Author: Brian Colvert

Mutual Funds Explained: Because No One Ever Actually Reads the Fine Print

Posted on by Brian Colvert

Mutual funds are like your sock drawer. You know it’s full of something useful, but you’re never quite sure exactly what’s in there. Occasionally, you find something surprisingly valuable, kind of like that lost gift card from three Christmases ago.

Recently, at a dinner party, your friend confidently declared, “My Fidelity fund was up 25% last year!” And sure, that sounds impressive. But let’s face it, most of us aren’t entirely sure if that’s amazing or just dumb luck.

In this article, we’ll cut through the confusion, getting mutual funds explained clearly, highlighting mutual fund vs ETF differences, and squashing a few mutual fund misconceptions along the way. And we’ll try to do it without making your eyes glaze over.

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Mutual Fund Misconceptions: The Sock Drawer Problem

One of the biggest misunderstandings about mutual funds is that they’re all basically the same. But mutual funds come in countless varieties, much like those socks we mentioned earlier. They’re just bundles of stocks, bonds, or other investments, chosen by professionals. (Hopefully professionals who don’t rely on tips from Reddit.)

Here’s a fun-but-scary fact: there are around 8,700 mutual funds registered in the U.S. alone, and almost 135,000 if you toss ETFs into the mix. Compare that to just 6,000 publicly traded companies and you start wondering if everyone and their cat has their own mutual fund.

Clearly, understanding your mutual fund choices is important for smart financial planning.

 Mutual Fund vs ETF Differences: Grandma Calls vs. Caffeine Moods

Mutual funds and ETFs might look like identical twins, but they’ve got distinct personalities. Mutual funds trade just once per day, kind of like your grandma calling every evening at exactly 7 pm. Predictable. Stable. Comforting.

ETFs, meanwhile, trade throughout the day, matching the unpredictable energy of someone who’s had three triple-espressos by noon…looking at you Dave. Understanding these differences matters, especially when you’re thinking seriously about optimizing your retirement accounts.

Beyond just trading behavior, mutual funds and ETFs differ in how they’re managed and taxed. Most mutual funds are actively managed, meaning a team of professionals is trying to beat the market by picking winning stocks. That often comes with higher fees, usually baked into something called an “expense ratio.” ETFs tend to be passively managed, simply tracking an index like the S&P 500. That hands-off approach often translates to lower costs and fewer surprise charges hiding in the fine print.

Then there’s how taxes work. ETFs are generally more tax efficient thanks to something called the “in kind redemption” process, which helps them avoid triggering capital gains distributions when investors buy or sell. Mutual funds? Not so much. If someone else in the fund sells a big chunk, you might end up with a tax bill even if you didn’t sell a thing. While grandma’s routine might be comforting, ETFs often give you more control, agility, and fewer tax headaches; we all can deal with less headaches, especially if you just had three triple-espressos.

 Your Friend’s Mutual Fund Brag: The Biggest Misconception

Another classic misconception: vague bragging about owning a “Schwab fund.” Saying you own a mutual fund without knowing what’s in it is like proudly announcing, “I drive a vehicle,” without specifying if it’s a Ferrari or a riding mower. Details matter, especially when they involve your money.

Getting clarity about what’s in your fund helps you make smarter financial moves, such as improving your portfolio’s diversification. Plus, it’ll give you something clever to say the next time your friend starts talking finance.

 Mutual Funds Explained 

Mutual funds aren’t a one-size-fits-all thing. Some focus on big, steady companies (“large-cap”). Others chase growth in smaller, ambitious ventures (“small-cap”). Then you’ve got funds that specialize in international markets or emerging economies. Some even hold gold, oil, or cows. Literal cows.

Understanding exactly what’s inside your mutual fund clears up confusion and gives you more confidence about where your money is going. And hey, confidence looks great on you.

Another consideration is performance reporting. Mutual funds often compare their results to a benchmark, like the S&P 500, but actively managed funds do not always beat those benchmarks. In fact, many underperform after accounting for fees. That is why it is smart to look past just past performance and ask whether the fund’s strategy, costs, and holdings align with your long-term plan. Because at the end of the day, investing should serve your goals, not just chasing returns, or cows in some instances.

Why Understanding Mutual Funds Actually Matters

Navigating thousands of mutual funds and ETFs can be overwhelming, no matter how smart you are. That’s why working with a CFP® is a pretty smart move. Think of us like your financial Siri, except funnier, and more helpful.

When you clearly understand your investments, you feel calmer, smarter, and way less stressed. Not a bad trade-off.

 Ready for Clarity? Let’s Chat

We’ve covered a lot here: mutual funds explained simply, mutual fund vs ETF differences made clear, and we even tackled a few misconceptions. But at the end of the day, your financial goals are unique, and personalized advice is crucial.

So, if you’re ready for tailored financial help (minus the judgment), go ahead and schedule a free introductory call. Because your retirement plan deserves better than vague bragging at dinner parties. 

Donor Advised Funds: A Smarter Way to Give (and Save on Taxes)

Posted on by Brian Colvert

If you’ve ever found yourself writing a hefty check to the IRS and thinking, “There has to be a better way,” you’re not alone. While taxes are a fact of life, the strategies for how much you pay and where that money goes are entirely up to you. Enter donor advised funds: a powerful, flexible, and surprisingly accessible way to give to the causes you care about while lowering your tax bill.

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This guide breaks down what donor advised  funds are, how they work, and how high-net-worth families and everyday donors alike use them to make smarter financial decisions. Whether you’re charitably inclined, tax-curious, or both, this post is here to help you get strategic with your giving.

What is a Donor Advised Fund?

A donor advised fund (DAF) is like a charitable investment account. You contribute money or assets to the fund, receive an immediate tax deduction, and then recommend grants from that fund to your favorite nonprofit organizations over time. The money can also be invested within the fund, allowing it to grow tax-free, which ultimately means more money for the organizations you care about.

Think of it as a “charity checking account” that comes with major tax perks. Once the money is in, it can only go to qualified 501(c)(3) organizations. You can decide when and where to grant the funds, but you can’t use it for personal purposes or send it to family members.

DAFs are popular because they offer flexibility. You can take your time deciding which charities to support while immediately securing the tax deduction.

Why Not Just Donate Directly?

You can absolutely give directly to your favorite charity, and for many people, that’s the simplest route. But here’s the catch: thanks to the high standard deduction, many donors don’t actually get a tax benefit unless their charitable giving (combined with other itemized deductions) exceeds that threshold.

When you give directly without surpassing the standard deduction, you may miss out on a major tax-saving opportunity. Donor advised funds allow you to optimize your tax situation while maintaining the flexibility to support multiple causes over time.

The Problem with the Standard Deduction

As of 2024, the standard deduction is high enough that most Americans don’t itemize their deductions. For individuals, it’s $14,600. For married couples filing jointly, it’s $29,200. That means if your total itemized deductions (including charitable donations) don’t exceed that number, your donation might not reduce your tax bill at all.

So, if you donate $10,000 to charity in a year but don’t itemize, that generous gift doesn’t reduce your taxable income. In short: you’re giving without gaining any tax advantage.

By using a DAF and “bunching” donations, you can create a year where your deductions do exceed the threshold, allowing you to itemize and capture significant tax savings.

Introducing “Bunching”: How to Maximize Deductions

Bunching is a strategy where you group multiple years of charitable contributions into one year to exceed the standard deduction and itemize that year. You then take the standard deduction the following year.

By using a donor-advised fund, you can bunch your donations without giving all your charitable dollars to nonprofits at once. You contribute a lump sum to the DAF, take the tax deduction in that year, and then distribute the money to charities over time according to your schedule and priorities.

Bunching ensures you’re getting full credit for your charitable giving and allows you to maintain a consistent donation pattern to your favorite causes.

Real-World Example: Bunching in Action

Let’s say you normally give $20,000 per year to charity. That alone isn’t enough to exceed the standard deduction.

Instead, you decide to contribute $40,000 to a donor-advised fund this year, covering two years of donations. That bumps your itemized deductions high enough to exceed the standard deduction and gives you a solid tax break. Next year, you give nothing and simply take the standard deduction.

Meanwhile, your favorite charities still receive $20,000 this year and $20,000 next year; you’ve just front-loaded your contribution for tax purposes.

