Critical Thinking Required

In today's world, with social media's help (or curse?), we are beyond "keeping up with the Joneses."  Billions of people on the internet are our "neighbor Jones" that we are trying to keep up and compete with, from the five bedrooms house in the Valley to the new Porsche, from traveling to Naples on a whim with some friends to the new Birkin special order.  Social pre...

Nathaniel and Tim discussed the collapse of Silicon Valley Bank: what happened and what went wrong.  First, unlike most banks, most of SVB's clients are not retail individuals/small businesses, but VC-funded tech/crypto startups.  As you know, they are having a tough year.  They are burning through cash and thus taking significant deposits out of SVB.  SVB had to sell its long-term bonds/Trea...

Caroline and Tim discussed some highlights of SECURE ACT 2.0 and how it impacts us: 1. The age changes of RMDs (Required Minimum Distributions). 2. Allowing direct transfers from 529 plans to Roth IRAs under certain circumstances. 3. Changes with 401(k)s. 4. 401(k) catch-up contributions. 5. New Roth SIMPLE/SEP IRAs for small businesses and self-employment. 6. Employer's match for emergency s...

1.Free estate planning documents. 2.Guardianship for minor children (or your pets!) 3.Is Trust right for me? 4.Burial instructions. 5.End-of-life instructions (Living Will). 6.POAs. 7.Asset distribution. 8.Knick-knacks. 9.Communicating with your loved ones about where you store your documents. 10.Routine review.

Some people say that with today's technology, there's no need to have a financial advisor anymore.  Robo/AI advisor has its uses: it's relatively cheaper, it can work 24/7 without any vacation, and the algorithms make objective investment decisions without bias.  But does this mean we no longer need a human touch in financial decisions?  Absolutely not!  We are the information gener...

For part II of the episode, Dan and Kennidy discussed how to manage your financial routine as a couple/partner.  Do you join finances?  Do you consolidate debts?  How do you define the roles of finances?  Is one of you taking the lead?  Do you value your partners' non-monetary contributions?  How to effectively discuss financial goals such as college planning, retirement, inheritance, charita...

This is part I of the episode where we discuss how can a couple/partners talk about finances.  A survey showed that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money. Talking about money is important for any couple, whether you are dating, are domestic partners, or are married.  “Even at the dating phase?” you ask.  Yes!  Money means differe...

There's increasing discussion about Central Bank Digital Currency (CBDC) - don't confuse it with Bitcoin or other cryptocurrencies.  CBDC is not a new crypto.  It's still US dollars released by the Federal Reserve, just in the digital format.  The benefits are clear: more efficient and low-cost; faster access to assets and financial systems; it can also continue to strengthen USD as...

Because the U.S. has been running on a deficit (less tax revenue than the total spending) for the last few decades (with a few exceptions), we have a debt problem.  The U.S. national debt hit $31.51 trillion as of Jan. 26. 2023.  Our current debt ceiling is $31.4 trillion.  What happens then?  Nathaniel and Tim discussed how Congress can increase the debt ceiling (once again), how the dollar being...

Why is it important to talk about finance in the family?  Because money is not just about money.  It’s particularly hard to discuss finance with your aging parents/loved ones because it makes them feel vulnerable.  In addition, you can be 60 years old, but your 88-year-old father still views you as a child.  Some important topics you should cover with your parents: estate planning (parents, please...

How's the first week of your 2023 so far?  Dan and Tim discussed the 2023 new year's resolutions for personal finance.  First, before you start creating your list, take a step back, and think about two questions: what does money mean to you?  What does enough mean to you?  Some great financial resolutions are: get your taxes done earlier; plan your medical/specialty visit earlier; adjust...

There are some investment vehicles that allow you to save and invest for retirement with tremendous tax benefits: 401(k)s, IRAs, Roth IRAs, etc.  Basically, traditional IRAs allow you to take the tax deductions today, but you will have to pay income taxes in the future when you take out distributions; meanwhile, Roth IRAs make you pay your taxes now, and grow tax-free for the rest of your life.  N...

