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Sam Moore

Jun 18
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Time to Take Control: Informed, Diversified Investors Can Weather Market Storms

By Retirement

Robert L. Riedl, CPA, CFP, AWMA, CEO & Director of Wealth Management at Endowment Wealth Management was recently featured in the article titled Time to Take Control: Informed, Diversified Investors Can Weather Market Storms, which appeared in the most recent issue of Insight Magazine. You can view the entire article on Insight’s website but Rob’s quotes in the article are listed below:

On Q1 2020 financial market volatility:

“Everyone didn’t even want to see what happened on their statements.” “But you need to open it and know your options.  And the investment options are plentiful, whether it’s equity markets, bond markets and certificates of deposit or something more tangible like gold. The key, is to know your risk tolerance and review investments to see if they match how much risk you are willing to take.

Investing for long-term retirement:

“Most people are working longer and living longer. If they are working longer, they have more time to add to their investment fund.  Some people are living 20 or 30 years after they stopped working. If you are too conservative, you’ll run out of money. Today, I tell clients they need a portfolio with a 50/50 split between stocks and bonds at age 75, not age 65.”

How to build wealth:

“Dollar-cost averaging is the best way to build wealth.  In dollar-cost averaging, investors place a fixed amount of money into an investment program at regular intervals. The strategy is designed to help the investor buy more shares when prices are down and fewer when prices are up, creating an average price per share and theoretically reducing the overall investment cost. If that sounds a lot like a 401(k), you’re right.”

On investing in a 401(k):

“The 401(k) is the most common investment vehicle people use to save for retirement, but they often set the allocation levels — for example 70 percent in stocks, 30 percent percent in bonds — and forget about it. 401(k)s are a critical asset.  Investors should not be afraid to take charge of their 401(k) accounts. They are a complicated asset, and if you don’t understand it or what’s happening, then find yourself a fee-only financial adviser.  It’s better to do something rather than nothing.”

On monitoring and re-balancing your portfolio:

“You need to re-balance your portfolio annually.  Pay attention to your accounts. Check on them quarterly to see how they are doing and what you may need to do to adjust.”

On having a diversified portfolio:

“Diversification, whether it’s stocks, bonds or another investment option, is also an essential part of making sure your funds can handle market volatility.”

 

 

Apr 02
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Preserving Your Mental Health

By Family Office

The challenges we all face today are unique and significant. The Coronavirus has unleashed uncertainty, economic pain and shelter-in-place for much of the population. Any one of those alone can impact our mental health; the combination of all three can wreak havoc on us.

It is completely normal to experience feelings of loneliness, fear and anxiety during these unprecedented times. We may not be able to control the initial feelings, but we can control our internal dialogue. What we tell ourselves and what actions we take each day can either alleviate or intensify the negative feelings.

We can all protect our mental health by focusing on things that we can control. There is no sense worrying incessantly about those things we cannot control. We accept our situation as fact and figure out what we can do to make the most of the situation. Finding joy isn’t so much about our circumstance as it is in the actions we take.

Choosing to act, rather than be acted upon, supports a healthy mindset. I have included a list of actions that may be helpful:

  • Turn off/take a break from the news and social media
  • Continue your daily habits/routines to the extent you are able
  • Adjust to new shopping options and try a home delivery service
  • Exercise, walk, stretch – get the blood flowing
  • Perform an act of service for someone else, checkup on a friend
  • Think purposely about today; accomplish something each day
  • Appreciate the simple things in life, count your blessings

I included several actions that have to do with our individual self-care. Yet, one of the most powerful ways we can feel good is to forget ourselves and do something nice for someone else. Whether that is mailing a card, dropping off some cookies or just talking with someone and lifting their spirits. For some reason whenever we serve another person, we are usually the ones that benefit the most.

Rest assured, the Endowment Wealth Management professional team is diligently working from their homes and our office, to manage your portfolio and we remain focused on achieving your personal long-term goals! So please stay healthy – both physically and mentally!

Robert L. Riedl, CPA, CFP®, AWMA®

CEO & Director of Wealth Management

 

Mar 19
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How About Some Positive News About the COVID-19 Pandemic?

