A brokerage account is a “non-retirement” account with no contribution limits, no income limits, and no penalty for taking money out before age 59 and a half. It can go by many names: individual account, joint account, gap account, bridge account, non-retirement account, cash account, business account, or margin account, to name a few. It will never be the advice from a Whitaker-Myers Wealth Managers SmartVestor Pro to borrow money from a bank to invest, so please be very careful about opening or using a margin account. What Can a Brokerage Account Be Used For? A brokerage account can be used for anything. Want to save for a vehicle over the next five years and allow that money to work for you? Dollar-cost average your money into a brokerage account and invest it as conservatively or as risky as you would like! Want to put your emergency fund to better use? Move it over into a brokerage account, and one of our SmartVestor Pros will invest it into the Schwab Money Market, which is currently yielding about 5.26% as of 11/13/2023. Want to save for a down payment on a house? Talk to your local SmartVestor Pro to go over your options. What Are the Tax Implications of Using a Brokerage Account? Brokerage accounts do not have the tax benefits your traditional 401(K) or a Roth IRA has. When it comes to a brokerage account, you have short-term capital gains/losses and long-term capital gains/losses. A short-term capital gain is when you sell the position within one year of holding it, and there is a gain. A short-term capital gain is taxed at your ordinary income tax rate. Here are the 2023 ordinary income rates: A long-term capital gain is when you sell the position after holding it longer than one year, and there is a gain. Here are the long-term capital gains tax brackets for 2023: If you have any tax questions, please get in touch with our Tax ELP, Kage Rush. When Should I Open a Brokerage Account? When you’ve maxed out your employer-sponsored retirement account(s) and your Roth IRA(s) When you are looking to invest more than 15% of your income (Baby Steps) When you want to retire early and avoid early withdrawal penalties When you have a long-term savings goal and want to make your money work for you This would be using it for a sinking fund to save for things such as: Down payment for a house A new (to you) car Home repairs Wedding Vacations What Is the Difference Between Retirement Accounts and Brokerage Accounts? Source: Ramsey Solutions Want To Open a Brokerage Account? Talk to your local SmartVestor Pro. Our team of advisors is happy to walk through any questions you may have and help guide you through your investing process.

When Should I File the FAFSA? As you may already be aware, the Free Application for Federal Student Aid (FAFSA) is not yet open and won't be until sometime in December or possibly January 1st. I've already gone over some of the major changes in September's newsletter. FAFSA simplification has been a topic of discussion for several years, with the aim of making the process of applying for federal student aid easier for families. The intention is commendable: simplify the form, reduce barriers to apply, and make college funding more accessible. So far, I would characterize FAFSA simplification as FAFSA Complication. However, "simple" is relative. While these changes are aimed at simplification: Some families might still find the process complex, especially if they're unfamiliar with financial forms or if they have unique financial situations. There's always a learning curve with new systems or processes, so there might be confusion initially as applicants and financial aid offices adapt to the changes. The underlying principles of the FAFSA, assessing a family's financial situation to determine aid eligibility, remain complex, and while the form can be simplified, some intricacies are inherent to the process. Each month, we provide you with tips on the best ways to pay for college regardless of your financial situation in our College Planning Monthly Update. This is the first year that parent contributions to their 401(k), 403(b), and 457 retirement plans will not be counted as discretionary and will no longer be counted against you when you apply for financial aid! If a retirement plan contribution is on your W2, it will NOT count against you. However, IRAs, Simplified Employee Pensions, SIMPLE IRAs, Keogh, or any other retirement plan contributions that appear on your 1040 Schedule 1 WILL count against you. A suggestion from our financial advisors would be to go ahead and fund those W2 retirement plans to the max. It will reduce your taxable income and increase eligibility for financial aid. This may be the most positive change ever made to the financial aid formulas because it may enable you to INCREASE your retirement account contributions while, at the same time, reducing your future out-of-pocket college costs! Contact me at 330-345-5000 so that I can run the analysis for your particular circumstances. The financial aid system has more trapdoors and landmines than ever before. Do everything you can to avoid mistakes by preparing now for the financial aid process. If you would like to go through our College Planning Process with our Financial Coach, Lindsey Curry, please reach out to her today! Authors: John-Mark Young Lindsey Curry

What should you be looking for when searching for a Financial Advisor? Dave recommends that you ask the following when getting to know a prospective advisor: What do you love about your job? What services do you provide clients? What is your investment philosophy? How will we communicate about my investments? How do you get paid? How will you measure and evaluate my investment performance? Tell me why your last two lost clients stopped working with you. Although we agree that these are great questions to ask when choosing your advisor, we at Whitaker-Myers feel there is one more trait to note: the Heart of a Teacher. This so happens to be our firm’s number 1 core value. So, before you ask your potential advisors these critical questions, we encourage you to see what they teach you first. This article will explore why these questions are essential and what their potential responses could mean for you, your money, and your future. What do you love about your job? This question is great for building rapport. You want to find someone you trust, someone you enjoy being around, and someone who helps you understand why we are doing what we are doing for you. People could love a multitude of things about their jobs. It could be the analysis, the client relationships, the newness that every day brings, and an infinite number of other things about this profession. Ultimately, it is up to you to figure out what personality you gravitate to. What services do you provide to your clients? This is a crucial question in the fact that their answer depends on whether or not they can help you accomplish your goals. For example, if you want life insurance but they don’t have their life insurance license or someone in their firm to refer you to, check them off the prospects list. If you want a financial plan but they only do asset management, maybe they aren’t the right fit for you. We suggest finding an advisor offering the broadest range of services, with lots of experience in each criteria area. These criteria are: - Tax planning - Investments - Retirement planning/Financial Plan - Estate planning - Insurance Planning Bend their ear as to how they incorporate each aspect of those criteria in their services as a firm. What is your investment philosophy? My answer to this is simple. We like to invest in Dave’s 4 categories of Growth, Growth and income, Aggressive Growth, and International, broken up into appropriate 25% increments. Being able to discuss the differences in each is essential, too. Not every advisor will have the same philosophy, and that is okay. You need to find the right philosophy for you. Risk tolerance, age, situation, retirement, etc., can all impact your personal investment philosophy. Make sure the firm you choose aligns with your goals and preferences. How will we communicate about my investments? Find an advisor that responds to your emails as you find appropriate. Find an advisor who answers your calls or calls you back in a manner that you find suitable. Come into your prospect meeting with an idea of how often you’d like to review your financial situation. Is that four times a year, twice a year, or even annually? Everyone is different. Through these meetings, phone calls, emails, etc., your advisor should keep you up to date on your investments based on the level you find appropriate. How do you get paid? When asking this question, you should have a general idea of how advisors are compensated. They can be paid in a multitude of ways, but here are the most common: Assets under management Generally, 1-1.3% of the dollar amount you have charged annually Ex. You have $10,000 to invest; you will be paying roughly $100 each year for that professional management Insurance commissions Your advisor could have the ability to sell Life, Health, Disability, and Long-Term care insurance This usually pays a commission on these sales Investment commissions Some firms incentivize their employees to put you in their firm-specific funds. Those can come with load fees on mutual funds, which means there is an upfront charge to buy a mutual fund. Fee for Plan Some advisors like to forgo asset management and charge a fee for a financial plan. This often happens when clients do not want asset management but want advice on their current financial situation. These fees range from a basic $500 plan to a comprehensive $5,000 + plan. The comprehensive plan is suitable for larger net worth clients looking to get a snapshot of their financial situation without turning over their assets to an advisor charging for Assets under management. Look for an advisor with the professional designation CFP® next to their name if you want to employ an advisor for this service. Here at Whitaker-Myers, we can offer a fee-for-plan service from the team of CFPs we work with. Contact an Advisor if you are interested in learning more about this. *Note: Ensure you hear that the firm you are prospecting is a fiduciary, meaning they put your interest above their own. How will you measure and evaluate my investment performance? Search advisors who can answer this question by mentioning the 4 categories and their corresponding market indexes like the S&P 500 (growth) or Russell 2000 (Aggressive Growth). Most advisors evaluate your investment performance based on how the markets that correlate to your investments are doing in that period. Tell me why your last two lost clients stopped working with you. Keep your ears perked up for anything questionable, and pay special attention to those who don’t give an example. Honesty is what this question should bring, so a transparent advisor is one you can trust. The power of speaking with your advisor Everyone has different goals and timelines with their money, so speaking to a Financial Advisor or Financial Coach about your specific needs and goals is essential. Please contact one of the Financial Advisors or Coaches at Whitaker-Myers Wealth Managers; we would be happy to help!

