7 Obstacles That Prevent People From Starting Businesses (And How To Overcome Them)

Millions of people dream of becoming entrepreneurs, but they never take that all-important first step. Too many things get in the way of their pursuit of business ownership, or they keep convincing themselves that their dream isn’t realistic. 

If you ever want to move past this phase and found your own business, you need to acknowledge the specific obstacles that are holding you back and work to resolve them. Here are seven of the most common challenges that may be standing between you and your entrepreneurial dreams—and ways you can kick them to the curb. 

1. Financial limitations

Launching a business takes money, and most people don’t have ample cash to throw at a startup. There are several options here. First off, you could begin saving now for the funds to establish your business. If you shop for a better mortgage and reduce your house payments by refinancing, you can sock the savings away in your startup fund. You can trim costs in other areas to put away a few hundred dollars each month or save even more by picking up a side gig.

Barring that, you can secure funding in a variety of ways, such as borrowing from friends and family, crowdfunding, seeking loans and grants or even working with angel investors and venture capitalists. There’s always a way forward. 

2. Inexperience

Becoming a successful entrepreneur typically demands experience; you need to understand your industry and business management in general if you want to earn a living from your venture. When you have limited experience, you may be reluctant to move forward, and understandably so.

You can make up for this, however, by actively seeking the experience you lack. Take an online course to gain a grasp of business management basics. Strive for a leadership position with your current employer so you’ll acquire strategic planning and people management skills. Work with a mentor or shadow an entrepreneur you admire. 

3. No standout idea

You can’t build a business if you don’t have a promising idea for a product or service you can sell. Without a solid business plan, you won’t be able to convince investors or partners to join you—and you won’t even know where to begin. Unfortunately, this is one of the least “fudgeable” obstacles on this list. Without a good idea, you can’t start a business, period.

Luckily, there are ways to stimulate better idea generation, such as talking to a broad range of people, reading entrepreneurial content and taking a more robust approach to brainstorming. Techniques like mind mapping and word banking can get your creative juices flowing. 

4. Current responsibilities

Some people avoid starting a business because of existing responsibilities or constraints on their time. Their current full-time job, their status as a parent or other personal responsibilities hold them back from their entrepreneurial ambitions.

Here the best approach is to determine how much of an impact these responsibilities have and consider ways to delegate or remove them. Could you realistically quit your day job, for example, or hire someone to help with household duties or childcare?  

5. Fear of failure

Lack of confidence is an entrepreneurship killer. It’s true that the failure rate for new businesses is relatively high, with half of new companies failing within five years. To buck those odds, you’ll need a healthy dose of confidence in yourself and your idea. 

The only solution to a fear of failure is to change your mindset. You have to see failure as an opportunity for learning and growth and stop seeing it as the end of the road, an indictment of your abilities or a stain on your character. Reading accounts by successful entrepreneurs will inspire you to see the possibilities rather than focusing only on the risks.  

6. Aversion to stress or hard work

Starting and running a business demands a lot of effort. You’ll likely be putting in long hours and dealing with stressful issues. On top of that, your first few years are apt to be highly inconsistent, with your business only making a profit some of the time. This can wreak havoc on your finances and peace of mind. If you’re not feeling up to this kind of pressure, or if you’re loath to work more than 40 hours a week, entrepreneurship may not be for you.

Again, the only way around this obstacle is to change your attitude. Remember that all this hard work will be in service to yourself, not an employer. While the risks are on you, so are the rewards.

7. Poor timing

One of the most common excuses you’ll hear (or hear yourself saying) is that it’s “just not the right time” to start a business. The truth is, there’s never a truly “right” time—you can always find some reason that today, or this month or this year isn’t ideal for launching your venture. 

But like beginning a diet on a Wednesday or joining a gym in February, the trick is to make your own right time. Microsoft was born during the oil crisis of the 1970s, while Airbnb and Uber were founded in the depths of the Great Recession. Remind yourself that the success of your business will depend not on “the times” but on you.

The Realities of Entrepreneurship

It’s true that anyone can become an entrepreneur with enough grit and persistence. Most entrepreneurs with solid ideas have a good chance of becoming successful if they remain adaptable. But it’s also important to realize that not everyone is cut out for entrepreneurship

If you’re intimidated by the stress, inconsistency and long hours associated with startup life, or if you truly love your day job and you’re afraid to leave, maybe business ownership isn’t right for you. That said, if you feel the pull of entrepreneurship but keep making excuses to avoid getting started, you owe it to yourself to challenge those excuses and try to move past them.

This article was written by Serenity Gibbons and published on Forbes.com.

6 Easy Ways to Ruin Your Retirement

6 Easy Steps to Ruin Your Retirement

Many people I know have concluded that retirement was worth waiting for and worth planning for. Those who planned well (and who are lucky enough to have good health) are generally finding this to be a very satisfying time in their lives. But those who didn’t plan well or who couldn’t save enough are finding that retirement can be difficult.

My commitment is to help people, but this week I’m switching roles so I can give you some dynamite tips for having an unhappy retirement. (Of course, what I’m really advocating is that you do not do these things.)

Don’t save enough money.

Spend (and borrow) whatever it takes to keep yourself and your family happy. You can always catch up later when you get into your peak earning years, when the kids are gone, or when you’re finally finished paying for whatever else is more important right now.

