Wealth Actually

The municipal bond market has been long-prized as a stable, tax advantaged income generator for individuals, After years of a low interest rate environment, the asset class is getting renewed attention . . . And it’s not just from investors! Tech disruptors are eyeing the space and they see a massive, disjointed uncoordinated market in need of modernization. I spoke with STEPHEN WINTERSTEIN on the state of the municipal bond market. He has a 360 degree view of the muni bond space. Steve is the Founder of SP Winterstein and Associates which advises dealers and buy-side firms on municipal fixed income data and technology procurement, vendor engagement, workflow, and market structure. He has over 35 years experience in municipal SMA and mutual fund management, electronic trading, fintech. Most recently, he was head of municipal fixed income at MarketAxess and head of Capital Markets at Alphaledger. We’ll tackle his view of thoughtful municipal fixed income management, the size, delivery and fractionalization of the market and the technological challenges faced. Finally, we’ll get some input on where Steve thinks AI, Blockchain, LLM’s and some of the other buzzy words out there may have some real world impact on the asset class. Background Take us through your career . . . and your start in the Municipal Bond space Portfolio Manager – Meridian Asset Management Managing Director & Senior Vice President, Head of Municipal Fixed Income – PNC Head of Municipal Fixed Income Strategy & Research – Wilmington Trust Head of Municipal Fixed Income – MarketAxess Head of Capital Markets – Alphaledger Managing Partner – SP Winterstein & Associates, LLC Investing Process Discussing the two pillars of Muni Investing – Credit and Duration Fallacy of being able to predict interest rates Spending Calories on Credit Research “Bus Map”- incorporating client input in the design/choice of investment constraints The Municipal Bond Market The Size of the Muni Market and the challenges that causes The fractionalized nature of muni market Typical means tf transacting Brokerage vs SMA vs fund Problems with indexing Where can technology help? Pipe-building, blockchain, AI review of docs, what else? Where are the initiatives of improvement?  What is holding things back? In your mind What is the solvable low-hanging fruit?  What isn’t? Where does this help the municipality? Where does this help the market participant? Where does this help the investor? Going Forward With interest rates normalizing- any glimpses into Steve’s crystal ball? Getting rid of tax exemption solves the paradox of the heterogenous borrowing base (institutions of all flavors and sizes) and the homogenous lending base (individuals) by broadening the lending base. While removing the tax favored status would raise borrowing costs, it would improve liquidity – which problem do you want to solve in a world where infrastructure so desperately needs funding? How do listeners reach out to you to find out more? STEPHEN WINTERSTEIN ON LINKEDIN https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

The CORPORATE TRANSPARENCY ACT is less than a month away from going live and the wealth management industry doesn’t seem to be too worried about it. That worries me because it affects at least 32 million entities according to FinCen- including most small businesses in this country. States like New York may be enacting laws to mirror the disclosure requirements at the state level. Non-compliance is expensive and could lead to jail. How to manage these reporting responsibilities is going to be a big issue in the wealth space. I covered the general framework in June with attorney Stephen Liss here: EPISODE 134. Today, we’re going to speak with friend of the podcast, JOHN WILLIAMS on the CTA and 2024. He is the President of the Williams Law Firm in Delaware and President of INCNOW.COM, a corporate formation firm. We’re going to talk about taking on this responsibility as an advisor and what businesses (big and small) might expect in 2024 and beyond with this new mandate. Corporate Transparency Act- A Quick Review 1) Whom does it apply to and how big is this lift? 2) What needs to be reported? Do we know how at this point?3) By whom exactly?  Client?  Advisor? Paralegal?4) What is the timing for reporting? How long do you have to report changes? Can you correct mistakes?5) What are the penalties for getting this wrong? For Advisers, RIA’s, Lawyers, CPA’s and MFO’s 6) How much time should compliance take?  Who is responsible? Simple ownership (90min) vs complex ownership Change in ownership If something goes wrong, who is liable (i.e. who goes to jail)? Paralegal liability 7) What are best practices for compliance? For clients? For advisors suggesting entities? For Administrators? 8) Who should be in this business?  Headcount? Is there liability insurance for advisors/admins? Are Law firms ready for this?   RIA’s and MFO’s? CPA’s looking to “help”? 9) What is a realistic cost for this?  Especially given ongoing service and liability?  Will clients understand what they are paying for and why? Can this be AI’ed away? 10) How are you thinking about it (for your business)? Is it a profit center? Is this for the “Faint of heart” or the tourist? Is there a danger in treating this as an accommodation? 11) Practical questions- Who is a control officer?  senior officers / directors / others (trustees)? An incorporator? Series LLC’s = multiple reports? Information sharing between FINCEN, IRS, DOJ others?  Is Privacy over? Should everyone get a FINCEN number? Are we entering a new era of corporate governance and record keeping for clients and their businesses? (I.e. is corporate governance going to be a “real thing” going forward?) How to Find John Williams and his firm. INCNOW.COM TWITTER THE WILLIAMS LAW FIRM https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

