Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, the Financial Symmetry advisors unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Jul 12, 2021

With the turbocharged real estate market, buying a house is not as easy as it once was. We’ve all heard stories of houses getting multiple offers even before they are listed or homes selling well over the asking price. Stories like these have many people thinking about moving. 

Short Video recap:

On this episode of Financial Symmetry, we explore whether or not it is worth the effort to buy a home in a seller’s housing market. You’ll learn the reasons why the housing market is so hot, questions to ask yourself, and alternatives to buying a home. 

Why is the housing market so hot?

If you have talked to your neighbors or seen the news lately, you know how hot the housing market is. Everyone has heard stories about bidding wars and people receiving multiple offers on homes. It is definitely a seller's market, but why? 

There are several reasons that home sales are through the roof. As with any economic force, when demand outstrips supply, then the market becomes one-sided. Since people have been spending more time at home and even working from home, they have had an opportunity to evaluate the pros and cons of their place of residence. Couple this with an influx of cash from higher incomes and injections of cash into the economy, and many people are ready for a change of scenery. 

Steps you should take before you consider a move

But just because the Jones’s are packing up and moving, does that mean that you should too? Before you think of selling your home you should stop and consider a few questions. Since this is such a big financial decision you can take advantage of financial planning to help you analyze this choice. 

After you figure out why you want to move, you need to consider what steps you need to take to prepare. Buying a home is not as easy as it once was, so you’ll need to make sure that you have a preapproval letter in hand before looking at any houses. It’s also important to realize that in a hot housing market, contingency offers are off the table. You won’t be able to compete with cash offers if you are trying to buy a home based on the sale of your own home. So if you must sell your current house to come up with a down payment, then you may need to rent for a while after the sale of your home. 

Know how much you can afford

Your housing costs should be between 28%-36% of your monthly income. Many people know this but they only figure in the mortgage without figuring in the other expenses that come with moving to a new home. It is important to watch out for the lifestyle creep that often comes with moving. You don’t want to end up being house rich and cash poor.

One way to ensure that you don’t get roped into spending too much is by coming up with a maximum number that you can afford and telling the realtor a number that is 20%-30% less. Don’t rely on the bank to decide how much you can afford since they will be happy to lend you more.

Where will your down payment come from?

The next consideration is where will you get your down payment? There are 4 primary ways to come up with a down payment. Many people rely on the sale of their home for a down payment. Others have cash set aside in savings.

Another consideration is to use a 60 day IRA rollover. This will allow you to avoid the taxes that come from withdrawing from your IRA if you repay the money in 60 days. Oftentimes, this allows you to close on the home you are selling and replace the money in the account. However, this could backfire if the sale of your home falls through or gets delayed.

The last way to fund a down payment is to take out a HELOC on your existing home. It is important to do this before you put your home on the market. Listen in to hear some alternatives to buying a new home that you should consider before taking the leap and moving. 

Outline of This Episode

  • [1:07] Reasons why the housing market is so hot
  • [3:10] What considerations should you be thinking about?
  • [11:34] Where will your down payment come from?
  • [15:33] What are some alternatives to moving
  • [17:10] Today’s progress principle

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

Jun 28, 2021

Are you a super saver? If so, you may feel like you are doing a lot of the right things to save for retirement, but you are not sure where to go next.

Check out our Youtube channel for a short video recap:

In this episode of Financial Symmetry, we explore the different ways to save for retirement outside of your 401K. You’ll learn what each type of account is used for, how you should save in each one, when is the best time to save, and how to withdraw. Let’s explore the various ways that you can save for retirement. 

Retirement investment vehicles

If you have been maxing out your 401K, you are ready to move onto the next step in retirement savings, but with so many different types of accounts to choose from, it can be hard to know which one to choose. All you have to do is learn about them to choose from the different investment vehicles. To make the various types of accounts more memorable, we are equating these investment vehicles to actual vehicles. Listen in to hear how to use the right set of wheels to drive you to retirement. 

The health savings account 

The health savings account can be compared to a Jeep Wrangler. Like the Jeep Wrangler, the health savings account has a specific purpose, but it also has added benefits. The purpose of a health savings account is to be used for medical expenses, however, it also has a triple tax advantage. You must be enrolled in a high deductible health insurance plan to qualify for a health savings account, but if you can use one, this is a fantastic way to save and invest for future healthcare expenses. 

The backdoor Roth 

The backdoor Roth is the Rolls Royce of retirement savings. Like the Rolls Royce, the backdoor Roth is unique and specifically designed for high-income earners. A regular Roth IRA maxes out at $6000 per year. With the Roth and the backdoor Roth, you will save so much in taxes that it will offset any fees that you incur. 

The mega backdoor Roth

The mega backdoor Roth can be compared to the Koenigsegg Gemera. Similar to the Koenigsegg Gemera, you may not have heard of the mega backdoor Roth. You’ll need to buckle up to drive both of these vehicles because the mega backdoor Roth will turbocharge your retirement savings. The mega backdoor Roth allows you to contribute an extra $35,000 in a Roth. You won’t see any tax savings upfront, but you will see it in retirement since this is a tax-deferred account. This account will provide a huge impact on your long-term saving for retirement. If you want to take your savings to the next level, check out the mega backdoor Roth.

The brokerage account

Many people don’t even consider this account a retirement savings account, but like the trusty Honda Accord, a common brokerage account can be just as dependable. You can use a brokerage account like a super-charged savings account. Yes, there are more tax-efficient accounts, but the benefit of a brokerage account is that there are no restrictions which gives you more flexibility. If you feel restricted by the other retirement accounts, you may want to consider saving for retirement in a brokerage account. 

You won’t want to miss our last comparison, the DeLorean. Listen in to hear which type of account we compared to this unique car.

Which investment vehicle sounds right for you? 

Outline of This Episode

  • [2:13] The health savings account
  • [5:22] Backdoor Roth
  • [9:05] Mega backdoor Roth
  • [13:45] Brokerage account
  • [17:27] The 529 account
  • [20:08] The progress principle

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

Jun 14, 2021

Recent headlines have people thinking more about investing for inflation.

Video Recap:

It's the most recent economic worry, but there's always something to scare or concern investors. Think about the last 16 months. We've had:

  • COVID Crash
  • 2020 Election
  • Reddit/Robinhood/Gamestop
  • Crypto Volatility

Now it's inflation. But it's a good reminder that listening to the media can be expensive.

In this week's episode, we are breaking down how to think about and prepare for inflation as it relates to your investment strategy.

How to Think about Inflationary Scenarios

What is inflation?

Increases in prices over time. For example, a gallon of milk cost ~$0.26 in 1926 and has increased to ~$3.00 today. Since 1926, inflation has averaged ~3% per year.

On the other hand, deflation is when prices decline over time. These periods are generally driven by economic downturns such as the depression in the late 1920’s/early 1930’s or a brief period during the financial crisis. While the media can make the threat of inflation sound scary, it is a normal part of time passing.

Hyperinflation, however, can be very damaging. While regular inflation has averaged ~3%/yr, hyperinflation is when prices spike very quickly and at much higher rates. For example, Germany in the early 1920’s and more recently, cases in Venezuela and Zimbabwe.

Hyperinflation it typically driven by two primary causes: Government debt in another currency (Germany after WW1) and supply chain shocks (no access to necessary products).

We are not concerned about hyperinflation today.

Current Situation

The last twelve months ending April 30th, 2021 saw an annualized inflation rate of 4.2% after averaging 1-2% over the last 10 years. This is the largest jump in inflation since September 2008.

It is important to keep in mind, however, that these numbers were coming off March/April 2020 lows where inflation declined due to lack of demand for products and services – driven by the COVID crisis.

The big question most are asking: Are these permanent or transitory increases?

Transitory increases are those that are shorter-term or temporary. These have been driven by stimulus checks and government support from the $1.9 trillion American Rescue Plan passed in March 2021.

Permanent increases on the other hand are those in which prices are expected to increase materially year over year. Today, this can be seen somewhat in the Real estate markets.

It is too early to tell which route it will take, but keep in mind that the Federal Reserve wants some inflation as that is their mandate and is healthy for the market. If inflation begins to rise too quickly, they can always raise interest rates to slow down the economy.

What should you do about it?

Inflation is good for stocks and real estate over the long-term. Companies can raise prices leading to higher gross sales and companies have claims on their real assets (buildings, plant, land, equipment, etc.).

Since 1926, US Large/Small cap stock returns have outpaced inflation by ~7% and 9%, respectively. During that same time period, cash and bonds have barely exceeded inflation.

