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L.A.F.F. LAW ADVOCACY FAMILY FINANCE A monthly newsletter providing your family insight about the law and finance (with an occasional dose of humor) from your friends and advocates at DuPont Wealth Solutions and the Law Offices of DuPont and Blumenstiel.
18 FEB
FRIENDS TO LOVERS HOW I MET MY VALENTINE
I am one of those lucky guys who can say with certainty that I married my best friend. It seems like getting to know someone and courting them often get intermingled at the outset of a relationship. Not so with Julia and me. We were friends, then confidants, and finally lovers over our many years of knowing one another. You see, I’ve known Julia since high school. We ran in the same circle of friends and saw each other basically every day of the week. We hung out a lot but dated other people. Things stayed platonic until well after we graduated. It was when we got to college that sparks began to fly.
“APPARENTLY, MY SUBCONSCIOUS PLANWAS TO GET JULIA TO FALL FOR ME BY PROCESS OF ELIMINATION. ENOUGH BAD DATES, AND HER OLD FRIEND FROM HIGH SCHOOL WOULD LOOK LIKE QUITE THE CHARMER, RIGHT?"
We both went to Ohio State and found ourselves involved in its active Greek life. That was when we became more than friends. Not lovers, mind you, but perhaps something just as valuable — drinking buddies. More times than I care to admit, we sat at college bars or the frat house porch and simply enjoyed our time together. Somewhere along the way, I started to develop feelings for her. This was awkward, because at about the same time, my friends were asking me to set them up with her.
good laugh when remembering my romantic “ingenuity.” Eventually, I came to my senses and cut out the middlemen. I asked her out during our junior year, and the rest is history.
Julia and I have now been happily married for over 27 years. The secret to our success is the
many years of friendship we were blessed with before becoming a couple. We got to see the good, the bad, and
This was one heck of a predicament for a young man. On one hand, the dates were mostly harmless (except for an ill-fated canoe trip that is a story for another day). On the other, I wanted to be that date. Like many men, I was be pretty clueless when it came to the dating and love rituals. Because, in youth, we feel the need to complicate everything, I chose to engage in subterfuge. Rather than coming out and asking Julia on a date, I set her up on dates with friends. There were no Prince Charmings among them. Most were fraternity brothers, next to some of whom I looked very impressive. Apparently, my subconscious plan was to get Julia to fall for me by process of elimination. Enough bad dates, and her old friend from high school would look like quite the charmer, right? We both have a
the ugly in one another as we grew into adulthood. Having those underlying roots of friendship allowed our marriage to blossom into something really special. Julia, I’m so glad you came into my life when you did. Very few people can say with such confidence that they married their best friend. Looking back over our life together, it’s hard to believe we could be anything but soulmates. Over the years, we’ve been friends, confidants, lovers, parents, and now co-workers. This year, will you be my valentine?
-Greg DuPont
Wealth Solutions www.dupontwealth.com | Law Office www.DandBlaw.com | 1 Published by The Newsletter Pro . www.TheNewsletterPro.com
INVEST IN YOUR GRANDCHILD’S EDUCATION ARE 529 PLANS RIGHT FOR YOU?
