Life Insurance: Term Life Insurance Specifically As followers of many of Dave Ramsey's  principles, we should be familiar with his thoughts on Life Insurance. If you’re not familiar, these are his blanket thoughts taken directly from ramseysolutions.com : “If anyone depends on your income for their daily needs, you should have life insurance in place with a death benefit worth 10–12 times your annual income. Even though there are many different types of life insurance, the only kind we recommend is term life insurance”.   While this is a great place to start, there are certainly more areas to consider when deciding how much coverage is right for you.   Please also consider reading this article: DO YOU HAVE TERM LIFE INSURANCE?   Considering the DIME Test The DIME test is an acronym for Debt, Income, Mortgage, and Education. When I mentioned other items to consider when finding an appropriate amount of Term Insurance, this is what I meant.   D - Debt I - Income (times number of years left with a dependent) M - Mortgage E - Education Expense   Case example: A 30-year-old man and a 28-year-old woman are married and have a 6-year-old He makes $70,000 per year; she doesn’t work They have $50,000 of consumer debt left between the two cars $160,000 left on the mortgage For education expenses, we blanket estimate $50,000 per child Therefore, using the DIME test, we see that $50,000 (cars) + $840,000 (70k*12 years) + $160,000 (mortgage) + $50,000 (school cost) = $1,100,000 in needed coverage for the husband and roughly $250,000 to $300,000 for the wife to pay off the house and the cars and save for college since she doesn’t work.   Life insurance is a difficult subject and not a fun topic many want to discuss. However, knowing they have all their bases covered, like debt, mortgage, and college, makes the subject more tolerable when speaking with clients. This helps relieve the stress and discomfort of paying bills or figuring out this piece of the finance puzzle when thinking about a potential loss of life within your family.    Considering Reinvestment of Proceeds In the case above, you could see how someone making a relatively good income ($70,000 per year) can quickly need massive amounts of coverage.   Another example: If the breadwinner was making $300,000 per year and their youngest was three years old, suddenly, that calculation would become a needed coverage of over $4,500,000 ($300k*15 years).   While that is still affordable coverage for someone making that amount of money, $4,500,000 is probably not the perfect amount of coverage. First, we need to ensure that the coverage amount always pays for consumer debt, education savings, and mortgage. After that, we must look at reinvestment opportunities for the surplus death benefit.   When speaking about income replacement, once those portions are paid for (the D, M, and E portion of the acronym), the living beneficiary will have very low expenses, meaning they won’t necessarily need to live off $300,000 per year. Being able to invest an amount like $1,500,000 or $2,000,000 in tax-free death benefits will be more than enough for a surviving spouse with no debt, no mortgage, and education fully funded to live on.   The surviving spouse should reinvest the lump sum into the market and allow the money to work for them.   Losing a spouse or other family member is a crippling event, and the stress of finances should never cause grieving to be interrupted.   How to Get Started If you want to learn more about Term Life insurance , you can ask one of our financial advisors   questions. We also have a licensed insurance agent  on the team that they can refer you to for Term Life Insurance Policies. He can help answer any questions you have, create a quote, or write a policy for you if needed.

After a historic campaign, Donald Trump has won the 2024 presidential election and Republicans have won control of the Senate. For half the country, this is a cause for celebration, while for the other half, this is a disappointing result that will require time to process. This reflects the divisions in our country on both social and economic matters that we hope will heal in time. The stock market has performed well across both parties It’s clear that political outcomes can influence our daily lives and the direction of the country. However, regardless of which side of the aisle you’re on, history shows that the impact of politics on portfolios is often overstated. It’s important in the coming weeks to not overreact in either direction, but to instead keep a level head. Putting politics aside, what might this result mean for the economy and financial markets over the next four years? From a broad perspective, history shows that the stock market and economy have performed well under both parties over the past century. In the coming weeks, there will likely be both bullish and bearish predictions. Some may expect a significant rally similar to the 2016 election, while others will expect issues like tariffs to slow the global economy. When it comes down to it, long-term investors should continue to walk the line by staying invested, diversified, and focused on fundamentals. On the one hand, stock market valuations are already well above average, making it more important to be thoughtful when building portfolios, ideally with the guidance of a trusted advisor. On the other hand, investors should also be wary of overly pessimistic views on the market. It's likely that predictions for market crashes have been made about every president in modern times. In recent years, it was certainly said about Obama in 2008, Trump in 2016, and Biden in 2020. Thus, it's important to separate personal and political feelings from financial plans and investments.   This is not to say that good policies don’t matter, but instead that business cycles are driven by factors beyond politics. What’s more, policy changes tend to be incremental, even when a President’s party controls Congress. History also shows that it is very difficult to predict how any particular policy might affect the economy and markets since stock prices adjust to new policies and companies adapt quickly as well. The Tax Cuts and Jobs Act will likely be extended Regarding taxes, a Republican Party victory makes it likely that much of the Tax Cuts and Jobs Act will be extended beyond its 2025 expiration. The TCJA overhauled the tax code for both individuals and businesses, including cutting corporate taxes to 21%, reducing many individual rates across tax brackets, lowering income taxes for many Americans, doubling the estate tax exemption, and more. In addition, the uncertainty over these provisions during the election season made tax planning more complex. The expiration of the TCJA would create a potential “tax cliff” for many individuals and businesses. As a result, Roth IRA conversions, for instance, reportedly increased leading up to the election as individuals took advantage of current low tax rates. It’s important to maintain perspective around tax policy since these issues can be politically charged. While taxes have a direct impact on households and companies, they do not always have a straightforward effect on the overall economy and stock market. This is because taxes are only one of the factors that influence growth and returns, and there are many deductions, credits, and strategies that can reduce the statutory tax rate. The market has performed well across many tax regimes across history, including periods when the highest marginal rates were between 70% and 94% after World War II. Taxes today are low by historical standards. As the national debt grows, it’s prudent for investors to expect tax rates to eventually rise. Planning for this possibility is only growing