When will your money double?, Tchotchke planning & IRS fraud guidance

3 key tax, financial & estate takeaways while working from a cottage in Vermont:
1) Quick tip on how to calculate (approximately) how long it will take for your money to double,
2) Planning for your personal belongings,
3) IRS fraud prevention tips.

Enjoy!

September 12, 2023

Transcript

 That means pumpkin spice lattes, Halloween candy getting sold in the stores now, football starting,  I know some of you have been waiting to see my reaction on the Chicago Bears and we're not going to talk about that today. That was a rough opening week for the Bears. You know, where I live, I know some Giants fans are reeling a bit too, so.

 It's September and it's September 12th. And for those of us who have businesses and, and corporations and LLCs, it means quarterlies are about to get filed. It's a lot of fun things happening right now. Good times. You know, I have three things that I want to talk about with you this morning, and I figured this might be a good way for us to sort of segue into the last four months of the year.

I just got back from, from a trip with Pinky where we were actually working remotely because we just became, we just started a new beginning. We actually started, what I call what we're calling now a new beginning. We're not calling it empty nest life. Some of you know that both of our kids are off to college now, and it's the first year that we have both of them in college, so it's a little bit of an adjustment, but rather than calling it an empty nest, which.

Might feel a little sad. We're calling it a new beginning for all four of us. So super, super happy about that. But, as we were thinking about this pinky and I were actually at this positive impact summit up in Vermont, had a fantastic time with it, with just some amazing people, super inspiring. But one thing occurred to me and one of our, one of our, teammates, let's just say, who was at the positive impact summit shared this.

And I just realized that not a One of the things I'm going to talk about is how to double your money. And when I say how to double your money, I'm not talking about like a get rich quick scheme, but literally calculating how you're going to double your money. So let's talk about that. We're going to talk about the rule of 72.

We're going to talk about what happens with little things or artifacts or heirlooms that you have and how that implies on these, how that impacts on the estate planning side. And then finally, we're going to talk about this guidance that the IRS gave right now, because with all these filings that are going on, That also means is not just pumpkin spice lattes and apple cider donuts.

It means a tax fraud schemes are going to start picking up and some of these charity schemes. So let's talk about that as well, too. So without further ado, let's get right into it. The rule of 72, how long. Is it going to take for you to double your money? And there's a quick little hack that a lot of us know in the financial industry for this, but not a lot of lay people know.

I think Peter Lynch has this amazing quote that says most people are going to graduate from high school knowing the difference between a sine and a cosine at some point, but even more are going to graduate not knowing the difference between a stock and a bond. So I think financial literacy is, it's, it's getting better, but it's not quite there.

So let's talk about one of these things that I think would be helpful. So imagine that you save some money and that you're earning interest on it. In an investment or in a bank or on a mutual fund or on a money market or whatever the case is, how long is it going to take for that money to double? Well, this rule of 72, that's a simple trick to figure out how it works.

So you take the number 72 and you divide it by the interest rate that you're earning. And that result gives you the approximate number of years that it's going to take for that money to double. So let's just say, for example,  it's you're earning on your investments right now, because that seems to be a sort of.

I don't know. I don't want to say common, but let's just say you're earning 6%. If you're earning 6 percent on your savings, you take 72 divided by 6, 72 divided by 6, you get 12. So it'll take approximately, approximately 12 years for your money to double if you're earning that 6 percent interest. That's it.

It'll take that long. So that's just a quick way to doing it without getting into a whole lot of complicated math. But remember, it's, it's an estimation. It's an approximation. You might need some actual time. Now that doesn't mean go out there and, and, and go chase a 6 percent rate of interest. That's not what I'm saying at all.

I just want you to get an idea of this little rule of thumb, this hack that might help you. And look, obviously investing in personal finance is a very personal thing. So you want to make sure that you're investing in your lane. And there's other considerations as well too. So this is not meant to be legal advice, tax advice, financial advice, marital advice, cooking advice, or any of that sort of stuff.

This is really just meant to give you some guidance. And here's the, that's a quick tip. Number two, as we kind of come towards the end of the summer itself, we had actually the, the, the privilege of staying in this beautiful cottage up in Vermont. While Pinky and I were working remotely from there too, and yes, we were working, but,  you know, it got me thinking like that, that cottage, that, that a lot of people will think about their lake homes or their beach homes or their vacation homes on what happens with their legacy when they're no longer here, but what a lot of people don't think about is the little things.

