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Here are Birken’s Interview Questions for Prospective Financial Advisers, and our answers What is your background and experience? Tim started Brockmann Financial nearly 30 years ago and has been serving clients through asset accumulation (growing investments) over that time. I’ve been in the industry and working with Tim for 5 years, and now serve as the managing partner of Brockmann Financial as well as the primary advisor for our clients. This includes leading our expansion

Nobody is born knowing that stock prices deviate from underlying company value, that IRS income tax rates are progressive, the average cost of healthcare in retirement, etc. Anything anybody knows related to financial planning was learned. And while it’s possible to learn something on your own (often the hard way), you only retire once. As a rule of thumb, if you’re only going to do something a handful of times let alone once in your life, it’s worthwhile to find someone to h

If we had the following, we could create a spreadsheet and tell you exactly how much you could spend each year in retirement. The current value of all your assets How the value of each asset will change year by year How much cash will be wanted/needed each year We can get reasonably close to #1. So far so good. #2 includes not only your investments, but also your real estate and any other item that shows up on your balance sheet. We’ve misplaced our crystal ball, so unless yo

When I finished my internship with Tim back in 2020, I got him a thank you gift. It was a custom T-shirt that said “Brockmann’s Philosophy of Annuities.” On the back: “Overpay and Underperform.” While mostly a joke and surely an oversimplification, if you’ve been a client for many years you know Tim is light on annuities. (The two exceptions in his career: around 2008/2009 when there were very high income riders, which many of our clients still benefit from today; secondly, i

If there’s one question we answer for our clients, it’s “How much can I spend in retirement?” It’s actually a really easy question to answer. The answer is always …it depends 🙂 Of the factors that get to an actual answer tailored to a specific household, there are two very important factors that are unknown: how long you will live, and what financial markets will do until then. We can get an idea of your life expectancy with a simple health questionnaire (and otherwise plan

While not explicitly stated, it seems to be an assumption of Birken that 5 years out from retirement you don’t have enough saved (from calculations in chapter 1). While this won’t be the case for everyone, putting into practice the recommendations from this chapter will improve anyone’s retirement income. Continuing from the example above, if you have $600,000 and you need to get to $1,000,000, there are things you can control (rather than simply hoping the markets cooperate

You’ve worked for decades, and now are so close to retirement “that you can practically taste it. And yet… you’re worried. Do I have enough saved? How do I handle being laid off late in my career? What taxes will I have to pay? Should I sell the house and move somewhere cheaper? What happens if I get sick?” Birkens wrote this book to help near-retirees answer questions such as these. Chapter 1 details the first big step toward getting an objective view of things, by answering

My next read will be Emily Guy Birken’s The 5 Years Before You Retire: Retirement Planning When You Need It the Most. Not 30 years. Not 6 months. What do you need to know and do if your timeline for retirement is roughly 5 years out? If you would like to get your own copy and read along with me, please let me know! Sometimes we get people who come into our office and say, “I just retired! I’d like to talk about what I need to do.” It’s not uncommon that what they need to do i

I’ll wrap up our engagement with Smith’s work where we started. Thinking chiefly of the native tribes in North America prior to the American founding, he writes that “every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, and such of his family or tribe as are either too old, or too young, or too infirm, to go hunting and fishing. Such nations, howeve

In an earlier chapter we learned that there are three components of the price of something: Wages Profit Rent In our final chapter with Smith, he explores profit. Profit, by definition, is what’s left over after all other expenses are covered. If you are in the business of corn, after you pay for the land, pay for the labor, pay for all other expenses related to growing the corn (seed, fertilizer, tractors, storage, etc.), the money that’s left over that does not need to go t

While some people enjoy their work more or less than others, it’s rare that someone would continue to do their work if they did not receive financial compensation for it, either because it’s no longer worth their time or because they would need to do something else to afford to continue their lifestyle. But people get paid very different wages (as we saw with the minimum wage worker and heart surgeon affording different amounts of pins), so here Smith writes about what influe

Smith has established that the price of a commodity is composed of three parts: wages, profit, and rent. Here he makes a further distinction. These three combined form the natural price, which may or may not be what the commodity is actually sold for, the market price. “The actual price at which any commodity is commonly sold, is called its market price. It may either be above, or below, or exactly the same with its natural price. The market price of every particular commodit

We read last time that when we buy something, we can think of the expense not in terms of the price tag, but in terms of our labor required to exchange (through money as an intermediary) for the good or service we desire. Here, Smith explores further what makes up the price of an item. According to Smith, there are three components of the price of something: Wages Profit Rent “In the price of corn, for example, one part pays the rent of the landlord, another pays the wages or

As Smith promised last week, here in chapter 5 we will explore “what is the real measure of this exchangeable value; or wherein consists the real price of all commodities.” In other words, what does something really cost? Let’s take Smith’s book that we’re reading now, which you can buy in paperback for $20 (or Kindle for $1, like I did). You might say it costs $20 (plus tax), and you’d be right. But for Smith, that’s not the real price. You did not dig in the ground to mine

Let’s say you worked in Smith’s pin factor, and ended each day with the credit of production for 4,800 pins. How beneficial would it be if you got to take half of those home, and stop at the butcher and baker on the way to trade your pins for their meat and bread? What if they were not in need of 1,000 pins daily? What about paying your mortgage with pins? The absurdity of trading our individual production units (pins, beef, bread, etc.) seems obvious to all of us who have li

While I was getting licensed to work in financial planning, I took a job doing assembly line work for a company that makes generators and power tools. For a time, my day was composed solely of taking folded cardboard boxes, opening them up, and putting them on the conveyor belt assembly line. From there, the next person would place a metal transfer switch box for a specific line of generator inside, and then it would go down the line for the next 10 people to each do their in

I asked last time, “Left to your own skill and only what Mother Nature provides (no tools you don’t make yourself), is there a single thing you use today that you’d be able to make on your own?” My answer is simple: No. I could not make my car, let alone the rear view mirror. I could not make my clothes, let alone the thread to stitch fabric together. I could not make my oven, let alone the cast iron used to fry my eggs this morning. Thinking of Friedman’s pencil, it’s likely

Think of a pin. Walmart sells 1,000 for $11, or 1.1¢ per pin. In your current or former line of work, how long would it take you to earn 1.1¢? At the Wisconsin minimum wage of $7.25, it would take about 6 seconds. Now imagine you had to make a pin on your own. From mining ore, to refining the metal, shaping it, cutting it, sharpening it, forming the plastic head, and combining them. Would that take you more or less than 6 seconds? (Yes, it’s a rhetorical question). This is no

My next read will be a segment of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Smith shares the following example in his introduction. Thinking chiefly of the native tribes in North America prior to the American founding, he writes that “every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, and such of his family or tr

Perkins offers one final charge, and a summary of his book: “Chase memorable life experiences, give money to your kids when they can best use it, donate money to charity while you’re still alive. That’s the way to live life.” Perkins admits, “I’ve given you an impossible task: to die with zero.” While he would like for everyone to perfectly optimize for this, he knows there are too many unknown variables for each individual, and he is okay if nobody does this perfectly. In hi