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Time to Disavow the Dow Right Now? 01.14.2022

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The oldest and still most widely quoted proxy for the U.S. stock market, the Dow Jones Industrial Average (DJIA), or “the Dow” for short, continues to be regularly quoted by news broadcasts, newspapers, and smartphone apps as an indicator of the health (or lack thereof) of the financial markets and U.S. economy.

Newspaper Stand

The Dow history is interesting, as it was created in the late 19th century by Charles Dow, co-founder of Dow Jones & Company and co-founder and editor of the Wall Street Journal (WSJ), and Edward Jones, the WSJ’s other co-founder. It is an index that has gone through 57 different revisions since it was created, and to this day is supposed to encapsulate the overall state of the stock market in a single number.

The composition of the Dow right now is determined by the Index Committee, and is designed to change as the economy changes over time. Initially comprised of 12 of the biggest and most influential companies of the day, the Dow history includes an expansion to 20 companies in 1916; by 1928, it included 30 companies, which continues to be the number tracked today. Any current member of the Dow can be dropped by the Committee if the company is deemed to be less relevant to current economic trends, to be replaced by a new company that the Committee determines to better reflect said trends. The 30 companies that currently comprise the DJIA index, and the year they were added, are as follows:

Dow Jones Industrial Average
Dow Jones Industrial Average

As the U.S. economy has grown over time, so has the value of the Dow. Below is a graph from FRED (Federal Reserve Economic Data) reflecting how the DJIA has almost tripledover just the past ten years, growing from 12,741.02 on 1/12/2012, to 36,252.02 on 1/11/2022:

TPW FRED Graph

Ten years of data not enough for you? Below is a logarithmic chart from Macrotrendsreflecting the Dow history and growth over the past 100 years (the grey bands reflect recessions in the U.S.):

TPW DOW History Graph

Albeit with regular speed-bumps along the way, the continued and sustained growth of the Dow has been pretty amazing!

Interested in learning more? Click the thumbnail below for a straightforward YouTube video from PBS that discusses everything to do with the Dow right now:

The Dow Right Now

However, for all of its “glory” and history as the best-known and perhaps most widely followed stock market index in the world, is the Dow right now really all it’s cracked up to be? At Towerpoint Wealth, we argue the answer is no, as the index is as flawed today as when it was first calculated on May 26, 1896. The various “warts” of the Dow give us pause, and cause us to discourage our clients from considering it a truly useful proxy and viable resource to rely on.

Here are four specific reasons why we disavow the Dow right now:

1. It is narrow – “only” 30 companies are represented in the index.

Because (in theory) the 30 companies that comprise the Dow Jones Industrial Average (DJIA) index are the largest and most influential in the country, they represent only about 25% of the value of the entire U.S. stock market. However, many experts (ourselves included) feel that because it consists of only 30 large capitalization (“large cap”) U.S. companies, and neglects mid cap and small cap companies, the DJIA index does not properly represent the comprehensive state of the U.S. economy.

2. The Dow is a price-weighted index

An index that is price-weighted means that higher-priced stocks have greater weight and influence on the index compared to lower-priced stocks. On the surface this may seem logical, but the problem is that a higher-priced stock has zero correlation with a higher-value company. Put differently, a $9 stock could have a higher value than a $50 stock, but because the Dow is price-weighted, that doesn’t matter.

In a price-weighted index, a stock that increases from $90 to $100 (an 11% increase) will have the same effect on the value of the overall index as a stock that increases from $10 to $20 (a 100% increase), even though the percentage move for the lower priced stock is far greater than that of the higher-priced stock.

Put differently, a percentage change up or down in the Dow doesn’t necessarily mean that the entire market has gone up or down, or even that the Dow’s 30 companies have collectively gone up or down. The higher-priced stocks contained in the index simply exert a much greater influence on its overall direction and movement.

A prime example of why the price-weighted indexing method doesn’t make logical sense is when an index component undergoes a stock split. Prior to splitting 4-for-1 in August of 2020, Apple was the highest weighted position in the Dow at 11%, but once its stock split, it immediately had much less influence on the Dow, as it dropped to the 18th highest weighted stock in the index. While a stock split obviously does not have any influence nor change the underlying value of a company (it just lowers the share price and increases the amount of shares outstanding), it does change the influence a company has within the price-weighted index it is part of.

3. The Index Committee has only five members, and uses a vague methodology for including a stock in the Dow

Discretion is an integral part of how indices are constituted, and the Dow is certainly no exception. Unlike the S&P 500, which has a long list of eligibility requirements that some big companies can’t meet, the Dow does not have hard-and-fast rules regarding how a stock gains entry to the index. It is not governed by quantitative rules, with S&P Global subjectively stating that “A stock is typically added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.”

Additionally, on the Dow’s Committee there are only two representatives from the Wall Street Journal and three from S&P Global. Given the cozy size of the Committee, the subjective nature of how the index is constructed, and the sheer size and financial importance of the Dow, any decisions to include or remove companies from the index impact trillions of dollars of investor funds, not to mention the potential retention of institutional investor clients by S&P Global. This can create conflicts of interest, or even opportunities for illegal activity and fraud. Don’t believe us? In September of 2020, James Yang, a member of the Index Committee, was charged with being part of an insider trading scheme leading to more than $900,000 in profits.

4. The Dow right now does not contain some of the largest and most dominant companies in the U.S. economy

Even though they represent well what has become the most dominant sector of the U.S. economy, three of the largest and most influential technology “titans” – Alphabet (formerly Google), Amazon, and Meta Platforms (formerly Facebook), are not part of the Dow. Why? See #2 above – their share prices are too high. While there is nothing fundamentally wrong with these companies, because of the Dow’s price weightings, they won’t be included in the index because they would swamp it due to their high share prices.

The only way the Dow would ever be able to accommodate any of these three stocks is if they went through a stock split, which makes zero sense, as does excluding companies from the Dow who clearly are excellent representatives of the overall United States economy just because their stock prices are too high.

The Dow has been around for 125 years, is not going anywhere, and continues to clearly be in the mind’s eye of investors. However, the four reasons listed above support our belief that it does not accurately represent the market, and just because the Dow right now is an old, familiar, and oft-quoted figure does not make it accurate, and it should not be used as a proxy for investors to gauge the health of our economy or to measure the progress (or lack thereof) of the stock market.

What’s Happening at TPW?

A big thank you and shout-out to two excellent Towerpoint Wealth clients, David Junod and Pauline Lhote, for the very generous and thoughtful sparkling wine holiday gift fromDomaine Chandon!

Now we just have to find an excuse to actually pop a bottle or two and enjoy, rather than just pretending! Cheers!

Team Photo with Chandon

Just last week, our President, Joseph Eschleman, CIMA®, earned his Certificate in Blockchain and Digital Assets (CBDA) from the Digital Assets Council of Financial Professionals.

The CBDA course is the only cryptocurrency certificate program designed specifically for financial professionals. Graduates of the program have gained the essential knowledge and understanding of blockchain and digital assets, better equipping them to provide investors the expertise and advice they need about this new and transformational asset class.

Click HERE to review exactly what Joe learned, and HERE to discuss with us how your portfolio might benefit by adding digital assets and cryptocurrency to it.

President, Joseph Eschleman, earned his Certificate in Blockchain and Digital Assets from the Digital Assets Council of Financial Professionals.
DACFP

TPW Taxes – 2022

2022 will assuredly be a different year than 2021, with income taxes no exception. Click the image below to access the 2022 Quick Tax Reference Guide, a practical resource providing a plethora of consolidated and easy-to-understand information to help you make sense of the complex and ever-evolving array of U.S. federal tax rules.

At Towerpoint Wealth, we recognize that income taxes are a “necessary evil” when helping you build and protect your wealth and net worth, but fortunately they can be planned for, managed, and oftentimes minimized!

Click HERE to read more about our “tax sensitivity” and philosophy towards reducing your obligation to Uncle Sam.

2022 Quick Tax Reference Guide

TPW News You Can Use

Useful and interesting content we read the past two weeks:

  1. Desperate No-Vaxxers Paying COVID-Positive People $150 for Dinner and COVID Infection – The Daily Beast – 1.12.2022

    A new vaccination mandate in Italy requires everyone over 50 to be vaccinated or pay a hefty fine. Some are opting to pay to get infected with COVID instead.
  2. The 2022 NFL Playoffs – Everything You Need to Know – com – 1.9.2022

    AFC, NFC, and Super Bowl 2022 schedule. Seedings. TV times, dates, locations. Find everything you need to know about the NFL playoffs here.
  3. Hillary 2024? Don’t Rule It Out – The New York Post – 1.12.2022

    Could a third time be the charm for Hillary Clinton? That’s the case made by two prominent Democrats who claim a “perfect storm” of President Biden’s plummeting job approval ratings, Vice President Kamala Harris’ own unpopularity, and the commander-in-chief’s advanced age could provide an opening for the former first lady and secretary of state.

Chart/ Infographic of the Week

After a 26.9% gain for the S&P 500 in 2021, many investors are hopeful that 2022 is another strong year for the markets. And while consistently and accurately predicting the future is next to impossible, the chart below from Morningstar gives hope to what the future may have in store for the market this year:

SP500 Chart

Quote of the Week

Staying positive and keeping a good attitude is key!

