Economy

How Potential Higher Inflation and Taxes Impact Your Retirement Strategy

July 29, 2021 by Hans Blake, CFA, CPA

Reading Time: < 1 minute On today’s Intelligent Money Minute, we continue our conversation with Morningstar’s director of personal finance, Christine Benz on how potential higher inflation and taxes impact your retirement strategy. Christine believes we should be mindful of potential inflation and high taxes. A key point she makes is not waiting to implement tax-saving strategies. During this episode, she explains the value of tax-deferred accounts. Tax-deferred accounts blended with other financial vehicles could be beneficial to your financial strategy. At Intelligent Investing, one of our unique factors is that we strive to minimize fees and that includes government fees. There are many planning opportunities, especially in the sweet spot years between retirement from an employer and when you start social security benefits. We love organizing our clients’ financial junk drawers, and we’d love to organize yours. To learn more about Intelligent Investing or to become our next intelligent investor, please visit investedwithyou.com. Schedule a short discovery call or meeting We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

Christine Benz is Morningstar’s director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. She holds a bachelor’s degree in political science and Russian/East European studies from the University of Illinois. Christine lives in the Chicago suburbs with her husband, Greg. She is an avid cook, a political junkie, and a long-suffering Chicago Cubs fan. Follow Christine on Twitter.

The Retirement Bucket Approach Part 2

July 21, 2021 by Hans Blake, CFA, CPA

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The Retirement Bucket Approach with Christine Benz

Reading Time: < 1 minute On today’s Intelligent Money Minute, we continue our conversation with Morningstar’s director of personal finance, Christine Benz on the retirement bucket approach. During this episode, Christine expounds further on the bucket approach and behavioral finance. Hans and Christine talk about situations where investors reacted poorly to market situations. Christine stresses the importance of sticking to your financial planning during uncertain times. At Intelligent Investing, we strongly believe in behavioral coaching. We believe that the behavior gap (the difference between actual investment return vs. actual investors’ returns) can be significant and minimized if advisors and clients behave properly. This often means doing the hard thing and not chasing after returns or headlines. It also means turning off the scary headlines that make you want to abandon your portfolio and plan. To learn more about behavioral finance and our philosophy, please visit investedwithyou.com. Schedule a short discovery call or meeting We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

The Retirement Bucket Approach

July 8, 2021 by Hans Blake, CFA, CPA

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Reading Time: 2 minutes On today’s Intelligent Money Minute, we interview Morningstar’s director of personal finance, Christine Benz on the retirement bucket approach. Christine has been a longtime believer in this retirement bucket strategy. During this episode, Christine defines the retirement bucket approach and highlights the pros and cons of this strategy. The basic idea is securing one to two years of portfolio withdrawals. A critical component of this approach is setting aside cash reserves. Liquid reserves can bring peace of mind to those employing a long-term portfolio strategy. There is some initial risk building this cash reserve, but you build yourself a bulwark that you can spend through as opposed to a depreciated equity holding. It is important if not vital for retirees to have a plan for liquidity needs. Perhaps setting aside 1-2 years of living expenses in a money-market type of account or investment is best. Perhaps it is utilizing a bucket approach. Without understanding a clients’ needs, wants, and wishes, and having a timeline for when those expenses may occur, your plan and/or portfolio may not be optimized. We’d be happy to have a quick call or coffee with you to start the conversation of how we may best serve you and your family. To get started, please visit investedwithyou.com. Schedule a short discovery call or meeting We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

How Retirees Can Replace Their Income in a Low-Yield Environment

June 23, 2021 by Hans Blake, CFA, CPA

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How Retirees Can Replace Their Income in a Low-Yield Environment

Reading Time: 2 minutes On today’s Intelligent Money Minute, we interview Morningstar’s director of personal finance, Christine Benz on low-yield bonds. During this episode, Christine gives her perspective on what retirees can do in the current low-yield environment. She encourages retirees to consider a total return approach to their portfolios. Each year take a step back and determine the best place to pull cash flows. Christine believes the best location for retirees to go for cash flows is hiding in plain sight. In their appreciated equity holdings. Trimming appreciated holdings is a way to supply cash flows for a couple of years while reducing risk in the portfolio. The key is to not be dogmatic about your income, but being a tad eclectic in your approach. At Intelligent Investing, we believe in a total return approach when it comes to our clients’ income needs By combining both ordinary income from dividends and interest along with selling appreciated investments that have capital gains, we can help supplement our retiree’s cash needs from the portfolio. By not being dogmatic, we believe the flexibility provides more tax planning opportunities and may lower the tax burden from solely focusing on just dividends or interest which can be taxed at much higher rates. To learn more about our philosophy, please visit investedwithyou.com. Schedule a short discovery call or meeting We’ll be interviewing Christine on several podcasts regarding retirement strategies, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts.

