Archive for the ‘Wes Moss’ Category

Wes Moss: Think you know your tax rate? Think again

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Do you know how much you really pay in taxes? I’m talking about all your taxes: income, capital gains, property and sales taxes. Most people I ask tell me they pay about 30 percent. That may sound high, but it turns out to be right. And part of it has to do with living in Georgia.

When I gauge a client’s approximate overall effective tax rate, I often go to moneychimp.com. Check it out. You may be surprised to see how low your “effective” federal tax rate is.

But it’s probably not your actual tax rate. Most tax calculators don’t show all the areas that take a hefty chunk out of your paycheck. FICA and state income taxes are two of the big eaters at the paycheck buffet. Here’s what I mean:

Let’s say the Joneses earn $110,000 a year. …

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Wes Moss: How to tell your life story — and secrets

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Most of us make grocery lists and weekend to-do lists. Many of us have recently written down our New Year’s resolutions. But too few of us make what is likely the most important list of our lives.

At our office, we call it a “life book,” giving it the gravitas it deserves. When we mention it to clients, they’re often flabbergasted they haven’t created something so easy and essential.

My partner in my firm, Mitch Reiner, was on CNN recently, discussing four financial must-dos for 2013. Number two on his list was creating a life book. It’s a notebook — or just a piece of paper – that contains pertinent information a loved one would need to know to take care of you (or your family) in case of a serious accident, illness, emergency or death.

To see …

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Wes Moss on the fiscal cliff: The good, bad and the so-so

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Last week’s “fiscal cliff” drama may seem old news by now. You watched or read about the back and forth in Congress and maybe even studied the main points our lawmakers approved.

But here’s a scorecard on what the deal means for those of us trying to keep our family or business finances in check or wanting to plan our investments. Let’s start with the good stuff (depending on your point of view, of course):

The (mostly) positives

– The bottom line is Congress finally passed legislation to avoid massive tax hikes and deep government spending cuts, which almost certainly would have triggered another recession.

– An estimated 90 percent of the “new tax revenue” to be collected by our government this year will come from families who earn $1 …

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Wes Moss: Seek good health, wealth in new year

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Like many of you, I spent some of the holiday season traveling to see and spend time with family. That’s easier said than done when it involves three small children age 5 and under.

Between airplane delays, crowded parking lots and long rental car lines, I ended up this past week in snow-covered Michigan, stuck in a house with my in-laws (God bless them), where every family member took turns with a stomach bug, in addition to a double ear infection for my 11-month-old. How relaxing!

As the children and adults finally recovered, it reminded me of a study from the University of Michigan I read earlier in the year about the importance of health in our quest for financial stability. Here are some staggering statistics that tell the story:

– Mean net …

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Wes Moss: How dividends can affect share price

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Here’s a common question I get in my role as a financial advisor who advocates income investing, which includes the purchase of dividend-paying stocks: Why do the prices of such shares seem to fall by the exact amount of the dividend they just paid me?

As one client put it: “I had a $100 stock and it paid me $1 this quarter. But on the day I received my $1 in cash, the share price went down to $99. Isn’t that company just giving me my own money back?”

No;  the company actually is passing on profits to you. And you are gaining something.

Here’s how it works: On the day the dividend is issued, an investor receives his or her $1, which represents the person’s share of the company’s earnings for that quarter. The company itself has likely …

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Wes Moss: Rising tax rates and dividend stocks

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

I’m a big believer in income investing, a strategy that includes buying stocks that pay dividends.

How will such stocks be affected if the dividend tax rate goes up in the new year?

First, some history. In 2003 Congress lowered the dividend tax rate, which was supposed to be great for dividend-paying stocks.  So why didn’t dividend stocks surge past everything else?  Because Congress simultaneously lowered the capital gains rate, which made investing in small-caps stocks, which typically don’t pay dividends, more attractive to investors seeking capital appreciation.

This, in part, lowered the demand for dividend-paying stocks, even at their new lower tax rate.

This time around we could see the opposite happen. Yes, higher dividend tax rates would …

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Wes Moss: Plan to be the ‘happiest retiree on the block’

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

My registered investment advisory firm (RIA) manages about $1 billion in client assets. That’s like having two Queen Elizabeths on the client list at about $500 million each. Or four Mitt Romneys with about $250 million apiece. Or 10 Roger Federers at around $100 million each.

Those are pretty impressive names and numbers. But I’ll stick with my firm’s 1,000 clients, who average about $1 million in investments. None of these people are famous. Very few would be considered extremely wealthy. But they are among what I would consider the “richest retirees on the block.”

These folks are doing exactly what they want in retirement:

• Traveling overseas a couple times a year.

• Spending time with their grandchildren.

• Going back and forth …

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Wes Moss: Little known laws of money (part 1)

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

The economy is like the weather: Everybody talks about it, but nobody can change it.

Or can we?

This thing we call the economy is actually an accumulation of trillions of marketplace decisions and interactions. Each of us has a minuscule impact on the economy via our personal decisions about investing, spending and how we choose to live and work.

Those individual actions help shape trends that in turn steer the economy.

Here are some interesting facts about trends and activity in the US economy today:

Household formation: Historically, one percent of Americans start a new household every year (out of a total 110 million people) which is equivalent to a little over 1 million new households per year. Since the financial crisis began, that figure has fallen …

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Wes Moss: Keep market drops in perspective

(Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.)

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

It’s a classic cartoon scene: The loopy scientist looks through his telescope and sees a huge meteor hurtling toward Earth. He panics and sets all sorts of insanity in motion before realizing he was looking though the wrong end of the telescope — at a speck of dust.

Investors are playing the role of that nutty astronomer these days, based on feedback from my clients and calls to my radio show. We are experiencing the biggest, small correction in the history of the stock market because investor reaction to this dip is three times what it should be. The market is down approximately 6 percent and people are reacting as if it’s down 18 percent.

I call this the “3X Election Correction.” I’m getting more calls now than I did during the first and …

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Wes Moss: A checklist for inheriting an IRA

(Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.)

“Of two things you can be certain, death and taxes.”  – Benjamin Franklin

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Sadly, those two unavoidables often present themselves at the same time.

If your spouse owned an IRA at the time of his or her death, you will need to make some decisions. Depending on the situation and relationship of those involved, there are a myriad ways to handle the situation.

First off, don’t feel the need to rush out and find something to invest the proceeds into. You will have plenty of time for that once things have settled down and your mind has cleared. But these simple guidelines will help make the process easier for you to understand at the outset.

If you are a spouse inheriting an IRA, and …

– Your spouse died before taking Required Minimum Distributions …

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