Year-End Tax Tips That Will Trim Your Tax Bill

by | Dec 12, 2018 | Learning

  • December 31 is an essential deadline for taxpayers who want to lower their tax bill and build up their savings.
  • There is no better time than now to start to make gifts to loved ones, maximize your 401K contributions, save for college or donate your required minimum distribution

The new tax law has put a whole new spin on year-end tax planning, though it hasn’t eliminated the need to do it altogether. t has been a busy year for taxpayers and accountants, as the end of 2018 signals the first year under the Tax Cuts and Jobs Act.

In all, the tax overhaul roughly doubled the standard deduction to $12,000 for single filers ($24,000 for married-filing-jointly), eliminated personal exemptions and limited itemized deductions.

Despite the changes to the tax law, there are still opportunities to shore up your 2018 finances. Here's what to consider.

1) Maximize retirement savings
Reduce your taxable income dollar-for-dollar by contributing as much as you can to your 401K or employer’s retirement plan by Dec. 31.

If you are 18 or older, you can save up to $18,500 to your 401(k), and if you are over 50 you can kick in an extra $6,000. With IRAs you can contribute $5,500, and if you are over 50, an additional $1,000. (You have until the April deadline to make those IRA contributions.)

Additionally, if you are self-employed and contribute to SEP IRAs, you can deduct up to 25 percent of compensation or $55,000 for 2018.

Make sure you’ve taken advantage of your employer’s match to your 401K plan. Better yet, make sure you’ve maxed out how much you can contribute. Leaving this benefit underutilized is the same as leaving money on the table.

(If you contribute to a Roth 401K or Roth IRA, you won’t get a tax break, but your money can grow tax-free and generally be withdrawn tax-free in retirement.)

2) Make an extra mortgage payment
Although the number of homeowners who can benefit from the mortgage tax break fell significantly under the new tax law, about 13.8 million taxpayers will still be able to claim the mortgage-interest deduction in 2018.

If you own a home and get a mortgage interest deduction, make an extra mortgage payment on Dec. 31 to get that additional deduction on this year’s taxes.

For new homeowners (or those who bought a home after Dec. 15, 2017) who will still be able to take advantage of the tax break, the interest they can write off is limited to $750,000 in loans, down from the previous $1 million.

3) Unload losers
After this week’s market downturn, chances are you have some investments that lost value this year.

You can use those losses to zero out capital gains, and then deduct up to $3,000 a year against ordinary income. Losses in excess of that can be carried forward to future tax years until the balance is used up.

For example, if you have $10,000 of losses and $5,000 of gains, you have an overall loss of $5,000 — and up to $3,000 of that loss can be used to offset your ordinary income. The additional $2,000 in losses can be shifted to next year’s return.

For just that reason, tax-loss harvesting is a popular tool for maximizing after-tax returns, most commonly in the fourth quarter of the year, when investors aim to lower their tax liability. (But this strategy only works on taxable accounts, not your 401(k) or IRA.)

Be aware that if you sell a security at a loss and buy the same or similar security within 30 days before or after the sale, the IRS won't allow you to claim the loss on your tax return.  This is known as a wash sale.

4) Deduct health-care expenses
If your health-care costs exceed 7.5 percent of your adjusted gross income in 2018, you may be able to deduct those expenses.

Tally up how much you spent on health insurance, Medicare premiums, long-term health insurance premiums, nursing home costs, orthodontics and other out-of-pocket expenses to see if the total exceeds the medical expense threshold.

You can deduct everything you spend over that amount (but you can’t double dip and count expenses paid for with tax-advantaged flexible spending or health savings account dollars).

You also can’t take this tax break if you opt for the standard deduction – it only applies if you itemize all of your deductions.

5) Bundle charitable donations
If you want to lower your tax bill by making donations to charity, you have until Dec. 31 to do so.

Even though the deduction for donations is unchanged, you still need to itemize to claim it, and that’s a much higher bar this year.

One way to surpass the new, higher standard deduction is to save money over time and donate every two or three years instead of every year — a strategy called “bunching.”

