Does Your Business Need A Buy-Sell Agreement?

Entrepreneurs are generally good at one thing when they start their business and that’s generating top line revenue.  Once they create enough top line revenue then they begin to think about how to drive bottom line profitability in their business.  As the equity value of the company grows, most owners never consider some very important planning items because they believe they are invincible.  What happens if my business partner(s) get divorced? What if they die?  What if they become disabled?  Do I want to be working with my partners kids or spouse?   One of the key considerations for most business owners is whether or not to get a buy-sell agreement and get key person insurance. A buy-sell agreement is a legal contract that provides for the sale of an owner’s stake in a business at a ‘trigger’ event.  The sale of an owner’s interest could actually trigger for many reasons including retirement, death, disability, divorce, bankruptcy, or even a conflict ...

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7 Retirement Shirts I Won’t Be Wearing

When it comes to retirement, many people talk about how much of a lump sum they will need to make work optional. They discuss their future plans full of travel, golf, grandchildren, and giving back to charity. We often hear of the dreams of starting the business they always wanted to run and starting the volunteer work they never had the time for when they were working full time.  Over the past twenty-six years, I’ve seen many people retire and helped many retire successfully. At the risk of offending someone out there (because I am sure I will) I spent a few days up in New Jersey over the Fourth Of July and I saw a lot of bad shirts.  I mean really bad shirts.  Don’t know why it got me to this off the beaten path retirement topic, but I thought I would share my list of seven shirts you’ll never see me wearing during retirement.  Remember, if you ...

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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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How Life Insurance Made Jim Harbaugh, Not Nick Saban, the Highest Paid Coach in the NCAA

Most that follow collegiate athletics are familiar with Nick Saban, arguably the most successful head coach in NCAA history. Heck, even if you don’t follow college sports, Saban has become a figure that is well known throughout the country for his Alabama teams and their ferocious defenses. But did you know that despite his track record on the field, he is not the highest paid coach in the NCAA? That distinction belongs to Jim Harbaugh, head coach of the Michigan Wolverines. Despite not having reached the pinnacle of the sport yet in terms of national championships, Michigan made Harbaugh the highest paid head man in the country in August of 2016. The avenue in which Harbaugh and the University accomplished this is not commonly seen in professional or amateur sports. After his first season with the Wolverines, Harbaugh and the leaders at Michigan entered into a Split-Dollar Loan Agreement under which the University agreed to make seven loan advances, of ...

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Why Are You Such A “Poor” Millionaire

As I continue to help more and more people approach the end zone of making work optional (a.k.a. – retirement) it continues to shed light on just how little one million dollars seems these days.    It was once believed that the ultimate pinnacle for wealth building was to have one million liquid dollars, but with the uncertainty in the bond markets, stock markets, and real estate markets, it has baby boomers about to retire shaking in their boots about being sacked before they score a touchdown. Many people hear this notion being thrown about called the 4% percent rule.   This rule was initially laid out by a financial planner William Bengen.   He had back tested a variety of withdrawal rates using various historical rates of return and found that 4% withdrawal with the absolute highest rate that held up over a period of 30 years. So, if you are a “millionaire” with $1,000,000 of starting capital at ‘work optional’, you ...

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5 Key Points To Know When You Decide To Refinance

With the Fed recently raising interest rates, people have already started to write and call me about whether or not it is still a good time to refinance.  You will likely see more offers from your current mortgage company, broker, or bank looking to get you locked in before the Fed raises rates again in 2017.  Here are my smart money moves to five key points to know when you make a final decision about whether a refinance is good for your property. There Is NO Rule Of Thumb — I love these random articles out there that say your mortgage rates needs to be down by a certain percentage for a refinance to make sense. In fact, Investopedia recently wrote, “The typical rule of thumb is that if you can reduce your current interest rate by 0.75-1%” This makes very little sense to me as this is going to be a math equation because all refinancing costs money.   What you are ...

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How To Win The Gold Medal With Your Financial Plan

The 2016 Olympics have officially kicked off and it should prove to be exciting with USA Basketball, USA Swimming, and many more new events including golf this year.   It is always amazing to hear the Olympic stories of gold medal winners and their struggle to make it to the top.   Here are your smart money moves on what to do to win the Gold Medal with your financial plan. Get rid of debt as quickly as possible – Even though most people are excited about low interest rates today, just because you can borrow money doesn’t mean you should borrow money.   Consumer debts are the absolute most important to get rid of in your financial plan, and consider trying to pay extra on your long term debt.  Going into retirement with no debt will allow you be nimble and flexible with your choices down the road. Plan for the unexpected – With companies seemingly doing a reorganization or a rightsizing ...

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Remember When You Could Leave Your Door Unlocked

Since it is political season and most of my articles tend to focus on the money side of politics, I thought I would give you some food for thought about the way it is now and the way it was when most of you were growing up as a child.   It’s imperative being in the money business that I stress to people every day the importance of savings and how money can secure their future, but in some ways it worries me on how people may be accumulating money and the negative impact the pressure of having to earn more money is having on families across America. Can you remember when life seemed a lot simpler than it is today?  Is it that you have more responsibilities?  Is it that technology has made you more accessible?  Is it that now you have had a taste of the ‘good life’ that you don’t want to go back to just the status ...

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