Can Money Buy You Happiness?



Happy New Year!! We hope you had a fantastic holiday season. Now, it’s on to 2019 with planning and resolutions for the New Year. What are your goals? More money? More Happiness? More Joy? As you tackle these huge questions of money and meaning, we’d like to offer you some ideas.

Does money buy happiness? King Midas was rich, but his gold didn’t bring him happiness.   That’s because there’s a difference between being rich and being wealthy. Brian Portnoy, in his book, “The Geometry of Wealth,” articulates this well: “Being rich is having ‘more.’ The push for more is a treadmill of which satisfaction is typically fleeting. Wealth, by contrast, is funded contentment. It is the ability to underwrite a meaningful life- however one chooses to define that.”

Money, of course, is a huge part of our daily lives. Our life cycle with money includes earning, spending, saving and investing. Our first paycheck shows us our ability to earn and sustain ourselves. Next, where do we spend the money and how much do we save? Lastly, as we accumulate money, we choose to put our financial capital at risk to grow at a higher rate of return than cash. Money is like the oil in your car; without it, the car grinds to a halt, but with it, YOU still have to steer the car in the right direction.

Sonja Lyubomirsky in “Pursuing Happiness,” identifies three factors which determine happiness/human fulfillment. These are disposition (who you are), circumstances (what you face) and intentions (what you do). Her research shows that outcomes are impacted as follows: 50% comes from disposition, 40% from intentions and 10% from circumstances. The good news is that we can control our intentions; which, of course, is our review, planning, implementation and monitoring of our life planning.

As Daniel Kahneman (featured in earlier DWM blogs) has proven, how well we handle our intentions and planning has a lot to do with “Thinking Fast and Slow.” The fast brain is the home of impressions, impulse, and feelings. The slow brain is engaged when we are deliberately thinking and making informed choices. The two systems work together; the key is using our slow brain as we shape a life of money and meaning. The process of building and executing a plan can be, in itself, a source of happiness.

In 2015, the Dalai Lama and Archbishop Desmond Tutu met and discussed life; recapped in “The Book of Joy.” They separated happiness into two categories; one, experienced happiness, which comes and goes with daily pleasures, and, two, reflective happiness, the achievement of joy, which takes work. Dr. Portnoy identifies the four pillars of joy:

  • Connection-the need to belong
  • Control-the need to direct one’s own destiny
  • Competence-the need to be good at something worthwhile
  • Context-need for a purpose outside of one’s self

These “Four C’s” are at the heart of funded contentment. And while contentment can be achieved by all, including those in lower levels of income, money helps.

Dr. Kahneman found in his research that happiness directly increases as income increases. However, after about $75,000 of annual income (per person), experienced happiness levels out. The concept is that good and bad moods come and go at the same pace for someone making $100,000 per year as compared to someone making $1 million per year. However, reflective happiness, or funded contentment, does increase with higher incomes for many people. This is because at higher levels of income, money, allocated wisely, can underwrite the Four C’s, which constitute reflective happiness. Money can be used for both experienced and reflective happiness and, by using both our fast brain and our slow brain, we can achieve both.

In our crazy, chaotic world, it’s important not to let our fast brain guide all of our intentions. We need to have a plan and a process and be ready to adapt it as the world changes. True happiness takes work. Our goal, as wealth managers, is to assist you with a process not only to protect and grow your money, but also to help you achieve “funded contentment”- the ability to underwrite a meaningful life- however you choose to define that.

Good luck on your planning for 2019. Please let us know if you would like us to help.

Roth IRAs: Maybe Time for a Fresh Look

rothWith the 2013 income tax rates now settled, it’s a good time to review the advisability of Roth vs. traditional IRAs. As you know, Uncle Sam gets his tax money either way. You pay a smaller amount earlier with Roth accounts or a larger amount later with traditional IRAs. 

Your expected rate of income tax in retirement is key. If you think you’ll be in a lower tax bracket when you retire, then a traditional IRA might be best. With a traditional IRA, you get the upfront deduction at current tax rates and pay tax on the IRA at lower rates as you withdraw the money. If, on the other hand, it is likely that your tax rate at retirement would be equal to or more than your current income tax rates, then Roths should be considered. With a Roth, withdrawals in retirement are generally tax-free and there is no required minimum distribution for you or your spouse at age 70 ½. Furthermore, by paying the tax now, you have locked in the tax rate on the IRA, regardless of future tax rate changes by Congress.

