••• December 2018 Issue  •••


Thanks Giving Can Be An Everyday Event

Why Releasing Your Inner Santa Is a Good Thing


Science can tell you why Santa is so jolly. It has nothing to do with getting to travel the world or only having to work one night a year. And being able to eat all the cookies he wants because no one judges him for being fat isn’t a contributing factor either.


What makes Santa, Kris Kringle, Father Christmas, St. Nicholas or whatever you want to call him so cheery is that he’s mastered this whole giving-is-better-than-receiving thing.


Yes, there really is scientific evidence that you’re happier giving your money to others than spending it on yourself. Numerous studies over the past decades demonstrate a “giver’s glow” or “helper’s high” that stems from being generous. And this holds true across the globe, regardless of income level or gender.


But enough about Santa and science. Let’s talk about you.


Scratch that. Let’s talk about who you want to help. I always suggest that my clients focus directly on who they’ll be giving to because it provides clearer guidance for their thinking.


Of course you’ll also have to decide how much can you afford to give and when should you bestow your gifts.


Let’s tackle the first question first.


The only real way to know how much you can afford to give is to know where your finances stand. What are your sources of income today and in the future? How much have you put away? How much do you need each month, both now and years from now? How many years do you think your money will have to last?


Then you look at what you have, or will have, minus what you need for the rest of your own life. Whatever is left you can spend as you wish on whatever you like.


If that means doling out some excess wealth to someone else, then the question becomes, should you give your gift now or later? This subject isn’t quite as straightforward because there is a lot of emotion wrapped up in it. But here are some things that I suggest my clients consider.


First, your gift is likely to be more impactful now versus later. Yes, it’s dramatic to give a big inheritance to someone once you’re gone. But really, where’s the fun in that? Except as a plot twist in movies, of course.


Giving money to your loved ones or charities now means you get to see the impact it has on their life or organization. And this is where it really helps to focus on your specific recipient. For example, if you’re thinking of leaving a grandchild $50,000 in your will, wouldn’t that money be more meaningful doled out in $12,500 increments over four years to help defray tuition costs? Or if you’re leaving part of your estate to a charity, will they even be around decades from now when you’re gone?


Another reason to choose the here and now is to use your gift as a trial run. If you hand $5,000 to a friend who’s having trouble making rent and they blow it on a pair of Jimmy Choos, do you really want to leave them a larger chunk of change later?


And then there’s the reason for choosing now that’s near and dear to me. I’m a huge proponent of giving your values along with your money. Here are two strategies that I use with my own sons.


The first is to match the money they put toward a goal. For every $1 they save, I contribute $5. Technically I’m giving my sons money, but I’m teaching them about saving at the same time.


My second tactic is to insist that they give back part of what I give them. I might hand each twin two $5 bills with the caveat that they can spend $5 on themselves, but the other bill has to be spent on someone else. This is a really fun way to teach them how good it feels to give to others.


And yes, these tactics work equally well for adults.


However you choose to share your money with others, you’ll feel a rush of dopamine and endorphins that stem from the act of generosity itself. And you don’t even have to put on a Santa suit.




••• November Issue  •••



Thanks Giving Can Be An Everyday Event


For this month’s column, I’d like to share something that’s an essential part of me—because I think it may benefit you, too.


What I’m talking about is gratitude and the role it plays in who you are.


Once turkeys begin filling grocery store meat cases, many people start preparing their “what I’m grateful for” speech for Thanksgiving dinner. While I love that tradition, I don’t limit my thanks giving to just one day. In fact, it’s something I consciously practice each and every day, in all aspects of my life.


I count my blessings before going to sleep each night. Gratitude is a value I’m working hard to instill in my young twins. And it’s something I’ve woven into the company I helped found, Brio Financial Group. In fact, as corny as it may sound, our team starts off every Monday sitting around the conference table, listing what we’re grateful for.


By now you may be thinking, wait, isn’t this a column about money? What does being grateful have to do with finances?


Call me an eternal optimist, but I genuinely believe that being grateful for what you have can make you richer. Not necessarily in dollars-and-cents wealth, but in how you feel about your life—which is so much more important.


Here in the Bay Area, it’s easy to feel poor financially. Watching 20-somethings pay cash for multi-million-dollar homes after winning the start-up lottery can evoke that green-eyed monster. Or you might feel jealous of friends who can afford to retire years before they’re eligible for Medicare or those who can send their kids to the best schools.


But if you’re going to compare yourself to other people, maybe it would be smart to think about populations outside of our insular Bay Area. Look at what you have versus the rest of the country—or better yet, the rest of the world. Could you raise a family on two minimum-wage salaries? Would you want to trade places with someone in Florida or the Carolinas who lost everything to natural disasters and doesn’t have insurance or adequate savings to replace it? Aren’t you much, much better off than those forced to flee their homeland because of violence or climate conditions?


My point here is that when looking at other people’s lives, you’re always going to find those who are better off than you are, as well as those who are worse off. So instead of measuring what you possess versus someone else, why not focus on the many things in your life that you have to be grateful for?


You can start with being thankful that you’re able to live in or near this culturally rich city with fabulous weather and world-class cuisine. A place where opportunities abound for your favorite outdoor activities, whether that’s surfing the waves, skiing the slopes or just sunbathing in the buff. And you benefit from the Bay Area’s pioneering politics, which often show the rest of the country, sometimes even the world, a better way forward.


What’s more, if you can afford to live here—and are reading a column called “Money Matters”—it’s not likely that you’re poor. So ask yourself this: how much do you really need to accomplish what you want in life?


If you’re on track, stop worrying about things that might never come to pass and trap you into thinking that you need even more money. There’s no need to gamble on riskier investments for potentially higher pay-offs if lower-risk investments can deliver returns that meet your needs. And realizing that you have enough in the grand scheme of things can make you more appreciative.


If you’re not yet on track, figure out what’s realistic and make a plan to get there. Knowing that you’re working to meet your goals can be way more satisfying than just pursuing money for it’s own sake. Plus, you’re likely to feel more thankful for what you have when you measure your money by how it moves you closer to your goals versus looking at where someone else stands in their life.


By putting things in context, you’ll likely discover that you’re richer than you think. Now that’s something to be grateful for.


••• October Issue  •••



Invest Like a Girl (That's a Compliment!)




A favorite taunt of schoolyard bullies trying to bolster their fragile egos is to tell other boys that they do something “like a girl”—as if that was the worst insult in the world. The truth is, we could all benefit from doing a lot more things the way women get them done.


Investing is one of those areas. Yes, women really are better investors than men. And that’s demonstrated in study after study. Research from Fidelity Investments in 2017 showed that women earn higher returns than men while taking on less risk—an ideal combination. They also found that women save more then men, which is good because they probably earn less.


These findings are supported by a 2016 paper from Australian economics professors, a 2015 study from a computerized portfolio management company, and all the way back to a 2001 scholarly article that found women earned 1.4% more in annual risk-adjusted net returns than men.


So what’s their secret?


Turns out, some of the traits we think of as inherently feminine are perfectly suited to successful investing. Which means employing women’s strategies—whether you’re a he, she or they—can potentially help you yield better investment results.


What Women Do Right When They Invest


•Save more.

The best thing women do for themselves as investors is put aside more of their earnings than men generally do. The Fidelity Investments study shows that women contribute an average of 9% of their paychecks into workplace retirement accounts vs. an average 8.6% for their male counterparts. Outside of the workplace, IRAs and brokerage accounts for example, the average percentages are 12.4% for women vs. 11.6% for men. At first glance, these percentages may seem small. But with the miracle of compounding, over many years, these fractions can add up to hundreds of thousands of extra dollars.


•Focus on goals.

