After a lifetime of successful earning, it all comes down to the family legacy you’ll leave behind. How are you preserving yours?

You may have heard the old Chinese adage, “Wealth never survives three generations.” Like many Chinese proverbs, this is as true today as it was a thousand years ago. According to The Williams Group wealth consultancy, 70 percent of wealthy families lose their wealth by the second generation and a stunning 90 percent by the third.

Moreover, many people don’t feel the next generation is prepared to handle their inheritance. “Looking at the numbers, 78 percent feel the next generation is not financially responsible enough to handle inheritance,” says Chris Heilmann, U.S. Trust’s chief fiduciary executive.

At Carver Financial Services Inc., we believe you can enjoy your wealth today while also providing for future generations. As part of our Personal Vision Planning^®, our team pays particular attention to preserving your family legacy because, when managed correctly, wealth should help you invest forward — not disintegrate over time.

The most common reasons we fail to pass on our wealth often stem from a lack of meaningful communication, lack of a shared vision, a disregard for intangible wealth assets, and an erosion of trust. Wrapped into these dynamics are family discord and the destructive mentality of entitlement. We can help you overcome these challenges. We believe intergenerational wealth preservation is about more than simply transferring assets. It’s about transferring the values and legacy that accumulated that wealth in the first place. But unhealthy family dynamics often prevent an effective transfer of those assets, values and legacies.

Four Reasons Families Lose Their Legacies and Wealth

Let’s look at four reasons why people lose their family legacy and wealth.

1.  Lack of Meaningful Communication

It’s easy to get swept up in money talk. Engaging in structured, productive dialogue about the components of a lasting family legacy, however, requires more planning and preparation than most people expect. At Carver Financial Services Inc., we encourage conversations about the intangible values of family legacy. We typically guide conversations in our office by inviting multiple generations to the table at one time.

2.  Lack of a Shared Vision

Unless you establish a shared vision for your wealth, it’s likely each family member will spend the money according to his or her own plan. Yet that kind of aimless spending could lead to the deterioration of family legacy and wealth over time.

In our practice, we help each family member understand the purpose of his or her wealth so the family can arrive at decisions together — and protect them together.

3.  Disregard for Intangible Wealth Assets

Most families fail to focus on the intangible assets — such as philanthropy, higher education, community involvement, a perspective of gratitude and impactful life experiences — because they can’t easily measure the contribution of these assets with numbers. At Carver Financial Services, we believe that intangible assets are a key part of your family legacy planning.

4.  Erosion of Trust

When there’s wealth to be shared, there’s often trust to be lost. Communication and transparency are crucial in creating the kind of trust that binds a family together — rather than the secrecy that tears a family apart. While that doesn’t mean you need to disclose everything immediately, these conversations help family members feel like they can trust your plan for the future, so they are much more likely to honor it.

We are happy to work with your entire family without disclosing any personal information you do not want disseminated. These discussions can help communicate what is important to you and get future generations involved in planning for your family’s future.

Start Protecting Your Family’s Legacy and Wealth

If your family is struggling with communication, trust and the transfer of values, our team at Carver Financial Services Inc. can help you start a new dialogue and establish a framework that protects these powerful conversations for generations to come.

Please contact us at (440) 974-0808 or randy.carver@raymondjames.com to discuss your goals and objectives. There is neither a cost nor any obligation. We look forward to helping you preserve your wealth, and your family values, for generations to come.

 

 

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

 

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

 

 

 

 

 

Just when you thought there was nothing left to tax, some states are now beginning to implement a tax on people who do not have long-term care insurance.

Whether it is to address the issue of people failing to prepare for the possibility of needing long-term care or just a way to raise funds; 13 states are currently considering taxing those without a long-term care insurance policy. Those states are Alaska, California, Colorado, Hawaii, Illinois, Michigan, Minnesota, Missouri, North Carolina, New York, Oregon, Pennsylvania and Utah.

