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How should you pay for short-term financial goals?

19 October 2022
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The Financial Focus, by Michael Vondra, CFP

As you go through life, you will likely have long- and short-term financial goals. But how will your strategies for meeting your long-term goals differ from those needed for your short-term ones?

If you’re like most people, your biggest long-term goal is achieving a comfortable retirement. And for this goal, a common strategy is putting away money in tax-advantaged retirement vehicles, such as your 401(k) and IRA.

So, how should you go about preparing for shorter-term goals, such as a family vacation, home renovation, wedding or major purchase?

For starters, determine what your goal is, how much you can spend on it and when you’ll need the money. Even if you can’t pinpoint a precise amount, you can develop a good estimate. Of course, the sooner you start this process, the better off you’ll be, because you’ll have more time to save.

Your next decision involves the manner in which you save for your short-term goal. Specifically, what savings or investment vehicles should you use? The answer will be different for everyone, but you need to make sure that your investments align with your risk tolerance and time horizon. And you’ll want to ensure, as much as possible, that a certain amount of money is available for you at the specific time you’ll need it.

If you aren’t able to save enough to reach a short-term goal, you have other options — you can borrow what you need, or you can potentially sell investments to cover the cost. How can you decide which choice is best?

To help make up your mind, you’ll first want to consider some of the most common borrowing options: credit cards, home equity loans, personal loans and margin loans. (A margin loan lets you borrow against the value of investments you already own). How might each of these loans fit into your overall financial strategy? Will the repayment schedule work with your cash flow and budget?

You’ll then want to compare the costs and benefits of borrowing, in whatever form, against selling investments. For example, if you can borrow at a lower interest rate compared to the return you think you can get from your investments, borrowing might be a reasonable choice. You’ll also need to consider other factors, such as your credit score, taxes, fees associated with selling investments and time needed to repay debts. If, for instance, selling investments will trigger a large amount of taxes, borrowing might be preferable. You’ll also want to consider whether there’s a penalty or high costs associated with selling investments. In addition, if you have a long time horizon for a loan, you may want to sell investments to avoid paying interest for a longer period of time, and thus driving up the overall cost of borrowing. Finally, keep in mind that you may have built an investment mix designed to align with your goals and risk tolerance. If you were to sell any of these investments to meet short-term needs, you would want to consider the need to rebalance your portfolio to maintain your desired asset allocation. 

As you can see, there’s a lot to think about when it comes to paying for short-term goals. But by carefully evaluating your options, you can make the choices that are right for your needs.

Michael Vondra

Certified Financial Planner Practitioner

International Jet Donates Flight Hours

18 October 2022
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International Jet has donated 10 total hours of flight time on a Learjet 55 (N5572) to Angel Flight West, a nonprofit, volunteer-driven organization that arranges no-cost, non-emergency air travel for children and adults with severe medical conditions and other compelling needs. Thanks to this donation, Angel Flight West has been able to schedule recent missions in the Billings area for patients in need. 

Every day, Angel Flight West’s volunteer pilots fly people to their medical appointments at no cost to the passenger. Angel Flight West has spent nearly four decades—and provided more than 95,000 flights—creating pathways to healthcare across the Western United States, arranging donated flights to people in need, and providing them safe passage to and from medical care. With a network of 1,600+ pilots throughout the 12 western states, pilots donate their aircraft, piloting skills, and all flying costs to help families in need, enabling them to receive vital treatment that might otherwise be inaccessible.

Averaging $5,000/hour for 10 hours of flight time, Angel Flight West patients have been given the gift to receive the care they need thanks to the volunteer pilots, staff, and flight crew with International Jet. This charitable donation supports all expenses related to the flight missions such as fuel, flight time, airplane, and crew consisting of two FAA part 135 qualified pilots. In addition, the patients, family members, staff, and supporters of the missions have been given the opportunity to personally sign their names on the side of the airplane, making this a truly unforgettable experience for all involved.

Transportation challenges create one of the most daunting barriers to healthcare—a barrier second only to cost. Through a network of pilots and airline partners, Angel Flight West arranges no-cost air transportation for people in need, supporting more than 95,000-lifetime missions since 1983, all thanks to their volunteers. Each year, in-kind donations from Angel Flight West’s volunteer pilots exceed $6 Million, helping over 5,000 passengers reach medical treatment. International Jet’s in-kind gift of aircraft, fuel, time, and pilot expertise helped multiple patients and their families reach life-saving health care.

WWAMI  –  50 Years Educating Montana Medical Students, Providing Montana with Doctors

18 October 2022
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By Anne Cantrell, MSU News Service

Montana State University is celebrating the 50th year of the WWAMI Medical Education Program, which allows students from Montana to pay in-state tuition while earning MD degrees from University of Washington’s top-ranking School of Medicine.

Since WWAMI’s inception at MSU in the fall of 1973, more than 1,000 students from Montana have enrolled, according to the program’s records. More than 350 WWAMI graduates currently serve as physicians in the state of Montana.

“There were two goals at the outset of the WWAMI program,” said Martin Teintze, MSU WWAMI director. “One is to provide an opportunity for Montana students to go a top-notch medical school. The other goal was to provide physicians for the state of Montana.

“The first goal has definitely been met,” Teintze continued. “For the second goal, there are more than 350 physicians practicing in the state that are WWAMI graduates. That’s a significant chunk of physicians in our state.”

In addition to Montana, other states participating in the cooperative medical education program are Washington, Wyoming, Alaska and Idaho. Montana students spend 18 months receiving instruction from MSU professors as well as physicians at Bozeman Health Deaconess Hospital. The next two and a half years are spent doing clinical rotations in a variety of Montana locations, as well as Seattle and other sites in the WWAMI region.

Montana’s first WWAMI class had 10 students. Class size grew to 20 in 1975 and then to 30 students in 2013, with support from the Montana Legislature.

Students complete their first 18 months in Bozeman, which means that two groups totaling 60 Montana students are now educated in the program at MSU each fall.

“There was general agreement when Montana joined WWAMI in 1973 that Montana needed more physicians and this was the way to do it,” Teintze said. “It was also the least expensive way to do it. Building a standalone, Montana University System-run medical school would have been vastly more expensive for the Montana taxpayer.”

Teintze expressed appreciation for Montana lawmakers who supported the state’s joining the program in the 1970s and have increased the number of Montana resident students supported by legislative funding in successive decades. Students who do not end up practicing in Montana within a year after completing their education repay a portion of the subsidy they received from the state.

“We appreciate the ongoing support the program has had from the legislature for the past 50 years,” Teintze said. “It’s a long-term investment in the health of Montanans.”

Montana WWAMI students complete the majority of their clinical training in the state at more than 50 sites under the direction of approximately 650 Montana physicians, Teintze said.

“It has really become a Montana program,” Teintze said.

In the mid 2000s, the University of Washington hired a Montana clinical dean, Jay Erickson, who developed a program called TRUST, which stands for Targeted Rural Under Served Track. The program links 12 WWAMI students in each class to underserved communities. Those students spend a couple of weeks in the community in which they are paired before starting medical school as well as a month between the 1st and 2nd year. Then, in their second year, they spend five months in those communities completing part of their clinical training. There are currently 11 TRUST sites in Montana, from Miles City to Libby and from Dillon to Glasgow.

“The objective is to provide students who are interested in this kind of a work a real experience of what it is like to be a small-town physician, and to make sure they are trained by people who have chosen it as their career path,” Teintze said.

Teintze said TRUST has seen success with its goal of increasing the number of WWAMI graduates now practicing in the state’s rural areas, with alumni of that program now practicing medicine in places like Anaconda, Ronan, Hardin, Havre, Lewistown and Miles City.

