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Wealthy and Wise!

The Tax Pro Family Letter Volume IV, Issue 1

Your Monthly Dose of Insider Tips On Wealthy and Wise Living For The End of Summer

September 2010

Inside The Mind of Your Tax Professional...

I Get Emails about Emails By Terry Smith You’ve been sending me emails about the tax changes and how they are going to financially strap you. The big issue is that these emails contain very little fact, but a LOT of scare language. Some of the issues floating around are: •

© 2010 Used with paid permission from The New Yorker Collection . All Rights Reserved.

Inside… • Personal Development Corner: Managing Your Career Profitably • Up-To-Date Tips For Job-Hunting In Today’s Market • How To Avoid Credit Confusion • And More!

“Back To School” Refer ral Contest! Can You Believe It? School is right around the corner (the summer sure went fast!), and kids are getting antsy. Not to add anything to your plate, but…

Want $100.00? Whichever one of our clients sends us the most number of referrals by September 15th, we’ll give you a crisp $100 bill to thank you!

No Annoying Tax Professional Lingo … Just Straight, Easy-To-Understand And Follow Expert Advice!

1% surcharge on all credit cards transactions will go into effect January 2011. The email states this is a “back door” effort to raise taxes, as you ALL know that 1% is just the starting point. FACTS: No such law exists. The 1 Senator who has proposed this can’t get any co-sponsors, so it will die in committee. Your W-2 taxable income will increase by 15-20,000 in 2011 due to health benefits and of course “that will place most of us in a higher tax bracket”. This email is worded that even retires are calling me. FACT: Health Care benefits will be REPORTED on your W-2 in 2011 as information. None of it will be taxable until 2018 and that will be an Excise Tax, not an Income tax. That means the Health Provider will pay the tax, not you.

Please keep forwarding these emails to me, they ARE meant to scare you, but you can go to WWW.SNOPES.COM and check the facts. Another email that keeps floating around is that the Post Office is going to charge 5 cents per email to help balance their budget. That email started in 1999 and actually came out of Canada. The US email just changed it to the US Postal Service and used all the Canadian numbers and didn’t even convert Canadian currency to US Dollars. Let me quote The Kiplinger Tax Letter I subscribe to: “Are tax rates definitely rising in 2011? NO. President Obama’s plan to end the Bush tax cuts for higher income filers is not a slam dunk to pass. Recently, several Democrats have said they are leery of raising income tax rates while the economy is weak. The discord in the Democratic ranks means action on the tax cut extensions will be delayed…possibly until after the elections. There’s a fair chance lawmakers will punt and continue tax cuts for everyone in 2011…”.

Many Thanks ... We’re honored by our clients that graciously refer their friends, neighbors and family our way so they too can preserve wealth. We’re thankful to all, but especially:

Rhonda Filbrandt & Stu Weingarden

We Love Our Clients and Friends...So This $9.95 Newsletter is FREE! Tax Pro | 3511 Camino Del Rio So #102 | San Diego Ca 92108 | P 619 283-8055 | F 619 283-8223 | www.SDTAXPRO.com


Wealthy and Wise!

September 2010

Personal Development Corner : Manage Your Career Like You Manage Your Money (or Better!) (by Terry Smith)