A Roth conversion refers to taking all or part of the balance of an existing traditional IRA (or 401(k), 403(b), 457(b), etc.) and moving it into a Roth IRA.  The point is to pay the tax now so that the assets can grow tax-free for the rest of your life.  One of the myths we frequently hear from people refusing to do a Roth conversion is that: I will be in a lower tax bracket when I'm retired...

In today’s market, where interest rates are high, but sellers still think they can get premium prices, people are often more hesitant to invest.  However, as legendary investor Warren Buffett once said, “be fearful when others are greedy, and greedy when others are fearful.”  There are always great deals if you understand the fundamental mechanics of the business and have a margin of safety.  As w...

We invited Jorjio from MLG Capital back to the podcast and discussed more on real estate investing.  How does real estate fit in people’s overall portfolio, compared with equities, fixed income, etc.?  How can we build our real estate portfolios from scratch?  Jorjio talked about the advantages and disadvantages of passive and active real estate investing.  Tim asked what should one consider when...

FTX went from a crypto exchange leader with a $32 billion valuation to bankruptcy in a matter of days, with potential criminal investigations and class-action lawsuits pending.  What happened?  FTX is a crypto exchange that was started by Sam Bankman-Fried (SBF).  Prior to FTX, he started a hedge fund Alameda Research, which the main purpose was to "act as a liquidity provider on FTX" ac...

2022 has been a crazy volatile year for the stock market. In the US, the S&P 500 index is down more than 20% year-to-date.  Considering the fact that the index had a positive 26.61% annual return for 2021, this certainly has been a roller coaster.  In this episode, Nathaniel and Kennidy discussed the emotions of an investor.  We had clients pressuring us to buy trendy tech companies at the end...

Today we are going to discuss the high-trending event: Elon Musk's Twitter purchase.  Musk offered to purchase Twitter back in April 2022 and waived due diligence.  Then in July, he attempted to back out of the deal due to a spam bots claim, and Twitter sued.  The acquisition was closed on October 2022.  Nathaniel spoke of Musk's Twitter debt and cash flow (spoil alert: virtually nonexis...

As you know, here in LBW we have four partners: Dan, Tim, Nathaniel, and Ying.  None of us are mind readers.  How do we ensure we are on the same page?  How do we communicate?  First, talk about what you want, constantly.  Not just business needs, but sometimes personal/household needs.  Have an operating agreement (even if your partners are your family & friends) before things go bad, not aft...

Most of the people we work with are first-generation wealth.  This means many of them, even though they're rich now, are still developing their relationship with money.  How can they help their kids have a healthier relationship with finance, without the "taboo" feeling associated with wealth?  Dan and Kennidy spoke about their respective childhoods, and how they negatively impacted...

Treasuries have been a trendy product for investors recently due to inflation and higher interest rates.  Nathaniel explained what U.S. Treasuries are: bills, notes, and bonds.  They're considered relatively risk-free investments (as long as the U.S. government doesn't default on its debt).  So if you want a fixed income portion within your investment portfolio, and don't want to ex...

In this episode, Nathaniel discussed with Kennidy why he's a firm advocate for "buy and hold" long-term investing instead of market timing, and short-term trading.  Do you know that if you had invested in the S&P 500 starting in 1930 and never touched that money again, your total return by the end of 2020 would have been a stunning 17,715%?  And yet, if you went in and out of th...

We invited Danan Kirby from Ariel Funds to join us and discuss investing in sports.  Danan started with some interesting data: for the past 25 years, what do you think is the average return for an investment in the average sports team?  The answer is a whopping 19.9 times!  And that's just the average team.  Even though investing in sports teams usually is for the ultra-rich, the general publ...

Two weeks after Nathaniel talked about his homebuying journey where he said they hadn't found "the one" yet, Ying and Nathaniel bought a beautiful condo with a gorgeous view.  So, we invited them back to talk about their journey of finding their forever home.  They talked about how they locked in an amazing 2.25% mortgage rate, their emotional journey, what they considered a true &q...

This is a reaction video to some financial advice we found on TikTok recently.  "Don't put a down payment on your house, always put down as little as possible", "Buy crypto here, sell it there, and you will be rich".  Say what?????  Let's take a look.