Introducing Kids (and Grandkids!) to Investing Setting the stage As your kids learn more about managing their money, introduce the concept of investing. Its a great way to reinforce the ideas of goal setting, saving, and budgeting. It can help put them on a long-term path to financial independence. Keep it simple When kids are in elementary or middle school, its a good idea to teach kids to put money away in three buckets: save, spend and share. As they get a little older, say into high school, you can get a little more sophisticated in how you approach investing. Start by explaining that investing is a means of using your money to try to create more money. This usually starts to make more sense for kids when they start to work and they can finally realize how hard they have to work to pay for something, especially after Uncle Sam takes his fair share. Make it real You can start your investing conversation by having a family meeting. You should explain that your intention is to
We know that many people are curious about the tax bill announced in the House of Representatives yesterday, H.R.1: The Tax Cut and Jobs Act. Weve put together a balanced review of the bill, and wanted to share it in a timely way. The proposed bill: Condenses individual tax rates to Zero, 12%, 25%, 35%, and 39.6%. Increases the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. Establishes a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses. Preserves the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support. Preserves the Earned Income Tax Credit to provide tax relief for low-income individuals and families. Streamlines
Click below to join President and Founder Jim Lineweaver for his 3rd quarter market commentary. If you have questions about your portfolio, were here to help. You can contact us at 216.520.1711, email us atQuarterback@Lineweaver.net, or simply click here.
As if paying taxes each year werent painful enough, there are also scammers out there that want to make the process even more challenging. Today, well talk about a couple of the most common scams that you should be aware of. Perhaps the best thing to do is to remind everyone what the IRS wont do. In the past several years, thousands of people have lost millions of dollars and their personal information to tax scams, identity theft, and illegitimate IRS communications. Criminals will oftenuse mail, telephone, fax or email. Always remember that the IRS doesntinitiatecontact with taxpayers by any means to obtain your personal or financial information.The IRS also does not threaten taxpayers with lawsuits, imprisonment or other enforcement. They also dont use channels like social media or text messages, and dont send unsolicited emails. They wont call to demand payment theyll always send a bill in the mail first. If you do get a bill, look up the number for the IRS and call them first.
Its that time of year again! The days are getting a little shorter, and the weather is a little cooler. As you get your fall off to a good start, here are a few health tips to keep in mind. 1. Start taking a Vitamin D Supplement - we get most of our Vitamin D from the sun, so our intake decreases when the weather is cooler. The days are shorter and tend to be more overcast (especially in Cleveland!) If you find you are not getting outside as much, a Vitamin D supplement can help to boost your mood and immune system! 2. Flu-Shot while no one wants to think about winter (and cold and flu season) in Ohio, now is the time to start! 3. Prepare for the end of Daylight Savings Time: Dont forget to fall back on Sunday, November 5th. The good news is an extra hour of sleep!
Dave Higginbotham has a pretty interesting job he works part time for Arizona-based company Fire Training Structures. As you might have guessed, they make live fire training props and training simulators for various fire departments around the world. Dave flies around the country training these instructors on how to use these props and simulators. He was recently in Juneau, Alaska, facilitating training at the Hagevig Training Center. The training lasted for 2 days. It was designed around a Fire Behavior Rollover Simulator and also a propane car fire prop. The goal of the training is to teach other instructors how to neutralize those threats with minimal damage and loss of life. Dave is a Fire Captain with the City of Parma, where he lives with his wife Lisa, their daughter and two sons. In addition to his work with Fire Training Structures, he also teaches at the Tri-C Fire Training Academy where he is a lead fire instructor. In his off time he also coaches high school hockey,
Global financial markets continued to increase during the third quarter of 2017, supported by improving world economic growth. However, fiscal and monetary uncertainties as well as geopolitical events - continue to present risks. While tensions exist around the world, the potential for escalating military conflict with North Korea is the immediate threat. A few highlights from the third quarter are: U.S. equity markets continued to trade near record highs despite the new Trump Administrations failure to show meaningful progress on key domestic policies. On the economic front, preliminary estimates indicate GDP grew better-than-expected in the second quarter, reflecting robust consumer spending and strong business investment. U.S. equities are now in the ninth year of a bull market, making it one of the longest in the post-WWII era. Developed international equity markets were also positive during the third quarter and continued to outperform their domestic counterparts as earnings
