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Client Newsletter
Volume 4, Issue 2
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Inside This Issue:
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Feature Story:
The IRS Is Always Playing A Numbers Game…
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Did You Know?
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Success Story Of The Month
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Financial Tip Of The Month
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Health Tip Of The Month
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Client Quiz
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For More Information
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Groundhog Day: Check Phil's Weather Prediction!
 On February 2, Punxsutawney Phil, Pennsylvania's groundhog extraordinaire, will again stick his head out of his den. The nation awaits his verdict. Groundhog Day is said to have its origins in ancient weather lore where the prognosticator was often a badger or a sacred bear. In the United States, its origin is said to come from a Pennsylvania German custom. If Phil, peeking from his burrow, fails to see his shadow, winter will soon be over. If the sun happens to be shining and Phil sees his shadow, winter will continue for six more weeks. The first trek to meet with Phil began in 1887.He has been emerging from his burrow in Pennsylvania ever since, always eager to greet his public. Phil is private in many ways, but a few rumors have circulated about him. *He gets his longevity from drinking the "elixir of life" of which he takes one sip every summer during the Groundhog Picnic. This gives him seven more years of life.
* It is said he is named after King Philip, a famous Native American leader. In his more plebeian days, he was called Br'er Groundhog.
* He speaks only in Groundhogese, which luckily is a language understood by the President of the Inner Circle. The Inner Circle provides for Phil during the year, rather like a court provides for its king.
The city of Punxsutawney offers several days of celebration for those who gather from around the world to hear Phil's proclamation. The city offers food, music, carriage rides, magicians, crafts and games.
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“Believe that problems do have answers, that they can be overcome, and that we can solve them.”
~Norman Vincent Peale ~
“Great opportunities to help others seldom come, but small ones surround us every day.”
~ Sally Koch ~
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With all this “Tea Bag” movement going around the country, we thought we’d take a look at some other issues relating to taxes and the scope of the money involved. Since the 2008 and 2009 bailouts the word “Billions” seems to not mean anything any more. Now “Trillions” is the unit of measurement they think about.
So the next time you hear a politician use the word “Billion” in a casual manner, think about this: A billion is a difficult number to comprehend, but we did some calculating, and put that figure into some perspective:
A. A billion seconds ago it was 1978.
B. A billion minutes ago Jesus was alive.
C. A billion hours ago our ancestors were
living in the Stone Age.
D. A billion days ago no-one walked on the earth on two feet.
Speaking of taxes, here’s a poem we got from a friend:
Tax his land,
Tax his wage,
Tax his bed in which he lays.
Tax his tractor,
Tax his mule, teach him taxes is the rule.
Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirts,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he tries to think.
Tax his booze,
Tax his beers,
If he cries,
Tax his tears.
Tax his bills,
Tax his gas,
Tax his notes,
Tax his cash.
Tax him good and let him know
That after taxes, he has no dough.
If he hollers, tax him more,
Tax him until he's good and sore.
Tax his coffin,
Tax his grave,
Tax the sod in which he lays.
Put these words upon his tomb,
'Taxes drove me to my doom!'
And when he's gone,
We won't relax,
We'll still be after the inheritance TAX!!
We liked this poem, even though it’s funny on one hand, and sad as hell on the other hand.
 We also went about looking up different taxes we have to pay and came up with this list. We’re sure we missed plenty of taxes, but when you look at this list, it should make you mad. It makes us plenty mad. And sick. There’s no way to reduce almost every tax on this list if you’re subject to them. Which is not true of income and some estate taxes (if they bring them back) which can be reduced legally. Anyway, check this out:
Accounts Receivable Tax
Building Permit Tax
CDL License Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Perm it Tax
Gasoline Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges (tax on top of tax),
IRS Penalties (tax on top of tax),
Liquor Tax,
Luxury Tax,
Marriage License Tax,
Medicare Tax,
Property Tax,
Real Estate Tax,
Service charge taxes,
Social Security Tax,
Road Usage Tax (Truckers),
Sales Taxes,
Recreational Vehicle Tax,
School Tax,
State Income Tax,
State Unemployment Tax (SUTA),
Telephone Federal Excise Tax,
Telephone Federal Universal Service Fe e Tax,
Telephone Federal, State and Local Surcharge Tax,
Telephone Minimum Usage Surcharge Tax,
Telephone Recurring and Non-recurring Charges Tax,
Telephone State and Local Tax,
Telephone Usage Charge Tax,
Utility Tax,
Vehicle License Registration Tax,
Vehicle Sales Tax,
Watercraft Registration Tax,
Well Permit Tax,
Workers Compensation Tax.
Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. What happened? As Mr. Rogers used to say, “Can you say 'politicians?'”
So, since income taxes are one of the few taxes you can LEGALLY reduce, in order to pay the lowest amount of taxes legally possible, you need to take action right away! Now, at the beginning of the year.
Now more than ever is the time to start making your plans, so that you and your family pay the least amount of taxes…and are prepared to manage ALL your finances the best way for your family. PLANNING is the key.
Please don’t try this at home. Planning is NOT a place for amateur night. We can help you decide what you should be doing in the context of your financial planning for 2010 and beyond!
Remember, we HATE hearing about what you just did with your money. We want to hear, “Here’s what we’re thinking about doing…”, not that you’ve already done it! We look forward to hearing from you soon!
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- REMEMBER -
WE WANT YOU TO CONTACT US WITH YOUR "HERE'S WHAT WE'RE THINKING ABOUT DOING" QUESTIONS, NOT YOUR "GUESS WHAT WE JUST DID!" COMMENTS!
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| Our monthly feature of tidbits of news and info to make your life easier and your money work harder, so you're healthy all the time! |
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 1.) How to stay positive in life, particularly in difficult times… A negative outlook can set in whether it's caused by a stressful event, a job situation or by too much routine, which may mean few events of any kind. Dr. Daniel Wagner of Trinity University in San Antonio has found through his studies that trying to get rid of a negative thought only makes you think about it more. Instead, you should direct your thoughts elsewhere. He recommends asking yourself a question that sets your mind in a new direction. For example, ask: "How can I make myself stronger and better able to deal with this?"
Or ask, "What is my goal?" Wagner says when you decide on the question, keep asking it. Ponder it. Wonder about it. Let it run through your mind whenever you find yourself worrying. It will change your thoughts. Other recommendations include:
*Appreciate. Focus on something you are grateful for or that you like.
* Visualize. Create the experience you want to have in your mind. Be in the present. Don't spend time reliving the past. Acknowledge the present moment and its opportunities.
* Get healthier. Avoid eating junk food. Eat regular meals and exercise, both of which will give you a more positive outlook.
* Associate with positive thinking, happy people. Their influence can rub off on you.
* Find something to laugh about. It could be a joke, a TV show, a movie, or talking to a funny person. Laughing can change your outlook.
* Stay away from negative people, those who criticize you, your ideas and everyone else.
You can't always control events in your life but you can control what you choose to think and feel about them. You can look at things positively or otherwise. You decide.
 2.) New breast-cancer screening advice… The new mammogram guidelines by the U.S. Preventive Services Task Force were recently published in the Annals of Internal
Medicine. The controversial guidelines were both hailed as reasonable and derided as an example of health care rationing. The recommendations include:
* For women in their 40s, routine mammograms are not necessary. They are not saying there isn't a benefit to screening women in their 40s, but they are saying the benefit is small. The review weighed the benefits of screening compared with the harms of false positives, such as anxiety, unnecessary additional tests and biopsies, which are expensive and time-consuming, according to the task force.
* Women age 50 to 74 years old do not need to undergo mammograms more often than every other year.
* There is insufficient evidence to conclude the benefit or harm of mammograms for women age 75 and older.
The recommendations only apply to women without a family risk of breast cancer and those who don't have genetic mutations known to be associated with breast cancer, such as the presence of BRCA1 or BRCA2 genes.
* Doctors need not teach women how to examine their breasts for signs of cancer because of a lack of evidence that it is of any benefit.
