By the time you read this, someone could have already won one of the largest lotteries in history, or that famed top prize will have increased to the largest recorded jackpot ever.

While this huge windfall sounds great, is fun to talk about around the water cooler and can give you some fun dreams of a life of luxury, I am now going to give you some GREAT advice. Don’t buy a ticket. That’s right, don’t buy a single ticket.

Why? Let’s start with your odds. Your chances of a single ticket winning are 1 in 175.2 Million. That is so minutely small, you have a better chance of becoming President of the United States. As a matter of fact, let’s compare these odds with the probability of other significant things happening to you:

Odds of:

• Beating the house in Blackjack                   1 in 2.2
• Being audited by the IRS                               1 in 175
• Being born with 11 fingers or toes            1 in 500
• Dating a supermodel                                      1 in 88,000
• Dying in an airplane accident                       1 in 354,319
• Being struck by lightning                               1 in 700,000
• Becoming President of the USA                                1 in 10,000,000
• Being killed by a mountain lion                   1 in 32,000,000
• Winning the Powerball with one ticket   1 in 175,200,000

So as you can see, your odds of being attacked and killed by a mountain lion is greater than your chances of winning, so it is not worth the money.

Worse, I have heard stories of people robbing their saving and investments of thousands of dollars and buying as many tickets as possible. Again, not a good idea. Just think of how you will feel when you lose and realize how much money you spent, it could lead you (or your spouse) to some rash behavior that would be detrimental to your health.

So that is reason number one. The second reason to forgo that ticket purchase is that a significant number of people that have monetary windfalls end up in financial ruin. Take for example Nicolas Cage who in 2009 had several of his properties auctioned off by the IRS because he owed more than $6M of back taxes. Remember Cage was one of the highest paid actors and he ended up owing way more than he could pay.

Or what about Gary Busey? Last year at the age of 67, he declared bankruptcy with less than $50K of assets and more than $1M of debt.

Or MC Hammer who in 1990 brought in $33M after his Diamond-selling album ‘Please Hammer, Don’t Hurt ‘Em’ was released. And then within six years, he found himself in bankruptcy court with $9.6M of assets compared to $13.7 of debt.

But what about other actual lottery winners?

Janite Lee, a wigmaker from North Korea who immigrated to St. Louis won $18M in 1993. She then donated significant amounts to building a church, even more to the Democrat National Committee and had several investments that went sour leaving her to file for bankruptcy in 1997, only four years later. Think about that, $18M and four years later, nothing!

Or West Virginian Jack Whittaker who won $315M Powerball on Christmas Day in 2002. He then proceeded to spend a fortune on alcohol and strip clubs. He also spent large sums of money for his 17 year old granddaughter, Brandi Bragg, who apparently began using crack cocaine. Within two years, Brandi was dead of an apparent overdose, Whittaker’s marriage fell apart and the bulk of his winnings were just a memory. Shortly after, he was quoted as saying, “I wish we had torn the ticket up.”

Devastating stories, but all factual. I am sure you, as I, remember our parents saying that, “Money is the root of all evil.” Sure sounds like it from these stories.

Finally, the third reason to forget about that lottery ticket is probably the oldest in the book. Money can’t buy you happiness. I have been in business for over two decades. In that time, I have seen plenty of unhappy multimillionaires. These have been some of the most dysfunctional families fraught with divorce, bitter law suits, estranged children and estranged parents. It really is sad. But the point of it all was that often it was the money that caused the issues. Conversely, those that did not have as much, were often happier.

So as you can see, you hold the key to your future. Take that two dollars you are about to spend and put it to better use. Don’t buy that ticket!

Good Luck, not in winning the lottery, but in having a wonderful life.

Here at Campbell Wealth Management, we like to take a different approach to retirement. Rather than focusing on which investments will return the highest yields, we prefer to change our clients’ thinking about retirement.

We call it the Retirement Transformation.

It’s a way of redefining retirement. A lot of today’s wealth managers are focused solely on their area of investment expertise. If they work in real estate, they’ll tell you to buy real estate. If they work in stock brokerage, they’ll tell you to buy stocks.

