Should You Lend Money To A Co – Worker?

Here’s a situation I heard the other day…what do you think you should you do. Ted, I’ve got a co-worker of mine and we’ve known each other for more than 10 years. I have always known them to be a pretty responsible person and one that never brings drama to work. We are both in our late 30’s. I have a pretty good idea what they make because we have reasonably similar jobs. It was strange, but the other day as we hit the breakroom, they asked me if I would consider loaning them $7,000 for just a few months some money so they could pay off some of her debts, and then they would pay me back after they get the upcoming bonus we should be receiving in a few months. Details: They specifically told me there were some unexpected family medical expenses that caused this 7k of debt and they didn’t get into too many more details beyond ...

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Is It Time To Make A Roth IRA Conversion?

Over this past year, more clients have asked me about whether or not it makes sense to do a conversion from their Traditional IRA to a Roth IRA.   I’ve written before on the merits of a back door Roth IRA (http://bit.ly/2jNBfFA) before on Your Smart Money Moves, but the larger question about converting an existing account can be a tricky one to approach in your personal finances.   More importantly, if you are not proactive in your tax planning, you could miss a tremendous opportunity to take advantage of a bad year with your business or if you have a substantially down year of income.  Given the volume of planning cases I see every month, especially those in their late 40’s to late 50’s should be looking at this strategy very closely if you are in a transition phase. With the potential upcoming changes in the tax code suggested to move from seven tax brackets down to three, each family needs ...

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Be Careful About “Washing” Out Your Tax Losses

With more investors trading stocks as a hobby and the number of day traders who have decided to take over their own portfolios, it is incredibly important that you recognize one little nasty piece of the tax code that can hurt you called the wash rule. The wash rule was set up to more closely define how tax losses can be taken for the short term trading of the same securities.   If an individual decided to sell or trade a security they own at a loss and within 30 days of the sale buys a substantially identical stock or security (or an option) their tax losses may be disallowed.  Remember, the rule can also apply if your spouse buys a substantial amount of the security as well. In our current tax code, the wash sale can affect your personal finances with the following consequences. You will not be able to “realize” or claim, the loss on the sale The disallowed ...

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Five Celebrities That Know How To Save Money

Most of the media generated stories about celebrities consist of shock and awe showing situations resembling the Titanic sinking into the ocean.   When it comes to personal finances, we read about those who didn’t pay their income taxes, stars that spent themselves into bankruptcy, and estate plans that went decidedly south after their death.    However, there are celebrities who understand a thing or two about money and here are five famous people who know how to improve their bottom line. Teri Hatcher Understands Used Cars– Teri Hatcher became famous through the Superman shows she did with Dean Cain and then hit a home run with the Desperate Housewives television show.   She’s reported to have a net worth of over $50 million dollars.  “I don’t spend my money on sports cars or new million-dollar houses. I drive my cars for 10 years until they have 100,000 miles on them.” (source www.msn.com)    Used car buying is a smart money move that can ...

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What’s Next . . . Step On The Scale Please!

Making smart money moves are important within all facets of our lives. Although we often think about money when it comes to bills, purchases, and investments, our overall health and wellness can be one of the largest costs included in our overall budgets. Relative to this, our diets and the way we eat can have a major impact on our personal finances day in and day out. If we end up having diabetes, high blood pressure, or extremely high cholesterol, these health issues can cost us thousands of dollars each and every single year to treat. Several years ago, the USDA (www.usda.org) released a report that stated medical costs that come as a result of obesity related problems are about $10,000 higher than they are for those with a healthy normal weight. What would it mean to put $10,000 back in your cash reserve, your children’s 529 college education fund, or your retirement savings? Back in the early 1990’s, the ...

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Personal Finance 101: Generation X Series – 5 Big Mistakes Gen X’ers Make With Their Money

Generation X is classically defined at people born between the years 1965 and 1979.    Pretty much those of you in your early 30’s to the mid 40’s.  However, having given personal financial advice to thousands of people, I can tell you that many of you who were born 1960 to 1964 fit within the Generation X type of financial and personal attitude.   Since I am 42 and have had a good deal of financial success, I’ve noticed some big mistakes that I see my generation making with their money and how they think about money.    Over the next five weeks, I’m going to pull one subject at a time to help those of you within Generation X get your personal finances on track so you can achieve financial independence, purpose, and freedom. MISTAKE #1– Not paying off your mortgage (and getting it done quicker) For many homeowners today it feels like Christmas time with thirty year mortgages available for under ...

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Should You Take A Low Ball Salary Offer?

In basic economics, we all learned about the law of supply and demand.  We have seen how powerful this can be over the past several years in the real estate market as supply in many cities has grown, and demand has dwindled.  Consequently, you may be seeing some of the greatest real estate deals we have seen in decades around the country. The same may be true about the labor market. With unemployment still higher than normal and a limited number of better paying jobs, one of the questions we often hear is should I accept a job offer for a lower salary? This can be an extremely challenging question to answer, and why you need to think about your household like a business when it comes to your finances.  Since most people tend to make very emotional choices around their personal finances, having a Private CFO® by your side could make all the difference in making the best choice ...

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Who pays the bills: MEN or WOMEN?

The great debate has gone on for years.   Who really handles the money in the home.   Is it the man or the woman in the home who ends up taking care of the financial bills?  Fiserv and The Marketing Workshop recently surveyed 3,029 consumers about the subject of banking and on line bill paying to represent the 90.5 million consumers involved with online banking.   The survey found two astonishing statistics.   One, in 2000 bills by paper check was the majority method where in 2010 bills by paper check is less than one quarter of the primary method of paying bills.  Two, that Generation Y is propelling the future business of mobile banking and personal financial management tools. As an experienced professional and a founder of a financial advice and planning firm for Generation X and Generation Y, we know that the way households are run and business is done will transform over the next decade.   According to the Fiserv study, ...

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Hey Middle Class – It’s $369,000 A Kid!

So what does it take to raise a child?  They used to say it took a village to raise a child.   Today it can be more challenging than ever with the influence of television, internet, and music coming at our children from every angle possible.   I know this as my kids are twelve, ten, and eight years old respectively.   But, according to the Department Of Agriculture (www.usda.org), it will cost a middle class family $369,000 to raise a child from birth to seventeen years old which represents slightly over $20,000 per year to your annual budget. In the report, a middle class family is considered to be incomes between $56,670 and $98,120.   Child rearing was the largest expense in raising a newborn, followed by child care/education, and then food.   Whether you are a single parent family or a married couple, expense for the child increasing significantly as the age of the child increases.  The most amazing part of this report ...

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