Campbell Wealth Management - June 2021

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Get More Financial Control in Your Retirement The Fourth Leg of the Stool O ne of the most important parts of any retirement is income. You need to think about where your money is coming from and how your paycheck will be replaced when you’re no longer working. The third example focuses on turning a passion into a source of income. We have a client who loves to play golf. So, he started working at a local golf course. He works three days a week and gets to golf for basically free whenever he wants. CampbellWealth.com • (703) 535-5300 • 330 John Carlyle St., Suite 400, Alexandria, Virginia 22314

This is something my stepfather, Adolph, did. He worked for a tech company in Florida. During his retirement, they called him up and asked if he wanted to do some speaking on their behalf, speaking in his area of expertise. Some of the engagements were in Florida, but he also ended up in Europe. The company paid for the flights and accommodations, and he would bring along my mom and extend their stay in those various locations. It was a working vacation during retirement. The second example comes in the form of income or rental property. We see this a lot among clients with military backgrounds. They moved around frequently and purchased a house with every move. When they left one location, instead of selling the property, they turned it into a rental. Over time, those properties get paid off, and when that happens, the rental income is almost all retirement income. Another thing we see with clients who have income properties is static income — they don’t often increase rent over time. They may grow fond of a tenant or may not be aware of changing economic conditions of an area. If the investment stays static, it’s not that great of an investment. Always look at income properties as any other investment and pay attention to how it generates income or capital gains.

The traditional model of income is the “three- legged stool.” Pension, Social Security, and savings each represent one leg of the stool. Everyone in retirement relies on these legs to one degree or another. However, there is a fourth leg of this stool that not many people talk about: passive income . This can look like different things to different people, and I have a few examples of how it can look. The first example comes in the form of part- time income. This is income derived from a consulting or part-time job held during retirement. You may end up going back to the company you worked for pre-retirement, but as a contracted employee. During tax season, for example, some of our clients who worked in tax preparation or accounting return to their previous employer on a part-time basis to help with the influx of work. The great thing about this approach is that it can be very lucrative from a retirement standpoint. If you’re doing public speaking events for a company, you may wind up in various locations around the country — or the globe — and you can turn the gig into a vacation.

Another client who’s passionate about staying in shape started giving yoga lessons. Initially, she started giving lessons for free. It was a way to motivate herself while giving back. Then people started paying her and it turned into regular classes. We also have a number of clients with musical specialties, such as playing the guitar, piano, or violin. They’ve found that providing lessons are yet another great source of income. I could keep going on with examples, but as you can see, it isn’t particularly challenging to boost your income in retirement. It really comes down to figuring out how you want to do it if you’re interested in pursuing this “fourth leg.” You can end up generating additional income to keep you going in retirement. It gives you significantly more control in retirement — and keeps you active!

Kelly Campbell

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Tell It to Mr. Miyagi ‘Too Old’ for Martial Arts?

Martial arts get added to the list of activities we can’t do as we age, right? Unless you’re doing tai chi or aikido, most people think there’s no place in contact sports for aging folks.

whether you’re looking at real-life martial artists (Henry Plée comes to mind, who practiced well into his 80s) or fighting school founders in medieval Japan — who often viewed karate as integral to their understanding of Zen and other spiritual matters, and thus essential as they got older. Netflix’s “Cobra Kai” carries on the tradition, showing us a much-older LaRusso who takes on the Miyagi role, opposite his longtime “frenemy” Johnny Lawrence. LaRusso and Lawrence have both returned to karate in middle age, and even Kreese reappears, now in his 70s and as formidable as ever. Is that realistic? You bet! According to one study, the average karate practitioner is 55 years old, and the average martial artist is 46. Many in both groups report regular sparring and contact practice. If you’re a martial artist, you may have to make some adjustments as you get older, but you’ll never have to give up your discipline entirely. And if you’re new to the world of martial arts, it’s never too late to start — as long as you find the right teacher and school!

Except, as it turns out, there is.

From hip shows like “Cobra Kai” (and its basis, “The Karate Kid”) to centuries of tradition, older people and martial arts actually mix quite well — and they can be a great throughline for an active life.

Martial arts took off in the United States back in the 1980s with the “Karate Kid” franchise, which continues today. The original movies showed us Pat Morita, an Okinawan expatriate and karate master who trains Ralph Macchio’s character, Daniel LaRusso. Morita’s Mr. Miyagi is no spring chicken, but he’s able to take LaRusso to new levels of karate expertise — and also beat down bad guy John Kreese in the process, despite Kreese being a much younger man.

Mr. Miyagi is based on a “stock” character, or archetype, from traditional Asian martial arts culture. But there’s a grain of truth to it,

When Tax Season Ends, Scam Season Begins! you don’t pay up, you will be arrested. The lie can vary from call to call, but it’s all a scare tactic to get people to pay. Telling someone they owe the IRS is a great way to get someone’s attention.

Another tax season has come to an end, which is a blessing for many. However, when tax season ends, another kind of season kicks into high gear: scam season. We’ve explored various scams in the past, but post-tax season is a good time to remind everyone to be on high alert. Scammers work year-round, but after tax season, they work overtime to take advantage of people receiving their returns. Scammers are also trying to take advantage of individuals and businesses that have benefited from recent government assistance programs, such as the Payroll Protection Program (PPP) and boosted unemployment assistance. With this “extra” money entering the economy, scammers will do everything they can to get a piece of it. The type of scammer going after this money generally relies on phone calls (both robocalls and personal calls). Once a scammer or scam group has your phone number in their system, they can keep calling until you answer — or block them. With so many phone numbers out there, they eventually call someone who falls for their tricks. The victim will hand over personal or financial information and the scammer will be on their way. One common scam is the “IRS scam.” The fraudster claims to be a representative or agent with the IRS. They say you owe money and if 2 • CampbellWealth.com

Always keep the following in mind:

• The IRS will never call, text, or email you. If the IRS needs to contact you, it will be by mail. If it’s really important, it will be by certified mail.

