Tuesday, April 17, 2018

Tax Day Freebies and Discounts

Many companies are offering freebies or discounts on this year's tax deadline due date, April 17, 2018.   To find them, search for Tax Day Freebies in [your city].   Freebies and discounts vary by location.

One Freebie I am considering is Kona Ice: one free shaved ice.  Kona trucks are supposed to be at post offices and tax preparation locations nationally.

Disclosure:  No compensation was received for this post.

For more on Ideas You Can Use, check back every  Tuesday  for a new segment.

This is not financial or tax  advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Saturday, April 14, 2018

Risky Business

"It's hard to make predictions, especially about the future."  ~ Yogi Berra

Who knows where the market is headed.  Certainly not me.  The market is extremely volatile and schizophrenic.  To me, there are three strategies one can take in this uncertain market.


  1. Buy and Hold.  As one of my favorite bosses said, "This too shall pass."    Since the market inevitable goes up, just buy stocks and good companies and hang on to them.   Eventually, this strategy will pay off.
  2. Trade the Dips and Rallies.  It seems to me that the market declines when President Trump makes a controversial tweet and then recovers in subsequent days when the position is softened.   Simply, buy when a decline occurs from a Trump tweet and sell a few days later after the recovery.
  3. Sell Everything and Wait.  I know some people who have done exactly that. They expect an imminent crash of the market.
At this point, I'm leaning towards a blend of #1 and #2: buy core stocks and hold and add peripheral holdings (often of the same stocks) and sell into the rallies and then buy the dips.  Of course, I don't know what the future holds and if #3 is the right strategy, I will end up seeing a sharp decline in our holdings.


For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Thursday, March 08, 2018

First Job

My daughter got her first job.  She will be refereeing for the local youth soccer league.   It's kind of a gig job, but it pays well, about $20/hour.   Each week the coordinator asks which people are available to ref.   Those that respond will get assigned 1 to 2 games.   If she has other commitments or we're on vacation, she can just not respond.   Pretty nice for a first job.

For more on Crossing Generations, check back Thursdays for a new segment.

This is not financial or work advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Tuesday, March 06, 2018

Tomorrow May Be Another Buying Opportunity

With the resignation of Chief Economic Advisor Gary Cohn, the stock futures have fallen about 1%.   Tomorrow may be another buying opportunity for us.   I probably will avoid buying at the open and wait to see if the markets continue to fall or immediately bounce back.

For more on  Ideas You Can Use , check back Tuesdays  for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Monday, March 05, 2018

Waiting, Not Chasing

"Patience is a virtue." ~ old adage

Today's market advance prevented us from acquiring additional positions in our stock and ETFs.  I purposely didn't chase them and left the buy orders at  couple percent below Friday's closing price.

I expect that I will get more buying opportunities in the next month as volatility is now the norm.   It seems that market changes of greater than 1% are the new normal.   Waiting for the 1% drops will allow me to make purchases from our buy list at lower prices.

For more on Strategies and Plans, check back Mondays  for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Sunday, March 04, 2018

Trying a Robo Investment Account

A new investment option I am trying is a Robo Investment account at one of our brokerages.  This account will invest only in ETFs and charge no account fees.  The only fees we will pay are the fees built into the EFTs that are used.   The investment strategy we will be using has a .28% expense ratio for the ETFs.

At this time, I have opened but not yet funded the account.   My plan is to wait for a further decline in the market before funding the account.

My plan is to hold three different types of investment accounts to determine our long term strategy:

  • Actively managed accounts.   We pay a 0.9 to 1.25% wrap fee for actively managed accounts.  The strategies are: Growth, Deep Value, Income with Growth, and Dividend Growth.  The Robo account falls into this category at a much lower expense ratio.
  • Passive Index.   I have several accounts that each have the benchmark indices of the actively managed accounts.  Over time, I will decide whether to keep the managed accounts or the index accounts for the long term.
  • Personal investment strategies.  These are REIT, dividend, and trading/speculation strategies.  I will likely keep doing these on a small scale even after choosing between actively managed accounts and passive indices for the majority of our investments.  Unless, of course, I consistently perform better than these options :-) 
I will likely hold all three types of investment accounts through at least one economic cycle to understand overall performance and volatility.   After that, I plan to start moving funds to the preferred types of investment accounts.


For more on New Beginnings, check back every Sunday for a new segment.

This is not financial  or investment advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Saturday, March 03, 2018

Taking Advantage of Volatility

"The sky is falling!" ~ Chicken Little

For me, the volatility of the past month has enable us to buy into market index ETFs and REITs at lower (a.k.a discount) prices.   I've been scaling in by purchasing small lots of ETFs and REITs on my buy since.   There is no cost to do this since one brokerage we use has given us 100 free trades a month, we don't pay any commission on our small lot trades.

At this point, I feel the market correction is similar to the taper tantrum in May 2013 when then Fed Chair Ben Bernanke talked about raising rates.  The market reacted negatively, but soon recovered.   Fed Chair Jerome Powell and President Trump seem to have also talked down the market with their points of view on interest rates and trade tariffs. 