As if paying taxes isnt painful enough, there are also scammers, hackers, and thieves out there who want to make the process even more challenging. We want to take a little time this issue to remind you of how to avoid year-end tax scams, and what you can do if the Equifax hack has affected you and your family. Perhaps the best thing to do is to remind everyone what the IRS wont do. In the past several years, thousands of people have lost millions of dollars and their personal information to tax scams, identity theft, and illegitimate IRS communications. Criminals will often use mail, telephone, fax or email. Always remember that the IRS doesnt initiate contact with taxpayers by any means to obtain your personal or financial information. The IRS also does not threaten taxpayers with lawsuits, imprisonment or other enforcement. They also dont use channels like social media or text messages and dont send unsolicited emails. They wont call to demand payment theyll always send a bill in
Protecting Yourself and Your Family When Natural Disasters Strike Hurricanes Irma and Harvey have no doubt left many of us thinking about how well were prepared for a natural disaster. Although we dont see many hurricanes here in Cleveland, Superstorm Sandy in 2012 is probably the most recent example that comes to mind. The first thing to remember to do is to keep important records safe and easily accessible in case of an emergency. These can be anything from birth certificates to bank records. You may also want to make sure you have some cash on hand, in case you cant access an ATM or get to a bank. Its also a good idea to regularly review and update your insurance. Depending on the nature and duration of a disaster, it may be a good idea to have a copy of your credit report and contact information from your creditors you want to protect your credit score if you are unable to make regularly scheduled payments. Likewise, its a good idea to keep a list of passwords, or to use a service
Youve heard it over and over again, from many places never, ever make an early withdrawal from your 401(k), unless its an emergency. And, we agree - thats often good advice. But there are a few exceptions where an early withdrawal may be to your advantage. Some companies allow active employees participating in a qualified employer-sponsored retirement plan to withdraw a portion of their account balance upon request, without demonstrating a specific financial need, usually at age 59 . This is called an in-service, non-hardship withdrawal. One reason you may want to consider this option is that by rolling over a portion of employer-sponsored retirement plan assets to a rollover IRA, you may be able to significantly expand your investment choices, especially if you have limited choices in your employer-sponsored retirement plan. 401(k)s typically offer limited fund options to participants. Spreading the risk among a group of investments is generally a good thing when saving for the long
With the push to increase the transparency with what investors pay for advice, one area that is not truly transparent are the costs associated with mutual funds. While mutual funds do disclose their expense ratios, many costs are not published, and can erode your real returns. Here are a couple of examples of these costs, and what you can look out for. Disclosed Costs: The disclosed costs of mutual funds are supposed to be revealed to you. But there are many of these costs. For example, there can be shareholder fees, which can consist of front-end loads, back-end loads, purchase fees, redemption fees, exchange fees, and account fees. There is also the expense ratio, which includes operating costs, management fees, 12b-1 distribution fees, and administrative costs. How much do they cost? According to a study published in the Financial Analyst Journal that was authored by finance professors at the University of California Davis, University of Virginia, and Virginia Tech, the average
August 21, 2017 We know that many of you have been interested in the events unfolding between President Trump and North Korean Leader Kim Jong-un. Keep in mind that: Rhetoric does not necessarily equal action:No doubt there has been much bluster in the media lately between President Trump and North Koreas Leader, Kim Jong-un. We should keep in mind, however, that rhetoric is not the same as action. Rest assured that military policy decisions are not being based on President Trumps tweets or Kim Jong-uns statements. President Trump is surrounded by a strong cabinet of highly accomplished and highly experienced military leaders including Gen. James Mattis, Gen. John Kelly, and Lt. Gen. H.R. McMaster. We should trust these leaders to guide our Nation through times of crisis. Market performance in times of conflict:History provides relevant context with respect to market performance in times of conflict. Since 1900, there have been 7 major geopolitical crises that have included
