I recently read the best seller "Atomic Habits" by James Clear. In fact it was my book giveaway in January, I highly recommend it. In this book I learned the tale of the French philosopher Denis Diderot, who in 1765 found himself unable to pay for his daughter's wedding. He was poor, but well known as the co-founder and writer of Encyclopédie, one of the most comprehensive encyclopedias of the time. Catherine the Great, Empress of Russia, was a fan of his encyclopedia and offered to buy his personal library for £1000 - more than $150,000 today. She also offered to pay him a yearly salary to act as her librarian. Suddenly Diderot found himself wealthy. He paid for the wedding and …
Gift Taxes – the short and long of it.
The gift tax short version: You can give up to $15,000 per year of cash or property (in 2019) to as many people as you wish without filing a gift tax return. The gift is not taxable to the recipient. Now the gift tax long version: 1. Gift tax, if due, is generally paid by the DONOR, not the recipient. 2. There is an annual gift exclusion in 2019 of $15,000. You can give $15,000/year to as many people as you want without having to file a gift tax return. This amount is adjusted each year for inflation 3. Under current law you can give away $11,400,000 during life and at death without owing any gift or estate taxes. Yes, that is over 11 million dollars Think …
It was the best of times, it was the worst of times… especially in the stock market
It was the best of times, it was the worst of times. So begins the Charles Dickens classic "A Tale of Two Cities". Which by the way I haven't read. Have you? Recently we've seen some good times and bad times in the stock market. On Thursday, January 3rd, 2019 the S&P 500 (an index of the 500 largest US stocks) was down 2.48% On Friday the front page headline in the Wall Street Journal read: Then the very next day, Friday January 4th, the same index was up 3.43% Saturday's headline read: So what can we expect over the next days/weeks/months? Will the markets be up, down, or sideways? Many prognosticators purport to have a crystal ball that can …
The Power of 1% – Small Changes Produce Big Results Over Time
I am currently reading "Atomic Habits" by James Clear. He writes compellingly about creating big improvements in nearly any area of our lives by making small steady changes over time. I'm not quite done with the book so it is not this month's book giveaway - tune in next month to win a free copy! This formula certainly works for saving money. Many 401k plans have encouraged the idea by offering an "auto escalation" feature. With auto escalation the percentage of salary you contribute goes up, typically by 1% each year. When you sign up for this feature this happens automatically which is a great way to save! To see the impact of escalating your savings percentage let's take a look …
Grandma has to take a distribution from her IRA and pay tax? Make a Qualified Charitable Distribution and save money while doing good!
Everyone has that one friend or family member who complains about problems that aren't really problems. I used to know a woman whose parents-in-law paid for everyone in the family to go on vacation every year to some fabulous place. The problem: She didn't always like the place. Hmmmm..... Not a bad problem to have. Another problem that some fortunate people over 70½ years old have is Required Minimum Distributions (RMDs). An RMD is a forced distribution from an IRA for those over age 70½. The dollars contributed to the IRA were (usually) not taxed and the earnings have never been taxed. Eventually the government wants its share. So the rule is you must take distributions …
