Financial Architects
Financial Planning & Wealth Management
In financial planning and investing, survival is the primary goal. As Peter Bernstein wrote in Against the Gods: The Remarkable Story of Risk: “Survival is the only road to riches. You should try to maximize return only if losses would not threaten your survival and if you have a compelling future need for the extra …
“A general in chief, should ask himself frequently in the day, what should I do if the enemy’s army appeared now in my front, or on my right, or my left? If he have any difficulty in answering these questions, he is ill posted, and should seek to remedy it.” – Napoleon Bonaparte That quote …
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Summer 2026
In a recent blog post (here), I gave the traditional explanation of why assets are located where they are. But I don’t think of it exactly that way. Here is what I consider a better explanation (though you generally get to the same conclusion). There is no difference between an IRA and a Roth if …
A newer advisor asked me for a good book on market history, and there are lots of them, but what they were looking for was something that would give all the little factoids and context that I frequently share. (The proximate reason for the request was they didn’t realize anything notable had happened in the …
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Spring 2026
Occasionally a client asks why their retirement accounts have so much in bonds or, equivalently, why the return on that account is lower than their taxable account. This question came up again recently so I thought I’d take the opportunity to explain here. This is going to be slightly oversimplified, but only slightly. Which investments …
Full details on these new accounts are here, but it appears they are usually inferior to other options such as 529s, 2503(c) trusts, and custodial accounts when funded by parents (or grandparents, etc.). However, they may make sense (individual facts and circumstances need to be considered) for: The free $1,000 from the government for a …
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Winter 2026
Factors in the decision can be divided into major (almost always important) and minor (rarely important). Major Factors: Investment Fees – qualified plan options are almost always more expensive than the best options available through an IRA. Advantage: IRA Rollover (at worst a tie) Investment Quality – “quality” refers to considerations such as, but not …
Many firms use “risk tolerance” questionnaires to determine this for their clients, but a client’s risk tolerance isn’t a static measurement like their height; it varies over time. “Risk tolerance” is a terrible term because it encompasses three different factors: Risk capacity – how much risk the client can afford to take. Risk propensity – how much …
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Fall 2025
I know you have probably heard far too much about taxes lately and I am not going to review the recent tax bill here. I want to talk about tax strategies more generally. “No man’s life, liberty or property are safe while the Legislature is in session.”– Gideon J. Tucker, 1866 While many people spend …
Recently (here) I discussed two common mental mistakes. This month I thought I would add three more: a need to save face, improper extrapolation, and conscious weakness. Saving Face. What I have termed “saving face” is an attempt to not feel stupid, or to avoid regret. People can go to elaborate lengths to feel they …
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Summer 2025
Most of us are prone to systematic errors in our decisions, and I would like to review two of them that seem to come up frequently. (For more, see here and here.) The first issue is sunk costs. A sunk cost is something that is already spent or some action already taken. The logical error …
“Alternative” investments (aka “Alts”) are probably best defined as investments that are anything other than stocks or bonds (and cash is just a bond with a really short duration). A few years ago, I got the CAIA (Chartered Alternative Investment Analyst) designation, and I also attend alternatives conferences periodically to be well informed. I went to another …
My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Spring 2025
This month we are going to take a break from our usual technical topics, and discuss a more fundamental issue. What is the point of all this planning and analysis? To amass the largest investment portfolio possible? NO. It is to reach your highest goals and aspirations. The problem is that many people don’t have …
Steven Covey, in his excellent book Seven Habits for Highly Effective People, uses a simple graphic to categorize activities. All activities can be categorized as important or unimportant, and urgent or not urgent. Dwight D. Eisenhower (quoting J. Roscoe Miller) once said in a speech, “The urgent are not important, and the important are never …