Baseball Card Collecting: Lessons for Life
By Lance Gunkel, CFP®, CFA, Managing Director
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While growing up, I was an enthusiastic collector of baseball cards.
My brother and I were part of the card collecting boom of the 1980s and 1990s. I’d spend countless hours with my brother and our friends looking at one another’s cards, discussing potential trades, looking through pricing guides, and dreaming about the next card purchase.
My parents occasionally gave me gifts of special cards for birthdays and Christmas, but the majority of my collection was obtained through the portion of my savings that I was allowed to allot to baseball card purchases.
My brother and I would save money from our allowances, birthday cards, and other youthful entrepreneurial activities (including transforming our backyard into a “midway” full of games, with each game costing a quarter). Then we would plan the bike ride to our nearest convenience store to buy packs of cards!
We would rush home, open the packs—throwing aside the small piece of chalky and hard inedible gum that came in each pack—and call out the names of every card: “Here’s a Ken Griffey, Jr. card! Yes!”
My parents used this as a tool to teach me about delayed gratification, of which I’ve become very appreciative. In college, I began saving in earnest in order to invest into stocks and mutual funds. It was fascinating to me that I could save and invest those dollars, then watch them (hopefully) grow in value over time.
Delayed gratification became, for me, a route to security: owning a pool of funds to draw upon when needed for other opportunities or unexpected situations was, and is, a comfort to me.
The pandemic is another form of delayed gratification as we delay visits with friends and extended family and postpone vacations. As with investing, this form of delayed gratification is also about safety—to keep one another healthy.
It is difficult to postpone activities that bring us joy: saving instead of spending; settling for a phone call instead of a get-together. However, I believe that we will come out of the pandemic with a greater appreciation for spending time with our loved ones, connecting through social gatherings, and traveling to distant places. It may be challenging, but it is worth the effort.
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When We Will be Clear from COVID-19 Is Not Clear
By David Strege, CFP®, CFA, CKA®, Senior Financial Planner
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We feel that each of our clients has made it through 2020 with very few financial issues. One of the biggest challenges has been extreme isolation as they followed stay-at-home mandates or were locked down in their homes or retirement communities.
As Mike Tyson said about boxing, “Everybody has a plan until they get punched in the mouth.” We certainly got hit hard in 2020, but we feel that it has proved that proper financial planning can pay off. Following sound, basic, disciplines about money has, in most cases, provided the desired security that many people had hoped to achieve from their many decades of labor.
2020 was a year of continuing uncertainty. Unfortunately, a finite date when COVID-19 concerns will be gone is not clear cut.
A safe vaccine has to be distributed around the world. Enough people have to have confidence in the vaccine to get the shot. Then we will still wonder how long we will have immunity after each shot. This will mean months of transition before we feel the freedom to go into stores and restaurants without masks, let alone shake hands and give hugs.
Eventually, we may be able to feel comfortable flying to our desired locations in the U.S. and the world. When you fly, will you still wear a mask if the CDC doesn’t recommend it? Think of the number of people you saw from Asia in international airports wearing masks because of their concerns from the Avian influenza H5N1 that began in early 2004 and went on for ten years. That event killed an estimated 575,000 people versus 1.79 million so far from COVID-19 as of the writing of this article, according to the John Hopkins University & Medicine Coronavirus Resource Center.
Fortunately, most of us have learned to adapt to different events in our lifetimes. This pandemic is a new event to us since few of us were around over 100 years ago when the last major global pandemic of the Spanish flu hit from 1918 to 1920. As we adapt, sound personal financial principles can still be applied.
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Spend less than you make. This one seems to be consistently happening as people aren’t able to travel or even eat out as much. It is amazing to see the increase of bank balances over time.
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Have at least three months of living expenses in cash in the bank. Having cash on hand helps reduce anxiety when unexpected expenses occur.
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Maintain an appropriate allocation in diversified asset classes. The fastest bear market occurred with a 35% drop in the U.S. stock market in 23 trading days. It was followed by the fastest recovery to a bull market in history. A good long-term allocation helps sustain investors as the world and equity markets adapt to a new environment.
The biggest lesson I have learned is to stay in contact with family and good friends. To get through challenges and uncertainties, hopefully you have learned to use the technologies available to have great conversations when you can’t meet in person. This has been the consistent factor for those who have handled the unexpected well.
As AT&T used to say back in 1979, “Reach out and touch someone.” Hopefully our clients felt like we reached out to them enough in 2020 to help them get through this, and we plan to continue to do so in 2021.
