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Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

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Towerpoint Wealth April 24, 2023 No Comments

9 Tax Benefits of Real Estate Investing 04.21.2023

Most of us recognize that taking a diversified approach to investing is a sound philosophy. There are a myriad of different ways for investors to build and grow their net worth, each with its unique set of risks, rewards, tax consequences, and considerations. Traditionally, in addition to building a portfolio of stocks, bonds, and mutual funds, one of the best and most popular avenues to diversify your investments is to own and invest in real estate.

In addition to adding diversification, real estate investing can provide numerous benefits to investors, including the potential for long-term appreciation, debt paydown, inflation protection, and passive cash flow.

And let’s not ignore the tax benefits of real estate investing. Investing in real estate does provide a unique advantage, as the tax benefits of real estate investing can oftentimes be superior to those of stocks, bonds, and mutual funds. To be clear, we believe that reducing your taxes should never be a primary goal when investing and building net worth; however, we also believe that it is hugely important to recognize that it’s not what you make, but what you keep that builds financial security. To ignore the significance of minimizing your obligation to Uncle Sam is a huge mistake.

Additionally, the tax benefits of real estate investing are one its most appealing aspects. These tax benefits can significantly reduce an investor’s tax liability, and increase their net, after-tax return on investment. The tax benefits of real estate investing can range from deductions for expenses related to the property to the ability to do tax-free Section 1031 exchanges of properties and avoid capital gains. In this way, real estate investing can be a tax-efficient strategy for both building wealth and generating income.

Itemized below are nine strategies to maximize the tax benefits of real estate investing. These are elaborated upon in the presentation that our Associate Wealth Advisor, Megan Miller, and President, Joseph Eschleman, recently delivered to the West Sacramento Real Estate Investor Meet Up group.

Click the image to watch the full presentation, and reference the list of the most compelling tax benefits of real estate investing!

1. Start a real estate business – it’s easy.

2. Leverage business expense tax deductions and credits.

3. Take advantage of Qualified Business Income (QBI).

4. Make it a family business!

5. Utilize the “Double Dip” on rentals.

6. Move in! Leveraging the primary residence capital gain exclusion.

7. Know and take advantage of cost segregation.

8. Consider Section 1031 exchanges and Delaware Statutory Trusts (DSTs).

9. Open and fund a tax advantaged retirement account.

While this list is by no means an exhaustive one, we believe it is clear that the tax benefits of real estate investing provide a myriad of opportunities to keep Uncle Sam at arm’s length while striving to maximize profits and compound the growth of your net worth.

It is important for investors to consult with qualified tax and financial professionals to ensure they are taking advantage of all available tax strategies while staying compliant with relevant tax laws and regulations. The tax benefits of real estate investing make it a lucrative and attractive investment and diversification option for individuals and businesses alike.

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

What’s the fastest path to retiring with $2 million?

A 2020 survey from Schwab Retirement Plan Services found that the average worker expects to need roughly $1.9 million to retire comfortably. Are you almost there? Have a long way to go? Is retiring with 2 million dollars a reasonable goal for you?

Is this enough for you to be happy and comfortable? We’ve put together 5 steps you can take to increase the size of your nest egg and considerations for a well-thought out, customized, retirement income plan in this white paper. We’re happy to offer it to you here.

Click HERE to message us with any questions or concerns you may have about your retirement right now.

Click the images below to get caught up on some of our most recent trending moments at Towerpoint Wealth you might have missed!

Sacramento Wealth Management LinkedIn Real Estate

Are you really a long term investor?

Or do you just say you are but behave more like a trader or a gambler, and fail to apply long term investment strategies to your portfolio?

In this video, our President, Joseph F. Eschleman, CIMA ^®, discusses exactly what it takes to truly behave like a long term investor, and what specific long term investing strategies and philosophies need to be developed and internalized to be a successful long term investor. Trying to successfully build, and protect, your wealth and “nest egg?” Watch this video to listen to Joseph outline seven key long term investing strategies and philosophies, as well as the exact emotional and behavioral characteristics needed to be a successful long-term investor.

Click HERE to browse TPW’s library of other wealth-building and wealth-protecting educational videos.

Sometimes, it’s just easier to keep it simple! Credit to Michael Kitces for the quote.

Gifting to UTMA accounts

An UTMA, or Uniform Transfers to Minors Act, is a legal arrangement that allows parents or guardians to transfer assets to their children. One of the main advantages of using an UTMA is the potential tax benefits. UTMA accounts are taxed at the child’s tax rate, which is typically lower than the parents’ tax rate. This means that investment gains and income generated by assets held in an UTMA account can be taxed at a lower rate, allowing for more tax-efficient growth. Additionally, the first $1,250 of unearned investment income generated by an UTMA account is tax-free, and the next $1,250 is taxed, but at the child’s usually lower tax rate.

Another tax benefit of an UTMA is the ability to shift assets out of a parent’s estate for estate tax purposes. By transferring assets to an UTMA, parents can remove those assets from their estate and potentially reduce their estate tax liability. In addition, the assets in an UTMA account are considered the child’s property, not the parent’s, which can be advantageous for financial aid purposes. Up to $17,000 can be transferred, per person, into an UTMA account without being subject to gift taxes. Overall, an UTMA can be a valuable tool for parents looking to minimize their tax liability while transferring assets to their children.

Have questions or concerns about filing your 2022 tax return? We welcome connecting with you and are happy to help. Click the banner below to message Steve Pitchford, Steve Pitchford, Director of Tax and Financial Planning.

1. The Robots Have Come for This Newsletter | Wall Street Journal – 4.13.2023

Okay…maybe the bots haven’t come for this newsletter just yet. But recent advances in artificial intelligence certainly have many of us scrambling to predict what’s next. For centuries, new waves of automation have been greeted by warnings of widespread job loss and disruption, and those predictions have proven to be wrong. But the revolutionary nature of ChatGPT begs us to consider the possibility that this time could be different.

According to some industry executives, it already is.

2. Babe Ruth Bat Sells for Record $1.85M After ‘Photographic Corroboration’ | ESPN – 4.5.2023

Hunt Auctions has announced the private sale of a bat used by Babe Ruth circa 1920-21 for $1.85 million, a record price for a baseball bat. The previous record also belonged to a Ruth bat, one that sold privately for $1.68 million by Heritage Auctions last August.

According to Hunt Auctions, the new record holder is the “only known example to offer photographic corroboration.”

3. Rupert Wins Again | Politico – 4.18.2023

If it seems fairly daft to congratulate Rupert Murdoch on settling the Dominion Voting Systems defamation case at a cost of $787.5 million, you probably need to be brought up to speed on how the tycoon excises malignancies when they threaten his core businesses.

For the media mogul, the massive Dominion settlement fee is just the cost of doing business.

A wonderful cartoon illustrating how emotions can trump objectivity during volatile periods in the economy and markets!

In light of how unsettled the economy and markets are, are you concerned or worried about the level of risk you are taking in your portfolio?

Message us to discuss your circumstances.

If you want to feel confident in your retirement planning decisions, reach out to us and schedule a 20-minute “Ask Anything” call – we are confident it will be time well spent!