With Halloween over, the Holiday Season has now officially begun! And if you are anything like the stores, some of you may be getting your Christmas tree out this week. Now, I am a “let the bird have its day” kind of girl, and I have the decorative hand towels to prove it. But that doesn’t mean you can’t be proactive with Christmas this early. Holiday Prep Season – September & October As much as I hate to admit it (as stated above, I like to give Thanksgiving its day), if you start thinking about Christmas in September and October, you are actually setting yourself up for a less stressful holiday season. I know it may seem like we are rushing our days, but as I tell many of my coaching clients, one of the best ways to stay on track with your budget is to be proactive rather than reactive with your dollars. By laying out who you need to purchase gifts for this holiday season and outlining how much you want to spend on each person, you can better spread out the money spent so it is not all hitting at once. Lay it all out Chief Operating Officer Amanda Sharratt recently did a Question of the Week video on this topic and helped lay out how to tackle a way to organize this list collectively. She suggests creating a spreadsheet (or emailing us to send you our Holiday Spending Template!) that lists all family and friends you need to purchase items for and the associated dollar amount. The spreadsheet even includes columns for ideas to get them, notes for when you bought them an item and a place to say when they are “check mark – done!”. This spreadsheet can be a one-place stop for all your holiday gifting organization, allowing you ease for “checkin’ it twice.” Game plan how to spread it out Ideally, once you get comfortable with this system and start working ahead to detail out the “who and how much” for each year, you can begin working towards creating a sinking fund. This will allow you to save for these purchases all year long with a small amount being put aside each month, so the cost of the holidays doesn’t fall on just the last few months of the year. Even if you have not started a sinking fund yet, putting some money aside now will help take the burden off your shoulders come December with costs. Search sales and discounts Take advantage of the holiday sales or “special event day” discounts many businesses are putting out in the very fast-approaching days. Scope out these deals and see how they can benefit you by checking items or loved ones off your Christmas list. However, my disclaimer is, don’t buy just to buy because “it’s a good deal” or “on-sale.” This is an impulse purchase and exactly what the marketing teams and businesses hope for from you. Another thing I say to my coaching clients is to be intentional with your spending. The same can be said about your gifting. Be intentional Remember, no one needs just “stuff.” So, when thinking through your gifting options or ideas for someone, try to think through what this person enjoys. Perhaps it is not an item at all. Maybe it is an experience of some sort (things that come to mind are theater tickets, art classes, cooking classes, and sporting events, to name a few). Memberships to splash parks, zoos, or other museums are great ideas for young children as these are gifts they can enjoy with their families all year. And lastly, one of my recent favorites as an adult is a gift card! Homemade comes from the heart Amanda mentions about the thoughtfulness of handmade gifts. And I could not agree more with her on this! Do not undervalue this gift idea! I spoke to someone recently who went to one of those painting pottery places with their children as a fun day activity. They each picked out one item for their grandparent and painted it specifically for them to give as their Christmas present. What a fun idea! Not only are they having a memorable day with their children, but they are also helping with their Christmas shopping list. Holiday Budgeting Budgeting for additional costs, such as the holidays, can be stressful. Especially when monthly expenses seem stressful enough already. By planning out upcoming purchases, having a game plan, and capping your holiday spending, hopefully, you can eliminate more stress than needed this holiday season. Our financial coach helps create budgets that fit your lifestyle and helps you plan for upcoming expenses, like the holidays. If you are interested in learning more about budgeting or want to talk to our financial coach about being more proactive with your holiday planning, reach out and schedule a meeting today!

I recently stumbled upon a stat that got me thinking. It said, "that people who work longer are living longer". We've all heard the proverbial story of the person who retired and died within weeks. Could it be that God wants us to continue our work well past age 65? I think the answer might surprise you. Now we are uniquely positioned to help answer this question because 95% of the reason most people darken our door is retirement planning. People know that at some point, their desire to do what they are doing today may erode, and they want to refocus how their time is spent. I’m sure I’ll give you a perspective quite different from many of the other financial advisors you've ever talked to. That’s because our firm is rooted in Biblical principles, and we view the world through a Biblical worldview, which means we take the Bible at its word and believe that it is sufficient for all teaching today, in the past, and in the future. The apostle Paul, in his letter to Timothy (2 Timothy 3:16 – the other 3:16 verse) said: “All scripture is breathed out by God and profitable for teaching, for reproof, for correction, and for training in righteous.” Therefore, work for a Biblically based Advisor goes back to IN THE BEGINNING. The beginning of the earth with Adam and Eve. Work was here before sin entered the world, thus work was part of God's initial, perfect design for humans and the Earth. In Genesis 2:15, we learn that “The LORD God took the man and placed him in the garden of Eden to work it and watch over it.” So we learn that work is normative – it is part of what God designed us to do. We would argue your work is not done until you die. If work is a God-ordained thing, then why do so many people hate it? Well, it's because for many people, their work does not have any purpose. It’s a means to an end. For many people, they want to retire from something as opposed to retiring to something. When it comes to retirement – when your job is golf or anything else lacking purpose, people don’t have the fulfilled retirement they could or should be achieving. Research has shown that 27% of people who retire today return to work in just 4-6 months. Why is this – they lack purpose. They lack a meaning to their life. The meaning they did have (from work), even though they may have hated it – was at least meaning and purpose. Do you know what people hate more than work they hate? No meaning and purpose! And as described above, God did not make us for no purpose or meaning. A fellow Financial Advisor and Christian brother Wes Moss wrote a trendy book titled, “What the Happiest Retirees Know.” He looked at all the quantitative and qualitative factors that drove people to describe their retirement as happy. Sure, there were some math things in there, like you should have XX amount saved and you should have your mortgage paid off, etc. But the most impactful things to people's retirement happiness were people and purpose. The people side of it was simple: retirees’ who were within an hour of at least half their kids were happiest, and people with at least 3.6 close personal relationships were most happy. So people make a difference, BUT….. A real key to success was the happiest retirees didn’t actually retire. They refocused. The happiest retirees had at least 3.5 core pursuits in their lives that filled their time with things that gave their life meaning and purpose. Many of these core pursuits are tied back to people’s church. How could they get involved in ministries within the church that helped them fulfill The Great Commission and the hole in their own lives created by retirement? Ecclesiastes 2:24 says, “There is nothing better for a person than that he should eat and drink and find enjoyment in his toil. This also, I saw, is from the hand of God.” Additionally, in Ecclesiastes 3:12-13, “I perceived that there is nothing better for them than to be joyful and to do good as long as they live; also that everyone should eat and drink and take pleasure in his toil – this is God’s gift to man.” How ironic. Wes’s study shows that people need people and purpose to enjoy retirement, and the Bible had already clarified that for us – 2 Timothy 3:16 bringing Deja Vu? And if that isn’t enough evidence, another recent study showed that if you delay your retirement by one year, you increase your longevity by 11%. So not only are you making yourself happier in retirement, but you are potentially increasing the longevity of retirement. One extra year of work for three extra years of life (assuming the average retirement is 30 years) is a pretty good tradeoff, especially when considering what that extra year probably did to your Social Security benefits and 401(k) growth – as we know the most significant growth from your retirement plans comes in your latest years because you have the most amount of money. Essentially, we learn from the Bible that man is to work his entire lifetime. God did not intend for us to spend our last twenty years on this earth in leisure. There is undoubtedly a rhythm to work and leisure, and perhaps there is more leisure enjoyed by someone in retirement than that of a person in the heart of their career, but it can’t be all leisure. Retirement to leisure was never a part of God’s plan for you – there is Kingdom work to be done, and the person who no longer has to clock a 9 – 5 now has a more extraordinary ability to do that Kingdom work. It’s all about getting to that Matthew 25:23 moment in our life where Jesus told the parable of the talents, and the master said to the servant, “Well done, good and faithful servant! You were faithful over a little; I will set you over much. Enter into the joy of your Master.” As a practitioner in this field for nearly 14 years (since 2007), I’ve seen many people retire. The ones that do it the best have a plan for how they’ll fill out those 3.5 core pursuits that Wes Moss talks about, and many times, they take a practice run or two at it. They slow their career work down to part-time or at least something less intense than it was at its peak, and they start to enjoy more leisure and other core pursuits that take a higher priority in your life. Go to the Christian Children’s Home of Ohio and spend an afternoon around those kids and then tell me your work is more important than investing in their souls. That’s how this is done right - find what drives you, find your kingdom passion and then, as it’s famously said, you’ll never work a day in your life (at least in retirement 😂).