This strategy is even more powerful for high earners who routinely give significant amounts to charity but risk losing the deduction by spreading donations across multiple years.

How a Donor Advised Fund Works Over Time

Once money is in the DAF, you can:

  • Recommend grants to IRS-qualified charities anytime
  • Invest the funds for potential growth
  • Give anonymously, if you prefer
  • Name successors so your family can continue your legacy of giving

There are no required minimum distributions and no deadlines for giving it all away. You can be strategic and thoughtful with your philanthropy.

Funds inside a DAF can be invested in a range of portfolios, allowing you to potentially grow your contributions while deciding where they should eventually go. This additional growth means your charities could ultimately receive more than your original contribution.

Other Benefits of Donor Advised Funds

  • Tax-Free Growth: Investments inside the fund grow tax-free, meaning more money for your cause
  • Immediate Tax Deduction: You get the deduction the year you fund the DAF, not when you distribute to charity
  • Organized Giving: Track all your donations in one place, simplifying record-keeping
  • Flexible Timing: Donate assets now, decide later where to send the money
  • Legacy Building: Involve your kids or grandkids in deciding where to give, instilling a culture of philanthropy
  • Anonymity Options: Support causes privately if you choose

Advanced Strategy: Donating Appreciated Assets

One of the smartest ways to fund a DAF is with appreciated assets, like stocks or mutual funds. If you donate a stock that’s grown significantly, you avoid paying capital gains taxes and still get the full fair market value as a deduction.

For example, if you bought shares of a tech company early and the value has skyrocketed, donating the shares instead of selling them allows you to:

  • Avoid capital gains taxes
  • Take a full charitable deduction for the fair market value
  • Maximize the impact of your gift
  • This strategy can also work for real estate and privately held business interests with the right planning.

When a Donor Advised Fund Makes Sense

  • You want to make a large charitable gift this year but aren’t sure which organizations to support yet
  • You’re close to (but under) the standard deduction and want to bunch your giving
  • You received a windfall, bonus, or sold a business and need a deduction
  • You have highly appreciated assets and want to avoid capital gains taxes
  • You want to build a multi-generational giving plan
  • DAFs give you the flexibility to adapt your giving to your life events and cash flow needs.

Minimum contributions vary but often start around $5,000 to $25,000. Fees are typically between 0.60% to 1.00% annually, depending on the provider and investment options. When selecting a DAF provider, consider factors like investment options, fees, minimum grant sizes, and whether they align with the types of charities you want to support.

Key Considerations Before You Start

  • You can’t take the money back: Once it’s in the DAF, it must be used for charitable giving
  • Qualified Charities Only: No gifts to individuals, political groups, or family foundations unless qualified under IRS rules
  • Tax Timing: You get the deduction when you contribute to the DAF, not when you grant the funds
  • Fees: DAFs do have administrative and investment fees—be sure to review the fee structure

Final Thoughts: Take Control of Your Giving and Taxes

Giving to charity feels good. Doing it in a way that also reduces your taxes? Even better. Donor advised funds are one of the most underutilized tools in strategic financial planning, yet they’re simple to set up, flexible to use, and powerful in impact.

Whether you’re donating $5,000 or $500,000, you deserve to make the most of every dollar. By planning ahead and using tools like a DAF, you can give with more purpose, more power, and more long-term impact.

It’s not just about writing a check, it’s about building a legacy and ensuring your money makes the biggest difference possible.

Ready to Get Started?

If you want help exploring donor-advised funds or building a strategic giving plan, reach out to us. We’ll walk you through the options, set up the right structure, and help you make your money move with purpose, not just for tax season, but for life.

Investing in Private Equity as a Business Owner

Posted on by Brian Colvert

As a business owner, you’ve likely poured time, energy, and capital into building a company from the ground up. You understand risk, reward, and how to make strategic investments that generate real returns. But as your business matures or you begin to explore new opportunities, one powerful yet often misunderstood strategy enters the conversation: investing in private equity.

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Private equity has long been the playground of institutional investors and ultra-high-net-worth individuals. But today, more business owners are discovering that private equity can be a smart, strategic way to diversify their portfolio, generate long-term returns, and stay connected to the world of entrepreneurship, without the day-to-day operations. Today we’ll break down what private equity is, how it works, the benefits and risks, and how business owners can leverage it effectively.

What Is Private Equity?

At its core, private equity refers to investing in companies that are not publicly traded on stock exchanges. These are privately held businesses, often with strong fundamentals and growth potential, that are looking for capital to expand, restructure, or prepare for a sale or public offering.

Private equity investors typically provide that capital in exchange for ownership stakes, then work to improve the company’s value over time. This can involve operational improvements, financial restructuring, management changes, or even merging with other companies. The ultimate goal? To sell the company at a higher valuation and deliver a return on investment.

There are a few key ways investors can participate in private equity:

  • Direct Ownership: Buying a stake directly in a private company, often as part of an ownership group.
  • Private Equity Funds: Investing in a fund managed by professionals who allocate capital across a portfolio of private companies.
  • Fund of Funds: Investing in a fund that itself invests in multiple private equity funds, offering greater diversification.
  • Private Equity ETFs: While technically public, some ETFs offer exposure to private equity firms, though they may lack the returns and control of direct investment.

Why Business Owners Should Consider Investing in Private Equity

Business owners are uniquely positioned to understand private equity because they already live in the world of private enterprise. You know what it takes to scale a business, manage risk, and create value.

Here are several reasons why investing in private equity makes sense:

1. You Already Understand the Landscape

As a business owner, you likely have insight into operations, sales, marketing, leadership, and finance. This makes you well-suited to evaluate potential private equity investments. You may even have an edge in identifying promising companies in your own industry.

2. Higher Potential Returns

Private equity has historically outperformed public markets over the long term. According to data from Cambridge Associates and other sources, private equity has delivered higher average annual returns than many traditional asset classes.

3. Diversification

Most business owners have a significant portion of their wealth tied up in their own company. Investing in private equity allows you to diversify within a space you understand, reducing concentration risk while still staying aligned with your entrepreneurial mindset.

4. Hands-Off Ownership

Not all private equity investments require active management. By investing in a fund or as a limited partner, you can participate in the growth of private companies without the time and responsibility of running another business.

5. Exit Strategy Alignment

Private equity can also play a role when you sell your business. Many owners roll over part of their equity into the acquiring firm’s private equity structure, giving them continued exposure and upside potential.

Understanding the Risks

Of course, investing in private equity isn’t without risk. Here are a few things to be aware of:

1. Illiquidity

Private equity investments are typically long-term commitments. Your capital may be tied up for 5 to 10 years, and you won’t have the flexibility to sell shares quickly like you would with public stocks.

2. Accredited Investor Requirements

To participate in most private equity funds, you must meet certain income or net worth thresholds to be considered an accredited investor. This ensures that you can absorb potential losses and do not require short-term liquidity.

3. Higher Fees

Private equity funds often charge management fees (usually around 2%) and performance-based fees (commonly 20% of profits over a set threshold). These fees can eat into returns if the fund underperforms.

4. Lack of Transparency

Private companies aren’t subject to the same disclosure requirements as public ones. That means you might not get the same level of financial information or regular reporting.

Evaluating Private Equity Opportunities

When considering an investment in private equity, take the time to evaluate each opportunity just as you would any other major business decision. Key questions to ask include:

  • What is the company’s business model and competitive advantage?
  • Who is on the management team?
  • What is the growth strategy?
  • How is the company currently performing?
  • What is the exit strategy?
  • If you’re investing in a fund:
  • What is the fund’s track record?
  • How much experience does the fund manager have?
  • What industries does the fund specialize in?
  • What are the fees and liquidity terms?

Working with a financial advisor who understands both private equity and your overall financial picture can help ensure the opportunity fits into your broader wealth strategy.

Case Study: The Post-Exit Business Owner

Consider the example of a business owner who recently sold a manufacturing company for $8 million. After taxes, legal fees, and setting aside an emergency reserve, they have $5 million to invest. They’re already maxing out retirement accounts and own income-generating real estate.

Rather than putting the full $5 million into public markets, they decide to allocate $1.5 million into a private equity fund that specializes in mid-market logistics firms—a space they know well. By doing so, they:

  • Stay connected to a familiar industry
  • Benefit from professional fund management
  • Avoid operational stress
  • Have the potential to earn strong long-term returns

The remainder of their portfolio is split between municipal bonds, a diversified ETF portfolio, and some philanthropic giving. This approach creates balance while allowing their capital to continue working in the business world.