2022 Positivity Quote

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Towerpoint Wealth Sacramento Independent Financial Advisor

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

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The Top 5 Things We Will NOT Do in 2022! 12.29.2021

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If your inbox looks anything like ours right now, the last thing you need is a generic 2021 recap or a run-of-the-mill outlook for 2022!

Towerpoint Wealth Inbox

Never inclined to jump on a bandwagon, we’d like to offer you something a bit different, and with that being said, here is what we at Towerpoint Wealth will NOT do in 2022:

1. We will NOT glean our news from TV nor from social media

It takes a herculean effort to source truly objective and reliable news nowadays. And unfortunately, for the most part, stories we see and hear on TV do have some sort of slant or bias, that even extends to the numbers and statistics presented. Everything feels politicized, and it can be extremely difficult to separate fact from fiction, and/or opinion from objectivity.

68 percent news

Are you skeptical or trusting of the news media?

News Media Trust Sacramento Wealth Management

It obviously is important to recognize that news is negative by design, and that impressions and clicks are fast replacing television Nielsen ratings. And understanding that the fight for eyeballs (and concurrently, advertising revenue) is as intense as ever, negative stories have always sold.

What to do? Read the news, don’t watch it on TV. If you are liberal, read conservative sources. And if you are conservative, read liberal sources. Put differently, understand that completely unbiased reporting is challenging even for the most seasoned journalists; look for the whole picture, be mindful of having a “deep bench” of diverse and well-rounded news sources (click HERE for a good head start), and do not become pigeon-holed into only reading stories that feel right and feed into your belief system.

We value the importance of having convictions and opinions, but be disciplined enough to have opinions that are formulated from a solid foundation of quality information and sources. Read carefully, and trust cautiously.

2. We, and our clients, will NOT be misled by “lonely numbers”

“The world cannot be understood without numbers. But

the world cannot be understood with numbers alone.”

-Hans Rosling, Factfulness

Numbers and statistics can appear to offer support or even hard proof about a particular issue. However, without a larger context, they can be meaningless or even misleading. The world of wealth management, investing, and economics is awash in numbers and statistics, and we will continue to be mindful and think hard about how to help our clients appropriately interpret and find meaning in them.

Towerpoint Wealht Average Female Height Stocks and Goals numbers and statistics

Additionally, our clients expect us to be statistically literate, and we acknowledge and embrace the fact that part of our job is to figure out exactly what story the numbers tell, and why it matters. Data is an important tool for allocating capital, developing strategy, and making tactical decisions as circumstances change and evolve, but incomplete or incorrect data can muddy the waters and create a false sense of safety and a false sense of urgency (see number 3 below).

Click HERE and HERE to review two excellent sources about misleading graphs.

3. We will NOT lose perspective during this, or the next, crisis

Use of the word “crisis” in news stories may be at an all-time high, with reported crises involving:child-carecollege dropoutsimmigrationthe climateSudanhomelessnessrural healthcareScandinavian money launderingavocadosthe automotive industryIranMoldovaPakistanIsraeli baconTrump’s reelection prospects, and Canadian national unity.

Stocks and Goals numbers and statistics

At Towerpoint Wealth, we are attuned to reports, numbers and statistics, but never are we reactionary to the hour-by-hour developments in the economy and financial markets. In the case of a reported crisis, we encourage you to follow our lead. Take a deep breath before hitting the panic button, and try to consider a larger context. There is always a broader, longer-term narrative with every news story.

4. We will NOT take outsized risks in pursuit of outlandish growth

While we faithfully execute on the customized plans we establish in tandem with our clients to compound and grow their net worth and assets, we recognize that protecting that net worth is just as important as aggressively growing it and will only take calculated and justified risks.

The math behind “making up” for investment declines speaks for itself:

Investment Declines numbers and statistics

If you suffer a 50% loss, you will need to DOUBLE your money to get back to break-even!

Proverbs Quote Making Money

We are also quite mindful of the following:

The only thing people hate more than losing money is the person who lost it for them.

5. We will NOT lose confidence in the longer-term health of our country, our society, our government, the American economy and the American dream.

Some argue that the American Dream has become a nightmare. We vehemently disagree. No matter who we are or where we’re from or what we look like or who we love, the American Dream excludes no one. Our core values as a nation are not Republican nor Democrat, not conservative nor liberal, they are American ideologies. And as we head into 2022, we believe that Julian Castro’s quote sums it up well:

American Dream Castro

What’s Happening at TPW?

A rare photo of the Grinch (aka our Director of Operations, Lori Heppner), sneaking around on Christmas Day!

The Grinch Lori

Our Director of Research and Analytics, Nathan Billigmeier, took his son Ethan to his firstSacramento Kings game last week at the Golden1 Center. The Kings didn’t win, but both dad and son had a great time!

Kings Game

Don and Beth Parvin, two important Towerpoint Wealth clients, were in the office for a review meeting last week, and gifted a sweet throwback Christian Brothers High School winter jacket to our President, Joseph Eschleman, which, though our offices are heated, he just had to try on.

Happy Holidays, Don and Beth – thank you for your generosity!

Don and Beth Wealth Management

TPW News You Can Use

Useful and interesting content we read the past two weeks:

  1. I Got COVID Three Times 
    – BuzzFeed News – 12.23.2021

    Yes, you can get COVID twice, and even more. While this situation is incredibly rare, this is a story of a person who was directly exposed to the virus (or parts of it that trigger an immune reaction), five times. “My antibodies should be as jacked as an Instagram bodybuilder. But apparently, they’re not…”

  2. A-Rod Building Business Empire After Controversial MLB Career 
    – BNNBloomberg – 12.23.2021

    Alex Rodriguez had one of the most successful – and controversial – careers in Major League Baseball history. Now eligible for the Hall of Fame, the baseball world continues to weigh his lofty achievements against his sins. However, his goals in business have been as lofty as his athletic endeavors, and his ambitions are accelerating.

  3. Will Apple or Microsoft Hit $3 Trillion Next Year? 10 Tech Predictions for 2022 
    – SeekingAlpha – 12.24.2021

    Wall Street has started its annual “look-ahead” predictions for 2022, with Wedbush Securities Dan Ives predicting big growth in the NASDAQ, the metaverse, cybersecurity spending, and the cloud, along with a moderation in the microchip shortage.

Chart/Infographic of the Week

A great legend at Merrill Lynch for several decades, Bob Farrell had a front-row seat to the go-go markets of the late ‘60’s, mid ‘80’s, and late ‘90’s, as well as the brutal bear market of ’73-’74, and also the October of ’87 crash. He was a pioneer in investor sentiment studies and market psychology, and perhaps was most famous for his Ten Rules for Investing, which are still passed around on Wall Street today:

Quote of the Week

Having a strong disdain for the scientific pretensions and formal apparatus of modern economics, and despite his Harvard professorship, John Kenneth Galbraith was never really an economist in the ordinary sense. He believed that the math and numbers-crunching missed the point, and was a full believer in being careful not to fall prey to paralysis by analysis.

Quote of Week December 8 2021

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Towerpoint Wealth Sacramento Independent Financial Advisor

We enjoy social media, and are actively growing our online community!

Follow us on any of these platforms, message us there and let us know your favorite charity. We will happily donate $10 to it!

Click HERE to follow TPW on LinkedIn

Click HERE to follow TPW on Facebook

Click HERE to follow TPW on Instagram

Click HERE to follow TPW on Twitter

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Will You Pay More or Less? The Build Back Better Bill Tax Changes! 12.17.2021

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The Build Back Better Bill tax changes – do you stand to pay MORE, or less?

''Everybody has a plan until they get punched in the face.''

Will the Build Back Better bill tax changes translate to an unexpected de-facto holiday bonus, or instead, an unwelcome lump of coal? Read on to find out more!

While Build Back Better is a good marketing slogan, it is obviously important to unpack and better understand what this 2,135 page (click HERE to read the whole thing!), $1.75 trillion piece of spending and legislation might mean for YOU. What exactly are the key provisions of this signature bill, and importantly, will the proposed Build Back Better Bill tax changes cause you to pay MORE or LESS to Uncle Sam if the proposed legislation passes?

Days versus Decades. Decide which to focus on...

Let’s briefly “unpack” the Build Back Better Act, discuss which provisions are NOW being negotiated in the Senate, and importantly, evaluate the potential Build Back Better bill tax changes, and the tax consequences of what a final package might look like.

First, a brief background. The Build Back Better Act is the third and most economically significant part of President Biden’s Build Back Better Plan. Originally an immense $3.5 trillion social spending package, lawmakers in the House of Representatives have scrambled and negotiated over the past six months, finally ending up here – approving and sending to the Senate a “slimmed-down” (but hardly modest) $1.75 trillion (!) version of the plan. Now, the REAL debate and negotiations begin.

With two noteworthy holdouts…

Stick to your investment strategy - Do not turn temporary declines into permanent losses.

…Senate Democrats are mostly united in passing this major legislation, but haven’t yet been able to agree on what should be kept and what should be scrapped to obtain the two needed votes from the aforementioned holdouts. On the flip side, and unsurprisingly in today’s partisan political atmosphere, all 50 Senate Republicans are aligned against it.

Now, regardless of whether you are a Democrat or a Republican, and regardless of whether you agree or disagree with the need to pass this IMMENSE bill, at Towerpoint Wealth we believe that it is a when, and not an if, some version of this legislation ultimately DOES pass and become law, even if it isn’t until 2022. And while the final terms are obviously still unclear, the bill is proposing to make MAJOR changes to four main areas:

1. Social services and programs
2. Clean energy
3. Immigration
4. Build Back Better bill tax changes

And as Joe Manchin, Senator from West Virginia and one of the two Democratic holdouts who is squarely in the middle of this debate, said earlier about the bill, “We should be very careful what we do. We get any of these wrong, we’re in trouble.”

If you are interested in a deeper breakdown of the first three areas (as well as Build Back Better tax changes highlighted below), we encourage you to click the thumbnail below and watch our newly-produced educational video:

Today’s Trending Today is specifically focused on the proposed Build Back Better bill tax changes, which would raise a SIGNIFICANT amount of tax revenue from the very wealthy and corporations, and also offer a proposed tax cut for those who live in high income and mostly blue tax states.

The Congressional Budget Office (CBO) estimates the bill will cost a total of almost $1.7 trillion, and add $367 billion to the federal deficit over 10 years. Adding in $207 billion of revenue that is estimated to result from increased tax enforcement in the bill, and the net total increase to the deficit is projected to be $160 billion.

Originally, President Biden’s initial Build Back Better plan was to raise taxes on families earning more than $400,000/year, which would have overturned the Tax Cuts and Jobs Act passed in 2017. However, this provision was dropped in the final version of the bill passed by the House of Representatives on November 19, as holdout Democratic Senator Kyrsten Sinema of Arizonabalked at it, saying she wouldn’t accept any additional higher tax rates: not for individuals, not for capital gains, and not for corporations.

Instead, a significant and updated House-passed Build Back Better bill tax change imposes surtaxes on taxpayers with extremely high incomes. When would this surtax kick in? When adjusted gross income eclipses $10 million, a 5% surtax on income would be applied. Additionally, taxpayers would be subject to an additional 3% surtax on any income over $25 million. Clearly these proposed Build Back Better bill tax changes would only be punitive to very high income earners.

Something else to keep in mind – the new surtaxes applicable to the $10 million and $25 million adjusted gross income thresholds INCLUDES capital gains taxes. So, if you have owned highly appreciated securities (think Apple or Tesla or Amazon stock) for a long time, and then sell your shares and realize a large capital gain, that income is also included when calculating whether or not you would be subject to them.

Additionally, another major Build Back Better bill tax change would be to INCREASE the state and local income tax deduction, commonly known as the SALT deduction.

The SALT deduction is a tax deduction that allows taxpayers of high-tax states to deduct local tax payments on their federal tax returns. Before 2017, there was no limitation on the SALT deduction. However, under the Trump administration’s Tax Cuts and Jobs Act, the SALT deduction was CAPPED at $10,000. The Build Back Better bill tax change to SALT proposes a new INCREASED deduction limit of $80,000, benefitting wealthier residents of high-tax blue states like California, New Jersey, and New York.

This change would cost the government $229 billion in revenue, and was not part of Biden’s original BBB plan – it was added later in the House negotiations.

Backdoor Roth IRA conversions, a popular technique oftentimes used to fund a tax-free Roth IRA without being subject to the Roth IRA income limitations, would also be eliminated as another Build Back Better bill tax change.

And lastly, income recognized on cryptocurrency transactions would be subject to 1099 reporting by crypto brokers and custodians.

Here is a visual summary of the Build Back Better bill tax changes:

Head spinning yet? Obviously the myriad of proposed Build Back Better bill tax changes is a lot to keep track of. However, at Towerpoint Wealth, that is exactly what we continue to do on a regular basis.

Considered by some to be the most consequential economic legislation in the past 50 years, negotiations on the Build Back Better bill are far from over. And any tweaks to this massive legislation will then require another vote in the House. However, regardless of how and when this situation plays itself out, we feel it is safe to say that YOU WILL feel the effects of at least one component of the proposed Build Back Better bill tax changes, and encourage you to contact us (click HERE to do so) to have an objective conversation about how you will be positively or negatively affected by the tax changes you will personally see from this bill.

What’s Happening at TPW?

A huge thank you to Ascent Builders for the AMAZING holiday wreath, and perhaps an even better gift, the personal delivery from their esteemed controller, Patty McElwain (holding the wreath and standing next to our phenomenal Client Service Specialist, Michelle Venezia)!

Spreading cheer is an Ascent Builders specialty, and they are a firm we feel very fortunate to have such a long and productive partnership with.

Our President, Joseph Eschleman, spent some time earlier this month celebrating Christmas (yes, that is a Griswold Family Christmas t-shirt he is wearing!) with close Towerpoint Wealth friend and business partner, Niki Dawson. Niki is the President of TaylorMade Web Creations, and she is absolutely amazing if you have any web design and/or digital marketing needs!

Graph of the Week

Tesla’s market value is now more than General Motors, Ford, Volkswagen, and Mercedes-Benz, COMBINED!

The below chart indicates that electric vehicle sales will exceed gas-powered vehicles by 2040 – do you agree? Disagree? Click HERE and message us – let us know your opinion!

Cartoon of the Week

We came across this gem that provides a different and unique “take” capturing the essence of what perseverance means, and felt compelled to share!

Illustration of the Week

Surprisingly, in the wealth management industry, there are two different standards of care for clients:

  1. The fiduciary standard – a legal obligation requiring a financial advisor to act solely in a client’s best interest, 100% of the time, when offering personalized financial advice, counsel, and planning
  2. The suitability standard – a much lower legal hurdle to clear than fiduciary, not obligating a financial advisor to put their client’s best interests first, and instead only requires a reasonable belief that a recommendation is “suitable” for a client

While we believe that consumers and clients are harmed with the absence of a uniform fiduciary standard that applies to ALL financial professionals, this is the world we live in. A non-fiduciary is legally allowed to sell you a product or investment that pays the highest commission, as long as it is considered suitable.

Click HERE for a full list of the major Wall Street firms and banks. If you have an advisor who works for any of these firms, he or she is NOT a fiduciary to you. Conversely, if you are working with an advisor at a fully-independent, SEC-regulated investment advisory firm (such asTowerpoint Wealth), he or she IS a fiduciary to you!

Put differently…

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

We love social media, and are always actively growing our social media community!

Follow us on any of these platforms you use, and then message us with your favorite charity, and we will happily donate $10 to it!

Click HERE to follow TPW on LinkedIn

Click HERE to follow TPW on Facebook

Click HERE to follow TPW on Instagram

Click HERE to follow TPW on Twitter

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Is it Enough? 5 Steps to Retiring with 2 Million Dollars! 12.08.2021

Having a million very well may not cut it.

''Everybody has a plan until they get punched in the face.''

The stack above represents 100 packets, each containing 100 $100 bills.

This begs the question – Is retiring with 2 million dollars a reasonable goal? A 2020 survey from Schwab Retirement Plan Services found that the average worker expects to need roughly $1.9 million to retire comfortably.

Days versus Decades. Decide which to focus on...

So is $2 million the magic number?

There certainly are a myriad of moving parts involved in answering the question of whether retiring with 2 million dollars is enough, and a number of subjective and objective variables that need unpacking. The recent text thread between our President, Joseph Eschleman, and his wife, Megan, sums this concept up in a simple but perfect way:

Stick to your investment strategy - Do not turn temporary declines into permanent losses.

How pragmatic is it to consider retiring with 2 million dollars tucked away in your nest egg? Is retiring with two million dollars even enough money to truly be comfortable, especially considering today’s rampant inflation? Does retiring with 2 million dollars require that you work until you are 75 or 80 years old? And what do the nebulous and subjective concepts of “comfortable” and “retirement” even mean?

While they are tremendously important ideas (or perhaps abstractions) to define when answering the question of whether retiring with 2 million dollars is “doable” (and is enough money), we will reserve opining on what “comfortable” and “retirement” means to the intimate conversations we have with each of our current and prospective clients. Needless to say, different people define these two terms very differently. Instead, let us explore five specific steps that will put accumulating 2 million dollars within reach for you, while leaving yourself enough time in retirement to actually enjoy and spend some of it! And no, playing and winning the lottery is not one of the steps…

Step 1 – Don’t Wait, Start Investing NOW!

The fastest path to retiring with 2 million dollars, in our opinion? Drop everything, stop reading this newsletter (!), establish a plan to begin investing, and immediately begin to pay yourself first. Right now! As you can see below, the sooner you start, the more time your assets have to compound and grow:

And if you already are proactively saving and investing, stop reading this newsletter (!), drop everything, and make an incremental increase to the dollar amount, or percentage, or both, that you consistently add to your nest egg. When it comes to retiring with 2 million dollars, time is money, and the sooner you start to invest, and the more consistently you do so, the easier it will be to hit this very achievable goal.

Step 2 – Properly Diversify Your Investment Portfolio, and Be Wary of Individual Stocks!

