Five Minute Finance

In this week’s episode, Matt Robison and I dive into an often-overlooked aspect of job selection: logistics. While most people prioritize salary and job responsibilities, we emphasize the significance of considering the logistical details that contribute to job satisfaction and work-life balance.

What are Job Logistics?

The term "logistics" here encompasses various aspects of a job beyond the actual tasks performed, including the daily routines, commuting, office setup, and the energy derived from the work itself. How enjoyable are the tasks you have to complete on a day-to-day basis? Do you use the time spent sitting in traffic to listen to audiobooks or tap your fingers on the wheel, becoming more impatient with each passing minute? Do you work next to someone who reheats fish every day for lunch or in the corner of your dark basement with kids running overhead? These logistics can significantly impact your job satisfaction and overall well-being.

Become your own country, so to speak

Job logistics intertwine with family life in a number of ways and it is important to navigate these dynamics as a team. One way to address job logistics in terms of quality of life is to think of your household as its own country. Together, you produce a household GDP (gross domestic product) in the form of daily life. These products include money earned (to sustain the household), time spent (on shuffling kids, homework, etc), tasks completed (housework, yard work, etc.) and social interactions (managing the familys’ social obligations and desires).  Each partner contributes different strengths and responsibilities and not all contributions are financially quantifiable.

Have an honest conversation with your partner about your strengths and preferences in tasks. If you spend all day eyeballs deep in spreadsheets, perhaps you prefer to spend your weekends in the yard or driving kids to various activities. If you work in a hospital, perhaps you prefer the solitude and relative quiet of housework at home. Use the logistics of your job to create a balanced life at home.

The ongoing COVID-19 pandemic has brought the concept of job logistics into sharp focus. The shift to remote work has made people more attuned to the details of their work arrangements, including the frequency of office visits and the value of in-person interaction. Job seekers and employees alike are now paying closer attention to how these logistical factors align with their personal and family needs.

While salary and job responsibilities are undeniably important, consider the broader context of job logistics when evaluating your career options. Crafting a work life that aligns with your personal preferences, or a home life that balances work obligations can lead to greater overall satisfaction on and off the job.

Ever wonder what’s in your index fund? Similar to reading labels in a grocery store, you are likely to find things that you either don’t recognize (erythorbic acid in your frozen blueberries??) or are surprised to find (cane sugar in jarred pasta sauce??). It would serve you well to delve deeper into the components of your investment vehicles, particularly index funds, to avoid potential pitfalls and misconceptions.

Join Matt Robison and I this week as we discuss the various labels you should be paying attention to in the stock market. One of the first label mishaps is not knowing the difference between mutual funds and exchange-traded funds (ETFs). These investment wrappers may contain similar assets but have distinct characteristics such as tax treatment and use in investment strategies.

In case you aren’t completely confused yet, let’s jump into another sticky subject that even has Wall Street scratching its head. You’ve likely explored the concept of value and growth companies, which are commonly used labels to categorize stocks. Growth companies are expected to expand and generate higher future profits, while value companies tend to have stable earnings and lower growth prospects. Understanding these distinctions when choosing investments is key as different funds may focus on either value or growth stocks.

Speaking of funds and Wall Street’s “whoops,” a popular value index fund, the iShares S&P 500 Value ETF (ticker IVE) includes Microsoft which is typically a growth company. Here is where knowing the ingredients of the fund is crucial. 

While it may seem laborious, it is essential to gain insight into the underlying assets and strategies employed by the fund. This knowledge enables you to make informed decisions based on your preferences and risk tolerance.

Stick to the Basics

Would you prefer to  avoid the intricacies of analyzing individual funds altogether? You would do well to stick to three broad categories of funds: 

1. Total US stock market
2. Total international market
3. Total bond market

By investing in these diversified options, you can bypass the need to decipher specific ingredients and still achieve a well-rounded portfolio. (hint: use low-cost index funds that track the above)

In the world of investing, understanding the ingredients of investment funds is crucial for making informed decisions. While the complexities and nuances can be overwhelming, you have the option to either dive deep into analyzing funds or simplify your approach by focusing on broader categories. Whichever path you choose, the key takeaway is to be mindful of what you are investing in and align your choices with your financial goals and risk tolerance.