Seeing my favorite team play would be fun, but can I afford it? Sometimes, this is one of those discretionary spending categories we want to spend money on. Still, we are unsure if it is in the budget or what the priorities should be regarding non-mandatory spending categories. That category is live sports for me. Very few people can afford the money and/or time to see every pro or college game of their favorite team, but most passionate or even casual fans would welcome seeing at least a game or two live. If you have debated seeing a game live but are hesitant about costs, read along for the best way to see your favorite team. The first step in deciding if you can even afford to explore your options of attending in-person sports is making sure there are actual discretionary dollars in the budget to go at all. After you have answered yes and thought through other ways to spend your money and decide to prioritize going to a big game, let’s explore ways to make it more affordable. Money-saving tips that work in each of these categories for virtually any live game you attend: Purchasing Tickets Once you have selected a game or two you want to see, almost always your most significant expense is the tickets themselves, so exploring all your options to get the best price for tickets is always the best policy. Just like the stock market, you have two broad categories for buying tickets: the primary and secondary market. Buying directly from the team is the equivalent of buying in the primary market, and purchasing through a ticket broker or someone “off the street” is the same as going to the secondary market or buying through a stock broker or financial advisor. Similarly to stocks, you sometimes get a better deal on the primary market, or sometimes the secondary market will provide a cheaper ticket to go to the game, more affordable than many others at the same game. The primary market will only have one option, but the secondary market will have several. Shopping through Stub Hub, Seat Geek, eBay, and the team-endorsed secondary markets is best, as sometimes the prices vary a fair amount. It is always good to do your homework and check all options. If it is a high-demand game, going directly to the team (primary market) will probably be a lower price. If it is not likely a sell-out and is a lower-demand game, then you likely can find prices well below the face value of the ticket the team sets. One fun, entrepreneurial way to reduce your cost of tickets if you want to go to multiple games is to buy season tickets. Usually, you will receive a little discount without fees for a more significant upfront cost. Then, you can sell some of the highest-demand games at a profit, reducing the overall cost of the games you attend. This strategy usually works well if your team is very good and in a larger market. If your team is one of the worst in the league and in a smaller market city, this strategy is riskier and could make the tickets more expensive and sap more out of your discretionary budget than you intended. The night of the week or the team your team plays If the top priority is seeing your favorite team live, with the when and who they play as secondary concerns, then seeing them on an “off” day/night could be a possible option and should save you anywhere from 10% up to 100% of the cost compared to playing a good and popular team on the weekend. A random Tuesday game against a small market team will provide significant savings versus a game on a Saturday against the best team in the league. Avoiding National Followings Every sports league has teams with a national following, but some teams have larger followings than others. This means there will be fans who live in or near your city that will watch the opposing team, which drives up ticket prices for a game against your “home team” and the opposing out-of-town team. Some examples of teams with a larger national following are the Celtics, Lakers, and Knicks in the NBA, the Cowboys, Raiders, and Steelers in the NFL, and the Yankees, Dodgers, and Cubs in the MLB. So, if you want to see your team at a reasonable price, we suggest avoiding games against these larger (national following) teams, especially on the weekend. You usually pay significantly less for your game during the week against a less popular team. *Sidenote: Going along with this idea, a top-rated player in whatever league your team is competing in will drive up the cost of tickets, so you may want to avoid having to pay that premium. Parking This expense will rarely be as expensive as the game tickets, but similarly, the prices vary, and you are wise to do your homework on your options. This can be trickier to shop for because not all costs can be found online. Most of the time, parking garage prices can be found online, but there are sometimes cheaper options. On a side note, parking garages usually take the longest to get in and out of, so if you are pressed for time or impatient, you likely want to shop for an alternative. One general principle to apply is the further away from the stadium you park, the cheaper it will be, and as you get closer, the cost goes up. If you are not in a rush and don’t mind walking a distance, you may find spots on the street for free or need to put a few dollars in a meter. Finding an off-street lot medium distance (a quarter to half a mile) from the arena is the best value for many games. The best decision is usually the combination of a fairly safe, easy to get in and out of, and lower cost than right by the arena or in a parking garage. The cost range can vary by city and cost of living there, but generally, on the low end, it is $10 for a decent walk on a lower-demand game and as high as $60 for a high-demand or playoff game near the arena. Another universal cost saving to sporting events that usually applies is to use public transportation. Taking a bus or train usually costs only a few dollars and prevents you from sitting in traffic or driving around to find a parking spot. In some cities, this may be a better option than others. Still, this is usually an excellent option if you don’t have several young children or are uncomfortable with public transportation. Food/Concessions If you are not experienced with going to pro or big college games, this cost can sneak up on you. If you think it will cost similarly to going to the high school cafeteria for your son or daughter’s high school game, you are in for a rude awakening. Buying just a hot dog and soda to wash it down will cost at least $10. Going to a game hungry with a family of four could easily set you back $100 or more. One obvious cost savings is eating a hearty meal before taking off for your game, so buying concessions is unnecessary. Attending the game is to cheer on your team, not to sample average-tasting fast food. Coolers and book bags are not allowed to be brought into a game, but in most arenas, having a protein bar in your pocket and water or juice in a clear plastic bag is acceptable. This can have the same effect as enjoying a snack and not being overly hungry while providing significant savings. Occasionally, electronic tickets have loaded food voucher credits, so checking to see if they are loaded on your purchase tickets is worth checking. Go in a big group or look for discount or promo nights Most teams will offer group rates for at least ten people or more. Going in a big group may be more fun and save everyone some cost off their ticket. Some games may target specific demographics, so if it applies to you, look for family, ladies, or college night as examples of teams offering a discount. Watch your team’s minor-league affiliate If a pro game isn’t in your budget today, going to an affiliate (minor league) game could be a good alternative for a more reasonable cost for a similar experience. Baseball, basketball, and hockey all have minor league teams, usually reasonably close to the parent team you cheer for, making this a viable option for most fans. Watching your team's future stars while young could be a neat option and allow you to be more vested in watching their development. This can also be a good option for getting “good” seats for once because the stadiums are smaller, and you will likely be pretty close to the action regardless of where you sit. After all, even if it is in minor leagues, these are pro athletes who will display considerable size, speed, and talent, which is even more impressive from the closer view. Although football does not have direct minor leagues, they have alternative leagues, like the USFL and Arena football, which, although they may not be affiliated with your long-time team, for sports junkies, these games can still be fun and provide significant savings. Enjoying the Experience at a Reasonable Cost Of course, having friends or family over to watch a game on TV is the best savings, but going to just one game can help you feel even more connected to your team and bring the games you watch on TV even more to life. Like any other activity or item you want to save money on, getting the best pricing takes effort, research, and planning. The more times you go through the process, especially for the same teams and arenas, you will become more efficient and add more savings strategies. For those who take the time to implement these tips, the savings can easily be in the hundreds of dollars for families, leaving them even more satisfied with their pro sporting event experience. Outside of trying to cut down costs of the experience, if you are trying to budget and still enjoy a sporting event, perhaps some of these tips could be of some use to you. If you are trying to be more aware of how much you are spending each month, we have a financial coach who specializes in creating tailored budgets. Schedule a meeting with her today if you are interested in becoming more aware and understanding of how your dollars are being spent.

Investing Terminology Overview Getting started with investing can be intimidating for many people simply because they do not understand the jargon used in the investment world. News media hosts and financial advisors are notorious for using acronyms and terms that average or new investors are unfamiliar with. A common word for this is “Finglish” or “Financial English.” Whether it is to try and impress their audience or sound more intelligent than they are, using “Finglish” more often than not will turn a would-be investor away. As with all our advisors at Whitaker-Myers, my goal is to advise with the heart of a teacher. This article is intended for people new to investing or considering investing, but it might also be a nice refresher for the investor with more experience. Here are some different terms that should help you become more comfortable investing. Always consult a professional before investing so you understand the risks associated with investing. Investment Terms Security A security is a stock, bond, mutual fund, or other investment that can be traded. The Securities and Exchange Commission (SEC) regulates securities trading. In case you are wondering, gold is not considered a security. Asset An asset is anything that has economic value with a demand to buy. Stocks, bonds, cash, and real estate are all examples of assets. Asset Allocation Asset allocation refers to how investments in a portfolio are chosen to match the risk tolerance and goals of the investor. Blended asset allocations include stocks, bonds, cash, or alternatives like real estate or commodities. Proper asset allocation differs for each investor and can best be determined by speaking with a financial professional. Return Return is the profit or loss made from an investment. Investment Risk Investment risk is the degree of uncertainty and/or potential financial loss from an investment. All investments carry some degree of investment risk. Liquidity Liquidity is the ease of turning an investment into cash and how much it will impact the price. Examples of liquid assets include cash, stocks, mutual funds, and ETFs. Less liquid investments include real estate, annuities, and precious metals. Capital Gain A capital gain is the increase of the value of a capital asset, such as a stock, that ultimately has a higher value than when it was purchased. Ticker Symbol A ticker symbol is an abbreviation (usually one to five letters) used to identify a publicly traded company on a particular stock exchange. Ticker symbols are often used for pooled investments like mutual funds and ETFs. Here are a few examples of some publicly traded companies and their ticker symbols: Amazon (AMZN), Tesla (TSLA), Walmart (WMT), Coca-Cola (KO), and Alphabet (GOOGL). Stock A stock is a security that provides proportionate ownership in a publicly traded company. Stock is a broad term that can mean a single or multiple publicly traded companies. Stocks are bought and sold mainly on stock exchanges, a marketplace for these transactions. A share of stock is a specific number of units owned by the investor that represents their ownership percentage in the company. For example, as of this writing, there are 15,787,154,000 outstanding shares of Apple (AAPL). When you buy a share of Apple stock, you purchase it from another investor, selling it on the open market at a given price. If you buy one share of Apple stock, you become 1/15,787,154,000 owner of Apple. A company's stock price will increase or decrease depending on market conditions, economic conditions, company-specific events, etc. There is no guarantee that the investor will make money when investing in stocks, so they inherently carry more risk than other types of investments. However, buying the right stock at the right time can be highly financially rewarding. Bond A bond is a type of security that a company or government issues to raise capital (money). Essentially, a bond is a loan to the issuer, and you, the investor, are the lender. The bond issued is a legal obligation on the issuer to repay the principal loan, plus interest to the investor. Bonds carry less risk than stocks, but they are most definitely NOT risk-free. Interest rate risk, reinvestment risk, default risk, and liquidity risk are just a few risks associated with bonds. Bonds also have ratings that tell the investor the level of risk they can expect when deciding whether to invest. Lower-risk bonds typically have lower returns, and higher-risk bonds usually offer higher returns. Check out the table below to see different bond ratings and the level of risk they carry. Any rating below BBB is considered a “Junk” bond. Expense Ratio An expense ratio is the cost to the investor that a mutual fund or ETF charges to manage the fund. It covers all the fund's expenses, including management, administration, advertising, etc. The expense ratio is built into the fund's daily net asset value (NAV) and is not a separate charge to the investor. The formula to calculate a fund’s expense ratio is The Total Fund Costs divided by The Total Fund Assets. Net Asset Value (NAV) Net asset value, or “NAV,” is an investment fund’s total assets minus its liabilities. The formula to calculate the net asset value per share is Fund Assets minus Fund Liabilities divided by Total Shares Outstanding. Mutual Fund A mutual fund is an investment where pooled money from multiple investors gets invested in stocks, bonds, or other securities. Investing in mutual funds gives investors more diversification than they would earn from buying an individual security. A stock mutual fund, for example, might invest in all 500 companies that make up the S&P 500. Now, the investor is diversified across 500 companies instead of one, which can mitigate risk. Mutual funds are also managed by a Fund Manager (often an entire team) whose job is to attempt to achieve the goals of the fund they manage. ETF (Exchange Traded Fund) An ETF is like a mutual fund in that it is pooled money by multiple investors that gets invested in stocks, bonds, or other securities. One significant difference between mutual funds and ETFs is that a mutual fund only trades once daily after the market closes at 4:00 p.m. Eastern, and ETFs trade “intra-day” between 9:30 a.m. and 4:00 p.m. EST while the market is open. Also, ETFs tend to be more tax-efficient than mutual funds because of their structure. Large-Cap A company with a market capitalization value of more than $10 billion. If you are familiar with Ramsey Solutions, this will fall in the Growth or Growth & Income category of their 4 categories. Mid-Cap A company with a market capitalization value between $2 billion and $10 billion. Small-Cap A company with a market capitalization value between $250 million and $2 billion. Both Mid-Cap and Small-Cap would be considered Aggressive Growth in the 4 categories. This video on our YouTube Channel discusses the Ramsey Solutions 4 categories of Growth & Growth & Income (Large Cap), International, and Aggressive Growth (Small-Cap and Mid-Cap). We also give examples of stocks that would fall into those categories. Working with an advisor This list barely scratches investing terms' surface but is a good start. You do not need to know everything there is to know about investments to get in the market and start investing for your future. A great place to start would be to schedule a phone call with me or one of our other advisors. We are not the type of advisors that will “Finglish” you out the door. We aim to help you understand the importance of investing and planning and how crucial they are to help you reach your financial goals.

I'm going through the Certified Kingdom Advisor material right now. It's great - thought-provoking, Gospel-centered, and it's challenging me. Challenging me to think about things from more of a Kingdom mindset. Here are some things I've been mulling around: Giving While in Debt? You know the stat...... 7 out of 10 Americans are living paycheck to paycheck, and our recent bout with inflation has only exasperated those issues within the country. So how do we counsel the person in debt to deal with giving as it relates to their daily budget? In 1 Corinthians 16:2 the apostle Paul said, “On the first day of the week let each one of you lay something aside, storing up as he may prosper, that there may be no collections when I come.” We tend to think about giving as the last phase of our budget. But instead, the apostle Paul is telling us it must be at the top of our budget. It must be the first thing that we do. He is essentially telling us: WE SHOULD GIVE. Now, there are some practical ways to make this happen. First, it should be proportionate to the situation you find yourself in. Many times, if someone is deeply in debt, we may encourage them to give still, but being gazelle intense with paying off their debt will allow them to quickly get to a position where they can give a tithe, plus an offering, plus spontaneous giving. Second, it should be systematic, out of your income. Why does your electric bill never go unpaid? Why does your mortgage never go unpaid? Because they are highly important and you have a systematic process for them, or said another way, they are automatically paid. That is how you can be a more effective giver. First, determine what you should be giving and then make it automatic. Then it’ll happen, and just like everything else (mortgage, electric, etc.), you’ll force yourself to budget around it. Why Should a Christian Be Giving? Breaks The Power of Money Remember, giving can be challenging at first, especially when you feel like there are competing interests; however, there are benefits within your spiritual life that giving will help you master. The first of which is giving breaks the power of money. Money has no power over me when I freely give it. The Apostle Paul again says in 1 Timothy 6:10, “For the love of money is the root of all kinds of evils. Through this craving, some have wandered away from the faith and pierced themselves with many pangs.” Notice Paul does not say that money itself is evil – many with an unhealthy relationship to hating money will say this is so, but it’s not. It’s the love of money. How do I live out that I am not in love with money? I freely and generously give it away. In Matthew 6:19-24, Jesus further tells us, “Don’t store up treasures here on earth, where moths eat them and rust destroys them, and where thieves break in and steal. Store your treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal. Wherever your treasure is, there the desires of your heart will also be. Your eye is like a lamp that provides light for your body. When your eye is healthy, your whole body is filled with light. But when your eye is unhealthy, your whole body is filled with darkness, how deep that darkness is! No one can serve two masters. For you will hate one and love the other; you will be devoted to one and despise the other. You cannot serve God and be enslaved to money.” Giving Helps Us To Recognize God's Ownership The difference between a Kingdom-based Financial Advisor and a normal (albeit good one) is that they recognize that God owns it all. 1 Chronicles 29:11-12 says, “Yours, O Lord, is the greatness, the power, the glory, the victory, and the majesty. Every in the heavens and on earth is yours, O LORD, and this is your kingdom. We adore you as the one who is over all things. Riches and honor come from you alone, for you rule over everything. Power and might are in your hand, and it is at your discretion that people are made great and given strength.” What a powerful verse. As I recite that verse, I can almost feel that power that God owns it all and everything is His and under His control. Thus, when we give, we recognize that God first gave to us His Son and then everything that is good and precious in our life, including any financial blessing. Thus, giving it back to him is just as if your mother made you a wonderful dessert and asked you as she freely gave it to you without stipulating if she could have a bite. You’d be crazy to tell her no. And we’d be just as crazy to not give back to God. Giving is An Act of Love It’s a natural, practical way to be the hands and feet of Christ on this earth. 1 John 3:17 says, “But whoever has the world's goods and sees his brother in need and closes his heart against him, how does the love of God abide in him?” When I think about Christian and non-Christian people in different parts of the world, through no fault of their own, having to work 10 times harder than any American to make 1/100th of what any American on minimum wage will make – that motivates me to not spend the next dollar on something that has no eternal impact when I can bless that brother or sister? This is why you should keep a $20 bill in your pocket and find a real practical way throughout the week to give it to someone in need. If you don’t find or run into one, consider that a sign from God that you should give that to a ministry that serves third-world countries. A favorite of mine is World Vision, which helps sponsor a child in poverty. They help that child and their community stand tall from poverty through the name of Jesus Christ. I know each week, I’ll be giving away $20 in some way, shape or form. Helps Gain Eternal Perspective & Gods Promises The following two I think of as a brother and sister benefit of giving. First, it helps me to gain an eternal perspective, which can be hard to do in a wealthy country. Jesus said in Matthew 19:24, “Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich person to enter the Kingdom of God.” Paul in 1 Timothy, 6:18-19 says, Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.” Second, God has promised me a blessing for giving. In Matthew 25:23, Jesus said, “Well done, good and faithful servant, you have been faithful over a few things. I will make you ruler over many things. Enter into the joy of your lord.” Now I should be very clear here. I’m not talking about a Joel Osteen type of love God, give to the church, and you’ll be happy, cured of cancer, and free to live your best life now! That giving mentality is undoubtedly from the pits of hell. I’m talking about your giving storing up eternal value for you, which you can’t quantify, and that’s ok, and where God quantifies it as much or little, I should be fine. Just as the parable of the workers in the vineyard in Matthew 20 – help me to not be like the servants that started early and were given just as much as the servant that started in the 11th hour. That’s not my decision, but God owns it all anyway, correct? I should count myself blessed to be part of His kingdom. Where Should I Give? You might have asked, where should I be giving to? The Bible is clear that giving should be given to the local Gospel-preaching church. You should support your local church to meet the needs of your local body of believers, the community they operate in, and for the furtherance of the Gospel and God’s love with that said community. As mentioned earlier, we should look for ways to give to the needy within our communities and the world. With the technology we have been blessed by through excellent entrepreneurs like Elon Musk (I love that dude!), we can now provide giving halfway around the world in seconds. Finally, we should give to further the Great Commission. Find a missionary, perhaps affiliated with your church, perhaps not. I have supported missionaries like The Starkey’s in Haiti, Daniel & Katie Hackett in Mongolia, and Ben & Jessie Simmons in a part of the world we can’t mention. Economic Benefits of Giving As a financial planner, I’d be remiss if we didn’t discuss the economic benefits of giving. While not the reason we ever start to think about giving, there are reasons from a monetary perspective that can improve your cash flow and tax situation. The most predominant thing we typically engage clients with is their required minimum distributions. Quit taking those, paying taxes on them, and letting them sit in your bank account. Do a Qualified Charitable Distribution and use that money for Kingdom purposes: your church, the needy or for the Great Commission. I wrote all about that here: TAX REDUCTION IN RETIREMENT - QUALIFIED CHARITABLE DISTRIBUTION (QCD) (whitakerwealth.com). Of course, many of you are too young to think about this particular strategy today, but it does help you to realize there are economic benefits to giving. Finally, as I think about my own personal thoughts on giving – I must admit – that I am a work in progress. But that’s why Kingdom Advisor training is so necessary! If you want to be good at something, like giving, that you’re not good at, you must be intentional, as we discussed above, and you constantly remind yourself of the overarching truth that governs all of this. GOD OWNS IT ALL. I need that reminder in my life in the morning, afternoon, and evening! I hope this was helpful as we together strive to be better members of God’s Kingdom, not the kingdom of this earth.

The term “money market” often gets brought up when discussing different savings options, but what exactly is a money market? There are two types of money markets: “Money Market Accounts” and “Money Market Mutual Funds”. So, what is the difference between these two? Money Market Accounts Money market accounts are almost a combination of checking and savings accounts. They offer interest rates like savings accounts, but they also provide debit cards and checks like checking accounts. Much like savings accounts, money market accounts rules and rates differ from bank to bank. Some banks require a minimum deposit for their money market accounts, whereas others do not. They are also FDIC-insured like most bank accounts are. Often times money market accounts have a lower return than money market mutual funds but are also slightly less risky due to being backed by the FDIC. Another advantage of money market accounts is that they are offered by the majority of banks, which allows you to keep those funds in the same place as your checking accounts. Money Market Mutual Funds Money market mutual funds act very similarly to standard mutual funds, with a few different exceptions. Money market mutual funds are slightly riskier than bank money market accounts as they are not FDIC-Insured. However, they are still significantly less risky than other mutual funds, because they invest in short-term, higher-quality securities. According to Charles Schwab, they are designed to provide high liquidity with lower risk, as well as stability of capital and they typically have higher yields than some other cash products. With Schwab’s money market fund currently paying 5.24% (as of the writing of this article on 10/4/2023), it can be an excellent investment for those looking to earn money while taking on very little risk. An advantage of money market mutual funds is that they are much more liquid than other mutual funds. Money market mutual funds combine the best of both worlds between mutual fund investments and money market accounts, offering a much lower risk than mutual funds and a better rate of return than money market accounts. This makes them a great choice for an investment to get safe money to grow, making it a solid option for a savings account. If you have a sinking fund because you are saving for a down payment for a house, saving for a vacation or other large expense in the future, or you have an “extra” emergency fund, you might want to consider putting that money in a money market mutual fund to earn over 5% (as of 10/4/23). Money Market Funds through Whitaker-Myers Since Whitaker-Myers uses Charles Schwab as our custodian, we can access the Schwab money market fund for those interested. If you are saving for one of the abovementioned expenses, having this in a brokerage account makes the most sense. If you don’t have a brokerage account, your Advisor would happily help you open one. If you have a question on which money market would benefit you and your specific situation, talk to one of the advisors on our team with Whitaker-Myers Wealth Managers. We are happy to help answer any questions you may have.

Breakfast is the most important meal of the day. You hear this all the time, right? If you are like me and loathe the sound of the morning alarm clock, breakfast is usually the last thing you focus on as you have timed your morning routine down to the minute to get yourself out the door. And after becoming a full-time working mom of two under two, the breakfast concept went right out the window. Then, if I were skipping breakfast, I would be starving by 10:00 a.m., eating any snack I could find, or, even worse, contemplating running through the drive-thru to get an overpriced breakfast sammie that was gone faster than it took me to wait in line. Making the breakfast change So, what was a girl to do? It boiled down to being intentional and planning ahead. I knew I needed to make a change for my waistline and my budget’s bottom line. I wanted (and needed) something that could be grab-n-go, with minimal packing effort, and easy to put together once at work. The first step was considering what my office had to offer (appliances) to help make these changes. We have a fridge, microwave, toaster, and coffee pot. I would assume most offices have these same options, but knowing what appliances you have available can help you create your morning choices. Planning ahead and finding the time to execute the prep work were going to be hard work, but knowing the benefits at the end would outweigh those is what forced me into making this a regular routine now. Compiling the Grab-n-Go menus Again, I wanted to keep it simple. In my opinion, from the grocery list to packing as fast as possible in the morning to the ease of putting it together once at work, mainstreaming it was the key to success. I wanted items that were not only healthy but would also help keep me full for a long time. I decided to focus on a few key ingredients that would help multipurpose several options and were things I use in my daily life for snacks or other recipes at home. Here are the menu items I came up with: · Banana blueberry muffins · Muffin Tin Eggs · Scrambled egg sandwiches · Cereal in a bag · Prepackaged oatmeal and peanut butter · Breakfast burritos · Egg Bake · Yogurt Parfaits The main ingredients list (grocery list items): · Bananas · Frozen Blueberries · Eggs · Ham (lunch meat slices) · Tator Tots · English Muffins · Bagels · Cereal · Oatmeal · Pre-packaged Oatmeal · Soft Taco Shells · Yogurt · Granola Prep ahead of time Again, one of the main keys to making all this work ahead of time is carving out about an hour over the weekend to prep ahead of time. This includes thinking through what items you want to make/take throughout the week. Then, making/baking or organizing those items for an easy morning grab-n-go. Banana blueberry muffins These take about an hour from start to finish (bake time included) for this recipe. You can make it as a bake as the recipe calls for, or we pour them into our muffin tin for easier grab-n-go in the mornings. Kids love these, and they are super simple to pack. *Note* these do need to be refrigerated. Muffin Tin Eggs This breakfast idea is actually a throwback to one of my roommates in my early 20s. We both traveled a lot for work and would make these for “Fun Breakfast Fridays.” They are great on their own, or add them to a bagel or English muffin for a fast breakfast sandwich (other ideas for this are below, too!). We liked to line the tin with a piece of lunch meat to add some more protein and added cheese on top. Or scramble it, add veggies, and make a mini omelet on the go. Scrambled egg sandwiches Again, use the muffin tin egg noted above and compile them with your favorite bagel and cheese slice while at work. Or if that isn’t an option, compile them at home, wrap them in press-n-seal, freeze them, and warm them up on a plate once at work (or before you leave the house to eat in the car). Cereal in a bag It's super simple prep. All you need is a lunch baggie and a water bottle. Portion out your favorite cereal in a lunch baggie, pour your desired amount of milk into a water bottle and head out the door. This can be done the morning of, or again, for grab-n-go, take a few minutes over the weekend to prepackage everything out. *Just make sure you have a bowl and spoon at work or pack one if needed! Prepackaged oatmeal and peanut butter Usually, I do not encourage purchasing prepackaged convenience meal options, but I see the benefit in this case. I grab the prepackaged instant oatmeal bag and my jar of peanut butter and have a fast, healthy breakfast. I use the hot water from the coffee machine at work or the microwave to warm up the water. Breakfast burritos This idea has been a favorite of mine to use leftover roasted veggies (potatoes, onions, sweet potatoes, carrots, and broccoli, to name a few). If I don’t have any leftover veggies, tater tots it is! I warm those up in the microwave and scramble an egg in a bowl that I bake in the microwave (yes, this is really a thing!), add it all together in a soft taco shell, and top with my favorite hot sauce I grab from the pantry at home. Egg Bake An egg bake is more than a Sunday morning brunch option. It’s a “middle of the work week, cut a square and go” lifesaver. Again, you will need to spend some time prepping and making this breakfast option over the weekend, but if you do, you’ll have more than a week’s worth of breakfast goodness with minimal work-week effort. Yogurt Parfait Let me preface I do not take the time to layer this. I scoop a spoonful or two of my favorite flavored Greek yogurt, top with some frozen berries (or fresh if we have some and they need to be used up) the night before in a spillproof container, and baggie up some of the granola to top in the morning once at my desk. Make it fast. Make it simple. Make it Easy. Hopefully, these ideas help make your morning routine a little easier so you are actually able to eat breakfast and help you avoid getting too “hangry” before lunch starts. Also, I want to note all these items can be used for easy breakfasts at home, too! They do not need to be working hours or office locations specific! Take these ideas and see how they can fit into your grocery lists and meal planning to help save on your budget. If you want to talk to someone about budgeting, we have a financial coach who specializes in making your money work for you by helping you create a budget to fit your lifestyle. Schedule a meeting today to see how this could benefit you.

We truly are blessed in America. A phrase we often say but it's meaning takes on a crisper form when you can compare how easy our lives are vs those that live in the midst of chaos and conflict every single day. Running to a bomb shelter is foreign to any American child but is standard operating procedure for children in Israel. On the morning of Saturday, October 7, Hamas launched a surprise attack on Israel killing hundreds and plunging the region into further conflict. Israel immediately declared war on Hamas, responded with air strikes, and called up 300,000 army reservists. The U.S. and many U.N. Security Council members have condemned the attacks by Hamas, which is designated a terrorist organization by many major countries, and are providing assistance to Israel, including the positioning of a U.S. aircraft carrier in the Eastern Mediterranean. The situation is evolving, and we all hope for a return to stability in the region, and especially for the continued safety of civilians and any friends and family that might be impacted. The impact of regional wars on markets depends on the economy Without minimizing or trivializing the severity of this conflict, especially the humanitarian consequences, many investors will naturally have questions and concerns about the impact on markets in the coming weeks. What does history tell us about regional wars and their implications for markets and the economy? Unfortunately, for long-term investors, geopolitical risk is unavoidable. Headlines on regional and global conflicts are alarming since they involve violence and the loss of life, and are therefore unlike the typical flow of business and market news involving earnings, valuations, and mergers and acquisitions. These events are also difficult to analyze and their outcomes challenging to predict. As a recent example, many of the predictions around Europe's access to oil and gas following Russia's invasion of Ukraine, fortunately, did not play out. So, while short-term traders may be tempted to guess the direction of oil prices, the S&P 500, and interest rates, it's often better for long-term investors to hold a properly diversified portfolio and stay level-headed as events unfold. Calling the history of the Middle East complex would be a vast understatement, making the current situation even more difficult for investors to analyze. Many diplomats have spent their entire careers attempting to broker peace, countless volumes have been written on the subject, and decades, if not centuries, of ethnic and religious history complicate relations between the region's nation-states. At the risk of oversimplifying matters, the numerous attempts at achieving peace by the U.S. since the mid-twentieth century have been largely unsuccessful. While the Camp David Accords in the late 1970s and the Oslo Accords in the 1990s did improve relations and helped to end conflicts at the time, violence has erupted many times over the past decade. Over long periods of time, markets have recovered from geopolitical conflicts From the perspective of investors, it's always important to separate feelings and beliefs around politics and global matters from portfolio decisions. As the first chart above shows, the impact that wars have on markets varies depending on the business cycle. Some events such as 9/11 and the ensuing wars in Iraq and Afghanistan were met with market declines. This was because these events coincided with the dot-com crash which, while unrelated, required years to stabilize. In contrast, most of the conflicts since the 2010s, including wars in the Middle East, the annexation of Crimea by Russia, and the on-going nuclear threats in North Korea and Iran, were against the backdrop of an expansionary economic cycle. While some of these periods experienced market declines over the following three to six months, economic growth tended to lift markets higher over longer time horizons despite geopolitical uncertainty. The history of strong bull markets in the 20th century across World War II, the Vietnam War, and the Cold War further underscores this point. Of course, last year's invasion of Ukraine by Russia is still ongoing and, so far, markets have not yet recovered their previous peaks. Again, this is largely due to the interaction with other economic forces, namely rising inflation, supply chain disruptions, and elevated market valuations following the pandemic. One direct impact of the Ukraine war and uncertainty in the Middle East is on energy prices. Oil prices did jump following the recent attack on Israel, with Brent crude rising from $84 per barrel to above $87, partially reversing the decline over the past two weeks from a high of about $97. However, this pales in comparison to the sharp rise in oil last year when prices approached $128. There was little direct impact on oil when Russia annexed Crimea in 2014, and even the 2019 drone strikes against Saudi Aramco by Iran and others, which knocked out 5% of global oil production overnight, saw only a short-lived reaction in oil markets. Thus, the impact on energy prices from Middle East conflicts is far from a sure thing. Oil prices have risen following the attack on Israel Perhaps the broadest implication for investors is the idea that markets depend on global stability, the rule of law, and business/consumer confidence. Regional conflicts, especially those that involve the United States and its allies, increase the "risk premium" on financial assets because the future becomes more uncertain. This uncertainty is the idea that even the possibility that markets and businesses could be affected is enough to hurt investor confidence. This is why many investors tend to focus on questions around global dynamics as the world shifts from the U.S.-centric, unipolar world since World War II to a multipolar one. Consistent GDP Growth Despite Regional Geopolitical Events Within a segment of our portfolios at Whitaker-Myers Wealth Managers, we have a tactical allocation to Israel within our international exposure. This is born out of the mindset that within international investing, alpha can be generated by strong and prudent country selection. We believe in Israel for many reasons, which can be tied back to their strong birth rates, consistent GDP growth despite having to run a security state because of their geographic placement in the world, being a beacon for democracy in the Middle East, where the normal is authoritative dictators killing in the name of a false god. Their economy is exciting and built for the future. Some of the sectors they have specialization in are technology, healthcare, defense, and financials. Have you ever wondered where the USB flash drive comes from? You guessed it - Israel. Israel has the nickname "start-up nation" because of its long history of innovation. With a young, highly educated workforce and a world-class technology industry, we see them being a heavyweight in the international markets for years. According to Van Eck, our provider on the ETF side, gaining our client's exposure to Israel's economy, the key strength to this economy is demographics. As is the common phrase, "Demographics equal destiny in terms of your economy." Van Eck goes on to point out, "Israel has one of the youngest and most educated populations amongst developed market countries. In 2022, 28% of the population was under the age of 15, with 60% of the country's population falling within the work age range." We remain firmly committed to our tactical allocation in Israel for all these reasons and more, despite the events that transpired over the weekend. Many of these issues are deeply challenging and often theoretical. As such, their impacts on markets, the economy, and corporate activity are far from certain. History shows that it's a mistake to make dramatic shifts in portfolios in response to geopolitical crises. Properly diversified portfolios, especially those built around long-term financial plans crafted in partnership with a trusted advisor, are designed to handle exactly these periods of uncertainty. None of this is to dismiss or detract from the severity of the conflict in Israel, especially from a humanitarian perspective. While the situation will be closely watched as events unfold, investors should avoid overreacting with their portfolios. The bottom line? While the hope is for stability in the Middle East, investors should maintain perspective when it comes to their portfolios. History shows that it's often better to hold onto a diversified, properly constructed portfolio than to try to time the market due to geopolitical events. So, while the war should have no impact on our investment decisions, let's commit to praying for the nation of Israel, the safe return of all those taken from their homeland, and the repentance of the wicked people inflicting this harm and their turning to the one true God, the God of Abraham, the God of Issac, the true Yahweh. Copyright (c) 2023 Clearnomics, Inc and Whitaker-Myers Wealth Managers, LTD.. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. 