Author: Minich MacGregor Wealth Management

On February 14, 1990, the Earth was being watched. 

The object watching Earth was small; small enough to fit inside a four meter-large cube.  And it was distant, being over 3,000,000,000 miles away.  It is even farther away now—in fact, it recently became the first man-made object in history to venture into interstellar space. 

It was the Voyager 1 spacecraft. 

Voyager 1 is a probe built by NASA, launched in 1977 to study the outer Solar System.  Its primary mission was to study the planets Jupiter and Saturn and their various moons.  Having accomplished this, the probe is now winding down its secondary mission, which is to study the distant regions beyond the planets before it loses power and becomes destined to drift through the Universe as a mute, lonely messenger until the end of time. 

But this post isn’t about Voyager.  It’s about Earth. 

On that date in 1990, Voyager 1 had completed its primary mission.  Carl Sagan, the famous astronomer, and author, asked NASA to turn the probe’s camera around to take one last photograph of Earth and the other planets.  Between February 1 and June 6, Voyager took sixty still images.  Each image contained about 640,000 individual pixels, and as the probe was so far away, it took about 5½ hours for each pixel to reach Earth. 

The most famous of these photographs was of our home planet—now just a pale blue dot amidst the infinite blackness of space. 

If you’ve ever seen this photo, you know what a stirring, thought-provoking image it is.  Imagine our great, grand planet … filled with life, oceans, mountains, deserts, forests, and cities, reduced to nothing more than a speck.  It serves to illustrate just how small we really are compared to the unceasing vastness of the Universe.  But it also serves another, more powerful purpose. 

April 22 is Earth Day, a celebration of our planet, of nature, and of the importance of protecting the environment.  Hundreds of thousands of people will observe the event in their own way, but many more will probably fail to remember that Earth Day exists at all.  After all, there are already so many holidays demanding our time, our attention, and our money.  Most of us probably don’t even get Earth Day off from work.

And yet, we wonder if we wouldn’t attach more importance to Earth Day if we all took a few minutes, once a year, to simply look at that pale blue dot.  Because there’s something else the picture illustrates, something we should all remember. 

Take a minute, to pull up the picture on your computer.  Search for “pale blue dot” on Google^® or go to this address at http://en.wikipedia.org/wiki/Pale_Blue_Dot to see it directly.  After you look at the single pixel that is our planet, gaze around the edges of the image.  What do you see? 

Nothing. 

Of course, we know that the Milky Way galaxy isn’t empty.  It’s bursting with stars, cosmic rays, solar wind, clouds of dust, asteroids, comets, and even other planets.  But it contains no other life, not that we’ve found.  The closest planet potentially capable of supporting life is so far distant, it would take millions—millions!—of years to get there.  That’s longer than our species has even been alive. 

Until further notice, we are alone. 

Our pale blue dot is just one of billions in the night sky, but it is unique.  We are on an island amidst a dark, silent ocean.  An oasis inside the barrenness of space.  A single, precious garden surrounded totally by desert. 

What the pale blue dot photo really shows is that our planet is significant.  It’s all we have.  It shelters us, sustains us, provides for us, and entertains us.  If there is another world richer and more beautiful than ours, we’ve yet to find it. 

In short, we’ve been given the greatest gift of all. 

This is why Earth Day is important: because it’s our chance to reflect on what we can do to truly deserve that gift.  It is our chance to reflect on how we can protect it, because it certainly needs protecting. 

This April 22, we invite you to celebrate Earth Day.  Even if you do nothing else but feel the warmth of the Sun on your face, smell the flowers in bloom all around you, and ponder the depths of the night sky, it will be enough.

And as you celebrate Earth Day, ponder the words Carl Sagan left us about our precious, pale blue dot. 

Did you know that trees have checklists?

Okay, so maybe they’re not written checklists attached to a clipboard, but it’s true all the same.  Every year, when winter slowly makes way for spring, there are several criteria that trees must “check off” before they start to bloom. 

The first item on their checklist is more sunlight.  Trees can detect when spring is near because the days get longer, meaning they receive more sunlight each day.  Sunlight, of course, is what trees store and convert into sugars via photosynthesis. 