in importance. Tariffs and trade wars are back in focus Looking at proposed policies, many investors worry that a second trade war could result from tariffs on major trading partners including China, the European Union, Mexico, and Canada. During his first term, President Trump increased duties on many goods including steel, aluminum, solar cells, washing machines, and more. On the campaign trail earlier this year, he proposed raising tariffs further, including up to 60% on China. Unlike tax policy, which requires congressional approval, the president can impose tariffs through executive order. While many worry that this could harm the economy, analyzing tariffs can be complex. The Trump administration’s use of tariffs in 2018 and 2019 was often as a negotiating tactic, leading to a “Phase One” trade deal with China in early 2020. While the merits of the deal can be debated, the worst-case predictions for the economy and market never occurred. In theory, tariffs can be inflationary since they increase the final costs of goods for consumers. Additionally, they run counter to long-held economic views that open trade creates mutual benefits for trading partners. However, they can also help to protect domestic industries from unfair trade practices, as well as secure intellectual property from theft and forced transfers. The reality is that many tariffs imposed by the Trump administration were continued under President Biden. The current tariff proposals reflect the trends of de-globalization and protectionism that have emerged over the past decade. Once again, while tariffs and trade wars may impact certain industries and businesses, it’s important to not overreact with our portfolios. Investors should focus on years and decades, not days and weeks With the election now over, investors will shift their focus back to other economic considerations such as the Federal Reserve’s next rate decision, corporate earnings, and consumer spending. The fact that a significant source of uncertainty has been lifted could be enough to improve investor sentiment, as it has in past election seasons. Ultimately, the business cycle is what has driven long run returns over the past century, and not two or four-year election cycles. These long-term business cycles are the result of broader factors such as industrialization, globalization, the information technology revolution, trends in artificial intelligence, and more. For investors with financial plans spanning years and decades, focusing on these longer-run trends is far more important than reacting to daily headlines. The bottom line? Regardless of political views, investors should stay invested and diversified as the election season comes to a close. Clarity around taxes, tariffs, and other policies will help, but maintaining perspective around long-term trends is still the best way to achieve financial goals. If you have questions about investing, reach out to your financial advisor. If you don't have an advisor, reach out to a member of the Whitaker-Myers Wealth Managers financial advising team , as they will be happy to discuss your questions.

The Efficient Market Hypothesis  (EMH) The efficient market hypothesis (EMH) is a theory that suggests that share prices accurately reflect all available information. This implies that it is impossible to consistently achieve returns that outperform the market by using strategies based on publicly available information, as stocks are always trading at their fair value. The underlying assumption is that investors are rational and act quickly to incorporate new information into the stock price, ensuring that the market remains efficient. This theory has significant implications for investment strategies, as it suggests that passive investment approaches, such as investing in index funds, are more likely to yield optimal results compared to active trading strategies.   Weak, Semi-Strong, Strong forms The EMH has three different forms: weak, semi-strong, and strong.   Weak Form The weak form of EMH posits that current stock prices reflect all historical price data, rendering technical analysis, which relies on identifying patterns in past price movements (more on that here ), ineffective in predicting future price movements. However, proponents of the weak form believe that fundamental analysis, which involves evaluating a company's financial performance and intrinsic value, can still be utilized to identify potentially undervalued stocks.   Semi-Strong Form The semi-strong form contends that stock prices reflect all publicly available information, including historical prices, financial statements, and news releases. Consequently, both technical and fundamental analysis are considered futile in consistently outperforming the market. According to this form, the only way to achieve superior returns is through non-public or insider information.   Strong Form The strong form of EMH asserts that stock prices incorporate all public and private information, making it impossible to gain an advantage over the market, even with insider information. This form argues that any apparent discrepancies in stock prices are quickly rectified by market participants who have access to all available information. The strong form represents the most extreme version of EMH, suggesting that all information is entirely and instantaneously reflected in stock prices. While the EMH is a widely accepted theory in finance, it has been subject to criticism and debate.   Challenges/Arguments against the EMH One of the main arguments against EMH is the existence of market anomalies, which are patterns in stock prices that contradict the hypothesis. The "value effect," for example, suggests that stocks with low price-to-earnings ratios (value stocks) tend to outperform stocks with high price-to-earnings ratios (growth stocks). This contradicts the EMH because it suggests that investors can use publicly available information (price-to-earnings ratios) to identify undervalued stocks and generate excess returns. Other anomalies include the "January effect," where stock prices tend to rise in January, and the "small-firm effect," where smaller companies tend to outperform larger companies.   Another challenge to EMH is the success of investors like Warren Buffett, who have consistently outperformed the market over extended periods. Proponents of EMH argue that these successes are merely due to chance or luck, as in a market with many participants, some are bound to outperform the average. However, critics contend that certain investors' consistent and long-term success suggests that skill and knowledge can lead to superior returns. The existence of portfolio managers and investment houses with superior track records further supports this argument.   Conclusion Despite the criticisms, EMH remains an influential theory in finance, and empirical research has found that its conclusions hold true in many cases. Studies have shown that passive investing strategies, such as investing in low-cost index funds, tend to generate better returns than active trading strategies over the long term. This is because passive investing minimizes transaction costs and avoids the risks of trying to time the market  or pick individual stocks . However, it is important to acknowledge that markets are not perfectly efficient, and skilled investors may have opportunities to generate alpha or excess returns. Additionally, the level of market efficiency can vary across different markets and asset classes .    As always, investing can be confusing or overwhelming. That is why the team of Whitaker-Myers Wealth Managers  prides itself on having the heart of a teacher  to help answer your questions and help guide you to a successful outcome.

