Essentialism; If You Don’t Prioritize Your Life, Someone Else Will

I often find myself in discussions with individuals and families regarding the personal and financial priorities that seem to continually push and pull on people.  I try to get people to think and focus on what is essential to them and the lives that they want to lead.  This focus is about making the wisest possible investment of your time and energy to achieve your lifestyle and financial objectives.

Within my Investment Perspectives this quarter, I discuss a related book on this very subject, Essentialism by Gregg McKeown, which stresses that by investing in fewer things we have the satisfying experience of making significant progress in the things that matter most.  In addition, I discuss some shifts that I am making in my client managed portfolios focusing on stability and valuation.  In my personalized investment section, I address the flexibility needed when it comes to building a lasting wealth management plan.  

You can find my complete listing of Investment Perspectives and other valuable information here on our website

For questions about any wealth and asset management topics, do not hesitate to contact me to find out what options may be best for your own personal situation.  If you are interested in hearing more, or know of someone who is concerned with their current wealth management plan or portfolio and what to expect in 2017, I would welcome the opportunity to arrange a meeting or a phone call.

DWCM Open Hands

Options to Help Reduce Your 2016 Tax Base

As year-end approaches, I have been fielding many questions from my clients about what options they could take advantage of to shelter some of their income from taxes in 2016.  While time is running out with only 6 weeks left in the year, there are several straight forward approaches that could help save you money come tax time in April.

  • Max out your 401(k) or 403(b) contributions

    • This is the most obvious choice as you defer paying income tax on your contributions.  This year’s contribution limit is $18,000 and all contribution must be made by the end of the year.
    • For those of you older than 50, there is an additional $6,000 catch up provision that you can take advantage of in addition to the $18,000, thus bringing your total contribution amount to $24,000
    • If you can’t afford to increase your contributions to the limits, try to ensure that you are contributing enough to receive any company match that your employer may offer.
  • Contribute to a Traditional IRA

    • Regardless of your tax deduction eligibility, a Traditional IRA is still a great vehicle to use as investment gains are deferred until you make withdrawals.  The max contribution amount for 2016 is $5,500 up to $6,500 if you are over age 50.
    • 2016 contributions can be made up until the tax deadline in April 2017 and still qualify as a 2016 contribution
    • For a Traditional IRA contribution to qualify for a tax deduction, it depends upon if you are eligible to participate in an employer sponsored retirement plan.  If you are eligible to participate in an employer retirement plan, then the grid below helps to explain if your contribution could be tax deductible

If Your Filing Status Is…

And Your Modified AGI Is…

Then You Can Take…

single or
head of household

$61,000 or less

a full deduction up to the amount of your contribution limit.

more than $61,000 but less than $71,000

a partial deduction.

$71,000 or more

no deduction.

married filing jointly or qualifying widow(er)

$98,000 or less

a full deduction up to the amount of your contribution limit.

 more than $98,000 but less than $118,000

  a partial deduction.

 $118,000 or more

 no deduction.

married filing separately

 less than $10,000

  a partial deduction.

 $10,000 or more

 no deduction.

If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "single" filing status.

  • Contribute to a 529 Plan

    • Although contributions are not deductible on your federal tax return, any investment earnings can grow tax-deferred, and distributions to pay for the beneficiary’s college costs come out federally tax-free.  Depending upon what State you reside in, a State sponsored 529 plan could offer you a tax credit on your state income taxes. 
    • For example, in the State of MI, MESP contributions are deductible for Michigan income tax purposes up to $5,000 per year for a single income tax return filer and $10,000 per year for joint filers
    • Contributions must be made prior to the end of the year to counts towards 2016.
  • Business Owners Options

  • Charitable Contributions

    • For people that itemize their deductions for tax purposes, making qualified charitable contribution can be another great way to reduce your taxable income while helping others.
    • Contributions can be made via cash, check, credit card, or even a physical donation.  You will want to retain any documentation that shows that you did indeed contribute or have a way to value the amount of your contribution if you are donating physical items to a place such as Goodwill or Salvation Army.
    • Contributions must be made prior to the end of the year to counts towards 2016.

