Month: December 2019

New Lifestyles, New Plans

© Can Stock Photo / photography33

It seems that life used to be plainly segmented. First we got educated, then we worked, then we retired.

Financial plans followed suit: first we accumulated during our working years, then we spent in retirement – hopefully, not running out of money before we died.

Increasingly in the 21st century, life is sliced and diced. Periods of education may happen at any age. People remake themselves to meet the needs of the marketplace, or their own preferences. Stretches of leisure may be mixed in with periodic bouts of consulting or other work in the golden years.

Some people choose to retire to volunteering or a new business venture or employment in a more enjoyable field, or seasonally, or part-time. There are a lot of ways to live life these days.

In addition to changing lifestyle patterns, people are living longer than ever before.

In this new environment, financial plans and planning need to be more flexible, and serve different purposes. The key theme: flexibility.

1. Investment products that tie your money up for years are less appropriate than before, as changing circumstances could mean an unforeseen need for liquidity.

2. The accumulation of funds in traditional retirement accounts still makes sense. Adequate funds make work optional in later years, or enable volunteer work or even a business start-up.

3. It may pay to pay more attention to tax brackets, as shifting circumstances could change tax status from year to year. Techniques to take advantage of low-bracket years may reduce lifetime total income taxes.

The key, of course, is not what the trends are or what many people are doing, but what YOU want to do. Clients, if you would like to talk about this or anything else, please email us or call.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Warm and Fuzzy Productivity

© Can Stock Photo / arosoft

The last fifty years in business have seen the transformation from pencil and ledger to spreadsheet, the secretarial pool typing letters to email, research in the library replaced by internet services. Every process can be done exponentially better, faster, and cheaper than half a century ago.

With the incredible increase in productivity over this period, it is a wonder some believe that more increases in office productivity will fix the central issues we face. In our business, as in every business, cost pressures continually push us to do more with less.

It is the conceit of every industry that margin pressure is something that uniquely affects it. In fact, the whole history of human enterprise can be summed up in two words: shrinking margins. The first supermarkets had lower margins than the butcher, the baker and the dairy they replaced. The Sears catalogue had lower margins than the general store. Charles Schwab had lower margins than E.F. Hutton.

The way we see our work, honesty and competence are the entry requirements to the business arena. Beyond that, the productivity issues do not center around software and systems, but people and connections:

1. Do we have the empathy to put ourselves in your shoes and understand your heartfelt objectives, to learn what you can tell us about your needs and situation?

2. Do we have the creativity to collaborate with you on strategies and tactics that may get you closer to where you want to go, in light of all factors: market, economic, tax, everything?

3. Do we have the ability to communicate what you need to know in order to work effectively toward your goals?

‘Relationship’ is the word that sums up these points. Relationships are at the heart of whatever past success we’ve had with you, and whatever exciting future we may build. You, the best clients in the world, play a starring role.

In this view, the key technologies are not how fast some back-office process gets done nor the colors in the pie chart nor pages of dense calculations of statistical history. The key technologies are those things that enable you and us to communicate. When we get basic information to all of you at once, our one-on-one talks can start at a higher level and go farther.

Blog posts at 228Main.com, social media, videos, and our email newsletter are the ways we talk to everybody at once. (None of these existed fifty years ago!) Emails, phone calls, and meetings let us go one-on-one to work on your issues. We have worked diligently to master the technology that most matters to our mutual success: communications.

Clients, if you would like to talk about this or anything else, please email us or call.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

For Those Close to Our Clients

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We believe there is an edge in playing the long game, and thinking long term. This applies to life and investing and planning, in our view.

In our work for clients, there is often a legacy aspect to it. Financially independent people tend to leave assets behind for loved ones or subsequent generations. This means that from time to time we find it necessary to work with a trustee or executor or beneficiaries or heirs of a client.

So those left behind face a lot of new things, and often need to try to gain a feel for what we are all about here at 228 Main – decide whether we are trustworthy – at the same time. Clients sometimes tell us they hope their children will listen to our counsel, and hope that we will be there to work with heirs.

