Welcome to our Video and Audio Podcast Review of our Q 1 2020 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.
Click Here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
This, our lead financial planning article for the newsletter-  With the subject of inheritance and the taxability of it occurring multiple times in the most recent quarter, the idea for this article spawned.
After completing the initial article, a continuation article idea also occurred which made the second part of the inheritance subject matter about being separate property.
We hope you enjoyed both articles and this was our lead financial planning articles.
All about the Car
In another fun personal financial planning two – part article, long desired, but fearful of writing …this article discusses the car, should you buy or lease and how to do so. Again, a second article occurred at a chance meeting in an airplane with a former law officer watching me finish the first article on the airplane!
In doing the research for these articles we ran across a really cool car research site, and mentioned some great buying resources as well.
Recession Thwarted – Capital Market Thoughts
To ignore new evidence in our minds is silly even if it goes against the grain of what you may have been saying!
In this article we review a CFA speaker’s slide about lowering rates during a recession and his conclusion. Bottom line, we’ve not been a big fan of lowering rates during economic growth, but an inverted yield curve which is highly predictive of a coming recession, along with lowering of rates, according to the speaker and the enclosed chart leads to a thwarting of the recession.
We hope we are wrong on this one and the speaker is correct!

Reach back to last year’s taxes in savings you can do now
In this article we discuss the remaining tax savings ideas that we can do this year, that will help last year’s taxes-
The SEP – Simplified Employee Pension
HSA – for the Health Savings Account
IRA – An oldie but a Goodie if it’s available to you
Roth – While not a tax saver you can do it now for last year’s taxes
Itemized itemize itemize – With today’s high standard deductions you may not be able to itemize but we remind that it’s a good idea to stay in shape as it’s likely these itemize deductions may come back in the future
The FOMC (Federal Open Market Committee) led by Jerome Powell, quietly paused this week.
FOMC No Change
Mid-Week, the FOMC announced no change in their controlled short term interest rate.
We have been vocal about not lowering rates moving forward, to keep some gunpowder for the next recession.
After a market desired multiple small lowering of rates earlier this year, this week, the FOMC effectively did nothing, and did not disturb Capital Market Participants… finally.
They also made no future promises, again, with market blessings…
In a quest for postable animated charts (coming soon – these are REALLY fun) the following two charts grabbed attention on a Pre-Thanksgiving lighter week…. from our friends at Visual Capitalist.
Next week we will bring an animation chart to your inbox – again, they are really neat!
Interest Rates Since 1350
We crow frequently about Interest Rates, as they are very important.
Stepping back to see the forest for the trees…. this chart caught our eyes…
Location of Debt
From above, we see the long history of interest rates… below is the location
Pay particular attention to the color and the legend at the bottom of the chart as it is more important than the size of debt as focused on by the chart!
Welcome to our Video and Audio Podcast Review of our Q 4 2019 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.
Click Here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
With Mortgage rates moving lower, we discuss the major items to think of when refinancing your Mortgage.
Our most clever point is we like to have an 18 month payback for the costs when refinancing… this serves as a good barometer on when to refinance, irrespective of the size of your Mortgage.
Tariff Talk
It’s been going on for a long time
Trade Wars AKA Tariff talks have been around for a long time. This is not our first rodeo… notice how trade has been more efficient over time!
End of Year Tax Reminders
While there are a lot of reach back tax items i.e. Things we can do next year for this years taxes… there are many that have a firm year end deadline-
RMD – Required Minimum Distributions
Company Related Retirement plans i.e. 401k
Charitable Donations
529 and other education programs
We hope you enjoy … talk to you in ….. 2020 WOOOW !!!
Last Wednesday the FOMC (Federal Open Market Committee) led by Jerome Powell and attended by Dallas’ own Robert Kaplan, lowered rates by .25% to 1.75 to 2.00% Range…
FOMC Lowers rates once again
With a ton of information coming at you (Newsletter is full of interest rate talk) we will keep this short…
The FOMC lowered rates a second time, making for an unofficial change in this cycle from raising to lowering of rates….
While the chart above may seem extreme … let’s look longer term….
It’s ok… a .25% move is not that much, but we really would like room to lower when the inevitable recession comes…. who knows, if the tariff talks get fixed, raising of rates may be in the cards…. wouldn’t that be an interesting turn of events… hand tight, we have your back!
Today is a wet Friday, enjoy your weekend and grab that umbrella.
As mentioned Friday, with an inverted yield curve, mostly caused by longer term rates being lower than short, an opportunity MAY have been created….
We are going to put this in the Newsletter with more details, so please do not take this as an “ok” to run out and start refinancing, there likely is no hurry AND its a big decision…..
