AUTHOR: ostrichtacossaturn7593 on 12/20/2024 FIRST: mytimetotravel on 12/20/2024 | RECENT: ostrichtacossaturn7593 on 12/21/2024
Comments
What will I do?
I may go to Costco this morning to stock up on nonperishable items we use frequently. I wouldn't mind a year’s supply of coffee and tea, and may look for other nonperishable bulk purchases.If domestic stock indexes hit a 20% decline, I’m increasing my allocation to stocks (via international index VXUS and US value and small cap indexes) by 10%. If stock indexes decline by 30%, I’m increasing by 20%. And if they go down 40%, I’m prepared to “back up the truck” as I did in varying degrees in the previous downturns of 1987, 2000, 2009, and March of 2020, and increase my stock allocation by 30%.(Warning: This will be considered political by many.) Continue wondering what it is in Trump’s psyche that drives him to to impose tariffs of this nature, when almost all living economists agree this is bad economic policy, and what the real limits are to his apparent mindset, propensity, or driven need to bully or dominate those around him, countries included.
In Texas, being rich is often paraphrased “All hat, no cattle.” You wrote, “Being rich is about having a lot of money.” Would “being rich is about spending a lot of money” more closely align with the thesis of your article? The latter aligns with the way I have always distinguished “being rich” from “being wealthy.”
I don’t think the right question is “can“ a tax provision benefit the middle-class or not. The better question is whether wealthier people receive an inordinate benefit from the tax provision. And wealthier people — define it however you like (top .1%, 1%, or 10% — definitely get an inordinate benefit from capital gains and qualified dividends treatment. Of course they also inordinately benefit from being able to itemize deductions generally as well — but also pay at higher effective tax rates, too.
Carried interest, capital gains treatment, and qualified dividend treatment are a few of the key tax breaks of the wealthy — in descending order of importance and dollars lost to the U.S. Treasury, in my opinion of course. Carried interest is particularly egregious.
Based on your current high income bracket indicating healthy disposable income, I recommend hiring a fee-only advisor who subscribes to the Income Lab software for its Roth conversion analysis tool. My advisor allowed me to use Income Lab on my own, with his advice and guidance as needed. Based on various relevant inputs (including current income, assets and asset location; assumed rates of return; SS and other retirement income sources; future tax rate changes, etc.), it will model expected income and income tax brackets throughout retirement, including the effect of IRMAA and NIIT (net investment income tax). Income Lab allows users to pick the tax bracket up to which you are comfortable performing Roth conversions, and then models the resulting income amounts and tax brackets for all future retirement years. The Income Lab software was developed by Justin Fitzpatrick, an MIT PhD in Finance who also holds the CFA and CFP certifications. Justin also regularly speaks and is a recognized expert and “guru” in this field. One other consideration rarely mentioned when considering Roth conversions is future charitable intent. For those who intend to donate a significant part of their RMDs as a QCD, or a significant amount of their tax-deferred accounts at death as an estate gift to charities, Roth conversions are not as advantageous as they would be otherwise — for the obvious reason that distributions to charities will never be taxed. Do yourself a favor and get a financial planner who uses Income Lab. Or message me for the names of planners who allow “software-only” clients to use Income Lab and Personal Capital software programs for less than $500/year.
The Christian community often describes your definition of “robust happiness” as “joy.” The best life is lived “joyfully” despite the inevitable ups and downs of happiness levels along life’s journey. But when you’ve “lost your joy,” life can certainly drag you down. Glad to know you are living these trying days in your life’s journey with both joy and robust happiness!
Investing most of our net worth while in our early 40’s (and with young children) in a closely-held equipment leasing business whose audited financials showed annual gain of 24% - 28% or more over 5 - 6 years, only to learn as the Great Recession started to hit in late 2007 that the manager of our venture was a Bernie Madoff, Jr. He had not only been cooking the books, he was also stealing from the LLC. Perhaps most egregiously, he borrowed $1 million from the bank using the LLC’s credit, and used the funds for his personal purposes. We lost every penny that we had progressively added to this “investment,” whose high 20% annual returns were exactly as they appeared: “too good to be true.” At least he finally paid off the $1 million loan to our bank, although it took him 5 years. We should have prosecuted him criminally, or at least sued him for fraud, but my partners were unwilling to tarnish their own reputations by admitting they were duped by this fraudster.
