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Good morning & happy Monday!

“He who loses money, loses much; he who loses a friend, loses much more; he who loses faith, loses all.”

– Eleanor Roosevelt, former First Lady of the United States

Let’s say I had a coin and two people with $1,000.  Let’s say both individuals put their $1,000 on the table and agreed that the winner of the coin flip would get $2,000 and the other person would walk away empty handed.  Would you be interested in being one of those two people?  Would you put your $1,000 on the table with those odds?

I most certainly would not.

Today I want to briefly introduce the topic of prospect theory.  It is a very in-depth analysis that won its author Daniel Kahneman a Nobel Prize in Economic Sciences in 2002 (I can tell you are excited 😉).  Attached you will find the full 30-page research paper on the topic … it’s a real page turner 😉. 

It is a fascinating topic because the theory basically states that making money feels good, but losing money feels about twice as bad as making money feels good.

Going back to the coin flip example, person #1 who won the coin flip and turned $1,000 into $2,000 would feel really good about that outcome.  But person #2 who lost the $1,000 would feel absolutely horrible.

Let’s say both participants have a baseline happiness score of 50.  After the win the person who won might gain 25 “happy points” to go from 50 to 75, but the person who lost would have a happiness score drop 50 points from 50 to 0.   

Prospect theory says that the positive emotional benefit the person who has won is much less than the negative emotional drain that the loser of the funds had.  In other words, losing feels way worse than winning feels good. 

Let’s say the odds were changed a bit.  Instead of a coin flip let’s say it’s a dice with 6 sides.  If the dice lands on numbers 1, 2, 3 or 4 you win and if it lands on numbers 5 or 6 you lose.  Would you put $1,000 on the table for those odds?

Intellectually we would say “the odds are dramatically in my favor with me winning 2 out of 3 times” but the emotional part of us likely would caution “you could lose $1,000.”

What if you played the game and the dice landed on #5? You play again and the dice again lands on #5.  You play 3 more times with the dice landing on #6, #5 and #6.  You are now down $5,000.  What do you do?

The wisest financial decision is to keep playing as the odds continue to be in your favor, but it’s going to be increasingly difficult to plop another grand on the table following a string of 5 losses in a row and a wallet with $5,000 less in it. 

That’s prospect theory in action.

I do believe this theory is accurate based on my own experience and observations.  If a client’s investments are up 25% they are pretty happy, but if a client’s investments are down 25% they are massively bummed.  My phone is pretty quiet during periods of time when the market is doing really well … I get a lot more phone calls when the market is down.

Is this logical?  No.  Is it real?  Absolutely.

We are human beings, we are not machines or robots.  We have emotions and feelings and all of that must be factored into how we manage our portfolios and corresponding financial plans.

This seems like an opportune time for me to reinforce that investing is not gambling.  We are investing in real companies that make real products and generate real services for real people and turn a real profit for doing so.  But, the value of those businesses change over time as market forces change.  We as investors should never lose sight of that.  We are not gambling in a game with the favor in our odds, we are investing in companies. 

As the chart below shows, since 1980 (my birth year) the S&P 500 is positive 32 out of 43 years (74.4% of the time) with an average return of 8.7%. How painful was 2022 in comparison to how good 2019, 2020 & 2021 were?  My guess is you felt a whole lot more anxiety about 2022 than you felt joy in 2019-2021.  That’s prospect theory. 

Being aware of our natural emotional response to losses and keeping our emotions in check is a critical component of successful investing. 

One of my primary job functions as your financial advisor is to help you avoid making critical mistakes during emotionally challenging seasons.  In other words, I hope to help you navigate the negative emotions that prospect theory states you are most likely experiencing during temporary market downturns. 

I plan on discussing this specific chart in a little further next week as there are some fascinating observations to be made. 

In the meantime, hope it is a wonderful, productive week ahead! 

Good morning, happy Monday, and welcome to May!

