Jump to content

All Activity

This stream auto-updates     

  1. Earlier
  2. Version 1.0.0

    1 download

    Burnside and Co. has summarized the United States Conference of Catholic Bishops (USCCB) Investing Guidelines for your ease of understanding. In our opinion, these guidelines are recommendations, not canon law. Some investors might choose to be stricter and more proactive while others may elect to be more hands-off. Much like religion itself, Catholic Value Investing can be very personal in nature. There is no “one-size fits all” strategy. Burnside and Co. can help you construct a customized Catholic Value Investing plan.
  3. Consumer Debt Consumer debt consists of debts that are owed as a result of purchasing goods that are consumable and/or do not appreciate. Installment Debt: Debt you pay back over a set period-of-time Car Loans Student Loans Appliances and other large household items Revolving Debt: Debt you can carry forever Credit Cards Investment Debt Borrowing to buy investments can be an effective way to boost potential returns Family Mortgage Bank or other Financial Institution Business Venture/Real Estate Take out a loan or line of credit Bank Private Lenders Borrow against your home equity Bank Margin Loan Brokerage Firm
  4. Employer Sponsored Plan Retirement Accounts Small Business SEP IRAs SIMPLE IRAs Solo 401k Large Business 401(k) Plans Profit Sharing Plans Government Employees 403(b) Plans : a retirement plan for specific employees of public schools, tax-exempt organizations and certain ministers. 457(b) Plans: A plan offered to highly compensated government and select non-government employees. Personal Retirement Accounts Traditional IRAs Roth IRAs Taxable Accounts Obviously, investors can simply deposit money in a traditional taxable investment account. This is a good option if you’ve maxed out retirement account contribution limits. It is also a good option if you want more flexibility with your money since most retirement accounts have penalties for early withdrawals.
  5. An asset class is a group of similar investments. The investments that make up an asset class are grouped together based on size, financial structure, financial markets where they are traded, and rules and regulations. The three main asset classes used for financial markets investing include: Stocks (Equities) Bonds (Fixed Income) Cash (Cash Equivalents) There are hundreds of sub asset classes that investors use to build investment portfolios. Keep in mind, there is rarely an agreed upon definition for a sub asset class. Some of the more popular ones include: Equity (Stocks) Large Caps: Companies with market caps that are $10 billion or above. Mid Caps: Companies with market caps that are between $2 billion and $10 billion. Small Caps: Companies with market caps that are less than $2 billion. Micro Caps: Companies with market caps that are between $50 million and $2 billion. Foreign Developed: Companies that are headquartered outside of the United States. Developed-market countries are widely industrialized, have established economies, and enjoy a stable and robust infrastructure. Emerging Markets: Companies that reside in countries that are not well developed. Fixed Income (Bonds) Short Term: Bonds that mature in 1 to 3 years Intermediate Term: Bonds that mature in 2 to 10 years. Long Term: Bonds that mature in 10 to 30 years
  6. Exchange Traded Funds (ETFs) are funds that track market indexes, commodities, bonds, or a basket of stocks. They are marketable securities that trade on exchanges like stocks. When you buy shares of an ETF, you are buying shares of a portfolio that tracks the yield and return of its underlying assets. The price of an ETF’s shares will change throughout the day as they are bought and sold.
  7. A market index is a weighted average of stocks, bonds or other investment vehicles from a section of the overall financial market. The index is calculated from the price of the selected securities. Well known indexes include: Dow Jones Industrial Average S&P 500 Russell 2000 Index investing is buying a mutual fund or exchange traded fund to mirror the yield and performance of an underlying index.
  8. An investment strategy that aims to find an equilibrium between risk and reward by allocating a portfolio's assets according to an individual's: Goals Risk Tolerance Time Horizon Ideally, in an asset allocation investment strategy, an investor wants to utilize assets that behave differently over time and have different levels of volatility. The three main asset classes used today include: Stocks (Equities) Bonds (Fixed Income) Cash (Cash Equivalents) There are hundreds of sub asset classes that investors use to build investment portfolios. Keep in mind, there is rarely an agreed upon definition for a sub asset class.
  9. What is a 'Tax Loss Carryforward'? A taxpayer can sell an investment at a loss and then ‘carry forward’ that loss to offset future capital gains and income. Stock market losses are capital losses. Stock market gains are capital gains. For tax purposes, gains and losses must be ‘realized’. Which means the stock needs to be physical sold. Calculating a Capital Loss Take your original cost basis (number of shares*price per share + transaction costs) and subtract the total sell proceeds. Example Bought ABC Company (1000 * $20 + $9.95) = $20,009.95 Sold ABC Company (1000 * $11 - $9.95) = $10,990.05 $20,009.95 - $10,990.05 = $9,019.90 Two Types of Capital Losses Short-Term Losses: when the stock is held for less than a year Long-term losses: when a stock is held for more than a year Deducting Capital Losses Capital gains can be offset with capital losses during a taxable year. If you don’t have capital gains to offset a capital loss, up to $3000 per year can be used to offset personal income. If there is left over losses, they can be carried forward to future years. There are specific rules on the proper way to match up short-term and long-term transactions that are beyond the scope of this post. It is advisable to speak with your CPA or read more in the IRS Publication 544 for further details.
