29) The Burden of Wealth

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t's so tough to manage money.  Forget that you have to earn it, now what do you do?  It's easy to spend it, but you worked so hard to earn it, are you sure you just want to piddle it away?  So many people resent the way they have to earn their money; it's a shame to have to also resent managing it.

            Managing your money means having to count it.

Did you collect the correct amount (paychecks, invoicing, reimbursements, refunds, rebates)?  Where do you keep your records?  Do you reconcile?  Do you save 5-20% of it?  Do you budget & plan what you spend?  Do you manage the timing of when money comes in and goes out (cash flow)?   Do you manage your taxes, investing, and credit, and appropriately insure against loss?

           

            People hate preparing their taxes, they dislike having to pay bills, they resent the bank paying so little interest, they don't understand the stock market, they have disdain for life insurance, and they’re scared of credit balances.  Not to mention the challenges related to bankruptcy, disability, divorce, entrepreneurship, estate planning, and unemployment.

            Even when you think it's going to be fun (e.g. buying new things, raises, bonuses, Inheritances, lottery winnings), it can become so difficult that people avoid dealing with it.  Then you find bonuses are cut in half due to taxes, you're laid off right after you moved and bought a big home, or you spend your lottery winnings down to where you were within five years of winning it.

If another is involved, it can cause fights, ends of friendships, and divorce.

Failing to plan is planning to fail.

            Managing money may not be easy, but anything worth having is worth working for (e.g. a home you can call your own, nice clothes, nice things, vacations, college, retirement).  People can learn other languages, and other alphabets including shorthand, music, computer, math and science; they can learn how to operate technology, but they are often blocked when it comes to money.  Often, the stage is set during childhood.  But you're a grown-up now, and it's time to take responsibility for your own finances.

            Learning makes it easier, if not palatable and, even fun and rewarding.  Learning is the first step.  There are many resources out there.  And Simons Financial Network is producing short videos for our website (www.WomenAndMoney.tv).

            After you learn a little about how money works, and acquire some skills (like driving a car), it’s almost time to start driving - but you should know where you’re going (i.e. goal setting).  And it helps to have a plan (i.e. map).  And it’s prudent and smart to make sure the tank is filled, the engine is working well, and the tires are inflated.  Then it’s time to actually drive.

You can delegate managing your money - pay someone to help you or to do parts of it for you.  That's why there are financial planners, accountants, attorneys, stockbroker, insurance agents, mortgage brokers, and real estate agents out there.  Financial Planners tend to cover the broad spectrum of these fields.

            However, delegate, don't abdicate the responsibility; it's your money.  And it's foolish to not stay involved.

            Jesus Saves, Moses invests; what do you do?

28) Iditarod

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oal-Setting.  Bruce Mitchell is a family man.  Bruce Mitchell is an athlete.  Bruce Mitchell has Diabetes.

He runs the Iditarod, “The Last Great Race on Earth®”.  The Alaskan, two week, 975-mile dog sled race starts in Anchorage, and ends at the Bering Sea in Nome (where the Welcome sign reads, “There's No Place like Nome”).

            In 2008, he ran it in under 12 days.  That was his goal, and it put him in the top half (46 out of 96) of the diverse group of male and female Mushers.  Day and night, snow, and steady 8-9° F temperatures.  He had to care for his own health and that of his 12+ dogs.

           

            As of 2008, in the 15 years that he's had Diabetes, he has run 14 marathons, 3 Iron Man Triathlons, and 2 Iditarods.

            He does it to demonstrate his belief that a disease does not have to confine you from pursuing a goal so long as you have the ability to dream.

            Bruce Mitchell isn't asking kids to run an Iditarod, just to set goals and dream.

            What are your goals and dreams?

27) Fun with Taxes! (AKA Constructing a Tax Return)

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onstructing a Tax Return is an interesting exercise.

It is a customized financial exercise that feels good to finish, making it an emotional one as well.  It’s a moral exercise, and it’s an intellectual one.  It's also an insightful snapshot of a period in your life.

            Some of us enjoy putting the pieces together to get view of the picture of your life, just like constructing a jigsaw puzzle on a lazy summer night.

            Taxes provide for public services, and the redistribution of wealth (from those that have, to those considered to have not).

            Congress initially creates the tax laws, and on behalf of the federal government, the Internal Revenue Service (IRS) implements the law.

            The law is complicated, it’s fascinating, it’s frustrating, and it’s full of minutiae, detail and mathematical formulae.  It‘s open to interpretation by taxpayers and practitioners, and can be challenged in different federal courts, although the Treasury Department and the IRS provide guidance.

            A Return, like a house, is constructed from the bottom, up.  Bottom pages feed information up to middle pages, and middle pages, eventually to the top two pages of some version of the Form 1040.

            The system is also complicated and there are many 'tests' a Return must pass to make sure you can do certain things (e.g. deduction amounts, deductible retirement plan contributions, minimum taxes, i.e. the Alternative Minimum Tax, etc.).

            Records must be kept to support your claims, in case a tax authority ever asks for proof - after all, the US Tax System, is a voluntary system and an honor system - one that many people selfishly abuse.

