Disaster Planning | Modernize Wealth

What should be in your Disaster Plan

If you have questions, or would like to discuss this further, we would love to hear from you; please email hello@modernizewealth.com or call us at 480.346.1283.

Teaching Kids Finance | Modernize Wealth

Teaching Finance To Your Kids

Teaching Finance To Your Kids

Teaching your kids, or your grandkids, about money is one of the greatest gifts you can give them. In this short video, our CEO Brandon Hebert shares a few tips to get kids thinking the right way about $$ from an early age!

Emotional Bias Modernize Wealth

Understanding Behavioral Bias

Learning how emotions affect decisions can make you a better investor.

Here’s a question for you… “Are you a better-than-average driver?” We all put our hand up in the Modernize Wealth office! (Brandon certainly needs to put his hand back down!)

Chances are, you answered yes. That’s because nearly three-quarters of people think they are better-than-average drivers.[1] Besides being mathematically impossible, this statistic is an example of overconfidence — and is just one illustration of how certain biases can influence our thought patterns.

These behavioral biases sometimes help us make smart decisions. But they also can cloud our judgment and lead us to make irrational decisions. That’s especially true when it comes to investing. At a time when markets are down and it’s impossible to predict what tomorrow will look like, our perceptual distortions can make a difficult situation worse.

The good news is recent evidence suggests that we can learn to overcome these biases and improve our decision-making. But first we have to understand how they work.

Here’s a look at three of the most common behavioral biases that can impair our investment decisions.


You’ve fallen victim to anchoring when your emotional attachment to the past value of an investment keeps you from recognizing its present value. For example, let’s say you own stock that was recently selling for $100 per share but has since dropped to $60. But you may be anchored to that $100 figure, convinced that’s the right value for that stock. As a result, you may hold onto your stock convinced it will soon rebound. However, there’s no guarantee that it will.

When assessing your investments, ask yourself whether your evaluations are based on the current reality of the assets or your past feelings about them. Weigh the merits of keeping an investment based on current information and whether it’s still a good fit for your financial plan.

Recency Bias

Recency bias can lead to putting too much emphasis on the latest information — and often ignoring other important data. For example, say stocks begin to climb and that uptick inspires a surge in buying. As more investors pile on, prices climb even higher, surpassing historically expensive levels. Yet investors may ignore this red flag, assuming recent trends outweigh long-term data. However, bubbles like these can pop and falling prices can potentially leave investors with heavy losses.

You can avoid recency bias by taking a long-term approach to investing. Strategies such as dollar-cost averaging, when you make a series of regular investments regardless of the market’s ups and downs, can help erase the temptation to chase returns or panic when prices fall.


Confidence is useful and, in many cases, necessary. Investing a chunk of your income in the stock market takes confidence. And it’s confidence that allows you to keep risks in perspective and sit tight in a turbulent market rather than rushing to sell your assets and locking in losses.

But overconfidence can be dangerous. It can lead you to believe that you know better than experts, that you can predict market movements successfully (spoiler: you can’t), or that you can spot investment opportunities others have missed. Worst of all, it can lead to emotional decisions in response to market moves, such as buying when prices are high and selling when prices are low.

Combat a tendency toward overconfidence by basing investment decisions not on emotion, but on careful research. Once you’ve made a decision, stick with it and avoid the temptation to try to outsmart the market by jumping in and out of investments.

Recognize the Issue

Recognizing how behavioral biases influence investing can help you keep them in check. Like any aspect of life, once you recognize an issue, it becomes easier to create a plan to address and overcome it. As a result, you’ll be more likely to make investment decisions that align with your long-term financial plan — and to avoid the irrational decisions that may knock you off track from that plan.

Contact Modernize Wealth

It’s time to set behavioral biases aside and get on the path to creating generational wealth for your family. If you would like our help with creating a financial plan, and then staying on track with your investing, please give us a call at 480.346.1283 to schedule a discovery session, or use our contact form.

Choose to partner with the Modernize Wealth team and you will benefit from the experience of wealth management specialists who can deliver innovative investment strategies, as well as bespoke financial guidance that will help you keep your plans on track.



[1] AAA, “More Americans willing to ride in self-driving cars,” 2018.


