How To Manage Your Finances In A Crisis

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By Jeff Gilbert

Change is hard on everyone. And the changes that are happening daily due to the coronavirus pandemic, not to mention the roller-coaster ride our markets are on, are disrupting our lives, causing us to feel uncomfortable and worried about the future. We are living in unprecedented times and no one can predict what will happen or what our nation’s and world’s recovery is going to look like. 

But just because we didn’t see this coming doesn’t mean you are powerless. There are certain measures you can take to give you peace of mind now, as well as opportunities for you to improve your financial picture and make positive changes that could benefit you for years to come. 

Here are 5 financial actions you can take during these turbulent times.

1. Check In With Your Advisor About Your Portfolio

Your advisor is educated about what’s going on and will be able to give you clarity on exactly what is happening to your portfolio. This is an important first step since you should feel confident that you have a well-balanced portfolio, based on your needs and your risk level. 

2. Take Advantage Of Lower Prices By Maintaining Discipline 

This quote by Warren Buffett is all too applicable: “Be fearful when others are greedy and greedy when others are fearful.”

In every stock market downturn, opportunities are waiting for those with the right perspective to see it. Where many people go wrong in volatile times like these is selling near the bottom of a bear market, staying on the sidelines during a good portion of the recovery, and then jumping back in closer to the next top. Put that together, and you not only lose money but also lose out on potential growth and compound interest from the time you were out of the market. Emotional investing will cost you.

It may seem counterintuitive, but keep investing consistently. When stock market prices are down, think of it as an opportunity to snap up some bargains before the recovery takes place. In the previous market crash of 2008/2009, the people who continued to invest strategically made a significant return on their investment. 

3. Consider Tax Loss Harvesting

Tax loss harvesting is the strategy of selling a security that has experienced a loss. By realizing a loss, investors can offset taxes. The sold security is usually replaced by a similar one to maintain the desired asset allocation and expected returns. With the markets hitting low points, it might be an ideal time for you to sell something and take the loss, but then buy something to participate in the market’s recovery. If you look for the opportunity to invest in something similar or rebalance, you win and have a tax deduction to use for this year and potentially even future years. 

Before doing this, talk with your advisor about how much of a difference this could make on your financial plan.

4. Look Into A Roth Conversion

Market downturns are the perfect time to convert to a Roth IRA and pay significantly less in taxes, not to mention we may be at the lowest tax rates we will see in our lifetime. Let’s say you have an IRA that used to be worth $100,000 and is now worth $75,000. You could convert this position now and pay less in taxes than what you would have paid when it was worth $100,000…25% less.

There are many factors to consider when deciding if a Roth conversion is right for you, such as your current income versus your expected retirement income, your projected minimum required distributions, the tax implications, current liquidity, etc. Making this decision is something you should discuss with your advisor. 

5.  Look For Unique Opportunities

A few other opportunities you could take advantage of with lower interest rates and stock prices are the following:

  • Consider refinancing your home.
  • Purchase future travel at a discount. 
  • Fund a 529 for your child’s college tuition with low market prices.
  • Refinance any outstanding debt.
  • Buy a home at a discount if you are renting. 

Are You Ready To Take Control?

When this market volatility has passed (and it will), some will lose, some will break even, and some will get ahead. We at Balboa Wealth Partners want to see you get ahead, and we welcome the opportunity to help you make decisions that will enhance your finances so that when we go back to our regular routines, we do so with more clarity and confidence. To get in touch, email us at jgilbert@balboawealth.com or call 949-445-1465 to set up a phone or virtual appointment. 

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

What You Need To Know About Recessions And Bear Markets

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As global markets continue their roller coaster ride due to fears surrounding the coronavirus, our most recent bull market officially turned into a bear market. But what does that mean? And are we on the verge of another recession like the one we had in 2008?

In light of all these concerns, today we’ll share what you need to know about recessions and bear markets. If you are worried about your portfolio, we understand and we’re here to help. Feel free to contact our office to get answers to your specific questions. 

What Is A Bear Market?

A bear market happens when an overall market benchmark, such as the S&P 500, dips by 20% or more from its most recent high. (1) This is often accompanied by negative investor sentiment and more selling than buying.

It’s important to highlight that normal stock market volatility isn’t an indicator of a bear market. Normal dips and swings are necessary for long-term growth and shouldn’t be cause for concern.

What Is A Recession? 

