Money Rules Don't Rule

A listener wanted to know if the value and benefit of partnering with a financial advisor would exceed their fees. If they decide to hire an advisor, what should they be looking for? Copious research shows people struggle to objectively manage their personal finances. As a result, substantial amounts of money are left on the table each year due to the absence of professional help. How are the best financial advisors adding value to their clients?

A listener wanted to know when self-preparing their tax return was no longer adequate, and how to know when it's time to hire an accountant. And when they're ready to hire one, what should they be looking for? Take a look at the three-legged stool of time, interest, and expertise.

Today's guest is Dennis Mikelonis, the VP of Commercial Banking Team Lead at Idaho Trust Bank which is headquartered in Boise, Idaho. Dennis shares with us money's journey through a bank, how commercial loans differ from personal loans, and why loyalty is an asset to your financial health. Dennis invites your questions at [email protected] or you can reach him directly at (208) 985-5545. 

And thanks, Dennis, for your willingness to sit in the hotseat!

Why is the cost of an education so expensive? Tune in as we look back 100 years on the origin of higher education and what an education is today. We explore the expectations we place on 18 year olds to make decisions about debt loads that will burden them for the rest of their lives, and the basics of supply and demand as it relates to education. How does society win or lose when education is all work and no play? This episode offers more questions than answers, but we're starting the conversation.

Some of the resources mentioned include:

https://www.educatetocareer.org/

https://studentaid.gov/loan-simulator

There’s a popular misconception that because you don’t work, you can’t contribute to a retirement account. However, the spousal IRA contribution is one of the tax code loopholes that gets around this general rule and is a great way to save for retirement, in addition to building assets in the non-working spouse's name.  

What does it mean to retire, not just financially but personally?  Retirement can bring a lot of transitions into a person's life, and it can also be a time of heavy grief and loss.  Some retirees have a hard time spending money after decades of saving.  But when you have a plan for your money and how you'll spend your time in retirement, it's a lot easier to adjust to the big transitions in your life while ensuring that you're focusing on what matters most to you.

Inheritances are complicated because they can trigger the trifecta of emotional issues: money, family, and death. If you have assets, make a plan for transferring them so that there are no surprises when it's time to do so. If you don't have a plan, then the state can determine how to disburse your assets and it's often not how you intended. Have conversations with everyone involved in your estate (trustees, executors, heirs) so they each know their role and expectations. Try having these conversations sooner than later when you're not in the middle of a crisis. Let us know your experience with this and any suggestions you have to share! Email us at [email protected] or [email protected]

The Megabackoor Roth strategy allows some retirement savers to contribute significant sums of money on a Roth (after tax) basis. I'll explain why it's called the Megabackdoor Roth and who this rule applies to.  To participate in this strategy, your 401k plan must allow for after-tax contributions, as well as either in-plan Roth conversions OR in-service withdrawals.  If you're eligible, you may be able to get more than 4x the annual contribution limit of a Roth IRA growing tax-free!

The tax returns of wealthy individuals were leaked to the press, and articles about them were written on June 8, 2021 by The Washington Post, ProPublica, and others. Basically, the articles claimed to have assessed the individuals' total wealth and estimated a "true tax" of 3.4% that the individuals pay. But tax returns only assess Income Tax so any "true tax" paid is a misnomer when it includes non-taxable items. Plus, a person's wealth is a constantly moving target as it's tied to the Fair Market Value of what someone else would pay for those assets in an arm's length transaction. Wealth on paper is not the same as wealth in hand.

In this short-ish episode, Leah monologues what the public reaction to these articles tells us about ourselves and our views about money, what are some of the money rules that wealthy individuals leverage, and steps we can take to keep the needle pointed at ourselves instead of gossiping about others. 

Life is constantly changing and our financial lives are no different. But are there any aspects of our financial life that we can control? In this episode, we'll first talk about the financial things we cannot control - interest rates, elections - and the stress it causes when we let ourselves be yanked around by the things we can't control. We'll then explore things we can control - saving, spending, fees & expenses - and finding a financial plan that can weather the highest highs and the lowest lows.