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Adulting 101: Three Money Buckets

Those first paychecks can be thrilling. It’s like a signal of being a real adult—and all the responsibilities that come with that term. You’re earning real money, but how do you make those earnings powerful? When you spend less than you earn, you develop savings—but how do you learn how to manage those funds?

We think the easiest place to start is to try and sort your financial goals into three buckets.

The first one you have is short-term. This is where you go to find money to deal with emergencies. You also use the short-term bucket to save for annual expenses like real estate taxes or insurance premiums. This bucket must be stable and liquid, to provide money when you need it. Returns are secondary.

On the other end, you have a long-term bucket. If you ever hope to retire instead of going to work every day, or accumulate wealth for other long-term goals, you need one of these—even if retirement feels like forever away. Unlike the first bucket, this one may endure more volatility in the hopes of garnering higher returns over a long-time horizon. You should plan on not tapping this bucket except for those long-term goals, short of an emergency which can be met no other way.

Naturally, the third bucket is in-between. You may have goals for things that happen in a few years, on an intermediate time horizon. It might be for a major purchase like a boat or camper, to meet educational expenses for a child, a down payment on a home you intend to buy at some point in the future.

Not surprisingly, the third bucket may balance stability and higher returns with a middle of the road approach. It might use a mix of investments from the other two buckets, or other types of investments with intermediate stability and returns.

The idea of three buckets is a helpful way to understand the functional purposes of investing. You will need to know something about the basic kinds of investments, styles of investing, some tax considerations, and the options available.

Clients, if you need help sorting the buckets to reach your financial goals, 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.

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Adulting 101: Three Money Buckets – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at ⁠228Main.com⁠.

Choose Your Ingredients 

by Mark Leibman, Advisor

More content from Mark

I learned how to make soup back in the last chapter. Now a variety of soups are a staple of my diet. 

Crafting a new soup recipe recently, I started with a chicken, six herbs and spices, and seven kinds of vegetables. I used some olive oil and a splash of red wine vinegar. It may be served with a mix of seven kinds of beans, and rice, of course (you know how I feel about rice and beans!). 

It came out really good!—according to a biased observer that I recently married.  

Contemplating the choices made in the creation of the soup, I thought about how we build portfolios here at 228 Main.  

From many alternatives, we select what we want to own and determine the proportions of each. Another school of thought holds that portfolios should consist of some of everything—500 stocks go into the S&P 500 index, for example, so portfolios get to hold a little of each. 

That led me to wonder, What would Index Soup look like? 

  • 150 herbs and spices? 
  • 50 kinds of vegetables? 
  • Beef, pork, chicken, fish, and eight more kinds of animal protein? 

And it might even be served with 25 kinds of beans, and 10 varieties of rice! 

That would have to taste like a little bit of everything, and not much of anything, wouldn’t it? 

Just as different recipes can reflect a wide variety of tastes and textures and smells, and we humans have an appetite for different things at different times, our portfolios evolve and change as conditions unfold. 

By looking for the best bargains, by avoiding stampedes in the market, by planning to own the orchard for the fruit crop (thinking long-term), our collection of opportunities has diverged from the most popular kind of Index Soup, the S&P 500.  

Creating our own recipe helps avoid another possible pitfall of Index Soup—not that it can get too bland in its attempt to average everything, but that it can get too heavy-handed in spicy times. 

Recently, slightly more than half of our long-term portfolios are invested in small- and mid-size companies. We’re diversified around the world, although about two-thirds of value is still invested in the U.S. While AI-related stocks have captured the public imagination, we’re focused a little more on value-style stocks than the mega-size growth companies, which we believe may be over-valued at present. No guarantees, but we’re trying to be intentional with our flavors. 

Meanwhile, Index Soup focuses on large U.S. companies, with an emphasis on growth. Technology is nearly 37% of the mix in that soup, and the top seven holdings are mega-size tech companies.  

We know that the flavor can get “too strong” at times: back in the year 2000, the S&P 500 index, and technology stocks generally, left a bad taste in the mouths of many investors the last time valuations approached extreme levels.  