For example, instead of giving $5,000 to charity annually, accelerate the gift by giving $10,000 every two years. This way, you may get your itemized deductions over the limit one year and take the standard deduction the next.

Maximize your contribution — and the amount you can deduct if you're able to itemize in 2018 — by stuffing multiple years' worth of donations into one year.  This move is known as "bunching" your charitable contributions.

6) Defer your bonus
If you get a year-end bonus at work, it could bump you up to another tax bracket and increase the taxes you owe.

See if your employer will pay you your bonus in January. You will still receive it close to year-end, but you won’t have to pay taxes on it when you file your tax return.

You don’t want to defer your bonus for too long, but a few weeks might make sense.

7) Donate Your RMD to Charity
If you're 70½ or older, you have until Dec. 31 to take your Required Minimum Distribution from your IRAs and retirement plans.

Failure to do so could mean you're on the hook for a 50 percent penalty on the amount you should have taken.

If you're lucky enough that you won't need the RMD, consider donating the money directly from your retirement account to your qualifying charity of choice. This is known as a qualified charitable distribution.

You don't need to itemize deductions on your tax return in order to do this.

The bonus: Your RMDs are normally taxable distributions, but qualified charitable distributions are not, according to the IRS.

8) Give to Heirs
You have until Dec. 31 to make gifts to your loved ones for the tax year. You can give up to $15,000 per recipient to an unlimited number of beneficiaries without paying a gift tax. This is known as the annual gift exclusion.

If you'd like to share even more wealth with your grandkids without being subject to gift taxes, consider paying for their tuition or medical expenses.

All of these payments must be made directly to the provider of these services.

9) Talk to Your Tax Preparer
The single best move anyone can take before the end of the year to cut their tax bill is to consult a licensed tax professional and seek advice for their specific situation. Waiting until January will be too late. Each taxpayer's situation and each tax year is unique. This year, there are new laws and new forms that will affect everyone. Waiting until the return is calculated is likely to produce a few surprises. The new tax law also changed the way employers withhold taxes, and the IRS is concerned that many taxpayers will be surprised by their refunds or balance due because of the new withholding rules.

The Three Key Challenges of Retirement

by | Dec 12, 2018 | Learning

The Three Key Challenges of Retirement

Planning for your retirement can be challenging. It can be scary, and it can be frustrating. I have seen many clients who felt their plan was a disaster waiting to happen. As an advisor, I am here to say that you can handle it. Planning for retirement doesn’t have to be difficult—in fact, it can be fun! But in order to achieve the retirement of your dreams, you must prepare for three major challenges that every retiree is likely to face.

Challenge #1: Ensuring a Long Retirement Savings Lifespan

One of the greatest fears people have in retirement is that they will outlive their savings. Fortunately, by taking steps now, you can ensure this doesn’t happen to you.

The first step is to budget your expected expenses based on your normal day-to-day costs and any activities you want to pursue during retirement. Things like travel, hobbies, remodeling your home, etc.
Next, take a hard look at your current savings and level of income. How much are you setting aside for retirement? How much more do you need to be saving or investing in order to meet your expected budget? This is where working with a financial advisor can come in handy, because an advisor can help you determine
• how much your savings need to grow to meet your needs;
• how long you can expect your savings to last, based on when you plan on retiring, your general health, and activities;
• how to maximize your income opportunities after retirement; and
• what the ideal rate of withdrawal will be from any retirement accounts you have so you don’t run out of savings.

Once you have a plan for your retirement savings, you can move onto the next challenge:

Challenge #2: Planning for Health Care Expenses

As we age, health care becomes a bigger concern, and a more difficult one to deal with. It can be hard to find a plan that provides the coverage you need at a price you can afford. All the politics and legislation affecting the healthcare industry don’t make it easier, either.
The answer, again, is to plan ahead.

