There’s so much good news to share about the continued ripple effect that “Odds On” is making around the globe, it’s hard to know where to begin. Here are a few highlights.

Now Hear This: “Odds On” Audiobook, Narrated by Matt Hall

If you’re looking for a way to thank friends, family and colleagues this holiday season, think about stuffing their sock with the audio version of “Odds On.” Two reasons why:

1. Initially, we hired a professional voice artist to narrate the book. That just didn’t feel right, so we replaced pseudo-Matt with the real deal, personally telling his tale.
2. As we post this blog, the audio version is priced at $3.49, so you can splurge on one for yourself while you’re at it. Enjoy!

“Odds On,” a Dutch Treat

Partnering with several like-minded colleagues in the Netherlands, “Odds On” is now available in Dutch! Bringing the world closer together through technology and evidence-based investing, Matt was honored to participate in a well-attended intercontinental web conference in the Benelux region (Belgium, the Netherlands and Luxembourg). In particular, we’d like to thank Robert Van Beek of About Life & Finance B.V., who translated the book and facilitated the conference; and Jeffrey de Haan and David Swanwick of Dimensional Fund Advisors’ Benelux and U.K. offices, respectively.

Hands Down, Thumbs Up, Near and Far

Speaking of global outreach, we’ve received so many heartwarming endorsements from groups and individuals whose lives have been touched by Matt’s book. Every one of them is special to us, but to name a couple of recent highlights:

1. The respected INSEAD Business School for the World® has featured “Odds On” on the bestseller page in their library, currently at #7 as we write this post.
2. We also were touched to see financial tech-head Greg Elliott mention “Odds On” in an Orion software newsletter interview (page 8).

To the general public, that second one may not seem like such a big deal. But among us financial types, Orion is a very familiar name as one of our most important software service providers. It’s fun to see our message spread in ways we could not have imagined when we began the journey.

As parents, we commit to years of financial responsibility when we welcome our children into the world. It’s an obligation we take on willingly. (Well, most days.) But we also hope to prepare our sons and daughters for the day they start creating their own financial independence … and, eventually, maybe a grandchild or two.

To instill meaningful financial literacy takes a team approach indeed – in school and at home. It also takes the right approach. A Wall Street Journal article, “The Smart Way to Teach Children About Money,” offered some important insights on that, suggesting it’s both what we teach as well as when we teach it.

Remember those Golden Rules: Reading, Writing and Arithmetic? Surprise. We may hate to admit it, but our parents and grandparents might have been on to something when they emphasized the importance of learning the basics – walking before running.

The WSJ columnist comments:

“We focus on teaching finance in school when regular math is much more effective at helping children manage money. We cram their heads full of financial facts and strategies years before they’ll actually need any of it—ensuring that they won’t remember the lessons when they’re most needed. And we squirm about discussing our own family income and debt, giving children fears and false impressions they may never shake off.”

So how do you determine an effective way to roll out your lessons on financial literacy and have open, honest conversations with your kids about your family wealth? While every household should move at its own pace, Lisa and I decided to introduce our daughter Harper to this handy chart from the JumpStart Coalition for Personal Financial Literacy, which was included in the WSJ article.

I told Harper we would set aside time to go over each activity with her whenever she was ready to roll. Harper not only found the chart of interest, she’s been known to haul it around in her backpack. If you check out our photo of the month, we seem to have captured her attention.

Typically, harvests happen seasonally. Strawberries ripen in the spring, corn is eye high by the Fourth of July, those grapes get stomped in the fall, and chestnuts roast on winter fires.

Tax-loss harvesting is different. Those who are familiar with the strategy tend to mistakenly assume that losses are best harvested at year-end, when taxes are top of mind. In reality, tax-loss harvests can happen whenever market conditions and your best interests warrant it.

What is tax-loss harvesting?

When properly applied, tax-loss harvesting is the equivalent of turning your financial lemons into lemonade by converting market downturns (whenever they may occur) into tangible tax savings. A successful tax-loss harvest lowers your tax bill, without substantially altering or impacting your long-term investment outcomes.

How does it work?

If you sell all or part of a position in your taxable account when it is worth less than you paid for it, this generates a realized capital loss. You can use that loss to offset capital gains and other income in the year you realize it, or you can carry it forward into future years. (There are quite a few caveats on how to report losses, gains and other income. A tax professional should be consulted, but that’s the general premise.)

Here’s a three-step summary of the round trip typically involved:

1. Sell all or part of a position in your portfolio when it is worth less than you paid for it.
2. Reinvest the proceeds in a similar (not “substantially identical”) position.
3. Return the proceeds to the original position no sooner than 31 days later (after the IRS’s “wash sale rule” period has passed).

Again, once the dust has settled, our goal is to have generated a substantive capital loss to report on your tax returns, without dramatically altering your market positions during or after the event.

Any catches?

Remember, tax-loss harvests should occur when market conditions allow for them AND when your best interests warrant it. There are several reasons that not every available loss should be harvested. To name a few:

Costs – The potential tax savings may not offset the trading costs involved. Before the harvest, do the math.

Tax planning – A tax-loss harvest can reduce your taxes in the short-term, but may generate higher capital gains taxes later on (by lowering the basis of your holdings). Loss harvests should be managed in concert with your larger tax planning projections.

Asset location – Holdings in your tax-sheltered accounts (such as your IRA) don’t generate taxable gains or realized losses when sold, so they aren’t available to harvest.

It’s never fun to endure market downturns, but they are an inherent part of nearly every investor’s journey toward accumulating new wealth. When they occur, we can sometimes soften the sting by leveraging losses to your advantage. That’s why we keep a year-round eye on our clients’ holdings, so we can be ready to spring into action any time a harvesting opportunity may be ripe for the picking.

Let us know if we can ever answer any questions about this or other tax-planning strategies you may have in mind.