Client Portals

5 Healthy Investment Priorities for the Summer4 min read

Jul 9, 2014 - John Osbon ( 6 mins to read)

Summer is a great time to accomplish things; it’s more relaxed and you have more time. With time to focus and prioritize, why not put the most important person – you – first? Here are five tasks with long and short-term payoffs for your to-do list.

1. Cut your taxes
Let’s get started with the easy steps, like cutting taxes.  Tax rates have been going up, loopholes are shutting down, and unless you have been aggressively paying attention you may be paying more in taxes than you need to.  In Massachusetts the combined top Federal and state tax rate is now 44.8%! It’s no surprise the federal deficit is plunging to below $500 billion this year, down from the dark deficit days of $1.8 trillion. We’re all glad to see that, but no one wants to pay more than their share. What can you do?GHLead_HealthySummer.widea

  • Open a Health Savings Account (HSA) and use it to pay for high deductibles or expenses not covered by your plan, such as dental.  You can contribute $6550 per family ($7550 if you’re over 55).  At that 44.8% rate, you’ll pay $3300 dollars less in taxes the moment you fund your HSA.  Unlike FSAs, HSAs go on forever and can even be invested for growth, like an IRA.  Fidelity provides a convenient way to open an HSA.
  • Don’t forget those 529 accounts!  529s (tax-deferred money to pay for college or graduate school) have high contribution limits, and can be gifted to others indefinitely.  529s are such a sweet, flexible tax-deferred incentive you can even consider establishing “permanent” 529s to pay for generations of education. Overfund them, invest, and roll them forward to the next generation. Everyone benefits.

2. Cut your fees
This one is really easy.  Almost all investors pay too much in fees. Big wire houses have big bills – huge ad campaigns, prime real estate, mahogany offices, and fines for misbehavior ($90 billion and growing). So they charge fees wherever they can.  Many of these fees are hidden, and hard for an investor to find. But we know where to look. The first thing we do with a new client is a cost audit of their existing accounts.  We routinely find at least 50 basis points of expense with no value to the client.  Ask us to do the cost audit for you and we’ll prove the point.

3. Meet with your advisor
What’s my plan? How am I unique? Can you please provide it to me in writing? These and other key questions can reassure you that you’re receiving the service and attention you deserve, or perhaps reveal the need to raise your expectations and ask for more.  See next week’s “6 Questions To Ask Your Investment Advisor” for a useful checklist.

4. Make money when you spend money
This is profitable and funny at the same time.  We know you can’t get any short term interest these days, thanks to the 6 year long zero interest rate policy of the Federal Reserve.  But have you set up your credit card to get 2 percent back in cash on everything you spend?  Strange, I know, but true.  I use the Fidelity green American Express card for everything (including gas and groceries) which deposits that 2 percent in cash in my Fidelity account every quarter.  You’d be surprised how much it adds up. Just make sure to pay the bill in full on time or get socked with a 17 percent interest rate on unpaid balances!

5. Join the sharing economy
Saving money on everyday activities? There’s an app for that.  If you haven’t tried them yet, use the Uber app for your next taxi ride, and for your next place to stay when traveling.  Both companies are on to something big – better service and choice, for less, almost effortlessly.  Uber, a private company, is upending the taxi cartel and is currently valued at $17 billion. is doing the same thing to the hotel industry, and is valued at $10 billion, more than Hyatt. Have fun while saving money!

It adds up
Some may think these tax benefits, rebates and cost savings are petty.  I disagree. Compound them out over decades or even generations and the impact becomes huge.  Money management is a business of basis points – hundredths of one percent – both in cutting costs and improving returns.  Small differences become huge over time.

Use your summer now to your advantage.  Or call us – we’ll help you get started.


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