Here are a few things you can do:
1. Learn about your various Medicare options. If you are one of the lucky few who will have employer-provided health care coverage even after retirement, congratulations. But if not, start familiarizing yourself with the intricacies of Medicare now. The Federal government’s health insurance program for seniors is often referred to as a single plan, but in reality, it’s many types of plans rolled into one. From the basic level of coverage (Part A), to “Medicare medical insurance” (Part B) which covers outpatient hospital care, physical therapy, and home health care, to the more elaborate “Medicare Advantage” plans, most retirees are confronted with too many options, some of which are more appropriate than others. Choosing the best type of coverage for you will be crucial when it comes to paying for your medical expenses.
2. Look at Medigap. Medigap supplemental insurance is sold by private insurance companies, and is designed to help pay those costs not covered by Medicare. Medigap isn’t free, and certain criteria must be met before you can purchase it, but it’s definitely a route to consider.
3. Consider long-term care insurance. Important disclaimer: not everyone will need long-term care or assisted living in their lives. That said, many people do, and long-term care (LTC) insurance is one of the best ways to pay for it. It can be beneficial to purchase LTC insurance sooner rather than later, as premiums often grow higher as you grow older. However, LTC is expensive in and of itself, so give the subject a lot of careful consideration before making a decision. As you can see, paying for health care expenses is a huge part of retirement. As you create your retirement plan, make sure you give the subject all the attention it deserves.

Challenge #3: Planning for Unexpected Expenses

While health concerns are a major source of unexpected costs, there are many other types of expenses that could impact your retirement. For instance
• Car repairs. You know it will happen one day: the strange clunk-clunk sound you start hearing from your engine ends up being a problem that will cost hundreds, maybe even thousands, to fix. And if it happens more than once …
• Your bills keep going up. What goes up does not necessarily go down. Anyone who has ever paid for an internet connection or satellite TV knows that prices tend to rise over the years. Your basic utilities are prone to price fluctuation as well. A really cold winter means your gas bill will go up. If you have children in the house who keep leaving the lights on, your electricity bill will go up. You get the picture
• Household repairs. When the toilet clogs or the faucet leaks; when a window breaks or the roof starts to degrade; when wood-boring beetles infest the tree in the backyard; unless you really like to DIY, that means paying for a professional … who usually aren’t cheap.

The point of all this is to show that unexpected expenses can come at any time, in many different forms. What’s more, they can really pile up.
So, what’s the solution? Start a rainy-day fund! When most people save, they tend to just throw everything into one savings account and withdraw money whenever they either need or want to. Instead, I suggest creating a separate type of savings account: one that can only be touched whenever the unexpected happens. Every month, devote a set percentage of your income to the rainy-day fund in addition to your regular savings. Then, when your car inevitably breaks down, you won’t have to worry about it interfering with that vacation you’ve been dreaming about for years, because you’ve already set aside the funds to deal with it.

The key to starting a rainy-day fund is to do it now. If you wait until after retirement, you’ll probably have waited too long. Plus, once you’re retired, you’ll likely have less to set aside for those unexpected expenses.
Which brings us to the single most important thing you can do to meet these three key challenges of retirement. Have you guessed what it is yet?
That’s right: plan ahead.
By being proactive, by starting now, you can mitigate these challenges and prevent them from derailing your dream retirement.

As always, if you’d like any assistance with creating a retirement plan, or if you have questions about how to maximize your savings and cover your expenses, feel free to contact us.

End of Year Financial Tips

by | Nov 30, 2018 | Learning

I guess I do not have to remind you that the end of the year is quickly approaching? Holiday lights are popping up around the neighborhood and retailers are rolling out their seasonal displays. And it is only a matter of time before your social media feeds are flooded with daily reminders as well.

With all this holiday cheer in mind, I have compiled a list of end of the year tips. Whether you're currently working and saving for retirement, approaching retirement, or embarking on new post-retirement adventures, here are some core tax, planning, and financial housekeeping things to do.

