$250,000 And Struggling

When the fiscal cliff when into effect in the beginning of 2013, the country declared a new baseline for a married couple by defining $250,000 of household income as being ‘rich’ or ‘wealthy’.   Even though making $250,000 of household income for most families in America seems highly unattainable, talk to someone who lives in a top 20 major metropolitan market and you’ll find out a wildly different set of circumstances.  Could it be that a family who makes $250,000 is actually struggling?  Yes, Yes, and Yes.   Let’s break down the numbers for family that has three children (this is a hypothetical scenario, but I’ve seen plenty that look just like this) Save For Retirement-  If 10% comes off the top (you’ll need at least that to make a decent work optional scenario, but probably a heck of a lot more) that will equal $25,000.   Now you are down to $225,000 assuming it goes into a pre-tax 401k plan. Health Insurance (Benefits)- The costs are getting higher and higher at work... ...

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Top 10 Jobs For 2014

I have a daughter of my own who is finishing up her junior year of high school and we will be looking at colleges and career paths as many other families will be doing across America.   Most kids have no idea what they want to do with their lives, so it probably behooves you as a parent to at least shed some concrete data with your children about what’s paying at the cash register here in 2014. I know.  I know.   Money isn’t everything.  If your children choose their passion then ultimately the will figure out how to make a lot of money within their career.   However, if your child is dealing with the certainty of uncertainty then tip the scales in their favor and give them a few paths to choose from as they embark on their future endeavors.  Careercast.com put together a list of the highest and lowest paying midlevel income jobs across America (http://www.careercast.com/jobs-rated/best-jobs-2014) Best Jobs of 2014 / Midlevel Income 1. Mathematician / $101,360 2. Tenured... ...

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The Colleges With The Best Return On Investment

When we manage money for people we get asked this question all the time.  The investor who give you $100,000 to manage typically wants to know in advance what you think the expected return on investment is with their cash and over what time frame.  Typically, most investors want to know how long it will take you to double their money.   With today’s student debt approaching almost $30,000 (source: Forbes), should we be choosing and ranking school by return on investment? Payscale, a company who diligently tracks salaries in the United States, recently came out with its 2014 report on collegiate return on investment.   You’ll note some of the best schools in the country are at the top supporting my theory about paying only for the elite colleges and universities in the United States.  However, the most amazing part of the study is that clearly engineering and technology driven schools blow away the rest of the field. Harvey Mudd College tops list with a 2013 four year cost of $229,500... ...

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Are Those Making $200,000 More Likely For An Audit

Nobody wants to get an audit.   About 1 in 150 of us will experience some type of audit in our lifetime.   The good news is that if you follow these six smart money moves, you may be able reduce your chances of getting flagged in the future. You didn’t disclose all of your income- The IRS gets copies of your w-2’s, 1099’s (reporting of your interest and dividends), and capital gains and losses.  Make sure you collect all of your statements from work, investments, etc. “Measure Twice Cut Once” whether you or your accountant does the math. You have a big mouth- Never brag (especially on social media) that you pulled a fast one on the IRS. The IRS does more trolling today than ever before on social websites such as Facebook, Twitter, etc. Whistleblowers can earn some significant rewards (15% to 30% by filing form 211) by turning in cheats.  Be very careful of ex-girlfriends, ex-spouses, etc. The dreaded home office deduction- This has been a long standing IRS... ...

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What If Someone Stole My Tax Refund?

With the deadline looming for taxpayers, the crunch will be on for people scrambling to get their final documents together and submit their official tax return.   Imagine this scenario.    You submit your tax return only to receive a rejection notice from the IRS several weeks later saying that they have already received a tax return submitted by you already.   How’s that for a situation that is sure to rock your world. Unfortunately, in today’s world all you really need are some social security numbers and the internet to start winning at the tax return identity theft game.  According to the USA Today, a government report in November said the IRS issued $4 billion in fraudulent tax refunds over last year to criminals who were using other people’s personal information.  Attorney General Eric Holder said this week that the “scale, scope, and execution of these fraud schemes” has grown substantially in size. What should you do if someone stole your tax refund? Don’t panic.  You will likely only figure this out... ...

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Are The Elite Private Colleges Worth The Price Of Admission?

It is apparent that college education costs and health insurance are the two arenas that have defied gravity over the past six years through this recovery. With college tuition escalating at a much faster rate than normal information and continued pressing coming on family savings, the average household today may wonder if getting a diploma from an expensive prestigious private college is worth the ticket of admission. If your son or daughter is lucky enough to have the qualifications to get into the ultra-elite schools (such as Harvard), then my answer is yes. There is a short list of impressive schools that have a strong alumni base stretched out across the United States or have the really high end credentials necessary to help a student make a major impact with their career in the short term. There are many very good private colleges that cost $50,000 to $60,000 a year beyond the short list of these prestigious school, and these schools may not be worth the money especially if you... ...

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Living Paycheck to Paycheck is Not Living At All

Are you one of the many young professionals making good money but have little or nothing to show for it?  It’s ok to fess up because you are not alone.  A matter of fact, based on a study by Reuters 68% of Americans live paycheck to paycheck http://www.reuters.com/article/2012/09/19/us-usa-survey-paycheck-idUSBRE88I1BE20120919.  Yes, you’re reading correctly: over two thirds of people surveyed find it hard to make ends meet each pay period.  So how does this happen?  First, let’s start with some simple math. Salary (total compensation) = $80,000 Annual After Tax Take Home Earnings (amount left after  taxes and health care costs are withheld, assuming a 25% tax bracket and $5,000 for healthcare  = $55,000 Paycheck (amount paid bi weekly) = ~$2,100/paycheck or ~$4,200 each month Now that we understand some basic numbers we can begin to realize where your true take home pay begins.  And just like any CFO of a large corporation, it’s equally important to focus on what cash is going out as much as what is coming in. Based... ...

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