By News

Some positive news about the Coronavirus from one of our managers:

  1. Vaccine Development: An experimental vaccine developed by Moderna, Inc. began the first stage of a clinical trial on Monday, with testing on 45 healthy adults in Seattle. [link]
  2. China’s new cases plummet: China has now closed down its last temporary hospital built to handle COVID-19. Not enough new cases to warrant them. [link]
  3. Drugs that work: Doctors in India have successfully treated two Italian patients with COVID-19, administering a combination of drugs — principally Lopinavir and Ritonavir, alongside Oseltamivir and Chloroquine. Several are now suggesting the same medical treatment, on a case-by-case basis, globally. [link] [link]
  4. Antibodies to the rescue: Researchers at the Erasmus Medical Center claim to have found an antibody that can fend off infection by COVID-19. [link]
  5. 103-year-old recovery: A 103-year-old Chinese woman has made a full recovery from COVID-19 after being treated for 6 days in Wuhan, China, becoming the oldest patient to beat the disease. [link]
  6. Stores re-opening: Apple has reopened all 42 of its Apple retail stores in China. [link]
  7. Test results in 2 hours: Cleveland’s MetroHealth Medical Center has developed a COVID-19 test that can now deliver results in just two hours, rather than in a matter of days. [link]
  8. South Korea’s dramatic drop in new cases: After its peak of 909 newly reported COVID-19 cases on February 29th, South Korea has now seen a dramatic drop in the number of new cases reported daily. [link]
  9. Mortality rates inflated?: Experts predict that Italy has seen a higher mortality rate of COVID-19 given its significant aging population, as well as its higher percentage of COVID-19 patients with pre-existing health conditions. This might suggest that COVID-19’s fatality rate may have been slightly more inflated than previously thought for the general population. [link]
  10. Israeli vaccine development: More than 50 scientists in Israel are now working to develop a vaccine and antibody for COVID-19, having reported significant breakthroughs in understanding the biological mechanism and characteristics of the novel coronavirus. [link]
  11. Full recoveries: Three patients in Maryland who tested positive for COVID-19 have now been reported to have “fully recovered.” [link]
  12. Isolated virus: A network of Canadian scientists isolated the COVID-19 virus, which can now be replicated to test diagnostics, treatments, and vaccines. [link]
  13. Yet another vaccine in the works: San Diego biotech company Arcturus Therapeutics is developing a COVID-19 vaccine in collaboration with Duke University and National University of Singapore. [link]
  14. Treatment protocols: Seven patients who were treated for COVID-19 at Jaipur’s Sawai Man Singh (SFS) Hospital and Delhi’s Safdarjung Hospital in India have recovered. The treatment protocol will be widely scaled to other hospitals. [link]
  15. Another treatment: Plasma from newly recovered COVID-19 patients (involving the harvesting of virus-fighting antibodies) holds promise for treating others infected by the virus. [link]

Some of COVID-19’s hardest hit nation victims are already emerging strong after peak infection, and biomedical innovators are tackling the virus at unprecedented speeds.

IMPORTANT TO REMEMBER… While everyone is concerned about the super-high mortality rate of this virus — which is calculated by the “number dead” divided by “the number who have tested positive” (currently ~8,000/200,000) — the denominator, i.e. the number infected is actually VERY hard to know because so few people have been tested. It may well be that 10x more are infected but subclinical. So is the mortality rate 4% or 0.4%?

 

Dec 31
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We’ve Moved to a New Home!

By General

Endowment Wealth Management has a new home. This past month we moved to a new Appleton headquarters located at W6272 Communication Court, Appleton, Wisconsin 54914. Please stop by if you are ever in the area and want to check out our new building!

Sep 20
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Fun with Passwords

By General

Cyber security thieves are growing ever-more sophisticated, and it means that all of us need to be more diligent with protecting our digital or online information.

Registered Investment Advisers utilize the interface run by the FINRA (Financial Industry Regulatory Authority) for our regulatory reporting.  Like all cloud or internet based, services, usernames and passwords are required to utilize the site and passwords need to be updated on a regular basis.   Like many sites, Finra has adopted minimum standards in terms of character length and the inclusion of multiple character types within the password.  Finra goes one step further in that the site also maintains a lengthy  “Prohibited List” of words that cannot be included in the password on their site.  Here are a few humorous takeaways that I gathered from the list:

