mark leibman

Happy Baby, Happy Investor

One of the few childhood pictures of me shows a happy baby. My sister says I’ve always been a happy baby. Optimism has been a lifelong trait, for sure.

I can’t know what delighted me all those decades ago, when the photo was taken. But when I survey my finances these days, I still feel the same way the baby in the photo looks.

I like what I own—percentages of ownership in a couple dozen companies. Iconic names, dominating their sectors. Some companies that are working to sort out the future of their industries, which are in flux. A few enterprises in lines of work that did not exist when I was young. The largest player in a fragmented, but consolidating, industry. Producers of vital materials for the age we are in.

These diverse firms have one thing in common: our research team believes their shares of ownership may be more valuable in the future than they are today. No guarantees, of course.

What I own is only part of it. How I own is another key. With a large fraction in a Roth IRA, gains are free of tax as they compound, when they are taken out and spent in my real life, or when left to people or causes I love. All the income tax freight was paid in advance for all time, on those smaller balances I converted to Roth—not the compounding tax-free wealth I now own.

And really, all of that is the proverbial cherry on top. The greatest source of my joy arises not from what I own nor how I own it: the knowledge that my resources exceed my needs, that’s the big thing. It was not that way when we started out, was it? Now, I have enough.

A dear friend once related to me what Grandma always told her: “I have enough, and enough is as good as a feast.” I love this thought.

Oh, my holdings go up and down too, just like yours. Sometimes a company we own messes up. But we know how this works, don’t we? We believe our principles and persistence will get us through, and knowing that is another source of joy.

Clients, if you would like to talk about what you own, how you own it, or what makes for enough, email us or call.

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

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.

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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Spend Well

The object of our work can be distilled into four words. Half of them have nothing to do with saving more, investing more, or putting off pleasure today in order to have more wealth tomorrow.

Invest wisely, spend well.

We’ve seen the dreary advice, no matter how much you are saving, to always be saving more. Some of you have told us about “advisors” who discouraged withdrawals from investments for any purpose, no matter how worthy.

What’s the point? As one of our clients recently told me, “I’m not living my life to make my kids rich.”

Invest wisely, spend well. We each know what spending well means in our own lives. But the reminder is that we’re not investing wisely in order to have: we invest to be able to do or be something different, to work differently or live differently.

These two facets of our work interact with each other. If we invest wisely and thereby increase our investment returns, we do not need to put away as much money each month in order to reach a sense of financial security “some day.” So investing wisely may give us more flexibility to spend well, even during our so-called wealth-building years.

Some advisors start with your pre-existing attitudes about “the market” and serve you up a lower-performing portfolio if you come in with any fears about volatility. We, instead, strive to work with people who were either born with great investing instincts or can be trained in them—in how to invest effectively for the long run. We believe this means, hopefully, obtaining higher returns by enduring the wiggles of the market, not pandering to fear of volatility.

This is what we do at 228 Main.

It’s not for everyone.

But if you can “invest wisely,” you may have more money to “spend well”—both now and in the future.

Invest wisely, spend well. Clients, if you would like to talk about the balance of these concepts in your life, email us or call.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is not a guarantee of future results.

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Have Your Cake, Eat Your Cake

They say you can’t have you cake and eat it, too… but what if your cake had the potential to grow over time? Who says you can’t snack when you’re hungry and still save some for later?

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What We Do—But Mostly What We Don’t

Organizations sometimes use “mission statements” to capture their core focus or values. In a sentence, why does this company exist? What is its main purpose? What’s the goal?

It’s a useful exercise. If we had to spit it out, what would we say we do? We invest.

There are a lot of ways to flesh out and explain this mission (and we do that, often, in our communications!). But we also consider ourselves contrarians. So it makes sense that we also like to explain our work in terms of what we don’t do.

We invest… but not with guardrails. No training wheels, no buffers, no timing schemes. We don’t give guarantees, and we will not offer a false hope of market returns without market volatility.

Why don’t we like that stuff? All of those things cost money or opportunity—or both—and thereby limit our future wealth.

So you won’t see us whipping out any literature about risk that confuses it with volatility. You won’t see pie charts that arbitrarily slice up a portfolio. We won’t pretend to know better than you about your goals or how you live your life.

We seek to invest for the long term when the cost of owning a percentage is lower than the value of the ownership opportunity, in our studied opinion—even as we know that the market price will fluctuate, even as we know we will not always be right.

But a smoother ride to a poorer future? No thanks.

Clients, want to talk in more detail? Call or email, anytime.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal. No strategy assures success or protects against loss.

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Research, Behind the Scenes!

Clients, this week we’ve got a little behind the scenes tour: what happens in our in-house research process?

Here are some of the things we like to think about (so that you don’t have to!).