The likely result: You could find yourself in “panic mode” in your 50s and 60s. You could have to work longer than you want. Another popular choice, you could have to reduce your living standards after your work life is through. You could fall prey to persuasive salespeople (see my final tip below) who do not have your best interests at heart. Or maybe even all of the above.

Be careless about how you plan and budget for retirement expenses.

When I was an advisor, I was amazed how many investors neglected to include taxes as a cost of living in retirement. If you’re living off of distributions from a non-Roth IRA or 401(k), the full amount of those distributions is likely to be taxable. For extra credit: Don’t spend any money on a financial advisor to help you plan.

The likely result: You may go into “panic mode” when your accountant hands you an unexpected tax bill.

Lock in your expectations about your life in retirement and make rigid financial decisions.

There are plenty of ways to do this. You could sell your house and move somewhere cheaper even though you don’t know anybody there. Another option, you could buy a fixed annuity to have an income that’s certain. You could fail to establish an emergency fund. (After all, what could go wrong?) You could get sick or need surgery that isn’t covered by Medicare or other insurance.

The likely result: Things will happen that you don’t expect, probably sending you once again into “panic mode” and making you vulnerable to the pitches from all manner of enthusiastic salespeople.

Ignore inflation, since it doesn’t seem like a current problem.

Assume that $1,000 will buy roughly the same “basket of goods and services” in 2026 and 2036 that it will today. Be confident that you know what the future holds. After all, the years of high inflation that are often cited happened a long time ago. Things are different now.

The likely result: You probably won’t be thrust into “panic mode” since inflation is usually gradual. But one day you will realize with a start that things are costing a lot more than they “should,” and your income can’t keep up.

Keep all your money where it’s “safe,” in fixed income.

You’ll have lots of company among current retirees whose “golden” years are being tarnished because they have to rely on today’s historically low interest rates. Don’t just blindly invest in equities, because, as we all know, you can lose money in the stock market.

The likely result: You may start retirement with sufficient income to meet your needs, but those needs will probably increase, especially for health care, in your later retirement years. Your fixed income may be safe, but it won’t expand to meet increased needs.

Attend investment seminars and trust the presenters, then make important decisions without getting a second professional opinion.

You could follow the unfortunate example of a couple I know who, in their 50s, attended a retirement seminar and got some bad advice. They met privately with the presenter/saleswoman, then rolled their entire retirement accounts into a variable annuity. They thought they were giving themselves good returns, future flexibility and saving a lot of money in taxes.

In reality, they gave themselves huge headaches and nearly lost half their life savings. I helped them fight the unpleasant (and ultimately successful) battle to get out of their contract and recover their money.

This couple could teach us all some lessons, but the terms of their settlement makes that unlikely. If they disclose that they got their money back, or if they disclose how they were deceived and cheated, they will have to give the money back to the insurance company.

The likely results: You will be disappointed in the decisions you make. You will have many reasons to never trust an investment sales pitch again. You will have less money in retirement than if you had never heard of that particular seminar.

So now you have it: Six easy steps to ruin your retirement. I hope, of course, that you do just the opposite of each one of these. Unfortunately, I think there’s a high likelihood that somebody you know has fallen into one or more of these traps.

My advice: Learn from their mistakes.

Dubai Set To Open Heart Of Europe With 6 Outrageous Themed Islands

Floating Seahorse Villas and skyline

Based on six islands that bring the best of Europe to Dubai, The Heart of Europe is located 2 miles from the coast of Dubai and will offer up a variety of European cultural, dining, and hospitality experiences across resorts, cafés, bars, boutiques, and entertainment. Kleindienst Group developed the $5 billion master-planned tourism island destination that came a long way since its original concept was launched in 2008.

The Covid-19 outbreak may have stopped business on the mainland, but the Heart of Europe islands continued work at an aggressive pace with a goal to open Phase 1 by the end of 2020.

The development will offer “world’s first” attractions such as; the First Underwater Hotel with Gym and Spa, the First Dedicated Wedding Hotel, the World’s First Artificial Rainy Street, the First Floating and Underwater Living Experience and the World’s First Outdoor Snow Plaza.

Phase One opening of The Heart of Europe consists of, Sweden Beach Palaces, Germany Villas, Honeymoon Island, Portofino Hotel, and Côte d’Azur Resort.

Floating Seahorse underwater bathroom
The Floating Seahorse HEART OF EUROPE

THE FLOATING SEAHORSE VILLAS

(3 level villas with underwater living, glass-bottom Jacuzzi, and private man-made coral reefs teeming with marine life)

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Connected to Honeymoon Island by jetties, the Floating Seahorse Villas were designed for investors and second home end users. Consisting of over 4,000 square feet with three levels, each will feature state-of-the-art technology and outdoor climate-controlled areas. The ultimate attraction will be the underwater level with exclusive views to the coral reefs.

Germany Island
Germany Island HEART OF EUROPE

GERMANY ISLAND

(15 beachfront villas, 17 lagoon villas, offering four or five bedrooms in Bauhaus inspired style)

The horseshoe-shaped Germany Island will face onto an azure-blue lagoon with its own bar, lush gardens, white sandy beaches and bent palm trees. 

There will be traditional German carnivals, Christmas markets, festivals, and the famous Oktoberfest. Famed international chefs will offer up the finest German-style menus as well as the largest selection of German beers and wines.