Christine Benz Bio

The Four Horsemen of the Retirement Apocalypse

April 15, 2021 by Hans Blake, CFA, CPA

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Reading Time: 2 minutes On today’s Intelligent Money Minute, we interview Larry Swedroe on the four horsemen of the retirement apocalypse. Larry explains the importance of investors not using historical returns for blindly forecasting the future. On the contrary, Larry explains the need to understand how the returns earned value. During the episode, he goes through misconceptions about equity evaluations, optimistic forecasting, and bond yields. Larry explains in detail the four horsemen of the retirement apocalypse:

Equity evaluations are much higher
Bond yields are lower
Longevity risk
Long-term care risk

As Larry mentioned, the Four Horsemen of the Retirement Apocalypse can seem scary and produce fear in your hearts. As you approach or if you are in retirement, there are some ways to plan for such events. At Intelligent Investing, we minimize financial stress to maximize lives. Our goal is to create a written financial plan and stress test your plan and portfolio for these types of events. We’d love to sit down with you over a complimentary coffee or virtual meeting to discuss how we may serve you and your family. Don’t face retirement alone…let us be your financial accountability partner and we can face the future together. Schedule a short discovery call or meeting We’ll be interviewing Larry on several podcasts regarding markets, passive investing, and diversification, so be sure to subscribe to our Intelligent Money Minute podcasts. Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has since authored seven more books.

Larry Swedroe Bio

Since joining the Buckingham Strategic Wealth in 1996, Chief Research Officer Larry Swedroe has spent his time and energy educating investors on the benefits of evidence-based investing. In his role as chief research officer and as a member of the firm’s Investment Policy Committee and Board of Directors, Larry regularly reviews the findings published in dozens of peer-reviewed financial journals, evaluates the outcomes and uses the result to inform the firm’s formal investment strategy recommendations. Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television shows airing on NBC, CNBC, CNN and Bloomberg Personal Finance. Larry is a prolific writer, contributing regularly to multiple outlets, including Advisor Perspectives and ETF.com. Before joining Buckingham, Larry was vice chairman of Prudential Home Mortgage and senior vice president at Citicorp. Larry holds an MBA in finance and investment from NYU and a bachelor’s degree in finance from Baruch College.

The Dimensions Of Active Management

January 20, 2021 by Hans Blake, CFA, CPA

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On this episode of Intelligent Money Minute, we interview Larry Siegel, the director of the CFA Institute Research foundation on the dimensions of active management. In this episode, Larry breaks down the various elements of active management. Active management adds three variables: alpha risk, active return, and the cost of active management. It’s not possible for active management as a class to outperform index funds. This is due to active managers betting against each other, which results in lost money relative to index funds over time. Not every active manager is going to lose. Some active managers will win and some will lose, but how long will those losers stay in the active management game? Probably not very long.

We’ll be interviewing Larry on upcoming Intelligent Money Minute podcast episodes, so be sure to subscribe if you haven’t already. Larry mentioned that the world’s population growth explosion looks to taper off this century, leading to more prosperous countries and individuals, which should allow us to solve some of the environmental enigmas that we currently face.

We agree with Larry that there are sometimes active managers that can outperform, but it is very difficult to find another active manager to take the “losing side” and be willing and able to stay in the game. At Intelligent Investing, we use both passive and active management, and focus on keeping our portfolio costs low. Because we are independent, we don’t need to pay any wallstreet middlemen or pay additional fees in order to keep our “big named-financial firm’s headquarters happy” which helps us remove fees and unneeded costs from our portfolios. If you are interested in becoming the next intelligent investor, please visit investedwithyou.com. We’d be honored to serve you and your family.

Larry Siegel Bio

Laurence B. Siegel is the Gary P. Brinson director of research at the CFA Institute Research Foundation and an author, consultant, and speaker on investment management and economics. Before retiring from full-time work in 2009 he was director of research at the Ford Foundation and, before that, head of research at Ibbotson Associates (since acquired by Morningstar). He attended the University of Chicago (BA 1975, MBA 1977). His book, Fewer, Richer, Greener, has been published by Wiley and is available, along with his other work, at https://www.larrysiegel.org.

How To Invest In A World Of Negative Interest Rates

January 6, 2021 by Hans Blake, CFA, CPA

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On this episode of Intelligent Money Minute, we interview Larry Siegal, the director of the CFA Institute Research foundation on how to invest in a world of negative interest rates. Most environments feel unprecedented, but until 2019 there have never been negative interest rates. What does this mean? Essentially, it means locking in a guaranteed loss over long periods. How does one invest when the riskless rate is negative? Larry suggests that investors could either take more risk or budget for lower returns. According to Jack Bogle, the better of those options is to budget for lower returns. This requires one to save more and spend less.

History doesn’t repeat, but it often rhymes. You can either take more risk and hope equities goes up, or you can budget for lower returns. The prudent investors will save more and spend less, and these are the principles we teach our clients. We’d be honored to have you consider becoming a client. To learn more, please visit Get Started.

Larry Siegel Bio

The Secret of Endowment Success

December 16, 2020 by Hans Blake, CFA, CPA

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Reading Time: 2 minutes

Larry sheds light on the secrets of endowment success. First, he encourages investors to be long-term investors in behavior rather than claiming to be one. Another endowment principle to consider is avoiding performance chasing. Third, keep your investment costs low. Fourth, don’t do what everyone else is doing. Fifth, don’t fear boards and committees. Finally, liquidity is something to consider for your long-term investment strategy. Larry encapsulates his thoughts with a witty quote, “You are not so smart, and other people are not so stupid.”

We agree with Larry’s advice on Investment success. Two of our wealth management principles are patience and discipline. Patience is the decision not to do something wrong. The more often you change your portfolio–actually, there’s evidence that the more often you even look at your portfolio–the lower the return will be. We want to be patient and let investment themes and strategies play out. The second principle is Discipline. Discipline is the decision to keep doing the right things. Discipline says, “I don’t care what’s working now; I care about what’s always worked, and I’m going to persist in doing the things that have, most reliably, always worked.” To learn more about our wealth management principles, please visit our website.