Q3 Letter to Clients

July 2025

The days are already getting shorter – barely noticeable, but real. And while many of us in the South still have some scorcher days ahead, the halfway point of the year is a good time to pause and reflect.

Market and Economic Overview

Feeling some whiplash from the markets lately? You’re not alone. It’s been a wild ride, and once again, it reminds us why we’re such big fans of staying in your seat. Global tensions have kept uncertainty front and center, which usually means more market volatility. In plain terms, the roller coaster gets steeper—both on the way down and the way back up.

History has shown that some of the biggest market gains come right after sharp declines. The problem is, we never know exactly when that rebound will happen. Guessing wrong can be costly – and in some cases, set a portfolio back for decades (see the chart below).

In moments like the February 19th to April 8th drawdown this year – when the S&P 500 fell nearly 19% in just a few weeks – the temptation to jump off the ride can be strong. It will take your breath away.  But staying disciplined and committed to your plan is what makes the difference. It’s time in the market, not timing the market, that leads to long-term success.

One note of caution: it’s important that money needed for near-term living expenses isn’t exposed to these kinds of market swings. Lately, we’ve become strong advocates of a liability-driven investment approach – matching your investments to specific future spending needs – rather than just thinking in terms of general asset allocation. If that’s unfamiliar, we’d love to talk more at your next meeting.

Money in Service of Values

When markets get noisy, perspective matters. Money is at its best when it serves what you truly value. That’s a theme I’ve heard repeatedly from recent guests on my On Adventure podcast—entrepreneurs, musicians, conservationists. The thread that runs through all their stories? Wealth isn’t the end goal. It’s a tool to create freedom, meaning, and impact.

What’s the point of building bigger buckets if the money never gets used to shape a better life—for yourself or someone else? When aligned with purpose, money becomes transformative. It allows us to live with integrity, build what matters, and contribute beyond ourselves. And yes, to seek out a few great adventures along the way.  In that light, money becomes more than just currency. It becomes agency.

Thank you for your continued trust. Please feel free to reach out anytime.

Episode 52: Skydiving Everest, High Mountain Summits and Empowering Female Rangers with Holly Budge


In this special episode of the On Adventure Podcast, I sit down with the unstoppable Holly Budge—an adventurer, conservationist, and the first woman to skydive over Mount Everest. With World Female Ranger Week in full swing, this conversation couldn’t be more timely. You can find out more about what these incredibly brave female rangers do here and why they are being celebrated this week.  Holly opens up about transforming fear into fuel, climbing the world’s highest peak solo, and how her bold expeditions became a platform for championing female wildlife rangers.

We explore her work with How Many Elephants and the founding of World Female Ranger Week, diving into the challenges and triumphs of the women on the front lines of conservation. Whether you’re an adventure junkie, a purpose-driven leader, or someone looking for that next spark of inspiration, this episode delivers the goods.

Timeline Summary:

[2:15] – How a single conversation launched Holly’s journey to skydive Everest
[6:47] – What it’s like to freefall at 29,500 feet over the Himalayas
[12:22] – Training your mindset for mental toughness and high-altitude endurance
[17:31] – The origin story of How Many Elephants and connecting passion with purpose
[21:18] – Launching World Female Ranger Week and elevating unheard voices
[27:05] – Grit, resilience, and the power of women protecting the wild
[35:40] – What Holly’s adventures have taught her about life and leadership

Links & Resources:

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Check out this episode!

What the Latest Tax Bill Means for You (Without the Jargon)

A significant tax and spending package – nicknamed the One Big Beautiful Bill (OBBBA) – recently passed the U.S. House and is now being debated in the Senate. This isn’t just Capitol Hill chatter – it has direct implications for your financial plans, and I want to make sure you’re informed without getting bogged down by technical jargon.

Here are five key areas currently up for discussion:

  1. SALT Deduction Cap: House Wants $40K, Senate Uncertain

The House-approved bill proposes raising the State and Local Tax (SALT) deduction cap significantly—from $10,000 up to $40,000 (joint filers), permanently. This is a notable change for anyone living in high-tax states or dealing with substantial property taxes.

The Senate, however, hasn’t fully embraced this increase yet. They’re leaning toward maintaining the current $10,000 cap, sparking intense negotiations.