Generally, you can establish Roths three ways: 1) Roth IRA contributions, 2) on-going Roth contributions to a 401(k) or Roth 403(b) at work, or 3) a Roth conversion. Here are some specific situations where use of a Roth may be advisable.

  1. Young workers who are starting their career and have current low income tax rates. If you have sufficient earned income, you can still invest $5,000 for 2012 and $5,500 for 2013 into a Roth or a traditional IRA. As an example, if a young person invested $5,500 in a Roth for 10 years and it grew for 30 years thereafter all at a 5% return, the Roth account 40 years from now would be $300,000, all tax-free. 
  2. Taxpayers who experience a low year in taxable income (for example, they might be between jobs), might consider a Roth conversion for a portion of their traditional IRAs. 
  3. Taxpayers, who expect that they will not need their IRA and 401k funds during their retirement and that their retirement income tax rates will be similar to their current rates, should consider a Roth conversion. By converting to Roth and paying the tax now, you are not forced to take withdrawals. Furthermore, when you and your spouse are gone, your children (and grandchildren) can continue to get the benefits of tax-free earnings, since they are only required to take distributions based on their life expectancies and can stretch the Roth for decades.
  4. Taxpayers who want to convert may consider doing an installment program. You would convert an appropriate amount each year, making sure that you don’t change your current income tax bracket. For example, for 2013, the 25% marginal income tax bracket for married couples applies to taxable incomes from $72,500 to $146,400. 

Most of you will be meeting with your CPAs in the next 6-7 weeks. It’s probably a good time to also get their input on Roths for you. Tell them that DWM, your proactive, fee-only financial planner, encouraged you to ask.

Does Your Family Operate Like a Business?

fee-only financial planners, stress-free financial planningA recent Wall Street Journal article, “Family Inc.,” highlighted how many families are coping with a potentially stressful and chaotic American family life. Many have adopted techniques developed by corporations designed to deal with group dynamics.

One technique known as agile development, started with Japanese manufacturers and was adopted by Silicon Valley startups. Workers are grouped into small teams with daily progress sessions and weekly reviews. Families apply these concepts by having family meetings, which “increase communication, improve productivity, lower stress and make everyone happier to be part of the family.” Some families answer three questions each week reviewing 1) what went right this week, 2) what went wrong this week, and 3) what will we work on next week.

Accountability is a huge component. Many families use a large board to monitor progress, with all family members making tick marks as chores and objectives are completed. The kids typically are empowered to determine their own rewards and punishments. It has been shown that children who set their own goals and evaluate them regularly become more internally driven and have more self-control.

Parents aren’t invincible nor are they immune from accountability. Effective business teams have all members contributing. Family teams need the same dynamic. Also, flexibility must be built in. The agile family philosophy recognizes that change is ever-present and builds in a system that is adaptable.

All families have some conflict. Some are now using problem resolution techniques found in businesses. More or all of the family members need to be part of the decision-making process. Use of the system of “vote first, talk later” is often used. Otherwise, those who talk first may have too much influence. 

These new group dynamic techniques may be even more important for families than companies. In a workplace, sometimes conflicts can be deferred or ignored. But, in families, extended conflicts can lead to divorce and estrangements.

Many successful families also work on financial literacy. They talk openly about money with their children. Some parents don’t want to burden their children with the truth, yet they may be giving them a bigger burden by not telling them. Allow the children to make their own mistakes with small amounts of money, like their $5 allowance. And, put them to work. Have them cut grass or have a lemonade stand. Many successful adults were involved in business as children.

Families are very important to us at DWM. As our clients know, we are pleased to meet with and help family members of clients, generally without charge. We have organized and facilitated successful family meetings. We have assisted younger family members in improving their financial literacy. We’re happy to help. Give us a call.

WSJ (2/15/13): “Beware the Great Rotation”

fee-only financial planners, stress-free financial planningStocks have continued upward (6-7%) in 2013 while bond performance has been flat or slightly negative since January 1st. Not surprisingly, many feel a “great rotation” has started and the stock market will “melt up” as investors sour on bonds and move from fixed investments to equities. Not so fast.

Since 1970, according to the Investment Company Institute, approximately 71% of all mutual funds were invested in stocks. At the end of 2012, that percentage was 65.7%. Hence, the current allocations to stock mutual funds are not abnormally low. Furthermore, in a study published last May in the Journal of Financial Economics, it was determined that even though the stock market often rises when investors move from fixed to equities, almost all of that increase is reversed in four months time.

Michael Kahn in the Barron’s issue Saturday cautioned that technical analysis would show that the stock market may be near a top.  Volume has been shrinking and many pundits are calling for a needed “correction.” Furthermore, the market has gone 15 months without a 10% correction and three months since a 5% correction. According to Mr. Kahn, a correction may be near.

Most importantly, we’re all waiting for Washington to govern. Certainly part of our current sluggish growth is the result of the financial crisis of 2008 and deleveraging. But an equally important factor is the uncertain economic and tax environment in our country. On Friday, Fed Chairman Ben Bernanke said that the U.S. economy is “far from operating at full strength.”  And now retailers are feeling the impact of increased payroll taxes as of 1/1/13.  January and early February sales were not good for Wal-Mart and others.

And, on March 1st, unless Washington acts, the sequester cuts will occur. This will cut $85 billion from discretionary spending; reducing defense programs by 8% and domestic programs by 5%. It is estimated these cuts will cost the economy more than one million jobs over the next two years. Certainly, we need to reduce the deficit and, at the same time, look at a potential Grand Bargain to deal with spending, investment and tax reform. We need a long-term fiscal restructuring for social security and Medicare.

Unfortunately, Washington is deeply divided. Thomas Friedman on Sunday put it this way:  “You can feel the economy wants to launch, but Washington is sitting on the national mood button. We the people still feel like children of permanently divorcing parents.”

There are lots of good signs out there. The American economy is recovering. Housing is coming back. The energy revolution is reducing costs. Financial sector and household balance sheets are looking better. What we need now is to break the deadlock in Washington. When that happens, our economy can start moving toward full strength. Only then, are we likely to see the real great rotation take place.

NYTimes (1/25/13): “Americans seem to be falling in love with stocks again.”

fee-only financial planning2012 was a great year for stocks. Already, in 2013, the main indices are up 5%. Investors are piling into equities, apparently afraid of missing out. Have we reached the “tipping point”, when allocations to bonds should be reduced and equity allocations increased?




Certainly, there has been some very good news recently:

  •  Washington avoided the “fiscal cliff”
  •  European leaders seemed intent on saving the euro
  •  The U.S. debt ceiling has been raised for three more months
  •  The Fed and other central banks have pledged to continue monetary easing
  • China’s GDP growth is up in the fourth quarter to a 7.9% rate from 7.4%
  • The housing market recovery seems to be continuing
  • New claims for unemployment benefits fell to the lowest level in five years.

All good news. But, let’s put it in perspective. Yes, the current financial crises seem to be under control. Yet, the global economy is not back on track yet. Ken Rogoff, Harvard economics professor, put it this way at World Economic Forum in Davos, Switzerland last week:  “It is a little bit calmer, but it is not very pleasant.”

Here in the U.S., our economy is healing, but slowly. The initial forecasts for 2013 were 2% growth in GDP. Now, with the rise of payroll taxes on employees, the new forecasts are for 1% growth. At the same time, the IMF expects the euro-zone economy to shrink by .2% this year. Unemployment in Europe is 12%. With continued austerity programs and tight credit, Europe may not return to growth for some time.

At Davos, a key buzz word was “structural reform.” Europe still is plagued by its lack of competitiveness. And, here in the U.S., the fiscal cliff was avoided by basically “kicking the can down the road.” We have simply averted major crises. The major problems in developed countries hindering global long-term economic growth haven’t been solved and haven’t gone away.

Yes, there are more positive signs today than 18 months ago, including the level of the major stock indices. However, as Brett pointed out in his last market commentary, stock market returns are not directly correlated with the global economy. The S&P 500 index may show good returns in shaky or even slow times. With the unsolved global economy headwinds, we are cautiously optimistic.

Hence, it’s a great time to review your asset allocation. An excellent time to review your risk tolerance, risk capacity and risk perception. And a perfect time to meet again with you DWM financial advisor.

“Saving on Lattes Will Not Make You Rich”

pound_foolish_bmpSo says Helaine Olen, a freelance journalist and author of “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.”  Ms. Olen takes direct aim at investors and advisers alike in her recently published book. She makes some very good points.

Saving $3 a day on lattes, or $1,100 a year and investing it can help a plan, but it won’t build a fortune. Ms. Olen terms such faddish advice as the financial equivalent of miracle diets. Most people are looking for a quick fix or the next “home run.” A belief in instant riches lured millions into buying internet stocks in the late 1990s and overpriced houses in the mid 2000s. Millions watch Jim Cramer on TV looking for the latest tip when, in fact, Cramer’s picks have not done well. And, over 75% continue to invest in actively managed stock and bond funds when these funds annually underperform passive, low-cost funds.The fact is that there is no single financial elixir or silver bullet that can guarantee personal financial success.

Yet, lots of investors are still looking for that free lunch and promises of double digit returns. According to AARP, over 6 million people attended a free seminar in the last three years. Many elderly are terrified of outliving their savings. Desperation, fear and insecurity become the salesperson’s best friend. At the World MoneyShow, an annual event in Orlando, 80% of the attendees were over 55. As Ms. Olen, puts it, “a panicked baby boomer is their best customer.”

Ms. Olen includes many leading financial women in her book, including Jane Bryant Quinn and Elizabeth Warren. She doesn’t like Suze Orman, whom she criticizes for making huge amounts of money by telling others to be frugal. Further, Orman’s “affiliations with companies like FICO and Lending Tree raise questions about the impartiality of her advice.”

Furthermore, Ms. Olen points out that many financial plans fail because the investor and their advisor forget to stress test the financial and investment planning. Risk management analysis is often completely ignored. A plan with reasonable investment returns may be destroyed by death, disability, long-term care issues, a job loss, or high-interest debt. 

We agree with Ms. Olen. Some investors and advisers should be taken to the woodshed. There are no quick fixes and no one-size fits all solutions. Successful wealth management is a process, not a product.

It starts with investors working with advisers who don’t have conflicts of interests but rather are fiduciaries; putting the client’s interests first. Next, it requires experienced and trusted advisers to understand the client’s goals, resources, risk assessments and constraints to realistically and objectively prepare an initial financial plan. Then, that plan needs to be stress tested from risk management, estate planning, income tax and investment perspectives. Only at that point can an appropriate asset allocation be determined and implemented for the client. Going forward, the entire plan and investment portfolio need regular monitoring, rebalancing and stress testing. To be successful (aka not running out of money), it needs continual on-going professional review.

With the right help, you might be able to have it all: a successful financial plan and all the lattes you want.

DWM 4Q12 Market Commentary


Happy New Year! After a relatively strong first three quarters for both the equity and fixed income markets, fourth quarter readings were pretty muted. Frankly, that’s pretty good considering all of the headwinds we faced going into this last quarter of 2012. Probably the biggest story of all was the so-called “fiscal cliff”. It reminded us of all of the Y2K scares of a decade or so ago. Legislation to forestall this “cliff” passed before trading could start in the new year, and the market reacted by sending up stocks nicely. Ironically, this cliff agreement offered little to address our significant long-term debt issues. The proverbial “can” in WashingtonD.C. was indeed kicked down the road again. 

 Let’s celebrate the honorable return achievements of 2012 before looking ahead to 2013. 

Stocks finished the year up about 16% in most areas (S&P500: 16.0%, S&P600 Small Cap: up 16.3%, S&P400 Mid Cap up 17.8%, and MSCI World Index (ex-US) up 16.4%), reflecting a nice, unusual level rise across almost all equity investment styles.

Bonds showed some fair returns for calendar year 2012: Long-term Treasuries up about 3.5%, the US Aggregate Bond Index up 4.2%, and Munis up a solid 6.8%.

Commodities (which DWM classifies as alternatives) did not produce much evidenced by the Dow Jones-UBS Commodities Index falling 1.1% on the year. Also in the alternative area, some illiquid investments like equipment leasing and private timberland REITs did not provide as much bang for the buck this year. DWM expects these investments to recover as the global economic recovery continues. On the other hand, there were niches in the alternative landscape that fared quite well like public REITs and some absolute return strategies. A few noteworthy liquid alternative funds to mention are Marketfield Long/Short (up 13%+), RiverNorth/Doubleline Strategic Income (up 12%+) and Pimco All-Authority (up 17%+). A portfolio of liquid alternative funds continued in 2012 to help investors’ overall portfolios with solid results and non-correlation benefits in respect to the rest of the portfolio holdings.

