Financial Planning

12 Wealth Management Financial Planning

Defined Benefit Plan: The Best Retirement Plan You Have Never Heard Of

Defined Benefit Plans

 

The Defined Benefit Plan

What if there were a retirement plan that allowed for very large tax-deductible contributions of $100,000 to $250,000+ per year? What if that deduction could potentially double if your spouse was an employee in your business? What if this great retirement plan could be added in addition to your 401(k) Plan?

Sound too good to be true? You are in luck. This is all possible if you have a Defined Benefit plan, which is also known as a pension. If you have a defined benefit plan, you can have access to these types of large deductions. Wondering why you have never heard of this type of plan? Me too. These plans are not new. They have been around longer than 401k plans. So why have your financial advisors not told you about this?

 

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The 2018 Comprehensive Guide for Year End Financial Planning Strategies

 


year end financial planning

 

“A goal without a plan is just a wish.” – Antoine de Saint-Exupery

 

12 Smart Actionable Tips For You To Maximize Your Year End Financial Planning Strategies

The end of the year is fast approaching. Now is the time to plan your year end activities so you can make the most of your financial planning and tax strategies.

In a perfect world, you would have a comprehensive financial plan that you review often to ensure you are on track. However, I’m more realistic. I know you are probably not going to do this…

And to be frank, you would not be reading this in December if you had already done your planning for the year.

Having a financial plan is an important step in making sure you have a path to reach your goals. Financial planning is about figuring out where you want to go, putting together a path to get you there, and monitoring your progress along that path to adjust for unexpected events.

While most financial planning should be done continuously throughout the year, many people wait until year end to complete their checklists. This post should help provide you with 12 immediate actions you can take to get up to speed on your financial planning before year end.

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2018 Tax Reference Guide

 

2018 tax reference guide
 
 
This is our 2018 Tax Reference Guide. We created it to make your life easier. Each year we collect this data so you don’t have to. You might want to bookmark this page for future use. Don;t miss out on the tax changes for 2018 and how they impact your financial life.

 

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What is the True Cost of Owning a Home?

 

Cost of owning a home

 

In the prior post of this series, Should You Rent or Buy a Home?, I wrote about the pros and cons of home ownership vs renting. It is important to start here when you are considering whether to rent or buy a home. The decision of where to live should not be solely made on emotional attachment or financial considerations. It should be made up of both if you are planning on living in a home for many years. You want to love where you live.

This week’s post will be focused more on the financial considerations of renting vs buying a home. More specifically, what is the true cost of owning a home. If you have never correctly run these numbers before, the data may surprise you.

This week I will give you an example of what the true costs of owning a home are. In next week’s post, What You Don’t Know About Renting vs. Buying a Home Can Cost You Money, I will compare some real life examples of costs of renting vs buying a home.

I hope I am able to forever change how you look at buying the home you want to live in.

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What You Don’t Know About Renting vs Buying a Home Can Cost You Money

 

renting vs buying a home

“If you rent a home, it is an expense. When you buy a home, it is an expense. If you buy a home and rent it out to a third party, it becomes an investment. A better way to put it is that when you are renting, you rent from a landlord. When you buy a home to live in, you are renting from yourself.”

This is the third and last post of this series. The first post, Should You Rent or Buy a Home?, examined what factors you should consider when renting vs buying a home. The second post, What is the True Cost of Owning a Home? , examined the true cost of owning a home. In this final post I will be examining whether it makes sense to rent or buy a home. Numbers don’t lie, so lets look at some real numbers.

There are many calculators available online to help you figure out whether to rent or own. Unfortunately very few include the true costs of owning a home in their calculations. If you read the prior post, you will have some understanding of what was left out and how to calculate it. The math in post this will be relatively straight forward and a bit more fun.

I will be showing you some examples of real properties that I have found in the past year to illustrate this secret that very few people know. Whether you are a real estate investor or looking to buy a home to live in, you will want to know this secret.

“you are paying someone else’s mortgage, so why don’t you pay your own?”

There is a myth out there that when you rent, “you are paying someone else’s mortgage, so why don’t you pay your own?” This is a farce. It doesn’t matter whose mortgage you are paying, what matters is your costs to live in that home.  No matter where you live, your cost to live in that home is an expense. If you rent, you pay rent to a land lord. If you own, you pay a mortgage, taxes, insurance, maintenance, etc. There are costs for both options. Unless you live in a tent you will be paying for a home either way.

The reason many people think that owning is better than renting is that they equate owing a home as an investment rather than an expense. Once they make the realization that it is…

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Should You Rent or Buy a Home?

American dream rent or buy a home

“But there has been also the American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

James Truslow Adams

Is the American Dream Really an Illusion?

There is a great illusion when it comes to real estate. This illusion is that owning your home is an investment.

When you own real estate and use it to generate monthly income… it is an investment.

When you buy real estate and develop it to sell for a profit… it is an investment.

When you buy real estate to live in… It not an investment. It is a personal expense.

Where did this idea come from that every American should own their home?

I heard that Fannie Mae came up with the “American Dream” idea as part of a marketing campaign that everyone should own their own home. Great idea on their part, but I have not been able to confirm that they were the ones to initiate this idea.

Should I Rent or Buy a Home?

Most people believe that owning a home should be considered an investment. Some go as far to become “house poor” so that they can leverage themselves into a bigger home. What they don’t know is…

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Your Emergency Fund – Understanding the Importance of Cash

emergency fund

“Never spend your money before you have it.”  -Thomas Jefferson

 

Have you ever lost your job? Has your car ever required an expensive fix? Have you or a family member ever need funds for a hospital visit?

Now imagine that you didn’t have access to cash to pay for that emergency. What would you do?

The mass issuance of credit cards has allowed people to neglect the need for an emergency fund. This is a mistake. An emergency fund is not only about preparing for the rainy day that you will need the funds. It is also about reducing risk, providing you options, and helping you sleep better at night knowing that your financial emergencies do not have to be debilitating.

According to Go Banking Rates, 71% of Americans have less than $1,000 saved in their savings account. Although some age groups vary by a small margin, 70%+ of them (including seniors) have less than $1,000. If their income is cut off for even a few weeks, how are they going to survive?

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Retirement Savings: How Much Do I Need To Save For Retirement?

 

 
retirement savings

“You can be young without money, but you cannot be old without it.”   – Tennessee Williams

Imagine… you are sitting on a beach. Listening to the waves slap the sand in a rhythmic melody. It is the same soothing tune you hear each day since you left your job. As you relax in your beach chair reading a thrilling novel on this quiet stretch of sand, a horrible thought comes into your mind. Then, just as quickly as it came, you smile and go back to your reading.…

This horrible thought was that you have not saved enough for your retirement. Fortunately for you, you have prepared for retirement. You don’t need to worry about anything other than what time you are going to tee off at the golf course.

Unfortunately, this is not the case for 41% of Americans between the age 55-64 years old…

 

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