“We’re hoping this success will grow,” he said.

Teintze said that, after 50 years in operation, the need for the WWAMI program remains strong.

“The average age of the population in Montana is going up, and therefore the need for medical care is also rising,” he said. “We are also facing a wave of physician retirements at a time when the need for more physicians due to the aging population is increasing, and the situation is even more dire in rural parts of Montana.

“With the time it takes to educate a medical student – four years of medical school, plus three to five years of residency afterwards – we need to be planning now for physicians that we need seven to 10 years from now. The prudent thing is to plan ahead.”

Towing Not a Partisan Line,  We Are Down the Middle

18 October 2022
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By Brad Molnar

In 1992 Marc Raciciot was the underdog against Dorothy Bradley in the general election to be Montana’s new governor. Instead of carpet bombing each other with mindless 30 second commercials they agreed to a debate in each of Montana’s 56 counties. That was cut short as all the questions had been asked and the press had covered the answers so the crowds dwindled. Compare that to today’s scenario where artful dodging of debates is considered political wisdom. After losing the election due to accepting debates Dorothy Bradley commented, “Honest debate helps reveal what candidates really believe, what’s important, what they will go to the mat for, and what kind of Montana leader they will be”.

Recent debates seem to showcase the panelists, and the answers serve more as launching pads to denigrate opponents; questions be damned. The primary season for Montana’s newly created congressional district was a long, loud, silence. Debates were often partisan centric with some candidates never showing up.

At the Yellowstone County Labor Day picnic I asked Councilwoman Penny Ronning (D) if I could ask a few questions for my column. She eagerly agreed. I also asked Gary Buchannan (I). He asked if I supported him. I refused to answer and he asked that I contact him at his office. He later called to say that he would not participate. He did not ask to see the questions. Sam Rankin (L) was emailed and called asking for his participation; no response. After reviewing the questions Matt Rosendale (R) replied. Answers were limited to 100 words.

1) How many debates have you been offered? How many have you accepted? Why did you decline the rest?                                                                                                                                                  Rosendale Campaign spokesman Shelby DeMars, “The campaign has received four general election debate requests— two that were declined due to prior commitments on the Congressman’s schedule that conflicted with the proposed dates of the debates and two that the Congressman has participated in (the MTN and PBS/YPR debates)” 

Penny Ronning (D), “I have accepted all offers for debates and town halls. Several were canceled. I assume because various candidates would not participate. For those that are yet to be held I hope all candidates participate. It’s important.

2) Is deficit spending a problem? If so, how would you address the problem? Penny Ronning (D) “Yes, it is a problem. It can be handled by investing in labor and productivity making products marked Made in America.

Cong. Matt Rosendale (R) “The out-of-control spending in DC is impacting our economy now, and will impact generations of Montanans for decades to come. Washington DC has operated without a budget for far too long. It is one of my top priorities to vote against irresponsible spending and push Congress to follow a budget. Sky rocketing inflation, increased housing costs, and the rising cost of food and other necessities—is the result of the government spending that has taken place since COVID and the massive spending packages passed by Congressional Democrats. We must rein in this spending and get our economy back on track. (Edited for length)

3) Everyone says they support public access to public lands. Would you favor changing federal grazing rules so that if a land locked parcel (defined as no access for 30 miles) is bordered by two or more private holdings, with one holding allowing public access, and one not allowing public access, then the one that will provide access shall be granted the lease?

Congressman Rosendale (R) “I think protecting our public lands is critical to preserving our hunting heritage and the abundant recreational opportunities that are central to our Montana way of life. However, I also believe in private property rights, and I don’t believe that grazing leases are a tool that should be used punitively.” 

Councilwoman Ronning (D) “Sounds like a simple business decision and solution”.