A recession is defined as two consecutive quarters of economic decline (emphasis on the word economic). They’re measured using factors such as the employment rate, gross domestic product, bond yield curves, and other factors independent of the stock market. (2)

Economists declare recessions retroactively. For example, the Great Recession wasn’t confirmed until November 2008—11 months after it started. (3)

Bear Markets Vs. Recessions: How Are They Related?

A bear market relates to the stock market. A recession relates to the economy. Contrary to popular belief, the stock market is not the economy. What drives the stock market is investor emotions—which, as we all know, can be fickle. As humans, we have a tendency to be overly optimistic when there’s no data to support our feelings, and pessimistic when data looks great. 

Recessions are the complete opposite. Tangible factors determine the state of our economy. There’s no emotion involved. Which begs the question: Why do people correlate recessions and bear markets? 

If you look back on history, recessions and bear markets have usually occurred around the same time. Of the last 11 S&P 500 bear markets we’ve had since 1957, 63.6% came after a recession. (4) The two go hand in hand, but they’re not the same.

Not even highly educated economists can predict a bear market or recession. There’s a lot of speculation that goes on in the news, but it’s just that—speculation.

What Should Investors Do?

The best thing to do as a long-term investor is to find an optimal portfolio that balances your comfortable level of risk and return. The actions you take in the stock market should be independent of whether economists think we’re entering a bear market or recession.

And as many financial experts have advised: Your 401(k) right now is like your face: Don’t touch it. Selling due to fear when the market is down locks in your losses and can do long-term damage to your financial future.

Speak With Your Advisor

Whether you’re new to investing or an experienced investor, it’s helpful to consult with an objective third party during times like this. Human nature causes us all to act out of emotion when our accounts go down. As an independent firm, we put your best interests first. We seek to serve as a support system for our clients, helping them make informed financial decisions that are not driven by emotion.

We’re Here For Your Friends And Family

If you have friends or family who need help with their investments, we are happy to offer a complimentary portfolio review and recommendations. We can discuss what is appropriate for their immediate needs and long-term objectives. Sometimes simply speaking with a financial advisor may help investors feel more confident and less concerned with the most recent market activity.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

___________

(1) https://www.investopedia.com/a-history-of-bear-markets-4582652

(2) https://www.bankrate.com/personal-finance/smart-money/watch-these-indicators-know-when-recession-could-be-coming/

(3) https://www.usatoday.com/story/money/2019/08/19/recession-what-does-mean-and-what-like/2030642001/

(4) https://dqydj.com/relationship-bear-markets-recession/

Can A Donor-Advised Fund Save You Money On Taxes?

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By Jeff Gilbert

Can you think of one person who doesn’t want to save money on their taxes and be generous at the same time? Neither can I. Donor-advised funds could be a great option to lower your taxable income, which will decrease the amount you pay in taxes and simultaneously give more money to causes you care about. 

What Is A Donor-Advised Fund (DAF)?

A DAF works like a personal giving account where you can contribute money that is tax-deductible, advise on which charity you want the funds to be given to, and all the assets will grow tax-free until it leaves the account. (1) Although some DAF providers require a minimum contribution every couple of years, there is no law on how long the funds can stay in the account. That money will grow in the fund until you want to send it to a charity of your choice. 

Potential Tax Benefits 

Lower Your Income Tax By Itemizing Deductions 

With the new tax law in effect, which increases standard deductions to $24,800 for people who are married filing jointly and $12,400 for individual filers in 2020, you need more write-offs to justify itemizing your deductions. (2)

A DAF is ideal for when you earn or receive a sizable amount of money in one year. When you contribute to the fund, you can take an immediate tax credit for that lump sum of money and disperse that amount over any length of time to charities of your choice.

You just have to make sure that your cash donations are no more than 60% of your adjusted gross income. That is the maximum you can write off in one year. (3)

However, you could also use these funds to your advantage every few years without a lump sum of money. Here’s a scenario where you could receive more than $114,400 in deductions over 4 years:

You save $10,000 each year for 3 years and claim standard deductions for those years. In the fourth year, you contribute that $30,000 plus your annual $10,000 savings into a DAF. Now you have $40,000 that you can claim as itemized deductions in one year. 

By doing this, you receive a tax credit of $15,200 more than you would have if you claimed a standard deduction each year and were donating the same amount of money. This keeps more cash in your pocket and sends more money to causes you already give to or want to give to. 