“If prayer depends on how I pray, I’m sunk.  But if the power of prayer depends on the One who hears the prayer, and if the One who hears the prayer is my Daddy, then I have hope.”

– Max Lucado, author

Every Monday morning my team and I gather for a weekly team meeting.  We discuss everything from pending cases to market trends to action items.  This is our opportunity to make sure we are all on the same page as a team and are communicating well with each other.  This is also where I get my weekly to-do list 😊.

The first thing we do in each team meeting is pray.  We pray for God’s wisdom in leading our clients and we pray for any specific needs we know of amongst our clients.

This year I made the commitment to pray individually for each of my precious clients.  If you are an Intentional Wealth client and are directly receiving this email, I have prayed specifically for you in my personal daily devotional time this year.

I’m constantly seeking God’s guidance on how I can use Intentional Wealth as a tool to serve His purposes.  I have recently felt God’s prompting to be more diligent and intentional about praying for specific needs of the clients that I have the privilege of serving. 

If you have any specific ways that my team and I can pray for you, please let us know (simply reply to this email).  We commit to praying for each and every prayer request during our weekly team meeting on Monday mornings.

This is an open invitation, so as life happens, please do not hesitate to reach out us and let us know how we can be praying specifically for you. 

You are a blessing in my life, and I am so humbled, honored, and grateful to be alongside you in life’s journey. 

Make it a wonderful week ahead!

Good morning & happy Monday!

“The nation ought to have a tax system which looks like someone designed it on purpose.”

– William E Simon, 1927-2000, former US Secretary of the Treasury

Unfortunately, I’m afraid our tax system oftentimes does not seem to be designed on purpose.  But today I would like to discuss one of the tax provisions that was designed with purpose and can make a meaningful difference in your savings strategy: tax-deductible / tax-deferred accounts and tax-free accounts.

Tax-deductible / tax-deferred accounts include traditional IRAs, traditional 401(k), and traditional 403(b) accounts.  These types of accounts you can deduct the contributions on your taxes and the growth is tax-deferred.  Upon withdraw the entire amount of the withdraw is fully taxable at regular income tax brackets.

Tax-free vehicles will be anything with the word Roth in it (Roth IRA, Roth 401(k), Roth 403(b), etc.).  These accounts do not provide any tax deduction upon contribution, but all the growth is tax-free upon distribution.

These are overly simplistic definitions and there are many caveats that I will skip so as to not get too caught up in the weeds.  As always, please feel free to reach out with any questions.

As is the case with many financial concepts, I think examples might be the best way to illustrate the difference between these different ways to save / invest.

Let’s say these are the base facts of this hypothetical:

• I am 40 years old
• I make $100,000/year
• I save $5,000/year for 25 years (age 40-65) into an IRA (either traditional IRA or Roth IRA)
• My compound rate of return is 7% (just math, no product recommendation here). 

After 25 years I have $326,837 ($125,000 of contributions and $201,837 of growth).  That is going to be the same under either tax-deductible / tax-deferred or tax-free (Roth).  What is different is the tax treatment.

Traditional IRA

My contributions are tax-deductible each year I make the contribution.  So, in this example my taxable income goes from $100,000 to $95,000 ($5,000 less because of my traditional IRA contribution).  This saves me taxes each year I make a contribution.  Yeah!  Less taxes!

But … there is a price to pay …

Upon distribution of my account, $326,837 at age 65 in this example, 100% of those funds are taxed at my regular tax bracket.  What will my tax bracket be in 25 years when I go to take the funds out?  Who knows?  (The current tax brackets are set to expire in 2025)

If I’m in a high tax bracket in my working years, say 32%, and a low tax bracket in retirement (age 65 in this example), say 12%, then this was a good deal for me because I was able to deduct income at 32% and then pay taxes at 12%.  But, I am paying taxes on a bigger pot of money.  I deducted from my income $125,000 ($5,000/year for 25 years), but I now must pay taxes on $326,837 which is the contributions plus all the growth.  Even if I am in a lower tax bracket in retirement this may not be the best option, it depends on a lot of different factors. 