While all families in the U.S. should have an estate plan, a comprehensive plan is particularly important when your family ties and assets span more than one country. Estate planning can be a challenging task for anyone, but add multiple citizenships and foreign assets into the mix, and it can become formidable. That said, failing to have a plan in place can leave your family at risk. To help us navigate these issues, we have estate planning attorney SHANNON MCNULTY with us to talk about how to protect your family when you cross borders. Biography Shannon McNulty is an estate planning attorney and Founder of THE VILLAGE LAW FIRM in New York City, She provides comprehensive tax and estate planning for New Yorkers and their families. Shannon has a particular focus on global families with young children. Shannon has earned the CFP® designation from the Certified Financial Planner Board of Standards. And she is on the Board of Directors of the Estate Planning Council of New York City (with me). Shannon is host of the GLOBAL VILLAGE LAW AND MONEY PODCAST– a resource to help foreign nationals make smart legal and financial decisions. Outline Tell us how you came to work with global families in your practice. Why is it so important to for global families to have an estate plan in place? What are the basic things that an estate plan for these families should address? Guardianship for kids; Arrange for the fast, easy transfer of your assets; Incapacity planning; Minimize taxes Can a parent designate a guardian for their children who does not live in the U.S.? What happens if no guardian is designated? Can you explain how to make sure your assets quickly go to the people who you want to have them if you pass away? If your kids are minors, who will manage the assets for them? What is incapacity planning? Why is it important? What do global families need to know about taxes in the estate planning context? Review Before we finish, maybe you can give us a recap of the essential documents that global families living in the U.S. should have in place? Some comments on Shannon’s Podcast https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

JARED DILLIAN is one of the authentic unfiltered voices in finance and trading. He is also a true polymath. His newsletters include The Daily Dirtnap, a daily market newsletter for investment professionals, and We’re Gonna Get Those Bastards, which is about everything “depraved”, especially finance, culture, music and sex.   He has a new book coming out in early 2024 called “No Worries” which brings his unique perspective to personal finance topics with the goal of helping people reduce anxiety around the wealth building process. https://www.amazon.com/No-Worries-live-stress-financial-ebook/dp/B0BZZFQPBG/ Back to the polymath part . . . In his spare time, Jared is a progressive house DJ, a short story writer, and speaks frequently on mental health issues at financial institutions.  It’s Jared’s ability to cultivate his creative side that sets him apart from the rest of the noise in the financial world. JARED’S BACKGROUND –  Early Life and the Coast Guard Lehman Brothers- The Experience and the Newsletter South Carolina HOW DID JARED GET INTO THE WRITING? (HE STARTED EARLY!) THE NEWSLETTERS – THE DAILY DIRTNAP and THEN “BASTARDS” THE TWO RECENT BOOKS – WE”RE GONNA GET THOSE BASTARDS https://www.amazon.com/Those-Bastards-essays-creativity-meaning-ebook/dp/B0BZST4Z5P/ – NO WORRIES -HOW DOES WHAT YOU DO INVESTMENT-WISE CONTRAST WITH THE CONVENTIONAL WISDOM OUT THERE? TRADITONAL vs SOCIAL MEDIA DJ / MUSIC / FICTION – HOW DO THESE ENDEAVORS HELP YOUR WRITING? WHAT ARE YOU WORRIED ABOUT CURRENTLY (MARKETS OR OTHERWISE?) HOW DO WE FIND JARED? WWW.JAREDDILLIAN.COM https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

