Stu talks about 8 Basic Money Lessons Everyone Should Know

The news is in, and it’s scary: Americans are falling behind the rest of the world when it comes to financial literacy. A recent study of 29,000 teens across 18 industrialized countries found that financial literacy rates in the United States fell right in the middle of the spectrum, just under Latvia and Poland and right above France and Russia. The most financially literate teens were in Shanghai.

But it’s not just the younger generation that’s lacking in financial know-how; research indicates that only 40 percent of U.S. adults keep a budget, and a third of Americans can’t answer three simple financial questions on topics such as how interest works, how inflation works, and the difference between stocks and funds.

Let’s combat this lack of financial literacy. Here are eight basic money lessons that everyone should know.

1. The earlier you start saving, the better off you’ll be when it’s time to retire, thanks to the “magic” of compounding interest. Saving your money in an interest-bearing account means that it compounds itself over time.

2. If you spend more than you earn, you’ll always be in debt. Simple rule: You must bring in more than you shell out in order to come out ahead. Living not only within, but also below your means is the key to financial security for the long term.

3. There is no reward without risk. If you keep your money safe in a low-interest account, such as a
bank account, you’re passing up on the the chance for higher returns. This may be fine for the short term, but over the long term, riskier investments — such as a highly diversified portfolio (see #4) — have a higher potential to produce significant rewards.

4. Diversification is key. Remember that old saying, “Don’t put all your eggs in one basket”? That really applies to your investments. True diversification is broad and deep, and it helps you weather the inevitable ups and downs of the market. Your financial advisor can help you ensure that your portfolio is truly diversified.

5. Treat managing your money as a lifestyle choice. Decide early on that you will control your money, and make it a habit. Create a balanced budget and stick to it, revisiting it when necessary.

6. Prioritize your spending. When it comes to spending money, what matters most? Is it saving for a new car each year, taking a vacation, or living in a nicer (more expensive) area? Does it make you happier to eat out or to renovate your kitchen? Figure out what is most fulfilling, and then prioritize. Differentiating between needs and wants can help you stay within your budget and still live comfortably.

7. Save smart. Create a financial plan that includes your long-term goals; then, adjust your savings
to meet that plan. Craft your investment and savings activities around your goals, so you can avoid surprises later.

8. Avoid debt. While some debts, such as student loans, mortgages and car loans, are almost unavoidable and help you get where you want to be in life, some types of debt — such as credit card debt — should be avoided if at all possible.

These basic tips are a start, but the financial industry is constantly changing. It’s essential to continue educating yourself and improving your financial literacy in order to make truly well-informed decisions.

Listen below to Stu and Win Damon chat about this topic on Joppa Radio FM 96.3 WJOP Newburyport, MA

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About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Stu chats TAX Reform with Win Damon on FM 96.3 Joppa radio

Tax reform is front and center these days as potential plans for reform are being pushed and are in ASAP mode.  As usual there are so many stories and claims to this extremely huge issue.  After reviewing dozens of articles I am hard pressed to find any that say that reform as it is currently being debated is going to be good for America.

The one argument the GOP continues to use is the “trickle down” theory which says cut tax on the richest and the fruits of the tax cut will trickle down to the masses.  This I find to be unequivocally untrue and in fact it did not work under Reagan or Bush and will fail again if enacted.  The rich and big corporations will get richer, the poor will get poorer, and the middle class will continue to shrink.  The cut will stimulate little job creation, will not repair our crumbling infrastructure, and will most certainly lead to vital cuts for programs such as medicare and social security as well as ballooning the already massive deficit.

In fact, I have not found one article advocating for these cuts that uses any “theory” besides trickle down.  See the articles below among many others that show how amazing these cuts are for the top 1/2 of 1%.  In fact the “pass through” tax break will provide massive tax cuts to the super wealthy.  Please read for yourself below.

http://www.businessinsider.com/trump-gop-tax-plan-middle-class-effects-tpc-analysis-2017-11

https://www.cbpp.org/research/federal-tax/republican-leadership-tax-plans-pass-through-tax-break-would-provide-massive  (From the Center on Budget and Policy Priorities)

I hope I am wrong but all the intellectual studies back up my claims.  Trickle down will fail and cause far higher inequality in America.  Again, I hope i am incorrect.