While cash can feel like a safer option in the short-term, over long periods of time, you can lose purchasing power. For example, if inflation averages 3%/yr while your cash holdings earn 1% or bonds earn 2%, you are losing purchasing power.

Although we can speculate, we don’t know whether we’ll have material or stable inflation over the next decade. Rather than being driven to change strategies based on short term media noise, we recommend sticking to your investment plan and maintain a diversified portfolio constructed based on your capacity and tolerance for risk.

Additional Resources

May 31, 2021

You may have heard a lot on the news about President Biden’s tax plan. Are you worried about how it will affect you and your tax situation? In this episode of Financial Symmetry, Grayson Blazek helps to demystify Biden’s tax proposal. You’ll learn how you may be affected and whether or not you should be worried. Don’t wait until April 15 to start your tax planning! Press play to learn what you can expect next year. 

Short Video Recap:

When does the new tax law take effect?

Even though you may have heard plenty about Biden’s tax plan, it still isn’t the law--yet. As of May 2021, there has been no bill signed. This much-discussed tax plan still needs to make its way through Congress. There may be changes that take place in the way the plan is structured as part of the negotiation process. Although it hasn’t passed yet, it is still a good idea to learn as much as you can about the proposed tax law so that you can get a jump start on your future tax planning. 

Who benefits from the proposed tax law?

If your annual income level is at or below $400,000 there are many tax planning opportunities that come with the proposed tax law. The most notable change to the current tax plan is in the child tax credit. This tax credit will rise from $2000 per child to $3000. Additionally, for children under the age of 5, the child tax credit will be even higher--$3600. You may even see your tax credit hit your account early starting in July of 2021. Learn what you should be watching out for as Grayson Blazek explains how the new child tax credit will work. 

How will this tax plan affect your retirement accounts?

The proposed tax law could turn retirement planning on its head. Many people use a 401K as their preferred retirement savings vehicle, but with the new proposal, the tax benefits of the 401K may no longer be as attractive for high-income earners. The Roth IRA could become the preferred avenue. When the new tax plan takes effect you may want to change your retirement contribution strategy. Press play to learn why.

Don’t let the tax tail wag the dog!

Even though it is important to plan ahead when it comes to taxes, you don’t want the tax tail to wag the dog. This means that you don’t want your tax planning to decide everything about your financial planning. Taxes are a big part of financial planning, but it is also important to note that they are simply an inevitable side effect of making money. Now that you know a bit more about the future of tax laws you can begin to think forward to next year and beyond to structure any big liquidation events and consider where you stand financially. Download the Biden Tax Plan Decision Tree at

Outline of This Episode

  • [2:33] Don’t be in a rush to make any changes to your tax planning--yet
  • [7:34] Some benefits of the new tax laws
  • [12:35] What to look out for if you make between $400,000-$1M
  • [17:45] Retirement account tax planning could change completely
  • [23:48] Estate planning considerations
  • [28:08] Today’s progress principle

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

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May 17, 2021

A recent survey discovered that millions of Americans 55 or older are in a rush to retire.  The pandemic has many contemplating retiring years earlier than originally imagined after adopting a "life is short" mentality.

Video recap:

But before you rush into a decision to retire early you’ll want to consider it carefully. We've listed 6 steps below to analyze if you are ready to retire.

Why retire early?

Since the pandemic has made us all consider how we are spending our time, people have become more and more frustrated with their daily grind. Many people would like to spend more time with their families or pursuing hobbies that they enjoy. 

However, if you are in a position to retire early it is important to think about why you really want to retire beyond the initial urge to leave the work world behind. It is important to consider how you will spend your days. Think about your purpose so that you are retiring to something, rather than simply running away from the 9-5. Have a plan, not just a portfolio.

Use the acronym RETIRE to consider early retirement

Grayson Blazek and I have come up with 6 strategies to consider when thinking about early retirement. We’re using the word RETIRE as an acronym to help keep it easy to remember.

  • Risk - Have you considered the sequence of return risks? You may have good returns now but a bear market could ruin that. You don’t want to have to sell low, so make sure your portfolio is allocated with risk in mind. If you want to retire early, you’ll need to have the upcoming 5-7 years of spending available to avoid the risk of having to sell a position when you aren’t ready to. Everyone has their own risk tolerance, so carefully consider yours. In addition to the sequence of return risk, you’ll also need to think about inflation risk. 
  • Early retirement account withdrawals - If you are retiring early you won’t want to pull from accounts where there might be a penalty. This means that you’ll have to consider which accounts your income will come from. Be sure to have a diversified mix of accounts to pull from. Give yourself flexibility and make sure you have access to your wealth outside of retirement plans. Have different buckets ready and understand all the tools that you have available.
  • Taxes - Take advantage of strategic tax moves. Use Roth conversions to take money from pre-tax accounts and convert it to a Roth IRA. You can take advantage of lower tax rates to fill your buckets with tax-deferred funds. In retirement, you'll want to think about your lifetime tax rate rather than your yearly tax bill.
  • Insurance game plan - One of the biggest issues for early retirees is where to get insurance. You’ll need to carefully plan how you will source insurance and how much it will cost. Most early retirees consider 3 choices: COBRA, a spousal healthcare plan, or the Affordable Care Act. You’ll want to ensure that you understand the expenses involved with each of these choices.
  • Regular reviews - How will you know if you are on the right track? Have a plan to monitor your situation periodically. Ask yourself these questions: Have your goals changed? Do you want to pivot? Has your financial situation changed? 
  • Estate loose ends - Nobody likes thinking about end-of-life decisions, but having your estate documents in place will give you peace of mind. Consider the 3 most important ones: a will, a healthcare power of attorney, and financial power of attorney. 

Download the Pre-Retirement Checklist

The question of whether to retire early is one that should not be taken lightly. You can use these 6 considerations to help you contemplate your retirement readiness, in addition, you can also download our Pre-Retirement Checklist to ensure that you are making the right decision for you and your family.

Outline of This Episode

  • [1:46] Questions people have about retiring early
  • [3:48] R is for risk
  • [8:42] E is for early retirement account withdrawals
  • [13:06] T is for taxes
  • [17:52] I is for insurance
  • [20:56] R is for regular reviews
  • [23:02] E is for estate loose ends
  • [25:42] The progress principle

Resources & People Mentioned

Connect With Chad and Mike


May 3, 2021

Have you ever been on your way to an epic summer road trip and then all of a sudden you come upon a roadblock? That can ruin the excitement you feel for the upcoming trip. This can happen in retirement as well. In retirement, you may confront roadblocks on your journey and if you don’t know how to maneuver around them it can leave you feeling stuck. 

On this episode of Financial Symmetry, Allison Berger joins me to discuss 3 not so obvious retirement roadblocks that you may encounter along your retirement journey. We want to be your GPS so that if you experience them you can find your way around them without too much hassle. 

Sequence of return risk 

Your first years of retirement are so important when it comes to investment returns. Sequence of return risk is when you have several years of bad returns at the beginning of retirement when you are starting to withdraw your money. There is no way to control your market returns, but there are ways to mitigate this risk. 

To combat sequence of return risk, you’ll need to maintain a balanced portfolio the way you maintain a balanced diet. Use the financial food groups! In retirement, you can no longer subsist solely on financial junk food (stocks). You’ll want to make sure that you have a healthy serving of vegetables (bonds and cash) thrown into the mix. 

After maintaining a growth mindset in the accumulation stage of life by using mainly stocks, you may be hesitant to reduce your risk load in retirement. However, having a balanced portfolio can ensure that you won’t be forced to sell when prices are down. 


You want to ensure that your money will be worth something in retirement, but inflation reduces purchasing power over time. We can visualize how inflation works by thinking about what the price of milk was 20 years ago. Inflation not only impacts the prices of goods but also impacts your retirement income. Even with the cost of living adjustments, your Social Security may not have the same buying power in 20 years. 

Inflation is also known as the silent assassin. It is most dangerous for those who are overly cautious. To fight inflation you’ll need to make sure that there is some growth in your portfolio. You’ll need to take on some risk. 

Unforeseen tax bombs 

It is important to understand how different events can impact your taxes. The best way to combat unforeseen tax bombs is through multi-year tax planning. Most people are used to tax planning one year at a time, but retirement offers an opportunity to plan ahead. You can reduce your lifetime tax burden by thoughtful planning.

