Rental Property in an IRA?

February 22, 2012

The second week of April is Spring Break for our kids so this year we planned a family vacation to Amelia Island, Florida.  We’ve never been there before so after perusing several possible forms of accommodations, we settled on a condominium close to the beach.  As expected, the owners of the rental property requested one half of the rent up front and then the remainder at the time of occupancy.  What made this particular request a little different was who, or in this case what, we made the check payable to.  Usually you make a check out to a person or to a rental management agency but in this instance we made our check payable to the property owner’s individual retirement account (IRA).  Huh? Continue reading “Rental Property in an IRA?”

What Going to the Shooting Range Can Teach Us About Financial Planning

February 15, 2012

Recently, some colleagues and I visited the local shooting range to practice firing pistols at paper targets.  I hadn’t fired a pistol in years, but I remembered that the last time I did I had fun. I was excited to go, but at the same time I was a little nervous.  What if I miss the target and my friends laugh at me? What if I do something wrong and somebody gets hurt?  What if I hurt myself?  What if, what if, what if? Continue reading “What Going to the Shooting Range Can Teach Us About Financial Planning”

One of the Biggest Challenges Facing Financial Planners

February 01, 2012

One of the biggest challenges I face in my line of work is deciding when to explain things in more detailed technical terms and when to explain them in more understandable  “practical” terms.  For example, when discussing the income limits for traditional and Roth IRA contributions, most financial professionals will tell you the limits are based on your adjusted gross income (AGI) when technically they are based on your modified adjusted gross income (MAGI).  In many cases, such as this one, the difference between the practical and the technical may be so small that it’s just easier to speak in practical terms. The problem is that if you don’t know the technical stuff, it’s easy to make a financial mistake. Continue reading “One of the Biggest Challenges Facing Financial Planners”

The Basics of Income Taxes

January 25, 2012

Every year around this time we at Financial Finesse see an increase in demand for our Tax Basics workshop.  The thing about our Tax Basics workshop is that it is exactly what it says it is—basic.  We don’t discuss tax theory.  We don’t attempt to understand the alternative minimum tax.  Instead we focus on the tax concepts that affect the majority of taxpayers across the U.S.  Understanding things like tax credits, exemptions, and deductions is critical to making sure you don’t end up on an H&R Block commercial finding out that you “voluntarily” let the government have over $8,000 because you didn’t know the tax benefits of education (in case you are interested, see IRS publication 970, Tax Benefits for Education). Continue reading “The Basics of Income Taxes”

When Should I Consider Having a Trust?

January 11, 2012

At Financial Finesse, we are often asked this very basic question.  It seems simple enough.  A trust, by its purest definition, is a form of ownership.  You can own assets in your name alone, you can own assets with someone else (e.g. jointly), you can own assets by contract (e.g. a life insurance policy), or you can own assets in a trust.  There are several benefits to having assets held in trust.  For example, when you have a trust, you can control who receives trust assets, when they receive these assets, and what these assets may be used for.  Consider the following example:

When I was a child, my father was killed in a car accident.  Prior to his death, he provided instructions in his will that basically said if anything ever happened to him, money should be set aside in a trust until each of my two brothers and I turned 18, after which the money would be used to pay for college. Continue reading “When Should I Consider Having a Trust?”

Important Changes to be Aware of in the New Year

January 04, 2012

As a financial planner at Financial Finesse, one of my responsibilities is to make sure our content library is up to date when things change.  Now that I’ve had a chance to review all of the changes that will take place in 2012, I thought it would be helpful to list what I consider some of the more relevant ones, and what you should do to take advantage of them. Continue reading “Important Changes to be Aware of in the New Year”

The Cure for the Financial Hangover

December 28, 2011

Now that the holidays are behind us, do you find yourself carrying a few extra financial “pounds?”  That is, did you put so much of your holiday shopping on plastic that you end up starting the New Year carrying a balance on your credit card?  If so, then you’re probably not alone.  According to First Data, credit card use among holiday shoppers soared, and continued use could make the problem worse.  The good news is that there is a cure to the financial hangover.  It begins with a commitment to get rid of the debt, followed by a plan for reducing it.  To help you get started, here are some simple steps you can take to start shedding the financial weight: Continue reading “The Cure for the Financial Hangover”

Ho, Ho, Holiday Tax Tips

December 21, 2011

In the middle of the holiday season, it’s easy to forget that there are only two more weeks left in the tax year, and although April 15th is still four months away, you can reduce the amount you owe (or increase the amount you get back from) the IRS if you take the following steps before the ball drops on New Year’s Eve. Continue reading “Ho, Ho, Holiday Tax Tips”

