Fiduciary Advice

The sudden arrival of a large sum of money can be exciting and disorienting at the same time. The big dollar amount may short-circuit some of your normal financial decision rules and patterns. With that in mind, we offer you three solid ways to protect a windfall and prevent future regrets about how you spend and invest it.

I have been spending as much time as possible reading about the newly enacted tax bill, the first tax reform signed in 31 years. All sides agree that the bill lowers tax rates for corporations and individuals. After that, there is little consensus on the broad effect of tax reform, who it really helps or harms, and how long it will last. The devil is in the details. Here are a couple items of special interest to investors. 

Between now and year-end — and perhaps well beyond — we can expect the popular news to be dominated by the tax reform debate. The last tax reform law to pass muster was in 1986, thanks to President Reagan and Speaker Gephardt.  Their reform was a true bipartisan effort. It seems we’ll need another two-party effort to reform our system this time around. How can you protect yourself now if you don’t even know if a bill will pass or what it will include? Read on…

Last Thursday’s announcement of the Equifax breach was a monumental moment for personal financial security. Nearly 44% of Americans had their social security numbers exposed by hackers. Here’s what you can do about it.

The penalty economy’s objective is to guide people into paying more than they intend when they are confused, distracted or too busy to care. It’s not necessarily illegal or even unethical. Have you been spending money in the penalty economy?

Charlie Munger, Warren Buffet’s longtime business partner, has said, “A lot of success in life comes from knowing what you want to avoid: early death, bad marriage, etc.” Charlie was talking about a problem solving technique called “inversion.” We use the term “anti-goals.” Either way, focusing on what you want to avoid is a very powerful tool.

It happens to many of us. You get to the point where you decide about your family’s investment management. It can happen when the dollar amounts or time required to manage investments exceed what’s comfortable for a do-it-yourself situation, or the legal, tax or estate planning aspects get too complicated. Four prospective clients are going through that right now: an entrepreneur couple, a lawyer, an independent woman and an investment executive. If you are curious about how they do it, read on about this real-time investment journey with real people.

Budgeting is like dieting, when it’s too strict it quickly falls apart. Fortunately there are simple ways to get around the challenges linked to budget discipline. Lead by example and teach your family members to follow these habits and you’ll ensure their financial stability in any environment. Here are three tried and tested habits:

Fear is healthy. It’s an essential instinct that has kept our species alive. We all know that gut-level feeling of fear, followed by a reaction of fight or flight. When fear strikes in the investment world, we often see investors trip and stumble as the urge to flee takes over. A race for the exits can be costly, and with the benefit of hindsight, is often the wrong reaction to the many varieties of panic, doubt, what-ifs, truly bad news, and sudden change that investors face.