Echo Blog

Echo Blog

Thanksgiving is More Than Just a Day

By Echo Huang, CPA, CFP®, CFA

Thanksgiving is my favorite holiday for several reasons:

  1. I get to share my best cooking with family and friends. Our Thanksgiving dinner menu was planned about a week in advance. Alton Brown’s Food Network turkey recipe is the best! My most reliable dish is a wild rice with mushrooms side that is a recipe from my mother-in-law Mary Lou's cookbook (she actually hand-made a cookbook for each of her children by typing recipes using her typewriter and carbon paper!) Every year I experiment with a Brussels sprouts or a green beans side dish with different recipes. Instead of mashed potatoes, I baked sweet potatoes. I added Pillsbury flaky biscuits this year, but for other years I’ve tried crescents rolls. Sharing my best creations with family and friends gives me joy and appreciation for abundance of food. After a turkey dinner with a nice wine, I enjoyed listening to the kids playing piano while others played ping pong, as everyone headed off the tryptophan.

Echo Wealth Management Now Hiring an Associate Wealth Manager

starting in spring or early summer 2018

Company Website: www.EchoWealthManagement.com

About the Company

Echo Wealth Management is an independent, focused wealth management firm located in Plymouth, Minnesota that takes the complexity out of wealth management.  We offer integrated, comprehensive strategies that address every facet of our clients’ financial lives.  We do this by building the highest levels of trust, integrity and respect while always collaborating using a team approach.  Our clients range from corporate executives planning a secure retirement, to families looking to preserve their assets for future generations, to businesses seeking expert investment advice.  Echo Wealth Management was formed in February 2015 as a Registered Investment Advisor (RIA) and is looking for an Associate Wealth Manager to join a growing firm and support Echo Huang, CPA, CFP®, CFA, founder of this firm who has over 20 years of experience.

What is an Associate Wealth Manager, you ask? Our Associates are more like apprentices than support staff, and go through a rigorous three-year program where they learn to be a wealth manager, and not just any Wealth Manager... an Echo Wealth Manager.

My "Me Too" Story

By Echo Huang, CPA, CFP®, CFA

As the Harvey Weinstein story has been in the news for the past month, I am grateful to see more women having the courage to raise awareness of sexual harassment in workplaces and protect more women.  One of my “Me Too” stories happened many years ago when I was about 19 years old in China.  

After graduating with an accounting diploma from Shenzhen School of Business and Economics at age 17, I received a great job offer to become an accountant at the Bank of China, Shenzhen Branch.  In this, my first full-time job, I was paid more than my parents, who were high school teachers, had ever been paid. I felt excited to spread my wings to fly far away and I requested a placement to the office in Shekou, a small seaside town about 30 miles from my parents’ home.  I moved into the two-story building the bank provided, where each person had own room and shared the two bathrooms at the end of each floor.  I liked my room at the corner on the second floor as it had a door to an outside large balcony.

What Should You Do Now to Protect Your Identity?

By Echo Huang, CPA, CFP®, CFA

This month, we were told that 143 million Americans had key identifying information stolen through the credit reporting company Equifax.  In addition, we just learned that Equifax purchased an identification protection service called ID Watchdog on August 10, two weeks after Equifax discovered the data breach but a month before disclosing it publicly.  Law enforcement officials from about 40 states are in the process of investigating Equifax’s behavior before and after the data breach.  At this time of uncertainty, what should you be doing right now to protect your identity?

Evernote: The Best Tool to Get Organized

By Echo Huang, CPA, CFP®, CFA

Evernote is a cloud-based, information organization app.  I have been using Evernote since 2011 to capture ideas, notes, important documents, images, and track projects and my goals.  Initially I used the free basic version, but then I upgraded to the premium level ($69.99 per year now) and I find it is well worth it as I can do so much more by adding Word documents, PDF documents, and Excel files as well.  I would like to share with you a few of the ways I use it to increase my productivity and reduce paper clutter.

Echo Huang, CPA, CFP®, CFA Awarded the Five Star Wealth Manager Award for 2017!

Echo Huang has been a six-year recipient (2012 - 2017) of this award.

The Five Star Wealth Manager award program is the largest and most widely published award program in the financial services industry.  Five Star Professional conducts this research to help consumers with the decision of selecting a service professional in their area.  They have partnered with Twin Cities Business magazine and Mpls. St. Paul Magazine to recognize these professionals and highlight their achievements. 