Taxes will need to be paid on every penny in the traditional IRA … even if I die my beneficiaries will need to pay taxes on all of those funds.

Roth IRA

No immediate tax benefit.  I made $100,00, put $5,000 into a Roth IRA, my taxable income is still $100,000.  Lame! 

But … now comes the benefit …

That $326,837 Roth IRA balance at age 65 … 100% of that is mine … the IRS get zero, zip, zilch, nada!  So, I paid the price early on by not writing any of my contributions off on my taxes, but now I get the benefit of not having to split my IRA proceeds with the IRS.

Upon my death the Roth IRA funds are also tax-free to my beneficiaries too.

I always like to summarize the difference between traditional IRAs and Roth IRAs by asking: Would you rather tax the harvest (traditional IRA) or would you rather tax the seed (Roth IRA)?

I do have a personal bias: I love Roth accounts, but that is not always the best solution.

As is true for each of our precious clients, we evaluate these decisions on an individual basis factoring in objectives, income, assets, projected retirement income, projected growth rate, age, legacy desires, risk profile and other factors before determining the specific recommendation on the traditional IRA vs. Roth IRA.

I hope this helicopter view was helpful, please let me know if you would like further information or any other way my team and I can support you on your journey.

Have a wonderful week ahead!

Good morning & happy Monday!

“In this world, nothing is certain except death and taxes.”

– Benjamin Franklin, 1789

Well, tax day is upon us!  I know you’re excited!😉

I thought today might be an opportune time to discuss how the tax system in the United States works.  I can sense your excitement with this topic. (I think I just lost half my audience😉).

Just so we are clear, I am not a CPA and none of this discussion is to be considered tax advice.  Full disclosure: I will always recommend seeking a tax professional for tax-related matters.

In the U.S. we have what is called a progressive tax code.  The more income you make the higher the rate of taxes on the higher dollars.  The first dollars you make are taxed at a lower rate, the later dollars you make are likely taxed at a higher rate.  The examples below will explain this further.

Please see the attached guide for a comprehensive, in-depth look at some major tax issues.  I reference this guide many times a week, hopefully you find it a valuable resource as well.

Taxes are determined based on marital status: you either filed a joint tax return with your spouse or a single tax return (married people can file as 2 single people, but usually that is not beneficial).

Single tax filers for 2023:

Standard deduction = $13,850

$0-$11,000 taxable income = 10% tax rate

$11,000 – $44,725 taxable income = 12% tax rate

$44,725 – $95,375 taxable income = 22% tax rate

$95,375 – $182,100 taxable income = 24% tax rate

$182,100 – $231,250 taxable income = 32% tax rate

$231,250 – $578,125 taxable income = 35% tax rate

Over $578,125 taxable income = 37% tax rate

Joint tax filers for 2023:

Standard deduction = $27,700

$0-$22,000 taxable income = 10% tax rate

$22,000 – $89,450 taxable income = 12% tax rate

$89,450 – $190,750 taxable income = 22% tax rate

$190,750 – $364,200 taxable income = 24% tax rate

$364,200 – $462,500 taxable income = 32% tax rate

$462,500 – $693,750 taxable income = 35% tax rate

Over $693,750 taxable income = 37% tax rate

Let’s take a look at a couple of examples of how this works to hopefully make sense out of all of this.

Let’s say a single person makes $100,000/year in income, here is how that is calculated:

The first $13,850 made is completely not taxable as that is the standard deduction.   So we take $100,000 – $13,850 to get $86,150 of taxable income.

Then the next $11,000 is taxed at 10%.

Taxable income from $11,000 – $44,725 is taxed at 12%.

And then income from $44,725 – $95,375 is taxed at 22%.