Viking style villa on Sweden Island
Viking style villa on Sweden Island HEART OF EUROPE

SWEDEN ISLAND

(10 four-story palaces, 7 bedroom waterfront homes, each ground floor has a gym, sauna and snow room, while on the rooftop there will be a glass-roofed party room)

Sweden Island was inspired by Swedish Viking Vessels and will offer up palaces furnished by Bentley Homes with glass roofs and private snow rooms. The $27 million beach palace was among the first properties to sell out on the island. Restaurants will incorporate Sweden’s famed cuisine, featuring items like sour herring, meatballs, Raggmunkar, toast Skagen, smörgåsbord, Snaps, and Glὃgg.

Honeymoon Island surrounded by Floating Seahorse Villas
Honeymoon Island surrounded by Floating Seahorse Villas HEART OF EUROPE

HONEYMOON ISLAND

The unique heart-shaped Maldivian inspired island will be a couples retreat surrounded by Seahorse Floating Villas that will sell up to $5 million each. Next to the island, there is the islands Empress Elizabeth Hotel, the first dedicated seven-star wedding hotel, where couples can celebrate their union overlooking white sandy beaches and crystal clear waters.

Floating Venice Resort
The Floating Venice HEART OF EUROPE

FLOATING VENICE

(411 cabins, 180 underwater cabins, underwater lobby, gondola transportation, yacht club)

Inspired by the floating city, this will be the world’s first underwater resort with dining and accommodations located below the surface. Restaurants, bars, and shops will all be underwater with views of coral reefs and passing gondolas above. Entertainment will be offered from masked carnivals to opera performances.

The resort will have 12 restaurants and bars (three of which are underwater) and an underwater spa.

Switzerland Island Ice Cave
Switzerland Island HEART OF EUROPE

SWITZERLAND ISLAND

(Beachfront and lagoon villas, featuring master bedrooms, swimming pools and viewing decks)

Switzerland Island offers villas with water views and access to beaches, a seawater lagoon, and private swimming pools. The villa chalets utilize timber, stone, and glass design. A large blue water lagoon in the center of the island will be reminiscent of the large lakes in Switzerland.

The Côte D’Azur Resort
Monaco Côte D’Azur Resort HEART OF EUROPE

MAIN EUROPE ISLAND / COTE D’AZUR RESORT

The Côte D’Azur Resort comprises of 4 boutique hotels all named after the famous and picturesque cities of Monaco, Nice, Cannes and St. Tropez which are located in the South of France. The 4 boutique hotels will have Suites and penthouses with large balconies offering panoramic sea views.

Monaco will feature French fine-dining with an upscale contemporary décor, high-end fashion boutiques, and a large white sandy beach. There will also be lagoon swimming pools and a replica of the famed Monaco Marina.

Portofino Hotel on Italian Riviera island
Portofino Hotel on Main Europe Island HEART OF EUROPE
Aerial of Portofino Island
Aerial of Portofino Hotel HEART OF EUROPE

PORTOFINO HOTEL

(489 Princess and Queen Suites, Rooftop penthouses, Marina and Lobby with 514 aquariums, 6 Italian restaurants & bars, Women’s only social lounge and spa, Olympic size pool with underwater performances and Kids Club)

Designed to look and feel like the Italian city of Portofino, with colorful terracotta buildings, the Portofino Hotel on the Main Europe Island is a family hotel that will feature Italian-style suites with kids rooms, a kids club operated by a leading kids club operator, restaurants and cafes serving Italian cuisine and organic food. The facade will host an extraordinary hanging garden with 31,000 plants.

There are five swimming pools at the resort and even a snow-play area where children can build snowmen. Add synchronized swimming shows for entertainment.

The island will have its own fully-serviced private Paraggi Bay marina where all guests will arrive by boat. The front of hotel employees will speak Italian and the hotel will even accept Euros as currency.

Floating Seahorse Villas and skyline
Floating Seahorse Villas and skyline HEART OF EUROPE

SUSTAINABILITY

The Heart of Europe will oversee the development of more than 100,000 coral reefs and will also feature centenary Spanish olive trees that were sourced from Andalusia, Spain. The islands will also offer up the world’s first climate-controlled rainy street and snow plaza. 

The development will also use sustainable landscaping that will be pesticide-free and fungicide-free, and all green areas will use recycled water. The island will be totally car-free, use clean energy, and will offer sustainable water transportation to the guests. Designed with a zero-discharge policy and zero micro-plastics policy, the developers hope to ensure the protection of the Arabian Gulf and species of marine life that reside around the six islands.

This article was written by Jim Dobson for Forbes.com

Get Away In Your Own Backyard


Summer travel plans are up in the air right now as federal and local governments sort through the best strategies for keeping COVID-19 under control. Although it’s disappointing to put off a vacation or big family party you’ve been planning forever, there are still recreational options right in your backyard that will get your family outside safely. If you’re starting to reschedule your summer, keep these ideas in mind to make the most out of the months ahead.

Stay safe

No matter where you go or what you decide to do, social distancing is still Rule 1.

The CDC recommends that you and members of your household stay at least six feet away from other people, even in open air. If you visit a public park, avoid group activities or team sports like basketball, soccer, or football that put you in close contact with other people and shared equipment. Avoid public facilities like bathrooms and playgrounds. Hiking trails and taking bike rides are good alternatives.

Also, make sure you bring along a cloth face covering and some hand sanitizer, avoid touching your face, and wash up when you get home.

Find a nearby National Park

According to the National Park Foundation, there are 62 sites in the U.S. that include “National Park” in their name, including such famous destinations as the Grand Canyon and Yellowstone.

But before you load up the camper, keep in mind that the CDC recommends staying close to home. Long-distance travel will require stops to refuel, eat, and use public restrooms, which could expose you and your family to germs – as well as spread your own.

Also, even though parks are technically “open,” many of their public facilities aren’t. That means no restrooms or cafeterias. Maintaining a safe social distance could also be challenging at more popular parks, especially as the weather turns warmer.

If the big parks are outside your radius, our wider National Park System spans 419 sites, including historical battlefields, monuments, nature trails, rivers, and preserves. Take a look at the National Park Foundation’s database. There’s probably an interesting, beautiful spot near you that you’ve never noticed before.

Explore local options

Many state and country parks are open as well, with many of the same restrictions in place. You can take a long walk or bike ride with members of your family, as long as you can maintain safe distance from other folks. But depending on your local health guidelines, playgrounds and public restrooms might still be off limits. Check state and county websites for more information about what facilities are available and plan ahead, especially if you’re bringing children along.

Kids are one reason that your local neighborhood park is still a great option for a day out; emergency bathroom breaks and snack time are a lot easier to manage when your house is just down the block. Neighborhood parks can also be less of a crowding hazard, making it easier for your family to maintain safe social distance.

Of course, that empty playground is more tempting in a small park too. Before you head outside, have an age-appropriate chat with your kids about why they need to stay off public equipment.

REALLY local options

If your home has private yard space, wake up your inner child, especially if you have children of your own. Kids who see their parents really throwing themselves into family time are going to feel a little less anxious and sad about things they can’t do right now.

When you’re not working or teaching, leave your phone inside and make this family time special. Plan a treasure hunt. Lead a backyard yoga session. Organize a family soccer game. Plant flowers together. As the weather improves, move inside activities outside, like meals, story time, and board games.

Finally, use the space available to you to embrace some of the simplicity that this situation has created. Hang up a hammock or set up some extra reading chairs around the fire pit. One of the reasons we struggle to fill time during quarantine is that rushing through our normal lives makes us feel like we should always be doing something. Older children and adults should take advantage of extra downtime to think, reflect, and be creative.

We know summer travel is just one of many ways that the COVID-19 pandemic has disrupted your life. As our country and our local communities start to reopen, please be safe, and please be in touch if we can help in any way.

How Orangetheory Has Built a Devoted Following in a Crowded Boutique Fitness Market

From left: Jerome Kern, Ellen Latham, and David Long, co-founders of Orangetheory Fitness.
SCOTT MCINTYRE

When Ellen Latham lost her job managing a Miami spa in 2000, she was a single mother to a 9-year-old and terrified she wouldn’t find work. She used her background in physical education to make ends meet, eventually turning her at-home Pilates class into Orangetheory Fitness, a fast-growing exercise brand that in 2018 booked $180 million in revenue. 

Latham founded her Boca Raton, Florida-based company in 2010 with franchise-industry veterans David Long and Jerome Kern. They started with the premise that customers might experience better results if they were more attuned with how their individual bodies respond to exercise. The company achieves this with the help of wearables that track exercisers’ heart rates, inclines, speeds, and calories burned. The “orange” in Orangetheory refers to the “orange zone”–that is, a period of time in which a person’s heart beats at optimal efficiency. Ideally, customers should aim to spend at least 12 minutes in this zone during each 60-minute coach-led fitness class.

After hitting this point, a person’s body will work harder later to recover oxygen lost during exercise, which can accelerate the metabolism and help burn calories, says Latham. People don’t keep coming back to the gym for its orange motif, she says. “They are coming back because they get results from their workouts.”

And that’s led to significant growth for the boutique fitness brand. Indeed, in the last year, Orangetheory added 219 franchise locations and one corporate-owned studio across the U.S and India, bringing the company’s global tally to more than 1,300 franchise locations. It has also built a cult-like following among members–with some devotees getting tattoos of the company’s logo, notes Latham. Meanwhile, its two-year revenue totals shot up 341 percent since 2016, helping Orangetheory hit No. 35 on the 2020 Inc. 5000 Series: Florida list, a ranking of the fastest-growing private companies in the state.

While the company can credit much of its past success to helping customers understand their orange zones–and cultivating a community of superfans–its future success has everything to do with being able to deliver a fuller picture of customers’ health.

Part of that strategy rests in Orangetheory’s use of wearables. While the company started out simply strapping heart-rate monitors to people’s chests, in recent years it has begun selling the technology. Though customers can still borrow devices during class time, they can pick between four different versions of proprietary wearable devices. The gadgets cost as much as $129 and may be worn around the chest, wrist, or arm.

While Long says the devices account for just 10 percent of Orangetheory’s sales, the hope is the technology will become more popular with users, as the company builds out its offerings. In December, Orangetheory partnered with Apple to create a wearable that attaches to the Apple Watch, so customers can track a wide range of fitness and wellness data.

“We believed in it so much and it was a big focus of the brand early on,” says Long, Orangetheory’s CEO. “We wanted to build a wearable that was easy to use and helped us pick up massive member engagement.”

The company is also looking into joining the at-home fitness craze by releasing content on wellness topics, such as sleep, nutrition, and recovery guides. That’s a step in the right direction, says Andrea Wroble, a health and wellness analyst with the market research company Mintel–though she thinks Orangetheory could go further by streaming its classes. Home workouts have proved to be a promising way to scale for some companies–and that could deliver dividends for Orangetheory, she says.

Orangetheory’s plan to expand further into fitness tracking is a good one, because it could help the company build a stronger connection with its community, adds Wroble. “It creates a partnership with followers where the company can crowdsource ideas and the community feels seen and heard,” she says.

Still, standing out in the boutique fitness industry, which has exploded in size in recent years, may be tough for Orangetheory. In 2019, the U.S. health and fitness club industry reached an estimated $34.5 billion in revenue, amid different concepts like gyms and class studios, according to Mintel. 

What’s more, at-home fitness incumbents like Peloton and Mirror are already doing a sizable business and gaining widespread traction among users. So elbowing in on that market might be tough.

Latham isn’t deterred. “We’re not trying to create another fad in fitness. We are still appealing to huge masses and getting new clients,” she says.

To that end, Orangetheory continues to grow its physical presence, which should bolster its bottom line. Individual franchises cost between $576,000 and $1.5 million to start, which includes a $59,950 initial fee. The company hopes to reach 2,200 locations worldwide by 2025.

This article was written by Emily Canal and published by Inc.com.

Don’t Just Work for Money, Work for Meaning

Have you found your WHY?

In a recent survey of 12,000 workers worldwide conducted by the Energy Project, only 50% of respondents found meaning in their work (1). Imagine spending 40 hours a week doing meaningless work. It’s soul-sucking, but it doesn’t have to be that way.

We understand why so many people stick with jobs that don’t provide meaning—it’s the money.

And working “for the money” is not all bad. Having financial security so we can provide for our families is obviously a worthy reason.

However, as important as money is, feeling that the work we do is meaningful matters too. It’s better for our health. It’s better for our relationships. And it just makes getting up in the morning much more desirable.

In an article in The Atlantic, author and cultural commentator David Brooks said, “There is no income level at which people are not desperate for meaning.” (2)

The good news is, there are proactive things we can do to derive more meaning from our work.

For some of us, finding that meaning in work might require a company or career change. For others, it could be as simple as reframing how we think about our current jobs and finding new ways to engage our talents. Here are a few strategies for maximizing your sense of meaning from 9 to 5.

Craft a new job out of your current job.

Hospital custodian isn’t a job that most people would consider meaningful, or even desirable. But Amy Wrzesniewski, now a professor at the Yale School of Management, found that many of the custodians she talked to didn’t consider their jobs low skilled or unfulfilling (3). Instead, they felt they were part of a team that was helping people get better. They may not have been performing surgery or prescribing drugs, but they believed their job was an important part of a bigger process.

In addition to basic cleaning duties, these custodians also went out of their way to bond with patients and visitors. They talked to unvisited patients, and even kept in touch with some after they were discharged. Rather than trying to find a different job, these custodians had crafted a more meaningful job out of their assigned work.

The job crafting concept can provide a new perspective on the work you do (4). Your current job might provide opportunities for expression, connection, and creativity that you never realized were there. Try to reconfigure your approach to daily work tasks around these opportunities.

Focus on WHY, not what.

It’s easy to get so bogged down in the things we have to do at work that we lose sight of why we do them. It can be helpful to your sense of meaning to consider the end result of your work. Especially, as it impacts other people.

For those happy hospital custodians, the Why was helping the ill. Your Why doesn’t have to be that altruistic. Although, somewhere at the end of all that paperwork and accounting there’s a person with a need you helped fill. Or maybe a problem you helped solve, an experience of joy you helped deliver.

Your Why could be the meaning you find from engaging your unique skill set. Instead of sagging under the weight of all that copy you have to edit, appreciate how your work engages your writing skills. Maybe a problem along the company’s supply chain engages your critical thinking. The company itself could also be your Why, if you’re working for a business that has a mission that you really believe in. You could also find a meaningful Why in the social bonds you create with the people you work with and the customers who rely on your products and services.

Examine your mindset.

If adopting a new mindset about your work doesn’t help you find more meaning … try examining your mindsets.

Business writer Dan Pontefract believes that we have three distinct ways of thinking about our work as it relates to our sense of meaning (5):

The Job Mindset is a “paycheck mentality,” in which people perform their jobs purely for compensation.

The Career Mindset is triggered when we focus on advancement. Things like making more money, getting that big promotion, increasing our power or sphere of influence.

Finally, the Purpose Mindset engages our feelings of passion, innovation, and commitment, and an outward-looking focus on serving your employer as a whole.

Pontefract recommends spending a week tracking your mindset. At the end of every day, write down approximately how much time you’ve spent in the Job, Career, and Purpose mindsets. At the end of the week, tally up the totals.

What do these numbers tell you about your mindset at work? Are you spending the majority of your time grinding towards that Friday paycheck, or looking for ways to get ahead? Further, how does your time spent in the Job and Career mindsets compare to the time you spend in the Purpose mindset? Can you use job crafting to adjust your mindset and focus your energy more? What about how your work contributes to something bigger than money?

If you can’t balance out these mindsets in a way that allows you to find more meaning in your work, you might need to adjust your role. Or you might need to explore new career paths. Either way, we’d be happy to discuss this with you and help you position your financial resources to support your decision. Please contact our office to setup an appointment.