The Future of Private Equity for Business Owners

Private equity isn’t just for the big players anymore. More platforms are making it accessible to qualified investors with lower minimums, better transparency, and tailored strategies. As a business owner, you can leverage your knowledge and experience to identify quality investments, assess risk, and make educated decisions that align with your goals.

Whether you’re preparing for a future exit, looking to put surplus cash to work, or simply diversifying away from your primary business, investing in private equity offers a compelling path forward.

Final Thoughts

Investing in private equity gives business owners the chance to continue doing what they do best: evaluating opportunities, understanding risk, and building value. It can be an effective tool for diversification, long-term growth, and staying engaged in the entrepreneurial world without the daily grind.

Next Steps

If you’re curious about how private equity could fit into your wealth strategy, we’d love to help. Book a call with us to explore how investing in private equity could support your long-term goals. With the right approach, private equity might be more than just a good investment, it might be your next big move.

How Diversification Can Save You From a Retirement Meltdown

Posted on by Brian Colvert

If you ask most people what the secret to a successful retirement is, you might hear answers like “save early,” “invest in the right stocks,” or “work with a good financial advisor.” All great advice. But there’s one strategy that often gets overlooked because it’s not flashy, it’s not new, and it won’t land you on the cover of Forbes. That strategy? Diversification.

Let’s be honest: Diversification isn’t exciting. It doesn’t come with big headlines or viral TikToks. But if you’re heading into retirement (or already there), diversification could be the very thing that helps you sleep at night when the markets get bumpy. And that’s worth talking about.

Today we’re going to break down why diversification is more than just a buzzword, it’s a lifeline. We’ll look at how it works, why it matters more in retirement than during your growth years, and how to use it strategically to protect your hard-earned assets.

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What Is Diversification, Really?

At its core, diversification means not putting all your eggs in one basket. In investment terms, it means spreading your money across different asset classes, sectors, industries, and geographies. The goal? To reduce your exposure to any single risk.

It doesn’t mean you won’t ever lose money. It does mean that when one area of the market is down, another might be up—helping to smooth out the ride.

Why Diversification Matters More in Retirement

When you’re in your 30s, 40s, or even early 50s, you’re in growth mode. You have income coming in, time on your side, and the ability to take on more risk. You might go all in on tech stocks, try your hand at crypto, or take a flyer on a promising startup. And when those bets pay off, it feels great.

But retirement changes the game.

You’re no longer building your nest egg, you’re relying on it. Your paycheck is gone. Your expenses? Still very much alive and well. And the fear of running out of money? Real.

This is where diversification becomes critical.

A highly concentrated portfolio might have served you well in your accumulation phase. But in retirement, big swings in value become dangerous. A 50% drop in a single stock might not have phased you before, but it hits differently when you’re drawing from your portfolio to cover everyday expenses.

Growth vs. Protection: The Shift in Strategy

Think of it like this: In your career, being specialized often leads to higher pay. A cardiac surgeon earns more than a general practitioner. A software engineer specializing in AI might command a bigger paycheck than a generalist developer.

The same logic applies in investing. Specializing—or concentrating—can yield big results. But it comes with more volatility.

As you near retirement, your strategy needs to shift from growing your wealth to protecting it. You don’t need 40% returns. You need reliable, steady performance and the confidence that your money will be there when you need it.

What Diversification Looks Like in Retirement

So what does a diversified portfolio actually look like for someone in or near retirement? Here are the main components:

  1. Equities Across Sectors and Sizes: Investing in a broad mix of stocks, including large-cap, mid-cap, and small-cap companies across different sectors (technology, healthcare, consumer goods, etc.) helps avoid overexposure to one area of the market.
  2. ETFs and Mutual Funds: Exchange-traded funds (ETFs) and mutual funds offer built-in diversification. One fund can give you exposure to hundreds or even thousands of companies.
  3. Fixed Income (Bonds, CDs, Treasuries): Bonds are a staple of retirement portfolios. From Treasury bonds backed by the U.S. government to corporate bonds and municipal offerings, they provide income and stability. CDs and short-term Treasuries offer ultra-safe options for near-term needs.
  4. Real Estate: Whether through REITs or directly owned property, real estate can provide a stable income stream. It also adds a layer of diversification that doesn’t always move in lockstep with the stock market.
  5. Alternative Investments: Private credit, private equity, or commodities like gold can offer additional diversification. Alternative investments often behave differently than stocks and bonds.
  6. Cash Reserves: Don’t underestimate the power of having some cash on hand. In market downturns, cash gives you flexibility to avoid selling assets at a loss.

It’s Not Just About What You Own—It’s About When You Use It

Diversification isn’t only about what you invest in. It’s also about how and when you draw on those assets. If the stock market drops 20%, you don’t want to be forced to sell equities to fund your living expenses. Instead, you might pull from your bond ladder, real estate income, or cash reserves. This approach gives your equities time to recover—and your overall portfolio a better chance of staying intact.

Strategic diversification gives you flexibility. It gives you options. And options are everything in retirement.

Common Misconceptions About Diversification

Let’s clear up a few myths:

  • Myth 1: “I already own five stocks, so I’m diversified.”Not quite. True diversification spans sectors, asset classes, and risk profiles. Five tech stocks? That’s not diversification—it’s concentration.
  • Myth 2: “Diversification means I won’t make as much money.”Possibly true, but also missing the point. You don’t need outsized gains in retirement—you need consistency. Remember: doubling your money won’t change your life as much as losing half of it.
  • Myth 3: “All diversification is equal.”Nope. Diversifying across mutual funds that all hold the same top 10 stocks isn’t true diversification. Look under the hood of your investments.

How to Tell If You’re Truly Diversified

A few good questions to ask yourself :

  • How much of my portfolio is in one sector or company?
  • Am I exposed to different types of investments (stocks, bonds, real estate, etc.)?
  • Do I have income sources that don’t rely on the stock market?
  • If the market dropped 30% tomorrow, would I be forced to sell something at a loss?
  • Is my risk level aligned with my retirement goals?

If you’re unsure, it’s time for a checkup.

The Real Goal: Peace of Mind

At the end of the day, diversification isn’t about being fancy. It’s about creating a plan that gives you confidence.

You don’t want to be the retiree glued to CNBC, wondering if your favorite stock is about to tank. You want to be the retiree sipping coffee, knowing your portfolio is built to weather the storm.

Because here’s the thing: the market will dip. There will be recessions. Headlines will get scary. But a well-diversified portfolio doesn’t panic—it pivots.

Final Thoughts: Diversify Like Your Retirement Depends on It (Because It Does)

If you’re still chasing big returns with concentrated bets as you near retirement, it’s time to reconsider. There’s nothing wrong with going big during your accumulation years. But once you’re approaching or entering retirement, the name of the game is preservation.

And that’s where diversification shines.

It may not be exciting. It may not be trendy. But it works. And when it comes to your retirement, that’s exactly what you want.

Next Steps

Need help creating a diversified retirement plan that actually fits your life? Let’s talk. At Bonfire Financial, we help clients build smart, stable portfolios that are designed to go the distance. Schedule a call with us today! 

Why the Dollar-Cost Averaging Investment Strategy Wins in Down Markets

Posted on by Brian Colvert

When the market drops, the headlines scream, the talking heads debate, and investors everywhere feel their stomachs drop. It’s natural. Nobody enjoys seeing their portfolio shrink. But instead of letting fear dictate your next move, what if you could approach down markets with a calm, calculated strategy? Enter: the Dollar-Cost Averaging (DCA) investment strategy. DCA isn’t flashy. It’s not some hot stock tip or a wild market-timing maneuver. In fact, it’s often dismissed because of its simplicity. But as Brian explains in this episode of The Field Guide, sometimes boring is brilliant.

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Understanding Dollar-Cost Averaging

Dollar-cost averaging is the strategy of investing a fixed amount of money at regular intervals, regardless of what the market is doing. Whether stocks are up, down, or sideways, the same amount goes in on schedule. This means that when prices are high, you buy fewer shares. When prices are low, you buy more.
You might already be doing it without realizing it. Most 401(k) plans are built around this principle. Every two weeks, a portion of your paycheck gets invested, buying into the market consistently over time.

