Give a kid/Young Adult a Roth if they Meet the restrictions
By blending a couple of Tax laws and having at least $6500 in earnings, a young adult may be just the right recipient of a gift, but to a Roth Retirement plan rather than for spending….
Gifts up to $17k per person are free of gift/estate tax issues – blend that with at least the Roth amount of earnings and a donation directly to a Roth can be a super gift, all of which we discuss here in our January post!
Purchase a New Home last Year – Check that Homestead Exemption
In one of our annual reminders, in this post we once again remind those that purchase a new home last year, that if they are in the home as of January 1 in most/many cases, you may be eligible for a Homestead Deduction aka – Property tax savings….
We also updated a large but not complete slew of state related adjustments – thanks Wikipedia!
Capital Market Comments
Watch the Contra Rally – They can be very deceiving!
With a suddenly happy faced Capital Market, we remind ourselves and everyone else Contra Rallies can seem very soothing, but often times their main result is to have you let your guard down and draw one into a sudden overconfident situation… NO biting…
Have a Great Day, Talk to You at the End of February!
RMD’s (Required Minimum Distributions) not taken can be taxed at 50%
In this reminder post (somewhat meant to frighten) we notify everyone, PLEASE do not delay in your RMD’s as the IRS is readily funded with new staff and the penalty is 50% of the amount not taken if they so desire….
Also with a continued bottle neck lack of workers …. many financial firms are on a “Best Effort” processing as of December 1! Gone are the last minute days of RMD’s act now!
Capital Market Comments
Rate Increase Discussions from “First Time in Long Time Conference”
Happily attending the first conference in over four years, the topic of interest rates came up, especially since a .75% rate increase occurred DURING the conference….
In this post, a chance meeting with Liz Ann Saunders … long time macro market strategist… we share our common thoughts on the fact the FOMC (Federal Open Market Committee) led by Powell are steadfast in their goals to slow the economy i.e. Slow consumption …. no matter what is takes…
Fort the record while short term rates are holding fast at a higher level, longer term rates have slowed their increases…. More on this as it plays out….
Have a Great Day, Talk to You at the End of December – Wow That Came Fast!
Fastest Interest Rate Increase EVER – That’s a long time1
Our friends at Visual Capitalist are at it again with a superb chart we have been watching for, here in this post we highlight the following chart of just how fast this interest rate increase has been – fastest ever that is
Recall this is a TEMPORAY headwind to Fixed income instruments, that show up in greater magnitude due to the FOMC’s aggressiveness…
Have a Great Day, Talk to You at the End of October!
Ben Hunt on Narratives – Reminder Late Cycle Headlines are Usually the Worst
In case you missed our pre-Newsletter Post here or you missed the actual Newsletter post here, we really wanted to re-iterate our Neat Ben Hunt coverage of Narratives, especially with them being so dramatic as we near the end of the slowing cycle… hoping not to beat a dead horse…
Just a reminder once again, take heed if you find yourself being dramatically influenced suddenly… you may have hit a Narrative, accidental or purposefully….
Another super reminder
Why am I reading this, and why am I reading this now?
Capital Market Comments
Federal Reserve Marches on with Higher Rates – All about the Speed!
With a thicker line on the chart, finally, hopefully you can spy the massive speed at which this round of rate increases have occurred….
With the cover of a late entering data in the form of Owners Equivalent Rent in the CPI (Consumer Price Index) the FOMC (Federal Open Market Committee) has ripped rates higher …
Recall this is a TEMPORAY headwind to Fixed income instruments, that show up in greater magnitude due to the FOMC’s aggressiveness…
Have a Great Day, Talk to You at the End of October!
Check that 401k Run Rate – Are we hitting our contribution goals?
Here in this post we remind everyone now is a good time to check the run rate for your 401k contributions….
The reason now is a good time is we have time to make up any shortcomings, should they be discovered…
Bloated Inventories – Wall Street Woes = Main Street Savings
With large public companies fessing up that they have accidentally over inventoried and will be slashing prices to move said bloats….