https://open.spotify.com/show/51hVAo0WB8Lp1ECeyCWZhC “September 29, 1913: the steamship Dresden is halfway between Belgium and England. On board is one of the most famous men in the world, Rudolf Diesel, whose new internal combustion engine is on the verge of revolutionizing global industry forever. But Diesel never arrives at his destination. He vanishes during the night and headlines around the world wonder if it was an accident, suicide, or murder.” Author, DOUG BRUNT, takes us on a journey into the life of this modern day Tesla. We talk about his latest book, “The Mysterious Case of Rudolf Diesel.” In this wide-ranging discussion, we get into the world of writing, the entrepreneurism of being an author, the differences between fiction and non-fiction and his “Dedicated” podcast with the leading lights in the publishing world. It’s a great listen for budding authors, readers and entrepreneurs. https://www.amazon.com/Mysterious-Case-Rudolf-Diesel-Deception-ebook/dp/B0BV123PC8/ref=sr_1_2?crid=34B7KZ2Y3XBDE&keywords=doug+brunt&qid=1694454066&s=digital-text&sprefix=brunt+%2Cdigital-text%2C128&sr=1-2 Doug’s Background From Entrepreneur to Writer Fiction to Non-Fiction- What is different? How did you research the book?Whom do you lean on for advice/notes as you go through the process? The Mysterious Case of Rudolf Diesel What did you learn about the man in your research?The device to interject Rockefeller and Wilhelm for context Diesel’s seismic impact- why has he been forgotten? Where do you place him in the pantheon of inventors? The Dedicated Podcast What do you learn in those discussions?How do we keep track of your podcast?When does the book come out and where do we buy it? THE MYSTERIOUS CASE OF RUDOLF DIESEL DEDICATED PODCAST https://open.spotify.com/show/30nZjASHZdffdfDanIaAgz DOUG BRUNT TWITTER (@dougbrunt) https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

Philanthropy is one of the most important tools for families to strengthen their communities, establish their legacy and communicate their values – both inwardly and outwardly. What happens when the organizations that receive family resources don’t fulfill the donor’s intent? What if the charities mean well, but aren’t effective? What if the charities use the resources for something else entirely? Well, these issues came up in a big way when the Robertson Family of A&P Supermarket fame disagreed with the way Princeton handled the proceeds of a $35 million gift. Author, DOUG WHITE is going to lay out the case, explain where it went wrong, and give us some lessons on how to avoid future quagmires around donor intent. https://open.spotify.com/episode/4H0MEi1bLT697JKlX5Qquj?si=zculG00TSL6n_Og5eT8jQw DOUG WHITE, a long-time leader in the nation’s philanthropic community, is a 5-time author, teacher, and an advisor to nonprofit organizations and philanthropists. He is Co-Chair of the FoolProof Foundation’s Walter Cronkite Project Committee and a governing board member of the Secular Coalition of America. He is the former director of Columbia University’s Master of Science in Fundraising Management program, where, in addition to his extensive management responsibilities, he taught board governance, ethics and fundraising. He is also the former academic director of New York University’s Heyman Center for Philanthropy and Fundraising. He has also been an advisor to BoardSource, the nation’s leading organization dedicated to “building exceptional nonprofit boards and inspiring board service.” Doug has written five books: “Wounded Charity” (Paragon House, 2019) “Abusing Donor Intent” (Paragon House, 2014) “The Nonprofit Challenge: Integrating Ethics into the Purpose and Promise of Our Nation’s Charities” (Palgrave Macmillan, 2010),  “Charity on Trial: What You Need to Know Before You Give” (Barricade Books, 2007), “The Art of Planned Giving: Understanding Donors and the Culture of Giving” (John Wiley & Sons, 1997) His expertise includes fundraising strategy, board governance, improving organizational processes, and ethical decision-making. Introduction and Doug’s Background The Role of Philanthropy Help for Donors Help for Charities Donor Intent – The Robertson / Princeton Case The Robertsons (Descendants of Charles and Marie Robertson) Source of Wealth (A&P Supermarket Fortune) The Desire to Build the Woodrow Wilson School After JFK in 1961 The Gift- $35 Million in 1961 (Robertson Foundation: > $900mm in 2008) The Mistake in Structuring (and codifying) the Gift Where did Princeton veer off course? Funds used for other purposes The Conflict between Charity and Family when the Patriarch Died The Expense ($45mm in legal fees by both sides!) Princeton’s Explanation: Good practices for families making the gift (and monitoring it) Establishing and Codifying Donor Intent Balancing Rigidity and Flexibility around terms and uses of the gift Drawing up a Binding Agreement Communication (Oversight at the Charity and the Family) Performance Metrics Accountability Structures and Procedures https://www.amazon.com/Abusing-Donor-Intent-Robertson-University/dp/1557789096 DOUG’s CONTACT INFORMATION https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

