Today’s Brief focuses on some powerful financial and budget planning options available to IRA owners. It was inspired, in part, by a recent blog on Health Savings Accounts by our friend Ryan Smith of Stonegate Financial. IRAs are a powerful tax-deferred saving vehicle owned by many as the result of rollovers from other retirement plans such as 401(k)s, 403(b)s and other pension plans, or they were started outright to begin retirement savings in earnest. While IRAs have been around for decades, their features and options change often with new budgets and IRS rulings.
“People call it luck when you’ve acted more sensibly then they have.” Amy Tan When we invest or expend money to make a profit, we start from one of two vantages: Confidence or Luck. The first requires effort, competence, and a thorough understanding of what is controllable and what is not controllable and we plan contingencies for those things that are not controllable. The second perspective is the veritable flip a coin. Luck-dependent investment decisions are based on things like past performance, colorful brochures, and influential arguments.
I got my first job when I was 8, selling The Pilot (Moore County’s local newspaper) to businesses near my home 50 or so miles south of Raleigh. The gig was super simple in those times: I bought each paper for 30 cents and sold it for 50 cents. For four years, I sold the paper three days a week, earning a profit of 20 cents on every paper I sold.
During lunch yesterday my son Sam, who is getting married soon, asked if it would better for the new couple to rent or buy their first home? He had given considerable thought to the subject in recent months. As a renter since college, he felt like he was throwing his money away; money that might instead be applied toward equity in a home comparable to or better than the one he and his new wife might rent – increasing their wealth rather than draining it. After agreeing with and complimenting his reasoning, I shared a few additional issues to consider. One of the most