Haunted House of Financial Horrors

By Heather Hoffman, Marketing and Communications Specialist

10/2024

Can you escape your money nightmares by making it through the Haunted House of Financial Horrors? Before you test it yourself, let’s follow Daniel as he goes through each room. Will he leave with his financial freedom in tow, or will he be stuck in a “Nightmare Before Retirement” forever?

The wind whistled as Daniel approached the Haunted House of Financial Horrors. There’s nothing wrong with my finances. I’ll be just fine, he tried to convince himself. The gothic columns seemed to touch the clouds, and the house was so dark, it blended into the night sky. Daniel approached the door and had to give it three big tugs before it creaked open. He was in the first room.

The cobwebbed entryway of ignored investments

The grand entryway boasted dark hardwood floors that stretched onto the walls as wooden panels. The lights were dim, but Daniel could perfectly see what the horror for this room was. There were hundreds of cobwebs around the room, each one connecting to the next. They stretched from floor to ceiling, but there was something unusual about them. As Daniel got closer, he realized they were full of reports from his investment accounts. He hadn’t looked at these reports in years. I didn’t even know I still had that account, he thought. He hadn’t rebalanced his portfolio or changed his risk tolerance as he aged closer to retirement. Daniel swatted cobweb after cobweb to see more and more statements, but each time, he was disappointed.

In order to escape, Daniel decided to mark time on his calendar for the following week to review each account’s performance. He planned to better align them with his goals and investing timeframe. If not, his investments will continue to hinder his long-term goals.

The wind tunnel of market volatility

After Daniel made his plan, a door slowly creaked open to the right of him. He turned, just as slowly, and was knocked by a gust of wind. His eyes began to water from the force of the wind. Come on, what have I gotten into now? He thought. He fought to move with each step, until he was finally fully in the tunnel. As he entered, the door slammed behind him, and the wind came to a halt. Daniel wiped his eyes, then took a look around the room. It was covered in newspaper clippings, all with similar headlines. The S&P500 rose to a record high. Investors, now is the time to enter the market! Bull market ahead. Each clipping contained something positive. As quickly as it had left, the wind came back. Daniel stumbled and his back smacked into the door. The wind picked up the clippings from the wall and threw them around the room. Just moments later, it stopped again. This time, the wall told a gloomier tale. Exit the market now! Stocks are down, and they’re continuing to drop. A bear market is here! Daniel knew where he was, now. He was in the wind tunnel of market volatility. Market highs and lows can come and go as fast as a gust of wind.

Daniel came up with a plan to escape. He grabbed a handful of the newspaper clippings and stuffed them in his pocket. He decided not to ignore the market reports, but he didn’t want to act on them either. Things change so quickly. If I acted on every report, I’d be stuck in this wind tunnel forever, constantly getting blown around. By staying calm and knowing that fluctuations are normal, Daniel was able to easily walk to the opposite end of the tunnel.

The funhouse mirror of unrealistic retirement expectations

As Daniel approached the wind tunnel door, he saw 10 more of himself walking towards him. Oh, it’s a classic funhouse mirror room. What could this have to do with my finances? He wondered. As the door shut behind him, the mirrors changed into a different scene. In one, he was sipping a drink and lounging on the beach. Another, he saw himself flying on a luxurious private jet. Each mirror showed a different scene of him relaxing, each more expensive than the last. Oh, it’s all my different retirement dreams, he realized. But why are they in the funhouse mirror room?

As Daniel asked himself the question, the mirrors returned to just mirrors, and he stared blinking at 10 views of himself. The mirrors show a warped reality. Since I haven’t been prioritizing my retirement savings, my future won’t look like what I expect, Daniel realized. In order to escape the room, he knew what he needed to do. He made a plan to look at his finances and calculate just how much his monthly income would be in retirement. From there, he can decide what his day-to-day life will look like in retirement. He can then have a clearer picture of the future and know what he needs to do to get there.

The clown room of failed estate planning

When Daniel was finished with his plan, the mirrors turned into arrows, pointing him down the hallway and to the exit door. As he got closer, the sound of circus music got clearer and louder. He put a hand on the doorknob, and he realized it wasn’t just circus music, it was clown music. Finally, something really scary, he thought as he turned the knob. The room was filled with blinking, colored lights. They lined the walls and ceiling. It was a stark difference from the rest of the house, so it took Daniel’s eyes a moment to adjust. When they did, he saw he wasn’t alone. Five clowns were in the room, each with bigger red shoes and noses than the last. They each did their own thing, one riding in a tiny car, one with a squirt gun, and another sitting in a dunk tank. What is all this about? Daniel asked himself. As Daniel stepped deeper into the room, he noticed receipts scattered around the room. He picked one up. Hey, that’s my debit card, he discovered. He picked up another, and another, and all of them listed his name as the purchaser. As he read closer, each receipt was dated long after his life expectancy. Daniel realized what this room was warning.

I’ve been meaning to put together an estate plan, but I just haven’t had the time. Is this what will happen if I don’t get around to it? All of my assets will go towards things I don’t want? Daniel knew he needed a plan for where he wanted his assets to go, or they could end up funding anything, even a circus. He decided to prioritize creating an estate plan as soon as he gets out. All these tasks were beginning to feel a little overwhelming, so Daniel decided to reach out to a financial advisor for some assistance. After setting the plan, a beam of light appeared on the dunk tank. Hm, I wonder if that means … Daniel’s thoughts trailed off as he pitched a ball towards the target. The clown sank into the water, flooding over the sides. As it did, a door opened beside the tank.

Daniel stepped through the door and was hit with fresh air and the feeling of warm sunlight. He was out! He conquered The Financial House of Horrors.

Now, it’s your turn to go inside. Don’t let your financial fears scare you this Halloween.

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.