Author: Caitie Leibman

Bulls, Bears, and… Red Pandas?

Animal metaphors are all over the business world. There are cash cows and fat cats and top dogs—oh my! 

And maybe you’ve heard of bull markets and bear markets? Bulls swipe their horns up to attack; bears swipe their paws down to attack. Bullish investors are preparing for prices to rise; bearish investors are preparing for prices to fall. These terms are common in investment and market news, but as you’ve learned with us, we don’t like to follow the herd. (See what we did there?) 

We don’t need an animal mascot that’s ready to “attack.” Business isn’t war. We’re trying to grow something here. 

But we could use an animal that’s flexible, light on its feet, and can think for itself. It should be a strong climber, too—ready for all the ups and downs of investing! 

And if we’re picking our own mascot, would it really be so bad if it also happened to be adorable? 

Enter, the red panda.  

Maybe you’ve already heard of these little cuties, but did you know how unique red pandas are? Red pandas are sometimes confused with foxes, traditional panda bears, and even racoons, but they are none of those things! In fact, they are the only species within their genus. They’re one of a kind.  

At first glance, you might also think most financial advisors would all be alike. But once you get to know us, you might find out we’re more like the red panda. It’s hard to put us in anybody else’s category. We’re unique, and we can’t help but be ourselves. 

As for the other qualities? Red pandas hit the mark.  

They’re fabulous climbers, easily scaling mountains and getting up and down trees and bamboo forests. They aren’t afraid to climb down headfirst, nearly vertical (it’s like they know that even the steepest drops won’t go down and down and down forever!). Red pandas have adapted over time and have a “false thumb,” an extra little feature that helps them grip as they climb all over. Flexible? Check.  

On their feet, red pandas have special hairs on the soles so that they don’t sink in the snow, even when they’re running and have to change directions. Their bushy tails also help them stabilize, keeping their balance as they walk along tree branches. Light on their feet? Check. 

Red pandas prefer solitary thought to group-think, so we know they won’t be getting caught up in any herd mentality or stampedes. 

And to top it off, did we mention that red pandas are a symbol of good fortune in some cultures? 

No guarantees, of course, but beyond the bulls and the bears… red pandas might be the animal mascot we’ve been waiting for. 

Clients, what do you think: is it time for 228 Main to adopt an animal friend for a mascot? Call or write in, any time. 

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Bulls, Bears, and Pandas—Oh My! – 228Main.com Presents: The Best of Leibman Financial Services

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Enjoying the Fruits of Your Labor
photo shows a basket of apples and a hand reaching in to pick a red one up

by Mark Leibman

We’re inspired by recent conversations with clients and friends whose plans, as they say, have come to fruition.

Fruition—the realization or fulfillment of a plan or project—scarcely begins to describe the satisfaction and joy we’ve seen.

What types of projects?

There’s recent retirees who downsized to a maintenance-free home, going to art festivals instead of pulling weeds, having more dinners with their descendants, and seeing more ball games. There’s the people going on that Alaska cruise or the tour of Italy. There’s the people turning hobbies into true avocations.

These are just some of the plans we’ve seen come to fruition for people we are close to.

A wise person once said that a plan is a dream put into writing. We are in the business of trying to make the arithmetic work for people who would like to try to make their dreams come true. We’ve written before about the best way to retire, and the point is, dreams are personal.

What are you trying to do? Where do you want to wind up?

One of the privileges of long experience in our work is seeing the realization or fulfillment of those plans made long ago. But life sometimes throws curve balls. So we’ve also seen adjustments made by people who would have preferred to avoid the need to adapt. Not everyone we love lives as long as we wished, health may be fleeting, and circumstances often present a mixed bag. Nevertheless, sound plans usually put us in better shape to deal with the unanticipated.

Money is not the most important thing in the world. But it is also true that our resources can buy us options we might otherwise not have. Wealth may free up our time, and time is what life is made of. Dreams and arithmetic working together may make the best things more likely.

If you would like to discuss your dreams and plans in greater detail, please write or call.

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Catsup, Ketchup, or Catch-Up?
graphic shows a piggy bank looking on curiously at a bottle of ketchup

One of these is not about tomato-based condiments.