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

Follow TPW on LinkedIn
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We will happily donate $10 to it!

A Bailout for Banks, Again? Well, Kind Of What FDIC insured means.

Towerpoint Wealth March 24, 2023 No Comments

A Bailout for Banks, Again? Well, Kind Of 03.24.2023

Following the deep wounds created by the still-fresh memory of the Global Financial Crisis (GFC) of 2007-2008, many are wondering if another bailout for banks is as regulators attempt to stave off a banking crisis that has spread across global markets.

This is leading people to rightly wonder: Has this created a moral hazard? Moral hazard is when you knowingly take a risk in the expectation that if it goes wrong, others will bear the consequences. While there are assuredly similarities, and depending on what your definition of a bailout for banks is, today’s banking crisis is much different than the circumstances that led to the GFC. One of the primary differences: depositors at Silicon Valley Bank, Silvergate Bank, and Signature Bank, rather than the three banks themselves, were rescued.

Amongst a continued whirlwind of debate and discourse about all of these issues, at Towerpoint Wealth we believe there are three central key points for discussion.

What FDIC insured means.
What constitutes a bailout?
Does what’s happening now constitute another bailout for banks?

Most agree that an emergency government rescue of the individuals and companies who held deposits at Silicon Valley Bank (SVB) and Signature Bank was needed, as many SVB and Signature clients held funds at the bank in excess of the $250,000 FDIC insurance maximum, and a total wipeout of these depositors’ funds would have almost assuredly led to contagion in the financial system and a massive run on banks throughout the country. That is, everyone would want to withdraw their cash at the same time.

At Silvergate Bank, depositors did not need a government rescue, as the bank went through a voluntary liquidation, and the bank was able to sell its assets and investments and return all deposited money to its customers.

Let’s explore these three important points:

What FDIC insured means.

It used to be a simple question with a simple answer. Per the FDIC’s website:

FDIC deposit insurance protects bank customers in the event that an FDIC-insured depository institution fails. Bank customers don’t need to purchase deposit insurance; it is automatic for any deposit account opened at an FDIC-insured bank. Deposits are insured up to at least $250,000 per depositor, per FDIC-insured bank.

However, over the past two weeks, the goalposts have changed regarding this $250,000 deposit insurance cap. Officials at the US Treasury are studying ways to guarantee all bank deposits, especially if these problems in the banking system create a domino effect.

What constitutes a bailout?

Quoting author and equities analyst Barry Ritholtz, a bailout is:

“When an individual or company, through their own behavior and risk management, suffers a disastrous loss — but is then somehow made fully (or even partially) whole, and they do not have to suffer the impact of their own decision-making.”

Sounds very similar to moral hazard, doesn’t it?

The concept that you are responsible for the results of your own handiwork is so old, it’s biblical:

The US government has facilitated bailouts for banks and other institutions for more than 200 years, beginning with the Panic of 1792, and more recently, with the Troubled Assets Relief Program (TARP) that authorized the US Treasury to purchase up to $700 billion of toxic assets from banks and other companies teetering on the brink of insolvency. Bank of America, Citigroup, Fannie Mae, Freddie Mac, Bear Stearns, and AIG received both direct and indirect Federal intervention and economic assistance. In other words, a bailout for banks.

Bailouts for banks and other institutions are primarily criticized for a number of reasons: taxpayers can suffer losses, they may not work or take too long to be effective, they create moral hazard, they are perceived as political in nature, and they are rushed and may not work as intended.

Privatized gains and socialized losses anger virtually all of us, as that is not how capitalism is supposed to work. Is that what is happening today?

Does this constitute another bailout for banks?

Are Silicon Valley Bank and Signature Bank depositors getting all their money back through FDIC insurance, even if they had more than the guaranteed $250,000 in deposits, the same thing as a bailout for banks?

People are questioning what FDIC insured means primarily because while authorities don’t yet see full, limitless FDIC coverage as necessary, they are clearly worried that if another regional bank becomes insolvent, there will be a run on deposits. Without unlimited FDIC insurance, this would almost assuredly send significant additional capital (billions of dollars!) to the largest banks in the world, known as systemically important banks, or SIBs. In other words, away from small and mid-size banking institutions.

As businessman and investor Kevin O’Leary said to Yahoo Finance earlier this week (emphasis added):

This was not a 2008 Lehman Brothers situation. These are just idiot bankers with an incompetent board. It’s that simple.

…we’re sitting in a horrible moral place today, where every single account in every single bank, regardless of who is running it, is guaranteed by the taxpayer. I’m not happy with the outcome. I can do anything I want as a bank manager, I can swing for the fences… but I can take inordinate risk to move that stock price (up), and never worry about what I do with the depositors’ money. Does that sound like a good idea to you?

While support for a motion to guarantee all bank deposits is growing, there is a strong chorus of those who are firmly against a universal Federal guarantee of all bank deposits. A two-day Reuters/Ipsos poll found 84% of respondents – including strong majorities of Republicans and Democrats – think taxpayers should not foot the bill when problems are caused by bank mismanagement.

Additionally, the government is already handing out money to banks in the form of a new lending program launched this month, the Bank Term Funding Program (BTFP), complementing the discount window, both of which allow banks to borrow money from the Fed to meet cash shortages and function as a safety valve to relieve pressure in the financial markets.

U.S. banks have borrowed a combined $164.8 billion from these two backstop facilities, which has eclipsed the money that was borrowed during the 2008/2009 financial crisis.

The effects of this bank borrowing will be wide-ranging, including real estate loans, corporate loans, personal loans, mortgages, credit card interest rates, the U.S. Prime Rate, and every other type of lending that you can consider.

Does all of this constitute a bailout for banks, or is it simply essential support for our US banking system? Send us a note and let us know what you think!

Click the thumbnail image below if you are interested in learning more about the details of what happened at Silicon Valley Bank.

The Swift Collapse of Silicon Valley Bank,

What’s Next?

Investors, depositors, and market participants are all hopeful that the game of “whack-a-mole” but with a similar feel, will end soon. Considerations about the overall health of the economy persist. While moves by Treasury Secretary Janet Yellen and Fed Chair Jerome Powell will hopefully limit contagion in the banking industry, economic activity will almost certainly be slowed by tightening standards and greater scrutiny and regulation of lenders, and rising interest rates from the Fed firmly tip the odds in favor of a recession.

For now, it seems as though consumers are comfortable with the current state of things; at least people aren’t searching Google to find information on bank withdrawals today as often as they were just a week ago.’

Google searches related to bank withdrawals

Secretary Yellen has also promised to intervene and provide further support for banks if needed, helping consumer fear abate further.

Veteran banking analyst Dick Bove said “…if you go back in history, you know that time before the Federal Reserve was formed, that’s what was done to preserve stability in the banking industry.”

He also said that he believes the banking crisis is finished. At Towerpoint Wealth, we believe the more important question is – do you?

Crises will always be a part of life and will always occur, and this latest one is by no means a reason to hit the panic button. Prudent and successful longer-term investors will recognize this period as simply another entry on their wealth-building and wealth-protecting resume (earning another investment “stripe,” if you will), and just another part of our schizophrenic business cycle.

