An Unkind Cut

Luke Smith

Luke is a CFP® professional and practicing financial planner. He creates customized financial plans for each family he works with around the country. Luke pursued financial planning to combine his two favorite passions: finance and people. He spends his free time with his wife Heather and their family in Maryland. Outside of work, Luke enjoys the outdoors, golf, reading and writing.

An Unkind Cut

Luke Smith  |  Feb 22, 2023

FOR FOLKS WHO HAVE retired, but aren’t yet age 65 and hence eligible for Medicare, health insurance can be a major concern. These folks typically aren’t covered by their old employer and are now searching for individual health insurance. The good news: There’s a tax credit available—one that I believe doesn’t get enough attention.
The advance premium tax credit, or APTC, is a credit you can take in advance of filing your taxes. It’s used to reduce your monthly medical insurance premiums.

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Meant to Be Spent

Luke Smith  |  Jan 20, 2023

JUST BEFORE CHRISTMAS, I had a call scheduled with a financial planning client to discuss investment and tax strategies, with an eye to making sure everything was squared away before year-end.
This client is a retired executive who was successful because of her attention to detail. Her retirement is no different. She’s savvy and loves to get into the weeds of financial planning. As a financial nerd, that’s fine with me.
Naturally, given her personality,

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Stealing Joy

Luke Smith  |  Jan 17, 2023

IF YOU’RE A HISTORY buff, you know how difficult life was during the 1930s. In our modern American world of plenty, it can be hard to appreciate what life was like during that period. The Great Depression, as it was later dubbed, was a time of incredible strife and struggle.
Today, we have an unemployment rate of less than 4%. During the 1930s, it reached 25% in the U.S. Think about that. A quarter of the country was looking for work to feed their family,

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Eye of the Tiger

Luke Smith  |  Dec 15, 2022

IT’S BEEN A TUMULTUOUS year for diversified investors. Usually, when stocks are down, bonds are up. Not this year. The U.S. stock and bond markets have both suffered double-digit losses. That includes the Treasury bond market, widely considered to be a secure and low-risk place to invest.
A widely accepted measure of risk is a portfolio’s stock-to-bond ratio. More in stocks usually means more risk. But in 2022, whatever an investor’s stock-to-bond mix, investment results have likely been painful.

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It’s Just a Tool

Luke Smith  |  Dec 1, 2022

MY WIFE AND I ARE expecting our first baby in March. In preparation, we’re converting what used to be an office into a nursery. We’ve bought a crib, glider chair, curtains and dresser for the new room. But we also needed to find a place to put the desk and furniture that was in the office. We decided to move the office into what is currently a quasi-sunroom.
When we bought the home, our inspector disclosed that the sunroom was likely built by the homeowner and wasn’t up to code.

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Go Ahead, Spend It

Luke Smith  |  Nov 24, 2022

PERSONAL FINANCE gurus and bloggers will tell you that lifestyle creep—the tendency for spending to rise along with income—is one of the greatest barriers to building wealth. While that’s sometimes true, I believe it can also be a source of joy and reward.
After all, while we might work hard to get a pay raise or earn a big year-end bonus, what a lot of people are really striving for is the ability to increase their spending.

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Striking a Balance

Luke Smith  |  Oct 20, 2022

LIFE IS THE ULTIMATE juggling act. We need to balance work, family, hobbies, friends, money and passions. All play and no work won’t keep the electricity on—but all work and no play will make Jack a crummy dad. To do both, we must have balance.
Balance can be observed in all areas of life. Grass needs water to grow, but too much and it’ll drown. Difficult experiences are hard, but often they make us stronger and wiser.

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Runner’s High

Luke Smith  |  Oct 15, 2022

I’VE RECENTLY BEEN reading and listening to health experts who study the brain chemical known as dopamine. I’m no health expert and I don’t claim any specialized knowledge on the subject, but I’ve learned dopamine is widely considered to be the “pleasure chemical.”
Think about the feeling in between bites of chocolate cake, when we know just how good that next bite is going to be. As we anticipate our reward, our dopamine spikes,

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Starting at the End

Luke Smith  |  Sep 28, 2022

MY FAVORITE BOOK of all time is The 7 Habits of Highly Effective People. The title may be the only thing that author Stephen Covey has ever written that I don’t like. This book and all of Covey’s work are exploding with life, integrity and meaning. I believe he does an incredible job conceptualizing the most important questions of a well-lived life. If you can’t tell, I’m a bit of a disciple.

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Everything Compounds

Luke Smith  |  Sep 23, 2022

I’VE ALWAYS BEEN fascinated by compounding. I discovered the concept at a young age. The idea of money making money was earth-shattering to me. Do you mean to tell me I don’t do any physical work and the money just grows? Yes, and—with enough time and interest—it can grow at lightspeed.
I was all in. I searched for everything I could on the subject. This is where my love for financial planning began. I wanted to follow all the rules of compounding: save early,

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Can’t Stop Themselves

Luke Smith  |  Sep 14, 2022

I OFTEN MEET PEOPLE who have saved more than enough to retire. In my role as a financial planner, I share numbers with them showing that, if they retire today, there’s a high degree of certainty they’ll never exhaust their savings. I often tell them that, if they ran out of money, it would be because capitalism failed, and we all might as well learn to hunt and gather.
Yet few of these people retire.

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Moving the Goalposts

Luke Smith  |  Sep 7, 2022

EARLY IN MY CAREER, I pursued a rigorous financial industry certification. Among the hoops I had to jump through: passing a seven-hour exam.
For 18 months, I woke up every day before work and studied for an hour. I found that consistency far more helpful than eight-hour weekend study sessions. Thanks to my daily commitment through the workweek, I only had to study for one to three hours each Saturday and Sunday.
Still, I didn’t want to get up most mornings.

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