Save On Capital Gains

Do you have a lump sum of appreciated publicly traded securities? The most common publicly traded securities donated are stocks, bonds, and mutual funds that have grown in value since you invested in them. (4) Donating part or all of these funds can reduce or eliminate the amount you pay in capital gains tax, which can also apply to real estate gains. 

Contributing noncash assets to a DAF makes sending money to charities simple and takes care of worrying about capital gains tax, all while that money grows tax-free.

Keep in mind that the annual deduction limit for securities and other appreciated assets is 30% of your adjusted gross income. (5)

Easily Keep Records

Maintaining records of your contributions is a huge plus when it comes time to file your taxes. DAF providers keep track of your contributions and provide you a single tax document you can give to your accountant, which takes the pressure off you to maintain those records.

There are many charities you can donate to that are not qualified charitable donations, but putting money into a DAF guarantees your donations go to a registered 501(c)3 non-profit organization.

Since DAFs can include actively managed funds and they take care of all the records and transfers, there could be administrative and investment fees associated with starting a DAF. Schwab and Fidelity (two of the three largest providers of donor-advised accounts) charge whichever is greater, 0.60 percent of assets or $100. (6)

Are You Ready To Save Money With A Donor-Advised Fund?

Using a DAF for your philanthropy is such an understated path to giving and saving at the same time. What was mentioned above are only a handful of ways you can take advantage of tax deductions and maximize the impact your charitable contributions have on worthy causes.

Let’s see if a donor-advised fund can help you save on taxes and is also a good fit for your financial plan. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

___________

(1) https://www.vanguardcharitable.org/giving-with-vc/how-it-works

(2) https://www.investopedia.com/everything-to-know-about-individual-2020-taxes-4775907

(3) https://www.aefonline.org/tax-benefits

(4) https://www.schwabcharitable.org/public/charitable/features/non_cash_contribution_options/appreciated-public-traded-securities.html

(5) https://www.aefonline.org/tax-benefits

(6) https://www.reuters.com/article/us-donor-advised-idUSBRE95K0YT20130621

What Should You Do About The Coronavirus And Stock Market Volatility?

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The financial markets took a big dip early this week over fears about the spreading coronavirus, erasing gains from earlier this year. After the Dow lost over 800 points on Tuesday, it was down a total of 1,900 points in two days. 

Investors are understandably nervous about their money and their health. If you are worried about your portfolio, you’re not alone. But during stock market volatility, it’s important to keep a level head to avoid financial mistakes.

Stay Calm

At times like these, it’s important to put current conditions into perspective. This is not the first time the market has taken a tumble and it won’t be the last. Declines in the Dow Jones Industrial Average are actually fairly regular events. In fact, drops of 10% or more happen about once a year on average.

Keep An Eye On The Situation

We simply do not have enough information yet to know how the coronavirus will impact the economy in the short and long term. It’s possible that the virus will soon be well-contained and the markets will recover. But it is also possible that the virus will spread and impact global markets, which would lead to a full correction or even a longer-term recession. 

It’s important to remember that markets dislike uncertainty. With so much uncertainty over how fast the virus could spread and the potential impacts, volatility right now is extreme. As we get more information, it is likely that day-to-day market fluctuations will decrease. 

Play Dead

There’s an old saying that the best thing to do when you meet a bear market is the same as if you were to meet a bear in the woods: play dead. While easier said than done, successful long-term investors know that it’s important to stay calm during a market correction. We don’t know yet whether the coronavirus fears will translate into an official correction, but the risk always exists.

Market volatility has increased in recent years and the media can often make it seem like each episode is worse than the one before. In reality, volatility does not hurt investors, but selling when the market is down will lock in losses.

Remember That Your Portfolio is Diversified

We understand that volatility and market declines are stressful. However, we encourage you to keep in mind that while the stock market may be down significantly, your portfolio is made up of both stocks, bonds, and other assets that are designed to work together to decrease overall losses. It’s important to consider your specific portfolio, investment horizon, and circumstances when reflecting on economic events. If you have questions about your portfolio, get in touch with our office.

Review Your 401(k) and Other Accounts

Now is a good time to take a look at all of your investment accounts, including your 401(k) to make sure it is well-diversified. If you have not reviewed the investment accounts that we do not manage, get in touch with our office and we’ll take a look and offer recommendations to minimize potential losses.