Perhaps women save more because they tend to view investing as a way to accomplish life goals for themselves and/or their families. Men too often view investing as a competition, a perpetual game of “beating” the market. Rather than make investing decisions based on whether they advance life goals, too many men resort to that stereotypical male trait of focusing on performance. And my, my, my that can lead to bad decisions.


•Take less risk.

Another trait that works in their favor for investing is that women are generally more risk-averse than men. Trying to maximize the efficiency of their investments, women are apt to use an asset-allocation strategy—just as every financial professional suggests. Women are particularly drawn to target funds, which manage risk based on when you need the money.


And then there are men. Overconfidence often leads them to take on more risk than is appropriate for their circumstances, or is needed to achieve similar results. They’re also more prone to commit that financial sin of chasing returns, often watching their “sure things” and “best” investments fizzle out months after buying.


•Buy and hold.

Patience is most often considered a feminine virtue, perhaps because you have to be highly patient to choose to sacrifice your body for nine months to welcome new life. But lo and behold, patience is exactly what’s needed for the buy-and-hold strategy stressed by financial professionals.


Men, well, need I bring up that competition thing again? “Hey, how can you beat the market if you don’t buy and sell?” may explain why the Fidelity Investments study found that men are 35% more likely to make trades than women. This can lead to higher fees and a lower return, which is obviously no one’s goal.


•Admit they don’t know it all.

We could call this the “women will stop and ask for directions” trait. I hate to keep beating the same drum, but male overconfidence can also be blamed for men’s tendency to plunge in and buy or sell something without always understanding if it actually benefits them. Women are more apt to ask questions, do research, and consult with friends and professionals before making decisions.


What I’m trying to emphasize, is that if you want to pump up your portfolio, it might be smart to get in touch with your feminine side, regardless of how butch you consider yourself. In a nutshell, you’ll probably benefit from taking a long-term view, saving more and trading less—just like women do.




Who’s the Better Investor: Men or Women? Fidelity Investments, May 18, 2017.


Wei Lu, Peter L. Swan and P. Joakim Westerholm, The Gender Face-Off: Do Females Come Out on Top in Terms of Trading Performance? 29th Australasian Finance and Banking Conference, August 20, 2016.


Data Suggests Women Are Better (Behaved) Investors, Betterment Resource Center, March 3, 2015.


Brad M. Barber and Terrance Odean, Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment, Quarterly Journal of Economics, February 2001.



••• September Issue  •••


Think Your Financial Decisions Are Rational?

Perhaps Not.


You probably think your financial decisions to save or spend, buy or sell are based on taking in all the information at hand and selecting the right option for you. Psychologists know better.

The truth is, every decision you make is influenced by subconscious biases. Financial decisions are no different. You can do all the research you want on investing, but if you don’t account for your blindspots, your decisions might have unintended consequences.

Preconceptions can sometimes work in your favor, but just as often, they can cause you to lose money, opportunities or sleep. And personal biases across the greater population can lead to market swings, bubbles, panics and other irrational behaviors.

Researchers have started studying how human foibles impact portfolios, markets and whole economies in a field known as behavioral finance.


Behavioral Finance and How It Helps You


Behavioral finance aims to explain why people make the money choices they do. It combines economics with psychology—particularly cognitive reasoning—to identify the mental shortcuts people use to make decisions about how to spend, save and invest their money.

What does it offer you? Being aware of the biases that can creep into your decision-making allows you to adjust your behavior and make more rational—and hopefully, more profitable—choices.


Some of the most common biases include:

• Herd mentality. Following the crowd is common, whether that’s buying a hot stock or selling in a panic when the market drops. If you’re tempted to do what everyone else is doing, take the time to think if it’s really right for you.


• Overconfidence. Most people think their successes are something they caused and their setbacks are due to external forces. So you’re a genius when your stock rises, but a hapless victim if it tanks. This can tempt you to take on more risk than necessary or keep a losing investment longer than you should.


• Mental accounting. People have a tendency to allocate money for various purposes, putting it into separate “accounts” and treating it differently depending on which account it’s in. The issue with this bias is that it can keep you from putting your money to its best use. For example, you may have a rule that once you add money to your savings, you’re not allowed to touch it. But it may make more sense to pay down high-rate debt that costs more than your savings earn.


• Value attribution. All of us make buy or sell decisions based on values we attribute to the item, which may or may not be based in reality. For example, you might be willing to pay $200 for shoes from Nordstrom because you believe them to be high quality, but you would balk at that price if they were at Payless. An example of how this can hurt you is a losing investment that you won’t sell until it reaches the price you paid for it, even though cutting your losses might be smarter.


Behavioral finance has enormous potential to add to our understanding of what motivates people and moves markets, and it can lead to a wide range of improvements in the industry.

While it may be a relatively new field of study for researchers, good financial advisors have always understood that financial planning is as much art as science. Humans aren’t always rational, so you can’t base decisions solely on what makes financial sense. It’s our job to use what I call a reality overlay to make sure the plan fits the person.


For example, a client might believe that paying off their house before retirement would be best, so they add $100 extra to their monthly mortgage payment. With a low interest rate and tax advantages, the numbers say that it would be better to invest that extra money each month. But if I know my client would likely fritter away the extra cash rather than invest it, it makes more sense to keep adding the $100 to the mortgage.


Bringing your hidden biases to the forefront can add another arrow to your quiver when you’re aiming for financial independence. Or you could just rely on your friendly neighborhood financial advisor to save you from yourself


••• July / August 2018 Issue  •••

Plan for Financial

Freedom—Even If You’re Not Rich


In honor of Independence Day, let’s focus on a freedom you probably want to achieve—your financial independence. You know, that time of your life when you have enough money to kiss your job goodbye and pursue your passions.


Sounds great. But for most of us, it also sounds like a long slog. Achieving financial freedom means you have to accumulate wealth. And the surest way to build wealth is to spend less than you make. When you live someplace as expensive as the Bay Area, it’s hard not to pay out every cent that comes in.


To get ahead financially, you have to prioritize, make sacrifices and stay disciplined. Ugh, sounds hard and like zero fun.


But it doesn’t have to be. Really. It just takes a new way of looking at the challenge ahead of you.


For example, you may tell yourself that if you make enough money, you can travel to lots of fun places. So you spend all of your time


working to accumulate what you deem to be enough money instead of focusing on where your next trip should be.


Now flip that thinking 180 degrees. You want to travel to fun places so how can you earn enough money. This opens you up to other possibilities. Do you really need a big home, cable TV or even a car when you plan to be gone so much? Or would that money be better spent on travel? Would two part-time jobs with greater flexibility be a smarter option than one job with limited vacation time? Perhaps you could work for a time, travel until your funds get low, work some more, travel again, and so on.


The point here is that letting your dreams dictate your finances and not the other way around allows you to focus on something you love. And that gives you greater motivation to act and stay on track, while making you way more creative in how you bring your dreams to life.


With that new attitude in mind, here are some suggestions that can help you be more successful:


Be specific about your goals. Vague dreams and wishes are hard to work toward. Instead of just fantasizing about being your own boss, figure out what type of business you want to open. This allows you to plan for specifics such as the work space, equipment, staff, training and other elements you’ll need to open your doors. The more precisely you can define your goals, the better you can plan for them.


Do the math. Don’t worry, there’s no advanced algebra involved, just pretty basic equations. Add up what your dreams will cost. Subtract your expenses from your income. How much do you have left over to invest in your dreams? Where can you earn more or spend less to increase your savings? You may find online financial calculators or a financial advisor to be useful here.


Develop a disciplined approach. The best-laid plans can easily get sidetracked if you rely on willpower alone. Instead of putting money aside just when you feel flush, set up a regular investment schedule and have money deducted directly from your paycheck or bank account. This is known as paying yourself first, and it’s a tried-and-true way to build wealth.


