Mid Year Update

Today's Newsletter:

• Quote from Napolean Bonaparte

• My Money Moves

• A Money Question

Quote

“The man who can do the average thing when everyone else around him is losing his mind.” - Napoleon

Napoleon said this when describing what makes a military genius. The crossover of this quote to other areas, especially investing has always stuck with me. Many things we do in life require ignoring the noise and sticking to the plan. Easy to do when the sun is shining, hard to do when the clouds are circling.

My Money Moves

We are coming up on the end of July! I hope you have been enjoying some quality time with your family this summer. We have created memories at Disney World, the local pool (first year for the kids jumping off the diving board), and Mexico. I started this newsletter with one goal in mind, to be transparent. With that as my guiding light, I am excited about this week’s newsletter. We are going to walk through five money moves I have made this year.

My goal this week is to not just show you the end result but my thought process for the decision. Remember, money is personal. The decisions I make might not be right for you. The decisions you make might not be right for me. There are few absolutes in money management. With that in mind, let's get right into it.

1) Roth Conversion 

What I did:

For those that have been following along for a while, you might remember an early edition talking about this decision. I played MLB for 11 years and in that time was fortunate to grow my 401(k) to be worth north of $500,000. When I got done playing I rolled (moved) that 401(k) to my IRA (Individual Retirement Account). This provided me with more optionality. Over the past few years, I have been converting (moving) that IRA money into a Roth IRA. The official term for this is a Roth conversion.

Why I did it:

I did this for three reasons. The first was that my tax bracket in the last three years has been lower than in the previous ten years. I wanted to take advantage of this. The second was that I wanted “tax diversification” in my portfolio. The large majority of my investments are in taxable accounts. This just means they are not in retirement accounts. I wanted to add to my “tax-free” bucket. The third reason was the market has been beaten up over the past two years. This means my investments were down anywhere from 10-20%. A great opportunity to convert them now and let them come back in my tax-free account.

The outcome:

Well, this is a bit loaded. I wrote a check to the IRS this week for more than $90,000. This is for the taxes incurred executing the Roth conversion. I owe taxes on the money I moved from my IRA to my Roth IRA. Yet, outside of that, I am thrilled with the outcome. My investments have roared back this year. The best part is that growth is happening free of taxes. This has set me up to have nearly seven figures in my Roth IRA. This money will continue to compound tax-free and come out tax-free in retirement.

2) META 

What I did:

I do not buy individual stocks with my “serious money”. I do allocate a small percentage (less than 2%) to them. I love following them and it allows me to scratch an itch. Over this past year, I have bought a few individual stocks but none with higher conviction than META.

Why I did it:

I felt strongly about many of the initiatives they were doing for the long term. I made a few purchases when the stock price was $200 and lower. The stock had peaked the previous year at north of $370 a share. I felt it was an attractive entry point.

The outcome:

This makes me laugh as I write this. If you would have asked me this at the beginning of the year my answer would far different. Remember how I started buying around $200 a share? Well, META tanked all the way down to below $100 a share. I held on through the route and feel great about the investment today with the share price sitting at $325. The lesson in this is it is very very very hard to buy individual stocks. You can be “right” and still get burned.

3) Private Investments 

What I did:

I have turned down north of 100 private investments over the past 15 years. I have focused on hitting singles and doubles not home runs. This past year I have started to get better educated on the marketplace and decided to start allocating funds to several private deals. Let me be clear though, I am not talking about venture capital. I am talking about small business America. Things that I still have a firm understanding of.

Why I did it:

I did this for two main reasons. I was at a point financially where if my private investments went to zero it didn’t affect my life. I was also at a point where my core portfolio (the boring stuff) could sustain my lifestyle.

The outcome:

The financial outcome will not be known for years to come. Yet, I can say the outcome has been overwhelmingly positive. It has allowed me to connect with great people, expand my network, and level up my education of the marketplace. This helps me but more importantly, helps my clients.

4) Estate Planning

What I did:

I redid my estate plan. This means I redid my trust documents to reflect my current finances, family, and goals. This is something that many people do once and never again. Your estate plan is your financial GPS for when you aren’t here, make sure it is calibrated.

Why I did it:

A lot has changed for me over the past few years. I stopped playing baseball. I started a business. I had another daughter, Peyton. I have different goals and aspirations for the future than I did just a few years ago. I wanted to make sure my written plan reflected that.

The outcome:

This has given me something that money can’t buy, peace of mind. Kristin (my wife) and I have worked hard over the past 15 years and made countless sacrifices to be in the position we are in today. We want to make sure We are being good stewards of that. The real outcome will be decades down the road when it kicks into action but today it provides clarity.

5) Life Insurance

What I did:

I bought more term insurance. If you follow me on Twitter, chances are you know I am a bit skeptical of most insurance policies. With that said, when there is a need let’s solve it with insurance. I did just that.

Why I did it:

This was as much a business decision as a personal one. Our business has grown significantly over the past few years. We wanted to make sure we were covered if something happened to my brother or me.

The outcome:

Our clients, my family, and my business partner are covered no matter what happens. This matters to me. Each one of those three groups of people has placed their trust in me. That is not something that I take lightly and wanted to ensure that all would be on solid footing should something happen.

Finances are always changing. I have been doing this for 15 years, every year has looked similar to this one. A few key decisions that will have big consequences on my financial plan. If your life is ever-changing like mine, chances are your money moves are as well.

A Money Question

If you could go on one vacation where would it be?

This year I have been eating my own cooking. My family has gone on more vacations than any year in the past. It has been a wonderful way to build lifelong memories. One of my favorite memories growing up was the trips my family went on. Remember, money is a tool meant to be used.

Work with Jacob

I help athletes, entrepreneurs, and executives pay less in taxes, coordinate their financial life, and invest for the long run.

 Moment Private Wealth Introductory Call

Until Next Time, My Friends

Moment Private Wealth, LLC is a Registered Investment Advisor, located in the State of Missouri. Moment Private Wealth provides investment advisory and related services for clients nationally. Moment Private Wealth will maintain all applicable registration and licenses as required by the various states in which JL Strategic Wealth conducts business, as applicable. Moment Private Wealth renders individualized responses to persons in a particular state only after complying with all regulatory requirements, or pursuant to an applicable state exemption or exclusion. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice.