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Mother’s Day & The Mother of All Gifts

mother's day, denver financial planner

Mother’s Day is just around the corner.  If you haven’t started shopping or made brunch reservations yet, take a page out of the rich and famous for ideas to let Mom know how much you appreciate her.


  • Pop star Rhianna in 2012 gave her mom a 5-bedroom house in Barbados.
  • NFL quarterback Terry Bridges’ mom rolls in her pink Cadillac Escalade thanks to his 2014 Mother’s Day gift.
  • Dwayne Wade gifted his preacher mother a church from which she could spread the good word.
  • Leonardo DiCaprio planted a grove of trees in his mother’s honor in 2006.  Well, I’m sure he had it done for him.  I can’t see Leo out there with his 21-year-old supermodel of the week girlfriend actually digging holes for trees.


What can the rest of us do for Mom that’s creative and within a reasonable budget?


mother's day, denver financial plannerBamboo Bath Caddy.  Who wouldn’t want this? $40 at


Basket of pampering lotions and potions – be creative.  Get her something she might not have tried like sheet masks, bath oil, or other newfangled beauty products.


Plan a picnic!  So much more fun than sitting in a crowded restaurant.


Schedule a spa treatment.  My mom and sister and I have had fun at the 5-Star Salt Caves in Denver.  Mom and I did a 50-minute treatment in the Himalayan salt cave and felt like we’d been breathing sea air afterwards.  We also did the ionic foot baths that pull impurities from your body out through the soles of your feet.  It was truly bizarre and disturbing, but so much fun!


Visit a winery together.  Just about every state has a wine industry these days.  Whether the wine is delicious or you’re happy to use the spit bucket, the tour will be different and educational.



Mind over Money with Dr. Alec Baker – Part Deux

Welcome to Part 2 of my interview with Dr. Alec Baker of Peak Living Psychology.  Today we tackle one of my favorite topics of mind and money – the act of consistently outspending income.


Let’s begin


KS:  When people spend outside of their means, what is at the root of that?


AB:  People’s spending behavior is generally related to their core beliefs.  People who spend more than they make are often either in denial of their financial reality or have some plausible reason why overspending doesn’t matter.


For instance, you might have a single income family where the primary earner insists paying for the top tier TV package with all of the bells and whistles because that is their reward for working hard and if they can’t afford that their all of their hard work is for nothing.  To admit that they can’t afford it would be deflating and lead to a sense of failure for that person.


As a result, they refuse to make a different choice and run a deficit on the family credit card each month that leads to truly problematic debt in the long run.  This sort of denial and AVOIDANCE is a common emotional response to an impossible or undesirable situation.


In another example, we can see that a sort of magical thinking about spending can give someone that plausible deniability that what they are doing will be ok in the long run.  Imagine a 30-something couple with two incomes and no children.  They love to travel the world and are both very optimistic about their future earning prospects.  One owns a business that is still growing and has a future earning potential of around $250k per year.  The other has just finished professional training school and expects to be making more year over year for the next five years or so.


These two have lots of optimism, so they take a trip to “Yacht Week” in Croatia that costs $7k per person and they add a stop in Paris for five days that adds an additional $2k per person because, c’est la vie!  They believe they won’t be able to enjoy it in five years because they might have kids and all sorts of other obligations and since the future is bright they don’t think much of the expense.


Even though their future earnings could support spending $18k in two weeks, their current earnings are closer to $125k combined and they have to do the whole thing on credit.  In the meantime, their balances are stubborn and their paying hundreds of dollars in interest payments.


KS:  There you have it.  Overspending your income has lots of reasons and doesn’t make you a bad person.  But, not recognizing the habit and digging yourself into lots of credit card debt or not having emergency savings will have long term negative consequences.


Stay tuned for next month’s installation about characteristics of people with great money habits.


Dr. Alec Baker

Dr. Alec Baker owns and operates Peak Living Psychology – a full service psychological services practice located in South Denver.  Peak Living Psychology offers financial therapy, traditional psychotherapy, and psychological assessment services to the Denver metro area with a focus on helping individuals and families cultivate the best things in life.  More information can be found at

IRAs – to contribute ore not to contribute?

IRAs, Denver financial planning

April 15th is just around the corner and one of the questions your CPA may pose to you is, “Will you make an IRA contribution for 2017 before the deadline?”  And you are thinking, “Should I or not?”