The second is moisture.  This isn’t a problem in most parts of the country, where spring rains or melting snow contribute plenty of water.  But if the area is going through, say, a massive drought, then trees will often delay blooming.

Finally, trees wait for the temperature to rise.  Even if the day is longer, trees know that a sudden blizzard or even overnight frost can wreak damage to any new growth.  So, they wait until the average temperature is high enough before dazzling the world with a riot of color.

Why are we telling you all this?  As financial advisors, we love checklists, too.  After all, if they’re good enough for nature, they’re good enough for us!  And with spring – and a new quarter –arriving, it’s time for us to make like a tree and leaf through our own checklist.  These are the steps we must take to keep growing closer to our financial goals. 

The tasks on this list are all things that should be taken care of in the second quarter.  Don’t worry –they’re not difficult!  In fact, some may be completed already.  But each is important in its own way. If you need help or have questions about any of these, please let us know.  In the meantime, we hope you have a great second quarter…and a wonderful spring!

Q2 Financial Checklist for 2024
Tip: Print this out and stick it on the fridge or somewhere else it will be seen.  That way, you can check off the items one by one as you complete them! 

Review All Your Holdings

These days, many investors adopt a “set it and forget it” mentality with their investment portfolio(s).  That’s certainly better than stressing about the markets daily, but it’s critical to review your holdings at least once or twice a year to make sure everything is in order.  Is your allocation still where it should be?  Is your portfolio still in line with your tolerance for risk?  Are your holdings providing the kind of return you need to reach your financial goals?  Do you understand everything you own and why?

If the answer to any of these questions is “No” or “I don’t know,” then it’s time for us to sit down and take a closer look at things.  And by the way, when we say, “review your holdings,” we mean all of them.  That includes any and all institutions you do business with!  (Many investors sometimes forget where all their assets are kept and thus fail to review them. Or they review them separately and don’t ensure they work together.)     

Review Your Exposure to Volatility

At the same time, it’s important to be sure that you are prepared to weather any market volatility that may happen in 2024.  As you know, we’re in an election year.  We’re also still contending with higher-than-normal inflation and much higher-than-normal interest rates.  All these factors can contribute to increased turbulence in the markets.  For that reason, we need to be sure you are not overexposed to certain sectors that may be particularly vulnerable to volatility this year.  If you would like a second opinion on investments held in other places, we would be happy to provide one. 

Determine Your Insurance Needs

In many parts of the country, the return of spring means the imminent return of storm season.  It also means new opportunities for outdoor recreation.  While it may be unlikely, that means an increased chance of both property damage and/or personal injury.  While you don’t need to go out and start buying more insurance, this is the time when you should review where you are covered and where you are not.  That way, you can determine if there are any critical gaps that are simply too risky to leave unfilled.  For example, while most mortgage lenders require customers to have home insurance, few people have property insurance.  For those with property in areas where major storms, wildfires, hurricanes, or tornados are common, that’s a type of gap that really should be filled.  

Budget For Your Summer Vacation Plans

This one’s more fun.  If you have plans for a big cross-country road trip, a long-awaited tour of Europe, or family fun in Disneyland, take time now to set a budget, purchase tickets, and make reservations.  It can save you a lot of money if you do it early.  Money you can use for further adventures in the future! 

Decide What to Do with Your Tax Refund

If you’re getting a tax refund this year, think about how you want to use it.  Approximately 1/3^rd of Americans use their refund to pay off debts; others stick it in a savings account.¹  One underrated and oft-underused option: Invest it instead.  It can help you catch up on saving for retirement, pay for a loved one’s college expenses, or enable you to achieve one of your long-term goals even sooner. 

Get Your Tax Planning Done Early

Finally, once your taxes are filed and the rush is behind you, consider pivoting from tax preparation to tax planning.  While tax prep is the process of filing taxes you already owe, tax planning is the process of minimizing taxes you will owe in the future.  By doing this early, you can potentially reap great rewards in the near future.   

