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The Hazards of Golf and Life

The Hazards of Golf and Life

If you think about life it’s a lot like golf, most of the time one is able to stay on course, other times one may succumb to bunkers, the rough or worse yet the water. Having the knowledge to know when to lay-up or what club to use can make all the difference in reaching your goals. When speaking with clients we begin with three major hazards, fees, taxes and the possibility of a life-changing event.

At the age of 12 when I started playing golf, I can remember wanting to be like Jack Nicklaus. Having the same ability to maintain almost unbreakable mental strength I thought would make me as great as he, but in reality I’d slice or hook my shot and just overcompensate on the next. To say the least I’m no Jack Nicklaus, but I can tell you it taught me to examine and evaluate better, and that’s one of the first things I do with clients. I examine their current portfolio and evaluate the current costs and suitability. Most of my clients are unaware of the internal expenses of their investments, as well as their Advisor’s fees. Some pay close to 3%, and are forced to take on additional risks to net the same returns as a more appropriately placed portfolio. Keep in mind, these expenses are charged in a fluctuating markets.

In the early 1900s the first golf bag was invented and the openings of the bags were only 4” with no outside pockets; making the sole purpose of these bags to just carry clubs. As interest and popularity of the game grew no longer were people playing in pastures the game advanced to the modern golf courses we have today. Over time golf has evolved and in 1939 the USGA adopted a 14-club rule, which limited the number of clubs pro golfers could carry directly affecting the need for a more suitable bag.

Tax strategies are very similar to choosing a suitable bag for your clubs. You go through a series of clubs for each hole, eventually ending with your putter, this is strategizing. The right strategy can help you limit paying unnecessary taxes.

And finally, life-changing events. What if in 1986 on the 16th Jack Nicklaus decided to use a 6 iron instead of a 5? This decision would have given him a 70% chance of landing anywhere other than the 3 feet he did from the hole. Well, his knowledge of the game enabled him to choose the 5 iron, and holing his birdie putt to win the Masters at age 46. He is still to this day the oldest winner of the Masters and second-oldest winner of any major championship. Jack Nicklaus had the knowledge to strategize, do you? Life changing events can be anything from having a child, becoming sick, having to be admitted into a nursing home, or worse passing away. According to the U.S. Department of Health and Human Services individuals over the age 65 have a 70% chance of needing some type of long-term care services and 40% needing nursing home care, while 25% of those over age 20 will at some point in life suffer a long-term disability. Worse yet what if you become one of the 20% of the workforce who can’t find a suitable job and disappear statistically.

Whether it’s golf or life, the proper knowledge and preparation are imperative for success.

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