Wealth Management

Smarter Business Exit Strategies

Too many business succession plans don’t work out as planned, but smart owners can get back on track and stay that way for the long-term.


Key Takeaways:

  • Most business owners create unnecessary risks for their families, employees and clients by failing to fund business succession plans.

  • Every business owner should establish a clear vision for his or her transition and look for ways to improve after-tax returns.

  • Business owners can reduce the costs of succession plans by 50 percent by using pre-tax dollars to pay for insurance.

 

Many successful entrepreneurs, especially Boomers, may be thinking that now is the right time to exit their businesses. Unfortunately, business transitions don’t usually go as smoothly as expected. The failure rate of succession plans is now at eyebrow-raising levels. But it doesn’t have to be this way.

What motivates most business owners to think about a business succession plan?

Scary stories about failed companies motivate business owners to consider implementing a business succession plan. Despite the obvious need, few plans are actually designed, drafted and funded properly. High professional fees and insurance costs often take the blame when business owners are asked why they did not implement a succession plan.

Why do so many succession plans miss the mark?

Most business succession plans fail. According to Harvard Business Review, only 30 percent of the businesses make it to Generation Two and a mere 3 percent survive to generate profits in Generation Three. Estate planning experts such as Perry Cochell, Rodney Zeeb and George Hester came up with similarly disappointing numbers. Given this dismal success record for family business transitions, it is no wonder that 65 percent of family wealth is lost by the second generation and 90 percent by the third generation. By the third generation, more than 90 percent of estate value is lost despite the efforts of well-meaning advisors. It does NOT have to be this way.

What is the biggest problem business owners face when they try to implement succession plans?

Unless a business succession plan addresses tax issues, company owners can lose much of their wealth to taxes on income, capital gains, IRD, gifts, estates and other taxes. In most successful businesses, the company will generate taxable cash flow that exceeds what is needed to fund the owner’s lifestyle. This extra cash flow is usually taxed at the highest top marginal state and federal income tax rates. When the after-tax proceeds are invested, the growth is subject to the highest capital gains rates. Ultimately, when the remaining assets are passed to family members or successor managers, there could be a 40 percent gift or estate tax applied.

How can owners and their advisors solve this tax problem?

Every business owner should establish a clear vision for his or her transition and look for ways to improve after-tax returns. Tax-efficient planning strategies are needed to guide decisions about daily operations and business exit strategies. An astute advisor can help you find ways to fund business succession agreements in ways that generate current income tax deductions while allowing the business to generate tax-free income for the business owner and/or successors.

What are some other ways to reduce taxes?

There are many tax-advantaged business succession techniques that give business owners a competitive edge. Qualified plans provide tax deductions in the current years, but they are not typically as tax-efficient for funding a buy-sell. More advanced planning strategies involving Section 79 and Section 162 plans can provide tax-free payments for the retiring executive or death benefits for family members, but limit the tax deductions when the plans are funded. There are very few options when owners seek up-front tax deductions, tax-free growth and tax-free payments to themselves and/or their heirs.

Bottom line

Advanced planning strategies allow business owners to fund business continuity plans more cost-effectively. Business owners should work with advisors who can design a plan that can convert extra taxable income into tax-free cash flow for retirement and/or the tax-free purchase of equity from the business owner’s estate.

Once the plan has been designed, experienced attorneys will draft legal documents to facilitate the tax-efficient plan funding. This integration of design, drafting and funding helps ensure effective implementation of the strategy as well as proper realization of benefits under a variety of scenarios. An experienced advisor should be able to help you quantify how planning costs are just a small fraction of the expected benefits. More important, these financial benefits bring peace of mind to the business owner, the owner’s family and to key executives. Great clarity and confidence results from having a business continuity plan that has been designed properly, drafted effectively and funded tax-efficiently.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

1031 and Done: The Collector’s Curse

Key Takeaways

·         Changes in the rules for personal property under §1031 will limit many collectors, but those changes don’t mean all sellers now have to realize tax on their sales.

·         The Federal long-term capital gains tax rate for real property is 20 percent, but it’s 28 percent for tangible personal property.

·         Add state income tax and the loss of itemized deductions for most tax payers, selling collectibles just got much more onerous….but you still have options.

 

The landmark 2017 Tax Cut and Jobs Act contains sweeping changes to the entire tax system. Corporate, personal and estate taxes have been revamped entirely. Taxpayers and their CPAs are scrambling to adapt to the new rules. Simply understanding the changes and working through the variations of scenarios as they play out is a monumental chore. One important change that’s not attracting much attention, despite its potentially significant impact, are the revisions to §1031. This code section refers to “like kind” exchanges of property.

Essentially, a properly executed §1031 exchange allowed a property owner to defer the recognition of a gain until the property that it was exchanged for was ultimately sold. For many investors, like kind exchanges have been a very smart method for swapping their way to significant gains by delaying the taxes the owe. In the past, like kind included both real property and personal property. While the majority of the value of §1031 exchanges were in real property, those who collect valuable assets such as fine art, collector automobiles and antiques also utilized the §1031 exchange to enhance their collections. And, while the Federal long-term capital gains tax rate for real property is 20 percent, for tangible personal property it is 28 percent. Add state income tax and the loss of itemized deductions for most tax payers, selling collectibles just got much more onerous.

What can collectors do?

Certainly, collectors are passionate about their collections and often buy or sell in the heat of the moment. While this may be necessary at times, there are still planning considerations that can be implemented, especially before a planned sale. First, there are several charitable techniques that could be considered. One option is a Flip Charitable Remainder Unitrust (Flip CRT). With this technique, the owner creates a special trust and transfers his or her collectible to the trust prior to any sales transaction taking place. The trust then sells the asset and receives cash from the sale. At the time of the sale the donor will receive a charitable income tax deduction based on a number of factors: The donor’s age, the payout rate of the trust, the cost basis of the asset transferred and several other technical factors.

Note, with personal property donated to these types of trusts the income tax charitable deduction is limited by what the owner paid for the item (cost basis) [  }not its fair market value (what it sells for). Further, the deduction for personal property is limited to 30 percent of the donor’s Adjusted Gross Income (AGI) in any given year. However, any unused deduction is available to be carried over for five additional years until it is fully utilized. In this transfer, there is no capital gains tax realized at the time of the sale. However, the donor no longer has access to the cash or the asset but rather will receive and income stream for life based on the what the property sold for and how the trust payout is structured.

Yet another opportunity for tax savings is the “young” Pooled Income Fund (PIF). Similar to the aforementioned Flip CRT, a PIF is a vehicle for avoiding the capital gains tax on the sale of personal property while creating a charitable income tax deduction. Unlike the Flip CRT, the PIF must be established and maintained by a public charity recognized under §501(c )(3). So, it is important to identify the charity that will cooperate with this complexity. One of the major advantages of the PIF strategy is the size of the charitable income tax deduction, which in most cases is many times larger than can be accomplished via a CRT.