We can’t know the future, but we are hopeful our recipe is going to “taste” a lot better in the months and years ahead. No guarantees—past performance is not an indicator of future results. 

But we don’t have to be the best chefs in the world. We’re just trying to find a blend that works for us. 

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Investing involves risk including the loss of principal. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. 

The S&P 500 is an unmanaged index which cannot be invested into directly. Past performance is no guarantee of future results.  

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Choose Your Ingredients – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at ⁠⁠www.228Main.com⁠⁠.

TENDING TO THE FLOWERS: Each season makes way for the next

by Whitney Engle, Client Services Coordinator

More content from Whitney

We were talking as a team the other day when Mark brought up a vivid memory from his first summertime job. He worked at Peony Park in Omaha, Nebraska, an entertainment venue that included everything from an amusement park and a swimming pool with a third of a mile of beach, to a dance hall and picnic grounds.  

You’d think the first memory to flood back might have been a thrill ride or the Sprite Nite dances. But Mark remembered something else. 

Walking through the park each day to get to work at the pool, Mark passed an old fellow, dressed in overalls, working in the flower beds. Day in and day out, the man tended the garden. For a long time, Mark didn’t know what he was witnessing. 

Turns out, the Malec family’s early businesses capitalized on a neighboring peony farm: Joe Malec, now of the overalls, was one of three brothers who started what became Peony Park. Fifty years later, it had blossomed into a major force in the community. 

As a kid, Mark found it odd. Wouldn’t a founder have more important things to do? 

With age comes wisdom. Fast-forward another fifty years: Mark understands why Joe was in the flower beds. Between his own efforts and the help of his descendants, Joe found the freedom to focus on what he enjoyed the most. Sure, tending the flowers wasn’t the flashiest work, but that is how he wanted to spend his time. 

Mark doesn’t have overalls, but he too gets to “tend the flowers” now, doing what he loves most: talking with you and trying to find new investment opportunities. He spends half his time in Louisville, the other half working from afar—focusing more on making memories and building relationships. 

Leibman Financial Services is now a team of seven, so Mark no longer has to be a jack of all trades. You can reach out to any one of our advisors to get the same service and care as if you were talking to the founder himself. So, if you ever try to schedule a meeting with Mark and he’s not available right away, please remember that just like a farm, the firm is a team activity. 

Doing work you love, for a living, is a true blessing. Thank you for being a part of our story. 

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Tending to the Flowers – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at ⁠www.228Main.com⁠.

The Choices You Make on Payday 

For our youngest clients, payday is a big deal.

If you’ve just graduated high school or college, or are early in your career, we’d point you to the importance of the choices you’re making each and every payday. Retirement may be one financial “destination” you’re working toward, but there’s something exciting about enjoying the little steps along the way.

What can you do for yourself each and every payday?

Pay Yourself First.

This is one of the fundamental tenets of financial planning: save a portion of everything you earn for later. That portion is your “savings rate,” and maybe you start it at 1% or 4% of every paycheck.

Then you increase it by 1% a year until you start to build up some nice sums across the years, and this becomes the raw material of your future retirement! Say you get a raise your second year on the job: put half that raise away for retirement. So if you get a 4% raise, add 2% to your savings rate.

You may hear figures like saving 10 or 15%, but that doesn’t always make sense to begin so high. Young adults need to start buying groceries and paying for electricity—and have decades ahead to build up their wealth.

Settle Up the Past. Another choice on payday is to take care of past debt. Watch out for carrying expensive (high-interest!) debt for too long. If you’re paying 8, 10, or even 12%, you should put some serious thought into paying off that debt before you consider saving or investing that money.

If you pay off $5,000 of credit card debt that you are paying 12% interest on, your $5,000 “investment” will save you $50 a month, $600 a year, like clockwork. You’d be hard-pressed to find any other investment that will pay you that kind of return—and if you did, it would likely have many risks associated with it.

But once you pay off your debt, those interest payments are gone forever. Consider if it would make sense to settle up anything from your past.

Invest for Future You. If you happen to be starting a job with an employer-sponsored 401(k) retirement plan, consider enrolling so that an automatic contribution is made out of your paycheck every pay cycle. Ask if your employer matches contributions, and consider maxing out that match. We don’t want to leave “free money” on the table.