The idea of diversification is basic yet essential to most investors. Unless you are truly willing to lose everything, do not put all of your eggs into only one or two baskets. Protecting against the risk of “significant shrinkage” of your retirement nest egg is critical; it is important (we argue essential) to allocate your resources and investments over a broad spectrum of asset classes and sectors:

Being diversified does not assure a profit nor guarantee against a loss, but it does help to insulate your retirement nest egg against major market declines. Retiring with 2 million dollars is a lofty goal, and the importance of managing your downside should be as much of a priority as consistently growing your portfolio. Adding additional types of assets to a portfolio will help it last longer, and help you avoid major pitfalls in your journey towards a financially-independent retirement.

Additionally, we believe it is important to exercise extreme caution when considering investing in individual stocks. While it can be fun and “sexy” to own specific companies, investing is not meant to be fun nor sexy. Do not confuse speculation with investing.

Chase individual stocks at your own risk. Individual equity ownership oftentimes becomes a short-term bet – even an outright gamble – which is the antitheses to a longer-term strategy geared to helping you retire with $2 million. While all investing involves risk, this risk materially increases when focusing on or owning just a few stocks. The statistics bear this out:

Source: Morningstar, 12/31/2020

History is replete with examples of blue-chip companies that have crumbled miserably, and correctly picking a long-lasting, top-performing stock is usually a product of blind luck rather than skill. Don’t be overconfident in either your acumen to evaluate the investment merits of a single company or stock, your ability to consistently predict the future, nor your ability to consistently guess correctly which individual equities might outperform.

A little boring? Perhaps. But being boring and disciplined in how you grow, protect, and diversify your nest egg, is an excellent way to improve your odds of successfully retiring with 2 million dollars.

Step 3 – Take Advantage of FREE MONEY

We believe that there is no EASIER way to compound your wealth and improve your odds of retiring with 2 million dollars than by fully understanding, and then maximizing all employer matching program opportunities within your company sponsored retirement plan:

If your employer offers a match, be sure to find out the following:

  • Is there a waiting period until you are eligible for it? Common waiting periods are six months, twelve months, or sometimes no waiting period
  • What is the actual formula your employer uses to compute their match? Put differently, what percentage of your own contributions will your employer match? $0.50 on the dollar? Dollar for dollar? Up to what maximum of your contributions?
  • How much do you have to contribute to qualify for the match? Oftentimes, you have to contribute a minimum amount of your pay into your company-sponsored retirement plan in order to receive the maximum match, which hopefully is not a problem in your pursuit of retiring with 2 million dollars…!
  • When do the company matching contributions vest? Put differently, how long do you have to wait, or work for your employer, before the company’s matching contributions are 100% yours to keep?

Another form of FREE MONEY that employers may offer is a profit sharing plan, in which employers give workers a portion of the company’s profits in the form of pre-tax cash contributions to an employee retirement account.

Regardless of what the rules are, or in what form the FREE MONEY is packaged, if your employer makes available matching contributions and/or profit sharing, taking full advantage of it makes retiring with 2 million dollars that much easier.

Step 4 – Don’t Panic When the Market Declines

A market decline of 10% or more is also known as a correction. And they happen regularly. How regularly? On average, once a year!

If you are able to develop and cultivate a mindset that allows you to anticipate, perhaps even expect, a market correction (decline) to happen, you will be much less inclined to hurt yourself by getting scared, hitting the panic button and selling low to “stop the bleeding.” Don’t kid yourself, this happens, regularly, even to investors who posture as “disciplined,” “objective,” and “unemotional.”

Want to improve your probability of retiring with 2 million dollars? Be smarter than your neighbor, know that declines happen, and that there will be years when you have less money on December 31 than you did on January 1. It is never fun, and can even be be outright painful, to experience a year-over-year decline in the value of your overall net worth, but enduring these periods is absolutely necessary. Fortunately, history has continually proven and strongly suggests that the odds are in your favor, especially if you have a little bit of time to patiently wait for the recovery to occur:

Who summarized this concept best? We are torn. Please click HERE and vote for your favorite!

I.     The legendary investor Peter Lynch:

II.     The legendary investor Shelby Davis:

III.     The legendary investor Warren Buffett:

Step 5 – Trust in America, and Own Real Estate

Stocks, bonds, and mutual funds are wonderful investment vehicles, and are excellent tools to build wealth. However, like any investment vehicle, they have their drawbacks – namely, they can be volatile, tax inefficient, intangible, and expensive to leverage. Contemporaneously, real estate is a wonderful investment vehicle to build and accumulate wealth, for reasons similar to stock/bond/mutual fund ownership, and also for a number of reasons that are quite different.

Real estate values, like the stock market, predictably increase over time. This long-term growth is representative of the value continually created by the advancements in our standard of living and in our economic productivity, both here in America and globally.

The growth in the value of stocks, bonds, and real estate is directly correlated to the continued growth of our gross domestic product, or GDP.

Put differently, and we would argue much more eloquently, by Warren Buffett:

“The American miracle, the American magic has always prevailed, and

it will do so again. Nothing can basically stop America.

Don’t let the negativity of today’s 24/7 news cycle (in which bad news sells!), sway your opinion – we live in an amazing place, in an amazing point in time. Please click below for an excellent 1-minute video of Warren supporting his opinion, shot on May 2, 2020, just months after the coronavirus shock began:

Let’s look closer at two main reasons to own real estate:

1. Income tax benefits

When insidious income taxes are avoided or deferred, retiring with 2 million dollars becomes much easier, as compounding the growth of your overall investment portfolio occurs much more quickly when Uncle Sam is not taking a big bite out of your nest egg. Consider:

Income tax breaks and deductions. There are a myriad of tax breaks and deductions potentially available to real estate investors that are not available to those who invest in stocks, bonds, and mutual funds. Deductions of the expenses associated with owning real estate (property taxes, property insurance, mortgage interest, property management fees, maintenance and repair costs, advertising, legal and accounting fees) are oftentimes tax deductible, as is depreciation.

Section 1031 tax-free exchanges. A 1031 exchange allows an investor to do a tax-free swap, or exchange, of one investment property for another one, while deferring the payment of capital gains taxes on the transactions. Unfortunately, “1031s” are not allowable nor applicable to the sale of traditional stocks, bonds, nor mutual funds.

Capital gains tax exemption on the sale of a primary residence. If you are single, you will pay no capital gains tax on the first $250,000 of profit on the sale of your primary residence; married couples are entitled to a full $500,000 exemption. And while this $250K/$500K exemption is allowable only once every two years, it is a very powerful way to have more of your money compoundwithout paying Uncle Sam, as you pursue the goal of retiring with 2 million dollars. Additionally, many people consider moving and downsizing their primary residence as they enter into retirement, which can potentially unlock significant equity that can then be added to your retirement nest egg.

2. Leverage

While all-cash transactions have recently become more popular in today’s red-hot and competitive real estate market, the most common way to buy real estate continues to be by borrowing money to do so. This is also known as leverage. While it can be a double-edged sword (problems can quickly arise if property values decline, too much money is borrowed, or the interest paid on borrowed funds is too high), leverage provides a wonderful opportunity to own MORE of an asset for less money, expanding your potential to see your nest egg grow.

The simplest example of leverage is the down payment “obligation” when purchasing a primary residence. You typically only have to put down, 20% of the cash to buy and own100% of the asset! And while the borrowing and down payment terms may not be quite as favorable, the same leverage opportunity holds true when buying and owning investment real estate. In today’s ultra-low interest rate environment, larger amounts of money can be borrowed more cheaply (read: at lower interest rates), affording investors additional leverage when building and growing their overall net worth. This can be quite helpful in accomplishing the goal of retiring with 2 million dollars!

Bonus Step – AFTER You Have Retired with 2 Million Dollars – Pick the Right Place to Retire

Clearly, maximizing your lifestyle post-retirement requires attention to the cost of living. Stretching a dollar is always important, and retiring with 2 million dollars “buys” you options, specifically, on where you choose to live.

Click the thumbnail below for the ThinkAdvisor.com slideshow that focuses on the 8 Best U.S. Cities for Retirement Over the Past 5 Years:

It is important to note that accumulating enough money is only Act One when determining whether retiring on $2 million is feasible. Figuring out how to properly, and sustainably, withdraw money (AKA decumulate) from your nest egg is Act Two, and is just as, if not more important to get right. A way-too-simplified back-of-the-envelope computation might look like this:

  • $2,000,000 nest egg x 3.5% annual withdrawal rate = $70,000/year
  • $70,000/year – 25% in assumed federal and state income taxes = $52,500/year net retirement income, or $4,375/month

Information is intended to be general in nature, for simplistic illustrative purposes only, and is not intended to serve as Investment

advice, since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances.

However, there are a myriad of additional variables and considerations that factor into this “retirement calculus.” What about pensions? Inflation? Social Security? Income from part-time work? Variability in market growth and investment returns? Appropriateness and sustainability of a 3.5% annual withdrawal rate? Increases in health care and insurance expenses as you age? Legacy and philanthropic planning and objectives? The list of important and yet very subjective considerations goes on and on. When developing a customized retirement income plan, the nuance in working through and deciphering each consideration cannot be understated.

