That's right! For those of you with kids that are nearing college or college planning has been in your mind lately - it's a two-for July! Two timely updates as you get ready to send your child for their Sophomore, Junior, or Senior year of high school and need the best planning advice possible. Remember to check out all the articles our team and the folks at Collegiate Funding Solutions have put together for you! No More Pencils, No More Books, No More Teacher's Dirty Looks! July is the month of picnics, fireworks, lazy days at the beach-- and definitely not school. While it may be challenging to motivate your college-bound student to find the right college at the right price, some time can undoubtedly be devoted to thinking about essays and researching schools of interest. What Are You Really Paying For? Over the past decade, there have been shifts in the way that students study. More important is the length of time they spend on their studies. According to an American Interest article, College Students Are Studying Less Than You Think, students today are studying 40% less than they did 50 years ago. Even more surprisingly, they study less than they did as high school students! This begs the question, "If students aren't learning as much, what am I as a parent paying for?" For the majority of college students, they want to go to college for just four things: A line on their resume Job stability Career satisfaction Success/status outside the workplace And if you are under the impression that it really matters where your student goes to college, do some research. In all but a few cases where the student wants to get accepted into a law, med, vet, dental, or other graduate schools; or wants to work on Wall Street-- public vs private really doesn't matter. But it can make a significant difference, especially if your student possesses the majority of these qualities: Intellectually curious Has a growth mindset Expects to work hard Doesn't give up Believes in themselves Isn't afraid to seek help Is resourceful Takes time to think about things Listens Is inspired Takes risks A self-starter Involved A student who demonstrates these traits is probably going to succeed anywhere. But if they go to a college where they are surrounded with students like themselves, they will truly flourish. That kind of student's education may be worth any dollar amount you can afford. Practical Matters Colleges require up-to-date immunizations in addition to annual physical documentation. Some colleges won't give students their dorm room key on move-in day until these items are taken care of! Check the college website for their policy. If you're still debating between schools, be sure to ask the college about their policy on immunizations to ensure your personal and informed beliefs are consistent with the school's policy on such matters. Prescription Medication Does your student take prescription medication? If so, you'll want to either stock up before they head out for school or locate in-network pharmacies near them. Maybe you can take advantage of one of the convenient online order services, which would be one less thing to worry about. This is important to consider since many colleges don't allow freshmen to have cars on-campus unless they're commuting from home. The Student Health Center Most colleges have health centers, but what they offer can vary. Some are able to diagnose and treat many illnesses, while others are more basic, and will refer your student elsewhere depending on the severity of the condition. Of course, if your student is experiencing shortness of breath, severe bleeding, or head trauma, they should head to the nearest emergency room as soon as possible. Both you and your student need to familiarize yourselves with the health services the college offers as soon as you set foot on campus. Power of Attorney: Durable, Financial & Healthcare Your job of caring and guiding your child is not done when they leave for college; actually, it's probably never done! However, from a legal perspective (keep in mind Whitaker-Myers Wealth Managers, LTD. is not a law firm and does not give legal advice) your 18-year-old is a legal adult, which means you can no longer make decisions on their behalf. This can become a problem if your child has a medical emergency at school. The medical power of attorney gives one adult the right to make specific healthcare decisions for another adult, should they no longer be able to make those decisions for themselves. If this isn't done, a doctor who doesn't know your family or child could end up making those decisions for you. The durable power of attorney is more general and allows you to do things such as possibly putting restrictions on care for the student around your religious convictions (say the immunizations) should your child not be able to make them on your own. In addition, the financial power of attorney can allow you to help manage your child's financial affairs if they cannot do so themselves. Talk to your Financial Advisor today about establishing the POWERS PLAN through our partner Encore Estate Planning. They'll be happy to ensure your power of attorney situation is wrapped up before your child leaves for college. Mental Health And Substance Abuse Resources Let's face it: college is tough. It's also when signs of depression or mental illness can begin to show-- even if your student never had symptoms previously. And, if we're still being honest, it's when students may start drinking or experimenting with drugs. No one likes to think about these possibilities, but ignoring mental health can be disastrous. According to the National Alliance on Mental Illness, anxiety is the top presenting concern among college students (41.6 percent), followed by depression (36.4 percent), and relationship problems (35.8 percent). Seven percent of college students have "seriously considered suicide" during the past year. Sadly, suicide is the third leading cause of death on college campuses. If you have any indication that something is wrong, please tend to it before your student goes off to campus. The influx of students with these issues to colleges is growing beyond the ability to serve their needs. Colleges are not in the business of providing physical health and mental health care. While the schools recognize the need to provide ample services, this is often done somewhat grudgingly and often after a crisis - such as a campus suicide. Of course, stress is a normal part of college and life. Students should certainly work toward mitigating the effects of stress by taking advantage of their school's free fitness center, and focusing on healthy eating habits. Drinking plenty of water, and (trying) to get a full night's sleep never hurts either. Tips On Indirect Expenses Officially, these are referred to as Indirect Costs. You may recall seeing them listed on your student's financial aid package. Because these expenses are not directly billed, you often have more control over how much you spend on them. Look at non-billed expenses as an opportunity to cut costs, so you have more funds left over for paying the college bill. Books - every college student will have to buy books at some point. While the campus bookstore may be convenient, it's also usually the most expensive option. It's almost always better to find them used, or even look online for websites that rent textbooks. Digital versions for their e-reader is another popular and cheaper option. Dorm Needs - for students living on-campus, you will need to acquire furniture and supplies to outfit their dorm. Most dorms come with only the bare minimum-- a bed, dresser, and a desk. Students typically need to provide their own bedding, TV, appliances, and any sort of decoration. If they have roommates, your student should try to coordinate with them before move-in day to avoid ending up with multiples of the same item. Laptop - a laptop can often be one of the priciest non-billed expenses. Check for college student discounts, as some companies, such as Apple and Microsoft, offer them. Travel - this cost can vary significantly depending on how far away your college is AND how often they go home. If the school is within driving distance, a bus is usually a financially wise option. Or even better, your student can check the bulletin boards in the student union or even ride-sharing apps to see if they can find a ride from another student going in the same direction. If your student must fly to get home, try to plan your visits in advance. Plane tickets are usually much cheaper when bought months ahead. Parking Fees - if you plan on having your student bring a car to campus, expect to pay, as on-campus parking permits can cost hundreds of dollars each semester! Car insurance can also increase, depending on the school's location. Consider leaving the car at home while living at school. They'll still have access to it on breaks and over the summer. Contact our friends and advisors at Whitaker-Myers Insurance Agency, a sister company to us, to have them quote your child's car insurance as an independent agent, just as Dave Ramsey recommends. Food and Beverages - although most colleges require students to have a meal plan if they live on-campus, students will still typically spend money on food outside of the dining halls. Late-night pizza, a coffee from Starbucks in the morning, or lunch at a restaurant with friends can all quickly add up. Students can save money here by viewing dining off-campus as a unique experience rather than an everyday activity. They can save the Starbucks lattes for the weekends and stick to coffee from the dining hall on weekdays. Off-campus activities - Last but not least are off-campus social activities, like weekend ski trips. If your student has friends whose parents are financially comfortable while you're stretching it to pay the direct costs, now is the time to have a discussion about what kind of off-campus treats you can subsidize. Each month, we provide you with tips on the best ways to pay for college regardless of your financial situation. Some people wouldn't dream of going grocery shopping without their coupons. Most people don't buy a car without shopping around first. Lots of us use online booking sites to find the lowest fare on a flight or a hotel room. Don't wait too long to figure out the best way to pay for college. Doing that is like waiting to buy fire insurance when your garage is in fire. It's just too late. If you've thought about contacting us but haven't, this is a really good time of year because summer is relatively quiet. Depending what grade your student is in, there may be a lot we can do to help you save on the cost of college. The longer you delay will mean less you can do to save a year or two in college costs. We have the capability, expertise, and professional relationships to help you ensure that your student attends the RIGHT college for the RIGHT reasons and the RIGHT price! Give us a call at 330-345-5000 or email us at lcurry@whitakerwealth.com. Don't wait and lose tens of thousands of dollars of income, savings and possibly go into debt because you procrastinated. If you do things "old school" pick up the phone and call me or send an email! Until next month...

