PiggyBankWritingPersonal Money Planning's

e-Newsletter for March 13, 2010

(to look at past issues, click here)
Also In This Issue
Chilean Earthquake Facts
Sunday Columns
Tax Articles
Facebook Postings
parting thoughts: Budget Alarms
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Chilean Earthquake Facts

 

When Chile was shaken by the recent quake, changes were seen around the world and with the world itself.

 
  • The city of Concepcion, near the epicenter, moved 10 feet to the west.
  • Santiago, the capital, moved almost a foot to the southwest.
  • And the movement of the ground was enough to shift the earth's axis causing each earth day to be 1.26 microseconds shorter

Disclosure

 

This newsletter is produced by Gary Silverman, dba Personal Money Planning, a registered investment advisor located in Wichita Falls, Texas.

Information in this newsletter is believed to provide accurate and authoritative information in regards to the subject matter covered. However, the accuracy, timeliness, or applicability of the information is not guaranteed and is provided with the understanding that we are not rendering legal, accounting, tax, or other professional advice or services.

This publication should not be construed by any consumer and/or prospective client as Personal Money Planning's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Nor should links provided to other sites be construed as the recommendation of the services or products mentioned on those sites. If such services are required, the help of a competent professional should be sought.

Remember that past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment, investment strategy, or product made reference to (directly or indirectly) on this Website will be profitable or equal to indicated performance levels. Different types of investment involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for your investment portfolio.

Historical performance results for investment indexes and categories generally do not reflect the deduction of transaction or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results.

A copy of Personal Money Planning's current written disclosure statement discussing Personal Money Planning's business operations, services, and fees (known as an ADV Part II) is available from Personal Money Planning upon written request (and can be downloaded from our web site).

Personal Money Planning does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Personal Money Planning's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

 
 Gary Silverman, CFP  

It's That Time Of Year Again

 

Rain and sun both came bringing with them green buds and flowers. Yes, spring is in the air. My fountain is up and running again with birds chirping merrily as they get a drink or splash around. My feeders are getting plenty of action from cardinals, jays, and finches. The squirrels love the seed and water as well.

 

Another thing that comes this time of year: notification that I've made it into yet another edition of Marquis Who's Who in the South and Southwest. No, I never pay anything to get into it-- though they'd love for me to buy a copy as a memento of my achievement. As I have the last ten years or so that I've been included, I've managed to escape the allure of buying a keepsake of my fame.

 

Of course, one other thing that comes with spring is daylight savings time. So if you are reading this on Saturday, don't forget to set your clocks ahead an hour. If it's already Sunday, it may be later than you think.

 
Gary
 
Gary Silverman, CFP
gary's Sunday newspaper column Sunday Newspaper Articles You May Have Missed
From the last few issues of the Wichita Falls Times Record News
 
Investing Part 9- Being Less Wrong (Part 2)  
Continuing the conversation on how to invest rationally instead of emotionally -- just don't over think it!
 
Investing Part  10-  Weather Analogy
Cloudy? Remember the silver lining. Sunny? Remember that ice storm...
Tax Articles Tax Information From The IRS
Ignorance is no excuse
 
Ten Facts about Mortgage Debt Forgiveness 

If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.

  1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
  2. The limit is $1 million for a married person filing a separate return.
  3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
  4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
  5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
  6. Proceeds of refinanced debt used for other purposes - for example, to pay off credit card debt - do not qualify for the exclusion.
  7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
  8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions - such as insolvency - may be applicable. IRS Form 982 provides more details about these provisions.
  9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
  10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. Taxpayers may obtain a copy of this publication and Form 982 either by downloading them from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

 
 
from gary's facebook page
Stuff you may have missed on Facebook
 
FacebookGary has a Facebook page where he regularly sends out links and notes during the week. This section repeats those that are still pertinent to our readers. Even if you are one of his Facebook "friends" you could have missed one or more of these, so you may want to peruse through them, just to make sure.
If you're not one of Gary's Facebook buddies, you can become one here: http://www.facebook.com/GaryWSilverman 
 
 

Politician sick of Washington

Evan Bayh sees what both sides of the aisle have in common-- dysfunction. It bothers him enough that he will not be seeking a third term in the Senate.
 

http://www.businessweek.com/magazine/content/10_09/b4168010724357.htm 


Focus on Unemployment

  One of the big stories with this recession is the high unemployment rate. How does it compare to other recessions? This report from the Federal Reserve Bank of Dallas shows how the rates are shaping up as the worst since the Great Depression-- though it's a long way from the depths of the 1930s. 
 
This article from the Financial Planning Association blog gives some tips about preparing for a layoff. Hopefully you don't need it, but being prepared can't hurt.    
 

Let's Lighten it up a little...

 An airport on a cliff? An airport that crosses a highway? An airport that is submerged twice a day? Sound crazy? Take a look at this Popular Mechanics article that highlights the most unique airports in the world. 
 

And now, some curling

 Just because the Olympics are over doesn't mean curling coverage will stop. At least not in MY newsletter. Here are some stories that cured the Curling Curious:

http://www.star-telegram.com/2010/02/24/1991260/curling-melts-the-heart-of-a-curmudgeon.html#tvg 
 
 
parting thoughts 
Budget Alarms 
 
 
Greece's $28 billion in government debt due in April and May and the related issue of foreign buyers shying away from their government securities (sending their deficits even higher) are haunting U.S. economists. They worry that at some point, the world's bond buyers will lose confidence in America ever getting its debt situation under control.  It also may be the underlying fear among people who attend the Tea Party rallies around the country. 
 
The real deficit problems in the U.S., however, are not found in government spending, per se, but the amount of money promised to future retirees in various forms.  Lately, attendees of various financial planning conferences have heard presentations by David Walker, former head of the U.S. Government Accounting Office, now president of the Peter G. Peterson Foundation.  Walker gives a terrific speech on how America is executing a reverse transfer of wealth from the younger generation and unborn to the Baby Boom generation.  He issues exactly the same warning that economists gave in Greece for twenty years before the meltdown: the longer we wait to solve the problems, the more likely we are to face an unsolvable crisis.
 
Perhaps the easiest example to understand is Social Security, which was enacted during the Great Depression, at a time when the average person's lifespan was 65.  65 also happened to be the normal retirement year, which meant that, unless they lived an unusually long time, most citizens collected no Social Security benefits at all.  Fast-forward to today, when the average U.S. life expectancy is 78.2 years, and it is not uncommon for people to live to age 100, and you can see why Social Security is in trouble.  The same is true of Medicaid. When it was enacted, people were expected to receive benefits for a year or two, not additional decades.  In all, according to "The Complete Idiot's Guide to Economics," 23% of the U.S. budget is spent on Social Security, 12% on Medicare, 7% on Medicaid. Recently, Congressman Randy Forbes estimated that mandatory entitlements now represent 62% of all federal spending.
 
Greece never went through anything like the current wave of Tea Parties and activism.  This may be a chance to channel all the anger over budget deficits into a real solution.  But, as we are learning from European countries that spent too much for too long, the solution is not anger or warnings, but concrete action that addresses the real sources of fiscal imbalance--and perhaps most importantly, a willingness to sacrifice our way back to a balanced budget.  Walker proposes means testing for Social Security recipients, arguing that it makes no sense to send government checks to billionaires.  He tells people what you already know-- what Greece and some of its neighbors are learning: it doesn't work any differently for governments than it does for people; the numbers are just a lot bigger.
  
That's all, for now.
 
Gary Silverman caricature
 
 
 
Gary
 
 
Gary Silverman, CFP
Personal Money Planning
 
 
 

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