  • Be sure you have taken your RMD for the year.  Remember, RMD stands for Required Minimum Distribution.  This starts when you hit 70 ½ and goes until you pass away (actually, it could go longer with inherited IRAs, but that is for another conversation).  RMDs are not terribly difficult to calculate if you want to do it yourself.  However, be sure to take it, otherwise the penalty is 50%!
  • If you have a CPA prepare your taxes, give them a call to make sure there are not any end-of-the-year tax moves they may recommend.
  • Empty out your Flexible Spending Account (FSA), unless your employer allows some of the unused funds to be rolled over.  Please don’t confuse this with a Health Savings Account (HSA), as the FSA is geared more toward immediate health-related expenses, and includes a use-it or lose-it feature for the calendar year.
  • Consider charitable giving. Keep track of your donations to charities in all forms—and consider strategies that may qualify you for larger tax deductions.
  • Just in case you inherited an IRA, you may have RMDs to deal with here as well.
  • If someone who was RMD eligible passed away during the year and did not take out all their RMDs, you need to complete this by paying them out to the beneficiaries.  Again, 50% penalty if not done.
  • If you haven’t maxed out your 401k/403b/457 this year and can afford to, reach out to your benefits department to see if you can contribute more the last few paychecks of the year so it is maxed out.
  • It is a good idea to check your credit report for errors at least once a year to help catch fraud or reporting mistakes
  • Speaking of maxing out retirement plans, be sure to increase your plan contribution rates for next year when the retirement plan savings rates bump up.
  • Charitable IRA Contributions also need to be made by the end of the year.  This is where you can take your RMD (up to $100,000), and direct it to a charity of your choice.  If fulfills your RMD requirement and is not taxed to you.  Just make sure it goes directly to the charity.  You do NOT want it to come to you first and then you give it to the charity.
  • Be sure to check the beneficiary information on your plans.  If you have not updated the beneficiary information recently, it is a best to ensure it is up to date.  This includes contingent beneficiaries also.
  • While you are on a roll, check your personal information on all of your statements too.  You know, like the home address, phone number and current email addresses.

Take the time to give your finances a year-end checkup. Do you want to feel in control of your money and on top of things?  Doing this before year-end allows you ample time to take the necessary steps to potentially save on 2018 taxes and set up your investments for success in 2019—without putting a damper on your holiday cheer.

There are important financial housekeeping tasks that you can tackle at any time of the year, like repricing your car insurance or checking your credit reports.  But December 31 only comes once a year, and there are many key financial deadlines to meet before then.  So, get started now, and use the year-end to make tax-smart moves that can help set you up for a prosperous new year.

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Don’t Be Deceived By Mutual Funds

by | Nov 6, 2018 | Learning, Most Popular

Don’t Be Deceived By Mutual Funds

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Best Mutual Funds?
Since the bull market run started 10 years ago, how many mutual funds would you guess outperformed the stock market?

If you are thinking 500, 200 or even 20, you are very wrong.  In fact, not one single mutual fund has beaten the market since 2009.  After pondering that fact, does that make you want to change what you invest in?   Remember all those expensive, slickly produced TV and magazine ads boasting market beating ratings and top quartiles?  You know, the ones that show an incredibly good looking, but aging couple walking hand in hand into the sunset on a deserted beach?  They all are just so much bunk. The funds mentioned rarely quote performance beyond one or two short years.

Not too long ago, the New York Times studied the performance of 2,862 actively managed domestic stock mutual funds since 2009. It carried out a simple quantitative analysis, looking at how many managers stayed in the top performance quartile every year.

ZERO was their final conclusion.   It gets worse…. It is very rare for a mutual fund manager to stay in the top quartile for more than one year. All too often, last year’s hero is this year’s goat, usually because they made some extreme one-sided bet that turned out to be a flash in the pan.  The harsh lesson here is that investing with your foot on the gas pedal going 100 miles per hour and your eyes on the rearview mirror is certain to get you into a fatal crash.

 

“It is possible that any one of these mutual funds will beat the market over the long term,” … “Some of them will do that. But the problem is that we don’t know which of them will do that in advance.” And that, in a nutshell, is the kernel of the argument for buying index funds.
  -New York Times

In their investigation, The NY Times did come across two mutual funds which did beat the S&P500 for five years.  These small cap energy funds more than average amounts of risk to achieve these numbers and have since lost most of their money.
The underlying causes for the pitiful underperformance are many and they highlight the reasons ETFs are coming on strong.  Mutual fund management fees are high and more buried costs are hidden in the fine print of the prospectus. The managemnt fees that are quoted are just the tip of the iceberg.

