www.chornyak.com                                                                   [email protected]

What's Happening Now

     
Why you need to visit Queensland, Australia in 18 staggering photos.  
 
 
Shopping on YouTube

Now you will be tempted to buy products advertised on YouTube, as Google announces new shopping feature.

  

 
Women going Wild
 
Why are more women going "Wild?" Would you choose a tent over a hotel room?

  

 
Impact of social media

Social media is having a major impact on Business-to-Business sales. 
Here's why.

 

     
Are you in the risk zone for high blood pressure? Here are the top ten foods and ingredients that you should minimize in your diet, or avoid completely.

 
 

Are you considering ways of cutting back on monthly expenses? Have you taken a close look at Internet access costs

 

      
Why the rice bowl is your easy, budget-friendly, healthy dinner.    
 
 

     
Did you ever wonder how we got to where we are? This animated map shows how humans migrated across the globe.
  
 
 


No girl will ever grow up to look like a Barbie doll, and some children might prefer a toy that looks a bit more like them.    

 


Coupons are supposed to save you money, but watch out - this "money-saving" strategy can backfire and cost you big.

  

 


Why time slows down when we're afraid, speeds up as we age, and gets warped on vacation. Neuroscientists say that that our experience of time is actively created by our own minds.

  

 
 

Outdoor kitchens are a popular trend among home buyers looking for spaces to gather around the grill and bring the magic of the kitchen into the backyard. Here are 10 outdoor kitchen designs that will make your summer more enjoyable. 

  

 


June is weddings month. Here are six creative and inexpensive wedding gift ideas.

  

 
June 2015

Joseph Chornyak, Sr.jpg
We're in the wedding season, so be sure to see our left-margin story on how to choose wedding gifts that are appropriate and creative, while not breaking the bank.

Other interesting short takes with links that we think you'll enjoy include: vacation tips, nutrition information, lifestyle news, social media, and technology.

A friend was burglarized recently. This is a shocking and uncomfortable situation. One of our feature articles deals with some ways in which you can adjust and bounce back relatively quickly. Please make sure to have a look at
this piece below.

I want to encourage all of our readers to feel free to
contact us with any questions on financial matters or comments on any of the articles in our e-newsletter at 614-888-2121 or 877-389-2121 toll free. You can always reach us by e-mail at [email protected].



We all wish you a wonderful summer.

Sincerely,

Joe



So you want to buy a vacation home...


This month Commonwealth Financial Network explores the risks and benefits of purchasing a residence for your vacation.

As the weather warms up, many people are thinking about summer plans-and possibly dreaming of buying a vacation home. Although it may sound appealing, purchasing a vacation property isn't something to be entered into lightly. If you're considering this major commitment, here are some important questions to ask yourself.

  

What's your budget?


In addition to the cost of the property itself, you need to consider other expenses such as:

  • Property taxes
  • Insurance
  • Repairs and maintenance, landscaping, and utilities

If you'd need to take out a second mortgage to finance the purchase, you'll have to decide if getting further into debt makes sense. Do your due diligence to see if you're a candidate for a second mortgage, including reviewing your current credit score and your debt-to-income ratio (your total monthly debt payments divided by your gross monthly income). Lenders generally look for a debt-to-income ratio below 36 percent.

  

How will you use the property? 


A key factor in the financial calculation is whether you'll use the home solely as your personal vacation residence, turn it into a rental property, or some combination of the two. Many people use rental income from a second home to offset the mortgage until the property is paid off.

  

Tax considerations. If you rent out the home for fewer than 15 nights per year, you can keep the income without reporting it to the IRS. If you rent it out more than that, you must report the rental income, but you also qualify to claim certain deductions.

  

How much you get to deduct depends on how you divide your personal time at the property and the rental time. If you spend 14 nights per year at the home, or more than 10 percent of the number of nights it is rented out (whichever is longer), the IRS considers the home a personal residence, and you can write off typical rental expenses against your rental income.

  

Who will manage the property?


If renting the vacation house is part of your plan, consider who will take responsibility for:

  • Overseeing the property (including handling cleaning, repairs, and the like)

  • Coordinating with renters
     
  • Assessing the local rental market to price the property accordingly

If you live a considerable distance away from the second home, hiring a local property manager is an expense that can't be overlooked.


