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What are you doing to protect your financial plan from this big threat?

I get a little “tin-foil hat” sometimes.

BLUF (bottom line up front)

If you aren’t, AGGRESSIVELY, creating TAX FREE wealth, you are setting yourself up for a lot of pain.

No. Roth is not enough.

People often see the threats to their retirement investing through an entirely market driven lens.

– Inflation 📈

– Volatility 🎢

– Poor earnings 🤮

– The economy 🏭

If any number of those turn out bad, you stand to lose 📉 a chunk of money (and, worse, time.)

People often overlook one of the major events that can IMMEDIATLEY cost you 5, 10, 20, 50% of your assets.

Case in point in the article below. “But it only applies to people with big $$$!”

The point is that the federal and state government can change what they like, when they like?

Don’t believe me. For 133 years the State of Washington considered a capital gains tax to be unconstitutional. In 2022….never mind, JK, LOL.

The tax man can not only change tax RATES, but the NATURE of taxation.

Today’s capital gains could be tomorrow’s ordinary income.

This is why I am outside the box, kind of obnoxious, and occasionally cost myself potential clients by using every tool available to create tax FREE wealth in my client portfolios.

Could the IRS/State attack the Roth? Absolutely. The government could:

1️⃣ Income test Roth distributions (yeah, you might pay income tax twice.)

2️⃣ Net worth test Roth distributions

3️⃣ Take away Roth contributions based on income/net worth.

We cannot control what the legislatures do. What we can control is how we prepare.

So the question is NOT what they will do. The question is what are YOU doing to protect your financial plan.

AVOID a costly mistake with your money, have your investments reviewed.

Every have a second opinion and a doctor catch something the first one did not?

How important was that?

Sometimes taking bad investments 😒 out of a new client’s portfolio is as important as what I put in…

I recently had a client sign up because I “was the first advisor to buy them dinner who didn’t just try and sell them an annuity.”

Listen, I try and be as charitable as possible to my industry.  Different investment vehicles are complex and most advisors are trying to do the best they can.

But

I will not soft peddle when it comes to products and advisors who wreck a financial life for their own benefit.

In this case I just made a client who had a seminar “instructor” convince him to cash out his 401k and put the money in a whole life policy.

 

The taxes…

The fees….

The lost retirement years….

 

You may think “no way I would let myself be talked into something like that” but I see it every day.  I have seen hundreds of thousands of dollars wasted 💸 because someone was embarrassed and didn’t want to ask for help.  Luckily in this case I was able to rescue this client’s money.

Anyhow, I thought this video might help you avoid a costly mistake 🤢.  If you would like a review of an investment you don’t understand just fill out the below form. 👇👇👇👇👇👇👇👇👇

YOUTUBE VIDEO BELOW THE FORM.

 

The secret to MAXIMIZING your retirement income.

Two of the most common questions I get when it comes to financial planning is…

When can I retire, and how much income will I have in retirement?

The honest answer to those questions is…it depends.

There is really two components to figuring out the answers to these questions.

1️⃣How much money will you have?

2️⃣How much can you safely and comfortably take out?

These two principals fit in with the investing strategy at my firm.

1️⃣Lose less than everyone else when the market stinks.

2️⃣Do a little better than everyone else when the market is good.

So, what are the benefits of maximizing your retirement income?

  • Have more money in retirement 💰
  • Retire earlier 💪
  • Have more confidence and peace of mind when you retire 🧘
  • Leave more behind to those you care about 💸

Watch here to learn how to create the most income possible in retirement.

👇👇👇👇👇👇👇👇👇👇

!!!High income earners with large stock grants reduce your #taxes!!!

ATTN: High income earners with large stock grants.

One strategy to reduce your overall taxes ⏬ and avoid concentration risk is tax loss harvesting.

I did a portfolio review with a client who works at a local tech company who wanted help balancing 🧘‍♂️ his portfolio.