All in all, 2012 was a rewarding year for most investors that weren’t sitting in cash. 

Looking forward to 2013, headwinds include lack of household income growth, lackluster consumer confidence, and further Washington political theater.In fact, the latter is a major problem as Congress continues to kick the can down the road. The cliff agreement was no “grand bargain” or a deal looking at both tax revenue and spending cuts in a way that can get our Federal deficit under control any time remotely soon. Certainly, Moody’s didn’t like it, basically putting the US on notice that it will most likely cut its AAA rating if it can’t make something happen soon. And something will need to happen quickly as the federal borrowing limit (aka “debt ceiling”) will be reached around the end of February. Remember the ludicrousness that played out in 2011 the last time we came close to hitting the ceiling?!? Expect more of the same. Long story short, Washington policy stalemate will continue to be a major story.

There are some real positives domestically like the recovering housing market, expanding manufacturing activity, and improving trade balance. But things aren’t so rosy overseas where the Eurozone is still in recession and China’s financial sector looks dicey. For a world where we are becoming more and more connected, we should all hope for a successful global economy. 

In conclusion, 2012 results show that positive results can occur in what may seem like shaky times. DWM cherishes the opportunity of providing its clients with solid investment results and sound financial planning that can help people achieve their long-term goals. DWM wishes a prosperous and healthy 2013 for you and your family.    

Brett M. Detterbeck, CFA, CFP®



How To Fulfill Your 2013 Resolutions


From the Charleston Mercury, January 10, 2013

Happy New Year, readers! I hope you had a great Holiday. How are you doing with your New Year’s resolutions?

Historically, getting physically fit is at the top of most lists. Exercising and eating right keeps you healthy and makes you look and feel better.

It’s no surprise that health clubs are packed in January and early February. By Valentine’s Day, it’s typically back to normal. Many people hate exercising and need outside help. Some hire a personal trainer, or coach, to provide services they can’t do or won’t do themselves. This helps them fulfill their resolution.

The coach, with expertise and commitment to your physical well-being, helps you:

  • Honestly and realistically assess your current condition
  • Identify attainable short and long-term goals
  • Establish a routine
  • Provide discipline, follow-up and encouragement through regular meetings
  • Monitor progress and modify the plan and the routine as conditions change.

Is it any wonder that people using coaches have a better success rate in fulfilling their resolution for improved physical well-being?

Another top New Year’s resolution is to get one’s financial future in order. However, most of these promises are never kept. Many people who can’t or won’t do it themselves are reluctant to use a financial coach, or financial planner. And, by Valentine’s Day or sooner, this resolution is broken as well.

Financial fitness is a lot more than simply investing your money. It’s a process. Good financial planners are like a good coach, helping you get your finances in order, in a holistic way. They will help you:

  • Realistically assess your assets and liabilities
  • Review your tax situation, retirement and college plans, estate planning and insurance needs
  • Put together a plan for the future 
  • Monitor progress, provide encouragement and follow-up through regular meetings
  •  And, as your situation and the world changes, help you modify your plan so that it continues to have a very good chance of success (aka not running out of money).

Financial planning can help eliminate fears and provide financial well-being and peace of mind. The world economy is still fragile. There are lots of uncertainties both home and abroad. A good financial coach can help you regularly assess your situation and let you know, using their expertise, that you are on the right track, and if not, how to get there. Your financial coach may even reduce some guilt by “giving you permission” to spend some more, if everything else in your plan is in order.

 If you’re serious about keeping that New Year’s resolution to get your financial future in order in 2013, consider hiring a financial coach.

Les Detterbeck is one of a small number of investment professionals in the country who has attained CPA, CFP®, and CFA designations. His firm, DWM Financial Group, Inc., a fee-only Registered Investment Adviser, has offices in Charleston/Mt.Pleasant and Chicago. Les may be contacted at (843)-577-2463 or

Popular Mechanics: 110 Predictions for the Future


Happy New Year! We hope everyone had a great holiday. With a new year, come predictions of the future. Popular Mechanics (“PM”) weighed in with its 110 predictions for the next 110 years.