What kind of insurance will you need?


Insurance is a necessary protection for any piece of property, and vacation homes can present additional risks. There are many options to choose from, so it's important to do your research. Some insurers may offer a second-home endorsement to your primary residence coverage instead of selling you another stand-alone policy, which may be a more affordable choice.

 

Click here to continue reading the article.


What are the odds the IRS will audit your tax return? And what should you do if it does?



Kiplinger tells us that this is this is the "quintessential good-news/bad-news story."

 

The good news 

 

If you're worried that the tax return you just sent to the IRS will be audited, breathe easy. John Koskinen, the head of the IRS, is telling anyone who will listen that budget cuts have led to a "deeply disturbing drop in our individual audit rates." Audit rates for individual tax returns fell last year to the lowest level in a decade ... and will fall even more this year.

 

The bad news 

 

If you're an honest taxpayer, you'll be disappointed to learn that the IRS says that every $1 it spends on audits and other "enforcement" activities brings in $4 to the U.S. Treasury. Falling audit rates mean dishonest taxpayers will be allowed to keep billions of dollars they ought to be paying in taxes.

 

But just what are the chances you'll be audited, that your Form 1040 or 1040-A or 1040-EZ will be plucked from the 140 million-plus returns for a going over?


Clearly, the odds are reassuring. The vast majority (more than 99%, in fact) of individual income tax returns skate safely past the IRS audit machine.

 

Better news 

 

The 1-in-116 chance of being called on the carpet vastly overstates the severity of the situation. Fully three-quarters of all audits are handled by mail, not by mano-a-mano combat with an IRS agent during an office examination or a field audit. And if your return doesn't include income from a business, rental real estate or a farm, or employee business expense write-offs or earned income credit, the basic 1-in-116 chance of being challenged dwindles to about 1-in-300.

 

Another piece of rarely reported good news 

 

Each year, tens of thousands of taxpayers walk out of an audit with a check from the government. In 2014, for example, almost 40,000 audits resulted in refunds totaling nearly $830 million. And 9% of field audits and 14% of correspondent audits end with the conclusion that everything is hunky-dory: no change in what the taxpayer owes Uncle Sam.

 

The 1-in-116 chance of being audited is the overall average from last year. As noted above, there's an even smaller chance this year. But in any year, your personal odds turn on the kind of return you file and the type of income you report.

  

Our calculator, based on official IRS data on returns audited in 2014, will give you a good idea of the odds that your personal Form 1040 (or 1040-A or 1040-EZ) will be selected for review-either by mail or in person. And, remember, even if it is, there's a decent chance you'll walk away unscathed or be one of the lucky ones whose audit results in a refund.

 
Read the rest of the article here.

SEE ALSO: 15 Reasons you might get audited


My home was burglarized: here's what you can learn 



A new source for our newsletter, NextAvenue.org, points out five lessons to help you take proper safety and insurance precautions.

 

As a victim of an Easter-weekend home burglary, robbing me of prized possessions and sentimental belongings worth $32,000, I've since found out what I should have done to protect myself and my belongings.

 

Below are the five lessons I've learned. I hope that after reading about my unfortunate experience, you'll take steps to avoid winding up in a similar situation.

 

Lesson No. 1: A home burglary is an invasion.

The creepiness of knowing total strangers broke into my sanctuary, pawing their way through my things and helping themselves to whatever they wanted is indescribable.

  

For at least a week, I dreaded returning home from work, not only because I felt unsafe, but also because I couldn't escape the reminders of what had transpired. Though the intruders left things surprisingly neat and I can take some solace in the fact that they wore gloves (no fingerprints), the noticeable absence of meaningful items is downright depressing.

 

As I've been led to understand, I should count myself "lucky" that there wasn't a big mess to clean up beyond the fingerprinting dust.

 

Lesson No. 2: No neighborhood is exempt.

I live in a town I've nicknamed "Norman Rockwellville" because it is quaint and safe. Residents take pride in not recalling where their house keys are and leave car keys in the ignition of unattended, unlocked vehicles.