Join Matt Robison and I this week as we explore the idea that our individual lives may not hold significant meaning in the grand scheme of things. Don’t get disheartened, embracing the notion that your life doesn’t matter can actually be a fulfilling and liberating approach to life. 

By acknowledging that our actions have minimal impact on the universe, we can prioritize our personal passions and goals.

Why is that prioritization important? Simply put, it's how happiness is derived. By embracing the idea that what we accumulate materially doesn’t define us, we can experience a sense of liberation and contentment.

What does this have to do with finance? Well, until you understand what brings you true joy and fulfillment, how can you possibly know how to prioritize your spending and saving? 

Our lives are ultimately finite, and the only resource we can truly control is our time. 

Focusing on experiences and connections rather than material possessions can help align your financial goals which leads to happiness.

Are you ready to create your ideal lifestyle? Let’s Connect.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

In this week's episode Matt Robison and I delve into the realm of finances within marriage and present seven rules that can help couples achieve financial harmony. Whether you're young and just starting out or have been together for a while, implementing these rules can save you from countless disagreements and stress. Here’s our advice:

1. Start young: One of the keys to financial success in marriage is starting early. By setting parameters and discussing financial goals from the beginning, couples can prevent misunderstandings and conflicts down the road. However, it's never too late to start. Remember, the only better time to start than yesterday is today.

2. Work as a team on the budget: A budget is not a restrictive tool; instead, it offers couples more freedom. Without a budget, every dollar spent becomes a potential source of conflict. By working together as a team and creating a budget, couples can align their values and priorities, ensuring financial decisions are made collectively.

3. Budget buy-in: Creating a budget empowers you to spend your money wisely. It allows you to allocate funds towards your joint goals, such as retirement, education, or a dream vacation, while also providing the flexibility to spend on individual wants. By defining spending limits and priorities, couples can enjoy the freedom of managing their finances effectively.

4. Always pay yourself first: To ensure your long-term financial security, it's important to prioritize saving. Set up automatic transfers that allocate a portion of your income towards joint goals, such as retirement or an emergency fund, before any other expenses. By making saving a priority, you invest in your shared future and protect yourselves from financial uncertainties.

5. Pick a number: Mutual agreement on spending limits can prevent impulsive purchases and financial conflicts. Agree upon a threshold, such as a maximum spending amount, beyond which you consult each other before making a purchase. This approach fosters trust, respect, and shared responsibility for financial decisions.

6. Separate needs from wants: By evaluating the true impact of a purchase on long-term happiness, couples can avoid impulsive buying and focus on what truly matters. Consider whether a purchase will bring joy not just in the short term, but also in the months and years ahead.

7. Enjoy a frivolous slice: While it's essential to prioritize savings and responsible spending, it's equally important to indulge in life's pleasures. Treat yourselves occasionally and celebrate your achievements. Embrace the philosophy of "Treat yo' self," as coined by Donna and Tom from Parks and Recreation, and savor the joy of something nice once in a while.

Bonus Rule: Do regular check-ins: As a bonus for our listeners, we present an eighth rule for financial marital bliss: regular check-ins. Avoid waiting for financial emergencies to address your financial situation. Instead, schedule periodic discussions to assess your overall financial picture, ensure alignment of goals, evaluate spending habits, and make adjustments as needed. By proactively communicating about finances, you can avoid unnecessary stress and foster a sense of financial security.

Achieving financial harmony in a marriage is a journey that requires open communication, shared goals, and a commitment to responsible financial practices. By following these eight financial rules, couples can navigate the complexities of money management, prevent conflicts, and build a solid foundation for a prosperous future together. Join us for this week's podcast episode and discover how implementing these rules can enhance your marital bliss while keeping financial burdens at bay.

Are you ready to create your ideal lifestyle? Let’s Connect.

Learn more about Mike and my services at

Rich vs. Wealthy: Do you know the difference?In today's world, the terms "rich" and "wealthy" are often used interchangeably. However, it's important to understand that there is a significant difference between the two. While being rich may imply a high salary, luxurious lifestyle, and expensive possessions, being wealthy goes beyond material abundance. In this podcast, Matt and I will explore the distinctions between being rich and being wealthy, emphasizing the importance of financial independence, stability, and a lifestyle of freedom.