He was in the following position:

1️⃣ Annual income: $250,000
2️⃣ Company stock (from ESPP and grants): $700,000
3️⃣ A “junk drawer” of old 401ks, IRAs: $700,000
4️⃣ Short and long term realized capital gains.

When I looked at his portfolio I noticed he had short term capital losses and long term capital losses in his portfolio.

Unfortunately a lot of his company stock was granted near the company’s all time highs 🎢 . His company then reported less than enthusiastic earnings and took a 10% correction.

By using tax loss harvesting of his unrealized short and long term capital gains we were able to save him $7,000 in income tax and $13,000 in capital gains for the year.

While this is a common practice for high net worth individuals it can apply to anyone to help avoid paying unnecessary taxes 💸

hashtagfinancialadvice hashtagtaxes

How much does a financial advisor cost is the wrong question.

How much is a financial worth is a better question to ask.

Want to feel better about your money?

It’s not so much that having a #financialplan is such a fantastic, life altering thing.

Its that having uncertainty about money makes us have less confidence in the things we want to do. It makes us think about money when we should be watching our kids.

The #1 thing that starts my process is a

🗒 WRITTEN FINANCIAL PLAN 🗒

Ask yourself:

1️⃣ Would you start a 30 year road trip without a map?
2️⃣ Would you take a 30 year airplane ride relying on old tropes like the plane probably has 30 years of fuel (i.e. “the market 📉 always comes back.)

Whether you are just beginning your #retirement and #investing journey or you are standing at the gate ready to retire knowing these things are what give you the confidence and peace of mind to be able to forget about money and focus on what is important to you:

1️⃣ Where you money 💰 is coming form.

2️⃣ How much you can spend without running out 💸 .

3️⃣ That the market 📉 won’t cause you to lose sleep or sacrifice the things you want.

If you want a FREE, quick, one page financial plan just take the 2 minute quiz below.

 

No, 9% passive income isn’t “too good to be true…”

Man, when I tell people they can have over 9% passive income with some decent safety, I get my feet held to the fire.

 

I won’t say the words “too good to be true” were thrown around, but they kind of were.

 

I recently was talking with some folks who had their retirement accounts with a big box planner.  They said:

 

“Two grand kids live in California and two grand kids live in Missouri….we gave xxxxxx xxxxx $500,000, and it has turned into $460,000!  We really want to travel but we don’t feel like we can without taking some money out, and now we don’t want to do that!”

 

I built a custom income note (see my email from last week) that generated to many quesitons I thought I would make a quick explainer, check out the YouTube video below 👇to see how this investment works.

 

Market timing is a bad idea, but you can “beat the market.”

If you are 55+ years old and nearing or in #retirement

With the market a blood bath 🔻 🤮 again for this week, I thought it a good time to poke Wall St in the eye by addressing one of the biggest reasons I have seen people lose money.

Unquestionably WORSE: The TIME⌛ AND PEACE OF MIND 😟 people lose.

The reason? TIMING THE MARKET (and why this is always a bad idea.)

The solution: You can actually “beat the market” in 2 distinct ways (mathematical and the feels.).

I have three people currently considering coming aboard my practice.

1️⃣ A great guy managing his own money. “I buy and hold the S&P500, because the market always comes back.” After a little trust was built, he admitted “I currently am in cash, I usually work on gut feeling.”

2️⃣ A couple with a big Wall St firm that said “we’re tired of losing but want to make back some losses before we move.”

3️⃣ A couple who sold their house and turned $500,000 over to a Wall St firm because a friend who “has done very well” gave them a referral…(more on this, which is a timing issue.

Three points on market timing.

1️⃣ It is almost impossible. First you have to be right. Then you have to be right all the time. Just because you successfully buy high, you then have to know when to sell, then when to buy ad infinitum. Consider that, according to Barron’s JUST 7% of professionally managed funds have “beaten the market” in the last decade. These are “experts” who wake up every day, with all the most expensive research and insider knowledge, and they fail 93% of the time.

