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Using 529 Plans for Estate Planning

October 6, 2016 by Finance Gourmet

Estate planning is one of those topics that seems to be widely misunderstood. First, there are different kinds of estate planning. The most necessary kind for everyone is simply having a will of some sort. It really doesn’t have to be anything fancy, especially if you don’t have a lot of assets. There are a lot of forms out there you can fill in. While that is definitely NOT the way to go if you have anything complicated or fancy, or if you have a lot of assets, they are pretty much fine for the average person. The second type of estate planning is financial estate planning, that is trying to avoid paying estate taxes. This actually applies only to a small percentage of people. Will I Have to Pay Estate Taxes? Nope. That was easy, huh? It’s a trick of semantics. Estate taxes are the only taxes that you will never have to pay. That’s because your heirs, or more specifically, your estate, actually pay estate taxes after you are dead, so you don’t pay them. Even if you inherit something, you don’t pay the taxes, the estate does, before the assets become yours, so technically, no person ever …

What Is a Roth IRA?

June 11, 2019October 3, 2016 by Finance Gourmet

What is a Roth IRA? Is a Roth IRA the best way to save for my retirement? Even the basics in financial planning aren’t always so basic. The basics of IRA plans, is one of those times. IRA stands for Individual Retirement Account. Tthat means it is an account for an individual to use to save for retirement. As an enticement to save for your own retirement, the government gives you tax advantages for using an IRA for retirement planning. As a way to keep you from pulling money out for things besides retirement, there is a penalty if you use IRA money for something else. Roth IRA versus Traditional IRA With a traditional IRA, or just IRA, you get a deduction from your taxes today, unless your income is too high. You also get tax deferred growth on the money in the account. When you start taking the money out, you owe taxes on both the contribution and the gains. If you earn too much money to take the tax deduction on your contributions, then you do not have to pay taxes on those funds again when you withdraw them. With a Roth IRA, you get no tax deduction …

Is There a Market Bubble?

September 29, 2016 by Finance Gourmet

Recently, an increasing number of pundits (and a smaller number of actual stock market analysts) have begun using the word, “bubble,” to describe the U.S. stock market. That chatter has picked up even more lately, when Donald Trump began saying that the stock market is a bubble propped up by the Federal Reserve keeping interest rates low. But, is the stock market really in a bubble? What is a stock market bubble, anyway? How can you tell if there is a stock market bubble? What Is a Stock Market Bubble Really? Let’s start with the fact that you should NEVER listen to a politician (including candidates) when they talk about the stock market or the economy. They are always campaigning, even in off years, and getting people to think the right thing outweighs any allegiance to the truth. In the case of Donald Trump, he is campaigning on the economy being bad, but a rising stock market is shooting holes in that claim. By saying it’s a bubble, he’s trying to imply that it isn’t a REAL sign of economic growth, and that the economy actually is bad. But, beyond politicians, how can we tell if a bubble is real? …

Twitter Buyout Coming?

September 23, 2016 by Finance Gourmet

Today’s big news is rumors of a Twitter buyout. According to “sources,” whatever that means, Twitter is close to receiving a formal takeover offer. This makes Twitter the latest so-called business with a huge internet presents, but no way to make money, to be snapped up by another company that thinks that they know what Twitter doesn’t: how to make money. Twitter is, of course, a huge internet icon. Unlike Tumblr before, which never made a penny, and was inexplicably snapped up by Yahoo. Yahoo came to find out that Tumblr not making any money may not have been by choice. The company never reached anything even close to the modest $100 million goal set for it, and was eventually written down by Yahoo as essentially worth nothing, despite having paid $1 billion for it. See my Credit Check Total review. Which brings us to Twitter. Twitter does make some money. Twitter’s second quarter filing showed revenue of $602 million for the quarter, but a loss of $107 million. A little math shows that it costs over $700 million just to run Twitter each quarter. And, that may be where other companies think they can do better. Although Yahoo was naive to …

Real Work From Home Jobs Amazon

September 21, 2016 by Finance Gourmet

A surprising number of people come to this website looking for information on real, non-scam, work from home jobs. Unfortunately, many of them leave discouraged, because there are so many work from home scams out there. That does not mean that there are no work from home jobs, there are actually tons of real work at home jobs, they are frequently referred to as telecommuting. What are almost always scams, are jobs that only require a few hours, no skills, not much work, and have high pay. Honest Work From Home Job Opportunity I happened to come across a news story about Amazon hiring work from home customer service employees for the holiday season. These are seasonal jobs, so they may just be temporary, but they are real telecommuting jobs from a real company. If you look at the job’s posting, you can see how to spot the difference between a real job offer, and a fake work from home job. First up, note the pay. This is no “Make Six-Figures Working From Home!” job posting. The pay is $10 per hour. Whether that is enough or not, is a personal decision, but it is realistic. An entry-level customer service position …

What Is Fiduciary Responsibility?

