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Levin: How to keep fear or greed out of your investment portfolio

In preparation for a client meeting, I e-mailed the client and said, “You can be greedy or afraid, but not both.” For a couple of years, this client basically said things like, “I am really worried about what is going to happen in the market; how can we get stock market returns without the risk?”

After a great 2019 in the markets, I suspect that many of you may be experiencing similar thoughts. You can’t get great returns without risk. It is not possible. Fuhgettaboudit. Fear and greed are consistent combatants in a tug-of-war that leaves you emotionally battered and more reactive than necessary. Rather than being ping-ponged with the news or market fluctuations, here is a better approach.

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Levin: You just might be better off by accepting financial planning mysteries

In his book, “What the Dog Saw,” Malcolm Gladwell talks about puzzles vs. mysteries. Regardless of how difficult it may be to understand, puzzles have solutions. If you work hard enough, you can solve them.

Mysteries have no answers because there are too many variables that affect outcomes. Mysteries are about uncertainty. In fact, we tend to overcomplicate them by absorbing too much information.

As the year comes to a close, I was thinking about how often we try to turn the mystery of financial planning into a solvable puzzle.

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Levin: How to get tax benefits from giving in the post-tax reform world

In the movie “Knives Out,” an 85-year-old mystery author of enormous means has decided he no longer wants to financially support any of the adults in his family.

Needless to say, he doesn’t live much longer after he tells them (this is not a spoiler), and the question of whether it was a suicide or a whodunit colors the film.

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Levin: It’s a good time to notice those who are struggling

Soon we will gather around our Thanksgiving tables, expressing gratitude for the good things in our lives. We will probably be sitting with those who share with us more similarities than differences. For some reason, this Thanksgiving, I am thinking about “The Other.”

The Other are those who are socially, economically, politically, religiously or simply just different from us. Not only do we not connect with them, but we may make them bad in order for us to be good.

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Levin: Taxes don’t have to be as painful as we make them out to be

Taxes can’t be fair. There is a huge gap between a 0% tax rate where services that industry can’t deliver are otherwise covered and a 100% tax where there is no incentive to work for pay. Any numbers in between will seem fair to some and not to others. In Minnesota, we are acutely affected by taxes and we have three choices: eliminate them, limit them or appreciate them.

A music lover can listen to Austin’s bluegrass, Nashville’s country, Seattle’s grunge, or Miami’s bass — all in cities in states with no income tax. If you don’t need to earn your living here, you can eliminate state income tax by moving. We have had many clients who have done so. People often turn this departure into a moral issue, but set aside the judgment and view it through the cost/benefit lens and you may someday make a similar choice.

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Levin: It is time to talk about the family cabin

“Too many parents make life hard for their children by trying, too zealously, to make it easy for them.” So said the 18th-century German statesman and author Johann Wolfgang von Goethe.

While his thought may be true, I often find the opposite occurring when it comes to estate planning. Because parents are often not open with their adult children about their parental intentions, or worse, because they want the kids to figure it out, chaos may ensue. Let’s look at a true Minnesota example. 

The family cabin tends to be a lightning rod for inheritance issues for a host of reasons. The cabin is not just a structure; it is an archive of fond memories. Unfortunately, when the cabin is left to the children, new memories are created that are usually not so fond.

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Levin: Enhancing your life shouldn’t be a chore, so get rid of that bucket list

en someone shares with you that they have an incurable illness, is one of the first things you want to know is how they are going to change their life?

Educator Bruce Kramer, in a memoir he wrote with journalist Cathy Wurzer after receiving a diagnosis in 2010 of amyotrophic lateral sclerosis, or ALS, observed, “I know that I am dying. But this is not new knowledge, and it is not ALS. It has always been so. Disease only changes the circumstances and the speed.”

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Levin: Long-term care, climate change and your finances

There would seem to be nothing in common between long-term care and climate change. But there is. Insurance companies cannot properly price it. This is evident to anyone who has seen their long-term care insurance or homeowner’s insurance costs continue to increase. If insurance companies are stumped, how do we plan for ourselves? Let’s take each issue separately.

Rather than go into the types of long-term care policies, let’s simply think about whether you need the insurance. I am generally ambivalent about the coverage because it is unclear whether it provides any real financial advantages. Here are some reasons it may make sense to own it.

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