As the November 5 presidential election approaches, polls indicate a tight race between former President Donald Trump and Vice President Kamala Harris. With both candidates intensifying their campaigns in key swing states, investors may be concerned about the potential impact of either outcome on their investment portfolios. The current political climate is characterized by deep divisions, leading to heightened emotions surrounding this election. In such an environment, investors must prevent political sentiments from interfering with their long-term financial strategies. As my friend Dave Ramsey consistently says, what happens in your house is so much more important than what happens in the White House. He goes on to remind listeners that he has made money under both parties and while specific policies can make it harder to be a profitable publicly traded company or small business, there is probably nothing any President can do to take down this beautiful country and economic power. That will be King Jesus's decision as to when that happens. Speaking of our friend Dave Ramsey , recently, he came out on an episode letting the world know who he was voting for. That clip can be seen here . Additionally, he did an excellent interview with President Trump. That interview, where they mainly focused on his ideas around improving the economic climate for small businesses, can be watched or listened to here . Estate planning faces uncertainty due to potential tax policy changes While the election results may significantly affect our daily lives as citizens, voters, and taxpayers, it's important to separate political preferences from investment decisions. Historical evidence suggests that economic and market conditions tend to influence election outcomes rather than vice versa. Therefore, it's advisable to exercise your right to vote at the polling station but refrain from making investment decisions based on political leanings. How can investors maintain a balanced perspective in the coming weeks? One of the most intricate areas affected by the election outcome is tax policy. The impending expiration of the Tax Cuts and Jobs Act (TCJA) at the end of 2025 creates uncertainty regarding the future of individual and corporate taxes, potentially leading to a "tax cliff." The candidates have divergent approaches to corporate taxes, individual rates, capital gains, tax credits, and other related issues. It's essential to maintain perspective on tax policy, as these topics can be politically charged. While taxes directly impact households and businesses, their effect on the overall economy and stock market is not always straightforward. This is because taxes are just one of many factors influencing growth and returns, and various deductions, credits, and strategies can mitigate the impact of statutory tax rates. From a historical standpoint, current tax rates are relatively low. This will remain true whether the top marginal tax rate is 37% or 39.6%. Given the growing federal debt, it's prudent for investors to anticipate potential tax rate increases in the future, regardless of the election outcome. Planning for this possibility, ideally with guidance from a trusted advisor, is becoming increasingly important. Estate taxes represent an area where rates are particularly low by historical standards. This tax, levied on the transfer of assets to heirs after death, saw its exemption amount doubled by the TCJA. After inflation adjustments, the exemption has reached $13.6 million for 2024. Without further action, this would revert to the pre-TCJA level, adjusted for inflation, which economists estimate would be approximately $6.8 million per individual in 2026. Despite estate taxes contributing only a small fraction of government revenue and affecting a limited percentage of the population, it has become a contentious political issue. The future of estate taxes will largely depend on the election results, including Congressional races. For many affluent households, this could significantly impact their tax and estate planning strategies. Election results may influence global trade and tariff policies The candidates also present differing views on potential trade policies, particularly regarding tariffs. While the trend towards deglobalization and reshoring of manufacturing is likely to continue, the approach to using tariffs for enhancing U.S. competitiveness and generating revenue may vary depending on the election outcome. It's worth noting that many of the tariffs implemented during President Trump's administration were maintained by the Biden administration. Historically, tariffs played a significant role in trade and were a major source of U.S. government revenue. However, their importance has diminished in recent decades. The establishment of organizations and agreements such as the WTO, NAFTA, the USMCA, and others has helped reduce trade barriers among major partners. Nevertheless, tariffs have been periodically used to protect domestic industries and intellectual property, including sectors like steel, electronics, semiconductors, and agricultural goods. For investors concerned about a potential trade war, it's important to remember that similar fears in 2018 and 2019 did not lead to the worst-case scenarios some had predicted. The economy remained robust during this period, with unemployment near historic lows and inflation virtually non-existent, despite being late in the business cycle. Ongoing negotiations between key trading partners eventually helped alleviate some concerns. As illustrated in the accompanying chart, the U.S. has maintained trade deficits with numerous countries across various trade regimes. Economic growth has occurred under administrations of both major parties Historical evidence demonstrates that economic growth and bull markets have occurred under administrations of both major political parties. While this may seem counterintuitive, it underscores the fact that politics often has a limited impact on the economy and markets. Specifically, factors such as the business cycle and broader trends like the advancement of artificial intelligence and technology, declining inflation, and a strong job market tend to have a more significant influence. I recently obtained my Advanced Certificate in Blockchain and Digital Assets from DACFP and I can't even begin to describe how bullish I am right now on the potential for blockchain technologies in the future. As a matter of fact, the future is kind of here in that we are already using blockchain in many situations that I would argue have nothing to do President Trump or Vice-President Harris. Here are two great examples. 1. Supply Chain Transparency and Traceability Blockchain is revolutionizing supply chains by providing transparency and traceability from production to the end consumer. For example, major food companies like Wal-Mart are using blockchain to track produce, meat, and dairy from farms to stores. With blockchain, each step of the supply chain is recorded immutably, ensuring that consumers can trace the origin of products and verify authenticity, sustainability practices, and food safety. This reduces fraud, enhances food safety, and allows consumers to make informed choices. 2. Financial Inclusion Through Decentralized Finance (DeFi) Decentralized finance, or DeFi, uses blockchain to provide financial services without traditional banks. Through DeFi platforms, people can borrow, lend, save, and earn interest on digital assets directly on the blockchain. This is especially impactful in regions where access to banking is limited, allowing millions of unbanked individuals to participate in the financial system, secure loans, and grow savings. DeFi helps foster financial independence, creating new opportunities for economic growth globally. As you can see, Despite the perceived importance of this election, it's worth noting that policy changes are often implemented gradually due to the system of checks and balances in our political structure, and technology like that described above does not care about who sits in the White House. Campaign promises may differ substantially from what candidates can actually achieve once in office. Regarding taxes, neither candidate is proposing a return to pre-Reagan era levels when top marginal rates reached as high as 94%. In terms of trade, while tariffs may increase, they are unlikely to reach the levels experienced during the Great Depression nearly a century ago. Keeping these facts in perspective is crucial when planning for the next four years. The bottom line? While the election is significant for various reasons, its long-term impact on the stock market and economy is often overestimated. Economic growth has occurred under both Democratic and Republican administrations, and it's essential for investors to maintain perspective during this election season.