“This too shall pass” is a quote attributed to both King Solomon and Abraham Lincoln, and an excellent reminder to be humble during good times and resolute during periods of uncertainty and fear. Markets will go up, and they will go down, all of which is out of our control – what matters is how you respond to these challenges (read: opportunities), which just so happens to be in our control. We will persevere as we always do, as we remind our Towerpoint Wealth clients and friends that having a disciplined investment approach and a properly-diversified portfolio will always remain essential, independent of our external environment.

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

wealth management sacramento towerpoint wealth save the date

Real estate investor 9 Tax Strategies Real estate Investors wish

Are you a real estate investor?

Would you like to learn how to reduce and minimize the income taxes you pay on your real estate portfolio?

Please join us on March 28 at the Kick’n Mule, as our Associate Wealth Advisor, Megan Miller and Joseph Eschleman, as they join The West Sacramento Real Estate Investor Meetup group to talk about how to better manage the tax liability of your real estate investing!

The event is free to attend. Click the thumbnail image below to learn more about the upcoming event!

Here are some of our top trending moments at Towerpoint you might have missed on our social platforms.

Click the images below!

Sacramento Wealth Management LinkedIn 2023

Sacramento Wealth Management Twitter 2023

What else is happening with the Towerpoint Wealth family?

Will my investments and assets at Schwab be OK?

Recent news about three large regional bank failures – Silicon Valley Bank, Signature Bank, and Silvergate Bank – has been concerning and unsettling to say the least. Here at Towerpoint Wealth, we have recently had a few clients ask us about how the fallout may affect our primary custodian that we have partnered with to hold and custody our client assets – Charles Schwab.

While no financial institution has completely escaped the consequences of this crisis, we are confident that Schwab is fundamentally different in many ways from those banks in the news. Our confidence in Schwab is underpinned by Schwab’s:

Conservative balance sheet.
Strong liquidity position.
Diversified base of more than 34 million account holders.

Click the thumbnail below to watch a recent CNBC interview of Walt Bettinger, Charles Schwab’s CEO, as he discusses these recent events, and why he (and we) believe that Schwab remains a safe port during this temporary storm

single family home, titled The Augusta Rule

The August Rule

Is this the IRS rule that feels too good to be true?

The “Augusta Rule” is the nickname for Section 280A(g) of the IRS tax code. It allows business owners to rent their personal residence to their business for up to 14 days per year, making the rental income tax-free and allowing the business to write off the expense.

To benefit from the Section 280A deduction, schedule legitimate business meetings at your home, ensuring they do not exceed 14 days and are not for entertainment purposes.

Be sure to charge fair market rent, document the meetings by taking corporate minutes, and submit them to the IRS to protect the deduction!

Are you searching “certified financial planner near me”? You’ve found Sacramento wealth advisor Steve Pitchford, CPA, CFP® and the Towerpoint Wealth Sacramento financial advisor team.

We serve clients primarily in the Northern California region. Glad you’re here! Please contact us with any questions you have about our wealth management services.

Useful and interesting content we’ve read over the past two weeks:

California Lawmakers Call For an Audit of Spending on Homelessness

KCRA3 – 3.21.2023

The state spends billions of dollars each year trying to address the homeless crisis, but is it working? There is a new bipartisan effort among California lawmakers to try to find out.

The Incredible Tantrum Venture Capitalists Threw Over Silicon Valley Bank

Slate – 3.13.2023

If the technological innovation coming out of Silicon Valley is as important as venture capitalists insist, the past few days suggest they haven’t been very responsible stewards of it.

The collapse of Silicon Valley Bank may have resulted from a perfect storm of ugly events. But it was also emblematic of a startup ecosystem and venture-capital apparatus that are too unstable, too risky, and too unmoored from reality to be left in charge of something as important as the direction of our technological development

The Biggest Lie the Rich Ever Told? That Money Can’t Buy You Happiness

The Guardian – 3.14.2023

News just in: Money does buy you happiness. Duh, you might say. Anyone could have told you that; it’s hardly a Nobel-prize winning insight. Well, actually, it kinda is: In 2010, Daniel Kahneman, a Nobel prize-winning economist and psychologist, came out with the theory that there was a monetary “happiness plateau”. Once you hit an annual household income of $75,000, earning more money didn’t make you any happier.

In 2021, the happiness researcher Matthew Killingsworth released a dissenting study, showing that happiness increased with income and there wasn’t evidence of a plateau. Now the pair have teamed up in a process known as “adversarial collaboration” and released a new study finding that they were both sort of right, but Killingsworth was more right: for most people, earning more money makes you happier.

Since the 1970s, over 90 banks in the United States with $1 billion or more in assets have failed.

The Yahoo Finance list below is based on assets at the time of failure of banks insured by the FDIC.

If you want to feel confident in your retirement planning decisions, reach out to us and schedule a 20-minute “Ask Anything” call – we are confident it will be time well spent!

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

Follow TPW on LinkedIn
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Follow TPW on Facebook
Follow TPW on Instagram
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Connect with Towerpoint Wealth, your Sacramento Financial Advisor, on any of these platforms, and send us a message to share your preferred charity.

We will happily donate $10 to it!

Towerpoint Wealth March 13, 2023 No Comments

Investing Like The Best – Warren Buffett! 03.10.2023

Investing like the best is oftentimes simple, but not necessarily easy. It’s important to be prudent and disciplined, and one way to do this is to try to understand and embrace the mindset, outlook, wealth-building, and wealth-protecting philosophies of Warren Buffett.

As the Chairman of the Board for Berkshire Hathaway (NYSE: BRK), Buffett pens his Chairman’s Letter every year, highlighting BRK’s annual shareholder report. As has been the case since 1965, Berkshire’s 2022 annual report was released late last month, and scrutinizing Buffett’s Chairman’s Letter found within it continues to be a tradition for investors around the world. Considered a must-read, Buffett’s message this year was particularly anticipated, given today’s extremely unsettled and ever-changing economic and investing landscape.

While many believe that adhering to Buffett’s philosophies and principles is akin to investing like the best, the 92-year-old has certainly not been immune to criticism. Considered too conservative, too suspicious of technological advances, and too out of touch with modern markets, Buffett has his share of detractors, but his performance track record since taking over management and control of Berkshire Hathaway in 1965 is undeniable.

The stock market, as measured by the S&P 500, has grown +9.9% annually from 1965-2022. Berkshire Hathaway’s growth over the same time period? +19.8%.

Annual Percentage Change Berkshire vs S&P Dividends

Given this penchant for outperformance, it should come as no surprise that Buffett’s views and thinking are important to those who are interested in investing like the best. Key snippets from Buffett’s most recent letter, evincing his directness, common sense, and wisdom, are articulated below.

The weeds wither away in significance as the flowers bloom.

Let your winners run – as your winning investments become bigger, the losers become less significant.

It is crucial to understand that stocks often trade at truly foolish prices, both high and low.

Human beings, and investors, are emotional by nature. They oftentimes do the opposite of what they should, like buying high and selling low, which can drive stock prices artificially higher or lower.

We are understanding about business mistakes; our tolerance for personal misconduct is zero.