What it means for you:

If you typically itemize and live in a higher-tax region, your deductions – and thus your tax bill – could swing substantially depending on the final agreement.

  1. Child Tax Credit and Family Incentives

Both chambers agree broadly on enhancing the Child Tax Credit. The proposal currently extends the credit at $2,000 per child permanently, with a temporary increase to $2,500 per child until 2028.

The House version also includes a novel initiative: $1,000 “baby bonus” accounts for newborns through 2029. The Senate is debating this component, but no firm commitments yet.

What it means for you:

Enhanced child credits or potential baby savings accounts might mean extra breathing room in your budget or additional savings opportunities.

  1. No Taxes on Tips and Overtime?

The bill includes bipartisan provisions to exempt certain tip income and overtime earnings from federal income tax, at least up to certain thresholds. This initiative targets workers in the hospitality industry, gig economy, and service sectors.

Both the House and Senate versions reflect strong support for making tips and overtime pay partially tax-exempt, potentially putting more money directly into workers’ pockets.

What it means for you:

If your income includes tips or overtime, your net earnings could rise, meaning immediate cash-flow improvements.

  1. Green Energy Credits Could Change Drastically

The House version plans significant rollbacks of existing clean-energy incentives introduced previously under the Inflation Reduction Act. The Senate prefers a more moderate path—keeping credits for geothermal, hydropower, and nuclear energy intact longer, but phasing out solar and wind incentives sooner.

What it means for you:

If you’ve planned home efficiency upgrades or renewable-energy installations, these changes might affect your timing or feasibility, depending on what incentives remain.

  1. Taxes on Social Security Income May Shift

An additional change currently debated is how Social Security income is taxed. The House bill includes proposals to raise the income thresholds at which Social Security benefits become taxable, meaning potentially fewer recipients would owe taxes on these benefits.

The Senate’s stance isn’t finalized yet, but similar adjustments are being seriously considered.

What it means for you:

Retirees—or soon-to-be retirees—might see significant shifts in their taxable income, impacting cash flow, retirement planning strategies, and possibly allowing greater flexibility in your spending plans.

Broader Implications and Timing

  • Deficit Impact:

    The Congressional Budget Office (CBO) estimates the bill could increase the federal deficit by $2.8–$3.8 trillion over the next decade. The tax cuts, expanded credits, and changes in income taxation are major drivers of this projection.
  • Medicaid and Healthcare:

The bill could also affect healthcare spending, potentially tightening Medicaid eligibility rules, which could indirectly affect financial planning for healthcare costs in retirement.

  • Timeline:

After passing the House on May 22, 2025, the Senate is aiming to finalize its version before the July 4 recess, intending to bundle it with a new debt-ceiling increase.  There is still disagreement on these even within the majority party, so the deadline is currently up in the air.

The Bottom Line (for Now)

Given these proposals are still in flux, flexibility will be essential in your financial strategy. Areas to watch closely include SALT deductions, family-related tax credits, changes in taxable income from tips and overtime, renewable-energy incentives, and especially the taxation of Social Security benefits.

We’re closely monitoring these developments. Rest assured that once the final details are clear, we’ll recalibrate your financial plan together – ensuring you’re positioned to make the most of these new opportunities or to mitigate any potential challenges.

Remember, my goal remains unchanged: helping you live your great life right now, confidently navigating whatever comes next. As always, I’m here if you have immediate questions or if any of these changes prompt you to rethink current plans.

What the Everyday Explorers of the On Adventure Podcast Have Taught Me About Making a Good Life Great

You have a solid job that covers the essentials and taps into your talents. Your relationships with your spouse, children, extended family, and close friends are meaningful and enriching. Your home offers both comfort and safety, and your golf outings or local volunteer work add enjoyable dimensions to your routine.

On paper, you’re living the ideal life. Yet many who tick these boxes still feel there’s a gap—something intangible yet deeply felt.

Recently, a compelling study published in Affective Science explored exactly what constitutes a truly “good life.” Researchers surveyed nearly 4,000 individuals from nine countries, including the U.S., asking participants to envision their ideal lives and rank various descriptors reflecting happiness, meaning, and psychological richness.