The reasons for this are many and unnecessary to explain here. Just know that since the deduction is likely to be much larger, there is more planning flexibility. Consider, for example, that it might be possible to contribute only 50 percent of the asset or less, and still receive enough deduction to make it worthy of consideration. Indeed, with good planning, it may be possible to leave an income stream for the next generation after the donor is deceased--all while avoiding the long term capital gains tax completely.

Ultimately, money left in the CRT or the PIF will transfer to charity, so make sure you and your advisor do some analysis before entering into either of these arrangements. An additional, non-charitable strategy is the monetized installment sale. While not widely known, a monetized installment sale allows the seller to sell and defer taxes for 30 years while receiving more than 90 percent of the sales proceeds. Unlike the aforementioned charitable strategies, the monetized installment sale can take place even after an agreement to sell has been negotiated and agreed to--something that’s prohibited with charitable planning. And while there is no income tax deduction available, the seller does retain the funds for personal use.


Conclusion

While changes in the rules for personal property under §1031 will limit many collectors, they don’t mean that all sellers will now have to realize tax on sales. For those who own their collectibles for more than a year, the long term capital gains tax can be deferred or eliminated. To do so simply requires different planning and well informed advisors.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

 

Diversified Asset Management, Inc. - 2019 1st Quarter Newsletter

New Year's Resolution: Review Your Estate Plan

Before you ring in another New Year, you may want to take time out of your busy schedule to observe another annual ritual: a review of your estate plan. If you're like most people, you probably stuck your will and other documents in a drawer or a safe deposit box as soon as you had them drawn up-and have rarely thought about them since. But changes in your personal circumstances or other events could mean it's time for an update.

Good Riddance To The Alternative Minimum Tax

Perhaps the most despised federal levy is the alternative minimum tax, which Congress passed in 1969 to prevent the loophole- savvy ultra-wealthy from shortchanging Uncle Sam.

Over the years, AMT's reach expanded to include households with more than $200,000 in AGI (adjusted gross income) annually and two- earner couples with children in high- tax states.

Reduce Your Widow’s Tax Bill Materially Annually

This is a good time to consider converting a traditional individual retirement account into a Roth IRA. Tax rates are low but unlikely to stay that way. Here's a long- term strategy that takes advantage of the current tax policy and economic fundamentals - a tax-efficient retirement investment and avoids a new twist in the Tax Cut And Jobs Act that penalizes widows.

Giving More to Loved Ones- Tax Free

While it may be better to give than to receive, as the adage contends, both givers and receivers should be happy with the new tax law. The annual amount you can give someone tax-free has been raised to $15,000, from $14,000 in 2017.

Protect Yourself Against Spearphishing

The Russian conspiracy to meddle in the 2016 presidential campaign relied on a common scam called "spearphishing." While the history-making scam may sound sophisticated, this form of digital fraud is running rampant. Anyone using email is likely to be attacked these days. Here are some tips to protect yourself.

Sidestepping New Limits on Charitable Donations

If you think you're no longer allowed to deduct items like charitable donations on your income tax return, think again.

The new tax law doubled the standard deduction, slashing the number of Americans eligible to itemize deductions from 37 million to 16 million.

To read the full newsletter click here.

 

2018 Market Review from Dimensional

After logging strong returns in 2017, global equity markets delivered negative returns in US dollar terms in 2018. Common news stories in 2018 included reports on global economic growth, corporate earnings, record low unemployment in the US, the implementation of Brexit, US trade wars with China and other countries, and a flattening US Treasury yield curve. Global equity markets delivered positive returns through September, followed by a decline in the fourth quarter, resulting in a –4.4% return for the S&P 500 and –9.4% for the MSCI All Country World Index for the year.

The fourth quarter equity market decline has many investors wondering how equities may perform in the near term. Equity market declines of 10% have occurred numerous times in the past. The S&P 500 returned –13.5% in the fourth quarter while the MSCI All Country World Index returned –12.8%. After declines of 10% or more, equity returns over the subsequent 12 months have been positive 71% of the time in US markets and 72% of the time in other developed markets.[1]

If you would like the pdf version of the report click here.

Dami 2018 Market Review Graph 1.png

Exhibit 1 highlights some of the year’s prominent headlines in the context of global stock market performance as measured by the MSCI All Country World Index (IMI). These headlines are not offered to explain market returns. Instead, they serve as a reminder that investors should view daily events from a long-term perspective and avoid making investment decisions based solely on the news.

Market Volatility

Exhibit 2 shows the performance of markets subsequent to declines of 10%, 20%, and 30%. For each decline threshold, returns are shown for US large cap, non-US developed markets large cap, and emerging markets large cap stocks in the following 12-month period. While declines in equity markets may cause investor concern, the data provides evidence that markets generally have positive returns after a decline.

Dami 2018 Market Review Graph 2.png

The increased market volatility in the fourth quarter of 2018 underscores the importance of following an investment approach based on diversification and discipline rather than prediction and timing. For investors to successfully predict markets, they must forecast future events more accurately than all other market participants and predict how other market participants will react to their forecasted events.

There is little evidence suggesting that either of these objectives can be accomplished on a consistent basis. Instead of attempting to outguess market prices, investors should take comfort that market prices quickly incorporate relevant information and that information will be reflected in expected returns.

While we cannot control markets, we can control how we invest. As Dimensional’s Co-CEO Dave Butler likes to say, “Control what you can control.

WORLD ECONOMY

In 2018, the global economy continued to grow, with 44 of the 45 countries tracked by the Organization for Economic Cooperation and Development (OECD) on pace to expand. Argentina was the only country expected to contract.[2] While market participants may consider the economic outlook of a region, it is just one of many inputs that determine realized market performance.

Dami 2018 Market Review Graph 3.png



2018 MARKET PERSPECTIVE

Equity Market Highlights
Global equity markets, as measured by the MSCI All Country World Index, ended the year down –9.4%, with significant dispersion by country.

US equities generally outperformed other developed markets for the year, although they lagged other developed and emerging markets in the fourth quarter. The S&P 500 Index recorded a –4.4% total return for the year and –13.5% return in the fourth quarter.

Returns among other developed equity markets were negative. The MSCI World ex USA Index, which reflects non-US developed markets, was down –14.1% for the year and –12.8% for the fourth quarter, and the MSCI Emerging Markets Index fell –14.6% for the year and –7.5% for the fourth quarter. US small cap stocks, as measured by the Russell 2000 Index, returned –11.0% for the year.

Dami 2018 Market Review Graph 4.png

Impact of Global Diversification

While markets around the world generally had negative returns in the fourth quarter, the dispersion in their returns highlights the importance of global diversification during market declines. The MSCI All Country World ex USA Index (IMI) outpaced the S&P 500 for the quarter
(–11.9% vs. –13.5%). Given the strong returns of US markets through September, however, the US equity market was one of the stronger performing markets for the year, ranking seventh out of the 47 countries in the MSCI All Country World Index (IMI).

