Almost Weekly Blog

While it is a uniquely enjoyable privilege to dally on a high mountain summit, every experienced climber knows the vast majority of mountaineering casualties occur on the descent and understands the need for precision. I suspect this lingering truth results in an unjustly short average summit stay, given the ascent’s required suffering. A similar anomaly plays out in the form of retiree underspending, in particular with those who create income by selling assets, as with a standard systematic withdrawal plan, as opposed to those who receive streams of lifetime income, as with regular payments from a pension or annuity.

Savers invest a portion of their income today, which reduces the present lifestyle, to pre-fund a desirable lifestyle after retirement, generally into a Defined Contribution Plan, such as a 401(k), SIMPLE, or 457(b) Plan. In an inflationary culture, however, and for retirees lacking a second lifetime income stream (to Social Security), a spend-down in savings is often required to maintain the habituated lifestyle in retirement, and here enters the paradox; for various reasons, retirees are generally uncomfortable watching their nest egg shrink, even to fund pre-planned retirement lifestyle goals, and so they underspend. One research project concluded that retirees with guaranteed income sources spend twice the amount of money as those with an equal amount of investment wealth!¹

While strong legacy goals may justify a degree of underspending, “The Flooring Approach” may help some retirees feel more comfortable spending in retirement and may support retirement lifestyle goals.:

• To determine the percentages of your God-given wealth to be allocated towards giving, investing, and producing lifetime income, start by differentiating between fixed and discretionary retirement expenses.
• Consider whether reliable lifetime income sources may help cover a substantial portion of essential retirement expenses. Start by considering a delay in Social Security benefits to age 70, which will maximize monthly benefits, may provide additional inflation protection over time, and may help support income needs for a surviving spouse with the smaller benefit amount.
• If net Social Security benefits, coupled with other lifetime income sources, like a pension or annuity, don’t cover fixed expenses, consider your ability to buy a lifetime income annuity to make up the difference.

While the advantages of “The Flooring Approach” are notable, most lifetime income annuities don’t include a cost-of-living adjustment, which increases the importance of a delay in Social Security benefits to fight inflation long-term. Consideration should also be given to the type of dollars (Pre-tax, Taxable, or Tax-free) used to fund such an annuity, consistent to your personal tax plan.

It is a mystery to retirement economists that so few retirees spend a portion of their wealth to purchase a lifetime income, referred to as “the annuity puzzle”, especially since it is economically efficient to transfer longevity risk to an insurance company.² Don’t enjoy the well-earned summit too briefly, and don’t be an underspending retiree for lack of due diligence on the subject! May God bless your retirement income planning efforts, Shaun.

“Plans fail for lack of counsel, but with many advisers they succeed”

~Proverbs 15:22

“Commit to the Lord whatever you do, and He will establish your plans.

~Proverbs 16:3

1,2 Ed Slott’s IRA Advisor, April, 2026, “Giving Yourself a License to Spend in Retirement”, by Michael Finke, Ph.D.

Disclosure

Old Forge Wealth Management, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only and should not be construed as individualized investment, tax, legal, or insurance advice or as a recommendation to buy or sell any security or insurance product. The views and opinions expressed are those of the author as of the date of publication and are subject to change without notice.

All investments and retirement income strategies involve risk, including the possible loss of principal. Strategies discussed, including annuities, systematic withdrawals, and Social Security claiming decisions, may not be suitable for all individuals and should be evaluated based on an investor’s unique financial situation, objectives, risk tolerance, liquidity needs, and tax circumstances. Guarantees associated with annuity products are subject to the claims-paying ability and financial strength of the issuing insurance company. Individuals should consult with qualified financial, tax, and legal professionals before implementing any retirement income strategy.

Past performance and historical research are not indicative of future results.