Individual Retirement Accounts (IRAs) come in a couple of flavors:  Traditional or Roth.

Traditional IRA

A Traditional IRA allows you to take a tax deduction for up to $5,500 ($6,500 if you are aged 50 or over) for putting that money in an account for your retirement.  The money needs to be left there until your age 59 ½ or you risk paying an IRS penalty of 10% for early withdrawal.  The growth is tax-deferred, meaning you will not pay taxes each year on dividends and capital gains generated in the account.  When you take the money out at retirement, the withdrawals are taxed at your ordinary income tax rate.


Who wouldn’t want that?  Turns out, you may not be able to take that lovely up-front tax deduction.  If you are eligible for a work retirement plan (even if you choose not to participate – FOOL!), you cannot deduct an IRA contribution if you make over a certain income.  Being subject to IRS rules, those limitations are tiered and complicated to write out, so click here for a handy table from your friends at the IRS.

Roth IRA

The other option you could use is a Roth IRA.  Roth IRAs do away with the up-front deductibility of the Traditional IRA.  In other words, the $5,500 (or $6,500 for you old folks) that you put in a Roth IRA would be the same as putting the money in a savings account from a tax standpoint.


The benefit – and it’s a big one – is that the money then grows tax-FREE so when you take it out after age 59 ½, you pay no income taxes on the withdrawal.


No matter what the tax benefit, you I’m guessing you should be saving more for retirement.  This is especially true if your accountant is telling you that you owe a tax bill.  If you are a small business owner, explore the plans available to you in addition to the accounts described above.


Happy tax season!

Retirement Risk Alert!! Grown Children

grown children, denver financial adviser

There was reader question to a column called The Sweet Spot in the New York Times recently.  A mother was wondering if it is mean to ask her mid-twenties children to move out of the family home and start paying their own bills.


The columnists reacted predictably by telling the parents that by enabling their grown children to live a life of convenience and ease on Mom and Dad’s dime they are robbing said children of the privilege of struggle.  That’s right, struggle is the work that leads to the joy of resilience and self-sufficiency.


Easy for YOU to say


Why is it so easy to write this advice, yet so many are in this trap?  Maybe because parents want to be liked by their kids and making them live with 7 roommates, take the bus, and have a cell phone plan with no data isn’t the path to parental popularity.


Perhaps some hard numbers will help motivate parents to live through the short-term dislike of their kids to get them off the payroll and into a satisfying habit of working for a living.


Here’s an example


Abednego and Gizmo are 65 years old and retired.  They have $500,000 invested and a total of $25,000/year of Social Security.  Using the handy 4% withdrawal rule (for retirees in their 60’s), Abednego and Gizmo’s financial planner tells them their annual spending should stay around $45,000/year total.


This budget should allow raises for inflation, bad market returns, and income lasting 25 years to age 90.


Abednego and Gizmo’s 30-year-old daughter, Mebunnai has just moved back in with them following her divorce.  Suddenly, between paying Mebunnai’s cell phone bill, car insurance, and extra food, Abdnego and Gizmo’s budget has swelled to $50,000 per year.  This is a 25% increase over the suggested withdrawal rate.


Blame the messenger


Their financial planner warns that if this keeps up, they will run out of money in a mere 19 years at the tender age of 84.  Abednego and Gizmo now see the importance of nudging Mebunnai out of the nest and back to financial independence as soon as possible.


Remember, if you don’t want to feel like a bad guy to your kids, you can always blame your financial planner.  Don’t have a financial planner to throw under the bus?  Contact me for a 15-minute consultation to see if there is a fit for working together.

WTF (What the Finance) is Bitcoin? Let’s talk about it

bitcoin, denver financial planner

Welcome to a new recurring feature of my blog called WTF – What the Finance?  Here I will attempt to make understandable the maze of financial jargon we planners love to speak and this week I’m focusing on Bitcoin.

What’s this Bitcoin thing?

So, what’s all the fuss about trading Bitcoin?  Should you be in?  Out?  Over?  Under?  My position in Bitcoin is “over.”  As in I’m over it.


First, some explanation:  Bitcoin is one of many (but apparently the most famous) types of cryptocurrency.  Cryptocurrency can be used as payment for online transactions.  However, there is no central bank or country backing the value of the currency.  No regulation, either.

How can I use Bitcoin?