John-Mark Young , President of Whitaker-Myers Wealth Managers, has recently achieved two advanced certifications to further elevate his expertise in retirement planning and digital assets. Young earned his Retirement Management Advisor (RMA®) certification from the Wealth and Investment Institute , as well as an Advanced Certificate in Blockchain and Digital Assets from the Digital Assets Council of Financial Professionals (DACFP) . This specialized training equips him with deeper insights into both traditional retirement planning and the emerging role of digital assets, enhancing his ability to serve clients as they navigate an increasingly complex financial landscape. The RMA® designation is highly regarded among financial professionals, as it focuses on comprehensive retirement planning, including managing sequence-of-returns risk and optimizing retirement tax strategies. Sequence-of-returns risk—the risk of experiencing negative returns early in retirement—can significantly impact a retiree’s savings. John-Mark's RMA® certification provides him with advanced strategies to help mitigate this risk, allowing his clients to retire with greater financial security and confidence. John-Mark's expertise in retirement tax planning , another critical area of focus in the RMA® program, is invaluable for clients who want to maximize their retirement income by minimizing tax liabilities. This knowledge enables him to offer tailored strategies that align with his client’s goals, making retirement planning more effective and personalized. In addition to his RMA® certification, the Advanced Certificate in Blockchain and Digital Assets from DACFP empowers John-Mark to navigate the complexities of digital assets, such as Bitcoin and Ethereum. With digital assets poised to play an increasingly significant role in the future economy, John-Mark can now better assess how these emerging assets might fit into a client’s retirement portfolio. For clients interested in digital assets, his expertise provides a valuable perspective on incorporating crypto responsibly into a diversified investment strategy. These dual certifications represent a well-rounded approach to modern financial planning, blending traditional retirement planning with knowledge of the fast-evolving world of digital assets. John-Mark's commitment to continued education and forward-thinking strategy reflects Whitaker-Myers Wealth Managers mission to provide clients with up-to-date, comprehensive financial guidance. As John-Mark incorporates these advanced skills into his practice, his clients stand to benefit from his deepened expertise in managing both established and emerging assets for a secure and prosperous retirement.

The Whitaker-Myers Group, a cornerstone of the Wooster community and a trusted resource in insurance, wealth management, and tax advising, has been awarded the prestigious Business of the Year Award by the Wooster Chamber of Commerce . This award recognizes outstanding business leadership, dedication to the community, and commitment to providing high-quality services. This achievement marks a significant milestone for Whitaker-Myers, which comprises Whitaker-Myers Insurance Agency , Whitaker-Myers Wealth Managers , and Whitaker-Myers Tax Advisors . Together, these branches offer comprehensive support to individuals, families, and businesses in Wooster and throughout the nation, emphasizing a personalized approach to financial wellness. Seth Buckwalter , Vice President of Whitaker-Myers Insurance Agency, expressed immense pride and gratitude for this recognition. “This award is a testament to the hard work and dedication of our entire team, whose commitment to excellence drives us daily. It also honors the legacy of past owners and employees like Scott Allen and Scott Young whose vision and leadership laid the foundation for our success,” he said. John-Mark Young , President of Whitaker-Myers Wealth Managers, a nationally registered RIA , also took a moment to recognize the valuable partnership with Dave Ramsey and Ramsey Solutions , noting that, as a National SmartVestor Pro, Whitaker-Myers Wealth Managers has been able to reach more clients and serve them with the same level of integrity and transparency that Ramsey Solutions advocates. “We’re incredibly grateful to Dave Ramsey and the Ramsey Solutions team for believing in us and allowing us to represent them locally in Wooster and throughout much of this great country. Their support has been invaluable in helping us expand our impact and deepen our relationship with clients across our communities.” As Whitaker-Myers Group celebrates this accomplishment, they remain focused on their mission to provide exceptional service while supporting the Wooster community and many of the communities with which they operate. With this award, Whitaker-Myers Group solidifies its place as a vital, community-oriented institution poised to serve future generations.