When you are a long way from retirement, you can afford to take a long view with the investments you choose for the plan: various investments ask you to commit to either the chance for short-term stability or the chance for long-term returns, but you can’t really have a shot at both at once.

Investments that promise a stable value tomorrow or next year do nothing for you in your real life when you are decades away from retiring. You might aim for higher returns instead.

In Conclusion: The Joy of the Journey

This is basic financial literacy you can use any payday, especially for those just starting out.

As always, everyone’s situation is a little bit different, and we’re more than happy to discuss the particulars of your situation with you: even if you never open an account in our shop, we believe that anyone might build a stronger future when they’re able to pay themselves first, settle up the past, and invest in their future selves in whatever way they can!

It may seem hard to imagine a destination that may be decades away, a big goal like retirement. Instead, it’s much easier to get in the habit of enjoying small steps along the way—the things you can do each and every payday.

That’s the joy of the journey.

The opinions voiced in this material are for general information only and are 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.

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The Choices You Make on Payday – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at www.228Main.com.

Was Hamilton Keeping Up with the Joneses? 

As people achieve financial freedom, some feel compelled to display more and more of their wealth. It may come from pride or social ambition or something harder to name.

In the musical Hamilton, the characters frequently admit, “I will never be satisfied.” This is the trap of buying for show, manifesting itself in expensive homes, luxury products, and conspicuous consumption.

Even Alexander Hamilton, who built the national financial system we still use today, struggled with this concept. He focused so heavily on the appearance of being a gentleman that historians say he nearly left his family destitute.

The paradox is that those who strive to look rich may never actually accumulate much in the way of assets. Meanwhile, those who choose to be rich may have a better chance of learning to spend well. They come to be able to afford vehicles that provide the most comfort, homes that make daily life better, generosity to descendants or causes, and travel to dream destinations.

But they didn’t get there by choosing a drawer full of $10,000 watches when perfectly adequate $39 watches exist.

As the show reminds us, “Look around, look around at how lucky we are to be alive right now.” It’s what Alexander Hamilton kept missing, that mix of investing for the future while enjoying what’s available today. He struggled to find joy in the comfort of home, the ability to travel, or working toward the financial security of his family’s future.

We may not want to follow his example, but the show provides other options. There is a beautiful line that defines legacy as “planting seeds in a garden you never get to see.” We only control our own choices. The everyday millionaires learn this early. A well-managed portfolio is one way of planting that garden (or orchard) for the people who come after us.

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

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Was Hamilton Keeping Up With the Joneses? – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at ⁠www.228Main.com⁠.

THE SINGLE BEST INVESTMENT FOR NEW GRADS? 

Dear Grads,

You’re probably receiving a lot of unsolicited advice right now. We happen to love talking about finances all day, so we hope you’ll forgive one hot tip, a piece of investment advice that could last you the rest of your life.

Keep investing in yourself.

This investment adjusts for inflation, and it grows along with you! When we invest in ourselves, we are seeking to improve our value to others. The more valuable we make ourselves, the more an employer or customer might pay us. Not to mention, improving ourselves often leads to more interesting and rewarding life experiences.

You have intangible assets that led you to this moment: remember, not everyone earns a diploma or degree. Don’t take for granted the skills, knowledge, strengths, and abilities that you’ve developed already. All those qualities add up to form your “human capital,” the value you might contribute through your work and your community in the years to come.

Great news: many aspects of human capital are free. Years ago, we knew a senior officer at a large publicly traded company whose most obvious superpower was kindness. After they moved on to a role somewhere else, people familiar with them always remembered that trademark feature—how the executive had helped them in the past, how they had made people feel.

Kindness is free. So are dependability, enthusiasm, diligence, and all the other traits people appreciate in each other. They can be developed, like muscles.

Other aspects of human capital require time and money, sometimes lots of both. Think of the education and training required of surgeons, for example. Choosing your educational path and planning a career are beyond the scope of this note, but you might consider how you make your choices.

How will the path help you be of service to those around you? What impact would you like to make in your corner of the world, as you move through it? You have a chance to create value, no matter where you’re headed next.

