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Notes From The Field
July 2023
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Science or Just a Game? The rise of digital banking has made it easier than ever for people to manage their finances. With a few taps on a smartphone, users can deposit checks, transfer money, pay bills, and even invest in stocks and other assets. This convenience has led to a surge in the popularity of investing apps. In 2020, the number of people using investment apps in the United States grew by 50%. And this trend is expected to continue in the years to come. Investing apps are largely popular because they’re so user- friendly. Anyone with a smartphone can use them, regardless of their financial experience. They are advertised as having low or no fees and provide access to a wide range of investment options, including stocks, bonds, and ETFs. But they often use no science to back decisions. Investing apps can also promote impulsive decisions that could lead to losses. By oversimplifying investing, people can quickly lose their hard- earned money. It’s a form of gambling. Investing is a serious financial decision, not a game. In 2021, a popular investing platform agreed to pay almost $70 million to the Financial Industry Regulatory Authority (FINRA) to settle allegations that millions of customers received false and misleading information. The allegations included misrepresenting how much money customers had in their accounts, placing trades on margin, approving risky option trades when it should not have, and much more. Customers lost millions to these problems and multiple system outages that left investors unable to access their accounts during “extreme market volatility.” Still, financial activity is increasingly digitized, placing consumers in the driver’s seat from the comfort of their homes. In a recent survey, over 75% of respondents preferred to manage their money using digital tools provided by their primary financial provider. It was also reported that, on average, bank customers who use these tools are 18% wealthier than those who don’t. So, digital tools can help people prepare for significant life events like home purchases or retirement savings, and the trend only accelerated from the pandemic. But while tapping your card at the store is highly convenient, other digital ways to bank, invest, or even seek financial advice may not be as user-friendly. Modern Finance
Seventy-nine percent of millennial and Gen Z Americans have received financial advice from social media, and 76% believed the content they read made it “less taboo to talk about money.” Further, a 2023 industry overview of financial services found that 71% of Gen Zers believe brands should assist them in achieving their personal goals and aspirations. According to a report from January 2023, TikTok, Instagram, and Twitter are ranked among the top five social media platforms where young people receive financial information. However, social media advice also opens the door for potential abuse and can create enormous risks between data security and identity fraud. As a cautionary tale, in 2019, a Twitter user began encouraging his followers to buy stocks that he had secretly amassed holdings of. He would then sell those same stocks at inflated prices as he recommended others to buy them. In 2021, the Securities and Exchange Commission (SEC) hit the Twitter user with an injunction and asset freeze for allegedly committing securities fraud with his scheme to manipulate stocks using the popular social media platform. There is no slowing down the rise of digital banking, social media, and financial apps, so we must determine how to adapt to the new technology. I will continue to look at investment science that’s been proven repeatedly. What will you choose?
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BRAIN GAMES
SOLUTION
Financial Coaches Create New Opportunities
financial advisors? Here are questions to consider. Remember, verify, then trust.
As an investor, do you know your investment goals and risk tolerance? A financial coach can help you and your family create an investment strategy and methodology that aligns with your financial future and risk tolerance. We have talked a lot about this in our previous newsletters. While investing apps can be quick and convenient for trading activities, they aren’t necessarily aligned with your investment goals. Are online influencers vetted and qualified to provide investment advice and promote their “track record?” Stock picking and market timing are like predicting the future. And as stated during the American Dream Experience, “People can’t predict the future, and if they could, they wouldn’t tell you.”
• Are they a fiduciary? • Are they registered? • Are they creating social media pitches to buy cryptocurrencies?
• Is the financial advisor working with a third-party custodian? • Is there a promise or guarantee of extremely high returns on a monthly basis? • Can you receive GIPS® audited returns? • Do they have any fines or penalties with the SEC, FINRA, or bank regulators?
We host the American Dream Experience multiple times yearly, allowing investors to arm themselves with knowledge. It’s a free, two- day seminar of breakthrough financial training and education. Investors who participate can discover how to leverage the fundamental principles of long-term wealth creation — and tell the difference between Nobel Prize- winning investment strategies and gambling with their financial futures.
