Before Your Clients Write that Tuition Check……

Now is the time of year that many clients are turning to you for advice about financing the jaw-dropping price of college tuition. Study after study confirms that a college education—one of the biggest legal rackets in America today--is still worth the price of admission and stress. But, several of our clients have been telling Forbes, US News and other national media outlets that wherever your child or grandchild attends, it’s important to get a well-rounded education, not just the prerequisites for a high-paying career.

Bottom line: Take courses that actually make you think, write communicate and create. That’s the only way to be adaptable in a constantly changing world.

Mark Rioboli, CFP, CFS  Director of Wealth Management at Independence Advisors  (Wayne, PA) said universities should take a page from Ben Franklin's book and focus on those things that make students “healthy, wealthy, and wise.” College curriculum should consist of nutrition and fitness training “because without health, you have nothing.” Rioboli also told me critical thinking, project management and sales skills are valuable in any career one chooses.  

Anthony Glomski, founder of Los Angeles-based AG Asset Advisory and author of the new book Liquidity and You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit agreed. “When speaking with (and recruiting) young graduates, I’ve found their basic skills are not as far along as I’d like to see, especially reading, writing, organization, and attention to detail. Any degree that emphasizes those skills will add a lot of value in the job market. In a world in which everything is driven by artificial intelligence, the one thing we know that is irreplaceable is the human connection. Degrees that help student develop traits that strengthen human connections are going to be value in their careers,” added Glomski.

Blake Christian, CPA Partner at HCVT in Long Beach, CA said a student’s focus for the first two years should be on “a solid foundation that will help him or her regardless of major--basic finance, accounting and budgeting, for example. Who doesn’t benefit from those skills both personally and professionally?” asked Christian. He is also a strong advocate of business and technical writing, along with verbal communication. “When it comes to writing a business plan, even liberal and creative artists will have a more solid financial footing with a class or two in these subjects,” maintained Christian, author of the new book, Benefits of Becoming A CPA-Preneur.

Glomski, an undergrad accounting major, said he benefitted greatly from the liberal arts courses he took. For instance, “philosophy went really deep, which helped me in developing personal relations. Economics and other social sciences will always be applicable and accounting was invaluable. Sure, accounting is becoming increasingly automated, but it’s priceless training learning how to understand the mechanics and backbone of any business,” Glomski related.

Before junior year, Christian strongly recommends that students do an internship in their chosen field, along with an aptitude tests and counseling to ensure that the student “really wants to go down that path and has the general skills and drive.” 

“How do you teach wisdom?” asked Rioboli. “I suggest starting with meditation and all the principles in emotional intelligence 2.0 by Travis Bradberry, Travis and Jean Greaves.”

Also consider Top 10 Life Advice Comments for Millennials by our client, Matt Topley, chief investment officer of Fortis Wealth in Valley Forge, PA.

Conclusion

Glomski said adaptability is the key ingredient for career success today. “It’s likely you’ll get of out college and be in a career for five to seven years, and then you’ll be in a completely different career. What prepares you for that?”

#college tuition #careeradvice #liberal arts #tuition ROI 

Anthony Glomski, AG Asset Advisory, Blake Christian, HCVT, Mark Rioboli, Independence Advisors, Matt Topley, Fortis Wealth

HB Clients Featured in National Media

It was another good week for those of you taking advantage of our Just in Time media relations services. Here are some highlights.

ANTHONY GLOMSKI, founder of AG Asset Advisory, was the featured guest on the Angel Investor Podcast with Jeff Barnes. Author of the new book, Liquidity and You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit, Anthony discussed the importance of surrounding yourself with the right people to build your business on secure footing to produce a successful exit. Again, you can check out the episode here.

BLAKE CHRISTIAN, CPA, told US News & World Report that proper diversification not only applies to asset classes, but to working with more than one financial advisor if you have over $1 million in investable assets (see Should Investors Diversify Providers?)  "Each advisor has different style, expertise and biases," explained Christian, a partner at Holthouse Carlin & Van Trigt, in Long Beach, California. Christian is the author of a new book we’re finalizing called Benefits of Becoming A CPA-Preneur.

KYLE WALTERS, a wealth advisor at L&H CPAs and Advisors in Dallas, TX, had another guest column published in Accounting Today entitled Red Teaming: Creating your perfect competitor makes you a better, more focused firm. Author of the new book, The Personal CFO, Walters said red teaming requires you to build of model of your perfect enemy/competitor before someone else does it for real.

Great work gentlemen. As our annual Wealth Advisor Confidence Survey™ revealed, more than half of advisors expecting double-digit growth this year (54%), say press mentions are a “very” or “extremely important” component of their personal branding initiatives. That’s significantly higher than advisors who are expecting single-digit or flat growth over the next 12 months.

Where would you rather be?