  10. Federal Tax Brackets 2019 Annualy, the IRS adjusts tax brackets for inflation. This prevents ‘bracket creep’, a situation wherein inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power. The Tax Cuts and Jobs Act of 2017 changed the inflation measurement from the Consumer Price Index (CPI) to the Chained Consumer Price Index (C-CPI). Federal Tax Brackets 2019 For Unmarried Individuals, Household Income Over For Married Individuals Filing Joint Returns, Household Income Over Heads of Households, Household Income Over 10% $0 $0 $0 12% $9,700 $19,400 $13,850 22% $39,475 $78,950 $52,850 24% $84,200 $168,400 $84,200 32% $160,725 $321,450 $160,700 35% $204,100 $408,200 $204,100 37% $510,300 $612,350 $510,300 Standard Deductions Filing Status 2017 2018 2019 Single $6,350 $12,000 $12,200 Married Filing Jointly $12,700 $24,000 $24,400 Head of Household $9,350 $18,000 $18,350 If you are 65 or older you can increase your standard deduction by $1,600. If you file jointly on your marriage this amount will be $1,300 if one person is over 65, and $2,600 if both are over the age threshold. Disclaimer If legal, tax, or other professional advice is required, the services of a competent professional should be sought. This post should not be considered investment advice. This information is subject to change and/or be edited. Past performance is not a guarantee of future results.
  11. Custom-Made Financial Services Balancing Efficient Services with Individual Customization Burnside and Co. offers financial services to individuals that are looking to develop their net worth, invest in stocks and bonds, and plan for a retirement income. We have many processes that promote a disciplined, low-cost, and transparent experience for clients. However, we recognize that all people are unique. Therefore, Burnside and Co. is happy to customize the financial services experience for individual needs.
  12. If you are a well-established professional earning a meaningful salary, you have the potential to build a significant net worth. There are many ways to build a net worth, but the most common way is to trim off a certain amount from your salary and invest in the stock market. People invest in the stock market through their 401k at work, a personal IRA, a taxable account, or some other method. That leads to a common question for busy and productive individuals, “Am I saving enough?” This question can be answered by either: 1. Establishing a dollar amount that is needed to reach your long-term goals. 2. Determining a percentage of your salary that can be saved. The best approach is to establish a dollar amount. However, not everyone is ready to put on paper an actual end-goal and work backwards to come up with a hard figure. The next best thing is to commit to saving a certain percentage of your salary. Ideally, you want to save at least 10%. But more the better. Taking the alternative savings route, evaluate the following: 1. The percentage of your income that is currently being saved (“current savings”). 2. The percentage of your income that could be saved (“potential savings”). What is my “Current Savings Rate”? The percentage of my income that is currently being saved. Steps to make this calculation: 1. Write down the dollar figure that went into your 401k and other investment accounts in the last month. 2. Determine your monthly income. 3. Divide #1 by #2. Formula: (401k contributions + other investment account additions) / income What is my “Potential Savings” Rate? Potential Savings is the dollar figure that has the potential to be converted into Current Savings. Steps to make this calculation: 1. Document your monthly income (after tax but before 401k withdrawals). 2. Subtract “Need Expenses” (housing, food from grocery stores, health care/ hygiene, clothing, and other fixed costs unique to your circumstances). 3. Subtract Income from Need Expenses. 4. Divide the total by your monthly income (#3 / #1). Formula: income – need expenses / income Next: Calculate the difference between your ‘Current Savings Rate’ and your ‘Potential Savings Rate’? Questions to ask yourself: Am I currently saving 10%? Can I kick it into overdrive and get to my Potential Savings Rate?
  13. Net Worth Planning The evaluation of an investor’s current and future financial state by primarily using their net worth statement to make key financial decisions. As a reminder, A net worth statement is a snapshot of an individual’s financial health, at one particular point in time. It displays what is owned (assets), less what is owed to others (liabilities). Assets-Liabilities=Net Worth
  14. Net Worth Mindset A person with a Net Worth Mentality seeks to save and invest for the long-term. A person with an Income Mentality is constantly trying to increase their paycheck to enhance their short-term lifestyle. Having a Net Worth Mentality not only produces financial freedom, but the very act of saving and investing creates a sense of pride and self-worth.
  15. Net Worth Net worth is the amount by which assets exceed liabilities. Assets-Liabilities=Net Worth A healthy financial condition is to increase assets and eliminate debt if you are in ‘Build Mode’. For individuals in retirement or ‘Manage Mode’, the maintenance of current assets and the continuing rejection of debt is a good mindset.
