As a tax-focused financial planning practice, we have built quite a lot of depth in the realm of tax-advantaged charitable giving. We are often able to help charitably inclined people’s money go further by implementing various tax strategies. There is often confusion about how giving to charity actually saves you money. In most cases, what actually happens is that for every dollar you give to charity, you get ~25 cents back on your taxes. […]
Interest rates are coming down? At Tuesday’s Fed meeting, the Board of Governors voted to lower interest rates by 25 basis points, and will now be targeting a range of 4.00% – 4.25%. They also hinted, in typical Fed speak, that additional modest rate cuts would be expected later this year. While this outcome was largely anticipated by financial markets, it is still a positive economic indicator. Generally speaking, when interest rates fall: Mortgage rates […]
My step-mom was nearing the end of her ability to remain at home, and my dad was wearing out being a caretaker. They’d managed, against all odds, to find a good in-home PCA for several days a week, and my sister took one day a week, but Mom had started to do things like get up in the middle of the night to cook a rasher of bacon “for the kids who are visiting” (when […]
The world of wealth management is filled with stories of inherited wealth ruining people. There’s something infantilizing about not having to figure out how to earn a living. Earning a living is a hard nut to crack: what can you do that people will pay money for? Money sufficient to get an apartment, food, and health insurance, in addition to a car, cellphone, vacations… It’s a huge rite of passage to conquer this quest. It’s […]
We have figured out who will win the election. The people we serve often ask us how the upcoming election will impact their investments. While many seem to have strong feelings about one or both candidates, ultimately we see this as an economic question and so we always attempt to offer an economic answer. And in that regard, we don’t have major economic concerns regardless of who wins. Trump’s “America First” policies (lower corporate tax […]
Today I got asked, by a couple that has very good financial hygiene, whether it’s okay for them to forego saving over the next three years. Between their kids’ education, a career change, and some wanted home renovation projects, there just isn’t enough money to save on top of it all. Is this an okay financial decision? To answer the question, let’s look at some curves: What the above graphic illustrates about […]
Congratulations, you’ve done the work to figure out when to start claiming Social Security and realized it’s sometime in the next four months. WHEN to claim is a separate issue from how to sign up. It depends on whether you’re claiming under your spouse’s earnings, whether you’re widowed, whether you’re likely to live past 77, whether you’re still contributing to a Health Savings Account, how much you’re earning this year, and whether you’ll starve […]
{I recently had the opportunity to meet with some people in their late teens to answer their questions. This is the letter I wrote them afterward.} The thing with being an adult is that you generally have to hear the same information from a couple of different directions before it starts to gel. So the stuff I talked with you about last night is once, and this email can be a second, and then when […]
If you’ve inherited money, start by knowing it takes a while for the money to land. The executrix needs time — months and months — to get things retitled. Then it takes time for the IRS or the state to release a lien or expedite an audit. Do NOT expect the money all at once. While the estate is being settled, there may be income kicked off by the assets that have not yet been distributed. […]
Traditional IRAs and most workplace retirement plans, like 401(k)s, for example, are tax-deferred. That sounds great when you’re adding money to them: no taxes now, deferred growth, wuhoo! But tax-deferred is NOT tax-avoided. The tax bill always comes due. The world of IRAs is super-complex, as is the world of income-tax brackets. They come together in a perfect storm of complexity. HOWEVER, there are some easier pieces to explain. Without getting into every scenario and […]
Do you want to know how much you’ve spent on Amazon last year? Ha! Don’t you wish. Amazon recently removed the ability to download your order history. So I don’t have a quick trick to give you. Instead, I have a few ideas for how to get the most benefit and the least harm out of Amazon. Limit Spending on Amazon There are things you can do, things to be really careful of (even avoid), […]
What to do right away: In the first hour? Nothing is fine. Just breathe. It’s fine to just take a beat. There’s stuff to do, but it isn’t urgent. You don’t even need to move the body right away, it’ll keep for at least a day as long as you cool it down. This sucks, and I’m sorry. If hospice was involved, call them. If it was an unexpected death, but resuscitation attempts would be […]
