Protect Your Stuff!

“It simply isn’t acceptable for the likes of Google, Facebook, Amazon and others, which amass data by the terabyte, to say, ‘Don’t worry, your information’s safe with us, as all sorts of rules protect you’ – when all evidence suggests otherwise. “

– Maelle Gavet

Protect your data and devices

There are now more tools available than ever to help you organize, access and protect your sensitive data and documents.

Mobile Devices

The amount of information we store on our mobile devices is staggering:  emails, personal contacts, client contacts, banking information, music, and pictures represent only a fraction.  You can easily protect this data by enabling the password service, or, in the case of the newer iPhones and iPads, by enabling the fingerprint recognition software.

We have become heavily dependent on these devices that, if we lose them or they malfunction, we could spend days trying restore or replace the data on the device.  To protect against this potential headache, you should back up the device regularly.  You can also shift more application content to cloud services such as iCloud or G Cloud.

Computer Safety

If you know the sickening feeling of losing an important file that you saved on our computer, then you know you do not want to risk losing all the data on your laptop.  That’s why we recommend backing up your important files to an external hard drive, remote server, cloud storage or online back-up program.  Some of you may want to make the backup occur automatically, so that all files are stored on a regular basis.  Others may prefer to do so manually.  If so, be sure to set a reminder that works for you so that you frequently safeguard as much of your important data as possible.

In addition to backing up your files regularly to an external location, we recommend you install anti-virus and malware software.  When you buy a computer, an anti-virus program is often included.  Make sure the virus definitions are updated constantly.  Also, you can add more projection for free, such as Malwarebytes.

Original Documents

There are certain documents that deserve an extra level of security, like original copies of your estate plan (link to planning) for the inevitable.  For these documents that hold significant legal and personal importance, place them in Ziplock bags to prevent water damage and store them in either a fireproof safe or a safety deposit box.


Taking these small steps each of you can take now to protect your tax and financial information will prove invaluable if the unexpected occurs.

How can you plan to take a year off and still saving for retirement?

“Quote relating to subject matter, search on:, Select the quote text and then hit the quotation button to create.” – Quote’s Author

Here is a tough financial
planning challenge:

How do you save to take a year off as a sabbatical, or go a big (expensive) vacation, and
still stay on track with saving for your retirement?  

What if you also have student loans you desperately want paid?  

Answer: it depends on your situation! 

If you get a large capital influx

The easy solutions would be some massive influx of capital, such as stock options in a company that skyrockets in value or a huge inheritance  … or winning a major lottery prize.  Such an influx of capital would provide funds to pay off the debt, invest for retirement and cover the costs of a sabbatical or round-the-world vacation. 

If your spending is meager

At the other end, the problem might be soluble if your needs at retirement are quite modest.  Meager needs would require less saving to reach retirement, allowing you to spend more now and even take off from work for a period of time. 

Everyone else

If you’re spending is average, and you don’t have the fortune of a major capital influx, then you really need a good plan that plots out how you will pay off the debt, save money for the sabbatical or vacation, and still save and invest enough to meet your retirement needs.

Possible strategies

Obviously, one strategy would be to delay retirement.  This way you need to save and invest less now to fund your lifestyle when you do retire.  

Another strategy would be to commit to saving a great deal now and after the sabbatical or vacation.  This would mean serious cost cutting on expense so you can save more when you are earning.  

Using debt more is another strategy.  That is, you can’t do it all immediately, so you may have to live with the student loan debt longer than planned.  If you can keep saving for retirement, you may want to borrow to fund the sabbatical or vacation, with a plan of
paying it off afterwards.  

Cost-out your goals

How do you pick and implement the best strategy?  First, quantify your options.  You can calculate what you need to save for retirement.  This includes what you set aside in your 401(k) or 403(b) plan and any Roth IRA or SEP-IRAs. 

When you cost out saving for the sabbatical or vacation, you cannot count on the return you expect from retirement savings.  You have short time horizon and cannot take as much risk. 

Review your student loan debt to see the interest rate.  If it is low, you want to delay paying anyway.  See Let’s really talk about risks

Devising a plan – the goal and resource mash up!

Any planning problem can be solved; it just requires pushing around all the possible resources and variables so that you fit the square peg in around hole. 

You sort through the cost of the goals compared with the total you have decided to save for the goals.  If what you can save doesn’t allow you to meet your other goals and still take a full year off, then maybe you would have to settle for nine months, or a less expensive vacation.

Okay, now get going and good luck (and send us a postcard when you do go away).

