Kid Lessons for Adults: Back to Basics

Kid Lessons for Adults: Back to Basics

This is the first installment of my new four-part series entitled “Kid Lessons for Adults.” “Back to Basics” lays the groundwork for this series, and how these lessons relate to money, investing, and financial planning. 

With graduation season upon us and so many video speeches being delivered, I was struck by how often these commencement addresses are about the core lessons we were taught early in life. It’s easy to forget those earliest, most fundamental life lessons sometimes, and many of us are still learning how to apply them to our adult lives. Far too often in adulthood, it seems that we prefer to seek out the path filled with complications and complexity, while the less cluttered path remains untraveled.  

“Back to basics” is such a simple phrase, that its power is often overlooked. Why do the basics matter when facing a task as complicated as planning a retirement? The basics matter because the entire outcome of the plan is predicated on how it is initially built, and “the basics” tend to be the foundation. For instance, take a basic component to any retirement plan, such as the annual amount contributed to a 401k or 403b account. If we model an annual contribution for a 20 or 25 year period of time, but the client stops contributing after 5 years, the original outcome of the plan will be horribly inaccurate. Therefore, we must consistently strive for accuracy in even the most basic of components in our plans, as well as ongoing adjustments, to ensure the best chance for an accurate outcome. Simple habits, like increasing the amount of money saved towards retirement with every salary raise or bonus, can have a big positive impact on the plan’s chance of success.   

The idea of “back to basics” can and should apply to other facets of our financial lives as well. Events like job changes, buying or selling a home, and sending our kids off to college can get complicated very quickly. However, if we’re able to take a step back and look at the data objectively, we find that the correct option is easy to identify in many cases. Working through these complex decisions by isolating variables, then solving for the remaining variables is a great way to keep emotional decision-making in check. We try to break large decisions down to a series of smaller, more manageable decisions that will ultimately lead us to better outcomes. It has been my experience in business that highly-charged emotions are not conducive to making solid financial decisions. The ebb and flow of investment markets can foster a whole host of emotion, from fear to greed to regret to disappointment to resentment. By understanding the likely impact of these movements on the potential outcomes in a financial plan, clients are better equipped to handle these difficult times without letting emotion influence the outcome. The same is true when buying or selling a home. Working through a long, arduous real estate transaction can be a breeding ground for bad decisions, mainly because of the emotion of choosing a home and the complexity of most housing transactions. Remember the phrase “back to basics.” The overall transaction should be seen as a series of small decisions made in due time without looking five decisions down the path. The best advice given to climbers attempting to summit Mt. Everest is “just take one more step.” There may be thousands of steps left to take, but your focus should be on the next one.   

The money basics as a kid were simple and easy to understand– I want to buy an item for $40 and I earn a $10 allowance. Therefore, focus on saving four straight allowances, and I can get the item. While many things in our lives get more complicated and harder to solve as we become adults, the idea of breaking down problems to their basic components and intentionally directing our focus to the smaller decisions will lead to better outcomes.

Nate Condon

Your Financial Plan – Boring Equations or a Path to Your Dreams?

Your Financial Plan – Boring Equations or a Path to Your Dreams?

A Financial Plan as a Living Document

Financial advisors believe strongly in the utilization of a financial plan and what it can do for your future. It is a powerful tool that helps to simplify dozens of variables down to an output that is manageable and quite useful in making life altering decisions. However, the industry has, in many ways, failed to articulate exactly what a financial plan is and, more importantly, what it can do for a motivated individual. We make our financial plans the center of our client relationship because it is the road map to our clients achieving a work optional lifestyle. When clients incorporate their life dreams into the equation, it can be the roadmap to happiness. 

Think Big and Think Creatively 

The goal planning phase is always one of the first things discussed when starting a plan. It tends to coalesce around monthly income, health care costs and potential long-term care needs. It goes without saying that these items are imperative in any well constructed financial plan. Just as important, however, are the lesser thought of dream-based goals. We strongly encourage our clients to think creatively about the things that they have always wanted in life, especially things that are not necessarily thought of in financial terms. Have you always wanted a huge, professionally designed garden or a finished garage with flat screen TVs and a sound system for football Saturdays? How about working a job simply for the enjoyment of the job and not because you need the paycheck, such as mowing fairways on a golf course or cutting flowers in a gift shop? These are exactly the kind of goals that round out a well built financial plan. Many people would be much happier in life if they could stop working 50-hour, pressure packed weeks for a job that simply brought them enjoyment and fulfillment. The question is how do you get there?