Investing like the best doesn’t mean you won’t make occasional business mistakes, those are expected. However, bad behavior is not tolerated.

‘Bold imaginative accounting,’ as a CEO once described his deception to me, has become one of the shames of capitalism.

Buffett is skeptical of how CEOs use accounting gimmicks to help their companies achieve their short-term earnings goals. He also holds disdain for Wall Street analysts’ who provide quarterly earnings forecasts, as the threat of having to report “worse-than-expected earnings” can incentivize bad behavior.

Additionally, and especially telling in light of the new 1% excise tax on repurchases of corporate stock that was enacted last summer as part of the Inflation Reduction Act of 2022 (“IRA”), were Buffett’s comments on BRK company stock repurchases:

Share buybacks have become a popular strategy for companies who have cash and no other intelligent way to deploy it. In lay terms, buying back their own stock on the open market helps to boost demand and increase the stock price. Also, buybacks help to improve key metrics like earnings per share (EPS), helping the stock to be more attractive to prospective investors. This is good for CEOs, and also helps to maximize value for shareholders.

January Buyback Authorizations : 2005 to Today

At Towerpoint Wealth it seems evident to us that investing like the best and utilizing an approach like Warren Buffet’s requires patience, discipline, and a longer-term perspective. With those thoughts in mind, we encourage each of our clients, friends, and colleagues to strongly consider one of Buffett’s closing quotes in his 2022 Chairman’s Letter.

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

We would like to congratulate our Partner, Wealth Advisor, Jonathan LaTurner, and his wife Katie McDonald, PHR, on the birth of their first child, Thompson William LaTurner, on 2/15/23!

Welcome to the Towerpoint Wealth family, Thompson – we can’t wait to meet you!

Here are some of our top trending moments at Towerpoint you might have missed on our social platforms.

Click the images below!

What else is happening with the Towerpoint Wealth family?

The markets, politics, and economy are uncontrollable and unpredictable. However, income taxes and investing costs, while unpleasant, are unfortunately omnipresent. As you work to build and protect your net worth, investment expenses are unavoidable, and owning investments inevitably means you will be subject to paying income taxes as well.

The bad news? These two “necessary evils” are inevitable along your journey to growing and protecting your net worth. The good news? With intelligent and proactive planning, we DO have some control over reducing and minimizing both!

Click the Minimizing the Necessary Evils of Building Net Worth thumbnail below to learn more about specific strategies to reduce the drag on your nest egg and investment portfolio, allowing you to efficiently build and protect your wealth and net worth.

The More You Know About TAXES

As the 2023 tax season kicks into high gear, we would like to give you a few tips, debunk some myths, and get you some high-quality tax minimization strategies!

Click below to watch the first installment (focusing on tax withholding) of The More You Know About TAXES, a short yet impactful video series we have produced and designed to help make your tax season less stressful and hopefully save you some money!

Have questions or concerns about filing your 2022 tax return?
We welcome connecting with you and are happy to help!
Click below to begin a dialogue with Steve Pitchford, Director of Tax and Financial Planning.

Useful and interesting content we’ve read over the past two weeks:

World’s Largest Four-Day Work Week Trial Finds Few Are Going Back
Bloomberg – 2.28.2023

The largest-ever trial of the four-day work week found that most UK companies participating are not returning to the five-day standard, and a third are ready to make that change permanent.

The study involved 61 organizations and about 2,900 workers who voluntarily adopted truncated work weeks from June to December 2022. Only three organizations decided to the pause the experiment, and two are still considering shorter hours, data released Tuesday showed. The rest were convinced by revenue gains, drops in turnover and lower levels of worker burnout that four is the new five when it comes to work days.

Biden Bucks Liberals and Tells Democrats to Get Tough on Crime
NBC News – 3.4.2023

President Joe Biden’s decision last week on a local crime law sends a national message to fellow Democrats about how he believes they should address Republican criticism of the nation’s rising crime rates.

Democrats have focused predominantly on police reform since the George Floyd protests reignited a national debate over race and law enforcement three years ago. But rising violent crime rates and growing perceptions of unease in major cities have prompted a chorus of party strategists and officials to call for a tougher approach to counter Republican attacks.

Effort to Ban Stock Trading Among Executive Branch Officials Renewed
The Wall Street Journal – 3.5.2023

Sen. Josh Hawley (R., Mo.) is expected to introduce legislation Monday that would ban senior executive branch officials from owning or trading individual stocks, a push to toughen restrictions on conflicts of interest in the federal government.

Mr. Hawley’s bill is the latest fallout from a Wall Street Journal series that identified a sweeping pattern of financial conflicts across the executive branch, including finding that more than 2,600 officials invested in companies overseen by their agencies.

If you want to feel confident in your retirement planning decisions, reach out to us and schedule a 20-minute “Ask Anything” call – we are confident it will be time well spent!

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

Follow TPW on LinkedIn
Follow TPW on YouTube
Follow TPW on Facebook
Follow TPW on Instagram
Follow TPW on X
Follow TPW Podcast

Connect with Towerpoint Wealth, your Sacramento Financial Advisor, on any of these platforms, and send us a message to share your preferred charity.

We will happily donate $10 to it!

economy of sacramento | downtown Sacramento

Towerpoint Wealth February 27, 2023 No Comments

LIGHT THE BEAM: The Economic State of Downtown Sacramento 02.24.2023

If you’ve been to a Sacramento Kings home game this year at the Golden1 Center in downtown Sacramento during a game where the team emerges victorious, then you’ve certainly heard (and perhaps participated in) the new spirited and energetic crowd chant: “LIGHT THE BEAM! LIGHT THE BEAM!”

Kings arena and Downtown Sacramento Commons | Economy of Sacramento

Anointed as the “Beam Team” earlier this year, the Kings franchise is clearly on the upswing, trending strongly towards ending their league-long 16-year playoff drought and looking to land a spot in the NBA playoffs for the first time since 2006. Head coach Mike Brown and GM Monte McNair have assembled a very competitive squad that is seeing this playoff goal become more and more attainable with every win the Beam Team achieves, as the Kings have assembled a diverse squad of both veteran leadership and youthful energy and talent.

As the Beam (yes, we’ve decided to capitalize it) has become a point of pride and unity for our Sacramento community, it also is a metaphor for the state of downtown Sacramento in 2023. As Mayor Darrell Steinberg said at Tuesday’s twenty-sixth annual State of Downtown Sacramento speech:

The Kings rise and the shining of the beam is not a matter of dumb luck. And the truth is that the Kings rise was not a miracle brought on by a purple light, it was the result of careful planning, preparation, leadership, talent, and heart. Just like the downtown partnership and the people who have seen our downtown through its great rise, its most difficult times, and now get to be part of its inspiring comeback.

We’ve made a lot of progress: After ranking as the fifth most miserable city in America in 2012 according to Forbes, Sacramento in 2022 was ranked as NUMBER ONE California city to live in – what a turnaround!