            There are generally two sets of rules of which to be aware: those that trigger the need to file a Return (e.g. electronic or paper), and those that govern the settlement of accounts (i.e. money).

            Generally, a single person must file when their income is $9,500 or more (unless they're filing to get a refund, are due credits, or are self-employed, or have capital gains/losses).

            The average American Taxpayer pays about a third of their income to federal, state & local income taxes.  Therefore, tax planning is one of the best investments you can make.  Few stocks and investments can consistently earn you 34%.

            Good tax planning involves:

ü  Good record keeping

ü  Engaging a qualified tax/financial professional who can patiently and clearly explain things, identify issues & solutions, and integrate taxes with your other financial planning

ü  Education

ü  Solid tax preparation

ü  Smart tax planning

            Former Associate Supreme Court Justice George Sutherland said, "The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted."

            Who's your Trusted Family Advisor©?

26) What Financial Planning Has Done for Me

As a Professional:

Ø  Allowed me to make a living

Ø  Allowed me to do something I like

Ø  Allowed me to help others and make a difference in their lives

Ø  Allowed me to be around other educated, honorable, balanced, successful professionals

Ø  Allowed me to be an entrepreneur

Ø  Allowed me to build/maintain self-confidence, self-esteem, and self-respect

Ø  Taught me professional & business skills

Ø  Allowed me to be my own boss

Ø  Allowed me to make my own schedule

Ø  Allowed me to work from remote locations for extended periods (in a bathing suit)

Ø  Allowed me to practice what I learned in business school

Ø  Allowed me to be creative

Ø  Allowed me to choose my clients and co-workers

Ø  Allowed me to 'fire' clients who misbehave

Ø  Taught me to delegate

As a Consumer:

ü  Teaches me about goals & objectives

ü  Helps me to assess my personal values

ü  Teaches me life skills

ü  Helps me to be healthy (e.g. mental, physical, nutrition, etc.)

ü  Helps me to be balanced (e.g. body-mind & spirit, work/play, eat/exercise, rest/sleep, live for today/plan for tomorrow)

ü  Allows me self respect and self-confidence

ü  Allows me to construct, prepare and file my taxes

ü  Allows me to manage my investments effectively

ü  Allows me to manage my insurances effectively

ü  Allows me to manage my credit effectively

ü  Allows me to protect my assets

ü  Allows me a feeling of security in light of the unknown

ü  Allows me to get married

ü  Allows me to, financially, easily get divorced

ü  Helps me to achieve/attain more of what I want out of life by planning & managing my finances effectively, and time well

ü  Helps me manage my budget

ü  Helps me to ask for help

ü  Taught me to integrate different parts of my life

ü  Allows me to maintain my body

ü  Allows me to maintain my sanity and keep my existence in perspective

ü  Allows me to maintain my sense of humor

ü  Allows me to maintain my home

ü  Allows me to maintain my 1978 Firebird w/Cragers and a working 8-Track

ü  Allows me to travel/live in other places on a budget

ü  Allows me to socialize with good friends and family

ü  Allows me to take advantage of New York on a budget (e.g. culture, food)

ü  Allows me to achieve life goals

ü  Allows me to pursue diverse interests

ü  Allows me to find peace, joy, contentment & happiness

ü  Allows me to help others

ü  Allows me to enjoy my life

What’s financial planning done for you?

25) The Golden Rule

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ultiple Choice (each correct answer is worth either a bar of fictitious latinum or your soul’s salvation (fictitious?):  The Golden Rule States:

A)  Do unto others, as you would have them do unto you.

B)  The one with the gold makes the rules.

C)  Both A) & B)

D)  None of the Above

            Where did you learn the Golden Rule?

            Do you practice the Golden Rule?

            Animal Farm's Golden Rule says that some people are more equal than others.  The practice of our economic and tax systems agree.  Does that mean that both Communism and Capitalism are corrupt?  Are people corrupt?  Are people simply human?

            That’s why we're seeing the masses rise up for freedom and fairness: Occupy Wall St., Middle East government-toppling, etc.

            But who ever said life would be fair?!

            Actually, our parents, our children's stories, and our school teachers taught us about right & wrong, good & bad, and fair & unfair.  However, I guess, that doesn’t make it so.

            That's where we learned to play nice, be nice, polite, say thank you, and share.  We learned about fairness and doing good for others, and treating them the way we wish to be treated.  We learned it wasn't if you win or lose, but you how you play the game.

            However, we know that that isn’t true for everyone.  There are plenty of business people and sports figures out there, who must win.  Derek Jeeter, the New York Yankees’ Captain has said so on TV.  Many people look up to them as heroes.  It isn’t just competitiveness; some must win at any cost.  Some people cheat, whether in business or marriage.  Some go further and actually believe in revenge (e.g. Donald Trump has said so on TV).

So what happened?  Life?  Observation?  Society?  Darwinism?  Anthropology?  Human nature?  Greed?  Lust for power?  Lust?  Capitalism?  Survival of the fittest?

Does crime actually pay?!  Aside from legalities, what are we supposed to think and exhibit about moral values?