Create your retirement road map

If you put together a financial plan for retirement you’ll have a road map for the years ahead. In retirement, you’ll want to become flexible and look for opportunities. This is part of what we do with our clients. If you are interested in using us as your GPS to help you through those retirement roadblocks then check out our website and click Learn More.

Outline of This Episode

  • [3:07] Sequence of return risk can ruin your retirement
  • [9:45] Inflation is the silent killer of retirements
  • [14:14] Unforeseen tax bombs can derail your tax strategy
  • [20:47] Today’s progress principle

Resources & People Mentioned

  • Episode 89 - Sequence of Return Risk
  • Kitces article

Connect With Chad and Mike

Subscribe To This Podcast

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Apr 19, 2021

What are you investing for? Many say higher or better returns--but higher or better than what? What do those higher returns make possible for you? 

Video recap:

To have a successful investment experience you need to have a plan in place. Mike Eklund joins me once again on this episode of Financial Symmetry to discuss our 3 step investing process. This process creates the guideposts for all Financial Symmetry clients. Listen in to learn why failing to plan means you are planning to fail. 

Why do you need a plan?

Have you ever thought about why you are investing in the first place? Before creating your investment plan you’ll want to set your goals. This way you can understand what kind of returns you need in order to achieve your goals. 

We are all often guilty of the lottery mindset--that mindset that thinks if we could choose that one next big thing then we would be set. All we needed to do was buy Apple in 2000, or Tesla in 2012, or Bitcoin at $1000. But the reality is, successful investing requires a plan. Your investment plan can help you understand when to buy and sell or increase or reduce risk in your portfolio. 

Our 3 step process

At Financial Symmetry, we use a 3 step process to help our clients achieve their financial goals.

  1. Determine when you need the money. Will you need it sooner or later? When you need the money determines the amount of risk you can take. The longer you own stock the more the risk diminishes, so as investors, we are short-term pessimists and long-term optimists. 
  2. Have a plan in place. Having a plan means that you won’t have to react to market events. This is why the rules-based process is so important. Think about what you can control and implement the plan by using low-cost, high-quality investments. Whether you use index funds or active funds doesn't matter as much as how you plan. 
  3. Monitor your investment plan so that you can stay invested. Take advantage of opportunistic rebalancing and buy and sell based on your target percentage. Many people leave out this step but it is just as important as the other two steps. 

5 things you can expect as a Financial Symmetry client

You may be wondering what we at Financial Symmetry offer to our clients. Our clients can expect these 5 things from us.

  1. Our focus is to help you achieve your goals. We focus on long-term success over short-term results. 
  2. Clients can review their investments on a daily basis in the Client Center. 
  3. We know that communication is important, so we make sure to answer your questions. We understand that it's your money we are working with.
  4. We provide years of experience and do extensive research on all our investments. 
  5. We all invest in the same way as our clients.

We can help you reach your goals

What is your investment plan? Do you have a rules-based process? Investing is a lot like fitness. Everyone wants to start, but it can be hard to keep up. We can be your financial personal trainer and help you stay on track to reach your goals.

We can make investing easier for you. If you don’t have the knowledge, experience, and interest to do this all on your own we can help.

Outline of This Episode

  • Why are you investing in the first place? [3:40]
  • We follow a rules-based process [6:02]
  • Monitor your investment plan [15:32]
  • 5 things to expect as a Financial Symmetry client [18:21]
  • The progress principle [23:25]

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

Apr 5, 2021

Have you been on the fence about hiring a financial advisor? This indecisiveness can cost you. This episode will help you decide whether hiring a financial advisor is right for you. You’ll learn the 5 C’s that you can expect when hiring a financial advisor. Press play to find out what you should expect from your financial advisor.

Video Recap:

4 reasons you may be looking for a financial advisor

Have you been considering hiring a financial advisor? If so, then you may be seeking assistance in one of several areas. 

Competence - You are looking for someone who knows more than you and is an expert in their field.

Coaching - You may know quite a bit, but knowing and doing are 2 different things. A financial advisor can be like a personal trainer and give you the push you need to get things done. 

Convenience -A financial advisor can do what you don’t have time for. 

Continuity - You may want someone to help you coordinate with others for family or legacy planning. 

Do any of these reasons seem familiar to you? Keep listening to hear what a financial planner can do to help you.

What to expect from a financial advisor

Collaboration - Your financial advisor will co-create a plan that serves you and helps you reach your financial goals. This should be a collaborative process between the two of you. In your first meeting, you can expect to be asked a lot of questions so that they can learn about you and your goals. You want your financial advisor to lead with a planning focused approach. If you receive a sales pitch instead, this should raise a red flag.

Credentials - Many people are surprised to learn that you don’t have to have any qualifications to be a financial advisor. However, you may see a bit of an alphabet soup after a financial advisor’s name. It is important to understand what these letters mean. Are they real credentials or simply sales designations? Look for the gold standard CFP certification. CFA and CPA are two other certifications that may be relevant to your situation.

Communication - You can expect regular communication from your financial advisor. They may set up a communication calendar with you to help you set expectations in communication. This regular communication will help you stay updated. Your advisor may also reach out to discuss tax opportunities, set goals, and to review progress. Listen in to hear what red flags you should look out for in your advisor communications.

Compounding value - Are you better off after you pay your advisor than you would have been otherwise? This can be hard to quantify and may take a bit of introspection. Look at your return on life as well as the quantitative parts. Consider your investment returns, rebalancing, and tax deferral. If you think that your advisor is providing a free service then make sure to look for the hidden costs in your portfolio. A fee-only financial advisor discloses their costs upfront so that there are no surprises. If you are looking for a fee-only financial advisor you can find out more about our services at

Outline of This Episode

  • The 4 reasons you may be looking for a financial advisor [2:57]
  • What to expect from a financial advisor [4:19]
  • Your financial advisor should communicate with you regularly [14:51] 
  • Is your financial advisor adding value to your life? [18:51]
  • The progress principle [24:01]

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

Mar 22, 2021

The American Rescue Plan was recently passed, but do you know all the changes it will bring? You probably already know about the stimulus checks, but you may not know how it could affect your taxes and healthcare. This latest economic stimulus package could mean big things for your tax planning. 

Video recap here:

Since the American Rescue Plan has a heavy tax focus, I invited tax planning extraordinaire, Grayson Blazek, to brief us all on the risks and opportunities that we should be looking out for with the newest piece of legislation. He simplifies this complex topic down to 5 key areas. If you are looking for tax planning opportunities or want to know the risks to look out for, then make sure to tune into Grayson Blazek’s breakdown of the American Rescue Plan. 

Who qualifies for the third installment of stimulus checks?

The third round of stimulus checks may be the most widely known part of the American Rescue Plan. These checks are capped at $1400 per person. Although the income range of those who qualify has narrowed, many people who were not previously eligible for stimulus checks will be eligible for round 3. 

The age range for dependents has been expanded to those in college and older high school students, whereas with the previous rounds of stimulus, dependents were limited to ages 16 and under. Listen in to find out how the income bracket for stimulus checks has changed and learn how you could use this stimulus package as an opportunity for careful tax planning.

How has the ARP changed health insurance premiums?

If you were laid off or terminated like many others last year, your company must continue to offer health insurance through COBRA. The drawback with COBRA is that the full cost of the insurance premium was placed solely on the participant without the employer absorbing a share. The American Rescue Plan will now fully subsidize the premiums of COBRA until September of 2021. This means that if you are on COBRA your premiums will be zero.

That wasn’t the only change in health insurance premiums through the ARP. Find out how the thresholds of the Affordable Care Act have changed with the bill as well. Press play to hear how. 

Changes to the child tax credit and the dependent care tax credit may have you rethinking your tax planning strategy

Most people don’t pay attention to their taxes until the time comes for them to file. But maybe after listening to this episode you may want to start getting in front of your taxes and plan the year ahead rather than focus on the previous year. 

If you have children, then this year is an especially good time to consider tax planning. You’ll want to take advantage of the expanded tax credit that went from $2000 to $3000 and $3600 for children under 6 years old. In addition to the child tax credit, the child dependent care tax credit was expanded to max out at $8000 per child.

Changes to unemployment compensation

Lastly, the American Rescue Plan has extended state and federal benefits to unemployment compensation until September 6. Lawmakers also chose to make unemployment compensation tax-free for 2020. 

Listen in to hear all the details so that you can develop a plan to utilize these changes in your tax planning efforts. This may be a good year for you to consult a CPA to help you file your taxes.