Speak With Your Advisor

Whether you’re new to investing or an experienced investor, it’s helpful to consult with an objective third party. Human nature causes us all to act out of emotion when our accounts go down. As an independent firm, we put your best interests first. We seek to serve as a support system for our clients, helping them make informed financial decisions that aren’t driven solely by emotion. 

We’re Here for Your Friends and Family

If you have friends or family who need help with their investments, we are happy to offer a complimentary portfolio review and recommendations. We can discuss what is appropriate for their immediate needs and long-term objectives. Sometimes, simply speaking with a financial advisor may help investors feel more confident and less concerned with the day-to-day market activity.

5 Ways To Prepare For A More Affordable Retirement

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By Jeff Gilbert

Retirement is expensive. That’s one thing everyone can agree on. But what if there were steps you could take now to actively reduce the amount of money you’ll need later on? That’s exactly what we’ll talk about today. Ready? Here are 5 ways to prepare for a more affordable retirement. 

1. Pay Off Your Mortgage

Your mortgage is arguably your largest recurring expense in retirement. Getting rid of this payment before you enter your golden years can significantly reduce the amount of money you need each month. 

Start by calculating how much extra money you could throw toward your principal. Could you make one extra payment every few months? What about one extra payment a year? 

If there’s not a lot of wiggle room in your monthly budget, consider cutting down on discretionary expenses. Or earmark any extra money you get from bonuses or tax refunds for your mortgage. Every little bit counts.

2. Downsize Or Relocate

If you’re still living in the same house where you raised your family, there’s a good chance you don’t need all that space in retirement. Downsizing may seem extreme, but it’s a quick way to reduce your long-term retirement costs, lower utility bills, and pay off debt. Plus, a one-story house with a smaller yard may be easier to keep up with as you age. 

If you’re not tied down to your current city, take it a step further by relocating to an area with a lower cost of living. You might be surprised by how much further you can stretch your retirement dollars. For example, a $1 million nest egg lasts around 13 years in California, but 23 years in Mississippi. (1)

3. Travel During The Off-Season

Ask 50 people what they plan on doing in retirement, and I’m sure most of them will say travel. Whether it’s traveling across the country to visit the grandkids or traveling around the world to visit the Eiffel Tower, it’s on everyone’s list—and for good reason. After working 30+ years, you deserve to go to all those places on your bucket list. 

But if you want to stretch your travel budget even further, consider traveling during the off-season. It has many perks. Not only are airlines, hotels, and activities cheaper, but you beat the crowds too! Plus, you have extra money left over to jump-start your next trip. Sounds nice, right? 

4. Consider Long-Term Care Insurance

It’s estimated that nearly 70% of people turning 65 today will need some type of long-term care during retirement. (2) This could be anything from a home health aide (which costs an estimated $4,290 a month) or a private room in a nursing home (which costs an estimated $8,517 a month). (3) Unfortunately, these outrageous costs often result in financial plan failures for 32% of households with a $1 million net worth. (4)

So, what do you do? We recommend buying a long-term care insurance policy. While Medicare covers costs for acute illnesses, long-term care insurance fills in the gap by covering personal costs for health home aides, assisted living facilities, nursing homes, and more. 

Studies show we’ll all have long-term care expenses at some point. Insurance helps preserve your nest egg and fill in the gaps where Medicare falls short.

5. Delay Social Security

The average life expectancy is 84.3 for men and 86.6 for women. If your health and family history indicates that you may live this long (or longer), delaying Social Security until age 70 could earn you thousands of more dollars in retirement.   

For example, the chart below shows how much your monthly Social Security payout would be if your estimated payment was $2,000 at full retirement age and you claimed benefits at age 62, 66, and 70.* 

If you start collecting benefits at this age… your monthly payout will be this much…
62 (reduced benefits) $1,500
66 (full benefits) $2,000
70 (increased benefits) $2,640

*Assuming a full retirement age of 66

According to this example, you earn $1,140 more a month if you wait to claim benefits at age 70 instead of 62.  

How We Help You Prepare For A Secure Retirement

As you can see, there are many ways to prepare for a more affordable retirement. We hope that you’re able to implement some of these strategies today, so you can live out your retirement dreams later on. 