Is retiring with 2 million dollars doable? Is $2 million enough to be happy and comfortable? As our President communicated to his wife, “it depends ,” and without a much deeper analysis of the variables mentioned above, it can be very difficult to accurately answer. However, what we can say with confidence is that if you have, or have nearly, accumulated $2 million for retirement, you have an excellent head start, and have probably secured yourself many attractive options. In our opinion, wealth is not defined by a set amount of dollars, but by the freedom it affords you. And having options and choices on how to live your life is the essence of what freedom, and retirement, truly is.

What’s Happening at TPW?

When the cat’s away, the mice will play!

A happy Towerpoint Wealth family (minus President, Joseph Eschleman) enjoyed a pre-Thanksgiving lunch (complete with oysters) together at Camden Spit & Larder in downtown Sacramento!

Our President spent his Thanksgiving week in Surf City, USA (AKA Huntington Beach, CA), where he enjoyed a successful day of deep sea fishing. That’s a California scorpionfish on Joseph’s line – don’t touch those dorsal spines, they are very poisonous!

While our entire TPW family was out of the office on the Friday after Thanksgiving, we were all still working (with some help from the little ones!) in our respective WFH offices!

Chart / Infograph of the Week

Inflation is no longer being called “transitory” and is now here more permanently, according to Federal Reserve chairman, Jerome Powell.

Thanks to Visual Capitalist for the infographic below. Understanding that it has been virtually impossible to avoid, please reply to this email and let us know what recent purchase you’ve made where you have specifically noticed today’s inflationary pressures.

Quote of the Week

In the spirit of the Thanksgiving holiday, we enjoyed American Trappist monk, writer, theologian, mystic, poet, social activist, and scholar Thomas Merton’s quote below…

Cartoon of the Week

A snarky and insightful cartoon from Real Life Adventures, roasts not only how buying high and selling low is an all-too-common problem, but also how novice investors lose money and disciplined investors make money during a market panic.

Ah, the folly of the investing world…

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Download Newsletter Towerpoint Wealth

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

We love social media, and are always actively growing our social media community!

Follow us on any of these platforms you use, and then message us with your favorite charity, and we will happily donate $10 to it!

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Are You In Awe of Your Advisor’s Sharp Saw? 11.19.2021

According to a 2021 survey conducted by The Harris Poll, about 26% of Americans say their most trusted source for financial advice is a financial advisor, representing an 18% increase from 2020.

With a direct correlation to the shakeup and uncertainties caused by the COVID-19 pandemic, and the highly unsettled nature of the U.S. economy, financial markets, and politics still existing today, it comes as little surprise to see this increasing trust and confidence in the counsel of financial advisors.

Conversely, it is also interesting to note that the most trusted source of financial advice known as “Yourself” experienced a 33% drop (!) from 30% in 2020 to 20% in 2021.

Ask virtually any financial advisor: The data presented above supports the anecdotal evidence – during periods of high volatility and uncertainty, people tend to become uncertain and trust themselves less when it comes to their finances and investing. Conversely, in periods of low volatility, rising markets, and higher (perceived) certainty, people become overconfident. Or, illustrated differently:

Why do investors feel smarter and more confident when the markets are rising, and dumber and less confident when the markets are declining? One word: emotions. At Towerpoint Wealth, we believe that one of the central qualities of a skilled financial advisor is the ability to help their clients remain objective, avoid overconfidence, or, on the flip side, depression and hopelessness.

There are more than 275,000 licensed professionals in the United States right now that have “Financial Advisor” (or some derivation thereof) on their business card, according to the Bureau of Labor Statistics. And as is true of many professions, there are a myriad of makes, models, specializations, and niches that these advisors fall into. Additionally, these 275K financial advisors represent a varying cross-section of experience, planning, knowledge, and service.

A core philosophy here at Towerpoint Wealth has always been to focus on and place energy into the professional growth and development of our advisors. Our clients deserve and expect us to not only stay sharp in regards to current economic, financial, and investment trends and developments, but also to consistently be “sharpening our professional saws” in the areas of practice management, behavioral finance, client service, and leadership.

To that end, our President, Joseph Eschleman, our Partner, Wealth Advisor, Jonathan LaTurner, and our Director of Research and Analytics, Nathan Billigmeier, traveled to Music City last week for a three-day Investments Forum, hosted by Dynasty Financial Partners. The venue, the lineup of talent, and the level of content were truly amazing, and the TPW colleagues spent an enriching and enjoyable three days sharpening their professional saws at the conference.

The highlights included:

Click the thumbnail below to see the full agenda of speakers, activities, and content that, in addition to some Music City fun during the evenings, kept Joseph, Jonathan, and Nathan moving for three days!!

Steve Case

Photo boxes, clockwise from upper left: 1.) Jim Nantz 2.) Joseph, Nathan, Jonathan at Loser’s Bar and Grill in Nashville 3.) Howard Marks, Daymond John, Liz Ann Sonders

New Towerpoint Wealth White Paper

After focusing on the topic in our 11.9.2021 edition of Trending Today, our Director of Tax and Financial Planning, Steve Pitchford, authored and published the below white paper, focusing on THREE key ideas to potentially reduce the tax “sting” associated with IRA and other tax-deferred retirement account required minimum distributions (RMDs).

Click the thumbnail below to download and read this brand-new report!

Video of the Week

Our President, Joseph Eschleman, CIMA®, was the featured guest on Laurel Sagen and Shasta Escalante’s Heart 2 Biz podcast earlier this month.

Heart 2 Biz is a weekly podcast focused on local Sacramento professionals and entrepreneurs who “pour their hearts into their businesses.” Focused on finding out not only how people are building and running their businesses, but how they are doing so with integrity and heart.

Click below to watch the podcast, and to hear Joseph’s story of how the permanent Pennsylvania-to-California cross-country adventure he took in 1999 helped to shape his heart and him as a person; and, how his evolution from employee to business owner and entrepreneur has molded his character and overall outlook on life. It’s a great (and crazy!) story with plenty of interesting twists and turns, confirming what virtually every Towerpoint Wealth client already knows to be true – that the energy Joseph pours into his client partnerships and into Towerpoint Wealth has a foundation based on both integrity and on heart!

What’s Happening at TPW?

The ladies of Towerpoint Wealth (our Client Service Specialist, Michelle Venezia, and our Director of Operations, Lori Heppner) enjoyed a nice lunch together earlier this week at Il Fornaio in downtown Sacramento, right here on Capitol Mall!

In Denver this past Sunday with two friends, our President, Joseph Eschleman, enjoyed watching his favorite football team, thePhiladelphia Eagles, dismantle the hometown Broncos30-13!

A happy moment for our Director of Tax and Financial Planning, Steve Pitchford, our Director of Operations, Lori Heppner, and our Director of Research and Analytics, Nathan Billigmeier.

Charts of the Week

Rivian (Nasdaq: RIVN), the newly-public electric vehicle automaker (backed by Amazon) hit a market capitalization of $100 billion earlier this week – and they haven’t (yet) delivered a single vehicle! This is the largest U.S. IPO since 2014, when Alibaba went public, and makes the company bigger than both GM and Ford.

In the eyes of many investors and market pundits, this further cements the idea that traditional automobiles and automobile manufacturers are going the way of the dodo:

Quote of the Week

Excellent philosophy from IBM’s long-time chairman and CEO,Thomas J. Watson

Cartoon of the Week

In the spirit of what we discussed above about investor (over) confidence, the below cartoon thoughtfully illustrates one of Warren Buffett’s famous quotes:

“You need to divorce your mind from the crowd.”

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Download Newsletter Towerpoint Wealth

We love social media, and are always actively growing our social media community!

Follow us on any of these platforms you use, and then message us with your favorite charity, and we will happily donate $10 to it!

Click HERE to follow TPW on LinkedIn

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Tax Saving Solutions for Required Minimum Distributions 11.05.2021

How would you like to be FORCED to take extra, unwanted, and unnecessary taxable income that would ADD TO your taxable income for the year and potentially catapult yourself into a higher income tax bracket?

If you are 72 or older and own an IRA or tax-deferred retirement account and receive required minimum distributions (RMDs), this may be happening to you every single year. If you are not yet 72, take this as fair warning – you have time to plan and put some tax saving solutions in place!

Towerpoint Wealth | Sacramento Financial Advisor near me | Money Bucket Tax Saving Solutions

Many individuals know well enough that RMD taxes are a “necessary evil” of contributing to, and investing in, retirement accounts such as 401(k)s, IRAs, 403(b)s, etc. However, what investors often fail to realize is that there are impactful and proactive tax planning strategies that can materially lessen the sting of these RMD taxes.

Towerpoint Wealth | Sacramento Financial Advisor | Keep Your Money-Tax Saving Solutions Required Minimum Distributions

As discussed below, short of enacting a QCD every year for the full amount of your RMD (do the acronyms have your head spinning yet??!!), there is no way to outright avoid paying income taxes on your IRA and retirement account RMDs. However, at Towerpoint Wealth, we are proactive in working with our clients to reduce the pain associated with RMD taxes if and when possible, usually utilizing one or more of the following three planning opportunities, each of which can help:

Tax Saving Solutions

1. Accelerate IRA withdrawals

We get it, as this sounds counterintuitive. Take more money out to save on taxes?? The short answer – yes.