The months of June and July are primarily known for: Weddings The First Day of Summer Vacations Graduations By now, for those students who have been placed on wait lists, it's a good idea to send a final transcript to those schools as well. While there's no guarantee that submitting a final transcript will boost their chances, it doesn't hurt to try. Students by should have completed their roommate preference surveys, submitted housing and health forms, and taken whatever subject placement tests their college require. They should also have submitted a copy of their final transcripts. If the student is a D1 or D2 athlete, the NCAA also needs a copy of their final high school transcript. A Parent's Right To Know What's Going On Is Not Automatic When students reach 18, they are considered adults and thus have certain rights of privacy. Parents should know that the college won't automatically give you the right to access your student's educational and financial records. Because of the Family Educational Rights and Privacy Act (FERPA), the student will have to sign a form explicitly allowing parents to access certain information. Even if a student fails classes or does not have enough funds to pay for classes, neither the dean, their professors, nor the administration can notify parents of their student's situation because FERPA binds them. Even if you think you already signed a waiver, make sure you sign one for academics and one for financial records. To give you an idea of what's required, here is a sample from Yale University on how to get Proxy Access and Authorization from your student. Please check with your college on how to gain access to your student's accounts. HS Juniors: A Look Ahead Because the number of college applications has declined so much, the smaller regional colleges are at risk of merging with other institutions or closing their doors altogether. Even though the number of applicants are no longer in free fall (for the time being), there are consequences to the towns these campuses inhabit-- especially those in rural spaces. If the college your student is considering is seeing a shrinking student body, the town can suffer in ways that may negatively impact the college experience. An example is the town of Montgomery, West Virginia. When West Virginia University decided to move West Virginia Tech to Beckley, a bigger city an hour away, Montgomery effectively became a ghost town. Even the pizza parlor was forced to shut down. The smallest group of college applicants in years hasn't dented the number of students applying to name-brand colleges. In fact, quite the opposite has occurred. More students than ever applied to the more competitive schools, causing the lowest acceptance rates in history. To help your student increase their odds, make sure to do the following: Cast a wide net. Look at colleges that fit your student's academic profile and personal preferences, such as size and price, but maybe farther from home. Find colleges where your student is likely to be in the top 10% of their applicants. Be realistic. Many target schools are now reach schools, and reach schools are even more out of range for most applicants. Your student should plan to take the SAT or ACT since data suggests that the top colleges-- even those that are test-optional, do favor those who submit test scores. Expect the top colleges to see record numbers of applications and admit rates to drop, particularly Regular Decision (RD) rates. To increase your chances of being offered admission, consider applying to a dozen or more schools, as this is becoming the norm. Historically, we've discouraged students from applying Early Decision (ED), because if admitted, you won't have the advantage to leverage a better award package. But if you won't have any financial need at the colleges that don't offer merit scholarships, then ED can make sense. Real Estate, Business Values, and Farms Are Now Being Counted Against You We have clients who receive income from real estate rentals. These parents mistakenly believed that their real estate was a business and wouldn't be counted in the financial aid formula. Sadly, rental real estate is considered an investment. For real estate rentals to qualify as an excludable business, services such as food or laundry must be made available. This is not likely to happen. However, there is another option: instead of filing a Schedule E, discuss with your CPA or accountant or Kage Rush of Whitaker-Myers Tax Advisors, the creation of a U.S. Corporation, and file IRS form 1120. The income you take is ordinary W-2 income, and a portion of the rent can be taken as a loan. Yes, the income is taxable, but you can reduce your tax liability in any number of ways. Until now, family businesses were excluded from the financial aid formula. Businesses with hard assets and inventories are now being assessed and could reduce or eliminate any need-based financial aid that would have been available prior to the 2024-2025 school year. To avoid being assessed, the only type of business that is excluded are 1120 US Corporations. Also, family farms were previously excluded from the aid formula. Now, the equity, acreage, and the equipment will be counted against a family living on a farm. There is no way around this, short of Congress repealing this or persuading the college to use its Professional Judgement to exclude it. Lastly, beginning in the Fall of 2024, parents with two or more students going to college at the same time will lose their discount for multiple students. Families with Adjusted Gross Incomes of $80,000 or more will suffer the consequences the most. Given these changes, which will make college affordability an even more daunting issue for business owners, farm owners, and families with multiple children in college at the same time, I urge you to reach out to me and schedule a college-planning consultation through our new College Planning Service offered by our Financial Coaching Team. There ARE ways to mitigate the impact of these changes, and it is going to require advance planning! Contact us at 330-345-5000 or lcurry@whitakerwealth.com to get the process rolling. It could mean the difference between saving substantial amounts on your college expenses and taking on crushing student loan debt or sacrificing your retirement savings goals!

