“The Future Depends on What You Do Today”- Mahatma Gandhi

100-candlesNo one has a crystal ball.  If we did, we might ask three important questions:

-How long will I live?

-Will I have enough money if I live to age 100?

-How will I spend the time I have on this earth?

As wealth managers dedicated to increasing families’ wealth and legacies, we consider these questions and the related answers as extremely important.

We Americans are living longer.  From 1980 to 2020, the number of Americans 90 years of age and older tripled to 1.9 million. And, by 2050, it is expected there will be 8 million 90 and over.  This is a new paradigm.  Historically, people retired in their 50s and early 60s and lived their last few years retired in comfort during the “golden years”.   These days, someone retiring in their early 60s could live 30 or 40 more years.  If so, will they have enough money and what will they do for that time period (perhaps 1/3 or more of their lifetime on earth)?

Life Expectancy. There are some good tools to help you estimate when your “plan will end.”  Here are three: https://www.livingto100.com/, https://www.bluezones.com/ (click on tools), and https://www.myabaris.com/tools/life-expectancy-calculator-how-long-will-i-live/, (Note: each site will require you entering your email address) These tools can take 5-10 minutes.  All look at personal health, family history and socioeconomic status.

Will My Nest Egg Hold Out?  Next, it’s time to calculate your expected “financial independence” date.  See our blog of April 21, 2015 http://www.dwmgmt.com/plan-for-financial-independence-not-retirement/  This is the date at which you have enough assets for the rest of your life without needing to work for money.  Recently this “independence” date has been extended for many due to three principal factors; increased expected longevity, lower expected returns, and reductions in and uncertainty about pensions and social security. The financial independence calculation requires a review and monitoring of key current and expected metrics: assets, additions to assets, longevity, retirement income, inflation, investment returns, tax rates, and spending goals.  Of course, all results must be stress tested and regularly monitored and revised as appropriate.

Meaning, Identity and Purpose in Remaining Years.  Planning for the “golden years” goes well beyond money.   Happiness, of course, is more than that.  We discussed it in our September 9th blog http://www.dwmgmt.com/how-would-you-rate-your-life/.  We ask our clients not only about their financial priorities, but also about their visions for their family, career, health, dreams, legacy, education and charity.

These days, more and more seniors are taking inventory on who they are, their accumulated skills and experience and want to stay engaged in the broader society and economy, continuing to be useful, active and “keep going”.  Here are some recent inspiring examples in the news:

  • Gerry Marzorati, former editor of the New York Times and author of the new book “Late to the Ball” has immersed himself in tennis since taking it up in his mid-50s. Mr. Marzorati recognizes that “Sixty is not the new 40. Fifty isn’t either.  Your lung capacity in late middle-age is in steady decline as are your fast-twitch muscle fibers that provide power and speed. Your sight, senses and balances are getting worse.”  Yet, undaunted, Mr. Marzorati concluded that for him, his “golden years” would be spent on “finding something new, something difficult- to immerse yourself in and improve at.”  He threw himself into his new passion, hiring a coach, practicing for hours and hours and even entering competitions in his new love.  No trophies yet, but fulfillment.
  • Alan Page, the leader of Vikings’ Purple People Eaters, is about to start his third career at age 70.  After his Hall of Fame NFL career, Mr. Page finished law school and became a Justice in the Minnesota State Supreme Court for 24 years until recent mandatory retirement.  Now he and his wife will commit their full-time efforts to their Page Foundation, focused on educating young children, through money and mentoring.
  • At 100, Ida Keeling is still running for her life. She has the fastest time for American women aged 95-99 in the 60-meter “dash” at 29.86 seconds.  She is 4’6” and weighs 83 pounds.  She said she was fast as a girl, though back then there were few opportunities for girls.  What makes her faster now is that “everyone has slowed down.”  She became a single parent of four when her husband died at age 42.  Ms. Keeling’s daughter, Shelley, herself a track coach, got Ida back into running when Mom was 67.  Her one hour of daily running gives Ms. Keeling a sense of serenity: “Time marches on, but I keep going.”

