Reading for comprehension can save you money and more

Something needs to be said about how we read.  I acknowledge when I am reading for pleasure depending on the article I generally just scan through it at first to see if anything perks my interest.  If something does I go back to the beginning and give it a somewhat more committed effort.  With my work, however, I feel I need to clear my mind because of the sheer amount of detail I have to take into consideration.  Most of us simply do not take the time to read for comprehension.  Being short of time, always on the go, we tend to scan through documents picking a few words and then running on assumptions.  Again for casual reading this is sufficient but for legal documents, tax returns etc., we are required to establish a certain degree of understanding before putting our name to a document.  Important to acknowledge that by signing your name to any document you are legally libel for the contents.  Simply put you own the statements therein.

Technology has advanced tremendously, and continues to do so at a rate much faster than most people are able to keep up with.  Just because something is advertised as being simplified it does mean that it is simplified for everyone.  Our capabilities and comprehension differ.  Right Brain – Left Brain and all that comes with it.  That you do not know something or nor understand it does not make you a lesser person.  Failure only comes in when you forego seeking assistance where you clearly need it.

Growing up my mother always used to hammer into our heads “ a Jack of all trades is a master of none”.  For some being a ‘Jack of all trades’ is a good thing but for my mother its simply failure to excel.  In my mother’s eyes it means you are mediocre at everything.  She believes you need to master something – your thing – choose one thing that you are absolutely great at and everything else you only need a working knowledge to decipher where to seek masterful help.   This way of thinking continues to serve me well.  While I still believe in doing a great deal of things for myself I never waste my time battling with something that someone else can do more efficiently with no adverse ramifications on my part.

I had a client call me several times this week because their FAFSA application was being questioned for ‘irregularities’.   She was pretty sure she knew what she needed and asked me for specific documents that she was required to submit with her applications.  I questioned the period she was asking for and she said she had talked to someone at the FAFSA office and these documents were exactly what she needed.  I told her that I might be wrong but it did not sound right but I nonetheless facilitated in getting her what she requested.

Needless to say a day or two later she was back with more questions but now much less confident.  I discussed with her that in today’s world when you are asked for information one should not take the request lightly as 99% of the information will require some sort verification that is independent of you.  Her husband had prepared their tax return and miscoded one of the two the Form 1099Rs that he entered and had completely omitted another one.  On the surface it might seem like nothing but the miscoded form was for a “Deemed distribution” for a loan that was outstanding when her employer terminated their retirement plan.  The amount needed to be added to her taxable income for 2013 but her husband had coded it as a rollover.  The resolution is an amended tax return to ensure that their income for 2013 is correctly reported.

Now I am not saying everyone should seek the assistance to CPAs, Enrolled Agents or a Registered Tax Return Preparer.  If your return is simple, Form W2, then definitely save yourself the preparation costs and do your own return, but please take the time to read the questions being asked by the software you using for there is always a very logical reason when the questions was asked in the first place.  If however, your income is a little more complicated or you have had “life event” that might require more schedules than you normally need to file it is foolish to presume you will catch up on all the necessary tax changes to walk it alone.  If you are adamant to do your own return then surely take the time to do the necessary research or at a minimum have someone else review your work before filing your return. 

No excuse for getting it wrong when today everything is at our finger tips - one only needs to take the time to read and comprehend!  

Your compensation vs a stranger's sexual preferences - which one is more important to you?

It boggles the mind how Americans in general will go to the ends of the world to express their views (for or against) on someone else's sexual preferences but when it comes to their own compensation they become mute.  When the debate ending DOMA was raging strong people from all walks of life put in their two cents worth.  Passions were high - those in support marriage equality were 100% behind President Obama - held his feet to the fire where they felt it necessary, the push itself was unrelenting to say the least.  Those against it, equally passionate - foreseeing the end of the world as we know it, made their voices heard and continue putting an equal amount of pressure trying unsuccessfully to sway things back to their way of thinking.

In 2014, though some conservatives still continue to fight a losing battle to prevent marriage equality, President Obama has moved onto making income inequality the next war-front but this time round it appears he is on one side by himself, and on the other side is corporate America fighting hard to keep their margins in place.  The American people (for whom Obama is fighting to increase their compensation with whatever tools he has available to him) are sitting quietly on the sidelines, being spectators as though they do not have any "skin in the game".  That passion that was raging strong as it intrusively pried into the bedrooms of strangers has surprisingly lost its fervor.

There are those who feel that Obama's efforts are socialistic in nature being imposed on a capitalistic economy.  These people hold the view that USA is the land of opportunity and that if you work hard enough you can achieve anything - you can build wealth, you need only pull yourself up by your "boot straps".  Unfortunately for those struggling to pull themselves up into middle class the "bootstraps" that were provided in the form of a good education, well paying manufacturing jobs that came with good solid pensions and health insurance are no longer around as a way to the middle class.  No,  steadily Corporate America has been reducing the number of employees on one end while drastically the number and value of employee benefits; and basic compensation itself has not kept in stride with the every rising cost of living.