Happiness as the Foundation

The study identified foundational happiness with descriptors like:

  • Stable
  • Comfortable
  • Simple
  • Happy
  • Pleasant

This is your baseline. Achieving this level of happiness means your basic emotional and physical needs are met. From here, you have the stability and clarity needed to expand your life in meaningful ways.

Adding Layers of Meaning

The next dimension is meaning, expressed through terms such as:

  • Meaningful
  • Fulfilling
  • Virtuous
  • Sense of purpose
  • Involves devotion

This aligns perfectly with the conversations we have on the On Adventure podcast, highlighting individuals who choose purpose over mere comfort. Whether through meaningful work, volunteerism, or mentoring, creating a life of purpose enriches your emotional experience and builds a legacy.

As I’ve discussed frequently on the podcast, meaning becomes even more critical during life’s transitions, especially retirement. Those who pursue meaningful work or passions tend to continue finding fulfillment long after their career concludes.

Embracing Psychological Richness

Perhaps most intriguing—and closely related to our ongoing discussions on adventure—is the third dimension: psychological richness, characterized by:

  • Eventful
  • Dramatic
  • Interesting
  • Full of surprise
  • Psychologically rich

Adventure inherently creates psychological richness. It involves challenge, uncertainty, overcoming obstacles, and embracing curiosity. It keeps you from stagnation and boredom. Guests on the On Adventure podcast consistently affirm that embracing adventure dramatically enriches their lives, offering insights, perspective shifts, and growth opportunities they never anticipated.

The interplay between happiness, meaning, and psychological richness evolves as you journey through life. Adventure, in various forms, ensures that you continuously grow and remain energized.

So how do we balance these elements effectively, especially as our lives change over time? That’s where Life-Centered Planning comes into play—helping you strategically align your resources with the kind of life that genuinely excites and fulfills you right now. Let’s explore together how your personal adventure can guide the design of your great life right now!

Q2 Letter to Clients

As we wrap up the first quarter of 2025, I want to briefly reflect on recent market activity and share some thoughtful insights on maintaining perspective during volatile times.

Market and Economic Overview

This quarter reminded us that markets rarely move in a straight line. The S&P 500 saw a decline of a little more than 4%, driven largely by investor unease over inflation concerns and uncertainty about global trade policies. Additionally, international markets showed surprising resilience, with the MSCI All Country World Index ex-U.S. index outperforming the S&P 500 index by nearly 11 percentage points, marking the strongest first-quarter performance for international stocks since 1987, demonstrating the importance of diversification in your portfolios.  And yet, these numbers mean nothing to me, and they shouldn’t to you either.  Index returns, especially over one quarter, say nothing about whether you are on track to achieve your own personal goals or more importantly, about whether you are living your great life right now.  You should be tracking your Return on Life index, and the stock market has nothing to do with that!  These short-term returns are just noise, distracting you from the conversation that really matters.

Strategic Opportunities Amid Volatility

While volatility can feel uncomfortable, it’s essential to recognize the opportunities it creates for a long-term investor. We continuously monitor your portfolios for opportunities like tax-loss harvesting – turning short-term declines into meaningful tax savings – and strategic rebalancing which keeps your investments on target to your risk model.  Or better yet, if you have cash on the sidelines, putting new cash to work in your investment accounts is a great way to take advantage of lower asset prices, which has an outsized effect on your future portfolio!  Volatility coming from risk is also the price we all must pay in order to expect longer-term returns that outpace inflation. 

Great New Content

In line with our belief in tuning out short-term noise and focusing on long-term goals, Dimensional Fund Advisors recently released an exceptional documentary film called, “Tune Out the Noise,” directed by Academy award-winning filmmaker, Errol Morris. I highly recommend this impactful video, which beautifully captures the essence of remaining grounded and focused amid market distractions, spoken from the perspectives of some of the smartest people in finance over the last 60 years.  Check it out in the link below.

Above all, remember that your financial plan is built specifically for times like these – grounded in your personal goals, risk tolerance, and life’s milestones. Markets will always fluctuate, but our commitment to your financial well-being remains constant.

Thank you for your continued trust. Please feel free to reach out anytime.

