More for your Money! (Well, a little more anyway)

Getting a decent interest rate on your money these days is not an easy task. In fact, if you want your money to be liquid, it’s basically not possible, without some element of risk. So, what do you do?

Simply put, the best that you can. The rule of thumb for cash is to have 3 to 6 months worth of expenses on hand at any given time. So, if your cost of living is $5,000 a month, you are supposed to have $15-30,000 in the bank in cash. Admittedly, not many of us keep that amount of cash on hand but for how ever much cash you do have you might as well get the most interest possible.
In my experience, the bank that you do most of your daily transactions does not have the best rate. The BIG banks seem to have incredibly low rates of interest on their cash accounts. I’ve seen rates as low as between 0% and 0.2% at banks such as Bank of America, Chase, Wells Fargo, U.S. Bank and Union.
Instead, I choose to keep my cash out of the hands of the major banks and place it with an on-line institution. Now, don’t get me wrong. These are not necessarily small companies, it’s just that they typically don’t have brick and mortar local offices for you to visit. You will have full access to your money through transfers directly to your regular bank and the money is typically insured to the limits placed on all accounts by the FDIC. However, the rate of interest can be 7 or 8 times that of your regular bank.
bigstock-Businessman-Chasing-Money-9749660-e1362977614808Don’t get too excited. It’s still only 0.75% to 0.90% but if you’re only getting 0.1% at your regular bank it makes a fairly significant difference. For example, if you were fortunate enough to have $100,000 in the bank, you would receive $1000 in annual interest versus $100. I don’t know about you but I’m quite happy to have an additional $900 in my pocket (less taxes of course). Even if your balance if $10,000, you still get $90 instead of $9. Who am I to throw away good money!
So, take a look at Capital One, Ally, American Express and Mutual of Omaha. They all have banks that boast these HIGH rates (NOT). Better than a sharp stick in the eye.

The Government Credit Card

government credit card account examples

I always thought that death and taxes were the only two absolutes. Apparently, especially if you own a home, water and power are fairly close to the top of the absolutes list. I guess this is true unless you use candles, live near a river or a place where it rains regularly.
Currently, if you live in California, we have a water shortage. We also, especially in Southern California, have many more days of sun that we do rain. Dah, that’s why we have a water shortage! So, what can you do to help  yourself while helping us all?
First of all, talk to your local solar company. It seems that in some cases, the cost (investment) of putting in solar panels is no more than your power bill. This is partly because of the 30% tax credit provided. Yes, a tax credit. What’s the difference between a tax credit and a tax deduction? I’m glad you asked. A tax credit means that your tax bill is reduced dollar for dollar by the tax credit. So, if the solar system costs $20,000 and the tax credit is $6000, your tax bill, of let’s say $10,000 is now $4,000. It’s CASH! Make the call and check to see if this works for you. You might just find that it saves you a small fortune.
Secondly, your lawn. This water-sucking piece of landscape probably accounts for 20-50% of your water bill. Get rid of it. In addition to saving you money on your gardeners (sorry gardeners) it will dramatically lower your water bill. Oh, and by the way, because California has so much money laying around (NOT) they will pay for most or all of the work. There are companies available that all but guarantee that it will cost you nothing (net) to get it done. There are limitations of course. You have to be replacing grass, not dirt, you can replace it with fake grass or desert landscape, pictures have to be submitted of the before and after and you get about $3-4 per square foot. Some of the companies will finance the job at zero interest, so you’re not out of pocket (other than monthly payments) while waiting for your rebate.
All told, the above could save you thousands of dollars per year. Whether it works for you depends on a number of variables but it’s certainly worth checking out, don’t you think?
Let me know if you need referrals. Don’t simply pick people out of a Google search.

Credit Card Death

um… I meant to say Debt!

Maybe I was right the first time. Credit card debt probably does feel like credit card ‘death’ (or death by credit card) to some of you. I’ve been there and done that and I’m not doing that there, again!

So, how do you get out of this ‘death trap’. Pay it off of course. I know, I know. It’s not that simple. Let’s face it. Sometimes, there’s so much debt, the only way to get out from under it is to negotiate the debt or file bankruptcy. No judgement here. Sometimes, ya gotta do what ya gotta do.

WarpedCredit CardsmallHowever, if you can pay it off, given  the right circumstances, there are some opportunities you need to know about and they come in the form of zero percent, no annual fee, no penalty credit cards. It’s true that you have to have decent credit and you may not be able to refinance all of the debt but imagine this scenario. You have $20,000 in credit card debt at 20%. I know that your balance is declining so this is not entirely accurate but essentially you are paying $4,000 in interest annually. If you are paying $400 a month against that debt, you will only be paying down the principal by $800. Give or take, you paid $4800 and still end up with a balance of $19,200 at the end of one year. Blimey, where’s the lucky Irish when I need ’em? However, if you had a zero percent credit card, your balance would be $15,200. Theoretically, if you were able to continue to receive zero percent deals, you would have your debt at zero in just over four years. Can this be done?
Well, yes and maybe. Right now, there are several companies offering zero percent credit card deals for 18 months. That’s the yes. The maybe is that no one knows whether another zero percent deal will be available when the 18 months is done but it’s a very good start!

So, my suggestion is that once you’ve read this, passed it on to all of your friends, posted it on Facebook, tweeted it and anything else that you can think of to promote this great idea, go to and enter ‘zero percent credit cards’. There will be quite a bit to read. Do your research. Be diligent. Choose the best option and TAKE ACTION.

If you need help, give me a call directly at (818) 606-7327 or e-mail me at Good hunting.

I Can Do It Myself!

Fotolia_49191651_Subscription_Monthly_M-560x260Sure you can. Me too…NOT!! Don’t be penny-wise and pound-foolish as the old saying goes. Hire an accountant and save yourself time, money and aggravation.
Think about it. If your combined federal and state tax bracket is 25%, you save $25 in taxes every time your accountant finds you another $100 in deductions and it goes up from there. If you are in a 50% combined federal and state tax bracket, your accountant will save you $50 for every $100 in deductions found. So, if your accountant charges $350 for a basic tax return, $700 to $1400 of additional deductions need to be found to cover the accountants fee. Everything beyond that is all for you.
My experience has been that most accountants can find that kind of money in their sleep. So, what are you waiting for???????

An Oldie But A Goodie

Let me preface this entire discussion by saying that regardless of what I say here, you must talk to your tax advisor before you do anything. Why? Because it’s entirely possible that I have absolutely no idea what I’m talking about!

ira-351x217Be that as it may, there is still at least one good way to save taxes and get a bigger refund for 2014. As boring as it may sound, it’s the good old-fashioned IRA. It is my understanding, based on information that I have received from people far smarter than me, that one can contribute up to $5500 for 2014. In addition, for those of us fifty years old or older, we can contribute an additional $1000 using the ‘catch-up’ provision. These rules apply to both the ‘Traditional IRA’ and the ‘ROTH IRA’. The difference being that the Traditional IRA provides for a tax deduction currently while being taxed on distributions and the ROTH provides for no tax deduction now but no taxes being due on distributions.
This is one of the reasons that you need to talk to your tax advisor. Do you need the tax deduction today or would it be better for you to have a tax free distribution later? That is the $5500 question. Remember, not everyone qualifies for an IRA.

So, let me ask you a question. While it may matter to you individually which of the IRA options you use, from a purely mathematical prospective, do you end up with more money using a Traditional IRA or a ROTH IRA? If you think you know the answer, please visit The Wealth Creator Company’s Facebook page by clicking on The question has already been posted. The first person to get the correct answer and ‘like’ our page will receive a $10 Starbucks card.