You can’t use Bitcoin at King Soopers or TJ Maxx.  Yet.  Bitcoin is accepted as payment at over 125,000 merchants, so maybe it has a future as a widely accepted currency and will become a part of our daily lives like the internet and chocolate.  However, a big concern about cryptocurrencies is that you can use it to buy some pretty illegal stuff on the internet.  Use your imagination.

Should I be investing in it?

Why has Bitcoin gotten so much attention lately?  Well, people have been betting that the value of Bitcoin (remember, backed by no government taxation or hard asset) will go up, so they are trading the digital “coins” and driving the price of the currency itself way up.  Any time an investment, term used loosely, goes up 1000% as Bitcoin did in 2017, people are going to be talking about it.


Always remember, what goes up 1000% in a year can likely drop by that amount in half the time.  As of this writing in early February, Bitcoin had dropped below $7,000 from a high of $18,000 just a month earlier.  If you got in at the peak of the frenzy, you have lost a ton of money.  And not even some awesome shoes or a car to show for it.


Agustin Carstens, general manager of the Bank for International Settlements (an umbrella organization for the world’s central banks), described bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster.” The last refers to the energy-intensive process of “mining” the digital currency.*  He said a bunch of other stuff that was negative, but I thought that line was the best.


An acquaintance told me a couple of months ago that she was trading Bitcoin.  She asked me if I was trading Bitcoin, too.  I replied, “No, I’m a financial planner.”



Mind over Money? Discussing Financial Roadblocks With Dr. Alec Baker

alec baker

So many money decisions are not about what we think, but how we feel.  To that end, I’ve enlisted the help of a guest blogger to address some questions around emotions and finances.  Today I present the first of 3 questions I posed to Dr. Alec Baker.


Dr. Alec Baker


Dr. Alec Baker owns and operates Peak Living Psychology – a full service psychological services practice located in South Denver.  Peak Living Psychology offers financial therapy, traditional psychotherapy, and psychological assessment services to the Denver metro area with a focus on helping individuals and families cultivate the best things in life.  More information can be found at



KS:  What are examples of psychological road blocks to financial success?  Is it lack of education?  Fear from a past mistake?  Things our parents did or didn’t teach us about money?


AB:  Psychological roadblocks come in all sorts of shapes and sizes.  Basically, they are unconscious beliefs that lead to habits and choices that prevent us from reaching our goals.  Generally speaking they are NOT a lack of education, but rather feelings that stem from core beliefs about money that get in the way of putting good information to use.  What I’m getting at here is that we all have core beliefs about money (e.g. spending is bad, saving is good) and that we have emotional responses to either living those core beliefs (e.g. pride, calm, self-esteem) or living contrary to them (e.g. shame, embarrassment, anxiety, fear) that lead us to make the choices that we make.


Here’s an example


Imagine that I’m someone with a core belief that spending money is undisciplined and frivolous while earning and saving are the only virtuous choices a person can make.  One day a tree falls on my roof and I have the option to pay my $2000 deductible and repair the whole roof or pay $1000 to patch it.  First, I have that high of a deductible because I always choose the lowest premiums possible– yay low spending!  Second, I would obviously choose the patch option because I’m spending as little as possible and living my core belief that spending is undisciplined.  The trouble is that the patch job ends up being less effective and I get a series of leaks over the next few years that a) end up costing well more than the extra $1000 to repair the whole roof, and b) cannot be covered by insurance because I did not submit a claim.


The insistence on spending as little as possible due to a faulty belief that all spending is undisciplined can lead to choices that bring me higher costs and more spending in the long run.  People may have all of the education they need here to see the most effective long-term, but they are so anxious about doing it that they ignore your advice and do it their way.  In those cases that also might be your last conversation with them.


These core beliefs can be the result of lessons learned from personal experience (e.g. I spent too much on going out and leisure activities and then didn’t have enough for an ER bill) or from family cultures (e.g. depression era parents who never spent any money and made it forbidden because you never know when the next “big one” will hit).


KS:  Stay tuned in April and May for more insight from Dr. Alec Baker.

Why are my bond funds so sucky?

bond funds, denver financial planner

A misunderstanding is that bond investments are not supposed to ever lose money.  In fact, bond funds go up and down like stocks, just not with such extreme highs and lows.


A quick primer on bonds

Bonds are a way for a company or government to get a loan from the public.  Loans are made for a specific period with a set interest payment that is communicated up front. Most bonds are issued in increments of $1,000.


