4th Week of June 2021 Thoughts
thoughts as we finish this 4th Week of June 2021
“The creative economy is not only one of the most rapidly growing sectors of the world economy, it is also highly transformative in terms of income generation, job creation and export earnings.” Laura Callanan, Upstart Co-Lab
Until recent years, long-standing conventional wisdom in tax planning has been to delay taking taxable income or distributions for as long as possible. Ed Slott, long-time retirement specialist, wrote an article in Next Chapter—Re-Thinking Retirement:
“Today’s retirement rules and proposed changes in tax laws create greater incentive to take income and pay taxes sooner than later. We were trained from the first days of college, hard-wired from our first accounting class, to always defer income, put it off, defer, defer, defer—that was the game. But, when the ROTH came out, I became a recovering accountant.”
“I believe in paying taxes at the lowest possible rate. That is how you end up with more.” Most people should consider paying income taxes now on their tax-deferred accounts, like IRAs and consider converting those assets to a ROTH IRA, since taxes are likely to go up in the future. Others have argued there is an opportunity cost to taking money out of a tax-deferred retirement account for living expenses or to convert it to a ROTH IRA. “But there isn’t: if the effective tax rate now and the effective tax rate later are the same, then the cost is exactly the same. If rates go up, the ROTH IRA benefit kicks in: pay more now to have more money later.
Rip the Band-Aid off and let’s get started converting some of your IRA to a ROTH IRA this year: call me and let’s explore it. Right now I have 6 clients I’m talking with about ROTH IRA conversions, so I’ll be really good at it by fall! We also are moving from Right Capital to my new financial planning software, eMoney, because it does this scenario analysis so much better.
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Somehow, I’m not surprised to hear this. Two South African brothers recently vanished with $3.6 billion worth of bitcoin in what could potentially be the biggest cryptocurrency heist in history. In 2019, Ameer Cajee and his younger brother, Raees Cajee, founded crypto investment app Africrypt but today, the siblings, along with 69,000 bitcoins worth roughly $4 billion at their April peak, are nowhere to be found. Crimes involving crypto are a growing cause of concern for regulators and companies. US Treasury Secretary Janet Yellen, meanwhile, has also been a vocal critic of cryptocurrencies. "To the extent it is used, I fear it's often for illicit finance: "I do worry about potential losses that investors can suffer." 😲Why does this matter to you? So, which is it? “There’s a sucker born every minute”; “Go for it”; or “If something sounds too good to be true, it usually is”? All year long we’ve heard about the easy money being made by those buying Bitcoins (I hate to use the word INVESTING), or one of its siblings. It was no fun to feel we were missing the boat! So, how could this happen? Where are they now? Can they cash in their coins? How did they think they could get away with this? One thing for sure, we had plenty of warnings that until Bitcoin got regulated, this was an all too real potential
Procter & Gamble’s household paper products, Charmin’, Bounty and Puffs, are all made using wood pulp from the boreal forest in Canada, which is home to endangered caribou as well as billons of birds that roost in these old growth forests. After P&G failed to offer to change its policy, Green Century, one of the mutual fund companies that have funds in almost everyone’s portfolio, took their concerns to P & G’s shareholders, who overwhelmingly voted in support of our resolution, calling on the company to eliminate deforestation and forest degradation in its supply chain. Green Century’s resolution received a whopping 67% of the votes cast at the company’s annual meeting. At that point in the shareholder season, this was the highest ever vote for a deforestation proposal! 😊😲 Why does this matter to you? ESG, SRI, Sustainable Impact Investing… whatever you call it…is not some esoteric topic that doesn’t have real-world impacts on us. Every time we blow our nose or…err…visit the bathroom…creatures we all love, pay the price by losing their habitat. If you stop buying paper products, P & G, Kimberly Clark, and other companies that use paper in their products will see that unless they adapt, their sales will decline. The company I buy from is Who Gives a Crap...please excuse their tongue-and-cheek name…they are Brits and have a delicious sense of humor. They didn’t take new customers during the pandemic and made sure subscribers never missed a single roll of TP! https://us.whogivesacrap.org/