The biggest reduction in the workforce came as a result of the great recession of 2008.  The majority of companies downsized their payroll by staggering numbers as they tried to stay afloat during very uncertain times.  The employees that remained under employment saw their workload increase without the corresponding increase in compensation.  Through 2009 and 2010 conventional wisdom was that one should simply be grateful that they have job at all and needing to be properly compensated for the work you did was a luxury many had to forgo.  The majority of employees today still feel obligated to be grateful to have "A JOB" especially as unemployment remains relatively high for an economy that is supposed to have recovered.  Most employees are extremely unhappy but do not dare switch jobs out of pure fear of LIFO -  being the new kid of the block  "last in first out"have.  This is primarily why President Obama is fight income inequality by himself.  People are afraid - they believe the threats that Corporate America is giving.  Most continue to struggle and bridging the shortfall between income and expenses by dipping into their regular savings and retirement accounts.

According to the Congressional Budget Office (CBO) the increase of minimum wage to $10.10 that the President is proposing will effectively increase the income of approximately 16.5 million people.  Those pushing against the increase use the same report, stating that we need to save the jobs of approximately 500,000 that are likely to lose their jobs should the minimum wage be increased.  Little is said about the 900,000 who will be raised out of poverty.  As I have said before this baffles me somewhat.  An employer is willing to let go some employees because he feels he cannot afford the payroll, cannot possible cut his profit or adjust his pricing somewhat.  How cutting his labor affects his business is something that no one seems to bother explain.  My assumption would be the remaining employees are asked to take on more work since they technically they have been given a pay increase.

If for the 500,000 losing their jobs was purely for the fact that they had least skill set and in turn they felt moved enough by the loss to improve themselves it would all be beneficial process in the end.  Unfortunately most people when they lose their jobs its never about them but how wrong the employer was.  I asked someone the other day why they temp, she replied it was because she had lost her permanent job and finding another one has proved difficult at best.  "Why not try for a permanent position with the companies that you are temping with?" I asked her.  "Oh they told me that in the current environment I did not have required skill set" she responded. "Did you ask what skills would be required ?"  "No."  To me she appears very content, content being stuck with no growth.  Her lack of desire or drive to improve herself so that she has the relevant skill set is scary notion that she believes at some point employers will require less than they are now. So she waits.  Were she nearing retirement one would try and understand but for a young woman in her late 30s mind-blowingly retarded.

Avoiding probate by using transfer-on-death instruments

Dealing with one's mortality has always been somewhat of a difficult hurdle to jump over.  Most of us wait until death is persistently knocking on our front door, before we acknowledge that there is some preparation that is required of us.  The fear of the unknown scares the majority of us into shutting down the whole process.  Preservation of ones' wealth makes it a necessary evil, an inevitable process.  Avoiding burdening our loved ones with handling all our financial problems, problems that we could have handled ourselves prior to death, gives them time to mourn our passing instead of cleaning up after us.

Once someone said to me people with long-term illness are lucky in a horrible way, because they are stopped in their tracks and made to face their mortality, while the rest of pretend the day will never come.  Waiting until one is terminally ill is something of a gamble because you are working on the assumption that you are 100% sure you will get a warning of sorts. I personally feel if we learn to live our lives to the fullest - each day as though it was the last but also as though it was the beginning of something new; this will make it somewhat easier to be prepared for the inevitable. Do not procrastinate living your dreams least you run out of time. 

You work so hard to acquire the property that you have and should want your loved ones to get as much of it as possible.  There are plenty of instruments available that afford you the opportunity to protect your assets and ensure that the people you wish to inherit your wealth are the ones the ones that ultimately inherit it.  In the absence of clear and direct instructions upon your death your property becomes subject to probate.  Meaning legal proceedings, directed by the courts, will determine who inherits your property.  This can be a very costly, long and confusing process for your loved ones to endure.

I had a client once who fought a long battle with cancer. She had two siblings, one told her she needed to make alternative arrangements for her own care that did not include them, because they felt not well equipped to deal with her illness nor the inevitable death. The other sibling practically gave up their own lives to be her primary caregiver during her last days.  Being single and never had any children (now not there are any guarantees that your children will readily look after you should you need it either) absence of family can make a bad situation worse.  During our many conversations she would reiterate how she wanted Marybeth, (the sibling looking after her) to inherit all her assets, and to ensure that Sarah got nothing.  Sarah's absence during her sister illness was difficult to accept.  With all the planning, having all her accounts to transfer-on-death, there was unfortunately an account that she had forgotten about.  The account went into probate and was split between her two surviving siblings, following the law but totally against the deceased dying wishes.

The most economical way of avoiding probate is by making use of the Transfer of Death Instruments that are available. Now most of these are revocable, meaning should the family member that you named either predecease you or falls out favor, you can change this at any time.  It is important to note that you need to do the necessary research, ensuring however you decide to title your property it is within the laws of the state or country you reside in. Should you have property in a different State to your resident state, then it is the laws of the State where the property is that you follow and not where you are resident.

There are many instruments available, where you reside, in the case of real estate property will determine which instrument is better suited for you.  For example in Illinois, 2012 saw the introduction of  Illinois Residential Real Property Transfer on Death Instrument Act.(755 ILCS 27/) - which permits an individual to pass ownership at death to another person at a minimal cost.  You would approach your local  There similar instruments for vehicles too, but in this case you would need to approach your local DMV so that the name of your beneficiary is added to the certificate of registration.

For brokerage accounts (holding securities such as stocks, bonds, mutual funds) you can use Transfer-On-Death registration. Again this can be changed at any time should your situation change and require it. Bank accounts use Payable-On-Death but you need to request for the necessary forms to have this on file from your bank.  It is important to note that if done this way it does not give the named beneficiary access to the account during your life time.  Upon your death they will be required to produce proof of death along with appropriate identification to transfer the funds to their name.

Retirement accounts are handled differently, depending of course on your resident state as well as whether you are married or not.  You will need to research on your residence state requirements.  With IRAs (Individual Retirement Accounts) it is advisable to do this at the time you open the account.  Some brokerage houses will insist you name a beneficiary when you open your account, but sadly this is not the norm.  It is most advisable you make a point of reviewing the beneficiary designations on all your retirement accounts at the earliest convenience.  For 401(k), Profit Sharing Plan, Defined Benefit Plan you will need to contact the third party administrator who handles the plan.  If you are not sure who that is, your human resources department should be able to point you in the right direction.

As with other transfer-on-death registrations/instruments, with retirement accounts the designations are revocable of course, but they do also offer the possibility of appointing contingent beneficiary in case your primary beneficiary predeceases you.  For some states Spousal Consent maybe required, if you do not name your spouse as 100% primary beneficiary.  The following states do not require you to notify your spouse should you wish to make any changes:  Alabama, the District of Columbia, Colorado, Georgia, Indiana, Kentucky, Maryland, Mississippi, Montana, Nebraska, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, and West Virginia

How price-conscious are you?

Most of us talk about being price-conscious but truthfully not that many people follow through.  Living in a country that brags of being the epitome of capitalism – where market forces rule, who really is in the driver's seat..  Living alone I can afford to stagger my grocery shopping in such a way that I only buy when something is on sale.  Being a creature of habit my product selection remains virtually the same over a period of time and as such I am aware of the price of most items in at least three grocery chains.

Now with this in mind I have to disclosure there are a few items that I hold dear, where I close my eyes and pay whatever the going rate is.  When purchasing these items I walk into the store for that particular item only and nothing else. This week I did make such a trip to the store to make a purchase but while I was waiting for my purchase to prepared I realized that I was hungry and would not be able to eat for a while.  Now retailers bank on such situations occurring because right in front to me was an array of things I can eat on the go.  I looked for a familiar product which I am confident is sold nationwide but to my surprise it was not available. 

In its place was similar product - nutritional content pretty much the same too.  I picked one out, pulled the five dollar bill out my purse, as I had already paid for my other purchases.  I put the two things on the counter for the cashier to ring me up.  Now remember I am working on assumptions here because I picked a similar product and taking for granted the pricing would be similar I was looking for $2.00 change or slightly less.  The cashier rang me up and then in an extremely pleasant voice said “Since this a new product I will give you a coupon for $1.00 for today’s purchase and another your next purchase.  Your total today is $5.62”.  I swallowed hard, putting special effort not to show my shock.  With extremely controlled facial expression I handed her the additional money. 

I cannot say for sure whether I developed an utter dislike for the product because I thought it was overpriced or not.  All I can say for sure is that I am disappointed that I did not just state that the price was above what I was prepared to pay and asked to have the transaction cancelled.  I admit that it was a form of “peer pressure” – I have my usual mantra ringing in my head “every penny counts” over and over again but here I was in a situation where I clearly crossed that line and made a purchase that is above my income bracket and could not even pretend that I did so because I have a long standing relationship with said product.  That it was under $6.00 and I had the ability to pay it is irrelevant to my need for price sensitivity.

Needless to say one of the reasons why I bought the product without a moment's hesitation in the first place was because I had seen a friend drink it.  When I saw her next I handed the coupon to her and told her that I did not realize she had such expensive taste. 

Wealth accumulation 101 – being a great saver means being price-conscious across the board.  But I hasten to add it is also important to ensure you are buying quality, while all the necessary nutrients were there the taste definitely needs working on but none of it matters I will stick to just buying the one product that I have been buying from this particular retailer over the years.