Seniors aged 65 have a nearly 70 percent chance of requiring long-term care services in the future, and on average, the stay will be for three years. The cost of this service today can easily exceed $300,000! Yet only about 7 percent of Americans own a private long-term care policy. That represents a significant gap in care for those who need it most.

Many people think they will just rely on Medicaid if they end up needing long-term care. However, you must have little to no income and assets to qualify for Medicaid. In most states, the monthly income limit is $2,382 for individuals or $4,764 for spouses. Your countable resources must be less than $2,500. Income and resources that count toward the limit include your wages, Social Security benefits, pensions, veteran benefits, bank accounts, stocks and bonds, trusts and annuities, and property and life insurance.

Medicare generally doesn’t cover long-term care stays in a nursing home or extended home care.

How We Got Here

In 1965, Medicaid was established as a joint federal and state program to provide health care to low-income individuals. While Medicaid was primarily designed to provide medical care to children and pregnant women, it also covered long-term care for the elderly and disabled.

However, Medicaid was not intended to be the primary source of funding for long-term care, and as the population aged, the strain on the program increased. We view the new tax as a way for states to try to prop up this system.

Despite the government’s involvement in funding long-term care, there is still a significant gap between the need for care and the available resources. In 2021, the median annual cost of a private room in a nursing home was more than $100,000, and the average cost of in-home care was more than $50,000 per year.

As the demand for long-term care continues to grow, many states are considering implementing a long-term care tax to help bridge this gap. This tax would be levied on all workers and would be used to fund programs that provide long-term care services to those in need. Proponents of the tax argue that it would provide a stable source of funding for these programs and would help ensure that all individuals have access to the care they need.

Washington State Led the Way

In Washington state, those who do not have a private long-term care policy are now subject to an income tax, even though Washington does not have a regular state income tax!

In Washington, where the mandate has already passed, residents were given a grace period to purchase a long-term care insurance policy to avoid the payroll tax of 58 cents on every $100 earned. Known as the Washington Cares Fund, this legislation, signed into law in 2019, provides access to a lifetime benefit amount that can be used on a wide range of long-term services and supports. W-2 workers are expected to begin contributing to the fund in July 2023 with the first benefits available in July 2026.

The launch of this program was originally planned for January 2022, but it has been delayed. Critics have cited problems with the payroll deductions for the program, which was then pushed back to July 2023, with benefits only becoming available in July 2026.

A key aim of the program is to provide relief for middle-class families that are forced to spend their life savings to receive long-term care through Medicaid. In reality, the benefit of the Washington program appears minimal.

Over time, nearly all Washington state residents will contribute premiums via a mandatory payroll tax, and the benefit is universal. Starting in 2026, participating residents will be able to claim a benefit if they have a demonstrated need for assistance with three or more activities of daily living. The maximum lifetime benefit of $36,500 will be adjusted annually for inflation; it is geared to cover about one year of care at home. Ten years of contributions are required to qualify to receive the benefit, but near-retirees will be able to receive a partial benefit starting in 2026 geared to the number of years that they have contributed.

What happens if someone doesn’t have a long-term care insurance policy? Such individuals may qualify for the state-supplied benefit, which allocates $36,500 for lifetime extended-care needs. This is just a token amount — not nearly enough to cover the full costs of long-term care needs, especially in places with a higher cost of living, like Washington, where the average cost of in-home care is around $6,700 per month. Also, the cost of nursing homes is expected to rise from $12,000 a month to an average of $23,000 per month by 2050. This is hardly enough even cover a few months of long-term care.

 

The Tax Is a New Way to Fund Medicaid

The new long-term care tax is intended to fund the Medicaid program, the country’s primary payor of long-term health-care expenses. For this reason, other states hope that introducing the new tax will relieve some of the financial pressure on the government-run Medicaid program and provide sufficient long-term care support and services to low-income citizens.

Frankly, this is just another way for states to raise money, and we expect this trend to become more widespread.

