Shotwell Rutter Baer

Join Dave and Nick for a special Thanksgiving Episode where they talk about what they are thankful for, the Markets, what’s good for retirees, and financial planning.

We’ve got a lot to be thankful for as investors and financial planners this year despite the fact that it often seems like there’s a lot more bad news going on this year than there was last year. However, it’s kind of the reverse when you look at the numbers. As of this recording the day before Thanksgiving, the Standard and Poor’s 500 -the basic measure of the US stock market – is positive 19% for the year. The Nasdaq, which is focused on tech stocks and over-the-counter stocks, is positive 36% for the year.

If we put these numbers into perspective, really what we’ve done is made up for last year’s losses with some growth. But if you measure that against where people were afraid we were heading going into this year, it’s an astounding difference.

If you would have said in January,  Oh no, the stock market is going to be looking much better by November and inflation’s going to come down and you guys that are all worried about recessions just need to dial it back a bit,”  you would have just sounded like a naive fool. But here we are.

So far this year commodities are the only major asset class showing negative returns. Commodities do well in times of worry and inflation.

Some general examples of commodities include, from the Commodity Index, everything from grain futures, energy futures, precious metals, industrial metals, and all the basic inputs that go into creating the economy.

So obviously the markets are having a good year. How does that relate to the economy as a whole?

Well, instead of a recession, third-quarter GDP growth was an annualized 4.9 which is one of the fastest growth rates we’ve seen in decades. Nobody’s expecting it to stay that high, but a recession is thought of as two consecutive quarters of negative GDP growth. Instead, at a time when it was predicted we would definitely be in a recession by now, we’re seeing record growth.

Macroeconomics is very much still an art, not a science.

Listen to the entire episode as Nick and Dave talk about what investors can be thankful for, and plan for the future.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick as they try something new today on the show.

Watch on YouTube HERE

We hope this catches on and we can continue to do this on a regular basis. Both of us do a fair amount of reading when it comes to retirement planning and personal finance information. However, if you are in the habit of digesting news by just reading the headlines, this can be dangerous when it comes to controversial topics or topics that require a much deeper dive.

We are the weirdos who actually click on these articles and think about what they’re saying and why it may or may not be right. Our goal is to go beyond the headline for our listeners to let them know what these articles are saying, why they may or may not be important to you, and how you think about things.

So, here is our curated, bespoke list of the topics we’ve seen in personal finance blog post sections of major newspapers over the last couple of weeks.

#1. Washington Post: Why you should swap your bucket list with a chuck-it list

It’s not necessarily so much about creating a bucket list but about some life goals that maybe you should let go of. We live in a society that is all about setting and achieving goals. However, you’re going to change and things are going to change and it’s okay to let go of some of those.

#2. Why You Need ‘Flexible Goals’ for Success & Happiness by Darius Peru

This article discusses how to not fixate on the specifics of a goal so much as the idea of it. A great example he gives is the difference between,  “I want to earn $100000 versus I want to earn more than last year.”

#3. Wall Street Journal: Couples Embrace the Least Romantic Date Ever: The Money Date

The least romantic date night is the financial date night.  If you’re actually going to do this and be intentional about it, you can still have fun with it. Money is one of the leading causes of divorce. So with the date night, the main goal is to have these conversations with your partner, The more open you are and communicate together the better your money life will be. But it doesn’t necessarily have to be sitting in front of a computer. You can have fun with it and actually have a money date where you dress up, go to a nice restaurant, have a nice bottle of wine, and have conversations about how you’re spending money and why and what you need to do to be successful.

#4. Wall Street Journal: It’s Getting Too Expensive to Have Fun

We can’t go through an entire month without talking about inflation in one way or another. There’s this idea that’s come out of the summer spending spree called funflation.  The Wall Street Journal wrote an article that you know things like live event prices have increased significantly.

#5. Wall Street Journal: Never Mind the 1%. Mini-Millionaires Are Where Wealth Is Growing Fastest

Never mind the 1 % million mini millionaires are where wealth is growing fastest.  I don’t love the title of the article but it was an interesting idea. Looking at the rise in inflation and generally strong investment markets over the last several years and the recent history notwithstanding, we’re seeing a definite rise in the term mini millionaires.  The middle class and upper middle class in America have done a lot better than most people would guess in terms of growing their balance sheets and wealth.

#6. Wall Street Journal: There’s Never Been a Worse Time to Buy Instead of Rent

Essentially, their estimate is on average it’s 52% more expensive to buy a home than to rent one right now because of mortgage rates and property value increases.