In the world of IRAs—Individual Retirement Accounts—we consider the beginning of January through tax filing day “catch-up season.” Whether Roth or traditional, if we are eligible to make contributions, then we can catch up on our 2023 contributions even though 2023 is over.

Those just learning about the power of Roth IRAs can use this season to make two years’ worth of contributions at once. The limit on contributions is $6,500 for 2023 plus $7,000 for 2024.

Another note to know: for people who turn 50 by year-end, there is an extra $1,000 per year that can go in—a “catch-up” contribution.

Imagine if you had $13,500 in a regular account (in which you pay tax on earnings) and were eligible to contribute to a Roth IRA for 2023 and 2024. If you won’t be spending that money in the next few years, the question comes down to whether you would like to never pay tax on earnings on that money, ever again, for the rest of your life.

If that value were to double over the years and double again, as sometimes happens with long-term investments, there might be $54,000 available later with zero tax. And if you didn’t spend it, your beneficiaries would receive it, free of income tax.

No guarantees, of course: the markets go up and down.

The way Roth IRAs work, after five years your contributions can be withdrawn without tax. At the later of five years or age 59½, the earnings may be withdrawn without tax. There is a maximum earnings limit on Roth contribution eligibility; we’d be happy to visit with you about your eligibility. Simply email us or call if you have an interest in learning more.

There is a whole world of other lifetime tax reduction strategies related to Roth conversions; we’ll talk about those another time.

For now, happy catch-up season, one and all!

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss.

This information is not intended to be a substitute for specific individualized tax or legal advice. Neither LPL Financial, nor its registered representatives, offer tax or legal advice. We recommend you discuss your specific situation with a qualified tax or legal advisor.

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Catsup, Ketchup, or Catch-Up? – 228Main.com Presents: The Best of Leibman Financial Services

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What We Mean by “Plans and Planning”

Clients, when we say “plans” and “planning,” what exactly is it that we’re talking about? From Day 1, our conversations center on you: your goals, your concerns, and how your life and your money work together. So planning, we believe, includes any and all topics that affect your financial wellbeing. 

Our planning services are included as part of our process working with clients. Some investment advisory shops do bill separately for time spent selling “Financial Plans,” so it bears mentioning that we do not. 

Instead, we tend to use wide-ranging planning conversations throughout our relationship. They’re handy when we’re first meeting each other, and they give us useful talking points over time, like when we’re reconnecting at or in between our annual reviews. 

Not every client will bring up the same topics or concerns, but generally, people’s questions tend to focus on some similar desires. Maybe some of these statements resonate with you: 

  • “I want to figure out how to organize my finances.” 
  • “I want to feel like I’m financially secure, independent, or free.” 
  • “I want to be able to support the life I want to live.” 
  • “I want to be able to create the legacy I have in mind.’” 

These desires are not universal, and they’re not necessarily linear. Not everyone moves through them like one step to the next, and sometimes we loop back around to revisit them again and again. And they take some thoughtfulness to maintain. 

But you might notice these four items do capture some trends and progressions. They cover a range of chapters in our lives—from getting started, to getting a grip on things, and then to getting what we want out of the whole deal. Once we know where we are in the process, it can be easier to get down to the details. 

Consider some examples. 

“I want to figure out how to organize my finances.” Does my monthly cash flow comfortably cover my outlays? Where does my time and money go right now? How is my job or career outlook? What are some good first steps for me given where I am? 

“I want to feel like I’m financially secure, independent, or free.” Do I have what I need in terms of an emergency fund and a support network? What demands affect my cash flow now and in the near-future? What financial challenges and financial goals can I anticipate in the coming chapters of my life? 

“I want to be able to support the life I want to live.” Am I living where I’d like to live? Working how I’d like to work? Enjoying what I’d like to enjoy? How do my saving, spending, and investing align with what I want now and what I want later? 

“I want to be able to create the legacy I have in mind.” What’s on my heart? What estate or charitable considerations are on the horizon? What opportunities have presented themselves? What impact would I like to have? 

Clients, our operation is continuing to grow, and we need to be able to serve you not only in the months and years ahead—but for the decades ahead! Your beneficiaries and the generations to come will be better served if we’re thinking about how this work persists beyond any one of us. 

