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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.

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

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Investing Tips

Twenty Tips for No-Nonsense Investing

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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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Questions to Ask if Building Wealth is the Task 05.28.2021

As we sit on the eve of 2021’s Memorial Day Weekend, 73% of those in a Quinnipiac poll said their plans are similar to the ones they had pre-pandemic. The light at the end of the pandemic tunnel is getting brighter and brighter by the day!

building Wealth Questions to Ask

We’re looking at plunging COVID-19 case and death rates and widening vaccination uptake rates here in the United States, in addition to an uptake in exuberance and economic optimism by investors that has driven the stock market to all time highs. And, as is typically true during periods of market extremes, the talking heads, market strategists, investment gurus, and even your brother-in-law Frank seem to have all the answers as to why this is happening, and what lies around the corner. Our advice to you: Ignore this nonsense, and ignore them all.

Rather than become enamored by these predictions and/or fall prey to a well-articulated story spun by a seemingly well-credentialed “expert,” we encourage you to tune out this noise, and not worry nor think too much or too hard about interest rates, cryptocurrencies, inflation, China, large caps and small caps, mask mandates, or the U.S. deficit. Don’t worry about what the “new normal” means, and don’t get too worked up about “getting your share” of the possible American Jobs Plan or the American Families Plan stimulus packages (we’re purposefully not even linking to any of these themes). Instead, let’s channel our energy and attention into things that we have control over.


While we do believe you should always be ready for the unexpected, we also feel it is way more important to understand and internalize a number of foundational investing and wealth building principles. Ask yourself if you can succinctly and confidently answer the following questions:

  • Can I remain objective and rational, and recognize when you are being fearful, greedy, and emotional about your money? Your worst investment enemy is usually found by looking in the mirror. The limbic system is a wonderfully complex set of brain structures that deal with emotions, but activating your fight or flight response in reaction to fear, greed, and anger is not conducive to successful investing or successful longer-term wealth building. 
  • Do I understand that my neighbors, friends, and co-workers are perhaps confused and delusional? Not only do they probably spend too much and boast too much about their portfolio, but the chances their financial decisions are rooted in any of the principles listed here are quite low.
  • Am I trying to simply make money, or am I working to build and protect my wealth? We equate the former to gambling, and the latter to investing. While anything can happen on a daily, weekly, monthly, and even annual basis, we believe your odds of success increase significantly if you establish and follow a disciplined longer-term wealth building plan.
  • What am I doing to proactively insulate my downside from a major catastrophe during a market correction? We believe this is way more important than hitting a home run during a period of market strength. While his two rules are a bit binary, the spirit of Warren Buffett’s quote should resonate:
  • Why am I investing, and do I have a plan? For obvious reasons, it is invaluable to not only think through, articulate, and quantify the goals and vision you have for your and your family’s future, but also to have a methodology for how you attend to your personal financial decision-making. And this methodology will be different than your friend’s, neighbor’s, or co-worker’s, as we all obviously have different things that motivate us and that we ultimately want out of life. This is assuming that your friend, neighbor, or co-worker even has a plan at all.
  • Do I recognize that costs, fees, expenses, and taxes matter? At Towerpoint Wealth, we call them “necessary evils” to helping clients grow and protect their net worth. And while we can never eliminate the drag that costs, fees, expenses, and taxes creates, we certainly can work to identify, and reduce, these friction points.
  • Am I aware that saving money is the single most effective way to build my wealth and to retire? While you need to have balance between saving for tomorrow and living your life today, the capital you spend today is capital no longer available to fund your retirement. Saving money equals peace of mind.

Towerpoint Wealth Turns Four!

On May 26, 2017, with zero clients and $0 in assets under management, we officially launched Towerpoint Wealth. Classified as a “bold,” “risky,” “fearless,” and “courageous” decision by our clients and colleagues, it fortunately turned out to be a prescient and extremely positive one based on the feedback we continue to receive and strategic growth we continue to experience.

Today, we are approaching $350 million in assets under management, and continue to be thrilled to serve YOU, always striving to expand your peace of mind by helping you remove the hassle of properly coordinating your financial affairs.

What’s Happening at TPW?

The Towerpoint Wealth crew recently spent some time in a professional photo shoot with Tim Engle, of Tim Engle Photography – below is one of our favorite shots from the session.

We hold our collective noses to the grindstone at Towerpoint Wealth ~ 97% of the time. However, the culture we have built at the firm is also predicated on spending time outside the office and having fun together as a work family, which is why we regularly schedule fun teambuilding events.

We had an enjoyable “hooky afternoon” earlier this month, pedaling through midtown Sacramento on the Sacramento Brew Bike, with pit stops at Public House DowntownKupros, and The Golden Bear. A well-behaved and fun afternoon!