For example, in the next decade, PM predicts passwords will be obsolete (replaced by face-recognition software). By that time, vaccines will wipe out drug addiction (creating specific antibodies now working with mice).

Honestly, I didn’t know PM was still in business. Sure, I remember them in the 50s and 60s. We kids read the magazine cover to cover. Apparently, readers, young and old, have now been doing that for 110 years. Fittingly, to celebrate, PM has produced a list of 110 predictions for the next 110 years. Here are some other interesting ones:


  • People will be fluent in every language (DARPA and Google are perfecting that now)
  • Bridges will be repairing themselves (calcium ions react with rainwater and carbon dioxide to create a patch)
  • We’ll be eating synthetic meats (not tofu-rather plant-based, nutritious, low-cost substitutes that look and “taste” like the real thing)


  • Contact lenses will grant us Terminator vision (just place a soft lens on your eye)
  • All 130 million books on the planet will be digitized
  • All purpose robots will help us with household chores
  • Supersonic jets will return (new more efficient engines, using a fuel-air mixture will be used)
  • Navy SEALs will be able to hold their breath for four hours (robotic red blood cells could each hold 200 times the oxygen of a normal blood cell)


  • The Pentagon will stop using submarines (replacing them with underwater robots with laser radar)
  • The last gasoline-powered car will come off the assembly line
  • One of us will celebrate our 150th birthday (there are 300,000 centenarians in the world already)

I can’t wait to see how many of these predictions come true. Cheers!

If you want to read more, here’s the link to the article:

Seeing a Future with Optimism

xprizeFrom The Charleston Mercury, December 13, 2012

It’s easy to get caught up in pessimism. It’s in the media everyday: slowing economic growth worldwide, high unemployment here and abroad, Eurozone problems, and terrorist attacks. And, then, what about world issues such as feeding the hungry, providing clean water and wiping out malaria? Can our planet support everyone?

Peter Diamandis thinks so and also that it can provide everyone a life of opportunity. In fact, in his bestseller, Abundance: the Future is Better than You Think, co-written with Steven Kotler, Mr. Diamandis provides great analysis, solutions and hope for the future. His work is based on the confluence of four major trends: exponential technology advances, do-it-yourself (DIY) innovators, techno-philanthropy, and the needs of the poorest billion of our planet.

Technology is changing exponentially. A Maasai tribesman in Africa equipped with a cellphone has better communication than President Reagan did 25 years ago. With an internet-connected smartphone, he has access to more public information than President Clinton did 15 years ago. 

DIY innovators are everywhere. We see all the apps for cellphones. DIY biologists are now beginning to solve world problems. The winner of the 2008 IGEM competition built a vaccine against the virus that causes the most common forms of ulcers. Robots, like we saw in the movie “Robot and Frank”, may have a big impact on reducing the costs of elderly care.

Techno-philanthropy continues to grow. Bill Gates is crusading against malaria. Mark Zuckerberg is working to reinvent education. The founders of eBay are focused on bringing electricity to the developing world. And there are lots of others. 

There are 7 billion people in the world today. One billion currently lack access to safe drinking water and 2.6 billion lack access to proper sanitation. Diamandis contends that a world in which everyone is provided a life of opportunity can lead to increased GDP, standards of living and happiness worldwide.  Solving universal problems helps everyone.

Don’t expect governments to provide solutions. The private sector will do most of the heavy lifting. Mr. Diamandis believes a key is the X Prize competition which he created. Right now, Qualcomm has funded an X Prize of $10 million for the first team able to develop a “tricorder.” This would be a device straight out of Star Trek; a wireless device in the palm of your hand that monitors and diagnoses your health conditions. X Prize competitions will grow in the future. The concept is based upon four principles:  high visibility, breaking bottlenecks, wide range of competitors, varied approaches leading to new industries.

 Let’s put things in perspective. Our world has come a long way in the last few centuries: we’re living longer, wealthier, safer lives. And, the future is looking up.

Les Detterbeck is one of a small number of investment professionals in the country who has attained CPA, CFP®, and CFA designations. His firm, DWM Financial Group, Inc., a fee-only Registered Investment Adviser, has offices in Charleston/Mt.Pleasant and Chicago. Les may be contacted at (843)-577-2463 or