When “free” is not free, when paying is worth it

“Quote relating to subject matter, search on:, Select the quote text and then hit the quotation button to create.” – Quote’s Author

Nothing on the internet is truly

Many sites are lead generation sites, and most social media websites track our every move to get paid.  If you any doubts, please read this article:  “Mark Zuckerberg, Let Me Pay for Facebook – ‘Free’ social networking sites cost more than we think.”

If you search financial planning and other sites on the web for retirement calculators, you will find many options.  See our prior post explaining why one line calculators can differ so much.

On of these websites provides “free” use of a gamified retirement calculator.  However, when you delve deeper (I read the company form ADV as of May, 2015), you learn that the website may receive compensation from vendors for referring users to financial products and solutions in order to fulfill action steps, such as lenders for a user who needs to refinance her mortgage.  The website receives a referral fee from the mortgage lender. The same for a rollover of a 401(k), a fee from Schwab, Fidelity or TD Ameritrade, or for life insurance, a fee from the insurance.

Furthermore, management of the website own a registered investment adviser and many are insurance sales people. 

Hardly sounds free – it’s a leadgen portal!

Websites like this are lead generation portals.  Compare to those “free” seminars on estate planning put on by insurance salesmen to sell life insurance and other products.

In contrast, there are good tools, for which you pay.  One example is the investment firm Betterment, which introduced a tool some time back that was available to its paying customers called “RetireGuide.”

The firm describes it as “a new planning tool, available for free to all Betterment customers, that helps investors work through scenarios, like …. RetireGuide provides sophisticated  retirement guidance that is easy to understand, always up-to-date, and simple to change as your life changes.  RetireGuide uses information you provide and the balances from your Betterment accounts, as well as assets outside of Betterment, to answer these questions. It also provides a seamless way to start saving more in a globally diversified portfolio of ETFs based on your retirement plan’s recommendations  … This planning tool merges an advice engine with a way to automatically save and invest in a diversified portfolio.”

RetireGuide looks very good, as a tool to help you keep with your retirement plan. 

Where are we at WokeMoney in all this?  We had designed tools and how to steps to help you create your own plan for free.  However, that website was never launched. 

What do you think of this?  Your comments would interest me, thanks. 


If you help support others, you need life insurance and more – really

If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance. 

-Suze Orman

She’s right:  If you help support others, examine your priories.

Purchasing adequate life insurance and doing your estate plan, viz. signing a will and creating a trust, are probably low on your list. They should be at the top.  Especially in a Pandemic.

Two good reasons that you should review and act:

I saw the confusion and pain wife had to address when she lost her husband, before he bought the life insurance he had promised to obtain, and had to help her kids adjust to the massive change of lifestyle as they sold their home and downsized because they could no longer afford what their dad, the chief income earner of their family, had provided them. If they had proceeds from his life insurance, they would have only been dealing with the
grief of losing him, not radical life changes as well.

I saw adult children deal with the probate process so they could be appointed administrators of their mom’s estate just to be able to access bank accounts, pay funeral expenses and then sell and distribute the remainder of her assets, making their own decisions in place of knowing what she would have wanted.

Sure, you hope the money spent on life insurance is a waste – because the earner lives on – but better to have the protection than add financial suffering on top of grieving!  Plan for those who may survive you!

As for signing a will, trust and other estate plan documents, please consult an attorney for help in determining what is necessary and appropriate. 

So please think again.

If you have not obtained life insurance to replace your earning power, which helps support your family, and if you have not executed a will, along with a trust, medical directive and other documents that may be appropriate, you are not just avoiding an inconvenient imposition on your time and the payment of premiums and fees, you are failing to properly think of the consequences of not acting and the impact that could have on your loved ones.


What is the AMT?

Rather than showing themselves to be an ally to the middle class by ending the AMT or repealing it for years to come, my Republican colleagues refused to include it in today’s legislation and America’s middle class will surely suffer that choice greatly.

-Ellen TauscherRead

No, it is not a dyslexic version of ATM!

Back when people could shelter almost 100% of their high income, Congress decided to make that more difficult by creating the alternative minimum tax (“AMT”).  This and other changes have made it difficult for the top 1% of taxpayers, people with income over $1 million, to go much below an average tax of 20%.  But, an AMT rate as high as 28% is still great if your marginal rate is 39%.

However, the AMT is sometimes called the “stealth tax” because it now affects many less wealthy taxpayers!

