Throughout my career as a wealth manager and financial planner, I’ve found that one of the most misunderstood components of our financial lives is credit. Most people understand the basics – you borrow money from a bank/credit card company/mortgage lender and pay interest on the balance. But what many people don’t understand is how their credit scores are determined, and how those scores can impact their overall financial lives.
Atlanta Financial Blog
Focusing on Results that Matter
Recently, my wife and I bought a new house. She fell in love with it immediately and could see us raising our girls in the house, how could I say no? But of course, there were financial matters to consider. So, the planner in me immediately went to my budget spreadsheet to “crunch the numbers” and determine if we could afford it. We have both been blessed in our careers and while this new home is a stretch to the budget, the answer is yes, we can afford our dream home. So we decided to move forward. Now just the minor details of negotiating the purchase of the new home and selling our old home.
This is where I think I approached the process differently than many. There was only one result that mattered, purchasing our dream home – and a couple of variables that could derail it, the purchase price of the new home and the sales price of the old home. If those numbers worked, we were moving forward. With that in mind we made an offer which was accepted on the new home (and luckily below asking price.) From there, we just needed to sell our current home – with the emphasis on “just.” I had a floor in mind, anything below that just wouldn’t work. Note, that floor may not have been the absolute floor to allow us to afford the home, but the floor that allowed enough margin in the transaction and our budget to avoid undue financial stress going forward. The other side of that is that I was willing to leave some money on the table to accomplish the goal that was important to me, buying the house and moving our family into our Dream Home. How does that relate to retirement planning? Many people compare their results to the S&P, which has had a great run but does have a lot of potential risk, downside, and volatility. And especially in retirement, downside volatility can derail all your best laid plans. If you’re comfortable in retirement, you should be willing to trade some upside to achieve your ultimate goal, not outliving your money.
I’m learning from the older advisors in my life and other role models that while numbers matter and you must not make hasty decisions, there is a difference in maximizing your net worth and maximizing your financial happiness. Sure, could I have haggled with the seller a little more, possibly? If I would have waited longer, could I have gotten a few thousand more for my house, maybe? Could doing either of those have derailed my ultimate goal of buying THIS house? Absolutely. In the long-run, would $5,000-$10,000 affect my long-term financial success? No way. Should I have pressed it? Absolutely not. When you face an important life decision, seek out the objective perspective and wisdom an advisor can provide, reach out to me at cblackmon@Atlantafinancial.com if you would like to discuss what’s on your mind.
The tax law changes that went into effect in 2018, changed many things but tax planning moves are still available that can be implemented before the end of the year that can reduce your taxes in 2019. Whether you are self-employed or a W-2 employee, there are strategies available now that can reduce your tax bill if you act before the end of the year.
Cathy Miller Receives the Women’s Choice Award® as Highly Recommended Financial Advisor by Women for Women for Seventh Consecutive Year
Atlanta – November 19, 2019 – Atlanta Financial Associates, an independent financial advisory firm, recently announced that Cathy Miller, MBA, CFP® , CRPS®, CDFA™, has received the Women’s Choice Award® for Financial Advisors and Firms.
As the leading advocate for female consumers, WomenCertified Inc. selected Miller based on rigorous research and specific objective criteria; she has received this recognition every year since 2013.
This year marks our second year living with the sweeping tax law changes passed at the end of 2017, known as the Tax Cuts and Jobs Act. How did you fare under the new tax law, or do you know?
Many tax payers had pleasant surprises when they filed their 2018 returns, with smaller tax bills and/or larger refunds than usual. But some tax payers felt like they didn’t benefit from the tax cuts at all. As we met with clients in 2019, we found that for some of those clients the total tax paid was in fact higher, but due to higher income levels (from a strong economy and stock market), while tax rates actually did decline from pre-2018 levels. Unfortunately, for a significant minority of our clients, both rates and taxes paid were higher due to limitations on mortgage interest deductions, the elimination of personal exemptions and the cap on state and local tax deductions (the so called “SALT” deductions).
Regardless of which camp you found yourself in after filing your 2018 taxes, there is still time to minimize what you will owe for 2019 with smart planning. We have listed 9 tips to consider between now and year-end.