TPW Service Highlight – RETIREMENT – Building wealth

We only semi-jokingly say that you can retire any time you want, but will you be able to with the lifestyle and income stream you desire?

At Towerpoint Wealth, we believe that everyone deserves a secure retirement, and we stand ready to help you with a myriad of retirement-specific tools and planning considerations. The cornerstone of this process is the development of a customized retirement and financial plan using our modeling software from RightCapital(R).

Click HERE to review a sample customized RightCapital financial plan.

Additional retirement-specific services include sustainable and tax-efficient retirement income planning, “black swan” event planning and modeling, customized Social Security benefit election optimization analysis, corporate pension modeling and optimization, fixed/variable/immediate annuity analysis, and optimal-retirement-age projections.

Chart of the Week

Real estate values continue to be on fire! Click HERE to watch an excellent video in which our President, Joseph Eschleman discusses the white hot Sacramento real estate market with long-time Sacramento realtor, Brian Kassis.

And while there is no question about the tremendous price increases homeowners have experienced over the past year and a half, the chart below makes an interesting comparison between the value of the stock market (using the S&P 500 as a proxy) and the value of residential real estate (using the Case Shiller U.S. National Home Price Index as a proxy) over the past 30 years.

Understanding the importance of owning both real estate AND equities when working to build net worth, and recognizing that people seem to be more relational to the increases in the value of their home, the chart below from Visual Capitalist is an eye-opener!

In addition to home prices going up and U.S. COVID numbers going down, 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.

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

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Is Your 401(k) in Disarray 03.29.2021

As a small business owner, we know that you are an “around the clock” grinder, with a myriad of responsibilities that often supersede the core responsibilities you have to the growth of your business. And understanding that a regular review of your business’s retirement plan may not be a top priority of yours, at Towerpoint Wealth we have created this 401(k) “healthcheck” for your benefit. We regularly come across 401(k) and other company-sponsored retirement plans that, as currently structured, are in serious need of attention and improvement, and we are experienced in helping you, as a trustee and fiduciary to your company’s retirement plan, minimize the hassle of giving your plan the attention it needs.

Is your 401(k) plan structured and optimized properly to help you and your employees maximize the myriad of economic, investment, and tax benefits? Are you properly managing your fiduciary responsibility? Ask yourself the questions found below to quickly gauge whether your 401(k) needs adjusting or improving.

 Does my plan have a safe harbor structure?

You want to ensure that your 401K) retirement plan passes the annual non-discrimination testing conducted by the IRS. In its simplest sense, non-discrimination testing ensures that an employer is making contributions to each employee’s retirement account that equals the same percentage of salary for everyone. Importantly, if a plan fails a non-discrimination test, the 401(k) may lose its tax-qualified status.1

Retirement Plan 401(k) Disarray Towerpoint Wealth White paper 2021

[1]The most common reason a 401(k) plan fails this non-discrimination testing is when one or more of the business owners make much greater 401(k) contributions compared to their employees.

A safe harbor 401(k) plan structure ensures that you meet the non-discrimination regulatory requirements by following strict guidelines specific-to employer plan contributions, participant disclosures, and much more. 

Does my plan have a profit-sharing component and if so, am I optimizing its structure?

For a business owner to maximize the personal net worth building benefits associated with sponsoring a company retirement plan and receive the maximum 401(k) annual contribution amount of $58,000 in 2021[1] (employee deferrals + employer contributions), pairing a profitsharing component in the plan’s design is essential.

All profit sharing plan structures – same dollar amount, comptocomp, new comparability, etc.[2] – are not created equal. In particular, the new comparability strategy is becoming increasingly more common in modern 401(k) plans as this type of profit-sharing plan allows for unique flexibility in allocating the profits among the business owner(s) and employees.

Is my investment fund lineup optimized?

401(k) investment fund lineups vary from basic to advanced and passive to active. And with employees having better and more diverse investment options outside of 401(k) plans, annually reviewing your company’s fund lineup for improvements is critical to ensure that employees do not look to invest their hard-earned dollars elsewhere, and also to meet your fiduciary responsibility as plan trustee.

It is also a requirement that a business owner (usually with help from an investment professional) formulate, and review at least annually, an investment policy statement (IPS) for their 401(k).

Is my ERISA fidelity bond fund amount appropriate?  

The Employee Retirement Income Security Act (ERISA) requires 401(k) plans to hold a fidelity bond, which protects the plan from losses resulting from improper handling of the funds.

While fidelity bonds are generally inexpensive for the coverage offered, we often see the amount protected as either 1.) inadequate or 2.) overkill.  

[1] Increased to $64,500 for business owners 50 years of age or older.

[2] There are often several different terms that refer to the exact same type of profit-sharing structure.

Does my plan currently allow for after-tax Roth contributions?

While changing for the better, many 401(k) plans still do not allow after-tax Roth contributions. 

