What We’re Thinking

To help relieve chronic hip pain, I had an epidural yesterday.

If you aren’t familiar, an epidural is an injection of medication – often and in my case, a steroid – into the area around your spinal nerves to relieve pain in some part of your body.

I’d had one before – it wasn’t a life highlight. I recalled some pain during the procedure, and a short span of pain relief after. But a second epidural had been recommended by a doctor, and I figured it made sense to try again, as a complement to other physical fitness stuff like daily stretching and pick-up basketball I do regularly.

I arrived at the pain clinic, answered some routine questions, and switched into a gown and padded socks. A doctor came in, and I asked for a few ibuprofen, if they had any, since I hadn’t taken any at home. The doctor, young, probably not too far out of med school, told me they don’t hand out medicine. They weren’t a pharmacy. It was funny, sort of – I already felt apologetic for asking a “dumb” question, for not knowing an unwritten, unspoken rule of the clinic.

The doctor walked me into the operating room. Bright white light. A half-dozen people quietly playing their roles. I was shown a bed, told to lie front-down, face in a pillow, mask on. And from there, the two doctors – one a senior physician, the other the trainee – performed the procedure.

My experience was … well, let’s just say, I won’t be signing up for my third epidural anytime soon!

But I’m sharing a bit about the process surrounding the procedure because I noticed some important parallels between being a health care patient and being a financial advising client.

As a patient, and frequently I think as a client too, you are inherently vulnerable. You need help. You’re putting yourself in someone else’s hands. You don’t know what you don’t know, and you might be wary of asking “dumb” questions, or too many questions, or not the right questions. You’re reliant on the practitioner’s skill, their attention to detail, their prudent decision-making. And even with a routine procedure, the outcome is uncertain. In a health care setting, with sick people and doctors and nurses in scrubs and masks all around you, one’s mortality comes to mind. This can all feel scary!

My own sense of vulnerability yesterday was exacerbated by the doctors’ dialogue. They muttered quietly behind me. It was mostly technical. There was very little context-setting.

I was hoping for a roadmap, some ongoing guidance – “in a few seconds you’re gonna feel a pinch, then something on your right side” or “we’re about halfway done” – and bracing myself, a sense of when the pain of the injection might be at its worst.

Instead, I felt isolated in my thoughts and agitation.

Undoubtedly, for many clients in the world of wealth management, I could imagine the process feeling similarly challenging and intimidating. Ours is an industry populated by practitioners who so often use technical jargon where everyday language would suffice. There’s often a huge knowledge imbalance between advisors and clients. Not to mention more structural imbalances of gender, race, class, ethnicity, and language gaps. All of these can feel dis-empowering and nerve-wracking for patients and clients alike, and make someone want to run for the door.

My experience in a hospital gown and face mask and padded socks hit me with a jolt of empathy.

As experienced practitioners in the course of our routine day-to-day, physicians and advisors alike are always at risk of losing this crucial sense of connection with the client (or patient).

It’s our job to always be present with and for our clients, wherever they are in their life’s journey. For some, the language of investments and financial decision-making is like a native tongue. But for others, many others, it can be a sweaty-palms roller coaster ride, where the ride operator is speaking Latin!

At Park Piedmont, we’ll always work hard to stay focused on the human experience of being an investment/financial advisory client – wherever that lands for you, our clients. And if you ever feel like we’re not quite getting it, we welcome your feedback. It will help us, and we hope in the process, help you, as well.

—

Read “Being a Patient” in the Piedmont Exedra.

We are excited and gratified to introduce our first book Thinking About Investing: Two Decades of Reflective Commentary on Markets and Money. We would be delighted to send you a copy (or copies), either electronically or in hard copy. Our treat. Just let us know what you prefer.

When we first started to contemplate this project, back in the fall of 2019, we intended it as a capstone present to celebrate the 80th birthday, in October 2020, of our dad and business partner, Vic Levinson.