Developing your human capital is the foundation of building wealth. Whether it’s growing your earning potential on the job, choosing a new path as your talents develop, or finding a way to invest to leave a legacy, the power of compounding starts now, from the skills that got you here.

It all starts here, and it’s the one piece of investment advice that could last your lifetime. But hey, that’s just our two cents.

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The Single Best Investment for New Grads? – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at http://www.228Main.com.

THE SEEDS WE PLANT: Caitie reflects on a historical moment

by Caitie Leibman, CEO

More content from Caitie

Friends, March was Women’s History Month. It was also the end of my first quarter as CEO of Leibman Financial. I spent a lot of it learning new administrative duties—you know, all the ones Mark is allowed to forget now!

Of course, it’s Mark we have to thank for founding and leading LFS for the past 30 years. But I’m reflecting on Women’s History Month and what this moment means. Some of you remember my late mother and Mark’s late wife, Cathy Livingston Leibman. My mother was an entrepreneur, too, leading businesses out of our home when my siblings and I were little. She bought me my first business card holder, a reminder of her many gifts and her example.

Today this little case holds a brand-new card, with my new title. It’s got me thinking: I’ve felt so fortunate to get to know the wide variety of women we serve, from among our business partners, colleagues at other firms, and especially our clients.

Who are they? They’re women who work or run their own businesses, and those who don’t happen to earn a paycheck. We’ve worked with women who are teachers and drivers and hairdressers and architects—and everything in between. We’ve served straight women, queer women, and trans women. Some have gone to college. Some are retired from the trades. Some are widowed, some are partnered up, some are single.

The wondrous variety of these women makes one thing clear: there’s enough room for everyone. I’m thinking about all the different women who might find our firm and wonder if we’re here for them, whether a certain path could be theirs too.

In 2026, we’re committed to making our work more accessible and more easily available.

I enjoy the shade and sustenance of so much that was planted before my time—on Earth and at this firm! We have confidence that what we plant today at LFS will bear fruit for many seasons ahead. And whether the plans ripen during Women’s History Month or not, I’m sure they will still be history-making.

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The Seeds We Plant – 228Main.com Presents: The Best of Leibman Financial Services

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Revisiting the Ant and the Grasshopper
close up of prairie grasses before a bright sunrise

Most of us are familiar with Aesop’s fable of the ant and the grasshopper: the hard working ants slave away all summer building nests and storing food while the lazy grasshopper idly eats and makes merry. Each one calls the other foolish: the grasshopper tells the ants they should relax and enjoy life, while the ants admonish the grasshopper to work harder and prepare for winter. In the end the ants have the last laugh when winter comes and they have food and shelter while the grasshopper has none.

It should be noted that Aesop was not a bug expert. If he was, he might have realized that grasshoppers only live a few months and do not survive long enough to even see winter. Knowing this, the grasshopper was actually quite wise to ignore the ants’ advice. He lived his life to the fullest, with no time wasted on unnecessary labors.

The true moral of the story is this: it is equally foolish to hoard wealth we’ll never use as it is to squander wealth that we’ll need in the future.

None of us knows the date that is going on our death certificate. We should strive to emulate both the ant and the grasshopper, because we never know which one we’ll wind up as. Like the ant, we should work hard and save wisely to prepare for the future. But like the grasshopper we should also enjoy what we have, while we have it. We need to have a little fun every day, because we never know how many days we have left.

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Revisiting the Ant and the Grasshopper – 228Main.com Presents: The Best of Leibman Financial Services

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RMD at 73: What’s Up with That? 

We have noticed that the rules about IRA account withdrawals can cause some confusion, particularly among those who are getting close to the “Required Minimum Distribution” age.  

Here, we’d like to cover what the basics might mean for most people, though it is not intended to be advice or a recommendation for your specific situation. 

For traditional or rollover IRA account owners, withdrawals after age 59½ are free of penalty, but income taxes must be paid on the amounts withdrawn. One may withdraw money or not, in accordance with their needs and plans. 

But beginning at age 73, the rules change. 

