more people should look more deeply at?

Alternative investments have their place in the right dynamic for the right people, however, for most people they are not as appropriate. Oftentimes, these investments have higher levels of fees and are not as liquid in many cases.

I predict that we will see a lot of dislocation in the real estate market in the next year to year-and-a-half. For people who are interested in real estate, there could be potential opportunities as evaluations come down. It’s important to do proper research before making any rash investments.

If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long term investment what would you advise them to do with it?

You can never truly know how to advise someone without comprehensively understanding their goals, values, expenses, costs and so on. However, with all that being said, I would recommend a personalized and diversified portfolio that is right for the individual. This is also dependent on the financial risks they are willing to take.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

Financial literacy is so important and very rarely prioritized in schools. In my experience, people who take financial literacy seriously over their lifetime, do well. In financial planning, there are five main things you can do: save, invest, protect the wealth and income you have, manage debt correctly and minimize taxes. The hard part really is saving. I think that is what most people should focus on. I have clients with multi-million-dollar balance sheets but they were smart about their expenses. They did not let increases in pay translate to increases in expenses. That is often the hardest and most tempting part.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

One of the best life lessons I heard along the way is, “your level of success will rarely succeed your level of personal development.” The lifelong component is very important in our business because the more you learn and prove, the more you can help people problem solve and advance the longevity of their financial well-being.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be?

Financial literacy is the lifelong skill that everyone should develop. In our society, it is often taboo to talk about money, but the reality is that finances are an integral part of life. Of course money is not everything, however, it does affect nearly every aspect of our lives in some way or another. If we as a culture can get better about advocating for and working on financial literacy and developing that skill from an earlier age, we would all benefit as individuals and as a society.

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