Take care and stay well.
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What You May Need to Know for Tax Planning
By Ann Menke, CPA
Menke & Company, Certified Public Accountants
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Hello Folks! While COVID-19 has many aspects of our lives on hold, the tax beat goes on. Strategic tax planning can be extremely beneficial as we move into 2021. Hopefully you were able to capitalize on some of the year-end tax strategies related to charitable giving and RMDs, but if not, you still have tax-related opportunities in 2021.
Stuff to consider before April 15:
- Fund your Traditional and/or Roth IRA. While the rules of some other retirement plans allow for funding up to the extended due date of your tax return, IRAs do not afford this luxury. An IRA intended to be a contribution for 2020 must be in the account by April 15, 2021.
- If you are under 65, and are covered by a high deductible health insurance plan, you should also consider funding a Health Savings Account (HSA). An HSA is a savings account in which you build up funds to cover the high deductible when needed. What’s nice about an HSA is that you are really taking a deduction for future medical expenses that might not otherwise be deductible if you don’t itemize. This is another one of those “above the line” deductions. If you think you might be eligible, you should check it out!
- Many of you received an Economic Impact Payment (EIP) as part of the CARES Act. Payments made were up to $1,200 per individual based on income and age. If you got one of these payments, your tax preparer will need the Notice 1444 that the IRS sent you in the mail. This document verifies the amount you received. If you did not receive an EIP, then you might be eligible to get one as part of the refund on your 2020 income tax return. Your tax preparer will likely ask you about it, so you can speed up the process of preparing your return by having it ready!
- The sooner you can get your information compiled, the better. Waiting until the deadline can cause issues for both you and your tax preparer. If your return is prepared in February or March, you will have more time to review and make sure it includes all the correct information - especially those deductions! 2020 has been a strange year to say the least. If you are having a hard time getting your information together, you can ask for an extension to file your tax return. This is NOT an extension of time to pay your tax! If you need to extend, you also need to consider sending enough money with the extension to cover what you think you will owe with your return. This amount can be difficult to determine and you may need some professional help.
- If you have employees who had COVID-19 related issues, – either they were sick or needed to take care of a sick family member, or perhaps had daycare issues – there are some credits available that will help you cash flow the sick time you paid. Be sure to ask your accountant about your eligibility for these credits.
Some general stuff:
- Most folks are cash basis taxpayers. This means you recognize the income when you receive it and you get to take a deduction in the year you write the check. While it’s oftentimes difficult to defer income, you can increase your deductions by stacking them into one calendar year. This is especially helpful for folks who are close to itemizing, but don’t quite get there because of the higher standard deduction. As an example, if you usually give $5,000 to your church, you might consider writing one check in January 2021 and another check in December 2021. The church receives the same amount of donation, but you will have a larger charitable deduction on your 2021 return.
- You might own a business or a farm. Taking the time to “run the numbers” is worth it. Decisions about expansions or equipment purchases can be timed in one year or another to provide the most tax benefit. If you have to spend the money, you may as well get the most bang for your buck and save the taxes, too.
- If you are a farmer, be sure that your prepaid expenses will pass IRS muster. You can’t just put down a deposit with your seed dealer and decide what to purchase later. The documentation must be for a specific input of a pre-determined quantity. There must also be a stated price per unit and the amount can’t exceed 50% of your farm expenses. Again, your tax preparer can help you if you have questions.
- Finally – and I think this bears repeating – you should always include your tax preparer in planning for changes in your financial life. Whether you are purchasing a farm, starting a business, bringing on partners, or planning for the next generation to take over, planning is crucial and your CPA can help you through the rough spots. Timing and structure are so important when it comes to tax planning. The more you communicate with your professional team – accountant, attorney, financial planner – the better the outcome.
I’d like to take a moment to thank Syverson Strege for the opportunity to be a guest blogger this month. I’ve had the pleasure of having mutual clients with Johnne Syverson and David Strege since the early 90s!
I wish all of you a Happy New Year! Now go work on your taxes…
Ann Menke founded Menke & Company, Certified Public Accountants, in 1990. An experienced CPA, Ann has worked in the accounting industry for over 30 years advising clients in tax planning and preparation for small, family-owned businesses in varied industries including agriculture, manufacturing, construction, and retail. Ann graduated from the University of Northern Iowa. She is a member of the AICPA and Iowa Society of Certified Public Accountants.