Flexible Choices and Flexible Results

We have the ability to incorporate many different ideas, goals, wishes, dreams, and even some pipe dreams into a financial plan. We can model out what a satisfying part-time job for the last 5 years of your working life would look like. We can carve out a lump-sum of money to be allocated to a “crazy thought” that might just bring you decades of enjoyment. We enjoy that level of planning because it is truly where dreams can be achieved. As we all know, tomorrow is promised to no one. While that doesn’t mean we should throw caution to the wind and only live for today, it does mean we should strive for things that we maybe didn’t think were possible. Many of our clients have worked and saved for the future. Together, let’s see if that future contains something you didn’t think was financially possible. 

Nate Condon


The SAVERS Act – A Unique Retirement Savings Opportunity?

The SAVERS Act – A Unique Retirement Savings Opportunity?

Will I be able to put more money into my 401(k)? If a recent bill called the Securing Additional Value for Every Retirement Saver Act (SAVERS Act) passes through Congress, the answer could be yes. The bill was introduced in the House of Representatives in late April and would still need to pass through the House, the Senate, and be signed by the President before becoming law. The SAVERS Act could (temporarily) open significant doors for enhancing tax-advantaged saving and investing for retirement. 

Supercharged Contributions…

The act proposes to triple – yes – triple! the amount that one would be able to contribute to their 401(k), 457, or IRA. The current (2020) maximum amount that one is able to contribute towards their 401(k) and 457 is $19,500, while the IRA is capped at $6,000. These caps exclude any “catch-up” contributions (e.g. those aged 50 years and older can contribute an additional $6,500 to their 401(k), for a total of $26,000 in 2020). 

For the clients of ours that are already maxing out their 401(k), their 457, and IRA simultaneously that are looking for additional tax-advantaged vehicles to save for retirement: this bill will be important to follow because if it becomes law your contribution strategy in 2020 could very likely change (but don’t forget to talk about your strategy with us first!). 

But Only Temporarily…

“This sounds too good to be true; there must be some sort of limit.” Yes, there is a limit. Remember when I mentioned “temporarily” earlier? The IRS wouldn’t let too many people defer such a large chunk of their tax bill indefinitely! The SAVERS Act proposes these changes for the tax year 2020.

Typically the amount that the IRS allows you to put into these tax-advantaged vehicles is increased by $500 or $1,000 every few years. If the SAVERS Act were to become law it could potentially present a once-in-a-lifetime opportunity for high-income earners that have the wherewithal to save. Representative Patrick McHenry of North Carolina (who introduced the bill) said, “Every American is feeling the economic impact of COVID-19. We need to give savers the opportunity to shore up the savings they have worked so hard to grow.”. We will continue to monitor the progress of the SAVERS Act and be ready to advise our clients on their retirement contribution strategy if and when it is signed into law. 

Mitch DeWitt

Should I Hire an Online Financial Advisor?

Should I Hire an Online Financial Advisor?

COVID-19 has changed our lives and the effects will be felt for years to come, and in some cases, forever. As we migrate to more of a virtual office, one should question whether they are better served by other professionals more equipped to handle this medium. Is it time now to hire a virtual financial advisor?

When we say “virtual”, basically it means that your relationship is handled completely online rather than at an in-person location. With technology tools, we can use screen sharing and video conferencing to enhance the client experience far beyond a phone call. 

How Does This Differ From an In-Person Experience?

One benefit is that you don’t have to leave work or your home and fight traffic to get to an office. You (probably) won’t be shaking hands anyways, so the contact attribute will likely be removed from the picture. You won’t get to immerse yourself in some of the office amenities such as great coffee at the Madison Chocolate Company, our rustically comfortable decor, and of course, our friendly staff that will greet you and make you feel at home. Aside from these niceties, you will still get the same experienced advisors, software tools, and our “comfortably unique” experience. Additionally, due to fewer logistical barriers, we can offer an expanded calendar for appointments.