Fancy cars, luxurious vacations…keeping up with the Joneses could actually cost you your wealth! A false sense of security can prevail among those who consider themselves rich. The allure of an opulent lifestyle can lead to excessive spending, squandering wealth and leaving individuals financially vulnerable. Thus, being rich does not necessarily equate to financial stability.

On the other hand, being wealthy signifies more than just financial abundance. It encompasses the concepts of financial independence and stability. Being wealthy allows individuals to have the freedom to make independent decisions about their lives, including what they choose to do and when they choose to do it. True wealth is not measured by a specific dollar amount but by the ability to generate income without actively working for it. It grants individuals the liberty to pursue their passions and interests, thereby living life on their own terms.

Achieving financial wealth requires a deliberate and strategic approach. Here are a few steps to consider:

1. Increase your income and prioritize saving: Look for opportunities to enhance your earning potential, whether through career advancement, side businesses, or additional education. As that additional income rolls in, SAVE IT! Continue living life as you had before the financial bump and sock that extra away. Too much to ask? Ok, put a percentage into savings and spend the rest on riches.
2. Diversify your assets: Invest in a diverse range of assets such as stocks, bonds, real estate, and businesses. This diversification mitigates risks and offers the potential for long-term wealth accumulation.
3. Plan for the life you want: Develop a comprehensive financial plan that aligns with your goals and aspirations. This plan should incorporate saving, investing, and minimizing debt to ensure a secure and prosperous future.

Remember, becoming wealthy is not solely about the numbers; it is about embracing a mindset and lifestyle that prioritizes long-term financial security and personal fulfillment.

In this podcast episode, we delve into the complexities of estate planning and provide valuable insights to help you make informed decisions when it comes to choosing a trustee. Whether you're considering a friend, family member, or professional as your trustee, learn how to navigate the process and ensure the smooth administration of your assets.

When deciding upon a trustee to oversee the management of your financial and logistical life plans, it is important to think about the following four W’s:

Who: Choosing a trustee - This is almost like choosing a life partner. The person you choose to be trustee of your estate is someone you intend to have a long-term relationship with. As such, consider the following:

• Does this person want the job and everything that comes along with it? It’s a long-term commitment so be sure they are willing and available to fulfill trustee responsibilities.
• Is this person qualified? Be sure to assess the potential trustee's financial know-how and ability to handle complex duties such as investing trust funds and managing various assets.

What: Co-Trusteeship- Sometimes two heads are better than one. If one of your trustees lacks experience, you might consider adding a co-trustee to combine expertise and relationship dynamics. Some advantages of co-trustees include:

• Achieving checks and balances for proper administration and accountability.
• The role of an impartial trustee or trust protector in overseeing trustee actions.

Why: Professional Trustees - Choosing a professional trustee can aid in ensuring continuity and harmony. Why consider a professional?:

• The long-term nature of estate planning lends itself to professional management since a company can outlive any humans assigned to the task. 
• Conflicts of interest are commonplace among surviving spouses and ultimate beneficiaries. This can be alleviated by a professional, unbiased third party handling distributions.

How: Selecting the Right Professional Trustee - There are many factors to consider when evaluating professional trustees such as:

• There are different options for different sized trusts. Look at banks for large trusts and trust companies for mid-sized estates.
• Cost will inevitably be a concern. Be sure to appraise administrative and investment fees and keep in mind that this expense will be incurred posthumously. 
• Customer service should also be examined. Choose a firm with a solid reputation, experience, accessibility, responsiveness and ability to collaborate with beneficiaries.

Don't miss this informative episode, offering actionable advice on selecting the ideal trustee for your estate. Subscribe now to our podcast and embark on your journey to successful estate planning.

Are you ready to create your ideal lifestyle? Let’s Connect.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Managing your finances can be a challenging task, especially when it comes to making sound investment decisions and navigating the complexities of taxes. In this podcast, Matt Robison and I tackle some common financial misunderstandings and provide insights into how you can avoid them. 