At Balboa Wealth Partners, we’re passionate about helping you live your ideal retirement life. If you’d like to chat with a financial professional about your current situation, we invite you to schedule a no-obligation conversation today. During this meeting, we review your current retirement plan, answer any questions you may have, and help you create a financial road map that leads to success. To get started, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

___________

(1) https://finance.yahoo.com/news/long-1-million-retirement-last-090000023.html

(2) https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html

(3) https://www.genworth.com/aging-and-you/finances/cost-of-care.html

(4) https://www.businessinsider.com/10-things-to-know-about-long-term-care-2016-9

How Might The Market Behave In 2020?

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By Jeff Gilbert

This January, we find ourselves in a much different place than we did a year ago. Last year came on the heels of a difficult December, where the market dropped precipitously over recession worries. Then the market surprised everyone with a stellar performance in 2019. Are we in for a repeat performance in 2020?

Less Room For Market Growth

Most experts are not expecting the same kinds of returns in 2020 that we saw in 2019, mainly because we’re starting in a very different place. With such a difficult December in 2018, the markets had plenty of room for improvement in 2019. There simply isn’t as much room for growth in 2020, as we are starting out near record highs on the tail of a strong year for both stocks and bonds worldwide.

For example, stocks are more expensive this year than they were last year. One way that is measured is by comparing a stock’s price to profit over the preceding year. Right now, the S&P 500 is trading at 21.1 times its earnings. Last year at this time, it was trading at 16.5 times earnings and the average over the last 2 decades was 17.7 times earnings. (1) We’re starting in a much better place this year, so there just isn’t as much room for growth.

Low Recession Risk

Even though you shouldn’t expect a repeat of 2019’s amazing gains, that doesn’t mean you need to worry. The economy is still growing, chugging along at a modest rate. There is little risk of a recession in 2020, especially with the progress made on U.S.-China trade and the Federal Reserve’s commitment to keeping interest rates low. One of the biggest unknowns for 2020 is how the presidential election will impact the economy, but with a strong foundation, the impact should not be great.

Analysts are expecting continued growth for 2020 and this next decade, though at slower rates than we saw last year. Vanguard forecasts American stocks to return 3.5% to 5.5% gains over the next decade, which is much lower than we have seen recently. (2) Even if gains are lower, they are still expected to be positive.

How You Should Respond

What does all of this mean for you practically? First of all, it is important to remember that neither I nor the Wall Street analysts have crystal balls, and any predictions you hear are merely guesses. None of us know for certain what the future holds. No one predicted that 2019 would be the S&P 500’s best year since 2013. (3) We are just making educated guesses and there is no guarantee that what we expect will actually happen.

In light of that, it is important to have a balanced investment strategy that takes into account all possibilities. A well-diversified portfolio crafted with your specific time horizon in mind should be able to meet your needs whether the market returns 2% or 20% in 2020. 

The greatest danger in prosperous times like these is for investors to become complacent or greedy and ignore the proven principles of long-term investing. If you want to make sure that your portfolio is prepared for whatever 2020 has in store, you can complete a complimentary risk assessment here or give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

__________

(1) https://www.nytimes.com/2020/01/01/business/wall-street-markets-2020.html

(2) https://www.nytimes.com/2020/01/01/business/wall-street-markets-2020.html

(3) https://www.nytimes.com/2020/01/01/business/wall-street-markets-2020.html

Are You Ready For A New Year? 5 Steps To Take Before You Say Hello To 2020

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By Jeff Gilbert

This year (and decade!) is quickly coming to a close, and if you’re like most Americans, you spend the month of December neck-deep in Christmas parties, shopping for gifts, and planning for travel. You might think that managing your finances can wait as you deal with the holiday busyness, but since finance-related resolutions consistently fall in the top five most popular New Year’s resolutions, (1) why don’t you give yourself a head start on your 2020 financial goals? Here are 5 critical financial actions you’ll be glad you tackled when the ball drops on New Year’s Eve!

1. Celebrate Victories And Set New Goals

What financial goals did you set when you rung in 2019? Did you stay on top of those goals or did they get swept under the rug? Take this time to reflect on the past year and mark how far you’ve come, celebrating your progress, no matter how small! Then evaluate your saving and spending from the past year, set some new goals, and adjust your financial plan, taking into account any life changes such as marriage, relocation, or a job change. 

2. Bump Up Your Savings

If possible, max out your contributions to your 401(k) by the end of the year to make the most of your retirement savings. For 2019, you can contribute as much as $19,000 (or $25,000 if you are age 50 or older). Remember, these are your contribution limits and any employer match would be in addition to this. You might also consider contributing to a Roth IRA. For 2019, you can contribute as much as $6,000 (or $7,000 if you are age 50 or older). Finish the year strong by investing in your future!