Another good tactic is to give yourself an allowance. Make it forbidden to dip into the rest of your funds for anything except true emergencies. And no, Cher’s final Final Farewell tour is not an emergency. You’ll have to revert to saving a portion of your allowance for your want-to-haves, just like you did when you were a kid. See, saving money can make you feel young again.


Again, online resources, financial advisors and even a life coach can help you track your spending, stick to your budget and keep moving toward your goals.


Accept that s^$*&#$(%@ happens. Even if you do everything right, there’s no guarantee of success. Accidents, natural disasters, job loss, divorce, a sick child—there’s no shortage of things that can derail your plans. Do your best to put safeguards in place, such as insurance and emergency savings. And then try to accept that you can’t control everything.


A life-changing event might also make you re-evaluate your dreams. If that’s the case, you can start anew with precisely defining your goals, doing the math and implementing a plan to make these new dreams happen.


You don’t have to be young or rich to benefit from a goals-based approach to saving and investing. Anyone can use this technique to build wealth that can lead to financial freedom—and the realization of their dreams. Sounds like a reason for fireworks.


The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.


Brio Financial Group is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.


••• June 2018 Issue  •••



Want to Protect Your Partner? Marriage Isn’t the Only Option.


It’s been three years since the odious Defense of Marriage Act was overturned, finally allowing same-sex couples to legally marry. As great as having the marriage option is, you may be among the many people—LGBTQ and straight—who don’t care to walk down the aisle. Maybe you don’t want marriage to ruin your relationship. Or your domestic situation involves more than the one partner sanctioned by marriage laws. Perhaps you’re both older and don’t want to mix finances. Or you might not be getting married for the sake of your kids.


Regardless of why wedded bliss isn’t for you, it’s important to recognize that your financial planning issues are more complicated, and often much more important, than for married couples.


Some workarounds are easy, such as having the wealthier or higher-earning partner pay more household expenses and make all the charity donations. But there are a couple of areas where you might want to review your plans and paperwork if you’re not married or are domestic partners, which doesn’t carry all the financial benefits of marriage.


Retirement Planning


Beneficiary designations. Unmarried partners don’t automatically receive retirement plan benefits like spouses do. So make sure you specify who you want to inherit your 401(k), pension, IRA and other retirement accounts, and update your beneficiary(s) if circumstances change. This can help avoid the probate process that may leave your loved one out in the cold in favor of a blood relative.


Social Security income loss. Non-spouse partners also aren’t eligible for Social Security survivor benefits. Be sure to take that into consideration when projecting your retirement income.


Inherited IRA restrictions. Spouses can transfer ownership of their spouse’s IRA, allowing them to gain tax advantages by delaying or reducing minimum distributions after the account owner’s death. Unfortunately, unmarried partners don’t receive this benefit and would do well to plan for the resulting tax implications.


Estate Planning


Gifting restrictions. Spouses can gift assets to each other with no limits on the amount. Unmarried couples are restricted to how much they can give each other—currently $14K/year—and will trigger a tax bill if they exceed this amount. You can avoid taxes by structuring the “gift” as a loan, or filing a gift tax form that includes the extra amount as part of your lifetime gift exemption amount.


Estate tax limitations. Non-spouses can’t take advantage of the unlimited marital deduction for estate taxes. If your estate is very large, it might make sense to arrange your finances so that the surviving partner can access enough cash to meet tax payments on the estate.


Ownership and legal documentation. Many of the legal protections and privileges that spouses enjoy don’t apply to partners who aren’t married. This makes it vital to create and keep up-to-date important documents such as wills, trusts, health-care proxies and directives, power-of-attorney designations, and more. For property and other assets that you own with someone else, you may want to ensure that you hold the title in a way that ensures it will be distributed as you wish after the death of an owner.




Life insurance safety net. Life insurance proceeds can help provide ready cash for a surviving non-married partner, which can be used to hold onto property or pay tax bills. And it’s particularly important to have an adequate policy if there’s a large inequality in what each partner earns.


ILIT workaround. An irrevocable life insurance trust (ILIT) is a great way to compensate for not being able to take advantage of the unlimited marital deduction for estate taxes. Benefits are paid directly to the trust, which shields beneficiaries from income and estate taxes.


Health insurance considerations. Restrictions on many employer-provided health insurance plans mean non-spouses aren’t eligible for coverage. Your financial plans should make sure everyone has enough health insurance. Also, if the partner who provides health benefits loses his or her job, COBRA benefits only go to qualified beneficiaries, which includes a spouse or former spouse and dependent children. Here again, planning for this contingency can help avert a financial crisis.


The point of this article isn’t to convince you to get married, but rather to illustrate how important financial planning is to you and your non-spouse. After all, planning for your partner’s financial future can show more love than any piece of paper from City Hall.




The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.


Brio Financial Group is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.




••• May 2018 Issue  •••



How the Tax Changes Impact Your Business

If you’re a business owner like me, you probably dread adding anything else to your plate. But it might be worthwhile to spend a moment seeing how the recently passed Tax Cuts and Jobs Act of 2017 will affect your tax bill. You might even like what you learn!


The much-vaunted drop in the corporate tax rate—it’s now a flat rate of 21% versus ranging from 15-35%—is great if your business is a C-Corporation. But it’s more likely that your company is structured as an S-Corp, Limited Liability Company (LLC) or sole proprietorship. So this tax cut probably doesn’t help you.


But here are some changes that may actually work in your favor:


Pass-through deduction.

Before telling you how great this benefit is, let’s first look at who is eligible for it. A pass-through entity means that the profits and losses of the business flow through to the owner, who reports it as personal income. Accountants, consultants and mom-and- pop shops are all perfect examples of pass-through entities.


If your company falls into this category, the new law says you don’t have to pay taxes on 20% of your business’ earnings. That’s a pretty sweet benefit.


And you don’t even have to itemize your taxes to get this deduction. Your taxable income just has to be below $157,500 if you’re a single filer and $315,000 if married, filing jointly. If you earn more than that, you can’t claim this 20% deduction if your business consists of professional services from one individual. (Think doctors and lawyers.) There may be ways to defer some of your income, though, so you can qualify for the deduction. If you don’t offer professional services—you sell products, for example—you qualify for the deduction no matter how much money you make.


Large expense write-offs.

This one is good news if your company needs to purchase vehicles, furniture, machinery or even computers. You can now deduct 100% of the cost—it used to only be 50%—in the year you buy the equipment instead of having to depreciate it over several years. You can also take the deduction over five years versus the old law that only let you take the deduction in the year the equipment was put into service.


But wait, it gets better. You can write off up to $1 million, which is a significant jump from the previous threshold of $510,000. And, it’s not just new equipment that’s eligible. You can also write off used or old equipment that you purchase for your business


Accounting method changes.

If you deal with a lot of inventory, you’ll like this part of the new tax law. Previously, if your company made more than $5 million, you were forced to use the accrual accounting method. The threshold has now been bumped up to $25 million. So if you make less than that, you now have the option to use a cash accounting method. Why is that good news? Because cash accounting lets you deduct the cost of inventory when your business pays for it, instead of when you sell it.


Corporate AMT repeal.


The Alte rnative Minimum Tax has been eliminated for businesses, leaving you with one less potential headache.


Of course, not everything about the new law will benefit your business. There are several business deductions that the new law eliminates altogether or makes harder to take advantage of.


You can no longer write off your expenses for entertaining business clients. But don’t worry, office parties are still fully deductible.


If you offer transportation benefits to your employees, such as a public transportation pass or parking fee reimbursement, that’s no longer deductible either.


The Net Operating Loss (NOL) deduction, which used to be unrestricted, is now limited to 80% of a business’ taxable income. In years past, if your business sustained a loss, you had the option of using those losses to reduce any taxes paid in the past two tax years or to reduce any future taxable income for the next 20 years. Now you can only carry the NOL forward.


