Shotwell Rutter Baer

Join Nick and Dave as they discuss the interesting topic of what to do when your “Too Hard” pile gets too big.

This is inspired by the article My ‘Too Hard’ Pile Is Pretty Big by Christine Benz in the Morningstar publication about personal finances.

The term “Too Hard Pile” was coined by Charlie Munger to describe investments that just aren’t worth the effort because they fall outside of the Berkshire Hathaway team’s circle of competence.

What he was getting at is when people get new investment ideas they basically sort them out right away into the ones they understand and the ones they don’t like. The ones they don’t want to waste their time trying to figure out because they are too complicated.

This can also be applied to personal finance in general.

Some of the things Christine includes in her too-hard pile are:

Some other things that commonly fall into people’s too-hard pile are:

Listen to or watch the entire episode to learn more about how you can tackle your too-hard pile.

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 talk about money scripts and how they might be affecting your financial plan. They also cover things that you can do to kind of recognize and move forward.

Watch on YouTube HERE

The guys also reminisce about their first memories of money.

Dave’s first memories involve the tooth fairy and separately, his grandfather.  “I remember when I’d see my grandfather when I was young. He would always, no matter what was going on, he would hand us a dollar or $2 out of his wallet. He’d say that we should always have some walking around money. That has always kind of stuck with me.  It was about having a little money that we didn’t have to account for or tell my mom about. It was just for some Jolly Ranchers or gum or whatever.”

Nick’s first memories about money when he was a kid had to do with a soccer ball piggy bank. “Every time we got money from the tooth fairy or from chores, I used to put all of my money into that little soccer ball and fill it up. My dad told me that I could save it for college. So sure enough I was putting all my change in there saving for college someday. I eventually took it to the bank and started a savings account.

Money script is an unconscious belief that each of us has developed concerning money in life. It is typically formed in childhood. We get this from parents or family or society and it’s often incredibly strong and resistant to change.

A popular idiom is money doesn’t grow on trees.

Another one is, “If you’re a good person and right, the money will take care of itself.”

All these little bits of conventional wisdom form our Bedrock Beliefs about money and attitudes toward money. They can be different in different contexts and different for different people based on experience. This can affect your ability to enjoy money or it can cause us to avoid money issues in general.

For example, someone who grew up during the great depression might learn to always be frugal, even after they actually have to be. Or, the opposite could happen with someone who really struggled, and their takeaway was to go ahead and spend it because it may not be here tomorrow.  They both had the same foundational experience of the great depression, but completely different takeaways.

The same thing can happen in the same family. For instance, your brother might have a completely different outlook on money even though you mostly had the same upbringing and heard the same stories as you did.

All of these different mindsets come into play when we’re helping people with financial planning. It seems like we’re always trying to pull clients back towards the middle somehow and find balance. They are typically either too afraid to spend or they’re spendthrifts.

Take the quiz about money scripts we discussed in the show HERE.

Yes, money scripts can be changed. The first step is identifying and understanding them. This is the cognition phase and it can help most money scripts dissipate or at least lessen the impact on your financial life.

There are certain scripts you may need professional help or guidance to kind of detach those emotions from the script.

Patty makes $200,000 a year. She owns a small business. She has about $500.000 in savings.

From the outside, it looks like she’s doing a great job and things are going well for her. But when you unpack it one of the things that you find is that her mother was her former business manager and she embezzled over $400,000 from her. This sort of thing can create a money script such as, “If you can’t trust your mom with money who can you trust?”

Listen or watch the full episode to learn more about money scripts, how to recognize them, and how to change them in order to achieve your financial goals and improve your relationship with money.

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 MiAble Accounts. You may have seen the billboards around town and wondered what they are all about.

What are they? Who are they for? Should you get one?

Watch on YouTube HERE

A MiAble account can be established for an individual with disabilities where they can actually create some savings for themselves without it interfering with government benefits from social security or Medicaid.

One of the big planning issues for someone who falls into this category and is on government benefits is that they can’t have any savings. Most of the rules dictate that you can only have a limited amount of money in an account in your name. This makes it extremely hard for people that have disability benefits to save.

If you are interested in setting up this type of account for yourself or a loved one, we are happy to help you. Please call us at 517-321-4832 or send an email to [email protected].

Let’s say you have a grandmother who wants to give you money. However, you can’t accept that money or if you did, it would affect your government benefits. So the MiAble account is a way kind to potentially get around that.

Each state has its own version of these types of accounts. They operate similarly to the State-run 529 College savings plans.  It’s a good way to accumulate money for people with disabilities. There are some tax advantages because the earnings grow tax-free and there’s no tax on withdrawals from the account as long as they’re used to pay for qualified expenses.

If you’re a Michigan taxpayer and you’re making contributions to one of these accounts, a single taxpayer can deduct $5000 a year in contributions from their Michigan income tax and a married couple can deduct $10,000.

