Weise Capital & Risk Advisors
Chief Investment Officer, Director
As Chief Investment Officer and Director, Planning & Valuation, Chase oversees the investment and planning analysis processes. His team helps individuals and organizations execute effective financial, investment, risk management, and insurance strategies. Additionally, Mr. Chandler leads the valuation process for private clients and potential investments.
Chase has counseled leading professionals in the fields of health care, insurance, agriculture, oil and gas, asset management, and media. Clients include Fortune 500 C-level and director executives, medical and dental practices, pharmacy owners, professional investors, actuaries, and attorneys. Additionally, he regularly lectures on financial planning, risk management, and strategic investment planning. Chandler earned his bachelors in business administration from Harding University before attending Cornell University and The American College of Financial Services (for finance), then Pepperdine University and Lipscomb University (for business graduate school). Mr. Chandler holds the CFP® certification, the CLU® charter, the AAMS® designation, and is a 2017 Level II candidate in the CFA Program.
In 2012, Chandler released his first book, The Wealthy Physician, which immediately became an Amazon best-seller. In 2015, his second book, The Wealthy Family, was released. He has given talks around the country about investment, risk management, and financial planning topics (but has since slowed down to spend more time with his wife and kids, all of which are out of his league). He has spoken for LIMRA, Ohio National Financial Services, Northwestern Mutual, NAIFA, Harding University Pharmacy, and UAMS. Chase enjoys reading, writing, church activities, and, most of all, spending time with his wife (Beth) and two young children (Kate and Owen). He is an avid reader and recovering golfer.
BBA, Business Administration, Harding University
Assets Under Management:
Weise Capital Advisors, LLC (WCA). A Division of Capital Markets IQ, LLC, a SEC registered investment advisor. No financial, legal, or tax decisions should be made without thorough consultation with properly credentialed and experienced advisors. Weise Capital Advisors, LLC does not give tax or legal advice. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
Options are some of the least understood financial instruments. Many "gurus" encourage options trading and sell systems to help you make "big" returns. However, the risks are rarely fully understood.
That said, the pros of selling calls and puts are the income that you get from the sale (i.e. someone else is paying you for the respective right to buy or sell at a given price). But the con can easily become exponentially greater than the benefit. It may not be a bad idea to test the waters and get a feel for it. But I wouldn't use more than you're willing to lose. Knowing when to buy and sell takes (1) significant knowledge in terms of how option pricing works and (2) a decent amount of experience and real-life tuition - i.e. losing your shirt a few times to learn what not to do. There are many money managers and some sophisticated individual investors who sell covered calls to generate income.
If you have a large enough portfolio, you may be able to find a money manager to help you construct an income-generating portfolio with some option integration. But the ideal function for options and derivatives is (1) to help reduce risk in the overall portfolio, (2) to generate income through covered calls, and/or (3) to create synthetic long/short positions that may increase the efficiency of returns while minimizing downside risk.
Just remember, if you're just trying it out - expect to not do very well for the first few years. There is no magic bullet here. Hope that helps!
There is not a yes or no answer here. The key is to begin thinking about risk and return as two sides of the same coin, rather than return alone. Remember that chasing higher returns will likely leave you exposed to severe downside loss potential (e.g. Tech stocks in the 1990's).
ETFs are simply made up of a basket of securities (like stocks or bonds), but they do not necessarily provide a better return. Individuals stocks carry more risk because you're completely exposed to the performance of that particular stock. Stock ETFs are usually broadly diversified in a sector or index and are a more cost-efficient way to invest monthly amounts when you're starting to build a portfolio. They should ("should" being the key word) provide a better return over time because of, (1) reduced risk due to diversification and, (2) reduced cost structure. It would be impractical and cost prohibitive to to buy each stock in the S&P 500 index, or even 50 of them, with less than a few hundred thousand dollars. The key question is the size of your portfolio.
As you get to higher investment levels, it might be good to interview money managers and advisors because good ones can provide more effective risk management, tax-efficiency, and planning capabilities than people can do on their own.
The quick answer is it depends on how long you plan to work, current and future income needs, value of assets, and state and other tax considerations. In general, it is usually best to take from taxable accounts first, then tax-deferred, then tax-free. However, the ideal distribution strategy is also dependent on where tax rates are and how various markets are performing.
