In this article: https://www.pihlfinancialplanning.com/post/how-long-can-wealth-really-last   I posed the thought experiment, “how might I design a portfolio designed to provide lasting multigenerational wealth?” This article shows a test of how that might play out, using a historical data set, and a very hypothetical family tree. The Portfolio For this idea to work, you need a portfolio with a high rate of growth. We are not only attempting to keep up with an exponentially-g

When people ask, “When should I take Social Security?” they usually want a definitive answer. They want to know what’s best, objectively. Asking, “What’s the optimal claiming age?” is like asking, “What’s the best car?” Best for whom? The best car for you  might be a Subaru Outback. Your neighbor might prefer a Toyota Tacoma. Both are excellent vehicles, but they solve different problems. The Social Security system is built around actuarial tables that reflect the entire popu

I’ve been thinking a lot lately about the idea of multi-generational wealth. Is it possible for wealth to survive multiple generations? Is it even advisable?  Most cultures have some description of the transience of wealth. The philosopher Voltaire once wrote that history is full of the sound of wooden clogs going up the stairs, and silk slippers coming down. In Japan, the expression is “rice paddies to rice paddies in 3 generations.” In Scotland, “shirtsleeves to shirtsleeve

They say your first million is the hardest, which makes sense. I was recently talking with a couple whose net worth had just crossed that threshold. It was a meaningful milestone, but it didn't change very much about their day to day lives. The mortgage was still there. They still went to their jobs the next day. And the long-term plan was largely the same. For most people, a $1,000,000 net worth isn’t enough to retire completely. It’s a strong foundation, though, and usually

These are reflections I’ve been thinking about personally and increasingly discussing with clients as they approach financial independence. It’s funny how your goals change as you become more successful. Most people know the feeling of “chasing the horizon.” No matter how far you’ve come, it remains just out ahead. That’s the nature of our financial goals. How much is enough? Just a little bit more. But I’ve also run into the opposite paradox. When I first started my busines

I recently read The Wealth Ladder  by Nick Maggiulli and found it both thoughtful and practical. Below are a few notes and reflections that stood out to me. If you’d like to go deeper, I’d recommend picking up a copy of the book. Maggiulli’s Wealth Ladder is a tool for thinking about wealth. He divides the financial world into 6 levels, each representing a different functional level of net worth. There’s nothing magical about where these levels start and end. What it highligh

I enjoy asking clients what their best experiences were since I last saw them. I like highlighting these moments consciously because it helps them to spot patterns and identify future opportunities for enjoyment. Often these moments are couched inside other experiences, like a trip abroad, or visiting with a relative. It isn’t the whole trip that was a blast, usually, but a few specific, shining moments. Often, these moments are optional and easily skipped, but are inexpensiv

My inbox is full of companies asking me to extend their “private lending solutions” to my clients. Just yesterday, I listened to a pitch from a large fund company offering what they called “alternative lending solutions.” They suggested interest rates in the 6–9% range, depending on the funds chosen. But at no point in their 90-minute presentation did they meaningfully discuss risk or security.  In what world would I ever invest the savings of my family and friends without a

Most lottery winners have nothing to show for it 12 months after winning. The statistics for inheritance are depressingly similar. True, a larger inheritance (or jackpot) tends to take longer to spend. But for the most part, such windfalls do not solve “the money problem” permanently.  Leaving money to your kids via a will (without a trust) does not give you much control over when they receive the money and how they spend it. Now, this article is not exactly for people in the

Many people I talk to do not have a pre-nup provision in their estate plan, and this creates a huge vulnerability for their financial legacy. This is especially pertinent for couples who have been married a long time, have kids together, and have no kids from a prior marriage.  A pre-nup clause is a short segment you put in your trust that says, “look, these assets are here to take care of the surviving spouse and eventually our kids. If the surviving spouse remarries, this m

When your net worth is less than $1,000,000, it may or may not make much sense to create a trust. You can often create feasible, low-cost workarounds for avoiding probate, as I outlined here:  https://www.pihlfinancialplanning.com/post/do-you-need-a-revocable-trust-to-avoid-probate-on-your-house However, as your net worth increases, it becomes more and more advantageous to have a trust in place. This is because the complexity of your financial life tends to expand alongside y

When it comes to avoiding probate on your primary residence, a revocable trust isn’t always necessary.  In Oregon, Washington, and New Mexico you can avoid probate by retitling your home’s deed to “transfer on death.” You still retain full ownership, including the right to change your beneficiary later on. However, when you eventually pass on from this world, your property goes directly to your beneficiary and skips probate. To do this, you get a “transfer on death” deed fro

As the year comes to a close, I like to take time to reflect, give thanks, and prepare thoughtfully for the year ahead. These reflections are less about markets or forecasts and more about the substance beneath them. The real value of financial planning how well our resources support a life well-lived. Money, while important, is just a means to bigger ends. My planning practice continues to grow nicely, helped along by personal introduction from existing clients. It is a priv

As we approach the end of another year, many people are considering gifting some money or assets to the people and causes they care about. Depending on the situation and your goals, there are a few nuances worth considering which can make your gifts a lot more effective.  If you are giving money to a qualified, tax-exempt charitable organization, here are a couple strategies to maximize the impact of your gift.  First, if you are over 70 ½, and do not  itemize on your taxes,

How much of your net worth would you put into a house or a mutual fund that you knew was going to lose 70% of its value over the next 10 years. Not only that, but actually, you’ll have to pay money into it each year just to keep it. The right answer is, “as little as possible.”  Do houses or mutual funds generally do that? No. But cars almost always do.  My financial role models are not car people. The richest guy I’ve met in person drives a lexus, which is essentially an eve

On October 19th, 1987 the Dow Jones Industrial Average dropped 22.6% in a single trading session. A million dollar portfolio on Sunday finished Monday with $787,400.  Based solely on this datapoint, one might assume that 1987 was a horrible year to be invested in stocks. Yet the total return for the year was 5.81%, including dividends. Huh.  That’s partly because markets had a really strong, maybe excessively strong, year going into the crash. The Dow was up 44% from the begi

A catastrophe is always brewing. Or one is already happening. Sometimes more than one catastrophe is unfolding simultaneously. Such is life.  Stocks are risky in part because investors assume that the future will be more or less like the present. It never is. Occasionally, we are reminded what an unpredictable world we live in, and the illusion of smooth continuity is shattered. Chaos reigns. Hence, some people update their valuations models, find that their investments aren’

Let’s talk about the difference between a 10% expected return in stocks and a 3.8% return from TBills.  That extra 6.2% makes a big difference. Over 20 years, 10% turns $1 into $6.72. 1.038 grows it to just $2.11. That’s 3x the return, and the difference only expands with time.  Perhaps more startling is what happens when you factor in inflation. Even 3% takes that $2.11 down to just $1.17. So if you invest $1 in bonds and then wait 20 years, you end up with just $1.17 in ter

First off, for specific figures, I recommend this page on the Medicare.gov website. It explains what the key terms mean, like Part A, B, and D, how coinsurance works, etc. Importantly, it also mentions what those all cover, and how much you pay (or could pay) for them. And it does so in plain English. Super useful. Start here: https://www.medicare.gov/basics/costs/medicare-costs   Secondly, I recommend you work with a Medicare enrollment agent. It doesn’t increase your premi

For retirees I usually recommend a portfolio between 50% stocks and 80% stocks. In other words, the most conservative portfolio I...