Go ahead.  Take the test!  See how long you will be at life’s party.   Then, by yourself, or with help from a wealth manager like DWM, develop, monitor and maintain a financial, personal and family plan for the future that meets your priorities and visions. The future depends on what you do today.  Go for it!


brexitJune 23rd is a big day.  Brits, including all members of the Commonwealth, will be voting on leaving or remaining in the European Union (“EU”).  It’s a big deal.  And, it’s only the tip of the iceberg regarding the future of the UK and Europe.  At this point, the expected result of the possible British exit from the EU (called Brexit) is too close to call.  Here are some of the key points:

The Ayes.  Those who favor leaving argue that the EU has changed substantially since the UK joined it in 1973 with regard to size, reach of bureaucracy, diminishing influence and sovereignty.  They also point to the failure of the euro as a common currency and recent migration debacle across Europe.   Vocal supporters of the Brexit movement are the U.K. Independence Party, half the Conservative members of Parliament, Boris Johnson, former mayor of London, a group of “Economists for Brexit” and even Marine Le Pen, president of France’s National Front party.

The Nays.  Those who favor staying believe there would be huge economic losses, particularly in London’s financial sector, as well as the need to be part of larger block of like-minded companies to have real influence and security in the world.  British Prime Minister David Cameron leads the “remain” camp; his Labour Party, the Liberal Democrats and the Scottish National Party are all on board.  President Obama, Angela Merkel and President Xi Jinping of China also want Britain to stay in.

History.  In 1957, the Treaty of Rome created the European Economic Community or Common Market.  Britain tried to join in the 60s, but its applications were vetoed by Charles De Gaulle.  De Gaulle died in 1970 and Britain finally joined in 1973.

The debate is more than Brexit.  It really is a question of more European unity or less.  While some see “more Europe” as the solution to all of Europe’s problems, others see “less Europe” as the answer. Back in 1992, Margaret Thatcher proposed an “a la carte” system which would allow governments to be able to select the quality and degree of their participation in the EU as the best strategy for the future. Many EU member countries support that view today.

The EU institutions have failed in a number of key areas. First, the euro, established without a solid program of discipline or transfer payments, has led to stagnation, high unemployment and political instability in much of Europe. Second, migrants surged across Europe last year because the EU had abolished internal borders before strengthening external ones.  Creditor nations like Germany want “more Europe” and more discipline.  Mediterrean Europe would like “Europe lite” with more help on bailouts, sharing of debt, etc.

Potential Economic Impact of Brexit.  Two weeks ago, “Economists for Brexit” published a report that Brexit would be good for Britain– estimating in 10 to 15 years that its economy would be 4% larger than if it had remained. This group of academics likened the EU to a “walled garden” that imposes punitive tariffs and regulatory barriers on goods and services produced outside its 28 member state and that leaving the EU would enable the UK to unilaterally lower trade barriers.

On the other hand, last week the Bank of England warned that a vote for Brexit would be likely to cost jobs, raise prices and see the pound sterling plummet. The financial services industry centered in London could be one of the biggest losers.   On April 30th, the Economist opined that the EU would suffer from Brexit and therefore would not be kind to Britain afterwards during the ensuing two-year period of “divorce” negotiations.

Conclusion.  There’s a lot at stake in the June 23rd referendum for both Britain and Europe.  And, for many, it’s not just economics. It’s a part of a broader movement we’re seeing across the world- the election to president last week of a brash non-establishment politician in the Philippines, the huge popularity of “Hamilton” based on the centuries old, but still omnipresent, conflict of federalism vs. states’ rights, and, certainly, the presidential primaries here in America.  Angry voters across the world are not happy with the status quo and want a change to bring their country back to the “good old days.”  Anti-Europe parties across the continent are supporting and campaigning for Brexit.  Three days after the Brexit vote, Spain will be holding its general election.  In 2017, France and Germany and likely Italy will hold national elections. No wonder this referendum is too close to call and a potential harbinger of things to come in Europe and, perhaps, the world.

Don’t Be Like Prince!