Scientists agree that, in spite of many false positives, mammograms reduce cancer deaths in women ages 39 to 59 by about 15 percent. At this time, the American Cancer
Society and the American Medical Association recommend annual mammograms for women starting at age 40. Most health insurance companies and The Centers for Medicare and Medicaid have no plans to change their coverage, but that might not be the case for private insurance companies. The guidelines influence both public and private insurance over time.
3.) Mayo Clinic tells how to pack - Tens of thousands of people each year seek treatment for injuries related to carrying luggage, according to the America Academy of Orthopedic Surgeons. To avoid the pain, the Mayo Clinic offers this advice:
* Pack less. People take much more than they need. Avoid muscle strain by packing two smaller bags instead of one large one.
* Use  wheeled luggage. Choose sturdy, light pieces with four wheels or two wheels and an extendable handle.
* When pulling or carrying bags, avoid fully straightening your arm. Keep the arm bent and close to your body. Pick up rolling luggage and carry it when you go up or down stairs.
* As with any heavy object, lift with leg muscles, not with your back and waist. Bend at the knee, grasp the handle and straighten up. Avoid twisting and don't rush.
Always carry a bag as close to your body as possible.
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| (Note: The details of these stories have been changed to maintain confidentiality, and some compilations are used to accomplish anonymity.) |
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 When Don and Carol first came to see us, they weren’t very happy. As a matter of fact, they were pretty scared. Why? Well, here’s the situation.
Don who is age 63, was being forced into retirement in three months due to his employer not being able to get adequate financing with the tight credit market caused by the big banks having been bailed out but not loaning money they way they used to. They forced several of the people who had been there more than 25 years, including Don, to take an early retirement package.
Carol, on the other hand, had worked full time for a retail store chain for fifteen years, and at age 63 herself, was tired of working there, and decided that it was time to hang it up. She had finished working about two months prior to our appointment.
The reason that they came into see us was because their brother-in-law had referred them in. He had retired a few years ago, and also was very nervous and worried about running out of money.
The plan that we worked with him on, and have been monitoring ever since, has been working very well! He has actually had the ability to save a little bit of money in retirement…instead of running out because of the ultra-conservative approach we take to retirement planning. (Which is what would have happened if he had kept
on doing what he’d been doing, with most of his 401(K) and personal money in the casino they call the stock market. Even more critical with this crazy market environment we are in now-a-days!)
So, when Don and Carol came into see us, they had high expectations, but also a lot of fears. Their monthly budget was $300 a month more than what they were taking in…without doing anything reckless! They were quite worried about this when they came in to see us. Carol expressed a big concern the approximately $217,000 they had saved up, in addition to these pensions, would be eaten up very quickly… because they would be going into the principal to the tune of several thousand dollars per year. (We added a fear she had forgot about. Inflation. Their deficit would keep getting worse over time due to rising prices, particularly in the health care arena. Even if Congress passes some form of so-called “Health Care reform”, costs are still going up in our opinion.)
This budget did not allow for them doing any work on the house, going on nice vacations and so forth.
Dons’ concern was not so much that they would run out of money that quickly, but that they would not be able to enjoy the lifestyle that they had worked so hard to achieve all these years. We took a look at their planning scenario, and found they had done many things that we find lots of people going into retirement do; that are costing them a ton of money, and are making their retirement more expensive than need be.
For example, through doing some diligent shopping and helping them change some of their health insurance parameters, we were able to save them $185 per month.
We showed them some simple changes to their health insurance that they weren’t even aware of.
Secondly, we took a look at their tax situation and found that by the way they had their money invested, they’re actually wasting about $255 per month in totally unnecessary income taxes. Next, we took a look at the way they were spending their money on their mortgage payments, car payments etc… and we discovered that their house could have been financed differently. (They had originally chosen to go with the higher rate, on a short term financing arrangement, which created higher payments as well.) Even though the value of their house has gone down quite a bit, they had so much equity, we found they could refinance at today’s ridiculously low rates, and save another $260 a month.