The same trajectory is projected for the economy of Sacramento. Our Associate Wealth Advisor, Megan Miller, was one of almost 1,000 attendees at the State of Downtown Sacramento forum on Tuesday, held at the new SAFE Credit Union Convention Center, and afterwards she confirmed our opinion here at Towerpoint Wealth about downtown Sacramento: While we face big challenges, we are also firmly back “on the upswing” just like the Kings, and look forward to the continued unlocking of economic growth and expansion (and great food and entertainment!) that downtown Sacramento offers!

State Of Downtown Sacramento Economy of Sacramento

Understanding there are a myriad of different themes, topics, challenges, successes, and issues when it comes to the economy of Sacramento, below you will find a brief executive summary of the many positive catalysts creating Downtown Sacramento’s economic momentum and growth:

This really cool list of current downtown development projects is growing quickly!
Sacramento is growing its identity as a city of festivals:
- 44,000 people stayed overnight in Sacramento, and more than 160,000 people attended the West Coast’s Biggest Rock Festival, Aftershock, in 2022, with an estimated economic impact of $30 million
- Sacramento’s new country music festival, Golden Sky, drew 50,000 attendees last year, with an estimated economic impact of $12 million
- The Sol Blume R&B festival drew 40,000 people to Discovery Park in 2022, with an estimated economic impact of $10 million
The Sacramento Midtown Association is bringing back our beloved Second Saturday Art Walk beginning this May – hooray!
Sacramento’s hotel occupancy is at 99% of pre-pandemic levels.
- 684 new hotel rooms have been added over the past few years, including 179 at the new AC Marriott at 7th & I Street.
- Mayor Steinberg wants to add another 800 rooms in the next five years (perhaps the NBA All-Star Game will finally land here in Sacramento!).
1,089 new housing units have been built in the central city over the past four years
- 3,000 more units are currently under construction
- The NE corner of 10th and J Street, which has sat blighted for the past 15 years, was just sold to a housing developer planning to build 250 units
- The State of CA has made three state office buildings on Capitol Mall available for conversion to housing, with the prospect of a mixed-use urban village and up to 1,000 housing units looking more like a reality.
Measure N was approved in November, allowing for an expanded use of “hotel tax” revenue to be used for economic development projects to create local jobs, visitor-serving facilities that promote tourism, economic development, and other activities that bolster the local economy, and theatre and arts venues.
Revitalizing Old Sacramento and the Sacramento River waterfront are garnering more attention and capital
- A near $30 million waterfront makeover is back in the works, aimed at opening up the public market buildings with glass sides, creating a two-story platform and walking bridge to the embarcadero, and installing a new children’s play area in waterfront park
- CA State Parks is seeking input on design guidelines for a new 250 room hotel in Old Sac.
SKK Development has asked the city for a loan to open a new Whole Foods midtown location at 16th and J Street, at the former Lucca Restaurant space, with 198 units of housing above it

This list is a lengthy and an exciting one, and by no means is it exhaustive or static. Here at Towerpoint Wealth, we expect that it will continue to evolve as our city does. The economy of Sacramento is on a roll, and we expect it to continue to grow and expand as the dynamism of downtown Sacramento follows suit!

Want to know more about the state of the economy of Sacramento and of downtown Sacramento overall? Check out the highlight video and the full 2022 Annual Report found below!

The Downtown Sacramento Partnership Annual Report measures the progress of Downtown Sacramento Partnership key programs and tracks the state of office, residential and retail market development activity in the urban core.

Guide to your Schwab Tax forms 2022 Tax Year 1099 Dashboard

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

Save the Date Towerpoint Wealth Social Mixer

The disruption. The grind. The time. The energy. The chaos!

Sometimes it feels like it takes more brains and effort to complete your taxes than it does to earn the income!

Are you a CPA, an EA, an attorney, a real estate advisor, or industry professional who serves clients and their income tax needs? If so, mark your calendar for May 4, as we look forward to celebrating the end of tax season with you at our first annual spring industry mixer, held at Revolution Winery & Kitchen!

If you want to feel confident in your retirement planning decisions, reach out to us and schedule a 20-minute “Ask Anything” call – we are confident it will be time well spent!

Here are some of our top trending moments at Towerpoint you might have missed on our social platforms.

Click the images below!

Sacramento Financial Advisor Firm LinkedIn Feb 2023

Sacramento Financial Advisor Firm Twitter Feb 2023

What else is happening with the Towerpoint Wealth family?

Today marks the one year anniversary of Russia invading Ukraine. The brutality and inhumanity that have defined the Russian campaign continues to be revolting and disgusting, reconciliation and a cease-fire seems obscure at best, and it remains extremely difficult to accurately predict and assess the political and economic implications that are still developing.

Many questions remain, with two at the forefront of our mind: Is peace a tangible possibility, and will justice ever be served? Additionally, what do peace, and justice, actually look like? Regardless of what these answers may be, securing peace and finding some kind of justice not only will teach Russia a lesson, but also to warn those in the future who might be tempted to make war crimes part of their military strategy. All of us at Towerpoint Wealth, while pragmatic about the situation, also hold out hope and faith that this conflict…this war…ends sooner rather than later.

We also believe that the unique economic issues and financial and investment themes and ideals that this war has created need to be addressed, and much of what we discussed in our initial March, 2022 message to you, our clients, still rings true today, and we encourage you to click the image below to watch what our President, Joseph Eschleman, originally had to say.

A Schedule D form is what most people use to report capital gains and losses that result from the sale of capital assets, including property you own and use for personal or investment purposes.

The capital assets you are most likely to report on Schedule D are the stocks, bonds, and real estate you sell in a particular tax year.

These gains and losses are categorized as either short-term (the asset was held for less than 12 months) or long-term (held 12 months or more).

Please reference Page 36 of the below 2022 Tax Form Guide from Charles Schwab for additional information on how to complete your Schedule D (and Form 8949, if necessary).

Cover of A Guide to your Schwab Tax forms for the 2022 Tax Year

Additionally, and as mentioned two weeks ago, Schwab’s Tax Resources page has a plethora of useful information to help you make tax time a little smoother, plus important tax law changes that may affect your investment and tax planning decisions.

Useful and interesting content we’ve read over the past two weeks:

‘The Country is Watching’: California Homeless Crisis Looms as Gov. Newsom Eyes Political Future

KHN – 2.9.2023

Driving through the industrial outskirts of Sacramento, a stretch of warehouses, wholesale suppliers, truck centers, and auto repair shops northeast of downtown, it’s hard to square California’s $18 billion investment in homeless services with the roadside misery.

Tents and tarps, run-down RVs, and rusted boats repurposed as shelter line one side of the main thoroughfare. More tents and plywood lean-tos hug the freeway underpasses that crisscross Roseville Road, and spill into the nearby neighborhoods and creek beds.

Boomer Dads Are Driving Real Estate Agents Nuts!

Curbed – 2.10.2023

Last spring at a townhouse showing in Bedford-Stuyvesant, the agent David Harris watched his client, a married millennial with a kid, bounce from room to room before taking a seat on a staged sofa — a gesture Harris had come to regard as a cue that a client feels at home and is about to make an offer.

He was right. His client liked the place. Harris suggested they go $50,000 over asking, or $1.7 million; he anticipated a bidding war. His client agreed. But first, the client had to make one phone call. Harris watched as he went outside and started pacing. “And then he takes the cigarette out,” Harris said. “It was his father.”

