Our Blog

DWM is committed to learning for its team, clients and friends. In this changing world, it’s extremely important to stay current in all areas impacting your financial future.

We encourage all of team members to “drill down” on current topics important to you and contribute to our weekly blogs.  Questions from our clients and their families are often featured in our blogs.  

Financial literacy for clients and their families is very important to us.  We generally hold an annual wealth management seminar for all of our clients.  We encourage regular, at least semi-annual, meetings in person with our clients to review family updates, progress on financial goals, asset allocation and performance of investments.  We’re happy to assist younger members of the family as part of our total wealth management program.

Here’s our latest blog:



Teach Your Children Well

Written by Ginny Wilson.

spending priorities-150x150As parents, we want what is best for our kids and want to prepare them to be independent and successful adults.  Two of my three children are in college now and, from my experience both as a parent and working at DWM, I have learned there are some gaps in the financial education and understanding of money in our young people, including my kids.  Money isn’t everything and certainly should be kept in perspective related to other pursuits in life.  That would be my first tip for the young adults in my life.  However, money is a means to an end and it is important for them to understand their own unique balance sheet and learn strategies to successfully manage all the variables that will affect their financial future.


  1. 1. Protect and Grow your Most Valuable Asset – YOU!

One of the most important things for college-age or young working adults to realize is that by far their most valuable asset is themselves!  For a young adult, the ability to generate income for the next 40 or so years is their most phenomenal asset.  Understanding the value of this asset can encourage them to look for ways to magnify that potential earning power and minimize the risks to it. Will additional education improve that income potential?  It is also smart for young people to realize that the future is uncertain.   We need to teach them to prepare for any risks, like economic downturns, that may reduce asset growth or increase their liabilities.  This can help them recognize that using resources to maintain adequate disability or life insurance can be as important as insuring your car or home.  Creating good habits in saving, tax-planning and budgeting are important to protect against unanticipated variables.


  1. 2. Diversify your Assets

When evaluating net worth, most people tend to think of some of the obvious current assets that you might include – a house or a car, for example.  Looking more deeply, though, will show some differences in those assets.  This is another area where younger people may need some education.  A car’s value, for example, should be considered against the taxes, maintenance, gas and depreciation that essentially makes it worth much less over time.  Same with a boat.  Real estate is usually considered a good asset to offer diversification, if it is appreciating at or above inflation.   An interesting article from the Wall Street Journal notes that as wealth increases, the percentage of net worth represented by a principal residence declines.  Young adults should understand that diversification is an important strategy and having a good mix of assets will make you financially stronger, especially over the long-term.


  1. 3. Spend Wisely

In general, a personal balance sheet should include the value of everything you have and everything you owe, even if some of those are intangible.  When you put the potential value of a career’s worth of income in real dollars in one column against the future costs of loans or other debts, it makes the impact more visible.   This strategy can help spotlight the real costs for student loans, houses, cars, trips, credit cards or luxury purchases.  An Investment News article recently quoted a study that found more than half of college bound students had failed to estimate their student loan costs adequately and regretted the decision to take out those loans, once their repayment programs had begun.  Certainly, when evaluating the merits of an educational program or even a business investment, it would be smart to consider potential income benefits against the costs for that investment.  Weighing the purchase of a new flat screen TV or expensive pair of shoes against the value of income needed to finance that goal might make anyone think twice!


  1. 4. Save and Invest Early

Finally, it is significant for young people to know that they can really maximize the potential on their balance sheet by saving and investing as early and as fully as possible.  Learning the value of compounding in real terms can be a wonderful eye-opener and understanding the effect of inflation on a dollar over time can be equally enlightening.  Not all saving is created equal.  A penny saved is worth more than a penny earned, when you factor in taxes and compound interest!  It is important to maximize retirement investments and practice the “pay yourself first” philosophy of saving and investing to create a good financial plan.


Also, young workers should be encouraged to immediately sign up for employer retirement plans, like 401(k)’s, and to maximize their contributions to take advantage of any match programs offered by their employer.  If their job doesn’t offer one, opening an IRA or Roth IRA might be a good solution.  Starting a Roth at a young age allows the investor to take advantage of making after-tax contributions while in a lower tax bracket and creating an account that can grow and offer tax free funds for use later in life.  As an example, a 25 year old who makes the maximum allowable annual contribution of $5,500 annually to an investment vehicle that averages a 5% return could have around $700,000 by the time they are ready to retire.

The biggest lesson that our kids and other young adults should be taught is that the most important key for success in wealth management, as in most things, is discipline.  We love to educate our clients and their families.  Please let us know if we can help teach your kids good financial habits.


Don’t Forget Year-End Tax Planning

Written by Les Detterbeck.

tax-planning-150x150Holiday season is here.  Lots to do, including year-end tax planning.  Yes, you need to carve out some time to reduce your 2016 tax bill.  Planning this year could be extremely important.  A tax reform is likely in early 2017 that would reduce income tax rates, increase standard deductions and could reduce the impact of big tax deductions.  The basic strategy is to defer income and accelerate deductions.

Here are some key areas for you to review with your CPA:

Reduce income.  The standard advice of pushing as much income as possible into future years is all the more powerful if tax rates drop.  Small business owners might want to wait until the end of December to bill clients so that related payments are received in January.  They might also buy equipment and place it in service before December 31.  The Section 179 Deduction permits up to $500,000 of business equipment to be written off 100% in year of purchase. The closing of a sale of real estate might be put off until January 2, 2017.  If you are in retirement and living off IRAs, consider deferring taking any more distributions until early 2017.

Retirement Tax Breaks.  If you are contributing to a traditional 401(k) or other retirement plan, considering maximizing it ($18,000 for those under 50 and $24,000 for those 50 and over) with larger deductions on your December paychecks.  Consider maximizing IRAs ($5,500 and $6,500 respectively) even if your contributions are not deductible, as you may want to convert those to Roth IRAs in the future.

Capital Gains and Losses.  Capital gains taxes are likely to be less in future years for higher income American taxpayers under tax reform proposals.  The House GOP plan would revert to an older system that taxes a portion (50%) of investment income at regular rates and excludes the rest.  You and your financial advisor should review your portfolio for all realized and unrealized capital gains and harvest appropriate losses before year-end if you haven’t already done that.

Medical Expenses.   Taxpayers can deduct medical expenses if they amount to 10% of their income or 7.5% for taxpayers 65 and older.  If you’re scheduling an expensive procedure, you might want to get it done and paid in 2016.  Some tax reform proposals eliminate medical expense deductions.  And, even if medical expense deductions remain available, they may not be worth as much in tax savings if your income tax rate goes down.

State and local taxes.  This deduction may be coming to an end.  Already, four million Americans lose this deduction due to the Alternative Minimum Tax (“AMT”). Both the Trump Plan and the Ryan Plan intend to eliminate the AMT.  If so, this deduction could be wiped out.  Hence, if possible, consider paying your property taxes and/or state income taxes in 2016.

Mortgage Interest.  All tax reform proposals have continued to support a mortgage interest deduction.  However, it might make sense to make your January 2017 mortgage payment in December.  The standard deduction is expected to be doubled to $25,000 to $30,000.  If so, fewer taxpayers will itemize.

Charitable Contributions.   The raising of the standard deduction will likely mean fewer taxpayers will get a tax benefit from their charitable contributions.  And, even if they do itemize, their income tax bracket may be reduced going forward.   Therefore, consider contributing both your 2016 amounts and your 2017 charitable contributions by 12/31/16.  Here are three good ways to do this:

    • You can contribute to “Donor-advised” funds this year and get the deduction in 2016 and then make “grants” to charities with these funds as desired in the future.
    • You can contribute appreciated property such as stocks, mutual funds and exchange traded funds to a charity. The taxpayer doesn’t pay the capital gain on the appreciation and gets a full charitable contribution deduction.  And, yes, appreciated property can fund your donor-advised fund.
    • You can make a “Qualified Charitable Distribution” (“QCD”) from your IRA. A QCD allows an IRA owner who is at least age 70 ½ to contribute up to $100,000 to a charity without having to claim the distribution in taxable income.  This is particularly valuable to philanthropic taxpayers who can fulfill their Required Minimum Distributions (“RMDs”) by sending payments directly to the charities of their choice.