And there’s also bad news if your business carries a lot of debt. Previously, there were no restrictions on the amount of interest you could write off for small business loans. But the new law reduces the deductible amount to 30%.


The main takeaway is that there are some great opportunities to leverage and some pitfalls to avoid. Consulting with your tax or financial professional early on (especially this year) could translate into a significant break on your taxes.


••• April 2018 Issue  •••



The President tweets and the markets soar. His next tweet sends the Dow toward its worst day ever. Months of astounding gains are wiped out in a single day. And before you can fully absorb what has happened, another domestic or global situation causes the market to rise and fall like a Richter scale during an earthquake swarm.


So how do you keep calm and carry on when it comes to your investments? Here are a few suggestions:


Keep things in perspective. Simply put, volatility is a given when you are investing. Everything from political uncertainty at home or in the far corners of the world to natural disasters to breakthrough discoveries can impact investor confidence. But history has repeatedly shown us that market setbacks are typically followed by periods of recovery.


Create a goals-based plan. Instead of chasing the next great investment or bailing out when stocks tank, develop an investing strategy that centers around what you want to achieve in life. Your goals are probably more stable than the markets, so a solid plan makes it easier to weather ups and downs.


A goals-based plan also removes the temptation to try market timing, where you attempt to buy when investments are low and sell when they’re high. This is challenging, to say the least, since no one really knows where the market is headed at any given time. And it could actually end up costing you money if you get into or out of the market at the wrong time.


Diversify your investments.

Investing in different types of assets helps spread out your risk. Often when one type of investment is down, another asset class may be experiencing banner growth. For example, bonds may offer an island of stability when stocks and other equities are plummeting. Using an asset allocation strategy, you can balance risk and reward by investing in different types of assets in portions that make sense for your goals, risk tolerance and time horizon.


Invest regularly. One of the smartest ways to combat market uncertainty is to create a regular investment schedule. You can choose any interval that works for you—weekly, monthly, quarterly or per paycheck. The beauty of this strategy is that you invest during both peaks and valleys, which helps even things out. And this disciplined approach helps ensure that short-term downturns have minimal impact on your portfolio’s ultimate performance.


Review your investments often. The world is always changing and your investments may need to change too, to reflect new realities. An annual review of your portfolio can help make sure your investments take advantage of new opportunities, while still aligning with your ultimate investment goals.


Turn to the professionals. You may have read through all of these suggestions and still not be totally comfortable making important investment decisions yourself. No worries. A financial planner can help you sort through the myriad options and create an investment strategy that works best for you.


If you are nervous about your investments, especially when the market makes a major correction and drops precipitously, you might be in the wrong ones. A financial professional can help you find assets that are a better fit for your risk tolerance. They can also make sure your investments reflect your values (keeping gun investments out of your portfolio, for example), and advance you toward your goals.


Whether you turn to professional help or invest on your own, the main thing to remember is that a solid financial plan that is based on your goals provides one of the best antidotes to the anxiety caused by a roller-coaster investment market.



••• March 2018 Issue  •••


Own a home? Here’s how the new tax “cut” affects you.


Our state taxes alone are the highest of any state in the Union, according to the Federation of Tax Administrators.


But every April 15, homeowners could find a little relief in the form of tax deductions. We could deduct the full amount paid for personal (non-business) state and local property taxes. And that was on top of being able to deduct every dime paid in state and local income tax.


Ah, the good old days.


Sadly, California homeowners may have just been jobbed by the Tax Cuts and Jobs Act (TCJA). That’s because if you itemize your taxes, there is now a cap on how much you can deduct. And it’s way below what many of us have become accustomed to subtracting from our tax bill.




Of course, the TCJA hopes to make itemizing less attractive by doubling the standard deduction to $24,000 for joint-filing couples, and $12,000 for individuals and those filing separately. But that may be little consolation for California homeowners.


Let’s take a closer look at how the TCJA may impact you.


State and Local Tax Deduction Limits


Schedule A of Form 1040 used to be a friend of the homeowner. By itemizing, you could deduct the full amount of your state and local income and property taxes. (Unless you’re subject to the alternative minimum tax, which disallows these deductions and will continue to do so under the TCJA.)


But now married couples can only deduct up to $10,000—for both income and property taxes. That’s only a $5,000 deduction if you’re single, or married and filing separately. And again, this limit is for both your state and local property taxes AND your state and local income taxes. Ouch.


Oh, and that home you own in Belize, or anywhere outside the U.S.? No personal property tax deductions for that piece of paradise any more.


There is one way you can potentially deduct a little more from your property taxes. If you have a home office or rent out part of your home, you may be able to deduct the portion of your property taxes allocated to that business or rental use on top of the $10,000. Luckily, we have a lot of entrepreneurial types in the Bay Area who may be able to gnaw on that bone Congress threw to us.



Mortgage Interest Deduction


There are a few changes happening here too, that don’t work in favor of Bay Area homeowners. If you buy a property any time after December 14, 2017, only $750,000 of your mortgage debt is deductible. That’s down from the $1 million it used to be. (Purchases made prior to mid-December of last year aren’t affected by this.) The new deductible limits and effective dates apply to second homes, as well.


If you want to refinance a property you purchased before December 14, 2017, you can still deduct the interest on your debt up to $1 million, as long as the new loan doesn’t exceed the amount you’re refinancing. So if you were thinking of pulling out an extra forty grand to redo your bathroom, that extra amount won’t be deductible.


And you might not want to turn to a home equity loan for that extra cash, either. Starting in the 2018 tax year, you can no longer deduct the interest you pay on this loan. So it may make sense to start paying down any outstanding debt you have here as quickly as possible.


As always, it’s best to consult your tax professional to make sure you comply with new rules and don’t lose out on potential gains.


And speaking of gains, one thing Congress didn’t touch are the rules affecting how much you can deduct from your taxes when you sell your home. You can still exclude up to $500,000 in gains if filing jointly and half that if filing individually. So if the high cost of living in the Bay Area becomes too frustrating, you can always sell and go elsewhere.


Or wait until 2025. Unlike the massive tax cuts to corporations that are permanent, the revisions to personal tax codes are set to expire in six years. There’s hope for us yet.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.

••• February 2018 Issue  •••

Does the new tax law help or hurt you?


The President called the new tax law a “big, beautiful Christmas present” for Americans. Now that we’ve had a little time to unwrap the impact of the new tax code, let’s see if you got a shiny diamond—or a lump of coal.


Here are some of the major changes:


• Lower income tax brackets.

There are still seven brackets, all of which are going down except for the very lowest earners. Sounds great, except other changes may offset what you save here. And in 2026, the rates go back to 2017 levels unless Congress extends them.


• A higher standard deduction.

The deduction rises to $12,000 for single filers and $24,000 for joint filers. With this increase, most filers—94% according to the Joint Committee on Taxation1—won’t bother itemizing their taxes (but they still won’t be able to file on a postcard). See below for why you’re getting this “gift.”



• Elimination of most itemized deductions.

Yep, you’ll need a higher standard deduction, because there are fewer items that you can use to lower your taxes. That $4,150 personal exemption you used to be able subtract for each person claimed? Gone! Moving expenses for a job relocation? No more unless you’re in the military. Deductions for alimony payments? Not if you get divorced this year or any year thereafter. Writing off the interest paid on your home equity debt? Kiss that goodbye. What all this means is that for many income brackets, the higher standard deduction won’t offset these lost deductions.


• Caps on deductions of state and local taxes—including property taxes.

If itemizing still works in your favor, you can now only deduct up to $10,000, not the unlimited amount that used to be eligible.


• Lower mortgage interest deductions.

Homeowners who bought prior to 2018 aren’t affected, but new owners can only deduct the first $750,000 of mortgage debt—not the $1 million that used to be eligible. This change is particularly painful for us in the San Francisco Bay Area given that the median home price was $787,000 in December 2017


•Higher AMT threshold.