WHEREAS, Jonathan Clements has not only written about good financial habits for over three decades, but has also practiced excellent saving and investing habits over this period of time; and, WHEREAS, Clements therefore built an investment portfolio generating sufficient income to meet his and his family’s reasonable financial needs for the future; and, WHEREAS, Clements is now dealing with a serious cancer diagnosis in 2025; BE IT HEREBY RESOLVED that the Humble Dollar community hereby expresses its collective permission for Clements to travel First Class not only internationally but also domestically, even if deemed unnecessary or improper; and, BE IT FURTHER RESOLVED that the HD community collectively blesses all gifts to Elaine and the kids; a 90% stock allocation (as long as 10% covers all reasonably foreseeable liquidity needs for the next 5 years); the completion of all house projects and restful afternoon naps; and the purchase or nonpurchase of any possession as Jonathan and Elaine deem prudent; BE IT FURTHER RESOLVED that Jonathan fully experience the pleasure of his gift of financial security bestowed by his lifelong personal finance habits to benefit not only himself but also his family members, as well as his gift of unbiased personal finance articles and education benefiting tens of thousands of his readers over the decades, including those in the HD community; and, BE IT FINALLY RESOLVED that the HD community commits to a renewed sense of purpose and vitality for whatever number of days each of us is granted in 2025 or beyond, and that we collectively resolve to “seize each day” to accomplish whatever measure of good each of us can individually contribute to leave this world a better place for those who come behind us.
You are quite amazing to not only be willing to share your journey with us, but also value writing as one of the final ways you can continue to make a “small difference in the world.” May you be granted many, many more days on this planet to make a small difference in each one, and to experience life and the love of family to the fullest in every single one.
Comments
What will I do? I may go to Costco this morning to stock up on nonperishable items we use frequently. I wouldn't mind a year’s supply of coffee and tea, and may look for other nonperishable bulk purchases.If domestic stock indexes hit a 20% decline, I’m increasing my allocation to stocks (via international index VXUS and US value and small cap indexes) by 10%. If stock indexes decline by 30%, I’m increasing by 20%. And if they go down 40%, I’m prepared to “back up the truck” as I did in varying degrees in the previous downturns of 1987, 2000, 2009, and March of 2020, and increase my stock allocation by 30%.(Warning: This will be considered political by many.) Continue wondering what it is in Trump’s psyche that drives him to to impose tariffs of this nature, when almost all living economists agree this is bad economic policy, and what the real limits are to his apparent mindset, propensity, or driven need to bully or dominate those around him, countries included.
Post: Tariffs and our retirement assets
Link to comment from April 4, 2025
In Texas, being rich is often paraphrased “All hat, no cattle.” You wrote, “Being rich is about having a lot of money.” Would “being rich is about spending a lot of money” more closely align with the thesis of your article? The latter aligns with the way I have always distinguished “being rich” from “being wealthy.”
Post: I don’t feel comfortable being “wealthy”
Link to comment from April 2, 2025
I don’t think the right question is “can“ a tax provision benefit the middle-class or not. The better question is whether wealthier people receive an inordinate benefit from the tax provision. And wealthier people — define it however you like (top .1%, 1%, or 10% — definitely get an inordinate benefit from capital gains and qualified dividends treatment. Of course they also inordinately benefit from being able to itemize deductions generally as well — but also pay at higher effective tax rates, too.
Post: Yup, most usable, needed tax breaks go to average/middle class Americans.
Link to comment from March 19, 2025
Carried interest, capital gains treatment, and qualified dividend treatment are a few of the key tax breaks of the wealthy — in descending order of importance and dollars lost to the U.S. Treasury, in my opinion of course. Carried interest is particularly egregious.
Post: Yup, most usable, needed tax breaks go to average/middle class Americans.