In our increasingly complex financial world, its important to discuss the need to have an overall coordinated approach when it comes to financial affairs. Think of 11 players going onto the football field, and hiking the ball without taking the time to get into a huddle and have the quarterback call the play. The chances of these guys getting into the end zone are slim. Without overall coordination of your financial affairs, getting into the financial end zone may be difficult for you as well. Most people dont think of all their advisors as a team, but its important to recognize that most of us already have a financial team; we are getting financial advice from a variety of sources. Your financial team is comprised of your different insurance agents, your CPA or tax preparer, your bank, any investment advisors with whom you are working, and your estate planning attorney. Everyone has a financial team, and they all need a Financial Quarterback. Lets look at some potential pitfalls of
Remember your parents constantly telling you to be careful? Im sure that most of us hear that reminder in our minds all the time. But sometimes, no matter how careful you are, events unfold that can have a devastating effect on you and your family. But, dont worry you arent totally powerless and many risks can be mitigated through insurance! First, start by reviewing your Life Insurance. Unfortunately, none of us are going to live forever. If youor your spouse were to pass away, consider - what would the ongoing financial impact be on your family? We recommend reviewing the reasons, necessity, and beneficiaries of life insurance policies as circumstances and objectives may have changed since the original purchase. Second, consider Long Term Care Insurance (LTC). Long term care is another topic no one wants to discuss. This alone could be the biggest financial risk you face, and is the most likely to be uninsured. There are several studies on the incidence of nursing home care, and
Following the strong start to the year, additional positive performance slowed in the second quarter as markets digested a tremendous amount of economic and geopolitical news. However, despite elevated levels of uncertainty throughout global financial markets, returns overall remain robust year-to-date. A few highlights from the second quarter: U.S. Equity markets added to gains from earlier in the year at a slower pace as compared to the first quarter. Economic data was mixed and overall GDP results fell short of expectations. Despite uncertainty, corporate earnings were stronger than anticipated which helped push equity markets to new highs. International equity markets were positive during the quarter and outperformed their domestic counterparts. Economic data in Europe continues to come in better than expected, and could be signaling a period of sustained growth. Emerging Market equities posted some of the strongest gains of all in countries such as China, India, and Brazil,
3 Tips For A Healthy Summer Its finally summer! Something we wait for all year in Cleveland. And, while you should definitely take some time to have fun, recharge, and spend time with family and friends, here are three health tips that will help you have a healthy summer! 1. Eat More Berries - An easy way to improve your diet this summer, is to have a cup of mixed fresh berries every day. Theyre full of antioxidants, which may help prevent damage to tissues and reduce the risks of age-related illnesses. Theyre also high in fiber, which helps keep cholesterol low and may even help prevent some cancers. 2. Drink alcohol for your heart! Ok, this one comes with a caveat. No one needs to be encouraged to have a drink during the hot summer months, but dont overdo it. Research shows that drinking alcohol in moderation defined as about two drinks a day can help protect against heart disease. 3. Plant a garden - Gardening is a great way to reduce stress. It helps you focus, beautifies
One of my favorite things about summers past, especially when the kids were young, was a tradition that my father-in-law started. At the beginning of each summer, hed take pictures of the kids on vacation, having fun, or just lounging around at home. At the end of the summer, hed make a little book out of it and give it to Kathy and me. I still have all those books! These are a few of my favorites of us as a family. I hope that you and your family have something fun planned this summer, and that youll take the time to make (and capture) a few memories of your own!
As an investment, the case for real estate remains a good one. Not only has the sector outperformed the SP 500 over the past 40 years (an average annual return of 9.3% for the NCREIF Property Index versus an 8.7% return for the SP 500), its done so with dramatically less volatility (7.8% compared to 16.4%), according to the S P Dow Indices and NCREIF. Real estate has a low correlation to stocks and bonds. Because its a lagging economic indicator it rises and falls well after the rest of the economy it moves differently than stocks or bonds. Whats more, real estate markets are unique. The factors that can sink home prices in one market can have no bearing on another, although thats not always the case. Although the real estate market has plenty of opportunities for making gains, buying and owning real estate is a lot more complicated than investing in stocks, bonds and mutual funds. Perhaps the biggest difference between a rental property and other investments is the amount
