The Classic Story of a Spender and a Saver

The untypical financial planning blog! Yes, my wife came up with the title as I get teased a bit for being a little frugal. However, we do try to find some humor in it. Hopefully some of these random thoughts will help you in your financial journey, So enjoy! - James Daniel, CFP®, CFA, CMT, EA Now for the DISCLAIMER: This blog is not intended as financial advice. We encourage you to consult with your personal advisor before acting on anything you read here.

New law limits the options with inherited IRA’s

Written on December 19th, 2019 by Jamesno shouts

Despite this headline, this affects everyone, not just the wealthy.  If you inherit Mom or Dad’s IRA, you now have to completely liquidate within 10 years.  Before you could stretch it out over a much long period based on your lifespan.

https://www.cnbc.com/2019/12/17/lawmakers-may-kill-this-popular-retirement-tax-break-for-the-wealthy.html

Fee-Only vs. Fee-Based

Written on December 18th, 2019 by Jamesno shouts

As a consumer you need to understand how your financial professional is compensated:

https://blogs.wsj.com/moneybeat/2013/09/20/decoding-fee-only-sometimes-it-isnt-what-you-think/

CFA vs. CFP: what they are and how they differ

Written on September 30th, 2019 by Jamesno shouts

Great article explaining the top two credentials in personal finance.  Having gone through both programs I’ll have to agree with everything they state, but in the end why not work with someone who is both, instead of choosing one or the other?

https://money.usnews.com/investing/investing-101/articles/cfa-vs-cfp-what-they-are-and-how-they-differ

 

One of my biggest pet peeves

Written on September 26th, 2019 by Jamesno shouts

If you are holding “active” mutual funds within a taxable account, you can end up with a tax nightmare.  2018 was a good example, market was down on the year but many unsuspecting investors got 1099′s because of active mutual fund cap gain distributions.  So your account is down but you still owe taxes!

This year the market is up, but you may still get some unwelcome taxable gains.  Here is a good article to explain it:

https://www.barrons.com/articles/the-looming-mutual-fund-tax-hit-51569523180?

10 Tax Reduction strategies for Self Employed

Written on July 2nd, 2019 by Jamesno shouts

As a self-employed individual, you can feel overwhelmed when you search for strategies to reduce your taxes.

Where do we start?

Let’s start with the following 10:

  1. Use the Section 05 plan to make your health insurance a tax-favored business deduction on your Schedule C.
  2. Employ your under-age-18 child to make taxable income disappear.
  3. Employ your spouse without paying him or her a W-2 wage.
  4. Rent your office, even your home office, from your spouse to save self-employment taxes.
  5. Establish that an office in your home is your principal office to increase (yes, increase!) your vehicle deductions and also turn personal home expenses into business expenses.
  6. Give yourself flowers, fruit, and books as tax-deductible fringe benefits.
  7. Combine the home office and a heavy SUV, crossover vehicle, or pickup truck to grab big deductions this year.
  8. Design a business trip that includes some personal days—days you treat as 100 percent business even though you don’t work on those days.
  9. Use the seven-day tax deduction travel rule to create a business trip that is 87 percent personal vacation.
  10. Deduct your smartphone and provide smartphones to your employees as tax-free fringe benefits.

Note:  Consult your tax advisor prior to implementing any of these strategies!

 

Conflict of Interest

Written on June 25th, 2019 by Jamesno shouts

If your advisor is selling you an investment that he/she makes a commission on, there will always be an inherent conflict of interest.  Is the investment good for the client or better for the advisor’s wallet?  This is a more extreme case where investors lost a lot of money, but I’m sure that the advisors were attracted to the 9% commission payout:

https://www.investmentnews.com/article/20190624/FREE/190629964/gpb-paid-b-ds-and-reps-steep-commissions-to-sell-troubled-private

Do you really want that big house in retirement?

Written on June 19th, 2019 by Jamesno shouts

Interesting article from the WSJ:

https://www.wsj.com/articles/a-growing-problem-in-real-estate-too-many-too-big-houses-11553181782?mod=e2tw

It just never seems to change

Written on June 11th, 2019 by Jamesno shouts

You would think that folks would learn that there is no free lunch and that no investment person can guarantee returns.  However, folks still learn the hard way.

ps.  No regulated investment professional can accept your investment money via Venmo!

SEC Seeks Emergency Relief to Halt Ponzi Scheme Run From College Fraternity House

 

 

Congress voting on retirement changes

Written on May 21st, 2019 by Jamesno shouts

A link on Yahoo regarding the upcoming vote:

https://www.yahoo.com/finance/news/4-ways-that-washington-may-soon-change-how-you-save-for-retirement-154824097.html