Your career is your biggest financial asset. Most people In doing this, they treat their career as their own asset, not that determine the value of their work by the dollar amount on their of their employer. By taking ownership of their employment, they accept the fact that they are captains of their own fate. paycheck. However, judging your career based solely on your take-home pay is a short sighted evaluation. Learning to manage Those who follow this strategy often end up as top executives of the full value of your career will translate into a higher quality of large companies or start a business of their own. life and a higher net worth. A second important consideration is the social Two aspects of a career should be evaluated. One is the obvious connections you will make on the job. Careers are as much quantitative measurement of salary and employee benefits. The about who you know as they are about what you know. No second is a set of qualitative measurements which are even more successful person in business functions alone. It is important to important. As you will see, focusing on the qualitative measures respect the value of building and maintaining relationships with is the surest way to maximize your bottom line in the long run. other talented professionals as part of your career. The quantitative measurements are the easiest to assess but still You don't need to be part of the "good ol' boys" club to benefit from a network. Simply knowing who can get a job done involve much more than just comparing the base salaries of properly is a valuable commodity that will pay you back many different career options. times over. Every mom with a list of reliable babysitters or A career's financial value can be determined by computing the competent electricians knows the value of such a network. Just net present value of wages and benefits minus the financial cost as you would evaluate how much money the company is going to of the career, which will be explained in a moment. Don't put in your 401k, you should try to determine how much social overlook the value of your employee benefits. Employer capital the company will help you build. matching contributions made to a 401k can be considered as valuable as a salary. Other benefits should be evaluated based on Finally, make sure that your job is in harmony with the their value to you, not simply their cost to your employer. rest of your life and goals. It does not make any sense to spend the best decades of your life chasing after money so that If you are married with children, and both you and your spouse you can finally do what you really enjoy in retirement. The work, then be sure to account for the added cost of having both strange truth is that people who do what they love often make parents working. After subtracting child care, work clothes, more money that those who are simply after a big paycheck. And transportation, prepared foods, and taxes, many two-career if you really love what you do, you'll find you'll never have to families would do just as well without the second career. "work" a day in your life. Reducing household expenses and starting a part-time home business may be a better way to increase the family's bottom Fitting work into your life often begins by analyzing family line. constraints. Raising your children isn't worth missing. No matter how much time you spend with them, you blink twice and they The qualitative measurements of a career, although they are are grown. If you are lucky, you will get another chance with more difficult to assess, are even more important in the your grandchildren, but it's better to not miss a moment with evaluation. your children the first time around. A job should be evaluated in relation to the new skills you learn and master as part of your employment. One Learning to manage your career is every bit as important as job may pay you more because you are already a master of those learning to manage your money. Doing so will mean you will get skills, but a lesser-paying job may be better for your long-term to do what you love. And in the long run that should pay big dividends. career because of the skills you will gain. It is your future skill set that will determine your future compensation. With the increase of project-based employment, longevity and seniority no longer have as much capital. Those who are most successful at managing their careers are able to work at different jobs to gain the skills needed for each progressive step of their career.

Wealthy and Wise!

Considering starting a business? It could be the wisest course you could take in this environment...but you MUST consult with professionals. Give us a call, and let us help you wade through your decision...we can steer you in the right direction.

September 2010


Wealthy and Wise!

What’s Working Now To Find That New Job What’s the best way to land a new job? High rates of unemployment make that an urgent question for many people. A study of more than 700 job seekers who found employment between July 2009 and January 2010, conducted by the IMPACT Group, identified these winning tactics: • Refer rals from inside the hiring organization were the most successful strategy, cited by 18 percent of job seekers. Social networks like LinkedIn, Facebook, and Twitter helped candidates identify opportunities for referral. Referrals from outside the organization were successful for 9 percent of job hunters. • Posting résumés online was successful for 8 percent of job seekers, the same as in 2003. • Networking was most effective for older workers (50 and up), with 46 percent reporting that it led to employment. For candidates earning more than $100,000, networking was successful for 50 percent.

Thoughts For September The beaten path is the safest, but the traffic’s terrible. —Jeff Taylor

A winner is one who accepts his failures and mistakes, picks up the pieces, and continues striving to reach his goals. —Dexter Yager

An All-Too-Common Credit P roblem Having a familiar name may create problems with your credit rating. With all the John and Jane Smiths in the world, a simple mix-up can get an honest John Smith mistaken for a fiscally irresponsible one. Take these precautions if you have a name that’s common: • Always include your full first name and middle initial on credit applications. The more complete your name, the better your chances that it won’t get mixed up with another person with a similar name. Be sure to use the Jr. or Sr. designation if you have one. • Be consistent. All your credit cards should have the same exact name. If one has John Davis, another has John J. Davis, and yet another Jack Davis, mistakes can crop up more easily. • Write clearly on all documents. Be sure your name is completely legible to anyone who might read an application. If you don’t, your “J” initial can appear as an “I” to an application processor. • Check your credit report regularly. You never know if your Social Security card number got copied incorrectly somewhere along the line, or if the credit report agencies have mistakenly added information from someone of a similar name. • Correct errors right away. And be persistent. Contact creditors directly. The last thing you want to do is argue with a collection agency over a bill that isn’t yours.

Wealthy and Wise!

September 2010

Great Clubs or Great Swing? Whether you golf or not I would like you to consider an interesting question related to retirement planning and wealth accumulation. If you could have a world class professional golfers clubs or their world class swing , which would help your score the most? Most people understand the swing would make the most dramatic improvement for the vast majority. However, club manufactures and pro shops would have most people believing that if they just buy the latest and the greatest, new and improved clubs, their games would magically improve overnight. Most know this is simply not the case. How is it that a top tier professional golfer with a second hand set of bargain priced clubs could thoroughly beat the average golfer using the finest clubs made? The answer lies in the swing and not the clubs. Too many times when it comes to finances and wealth accumulation the emphasis is place on the “clubs “ (specific products) rather than the “swing” (strategy). Even the best financial products used incorrectly will not perform well and a well rounded strategy can work well even in challenging times. The real key is not in the brand of products but the overall approach. What is your strategy for retirement? Is it the best strategy? Does it take into account future taxes, mortgage payments, savings yields and quality of life? Is it a strategy designed to last or could it run out of money 10, 15, or 20 years into retirement? All of these items require close attention and too few people have a comprehensive strategy to make the most of retirement. If you would like to re-evaluate your current approach or if you have no comprehensive plan but would like to move in the right direction then now is the time. Please call or email and we can discuss how to best improve your swing and get the most out of your retirement. Greg Ludwick 619-709-1878 gsludwick@gmail.com

www.advance.becomewealthy.info !

We all need Referrals We all have odd jobs “we just don’t do” or need a professional to “Get R Done”, you have referred me to your friends, co-workers and family so I want to spread the word. Each month I will list a few of my business clients for your access. If you wish to write an article about your service, contact the office. Painting: Tom Fiss 858 277-3177 Pest Control: Mike Lawson 888 454-4315 Phone Repair: Mike the Phone Man 619 750-9511 Messenger Service: Brian Rickard 619 548-0272 Retirement & Financial Planning: Greg Ludwick 619 709-1878 Loan Consultant: Brad Heise 858 334-8588 September 2010


Wealthy and Wise! The Family Letter of Tax Pro 3511 Camino Del Rio So #102 San Diego Ca 92108 (619) 283-8055 Phone (619) 283-8223 Fax www.SDTAXPRO.com RETURN SERVICE REQUESTED

Inside September’s Issue…

• My Personal Note: The Dirty Little Secret Of The Accounting Industry • Personal Development Corner: Wisely Managing Your Career • Up-To-Date Tips For Job-Hunting In Today’s Market • How To Avoid Credit Confusion • And More!

We love to reward our clients for their generous referrals,  so please make a copy and pass it to your next­door neighbor!

You Really CAN Buy Happiness It turns out that the conventional wisdom is wrong: It is possible to buy happiness—when you spend your money on others. Researchers at the University of British Columbia and Harvard University have found that people who buy gifts for others and make charitable donations report being happier than people who spend their money primarily on themselves. The scientists studied 630 Americans and asked them to rate their general happiness, their annual income, and their monthly spending—including bills, gifts for themselves, gifts for others, and charitable contributions. Researchers also measured the rates of happiness for people who received profit-sharing bonuses from their employers of $3,000–$8,000. Again, the researchers found that it was not how much money the participants received that predicted happiness levels, but rather how the recipients spent the money. Those who donated more of their bonuses to charity or used it for gifts for others rated themselves as happier than those who did not. In a third look at this phenomenon, the researchers gave participants a $5 or a $20 bill and asked them to spend it before 5 p.m. on the same day. Half were given the instruction to spend the money on themselves, half to spend it on others. The half who spent their money on others reported feeling better at the end of the day than those who didn’t. The researchers say that even spending a small amount on someone during the day can significantly

FREE Tax Planning Session For I ndividua ls and Businesses September Special: First FIVE Only Now is the time to begin reviewing your particular situation to ensure that you are WELL-PREPARED for Tax Season. By meeting now, you could save thousands of dollars off your tax bill. Normally this is a quite expensive service. But because we want to get you the most money back, we are offering it to a limited number of clients and friends during the “drowsy” month of September. Get moving … Call or email our office (or bring in this newsletter directly)

Tax Preparer San Diego Released Newsletter Wealthy & Wise Vol 4  

The San Diego Tax Preparer released the newsletter available at $9.95, but it is absolutely free for clients and friends. Stay up-to-date wi...