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The investment process can be a very complex topic, but I will cover it here in abbreviated form. The main steps are as follows: Determine your Goals and the Available Resources. The first step is to determine what you want to accomplish. For example, many people have retirement as one of their goals (which we …

A post about the federal budget sounds excruciatingly boring, but I hope this will be helpful in putting the putting the federal budget in perspective, because perspective, when numbers get into the billions or trillions, is difficult. We simply can’t comprehend such large figures so below I will show federal taxes, spending, and debt broken …

It is difficult to compare gift vs. estate vs. generation skipping tax rates and how they are computed, especially considering the “inclusive” vs. “exclusive” treatment of various pieces. So I did a calculation that “normalizes” them to equivalent terms. Assuming a taxpayer has already used up all of their exemptions and exclusions, and ignoring the …

Short selling is selling a security (typically a stock) one doesn’t own in hopes of buying it back later at a lower price. It is just the reverse of the normal practice of buying first then selling (which is called being “long” the security). Because short sellers are predicting a price decline, and will profit …

We frequently find circumstances in which a financial advisor’s lack of knowledge of some specific tax-related techniques may have cost the client money. Upon asking a number of financial advisors and CPAs about these situations, the unawareness on these points in particular appears to be widespread: Net Unrealized Appreciation or NUA. Assume that you have …

One of our newer clients asked a question a while back that comes up occasionally, “How do I know if you are doing a good job?” It is a great question. I’m not sure I have a great answer, but this is my attempt at it. First, I will give eight tips for finding an …

We are all prone to a variety of mental mistakes including (but not limited to) anchoring on irrelevant information, searching for confirming evidence rather than disconfirming data, extrapolating from small and recent data sets, etc. Some time ago I created a checklist of things to think about when making a decision – particularly an investment …

Many of our clients make regular charitable contributions.  The tax laws can be fairly complicated in this area, but there are ways to give more efficiently that are worth knowing if you have charitable inclinations.  While these strategies apply to most of our clients, please contact us or an appropriate tax professional before taking action as there …

While many of the financial planning issues that small business owners face are the same as everyone else’s, there are some differences – primarily in the area of risk management. Many small business owners have a large portion of their net worth tied up in their business and thus are not properly diversified. The owner …

The best known (and most parsimonious) rule of ethics is what is known as the “golden rule” which most of us learned as “Do unto others as you would have them do unto you.” This maxim is found throughout history and in almost all religions. For example, In ancient Greek philosophy: Do not to your …

I occasionally teach a 36-hour estate planning class to advisors seeking to become Certified Financial Planners, and we spend about 95% of the course on understanding and developing strategies for dealing with estate taxes. This applies only to a trivial percentage of the population since (under current law) estate taxes aren’t an issue until a …

While considering college funding, we tend to have clients fund their goals in this order: Tax-advantaged retirement plans in full. There are lots of ways to go to college but not that many ways to be retired. Many people shouldn’t even be doing any college planning – they can’t afford it. In addition, contributions to …

There are two main approaches to investment management: active management and passive management. The traditional (and by far the more popular) approach is active management. We employ the less popular passive management approach (sometimes referred to as indexing though they are slightly different). Below I will explain these two approaches, explore the pros and cons …