Perhaps the most interesting part of personal finance, and especially retirement planning, is investing (which, of course, isn't actually interesting at all to most people). Most people, when the topic of financial planning or advising come up, think of choosing and managing investments before they think of life insurance or budgeting or tax-efficiency. This is completely understandable. Among other reasons we so often think of investing first ...Read More
Way To Wealth
Way To Wealth
I like Dave Ramsey, I really do. If we were to make a short list of the most influential people in the world of personal finance in the last 50ish years he'd likely be in the top 5 and definitely in the top 10. Honestly, he has positively impacted a staggering number of lives and we should all be thankful for the work he's done.
With all that being said, there are areas of his "guidance" that are truly cringe-worthy ...
There are many ways to build wealth, some of them easy, some accidental, most require a lot of hard work and patience, many of the ways are worth it in the end. For all the ways to build wealth, there are also many wealth destroyers. Many of them are self-inflicted, some are not though, such as expenses, bad luck, and one of the two guarantees in life ... taxes. Though few will ever be able to completely (and legally) avoid taxes, there are ways that we can legally limit them. Some of those tactics need to be thought of years, even decades, in advance. One of these ways to limit taxation is choosing where, as in what type of account, to save and invest.
HSAs are simply awesome. They allow for tax savings that literally no other account type can boast. For that reason, it is a general rule that if you have access to save in one you should make nearly every effort to max it out.
With all that being said, there are other things to address regarding HSAs beyond just trying to put money into them....Read More
This week the House and the Senate both passed what is largely being hailed - for better or worse - as the biggest change in tax law since Reagan was in office, the Tax Cuts and Jobs Act (TCJA). There is no shortage of analysis, articles, op-eds, etc. in regards to this bill, and for good reason, as it will literally and directly impact almost every single person and company in the country.
It seems like I've been asked a lot lately - by clients, friends, colleagues, etc. - "What do you do? How do you save your money?" It's a good question, not because what I do is gospel and should be copied by all but because a.) it's a good thing, generally, to be transparent; especially when I ask others to be transparent with me and b.) it's a good thing to be kept in check, so I'm glad to have been asked.
So, I got to thinking, "I should really tell people what I do." This is important as those who know me know I can be a bit strong in my opinions regarding the importance of saving and the importance of saving intelligently and wisely, so I better be doing it myself! Additionally, there's the old saying about how the cobbler's kids go shoeless - in that the cobbler, who makes shoes for other people, largely ignores the practice for his own family. This is probably the case in too many professional's lives but I hope it never will be in mine. So here's what I'm doing now to make sure that's not the case.
Did you know that the financial cost of raising a child is estimated to be approximately $14k per year in the midwest, per this handy tool? If this number were to remain steady, the total cost to get a kid out of the house is $252,000!
...saving for retirement in any of the available options is about taxes, or at least choosing to save in one vehicle over another is about taxes. H.S.A.'s are the most tax-efficient of them all. And so this is is one of those items in financial planning that you can take to the bank. It's not a gray issue. If you have access to an H.S.A. you should absolutely seek to max it out, almost before putting money anywhere else....Read More
John and Jane Doe came to Thinking Wealth (DeBoer Financial) as a referral in the late spring of 2017, seeking help on a very narrowly focused topic: Jane’s student loan situation. Specifically, she had (and still does have) roughly $145k of student loan debt, all of which was incurred in a graduate program. John and Jane just weren’t sure what route they should go in setting up either a repayment plan and/or whether they could get those loans forgiven somehow. They had done some research but the rules and options were, understandably, a bit overwhelming for them...Read More