Alternative Fixed Income Strategies in a Rising Interest Rate Environment

By Echo Huang, CPA, CFP®, CFA

After a long wait, the Fed finally did raise the federal funds rate by 0.25% last month.  You may not have noticed the impact in your financial statements yet, but investing in fixed income is becoming more challenging, because traditional bonds with fixed coupons or longer maturities typically recede in price as interest rates rise.  Bonds have performed well in the past decade but even they may struggle to deliver the total return you expect over the next few years.  So what can you do to reduce the interest risk in your portfolio?

Hedged Equity Strategy - Targeting A Smoother Ride for Equity Investors

By Echo Huang, CPA, CFP®, CFA

As the US stock markets have done well for the past 8 years, many investors wonder if their portfolios are positioned well for potential market corrections.  Though it is impossible to predict the future, expecting volatility in the coming years is a safe bet.  Market volatility is normal, and feeling uneasy about a lower portfolio value is normal too.  Historical analysis shows that pullbacks of 5% have occurred about once a quarter, and pullbacks of 10% are likely to occur once per year.  Large pullbacks greater than 20% tend to occur just once per market cycle.  It is especially important to be mindful about how to dampen portfolio volatility in the later stages of the business cycle.

With the memories of large losses in stock markets in year 2008 when S&P 500 Index lost 38%, many investors feel like allocating more to bonds and cash now to reduce volatility of portfolios.  However, while bonds are part of a diversified portfolio, bonds are not paying much interest and the value of bonds tend to go down as interest rates are likely to increase in the future.  Money market funds are earning less than 1% and are not likely to provide returns exceeding inflation.  At Echo Wealth Management, we have considered various alternative strategies to reduce equity risk and have implemented three equity alternative strategies in our client portfolios.

Have You Considered This Mega Roth Strategy?

By Echo Huang, CPA, CFP®, CFA

Last month, one of my new clients and I called the administrator of her old 401(k) plan to rollover the balance to her IRA account at TD Ameritrade.  To her surprise, she had $36,000 in after-tax contributions (not the same as a Roth) with earnings of $70,000 from the after-tax contributions she made many years ago in addition to $700,000 pre-tax contributions and earnings.  She was able to request two checks - one for the $36,000 to a new Roth IRA account (a Roth conversion that is tax-free because there is no taxation on otherwise after-tax funds!) and one for the $770,000 to a traditional IRA account (which does not incur an income tax assessment by virtue of being a rollover).  The end result – now she has $770,000 of all pre-tax funds in an IRA, $36,000 in a Roth IRA, and her tax cost this year is zero!

One great benefit is that the balance in her Roth IRA account will now grow tax free!  It was a pleasant surprise for both her and for me, but I thought to myself “If she had rolled-over the $36,000 to her Roth IRA earlier in 2014 or 2015, the earnings from this after-tax contribution in the past two to three years (i.e. $7,000) would have been tax-free instead of being in an IRA that will be taxable upon distribution.”  And this made me want to tell you, that if you have made any after-tax contributions to your 401(k) from before the Roth 401(k) became available, you should consider reviewing the plan provisions on in-service withdrawals if you still work for this company.  If you have already left or retired from this company, it’s still easy, you can do what my client did.  But leaving an after-tax balance in the plan does not help you grow tax-free because the earnings from the after-tax contributions are taxable if you take distributions from the plan to spend in the future.

Financial Planning Like It's 1999!

By Tyler Lodahl, Associate Wealth Manager

When we are children and young adults, it can be easy for us to go about our lives without thinking about the true value of learning particular skills now, when we are young, rather than waiting until we’re older. When I look back at my life through those halcyon days of middle and high school, and even college, it makes me truly realize the significance and value of learning particular financial life skills when we’re young. These skills, I now realize, not only impact a young adult’s knowledge and understanding of finances at that age, but also evolve over time as they gain life experience and exposure to new and more complex financial concepts. As a Junior and Senior at the University of Wisconsin-Madison, I served as a peer educator for two Financial Life Skills courses, one for freshman/sophomore students, and the other for upper classmen, with most of the students being seniors preparing for life after graduation. The courses covered topics ranging from our personal view of money based on our core values, beliefs, upbringing, etc., to preparing financially for unexpected life events by establishing a “rainy day fund”, to utilizing insurance to best fit our needs. My interactions with these college students and other students over the years related to personal finance have highlighted for me a few key financial life skills/concepts. Three concepts that consistently arose and that I wish I was exposed to in greater detail at a young age are:

  1. Budgeting/cash flow management;
  2. The power of paying yourself first as a saving strategy;
  3. The value of compound interest.
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