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Key Points

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wealth-concepts-2024-finance.yahoo.com-Are You Rich Heres The Net Worth You Need To Be Poor Middle Class And Wealthy.pdf.  file

Income is important for many reasons

• Provides funds to cover the cost of living (  housing, food, transportation, entertainment )
• Provides funds for savings, investments
• Your ability to spend and save is based on your income potential from wages, business and investment earnings and any other sources ( government, gifts )
• Are you building the skills and experience you need to generate significant income?
• How important is financial health to you and your family?
• Do you plan to retire or semi-retire in life?
• Do you get income from the government ?
• Do other people give you money?

Taxes are important for many reasons

Taxes are determined by MANY factors:

• Your marital status, your age, your income, where you live, how you earn money, what you spend, where you invest, and more
• All governments decide who pays taxes and who gets paid by the government
• All governments pass laws that favor some items and increase taxes on others ( smokers pay high taxes, 529 plans allow tax free education savings )
• Given the tax jurisdictions you are subject to, different factors affect your taxes
• Your advisor can help identify potential tax impacts of different actions and investments you take
• You should understand your options to earn, spend, invest, live and how taxes impact youplans allow tax free education savings )
• Given the tax jurisdictions you are subject to, different factors affect your taxes
• Your advisor can help identify potential tax impacts of different actions and investments you take
• You should understand your options to earn, spend, invest, live and how taxes impact you

Who is President in 2025 is important based on their tax policies

https://www.kiplinger.com/taxes/election-impact-on-tcja-tax-cuts

President Harris wants to increase taxes on working and middle class voters 2 ways 

1. Let the Trump lower tax rates expire in 2025 which raises middle class taxes
2. Tax on unrealized capital gains - IF your stock goes up in value from $2000 to $4000 you have an unrealized gain of $2000 taxes owed are $400 EVEN though you didn't sell the stock and you received NO income ! - If your stock goes down in value, does the Harris team pay you $400 ? No - its a 1 way deal that can steal your wealth
3. She wants to raise taxes on people with incomes over $400,000 per year on both income AND medicare tax. How accurate are Democrats on estimated impacts on who is hit by a tax increase ? Not very. The target income for a tax rate increase should be $1,000,000 per year

President Trump wants to

1. keep the lower income tax rates he signed in to law in 2017
2. will not tax you for unrealized capital gains because you did not receive any income from those unrealized gains

Wealth is important for many reasons

• In most cases, different types of wealth can generate funds or income or both
• asset investments can be bought and sold for net gains ( or losses ) - eg real estate, stocks, collectibles etc
• businesses can increase in value and be sold for funds
• businesses can generate income
• unless you want to work forever, creating wealth will give you future opportunities to raise funds and work less at some point

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need trade management plans for scenarios and automated alerts

Screen1 - Find High Yield Stocks with Moderate Risk - jim-view1 - custom view on Yahoo Finance

Created this custom screen for free on Yahoo Finance

Shows my watchlist with key data on pricing, yield, PE ratio, spread between dividends and eps, pre-market price etc

Image Added

KISS portfolio model

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Maximize Growth with Roth IRA

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https://www.investopedia.com/articles/retirement/05/introroth401k.asp

The Roth 401(k) account made its debut in the retirement investment community in 2006. Created by a provision of the Economic Growth and Tax Relief Reconciliation Act of 2001 and modeled after the Roth IRA, the Roth 401(k) is an employer-sponsored investment savings account that allows employees to save for retirement with after-tax money.

• A Roth 401(k) is an employer-sponsored savings plan that gives employees the option of investing after-tax dollars for retirement.
• Contribution limits for 2021 are $19,500 ($20,500 for 2022) for people under age 50, with an allowed $6,500 additional catch-up contribution per year allowed each for those age 50 and above.
• Although you pay taxes on your contributions, withdrawals that you take after age 59½ will be tax-free if the account has been funded for at least five years.

 the Roth 401(k) generates current revenue in the form of tax dollars

The money you earn today is taxed today. When you put this after-tax money into your Roth 401(k), withdrawals that you take after you reach age 59½ will be tax-free if the account has been funded for at least five years

2022 401K limit = 19600   — over 50  limit = 27000

example deduction amount for a deduction rate for given a salary

var salary = 160000;
var rate = .12;

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rate = .03;
0.03
console.log(` 401k total contribution based on rate ${rate} = ${ salary * ( rate ) }`);
VM20631:1 401k total contribution based on rate 0.03 = 4800

Impact of higher future tax rates on Roth decisions

While it may seem intuitive that most investors will experience a decrease in their tax rate upon retirement, retirees often have fewer tax deductions, and there's also the potential impact of future legislation, which could result in higher tax rates. Considering the uncertainty of tax rates in the future, young workers who currently have lower income tax rates may want to consider investing in after-tax programs like the Roth 401(k), essentially locking in the lower tax rate

Roth 401K rules

1. Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72, which forces investors to take distributions even if they don't need or want them.3 
2. The distribution requirement can be avoided by rolling over to a Roth IRA, but doing so is an administrative hassle, and legislators may change the rules at any time to forbid such transfers
3. Any matching contributions your employer makes to your Roth 401(k) must be deposited into a traditional 401(k) account

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• A Roth 401(k) can be rolled over to a new or existing Roth IRA or Roth 401(k).
• As a rule, a transfer to a Roth IRA is most desirable, since it facilitates a wider range of investment options.
• It is best to move the money to an existing Roth IRA account, if you have one, because of the five-year rule governing qualified distributions.2
• If you plan to withdraw the transferred funds soon, moving them to another Roth 401(k) may provide favorable tax treatment.
• Roth 401K investment options more limited than Roth IRA

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1. a health savings account
   1. check the limitations on both contributions and valid expenses as they change
2. Contribute to a Roth IRA or Roth 401K 
   1. depending on your income tax level Roth accounts MAY be better long-term for higher returns
   2. Roth accounts do not have RMDs 
   3. If you can't directly contribute to a Roth because of income level, Look at back-door Roth conversions from an IRA
3. Municipal bonds and funds
   1. Is the rate high enough compared to other investments?
   2. how long is the duration of the bonds now?
   3. are the bonds callable if rates drop?
4. Social Security payments
   1. based on your income level up to 85% of Social Security Income may be taxable as regular income
5. Cash value life insurance
   1. If you are married, have children, have maxed out your contributions to your existing retirement account, or
      are in an upper tax bracket, cash-value life insurance might be a great way to achieve the financial freedom
      we all want.
6. Inheritances - where and how much tax do you pay?
   1. States with inheritance or estate taxes /state-estate-tax-inheritance-tax-2023/
   2. The federal estate tax generally applies to assets over $13.61 million in 2024, and the estate tax rate ranges from 18% to 40%. Some states also have estate taxes, and they might have much lower exemption thresholds than the IRS. Assets that spouses inherit generally aren't subject to estate tax.

Equality or Equity - Which is Fair?

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Equity - You work twice as much as me, produce twice the value I did and took twice the risk I did but we are paid the same

The government is no different than ordinary family. I gave my brother a car and he didn't even say thank you because it was my old car. He figures that since I make more than him I'm rich and should have given him a new car. This plays out the same with all my family. I tell them I work for a living and have bills, but it falls on deaf ears because my earnings are $150K per year and the make less than $50K. Since they pay no income tax they figure I don't either etc.... You know the rest. I should be paying my fair share of my saved assets to them so they can live like me. For some reason we should be equals even though I worked my tail off all my life and face 10x the pressure they do. None of that matters. I have saved more and make more and the deserve some of it. Equality will get more and more play going forward and some kind of communistic revolution is coming in the next 30 yrs. Just wait until these youngster control government. Taxes will be 90% and everyone will be equals.

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Yep. No matter how much they pay, it is never enough. Especially in the minds of people who've been brainwashed into believing that the "rich" are bad people that made their money at the expense of the poor and then avoided paying taxes.

>> asset value risk

This strategy worked well from 1980 to 2021, when declining interest rates virtually assured increased asset prices. Maybe not so today.