We hope you have enjoyed this new review. If you have an article that you are reading and want to pass along we would love to take a look at it. You can email us at [email protected]. Tune in next month when we review what we’ve been up to and what we’ve been reading in November.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick as they chat with Dr. Darla Bishop, the author of the upcoming book, How to Afford Everything.

Watch on YouTube HERE

Her book is available for pre-order until December 12, 2023, and then it will be available to the public. You can use the code KTF on her website for 20% off her book for a limited time.

Order here: https://darlabishop.com/

Check out her Podcast here: https://www.youtube.com/@my_finansis

You can also find her on most social media channels under @my_finanSIS.

Dr. Bishop lives and works in the Lansing area. Her expertise in financial literacy and ability to connect with young people on a personal level makes her the ultimate FinanSis for anyone looking to improve their financial situation and take control of their future.

Have you ever wished for a big sister who can teach you about money? Someone who can guide you, laugh with you, and also be firm when you have to set goals or need a reality check? Dr. Darla is it!

When Darla was in college, budgeting and learning about money, she started to read financial books and realized that not one of them offered a decision tree or step-by-step guide that helped her where she was in her particular situation. She has since read over 100 financial books and still didn’t find what she thought would be most helpful – so she wrote it.

That is what How to Afford Everything is all about. It includes many worksheets and thought-provoking questions and exercises to help you where you are right now.

The target audience for this book is people who are under 40, may (or may not) come from a disadvantaged background, now have a good job and money coming in, and want to take their money management to the next level. People who are managing lots of things. Managing careers and sometimes the salary negotiations that come along with that. Thinking about their parents as they get older. Raising children and trying to think about whether they will go to college and what we want to contribute to that. Maybe paying off student loans.

Nick: “What advice do you give to people when you have multiple competing conflicting things for your resources? How do you help walk people through figuring out which one makes the most sense for them because it’s not always black and white plain vanilla right?

Darla: “What I figure out when I’ve talked to multiple people who’ve been in that situation is because it’s been so stressful over some period of time. Maybe a few weeks, a few months, or even a few years. They haven’t taken the time and probably because they haven’t had the energy or the guts to truly look at their financial situation, right? They just kind of feel like they’re swimming tread in water and and haven’t asked for help.

Until this point because they thought maybe someone was going tell them they needed to budget more and spend less money and they can’t imagine even how they would do that. So the approach I take is to first write down every cent that you owe to anyone whether it’s a traditional debt a credit card, a loan student loan, your mom, your cousin, or your coworker who loans you $10 for gas money. We’re going to write everything down and it’s gonna hurt a little bit at first. But once we put it on paper we take away its power because now we can do something about it.

So we got to get over that first hurdle and then we’re going write down every piece of money, every cent, that comes through your door, and if there is a difference between the money that goes out and the money that comes in we have to figure out where we can cut or my personal favorite where we can increase.”

Listen to the full episode to hear more about Dr. Bishop’s journey to writing a book and for more advice.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Nick and Dave as they discuss how the all-encompassing world of artificial intelligence may affect your investment portfolio.

Watch on YouTube HERE

This definitely isn’t a podcast about how it’s going to change our industry but we think of it in terms of how will it make us more efficient so we can help more people.

It doesn’t seem like, in our lifetime, there has ever been a type of technology that set people on edge quite so much.

When the internet was new you could type something in and come up with information. It was mostly positive. However, you didn’t think about the fact that E-commerce is putting Main Street out of business. Those kinds of things came along a little later after the technology had been around for a while.

Artificial Intelligence definitely raises questions about what it means to be an artist, or even what it means to be human.

We’re seeing a lot of it in the headlines because it is a change, right? The biggest question is, “Is AI going to replace me?”

So we were wondering if our clients are thinking, “Are we going to need financial advisors anymore? We can just go to ChatGTP and ask it what we want and then we’ll have the solution.”

This is somewhat interesting to us because a lot of investment and money management information is already out there and people already know a lot of it. However, they just can’t seem to follow it or don’t feel confident enough to do it themselves. We don’t know if that’s changing because it’s easier to get access to that information or not.

When you look at it this way in terms of your job and my job it’s no different than Google.  You can ask ChatGTP if you should do a raw conversion or you can Google it.

It’s going to change things for sure, but mostly in making people more efficient because they don’t have to do some of that manual stuff that artificial intelligence can do for them when it comes to sourcing information.