In this example the individual had

• $13,850 taxed @ 0% (standard deduction) = $0 tax on those earnings
• $11,000 taxed @ 10% = $1,100 in tax on those earnings
• $33,750 ($44,725 – $11,000) taxed @ 12% = $4,050 in tax on those earnings
• This leaves $41,425 remaining to be taxed ($86,150 of taxable income – $44,725 top dollars in last tax bracket), that will be taxed @ 22% = $9,113.50 in tax on those earnings
• Total taxes = $14,263.50 ($1,100 + $4,050 + $9,113.50)
• This means that even though this individual tops out in the 22% tax bracket, their cumulative tax rate is 14.26% ($14,263.50 divided by $100,000).

Confusing?  You bet.  It’s the IRS way. 😉

Believe it or not we are only scratching the surface as there are all sorts of other components that come into play (child tax credit, long term capital gains treatment, Social Security taxation, self-employment taxes, alternative minimum tax, itemized deductions, above the line deductions, and various tax credits just to name a few).  But I wanted to explain the basics here.

Let’s look at one more example just to drive the point home.

This time the scenario is a married couple filing a joint tax return with $100,000 of household income.  (Same income as above, but now it’s a married couple as opposed to a single tax filer.)

The first $27,700 made is completely not taxable as that is the standard deduction.   So, we take $100,000 – $27,700 to get $72,300 of taxable income.

Then the next $22,000 is taxed at 10%.

Taxable income from $22,000 – $89,450 is taxed at 12%.

In this example the couple had …

• $27,700 taxed @ 0% (standard deduction) = $0 tax on those earnings
• $22,000 taxed @ 10% = $2,200 in tax on those earnings
• Leaving $50,300 ($72,300 – $22,000) taxed @ 12% = $6,036 in tax on those earnings
• Total taxes = $8,236 ($2,200 + $6,036)
• This means that the couple’s cumulative tax rate is 8.24% ($8,236 divided by $100,000) even though they capped out at the 12% tax rate.

Does your head hurt yet? 😉

I know this is confusing stuff, but hopefully this conversation is helpful in understanding how taxes are calculated. 

Please feel free to reach out if I can provide any clarification … or if you need an aspirin after reading this 😉 

Make it a great week ahead! 

Good morning, happy Monday … I hope you had a wonderful Easter! 

“All intelligent investing is value investing.  Acquiring more than you are paying for.  You must value the business in order to value the stock.”

Charles Munger, vice-chairman of Berkshire Hathaway (Warren Buffett describes Munger as his closest partner and right-hand man)

I came across a 3 ½ minute video from Eventide, one of our mutual fund partners, that I thought was just fantastic.  Please take a few minutes to watch it here:

I think so many great points were brought up in this video … sounds like they’ve been reading my Monday morning memos, LOL 😉

I always encourage all of us to stay focused on …

• What we are actually doing when we invest: taking an ownership stake in businesses

and

• What we are seeking to accomplish when we invest: taking money we have today and instead of spending it, choosing to allocate it for a brighter future with the belief that with time, discipline, and patience we will have a greater level of money to spend at that future point  

I believe if we stay focused on these goals and objectives all the doomsday headlines, all the talking-head politicians, all the shrieking financial media personalities (who, by the way, don’t know me or and don’t care about my future) will become background noise. 

I am a goals-driven, patient, discipled investor in some of the greatest companies the world has ever known.  I can think of nowhere else I would rather be. 😊

Thank you for allowing me to be a part of the story you are writing.  Make it a great week ahead! 

Good morning & happy Monday!

“Sometimes you have to do things you don’t want to do.  To get something better, you know?”

– Miranda Kenneally, author

I am part of a men’s Bible study group that meets at 6:15 on Thursday mornings.  I faithfully attend this gathering every week and am honored to be a part of this group.

Here’s the thing, my alarm goes off at 5:15am on Thursday mornings in order to attend this meeting.  That’s nearly an hour before I normally wake up and every single time that Thursday alarm goes off I think to myself “why am I doing this?”  I drag myself out of bed and rush the morning routine in order to be in my car by 5:55am to be on time for breakfast @ 6:15am. 