Theres nothing that says you cant do good in the worldand do well for yourself. You may even be able to reduce your taxes, secure and income for yourself or your beneficiaries, and help a charity or - several charities - of your choosing. Although there are many ways to accomplish your philanthropic and financial goals, today we will focus on four smart strategies. The first strategy is that of a Donor Advised Fund or DAF. A DAF has several advantages, including: There is generally a low initial minimum to open an account (usually $5,000-$10,000) There are generally low ongoing maintenance and administrative expenses There are no annual distribution requirements There are no annual tax filing requirements Gifts can be made publicly or anonymously There are higher charitable deduction limits relative to private foundations which we will cover in just a moment! But, there are also some disadvantages. Specifically: Some donor advised funds do not allow the donor to name successors These
There are many options when it comes to retirement, and it can be hard to know which is right for you. One of those options a ROTH IRA conversion, can be a great strategy for some people. First, aquick refresher on how a ROTH IRA differs from a Traditional IRA. With a Traditional IRA: 1. You receive an upfront tax deduction on your annual contributions 2. Growth is tax-deferred growth until its withdrawn 3. Withdrawals are taxable as ordinary income 4. There are penalties if you take withdrawals before the age of 59 5. You have required minimum distributions (RMDs) that begin at age 70 With a ROTH IRA 1. Your contributions are front loaded meaning you use after-tax dollars for your contributions 2. Growth is tax-free 3. Withdrawals are never taxed 4. Earnings can be taken income-tax-free if you are at least 59 and have had the ROTH IRA for at least 5 years 5. There are no required minimum distributions ever! If you currently have a Traditional IRA, but some of the
Every new administration brings new challenges and new opportunities. Six months into the Trump Administration, there hasnt been as much movement as we might have thought, but there are still some smart strategies you should keep in mind. First up, taxes. President Trump officially released his latest tax proposal in April. In it, he made a lot of suggestions. For example, hes suggesting a cut in the corporate tax rate, from 35% to 15%, and pass-through entities like corporations and LLCs would also qualify for the 15% tax rate. Hes also suggesting doubling the standard deduction, and reducing the number of tax brackets from 7 to 3 10%, 25%, and 35%. Hes also suggesting eliminating the federal estate tax, repealing the alternative minimum tax, and Net Investment Income Tax. In terms of repealing and replacing Obamacare, another major campaign promise, The American Health Care Act(AHCA), was proposed in the House of Representatives on March 6th but failed to make it to a vote March
Annuities can be great tools. Often, fixed annuities can offer higher interest rates than your bank account, a CD, or even Treasury Bonds, and they do it all with comparatively low risk. But, there are many alternatives that may be far better options for some people. One of the downsides to some annuities is that your portfolio cant grow if youre taking the interest as distributions, and there can be surrender charges as well.The 65-year-old retiree will see the value of his or her $500,000 stay the same over 10 years, and if you factor in an annual inflation rate of 3%, your purchasing power for that same $500,0000 will only buy $350,000 worth of goods. If that scenario doesnt seem ideal for you, here are a few alternatives you might consider. Dividend-paying stocks that pay monthly and quarterly dividends can be good annuity alternatives. With the help of an experienced advisor, you may be able to even buy a collection of dividend-paying stocks that will not only pay you more income
After the most recent interest rate increase in mid-Mach, The Federal Reserve has signaled that it is likely to continue raising interest rates both this year and next. Bond investors have been concerned about this for years, but this time it looks like its going to happen. That may have you wondering how do I manage my bond portfolio in the face of rising interest rates? Generally speaking, bond yields go down as interest rates increase. But remember, while bonds may decline in value, their moves tend to be smaller compared to other securities. Many investors are flooding into U.S. Treasury bonds, making the so-called flight to quality, because right now, the U.S. looks better than other economies worldwide. This means that medium and longer-term bonds whose rates are often more influenced by investor expectations than anything else are likely to be most affected. But, there are many strategies you can use to manage your bond portfolio in a rising interest rate environment. 1.