  16. Qualified Charitable Distributions (QCDs) Changes in the new tax law (Tax Cuts and Jobs Act of 2017) means it’s less likely you can deduct donations to charity from your taxes. However, the federal government still allows for Qualified Charitable Distributions (QCDs). A QCD is a distribution of funds from your IRA account, payable to a qualified 501(c)(3) charity. If certain rules are met, QCDs can be counted toward satisfying your required minimum distribution (RMD). Benefits A QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. Keeping your taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare. Rules You must be 70½ or older The maximum annual amount that can qualify for a QCD is $100,000. IRA donations must go directly from the account to the charity. Typically the custodian submits them to the charity or else sends checks made out to the charity to the IRA owner, who sends them on. The distribution can't go to a private foundation nor a donor advised fund. Tax Tip You'll receive Form 1099-R reporting the distribution, but the form does not specify that it was a tax-free transfer to charity. If you work with a tax preparer, it's important to let him or her know that it was a qualified charitable distribution so you don't end up paying taxes on the amount. Operations An IRA distribution form will have a "Method of Payment" section where you complete the charity's name and address. Disclaimer If legal, tax, or other professional advice is required, the services of a competent professional should be sought. This post should not be considered investment advice. This information is subject to change and/or be edited. Past performance is not a guarantee of future results.
  17. Deducting Charitable Contributions Changes in the new tax law means it’s less likely you can deduct charitable giving from your taxes. Standard deductions were basically doubled as a result of the Tax Cuts and Jobs Act of 2017. Standard Deductions Filing Status 2017 2018 2019 Single $6,350 $12,000 $12,200 Married Filing Jointly $12,700 $24,000 $24,400 Head of Household $9,350 $18,000 $18,350 If you are 65 or older you can increase your standard deduction by $1,600. If you file jointly on your marriage this amount will be $1,300 if one person is over 65, and $2,600 if both are over the age threshold. As a reminder, you claim the larger of the standard deduction or the total of your itemized deductions. Since charitable gifting is an itemized deduction, the threshold of exceeding $24,400 is much harder for a typical US Household. Disclaimer If legal, tax, or other professional advice is required, the services of a competent professional should be sought. This post should not be considered investment advice. This information is subject to change and/or be edited. Past performance is not a guarantee of future results.
  18. Capital Gain Tax Rates Capital gain is when an investment appreciates in value above the original purchase price. Tax is owed when that investment is sold (realized). A capital gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes. Short-term gains are taxed at the sames rates as regular income. Long-term gains are subject to the following special rates: 2019 Federal Capital Gain Rates (Long-Term) For Unmarried Individuals, Household Income Over For Married Individuals Filing Joint Returns, Household Income Over Heads of Households, Household Income Over 0% $0 $0 $0 15% $39,375 $78,750 $52,750 20% $434,550 $488,850 $461,700 Many states also have capital gain taxes. Disclaimer If legal, tax, or other professional advice is required, the services of a competent professional should be sought. This post should not be considered investment advice. This information is subject to change and/or be edited. Past performance is not a guarantee of future results.
  19. A Required Minimum Distribution (RMD) is the minimum amount you must withdraw from your retirement account each year. Minimum distribution rules in this post apply to: Traditional IRAs SEP IRAs SIMPLE IRAs 401(k) Plans 403(b) Plans 457(b) Plans Profit Sharing Plans Other defined contribution plans When to start an RMD An account owner needs to start his/her withdrawals when they reach the age of 70 ½. The first RMD must occur by April 1st of the year after you turn 70 ½ . However, if you still participate in a 401(k), profit-sharing, 403(b), or other defined contribution plan, you can delay taking the RMDs until you retire (unless you own 5% or more of the sponsoring business). When to take an RMD (after the first time) Normally, you must withdraw your RMD by December 31. Tax Tip Don’t wait until April 1st for the first RMD. This will cause you to take both the first and second RMD in the same year. Thus, increasing your tax burden. Instead, your first RMD can be taken out by December 31st of the year you turn 70 ½. Calculating the RMD Take the account balance at the end of the previous year and divide it by the distribution period from the IRS’s “Uniform Lifetime Table”. Previous Year-End Balance/Distribution Period=RMD Penalties for failing to take RMD A 50% excise tax is assessed on untaken RMD amounts. Disclaimer If legal, tax, or other professional advice is required, the services of a competent professional should be sought. This post should not be considered investment advice. This information is subject to change and/or be edited. Past performance is not a guarantee of future results.
  1. Load more activity
×
×
  • Create New...