Why do you care?  Despite the title, you do not get to pick

You must pay the higher amount determined by the regular and AMT
tax calculations.  If you have to pay the AMT, you are paying almost a flat rate of 26% but it can be 28%, and you are losing the value of certain deductions, including state income taxes paid, certain mortgage interest and miscellaneous deductions, and having “preference” amounts added to AMT income, including incentive stock options and alternate depreciation schedules.  Data on 2012 income tax indicates that nearly every married taxpayer with income between $100,000 and $500,000 owed some AMT.  [This has changed since the tax laws changed in 2018.]

So what do you do?  Plan carefully

Make sure that efforts to reduce regular taxes do not push you into paying the AMT.  Here is one example: If you have a year with high ordinary income, you should pay your state income taxes during that calendar year, since you are less likely to be in the AMT, rather than waiting to pay in April of the next year, where a lower ordinary income means that you
will certainly be in the AMT.

(Note: some states impose an AMT as well.)

Good planning pays off

As in the example above, where preserving the deduction can be a very substantial savings
on your federal income taxes.

Should you Lease or Buy your next Car? It Depends

Any time you hear “always lease” or “always buy,” the “always” tells you the advice will probably never work for you – Steven

Are you better off leasing or buying a car?  The answer depends on many factors.

You want to evaluate the cost of having the car during the period you own or lease it.   That includes the down payment, loan payments and interest or lease payments, insurance, maintenance not covered by any maintenance agreement, repairs not covered by warranty or extended warranty, and gas.

When you buy a car, your total cost is reduced by what you get when you sell or trade it in.

When you lease a car, have lease payments and no trade value.

Note that the amounts you can deduct for business use also differ: you can depreciate a car you buy, and deduct financing charges, for the percent of business use, but only take lease payments on a car you lease for the percent of business use.

Quick guess:

If you want a new car every few years, leasing is probably better;

But if you typically own a car for six years or more, which would be at least two successive leases, then buying probably works better.

Contact me if you need more car-related advice!

Let’s really talk about risks

There is always risk involved. You can’t be a capitalist only when there are investment profits but then a socialist when you experience losses. 

-Cristina Kirchner

Only focusing on being “debt free” and having an “emergency fund” is like claiming that your favorite team won on defense alone, not needing any offense. 

(we are not talking about that kind of risk!)

Comprehensive financial planning uses cash management, debt, tax-planning, investing and insurance so you use all resources in the best way over time. 

In terms of a holistic plan, amassing cash is incomplete planning.  It deals very well with market risk, the volatility of the stock market (or any other capital market).  But it gets a zero in terms of dealing with the inflation rate risk (see notes risks below).  The after-tax return on cash is lower than the rate of inflation. 

What if you take a bit more risk and put money in bonds.  Now you added volatility risk and interest rate risk, but did dampen your inflation risk.  Next, you could add stocks.  Now you really addressed inflation well, but you also ramped up your volatility and increased your  liquidity risk.  You will need to diversify the stocks and the bonds, – you can’t just buy Apple stock or a short-term bond fund.  Yes, there is so much planning to do.

A good plan will design your cash management, debt and investment strategies based on your goals.  If you can fund all your goals, you need less return and can take less risk.  If you are far from your goals, you need to judiciously take on more risk. 

Okay, then, what if you need an enormous risk to reach your goals?  You can’t fully amp your investments without going so far beyond your risk tolerance so that you can’t sleep at night.  It would be better to take the goals down a notch.

Good planning

You need to cost out all your goals, then compare those costs to your resources to use them in the best way to achieve those goals.  And at the end of any plan, this caution should be added: 

The single most important risk to planning is a poorly defined or constantly changing strategy.  You must have a long-term approach to which you adhere over time regardless of the current favor of the particular strategy.  That will work, while chasing constantly changing tactics will not. 

P.S. – adhering includes monitoring and managing, as forgetting about it may not work well. 

So, evaluate  the risks that match your goals so you can plan well! 

…. and let us know if we can help!

Notes on risk:

1.  Specific and Non-specific market risk – buying a single stock versus buying the entire market is specific market risk; non-specific is the risk of a particular market.  You address these with diversification (cross-correlations among major asset types reduces volatility over the long-term without reducing returns) and asset allocation.

2.  Interest Rate Risk – is the inverse relation between the direction of interest rates and the value of a fixed-income asset as set by the market.

3.  Inflationary Risk – is the erosion of returns in terms of purchasing power due to inflation.

4.  Opportunity Cost Risk – is the failure to invest in assets producing the necessary returns because one chose instead to remain in cash.

5.  Liquidity Risk – is the risk that the investment chosen is one that cannot be liquidated easily before some event, such as the ultimate sale.