1) Accounts and Investments are not one in the same

You might have a backpack for hiking, but it's what’s inside that counts. One prevalent misconception is that the type of account you have determines the success of your investments. However, the truth is that the account is merely a vehicle for holding investments and has no direct impact on their performance. It is crucial to recognize that the key to growing your wealth lies in investing wisely, rather than solely relying on the type of account.

2) Index Funds: They aren’t all the ‘safe’ option

Index funds are often considered a reliable investment option due to their built-in diversification and lower expenses compared to actively managed funds. While they can provide stability and consistent returns over the long term, it's essential to remember that all investments carry some degree of risk. Educate yourself on market dynamics and timing to make informed decisions.

3) Make sure you are truly diversified

You may eat at a different restaurant every night, but if they are McDonalds, Burger King and Wendy’s, then you aren’t really eating a diverse diet. The same holds true for investments. Diversifying your portfolio across different asset classes and industries can help mitigate risk and potentially enhance returns.

4) Roth IRA Contributions: Know the Income Limits

Contributing to a Roth IRA can be an excellent strategy for retirement savings, as it offers tax-free growth potential. However, it's important to be aware of the income limits. For single individuals, the maximum income threshold is $138,000, and for married couples filing jointly, it is $218,000. Understanding these limits ensures you avoid any potential tax penalties.

5) Backdoor Roth IRA - Get Professional Help

The backdoor Roth IRA strategy involves converting traditional IRA contributions into a Roth IRA to take advantage of potential tax benefits. However, executing this strategy correctly can be complicated. Stay in your lane.

6) Taxation on Bonuses: It’s not as clear cut as it seems

Receiving a bonus at work is always a cause for celebration. However, it's crucial to understand the tax implications. While tax is paid when the bonus is received, that money is also considered income so you will owe the difference between what you paid upon receipt and your income tax obligations at the end of the year.

7) DIY is not for taxes at this stage in your life

While filing your taxes yourself may have sufficed in simpler financial times, as your wealth and financial situation grow, so does the complexity of your tax obligations. Engaging the services of a certified public accountant (CPA) or a qualified tax professional can help ensure accurate reporting, maximize deductions, and minimize the risk of errors that could trigger an audit.

8) Pay Your Taxes - Filing an extension does not apply to paying your obligation

Extending the deadline to file your tax return does not mean you can delay your tax payment. Regardless of when you file your taxes, failing to pay your tax liability by April 15 can result in late-payment penalties and accrued interest on the amount owed. Make sure to budget for your tax obligations and submit your payment promptly.

Conclusion:

Avoiding financial misunderstandings requires a proactive approach and a commitment to ongoing education. By recognizing that investment success depends on wise decision-making rather than the type of account, understanding the importance of diversification across all holdings, and seeking professional guidance when necessary, you can set yourself up for financial prosperity. Similarly, staying mindful of tax implications, adhering to deadlines, and leveraging the expertise of a CPA when needed will contribute to a more successful and stress-free tax season. Remember, financial management is an ongoing journey, and by arming yourself with knowledge and sound strategies, you can make the most of your financial resources and achieve your long-term goals.

This episode has information from my great friend Meg Bartelt. You can find the original blog post here.

Are you ready to create your ideal lifestyle? Let’s Connect.

1) How can you beat the stock market?

Low-cost index funds can help you beat the stock market by providing diversification and low fees. Index funds are designed to replicate the performance of a particular index, such as the S&P 500, by investing in all the stocks in that index. This means you get exposure to the market as a whole, which can help reduce risk and increase returns over the long term.

In addition, low-cost index funds have lower fees than actively managed funds, which means you get to keep more of your money. Over time, these fees can add up to significant savings, which can boost your returns and help you achieve your financial goals. So, if you want to beat the stock market, low-cost index funds are a great way to start!

2) Does this approach really beat individual investors?

Low-cost index funds can outperform individual investors by providing broad exposure to the market and minimizing the impact of emotional decision-making.

Individual investors may make decisions based on emotions like fear or greed, which can lead them to buy and sell stocks at the wrong time and result in lower returns. On the other hand, low-cost index funds follow a predetermined strategy that removes emotional biases and is based on market trends and data. They also offer broad diversification, which minimizes the risk of putting all your eggs in one basket.

