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Smart Money Monthly
(502) 426-0000 ∙ www.Roberts.cpa October 2024 11 Points to a Clearer Financial Future
SCAN OUR QR CODE TO LEARN MORE!
Did you know our team also offers financial planning services? It would be nearly impossible not to do so. Tax planning and financial planning are two sides of the same coin, each providing valuable insight into a person’s financial future. When working with clients, our team looks at 11 financial data points, examining each one for improvement. Once these 11 points are in sync, you can make informed decisions about your future, which allows you to be better prepared for whatever may come your way. It’s not an exact science, but it can provide clarity and guidance to help you and your family achieve your financial goals. In celebration of Financial Planning Month, I’m encouraging our clients to either get started with or re-assess their financial plans. Simply scan the QR code in this newsletter and fill out a short questionnaire. That questionnaire will allow our team to complete an analysis of your financial situation and set you on the path toward a clearer financial future.
The goal is to have a higher savings rate, especially when you’re younger, so as your earning power increases, your options are more diverse. One way we analyze the health of your financial plan is by examining this rate and your savings options. For example, many people know to save money each month for an emergency fund, but you can save in other ways and for other goals you might not have on your radar. Finding your ideal savings rate can create a strong foundation for your future. Debt Rate The opposite of a savings rate is your debt rate. This is the percentage of debt you owe each month, including debts such as credit card payments, mortgages, car payments, student loan debt, and more. As you get closer to retirement, the goal is to have the lowest debt rate possible so you can live the life you always planned for without allocating any of your fixed income to debt. Debt rates can feel overwhelming, especially for those who are just starting out by buying a house and having a family. However, understanding your debt rate provides the most accurate picture of your options. Plus, we can examine your debt alongside your savings options. This allows us to get a full understanding of your financial situation and your goals. Tax Rate This is where our two worlds collide: taxes and financial planning. Your tax rate is an essential evaluation tool in financial planning because it can help us prevent you from overpaying taxes, which allows you to save more and pay down debts more quickly. To find each individual’s tax rate, we divide the annual total taxes by their total personal income. The annual total fluctuates a bit each year, of course, but with the exception of your mortgage, it’s likely that your tax rate will be the largest expense you have. So, by examining this rate
and potential ways to lower it, you can funnel that leftover money toward planning for your future. You work hard to earn your money, so shouldn’t it work in your favor, too? Scan the QR code in this newsletter, and let’s get started on your financial plan. —Kevin Roberts
If you want to learn more, I’ve outlined three points we examine below. Each of our 11 points is important to your financial plan, but these three are a great place to start. Savings Rate Your savings rate is the percentage of money you save each month for the future. This includes contributions to 401(k)s, 529 plans for your children’s education, mutual funds, savings accounts, and other forms of saving.
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interest debt, build that fund to cover 3–6 months of expenses. Stash it in a high-yield savings account so it will keep working for you while you SMART SACRIFICES Mastering Milestones on the Road to Riches
People who struggle financially cite some common reasons: low pay, credit card debt, high housing costs, inflation, too much retail therapy, etc. Few realize that by setting goals and making the sacrifices required to achieve them, they could join the ranks of those who live comfortably with ample savings. Here are five proven steps for making your money work for you. Pay off high-interest debt.
pursue other goals. Invest your savings.
Start investing any new savings for higher returns. Avoid speculative plays such as cryptocurrency or individual stocks. Instead, do some research on index funds, exchange-traded funds, bonds, or certificates of deposit with solid track records. Increase your earnings. If you don’t have money, you must work to get it. It may not be fair that some people work three or four jobs to meet their goals, but it’s better than staying stuck. You also may have to invest in gaining new skills to increase your income. Take charge. Clinging to a victim mentality is self-defeating. Thinking positively isn’t enough to make you rich, but it will open up new opportunities you couldn’t otherwise have imagined and help you stick to your goals. Once you have mastered these secrets of the rich, start working toward your own milestones. The lifelong rewards will be more than worth the effort!
You must stop the bleeding from costly credit card debt. One of the best strategies is the avalanche method, which entails paying off your highest-interest debt first to save the most money on interest. Another method, the snowball approach, requires paying off the smallest debt first, then redirecting that money to pay off the next largest debt. This method saves less money in interest but offers more immediate gratification. Save up an emergency fund. If you can, set aside $2,000 as a safety net immediately. After paying off any high-
Chadwick Boseman's Tragic Oversight
THE IMPORTANCE OF A WILL One certainty awaits us all — the inevitability of our own mortality. Yet, despite this universal truth, many people, even those in their prime, neglect to plan for the distribution of their assets after they're gone. The case of Chadwick Boseman, the beloved "Black Panther" star, serves as a poignant reminder of the importance of having a will or trust in place. The Tragic Tale of Chadwick Boseman Boseman's untimely passing in 2020 at the age of 43 caught the world by surprise. The actor had been quietly battling stage III colon cancer for four years, a battle he ultimately lost. Tragically, Boseman had not set up a trust or will, leaving his estate to be divided through the court- supervised probate process. The Probate Pitfalls In California, where Boseman lived, intestacy laws dictate that the probate court must decide the distribution of the deceased's assets. Boseman's widow petitioned the court to become the estate's representative, allowing her to allocate his inheritance evenly between herself and Boseman's parents. However, without a trust in place, the government claimed a staggering $1.5 million, or a third of his net worth, If the estate of a high-profile celebrity like Chadwick Boseman can be so significantly impacted by the lack of a will or trust, imagine the consequences for everyday individuals. All the effort and planning put into securing your family's future can be undone instantly if you fail to have the appropriate legal documents in place. in legal fees and taxes. The Lesson for Us All
A Proactive Approach to Estate Planning Establishing a will or trust is a simple yet crucial step in ensuring your assets are distributed according to your wishes and that your loved ones are cared for in your absence. By taking the time to consult with an estate planning attorney, you can ensure your legacy is preserved and your family's financial future is secure. The untimely passing of Chadwick Boseman serves as a sobering reminder that life is fragile and unpredictable. Take the time to plan for the inevitable so you can provide your loved ones with the peace of mind and financial security they deserve, even in the face of life's most profound challenges. Don't wait until it's too late — start planning for your future today.