‘Lake Tahoe Has a People Problem’: How a Resort Town Became Unlivable

The Guardian – 2.12.2023

Late last year, Lake Tahoe earned a spot on an exclusive travel guide. But the mountain destination, famed for its cobalt blue waters and Olympic-quality ski resorts, wasn’t there for the reason you’d think.

Fodor’s “No list” highlighted beloved getaways that needed a break, and Tahoe was up there with the neediest. Citing a pandemic influx of remote workers, second home buyers, traffic gridlock and packed beaches, the guide concluded “Lake Tahoe has a people problem”.

For fast-growing startups, an IPO is often the ultimate goal, a milestone after which the company has officially “made it” — but how is the class of 2020/21 getting on?

Robinhood, Coinbase, Airbnb and many other high-profile companies were among those to go public in the last 3 years, cashing in on frothy markets. However, since then, many have failed to live up to lofty expectations.

* Thanks to Chartr for the infographic and commentary.

Yahoo Finance illustrates nine companies 2023

Idowu Koyenikan money realizes that it is in good hands

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

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Towerpoint Wealth February 14, 2023 No Comments

Why Talking About Money is So Hard! 02.10.2023

Why is talking about money so hard?

Be it with your spouse, partner, children, parents, friends, or colleagues, having conversations and talking about money can be stressful, and oftentimes loaded with emotion. We have been taught that money and finances are private, and that talking about money is impolite, even uncouth. Some facts from recent surveys from financial and market research firms, as quoted in the Atlantic:

In 34% of cohabiting couples, one or both partners couldn’t correctly identify how much money the other makes

Only 17% of parents with an income above $100,000 a year had told (or planned to tell) their children how much they earn or their net worth

People seem to be more comfortable talking with friends about marital discord, mental health, addiction, race, sex, and politics than money!

More often than not, when we think about talking about money, we channel deep feelings and vulnerabilities. Moreover, the cultural and societal attitudes around money can contribute to the discomfort and reluctance to have conversations about it. For example, some cultures emphasize the importance of being financially secure and self-sufficient, while others discourage discussion of personal finances.

Another reason why talking about money can be hard is that it can be tied to emotions and personal values. Money can represent security, independence, status, or even love and affection. When someone is asked to disclose their financial situation, they may feel like they are being judged or evaluated based on their wealth, income, or spending habits. This can lead to feelings of insecurity or embarrassment and can make it challenging to have an open and honest conversation about money.

Furthermore, money can also be a source of conflict in relationships. Differences in financial goals, spending habits, or attitudes towards saving and investing can create tension between partners, family members, or friends. Discussing money can bring up sensitive and uncomfortable topics, such as disagreements about budgets, spending priorities, or saving for the future. This can make it hard to have productive and constructive conversations about money.

Click the image below for an excellent set of resources from Capital Group, as their report talks about talking about money!

Talking about money can be challenging because of the cultural and emotional factors that are associated with it. However, it is important to have open and honest conversations about finances in order to achieve financial stability, security, and independence. Overcoming the taboo and discomfort associated with discussing money can lead to stronger relationships, better financial decision-making, and increased peace of mind.

As Carl Richards said: “I have a powerful exercise to help you get started. It’s a technique I’ve carefully crafted over thousands of hours of working as a financial adviser. It’s called ‘Just Start.’”

Here’s how it works: Grab the person you want to talk about money. And…. just start! That’s it.

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

While gold underperformed other asset classes in 2022 due to a strong US dollar, recession fears on the horizon this year are causing some to be more optimistic about the outlook for gold in 2023.

One of the oldest investments out there, gold is considered a “safe haven” from inflation and geopolitical conflict, and massive government stimulus programs and money-printing.

Click the image below to read our white paper on gold, and message us with any thoughts or questions you may have!

Here are some of our top trending moments at Towerpoint you might have missed on our social platforms.

Click the images below!

What else is happening with the Towerpoint Wealth family?

Just last week the Towerpoint Wealth team headed to Folsom for our quarterly teambuilding day.

We had the pleasure of learning CPR, as well as the importance of knowing how to provide first aid in case of an emergency. Our half-day of training was provided by the Rescue Training Institute, and it was awesome!

We all left feeling much better prepared, and with a sense of security knowing we can now help and render first aid. Watch this short video recap of our day!

The 2022 tax season is no longer “right around the corner” – it’s now upon us! And part of this right of passage is the inevitable and time-consuming process of tracking down your various tax forms and other pieces of tax information.

If you are a Towerpoint Wealth client, then you are also a client of Charles Schwab, as we have chosen to partner with Schwab to provide custody of our client’s assets. And the inevitable question we receive from clients this time of year:

“When can I expect my 1099’s from Schwab?”

To better answer that question, click the image below to open and download a well-assembled fact sheet offering a timeline of the expected mail dates for the various Schwab 2022 income tax forms.

Charles Schwab Mail Dates and Tax forms guide

Additionally, Schwab’s Tax Resources page has a plethora of useful information to help you make tax time a little smoother, plus important tax law changes that may affect your investment and tax planning decisions.

Useful and interesting content we’ve read over the past two weeks:

Get Used to Face Recognition in Stadiums

Wired – 2.2.2023

While Madison Square Garden came under fire for using the technology, other venues are exploring their own uses of face algorithms, raising privacy concerns.

Calorie Restriction Slows Pace of Aging in Healthy Adults

Columbia School of Public Health – 2.9.2023

Eating less could help you live longer, a study found. Experts say slashing calorie intake slows the ageing process and reduces the risk of an early death.

Scientists think eating too many calories causes cells to age faster. It could even boost your health as much as quitting smoking. Researchers at Columbia University in New York looked at age-related damage on the DNA of 145 people after telling them to go on a diet for two years

More than 150 Years Later the Hunt for Gold is Still On in NorCal. This Year’s Winter Storms Bring a New Fever!

KCRA3 – 2.8.2023

The recent heavy rains in the Sacramento Valley created flooding in many of the streams and rivers. It also pushed gold from the mountains down into the valley, leading to a bit of a gold rush. It’s a modern day treasure hunt!

State Of The Union Visualizing Governments 2022 Budget

Our current I.O.U. – $1.4 trillion!

The latest budget from the US Treasury reveals that, in fiscal year 2022, the federal government collected nearly $5tn in revenue, with more than 50% of that coming from individual income taxes.

However, the US government spent even more, leading to a nearly $1.4tn deficit.

To make up the difference the US government does what everyone who overspends their budget does — they borrow. This then adds to the already enormous tab (AKA the national debt), which currently sits at the $31.4 trillion debt ceiling limit, a topic which received a fair amount of audience participation when brought up in Biden’s SOTU speech.

With a debt pile that big, the interest payments aren’t small. Indeed, last year the US government spent ~$480 billion on net interest payments!

* Thanks to Chartr for the infographic and commentary.

Owning stocks is like having children- don’t get involved with more than you can handle.

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

Follow TPW on LinkedIn
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Connect with Towerpoint Wealth, your Sacramento Financial Advisor, on any of these platforms, and send us a message to share your preferred charity.