3. Take Advantage of Your Employer Benefits

While every employer has different rules that apply to the benefits they offer their employees, many benefits expire or reset at the end of the year. You work hard for these perks, so be sure to use them!

Medical and Dental Benefits

At the beginning of 2019, did you have good intentions of taking care of some dental work, blood tests, or other medical procedures lingering on your to-do list? Now’s the time to take advantage of all your healthcare needs before your deductible resets. Dental plans in particular often have a maximum coverage amount. If you haven’t used up the full amount and anticipate any treatments, make it a priority to set an appointment before December 31st.

Flexible Spending Account

Like your health insurance benefits, you’ll want to use up as much of your FSA (flexible spending account) dollars as possible by the end of the year. You are only allowed to carry over $500 to the next plan year. Check the restrictions on your account to see what the money can and cannot be used for, and take care of any needs you may have as allowed by your plan.

Sick and Vacation Time

Depending on your company, your sick or vacation time might expire at the end of the year. Check with your HR department to learn about any expiration dates. If it does expire, fit in a last-minute vacation or even a staycation. If you need to make any trips to the doctor in the near future, schedule those appointments now to make use of these benefits before you lose them.

4. Make Some Updates

To your estate plan and insurance coverage, that is. If you have taken the time and energy to create an estate plan, you’ll want to check in periodically to ensure all the documents are up to date and no major details have changed. Any significant life event is a good time to think about updating your estate plan documents. If you change any of the beneficiaries in one place, such as a life insurance policy, make sure that they are consistent with the other documents so that there is no confusion. 

Your insurance needs may have changed as the year has gone on, which is why it’s important to regularly review your insurance coverages and your designated beneficiaries to make sure they are up to date and reflect your current financial situation. For example, if you’ve paid off debt and your youngest child has just graduated from college, you may not need as much life insurance coverage since your family’s needs and liabilities have decreased. You might also want to evaluate your need for other types of insurance you may not currently have, such as long-term care insurance.

5. Give, Then Give Some More

If gifting is one of your long-term financial goals, it’s never too early to start planning for the legacy you want to leave your loved ones without sharing a good portion of it with Uncle Sam.

Each year you can gift up to $15,000 to as many people as you wish without those gifts counting against your lifetime exemption of $11.4 million. If you’ve yet to gift this year or haven’t reached the $15,000 limit for a particular recipient, make sure you do this by December 31st.

If you’re planning to itemize deductions on your 2019 tax return, be sure to make your charitable contributions before the end of the year. This includes donating appreciated securities, which may help you avoid paying taxes on the gains. Along with your other tax documents, find and organize any receipts you have from donations to charities, whether made in cash, as a securities contribution, or other type of gift.

End The Year Strong

Which of these steps do you need to take before the ball drops on New Year’s Eve? Our team at Balboa Wealth Partners would love to help you finish the year strong and set you up for a successful 2020. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com to get started today! 

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

____________

(1) https://vitagene.com/blog/most-popular-2019-new-years-resolution/

Welcome Our New Team Members!

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By Jeff Gilbert

Balboa Wealth Partners is thrilled to welcome two new additions to our team, Aarone Tirpak and Mark Zielinski! We love that our firm is growing and expanding, and we are thankful to have these two extraordinary advisors here to provide our clients with even more expertise, passion, and skill. 

Meet Aarone

Aarone joins us from Wells Fargo, where he excelled in his job as a producing branch manager. He has been in the financial industry for over three decades, beginning with Morgan Stanley Dean Witter in the early ’90s and leading to opportunities to work with mass affluent clients throughout the country. He’s held various roles, including managing an advisory branch with over $1 billion in client assets, assisting clients with retirement planning, overall planning and asset management needs, as well as coaching other advisors so they can develop their own best practices to better serve their clients. He has also spent some time providing financial wellness education lectures for several Fortune 500 companies, special interest groups, and local municipal venues. 

Aarone thrives on helping his clients find confidence in their financial decision-making process and supporting fellow advisors with any and all insights and skills he has gained over the years. 

Meet Mark

Mark Zielinski has a rich and deep background in the financial industry with 38 years of experience both in investment and wealth management and financial advisor recruiting. He’s held executive roles in branch/complex and regional management with Prudential Securities, Piper Jaffray, and Wells Fargo Advisors.  He has a bachelor’s degree in economics from the Maxwell School of Citizenship and Public Affairs at Syracuse University, as well as a certificate in executive development from The Wharton School at the University of Pennsylvania.