Recently a client expressed these kinds of wishes, and the hope that her children would get engaged with us, and perhaps use their inheritance wisely.

This makes sense. We all want the best things to happen. Our work is not finished until we have done what we can to make the best things more likely.

Here’s an idea that can help you and us improve the odds of success in this legacy work. Provide us with the email addresses of your children, heirs, trustees, executors, and other interested parties. We will add them to our weekly email newsletter list. By reading the blogs and watching the videos, others can gain a sense for what we are about. Convenient, on their schedule, people have told us it is a great way to get acquainted.

We don’t have time to bug people on our list, and it is very simple to unsubscribe. Nobody will get unsolicited spam or phone calls as a result of being on the subscriber list.

So if you are a client wishing to acquaint others with our work, please get us names and email addresses so we can add them to the list. If you are receiving emails from us and don’t know why, this is it. Unsubscribe if you would like, you’ll get no hassle from us. We are busy trying to grow the buckets entrusted to our care.

Clients, if you would like to talk about this or anything else, please email us or call.

Takeovers Mean Turmoil

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Recent news in the investment industry touched close to home in Nebraska. Charles Schwab is to buy TDAmeritrade, and move the headquarters to Texas. How many of the 2250 jobs will be left in Nebraska is uncertain. A lot of things will change.

The first shares of stock I ever bought were at the discount brokerage firm Joe Ricketts founded. At the time, the place had fewer than twenty employees. It was in a second floor walkup office in a second-rate building in downtown Omaha. The lobby had a most amazing gizmo: a little Quotron machine. You could punch in a stock symbol, and it would show you the current price.

Those prices were not in dollars and cents, but dollars and fractions. XYZ might be selling at 27 ½ , ABC at 9 ¼.

Before personal computers, before the internet, stock quotes were something you got out of the newspaper or called your broker for. The afternoon paper had noon prices; the morning paper had the previous day’s closing prices.

But in the Ameritrade lobby, a dozen patrons stood in an endless loop of a line, waiting for a turn at the Quotron. They punched the symbols in, looked at the prices (some wrote them down), then went to the back of the line to wait for another turn. Daytrading took more patience then.

Later, the firm pioneered getting information to the people by making stock quotes available from any touch-tone phone. (Kids, ask your grandparents what I’m talking about.) Then the internet made a lot more things possible.

It is not for me to judge the takeover transaction; it evidently makes sense to the people who are making the decisions. We will do our best to help affected employees, of course. We will always remember the typically American story of innovation and success that Ameritrade represents.

Clients, if you would like to talk about this or anything else, please email us or call.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

20/20 Foresight

© Can Stock Photo / leolintang

The New Year is upon us. Like Opening Day of baseball season, the first day of school, or any other beginning, it is a good time for plans and planning.

We’ve been able to focus on strategic issues in recent weeks, ones that will shape our work for you in the years to come. The general theme? Build an enterprise that will serve you well, and be durable enough to outlive me.

While we work ON the business, of course, we also need to work IN the business, taking care of things for you. Fortunately, we know exactly what the stock market and the economy are going to do: go up and down, same as always. Time tested principles and strategies will always be the foundation of our work with you. They do not eliminate the ups and downs, but they improve the odds we will survive them and come out on the other side.

The items on our list are wide ranging. The more significant ones: finding and developing more good people to join the team, figuring out office space, determining whether we need to form our own Registered Investment Advisor, guiding the evolution of our offerings, and building a more robust financial planning process.

But enough about us. What about your strategic issues? If you want to talk about retirement, changing where you live, sorting out who should get what after you are gone, or simply where to invest for the long run, email us or call.

Where Did the Decade Go?

© Can Stock Photo / Konstanttin

We experience life as a series of moments. The future approaches, then becomes the present for a moment, and passes into history.

The dawn of the third decade of the 21st century is upon us; the current decade is nearly history. The moments we had!