There are many strategies out there for folks who want to invest in their grandchildren’s education. Different options may be more attractive than others depending on your income bracket and the needs of your family. Traditional strategies, like life insurance policies or paying for your grandchild’s schooling directly, only work if you have the capital. Furthermore, those methods can often negatively impact how much financial aid your grandchild qualifies for. Before you commit yourself to one of these paths, it’s worth exploring a third option: 529 saving plans. 529 plans are income tax-free savings plans specially designed to help you invest in a child’s higher education. In general, these are treated favorably by financial aid assessors, meaning you won’t hurt your grandchild’s chances of receiving government grants. There are two broad types of 529 plans: college savings plans and prepaid tuition plans. SAVINGS PLANS College savings plans use one or more investment portfolios to grow your grandchild’s tuition fund. Each portfolio contains a diversified mix of investments curated by the plan’s money manager. Most plans allow you to select from a menu of portfolio options that best fit your goals and risk tolerance. Many college savings plans start aggressive and then We always want to give our clients 100 percent. When you have an appointment to talk about your case, you have our full, undivided attention. We’ll have all relevant documents on-hand, and your case file will be fresh in our minds. Being on the same page does wonders to expedite the legal process. We’re not here to waste your time rehashing details. Which is why we won’t take phone calls while we are in meetings with clients. The last thing you’d want is for us to get pulled away from our meeting with you to talk to someone else about a completely different case! This can be hard to understand if you’re the one placing the phone call. Your lawyer is supposed to be there for you no matter what, right? If you’re handling an emergency, it can be especially difficult to be told to schedule an appointment. In matters of health and wealth, when you need to talk to a lawyer, you NEED to talk to a lawyer. So why don’t we take your incoming call? Simple: It’s the best way to serve you. The only thing worse than not having a lawyer is having one who’s unprepared. We are fortunate to serve a diverse clientele, each with their own unique needs. If you call us out of the blue, chances are we’re going to be caught flat-footed. You might have to rehash crucial details about your case, or worse, some critical factor may slip through the cracks. HOW OUR COMMUNICATIONS POLICY SERVES YOU
become more conservative as your beneficiary approaches college age. The downside with these sorts of plans is that there will always be risk involved; there’s no guarantee on investment returns. PREPAIDTUITION PLANS States and some private institutions have 529 plans available that let you pay for your grandchild’s tuition up front, well before they are ready to head off to college. Some plans guarantee to cover a set amount of future tuition expenses in exchange for a lump sum or payment plan. Other plans allow you to buy “units” or “credits,” which translate to a fixed percentage of an institution’s tuition. Essentially, you pay the cost of tuition today rather than what it will cost by the time your grandchild goes to college. Prepaid plans are far less risky than savings plans, but they aren’t as flexible. They often limit options to state schools or select institutions, though most plans offer some form of reimbursement option if your beneficiary decides to attend another school. College just isn’t as affordable as it used to be. Knowing your options and finding a savings strategy early in your grandchild’s life can help ensure the avenues of higher education stay open for them.
DON’T COLD CALL YOUR LAWYER
In the best case scenario, this wastes your time. At worst, it could negatively affect your case’s progress.
That’s why it is our policy to always schedule telephone appointments with our clients, rather than take incoming phone calls. It ensures that you always get us at our best and that we won’t get distracted from talking about your case. You can rest assured that your scheduled meetings, be they with Greg or Braden, will be focused and productive. As a trade-off, whether you contact us by phone or email, our responses may not always be immediate. Please understand that taking these inbound communications would not only do a disservice to our clients with scheduled appointments, but to you as well. If your concern is urgent, please talk to Mike, Julia, or Heather at the office. If they are not able to take care of your needs, they will either get the answer for you or schedule a call. As part of our on-going efforts to assure that you remain informed about your case, we are implementing new processes to systematically keep you up-to-date so you don’t need to call. Stay tuned.
2 | Wealth Solutions 614.408.0004 | Law Office 614.408.0529
The simple fact is, no one wants to talk about long-term care. Yet, with rising costs and higher demand, long-term care should be a topic at the forefront of everyone’s retirement plan. The U.S. Department of Health and Human Services estimates that 70 percent of retirees will need some sort of long-term care in their life. When this is combined with the median annual cost of assisted living — $45,000 — the financial impact on your retirement becomes substantial. This begs the question: Are you prepared for long-term care? Medicare won’t cover your long-term care needs. Medicaid can assist with them, but it would require spending down all assets to become eligible, which could bankrupt your spouse. This means that long-term care will often fall to family, which can be extremely stressful and overwhelming for anyone to undertake. In some cases, family can be nonexistent or unreliable, which can leave you with a lack of long-term care options. All of this is volatile, but becomes even more dangerous when you factor in rising costs. YOU ARE RESPONSIBLE FORYOUR CARE HAVE YOU PLANNED FOR LONG-TERM CARE? DON’T BE BLINDSIDED BY YOUR RETIREMENT
RISING COSTS
The cost of assisted living or nursing facilities isn’t getting any cheaper. Depending on your state of residence, you could be paying anywhere from $3,500 to $8,000 per month just to make sure your most basic needs are met. In 2017 alone, these costs were up 3.36 percent, and they are projected to continue to rise. Overlooking long-term care in your retirement plan can put you and your family in a troublesome situation. Take the burden off your shoulders now by putting a plan in place for future prolonged medical attention. No matter where you are in your retirement plans, it is never too late to structure your wealth, ensuring you are taken care of. Contact us today and let’s put something in motion so your retirement is ready for any bumps along the way.