I’ve inherited an IRA… now what do I do? Inherited IRAs can seem overwhelming when the time comes to inherit one. It seems self-explanatory when you are first listed as a beneficiary of an IRA. Upon the unfortunate passing of the owner, you inherit part or all of the IRA (depending on how many beneficiaries are listed.)   However, the part that gets many people confused is the moment that they are notified they are inheriting the IRA. When the rubber hits the road, and you are presented with a set of rules that come with inheriting an IRA, it can seem quite complicated. The best way to organize these rules is with two buckets: Spousal Beneficiary and Non-Spousal Beneficiary.   Can I roll this into my personal IRA? This question is commonly asked or just assumed by many individuals. The answer is dependent on those two buckets mentioned. Are you a spousal beneficiary  or a non-spousal beneficiary ?   Spousal Beneficiary If the decedent was your spouse, you can rollover the inherited IRA dollars into your personal IRA. This allows you to comingle those dollars into an existing IRA and treat those funds as your own. This gives the benefit of delaying required minimum distributions (RMDs)  until you turn age 73. You can also keep it in the inherited IRA and be subject to those RMD rules (generally, you must liquidate the entire IRA by the end of the 10th year following the original account holder’s death.) Having these options as a spouse offers flexibility in how you want to liquidate the IRA to ensure you are tax efficient as possible.   Non-Spousal Beneficiary If you are a non-spousal beneficiary, you must open an inherited IRA. This is a separate IRA that is exclusive for those inherited dollars. You can invest in this inherited account as you wish as it is sheltered in the IRA, meaning you will not recognize any gains by selling and buying within the account. Any distributions that are made from an inherited IRA are taxed as ordinary income.   This leads to the 2nd option for non-spousal beneficiaries, taking a lump-sum distribution. Lump-sum distributions can have significant tax implications as the beneficiary recognizes the distribution as taxable income. In specific circumstances, some beneficiaries may prefer a lump-sum distribution if the inherited IRA is small, and they could use the money to put on their mortgage or other loan payments. It is always important to contact your financial advisor  and CPA  before taking a lump-sum to ensure that you will not incur a tax burden from the distribution.   Conclusion Inherited IRAs can be complicated, but the first step is accessing your options for where and how you can move the funds. Visualizing which “bucket” you fall into can offer guidance on the processes available. Contact your financial advisor if you are expecting to inherit an IRA. They can help apply the various, more complex rules to your situation to ensure you do what is best for you financially.

As with many things in life, knowing what we’re supposed to do and actually doing it are two separate things. This is true for our health, relationships, careers, and, of course, our finances. When it comes to investing, it’s well known that adequately diversifying and staying invested are the best ways to achieve long-term financial goals. However, this is often easier said than done, especially when market and economic outlooks are uncertain, as they have been for many years. Fortunately, there are investment methods for managing the emotions that come from market volatility.   This raises a good question: “What should you know about sticking to an investment plan throughout your life ?”  Dollar-cost averaging and Lump-Sum investing Knowing when and how to invest in the stock market can be challenging, especially if you suddenly come into a large sum of money. This could be through an annual bonus, the sale of a business, or an inheritance, to name a few. In the long run, investing properly can turn savings into wealth. However, market volatility can derail even the most steadfast investors in the short run.   Dollar-Cost Averaging This is where dollar-cost averaging can help. With dollar-cost averaging, investors regularly invest a set amount on a pre-planned schedule. This reduces the temptation to follow and react to every market move or to try to time the market . If you make regular, automatic contributions to your portfolio with each paycheck, such as through a 401(k) plan at work , you are technically already using dollar-cost averaging. Whether these investments occur monthly, quarterly, or annually turns out to matter much less than simply sticking to a plan.   Lump-Sum Investing The opposite, investing all at once, is often known as lump sum investing. How your portfolio performs in the short run is very much determined by how the market performs immediately after the investment. This can be seen in the chart above, which shows the hypothetical returns between these two methods beginning in 2000. Investing $100,000 in the S&P 500 would have lost value almost immediately due to the dot-com crash. This would have recovered over the next several years until the housing crash. Finally, the value of this investment would have recovered in 2013 when the S&P 500 returned to all-time highs and then benefited from the long bull market that followed. This chart also shows the hypothetical returns of a dollar-cost averaging approach in which the investor splits up the $100,000 into monthly investments over this entire period. Given the length of the time period, this is a rather extreme example, but it serves to highlight some key facts.Dollar-cost averaging on a monthly schedule would have avoided the market drawdowns early in the period when the portfolio would have mostly been held in cash, remaining relatively flat through the mid-2010s. There is an inflection after this when the lump sum portfolio catches up and outperforms due to the strong bull market. So, both methods had their benefits and time to shine over the past two-and-a-half decades.   Dollar-cost averaging can make it psychologically easier to invest The takeaway here is less about maximizing returns (in the moment) and more about staying invested through the years and decades to maximize your returns overall. Dollar-cost averaging can help reduce risk in situations where markets fall sharply, especially early on. However, lump sum investing tends to outperform dollar-cost averaging in the long run since, historically, markets have steadily risen over time. This is analogous to comparing a 100% stock portfolio to a properly diversified one with a balanced mix of stocks, bonds, and other asset classes . The 100% stock portfolio might outperform over long periods, especially during strong bull markets like today’s, but it will also experience sharper pullbacks. On the other hand, the diversified portfolio will experience steadier growth and more muted declines, making it easier for investors to stay level-headed. This is especially relevant today, with the market near all-time highs. The truth is that markets are always uncertain. Whether it’s the upcoming presidential election, geopolitical conflict, or the direction of interest rates and the economy, investors may worry that the market could pull back just after they invest. It’s important to keep in mind that just because the market is near a current peak doesn’t necessarily mean it’s “due for a pullback.” By definition, markets achieve many new all-time highs as they rise during bull markets . While significant uncertainty has occurred this year due to interest rates, inflation, and the Fed, the S&P 500 has already experienced 24 new all-time highs. This includes a sharp rally in May after a slump in April.   Ironically, it can be psychologically challenging to invest both when the market is rising and when it is falling, for fear that the market might be at its peak in the first case and that it might fall further in the second. So, whether dollar-cost averaging or lump sum investing makes more sense depends on the individual investor, their ability to handle risk, and their time horizon.   