Major stock market indices made significant gains in the first half of the year due to improving inflation, slowing Fed rate hikes, the absence of a recession, a more stable banking sector, and a strong rally in tech stocks. The S&P 500 has climbed 16.9% with reinvested dividends this year, while the Nasdaq and Dow have returned 32.3% and 4.9%, respectively. Markets have recovered much of their losses from last year with the S&P 500 now 7% from its all-time high. Interest rates have also been steady after their sharp jump last year with the 10-year Treasury yield hovering around 3.8%, helping bond prices to recover as well. How can investors keep this recent market performance in perspective as we enter the second half of the year? Given this strong year-to-date performance, many investors may be wondering whether this is truly the beginning of a new bull market or is instead a "bear market rally." This is a shift from the concerns investors and economists faced at the start of the year when bear markets and recessions were top-of-mind. There are a few reasons why the past six months only further underscore the investment principles that long-term investors should follow in order to achieve their financial goals. First, this year's market performance is more evidence that investor sentiment can turn on a dime. The history of bear markets and short-term corrections shows that markets can turn around when it's least expected, especially when investors are most pessimistic. This was true at the start of the year when few believed markets would ever recover, just as it was in April 2020, mid-2011, March 2009, October 1987, and so on. Each market downturn was driven by a real event such as a surge in inflation, the pandemic, the U.S. debt downgrade, the global financial crisis, or even Black Monday. However, in every case, investors expected these events to continue to worsen, even as fundamentals and valuations quietly improved. This is why it is often better for everyday investors to simply stick to their well-crafted financial plans. By the time investors agree that a recovery has begun, significant gains have often been missed. This is not to say that downturns aren't painful or that markets only go up. Rather, history shows that it's often better to simply stay invested in an appropriately-constructed portfolio of growth, growth & income, aggressive growth and international stocks. In the worst case, investors who try to time the market and focus too much on short-term events completely miss the subsequent market recoveries. Second, just as it's difficult to predict the direction of the market, it's difficult to know whether a particular rally is sustainable as it is occurring. This is why it's often better for long-term investors to focus on the underlying fundamentals driving the rally. Even though markets can swing in either direction over the course of days, weeks, and months, steady economic growth and improving corporate profitability tend to drive markets higher over the course of quarters, years, and decades. If you have watched any of my What We Learned in the Markets This Week video series, you'll remember that as of today, Wall Street expects earnings to return to record levels by the fourth quarter of this year, albeit driven by a few very profitable companies in the tech sector. Thus, the importance of the economy remaining strong cannot be overstated. Only a year ago, the prospect of the Fed achieving a "soft landing," i.e. that inflation would improve without a recession, seemed far-fetched to many. While core inflation remains a problem, the fact that overall consumer prices have shown improvement at a time when unemployment remains at historic lows is positive for markets. If and when corporate earnings begin to pick up, market valuations could become more attractive over time. Finally, there are always reasons to see the glass as half empty, especially with many uncertainties still looming. Today, despite more stability in the financial system, there continue to be challenges in the wake of the bank failures earlier this year, most notably in commercial real estate. Upcoming refinancing activity could test the stability of the system as rates remain high and lending activity tightens. As a reminder, the real estate portfolio recommended by Whitaker-Myers Wealth Managers has a less than 2% allocation to office buildings and less than 2% allocation to retail buildings, two sectors we worry the most about. Additionally, while a debt ceiling crisis was averted, the can has only been kicked down the road to the beginning of 2025. In the meantime, geopolitics continue to be problematic as U.S. relations with China and Russia remain strained. Next year's presidential election will also soon be at the forefront as markets assess all of these risks. However, experienced investors with a broad perspective on markets know that there are always risks that must be balanced against long-term returns. These risks often feel insurmountable as they are occurring. Once they are in the rear-view mirror, investor concerns often shift to whether the recoveries are sustainable. These back-and-forth swings in investor sentiment are a normal and natural part of markets, and are why long-term investors can increase their odds of success by focusing instead on underlying trends. To that end, below are seven important insights from the first half of the year that will likely be just as relevant in the second half. 1. Strong returns over the past three quarters have surprised many investors The S&P 500 has now notched three consecutive quarters of strong returns, beginning with the fourth quarter of 2022. This is a 180-degree shift from the bear market returns experienced during the first three quarters of last year, and is happening at a time when sentiment is still negative. While there is no guarantee that markets will continue on this strong trajectory, it underscores the idea that markets can change direction without notice. 2. Market breadth has been low as mega-caps have led the rally While the market rally has benefited most investors, not all stocks have participated equally. Under the surface, mega-cap stocks have led the way. The accompanying chart shows that the largest stocks in the S&P 500 have outpaced the broader index this year. What's more, an equal-weighted index (i.e., an index that gives more weight to smaller stocks than the market-weighted index), has lagged even more. 3. Sector returns have differed across the market and compared to last year Thus, one investor concern is whether this year's returns have been "distorted" by tech returns. Unfortunately, it is a fact that the largest stocks have only grown in importance over the past decade. This is due to the increasing economies of scale due to technology across the economy. More recently, enthusiasm for artificial intelligence has driven greater gains in these sectors. However, this year's gains in these areas are not only due to these trends. The returns among these companies also represent a rebound from last year when these were the hardest-hit stocks as rates were rising and the future looked increasingly bleak. Taking the last two years together, returns are still outsized but look much more reasonable. 4. Inflation is improving even as core measures remain sticky One reason for the reversal from last year is that inflation has shown signs of improvement. The headline Consumer Price Index has decelerated from a peak of 9.1% a year ago to 4% today. This is primarily due to deflation in energy prices and other categories such as used cars. However, core inflation remains sticky due to shelter prices. The Fed and other economists believe that these prices will improve as rent prices stabilize and new leases are signed. Investors should also maintain perspective on further inflation improvements. At best, both headline and core inflation will likely remain high through much of 2024. In the meantime, it's possible that year-over-year inflation figures will worsen due to comparisons to last year's levels. 5. The Fed has slowed its pace of rate hikes Improving inflation alongside a strong economy allows the Fed to slow its pace of rate hikes. The Fed has raised rates 10 consecutive times from zero to 5%. The size of each increase has decelerated over the past year from a peak of 75 basis points (0.75%) every meeting to perhaps 25 basis points every other meeting. The Fed has made it clear that they are committed to returning inflation to their 2% target by keeping rates higher for longer. Market-based expectations have shifted this year from believing the Fed will cut rates later this year to agreeing that rates could rise further. 6. Rate-sensitive areas such as commercial real estate face challenges Of all of the areas impacted by rising rates and financial instability, commercial real estate is seen as the biggest source of risk among investors. This is not only because CRE has struggled with post-pandemic shifts in office usage and occupancy, but because trillions of dollars in loans will need to be refinanced in the coming years. Higher interest rates and tighter lending standards may make this more difficult, creating both liquidity and solvency issues among CRE companies. So far, greater stability in the banking system over the past few months, along with Fed and government support have helped to reduce some of these risks. Market participants will continue to watch this sector closely in the months to come. 7. Financial planning is especially important in times of uncertainty Many investors may wonder what market uncertainty means for their portfolios, especially for those approaching retirement. The classic 4% rule specifies a "safe" withdrawal rate in retirement based on the historical performance of a hypothetical 60/40 stock/bond portfolio, as shown in the accompanying chart. This includes both good and bad market periods since 1900. However, this chart also shows that safe withdrawal rates can fluctuate significantly, with the average being closer to 7%. So, while investors need to minimize the risk of running out of funds, they also need to make the most of their retirements, especially as life expectancies increase. Rather than just following a rule of thumb, it's important for investors to understand their unique circumstances to better project their safe withdrawal rates. Doing so can help long-term investors to better achieve their financial goals, especially during uncertain market periods like the present. The bottom line? Markets rebounded in the first half of the year, catching many investors off guard. While markets never move up in a straight line, investors who focus on long run fundamentals and avoid trying to time the markets will likely be in a better position to take advantage of market opportunities in the second half of the year.

