Should you get a tattoo? It’s quite a commitment. But the idea makes me wonder: what are the images and messages that matter most to us? What guides our choices?
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Author: Caitie Leibman
On Getting a Tattoo
Friends, maybe you could have guessed this about me… but I don’t have any body art. (I seriously doubt this topic has ever crossed your mind, but here we are.)
I’m considering the idea of a tattoo—just the idea. A tattoo is a somewhat permanent endeavor: that ink becomes a part of your human body, so it’s as permanent as any other part of these mortal vessels we have.
To some, it’s a huge commitment. It’s etching a message that travels with you, for the rest of your life! I suppose it’s not something to take too lightly.
But I can appreciate what a powerful tool it might be across someone’s lifetime. A tattoo may not be for everyone, but we certainly understand the impact that a phrase or image or saying can have on a person.
As an alternative, you could also consider getting yourself a “mind tattoo.” This idea appears in Jennifer Pastiloff’s book On Being Human, and it was important to her as she worked to change her life. She chose guiding words—anything that helped open her up, when she felt like shutting down.
So what would you pick, if you could get a key idea inked into your mind, a reminder that was always there when you needed it?
The nice thing about a “mind tattoo” is that it can be your own little source of strength. No need to shout it from the rooftops or fight about it on the internet, huh?
So may something helpful become etched in your mind. Keep an ear open for that mantra, any words that help you breathe more deeply when you’re feeling overwhelmed.
Who knows what might stick with you?
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The Longevity Discount of Investing
Stability is no bargain. A lump sum invested for 25 or 30 years in a less wiggly portfolio might only grow to half as much as a more effective portfolio that embraces that longer time horizon. The longer we can tolerate volatility, the better off we may be.
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It’s Second Look—and Second Opinion!—Season
Clients, the markets are at a low point. It’s a prime time to revisit our holdings! Let’s take a second look.
To be clear, portfolio reviews are part and parcel of our regular business. But these times of churn and change are a great opportunity to look more closely—and try to make sense of everything given the context.
Conversations with some of you lately have inspired some changes. Could it be time to garner tax losses and take a different approach with some of your resources going forward?
Our goal at 228 Main is to grow your buckets. We believe the better off you are, probably the better off we will be down the road. That’s enough for us to review and comment on your plans and planning, as well as your investment holdings and accounts.
While it’s Second Look Season for us in the shop, could it be Second Opinion Season for anyone in your life? It could be you know folks who are paying fees for investment management when their investments don’t seem to be managed at all. Does anyone in your life have long-term investments stuck in stagnant short-term holdings?
I often say I’m in business to talk all day. If you have questions about your holdings, I might as well be talking to you and your loved ones! And clients, please know that we have nothing to lose by your seeking a second opinion of your own. All the power to you: you are the boss of what you do with your wealth. (We seem to get all the business we deserve, and none that we don’t.)
No matter where our resources land, remember that the markets go up and down. We won’t tell fairy tales about “minimizing risk” or getting market returns without enduring the inevitable fluctuations. We will not ignore that the price of so-called “safety” is often the loss of potential future gains.
But we do believe in striving for long-term total returns. So we live with volatility. No waves, no voyage. No rain, no flowers.
Clients, when you have questions about your situation, please write or call. If you know someone who would like to chat with us, let them know Second Opinion Season is in full swing, now through year-end!
Thank you all, for everything.
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It’s Second Look—and Second Opinion!—Season – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
A Guess as Good as a Plan
Sometimes new clients visit our office with apologies ready: they don’t exactly know what they want or what they might need in the future. And that’s okay. Plans and hunches and visions… It’s all welcome.
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When a Hunch Is Good Enough: Invest Wisely, Spend Well (Whenever)
It’s a new school year for so many of our children, grandchildren, and neighbors. Maybe you’ve enjoyed the flood of perennial back-to-school photos. Some families have their children hold up chalkboard signs, to record the details—their new teacher’s name, their favorite color right now, and even what they’d like to be when they grow up.
I can’t help but imagine what surprises are in store for some of these little ones! Who among us could’ve known exactly what form of work would find us in the future? Bike courier, hotel manager, a director of photography who specializes in making food look good in commercials—did any of these folks call their shot as kindergarteners?
It’s an interesting question, and maybe we should keep asking it. What do I want to be when I… reach my next birthday? Or the one five or ten years hence?
What do I want to have in the next chapter of my life?
What doors would I like to keep open?
These might sound like daydreams, but even the hazy hunches of children can be revealing, if not instructive. Sometimes new clients visit our office with apologies ready: they don’t exactly know what their goals are, they don’t know what to ask for, or they can’t begin to imagine what will be possible down the road.
And that’s okay. Just like the question on those little chalkboards, a hunch is good enough. Memoirist Katrina Kenison wonders, “Who knows, really, where dreams begin?” Maybe we’ve been on a certain winding path since we were children. Maybe we discover what we’re about later in life. Maybe our circumstances change, and we get dealt a hand we didn’t imagine we’d ever be playing.
A friend of mine used to tell their children, “This is the plan… until it isn’t.” And that’s life, right?
It’s okay to settle on a general direction, even in your financial life. Growth, an eye on sustainability: these are worthy plans all by themselves. You don’t have to know the destination of every penny. Such a privilege means that you’re buying your future self some options. Resources bring flexibility.
You can always invest wisely, now; the “spend well” part can wait. And what a journey that will be! We’re glad to be here with you.
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When a Hunch Is Good Enough – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
An IRA for All Seasons
Maybe you’ve heard the phrase “kiddie IRA”: it’s not a technical term. It refers instead to the use of a Roth IRA to help a young person start their investing career. Never too young?