What Fantasy Football Can Teach Us About Investing

December 14, 2011

I fielded my first fantasy football team back in the late 90’s, and what I enjoyed most about it was that it gave me an excuse to watch games I would otherwise care less about.  (I mean after all, unless you live in St. Louis or Cleveland, why would anyone have a reason to watch a Rams versus Browns football game?)  This year I decided to introduce fantasy football to the staff at Financial Finesse.  Those of us that had played before had to convince some of the “rookies” that experience wasn’t necessary (hey, every league needs a patsy) and that they would have fun regardless of the outcome.  The truth is, it has been fun, but more important than the bragging rights are the lessons it can teach us about investing. Continue reading “What Fantasy Football Can Teach Us About Investing”

The Dollars and Sense of Holiday Gift Giving

December 07, 2011

The holidays are upon us, and it is often said of gifts that it’s the thought that counts, but have you ever received a gift and said to yourself, “What were they thinking?!?”  If you’re like me, you’ve spent a fair amount of money on gifts that didn’t quite hit the mark, so allow me to share with you some of my personal worst gift ideas so that you don’t end up spending money on something that really isn’t worth the hard earned money you paid for it: Continue reading “The Dollars and Sense of Holiday Gift Giving”

I’m Thankful for…Estate Planning?

November 23, 2011

During Thanksgiving, many households (including mine) have a tradition of having each person at the table tell everyone what they are thankful for.  It’s in the spirit of this tradition that I’d like to share with you why I’m thankful for estate planning. Continue reading “I’m Thankful for…Estate Planning?”

Working Past 70 and a Half

November 16, 2011

If you have ever sat through a retirement planning workshop then you probably know that 401(k) plans and traditional IRAs are subject to required minimum distributions (RMDs) starting in the year you turn 70 ½, but what you might not realize is that RMDs from 401(k) plans are NOT required as long as you continue to work.  Recently I received an email from a webcast participant who wanted to know when he would be required to take a distribution from his 401(k) plan, and how the distribution would be calculated. Continue reading “Working Past 70 and a Half”

3 Ways to Save when Holiday Shopping for Kids

November 09, 2011

There are 46 shopping days left until Christmas, and if you’re anything like me, nothing squashes your holiday spirit faster than being at the mall standing in line to purchase overpriced merchandise on Christmas eve with a thousand other people, and I refuse to get up at 3 AM on black Friday to go out and get the best “deals” when I could be home eating Thanksgiving leftovers with the family.  That said, the Christmas shopping will eventually have to get done, and in tough economic times such as these, we have to come up with ways to shop smarter.  Here are some ideas we at the Ward family have adopted to help make the holidays a time of joy, and not a recipe for financial woe: Continue reading “3 Ways to Save when Holiday Shopping for Kids”

The Right Way to Save 15% or More on Car Insurance

November 02, 2011

A few months ago I received my annual notice from my auto insurance company that my auto policy was up for renewal.  I pay my auto insurance premium monthly, and to make it easy, I have it automatically drafted from my checking account.  When I first took out the policy, the insurance company I chose was one of the more competitive pricewise.  However, over the last several years I’ve noticed that my monthly premium has slowly been going up.  Now, I would expect the cost of coverage to increase with inflation, plus we purchased a newer car a few years ago, but the most recent increase was way more than I expected, so I started shopping around.  I did end up finding a new company to insure my vehicles, but not without learning a few things along the way. Continue reading “The Right Way to Save 15% or More on Car Insurance”

All I Want for Christmas is…

October 26, 2011

Just in time for Christmas, Hasbro has released its newest version of the classic board game MONOPOLY, called MONOPOLY – Electronic Banking Edition.  Listen to the first paragraph of the product description posted on their official website: Continue reading “All I Want for Christmas is…”

Paying to Use a Debit Card? I Don’t Think So.

October 19, 2011

Recently Bank of America announced that it will charge debit card holders $5 a month for the convenience of using a debit card, and you can be sure other banks will follow suit.  This stems from recent legislation that puts limits on the fees banks and other financial institutions can charge on certain types of transactions.  Regardless of the reason, it’s time for a revolution. Continue reading “Paying to Use a Debit Card? I Don’t Think So.”

Is Now the Right Time to Refinance?

October 12, 2011

If you’re in the market for a home, you couldn’t ask for a better scenario.  Since 2006, home prices have steadily fallen back to more normal levels, while at the same time interest rates on mortgages are near all-time lows.  This may be the best buying opportunity in real estate I will see in my lifetime, there’s only one problem: I already own a home.  Is there any way for me, an existing homeowner, to take advantage of the current market conditions?  Well, the answer is a definite maybe. Continue reading “Is Now the Right Time to Refinance?”