September 19, 2016 by Finance Gourmet

Fiduciary responsibility, sometimes referenced as fiduciary duty, is the best term in finance, with the possible exception of fungible. So, what is fiduciary responsibility, and do you need someone with a fiduciary duty to help with your finances? Fiduciary is a fancy word for the concept of doing what is in the best interest of someone, typically a client or a trustee. Most people are shocked to find out that most financial planners, financial advisors, stock brokers, and the like do not have a fiduciary duty to their clients. In other words, the guy you have managing all of your money is not required, by law, regulation, or contract to act in your best interests. Rather, they typically have a much more easier standard called suitability. Suitability means that the investments or other recommendations they make are merely suitable for someone like you, not the best for you. So, if it isn’t wildly inappropriate for you to be investing in Apple stock, then they can recommend Apple stock, even if they feel like another investment would be better. Any attempt to ever make any of these financial professionals required to be fiduciaries is met with immediate and ravenous attack from …

Apple Stock iPhone 7

September 15, 2016 by Finance Gourmet

I write more about Apple stock than I ever mean to, but people just love to talk to me about it, so here we go. New iPhone New Apple Stock Moves Apple stock is one of those stocks that gets a lot of attention, and action, from people who otherwise don’t invest in individual stocks much at all. That is, among your own friends, chances are that there are people who own Apple stock, and nothing else other than some company stock, or maybe some ETFs or mutual funds. These investors are, not surprisingly, often moved by news, other than any sort of analysis. In addition to these investors, there are a lot of very experienced investors with Apple stock in their portfolio, and they both watch the fundamentals, AND try to guess how others will reaction to Apple stock. All of this adds up to a stock that likes to move A LOT based on any single news event or earnings report. For the last several months, Apple stock has not done well. There were concerns that the company could no longer innovate, and the momentum left behind by Steve Jobs had finally run out. But, last week, Apple …

Fast Retirement Math

September 12, 2016 by Finance Gourmet

Want to make a quickie calculation about how much money you’ll need for retirement? I’ve talked before how, for most people, knowing “your number,” or whatever you want to call it isn’t really all that helpful. The simple reason is that most people cannot save as much for retirement as they should be, so they should just be saving as much as they can. Simple. But, what if you are getting ready to retire, or if you just want to know how much retirement income you have stored away? Quick Retirement Income Calculation The quickest way to calculate your current retirement income is to take the amount of money you have saved, and multiply it by 4%. That’s your current “safe” annual income in retirement. As in, if you have $1 million stashed away in your 401k plan, you can count on $40,000 per year in income. Sucks, doesn’t it? Before we get to some info that might help you feel better, let’s take a look at where the 4% comes from. Check out my review of Credit Karma here. A chimp with a hammer can get you 4% income without ever running you out of principal. In fact, at …

Interest Rate Hike in September?

September 9, 2016 by Finance Gourmet

Here we go again. Last year, the Federal Reserve, desperate to get away from zero interest rates, raised its target benchmark interest rate from 0% to 0.25%. They proudly crowed about fighting inflation and predicted several rate hikes in 2016. Then, January happened. If you don’t remember, China’s economy had a freak out before the country’s masters could get it under control. Understandably, with the instability, the Fed backed off of its next interest rate hike, but still predicted more this year. And, then… and then… With the days of the year running out, the Fed, again desperate to raise interest rates despite inflation being nowhere near the supposed “target,” was planning a Summer increase but… The jobs report didn’t cooperate. And then… The jobs report didn’t cooperate. Oh, and there is more news of the economy being very, very sluggish. It almost seems as if the economy just isn’t that strong and stable, and that inflation is low, and that the smart thing to do is just leave interest rates alone. But, nobody wants to do that. They want to be HAWKS. Hawks fight inflation fast and hard, even when it isn’t there. And so, here we are. This …