Rarely do you find a wealth manager that will encourage you to take a step back with a birds’-eye view of retirement planning in order to gain greater control over the overall process. But that’s what we do at Campbell Wealth Management. If you want to think like that, here are some steps you can take to redefine your own retirement plan to suit your own terms.

Discovery: The First Step

When we work with a new client, our first step is the process of Discovery. We ask questions like:

• How would you live in your ultimate life?
• Where are you today?
• Where do you want to go?

These questions help you set your own “financial GPS” for the future, rather than focusing on the one particular road that’s been mapped out for you by a broker.

Effective Planning

After discovery, the next step in redefining retirement is to plan. In other words, you have to define what your retirement will look like. Here’s how we help our clients do that.

• Put everything in writing. Where do you want to go? In six months – and in six years – you’ll be able to see how you’ve performed based on what you’ve written today.
• Set an ultimate destination. Like setting your GPS to a specific address, we believe in setting a specific destination for you to arrive at. Everyone’s retirement is different, which is why your “GPS” should be attuned to your desires.

Shifting from “Retirement” to “My Retirement”

The most subtle – but powerful – changes in defining retirement is to shift your focus from society’s views of retirement to your specific goals. What do you want your retirement to look like? What kind of retirement will allow you to have the most impact on your community? The questions that matter most to you need to be answered.

In that way, you’ll create your own definition for retirement.

Summertime is great for a lot of reasons. The weather is warm, the sun is out, and families plan many of their most memorable vacations while the kids are off from school.

By the time summer arrives, you want to have much of your investment work for the year finished or close to completed.

That means now is the time to clean up your investment portfolio and ensure it is on-point with all of your retirement goals and long-term strategies. Here are some tips for accomplishing just that.

• Perform a portfolio “self-diagnosis.” Reviewing your investment portfolio on a regular basis is important to check for consistency. It’s also important to clear out the cobwebs and ensure that you have the kind of balance and diversification you want out of your investments. Do you have money in currencies and commodities? In large, mid, and small cap growth stocks? These are the questions to ask yourself as you review your portfolio before summer.
• Don’t add to your slate. If you work with a single broker, you’re likely to be “sold” on a number of investments on a regular basis. These brokers, working on commission, want these sales to sound like good investments. So don’t add to your slate before summer if you’re not sure you need to in order to build the investment portfolio you need.
• Ensure security through mutual and exchange-traded funds. If your portfolio is low on these types of security investments, you may want to consider them. You’ll want to focus on funds with low fees (1% or lower is better), long manager tenures, and consistent growth over time. Don’t look for “spikes” in growth, but rather for a fund with consistency over the long-term.

By building up your portfolio and ensuring that it’s on track for the year – and the years to come – you’re free to spend your summer on vacations, relaxation, and a little fun. After all, what’s the use of an effective retirement plan if you can’t live your stress-free days to their fullest?

These days, a lot of retirees or soon-to-be retirees seem very concerned with “net worth.”

It’s understandable. Having a “high net worth” seems to correlate with successful retirement plans and the security to live a worry-free life of financial freedom.

But what exactly does “high net worth” mean? And should it be your plan to retire as a “high net worth” individual or couple?

The answer may surprise you.

When “High Net Worth” Isn’t the Goal

Like all of us, you probably have very important goals in mind for your retirement. You want your income to support a comfortable lifestyle. You want your investments to be safely invested in order to reduce complexity and secure a strong financial future. You want the freedom to enjoy the perks you couldn’t enjoy while you were working.

Nowhere on that list do you find “high net worth” as a critical goal.

That’s because you don’t necessarily have to have a high net worth in order to have a secure financial future. Yes, it helps to have a balanced and significant investment portfolio. But that portfolio is a tool to help you live life on your terms. If your income is strong and enduring, you can still live the retirement of your dreams.

When “High Net Worth” Is the Goal

Having a high net worth means you have the resources and assets at your disposal to create the lifestyle you desire. Generally, the higher your net worth, the freer you’ll be to choose your own financial destiny.

To some, this is the goal; retirement isn’t so much about a specific plan as it is about building a nest egg to secure future endeavors, or to pass on a legacy to one’s family.

While a high net worth is often the result of effective retirement planning, it’s not always the goal. But it may be the goal in your own specific case, especially if you want to build an investment portfolio that will generate income to support adventures like traveling, sailing, or any other hobby you may enjoy.