TAGS: Anthony Glomski, AG Asset Advisory, Blake Christian, HCVT, Kyle Walters, L&H CPAs, Accounting Today, Angel Investors Network Podcast, Jeff Barnes

Pros and Cons of Serving on Boards

Many of you reading this post are at the peak of your careers. You’ve probably been asked to join multiple boards and wondering it’s worth it. Sitting on boards can be a great way to boost your credentials and give back to organizations you support. But, there is often a bigger time commitment than expected. It can take longer to get things done than you’re used to and there’s potential liability exposure.

To help us understand the pros and cons of sitting on boards, we reached out to several HB clients who are highly sought by a variety business, academic and not-for-profit organizations.

Blake Christian, CPA  a partner of HCVT in Long Beach, CA said the most important decision to consider is whether or not you have the right skill set for the particular board. “You should ask the board members what the strengths, weaknesses, opportunities and threats are to the future business plan for the entity--as well as the areas of expertise of the current board members. You will also want to understand the time commitment involved, the frequency of board meetings, the time of day the meetings are held and whether you are also expected to sit on a committee to deal with other entity issues,” added Christian, author of the forthcoming book, Benefits of Becoming A CPA-Preneur .

Matt Topley, chief investment officer of Fortis Wealth told me he not only wants to make a difference, but enjoys the opportunity to learn from fellow board members who come from different industries and professions. Topley stressed the importance of making sure your values and work style is consistent with the other board members. “If you’re very action-oriented like I am—make sure the board is equally action-oriented and not filled with members who serve to socialize or pad their resumes,” added Topley, a 2018 Philadelphia Inquirer Influencer in Finance award winner.

According to Christian, “If your skills fill shortfalls within the board, then you are likely a good match. For example, if the entity is having trouble getting funding and you have skills with grant-writing, banking, capital campaigns, etc., then that is a good match.  If they are looking to improve their financial controls, forecasting, etc. and you have accounting expertise, again that can be a good match.”

When Topley joined the board of his alma mater, Holy Family University in 2010, the school was experiencing significant financial challenges as many small colleges do. “I chair the endowment committee and serve on the audit committee. With a new focus on financial metrics, Holy Family is now on solid financial footing with an increased enrollment. Holy Family is now one of the Philadelphia areas, top-ranked schools in terms of cost-versus-return and graduate job placement,” noted Topley.

Christian, who has served on over 25 boards during his career, recommends that prospective board members do their due diligence before joining.  “Review their historical financial statements and check out the founders and board members to ensure they have the expertise and solid reputations.  Then attend at least one board meeting or committee meeting to get a feel for the style and competency of the board. You will also want to make sure the entity has adequate insurance policies for the board members.  It is not uncommon for boards to be sued for their actions or inactions,” added Christian.

Conclusion

Cynics would say “No good deed ever goes unpunished.” But if you do your homework about a board and join for the right reasons, chances are you’ll find it highly rewarding both professionally and personally.

TAGS: Joining boards, board involvement, @taxcredits_CPA , @MattTopley, Blake Christian, Matt Topley,

Downside to a Strong Job Market: Cashing Out 401(k)s Early

Thanks to a strong economy and a 17-year high in the employee quit rate, record numbers of U.S. workers are leaving their jobs voluntarily to seek greener pastures with new employers. While most will exit amicably, many are burning their bridges in a potentially more dangerous way—they’re cashing out their 401(k)s when they leave.

About 50 percent of workers ages 20 to 29 who left a job cashed out their defined contribution plans on the way out, according to the upcoming Alight Solutions' 2017 Universe Benchmark report.

But it's not just the millennials: More than four in 10 employees in their 30s and 40s who were laid off, quit or found new work took the cash instead of keeping the money where it was, or rolling it over into their new employer's retirement plan or an IRA.

HB clients, Blake Christian, CPA and James Nevers, CFP® were interviewed in the national media this week about the dangers of cashing out retirement accounts early and offered smarter alternatives.

According to Christian, a partner at Long Beach, CA-based HCVT: It is fairly common for employees to cash-out smaller 401(k) accounts when they switch jobs--a mistake they’ll regret at tax time the following April. “That’s when they realize they are not only paying federal and state tax on the 401(k) funds they cashed out, but they’re are also subject to a 10-percent federal ‘early withdrawal penalty’ plus a state penalty if they are under age 59-1/2 at the time of withdrawal.“

It’s not uncommon for 50 percent of the funds (or more) to get “vaporized by taxes and penalties” said Christian, adding that by that time, “the employee has likely blown the money on a new jet ski or other toy.”

Nevers, an advisor at Soundmark Wealth Management in Kirkland, WA agreed: “When you are between jobs, especially early in your career, that old 401(k) starts to look like a tempting pile of cash you can use for a vacation or to relax for an extra month or two between jobs. The problem is that the $10,000 in your old 401(k) isn’t really the same as $10,000 in your pocket (after taxes).”