Fewer people will have to deal with the dreaded alternative minimum tax now that the exemption has been raised to $70,300 for singles and $109,400 for joint filers.


• Doubled estate tax exemptions.

Fewer large estates will be subject to the estate tax now that the threshold is twice the former amount of $5.49 million for individuals and $10.98 million for married couples.


•Expanded credits for dependents.

The child tax credit doubles to $2,000 per child, 17 and under. It’s now available to single parents earning up to $200,000 and married couples making up to $400,000. And there’s a new $500 credit for taxpayers claiming non-child dependents, such as an elderly parent or adult child with a disability.


As you can see, the new law is a mixed bag. Some things work in your favor; others against you.


If you’re confused about whether to itemize or not given all these changes, it may make sense to go see a tax professional. But don’t try to deduct their fees from your taxes. That break has been eliminated as well.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.




••• December 2017 Issue  •••

Make Sure Your Charitable Donations Have the Impact You Want


The holiday season is in full swing, and so is charitable giving. In fact, 40% of charitable donations take place in the year’s final weeks. And I’m proud to say that our LGBTQ community donates a higher percentage of our incomes than the general population, showing that our voices — and values — matter.


If you’re feeling bighearted this year, you might want to check exactly where your contributions are going. The last thing you want to do is give to some charity that doesn’t support LGBTQ values.


So, what can you do to make sure your generosity has the impact you desire? Start by following these two steps:


1. Research the charity’s ranking


While a heart-tugging mission is compelling, a nonprofit’s actions drive the organization’s operational health. Services like Charity Watch or Charity Navigator can help you learn more about a group’s financial stability, transparency, and more.


Some organizations look great in theory but donate very little proceeds to their actual causes. Investigative reporting discovered that the 50 worst charities in the U.S. use less than 4% of their donations for actual cash aid. They also often use names that are very similar to other highly rated nonprofits in hopes of tricking donors.


Even if the nonprofit isn’t being deceptive, they may use their funds in ways you may not agree with. For example, more than 6,000 charities pay for-profit organizations to gather donations for them. In other words, your donation could help pay for the group to gather more donations — rather than actually giving back to the cause you care about.


So, before giving to a new nonprofit, explore their rating to make sure they are as charitable as they appear.


2. Make sure the charity’s track record upholds your values


After verifying the nonprofit’s legitimacy and rating, you can dig deeper to see what causes they really support (beyond their stated mission). For example, what’s the organization’s approach to social progress?


If you’re giving to a highly rated, LGBTQ–focused organization, such as the Human Rights Campaign, you can probably expect them to reflect your values. But how do you assess the values of smaller organizations whose mission has nothing to do with LGBTQ issues?


Some organizations, like the Girl Scouts, explicitly state their commitment to inclusivity and have returned donations that had discriminatory strings attached. Others are less overt in their stances or have more complicated histories, so you may need to research what they really stand for today.


The point is, whatever ideals matter to you should matter to the organizations you support, as well.


Ultimately, no matter your passion or priority, taking a little time to research a nonprofit can help ensure that your money drives real progress.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.


••• November 2017 Issue  •••


How to Find Transparency in Your Financial Relationship


Choosing a financial advisor is one of the most important decisions you’ll ever make. After all, this individual or team will have access to your life’s savings — and you have to trust them to guide you toward the future you desire.


But, amidst all the industry hype and jargon, understanding how to identify a true financial ally can be incredibly challenging.


Search for an RIA


One way to find a financial professional you can rely on is to look for a Registered Investment Adviser (RIA). This type of financial firm has fiduciary duty, which means they must always act in their clients’ best interests.


Of course, many talented and trustworthy advisors work for big-name firms. But the reality is that corporate priorities can also sway how they serve clients. Often, advisors at big firms have to meet sales quotas or push products that contribute to their employer’s bottom line. They might charge commissions for their work — even if their choices make you lose money.


RIAs have a fiduciary role when working with clients which includes disclosing any conflicts of interest, and must present solutions that are in their clients’ best interests. Not putting your needs first is literally against the law.


Expect Clear Communications


As an RIA, we have to complete a form called the ADV, which outlines every aspect of the services we provide for clients, the fees we charge, and how we work. And, the Securities and Exchange Commission requires us to write the content in plain English — which means no burying our true actions in jargon or legalese.


So, what can you do to help ensure you find clear guidance that looks out for your best interests? Start by asking the right questions.


The next time you meet with a financial professional, I recommend asking them these questions to help find the insight and transparency you deserve:


• Are you a fiduciary?


• How do you charge for your services?


• Where can I find information about conflicts of interest you may have?


• How will you put my needs first?


Ultimately, an RIA provides transparency you might not find at other firms. And in today’s complex, constantly changing financial world, you deserve to understand exactly what your advisor is doing on your behalf.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.



••• October 2017 Issue  •••

The Keys to Having Successful Financial Conversations when You’re Engaged


While money is a leading cause of marital strife, a recent Ameriprise study found that nearly seven in ten couples say they have good financial communication. Before wedding planning kicks into high gear, make conversations about your finances a priority. Taking the time today to talk through money matters can create a solid foundation for your collective future. Use the following six principles to guide your money conversations:


1. Open-minded.

Take turns sharing your vision for money management as a married couple. Listen carefully to what your future spouse says is important to him or her. Acknowledge your differences and build on your strengths. If your expectations don’t match up, try to find a compromise. Some couples sidestep conversations about money to avoid feelings of hurt, fear, anger or remorse. Creating a habit of regular communication may help you avoid heated arguments, and can help ensure you’re on the same page financially before you walk down the aisle.


2. Honesty.

Financial secrets can destroy trust. Share the specifics of your financial history and current situation if you haven’t already done so. Your future spouse deserves to know if you’re paying off college debt, or if you’ve made any financial mistakes in the past (and how you’ve rectified them). Disclose the good news, too. Divulge details about savings you’ve tucked away or a family trust that helps supplement your income so you both know the sum of where you stand.


3. Forward-thinking.

Once you’ve shared your current situation and history, discuss your goals for the future. Be open about what your dreams are, but be ready to compromise. While you don’t have to agree on everything, having shared goals (purchasing a home, saving for college if you choose to have children, retirement, etc.) allows you to combine forces on savings and gives you a road map for spending.


4. Cooperation.

To avoid any miscommunications as newlyweds, discuss and assign responsibility for financial roles. Is one of you better at monitoring online accounts and paying bills? Are you both enrolled in a retirement account and taking maximum advantage of employer contributions? Who will be the primary contact for your financial advisor, tax professional or estate planner? Two is better than one when you’re able to divide and conquer financial tasks, but make sure you’re both in the loop on key decisions and money matters.


5. Diligence.

Once you’re married, make it a priority to update your financial documents. It takes discipline, but taking care of these housekeeping tasks right away protects you in case something unexpected happens. Several steps to consider:



• Update financial accounts, insurance policies and credit cards with any name changes, and if needed, add your spouse as an owner and beneficiary to those accounts.


• Consider combining your bank accounts if it makes sense for your situation.


• Update or write your will and estate plan to reflect your collective wishes.



• Amend your tax withholdings, to make sure the right amount is withheld from your paycheck now that you’re married. Consult your tax professional before making changes.


• Choose your health insurance. If both of your employers offer health insurance, carefully evaluate your coverage options and premiums for the best fit.


Like most things worth achieving, preparing for a lifetime of financial compatibility takes work. If you and your future spouse can commit to the same money values, it may help you create a solid financial foundation.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals


••• September 2017 Issue  •••


Is There a Right Time to Take Social Security?