If Walmart wanted to raise money temporarily to buy a new fleet of trucks, it could issue bonds for 5 years paying 4% interest per year.  At the end of 5 years, the bond holders would get their original investment back.  Buying 10 of these hypothetical Walmart bonds would cost you $50,000 and earn you $2,000/year interest until your $50,000 is returned to you at the end of 5 years.


But what if…?

What happens if you need your $50,000 back in Year 3 of the 5-year bond?  Walmart isn’t going to pay you early, so you must go out and see if someone else will buy your bond investment.


You propose to your neighbor that he buy your bonds.  Your savvy neighbor knows that new 5-year bonds are paying 6% interest.  Why would he pay full price for your sad 4% interest bonds?  He offers to pay $45,000 for your bonds and you accept.  You have just lost money on your bond by not holding it to maturity.


Conversely, if you proposed the same transaction to your neighbor and new 5-year bonds were only paying 3%, you could ask for more than the $50,000 because he can’t get better interest now than what your Walmart bond pays.  In this case you’ve made money on your bond purchase.


Transactions like these happen by the thousands every day in the bond market.  This is why individual bonds and bond mutual fund prices go down when there is a whiff of the Fed raising interest rates.


The Federal Reserve now thinks the US economy is strong enough to handle higher borrowing costs, so they are slowly raising the target fed funds interest rate.  This is bad in the short term for bond mutual fund holders because the value of their existing bonds goes down when interest rates rise.


Don’t despair!

Bond funds are constantly getting in new money, so the managers can buy new bonds at the new, higher interest rates.  If you own individual bonds, the short-term swings in valuations don’t mean anything to you as long as you hang onto your bonds until they mature and your principal gets paid back to you by the bond issuer.


We hold bonds and bond mutual funds in our portfolios because they don’t go up and down as extremely as stocks.  Also, when stocks are down bonds are usually up, so they provide diversification.  But that doesn’t mean they never go down at all.


Hold tight, don’t sell in a panic, and talk to your financial advisor about rebalancing your account at least once per year.

Love and Money – The Super-Rich Really Are Different


A movie that came out recently that I really wanted to see was All the Money in the World about the kidnapping of John Paul Getty III.  I probably won’t see it until it’s out on Netflix because all my movie theater experiences are driven by teenage boys (Star Wars, anything Marvel related).


Spoiler alert:  Don’t read ahead if you haven’t seen the movie and still want to.

Known as Paul, the kidnap victim was the grandson of industrialist tycoon J. Paul Getty.  The Senior Getty, although worth untold millions, refused to pay initial $17million ransom.  He finally negotiated the ransom demand down to $3million after receiving his grandson’s severed ear in the mail. He paid $2.2million himself.  This amount was the maximum he could get a tax deduction for.  The remaining $800,000 he loaned to his son, the victim’s father, at 4% interest.


Now, that all may seem pretty cold.  There could be other ways Mr. Getty could have saved money.  For example, he was married five times.  Ex-wives are super-expensive.  Just ask Phil Collins.  But, J. Paul Getty thought that by paying this first ransom, he would be endangering his other 14 grandchildren and encouraging terrorism and lawlessness. *


Here are some other things extremely wealthy people have done for love.  Would these tokens of affection be enough for you to stick around?


Kobe Bryant

After being accused of raping a 19-year-old hotel employee in Vail, Kobe bought his wife (and brand-new mother of his baby) a $4 million diamond ring.  Um, not enough for me to stick around, but Vanessa stuck by her man.


Kendall Jenner

On her 21st birthday was gifted a Rolls Royce by a complete stranger.  A much older man, of course.  I’m sure he wasn’t expecting anything in return.


Jaden Smith

For Mother’s Day gave his mom Jada Pinkett Smith a $500 gold grill to wear on her teeth.  I’ll stick with getting kitchen supplies and earrings from Kohl’s from my kids.**


As you can see, there is a gift for every occasion and money can sometimes get you out of trouble spots.  All the more reason to meet with a financial planner to move toward those (sometimes bizarre) fiscal goals!




5 Cheap Things to Do for Valentine’s Day

valentine's day

Sure, your sweetie wants to be surprised by a romantic gesture on Valentine’s Day.  You know what’s even more romantic?  A partner who is financially stable and saving steadily for the future.  So, how can you be both the dreamy AND smart partner?  Read on for a few inexpensive ideas that will have his/her all starry-eyed for you.