Subject to certain exceptions, age 59 ½ is the first year in which an individual is able to take a distribution from a qualified retirement plan without being subject to a 10% early withdrawal tax penalty.

Consequently, the window of time between age 59 ½ and age 72 becomes an important one for proactive RMD tax planning. By strategically taking distributions from pre-tax qualified retirement accounts between these ages, an individual may be able to lessen their overall lifetime tax liability by reducing future RMDs (and the risk that RMDs may push them into a higher tax bracket) by reducing the retirement account balance.

This strategy becomes particularly opportune for an individual that has retired before age 72, as it often affords the individual the ability to take these taxable distributions in a uniquely low income (and lower income tax) period of time.

2. Execute a Roth conversion

Roth conversion is a retirement and tax planning strategy whereby an individual transfers, or “converts,” some or all of their pre-tax qualified retirement plan assets from a Traditional IRA into a tax-free Roth IRA.

While ordinary income taxes are owed on any amounts of tax-deferred contributions and earnings that are converted, a Roth conversion, when utilized properly, is a powerful tax planning strategy to reduce a future IRA RMD, and concurrently, RMD taxes, as Roth assets are not subject to required minimum distributions since they generate no tax revenue for the government. Further, Roth conversions also 1) maximize the tax-free growth within a taxpayer’s investment portfolio, 2) provide a hedge against possible future tax rate increase (as Roth retirement accounts are tax-free), and 3) leave a greater tax-free financial legacy to heirs.

Towerpoint Wealth | Sacramento Financial Planner | Graph Tax Savings Solutions

3. Use the IRA RMD to make Qualified Charitable Distributions (QCDs)

When an individual becomes subject to an IRA RMD, in lieu of having the IRA distributions go to them, they may consider facilitating a direct transfer from their IRA to one, or more, 501(c)3 charitable organizations (up to $100K annually). This is known as a Qualified Charitable Distribution (QCD).

As long as these distributions are made directly to the charity, they 1) satisfy the RMD and 2) are excluded from taxable income.

This strategy, when executed property, results in a dollar-for-dollar income reduction compared to a “normal” RMD.

Towerpoint Wealth | Sacramento Wealth Management | Charitable Giving Required Minimum Distributions

Fortunately or unfortunately, there is no magic bullet nor panacea when it comes to RMD taxes and the income tax obligation you will have when taking RMDs. However, we feel that you still have an obligation to be aware and/or mindful of the planning opportunities mentioned above, as potentially reducing your income tax liability is certainly better than paying “full boat” every year!

Video of the Week

As a follow up to the subject focus of our most recent 10.15.2021 Trending Today newsletter, click the thumbnail below to watch the educational video we just produced last week, featuring our President, Joseph Eschleman, as he discusses the THREE key ingredients that are crucial when working to successfully build and protect your wealth, and SEVEN specific long-term investing strategies and philosophies that need to be developed and internalized if you truly want to be a successful long-term investor.

What’s Happening at TPW?

We love and are proud of the work hard, play hard culture we have built here at Towerpoint Wealth, and in the spirit of that philosophy, the TPW family took a ½ day “Teambuilding Tuesday” earlier this week, enjoying lunch together at The Station Public House in Auburn, followed by fun and games (literally!) at Knee Deep Brewing Company!

Towerpoint Wealth Family Lori Steve Michelle
Towerpoint Wealth Family Michelle
Towerpoint Wealth Family

Our President, Joseph Eschleman, gave two (!) pints of A- last week, with a “Power Red” blood donation at the American Red Cross in Sacramento.

Graph of the Week

There are just under two months left in the year, and from strictly a seasonal perspective, November and December have historically been two of the better months on the calendar. The chart below shows the S&P 500’s performance during the last two months of the year in the post-WWII period. Overall, the median performance has been a gain of +3.72%, with positive returns just over three-quarters of the time (76.3%).

Towerpoint Wealth | Sacramento Independent Financial Planner | Graph of the Week November 5, 2021

The S&P 500’s 22.6% gain this year is the strongest year-to-date reading through October since 2013. 2021 is just the tenth year since 1928 where the S&P 500 has been up more than 20% YTD through October. In the chart above we have highlighted each of those years in dark blue.

Quote of the Week

It is easy to be an investor when things are relatively “normal” and calm; it becomes much more difficult to be disciplined and stay objective when things get crazy…

Trending Today | Quote of the Week November 5, 2021

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Click here to Download

Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Towerpoint Wealth Sacramento Independent Financial Advisor

We think social media is fun, and are always actively growing our social media community!

Follow us on any of these platforms you use, and then message us
with your favorite charity, and we will happily donate $10 to it!

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No No, I Really AM a Long-Term Investor! 10.15.2021

“I’m definitely a long-term investor.”

“I don’t get worried about the negative news headlines.”

“Declines happen – I get it.”

We have heard these lines uttered by the most well-intentioned and intelligent investors time and time again. Sometimes, they hold true to their word. Sometimes, the polar opposite. Saying you are a long-term investor is easy; behaving like a long-term investor is much more difficult, as this is clearly easier said than done. 

Put differently, as the great boxer Mike Tyson said: 

Mike Tyson

When things are relatively “normal,” investing seems easy. However, when things get (pick your favorite adjective): crazy, volatile, unbelievable, explosive, unpredictable, turbulent, harrowing, and/or unsettling, it becomes much more difficult to tolerate, endure, and absorb a major body blow to your “nest egg” (read: a consequential drop in value). Watching your money SHRINK can be a very emotional and traumatizing experience. And while there is no perfect recipe for becoming a successful long-term investor, at Towerpoint Wealth we believe it all starts with three basic ingredients: 

  1. Consistent objectivity
  2. Measured behavior
  3. Disciplined thinking and execution

In addition to the inherently emotional nature of money, there are a myriad of uncontrollable variables populating the external environment we live in: The movements of the stock market. The vicissitudes of the US and global economy. The fickle nature of the political winds. Increases and declines in interest rates, income taxes, and inflation. Just a few examples from a very lengthy list of items that are out of our control. And while it is human nature for us to think (even to outright believe) that we have some control over many of these things, the truth is, if we want to truly be a successful long-term investor, we must recognize and accept the things we do not control.

At Towerpoint Wealth, we believe that the most successful long-term investors and wealth-creators have a somewhat-unique capability, a skill, that allows them to maintain appropriate perspective, to exhibit a high degree of humility, and to be laser-focused on the bigger picture. Fortunately, this is a skill that can be coached, cultivated, and learned, and is something that we have a relatively high degree of control over.

Long-Term Investor

Investment Strategy

Let’s make this more tangible – below are seven key principles that, at Towerpoint Wealth, we believe are necessary to be a successful long-term investor:

  1. Be humble, be aware of, and accept, things that are out of your control
  2. Keep your emotions in check, and be acutely self-aware of the fear and greed that we may feel when considering our finances and investments, especially in periods of extremes
  3. Plan to live a long life, which we do have some control over!
  4. Einstein was right: The power of compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays
  5. Volatility should be expected, embraced, and taken advantage of, not feared nor averted
  6. Unless you have the unique ability to consistently AND accurately predict the futurestay properly invested and diversified, regardless of what you believe may happen in the market and in the economy
  7. Have a plan and a strategy, and be disciplined in sticking to it, regardless of the things you have no control over
Investment Strategy

In opining about what we believe it takes to be a successful long-term investor, we would be remiss if we did not directly integrate Warren Buffett’s (aka the “Oracle of Omaha”) wisdom on this subject into this newsletter. Please click below to watch an excellent YouTube video, featuring a 2016 CNBC interview of Warren, where he outlines his FIVE best tips for successful long-term investors:

Do you have a plan to properly manage and coordinate all of your financial affairs and a strategy to grow and protect your wealth and investment portfolio, even during turbulent times?

If so, are you being disciplined in consistently following it? If you have concerns, or simply would like to discuss how you can apply the long-term investment principles discussed above, we welcome having a conversation with you. Click HERE to message us, as we regularly have no-strings-attached conversations about these issues, and are happy to be an objective resource for you as you begin to consider your personal and financial circumstances further.

What’s Happening at TPW?

Nathan P. Billigmeier Director of Research and Analytics

Our Director of Research and Analytics, Nathan Billigmeier, took last Friday off to spend time in Wheatland, CA at Bishop’s Pumpkin Farm with his two boys, Ethan and Grayson, specifically helping Grayson celebrate his 2nd birthday!

Philly cheesesteak

Our President, Joseph Eschleman, devouring a Philly cheesesteak (the only way a cheesesteak should be ordered, a “wiz, wit”) before jumping on a flight back to Sacramento earlier this month. Fuhgeddaboudit if you think you will find a better cheesesteak than Pat’s!

Graph of the Week

Yikes – inflation is at a 13 year high!

If you have any exposure to bonds in your portfolio, we strongly feel that it is time to take a hard look at:

How you are allocated within bonds

Your exposure to interest rate fluctuations (specifically, to rates going UP) due to inflation

Whether the risk you are taking is appropriate for your set of unique personal and financial circumstances

At Towerpoint Wealth, we have been successfully modeling what the value of a client’s portfolio would look like if interest rates INCREASE by ½, 1, or even 1 ½% over the next year or two. Message us by clicking HERE if you would like this custom analysis done for you.