Mark is known for being an exceptional communicator and excels in breaking down ideas into simple and easy-to-understand concepts. Mark earns client and team member trust quickly and is regularly sought after for leadership positions. He is a calculated risk-taker who balances both facts and intuition, a strategy that has proved successful in his almost four-decade career. Mark is passionate about helping people grow their businesses while building exceptional lives. 

Welcome Aarone And Mark

We believe Aarone and Mark will be powerful additions to our team and we encourage you to welcome them to the firm when you come by! If you would like to meet our new advisors or find out what Balboa Wealth Partners can do for your financial life, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

The Biggest Financial Mistakes I See

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By Jeff Gilbert

Life is hectic. If you’re like me, you run around day after day trying to finish a to-do list that never ends. This infinite to-do list is loaded with tasks we know we should do but can never seem to find the time to do them.

One of these neglected tasks is taking time to examine our financial health and make sure we aren’t making mistakes that will come back to bite us down the road. Unless we are constantly reminded of these common financial mistakes (and their consequences), life tends to take over and we forget.

Well, today I’m giving you a friendly nudge. Here are the three biggest financial mistakes to avoid—mistakes that are easy to make but that have huge consequences.

1. Failing To Set Up A Will And A Trust

One mistake I often see with new clients is that they don’t have a will or a trust set up. Nobody likes to think about accidents or death, but if you fail to set up these documents, you’re putting the well-being of your loved ones at risk. Let me explain.

A will is a document that gives instructions on how to distribute your assets when you die. It also indicates who will become the legal guardian of your minor children. Without a will, you are leaving this all up to chance—not a good idea! So, unless you are single, broke, and have no kids, you need a will.

A trust is another document used to transfer your estate when you die. Depending on your situation, a trust could make the asset distribution process faster (and less expensive) for your beneficiaries. The best way to find out if you need a trust is to speak with a financial advisor. 

2. Waiting Too Long To Start Saving

When you’re young, life is complicated. You’re busy studying, starting a career, finding a life partner, raising kids, and frantically trying to squeeze in a social life. That’s a lot of time, energy, and expenses. And unfortunately, it usually means your retirement plan is put off until “someday when things settle down a bit.”

This common mistake has serious consequences.

If you wait until mid-life to start saving for retirement, you lose your most powerful wealth-building tool: time. Every year you wait to contribute to a retirement account is a year less of compounding interest.

Whenever I ask people why they waited so long to start, it’s usually related to procrastination. “Oh, I’ll start contributing to that Roth next year when I have fewer expenses.” But then one year turns to two, two to five, five to 10—and before they know it, they’re 45 years old with zero dollars saved for retirement.

Please don’t do this!

3. Not Having A Plan

The last critical mistake I see is when people move through life without a financial plan. They have no written road map outlining the steps to reach their short-term and long-term goals. Many times, they don’t even know what those goals are!

Here’s a hard truth: You can’t just save some money here and there and hope for the best. It doesn’t work that way. This path leads to disaster. If you want to build the wealth needed to reach your lifestyle goals, you first need to define those goals, and then you must work backward to create a step-by-step plan.

This is exactly what we at Balboa Wealth Partners help our clients do. If you’re interested in a no-obligation conversation about how we can help you design a personalized program to reach your financial goals (and avoid the above mistakes, among others), give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout Southern California as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice. Neither firm is affiliated.

Jump-Start Your Financial Plan For 2019!

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What new goals are you trying to reach in 2019? Are you focusing on your physical health by joining a gym and cleaning up your diet? Are you throwing yourself into your career in order to earn a promotion? Or maybe, like millions of other people, you are using this year’s fresh start to find renewed motivation and make plans to get out of debt, save more, or reach a financial milestone such as purchasing a vacation home or retiring.

While setting goals can be a healthy way to focus on what matters in the new year, 80% of resolutions fail by February. (1) Your finances are too important to fail, so if you have dreams of making 2019 your best financial year yet, these 6 small but impactful steps will help you jump-start your financial plan and set a solid foundation for your financial life.