Election Day Reflections

I sent this letter out initially in the midst of Election Day.  There obviously was a lot of energy in the air. Anticipation runs high, and the headlines were filled with speculation on what the choices mean for the markets. But here’s the perspective we can hold: while political outcomes may feel momentous, they rarely dictate the path of long-term investments.

Here are some helpful reminders as we continue to move through this election cycle:

Election outcomes and stock market outcomes are not correlated.

Election results and market returns are often far less connected than the news might suggest. For example, research by Fidelity has shown that, over time, the S&P 500 has performed comparably under both Democratic and Republican administrations—regardless of who held Congress. Since 1976, every market sector has had periods of growth during both Democratic and Republican terms. Across election cycles since 1976, each sector has performed well at times, regardless of which party holds the White House.  The markets, it seems, march to a rhythm of their own.

Cause and effect in the markets is rarely direct.

During election seasons, it’s tempting to act on predictions about how new socioeconomic policies might influence the markets. However, even the most astute commentators cannot reliably forecast market reactions to political shifts. Financial writer for Forbes John Jennings compares this to scientists who understand why volcanoes occur but cannot predict each eruption. In markets, just as in nature, the ability to explain an event is different from the ability to foresee it.

Elections come and go; your investments have a much longer time horizon.

We may vote for a president every four years, but your portfolio is designed to endure and grow over decades. Data spanning nearly a century, illustrated by Dimensional Fund Advisors, shows that U.S. equities have consistently trended upward, no matter which party was in power. Staying the course remains the most effective path forward for reaching your long-term goals.

So as the election buzz fills the air, know that your investments are positioned for resilience. Let’s keep our sights on the horizon, with our long-term objectives leading the way.

Steady onward.

 

I have a Lump Sum in Cash – Should I Invest It Right Away?

Whether it’s a work bonus, inheritance, or proceeds from selling a business, receiving a large sum of money can leave you wondering, “What do I do with it now?” It’s natural to feel a bit stuck—especially with the market going through its usual ups and downs. Do you invest it all at once, or spread it out over time?

This is a common question, and honestly, it’s understandable. We all worry about making the wrong move—invest too soon and the market might drop; wait too long and you could miss a rally. But there’s no need to over-complicate it. Let’s break down your options.

Start with Your Goals

Before diving into the numbers, ask yourself: What do I want this money to do for me?

If you’ve got short-term goals, like paying for your kid’s college tuition in the next few years, you may want to lean toward more stable, less risky investments—think bonds, bond funds, or CDs. These are less likely to be impacted by the market’s short-term swings.

On the other hand, if this money is for long-term goals, like retirement, then putting it into the stock market might make sense. Over the long haul, markets tend to rise, despite the short-term ups and downs.

Lump-Sum vs. Dollar-Cost Averaging

Now, should you invest all the cash at once or spread it out?

Lump-sum investing gets all your money into the market right away, which could be great if the market’s on the rise. But no one can predict the future, and there’s always a chance the market dips right after you invest. If that possibility stresses you out, dollar-cost averaging (DCA) might be more your speed.

With DCA, you invest a set amount regularly—say, $1,000 a month for a year. When prices are high, you buy fewer shares; when prices drop, you buy more. It’s a steady approach that smooths out market fluctuations over time.

However, here’s the kicker: research shows that lump-sum investing tends to outperform dollar-cost averaging about 68% of the time. So, if your main goal is maximizing returns, lump-sum might be the way to go. That said, the difference in returns between the two strategies isn’t massive, so if dollar-cost averaging helps you sleep better at night, it’s worth considering. After all, the last thing you want is to panic and sell when the market dips.

The Bottom Line—Don’t Wait

Whether you go with lump-sum investing or dollar-cost averaging, the most important thing is not to delay. Holding onto cash means missing out on potential growth from stocks and bonds. And trying to time the market? That’s a tough game to win.

In fact, studies show that average investors who attempt to time the market often miss out—by as much as 5.5% compared to just sticking with the S&P 500. So, whatever you decide, get started. Both approaches will help you benefit from the market’s long-term upward trend, which is key to achieving your financial goals.

Need help figuring out which approach works best for you? Reach out, and we’ll walk through it together.

