For the time being, I am only performing work for clients that have already established a working relationship with me.

If you are looking for fee-only financial advice on an hourly or per project basis, please try the Garrett Planning Network’s Locate an Advisor page or use the National Association of Personal Financial Advisors’ Find an Adviser Search.

If you are looking for a fee-only adviser in the Hightstown/East Windsor area, there are three in neighboring communities:

• Ajay Kaisth, CFP®, KAI Advisors, LLC in Princeton Jct., NJ, 609-514-1122. Email
• Chuck Stanley, CFP®, Gold Shield Financial, LLC in Hamilton, NJ, 609-206-5084. Email
• David Gray, CFP®, CDFA™, Finance Arts, LLC in Princeton, NJ, 609-924-0040. Email

I’m often asked about my work with the military, so here it is.

In addition to Swan Financial Planning, I run a personal financial management program at a nearby military installation. There, I provide financial counseling, planning, and education programs to U.S. Army Soldiers, mostly National Guard and U.S. Army Reserve, who are temporarily assigned to a Warrior in Transition Unit because they are either wounded, injured, or ill. These soldiers, most of whom are returning from deployment, are unable to immediately transition back to civilian life because of their medical condition. Although I work primarily with an Army unit, I actually work for the United States Air Force because the Air Force operates the Joint Base.

Swan Financial Planning is my private practice which I operate outside of my obligations at the Joint Base in order to provide similar services to my civilian clients. Thus, most of my availability through my private practice is evenings and or weekends. Also, to avoid the potential conflict of interest, I do not and will not work with clients at Swan Financial Planning who are Department of Defense ID card holders and could otherwise access my services (or someone like me) through military channels.

And that’s it in a nutshell.

Although, I’m still in the process of completing some administrative transitions, I have started seeing clients again. Over the MLK Jr. holiday weekend, I launched many of the updated pages on this site. You can now access my new Form ADV Part 2, the standardized disclosure document required of all state and federally registered investment adviser firms and their representatives. It comes in two parts. You can now access my ADV Part 2A which is about the firm, Garrett Investment Advisors, LLC, and my ADV Part 2B which is about me.

Together, Parts 2A and 2B make up the required disclosure brochure and supplement that should be reviewed by any consumer considering hiring and working with a registered investment adviser. It is very similar to a mutual fund prospectus, except it describes an investment advisor rather than a mutual fund. These disclosures contain important information about fees and compensation, business practices, potential conflicts of interest, and much more.

While the Form ADV Part 2 does not ensure a positive working experience with a financial planner, it can go a long way toward eliminating the potential for negative experiences by identifying items you may want to avoid such as conflicts of interest created by certain sources of compensation, a history of disciplinary actions, or a complex and expensive fee structure. For the protection of consumers of investment related advice, investment advisors are required to deliver Form ADV Part 2 to new clients. For your own protection, you should read it.

Big changes are happening with my practice over the next few weeks. I will be reopening my doors in January, still as Swan Financial Planning but not the same Swan Financial Planning, LLC that I started back in October 2005. More on that in a moment. Until then, I am wrapping up a few projects and will be unable to start anything new or take on any new clients until January. You may also notice some changes to the Web site over the rest of December as I prepare to reopen in January.

So what’s changing?
Swan Financial Planning, LLC, a fee-only, New Jersey registered investment adviser firm, will soon cease to exist. I’ll be joining a group of my fellow Garrett Planning Network members as part of a new and unique multi-state, fee-only, federally registered investment adviser firm. My practice will still be known as “Swan Financial Planning,” but it will be a different registered entity. I’ll have all new forms, a new business entity, and access to several new tools.

What’s not changing?
My services, fees, and contact information will all remain the same. It will still be me, meeting with clients and providing advice. I’ll still be fee-only, no products will be sold, no commissions or referral fees will be received. My pricing won’t be changing anytime soon. I’ll still be in the same location with the same email and telephone number. This Web site is not going anywhere.

Why make these changes?
This was a business decision; I am free to maintain the status quo. Nothing is broken, but I spotted an opportunity for improvement. Closing my current one-man-doing-it-all practice and joining this new firm allows me to focus more on what I love – providing financial planning and investment advice – and spend less time on the behind-the-scenes, administrative tasks such as billing and regulatory compliance.

In addition, having several like-minded financial planners affiliated under a common registration creates economies of scale for easier access to financial planning and business resources for each of our practices. At the same time, we can preserve much of the independence that comes with operating a private practice.

