Everything You Need to Know About the New Stimulus Bill

New Stimulus Checks & PPP 2.0! Everything You Need to Know About the New Stimulus Bill

It’s easy to forget, with everything happening in Washington D.C. in the last week, that we have a new stimulus package.  After sitting on the bill for about a week, President Trump signed the Consolidated Appropriations Act into law in the late hours of December 27th.

It was a massive bill, with many sections other coronavirus related stimulus.  I haven’t read the entire Act, and hope that I never do.  I have read the sections related to stimulus checks, the paycheck protection program and a few others though, as they relate directly to many of our clients.

This post will cover what you need to know about those sections: whether you’re entitled to a stimulus check and/or PPP loan, when you might receive one, and other relevant details.

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Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #57: A Breakdown of the New Stimulus Bill, Including PPP 2.0!


 

A couple of days ago, President Trump signed into law a second stimulus package for COVID relief. This legislation includes $600 stimulus checks, more funding for the Paycheck Protection Program, along with some updates to the rules, changes to the regulations related to loan forgiveness, tax deferrals, healthcare, and more. Throughout the episode, Grant dives into what these new updates are, how they relate to individuals, business owners, employees, and how you can take advantage of the provisions in the new stimulus package.Continue reading

Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #56: Last Minute Retirement Plan: Tips & Tricks for 2020 Procrastinators

 
At the end of every year, some business owners face situations where they need to set up retirement plans at the last minute due to numerous reasons. We dedicated this episode to reviewing how business owners may overcome this challenge. Over the years, Grant has come up with some strategies and maneuvers that may help you set up retirement plans and make deductible contributions late in the year. Throughout the episode, Grant shares how to implement these strategies in your business.
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Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #52: Top Year End Tax Planning Moves with Biden in the White House


 

After weeks of delay caused by legal battles surrounding the election, at this point, all signs point to the fact that Joe Biden will be inaugurated as the President of the United States of America. As we discussed in detail in a previous episode, Joe Biden’s tax plan contains tax reforms that affect taxpayers in numerous ways. In today’s episode, Grant dives into some of the tax planning opportunities you should consider in the coming months.Continue reading

How & Why to Open a Roth IRA For Your Kids

How & Why to Open a Roth IRA For Your Kids

One thing all parents have in common is wanting what’s best for their kids.  We all want to give our kids ample opportunities for success.  We all want to keep them rooted in family values.  And we all want them to have a fair shot at life.

When it comes to money, we typically want to give our kids ample support without spoiling them too much.  Most of us don’t want our kids to win the lottery, though.  We’d much rather our kids build some character through struggle and sweat equity.  Nothing gives young people an appreciation for higher education than working a few arduous, low paying jobs.

From a financial perspective it’s difficult balancing these objectives.  How do I help my kids financially without spoiling them?  How do I teach them fiscal responsibility?  How can I show them the power of long term tax advantaged compounding?

These a few questions our clients at the financial planning firm often ask.  The answer is often the Roth IRA.

This post covers why that’s the case, how you can set one up for your kids, and when & how to contribute to one.

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How & Why Asset Classes Compete With Each Other

How & Why Asset Classes Compete With Each Other

Diversification is one of the first things most people learn about investing.  The phrase “don’t put all your eggs in one basket” probably sounds familiar.

At its core, diversification means that when we build a portfolio we want to dump in a bunch of different investments with different risk profiles.  That way they’re not all likely to fall in value at the same time.  They work “together” to reduce risk.

Think of it like baking a cake.  Dumping a bunch of flour in a cake pan and tossing it in the oven probably won’t turn out very good.  But when you add sugar, milk, and eggs in the proper ratio, you’re a lot more likely to get a desirable result.

Typically, investors accomplish this by investing in two primary assets classes: stocks and bonds.  Stocks and bonds are very different animals, which is really the whole point.  In most circumstances one goes up when the other tends to go down, and vice versa.

There’s an interesting phenomenon that’s often overlooked when we view our investments this way though.  While we like to think that stocks and bonds “work together” to reduce risk, they actually compete against each other in the capital markets.  This behavior is a major reason we’ve seen such strong equity returns over the last few years, and will likely help to explain what kind of returns we see over the next 5-10 years & beyond.