Any proven,  real talent soon flees the mutual fund industry, with all the real brains leaving to start their own hedge funds and investment advisory services. The inside joke among hedge fund managers is that employment at a mutual fund is proof positive that you are a lousy manager.

Let’s revisit those high dollar mutual fund TV ads. They cost tons of money to make.  All the production costs of the commercials are rolled up into those 12B-1 hidden fees you never really see unless you hunt through the prospectus.  These commercials and print ads are made at the expense of the fund investors thus yielding you a lower return on investment on your money. And those sexy performance numbers? They benefit from a huge survivor bias. If a mutual funds performance is substandard, it is at risk of being closed. As there is a impending desire to protect the other funds in the family. Trying to find mutual funds with standout records spanning 2 decades is near impossible. Like finding the proverbial needle in a haystack.

But since we are on a roll, its hard to imagine that the mutual fund industry as a a whole woefully underperforms the basic S&P500 averages. How could this be? Random picks from the stock pages of your local paper would probably create a better investment return than the majority of the mutual fund industry.

Two years ago, when he signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, President Barack Obama bragged that he’d dealt a crushing blow to the extravagant financial corruption that had caused the global economic crash in 2008. “These reforms represent the strongest consumer financial protections in history,” the president told an adoring crowd in downtown D.C. on July 21st, 2010. “In history.”

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This was supposed to be the big one. At 2,300 pages, the new law ostensibly rewrote the rules for Wall Street. It was going to put an end to predatory lending in the mortgage markets, crack down on hidden fees and penalties in credit contracts, and create a powerful new Consumer Financial Protection Bureau to safeguard ordinary consumers. Big banks would be banned from gambling with taxpayer money, and a new set of rules would limit speculators from making the kind of crazy-ass bets that cause wild spikes in the price of food and energy. There would be no more AIGs, and the world would never again face a financial apocalypse when a bank like Lehman Brothers went bankrupt.

Two years later, Dodd-Frank is groaning on its deathbed. From the moment it was signed into law, lobbyists and lawyers have fought regulators over every line in the rulemaking process. Congressmen and presidents may be able to get a law passed once in a while – but they can no longer make sure it stays passed.

With millions of dollars being spent on high paid Washington lobbyists, the mutual fund industry continues to complain about overregulation. Plus, don’t forget, that the costs of the lobbyists also come out of your fund performance as well.

This is why the overwhelming bulk of investors are better off investing in the lower cost ETFs that have become so popular with investors, diversifying holdings among a small number of major asset classes, and then rebalancing as needed to keep the winners in play.

Research Financial Strategies does not charge you with any of our overhead. I am not jacking up what you pay me based on what I spend. I don’t even sell your email address to another online marketer. Being an independent operation of a dozen or so people, I’ll tell you what I don’t have. I lack an investment banking department telling me I have to recommend a stock so we can get the management of their next stock and we don’t have any in-house mutual funds from which we profit more and are required to push.
You just need to pay me a low, flat fee. I don’t need any more.

 

For over 25 years, Research Financial Strategies has been serving families and businesses as their investment advisor. Let us put our money management expertise to work for you. Set up a consultation by either filing out our contact form or by calling us at 301-294-7500. We are here for you!

 

We Are Here For You

 

Source: NYTimes.com

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Four things you should know about the midterm elections

by | Oct 24, 2018 | Learning

I present you with two quotes:

“Democracy is the form of government in which the free are rulers.” – Aristotle
“I tell you, all politics is applesauce.” – Will Rogers

Whichever quote best describes your attitude about the upcoming election, the fact remains that on November 6, we have an opportunity to perform our civic duty as citizens of a free country. So whatever party you belong to or opinions you hold, I hope you’re able to carve out time to vote!

Eight Things to Know about the USA-China Trade Dispute

Now, onto what this letter is really about.
With the midterms right around the corner, many clients have been asking me what the elections could mean for the markets. So, without further ado, here are four things you should know about the relationship between midterms and markets.