The Federal Reserve Bank (‘the Fed’) controls the ‘Fed Funds Rate’, which sets the range for the interest rate banks charge each other for overnight loans, which affects the rate charged on credit cards, home equity lines of credit and savings, which impacts the flow of investment capital and the stock market. While this is an impressive amount of authority and influence, it is dwarfed by the primarily ‘market-driven’ 10 Year Treasury Rate (‘the 10 Year’), which sets the global benchmark for risk-free long-term returns, which drives mortgage rates, corporate debt, and asset valuation, and is widely regarded as the most influential financial metric in the world. If ‘the Fed’ is playing Pickle Ball at the local club, ‘the 10 Year’ is winning Wimbledon. The former reflects central planning efforts to manage domestic inflation and employment, while the latter reveals global investor consensus on the two subjects. What is the global investor consensus on the markets and economy today, and what should you do about it?

It was widely reported prior to the U.S.-Israeli attacks on Iran that the stock market had “priced-in” three additional 2026 Fed rate cuts.¹ The attacks on Iran and the closing of the Strait of Hormuz (‘the Strait’) resulted in a rapid and significant rise in the oil price, the natural resource possessing the greatest effect on global inflation. Today the conflict persists, heightened tensions surrounding ‘the Strait’ continue, the oil price remains elevated with upward pressure, inflation reports are now surprising to the upside, and the expected 2026 Fed rate cuts are in question, a combination of factors one might think would invigorate a “risk-off” attitude on Wall Street. To the contrary! With a “Banish the Pessimism!” boldness, retail investors, especially prone to market mis-timing, have in the face of these developments driven the S&P 500 16% higher,² largely in the single sub-sector of semiconductor chips. While it’s impossible to know when a speculative rally will run out of buyers, and while the stock market can remain irrational longer than you can remain solvent, ‘the 10 Year’ is in the meantime on the rise,³ presenting a contrary assessment of these conditions. Respect the rally but never follow the herd; make sure your investment risk management plan is in place.

The broad bond market was enjoying steady 2026 returns that noticeably exceeded risk-free Treasury money market accounts earlier in the year, when ‘the Fed’, was peddling the rate cut narrative;⁴ since ‘the 10 Year’ began its march higher, however, it has faltered and is now posting a paltry .1% 2026 return.⁵ During the May 6, 2023 Berkshire Hathaway annual meeting Warren Buffet declared the long-term era of declining interest rates was over, and recent market conditions have generally aligned with that view. Retail bond investors should at minimum consider the possibility that the general direction for long-term interest rates is now up and carefully consider the risk lower quality and longer-term bonds are subjected to by this dynamic.

It’s more challenging to gauge the timing of the effects a rising ‘10 Year’ yield will have on the U.S. and global economies due to parabolic technological advancement (and its impact of increased economic efficiency), but rising yields are a restrictive factor in regard to capital flows, and ‘the 10 Year’ is a critical primary metric in the conversation. I believe ‘the 10 Year’ yield should be monitored closely by investors at this juncture, and workers should continuously increase specialization in their chosen field in an effort to preserve ever-increasing, irreplaceable value: learn to serve people well!

Think about it, Shaun

“Do you see a man skillful in his work? He will stand before kings; he will not stand before obscure men.” ~Proverbs 22:29

“Whatever your hand finds to do, do it with your might” ~Ecclesiastes 9:10

1 Financial CONTENT, by Market Minute, “The Fed-Market Standoff: Wall Street Defies “Higher for Longer” with Bold Bet on Three 2026 Rate Cuts”, March 27, 2026

2 Yahoo Finance, S&P 500 price chart, March 27, 2026 & May 14, 2026

3 US Department of the Treasury, Daily Treasury Par Yield Curve Rates, January 1, 2026 through May 13, 2026.

4,5 Yahoo Finance, Price Chart of Vanguard Total Bond Market Index Fund (BND) vs. Schwab Treasury Obligations Money Fund (SNOXX), January 1, 2026 – May 14, 2026

Disclosure(s)

The views expressed herein are those of the author as of the date published and are subject to change without notice. This material is provided for informational and educational purposes only and should not be construed as individualized investment, legal, tax, or accounting advice, or as a recommendation to buy or sell any security or adopt any investment strategy.

Forward-looking statements, including opinions regarding market conditions, interest rates, inflation, monetary policy, or economic trends, are based on current assumptions and are not guarantees of future results. Actual outcomes may differ materially from those discussed.

References to indexes, asset classes, sectors, or specific investments are provided for illustrative purposes only and do not reflect the performance of any client account. Investors cannot invest directly in an index. Past performance is not indicative of future results.

