Gas, Hybrid or Electric: Changing Investment Models

 Gas, Hybrid or Electric: Changing Investment Models

By: Tom Schneeweis & Bob Schneeweis

Within the past week, my brother stopped over to my house, to present his new model of hybrid electric/gas automobile. While certainly different from the gas-based vehicle I have in my garage, I realized it was part of the transition of the auto industry to a new means of propulsion. Knowing absolutely nothing about the process by which a hybrid electric/gas vehicle worked, I asked my neighbor (in this case an engineer who works for SpaceX) to describe the advances in automobile propulsion (gas to electric) and the implications for current and future modes of transportation and auto ownership. In our brief discussion I also came to realize not only how little I really understood about how new forms of automobiles worked but how much I currently depend on outside sales personnel and local service personnel in keeping my gas auto version alive. The move to increasingly electric centered vehicles will likely require the help and service of higher-level service stations and personnel and many current local auto services firms may soon be a thing of the past.

It occurred to me how similar the transition from gas to electric automobiles was reflective of today’s investment transition. Today we are moving from a simple stock/bond portfolio (aka today’s auto’s gas engine) to investment technology that, like cars, are more hybrid and rely on advanced artificial intelligence (e.g., ETFs, modern alternative investments). In short, I have come to understand that all of us will have to move to newer investment approaches to propel us into the future and one that is less dependent on the local investment service stations with less advanced personnel. We also should not necessarily focus on ‘large scale investment management firms’ that hope to sell investment products that may fit their own broad strategy but not your world. We at Yes Wealth have been leaders in modern alternative investments for over 20 years and still work with your individual needs. Simply put, we look forward to helping you in the transition from the current world of wealth management to the future one with more hybrid or advanced forms of investment. 

Please contact us if you’d like to discuss a plan for you:

Yes Wealth Management:

651-426-5854. 

Raising Financially Fit Kids

 Raising Financially Fit Kids  

By: Sarah Johnson, CFP®

 Last summer, as I watched my children almost effortlessly learn to waterski, I was reminded of how much easier it is to learn a new skill at a young age, especially as I then watched my husband’s struggle, who had not waterskied as a kid. This is true with financial literacy as well, however as parents, this is a topic we often don’t think about until our kids are going off on their own. A recent study by Visa showed that only 18% of parents felt their young adult children were ready to manage their money. Certainly, we can do better than this. So how can we make more of an impact on our kid’s future success? Let’s start with what we do know. Studies show that there are two traits which most appropriately predict a child’s future financial stability. These traits are: 1.) An ability to delay gratification and tolerate distress, and 2.) An ability to stay focused. So, without over-emphasizing the focus on money, here are some ways that you can help prepare your child for a secure financial future.   

Pre-school to Kindergarten:  Clear jar over piggy bank  While piggy banks are cute to look at, they lose one of the greatest teaching tools for this age group – a visual. This age is still very much in the “out of sight, out of mind” way of thinking. When they put their savings in a clear jar, they can see it getting bigger with saving, and smaller with spending.  And remember, just as we do with all habits we are fostering at this age – make a big deal out of seeing the savings getting bigger.  Encourage sharing of toys. While parents understand that this is an important lesson as our kids go out into the world to make friends, it also helps children learn to manage and control their emotions. The ability to sit with, and tolerate the feeling of wanting something is crucial to not only their financial success, but their mental health as well. If we can help our children practice patience as they share a toy they want to play with, down the road they will be better prepared to practice that same patience when choosing to let their money grow, rather than buy a big new toy as soon as they see it.   