SUDOKU
SWEET AND ZESTY DETOX SALAD
FORTHE SALAD • INGREDIENTS
FORTHE DRESSING •
3 cups chopped kale leaves
1 large carrot, roughly chopped
•
2 cups chopped broccoli florets
•
1/4 cup rice wine vinegar
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2 cups chopped red cabbage
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2 tablespoons olive oil
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1 cup matchstick carrots
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1 tablespoon finely chopped ginger
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1 cup chopped cilantro
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1 tablespoon honey
•
1/2 cup toasted slivered almonds
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1 tablespoon white miso
•
1/3 cup sliced green onions
•
1/2 teaspoon sesame oil
•
1 diced avocado
•
Salt and pepper, to taste
DIRECTIONS
1. To make the salad, add all ingredients to a large bowl; toss to combine. 2. To make the dressing, add
salt and pepper or add extra honey for a sweeter taste. 3. Drizzle dressing over salad and serve immediately.
all ingredients to a blender or food processor. Pulse until smooth. Season to taste with
Recipe inspired by GimmeSomeOven.com
Wealth Solutions www.dupontwealth.com | Law Office www.DandBlaw.com | 3
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INSIDE How I Met My Valentine PAGE 1
Protect Your Grandchild’s Future
Don’t Cold Call Your Lawyer PAGE 2
The Biggest Threat to Your Retirement
Whip Up This Winter Salad in a Flash PAGE 3
Presidents Day or Washington’s Birthday? PAGE 4
THE TANGLED HISTORY OF PRESIDENTS DAY HOWTHE HOLIDAY CAME TO BE
On the third Monday in February, the entire nation celebrates Presidents Day … sort of. While the holiday is known colloquially as Presidents
it was expanded to include all federal offices nationwide. And for the next century or so, nothing changed.
However, in 1971, Congress passed the Uniform Monday Holiday Act. This bill officially moved holidays that were once celebrated on specific dates, like Memorial Day and Columbus Day, to a particular Monday in a given month. This allowed for three-day weekends and, hopefully, encouraged retail sales with an extra day of shopping. But this, unintentionally, moved Washington’s birthday celebration to a day between his actual birthday and the birthday of another venerated president, Abraham Lincoln. By the late 20th century, Lincoln’s reputation and legacy were as titanic as Washington’s. Because Lincoln was born on February 12, 1809, many states found it appropriate to make the day a commemoration of two great presidents rather than just one. By the 1980s, “Presidents Day” was the more widely acknowledged name, if not the official designation. Why it hasn’t received a uniform federal name is anyone’s guess, but at least when you say “Presidents Day,” everyone knows what you’re talking about. No matter what you call it, the day is a chance to celebrate some of the people who’ve made lasting contributions to our nation’s history. If you look at any presidential ranking, Washington and Lincoln are probably No. 1 and No. 2. It’s fitting, then, that we celebrate their birthdays in tandem.
Day, its official federal name is still Washington’s Birthday. If that wasn’t confusing enough, different states officially know it as “Presidents Day,” “Lincoln/Washington/ Presidents Day,” “Washington- Lincoln Day,” “George
Washington Day,” and more. Let’s untangle how all these variant names came about and delve into the fascinating history of the holiday.
Washington was born on February 22, 1731. Given his incredible contribution to the founding of the United States, it’s understandable that a national
holiday would be established to commemorate his legacy. The holiday was first established in 1879 for employees in Washington, D.C. Six years later,
4 | Wealth Solutions 614.408.0004 | Law Office 614.408.0529
Published by The Newsletter Pro . www.TheNewsletterPro.com
2017: THE YEAR IN REVIEW Every January, it’s customary to look back at the previous year. What were the highlights? What were the “lowlights”? What were the events we’ll always remember? Most importantly, what did we learn?
Rather than write a long recap of the entire year, let’s first look at this chart:
MONTH
NOTABLE EVENTS
S&P 5001
January
Donald Trump is sworn in as president.
Up 1.79% Up 3.72%
February
North Korea fires a ballistic missile over Japan.