These right here are meditation balls. If you want to put it close to the microphone here, you can actually hear these little sounds that it makes. It's actually very soothing. I really like these. I can't say that I actually love them. They're not heirlooms, but let's just say for the sake of this story that they were.

They were these things that I just immensely cared about. I have two kids. Do I just give each of them one? Are they gonna fight over these because they knew how much they meant to me, even though they might not be super valuable from a monetary standpoint? What if there was a family Bible? What if there was a, a piece of jewelry?

What if there was some other artifact? What if it was a pet? And the ironic thing about this, and we've seen this, this is what, 23 years of doing some realm of estate planning for clients, is, believe it or not, it's not always the largest asset that people fight over, it's these little items, the heirlooms, the tchotchkes, the...

So, don't forget about what happens with those. Now, in our case, when we do estate planning, we actually have a personal property memorandum that we allow clients to change, they don't have to modify their estate plan every time they do one of these, that might be an option for you, and it gets incorporated by reference.

into the actual estate planning documents. So something for you to think about. And so that's number two. Number three that I want to cover this morning as we kind of fly through this whole thing is This is also that time of year where, you know, as we get closer and closer to holidays and as we get this fourth year, like people going back to school, um, a lot of the tax filing deadlines start coming up.

And the IRS recently reiterated some important tips for tax professionals, when it comes to protecting taxpayer information. So this is the tips, not necessarily for the consumers, but this is tips that they're giving other tax professionals. Tax attorneys, CPAs, enrolled agents, accountants, financial advisors.

So I'm putting this out there partly for my community of other advisors out there, but also for the consumers out there, for you, the actual taxpayers. You should know, and there's, there's seven of them. So I'm just going to run right through them. First is be careful with email attachments and web links.

So a lot of people will pose as legitimate businesses. A lot of these scammers, and they'll pose as, as the government. Including the IRS? They're not. So beware attachments. Don't send sensitive business information to your personal email address devices. Like don't send it to your laptop at home. Don't send it to your Gmail, your Yahoo.

Don't conduct business using including, including like online business banking on that personal computer to the extent possible. Because your business computers, your work computers may have a higher level of security. Don't share USB drives. That's number three. Number three of seven is don't share USB drives or external drives between the personal computer and the business computer.

Now we see less of this now because a lot of stuff is happening in the cloud. But you know, you get this USB drive, you stick it in one computer, you take it out, you put it in another computer and you basically potentially infected computers too. So to the extent possible, avoid using the USB drives and the external drives between personal computers.

And business computers or other devices. Downloads can be the devil. Like they can be absolutely evil. So don't allow download software from unknown web pages and use strong passwords. Duh. I think the number one password, is password. I don't know if that's still the case. I remember hearing that a little while ago.

So if that's your password. Don't tell me, but just change it. And, and don't give out usernames, or passwords to others. You know, I use a device called LastPass, sorry, a service called LastPass, which I'm a big fan of, but they're not infallible. They had a breach sometime back too. So you gotta be careful with that too.

Be careful with that. Change your default passwords. And change your passwords often. I know some of these things are sort of obvious, but if we don't have this conversation about it, sometimes, we don't think about it. Right. So there we go. We covered a finance tip. We covered an estate planning tip and we covered some tax information that was a guidance from the IRS.

I know it was more about digital security, but I felt like it was important. What topics do you want to hear about? What is it that you want to learn about and if there's anything that you have on mind direct message me That could be on Facebook Twitter LinkedIn And I think I'm missing one there YouTube, you know Obviously or it just email us and let us know what tips you have if you're watching this video and it's not September 12th, meaning you're watching it via an email that we sent out, or you're watching it at some point later.

It's that probably means you're not following us on social media, and that's totally fine. I mean, I think I'm a big fan of making sure that we disconnect from social media. But I will say that when there's breaking news, there's nothing better than getting it in real time, especially if there's something you could and should be doing about it, too.

So to that extent. If you want to, go ahead and follow us on Facebook, Twitter, LinkedIn, YouTube, and Facebook, any of those, forums that work for you. We try to make it education only, but every once in a while I will bring up the bears, my kids, and my workouts, or whatever the case might be.

Alright, go out there, live powerfully, I will see you back next time on Shah Plan-it. Be well everybody, bye now.