 

Experienced thieves actually employ surveillance techniques for a period before taking a chance at gaining entry into a home.

 

As a former Boston resident, I haven't quite adopted the attitude of most of my neighbors; my house was locked the weekend I was robbed. But I had caught the complacency cold: my "hide-a-key" was not very cleverly hidden and likely found by the thieves as there was no apparent forced entry.

My house is a setback from the road and concealed from neighbors by large pines, making it an attractive target. Based on what was (and wasn't) taken, the police have theorized that the burglars entered my property on foot and probably under the cover of darkness.

 

This was also the only weekend there was not a vehicle in the driveway and our cats were with us, so no one was in and out of the house throughout the holiday. We had timers on lights and radios, but the lack of vehicular traffic and the stationary window blinds provided enough evidence that we'd left for a few days. I probably would have come home to a broken window if my concealment skills were better.

  

I am told that the Thanksgiving and Easter holiday weekends are very popular for this type of activity because so many people travel, leaving their homes unattended for a good stretch of time. Experienced thieves actually employ surveillance techniques for a period before taking a chance at gaining entry into a home.

 

Lesson No. 3: Our memory skills decline amid a crisis.

Since I was in a shocked and disgusted state after the burglary, trying to determine what was missing was nearly impossible initially.

 

There were the obvious items: an expensive watch gifted to me upon the completion of my master's degree along with most of my jewelry and silver service for 12 given by loving friends and family when I married. But it took me days to compile a "complete" list for the police and insurance company.

 

Other burglary victims have told me I will be looking for something years from now and only then realize it must have been among the items stolen.  

 

Continue reading this article by clicking here .

 


Market Update
A weak end to a strong month

 

U.S. financial markets were strong in May, despite weak economic reports. After rising between 2 percent and 3 percent at mid-month, stocks dropped somewhat at month-end but still managed to register positive returns. All major U.S. equity markets posted gains, with the Dow Jones Industrial Average up 1.35 percent, the S&P 500 Index up 1.29 percent, and the Nasdaq up an even stronger 2.60 percent.

 

The good performance in May was driven largely by unexpectedly positive corporate earnings news. Although earnings growth of 0.7 percent for the first quarter is nothing to get too excited about, expectations had been for a decline of almost 5 percent. But earnings gained even though revenues declined, down 2.9 percent.

 

Despite the less-than-stellar overall earning results, however, most companies did well. Much of the decline in estimated earnings had come from energy companies, buffeted by the downturn in oil prices. Per FactSet, if we exclude the energy sector, company earnings growth was actually 8.5 percent instead of 0.7 percent. As more companies reported during May, the better-than-expected results became increasingly clear and investors moved into the market.

 

Technical factors remained supportive for the U.S. markets. All three major indices finished the month well above their 200-day moving averages, as their weak closes appeared to be due to concerns about Greece and the European Union (EU) rather than U.S. factors. With more required Greek debt payments coming in June, the ability of Greece to pay is doubtful and the potential for risk is very much alive.

 

Developed international markets performed very similarly to the Dow and S&P 500 for most of May but suffered more severely at month-end. Even though the MSCI EAFE Index was up almost 3 percent in mid-May, it finished the month with a 0.51-percent percent loss. Just as with the U.S. markets, the cause for the decline appeared to be worries around a Greek default. Technical factors remained supportive, however, with the index closing well above its 200-day moving average, suggesting that its fundamentals are still strong. This is also supported by slow improvements in the European economies.

 

Emerging markets, as reflected in the MSCI Emerging Markets Index, were hit even harder than developed markets, moving from a gain of 1 percent mid-month to a loss of 4.16 percent at month-end. Here,

however, the technical picture is weaker, as the index approaches a worrisome level. Continued concerns about an expensive dollar and its effect on emerging markets, combined with worries about Greece, drove markets down.

Fixed income markets also had a weak May, with the Barclays Capital U.S. Aggregate Bond Index reporting a loss of 0.24 percent. U.S. Treasury rates declined slightly, but underperformance in spread-based and credit products hurt market performance as a whole. Weakness in the fixed income universe was across the board, with all indices down for the month.