Any of these options should help facilitate a lower taxable income base for you thus reducing your overall tax liability.

I hope that everyone has a great Thanksgiving and can share some time with families and loved ones.  For those armed service personnel stationed across the world, we greatly appreciate your service and the sacrifices that you and your families have made for us to have this traditional American celebration.

 What I Am Reading This Week

  • Don't think of Amazon Echo as just a speaker. It's a whole new way of life (LA Times)
  • The 13 most amazing findings in the 2016 exit poll (Washington Post)
  • How Not to Overpay on Black Friday (NYT)
  • Last Best Chance for Fixing Roads and Refinancing Debt (Bloomberg)
  • Your Portfolio Won’t Be Trumped (The Big Picture)


Self-Improvement/Career/Continuous Learning, Investing, and Other Intriguing Topics

This week’s post is another curated list of articles that I have been reading over the past few months that have not appeared in my weekly “What I am Reading” section.  This batch of articles focus on Self-Improvement/Career/Continuous Learning, Investing, and Other Intriguing Topics.  The “Other” category is a rather eclectic grouping of varying topics this time around.

I hope that you find a few articles within the groups below that spark your interest.

Self-Improvement, Career, & Continuous Learning



  • 20 Big Questions about the Future of Humanity (Scientific American)
  • Employee #1: Amazon (The Macro)
  • Dilbert Explains Donald Trump (WSJ)
  • The man and the voice: An oral history of Vin Scully's career (ESPN)
  • In Men, Depression is Different (WSJ)
  • Meet Michael Phelps’s Entourage (The Ringer)
  • What else is new? NFL, billionaires prepare two new stadium ripoffs (LA Times)
  • Why Electric Cars Will Be Here Sooner (WSJ)
  • The Pot-Belly of Ignorance (Medium)
  • I Used to Be a Human Being (NY Magazine)
  • The Definitive Guide to Cord-Cutting in 2016, Based on Your Habits (NYT)

It is not the Critic Who Counts

Typically, I wouldn’t post a book review or summary of a book focused squarely on investing especially when it comes to technical analysis.  Most of you simply would not care and if you are likely utilizing someone to manage your assets for you, that should be your manager’s job to understand if they are using technical analysis in their investment process.

However, I was able to glean from Point and Figure Charting: The Essential Application for Forecasting and Tracking Market Prices by Tom Dorsey a few life lessons worth mentioning and a couple of investing points that likely apply to most people.

Life Lessons (bullet points are directly from Mr. Dorsey’s book)

  • The problem is not that we have too much information. The problem is managing and processing this information. It is like a fire hose of information that hits us in the face every day. The question is how to control that massive information flow and break it down into understandable bits that we can use to make effective decisions.
  • To reach the top, athletes—or anyone else for that matter—have to know how to live on the edge. They have to enjoy the elements of risk and a little danger. What I'm talking about is intelligent, calculated risk-taking in which the risk in question has a legitimate cost-reward relationship.
  • If you're not willing to risk, you have no growth, no change, and no freedom. And when that happens, you are no longer involved in living; for all practical purposes, you have no life. You're dead, but you just don't know it. So risk, for goodness' sake. Be a part of life. You have the power to be or do anything you want. You can produce miracles if you have a mind to. You have the magic; you just have to tap into it. Get in touch with it, make things happen, live—journey to the stars, push on to new galaxies. If you don't, you will never know your greatness!