While history is never a perfect guide in these situations it does offer ways to think about AI and context. The markets and the economy have always run in what some people call hype cycles. We had the.com bubble, we had blockchain, self-driving cars. Etc

They capture people’s attention and get people really excited about investment opportunities and disruption to the economy. Each one promises big change but economist Roy Amara wrote, “People tend to overestimate the impact of technology in the short run while they underestimate its effect in the long run.”

Listen to the entire episode to hear our take on AI and the investment industry.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Nick and Dave as they address some questions they have received recently about interest rates and CDs.

Interest rates are looking pretty good, especially when you start driving around town and seeing billboards for 6 % twelve-month CDs. So part of the questions have been, “Why don’t we just put everything in CDs and earn 6% and be happy and go on our merry way?”

When you look at the stock market this year the S&P500 is up over 10 percent so far year to date. It can be in the eye of the beholder if you think you should stop investing in this vehicle that’s done over ten percent this year so you can get 5%.

There’s always an element when it comes to investing that is about the future but also applies to this cash conversation.

Essentially if you invest in cash over the long term, while it’s attractive right now, your long-term real return is actually negative. Over time cash investments aren’t going to keep up with inflation.

The key to this conversation and thinking about CDs versus stocks is your long-term investments should be invested into a portfolio that makes sense for your long-term and you should definitely have short-term cash available to weather the storm. The good news is that cash is getting much better interest rates than it used to.

Listen to the entire episode for more on this discussion.

Don’t forget to subscribe to our YouTube Channel.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Nick and Dave for their 3rd Quarter 2023 Economic and Market Update.

Watch this episode on YouTube HERE

You can read the in-depth blog article HERE

Our portfolio managers at East Bay Investment Solutions provide us every quarter with what they consider the positives and negatives of our current economic situation, as well as in-depth commentary on the past quarter’s markets. You can download their full report here, as well as watch the video of their recorded presentation.

As Mario notes in the video, he was putting the commentary together before and during the attacks on Israel by Hamas, so that did not make it onto the list as a reason for concern. However, it is a development to monitor. So far, the economic and market impacts of the unrest in the Middle East have been muted.

While we feel it is important for our clients to understand their portfolios and what is going on in the markets and the economy, as always, we remind everyone that the key to success is remaining invested for the long term.

Please click here for the full report from our partners at Eastbay Investment Solutions.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick as they discuss a few of their favorite movies about money. Do you have any to add to the list? Drop them in the comments.

Watch on YouTube Here

Check out the episode we did on that topic: The Game Stop Problem.

If you have any movies that you think we should throw on the list or that we miss, we’d love to hear about it. Shoot us an email at [email protected] or hit us up on socials. We’re on Facebook and Instagram so you can find us there.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick for another helpful MSU Case study. This time they review retirement options for a retired couple with more than enough for retirement.

Watch on YouTube HERE

Check out our past case studies and you might find one that fits your situation, or close to it.

Ep 114: Retirement Planning Case Study for an MSU Employee

Ep 120: New MSU Professor Retirement Planning

Many of our clients are current or former MSU employees, and this case study is a very common occurrence. Through a confluence of things, lifestyle, an excellent university retirement program, and good communication about enrolling and committing to saving early.

As we were creating the outline for this episode, we realized it may seem kind of funny to talk about people who other listeners may not think have problems. We’ve got to admit, that these are fun problems to solve, but there are still things to solve for. It’s an interesting dynamic because if you have more than enough for retirement do you really need a financial planner?

Our answer is “YES”, and we are here to explain why.

There’s a lot of value that a financial planner can add, not to mention peace of mind. You don’t get to retirement with more than enough without worrying about it.

Our potential clients are Ron and Julie. Ron is 71 and Julie is 70.  They worked hard and saved well throughout their working years. They chose to stay in the Lansing area after retiring from Michigan State University. Their house is paid off and their kids are out of college and starting families of their own.

Their oldest son and his wife just welcomed their first child last year. Their daughter is expecting grandchild number two later this year.

Ron and Julie have always been frugal between their social security benefits and a modest draw from their retirement portfolio. They feel they have enough money to do all the things they want to do as they enter their early 70s.

They’re concerned about the required minimum distributions from their portfolio and what they will mean for their taxes. They also worry about being forced to take from their accounts now and that they won’t have enough for down the road.

They would like to help their new grandchildren with educational expenses. Their daughter and her husband would like to buy a house and they may need help with the down payment.