Finally, we saw they were underinsured as far as life insurance goes, and were paying a ridiculously high premium on an old whole life policy. We showed them how to get over 400% more coverage than they had now, for $128 less per month than they were paying now!
The total from all these savings, when added up was $828 per month! And, it brought them well within their monthly budget for their desired lifestyle. (Plus, we showed them how their cash flow and budget would likely look for years ahead, taking into account the acquisition of Medicare, rising costs, changes in
Social Security payments, and so on. We have planning software that makes these calculations! They are far too complicated to do any other way!)
 So, like their brother-in-law, they’d be able to not only make ends meet through retirement, but also might have a little extra money to set aside, which in their case they were going to use as a vacation fund because they loved traveling. (And, they won’t likely have to dip into their principle for quite some time!)
Now, this kind of a problem would not have been solved, had they just done the things most people do:
1) Nothing, and worry all the time.
2) Take the advice of some well meaning strangers or relatives who don’t know what to do.
3) Read magazine articles or watch TV news shows. (Most of us decide what to do with our financial situation based on very impersonal, and usually inaccurate, information.)
No, the only way they could see their retirement picture change, and feel the absolute weight of the world lifted off their shoulders was because they were able to do the right kind of planning with the right kind of knowledge! So, the moral of the story is always the same. If you are prepared, and you know how to plan, your future can be safe and secure. If your run your financial life like most people do, from the seat of your pants, you’ll could end up getting burned.
It just goes to show you it’s never too early or too late to plan! (Are you getting your planning going right now? Are you going to waste lots of money by procrastinating? Don't delay. Call us up for your annual review, RIGHT NOW, while this is fresh on your mind. We'll take care of the rest!)
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 The first-time home buyer tax credit of up to $8,000 is still in place. The extension of time by Congress also includes a new credit of up to $6,500 for certain repeat home buyers.
The first-time buyer credit is essentially the same as the original credit, which expired in November. The buyer can't have owned a home for three years, and a home can't be bought from a parent, grandparent, child or grandchild. Buyers can claim the credit on either 2008 or 2009 tax returns. If they don't owe enough tax to qualify for the $8,000 credit, they will receive a check from Internal Revenue for the amount between what they owe and $8,000 or for $8,000 if all taxes are already paid. New provisions:
* For purchases made after November 6, 2009, no credit is available for any home costing more than $800,000.
* Taxpayers who lived in their homes for five consecutive years or more can qualify for a tax credit of 10 percent of the purchase price, or a maximum of $6,500. The new home doesn't have to cost more than the old one.
* Income limits for buyers are more generous. For single filers, the credit phases out between $125,000 and $145,000 of modified adjusted gross income. For married couples, the range is $225,000 to $245,000.
* Buyers must be 18 or older and can't be a dependent on someone else's tax return. And buyers must show proof of purchase to qualify for the credit.
* The credit must be for purchase of a principle residence. It can be a house, condo, semi-attached townhouse, or (if it has eating, sleeping and toilet facilities) a boat, motor home or trailer.
* Members of the military have an extra year to use these credits.
Visit federalhousingtaxcredit.com for more information.
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| Please keep in mind that this tip is designed to be of help for you, but is not to be relied upon as advice. It is merely a reminder that there are many choices you have available to you, and that planning is the only way to find the right answers for your situation! As with any financial issues, make sure you get the right information before making a decision! If you have any questions, we'll be glad to help you! |
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| These tips are not for everybody and should not be taken as specific recommendations. Before you take any action regarding yours or anyone's health, we strongly suggest you consult a qualified physician! |
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 Keeping your heart healthy is so simple it can be put into catchy, two-word phrases: Eat right. Get exercise. Don’t smoke. Putting those heart-healthy catch phrases into action, of course, isn’t so simple. Which matter most? How can you put them into daily practice? Here are practical heart health hints you can use every day.