Inflation Hits 2021

Cartoon of the Week

Issues with global supply chains will impact the holiday season…

Cartoon long term investor

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Click here to Download

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

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Long Term Investing Tips

Twenty Tips for No-Nonsense Investing

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Will Your Portfolio Fall to Pieces Due to Federal Income Tax Increases? 10.01.2021

Lots of talk. Lots of posturing. Lots of sound bites. But not a lot of action (so far, at least). A familiar refrain? It is, when it comes to our elected officials in Washington D.C.

washington gridlock Bipartisan Infrastructure Bill Summary

In today’s Trending Today newsletter, we are going to explore the $1.2 trillion bipartisan infrastructure bill, the $3.5 trillion infrastructure plan details, and, perhaps most importantly to investors, the potential federal income tax increases that may occur if and when either, or both, of these massive bills become law.


Legislators are taking a two-step approach in their efforts to pass President Biden’s ambitious jobs and infrastructure program, some provisions being Republican-friendly, and some Democrat-friendly. This two-track plan to pass this legislation works as follows: Put the GOP-friendly items in a $1.2 trillion bipartisan infrastructure bill that could pass on a bipartisan basis, and then put the rest in a much larger $3.5 trillion infrastructure bill that would attempt to pass on a party-line vote, via what is known as budget reconciliation, which only requires a simple majority to pass it.


The $1.2 trillion bipartisan infrastructure bill, known as the Infrastructure Investment and Jobs Act, already passed the Senate by a vote of 69-30 on August 10. Many people have asked: “What is the bipartisan infrastructure bill, and what’s in it?” Focusing on the traditional definition of infrastructure, the bill focuses on roads, bridges, rail, and water. It is truly a monumental measure, with an equally monumental 13 digit price tag!

What’s in the bipartisan infrastructure bill?

what is the bipartisan infrastructure bill

However, the bipartisan infrastructure bill cannot become law until it also passes the House of Representatives, and that is where things begin to become tricky.

Nancy Pelosi Federal Income Tax Increases

Speaker of the House Nancy Pelosi promised that the House would vote on the $1.2 trillion bipartisan infrastructure bill yesterday, but that vote was again delayed. The problem? Pelosi faces pressure from progressive Democrats, who say they will not support the “skinny” $1.2 trillion bipartisan infrastructure bill unless the much bigger $3.5 trillion infrastructure bill, focusing on human infrastructure and social spending such as climate change mitigation, increased child care funding, and health care expansions, also moves ahead.

We truly feel it is amazing that we live in a world where spending $1.2 trillion on a bipartisan infrastructure bill is considered “skinny,” but it is when compared to the $3.5 trillion infrastructure bill!

Financing such social programs as universal pre-kindergarten, extended childcare, and expansion of health insurance coverage provided under Obamacare, the $3.5 trillion infrastructure bill, known as the American Families Plan (AFP), it represents the largest expansion of federal spending since the New Deal. And, with this enormous price tag comes the concurrent federal income tax increases to fund it. Here are the potential “highlights”:

  • Federal income tax increases – the AFP will restore the 39.6% pre-Trump, pre-Tax Cuts and Jobs Act marginal ordinary income tax rate. This current marginal rate is 37%.
  • Multimillionaire excise tax – the AFP places a 3% excise tax on income in excess of $5 million
  • Higher corporate tax rates – the corporate tax rate is set to increase form 21% to 26.5%, with a new minimum tax of 16.5% on offshore earnings
  • Higher capital gains tax rates – the federal marginal capital gains tax rate for those with incomes higher than $400,000 will increase from 20% to 25%, and will be retroactive to September 13, 2021

And the less-likely but still possible proposals:

Additionally, the following indirect federal income tax increases are in the crosshairs:

  • Elimination of Roth IRA conversions for taxpayers filing jointly with incomes over $450,000, and for single taxpayers with incomes over $400,000
  • Elimination of “Backdoor” Roth IRA contributions, banned for ALL income levels
  • Mandatory taxable drawdowns of large IRAs – contributions to IRAs that have a total value of $10 million or more would be prohibited, IRAs and 401(k)s in excess of $10 million will have required minimum distributions of half of the amount over $10MM, and for retirement accounts over $20 million, everything over $20MM must be distributed immediately

Federal Income Tax Increases Explained

Still confused? Have more questions? Hungry for clear answers? Found below is a simple educational video we just produced, designed to break down the complicated topic of the $1.2 trillion bipartisan infrastructure bill, the $3.5 trillion infrastructure plan details, and the concurrent federal income tax increases that may occur, all specifically arranged in a digestible and easy-to-understand format.

Click HERE to watch the video!

Federal Income Tax Increases Explained

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Towerpoint Wealth on YouTube!

Importantly, and regardless of how things shake out, at Towerpoint Wealth we sincerely believe three things:

  1. Taxes will be higher over the next few years, perhaps as early as January of 2022, and perhaps significantly for higher income earners
  2. It is very reasonable to assume that this infrastructure legislation, in one way, shape, or form, will become law, and that trillions of dollars will soon be spent by our Federal government
  3. The next three months represent the most important tax planning months in recent years, as potential federal income tax increases mentioned above could be effective as soon as 1/1/2022

These tax planning opportunities include:

  • Accelerate income into THIS YEAR, and defer tax deductions into future tax years, to leverage today’s low income tax rates and minimize tomorrow’s potential Federal income tax increases
  • Utilize a partial, or even full, Roth IRA conversion in 2021, for the same reason mentioned directly above
  • Evaluate gifting strategies, such as the utilization of a donor advised fund (DAF), to accelerate (or “bunch”) your charitable contributions to hurdle the standard deduction in 2021

Have a plan, and if you don’t, we encourage you to click HERE to message us and begin to discuss your circumstances further. With the high probability of federal income tax increases occurring in the near future, time is of the essence!

What’s Happening at TPW?

Our always-photogenic Director of Research and Analytics, Nathan Billigmeier, and his beautiful wife Jessica, post together prior to heading into the brand new Safe Credit Union Performing Arts Center in downtown Sacramento to see a stellar performance of Hamilton!

Nathan Billigmeier Director of Research and Analytics

Most of the Towerpoint Wealth family (and extended family!) had a fun day of golf two Monday’s ago, directly supporting the Rotary Club of Arden-Arcade and the Rotary Club of Granite Bay to raise resources and money for homelessness, at-risk youth, and local schools and parks.

It was quite the “Around the World” golf tournament, specifically the craft beer, jello shots, and marshmallow drive on the TPW-hosted 7th hole!

Graph of the Week

Are you a nocoiner, or do you HODL?

A compelling chart below suggests that cryptocurrency does not appear to be going away any time soon!

What do you think is going to happen with crypto? Click HERE to message us and let us know your thoughts!

Trending Today

As the 24/7 news cycle churns, twists, and turns, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Click here to Download

Towerpoint Wealth Sacramento Independent Financial Advisor

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

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Will the Beginning of Fall Cause the Market to Stall? 09.17.2021

In the Northern Hemisphere, September (the harvest month) marks the beginning of meteorological autumn, and in many countries, the beginning of the academic year.

ira required minimum distribution

In her short poem about the month of September, the Canadian author Lucy Maud Montgomery (best known for her classic children’s novel, Anne of Green Gables) offers a cheerful tribute to the ‘late delight’ of the month:

Lo! a ripe sheaf of many golden days

Gleaned by the year in autumn’s harvest ways

With here and there, blood-tinted as an ember,

Some crimson poppy of a late delight

Atoning in its splendor for the flight

Of summer blooms and joys

This is September

She could be saluting 2021’s cheerfully buoyant year-to-date stock market returns, with the S&P 500 up +20.35% as of Thursday, September 16th.

