The $1.9 Trillion Covid Relief Bill (American Rescue Plan Act) appears headed to passing the House and Senate with at least the $1,400 per person direct checks to many Americans remaining in the bill. In the House version, the full payments will go to all filers with incomes under $75,000 Single and $150,000 Joint. The payments would begin phasing out at incomes above that until reaching $100,000 Single and $200,000 Joint respectively.
The Senate version lowers the eligibility numbers to $50 – 75K Single and $100 – $150K Joint. In either case eligibility will be determined by the most recent of your 2019 and 2020 Tax Returns. It recognizes that many people have not filed their 2020 returns yet.
Here in lies a planning opportunity for some people. If your income will allow you to qualify for the payment(s) in only one of those tax years, make sure that the lower income is the latest return you have filed.
As a result of the Georgia Senate elections on January 5th, we have regime change. The Democratic Party now controls the White House and both chambers on Capitol Hill. They are free to enact almost any economic, regulatory or fiscal legislation they desire as long as they can agree amongst themselves and pass muster with the Supreme Court. None of what they do will be undone until the Republican Party regains control of all three legs of the stool. In the past 40 years one party has had complete control in only 14 of them, so it could be a while until that happens. Here is what I think we will see from the Federal Government in the coming year from a fiscal and economic perspective.
For the first few months, they will be tied up trying to implement their own Covid plan. We can expect more stimulus money being distributed to almost everyone, unemployment payments being expanded and extended and more aid of some sort being directed at small businesses. This plethora of money chasing fewer goods and services will lead to increased inflation, that’s Econ 101. Sustained inflation will lead to higher market interest rates – the Fed will not be able to stop this over any extended period.
One of the projects I undertook over the past few weeks, was to redesign this blog. I had never liked the design that was originally imbedded with our website and two years ago I decided to use a separate host. I picked a template and configured it – at least as best I could. To be generous, it sucked. After a while, I just stopped posting – frankly, I was a bit embarrassed by it and it was way too distracting. Fixing it is one of those things that just never got to the top of the to do list. Until now.
I have been writing Financial In$ight for three decades. It morphed from a monthly printed and mailed newsletter to a blog. Communicating with our clients and followers is important. The financial world is a big place and I cherish the opportunity to make it a bit smaller. I needed to solve this problem.
CNBC is usually playing in the background on a TV in my office. In addition to hard news, financial and otherwise, they have and endless stream of talking heads and commentators, both their own and outside guests, throwing opinion and predictions at the audience.
Last week the equity markets were particularly volatile, so I was paying a bit more attention. At one point on a sharply down day, they put on a guest who told us that he was predicting the S&P 500 Index would finish the year higher than where it was as he was speaking. He seemed very sure of himself. Continue reading →
This month marks 30 years ago that I started my own firm. At the time, I was working at a local Financial Planning firm that was actually pretty progressive for that era.
When I had started there some two years earlier, one of my colleagues, Jacquie, took me under her wing and taught me much about employee benefits. That became an important career skill for me. Jacquie had left the firm in the spring of 1988 for another endeavor. Like many breakups I guess there were bad feelings between her and the firm’s ownership. She was very involved in a local business association and they sponsored a running race that September to benefit a charity. I was a runner (I still am) and I ran in the race. I saw Jacquie at the race and spent some time catching up with her. Continue reading →
I read Newsday and some other newspapers on my phone every day. It’s a Long Island, NY paper if you’re not familiar. Yesterday I opened the app to the headline page. One of them said “Tree cutter dies after fall”. It’s not the kind of story I will usually open or read but for some reason I did. I glanced at the story and a name jumped off the page, Erik Halvorsen.
In my 20’s and 30’s I was an avid basketball player and often played at a park with great competition some 15 miles from my home. During that time I also coached HS basketball so I would find a spot on my team for a younger kid if he played hard. Erik was one of those kids. As a bonus he was also the nicest most polite kid.
Once a month I play poker with some friends. One of the things a poker player always looks for is a “Tell” in the other players. A Tell if you don’t know is a change in behavior by another player that gives clues in their assessment of their own cards. If I have a good idea of the strength of your hand I can bet accordingly and hopefully improve my odds and results.
You may ask how this relates to your investment portfolio or financial plan especially if you don’t play poker. Let me explain… Continue reading →
When you create a trust, selection of the Trustee should be as important as the language contained in the trust. While some Founders select corporate Trustees, especially with large complex trusts, most select a family member. Selecting the wrong person can create chaos at best and harm the beneficiary’s interests at worst. There are three attributes you should be seeking.
The Trustee needs to be Honest and Trustworthy and able to execute a Fiduciary Duty to the beneficiary. Is the candidate able to put others interests above their own? Continue reading →
The estimated value of tonight’s Powerball Lottery currently stands at $1.5 Billion if the winner takes a 20 year payout. A lump sum would generate an estimated $930 Million. That exceeds the cost of buying every single ticket.
There are 295 million combinations and each game costs $2. Therefore, if someone wanted to guarantee they would be a winner, the cost would be $590 Million. That means if such a person was the sole winner, their profit would be $340 Million, a gross return of 58%. Continue reading →