Things like a savings rate for retirement seem so trivial in the grand scheme of life, right? I’m reminded of that as I watched my youngest daughter, Landrie, get baptized today. My primary goal in life is Glorify God and enjoy him supremely, and I want that for my children as well, which is why today is such a special day, as it probably was for you when you think back to your child’s moment of accepting Christ or making their public proclamation of faith and obedience towards Christ with baptism. But alas, there are those pesky verses in Proverbs that remind me, “Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it” (Proverbs 21:20) or how about, “In the house of the righteous there is much treasure, but trouble befalls the income of the wicked” (Proverbs 15:6). The point is when I lack discipline in any area of my life, it’ll most likely spell trouble. This is why Whitaker-Myers Wealth Managers is here! To ensure your financial house is in order and to ensure that you are enjoying God fully through your wealth (we could spend days on that topic right there). This is why we are so connected and convicted with the teachings of Ramsey Solutions. It’s common sense, practical and Biblical wisdom around your money. As you’re most likely aware, if you’re reading this, Baby Step 4 is when you begin saving and investing for retirement. My friends at Ramsey Solutions have done many great articles on this topic, but let me spend some time on the question of whether the 15% I’m budgeting towards retirement should be considered with my employer match or after it. Meaning if my company gives me a 5% match, can I get away with only contributing to 10% to reach my 15% number? Well, let’s try and answer that question below. Dave’s Answer My friend, Dave Ramsey, would tell you that it needs to be 15% of your income before considering your match. This shouldn’t be a hard number to hit for the person that has followed his plan. Why? You’ve worked hard to budget your money, so you’ve got great control over the cash flow coming into and out of your household. You’ve paid off all your debt, other than your home, which is many causes, was much more than 15% of your income. For example, when I spent the early part of my career in a large bank’s Private Banking office, it was acceptable for someone to have 45% of their income going towards debt. To be fair, that was the upper end of the bracket, but it still was acceptable. So if you were even half of that, meaning you were paying the bank 22.5% of your income, you were still giving much more than 15% to the bank. Now we’re telling you to put 15% towards your future retirement. Less than you were most likely paying in household consumer debt! However, on the other end of the spectrum, I’ve heard many CFP professionals recommend something less than 15%, and I’ve seen those plans come out ok, so it begs the question, who is right? The 15% Example – Landrie In honor of my daughter's baptism today, let’s start our analysis with her and her hypothetical future husband as an example. She gets out of college and is ready to start working and saving at age 25. Let’s say her husband makes $50,000, and she makes $40,000. Therefore a total household income of $90,000. For them collectively to be saving 15% they need to put away $13,500 this year. In addition, if they lived in the state of Ohio, they’d be paying $17,119 (approx.) in Federal, State, Local, Social Security, and Medicare-based income taxes. That leaves $59,381 for them to spend discretionarily or nearly $5,000 / month. Can we then assume that because my daughter, hopefully being brought up under the Ramsey Solutions teachings, will live within her means and will not go into debt? Thus their lifestyle is built around that $5,000 / month, just inflated over time. I’ll assume they never get promotional raises, just cost of living raises, and that they retire at the age of 65, which would be 2062 (if they’re 25 today). They would have roughly $4.9 million by the time they reached retirement, at a 7.22% rate of return. You can see the sample I created and check my math here. Using the 4% rule, she’d be able to take around $196,000 / year without hitting the principal, and the estimated growth of her $5,000 / month lifestyle ($60,000 / year) has been inflated to $129,882 (2% inflation rate) by the time she reaches retirement. Since we assumed she saved in a Roth 401(k) and Roth IRA for her 15%, there should be no tax liability thrust upon her, so they can take their $129,882 and still have $66,000 leftover under the 4% rule. And this doesn’t account for any Social Security they’ll be getting at 67 or later – in my estimation, because of reforms that will come down the pike in the future, Social Security will probably come to them around 70 to 75. In addition, perhaps my daughter wants to retire before the age 65. Then the question is at what point, saving 15% of her income on top of the match, does she get to an asset base where she has saved enough to retire, using the 4% rule (taking out only 4% of the portfolio each year to give it a high probability of lasting through her life). By the time she reaches age 59 ½, when you’re able to take from your retirement without a penalty, she would have approx—$ 3.1 million. Using the same 4% rule, that comes to $124,137, and her inflated living expenses of $5,000 / month are now looking like $120,261 in that year. This means because she followed the Baby Steps, in their written and verbal form, she is able to retire earlier than most of her peers with around $3,000,000 in retirement assets, many of which are highly favored towards Roth. Excellent job, Landrie! The 10% Example – Arthur Example Now let’s dive into Arthur. Poor Arthur – he would always get picked on in Dave Ramsey’s Ben & Arthur example in Financial Peace University. Now here he is again, getting beat up in this article, as the simpleton that won’t listen to Dave’s advice. So Arthur and his wife make the same amount of income as Landrie and her husband did. $50,000 and $40,000, respectively. They decide that they need more free cash flow to have fun and live life now, so they’ll save 10% of their income towards retirement and have their employer chip in the remainder, since they get a 5% match. Here are Arthur and his wife's numbers. When reviewing their assets at age 65, you’ll notice it’s estimated they’ll have $3.5 million by retirement, so roughly $1.4 million less. Using our 4% rule, that gives us $140,000 a year, which Arthur and his wife could take out without worrying about running out of assets. Because they lived on more of their income (remember they only saved 10%), their lifestyle is built around $64,000 / year (as opposed to Landrie, who lived on $60,000 or $5,000 / month), and thus their inflated lifestyle number by retirement is around $141,000. So in the case of Arthur, the fact that he and his wife only saved 10%, they barely made it to retirement with enough income, when using the 4% rule, to meet their lifestyle expenses – sans the $1,000, which we’ll consider is a rounding error for purposes of this excise. And suffice to say that since they just saved enough, using their 4% rule to cover their expenses, they’ll most likely not be in a good position to retire early. I should note in both of these cases, we did not give weight to assumptions around health insurance, Social Security, travel expenses and a myriad of other things you might consider in a fully-encompassed retirement plan. The point of this excise was to give credit to Dave’s recommendation that you should strive to save 15% of your income. Conclusion Wow! What a ton of numbers and math. If you got through that whole conversation without having to reread any of it, you should probably contact our office to apply to become an Associate Advisor because you’ve got a great brain and comprehension for this stuff. The bottom line of this scenario we saw was the person saving a full 15% of their income did two things that will make them more comfortable in retirement – it gave them margin, and it gave them the ability to make decisions around when to retire, they weren’t forced to continue to work until age 65. The person saving 10% was still able to retire, right? Absolutely! They just didn’t have the same flexibility that our first couple had. During discussions with hundreds upon hundreds of retirees over my career, I've learned that sometimes you’re at the peak of your career, and you don’t want to retire even at 65, and sometimes you can’t wait to ring that retirement bell. Saving 15% of your income today gives you the opportunity to make those decisions. Nothing is guaranteed, but as we saw with Landrie and her husband, they were better positioned to make retirement decisions on their timeline. As Dave always says, Dave-ish is a wish, and as the writer of Proverbs says, The way of a fool is right in his own eyes, but a wise man listens to advice. If you would like to start running retirement projections for your individual situation, we have this great tool that can be found here.