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Truck Stop Chili Dogs

What would I have to learn if I could talk to my past self? Or my future self?

There are some mental exercises that might help us reflect on our goals, but here’s what I’m wondering: What do truck stop chili dogs have to teach me?

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Getting to the Good-Enough Place

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Clients, in each round of portfolio reviews, we have a chance to get into the nitty-gritty with many of you. There are changes we suggest, but we also do a fair amount of listening. We’re shaping the future together, after all.

We’ve enjoyed our research in sectors like renewable energy, efficient energy systems, and more sustainable forms of transportation. These areas continue to grow all the time, and it’s been an interesting challenge to find the best opportunities among the players. Some of these developments hold promise for making the most of modern life here on earth while respecting our finite resources and limits.

We’ve written about how certain investing styles are harmonious with our focus on the long term, and whatever you call these practices, we’re interested: we want our practices to be more sustainable, more consciously capitalist, more socially responsible… You get the picture.

But it’s not an all-or-nothing proposition. Businesses are human endeavors—perfectly imperfect entities with a variety of goals, costs, and tradeoffs. So how do we minimize harm and maximize long-lasting good?

Maybe you’ve seen the sitcom The Good Place, but this Ted Danson and Kristen Bell show keeps coming to mind in these conversations. It’s an exploration of the afterlife, and believe it or not, it asks some hilarious questions about the meaning of life’s choices. How do they add up? Who has earned a spot in “the good place”?

Ted Danson’s character puts it this way: “Life now is so complicated, it’s impossible for anyone to be good enough. These days just buying a tomato at a grocery store means that you are unwittingly supporting toxic pesticides, exploiting labor, contributing to global warming.” He’s trying to point out that life in the 21st century is so interconnected that even the most mundane choices are tied up with consequences that cross the globe! “Humans think that they’re making one choice,” he says, “but they’re actually making dozens of choices they don’t even know they’re making.”

Put that way, it can seem overwhelming. There could be an existential crisis lurking in every grocery store aisle!

But, just like the characters in the show, we’re trying to come at this with a lighter, more gentle approach. What the characters come to realize is that given the costs of our choices, which do enough good that we can live with the costs?

Where can we be of service?

How might we try, fail, and then try better?

Big questions, important topics. Clients—let’s keep talking. When you want to know what this might mean for your portfolio, write or call.

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We the Imperfect People

“We the People of the United States, in Order to form a more perfect Union…”

So reads the Preamble to the Constitution, which frames the purpose of one of our nation’s fundamental documents.

The authors didn’t necessarily mean the plan was flawless. We’re not constitutional scholars, but a quick search will reveal that the word “perfect”—at that time, used like that—probably meant something more like “complete,” “confident,” or “whole.”

Today, the Fourth of July still commemorates something like this, the idea of coming together. In many communities, the young and young at heart gather outside to play with sparklers or in sprinklers. We might remember eating a slightly burnt hotdog a parent made us or huddling together to watch fireworks light up the horizon.

Scenes like this may very well drum up feelings of unity. While some may feel this same sense of pride for the ideals of this country all year round, some may be more apprehensive. We know that at the mere mention of politics, tensions can start to build. Sometimes it can feel as if, anywhere we turn, we’re being asked to choose sides and being pitted against each other.

How can we find common ground in such a divided union?

Each party, whether we’re talking political party or neighborhood block party, is made up of the same thing: people. Each party is made up of parents and children, students and teachers, doctors and delivery drivers. You get the idea. We are people who are probably after similar things. Aren’t most of us seeking to live happy, fulfilled lives? Wouldn’t most of us prefer a safe and stable environment to thrive in?

We all want a chance at a bright future.

When there is political tension or big political change on the way, it’s not uncommon for clients to start wondering how to make their portfolios “politics-proof.” Anxiety is a normal response to change, but a look back at history can remind us that the outlook in this country is generally okay following each major political shift. Not “perfect” results or glorious returns—but generally okay.

The dust from elections and major events does eventually settle. And we keep at it. We are all here, hard at work, in the name of improving this grand experiment, together. The beautiful thing about democracy is that it is always evolving.

The words written by white-haired men almost 250 years ago described a world that has grown, evolved, and developed in ways they could never have foreseen. The Constitution may end with a period, but you better believe the story of this country is one we’re always writing. There is always going to be room for improvement, and we can do it together.

The markets will be closed for this Fourth of July, and we’ll be taking a little break along with many of our fellow Americans. We wish everyone the best. May we all be surrounded by good food, great company, and diverse experiences. Life is richer when we share what we have.

What in your life can we help you celebrate? Call or email if you would like to chat, anytime.

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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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Putting on Our “Listening Ears”

Listening to one another is a gift that costs nothing but means everything. We know that our time and attention are precious resources, which is why our team here at 228 Main always has our “listening ears” on🙏

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