This episode is a little different. I’m going to talk about the importance of balance and health. This time I’m the example. I’m hitting the half century mark this year. After 3 years of COVID disrepair and neglect, I knew I needed a change. In this episode, I’m going to describe those changes and what it’s done for me. I’ll also be commenting on the significant gap between health, fitness and the wealth management industrial complex. In brief, I think the industry has a huge blind spot around the intersection of health and wealth and is dangerously ignorant about the widening time and expense divide between one’s late career and death. To help me make sense of this is, noted expert, Phil Pearlman. DR. PHIL PEARLMAN, is the founder of THE PEARL INSTITUTE. He is an expert in the areas of personal health, human change processes, and systems integration. Phil and I didn’t work together. However, I hope his unique perspective on balancing career, fitness, mental health and other facets help put my experience into context and give the audience some lessons from my journey. About Phil DR. PHIL PEARLMAN, is the founder of THE PEARL INSTITUTE. He is an expert in the areas of personal health, human change processes, and systems integration. Phil is the author of The Primecuts Newsletter, which focuses on cultivating a healthy lifestyle, mindset, and identity through the powers of creativity, reinvention, and grit. Phil is an advisor to and investor in social/digital media companies across stages of development. Previously, he served as CBO and CMO at Osprey Funds, EVP at Bank OZK, Executive Editor at Stocktwits, and Interactive Editor at Yahoo Finance. Phil earned a doctor of psychology degree from Argosy University. He lives with his wife and two boys in Montebello, New York. https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

“Venture Capital” is a small subset of private equity surrounded in mystique and fable. In reality, the world of start-ups is filled with the highs and lows of hard work, loneliness, crushing disappointment and, sometimes, unbelievable success. The bold founders usually have a vision to disrupt the status quo and build a new world around that idea. The VC community is a unique culture that understands the founders’ motivations. It provides the resources, support and discipline to help them prove their idea, grow, survive, adapt and thrive in the face of the longest odds. They say “it takes a village.” In “Venture Capital”, the hope is that these mavericks are surrounded by an ecosystem of investors that understand the disruption they feed and have the patience to let them manifest their vision. JULIE FREDRICKSON is the Managing Partner of CHAOTIC CAPITAL. She will help us understand what it takes to survive and thrive in this space and skewer some sacred cows along the way. Julie’s Background “I’m a founder with experience in retail and e-com businesses across all stages. I’ve raised from venture, PE, and crazy people. for everything from cosmetics to online advertising. A couple of my companies even exited and are still around. My first company was Coutorture Media, a luxury affiliate publishing and e-commerce network acquired by Sugar Inc. I then founded playAPI, a developer tool kit and SaaS platform for digital brand marketers. Most recently I went physical with Stowaway Cosmetics a direct to consumer cosmetics brand, which is now part of WIN Brands Group.” Venture Capital Generally- What does success of individual investment look like?What does success of portfolio look like? Differentiation 1. Underwriting Businesses: Asset-Light & Equity-Efficient:  “We focus on ventures fitting the VC mold, prioritizing scalable, asset-light companies that require minimal equity financing. Two of our most successful seed investments raised <$50 million to achieve unicorn status while earning hundreds of millions of dollars in revenue and tens of millions of dollars in profits per year.” 2. Founder’s Unique Point Of Leverage:  “Every successful startup has a unique point of leverage that allows them to gain escape velocity going from 0 to 1. We seek startups that possess a proprietary advantage such as  Pre-existing customer relationships,  Proprietary community driven distribution channels, or  Innovative technology, to propel their initial growth and achieve escape velocity.” 3. Resilient to Competition: “We invest in companies whose products and solutions would be painful for incumbents to replicate. We look for those that: Cannibalize existing profit centers,  Disintermediate legacy distribution models, or  Require replatforming to create an insurmountable competitive edge.” 4. “Avoiding Over-Complexity: Great startups must maintain maniacal focus while they scale.Acknowledging the high failure rate of startups, we steer clear of those with multiple dependencies, instead concentrating on businesses with a single, transformative opportunity for success” CURRENT CONDITIONS Raising Capital Deploying Capital Macro Environment and its effect on allocators – how much do you stay focused on your mission vs pay attention to what’s happening in the world- how does that work LIGHTNING ROUND QUESTIONS First over the wall vs let others make rookie mistakes Do you diversify investments around and idea? How real is the East Coast / West Coast Capital Culture schism? International? How do you avoid “Jangly key syndrome?” Without giving away the secret sauce, how do you evaluate founders / leadership? Any post-COVID lessons or trends to focus on? Location, WFH, trends in Gen-Z etc?)  DISCLAIMER: THIS PODCAST IS FOR EDUCATIONAL PURPOSES AND DOES NOT REPRESENT AN ENDORSEMENT OF CHAOTIC CAPITAL AS AN INVESTMENT. HOW DO WE STAY IN TOUCH? CHAOTIC CAPITAL https://twitter.com/almostmedia https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