Let’s say you are 40 years old and in a 25 percent tax bracket. Since you’re under age 59 ½, withdrawing that $10,000 early will leave you with only $6,500 after taxes. Even worse, explained Nevers, is that you “just hit the re-set button” on your retirement savings. “Remember, retirement savings are for retirement. Only save for retirement after you have set up an emergency fund that can cover your living expenses for three to six months, or for as long as you might expect to be out of work. This will help you keep your retirement funds where they belong, added Nevers.

According to Christian, by leaving the funds with your former employer, the 401(k) fees are generally low and investment choices are often broad.  “You can also roll the 401(k) amounts into an IRA and continue earning tax-deferred retirement savings. If you are expecting to be in a relatively low tax bracket the year you leave your current employer, ask your tax preparer or financial advisor about the possibility of rolling the funds into a Roth IRA. This trigger taxable income (but no penalties), and the Roth IRA can build up TAX FREE after five years and make this pool of money extremely valuable when you retire,” added Christian.

Retirement may seem far away, but time is a powerful factor to have on your side when it comes to retirement savings, said Nevers. “Albert Einstein called compound interest the eighth wonder of the world. It’s even more powerful when it’s inside of your 401(k).”

Conclusion

The key takeaway from our experts is that everyone from young adults to near-retirees can benefit from a little delayed gratification. “Instead of having a little fun today and cashing out your old 401(k), keep it saved,” said Nevers. “You’ll be thanking yourself down the road. Early in your career, you may only have a few thousand dollars saved up in your retirement accounts. It may not seem like much, but thanks to the power of compound interest and the many working years you have until retirement, your accounts have the potential to grow and grow.”

TAGS:  Alight, cashing out 401(k) early, Blake Christian, James Nevers, compound interest, early withdrawal penalty

Estate Planning Myths and Misconceptions

Now is the time of year when extended families get together at the beach, lake, mountains or national parks. While the focus is on meals, family bonding and R&R, it’s also a good time to get the ball moving about those sensitive estate planning issues.

According to my friend Valentino Sabuco, founder of The Financial Awareness Foundation, half of the U.S. adult population has NO financial, estate or gift plan. As most of you know, estate planning is not just for the wealthy or elderly. It’s essential for anyone who wants to make their own decisions about their assets and their heirs—rather than the government making it for them.

I don’t have to remind you that estate planning is not only a touchy subject; it’s complex and often misunderstood. In response, several of our clients have been speaking to the national media recently about estate planning myths and misconceptions that frequently trip successful families up.

With the significant increase in the lifetime exemption under the 2017 tax act ($11.2 million per spouse in 2018), our client, Blake Christian, CPA said even many affluent taxpayers do not believe estate planning is truly necessary. “Nothing could be further from the truth,” said Christian, a partner of HCVT in Long Beach, CA. “Even for the 99 percent who will never pay estate tax, estate planning is very necessary for numerous reasons, including:

1) Avoiding the probate process.
2) Asset protection.
3) Simplifying mixed-family complexities associated with divorce, blended families and common-law marriage situations.
4) Titling assets properly can also make the difference between getting a full or partial step-up in an asset's tax basis for the heirs.

5) Making sure your assets are distributed correctly to provide your heirs with sufficient after-tax income after you are gone,” added Christian. 

According to our client, Mark A. Rioboli, CFP®, CFS, director of wealth management at Wayne, PA-based Independence Advisors, “The misconception is that if you have a will, it controls everything. In reality, it only controls the assets in your own name.” 

*** NOTE: HB clients Anthony Glosmki, Molly Grubb and I will be speaking about advanced planning topics at the Accounting & Finance Show in NYC this week at the Javits Center. More than 2,000 attendees and 200 speakers are expected. Stop by if you are in the Big Apple.

Our client, James Nevers, an advisor at Soundmark Wealth near Seattle, WA agreed. He said it’s a common mistake to believe that if you have a Will, you don’t need to worry about your beneficiary designations on retirement accounts. “I manage several 401(k) plans for medical groups. When I provide participant education to their staffs, I tell them the same story every time we meet – ‘If your primary beneficiary designation on your retirement accounts says your ex-spouse, then all your hard-earned savings in your 401(k) is coming to your ex-spouse, regardless of what your Will states.’”

According to Nevers, you should also check to see if a minor child is listed as a beneficiary. “I don’t know many 8 year-olds who can responsibly manage $100,000. Nor do I know anyone who wants their ex-spouse to get one more penny than they’ve already received,” added Nevers. “Beneficiary designations supersede your will – simple as that.  I advise everyone to consult with their estate attorney about who they should designate, whether it is their spouse, a trust, or another individual.”