Additionally, low-cost index funds have lower fees than actively managed funds, which means you get to keep more of your money. Over time, these savings can add up to a significant advantage over individual investors who are paying higher fees for actively managed funds.

Overall, low-cost index funds are a great option for investors who want to beat the market without taking on the risk and emotional biases associated with individual stock picking.

3) Still want to try your hand at individually beating the market? Here’s how:

If you are looking to beat the market, there is no one-size-fits-all strategy that will work for everyone. That being said, there are some general principles that many successful investors follow.

One strategy is to focus on value investing, which involves looking for stocks that are undervalued by the market. This requires doing your own research and analysis to identify companies with strong fundamentals and good growth potential that are currently trading at a discount to their intrinsic value.

Another strategy is to focus on growth investing, which involves looking for companies that are poised for above-average growth. This often involves investing in innovative companies that are disrupting their industries or creating new markets.

A third strategy is to use a momentum-based approach, which involves investing in stocks that have been performing well in recent months or years. This approach relies on the idea that stocks that are doing well will continue to do well in the future.

Ultimately, the best strategy will depend on your individual goals, risk tolerance, and investment philosophy. It's important to do your own research and consult with a financial advisor before making any investment decisions.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Are you ready to create your ideal lifestyle?  Let’s Connect.

I’ve talked about Health Savings Accounts (HSA’s) in the past but it was time for Matt Robison and I to revisit one of my favorite retirement accounts. You read that correctly, HSA’s are great vehicles for retirement savings. Here’s the four W’s:

1. What: What is a Health Savings account? It is an employee benefit intended to offset health care costs of high deductible insurance plans. Once opened, employees and employers can contribute to this account (more on this below). The money can be used now to pay for out of pocket medical expenses such as co-pays, prescriptions and even certain over-the-counter items such as sunscreen OR it can be saved to pay for medical expenses incurred in the future and to reimburse for expenses paid during the eligible period.
2. Why: Why open an HSA? It’s simple: Contributions made to the account are tax free. Eligible withdrawals are tax free. And all money earned in the account incurs no tax burden. That is the triple tax benefit!
3. How: How do you open an HSA? Have a chat with your company’s HR department. Evaluate your options. Choosing an insurance plan for your family that works for your current needs is the priority. If your employer offers a high deductible plan with an HSA and you have the means to cover your health care expenses, open the account. Contribute the maximum per year (often employers will contribute to these accounts as well so be sure to take advantage of FREE MONEY). Invest the money in the account in a low cost index fund. Let the money grow while you collect receipts for your eligible medical expenses. In 10-20 years, use all that cash to buy yourself a new knee or hip or reimburse yourself for all those kids’ urgent care bills and pay NOTHING to Uncle Sam.
4. Who: Who can take advantage of this amazing benefit? Anyone working for an employer that offers an HSA. Check with your HR department today!

Tune in to hear more details about this savvy retirement savings strategy.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Are you ready to create your ideal lifestyle? Let’s Connect.

You don’t need a ninja suit and a broom to sneak through this clean back door and “steal” an extra $10k. 

Many of my clients see the income limit for contributing to a Roth IRA ($150k/year single; $228k/year married) and give up on this wholly beneficial retirement account. 

This year, the contribution limit is $6,500 for an individual. Since a Roth IRA grows tax free and is 100% yours, it is an account everyone should take advantage of. Unfortunately the income limits leave many to believe it is not an option. I am here to show you exactly how to get in that back door, cleanly.

1. In order for this to work, you must not have money in any other IRA accounts: traditional, rollover, SEP or SIMPLE. This does not include other types of employer accounts like 401(k), 403(b), etc.
2. Open a traditional IRA account and contribute $6,500 for 2023 (if under age 50 - $7,500 if older)
3. Wait for a few weeks/months and open a Roth IRA and transfer the money from the traditional to the Roth account. Then invest your cash into a low cost index fund and get excited about your extra $10k of tax-savings.

That’s it. Clean and simple. So what are you waiting for?

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Are you ready to create your ideal lifestyle? Let’s Connect.