That’s why we’re taking the time here to try to define our terms.  

It’s important that we’re on a common mission here. Financial planning prompts like these aren’t a script, and they aren’t something that will be “one-size-fits-all.” Instead, they give us a jumping off point. They give us somewhere to start from or begin again—together. 

Are we due for a conversation? Call the shop or send us a message, anytime. 

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What We Mean by "Plans and Planning" – 228Main.com Presents: The Best of Leibman Financial Services

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Waffles, Friends, Work
NBC / Getty Images

“We need to remember what’s important in life: friends, waffles, work. Or waffles, friends, work. Doesn’t matter, but work is third.” 

—Leslie Knope 

I think we all can relate to Leslie Knope from Parks and Recreation from time to time. This TV heroine’s persistent optimism and love for improving her community are things that resonate with us.  

Although our first instinct is to laugh when we read the above quote from Leslie, we do think there are some great takeaways in this phrase: we can remember to cherish our relationships and treat ourselves, even as we are working towards our goals. 

Life is short, so we love to spend time with friends and family while we can. Instead of staying late at work to finish up a project that can wait until tomorrow, we learn to call a friend instead and see if we can stop by. Some days, it’s a rush to get home to a beautiful family and cuddle our loved ones. Any moment can be precious. 

We take the time to treat ourselves and relish what comforts us. What’s that one dish that takes you back to your childhood or a great time in your life? Whether it’s a potato salad that reminds you of Grandma or a dish you had on your wedding day, food is a simple way to reconnect with ourselves or others. Our bodies should be nourished both physically and mentally, so don’t deprive yourself. 

While we need to work to provide for ourselves or our families, there is more to life than your career: work is just one part of our story. Not many of us will be looking back on life and thinking, “Gee, I should’ve spent more time at work!” Instead, we will reflect on the memories we’ve made with the people we love. We work so we can enjoy all of the wonderful things life has to offer, on or off the clock. 

How do we prioritize the people or things that are important in life? It’s up to each of us. Leslie Knope is a character who is passionate about her work—but even more passionate about her friends. (Does that sound like a friendly shop on Main Street you might know?) 

We hope that the work we do together will let you spend less time stressing about your financial plans, so you can have more time to spend on what matters, from friends and waffles to whatever else is precious to you. 

Call or email, anytime.

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Waffles, Friends, and Work – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/.

Oh, the Prossibilities!
The human brain is amazing… except when it isn’t. How else do you think the world ended up with a Shark Week?! Low-probability events, fear, fixation, and how to clear things up—in this video.

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Whitney, for the Win!

You know her name from emails; maybe you’ve even had the pleasure of speaking with her on the phone. You may remember us announcing her arrival on the team just over one year ago, when she was lending us her talents part-time via LPL Financial’s Administrative Solutions program.

Today, we’re proud to announce that Whitney Engle of Floris, Iowa, is joining our team full-time! We are employing her directly as she continues to work remotely.

Whitney will serve as our new Client Services Coordinator, continuing to work closely with Larry and Patsy on the service team and also supporting the management team of Mark, Greg, Billy, and Caitie with their various duties in research, portfolio management, and communications.

We have staffed up from time to time in recent years to continue taking care of the business. This latest expansion will have a few important benefits: now that we are an SEC-facing organization, it’s more important than ever that we stay efficient in our processes and systems.

Having another team member onboard full-time also means one more friendly face is at the ready, getting you what you need, when you need it.

“I can’t wait to spend more time getting to know clients,” Whitney said. “They are the reason we’re here.”

As we’ve gotten to know her across these months, we’ve felt so fortunate. Whitney’s skills will continue to grow in her new role of course, but she has already shown many of those qualities that are tough to teach: enthusiasm, curiosity, tenacity.

Not only does she take pride in her work, Whitney is someone who clearly cares so deeply about her family—and the menagerie of animals they keep at home! Her proactive approach to things will no doubt continue to improve the experience for all of us and for all of you.

For the months and years ahead, we know that people are key to helping us help you. So, we hope you’ll help us offer a(nother) hearty welcome to Whitney! Thanks for being with us.

Above: Whitney (left) and Caitie (right) meet up in the office in Louisville.