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By a mile, the most asked question I get is, "am I ready to retire?" Retirement is technically the single largest expense you'll ever make in your life, even though in reality it is a series of many, many single different decisions one must make. And if I had to guess, the second most asked question I get is, "How do I save money on taxes?" That would then be followed somewhere in the top ten, I would like to own real estate, other than my primary residence one day, "How do I do that?". I wonder if there is a transaction that combines elements of all three: smart retirement planning, tax reduction on income, and private real estate ownership? One such answer (of many) could be the sale-leaseback arrangement within families. As we age, our financial needs and priorities often shift, especially for elderly individuals who may be living on a fixed income or have accumulated substantial home equity. One innovative financial option that elderly clients and their families could consider is a sale-leaseback arrangement. This unique financial tool offers several benefits for seniors and their loved ones, providing financial stability, peace of mind, and the opportunity to enjoy their golden years to the fullest. What is a Sale-Leaseback? A sale-leaseback is a financial transaction in which an individual, typically an elderly homeowner, sells their property to a third party, many times a family member like a child, and then leases it back immediately. In essence, they become a tenant in their own home. This arrangement allows the homeowner to access the equity tied up in their property while continuing to live in the same place. Many times the lease allows the tenant the right to live in the property for the rest of their life. Here are some of the common reasons why elderly clients might consider a sale-leaseback with their family: Unlocking Home Equity One of the most significant advantages of a sale-leaseback arrangement is that it provides immediate access to the equity built up in the property. This can be a valuable source of funds for seniors who have limited income and substantial home equity but do not want to sell their home outright. These funds can be used to cover healthcare costs, home improvements, travel, or to enhance their quality of life in retirement. Additionally, this extra cash can help with the sequence of return risks that so often create havoc for retirees during their golden years. For example, someone who is unlucky and must start withdrawing their portfolio right into a negative market that takes too many years to recover from would face the unfortunate reality that they are withdrawing funds at -10%, -20%, -30% values that can lead to much faster depletion of assets than would otherwise be realized. Hopefully, your Financial Advisor has hedged your portfolio in a way to help offset some of this risk but it is still a reality for most retirees. Financial Security For many elderly individuals, the cost of maintaining a home can become burdensome. Property taxes, maintenance, and unexpected repairs can strain a fixed income. By selling their property and leasing it back, seniors can free themselves from the financial responsibilities of homeownership. They can budget more effectively, knowing exactly how much they'll pay in rent each month, which can provide a greater sense of financial security. Aging in Place or Emotional Ties to Property Seniors who are emotionally attached to their homes may be hesitant to move to assisted living or other retirement communities. A sale-leaseback allows them to continue living in the comfort of their own home while also providing access to funds they may need for in-home care or renovations to make their living space more accessible as they age. Many families have had properties that for generations have been in the family. If this is the case the sale-leaseback scenario provides a confirmation, should the property be sold to a member of the family, that it will remain in the family for another generation. Simplified Estate Planning A sale-leaseback can be an excellent estate planning tool. By converting home equity into liquid assets, individuals can ensure a smoother transfer of wealth to their heirs. It can also help reduce the complexity of estate planning by simplifying the division of assets among beneficiaries. Tax Advantages In some cases, a sale-leaseback arrangement can offer potential tax benefits. It's essential to consult with a tax advisor, like our in-house CPA Kage Rush, to understand how this option may impact your specific financial situation. Let me give a quick example of how one might benefit from the sale-leaseback, within a family structure Example - Susie (Mother) & Johnny (Son) Susie who is 80 and a widow owns a $200,000 home. She also has a $2,000 monthly Social Security benefit and $300,000 in investment assets. She needs $4,000 / month which he investments and Social Security comfortably provide for her. She decides it would be in her best interest to sell her home to her son Johnny who will rent the property back to her for $1,500 / month (not quite market rent because a standard rule landlords will use is 1% of value, each month) but hey, it is Johnny's mother. Now Johnny, as the property owner will handle all the maintenance and upkeep going forward for his mother. Johnny is a Dave Ramsey and Ramsey Solutions fan so he has the cash and purchases his mother's home with no debt. If Susie were to earn 5.50% on those dollars (current yield on a 6-month Treasury bond) received from the sale of the home, the money would pay for the rent for 17 years or until she is 97. If she took more risk and built a structured note with a 50% S&P 500 Protection on the principal and 40% protection on the coupon payments, with a European style execution (which means she receives a loss if the S&P 500 is down 50% on the contract end date typically 5 years in the future), those typically pay around 8.00% and it would last somewhere around 27.5 years. Every investment decision should be made with the help of a qualified investment professional and with a full understanding of your entire financial situation Johnny receives the $1,500 but is able to depreciate the value of the property, write off the expenses, and also possibly have other business write-offs for expenses while managing his mother's property. If his mother had lived to 97 then he would have been paid $309,000 ($200,000 plus the interest it earned at the 5.5% rate), some of it not taxable because of the right-offs and he would own her $200,000 house that could have appreciated to $281,000 (2% appreciation rate). As a general rule, investment properties that take deductions have that reflected in their cost basis, so Johnny may have to pay the taxes back when he sells the property unless he does a 1031 exchange, which I have written about in the past. As mentioned above, I am not a tax advisor or CPA, thus we would highly recommend you discuss everything mentioned above with your tax professional. Flexibility Sale-leaseback agreements can be customized to fit the needs and preferences of the elderly client and their family. The terms of the lease, including the duration and monthly rent, can be negotiated, providing flexibility and peace of mind. But this also provides one of the greatest risks of a sale-leaseback transaction as well. The IRS will more than likely audit a transaction like this involving family members. Thus one should use excellent legal counsel, a trusted realtor to ensure proper value is given to the buyer and seller and your tax professional, whom will most likely be helping you when the IRS comes knocking. Another possible drawback could be that some states provide a spouse that enters a nursing home the ability to not have to use all their assets before Medicaid kicks in, so as to not improvish the non-nursing home-bound spouse. The husband goes into the nursing home and you don't want the wife to be left with nothing if the husband stays there too long. Many times it's a level of assets and the primary residence however if there is no primary residence because those assets are now in a liquid form (investments, savings, checking) then it would require the remaining spouse to not have a home that was paid for and providing housing utility for them. All this to say, I'm not an estate planning attorney nor an elder law attorney, so as discussed above, one should consult the entirety of their professional advisor team before making such large financial decisions. For elderly clients and their families, a sale-leaseback arrangement can be an attractive financial option that offers multiple benefits along with some drawbacks. It allows seniors to access their home equity, provides financial security, and enables them to age in place comfortably. Additionally, it simplifies estate planning and offers flexibility in tailoring the agreement to individual needs. However, it's essential to approach a sale-leaseback with careful consideration and seek guidance from financial advisors and legal professionals experienced in such transactions. While the benefits can be substantial, it's crucial to thoroughly understand the terms and potential implications before entering into a sale-leaseback agreement. With the right guidance and planning, this innovative financial concept can help elderly clients and their families enjoy a more comfortable and financially secure retirement.