November 2005 Newsletter

Counting Our Blessings

Fall seems to be the time of change at Silver Oak, and this year is no exception. Our key employee and friend Betsy Blank resigned from the firm after almost ten years' employment, and realized a long time dream of moving to Montana. We all miss her and wish her well.

We are fortunate that Jessi Howe has the time and interest to take over many of Betsy's former tasks, and to quickly find a bookkeeper, Karen Joslin, to handle our accounting duties. Laura Herburger, a college student, now helps with file management on a part-time basis. Jessi has also enrolled in the Certified Financial Planner program to enhance her skills.

Steve and I love our work and clients and plan to continue at Silver Oak for many years to come, but we are also mindful that we won't live forever. To improve the odds that Silver Oak can continue to serve clients that need us, we have hired a new member of the team.

Ben Gilbert received his Executive Certificate in Financial Planning from the University of Portland in 2005 and will take the CFP exam this month. He graduated from Humboldt State University in California with a B.S. in Business Administration and has broad experience with financial analysis tools and concepts. He will work at Silver Oak beginning in January as a financial planning intern and also work on special projects. With your permission, he will be sitting in on client meetings throughout the year.

Steve celebrated the start of his 10th year at Silver Oak on October 1st, and next year Silver Oak itself will complete its 15th year in business. Thanks to all of our clients, colleagues and friends for making this adventure both possible and so enjoyable!

This year our significant charitable contributions went to: Oregon Food Bank; Habitat for Humanity Portland; Portland Impact; The Foundation for Medical Excellence; Northwest Medical Teams; and Congregation Shir Tikvah Torah Fund (in honor of former client Cathy Thaler).

Special Rules for Charitable Gifts in 2005

Part of the Katrina Emergency Tax Relief Act passed last month by Congress is a provision temporarily suspending the limits on charitable gifts made in 2005. Outright gifts of cash made by individuals between August 28 and December 31, 2005 to any qualified public charity can be deducted to a maximum of 100% of Adjusted Gross Income. (Normal rules limit deductions of cash to 50% of AGI.) You can actually reduce your income tax liability to zero for this year.

Because of this new rule, taxpayers over the age of 59-1/2 have a special opportunity for the rest of this year to withdraw funds from their qualified retirement plans, IRAs or tax-deferred annuities to make additional gifts to charity.

Note that this rule only applies to gifts of cash. Under traditional charitable planning, it is usually more beneficial to gift appreciated securities to avoid the tax on investment gains. But the limit on those gifts is still 30% of AGI per year. The 2005 increase in allowed gifts of cash means that taxpayers will need to sell the securities first (but the larger deductible gift will in effect also avoid the tax on gains).

Consult with your tax advisor about both the optimum amount to contribute in 2005 and the impact on your financial situation.

Investor Mistakes

A poll conducted by Merrill Lynch Investment Managers of non-retiree households with at least $75,000 in assets and annual income found that:

Another aspect of investor mistakes is described in the enclosed copy of "The Wealth Management Report," reprinted with permission. Like The Legacy Group, Silver Oak considers itself to be a fiduciary to our clients and strives to provide the most objective advice and counsel we can. All investors need to be careful and critical of their money managers and others who offer investment advice, including insurance products and real estate deals.

Investment Boot Camp

Our next workshop on investment fundamentals and emotions will be:

Saturday, February 11, 2006 - 9:30 am to 11:30 am

Please call or email Jessi to register.

Of Note

If the minimum wage had increased at the same rate as corporate CEO pay for the past 15 years, it would now be $23.03 an hour. — The Chicago Sun Times

Last month Dr. Rachel Naomi Remen gave a presentation at a conference for physicians sponsored by The Foundation for Medical Excellence. She spoke about physician mission and calling, and her concern that one-third of physicians surveyed report a loss of satisfaction with their careers. Dr. Remen encouraged the audience to start keeping a daily journal where you pay more attention to the positive aspects of your life. Starting at the end of the day and going backwards, write the first thing you can think of to answer:

This can also be done as a verbal exercise with your family at the dinner table. Many studies have shown the benefit of positive attitudes on health and happiness; these questions can encourage such an outlook.

Silver Oak recently amended its ADV paperwork filed with the SEC under the Investment Advisors Act and will provide a copy to any interested client. New information includes references to our code of ethics, compliance procedures, disaster contingency plan and updated client confidentiality policy.

Office Closure: We will be closing the office from Wednesday December 21 through January 1, 2006 to enable employees to spend the holidays with their families and friends. We will be checking voice mail and email for any emergency situations.

Happy Holidays!

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