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2020: An Employee's Perspective
By Debbie Richards, Receptionist
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These past several months have affected the lives of you—the clients of Syverson Strege—and our team of employees. We were forced to modify our habits and discover a new norm for work, school, and living. We know how extraordinary these times are for you and your families, and we are committed to getting through this together.
I speak for all of us at Syverson Strege to say thank you for being a part of our family. We appreciate the continued support of clients like you during these times of uncertainty for all. Thank you for trusting us, for showing faith in us, and for your willingness to adapt to new ways of doing business. Some of you even referred new clients to us during this difficult time, which helps our business grow. Truly, it is our pleasure to serve all of you.
Many things have changed. What hasn’t changed is that the people we can count on are still here, working to keep us safe and in good health. Essential workers are making sure children continue to learn, ensuring public safety and infrastructure continue, providing food for our tables, and keeping us healthy. Many of our clients are essential workers, and all of us at Syverson Strege thank you. Please join us in thanking not only the essential workers, but all people who have come together to help others in need.
Through this pandemic experience, Syverson Strege has sought to remain strong. Each member of our team works tirelessly, harnessing our energy and skills to meet your needs. We have adjusted our way of working to continue supporting you—our valued clients and your families—through training, collaboration, and with new tools to tailor processes to fit new standards. I am proud of the work values, spirit, and unity I have observed in our team, as we adapt to a new reality. Our leadership team prepared for this moment, and implemented the necessary changes without a hitch.
When I began my career at Syverson Strege 18 years ago, I often asked myself, “What do I have to offer the clients of Syverson Strege?” The majority of my career had been in public service and service-related roles. Generally, Syverson Strege’s clients seemed to have it all—wealth, successful professional careers and businesses, and beautiful families. I would ask, “What do I have to offer them that will make a difference in their lives?”
Over the years, and this year in particular, it became clear: I can offer kindness and compassion. As I go through my day, I look for the opportunities to speak, think, and give kindness. As I do this, I see the world change around me. I realize how important it is to express warmth and affection through my words and actions to give hope. People will always remember how you make them feel, and giving hope in times of crisis is a way to create positive energy. Reaching out to others without expecting something in return feels good. I still receive more than I give, however, but I am not helpless.
With all that has happened recently, it is tempting to dwell on everything that went wrong, lest we forget: COVID-19, race concerns across our country, protests in hundreds of cities that sometimes turned violent, a global recession triggered by lockdowns, the Iowa derecho, and numerous other catastrophic weather-related events. Also, the loss of livelihoods, food insecurity, school closures, your inability to spend time with family and friends, widespread suffering, the deaths of clients and loved ones, and dramatic shifts in your daily life. Can the nation’s political system survive these stresses? The hopes you originally had for 2020 might have dwindled as each day passed.
But, I want to remind you that there is still so much good in your life. Even during this global pandemic, you still have people close to you who are in good health. You still have a roof over your head and food in your belly. And that’s worth celebrating. If you’re feeling fear and uncertainty about the future, just remember that each step forward is an act of gratitude and optimism. You haven’t given up, and neither have we.
2020 has given us a true reality check, so where do we go from here? Focus on the future; prioritize your mental health; be flexible, optimistic, and resilient. Following a routine of self-care and personal growth can help you feel empowered and grounded again. The outside world will always be there. So, take time now to cultivate daily habits that empower you. And you can continue putting one foot in front of the other each and every day.
Let’s focus on a future that is filled with hope. Let’s start filling our world with music and songs of hope in preparation for the great celebration that awaits us. We will meet again in person. We will celebrate together again. Syverson Strege will strive to provide you the utmost support and services.
In these moments of uncertainty, there is one thing you can always count on—our commitment to you and your success. We are honored to serve you. Thank you for being a part of our Syverson Strege family and for believing in us all through the years. Together we are stronger!
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This delightful artwork, provided by children and individuals at ChildServe, Link Associates, and On With Life, was featured on Syverson Strege’s 2020 Christmas card. In lieu of our annual Client Appreciation Event, Syverson Strege made donations to these three nonprofits selected by the Giving Club members. |
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In commemoration of President’s Day, please note that Syverson Strege employees will be off on Monday, February 15 and resume work on Tuesday, February 16. |
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2020 Syverson Strege Communications |
Syverson Strege moved into 2020 with the decision to enhance our marketing and communications. One strategy was to hire a Director of Marketing & Communications in January to coordinate the various avenues of communications. Little did we know how helpful that would be with the extra communications associated with the pandemic.
We added a monthly News & Views email which includes an inside look at Syverson Strege employees, as well as a recap of events and important communications for the month.