Brad Molnar is a State Senator (R), term limited State Representative and term limited Public Service Commissioner  

Stockman Changes Leadership Positions

18 October 2022
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After 25 years with Stockman Bank, 15 of those years leading Stockman Bank’s Billings Market, Wayne Nelson is promoting Spencer Frederick to Billings Market President, effective January 1, 2023.

“It has been my honor and privilege to lead the Billings Market and help it prosper and grow into Stockman’s largest banking market. I am so proud of my team and all that we have accomplished over the years,” stated Nelson. Now, he says the time is right to make some changes. “This is really exciting for me. I hired Spencer in 2012 to help open Stockman’s Grand Avenue bank. Since then, Spencer has served as a branch manager at Grand and is currently in charge of our downtown Billings location. With his strong leadership skills and knowledge of our community, its businesses and economy, I know Spencer will achieve great success as our next Billings Market President.”

Frederick brings 16 years of banking experience to the position, 10 of those years with Stockman.  A Scobey native, Frederick earned his Bachelor of Science degree in business administration/  finance and marketing from the University of Montana. He was on UM’s national championship football team in 2001. He also played in the NFL for the New Orleans Saints before retiring due to injury. He is active in the community serving on the board of directors for the Big Sky EDA, Ronald McDonald House, and assisting with a number of his children’s sporting activities. “I am excited for the opportunity to further serve the community and build on the foundation that has been established in Billings,” comments Frederick.

Nelson has been promoted to Senior Banking Executive. He will continue to manage his existing and new clients and serve as an ongoing resource for Frederick and the entire Billings Market team, as well as serve on the company’s executive committee. Nelson will continue to work from his current location at Stockman’s King Avenue bank at 2700 King Avenue West.

As Billings Market President, Frederick will manage all bank offices, branch management and employees in Billings and Worden. He will continue to work from the downtown Billings location at 402 North Broadway

Still Lots of Opportunity

17 October 2022
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The American labor market has millions of opportunities every month. However, according to an analysis by MoneyTransfers.com, the number of job openings in America fell by 1 million in August 2022. July saw 11.17 million opportunities compared to 10.05 million openings in August.

Speaking on the report, MoneyTransfers CEO Jonathan Merry said: “The decline in job opportunities means that the vast labor gap in the US is shrinking. Besides, some sectors have adopted working with fewer employees, so they don’t list openings. And with inflation hitting them badly, some are resorting to cutting costs by halting employment.”

The health sector and social support sectors saw a massive drop in vacancies. They recorded a -236,000, the retail industry lost 143,000 jobs, and the “other services” sector lost 183,000.

The Federal Reserve has used rate hikes to limit the flow of money through the economy to bring the supply of workers closer to demand. Yet, the labor market has hardly reacted to the changes, with the unemployment rate remaining at 3.7%.

States to Fight for Federal ‘hydrogen hub’

17 October 2022
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The Center Square

Montana, North Dakota, Minnesota, and Wisconsin are joining forces to create a regional clean hybrid hub that will compete with other hubs for federal dollars.

The Biden administration announced last week that it was accepting applications for the $7 billion program for regional hubs funded through President Biden’s Bipartisan Infrastructure Law. The money is part of a larger $8 billion hydrogen hub program, according to a news release from the Biden administration. 

The U.S Department of Energy will select six to ten hubs, according to a news release from Burgum. The four-state collaboration will be called the Heartland Hydrogen Hub. 

The Energy & Environmental Research Center at the University of North Dakota in Grand Forks is leading the effort, which also includes the state’s tribes, according to Burgum’s office. The National Center for Hydrogen Technology is housed at the research center.

According to the memorandum of understanding, other states could join the hub in the future. 

“By bringing together our expertise in agriculture and energy production, we can create a world-class hydrogen hub and do even more as states to feed and fuel the nation and the world,” Burgum said. “We are grateful to these states and their governors for their participation, collaboration and shared interest in American energy production, U.S. energy security, job creation, economic development and environmental stewardship.”