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How to get started on building wealth for the average person - it's a choice

I've got over a million dollars in real estate debt on which I'm paying about 3% interest, I have tenants paying my mortgages with a profit left over for me. I have a bunch of dividend paying stocks which earn nearly 10% paid monthly. When I die my heirs get all the real estate growth (hundreds of thousands) with a step-up. I'm a high school drop out. I used to live on rice and beans when I started. It's called get an education, live below your means, start small and keep building.

<< worked hard, saved hard, manages his good investments actively, 

States with inheritance and estate taxes

https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/estate-and-inheritance-taxes

Good set of investment critieria for Equities

invest-valuation-criterial-good-seekingalpha.com-5 Relatively Safe And Cheap Dividend Stocks To Invest In - July 2023.pdf file

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https://www.financecharts.com/etfs/SPY/performance/total-return

The total return for SPDR S&P 500 ETF Trust (SPY) stock is 7.62% over the past 12 months. So far it's up 15.32% this year. The 5-year total return is 66.34%, meaning $100 invested in SPY stock 5 years ago would be worth $166.34 today. Total return includes price appreciation plus reinvesting any dividends paid out.

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SP500 compared to growth stocks and ET over 5 years

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_economic-indicators-seekingalpha.com-Weekly Indicators Profits Make 3-Year Low As Stocks Hit All-Time High One Is Wrong.pdf file

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https://www.financecharts.com/stocks/ET/performance/total-return

The total return for Energy Transfer LP (ET) stock is 20.78% over the past 12 months. So far it's up 17.69% this year. The 5-year total return is 13.65%, meaning $100 invested in ET stock 5 years ago would be worth $113.65 today. Total return includes price appreciation plus reinvesting any dividends paid out.

see more on Energy Transfer analysis here: 

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• Social Security recipients will get a 5.9% raise for 2022, compared with the 1.3% hike that beneficiaries received in 2021.1
• Maximum earnings subject to the Social Security tax also increased—from $142,800 a year to $147,000.
• Other changes for 2022 include an increase in how much money working Social Security recipients can earn before their benefits are reduced and a slight rise in disability benefits.
• Social Security tax rates remain the same for 2022: 6.2% on employees and 12.4% on the self-employed.
• It now takes $1,510 to earn a single Social Security credit, up just $40 from 2021.2

Maximize Social Security for your Spouse

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These guidelines were adopted by the Consumer Financial Protection Bureau (CFPB) to help prevent poor lending practices that sparked the previous financial crisis.

A Non-Qualified Mortgage (Non-QM) is a loan that doesn’t meet the standards of a qualified mortgage and uses non-traditional methods of income verification to help a borrower get approved for a home loan. 

Manage automatic credit payments better

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The credit services all have ways you can manage cancelling the automatic payments on their end if the vendor side doesn't work

For Paypal - log in to your PayPal account, go to Profile, and click My money. Update your agreement in the "My pre-approved payments" section.

Live - What's important today for you?  tomorrow for all ?

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In terms of the time you're taking to work out, HIIT has a clear advantage, as you'll be burning a higher number of calories in a shorter window than you would be during a lower-intensity session. However, this also requires a higher skill level, explains Beaugrand. "If you're doing sprints, you need to be at least good enough to be able to do that in all-out intensity," he says, "whereas in lower or moderate intensity, we don't need a lot of skill for that, we can do something like walking, riding our bike, going out for a hike."

 "If we're doing a significant amount of steady-state cardio, we're creating this adaptation response where our body wants to be good at cardio," says Beaugrand. "Being good at cardio and being a good bodybuilder don't necessarily go hand in hand."

https://www.menshealth.com/fitness/a37465121/physique-coach-weight-loss-advice-shredded-abs-paul-revelia/

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10 Steps to Financial Security Before Age 30 pdf

1. Track Your Spending

A free budgeting app like Mint can help you do this.

2. Live Within Your Means

Keep your standard of living below what your earnings can accommodate

3. Don't Borrow to Finance a Lifestyle

Borrowed money should be used when your gain will outrun your borrowing costs. This might mean investing in yourself—for your education, to start a business, or to buy a house.

4. Set Short-Term Goals

 set a series of small short-term goals that are both measurable and precise—for example, paying off credit card debt within a year or contributing to a retirement plan with a set contribution each month

5. Become Financially Literate

Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life. Making sound financial and investment decisions is important for achieving your financial goals.

6. Save What You Can for Retirement

Try setting up automatic monthly contributions to a retirement plan, such as an employer-sponsored 401(k) if you have access to one, or an IRA if you don't. You can increase your contributions when your income rises or when you've achieved more of your short-term goals.

7. Don't Leave Money on the Table

If you work for a company that offers a 401(k), make sure to contribute at least up to the maximum of what your employer will match, otherwise you are leaving money on the table. In addition, you can deduct your contributions in the year you make them, which lowers your taxable income for the year.1

8. Take Calculated Risks

Examples of calculated risks include:

• Moving to a new city with more job opportunities
• Going back to school for additional training
• Taking a new job at a different company for less pay but more upside potential
• Investing in high risk/high return stocks

9. Invest in Yourself

Look at yourself as a financial asset. Investing in yourself will pay off in the future. Your skills, knowledge, and experience are the biggest assets you have. Increase your value by continually upgrading your skills and knowledge and by making smart career choices.

10. Find the Right Balance

Striking a proper balance between your life today and the future is also important. Financially, we can't live as if today is our last day. We have to decide between what we spend today versus what we spend in the future. For example, set a short-term goal to save for a trip to a destination you've always wanted to see instead of using a credit card to finance it. Finding the correct balance is an important step toward achieving financial security. 

11. Generally avoid credit card loans

You should ALWAYS pay off credit card debt monthly to avoid the finance charges that can legally run up to 30%

KEY TAKEAWAYS

1. Knowing how much you spend can keep spending in check.
2. Live within your means, don’t use credit to fund a lifestyle, and set short-term achievable financial goals.
3. Become financially literate and save what you can for retirement.
4. Take calculated risks, such as moving to a city with more job opportunities or taking on a new job that pays less but has more upside potential.
5. Invest in yourself by continually upgrading your skills and knowledge.
6. Strike a balance—working toward financial security doesn’t mean you need to deprive yourself.

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1. Self-confidence
2. Empathy
3. Self-control
4. Integrity
5. Curiosity
6. Perseverance
7. Optimism

Jim Mason

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The problem is if you transfer assets outright, you are exposing those same assets to a second generation of estate taxes. And if you try to transfer assets directly to your grandchildren, you could be exposing those assets to a third set of taxes called generation-skipping transfer tax (GSTT). That is the dilemma. Most people I deal with who want to include their grandchildren in their planning just do not realize those assets could be subject to another tax due.

Trust options

if you own a Family Limited Partnership (FLP) or Limited Liability Company (LLC), possibly owning real estate or having a large equity portfolio, these assets offer tremendous gifting and wealth transfer opportunities. You do not even have to give up control of these assets, you just must want to provide for your family one day in the future and protect them for always.

Dynasty Trust 

A dynasty trust is created to transfer wealth from generation to generation without being subject to the various gift, estate and/or GSTT taxes for as long as the assets remain in the trust, based on applicable state laws. In addition, a dynasty trust can protect those assets from creditors, divorcing spouses and other issues.

A lot of people use an irrevocable life insurance trust (ILIT), and they transfer the assets free of trust upon death. And most living trusts are transferred the same way, without the benefit of being held within trusts.

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Let us assume you have a limited liability company that owns real estate, and you want to transfer that real estate to the children one day in the future. Why not gift non-managing member shares of that same LLC to the trust, and allow those shares to generate enough income to buy life insurance within the trust? Think about this: You are taking a tax-favored and leveraged asset — life insurance — and now making it tax-free for generations to come. Life insurance is a very effective vehicle for wealth transfer planning. Additional advantages of this planning: no annual gift tax returns and no Crummey letters required. When you gift assets for life insurance or various outright gifts you use a vehicle called Crummey gifts (named after the subject of a landmark tax case in 1968), otherwise you could be subject to taxation on the gift.

If you want to protect your children, their children, and your great-grandchildren, and provide for them, put a dynasty trust together, buy life insurance, and you are on your way.

Step-by-step guide for Example

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