Youre a driver of the economy a true American entrepreneur and whether you have a team supporting you, or you are the whole team, it can seem like a challenge to make sure you are saving enough for retirement. If youre like many of our clients, youre probably constantly putting money back toward growing and reinvesting in your business. But what about your own future? Fortunately, the freedom of being your own boss also offers you several options to choose from in terms of your own retirement. It all comes down to how much you need to save, how close you are to retirement, and what your goals for retirement are. 1. Solo 401(k) (Sometimes called Uni-k or Solo-k) With a solo 401(k), for IRS purposes, you are considered both an employer and employee, and therefore, can contribute in both capacities. Your elective deferrals (meaning the part taken from your salary, pre-tax), can be up to $18,000/year. Total contributions for those under 50 years of age is $54,000 in 2017 and if you are
Life is full of uncertainty. What your career will bring, changes in your family, your health, and the market. And these are just a few! So its hard for anyone to predict the future, but there are really only two ways to figure out how much you need for retirement. And, as youll see, one offers a better future for most. 1. Save What You Can Its no secret that many people are putting off or avoiding saving for retirement. A recent article on CNN.com shared that about 26% of workers said they and their spouse have saved less than $1,000 for retirement, according toa reportfrom the Employee Benefit Research Institute. Another 16% said they have between $1,000 and $10,000 stashed away for retirement. While some of those are no doubt younger workers who have time to save, some are likely not. Its highly doubtful that theyd be able to retire at all on that! Some financial planners point out that planning retirement spending around your current income might not make sense. Many people drastically
Are You Spending Your Legacy? Retirement is supposed to be a well-earned reward a time when you can stop worrying about the day-to-day struggles of your career, and everything that went with it. A time to enjoy your family, and to scratch a few things off your bucket list. Confronted with so much freedom, it can be tempting to do all those things without considering a plan going forward. While we find that most of our clients arent afraid of running out of money for themselves, many of them do want to leave a legacy to help their children or grandchildren. So how can you ensure that youll be able to have the retirement you want and still help your loved ones? It all comes down to your spending rate. To find your rate, start by adding up your expenses, and subtract that from any non-portfolio income you might be receiving in retirement. That can mean things like rental property income, annuity income, or even Social Security. The amount left over is what youll need to withdraw. You
When it comes to retirement planning, its hard to know where to start. Many people put it off for years, only to discover that theyve put themselves at a distinct disadvantage. They often have to sacrifice to catch up financially, or work for far longer than they would have otherwise. When we talk to clients, they are interested in two things: they want to maintain their quality of life while saving for retirement, and they dont want to make sacrifices once they have retired. Weve put together a helpful guide that can help you do just that! To simplify the many options available to you, weve laid these out like a pyramid you shouldnt think about progressing to the next level before youve completed the other levels from the base up. We think that this makes it easier to understand by helping clients strategically, thoughtfully, and thoroughly build the retirement of their dreams, and to have a roadmap to understand what they should be doing now, and what comes next. Level one: Make
Your retirement portfolio may look pretty good right now. Were in the midst of a bull market, and still enjoying the effects of the so-called Trump rally. You may be looking at those balances and thinking maybe for the first time This might be an actual possibility, and sooner than I thought! But there are many things to consider before you make the jump. For example, what if the market declines? Do you have the right insurance in place? What about taxes will you retire into a higher bracket, or maybe a lower one? Here are a 4 important retirement planning considerations before you make that big decision. 1. Healthcare Healthcare is a huge concern for most retirees, and with the current uncertainty about the future of the ACA, it can make it hard to know what the best plan is. Some retirees incorrectly assume that at the age of 65, Medicare eligibility immediately eliminates your healthcare costs. According to an estimate by Fidelity Investments in August of 2016, the average
Happy New Year! Its time to make your 2017 resolutions, and we believe that one of the smartest things that you can do in the new year is to resolve to learn more about all the ways you can be handling your finances. Thats an especially important task for high income-earners, and so, to help you keep those financial new years resolutions, we at Lineweaver Financial Group have some tips to help you this year. 1. Pay taxes now rather than later on retirement accounts: Many high-income earners, or those on their way, will likely be in the top tax bracket even after retirement when they consider any pensions, investment income or other income accumulated over time. That means any deferred income put into a traditional 401k may be taxed at the highest rates in the future. Consider using a Roth 401k if your company offers it. The Roth 401k has a few distinct advantages over a traditional 401k for those with high incomes: 1. There is no income limit to making Roth 401k contributions, unlike
Its difficult to predict the market over the short term, and 2016 has proven that point. Here are a few things that surprised the markets this year. Interest rates remain mainly unchanged for the year. In December 2015 the Fed increased interest rates for the first time in 9 years, and indicated plans to raise rates slowly in 2016. Due to concerns about less than robust economic growth, rates have remained at historic lows. Only post-election have interest rate sensitive sectors moved in response to anticipated rate increases in 2017. Late year rising bond yields during the quarter resulted in outright declines in bond-proxy sectors, such as utilities, staples, and real estate. In 2015 the China stock market declined, setting off global market declines and a return to volatility, but by late year that was all behind us or so we thought. 2016 started with another steep sell-off in the Chinese stock market which in turn caused global markets to sell off. World markets also tumbled after