We’re in the Orchard for the Fruit Crop

The idea of an orchard is useful in illustrating some of the basic concepts we use in investing and planning. (The metaphor is even among our greatest hits on the blog!) Orchards are long-term endeavors. The payoff from planting trees now arrives years in the future—not unlike retirement contributions.

During our working years, we tend to focus on our account balances—the value of our orchard, so to speak. But in retirement, the key factor is probably the size of the fruit crop, not the value of the orchard. We pay our bills in retirement with monthly cash flow from our accounts, not the statement value.

After all those years of watching the value of the orchard, this is a big shift in thinking. In our working years, the fruit of the orchard goes to plant more trees. When we retire, it is okay to live on the fruit crop.

Further, if we are living on the fruit crop, it doesn’t matter what the neighbor would pay for the orchard, or if the latest offer is higher or lower than the one before. The orchard is not for sale. This is the same way an investment portfolio works. Regular cash flow can come out, even as statement values go up and down.

We were reminded of this story recently, in working with retired clients who are considering a change in lifestyle. Their idea will take a lump sum of capital, plus an increase to their monthly expenses. They wondered whether their financial security would be impaired by the outlays.

The answer for them: the size of the remaining orchard should easily provide a fruit crop large enough to meet expenses. And in retirement, there is no compelling reason to plant more trees every year, to continually reinvest the fruit crop. It is okay to live on the fruit crop—and leave the orchard for the kids.

Clients, if you would like to talk about your orchard, please email us or call.


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We're in the Orchard for the Fruit Crop 228Main.com Presents: The Best of Leibman Financial Services

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Depth Is a Choice

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Some people find money talk awkward, to say the least. To others, it can seem tacky or even rude.

We’re in the business of money talk, though, and we know that there’s no planning for the future without it. What’s more—it can be a real pleasure! What could be more empowering than connecting numbers on paper to one’s real life? Getting a story in motion for a fellow human through a financial planning journey?!

Yep, I’ve been told I’m a little excitable.

But I do wonder how much of folks’ baggage about money talk comes from an unexamined relationship with money (or maybe years of being told what’s “proper” and what’s not?).

Clients, we’re not going to make you check any baggage at our door, but we want you to hear this: we recognize that our work gets really personal, really quickly. We know that our financial pasts and our future goals are intimate stories.

Can you imagine having a planning conversation that wasn’t personal, though? “I currently have a number of resources in several forms, and at a date in the future, I would like to be able to spend a certain amount of money for, um, reasons.”

In her book The Art of Gathering, Priya Parker talks about a facilitator she interviewed who compared coming together to entering a swimming pool. “There is a deep end and a shallow end,” the facilitator told her. “You can choose whatever end you want.”

To borrow this idea, we would suggest that financial planning is “an invitation to intimacy, but depth is a complete choice.”

We believe goals are intimate and individual by nature. We’ve talked before about how your neighbor’s retirement plan won’t be yours, your friend’s recent housing decision isn’t a blueprint for yours… You catch our drift?

All this is to say—we are here for the personal, the more pragmatic, and everything in between. We know the business we’re in, and it’s all about… you.

Clients, write or call when it’s time to update the specifics of your plans and planning.


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The Sun Will Come Out

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March 13, 2020: The novel coronavirus COVID-19 is declared a national emergency in the U.S.

In the weeks that followed, schools and businesses closed across the country as one state after another issued stay-at-home policies to curb the spread of the virus.

It has been a rough year since then, full of ups and downs. But now things may be on the final upswing. It won’t be long until we’ll reach 200 million administered vaccine doses, with many of our most vulnerable populations protected.

It’s not the end of the road yet. It will still be at least a few months until we have effective vaccine coverage in the general population, but the end of the road is closer all the time, nearly in view.

Many of the routine activities we once took for granted will come back: shopping, movies, sports, travel. Some of the changes we have gone through in the last year may stick around: perhaps people will be more inclined to get takeout than sit in a restaurant, and maybe folks will consider the occasional mask during flu season. But people will likely have fresh goals and new energy.

With this, we can expect a flurry of economic activity as people go out and do all the things they have been holding off on. After the shutdown started, many households responded by saving money and paying down lines of credit—we have not been spending the way we used to. Soon that is likely to change, and there is plenty of pent-up demand waiting to be fulfilled.

We have written before about the Roaring Twenties that followed on the heels of the deadly 1918 influenza pandemic: if things line up, we may be poised for this century’s own version of the Roaring Twenties.