Even as I am driving to the restaurant I have to kinda’ check my attitude because there is this little voice in my head saying “you should still be sleeping, you know you don’t HAVE to do this.”  My 6:05am alarm goes off, indicating my normal wake up time, just a few minutes before I pull into the restaurant parking lot.  I then walk my tired butt into the restaurant and sit at our normal table to start the dialogue.

As soon as I sit down, I am instantly glad I am there as we jump right into some great conversations and get a delicious breakfast.  These are amazing guys who have become very dear friends.  My price for nurturing these precious relationships is getting up well before the sun gets up on a weekly basis. 

I was recently thinking about this weekly ritual and came to a really important realization: I never want to go, but I am always glad I went.

That got me thinking about investing.  I’ve been in financial services for 25 years and I’ve never heard anyone say:

• “I like lots of volatility in my investments.”
• “The ups and downs of the market are exciting to me, the more the better.”
• “I’m super excited for the next market downturn.”

What I do hear quite frequently is things like:

• “I want to maintain my financial independence and never be a burden to my children.” 
• “It is exceptionally important that I never run out of money in retirement.”
• “I don’t ever want to have to reduce my standard of living due to financial constraints.”

My friends, in order to achieve meaningful financial objectives, oftentimes the price to pay is volatility.  Just like my price to pay for my Thursday mornings breakfast is a super-early alarm, the price to pay in investments is ups and downs and accepting a certain level of uncertainty. 

No one likes uncertainty, but there are significant rewards that we as investors are able to achieve for accepting a certain level of uncertainty as long as we are patient, disciplined, and diversified. 

It is my sincere hope that these weekly reminders will serve to reinforce the message of patience over panic, discipline over despair, and faith over fear in your investment strategy.

Even though investing is not always fun (example 2022), I wholeheartedly believe we will be glad we stayed the course.  Just like I said about my Thursday group: I never want to go, but I am always glad I went.  I hope and believe that we will say about our investment endeavor: I never wanted the rocky part of the journey, but I’m so glad that I took the path.

Please let us know if there is any way we can support you along your journey.

Hope you have a wonderful and blessed Easter and a wonderful week ahead! 😊

Good morning & happy Monday!

“We can do only what we think we can do.  We can be only what we think we can be.  We can have only what we think we can have.  What we do, what we are, what we have, all depend upon what we think.”

– Robert Collier, author (1885-1950)

“Your perspective will either become your prison or your passport.”

– Steven Furtick, pastor

I know I’m getting carried away with 2 quotes this morning 😉.

Last week I concluded my weekly email with a few comments on perspective.  If you will indulge me, I wish to expand upon those thoughts for a few more minutes this morning. 

As you know, I wear glasses.  Without my glasses I can see shapes and main objects, but absolutely no detail.  As an example, without my glasses I could see a red octagon and know that it is a stop sign, but I would have to be fairly close to see the word “STOP” printed on the sign.  (Scary, I know!) 

My glasses change my perspective and that changes everything.  Without my glasses my world would look dramatically different (for the worse!). 

What is our perspective in life? 

I greatly enjoy sports, particularly football and hockey.  When I play a game on my iPad (which is fairly rare) I like timed, speed games.

My wife on the other hand would way rather watch a Hallmark movie and play a game where she can take her time with a methodical strategy. 

When I am watching football or hockey and yelling around the house my wife says that is way too stressful and leaves the room.  Alternatively, when she turns on a Hallmark movie, I have a hard time staying awake for more than 10 minutes. 

The same activity has completely polar opposite reactions for each of us because of our perspective. 

When it comes to money and investments, what is our perspective?

Do I see money as a tool to accomplish meaningful life goals?  Is money a measurement of success in life … if I have it I’m successful, if I don’t I’m not?  Is money a god that I worship?  Is money a necessary evil that is required to survive in our culture?

What about when the market is fluctuating? 

One perspective: Of course, the value of businesses change as changes occur in the economy.  Over time history has given me no choice but to believe that this diversified portfolio will perform well and give me the best chance possible of achieving my financial goals.  So, no matter what happens in the short-run I will stay focused on my goals.  No stress here.

Alternative perspective: Oh my gosh!  A bank just failed, inflation is out of control, the national debt is unmanageable, our country is in a dramatic state of decline, the world is in a total and complete state of disaster.  The stock market is going to crash and I’m going to lose all of my money.  I’m completely panicking here!

In many conversations over these last challenging 15 months, I understand most of us are somewhere between these 2 perspectives.  Often times our heads are in that first perspective, but our hearts are in the later one. 

That first perspective is far superior to the later perspective.  Not only is the first perspective more accurate, but it’s also far less stressful 😊  However, I fully understand how hard it can be to maintain perspective, it’s a constant battle (especially if you binge watch news, which I would highly discourage). 

One of my primary objectives as your financial planner is to provide perspective.  Perspective is harder to achieve as stress levels increase … the higher the stress level the harder it is to gain proper perspective (this is also true in non-financial matters). 

My friends, I would encourage you with all that I have to maintain a healthy, accurate perspective.  There are most certainly challenges we are facing, but we live at the absolute pinnacle of human existence with an exceptionally bright future … a future that will result in lots of business profitability … businesses that we have an opportunity to own through stock ownership.  Please do not make the critical mistake of letting short-term headlines distract you from such incredible opportunities. 

We are always here to support you and provide perspective, so please never hesitate to call if a little perspective can provide some much-needed peace of mind.

It is an incredible honor and privilege to serve you.

Make it a great week ahead!

Good morning & happy Monday!

“Most people get interested in stocks when everyone else is.  The time to get interested is when no one else is.  You can’t buy what is popular and do well.”

– Warren Buffett, legendary investor

1,092 days ago was a very important day.  Monday, March 23, 2020 was that date and it occurred 3 years ago this week.  Even though that specific date likely does not stand out to you, you most certainly remember what was going on in the world and your investments … COVID-19 dominated the headlines, destroyed the economy, and devastated our investments.

Well, Monday, March 23, 2020 was the bottom of the COVID-19 market pullback.  Since it was a Monday, guess what I did that day?  You guessed it … I sent out a Monday morning memo 😊  Here is a portion of the email I sent out that day:

It is so incredibly easy to lose perspective during times like these as emotions are running high and toilet paper is running low, so I will respectfully ask for a few moments of your time to share a few thoughts with you this fine Monday morning.

Now, there is not a single statistic that I can share with you that will change the fact that this is an incredibly emotional time and our feelings are telling us “this time is different” and “we may never recover.”   It is only human to have those feelings and all of us are experiencing them.  It is perfectly fine to have the FEELINGS, but the mistake occurs when we ACT on those feelings.  This is so incredibly hard because we have this feeling of needing to “do something” … but in 22 years in this industry it is my observation that that is most often when mistakes are made.   

Over the last few weeks I have had many conversations with clients about HEART-BASED decisions and HEAD-BASED decisions.  The HEART is telling us to bail on our investments and the corresponding plan that was built by them, the HEAD is wisely telling us that market downturns happen and that the plan that was built by them will sustain the current market forces.  May I implore you with everything that I have to listen to the HEAD over your HEART during such times as these.  Stick with the plan. 

As you likely have heard me say before:  Your goals dictate the plan, the plan dictates the investments … Goals → Plan → Investments.  Unless your goals have changed it is my strongest recommendation to not change your investment strategy. 

Stick with the plan.  Stay the course.  Don’t lose hope.  Don’t lose perspective … this too shall pass and we will be better & stronger on the back end. 

My friends, the day I sent that memo, nearly 3 years ago, the S&P 500 closed at 2,237.40. 

Today the S&P 500 is hovering around 4,000.

I am a big Tampa Bay Lightning hockey fan.  In the 2019-2001 season they won the Stanley Cup.  The 2020-2021 season brought another Stanley Cup to the organization … back-to-back Stanley Cup champions!  Absolutely incredible!  Last season (2021-2022) the Lightning made it to their 3^rd Stanley Cup final in a row, only to lose the series to the Colorado Avalanche. 

June 26, 2022 was the date the Avalanche hoisted the Stanley Cup and as a Lightning fan it was a sad day for me.  The following day I was still disappointed and was talking to a fellow Lightning fan and trying to be positive and optimistic I said “If you would have told me 3 years ago that we would go to 3 straight Stanley Cup championships and win 2 of them I would have been ridiculously excited.”  My friend’s response: “Yeah, me too … but I still wanted to win 3 in a row!”

I agree, but you don’t win a championship every year.  Some years have massive disappointments, other years have thrilling victories, and most years have a combination of both.

Sound kinda’ like something else … maybe the stock market? 😉

Right now it’s so easy to get wrapped up in conversations about inflation and Fed policy and the challenging year that 2022 was, but I thought I would take this opportunity to provide just a little perspective on how far we have come. 

If I would have told you 3 years ago that the S&P 500 would be up somewhere north of 75% today, I would imagine you would have gladly said “I’ll take it.”  And yet, I don’t think I’ve had that conversation a single time in the last 12 months. 

Why?  Because our human minds are not wired for perspective, they are wired to think about what is / could go wrong.  Perspective is hard most times in life, and exceptionally hard in times of stress.

Providing perspective is one of my primary jobs as your financial planner.  My hope is that this message will cause us to take a deep breath and look at how far we have come over these last 3 years.  Perspective changes everything … I’ll discuss that more next week.   

As I stated 3 years ago, I will restate here: Stick with the plan.  Stay the course.  Don’t lose hope.  Don’t lose perspective.

It is a tremendous honor to serve you!  Please never hesitate to reach out with any ways my team and I can support you. 

Make it a great week ahead! 

Good morning & happy Monday! 

“The bad news is time flies.  The good news is you’re the pilot.”

Michael Altshuler, author

This morning I would like to provide 2 updates and 1 offer.

Update # 1 – Tax forms are finally available for non-IRA accounts!  Thank you so much for your patience as we were waiting for the real estate fund to provide their final updates.  If you need to access any tax forms online here are the step-by-step instructions on how to do so:

Go to www.IFPartners.netxinvestor.com. Click on “Login”

On the center of the page – select “Communications”.

On the next page on the left hand side under “All Documents”, select “Tax Documents”

If your documents are ready, they will be listed there. You can select the document under the “Type” category and it will generate a PDF that you can print or email. 

If your documents are not ready or you won’t be receiving documents then it will say “There are no records to display”

Feel free to reach out with any questions on this.

Update # 2 – The IRS has increased the funding limits for IRAs and Roth IRAs for 2023.

If you are under 50 years old the maximum contribution is $6,500 per person per year (up from $6,000 per person per year in 2022).  If you are contributing monthly and want to max out the contributions that has gone from $500/month in 2022 to $541.66/month in 2023. 

If you are 50 or older the maximum contribution is $7,500 per person per year (up from $7,000 per person per year in 2022).  If you are contributing monthly and want to max out the contributions that has gone from $583.33/month in 2022 to $625/month in 2023. 

Please reach out to us if you would like to make any adjustments to your IRA contributions. 

Our offer – With spring cleaning season upon us, I would like to extend an offer for you to take advantage of our professional shredding service.  We have a contract with Crown Information Management to shred all of our confidential documents. They come to the office and shred the documents on site (see attached photo of their most recent visit a few weeks ago).

If you are interested in cleaning out your old files and getting those documents shredded please touch base with Carissa at Carissa@intentional-wealth.com / 863-577-3280 and coordinate a time to drop those documents off.

This is an open invitation, so if there is a time down the road when you would like to get some documents shredded feel free to bring them to our office and we will gladly get them shredded for you.