For business owners and employees that are in a temporarily low income tax bracket –  a business owner “winding down” and closing in on retirement or a younger employee at the beginning of their career and earning curve – offering an after-tax Roth contribution option, particularly given it typically costs nothing to do so, is a valuable and often overlooked plan benefit.

Is my vesting schedule appropriate?

Retirement Plan 401(k) Disarray Towerpoint Wealth White paper 2021

In order to incentivize employees to stay with your company, having a vesting schedule for any  employer-matching profit sharing contributions that is not overly generous is important. For a number of Towerpoint Wealth’s clients who are business owners, a vesting schedule of six years (with 0% vesting in the first year of participation) is appropriate, but each business and retirement plan is unique.

Have I considered automatically distributing an employee’s 401(k) balance when they leave the company?

Many 401(k) plan administrators charge their fees based on the number of employees that the plan has. 

In order to keep fees to a minimum, it is advisable to consider automatically distributing account balances below a certain threshold when an employee separates from service.

Am I managing my fiduciary responsibility and minimizing my fiduciary liability?

All business owners who offer a 401(k) for themselves and their employees have a fiduciary responsibility to ensure that they are acting in the employees’ best interests, being prudent, diversifying plan investment assets, and adhering to all provisions of the retirement plan documents.

There are concrete steps that a business owner can take to uphold their fiduciary duty and at the same time, minimize their fiduciary liability.

Retirement Plan 401(k) Disarray Towerpoint Wealth White paper 2021

Wealth management firms that specialize in helping business owners optimize their retirement plans, such as Towerpoint Wealth, are able to help guide you through these murky waters.

Am I doing everything I can to maximize my own personal net worth within my company’s retirement plan?

Even if a small business owner has a well-structured plan that meets everyone’s needs, is it important to remember that 401(k)s, and other types of company-sponsored retirement plans, are uniquely customizable. And often, there are overlooked plan features that may help the business owner maximize their ability to accumulate wealth within the plan. 

One of these particularly powerful features is allowing for after-tax deferrals (not the same as after-tax Roth deferrals), which then affords the business owner to take advantage of the “Mega Backdoor” Roth IRA strategy.

Some other questions that are worth your thoughtful attention: Do I allow for hardship distributions and if not, should I? What about allowing rollovers from other retirement plans? Is it risky to offer loans to employees? Are my plan’s expenses and fees reasonable?

How Can We Help?

Steve Pitchford, CPA, CFP®
Director of Tax and Financial Planning

At Towerpoint Wealth, we are a legal fiduciary to you, and specialize in optimizing retirement plan structures for business owners.. If you would like to speak with us regarding any other tax questions you may have, we encourage you to call (916-405-9166) or email (spitchford@towerpointwealth.com) to open an objective dialogue.

Towerpoint Wealth, LLC is a Registered Investment Adviser. This material is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Towerpoint Wealth, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Towerpoint Wealth, LLC unless a client service agreement is in place.


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Choosing Who Will Inherit Your Retirement Accounts

You are working on your estate plan, and trying to figure out who you should name as the beneficiary of your 401k account and IRAs. Simple – the kids, right? Not so fast.

Click to watch the video below from our Wealth Advisor, Matt Regan, to learn the non-spouse beneficiary distribution rules for inherited and pre-tax IRAs and “regular” pre-tax 401ks, and why understanding these rules are so important for income tax and estate planning purposes.

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Funding a “Backdoor” Roth IRA

Do you have the enviable problem of NOT being able to contribute to a tax free Roth IRA every year because you make too much money?

Click to watch the video below from our Wealth Advisor, Matt Regan, to learn how you can go through the back door and still fund a *tax-free* Roth every year!

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Is There a Vax to Protect Your Portfolio From Tax?

2016 survey of 1,000 taxpayers, conducted by WalletHub, found that, if told they never had to pay income taxes again, 27% of respondents would brand themselves with a tattoo that says “IRS” and 11% would gladly drive to Chipotle every single day for three years to clean its toilets. You can’t make this stuff up!

And while there is credible evidence and research that suggests people actually like paying taxes (click HERE to read a Psychology Today article about this “phenomenon”), in our 23+ years helping clients properly build and protect their net worth and wealth, we have yet to encounter a single client, prospect, colleague, or friend who fits this category. While we may intellectually understand why we have to pay them, most of us seem to emotionally detest it.

