Dyer & Co Newsletter - March 2025

Pollen, Volatility, Azalea Image generated by Copilot

Spring Market Shake-up

March arrived with its usual explosion of color. As azaleas bloom across Charlotte and global markets shudder, one can be forgiven for wondering: is it the pollen or international political and economic uncertainty making my eyes water?

The market's recent roller coaster has tested even the steadiest investors. But market volatility is nothing new. Throughout history, the most successful investors have been those who understand what's causing the current instability and how it might affect their near-term decision-making, without letting short-term fluctuations derail their long-term plans.

Severance Package

If you've been watching the hit Apple TV+ series "Severance," you know it's sparking fun conversations about work-life balance. For the uninitiated, the show explores a world where employees undergo a procedure that completely separates their work memories from their personal lives. Here are some financial parallels worth considering while we await Season 3:

Corporate incentives matter: Without spoiling anything, let's just say Lumon Industries' reward system is... unconventional. While your employer's quarterly bonus structure probably doesn't involve mysterious break rooms, finger traps or waffle parties, it's worth examining how company incentives shape your financial behavior. Are you making career decisions based on rewards that may never materialize?

The cost of compartmentalization: Many of us attempt to mentally "sever" our financial lives—keeping retirement planning separate from daily spending, or treating work income and side hustle earnings as entirely different buckets. But just as the characters discover the hazards of their severed existence, fragmented financial planning can lead to missed opportunities and conflicting goals.

This is your life: There is a difficult balance we all face. Is it ok to slave away at a desk in hopes that your future outie will enjoy a lavish retirement? Can your outie skip work tomorrow and hope that your innie can make up your spontaneity later on and keep your career from imploding? Unlike the TV show, there is just one of us going through each day. We have to be ok with the tradeoffs we accept in an uncertain world. Forgetting our problems (surgically or otherwise) is no replacement for addressing our problems.

Atomic Habits Revisited

I've recently picked up James Clear's "Atomic Habits" again. One quote that struck me was: "Your current habits have been internalized over the course of hundreds, if not thousands of repetitions. New habits require the same level of frequency." This applies to so many of our habits. It's fascinating for me to think about the behaviors we struggle to implement with intention and the habits that ossify along the path of least resistance. Many of us know what we should be doing with our money—saving more, investing wisely, spending mindfully—but knowing and doing are very different things. The genius of Clear's approach is focusing on tiny changes that compound over time AND embrace the power of automation where possible.

Just as compound interest works its magic on investments, compound behavior works its magic on our financial habits. For example:

• Automating a small monthly increase to your retirement contribution might feel insignificant today, but over decades, it transforms into substantial additional savings.
• Checking your account balances regularly rather than randomly (or never) creates awareness that can prevent overspending and help you stay on track with financial goals. Even better: try a budgeting app like Monarch or YNAB.
• Delaying purchases by 24 hours interrupts the impulse buying cycle and often leads to more thoughtful spending decisions, with the added benefit of each "no" reinforcing your identity as a thoughtful spender.
• Make a quarterly or annual appointment with me (or yourself) to think strategically about your finances
• The key insight is that your financial success isn't determined by dramatic changes or perfect decisions. It's built on consistent, small actions aligned with your long-term goals.

What tiny financial habit could you start today that, given enough repetitions, would transform your financial future?

Spring Cleaning: Three Areas to Freshen Up

With tax season in full swing and a quarter of the year behind us, this is the perfect opportunity to spruce up your financial house. Here are three areas that deserve attention this spring:

1. Tax Optimization Opportunities

• Review your withholding to avoid giving the government an interest-free loan
• Maximize 2025 retirement contributions (remember: $23,500 for 401(k) plans, $7,000 for IRAs)
• Consider bunching deductions if you're close to the standard deduction threshold

2. Investment Review

• Reassess your asset allocation in light of recent market volatility
• Consider rebalancing if market movements have thrown your targets off course
• Evaluate whether higher interest rates offer new opportunities in fixed income

3. Protection Planning

• Review insurance policies to ensure adequate coverage
• Update beneficiary designations on retirement accounts and insurance policies
• Check that your estate planning documents reflect your current wishes

In the process of cleaning out, if you come across anything that requires a second set of eyes, please know that we'd be happy to discuss these or any other topics on your mind as we head into the second quarter of 2025.

Madness!

As the NCAA college basketball tournaments draw to a close and the Final Four inches closer to crowning a champion, I wanted to share some insight into the financial ecosystem that surrounds college basketball's biggest stage.

This year, Americans will have legally wagered an estimated $3.1 billion on March Madness, up from $2.7 billion in 2024, according to the American Gaming Association. Of course, that's just the legal betting—office bracket pools and friendly wagers likely push that number significantly higher.

The landscape of player compensation has transformed dramatically since 2021, when NCAA athletes gained the right to profit from their Name, Image, and Likeness (NIL). While players still can't receive direct payment from the NCAA for tournament participation specifically, many have secured lucrative NIL deals with brands.

Additionally, a pending $2.8 billion settlement in the House v. NCAA case could allow schools to directly pay athletes up to $20.5 million per school starting as soon as this summer. Despite these changes, the NCAA is projected to generate around $1.38 billion in total revenue this fiscal year, with the majority coming from March Madness through broadcast rights, ticket sales, and corporate sponsorships.

There's another fascinating angle many fans don't consider: the "units" system. Each game a team plays in the tournament (excluding the championship) earns their conference one "unit" worth approximately $2 million, paid out over six years. This means a Cinderella run can be worth over $10 million to a small conference.

For the first time ever, women's tournament teams are also receiving units this year, though at a much smaller scale—about $113,000 per unit in a $15 million pool.

So next time you're cheering for that plucky underdog, remember—their success isn't just about glory, it's also funding athletic departments for years to come.

We hope you enjoyed the March edition of the Dyer & Co. newsletter! As always, we're here to support your journey towards financial wellness and achieving your goals. Don't hesitate to reach out with any questions or concerns.

Thank you for reading. If you liked this content, please share with a friend. You can always reach us by replying to this email or at 704-323-6872.