Conclusion
As Benjamin Franklin famously said, "Failing to plan is planning to fail." Don’t let that happen to you and your clients. Hope to see you at the Accounting & Finance Show on July 11th and 12th.

TAGS:  Mark Rioboli, Independence Advisors, Blake Christian, HCVT, James Nevers, Soundmark Wealth, NYC Accounting & Finance Show, Valentino Sabuco, The Financial Awareness Foundation

Can You and Your Clients Count on Social Security?

“Today more people believe in UFOs than believe that Social Security will take care of their retirement.” -- Scott Cook, billionaire cofounder of Intuit.

“Before Social Security existed, about half of America's senior citizens lived in poverty.” – Senator, Bernie Sanders

Depending on your point of view, Social Security is either one of the Big Government’s greatest social achievements, or it’s just another heavy-handing tax on the first $128K of your income and a well-intended social safety net that’s poised to collapse on itself.

A Gallup poll found that half of working Americans don't think they'll receive any benefits when they retire. In fact, a new report this week from the trustees of Social Security said the program's costs are expected to exceed its income this year for the first time since 1982. That shortfall will force the U.S. government to dip into the retirement system's trust fund to pay benefits to participants. How serious a problem is that?

Well, if the program’s reserves are depleted as expected by 2034, the system won’t be able to pay all the benefits retired workers are entitled to. Experts say the program could still honor three-fourths of benefit claims if its reserves are depleted post-2034. But even at 100-percent, payouts won’t be enough to meet the needs of most retired Americans.

This much is clear. Over 10,000 Boomers a day are filing for Social Security benefits for the first time. Confusion over the program’s future is causing many retirees and near-retirees to make ill-advised filing decisions.

To help separate Social Security fact from fiction, a number of our clients have been fielding media inquiries lately about some of the biggest myths about the program. Here are some excerpts:

Spousal Benefits

According to Blake Christian, CPA, a partner of Long Beach, California-based HCVT, “Many taxpayers are confused about how Social Security benefits vests with respect to surviving spouses of a decedent or a former spouse.  Generally a spouse, or former spouse (‘requesting spouse’), who was married for at least 10 years is entitled to receive up to 50 percent of the Social Security benefits of their spouse or former spouse. In order to claim spousal benefits, the spouse requesting benefits must meet the following three tests:

a) The requesting spouse must generally be 62 years or older, and

b) The related spouse must have reached Social Security eligibility and

c) Have filed to receive their benefits.

Christian added that if the spouse has deferred claiming Social Security benefits in order to increase future pay-outs, the requesting spouse must also wait for their share. “Divorced spouses who have not re-married, are likewise eligible to claim up to 50 percent of their former spouse's Social Security benefits once the requesting spouse and ex-spouse reach 62; however, the requesting spouse is not required to wait until their ex-spouse files for benefits. If newly divorced, there is also a two-year waiting period before benefits are available to the requesting ex-spouse. It is worth noting that these spousal benefits do not reduce amounts payable to the ex-spouse or the new spouse (if the ex re-married),” added Christian.

More solvent than you think

Matt Topley, chief investment officer of Fortis Wealth in Valley Forge, PA thinks that predictions of Social Security’s demise are greatly exaggerated. “If we increased the retirement age by two years and slightly increased contributions for high wage earners, Social Security would be solvent for another 100 years.  Since the death of pensions in the U.S., Social Security has become vital for retirement--not just for the working class, but middle class as well.” According to Topley, the meager balances in the average American’s 401(k) account “tell a dismal story on the economic future for retirees,” added Topley.

Taxability of Social Security benefits

HCVT’s Christian said many retirees to continue part-time work into their 60s and 70s. Understanding how part-time work impacts the taxability of their Social Security benefits is critically important. “Knowing these rules will allow retirees to better time their Social Security elections as well as other income and expense items,” noted Christian.

Even though most taxpayers never received any tax benefit when they paid into the Social Security system, Congress still subjects up to 85-percent of the related Social Security benefits to potential taxation in retirement years. “This taxability concept runs counter to most tax rules and is seldom discussed,” said Christian. “From a state tax perspective, the rules get even more complex. 36 states either have no state income tax or exclude Social Security benefits from taxation. However, at least four states, including: Minnesota, North Dakota, Vermont and West Virginia follow federal rules and tax up to 85-percent of Social Security benefits. Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico and Utah also tax all or a portion of such benefits, depending on specific demographics of the recipients.  While state taxation may not dictate where to retire, it should be factored into retirement planning,” Christian added.

From a federal standpoint, it gets fairly complicated, too. Just know the following thresholds, said Christian:

Single Filers: with 2017 MAGI between $25,000 to $34,000 retirees were required to include 50% of their Social Security Benefits in taxable income on page 1. Taxpayers with MAGI in excess of $34,000 must include 85 percent of Social Security benefit in taxable income.