At Towerpoint Wealth, we recognize (and embrace!) our bias in working with and helping our clients towards achieving the goal of growing and building their assets as intelligently and as efficiently as possible. Understanding there are a myriad of road blocks, speed bumps, and hazards to account for while on this journey, we also recognize and coach our clients to understand that there are two major, and unfortunate, “necessary evils” that stand in the way of accomplishing this goal:

  • Fees, costs, and expenses
  • Taxes

And while neither of these is completely avoidable, intelligently reducing the drag of either one directly helps your portfolio get better gas mileage. Below are two simple examples to illustrate that point:

To be clear, we have encountered those who let the “tax tail wag the dog” and seemingly focus more on tax avoidance than net-worth building; our preference will always be to help our clients maximize their after-tax wealth, which does pair with having a tax bill every year. However, it also pairs with being directly mindful about keeping your obligation to Uncle Sam to an absolute minimum whenever and wherever possible.

The 2020 tax season is right around the corner, and with it will come some inevitable surprises for those who didn’t properly plan, or who were ignorant of certain aspects of and/or changes to their global 2020 income tax situation. And understanding the interest, dividends, and capital gains that will soon be showing up on your 1099 forms, (all of which report taxable income to the IRS), we encourage you to use the resources found at the bottom of this newsletter to your advantage, and to contact us (click HERE) if you encounter any unwanted 2020 “tax surprises,” or feel you would benefit from a fresh perspective on how to leverage and maximize ideas and opportunities to make your portfolio, and your life, more tax efficient.

What’s Happening at TPW?

Our Wealth Advisor, Matt Regan, working hard as usual from home right now, along with little Mason and Stevie, his loyal friend!

Directly reflecting the firm’s culture, Towerpoint Wealth is a family both inside and outside the office, as our Partner, Wealth Advisor, Jonathan LaTurner, our Client Service Specialist, Michelle Venezia, our President, Joseph Eschleman, and our Director of Tax and Financial Planning, Steve Pitchford all enjoyed a fun day hanging out together and watching Super Bowl LV!

TPW Service Highlight – Tax-Managed Portfolio Management

In addition to investment expenses, income taxes are the second of the two necessary evils we face when helping you grow, and protect, your net worth and assets in the most effective and efficient way. Taxes can severely impact investment returns if not monitored, scrutinized, and controlled. And while we never let the “tax tail wag the dog,” at Towerpoint Wealth we do maintain a specific focus on helping our clients absolutely minimize the tax impact of their investments, portfolio, and overall financial decision-making.

Utilizing low-turnover mutual funds, ETFs, and separately-managed accounts, taxable versus tax-free bonds, strategic tax-loss harvesting, tax diversification, and the asset location strategies discussed in Steve Pitchford’s MoneySavage podcast featured below helps us help our clients significantly reduce the income taxes they pay on their investments.

Issuance of 2020 Charles Schwab 1099s 

A brief but important reminder for our Towerpoint Wealth family of clients: Initial Form 1099 production is based on two different waves at Schwab, with the vast majority (85%+) produced in the second wave:

Chart of the Week

The population exodus from high-tax states like California, New York, and New Jersey is very real, as a migration to other, oftentimes lower-tax states happens when individuals do not feel they are getting enough value for the taxes they are paying.

Federal and state income taxes are unfortunately a necessary evil when working to grow and protect your net worth, but working to manage and minimize your “obligation” to the taxing authorities is one of Towerpoint Wealth’s core competencies. Click HERE to message us and learn more about specific strategies to *reduce* your income tax pain.

Trending Today

In addition to tax drag and Super Bowl schwag, a number of trending and notable events have occurred over the past few weeks:

As always, we sincerely value our relationships and partnerships with 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 complicated place, and we are here to help you properly plan for and make sense of it.

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

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Five Things I Wish Someone Told Me Before I Became A Founder 02.12.2021

Our President, Joseph F. Eschleman, CIMA®, was interviewed by Candice Georgiadis, a contributing writer to Authority Magazine, as part of her series about leadership lessons of accomplished business leaders. Joseph’s story and message does an excellent job of summarizing not only how passionate and driven he is as President and founder of Towerpoint Wealth, but also the grit, tenacity, and hard work it takes to build and grow an individual advisory practice, and to then pivot, and ultimately build and grow a $300 million boutique wealth management firm.

Click HERE to read the Joseph Eschleman / Towerpoint Wealth story!

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Cryptocurrency – Wait, I Have to Pay Taxes??!!

Do you own/trade cryptocurrency? Interested in investing in BitcoinEthereum, or any of the other 4,000 cryptocurrencies currently available to own and trade?

If so, it is important you understand the income tax consequences of owning crypto.

If you are thinking about buying, selling, or trading cryptocurrencies, watch this quick video from our Wealth Advisor, Matt Regan, to learn the tax consequences of doing so.


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Suitability vs. Fiduciary

When hiring a financial advisor, you expect him or her to always act in your best interests, 100% of the time, right? Unfortunately, this is not always the case. Click below and watch a quick video from Matt Regan, and learn about the important difference between the fiduciary standard and the suitability standard, how they can impact your financial and wealth management plan, and ultimately, your success in growing and protecting your net worth and assets.