Elementary and Middle School:  Work on impulse control. Again, the ability to delay gratification is key to success. However, as any parent can tell you, this does not come naturally to kids. It must be taught. When it comes to spending money, encourage kids to wait a few days between the initial “want” and the “buy” especially for all purchases over $5-$10. Kids at this age are still impulsive, and lack understanding of money.  Helping your child put time between the “want” and the “buy” allows you time to talk with your child, and teach them how to properly think through a purchase. Manage anxiety and improve focus. Make sure their homework area is free of clutter, help them learn and practice deep breathing, and make sure that during stressful situations, such as homework, they take brain breaks – get outside, or at least stand up and walk around every once in a while. The brain can only absorb what the body can tolerate. A more focused mind will generally have an easier time evaluating bigger or more difficult decisions, such as those related to money. There will be many situations as kids grow up where they may need to make quick decisions – renting an apartment, buying school supplies, or a car, etc.- and being in the habit of calming down in the face of a complex situation is a great skill to start practicing from an early age.  Should I give an allowance?  This is a personal choice that each family needs to think about and find balance about. This age still needs to be learning that money is something that is earned in order to understand its value, so kids should not be given allowance without some sort of contribution. Do not tie allowance to chores that are expected. Kids need to understand that in a family we help each other. Instead, consider attaching allowance to expectations or chores that go just a little above and beyond.  Another technique that can be used is to have them split their allowance into 3 buckets: Spend/Save/Give. This technique helps foster the idea that saving and giving are expectations, not only spending. Some families even choose to give their child “interest” on their savings.  

High School: Saving for Education. It’s time to emphasize the “save bucket” more, with a focus on saving for education – whether that means a trade school, a 4-year degree, or a skills-based program. Giving at this stage is still important, but can now be of your time more than money (and hey, volunteering doesn’t look bad on a college application). Debt: By the end of high school, make sure to have a talk with your child about the dangers of debt, and how people get themselves in trouble. Particularly student loan debt and credit card debt. Help them understand what a credit score is, and the effect that debt has on it. Kids at this age still struggle with seeing the big picture. Make sure they understand that debt and poor credit will decrease their choices and opportunities in the NEAR future. While working on all of these tips are sure to improve your child’s financial future, most have wonderful mental health benefits as well, it’s a win-win for all.   

Please contact us if you’d like to discuss a plan for you:

Yes Wealth Management:

651-426-5854. 

 

The Circle of Life

 The Circle of Life    

By: Bob Schneeweis & Tom Schneeweis

 YES Wealth Management is a financial advisor firm which helps individuals and institutions to determine what financial path to take, to make sure one remains on that path and if necessary to make corrections to it. But the firm is more than that. YES Wealth Management has a history that is directly linked to the community it serves.  The co-founders (Bob and Tom Schneeweis) are the sons of Mary Lou and Jack Schneeweis who lived in Mahtomedi since their Marriage in 1941 and served the community throughout their lives in government, schools and Scouting. Their belief in “if not you then who?’ in serving Mahtomedi was essential to their lives and that commitment eventually found it’s way to Bob and Tom.

As brothers they both obviously started from the same place (Mahtomedi, Mn.) but took seemingly widely different paths after college.  Bob started his own wealth management firm almost thirty years ago in Mahtomedi and over the years grew not only his firm but a family as well while continuing to serve his community as illustrated by his receipt of the J. Stanley and Doris Hill Legacy Award which honors those who embraced a strong sense of service to others while making a significant difference along the way.  His brother, Tom, took a different path, receiving his Ph. D in Finance from the University of Iowa and selected as endowed research chair at the University of Massachusetts.  During that tenure he also spent his time developing non-profit educational centers, a national journal, educational programs for women and minorities and global investment management firms. All designed to forward education.

Despite their common path as youths, and different paths after, they joined again in 2012. Tom retired from the Academic life and moved his firm’s office (Quantitative Investment Technologies) to the White Bear Area. They found a common set of concerns in understanding that many larger financial firms did not necessarily have each investor’s concerns solely in their sights. Together they reconnected their paths to create something unique (YES Wealth Management) combining Bob’s understanding of the needs of individuals with Tom’s understanding of how modern investment products and services fit into those needs. 