Joint Filers: with MAGI between $32,000 and $44,000 in 2017 were required to include 85% of their Social Security benefits in taxable income. MAGI over $44,000 would have triggered an 85% inclusion.”

Conclusion

Just as you need a well-diversified portfolio of investments during your wealth accumulation years, you need a well-diversified portfolio of income streams during your retirement (i.e. wealth drawdown) years. Our friends at Independence Advisors in Wayne, PA have more great resources about Social Security planning.

Best, HB

*** Take our Insta-Poll and see how you stack up to your peers.

TAGS:  Matt Topley, Fortis Wealth, Blake Christian, HCVT, social security insolvent, social security myths

DOL Fiduciary Rule Overturned (Again)

Are you surprised?

As most of you know by now, a federal appeals court vacated the fiduciary rule late last week. On the surface, the decision was a setback for consumers, investors and their advocates and it was a win the broker/dealers, insurers and others in the financial product sales arena who’ve been increasingly under pressure to recommend investments that benefit their clients before themselves.

“It’s definitely a step backward, especially since the rest of the world is moving toward the fiduciary standard,” said our client, Kyle Walters, a partner of L&H CPAs in Dallas. “It’s like the Paris Climate Agreement in which the U.S. was the only major country in the developed world not to sign on.”

Another of HB client, Blake Christian, CPA, said the overturning of the Fiduciary Rule is a concern for larger investors who have significant dollars under management. “There are many games being played with respect to bond pricing, fund fee structures, annuities, Master Limited Partnerships and other investments,” observed Christian, a partner at Long Beach California-based HCVT. “There are a select number of investment advisors who already adopted the Fiduciary Rule before the old rule (now overturned) became mandatory.  These firms will likely leave their voluntary rules in place.”

Since the Fiduciary Rule provides investors with assurance that the investment advisor will be acting on the customer's behalf rather than on behalf of their firm, “there is less likelihood of self-dealing, conflicts and being directed to high-fee investments,” added Christian.

Michael Kitces, CFP, author of the popular Nerd’s Eye View blog, concluded that ultimately, “it’s not about the ‘right’ standard — suitability versus fiduciary — to apply across financial advisors and the brokerage industry. It’s about recognizing that brokers and annuity agents fulfill a sales role that is functionally different than actual advisors.” Job titles and disclosures should accurately reflect the nature of those relationships, Kitces added.

Once the distinction between advice and sales is truly clear, let consumers make their choice, Kitces argued, adding that there are times when the public just wants to talk to a salesperson to help them effect a sales transaction. “After all, when I walk into a clothing store in the mall, I’m not looking for a personal fashion consultant; sometimes I just want a salesperson to help me complete the process of buying what I want, and giving me the relevant product information I need to make the decision,” quipped Kitces.

“As I mentioned earlier, this ruling is definitely a step backward at a time when the industry needs to be moving toward being an advice industry,” noted Walters. “That’s where everything is going one way or the other. I’m not sure how big the impact will be since clients are becoming better educated. Whether [the fiduciary standard] is required or not, clients are asking the right questions of their advisors. If you’re an advisor of any kind, that’s not something you can hide from,” warned Walters.

HB client Pat Runyen, of Valley Forge, Pennsylvania-based Independence Advisors, said it will be hard to determine what will happen long-term if the fiduciary standard dies for good. “Many large brokerage firms already have begun to roll out changes to comply with the rules, and plan to keep some or all of these changes regardless of what happens. My best guess is if the rules go away, the affected firms will likely go back to operating under the ‘suitability’ standard given the lucrative incentives.”

Runyen believes this will ultimately be a “net positive” for individual investors over the long-term given the awareness it has raised. “Since last year, many new clients I’ve met with will ask if I’m held to a fiduciary standard (yes). Before that, no one asked such a question. Many CPAs have told me they’ve been asked the same question,” added Runyen.

Walters agreed with Runyen. “As clients get better educated, they can make the fiduciary standard a priority when choosing who to work with. It doesn’t matter from a legality standpoint. They’re going to vote with their feet.”

According to Christian, those who are acting in a trustee or administrator role will be wise to deal with investment firms that continue to operate under the Fiduciary Rule provisions.  “This will offer the trustee/ administrator added protection if a contingent beneficiary or other interested party brings an action against trustee/ administrator,” added Christian. 

Conclusion

Our Take—as always, the best educated consumers—and the most ethical advisors—will find each other eventually and they’ll win in the end.

TAGS, Kyle Walters, Michael Kitces, Pat Runyen, Blake Christian, L&H CPAs, Nerd’s Eye View, Independence Advisors, HCVT

*** Take our Insta-Poll and see how you stack up to your peers.

It’s Not All Doom and Gloom

The latest stock market volatility, combined with the Florida school shootings, the daily soap opera in the White House and the crappy weather in the East and Midwest could give even the sunniest of us the late winter blues.

