As we begin the second month of 2024, we at Defined Wealth Management find it important to reflect on the past not only as a point of reflection but also from a personal and firm introspection. To paraphrase a famous quote by Albert Einstein, you can’t do the same thing over and over and expect a different result. If you don’t learn from the past, you are doomed to repeat it again.
One of the great investors of our time Charlie Munger, Co-Founder of Berkshire Hathaway passed away on November 28, 2023. Warren Buffet was the face of Berkshire, but Charlie was the deep thinker of the two. In looking to the future there is much we can learn from the lessons of Charlie Munger that are chronicled in Poor Charlie’s Almanack. Listed below are a couple of our interpretations of a few Charlie Munger lessons.
- How to find a good spouse?
The best way to find a good spouse is to “deserve” a good spouse. It only makes sense that you pick the same good qualities that describe yourself.
- Always take the high road, it’s far less traveled.
Building a reputation is created by making ethical decisions over time. One bad decision motivated by taking a badly timed short cut can ruin years of hard work.
- A lot of people with high IQ’s are terrible investors because they’ve got terrible temperaments.
This is also true in life, not just the markets.
- You don’t have to be brilliant, only a little bit wiser than the others, on average, for a long, long time.
It’s not rocket science, but don’t get in your own way. Don’t let sound decisions be captured by emotion.
- Just like Warren, I had a considerable passion to get rich, not because I wanted more things, I wanted financial independence.
Achieving Financial Independence is the ability to have choices.
Defining and achieving Financial Independence with confidence is how we work with our clients. Let us know how do you feel about your Financial Independence?
In addition to reflecting on our lives, the new year also brings updates from tax inflation adjustments from the IRS. It is a good idea to review your retirement plan contributions and update them as is appropriate for your financial plan. If you’re unsure, reach out to us as Defined to discuss these and any others not included below.
2024 Tax Inflation Adjustments
- Maximum 401(k), 403(b), TSP, 457 Deferral: $23,000
- Maximum 401(k), 403(b), TSP, 457 Catch Up if 50 and older by 12/31: $7,500
- Total Employer + Employee contributions: $69,000
- Maximum Annual Benefit to Defined Benefit Plans: $275,000
- Traditional & Roth IRA contribution: $7,000
- Traditional & Roth IRA Catch Up if 50 and older by 12/31: $1,000
- SIMPLE IRA contribution: $16,000
- SIMPLE IRA Catch Up if 50 and older by 12/31: $3,500
- HSA contributions for individual plans: $4,150
- HSA contributions for family plans: $8,300
- HSA contributions Catch up, if 55 and older by 12/31: $1,000
- Annual Gift exclusion for 2024: $18,000
- Federal Estate Tax Threshold for 2024: $13.61MM per person
- Qualified Charitable Distributions (QCDs): $105,000