So I am cautiously optimistic and buying on the dips.  If the market should reach new highs, I will also sell into the new rally.  Hopefully, that is the outcome that will occur.

For more on Reflections and Musings, check back Saturdays for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Sunday, February 25, 2018

How I Might Pay Zero Federal Income Tax Under the New Tax Law

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury...for nobody owes any public duty to pay more than the law demands." ~ Judge Learned Hand

Being a tax geek, I've been evaluating how the Tax Cuts and Jobs Act of 2017 affects our 2018 tax situation.  It appears that the new tax brackets, higher standard deduction and higher child tax credit will allow us to earn more without any federal tax liability, if we choose to use them to that advantage.

Here's how we might pay zero federal income tax in 2018.

First as background, I am married and have two children under 17, which qualifies us for the $2000/child tax credit.

Scenario 1

Make $57,333.33 regular earnings or less.    After subtracting the $24,000 standard deduction, $33,333.33 is our taxable income.   At a 12% tax rate, the tax is $4000, which is wiped out by the $4000 child tax credit.  Zero federal income taxes is the result.

Scenario 2

Make $71,666.66 or less through a pass through entity, such as an LLC, partnership or S-corp.  20% of pass through income can be deducted, which equals $57,333.33.    After subtracting the $24,000 standard deduction, $33,333.33 is our taxable income.   At a 12% tax rate, the tax is $4000, which is wiped out by the $4000 child tax credit.  Zero federal income taxes is our tax liability.

Scenario 3

Make $24,000 regular earnings, 103,866.66 dividends and long term capital gains.  After deducting the $24000, our taxable income is $103,866.66.   The first $77,200 is taxed at a 0% tax rate.  The remaining $26,666.67 capital gains is taxed at 15%, equal to $4000, which is offset by the $4000 child tax credit.  Again, zero federal income taxes.

Scenario 4

Make $57,333.33 regular earnings and up to $43866.67 dividends and long term capital gains.  
 After subtracting the $24,000 standard deduction, $33,333.33 is our regular taxable income.   At a 12% tax rate, the tax is $4000, which is wiped out by the $4000 child tax credit.  The remaining dividends and long term capital gains is below the $77,200 threshold for a 0% capital gains tax rate.

We won't be completely free of income taxes, since we live in a state with income taxes.   But is still be nice to pay no federal income tax if we can qualify for one of the above scenarios.

For more on New Beginnings, check back Sundays for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Saturday, February 24, 2018

Financial Armageddon...Not

"It really does now look like President Donald J. Trump. And markets are plunging. When might we expect them to recover? A first-pass answer is never."~ Paul Krugman, November 9, 2016

Here is the full editorial in the New York Times.


As I recall, the markets recovered by the open on November 9, 2016.  Since then, the stock market has reached record highs, advancing by 20+% in 2017.  


Glad I didn't listen and react.


When might we expect Mr. Krugman to publicly admit his error?  A first-pass answer is never :-)   


For more on Reflections and Musings, check back Saturday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Friday, February 23, 2018

FORO

Fear Of Running Out (FORO) may be a financial challenge that we face should we reach our 90s.  By then, we will be retired at least 41 years which is longer than we have worked.  Unlike our parent and their siblings, neither of us have a pension on which we can depend.   Unfortunately, by 90 we probably won't have the wherewithal to solve the problem of running out funds.  So I am working on it right now.

The strategy I am developing is to create a reliable sustainable stream of income:  a pension like payment, without a pension.   Our approach is a three pronged approach:

  • Real Estate -  We own part of a commercial real estate property.   As disclosure, we are accidental landlords, since I inherited ownership from my parents.  However, I have learned the benefits for being a landlord.    The property is paid off and fully rented with multi-year leases.   In addition, the partnership pays a management company to manage the property.   Currently this yields about 25% of our annual expenses.

    I like the idea of rental real estate.  However, I have no interest in acquiring other properties, given the hands on involvement that is needed.  So we are increasing our real estate exposure through the purchase of REITs.  Hopefully, we can boost the yield to cover 33% of our annual expenses.
  • Dividend and Interest -   At one time, I was planning to have dividends and interest cover 50% of our expenses.   Based on where we are currently, I expect a 33% coverage of expenses is more likely.  My plan to get closer to the target is to execute an NUA this year of my company stock, which pays a 3% dividend.    We will purchase other dividend stock or CDs to cover the balance.
  • Annuity -  We will depend on principal or Social Security to cover the remaining 33%.   In order to do so, we will need to wait until I am 70 to qualify for maximum Social Security payments.
  • Bonus - Since we are invested in the stock market, there is a chance that we will get capital gains from our investments.  However, we are not counting on this, and if it happens, we will consider it a bonus.
So that's our plan.  Of course, there are no guarantees that it will work.   As Dwight Eisenhower once said, "Plans are useless, but planning is indispensable."   And so we will proceed with our plan, until circumstances require us to adjust.


For more on Reaping the Rewards, check back  Fridays for a new segment.

This is not financial or retirement  advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC