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.

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A Heart for Splurging: How Budgeting & Expense Tracking can Free up your Time & Money

Written by Jake Rickord.

Heart With Dollar Sign

With love in the air on Valentine’s day, endless amounts of consumers will pile into stores, buying up cards, chocolates, or mega-sized teddy bears to share with the ones they love. In fact, on average Valentine’s Day participants will spend $196.31 according to a recent report. With that decent dent coming in each February, Valentine’s Day can help us softly return our eyes to a very important and relevant topic: Budgeting.

I know, that dreaded B-word, and on the most lovey-dovey day of the year! While it may bring a more serious and somber mood associated with the connotations of it, budgeting can and should be viewed in a much lighter and friendly way! Using modern-day technological and analytical methods, we can more easily wrap our arms around what can seem to be an extremely tedious and cumbersome process.             

As with so many an established method, modern analysis has found unique and interesting ways to innovate classic solutions. One great example of such innovation is a theory coined as “zero-base budgeting”. In essence, this idea conjectures that all expenses in a set period should be categorized in advance such that each dollar earned should go towards a specific category. For example. If you made $4,000 per month, in a zero-based budget you’d allocate $2,000 for mortgage payments, $500 for food, and let’s say $500 for savings (wouldn’t it be nice if all budgets were this simple?). Now we have each expense labeled out and our income allocated towards them. But wait! We still have $1,000 left unallocated! Instead of leaving this piece out, we need to find a home for this cash to get back to our zero-based goal. So why not allocate this extra funding we found towards a great goal of paying down debt, or if we don’t have any debt, let’s shoot for an emergency fund or perhaps some extra cash for a romantic weekend getaway! Or, let’s say we don’t end up spending all $500 for food at the end of the month. We could roll this forward, or…go out for a nice date night! Using this technique, you’ll have a purpose for each and every dollar, which ensures you put your money to work for you and weeds out those unnecessary expenses that rears its head along the way!

An even simpler and more general rule to work with that incorporates the same principle is the 50/30/20 rule. Essentially, it’s a zero-based budget with your categories capped to three distinct classes: fixed expenses, discretionary spending, and savings/debt payments. Knowing this, our aim with this method is to re-organize and cut down expenses such that each month, your after-tax income is split between the three with the following, intuitive guidelines: 50% of your income goes towards fixed expenses (think insurance or mortgage payments), 30% goes towards discretionary spending (think entertainment or gifting), and 20% is used to pay down debt or build up savings. This last 20% category may be the most important factor to future financial success. By "paying yourself" i.e. saving on a regular basis, you start in motion the power of compounding. Once again, following these guidelines will also give your earnings a direct usage, which builds a baseline for proactive monitoring, instead of looking back and seeing where you overspent or having a non-distinct spending goal. Now you can move through the month and monitor where you are for each category using each method, and be able to adjust your spending accordingly!

Now, I know what you’re thinking: “This is great in theory, but I still have to come home from a long day and tally up all my various receipts, statements, etc. to create this budget, let alone monitor it constantly”! Well, fear not, as this is where the technological advancement pieces become so handy, and make budgeting a breeze! Nowadays, there’s an app for everything, and budgeting is certainly no exception! For example, a small indie firm called Intuit (yeah the same people who make that obscure tax software, what was it called again? NitrousTax?) has a free app for your phone that can help you tackle this project quite a bit. With Intuit Mint, you can create a link to any number of checking or savings accounts, debit or credit cards, or even straight to billing sites! Once all these accounts are linked, transaction data from each will start pouring in, and are automatically categorized for you into several different arenas which fit nicely with the zero-based budgeting plan we discussed! Within the app, you can also set goals for each of these categories and reallocate existing transactions that might have been mislabeled. Now each month, you’ll get a summary of how much you spent in each division, and Mint can also send you a notification when you’re close to exceeding your goal, to keep you right on track. (Additionally this app has some other cool features like credit score sampling and bill pay reminders, all for free!)

Some other apps that work in a similar capacity include EveryDollar, created by the zero-based budget guru Dave Ramsey, which has a free version that performs the same function with a slightly more intuitive user interface, but will require you to manually enter your transactions each month. There are also several others out there on the app market including Monthly Budget Planner & Daily Expense Tracker, BudgetBakers’ Wallet, Spendee, and many others. Each of these have their own unique setup and categorization but accomplish the task of simplifying your budgeting process!