  • Passwords that include the names of popular pro sports teams are prohibited, including COWBOYS, GIANTS, LAKERS, YANKEES, REDSOX, or PACKERS. However, you can use less popular teams like MARLINS, CLIPPERS, or LIONS.
  • BEER, BRANDY & COFFEE are prohibited, but WINE, VODKA, TEA and WATER are permitted (Good news- CARRYINS are allowed!)
  • PEPSI is OK, but you can’t have COCACOLA
  • You can use NICE, but not NAUGHTY.
  • They permit BRUNETTEs and REDHEADS, but not BLONDES.
  • You can’t get LUCKY, have MONEY, or reach for the STARS. You are not allowed to have DREAMS.  You can use GOOD but not GREAT.  You cannot have SUCCESS, but you are able to grab FAILURE.
  • You can have a BURGER but no CHEESE. SALT, but no PEPPER. BREAD, but no BUTTER.
  • You cannot have a BABY, but you can have KIDS.
  • DRIVING and RACING are prohibited, as are MERCEDES, FERRARI, PORCHE, CHEVY, FORD, CORVETTE and MUSTANG. TOYOTA, NISSAN, VOLVO and BMW are OK.
  • DANCING is permitted, but MUSIC is not allowed.

Seriously, please keep your data safe with good password hygiene using these tips:

  • Use different passwords for every account or online profile
  • Use passwords of at least 12 or more characters (more is always better)
  • Do not use birthdays, names of children, pets or other personal information that people might be able to glean from your online social media accounts
  • Always use four different character types (upper case, lower case, numerical and special) when creating a password
  • If you are not sure, use a password checker tool to test the strength of a password
  • If you cannot get creative, use a random password generator
  • Always use multi-factor authentication when its available
  • Use a password manager with strong encryption- do no store passwords in a file on your device

Authored by Tim Landolt, Director of Institutional Services

Aug 15
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Do You Have an Exit Strategy for your Rental Properties?

By Estate Planning, Retirement, Tax Planning, Wealth Management

Owning rental properties is one of the most common investments that Americans make along with their 401k or other retirement accounts. The primary reason why real estate is so popular is because it is easy to understand from an investment standpoint. There are four primary wealth builders associated with real estate; the rental income, price appreciation, loan pay down (equity) and the tax benefits. Additionally, the ability to use leverage (borrow money to purchase a property) makes real estate investing accessible to many people and not just the rich. All of the reasons listed above are why many Americans end up nearing retirement with a few rental properties or in some cases, a substantial real estate portfolio, without a clear exit strategy.

Let’s go over an example to explain how an investor’s real estate investing career may unfold. The investor bought six rental properties over the past few decades for $75,000 each. The properties are fully depreciated and entirely paid off. Throughout the years, the properties have all appreciated and are currently worth $200,000 each. The investor is interested in selling and finding a more “passive” investment vehicle until he realizes the tax ramifications associated with selling the properties. One option for the investor is to hire a property manager. The investor could achieve his desire for a more passive involvement and would not have to pay the taxes that would be due with a sale, however, the headaches of owning real estate do not go away when one hires a property manager. The owner is still responsible for the repairs and expenses and all of their associated costs. Remember, these properties have been owned for decades, they are older and have seen their maintenance costs tick up as they continue to age. Major potential repairs such as fixing a roof or replacing major appliances can seriously threaten an investor’s “stress-free” retirement.

After much thought and debate with his wife, (who by the way I forgot to mention wants nothing to do with the rentals and prefers to be able to travel extensively throughout retirement; often being gone for weeks or months at a time), he decides to sell the rentals and face the significant tax liability. His decision to sell only lasts a few days until he realizes the second major problem of selling the rentals, which is the loss of the income stream during retirement. The income can be replaced with a new investment but the amount in the new investment will be considerably lower after the taxes are paid from the initial sale. Since the amount invested will be lower, the new income stream will likely be lower too.

Afraid of the drawbacks listed above, our investor and many owners of investment real estate simply deal with the headaches of being a landlord and continue to hold the rentals throughout retirement in conflicting views with their spouse. However, there is another option that will allow an investor to sell their rental properties, defer the capital gains (potentially forever) and maintain their current stream of monthly income without the headaches of being a landlord. That option is a DST 1031 exchange into a real estate fund.

A 1031 exchange is a method to exchange an investment property for another “like-kind” investment property and avoid the tax implications from the initial sale. A Delaware Statutory Trust (DST) is a legally recognized trust for conducting business and can be used in a 1031 exchange. The replacement property now becomes an interest in a professionally managed real estate fund.

The benefits of a DST 1031 exchange can be substantial with the primary benefit being the ability to defer capital gains and depreciation recapture. The taxes are deferred until the real estate fund liquidates and distributes the proceeds of the sale. Once the fund is liquidated, the investor has the option to invest the proceeds received into another DST 1031 exchange in order to defer the taxes again. The investor can continue to defer, defer, defer until the original owner passes away. The heirs will receive a step up in cost basis, effectively eliminating the taxes owed from the original sale of the investment real estate. This deferment of taxes is a powerful wealth building strategy that can accelerate the growth of a family’s wealth.

The second benefit of a DST 1031 exchange is the elimination of property management responsibility. As with other passive investments, the investor will not have to make decisions regarding the investment management. Dealing with tenants will be over and the only work required will be the monthly walk to the mailbox to pick up the check.

Diversification is the third benefit achieved. The investor is able to diversify from a concentrated property in one location into a more diversified fund with several properties in different geographical locations. Examples of some property types available include multi-family apartments, NNN retail, self-storage, assisted living facilities, office buildings and medical offices. Often these newer commercial buildings are unattainable to the individual investor but a real estate fund pools the assets of many investors and can access these newer commercial property types.

The final benefit associated with a DST 1031 exchange is the use of the 20% qualified business income (QBI) deduction. This deduction, which was passed with the 2017 Tax Cuts and Jobs Act, allows eligible taxpayers to deduct up to 20% of their qualified business income. Individual owners may not qualify for the 20% QBI since they’re not in the business of owning and managing real estate but since the real estate fund is in the business of managing real estate, the fund qualifies for the 20% reduction.

In conclusion, the DST 1031 exchange provides an investor with a great exit strategy for their real estate portfolio. The headaches of being a landlord are eliminated, the tax liability from selling the properties is deferred (or in some cases eliminated through a step up in cost basis), and the investor benefits from the 20% QBI deduction and continues to receive monthly income from a real estate investment fund.

To learn more, please visit our 1031 exchange webpage at www.EndowmentWM.Com/1031-exchange or contact us by phone at 920-785-6010.

Have Questions? Need an expert opinion?

If you have more questions I’m happy to help you! We make getting answers super easy, without having to talk to some high-pressure sales person. Just use the secure contact form to ask a question, or email me directly at [email protected], and I’ll get back to you via email within 48 hours to help point you in the right direction. I also offer a free wealth discovery meeting where we can discuss your personal situation and make sure you’re on the right path. Remember, it’s free to contact us and we are fiduciary advisors putting your personal needs first and foremost.

Best of Success,

Samuel Moore

Aug 07
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Endowment Wealth Management’s Robert Riedl Named to Investopedia’s Top 100 Advisor’s list for 2019

By News

Robert Riedl, CPA, CFP®, AWMA®, President and Director of Wealth Management for Endowment Wealth Management, Inc., has been named to the Investopedia Top 100 list of the most influential advisors for 2019.

This is the 3rd year of the awards, which recognizes financial advisors who use their media platforms to promote and amplify financial education and improve the practice of financial planning as well as for their significant contributions to critical conversations about financial literacy, investing strategies, life-stage planning and wealth management.

Investopedia strives to promote important conversations among investors and financial professionals of all levels, everywhere.  Financial education is a never-ending journey that requires constant exploration, examination and discourse. The Investopedia 100 is a salute to advisors who are guides of that journey and contribute industry insights to the many Americans who need them.

Unique among financial awards, Investopedia’s proprietary methodology focuses on awarding financial advisors who have demonstrated a top-of-the-industry ability to reach the largest and most relevant financial and investing audience, as measured by the impact and quality of their published work, public appearances, and online following. The 2019 Investopedia 100 also heavily weighed peer-to-peer nominations, highlighting the most influential advisors who were recommended by their peers.

 

Award recognition does not qualify as an endorsement. The Investopedia Top 100 Advisors for 2019 was awarded 8/8/2019 by Investopedia. No solicitation payment was made to the award sponsor to be nominated or to qualify for the award. Judging criteria for the award can be found at: https://www.investopedia.com/top-100-financial-advisors-4427912 .

 

Oct 11
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Is Your Wealth Advisor a Fiduciary?

By Family Office, Retirement

EXECUTIVE SUMMARY

In the universe of financial professionals you will come across many types of individuals all with differing educational and experience backgrounds. Due to the overwhelming number of financial professionals it can be extremely difficult to distinguish one advisor from another. However, one simple distinction can help sort through a vast number of advisors within seconds. Ask them one question: are you a fiduciary advisor? Yes or No!

A fiduciary advisor is one that is required by law to act in your best interests whereas the non-fiduciary advisor (ie: stock broker) may face a strong conflict of interest when recommending “suitable” investment solutions to you which often lead you, the investor, down a path that is not in your best interest. Read More