Weekly Reading

Organizing Tax Records This Summer Can Help You Keep Your Cool
If the sweltering dog days of summer aren’t incentive enough to get out of the sun for awhile, the IRS suggests another reason to head indoors: organizing your tax records. Devoting some time mid-year to putting your tax-related documents in order may not only keep you out of the sun, but it should also make it easier for you to prepare your tax return when the filing season arrives.  Here are some things the IRS wants individuals and small business owners to know about recordkeeping.  
Financial Planning
Ignore Generic Financial Advice
When you’re sick and go to the doctor, it’s safe to say you expect to be assessed and treated based on how you feel. But what if the doctor just makes an assumption?  Maybe it’s flu season. Since your symptoms sound close enough to his most recent patient, he I suspect that if you had this experience, you’d find another doctor who thought it worth examining each patient and considering individual symptoms. So when it comes to our personal finances, why are we willing to settle for generic financial advice that may or may not apply to everyone?decides that you don’t need an actual examination. He’ll just recommend the same treatment and move on to the next patient.  I get why people like the Dave Ramseys and the Suze Ormans of the world. Their no-nonsense approach and “you can do it” attitude are super appealing. But they don’t know you. And they don’t know your specific needs.  
Estate Planning
12 Estate Planning Questions That Might Make You Squirm
For most people, estate planning is more painful than a root canal without Novocain. Among other things, it forces us to acknowledge that we may become demented; decide who gets what after we pass away; and make provisions for end of life care.  Facing our To help implement your wishes, trusts and estate lawyers need to ask very tough questions. Some of them might make you squirm. Thinking about the following issues in advance can help you prepare for a meeting about your estate plan.mortality is one of the hardest things we must do in life—so hard, that I postponed my own estate planning even though I’m a lawyer who does this for a living. My husband and I only signed the necessary documents because it was a requirement for adopting our daughter in 2002. And we did that at the airport on the morning we waited for her to arrive from Korea.  1.  Who will raise your children if both parents die?  A number of clients have told me that they waited until all of their children were grown to discuss estate planning because they couldn’t figure out whom to name as a guardian. If you fail to name a guardian, then the court will do it for you, based on what it deems to be in the best interest of your child. Unless you have confidence that a judge who never knew you has better judgment than you do about matters involving your children, it is best not to stick your head in the sand for 18 years.
Recession Generation Wary About Big Purchases
Sometimes fear can lead you down the wrong path (or keep you off the right path). (Bloomberg News) The day Michael Anselmo signed a lease on his first apartment in New York City, he lost his job at Buck Consultants LLC. He spent about 10 months struggling to pay rent with unemployment benefits. Two years later he’s still hesitant to buy a home or even a road bike.  “Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.”  Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II. Confronting a jobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible.  As the Great Depression shaped the attitudes of a generation from 1929 until the early years of World War II, so have the financial crisis and its aftermath affected the outlook of young consumers like Anselmo, said Cliff Zukin, a professor of public policy and political science at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the state university of New Jersey.
Recession Generation Wary About Big Purchases
Stupid Move: Spending Too Little Money
Rick Kahler, an advisor who writes for AdviceIQ, is a superb contrarian. Like with his thoughts here about why it is dumb to spend TOO LITTLE MONEY.  You’ve heard about spending too much. What about people who spend too little? This is especially a problem for retirees who habitually tighten their belts, long after they need to. It harms their quality of life.  My usual advice is: “Be frugal.” “Save for the future.” “Live on less than you make.”   This is well worth repeating, even though too many Americans aren’t following it.
via Let Buffett’s ‘moat’ protect your portfolio – Jonathan Burton’s Life Savings – MarketWatch.
SAN FRANCISCO (MarketWatch) — Raise the drawbridge and man the parapets. Some investors are looking to defend their portfolios with help from mutual funds and exchange-traded funds that buy stocks of companies with “wide moats” — meaning barriers to entry that their competitors find extremely difficult to overcome.   “Moat” is Warren Buffett’s description of such an advantage. The famed investor has said that he seeks “economic castles protected by unbreachable ‘moats.’” The idea is to buy, when they are reasonably priced, shares of companies that dominate their industries and show clear potential to maintain their superiority over decades. Read more: Warren Buffett’s winning ways, 50 years on.
via Let Buffett’s ‘moat’ protect your portfolio – Jonathan Burton’s Life Savings – MarketWatch.
What the ‘Fiscal Cliff’ Will Mean for You – DailyFinance
The economy is rumbling along, out of control, with nobody at the reins. Straight ahead, the road abruptly ends, yet the horses show no signs of slowing. Next stop: the fiscal cliff!  Much like a scene out of an Indiana Jones movie, the wild ride to Jan. 1, 2013 is developing into a perfect storm of economic and political pusillanimity. And in a sense, it’s been headed this way since the first reel: Facing a financial crisis that threatened to sink America’s credit rating, Congress agreed to increase the debt ceiling, but only if the conservatives were given a major deal to reduce the deficit.  But those same legislators were unable to agree on what combination of tax increases and budget cuts would be employed to shrink the deficit, so they punted that problem to a “super committee” of 12 congressmen and senators who were tasked with untangling the Gordian knot of America’s finances. That super committee was given the best incentive a congressman could imagine to craft a compromise: Failure meant automatic cuts to federal spending across the board, painful to both Democrats and Republicans alike.  It wasn’t enough of a goad: The super committee also failed, triggering those billions in automatic cuts, which will kick in on New Year’s Day.
via What the ‘Fiscal Cliff’ Will Mean for You – DailyFinance.

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