Sadly, in 2023 you’re going not going to be able to deduct any of your charitable gifts on the front of your tax return, as an adjustment to income, anymore. Congress tried it and then dropped it. It might come back someday, but for now, it’s gone. That was for a very minor amount, $300 per person. For anyone giving substantially more, though, here are some other ways to strategize around giving: Create […]
Student loan deferrals are happening, in many cases automatically! Here’s the details, but the tldr; is that loans are at 0% and you may stop paying through September 30. Each individual lender is treating this somewhat differently about whether they’ve stopped automatic payments. It’s a very good idea to stop your automatic payment when you’re being offered a 0% loan. Some people – those who are eligible for loan forgiveness – will just be paying principle for […]
Someone contact me recently about how to set up a Roth IRA. It’s a common enough question that it feels like a good time to revisit this topic. In this article I’m going to tell you exactly why, where and how to set up a Roth IRA and even make three investment suggestions for three generic situations. Your specific situation could differ, of course. But first, what? A Roth IRA is a little bit like […]
You know you need emergency money, right? But what does that actually mean? Here are the three kinds of “emergency” money I counsel my people to have. One is what I call “strange change”. You should have some cash in the house that you can use if you need to Get Out Of Dodge right this minute: no standing in line at the (probably empty) ATM, just get in your car and drive. For this, […]
Gifts are not taxable income. However, they can come back to haunt you! There are three ways gifts can cause issues. The first is if you are applying for a mortgage and the bank is trying to determine where you’re getting the money for your down-payment. They want to make sure you’re not taking out a side loan (and are hence a worse risk to them because of your greater debt burden.) If you are […]
I’m having rebellious thoughts about credit rating agencies. Always one to play earnestly by the rules, I have always checked my credit report once in a while to see if any bad data had crept in. Perhaps someone was claiming to be me and running up debt someplace, right? Gotta keep on that. But over the past few years I’ve watched Identity Theft blossom from a one-off done by drug-addicted grandkids to something that is as common […]
This is a book you can write after a lifetime of forming connections, reading deeply, and gaining the wisdom to integrate it all. I cannot think of a single thing I’d change in this book if I were writing it. It combines clear writing with up-to-date accurate information. I’ve read entire books on subjects she covered in a chapter and feel like she nailed it concisely. Annuities? Life Insurance? Becoming a landlord? When to start […]
Somewhere in the distant past I must have read “Gettting Things Done” by David Allen. I know this because I recently re-read it and discovered that I’ve been doing this for years. It’s a great book, by the way, and everyone should read it at some point. Some of it is useful across the board: break big projects down into the next action. Have a place you capture all the tasks so that they don’t […]
Back in 2006 someone walked into my office with an impossible mortgage. Countrywide Bank gave a 70 year old a 30 year mortgage for more than 100% the value of her house. She was underwater the day she closed, with no possible way to ever sell that house. I was aghast, and wondered what was going on that Countrywide was willing to take on risk like that. I didn’t quite understand the whole securitization of […]
Happy Thanksgiving! Here’s my annual newsletter filled with tips to talk about with your family over the Thanksgiving table, because money is probably the least stressful topic, right? There are four sections to the newsletter – feel free to skip around between General updates, Tax Tips, Tea T.I.M.E. (Investing news), and Financial Planning Tips. #1: Updates!Tea & Taxes continues to wind down as I make room for more people and more services in ProsperiTea Planning. What […]
A friend mentioned that I ought to read something by Bogle so I trotted down to the library to fetch one the other day. Our library didn’t have any in stock so I ordered it through inter-library loan, but in the meantime I picked up a few books from the same section of the library shelves. So I just finished reading “The Money Book for Freelancers, Part-Timers, and the Self-Employed: the only personal finance system for people […]
Over the week-end I’ve been reading up on how to handle the credit agency breach. Identity theft overall is becoming more and more of a problem, so I don’t mean to diminish this breach as an issue, but I think this is a bit over-hyped. My experience with fraudulently filed tax returns – a form of identity theft – suggests that quite a lot of us – if not all of us – have already […]
A client asked me if I had any financial literacy suggestions for teenagers. It kicked off a reading festival! Here are my notes. Years ago I read Suze Orman’s Young Fabulous and Broke and I was underwhelmed. She seems to think that everyone is as clueless as she was and needs to have a come-to-Jesus moment and she’ll tell you how. Most people I know just want to know some facts and they’ll integrate them into their […]