Rules for Investing Investing in the stock market can be profitable, but it also comes with several complexities and rules that investors must know. The rule we are writing about today is the wash sale rule. The wash sale rule can significantly impact an investor's taxes and investment strategy. What is the “Wash Sale” Rule The wash sale rule prohibits investors from claiming a loss on the sale of a security if they purchase or acquire a substantially identical security within 30 days of the sale. Essentially, if an investor sells a security at a loss and then buys the same security or a similar one within 30 days, they cannot use the loss to offset gains in the current tax year. Instead, the loss gets added to the cost basis of the newly purchased security. How does it affect me? The purpose of the wash sale rule is to prevent investors from manipulating their taxes by artificially creating losses. For example, an investor could sell a security at a loss to offset gains in the current tax year and then immediately repurchase the same security to maintain their position in the market. Doing so would allow the investor to avoid paying taxes on the gains while still holding the security they want. While the wash sale rule may seem straightforward, there are some nuances that investors need to be aware of. For one, the rule applies not only to identical securities but also to substantially similar securities. If an investor sells a stock in one company and then purchases a stock in a similar company within 30 days, the wash sale rule may still apply. Additionally, the wash sale rule only applies to losses, not gains. An investor can sell a security at a gain and immediately repurchase the same security without triggering the rule. However, the investor will still be responsible for paying taxes on the gains. It is important to note that the wash sale rule applies to individual and institutional investors, including mutual funds. Mutual fund investors need to be aware of the rule when buying and selling shares of the fund, as the fund may be buying and selling securities on their behalf. Strategy, Strategy, Strategy Selling at a loss in your Brokerage Account (aka Bridge Account) may allow you to claim that loss on your taxes, but making a mistake and triggering a wash sale can ruin that, so it is essential to know the appropriate actions. What are the appropriate actions to take to avoid a wash sale? One strategy is to wait at least 31 days before repurchasing a security sold at a loss. This allows you to claim the loss on your taxes while maintaining your market position. Another option is to purchase a similar but not substantially identical security. It can be tricky to know what a similar but not substantially identical security is, so having a Financial Advisor help you with this strategy is important. The Advisors at Whitaker-Myers Wealth Managers are familiar with this rule and its nuances, so feel free to contact one of them for help.

When thinking about pain, we know how the brain processes pain can provoke strong emotional reactions such as fear, anxiety, or, in some cases, even terror, depending on how the person experiencing the pain is processing it. If the brain can cause such strong emotions to the dark side, we also know it can be trained to handle and process pain to dull its effects. Why is a Financial Planner discussing the human body, the brain, and pain? It’s human nature to run away from or try to limit pain’s effects—this is the primary cause of many individuals' poor investment decisions. Many will handle the pain by stopping the pain which comes as a result of selling their investments or no longer putting money into them until the pain (losses) subside. However, as we’ll learn, that is the worst decision one could make toward your future goals. I want to answer this: Should you continue to fund your 401(k) even in a bear market? What’s the argument for consistency despite seeing my balance fall the wrong way? Let’s dig in… Ensure the Basics Are Being Executed Before we can worry about making the wrong decision during a bear market (a decline of 20% or more), we must ensure we’re executing our retirement-saving strategy correctly. We are proponents of the Baby Step methods taught by Dave Ramsey. This means before we encourage anyone even to begin saving for retirement, they must first have all their non-mortgage debt paid to zero and then have built a 3 – 6 month emergency fund to ensure they don’t fall back into debt, should an emergency happen. Once complete, you’re ready to start tackling retirement by allocating 15% of your gross income towards retirement, using your company-provided retirement plan up to the match, and then utilizing the Roth IRA for everything else. You can read this article we posted about a month ago for current Roth IRA limits. Suppose you still need to contribute more dollars to reach 15% after doing your retirement plan to the match and your Roth IRA. In that case, you may consider allocating back to your company retirement plan to round everything out. Here's The Cycle Again, it’s ordinary in every area of your life to try and stop the pain when you’re experiencing it. When you see your 401(k) or Roth IRA balances start to decline, that can invoke pain, no doubt about it. However, one must retrain their brain to remind themselves that when the market goes down, it presents the best buying opportunity for new dollars than you’ve seen in some time. If the market went straight up, almost as it did in 2021, then what you bought in March cost more than it cost in February and January. While on the aggregate, that feels good, you’d much rather prefer this scenario: if you bought for $1 in January, in February you were able to buy for $.80, and then in March for $.70, and by April, everything was back to up to $1.10. Your February contributions made $.30 and your March contributions made $.40 and you're back to even plus some! That is what happens in the market, just over much longer cycles than three months. Based on my Article, Bear Markets: Normal Not Fun, we know that the average bear market takes 330 days to hit bottom with a 30% decline, on average. Then it takes 1.7 years to recover (getting back to where you were) before you start seeing growth again; this means you have almost three years during the average bear market to make contributions at lower prices than before the bear market began. This is how stock markets in countries like Japan, which have seen very little growth, still provide their retirees with a mechanism to obtain better rates than what their banks (with their negative interest rates) can provide. If I have a flat market that is up and down, as long as I’m buying a decent amount when it’s down, I’ll still make money. History Provides the Framework This year (2022), the market hit a negative 25% at its worst. It was not quite the average bear market drop, and it happened a little sooner, but it was pretty close on both accounts. To find another period where we saw the market decline by that amount, we’d have to go back to March 19th, 2020, when we were amid the COVID-19 pandemic. During that market cycle, we got as low as negative 35%. Let’s assume you were faced with the decision at that point to pause your 401(k) and pile up cash (even though you already have an emergency fund) until you felt better about the market, or alternatively you just keep your tortoise mindset and kept your 401(k) contribution to the match and Roth IRA moving forward. Who wins this race? Perhaps the person that stopped their contributions feels better (initially) because they did something. They stopped the pain. They took the brain's pain centers and gave them what they wanted: physical release because an action was taken. However, did they make the best long-term move? Johnny Keeps Saving Johnny kept saving through the pandemic. Using the S&P 500 (our growth and growth & income stocks) as the proxy, you can see that Johnny saw his contribution drop even further after the -25% point (March 19th, 2020). Still, it made a rebound and eventually got back to par, even then surpassing the initial contribution. It’s worth today 64.58% more than he put in. $100 is now $164.58 (as of November 2022). Nice job Johnny! Billy Stops Savings Billy, who, on the other hand, had different plans. Billy needed to satisfy those pain centers in the brain. Billy didn’t contribute until he saw the market fully recovered, and he could ensure that the world would not end. That meant he made his first contribution on July 19th, 2020, which would have been when the S&P 500 fully recovered. Billy started investing and got the pleasure of seeing his investment go straight up right away, not hitting a dip until September, and even then, that was a quick dip, and after he’s making money again. His investment is worth 22.97% more than he started with today (November 2022), so $100 would be worth approx. $122.97. Johnny Wins: Time & Deeper Losses Make Even Strong Arguments We can very clearly see that Johnny was the winner of this exercise. The tortoise always wins – it’s boring, yet it’s beautiful. This is one of the primary reasons why Vanguard wrote a study a few years ago, stating that Financial Advisors add around 3% value to their clients because they help them avoid the mistakes of being too emotional with their investing (along with other tactical financial planning benefits). If you push the exercise out farther and with deeper market drops (not that I’m advocating for one), the argument gets even better. Take a look at this chart, which helps you see if you would have stayed consistent with a $10,000 investment in 2008 (when we saw the market decline well over 40%). That investment today is worth $40,000. In less than 14 years, it doubled and then doubled again, even accounting for this year's losses. Therefore, be like Johnny. If you feel like you need to scratch the pain centers of your brain, read this article, talk to your Financial Advisor, take a cold shower, run a mile or do a myriad of other things that will take your mind off the stock market and onto how you can improve your life today because the investments will help take care of tomorrow.