Social Security benefits are a cornerstone of retirement income for many Americans. Yet, deciding when to start collecting benefits can be a puzzle, and the solution is different for everyone. You can claim Social Security as early as age 62, or delay it until your 70th birthday. The longer you wait, the larger your monthly benefit will be. There are a variety of ways you can structure your Social Security claiming strategy, based on your income needs, personal savings and retirement goals. Use the following three scenarios to evaluate what timing is best for you:


Starting Social Security early


A person who will retire at age 62 is counting on Social Security to help meet income needs once retirement begins. His monthly benefit will be $1,500, 25 percent below what he would have received at age 66, which is his full retirement age.


Those who claim early will receive a smaller monthly benefit. If you are retired or plan to retire early, claiming Social Security before full retirement age may make sense. Social Security can help you cover living costs and prevent you from having to draw down significant sums from your personal savings. Therefore, this form of cash flow can help sustain your savings for what could be decades in retirement. However, if you keep working after you claim and your income exceeds the earnings limit, you might sacrifice some of your current Social Security benefits until you reach full retirement age.


Claiming benefits at full retirement age


A working spouse plans to claim her full retirement benefit at age 66. Claiming helps provide a cash flow cushion as she and her husband begin a slow transition into retirement. Her benefit of $2,733 per month would be 32 percent higher if she waited until age 70, but she will collect a minimum of $32,796 per year in benefits beginning at age 66.


Waiting until full retirement age to claim benefits means that your monthly paycheck will be higher than if you began taking them at an earlier age. For a married couple needing an income boost, it may be wise to have the lower earning spouse (who qualifies for a lower Social Security benefit) be the one who claims benefits first. This is because if the spouse earning the higher Social Security benefit is the first to die, the surviving spouse will begin to collect that person’s higher benefit. Therefore, it may make sense to have the higher-earning spouse delay claiming until he or she qualifies for the highest possible benefit.


Collecting benefits as late as possible


Starting on his or her 70th birthday, a person can begin collecting the maximum benefit. Knowing this, a wife who is the highest-earning spouse waits until turning 70 to first collect Social Security, generating income of $3,224 per month. That is 32 percent higher than the $2,450 monthly benefit she qualified for at full retirement age.


If you choose to keep working, or you rely on your savings until you claim at age 70, you will qualify to receive the maximum monthly benefit. After age 70, the maximum amount does not change, so there is no reason to delay collecting beyond your 70th birthday. Waiting to claim may make sense if you plan to continue working later in life or if you have sufficient assets to satisfy your income needs once you retire without risking your long-term financial security.


Be mindful when making decisions


Determining when to claim Social Security is something that is best done in the context of your overall retirement plan. Know what other sources of income are available and how those can best be utilized in conjunction with Social Security. Discussing this matter with your financial advisor can help you make suitable choices for your circumstances.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals





••• July 2017 Issue  •••


Finding Financial Stability After a Divorce


Managing finances following a divorce can be emotional and overwhelming. Even the best-laid financial plans may seem complicated as you adjust to your new situation and next steps. No matter how complex your financial circumstances may feel, the following steps may help you secure your financial future:


Adjust your budget to match your current lifestyle. Start by calculating your new monthly income, including spousal or child support if applicable, and estimate what you expect to earn over the next year. If you are a stay-at-home parent or spouse, you may decide to re-enter the workforce to bolster your income. Or the time may be right to switch careers or seek a promotion.


Next, look at your spending to see if you need to adjust your patterns. Whether you’ve decided to remain in your home or seek new living arrangements, crunch the numbers to see how much house you can realistically afford. Also, evaluate your lifestyle spending, including entertainment, dining out, and activities for your kids, to see if it’s necessary to trim your expenses. If possible, avoid making any major purchases until you feel comfortable with your updated budget.


Consider your children’s future. If you have children, they will understandably take center stage in your planning. It’s important to start thinking about how you’ll handle future financial milestones. Milestones may include paying for private grade school, college tuition, the down payment on a home, or a wedding. If you’d like to help your children with such expenses, consider these questions: Will you receive financial support from your former spouse? Do you expect your kids to contribute? As each event approaches, be up front with your kids about what you can afford so they can set realistic expectations.


Prioritize saving for retirement. No matter how close – or far – you are to retirement, make it a priority to update your retirement goals and continue building your nest egg. You are responsible for your own savings, and the biggest challenge you face financially is having enough money to cover what could be several decades of expenses. While retirement saving can feel overwhelming as you balance competing financial priorities, having a plan can help you feel more in control.


Ensure you’re protected. An important step following divorce is to maintain, replace or establish insurance that will help secure your financial future. All forms of insurance should be reviewed and considered, and your beneficiaries should be updated if needed. Make sure you understand the specific benefits that you and your former spouse are entitled to, as well as the life, health and disability insurance policies that you both own through your employers. If you have children, whose health insurance plan will be used to cover them? Work quickly to establish an insurance plan to avoid financial risk of being uninsured.


Consider the tax implications of your new marital status. Review your situation with a tax professional to see if you need to revise your tax strategy. Divorce can affect your tax situation in several ways. Impacts may include entering a different income tax bracket, providing or receiving child or spousal support, your investment strategy and your process for handling future tax returns.


Dream and plan for the future. Once you have a handle on your new day-to-day finances and retirement, allow yourself to dream and plan for other milestones that are important to you. Do you wish to visit every continent? Pay off your mortgage before retirement? Open a small business? Whatever your dreams, determine the cost of each one so you know how much you’ll need to save. Save what you can each month, and keep in mind that even small amounts will add up over time. If you’re tempted to spend the money elsewhere, consider establishing a separate savings account.


Don’t go it alone. Professional guidance from an attorney, tax professional, estate planner and financial advisor can ease the burden of managing your finances. It’s hard to start over, but you can do it. A financial advisor can help you with the complex decisions you face during a divorce and offer strategies you get on track to meet your new financial goals.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals


••• June 2017 Issue  •••

The Benefits of Diversification of Tax in Your Retirement Plan


Taxes are an often-overlooked aspect of retirement planning. While many Americans are saving diligently and focused on accumulating the biggest “nest egg” possible, many investors may not be fully considering the impact that taxes will have on their monthly income in retirement. This is an important dynamic to understand and will prevent any unnecessary surprises when you enter your hard-earned retirement.


Know your retirement plans


IRAs, 401(k)s, or other workplace plans are great ways to save and invest for retirement. Your contributions are generally made with pre-tax dollars, and you don’t pay taxes until you withdraw money. If you have access to a workplace retirement plan or an IRA, take the time to evaluate how your savings may be taxed in retirement. It’s important to factor this into your retirement income planning.


One way to potentially minimize the impact of taxes in retirement is to accumulate savings in an account that gives you access to tax-free withdrawals. To achieve this, many people choose a Roth IRA. Strategic planning and dedicated saving in a Roth IRA during your pre-retirement years may give you more options to manage your retirement income stream in a tax-efficient manner.


In general, a Roth IRA may make sense for investors who anticipate being in a higher income tax bracket later in life (examples include marriage, progressing in your career or annual raises), or who prioritize having tax-free retirement assets. Direct contributions to Roth IRAs are only available to those who meet specified income limits (check with your financial advisor or tax professional for details). You invest after-tax dollars into a Roth IRA, but if certain requirements are met, all withdrawals can qualify for tax-free treatment. This is a unique advantage that few other vehicles offer. Your employer’s plan may also offer a Roth option, which is a way to save even more money that benefits from this distinctive tax treatment.


You can also convert dollars from a traditional IRA or workplace plan into a Roth IRA. This allows you to put a larger sum into the tax-free category for retirement. A Roth conversion can also create a sizable tax liability in the year the conversion is made, so you need to determine if this strategy is suitable for you. If you want to use this strategy, you’ll need to have enough money available outside of the IRA to pay the taxes incurred. Always consult with your tax professional before moving forward with this strategy.