Q4 Letter To Clients

As we reflect on the past quarter, I want to emphasize our commitment to your overall financial well-being. This not only includes helping you plan for your goals but also protecting the assets you’ve worked so hard to build. Our focus this quarter is centered on enhancing your cybersecurity protection. With cyber threats increasing globally, protecting your personal and financial information has never been more critical. According to a recent study, cyberattacks have increased by 125% over the past year, and 64% of individuals have experienced some form of a data breach.  In 2023 alone, there were over 1.8 billion data breaches globally, with financial accounts being a key target. The Federal Trade Commission reports that identity theft cases grew by 15% last year, emphasizing the need for vigilance.

Given this rise, we’re dedicating more resources to ensuring your financial data is secure, and we strongly recommend you take steps to safeguard your online information. To assist with this, we are hosting a webinar this month on proactive cybersecurity strategies tailored for our clients. Please join us on October 23 at 12pm -1pm EST to learn more about how to protect yourself and your family.  Registration is required and can be found here.

In terms of market performance, the past quarter has seen mixed movements across key asset classes. Equities rallied early in the quarter due to continued optimism around cooling inflation and central bank policies, though rising interest rates brought some volatility by quarter’s end. Meanwhile, bonds saw more stability as yields increased, providing attractive opportunities for income-focused portfolios. In the alternative asset space, real estate has faced headwinds with higher borrowing costs, while commodities have seen strength due to geopolitical tensions and supply chain pressures.

As always, we take a holistic approach to your financial plan, ensuring that market shifts are viewed through the lens of your long-term life goals. Market movements will come and go, but our focus remains on helping you achieve financial peace of mind and purpose-driven financial life planning. We are here to guide you through each phase, adapting strategies as needed to support your goals and priorities.

We are here to support you and answer any questions you may have.

Less is More in Election Years

I am getting tons of questions right now (and every 4 years historically) about what does the election cycle mean for my investments and what should we do to ‘protect’ ourselves.  These are legitimate questions coming from an honest place of concern about important matters.  My answer has been pretty consistent now for over 20 years, but I could not write this any better, so I’m going to leave this to an expert.  This is a must read from Dr. Daniel Crosby, Chief Behavioral Officer with Orion.  He is a psychologist and behavioral finance expert with a New York Times best seller.

 

 

As the 2024 election approaches, the political noise is deafening. Campaigns are in full swing, pundits are making predictions, and market analysts are offering endless advice on how to manage your investments. However, the best strategy for your portfolio during this tumultuous time might surprise you: do nothing.

In times of great political and economic uncertainty, the instinct to take action can be overwhelming. This tendency, known by shrinks like me as “action bias,” is the inclination to favor action over inaction, especially when the stakes are high. It’s a concept that’s particularly relevant in the world of investing.

Consider the world of soccer, where goalkeepers, faced with penalty kicks, often dive dramatically to the left or right. A group of researchers examined 311 penalty kicks and found that goalies dove to the left or right 94% of the time. However, the kicks were distributed roughly equally: one-third to the left, one-third to the right, and one-third down the middle. Goalkeepers who stayed in the center had a 60% chance of stopping the ball, far greater than the odds when diving left or right.

So why do goalkeepers choose dramatic dives over the more effective strategy of staying centered? When we put ourselves in the shoes (or cleats) of the goalie, especially in high-stakes situations, the reason becomes clear. When the game and national pride are on the line, goalies want to appear as though they are giving a heroic effort. Staying centered can look like complacency, even though it’s statistically the best choice. This same dynamic applies to investors who, in times of market distress, feel compelled to act, even when inaction would serve them better.

When Vanguard examined the performance of accounts that had made no changes versus those that had made tweaks, they found that the “no change” condition handily outperformed the tinkerers. Meir Statman cites research from Sweden showing that the heaviest traders lose 4 percent of their account value each year to trading costs and poor timing and these results are consistent across the globe. Across 19 major stock exchanges, investors who made frequent changes trailed buy-and-hold investors by 1.5 percentage points per year.

Perhaps the best-known study on the damaging effects of action bias also provides insight into gender-linked tendencies in trading behavior. Terrance Odean and Brad Barber, two of the fathers of behavioral finance, looked at the individual accounts of a large discount broker and found something that surprised them at the time.