Should you “simplify your finances”? No, just gain control & understand your finances

Truth is something which can’t be told in a few words. Those who simplify the universe only reduce the expansion of its meaning.

-Anais Nin

After reading a recent article in Kiplinger’s Finance Magazine 
on simplifying your finances, I wondered if your personal finances can really be made simple.  Sure, many of us hope so ….

But, I am not sure that “simple” is best.


However, gaining control of your finances and a better understanding does make sense.

Here are some ways that help you gain control that may also “simplify” your life:

Cash management and Debt

Set up automatic payments with vendors so they use your bank or credit card, or set up payments using your bank website.

·       If the payments are regular, and of similar amounts, you save time and can plan on the withdrawals.

·      However, if you change banks, sorting and resetting auto-pay at the new bank can be a major headache. Similarly, if you change credit cards, you need to update information with all vendors.

You can also automate tracking of your spending by using websites like Mint or Personalcapital.  Or, you can use Quicken or QuickBooks software from Intuit to track your bank and credit card accounts.  You can download from your bank and credit card websites into the program and then review to analyze your cash flow and spending.

Setting up direct deposit for payroll into your checking is great.  You can also split part so it goes to savings or even have some go to your investment accounts.  You will then need to follow up to invest the cash that accumulates, but having money set aside saves it from being spent, and adds to your investments.


Kiplinger’s recommended consolidating retirement accounts to avoid low balance fees.  It also makes updating beneficiary designations easier.

While avoiding fees makes sense, am not sure that putting all investments into a single retirement account does.  You cannot do this if you have Roth and pre-tax accounts like a 401(k) plan, and you probably should not do it if you have contributory IRA and 401(k) accounts that are subject to different tax rules.

Kiplinger’s also recommended using one broker for your taxable accounts.  This makes more sense, in that you have a higher balance which should mean lower fees and more attention from the broker.  However, I prefer using exchange traded funds, or ETFs, and avoiding most broker fees, which means essentially no attention from a broker.

One article said that your investment plan should be to “sign up and forget it.”  While avoiding investment pitfalls like second-guessing yourself out of panic when a fund goes down is good, I do think you need to review and re-balance your investments once
a year.

Another article recommended using an “all in one” fund for investing.  Now, this really troubles me.  If your sole goal is retirement, then an age-targeted fund could make sense.  But, if you are saving for goals with different time horizons, this is a bad idea.

If you use an age-targeted fund, do your homework on the funds.  For example, if the fund plans to suddenly shift to bonds when you retire, that will not serve you well because you are likely to have several decades for which you will need the growth from stocks.

Protecting your information

Having a master password for access to all your other passwords reminds me of the joke about the student who repeatedly distilled his notes down, first to an outline, then to note cards, and finally to one word.  How did he do on the day of the exam?  He forgot the word.

Nonetheless, having passwords is clearly important so having a way to manage them is as well.  Check out this recent review of apps for managing your passwords PC Magazine Best Password Managers for 2015.

You can manage the passwords yourself by creating a document that you save as a PDF and then encrypt.  But don’t forget the password you used for the PDF!

Store files in one place

We did a post on using cloud storage when you do not need originals.  Here is another site to check out:  Shoeboxed

Credit cards

In addition to downloading transactions as noted above, you can track your credit score and credit history by using sites like Credit Karma

Estate planning

For insurance purposes, and for your estate plan, having a record of possessions, you can list all your property using sites like Know your stuff home inventory.

Conclusion? Too simple may be a bad result

Setting simplification as your primary goal risks distorting your finances. There are ways to gain better understanding of your finances that also make your finances simpler.

Use our website to improve your
financial literacy and if you get stuck, ask us questions!

Guidelines for Holiday Tips and Gifts

I never wanted Mary Poppins to be my nanny. I wanted to be her when I grew up. 

-Anita Diament

The holiday season is in full swing and with that comes gift giving and tipping!  

This year, many of us have more people to thank, and tipping is one way to respond.

While gift giving etiquette may be obvious in some instances, it can get less clear when considering gifts for people outside of your friends and family.  So, to help you navigate the season, we have put together a guide of suggested amounts for gifts and tips.  

We all have people in our lives that help us keep our families, homes and businesses on track and get through each day as we move forward throughout the year.  In many cases, the services they provide ensure we can go to work, have clean homes and stay fit, including caregivers, delivery, home maintenance, and personal care services: 

Caregivers (for kids, parents and pets, too!)