One key question is whether states give their residents enough advance notice to obtain long- term care insurance to avoid the tax. For those who are eligible, it can take approximately six to eight weeks to apply and get approved for long-term care coverage. In Washington, many residents ran out of time to obtain long-term care insurance because they were given only a short amount of time to apply.

Another concern is that the tax is based on a resident’s earned income and does not come with a cap. This means that the more money someone earns, the more tax they pay, leaving mid-to- high-income earners worried about the high tax they will need to pay.

We Will Help You Find a Suitable Solution for You

We believe long-term care insurance can be a very valuable tool for protecting both your assets and your lifestyle. While some people may have enough money to self-insure, the potential expense can be huge.

We view long-term care insurance as a way to avoid going to a nursing home or facility and have a way to pay to stay at home. The problem is that in many states, including Ohio, the availability of Long-Term Care insurance is limited and may be expensive.

There are options, though, and our team has extensive experience in finding the ideal long-term care solution to meet each client’s individual needs. For example, in addition to traditional long- term care insurance, there are so-called “hybrid policies,” which are annuities or life insurance policies that provide home health care and long-term care benefits.

Our experienced team will work with you to determine what long-term care asset-protection strategy may make sense for you. There is a myriad of long-term care insurance policies to help protect your assets — and more importantly, your lifestyle. What, if any, type of policy makes sense for you will depend on your personal circumstances. We are happy to review options that may make the most sense for you at any time.

We are monitoring the legislative changes, and how they may impact our clients.

The issue of long-term care funding is complex and multifaceted, and there are no easy solutions. While implementing a long-term care tax may help address some of the funding gaps, it is not a panacea.

We will work with you help that you have suitable protection so you can ensure the best quality of life possible, now and into the future.

Please note we are hosting a free public event on September 19^th to discussing how to help preserve your wealth. This will be held at 7 pm at The Everly (Mentor OH). See more information at https://carverfinancialservices.com/9-19-23-a-caregivers-guide-to-planning-for-those-with-dementia/

 

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

The cost and availability of Long-Term Care or Asset Based Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased and may not be suitable for all investors. As with most financial decisions, there are expenses associated with the purchase of Long-Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

 

 

 

 

The economic outlook is grim, according to the media — as usual. Here are just a few gloomy and foreboding headlines from published articles over the years that reflect this pessimistic outlook:

• “Bank Failures, Unemployment and Economic Collapse”
• “The Death of Equities” – Cover of Businessweek magazine,
• “The Great Stock Illusion: Why the Stock Market Has Peaked” – Forbes

These headlines are nothing new; they have been the norm for more than a century. The first article listed above, titled “Bank Failures, Unemployment and Economic Collapse,” appeared in the media in 1857 — more than 150 years ago! The ‘Death of Equities was on the cover of Businessweek magazine in August 1979) and the last headline was in Forbes in 1982!

It’s no wonder the public is perpetually concerned about the economy and that people resist investing or move funds out of markets. And it’s no wonder that Americans are pessimistic about their futures.

In a March 2023 Wall Street Journal–NORC Poll, a majority of Americans showed pervasive pessimism about the U.S.’s current financial state — and growing skepticism that things will improve in the future. Four out of five people surveyed said the economy is doing “not so good” or “poor.” Nearly half, according to The Wall Street Journal, expect it will get worse in the next year. Most of these answers were recorded even before the second-largest bank collapse in U.S. history.

What About “Balanced” Journalism?

Now, I’m not saying that negative events never happen; they do, but often, the media paints only the worst-case scenario and leaves out the best-case scenario.

For example, since 1979, when the second headline listed above appeared on the cover of Businessweek, the Dow Jones Industrial Average has moved from 885 to just over 33,000 — that’s a return of 3,654 percent. An amount of $10,000 invested in 1979 would be worth just over $3.8 million today! That reality certainly isn’t congruent with the doomsday economic picture the media paints for us.