Another first-quarter "snowdown" for U.S. economy

The gross domestic product report released at month-end, showing that the U.S. economy had actually shrunk 0.7 percent in the first quarter of 2015 instead of growing slightly, was consistent with last year's experience. In addition to unseasonable weather throughout the country again-with the Northeast, for example, enduring the worst winter ever recorded-a strike at West Coast ports hit supply chains across the nation. Although these were both considered unusual and temporary factors, their damage was nonetheless significant.


 

Despite the short-term nature of the disruptions, a spring recovery is proving slower to appear this year than last. Economic reports have been lukewarm, with consumer spending in particular not living up to expectations. In addition, estimates for second-quarter growth, though still positive, are expected to be modest.

 

The weak indicators notwithstanding, job growth remains strong. A disappointing March jobs report was followed by a gain of 223,000 jobs in April, with the workforce participation rate rising and the unemployment rate down. At 5.4 percent, the unemployment rate has declined to a level consistent with what the Federal Reserve (Fed) has historically considered full employment. Initial unemployment claims, another good sign of the strength of the jobs market, are close to multiyear lows.

 

Even though job growth has stayed strong, consumer confidence has been mixed, with some surveys showing declines and others gains. Regardless of the survey, however, the significant result has been that consumer spending growth remains slow. At the same time, personal income growth has been strong, indicating that the financial situation of the average consumer is improving despite the short-term caution in spending.

Given the mix of positive fundamentals and consumer caution, slow growth should continue in the second quarter. As the financial positions of consumers improve, however, faster sustainable growth becomes increasingly likely and may show up in the second half of the year.


 

Central banks and interest rates

No news was good news from the Fed in May. According to the minutes of their last meeting, members of the Federal Open Market Committee generally considered the slow first quarter to be due to temporary factors, signaling that continued growth is likely. At the same time, however, any interest rate increases are now expected to be in the second half of the year, at the earliest.

 

The combination of Fed confidence in the economy and continued low rates through at least September suggests that interest rates will remain supportive of the economy and stock market for the next couple of months. Also helping will be continued monetary stimulus by the central banks of both Europe and Japan, even as the Fed looks to increase rates.

 

International risk remains

Although conditions in the U.S. are improving, at the international level risks remain. Europe is the focus for the moment, with June deadlines fast approaching for Greece to repay substantial sums to the International Monetary Fund and the European Central Bank-repayments that it cannot make, as previously noted. Although the most probable outcome is a new deal-with a commitment for the EU to continue its support of the Greek government-time is running out and tempers are running high. Nevertheless, even if Greece were to default, systemic risk is much lower now than in the past, though uncertainty is still rattling markets.


 

Two longer-term risks also resurfaced in May. The first is that the British government is now committed to a referendum on membership in the EU. The success of the anti-EU parties in Britain in demanding such a referendum should encourage this possibility in other countries. In addition, although the slow European recovery continues, unemployment is at depression levels in many EU countries. Moreover, election results throughout the EU suggest that it is not just the Greeks who are running out of patience with current austerity policies. Expect to see considerably more uncertainty around Europe through the rest of 2015.

 

The second major risk is China. Growth continues to disappoint, and its government continues to slowly increase stimulus, despite an earlier attempt to eliminate it. Perhaps in response to domestic concerns, China has become much more aggressive with respect to other countries, expanding its installations in what the U.S., for one, considers international waters in the South China Sea. These actions, which have led the U.S. to send air and naval forces into the contested areas, are also leading Japan to consider a more aggressive defensive stance and will very likely continue to be a disruptive influence in Asia and around the world.

 

Slow growth continues, on a sustainable basis

With the U.S. economy on the mend and the bulk of the financial risk coming from international issues, it seems as if we are moving back to normal. We are not quite there yet, but we are indeed getting closer.

 

Normal does not mean, however, that risks have gone away. As mentioned previously, Greece and China represent immediate risks, and although the U.S. recovery is expected to continue, that is neither guaranteed nor something that will go on forever. Cautious optimism remains the appropriate outlook for investors. As always, a long-term perspective and diversified portfolio are the best ways to meet your goals.


 

Authored by Brad McMillan, senior vice president, chief investment officer at Commonwealth Financial Network. 

 

All information according to Bloomberg, unless stated otherwise.