Investing involves risk, including possible loss of principal. Fixed income investments are subject to interest rate risk, credit risk, inflation risk, and market risk. Rising interest rates generally cause bond prices to fall. Lower-quality bonds may be subject to greater levels of credit and liquidity risk.

Any references to market returns, fund performance, interest rates, or economic data are derived from sources believed to be reliable; however, accuracy and completeness cannot be guaranteed.

Old Forge Wealth Management, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training.

Many diligent wealth-builders fail to realize they have a permanent business partner—the IRS certainly does not. As nationally syndicated CPA Ed Slott wisely observes, “Your IRA is an IOU to the IRS.”

The primary goals of most wealth-builders are to a) maximize after-tax lifetime income and b) transfer remaining wealth to heirs as efficiently as possible. Inflation and taxes can make accomplishing these goals more challenging. Since we have limited ability to control inflation, thoughtful tax planning can play an important role in growing and retaining wealth in America.

Consider the following general tax strategies as you thoughtfully construct your own plan to help manage the impact of taxes on your hard-earned capital:

• In the early working years of life, when taxable income and tax brackets are often lower, individuals may benefit from prioritizing contributions to Roth accounts, which do not provide a current tax deduction but do offer tax-free withdrawals later in life. In the middle working years, when income and tax brackets are typically higher, a combination of Traditional accounts (which offer a tax deduction on contributions and tax-deferred growth) and Roth accounts may be appropriate. In the later working years, as income and tax brackets reach their peak and retirement approaches, some individuals may consider emphasizing Traditional contributions.

• In the early retirement years, when taxable income and tax brackets may be lower (but potentially higher in the future), some individuals consider taking distributions from Traditional accounts to “fill up” lower tax brackets. As Ed Slott also notes, “Never waste a low tax bracket with short-term thinking!” In the middle retirement years, as income and tax brackets evolve, withdrawals may be taken strategically from both non-retirement and Traditional accounts, with consideration given to projected future tax rates. In later retirement years, when taxable Social Security income and Required Minimum Distributions may be highest, accessing tax-advantaged income sources—such as Roth IRAs, HECM reverse mortgages, or cash value life insurance—can be effective tools for managing taxes in higher-bracket years, depending on individual circumstances.

Please watch for next week’s first issue of Old Forge Wealth’s new weekly campaign, Tuesday Tax Facts, which we hope will keep you well informed about new tax legislation, pertinent tax deadlines, and a range of advanced tax-planning strategies. As always, we welcome your feedback.

Think about it, and may God bless your tax management efforts, Shaun

“Tax preparation costs you money; tax planning makes you money” ~Ed Slott                                                                                                                                                                                 

“Render to Caesar the things that are Caesar’s, and to God the things that are God’s” ~Matthew 22:21

Disclosure(s)

Old Forge Wealth Management, LLC is a registered investment adviser. This material is provided for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. The views expressed are general in nature and may not be appropriate for all individuals. Tax laws and regulations are subject to change and may impact the relevance or effectiveness of the strategies discussed. There is no guarantee that any strategy will achieve its intended results. You should consult with your financial advisor, tax professional, and/or legal advisor before implementing any strategy discussed herein.

While life is primarily about things far more important than wealth-building, financial freedom does provide mentionable liberties, like the opportunity to give to those in need, the means to see earth’s great natural wonders, the chance to travel and experience diverse cultures, the blessing of working voluntarily, the knowledge to teach financial principles to others, and the joy of leaving a meaningful legacy to heirs. Since financial literacy is not consistently taught in America’s schools, it is generally acquired in adulthood, long after our peak learning capacity has come and gone. Practice the following simple Money Rules that may help improve your wealth-building habits:

50/30/20 Budgeting Rule

• 50% of take-home pay covers essential expenses
• 15% is saved for retirement
• 5% is saved for short-term needs
• 30% is flexible spending

10% Debt Rule

• Maximum 10% of gross income is for debt payment

3-Day Large Purchase Rule

• Wait 3 days before big purchases
• Can help reduce impulse buying

30-Day Luxury Purchase Rule

• Wait 30 days before luxury buys
• Many discretionary purchases lose their appeal over time