We obviously stepped up the frequency of our Zoom meeting platform as most of you had your annual planning sessions virtually. Hopefully you’ve noticed that we’ve also improved the technology to make your meetings go as smoothly as possible.
The website has been updated more frequently, we added a regular market update blog article by Chief Investment Officer Jason Gunkel, extra videos, new podcasts, and our quarterly newsletters.
In case you missed some of them during the year, or want to revisit some of the content for 2020, here are highlights.
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Podcasts
An interesting and fun project has been the development of two different podcasts, Finance Moments and This Story Needs to Be Heard.
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Finance Moments are less than three minutes in length and produced for rapid-fire info on financial topics of the day.
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This Story Needs to Be Heard podcasts are interview style podcasts to highlight stories of unsung heroes who are living a life of impact within Central Iowa and beyond.
All podcasts can be found here.
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Social Media
Syverson Strege has a robust presence on social media so you might want to check out our Facebook, Twitter, and LinkedIn pages.
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Newsletters
We send our quarterly newsletters via email. You can find all our newsletters here.
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Videos
We ramped up our video production this year. One of the most fun videos was an impromptu video where David Strege explained how to correctly pronounce “Syverson Strege.” You don’t want to miss it!
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Blog Articles
For you blog readers, we have posted over 40 original blog articles this year with financial information, heartfelt commentary, and other market updates. You can find our entire blog page here.
Thanks for reading and watching our communications this year! We’ll keep them coming in 2021!
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Here is Chief Investment Officer Jason Gunkel’s most recent Market Update article (December 4).
The stock market, as represented by the S&P 500, continued its rally in November, returning nearly 11% and reaching several new all-time highs. The Dow Jones Industrial Average also crossed the 30,000 mark in November for the first time ever. The U.S. stock market is now up about 14% for the year to date.
The November market rally began after the U.S. election, which will most likely result in a divided Congress. This is seen as favorable by investors. The rally continued to pick up steam after announcements of multiple successful COVID-19 vaccine results.
The companies, Pfizer and Moderna, reported their vaccines have been shown to be 95% and 94% effective, respectively. The U.S. Food and Drug Administration has meetings scheduled for December 10 and December 17 to decide on the emergency-use authorization of these vaccines. The rollout of the vaccines could begin immediately after, according to the New York Times.
The Centers for Disease Control and Prevention (CDC) has recommended that health care personnel and residents of long-term care facilities should get the first doses of the vaccine. The general public, who are not in high-risk groups, could start getting access in early spring. Most Americans will be able to get vaccinated by the summer, according to the CDC.
The vaccine news has been welcomed by the financial markets and especially for the sectors of the economy that have been hurt the most by the pandemic. Sectors, such as energy and financials, have rebounded the most in November. They have outperformed technology stocks, which had led the market rally year to date by a wide margin.
This rotation from more “growth” sectors to “value” sectors tends to be a sign that investors are more optimistic about a longer-term recovery in the economy. Fidelity has forecasted that the U.S. economy is no longer in a recession and has entered the early stages of an economic recovery. The economy is about two-thirds of the way back to a full recovery, according to data from the Federal Reserve Bank of New York.
The employment news continues to be mixed. On the bright side, the unemployment rate has fallen from a peak of about 14% to less than 7%. The U.S. economy added 245,000 jobs in November, but this was the smallest number in the past seven months, reported by Yahoo Finance.
Long-term unemployment (defined as longer than 27 weeks) has continued to rise, and now makes up about one-third of all people unemployed. In addition, the number of people who are filing first-time jobless claims continues to be above 700,000 per week, according to Bloomberg.
The COVID-19 pandemic is probably still the biggest risk to the market and economic recovery. On the same day the U.S. stock market hit a new all-time high, the number of deaths caused by the virus also reached a new daily record of 2,885 on December 2, as reported by the New York Times.
The potential for further economic shutdowns in parts of the country and economy could stall the recovery. However, the vaccines provide hope that there is light at the end of the tunnel.
Throughout most of the pandemic, investors have been very forward looking that the economy would fully reopen at some point. The vaccine releases could provide enough confidence for investors to keep the stock market rally going through a potentially difficult winter.
For previous market updates, click on the blog page here and scroll down to read each article.
Be watching for Syverson Strege’s 4th Quarter Market Update video that will be coming out in a few days. To watch all other quarterly market update videos for 2020, click here.
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Happy New Year to you and your family! |
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Syverson Strege
4125 Westown Parkway, Suite 104
West Des Moines, IA 50266
515-225-6000
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