Our clients know that at DWM we recommend starting tax planning in April or May, following it up in the fall and finalizing it in December. We don’t prepare tax returns.  We do provide suggestions for reducing taxes.  Helping you minimize your tax bill is part of the value you get with DWM Total Wealth Management.  Please let us know if you have any questions.  Don’t delay!


President for All Americans

Written by Les Detterbeck.

0209-Tiled-Flag-of-American-diversity 1On the morning after the election, Donald Trump pledged that he “will be President for all Americans.”  That was a great start.  President-elect Trump has now assembled his transition team.  We’re starting to see that some of the campaign rhetoric and issues espoused by candidate Trump were not to be taken literally.  Further, with our government’s checks and balances, there is only so much one man can do by himself.  Being President of the U.S. will be much different than being Chairman and President of the Trump Organization.

First, let’s focus on four key economic initiatives we expect under President Trump: tax reform, infrastructure, trade protectionism and fiscal stimulus.

Tax Reform. House Speaker Ryan and President-elect Trump are not that far apart on tax reform.  The corporate tax (currently 35%) could end up at 20% (Ryan) or 15% (Trump).  The logic here is that lower rates would provide an incentive for American companies to repatriate profits held overseas. And, with that ready cash, they would be in a position to increase capital spending in the U.S.

On the personal side, we’d all get a tax cut.  The current seven tax brackets would be cut to three brackets. The highest bracket, currently 39.6%, would become 33%.  Tax reform could raise the standard deduction, limit exemptions and eliminate the alternative minimum tax.  And, it would eliminate or greatly reduce estate and gift taxes.

Individual tax reform is estimated to cost between $2.2 to $3.5 trillion over the next 10 years.  However, both President-elect Trump and Speaker Ryan believe that tax reform will put more money in people’s pockets and create demand which will grow the economy to offset this cost.

Infrastructure.  Further tax incentives would be given to support private funding for some of the repair and upgrading of roads, bridges and airports.  $140 billion in tax credits could provide funds for $1 trillion in infrastructure investments over the next 10 years.  And, using Standard & Poor’s formula that every dollar spent on infrastructure adds $1.30 to the economy, the plan is again for growth and more jobs.

Trade Protectionism.  Candidate Trump promised to put tariffs on Chinese imports and renegotiate NAFTA with Mexico and Canada.  He opposes the Trans-Pacific Partnership, which would eliminate most tariffs on goods from countries in the alliance.  The net effect is that retail prices may be going up soon (to cover the increased costs of foreign produced merchandise) which may push inflation perhaps to the 3-4% range.

Fiscal Stimulus. Tax reform, along with more public spending on infrastructure, will likely increase the budget deficits and drive up interest rates.  According to Jeffrey Gundlach, CEO of Doubleline Capital, and one who predicted in January that Mr. Trump would be elected President, “Trump’s pro-business agenda is inherently ‘unfriendly’ to bonds.” Mr. Gundlach predicts the 10-year Treasury note, currently at 2.27%, will be 6% in 4-5 years.

Candidate Trump said he can get the economy to grow at 4% a year, twice what it is now.  He also promised add lots of jobs and reduce taxes.  We hope President Trump can make that happen.

Second, we need to recognize that this acrimonious presidential campaign was about more than simply “pocketbook” issues.  It showed very clearly that there are also deep divides in our country over race, ethnicity and culture.  When the votes were counted, millions in the rust belt and rural regions of the country cheered their new champion.  Yet, in the urban areas, thousands of minorities, millennials and millions of women and men fear that our country may be entering a dark and divisive time. We hope that President Trump will continue to change the rhetoric of candidate Trump as he did on 60 minutes Sunday night with Lesley Stahl.  He publicly asked those harassing Latinos and Muslims to “Stop it.”

In conclusion, we hope the economy can grow and help all Americans prosper in the coming four years. We also hope that President Trump will continue throughout his term to denounce the hate in our country and promote the safety and dignity of all of our 320 million diverse people.  If he accomplishes all of this, he certainly will be the “President for all Americans.”

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