In that initial vision for the book, we imagined assembling the many Monthly Comments Vic had written over the prior two decades into something bound and memorable. It would be a surprise. Something to put on a shelf. Maybe a coffee table.

Alas, book projects have a life of their own.

Certainly, there was a logic to compiling this archive and handing it off to Vic, a singular gift at a life milestone.

But the more we dug into this older material, the more we felt that, while written initially for a modest audience of clients, family, and friends, it had a wider resonance. Because at the core of all this writing was a thorny question, one that Vic, a clear-eyed pragmatist, wrestled with for decades: how can people survive – and hopefully thrive – in an uncertain world?

At one level, this sounds like the trailer to a sci-fi movie.

But, at another, it’s the drumbeat of all our lives, and of our work at Park Piedmont.

That to us is the bigger story to share. The world is uncertain. The future, unknowable. Risk abounds. But we can still make intelligent, thoughtful choices – informed by our goals, our priorities, and our values. Not hiding from risk – but not being polyanna-ish about it, either.

Back in 2020, we envisioned the book as a surprise gift – until we realized, what a waste, Vic is right here, a phone call away, and why not benefit from his guidance on what to cut and what to keep. So Vic jumped in to lend a hand.

The book really was a family affair. We enlisted Jane, our mom, Vic’s wife of 50+ years, boasting a voracious appetite for reading, to review the manuscript. Her layperson’s point of view was crucial. Nick’s wife, Julie, was an early contributor, reviewing the Comments and sorting essay topics by theme. Tom wrestled with structure and storyline. Nick and Nate reviewed and revised. We had terrific ongoing support from our Director of Marketing and Education, Corenna Roozeboom, and eventually, from Corenna’s husband, Schuyler Roozeboom, who designed the cover and pages.

We were still working on a final draft when Vic died last May 28.

We think of the final product as a fitting tribute, an acknowledgement of all his hard work and open-minded curiosity. And, last but not least, as a token of our gratitude. We hope you enjoy it.

While we can share copies with you – again, either hard copy or electronic format – Thinking About Investing: Two Decades of Reflective Commentary on Markets and Money is also available for purchase on Amazon. All profits from the sale of the book will be donated toward organizations teaching financial literacy and empowerment in Oakland and Chicago.

Although Park Piedmont focuses primarily on providing investment advice, our advisors also assist clients with broader financial planning work. Financial planning is the process of evaluating a client’s financial situation and developing a roadmap to help them meet their short- and long-term financial goals.

The CERTIFIED FINANCIAL PLANNER™ designation is one recognition of expertise in financial planning. A number of our Park Piedmont team members hold this certification, and I am currently working toward becoming a CFP professional as well. We thought it might be interesting for you to get a look “under the hood” of the CFP certification process, while I’m going through it.

There are four requirements for attaining a CFP certification, which are known as “the four E’s”: education, exam, experience, and ethics.

The education component involves taking several courses that each cover a specific area of financial planning. The topics covered in the coursework include investing, retirement planning, estate planning, insurance, income taxation, behavioral finance, and more. Depending on the educational program, each course usually takes about two to four months to complete and is followed by a test that must be passed to move on to the next course in the sequence.

Once the education piece is completed, the candidate begins studying for the official CFP exam, which integrates knowledge from each of the educational courses. The exam consists of 170 questions and is taken in two three-hour segments.

Next, the CFP Board requires that candidates have 6,000 hours, or approximately three years, of experience engaging in some form of financial planning work. This can include one or multiple aspects of putting together a financial plan, from gathering client information to identifying their needs and goals to implementing plan recommendations.

Finally, the ethics requirement involves signing a declaration, attesting that a candidate will adhere to the CFP Board’s Code of Ethics and Standards of Conduct. These documents specify CFP professionals’ duties to their clients, employers, etc. and outline what it means to act ethically in the context of financial planning. A primary emphasis of the Code of Ethics is that CFP professionals have a fiduciary duty to their clients, which involves acting in the client’s best interest, avoiding conflicts of interest, and maintaining client confidentiality. We at Park Piedmont have served our clients in a fiduciary capacity since our founding – so the expectations for CFP professionals are closely aligned with our own. Due to all the requirements and steps in the CFP certification process, it typically takes about three years to become certified, assuming the experience piece is completed concurrently with the education component.