The S&P 500 Index’s –4.4% return marked the end of nine consecutive positive annual returns. Despite the negative return this year, the S&P 500 has still produced a 13.1% annualized return for the 10 years ending December 31, 2018.

When considering individual countries, 46 out of 47 countries were down for the year. Using the MSCI All Country World Index (IMI) as a proxy, no countries posted positive returns among developed markets, and only Qatar managed a positive return among emerging markets. As is typically the case, country-level returns varied significantly. In developed markets, returns ranged from –24.1% in Belgium to 0.0% in New Zealand. In emerging markets, returns ranged from –41.3% in Turkey to 27.1% in Qatar—a spread of almost 70%. Large dispersion among country returns is common, with the average spread in emerging markets over the past 20 years of 90%.[3] Without a reliable way to predict which country will deliver the highest returns, this large dispersion in returns between the best and worst performing countries again emphasizes the importance of maintaining a diversified approach when investing globally.

Dami 2018 Market Review Graph 5.png

 To emphasize this point, Israel went from being the worst performer in developed markets in 2017 (10.4%) to the second-best performer in 2018, returning –3.6%. Likewise, Qatar went from being the second worst performing emerging market country (–12.5%) in 2017 to being the best performer in 2018.

When considering investing outside the US, investors should remember that non-US stocks help provide valuable diversification benefits, and that recent performance is not a reliable indicator of future returns. It is worth noting that if we look at the past 20 years going back to 1999, US equity markets have only outperformed in 10 of those years—the same expected by chance. We can examine the potential opportunity cost associated with failing to diversify globally by reflecting on the period in global markets from 2000­-2009, commonly known as the “lost decade” among US investors. While the S&P 500 recorded its worst ever 10-year cumulative total return of –9.1%, the MSCI World ex USA Index returned 17.5%, and the MSCI Emerging Markets Index returned 154.3%. In periods such as this, investors were rewarded for holding a globally diversified portfolio.

Currencies

Currency movements detracted from US dollar returns in 2018 for non-US dollar assets. The strengthening of the US dollar vs. weakening of non-US currencies had a negative impact on returns for US dollar investors with holdings in unhedged non-US dollar assets, and detracted 3.5% from the returns as measured by the difference in returns between the MSCI All Country World ex USA IMI Index in local returns vs. USD. The US dollar strengthened against most currencies, including the euro, the British pound, and the Canadian dollar, and weakened against the Japanese yen.

As with individual country returns, there is no reliable way to predict currency movements. Investors should be cautious about trying to time currencies based on the recent strong or weak performance of the US dollar or any other currency.

 Broad Market Index Performance

In 2018, the MSCI Emerging Markets Value Index (IMI) outperformed its growth counterpart (–11.5% vs.
–18.4%). In developed markets, however, this was not the case. The Russell 3000 Value Index underperformed the Russell 3000 Growth Index (–8.6% vs. –2.1%) and the MSCI World ex USA Value Index (IMI) underperformed its growth index counterpart (-15.6% vs. –13.8%). Small cap stocks generally underperformed large cap stocks globally. For example, the Russell 2000 Index returned –11.0% relative to –4.8% for the Russell 1000 Index. Similarly, the MSCI World ex USA Index outperformed its small cap counterpart (–14.1% vs. –18.1%), and the MSCI Emerging Markets Index outperformed its small cap counterpart (–14.6% vs. –18.6%).

 The mix of relative performance of value vs. growth stocks within and across regions this year serves as a reminder of the importance of integrating premiums when designing and managing portfolios. Within US equity markets, when at least one of the size, value, and profitability premiums has been negative in a given year, at least one of the other factors was positive 81% of the time.[4] Positive premiums can contribute to relative returns during time periods when other premiums are negative.

US Market

In the US, small cap stocks underperformed large cap stocks, and value stocks underperformed growth stocks using Russell indices. The Russell 2000 Index declined –11.0% for the year vs. –4.8% for the Russell 1000. The Russell 3000 Value Index returned -8.6% in 2018 vs. –2.1% for the Russell 3000 Growth Index. The variation in returns between these indices is within historical norms. Since 1979, there has been an annual return difference of 6% or greater 60% of the time.

Developed ex US Markets

In developed ex US markets, small cap stocks underperformed large cap stocks and value stocks underperformed growth stocks. Despite underperformance in 2018, over both five- and 10-year periods, small cap stocks, as measured by the MSCI World ex USA Small Cap Index, have outperformed large caps, as measured by the MSCI World ex USA Index. Growth stocks, as measured by MSCI World ex USA Growth Index (IMI), returned –13.8%, outperforming value stocks, which returned –15.6% in 2018, as measured using the MSCI World ex USA Value Index (IMI).

Emerging Markets

In emerging markets, small cap stocks, as measured by the MSCI Emerging Markets Small Cap Index, underperformed large cap stocks, as measured by the MSCI Emerging Markets Index. However, over the past 10 years, small caps returned an annualized 9.9%, outperforming large caps, which returned 8.0%.

 Value stocks returned –11.5% as measured by the MSCI Emerging Markets Value Index (IMI), outperforming growth stocks, which returned –18.4% using the MSCI Emerging Markets Growth Index (IMI). This was the sixth largest outperformance of value over growth in emerging markets since 1999.

The complementary behavior of size (small vs. large) and relative price (value vs. growth) in emerging markets in 2018 is a good example of the benefits of diversification. While small cap stocks underperformed, diversified portfolios were buoyed by outperformance among value stocks. This integration can increase the reliability of outperformance and mitigate the impact of an individual asset group’s underperformance.

Despite recent years’ headwinds, the size, value, and profitability premiums remain persistent over the long term and around the globe. It is well documented that stocks with higher expected return potential, such as small cap and value stocks, do not realize outperformance every year. Maintaining discipline to these parts of the market is the key to effectively pursuing the long-term returns associated with size, value, and profitability.

Fixed Income

Over the full year, the return on the US fixed income market was relatively flat; the Bloomberg Barclays US Aggregate Bond Index returned 0.0%. Non-US fixed income markets posted positive returns in 2018, contributing to the return of the Bloomberg Barclays Global Aggregate Bond Index (hedged to USD) at 1.8%.

Yield curves were upwardly sloped in many developed markets for the year, indicating positive expected term premiums. Realized term premiums were negative in the US as long-term maturities underperformed their shorter-term counterparts and positive in developed markets outside the US. For example, the FTSE Non-USD World Government Bond Index 10+ (hedged to USD) returned 4.4% for the year vs. 3.0% for the 1-10 Index.

