Austin Preece, Financial Planner

10/21/2026

Is it me?

Two days in a row now - Monday and Tuesday...

I've been told to have a great weekend.

What?

The weekend is, like, FOREVER from now!

Anyway.

Happy Friday!

09/07/2026

AI needs an expert to review its work.

Last week, I posted about an AI tax plan that had some rudimentary misses. Honestly, they're probably the result of the advisor asking the wrong questions, but that's kind of the point. If I used AI to draft this plan, it would have been really good - because I have a deep understanding of taxes. This advisor clearly didn't.

Here are the biggest ones that the advisor should have caught before delivering the report.

1. It targeted an effective rate of 22% for the Roth conversion limit.

Your effective tax rate is your total tax divided by your total income. It's not what tax-focused advisors use as a target for Roth conversions. We use marginal tax brackets, including the marginal effect of phasing out deductions and things like IRMAA and Social Security taxability. By targeting 22% for an effective rate, the advisor was going to push their future income down into the 12% tax bracket by paying taxes now at 22%. I don't know any advisor who has made a recommendation like this on purpose.

2. The Roth conversion target resulted in the partial phasing out of the Senior tax deduction of $6,000 for each.

This effectively increases the marginal tax rate *above* the standard marginal rate because you're reducing deductions while you increase income.

3. It showed them drawing the pre-tax accounts down to $0.

RARELY do we want to actually empty pre-tax accounts. For them, the illustration showed them paying 22% or more on their Roth conversions in order to pay $0 in taxes later in life. This would simply increase their total taxes during their lifetime and effectively decrease their net worth. It's especially bad because they give about $12,000/year to charity, so they wouldn't be able to take advantage of QCDs later in life.

The underlying assumptions were also bad.

It compared NO withdrawals from pre-tax accounts to Roth conversions that were too large, making the tax savings look higher than they would be in reality.

It also recommended paying the tax via estimated taxes from assets outside of IRAs. Only problem - this couple doesn't have any meaningful non-IRA asset base.

I couldn't tell where the clients' spending money was supposed to be coming from in this plan. You should know where your spending money is coming from in a tax plan.

Bottom line: if you're getting a tax plan done, make sure you're working with someone who understands taxes and can give tax advice.

The tell here for the clients was that after the advisor delivered this plan, he said: "make sure you ask your tax accountant about this." That should tell you that the plan is worthless.

09/03/2026

Well, now I'm confident that my job is safe from AI.

I recently reviewed a financial plan that ANOTHER ADVISOR drafted with AI.

Two things jumped out immediately:
1. The client wasn't satisfied - their questions weren't answered, so they came to me, hoping I could help.
2. There were all sorts of errors - the advisor wasn't very well trained in taxes, so he didn't notice tax errors, but there were some cashflow errors that he should've caught.

Now, I use AI for quite a bit of what I do.

But it's hard for people to trust that licensed advisors know what they're talking about.

How long will it be before they can reliably trust AI to do the work of an advisor for them (since they won't be able to verify the veracity of the AI output)?

My bet is that it's decades out at the very least. The world will change in other ways before AI takes good advisors out of a job.

08/26/2026

Business Owners:
Please don't bank everything on selling your business.

Yes, it's great to invest in yourself.

Yes, there's massive opportunity if you do it right.

But for every 1 business owner who makes it big with a business sale when they're ready to retire...

There are a dozen who didn't invest enough outside of the business and now can't sell their business for what they need to retire.

You don't want to be one of the dozen.

08/24/2026

When I started my firm, my investments were super simple. Now they're more complicated.

I posted about the fixed income side of my portfolios yesterday - today it's all about stocks.

When I started my firm, I had two holdings on the stock side of my portfolios. One for US stocks, another for International.

Now I have three different portfolios that make up the "risk-on" side of the portfolio.
One has 4 holdings.
One has 6.
One has 7.

The first is a global equity portfolio with small tilts to value in small-cap and mid-cap equities.

The second is built to be more diversified. In it, I reduce stock exposure but add:
-High duration treasuries
-Commodities strategies

When added to stocks, these asset classes can dampen volatility without reducing returns as much as a traditional fixed income holding would. This is because they're also volatile, but they have low correlation to stocks and to each other.

The third is built to be more diversified without reducing stock exposure in an effort to outperform the market. How do we do this you ask? Leverage. Don't try this at home. In this portfolio, we have:
-A 2x leveraged stock ETF to maintain 100% notional exposure to stocks
-The high duration treasuries and commodities strategies from the second portfolio
-Small (very small) allocations to Bitcoin and Ethereum

None of this is a recommendation to buy or sell specific investments or asset classes or to use leverage in your portfolio. It's solely an example of when a little more complexity can make sense.