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Saving Summer
In the United States, as in most places in the world, we are governed by the Gregorian calendar. But whether we’re watching our youth fling their mortarboards into the air or we’re flipping the page and entering the “-ber” months, many of us are facing once again the power of the all-important academic calendar.
Children, grandchildren, and neighbors will be out of school for the summer for at least a few weeks in most parts of the country, and it’s got us reflecting. Without school, summer for many families can include more sleepovers or late nights and long chats on the porch. It could mean hours at the city pool or the anticipation of a big vacation.
For some of us, summers have also meant more leisure and more work.
It’s possible that you earned your very first dollar—and then some, hopefully—one summer long ago. Teens are more likely to be employed during June, July, and August than any other time of year. And it makes sense: teens are more likely to have the time and opportunity then, as jobs like lawnmowing, babysitting, and lifeguarding peak each summer.
Clients, if anyone in your household under age 18 was out making money this summer, consider talking with them about the “Swiss Army Knife of finance”: the Roth IRA.
As long as someone has earned income (and doesn’t make more than the cap), they can contribute to a Roth IRA (up to the maximum amount). This means they might contribute up to the smaller of $6,000 or their 2022 total earned income.
Say your child or grandchild earns $3,000 in the summer: they could contribute up to $3,000 to a Roth. Of course, they may not want to forfeit all their earnings, but if they’re able to, this may be a prime opportunity to impart the value of saving. If you’re feeling nice, you could “gift” them the $3,000 to replace what they saved. Better yet, offer them a match: you pay them back some percentage of what they save.
Roth contributions are taxable now and enjoy tax-free future gains. Beyond the magic of compounding, starting a Roth account early has other benefits:
- At any time, you may withdraw contributions without facing a penalty or taxation.
- Beginning five years after the Roth was opened and funded, account holders can take out up to $10,000 (earnings and contributions) to fund the purchase of their first home, tax- and penalty-free.
- Beginning five years after the Roth was opened and funded, account holders can use it to pay for qualified college expenses, penalty-free (earnings will be taxed as regular income).
As children near college age, investors may have questions: the government does not include retirement accounts as assets in the calculations for student aid, so this type of savings vehicle should not impact the availability of federal financial aid.
Withdrawals would be counted in the calculation, but be aware: the FAFSA uses a “prior-prior year” income picture to avoid having to base their decisions on estimations. So, for example, even withdrawals made in a 4-year graduate’s junior year shouldn’t affect their aid eligibility.
The process of getting something like this set up isn’t terribly complicated. It is not necessary that the working person have a W-2, though we do recommend keeping records (think: basic invoices or even simple receipts from the neighbors for those lawnmowing or babysitting services).
Clients, could this be a way to help your children or grandchildren preserve a piece of summer? Call or write, anytime.
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 59 ½ 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.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
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Play the audio version of this post below:
Saving Summer – 228Main.com Presents: The Best of Leibman Financial Services
This text can be found at https://www.228Main.com/.
Video
TRANSCRIPT:
[MARK LEIBMAN] They say the journey of a thousand miles begins with a single step. Really, the whole journey, every inch of it, happens one step at a time. Everything you can think of is made of tiny things, tiny actions, single steps. The secret to accomplishing anything is basically to put one foot in front of the other.
The training of an Olympic swimmer happens one stroke at a time. Our quaint quarters at 228 Main were built one brick at a time. Books get written one word at a time. The 25 year history of LFS happened one day at a time. A $1 million 401(k) account gets built one fraction of a paycheck at a time. Healthy eating habits are formed one bite at a time. Relationships blossom one conversation at a time. A portfolio gets put together one opportunity at a time.
Humble, common actions within the reach of anyone are what great stuff is made of. You do this simple thing. Then you do it again. Then you do it again.
The secret to accomplishing anything great is to put one foot in front of the other, while you are aimed in the general direction of something worthwhile.
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Retire Now, Work Later?
We are in the business of talking, and nearly all of that talking is with you: we’re in the pursuit of connecting your money to your life. Often, we talk about saving for and spending in retirement. You’ve heard us talk about the strategies available with Roth IRAs, in particular, a few times before.
We still believe there are advantages available here for many investors (never being taxed on gains, of any size? yes, please). But we want to add to the mix another idea. We’re recognizing a trend that merits consideration.
Life for some can seem quite linear: each milestone follows in turn. You’re born, you go to school, you work, retire, and that’s that. A straightforward path, right? Now, we’re seeing more journeys that look like they swoop around, like life is written in cursive.
Some of these deviations have been becoming more common, like a “gap year” to gain more experience out in the world after high school but before college. This is a swoop we can choose and plan for.
Other deviations are more like being thrown for a loop. On short notice, some of us find ourselves stepping away from work to care for a parent—or other family member—due to a growing health concern. Others may discover what we want later in life and find ourselves taking on seasonal work, with long stretches for travel or other passions.
The traditional retirement savings vehicles were engineered for more traditional retirements. They are likely to assess a 10% penalty for withdrawals before you turn 59½-years-old. While you can take contributions out of a Roth IRA penalty-free, doing so also takes away the chance to grow more tax-free income for the future (the opportunity for growth, not a guarantee of such).
If there’s a chance that Future You would like to retire in stages or in a unique order, this swoopy life may be something to start talking about now. We have friends who are preparing to travel the world while they still can; we have friends planning to be available to a loved one when they need it.
What’s on the horizon for you?
It could be that a balanced taxable account may be a useful complement to traditional retirement holdings. You would pay tax on capital gains, but if you won’t be earning income—or will earn considerably less for a spell—your tax rate may be lower anyway.
Want to talk through what this could mean for you and yours? Let’s talk, anytime.
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 59 ½ 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.
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Play the audio version of this post below:
Retire Now, Work Later? – 228Main.com Presents: The Best of Leibman Financial Services
This text is available at https://www.228Main.com/.
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