The beauty of this approach? It takes emotion out of investing. And emotion, as history has shown, is often the enemy of smart financial decision-making.

What’s Happening in the Market Right Now

As of the recording, markets are down roughly 10–12%. That’s enough to make even seasoned investors sweat a little. And if you look at various indicators—forward P/E ratios, the Buffett Indicator, the Case-Shiller Index—there’s an argument to be made that stocks are still overvalued. That means we could see more downward momentum before things turn around. Add in the geopolitical uncertainty, government policy shifts, and general economic anxiety, and it becomes even more tempting to retreat, pull your money out, and wait on the sidelines.

But here’s the thing: that’s rarely a winning move.

The Opportunity Hidden in the Downturn

Brian emphasizes a simple truth that many forget in moments like this: markets don’t move in straight lines. They ebb and flow. They breathe in and out. And history shows that downturns are followed by recoveries. Often strong ones.

Just look at 2008. The Great Recession was brutal. But what followed was one of the longest bull runs in history. The same happened after the dot-com bubble, and again after the COVID-19 crash. Over time, the market has always rebounded.

So why not take advantage of the downturn instead of fearing it?

Dollar-Cost Averaging  in Down Markets in Action:

A simple, effective game plan when markets are down, is dollar-cost averaging which allows you to buy more shares for the same amount of money. If you were investing $2,000 per month before the drop, you’re now getting more bang for your buck. That means when the market does recover—and it likely will—those extra shares will have a higher value.

It’s like buying quality stocks on sale.

Brian points out that this is the perfect time for high-income earners to lean into their plans. If you’re already maxing out your 401(k) and Roth IRA, you can consider adding more to a taxable account. Even small adjustments—like contributing a little extra when the market hits specific downturn thresholds—can significantly boost long-term returns.

For example:
Market down 10%? Add an extra $500.
Down 15%? Add another $500.
Down 20%? Add even more if cash flow allows.

This isn’t market timing. It’s staying consistent while being opportunistic within a well-thought-out plan.

Why This Works: The Psychology of Automation

One of the greatest strengths of DCA is that it removes decision-making from the process. When emotions run high, logic tends to take a backseat. By setting up automated contributions, you protect yourself from reacting to fear or greed.

Think of it like autopilot for your finances. The money comes out of your account. It gets invested according to your plan. And you don’t have to think about it.
Instead of checking your portfolio every day and stressing about red numbers, you can rest knowing your strategy is working for you behind the scenes.

The Power of Long-Term Thinking

If you’re five to ten years out from retirement, this might be one of the best opportunities you’ll have to accumulate more wealth. When you’re contributing consistently, especially during down markets, you’re setting yourself up for potential growth when the market eventually rebounds.

It’s important to remember that investing isn’t about hitting a home run on every pitch. It’s about building wealth slowly and steadily over time. DCA helps you do exactly that.

But What If This Time Is Different?

Every time there’s a downturn, you’ll hear someone say, “This time is different.” But as Brian wisely notes, those four words are usually wrong. In almost every major downturn in modern history, the market has come back stronger. Betting that “this time is different” is risky business.

A better bet? Stick with what works. Stick with the plan. Trust the process.

Start With a Plan

None of this works without a plan. Whether you’re investing $500 a month or $5,000, having a clear strategy is crucial. Decide how much you’re going to contribute, how frequently, and how you’ll adjust (if at all) when the market shifts.

Make your plan based on your goals, not the headlines.

If you have extra cash flow right now, put it to work. If not, just stay consistent. The key is to avoid pulling out or pausing your contributions out of fear.

The Takeaway

The dollar-cost-averaging in down markets isn’t glamorous. It doesn’t make headlines or get featured in hot stock newsletters. But it works. Especially in volatile markets like the one we’re in now.

It’s a strategy that rewards discipline, consistency, and long-term thinking. And it’s accessible to everyone, whether you’re just starting out or deep into your career. So the next time you see the market in the red, take a deep breath. Remember the plan. Keep investing.

Because when it comes to building wealth, boring often wins.

Next Steps

Want help building your investment strategy or creating a plan that works in any market? Reach out to us,  we’re here to guide you every step of the way.

The Hidden Risks, and Realities, of Insurance for High-Net-Worth Individuals

Posted on by Brian Colvert

b For high-net-worth individuals, wealth offers a sense of freedom, security, and choice. But with greater assets comes greater risk. While insurance is often seen as a check-the-box necessity, the truth is that many affluent individuals are unknowingly underinsured. This leaves them exposed to potential financial disaster in the event of a major claim.

Today we’re breaking down the hidden risks and how high-net-worth individuals can better protect their homes, vehicles, and lifestyles with the right insurance strategies. Drawing from a recent conversation with Jacob Morgan, a top 1% Farmers Insurance agent and President’s Council member, we’ll uncover the current trends, common mistakes, and smarter moves you should be making today.

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Why Standard Insurance Isn’t Built for the Affluent

Most people begin their insurance journey by shopping for the cheapest premium. It makes sense when you’re starting out. But as your assets grow, that approach quickly becomes dangerous.

Standard policies often have coverage caps that don’t align with the true value of luxury homes, exotic cars, or high-end personal items. Additionally, claims service, deductibles, and replacement cost policies may not be designed for unique needs.

Jacob Morgan puts it plainly: “If you’re worth $10 million and living in a fire-prone area with a custom-built home, you’re in a totally different risk category. You’re not just another house on the block. You’re a one-of-a-kind risk.”

The Reinsurance Crisis: Why Premiums Are Skyrocketing

One of the key drivers of rising insurance premiums in recent years is the cost of   . Reinsurance is essentially insurance for insurance companies. When disasters like hurricanes, wildfires, and massive hailstorms happen, the losses get passed up the chain—and ultimately, back down to consumers.

In 2023 alone, the insurance industry lost $43 billion. By mid-2024, the industry had already hit that figure again. Reinsurance markets are tightening, especially in high-risk zones like:

  • California (wildfires, earthquakes)
  • Florida (hurricanes)
  • Colorado (hail, wildfires)
  • Texas (wind, flood)

These macro pressures are pushing premiums higher, and in some cases, making coverage harder to find altogether. For high-net-worth individuals, this means more scrutiny and significantly higher costs to insure homes in these areas.

Why Wealthy Individuals Are Hit Harder

Affluent clients often find themselves on the losing end of insurance pricing, but not by accident. The very things that make luxury living so desirable—beautiful locations, expansive properties, custom features—also make them high-risk to insure. Insurers are increasingly scrutinizing these properties and passing along higher costs to cover the growing risks and potential losses. Here’s why:

  1. Aggregation of Risk: Insuring a $20 million mansion is not the same as insuring ten $500,000 homes. A single loss can devastate a carrier’s bottom line.
  2. Location, Location, Risk: Luxury homes tend to be in scenic, exclusive areas—on the coast, in the mountains, or in rural getaways. These spots also happen to be more vulnerable to disasters and far from emergency services.
  3. Luxury = Higher Replacement Costs: A tile roof on a million-dollar home isn’t just more expensive—it can be exponentially more expensive. Add in custom cabinetry, imported finishes, and high-end tech, and you’re looking at rebuild costs far beyond what standard policies account for.

Common Insurance Mistakes High-Net-Worth Individuals

Despite having the means to afford proper protection, many wealthy individuals unknowingly fall into common insurance traps. These oversights often stem from a set-it-and-forget-it mentality, or from applying the same logic they used in their early financial lives. Let’s explore the most frequent mistakes and how to avoid them.

  1. Staying with the Same Policy for Too Long: Jacob shares that before he opened his agency, he had the same policy for 12 years without ever reviewing it. He later discovered major gaps in coverage. Your lifestyle evolves—your insurance should too.
  2. Chasing the Lowest Premium: While it might be tempting to price-shop insurance the same way you do flights or hotel rooms, this can lead to inadequate coverage. Insurance companies don’t create all policies equally—especially when it comes to endorsements and exclusions.
  3. Low Deductibles on High-Value Assets: Affluent individuals often keep deductibles low out of habit, but this can cost you thousands in premiums. Raising deductibles on high-value items like homes and luxury vehicles can significantly reduce your annual costs while making sense for your cash flow.
  4. Overinsuring Market Value Instead of Rebuild Cost: Many homeowners assume they should insure their home for its market value. In reality, insurance covers rebuild costs, not what Zillow says your home is worth.
  5. Skipping Liability and Umbrella Coverage: As wealth grows, so does visibility and the likelihood of being targeted in a lawsuit. Umbrella policies can be an inexpensive safeguard—often as little as $500 per year for millions in added protection.

