May 2001 Newsletter

Silver Oak's Giving Circle

When we started Silver Oak Advisory Group ten years ago, we drafted the following mission statement:

  1. Have fun
  2. Do meaningful and challenging work
  3. Raise the standard of education and work product in the financial community
  4. Make enough money
  5. Give back to the community at large

As part of number 5, and in honor of our ten year anniversary, this year we are establishing the Silver Oak Advisory Group Charitable Giving Circle.

Charitable giving is a part of our values at Silver Oak. A charitable giving circle is a group of individuals who pool their funds, invest them, and make joint decisions about how to distribute the income and/or principal of the funds to charitable organizations in the form of grants. Kind of like an investment club, only you give the money away.

Giving circles are just one way you can be more thoughtful and strategic with your charitable giving. Most of us give money in response to requests from groups, being a member of a board or organization, or social obligations. Strategic giving is designed to give donors a more direct connection with the process, through researching and selecting the recipients. Instead of merely responding to requests for funds, you can plan and control your giving.

Because of the giving circle, you have the ability to make larger gifts than you would as an individual, and thus make a bigger impact. Donors will often commit to participate in a giving circle for a number of years at an established dollar level. The pooled funds can be held at Oregon Community Foundation (OCF) as a donor-advised fund.

Depending on the number of members in the giving circle and the amount of contribution, we are guessing that the circle would meet once or twice a year to determine distributions or grants. Members can make suggestions for recipients, and the OCF will also provide ideas.

Initially, we are interested in focusing on the issues of hunger and children in the local area. (Of course, this focus can change by the vote of the members of the circle.) Our goal is that in three to five years, we will be able to give away $50,000 a year.

If you are interested in participating in this giving circle, or in receiving more information about the idea, please contact us. Or, if you want to start your own giving circle, contact Dianna Smiley at the Oregon Community Foundation at 503-227-6846 or http://www.oregoncommunityfound.org/.

Values-Based Financial Planning

by Peter L. Samson, CFP™

Values-based financial planning seeks to align financial solutions with your most fundamental guiding principles and values in life.

As you start to think about your values, you will probably begin with things like "meaningful work" or "time with my family." But soon the exploration will be touching on still deeper things that are central to your sense of fulfillment, life- purpose and well-being. This discussion may not take very long. But they may be the most important moments of your financial planning and can mark the beginning of a long, challenging, and ultimately very rewarding mental journey.

I heard someone refer once to "The Three S's of Life: Spending, Saving and Sharing." Each of these, done with thoughtful values-focused thinking, creates its own form of wealth. I call them personal wealth, financial wealth and social wealth.

Personal wealth is the wealth that comes from balancing the many demands on the limited time, money and personal energy in your life. This can start by viewing every single expense through the lenses of your values.

Financial wealth is the comfort that comes from having the flexibility and independence to realize your financial goals. Your financial goals are your dreams; you may even wish to try writing a Family Financial Philosophy statement.

Social wealth is the satisfaction that comes from putting the personal and financial wealth you have built to work on good things beyond your own personal life by sharing with others.

Any careful and extensive look at values quickly recognizes their complexity. Each of us faces our own set of challenges and wrestles with these issues in a different way. Examining our lives through values-focused thinking is constant, hard work, but well worth the effort. Values-based financial planning is not going to suddenly illuminate for you the meaning of life, but it could get you a good deal closer to it.

Investment Boot Camp

[Now that there's a reality-based TV show called "Boot Camp" I'm afraid we'll have to change our name...]

Last Investment Workshop before the summer break will be Wednesday, June 6 from 3:30 to 5:30 pm. Call Mary or Betsy at 503-242-1715 to register.

Our next programs will begin in the fall.

Roller Coaster Investments

We are all having our risk tolerance tested these days. The following table shows the returns of major asset classes for last year (2000) and for the first quarter of this year (3-31-01). Diversification is helping to mitigate some of the damage, but with so many asset classes on the decline, it seems there is no safe place to hide.

Asset Class
Return for 2000
12-31-00 thru 3-31-01
Money Market 5.96% 1.40%
Short Term Bonds 6.86% 2.17%
Intermediate Bonds 10.10% 3.40%
International Bonds -2.63% -4.90%
S&P 500 Index -9.11% -11.85%
Nasdaq Index -39.29% -25.51%
US Small Stocks -3.59% 0.73%
Large International -13.96% -13.67%
Small International -31.76% -4.88%
Real Estate 30.74% -1.02%
Gold -5.44% -6.10%

What investors want to know is, when will it stop going down? Unfortunately, no one can give us that piece of information (the Wall Street saying is, "no one rings a bell at the bottom"). Our discipline of rebalancing portfolios pushes us to sell high and buy low, but doesn't guarantee the lowest price of the year.

Remember that these drops are following the best twenty years of U.S. large stock and long term bond returns in history. Of course we don't know what the next twenty years are going to look like, so diversify -- and hang in there!

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