March
The U.K. starts negotiations over leaving the European Union (Brexit).
Down 0.04%
May
A massive ransomware cyberattack strikes computers around the world.
Up 1.16% Up 1.93% Up 0.05%
July
More tension builds as North Korea fires its first intercontinental ballistic missile.
August
Hurricane Harvey strikes, the costliest natural disaster in U.S. history.
Hurricane Irma hits, one of the strongest hurricanes ever recorded. Hurricane Maria follows soon after. Equifax announces a massive data breach. In politics, Republicans fail to repeal Obamacare.
September
Up 1.93%
Fifty-eight people are killed in the deadliest mass shooting in U.S. history. In Europe, Catalonia declares independence from Spain.
October
Up 2.22%
December
Republicans in Congress pass the Tax Cuts and Jobs Act, the most significant tax reform in over 30 years.
Up 0.98%
Obviously, this is hardly a full summary of everything that happened last year. And it doesn’t even mention any terrorist attacks or the ongoing investigations into different government officials.
It also doesn’t mention the tidal wave of sexual harassment allegations that swept through Hollywood, the opioid epidemic, or any of a dozen other stories that dominated the news.
But let’s look closely at what it does mention. On the chart, you’ll see the following:
• • •
National politics
• •
Natural disasters
Geopolitics
Cybersecurity
International incidents
These were all major developments, many of them affecting hundreds of countries and millions of people. Of course, some items weren’t necessarily bad, but each was significant in its own way.
And month after month, the markets kept chugging up the hill. In fact, the S&P 500 rose over 19% for the year.²
WHAT CANWE LEARN FROM THIS? Politically, culturally, meteorologically, 2017 was a volatile year — but not for the markets. As a result, 2017 taught us a valuable lesson about investing: MAJOR NEWS STORIES DON’T DRIVE THE MARKETS. Or at least, they’re far from the only thing that drives the markets. Time and again, pundits predicted the latest natural disaster, a story about gridlock in Washington, or a geopolitical incident would bring the markets down. In 2017, that never really happened. That’s not to say such events don’t ever affect the markets; it just means they often don’t have the impact one would expect. Previously, I commented on the historical lack of correlation between major events and market performance. Take the Cuban Missile Crisis. The world has probably never been closer to nuclear war than during those nerve-wracking 13 days in 1962, yet during that time, the Dow only fell 1.2% . By the end of the year, the Dow was up 10%.³
More recently, look at Brexit.When the UK voted to leave the European Union, it took most analysts by surprise, and many predicted it would lead to a major drop in the markets. At first, it did. The vote took place on a Thursday. The next day, the Dow fell over 600 points, and then another 250 points the Monday after. ⁴
But less than a month later, the Dow climbed to a new record high.
In 2017, the same thing occurred, with major events failing to impact the markets to any great degree.
Continued on back ...
WHAT’S THE EXPLANATION? In a sense, the markets are like baking a cake. If you’ve ever made a cake from scratch, you know the list of ingredients is fairly long. Flour and sugar, baking soda and salt, eggs and milk, oil and vanilla, and any of another half-dozen things.
That’s complicated enough, but as any chemist would tell you, we’ve only just scratched the surface. Here’s what really goes into a cake: hydrogen, carbon, oxygen, nitrogen, sulfur, sodium, potassium, magnesium, molybdenum, manganese, and more — all in the correct proportions, too, or else you just get a mess.
The markets are like that cake — formed by hundreds, perhaps thousands, of moving parts, decisions, stories, and most of all, people. So, in this analogy, the major news events that occur in any given year aren’t even the sugar or the salt. They’re the sulfur and selenium. They’re just a few elements in a giant bowl filled to the brim. WHY DID THE MARKETS GO UP IN 2017? So, what are some of the major elements that did move the markets in 2017?
Expectation is one. From the beginning of the year, the expectation of fewer regulations and lower taxes has been a major source of enthusiasm, and both expectations were rewarded.