20/4/10 Car Purchase Rule

• 20% Down, 4 year loan, 10% payment (keep total transportation costs (loan, insurance, gas) under 10% of gross monthly income))

9 Month Emergency Savings Rule

• Emergency fund equals 9 months’ total household spending

15% Savings Rule

• Invest 15% of gross income for retirement (or more) as early as feasible

Retirement Savings Rule of 25x

• Retirement savings equals 25 times total annual spending

4% Withdrawal Rule

• Seek to limit withdrawals from retirement savings to 4% of total value

Think about it, and may God bless your wealth-building efforts!

Shaun

“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it” ~Proverbs 13:11

“A good man leaves an inheritance to his children’s children” ~Proverbs 13:22

Disclosure(s)

Old Forge Wealth Management, LLC is a state-registered investment adviser. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only and should not be construed as personalized investment, tax, or financial advice. The strategies and guidelines referenced are general in nature, may not be suitable for all individuals, and are not guarantees of future results. All investing involves risk, including the potential loss of principal. Advisory services are only offered to clients or prospective clients where Old Forge Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. Financial decisions should be made based on your individual circumstances and in consultation with appropriate professionals.

A mountaineer can increase both climbing success and safety by learning to discern what cloud formations reveal about impending mountain weather. Since the official mountain forecast is little more than an indication of the conditions which “might” prevail over a maximum period of 48 hours, the ability to discern the clouds becomes essential. A knowledge of how interest rates affect asset values is equally valuable for the investor, who can use that information to potentially get positioned in front of money flows. Consider the fundamentals of changing interest rates:

• Time Value of Money: every asset is essentially worth the present value of its future cash flows. This present value is calculated using a discount rate which is heavily influenced by interest rates, which have the following effects:

Higher interest rates → higher discount rate → lower present value

Lower interest rates → lower discount rate → higher present value

When rates rise, future cash flows become less valuable today, and asset prices historically tend to fall. Conversely, when rates fall, future cash flows become more valuable today, and asset prices historically tend to rise.

• Relative Yields: interest rates also determine the baseline return you can get from “safe” assets like government bonds, which creates the following comparison framework:

Higher rates → Treasury yields rise → risky assets less attractive

Lower rates → Treasury yields drop → risky assets more attractive¹

• Asset-Specific Effects: Bonds have an inverse relationship to interest rates; when rates rise bonds values drop because new bonds pay more. The future earnings of Stocks are discounted as interest rates rise because safe investments pay more (stocks forced to compete with bonds for investor capital); growth stocks are especially sensitive. Real Estate values historically tend to decline as interest rates rise due to higher mortgage rates, which decreases affordability.

Bond markets are often viewed as a key signal of economic expectations due to bond investors possessing a deep understanding of the effects interest rates have on the Time Value of Money, Relative Yields, and the values of Specific Assets. Strive to ingrain these relational principles into the foundation of your investment paradigm, and then extrapolate them further by understanding rates don’t need to change to impact asset values, they merely need to surprise expectations. Consider that recently the stock market was thought to have already “priced-in” two additional 2026 Fed rate cuts; what effect would zero additional 2026 rate cuts have on Treasuries? Bonds in general? Stocks? Real Estate? Commodities? Collectibles? Why?

God bless your wealth-building and financial planning efforts as you deepen your understanding of the effects interest rates have on every financial factor.

Shaun

“Interest rates are to asset prices like gravity is to the apple. They power everything in the economic universe” ~Warren Buffet

“You ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest.” ~Matthew 25:27

1 Stansberry Research, Daily Wealth, “One Thing That Powers Everything in Finance”, Doc Eifrig, April 9, 2026

Disclosure(s)

This material is provided by Old Forge Wealth Management, LLC (“Old Forge”) for informational and educational purposes only and should not be construed as investment advice or a recommendation to buy or sell any security. This commentary is general in nature and does not take into account the specific investment objectives, financial situation, or needs of any individual. The views expressed are those of the author as of the date of publication and are subject to change without notice. Any forward-looking statements or expectations are based on current assumptions and are subject to change. All investments involve risk, including the potential loss of principal. Past performance and historical relationships are not indicative of future results. Information contained herein is derived from sources believed to be reliable, but its accuracy and completeness cannot be guaranteed. Old Forge Wealth Management, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. This content is not intended to create, and receipt of it does not constitute, an advisory relationship.