Get Exercise: Time to Play
Adults need at least 30 minutes of exercise five or more days a week for heart health. But improving cardiovascular and overall health isn’t only about sweating on a treadmill or climbing stairs, say the pros. Getting out to play is exercise too, and improving heart health is just as easily about kickball with your kids, walking the dog, or shooting hoops with colleagues during your lunch break.
Heart-Healthy Keys to Exercise
Get a total of at least 30 minutes of exercise daily -- and you don’t have to do it all at once. Aim for a 10-minute morning walk perhaps, a short workout with hand weights at lunch, and some digging in the garden before dinner, and you’ve met your goals. To get the full benefits of aerobic exercise “folks should get their heart rate up so they’re somewhat breathless, but can still carry on a conversation,” says Susan Moores, RD, MS, a registered dietitian and American Dietetic Association spokeswoman. She adds that all kinds of exercises are important, from strength training and aerobics, to flexibility and stretching exercises.
Routine Exams: Get Checked
“Nobody’s going to keep an eye on your medical health other than you," says Elaine Magee, MPH, RD, author of Food Synergy, and WebMD’s "Recipe Doctor." "You are in charge." That’s an easy thing to forget, especially when talking about the ho-hum pragmatism of routine health exams. Yet getting regular blood pressure, blood sugar, and cholesterol checks, as well as physical exams are important steps in maintaining heart health. “Anything you can find out about what’s going on inside your body the better,” says Magee. Especially true when you consider that heart-threatening conditions like high blood pressure and high cholesterol are “silent” -- meaning there’s almost no way to know you have them unless you get tested.
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Q. Sales, cost of sales, utilities expense, and depreciation expense is recorded in what financial statement?
A. Balance Statement Only.
B. Notes to financial statements.
C. Balance Sheet and Income Statement.
D. Income Statement Only.
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Q. True or False:
If a 401(k) plan has "automatic enrollment," then the company can force an employee to contribute to the plan.
A. False: Many plans now use automatic enrollment to increase participation. However, no individual can be forced to contribute. Rather, an employee who does not specifically elect otherwise will be enrolled by default. That employee always retains the right to contribute a different amount than the default, or not to contribute at all.
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Baton Rouge, LA - Did you know that all financial advisors are not the same? And, if you need to get some help with your money, you will need to know what to ask a financial professional before you make any moves!!
Most people really don't know what questions to ask, or what things they should be aware of. When it comes to your money, you had better know!
Picking the right advisor can help you, and picking the wrong advisor can be a big mistake!
Make sure you know which is which! In today's messed up economy, you cannot afford to take any chances. If you are like most of us, these days of world crisis, economic slowdown, and general confusion have you downright worried.
You know what? You should be! Managing money was always tough, but this last year has set records for government foul-ups and totally unpredictable markets.
These are scary times. And, therefore, you must be sure to use an advisor that will be right for you!
To help you, we have prepared a FREE REPORT called "Ten Questions You Must Ask A Financial Advisor BEFORE YOU HIRE THEM!"
To get your FREE REPORT, and learn the secrets some advisors would prefer you never knew, call toll-free 1-888-6INVEST, 24 Hrs., for your free copy of this eye-opening report will be sent to you immediately. Call NOW!
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YES! I'd like more FREE information on the following:
FREE Reports Available!
Call Toll-Free 888-6INVEST, 24 hrs., or Email us To Get Any Of These Free Reports!
- “The Tax Savings Secrets The IRS Doesn’t Want You To Know!”
- “The Secret Alternatives To Lousy, Low Yielding CD’s…What Banks Don’t Want You To Know!”
- “The 10 Biggest Mistakes People Make Before Or After Retiring…And How You Can Avoid Them!”
- “The 14 Questions You Must Ask BEFORE You Hire A Financial Advisor!”
Please email or call us if you would like to set up a FREE "Financial Check-Up" of your insurance, assets and overall financial well-being!
Please email or call us if you would like to add a FREE subscription to your monthly newsletter for the following people. I understand you will send them a note explaining I suggested they get this FREE subscription, and that all they have to do is contact you if they wish to cancel.
Thanks, and don't forget to send in your Client Quiz answers to win a FREE DINNER!
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