Credit spreads, which are the difference between yields on lower quality and higher quality fixed income securities, widened during the year, as measured by the Bloomberg Barclays Global Aggregate Corporate Option Adjusted Spread. Realized credit premiums were negative both globally and in the US, as lower-quality investment-grade corporates underperformed their higher-quality investment-grade counterparts. Treasuries were the best performing sector globally, returning 2.8%, while corporate bonds returned –1.0%, as reflected in the Bloomberg Barclays Global Aggregate Bond Index (hedged to USD).

In the US, the yield curve flattened as interest rates increased more on the short end of the yield curve relative to the long end. The yield on the 3-month US Treasury bill increased 1.06% to end the year at 2.45%. The yield on the 2-year US Treasury note increased 0.59% to 2.48%.[5] The yield on the 10-year US Treasury note increased 0.29% during the year to end at 2.69%. The yield on the 30-year US Treasury bond increased 0.28% to end the year at 3.02%. 

In other major markets, interest rates decreased in Germany and Japan, while they increased in the United Kingdom. Yields on Japanese and German government bonds with maturities as long as 10 years finished the year in negative territory.

Conclusion

2018 included numerous examples of the difficulty of predicting the performance of markets, the importance of diversification, and the need to maintain discipline if investors want to effectively pursue the long-term returns the capital markets offer. The following quote by John “Mac” McQuown, a Dimensional Director,[6] provides useful perspective as investors head into 2019: 

“Modern finance is based primarily on scientific reasoning guided by theory, not subjectivity and speculation.

Finally, if you would like the pdf version of the report click here.

[1] Declines are defined as points in time, measured monthly, when the market’s return since the prior market maximum has declined by at least 10%. Declines after December 2017 are not included, but subsequent 12-month returns can include 2018 returns. Compound returns are computed for the 12 months after each decline observed and averaged across all declines for the cutoff. US markets (1926–2018) are represented by the S&P 500 and Developed ex US markets (1970–2018) are represented by the MSCI World ex USA Index.

[2] OECD Real GDP Forecast, 2019. Accessed Jan. 4, 2019.
https://data.oecd.org/gdp/real-gdp-forecast.htm#indicator-chart

[3] Source: MSCI country investable market indices (net dividends) for each country listed. Does not include Greece, which MSCI classified as a developed market prior to November 2013. Additional countries excluded due to data availability or due to downgrades by MSCI from emerging to frontier market. MSCI data © MSCI 2019, all rights reserved. Past performance is no guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio.

[4] Measured from 1964 through 2017. In US dollars. Size premium: Dimensional International Small Cap Index minus the MSCI World ex USA Index (gross dividends). Relative price premium: Fama/French International Value Index minus the Fama/French International Growth Index. Profitability premium computed by Dimensional using Bloomberg data: Dimensional International High Profitability Index minus the Dimensional International Low Profitability Index. Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Dimensional indices use Bloomberg data. Fama/French indices provided by Ken French. MSCI data copyright MSCI 2019, all rights reserved. The information shown here is derived from such indices. Index descriptions available upon request. Eugene Fama and Ken French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results.

[5] Source: The US Department of the Treasury

[6] Dimensional Director refers to the Board of Directors of the general partner of Dimensional Fund Advisors LP.

Sources:

Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. S&P and Dow Jones data © 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. MSCI data © MSCI 2019, all rights reserved. ICE BofAML index data © 2019 ICE Data Indices, LLC. Bloomberg Barclays data provided by Bloomberg. Indices are not available for direct investment; their performance does not reflect the expenses associated with the management of an actual portfolio.

Past performance is no guarantee of future results. This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell securities. There is no guarantee an investing strategy will be successful. Diversification does not eliminate the risk of market loss.

Investing risks include loss of principal and fluctuating value. Small cap securities are subject to greater volatility than those in other asset categories. International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks. Sector-specific investments can also increase these risks.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks, including changes in credit quality, liquidity, prepayments, and other factors. REIT risks include changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and creditworthiness of the issuer.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

What is Good Advice from a Wealth Manager? Part 2

5 types of advice that you should be receiving from your advisor

By Robert J. Pyle, CFP®, CFA

Key Takeaways

·  Good advice is timely, holistic, personalized, grounded in empirical research and adheres to a high fiduciary standard.

·  Financial advice isn’t worth much if it can’t help you enjoy life, protect the ones you love and reassure you in times of trouble.

·  It’s not about making more money; it’s about having understanding the multifaceted parts of your financial life and the people and causes most important to you.

In Part 1 of this post, we explored differences between general investment advisors and truly comprehensive wealth advisors. We also walked through the five-step process that only wealth advisors are equipped to use in order to understand what makes their clients tick and serve them extremely well.

As mentioned last time, advice is cheap. But, good advice is worth its weight in gold. So, what constitutes good advice? Here are five key pillars of advice that we use here at Diversified Asset Management:

1. Good advice is timeless … and timely. At its essence, good financial advice never goes out of style. Its principles are permanent: It should be brave and true, and meant for you. At the same time, good advice must remain relevant in an ever-changing world. Your adviser should be able to help you embrace promising new opportunities and insights while avoiding the false leads and frightening challenges that are as formidable as ever in today’s markets.

2. Good advice looks at the parts … and the whole. Good financial advice helps you manage your investment portfolio and preserve or increase your wealth according to your goals. It also helps you plan, implement and manage your myriad related interests: taxes, insurance policies, estate planning paperwork, philanthropic pursuits, executive compensation, real estate holdings, business activities and more. Beyond that, what are your goals? How can you relate your total wealth to your relationships, resources and realities? Good financial advice should contain a comprehensive understanding of the multifaceted parts of your financial life and the people and causes most important to you.

3. Good advice is personalized … and persistent. Good financial advice is essential for making good decisions about your money, your interests and your life. It’s about being in a relationship with an adviser who is there for you, not only during the promising planning stages when everything makes sense, but when your resolve is being sorely tested in turbulent markets, or when life’s events or personal setbacks knock you off course. Good advice helps you find your way when you’ve been sideswiped by the unexpected and keeps you on course when seas are calm.

4. Good advice is wise … and compassionate. Good financial advice is grounded in empirical research, structured process and informed experience. That being said, financial advice is nothing if it can’t bring you joy in life, or help you protect the ones you love and reassure you in times of trouble. To provide this type of advice, an adviser must not only counsel you; he or she must be able to listen to you—really listen to you. This brings us to our most important point…

5. Good advice is in your highest financial interests, period. Above all, good advice should always and only be in your highest financial interest, even when it means the adviser must take a hit to deliver it. This is where things get particularly confusing. Around the world, various advocates (including ourselves) are pressing for legislation to govern best-interest advice. Such efforts are unfailingly met with resistance from those who would undermine this sensible ideal. As a result, the financial advice you choose will probably always call for a “buyer beware” perspective. As Vanguard Group founder John Bogle has wryly observed, “There are few regulations that smart, motivated targets cannot evade.”

