Everyone has questions about money.  Give us two minutes and we’ll see if we can answer yours.  Mike McCormick is a Registered Investment Advisor in Bozeman, Montana. His clients have complicated financial lives that are put in perfect order and kept that way. The information in this podcast is for informational purposes only and cannot be construed as financial advice.

“When people hear I’m a financial advisor, usually one or two things happen, they either grab their wallet and run the other way, or they asked me a question about what I think they should do with their money.  My response is- where do you want to go?  Allocating your money, I think, is a lot like driving in traffic.  If you get on a busy Interstate and you have a short way to go, you want to stay safely in the right lane. You want to be ready to hit that next off ramp.  If you’re going a few miles, you’re going to want to stay near that right Lane, but you might want to move out into the faster traffic a bit to make some better time and get there more efficiently.  Finally, if you’re on a long road trip, you want to go all the way left, put it on cruise control, and put a good book on your podcast. If we were allocating our money this way, I think we’d have a lot higher success with investors satisfaction. Unfortunately, too often we get bogged down with how much your allocation should be to bonds, and how much your allocation should be to cash, international stocks, big companies, small companies.  

At McCormick Financial Advisors we don’t look at it that way. We think about different buckets.  You can put your money in for short term money funds that you’re going to use in the near term. Those should be very, very safe. FDIC insured, maybe just cash. The funds that you’re using for the midterm, for the next 10 years of living maybe.  These are to supplement your income from your job.  Maybe you’re retired. These funds have a special purpose and they should be liquid and they should be as safe as they can be while still meeting the goals and doing what they need to do. After 10 years, we’ve got a long term horizon. We’ve got an ability to take on risk. We should consider being invested in stocks and perhaps, private placements. Speculative things that have the capacity to grow. And lastly, don’t forget that risk and liquidity are also related to illiquid investments like real estate and direct ownership in companies. These can add extra risk, so factor that in when you’re determining where you’re allocating your money in terms of time.”

Thank you for turning into the Montana money minute. If you’ve got a question for us, send me an email. I also appreciate any feedback. Have a great day and remember to go easy on yourself. Life’s hard. Let’s make the money part as easy as possible.


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