Sources
  1. https://www.nytimes.com/2014/06/01/opinion/sunday/why-you-hate-work.html?_r=1
  2. https://www.theatlantic.com/business/archive/2016/07/meaning-work-happiness-brooks/489920/
  3. https://www.inc.com/jessica-stillman/what-you-can-learn-about-career-satisfaction-from-a-hospital-janitor.html
  4. http://positiveorgs.bus.umich.edu/cpo-tools/job-crafting-exercise/
  5. https://hbr.org/2016/05/youre-never-done-finding-purpose-at-work

Financial Planning is About Making Your Life Plan A Reality

Many folks who have just begun working with us are surprised by how our planning process starts. We don’t begin by talking about IRAs, 401(k)s, or how much you’re saving. Instead, we begin by talking about you, not your money.

Putting your life before your financial plan.

As Life-Centered Planners, our process begins with understanding your life plan. We start by asking you about your family, your work, your home, your goals, and the things that you value the most.

Our job is to build a financial plan that will help you make your life plan a reality.

Of course, building wealth that will provide for your family and keep you comfortable today and in retirement is a part of that plan. So is monitoring your investments and assets and doing what we can to maximize your return on investment.

But we believe maximizing your Return on Life is just as important, if not more so. People who view money as an end in and of itself never feel like they have enough money. People who learn to view money as a tool start to see a whole new world of possibilities open in front of them.

Feeling free.

One of the most important things your money can do for you is provide a sense of freedom. If you don’t feel locked into chasing after the next dollar, you’ll start exploring what more you can get out of life than just more money.

Feeling free to use your money in ways that fulfill you is going to become extremely important once you retire. Afterall, you’re going to have to do something with the 40 hours every week you used to spend working! But you’re also going to have to allow yourself to stop focusing on saving and start enjoying the life that your assets can provide.

Again, having money and building wealth is a part of the plan. But it’s not THE plan in and of itself.

The earlier you start thinking about how you can use your money to balance your vocation with vacation, your sense of personal and professional progress with recreation and pleasure, and the demands of supporting your family with achieving your individual goals, the freer you’re going to feel.

And achieving that kind of freedom with your money isn’t just going to help you sleep soundly at night – it’s going to make you feel excited to get out of bed the next morning.

What’s coming next?

So, when does the planning process end?

If you’re like most of the people we work with, never.

Life-Centered Planning isn’t about hitting some number with your savings, investments, and assets. And we’re much more concerned about how your life is going than how the markets are performing.

Instead, the kinds of adjustments we’re going to make throughout the life of your plan will be in response to major transitions in your life.

Some transitions we’ll be able to anticipate, like a child going to college, a big family vacation you’ve been planning for, and, for many of you, the actual date of your retirement. Other transitions, like a sudden illness or a big out-of-state move for work, we’ll help you adjust for as necessary.

In some cases, your life plan might change simply because you want something different out of life. You might start contemplating a career change. You might decide home doesn’t feel like home anymore and start looking for a new house. You might lose yourself in a new hobby and decide to invest some time and money in perfecting it. You might decide it’s time to be your own boss and start a brand new company.

Planning for and reacting to these moments where your life and your money intersect is what we do best. Come in and talk to us about how Life-Centered Planning can help you get the best life possible with the money you have.  Visit Our Website to learn more.

We also have some really great resources on our YouTube Channel, so head on over there to check it out.

What Is a Fiduciary Financial Advisor?


“A fiduciary duty is the highest standard of care,” according to the Cornell Law Dictionary. (istockphoto)

IN APRIL 2016, A NEW word entered many investors’ vocabularies: fiduciary. Even for those who’d heard it before, the term took on a whole new meaning when the Department of Labor’s Fiduciary Rule was released. All of a sudden financial advisors fell into two camps: fiduciaries and non-fiduciaries, adding a new level of confusion – and risk – to the advisor-client relationship for many investors.

Research by digital wealth manager Personal Capital found that nearly half of Americans falsely believe all advisors are legally required to always act in their clients’ best interests. Not only is this inaccurate, but it can also be detrimental to investors who unwittingly expose themselves to biased and potentially costly advice from advisors who put their own interests before investors.

“Not all advisors are required to put you first,” says Jay Shah, chief executive officer of San Francisco-based Personal Capital. “Only financial advisors who are fiduciaries are required to act in the best interests of their clients.”

What is a fiduciary? A fiduciary is a person or legal entity, such as a bank or brokerage firm, that has the power and responsibility of acting for another (usually called the beneficiary or principal) in situations requiring total trust, good faith and honesty.

The most common example of a fiduciary is a trustee of a trust, but anyone can be a fiduciary. If you undertake to assist someone in a situation where they place total confidence and trust in you, you have a fiduciary duty to that person. Corporate officers are fiduciaries for their shareholders, as are attorneys and real estate agents for their clients. Some, but not all, financial advisors are fiduciaries.

When you’re the beneficiary of a fiduciary relationship, you give that fiduciary discretionary authority over your assets. So a fiduciary financial advisor can buy and sell securities in your account on your behalf without needing your express consent before each trade. Because fiduciaries have this discretionary authority, they’re held to a higher standard than non-fiduciary advisors.