Outline of This Episode

  • [1:20] Stimulus checks part 3
  • [9:10] Health insurance
  • [15:54] The new child tax credit
  • [23:54] The child dependent care tax credit
  • [27:20] Changes in unemployment compensation
  • [32:00] You may want to reach out to a CPA this year

Connect With Chad and Mike

Subscribe To This Podcast

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Mar 8, 2021

It’s always fun to peek behind the curtain and see the strategies and process people use for their decision making.

Video recap:

During this conversation, we review some of my core beliefs around:

  • importance of tradeoffs - how every financial decision affects others
  • being intentional in being a good steward
  • Defining the balance between enjoying today while saving for tomorrow
  • Structuring your money management around the give, grow, owe and live philosophy

4 Primary Uses of Money

You can use it to live, give, owe or grow. For us, we rank these in the following order: give, grow, live, owe.

Giving is at the top of our budget. Giving first breaks the power of money and releases its hold over people. Therefore, tithing to our church has been at the top of our priority list.

We then focus on the growth aspect. This starts with automating our savings so that we can reach 15% of our income. As for how we invest we focus on various types of accounts from 401K to Roth IRAs to 529s for the kids. We explain in the episode how we've set up a system to where we don't lose sleep over our 90% stock allocation.

With 3 yr old twins, a large part of our spending goes to daycare costs. My spouse and I try to spend our money on the things that create joy, including going to NC State sporting events and going on camping trips.

I've always used debt as a tool for large, low-interest purchases such as his home and car. We only hold one credit card and doesn’t want to open any more accounts than are necessary.

Outline of This Episode

  • [4:25] What are Cameron’s money influences?
  • [9:07] How does Cameron divide up his resources?
  • [15:27] Does he worry about his 90% stock allocation?
  • [21:26] How does he see debt?
  • [26:30] What was the best money he spent in 2020?
  • [31:15] The power of small wins

Resources & People Mentioned

Connect With Cameron

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Feb 22, 2021

Have you wondered if there are any financial mistakes that you may have been making?

Video recap here:

Sometimes our financial mistakes aren’t obvious, so in this episode of Financial Symmetry, we discuss 3 hidden financial mistakes that you may be making and how you can spot them. 

Uncertain outcomes cannot be predicted

Are you guilty of believing an uncertain outcome is certain? Sometimes we feel confident that things are going to happen. This can be true even with geopolitical events like the Coronavirus. You may have known the virus would happen, but could you have predicted this current situation? 

People are naturally overconfident, but the market is smarter than you. Trying to anticipate corrections will cost you money. In fact, trying to anticipate market corrections will end up costing you more money than the market corrections themselves.

One way to prevent overconfidence is by talking through potential outcomes with a financial advisor or a financial accountability partner. 

Don’t underestimate the market’s ability for positive surprises

Many people have a negative money script or way that we view finances. This scarcity mindset could penalize their financial potential. There will always be reasons to wait it out or not invest, but instead of focusing on those reasons focus on not missing out on opportunities. You don’t want to take a pay cut in retirement because of missed opportunities. 

We often delay financial decisions to give ourselves time to think about it more or evaluate the alternatives and to consider all outcomes. But often the best investments are the most difficult ones that you have to make. This is why having an investment plan makes sense. 

“Investing is a lifelong journey. Making money slowly is much better than making then losing money quickly.” -- David Booth

Are you missing hidden tax opportunities?

There are different tax opportunities that can be taken depending on your phase of life and how the laws change. One opportunity that many retirees were able to take advantage of this year was the lack of required minimum distributions (RMDs). This allowed people to do Roth conversions. Retirement brings on a wealth of tax planning opportunities since you have more control over your income in retirement. Advanced tax planning early in retirement can help you save on your lifetime tax bill. Listen in to hear how long-term tax planning can save you money over your lifetime. 

Estate planning pitfalls

Estate planning is often the last part of a financial plan that people want to address since it is the least enjoyable part of financial planning. But if you want a say in what happens to your money after you are gone then you’ll need to create an estate plan and review it periodically. Check out episodes 102 and 122 to learn more about estate planning. 

Do you have enough? Are you saving enough? When is the best time to invest? Are you missing out? These are all questions that can be answered with the right financial plan. Think about what a financial plan can do for you. If you are looking for a financial advisor to help you create a financial plan click through to our website.

.Outline of This Episode

  • [2:40] Believing an uncertain outcome is certain 
  • [10:16] Missing hidden tax opportunities 
  • [14:50] Are you taking advantage of an HSA?
  • [17:15] Estate planning pitfalls
  • [21:18] Today’s progress principle

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

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Feb 8, 2021

Stock market manias have an uncanny way of capturing our attention.

Short video recap:

Not only do they dominate weekly headlines, but create visions of what could be. The most recent example is the rapid rise of meme stocks, including Gamestop, AMC and Blackberry among others.

In this episode, we’ll explore what happened with this most recent mania, and describe the why behind how we can become enamored with this type of approach. We'll then offer three questions to provide a framework for the next time you're facing similar feelings.

What happened with Game Stop?

You may have seen a Game Stop store at your local mall or shopping center. Game Stop is a video game retailer whose future did not look promising. Many people compared it to Blockbuster Video.

This uncertain future attracted the interest of short-sellers and the retailer ended up becoming one of the most heavily shorted stocks. When an online Reddit group discovered what was happening to the stock, many people decided to jump in and stop the short. This sudden influx of investors drove the share price up to unprecedented levels.

There’s a difference between gambling and investing

Manias are nothing new. We've seen them in many forms including the Nifty Fifty in the 1950s, the tech bubble in the 1990s and BRIC Countries during the 2000s. The speed and size of these rallies can foster a fear of missing out feeling that's is more analogous to gambling.

There's a fine line between gambling and investing. In stock market manias, it's easy for people to throw risk considerations out the window because the possibility of life-changing gains takes over. Subsequently, this mentality could lead to detrimental results when investors are using money they can't afford to lose.

With Game Stop, investing quickly becomes interesting when the stock is increasing like a rocket ship within a week. For many, this strategy looks miles more exciting when compared to a disciplined long-term strategy. This is when the gambling temptation can circumvent the longer-term evidence based approach you may have used up to that point. Enter diversification.

That's because diversification decreases your investment risk. When you diversify, you invest in many different types and sizes of companies all over the world. The goal of diversification is to ensure the performance of one specific stock won’t impact your entire portfolio.

3 Questions to Ponder when Tempted

If you find yourself considering a specific stock purchase, there are a few questions that can help your decision.

  1. What does this strategy claiming to provide that's not already in your portfolio?
  2. What will this investment reasonably add to your portfolio by including it?
    • Could you increase your expected returns?
    • Will it reduce volatility in your portfolio?
    • Does this help you achieve a goal?
  3. Are you going to be comfortable with the range of possibilities this purchase creates?

Your investment strategy will be most appropriate for you when it's created in service to your financial plan. A plan that is specifically created for your goals and circumstances. Understanding the interaction between your income and future expenses for the next few years.

  • What will you need your savings rate to be?
  • How much longer will you plan to work?
  • Do you have other resources where this risk won't derail your long-term financial picture?

Carefully considering your investment decisions and ensuring that they align with a cohesive and diversified investment strategy will help you stay on target to reach your long-term goals.

Outline of This Episode

  • [1:32] What happened with Game Stop?
  • [6:03] There is a difference between gambling and investing
  • [9:29] The benefits of diversification are far-reaching
  • [14:39] Time is the ultimate thief 
  • [17:33] Today’s progress principle

Connect With Chad and Mike

Subscribe To This Podcast

Jan 25, 2021

What is the most important thing you can do for building wealth?

Video recap:

Recently, Jeff Levine (@CPAPlanner) put this question out into the Twitterverse: Other than saving and investing, what is the one single most important factor to financial success?

Too often when dealing with financial decisions, we try to overcomplicate what is best for us. We liked the simplicity of a single thing to focus on, so this week we are breaking down our version of the most important thing you can do in each decade to improve your financial journey.

Harness the power of compound interest while you’re young

If you are starting to build wealth in your teens and 20s you’re in luck. Time is on your side.

An often cited roadblock to getting this started, is the overwhelming debt obligations to student loans. While important to tackle high interest rate debt, carving out a small amount of automated savings can be life-changing.

For many, the first time we see a compound interest example, we are inspired. We included a powerful example below to demonstrate how much investment growth accumulates over 40 years, compared to the amount you are saving.

By saving small amounts early, compound interest becomes your super power. Automating this savings each month in an investment account with exposure to a diversified stock portfolio starting in your 20s, is arguably the single biggest impact decision you'll make in building wealth. Because of the natural discipline it creates, making it harder to stop it down the road.

Continue to pay yourself first

During your 30s, life often becomes busier. Between new marriages, job changes and growing families, consequential decisions can pile up. These exciting changes bring curveballs you often don't expect, like childcare for remote school over the past year.

This is when deciding to pay yourself first benefits you behind the scenes when life decisions are taking priority. If your saving and investing decisions are made only after you cover your expenses, then your budget is upside down.

Automating your savings and charitable giving can leave you better positioned as you head in to your 40s.

Don’t compare yourself with those around you

During this decade, it's tempting to continue moving the goalposts as you reach certain levels of success.

Comparing your financial situation to others is a common derailment to your long-term success in your 40s. Keeping up with the Joneses can feel like an endless treadmill.

In the The Psychology of Money, Morgan Housel writes, “the ceiling of social comparison is so high that virtually no one will ever hit it, which means it is a battle that can never be won or that the only way to win is to not fight it to begin with, to accept that you might have enough even if it’s less than those around you.”

Determine your definition of enough. Is it a certain amount of money in the bank? A bigger house? Being laser focused on your ultimate financial goals, allows you stick to your financial plan, providing peace of mind along the way.

Be flexible in your 50s

Successful financial planning begins with understanding potential high impact risks.

More and more, we see unexpected hurdles for people in their 50s. It could be a layoff or a loss of assets due to grey divorce, but understanding the potential impact with scenario planning beforehand can leave you more agile to adjust.

Investing in your personal and professional relationships through the years, allows for more flexibility when reinventing yourself in these circumstances. Additionally, understanding the impact of withdrawals on your assets can be valuable in the case you need temporary withdrawals to sustain you during a transition.

After building wealth, keep perspective

Hopefully, in your 60s you are reflecting on a life well lived. This is a time to gain perspective. Common rules of thumb or family recommendations may not be the best. Some common things we hear related to this are:

  • Because I'm retiring soon, shouldn't I reduce the risk in my investment strategy?
  • I need to pay off your mortgage before I retire.
  • Shouldn't I take Social Security at 62, because I not sure it will be there if I wait?
  • Why would I want to make withdrawals from my IRA before I have to?

Having a plan in your 60s provides confidence. Hiring a financial professional can help you develop a plan and to gain perspective so that you can create a long term plan for your money.

Outline of This Episode

  • [4:06] What is the one thing you can do in your teens and 20s to help build wealth?
  • [8:23] The one thing in your 30s that you can do to build wealth 
  • [10:57] What should you be doing in your 40s to build wealth?
  • [14:35] The one thing in your 50s that you can do to build wealth
  • [17:49] What can you do in your 60s to build wealth?
  • [21:30] Consider continuity in your 70s
  • [22:55] What should you be doing in your 80s?
  • [25:32] The progress principle

Resources & People Mentioned

Connect With Chad and Mike

Jan 11, 2021

From a historically quick bear market decline to a speedy rebound, 2020 certainly took us on a wild ride. But there is a lot we can learn from this crazy year.

Short video recap:

In this episode, we are reflecting on the investment lessons we learned over the past year. What were the lessons you took away in 2020? Listen in to hear if there are any other lessons you can learn from the year.

Optimists make better investments than pessimists

Historically, the S&P 500 returns 8-10% per year. Since markets go up in the long term, people who focus on the long-term growth of the stock and bond markets, as well as the growth of the economy, will prosper.

This lesson was put to the test in March of 2020 when we had the shortest bear market in history. Investors that stuck it out profited greatly. From March 23 to the end of 2020 the market went up an astonishing 68%.

Since no one has a crystal ball, buying in a bear market can be scary. This is why we recommend having an investment plan or a rules-based process in place. 

If you lost sleep over or sold stocks during the decline then you need to reassess your asset allocation. How did you fare in the market decline? Were you an optimist or pessimist? Did you stick to your investment plan and wait it out?

Listening to the media is expensive

These days, the markets move at lightning speed. At this velocity, people often feel like they need to stay on top of all the latest financial news. However, listening to the financial media can hinder your ultimate goal. The media’s job is to sell advertising, not to help you reach your financial goals. 

Even if all the uncertainty drives you crazy, step away from the sensationalist news. The number one predictor of long-term investment success is investment behavior, so teach yourself the discipline not to act on every little thing you hear on the news. Turn off your notifications and guard your time instead. 

Watch out for fads

We all hear the rags to riches stories about the latest fads. Raise your hand if you have a friend who has struck it rich with Bitcoin lately. These stories can be so powerful, however, no one ever talks about the downside. 

FOMO (fear of missing out) is real and we often want to jump on the latest bandwagon, whether it be Bitcoin, gold, or whatever the new shiny thing is. At the end of the day, the value of what you own is only what someone else is willing to pay you. 

If you still want to jump on the latest bandwagon understand your motive and think about the impact of your investment on your financial plan.

  • Produced by Financial Symmetry
  • Hosted by Mike Eklund and Chad Smith
  • Recorded in Raleigh, NC
Dec 28, 2020

As we come upon a new year it is a good time to reflect on your finances and set goals.

Video Recap:

In this episode, we discuss 12 steps you can take action on to improve your financial outlook. If you’re looking to get off on the right foot in 2021, print out this checklist and run through it to find improvements you can make now.

12 easy steps you can take to improve your finances

Record your financial goals and positive habits. Writing things down is a great way to hold yourself accountable and see how far you have come. When you write down your goals you can refer back to them later. Our clients have the added benefit of using our Global Dashboard to help them keep track of their financial goals and habits. 

Check your estate documents. This is something that we all push off until later. Do your heirs a favor and review your estate documents now. Are they up to date? This can save your family a lot of headaches. 

Set up an income and expense tracking tool. You need to have an understanding of how much money is coming in and going out each month. When you start tracking your income and expenses you may discover a lot about yourself. It’s also a good idea to compare your cashflow this year with years past. What has changed?

Make sure you have emergency savings. The general recommendation is to have 3-6 months in an emergency fund, however, this can be specific to you and your situation. You may need more. If Covid-19 has taught us anything, it’s that the world can throw you some unexpected situations and it is important to be ready. Where is your emergency savings fund?

Match and max your 401K. Are you taking advantage of the company match in your 401K? Can you amp up your 401K? It is important to remember that the company match amount is not the maximum that you can save. $19,500 is the IRS maximum per year. Are you maxing out your 401K this year? Did you have to make any adjustments to your savings? 

Review your investment strategy. There have been so many changes this year in the stock market this year. Your stock allocation may have grown so it is a good time to check whether your allocation is in line with your investment strategy. Remember that investment behavior is much more important than individual stock picks. 

Make sure you are maximizing tax efficiency. Are your assets the most tax-efficient? All accounts are taxed differently. Think about what assets are best to hold across which accounts.

Pay down high-interest debt. Many times we tend to ignore our high-interest debt, but it is important to understand how often you use debt. Focus on the interest rate and balance of your debts. What is your overall debt? Is it good debt or bad debt? Listen in to hear what we think of different types of debt. Our thoughts may surprise you.

Order your free credit report. Every year around the holidays there is an increase in fraud. Try using Credit Karma to keep track of your credit score.

Review your insurance policies. Do you still need life insurance, disability, or an umbrella policy? You may be carrying too much insurance.

Show me the money! Understand where your accounts are and how they are structured. Keep an inventory of where your accounts are and consolidate them if needed. Its easier to make decisions when you are organized

Communicate with your spouse. Are you both on the same page financially? Has your financial situation changed this year?

After listening to this episode feel free to download this sheet and print it off to use it as a checklist.

Read the full post here:

Dec 14, 2020

Motivated by the new book, How I Invest My Money, I (Mike Eklund) wanted to communicate how I manage my own money.  In our recent podcast, we discuss my approach with investments, savings, spending, debt, insurance, and what the money is for (goals).  We also review some of my core beliefs which include:

  • Spend less then you earn
  • Automate savings, investing, and anything else that you can
  • Invest the majority of portfolio in growth assets (stocks)
  • Spend money on experiences, relationships and to save time
  • Insure against big risks (life/disability)
  • Avoid high-cost debt
  • Keep it simple. Complicated is the enemy for most individuals.

Near the end of the podcast, we discuss one of the best investments I’ve ever made.   As a married father of four kids, it is our purchase of a lake cabin where we create many family memories.  This investment return is determined based on actual experiences as they far outweigh any financial return.