So, when you drive by the old Triangle Park (now Veterans Park) in Mahtomedi and see the offices of YES Wealth Management you now know you are near an Investment Advisory firm which focuses on community but incorporates modern solutions to modern financial problems.  It is not trapped on a staid investment path which focuses primarily on individual stocks, bonds and mutual funds but instead a modern world of investment finance which includes ETFs, modern investments including risk managed products, and global assets. It is Tom and Bob’s attempt to bring the best of their understanding of the investor’s needs with modern investment answers and this was all accomplished in a place close to where it all started. Just to remind themselves, a picture of Mary Lou and Jack on their wedding day is just inside the door. This helps all to remember that the start of YES Wealth was really with them and that the goal of YES Wealth remains to help investors on an Intelligent Path® with Financial care that is Refreshingly Human®.

Please contact us if you’d like to discuss a plan for you:

Yes Wealth Management:

651-426-5854. 


It’s a Brave New World – For Investors

 It’s a Brave New World – For Investors     

By: Yes Wealth Partners

From Bitcoin to Zero Interest Rates, from slowing economies to skyrocketing stocks that defy logic, many people today are confused of both how to grow their investments and how to protect themselves from large “corrections.”  Investors often would like to go back to the world they grew up with where they believed that by finding the right stock/bond balance, their money could grow and also be protected.  First, this was never really true, but it is even less true today as bonds fail to provide much return and even some unexpected downside if interest rates rise.  Despite overwhelming evidence that during periods of investment crisis (most significantly like 2008 and 2020), traditional stock/bond diversification fails to deliver true downside risk mitigation, many still stick with the old beliefs. Today, even most investment advisors still fail to consider “modern liquid” alternative investments which provide real risk mitigation in a down equity market and conservative upside potential even when interest rates rise. So, what are modern liquid alternatives? These are strategies that provide upside potential like stocks do or more conservative returns like bonds used to provide, but are designed to limit the large downside risk of equities or the impacts of rising interest rates on fixed income. Traditional alternatives such as private equity, derivatives, fine art and commodities promise to provide significant return in the long run, but are often not liquid and have high investment minimums.  Unlike most traditional alternatives, liquid alternatives include mutual funds or exchange traded funds that can be bought and sold daily and have investment minimums most individuals can handle. Some of these strategies are called Market Neutral, Merger/Arbitrage, Event Driven and Hedged Equity.  Holding a portion of liquid alternatives in your portfolio can help you reach for return, while still allowing you to sleep at night, knowing you have protection on the downside. 

If you would like to know more about these options, or if you’d like to discuss a plan for you, please give us a call. 

Yes Wealth Management:

651-426-5854

The Present Versus the Past

Those Who Only Follow the Past Are Plagued to Repeat It

By: Yes Wealth Partners

Today our world seems to be so chaotic that people are wondering how safe their investments are and is “just hang in there” or “stay the course” still the best way to go.  They are often surprised and often disappointed when I tell them that investment programs based primarily on the ways things were done in the past (e.g., stocks and bonds) may not be the best way to actively manage assets in the future. Research now shows that stock/bond mutual funds may underperform portfolios which use investment vehicles such as ETFs and/or modern liquid alternatives which are not directly tied to interest rates.  Today our world and the various means of government financial support or control changes so quickly, that individual stock picks or even the S&P 500 may not reflect the changing direction of the economy or its’ performance going forward.  In addition, bond investments in a portfolio may not provide the risk reduction benefits once believed. Unlike most of the last 30 years we may see rising interest rates and actually see the value of our fixed income holdings decline.  Lastly, today fixed income investments that once offered yields near six to eight percent are currently offering two to four percent. 

 

In short, investment opportunities and investment conditions have changed. In this new world, if one’s current portfolio is based on past conditions, it may need to be changed. If you need help in implementing these changes, YES Wealth provides meaningful investment advice using a broad range of modern investment solutions representing the very best in investment advice. 

 

We look forward to hearing from you or seeing you soon.