1. Markets usually dip before a midterm election but rise afterward.
Typically, the markets have not fared well during midterm-election years. In fact, according to one study, the S&P 500 averages a 19% decline in the months before a midterm!1

That hasn’t happened this year – as of this writing, the S&P is up slightly for 20182 – but we have seen increased volatility in recent weeks.
Of course, there are many reasons why the markets rise and fall. But one possible explanation for this trend is because elections are always preceded by uncertainty. Which party will control Congress? What new policies can we expect? What old policies will be rolled back? How will it all affect our taxes, healthcare, industries, and budget? Pundits earn their living by making predictions, but the fact is, no one knows what the future will bring until the future becomes the present.

The markets, of course, are allergic to uncertainty. It’s the driving force behind many a market pullback. And with so much uncertainty before a midterm election, it’s not surprising the markets would struggle.

On the other hand, the S&P 500 usually climbs an average of 31% in the year after a midterm.1 Again, it sort of makes sense if you think about it. After an election, uncertainty begins to fade as we gain a better idea of who is in power and what their agenda will be. In fact, the markets often rally after a midterm election. (The upcoming holiday season likely also plays a role.)

2. Historically, the markets don’t really care which party is in control.
Whether you’re a passionate conservative, devoted liberal, or something in between, the fact is that the markets aren’t as partisan as people.
Talking heads can argue till the cows come home about which party is better for the markets, but I’m not going to get into that here. (It’s not like you need another political pundit in your life!) History shows that, while some years rise higher than others, the markets tend to rise after an election no matter which party is in power.

The reason for this is simple. While politics certainly play a role, the markets are affected by many things – and Washington is not at the top of the list. Corporate earnings. Supply and demand. Interest rates. Inflation. Housing prices. Employment. I could go on. And while it’s true that the government has an influence on many of those things, the government does not dictate the daily rhythm of the markets.

If you think about it, the markets are sort like our own bodies. Our health is determined by what we eat, how much we exercise and sleep, air quality, personal hygiene, vaccinations – and of course, by things we can’t control, like our own genes. In this case, politics are to the markets what brushing your teeth is to your overall health. Both very important, but not always the difference between life or death.

As I mentioned earlier, the S&P 500 usually rises after an election. That’s been true regardless of which party is in the White House or controls Congress. Where we see the biggest difference is in whether the government is united or not. The markets tend to do the best when either party controls both Congress and the White House. It’s not hard to understand why – such an occasion would result in the least uncertainty.

When the two parties divvy up the government? That’s when more uncertainty – and more gridlock – sets in.

3. Of course, past performance is no guarantee of future results.
Just because the markets tend to do well in the months after a midterm doesn’t necessarily mean they will this time. In this case, there are some possible election outcomes that could conceivably impact the markets more than others. Republicans control both chambers of Congress If this happens, it’s possible Congress will try to extend – and possibly expand – last year’s tax cuts. Decreased regulation is also likely, and they may even take another shot at striking down the Affordable Care Act (aka Obamacare).

The markets soared to never-before-seen heights after President Trump’s election, largely due to tax cuts and deregulation, so it’s possible this outcome could bump Wall Street even higher. On the other hand, both interest rates and our nation’s deficit are getting higher, too, so even a Republican dominated Congress might decide to avoid any further economic stimulus.

Democrats control both chambers
In this scenario, Democrats may well try to roll back some of President Trump’s agenda, just as any opposition party does. And since Democrats may also decide to expand the current Trump-Russia investigation, this outcome would certainly bring a lot of uncertainty. That could conceivably have at least a short-term impact on the markets. But again, history shows that the markets do well no matter which party “wins” a midterm election.

Democrats control the House, while Republicans retain the Senate
According to pollsters, this is the most likely outcome. Should it happen, it will likely mean that neither side really gets what they want. President Trump and Republicans will be hard-pressed to advance their agenda, while Democrats will be unable to change much of what has already been done. The result? Gridlock – something most Americans are familiar with at this point. Should this happen, Washington’s impact on the markets, positive or negative, may be minimal.