Ron and Judy want to help but Ron worries this would be unfair to their son and he is concerned with taxes as he heard their rules about gifts.

And so so now what?

We start with life planning with all of our clients. We help you figure out and prioritize what’s most important to you. Since Ron and Julie are in their 70s, you might think that life planning wouldn’t be very useful at this stage of the game. However, it’s almost more useful as you go into retirement.

The average life expectancy for a couple in their 70s is probably in the 90s at this point. They likely have about another 20 years, and they’ve done such a marvelous job of saving all this money. How do they maximize those 20 years? How do they get the most enjoyment out of it?

Is it more important to help the kids now or to give them a big inheritance later?

There is a lot of stuff that will come out of the life planning meeting including creating a vision that will be truly impactful for them so they can prioritize what they should be doing.

The next step is to start defining goals and coming up with numbers on how to put it all into action. That’s the fun part, particularly with people in this situation who have the ability to do most of the things they could possibly think of.

That statement of financial purpose, as Mr. Carl Richards would call it, is really important because it’s the basis for all the financial decisions that we make.

Join Dave and Nick as they go through different scenarios for Ron and Julie as they figure out when and how to invest in their children, their grandchildren, and themselves.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick as they walk you through how to decipher and decode all the information that comes at us in the media regarding finances.

Watch on YouTube HERE

This is something we both talk about with our clients on a regular basis. Sometimes this is good stuff to remind ourselves as well,

It’s all kinds of stuff that get you and me riled up in the market and the financial media about the markets. It’s natural.

We are here to help you take the emotions out of it in order to see what is really going on

We’ve borrowed the process from Dr. Daniel Crosby’s book The Behavioral Investor. This book takes a lot of the concepts of behavioral finance and teaches how to apply them to how you think about your portfolio and where we usually screw up.

We did a book review of Thinking Fast and Slow by Daniel Kahneman a couple of weeks ago.  Think of that book and this book as both good foundations for how to think about your finances.

One section of this book talks about how the financial media plays a role in our thinking,  and it’s not the role that most people assume. The overarching premise here is that the financial media is not there to help you be a better investor. They’re there to get eyes and viewers and listeners and readers and none of that rarely has anything to do with making you a better investor,

Listen to the full episode to hear all 4 steps and become better at deciphering what the news is really trying to tell you.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick on today’s topic, which is an extension of an earlier podcast they did on the book review of The Soul of Money.

An underlying topic is how to make yourself heard with the voice of money. What we mean by that is we all make conscious or unconscious decisions on how we spend our money. Put another way, where we purchase things from and what we do with our excess discretionary money.

Watch on YouTube HERE

If your goal is to make sure that your money is going to things that you support, join us for some tips on how to think about this and execute it.

We reiterate something we’ve said before, which is looking at your budget. You can really see what your priorities are by the way you spend your money.  In this day and age, everything is so easy and accessible. It is rare for us to just stop and take a second to think about where I am purchasing this from.

“What are my dollars doing here and is that important to me and for some people”

Tune in to this episode for a couple of different strategies for this. Whatever doesn’t match your values you know and you get to choose. That’s the unique thing about this.

Everybody’s values are different and everybody prioritizes them differently so these are just some interesting ways to get stuff done and feel better about the use of your money. You are the only one who can make that decision.

Do you consider yourself financially generous? Giving money away can come in a lot of different forms including charitable contributions.

There are a couple of different financial ways to do this. However, before you do, it is important to do your research and figure out where your money is going if it going to be used in the way you want it to.

There is a website called Charity Navigator that will give you detailed information on organizations. It scores all the major national charitable organizations and lists how they utilize their money.

Don’t forget to look toward your own community as well, before deciding on a national organization. You and your money may be able to make a bigger impact closer to home. And you can be involved and directly see the difference you are helping to make.

Join us as discuss the tax advantages of giving, and how to set that up properly. This can come down to itemized deductions and donations.

The last topic we cover in this episode is donor-advised funds.

Scenario:

You are donating money into an account that is under the auspices of a foundation (typically a 5013C).

You still control the account and control the investments and make a contribution of $25000 in one year. You take the deduction for that and then you make grants from it over your lifetime to charities. You don’t deduct them at the time you give the money to the charities but instead deduct the money at the time you put it in the fund. It’s essentially the same strategy as batching.

This allows you to spread your money out how you see fit over time but also get the best tax deduction.

Do you have questions about your charitable giving or how to set it up to maximize your tax benefits?

Give us a call at 517-321-4832.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.