Conclusion

We look forward to a world in which good advice reigns supreme. Until then, we hope you’ll be open to good advice when you hear it – the kind that sees you through turbulent times, and keeps you on the right path toward your financial and life goals. If this advice sounds a little different from the status-quo stock tips or market-timing tactics you may be used to hearing, that’s because it is.

May we offer you additional advice about good advice? We hope you’ll schedule a second opinion discovery call.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

What is Good Advice from a Wealth Manager? Part 1

Investing should be just a small part of the conversation                                    

By Robert J. Pyle, CFP®, CFA

Key Takeaways

·  All kinds of people claim to be wealth advisors--research show only out of 16 really are.

·  Does your advisor have the ability to see your entire financial picture and how your values, goals and people close to you fit into that picture?

·  A wealth manager should be a personal CFO/financial consigliere who always has your best interests in mind.

·  Before committing to working with an advisor, be 100-percent clear how they get paid.

In today’s climate of one-page financial plans, bargain-basement fund pricing and automated investment tools, you may wonder if it’s still necessary to have a human financial adviser. If you’re like most successful people, it is. As an accomplished business owner, professional or retiree, you financial life is too complex to be robo-cized and investments are just a small part of your overall picture.

It goes without saying that you want an advisor who is a true fiduciary; someone who always has your best interests in mind. You want someone who is not under pressure to earn commissions and who is free to recommend the very best products and solutions that meet your needs—not simply the ones that his or her employer is pushing at the moment.

All kinds of people can call themselves wealth advisors these days, but you’ll probably find that advisors with CFP®, CFA or CPA after their names. Those credentials aren’t just professional “vanity plates.” They’re not easy to obtain and require a level of skill, training, independence and fiduciary responsibility that a stock picker, investment consultant or algorithm isn’t required to have.


Also make sure you understand how your advisor is paid. True wealth advisors are paid on a fee-only model, rather than a commission model. In other words, they earn a fixed percentage of your assets under their management and do not get paid a commission each time you make a trade. If they help you grow your wealth then they earn more along with you. If your wealth declines under their guidance, then they earn less. Compare that to a commission based advisor (human or machine) that gets paid whenever you buy or sell an asset, regardless of whether that investment worked out for you.

Diversified Asset Management Financial Advice Model.JPG

Commission-based advisors are still capable of making smart investment recommendations, but they don’t have a specific investment philosophy or for each client they serve. They frequently change philosophies when new ones come out each week from the “people upstairs.”

Whether human or machine, advice providers at the major financial institutions don’t normally spend time educating their clients about their philosophy or provide them with unique ideas to help them build their wealth. Their business model generally doesn’t allow them to invest the time in doing what’s in the very best interests of each client—they just need to make sure their recommendations are “suitable.”

As Nobel Laureate Eugene Fama once observed: “Academic research produces about three to five good ideas every 20 years. However, the financial industry packages and sells about 10 new ideas per week.” Note the emphasis on “new” rather than “good.


Wealth Managers/Trusted Advisors using the fee-only model  

By contrast, wealth managers use a disciplined process to interview a prospective client and are more selective about who they take on. The client is always at the top of the model and wealth managers determine the best solutions for each client using an in-depth method that I’ll share with you shortly. Of course that takes a special type of skill, independence and expertise. Research from CEG Worldwide shows that only one out of every 16 financial professionals (6.6%) are truly consultative wealth manager

If you’re still not sure how a wealth manager works with clients, let’s take a closer look that the process they follow. Here’s how it works at our firm:

Wealth+Management+Consulting+Process-DAMI+new+version.jpg

1. Discovery Meeting. At this initial meeting with a prospective client, a wealth advisor asks detailed questions to find out what is important to the prospective client in terms of values, goals, relationships, assets, advisors, interests and—very important—the extent to which they want to be involved in the process. Some clients want to be very hands on and others want to be hands-off. No two client situations are the same and a truly consultative wealth advisor can tailor his or her approach to each unique client preference.

2. Investment Plan (IP). The next step is to take the information from the Discovery Meeting, analyze it and craft an IP. The investment plan looks at where the prospective client is today in their personal and financial life, where they want to be ideally and what the gaps are between they are now and where they want to go. A truly consultative wealth advisor presents the investment plan at the Investment Plan Meeting and offers solutions to close that gap—solutions they are equipped to implement.

3. Mutual Commitment Meeting. If the prospective client is satisfied with the IP, then we move toward a meeting at which we mutually agree to work together. This is when the prospective client signs the paperwork to become a bona fide client.

4. The 45-Day Follow-up Meeting occurs about 1-1/2 months after the client has been on-boarded. At this very important check-in meeting, the trusted advisor reviews all the paperwork that a client has received and updates the client on the progress the firm has made toward the clients goals so far.

5. Regular Progress Meetings occur at a frequency with which the client is most comfortable. Some clients only want to meet for an annual or semi-annual checkup. Others prefer more frequent contact, often to bounce ideas off their trusted advisors—they don’t necessarily have to meet only when there is a crisis or major change in life circumstances. The trusted advisor and client review the progress and implementation of the wealth management plan and make mid-course corrections as needed. The meetings are generally built into the advisor’s annual management fee, so clients don’t feel like the “advice meter” is always ticking.

 

In addition to the five steps above, true wealth managers create a financial plan and an advanced plan that includes a comprehensive evaluation of the client’s entire range of financial needs and recommendations for going forward. The financial plan typically looks at where clients are now and what each one needs to do in order to retire on their own terms. The advanced plan focuses on wealth management items such as maximizing wealth, protecting wealth and tax-advantaged ways to give some of their wealth away to deserving heirs and causes.

If nothing else, your wealth manager should be your personal CFO/financial consigliere—a trusted advisor who functions as the noise cancelling headphones in your life. He or she should be someone who can help you filter out the noise of dramatic market swings and screaming headlines from the news media and the internet. A wealth advisor understands that your ultimate goal is not to make more money in the market; it’s to get to your destination in the most relaxed manner as possible and enable you to enjoy the life that your money intended you to live.

Conclusion

Advice is cheap. Good advice is worth its weight in gold. In Part 2 of this post we’ll look at what constitutes good advice from wealth advisors who are truly fiduciaries. If you or someone close to you is not sure about where to turn for financial advice, please consider scheduling a complimentary second opinion discovery call.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

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The Value of Multigenerational Family Meetings

If you’ve amassed sizable wealth, or are on the right path and getting there, it may be time to consider how to pass on some of that money to children and grandchildren—without creating big problems that could harm their futures and destroy family harmony.

The fact is, family wealth—how it’s managed, transferred and used—can generate major drama among family members. As wealth grows, so does the potential for that money to foment conflicts and bad financial decisions that can reduce a family’s financial position and even ruin intra-family relationships forever.