Don’t Run Out of Money Before the Recession Ends

Business Owners! Don’t Run Out of Money Before the Recession Ends

Business Owners! Don’t Run Out of Money Before the Recession Ends

One of the enduring features of an unexpected downturn is that it can instantly highlight glaring weaknesses for an otherwise successful business. During good times and expansions, it is easy to ignore unnecessary expenses, bloated payroll, and overly optimistic income assumptions. When the economy experiences an unexpected turn for the worse, expenses can be slashed, payroll trimmed, and income assumptions become more realistic.

Business cycles will be with us always, but some businesses will not be part of any recovery. Who will survive and who will falter?

Five Things to Know to Survive

Here are five things as a business owner you need to know to survive:

1. Develop a strong relationship with a good community bank

One of the surest ways to determine if a business is likely to survive is the level of available capital it has at the onset of a recession. Capitalization levels are undeniably critical and, as any business owner can tell you, when you need it the most, capital and credit are often the least available. Banks may be perfectly willing to extend credit to the marginal borrower, but when margins are squeezed and revenues fall, banks are more likely to reign in credit leaving business owners without a lifeline when they need it most. Lending standards will be raised, lines of credit may be reduced or even cut at the worst possible moment. What then?

If you have a good business relationship with your banker, that person can help you understand and plan to meet their lending standards. You need to know how much you can borrow, what collateral you’ll need to pledge, what the best types of loan might be best under various scenarios, and what your credit score will need to be to qualify. Also, the longer you have been a client of the bank, the more credibility you’ll develop with them.

2. Create a stress test for your business plan

As we at Modernize Wealth have stressed, a business plan is a must if you are to navigate through the choppy waters of a recession. A business plan would allow you to create a stress test in order to determine exactly how much of a drop in revenue your business can tolerate before you must reduce costs.

A good plan will also help you determine how much capital you currently have, and how much you might need in the event of a sudden downturn. By knowing this, you can examine your capital sources and create a strategy well in advance of when you need it. You will want to look at bank loans, SBA loans and lines of credit to see what will best fit your circumstances. Knowing what your bank is looking for in its decision-making process and underwriting standards, you can shore up any balance sheet weaknesses before they become fatal.

3. Know how your business will be judged

Do you know how you stack up relative to your competitors? Do you carry too much inventory or accounts receivable? How much liquidity do you have available to meet your obligations? Far too many business owners haven’t a really good idea how to answer these questions, or how to correct any shortcomings. Your business has value in the marketplace, but how is your business going to be valued?

Every business is measured against competitors when determining value. Value is collateral, and as such will be vital in evaluating how much credit you can get. If your financial statements show strength relative to competitors, it can help you at a time where lesser firms struggle.

4. During a recession liquidity is king

Every banking professional or investor knows well the value of a business that best manages their liquidity. Those who make a living evaluating businesses will immediately focus in on the level of certain assets that lose value quickly during a recession, especially accounts receivable, inventory and fixed assets.

Large positions in each of these can seriously damage the business owner’s prospects for obtaining capital. During recessions, payments are delayed, defaults increase, and unsold inventory can pile up as their values plummet. Equipment depreciates and can become obsolete, but during a recession their market value will also suffer a decline. There are strategies to limit the damage to your business, but you’ll need to plan ahead of time.

5. Create a recession fund

Some things never change. A recession can last from six to eighteen months, while expansions can last for ten years. Unfortunately, too many individuals fail to save in the good years, of which there are many more, to get through the lean years.

The same is true for business owners. If a business shows six to nine months of liquid capital available to sustain minimum operations and has access to enough additional credit to survive the remaining period, your chances of success increase exponentially. Assume there will be a recession at some point, often when you least expect it.   

Build your Team

The good news is that you’re not alone. A good team of professionals, including a Wealth Manager, CPA, and a banking professional can help you avoid the pitfalls of being unprepared.

They can help you create and monitor a well-crafted business plan, designed specifically to not only avoid financial distress but take advantage of opportunities created during times of adversity. Having a strong team in place is often why financially well-managed businesses can emerge from a recession stronger and more profitable than ever before. Let us help you become one of them.

If you would like to discuss having Modernize Wealth as part of your team, call us at 480.346.1283 to schedule a discovery session, or use our contact form and we will get a meeting scheduled.