Smarter Insurance Strategies for High-Net-Worth Individuals

If you’re building or preserving significant wealth, your insurance strategy needs to be just as sophisticated. It’s not only about coverage amounts. It’s about who manages your coverage, how often it’s reviewed, and what protections are in place when the unexpected happens. Here are some high-impact strategies that can dramatically improve your risk management approach.

  1. Work with an Agent Who Specializes in Affluent Clients: A knowledgeable agent can tailor policies based on your asset mix, lifestyle, and risk exposure. For example, a home in Vail, a yacht in Miami, and a classic car collection all require different layers of coverage and carriers that understand the nuances.
  2. Bundle Strategically: While bundling home and auto can provide discounts, sometimes splitting carriers is the better choice—especially if you have properties in multiple states.
  3. Review Policies Annually or After Major Life Changes: If you renovate your home, buy a new vehicle, acquire art, or add a vacation home, it’s time to review your policies. Even if nothing major changes, plan on an annual review to ensure you’re not overpaying or undercovered.
  4. Customize Coverage With Endorsements: High-value personal property often needs specialized endorsements. Think: collectibles, watches, wine collections, sports memorabilia, home offices, or smart-home systems. Avoid assuming that a standard policy fully covers these items.
  5. Embrace Higher Deductibles Where It Makes Sense: As Jacob suggests, if you can easily afford a $2,500 or $5,000 deductible on your home or car, consider increasing it. Use the savings to enhance your liability limits or invest in umbrella coverage.
  6. Invest in an Umbrella Policy: Liability claims can come from car accidents, injuries on your property, or even social media defamation. Umbrella insurance picks up where your primary coverage stops, providing extra peace of mind.

Jacob noted that in his book of business, only two umbrella claims have been made. Both were worth more than the premiums collected from hundreds of policies—and they saved the clients from serious financial harm.

Final Takeaway: Don’t Set It and Forget It

Insurance for high-net-worth individuals is not just a formality, it’s a strategic pillar of wealth protection. Unfortunately, too many people spend decades building wealth—only to risk it all on outdated or inadequate insurance coverage.

Here’s what to do next:

  • Review your current policies with a trusted agent
  • Assess your liability exposure, especially if you have multiple properties or vehicles
  • Ask about umbrella policies, higher deductibles, and tailored endorsements
  • Re-shop or review annually, especially if you live in a high-risk area

As Jacob Morgan put it, “Why would you go your whole life building wealth, only to lose it over a $500 insurance decision?”  Well said.

Ready to Protect What You’ve Built?

When it comes to high-net-worth insurance, working with the right expert makes all the difference. Jacob Morgan and his team specialize in protecting complex, high-value portfolios—from luxury homes and vehicles to vacation properties and beyond. Whether you’re reassessing your current coverage or building a more strategic risk management plan, Jacob can help ensure your insurance is aligned with your wealth.

Already working with us on your financial plan? Perfect. We’ll collaborate directly with Jacob to create a seamless, coordinated strategy that protects both your assets and your future.

📞 Contact Jacob Morgan at (719) 576-2638
📧 Email: [email protected]

Just mention this blog/podcast so he knows we sent you!

Roth Conversion: Turning Market Lows Into Tax-Free Growth

Posted on by Brian Colvert

Market downturns can be nerve-wracking. When stocks dip, it’s easy to feel like you should hit pause on any big financial moves. But what if a downturn was actually an opportunity? If you’ve been considering a Roth conversion, now might be the best time to act.

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A Roth conversion allows you to move money from a tax-deferred retirement account (like a traditional IRA) into a Roth IRA. The trade-off? You’ll pay taxes now on the converted amount, but in return, your money grows tax-free and can be withdrawn tax-free in retirement. And when markets are down, this strategy becomes even more attractive.

In this post, we’ll break down why a downturn is an ideal time for a Roth conversion, how it works, and what you need to consider before making your move.

What Is a Roth Conversion?

A Roth conversion is the process of moving pre-tax retirement funds from a traditional IRA or 401(k) into a Roth IRA. Normally, traditional retirement accounts are tax-deferred, meaning you don’t pay taxes when you contribute, but you will when you withdraw in retirement.

With a Roth IRA, the opposite is true—you pay taxes upfront but enjoy tax-free withdrawals later. By converting funds now, you lock in today’s tax rates and eliminate the uncertainty of potentially higher tax rates in the future.

Why a Market Downturn Is a Smart Time for a Roth Conversion

A downturn in the stock market may seem like a time to retreat, but for savvy investors, it can be the perfect moment to make strategic financial moves. Here’s why:

1. You Get More Shares for Your Money

When stock prices drop, the value of your traditional IRA also declines. If you convert those assets to a Roth IRA during a downturn, you’re moving shares at a lower valuation, meaning you pay taxes on a lower dollar amount.

For example:

  • If your traditional IRA held $100,000 before a downturn and its value drops to $80,000, a Roth conversion would only trigger taxes on the $80,000 instead of $100,000.
  • When the market recovers, those assets will grow tax-free within your Roth IRA.

By converting at a discount, you position yourself for greater tax-free growth when the market rebounds.

2. You Can Pay Less in Taxes

Since the IRS taxes Roth conversions as ordinary income, the lower your conversion amount, the less you’ll owe in taxes. If a downturn reduces your taxable income (for example, if you have lower capital gains or fewer bonuses this year), you may land in a lower tax bracket—making a Roth conversion even more attractive.

3. No Required Minimum Distributions (RMDs)

Unlike traditional IRAs, Roth IRAs don’t require minimum distributions when you hit age 73. That means you can keep your money invested longer, allowing it to grow tax-free for as long as you want.

4. More Flexibility in Retirement

A Roth conversion now can provide greater flexibility later. By having both traditional and Roth funds, you can better control your taxable income in retirement, pulling from different accounts depending on your tax situation each year.

Breaking It Down: A Simple Roth Conversion Example

Let’s say you’re planning to convert $8,000 into a Roth IRA. Here’s how the numbers might play out in different market conditions:

  • When the market is high: The stock you want to buy is $100 per share. Your $8,000 buys 80 shares.
  • When the market is low: The same stock is now $80 per share. Your $8,000 buys 100 shares.

If the stock eventually rebounds to $100 per share, the account value in each scenario would be:

  • Market High Conversion: 80 shares × $100 = $8,000
  • Market Low Conversion: 100 shares × $100 = $10,000

That’s a 25% gain in your tax-free Roth account simply because you converted during a downturn.

How to Decide If a Roth Conversion Is Right for You

While a Roth conversion can be a smart move, it’s not a one-size-fits-all strategy. Consider these factors before moving forward:

1. Your Current vs. Future Tax Bracket

  • If you expect your tax rate to be higher in retirement, a Roth conversion now at a lower tax rate makes sense.
  • If you’re currently in a high tax bracket but expect it to drop later, waiting might be a better choice.

2. Your Ability to Pay the Taxes

  • Taxes on the conversion should ideally be paid from a non-retirement account.
  • Using IRA funds to pay taxes means you’ll be left with a smaller balance growing tax-free.

3. Your Retirement Timeline

  • If you plan to retire soon and need the money within five years, a Roth conversion might not be ideal. Withdrawals from converted funds within five years of conversion trigger a penalty.

4. Your Estate Planning Goals

  • If you want to pass on wealth tax-free to heirs, a Roth conversion is a great tool.
  • Unlike traditional IRAs, Roth IRAs don’t require heirs to pay taxes on withdrawals.

How to Execute a Roth Conversion in a Downturn

If you decide a Roth conversion makes sense, here’s how to get started:

  1. Evaluate Your Portfolio – Identify which assets are best suited for conversion.
  2. Estimate Taxes Owed – Work with a fiduciary financial advisor or CPA to calculate tax liability.
  3. Choose a Conversion Amount – Decide how much you can afford to convert while staying in your tax bracket.
  4. Initiate the Conversion – Work with your brokerage to move funds from your traditional IRA to a Roth IRA.
  5. Pay the Taxes – Ensure you have cash on hand to cover the tax bill without tapping into retirement savings.

