Love Is Looking Together in the Same Direction

Marriage is, for many people, the foundation of a happy life. But modern living puts pressure on us in so many ways, and money is often at the core. Finding a way to build trust and openness can be difficult. We all have complicated relationships with money, which begin in our childhoods and reflect our parents’ attitudes and beliefs. There are often hidden sensitivities and danger spots that neither partner is aware of – until something crops up that creates a problem.

In addition, it can be hard to navigate through all the things that Gen X and Gen Y will potentially face:

  • Multiple careers, multiple 401(k)s
  • Complex equity compensation
  • Blended families
  • Family wealth
  • Moving to a new city or state
  • Leaving the workforce
  • Starting a business

Having a road map that begins with honest, structured conversations and allows each partner to weigh in on decision-making and feel heard can be the best way to build a long-term, respectful relationship.

The resulting document is called a prenuptial or pre-marital agreement. It was originally conceived to protect each partner throughout the marriage and simplify the proceedings in the event of a divorce.

There are still a lot of situations where a prenup is necessary. But even for couples without those factors, the process of being thoughtful about money and respectful of each other is a normal part a relationship. It can be a springboard to allowing each partner to build a professional life that satisfies them while also keeping the family and marital life on track.

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Eggs in How Many Baskets? Prioritizing Building Wealth While You Build Your Business

Employees of publicly traded companies are often granted company stock as part of the compensation package. From a portfolio management perspective, holding outsize amounts of stock in the same company that provides income can increase risk. If the business were to become wobbly, not only would the stock decrease in value, but the employee could also potentially find themselves out of a job. Employees who are granted stocks often mitigate this risk by selling some of the company stock and reinvesting it in other assets, to diversify growing wealth away from the source of income.

But what about when you own your business? The situation becomes more complex. One strategy that’s often followed is to put everything except living expenses back into the business while you are growing it, and then sell part of the business or take on a strategic investor to help you begin to diversify elsewhere. Retirement planning is put on the back burner until the business has grown to a point where the business can be monetized.

We think there is a more thoughtful approach that may work for business owners.

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August Market Commentary: Will a Month of Fresh Data Change the Fed’s Aggressive Stance?

July Recap and August Outlook

July marked the best month for the markets since November 2020.

What happened, after the rout of the first half? Some ideas:

  • It’s a bear market rally sparked by better-than-expected earnings
  • Inflation has really peaked or is near a peak, and the Fed is newly dovish after September, with lower rate increases in November and December and a decrease (!) mid-2023

The fly in the ointment? That pesky second quarter GDP contraction that could be interpreted as a sign that we are in or near a recession. But there is other, more positive data too.

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GMB Ep #140: Here’s Exactly What To Do With Your Old Life Insurance Policy

In our financial planning firm, we come across many people who are raising the question of whether or not their old insurance policies are worth maintaining. However, it is important to know that there are certain ramifications and complexities are associated with getting rid of an insurance policy. In this episode, Grant dives deep into important considerations related to choosing, maintaining, or terminating insurance policies.

 

 

Show Notes

[02:28] Purpose of Insurance – Grant discusses the purpose of insurance policies and how they create a safety net for you and your loved ones.

[05:50] Do You Really Need Insurance? – Grant explains how to determine whether you really need life insurance, given the nature of your existing insurance policies, your financial status, and income streams.

[09:08] Types of Insurance – Grant describes the two main types of life insurance and how to determine which is the right type of policy for you.

[13:00] Cost Breakdown – Grant explains the cost breakdown of insurance policies.

[17:01] What to do With a Permanent Policy – Grant shares some options for people who no longer need their permanent policy.

[28:33] The Right Option – Grant explains how he helps clients decide which option is best depending on their financial status and goals.

[31:59] Insurance Products That Actually Make Sense – Grant shares his take on some of the legitimate use cases for some common insurance products.

 

Resources

GMB Ep #139: Using Financial Data to Manage Your Small Business with Anne Gannon

Data-driven decisions are a key factor in the success of any modern business. Although larger businesses tend to be very good at making data-driven decisions, this isn’t always the case for small business owners. This week on Grow Money Business, we speak with a professional who helps small businesses use the financial data that they can have at their fingertips to make better decisions. Anne Gannon, the principal and the founder of The Largo Group, shares her wisdom on how and why business owners should utilize the power of data to grow their businesses.

 

 

Show Notes

[02:06] Anne’s Story – We start the conversation with a brief look at Anne’s career and what her firm, The Largo Group, offers to small businesses.

[06:00] Cashflow – Anne shares some strategies for small business owners to analyze the cash flow and review business transactions.

[09:56] Budgeting – Anne explains why it’s a good exercise for small business owners to create a budget and analyze their business expenses.

[15:19] Paying Yourself – Anne dives deep into how and when small business owners should pay themselves.

[21:06] Surviving the Pandemic – Anne explains how The Largo Group helped its clients survive through the pandemic.

[26:00] SBA Loans – Anne shares her thoughts on the SBA loan program with some pros and cons.