FILE - In this Feb. 4, 2007 file photo, Prince performs during the halftime show at the Super Bowl XLI football game at Dolphin Stadium in Miami. Prince, widely acclaimed as one of the most inventive and influential musicians of his era with hits including "Little Red Corvette," ''Let's Go Crazy" and "When Doves Cry," was found dead at his home on Thursday, April 21, 2016, in suburban Minneapolis, according to his publicist. He was 57. (AP Photo/Chris O'Meara, File)

Just a short three weeks ago, the world unexpectedly lost one of its greatest musicians and most unique entertainers in Prince. Whether you follow music closely or not, most everyone has a favorite Prince song. Prince grew up in a musically talented family. His parents were John Nelson, a musician with the stage name Prince Rogers, and Mattie Shaw, a jazz singer. Prince began teaching himself how to play the guitar, drums and piano at age 7. Needless to say, Prince was naturally gifted. Every instrument he touched, he mastered. In Prince’s first album, “For You”, which was released in 1978, he played 27 different instruments. From there, he never slowed down. Throughout his life, Prince produced 39 studio albums, 4 in his last 19 months alone. Prince was so consumed with music that he would spend days in his studio without sleeping. While Prince hardly failed in life, he did fail to plan for his unexpected passing.

We can all agree that planning for life after death is very uncomfortable. We all hope to live forever but, in reality, we never know when our clock will stop. Prince’s family has yet to find a will, or any other estate documents, to outline his end of life wishes. Currently, 51% of Americans age 55 to 64 are following down the same path as Prince. Don’t be like Prince!

If you die without a will, there’s no guarantee who will inherit your assets. Generally, if you are married with kids, your surviving spouse and children will inherit your assets, but why take the chance? If you have a minor child and no surviving spouse, the court would choose their guardians. As a parent, wouldn’t you feel more comfortable appointing your children’s guardian beforehand? In addition, without proper planning, your estate will go into probate court which is costly (as much as 5% or more of the estate value) and time consuming for all parties. Mourning the passing of a loved one is hard enough. Your family shouldn’t have to experience the probate court process as well.

Establishing an estate plan with the proper documents is extremely important. Essentially, your estate plan is an instruction manual on how to handle your assets and end-of-life needs. A minimum estate plan should have at least four documents, which should be prepared by an estate attorney:

  1. Last Will & Testament – This document addresses how your assets will be distributed upon your passing. This document will allow you to assign a guardian for your minor children.
  2. Health Care Power of Attorney – This document allows you to appoint an agent to make medical care decisions should you become incapacitated.
  3. Living Will – This document directs your physician to either continue life or discontinue life-sustaining procedures if terminally ill or permanently unconscious.
  4. Durable Power of Attorney for Property – This document allows you to appoint an agent to manage your assets should you become incapacitated.

For many people, a living trust may be more appropriate than just having a will. A living trust helps administer your estate and can also help you avoid probate. A living trust also allows you and your family to remain in control of your assets while living, even if you become incapacitated. If you become incapacitated with only a will, the court may easily take control of your assets before you die. This a big concern for many families. Executing the appropriate documents is only half the process. You will also need to make sure all assets are titled properly and beneficiary designations, both primary and contingent, are what you want!

A common misconception that many people have is that their estate isn’t large enough to trigger an estate plan. Whether your estate is worth $300 million, like Prince, or a couple hundred thousand, estate planning is essential for everyone. The absence of estate planning can set the stage for conflict among heirs.  Other famous people who left without a will in place include: Jimi Hendrix, Bob Marley, Sonny Bono and Abraham Lincoln.

Here at DWM, we are not legal experts, but we do get involved with our clients’ estate planning and collaborate with their estate attorneys in this very important matter. The information we provide is based on our experience and knowledge in these areas. As part of adding value to our clients, we prepare an estate flow analysis to help clients understand the course of their estate and to make sure the titling and beneficiary designations of each asset are updated to match the clients’ wishes and avoid or minimize probate. If you are looking to begin the estate planning process or review and update your current situation, give us a call, we’ll be happy to help.