Now may be a good time for a MANDATORY purchase….
As we mentioned in our post here, we have done some spiffing up of the office in conjunction with our new lease signing… Maybe too many people took our post to heart…. options are greatly reduced on some of our updates…yikes
Capital Market Comments
Hill Street Blues Reminder – Let’s be Careful Out there
Along with contra bounces comes a narrative that usually gets some traction…
Sure enough, this bouncing narrative was the Jerome Powell was already Pivoting to a slower hand (Economically not important as the cards have been dealt- digressing) …
Jerome Powell announced in his last weekend speech …. not only NO PIVOT but get ready for some Pain….Wow….
Care to guess when the announcement occurred?
Not to worry we are most definitely …… Being Careful Out there!
Have a Great Day, Talk to You at the End of September!
In our final fun “Back to Basics” review we discuss Tax PLANNING….
From the post:
Coincidentally, the most important part of Tax Planning is the second word in the subject, Planning!
As we individual or corporate tax payers traverse the tax year, it’s important to take note of unusual events that may be occurring. We’re certainly not saying you have to worry about this every minute of the day, but should you have an unusual increase in income, or decrease in income, this should be thought about before the end of the year for your tax planning.
Later in the post we discuss the key items in reviewing your return as well….. in step by step format!
Legacy Health Coverages
After running into several situations of legacy health care options for long time former employees… Here in this post we outline the possibilities of bridge Health Coverage from legacy companies and how fantastic of an option this can be…
In almost every situation, the key is these plans are not easily discovered. In order to find out if you have an option, it’s best to dig out contact information from HR of your old employer and reach out to them directly.
This is an expense to your former employer, so it would be expected not to receive multiple information regarding such a plan, but if available it could greatly help in bridging the gap for Medicare should we be in the situation of needing coverage before age 65.
Capital Market Comments
Bond Market turns Upside Down – The R Word
After the second negative GDP print … see next note of Fed’s Pickle…. the bond market really began to price in the R Word…. Here in this post we discuss the inversion of long bonds to short and their meaning…
The Fed’s Pickle
In this post, BEFORE the actual GDP announcement, we discussed the Fed’s pickle, with a hot economy (CPI inflation holding tight) BUT an economy that is slowing …..even qualifying as the R Word now – Recession!
From the BLS release after our post :
Q2 2022 (Adv)
-0.9%
Q1 2022 (3rd)
-1.6%
Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter. The smaller decrease in the second quarter primarily reflected an upturn in exports and a smaller decrease in federal government spending.
The definition of recession is negative two quarters GDP….
Have a Great Day, Talk to You at the End of August!
Back to Basics Series – Investing – KISS (Keep it simple silly)
In our continued fun “Back To Basics” Series here we discuss Investing our next to last in the series … and just Keeping it Simple in doing so….
From the post:
While many analysis dig so deep into investments that it makes your eyes glaze over, there are really two important parts of investing. KISS – Keep is simple silly
1. Save as much as you possibly can, and s early as you can.
2. Make sure your allocation above is such that during rough rainy times, a.k.a. slowdown/recession you do not eject and sell. Our human nature of fight or flight will take you out of your investment portfolio at exactly the wrong time if you are over allocated to risky investments.
A true, made as succinct story of a mom having multiple increasing offers of her teenage seniors late model car after being told it was totaled caught a nerve….
We received comments from across the country, many of folks we do not even know, but chimed in to give their two cents worth….
Maybe slightly controversial …. for the record we try to stay away from too much drama as there is enough roaming around the airwaves, but we could just not resist this true story!
Trust but verify those used car offers!
Capital Market Comments
Atlanta Fed Predicts Slowdown – The R Word
Literally in the last week of the quarter, out pops an updated research report from the Atlanta Federal Reserve called their GDP Nowcast…
After holding strong at a 1% Q2 2022 GDP estimate for some time, new data entered into their model dropped the estimate WAY down to -2.1% for their most recent estimate…. see far right green line of the graph….
If correct, this means the US is officially in a recession already!
