Nick Murphy, CFP®

Founder - Counterweight Private Wealth • Guiding Legacy-Driven Families with Tax-Efficient Plans • Carolina Hurricanes Diehard
#WealthManagement • #TaxPlanning

[Nick Murphy, CFP® @murphnc]

@FutureCanes Bring up Nadeau, with Aho/Svech. Jarvi goes to 4th line. Robby or Carrier sit.

Gotta do something. I love Jarvi but he was the worst player on the ice last night.

[Nick Murphy, CFP® @murphnc]

@Mattsomma12 @ginger_caniac Bring up Nadeau, with Aho/Svech. Jarvi goes to 4th line. Robby or Carrier sit.

Gotta do something. I love Jarvi but he was the worst player on the ice last night.

[Nick Murphy, CFP® @murphnc]

@FFCane32 I hate saying it, but we should look yo trade Aho. He’s been absent.

[Nick Murphy, CFP® @murphnc]

Give me a break. As someone who has watched the Brind’amour coached Canes for a long time, this has to be one of the most ridiculous takes I’ve ever heard. One of the criticisms the fan base has always had of RBA is that his teams play too soft, lack the grit, and aren’t willing to get into the mud with other dirty teams.

[Nick Murphy, CFP® @murphnc]

@AGoldFan It’s the freaking Eastern Conference Finals….put the whistles away. If this was Florida, they’d be cross checking guys off their skates and not get called.

[Nick Murphy, CFP® @murphnc]

I’d agree that buying back your time is definitely near the top. But I’d argue that “giving it away” may be the top answer. Once they hone things like purpose, legacy, and intentionality….it’s an awesome progression to watch. I know you’ve seen it as well.

Though I suppose you could argue buying back time allows you to invest your time intentionally in the areas that create impact and build legacy.

So…..

Maybe both are correct 🤣

[Nick Murphy, CFP® @murphnc]

Read the Bible for yourself.

Forget about "religion".
Forget about what you heard growing up.
Forget about what any preacher has said.
Forget about any and all preconceived ideas.

Just you and the Bible, and ask God to show you truth.

What do you have to lose? If there is no God, you won't gain or lose anything from this exercise.

But if God is real, and the Bible is the Word of God. . . you will gain everything.

[Nick Murphy, CFP® @murphnc]

He's right about tax planning not usually being provided by your CPA. From experience, we find that almost all of our client's CPA's are simply just documenting tax activity and filing the return. That's why we integrate tax planning into our own model.

But a word of caution on the "advanced tax strategies" you see on social media.

Trust me, my feed is full of "tax experts" pitching "advanced" tax strategies. What they don't tell you is that while many of their strategies are legal and can be effective, they often add incredible complexity, have strict qualification tests, immense record keeping burden, are very costly to maintain and administer.

Furthermore, if you're using losses to offset income, those losses must actually be supported by legitimate economic activity (not just paper math).

And before you run with every influencer's favorite tax deferral scheme . . . depreciation - I encourage you to look up the rules on "depreciation recapture" before you jump head first into that pool.

There is no free lunch.

[Nick Murphy, CFP® @murphnc]

I'll say it.

I believe building passive income streams your 40s and 50s is a massive tax mistake.

Engineers, executives, doctors buying rental properties or loading up on income heavy portfolios while they're still working. . . . why?

On the surface, it makes a lot of sense: build up income streams now so they're ready when you retire.

But just because it makes sense doesn't mean it works out.

The problem is you're still working. You're probably in the 32%, 35%, maybe 37% federal bracket. Not to mention the extra 3.8% net investment income tax.

And now you're adding taxable income on top of an already high W-2.

Why would you willingly receive income you don't need right now, at the highest tax bracket of your career?

I know some of you will argue that you can structure those passive income vehicles and pay very little or no tax. Trust me, my social media feed is full of "tax experts" pitching these tax strategies.

What they don't tell you is that while many of those strategies are legal and can be effective, they often add incredible complexity, strict qualification tests, record keeping burden, and that any losses must actually be supported by legitimate economic activity (not just paper math).

And before you run with every influencer's favorite tax deferral scheme . . . depreciation - I encourage you to look up the rules on "depreciation recapture" before you jump head first into that pool.

Instead of building passive income, what I'd rather see is that same capital going into growth assets that don't produce income. No dividend, no rent check, no taxable event, just appreciation.

You can always convert a growth asset into cash later.

You cannot un-ring the bell on income you already received and paid 40 cents on the dollar for.