This post will dive into this concept, what’s currently driving stock prices, and what’s likely to happen next.

Checking In On Market Valuations

Long term real S&P Composite price index vs. earnings. Source: Robert Shiller’s Online Database: http://www.econ.yale.edu/~shiller/data.htm

 

Checking In On Market Valuations

Long term CAPE vs. long term U.S. interest rates. Source: Robert Shiller’s Online Database: http://www.econ.yale.edu/~shiller/data.htm

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Biden's Tax Plan

Reviewing the Biden Tax Plan

With the election in November creeping closer, the campaign season is now in full swing.  And the closer we get, the more details & campaign promises start to emerge from the candidates.

Biden’s tax plan has mostly flown under the radar in the national media thus far, thanks to the global pandemic.  But given that he has at least a 50/50 shot at winning, I thought it made sense to devote a post to what he has in mind if he does win the Presidency.  If elected, we could see some substantial changes to the tax code in the next few years.

Here’s the rundown.

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Buy/Sell Agreements Make the Best Insurance Policies

Buy Sell Agreements Can Be the Best Insurance Policies

Risk management is a pretty common objective for small business owners.  Once a business becomes viable, protecting what you worked so hard to build is usually a priority.  As COVID-19 has shown us, so many things could go wrong in the life cycle of a small business that it makes sense to limit risk wherever possible.

The first place many business owners will look is to the insurance industry.  Errors & omissions, malpractice, general liability, and standard business owner’s policies can be great ways to limit risk in specific areas of your business.  Insurance usually won’t help you much with planned or unplanned successions, though.

What happens when it’s time to retire?  Who might be willing to buy your stake in the business?  How do your partners feel about that?  How will your business be valued at the time?  And what happens if you’re forced into retirement involuntarily?

This is where buy sell agreements come into play.  They may seem mundane, but buy sell agreements are an important component of risk management in any small business.

In our financial planning practice there are a few common mistakes we see with buy sell agreements.  This post will cover those mistakes, as well as the standard provisions we tend to see in effective agreements.

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Your Business Is An Investment

Your Business is an Investment

Quick anecdote to kick off today’s post.

In a small town in the midwest there are two plumbers: Jim and Jason.  Both are 50 years old, and both are married with two kids who will someday go to college.

Jim and Jason are both great at their trade.  They are available when needed, charge a fair price for stellar work, and are well liked in the community.  They have the exact same number of customers in any given year, and both produce the exact same amount of revenue.

Their interest in building their respective businesses is where they differ.  Not from a revenue or growth standpoint, but from an operational standpoint.  Hiring & training support staff and new plumbers.  Systematizing and building process efficiencies.  Jim is hell bent on streamlining his business in an attempt to organize & simplify his work.  Jason is uninterested – he cares more about the customers and the work, and doesn’t mind when his professional world is hectic.

Now let’s fast forward 15 years.  Jim and Jason have brought in the exact same amount of revenue over the last 15 years.  But Jim has been far more efficient with how that revenue has been distributed.  He has systems, procedures, and operations built out to where his only duty is jumping in the car and driving out to see his customers.  Because of that he’s been free to spend more time with his family, and has packaged his business in a way that’s attractive to buyers.  He could sell to his employees or another party, and reap the value of the enterprise value he’s built.  The funds will contribute to his lifestyle in retirement.

Jason is ready to retire, but hasn’t been able to squirrel enough funds away to stop working.  He’s not been able to delegate much of his work to employees, and has virtually no systems or processes in place.  He realizes that in order for someone else to take over his business they would need to spend time – at least a year – working side by side to understand how he has everything set up.  Jason’s had to work twice as hard to produce the same revenue as Jim.  He’s enjoyed far less time with his family and his health has suffered.

It’s not surprising that a tightly run business creates more value.  What is surprising to many small business owners is the fact that failing to tighten up operations could be the difference between capitalizing on years of hard work by selling versus walking away with nothing.

Which gets us to the point of today’s post: your business is an investment.

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