Tax-smart retirement spending


Generally, it’s a best practice to allow money with more favorable tax treatment to stay invested for as long as possible to extend those tax benefits. The advantage of owning a tax-diversified mix of assets once you reach retirement is that it helps you manage your tax burden on a year-to-year basis, per your personal circumstances. In any given year, your strategy may include:


• Withdrawals from a workplace retirement plan or IRA funded with pre-tax contributions that are fully taxable


• Distributions from a traditional IRA where a portion is taxable


• The sale of taxable investments where tax may or may not be due


• Withdrawals from a Roth IRA that are not subject to tax and don’t add to your taxable income


Managing income levels effectively in a particular year can help limit the amount of taxes due in that year. Depending on your income level, a portion of Social Security benefits may be subject to federal income tax.


Tax decisions should be one consideration in your retirement income strategy. Putting yourself in position to have options as you draw income requires planning in advance. Investing with tax diversification in mind may help you access income with different types of tax treatments in retirement. As you craft your strategy, be sure to discuss the potential tax treatment of your investments with your tax advisor.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, a private wealth advisory practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve financial goals


••• May 2017 Issue  •••

Essential Conversations About Family and Family Wealth


How confident are you about your family’s finances? How often do you discuss money with your loved ones? According to the Family Wealth Checkup study by Ameriprise Financial, there’s a correlation between financial confidence and communication. While many families are discussing financial issues, they tend to shy away from diving deep into topics like inheritance and estate planning, leaving some family members with unrealistic expectations.


Here are some tips to help you discuss money matters with your family.


Don’t wait for tragedy to bring up finances. Family conversations about finances lay the foundation for a more secure financial future for the people closest to you. Nine in 10 adult children say a life altering event triggered a financial talk with their parents. It’s a good idea to have these conversations when all the important players in your estate plan can participate and communicate their wishes or questions. With time on your side, you can cover topics thoroughly and have time to get the proper documents in place, if you haven’t already.


Although estate planning can be a tough and emotional topic to initiate, families who have talked about it say the discussion went much smoother than anticipated. Families said their conversations were straightforward and relaxed as opposed to awkward or difficult – even more motivation to have the talk with your loved ones.


Make the conversation a priority and schedule a time to chat. Rather than hoping a conversation will happen after dinner, let each family member know ahead of time that you want to talk. Complex estates may require multiple discussions, so schedule a date to continue the conversation if needed. After your initial conversations, keep your family members up-to-date about changes that could affect your estate, such as establishing a living will or cashing in an annuity.


Share your agenda ahead of time so that your family can prepare for the conversation. Consider starting the conversation by sharing your financial goals and values, and telling your family why these discussions are important to you. Other topics on the agenda may include managing current finances including any debt, healthcare costs and legacy planning.


Manage expectations. You don’t have to divulge the exact value of your estate or the amount of money in your accounts, but it’s important to disclose enough details so that your family can set appropriate expectations. If part of your legacy plan includes leaving an inheritance, consider letting your family know whether it’s an amount large enough to help fund your grandchildren’s education or maybe it’s closer to a down payment on a car. Most people plan to leave an inheritance, but only 21 percent of parents have told their kids how much they can expect to receive.


Create or update your estate plan. Pair your conversations with a comprehensive estate plan to prevent rifts that can happen when financial wishes are not clearly documented. Your estate encompasses anything you own, such as real estate, cars, life insurance, financial accounts including your retirement plans, and personal possessions. Creating a plan for what happens to these assets and accounts is important no matter the size of your estate.


If you already have an estate plan in place, revisit your will or trust, and update beneficiaries to various accounts and assets to mirror the blueprint you’ve shared with family members. Consider also providing instructions in a healthcare directive on what you want your family to do in the event that you cannot act on your own behalf. Clearly documenting your wishes can make difficult circumstances easier for everyone involved.


Tell loved ones where to find important documents. Families who are kept in the dark could face challenges if something unplanned happens and they are left to pick up the financial pieces. Prevent headaches that can slow down the settlement of your estate by providing instructions about where you’ve stored the safety deposit key, bank accounts, stock certificates and other pertinent items, including digital assets. Also, ensure that your family has the contact information for the professionals (e.g. lawyer, estate planner, tax or financial advisor) who are helping you prepare or manage your estate.


Work with a financial professional. If you experience conflict in your family discussions or want some help navigating difficult topics, consider working with a neutral third party, such as a financial advisor. A financial professional can help your family understand your collective financial picture and transition wealth from one generation to the next.


Ongoing dialogue about estate topics with family members could bring you closer together and pave the way for a smooth transfer of wealth, when the day comes.


The Family Wealth Checkup study was created by Ameriprise Financial, Inc. and conducted online by Artemis Strategy Group November 23 – December 15, 2016 among 2,700 U.S. adults between the ages of 25-70 with at least $25,000 in investable assets.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in SF specializing in helping LGBT individuals and families.Essential Conversations About Family and Family Wealth



••• April 2017 Issue  •••

Don’t Derail Your Retirement:
Watch for These 3 Risks

If you’re in or nearing retirement, you’re likely thinking about it as a time to relax, check items off your bucket list and enjoy what you’ve earned. But from a financial standpoint, it’s important not to get too comfortable. Once you leave the workforce, you will likely be reliant, at least in part, on your savings to cover living expenses. So it is important to stay diligent and be aware of potential risks to your financial security. Here are three key risks to keep an eye on in retirement:


1. Not revisiting your investment strategy

As you approach or enter retirement, you may have to re-assess your risk tolerance and make sure that your portfolio aligns with your goals, the lifestyle you want in retirement and your financial situation. Remember that you may have less time to recover from market swings, so consider protecting your portfolio as you prepare to live off your savings. With that said, being too conservative isn’t always the right solution. With many retirees living decades in retirement, you will likely have time for your assets to grow or at least, keep up with inflation. Plan to periodically review your portfolio in retirement to make sure you’re comfortable with your progress and risk tolerance.


2. Spending too much too quickly

When retirement rolls around, you may find you have more money accumulated than you’ve ever had before. This can lead to a false sense of financial security and prevent you from adjusting spending in retirement. But if you begin spending at an unsustainable level in the early years of retirement, you risk depleting your nest egg too quickly. If you dream of traveling or starting a business after you step away from the workforce, factor those activities into your retirement budget. That way you can feel good about enjoying what you’ve earned while also being cautious about not outliving your assets.


3. The rising cost of living

Many retirees believe the amount of money they can generate from their investments and other sources of income, such as Social Security, will be sufficient when retirement begins. But keep in mind that, historically, the cost of living has risen over time. For example, if you live for another 25 years after you retire and the cost of living rises by an average of three percent per year, your annual living expenses could potentially double in that time. Consider the possibility that retirement may be much more expensive as time goes on. Accounting for inflation impacting the most prominent items in your budget, such as health care or travel, is a good place to start.


The benefits of being prepared

Preparation and discipline can keep you on track and feeling secure about your finances in retirement. You can take steps to help address these risks prior to leaving the workforce with proper planning, diligent saving and a portfolio that is aligned with your goals and risk tolerance. If you’ve already entered retirement, these risks deserve consideration to help you continue to manage your assets on the way to achieving long-term financial security.

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

••• March 2017 Issue  •••


Leasing or Buying: Which Option is the Right One for You?

What’s the best route to acquiring a new and reliable set of wheels? Choosing the make and model of the vehicle you wish to drive, as well as other factors like amenities and mileage are important. However from a financial standpoint, one of your most important decisions is whether to lease or buy. Like many financial decisions, there are pros and cons to each option, so consider the following before signing on the dotted line.