2️⃣ Its a no win scenario. Let’s say you time it right. “I want to wait till the market comes back”. If you are right and the market rebounds, but then drops (a “bull trap”) you lose everything you just made back. You also lose time. And was it a lot of stress free “fun” waiting for the market to come back? If you are wrong and the market keeps tanking 🔻 how long are you going to wait for it to come back? Consider: The S&P 500 took ❗ 12 YEARS ❗ to “come back” from the peak of the 2002 tech bubble. Do you want to put your plans off 12 years?

3️⃣ Its not worth it. Why would you put your plans, your peace of mind, your time with your family, and your money at risk when you don’t have to? If it were a matter of “sit in cash” and “buy and hold” I get it…maybe there is an argument there. But with #investments that limit or eliminate loss, but can still make double digit returns if the market rebounds available, there is no reason to try and “time the market.”

Below is an example of 2 ways to “beat the market….”

1️⃣  The first way is mathematical.  I was the first DIY investor I know.  I started by buying a single stock (TRMB if you want to know) using paper route money through my great-grandmother when I was 12.  Since then I have day traded, bought and sold options, traded futures, done the “10 stock portfolio”, 60/40, read every blog (I was a Boglehead) and mirrored Warren Buffet.   Then I started managing client’s money using one simple principle.  Reduce unnecessary risk without giving up the reward.  By using these institutionally available investments I started to notice my clients were way outperforming my personally money.  Since I have started doing for myself what I do for my clients I have a far better ROI and lost far less sleep over money.

2️⃣  The REAL way you beat the market is this.

INVEST SO THAT IT DOESN’T MATTER WHAT THE MARKET DOES.

INVEST SO THAT YOUR PEACE OF MIND HAS NOTHING TO DO WITH “THE MARKET COMING BACK”

 

Don’t listen to anyone who says they know what the market will do.

Weird thing of the day to hear from an investment advisor.

I don’t care about money.

I care about the time people are losing as their money slips away.

It’s weeks like this where my “imposters syndrome” goes away and I get motivated to help more people. Conveniently it’s weeks like this where I get the most people asking for help.

I was just talking to a prospective client about his #retirement #financialplan.

He was worried about the market being down for so long. But the other side of the coin is this: DIY investors (and people generally) do NOT like to turn the keys over to someone else when it comes to their money.

“I think I am fine buying and holding the S&P500” he said.

“Cool, the market will probably come back, keep doing that.” I told him.

“Well, how long before it does?” He asked.

“I have no idea, is that why we are having this conversation?” I asked.

As he let his guard down he admitted “yes, I sold all 1.4 million of my retirement assets to cash. I can’t stand losing any more, but I don’t want to miss out if the market recovers.”

This ☝ is why I focus on removing unnecessary risk without giving up the reward. By not doing what Wall St tells me (“tell them to buy and hold, don’t catch a falling knife, trust the institution!”) and actually putting in the work I save my clients the stress of watching their plans, their time, and their peace of mind slip away.

By having investments that both protect from the downside without giving up the upside, my clients can ignore the market and get a full night sleep knowing if the market is down 📉 they are losing less than everyone else and if the recovers 📈 they aren’t going to miss out.

It take REAL DIVERSIFICATION to make sure you retire on time.

Bad news I break to those nearing and in retirement ⛴ all the time.

“You have the illusion of “#diversification“, but unfortunately your investments didn’t protect you the way you thought.”

“But I have a 60/40 stock bond portfolio!”

“But my target date fund was supposed to protect me!”

The worst part is not that people lose money they aren’t expecting to.

The worst part is that they lose time with their family 👨‍👩‍👧‍👦 .

The worst part is they lose peace of mind 😟 .

The worst part is they lose confidence they can retire 💼.

In the video below 👇 I talk about two types of real diversification that I use in my practice to help keep #retirement on track.

1️⃣ Tax Diversification

2️⃣ Asset Class Diversification