Caregivers for your children, parents and pets can be lifesavers.  They provide care, education, exercise, and attention to those you care about most.  This is the time of year to let them know how thankful you are for all that they do.  The amount of service they provide and the arrangement you have with them can dictate the appropriate gift level:

1.    Nanny/au pair – a week’s salary and a small gift;

2.    Daycare teachers – a $25-$70 gift;

3.    Home healthcare worker – a week to a month’s salary;

4.    Teacher – a small gift and a handmade card from
your child;

5.    Dog walker – depending on your walker’s schedule, you may want to gift a day’s pay or a full week’s pay; and

6. Dog groomer – half the cost to the full amount for the service.

If you contract any of these services through an agency, you may want to contact the agency to find out if they have a gift-giving policy in effect.  If the agency prohibits gifts, consider alternatives like making a donation to the agency or sending in homemade cookies to the office. Or sneak a Starbucks card into their stocking …

“Neither snow nor rain…”

Despite the weather, terrain or traffic, your mail carrier delivers your mail every day and your online purchases arrive on time and in good condition.  Let those who make those
deliveries know you’re grateful.  In deciding what and how much to give, consider the particular company’s gift giving restrictions:

1.    Mail carriers – are not prohibited from receiving cash gifts and gifts more than $20;

2.    FedEx – employees may accept gifts under $75,  though no cash or gift cards;

3.    UPS – workers are allowed to accept tips, but UPS discourages the practice; and

4.    Newspaper delivery – $10-$30 is standard. 

Home Maintenance:

Whether you live in a single family home or a large apartment building, it’s likely there is someone who services your home or property in some way. 

1.  Trash and recycling collectors – $10-$30, which you may want to mail directly to the collection company if you’re not home to hand deliver it;

2.    Doorman – $25-$100;

3.    Regular cleaning person – the cost of one visit;

4.    Landscapers/gardeners – $20-$50 per person or if you have just one person doing the work, the cost of one visit;

5.    Parking garage attendant – $10-$50; and

6.    Building’s handyman, superintendent and custodian – $20-$100.

If you have someone who always goes the extra mile, such as a handyman who’s prompt and efficient or a doorman who is quick to carry heavy packages for you, then a larger tip may be warranted. 

Personal Services:

It’s hard work keeping you fit, perfectly coiffed and beautiful, but recognizing the efforts of those who do is easy and may also buy you scheduling flexibility when you really need it.  In deciding whether to tip and how much, consider this:

1.    Hairdresser/manicurist – if you’re a frequent visitor, tip the cost of one visit.  If
you’re a less frequent customer, then $20.  However, if you tip generously through the year, you do not need to give an extra tip at the end of the year;

2.    Personal trainer – up to the cost of one  cost;

3.    Massage therapist – also cost of one visit; and

4.    Golf or tennis instructor or sax teacher – a thoughtful gift.

If you’re unable to tip or give a gift, a thoughtful thank you note will acknowledge the good work these people do for you throughout the year.  Another effective gesture of gratitude is to send a thank you note to the supervisors of the people who provide you with great  service throughout the year, letting them know how impressed you are with the service you receive.  

Good feedback is appreciated by both the supervisor

and the people who are helping you out. 

Make Customer Service Calls Work for You

Southwest Airlines is successful because the company understands it’s a customer service company. It also happens to be an airline. 

-Harvey Mackay

Afraid to make a call to customer service? 


Years ago, I read a compelling account of success in handling customer service issues and was transformed from the angry guy making threats to the customer rep’s new best friend.  My new attitude brought great results, like the time I dialed up Verizon Wireless about a malfunctioning cell phone (one I accidentally put through the wash cycle), they effectively paid me (via a dollar refund and free headsets) to replace it. 

Want to use this same magic? Here is how:

1.     Be Respectful:  Make them feel important and validated.  Ask them their name, if they did not give it, and use that in the conversation. 

2.     Show Gratitude: Thank them for what they’re doing. If they feel you appreciate their efforts, they’ll work harder for you.

3.     Recruit Them:  Use terms like “we” and clearly state your objective so you can turn the call into a mission, with the representative committed to helping you accomplish it. 

4.     Remain Calm:  Avoid trigger words, anger and any swearing.  Otherwise you risk losing the bond you created.  Maintain the position of being empowered to get what you, as the customer, deserve. 

5.     Communicate Your Determination:  Be clear that you are not going anywhere until your mission is accomplished.  Be clear that you are not taking any brush off.

6.     Escalate:  If you are not making progress, then escalate: ask to speak to a manager.  Many representatives are judged by the number of calls referred to managers or supervisors, so asking may prompt them to be more helpful.  

This approach takes practice (and patience).  

However, it is quite effective, so you are likely to see good results. Good luck!