Poster Board Valentine

Buy red poster board and candy bars to stick to it.  Cut out in the shape of a heart.  Use the candy bars as ways to describe your lovely on the poster board.  So sweet!


Hot Chocolate and Ice Skating

Most cities have a winter skating rink that is cheap or free. Bring your own thermos of hot chocolate (spiked or not, it’s up to you) and slide around on the ice, clinging to your honey for dear life.  That’ll warm you up!


Local Tourist

Visit a museum or landmark in your city that you’ve never explored before.


Hidden Love Notes

Hide small notes with candy around the house and let your lovely know that the hunt is on!


Valentine’s Day doesn’t have to break the bank.  Creativity is more fun, anyway!

How Dark Chocolate is Good for the Body…and Maybe Even your Finances!

tam john

Welcome back guest blogger Tam John, Certified Nutritionist!  In honor of Valentine’s Day, I asked her to tell us the scientific benefits of dark chocolate.

From Tam John:

Imagine indulging in amazing food while keeping your wellness factors of looking great and feeling great.  This is the basis of Personalized Nutrition.Here are my top 5 reasons to augment your healthy regimen with a little dark chocolate every now and then.  After all, food is meant to bring you pleasure.

Antioxidant & Flavonoid rich

Antioxidants fight free radicals which cause cellular havoc.   Flavonoids also support cardiovascular and nervous system health.  Studies suggest they may be anti-cancer and improve cognitive function.  You should get most of your flavonoid rich free radical fighting anti-oxidants from fresh, seasonal whole fruits and veggies, nuts, grains, seeds, green and black tea.

Magnesium powerhouse

Magnesium is a necessary mineral that supports cardiovascular health and muscular relaxation.

Good for overall cholesterol profile

Cocoa butter in dark chocolate contains polyphenols said to be involved in cholesterol control; and increased HDL (good) cholesterol.

Small quantities support healthy blood pressure and blood sugar levels.

Dark chocolate is an aphrodisiac

It contains tryptophan, a building block of the feel-good neurotransmitter serotonin; and phenylethylamine, a stimulant related to amphetamine, which is released in the brain when people fall in love.


Choose the highest levels (70% is a good target) of cacao which totes the most benefit of dark chocolate.  As with all good things, moderation makes us appreciate them more.  Appreciation begs great benefits.  Savor each and every decadent bite, if it appeals to you, and indulge in a little dark chocolate now and then.  Like I always say:  Buy the best dark chocolate you can afford!  After all, Valentine’s Day is just around the corner!


Tam JohnTamara’s new book title:  A Fresh Wellness Mindset:  Personalize Your Food Life & Find Your Truth about Gluten is now available on Amazon , through Tamara… and coming soon to retailers.  The book addresses two trending topics in health & wellness:  Personalized Nutrition (because one diet isn’t right for everyone and not all ‘healthy’ food is healthful for everyone); and how to navigate the Gluten Free Movement (easily live life free of gluten if needed/wanted) and reintroduce gluten or other once distressful foods healthfully.   Because Wellness is True Happiness ™



This article is for informational purposes only. It is not intended to treat, diagnose, cure, or prevent disease. This article has not been reviewed by the FDA. Always consult with your primary care Physician or Naturopathic Doctor before making any significant changes to your health and wellness routine.

ALL RIGHTS RESERVED © 2018 EatRight-LiveWell ™ & Tam John  

But how could chocolate help my finances?

Okay, so Tam has you convinced that eating dark chocolate is good for your health.  Would you like to put your money where your mouth is?  Keeping in mind this is NOT stock trading advice, here are a few ideas for investing in chocolate.


First, you could buy stock in some publicly traded chocolate names.  Hershey (HSY), Tootsie Roll Industries (TR), Mondelez International (MDLZ), and Rocky Mountain Chocolate Factory (RMCF) can all be purchased in your online brokerage account.  If you are going to trade individual stocks, you should research the company and decide what your buy price and sell price is before purchasing.


You could also use an Exchange Traded Note that tracks the commodities futures of cacao.  The iPath Pure Beta Cocoa (CHOC) and IPath Bloomberg Cocoa Subindex Total Return (NIB) both track the prices of cacoa.  These are VERY volatile and illiquid investments (meaning the prices swing up and down drastically and there aren’t always willing buyers when you want to sell), so tread carefully.


Any of these investment ideas, just like eating Valentine’s Day candy, should be done in small, well-thought-out quantities, if at all.

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