Instead, portfolios should be built based on academic investing principles, science, and data. The best way to ensure that happens is by working with a financial advisor. What should investors consider when looking at
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LEARN LIFE LESSONS WITH MR. BACHMANN The Journey of a German Classroom The documentary “Mr. Bachmann and His Class” shows how a small-town German teacher helps his diverse students feel at home. This heartfelt documentary even won several awards, including the Silver Bear, at the Berlin International Film Festival because of its simple, uplifting message. In the film, the rural town of Stadtallendorf has a history of employing migrant workers dating back to World War II. Despite having many immigrants in the city, Stadtallendorf has a history of excluding non-German residents. This divide is an issue that weighs heavily on students. In a classroom of 12–13-year-old students from different countries, Dieter Bachmann uses his authentic positivity to help each student become confident about their own potential. In one scene, after returning graded assignments to his students, he reassures those who scored lower by saying, “These grades do not reflect who you are.” This isn’t to say that Mr. Bachmann was easy on his class. In one pivotal moment, the teacher reprimands a student for acting unkind to a classmate. When the student provides a halfhearted excuse, Bachmann replies, “I don’t really believe that, but I’ll treat it as though it were sincere.” The student can clearly feel the teacher’s disappointment despite no obvious scolding or berating. Mr. Bachmann guides his students with a genuine heart and a steady hand. The affectionate film immerses the viewers in Bachmann’s classroom to witness the evolution of the students. Whether watching those who decide to spend their lunch hour with him in his classroom and others who share their most vulnerable feelings, viewers realize that all of these students needed an educator who showed sympathy and kindness. “Mr. Bachmann and His Class” follows the magnetic bunch until retirement. While there are plenty of films about heroic teachers, this gentle documentary reveals more about how all it takes is genuine interest and effort to change students’ lives.
Inspired by Delish.com GRILLED STEAK SALAD WITH PEACHES
Ingredients
• Black pepper • 1/4 cup extra-virgin olive oil
• 1 lb skirt steak, fat trimmed • 1/4 cup balsamic vinegar • 1 clove garlic, minced • 1 tbsp light brown sugar • 1 tbsp vegetable oil • Kosher salt
• 1 large lemon, juiced • 6 cups baby arugula
• 2 ripe peaches, thinly sliced • 1/3 cup crumbled blue cheese or feta
Directions 1. In a large resealable plastic bag or baking dish, combine steak, vinegar, garlic, and brown sugar. Marinate 20 minutes at room temperature. 2. Remove steak from marinade, coat with vegetable oil, and season generously with salt and pepper. 3. On a grill or pan set to high heat, cook steak until desired doneness. Rest 5–10 minutes, then thinly slice against the grain. 4. In a small bowl, whisk olive oil and lemon juice to make dressing. Season with salt and pepper. 5. In a large serving bowl, add arugula, peaches, blue cheese or feta, and steak. Drizzle with dressing and gently toss.
TAKE A BREAK
Barbecue Concert
Fishing Fourth Independence Larkspur
Park Pool Shade Stargazing Travel Vacation
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818-369-7900 FieldLawPC.com
P.O. Box 8306 La Crescenta, CA 91224 INSIDE THIS ISSUE
The Rise of Digital Money Management
Upcoming Events
Why You Need a Financial Coach
Grilled Steak Salad With Peaches
An Inspirational Documentary Inspires Hope
A Comedian’s Heartwarming Will
How He Ensured His Wife’s Happiness Comedian Jack Benny Made a Romantic Request
“Every day since Jack has gone, the florist has delivered one long- stemmed red rose to my home,” Mary Livingstone wrote. “I learned Jack actually had included a provision for the flowers in his will. One red rose to be delivered to me every day for the rest of my life.”
The idea of creating a will can seem grim for many. We don’t want to ponder our passing and the effect it will have on our loved ones. Our distaste for estate planning is evident, too — only 33% of U.S. adults have a will. Yet, what if we saw estate planning as an opportunity to send a final affectionate message after our departure? That’s exactly what Jack Benny, an iconic radio and television comedian, did for his wife after he passed away. Both starred in the quintessential radio program “The Jack Benny Program” from 1932 to 1965, and the couple was known for their comical disputes and banter. However, his wife, Mary Livingstone, would later confirm that her kind husband was far different from the penny-pinching naysayer he played in his show. For decades, the duo became a must-listen act on countless home radios. Sadly, Benny passed away in 1974 at the age of 80. While his wife was mourning the loss of her husband, she was shocked to discover one final romantic gesture from Benny. Livingstone shared the loving gift with the world in a magazine article dedicated to his life and legacy.
Rain or shine, Livingstone was delivered a red rose sent from her late husband until her death nine years later. The loving husband and famous entertainer proves that wills don’t have to be daunting documents; they can be one last way to leave a kind gesture behind. You could also shock your family by leaving your estate to your favorite furry friend! Whatever route you take, a will is sure to maintain your spirit and estate.
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