All in all, budgeting is one of the biggest pieces of one’s financial puzzle. Most of the time, our income levels, investment performance, social security or any number of other inputs are not 100% in our control. But one important area, in which we do have total control is our spending, which makes monitoring this area a key to long-term financial success. By using analytical ideologies like zero-based budgeting or software aimed at making the whole process easier to follow-along with, we can take out the stress and time that used to be associated with budgeting, and instead create our own steps to reaching our financial goals whether those are getting out of debt, building long-term wealth, or just buying that rose bouquet for our significant other.

For further advice on budgeting and its ties to our financial planning process, please reach out to us! Happy Valentine’s Day!

https://dwmgmt.com/

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The Art of the Notebook

Written by Grant Maddox.

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 What's your favorite organizational system? How do you stay up to date with the important items in your life? Maybe you don't even have a system. We all juggle a lot of information on a day-to-day basis. From time to time, everyone could use a little help on their daily tasks, planning their next big trip, or even ensuring their bills are paid on time. There are numerous ways to approach organizing these elements. The Bullet Journal Method: Track the Past, Order the Present, and Design the Future by Ryder Carroll introduces an inventive way to attack these key issues we all face.

The Bullet Journal Method (BuJo for short) is an ingenious organizational system that many people use as an alternative to a journal, or a traditional planner. The best BuJos feature a symbol format that allows you to easily customize your own page layouts, similar to below. The symbols are the syntax that makes this method so useful. By simplifying tasks, notes, and events into a bullet point format, the BuJo method allows you to focus on only that which is essential. Writing effective bullets is the key to success for a productive and mindful journal. Too much information and your mind may lose sight of the goal. Too little information and your bullet may be ineffective.

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In college, one of the most popular ways to retain information is by writing the information out or using flashcards. Like flashcards, the Bullet Journal is solely a handwritten process. It allows you to customize your organizational habits as much or as little as you see fit. Many experts suggest that by writing things down you may improve your memory. Carroll offers that by writing out your day to day life and actively organizing your future, you are creating an archive to look back on and learn from. See what worked and what didn’t work. That is essentially the main point, no pun intended, of the bullet journal method.

Why use a notebook? According to a New York Times article titled "Why is Productivity so Weak?" every year from 1950 to 2000 Americans increased their productivity around 2.3%. However, per the Bureau of Labor Statistics, not until 2005 did we start to see productivity decrease on a year by year basis. Carroll attributes this decrease in productivity to an increase in technology, information overload, and other online distractions. He goes on to suggest that when you are forced to write, you are also forced to unplug and, hopefully, bring more clarity to your thoughts.

You may be wondering “Why not use a software or a phone application instead of a notebook?” Flexibility. Today's organizational applications have a tendency to do one task extremely well, or many tasks not so well. With a notebook, you are in control, and you can customize as little or as much as needed.

Although your Bujo can be a place of combining several important aspects of your life, not everything is to be included. Things not to be included in your journal: passwords! Passwords and other potentially sensitive information shouldn't live in your handwritten notebook. Much like a checkbook from your bank, your BuJo is something you likely would not want to lose. For a list of potential ways to store your password, you may review our previous blog on this. 

At DWM, we have several organizational tools and processes to assist us in servicing our clients. Our core software for relationship management and consistent workflows is Junxure, the leading Client Relationship Management (CRM) software in our industry. In addition to Junxure, our monthly, weekly and daily checklist enables us to make sure we never miss a beat when it comes to assisting our clients with their long-term goals and adding value on a continual, proactive, basis.

In a world where 5-year-olds now know how to use an iPad better than some Millennials, it may not hurt to go back to the basics. For some, these organization pieces come as second nature, but for others, it does not. For your personal life and day to day activities, you may consider the addition of a Bullet Journal (BuJo).

 

https://www.dwmgmt.com/

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At 80, “Successful Ager” Jack Nicklaus Remains as Relevant as Ever

Written by Les Detterbeck.

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Golfing great Jack Nicklaus turned 80 last week. His drives aren’t as long anymore- Gary Player can now outdrive him. Jack stepped away in 2018 from day-to-day operations of his companies which build golf courses all over the world. You might think Mr. Nicklaus is slowing down. But to hear Jack tell it, he got rid of the things he was tired of doing and is focusing on all the activities he likes; including public speaking engagements, occasional golf exhibitions, course design and fundraising with his wife.

 

Nicklaus started designing courses in 1969. He’s completed over 300. He’s become a grandfather to the “kids” on the PGA tour such as Rickie Fowler and Justin Thomas. Rory McIlroy says that Nicklaus “has the best advice on how to play golf- not how to swing but how to play the game.” Jack’s wife of 60 years, Barbara, is chair of the Nicklaus Children’s Health Care Foundation and together they have raised over $50 million for pediatric care in Ohio and Florida. They just pledged to raise another $100 million over the next five years. Yes, Jack Nicklaus remains relevant as ever and, by any definition, is successfully aging.

 

Much has changed since Social Security was started in 1935. Back then, the average life expectancy was 61 years old. In 1947, the poet Dylan Thomas encouraged the elderly: “Do not go gentle into that good night, old age should burn and rage at close of day.” It’s starting to happen. With greater longevity and medical advances, it’s no surprise that the term “successful aging” has grown in popularity over the past few decades. Back in 1987, John Wallis Rowe and Robert Kahn published a book entitled “Successful Aging.” They felt there were three key factors: 1) being free of disability or disease, 2) having high cognitive and physical abilities, and 3) interacting with others in meaningful ways.

 

Now comes a new NYT bestseller; Dr. Daniel Levitin’s “Successful Aging; a neuroscientist explores the power and potential of our lives.” Today more people who are in the last quarter of their lives are engaged with life as much as they’ve ever been, immersed in social interactions, spiritual pursuits, hiking and nature, charitable work and even starting new professional projects. Dr. Levitin remarks: “They may look old, but they feel like the same people they were 50 years ago and this amazes them.”

 

Successful aging involves focusing on what is important to you, and being able to do what you want to do in old age. While successful aging may be one way to describe how well we age, the concept of meaningful aging might be another important way to consider how to age well.   Certainly, some of our faculties may have slowed, yet “seniors” are finding strength in compensatory mechanisms that have kicked in – positive changes in mood and outlook, punctuated by the exceptional benefits of experience. Baby boomers and their elders may process information more slowly than younger generations but they can intuitively synthesize a lifetime of information and make smarter decisions based on decades of learning, often from their mistakes.

 

Combining recent developments in neuroscience and psychology, “Successful Aging” presents a novel approach to how we think about our final decades. The book demonstrates that aging is not simply a period of decay but a unique time, like infancy or adolescence, which brings forth its own demands, surprises and happiness.

 

Until about thirty years ago, older people in the workforce were forced/encouraged to retire; a tremendous economic and creative loss. However, since the 1990s, the tide has been turning for seniors. Employers and organizations are awakening to the eastern idea that the elderly may not only be of some value but may provide superior enhancements to a group. New medical advances and positive lifestyle changes can help us to find enhanced fulfillment that previous generations may not have been able to do.

 

Research now shows, for example, that fending off Alzheimer’s disease involves five key components: 1) a diet rich in vegetables, 2) moderate physical exercise, 3) brain training exercise, 4) good sleep hygiene, and 5) an appropriate regimen of supplements. In addition, research shows that social stress can lead to a compromised immune system. We don’t need to be victims; we just need to take advantage of modern medicine and make some lifestyle changes.

 

When older people look back on their lives and are asked to pinpoint the age at which they were the happiest, what do you think they say? The age that comes up most often, according to Dr. Levitin, as the happiest time in one’s life is 82. And, that number is rising.

 

At DWM, we work with clients from 0 to 96. As total wealth managers, we understand life cycle planning, financial and investment strategies and proactively provide value-added services. Of course, we focus on making sure our clients have enough money for their entire lives. In addition, and as important, we pay particular attention to helping them experience the best life possible with the money they have. Their fulfillment is our fulfillment. Their happiness is our happiness.

Jack Nicklaus’s longtime PR man Scott Tolley says Jack still only operates at two speeds, “go and giddy-up.” Gary Player calls retirement a death warrant. It doesn’t need to be. Successful aging is getting easier and more fun and fulfilling. C’mon baby boomers- let’s giddy-up.

 

https://dwmgmt.com/

 

 

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