Investing Points

  • There is a sequence of events you should follow before you make a stock commitment

    • Evaluate the overall market
    • Evaluate the sector you are investing in
    • Answer the question of “what to buy” (the fundamentals)
    • Answer the question of “when to buy” (the technicals)
  • Sectors move in and out of season just like produce in the store.  You have to accept “what is” in the markets. Never have any preconceived ideas. You might find one day that watermelons come into season in January. Don't eschew it—it is what is. Keep your eyes open.
  • Emotional attachment to a stock because of its name or any other reason, can be detrimental to the overall portfolio's health, and ultimately can be a big drag on performance. When a security moves into a laggard, underperforming position, you need to unemotionally detach yourself from it; sell it to make room for the leaders.

Finally, Mr. Dorsey referenced a familiar Teddy Roosevelt quote from his speech “Citizenship in a Republic” delivered at the Sorbonne, in Paris, France, on April 23, 1910.  I thought that it was an appropriate focal point as we here in the U.S. go to the polls this week to elect our leaders who I hope will help lead our country to continued great achievements.

  • It is not the critic who counts, not the man who points out how the strong man stumbles or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again because there is no effort without error and shortcomings, who knows the great devotion, who spends himself in a worthy cause, who at the best knows in the end the high achievement of triumph and who at worst, if he fails while daring greatly, knows his place shall never be with those timid and cold souls who know neither victory nor defeat.

And along the lines of the Presidential election, Tom Lee of Fundstrat, put together this interesting scenario analysis of how the S&P 500 could perform depending upon the election outcome.  Whatever the outcome of the election, it should make for a very interesting end to 2016.


Wealth Planning, Life Planning, and Economics

This week’s post is another curated list of articles that I have been reading over the past few months that have not appeared in my weekly “What I am Reading” section.  I had a two-part series of these curated articles a few months ago here and here.  This batch of articles focus on Wealth Planning, Life Planning, and Economics which do focus on a few of the current election topics. 

I hope that you find a few articles within the groups below that spark your interest.

Wealth Planning

  • 10 Money Revelations in My 30s (A Wealth of Common Sense)
  • Are Investors More or Less Willing to Take on Risk After a Big Money Loss? (WSJ)
  • Can We Fix Social Security? (Barron's)
  • Corporate 529 College Plans Are an Easy Benefit to Implement (WSJ)
  • How Financial Advisers Can Help Close the Behavior Gap (CFA)
  • The IRS Extends Deadline for 401(k) Rollovers (WSJ)
  • What's the Best Corporate Structure to Protect Small Business Owners? (Money)
  • Investment Management vs. Financial Advice (A Wealth of Common Sense)
  • The Art Is Not in Making Money, But in Keeping It (A Teachable Moment)

Life Planning

  • How to Get More Pleasure Out of Retirement Spending (WSJ)
  • Big Goals Can Backfire. Olympians Show Us What to Focus on Instead (NY Mag)
  • Trading Big Mistakes for Little Mistakes (A Wealth of Common Sense)
  • What Should You Choose: Time or Money? (NY Times)
  • Why 4 a.m. Is the Most Productive Hour (WSJ)
  • The Top U.S. Colleges (WSJ)
  • How to Pay for College With Less Stress (NYT)
  • An Online Education Breakthrough? A Master’s Degree for a Mere $7,000 (NYT)
  • Sorry, Offering To Work For Free Is A Really Bad Strategy (But Not For The Reasons You Think) (Thought Catalog)


  • How Shrinking Occupations Could Explain Rising Economic Anxiety (WSJ)
  • One big reason for stagnant wages and rising inequality (CBS)
  • Please don’t tell anyone, but tax cheating is about to rise in the U.S. (Washington Post)
  • Why thousands of millionaires don’t pay federal income taxes (Washington Post)
  • Health-Care Costs Ate Your Pay Raises (Bloomberg)
  • There’s a devastatingly simple explanation for America’s economic mess (Washington Post)
  • Will a Robot Take Your Job? How to Tackle ‘Fear and Anxiety’ in Today’s Economy (WSJ)
  • America’s Dazzling Tech Boom Has a Downside: Not Enough Jobs (WSJ)
  • Donald Trump’s Economic Plan, Up Close, Doesn’t Add Up (WSJ)