For busy professionals and those where travel presents a major headache, this is becoming an essential way to meet with the professionals in their lives. Also to consider, does one of the main factors in finding an advisor – proximity – is that really that important an attribute to you? There may be more important items to consider in experience, personality, and expertise. 

Is My Current Financial Advisor Equipped to Offer a Virtual Experience?

For many advisors, the answer to this simply is “no”. Some firms are still resistant to offering virtual meetings due to (in our opinion) overly onerous and conservative compliance restrictions. Others are using dated technology that may not show well in a screen sharing environment. Demographically, financial advisors are quite an older group. According to a J.D. Power article, “the average age of financial advisors is about 55, and approximately one-fifth of advisors are 65 or older.” As this technology may present challenges for older advisors not accustomed to using screen sharing and other financial software tools, we expect clients to be seeking advisors that are better equipped to offer these services.

The other challenge for clients that are explicitly seeking a virtual advisor is that the financial advisors that may be most comfortable using this technology may also be the least experienced. It is certainly not unreasonable to desire a wealth manager that isn’t “practicing” on your accounts to gain experience. 

The Walkner Condon Virtual Experience

We are ready to assist clients virtually in both of our divisions: our domestic wealth management, as well as our U.S. expat financial advisory services. Our staff is very familiar with “Zoom meetings” as well as screen sharing, financial planning, and investment management software. We offer our clients our proprietary GAPP process as well as the comfort in knowing that in comparison to our peers, we are young and experienced. Additionally, we also have a variety of trusted business professionals in our network that are also able to assist our clients virtually where appropriate.

As we all migrate to the “new normal” of a virtual office setting, we are committed to making the experience as close to our in-person meetings as possible. Perhaps we will institute online greetings by our administrative staff, or find a way to enjoy a cup of coffee together regardless of where you live? The possibilities remain endless and we look forward to serving our clients in their preferred medium. If you’re ready to explore our virtual services, you may schedule a no cost, no obligation appointment here.

Clint Walkner


What’s Going On With The Price of Oil?

What’s Going On With The Price of Oil?

On April 20th, 2020 something happened that has never happened before in history. The price of a barrel of WTI oil for the May contract went negative and closed at -$37.63 for a barrel. But what exactly does this mean and why did it happen? 

It’s Not As Simple as Just Supply and Demand 

The price of oil is usually determined by supply, demand, and market sentiment toward the product. With the entire global economic situation suffering from shutdowns to combat the coronavirus outbreak, the demand for gasoline has drastically reduced and looking forward is expected to remain that way for at least several months. The supply of oil which is used to refine into gasoline as well as other energy sources has been increasing to unprecedented levels. There is only a limited amount of storage capacity available globally for this oil and due to the scarcity, the price has drastically dropped this year. On April 10th, the market went negative because traders capitulated based on the fact that it is cheaper to pay to have the oil hauled away and stored than it is to build more storage capacity or to shut down the wells that are producing it. So, with this historic market event, where do we go from here?

The Unprecedented Impact of Coronavirus

Moving forward, it is likely that many of the states will begin to reopen their economies. Other countries will also resume economic activity. How long this will take is speculative, but one thing that is certain is that the dramatic drop in price is evidence that the coronavirus has dramatically impacted the global economy, and it is going to take some time for the prices to recover. It is likely that some oil and gas companies will go bankrupt if this downturn in economic activity and oil persist. President Trump announced that the US would open up the strategic oil reserves and ask permission to buy up some of this oil and take advantage of the low prices as well as attempt to stabilize the market. It is likely that oil prices could continue to go down or stay down until the global economy resumes at or near “normal” levels. While it feels good to fill up our tanks for less than $20, it is not always a good thing for the overall health of our economy. 

How Does It Impact Investments?

There are more liquid investments on exchanges that attempt to track the price of oil such as USO, which tracks West Texas oil price, and BNO, which is tied to the Brent Crude oil price. It is important to know that they are investing in futures contracts of the commodity, and are not always able to take advantage of the drastic price swings. They are risky investments and complex in nature because of the rolling over of the monthly futures contracts and there should be significant due diligence done to understand the underlying risks of the investments before they are considered. 

There is a lot that goes into the market for oil and it is certainly a worry about the impact that it will have on the economic recovery. In the 1980’s there was a drastic drop in price and it took 7 years for prices to recover. Understanding the underlying reasons why oil prices fluctuate are important for investors, but it does not mean that you should necessarily take significant actions. 

