Assess Your Financial Health With A Stress Test

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The Story:

Don recently went to the doctor for a checkup and a cardio stress test. All is well, but the experience reminded him just how similar it is to the testing he puts his clients’ portfolios through to make sure they can weather life’s various financial storms. He’ll also give you five easy-to-follow rules for how to survive the next stock market crash.

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The Show:

Have you ever experienced a cardio stress test? Don just went through one during a recent health checkup and it turns out there are a lot of similarities to the kind of testing Don puts the financial plans of his clients through on every day.

[7:13] – While an actual cardio test involves running on a treadmill, being hooked up to multiple heart monitoring systems, and pushing your body through various physical challenges, the financial stress tests usually involve three key questions.

1 – How much are you spending and will be spending in retirement, making sure you take inflation into account.

2 – What kinds of risk are you exposed to inside of your investments and savings?

3 – How much tax risk are you exposed to inside your IRAs, 401(k)s and other accounts?

We’ve hopefully all learned some lessons from the 2020 stock market crash earlier this year.

Sure, it was a good 12 years between the 2008 crash and this year’s, but when will the next one hit? No one can say for sure. But with talk of new flu scare in China, political unrest in the US, and worries of a COVID-19 resurgence, it’s possible another stock hit could happen any day. Will you be better prepared for the next one? Here’s Don’s 5-Rule Market Crash Survival Guide to help you prep for the next crash, whenever it might come.

[13:09] Rule 1: Always understand how much risk you’re exposed to.

[15:09] Rules 2 & 3: Protect some of your gains as you go & be sure that you’re diversified.

[16:15] Rules 4 & 5: Don’t try to time the market and don’t panic when the crash comes.

A lot of people bailed out of the market at the very bottom and then missed the incredible rebound. Now they’re trying to get back into the market as it’s high once again. This is the opposite of what you’re supposed to do. Remember, buy low, sell high. Not the other way around.

Listen to the full episode or utilize the timestamps to jump ahead to a specific segment.

[0:35] – Life is slightly back to normal for Don.

[2:23] Don stumps Marc on some July 4th trivia. How many signers were on the Declaration of Independence?

[4:23] Have you ever gone through a cardio stress test? Don just experienced one during a health checkup.

[10:09] What does the financial stress test really look like? Don lays out three key elements.

[12:50] Let’s learn some lessons from the 2020 market crash with the 5-Rule Market Crash Survival Guide.

[17:02] Don discusses some more tweaks to this year’s Required Minimum Distribution rules. Lots of IRA law tinkering this year…

[19:55] Getting To Know Don: If you were going to own a different business, what kind of business would it be?

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What Does Economic Health Look Like?

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Phone: (732) 784-2867



About Don:

Donald W. Cash – CPA, CFP® is an independent advisor. Don began his career in 1985 as an accountant after graduating Rutgers University. In 1990 he entered the field of Estate Planning with a concentration in long term care planning. Don has been advising clients in the baby boomer and retirement market for 20 years. He has helped over 1,000 families with their planning needs. He advocates a holistic approach to Estate and Financial Planning as has relationships with other professionals including Attorneys, CPA’s, Mortgage Specialists, Insurance Specialists and Asset Managers. Don is married to Cathy and have 4 children, Carly, DJ, Nick and Tori. They live in Freehold, NJ.

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