Mortgage Rates are Low Again
This chart is the Average 30 year rate across the US –
Here are a few points and rules we like to think about when considering a refinance:
Think 18 months cost break even – We like to have the saving from the refinance cover the cost of the refinance within 18 months – i.e. Person with $30k mortgage at 5% probably would not need to refinance to 4%, but a $3 million mortgage may be smart to refinance from 4.25% to 4% or the like, if the numbers work out.
Resetting Term – Remember if you reset your term, you are extending the treadmill – You may consider paying extra after the refinance to keep on prior term if desired.
Planning on staying – It makes no sense what so ever to refinance if you are planning on moving in the next couple of years – life’s curve balls always happen, but if you are planning to move, likely pass on the refinance.
30 Year Fixed Mortgage is our favorite as you can accelerate your term by paying extra, but a 15 year had its merits too, especially if the rate is greatly different – we are not big fans of Variable rate loans.
Closing Costs- keep low as possible- This will make your payback faster, easier and also give you the opportunity to refinance again in the future without angst.
Buying down points to lower rates – We are not fans of buying down the rate – Ultimately this increases your closing costs and extends the break even analysis from above – If you did on the last mortgage, review where you are and make sure you are out of your break even period before refinancing again.
Ancillary fees – It’s a complicated transaction and there are costs associated with it, deservingly so, but try to keep costs down so as to once again keep your break even period short.
PMI – Private Mortgage Insurance – Stay away from this if at all possible. This insurance is a cost to you and does nothing for you as the owner/loan holder.
Deductibility of cost – Some costs may be deductible, consider costs that are deductible for taxes over costs that are not – With changing tax laws, expect confusion on this point.
Avoid teasers – If you google mortgage rates you will get some outlandish offers, if it sounds too good to be true, it is, there is always a catch. Don’t bite on something that is way different than the others.
Careful with Hard Credit Reports – Once you lock in on a decision, avoid running multiple Hard/thorough credit reports (these are needed for mortgages) as duplicate checks will lower your credit score.
Maybe an over crow of the Inverted Yield curve … but take a look at it’s predictive nature for a recession – darkened areas are recessions:
In case (very likely) you are looking at this post on your cell … at the far right of the above chart, the line dips below zero – this means that that 90 day FOMC/rate is higher than the 10 year treasury – YEP that’s inverted and as far as we can see … a predictor of a recession –
DON’T JUMP YET!
Recessions come in all forms, and by definition is two consecutive quarters of negative GDP (Gross Domestic Production) –
Remember how slow our recovery has been? This is that last 70 years of expansions, the weakly line on the lower right is our current – yea, its longer, but slower and weaker than all of the others, maybe even the “Runt” recovery compared to all the others …. from our Friends and JPMorgan as of 9-1-19!
Can a car that is going slow, really crash hard? Hmmmm…
All of this has also created an opportunity — tease, tease, tease….
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.
Q 1 2020 Extended (12 Page) Newsletter Video Audio Podcast Review By John Kvale
Welcome to our Video and Audio Podcast Review of our Q 1 2020 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.
Click Here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
Let’s get going!
All New Pictures, Intro and Exit Music !
Q 1 2020 Newsletter
Click for PDF/Printable Version
Is Inheritance Taxable ?
This, our lead financial planning article for the newsletter-  With the subject of inheritance and the taxability of it occurring multiple times in the most recent quarter, the idea for this article spawned.
After completing the initial article, a continuation article idea also occurred which made the second part of the inheritance subject matter about being separate property.
We hope you enjoyed both articles and this was our lead financial planning articles.
All about the Car
In another fun personal financial planning two – part article, long desired, but fearful of writing …this article discusses the car, should you buy or lease and how to do so. Again, a second article occurred at a chance meeting in an airplane with a former law officer watching me finish the first article on the airplane!
In doing the research for these articles we ran across a really cool car research site, and mentioned some great buying resources as well.
Recession Thwarted – Capital Market Thoughts
To ignore new evidence in our minds is silly even if it goes against the grain of what you may have been saying!
In this article we review a CFA speaker’s slide about lowering rates during a recession and his conclusion. Bottom line, we’ve not been a big fan of lowering rates during economic growth, but an inverted yield curve which is highly predictive of a coming recession, along with lowering of rates, according to the speaker and the enclosed chart leads to a thwarting of the recession.
We hope we are wrong on this one and the speaker is correct!

Reach back to last year’s taxes in savings you can do now
In this article we discuss the remaining tax savings ideas that we can do this year, that will help last year’s taxes-
We hope you enjoy … talk to you in the Spring !!!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
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Posted in Audio, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Newsletters, Podcast, Political, Tax Related, Video
Tagged car, D Magazine, Inheritance, Inheritance Planning, Interest Rates, Kent Smetters, Reach Back Tax, Sirius Satellite, tax