Category Archives: January Financial Tasks

Personal Goodwill in 2019

The “holidays” are over. Whether you call it the 12th day of Christmas, 6 January, or the Feast of the Three Kings, those days have passed.

  • Did you survive or thrive?
  • What traditions did you keep, or eliminate?
  • What are your resolutions and goals for 2019?
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Photo by freestocks.org on Pexels.com

These are questions grabbing the headlines on Twitter, your local newspaper (all the sections), and perhaps your favorite podcastBut wait! What is your real goodwill for 2019? In financial terms we call it your balance sheet. For businesses, goodwill is an intangible which represents real value.

“The goodwill of a company increases its value, as qualities such as the company’s customer base, its brands, products, location, workforce and reputation demonstrate the company’s proven track record of generating income.” via Investopedia https://www.investopedia.com/ask/answers/010815/how-does-goodwill-increase-companys-value.asp

In a 2014 post on this subject , I urged readers to consider their true balance sheet. This goes beyond the numbers to include personal goodwill, relationships, intangible assets, and experiences.  In 2019, with the 24 second news cycle (no longer 24/7) , market volatility, increasing interest rates, and a government shutdown, I believe it is ever more important to total up our non-financial assets.

A friend recently learned her skills were worth 12% more annually in the job market, but that it would require a heavy loss of professional autonomy. She chose to keep her autonomy and turn down the position. I recently was able to attend a birthday party for a family member where 15 relatives were in attendance; we ate, we drank, and we all enjoyed the surprise live music delivered to her door. It included Happy Birthday, on the bagpipes! As some of us mostly attend funerals, it becomes a priceless family memory.

If you have beloved family members who no longer travel for any reason, you have the experiences of travels with Mom, Aunt Susy, Uncle Sergio, or attending a cousin’s outdoor wedding (cupcake tower!)


Author and her mom at Fort McHenry National Monument. Photo credit to kind tourist.

During a time of job loss, or even getting home from a doctor’s appointment, do you have friends, family or faith institutions who can help you? That goes on your true balance sheet. Do you and your children talk or spend time with other over vacations, holidays or during stressful times? That is worth a lot. For those who have furry kids, same question. For singletons with an extensive chosen family beyond your family of origin, I hope that you find humor,  comfort, and support in these relationships.

Add those to your own bank. Research tells us about how our brain enjoys them more than the acquisition of things. Experiences generate three times the memories, from the anticipation, the actual event, and then the retrospection afterwards. I have a series of #UnfortunateEvents, for example, that comprise many of my personal vacations. They are funny now… but were not at the time. (River rafting accident, drunk guy in the aisle at 30,000 feet, and crying on an expensive Venetian gondola ride to name a few).

Personal and professional resilience count on your balance sheet. Deep breathing during stressful moments counts. (For some, that would be before public speaking. I find yoga more difficult than public speaking, but that’s just me!) Being intentional about your spending adds up. Decreasing debt is important as it leads to greater financial flexibility. Financial resilience and investing in personal attributes (reliability, integrity, courage and caring for others and yourself) loom large on the true balance sheet and are important for both personal goodwill and goodwill towards others in 2019. #IRL

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Filed under 12 Days of Christmas, Financial Wellness, For Love or Money, January Financial Tasks, Self Awareness

Old Habits & New Resolutions July Update

July can be a time to review those New Year’s Resolutions. Did you make any for 2018? 

Even if you didn’t,  now is a good time to revisit the subject, as the year still has five months to go!

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             Aauugghh!                                   Photo by Pixabay on Pexels.com

 

 

 

Often the calendar can help create structure for you. Bills get paid after payday; retirement plan contributions occur on paydays, etc. If you can itemize on your taxes, you may have dropped off many bags in the last week of December at your local thrift store. In my home town, Macklemore helped us out one year. Parents of college bound students have a date with the revised FAFSA; and by the end of January, you’ll have some thoughts about your past year’s tax return. For a quick read on what you can learn from your 2017 tax return from Morningstar, check here. Also, with that 2017 tax return near your screen, take a few minutes to run through a paycheck “checkup”. The IRS wants to help you with this, so you can withhold more in taxes if you need to, or loosen up those purse strings due to the increase in your standard deduction for 2018.

black calendar close up composition

 

 

As mentioned in a previous post, Fidelity and others generate helpful suggestions for our annual resolutions. One study indicates that financial resolutions are easier to keep than those about food or exercise.

Let’s begin with the one geared for success! Financial tasks and affirmative statements.

In five months you can:

  • Make 5 Roth IRA contributions
  • Set up and fund an emergency savings account with $500-$1000
  • Check all your accounts with beneficiaries- retirement, insurance and banking
  • Increase your charitable giving in order to get that company match or set aside funds for a non-profit, instead of the IRS.