Getting invested sooner is better than waiting for the right timing Whether you choose to dollar-cost average or invest all at once, getting into the market sooner has historically been better than “waiting for a pullback.” As the accompanying chart shows, waiting for a better time to buy or trying to “buy the dip” has tended to backfire. Since the market tends to rise over time and can rebound unexpectedly, even the worst timing is often better than being out of the market. For example, an investor waiting for a 5% pullback before investing would, on average, have waited 291 days. Even though 5% or worse pullbacks do occur periodically, the fact that the market rises over time means that there are often “higher lows” – i.e., the next dip is higher than before. Historically, markets have gained a whopping 13% during these periods, including the pullback itself. Just as a diversified portfolio can help reduce overall risk and volatility, so can dollar-cost averaging when it comes to investing over time. Dollar-cost averaging may not be the mathematically optimal way to invest since lump sum investing has tended to outperform over history. However, it can help investors stay focused in the long run without worrying about every market event or trying to time the market  perfectly. As is always the case, seeking the guidance of a trusted financial advisor  is the best way to determine the approach that works best for your specific goals. If you do not have an advisor, the team at Whitaker-Myers Wealth Managers  is available to help answer questions you have about investing if you are interested in learning more. The bottom line? Dollar-cost averaging and lump sum investing are both ways to invest cash. History shows that investing sooner is the most important way to achieve long-term financial goals.

In the world of personal finance, effectively managing debt is essential for achieving long-term financial stability. One often overlooked strategy is making principal-only payments on loans. Understanding this approach is increasingly important as individuals seek to minimize interest costs and accelerate repayment.   This article explores the advantages of principal-only payments, their potential impact on your financial journey, and key considerations for implementation. Whether you're tackling a mortgage, student loan, or other debt, this method could be transformative.   By making principal-only payments, you can save thousands in interest over the life of a loan. If you find yourself with extra cash while budgeting each month, consider directing that surplus toward your loans. This proactive strategy can help you pay off debt faster and pave the way to financial freedom.   Steps to Take Before Making Payments Before proceeding, confirm that your lending institution accepts principal-only payments and check for any early payoff penalties. The last thing you want is to have to owe more on something because you made something off early.   Loan Schedules to Consider If you receive a loan amortization  schedule at signing, you can see how much of each payment goes toward interest and the principal. If you didn't receive one, you can use an Amortization Calculator  to create a tailored schedule.   For example, with a $200,000 mortgage over 15 years ( Ramsey Solutions  recommendation) at a 6% interest rate and no extra payments, you'd pay approximately $103,788.46 in interest. Adding an additional $165 per month to principal payments could shorten the loan term by two years and save $15,534.28 in interest. Imagine the savings with even larger principal payments!   Loans That Benefit from Principal-Only Payments Several types of loans can benefit from principal-only payments: Mortgages: Reducing the principal on your mortgage can significantly decrease interest payments and help you pay it off faster. Saving you literally time and money. Student Loans: Extra principal payments, reducing overall interest, and shortening repayment periods can benefit both federal and private student loans. Auto Loans: Principal-only payments on auto loans can lower the total interest paid, allowing you to own your vehicle outright sooner. Personal Loans: Directing extra funds to the principal can save on interest and improve your credit score by lowering your debt-to-income ratio. Home Equity Loans: Applying extra payments to home equity loans can expedite debt reduction and save on interest. Credit Card Debt: Credit cards typically carry higher interest rates, but principal-only payments can reduce the balance and minimize interest charges. Business Loans: Paying down the principal on business loans can improve cash flow and free up funds for reinvestment. By making principal-only payments on these loans, borrowers can take significant steps toward financial freedom and reduce their overall debt burden.   How to Set Up Principal-Only Payments Setting up principal-only payments can vary by lender, but here are the general steps to follow: Review Loan Terms: Check your loan agreement for policies regarding extra payments, as some lenders may have specific guidelines. Contact Your Lender: Reach out to your lender’s customer service to inquire about the process for making principal-only payments. Specify Payment Allocation: Clearly indicate that you want extra amounts to go toward the principal when making a payment, either through a designated form or online portal. Use the Right Payment Method: Depending on the lender, you can often make principal-only payments through online banking, by phone, or by mailing a check. Confirm Payment Application: After making the payment, verify with your lender that it was applied to the principal as requested. Keep Records: Maintain documentation of all payments and any correspondence regarding principal-only payments to track your progress. Set Up Future Payments: If you plan to make principal-only payments regularly, consider automating transfers or setting reminders. By following these steps, you can effectively set up and manage principal-only payments on your loans.   Incorporating Principal-Only Payments with the Debt Snowball Method Integrating principal-only payments into the debt snowball method  can significantly enhance your debt repayment strategy. Here’s how: L ist Your Debts: Organize your debts from smallest to largest remaining balance, focusing on first paying off the smallest remaining balance. Make Minimum Payments: Continue making minimum payments on all debts except the smallest. Identify Extra Funds: Look for extra cash in your budget to allocate toward debt repayment. This is where principal-only payments come in. Contact Your Lender: For the debt you’re focusing on to pay off early, contact your lender to set up principal-only payments. Make Extra Payments: Direct your extra cash toward the smallest debt, ensuring those payments are designated as principal-only. Celebrate Small Wins: Once a debt is paid off, celebrate your progress to stay motivated. Move to the Next Debt: Apply the amount you were paying on the first debt to the next smallest debt, along with any principal-only payments. Repeat the Process: Continue this strategy, focusing on one debt at a time while incorporating principal-only payments. By tying principal-only payments into the debt snowball method, you can accelerate your journey to financial freedom, save on interest costs, and enjoy the satisfaction of eliminating debts one by one.   Conclusion Incorporating principal-only payments into your debt repayment strategy can be a powerful tool for achieving financial freedom. By focusing on reducing the principal balance of your smallest debts first, you save on interest and gain momentum and motivation as you accomplish each small victory. As you eliminate debts one by one, the impact of your principal-only payments compounds, allowing you to tackle larger debts more effectively.   Working with one of our financial advisors  or our financial coach  here at Whitaker-Myers Wealth Managers  can further enhance this process. They can provide personalized guidance, answer any questions, and help you develop a tailored debt payoff plan that aligns with your financial goals. With their expertise, you can navigate the complexities of your loans, optimize your payment strategies, and stay on track toward a more secure financial future. You can transform your financial landscape with discipline and dedication and pave the way for lasting stability.

