An Employee Stock Ownership Plan, or ESOP, is a retirement plan that invests primarily in the stock of the company you work for. In plain English, it is a way for employees to build ownership in the business over time, usually without writing a check themselves. That can be a very good thing. It can also create a strange financial situation: the same company that pays your salary may also become one of the largest investments in your retirement plan. That is the basic tradeof

I read Benjamin Franklin’s Autobiography several years ago, and I still think about it. Franklin retired from his printing press business at 42. By then, he had built a successful company, saved enough to become financially independent, and gained control over his time. Upon making the decision to retire he wrote, “I would rather have it said, ‘He lived usefully,’ than, ‘He died rich.’” Indeed, many of the accomplishments for which he is best remembered came after he no longe

One of the hardest retirement questions is also one of the most basic: How much does your life actually cost? That number affects nearly every part of a retirement plan. It helps determine how much income you will need from your portfolio, how much cash you should keep available, whether you can retire now or should work another year, and how much flexibility you will have if markets perform poorly. Yet many people reach retirement without a clear answer. They know their mort

I recently looked at my grocery budget and realized something strange. Compared with eating more meals at restaurants (or even grabbing a quick meal at Chipotle), I have a functionally unlimited grocery budget. I can keep my fridge stocked with everything that makes cooking easier and more enjoyable, and still spend far less than I would eating out more often. So the problem got reframed from, “I need to spend less money eating out,” to “I need to keep more veggies in my frid

I’ve had a handful of parents and grandparents ask me about the new “Trump Accounts” (aka 530A accounts). Many are excited about the idea of giving their kids a head start financially, particularly the benefit of 60 years or more of compound interest. While the retirement math is pretty compelling, if the intent is for funds to be used in early adulthood, I think there are better tools available. If the funds are left alone until retirement age, compound interest works mirac

I met a man who had spent the last four years living out of a camper perched atop an old F-250. He does own a home, no mortgage, but it sits largely unused. He has significant assets from the sale of his business. Since retiring, he has spent nearly all his time traveling the US, Canada, and South America. He is 63 years old. For the sake of his privacy, let's call him Marco. In the winters, Marco skis four days a week (Monday-Thursday), then spends his weekends restocking hi

When clients talk to me about long-term care late in life, many express a similar worry. It’s usually framed financially at first: not wanting to become a burden to their kids, not wanting to spend down everything they’ve built, not wanting to end up stuck in an expensive facility for years. But I sometimes think there’s a deeper concern underneath that. Not just the fear of poor health, but the possibility of feeling disconnected from the people and routines that make life g

Most people give in a reactive way. A friend asks for a donation. A letter comes in the mail. It’s the end of the year and you realize you haven’t given much, so you write a few checks. There are a few problems with this approach. First, and maybe this is just me, but it feels like an obligation. There’s a little bit of guilt involved. “I forgot to do this. Am I letting them down if I don’t give? What’s the least I need to do to avoid feeling bad about this?” It’s uncomfort

I am convinced that money’s highest use is to support a good life. And one of the best ways to have a better life is to be of service to others. Two of the most vital needs for humans are our need for connection, and our need for purpose. Sadly, I think these are some of the most commonly unmet needs in our society today. But when you get out of your own head, away from your own needs and fears, and instead focus on what you can do to be of service to others, everything els

I’ve been thinking about how I’d like to be when I’m older. It’s a worthwhile question for anyone. Even if you’ve just made it to retirement, you likely have many years ahead to shape your future life. Life is a creative act. Our future comes from how we spend our time today. The choices we make, the habits we form, the attitudes we cultivate. When I find people I admire, or just specific qualities, I try to reverse engineer that back to the present. What would I have to be

I came across a talk from Arthur Brooks on leisure and found it thought-provoking. The biggest shift for me was the distinction between passive and active leisure. Here's the link to that, notes below: https://youtu.be/n0apNHGLBMo Passive leisure looks like watching TV, scrolling, or reading the news. Active leisure is more engaging. It involves creating, participating, or connecting with something in a more meaningful way. And it turns out, it contributes far more to happin

The thing about investing is that markets are volatile. When it comes to that reality, there are two broad approaches. One is to try to outguess the volatility, getting out when markets feel too high and getting back in when they’ve fallen. This tends to become a frantic, all-consuming process, and most people who follow it end up with less than they would have by simply staying invested. The second approach is the opposite. Buy and hold a diversified set of businesses for a

History is full of disruption. War, political upheaval, epidemics, technological change. Open a history book from any era or country, and you’ll see the same forces at play. And yet, the broader pattern is clear: we encounter obstacles, we work through them, and we move forward. My bet is that this continues. At the onset of COVID, markets fell more than 30%. A global pandemic and widespread shutdowns led many investors to take a deeply pessimistic view of corporate profitab

At some point, most investors have an experience that changes how they see markets. Before that moment, it’s easy to get pulled around by headlines. The world feels fragile. Every downturn feels like it might be the one that doesn’t come back. After that moment, you start to see how resilient markets and the economy actually are. The short-term noise doesn’t disappear, but it loses its hold. For me, that moment was COVID. Think about what happened. The global economy is built

A mortgage touches nearly every part of your financial life. It affects your risk, your cash flow, your freedom, and your peace of mind. Some see it as a burden to eliminate as quickly as possible. Others treat it as cheap access to capital and stretch it out for as long as they can. Both views capture part of the picture. But usually one lens will dominate depending on where you are in your financial journey. Early on, a mortgage can offer modest leverage at a reasonable c

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