What do you want to improve during the balance of 2018?

 

 

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Filed under Be Prepared, Financial Wellness, Habits, January Financial Tasks, Uncategorized

Old Habits and New Resolutions

January 1-31 is traditionally a time of making [and breaking] New Year’s Resolutions. Is it  crowded at your gym? Apps and online tools abound. Books and blogs on decluttering, tidying and organizing can easily be found in your inbox. It is said by some that a habit takes at least 6 weeks to create and people such as Gretchen Rubin and Beth Dargis have multi-day programs on offer. Behavioral economist Dan Ariely created  a short program in this  blog post.     To see the results of his research, visit this link from WYNC.

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by Charles Duhigg

Often the calendar can help create structure for you. Bills get paid after payday; retirement plan contributions occur on paydays, etc. If you can itemize on your taxes, you may have dropped off bags in the last week of December at your local thrift store. In my home town, Macklemore helped us out one year. Parents of college bound students have a date with the revised FAFSA; and by the end of January, you’ll have some thoughts about your 2015 tax return. For a quick set of tax facts and limits from Morningstar, check here.

As mentioned in a previous post, Fidelity and others generate helpful suggestions for our annual resolutions. One study indicates that financial resolutions are easier to keep than those about food or exercise.

So let’s begin with the one geared for success! Financial tasks and affirmative statements. What do you want to improve in 2016?

Where to begin:

Meta Topics: There are meta topics, like what you learned from your family of origin about money, and if money represents the same thing to you and your partner (freedom or security for example).

Or

Nitty-Gritty Topics: There are also the nitty-gritty topics such as how to cut spending on meals out or groceries, am I saving enough for retirement,  and the ever popular  “am I spending too much on fill-in-the-blank ?”(e.g. coffee, furniture, clothing, wedding stuff, organic food, books).

This will be a series on how make the incremental changes which can be permanent, instead of the ‘cold turkey’, ‘all or nothing’ ‘you should do this’ framing which is [mostly] guaranteed to fail. Think of financial wellness, and small successes. Avoid binary thinking, see your progress on a continuum, and remember that like the stock market, it is time, not timing, which makes the difference. Ready, set…

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Filed under Be Prepared, Financial Wellness, Habits, January Financial Tasks, Uncategorized

Tax Planning

The Chinese economy is beyond our control but you can look ahead to your own tax season. Here is a great tax planning sheet from Morningstar to review now or set aside until March (if that is your routine). Remember that you can still send in estimated taxes-even if you missed doing so on January 15th (the day for 4th quarter 2015 estimated payments).

The Bait

Which method  gets you to work on your taxes – a carrot or a stick?

Small Business Links

Small steps to success will be a big theme for this blog in 2016. What can you do right now to be better prepared to do your taxes for 2015?

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It’s that time of year again!

Visit the IRS Small Business & Self Employed Division or the Small Business Administration (SBA) for tools to estimate your taxes.

Have you heard of SCORE? It’s a national organization dedicated to help for small business owners, whether you are just thinking about a business or have had one for several years. They have low cost classes, free webinars and centers all across the country. More information on their tax programs is available here.

 

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Filed under Be Prepared, January Financial Tasks

After Mutual Funds & Merlot

German wine humor postcard

German wine humor!

Mutual Funds and Merlot was so much fun last Friday. We drank a great Merlot from Columbia Crest (Grand Estates). Topics included your objectives for your investment funds and how those should match up to your mutual fund choices. We looked over the Vanguard portfolio allocation charts (seen here) from 1926-2014 to learn how asset allocation adds to or decreases average return.
One question asked,”what would it look like if the Depression (1930’s) years were left out”? Those years have the largest declines. Declines were pretty dramatic in 2008, a popular Standard and Poor’s 500 fund from Vanguard (VFINX) was down 37.02 that year. When looking at mutual funds returns now, be sure to check the ten year as well as the five year returns; as the 2008-2009 numbers have dropped out of the five year averages.

We also reviewed fees and terminology (no-load, load etc.) and I shared that when I began in this business (mid 1980’s) the highest front end mutual fund charges were 7.75%!

We did not cover all of the types of mutual funds; only open-ended mutual funds and index funds (a subset of open-ended funds). I also reviewed a decision tree of sorts:

  • Money to Invest (how long)
  • Tax Treatment (Taxable or non-taxable)
  • Diversification (individual issues or pool of securities e.g. mutual fund)
  • Objectives for your funds (growth, income, combination)

My next class will be Riesling and Retirement

(February 3, 2016)

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German wine grapes in June 2015 by DCT

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Filed under Be Prepared, January Financial Tasks, Just for Fun