Tax Less – Give More

Posted on January 8, 2018 by Diana

money umbrella The big gift under the Christmas tree for most Americans this year was the 2018 Tax Code for individuals and businesses. Santa has not delivered a gift this significant for U.S. taxpayers for over 30 years. Most of us are happy he made it down the chimney.

To explain in our blog what’s included in the bill, and how it is likely to affect you and your business, would be redundant. Plenty has been written in the press and online. An article that we found to be easy to understand comes from The Motley Fool. The impact of the Bill is explained in layman’s language and we especially like the tables. According to the Fool, a few interesting individual deductions will soon be history. These include theft losses (no need to fill out that pesky police report), unreimbursed employee expenses (no incentive to bring the boss a Starbucks latte), moving expenses (it now pays to stay in one place), and employer-subsidized parking (no problem for us whose office happens to be in the suburbs).

For corporations, the GOP-proposed Bill is exciting. Businesses can sell worldwide without double taxation, and if you’re one of the those businesses who made money overseas but couldn’t afford to bring money into the U.S. because of taxation, it’s good news.

Read the entire article (really, it’s a good one).

Of course, not everyone is happy. Parents who sacrificed so their kids could go to college won’t get the $2,500 tax credit and charities are all wondering whether the goodness of the average American wage earner will be “as good” if they aren’t able to deduct charitable donations. We believe that generosity and compassion, more than a tax deduction, drive American giving. Next year will be our litmus test. In the last election, according to Pew Research Center, 54% of us Americans voted, but 60% of us gave to charity.

Charitable giving, in all its forms, transcends politics. Giving is as American as apple pie and will remain that way regardless of our politics, tax rules, and financial forecasts.

Managing Rockefeller’s Money

Posted on July 5, 2016 by Diana

John D. Rockefeller in 1885

John D. Rockefeller’s name is etched on countless buildings in New York City, and even though he was born in the Big Apple, he made his fortune in Cleveland, Ohio where he founded Standard Oil. By the time he died, Rockefeller’s assets equaled 1.5% of America’s total economic output—about $340 billion dollars in today’s inflation—more than four times that of Bill Gates.

Cornelius Vanderbilt is known for his railroad empire, but before laying tracks he was in the steamship business. After the Civil War broke out, he offered his largest and fastest ship, the Vanderbilt, to the Union Navy. When President Lincoln asked him to name his price for the ship, he said it was donation. He had no interest in profiting from the war.

Both of these financial giants used private firms to manage their wealth. Since the 1800s, what are now known as “family offices” served the mega-rich with a buffet of wealth management services from tax planning to investment management, including managing everything from their fine art collections to the staff for the family’s vacation home. These days, there are about 100,000 U.S. families worth $5 to $10 million and they represent new opportunities for professional money managers.

Recently, DL MoneyMatters has seen an uptick in referrals from accountants and attorneys who work alongside family offices or lead investment advisors to handle the day-to-day bill-paying or tracking expenditures of family trusts. Our role is to act only in the best interest of the trust, to manage bill-paying carefully, pay bills and taxes on time, and maintain impeccable records. We can only imagine what it must have been like to manage the daily bill paying for the Rockefeller or Vanderbilt families.

Bankrupt Celebrities

Posted on October 31, 2014 by Diana

What can we learn from bankrupt movie stars?

When the rich and famous lose it all, we are intrigued about what went wrong. Should we instead ask ourselves what we can learn from their financial mismanagement?

Dionne Warwick rose to fame in the 60’s with hits like Walk on By, Say a Little Prayer, and Do You Know the Way to San Jose. She won five Grammy awards, charted more than 60 singles, and had album sales over $100 million dollars. In 2013, she filed for bankruptcy at age 72, down to her last $1,000 in cash and a $10 million tax debt. Reportedly, it was the mushrooming of accumulating tax penalties and interest that did her in financially.

George Foreman, Debbie Reynolds,
Dionne Warwick, Burt Reynolds.
Copyrights belong to the respective owners.

Burt Reynolds, the popular star of movies like Smokey and the Bandit and The Longest Yard, made his big mistake with a $750,000 second mortgage on top of a $1.2 million dollar mortgage on a home valued at $4 million. As the story goes, he woke up one morning as surprised as everyone else that he was broke. His financial troubles have been attributed to a 1996 bankruptcy after divorcing ex-wife Loni Anderson and launching an unsuccessful restaurant business. Then he remarried, divorced the next wife, and ended up with lawsuits and ensuing money battles.

There were others: Ed McMahon, George Foreman, Nicolas Cage, Johnny Unitas, Debbie Reynolds, and Michael Jackson. Going back to our early history, there were others who either lost it all or came perilously close: Thomas Jefferson, Buffalo Bill Cody, Mark Twain, and Ulysses S. Grant.

Each of these big names had problems with money management. Some spent too much, made poor financial decisions, or simply squandered the money away.

What can we, who make far less money and have far less fame that these, learn from their mistakes? Stay simple. Live within our means. Pay bills on time, especially taxes and interest on bank loans. Avoid over-investing and marry for love, not money. With simple financial discipline we can enjoy our later years in life without worrying about money.