Critical Thinking Required

When it comes to private investments, guess what topic we get asked the most? Yes, real estate! Today, we will discuss a strategy called the “1031 exchange”. The biggest advantage is the tax deferral function. You can keep rolling from one real estate investment to the next (with some nuances.) And if you do it right, it can potentially eliminate capital gains taxes entirely for your heirs. But as with all financial tools, it’s not for everyone. A 1031 exchange also has some strict rules and significant drawbacks. Is it right for you?

This is our “How to pick a financial advisor” mini-series.  First, did you know that only roughly 15% of financial advisors are “fiduciaries”, meaning we are legally and ethically bound to act in the best interests of our clients.  The rest are operating their business under the “suitability rule”, meaning they don’t need to do what’s best for you, as long as it isn’t grossly inappropriate.  Some brokers may say that they “act” as fiduciaries, but that may hold no legal validity.  Dan discusses why it’s important to find a true fiduciary advisor, and how you can verify this information.

Today, we’re breaking down the order to invest your money.  We hear this question from our clients all the time: my friends are investing in this private deal, should I do something like that as well?  Well, hold the horses a bit, because before we go all the way to the “private deal”, there are some other basic (maybe not as sexy as a private deal), but more important glasses we need to fill first.  Let me introduce you to our Investment Champagne Tower!

Investing can often feel like walking a tightrope. Balancing risk mitigation and return maximization is essential for any successful investment.  Should you take a high risk in the hope of a high return?  Or should you aim for safety and expect less?  In today’s volatile market, which one should take priority?

Nathaniel talked about how high interest rates impact your investments previously.  In this episode, Tim discusses how interest rates impact daily financial planning, from mortgages, car loans, and credit cards, to savings and budgeting.  Tim said it so well: the point of planning is positioning.  It allows you to put yourself in a good position to take advantage when an opportunity presents itself!

As you may have already heard, the Federal Reserve announced that it plans to hold interest rates steady amid high inflation, and forecasted just one cut in 2024 instead of three to six.  In this episode, Nathaniel discussed what that means for your investments.  And why did the market keep going up in a high-interest rate environment when in theory should have gone down?

Today we're diving into a topic that's crucial for self-employed individuals: investment account types. Whether you're a freelancer, consultant, or small business owner, understanding these options can be a game-changer for your financial future and retirement. So, let's get started.

This is our 2024 first-quarter commentary.  Nathaniel discussed 3 main topics: US stock market performance, and why the S&P 500 doesn’t truly reflect the overall stock market; inflation, and how it impacts your investments; and lastly, the 2024 presidential election and how it may affect your financial planning.

If you are planning to have a child, or you just had one, there are some financial preparations that you may find extremely beneficial in the long run:

1. Cash Flow: Create a realistic budget and increase your emergency fund;
2. Estate Planning: Pick your guardians, create a trust, or at least complete the free estate planning templates your state provides;
3. Life Insurance: Now that you have (or are about to have) another person who depends on you, please review your insurance needs.  It's a risk management tool, not an investment!
4. Education Planning: Utilize 529 plans and other useful investment vehicles for your child;
5. Tax Breaks: Talk to your advisor and CPA about child and dependent care credits, FSAs, and other tax benefits.

In this episode, Nathaniel and Tim discussed what the S&P 500 index is, its performance, and does it truly represent the overall stock market.  From January 1 to June 20, 2023, the S&P 500 increased 14.3%.  That's well above the 10-year and 20-year averages through that same time period of 3.6% and 3%, respectively.  "The markets must be doing really well this year then!", you may think.  But why are your 401(k)/retirement accounts not doing as well?  Did you know that the top 9 companies of this index (Apple, Microsoft, Amazon.com, Nvidia, Tesla, Alphabet, Meta Platforms, Berkshire Hathaway, and UnitedHealth Group) accounted for almost 31% of the market capitalization?  And if you exclude these top 9 stocks, the index would be up about 3% in the same time frame, making it a very mediocre year.  Nathaniel talked about what drives the 2023 jump, and the volatility of the short-term market.