The fiduciary duty is the highest standard of care. According to the Cornell Law Dictionary, “A fiduciary duty is the highest standard of care.” It entails always acting in your beneficiary’s best interest, even if doing so is contrary to yours. For a financial advisor, this may mean recommending a product that results in reduced or no compensation because it’s the best option for the client.Play VideoPlayUnmuteLoaded: 0%Progress: 0%Current Time 0:04/Duration 1:39

According to the Securities and Exchange Commission, which regulates registered investment advisors as fiduciaries, the fiduciary duty also entails:

  • Acting with undivided loyalty and utmost good faith
  • Providing full and fair disclosure of all material facts, defined as those which “a reasonable investor would consider to be important”
  • Not misleading clients
  • Avoiding conflicts of interest (such as when the advisor profits more if a client uses one investment instead of another or trades frequently) and disclosing any potential conflicts of interest
  • Not using a client’s assets for the advisor’s own benefit or the benefit of other clients

The commission concludes by stating that “departure from this fiduciary standard may constitute ‘fraud’ upon your clients,” which could result in the firm’s or investment advisor’s registration being revoked, the advisor getting barred from the industry or multi-million dollar disgorgement’s, among other penalties.

Fiduciaries have a “duty to care.” That means these obligations extend beyond the first meeting. A fiduciary will continually monitor a client’s investments and financial situation and adhere to best practices of conduct for the duration of the relationship.

“I think most investors would expect their advisors are doing that anyway, but that’s not always the case,” says Shelby George, senior vice president of advisor services at Manning & Napier, an investment manager in Fairport, New York. Non-fiduciaries are held to the suitability standard, a lower standard of care.

Fiduciary standard versus suitability standard. For advice to be considered merely “suitable,” the financial professional must only have an adequate reason to believe a recommendation fits the client’s financial situation, needs and other investments. For that to be the case, an advisor must obtain adequate information about the investment as well as the customer’s financial situation before making the recommendation.

The most common difference between “a fiduciary and an advisor acting under a suitability standard is the decision-making process,” George says. Before making a recommendation, fiduciaries undergo a prudent process designed to determine their client’s best interest. After making a recommendation, they discuss it thoroughly with the client to ensure there’s no misunderstanding about the recommendation and the fiduciary’s rationale for making it.

“Advisors acting under the suitability standard may, but are not required, to have the same depth of discussion,” George says. As a result, their duty to a client’s investments and financial situation ends once the trade is placed. These advisors aren’t obligated to monitor client accounts or financial situations on an ongoing basis.

Instead, the suitability standard only calls for fair dealing and best execution, which means the advisor must do the following:

  • Execute orders promptly and at the most favorable terms available, determined through “reasonable diligence”
  • Disclose material information
  • Charge prices reasonably related to the prevailing market
  • Fully disclose any conflicts of interest

The suitability standard does not require advisors to put their clients’ best interests before their own, nor must they avoid conflicts of interest.

“If your advisor isn’t a fiduciary, he can steer you into products that put more money into his pocket, as long as they’re considered suitable for you,” Shah says. For instance, when faced with two comparable investments, one of which has a higher commission, a fiduciary couldn’t recommend the pricierinvestment because paying more in fees isn’t in the client’s best interest. An advisor held to the suitability standard, however, could recommend the more expensive product provided it’s “suitable” for the client.

“Of course, not all non-fiduciaries are bad guys hoping to eat your financial lunch, but it’s important to understand that, legally, they can,” Shah says. “What’s more, their compensation structure could inherently make it difficult for them to act without conflicts of interests.”

How advisors are compensated. Generally, you pay for financial advice in one of three ways: advisory fees for fee-only advisors, commissions, or a combination of fees and commissions for fee-based advisors.

Fee-only advisors are either a flat or hourly rate, on a per- service basis or as a percentage of assets under management. They do not earn commissions or trading fees so their compensation is independent of the investments they recommend.

Commission-based advisors are paid from the sale of investments. They may also receive a fee from their financial institution for selling a particular product, collect a percentage of the assets a client invests or be paid per transaction.

The Financial Industry Regulatory Authority requires that commissions and fees be “reasonable” and disclosed at or before the time of investment. The organization’s 5 percent guideline considers any markup at or above 5 percent seldom reasonable and any commission near that threshold is subject to regulatory scrutiny and must be justified.

An advisor who receives both a flat fee and commissions is considered fee-based. Fiduciaries must be fee-only or fee-based. Non-fiduciaries can be commission-based or fee-based.

The commission structure opens the door to conflicts of interest between advisors and their clients. An advisor who is paid based on the products recommended would have an incentive to steer clients toward investments that generate a higher commission. If an advisor is compensated per transaction, clients may be encouraged to trade excessively, a practice known as churning accounts.

“Many advisers do not provide biased advice, but the harm to investors from those that do can be large,” writes the Department of Labor in the Federal Register Vol. 81, No. 68. The Obama administration’s Council of Economic Advisers estimated that advice from advisors with conflicting incentives costs IRA investors about $17 billion per year. The council estimated that recipients of conflicted advice earned 1 percent lower returns each year.

If conflicted advice is given when a 401(k) is rolled over into an IRA, it can cost the investor an estimated 12 percent of his savings over 30 years, with those savings running out more than five years sooner as a result.

These findings, coupled with investors increasingly seeking investment guidance for retirement savings outside of an employer-sponsored plan, particularly with rollovers, provided the impetus for the Department of Labor’s Fiduciary Rule.

The DOL’s Fiduciary Rule “is not moot.” The goal of the rule was “to encourage more transparency of fees, close certain payment loopholes, simplify retirement advice and improve investor education,” says Jason Schwarz, president of Wilshire Funds Management and Wilshire Analytics in Santa Monica, California. But the Fifth Circuit Court of Appeals found the rule “inconsistent with governing statutes” and said the department was “overreaching to regulate services and providers beyond its authority.”