Other states are collaborating on regional hydrogen hubs. Colorado, New Mexico, Wyoming, and Utah formed a regional hub in February. Louisiana, Arkansas and Oklahoma announced a regional hub in March. 

The hydrogen hubs are part of the Biden administration’s plan for a net-zero carbon economy by 2050, according to the Department of Energy. 

Montana Manufacturing Continues Growth

17 October 2022
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October is manufacturing month. Manufacturing is the backbone of every economy. Manufacturing is how new wealth is generated.

With significant growth in the number of companies as well as in wages and production output, Montana manufacturing has bounced back after the deep economic drop caused by COVID-19, according to a new report released by the Montana Manufacturing Extension Center at Montana State University.

The 2022 Montana Manufacturing Report provides an overview of manufacturing in Montana within a national context, analyzes results of a survey of Montana manufacturers, and assesses the impact of MMEC’s state-wide services that support manufacturers in a variety of ways. The report covers the year 2021 for the economic analysis and reports the results of the survey about MMEC’s impact conducted during the first quarter of 2022.

According to the report, which was conducted for MMEC by the Bureau of Business and Economic Research at the University of Montana, challenges lingering from the pandemic include roughly 61% of firms reporting supply chain challenges in 2021 and 70% of durable goods manufacturers reporting difficulties finding employees. But the overall economic picture for manufacturing remains strong, and between 2020 and 2021, according to the report:

* The number of manufacturing companies in Montana grew from roughly 3,900 to 4,100 firms, an increase of 5%.

* The average earnings for manufacturing jobs in Montana climbed from $52,000 to $57,000, an increase of 10%.

* Montana manufacturing employment and output growth was more than double the national average for the second year in a row.

* More than half of Montana manufacturing firms saw an increase in total sales and profits over the previous year.

“Montana manufacturers have shown tremendous resilience over the last two years,” said MMEC Director Paddy Fleming. “They not only survived the pandemic, but many of them found innovative ways to grow and prosper. Manufacturing represents a significant and growing contributor to Montana’s economy.”

According to the report, in 2021 manufacturing in Montana:

* Accounted for 6.4% of total private state earnings, totaling $1.6 billion.

* Employed 4.3% of Montana’s workforce, with about 21,400 employees.

* Produced 7.8%, or $3.8 billion, of Montana’s economic output, defined as the market value of goods produced.

The manufacturing sector that has grown the most over the past decade in terms of the number of companies is beverage and tobacco products, with a 10.8% increase in the number of companies, primarily new breweries, wineries and distilleries, according to the report. The largest sectors in terms of earnings remain petroleum and wood products, with 2021 earnings of $170 million and $133 million, respectively.

MMEC, which is housed in MSU’s Norm Asbjornson College of Engineering, works with manufacturing companies to help them improve their business operations. Manufacturing specialists offer one-on-one assistance with projects to assess companies’ production processes, develop their workforce and make use of emerging technologies.

“MMEC is pleased to play a role in supporting manufacturers and value-added agriculture in developing long-term solutions that will keep the Montana economy diversified and growing,” Fleming said.

The 2022 report analyzes input from 90 companies who worked with MMEC during the previous year. Most, 66%, said they relied exclusively on MMEC to recommend improvements to their operations, and the vast majority, approximately 90%, said they were highly likely to positively recommend MMEC to other companies. Staff expertise was named the top reason for choosing MMEC.

The report notes that manufacturers’ average return on investment with MMEC was 43 to 1, meaning that a dollar paid in fees to MMEC returned, on average, $43 for the company. MMEC’s work in 2021 had a return on investment for Montana residents’ tax dollars of 7.4 to 1.

According to the report, since 2000, MMEC’s work has resulted in 6,878 new or retained jobs, $1.46 billion in retained or increased sales, and $178 million in cost savings for manufacturers.