For each year beginning with the year you turn 73, a “Required Minimum Distribution” (RMD) must be withdrawn: 

  • “Required” means there is no option about it—it must be done. There’s a pretty hefty penalty tax for missing it. 
  • “Minimum” means that you must withdraw at least the calculated amount, though you may withdraw more if you choose. 
  • “Distribution” is simply the word the IRS uses for withdrawals. 

The way the numbers work, the first RMD for age 73 is around 4% of the prior year-end account balance. Then, the RMD rises gradually each year. The RMD is around 5% at age 80 and around 10% by age 92.  

The withdrawals will be taxable—that is the whole object of the exercise, from the IRS’s perspective.  

Even with those requirements, IRA accounts may still have significant balances until advanced ages. 

Here are just a few fine points:  

  • The factor used to calculate the amount comes from an IRS table, and we can help check the arithmetic for you. 
  • The withdrawal may be taken any time in the calendar year. 
  • If you have multiple IRA accounts, it can get confusing. Some people consolidate and simplify their finances at this point. 

For more information, the IRS explains more details about RMDs online, available here. Please also keep in mind that different rules apply to inherited IRAs, Roth IRAs, and certain other situations, so do seek specific advice for your situation as necessary. 

And our role? We aim to help each client figure out how your money might do what you need it to do.  

So the question of how you should manage your accounts and your withdrawal strategy is best answered in a one-on-one discussion. If you would like our help talking through your situation, please call or email us. Happy to help.

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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RMD at Age 73! – 228Main.com Presents: The Best of Leibman Financial Services

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The Rights of Shareholders? An Owner Is an Owner  
Photo of Warren Buffett surrounded by reporters with microphones

Photo courtesy of AP

Clients, the hallmark of our investment strategy is ownership of companies whose outlooks are favorable, in our view. A share of stock is a piece of the action: ownership of a fraction of an enterprise.

We have owned businesses in very old lines of work, like manufacturers of farm equipment. And we’ve owned companies in new lines of work, like cloud services. We’ve been in airlines and autos, software and chipmakers, miners and medicine.

Owners have rights. We elect directors. We receive our share of dividends paid. We get annual reports—and have the right to attend shareholder meetings.

Most of us pay little attention to the trappings of corporate governance, with one exception.

Held in Omaha where its long-time leader Warren Buffett was born, Berkshire Hathaway hosts one of the largest annual shareholder meetings on the planet, with tens of thousands of people descending on the city for the festivities.

Each spring, information about Berkshire subsidiaries and the products and services they offer is shared during this corporate tradition. You can buy everything from insurance to ice cream treats. Visitors learn about companies as diverse as railroads and homebuilders.

Did we mention? Shareholders also happen to get discounts at Nebraska Furniture Mart, Borsheims, and other retailers.

For many years, Buffett himself and key leaders would entertain questions from shareholders for hours, before conducting the business of the annual shareholder meeting itself. Some say that Buffett is among the most successful investors in the history of the world: when he stepped down as CEO of Berkshire at 95 years of age, his longevity also became cemented in his legacy. He’s not alone in that in Berkshire history, either: the late Charlie Munger, long-time vice chairman, passed at age 99.

Buffett, Munger, Buffett’s descendants, and other individuals and entities have owned a vast swath of the voting control of the company over the decades.

But here’s the thing: an owner is an owner. Even a single share of stock entitles the holder to certain rights. Shareholders may inspect select corporate documents, beyond those already published and available to the public. They can nominate and send in votes to elect members to the board of directors.

And they’re allowed to participate in the annual meetings.

This spectacle of Omaha is a powerful reminder of the meaning of ownership. It’s getting a piece of the action—and being part of something bigger.

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Clients, if you have an interest in attending or taking advantage of other opportunities, you’ll need shareholder credentials. A form to order those should be included in Berkshire’s Annual Report, or you can stay tuned for more details from us in the weeks ahead. 

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Companies mentioned are for informational purposes only, and this communication should not be considered a solicitation for the purchase or sale of their securities. 

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Who Is “ABLE”?—Achieving a Better Life Experience – 228Main.com Presents: The Best of Leibman Financial Services

The text of this episode is available at ⁠⁠228Main.com⁠⁠.