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Recent blog posts

Avoid Using IRA Money to Buy a Business

Posted on in Finance

Business owners may need capital to support growth, and the money in their IRA can be tempting. Nevertheless, the pitfalls can be steep, as illustrated in a recent Tax Court case (Thiessen v. Commissioner, 146 T.C. No. 7 [3/29/16]). Here, the court ruled that because a married couple had entered into prohibited transactions with respect to their IRAs, the assets in the IRAs were deemed to have been distributed, resulting in a huge tax bill.

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Make the Most of Financial Aid

Posted on in Finance

If you or your child are enrolling in higher education and are now facing tuition costs, you are familiar with the steep price tag. Another post this month discusses the importance of knowing what aid opportunities are available to your family in order to make the actual cost more manageable.  The greater the financial aid, the lower the net cost of college. 

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The True Cost of Higher Education

Posted on in Finance

The College Board reports that full-time students at private institutions typically paid almost $44,000 for tuition, fees, room and board during the 2015-2016 academic year. That’s the average, so costs at some private colleges and universities were well over $50,000 per year. Higher education at public schools was much less expensive, but in-state students still spent nearly $20,000 for tuition, fees, room and board, on average. All college costs continue to rise, so younger students probably will pay even more when they arrive on campus.

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What the New Fiduciary Rule Means to Investors

Posted on in Finance

In April, the U.S. Department of Labor (DOL) made headlines with its final rule covering conflicts of interest among investment advisors. Media coverage focused on the difference between a “fiduciary” standard and a “suitability” standard. Financial advisors and investment firms have been debating this issue—often heatedly—for years, and the DOL action probably will bring about changes within the industry.
The new rules also have a message for investors, especially those who rely upon an adviser. This lesson may not be astounding but it’s worth keeping in mind: You should know what investment advice is costing and whether you’re getting your money’s worth.

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Business owners should have an exit strategy: a plan for the time when they’re either unwilling or unable to keep running their company. Often, that planning can include a current disaster plan for relatively young business owners and a future long-term succession plan for a smooth path to retirement.

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ETFs Grow in Popularity Despite Risks

Posted on in Finance

From virtually nowhere, exchange-traded products have grown to over $3 trillion in assets. A small portion of these products are exchange-traded notes (ETNs), but most are exchange-traded funds (ETFs): typically, pools of securities that trade like stocks.
A large amount of ETF assets, in turn, are in funds that track major stock market indexes such as the S&P 500 and the NASDAQ 100, as well as small-company indexes, foreign stock indexes, and so on. These ETFs tend to be low cost and tax efficient, so many supporters of a fiduciary standard for advisors believe that the new rules favor ETFs as being in the best interests of many investors. Indeed, one Morningstar analyst has asserted that an estimated $1 trillion of investment assets will shift into ETFs.

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