In recent months, many companies have been struggling with numerous aspects of their business due to the economic hardships caused by the pandemic. This situation forces businesses to look for creative ways to cut costs, and one of the methods that companies may use for this is offering early retirement for some of the employees. In today’s episode, we explore what to do if you receive an early retirement offer and how to look at the offer objectively and make a pragmatic decision.
Those of you who know me know that I’m a massive baseball fan. And when it comes to famous quotes from baseball players, one person comes to mind more than any other: Yogi Berra.
Yogi Berra was a long time catcher for the Yankees and had an incredible hall of fame career. He was equally known for his head-scratching quotes, which the world has affectionately termed “Yogi-isms.” Yogi didn’t comment often on financial topics, but he does have one quote that applies nicely to retirement planning:
When we think about retirement planning, many people consider $1,000,000 as kind of a “golden threshold.” They think of a million dollars as the minimum nest egg they’ll need in order to retire comfortably. But as Yogi pointed out, being a millionaire doesn’t amount to what it used to.
So is it even possible to retire with $1,000,000 these days?
Let’s find out. In this post we’ll explore a hypothetical couple named John and Jane. They’ve saved $1,000,000 and want to retire, which is a very common situation for many Americans.
After weeks of delay caused by legal battles surrounding the election, at this point, all signs point to the fact that Joe Biden will be inaugurated as the President of the United States of America. As we discussed in detail in a previous episode, Joe Biden’s tax plan contains tax reforms that affect taxpayers in numerous ways. In today’s episode, Grant dives into some of the tax planning opportunities you should consider in the coming months.Continue reading
One thing all parents have in common is wanting what’s best for their kids. We all want to give our kids ample opportunities for success. We all want to keep them rooted in family values. And we all want them to have a fair shot at life.
When it comes to money, we typically want to give our kids ample support without spoiling them too much. Most of us don’t want our kids to win the lottery, though. We’d much rather our kids build some character through struggle and sweat equity. Nothing gives young people an appreciation for higher education than working a few arduous, low paying jobs.
From a financial perspective it’s difficult balancing these objectives. How do I help my kids financially without spoiling them? How do I teach them fiscal responsibility? How can I show them the power of long term tax advantaged compounding?
These a few questions our clients at the financial planning firm often ask. The answer is often the Roth IRA.
This post covers why that’s the case, how you can set one up for your kids, and when & how to contribute to one.
Non-qualified stock options are a great way to incentivize and reward employees and the management of publicly traded companies. We dedicated today’s episode to exploring the basics of non-qualified stock options. Throughout the episode, Grant reviews how non-qualified stock options work, tax implications, and a few things to keep in mind if you have been granted some non-qualified stock options. Stay tuned until the end of the episode, where Grant talks about some tax planning opportunities that could help you minimize the amount of tax you have to pay in the long run.
Over the last few months, we have received numerous questions from our listeners that have focused on what Grant is doing personally with his finances. In today’s episode, Grant shares two stories about his best trade and worst trade ever. He dives into why he made these investment decisions and what caused the very different outcomes of the two trades. Stay tuned until the end of the episode, where Grant shares his take on what he learned from these two trades.
Diversification is one of the first things most people learn about investing. The phrase “don’t put all your eggs in one basket” probably sounds familiar.
At its core, diversification means that when we build a portfolio we want to dump in a bunch of different investments with different risk profiles. That way they’re not all likely to fall in value at the same time. They work “together” to reduce risk.
Think of it like baking a cake. Dumping a bunch of flour in a cake pan and tossing it in the oven probably won’t turn out very good. But when you add sugar, milk, and eggs in the proper ratio, you’re a lot more likely to get a desirable result.
Typically, investors accomplish this by investing in two primary assets classes: stocks and bonds. Stocks and bonds are very different animals, which is really the whole point. In most circumstances one goes up when the other tends to go down, and vice versa.
There’s an interesting phenomenon that’s often overlooked when we view our investments this way though. While we like to think that stocks and bonds “work together” to reduce risk, they actually compete against each other in the capital markets. This behavior is a major reason we’ve seen such strong equity returns over the last few years, and will likely help to explain what kind of returns we see over the next 5-10 years & beyond.
This post will dive into this concept, what’s currently driving stock prices, and what’s likely to happen next.
Long term real S&P Composite price index vs. earnings. Source: Robert Shiller’s Online Database: http://www.econ.yale.edu/~shiller/data.htm
Long term CAPE vs. long term U.S. interest rates. Source: Robert Shiller’s Online Database: http://www.econ.yale.edu/~shiller/data.htm
A few weeks ago, The New York Times published an article that created controversy around President Trump’s tax returns. One of the most controversial claims of this article was that President Trump paid only $750 in federal income tax in the year that he won the election. In today’s episode, Grant dives into specific sections of the tax code that enabled President Trump to reduce his tax bill and how you can incorporate similar strategies in your tax planning.
Many of the investing principles we use in our portfolios today are related to a concept called modern portfolio theory. This concept was first introduced by Nobel Laureate Harry Markowitz in a paper written in 1952. In today’s episode, Grant dives into the history of modern portfolio theory, the benefits of implementing this concept, three golden rules we can derive from the modern portfolio theory, and how you can implement these three rules in your portfolio.
With the election right around the corner, Q3 was another hot quarter for global capital markets. U.S. stocks appreciated considerably, and the bond market’s outlook for the economy improved as the yield curve steepened. At the moment it seems like the markets are expecting another round of stimulus sometime soon. Rumors of different packages have swirled around both sides of the aisle over the last three months. As I write this, there appears to be a strong possibility that a bill is passed by the election. If that doesn’t happen, we may be in for the volatility so many investors are expecting in early November.
This is an odd time, an odd year, and it’s hard to believe that stocks and bonds are both in positive territory after everything that’s happened. But here we are. Now is a good time to remind ourselves of a few core investment principles:
Easy enough, right? Here’s this quarter’s market summary.