In the end, a high net worth is simply another number. It may be a powerful number, but what’s most important is that you’re able to secure the retirement lifestyle of your dreams.

It’s one of the most frequently asked questions in retirement planning, and we at Campbell Wealth Management hear some variation of it all the time.

“Is my portfolio balanced?”

“Am I properly diversified?”

“Do I have enough X or Y in my investment portfolio?”

Interestingly, the answeris almost always the same:

It depends on you.

A portfolio’s “balance” is not some sacred ideal that every single retirement investor should shoot for. Instead, your portfolio’s balance rests on your individual goals, long-term strategies, and visions for your future.

The question, therefore, shouldn’t be: “Is my portfolio balanced?”

Instead, it should be: “Is my portfolio going to get me where I need to go?”

Understanding Diversification, Risk, and Security

If achieving a balanced portfolio was your goal, your investing strategy would be incredibly easy. You could simply buy a large range of investments and wait for the cash to roll in.

As any investor knows, that’s simply not how investing works.

Instead, your portfolio “balance” should be focused on specific goals. If your goal is to reduce overall portfolio risk, invest in a variety of large, mid, and small cap growth and value stocks. Don’t diversify your portfolio for the sake of diversifying your portfolio..

Once you have your specific portfolio goals – like reducing overall risk – you then know what kind of balance to strike with your retirement portfolio.

Performing a “Portfolio Balance Checkup”

If you want to know how well-balanced your portfolio is, you can perform a “checkup” to see where you stand.

Look at your investment portfolio and see if you include the following elements:

• Large, mid, and small-cap growth stocks
• Value stocks; international, domestic, government, and corporate
• Domestic and international high-yield bonds
• Currencies and commodities

You could also consider acquiring global real estate, emerging market stocks, and a number of other investments to further diversify your portfolio.

Whatever your goals are, a balanced portfolio will help you get there. But you also want to structure your portfolio to fit your exact retirement goals and know why you’re invested the way you are. That’s when true portfolio balance is achieved.

We have all heard of the impending estate law changes coming on January 1, 2013. The changes will be significant and the larger your or your parents estate, the greater the impact.

To provide you with some background details, the best estate rules to date are currently in force. They allow a person to give away $5,120,000 to anyone they want while living or at death. Further, if you are married, your spouse can give away $5,120,000. On top of that, if you die without a good estate plan and you gave everything to your spouse, your spouse can use his exemption and yours (portability). This means a married couple could give away a total of $10,240,000. Additionally, the highest estate tax rate is currently only 35%.

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We’re well into the sizzling hot heat of summertime.  Time to kick back with your flip-flops, sunglasses and a cold drink…but wait, have you thought about whether you’ll always be able to continue these wonderful, liberating feelings of carelessness and relaxation—especially into your retirement years?  Despite all that we think we know about retirement planning, there are still so many considerations that are left out.  In this issue of our quarterly newsletter, we address two very important topics that are typically left out of the retirement conversation: Beneficiary Designations and Old 401K Accounts. Both are set up when you first sign up for your 401K and/or IRA but are nearly always forgotten about once you leave each place of employment.

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With Memorial Day in the rearview, many families are likely looking forward to this year’s summer vacation. Whether it is the annual week at the beach or a once-in-a-lifetime European tour, much time and effort goes in to planning these vacations.

If taking in scenic ocean views and absorbing the world’s cultural and historical offerings correspond with your images of retirement, it is important to put the same time and effort into planning for your retirement, as well.

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With all eyes on Europe’s financial concerns, it is easy to forget that other regions across the globe are continuing to thrive. The United States is a part of a global economy, and despite ongoing uncertainty, there are still opportunities for growth.

As we approach the midpoint of 2012, we take a look at 5 important aspects of the current market environment that every investor should know.

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Graduation season is in full-swing and a new crop of young professionals are about to enter the workforce. As our nation’s retirement picture continues to evolve, the idea of retirement may be a vague, far-off notion for these young grads.

However, we at Campbell Wealth believe that it is never too early to start planning for retirement, especially as many of today’s graduates are watching their Baby Boomer parents play catch-up with their retirement plans.

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