We will happily donate $10 to it!

Six Reasons Why Estate Planning Is Important for Everyone

Towerpoint Wealth January 27, 2023 No Comments

6 Reasons Why Estate Planning is Important 01.27.2023

“I’ve got a will, I’m in good shape.”

“I know why estate planning is important – I’ll get around to it soon.”

Have you been putting off your estate planning? Why not make 2023 the year you get your estate in order?

The thought of planning around your incapacity or death can oftentimes feel like too much to contemplate, and thinking about the meaning of intimidating legal jargon can quickly lead to distraction and procrastination. However, while rarely at the top of a “to-do” list, most investors recognize the importance of proper estate planning, even if deferring or flat-out avoiding the creation of a thoughtful and customized estate plan is a huge error we see made time and time again.

Having an estate plan is not just for those who are wealthy or who are in their later years, as there is an abundance of reasons why estate planning is important. And as you will see below, estate planning is more than just having a collection of documents that specify how you want your assets distributed upon incapacity or death.

It is important to have a foundational understanding and working knowledge about fundamental estate planning documents. Want to bone up? The 411 on Estate Planning read our financial guide.

If you have any assets to leave behind, and people important to you, then read on – here are six reasons why estate planning is important!

1. To protect your children.

If you die, or become incapacitated, would you prefer to have a probate court appoint a legal guardian for your children and other dependents, or would you prefer to dictate who takes care of them? Clearly a rhetorical question.

Without an estate plan, the court will be making these decisions. And if a minor child has no surviving family members, and a third party such as a family friend does not step up, the child could end up in foster care.

2. To protect YOU.

What happens if you are incapable or unable to manage your own legal or financial affairs? Unless you have a durable power of attorney (one component of a well-assembled estate plan) the probate courts will get involved. This is time consuming, expensive, and tedious. Can you be certain about the court’s capacity to truly act in your best interests?

Why estate planning is so important | Advance Directives

Additionally, having a healthcare proxy grants someone permission to make healthcare decisions for you if you are incapable of making them for yourself. Don’t have one? Fingers crossed that someone the probate court appoints, or a random hospital staffer who is unfamiliar with you and your wishes, may be in charge of you and your health. Also known as a living will, it is extremely important to have an updated one in place.

3. To protect against overpaying taxes.

While estate planning is oftentimes associated with the wealthy because of federal estate taxes, there is a much lower economic bar to being subject to state estate and inheritance taxes, depending on the state you live in.

The current federal estate tax exemption for 2023 is $12.92 million per individual. This is the amount you can pass on at your death and be exempt from federal estate and gift taxes. If you are a married couple, you can pass almost $26 million in assets tax free.

However, this exemption will revert back to $5 million (adjusted for inflation) per individual in 2026, and more people will be subject to it.

Additionally, while California surprisingly does not, 12 states (and the District of Columbia) do impose a state estate tax, and six states impose an inheritance tax, usually with much lower financial thresholds than the federal levels mentioned above. Massachusetts and Oregon tax estates valued at more than $1 million, and in Nebraska, heirs may pay inheritance tax on anything over $10,000 (depending on their relationship to the decedent).

13 states with a State Estate Tax, six states with State Inheritance Tax

4. To avoid probate and protect against wasting time and money.

Probate is the court-supervised legal process of authenticating, validating, and administrating your will (if there is one), assessing the value of your assets, paying off debts, and then distributing the remainder to whom the probate court deems to be your rightful heirs.

Sound complicated and tedious? Probate usually is, costing your family and loved ones time, stress, and money. However, the good news is that it is avoidable! Simply create a revocable trust and retitle your assets into its name during your lifetime, and any asset titled in the trust is a “probate-free” asset.

Click the image below to watch our educational video

5. To restrict your assets from and protect against the bad decisions of other family members.

Owning and holding assets in the name of your revocable trust is a good safety measure for not only you, but for your family as well. Establishing clauses on when and at what age beneficiaries may receive your assets is a powerful tool, as is dictating who will act as the trustee.

Additionally, with a well-assembled estate plan, you have the ability to ensure that your assets go to your children or grandchildren rather than to a spouse’s new partner or other family members, cutting out unwanted inheritors.

6. To protect your privacy.

Probate is public, and if your will goes to it, it becomes public record. Unless you don’t mind everyone knowing about your financial position, information, beneficiaries, and intent, you want to do everything to avoid it!

These six reasons for ensuring that you have a comprehensive and documented estate plan and strategy should eliminate any question of why estate planning is important. People always think they have enough time left for planning like this, until they don’t.

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

We wrote about the many wealth-building opportunities and retirement planning considerations created with the passage of the brand-new Secure Act 2.0 in our December 23, 2022 Trending Today newsletter, which was very well-received by our clients, colleagues, and friends.

Understanding this interest and demand, we created a CliffsNotes version of what we feel to be the major and most important provisions of Secure Act 2.0.

Here are some of our top trending moments at Towerpoint you might have missed on our social platforms.

Click the images below!

What else is happening with the Towerpoint Wealth family?

Tax season is right around the corner. And with it will come the inevitable onslaught of forms, schedules, and statements. The centerpiece in this tax paperwork deluge are your 1099s.

What exactly is a Form 1099, why can they be so frustrating to process, and importantly, how do you manage the problem of receiving a late, amended one? Click below to read our white paper and find out!

Click below to begin a dialogue with Steve Pitchford, Director of Tax and Financial Planning.

Useful and interesting content we’ve read over the past two weeks:

Your Stuff is Actually Worse Now

Vox – 1.4.2023

Consumer goods have faced a dip in comparative quality. All manner of things we wear, plus kitchen appliances, personal tech devices, and construction tools, are among the objects that have been stunted by a concerted effort to simultaneously expedite the rate of production while making it more difficult to easily repair what we already own, experts say.

How an Alaskan ‘Puppy Bus’ Went Viral

NPR – 1.24.2023

Mo Thompson never planned to be a dog walker — and she definitely didn’t plan to go viral on TikTok. But recently, her videos of the pups she walks have racked up millions of views, especially the ones showcasing how she picks them up: the puppy bus.

“They’re getting on the bus and they get in their seat, and the Internet just lost it,” she said. “50 million views. That was wild.”

The Fiscal Arsonists

Noahpinion – 1.22.2023

I regret to inform you that once again, people are playing weird political games with the U.S. fiscal system.

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

Understanding that 2022 was the worst year ever for bonds, BlackRock’s chart below gives us optimism that 2023 will be better.

Black Rock illustrates the 10 worst years for US Bonds

Frank Zappa | A mind is like a parachute

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics

Follow TPW on LinkedIn
Follow TPW on YouTube
Follow TPW on Facebook
Follow TPW on Instagram
Follow TPW on X

Connect with Towerpoint Wealth, your Sacramento Financial Advisor, on any of these platforms, and send us a message to share your preferred charity.

We will happily donate $10 to it!