The mental shift I try to help people make: stop asking "how do I build income?" and start asking "how do I build a pool of assets I can convert to cash, strategically, at the right time?"

Those two questions lead to completely different behaviors. And completely different tax outcomes over the life of your retirement.

I'll get pushback on this. Our culture loves the idea of passive income.

But a paycheck you can't control, arriving on someone else's schedule, taxed at whatever rate the government decides? That's not freedom. That's just a different kind of obligation.

Build the asset. Control the conversion. That's the real game.

[Nick Murphy, CFP® @murphnc]

@Apokalypz042224 @Canes @DebM_ACK Haven’t seen it personally, just heard from a couple people they saw it there.

[Nick Murphy, CFP® @murphnc]

@SCwxFrankStrait @Canes @DebM_ACK Hopefully my the sarcasm of my post came through. 🤣

[Nick Murphy, CFP® @murphnc]

@BarbellFi What are you going to do in 10-15 years when that only covers half the rent?

[Nick Murphy, CFP® @murphnc]

The 4% rule is DEAD!

I’ve been on some Reddit boards lately. It seems to be the prevailing assumption.

Now, the 8% withdrawal rate is showing up in my client conversations….and It concerns me.

I was in a conversation recently and someone said in passing: "Seems like everybody knows 8% is the new 4%."

I didn't say anything in the moment. But I've been thinking about it since.

There's a lost decade that a lot of people have forgotten. 2001 to 2011. Ten years where the S&P 500 essentially went sideways. If you retired in 2000 pulling 8% annually, the math is catastrophic.

You're selling a shrinking portfolio at full clip with no paycheck to backstop you.

The thing about sequence of return risk is that it doesn't care about your average return. It cares about when the bad years happen. A 20% loss in year 2 of retirement does more permanent damage than a 20% loss in year 18.

Because in year 2, you haven't built up the buffer. You're selling depleted assets to fund a lifestyle. Those shares don't come back.

The creator of the 4% rule recently updated it. To 4.7%. Not 8. Morningstar has it closer to 3.3-3.8% depending on portfolio type.

I'm not saying be so conservative you die with a mountain of money you never enjoyed. That's a catastrophic failure to many.

But there's a difference between "thoughtfully stress-testing a slightly higher withdrawal rate" and "People on Reddit say 8% is fine."

We're in a long bull run. Recency bias is happening.

The traumas of 2008, of the last lost decade, have faded. And I'm watching people build retirement plans on assumptions that only survive if nothing goes wrong.

[Nick Murphy, CFP® @murphnc]

Despite what you’ve been told……

You do not need income in retirement.

For many years, the industry told you the goal is income replacement.

Build up enough passive income to replace your paycheck. Rental income. Dividends. Annuities. A pension if you can get one.

I think in pictures. And the picture I keep coming back to is a bucket with a hole in the bottom, constantly leaking water whether you need it or not.

So here's the deal.

If income is coming out of that bucket on a schedule you don't control, you've also lost control of one of the most powerful levers in retirement, which is your taxable income in any given year.

*What you actually need isn't income. It's cash.*

Available when you need it. Generated from whatever source makes the most sense that year, at the lowest possible tax cost.

That's a completely different problem to solve than "replacing your income."

When we work with someone 1-5 years out from retirement, one of the first things we do is stop talking about income replacement and start talking about cash flow engineering.

How much cash do you need to land in your checking account, and when? Then we work backwards from there.

Some years we pull more from an IRA. Some years we harvest capital gains. Some years we do a Roth conversion instead of a distribution. Sometimes we do all three.

The blank canvas matters. Pre-designated income, even "good" income, paints over that canvas before you ever get to use it.

Over a 25-30 year retirement, that blank canvas is worth six to seven figures in tax savings. All because we're controlling when income gets recognized instead of letting a dividend schedule or an annuity contract do it for us.

[Nick Murphy, CFP® @murphnc]

@BarbellFi Pretty sure if he’s spending everything he’s got now, he’s gonna blow through the $2M then too.

[Nick Murphy, CFP® @murphnc]

@davidsirota Because money can’t create purpose

[Nick Murphy, CFP® @murphnc]

@MeasureTwiceMNY But I thought AI was going to replace humans advisors?

[Nick Murphy, CFP® @murphnc]

@SportsCenter @PKSubban1 This dude hates the Canes….even if they win the Cup, he’ll still hate on them.

[Nick Murphy, CFP® @murphnc]

@BizNasty2point0 @spittinchiclets #connsmythe