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Delicious Ice Cream Cake
TAX HACKS Insider Tips to Slash Your Company's Tax Bill As we approach the end of the year, it's time for businesses to start thinking about their tax strategy. While the tax code can be complex, several underutilized tax breaks can provide substantial savings for corporations and small businesses. Take Advantage of the R&D Tax Credit One of the most valuable yet underutilized tax credits is the research and development (R&D) tax credit. This credit is available to companies developing new products, improving existing ones, or innovating manufacturing processes. It can be worth up to 20% of a company's qualified research expenses. Yet, it's estimated that fewer than 1 in 20 eligible businesses claim this credit. Deduct Your Home Office Expenses If you are a small-business owner who works from a dedicated home office, you may be able to deduct a portion of your home expenses, including utilities, insurance, repairs, and depreciation. The IRS allows you to deduct a percentage of these costs based on the square footage of your home office compared to your total home size. While many small-business owners overlook this deduction, it can add up to significant savings. Claim Tax Credits for Hiring and Retaining Workers Businesses that hire from certain disadvantaged groups, such as veterans, the formerly incarcerated, or those receiving government assistance, may qualify for valuable tax credits. For example, the Work Opportunity Tax Credit can be worth up to $9,600 per eligible hire. Credits are also available for businesses that provide child care benefits to employees or pay wages to employees receiving Social Security retirement benefits. Don't Forget About State and Local Incentives In addition to federal tax breaks, many state and local business incentives are available. These include sales tax exemptions, property tax abatements, workforce training grants, and loan programs. Researching the specific incentives available in your area can unlock significant savings. The key is to proactively explore all the tax-saving opportunities that may be available to your business. Take the time to understand the full range of credits, deductions, and incentives to minimize your tax burden and keep more of your hard-earned profits. Reach out to us at Roberts CPA Group to discover the hidden tax breaks that could benefit your bottom line.
• 2 cups crushed graham crackers • 1/2 cup melted butter • 2 quarts ice cream (any flavor, divided) INGREDIENTS
• 1/2 cup chopped nuts (optional) • 1/2 cup chocolate or caramel topping (optional)
DIRECTIONS
1. Grease a 9-inch springform pan. 2. Combine graham cracker crumbs and butter; press onto the bottom and up the sides of the pan. 3. Place pan in the freezer for 30 minutes to allow crust to set. 4. Meanwhile, let the ice cream melt just enough to become spreadable. Then spread half of the ice cream into the crust, sprinkle with nuts, then top with the remaining ice cream. 5. Drizzle with topping, if desired. Freeze for 3 hours or until firm. 6. Remove from freezer 15 minutes before serving.
SUDOKU
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INSIDE THIS ISSUE 1 Let Us Help You Prepare 2 Not-So-Secret Strategies Rich People Use to Get Richer A Star's Untimely Death Exposes Estate Planning Pitfalls 3 Boost Your Bottom Line With These Hidden Tax Breaks Delicious Ice Cream Cake 4 Kickstart Your Wealth Journey in 2024
MASTER YOUR MONEY IN 2024 TURN YOUR FINANCES AROUND WITH THESE SMART STRATEGIES
Building wealth in 2024 doesn't have to feel like rocket science. In fact, with a few simple strategies, you can turn those financial goals from wishful thinking into achievable realities. Here’s how to set yourself up for a profitable year! Start with a high-yield savings account. First, let's talk about the safety net — your emergency fund. Opening a high-yield savings account is like planting a seed that grows while you sleep. You never know when an unexpected expense will pop up, whether it’s a car repair or a surprise medical bill. With interest rates better than your typical savings account, your emergency fund isn’t just sitting there; it’s slowly but surely increasing. Pay yourself first. Here's a simple trick that might change how you handle your finances: Pay yourself first. Before you pay your bills, buy groceries, or subscribe to another streaming service, set aside a portion of your income for savings
or investments. This could be in a retirement account, a stock portfolio, or a fun fund for future splurges. Think of it as a thank you to your future self for all your hard work today. Create a debt payoff plan. Debt can be a major roadblock on your path to building wealth. Tackle it head-on with a solid payoff plan. You've got two popular methods: the snowball or the avalanche. With the snowball method, you first knock out any smaller debts, gaining momentum and motivation as each one disappears. The avalanche method first targets debts with the highest interest rates, saving you money in the long run. Choose the one that best fits your financial style, and watch your debt dwindle! Keep track of your finances. In the era of app notifications and automatic payments, losing track of where your money goes is easy. Make it a habit to monitor your expenses. Whether you use a spreadsheet, a financial app, or good old-fashioned pen and
paper, keeping an eye on your spending can help you spot problem areas and tighten the reins if necessary. Invest in your growth. Lastly, remember to invest in areas that can increase your earning potential. Whether taking a course, attending a workshop, or buying books in your field, investing in your professional development can pay off exponentially. The more you learn, the more you earn! Building wealth is more than just making money; it’s about making smart choices with your money. As you move through 2024, remember that every small step can significantly change your financial health. So, go ahead and start implementing these tips, and maybe this time next year, you’ll be the one giving out financial advice at parties!
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