Common Roth Conversion Mistakes to Avoid

Before you jump in, avoid these pitfalls:

  • Converting Too Much at Once – Large conversions can push you into a higher tax bracket. Consider a multi-year conversion strategy.
  • Not Planning for the Tax Bill – Don’t forget you’ll owe taxes on the converted amount in the year of conversion.
  • Overlooking the Five-Year Rule – If you convert funds, you must wait five years before withdrawing them without penalty.

Final Thoughts: Should You Convert to a Roth During a Downturn?

A Roth conversion is one of the smartest moves you can make during a market downturn. By converting assets when their value is temporarily lower, you reduce your tax burden and set yourself up for greater tax-free growth in the future.

However, this strategy isn’t right for everyone. If you’re unsure whether a Roth conversion fits your financial plan, contact us today to discuss whether a Roth conversion is the right move for you.

Physician Retirement Strategies: Making Early Retirement a Reality

Posted on by Brian Colvert

The idea of early retirement is appealing to many, but for physicians, it often feels out of reach. Despite earning high incomes, many doctors struggle to step away from their careers at an earlier age. Between student loans, lifestyle inflation, and a deep sense of identity tied to their profession, the road to financial freedom isn’t always straightforward.

Yet, retiring early as a physician is possible with the right financial planning and strategic decisions. Today, we’ll explore the key challenges physicians face when planning for retirement, common pitfalls that delay retirement, and the strategies that can help make early retirement a reality.

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Why Many Physicians Struggle to Retire Early

1. The High-Income Trap

One of the biggest reasons many physicians delay retirement is lifestyle inflation. After years of intense schooling and residency, physicians finally reach a stage where they can afford the finer things in life—private schools, luxury homes, vacations, and expensive cars. While there’s nothing wrong with enjoying financial success, an ever-growing lifestyle requires a significant amount of savings to sustain in retirement. Many physicians unknowingly fall into the “golden handcuffs” trap—earning more but also spending more, making it difficult to build a large enough nest egg to retire early.

2. A Late Start on Saving

Unlike other high-income professionals, physicians spend their early adulthood in medical school and residency, delaying their earning years. Many don’t start earning substantial salaries until their early 30s, putting them behind in the retirement savings game compared to their peers in other fields. This means they have a shorter window to accumulate enough wealth to retire early.

3. Identity and Career Attachment

For many physicians, being a doctor isn’t just a job—it’s a core part of their identity. The idea of stepping away from medicine can feel like a loss of purpose, making retirement psychologically difficult. This attachment often leads physicians to continue working, even if they are financially capable of retiring earlier.

4. The Uncertainty of Healthcare Costs

Physicians who retire early face a major hurdle: healthcare expenses. With Medicare eligibility beginning at age 65, those who retire earlier must find alternative ways to cover health insurance, which can be costly. Without proper planning, unexpected medical expenses can quickly erode retirement savings.

Most Physicians Retire After 65

Did you know that most physicians retire after age 65? According to 2021 data from the Center for Retirement Research at Boston College, the average retirement age for men is 65, while for women, it is 62. A survey from AMA Insurance Inc. found that 58% of physicians retire after age 65. This later retirement age can be attributed to factors like financial obligations, career attachment, and the high cost of maintaining a physician’s lifestyle. Additionally, different medical specialties have varying retirement ages, with some physicians, such as primary care doctors, working longer due to steady demand and others, like surgeons, retiring earlier due to the physically demanding nature of their work.

How Physicians Can Retire Early – Physician Retirement Strategies

Retiring early isn’t about making extreme sacrifices—it’s about making smarter financial decisions. Here are the key strategies that can help physicians achieve financial independence and retire early.

1. Save Aggressively

The cornerstone of early physician retirement is high savings. Physicians who aim to retire early need to save significantly more than the average worker. A common benchmark is the 25x rule—you need 25 times your annual expenses saved to retire comfortably. For example, if you spend $200,000 per year, you need $5 million saved. To achieve this, physicians should prioritize maxing out tax-advantaged accounts, such as:

  • 401(k) or 403(b) plans (especially with employer matching)
  • Traditional and Roth IRAs
  • Health Savings Accounts (HSAs)
  • Taxable brokerage accounts for additional flexibility

Automating savings and increasing contributions as income grows ensures steady progress toward financial independence.

2. Manage and Eliminate Debt

Student loans, mortgages, and other consumer debt can be a major obstacle to early retirement. Physicians should focus on paying off high-interest debts quickly while strategically managing low-interest debts.
Some strategies include:

  • Refinancing medical school loans to secure lower interest rates
  • Prioritizing high-interest debt (credit cards, personal loans)
  • Considering paying off mortgages early to reduce fixed expenses in retirement

For business or investment debt that generates income, it’s essential to weigh the cost of interest against potential returns before aggressively paying it off.

3. Diversify Income Streams

Relying solely on a physician’s salary to fund early retirement can be risky. A great way to accelerate financial independence is by creating multiple income streams. Some popular options include:

  • Real estate investments – Rental properties can generate passive income and appreciate over time.
  • Side businesses or consulting – Many physicians find lucrative opportunities in telemedicine, consulting, or expert witness testimony.
  • Surgery center or medical practice ownership – Owning equity in a profitable practice can provide significant income beyond salary.
  • Dividend and stock investments – A well-structured portfolio of dividend-paying stocks can provide ongoing cash flow.

Having multiple streams of income provides financial security and allows for a more flexible transition into retirement.

“Physician retirement isn’t about cutting back—it’s about building income streams that let you walk away when you want, not when you have to.”

4. Create a Tax-Efficient Retirement Plan

Understanding tax strategies can help physicians keep more of their earnings and grow their wealth faster. Some key tactics include:

  • Utilizing tax-advantaged accounts (401(k), Roth IRA, HSA)
  • Tax-loss harvesting to offset capital gains
  • Roth conversions to minimize future tax burdens
  • Setting up a Defined Benefit Plan (for self-employed physicians)

A tax-efficient withdrawal strategy in retirement ensures that physicians don’t pay unnecessary taxes on their savings.

5. Consider Gradual Retirement

For physicians who are hesitant about retiring abruptly, transitioning into part-time work can be a great solution. Many doctors choose to scale back their hours before fully retiring. This allows them to:

  • Maintain a steady income stream
  • Adjust psychologically to life after full-time work
  • Reduce financial pressure while still enjoying more free time

Gradual retirement can help physicians ease into their next chapter while maintaining financial stability.

“Physician retirement is not just about reaching a number—it’s about creating a lifestyle where financial independence meets personal fulfillment.”

6. Plan for Healthcare Costs

Healthcare is one of the biggest concerns for early retirees. Without employer-provided coverage, physicians must plan for insurance costs until Medicare kicks in at age 65. Options include:

  • Health Savings Accounts (HSAs) – A powerful, tax-advantaged way to save for medical expenses.
  • COBRA coverage – Extending employer-sponsored insurance for a limited time.
  • ACA Marketplace plans – Subsidized plans may be an option, depending on income.
  • Healthcare-sharing programs – An alternative for those comfortable with non-traditional healthcare coverage.

Being proactive about healthcare planning ensures that medical expenses don’t derail an early retirement plan.

FAQs on Physician Retirement

Q: How much does the average doctor retire with?

A: The amount varies widely based on specialty, savings habits, and financial planning. However, studies suggest that many physicians retire with between $2 million and $5 million in savings. Those who aggressively save and invest often accumulate significantly more.

Q: What are the biggest obstacles to early retirement for physicians?

A: The biggest challenges include high student loan debt, lifestyle inflation, late career starts, and the uncertainty of healthcare costs before Medicare eligibility.

Q: What types of physicians are more likely to retire early?

A: Specialists with high incomes, such as anesthesiologists and radiologists, often have more financial flexibility to retire early, while primary care physicians may work longer due to lower earning potential.

Q: How can physicians transition into retirement without financial stress?

A: By gradually reducing work hours, diversifying income sources, and having a solid financial plan in place, physicians can ease into retirement with minimal financial strain.

Q: What is the best age for a physician to retire?