Finally, we finish with what the money is for.  Primarily three things:

  • Time to do the things we enjoy (family, friends, and staying active)
  • Freedom (peace of mind that we’re ok)
  • Legacy for kids (help them get started)

I hope you enjoy the podcast!

Outline of This Episode

  • [1:14] What are my belief systems about investing?
  • [4:45] How did my family shape his views about money?
  • [6:22] My views on net worth
  • [10:45] My views on investing
  • [15:03] Have I been scarred by my investment history?
  • [20:50] How much spending is too much?
  • [29:19] How do we manage risk?
  • [32:58] Creating moments is important

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

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Nov 30, 2020

Growth stocks have been on a tear over the past several years. However, traditionally value stocks have been the big performers in the long-term. But with the rapid rise in growth over the last 10 years, are value stocks still worth it?

Video recap:

Today we explore the question: can value stocks still outperform in today’s environment? We’ll look at the data, provide you with the information, and then lay out action steps that you can take to act on what you learn.

What are value and growth stocks?

Before we begin to explore our question we need to clarify the difference between growth stocks and value stocks. Growth stocks are faster growing, more expensive, and have a lower dividend yield. They are those stocks that you hear about on the news: Facebook, Tesla, and Google are a few. Value stocks have slower growth, are cheaper, and have a higher dividend yield. These are the ‘boring’ stocks and include Berkshire Hathaway, JP Morgan, and Wal-Mart. 

Is this time different?

Let’s look back at history to compare the two types of stocks. From 1926-2010 value stocks grew 12.4% per year whereas growth companies returned 9.8% per year. However, the last ten years have been very different. 

Over the last 3 years, growth stocks have outperformed value stocks by 21% per year. This is the highest 3-year difference on record. Which begs the question, is this time different? Listen in to hear about a similar time period in history. 

Can you really compare this new economy to the 1998-2000 economy?

Much of the growth that we have seen over the past 3 years has been driven by FAANG stocks (Facebook, Apple, Amazon, Netflix, Google). It seems like these stocks could keep growing forever without any competition. And most recently they have all accelerated their growth with the Covid situation. On the flip side, value stocks have been hit hard by the pandemic. 

But are the growth stocks becoming overvalued? Will this growth end up collapsing like the tech bubble of the late 90s?

How do we adjust our investment strategy?

Do you have an investment strategy? It is important to implement a disciplined, rules-based process. Have a process, have a plan, and stick with it. At the end of the day, investor behavior is the key to success.

We’re not saying that you shouldn’t own growth companies, we simply recommend a using diversified approach. We like to say that something in your portfolio should always stink. What does your investment strategy look like? Do you have a hard time hanging on to the losers? 

If you are interested in working with a professional to help you come up with an investment strategy, consider using a fee-only financial advisor. Learn what makes fee-only financial advisors different by visiting our website

Outline of This Episode

  • [1:43] What are value and growth stocks?
  • [7:12] Why has growth outperformed value by so much over the past 3 years?
  • [12:25] How can you compare this new economy to the 1998-2000 economy?
  • [14:10] How do we adjust our investment strategy?
  • [17:18] Today’s progress principle

Connect With Chad and Mike

Subscribe To This Podcast

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Nov 16, 2020

Have you been offered an early retirement package?

Video recap:

Early retirement packages are on the rise. Companies are often looking for ways to cut costs and one way to do that is to give highly compensated employees an incentive to ease into retirement. Usually, these packages offer a one-time payment and sometimes they come with a period of additional healthcare coverage. 

If you are offered an early retirement package many questions will arise. Is this a good deal? Is the package negotiable? What will I do about health insurance? And, of course, should I take it? 

On this episode, Mike and I will give you the tools to create a framework to think about the questions that early retirement packages bring. Listen in to learn how to weigh this huge decision. 

How does this early retirement package affect your long-term financial plan?

Before you consider anything else you need to think about how this package fits into your long-term financial plan. Receiving a lump sum can give you a lottery mindset, so you’ll need to consider what is most important to you. How would this package fit into the bigger picture of retirement?

This is a good time to ask a professional for help. If you are working with a financial advisor, you’ll definitely want to ask their opinion. A financial advisor can help you spot risks and opportunities that you may not have otherwise seen. Mike has some questions you may not have asked yourself about this early retirement package, so make sure you listen in to hear all the questions. 

What about insurance?

The main reason that many people decline an early retirement package is due to insurance. You may want to see if health insurance is a negotiable part of the package. Sometimes the company will offer to pay for your health insurance for a certain period of time. 

You can also check into COBRA coverage which will guarantee you 18 months of health insurance coverage under your old plan--just be prepared for a bit of sticker shock. 

Another way to cover your health insurance is to check into the ACA healthcare exchange. Be sure to weigh all of your healthcare options before signing the deal. 

How will this influence your tax picture down the road? 

So many tax opportunities pop up with an early retirement package. You’ll want to consider all the ways that you can save on taxes if you do decide to accept it. Do you have a health savings account? If so, make sure to max it out. Have you maxed out your 401K for the year? What about your company stock?

If you are under 59 ½, where will your income come from? When do you plan on taking Social Security? Now is the time to plan how to build your ultimate retirement withdrawal strategy. 

Ask yourself: what’s next?

Will you be able to transition into retirement successfully? The answer to this may be dependent upon whether you are retiring from something or to something. This is why it is important to consider what’s next. 

Will you relax on a beach somewhere, find another job, become a consultant, or try your hand at entrepreneurship? An early retirement package can bring about myriad choices, but you need to make sure that you are financially prepared to accept them. 

Outline of This Episode

  • [3:15] How does this decision affect your long term financial plan?
  • [8:02] Health insurance often makes or breaks this offer
  • [10:02] How will this influence your tax picture down the road? 
  • [15:04] Ask yourself: what’s next?
  • [17:43] Alternate scenarios
  • [18:40] The progress principle

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

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Nov 2, 2020

While the FAANG stocks have been the most obvious enviable stock positions over the past decade, there are always success stories readily available to raise feelings of doubt and FOMO in even the most disciplined long-term investors.

Video recap:

For example, investors who purchased $100,000 of Zoom stock at its IPO price of $36/share in April of 2019 would have earned a cumulative rate of return of about 590% and built a nest egg of ~$650k.

Zoom is one of the most recent examples of a company whose stock performance has exceeded expectations so wildly over the past 18 months that it is tempting to wish we were a part of the action and predict that those results will continue in the future, making us very wealthy in the process. After all, the path to extreme wealth is often created through very concentrated positions in individual companies. Examples include Bill Gates, Elon Musk, Mark Zuckerberg, Jeff Bezos, and many others. What made them so lucky? And why shouldn’t we be able to identify companies that will post results like these?

While individual stocks might not kill us, they do pose catastrophic risks that have the potential to be detrimental to our wealth. The nature of individual stock returns was studied in detail in Hendrik Besseminder’s 2018 study in the Journal of Financial Economics, “Do Stocks Outperform Treasury Bills?” which covered stock performance from 1926-2015. These are some of the key findings:

  • A minority of common stocks have a positive lifetime holding period return, and the median lifetime return is -3.7%
  • Only 3.8% of single-stock strategies produced a holding period return greater than the value-weighted market, and only 1.2% beat the equal-weighted market over the full 90-year horizon
  • Just 42% of common stocks have a holding period return greater than one-month treasury bills

While the data is compelling that the odds are stacked against us on individual stocks, often the allure is just too strong. There is no reward without risk, right? Some of us may still want to take advantage of the growth potential of an individual stock position for any number of reasons. Maybe you want to have ownership in the company you work for or do business with frequently. You may have also inherited or been gifted individual stock positions. These might even have sentimental value for your family. Or you may just have a feeling about that company. If you find yourself in one of these situations, we recommend setting a decision-making framework for how you will buy, hold, and sell these positions:

  • Perform a portfolio Deep Dive. If you are holding a portfolio of diversified mutual funds or ETFs, it’s likely you already hold a position in the stock(s) you are considering. This means you have already been riding the wave of success and benefiting from the stock’s stellar performance. It has simply been less visible, and the return was muted by subpar performance in other areas. Diversification means you will always hate something in your portfolio, but it also gives you the best odds of long-term success.
  • Decide how much. If after performing your portfolio analysis you still decide you want to buy an individual stock, you will need to choose a prudent amount. We recommend individual stock positions account for no more than 5-10% of your portfolio. You don’t want to be overexposed to a position that has the potential to kill you, even if it might make you a killing.
  • Consider Taxes. While we never want to let taxes guide our investment strategy, it is prudent to consider how tax-efficient the position will be. If the outsized returns you expect come to fruition it may be beneficial to purchase the position inside your Roth or Traditional IRA for tax-free or tax-deferred gains. Conversely, you may be in a high tax bracket now, but expect that to fall in a few years when you retire. This may present the opportunity to realize any capital gains at a lower rate or even 0% in the future. Take a peek at your financial plan for context.
  • Set target prices for buys and sells. Often the stocks that feel most attractive are those with fantastic recent past performance. They are also often very expensive relative to their peers and the broader stock market. Researching the company’s current and historical price to earnings ratio as well as estimates of fair market value is informative for making buy, hold, sell decisions.
  • Ask: What if I am wrong? Our natural tendency when faced with the prospect of incredible return potential is toward overconfidence. Make sure your answer to #2 is an amount you are willing to say goodbye to if the outcome is not what you hoped for.
  • Ask: What if I am right? If your hopes and dreams come true with a winning stock pick it is important to set rules around trimming that position back to target to periodically take profits, diversify, and reduce risk. Recognize that dabbling in individual stocks is a form of gambling, and it is important to know when to walk away.

