billy garver

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

photo shows a shiny red push lawnmower sitting in green grass in front of a brown picket fence

In the United States, as in most places in the world, we are governed by the Gregorian calendar. But as we flipped the page and entered the “-ber” months, many of us are facing once again the power of the all-important academic calendar. 

Children, grandchildren, and neighbors are back to school. Summer is over for most 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 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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Collaboration: It’s a Team Effort!

black and white photo shows six hands bumping fists in a circle

Clients, looking back over these decades together, the word “collaboration” is what comes to mind for me. I have worked with some of your households for years, and I am most proud of what you and we have created together. Successful investing requires effective attitudes and intentional actions with money. You, the best clients in the world, have been stellar partners in this regard. It has truly been a team effort.

But I’m realizing that “collaboration” will have even more meaning for our work in the years and decades ahead. The success we’ve enjoyed together has resulted in an enterprise that is now beyond my ability to run by myself (and not that I would want to—to my estimation, the gang and I seem to be having a pretty good time together!).

Greg Leibman became an integral part of the effort a long time ago; Caitie Leibman and Billy Garver bring us perspectives and skills we formerly lacked and now rely on.

Two of our core activities are investment research and portfolio management. With the increasing wealth you’ve brought to us, these activities are more important than ever. Our capacity to do them depends on the team we’ve assembled. It’s a collaboration that’s become vital to our daily work.

Even as we conduct our work as a team, however, I remain the regulatory head: as an Investment Advisor Representative of LPL Financial, I am the business structure. The others, on paper, are technically assistants working under my direction.

This regulatory structure is a vestige of the days when this was a one-person operation, and it no longer aligns with what we’re trying to do here. So, for the rest of the year, we plan to work toward restructuring our firm as a Registered Investment Advisor: this arrangement should more clearly reflect how we can best serve you in the years and decades ahead.

Friends, you know about my intention to work to age 92, and that is still the case. But I also believe that part of my responsibility to you is to help shape an enterprise that can outlast me. The mortality rate remains 100%, so sustainability is the watchword here.

A team format—four officers, working collaboratively—gives this entity some of the durability it deserves. Fortunately, LPL Financial has developed plans and processes for this exact scenario, which is not unique to us. I’ve not lost my sense of gratitude for what LPL Financial has meant to my family and me; your funds will continue to be custodied with them. Account numbers and history and online access and statements and all that will remain essentially unchanged.

There will be just a bit of paperwork to transition each account. Details will follow as we learn more.

It will take the balance of this year for us to continue this work and implement the new structure. Clients, we will be in touch with more detail about this journey as it unfolds—and we are excited to get things more aligned with the big picture.

Please email us or call with questions or comments. Thank you all again, for everything.


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Throwing Yourself for a Loop

Sometimes life’s big milestones arrive in a neat, straight line. And sometimes that’s just not what happens—or what we want to happen. How do we plan for a swoopy life?


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Getting Back to Basics

The pandemic forced many companies to shake things up. But perhaps because of these challenges, some of the most basic, “boring” companies on our radar have been making some of the most interesting changes!


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Which Came First? The Bargain or the Growth Stock?

graphic shows an image of a hen and an image of a basket of eggs both taped to a chalkboard

It’s a classic thought experiment. “Which came first: the chicken or the egg?”

Clearly, the egg came first; that’s where chickens come from! But, wait. Who laid the egg?…

There’s a similar conundrum found in our work. In business and investing, we like to look for strong companies—ones that spend wisely, save well, and try to build an enterprise that can remain durable across changes in the economy. Often, these companies must have a strong balance sheet (i.e., more cash than debt) in order to grow to the size of an industry leader.

Clients, in the early stages of the pandemic, we invested in some companies leading their industries. Our original investing thesis was that even if the virus took its toll and a worst-case scenario occurred, people would still need the staples.

People would still need groceries.

People would still buy meat.

People would still order prescriptions.

While we were sure these everyday items would be impacted by pandemic life, we also believed they would likely survive—in one form or another.

Now many of these market leaders have been able to use the resources of a market leader to continue to evolve and transform organically. They may seem like “boring” companies on the surface, but in times of challenge, they are acting like growth stocks: many have been the first-movers among their peers, making plans that could shift their whole industries.

And believe it or not, we bought some of these companies as bargains. So which came first?

It’s fun being us. Clients, we are always looking for opportunities. Are you seeing anything that we should be watching? Let us know. And when you want to know more about what this all means for your portfolio, call or write.


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Which Came First? The Bargain or the Growth Stock? 228Main.com Presents: The Best of Leibman Financial Services

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

Getting Stuck on the Ground Floor

“Getting in on the ground floor” may sound enticing. We humans like to be first, best, and on top of things. But just remember that the view is usually better from higher up.


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The View from the Top

photo shows a city skyline from the perspective of a rooftop viewfinder

In movies and popular media, there are certain images associated with investors. One of the character tropes is the well-to-do friend racing around in their fancy sports car.

Picture it with us. The car, bright and shiny, has a vanity license plate: it notes the ticker symbol for the holding that made them rich. If the story gives away any more information, it’s that the friend benefitted from a hot tip about a tiny tech company on the brink of striking it big.

Outside of Hollywood, it’s true that some of the most successful investors have done something like this. They happened upon that one hot investment that more than made up for all the mediocre ones. (The bad ones, too, for that matter.) They happened to get in, early.

Clients, we’re seeing newer industries with many possible pathways to growth over the next 7, 14, and 21 years. It’s exciting, but within each of these sectors, there might be dozens of public companies vying to become the next big thing. They all want their ticker on the license plate. The problem is, there is no way to tell—in the moment—which single company it will be.

If a growing industry is going to prove to be important, there’s no harm in waiting for the field to narrow. Time will tell, and so will experience, performance, management, debt, and competition. The companies that aren’t built to last? They’ll be winnowed out soon enough.

The car, the license plate, those aren’t the goal: we believe in investing because it’s getting a piece of the action. It’s providing capital to endeavors we can get behind.

So while getting in on the ground floor sounds enticing, there’s no promise that the building will ever be built—and it’s hard to beat the view from the top.


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A Certain Set of Skills

photo shows a baseball sitting on a striped jersey

When designing a portfolio, one might think about it like a baseball team. Obviously we want to build a winning team, but we know it won’t likely be an undefeated team. The strength of the team is in the versatility of the lineup.

Each player brings a skillset. There’s the base-stealer, the defensive replacement, the slugger, the all-star… We’re thinking about how some of these spots play a role in portfolios.

  • The Veteran Player. This is an older company that pays a nice dividend. It provides value even if it doesn’t perform as well as the others.
  • The Utility Player. This is a durable company providing steady, unexciting performances.
  • The Streaky Player. This is a company that has stretches of greatness followed by mediocrity—but it’s bound to turn it around. The potential is there, and the broader patterns suggest patience.
  • The Slugger. This company can carry a portfolio some days, strike out other days. It’s getting after it.
  • The All-Star. This company is the face of the portfolio: everyone knows it for its all-around performance. It’s a big presence.

No portfolio can be made from just one type of player. A portfolio consisting of only all-stars would be too expensive (and we like a bargain). A team of streaky players would be good during the good times—and tough to watch when they’re all struggling in sync.

A balanced lineup is what we desire. No guarantees on any particular outcome, but we think there are plenty of strengths that come in handy. Clients, when you have questions, please write or call.


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