Fortunately there’s hope. The U.S. overachieved its way to Winter Olympic medals in our non-core sports such as curling, bobsledding and cross-country skiing. We dodged another interest rate hike and the equity markets showed resilience once again in what many pundits assured us was the start of the Long, Long, Long Overdue Correction.

Our client, Matt Topley, chief investment officer of Valley Forge, Pennsylvania-based Fortis Wealth and author of the popular View from the Top blog, said there are a number of simple reasons why the recent market volatility is not a bear market in the making:

1. If we were moving into a truly defensive market, Topley said we would be seeing rotation out of aggressive sectors like technology and consumer discretionary and into defensive sectors like utilities and consumer staples. During the recent 10-percent market pullback, the (risk-on) tech and consumer discretionary sectors went down the least.

2. “Yes, we’re in the later innings of a long bull market,” said Topley, “but the stock market is driven by earnings growth and 80-percent of S&P companies are beating their revenue estimates—even without the tax cut.”

3. Wage growth peaked at 4 percent leading up to the last three recessions—it’s barely growing at 3 percent today, observed Topley.

4. Another fear driver during this selloff has been a flattening yield curve—a situation in which long-term debt is not yielding much more than short-term debt of the same credit quality. But, Topley said equities tend to do well leading up to a flattening or inverted yield curve. “An inverted yield curve—when short-term debt is yielding more than long-term debt--is one of our firm’s five key recession indicators, but we are not in the danger zone yet,” said Topley.

5. There was absolutely no retail investor panic during the latest correction. In fact, the average American was buying stock during the recent market pullback. The “buy the dip” mentality is still intact, said Topley. “For a true bear market to ensue, retail investors have to throw in towel and sell in volume.”

Last week’s stock market volatility has caused many to wonder if the real estate market has also hit its near-term peak. Randy Hubschmidt, who manages Fortis’s Real Estate Fund, said many investors have asked him if it’s time to take some chips off the table and diversify into other sectors of the real estate market.

“Multifamily housing should remain strong as new tax laws make single family ownership less attractive and as downsizing Boomers migrate to urban markets vacated by Millennials who are finally settling down, starting families and moving to the Burbs,” said Hubschmidt. “There is still plenty of upside left for properties that can be upgraded quickly and cost effectively and can be repositioned in the market.”

Rays of hope on the tax reform front

While nearly half of you (45%) told us in our unscientific reader poll that you were dissatisfied with the Trump tax reform package, there are still some less known provisions that should cheer up taxpayers from Red states to Blue states.

Our client, Blake Christian, CPA, of HCVT in Long Beach California shared this sampler from a recent interview in US News & World Report:

·         529’s plans can now be used for K-12 educational expenses (not just for college) to the tune of $10,000 per year.

·         For 2018, the Child Tax Credit (CTC) doubles to $2,000 per qualified child from $1,000.  In addition, now up to $1,400 of the CTC for each child is potentially refundable, explained Christian, even if the taxpayer has a tax liability less than the credit amounts.  “For the 2018 year, taxpayers may also be eligible for up to $500 per non-child dependent.”

·         The American Opportunity Credit of $2,500 per year is now available for couples earning less than $180,000 per year who are financing an undergraduate’s education.

·         Achieving A Better Life (ABLE) accounts are designed for families with dependents who experienced disabilities prior to turning 26.  Christian said that in such cases “the ABLE accounts allow family and friends to fund up to $15,000, up $1,000 from 2017, annually and these funds grow tax free and are also excluded (up to $100,000) from impacting various federal and state benefit programs.”

AI is NOT taking over everyone’s jobs

Our client Anthony Glomski, founder of Los Angeles-based AG Asset Advisory and author of the new book, Liquidity & You, said non-linear thinking has always been an asset in business.  “Thinking globally and outside the box,” or “seeing the big picture” are clichés rooted in truth.  As we enter the era of automated automation, these abilities are the key advantage we’ll (presumably) maintain over exponentially learning machines.” Technical expertise will become obsolete more quickly and it is still unclear how this plays out for workers and businesses; and on what timeline. “It seems likely, however, that opportunities and success will follow for individuals and enterprises that can best perceive, anticipate, strategize, and adapt,” added Glomski.

Conclusion

As my dad always reminded me, things are never as good as they seem when you’re on a roll and they’re never really as bad as they seem when you’re down in the dumps. As always, the truth lies somewhere in the middle. Be smart. Trust your instincts and keep your eyes focused on the big picture that lies ahead. As my boyhood basketball idol, Charles Barkley, famously said, ”Sometimes that light at the end of the tunnel is actually a train.”