For further reading on creating a decision-making framework and avoiding common investor pitfalls, we recommend Daniel Kahneman’s “Thinking Fast and Slow,” and“Decisive,” by Chip and Dan Heath. If you find yourself called by the Siren Song of an individual stock or deciding how to manage positions you may already own, please contact us to discuss the best approach for your personal situation in more detail.

Outline of This Episode

  • [3:03] If others can do it, why can’t I pick a winner? 
  • [6:20] Industrial change can happen very quickly and cause a shift in industries
  • [10:02] Perform a portfolio deep dive
  • [12:36] Don’t choose an individual stock to make up lost ground
  • [15:02] Consider taxes
  • [17:16] Set target prices to buy and sell
  • [19:39] Ask yourself “what if I’m wrong?”
  • [20:39] Ask yourself “what if I’m right?”
  • [22:34] List the potential scenarios

Connect With Chad and Allison

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Oct 19, 2020

Estate planning is one of the most overlooked and procrastinated upon areas of financial planning.

Video recap:

While your legacy is important, it doesn’t generally take the front seat of your thoughts or your financial plan. There’s more to legacy planning than just having a will, but how much more depends on which stage of life you’re in. Find out what you should be doing to plan your legacy whether you’re in your 30s, 40s, 50s, or 60s by listening to this episode of Financial Symmetry. 

What should someone in their 20s and 30s be doing about their estate planning?

When you’re in your 20s and 30s legacy planning starts with creating a will. A will gives you a good foundation and will get you thinking about electing your beneficiaries. You’ll also want to select your beneficiaries on your investment accounts. 

Once you get married and start having children, then it’s important to keep your plans updated. It’s also a good time to get term life insurance. Make sure to revisit your will and the beneficiaries on your investment accounts periodically or with major life changes like a move or a new baby. 

What are the important legacy planning considerations for someone in their 40s?

When you’re in your 40s you probably have more accounts and higher balances than you did in your 30s. Have you kept up with all of your retirement accounts from previous employers? The key to staying on the right track is to stay organized. Make sure to check in on your beneficiaries and estate documents from time to time. 

Tax planning is important in your 50s and 60s

If you are in your 50s and 60s you may be in the sandwich generation. This means you may have elderly parents and your own kids embarking on adulthood. This is an age when many really start thinking about their own legacy. It’s a good time to start thinking of Roth conversions. You can start tax planning not just for yourself but for your entire family. Think about how you can pass on your assets with the most after-tax value.

What should you do if you inherit money?

If you receive an inheritance there are different things to consider depending on your age and financial situation. You may want to consider paying off loans, buying a house, or even taking a mini-retirement. Having a financial plan in place can give you the confidence to do exactly what you want with those funds. 

Estate planning is usually the last item on your financial planning list of things to do and it often takes another person to spur you on. A professional like an attorney or a financial planner often help guide you through this process. Let us know if you would like some help getting your estate planning in order. Plan today to make the most out of your retirement.

Outline of This Episode

  • [2:30] What should someone in their 20’s or 30’s be thinking about with estate planning?
  • [5:31] What are important legacy considerations for someone in their 40s?
  • [8:03] When you’re in your 50s and 60s it’s a good time to think about tax planning
  • [13:22] What should you do with an inheritance if you’re in your 20s or 30s?
  • [17:16] What can people in their 40s do if they know an inheritance is coming?
  • [21:52] How does your mindset impact how you use an inheritance?
  • [25:07] Start the conversation with your family 

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Oct 5, 2020

We know the COVID-19 global pandemic has affected everyone in unique ways. Today we want to discuss how this health crisis has affected women, specifically financially.

Video recap:

As working mothers, we have felt the impact of these daily changes acutely. According to Goldman Sachs “single parents, parents with young children and parents who can’t work from home are the groups most at risk to stop working entirely because they have no child care.”

Pre-pandemic the US labor force was split roughly 50/50 between men and women. However, women’s participation rate has always been directly tied to accessible childcare and pandemic-related job losses have disproportionately impacted women. With most schools resorting to distance learning and many childcare options off the table, families are struggling. Many solutions include working mothers putting their careers on hold. According to a study by the US Census Bureau, women are 3 times more likely than men to have left their job due to child care issues during the pandemic. This has negative implications for both the economic recovery and women’s future financial health.

We already know women face unique financial challenges due to three main issues:

In the current health crisis, these disparities have had more severe implications for women of color and millennial women. Sadly, these financial differences compound over time and can have devastating effects. As women grow older, they are also more likely to face poverty. According to the Social Security Administration 17.3% of nonmarried elderly women are living in poverty today. The figure below illustrates the higher poverty rates women over 65 experience in almost every category: 

An article in the New York Times posited that this “Pandemic Could Scar a Generation of Working Mothers.” If that happens it also has the potential to increase the pre-existing retirement challenges women face later in life. While these trends are discouraging, the stakes are higher than ever for women to take control of their financial futures. The current situation also presents new opportunities as companies are more open to hiring a diverse workforce outside their local network. This is one silver lining of the pandemic: companies now have an expanded talent pool to choose from. If your current employer does not allow the necessary flexibility, you may be able to find a better fit. We recommend the following checklist to help you stay sane, maintain your earning power, and safeguard your finances:

We recognize there are no easy answers right now when it comes to meeting increased care giving demands while balancing career aspirations and financial stress. If you have questions about the best way to balance these changing demands with your long term financial goals, please contact us to speak with one of our financial advisors. We have four female advisors who are passionate about these issues and would love to help you position yourself for financial success.

Outline of This Episode

  • [1:27] Challenges women are facing during the COVID-19 crisis
  • [4:30] How has the pandemic affected women’s spending?
  • [8:32] One benefit of working from home is working from anywhere
  • [11:22] Work-life balance is a new struggle for many women
  • [13:32] This checklist can help you stay sane during these trying times
  • [15:58] What are you doing to stay healthy?
  • [20:33] It’s okay to accept help

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Sep 21, 2020

Every 4 years it happens: an election comes along and threatens everything. Or so it seems.

Video recap:

Regardless of how you feel about the candidates, we’re here to discourage you from making fear-based financial moves. Learn how to overcome your emotions so that you don’t derail your careful long-term investment strategy. 

The media won’t help you achieve your financial goals

It’s hard to get away from the drama of the election coverage. It’s everywhere you look: on the TV, in the newspapers, and even from the notifications on your phone. This kind of round the clock, in your face news coverage can heighten your anxiety about the state of the world and even make you worry about your investments. It is important to remember that the media is not there to help you. Its goal is to sell advertising, not to help you achieve your financial goals. 

While 2016 may seem like a distant memory, many investors were concerned at the time that a Trump victory would surely tank the stock market.  We fielded a lot of calls leading up to the 2016 election discussing if a more conservative approach should be taken, at least until we had more certainty.

While Trump’s victory was a surprise to many 4 years ago, it certainly was not devastating for the stock market.  In fact, the S&P 500 with dividends returned 21.83% in the following calendar year of 2017. 

Investors who moved into cash to await more clarity would have swiftly regretted their decision.  Check out the chart linked below which shows annualized returns for each president dating back to 1969 with the red and blue bars depicting results for Republicans and Democrats.

How to stay focused on long-term financial results during an election year

Staying focused on your long-term financial goals can be a challenge when the short-term seems so uncertain. People often feel tempted to time the market when the world feels up in the air. It’s important to remember that the market is influenced by many other events, not solely the election. So even if it seems that the election is the only thing going on, you need to stay focused on your long-term financial goals, stick with your investment plan, and avoid market timing.