Leasing a car

When you lease a car, you generally make an up-front payment and agree to make monthly payments for a new car over a defined period of time. Lease payments cover the vehicle’s estimated depreciation (how much value the car loses during the time you own it) and finance charges, but they do not help you build equity or ownership in the vehicle. Most lease agreements have an annual mileage limit, and you may incur a fee if you drive more than the amount allowed. Calculate your annual mileage from the last few years so you can negotiate a limit that fits your lifestyle. With an open-end or equity lease, you agree to purchase the vehicle at a predetermined price at the end of the lease. With a closed-end lease, you can walk away from the car once any outstanding fees are paid.


Leasing allows you to drive a new car every few years with lower monthly payments and occasionally, with no down payment. When the lease ends, you don’t have to worry about finding a new owner for the car. In many cases, if your car requires maintenance or repairs the costs will be covered by a manufacturer’s warranty.


Despite offering more affordable monthly payments, leasing rather than buying a car will cost more over time. This is because you won’t be able to sell the car and recoup some of your costs when the lease is up. Additionally, you’ll pay the car’s depreciation when it is at its highest (in the first few years of ownership) and the newer vehicle may be more expensive to insure. Keep in mind that you may be charged a penalty if you want out of the lease early.

Buying a car

A big factor to consider when you buy a car is how long you intend to drive it. Knowing your length of ownership will help you prioritize various features, such as the mileage or model year you’d like to purchase. Keep in mind that if you’d like to eventually sell or trade-in your vehicle that some cars hold their value better than others. Regular maintenance and careful driving can help retain your car’s resale value.


In the long run, buying a car is generally a better bargain than leasing, assuming you keep the vehicle for several years after the loan is paid off. This is because you will own the car and be free of monthly payments at the end of the loan. If you finance a used car rather than a new one, your potential savings are even greater. Buying gives you the flexibility to keep the car or sell it at the end of the loan. You also have the freedom to drive as many miles per year as you like (although high mileage does affect resale value).


Buying a car typically costs you more up-front, in the form of a down payment. While this amount is negotiable, its size will affect the amount you pay in interest and the length of your loan. As a car owner, you are responsible for repairs, which may add up over time.

Making the decision

Think about your financial circumstances and preferences when you’re deciding which option – leasing or buying – is right for you. Find a reputable car dealer and ask questions before closing the deal. Compare specific offers with an online lease or purchase calculator, which allows you to plug in actual lease or loan terms. Ask your financial or tax advisor to help you assess the impact of buying versus leasing a car on your financial situation.

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

••• February 2017 Issue  •••

8 Tips to Improve Your Financial Communication


What makes a couple successful in their financial relationship? Ameriprise Financial surveyed over 1,500 couples (those married or living together for at least six months) to learn about their money conversations and how they make decisions. The results revealed eight ways you can improve the financial health of your relationship:


1. Understand your partner’s money mindset. It’s normal to have differing views and habits about money, but that doesn’t mean you can’t agree on your financial goals. Couples who report being on the same page financially work to understand their partner’s approach to money and keep the lines of communication open.


2. Make finances a priority and don’t give up. Couples who are willing to have the hard conversations and who work together to find financial harmony will reap the benefits over time. As you might expect, the study found that couples who had been together longer tend to have better communication and are on the same page when it comes to financial matters.


3. Agree on financial goals. It’s tough to pool your money with someone who overspends or who isn’t willing to save for the vacation you’ve always dreamed about. Sharing financial goals does bring you closer together—or at least it’s one less thing to argue about. To make it easier to save, challenge yourselves to add a timeframe to each goal so you know what you’re working toward first.


4. Assign and accept financial roles and responsibilities. Most couples split up tasks such as paying bills or monitoring investments. Clear responsibilities allow you to hold one another accountable without worrying if the cable bill was paid. However, be sure to work together on tasks such as retirement planning that requires close collaboration.


5. Invest in your future together. Make it a priority to set aside a portion of your earnings for short- and long-term goals, including retirement. Know how much you collectively have in retirement savings—a surprising 23 percent of couples are unsure of this number. If you have kids, talk about how much you’d like to contribute to their college expenses so you can save accordingly.


6. Set a spending limit. Spending habits were the leading cause of contention for couples. Consider setting a spending limit to ensure you’re on the same page as your partner regarding large expenditures. On average, couples said a purchase over $400 should trigger a discussion.


7. Understand that disagreeing is okay. According to the Ameriprise study, even couples who say they’re in financial harmony disagree on financial matters. What’s important isn’t that the partners don’t always agree, but that 82 percent resolve their issues and move on.


8. Enlist a professional to solidify your financial plan. When you need an objective opinion – or a deciding vote – meet with a financial advisor. Together the three of you can create a financial plan that meets your specific needs as a couple.


Ultimately, it feels good when you are in sync with your partner regarding financial decisions and can work together toward managing your finances. Couples who actively work on improving their financial relationship will likely be less frustrated over money matters and may even feel better about their relationship overall.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals


The Ameriprise study on couples and money was created by Ameriprise Financial, Inc. and conducted online June 14-July 14, 2016 by Artemis Strategy Group among 1,514 U.S. opposite and same sex couples (married or living together for at least six months with shared financial responsibility) between the ages of 25-70 with at least $25,000 in investable assets.



• • • January 2017 Issue • • •

When the dollar weakens

The dollar has been strong recently (more on that below), but it hasn’t always been that way. At the start of 2014, it cost approximately $1.35 to convert U.S. currency to one euro (Europe’s common currency), or $135 in American dollars to obtain 100 euros. In this period where the dollar was relatively weak compared to the euro, it was more expensive for Americans to travel in Europe.


This environment was, however, beneficial to U.S. companies that sold goods into European markets. Because the euro was stronger than the dollar, American-made goods were less expensive for Europeans to purchase. This helped generate business and profits for multi-national firms based in the U.S. Investors who owned stocks in those companies may have benefited from that trend.


Other investment advantages of a weak dollar


Along with benefiting U.S. companies selling goods abroad, the declining value of the dollar also may have helped American investors who purchased overseas investments (such as a mutual fund that invests in stocks based in other countries). Overseas investments are purchased in the local currency. Subsequently, if the foreign currency gains value versus the dollar, the payoff to American investors increases when the investment is sold. In this situation, U.S. investors may stand to benefit even if the investment itself generates little or no return.


For example, if an investor purchased the stock of a German company for 100 euros and the exchange rate was $1.25 to the euro, it would cost him or her $125 to buy a share of the stock. If the price of the stock remained unchanged over a period of time, but the dollar weakened to $1.35 to the euro, the investor could sell a share of the stock for the same 100 euros and now receive $135 for it after converting the proceeds back to U.S. currency. From a currency perspective alone, the transaction resulted in an eight percent gain for the investor.


The story today – a stronger dollar


Since 2014, the dollar has gained significant strength against most foreign currencies. For example, as of December 1, 2016 the exchange rate for one euro was $1.05. This has been great for Americans vacationing in Europe because the cost of exchanging dollars into euros is far less expensive than just a few years ago. But the dollar’s growing strength has altered the environment for U.S. companies doing business abroad and Americans investing in overseas markets.


U.S. companies selling goods overseas are receiving a lower return when they convert back to the dollar compared to a few years ago. That could have a negative impact on their profits, which potentially detracts from stock performance. (Keep in mind that currency is one of many variables affecting company profits.) Unlike the previous example of the weakening dollar, an investor who bought a global mutual fund now and chooses to sell it has to overcome the impact of potential currency losses due to the dollar’s stronger position.


An unpredictable market


The direction of currency markets is extremely difficult to predict. A variety of factors, such as the strength of countries’ economies, inflation rates, interest rates and political developments, can impact currency valuations on a day-to-day basis.


Investors who purchase stock in companies with significant overseas business should understand that currency movements may affect their investment performance. The same is true if he or she invests in vehicles such as global equity and bond mutual funds. Investors should exercise caution before basing investment decisions on projections of trends in this highly unpredictable market.

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve




More Money Matters 2016-2014



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