Although we cannot be sure if or when the changes will come, taking the wait-and-see approach may be more costly than ever, given how quickly things can shift.

Financial Jargon

5 Potential Tax Changes Coming

As Ryan bids farewell to Oakmont and Financial Jargon, David and Ryan share some lessons they've learned about helping people with their finances.  We share four financial tips that run common to those that have more confidence with their finances. Lean in, and learn.www.oakmontadvisory.com 

Lessons Learned

A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. - Oxford Dictionary Essentially it is a largely unregulated alternative form of money. What is “blockchain?” --- a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. - OxfordWhy does talking about this matter? What does it have to do with financial planning? Unless you literally live under a rock, you have heard of cryptocurrency. You have probably heard a lot about it from people with very strong opinions on one end of the spectrum or the other, which can make understanding what is really confusing.“Cryptocurrency is best thought of as digital currency (it only exists on computers). It is transferred between peers (there is no middleman like a bank). Transactions are recorded on a digital public ledger (called a “blockchain”). Transaction data and the ledger are encrypted using cryptography (which is why it is called “crypto” “currency”). It is decentralized, meaning it is controlled by users and computer algorithms and not a central government. It is distributed, meaning the blockchain is hosted on many computers across the globe. Meanwhile, cryptocurrencies are traded on online cryptocurrency exchanges, like stock exchanges. Bitcoin (commonly traded under the symbol BTC) is one of many cryptocurrencies; other cryptocurrencies have names like “Ether (ETH),” “Ripple (XRP),” and “Litecoin (LTC).” Alternatives to Bitcoin are called “altcoins.”” - Cryptocurrencyfacts.comNeed help with a financial plan?oakmontadvisory.com/blueprint

Cryptocurrency

A Monte Carlo simulation is a model used to predict the probability of different outcomes when the intervention of random variables is present. Monte Carlo simulations help to explain the impact of risk and uncertainty in prediction and forecasting models. - InvestopediaWhy does talking about this matter? What does it have to do with financial planning?If you have financial goals (short or long term) you likely want to know the chance of actually being able to reach those goals. A Monte Carlo simulation or analysis can give you one of the best insights into your goals, like not running out of money in retirement.Need help?OakmontAdvisory.com // FinancialJargon.com

Monte Carlo Simulations

The rate of return, ROR, or return, in the world of investments, is the profit or loss you make on an investment. - marketbusinessnews.comWhy does talking about this matter? What does it have to do with financial planning?  If you have financial goals (short or long term) you likely have investments tied to those goals. Having a good idea of what you might expect from these investments over time is helpful in making sure you are on track, but be aware because, like Transformers, there’s more than meets the eye. Need a plan - visit oakmontadvisory.com  or smplwealth.com 

Rate of Return

Why does talking about this matter? What does it have to do with financial planning?Actually understanding what a financial plan is and is not will actually allow you to begin the process of financial planning that will make an actual difference in your life and for your future.OakmontAdvisory.com // FinancialJargon.com

Financial Plans

"The secret to getting ahead is getting started!” - Mark TwainBusiness Entity means any entity recognized by law through which business is conducted, including a sole proprietorship, partnership, or corporation. “Business entity” includes a for-profit or nonprofit entity. His term does not include a governmental entity or state agency.”- lawinsider.comWhy does talking about this matter? What does it have to do with financial planning?. https://calendly.com/dannerlaw

Entity Selection

People often pay more in taxes than expected because a confusing system treats various income types differently, and contains hidden taxes and penalties.  Take a listen and learn about the Four Stages of Retirement, Retirement Surprises you'll want to be aware and the 4 Keys to minimizing your tax exposure in retirement.  SIGN UP FOR A FREE WEBINARHow Tax Planning Changes Through Four Stages of Retirement Click Here to Sign up (Replay sent after)Need help creating a tax-smart plan?Visit oakmontadvisory.com/blueprint and sign-up for a 15-Minute call with an advisor 

4 Stages of Retirement

A stimulus check is a check sent to a taxpayer by the U.S. government. Stimulus checks are intended to stimulate the economy by providing consumers with some spending money. When taxpayers spend this money, it will boost consumption and drive revenues at retailers and manufacturers and, thus, spur the economy..” - Investopedia The $1.9 trillion coronavirus economic relief program signed by President Biden on March 11 provides:$1,400 stimulus checks for eligible individuals$300 weekly unemployment benefit to Sept 6$3,000 per child tax credit ($3,600 if under 6)15% increase in food stamps and increased fed health care subsidies$70B to increase vaccine & testing capabilities$30B for rental assist; eviction moratorium & forbearance through Sept$57B for small businesses & communities· $350B to states, tribes, and municipalitiesThe law provides $1,400 per adult AND dependent, as long as the household income falls below the income threshold for eligibility.single people whose adjusted gross income was below $75,000married couples with income below $150,000 will receive their full payments, as well as their dependents. Payments decline for earnings above that, cutting off entirely for single people earning $80,000 and $160,000 for married couples.Need help creating a plan?Visit oakmontadvisory.com/blueprint and sign-up for a 15-Minute call with an advisor

Stimulus Checks

According to the Oxford dictionary, benchmarking is defined as “a standard or point of reference against which things may be compared or assessed.”Larry Swedroe: “An appropriate standard against which mutual funds and other investment vehicles can be judged. Domestic large cap growth funds should be judged against a domestic large cap growth index, such as the S&P 500 Growth Index, while small-cap managers should be judged against a small-cap index, such as the Russell 2000 index.” (The Incredible Shrinking Alpha)Benchmarks are often tied to funds or portfolio strategies. Unlike Larry’s quote above, fund and portfolio managers will still attempt to use the S&P 500 as a benchmark for a 60/40 portfolio, which will more often than not lead to frustrating disappointment. Most often, people will use the S&P 500, the NASDAQ or the Dow, regardless of their investment allocation or strategy… why? Because unfortunately it’s the only thing reported on the nightly news. This can lead to behavioral issues:Overconfidence - we think we are smarter than we areNegativity effect - bad things impacting our risk-perceptionPicking the wrong benchmark which could result in massive under or over performance, and all around confusion and frustrationIf you were giving a reward for the best new hip-hop album, would it make sense for you to judge it based on heavy metal standards?  