The good news: We can look to the strategies used by today’s ultra-wealthy families to avoid or mitigate such negative outcomes—and find ways to adopt similar strategies in our own families.

One of the most effective tools harnessed by the ultra-affluent is the family meeting—which is used to educate heirs and potential heirs about sound financial decision-making, to identify shared family financial values and to maintain (and grow) family wealth in a unified manner.

Click here to read more:

The Value of Multigenerational Family Meetings

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

The Importance of Personal Umbrella Policies

What would happen if you or your child caused a car accident that resulted in serious injuries or the deaths of others?

How would you pay for the treatment and damages of someone who was hurt in your home and claimed negligence? What happens when they claim to have suffered greatly because of the injury?

What if your dog was attacked by a stranger on your property and bit the person in self-defense—but you were still sued?

These are questions that anyone could face. However, one component of a wealth protection plan that is often overlooked or underused—even by the affluent—is the umbrella policy.

Here’s why an umbrella policy can make sense if you have significant assets.

The Importance of Personal Umbrella Policies

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Eye On Money November/December 2018

We invite you to check out the new issue of Eye On Money! Inside are articles on:                                      

Year-end tax planning. You may be able to reduce your 2018 taxes if you act soon. Several tax-minimization tips are presented here. For specific advice, please consult us before the end of the year.

How to document your charitable gifts. Find out what records you’ll need to keep if you want to claim a tax deduction for your charitable gifts.

Giving the gift of education. Don’t miss this one if you want to help a loved one save for college.

The taxation of alimony to change in 2019—but not for everyone. Here’s a summary of what you need to know if you currently pay or receive alimony, or are considering a divorce.

Also in this issue, you can check out how diversification can help manage risk and learn why credit reports matter. Plus, you can vicariously explore one of the world’s hottest tourist destinations—Iceland, choose which special exhibitions you want to see at major museums, and find out how much you know about international travel destinations.

 

Please let us know if you have questions about anything in Eye On Money.

Eye On Money November/December 2018

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Eye On Money September/October 2018

We invite you to check out the new issue of Eye On Money! Inside are articles on:               

Financial tips for your 50s and 60s that can help you build wealth and prepare for a financially secure retirement.

529 plans. They are not just for college anymore! Don’t miss this article if you plan to use money from a 529 plan to pay for grades K-12 tuition.

Roth IRAs. With lower income tax rates in place, this may be an ideal time to convert to a Roth IRA.

Asset location. Dividing your assets between your taxable investment accounts and retirement accounts in a tax-smart manner may boost your after-tax returns.

Also in this issue, you can check out how to prepare financially for a health crisis, learn what to consider when choosing a donor-advised fund sponsor, and review five things you should know about the new federal estate tax exemption. Plus, you can take an armchair tour of Arches National Park, learn where to find the darkest skies and best star-gazing, and see how much you really know about South America.       

Please let us know if you have questions about anything in Eye On Money.

­Eye On Money September/October 2018

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Insightful Questions That Can Ramp Up Your Success

Want to see some amazing results in your life? Ask questions and then listen well. We have discovered that a disproportionate number of the most successful people consistently and systematically use an approach known as insightful questioning to build rapport with other people in ways that generate much better outcomes.

Here’s how they engage in insightful questioning—and use it to generate truly impressive success.

The importance of insightful questioning

Being adept at using carefully chosen insightful questions serves a number of purposes:  

  • It enables you to be more effective at garnering useful and important information from other people—such as their goals and the drivers behind those goals. Armed with that information, you can potentially find ways to work together that might not have been obvious otherwise.
  • It facilitates rapport between you and other people because it seeks to create deeper levels of understanding of all those involved.
  • It’s a powerful way to connect with other people and provide you with information that you can use to further your own agenda—often while simultaneously helping them, too.

Be an engaged listener, too

Asking insightful and thought-provoking questions ultimately won’t help you learn new information or build rapport if you tune out when the other person answers. You must also be adept at deep listening—focusing intently on the person talking through fully present, nonjudgmental listening.

When you deeply listen to someone, it’s almost as though you are suddenly standing next to the person and seeing the world as he or she sees it. You become a comrade or partner. Since most people rarely have the experience of being deeply listened to, this experience of camaraderie is equally rare. The person you’re interacting with will feel more bonded to you as a result.

How do you do it? Start by creating by saying to yourself, “I am going to have a great conversation with this person, and we will both have a great experience.” With so many thoughts buzzing around in your head all day, you must intentionally commit to being as present as possible with the person in front of you. By keeping this intention foremost in your mind, you will greatly increase your odds of success.

Then listen on the surface to the information that the person provides. It’s important that you capture this surface information as accurately as possible. But also listen for the person’s thoughts, feelings, values and needs—which he or she might not come right out and say directly.

Click here to read more:

Flash Report: Insightful Questions That Can Ramp Up Your Success

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Maximizing Small-Business Tax Deductions

Maximizing small-business tax deductions

How small-business owners can take advantage of Section 199A

The Tax Cuts and Jobs Act (TCJA) passed in December 2017 offers a wealth of opportunities to small-business owners. Among the most notable provisions is Section 199A, which provides for qualified business income (QBI) deductions. These deductions are available to taxpayers who are not corporations, including S corporations, partnerships, sole proprietorships and rental properties.

While Section 199A provides a huge tax break for small-business owners, determining who is qualified can be complicated. In addition to eligibility requirements, there are income thresholds after which deductions are phased out. Here’s a look at who is eligible to use Section 199A, as well as strategies business owners above phase-out thresholds can use to recapture QBI deductions. 

Are you eligible?           

In general, small-business owners may qualify for QBI deductions if they meet one of the following criteria:

  •  No matter the type of business, if a business owner’s taxable income falls below $157,500 for single filers or $315,000 for joint filers, that business owner is eligible for a QBI deduction. That deduction is equal to the smaller of 20% of their qualified business income or 20% or their taxable income.

  • Businesses that offer specified service—such as lawyers, accountants, athletes, financial services, consultants, doctors, performing artists, and others with jobs based on reputation or skill—may have deductions phased out if they make too much money. If your income is above $207,500 for single filers or $415,000 for joint filers, you can no longer claim the QBI deduction.

  • If you own a business that is not a service business or a specialized trade, the QBI deduction is partially phased out if your taxable income is above $157,500 for single filers or $315,000 for joint filers. The deduction is limited to the lesser of either 20% of qualified business income or the greater of the following: 50% of W-2 wages paid, or the sum of 25% of W-2 wages paid by the business generating the income plus 2.5% times the cost of depreciable assets

The retirement solution

If your income is above the phase-out limits, you can preserve your full deduction by making smart use of retirement plans. Here’s a look at a few examples of ways to strategically employ retirement plans to reduce your income and recapture a QBI deduction:

Example 1: A couple, age 50, with a specified service business

A couple, each 50 years old, has a specific service business in the form of an S corp that pays W-2 wages of $146,000 and pass-through income of $254,000, for a total income of $400,000. The couple claims the standard deduction of $24,000, making their adjusted gross income $376,000. Because of their high earnings, the couple’s QBI deduction is only $19,812 due to QBI phase-outs. Their total income is  $356,188.