These accounts have a pretty reasonable cost range including a $58 annual maintenance fee (if you get electronic document delivery it may be even less.)

We think the fund lineup and investment options are about as good as we’ve seen out there for a plan like this.

Continue to listen as we dive into the qualified distributions, expenses that qualify, and other considerations related to the MiAble Accounts.

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 review the book, Thinking Fast and Slow by Daniel Kahneman.

Watch on YouTube HERE

Thinking, Fast and Slow concerns a few major questions: how do we make decisions? And in what ways do we make decisions poorly?

The book covers three areas of Daniel Kahneman’s research: cognitive biases, prospect theory, and happiness.

Here is the summary from the website Shortform.com

“We’re so self-confident in our rationality that we think all our decisions are well-considered. When we choose a job, decide how to spend our time, or buy something, we think we’ve considered all the relevant factors and are making the optimal choice. In reality, our minds are riddled with biases leading to poor decision-making. We ignore data that we don’t see, and we weigh evidence inappropriately.

Thinking, Fast and Slow is a masterful book on psychology and behavioral economics by Nobel laureate Daniel Kahneman. Learn your two systems of thinking, how you make decisions, and your greatest vulnerabilities to bad decisions.”

Check out the Google Talk and interview with the author here

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 Ashley (Nick is on vacation) as they talk about Student Loan Repayment Plans, which have been in the news because they’ve just rolled out the details of a new plan.

Watch on YouTube HERE

The plan is called the SAVE Plan, which is short for Saving on a Valuable Education. It’s going to be replacing the repayment plan that currently exists.

If you are in the repay plan you will be automatically transitioned to the new save plan once that gets set in stone. They’re going to phase this in over this summer and next summer. This arose out of some campaign promises from the Biden administration about working on student loan forgiveness and lowering student loan debt.

A couple of weeks ago the supreme court actually struck down part of the forgiveness program where they were looking to just forgive a lump sum of debt off the top but left the provisions for repayment under this new plan intact. So they’re going ahead with that, and all politics aside, there are some financial planning implications, and Dave and Ashley discuss those here in this episode.

One thing that sets this plan apart is that everybody is eligible for it. If you’ve got federal student loans, regardless of when you took them out in the alphabet soup of old income-based repayment plans. Most of them had limits on who was eligible for particular plans based on what type of loans they had and when they took them out.

So the new plan is a little bit broader and in general it should lead to lower monthly payments for a lot of people.

The old repayment plan was 10% of your discretionary income. With the new saving plan, it is going to go down to 5% of discretionary income. So everyone’s monthly payment will go down. (Note: They are keeping it at 10% for graduate loans. )

Listen to the full episode to find out how to maximize your repayment plan and avoid financial issues.

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 talk about different that require insurance and other things that may be an option. Learn some tips on how you may be able to save money on things you might over-insuring.

Watch on YouTube HERE

Dave got a glossy flyer in the mail recently selling appliance repair insurance that came with a whole caveat of exceptions and exclusions that probably make the offer not worth it in the end.

The guys also break down the ins and out of warranty insurance and when it might be worth it and when it might not be. The rule of thumb is to always look at it in terms of how much of the percentage of what you’re going to get versus how much you have to pay and what that percentage looks like. This comes back to having a contingency fund and being able to cover these kinds of expenses when they arise rather than having to insure them.

To self-insure a little bit which is always a good thing versus paying an insurance company for the potential that something bad might happen but only getting limited coverage for that cost.

Nick takes a philosophical approach by considering what could potentially happen that would be catastrophic enough that he wouldn’t be able to cover it.

There’s a long list of things that could potentially come into play but the whole point of insurance when it was originally formed if somebody’s house burns down they probably don’t have the money or the capability to replace it.

To cover something that would be catastrophic you need two things to be true for insurance generally to make sense. The event would have to be catastrophic like your house burns down and you still own the bank for your mortgage. You need a lump sum. You need a place to live, right?

Or, you have a brand-new car and you get in an accident. You need to pay the bank back and you need wheels. That’s a catastrophe from a financial standpoint.

A lower probability event is also a good way to distinguish such as a fender bender versus totaling your car. A fender bender happens with much more regularity but it’s not as simple as needing insurance or not needing insurance. But the difference there is what your deductible is so that’s why high deductible policies are so much less expensive than low deductible policies. If you have a zero deductible on your auto insurance the company knows they’re going to need to pay for every ding and dent,  it’s going to cost you.

Listen on as Nick and Dave talk about cell phone insurance and other things to consider. Do you need it or don’t you? Should you insure it or rely on your own contingency fund?

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.

The year is half over, and despite recession fears, banking turmoil, and a debt-ceiling standoff in Washington, the stock market continued its current roll last quarter. US stocks, as measured by the Russell benchmarks, were positive across the board for the quarter, year to date, and the last 12 months. While international returns aren’t as robust, the results have also been positive across all three-time frames except for frontier markets. Bonds were slightly negative for the quarter though still positive year to date.

