As Simple as Two Taps

There is an old story about a plumber who is called to fix a blocked drain.

He takes a careful look at the drain, fills the basin with water, and listens closely to the pipe for a few seconds. He then walks out to his truck, comes back with a hammer, and taps the drainpipe twice in one specific spot. Instantly, the blockage clears.

“That’s fantastic!” says the homeowner. “What do I owe you?”

The plumber hands him an invoice for $375.

The homeowner is shocked. “Three hundred seventy-five dollars? All you did was hit the pipe twice with a hammer!”

The plumber takes the invoice back and revises it for more detail:

• Two taps with a hammer: $5
• Knowing exactly where to tap: $370

Financial planning is often the same way. The solution is simple, but the implementation is not easy. It takes a great deal of confidence honed by lots of experience.

Many people assume the value comes from picking investments, selecting funds, or finding the next great opportunity. While those things matter, they are rarely what determines long-term success.

The truth is that there are countless ways to grow wealth over time. The stock market has rewarded patient investors for generations. The real risk is not failing to find the perfect investment. The real risk is abandoning a sound plan when fear takes over. And fear will always find a reason.

As we move through the rest of this year, investors may face plenty of unsettling headlines. The conflict involving Iran, concerns about oil supplies, inflation worries, government deficits, and whatever unexpected event comes next could all create periods of market volatility.

That is when a financial planner earns their keep.

Not by predicting the future, but by helping clients remain disciplined when emotions are urging them to do the opposite.

Sometimes the most valuable advice a financial planner gives is surprisingly simple:

“Stay with the plan.”

Just like the plumber, the value isn’t in the two taps. The value is knowing exactly when and where to tap. Simple… but not always easy.

Fun Fact: When Elon Musk started SpaceX, the company suffered three consecutive rocket launch failures. A fourth failure likely would have ended the company. Instead, the fourth launch succeeded in 2008, and shortly afterward NASA awarded SpaceX a major contract. Today, SpaceX launches more rockets than any other organization in the world.

Sometimes success isn’t about avoiding setbacks. It’s about having the discipline to stick with a sound plan when others would have given up.

Optimism Builds America

Let me start with five facts about America today:

1. By most standards we are physically safer than we have ever been. Violent crimes are well below the peaks of the late 80s and early 90s. The long-term trend has been toward a safer society in almost every crime category.
2. Material living standards are as high as they have ever been. Americans have access to technology, medical care, communication and consumer goods that would have seemed almost fictional a few decades ago. What your smartphone does for you daily would have required multiple devices costing tens of thousands of dollars just 30 years ago.
3. Unemployment remains historically low. The U.S. unemployment rate averaged 6.2% in the 70s, 7.3% in the 80s, and around 6.2% in the first decade of the 2000s. As of April 2026, the unemployment rate was 4.3% which would have been considered exceptional over the last 50 years.
4. Americans are living longer. The average American life expectancy in 1980 at birth was 73.7 years. Today is approximately 79 years. Even more to the point, life expectancy after reaching age 65 is currently 19.7 years. That’s the highest level on record.
5. American retirement savings and home values have surged. Ten years ago, U.S. household net worth was roughly $100-110 trillion, and in 2025 it was about $175-184 trillion. That’s a 75% increase in a decade.

Setting aside politics, it’s curious that despite these amazing accomplishments over the last several decades we as Americans still hold a negative view as to the state of our country.  A recent survey by the federal government found that Americans are doing okay, but their view of the national economy has fallen sharply. Almost 75% of Americans say they are “doing okay” or “living comfortably” but only 25% rate the national economy as good or excellent.

This is not to downplay the fact that there are many Americans, including children, who are suffering and need lots of financial and emotional support. They can’t be forgotten. But the pessimistic attitude of Americans in general doesn’t help things in my opinion. The explosion of social media and targeted stories and video clips put a lot of focus on the negatives. Additionally, after a few clicks on some of this negative information, the algorithms on your phone continue to direct you to even more negative stories and videos.

All this concerns me because optimism and creativity are the most important elements of American society. About 5 million new business applications are filed annually in America. Every one of those applications started with someone’s idea and confidence that they can make things better for themselves in the future. I know that with the two businesses I started from scratch, I held onto the belief that I could make it work and that I could create something of value for my family and for others. There were some challenging times early on when the only things I could grab on to were my optimism, unwavering confidence, and a stack of bills that I needed to pay.

When you’re scrolling through all the news on your phone, take a minute to find a quote or a video on something optimistic. As management consultant and business author Peter Drucker once said, “The best way to predict the future is to create it.” Let’s create the best future we can for our society.

Fun Fact: Before building one of the world’s most successful companies Walt Disney was fired from a newspaper job because the editor reportedly felt he “lacked imagination and had no good ideas.” Then his first animation company went bankrupt and he struggled financially. Despite losing the rights to a successful cartoon character he had developed, he remained optimistic and while riding the train home he began to develop a new character: Mickey Mouse. Optimism is the secret sauce for almost all success.

Ever Wonder How Michigan Taxes Your Retirement Income? The Answer Isn’t Simple.

Many people assume pensions, IRAs, 401(k)s, and Social Security are all treated the same under Michigan tax law. Historically, that was not always the case, although recent law changes have simplified things for many retirees.  The good news is that Michigan has become much more retiree-friendly in recent years. The bad news is that the rules are still surprisingly technical beneath the surface.

Here is the simplified version:

• Social Security benefits are not taxed by Michigan.
• Historically traditional pensions have generally received the most favorable treatment, especially many public pensions.
• IRA withdrawals and 401(k) distributions now generally qualify for Michigan retirement-income deductions for most retirees under the newer phase-in rules.
• Roth IRA and Roth 401(k) withdrawals are usually Michigan tax-free if they are federally tax-free.

One area that still occasionally creates confusion involves older rollover situations. Historically, Michigan law drew technical distinctions between certain pension benefits, IRAs, and defined-contribution plans. As retirement laws evolved and rollover transactions became more common, some older Treasury guidance was never fully updated, which can still create questions in unusual cases involving lump-sum pension rollovers and commingled retirement accounts.

In most ordinary situations involving IRAs, 401(k)s, employee contributions, and employer matching, most tax practitioners today treat the distributions as qualifying retirement income under Michigan’s newer rules. The more difficult cases usually involve older pension-style plans, governmental plans, or unusual rollover histories.

The practical lesson is simple:

• Keep good rollover records.
• Preserve old pension and 401(k) statements.
• Coordinate major retirement distributions with a knowledgeable CPA.

Michigan retirement taxation today is far more favorable than it was a decade ago, but it still serves as a reminder that retirement tax rules can evolve over time and sometimes the administrative guidance struggles to keep up.

Fun Fact: Michigan did not broadly tax retirement income until 2011. Before that, most retirement income was largely exempt from Michigan income taxes.