1. Create An Action Plan For Your Goals

Have you ever put your financial dreams in writing? Now is the time to do just that! Whether your dream is to save $100,000 in the next five years or fully fund your child’s college education, putting your thoughts on paper will help you turn your dreams into goals and your goals into a step-by-step plan. And since it will take time to reach your goals and plenty of obstacles will come up along the way, set attainable objectives and celebrate your progress.

Come up with deadlines to reach specific milestones on the way toward your overall goal. If you are trying to eliminate debt, for example, determine how much you will pay each month and what your subsequent debt amount will look like in six months, one year, or five years. It’s also important to use visual reminders to keep you on track and help you avoid discouragement. Whether you use a spreadsheet or a chart hung on your fridge door, measure your progress as time goes on, and remember that small steps add up to significant progress over time.

Be sure to reevaluate your goals frequently and make adjustments as needed. Having goals and an action plan to achieve your goals will give you perspective in your day-to-day decisions and help you prioritize your saving and spending.

2. Leverage Technology To Make Your Life Easier

Our lives are becoming increasingly busy, and it’s often the seemingly less important financial tasks that fall to the wayside. Thankfully, financial technology has come a long way. Take advantage of the tools available to streamline your financial life so you can devote your time and attention to the things that matter most.

Automating your bills and savings not only organizes your life but also has long-term benefits for your financial picture. Paying your bills automatically tends to improve your credit score, makes budgeting simpler, and can also make income tax preparation easier. Additionally, by automating your savings, you give yourself a chance to save before you can even touch the money.

If budgeting is your pain point, look for a budgeting platform that works for you, and don’t forget to talk to your financial professional to find out if they offer software that allows you to see all your accounts in one place so you can stay organized and track your progress toward your goals.

3. Eliminate Debt

It’s difficult to accumulate wealth and make progress toward your goals when you are paying high interest rates on things like credit cards, car loans, and student loans. Become relentless about reducing your debt and interest costs, and consolidate accounts where you can.

If you have a loan with a significantly higher interest rate than the others, you may want to work on paying off that one first. Or, if you’re feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, in order to gain some momentum. Use a debt calculator to calculate out how long it will take to pay off your debt, then build extra payments into your monthly budget so you aren’t tempted to spend that money elsewhere.

Creating an emergency fund can help you avoid accumulating more debt. By setting up a liquid, easily accessible savings account, you won’t have to rely on debt to cover those inevitable life expenses, such as home repairs or medical bills. Create this cash cushion by putting aside money from each paycheck until you have enough to cover approximately three to six months’ worth of living expenses. You will never regret having an emergency fund at the ready.

4. Invest With Purpose

Anyone can close their eyes and pick a random mix of mutual funds to invest in, but having a customized retirement plan based on your circumstances, goals, and risk level is what will get you from point A to point B. Asset allocation is the most critical investment decision you can make, especially in our current volatile market.

Work with a financial professional to determine your risk tolerance level and create an investment strategy that will give your portfolio a clear sense of purpose. It’s also critical to rebalance on occasion to ensure your portfolio is still aligned with your goals and time horizon.

5. Mitigate Risks

No matter how hard you work to create a foolproof financial plan, there will always be risks and roadblocks that have the potential to get you off course. Inflation will decrease your purchasing power, and rising healthcare costs can eat away at your nest egg. Unexpected early retirement could change the time frame of your goals, tax changes could throw a wrench into your planning, and the loss of a spouse could impact your standard of living. Speak with your advisor to find ways to protect yourself against these risks.

6. Partner With A Financial Professional

Regardless of where you are in the planning process or what goals you have set for your financial life, we are here to support you, guide you, and help you navigate the challenges of life so you can attain your current and future financial needs. At Balboa Wealth Partners, our advisors specialize in overseeing your financial affairs and coordinating the day-to-day execution of your long-term financial plan, all with high-touch, responsive service. Let us help you jump-start your financial plan in 2019 by contacting me at 949-445-1465 or jgilbert@balboawealth.com to set up a no-obligation conversation.

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high net-worth families, Jeff aims to help clients achieve their short-term and long-term goals and to worry less about their finances and more on their passions in life. Based in Orange County, he works with clients throughout Southern California, as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.

Advisory services provided by Balboa Wealth Partners, Inc, an Investment Adviser registered with the SEC.  Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.

Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.

Balboa offers advisory services independent of Chalice.  Neither firm is affiliated.

____________

(1) https://health.usnews.com/health-news/blogs/eat-run/articles/2015-12-29/why-80-percent-of-new-years-resolutions-fail