Leading up to my January re-opening, you will see the links to a new Form ADV (the firm’s disclosure brochure) and the new privacy statement on my Web site. These documents will provide more information about the new firm. In the mean time, I am happy to answer any questions posted in the comments or sent to me by email. This new firm will be the first of it’s kind, and I am very excited to be a part of it.

Well, if you have to ask, it’s a sales pitch. That response may cause a chuckle or two, but it’s actually quite a useful test when you think about it. If a person’s goal is to sell you something, then how does one distinguish objective advice from a sales pitch? I don’t think there is an answer to that, so the logical solution is to avoid that situation. If you want financial advice without having to wonder if it’s a sales pitch in disguise, you’ll have to go to someone who doesn’t sell anything other than advice.

There are a lot of financial advisors who offer “free” advice. But realize, their advice is likely going to be that you buy from them.  Isn’t advising someone to buy their products the definition of a sales pitch? So, in that case, the “free” advice and a sales pitch are one and the same. Advisors that sell only advice won’t pitch products, and they’re not going to give their advice away either.

Why does this even matter? Aren’t the financial products sold by sales people the same as those a fee-for-advice financial planner might recommend? Not usually. Many financial products exist in two versions, advisor-sold and direct-sold. Advisor-sold products have additional costs when compared with their direct-sold equivalent. The extra costs are for product companies to pay the advisor for making the sale. When it comes to investing, you get what you don’t pay for because the fees you pay directly reduce your return.

Many of the financial advisors who also sell financial products are likely to disagree with me, and I suppose that is to be expected. Interestingly, many of these advisors are unable to tell the difference between financial advice and a sales pitch themselves. I do believe that the vast majority of financial sales people are well intentioned, and they probably do believe that the products with their added costs are the best solution.  After all, their income depends on believing that.

Lastly, I’d be remiss if I didn’t acknowledge that this is exactly the sales pitch you ought to expect from a financial advisor who is promoting fee-for-advice services.  And this post is nothing more than the “free advice” I’m calling into question. However, I think the relevant difference is when an advisor’s pay is tied to what they advise, not whether they advise.

You may know it as Occam’s Razor, the Law of Economy, or Law of Parsimony, or even as the principle of succinctness.  It’s the concept that the simplest solution is the best solution.  This principle is based in observation that the less assumptions required or made tend to result in the most accurate outcome, and it’s pointless to add more of anything when the exact same result can be achieved with less.

I apply this to financial planning and investing because it works. I only use and recommend three asset classes: US stock, international stock, and Treasury bonds. These investment markets are built upon solid economic principles that result in their long-term growth and can easily be owned at a very low-cost using broad market index investments. I’m not trying to beat these markets, just participate in their growth at the lowest possible cost.

When we try to do better by adding “non-traditional” asset classes or making bets by over or underweighting specific companies, industries, or sectors, our costs will increase.  People try it, hoping they will improve their results as well; however, improved results cannot be counted on or even expected because they have now introduced competition to the equation.  In other words, you are no longer just relying on the growth of markets; you are relying on profiting from the mistakes of others trying to do the exact same thing as you: counting on you to make mistakes.  That doesn’t seem simple anymore, does it?

This is easily observed in the fact that few people actually beat markets over their investing lifetimes, yet many more try and end up falling short of market returns, having been better of if they never tried in the first place.  Therefore, those who are content with a simple, low-cost approach have realized better overall investing returns than then those who are not.

If you are still not convinced that simplicity works, it may become more apparent when we consider investing in the context of financial planning.  Part of planning is figuring out how much we should save and how much we can spend in order to achieve desired future goals like a sustained and comfortable retirement. We do this without knowing:

• How long we’ll live
• What inflation will be
• What markets will return

So we are already forced to make some assumptions in order to reach financial goals, but if we try to beat markets we add a two new variables, whether and by how much we will fail or be successful.  It’s not like we can count on earning above average returns and decide to save less or spend more.  But, for what amounts to achieving the same planning result or financial goal, it becomes harder to plan and react with additional variables.  More work, more uncertainty, more stress, same end result.  Keep it simple and sleep well at night.

This week is America Saves Week and Military Saves Week. While saving ought to be a year-round activity, the purpose of this special week is to raise awareness about the need to save. Why do we need to raise awareness? It’s because most people stink at saving enough. There are some scary national statistics I could quote, but I see enough evidence of this unfortunate fact almost every single day to confidently claim there is a lot of room for improvement here.

Contrary to popular belief, the road to riches isn’t paved with winning stock picks or high margin real estate transactions. The road to riches is paved with avoiding debt. Although it’s the road less traveled, there are no shortcuts. Debt costs money and works against you. It’s that simple.

For many of us the money we earn today needs to support us twice, once in the present, and one more time in the future when we no longer have that income. We may work for 30 or 40 years but have expenses for 60 or 70 years! And thanks to inflation, those expenses will double about once every new generation. So, this is the week to take stock of your spending and savings habits to be sure they are adequate. If you’re not sure if you’re saving enough, consider establishing a baseline plan to see what changing your savings could buy you.

Take this week to examine your savings practices and consider some of these tips:

• Paying off debt is saving. It’s just after-the-fact savings and typically nowhere near as efficient because you’re usually paying more than you’re earning. So pay off your debt before saving. The exceptions: be sure to save enough for upcoming necessities, keep at least a month’s worth of expenses in savings as an emergency fund, and get any matching dollars available in your employer’s retirement plan.
• Are you saving enough to cover vehicle maintenance? Over the course of vehicle ownership, you may need to spend as much on maintenance as you do on gas. The expenses are usually weighted toward the latter years, but you can plan for them by setting aside the same amount you spend on gas each time you fill up.
• Are you saving enough to cover home maintenance? This is one of the most overlooked expenses I see among home owners. On average, most people need to spend between 1% and 3% of the value of their home on maintenance each year, just to maintain its value.  Some years are a lot less, but when it comes time to replace windows, roofs, or your heating system, it can be much more in those years. If you’re not already doing so, consider saving 2% of your home’s value each year to pay for everything from air filters and lightbulbs to new carpet and replacement appliances.
• Do you have a car payment? Even if your car is paid for, you ought to have a car payment. Paying yourself a few hundred dollars per month into an interest-bearing savings account for your next vehicle purchase will help you avoid needing a vehicle loan in the future. Earn interest on your car payment rater than paying interest from it!
• Lastly, automate your savings and pay yourself first.

Saving needs to be a priority. So in recognition of America Saves Week, I am knocking $50 of the price of my financial planning quick start and tune up appointments. If you want to spend two hours talking with me about a savings plan, paying off debt, or becoming more efficient with your money at the discounted rate of $300, you must schedule this week. The appointment can occur in the coming weeks, but  you must contact me or book online by Friday, February 25th to qualify for the discount.

Happy saving!

Due to my work load down at the Joint Base, my daytime availability for my non-military, private practice clients will be extremely limited for the next several months. However, throughout the Spring and into early Summer, I’ll be keeping evening hours one or two evenings per week, most weeks, and the occasional weekend day.  You can check my availability and schedule appointments online, and if you cannot find an available time that works for you, please send me an email: dylan {at} swanfinancialplanning {dot} com.  I will attempt to accommodate whenever possible.  Thank you.

As some of you may know, I have been working with the military, providing financial planning, counseling, and education to Service members for the last couple of years. Some of this work has been at Joint Base McGuire-Dix-Lakehurst (M-D-L), here in New Jersey and other times has been out of state. Going forward, I have accepted an extended financial advising role at Joint Base M-D-L locally.

I will continue to see my non-military clients at my office around my obligations at Joint Base M-D-L and will be adding some additional evening and occasional weekend appointment availability to my calendar.  I also plan to begin accepting new clients again in February; however, new client engagements will be limited to baseline planning services and/or the Quick Start/Tune-Up engagements, at least initially. More comprehensive planning needs will be referred to my local, trusted colleagues, Ajay Kaisth, CFP and Chuck Stanley, CFP.

I’ve been meaning to write more about this for a while, but J.D. Roth of Get Rich Slowly and author of Your Money: The Missing Manual beat me to it. I first wrote about this in my August 2009 newsletter and will repost that article on my blog.

In short, those who automate their savings by setting up automatic transfers have two ways to do this. The most common is to deposit income into their checking account and have a set amount automatically transferred to their savings account. This works well when you adjust your transfer amount as your income increases.

But as consumers, the natural result of an increase in income is to inflate our lifestyles. Think about it. Is the first thought you have after receiving a raise: “I have more money to spend” or “I have more money to save?” You may want to do both, and you can, but which is most likely to be the default.

The solution is to automate saving the other way. Deposit income into your savings account and set up an automate transfer to checking. You still have to adjust the amount with inflating expenses, but your savings will inflate automatically.

Which one are you more likely to inflate? Your savings transfer because you should or your expenses transfer because you must?

Read J.D.’s post here.

I was part of the Creative Team for Your Money: The Missing Manual as a technical reviewer. I receive no compensation for marketing the book or for book sales.