Market Volatility

In our latest Thimbleberry U episode, we dive into inheriting investments.. Amy starts by differentiating between account types and actual investments. She focuses on the importance of the holdings in an account.

Amy explains tax implications of inheriting investments, especially the step-up in basis, using an example to show how this works.

When evaluating an inherited investment portfolio, Amy's advice is simple: check if the investment fits your needs and how it performs against its peers. She uses direct examples to show how to approach inherited investments, considering risk tolerance and diversification.

The discussion shifts to the emotional side of inheriting investments, like stocks from a company with family loyalty. Amy suggests honoring the deceased in ways other than holding onto their investments. She proposes using the inheritance for family-oriented projects or supporting meaningful causes.

Not changing inherited investments has many risks. These include lack of diversification, mismatched risk profiles, tax inefficiencies, and altered savings needs.

On using inherited investments to support goals, Amy emphasizes clarity in goals and being aware of how they might change with new wealth. She advocates for a balance between saving for the future and enjoying the present.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In our latest episode of ThimbleberryU, Jag and I continue our six-part series focused on the tech sector. We delve into Employee Stock Purchase Plans (ESPPs), a topic particularly relevant to our tech professional listeners. An ESPP is a program allowing employees of public companies to buy company stock at a discounted price, typically through payroll deductions. We emphasize the importance of the discount, noting that not all ESPPs offer this benefit.

We compare ESPPs to 401k plans, highlighting the immediate financial gain from the discounts, which can be as high as 15%. We explain the typical structure of these plans, including offering periods and the mechanics of purchasing shares at a discounted rate. The specifics of these plans, such as the discount rate and the timing of stock purchases, are set by the employer.

Next. we cover the tax implications of ESPPs. While the discount is taxed as ordinary income, the real tax benefit comes when selling the shares. To maximize this benefit, shares should be held for at least one year after purchase and two years from the start of the offering period. This strategy allows gains to qualify as long-term capital gains, which are taxed at a lower rate than ordinary income.

We also explore strategies for making the most of ESPP participation. We advise contributing the maximum amount allowed and discuss the importance of selling shares strategically. We note the risk of stock volatility and the potential issue of being too financially tied to one's employer.

We share a real-life example of a client, who successfully used his ESPP to fund his children's college education and boost his retirement savings. This  illustrates the power of ESPPs as a tool for achieving various financial goals.

Finally, we discuss aligning ESPP participation with broader financial objectives. We stress the importance of understanding one's financial goals and how ESPPs can play a role in achieving them. You should consider your overall financial position and  level of investment in your employer's stock when deciding whether to sell or hold ESPP shares.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In this episode of Thimbleberry U, Jag and Amy Walls from Thimbleberry Financial delve into the intricacies of Roth accounts for high-income earners. Amy begins by explaining the basics of Roth IRAs and their appeal to high-income individuals, particularly due to their tax-free growth and distributions. She emphasizes the importance of Roth accounts in the current low-tax environment and their role in portfolio diversification.

The conversation then shifts to who can benefit from Roth accounts. While lower income brackets are often considered ideal candidates, high-income earners also stand to gain significantly, provided they approach it strategically. She outlines the income limits for Roth IRA contributions, highlighting the differences for single and married filers and the additional contributions allowed for those over 50.

Amy and Jag discuss the SECURE Act 2.0 and its implications for Roth accounts, including the new provision allowing employer matches in 401ks and 403bs to be directed towards Roth accounts, and the delayed implementation of a rule mandating catch-up contributions to be made to Roth accounts, starting in 2026.

The conversation then explores various strategies for high-income earners to maximize their Roth contributions, such as backdoor Roth conversions and after-tax contributions to employer plans. Amy stresses the complexity of these strategies and the importance of understanding their tax implications.

Regarding optimizing Roth investments, Amy advises high-income earners to consider aggressive (but within their risk tolerance) investment strategies within their Roth accounts due to their tax-free nature. She also touches on the importance of regular portfolio reviews and being mindful of tax-efficient investing.

Finally, there are limitations and pitfalls of using Roth accounts, such as income phase-out limits and tax consequences of improper conversions. Amy emphasizes the need for careful planning and awareness of contribution limits and deadlines. We also highlight the tax planning benefits of Roth accounts, including their role in estate planning and the flexibility they offer in managing future tax brackets.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In this episode of Thimbleberry U, Jag and Amy Walls from Thimbleberry Financial discuss the unique financial challenges faced by tech professionals, particularly focusing on equity compensation. The episode is the first in a six-part series dedicated to addressing the financial needs of tech professionals.

Amy highlights three major challenges tech professionals face regarding equity compensation: time, knowledge, and access to accurate and up-to-date resources. She emphasizes that tech professionals often lead demanding lives, balancing intense work schedules with personal commitments, which leaves little time to manage personal finances effectively. This is particularly relevant in the context of 2023, which saw significant layoffs and increased work demands in the tech industry.

