The stock market is shrinking…what does that mean for you?
by Evan on January 17, 2012
The stock market it shrinking for the first time since 2009. What does this mean for you as an investor? It means that companies are purchasing more shares of their companies back than they are issuing new shares. This is a sign that management at these companies think that their businesses are highly undervalued and the best investment they can make is buying back their stock. Not only is this a sign that the overall market may be undervalued, but also, a sign that the companies believe in their stock and the future of the business. Combine this with the other information available in this article:
http://finance.yahoo.com/news/market-shrinks-first-time-since-063902717.html
and it is also good that companies are able to raise more cheap debt (via bond issuances). When companies can raise their own capital cheaply, it reduces overall cost of business because more expensive bank loans are unnecessary. It is for these reasons, expressed in the article above, that give me a belief that 2012 will be a rebuilding year for portfolios.
Tax-loss harvesting
by Evan on December 13, 2011
What is tax-loss harvesting? It is the concept of selling equities, that are in a portfolio, for less than originally purchased. The idea is to capture the loss and be able to write it off on personal taxes for the year that the loss is taken. Often, selling a security at a loss will not be a problem because there is a similar security that can replace the one that is being sold, if desired. If the security was going to be sold sometime soon, for instance, in early 2012, then it makes even more sense to sell the security now for a loss before the end of 2011. One last thing to note is the ability to write off, up to, $3,000 of earned income with losses from the sales of securites IF no other securites gains need to be offset by the loss first.
NOTE: Please be aware that it is not possible to sell a security at a loss and immediately buy the exact security back within 30 days without invoking the wash-sale rule. This rule says, in more words, that a loss on a security sold is not able to be taken as a tax loss if an identical, or nearly identical security is purchased again within 30 days after the sale. Please consider consulting with a financial advisor or CPA before making such transactions, as there can be adverse tax consequences if not executed properly. Also, please consult with a CPA or advisor about the ability to write off the loss against earned income, also.
10 Ways to Save Money
by Evan on November 10, 2011
By Evan Peterson, CFP®, RFC
10 Great Consumer Money Saving Ideas
1.) Take out a cashback credit card or a special offer card that gives you cash for opening a new credit card. Always pay off each card each month, unless you have a 0% balance transfer or 0% purchase offer.
2.) Look into I bonds at
http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm
See one of the previous blog post about I bonds, also.
3.) Negotiate with your cable company for discounts on all services. It is not uncommon for cable/media companies to offer the same great offers to existing clients that are dangling out there to get new clients. Just ask for the offer! Or better yet…
4.) Cut cable’s cable! Switch to Hulu Plus, Amazon Prime, and Netflix for under $25 a month!
5.) Buy giftcards around the holidays when there are special deals to use year round. For example: Right now you can buy giftcards at a local grocery store in Austin called Randalls and get 4 times the points per dollar spent. Each $100 in gift cards equals 400 points. Each 100 points is worth 10 cents off per gallon, up to 25 gallons, on your next fill-up. Put the gift cards on your cashback credit card for a double bonus.
6.) Travel discounts are everywhere – For rental cars and hotels: Priceline, Airfare: Kayak, Vacation packages and cruises: Travelzoo .
7.) Combine manufacturer coupons with in-store coupons and cash back credit cards for real buying power. It is often very possible to get 30-50% off regular prices or more.
8.) Consider opening a Wells Fargo PMA checking account package with a brokerage attached if you have $25,000 total in assets. This will qualify you for 100 FREE equity trades per year for each brokerage account that you have setup.
9.) Utilize ETFs as much as possible, over mutual funds, especially with the Wells Fargo account above to maximize investment cost savings.
10.) Never pay full price for anything!
Year End Tax Planning Ideas
by Evan on
The following is from Ingrid Edwards, CPA
www.ingridedwardscpa.com
YEAR END TAX PLANNING TIPS
As the year end approaches I would like to share 10 proven tips and actions that may impact your income taxes. Now is the time to consider some or all of these depending on your individual situation:
1.) If your itemized deductions are below the standard deduction (single $5,350, married $10,700, head of household $7,850) consider making next year’s tax payment in this calendar year – thus doubling up your real estate tax deduction this year, and skipping it next year. Time your charitable donations for the same year as your real estate tax payments.
2.) If you’re looking at capital gains, then please review your portfolio for any potential capital losses you might want to realize thus offsetting the gains.
3.) If you have rental property or other passive activity with accumulated suspended losses, consider selling it before the year end, thus releasing the ordinary losses that will offset your other income.
4.) If you income is low for 2011 or you suffered some losses, consider converting your existing pre-tax retirement funds into a Roth IRA (it may be a completely tax free conversion or at least a conversion that would be taxed at a much lower rate)
5.) Check your home for any non-cash items you might consider donating before year end. Make sure to compile a list with descriptions, condition of the items and their value. Taking pictures is usually a good idea as well.
6.) If you are self-employed and receiving a paycheck, consider a year- end bonus which you can use to either maximize your retirement plan contributions or catch up on your federal income tax withholding.
7.) If self-employed without paycheck, please make sure the portion you plan to contribute to your retirement plan as the deferral part is contributed by12/31/2011.
8.) If you are or will be 70 ½ in 2011, please do not forget to take out the required minimum distribution from your retirement funds.
9.) If you have an entity with losses but no basis to take the losses (usually because the entity funded the losses through loans with a 3rd party) consider contributing cash to this entity before the end of the year in order to create the basis and ability to deduct the losses in 2011.
10.) Gifting – do not forget that $13,000 per donee is still the limit for 2011 for exempt gifts, but also consider that for 2011 and 2012 the lifetime gifting exemption was increased from $1 million to 5 million which creates additional estate planning opportunities.
Steve Jobs’ Estate: Elusive, even in death
by Evan on October 10, 2011
Came across this article about Steve Jobs’ estate:
http://thetrustadvisor.com/news/stevejobs
The man who was so elusive in life managed to continue his secrecy with great estate planning. Not only is he expected not to pay any estate tax, but a great deal of his private personal financial data will never be revealed to the public because the appropriate trusts and documents allowed him the secrecy that he desired.