How to use storytelling to inform your financial future

By Liliya Jones

Originally published on onmogul.com

I’m not an artist, writer or creative in any traditional sense of the word. In fact, most people regard my work as the opposite of that - I run operations at a financial firm. However, it so happens that I heavily rely on a creative process in my daily work - storytelling.

From our investment committee | Change how you think about bull market investing

Many months of stock market highs have led investors to ask, “How long is this going to last, and when should I get out?”

Intuition tells us that after such a long period of sustained performance we might be due for a correction. This instinctive thinking also occurs in baseball, when a batter is “due” for a hit after a prolonged string of hitless at-bats, and in gambling, with the belief that you might be “due” to see the ball land on black after a string of red spins at the roulette wheel.

From our investment committee | A bowl of cashews and the nobel-prize lesson of self control

Richard Thaler was recently honored with the Nobel Prize in Economics for his pioneering work in human behavior, specifically for establishing that people are “predictably irrational.” But the story of Thaler’s first insight into what would become behavioral economics and finance is famous and instructive.

Team Modernist on our January LA trip, Recent Press, and X-Ray Spex

Modernist is coming to LA!

Team Modernist will be in sunny Los Angeles January 22nd - January 28th. If there is anybody in LA that you think we should meet - let us know! We are always on the lookout for fabulous new clients and collaborators, especially CPAs who work with creatives.

To learn more about who may be a good fit for us, take a look at the work we do.

Why we have to talk to our families about death

By Liliya Jones

The holiday season means pie for breakfast, lunch, and dinner (just me?) and, for a lot of people, spending the most time they get with their families all year. This year, once the carbs and turkey get everybody appropriately sedated, I propose that you try something a little unexpected: starting a conversation with your family about aging and end of life.

FROM OUR INVESTMENT COMMITTEE | The Risk You Need vs. The Risk You Can Afford

By Meir Statman

Just as there is a difference between being able to afford a luxury car and actually buying a luxury car, there is a difference between being able to afford high risk investments and choosing a high-risk investment portfolio. Indeed, there is much comfort in knowing that we can afford a luxury car while enjoying a modest one, and there is tranquility in knowing that we can bear high investment risk but only need a portfolio with low or moderate investment risk.

Team Modernist on Funding our Heroes, Q3 Investment Insights Webinar, and David Bowie

Modernist’s next quarterly Investment Insights webinar is coming up fast!

In 25 minutes, we’ll dive into what investors need to be considering this quarter, with a focus on investing in a continuing bull market that shows limited volatility and what it means for your investment decisions. At the end of the presentation we’ll dig deep into a visual review of Q3 performance across asset classes.

FROM OUR INVESTMENT COMMITTEE | Q3 2017 IN PERSPECTIVE

Modernist’s Asset Class Investing portfolios are strategically invested with a focus on long-term performance objectives. Portfolio allocations and investments are not adjusted in response to market news or economic events; however, we evaluate and report on market and economic conditions to provide our investors with perspective and to put portfolio performance in proper context.

Global stock markets delivered robust gains in the third quarter 2017 as volatility fell in the U.S. and the dollar depreciated, supercharging International returns.

Giving for Our Birthday

Modernist Financial turned two last month! It’s hard to believe it’s been two years since we set out to realize our vision for a values-centric wealth management firm. We’ve enjoyed every minute of it and are delighted by the success we’ve seen.

Now, as then, we are driven by our desire to help creatives structure their wealth around their values. We have also worked to clarify our own values, and are honoring them as we celebrate our birthday.

Why these two retirees are spending their life farming and painting, instead of worrying.

When Sam came to us, she knew it was time to retire from long hours as an architect, but she had no idea where to begin.  She dreamed of moving to the country and living a slower life full of the things she loved: painting, cooking and caring for her relationship.    

Her partner, Kelly, had managed their investments, but 2008 really spooked her.  She didn’t cash out but she spent many sleepless nights worrying whether she was making the right choices for their future.  Kelly was clear that she didn’t want the responsibility of managing their portfolio once they retired.   

Together, we clarified a vision of their life in retirement and implemented an investment portfolio designed to last the rest of their life.  Sam gained a deeper understanding of their investments and Kelly was happy to delegate.  We worked with their CPA to minimize taxes by understanding their income need and distributing appropriate amounts from their IRAs, Roth IRAs and taxable investments.  In the absence of heirs, we aligned their financial plan with their desire to give. In collaboration with a community foundation, Sam and Kelly created a Donor Advised Fund, a philanthropic structure that will outlive them.   

They enjoy checking in at our semi-annual meetings, to review their plan and portfolio.  This leaves Sam free to take art classes and Kelly to focus on growing her famous heirloom tomatoes.

Establishing deep communication around financial goals after receiving an inheritance.

Marc and Robert are in their 40s and raising two teenagers with college on the horizon. Robert’s mother recently died from cancer and the whole family is grieving. Robert received an inheritance that felt heavy with grief. When they came to Modernist, they realized they had never established deep communication around their financial goals and values. In the past, their differing financial philosophies and spending styles had resulted in tension and stress for the whole family. They had always been rigorous savers with a significant portfolio for their age, but much of that behavior came from fear rather than intentional planning. After Robert's inheritance, their portfolio quadrupled yet they felt lost and overwhelmed.

We dug deep to uncover their individual money stories that had led to strained conversations about money. They are now in regular counseling to help them grow together while experiencing transition. This work informs their financial planning, as they cope with the family's loss, an empty nest in a few years and career concerns that we discovered in our initial conversations. We implemented a cash flow structure that helped them prioritize and make decisions together, automated bills and savings and created a sense of permission around discretionary spending. Our portfolio management let them focus on their careers knowing that some of the best minds in finance and academia direct their portfolio decisions.

Today, they make financial decisions together, whether vacation spots, funding their kids’ education or their own retirement dreams. The inheritance no longer feels like Mom’s money, but rather part of the financial engine that will fund their early retirement after the kids graduate.

How financial life planning helped this entrepreneur balance a fast-growing business and family

Diana’s design agency was taking off: 200% growth in year two, international awards and tons of press. It seemed ridiculous to complain, yet her life felt chaotic as she juggled her fast-growing business, dreams of motherhood and home-ownership, and an occasional date night with her often-traveling husband.

We worked with her and her husband to understand their aspirations for their careers, family, home and relationship with money. Then we mobilized a team around their vision for growth and a stable home for their new family.

We coordinated quarterly meetings with her business team (CPA, banker, bookkeeper and Modernist Financial) to provide simple tools that show the business’ financials at a glance. Her new personal banker manages the cash flow and lending of the business and the family.  Her new accounting firm manages her business’ books and provides timely tax advice in her quarterly financial meetings. An HR firm stepped in to assist with hiring key employees and implementing best practices. Modernist helped automate the structure of her family’s cash flow and investment portfolio to make sure their bills are paid and they are saving for emergencies and retirement each month.

As a team, we give Diana the information she needs to feel confident in her business decisions so she can make mental space for her personal goals.