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Getting Personal: Sneak Peek of a Financial Planner’s Own Money Moves in 2018 (Part I)

January 8, 2019


Happy New Year to Logbook Financial Planning’s clients, friends and followers!  For our first article of the year, we thought it might be fun to write about our own family’s money moves during 2018.  We are taking an approach similar to Nassim Nicholas Taleb’s “Don’t tell me what you think, tell me what you have in your portfolio”  philosophy in Skin in the Game: Hidden Asymmetries in Daily Life.

In this three-part series, we will go beyond investments and filter through the hundreds of decisions we made about money in 2018, highlighting the most important.  We hope discussing how we navigated these money decisions and the lessons learned will resonate in your own life.


1. Debt-Free Again


$172,050.84.  That was the wire transfer we sent on January 10, 2018, to Chase Bank to pay off the mortgage on our home in Maine.  We were officially debt-free again–no mortgage, car loans, student loans, or consumer debt! This wire transfer was the proceeds from an investment property we sold in 2015.  We had been keeping this money liquid for two years to see how our financial planning and investment management business was going to launch and determine our true expenses of setting up a new home and living in Maine.  Once we had the confidence our transition from the State Department to Logbook Financial Planning was going to be successful, we were ready to make this move.

Why did we do it?


We think paying off your mortgage is not really a math decision–it is mostly an emotional decision.  My wife, Sherise, and I just hate being in debt so this felt really good to us. We love using the extra $2,019.53 that we spent on principal and interest per month for our family’s own spending priorities such as travel, theater, and a YMCA membership.  Instead of having to allocate this month’s income to a purchase we made years ago, we use this month’s free cash flow to build a life that we want to live. We also like having our net worth diversified into four buckets: pre-tax money in the TSP/401(k), after-tax money in our Roth IRAs, home equity, and a taxable account.  When we looked at the first two buckets in early 2018, we felt that we already had enough money invested in the stock market and that home equity would be a nice safety net. Finally, the Tax Cuts and Job Act meant that we would be claiming the standard deduction going forward. The absence of a mortgage interest deduction, along with a guaranteed rate of return equal to our mortgage interest rate, made this an easier decision.


Why it may not work for you?


Liquidity, retirement savings, and possibly college savings.  Paying off the mortgage comes after meeting your retirement savings goals, making sure that you have enough money in your emergency fund and having enough liquidity to adjust to any of life’s challenges.  If you have college savings goals, paying off your mortgage may have to wait as well. When you are able, we encourage you to enter retirement with a paid-off primary residence.


2.  Investments – Steady as She Goes


Despite the volatility in the stock market, we did not change our asset allocation and continued to fund our Roth IRAs and our 401(k) plan.  


Why we did it?


Financial planners usually rebalance based on time elapsed (once or twice a year) or a percentage change basis (5% change from your target allocation).  For us, the best time to rebalance is at the start of a new year because we lump sum fund our Roth IRAs and can direct the new contributions to the assets we need to shore up.  This is also the perfect time to objectively look at your asset allocation and make small adjustments. Think of it as slightly changing your glidepath down to retirement. Remember, the perfect portfolio is one that you can live with, not what your colleague is doing with his/her money.  Check your balance as little as possible over the year so you will not overreact to market events. If you have a side business without full-time employees (or with your spouse as the only employee), we recommend you consider an individual 401(k), commonly referred to as a solo 401(k). The owner of the business can contribute 20% of net self-employment income and the company can contribute 25% of your spouse’s income.  Vanguard has one low cost option in this area.


Why it may not work for you?


If you have not adjusted your stock allocation over the last ten years, you probably need to make a bigger adjustment.  If you are nearing retirement and are not satisfied with your TSP or 401(k) balance, don’t take on too much risk at this late stage.  We encourage you to consider other options such as working longer, adjusting your spending, downsizing, or moving to a less expensive area.


3. Human Capital: The Invisible Asset on Your Balance Sheet


Your skills and talent, or human capital, translate into your ability to earn money.  Do not allow your human capital to become a forgotten asset on your balance sheet: give it the attention and development it deserves.  Sometimes you cannot reduce expense to get to where you want to go and you need to increase your earnings. In 2018, Sherise accepted a four-day a week position at our local hospital and I was added to the State Department’s management consultant roster (REA), attended two financial planning conferences, and spent many hours on continuing education. These changes added to our earnings and ability to earn money and, while the continuing education and professional development opportunities are expenses, the benefits should not to be overlooked on your balance sheet.


Why we did it?


We believe diversifying income streams is as important as diversifying investments.  Plus, these moves added needed income that will help us grow our business faster and fund other goals.  Of course, there were other reasons for our employment changes in 2018. I really missed my State Department colleagues and working with the local staff overseas and Sherise wanted to get certified as a Diabetes Educator.  Developing our human capital was not only fun but allowed us to expand our networks, strengthened our professional experience, and ultimately made us more marketable in case life takes an unplanned turn.


Why may not work for you?


We think that developing your skills and talents will always pay off.  It may result in a promotion in your current job or may require a move to a competitor or to another industry to get the recognition and compensation that you deserve.  Don’t become discouraged if you need to take a step back and gain additional education. Additional training and certifications are one of the few areas that loans can make sense (if well thought-out).  


Everyone faces tough choices when money and life collide–financial advisors are no exception!  We hope by reading about our family’s money decisions, you will be better equipped to navigate your own money choices.  We wish you the best of luck in 2019.  Be on the lookout for Getting Personal: Sneak Peek of a Financial Planner’s Own Money Moves in 2018 (Part II).


As a former Foreign Service Officer and Air Force pilot, I’m passionate about continuing to serve those in government and the military.  Our services and publications are designed for individuals and families in these communities. Follow me – Chris Cortese - on LinkedIn so you can continue to benefit from our expertise.


Chris Cortese
Financial Planner & Founder
Logbook Financial Planning, LLC



“Investment advisory services are offered through Logbook Financial Planning, LLC, a Licensed Investment Adviser in the state of Maine and Registered Investment Adviser in the state of Virginia” “All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.” “Logbook Financial Planning, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.



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