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Monthly Archives: April 2009
What Does A Trillion Look Like?
Hi All,
Just saw this great graphic from CNBC.com. Its an attempt to visualize some of the huge numbers that have been bandied about in the press. There are some wonderful comparisons involving skyscrapers, heavenly bodies and football fields. If you have some spare time, give it a once over.
Here.
-James
Monopoly 2009
Saw this on Craigslist, thought it was moderately clever statement on current events.
File To Avoid IRS Fees and Penalties
Hi All,
Today is April 11th. Four days until your Federal and state income taxes are due!
If you are thinking about getting your taxes in late, or are procrastinating, please don’t! The IRS has a number of fees and penalties it assess on laggards. It is much better for your credit to file now, pay them something, and then amend your return later.
In fact, the IRS will charge you three ways if you don’t file.
1) Failure to File Penalty
2) Failure to Pay Penalty
3) Interest
In a nutshell, if you don’t file, the IRS will assess up to 25% of your tax due as a failure to file penalty. For each month you don’t file, you’ll get charged a 5% penalty – up to the 25% maximum. This would be a major hit to the wealth you worked so hard to create – don’t let it happen.
If you file, but don’t pay your tax, you’ll get hit with a .5% fee for each month you don’t pay. No maximum limit.
Regarding interest. If you underpay, the IRS will assess an interest penalty at an annualized rate of 4.5%.
Bottom line: File and pay your taxes, if not you’ll get hit with a healthy set of fees and penalties.
More info is available at the TaxAlamanac.com
Thanks,
James
Brokerage Vs. Bank MMAs
Okay, if you have money available in your brokerage account, you might be wondering which is better, a money market fund or a money market deposit account.
If this is the case, the answer is you should probably get the money market deposit account.
Money market brokerage funds currently have a very low yield, between .22 and .30 on annualized 30 day terms. On the other hand, commercial banks are offering .90 to 2.2 percent for comparable products. In addition, commercial banks have FDIC insurance. So, the combination of a higher yield and FDIC protection gives money market deposit accounts an edge. Even a slightly higher return should help you build more wealth long-term.
Best,
James
"I Pay My Taxes" by the Tax Boyz
Hi All,
You’re probably getting inundated with tax related posts this week, but here is an amusing homemade rap video by the Tax Boyz. Its good for a chuckle – but its not quite safe for work and you might want to keep your kids away due to some of its mild adult themes.
Hat Tip to Jay at Budgets are Sexy.
Lobbying Yields $22,000
A new article from the Kansas City Star has come out. Evidently corporate lobbying has a huge return on investment realized in the form of corporate tax savings. It’s unfortunate that govenrment policies have such an effect on corporate wealth. From the article:
Three professors at the University of Kansas say dozens of America’s largest companies got that sweet deal four years ago — not by hiring workers or purchasing new equipment, but by investing in Washington lobbyists.
Those lobbyists, the three said, helped write a federal tax break that eventually put roughly $100 billion in tax savings in the pockets of the firms and their shareholders, at a cost to the companies of just pennies on the dollar. KCS.
Tip of The Day: Negotiate
Hello All,
Todays personal finance tip of the day is: negotiate.
The economy is a rough patch. Consumer spending is down. The good news is this means that it’s a lot easier to get a discount. Retailers, landlords, private schools, mortgage lenders…a lot of people are willing to haggle to close a deal. The more money you can save, the more you have to build your wealth.
For example, SmartMoney.com is reporting that the BestBuy corporation’s managers are empowered to “react to local market needs” and Forbes has recently run a story indicating that its possible to get healthy discounts on high end luxury goods like Gucci watches and handbags.
To make a long story short, the timing is ripe to negotiate good deals.
For more on this, here are some tips on how to successfully ask for a discount.
Best,
James
Larry Summers Protested
Hi All,
This video has been making the rounds on the internet.
It’s a video of Obama White House adviser Larry Summers being subjected to a protest while he is giving a live audience interview. Lest one think the protest is in bad taste, it’s important to keep in mind that Summers is to some degree, emblematic of problems in the banking sector.
Summers is a Harvard trained business economist who’s been a long time Washington insider. The guy worked for Reagan, Clinton, and now Obama. More recently however, he’s been taking a LOT of money from hedge funds. For example, he earned more than $5 million from hedge fund D.E. Shaw and $2.7 million in speaking fees from several corporations (NYTimes) and accepted rides on Citigroup jets. He later argued to the Obama administration against caps on executive pay for firms receiving bailout funds.
In short, it’s starting to look like Summers is losing credibility. The protest does raise some good points.
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