About vonborstel

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC. To find out where Wayne is registered to discuss and transact securities business, please visit: www.vonborstel.com

4 End of the Year Tax Considerations

I, for one, am all for paying taxes later.  I’ve never been in the mode to pay my taxes any earlier than I need to. But this year may be different!  It seems to me that it is very apparent that we will have higher tax rates next year.  Can I predict that with certainty?  Absolutely not, but I feel strongly enough about it that I think you should be thoughtful about these opportunities.

Consider the following things:

  1. Do you have capital gains that you can harvest?
  2. Is there income you could take this year?
  3. Are there deductions that should be pushed back to next year?
  4. Do you have retirement accounts that could be converted to Roth IRAs?

If you believe taxes are going to go up next year significantly.  Now not only am I trying to predict the future which is impossible, I’m trying to get you to guess how much the change will be.  But depending on your beliefs I think you should consider the above.

If you have capital gains that can be harvested before year end without adverse consequences or making them short-term capital gains I think this should be considered because of the likelihood of capital gains tax going up.

If there is profit or income that can be taken this year, even though we have to pay tax sooner, considerate it.  If tax rates go up five to 10% next year I think that is a good return on paying our taxes earlier.

Do you pay your state taxes early for deduct ability purposes?  Or do you have deductions or expenses that you are going to take in the next few weeks that could be put off to next year.  It may be advisable.

If you have IRAs especially if you are in a lower bracket than you may be in future years does it make sense to convert these to Roth IRAs either for yourself or your beneficiaries that will ultimately receive this money?  Of course this all depends on your circumstances, beliefs and willingness to pay more taxes this year on the thought that next year’s taxes will be more.  The Roth IRA offers tax deferral on any earnings in the account.  Withdrawals from the account may be tax free, as long as they are considered qualified.  Limitations and restrictions may apply.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax.  Future tax laws can change at any time and may impact the benefits of Roth IRAs.  Their tax treatment may change.

Set a time to talk to your accountant, tax person or advisor soon about your planning opportunities and what you can control before the end of the year.

Each of you is unique in your circumstances, desires, priorities and beliefs.  Make decisions thoughtfully.

Sincerely,

Wayne von Borstel, CLU, ChFC, CFP®, MSFS

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Are You Playing The Game To Win?

Change is interesting isn’t it? We just had a new election and really with all the money, noise and expectation it is much the same at the end. For some of us that is a positive and for some of us it is sad day. Yet no matter what your belief we have to play the game to win.

We should not be so euphoric that we forget our goals and not take the necessary steps to be financially prudent and put the probability of success on our side. Nor should we be so depressed that we go hide and decide it is hopeless and we cannot win. Somewhere between those two attitudes is the reality of good planning. Somewhere between those two misconceptions is a reality that if we do the right things and control what we can control, life will be better no matter what happens tomorrow. And really we don’t plan for what we know, we plan for the unknown. We make a strong plan, have diversity, create reserves, save more and set goals so that no matter what happens in the future the likelihood of success is better than if we do nothing. Doing nothing is a loser’s decision.

So we have to pick ourselves up, we have to stay motivated about the boring, mundane and insignificant planning decisions that should be made every day. Every financial decision you make gets you closer or further from the probability of success. The longer you coast the more likely you will fail in meeting your goals. The longer you ignore financial truth’s the more likely we will not have the choices we want at the time we need them.

So like the old Chinese proverb: when is the best time to plan? Probably 20 years ago! But the second-best time…… Today!

Sincerely,
Wayne von Borstel, CLU, ChFC, CFP®, MSFS

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

SUCCESSFUL RETIREMENT……Ready, Set, Hut, Hut……

It is football season! Your favorite team is playing. Win, lose or draw most of our financial lives will be the same. It is glorious to go to a fall game. The Excitement, crowd, halftime, tailgating and all the celebration of playing, winning but possibly losing.

It brings to mind a game last year. One of the key games of the year, a young man runs out on the field to kick a field goal. If he makes it, the team wins and wins national honors. If he misses they lose! He misses and the news media for the next days and weeks makes him one of the most photographed and talked about players in college football. That game was not lost because of one kick. There were missed tackles, dropped passes, fumbles and blocking assignments that were incorrect. Yet one young man was tagged as a loser of that game. Is it fair that our society does that to a person who is doing his best? If he makes that he is a hero he would be remembered forever. If he misses it, he is a goat and the reason for a terrible loss. How unfair? How unjustified!