MGP 4 – The Next Generation of Financial Planning

MGP logo onlyThe financial industry is seeing some interesting changes spurred by the recently-enacted DOL fiduciary rule (see our recent blog at http://www.dwmgmt.com/fiduciary-standard-closing-in-on-reps-and-brokers/ ). At DWM, we welcome these changes as it now requires financial advisors to adhere to a rule that we have been following from the beginning…which is to make investment and planning recommendations with the client’s best interests in mind.  We always put the client first and always remain committed to this philosophy.


Last week, MoneyGuidePro, our chosen software provider, came out with a new version of their financial planning tool called MGP 4.  It is the next generation of financial planning software and the updates are specifically intended to help the financial advisor stay in line with the new rules.  The changes have made the software more “conversational” so advisor and client can spend more time discussing goals and retirement requirements, something we have always focused on.  We have spent some time reviewing the new features and there is a small learning curve with it.  We do think in the long run, it’s a nice update.  If you have recently logged on and were surprised or frustrated with it, you are not alone.  We want to describe some of the basics to you and, of course, we are always available for questions.


The biggest change is in the presentation and some of the familiar indexes are set up in new locations.  The updated format takes you to a My Plans landing page where you will have access to your financial plan.  Once the plan is selected, you will be on the page with personal information, similar to the previous version.  If you look at the top of this page, there is a progression line with three circles on it. The circle on the left is marked “About You” and is green at this stage. Once you click on the circle, the dropdown has all the items from the previous version grouped in four categories- Personal, Goals, Money and Risk and Allocation.  Click on each of these for details. ‘Personal’ shows personal information and has a new area for expectations and concerns.  ‘Goals’ has a retirement schedule and a place to include your goals, including one for health care, a newly-established feature to help us understand and track the costs that health care may have on your financial plan.  When you click on ‘Money’, you will see the familiar drop-down categories from the old version – including investments, retirement income and net worth.  Finally the ‘Risk and Allocation’ section will help us evaluate your risk tolerance and allocation strategy so we can see if they are in line with your goals.  You can always skip a category by returning to the “progression line” at the top and selecting your choice.   Everything is here, it just may take an extra step to get there.


*Tech Tip:  If you want to have an abbreviated look at your plan, you can select the ‘My Snapshot’ tab on the first page to have quick access to some of the most popular features like net worth, goals and results.


Once you finish ‘Risk & Allocation’, you are ready to move to the ‘Results’ circle.  You’ve seen these headings before. We suggest you click on ‘recommended scenario’.  Once on that page, look at the left side and you’ll see blue rectangles with personalized strategy tabs based on your goals.  One new, exciting feature is the Social Security tab which allows you to calculate your best strategy drawing benefits, if you haven’t already begun.  You can also choose the “What if Worksheet”. Here is where we modify certain predictors for the future like rates of return, inflation or living longer.  You can look under the recommended scenario or under the ‘What if worksheet’ Monte Carlo simulation graphs and you will see the blue rectangle “explore”.  Click on explore and then scroll down to “combined details.”    You’re now into the results page and graph, which all of our clients have seen before and shows the annual and linear progression of the value of your future portfolio.  This chart starts with the current value of your investment portfolio and shows how the additions, earnings, taxes and spending or goals might impact it going forward.  You can follow it to the wonderfully euphemized “end of your plan”!  We always find that amusing…


There are many other features hidden in this financial planning software and we invite you to “play” with this program any time. There is something for everyone in here.  In the play zone, you can add any number of crazy or exciting goals to see if you can make them come true.  Or if you want to prepare for the worst, you can stress test for challenges in the “what are you afraid of” feature. There are strategy tools, a budget feature and you can print your net worth report anytime. The ‘Finish’ tab includes the reports area which is not as intuitive as before, so if you have questions, please call us.  We are always glad to help…or run them for you!  And don’t worry, when you are finished playing with your plan, we always keep the original copy that is our constant.  DWM wants you to understand and participate in your financial planning and be as educated and knowledgeable as possible.  After all, that is our fiduciary responsibility and we always put our clients first!