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Whitney, for the Win! – 228Main.com Presents: The Best of Leibman Financial Services

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That Sinking Feeling… or a Sinking Fund?
photo shows a jar full of coins, a stack of cash, and a small card that says "PLAN"

by Mark Leibman, President

Have you ever been faced with a large expense for which you were unprepared?  

I have. It gave me a sinking feeling. 

Sinking itself isn’t always a bad thing. The term “sinking fund” originally referred to a dedicated reserve a corporation would set up to repay a debt, contributing funds on a regular basis to build up the needed amount.  

Many individuals have adapted the idea to manage their personal finances: having a sinking fund may help us avoid that sinking feeling. 

This idea came in handy a while back as I set out to see how well the sources for my retirement income were matching up with my expenses. My home has a new roof, won’t need another for many years. My vehicles are fairly new; they won’t need to be replaced for years, either. 

But the fact is, someday I will need to pay for a new roof. I will need to replace a car. Furniture and appliances wear out. More predictable but “lumpy” expenses happen, too, like property taxes and planned travel. 

If my budget fails to account for these items, my budget is not really covering all of my living expenses, is it? The answer is a sinking fund, as in these examples. 

  • Home maintenance. If I sink $200 for repairs and such into a sinking fund every month, I would have $12,000 every five years. That should cover a new roof ten or fifteen years from now… or deductibles on storm damage… or a chance to repaint when needed. Likewise, $100 monthly should cover whatever appliances or furniture need replacing: that’s $12,000 over ten years. 
  • Transportation. Piling $350 monthly toward vehicle replacement ought to pile up to enough to buy a car when needed, years down the road. 
  • Annual needs. By adding in one-twelfth of my property taxes and one-twelfth of the annual travel budget each month, my sinking fund should be able to handle most anticipated lumpy expenses, in general. 

I don’t know when the dryer will need replacing—or what else might break!—but I should have the funds to meet the need. And in any of these scenarios, if the balance gets way ahead of likely expenses, I could always pare back the monthly deposit, direct that money elsewhere as I see fit. 

There are different ways to do sinking funds. I set up a monthly automatic transfer into my account, where the funds will go into an insured cash account until needed. 

If you would like to set up a sinking fund for your lumpy expenses, email us or call.

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Sinking Feeling or Sinking Fund? – 228Main.com Presents: The Best of Leibman Financial Services

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Time Machines or Time Capsules?

Both could serve their purpose, but which sounds more useful, more versatile: a time capsule or a time machine? Well, the two might have something to teach us about our investment vehicles. More on the blog.

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Are They SMART Goals in a Dumb Pond?
photo shows a ripple growing in a blue pond with green trees in the background

by Caitie Leibman, Director of Communications

Use SMART goals.

Be smart about it.

Work smarter, not harder.

You’ve probably heard this advice at a juncture in life; maybe you’ve even said it to someone else. Goals don’t get us very far unless they are explicit, meaningful, and can be tracked. Without them, aren’t they just dreams? “Hope is not a plan,” I’ve heard it said.

None of this is meant to be cynical, but I’m thinking about an important distinction: having “smart” goals won’t matter if they’re pointed in a “dumb” direction. So let’s get out of that framework. Smart and dumb are relative anyway (not to mention judgmental!).

The fit of a goal matters. For those of us youngest children who ever wore hand-me-downs, you know that even the stuff in the best shape isn’t quite right if it wasn’t picked for you. Alignment of a goal matters too: the thing better fit into the big picture. Does achieving a big purchase now help me live the life I want, without side-tracking my long-term goals? Just an example.

And your goals stay yours. Then it’s part of our job to make sure our strategies stay aimed at those goals.

We, too, strive for good fit. We don’t splash around in “opportunities” that don’t align with our principles. We seek bargains, we focus on owning the orchard for the fruit crop, we avoid stampedes. If it’s not in alignment, it could be a distraction or a tangent.

Jane Fonda once put it nicely: “If I want to make ripples, I better be sure I’m throwing my pebbles into the right pond.”

“Right” is relative to your life, your vision. We’re just happy to be part of the effort. You decide when it’s time to check in on your goals and direction.

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SMART Goals in a Dumb Pond? – 228Main.com Presents: The Best of Leibman Financial Services

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