Please never hesitate to reach out if there is anything we can do to support you.  It is an honor to serve you!

Make it a great week ahead! 

Good morning & happy Monday!

“A good portfolio is more than a long list of good stocks, and bonds.  It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies.”

– Harry Markowitz, American economist

I have addressed investment diversification in the past, but it is such a critical component of our investment strategy I would like to discuss it again here … but this time I think a story might be an effective way of sharing it.

Super quick review: diversification means investing across a broad range of investments.  In our portfolios at Intentional Wealth that means using a combination of stocks and bonds, domestic and international stocks, growth and value stocks, long-term and short-term bonds, just to name a few. 

Diversification is the concept of not having all your eggs in one basket.

My dad is a pastor and growing up we lived in a church parsonage, in our case it was a home that was attached to the church facility.  This meant that my back yard was the entire church 2-acer property in Auburndale.  This much outside play area provided for all sorts of fun opportunities as a kid (way more fun than iPads and video games if you ask me, but I digress).

I’m about 10 years old and I get a boomerang as a gift one year.  I was super excited to test it out and with such a big yard and I ran outside and threw it with all my might.  It flew out of my hand and landed maybe 20 yards away, petty much in a straight line from where I threw it.  Obviously, I was expecting it to boomerang back to me. Undeterred, I threw it again, same result.  Again, again, again I threw this boomerang and not a single time was there even a hint of movement that it was curving back towards me. 

I was at max frustration and came to the conclusion that I was not throwing it hard enough.  So, from the back yard I threw the boomerang with everything I had in the general direction of our house.  Well, needless to say, it still did not return, but this time the boomerang landed on the roof of our home. 

My problem was I was throwing the boomerang backhanded, like a frisbee, not understanding that a boomerang it to be thrown over-handed.  I could keep throwing that boomerang hundreds of times, but throwing it backhanded would continue to have the same result.

Well, with the boomerang on the roof, my 10-year-old mind decided I needed to climb to the top of the roof to get it off (I’m not claiming this was a wise decision).  So, I find a way to climb up the roof and grab the boomerang and in frustration I throw it aggressively off the roof.  But … this time in my frustration I threw it over-handed and yelled something like “stupid boomerang.”

Ladies and gentlemen, something amazing happened after I threw that boomerang from the roof over-handed … it started coming back towards me.  For a split second I was thrilled … I finally learned the secret to getting this boomerang to fly back to me!  But my excitement quickly waned as I saw the boomerang was going to hit the side of the house.  Well, not only did it hit the side of the house, it flew right through the bathroom window, breaking it with a loud crash.

Within moments my mother, who knew I was outside playing with the boomerang, runs out of the house calling my name.  Imagine her surprise when my response comes from the sky.  She looks up and sees me on the roof and a broken bathroom window.  Needless to say, I had some explaining to do 😉 … and a window to buy from my allowance money!!!

That was maybe my first lesson in diversification.  When that boomerang went through that window I had to purchase an entire new window.  If there had been multiple window panes, that break would have only broken one of the window panes and the economic pain to me would have been much smaller as I would have only had to replace one of the window panes, not the entire window.

In investing, there are going to be boomerangs that hit investors.  It may be war, inflation, economic conditions, politics, companies, industries, circumstances, natural disasters, etc. but diversification is one of the exceptionally important tools we deploy to weather those storms.  We have multiple window panes in our investing strategy. 

Nick Murray, an advisor of over 50 years, and author of multiple books has stated “Disciplined diversification is the incredibly courageous decision to forego any chance of making a killing, in exchange, for the life-saving blessing of never getting killed.” 

I wholeheartedly agree with that thought process and that why we deploy a vigorous diversification strategy at Intentional Wealth. 

There are no facts about the future, so diversification provides us with the framework to pursue growth in a structured, balanced way. 

As always, we are glad to dive deeper into our selection process and through process around our investment strategies … just say the word 😊

Hope it’s a wonderful week ahead!