2022 In Review - Bright Spots

I made this video and wrote this article in response to this media inquiry from Marketwatch seeking responses from Certified Financial Planner professionals.

“What are good things" that happened to Americans' finances this year. For example, medical debt is going to drop off of people's credit reports; higher interest rates has made it relatively 'easier' to save cash; many student loan borrowers saw their debts canceled (I'm referring here to borrowers with debt from for-profit colleges, not the Biden admin's broader debt cancellation effort). We're looking for input from FPA members on what they think are "good things" that happened to Americans' finances this year.”

In my opinion, one of the best results of the turmoil of 2022 is that it has been a wakeup call to Americans to pay more attention to their personal finances.

The combination of new technologies such as free brokerage accounts, fractional shares, low-cost index funds have transformed investing (and finance more broadly) into a "lazy" industry. Employees with 401ks could invest in a target date fund and pay little to no attention to their financial competence as they watched their account values go up and felt their wealth grow.

Many of my clients have explained to me that the combination of inflation and negative market returns have been a one two punch that has reminded them that they need to put resources and attention to their financial health. They needed to put time and attention into creating things like household budgets, expense worksheets, income trackers, and set targeted savings goals.

While inflation and negative market returns have produced anxiety, it has also forced many pre retirees to attempt to create a formal financial plan or seek out the help of a competent and professional financial advisor/planner sooner than they might otherwise have.

It is my belief that all Americans can benefit from a trusting and quality partnership with a fiduciary financial advisor and that the passive investing model described above has lured Americans into a "lazy do-it-yourself" model that, when put under pressure, has been very unstable.

Americans have an opportunity to come out of this tumultuous time stronger and with improved financial skills if they can use the pain as motivation to seek help and improve their financial education.

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