A: The best age varies by individual financial readiness and personal goals. While many physicians retire after 65, those who prioritize savings and investments may retire in their 50s or even earlier.

Q: As a Doctor, should I work with a financial advisor for retirement planning?

A: A financial advisor can be a valuable resource throughout a physician’s career and in preparing for retirement. According to a study by the AMA, 72% of physicians partner with a financial advisor to help them reach their retirement goals. Physicians who seek professional financial guidance tend to experience greater financial satisfaction in retirement—82% of those working with an advisor reported being satisfied with their retirement.

Physician Retirement Calculator

Curious how much you need to retire? A great way for physicians to estimate their retirement needs is by using our retirement calculator. This tool helps determine how you need to save by factoring in current income, desired retirement age, lifestyle expenses, and expected investment returns. By utilizing the calculator, you can create a clearer financial roadmap and adjust your savings strategy accordingly to achieve your retirement goals with confidence.

Physician retirement calculator

Next Steps

Physician retirement doesn’t have to be uncertain or stressful. With the right financial strategies—saving aggressively, managing debt, diversifying income, and planning for taxes and healthcare—early retirement can become a reality. Whether you’re looking to retire at 55 or simply want the flexibility to make work optional, proper planning is key.

Our team specializes in helping physicians create personalized retirement plans that align with their goals and lifestyle. Schedule a meeting with us today to take control of your financial future and start building the path to a secure and fulfilling retirement

Selling Your Business? Valuation, M&A, and Exit Strategies with Chris Blees, CPA/ABV, CM&AA

Posted on by Brian Colvert

If you’ve built a successful business and are considering selling, you likely have a lot of questions. What’s my company worth? Is now a good time to sell? How do I structure the deal to maximize my return? In this episode of The Field Guide, Brian sits down with Chris Blees,  CPA/ABV, CM&AA, an expert in mergers and acquisitions (M&A) and business exits, to unpack the M&A landscape and offer valuable insights for business owners preparing for a sale. Whether you’re planning an exit in the next few years or just starting to think about it, this guide covers market trends, valuation strategies, deal structures, and key mistakes to avoid when selling your business.

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Is Now a Good Time to Sell? The Current M&A Landscape

According to Chris, the M&A market remains strong despite economic shifts and fluctuating interest rates. While high interest rates have softened some areas of the market, the lower middle market (companies valued between $10 million and $50 million) continues to see strong demand.

The reason?

There’s still an enormous amount of private equity capital and corporate cash looking for deals. Large companies and well-funded private equity firms are often cash buyers, meaning they’re not as affected by rising interest rates as smaller leveraged buyers. This means that for business owners in this range, valuations are holding steady, and in some industries, even increasing.

Industries Seeing High Demand and Strong Valuations

Certain industries consistently attract buyers and command strong valuations due to their stability, growth potential, and recurring revenue models. Here’s a closer look at some of the hottest industries in today’s M&A market:

  • Manufacturing  – The manufacturing sector, particularly in niche markets and specialized B2B services, continues to attract strong buyer interest. Companies that integrate technology, automation, or supply chain efficiencies are especially appealing to investors and strategic acquirers.
  • Software & Technology  – Tech businesses, particularly those with SaaS (Software-as-a-Service) models, command high valuations due to their scalability and predictable recurring revenue. Cybersecurity, AI-driven solutions, and cloud computing businesses are in particularly high demand.
  • Medical & Healthcare Services – Businesses in healthcare-related sectors, such as medical billing, outpatient surgery centers, physical therapy practices, and specialized medical device manufacturing, remain hot commodities. With an aging population and continued healthcare innovation, buyers see strong long-term growth potential in these fields.
  • Home & Commercial Services – The services industry, particularly in areas like HVAC, roofing, commercial landscaping, and facility maintenance, has seen a surge in interest. Many of these businesses have transitioned to subscription-based service contracts, which create reliable recurring revenue streams—making them even more attractive to investors.
  • Construction & Trades – Historically, construction-related businesses were difficult to sell due to their reliance on cyclical demand. However, specialized trades with service agreements and maintenance contracts, such as plumbing and electrical services, have become highly sought after.
  • E-commerce & Consumer Brands – E-commerce businesses with strong brand loyalty, direct-to-consumer (DTC) models, and proprietary products are in high demand. Buyers are particularly interested in companies with well-established supply chains and efficient logistics.

One key takeaway from Chris? Companies with strong recurring revenue models tend to sell for higher multiples than those reliant on one-time transactions. Subscription-based services, long-term contracts, and membership models can significantly enhance a company’s valuation and buyer appeal.

Valuation: What Drives Your Business’s Worth?

When it comes to valuing a business, it’s all about earnings and multiples. Most buyers look at a company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and apply a multiple based on the industry, growth potential, and risk factors.

Some key factors that impact valuation include:

  • Profitability and Growth Trends – Buyers want to see consistent revenue and profit growth.
  • Customer Concentration – If too much revenue comes from a single client, buyers see risk.
  • Owner Dependence – If the business can’t run without the owner, valuation takes a hit.
  • Recurring Revenue – Subscription or long-term contract models drive higher valuations.
  • Market Conditions  – High demand in your industry can drive up multiples.

Chris emphasizes that multiple expansion (finding a buyer willing to pay a higher multiple) is often more impactful than increasing earnings alone. Finding the right buyer can double or even triple a business’s value.

How Interest Rates Are Affecting M&A

Higher interest rates generally slow M&A activity by increasing borrowing costs. However, for the lower middle market, where many buyers use cash instead of debt financing, interest rate fluctuations have had minimal impact on valuations.

In contrast, smaller businesses (valued under $5 million) and very large deals (over $100 million) are more sensitive to rising rates because buyers typically rely on financing. If your business falls in the $10-$50 million range, you may still be in a strong position to sell.

Structuring the Deal: Cash, Earnouts, and Hybrid Exits

Every sale is different, and how the deal is structured plays a major role in how much a seller ultimately takes home. Some common deal structures include:

  • All-Cash Deals – The dream scenario, but less common unless the business has strong financials and low risk.
  • Earnouts – A portion of the sale price is contingent on future performance, often used when there’s uncertainty about revenue.
  • Equity Rollovers – The seller retains partial ownership, often leading to a more lucrative “second bite of the apple.”
  • Seller Financing – The seller provides financing to the buyer, reducing upfront cash but enabling a higher overall price.

Chris points out that a hybrid exit strategy—selling 70-80% of the business while keeping 20-30% equity—can be a game-changer. Many sellers who take this approach make more on their second sale than the first, as their retained equity grows in value.

Preparing to Sell: What Business Owners Need to Do

If you’re thinking about selling in the next three to five years, now is the time to start preparing. Here’s what you should focus on:

  • Build a Strong Management Team  – Buyers want to see a company that can run without the owner.
  • Diversify Your Revenue Stream  – Reduce reliance on a single client or revenue source.
  • Clean Up Your Financials – Work with a CPA to ensure accurate, well-documented financial statements
  • Address Cybersecurity & Compliance  – Ensure your business meets all legal and regulatory requirements.
  • Work with a Tax Advisor  – Strategic tax planning years in advance can significantly reduce the tax burden from a sale.

Biggest Mistakes Sellers Make

According to Chris, the biggest mistake sellers make is focusing too much on one aspect of the deal—typically the upfront cash payout. The best deals involve a balanced mix of cash, equity, and earnouts. Other mistakes to avoid:

  • Waiting too long to plan – Selling a business takes time, and waiting until you’re “ready” often means leaving money on the table.
  • Not having a strong management team – If your business depends too much on you, buyers get nervous.
  • Not considering tax implications – Proper tax structuring years in advance can save millions.
  • Ignoring due diligence risks – Buyers will scrutinize legal, financial, and operational risks. Get ahead of them.

Final Thoughts: Is It Time to Sell?

Selling a business is one of the most significant financial decisions an owner can make. The key is preparation—understanding valuation, structuring the deal wisely, and ensuring your company is attractive to buyers.

As Chris explains, many business owners wait too long to start preparing for a sale. The best time to start planning? At least three to five years before you want to exit.

Next Steps

If you’re considering selling your business and want expert advice on valuation, M&A strategies, and tax implications, Chris and his team at Biggs Cofford Capital can help. They are based in Colorado Springs but serve clients across the country. Reach out to them today to get started.

