What’s New at MGFS
During the second half of 2021, we were quite busy with investment and tax planning reviews, required minimum distributions season, helping clients with new year goals (a lot of retirements!), and we completed our re-branding project. As a result, the MGFS website is updated and simplified, and provides a centralized location to access your account portals and resources to help with your financial planning.
We continue to receive excellent feedback with helping our clients as they start families, save for college, retire debt, plan for retirement, travel, and estate planning. It is funny how life frequently happens in this order. We also helped many of you with unique planning initiatives from starting up businesses to creating personal pensions, to more intricate projects related to minimizing risks, taxes, and fees for now and in the future. We are thrilled to have an impact on your lives in these areas and more.
We are growing! We just acquired a wonderful, local, business partner. Daniel Watson and his assistant Laura Kalenchitz have joined MGFS, as of Feb 2nd. Dan built a financial practice over 51 years, helping emerging affluent and high net-worth clients like you. Laura has been Dan’s administrative assistant for 35 years. We are thankful to bring this well of knowledge to our team. This merger increases resources to assist you with your evolving needs. We pride ourselves on responsiveness and thoroughness when you need us most. As we grow, we have more people to support and provide you with the best experiences. Please welcome Dan and Laura!
2021 was an amazing year with unprecedented market performance, record-level supply chain productivity that frankly felt like a disaster, and an unsatiable level of consumer demand. A volatile January brought a dramatically different market to the forefront of our minds. With a “hot” economy, the Fed contemplating what to do with inflation, and markets questioning what is next, our MGFS quarterly briefs and monthly 2-minute market videos have offered very helpful resources to update you on current events. Our mission, aside from converting complexity to clarity, is to enable you to do more of what you need and like to do with confidence and less distractions.
Our first client “referral” event took place in early December. It was also our first event in over 2 years and terrific to be with many of you again. With over 60 guests in attendance, the dinner and comedian combined for an enjoyable evening and wonderful transition into the holidays. We look forward to several more opportunities to see you together later this year and both enlighten and entertain you in different ways.
Keep In Mind
Monthly email releases of chapters from our book “Guided Retirement Income Planning” have begun. For those of you who have read it, these publications will be great reminders of what is important for a successful retirement. For those who have not, what a great way to methodically gear up or make sure your retirement is financially in its best form throughout the year (or over 20 months as we are being literal!).
Fall Economic Presentation – Speaker and details to come.
Yearend “referral” event – Details to come.
*Let us know if you’ve changed your preferred phone numbers or email addresses. This will really make a difference when you need help. Just respond to this email with your new information and we’ll take it from there.
ADAM – Jadyn played the role of Miep in Diary of Anne Frank for her high school play. It was a moving ensemble performance, and she did great. She also applied and was accepted to Tulane University! Neuroscience, public health, or some other way to save the world – clearly more to come. Zander is a bio-medical engineering student looking for a summer internship in the Chicago area. Any ideas?
BARRY – Barry is currently studying virtually for “another” designation with the American College for the accredited Chartered Advisor and Philanthropy (CAP) letters. He is half-way through the curriculum and hopes to be done this summer. More to come on this later this year. Barry and Ruth just returned from a wonderful trip to Kauai, their first winter getaway in several years!
TOM – Tom and Becky recently finished their basement and are enjoying their new space. Lately they have been busy with Mason’s 4th grade basketball team and new piano lessons. He seems to be a natural and is learning new songs quickly!
Please meet Dan Watson!
DAN – In his spare time Dan likes golfing and relaxing around as swimming pool. He recently wrote and published his first book, “What the Crow Didn’t See.”
CORY – Cory and her husband Michael have been busy chasing around their 3 year-old son and 5 year-old Siberian Husky. They have started to get out again recently and have been excited to finally see many of their friends more regularly.
Please meet Laura Kalenchitz!
LAURA – Laura likes to cook and explore different wines in her space time!
MARY PAT – Mary Pat and Kevin have spent the last 3 months negotiating how to best remodel their 3 bathrooms. Lots of stress with the decisions about materials! Work is scheduled to begin in April!
What is most important for performance: risk management, taxes, or fees? Over the years we have learned the following and apply efforts to build and manage portfolios with these tenets in mind.
In the following order:
- Risk management has the greatest impact on near-term and long-term performance. This is the number one portfolio management decision we focus on. If a market goes up an average of 20% and you are exposed to 75% of the market, you should be within range to achieve 15%. In the short-term, if the market were to drop 20% your portfolio should drop approximately 15%, as well. It is important to note that active portfolio management can skew these numbers but the relationship between risk and reward are within a range that has greater impact than the other factors below.
- Taxes are second to the impact of risk management. When the above portfolio achieved a 20% return, depending on when you sell or pay taxes, you would be subject to short-term capital gains and income tax rates between 20-43% on the growth, and long-term rates would be approximately 20-24% – the precise amount is based upon your income level. Oversimplified as this may be, when applying the tax rates to the 20% return, you would have a tax equal to 4% – 8.6% or 4% – 4.8%, respectively. Whether the market goes up or down, the level of impact from risk and taxes holds true. We refer to the goal of being tax efficient as a guide rather than a goal. No one really invests in the market to not pay taxes. They do however invest to build and maintain wealth and prefer to do so with tax sensitivity.
- Fees are no less important to consider but have the least impact on performance. They can be elusive as they come in many forms – internal expenses, trading costs, custodial services, portfolio management, and advisory costs. It would be unfair to state an average fee across our client-base because each client receives a blend of solutions that are unique to their needs. One client may pay almost nothing for their portfolio of bonds while another client may pay greater amounts for contractually guaranteed benefits. All said, we are fee sensitive, and the investment related fees generally have the least impact on portfolio performance.
All three independently and collectively can add up. So, getting your portfolio right for you, understanding your needs and priorities, the economic environment, market conditions, stitching your unique strategies together dictate the approaches we implement for your financial needs. Overall, your needs and what you do to achieve them outweighs the impact of risks, taxes, and fees.
As you already know that we love to share great quotes. Here is an inspirational one from Arnold H. Glasow: “Live in the present and make it so beautiful that it’s worth remembering.”
Fun Money Trivia
See how money you get right, answers below.
- What building is found on the back of a US $100 bill?
- A) Statue of Liberty
- B) Carnegie Hall
- C) Independence Hall
- D) White House
- E) White House Black Market
- What is the official currency of the country of Ecuador?
- A) US Dollar
- B) Euro
- C) Peso
- D) Crypto
- E) J. Lo
- Who was at the top of Forbes 2021 list of the richest people in the world?
- A- Bill Gates
- B- Elon Musk
- C- Jeff Bezos
- D- Taylor Swift
- E- Guy Fieri
- What is the Spanish word for money?
- A) Franco
- B) Reales
- C) Arroz con Pollo
- D) Dinero
- E) Biblioteca
- What was the first publicly traded US company to reach a trillion dollar market cap?
- A) The Waffle House
- B) Apple
- C) Amazon
- D) Microsoft
- E) MGFS
(trick question- MGFS is not publicly traded!)
It's a Wrap!
Thanks for taking a moment to stay connected with MGFS. We can’t help you without your engagement and know it helps to know a bit about us and how we help you get to where you want or need to be. We look forward to speaking with you soon!