Financial planning is much the same thing. The first time you earned a nickel delivering a paper you had a chance to save for retirement, future purchases and your financial success. Every time we spent, saved, invested or gave away dollars over the next 30 to 50 years created what we call retirement opportunities. It is not what we did in the last year before retirement or even the last five years but it is a lifetime of prudence, focus and intensity to win the game (financial game at that). It is not because markets went down just before we retired. We know markets will go down, that will happen multiple times during our retirement but we need to build a strong enough plan that those known events do not affect our ultimate winning desire and our goals for retirement. For Most of us retirement is our ultimate financial goal. Yet for many we never do what it takes to be successful until it’s too late. It is not the last play, the last day or even the last year that leads to successful retirement.

Successful retirement planning is a lifetime endeavor. Plan today, better yet teach your kids to play well today with a long-term focus and patience that leads to success so that tomorrow will be better.

Being prepared and planning well leads to winning in both football and retirement.

Sincerely,
Wayne von Borstel, CLU, ChFC, CFP®, MSFS
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Realistic Expectations

The animal species called human? Isn’t it interesting how we react? The emotions that we let control are financial decisions, let control our friendships, our faith and the actions we take. How can we as animals be so emotional, so driven to take action that makes us feel better even if not prudent or wise.

With interest I recently watched as a client who recently engaged with me in the first three months decided the following:
1. Decided to retire years earlier than when we first spoke. (Whether they could afford it or not).
2. This means that we are not going to be able to save as much as we planned. (Yet they still expect the same results).
3. They decided they had to be aggressive because they cannot afford to be the appropriate risk tolerance that fit their psyche or that they were comfortable with. Otherwise they would not have any chance to meet their goals. (Do we understand what risk means?)
4. They expected 15% return. (Maybe we should go to Las Vegas and play craps as an investment tool).
5. They would not discuss spending less, retiring later or saving more even though the likelihood of long-term investments returning 15% consistently is almost nil. (Whatever happened to being prudent and systematic about our processes?)

So how does a rational person come to a conclusion that we should walk away from planning and prudence. Doing what Wall Street wants, pretending that we can predict, time and outsmart the market. Is this rational? No. Will this probably lead to financial success? Almost positively will not!

See I think we feel that the world owes us retirement, freedom the ability to do whatever we want……. why? 80 years ago nobody retired, they died. Retirement is a new social phenomenon. It is not owed. It is not God-given. It is something that we have marketed as the American dream in recent years. The majority of people in the world do not get to retire why do we as Americans think it is our birthright. Is it possible? Yes. But we have to work for it. We have to plan. We have to start saving early, consistently and have a long-term focus so that we can retire. Yet so many people get to retirement and have not saved enough, did not control their spending and find themselves not able to do what they want.

The biggest ingredient to being happy financially is to learn to be happy with what you have. If you always want more, want to retire earlier than you can, compare yourself to others what is the likelihood you will be happy? The best way to accumulate wealth is to be happy with what you are and what you have. Otherwise we get into a cycle of spending and buying because we feel that that will make us happy. This leads to being a Moneyholic!

Have a plan; be happy with what you are or what you have attained. We’ve all been born with different financial gifts, opportunities and rewards. Some of these we have created but ultimately happiness is about what’s important in life not what money can do and the unrealistic dreams that come from focusing on money goals rather than purpose in life.

Sincerely,
Wayne von Borstel, CLU, ChFC, CFP®, MSFS
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

The Importance of Planning

It is with interest that I see people that have invested in the IPO Facebook surprised that there was risk. What is investing? Is it the buying of one stock, gambling on the future of that company and the regulations that govern it, the competition that is unknown, and the price of the stock that is more controlled by unknown than known facts? Is this what you’re building your financial future on?

Don’t we need to build our financial future on solid ground? I think we need a plan or to be systematic. I think we need an investment strategy that we believe in, not one that we gamble with. I think we need a portfolio that is diversified, allocated and has low correlation that puts a strong strategy in place rather than the emotion and dream of quick riches.

Financial pornography put out by the news media, Wall Street and those that gain from your imprudent actions based on advice from someone that does not know you, your circumstances nor your dreams is not likely to lead to financial success. Financial success is born from having a plan. Financial success has a gestation period that takes patience and an understanding of the process of investing and prudent financial planning. Keep in mind that no financial strategy can assure a profit or protect against a loss.