Montana  Highlights 10-15-22

17 October 2022
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The quarterly gas report released recently that Europe faces “unprecedented risks” to its natural gas supplies this winter after Russia cut off most pipeline shipments. European Union countries would need to reduce use by 13% over the winter in case of a complete Russian cutoff. Much of that cutback would have to come from consumer behavior such as turning down thermostats by 1 degree and adjusting boiler temperatures

Last week Gov. Greg Gianforte laid out his plan to push for tax relief targeting Montana businesses. Gianforte signed a new law, last year that increased the business equipment tax exemption from $100,000 to $300,000. It was estimated by the Montana Department of Revenue that the measure would impact some 4,000 businesses in the state.

Texas Roadhouse is planning to build in Bozeman. Site plans for the restaurant are out for public comment until Oct. 14. According to development documents, the restaurant company plans to build an 8,000 square foot location in the Bozeman Gateway development.

Natural gas prices for the upcoming winter heating season are expected to be higher than what MDU customers paid last winter. Montana-Dakota customers typically use 70 dekatherms of natural gas over the heating season. The expected increase in natural gas costs is about $150 over the five months for an average residential customer, or $30 per month.

The third largest railroad union recently rejected its deal with freight railroads Monday. This action renewed the possibility of a strike. Both sides will return to the bargaining table soon. Four other railroad unions have approved their agreements with the freight railroads that include BNSF, Union Pacific, Kansas City Southern, CSX and Norfolk Southern.

In answer to the nation’s ongoing shortage of commercial truck drivers, this was made worse by the pandemic. In 2021 alone, trucking companies faced a deficit of 80,000 drivers according to the trade organization American Trucking Associations. Estimates are the industry shortage could top 160,000 drivers by 2030. The University of Montana’s Missoula College heavy equipment operation and commercial driver’s license program is trying to meet this challenge.

A small-business advocacy group, named Job Creators Network Foundation, has filed a new lawsuit seeking to block the Biden administration’s efforts to forgive student loan debt for tens of millions of Americans. This is the latest legal challenge to the program.

Cavanaugh’s County Celtic will close on October 14, 2022 at 131 W. Park St. The store is Butte’s premier Irish store.

Serina Kringen has purchased the Yellowstone Building in Sidney. She plans to bring back the original brick walls and wood floors, returning the building to its historic décor. Kringen graduated from Sidney High School and attended college at UND and then moved back home. The first business will be the opening of a coffee shop, “Yellowstone Perc”, which will feature sandwiches, breakfast items soups and salads.  She has hired M&S Builders, Sidney, Tony Hanson and Jory Bright, to help in remodeling. Phase 2 will be a party area.

Letter to the Editor – Dutton

17 October 2022
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Dear Editor

Gary Buchanan says he is running as an independent, but Montanans should not be duped.  The Democrats have a very weak candidate (Ronning) running against Rosendale, so many prominent Democrats have shown support for Buchanan.  Regardless of Buchanan’s ability, ideology, or intentions, his candidacy is a losing proposition for Montana.

A member of the US House of Representatives is only one of 435, with almost no influence.  The single most important vote, by far, that any Representative will make is the first vote which determines which party will be in leadership, and consequently the Washington agenda.  Leadership determines the entire agenda, with the minority having very little power.  And when one Party controls the House, the Senate and the Presidency, there is little need for compromise.

The choice is simple and clear, will Nancy Pelosi and the Democrats continue to have total power (including the Presidency and Senate) or will our country return to a balance of power.  The false hope that Buchanan projects will be much better achieved, if the US House of Representatives is controlled by the Republicans.   If the Democrats continue to have total control of Washington they will continue to push an agenda that attacks Montana interests… anti-coal and oil, anti-agriculture, anti 2nd amendment, anti family values, pro inflation, and more government control of our lives.

…the average voter may not understand that by voting for Buchanan, eastern Montana will lose its influence on the single most important vote in the US House of Representatives. 

Ernie Dutton