Where Will The Price of Oil Go From Here?

As it has in the past, prices are likely to stabilize in the future. The economy will open up, and people will get back to work. The future will be determined by the tremendous global economy that has been built and grown on innovation and adaptability and there is no reason to believe that will not be the case this time either. In the meantime, go for a drive (safely and observing social distancing of course) and enjoy these low gasoline prices while they are here!

Jonathon Jordan


Disclosure Note: The discussion of oil and ETFs such as BNO and USO are illustrative in nature only. You should check with a trusted professional advisor before implementing any of these investments into your own portfolio. 


I Just Got Laid Off. What Should I Do?

I Just Got Laid Off. What Should I Do?

Layoffs aren’t new, but that doesn’t make it any less shocking when you get laid off without warning. The swift surge of layoffs in the US and around the world due to the coronavirus shutdown is something that we’ve never seen before. For many, this is unfamiliar territory. The purpose of this blog is to give a few actionable items if you have recently found yourself out of a job. Take a deep breath, realize that you’re not alone, and then start to work through some of these items. 

Stay positive.

OK – I had to get my “fluffy” point out of the way. But during this time remember that it isn’t your fault that you found yourself in the position that you’re in. You didn’t know that a virus was going to cripple the global economy and that the government was going to basically halt your (former) employer from conducting its business. Doom and gloom won’t help you get through this time; there is a light somewhere at the end of this tunnel. 

Review formal communications from your employer.

Have a professional (e.g. attorney that knows employment law and knows contracts) review letters that you have received from your employer. Be careful before signing anything! Many times people can be caught off-guard by the job loss and may not be in the right mindset to review and sign documentation. Others feel forced to sign in order to collect any sort of severance pay. Be sure to know what you’re signing and how that will affect you. 

Determine what benefits will need to be replaced.

I’m not talking about your 401(k) here – more on that later. A more urgent need will likely be health insurance. Work with your employer and HR department to determine the timeline of when your current coverage will end and when you will need to determine your coverage going forward. You may be eligible for COBRA. Many people are shocked to find out how expensive health insurance can be through COBRA. In actuality, the overall cost to continue your coverage will likely be about the same. However, you are now responsible for the entire premium payment (vs. your employer. They may have been paying a good portion of said premium). Another option is to shop for a health care plan through  the Marketplace, a product of the Affordable Care Act

File your unemployment claim.

Don’t be scared or ashamed to do this! For most professions, your employer has been paying Unemployment Insurance premiums for times like these. The system isn’t designed to pay you 100% of what you were making when you were employed, but a weekly benefit can help you get through some tough financial times. We are also in unique times as the CARES Act will provide some claimants with an additional $600/week! Note that severance pay, if applicable, will likely impact the amount of unemployment benefits payable to you. Tangentially related to cash flow needs, The CARES Act also enabled the IRS to deploy “Economic Impact Payments”, or more commonly referred to as coronavirus stimulus checks. You may not have to take any action to receive your check, assuming you are eligible and have filed your 2018 or 2019 tax return. This could add up to $2,400 (if married) to your bank account, plus $500 per qualifying child

Review your employer-sponsored retirement plan.

You may be lucky enough to return back to your employer after a temporary layoff (typically called a furlough). If that is the case, you will likely start participating in your retirement plan when you return to work. There are others that have been permanently laid off with no prospect of returning to their former employer. Determining your cash flow needs, finding health insurance, and searching for your next career move should come first. But it is important to determine a plan for your old 401(k), 403(b), or pension plan.

Be careful when considering taking advantage of the relaxed retirement plan rules that were implemented as part of the CARES Act. For example, in 2020 there is no early withdrawal penalty for distributions from qualified retirement accounts and the amount that you are able to loan to yourself from your 401(k) has doubled. You may run into unintended consequences if you utilize these approaches. Just because you can do something doesn’t necessarily mean that you should. Layoffs are short-term; making wise decisions about investing for your future will have lasting effects for you and your family. Don’t make any knee-jerk reactions and talk to a professional advisor first.  

I’ll end with a phrase that is becoming all too common at the end of Walkner Condon’s blog posts: This Too Shall Pass. 

Mitch DeWitt