Moving our intentionality discussion further, think about this - intentionality without purpose is essentially misdirection. As discussed in the previous post ( read Part 2 of this series ), a farmer can take care of their land to the best of their ability, but without planting a seed, nothing will grow. If the farmer’s end goal is to harvest crops, they should not only plant the seeds, but they need to plant the right kind of seeds. I can’t expect to reap corn when I plant strawberries. It may be a fun surprise, but it wouldn’t align with my end goals and expectations.   Define your why I love this saying, which I’ve heard on the Dave Ramsey  network many times: “If your why doesn’t make you cry, find a different why.” The saying is fairly simple but has much depth that can be explored.   The first line pulls at the passion strings. If your core values and beliefs do not embed the reason you are proceeding with an action or decision, the end result will likely reflect it. The second line realizes this and highlights that there are options to explore.  Find a different WHY. Our core values define what we believe and seed our WHY. Thus, our core values and why are our actions or intentions aligned and need to align with our goals.  I like looking at this from a motivational perspective, specifically intrinsic motivation and extrinsic motivation.   What Motivates You? Our motivation and goals change as we progress in our years, careers, and life journey. Early in my career, I wanted to find the most logical (potentially fastest) way to make six figures, and my focus was 100% on that goal. As I aged, I found that making money was great, but there are more important values I have in my life. So, I split my focus into 50% monetary growth and 50% value/fulfillment. Not to say I’m old, but now, I’m significantly more focused on fulfillment than monetary gain.   In one of my previous roles at a large hospital enterprise, one project I worked on was optimizing operations within a specific department. One task that was assigned by senior leadership was to increase patient visits without increasing our resource/headcount. As we dug through it, one of our solutions was to find various motivation factors for clinical staff. Pizza party, anyone? Maybe a team bonding outing at Top Golf? Sure, but we found that we would hit a roadblock quickly. We hit a roadblock even when we offered additional financial incentives, so more work = more pay. It became apparent that these extrinsic motivators only go so far. They build momentum for a very short period, then fall back to where it was beforehand. So then what?   Our focus shifted. We shifted to intrinsic motivation. What motivated our team? We found clearly that some found those other motivators ‘lame’ or a ‘waste of time’ or, more importantly, non-value add. So, how do we then focus on the intrinsic motivators? Luckily for me, this was healthcare. In healthcare, the majority of clinicians/staff are there because they want to give back and help improve the lives of those who come to their clinic/office/hospital. We focused on improving the interactions with patients, specifically improving time with patients and improving patient outcomes. This resonated most with the providers; our patient satisfaction scores went through the roof. It also accomplished our task not only in the short term but longitudinally as well.   Any why, Any How Friedrich Nietzsche said, “He who has a why to live can bear almost any How.” As discussed in this post, intentionality begins with understanding your core values, motivation, and goals. Intentionality is the strategic or tactical action to get to those goals. Though I would love to have a great infographic that shows this progress, from my research, I’ve found that this pathway is almost never linear.  The weaves and turns that come on our path continue to value or devalue our current goals. Our motivations change, life goals change, and focused intentionality changes. We’ll discuss the emotional components of intentionality in the next post. I hope you’re following along on the journey!   If you are on a financial journey and have questions about end goals, be sure to discuss these with your financial advisor . These goals can range from creating an emergency fund, paying off debt, or saving for retirement. Our team at Whitaker-Myers Wealth Managers  is there to help you through any part of the journey.