[33:33] Growth – Anne explains what small business owners should consider when planning for growth.

[36:06] Tax Strategies – Anne shares some tax strategies restaurants and other similar businesses can utilize to minimize their tax liabilities.

[43:47] Mindset – Why mindset is a key factor in the success of a business owner and some other business lessons from Anne’s career in professional golf.

 

Resources

Tax Planning at the Mid-Stage of Your Career

Financial planning that focuses on your goals and helps you achieve flexibility in your journey is critical at the mid-point of your career. It’s how you build a plan to help you realize the lifestyle you want now while keeping longer-term achievements on track. Staying on top of your career earnings by regularly benchmarking your salary to the market and effectively managing equity compensation are two areas where you can keep the income element growing and your wealth building. But an overlooked area is how much of your income you get to keep.

As income increases, it becomes even more essential to ensure that you are optimizing your tax planning. And a good tax plan doesn’t just happen in April every year. Proactive planning during the year, and a strategic plan that takes a multi-year view, can make a big difference in keeping your lifetime taxes as low as possible.

Moves you make now can also set you up for more income potential and greater tax efficiency in retirement. If an early retirement, work-optional, or one spouse temporarily or permanently leaving the workforce is a goal, focusing on effective tax planning can get you there sooner. When you put all the plan elements in play, you can create a lot of optionalities.

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Inflation, the Fed, and Recession. It’s Not Linear.

The June CPI number came in at 9.1%. This is not only the second consecutive month that we’ve seen an increase – it was a whopper. Consensus expectations were for an 8.8% annualized increase in inflation. This huge spike came after the Federal Reserve raised interest rates by a surprise 75 basis points after the June meeting and communicated that more – and higher – rate increases are in store.

As measured by the futures markets, the immediate response was to assume that the high inflation number would increase the likelihood of the Fed enacting at least a 75-basis point rate increase and potentially a 100-basis point increase at the FOMC meeting at the end of July.

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Retiring in a Volatile Market: Control What You Can

Retirement during a volatile market is unsettling. Whether you are on the cusp or have already made the leap, a market downturn’s impact on your savings will be felt now and potentially for years to come. How do you keep your plan on track and your desired lifestyle in place?

If you can’t control income, you’ll need to control expenses. And that means budgeting and taxes. You can deploy tactics and strategies to optimize these factors no matter what stage you are in on your retirement journey.

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GMB Ep #138: How to Use Options as Portfolio Insurance

As we approach an era of economic uncertainty, many investors are becoming concerned about the value of their investments falling. This is where, if used carefully, options contracts can give investors the ability to safeguard their investment portfolios. In this week’s episode, Grant explains the pros and cons using options as portfolio insurance, as well as some major risks investors could face when using this investment strategy. 

 

 

Show Notes

[02:19] Introduction –  Grant discusses how investing in options can be used to reduce portfolio risk for some investors.

[06:57] Put Option – Grant gives a comprehensive overview of put options and the benefits and risks of investing in them.

[17:10] ETF – Grant explains how having option contracts on ETFs can be advantageous.

[20:25] SPY – Grant describes SPY ETFs and provides a hypothetical scenario on utilizing option contracts.

[24:30] Call Option – Grant shares the pros and cons of call options.

[31:20] Combining Strategies – Grant describes an investment option in which you can create revenue by selling call options against positions that you already hold in your portfolio.

[34:22] Be Mindful – Grant stresses the importance of limiting risk, and why you should proceed with caution if you’re considering this investment strategy.

 

Resources

GMB #137: All About I-Bonds, TIPS, and Bond Investing in Inflationary Times

As inflation continues to rise, many questions have come up regarding best practices for safeguarding investments. This week on Grow Money Business, Grant takes a deep dive into bond investing in an inflationary market, and answers some important questions about Treasury Inflation-Protected Securities (TIPS) and I-bonds. Throughout the episode, Grant shares his thoughts on when they may be a good fit for your portfolio, as well as some important considerations and strategic approaches to bond investing.

 

 

Show Notes

[04:07] Bond Investing – Grant explains the process of bond investing and the importance of allocating a portion of your portfolio to US government securities.

[08:44] Treasury Inflation-Protected Securities – Grant discusses the similarities and distinctions between ordinary US government securities and treasury inflation-protected securities.

[13:41] Interest Rate Risk – Grant explains why the value of TIPS are decreasing even though they are intended to protect investors against inflation.

[21:26] I Bonds – Grant describes the structure of I-Bonds, and shares his thoughts on who is best suited to invest in them.

[25:48] $10,000 Limitation – Grant shares a strategic approach on how to circumvent the $10,000 per year per person investment limit that the Treasury Direct website imposes.

[29:00] Emergency Fund Cash – Grant explains why he does not recommend investing emergency fund cash in I-bonds.

[32:50] Borrowings – Grant describes how rising inflation affects borrowing and how to benefit from borrowing in inflationary times.

 

Resources