There are no guarantees, of course. Even if we do see a massive rebound in spending, the market has a lot of expectations built into it. It is possible that the market has already priced in a robust recovery following the pandemic, leaving little potential for further gains.

Still, we have reason to be optimistic. Markets aside, we all have a lot to look forward to in our personal lives. Time with friends and relatives, at favorite restaurants and vacation spots. Many of us have suffered, and not everything we lost will come back.

But as the old song goes, the sun will come out—tomorrow.

If you would like to talk about your post-pandemic plans and planning, please call or email us.


The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.


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A Stylish Fit

Popular from the 1940s into the 70s, mid-century modern was a style that emphasized simplicity, light, openness. Its focus? Functionality. Natural materials and post-and-beam construction became key characteristics of homes in this style.

My own mid-century modern home—six months in!—delights me. But I’m really struck with how the aspirations of this design style resonate with the kind of enterprise we are striving to build at 228 Main.

In our shop, we strive to simplify the complex, to be open and transparent, to use fundamental financial concepts to help people build out their plans and planning in a straightforward manner. We let the light shine on our work, like it comes through the many windows of my home.

Just as the home is built to function well, with only those features that add something to the design, we try to keep everything we do pertinent to what you are trying to do in your financial goals. In fact, another way to say “setting financial goals” would be “connecting your money to your real life.”

We don’t really have the time or energy for a style any fussier than that!

And just as the mid-century modern style is not for everyone, there are those who prefer a different approach. One thing that goes into making you the best clients in the world is how well we work together. Those who require a different style are better off elsewhere.

But, clients, we get the sense that our mid-century modern enterprise is a great fit for us and for you! Open, always seeking clarity and function… ahhh. Beautiful, right?

When you’d like to talk about this or anything else, you know where to find us.


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Is the Market Too High?

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Some of you have asked recently whether the market too high: is a pullback coming? It pays to remember that the market drops 10% once a year, on average. We can’t know when; it isn’t possible to profitably trade by guessing the timing. So a pullback is always coming, to be followed by a seemingly inevitable recovery.

But let’s talk what we’ve been doing the last few months in response to the market and economic environment—our research in action.

We’ve pared back half a dozen stocks that moved higher. These grew to be an uncomfortably large fraction of your accounts. They may present additional downside risk despite bright long-term outlooks, in our opinion.

We’ve found bargains. Three of them are selling at 10 times earnings or less—phenomenal bargains in our view, on companies that lead their sectors. These include the largest grocery, the largest retail health company, the largest food processor. If their earnings are durable (as we expect), they have the potential to do well from these low valuations. No guarantees, by the way. But they are paying 2–3% in dividends—so we’ve got that going for us, which is nice.

We’ve gotten rid of a few duds. These are holdings we deemed less attractive than others we could own. We also recently added three agriculture-related stocks, expecting a change in fortunes for farmers after some rough years, finding perceived bargains in a big green tractor maker and a pair of leading global ag suppliers.

The short-term outlook is always uncertain, but we are comfortable with the moves we have made on your behalf. Our accounts don’t always go up, but we are always working to improve your position. Long game.

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


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Investing involves risk including loss of principal. No strategy assures success or protects against loss.


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When the Going Gets Tough

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Find the bargains. Own the orchard for the fruit crop. Avoid the stampede.

Our three main principles form a pretty clear constellation, guiding our practices here at 228 Main. They are action-oriented, so it’s not hard to tell day to day whether we’re sticking to them.

But what makes us stick with them, especially if we’re bracing for a downturn?

In life, when the going gets tough, our defenses can erode pretty quickly. Our energy flags. Anxiety kicks in. And loss can trick us into believing that good times will never return, that the hurt wins.

Writer and businessperson Arianna Huffington suggests a simple way to get sound decision-making back on track: choose love.

“You’ve got to make your heart bigger than the hole,” she says in her book Thrive. “You just have to make your decisions out of love. And when we make the decisions out of fear, that’s when we have problems.”

Trouble and triumph, set-ups and setbacks—those are constants, and our lives travel the roads back and forth to each. Why should we let fear take the wheel for any part of the journey?

Clients, we know that you’ve felt these truths: it’s part of what makes you the best clients in the whole world, after all. Let this be a reminder, then. We’re with you. We journey together.

When you’d like to talk about this—or anything else—please write or call.


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