08/21/2026

When I started my firm, I had one bond holding in my portfolios.

Now I have 5, and one of them isn't even a bond fund.

Some people think that's too complex, and that's fine. Could you get by with one bond holding? Sure.

But I'll tell you what - you can't find one holding that does what these 5 do together.

On the fixed income side of my portfolios, I'm looking to dampen the volatility of equities, but achieve higher returns of cash.

In order to do that, I'm looking for a few things:
-Low overall duration - I don't want this part of the portfolio to get decimated if rates rise.
-Low correlation to stock indexes - if stocks are down, we need this part of the portfolio to be stable, so you won't see high yield bonds here.
-Return potential that's higher than T-bills by about 1.5-2% - if we're not going to take risk to get higher returns, the money should just be in cash.
-Upside potential in a recession - I want something in there that will be up a lot of rates come down. This directly competes with the idea of having a low overall duration, so it's a small part of the portfolio.

So what do I have in here?
There's a T Bill strategy with an options overlay
There's a high-quality, floating rate bond fund
There's a merger arbitrage fund (the underlying investments in this one are stocks)
There's a AAA CLO fund
And there's a long-term treasury fund.

They all achieve a different objective for the portfolio, and they all have relatively low correlation to each other.

There will be years that the aggregate bond index outperforms this portfolio. There will be years that this portfolio outperforms the aggregate bond index.

But it does a better job of achieving the objective that my clients have for the conservative side of their portfolio.

And that's all that matters.

None of this is a recommendation to buy or sell any specific investments.

08/18/2026

Seriously, folks.

QOZ 2.0 is a really big deal, and we're not talking about it enough.

Check out my blog at preecefp.com/blog to see my latest post about how strategic use of QOZ funds along with other investment strategies can save investors with significant capital gains a boat-load* in taxes.

*"boat-load" is a technical tax term meaning "a lot". Sorry to get all jargony on ya.

Expert perspectives on financial planning, investment strategies, and market insights.

08/17/2026

Selling real estate?

You have a few options to avoid paying taxes on your gain.

Option 1 (and most common): 1031 Exchange into a new property.

You need to know that you're going to do this BEFORE closing, so reach out to your accountant (or me) if you're planning to sell. Your gain gets deferred into another property, as long as you follow all the rules (which are many).

Option 2: 1031 Exchange into a Delaware Statutory Trust (DST).

Maybe you don't want to worry about finding another property to sell. Maybe you want something that's completely hands-off. In that case, a DST could be a great option. The same rules apply as a regular 1031 exchange, but I've run into a lot of confusion from tax preparers on how DSTs work, so consider talking to someone who has dealt with them before in addition to consulting your tax preparer.

Option 3: Defer only the gains into a Qualified Opportunity Zone Fund.

This one is interesting, and more flexible. Here are some of the things that make it different from DSTs:
-You don't have to invest all of your proceeds (just the gain, so you can do something else with the rest of the proceeds).
-You don't have to know that you're doing this when you close. You have up to 180 days from the date of sale in most cases (sometimes longer) to reinvest your gains.
-The gains are deferred for up to 5 years from the date of your investment (not the date of the sale) as long as you invest after 1/1/27.
-In year 5, when you owe tax on those gains, the gains are reduced by 10%.
-If you hold the QOZ fund for 10 years, the gains on the sale of the QOZ fund are tax-free.

Pretty neat. If you want indefinite deferral, a 1031/DST may be the best choice. But if you want shorter-term deferral, reduction in gain, and potential for future tax-free gains, a QOZ fund might be your best bet.

Best part? These aren't gray areas in the tax code. They're not exactly simple, but if you work with someone who knows the process, it can be pretty hands-off for you.

08/16/2026

Wrote a new post! Don't like paying taxes on capital gains? You should definitely read this one.

Whether you're selling stocks, real estate, or a business, QOZ Funds can help you defer, reduce, and even eliminate taxes on capital gains.

https://www.preecefp.com/post/qz

08/14/2026

There are certain tax moves that are just... illegal.

"But is the IRS really going to come after me?"

Not a convincing argument. And honestly, quite misguided.

Walmart may not notice if you steal some of your groceries (those self-checkouts have been great for affordability).

Even if they do, they may not prosecute you if they catch you.

But that doesn't mean it's okay to steal your groceries.

Know what happens as a result of shoplifting?

Companies price it into their profit margins. That raises prices for everyone else.

If you cheat on your taxes, you're not beating the government, you're making life harder for your neighbor.

Not to mention, there's a chance that you DO get audited and lose.

Seriously, I don't like paying taxes any more than the next person.

But there are a lot of LEGAL strategies you should consider before the obviously illegal ones.

If you're not sure where to start, I know a guy.