President Trump told the department “to re-examine the Fiduciary Rule and prepare an updated economic and legal analysis” of its provisions. The department could then ask the Fifth Circuit Court of Appeals could be asked to review the rule again or it could be taken before the Supreme Court.

As the Fifth Circuit Court of Appeals writes in its decision, the case “is not moot. The Fiduciary Rule has already spawned significant market consequences.” Many firms have removed products like high-fee, low-cost mutual funds that don’t meet the fiduciary standard, Schwarz says. The result for investors is higher-quality investments and an easier investment selection process. “I think it’s not unreasonable to expect the fees advisors charge will come down along with the fees of the underlying products they use,” he says.

“It’s impossible for the industry to roll back the change that’s taking place, as much as some institutions would like to,” Shah says. Investors are demanding more objective, transparent advice and fee structures. “Smart advisors will realize this change is coming and that advice that is ‘good enough’ is no longer good enough for today’s investor.”

Meanwhile, “among the over 300,000 brokers and advisors across the industry, the delivery of fiduciary advice is uneven, erratic and irregular,” says Knut Rostad, founder and president of the Institute for the Fiduciary Standard, a nonprofit advocate of the fiduciary standard in McLean, Virginia.

*This article was written by Coryanne Hicks for U.S.News

Are You Living Life On Purpose?

young man sits atop a mountain perch and looks out over the valley below

Are You Living Your Life On Purpose?

Mike Desepoli, Heritage & #AskTheAdvisor 

Why, day in and day out, do you do the things that you do?

Because you have to? Is it because you want to? Or is it because you’ve had the same routine for years and you’re used to it?

If you feel like your life is something that just happens to you, it’s time to reassess how you’re spending your time. Financial security, stability, and creature comforts are all important. But feeling that your life has purpose will become more and more critical to your emotional and physical well-being as you age — especially when you finally retire.

A healthy sense of purpose.

Research into the area of human well-being draws a distinction between happiness (experiencing pleasure and avoiding pain) and the feelings of meaning and self-worth that we derive from our lives (1).

Too often, we focus on the former and neglect the latter. This is why the sheen wears off so quickly from a big-ticket purchase. Buying a new car or big-screen TV gives us a quick hit of pleasure. But sooner rather than later, new things become just more things that we’ve accumulated. Once that initial happiness evaporates, we find there’s no additional layer – no purpose – to improve our well-being.

Researchers have also found that people who feel like their lives have purpose live longer and show decreased risk of cardiovascular problems (2). And as you age and prepare for retirement, living with purpose helps to limit your risk of cognitive problems, such as Alzheimer’s (3).

The purpose of work and family.

Most of us tie purpose to the things that we spend the majority of our time doing: working and raising our families. Again, it’s important to draw a distinction between simple happiness and purpose.

A doctor who has to deal with ill people and mortality might not consider her job “happy” all the time. But helping people gives her that critical sense of purpose that rounds out her feelings of well-being.

Taking care of children will, at times, make even the most patient parents want to pull their own hair out. But feelings of love, connection, and responsibility make both happy family vacations and frustrating afternoons in timeout purposeful.

If you feel like your life is lacking purpose, start by looking for misalignment in these two areas. Is your job “just a job” that pays the bills? How could you pivot to a career that uses your unique gifts and skills to create purpose? Or are you working so hard that you’re missing key family events, which are also critical to your sense of purpose? Are there ways to improve your work-life balance?

It’s never too late to start living.

Many people believe that living and giving generously with their time, talents, and/or finances is a luxury they can’t afford, especially once children, mortgage payments, and college tuition enter the picture. However, research indicates that senior citizens frequently cite “dying with their music still in them” as one of the biggest areas of regret when they look back on their lives, meaning, chances they didn’t take, ideas they never pursued, or opportunities they watched pass by. It’s not money they’re regretting, it’s the sense of purpose they missed out on that would have improved their Return on Life.

Of course, not everybody can have that “perfect” job. But even in those situations, think of it not so much about the work you do, but “who you bring” to the work you do. Find ways to bring purpose to even the most mundane jobs and how that work is helping others.

And it’s never to late to find that purpose. Even seniors can discover new passions that will give their golden years purpose if they approach retirement with an active, enthusiastic mindset.

If you’re having trouble getting started, try asking yourself, “Why do I get out of bed in the morning?”

Is it to take care of your family? If so, then consider planning a family vacation for the summer. Coaching your child’s youth sports team. Turning dinner time into a group cooking activity. Or setting a regular monthly date night with your spouse.

If you find purpose in helping those in need, consider finding a volunteer position for a few hours a week.

Do you like to express yourself? Then perhaps start a blog or a digital photography website that you can work on in your free time. Turn that spare bedroom into a craft room.

And if you think your purpose is simply to make more money? Well, then maybe you need to start asking yourself better questions. Remember, money is a means, not an end.

We encourage you to come in and talk to us so that we can start a new dialogue about how your financial plan can help you get the best, most purposeful life possible with the money you have.

Sources:

https://www.ncbi.nlm.nih.gov/pubmed/11148302
https://www.ncbi.nlm.nih.gov/pubmed/26630073
https://jamanetwork.com/journals/jamapsychiatry/fullarticle/210648