Link to comment from March 19, 2025
Based on your current high income bracket indicating healthy disposable income, I recommend hiring a fee-only advisor who subscribes to the Income Lab software for its Roth conversion analysis tool. My advisor allowed me to use Income Lab on my own, with his advice and guidance as needed. Based on various relevant inputs (including current income, assets and asset location; assumed rates of return; SS and other retirement income sources; future tax rate changes, etc.), it will model expected income and income tax brackets throughout retirement, including the effect of IRMAA and NIIT (net investment income tax). Income Lab allows users to pick the tax bracket up to which you are comfortable performing Roth conversions, and then models the resulting income amounts and tax brackets for all future retirement years. The Income Lab software was developed by Justin Fitzpatrick, an MIT PhD in Finance who also holds the CFA and CFP certifications. Justin also regularly speaks and is a recognized expert and “guru” in this field. One other consideration rarely mentioned when considering Roth conversions is future charitable intent. For those who intend to donate a significant part of their RMDs as a QCD, or a significant amount of their tax-deferred accounts at death as an estate gift to charities, Roth conversions are not as advantageous as they would be otherwise — for the obvious reason that distributions to charities will never be taxed. Do yourself a favor and get a financial planner who uses Income Lab. Or message me for the names of planners who allow “software-only” clients to use Income Lab and Personal Capital software programs for less than $500/year.
Post: To Roth Convert or Not
Link to comment from March 8, 2025
The Christian community often describes your definition of “robust happiness” as “joy.” The best life is lived “joyfully” despite the inevitable ups and downs of happiness levels along life’s journey. But when you’ve “lost your joy,” life can certainly drag you down. Glad to know you are living these trying days in your life’s journey with both joy and robust happiness!
Post: What’s It All About?
Link to comment from February 22, 2025
Investing most of our net worth while in our early 40’s (and with young children) in a closely-held equipment leasing business whose audited financials showed annual gain of 24% - 28% or more over 5 - 6 years, only to learn as the Great Recession started to hit in late 2007 that the manager of our venture was a Bernie Madoff, Jr. He had not only been cooking the books, he was also stealing from the LLC. Perhaps most egregiously, he borrowed $1 million from the bank using the LLC’s credit, and used the funds for his personal purposes. We lost every penny that we had progressively added to this “investment,” whose high 20% annual returns were exactly as they appeared: “too good to be true.” At least he finally paid off the $1 million loan to our bank, although it took him 5 years. We should have prosecuted him criminally, or at least sued him for fraud, but my partners were unwilling to tarnish their own reputations by admitting they were duped by this fraudster.
Post: My Mistakes by Jonathan Clements
Link to comment from February 22, 2025
As Pharaoh (played by Yul Brenner) said in The Ten Commandments movie: “So let it be written, so let it be done.”
Post: Taking Center Stage
Link to comment from January 25, 2025
WHEREAS, Jonathan Clements has not only written about good financial habits for over three decades, but has also practiced excellent saving and investing habits over this period of time; and, WHEREAS, Clements therefore built an investment portfolio generating sufficient income to meet his and his family’s reasonable financial needs for the future; and, WHEREAS, Clements is now dealing with a serious cancer diagnosis in 2025; BE IT HEREBY RESOLVED that the Humble Dollar community hereby expresses its collective permission for Clements to travel First Class not only internationally but also domestically, even if deemed unnecessary or improper; and, BE IT FURTHER RESOLVED that the HD community collectively blesses all gifts to Elaine and the kids; a 90% stock allocation (as long as 10% covers all reasonably foreseeable liquidity needs for the next 5 years); the completion of all house projects and restful afternoon naps; and the purchase or nonpurchase of any possession as Jonathan and Elaine deem prudent; BE IT FURTHER RESOLVED that Jonathan fully experience the pleasure of his gift of financial security bestowed by his lifelong personal finance habits to benefit not only himself but also his family members, as well as his gift of unbiased personal finance articles and education benefiting tens of thousands of his readers over the decades, including those in the HD community; and, BE IT FINALLY RESOLVED that the HD community commits to a renewed sense of purpose and vitality for whatever number of days each of us is granted in 2025 or beyond, and that we collectively resolve to “seize each day” to accomplish whatever measure of good each of us can individually contribute to leave this world a better place for those who come behind us.
Post: Not Doing It by Jonathan Clements
Link to comment from January 1, 2025
You are quite amazing to not only be willing to share your journey with us, but also value writing as one of the final ways you can continue to make a “small difference in the world.” May you be granted many, many more days on this planet to make a small difference in each one, and to experience life and the love of family to the fullest in every single one.
Post: Four Questions
Link to comment from December 28, 2024