Our Insights on

  • What We Look For

    Fourth Quarter 2018

    I recall in a televised interview several years ago, (I think it was Ed Bradley on 60 minutes interviewing George Burns), that Burns told Bradley he found money on the ground every day.  Bradley wasn't exactly incredulous but asked the aging and aged actor how that rather unusual personal attribute came to be.  Burns with only a slight pause, replied "I look for it."   I've scoured the internet without success for corroboration of the exchange.  I may have the wrong identities but hang with me; it makes a nice point. 

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  • Consumption and Lifestyle - the Fulcrum

    Third Quarter 2018

    One of the most pertinent subjects that we address in the practice of financial planning is lifestyle (level of spending, primarily on consumption). It is of central importance to the planning process since the relationship between spending and resources available is the ultimate key to long-term financial security. At a fundamental level, savings is the difference between what we produce and what we consume; assuming the production is greater than the consumption. 

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  • The Value of Waiting - Social Security

    Second Quarter 2018

    In considering claiming strategies for Social Security, one can consider many factors, including other resources, age, age of spouse, level of benefit, spouses own benefits, health, estate desires, tax effects, effects on Medicare Premiums, etc.  One of the most common processes is to try to predict one's life span in order to maximize the total benefit over that interval. This method boils down to the following general rule: If you live long, it pays to wait; if you live short, it pays to not wait. Problem is, we don't know, for the most part, whether we will live long or short. Also, other considerations may outweigh simple maximization.

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  • Behavioral Finance & Cognitive Biases

    First Quarter 2018

    We've been publishing some pieces on behavioral finance and cognitive biases in recent weeks. This is a look at a laundry list of known biases and priors that affect the financial decisions that individuals make. This is an area of inquiry that has become more prominent in recent years. A recent book, The Undoing Project by Michael Lewis tells the story of two of the pioneers in this research. Daniel Kahneman and Amos Tversky, two Israeli psychologists, who started some 40-odd years ago to identify, evaluate, and document behavioral biases that show up in decision-making. Their work was the inception of Behavioral Finance.

    Another source in this area is Kahneman’s own book Thinking Fast and Slow. In his book, Kahneman describes much of research that forms the basis of his life’s work. Most interesting, I think, is the tour of the two decision-making systems we all operate with as a part of our original equipment.   


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  • Tax Reform

    Fourth Quarter 2017

    Tax reform is now real and as we expected in early November, the changes are fairly consequential.

    Personal Income Tax Changes
    Generally lower tax brackets – There are still 7 brackets, albeit with slightly lower rates.

    An increase in the child tax credit to $2,000 (refundable up to $1,400), beginning to phase out after income levels of $400,000 for marrieds filing joint and $200,000 for all other taxpayers.

    Alimony – Treatment is reversed from prior law treatment and now the payor may not deduct alimony paid and the income is not reportable to the recipient.

    Gain Exclusion on Disposition of the Primary Residence – These changes were not included in the final legislation.

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