The conversation then shifts to the importance of knowledge in managing equity compensation. Amy uses an analogy of baking, comparing the complexities of equity compensation to the intricacies of baking a complex recipe. She points out that while some aspects of equity compensation might be straightforward, integrating multiple elements such as various forms of equity compensation, taxation, and investment options can be challenging.

The third challenge discussed is the need for accurate and up-to-date resources. Amy notes that tech professionals, being problem solvers, often rely on internet research or advice from colleagues, which may not always be reliable or applicable to their specific situation. She stresses the importance of seeking professional financial advice to navigate these complexities.

Amy suggests that while there are tools available to manage equity compensation, simplicity is key. She recommends basic tools like Excel spreadsheets and calendar apps, combined with discipline and familiarity with employer-provided documents, to effectively manage equity compensation.

Tech professionals should seek out financial advisors who specialize in equity compensation. She emphasizes the importance of professional advice in navigating the complexities of equity compensation and achieving financial goals. 

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

Jag and Amy discuss the importance of celebrating financial milestones and the psychological benefits of doing so. Amy emphasizes that acknowledging financial achievements, such as reaching a significant net worth, completing estate planning, paying off a mortgage, or achieving retirement goals, is crucial for several reasons.

First, celebrating these milestones motivates individuals and gives them a sense of accomplishment. It acknowledges the hard work and dedication that goes into achieving financial goals. This recognition acts as a powerful motivator to continue striving towards financial aspirations.

Secondly, celebrations reinforce positive financial behaviors and habits. When people see the results of their sound financial decisions, it encourages them to keep making wise choices. This helps maintaining disciplined saving, investing, and planning for the future.

We also cover the psychological benefits of celebrating financial successes. These celebrations boost self-esteem and confidence, validating individuals' financial decisions and choices. This validation enhances their sense of security about their financial future. Moreover, celebrating these milestones helps develop a positive money mindset, which is essential for long-term financial success.

Celebrations also create a sense of fulfillment and well-being, allowing individuals to reflect on their progress and appreciate how far they've come. This reflection can significantly reduce stress and anxiety related to financial matters. Additionally, these celebrations foster a sense of gratitude and happiness, encouraging a positive outlook that can influence other areas of life.

Amy suggests various ways to celebrate these milestones, from simple dinners with loved ones to more elaborate events like special trips or charitable donations. The key is to choose a celebration method that aligns with one's values and is appropriate for the milestone.

We should set both big and small financial goals and to celebrate these achievements as they come. These celebrations are not just about acknowledging progress but also about reinforcing positive financial behaviors. 

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In this final episode of ThimbleberryU's six-part series,  Jag and Amy delve into the critical topic of legacy and estate planning for healthcare professionals. Amy points out the potential disputes and uncertainties that can arise without proper planning, as seen in the cases of Prince and Aretha Franklin. Legacy planning ensures that assets are distributed according to one's wishes and helps in leaving a lasting impact, whether it's for loved ones, charitable causes, or the healthcare practice itself.

Prince's estate faced a lengthy legal battle due to the absence of a will, despite having a Revocable Trust. Similarly, Aretha Franklin's lack of a will or trust led to potential disagreements among her heirs and increased estate taxes. These examples highlight the consequences of not having proper estate planning documentation.

The first step in legacy planning is setting clear expectations with loved ones and ensuring that one's will or trust is legally sound and reflective of their desires. This helps avoid misunderstandings and conflicts.  Amy compares trusts with wills, explaining the benefits of trusts, such as privacy, probate avoidance, control over asset distribution, and safeguarding one's practice. Trusts, unlike wills, remain private and allow for direct distribution of assets to beneficiaries without court intervention. Trusts also provide more flexibility in how assets are distributed and can be particularly useful in protecting a healthcare practice.

An unfunded trust, like Prince had, lacks assets, which are necessary for the trust's instructions to apply. Other common mistakes in legacy planning, such as failing to update estate plans regularly and not considering tax implications, as seen in the cases of Philip Seymour Hoffman and James Gandolfini.

We aren't all gloom and doom today, however. Amy shares success stories of healthcare professionals who effectively planned their estates, ensuring smooth transitions of their practices and creating lasting impacts through charitable foundations or scholarships. The power of legacy planning and the importance of organizing financial affairs benefits loved ones and the profession.

To get in touch with Amy and her team at Thimbleberry Financial, listeners can reach out by calling 503-610-6510 or visiting thimbleberryfinancial.com.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

Welcome to episode 100 of ThimbleberryU, where we're diving into the integration of financial planning and wealth management at Thimbleberry Financial. Amy and Jag are also reflecting on the journey of the podcast over the past four years.

Amy emphasizes the importance of combining financial planning and wealth management. Financial planning is not solely about investment management.She highlightsthe various elements involved, such as goal identification, cashflow, debt management, insurance, real estate, education, retirement, estate planning, and taxes. All of these components are like pieces of a puzzle, with each piece interlocking to create a complete financial picture.

In discussing the challenges of managing multiple financial goals, Amy provides a real-life example of someone wanting to buy a new home while planning for early retirement. She explains how the integration of financial planning and wealth management allows them to navigate complex situations, ensuring that all financial pieces work together harmoniously.