One interesting fact to note about the gloom-and-doom articles the media publish is that the challenges they discuss seem to remain the same, ranging from pandemics to bank failures. It’s difficult to maintain perspective during a crisis anyway, and it’s even more difficult when we are inundated with prognosticators who tell us the sky is falling. The barrage of negative media has only escalated now that we have instant media and social media.

Practical Tips for Weathering Economic Storms

Another topic we see discussed often is inflation. And yes, inflation is quite real and quite detrimental to our financial well-being. Yet the articles published about inflation tend to do nothing more than present alarming statistics about how inflation is eating away our money. Most of these articles fail to offer strategies for navigating inflation.

For example, as prices continue to go up, it’s critical to maintain your standard of living in accordance with your income and portfolio, to at least keep pace with inflation. Our experienced team of advisors guides our clients through economic storms like inflation. We keep your personal vision in sight at all times while using your tailored financial plan to guide you through each situation.

Here are some additional strategies you can employ to potentially increase your chances of long-term success, despite what’s going on around us:

1. Have enough cash on hand to ride out any temporary volatility
2. Maintain a diversified
3. If you can and if appropriate, add to quality investments when prices
4. Have a plan and stick with
5. Keep in touch with your advisory team as we evaluate and update your plan
6. Work with experienced professionals who can help provide guidance

Crises will happen, and markets will be volatile. There have always been — and most likely always will be — reasons to panic and or avoid investing. Yet with a disciplined approach, not only can you manage these situations, but you can likely benefit from them. There are potential pitfalls in building wealth today, although we believe there are also tremendous opportunities.

And, while the specific events change over time, the ideal reactions to them are typically the same, as are the opportunities. (For example, history has proven that it is often detrimental to long-term success, to pull out of the market when the stock market experiences a downturn. When appropriate, we typically tell clients to avoid knee-jerk reactions to market fluctuations.)

We recognize that, although this is simple in theory, it is difficult in practice. That’s why we are here for you.

Our team has more than 250 years of combined experience with all kinds of market and economic conditions. We will guide you through whatever comes your way. Please reach out if you have questions or concerns or if we can otherwise be of service. Your vision is our priority, and your financial well-being is our passion. We look forward to connecting with you.

 

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Carver Financial Services and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Holding stocks for the long-term does not ensure a profitable outcome. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. The hypothetical example is for illustration purposes only and does not represent an actual investment. Actual investor results will vary. Past performance does not guarantee future results.

 

 

We all want to know “how we are doing” with our investments. Investors want some sort of guideline to compare their own portfolios’ performance with, so they tend to compare their performance to the performance of a market index.

Many people don’t realize, however, that benchmarking to an index doesn’t make sense for most investors. Also, the indexes may not represent the overall market or economy. Right now, for example, even though the S&P is up, this is due to just a few stocks. If you were to take these stocks out, the market is actually down year to date!

Here are four reasons why we do not recommend looking at the indexes to assess the performance of your own portfolio.

1.    Your Portfolio’s Holdings Don’t’ Match the Indexes’ Holdings

Still, investors want some sort of benchmark when assessing the performance of their personal investments, so they tend to compare their portfolios’ performance to that of an index, such as the Dow and the S&P 500.

The Dow Jones Industrial Average (DJIA) is a stock market index that tracks 30 large, publicly owned blue-chip companies trading on the New York Stock Exchange (NYSE) and Nasdaq. The Standard & Poor’s 500 (known as the S&P 500), is a stock market index that includes the 500 largest companies (in terms of total market capitalization) listed on the New York Stock Exchange or NASDAQ.

Although these indexes provide us with useful information about how the broader market is performing, they are not so useful for understanding how your own personal portfolio is performing. This is because the holdings in your portfolio are not necessarily the same as those in the index.