• Watch your Social Security number. The Social Security Administration will never cold-call you, either. Like the IRS, they'll contact you by mail first . If someone calls and asks for your SSN, hang up.

• Don’t answer numbers you aren’t familiar with. If you’re like most people these days, you don’t even bother to pick up the phone if you don’t recognize the number. The best thing we can do is to never give these annoyances the time of day!

Why Are Celebrities Investing in SPACs? Should I Consider It, Too?

T his past year, the volatility of the pandemic and independent Reddit-based investors bidding up shares of GameStop has turned Wall Street toward a trend of nontraditional investing and trading — and it continues. Starting as early as last summer, celebrities and big-time Wall Street players began investing more and more money in special purpose acquisition companies (SPACs). SPACs are shell corporations with no assets. A pool of investors sets up one of these companies with the sole purpose of raising money through an initial public offering (IPO) to eventually acquire a private company and take it public. SPACs don’t have products or services. Its only asset is typically the money raised in its own IPO. SPACs are usually given two years after its IPO to find a company to acquire, although investors rarely know what business the SPAC will acquire. (Shareholders do have to vote to approve the acquisition.) As CNBC explains, once acquired, shares of that business can be swapped for the SPAC shares (a SPAC merger), or investors can redeem their money plus interest. If a business cannot be acquired within an established time frame, the investors get their money back plus interest. Would you like to be a Campbell Wealth Management Ambassador? Would you like access to exclusive events?

Sounds lucrative, right? It can be, but not for everyone. For a long time, SPACs were seen as last-ditch efforts on the part of small start-ups that couldn’t afford to raise money on the open market. Many investors argued that if a business couldn’t raise these funds, how well could they actually perform once public? Plus, CNBC also reports that a five-year study found the average return on investment from SPAC mergers was generally less than returns from IPO investors. This should make investors wary, especially since they have no idea which company a SPAC might acquire. The risk is much higher than traditional investing. However, recent SPAC acquisitions of big corporations like DraftKings, the online sports gambling website, and a space exploration company, Virgin Galactic, have some investors hopeful. This could shift the thinking on the usefulness of SPACs and attract larger businesses to this arrangement. A SPAC may or may not be right for you, but that’s your decision to make. If you want to learn more about SPACs, speak with a trusted financial advisor to assess your risk.

Charitable Giving With Evan Beach Tuesday, June 8 at 3 p.m. Mid-Year Market Update With Kelly Campbell & Evan Beach Tuesday, July 13 at 3 p.m. Wellness & Wisdom Series

All you have to do is refer a friend. Do you know someone who: • Wants to be better prepared for retirement?

• Is looking for a second opinion regarding their portfolio? • Has gone through a major life event (death of a spouse, retirement, etc.)? Call us at ( 703) 535-5300, and let’s set up an introduction! If they are important to you, they are important to us.

To register, visit our website or email us at [email protected].

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CampbellWealth.com (703) 535-5300 330 John Carlyle St., Suite 400 Alexandria, Virginia 22314

Inside

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Let’s Talk About Retirement Income

2

‘Too Old’ for Martial Arts?

Scammers Love Tax Refunds

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SPACs Are the Latest Celebrity Trend — Should You Invest, Too?

Upcoming Events

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Are ‘Resort Bubbles’ Safe?

Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Advisory services offered only by duly registered individuals through Campbell Wealth Management, LLC (CWM), a Registered Investment Advisor. MAS and CWM are not affiliated entities.

Are ‘Resort Bubbles’ Safe? What You Need to Know Before Booking Your Tropical Trip

As vaccination numbers continue to climb and experts gain a better understanding of COVID-19, more industries are adapting. Tropical resorts in Hawaii and the Bahamas have started to host visitors in “resort bubbles,” requiring travelers to complete a series of tests before full admittance.

ask a few questions and perform a rapid COVID-19 test. Guests are then sent to their rooms, where they must await the results. If the test comes back negative, the tourist will receive a key card and can commence with their vacation. (Some resorts set the price of lodging so that if test results are positive, then the required flight home is part of the original cost, so it’s already paid for.) Other resorts require visitors to wear tracking bracelets for 72 hours upon arrival and a negative test result. After 72 hours and a second negative test, the guest is then permitted to leave the hotel grounds. This allows the hotel chain to track potential COVID-19 cases. These resort bubbles offer a potentially safe alternative for travel, but they don’t come without risks. A traveler could potentially contract COVID-19 while en route to the

But are these travel options safe?

destination, and resorts that allow guests to leave the premises risk exposure. Furthermore, these precautions may not be 100% effective. However, if you are vaccinated, have COVID-19 antibodies, or feel safe to travel, resort bubbles offer a travel alternative that can be safer than traditional vacation stays. Perhaps no industry was hit harder during the COVID-19 pandemic than the travel and hospitality industry, but with the addition of resort bubbles, the travel industry looks to return to a new normal.

That depends on your comfort level and a resort’s adherence to the rules. According to Forbes, each resort that offers this travel package may have different rules, but the gist of each experience is the same. Each resort still requires masks, unless the visitor is in their room, dining, drinking, sitting at the beach or pool, or swimming. Then, at check-in, sanitation and temperature checks are required. After the checks, tourists are directed to an on-site clinic, where nurses

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