The men in the study traded 45 percent more than the women, with single men out-trading their female counterparts by an incredible 67 percent. Barber and Odean attribute this greater activity to overconfidence, but whatever its psychological roots, it consistently degraded returns. As a result of overactivity, the average man in the study underperformed the average woman by 1.4 percentage points per year. Worse still, single men lagged single women by 2.3 percent – an incredible drag when compounded over an investment lifetime.

The tendency of women to outperform is not only seen in retail investors, however. Female hedge fund managers have consistently and soundly thumped their male colleagues, owing largely to the patience discussed above. As LouAnn Lofton of the Motley Fool reports, “…funds managed by women have, since inception, returned an average 9.06 percent, compared to just 5.82 percent averaged by a weighted index of other hedge funds. As if that outperformance weren’t impressive enough, the group also found that during the financial panic of 2008, these women-managed funds weren’t hurt nearly as severely as the rest of the hedge fund universe, with the funds dropping 9.61 percent compared to the 19.03 percent suffered by other funds.”

As the 2024 election unfolds, resist the urge to make dramatic changes to your portfolio. Remember, sometimes the best action is inaction. By staying the course and avoiding the pitfalls of action bias, you can protect and grow your wealth, regardless of the political landscape.

Source: The Laws of Wealth, Crosby  

 

What Does Financial Independence Mean to You?

According to a recent poll of 2,000 U.S. adults, “financial independence” equates to earning $94,000 per year, or about $20,000 more than the median income in 2023.

Some folks might feel like they’re just a promotion or two away from achieving that kind of independence. Others might not feel like $94,000 isn’t enough to feel truly free. And still others might wonder how they’d ever spend that much money in the first place.

 That’s because true financial independence isn’t a number. So if it’s not a number, then what is financial independence?   

It’s feeling confident enough in your money to do things that will improve your Return on Life, such as:

1. Spend without worrying

In our experience, it’s true that money can’t buy happiness. But it’s also true that being able to treat yourself and your family without worrying about paying your credit card bill at the end of the month is a pretty great feeling as well.

No matter how much you’re earning, setting a monthly spending budget can help you cover your necessities, contributes to your retirement goals, and have a little fun along the way. A budget can also help you plan ahead for responsible “big ticket” splurges, like a dream vacation or adding a pool to the backyard.

2. Enrich your children

Unless your kids love spending a lot of time at the local library, enrichment isn’t free. According to Lending Tree, parents spent an average of $731 per child per year on extracurriculars. You might spend thousands of dollars every year on a good athlete or ballerina through their teenage years … which is when the bills really start rolling in. The average cost of a year of college for the 2023-24 school year is $10,662 at an in-state public school, and $42,162 at a private school. This is for tuition ONLY…room and board will be in addition, and if you haven’t noticed, rent cost is much higher now than it used to be!

Parents might not feel truly free until they’ve passed that big COLLEGE goal until the last payment has been made. But with that goal in sight, we can help you start planning a combination of savings and investments that will reduce some of the sticker shock when the time comes. And by including some of your children’s activities in your budgeting and long-term plans, you might be able to sign them up for a few extra classes that round out their development or allow them to dig more deeply into their passions.

3. Change careers

Once upon a time, your high school guidance counselor might have challenged you to imagine what you’d do for a job if you didn’t need money. Setting aside your teenage dreams of being a rock singer or astronaut, do you have the means to make that switch right now?

Well, if money isn’t stopping you, then what is?  Is it time to re-train and re-tool for Career 2.0 or 3.0?

Taking a lower-paying job at a company or charitable organization that does work you admire could give you an opportunity to put your professional skills to their highest uses. Rather than trying to climb a ladder or earn a bigger paycheck, you can focus on the mission at hand and the people and causes you’ll be impacting.

4. Retire

Or maybe you’re feeling independent enough to stop working all together.

Folks who plan their retirement around hitting some arbitrary financial number often put off retirement longer than they need to. Remember, financial independence isn’t a number. 

Seeing how your plan can make your retirement possible while also providing for long-term goals like vacationing or relocating could give you the security you need to feel financially independent. Want to discuss this further?  Reach out to me and let’s start planning to earn more Return on Life (ROL) and more freedom from your money.