For example, if your portfolio consists of 75 percent stocks and 25 percent bonds, you cannot make an “apples-to-apples” comparison with either the Dow or the S&P 500 because both of those major indexes consist entirely of stocks. Even if you had an all-stock portfolio, you likely would own some small-company stocks, which would not be represented in the Dow because it contains just 30 large-company stocks. And if you owned stocks of non-U.S. companies, these would not be included in the S&P 500, which is made up of 500 large U.S. companies.

Your portfolio may include fixed-income, international or small-cap equity stocks that are not part of these indexes.

The diversification in your portfolio may be of benefit to you over the long term.in reducing volatility; but it will produce differences in the relative performance of your portfolio in the short term.

2.    Different Companies Make Up the Indexes Over Time

Another reason why investors need to be careful about comparing their own portfolios’ performance to an index is that the companies that make up the indexes are always changing, based on performance. The 30 companies that compose the Dow are not always the same ones. Similarly, the 500 companies that compose the S&P 500 are not always the same ones.

In fact, if you compare the list of the top 10 companies names in the S&P 500 now versus 20 years ago, do you know how many companies made both lists? Just one — Exxon Mobil. It’s the only corporation in the United States that made the list in both 2003 and 2023.

However, even though most of the names on this index have changed, most investors are still allocating to a cap-weighted S&P 500 fund. This means they are, in essence, betting on the continuance of existing trends in the market — betting that the same large names will continue to generate strong returns.

3.    The Markets Have Become Concentrated

A third reason why benchmarking doesn’t make sense for most investors is that the S&P 500 is now more concentrated than it has been in decades. For example, Apple and Microsoft now represent more than 15 percent of the overall S&P 500 index. If you add Nvidia, Facebook, Google and a few of the larger technology companies, fewer than 10 stocks represent more than 30 percent of the market cap of the entire index.

All the indicators — including the advance/decline line, the new highs and new lows list and stocks above or below relevant moving averages — show there is not a lot of participation.

Overall, the top 10 companies in the S&P 500 have accounted for as much as 35 percent of the index’s market cap in recent months. This concentration can leave your portfolio vulnerable to potential losses if interest rates remain high and stock values decline.

The market has been very narrow in terms of performance. The S&P 500 is market cap weighted. It is up approximately 9.5 percent year to date, but the equal weight S&P index is actually negative year-to-date.

We constantly screen the underlying holdings within our investment committee. We look at how funds are doing relative to their peer group, rather than the S&P 500, when so few companies are responsible for most of the gains. The S&P is generally a good index to compare the stock portion of your portfolio over time, but the comparison will lose some of its relevance in a portfolio that is composed of both stocks and bonds. Historically, reducing bond market exposure will increase performance, but it will also increase volatility.

4.    Market Indexes Aren’t Relevant to Your Personal Vision

Finally, benchmarking to market indexes doesn’t make sense because market indexes do not take into consideration your personal vision, lifestyle and financial goals.

The most important benchmark is whether you can maintain and enhance your standard of living, not some market index. Your investment strategy needs to focus on your needs, wants and vision — not a random number or value. Moreover, the index performance does not take into consideration your tax status.

We focus on you and achieving your vision. Rather than taking an investment-centric approach that looks at the portfolio and tries to determine how your life can be, we want to understand what your personal vision is for the future and then develop a holistic plan to achieve it. The investments themselves are simply a means to an end. We call this Personal Vision Planning^®.

Why are you investing? Is it to beat an index or to achieve a personal goal? Is it to select the newest investment or to live your dream? As we face volatile markets, portfolio fluctuations and dire news, we often focus on the value of our accounts, not the value they bring. If we can meet

our goals today and tomorrow, then the absolute numbers really don’t matter. Our team is here to help you do just that — meet your personal goals now and in the future.

 

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One cannot invest directly in an index. Past performance does not guarantee future results. Investing involves risk regardless of the strategy selected.

