BS blog 10-11

In his latest column, Bill Schultheis challenges investors to focus not on sectors and stocks but rather, on personal inflation rates, asset allocations, and saving and spending. He reminds readers that focusing on financial planning decisions that can be controlled, will actually determine whether financial goals are reached in the end.

BS blogIn my latest column, I discuss the popularity of index funds and the advantages these funds can bring to a portfolio. If you follow the Coffeehouse Investor or believe in its three principles of investing, none of this is new to you. However, the theory isn’t just about index funds. I elaborate in my column, “…index funds are not some magical investing tool that will make your life any easier in addressing the important components of your financial plan. Heck, I could invest in a low-cost, low-turnover, actively managed fund and basically expect the same results as an index fund over the next 20 years.

The elusive, magical investing tool can only be found in you, in your ability to sock away enough money to reach your retirement goal, in your ability to live within your means throughout retirement, and in your capacity to stay committed to your investments during the next bear market when financial pundits are predicting an end to the world.”

I started this Coffeehouse journey over 20 years ago to make a difference in investors’ lives. Coffeehouse Investors recognize that their portfolios are not measuring sticks for self-worth, but simply a resource that accentuates who they already are in relation to their families, friends, co-workers and communities.

Have you found your magic investing tool yet?



We spend most of our lives saving money. Like a squirrel storing acorns, we devote our working career to saving money in buckets with silly names like 401K, 403b, Roth, and IRA. We become so good at saving that when the time comes to start spending these buckets of money, we freeze. This  Wall Street Journal article depicts what we see frequently when we meet with clients for the first time.

As an investor, you have to reverse your thinking and allow yourself permission to start spending. However, without a solid financial roadmap that leads you to the end of life, knowing how much to spend and a proper withdrawal rate can become difficult to discern.

Build out your financial plan to the very end, employ professional expertise if necessary, and enjoy your retirement. You have earned it.

CH - Einstein quote
There is an entire chapter devoted to compounding in THE COFFEEHOUSE INVESTOR book. We talk A LOT about this simple fantastic perk to saving money. However millions of investors miss out on this concept because they do not allow their investments a chance to sit and compound.

In the book, a $10,000 investment is given as an example of what can happen when you let your investments compound over a 20-year period… a $386,140.00 gain! This $10,000 investment is a large-scale example but let’s simplify this down to our everyday life choices. Vanguard breaks down a cup of coffee and what can happen if you miss out on compounding frivolous expenses over a 30-year period.

The point is not to focus on the daily minutiae but rather, see the big picture of investing as a whole. Don’t miss out on simple concepts like compounding.


When we sit down with folks to discuss investment strategies and financial plans, we don’t analyze Monte Carlo methods or evaluate standard deviations. We ask questions about their lives, their families, and goals for the future. What activities do they enjoy doing, what kind of legacy do they want to leave behind, what are their current financial concerns? We focus on people and their everyday lives.

Jonathan Clements shares a list of his greatest pleasures and derives one common denominator – a person doesn’t need to be wealthy to enjoy these things. We tend to agree. The Coffeehouse Investor book is full of enjoyable experiences including hiking, camping, and baking pies. Our day-to-day routines should be full of small joys, that over the course of a lifetime, create self-fulfillment and happiness.

What is on your greatest pleasures list? Do you know? If you don’t, it’s time to create your own list and start living a life full of joy and leave the Monte Carlos behind.



“After living this routine for many years, I realized on a cold, desolate mountain, somewhere in the middle of nowhere, I was addicted to the clutter of everyday life, and it finally dawned on me that the clutter in my life might be keeping me from pursuing my dreams and living a life I would choose to live if given a chance to do it all over again.

This left me with two options:

Remove some clutter and strike a balance, or pray that someday I would get a second chance.

It’s easy to strike a balance on Denali – the balance of sitting tight in a blinding snowstorm and moving higher when the weather breaks, in search of a goal called the summit. The real challenge we face is to strike a balance in the valleys of our everyday lives, because it’s in the valleys – not on some desolate mountain – that we pursue our dreams, live our lives, and make things happen.” – Bill Schultheis, The Coffeehouse Investor

Can you define the clutter holding you back? Don’t let the noise of Wall Street cloud your valleys, stay focused on what matters the most.

Hedge funds

For some reason, investors are drawn to complicated investing strategies, and over the past twenty years, Hedge funds have been at the top of the “complicated” list.

Hedge funds have traditionally had an aura of “sophistication” about them. A perusal of the daily financial news will highlight comments by some prominent hedge fund manager. Nevertheless, hedge funds have collectively trailed the returns of the Standard & Poor’s 500 Index for eight consecutive years ending 2016.

As this article points out, more and more college endowment funds, realizing that “complicated” means “underperform”, are moving toward the straightforward portfolio principles embraced by the Coffeehouse Investor and Soundmark Wealth Management.

money habits

Our ideas and beliefs about money are often derived from our family members. How they manage their finances, ways they save money, and where they choose to spend money can have lasting impressions. Who taught you about money? Did a parent set up a savings account for you? Were you paid for chores or encouraged to work at a young age?

Teaching children about diligently saving can set up offspring for a lifetime of success. The same goes for spending, we often forget to instruct our kids on responsible spending – enjoying what we earn and putting it towards something we desire. My six year old is learning this lesson the hard way. Instead of spending his allowance each week on frivolous instant gratification indulgences, we have set up a system to encourage him to save his weekly allotment toward a larger goal, in this case, the Lego Millennium Falcon. It’s not my first choice for him, but it’s something he wants and will take him a long period of time to save for.

The Humble Dollar discusses the challenges of teaching our youth about finances and provides a few creative ways to learn about money. Don’t get thwarted by the method of teaching, but rather, just start a conversation about the cost of items and the various methods to pay for them. The same goes for investing. We hear about countless readers who give the Coffeehouse Investor book to young grads just starting out in the workforce.

You may never know the lasting impact your own financial teachings and habits have on others. Our little ones are always watching, listening, and learning. Strive to be a good financial steward.


Guest writer: Julie Klingler

communication-cartoonTalking about money can be a difficult subject and even more so, with your partner. It can be a major hurdle to overcome without an easy flow of communication. In his latest column, Bill outlines the steps to achieve good financial health. He acknowledges that you and your partner may have grown up approaching money issues differently, which can create their own challenges. However, forming an emotional space where both of you can talk freely is the first step to success. The big challenge is to move forward with this understanding, recognizing that although there will be differences, you still can create financial harmony.”

Pie recipe2

“Investors who spend time selling stocks and mutual funds that go up in price are missing out on the largest part of the money pie because they don’t give their investments a chance to sit there and do what they are supposed to do – compound. If you own stocks or mutual funds and reinvest the dividends, your money is put to work in the biggest piece of pie, and the time you save by not obsessing over buy-low and sell-high strategies can be used to pursue those things in your life you really have fun at … like baking pies.”  –The Coffeehouse Investor, pg. 79

We are huge fans of compounding here at the Coffeehouse, it is the gift that keeps on giving. Every year around Thanksgiving, we dedicate time to share the best part of the money pie and the advantages investing for the long haul can bring. We also really appreciate a good pie, we have published the pumpkin pie recipe from The Coffeehouse Investor book for your enjoyment.

From our Coffeehouse family to yours, Happy Thanksgiving!

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