By Andrew J. Tapparo, MSF, RICP®
First, you should know that I live by the saying “I eat my own cooking.” As a retirement income-planning specialist at Tapparo Capital Management, I make the exact same investment choices for my clients that I make for my own portfolio.
I believe that mimicking the financial recommendations I make to clients is a cornerstone of my success. As a duty-bound fiduciary, my goal is to manage my clients’ money as if it were my own.
Before we dive further into my financial planning philosophies, I’d love to tell you a little about my background.
At an early age, my parents instilled in me the importance of saving money and making smart investments.
At the age of 9, I took over the paper route (remember those?) of my friend who was moving away with his family. Every day after school and on Saturdays, I delivered the local paper on my bike. A few years later, I took over another friend’s morning paper route. Now I was delivering papers before and after school.
Each week, my mother took the money I made from my paper routes and put it in the bank. This type of forced savings was pretty easy as a kid. She would tell me that by saving this small amount of money each week, someday I would have money when I needed it.
When it came time to buy my first car, I fell in love with a used 1979 Chevrolet Monte Carlo—but how would I ever be able to pay for it? That’s when my mom reminded me I had money in my bank account.
I would have never dreamt that my weekly savings over the years would grow to the point where I could pay cash for my first car!
Then, upon graduating from college, my parents gifted me my first shares of stock. It was shares of Merck & Co., Inc. stock. My mom told me they were a pharmaceutical company, and now I was part owner of Merck. And thus my love for smart investments began.
Timing Is Everything
The importance of timing is one of the foundations of smart investing on which I consistently rely. And I don’t mean trying to time market ups and downs; I strongly believe that time spent in the market is more important than trying to predict market fluctuations.
The timing for when funds are needed should be the primary determinant. For shorter-term solutions, say within the next three years, the funds should be invested in money markets and fixed-term exchange-traded funds (ETFs). For needs that are more than three years away, the funds should be invested in equity ETFs.
Personally, since I won’t need to access my funds within the next three years, my own portfolio is invested exclusively in equities. I do have an emergency fund that I keep in a high-yield savings account for unexpected expenses.
Keep Your Options Open
I’m also a strong believer in having options, not just for myself, but also for my clients. Because choices are so important, I set up my portfolio so my taxable and Roth IRA accounts permit me to somewhat control the taxes that I’ll pay in retirement.
Currently, my rollover and SEP IRAs are larger than my Roth IRA. Right now I’m doing Roth conversions up to a certain tax bracket each year. I’d rather be in control of the taxes that I pay during retirement, and paying taxes now on these conversions allows me to save on taxes when I’m older.
Maintain a Wise Balance
The last thing I’ll mention is that it all comes down to what’s important to us. Saving money and making smart investments today allows us to enjoy an independent future where our money outlives us.
That said, we need to live and enjoy our lives today. We cannot sacrifice everything today for a tomorrow that may never come. That’s why, in addition to timing, balance plays a very important role in how I make smart investments for my own money.
Ready for Professional, Smart Investment Advice?
The Tapparo Capital Management team has the knowledge and experience to help you make tax-smart retirement income-planning choices for your long-term success. Our firm can guide you through the same smart investment philosophies I use for my own portfolio.
To schedule a “Get Acquainted Call” to see if we are a good fit for each other, call 978-887-1121 or email firstname.lastname@example.org.
Andrew Tapparo is a fee-only financial advisor at Tapparo Capital Management, a financial planning firm in Topsfield, MA, helping clients turn their savings into a retirement income that lasts. Inspired by the quote “Choose a job you love, and you will never work a day in your life,” Andy founded Tapparo Capital Management in 1997 with a passion for helping clients enjoy a truly worry-free and fulfilling retirement and experience financial freedom. As a Retirement Income Certified Professional (RICP®), he designs retirement strategies along with sound money management to help clients retire with confidence.
Andy holds a Bachelor of Science in Industrial Engineering from Rochester Institute of Technology in Rochester, New York, and a Master of Science in Finance from Bentley University in Waltham, Massachusetts. Specializing in retirement income planning, Andy completed a comprehensive financial industry education program at The American College of Financial Services and was awarded the Retirement Income Certified Professional® designation. He is frequently quoted in the media as a financial expert.
Andy and his wife, Susan, live in Topsfield, Massachusetts, and have two beautiful daughters. Outside of work, he is an automobile enthusiast, enjoys taking road trips, and loves the Outer Banks of North Carolina. In his spare time, he volunteers with the local high school varsity girl’s basketball team as the team statistician and runs the team’s website. He is passionate about supporting charities that serve our veterans and their families. To learn more about Andy, connect with him on LinkedIn.