Economic growth is another. The economy has been growing slowly but steadily over the past several years, and progress continued in 2017. The unemployment rate ended at 4.1% for the year, a 17-year low. Wages increased for many workers, and many corporations reported strong earnings throughout the year, causing valuations in most sectors to climb. Sheer momentum was also likely a factor. FOMO, or the fear of missing out, is always a strong motivator, and as the markets climb, more and more people want to hop on board. SOWHAT’S THE TAKEAWAY FROM ALL THIS? Last year showed us the markets aren’t a weather vane for any set of morals, political views, philosophies, or breaking news. History has repeatedly demonstrated that the markets are relatively unaffected by who the president is, which political party is in power, or how the winds of cultural change blow. In a more modern sense, the markets are far too large to be moved by anyone’s tweets or viral YouTube video. In a way, that’s a comforting thought. And it’s a further example of why we must avoid assigning narratives to the markets and then making decisions based on those narratives. Throughout 2017, many pundits kept trying to pick this event or that event as the straw that would break the camel’s back. I imagine many investors spent a lot of time searching for clues as to when the next correction would occur and missed out on opportunities for growth. That’s certainly been the case for this entire bull market — one of the longest in history. It’s a bull market that many investors have failed to take advantage of. (Per a survey by Gallup, only 52% of Americans report owning stock today, compared to 65% back in 2007.) ⁶ Of course, it’s also possible to make the opposite mistake: Assume that good news, whether political or economic, will continue to drive the markets up. Nothing lasts forever, including bull markets. It’s crucial that we avoid becoming irrationally exuberant, taking on more and more risk to chase higher returns. Investors who do that often make simplistic decisions based on specific news stories or trends that maybe aren’t as important as they appear.
Which brings us to the final part of this article:
THE 2018 MARKET OUTLOOK There’s no crystal ball for investing, and it’s impossible to truly know which elements will affect the markets most in 2018. Still, here are some of the trends we’ll be keeping an eye on:
• Will lower taxes mean corporate earnings continue to grow? • Will the Mueller probe into President Trump’s campaign lead to any executive shakeup in the White House? (This only matters if it leads to policy changes that could impact the markets.)
• Who will control Congress after the 2018 midterm elections? (Again, this only matters so far as it affects policy down the road.) • Many states are set to raise minimum wages in 2018. Will this lead to a rise in consumer spending?
At the moment, it seems reasonable to expect a kind of “Goldilocks economy” in 2018, in which economic growth is neither hot nor cold, but moderate. Again, we’re not going to make investment bets based on any storylines, nor are we going to react emotionally to future developments. Instead, we’ll continue to remember that the markets are large, complex institutions. We’ll continue to remember why we invest, which is to help you reach the specific goals you’ve set for your finances and your life. And we’ll continue to stick to our long-term strategy, which is designed to look beyond the headlines. HERE IS TO A PROSPEROUS 2018! One last thing: As you know, there’s no better time to plan your year than now. To that end, I’d love to sit down with you and plan for the months ahead. We can review your current strategy and portfolio. Do we need to make changes? Are you still on track to reach your goals? This is the only storyline that matters.
So please give me a call at 614.408.0004. We’ll set up a time to talk, and together, we’ll make 2018 exactly what you want it to be. On behalf of all of us here at DuPont Wealth Solutions, we hope you had a great 2017! Here’s to an even better year to come. Sources 1.“S&P 500 Historical Data,”https://www.investing.com/indices/us-spx-500-historical-data 2.DanielleWiener-Bronner,“Market experts hopeful for another strong year for stocks,”CNN Money,http://money.cnn.com/2017/12/31/investing/stocks-week-ahead-2018-predictions/index.html.
3.Ben Carlson,“How markets reacted to geopolitical crises,”The EconomicTimes,April 13,2017. http://economictimes.indiatimes.com/markets/stocks/news/how-markets-reacted-to-geopolitical-crises/articleshow/58158842.cms 4. Jethro Mullen, Ivana Kottsaova,Patrick Gillespie,“Dow plunges over 600 points as U.K. ‘earthquake’ crushes global markets,”CNN Money, June 24,2016.http://money.cnn.com/2016/06/23/investing/eu-referendum-markets/index.html?iid=EL 5.Matt Egan,“Stocks have never been higher,”CNN Money, July 12,2016.http://money.cnn.com/2016/07/12/investing/dow-stock-new-high-record/index.html 6.“Just over half ofAmericans own stocks,matching record low,”Gallup,April 20,2016.http://news.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx
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