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

 

 

 

 

 

 

 

 

 

On July 16, 1999, John F. Kennedy, Jr., was piloting his plane to Martha’s Vineyard from Essex County, N.J., when he experienced a deadly phenomenon known as vertigo. This phenomenon commonly affects pilots who fly in low-visibility conditions, such as those faced during night flights or flights through clouds without the proper training.

According to the final report of the accident by the U.S. National Transportation Safety Board (NTSB), Kennedy’s disorientation caused the crash that killed him, his wife, Carolyn Bessette Kennedy, and her sister, Lauren Bessette.

What Caused JFK’s Fatal Plane Crash?

Kennedy was a non-instrument-rated pilot. He was not yet qualified to fly using instruments alone. The NTSB report noted that haze and the dark night contributed to Kennedy’s spatial disorientation and loss of control.

Pilots who cannot see the horizon must rely on instruments to tell if they are in level flight or if they are banking. A disoriented pilot can bank a plane into a fatal spiral. The report concluded that the crash occurred to pilot error.

When pilots experience vertigo, they may feel as though the aircraft is turning in a different direction than it actually is. This can lead to incorrect control inputs, which can result in a loss of control of the aircraft.  This can be similar to an investor misreading current conditions and making decisions that are detrimental to their portfolio and planning.

One of Kennedy’s flight instructors offered to fly with him that night, but Mr. Kennedy said ‘”he wanted to do it alone,” the instructor told the investigators who prepared the report.

VFR vs. IFR Flights: Different Requirements for Different Situations

VFR stands for “visual flight rules,” which means that pilots navigate their aircraft using external visual references, such as the horizon or landmarks. IFR stands for “instrument flight rules,” which means that pilots rely on their instruments to navigate their aircraft.

IFR flights require a higher level of training and certification than VFR flights. Pilots must learn how to read and interpret their instruments. Perhaps more significantly, IFR pilots must learn to trust their instruments versus their feelings about where they are.

If Kennedy had the proper training and or another pilot with him who was experienced in instruments rated for the conditions, his death could have been avoided. In the 15 months before Kennedy’s accident, he had flown either to or from the destination area about 35 times.. Within 100 days before the accident, Kennedy had completed about 50 percent of a formal instrument training course. Still, his training was not sufficient for the problematic conditions of the flight he attempted to complete.

The same is true with investing. When people rely on their own limited knowledge and take actions that are detrimental to their long-term plans, it can have devastating consequences for them and their families.

Financial Planning Also Requires That We Rely on Instruments

Just as with flying, it’s important to rely on instruments and experience, versus feelings, to avoid mistakes in financial planning. Although a financial mistake may not take your life, it can be very costly. Such mistakes can be avoided by working with an experienced team.

In today’s world, we are flooded with information. Much of it is inaccurate or incomplete, and much is irrelevant to our personal situations. If you react to the information, you obtain online or from acquaintances, it can cause a “crash” of your portfolio’s value and impact your overall financial planning.

A qualified pilot and crew could have made the Martha’s Vineyard trip easily and without incident. Their experience and their training for the conditions encountered could have made this an uneventful trip. When it comes to financial planning, our highly experienced, credentialed, and competent team can help you navigate the haze of the increasingly complex world of investments, tax management, retirement planning and other areas of financial planning.

We Are Your Financial Pilots…Or Co-Pilots, for Those Who Wish to Fly Solo

Wealth management is about reaching specific destinations safely and on time — and ideally, you want to have fun on the journey. An experienced team can help you reach your destination safely and on time while enjoying each day. Even if you want to be your own “pilot,” it is important to have a qualified team to back you up.

If you want to be the “pilot” of your own financial plan all the time, it’s important to have the proper training and temperament. It is a challenge for one individual to stay current on all the constantly changing tax laws, investment rules and other information relating to the complex field of financial planning. We believe our clients are best served by a team of experts with different expertise.