Guess what everyone!! Ramsey Solutions has a new personality that you may have heard on the air recently or maybe you have seen her on national television and media hits. Her story is pretty remarkable and explains why she is an excellent fit at Ramsey Solutions. “Kristina Ellis is a bestselling author who believes no student should be burdened by student loans. She has helped thousands of students earn a debt-free education by sharing practical wisdom from her personal experience of earning over $500K in college scholarships.” (RamseySolutions.com) At a young age, her father passed away after his battle with a cancerous brain tumor leaving behind Kristina, her mother, and brother. Having lost the head of the household, everyone had to fill the gap that was lost; adding stress and burdens that naturally came with the situation. Unfortunately, Kristina learned to mask those emotions and developed eating disorders and turned to cutting in middle school. She was about to take her final step to reliving herself from pain forever when her aunt randomly called her. The conversation wasn’t anything significant, but the two-hour phone conversation was enough to get her out of the dark mindset she was in and start living life. On the first day of high school, her mother sat Kristina down and explained to her that “you have four years to figure out what you’re going to do with your life because you are on your own financially after graduation. You are not meant to live in poverty your whole life, and I know that if you work hard you can go to a great college and start fresh. The choices you make right now will impact you for the rest of your life.” Taking this to heart, Kristina would map out what her goals were for college. Kristina knew she would have to get scholarships in order to afford college; especially her dream school of Vanderbilt University. She treated the scholarship application process as a part time job in her freshman year of high school. This hard work and dedication translated to success in other fields in her life. She won two Junior Olympics gold medals for gymnastics, raised enough money to travel to Haiti for mission’s work, and became one of the fastest runners in her high school. She was also entered into the Miss Indiana Junior Teen pageant and won. All this during her freshman year! By her Junior year, Kristina continued to apply for scholarships and position herself as scholarship-worthy by putting in over 1,000 hours of community service in high school, building up her gymnastics team to forty-five members and winning a cross country award. Kristina was selected as one of Coca-Cola's National Scholars and awarded a $20,000 scholarship for college. Then she was contacted by the Bill and Melinda Gates Scholarship Foundation. They told her she had been selected as a recipient of their prestigious scholarship which offered a free ride to any school through her PhD. She attended Vanderbilt University for free with the Gates Scholarship and it also funded her master’s degree at Belmont University. All together Kristina was awarded over $500,000 in scholarships for college! In college, Kristina’s spiritual life developed. She joined a non-denominational group where she learned how to develop a personal relationship with the Lord. “I fell in love with the Lord during college,” shares Kristina. This scholarship mentor encourages students to believe in themselves and their potential. Her message inspires students to understand that, even if the odds are stacked against them, they can overcome their circumstances and achieve their dreams! You can check out her many articles on Ramsey Solutions and also her books “Confessions of a Scholarship Winner” and “How to Graduate Debt Free.”

Before we answer this question, ponder to yourself what you think the number one indictor would be for building wealth and having a successful amount in your retirement account(s). There are many answers and logics behind each answer. Is it the rate of return? 4% vs 12% performance. Paying the least amount of expenses? Management and custodial fees. DIY (Doing it yourself)? Personally, researching and investing yourself. Allocating the correct assets in your portfolio? While all these have some impact on building wealth, it is not the number one indicator. Finally ready for the answer? It is something so simple but yet so profound. Ready…? Savings Rate Watch the following video of Dave explaining this concept. 74% of the indication of your ability to retire wealthy is your savings rate! Your income is your most powerful wealth building tool and the more of your income you can save into tax advantaged accounts, the more you’re setting yourself up for a great retirement. The greatest investment strategies in the world, can’t pull you up, if you have a poor savings rate. Think about it this way, a 12% return on $0, is still $0. Therefore, what are ways to increase your savings rate to your retirement accounts? Pay off all non-mortgage debt Proverbs 22:7 – The rich rule over the poor and the borrow is slave to the lender. It’s hard to achieve a respectable retirement savings rate, which we would define as 15% of your income, if you’re having to make payments to Mastercard, Discover and Visa. We’d rather collect a dividend from Visa stock than pay Visa interest each month. Budget, Budget, Budget Almost every time you begin to budget, you begin to find places you’re over spending and therefore creating opportunities to save and invest more for retirement. Using tools such as Dave Ramsey’s Everydollar Budgeting App, make budgeting easy and fun (keep in mind I am a Financial Advisor!) and allow for changes instantaneously, if things come up that were unexpected or unbudgeted. Taxes, Taxes, Taxes, If you’re getting a refund each year, you’re doing it wrong! Giving the government a free loan, each year is not prudent money management. You could be putting that money into your Baby Step 4 and earning stock market type returns on that money, as opposed to letting the government borrow your money for 12 months and paying it back to you once you file your return, with zero interest. Please contact our Tax ELP for tax advice or to ensure you’re withholding at an appropriate level. Increase your income There are currently around 11 million job openings in the US. This is a record for the country, which means the economy is still in pretty good shape (you can’t have that kind of job demand in the midst of a bad economy) and it means employers are willing to pay to get employees in the front door. This may be the opportunity for you to make the career change that will enhance your income and create an opportunity for you to do work that matters! Baby Step 4 Execution Matching your employers’ contributions in your 401k If your employer offers a match on 401k contributions, you should contribute whatever they are matching. Let’s say that XYZ company offers a 3% match. You should put in at least 3% of your pay into your 401k. You are doubling your savings rate by obtaining a match. If you can afford to go higher, then go for it, after you have maxed out your Roth IRA! Consider having your Financial Advisor, help you manage your 401(k) to ensure its properly diversified and not chasing returns, within your plan. According to a recent Aon Hewitt study, having an advisor help you with your plan, increased the return by 3.32% Contribute the maximum amount to a Roth IRA or Traditional IRA If your employer does not offer a retirement account, then it would be in your best interest to open an IRA (Individual Retirement Account). There are two types of IRAs. Traditional and Roth. Both of these vehicles have a contribution limit of $6,000 per year, with an additional $1,000 per year catch-up contribution for those age 50 and older. As a general rule, you have until Tax Day to make IRA contributions for the prior year. In 2022, that means you can contribute toward your 2021 tax year limit of $6,000 until April 15. And as of Jan. 1, 2022, you can also make contributions toward your 2022 tax year limit until tax day in 2023. So how do these differ from each other? Traditional A traditional IRA is a type of individual retirement account in which individuals can make pre-tax contributions and the investments in the account grow tax-deferred. In retirement, the owner pays income tax on withdrawals from a traditional IRA. Roth A Roth IRA is an Individual Retirement Account to which you contribute after-tax dollars. While there are no current-year tax benefits, your contributions and earnings can grow tax-free, and you can withdraw them tax- and penalty-free after age 59½ and once the account has been open for five years. If you can take away one concept from this article, it is that “Building wealth means nothing if you do not put money way!” -Dave Ramsey