High Net Worth Financial Planning – What You Need to Know

Posted on by Brian Colvert

High net worth financial planning is essential for preserving, growing, and strategically managing wealth. While having substantial assets may provide financial security, a well-structured financial plan ensures that your wealth aligns with your long-term goals, minimizes tax liabilities, and provides a clear roadmap for investments, estate planning, and risk management.

Many individuals with a high net worth question the need for financial planning because they aren’t worried about running out of money. However, as Brian discusses in The Field Guide podcast, a financial plan is more than just a tool —it is a blueprint for decision-making. It helps ensure that every financial move aligns with broader goals, whether it’s investments, taxes, estate planning, or philanthropy.

Even the wealthiest individuals benefit from a structured approach to their finances. In this guide, we break down why financial planning is essential for high net worth individuals and families, the key components of a strong financial plan, and how working with a fiduciary financial advisor can provide a roadmap to financial security and success.

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Why Financial Planning Still Matters for Wealthy Individuals

Many assume that because they have substantial assets, they don’t need a financial plan. However, financial planning isn’t just for those worried about running out of money—it’s about making informed decisions, optimizing opportunities, and helping to ensure financial stability across generations.

Here’s why having a customized financial plan is crucial:

1. Ensuring Your Investments Align with Your Goals

A financial plan acts as a roadmap, helping you align your investments with your lifestyle, retirement, and legacy goals. Without a clear plan, it’s easy to make impulsive investment decisions that may not serve your long-term interests.

As Brian mentions, many clients approach him with specific investment ideas—such as buying Bitcoin or allocating more funds into tech stocks like Apple and NVIDIA, or other AI investments. However, without a plan, it’s impossible to determine whether these investments align with personal financial goals. Are you looking to grow wealth aggressively, or are you risk-averse and more focused on wealth preservation? These questions must be addressed before making investment decisions.

2. Managing Risk and Market Volatility

Even wealthy investors need to consider risk management. Market downturns, economic shifts, and unforeseen expenses can impact anyone. A solid financial plan ensures that you have diversified investments and strategies to mitigate risks.

In the podcast, Brian highlights how some investors chase trends without considering whether they can stomach the volatility. For example, Bitcoin may be a great long-term investment, but if a client is highly risk-averse and uncomfortable with large fluctuations in value, it may not be the right fit. A financial plan helps align investment choices with an individual’s risk tolerance and financial objectives.

3. Optimizing Tax Strategies

Those with substantial assets are often in higher tax brackets, making tax-efficient investing and estate planning essential. Without strategic tax planning, you could end up paying significantly more in taxes than necessary.

A good financial plan considers:

  • Which accounts to invest in for tax efficiency
  • When and how to withdraw funds to minimize tax liability.
  • Strategies for charitable giving to optimize deductions.

4. Legacy and Estate Planning 

Wealth preservation isn’t just about making money—it’s about ensuring your assets are passed down effectively. A well-structured estate plan as part of your larger financial plan ensures that your wealth is protected and allocated according to your wishes.

Many individuals fail to update their estate plans, leaving their heirs with unnecessary tax burdens or legal complications.

1,000 adults with over $3 million in investable assets were surveyed and found that only 48% of them had the three most basic planning documents in place: a will, a healthcare proxy and power of attorney. That is a shocking statistic. A financial plan helps you keep estate strategies up to date and aligned with your long-term vision.

5. Philanthropy and Charitable Giving

Many successful individuals want to leave a lasting impact through philanthropy. A financial plan helps structure tax-efficient charitable giving, maximizing the benefits for both you and your chosen causes.

Key Components of a Strong Financial Plan

To maximize and protect your wealth, your financial plan should include the following core components:

1. Investment Strategy & Asset Allocation

Investment planning goes beyond buying stocks and bonds—it’s about building a balanced portfolio tailored to your risk tolerance and financial objectives. Key strategies include:

  • Diversification: Spreading investments across various asset classes to minimize risk.
  • Alternative Investments: Private equity, hedge funds, and real estate can offer unique opportunities for wealth preservation and growth.
  • Tax-Efficient Investing: Using tax-advantaged accounts and strategies to reduce capital gains and income tax burdens.

2. Tax Optimization Strategies

Minimizing tax liabilities is one of the most valuable aspects of financial planning. Strategies include:

  • Tax-Loss Harvesting: Offsetting gains with losses to reduce taxable income.
  • Roth IRA Conversions: Managing income tax liabilities through strategic conversions.
  • Trusts & Charitable Giving: Using donor-advised funds or charitable remainder trusts to reduce tax exposure while fulfilling philanthropic goals.

3. Estate Planning & Wealth Transfer

Estate planning ensures that your assets are passed down efficiently. Key tools include:

  • Revocable & Irrevocable Trusts: Protecting assets from estate taxes and ensuring privacy.
  • Gifting Strategies: Annual gift tax exclusions and family limited partnerships to pass wealth tax-efficiently.
  • Business Succession Planning: If you own a business, structuring a succession plan is critical for maintaining generational wealth.

4. Risk Management & Insurance Planning

Risk management is a crucial component of high net worth financial planning. It ensures that your assets, income, and estate are protected against unforeseen circumstances such as market volatility, lawsuits, health crises, and other financial risks. A well-structured risk management strategy should include the following elements:

  • Asset Protection Strategies: Legal structures such as LLCs and asset protection trusts.
  • Life Insurance Planning: Using permanent life insurance as a tool for estate liquidity and wealth transfer.
  • Long-Term Care & Disability Planning: Ensuring you have adequate coverage in case of unforeseen health issues.

Common Mistakes High Net Worth Individuals Make Without a Financial Plan

Even those with substantial wealth can face financial pitfalls without a well-structured financial plan. Some of the most common mistakes high-net-worth individuals make include:

  • Lack of Investment Strategy: Without a clear investment strategy, individuals may take on excessive risk or miss out on key diversification opportunities. Over-concentration in certain stocks, industries, or asset classes can lead to significant financial losses.
  • Overlooking Tax Efficiency: Many wealthy individuals fail to take advantage of tax-efficient strategies, resulting in unnecessary tax burdens. Without proper planning, they may miss out on deductions, tax-deferred growth opportunities, and estate tax reduction strategies.
  • Neglecting Estate Planning: Failing to have a well-structured estate plan can lead to disputes, excessive estate taxes, and assets not being distributed as intended. A lack of trusts or beneficiary designations can create unintended complications for heirs.
  • Ignoring Risk Management: Wealthy individuals often underestimate risks such as lawsuits, asset protection, and long-term care expenses. Without proper insurance coverage or legal structures, their wealth could be vulnerable to unexpected claims or liabilities.
  • Spending Without a Long-Term Plan: A high income or large net worth does not guarantee financial security if spending habits are unchecked. Without a financial plan, individuals may deplete their wealth faster than expected, jeopardizing long-term goals like legacy planning or philanthropy.
  • Failing to Adapt to Market Changes: Financial markets fluctuate, and tax laws evolve. Without an ongoing financial strategy, individuals may miss opportunities to adjust their portfolios, capitalize on new tax incentives, or navigate economic downturns effectively.
  • Not Working with a Fiduciary Advisor: Many high net worth individuals rely on financial advice from brokers or advisors who may have conflicts of interest. Without a fiduciary advisor, they may receive guidance that prioritizes commissions over their best interests.
    A comprehensive financial plan helps mitigate these risks and ensures that high-net-worth individuals make informed strategic financial decisions. Working with an experienced financial planning team can help preserve wealth, reduce liabilities, and provide peace of mind for the future.

Final Thoughts

Financial planning is essential regardless of wealth level. A structured approach to investment strategy, risk management, tax optimization, and estate planning provides clarity, direction, and the ability to make informed financial decisions that align with long-term goals. Having a financial plan in place not only protects your assets but also allows you to take advantage of opportunities that align with your lifestyle and values.

By regularly reviewing and adjusting your financial plan, you can ensure that it remains relevant as your goals evolve and as financial markets shift. The right high net worth financial planning strategy allows you to build a legacy, protect your family’s future, and make confident financial decisions without unnecessary stress.

Next Steps- Get a Plan

If you’re looking for expert guidance tailored to your financial needs, our team at Bonfire Financial specializes in fiduciary, planning-based strategies designed to optimize your wealth. Contact us today to start building a financial plan that works for you.

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