Summer 2019

GENDER INEQUALITY

For my inaugural newsletter contribution, I’d like to
talk a bit about women in finance, since gender plays a role
in why I’m so excited to be working at Cornerstone. It is
evident that women are disproportionately impacted by
household finances – living longer on average than men,
and often with disproportionate savings. But being a woman
working in finance itself has also been eye-opening, and
led me to where I am today.

As a child, I was unaware of how gender shapes the
world. Rather, I simply saw money as a tool… and a powerful
one at that. I remember opening my first savings account
after rolling my jar of coins at age 10. Then buying
my first CD and learning that money can generate more
money all by itself. I remember playing “The Stock Market
Game” in middle school math class, back when stock prices
were reported in fractions in the newspaper… and how
my choice of stock – Hershey – performed differently than
a peer’s choice, which was Microsoft. When I received my
first paycheck as a dishwasher, I had a goal of earning at
least $2,000 that year to max out my Roth IRA contribution.
Later, among peers, I saw how savings decisions
could fund a college education (or not).

Throughout these experiences, I developed a feeling
that money and financial advancement had no bias involved;
one simply needed to save and participate in the
market. But as I grew, I learned about systemic gender
bias, and how it impacts daily life, finances, and career
choices. For example:

• In a boardroom meeting about product development, I
  was the sole female manager, and also the only voice
  to object to using a man’s tie as the icon choice to designate
  an individual as CEO.
• I had also been the only one to point out the inequality
  in the proposed dress code.
• I’ve been the sole participant among a dozen men in a
  financial exam study group, and the only one to respond
  to a peer’s assertion that feminism was no longer
  needed.
• I’ve received a financial licensing exam textbook with
  only an image of a man on the cover.
• Over several years as a corporate governance researcher
  I saw our annual survey result in what we ended up calling
  a “glacial pace” of change in the percentage of women
  on US boards.
• I’ve held or interviewed for jobs where all of the advisors
  were male and all the administrative support staff
  were female. I have also had female friends ask why I
  continue to work in finance at all, given their impression
  of the industry’s reputation.
• I note that the percentage of Chartered Financial Analyst
  and CERTIFIED FINANCIAL PLANNER™ designation
  holders is still just 20% female.

Combining those formative money memories with what
I’ve witnessed since, I still consider money to be a tool, and
one that can not only impact the course of your life, but also
can help change the dynamics of the larger society (for better
or worse).

I am grateful every day to have had the support of other
people throughout my life and the opportunities to pursue
education, and I’m pleased to be working in a field that helps
others move forward in their financial security.

I encourage everyone, women especially, to learn as
much as possible about strategies to save and invest, and to
also consider financial courses and careers – it is still necessary
to have a greater diversity of perspective in finance, and
I’ve found it to be a highly gratifying path.
~Michelle

You can read more about Michelle’s take on the world at
our website!

Statistics from the World Economic Forum

• It will take 108 years to close the gender gap.
• Women are 47% more likely to suffer severe injuries in car
  crashes because safety features are designed for men.
• For every female film character, there are 2.24 men.
• 33,000 girls become child brides every day.
• Only 6 countries give women equal legal work rights as
  men.

CHARITABLE DEDUCTIONS & THE NEW TAX LAWS

We’ve noticed on the 2018 tax returns that many of our
clients are now taking the standard deduction where they previously
itemized. In some cases, this has saved the client on taxes
because the standard deduction exceeded what they previously
were able to itemize. In other cases, due to some lost deductions,
taxable income has gone up. Regardless of whether
switching from itemizing to taking the standard deduction resulted
in paying more tax or less tax, one result of this is that
those who take the standard deduction can no longer deduct
charitable donations. Thus, the taxpayer gets no economic benefit
from donating to charity. This might influence some to reduce
their gifts to charity.

If you are now taking the standard deduction there are still
ways you may benefit from a charitable donation:

• Donate highly-appreciated stock or mutual funds. You won’t have to sell the security and pay capital gains tax, saving
  you from 15% to 33% tax on the appreciation.
• If you are over 70 ½, making a charitable donation directly
  from your IRA counts towards your required minimum distribution,
  and you won’t have to pay tax on the distribution.
• You may be able to “bunch” your donations. With this strategy,
  the taxpayer donates twice as much as usual in one year
  to charity, enabling her to exceed the standard deduction
  and itemize instead. In the next year, she makes small or no
  donations and takes the standard deduction. Using this strategy
  over a two-year period maximizes deductions.

Regardless of economic benefit, donating to charity is still
beneficial to society and of course we encourage everyone to
give as generously as their income allows.
~ Jill

TARIFFS 101

By the late 1920s, with increases in productivity
related to electricity, manufacturing and farming, the
U.S. economy was at a point of over-producing and
under-consuming. (The opposite of the inflationary
“too many dollars chasing too few goods”.)

Senators Smoot and Hawley championed an act to
raise tariffs on imports, believing this would protect
American jobs and farmers from foreign competition.
A petition was signed by 1,028 economists in the
United States asking President Hoover to veto the
legislation. Feeling it would undermine international
relations, Hoover himself called the bill “vicious, extortionate,
and obnoxious”. Henry Ford called it “an
economic stupidity”, and the then JP Morgan CEO
nearly got on his knees, begging for the veto of this
“asinine” legislation.

Nonetheless, the Smoot-Hawley Tariff act was
signed into law in June of 1930, with Hoover bending
to his party’s wishes. This raised tariffs on over
20,000 imported goods. In retaliation (of course),
other countries raised their own tariffs. Many economists
and historians believe this exacerbated the Great
Depression. Canada, a loyal trading partner with
America, went on to forge a stronger link with Great
Britain.

This is one concern economists share in our current
environment of new tariffs and tariff threats: Other
countries may opt to form alliances that might reduce
their dependency on the dollar, American consumers,
and corporations. Stay tuned!

~ Susan

SUMMER READING LIST

• Becoming A Gentleman in Moscow
• There There
• Yes Please
• The Feminine Face of God
• The Guernsey Literary and Potato Peel Pie Society
• Leading with the Heart
• Queen Bee

CORNERSTONE HAPPENINGS

Please note that we close at 3 pm on Fridays until the first day of fall. With summer seemingly so fleeting, we encourage all staff to embrace the sunshiny warmth!

Mackenzie celebrated her 5-year anniversary at Cornerstone in April (see “time
fleeting” above!)
Mackenzie and Christina traveled to Austin for a NAPFA (National Association of Personal Financial Advisors) annual conference in May and then down to Boston to study with Dimensional Fund Advisors, an investment firm that applies academic research to the science of investing.
Jill, Jeff & friends traipsed about the Italian countryside in early May, relishing the food, wine, and sites.
Brittany attended a 1-day seminar on The Extraordinary Administrative Professional!
We happily welcome Michelle Lamb, a financial planner, to our Cornerstone team.