In flying, training and certification for IFR flights are essential for pilots who want to fly in challenging weather conditions. For pilots who fly only under VFR rules, it’s still essential to learn the basics of instrument flying, in case of an emergency. Pilots should also be aware of the weather conditions and be prepared to divert or cancel their flight if the weather becomes too challenging.

Our team has more than 250 years of combined experience in all types of market and economic conditions. Our advisors have some of the highest levels of training and certification, and our firm continues to be recognized by independent third parties for its ability to help clients land safely. Most importantly, we are focused on you and your vision.

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Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

 

 

 

 

 

 

 

 

 

Once again, we are hearing about the need to increase the debt ceiling and a possible government shutdown. These events are not unprecedented, yet for many, the concepts of the debt ceiling and government shutdowns can be confusing and overwhelming. Shutdowns are not uncommon; the U.S. government has shut down a total of 21 times since Congress introduced the Congressional Budget and Impoundment Control Act, which established the federal budget process in 1976.

The debt ceiling is the maximum amount that the government can legally borrow to meet its financial obligations. If Congress fails to approve a budget or continuing resolution, the government must shut down all but essential services. The relationship between these two events is complex, and their impact on the economy can be significant but not unprecedented. These events will have little effect on investors who are well positioned with a good plan.

Increases to the Debt Ceiling: A Brief History

U.S. debt ceilings date back to 1917, but it wasn’t until 1939 that they were codified into law. With the most recent hike in August of 2022, Congress brought the debt ceiling up to a whopping $22 trillion.

In recent years, raising the debt ceiling has become an increasingly divisive political issue, with both parties using it as a negotiation point. In 2011, the United States came perilously close to defaulting on its debt due to the debt ceiling crisis, which resulted in a sharp decline in the stock market and a downgrading of the country’s credit rating.

In 2013, a disagreement over funding for the Affordable Care Act caused a shutdown that lasted for 16 days. As a result of these developments, there have been further calls for the debt ceiling mechanism to be reformed.

Shutdowns in Government: A Brief History

When Congress fails to enact a budget or continuing resolution, the government temporarily stops providing services that aren’t considered essential. The first shutdown happened in 1976, but they’ve been more common as of late.

There have been a total of 21 government shutdowns, with the most recent in December 2018. The shutdown lasted 35 days, from December 22, 2018, to January 25, 2019. It was the longest shutdown in U.S. history. The cause was a disagreement between Congress and the president over funding for a border wall between the United States and Mexico.

When federal workers and contractors aren’t getting paid because of a shutdown, it can have a negative effect on the economy as a whole — and they may impact consumer confidence and be negative fodder for the media — yet shutdowns have historically had little impact on the stock market.

An LPL Financial study that examined stock market activity over 18 government shutdowns, spanning the period from 1976 to 2013, found that shutdowns have had no impact on performance — the median change in the S&P 500 was 0.0 percent. In fact, LPL’s senior market strategist noted that the S&P 500 has actually gained during each of five previous shutdowns.

Our Team Will Help You Prepare and Benefit from Uncertainty

As with any trending event, it’s important to step back and look at facts versus hype. Your financial plan should anticipate periods of volatility — including a government shutdown and/or debt ceiling — and ensure that you have cash to ride them out. Working with an experienced team can help you minimize stress and make decisions logically versus emotionally. With the proper guidance, you may be able to benefit from uncertainly around a debt ceiling debate and/or government shutdown.

We expect to hear the refrain from the media and pundits who are selling everything from newsletters to doomsday supplies that this time it’s different. It’s not. As stated, there have been 21 government shutdowns and virtually no impact on the stock market.

Our team has more than 250 years of combined experience with all kinds of market and economic conditions, including government shutdowns. We will guide you through whatever comes your way. Uncertainly can present an opportunity to benefit in the long run.

Please reach out if you have questions or concerns about current events or your portfolio or if we can otherwise be of service. Your vision is our priority, and your financial well-being is our passion. We look forward to connecting with you.

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Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.3 billion in assets for clients globally, as of March 2023. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.