Focus on the facts to help you through uncertainty

One way to help you stay focused on your long-term financial goals is by looking at the facts. If you were thinking that this might be a good year to sit out the stock market, you may want to think again. On average, the stock market return in an election year is 11%, which is well above average.

Another surprising fact is that it doesn’t matter to your portfolio who is in the White House. There is actually no correlation between stock market performance and which party leads the country. Listen in to find out which two presidents saw the same economic growth during their first three years in the Oval Office, the answer will surprise you.

Focus on what you can control

In investing, there are many factors that are beyond your control. However, that does not mean that your entire financial life is uncontrollable. Actually, the factors that you can control have a lot more to do with your financial success than which investments you choose. Think about all you can control: your cash flow, when you need money, when you stop earning income, what your income sources in retirement will be, how you pay for healthcare, and your estate planning. These controllables are much more important to your financial well being.

Outline of This Episode

  • [1:42] We go through this emotional roller coaster every 4 years
  • [7:35] Sometimes the best thing to do is nothing
  • [10:24] Have an investment plan and stick with it
  • [13:14] Focus on what you can control
  • [14:44] Today’s progress principle

Resources & People Mentioned

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Sep 7, 2020

2020 has been a year of change. The pandemic has given people an opportunity to rethink their lives and many have been rethinking their career.

Video recap:

Whether you are one of the millions of people that have been forced into a job change or whether you are considering a professional pivot on your own, there is a lot to think about when changing jobs.

On this episode, Grayson Blazek and I will walk you through all the considerations when taking on a new job. If you are rethinking your career listen in to hear how you can take advantage of your human capital. 

Think about the total compensation not just the salary

Often when we consider a job offer there is only one number we look at. But there is more to a job than the base salary; it is important to consider the total compensation. The base salary helps you plan your monthly expenses but understanding the bonus and stock compensation is also important. 

When thinking about the bonus structure of a potential job you’ll want to consider the target. Ask what the confidence in that target is. You’ll also need to understand how the bonus incentive works. How often does it payout? Is the bonus based on your personal performance or on the performance of the team?

Some other financial considerations are the stock options and the sign-on bonus. That hiring bonus can be enticing, but don’t let it cloud your judgment. Remember a hiring bonus is only a one-time payment. 

Consider the benefits package

When comparing job offers you’ll also want to compare the benefits package. Make sure to request an employee benefits brochure if they haven’t given you one. The benefits package is often seen as secondary to the financial compensation but those benefits can add a lot of value to your life.

First of all, you’ll want to consider the healthcare plan. Does the company offer one? How does it compare with your current plan? How much of the plan is covered by the employer? Do they offer an HSA?

Healthcare isn’t the only benefit to consider. What about life insurance and disability? Does the company offer a student loan repayment program? How about a fitness membership. Consider the entire benefits package and how it could add value to your life. 

What is the retirement plan like?

In addition to the health benefits and salary, you’ll also want to investigate the retirement plan that comes with this new position. Do they offer a 401K? Will they match your contribution? What are the plan costs? What about vesting, will you actually realize that vesting period? Do they offer other ways to save for retirement?

Your human capital is one of the biggest assets you have and the way you spend it will greatly impact your financial future. So when considering a job transition, there is much more to think about than the base salary. Tune in to this episode to discover all the details you need to consider when evaluating a job change.

Outline of This Episode

  • [2:50] Think about the total compensation not just the salary
  • [8:30] What is included in the benefits package?
  • [13:42] What is the retirement plan like?
  • [20:22] Does the position include an employee stock purchase plan?
  • [24:31] What about the flexibility factor?
  • [27:54] Consider all your details

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Aug 24, 2020

We know how important it is to save for retirement, but at the same time, it’s important to enjoy life now. In this episode, we’ll walk you through how to set up a framework for your investment strategy.

Short Youtube Recap:

You’ll learn how important your behavior is to your investment success, how to think through your asset allocation choices and finally how to select the investments themselves. 

Investment behavior matters more than any investment you pick

What is your investment approach? How you make decisions with your investments can make or break your investment success. You may think that your returns are solely based upon which investments you choose, but the reality is that your investment behavior figures into your returns much more than any specific investment that you choose.

Think about last March. What was your reaction to that volatile market? Did you buy, sell, or do nothing? Even though it’s challenging to know how to react in those moments, in a volatile market every move you make counts.

The dominant determinant of long-term, real-life financial outcomes isn’t investment performance; it’s investor behavior. –Around The Year with Nick Murray

Asset allocation is also important to your investment strategy

The second driver to success in investing is your asset allocation. Asset allocation is simply the measure of how your portfolio is dispersed. How much do you have invested in stock and bonds? What percentage of your stocks are US-based? What percentage are international? Asset allocation also takes into account whether your stocks are large-cap, small-cap, etc. Your asset allocation is an important part of realizing your investment returns.

How we pick investments 

It’s important to have an independent mindset to help you pick your stocks. You don’t want to just follow the pack and do what everyone else is doing. There are several key areas that help us choose stocks at Financial Symmetry. The areas are ethical company culture, low costs, evidence-based, tax-efficient, and whether it is repeatable. We continually ask questions about the investments we choose. And if we don’t like the answers, we don’t invest in those companies. 

Do you have an investment plan in place?

What is your investment plan? Think about the strategy that you have used to make decisions about investing. An investment plan includes more than investments, it encompasses behavior and asset allocation. If you don’t have one consider working with a fee-only financial advisor. Having an investment plan could be the difference between a successful retirement and an uncertain one. What is your investment strategy? Try taking the quiz in our blog post to determine your investment composure.

Outline of This Episode

  • [2:25] Investment behavior matters much more than any investment that you pick 
  • [5:28] How to pick investments
  • [9:41] Active funds vs passive funds
  • [14:41] Process is important
  • [19:50] Think about the strategy that you have used to make decisions about investing
  • [20:12] Progress principle of the day - take the quiz

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Aug 10, 2020

There are fundamental principles that we all need reminders of from time to time. As kids and grandkids are heading off to college, we're talking through 6 core principles to getting off on the right financial footing. We also include a chart demonstrating the power of saving 15% of your income. 

Youtube video recap:

If you can follow these 6 steps, it's very likely your future self will thank you.

6 Tips to Begin on the Right Financial Foot

  1. Know where your money is going. Track your spending. Review your spending periodically so that you can hold yourself accountable. Budgeting brings awareness to your spending and money habits. There are many online tools that you can use to help yourself with this task. 
  2. Don’t underestimate the impact of a large purchase on your finances. People often underestimate the impact of a large purchase such as a large house or car. Big purchases that you aren’t ready for can really impact your future self. The payments you make toward these purchases add up over time. Give yourself more freedom by buying smaller. It’s also important to keep in mind the total costs associated with those large purchases. Maintenance and insurance increase the costs of those big purchases. When contemplating a large purchase think about the time value of your money. This exercise can really help you make these decisions.
  3. Sign up for your employer-sponsored retirement plan. It’s important to take full advantage of the retirement plan that your company offers. Make sure that you are signed up for the company matching option if it is available. You want to take full advantage of compounding interest over the course of your working life. 
  4. Invest in a Roth IRA. The Roth IRA gives you 30-40 years of tax-free growth. You may not have access to a Roth as you get older due to income limitations, so it is a good idea to take advantage of it while you can. 
  5. Don’t skip risk planning. Young people often think of themselves as invincible, but life carries risks. Plan for those risks accordingly by utilizing health insurance, life insurance, and disability insurance. It is also important to create estate documents like a will as well as a financial and healthcare power of attorney. 
  6. Discuss money in relationships. Discuss goals and financial expectations with your partner. Don’t shy away from discussing your feelings about gifts, debt, saving, and investing. 

Visualize your future self

Your ability to create wealth impacted by your ability to earn as well as understanding how you spend money. If you have had trouble saving and investing, visualize your future self. When you are making a decision think about how it will affect you and your finances, not just now, but 20 or 30 years from now. What are you doing now to help your future self?

Outline of This Episode

  • [2:35] Know where your money is going
  • [5:15] Don’t underestimate the weight of bigger purchases
  • [7:23] Sign up for your employer-sponsored retirement plan
  • [9:27] Invest in a Roth IRA
  • [11:23] Don’t skip risk planning
  • [14:00] Discuss money in relationships
  • [16:38] Today’s progress principle

Resources & People Mentioned

Connect with Haley Modin

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