Let’s hope the powers that be who are guiding our government, financial markets and economy have their eyes wide open as they lead us into the future.

TAGS, Anthony Glomski, Blake Christian, Charles Barkley, Matt Topley, Randy Hubschmidt

Surround Yourself with the Right Mix of Finders, Minders AND Grinders

One of our most popular posts last fall was: Are You a Finder, Minder or Grinder? C’mon Be Honest. As expected, the vast majority of you considered yourself Finders (82%), according to our unscientific InstaPoll. Finders are the rainmakers at professional service firms. They bring in the business and cultivate relationships that turn into new business or strategic partnerships.

Of the remainder, we expected most of you to say you were Minders (i.e. project managers and supervisors). You’re the experts that focus on process and keeping the trains running on time. But, that only describes 3 percent of you. Surprisingly, one out of every seven of you (15%) described yourself as Grinders. You’re the worker bees who put your nose to the grindstone to deliver all the promises that your firm’s finders make—no matter how aggressive and far-reaching.

This imbalance also tells us that many of you are trying to fill too many roles—burning the midnight oil every night to deliver all the promises that you and your fellow partners have made to clients and high level prospects. And supervising the work. That’s not a sustainable business model or organizational structure.

Balanced talent portfolio

As Forbes contributor, Keenan Beasley explained recently, you need a balance of finders, minders and grinders. If you’re top-heavy with minders, then Beasley says nothing will get done. Your costs will go up and you won’t be able to scale. If you have a disproportionate number of grinders, very few see the big picture and too much strategy and execution falls on the founders and you won’t be able to expand profitable. If you have too many finders, Beasley says you’ll win a lot of business, but retention of both your clients and over-worked staff will suffer.

Our Take: Be especially cognizant of that last one, folks.

By moving closer to an equal balance of finders, minders and grinder, your business will grow from both a topline and bottom line perspective. The efficiency will boost your profits and free up founders/finders to do what they do best--bringing in more (and larger) clients that enable you to scale.

Generally, employees fall into just one of these classifications above, said our client Blake Christian, CPA a partner at HCVT and author of the new book: Becoming a CPA-Preneur. Make sure you have the right person with the right mindset in the right role. “Occasionally an employee will have more than one of these groups of skills. When you find them make sure you retain those gems,” said Christian.

Conclusion

But, if you’re trying to be one of those organizational triathletes yourself, you’ll eventually run out of gas before you reach the finish line. Be brutally honest about what you can and cannot do, and bring in the help you need to fill those gaps ASAP.

TAGS: Finders, Minders and Grinders, Keenan Beasley, Blake Christian

*** Take our Insta-Poll and see how you stack up to your peers.

HB Clients Attracting National Media Attention

Burning the midnight oil may seem lonely at times, but your efforts did not go unnoticed by your clients or the national media. Those of you who’ve been making your weekly Gut Check™ accountability calls are 5-times more likely to obtain coverage and guest publishing opportunities.

Here’s a sampler:

BLAKE CHRISTIAN, CPA explained to Financial Advisor Magazine readers how the potential elimination of the AMT Slams HNW Clients on Real Estate. “Repeal of the alternative minimum tax could have a significant impact on investment plans,” said Christian. “Under current law, alt min’s top rate is 28 percent. Its elimination would drive many AMT clients into the 35 percent bracket and push them to invest in tax-free municipal bonds,” added Christian, a partner at HCVT LLP in Park City, Utah. Christian recently unpacked the Trump Tax proposal on the Mountain Money podcast and keys to opening a new office on the Journal of Accountancy podcast.  Blake was recently interviewed on Sarder-TV about his new book, “Becoming a CPA-Preneur, Never Again Be the Most Boring Person in the Room.”

KYLE WALTERS, a partner of Dallas-based L&H CPAs & Advisors landed regular guest columns in Accounting Today (The Power of the Red Chair) and CPA Trendlines (How to Avoid Getting Run Over or Left Behind). Hint: Staying in your lane will not get it done in today’s complex advisory service super highway.

SAMUEL BETHEA, The Rosewood Group’s president, was among the cybersecurity experts profiled in Digital Guardian. "When it comes to security measures in a small business, the metrics generally fall into two categories: internal protection and external credibility,” explained Bethea.

MATTHEW TOPLEY, Chief Investment Officer of Fortis Wealth in Valley Forge, PA told The Street why Millennials Are Scared and This Is the Financial Reason Why. He was recently published in Planned Giving Design Center (Top 10 Life Advice Comments for Millennials). Hint: Get off Facebook and learn how to write, speak and network in the real world, advocates Topley.