Between the required months of studying, years of practicing and applying knowledge, and stringent ethical standards, the CFP certification process prepares advisors to craft plans that are individually tailored to a client’s needs and goals. Our colleague Sam Ngooi, who spent two years studying for the CFP exam during evenings and on weekends, and received her CFP certification last summer, told me:

“Having knowledge in each of the CFP subject areas enables me to put together the various puzzle pieces of a person’s financial life and help them develop a plan that is holistic and comprehensive. And because clients entrust us with details about their lives and their money, CFP Board’s stringent ethics and education requirements are also important for building trust and providing clients with peace of mind. Not everyone in the financial service space is required to put a clients’ best interest before their own, and it’s meaningful to be able to say that we do.”

Personally, I decided to begin the CFP certification process because I knew I wanted to pursue a career in the financial services industry, but I felt I lacked much of the knowledge I would need to be successful. I had majored in Economics in college, but the classes I took focused on theoretical principles and models, as opposed to real life applications and personal finance. My classes certainly did not touch on anything related to investing, a topic I was particularly interested in learning about. Straight out of college, I worked at an insurance company for about two years, so that was the only financial planning topic I felt I had a strong grasp of going into the CFP certification coursework.

I started the education component of the CFP certification in January of 2022 and am currently almost done with the final course. I went into the process with the most excitement about the investment and retirement planning courses. I believed that these would not only be the most interesting topics, but also the most practical for my role at PPA, and in many ways that has been true. And although I wasn’t as excited for the courses on estate planning and income taxation, I found those to include some of the most engaging material. For example, during the income tax course, I realized that income tax is at the core of what PPA does, and a person cannot advise on any investment or retirement matters without a deep understanding of how the US income tax system operates. I also found the section on behavioral finance, or the study of investors’ psychological biases, to be particularly fascinating because it presented a more “human” side of financial advising that I had not previously encountered.

Overall, I have found the CFP certification process to be vital in my day-to-day work at Park Piedmont. It has provided me with a range of very specific financial planning knowledge, like how to calculate a client’s required savings rate to meet a specific goal and the tax implications of selling various investments, as well as more general financial topics, like the tools of monetary and fiscal policy and the factors that impact one’s credit score. I plan to take the exam in July of this year, and I have about one year of experience to go before I can become officially certified.

CFP certification is a significant time commitment and has taken up many of my weeknights and weekends since the start of 2022. But I have learned more in that time than I ever thought I would. Even after I complete the CFP certification process, I plan to continue learning about investing and behavioral finance, along with many of the other topics the CFP certification has covered.

—

Read “Is Your Financial Advisor a CERTIFIED FINANCIAL PLANNER™” in the Piedmont Exedra.

Moving to a new home when we were 38 weeks pregnant wasn’t ideal, I’ll give you that.

But then our moving truck’s engine spontaneously caught on fire and exploded. Nearly everything we owned — packed Tetris-style onto that truck — was gone. We hadn’t planned for that.

It was a full 24 hours before my husband pulled out a chair and asked me to take a seat to deliver the news. The plan had been to move out of our condo and into a new one a few days later, and we were staying with family in the interim.

I remember him starting with something along the lines of, “The important thing is that everyone is safe. We’re safe, our baby is safe …” My heart raced. What happened?!

I let out a loud, maniacal cackle immediately after he told me we were essentially possession-less. What’s that sound? I wondered. Oh! That’s coming from me. The laughter became more unhinged with each passing moment. “You can’t make this stuff up,” I gasped as tears of laughter streamed down my face.

Equally surprised by my reaction as I was, he took a slow exhale, shook his head, and laughed. “No,” he agreed. “You can’t.” I continued to laugh uncontrollably. I couldn’t stop. And then, suddenly my laughter turned into sobs.

Greetings and Happy New Year!

Some 4,000 years ago, the Babylonians rang in the new year by making promises to pay debts and return borrowed farm equipment. Since then, people across the globe have rung in the new year with vows to make improvements in their lives. Like magic, the stroke of midnight sends folks scurrying toward the shiny, hopeful promise of a fresh start, leaving the tattered old year behind. As they say: new year, new me. Right?

Probably not. Eighty percent of people who make new year resolutions will abandon them by mid-February.

Not to be all doom and gloom in our first newsletter of the year, but it’s hard to deny we’re overdue for a fresh approach to new year goal-setting. For starters, let’s nix the idea that a trip around the sun calls for a complete identity reinvention.

Instead of resolutions, I’m trying something new this year by choosing some guiding principles, or intentions. Intentions feel kinder, less black-and-white, and more easily woven into the fabric of daily life.

Maybe you skipped the resolutions this year or haven’t gotten around to making any yet. Maybe you’ve already broken a few. Everyone’s situation is unique, but hopefully these six intentions offer a nugget of inspiration as we settle into the new year. And, since this is Life with Money, there are suggestions for practicing each intention in one’s financial life.

1. Reflect

As one roller-coaster year loops into another, slowing down can prove challenging. This year, I’m catching my breath by carving out time to reflect, and I invite you to join me. Let’s start by taking a moment to regroup and review: Where have we been?  Where are we going?  What matters the most?  How might we get there?

LWM: For your financial life, this is as good a time as any to reflect on your game plan. Have your goals or timelines changed?  Are there new priorities on the horizon to prepare for?  (A ‘yes’ is a sign you might be due for a check-in with your advisor.)

2. Savor

Daily walks around the neighborhood are a new and beloved pastime in my household. My partner has a keen eye for urban wildlife and unabashed love of snow. Each walk together is a reminder to delight in the everyday and to stop and smell the (actual) roses. These little mindful moments are an opportunity for gratitude and a perspective shift—I’m hoping for many more this year.

LWM: No need for good walking weather here; savoring life with money can be as simple as enjoying and taking stock of the things we already have. Noticing that crunchy apple or flipping through that family vacation album helps us appreciate the ways we’ve spent our money and helps us be more thoughtful about future spending.

3. Invest

This year, PPA team members are investing their time in various pursuits. Leslie keeps a daily calendar reminder to walk outside and tend to her plants, while Nate sets aside time each night to study for the CFP® exam. Amanda is carving 15 minutes of “me time” out of each day to read, meditate, etc., while I’m joining a weekly watercolor class at our community art center. By committing to small habits, we’re finding ways to invest in our interests, selves, and wellness. Just like invested dollars, our invested time and effort will compound throughout the year.

LWM: There are plenty of ways to practice financial wellness. Perhaps that involves bumping up retirement contributions or paying off lingering debt. Maybe it’s taking time to review your employee benefits or read up on a financial literacy topic that feels intimidating and confusing. Whatever this looks like for you, consider the benefits of compounding, where even small steps yield meaningful dividends over time.

4. Simplify

Life is short and the to-do lists are long! If life’s regular jumble of tasks, calendar events, and important documents wasn’t overwhelming enough, the new year brings a wave of seeming “musts,” insisting that we adopt a new meal plan, exercise regimen, or 21-day system in hopes of any happiness this year. Where to begin? This year, I’m focused on reducing complexity and parting ways with systems that aren’t working (and keeping ones that do).

LWM: First, it helps to tackle tasks a little at a time. Maybe it’s the thing you dread most, or one that motivates you to take on more. Some suggestions from our client service team:

• Roll over a former retirement plan
• Update an old address or phone number
• Send back that form you’ve been meaning to sign
• If your goal is to save more, why not set up automatic transfers to take this task off your plate and mind?

This can also be an opportunity to review your budget and find areas where spending less might do. Alternatively, consider taking a step towards decluttering your financial life (e.g., signing up for electronic Schwab statements or closing an old account). After all, a year of simplifying can also be about reducing worry and stress, too.

And while we’re finding systems that might work, set up an accountability buddy to check-in when you need the extra nudge. We can help with that.

5. Flow

The world is wild and unpredictable, that much we surely know by now. Fellow worriers know it’s hard not to lose sleep over the unknown. This year, let’s work on controlling what we can  and letting the rest go. In building a stable foundation, we’re better able to embrace change and roll with the punches, knowing we’ve prepared as best we can for the worst. It also helps refocus our attention on the things within our control.

LWM: Take some time to review your plans for the unexpected. Confirm account beneficiaries (and estate planning documents, if applicable) are accurate and up to date. Review insurance coverage to ensure coverage amounts are appropriate, beneficiaries are updated, and payments are current. Do a gut check of your emergency fund amount and savings rate, and how comfortable you’d feel relying on it.

6. Share

When we share our time, resources, and ideas with others, we’re reminded that we have enough of these things to fill our cup and then some. The pervasive feeling of scarcity and “never enough” can seep into one’s spirit, so the opportunity to give to others can shift our thinking into one of abundance. Plus, practicing generosity and thoughtfulness towards others feels good! On a deeper level, sharing can also be about connections and opening up to others. For some, this might mean catching up with an old friend or setting up a standing Zoom date with a family member. For others, it’s having a conversation about money that requires a little self-reflection and vulnerability. At PPA, sharing is about finding more ways to engage in conversations about money in ways that resonate for us and our clients.

LWM: Consider the ways you’d like to share your time, resources, or wisdom this year. It can be as small as buying coffee for the person behind you in line or preparing a meal for a friend going through a tough time. Maybe you decide to make charitable donations, set up a Donor Advised Fund (DAF), or volunteer your time to a cause that’s meaningful to you. Perhaps you help start an account for a younger family member and spend time imparting the valuable financial lessons and skills you’ve collected over the years. Better yet, what if this year, your family explores charitable giving and volunteering as a group, finding new ways to connect and express values together?

Whether you decide on an intention or a goal, here’s a suggestion: pick one, write it down, remind yourself frequently, and let your year unfold. Remember that progress, not perfection, is the goal.

We can do this. Are you with me?  Wishing a happy new year to everyone.

—

Read “6 Intentions for Life & Money in the New Year” in the Piedmont Exedra.

One recent, unseasonably mild late afternoon, I hopped on my bicycle toward my regular mid-week basketball game. A main nearby boulevard has a bike lane, and heading out, I felt great. A comfortable breeze. A nice, easy pace.

As I pedaled, I could feel, over my left shoulder, an approaching presence. I turned to look, and what I saw was, candidly, pretty humbling. Steadily gaining on me: an older man, mid-60s, wearing a canvas raincoat and matching fedora and riding a simple 3-speed. He had “professor” written all over him. Notwithstanding his academic garb, ho-hum bike, and (ahem) seniority, he was pedaling comfortably and still passing me easily.

My immediate reflex reaction: you can’t lose to Mr. Chips! Go faster, pump your legs harder. And for a moment, I did.

Until I asked myself, what are you doing? An exceedingly dapper older guy passed you – so what? Just because he’s going faster (while looking better) doesn’t mean my ride needs to become a sprint. So I took a breath, and watched him pedal away.

It is surprisingly easy for our financial lives to follow a similar pattern. You’re on your own trajectory when suddenly, some new thing emerges, or your neighbor brings home a [fill in the blank], and instinctively, you register yourself in a race you never intended to sign up for.

At Park Piedmont, one important role we play as your advisors is to help you discern your goals, your timeline, and your values, then keep you focused on reaching them. Our financial lives are not a competition – not with other people, and not with some other, idealized version of ourselves. We don’t need to race anyone else.

As we say farewell to 2022 and look ahead to the new year, we thank you for the opportunity to work together and look forward to continuing to be your trusted advisors.

While we can’t predict what the new year will bring, we can share one coming attraction. Early in the new year we will be releasing our first Park Piedmont book on investing. We have been working on this project for several years. It has been a real labor of love, and we can’t wait to share it with you.

Wishing you and yours a happy, healthy new year.

For those of us fortunate enough to have the interest and financial capacity, the end of the year is often the time to make charitable gifts. Many of you contribute to schools you attended and local non-profits, and those gifts are typically much needed and appreciated. In addition to the good these organizations are doing in the world, there is also still a tax benefit available for gifts to non-profits. (Please check with your tax professional to confirm the details of how much of your gifts are deductible.)

We’ve recently come across a number of additional ideas for philanthropic giving that we want to share with you.

A website that I’ve found to provide good information about charities as well as broader topics relating to philanthropy is GivingCompass.org.

Nicholas Kristof, a New York Times columnist and two-time Pulitzer Prize winner, also publishes an annual list of organizations he thinks are making an enormous impact. He profiled several of these organizations in his November 26 piece, “Time for Gifts of Meaning.”

Yet another broad organization/movement that’s been in the news lately is Effective Altruism (see recent stories from The New York Times, “FTX’s Collapse Casts a Pall on a Philanthropy Movement” and “Effective Altruism, on the Defensive,” and The Economist, “What Sam Bankman-Fried’s Downfall Means for Effective Altruism”). EA started in 2011, led by an Oxford professor named William MacAskill. It builds on and updates utilitarianism, which you might remember from reading John Stuart Mill and Jeremy Bentham in college philosophy classes. The update comes in the form of new methods of data analysis that attempt to determine which organizations are currently doing the most good for the most people. In addition to MacAskill, another academic associated with EA is Peter Singer, a philosophy professor at Princeton. An interesting podcast called People I (Mostly) Admire, hosted by Steven Levitt, a University of Chicago economics professor and co-host of Freakonomics, recently featured Singer (10/14/22) and MacAskill (8/19/22). They have provocative takes on, among other topics, animal welfare and long-term thinking (MacAskill calls this “long-termism”). Singer is associated with TheLifeYouCanSave.org, and MacAskill with GiveWell.org.

Effective Altruism has been in the news recently in connection with FTX, the cryptocurrency exchange that filed for bankruptcy in November, and its founder and former CEO, Sam Bankman-Fried, who was arrested in early December on charges related to FTX’s collapse. Bankman-Fried was a disciple of MacAskill, and the largest contributor to Effective Altruism causes. These include global economic development, pandemic preparedness, and, more recently, “AI safety,” which involves safeguarding humanity against potential harm from artificial intelligence technology.

Some of the potentially less savory aspects of Effective Altruism came to light in Bankman-Fried’s downfall. One of these is “earn to give,” in which some EA proponents were encouraged to pursue lucrative careers in finance and technology so that they could give away large amounts to EA causes. Many believe Bankman-Fried took this concept to a dangerous, and fraudulent, extreme. MacAskill lamented the impact on EA: “Sam and FTX had a lot of good will – and some of that good will was the result of association with ideas I have spent my career promoting. If that good will laundered fraud, I am ashamed.” Earn to give sounds reasonable to me in theory but presents an enormous opportunity for backsliding and outright fraud in practice, as Bankman-Fried appears to demonstrate. (Remember, though, that he’s only been charged so far, not convicted of anything specific.)

Some of Effective Altruism’s other ideas strike me as a little far-fetched. Long-termism, in particular, with its claim that we should give as much consideration to people 1,000 years in the future as we should to people living 1,000 miles away, seems interesting but difficult to pursue in the context of so much current global suffering. On the other hand, this kind of thinking does argue for work to prevent climate change, prepare for future pandemics, and avoid the potential excesses of artificial intelligence, all of which will likely help the living as well as the not-yet-alive. So, despite the recent negative publicity, it appears that EA continues to promote good works around the world.

We hope these resources provide some ideas to help with your giving. Please feel free to send us links to your resources so we can compile additional ideas for 2023 and beyond.