Benchmarking

“Passive investing is an investment strategy to maximize returns by minimizing buying and selling.” - Investopedia   “Active investing refers to an investment strategy that involves ongoing buying and selling activity by the investor.” - Investopedia  Why does talking about this matter? What does it have to do with financial planning?  This is what most people do, and what makes most people successful over the long haul… this is how most people invest in their 401kReasons for Passive InvestingIt’s easyTo be fee efficientTo build wealth gradually.To not seek to profit from short-term price fluctuations or market timing.The underlying assumption of passive investment strategy is that the market posts positive returns over time.It’s hard to outthink the marketDrawbacks of Passive InvestingNot that sexy.Too limited: Passive funds are limited to a specific index or predetermined set of investments with little to no variance; thus, investors are locked into those holdings, no matter what happens in the market.Smaller potential returns: By definition, passive funds will pretty much never beat the market, even during times of turmoil, as their core holdings are locked in to track the market. Sometimes, a passive fund may beat the market by a little, but it will never post the big returns active managers crave unless the market itself booms. Active managers, on the other hand, can bring bigger rewards (see below), although those rewards come with greater risk as well.

Passive Investing

“Nobody is an industry of one." - Peerview Data“...The S&P 500, or simply the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.” - Wikipedia Why does talking about this matter? What does it have to do with financial planning?-Knowing what the S&P can be helpful if understood correctly, and harmful if understood incorrectlyThe S&P 500 was introduced by Standard & Poor's in 1957 as a stock market index to track the value of 500 large corporations listed on the New York Stock Exchange (NYSE) and the NASDAQ Composite.During its first decade, the value of the index rose to nearly 700, reflecting the economic boom that followed World War II.From 1969 to early 1981, the index gradually declined–eventually falling to under 300–while the U.S. economy grappled with stagnant growth and high inflation.During the financial crisis that has come to be known as the Great Recession, the S&P 500 fell 57.7% beginning in October 2007 and bottoming out in March 2009.By March 2013, the S&P had recovered all its losses from the financial crisis, and over the last decade, the S&P has climbed more than 400% to reach all-time record highs.Need help creating a plan?Visit oakmontadvisory.com/blueprint and sign-up for a 15-Minute call with an advisor 

Understanding the S&P 500

“When there is silence, Give your voice. When there is darkness, Shine your light. When there is desperation, Offer hope.” - Author, Tim Fargo $600 direct payment checks for every adult and child earning up to $75,000. Individuals earning between $75,000 and $87,000 would get smaller checks, and the benefit cuts out entirely for individuals earning over $87,000.Unemployment benefits: Lawmakers agreed to extend enhanced unemployment benefits for jobless workers, who will receive up to $300 per week through mid-March. Self-employed people and gig workers will also receive extended assistance. Rental assistance: The measure includes $25 billion to help families pay their rent, and it extends the eviction moratorium now in effect until Jan. 31. SNAP assistance: The measure includes an additional $13 billion for the Supplemental Nutrition Assistance Program.PPP loans: The agreement includes some $284 billion for Paycheck Protection Program loans. Democrats say they expanded eligibility for the loans to include nonprofits and local newspapers, along with TV and radio stations. Also, $15 billion would be reserved for live venues, independent movie theaters and cultural institutions, which have been struggling due to pandemic-forced closures. Child care centers: The measure includes $10 billion for child care centers to help providers safely reopen. Need help creating a plan?Visit oakmontadvisory.com/blueprint and sign-up for a 15-Minute call with an advisor 

Stimulus Part Deux

“Proper planning and preparation prevents poor performance.”  - Stephen KeagueWhy does talking about this matter? What does it have to do with financial planning?They’re powerful. You can specify who should inherit your retirement and life insurance assets without making adjustments to your will or trusts. In fact, these designations take precedence over wills and trusts in most cases.They’re virtually probate-proof. Because these designations generally supersede will and trust instructions, they circumvent the probate process and ensure that assets can be transferred to heirs without delay. However, if a designated beneficiary predeceases the owner and there is no contingent beneficiary, probate will likely be required.They’re simple. Many institutions offer the convenience of updating these beneficiary designations online.Need help creating a plan?Visit oakmontadvisory.com/blueprint and sign-up for a 15-Minute call with an advisor

Beneficiary Designations

David and Ryan discuss the importance of knowing what Net Worth is and why it's an important "jargony" phrase you need to understand. What Is Net Worth?Net worth is the value of the assets a person or corporation owns, minus the liabilities they owe. It is an important metric to gauge a company's health, providing a useful snapshot of its current financial position. - InvestopediaNet worth is a quantitative concept that measures the value of an entity and can apply to individuals, corporations, sectors, and even countries.Net worth provides a snapshot of an entity's current financial position.In business, net worth is also known as book value or shareholders' equity.People with substantial net worth are called high-net-worth individuals (HNWI).Need help creating a plan?Visit oakmontadvisory.com/blueprint and sign-up for a 15-Minute call with an advisor. 

Understanding Net Worth

Welcome to Financial Jargon, where we aim to break down the wall between you and your financial advisor. Too many advisors speak over their clients' heads by using intelligent-sounding jargon that doesn't truly help. It's time for real conversions that lead to real change. We're here to simplify the financial world and help you become a smarter investor.

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Financial Jargon

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