ANTHONY GLOMSKI, founder of Los Angeles, based AG Asset Advisory  is frequently asked to comment about cutting-edge issues at the intersection of finance and technology. Take Bitcoin and blockchain technology. Glomski told US News & World Report that "Blockchain appears to have the potential to be as transformative as the internet.” However, he cautioned that at this stage you’re talking about “speculation rather than an investment. This phenomenon is as old as the tulip bulb bubble of 1634.” Glomski was also interviewed on Sarder-TV about his new book, Liquidity & You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit.
 
Also check out other provocative new books by our clients:

• International Tax & Compliance Handbook (with special emphasis on India-US)
  By Cecil Nazareth, CPA, CA, MBA
  
  
• The Benefits of Becoming a CPA-Preneur: Break the mold; never be the most boring person in the room
  By Blake Christian, CPA/MBT

Conclusion

According to the Wealth Advisor Confidence Survey™ 2017 that we conducted with The Financial Awareness Foundation, half of advisors (48%) say that being quoted in the press is a “Very” or “Extremely” effective way to enhance thought leadership. Nearly two thirds of respondents (63%) say the same about writing articles for publication. Respondents were 5-times more likely to cite these channels than to cite mainstream social media (other than LinkedIn).

Are you sure you don’t have time to publish, speak and grant interviews in 2018?

*** Are you a Finder, Minder or Grinder? Take our Insta-Poll and see how you stack up to your peers.

TAGS: Blake Christian, Anthony Glomski, Kyle Walters, Samuel Bethea, Cecil Nazareth

New Books by HB Publishing Clients Help You Flex Entrepreneurial Muscles

What could a surfer from the Midwest, a snowboarder from California and a field hockey coach from India possibly have in common? Answer: They’re entrepreneurial financial advisors who love working with fellow entrepreneurs.

They’re also book authors who recently collaborated with HB Publishing & Marketing Company to unlock more than 100 combined years of wisdom about successfully planning your business exit, avoiding international tax traps and seeing around the corners to make your firm and your own career more successful. If you like concise real-world client examples rather than textbook theory, you won’t be disappointed with the three new releases below:

International Tax & Compliance Handbook (with special emphasis on India-US)
Author: Cecil Nazareth, CPA, CA, MBA, a former professional field hockey player from India and a partner of Norwalk, CT-based Nazareth CPAs. Nazareth said a lack of knowledge about international transaction rules and reporting requirements leads to very poor decisions that can trigger significant financial penalties, even jail time. ”Too often even very smart individuals and very savvy companies don’t know what they don’t know,” observed Nazareth. “That’s what inevitably gets them into hot water as FBAR, the Panama Paper and the Paradise Papers have taught us.”

Liquidity & You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit
Author: Anthony Glomski, founder of Los Angeles-based AG Asset Advisory. The Midwestern-born world traveler, now an avid surfer and Porsche club member, said successful entrepreneurs work tremendously hard to build their companies, but too often overlook the importance of having a transition plan for Act 2 of their post-liquidity lives (emotional risk). They also tend to have a significant overconcentration of personal wealth tied up in their businesses (financial risk). “Change is constant. Challenges are inevitable. The only way to survive is to create a solid support team around you and never give up,” noted Brian Vickers, a NASCAR driver who wrote the forward to Glomski’s book.

The Benefits of Becoming a CPA-Preneur: Break the mold; never be the most boring person in the room
Author: Blake Christian, CPA/MBT a partner of HCVT, one of the nation’s fastest-growing CPA firms. Christian grew up surfing the waves of Long Beach, CA and now surfs the snow in Park City, UT when not in the office. Christian stressed the importance of learning how to get outside your comfort zone to become proactive rather than reactive. If nothing else, that means bringing solutions to clients (or your bosses) before they ask for them. “The days of being a financial historian and looking through the rear-view mirror are over,” observed Christian. “Being proactive is so much easier than undoing client’s bad decisions after the fact.”

Like Christian, Glomski finds many parallels between surfing, the business world and life. 

“Sometimes when surfing, you get pulled underwater by a big wave. The instinct is to fight the force of the wave, but what you really want to do is surrender to the power of the wave,” explained Glomski. “If you do, you will eventually float back to the surface. You’re at the mercy of the ocean, just like you’re at the mercy of the market. You can’t fight the market, but if you stay within your plan and don’t panic when things get rough, in the end, you’ll likely come out on top.”

Conclusion

All three authors are very candid about the influence that their parents and families had on their careers. “My parents sacrificed a lot to give me and my siblings a great education and left us with these words of wisdom,” related Nazareth:

• “Always give more than you get.”
• “Challenge yourself and hold yourself accountable.”
• “Inspire, motivate and bring out the best in yourself and others.”

Great words of advice to keep in mind during the Holidays and beyond.

TAGS: Cecil Nazareth, Brian Vickers, Blake Christian, Anthony Glomski, Business Exit, FBAR, Entrepreneurial CPA