To go deeper, currently all of your future income will be taxable. That is, the amount coming from the pension, the 401(k), and some portion of Social Security will be taxed at regular income tax rates. It would likely be prudent to have some funds in a tax-free environment (like a Roth IRA) so you have options as you get into your later years. This insulates you from drastic tax changes - if taxes are high in 10 years, you can take from the Roth. If taxes have fallen, you can withdraw from tax-deferred planes, like the 401(k). You could fund a Roth (or a "back-door Roth") by up to $6,500 per year because you're over 50.
General rule of thumb: there should be 3-4 segments.
- Segment 1: Keep 2-3 years of the income needs in a safe place. This provides short-term income.
- Segment 2: Keep years 3-10 (e.g. your age 67-76) of projected income needs in a moderate allocation. This is mid-range income, which will carry some volatility, but should be no more than 50-60% equities.
- Segment 3: Keep years 11-25 (e.g. your age 77-102) of projected income needs in a more aggressive allocation.
- Segment 4: The 4th segment is one that most retirees don't have. It would be a safety net. This would be funds you could come to if some sort of extreme economic event occurs. It doesn't have to be much, maybe 5-10% of your overall portfolio - but it's purpose it's provide a potential hedge against a significant market declines. Examples could be annuities, gold/silver or other commodities, or other alternative assets.
Hope this helps!
B. Chase Chandler, CFP®
The solution depends on her current income and basic living expenses, as well as her desires. If your mother-in-law is currently retired and does not need to funds for basic living income, it would be best to set aside the amount needed for travel and other fulfilling endeavors in a very safe (cash-based) place. The rest of the funds might then be divided between a preservation and growth allocation. The preservation dollars would be invested for income (meaning, dividend-paying stocks, preferreds, and bonds) and moderate growth. The growth portion would be more aggressive and carry more risk. Her advisor/investment manager would rebalance 1-2 times per year, selling what has increased to maintain the cash needed for the next 12 months. On the other hand, if she does currently need income, she could use the same strategy, but simply increase the amount of short-term cash and treasuries to ~24 months of income.
It will be best for her (and the family) to do due diligence before jumping into any one strategy or product. But also, relax and avoid decision fatigue. Incidentally, I've had a good number of clients receive large inheritances in the past few years, usually due to an unexpected death of a parent or spouse. Many who receive large amounts after emotionally difficult times become overburdened with all of the decisions that need to be made. Sudden money often creates more problems than it solves. Keep it simple, and flexible. Make a rule that you'll make no more than 2-3 decisions per month over the course of, say, 3-6 months. This helps mitigate the [internal or external] pressure to buy, invest, spend, or give before having time to truly contemplate how to maximize the impact.
LAST POINT- be deliberate before buying any product (like an annuity) that comes with high surrender charges. It may be prudent to put some of the funds in an annuity for guaranteed income (not for growth). But make sure it's a real need and you're getting the best deal before taking action.
There are two primary factors to consider when planning for Social Security Retirement Benefits. Here is a quick overview:
- Your Social Security Retirement Benefit will be based on your Average Indexed Monthly Earnings ("AIME"). The Social Security Administration ("SSA") takes your highest 35 years of earnings (indexed for inflation) and divides the sum by 420 (i.e. 35 years x 12). This is the AIME. Then they apply the Personal Insurance Amount (PIA) formula, which determines your monthly retirement payment. The PIA formula can get a bit complex, but it is usually around 30-50% of AIME. The higher a retiree's AIME the lower the percentage. And lower income earners will receive a higher PIA payment. (You can see an example at the ssa.gov website here.)
- The second consideration is how benefits will be taxed. Combined Income, as defined by SSA, is your AGI + tax-free interest received + 1/2 of your PIA payment. If you're married filing jointly and your combined income is above $32,000, half of your PIA payment could be taxable. If combined income is > $44.000 then 85% of your payment could be taxable. If single, half of your payment will be taxable if combined income is north of $25,000. If combined income is > $34,000 it will be 85% taxable. The amount of your SS payment that is taxable is also dependent on a few other factors found of page 7 of Pub. 915.
Your advisor should be able to calculate a current estimate of PIA and/or strategize with you about how to optimize benefits and tax efficiency.