4. We never make investment decisions based on politics.
No matter how many political signs you put on your front lawn, no matter if you still have an Obama “Hope” sticker on your car or a Trump “Make America Great” hat on your head, you should never make financial decisions based on politics.

This is especially true when it comes to your investments. Choosing whether to buy or sell based on who you think will win an election is the opposite of having an investment strategy. It’s investment speculation. And given how passionate many of us are about politics, it can severely color our thinking. How many people missed out on one of the longest bull markets ever because they disliked President Obama? How many people missed out on the “Trump Bump” because they disliked President Trump?

It’s true that midterms can impact the markets. But that doesn’t mean we should change or abandon our strategy. Make no mistake: This is an important time of year. It’s a time when we, the people, get to decide the direction of our country, state, and local communities.
But it’s not the time for changing the direction you take toward your financial goals.
I hope you’re able to vote next month. In the meantime, if you have any questions or concerns about Washington, the markets, or your portfolio, please feel free to contact me. If there’s one thing I can guarantee, it’s that I’m easier to get in touch with than your local politician! On behalf of everyone at Research Financial Strategies, have a safe and stress-free election day!

1 Ryan Vlastelica, “How stocks perform around midterms,” Market Watch, September 11, 2018. https://www.marketwatch.com/story/heres-how-stocks-perform-around-midterms-in-one-chart-2018-09-11
2 Per https://www.bloomberg.com/quote/SPX:IND on October 22, 2018..

Words to Live By – Change

by | Oct 23, 2018 | Learning

A major part of my job is helping people reach their financial goals in life. Over the course of my career, I’ve found that while things like planning, saving and investing are crucial, they’re not as important as qualities like perseverance, hard work, gratitude, and adaptability.

Sometimes, whenever the road to our goals seems long or daunting, it’s helpful to look for inspiration. So, lately, I’ve started sharing a few quotes that have inspired me in my own personal journey. I call them Words to Live By, and I hope they’ll help you as much as they’ve helped me.
Last month, we looked at the quality of perseverance. This month let’s look at an underrated quality: Adaptability and the willingness to change.

Words to Live By #2
Change
“There is nothing permanent except change.” – Heraclitus

Have you ever worked toward a goal only to find the process isn’t quite what you thought it would be? It’s a tale as old as time. It happens when someone starts hitting the gym after years of staying away. When someone returns to school to finish their degree. When someone starts saving for that special trip they’ve always dreamed of. When someone wants to finally write that novel kicking about in the back of their head. And when it happens, people’s responses are often the same:
“It’s harder than I thought.”
“I just don’t have time.”
“I don’t want to do it that way.”
“This isn’t how I thought it would be.”
I’ve certainly thought these things on many occasions. When I do, I remind myself of this quote by Maya Angelou:
“If you don’t like something, change it. If you can’t change it, change your attitude.”

The fact is, achievement doesn’t take place in a vacuum. It happens in the real world, and the world changes constantly. New obstacles and challenges will constantly present themselves. New demands on your time will constantly arise. The things that used to work for you before don’t work anymore. The skills you’ve long had, or the knowledge you’ve long possessed, may not be enough.
That’s why adaptability and a willingness to change are crucial if you want to reach your goals. To put it simply, the people most able and willing to change are the people most likely to be successful.

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.”
– Jimmy Dean

When working toward your goals, accept and welcome the fact you may have to change:
• Your habits.
• Your expectations.
• Your schedule.
• Your mindset.
• Your work ethic.
• Your comfort zones.

“Intelligence is the ability to adapt to change.”
– Stephen Hawking

Change may be difficult. Sometimes, it can even be downright unpleasant. But if the goals you’ve set for yourself are truly what you want the most, then it’s absolutely worth it.

“You cannot change your destination overnight, but you can change your direction overnight.”
– Jim Rohm

As time passes, the world will change. As the world changes, our lives will change. And as our lives change, so too will the road we must take to reach our goals. When that happens, embrace it. Don’t get stuck in the past. Or, as the great Will Rogers once said:

“Don’t let yesterday use up too much of today.”
Good luck!

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