Financial Advice for the 99 Percent

                                                                    

If doesn’t matter if you make $20,000 or $2,000,000 a year, everyone needs help with managing their money and meeting their financial goals.  You can use self-help resources such as books, television shows, seminars or courses but you may reach a point where you need additional help, that’s when a financial advisor comes in handy. If you do not have a financial advisor you should consider hiring one as your income increases, lifestyle changes occur such as marriage and children and assets increase such as purchasing a home, investment property or starting a business.

Financial advisors help clients reach their financial goals including retirement, paying for college education or starting a business.  Some financial advisors can also assist with creating a budget or spending plan, paying down debt, choosing investments, managing their finances, taxes, savings and wealth management. Financial advisors are not just for the wealthy. Financial advisors help clients at all income levels.  Shop around to find the right one for you.

There are two types of financial advisors:  fee-only and commission-based.  Fee-only advisors charge a fee for their services usually $150-$300 an hour or per session or may charge a fee based on the annual percentage of assets that are managed. Fees should be disclosed up-front. Fee-only advisors offer unbiased advice because they are not motivated or required to sell products and services to get paid.

Commission-based advisors receive a commission by fund companies or brokerages for the sale of financial products and services and receive a percentage of the total amount clients invest in specific products.  Commission-based advisers receive a percentage of the total number of transactions a client makes and may charge 0.5% - 2% of the assets they manage for each client. Commission based advisors are more concerned with their own career needs than their clients’ needs because they are motivated or required to sell products and services to get paid.

A financial advisor can:  help you generate more money for you and your family, help you to be better prepared for changes in your life, provide protection against mistakes and unexpected circumstances, provide stability and peace of mind by ensuring your financial goals are met, save time, provide guidance on retirement and investment options, decrease your tax liability, determine insurance needs, and analyze risks. Here are 23 reasons to hire a financial advisor:

1. You heard about a financial product or service that you think may be a good choice for you.
2. You want a second opinion on a financial matter.
3. You don’t have any debt or financial issues and don’t feel you need any help or that you know everything you need to know about finances.
4. You want to or are currently saving for retirement.
5. You want to retire early, start a business or do volunteer work in another country.
6. You want to setup investment accounts to fund college education.
7. You have personal financial obligations to family members or others.
8. You want to learn how to track spending.
9. You need help to create and meet financial goals.
10. You want to address credit issues.
11. You want to develop good spending habits.
12. You want to organize your finances.
13. To help you save money on fees, interest, etc.
14. To help you earn more money for savings and retirement accounts.
15. You want to analyze your insurance needs.
16. You want to achieve financial goals.
17. You have a lump sum of money to invest.
18. You want to create generational wealth.
19. If you are getting married or getting a divorce.
20. You experienced a financial crisis.
21. You want to buy or sell a home or investment property.
22. Death of a spouse.
23. You want to donate a large sum to charity.

The Buffett Rule Why the 1 Percent Should Pay

Yes, I support the Buffet Rule.  The 99% pay most of the taxes in the country.  Many low-to-middle income families pay too much in taxes.  The 99% pay taxes based on their earnings and assets therefore the 1% should be required to follow the same guidelines.

The Buffett Rule is named after investor Warren Buffett who stated in 2011 that he opposed rich people paying less in federal taxes, as a portion of income, than the middle class, and voiced his support for increasing income taxes on the wealthy. 

The Buffett Rule is a tax plan that was proposed in 2011 by President Obama. The tax plan would apply a minimum tax rate of 30% on individuals making more than a million dollars a year to ensure that they do not pay a smaller percentage of income in taxes than non-wealthy Americans.  If enacted, the rule change would result in approximately $36.7 billion per year in additional tax revenue and would help to slightly reduce the country’s deficit.

Some of the reasons for the disparity in taxing wealthy Americans are due to the fact that revenue from long-term capital gains is taxed at a maximum rate of 15%, tax breaks for corporations and the wealthy such as estate taxes, tax deferred investments and off-shore investments.

Senator Harry Reid stated “7,000 millionaires paid no federal income taxes in 2011” and approximately 250,000 taxpayers file income taxes with adjusted gross income of $1 million or more. According to the Tax Policy Center by 2015, approximately 2,000 – 3,000 taxpayers with an adjusted gross income of more than $1 million would pay a tax of 15% or less. Here are 6 ways to make the 1% pay.

1. Call.  Call your local television and radio stations and newspapers and demand additional coverage on taxpayers who paid less in taxes than the 99%. 
2. Write. Write and call your local congressman and other city and state politicians to request that the wealthy pay more in taxes.
3. Pay.  Make sure you pay your taxes.  The lack of taxes paid also contributes to the country’s deficit.  Paying taxes owed helps to generate revenue and helps to slightly reduce the deficit.
4. Plan for the future.  If the economy continues to improve at a slow pace, this will affect many government agencies who will continue to raise costs on city services.  Reduce your spending by 30-50% to save money and ensure you can for the increasing costs of city services and fees.
5. Vote. Voice your concerns about issues that affect you or affect your community, family or friends.  Voice your concerns by voting at primary and general elections.  Your vote does count. Don’t complain if you don’t vote.
6. Don’t forget. Many times taxpayers voice their concern about an issue for a week or two and then forget about it.  If this is an issue you feel strongly about voice your concern until you see a change or at least until the next presidential election.