However, September has historically been a volatile month for stocks, and in the past has ranked as the least promising month of the year, on average, for the S&P 500 index over the 1928-2021 time frame:

ira required minimum distribution table 2021

Additionally, through September 1st of this year and as depicted by the chart below, the S&P 500 has reached a total of 53 (!) new record closing highs, the fifth highest figure in the past 93 years:

ira required minimum distribution table 2021 Closing Highs

The $64,000 question: Is it reasonable to expect this growth and momentum continue? Here are both sides of the story:

Positive Economic Developments

  1. Improving jobs market: After a rolling sequence of shortages in 2021 (including lumber, used cars, ocean shipping capacity, and semiconductors), labor also continues to be in short supply for many companies. This is reflected in the Bureau of Labor Statistics (BLS) report of an increase to 10.1 million job openings (!) as of the last business day in June, the highest EVER figure since job openings began to be tracked in December of 2000.
  2. “Goldilocks” labor recovery: While the labor market is improving, it does not appear to be improving at such a rapid extent that the Federal Reserve feels compelled to becomes more aggressive in reducing (or “tapering”) its current level of asset purchases (currently $120 million per month)
  3. Services and manufacturing sector expansion: On September 3rd, the Institute for Supply Management (ISM) reported its services index grew for a 15th consecutive month, registering a 61.7 in August after a hitting a record high of 64.1 in July. On September 1, the ISM reported its manufacturing index also grew for 15 consecutive months, with a very good reading of 59.9.
  4. Rising home prices: Spurred by extremely low interest rates, an increased ability to work remotely, and low inventories of homes for sale, the median sales price for single-family existing homes was higher year-over-year in 2Q, 2021 for 182 of the 183 metropolitan areas tracked by the National Association of Realtors (NAR). In fact, in 94% of those metropolitan areas, median prices rose by *more than* 10% from a year earlier!
  5. Potential for scaled back tax increases: In a September 2 Wall Street Journal op-edWest Virginia Senator Joe Manchin indicated that he would not support a social infrastructure spending bill anywhere near $3.5 trillion, thus reducing the chances that such a large package would become law and lead to significantly higher taxes
  6. Significant individual and institutional investor liquidity: The Investment Company Institute (ICI) reports that as of 9/15, total assets of retail money market funds amounted to $1.43 trillion (!), and total assets of institutional money market funds reached $3.03 trillion. This almost $4.5 trillion of CASH currently sitting on the sidelines represents significant buying power for financial assets
  7. Significant corporate liquidityAccording to Dow Jones Market Data, cash holdings among S&P 500 companies reached $1.98 trillion on August 9, a more than 30% increase from two years ago at the end of 3Q, 2019 When combined with significant available credit that remains unused, S&P estimates a total of $6.8 trillion of unused cash liquidity is available to the corporate sector as a whole. This liquidity can be used to buy back stock, increase dividends, and pursue strategic capital investments

Please bear in mind, while this is an impressive and robust list, there are also risks and concerns to worry about: Uninspiring retail sales, weakening commodity prices, slower 3rd quarter GDP growth estimates, and declining consumer confidence, to name a few.

However, at Towerpoint Wealth, we believe the most concerning potential headwind comes in the form of high stock valuations, as the S&P 500’s forward price-earnings (P/E) ratio of 21.2x is the highest it has been in two decades!

High Stock Valuations Price Earning Ratio

Although stretched valuations generally do not represent a causal trigger for a stock market correction, at elevated levels (as is presently), they nevertheless can serve investors well as a cautionary warning sign.


While we will always remain humble about our ability to consistently predict the future with accuracy, we do advise clients and friends to heed these high valuations, and to be vigilant in biasing high-quality, “all-weather” assets in their portfolios, especially in light of complacent stock market volatility readings and the long span of time without so much as a 5% market correction.

Confused? Worried? In need of discipline, direction, and/or a plan? Have questions or concerns? Click HERE to contact us for an objective, no-strings-attached conversation about you and your circumstances, as we fully support and echo Warren Buffet’s philosophy:

Warren Buffet Philosophy

What’s Happening at TPW?

Our Partner, Wealth Advisor, Jonathan LaTurner, wrapped up an amazing trip to Washington D.C. with his fiancée, Katie McDonald, stopping by 1600 Pennsylvania Avenue and also the Smithsonian’s National Museum of Natural History.

Looks like an awesome tour of our nation’s capital, Jon!

The San Francisco Giants are hot right now (!), and our Director of Tax and Financial Planning, Steve Pitchford, and his partner, Katie, took in an AMAZING extra-innings Giants ‘W’ versus the Dodgers two Fridays ago at Oracle Park! #BeatLA

Illustrations/Graphs of the Week

You cannot keep funds in a retirement account indefinitely, as the government wants their share! Required minimum distributions (RMDs) represent the minimum amount that you must withdraw from your IRA or employer-sponsored retirement plan account each year. With the exception of Roth IRAs and Roth 401(k)s, from which withdrawals occur tax-free and are not required until after the death of the owner, regular RMDs can be a “tax thorn” in the side of many investors who have accumulated wealth in any tax-deferred retirement account.

In addition to the two resources found in the news stories at the bottom of this newsletter (discussing RMDs and QCDs), the table directly below, courtesy of Michael Kitces from Kitces.com, does an excellent job of outlining the various strategies available to reduce, minimize, and delay these pesky mandatory, and taxable, retirement account withdrawals:

retirement account withdrawals

Confused? Have questions or concerns? Click HERE to contact us for an objective, no-strings-attached conversation about you and your retirement account circumstances.


Trending Today

As the 24/7 news cycle churns, twists, and turns, there have been a number of trending and notable events that have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

Click here to Download

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Towerpoint Wealth team - Sacramento financial planner
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Will EVs Rise Mean Combustion’s Demise? 08.27.2021

Big Oil. A somewhat-pejorative name used to describe the world’s six largest publicly traded oil and gas companies:


BPChevronExxonMobilRoyal Dutch ShellTotalEnergies, and ConocoPhillips.

BP, Chevron, ExxonMobil, Royal Dutch Shell, TotalEnergies, and ConocoPhillips

These “supermajors” are facing intense challenges, specifically to their oil reserves and production. Pressure to cut back traditional upstream spending and redirect capital into renewable energy projects is intense, which we believe will drive oil supply down and oil prices higher.

Renewable svs Oil and Gas

Oil production growth outside of OPEC+ has been extremely difficult to achieve, and recent ESG pressures have exacerbated these problems. In what the New York Times dubbed a “stunning defeat” for ExxonMobil, and a huge win for ESG proponents, activist investor Engine No. 1 secured three new directors (out of 12 total) to ExxonMobil’s board of directors, with a specific mandate to reduce the company’s carbon footprint by curtailing capital investments into its upstream oil and gas businesses. At about the same time, a Dutch court ruled that Royal Dutch Shell must cut its CO2 output by 45% by 2030 to align company policy with the Paris Climate Accord.

What will happen when the other supermajors are also forced comply with mounting ESG and governmental pressures and reduce upstream spending? We believe non-OPEC production will continue to decline, further paving the way towards increased capital expenditures for renewable energy projects. Rystad Energy analysis forecasts renewable energy projects to set a new record in 2021 ($243 billion), narrowing the gap with oil and gas spending (projected to be relatively flat at $311 billion).

These facts all align with the multi-step strategy that President Biden announced just earlier this month: By 2030, half of all new vehicles sold in the US should be electric. And while this goal is a bit loftier than the EV sales projections found below, the transition from oil to electric is obviously no longer a trend, but instead a full-blown movement.

Electric Vehicle Stocks

Underscoring this movement was the pledge made by executives from the three largest US auto companies: 40 to 50% of their new car sales would be electric by the end of the decade. Understanding that gas-powered vehicles are the single biggest source of greenhouse gases in the US (producing more than 25% of our total emissions), a rapid shift from combustion engines to EVs continues to aggressively take place. Need further confirmation?

The question certainly remains: Will consumers buy them?

At Towerpoint Wealth, we recognize there are obstacles: higher sticker prices, the lack of widespread charging stations (needed for longer-distance drivers), stress to the country’s power grid (if every American drove an EV today, the US could end up using about 25% more electricity than it does today), and pressure from labor unions (EVs have 30-40% fewer moving parts, and require fewer workers to assemble) are all headwinds to this movement. However, we also believe it is just a matter of time before combustion-engine vehicles take their place next to rotary phones, VCRs, and the folding maps.

rotary phones, VCRs, and the folding maps

What’s Happening at TPW?

Three generations of Eschleman men!

Our President, Joseph Eschleman, attended the Philadelphia Phillies / Tampa Bay Rays game on Wednesday evening at Citizens Bank Park in Philly, with his father Eric and his 11-year-old son, Henry.

The Phils blew the game in the ninth inning, but all three Eschlemans had a great time together!

President, Joseph Eschleman, attended the Philadelphia Phillies his father Eric and his 11-year-old son, Henry

In an effort to maximize our productivity as a firm, we were early to adopt Salesforce as our customer relationship management (CRM) software.

Salesforce forms the backbone of our operations, allowing us to efficiently administer and manage all of our interactions with clients, colleagues, prospects, and friends.

A huge thank you to Ryan O’ConnellDynasty Financial Partners’ CRM specialist (in the photo, “sandwiched” between Michelle Venezia and Lori Heppner after lunch yesterday) for being on site this week to assist with a Salesforce instance upgrade, helping us to stay ahead of the curve and better interface and communicate with each of our clients!

Ryan O'Connell Dynasty Financial Partners Michelle Venezia Lori Heppner

Illustrations/Graphs of the Week

Have you heard that federal capital gains taxes may soon be increasing?

Although the final details of President Biden’s American Families Plan to potentially increase capital gains taxes (to pay for some portion of the various US Congressional domestic priorities such as education and child care) are not yet specified, they are likely to influence securities prices and financial market conditions.

Oddly, the chart below depicts the price return of the S&P 500 index six months before and six months after capital gains taxes were increased.

By far (and we feel, surprisingly), the six months BEFORE capital gains taxes are increased represent the periods of most risk to equity prices.

Capital Gains Tax Stocks


Trending Today

As the 24/7 news cycle churns, twists, and turns, there have been a number of trending and notable events that have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.

– Joseph, Jonathan, Steve, Lori, Nathan, and Michelle

Click here to Download
http://towerpointwealth.com/wp-content/uploads/2021/09/Will_EVs_Rise_Mean_Combustions_Demise.pdf