“How long should I keep paperwork around for?” I get this question a lot, but it’s not a quick answer. Hopefully this will help to help clarify it. Regarding income tax returns: The IRS has 3 years from the time you file to audit a return or the due date, whichever is later, so absolutely keep all the backup materials to your tax return for at least three years, four including the tax return currently […]
A funny thing happened at the NAPFA conference in Phoenix this year. TD Ameritrade is doing a series of short films to promote the Registered Investment Advisor model (as opposed to the sales rep model) for investment advising. They asked if I’d come be interviewed. As is the norm with these things, fifteen minutes got edited down to a minute or two. I can’t say I am thrilled with the way I come across – […]
Have some emergency money in the house, enough to pay for necessary groceries and medication if the banking system went down and you had to pay cash. You can also think of it as “refugee money.” If you needed to evacuate NOW, how much cash would you want for travel costs to far away family? Gas, hotels, meals on the road? Have that much in small bills and rolled coins. (We like rolls of dollar […]
As you get your finances organized you’re going to wish you had a secure place to keep all your online passwords to websites. There are several on the market, but I personally use a Chrome Extension on my web-browser to an app called “LastPass”. It’s free if you just use it on desktops, and a small subscription cost if you want to use it across mobile devices. https://lastpass.com/ Once you have a strong master password […]
Happy Thanksgiving! The biggest payoff comes from being good at things that are absolutely under our control. That’s the lesson I’ve learned studying economics, finance, and investment theory. That includes saving for goals, being a judicious consumer, and maintaining your relationships, your health, and your emotional wellness. One of my new gurus, Bert Whitehead, wrote a book called Why Smart People Do Stupid Things with Money: Overcoming Financial Dysfunction. He says not to put too […]
When I was in my early twenties a grad student at my University drowned. He left behind a widow and a small child and no life insurance. They had been living in University housing and his new widow was left homeless. When we had children I made sure my husband and I each had life insurance. These sorts of tragedies are really visible and really dreadful and so life insurance occurs to people like this […]
When I was doing coursework to become a Certified Financial Planner, the capstone project required that we upload a video presentation as part of a financial plan for a fictional young couple with children. Since the couple are fictional, I figured it was okay to share this advice with anyone who want to see it. Originally published December 27, 2012, on a day when I had a particularly large amount of hair!
Many faces has Roth: Emergency, college, or even retirement!
Financial Wellness Lessons Learned from WWII Confucius said, “Study the past if you would divine the future”. With that in mind, I’ve always been a fan of history. I recall reading Greek comedies in high school and realizing that they were the same plot as Shakespearian comedies as 70’s sitcoms. People are people are people. Study what people did in the past under various pressures and you can get a pretty good clue about what […]
Several of my people have asked me questions where the answer is “buy gold” and I’ve been wary about putting that advice together. I’m going to explore this issue a bit, first by getting a handle on all the reasons it is BAD advice. 1. Neither gold nor silver are productive assets. They won’t earn interest or dividends, losing you the opportunity costs of what you could have been doing with that money in the […]
Jean Chatzky’s take on debt. This was a quick read from the library: Pay It Down: From Debt to Wealth on $10/day by Jean Chatzky. The book is abbreviated and condensed into this series of articles on Money.cnn. First off, this book is nearly entirely about budgeting. Figure out what you’re already spending, and then take a look. The topic was just as dreary as it could be in this relentless little book. It would not let you […]
People are calling up to ask for help. “We’re making a lot of money but can’t make ends meet. Help!” I tell them to grab as many statements as they can from every bill they’ve got and every account they’ve got and bring the whole pile to me. Here’s what I know about people’s expenses: the overwhelming majority have expenses that nearly exactly match their income, except, perhaps, they spend about $50/month more than they […]
I work closely with the finances of hundreds (and over the years, thousands) of people. I learned early on that income doesn’t correlate to happiness once you get past starvation level. But in recent years I’ve really been noticing that feeling rich is almost entirely unrelated to income levels. For the past year or so I’ve been trying to nail down what being “wealthy” actually means. I think a better term for “wealthy” is […]