Before we start to segregate each of the four funds that Dave Ramsey recommends, we need to review a few important terms. Mutual Fund An investment where people collectively pool their money together to invest in securities such as stocks and bonds. These funds are managed by professional money managers who allocate the funds’ assets and attempt to increase the funds within the investment. Market Capitalization This is the size of the company your mutual fund or you individually might be investing. This size is determined by taking the total number of outstanding shares of stock times the current stock price. For example, if a company had 20 million shares outstanding for $50 per share it would have a market capitalization of $1 billion. The worlds largest company today, in regards to market capitalization is Apple, with a market cap near $3 trillion. Dave’s 4 categories for Investing Growth In the investment world, these are Large Cap Growth Funds. Companies within this type of fund have a market capitalization value of more than $10 Billion. Common characteristics of companies within this type of fund are: 1. Transparency of the company; the financial situation of the company is generally made public and easy to find. 2. Stable; generally, these companies are seen as stable and do not typically offer the same level of growth that smaller companies can potentially provide. 3. These companies usually do not offer Dividends and instead, they reinvest their growth back into the company to help develop and expand the services. A common index benchmark for Large Cap Growth Funds is the Russell 1000 Growth. Growth and Income In the Investment world, Growth and Income are Large Cap Value Funds. These are large stable companies that instead of reinvesting their growth, they will offer investors dividends. These are slow growing companies, who supplement that slower growth with a share of their profits, hence the dividend and whose market capitalization are $10 Billion or more. A common index benchmark for Large Cap Value is the Russell 1000 Value. Aggressive Growth In the investment world, these are Mid and Small Cap Funds. Companies within the Mid Cap Fund have market capitalization of $2-$10 billion. Mid Cap companies usually offer investors greater growth potential than large cap funds, and have less volatility than small cap funds. A common benchmark for companies within the Mid Cap Fund space is the S&P 400. Additionally Mid Cap Funds can be classified into two subcategories. Mid Cap Growth and Mid Cap Value. As discussed above with large cap funds, Mid Cap Growth Funds will be investing in stocks whom are faster growing companies with a market capitalization between $2-$10 billion. Mid Cap Value Funds will be investing in stocks of companies whom are slower growing typically, but are sharing their profits with you the investor through a dividend, in that same market capitalization space of $2-$10 billion. Companies within the Small Cap Fund have market capitalization of $300 million - $2 billion. These funds are looking for young companies or companies that are rapidly growing. Small Cap companies offer investors good growth potential; however, it offers more volatility than mid and large cap companies. A common benchmark for companies within the Small Cap Fund is the Russell 2000. Additionally Small Cap Funds can be classified into two subcategories. Small Cap Growth and Small Cap Value. As discussed above with Large Cap Funds, Small Cap Growth Funds will be investing in stocks whom are faster growing companies with a market capitalization between $300 million - $2 billion. Small Cap Value Funds will be investing in stocks of companies whom are slower growing typically, but are sharing their profits with you the investor through a dividend, in that same market capitalization space of $300 million - $2 billion. International In the investment world, these are companies that are outside of the United States. They can be grouped into two categories; developed markets and emerging markets. Developed Markets: Companies that are located in the developed markets are generally established and highly industrialized (first-world) countries. Common non-U.S.A. developed markets are: UK, Australia, Japan and Germany. Developed markets usually have a more stable political and financial position and have easy access to your investment funds. A common benchmark used to assess the performance for funds within Developed Markets is the MSCI EAFE index. Emerging Markets: Companies located in emerging markets are considered to be between developing and fully developed economies. These markets are usually harder to get money in and out of and can have high political volatility. Countries with emerging markets are India, Brazil, and China. A common index used to measure the performance for funds within Emerging Markets is the MSCI Emerging Markets Index. Global Funds (World Fund): This is a fund that invests in companies locate anywhere in the world, which of course includes the United States. Global funds seek to identify the best investments across the globe. A common index used to measure the performance for funds within the Global Fund is the Vanguard Total World Stock Index Fund. It is important when talking to your advisor, to ask why they would place you in a Global or World Fund vs. an International Fund. “Why is this a problem you ask?” Because these Global funds don’t capitalize, as effectively, on the good years for the international market. Global Funds also reduce the diversity in your portfolio as they can invest approx. 50% of the portfolio into American companies, which is actually what you are already doing in the Growth, Growth & Income and Aggressive Growth categories. If the American market has a rough year, then 87.5% of your investment portfolio is exposed to the American market, because your advisor used a global fund as opposed to a true international fund, compared to 75% as Dave Ramsey recommends. Another misleading practice is when an advisor uses their returns on the Global Fund, and compare it against a true International Fund. They’re two completely different markets offering an unfair comparison. To learn more about investing into the four categories of funds that Dave Ramsey recommends, please contact one of our SmartVestor Pro's today!

Are you new to the term “sinking fund”? If you are, you are not the only one because whenever I mention it, I am usually met with a blank stare. Followed by… “What is that?” Simply put, a sinking fund is a savings that is for a specific purpose. It is NOT your emergency fund. It is a separate fund that you are using to set money aside that will be used for a specific bill or event. What Is The Difference Between A Sinking Fund And An Emergency Fund? There is a difference between a sinking fund and an Emergency Fund. An Emergency fund is for Emergencies only. Meaning, you are not expecting it. This would be things like medical emergencies, car breaks down, pipes burst in the house, those sorts of unexpected expenses. A Sinking Fund is something that you are expecting to spend. This is stuff like your quarterly insurance bill, your annual real estate taxes, a new roof, a new car purchase, a vacation… those sorts of things that you know are coming up! Are there times when you might need to tap into your Emergency Fund to cover something you should pay for with your sinking fund? Sure. Let’s use the example of a leaky rook. If your roof starts to leak and you don’t have enough money in the “new roof sinking fund” to replace it…. you would need to tap into the emergency fund. A leaky roof certainly classifies as an emergency. Once you replace the roof, start a sinking fund for it. That way next time you need a new roof again… you have the money set aside and you won’t need to tap into the emergency fund again! How Does A Sinking Fund Work? The way a sinking fund works is by saving monthly for a large expense that you know is coming up. This means when that large expense comes due, it is not a huge hit to your budget. This includes bills that are due quarterly or annually as well as big purchases that you know you will need to make in the future such as a new car, a new roof, or a vacation. For example, if your property taxes are $1,500 and you pay them annually, you would save $125 every month throughout the year. ($1,500 divided by 12 months before it is due = $125 that you need to save monthly.) Then, when the bill comes due you have $1,500 sitting in an account meant to be used specifically for your property tax bill. Think about how much that would reduce your stress. Getting a $1,500 bill in the mail is stressful! UNLESS you have the money set aside ready to be used specifically for that bill. What Types Of Things Would I Use A Sinking Fund To Save Up For? There are 3 main types of Sinking Funds. Large Expenses/Bills. This would be anything that you pay quarterly or annually. Some examples are things such as taxes, insurance, subscriptions such as Amazon Prime, etc! Anything that you are paying quarterly or annually is usually a larger amount and that means it can be stressful to have to pay for it with one month’s budget. Saving up for it monthly means that when the bill comes in the mail, you are ready to pay it with the money that you have in your sinking fund! Big Purchases. This would be things such as purchasing a new car, replacing a roof, buying a new computer or phone. Things that you know are coming up in the future and will take a significant amount of money to purchase. Saving for this monthly will help reduce the stress when it comes time to make the purchase. Upcoming Events. This is anything from that vacation you want to take to the birthday gifts, Christmas gifts, and shower gifts you need to purchase. Saving for these things every month means that when it comes time to take the trip or buy the gifts, the money is there and it is meant to be used for that specific purpose! How Do I Keep Track Of How Much Is In Each Fund? If you have a lot of things you are saving up for, it can be hard to know how to keep track of it all. How do you know how much you have saved for each fund? I like to have separate accounts set up for each fund… or at least each type of fund! I know that sounds like a lot. But really, it’s not. Having separate accounts means that we don’t have to keep a spreadsheet updated with the amount in each fund. I’m not a spreadsheet gal. I can use them but they definitely don’t excite me. So I would much rather have separate accounts set up for each sinking fund in order to keep track of how much is in each fund! Here is how we set up our separate accounts… We have a separate checking account that is for our large expenses/bills. For us this is stuff such as, propane, taxes, insurance, Amazon prime. We know the amount of those bills and we can easily add them up and divide by 12. Then, that amount is automatically transferred into our separate checking and when the bills come, they are paid from that account. We also have a car repair/replace savings and a house repair savings. We have a savings for vacations or other big things we are saving for at the moment as well. You can also have a gift savings. Or… what we do is just pull that money out in cash every month and save it in an envelope! We have all of these accounts nick-named appropriately on our online banking. That way we don’t have to even think about it or remember what each account is for. We have automatic transfers set up that happen every month without even thinking about it. The transfers go from our main checking out to these separate sinking funds. Then, when it’s time to pay the bill, take the vacation, or buy the gift… the money is there to use for that specific reason. I’d love to hear from you… What are you using a Sinking Fund to save up for?

