Last updated: 6 Dec 23 00:01:40 (UTC)

Michael's Financial Philosophy, Checklist & Service Model

This note began over 34 years ago when I entered into the investment advisory business and began cataloging my beliefs and insights. Eventually I shared it with a few clients (on physical paper!) when they asked for a brief summary of my financial philosophy. What you see here is my most current edition of that original note. ―Michael Paulding Thomas



I follow the investment philosophies of The three principles below are the foundation of my investment philosophy which is based upon the teachings of Nick Murray and Warren Buffet.

1. Invest 100% in the World’s Great Companies via Mutual Funds.

Most people who invest most of their capital in fixed income investments as they go into retirement will run out of money well within their lifetimes. You are not investing to retirement, but through retirement, and very probably on to the next generation. Equities = life. Bonds = death-in-life.

My equity investment management firm of choice is Capital Group / American Funds.

“Equities are the only asset class that fully captures human ingenuity, which is the most valuable asset on earth.”Nick Murray

2. Have an Intelligent Retirement Withdrawal Strategy.

Americans say they want for retirement is safety and income. What they really want is all the income they can get, and the illusion of safety. The best vehicle to create a guaranteed retirement income that outpaces inflation is a variable annuity with a guaranteed income rider that is invested in 100% equities (see #1 above).

3. Proper Investor Behavior via Coaching.

The dominant determinant of the real long-term returns isn’t investment performance. It’s investor behavior. Hire an Advisor you trust to help you avoid the Big Mistake (the inability to distinguish risk from volatility).

“Without an adequately compensated advisor to help with selection and discipline, the individual investor will simply make all the classic and horrendous mistakes.”Nick Murray

“People make better decisions with financial advisors.”Robert Shiller, Nobel Prize-winning economist



  1. 401(k). Contribute up to the matching point.

  2. Roth / Traditional IRA. Fully-fund your IRA. Roth is preferable, if you qualify for it.

  3. 401(k). Contribute past the matching point up to the maximum allowed.

  4. SEP IRA. If you’re self-employed and/or get paid via 1099.

  5. Variable Annuity - pure growth. If you have money available to invest for retirement, use a VA for tax-deferral.

  6. Variable Annuity - guaranteed income. When you’re approximately 10-years from withdrawals start this product.

Minor Accounts

  1. UTMA. When saving for your child for non-education purposes invest in a Uniform Transfer to Minor Act.

  2. 529-Plan. For higher-education / college invest in a 529-Plan.

  3. Roth IRA. As soon as your child as earned-income, such as a summer job, have them invest in a Roth IRA.

  4. ABLE Accounts. Achieving a Better Life Experience Act allows individuals with mild to severe disabilities to open investment accounts.

Emergency / Protection / Insurance

  1. Emergency Fund. I recommend saving three to six months living expenses. I like the American Funds Tax-Aware Conservative Growth and Income Portfolio.

  2. Living Trust. If you are married, have kids or real estate you need a living trust to avoid probate (and much more).

  3. LLC + Land Trust. If you have rental properties and/or want to really protect your real estate against law-suits etc.

  4. Term Life Insurance. Always get term insurance. How do you know if you need life insurance? Ask yourself if your spouse/kids will have financial problems if you die?  If ‘yes’ then you need it; if ‘no’ then you don’t.


Crafting a long-term plan and funding the plan with a long-term equity portfolio: 20%
Coaching clients to continue following the plan through all the cycles of the economy, and all the fads and fears of the market: 80%
Analyzing/interpreting the economy and current events. Timing the market, calling tops and bottoms. Identifying consistently top-performing investments: 0%


  1. First and most important, you must call or email me anytime for any reason whatever. Please don’t ever hesitate.

  1. Next, I’ll certainly call/email if and when something is going on and that’s important enough to require a decision of some sort. This will rarely happen, as our whole philosophy is based on not reacting to current events in the economy or the markets.

“Nothing that happens in 90 days can have any bearing on a long-term investment plan.”Nick Murray

  1. Once a month I will email my client newsletter (subscribe here) which includes the current month’s Client’s Corner by Nick Murray, the Podcast-of-the-Month, the Financial Book-of-the-Month, and my Financial Tip-of-the-Month. In the July and January newsletters I include my Mid-Year and Year-End Client Letters.

  1. Finally, every January I will email a summary of your plan, and most importantly, show you the number of shares you own of your mutual fund(s).

Other than that: not much. It’s deliberately relaxed, informal, friendly - but most of all open, in both directions.



Michael Paulding Thomas

  • Celebrating 34 years in the industry
  • Investment Advisor • Securities Principal
  • Series 6, 26, 63, 65 • Life
  • Mutual Funds • IRAs (Roth, Traditional, SEP, Simple, Minor-IRAs) • 529 College Plans • UTMA minor accounts • ABLE accounts • Variable Annuities • 401k Plans • Term Life Insurance • Living Trusts, Land Trusts, LLC’s.

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Securities offered through Innovation Partners, LLC. Member FINRA/SIPC