The primary concern and biggest navigational deterrent for winter mountaineers is generally a high wind speed. At 70 MPH it becomes questionable as to whether the climber or the wind is in control, at 80 MPH all doubt is removed, and at 100+ MPH the climber is “belly down” and crawling for survival with plummeting prospects for success. It’s notable that other climber “concerns”, like flying snow and ice, physical weakness, and plunging core temperatures are usually direct implications of high winds. Inflation is one of the most influential factors with an equivalent influence over the global economy and asset prices. The early indication is that the 20% reduction in global oil shipments caused by the closing of the Strait of Hormuz may cause higher oil prices to persist into the second half of this year, which may directly impact price inflation economy wide.

Consider the implications of rising inflation:

• Higher interest rates: Central banks (like the Federal Reserve) often raise rates to fight inflation, increasing borrowing costs for businesses and consumers. This reduces investment, hiring, and spending—dragging down economic activity and stock valuations.
• Lower corporate profits: Rising input costs (wages, materials, energy) squeeze profit margins, especially if companies can’t fully pass costs on to customers.
• Reduced consumer purchasing power: Inflation erodes real incomes, so households buy less, weakening demand for goods and services.
• Valuation compression: Higher inflation and rates increase discount rates used in stock valuation models, lowering the present value of future earnings—especially hurting growth stocks.
• Increased uncertainty: Volatile inflation makes it harder for businesses to plan pricing, investment, and expansion, often leading to delayed decisions and slower growth.
• Weaker consumer and business confidence: Persistent inflation can reduce confidence, causing more cautious spending and investment behavior.
• Debt burden stress: Higher rates tied to inflation increase interest payments for companies and households with variable or new debt, raising default risks.
• Currency instability: Inflation can weaken a country’s currency, increasing import costs and creating additional economic strain.
• Policy tightening risk: Aggressive anti-inflation policies can overshoot, potentially triggering recessions or financial market disruptions.

Also consider how the following strategies may help you oppose “belly down” levels of monetary destruction caused by insidious inflation:

• Reprioritize essentials in your budget, like housing, groceries and insurance, while pulling back on discretionary spending, like subscriptions, dining out, impulse spending, and vacationing.
• Reprioritize present income, like work-based compensation, negotiating a raise, increasing specialization in high demand areas, and interest and dividends on invested capital. Understand inflation tends to prioritize a dollar today (dividends) over the promise of a dollar tomorrow (growth).
• Shore up the emergency fund to the equivalent of 6-9 months of total annual household spending and place it in a high yield savings account or Treasury Money Market account.
• Invest in assets that have a built-in inflation protection, like Treasury Inflation-Protected Securities (TIPS), and that have historically performed well during periods of high inflation, like Real Estate and other Real Assets.
• Manage debt as you might a pet scorpion: cage it, starve it, and if it hisses at you, exterminate it! Avoid consumer debt, high interest variable debt, and lock in a lower fixed interest rate before inflation raises rates.
• Manage the timing of spending thoughtfully by pre-purchasing durable goods, while delaying discretionary items that may drop in price later.

Battle inflation as you would a 100+ MPH wind at 14,000 feet, get to the work at hand, and may God bless your inflation-fighting efforts! Shaun

“He who earns wages does so to put them into a bag with holes” ~Haggai 1:6

“A quart of wheat or three quarts of barley will cost a full day’s pay” ~Revelation 6:6

Disclosure

This material is provided for informational purposes only and reflects the views of the author as of the date of publication. It is not intended as investment advice or a recommendation to buy or sell any security.

All market and economic commentary is based on current conditions and expectations, which are subject to change. Forward-looking statements are inherently uncertain, and actual outcomes may differ materially from those expressed or implied.

Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results.

References to specific asset classes or investment strategies are for illustrative purposes only and may not be suitable for all investors. This content does not take into account any individual’s financial situation, objectives, or risk tolerance. You should consult your financial advisor before making any investment decisions.

Old Forge Wealth Management, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training.

As my climbing buddy and I emerged from the safety of the below-treeline windshield, we were harshly greeted by 80 MPH winds hurling tiny ice particles straight into our unprotected eyes, preventing even a peak in the direction we hoped to advance! A quick retreat to “goggle up” allowed us to get through the “flying-ice wind tunnel”, but trouble on the descent hours later affirmed we should have listened more intently to the mountain’s early warning that day. While concerning developments relating to the Iran War are not a cause to blindly sell stocks and other risky assets, they are warnings to be observed and weighed in our quest to remain mindful of Warren Buffett’s well-known principle to prioritize avoiding permanent loss of capital. Consider the uncertainties the Iran Conflict presents to the investing landscape:

The Context

• In the last 150 years stock valuations¹ have been higher than today four times, all of which were brief excursions.² The context is that stocks are expensive today.
• The 2/10 Yield Curve, regarded by many to be amongst the most reliable recession indicators, was deeply inverted for over two years and turned positive just 18 months ago.³ This is well within the boundary of time in this historical relationship,⁴ and it would be highly unusual if such an inversion is not followed by recession.
• Priced into today’s stock valuations is the expectation of two more rate cuts this year, nearly mandated by President Trump. Were that not to happen, a revaluation of equities would likely occur.
• Today’s global economy runs on two essential things: debt and energy. A lasting disruption in either of these will likely lead to recession, or worse.

Iran Conflict-Related Developments

• A significant reduction in global oil shipments due to Iran bombing tankers passing through the Strait of Hormuz has introduced an energy supply shock. Refineries in the region are shutting down, and due to the time required to resume operations the resulting spike in oil prices may last long enough to invigorate inflation in the second half of 2026.⁵
• Rising inflation means the Fed may either follow through on its promise to cut rates and repeat the 2021 error of unintentionally stoking already warm inflation, or disappoint the market by not cutting rates. Either scenario could create headwinds for stock prices
• There is trouble brewing in the credit market as a (so far) quiet ‘run’ takes place in the Private Credit and Equity markets due to illiquidity concerns. Redemption requests amongst Non-Traded Business Development Companies surged over 5-fold in Q1 (over Q1 2025), and Blackrock, the world’s largest asset manager, is limiting redemptions. Stansberry Research reports that “concerns about private credit are starting to trickle into the broader credit market”.⁶

A supply shock in energy coupled with a disruption in the credit (debt) market as inflation threats emerge and while stocks are priced to perfection, is a setup that should have our attention. Use your tools, not your emotions to navigate the terrain. Think about it, and may God bless your asset protection efforts!

Shaun

“The prudent sees danger and hides himself, but the simple go on and suffer for it” ~Proverbs 22:3

“Rule #1 is, NEVER LOSE MONEY; Rule #2 is, NEVER FORGET RULE #1” ~Warren Buffet

1 As measured by the average price to earnings (P/E) ratio of the S&P 500 Index

2 LT Charts, S&P 500 P/E Ratio, December 1870 – November 2025

https://www.longtermtrends.com/sp500-price-earnings-shiller-pe-ratio/

3 Y Charts, “10-2 Year Treasury Yield Spread”, 5 Year Chart

https://ycharts.com/indicators/10_2_year_treasury_yield_spread

4 Brighton Jones, “Time to Worry? What an Inverted Yield Curve Does and Doesn’t Mean”, March 27, 2019

https://www.brightonjones.com/blog/inverted-yield-curve/

5 Presentation at FPA Luncheon, March 11, 2026, Harbor Capital

6 Stansberry Research, The Stansberry Digest, “A Rush for the Exits has Begun”, March 10, 2026

Disclosures

Old Forge Wealth Management, LLC is a Rhode Island registered investment adviser. Registration with a regulatory authority does not imply a certain level of skill or training. Additional information about Old Forge Wealth Management, LLC is available in its Form ADV Part 2A, which is available upon request or through the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.

This commentary is provided for informational and educational purposes only and is not intended as investment advice or a recommendation to buy or sell any security or adopt any particular investment strategy. The views expressed are those of the author as of the date of publication and are subject to change without notice.

This material is not intended to provide a complete analysis of every material fact regarding any country, region, market, industry, security, or investment strategy. Forward-looking statements, opinions, and estimates are based on current market conditions and assumptions and are subject to change. Actual market conditions and outcomes may differ materially from those expressed.

Past performance is not indicative of future results. Investing involves risk, including the potential loss of principal. This material is intended for a broad audience and may not be suitable for all investors.

It fascinates me that in the deadliest (1967) expedition in Denali’s history, five of the seven climbers who perished chose to cower in a snow cave and freeze to death, and two individually died trying to descend “The High One” in a raging winter blizzard alone. My profession has taught me that, fiscally speaking, there are two types of people in the world, wealth producers, who spend less than earnings and wisely invest the difference to grow income and wealth, and wealth consumers, who spend more than earnings and go heavily indebted from crisis to crisis. While the process of wealth-building should be quite straight forward, orchestrated inflation complicates the process immensely. Growing wealth after taxes in real (after inflation) terms is challenging, and asset allocation is the critical factor that separates success from apparent success (where nominal wealth grows while actual (after inflation) wealth shrinks).

When a nation can’t repay its debts on honest terms, it can honestly default, or it can dishonestly attempt to inflate its debt away by increasing the money supply, which increases reported GDP growth, which reduces the “Debt/GDP Ratio”, which presents a more ‘solvent’ financial picture. The inflation scheme is a fool’s errand because the debt never actually goes away. The reasons governments choose inflation include, a) it’s wonderful fun spending other people’s money, b) it maximizes a delay in the consequences of excessive indebtedness, c) it waters those near the spicket most abundantly, and d) it is highly deceptive and goes unnoticed by most of humanity.

Inflation also raises the question of whether we can grow our wealth after taxes faster than the government devalues the dollar. There is “nothing new under the sun”, and historically success has come with high quality capital efficient businesses, real estate, and other ‘real’ (intrinsically valuable) assets. It has notably not come with domestic currency-based fixed income holdings or income streams. Consider the following inflation-fighting principles as you strive to grow your own wealth in real terms:

• Strict budgeting with an eye on inflation will cut expenses and raise investable income. I fired two insurance companies last year which tried imposing 14% and 18% premium increases in a 2.5% CPI year, savings thousands. Buying a modest and certified, pre-owned vehicle can have an even greater positive effect on wealth-building.

• Methodically invest 15%+ of your earned income as you work hard, constantly increase specialization in your chosen field, and seek adequate compensation for your increasing value. Take great enjoyment in serving people well.

• Train yourself to get excited by crashing prices and fearful of euphoric sentiment. Studious investors thrive, but sheep starve. Don’t fight the trend but never follow the herd. Strive to consistently make wise allocation decisions with your God-given capital towards securities which have historically outperformed inflation. Invest only in things you understand.

• Manage risk prudently with an exit plan on risky holdings from the moment of purchase, position-sizing, a portfolio that reflects your risk profile and investment objective, and diversification of holdings to numerous asset classes.

I believe the two climbers who died attempting to descend the mountain had a far higher probability of survival than the five who froze in an unidentifiable snow cave positioned higher on the mountain than helicopters fly. I also believe these principles may help investors improve their chances of preserving and potentially growing wealth after taxes and inflation over time. Think about it, and may God bless your wealth-building efforts! Shaun

“Every good gift and every perfect gift is from above, coming down from the Father of lights, with whom there is no variation or shadow due to change” ~James 1:17

Disclosures

This commentary is provided for informational and educational purposes only and should not be construed as personalized investment advice. The views expressed are those of the author as of the date written and are subject to change without notice.

All investments involve risk, including the possible loss of principal. Past performance and historical trends are not indicative of future results. References to asset classes, market conditions, or investment strategies are for general discussion purposes only and may not be appropriate for all investors. Investors should consider their individual circumstances before making investment decisions.

Old Forge Wealth Management, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. Additional information about Old Forge Wealth Management, LLC, including our Form ADV Part 2A disclosure brochure, is available at www.adviserinfo.sec.gov.