Watch on YouTube HERE

As always, there are both positive signals and reasons for concern. Mario and Eric, our portfolio advisors at East Bay Investment Solutions, have summarized those points for us:

One of their main points for this quarter is that the US economy is not currently in the recession that almost all economists predicted at the beginning of the year. However, they discuss the possibility of a “rolling recession,” where the overall economy is performing ok, but industries such as housing and tech rotate through challenging times, layoffs, and earnings warnings. Most importantly, they point out that the data that tells us we are in a recession is backward-looking, while the markets are forward-looking. For example, in early 2020 the stock market tanked as Covid restrictions were put in place. The economy entered a recession, but the data didn’t show that recession until June, and by then the stock market was well on its way to recovery.

Here’s the full text of East Bay’s Commentary.

You can watch their recorded video presentation here: East Bay Quarterly Review

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.

Dave and Nick have another MSU case study for you. This one is a very common scenario that comes up often – couples who are nearing retirement and seeking help from a financial advisor. They know they want to retire and they are looking for someone to help them put all the pieces together.

They have been managing their money themselves, for the most part, with some support from the plan providers at Michigan State. But now that they’re getting close to crunch time they are really starting to think about what it means to go from fully employed long-term careers at Michigan State to being retirees.

The first two questions typically are:

“Can we retire?”

“What does that look like?”

They are concerned that there is something they are missing or not thinking of and they want our help thinking through the options and managing it going forward.

The people that come to us in this situation are commonly in the same age range with similar situations. Here are the avatars we created to discuss this case study.

Bob is 62 and Barb is 61, they are married and they both have long careers as MS faculty. They’ve saved for retirement all through their careers. However, Bob is worried that with raising a family and moving across the country once, they are behind. He’s ready to retire if they can afford it but Barb isn’t so sure, regardless of their finances. Bob is old enough to draw social security and he feels he should be able to be done with work.

They set up their MSU accounts years ago with TIAA CREF and then left them alone. We chose TIAA CREF for this example because it gives us a couple of wrinkles to talk about with their plan. Bob knows they have a lot of risk but it is paid off well over the years and he is confident that will continue into the future. Regardless of social security and investment accounts, Barb feels that they can’t retire until their mortgage is paid off. They owe about $120,000 for the next five years at a rate of 3.5%. This was originally a fifteen-year mortgage and they refinanced when rates were very low.

Listen as Nick and Dave add some common themes to this scenario and unpack it a little bit.

Do you know anyone in a similar situation who works at MSU (or another university) who is getting ready to retire? A financial advisor may be a great investment at this stage of the game.

Call us today! 517-321-4832 

Shotwell Rutter Baer financial planners specialize in helping clients who are employed by MSU. We have extensive knowledge of the benefits packages offered by MSU and how to maximize their offerings. You can find more information on the MSU section of our website.

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 an amalgamation of things that Dave has read over the last year or so and has been studying.

Dave’s wife got him a book for Christmas on stoic philosophy that was a general overview. He read different parts every day with explanations of what stoic philosophy entails. He kept thinking, “Boy this is almost a manual for good financial planning attitudes.”

Stoicism as a philosophy doesn’t deny that we have human emotions. It’s more about recognizing that we have emotional reactions to things and trying not to let that drive how we respond to things. Focusing on what we can control and controlling our emotions with respect to decision-making. With respect to financial planning, we spend a lot of time coaching folks through the emotional ups and downs of market changes.  Don’t make silly portfolio decisions based on your gut reaction to an election or a law that was just passed or a supreme court ruling.

Listen to the full episode as the guys dive into what really drives happiness, how to stay calm during stressful times, and more aspects of stoic philosophy.

Here are links to some of the references that Dave talks about in this episode:

Daily Stoic Website

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 talk about cyber security and keeping yourself safe. They go over some of the steps that they take for their clients to make sure that they maintain safety.

Watch on YouTube HERE

As you age, there is a real threat of being targeted for different kinds of risks, scams, and abuses out there that are targeted toward the older population. It can be difficult to have these chats it’s important to know.

SRB goes through Cyber security training as a team every year. Our team also did an elder abuse program that covered things like how to spot, prevent and help with financial abuse.

We decided it was an important topic to share on our podcast because we want folks to know what we’re doing and what they might be able to do. Elder abuse doesn’t just touch us and our clients. Many people are touched by it by the fact that they’re taking care of elderly loved ones.

Younger people can also be vulnerable to scams just because they hit at the right time and in the right context. You can get caught off guard by something that maybe in other circumstances they would have said, “Oh no, that doesn’t seem right.”

Scams to Watch Out For:

Listen to the full episode for more scams and ways to avoid them. Please share with friends and family who need to be aware of these scams so they don’t fall victim.

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.