Real Estate investing is seen as the holy grail of passive income and wealth independence. One of the popular facets of real estate investing is the tax advantage that much of the IRS code provides to the owner/operator. High on the list of cocktail party chatter topics is the concept of COST SEGREGATION. It is a way to deconstruct the components of real estate developments, depreciate them faster than the normal life of a building and net the deductions against other income. To explain this concept, MITCHELL BALDRIDGE joins the podcast. The Texas-based CPA and CFP will take us through the ins and outs of Cost Segregation Studies and discuss the importance of solid bookkeeping and delegation for entrepreneurs and other business operators Cost Segregation -Describing the concept – accelerated depreciation and deductions-Potential benefits in numbers-Types of projects where it works (Who is it for?)-Process- getting study, dotting i’s, building in documentation now and forward-Traps for the unwary- Sloppiness, Passive vs Active income, Full-Time Real Estate Occupation, -Recapture- what it is and how to manage it Bookkeeping and Bulletproofing your Business for Future Sale -Importance of dotting i’s-Looking for tax savings-Delegating intensive work-Coordinating with advisors https://www.betterbookkeeping.com/ How do we find you? https://twitter.com/baldridgecpa Links https://www.recostseg.com/ https://baldridgefinancial.com/services/cost-segregation/ https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

One of America’s best (and most quotable) judges, Learned Hand said, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” What happens when the IRS disagrees with the way you’ve arranged your affairs? What do you do when you receive “fan mail” from the IRS (or the State Taxing authority) KELLEY C. MILLER, ACTEC Fellow and Partner at Reed Smith in Washington DC. helps us understand the process of an IRS audit, good practices in dealing with an audit, and inside knowledge of how the process works at the agency. This episode is full of good information on an uncomfortable, but vital, topic for families that are pursuing complicated planning that may catch the attention of the taxman. Background and Good Conduct Rules of Thumb Be Honest Be Prompt Be Complete Be Clear/Organized Be Consistent and coordinated with other tax and gov’t authorities Be Quick to Alert the IRS if issues come up What is the IRS / State looking for? In a word, UNDERPAYMENT . . . or “more revenue.” Listed Transactions (ex. syndicated conservation easements) Unreported income Mischaracterization of gain vs income Filing status (ex. Domicile / Residence – esp. at state level) and Dependents Itemized deductions (Business vs Personal) Eligibility for credits / treatment Sources of “referrals”: Data (Demographics, Internal Data, HNW, UHNW patterns, Social Media, AI in the future?) News, Spouses, Other Agencies (Corporate Transparency Act Implications) Past conduct How is the IRS to deal with? Other states? They are professional and sophisticated but under-resourced Whom are they looking for? Improvements? Potential new staffing and technological investments Is not incorporating your advice team ever a good idea? Civil vs. Criminal vs Collections Departments Process 1) Open the Letter!  (Not a good time to stick your head in the sand) Is it an audit or a request for additional information? What person or entity is being audited? What is the focus of the audit? What documentation is being requested? What kind of audit? Correspondence Audit: The IRS requests additional information regarding a part of your tax return, such as receipts or canceled checks. Office Audit: The IRS requests that you bring specific documentation into your local IRS office- the audit happens there. Field Audit: An IRS agent shows up at your place of business to conduct a face-to-face audit. Taxpayer Compliance Measurement Program Audit: The mother of all audits- one that requires full documentation down to birth certificates to test the Agency’s scoring systems. 2) Notify the team and decide on the response strategy Who is quarterbacking the response and the interaction? Accountant / Attorney / Wealth Manager / COO When should the tax preparer run things vs an attorney? Do you need other expertise? Should you have Attorney / Client Privilege? Very likely. Who is compiling the information? 3) Responding to the request You should respond to the IRS/State within 30 days of receipt How should that occur? Call / letter? Crafting the response letter Supplying the requested information 4) No Action or additional payment? If it’s determined I owe more, what is the process of appeal? What if I don’t have it? Payment plans? 5) Closing the file Documenting the outcome Post-mortem – What practices were audited? Should we do anything different in tax planning Any other storm clouds on the horizon? Lessons Learned- Updating documentation and administration process going forward How Do We Stay In Touch with Kelley? KELLEY MILLER at REED SMITH KELLEY MILLER on LINKEDIN https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/