 

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About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Stu and Win Damon chat with Tom Mcgee of Klone Lab Inc on WNBP.com FM 106.1 Newburyport

I enjoy working with and learning from entrepreneurs in all stages of the business life cycle and Tom McGee (on the left in photo) of Klone Lab Inc (www.klonelab.com) fits the bill perfectly.  He is looking to move his 20 person international design firm to Newburyport in an abandoned building on the waterfront next to the water treatment facility.

Currently this building is not being used and would be great for the economy of Newburyport.  20 or more workers will be working downtown and the firm would be able to attract talent from the Boston area who would take the train and the rail trail to the work place.

It is ideas like this that stem from the mind of entrepreneurs that contributes so much to why I love my job.  Some businesses are barely seeds in a persons mind, and I love to help germinate those seeds to help manifest the business idea.  In this case, Klone Lab is a going concern it is really about locating the business in Newburyport in a city where Tom is raising his family.

I certainly hope the mayor and others involved including David Hall who designed the Tannery (among other spaces) in Newburyport can come together and make this abandoned space workable soon.  All of us here in the great city of Newburyport benefit when the economy improves.

Listen below to our chat with “Morning Guy” Win Damon on WNBP FM 1061.1 and streaming on the web at WNBP.com.

 

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About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Stu and Win Damon chat with Bob Pezzella of RMS Mortgage

iStock_000062644558_Full

Stu Steinberg and  Win Damon of WNBP FM 106.1  in Newburyport had a great chat with local mortgage expert Bob Pezzella (NMLS #112811) .  As a local tax guy and entrepreneur, I love to bring others on WNBP for my weekly chats.  Bob fits perfect of course, and now is an amazing time to buy a home.  Click on our radio chat below.

Diligent, meticulous, laser-focused.  This should be your mind-set if you are preparing to buy a home or getting ready to sell the one you’re in…

This holiday-post-election season finds us in a bull market trading off of the idea that lower personal and corporate income taxes will stimulate the economy coupled with the belief that deregulation has been constraining growth.  All week and today the DOW has seen unprecedented highs breaking through 19,000.  A rate hike from the FED next week is virtually 100%.

What does this have to do with your new home sale or purchase?  Higher interest rates will cost you more money per month and for the long haul and can also affect your borrowing power.  You can help minimize this impact by carefully monitoring your credit score and financial profile to ensure that you qualify for the best rates and programs available.

When you’re out holiday shopping and you open a new store charge to reap the large discount that’s offered, make sure you get that first bill and make timely payments. Credit card late payments can crush your credit score, knocking you out of qualifying for the best mortgage opportunities.  In short, get organized now, speak with your financial planner, accountant,  loan office, realtor.  If you’re thinking “Spring Market” NOW is when that preparation starts!

Like what you have read? Please share with friends.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Fun Money Game Show Trivia on WNBP Radio with Win and Pete!

I have always enjoyed my weekly chats with Win Damon on WNBP every Tuesday morning at 8:35.  We certainly talk about so many challenging money topics.  It is good to change it up every once and a while and have some extra fun.  So I recently brought in Manager Pete Falconi and we played a little “money” trivia.  I mean ACTUAL money.  Like how old is money and how much does it cost to print etc.  Who knew that paper money is actually not made of paper, but 75% cotton and 25% linen with synthetic fibers woven throughout the bill!

Tune in below and listen too our chat.  We really do have fun talking about money each week and hope you enjoy our weekly chats!  Please reach out if you ever have any questions!

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Stu chats Home Buying with Mortgage Banker Bob Pezzella

A few times a year I love to bring Mortgage Banker Bob Pezzella on the radio with me in my trusty Tuesday am slot with morning guy Win Damon.  Talking about buying a home is stressful, and the rules put in place to help the consumer have actually made the process harder, more costly, and its taking longer to complete deals.