Is there ever a “smart” loan to take out? According to our friend Dave Ramsey, “Debt is dumb….” This is generally true because “the borrower becomes a slave to the lender” (Proverbs 22:7), paying handsomely for the loan over time in the way of interest payments. Though we do not recommend taking on debt, we will analyze one specific type of loan structure associated with the home mortgage, the amortized loan, and how you can make the most of it. Amortization An amortized loan has scheduled payments applied to the loan’s principal balance and interest. “Amortize” refers to the gradual payoff of a loan (or asset) over a certain period. While we do not recommend taking on debt, the home mortgage is the exception to the rule. Despite being an exception, it’s essential to have a plan to pay down that loan as quickly as possible. That plan is also known as an amortization schedule. An amortized loan front-loads the interest payments in the earlier periods, with the remaining amount devoted to reducing the principal balance. Then, as time passes, the interest payments get smaller, and the principal payment increases. This structure is designed to benefit the lending institution in the early days of a loan, allowing them to capitalize on even the most aggressive borrowers who intend to pay off the debt early – a strategy you should do your best to employ. Being Aggressive While there is little you can do to reduce the initial interest payments on an amortized loan, you can still benefit from an aggressive strategy about paying off your mortgage early. The interest calculation is based on the loan's current balance, so the interest amount decreases incrementally as payments are made. So, when you pay additional principal payments, the calculation changes, and you wind up saving money on interest over the course of the loan. Here is how the calculation works: Multiply your current loan balance by the interest rate (divide the annual rate by 12 for the monthly rate) = Interest due for the current period. Suppose you’re buying a $250,000 home with a 15-year annual fixed-rate rate of 6.5%, and you made a down payment of $50,000 (20%). Here’s an example of how that calculation works: $200,000 (principal balance) x 6.5% (annual interest rate) = $13,000 (annual interest amount) $13,000 (annual interest amount)/ 12 months = $1,083 (current month’s interest amount) $1,742 (monthly principal and interest payment) - $1,083(current month’s interest amount) = $659 (current month’s principal amount) If you pay extra principal during a given period, that amount will be deducted from the loan’s principal balance, affecting the calculation and resulting in a lower interest payment for the next period. If you do this consistently, you will significantly shorten the length of your mortgage term and build equity much faster. As you can see, it is worth looking at your budget and reallocating some spending to additional principal payments. An amortization schedule is another budgeting tool that can set you on the path to financial freedom. Chief Operating Officer, Amanda Sharratt, discussed the benefits to paying off your mortgage early as well as how to accomplish baby steps 4-6 in this Question of the Week video. If you’re interested in tackling baby step 6 and being what Dave Ramsey calls “weird people” (the good kind), talk to a financial advisor or financial coach to see how an early mortgage payoff might impact your financial future.

President and Chief Investment Officer John-Mark Young has been named to AdvisorHub's list of the top Financial Advisors for a second year in a row. Last year he was listed as an Advisor to Watch, and this year he was named as one of the Top 200 Fastest Growing Advisors. The award measures the firm and John-Mark in tangible ways, such as the assets they help clients manage and the level of service they provide, such as their financial planning offering. To be considered for the Fastest Growing award, the Advisor must have year-over-year growth, and finally, AdvisorHub reviews the Advisor for their regulatory record, community service, and team diversity. When asked about the award John-Mark was reminded of Joseph - "It's our job to try and understand what might happen, give guidance, and plan accordingly. Just like Joseph, if God doesn't bless us by putting us in front of the right people (clients), just as Joseph was put in front of Pharoh, then no value is created. However, He has seen fit to bless our efforts; I'm thankful and blessed for that. We have an incredible team at Whitaker-Myers Wealth Managers, from our back office compliance team led by Chief Compliance Officer Kelly Taylor, our Financial Advisor Team led by Amanda Sharratt, our Tax Team led by Kage Rush, and our Financial Coaching Team led by Lindsey Curry. I couldn't be more thankful for a team that makes our service to clients possible. In addition, I've sacrificed so much time with my family to serve our clients, so I'm eternally grateful for my beautiful wife, Megan, who is the definition of a Proverbs 31 woman. She is far more precious than jewels. The heart of her husband trusts in her, and he will have no lack of gain. And of course, I would be remiss if I didn't thank my friend Dave Ramsey and the team at Ramsey Solutions, such as Scott & Ben, who support our efforts as Smartvestor Pros. We serve clients with the heart of a teacher because that's what Dave demands and clients deserve." Chief Operations Officer Amanda Sharrat added, "AdvisorHub is presumably looking at things we do that make us different and unique to create the kind of growth that would lead to admission to this list. Investments we have made in our business, such as our new client portal that allows a client to see their financial plan and projections in real-time every single day, is an example of that commitment they would say leads to continued growth. When clients are better informed, they make better decisions, and when they make better decisions, their assets typically reflect that, and as we always say, our compensation is designed in such a manner that we do better when our clients do better. Our new clients portal helps us live out one of our Core Values of having the Heart of a Teacher." Kevin Hewitt, President and CEO of The Chrisitan Children's Home of Ohio, agrees with AdvisorHub's analysis of both Whitaker-Myers Wealth Managers and John-Mark's commitment to serving their community. "We are beyond thankful for our relationship with Whitaker-Myers Group and John-Mark. Specifically, their desire to make an impact for the Kingdom of Christ through their professional work and individual service to our organization and the families and children we serve at The Christian Children's Home of Ohio is greatly appreciated. Just a few weeks ago, the team at Whitaker-Myers Wealth Managers graciously gave of their time and talents to help us set up for and prepare one of our largest fundraisers of the year, The Great Grill-Off. We're grateful for our relationship and can't wait to serve Christ together for many years to come." John-Mark will accept the award at a ceremony on October 25th, 2023, at The University Club in New York City. You can read more here about all of the AdvisorHub awards given to the Financial Planning community. In addition, you can see the entire list of the Top 200 Fastest Growing Advisors in the country here.