Long-Term Tax Planning

We have often told clients over the years that long-term tax planning is not what happens when you receive your December issue of a personal financial planning magazine in mid-November.  Effective tax planning, particularly for retirement, is a multi-year approach.

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Know Your Advisor

I remember years ago I was at a conference, attending a session by Professor Meir Statman of the University of California, Santa Clara and author of the book What Investors Really Want.  (Spoiler alert – they want everything.)  He was discussing behavioral finance and how money and investing do not involve just rational decisions, but emotional ones as well.  As a CPA and being rather analytical, it took me a few years to figure this out.  During his presentation, he referred to a good financial advisor as a “financial physician.”  While I thought this was a slight exaggeration and a potential insult to my friends who are physicians, there is some truth to the notion that having sufficient financial resources is almost as important as your health.  However, I do realize that money cannot buy everything, including good health.

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Pascal's Wager and a Diversified Portfolio

Several years ago we discussed Blaise Pascal's wager in our Quarterly Commentary.  Pascal was a seventeenth century French philosopher, mathematician and physicist.  He had a theory that all people bet that God either exists or does not exist and live their lives accordingly.  If God does exist, and assuming the infinite gain (heaven) or loss (hades) associated with either one believing or not believing, a rational individual would choose to believe in God, or at least live as though God does exist and not treat other people with disdain.  If you are wrong in pursuing this path and God does not exist, then you have given up only a few things in life that you may have otherwise enjoyed.  I suppose this last point has a fair degree of variability to it, depending upon your personal preferences.

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Not Keeping Up with the Joneses

I am going to cover a couple of topics today – expanding on a great post by Michael Kitces on lifetime earnings and savings and how to serve the Millennial client and still stay in business. Let’s start with Michael Kitces. If you are not familiar with Kitces, he is a partner and Director of Planning Research at a firm in Columbia, MD, along with a couple of my friends, Dwight and Ken. I follow Kitces on Twitter and he recently had a great post about earnings and lifestyle, which you can find here.

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