In other words, it PAYS to be proactive when even THINKING about buying or refinancing.  Get all your ducks in a row and you won’t be let down if you find your dream house and you just are not ready to buy it.

Listen to our chat below on WNBP FM Radio 106.1 In Newburyport, MA.  Streaming live at WNBP.com.

About Stu: With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He uses his CPA expertise to help each client navigate their long-term debt and mortgage, gaining them the best deals and rates possible. Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

 

Halloween and the Economy

SONY DSCThe candy industry here in the United States is a whopping 20 billion dollar a year business. Candy, Candy makes up about 1.9 billion dollars of the Halloween “budget.” Decorations $1.65 billion, greeting cards  $350 million, and costumes take the cake at 2.12 billion dollars. On average, houses in America spend around $44 on Halloween candy every year, and the candy purging starts usually around October 21st

Americans consume around 24 pounds of candy each year, which is the equivalent of 247 and 3/4 hershey’s chocolate bars. This goes without saying that the most candy is eaten in the few days before Halloween, but mostly in the days to follow it. The top selling kind of candy is ——— you guess it! Candy corn. We consume around twenty million pounds of candy corn, followed by snickers in second place, dresses peanut butter cups at third, kit kats and number four, and m&ms pulling up the rear at fifth place.

After deciding what to dress up as for Halloween the next important question is, “chocolate or non-chocolate candy?” Out of the 1.9 billion dollars spent on Halloween candy around 1.2 billion is spent on chocolate candy, leaving about 680 million dollars on non-chocolate flavored candy. What do we all like the least? Those weird warm-colored taffy candies that no one likes but somehow end up in our candy stashes. Those are the first to be offered when trading the loot with others.

Major spending holidays, like Halloween, can sometimes have significant short-term benefits for the economy. People are encouraged to buy extra things that they might not usually need to buy. This stimulates our economy and helps it to grow. Some people argue that the current state of the economy affects the Halloween industry more than it affects the economy. For example in a down economy patrons might be less likely to spend their money on “unnecessary” things like candy, costumes, decorations and pumpkins, thus less stimulation of the economy. It is also possible that some families anticipate spending more during the Halloween season than they normally would during the year. As a result they anticipate this by saving more money in the months prior ( July, August, September) which reduces gross spending during those times.

The most important part of Halloween is that everyone have fun, stay safe, and enjoy their fair share of tricks and treats.  Listen below to Win Damon and I chat this up on WNBP FM radio 1061.1 Newburyport and WNBP.com.

Sources

http://www.creditloan.com/infographics/the-economics-of-halloween/

http://www.investopedia.com/ask/answers/102714/how-does-halloween-affect-economy.asp

A Review of GOP Presidential Candidate Donald Trump’s Income Tax Plan

Close - up US Tax income form

I spoke with Win Damon last week about Mr. Trump’s income tax plan.  His plan would cut taxes and lead to higher incomes for taxpayers at all levels of income, including the wealthy and the super wealthy.  In many ways it is a classic GOP tax plan where the money flows from the rich in the form of huge tax cuts and trickles down to the middle and lower incomes though jobs and further economic gain.

Single filers making less than $25,000 and married filers making less than $50,000 will pay no taxes on the plan.  Currently around 45% Americans do not pay any tax and the number would increase under Trump’s proposal.

One point of interest is that Mr. trump wants to go after one particular group of super wealthy folks and make them pay their fair share:  The Hedge Fund Guys.  He’s talking about them everywhere.  They pay income tax at the long term capital gains rate of 23.8% instead of the ordinary income tax rate of 43.4% on monies that they earn.  The key here is that they are not risking their own money, and should be taxed at the ordinary income tax rate like all other workers who are not risking there own money!

In the end, Trump’s plan cuts rates at the top and the very top even more than Jeb Bush, and this will surely lead to more arguments about trickle down and inequality in America.

With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He also uses his CPA expertise in many areas of personal finance.  Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

Click below to hear the chat with Win Damon on WNBP.com and FM radio 106.1 WNBP in Newburyport, MA.

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