Last month I introduced myself to you, and I thank you for reading and for those who gave me a call or dropped a note to say you had seen and read my column. Depending upon the gentility of the reader, the most often heard comment was some version of, “You didn’t say (a) anything too controversial, (b) anything I could act upon today, or (c) much of anything at all!” Friends from my youth asked what happened to my hair, but that’s a subject for a different time.
Okay, I admit I kept it pretty general and low-key for my first column in the Sun community newspapers, but I do want to remind you that I did say one thing to you that is essential for your financial well-being: Have a Plan!
And please remember that the adages you have heard about planning apply. Including:
- If it’s not written down, it’s not a plan.
- A plan must have clearly-stated, measureable, goals.
- For a plan to be of any use it must be monitored on a regular basis and be flexible enough that it can be modified as life’s circumstances change.
But today, let’s jump to something very specific, and some planning you need to do before the end of the calendar year.
We have all seen the stock market drop, see-saw, and drop some more in the late summer and early fall of 2015. While this has damaged your statements, if your investment horizon is long-term, this shouldn’t pose too much of an issue for you.
What is of significance, however, is that in the early part of 2016 many investors may be having a conversation with their financial advisors that will begin with something like this:
“Let me understand this, Mr./Ms. Trusted Financial Professional. The markets were down at the end of the year, and so my account balance is down for the year, right? My 1099 tax document shows a large capital gain that I have to pay taxes on, right? So I lost money in the markets, I have to pay taxes on some gain I’m not seeing in my account, and on top of that I paid you a fee for this?”
Please let me insert a disclaimer right now. It’s October, and I absolutely do not know if the markets are going to be up or down by year’s end. I also do not know what your specific situation might be. But I do know that many mutual fund companies have had large internal capital gains over the past six or seven years, and with the recent market volatility many of those gains were realized by the mutual fund companies. Mutual fund companies began providing estimates of year-end capital gain payouts in early October, and some of those estimates are startling.
My call to action is this: You need to have a conversation about this matter with your financial advisor and tax professional ASAP, to avoid a tax surprise due on April 15th of 2016. To address this situation, you cannot wait until year’s end. Mutual fund companies declare capital gain payouts throughout the last quarter of the year. Once that occurs, your opportunity for taking action has passed. You always need to consider the tax ramifications whether you are buying, selling, or holding, but 2015 might be shaping up to be a unique year that includes both market losses in your investments, and simultaneous capital gains taxes.
So put down the paper, go see your advisors, and make a plan for 2015 Q4. Do it now!
For the fifteenth year, the Lake Mirror Classic Auto Festival is partnering with Junior Achievement (JA) to raise awareness of the importance of economic and financial education for today’s youth. Event Chairman Ford Heacock states, “I support Junior Achievement because it teaches students about economics and business. JA’s positive impact is measurable.”
On Friday, October 16th Junior Achievement presents the First Annual Culinary Cook-Off at Club Magnolia sponsored by Allen & Co. Ten restaurants are also supporting Junior Achievement by providing delicious tastings in one or more of the following categories: appetizers, main entrée, and dessert. In addition to the fantastic food, guests will enjoy live music performed by Skip Frye and a Silent Auction benefiting Junior Achievement.
Lily Romine, Regional Director for Junior Achievement in Polk and Highlands said, “We appreciate our Title Sponsor, Allen & Company so much because in addition to supporting JA at this exciting new event, they also are proud supporters of Junior Achievement programs. It was very rewarding to see the students at Lawton Chiles Academy light up with excitement when their JA volunteers from Allen & Company taught the JA Economics for Success program in their seventh grade classrooms!” Dana Hurley, Financial Advisor and Junior Achievement of Polk County Board Co-Chair added, “It is our firm’s mission to give back to the community we live in and provide financial education for our clients and our community. Volunteering through Junior Achievement allows us to achieve both goals.”
Junior Achievement teaches students around the world to succeed in a global economy. According to Shannon Long, JA Education Director, “This school year Junior Achievement’s goal is to teach important financial literacy, work readiness and entrepreneurial lessons to 10,504 students in 583 classes throughout Polk County.” Junior Achievement’s hands on K-12 grade programs help prepare young people for the real world by showing them how to generate wealth and effectively manage it, how to create jobs, making our communities more robust, and apply entrepreneurial thinking to the workplace. Students put these lessons into action and that helps strengthen our community. “Today’s young people need financial education in real terms, and JA provides that,” said Kelly Williams-Puccio, Publix Super Markets Charities Executive Director, Co-Chair of Junior Achievement in Polk County and dedicated JA classroom volunteer.
Volunteers lead all Junior Achievement programs. Danielle Durham, an Allen & Company associate volunteers for JA because “I like to be able to inspire young minds!” Junior Achievement offers their programs at no cost to the schools. They do this through support from the community, businesses, individuals, grants, and fundraising events like the Culinary Cook-Off.
The important life lessons Junior Achievement students learn from their JA volunteers are PRICELESS!
The Culinary Cook-Off competitors are: Abuelo’s, Outback Steakhouse, PDQ, Publix Aprons Meals, Johnson’s Barbecue, Fred’s Market, Fresco’s, Il Forno, Winner’s Circle, and LEGOLAND Resort. Don’t forget, along with the delicious tastings, there will also be a fabulous JA Silent Auction and live music by Skip Frye.
Tickets are on sale now for $30 at www.JAPolk.org or $40 at the door, and includes admission, food tasting and two drink tickets. Table Sponsors for 10 guests and table recognition are still available at $300.