In the first days of 2010, my wife Cathy flew to Florida to furnish and outfit a newly purchased condo; I joined her after a couple weeks. We began our life as snowbirds, skipping some cold weather weeks in Nebraska. (Planning to work to age 92, we had to figure out how to have some fun along the way.)

Our Office Manager Greg Leibman agreed to help in the office here at 228 Main during my absence, January 2010. It did not take long for me to get a glimmer of the potential of that association for the business.

Our planning, disruptions, and adaptations led to surprising growth and development. We focused more tightly on investment advisory business, performed under the auspices of LPL Financial’s RIA (registered investment advisor). That side of the business now accounts for over 70% of assets, $70 million now. That structure elevates our desire to serve your best interests to a binding obligation upon us, the way we like it.

The family health challenges we worked with for most of the decade brought us to a revolution in communications, forced me to learn how to delegate effectively and figure out how to build a team to serve you. The lesson I learned from my life with Cathy, make the most of what you have, enabled us to keep things running so we had the health insurance and resources she needed in her illness.

We had more than full measures of pain and joy in the decade. That is what life is made of.

And now a new decade looms. We hope to be able to make an interesting report to you about it, ten years hence.

Clients, if you would like to talk about this or anything else, please email us or call.

Dream or Vision?

© Can Stock Photo / Gautier

Scott McKain has a story about a legendary motivational speaker with whom he had a chance to become acquainted. McKain, a best-selling author, consultant and friend, happened to share breakfast with him at a conference. He learned that this speaker lived his creed: ‘walked his talk’ as they say.

The integrity, confidence, and connectedness exuded by the legend led McKain to conclude this is success: to be who you claim to be, to do what you say you will do, to live the vision.

“Living the dream” is a phrase some use to describe an ideal life (sometimes ironically.) But dreams end when we wake up. A vision is something different. One of the definitions of ‘vision’ is the ability to think about or plan the future with imagination or wisdom. So living the vision is a way transform the future we desire into reality by what we do each day.

Here at 228 Main, we are thinking a lot about how our work for you might be improved in the years ahead. We don’t want to be big, but we do strive to make the very best things possible for you and yours. It is too early to say our vision has evolved and grown – but we are working on it.

We may ask you for input and perspective as we shape these plans. You will hear about the pieces as we figure them out. One thing we already know: having the best clients in the world makes the whole project a worthy endeavor.

If you would like to talk about this or anything else, please email us or call.

Look Rich or Be Rich?
© Can Stock Photo / ragsac

Some people have so much money, it doesn’t matter what they do with it. On the other hand, some don’t have any. Our work tends to be with those in between, those who need their money to work effectively. Clients, that’s where you and I live.

Many financially independent people we know faced the choice of a lifetime: they could look rich, or be rich. And they chose to be rich. The cost of impressing others is quite high when it manifests in expensive homes, vehicles, and conspicuous consumption.

The difference between a $250,000 home and a $500,000 one is not just $250,000. The recurring expenses connected with the more expensive home may include higher property taxes, larger utility bills, more interest expense, and greater maintenance costs. Those recurring expenses reduce room in the budget for accumulating wealth to live on in later life.

A recent article about $10,000 watches had the headline, “Affordable Watches That Will Make You Feel Like A Millionaire.” This seems funny to us. We delight in asking people whose invested wealth has reached the $1 million mark whether they identify as a millionaire now. Not one has answered ‘yes.’ So if a million dollars doesn’t make one feel like a millionaire, what chance does a $10,000 watch have in getting that done? (A large fraction of the millionaires I know wear $39 watches.)

The paradox is that those who strive to look rich may never accumulate much in the way of assets. Meanwhile, those who chose to be rich may eventually learn how to spend well. They can afford the vehicles that provide the most comfort, the homes that make daily life better, generosity to descendants or charities, and travel to bucket-list destinations.

The flaw in attempting to impress others is, we do not control what others think. We only control our own choices. Those everyday millionaires (and those on the way) in our acquaintance seem to have learned this early, and made the wise choice.

Clients, if you would like to talk about this or anything else, please email or call.