The couple can capture their full QBI deduction by setting up and funding a 401(k) plan. They can set up an individual 401(k) plan, deferring $24,500 as an employee contribution and contributing 25% of salary, or $36,500, as a profit sharing contribution. The deferral and profit sharing max out their individual 401(k) plan with a total contribution of $61,000. In this way, their W-2 wages are reduced to $121,500, and their pass-through income is reduced to $217,500 after the profit sharing contribution. Their total income after the standard deduction is $315,000.

As a result, the couple can claim their full QBI deduction of $43,500 (20% of 217,500), and their income is now $271,500. With a $61,000 contribution to a 401(k), the couple was able to effectively reduce their income by $84,688. In other words, this couple was able to get 1.39 times the income reduction for every dollar they contributed to a retirement plan. 

Example 2: A couple, age 55, with a higher-income specified service business,

Business owners who earn higher income may need to deploy additional retirement plans to capture their QBI deduction. Consider an S corp that pays W-2 wages of $146,000 to the couple, and pass-through income of $317,500 for a total income of $463,500. They claim the standard deduction of $24,000 and their adjusted gross income becomes $439,500. The couple does not receive a QBI deduction because their high income results in a complete phase-out. Their total income therefore remains $439,500.

However, this couple can still take advantage of a QBI deduction by setting up an individual 401(k) plan and deferring $24,500 as an employee contribution. They also can add a defined benefit (DB) plan or a cash balance (CB) plan and contribute even more to a retirement plan. Suppose they set up a DB or a CB plan and the actuaries calculated they could contribute $100,000 to the plan for a total combined contribution of $124,500. In this case, their W-2 wages are reduced to $121,500 and their pass thru income is $217,500.

The couple’s total income after the standard deduction is $315,000. Their QBI deduction is $43,500 (20% of $217,500) and their income is now $271,500. With $124,500 in contributions to their individual 401(k) plan and DB or CB plan the couple received a $168,000 income reduction. This couple was able to get 1.35 times of income reduction for every dollar they contributed to a retirement plan.  

This material is for educational purposes and is not intended to provide tax advice. Talk to your tax professional to find out how QBI deductions may apply to your financial situation.

To learn more about how to maximize your QBI deduction, please email us at rpyle@diversifiedassetmanagement.com or call (303) 440-2906.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice

What Is Evidence-Based Investing?

How Do Traditional Active (TA) and Evidence-Based (EB) Investors Differ?

They See the Future Differently.

They Work on Different Timelines.

They Are Guided by Different Determinants.

They Define “Success” Differently.

They Use Risk Differently.

They Consider Costs Differently.

Click here to read more:

What Is Evidence-Based Investing?

Evidence Based Investing - Diversified Asset Management Inc.jpg

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

The Tao of Wealth Management

July 2018

The path to success in many areas of life is paved with continual hard work, intense activity, and a
day-to-day focus on results. However, for many investors who adopt this approach to managing their wealth, that can be turned upside down.

The Chinese philosophy of Taoism has a phrase for this: “wei wu-wei.” In English, this translates as “do without doing.” It means that in some areas of life, such as investing, greater activity does not necessarily translate into better results.

In Taoism, students are taught to let go of things they cannot control. To use an analogy, when you plant a tree, you choose a sunny spot with good soil and water. Apart from regular pruning, you let the tree grow.

Click here to read more:

The Tao of Wealth Management

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Flash Report - Savvy Negotiating: To Get the Moon, Ask for the Stars

One key way to build serious wealth—whether in a business or your everyday life—is to effectively and consistently negotiate deals that are good for you and your bottom line. Ideally, everyone walks away from a negotiation feeling good about the outcome—a win-win scenario. But ultimately, to be successful you must achieve your minimum goals and preferably a whole lot more.

Trouble is, it’s common for people to end up failing to get what they want due to how they approach negotiations right from the start—from the first declarations of their terms. Here’s how you can avoid that negative outcome and get the results you truly want when hashing out a deal or arrangement with another party.

Start with your goals

Clarity about goals is job one. In any negotiation, you will be well-served by being quite clear about what you want to walk away with. Most people in negotiations have a range of goals, and it’s important you specify the top and bottom of the range.

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Savvy Negotiating To Get the Moon, ask for the Stars-Flash Report

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Flash Report -The Super Rich Stress Test Their Financial Plans—and So Should You!

The Super Rich (those with a net worth of $500 million or more) who have family offices typically engage a sizable lineup of professional advisors to help them create and implement financial plans. To help ensure those plans are both state-of-the-art as well as in line with their needs and wants, many of them regularly “stress test” these plans.

Here’s why you should join them in that effort—even if you’re not nearly as wealthy.

Asking “What if?”

Stress testing financial plans can be a very smart way to help make certain that the plan will deliver as promised. The fact is, financial plans that might look great on paper all too often prove to be much less impactful once they are implemented. It is not uncommon for there to be unintended consequences that can even derail one’s agenda.

At heart, stress testing is when you ask, “What if …?” about a variety of areas of a financial plan you have or are considering. 

Click here to read more:

The Super Rich Stress Test Their Financial Plans—and So Should You!-Flash Report

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

 

Flash Report - Want to Promote Family Entrepreneurship? Consider a Family Bank

A key objective among many single-family offices serving Super Rich families (those with a net worth of at least $500 million) is to enable future generations of family members to build their own wealth and create their own entrepreneurial legacies.

With that in mind, the Super Rich are embracing ways to develop the business acumen of inheritor family members—as well as ways to support them in forming new ventures of their own.

One way the Super Rich are making that happen is through family banks. And increasingly, families that aren’t as wealthy as the Super Rich are using these banks as well.

A way to generate family wealth—and family financial intelligence

A family bank is a formal legal entity a family sets up, with rules that govern how family members can access funds to start or support business ventures as well as how those family members are expected to pay back that money.

Family banks are designed to bring a level of structure, professionalism and accountability when providing money to family members to fund initiatives. As such, they can help instill financial intelligence, financial responsibility and financial values in family members—while also helping to avoid accusations of favoritism in families with multiple children.

Click here to read more:

Want to Promote Family Entrepreneurship Consider a Family Bank-Flash Report

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Flash Report - Three ‘Spy Secrets’ That Can Protect You, Your Family and Your Business

Imagine yourself in a vintage tuxedo, sipping a “shaken, not stirred” martini as you make eye contact across the bar with a beautiful secret agent who is about to covertly hand you a dossier with information that will help prevent World War III.

Okay—that’s almost certainly never going to happen to you. But you can use some of the same strategies employed by professional spies and operatives to prevent criminals from harming you, your family and your company.

These strategies come courtesy of Jason Hanson—a former CIA officer who spent nearly a decade at the agency. He then founded a business, Spy Escape & Evasion, to teach people how to be safe using insider spy tactics and wrote The New York Times best-selling book Spy Secrets That Can Save Your Life.

Secret #1: Run an SDR—a surveillance detection route

The SDR is a powerful way to make sure that you’re not being followed by a predator.

Here’s how it works for intelligence operatives. Because they are almost always being watched, they can’t simply drive to a meeting with someone and get handed an envelope of secrets. So an operative might go to Starbucks, go to the gym, go shopping and do other tasks hours before the scheduled meetup. “If I saw the same person or same car in all those spots, I knew I was being surveilled and I would abort the meeting,” says Hanson.

To see how you can apply that technique in your day-to-day life, Hanson offers a few examples.

Click here to read more:

Three “Spy Secrets” That Can Protect You, Your Family and Your Business-Flash Report

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Flash Report - What’s Your High-Net-Worth Personality?

Here’s why you need to know:

As a successful person with big goals, you require truly valuable financial advice that maximizes your ability to achieve your most important personal and professional financial objectives.

That means you need to work with professionals who connect with you. Who relate to you. Who understand you well enough to really “get” what you want your money to accomplish and why.

To get advice that works, it’s important to understand your own high-net-worth personality so you can select and work with advisors who are an ideal match.

What is a high-net-worth personality, anyway?

High-net-worth (HNW) psychology is all about understanding what the affluent want from the professionals they work with, as well as the “how” and “why” behind their attitudes and decisions about their money. Developed in the late 1990s, HNW psychology has been verified through the study of thousands of wealthy individuals. It’s also been adopted by elite, forward-thinking financial advisors and other professionals serving affluent individuals and families.

 

Click here to read more:

What’s Your High-Net-Worth Personality-Flash Report

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.

Maximizing your wealth: “Should I pay cash or finance my cars?”

In an earlier BizWest article, “Investors shouldn’t take the path of least resistance,” I shared several scenarios in which the easy way isn’t always the best way to maximize your wealth. I’ve got one more scenario to cover today: If you’ve got the money available, it’s easier to buy your cars with cash instead of on credit. But which is the wiser way for your wallet in a low-rate environment?

Contrary to your initial “neither a borrower nor a lender be” instincts, the current answer is likely to be: Take the credit … especially if it’s available at zero percent. One need only scan the car dealers’ ads to see that zero percent financing is a frequent incentive these days for basic and luxury vehicles alike.

Before we consider the choice empirically, think about it theoretically. If someone is offering you anything at zero percent, you’re basically being invited enjoy whatever it is you’ve purchased before you have to pay for it. As long as you have the discipline to let those dollars earn a little interest or a few investment returns until payment is due, when would that not play out in your favor?

With that in mind, let’s explore a few scenarios and make sure the numbers jive with the logic.

A typical (simplified) choice current car buyers face is as follows: Do you want to pay cash upfront in exchange for a discounted sticker price? Or would you rather take a zero percent or low-interest loan instead of the discount?

The specific dollar amounts don’t really matter. Whether the choice involves tying up $10,000, $50,000 or $100,000 in an automobile … or keeping the same amount in your pocket to save or invest during the time you own the vehicle, the math and its relative outcomes are the same.

The essential question thus becomes: At what points do the scales tip one way or the other between cash or credit? I’ve done some math on that, assuming a six-year timeframe for all comparisons. That is, each loan is a six-year loan, and the saving/investment periods are eight years. Cars are replaced every 8 years over the next 32 years.

Scenario One: A zero percent loan with kept assets invested at 6%. Let’s imagine you took a zero percent loan and invested the cash that would otherwise have gone to the car purchase into the stock market. Fortune smiles on your investments and you earn 6% annualized market returns across the next six years. For paying upfront cash to be the better bargain, the dealer would have to offer you at least a 30% discount on the car purchase.

Scenario Two: A zero percent loan with kept assets saved at 2%. Let’s say you weren’t so keen to invest the assets earmarked for car costs. After all, if those dollars will eventually be needed to pay off the balance on the loan and you happen to invest just prior to a market downturn, you could just as readily lose instead of gain 6% annualized on your investments. What if you instead put the reserved assets in a CD or similar savings account, offering a lower but more dependable 2% annualized return? You’ll still come out ahead taking the loan until the dealer offers you at least an 11.5% discount to pay cash.

Scenario Three: Three percent financing with kept assets invested at 6%. Admittedly, the zero-percent loan incentives are unlikely to last forever. So what if auto loans are in the range of 3%? It still may pencil out in favor of keeping the cash and investing it in the market. Assuming 6% annualized market returns, the dealer would have to offer you at least a 23% discount before it would make sense to pay cash upfront instead.

Scenario Four: Three percent financing with kept assets saved at 3%. But again, that 6% annualized market return isn’t guaranteed. But if loan rates rise, you’ll probably also earn more interest in a CD or savings account too. That said, here, the scales begin to even out. Assuming you could earn 3% returns in your savings account, if the dealer is willing to offer you at least a 9% discount to pay cash, then the cash up front may become your better choice.  

Still weighing your options? If you’re willing to take a deeper dive, here’s one more illustration, offering a more detailed analysis of financing new cars versus paying cash for them.

Here, we’ve looked at purchasing $50,000 luxury vehicles versus more basic, $25,000 models, assuming a replacement cycle of every eight years across 32 years. (That is, you buy a new car every eight years.) We’ve assumed zero percent financing for the cars with a 6% annualized market return on the money not used to purchase them. The calculations also include:

·         A 10% down payment if you were financing the cars

·         A 5% discount if you instead pay cash

·         A 15% annual depreciation on the cars

·         A 3% inflation rate when replacing cars

·         A sufficient starting amount of investable cash (about $160,000), to cover paying for a luxury vehicle with cash every eight years

The following graph shows the residuals:

car financing.png

As you can see, the results vary wildly based on the scenarios. In the worst-case scenario, you would be left with about $27,000 after 32 years of purchasing a luxury vehicle for cash in a zero-interest-rate environment.

Mathematics aside, I get why families may still choose to pay cash for their cars. There’s less paperwork, no ongoing obligation, and that unquantifiable sense of satisfaction in knowing that what’s yours is yours. On the other hand, if you do decide to let the numbers be your guide, in a zero-interest-rate environment, I hope I’ve demonstrated how likely you are to end up with more money in your pocket for future car purchases if you let the lender be your friend.

 

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

The views, opinion, information and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc.  The selection of any posts or articles should not be regarded as an explicit or implicit endorsement or recommendation of any such posts or articles, or services provided or referenced and statements made by the authors of such posts or articles.  Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting or tax advice.