Category Archives: investing

The annual party…it usually lasts 3 days.

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Yesterday, I started my annual party with TurboTax. It is not the best party but like most good parties, it does leave me exhausted. I am pretty used to the TurboTax system and, for my family, it is easy and works well. It did make me think about all of the others out there doing their own taxes and the common mistakes they make. Here are a few to easily avoid:

Choose the right filing status. There are 5 choices, that is it. The choice that hangs up most is Head of household. If you are not married at the end of the year, have cared for a closely-related dependent for more than ½ of the year and paid more than ½ the cost to maintain a home for yourself and said dependent, you are Head of household.

Be a good scribe or typist. The names and social security numbers for everyone on your return must be exactly as they appear on the social security card. Please double check your input to make sure you do not transpose (as I do).

Addition and subtraction errors cause the most adjusts to your return. Picture yourself signing the return and sticking it in the mail confident that it is all correct. Then weeks later, you get a lovely letter from the IRS, and they checked your math. Yes, someone with the IRS actually does that. In some cases, the error is in your favor, most often it is not.

So grab a drink, I suggest strong coffee, and attend your own tax party.

 

disclosures:http://www.hechteffect.net/?page_id=31

What I learned on vacation.

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I spent last week at a timeshare in South Florida with my Mother. Here are some of the things I noticed that can apply to investing:

If it’s too good to be true….
There was an older Gentleman sitting next to me at the pool discussing the new timeshare he just bought. He seemed a bit confused about what he bought but knew it sounded good during the presentation. I told him to go back to the salesman, ask him to re-explain everything to him as if he was a 5 year old and if he did not feel comfortable, get his money back. Anything can sound wonderful during the sales presentation, step back, review, and then make your move.

Diversification is good….
I spent one day at the beach and did some people watching. What I noticed was a number of people sitting under umbrellas reading. That is all they did. They did not talk to anyone, didn’t move, and never smiled. This was a warm, sunny day. I noticed others that ran into the water, played football, flew kites, talked, laughed, and generally had a good time. Those that diversified their activities, much like diversifying your investments, were much better off.

Protect yourself….
Those who regularly re-applied sunscreen did not get burned. Protecting yourself from the unseen hazards in life with items like life insurance and health insurance will prevent you from getting burned.

 

disclosures:http://www.hechteffect.net/?page_id=31

I love saying yes!

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Last week I met with three different clients that all want to retire. Their retirement ages are 56, 58, and 67; all have been in their careers for 30+ years. What I asked them for was a list of their current expenses and any large expenses they expect to incur over the next few years, current tax return, statements on their savings and investments, and Social Security statement. I ran a comprehensive plan that included inflation and a conservative growth rate to age 90. I am happy to say that I was able to say “Yes you can retire” to all three. But then I asked the most important question……

“What do you plan on doing now?” Knowing that the economics of retirement will work is important but if you do not know why you will be getting out of bed each morning, you have no business retiring. Each of these three clients was able to tell me of their retirement plans and how they will spend their time. All three will walk different paths but they had put thought into their own view of what to do with their time and the many, many years in front of them.

It is possibly more important to think of the mental, emotional, and actual day to day of your retirement than the economic. I love saying yes!

Disclosures:http://www.hechteffect.net/?page_id=31

This Saturday hear Myself and Joe discuss these topics on 96.5 FM @ 9am.

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How Will You Pay Yourself In Retirement?
• How We Help Build
Your Retirement Paycheck
• Social Security’s Role In Your Retirement

A Client Asks:
“Do I care about price per share
if all I want is the dividends?”
We will explain how interest rate changes
effect price and does it matter.

Call or eMail
Your Questions:
407-290-0058 OR
1-800-328-5858
Nancy@FinancialGroup.com
Joe@FinancialGroup.com

A question about dividends.

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Q: If I just want dividends, do I care what is happening to the price per share?

A: Not really. Whether it is a stock or a bond fund paying the dividend, what you receive is based on the number of shares you hold. If the number of shares remain the same and the dividend per share remains the same, the price per share does not matter if all you are concerned about is the dividends paid to you.

 

disclosures:http://www.hechteffect.net/?page_id=31

Your biggest retirement risk may be longevity.

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You have done it all the right way: exercised, ate right, and did not indulge in too many vices. This clean living may cost you in the long run – if you take Social Security too early.

If you delay taking Social Security, you will have a bigger check, it is that simple. Many of us are tempted to start drawing at age 62; however, if you can wait, please do. I hear all of the reasons: Social Security is going to run out of money, “I have paid in for so long I want to get every cent I can as soon as possible”, and “I have no idea how long I will live.” Let’s just take a step back from these arguments for a moment.

If you pull Social Security prior to full retirement age, you will pay in extra tax and penalties depending on your income. If you delay taking benefits until after full retirement age, you will receive a credit of approximately 8% each year you delay. With the average life expectancy today being 86yrs. of age, the decision as to when you start Social Security becomes a very big decision.

So pat yourself on the back for the wonderful healthy way you have been living your life. Crunch the Social Security numbers while you are crunching your abs. You just may be able to win the longevity race fiscally as well as physically by delaying Social Security.

 

disclosures:http://www.hechteffect.net/?page_id=31

The Currency of Love

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The currency of love goes a long way and can be some of the most secure currency around. Love, such as the love of a child, can bring a bounty that is hard to quantify but endures for generations. Love for a spouse or significant other often brings feelings of joy that you want to spread around and a bounty of riches that are too big to measure.

On this day that we celebrate love – kiss someone that you love – let the currency fly like a bag of money that fell off of a truck.

Happy Valentine’s Day!