            Do we give the next person a hand up, or do we climb over them on the corporate ladder?

            Are we not evolving?  Are we evolving at a snail's pace?

            You can get help for navigating the economic and tax systems, and focusing your moral values, and be golden, from a Certified Financial Planner.  They are some of the most honorable, ethical individuals that exist.  Certified Financial Planners can bring wealth measured not just in dollars, but also in human terms such as security, loyalty, trust, and the ability to sleep well at night.  (You already know about the bulls, the bears, the hogs and the SWANs, or you must read the prior blogs).

            Financial Planners and Personal Business Managers: that's what the rich and famous do.  Why not you?

24) 'Being Motivated by Goals vs. Fears'

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epression has been a national epidemic for more than a decade.  It is usually chemical in nature but affects our mind and spirit.

            Many doctors believe in the body-mind connection, in other words that it's all interrelated.

            I grew up in the YMCA system whose logo is the body, mind, spirit triangle, so I have a strong bent towards developing and balancing all three.

            I have found that the body is often the part least exercised.  And when it is, it is often exercised poorly - everything from incorrect techniques, to intensities that are too low to adequately work the musculoskeletal or the cardiovascular systems.  In turn, this leads to weight gain, depression, anxiety, the inability to breathe well, the inability to lift groceries without back pain, the loss of bone mass/density, and the development, often in women, of osteoporosis.  An exercise regimen also has three components: strength training, cardiovascular exercise and stretching.

            When one learns how to exercise, one can also learn to enjoy it, if only marginally.  Then, the body enjoys it independently, building things like muscle memory, increased metabolism, better sleep, and, then, when ignored, cries  for exercise.  You feel good when the endorphins secrete, and the blood pumps, and you feel alive when your muscles and organs are exercised.

            I have also found that the mind needs exercise - not just mental exercise to prevent dementia, but repetitive training in healthy thought.  It’s not ‘practice makes perfect’, because you might be practicing wrong; it’s ‘perfect practice makes perfect’.

            Being a retired Aquatics Director, I have always been aware of how many swimmers exhibit poor technique that prevent them from achieving a healthy workout.  While performing any long-distance sport, you generally analyze your technique and correct or improve it; you’re constantly monitoring the system and the plan.  Like the body, the brain must be constantly taught and reminded to think healthily.

            If you put garbage into a computer, the human body or the mind, you get garbage out.  If you remember from the 1980s with the advent of personal computers: GIGO (Garbage In, Garbage Out).

            Whatever you focus on, good or bad, will be what you attract.

            So don't you want to attract good things?  Goals are usually good things.  Some may argue, that if you have no goals, you lower the chances of disappointment.  But how then, can you ever achieve anything you want, much less, on purpose, versus by accident.  Most people have goals, or at least dreams.

            We must focus on goals for our happiness.

            If we focus on fears, like losing a job, getting arrested, never finding love, not losing weight, the computer breaking, or never getting ahead, then that's what you'll probably achieve.

            If we focus on running a mile, or eating better (less, more healthy, the right time of the day), or saving money, or learning a skill, or getting a new job, then that’s what you’ll probably accomplish.

            You must remind yourself daily, if not more often, of your goals.  It will help you rise above your fears.  If not, you could become scared to cross a street, or sleep with the lights off, or have trouble swallowing because you think others are looking at you.

            Keep pictures of your goals, share your dreams with supportive others - dreams are free - so dream big.  Develop objectives, the bite-size pieces that help you to achieve a goal.  Use affirmations, where you repeat to yourself your state of being in the present  as if you have already attained them (e.g. I feel so happy and healthy about my thin, strong body!’).

            Financial Planning can help you organize and prioritize your goals & objectives, identify your values, establish target dates, and then make a life plan for systematically achieving your life goals - just like a workout regiment - but maybe easier because you can delegate part of it!

            We help people set goals & objectives, analyze their values, make plans and then implement, monitor and manage their plans.  We're there when the going gets tough.  (And we're there to help celebrate.)

            Where are you?

23) 'Tax Season, Wabbit Season, Lame Duck Season, FIRE!'

O n February 2nd, Staten Island Chuck (AKA Charles G. Hogg) didn't see his shadow, but Punxsutawney Phil did.  So is spring six weeks away?             We do know that at least four major Washington D.C. factors will affect taxes this year - after all, as Ben Franklin said, "the only things certain in life are death and taxes".             The four factors are: 1) February: Payroll Tax Cut (a version of which passed this week) 2) Spring: The Supreme Court's Ruling on the Constitutionality of Health Care Reform 3) November: The Presidential Election 4) November/December: The Renewal/Expiration of the Bush-era Tax Cuts (renewal of key portions are unlikely)             This could mean higher income taxes for some, higher capital gains taxes on investment profits for all (possibly further hindering or stalling the stock market), and a reversion to higher estate taxes upon death (reducing inheritances).             Tax planning, estate planning, and investment harvesting should be considered this year.  You don't want to be Daffy Duck arguing with Bugs while Elmer's got the gun pointed at your face.             Who's doing your tax planning, Acme Products?             Wile E. Coyote,             Super-Genius