Aequus Stories: The Economic Recession

    This is the first in a series of stories explaining how Aequus strategies and services make a difference in the lives of its clients. The scenarios described in this and future articles are true, but names and other identifying details about the individuals involved have been changed to protect their privacy.
    In today’s complex world, economic cycles can make even the most commonplace occasions life-changing events. Divorce, bankruptcy, the birth of a child, sale of a business, an inheritance, retirement, or an unexpected job loss, are all challenging, but commonplace occurrences. However, during a recession, many events that were once considered temporary setbacks are now capable of producing Money Shock.
    Money Shock events are those which are likely to bring you to a new and unfamiliar time and place. The way life use to work and the expectations that formed your view of the future may have abruptly changed, perhaps permanently. The initial reaction can literally be a state of shock.
  When Money Shocks occur, most individuals are forced to reevaluate their core values, and decide what is truly most important to them. They have to overcome their fears, regain their balance and move to new future. Untreated money shocks can lead to regrets, poor decision-making and, worse, prolonged anxiety. Here is one couple’s story.
BOB & KAREN
Triggering Event: The Economic Recession
  After a recession, it takes time for investors to rebuild their confidence. Some investors blame the market downturn; others blame themselves for not having made the right financial planning decisions. Bob and Karen came to Aequus after having lost a substantial portion of their portfolio. They admitted to having difficulty communicating with their previous financial planning firm.
  Once the economic downturn began to right itself, the couple started questioning the financial products and services they had chosen. Together, they discussed what kind of planning they wanted in their lives.
What was missing from interactions with their previous planner, they explained, was that he had not helped them figure out how their money connected to their values. Now, they were looking for a new and different way of partnering with their   financial advisor.
    Aequus advisors analyzed Bob and Karen’s portfolio, and listened to their stories, fears, and concerns. Next, they reorganized the couple’s financial plan, and began running scenarios to measure and test their financial strengths and deficiencies. Despite the fact that the couple was in their 50’s, with their new Aequus plan there was still ample time for their portfolio to recover. The biggest obstacle between Bob and Karen and the retirement they dreamed of was their excessive spending.
    Aequus’ Life Enhancing   Financial Planning process helped the pair explore their needs and values. A series of charts was prepared. The charts showed the couple different scenarios of what could happen to their portfolio if they continued splurging as in the past. Scenario planning helped the couple understand the consequences of their spending, and showed them what they could and couldn’t afford. The rest was up to them.
  Bob and Karen remain Aequus clients today. They are surprised that the recession didn’t impact their investments as much as they had feared. Nor did the changes that they had to make in their lives diminish the things that they valued the most: more time with family, vacations, dinners with friends, and a comfortable existence. As a result, they are closer than ever to retirement and their vision of a life well lived.