Can you get rich out of an IPO? Yes. Can you get rich out of buying a lottery ticket? Yes. Does that mean that either one of these are prudent investment strategies to solve a lifetime of imprudent financial decisions. Now, many of you are successful and just get caught up in the emotion of the time. But, we need to stay true to our plan and the process that is dictated by our goals and the prudence of good planning.

Sincerely,

Wayne von Borstel, CLU, ChFC, CFP®, MSFS

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Are you Prepared?

Thunder storms, lightning, rain and wind….. maybe some hail. This is a part of summer and warmer weather. Now depending on whether you are traveling, farming, just living or maybe even on vacation you will react to the thunder storm differently. But no matter your circumstance we need to be unemotional and systematic about how we react and what we do.

If we are standing under a tree maybe we should not. I hear a rumor that getting hit by lighting is not a good thing. If we are a wheat farmer maybe we should have some insurance for hail…… before the storm comes. If in the pool maybe we should get out! If outside maybe we should go inside. It does no good to worry, fret or get emotional and crazy.

Yet when the storm in the markets come we act like it will never pass, that we have to do crazy things. The insurance we buy for investments is the plan we have in place. We have created the “The Vision to Wealth Process” tm to deal with this. This is our insurance that when the storm comes all we have to do is go inside and be thoughtful about how we adjust and react and the storm will blow over. So every financial decision you make to spend, save, invest or give money away either gets you closer or farther from this nirvana of planning. Train yourself and the ones you love that every time we spend, save, invest or give wealth away… we should ask ourselves these 3 questions:

1. Am I doing this because I am emotional, or not
2. Is this getting me farther from my plan, or not
3. Is this increasing the risk of failure in my plan, or not

If any of these answers are yes, STOP… do not pass go! Re-adjust your decision process and make sure we are on the right plan working towards meeting our goals, dreams and desires long term. Assuming you are on track to financial success, the next time you have the news on or read the front page article trying to get you to be hysterical,…remember, we are ok and we have planned for this. Have a great day and sleep well.

Sincerely,

Wayne von Borstel, CLU, ChFC, CFP®, MSFS

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Wayne’s World is going Blog!

 It is with great interest that I have become a part of the “blog” world!  If you told me years ago I would ever do this I would have laughed.  But today I feel that I have a lot to offer, knowledge from a different perspective, opinions that could make a difference.  These opinions reflect many of the differences I offer:

  • Independence
  • the ability to offer what is best for you rather than sell what is best for “the” company
  • the ability to tell you what you need to hear not what you want to hear
  • the ability to be free from selling a product when advice is what is really needed
  • the ability to be your advocate not just a salesman

These may seem unimportant to you, but I hope in the coming discussions that it becomes clear that these are critical pieces to getting good information that is appropriate for you.  Not the masses, not big companies, not Wall Street, but you the consumer trying to build a financial future in a world that is more and more complicated as time goes on.  You are the one that needs information that affects your personal choices, those you love and the life you will lead.  I hope what this discussion becomes is a place for you to get a different viewpoint. 

There are so many facets of each conversation we have and each opportunity we explore, especially those in our financial lives.  There is no choice that is black-and-white, there is no choice that is perfect, but there are many things we should consider as we make the decisions that affect our lives and those we love.  So in the discussions we have going forward I hope, that in a way, I affect your thought process and the direction or decisions you make so that you worry less and do better with less mistakes financially. 

My conversations will not be full of predictions and brilliant ways to outsmart, out time, or out pick the market.  This is folly.  Hopefully what this blog creates is a conversation that helps us to control those things we can and not believe that we can control those things we cannot.  Hopefully I help you be more prudent, less emotional and more probable with your success.

I think of myself as a shepherd, a person that goes to those that are in need and tries to take care of them based on their needs, concerns and dreams.  I am not a cowboy that corrals you into “THEIR” products and agendas that benefit “THEM”, and are either unlikely or unpredictable in the results.  Most of us need a shepherd to guide us, not a cowboy to herd us.

So if you’re looking for compassion and truth, or you need to make better decisions and need advice to help bring more probable success to your planning, then this blog is for you.  Please share our blog with others you feel might benefit from it.                            www.vonBorstel.wordpress.com

Sincerely,

Wayne von Borstel, CLU, ChFC, CFP®, MSFS

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Financial Planning is offered through Oregon Trail Financial Services, Inc.

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