Towerpoint Wealth January 11, 2023 No Comments

Fortunately, the Market’s Past Performance in 2022 is No Guarantee of Future Results! 01.11.2023

As our clocks struck midnight this past Saturday, advancing from 2022 into 2023, many investors were eager to turn the page on what was a grinding, unsettled, and very difficult year in the financial markets. The only good news that can be taken from the 2022 investor experience? Fortunately, past performance is no guarantee of future results!

Stocks, as represented by the S&P 500, finished 2022 down just shy of -20%:

Bonds, typically the “Steady Eddies” of a properly diversified portfolio, did not fare much better, with 2022 being one of the worst years for bond returns in h The US Federal Reserve raised (“tightened”) its target short-term interest rate seven times to fight inflation, from 0.25% to 4.50%, representing an unprecedented pace of increases in such a short period of time for the 109-year-old central bank.

This interest rate tightening led to historically poor returns for bonds in 2022. Long-term US Treasuries were down -31.2%, and the Bloomberg US Aggregate Bond Index (the Agg), a broad measure of the overall bond market, had its worst year on record, down -13%.

Except for those holding cash, or commodities or energy stocks, 2022 was an awful year for the capital markets, one that virtually all of us would like to forget. This has caused many investors to ask – with 2022 as bad as it was, will 2023 be similar?

Below we will explore how recency bias can lead to poor and irrational financial and investment decision-making, oftentimes because investors FORGET that past performance is no guarantee of future results!

As we exit 2022, what were the major headlines for the year that drove this volatility?

Here at Towerpoint Wealth (TPW), we believe what’s past is prologue, and in light of the difficult year that investors had to endure in 2022, we are certain that many will exhibit recency bias when thinking about the future of their investments, portfolio, and overall status of their personal net worth.

We also believe that doing so is a mistake.

Is it reasonable to believe that 2022’s poor market performance repeats itself in 2023? We believe no. Does having recency bias oftentimes lead to short-sighted and poor financial planning and investment decision making? We believe yes. And while historical patterns are important, and will always shape how investors feel about the future of their portfolios and investments, our core TPW wealth management philosophy leads us to counsel and work with our clients to be disciplined, to remain level-headed, to have a plan, and to objectively execute on it.

The common investment disclaimer rings particularly true to us here at Towerpoint Wealth as we move into 2023: Past performance is no guarantee of future results.

Put more succinctly: We strongly encourage you to not fall prey to recency bias!

Lastly, there will always be the temptation to deviate from your plan, to not be disciplined, and to capitulate and sell to “stop the bleeding.” Much more often than not, these choices are strongly influenced by recency bias, and considered at the worst possible time – when prices are temporarily low. If you notice yourself feeling this way right now, we encourage you to reach out to us, and/or click the report found below.

Here’s to a productive and hopefully profitable 2023. We can’t wait to see what the new year has in store for all of us!

Have questions or concerns? Message us to share them,
and let us know you’re interested in learning more.

Click the Wealth Management Philosophy thumbnail image below to learn more about exactly how we help our clients save and invest for retirement while minimizing taxes.

Our TPW family continues to grow as we prepare for an exciting new year in 2023!

Just three short weeks ago, we happily welcomed our new Associate Wealth Advisor, Megan M. Miller, EA, to the firm.

We feel extremely fortunate to have this experienced, caring, talented, highly ethical, engaged, and organized professional joining the Towerpoint Wealth team, and encourage you to click the image below (and also hit that thumbs up button on YouTube!) to find out more about Megan. Hint – she’s awesome!

Here are some of our top trending moments at Towerpoint you might have missed on our social platforms.

Click the images below!

What else is happening with the Towerpoint Wealth family?

He is one of the most successful investors in the world for a reason – Warren Buffett is the epitome of value and disciplined investing!

Click the image above to watch an excellent video reel of Warren, riffing on his optimism about America, the importance of buying low (and also when people are scared), and why trying to predict the future is futile. A few excerpts:

“I bought stocks after 9/11.” | “I bought stocks in 1987 after the big crash and the fall.” | “The country’s not going to go away.” | “The country will grow in value over time.” | “Now… who gets it is another question!” | “It’s a terrible mistake to buy or sell stocks based on what you think business are going to do next month, even next year.”

Are you self-employed? Looking for opportunities to lower your taxable income while building personal net worth?

Traditional employees with W-2 income usually have an omnipresent income tax deduction available to them: Making traditional, pre-tax 401(k), 457, or 403(b) contributions.

Conversely, if you are self-employed, you are not an employee, and will not have a company-sponsored retirement plan to contribute to. However, all is certainly not lost if you are a sole proprietor, as there are a number of powerful self-employed retirement plan options available to you to reduce your taxable income while growing your portfolio and nest egg, arguably better than the traditional retirement plans offered to W-2 employees!

Click the image below to better understand the differences, advantages, and disadvantages of “crawling” via a

1.) SIMPLE-IRA, “walking” via a

2.) SEP-IRA, “running” via a

3.) OnePersonK or Solo 401(k), and “flying” via a

4.) personal defined benefit plan (DBP), as each type of account offers self-employed individuals a tremendous opportunity to save money on taxes and build wealth.

Are you self-employed, and would like to learn more about strategies still available to you to REDUCE your 2022 income taxes? Click below to begin a dialogue with Steve Pitchford, Director of Tax and Financial Planning.

Have more questions? Contact us or click below to message our Director of Tax and Financial Planning, Steve Pitchford, to request a complimentary analysis.

1. How SpaceX’s Starlink terminals first arrived in Ukraine

Quartz – 12.22.2022

Weeks before Russia invaded Ukraine, the US began scrambling to find satellite communications equipment that could keep the Ukrainian government connected to the rest of the world, new documents reveal.

Those efforts resulted in thousands of satellite-antenna terminals that connect to SpaceX’s Starlink broadband internet network being sent to Ukraine. They have proven vital to Ukraine’s war effort, but became a source of controversy for both SpaceX and the US over the service’s cost, and who is paying for it.

2. Lawmakers Say McCarthy Speaker Fight Portends Debt Ceiling Crisis

The Hill – 1.6.2023

The messy, drawn-out battle over electing the next Speaker is raising the danger of a debt limit crisis later this year, lawmakers in both parties warn.

Conservative rebels in the House are demanding that the next Speaker, whether it’s Rep. Kevin McCarthy (R-Calif.) or someone else, make a stand against passing a clean debt limit increase, which would set up a major fight with Senate Democrats and President Biden.

3. Freudenschaude (Freudenfreude)

Barry Ritholz, The Big Picture – 1.2.2023

As the new year begins, perhaps we would all be better off if we engaged in less Schadenfreude and more Freudenfreude. Let’s stop taking delight in other people’s misfortunes, and recognize that there but for the grace of God go I. Let’s recognize how rare and fragile success is, and revel in it – even if that means there is no increase in our bank accounts, our follower numbers, or our status among the neighbors.

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

For this edition of Trending Today, it’s not a chart, but a graphic.

“For success, attitude is equally important as ability.”

– Walter Scott

If you speak with someone who is concerned or unsettled about their investments or advisor, we welcome talking with them.

Joseph Eschleman
Certified Investment Management Analyst, CIMA^®

Steve Pitchford
CPA, Certified Financial Planner^®

Nathan P. Billigmeier
Director of Research and Analytics