We are thrilled to announce that Grant Jennings has joined Whitaker-Myers Wealth Managers as a Financial Advisor in our Cincinnati, Ohio, office. Grant brings with him an impressive track record of nearly 17 years at Fidelity Investments, where he served as a Director, Retirement Planner and Retirement Relationship Manager. His extensive experience in helping individuals and families plan for their financial futures makes him a valuable addition to our team. Grant holds the prestigious Certified Financial Planner™ (CFP®) designation, which distinguishes professionals who have met rigorous education, training, and ethical standards. As a CFP®, Grant is well-equipped to provide comprehensive financial planning services, guiding clients through essential areas like retirement, investment strategies, tax planning, estate planning, and more. His holistic approach ensures that clients can build a solid financial foundation to achieve both short-term and long-term goals. President of Whitaker-Myers Wealth Managers, John-Mark Young, said about Grant, "The quality of any firm is reflected in the quality of the people at the firm. Our team is made up of people who continually amaze me with their dedication and selfless service to their clients, communities, and families. In Grant, we continue that trend of high-character thoroughbreds, as my friend Dave Ramsey refers to them. On a personal note, Grant is married to his wonderful wife, Lindsey, a dentist in Southern Ohio. Together, they are raising three beautiful children. Family is at the heart of Grant’s personal life, and this focus on family translates into his professional life as well, where he helps his clients secure financial futures for themselves and their loved ones. In his new role with Whitaker-Myers, Grant will be working closely with Dave Ramsey clients in Cincinnati and Dayton, Ohio along with Lexington, Kentucky. His expertise and alignment with the Ramsey philosophy make him the perfect fit for clients seeking financial peace and guidance. We are excited to see Grant bring his dedication, knowledge, and client-first approach to these communities, where his impact will be significant. We are truly excited to have Grant Jennings join our team at Whitaker-Myers Wealth Managers. We invite you to join us in welcoming him and look forward to the positive impact he will have on both our team and our clients. Grant can be reached at gjennings@whitakerwealth.com .

Saving for Retirement Many people have an opportunity to save for retirement through an employer-sponsored 401(k). This is a great way to save for retirement. Many plans now offer Traditional 401(k) contributions AND Roth 401(k) contributions. But what is the difference between them, and which one is better? This article will explain the similarities and differences between a Roth 401(k)  and a Traditional 401(k) and why I feel most people should save to a Roth 401(k) over a Traditional 401(k).   Similarities of Roth 401(k) and Traditional 401(k) A common misconception is that a Roth 401(k) and a Traditional 401(k) are separate employer plans. Although the contribution types are different, both options fall under the same plan rules found in the summary plan description of the 401(k). Both options allow you to consistently save for retirement and offer the same investment options. Whether you choose Roth or Traditional contributions, a company match will not be affected. Most employers will match using pre-tax dollars.   Additionally, the contribution limits are the same for both a Roth 401(k) and a Traditional 401(k). That contribution limit for 2024 is $23,000 ($30,500 if you are 50 or older). Remember, that is the TOTAL you can contribute to any employer-sponsored plan in any given year. Meaning, you cannot save $23,000 in Roth 401(k) and an additional $23,000 in Traditional 401(k). However, you can also save an extra $7,000 ($8,000 if you are 50 or older) in a Roth IRA, even if you are maxing out your Roth 401(k)!   Differences between Roth 401(k) and Traditional 401(k) While there are many similarities between Roth 401(k) and Traditional 401(k), the differences are where the Roth 401(k) shines.   It all comes down to when the tax is paid on the contributions going into the 401(k). If you make Traditional contributions, these go into your 401(k) as pre-tax dollars. The funds will grow tax-deferred, and distributions after 59 ½  will be taxed at your regular income tax rate. Additionally, your pre-tax contributions will lower your income tax owed for the year you made the contributions.   If you make Roth contributions to your 401(k), you will pay the tax now, but the account will grow tax-free, and you will be able to make tax-free distributions after 59 ½ and having the Roth 401(k) funded for at least five years. Roth contributions will not lower your taxable income in the year they were contributed. BUT THAT IS OKAY! Why? Your contributions grow tax-free over a significant number of years. Would you instead be taxed on $1000 now or $1,000,000 when you take distributions in retirement? If your effective income tax rate is 20% and your Traditional 401(k) is worth $1,000,000, then it is actually worth $800,000 because you will be paying the government $200,000 in taxes.   Let's put it in a Scenario Here is a scenario where Will Smith saved only Traditional dollars to his 401(k), and Chris Rock saved only Roth dollars to his 401(k):   Will Smith had 30 working years left, made $65,000 per year, contributed 15% of his income to his Traditional 401(k), and averaged a 10% rate of return. Saving in the Traditional 401(k) gave Will $2,145 additional take-home pay per year. Multiply that by 30 years; he took home an additional $64,350 during his working career. Will met with his advisor and they ran a scenario where Will has 20 years of retirement, averages a 6% rate of return on his portfolio, and has an estimated income tax rate of 15%. His advisor estimated that Will’s retirement income could be $120,917 annually. Not bad.   But how did Chris do? All things being equal, EXCEPT Chris Rock saved 15% in his Roth 401(k). He missed out on $64,350 of take-home pay because he opted to pay the tax upfront so his investment could grow tax-free and he could receive tax-free distributions in retirement. Chris sits down with his advisor, who Will Smith referred him to, and they review his annual retirement income estimate. Chris also has 20 years of retirement, averages a 6% rate of return on his investments, and has a tax rate of 15%. His advisor estimates that Chris will have an annual retirement income of $142,256. That is $21,338 better than Will PER YEAR!   In just over three years, the additional income from saving in the Roth 401(k) will be more than Will's take-home pay over 30 years. Chris will have $426,760 more income than Will during his retirement, all because he paid the taxes on the contributions during his working years. Source: https://content.schwabplan.com/download/RothCalc/RothCalculator.htm   Conclusion In most cases, contributing to a Roth 401(k) is more beneficial in the long run than a Traditional 401(k). Although they have several similarities, the tax advantage between them is significantly different. You should always speak with a financial professional before making an investment decision, and this article is not intended to provide advice. A financial advisor can also help you with your investment options in your plan and look at other investment options outside of your plan. If you would like to schedule a time to discuss your 401(k) or any other type of investments or planning, feel free to schedule a meeting with any of our advisors at Whitaker-Myers Wealth Managers .