We will talk much more on this soon, but for the record we were very surprised at much of the Wall Street Reaction to this report, most notably interest rates, which went down dramatically!
Back to Basics Series – Estate Planning – No Fears of Fancy Terminology
In our continued fun “Back To Basics” Series here we discuss Estate Planning…
From the post:
Rather than go into the complexities of all of the documents, keeping with our “Back to Basics” theme, we are going to go into what you need to think about to easily complete all of your Estate Documents. Don’t worry about the fancy legal and financial terms, if you can answer the following few questions, your Estate Documents can be easily completed …
The hardest part of doing an Estate Plan is just starting…. Go ahead and read this post if you have been procrastinating its not hare once you start!
Lump Sum Offer Reminder
After running into an unusual offer from a Pension Buy Out, we reminded ourselves these generally come in Waves….
Trust But Verify, offers can be wildly in accurate!
Capital Market Comments
Look Forward, Not Back
In this early month post here, we discuss Jerome Powell’s 180 turn from stimulus to brake and in particular as it relates to interest rates…
Then again in a similar post an update on Interest Rates….
While counter intuitive, as the FOMC/Jerome Powell raise interest rates, historically interest rates eventually fall as the Brake action kicks in and slows the economy
In our continued fun “Back To Basics” Series here we discuss Educational Funding…
Here is one very important item to remember from the post:
Did you notice we put Retirement Planning BEFORE Education planning? Do you recall in Part 3 in Debt Planning we said one of the few good debts are educational related debts ….We of course are not advocating Student debt/loans… but they are available in abundance and again not a bad debt. There are not retirement planning loans…. just saying!
Proxy Vote Reminder
In this post we remind you to please reach out if you have fallen off the list for us to proxy vote for you!
If you are getting those pesky Proxy Notices (some can be small books- oh the trees that are destroyed- digressing) reach out to us, we not only vote the Proxies for you, but we get one single notice for everyone, and Jen has done an excellent job in getting a great deal of those electronically…. Did we say how Green this is?
Capital Market Comments
The Slowdown is Here
We first started speaking of the slowdown in our Q 1 2022 Newsletter here in our “Anatomy of a Slowdown” main aricle actually released in December of 2021….
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
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January 2023 – YES Already One Month Down – Financial Planning and Capital Market Review – Roth Donation – Homestead – Contra Rally reminder – By John Kvale CFA, CFP
Hello and Welcome to our January 2023 … YEP 2023 !!! Financial Planning and Capital Market Update!
If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!
Newbies –
We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!
Hope you enjoy!
New Laptop – Looks Like the Old One – But not so much!
January 2023 Video – Note New Intro and Theme Music
YouTube
Financial Planning Tip(s)
Give a kid/Young Adult a Roth if they Meet the restrictions
By blending a couple of Tax laws and having at least $6500 in earnings, a young adult may be just the right recipient of a gift, but to a Roth Retirement plan rather than for spending….
Gifts up to $17k per person are free of gift/estate tax issues – blend that with at least the Roth amount of earnings and a donation directly to a Roth can be a super gift, all of which we discuss here in our January post!
Purchase a New Home last Year – Check that Homestead Exemption
In one of our annual reminders, in this post we once again remind those that purchase a new home last year, that if they are in the home as of January 1 in most/many cases, you may be eligible for a Homestead Deduction aka – Property tax savings….
We also updated a large but not complete slew of state related adjustments – thanks Wikipedia!
Capital Market Comments
Watch the Contra Rally – They can be very deceiving!
With a suddenly happy faced Capital Market, we remind ourselves and everyone else Contra Rallies can seem very soothing, but often times their main result is to have you let your guard down and draw one into a sudden overconfident situation… NO biting…
Have a Great Day, Talk to You at the End of February!
John A. Kvale CFA, CFP
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Posted in Audio, FOMC, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Retirement Planning, Video
Tagged Contra bounces, Contra Rally, Homestead, Homestead Property, John Kvale, Monthly Review, Roth, Roth Donation, Roth Gift