Gratke Wealth, LLC
David Gratke’s belief is that a life in balance is vital to reaching your financial summit: that picture of what your financial future looks like, when it will be and how it will feel when you reach it. When David’s not helping his clients plan for and achieve their retirement and financial goals, his trademark boots can be found en route to the slopes, cyclocross track, climbing a peak or riding the waves on the Oregon Coast.
Having been raised in a banking family, and after graduating from the University of Oregon with a BS in finance, David was employed by some of the financial industry’s giants in 1980. He has seen the industry change over time. He’s seen what works, and what doesn’t, and he takes pride in his ability to provide the modern equivalent of the trusted financial advisor of the past. Today David’s boots can be found at his own practice: 1915 NW Amberglen Pkwy, 4th Floor Beaverton, OR 97006.
BS, Finance, University of Oregon
Hourly and Fee
Gratke Wealth, LLC is a registered investment adviser in the State of Oregon, California. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.
"How the world’s greatest financial experiment enriched the rich"
The main reason I think someone would consider rebalancing their asset allocation is to achieve, or maintain a specific risk profile. That being said, it should be based upon a repeatable, demonstrable process that shows your current risk profile (before rebalancing) and the proposed risk profile (after rebalancing).
Although taxes are always important, one CPA I know would say to his clients, ' you were never entitled to 100% of the profits of your taxable account, rather, 1-minus your marginal tax rate.. That's good advise. I would rather manage the risk of all my assets, including the taxable account, than avoid rebalancing those taxable assets, leaving them with more risk going into a sharp market downturn.
The key is to have a process that shows you current and proposed risk scores. Hope this helps.
General rule of thumb is if your investments can earn more than your debts, maybe you keep some of the debt. Check the interest rate on your credit card, if it is anything in the double-digits, mid-teens or higher, then pay it off. When one pays off debt, say that debt has an interest rate of 12%, it is like you have just 'earned' 12% on your money. Hope this helps out.
Although you do not indicate, are you still working and thus have an employer currently offering you this 401k? If so, then you may consider taking out a loan against your 401k account balance. The IRS rules say the max you can take out is 50% of your 401k account value, or the lesser of $50,000.00. This may, or may not accomplish your debt retirement goals.
One caveat on loans, should you every leave the employer, the loan cannot be transfered to an IRA. It must be paid off. It if cannot be paid off, the closure of the 401k, and loan, will generate a 1099 income statement for the amount of the unpaid loan.
When doing a loan inside of a 401k, you are basically paying yourself back at a market rate of interest.. say 5% to 6% right now.
Should you choose to cash out your 401k, or move to an IRA and cash out then, of couse you will have income taxes from Federal, to possible State and 10% IRS penalty if under age 59 1/2.
Great questions.. there are thoretical answers and then there's the 'real world'. Given that global asset prices (stocks, bond and real estate) are now standing at all time highs again (not every index mind you), but here in the US we are in the third asset bubble in as little as 17 years. I would be more concerned with this bubble and protecting my net worth. After this current bubble pops, assuming one has taken precautionary steps to protect their assets, you will have all the financial flexiblities to buy assets at 'reduced prices' after the bubble pops. No use assuming a 7% ROI if you are standing in front of a major market decline. Remember, what declines -50% must earn +100% just to get back to breakeven, where you started.. Hope this helps.
Great question, at our firm, we are of the belief that we are in yet another massive financial bubble. That being said, there are times you want your money 'playing' on offense, (when markets have low risk) at other times on defense, and then other times, bring in the special teams, (when markets have high risk) to use the football metaphor.
We are advocates of using the historical movement of assets in previous stock market crashes to help investors determine how much downside they are comfortable with, regarding their investments. This helps set their ‘asset allocation’.
There are tools to help investors understand the risks inside of their investments. You should consider seeking out a service like this, and then determine where your investments should go, based upon downside risk, or what our industry calls, 'drawdown'.