A Week of Thoughts September 8, 2018

Do you have replacement coverage on your homeowner’s insurance? If not, you may end up with a big bill if you have complete rebuild.

Are you investing in your professional education and advancement? Consider that your individual human capital today will become your future financial capital.

How much do your investments cost you each year? Many investments sold by brokers and within retirement plans (like 401ks and 403bs) often are several times more expensive than other available investments. There is really no good reason that the expense ratio for a mutual fund or Exchange Traded Fund (ETF) invested in US stocks should be more than .25% per year. One can find investments costing .05% and less.

Are your investments diversified and include investments from around the world? Consider that the US is only about 50% of the world’s total stock markets. Don’t miss out on global opportunities. It is possible with just 3-4 different mutual funds to be invested globally in over 15,000 different stocks.

In 2018, state and local taxes are limited to $10,000 for itemizing on federal income taxes. This limitation will push many people into the new standard deductions of $12K for Singles, $18K for Head of Households and $24K for those married and filing joint. There is also an add on of $1300 for those married over age 64 or blind. For unmarried taxpayers add on is $1600.

Making the commitment to create estate planning documents can be daunting. I know first hand. My motivation to get it done is my son. I want to make sure I lay the foundation for his physical and financial care should something unexpected happen to me. The estate planning documents allow me to make my wishes legally known about guardianship and how to help him with whatever monies I leave him. It is hard for me to think of something more important in my personal legacy.

Financial record keeping is so important. Even more important is letting someone else know where the records are located and how to access them. In today’s world, fewer and fewer folks are using paper and pen methods of running their financial lives. That means loved ones need to know how to getting into our phones, tablets, and computers to access accounts for even simple things like paying the electric bill. Do you have someone that can step in your shoes and knows how to help run your financial life if you are incapacitated?


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