Jag raises the question of what happens if a client prefers one service over the other. Amy emphasizes the importance of educating clients and guiding them toward making informed decisions that align with their financial goals. If a client remains set on one specific approach, Amy is open to referring them to other advisors who may better suit their preferences.

Costs in financial advisory services vary widely, and Amy clarifies that Thimbleberry Financial has a transparent fee structure, charging separately for financial planning and wealth management. She highlights the value of saving clients time by integrating these services, as it allows for a one-stop, comprehensive approach to financial decision-making.

Jag shares his own experience transitioning from a wealth manager to an advisor like Amy, appreciating the ability to have more encompassing conversations about the implications of various financial decisions. Amy adds that Thimbleberry Financial's ideal clients are retirement-focused professionals in healthcare and tech sectors, who value financial independence and holistic financial planning.

Regarding client communication, Amy explains Thimbleberry's team-based approach, with dedicated service teams working closely with clients to ensure smooth and efficient communication. The episode concludes with a shout-out to Sara, Amy's Chief of Staff, who plays a crucial role in podcast production and client relations.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

Today, we're delving into a crucial topic as part five of our series on healthcare professionals – protecting your assets and your family.

Amy explains that protection isn't just about insurance, although that's a significant part of it. It encompasses various forms of insurance like life insurance, disability insurance, long-term care insurance, and more. For healthcare professionals, malpractice insurance is also a critical component.

Amy then explains the different types of accounts where your money is held, and the varying levels of protection they offer. Amy emphasizes that under the Employee Retirement Income Security Act (ERISA), employer-sponsored retirement plans, such as 401(k)s, enjoy robust protection against creditors, even in bankruptcy situations. State rules come into play for IRAs, and their protection can differ significantly, so understanding your state's regulations is vital.

The discussion then touches on IRAs, and Amy explains that while they have some federal bankruptcy protection, there's a cap on this protection, which can vary depending on factors like inflation adjustments. If you're transferring assets from a 401(k) to an IRA, the key is not to commingle rollover assets with contributions, maintaining the federal protection.

The conversation shifts to traditional insurance types like life insurance and disability insurance. Amy distinguishes between term and permanent life insurance, highlighting that term insurance is cost-effective for temporary needs, while permanent insurance is more expensive and intended to last a lifetime.

On the topic of disability insurance, Amy stresses the importance for healthcare professionals, as the risk of disabilities affecting their ability to work is substantial. She also points out that disability insurance can become more expensive with age, and it's statistically more expensive for women.

Really, employees in any field (even podcast production) can face financial challenges if they become unable to work, emphasizing the need for disability insurance.  

Protecting your assets also involves considering long-term care insurance, ideally by age 60. Planning early is key, given the time required to assess care needs and preferences. Amy advises evaluating other assets that could cover these expenses and whether competing interests, like leaving assets to family members, affect your choices.

We finish up with malpractice insurance, which is crucial for healthcare professionals, and the significance of umbrella insurance to protect against potential liability claims, especially for high-income individuals. 

For more, reach Thimbleberry Financial 503-610-6510  or at https://thimbleberryfinancial.com/

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

For many of Thimbleberry Financial's clients in the  startup and tech communities, Incentive Stock Options, or ISO's, are a hot topic.  Today, Amy Walls and Jag break them down.

Simply put, an ISO is a type of employee stock option that comes with tax advantages.  No income tax is due when options are granted or exercised. Also, profits from the sale of ISO's can be taxed under more favorable long-term capital gains rates, provided certain conditions are met.

In addition to those restrictions around time of holding, Amy also explains the Alternative Minimum Tax, or AMT.  When do you pay AMT, and what AMT implications should you consider when exercising ISO's?

We also walk through vesting, expiration, and post termination.

Being proactive and creating a plan is key in this realm; there are certain decisions and actions that cannot be undone.  Amy explains the $100k rule and the Rule of 65, and she cautions against being overweighted in company stock, particularly in the context of market volatility.

For more information contact Amy Walls and her staff at 503-610-6510 or click here Thimbleberry Financial.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

In the fourth of our six-part series specifically for Healthcare Professionals, Amy Walls of Thimbleberry Financial gets into the tax complexities facing those in this field.  These factors can include higher income, sometimes from multiple sources (and across borders), capital gains, and even taxes on tuition benefits for those at teaching hospitals.

Amy walks us through the hurdles of having separate business entities, sometimes earning income in different countries with different rules.   Regardless, its critical to keep good records and often advantageous to work with  a Certified Public Accountant, or CPA.   This can be helpful with understanding deductions and what you are eligible for.

Amy's specialty is retirement planning.  Because traditional retirement plans have dollar limits, those limits can often represent a smaller percentage of income for higher wage earners.    These individuals may want to look into other retirement vehicles, such as 457 plans and saving into nonqualified, taxable investmets.  We dive into the latter.

Amy and Jag wrap up, we cover a few other tax strategies, including tuition benefits, student loan forgiveness, and chartiable giving.

For more information contact Amy Walls and her staff at 503-610-6510 or click here Thimbleberry Financial.

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.