¹ “Over a third of Americans plan to spend their tax refund right away, mostly to pay bills,” CNBC, www.cnbc.com/2022/04/02/mostamericans-plan-to-spend-tax-refund-on-essentials.html

As financial advisors, we are big believers in checklists. They help us stay organized, keep our priorities straight, and ensure that everything we need to do for you gets done.

One of the items on our personal checklist this month is to send a checklist to you.

It’s 2024! A new year means new opportunities, new adventures, new goals to achieve. But doing all that requires some housekeeping. There are certain financial steps we highly recommend you take early in the year in order to make the rest of 2024 as enjoyable and stress-free as possible. So, to that end, we are including a short “Q1 Financial Checklist” with this letter.

The well-known surgeon Atul Gawande said in his book, The Checklist Manifesto: “Checklists cannot be lengthy. A rule of thumb is to keep it between five and nine items, which is the limit of working memory.”With that in mind, we’ve chosen seven items that are especially important.

The tasks on this list are all things that should be taken care of in the first quarter. Don’t worry – they’re not difficult! In fact, you may have handled most of them already. Some may not even apply to you. But each task is important in its own way. Put them all together, and you will find yourself more financially organized…and several steps closer to your financial goals.

If you need help or have questions about any of these, please let us know. In the meantime, we hope you have a great first quarter…and a wonderful 2024!

Q1 Financial Checklist for 2024
Tip: Print this out and stick it on the fridge or somewhere else it will be seen. That way, you can check off the items one by one as you complete them!

Replenish – or Add to – Your Rainy-Day Fund

If you had to dip into your “rainy-day” fund last year, begin this year by adding to it as soon as possible. Knowing you have the funds to cover an emergency is probably the single best way to remove financial anxiety from your life. You don’t have to do it all at once – even just adding a little bit each month is helpful. A good rule of thumb, though, is to have enough saved to cover three-to-six months’ worth of living expenses.

Contribute to Your IRA for 2023

If you haven’t yet contributed to your IRA in the last year, there’s still time to do so. The deadline to contribute for the 2023 tax year is April 15, 2024. (Remember that if you do decide to contribute, you must designate the year you are contributing for.) For 2023, the maximum amount you can contribute is $6,500 if you are under 50, and $7,500 if you are age 50 or older.¹ Your tax preparer should be able to help you fill out the necessary forms, but please feel free to contact me if you need any help. 

Rebalance Your 401(k)

The beginning of the year is a great time to check if your 401(k) needs to be rebalanced. When you originally set up your 401(k), you likely selected a specific asset allocation. (So much in domestic stocks, so much in foreign stocks, so much in bonds, etc.) But over time, your 401(k), like any portfolio, may get overly weighted in one type of asset over others due to how the markets perform. This means your 401(k) will no longer be allocated in the way you originally set. “Rebalancing” your 401(k) means to realign the investments so they match your current allocation. Let me know if you need any help with this!  

Get Your Taxes Done Early

This one’s easy to understand! Starting sooner means mistakes are less likely, available deductions or credits are taken advantage of, and headaches are reduced. An important note regarding Schwab 1099 tax forms: digital tax exports and mailings are scheduled for February 16^th. Please allow 7 to 10 days for the mailing to arrive.

Buy Any Discounted Items That You Need

After the national spending spree that is the holiday season, many stores will offer discounts on products. Even big-ticket items like furniture, electronics, and exercise equipment can sometimes be found for relative bargains. So, if there’s a major purchase in your future, look into doing it earlier in the year, if possible – you may just find a great deal!  

Plan, Budget, and Save For Your Vacation(s) Now

Similarly, airfare and hotel costs can sometimes be found for less if booked very early. Plus, when you determine where you want to go and what you want to do well in advance, it gives you more time to set aside money specifically for your trip…so you may not need to dip into your long-term savings!

Take Advantage of Higher Interest Rates While They Last

As you know, interest rates are historically high right now. That’s not so great for consumers, but it’s good for savers. If you have more short-term goals you want to save for – like a trip or major purchase, for example – consider taking advantage of higher rates. There are many potential ways, including Certificates of Deposit, Treasury Bills, and money market accounts. Give me a call if you’d like more information!

[1] “IRA Contribution Limits,” Internal Revenue Service, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits