Ready to simplify?

 Busy, successful people who’ve worked hard for their nestegg often find they don’t have time to give their financial plans and investments proper attention.   It’s not that they aren’t smart enough.  

  • It may be that their careers are demanding.
  • Or perhaps they are busier in retirement than they were when they were working.
  • Or life has just caved in, and there is no emotional bandwidth left to deal with financial matters.

They want to be informed, but are too busy for one more thing.  They are ready to delegate that responsibility–ready to simplify their busy lives.   That’s when we can help.

We actually LIKE working with financial matters, and are good at it.  Most likely you spend a lot of time helping out others.  It’s time you let us help YOU out.

1040-EZ Free…Others competitively priced

Click on the red icon to prepare your own tax return! Tuggle & Russell has partnered with Drake Software to provide you access to professional-grade software in a user-friendly version. Drake Software has been a trusted provider of tax software to professionals for decades. Now you can take advantage of that expertise. Check it out. When you click the red icon, you’re under no obligation. You will be directed to a page that will explain more.

Of course, if you’d rather have a tax professional prepare your return, Tuggle & Russell is happy to serve you in that way.

Iceland’s Economic Recovery Defies Current Wisdom

Iceland was devastated by the economic collapse in 2008.  But now they are thriving!  What did they do differently than the rest of the world?  You’d be surprised…or not.

The footbone’s connected to the anklebone…

 …the anklebone’s connected to the shinbone…the shinbone’s connected to the kneebone…you know the song.  When your foot hurts, you walk a little differently and it affects how you use your leg and hip.  Over time, your hip may become sore, and eventually throw your back out of whack.  All because of your foot?  Yes!  This is not difficult to grasp.  We’ve all experienced it.

 So take that same thought process and apply it to your “financial body.”    Your stock portfolio is connected to your taxes; your taxes are connected to your emergency fund; your emergency fund is connected to your insurance…you get the point.   What you do in one, will have an effect on the other.  It may not happen right away, but over time it will.  So why would you want to examine and analyze one part of your financial body without investigating how it interacts with the other parts?  Excellent question!!!!  SO glad you asked.

 During your initial visit with us, you may be asked a lot of questions about things that don’t seem to relate to the reason you made the appointment.   This is a good thing…because for you to receive the best advice, we need to have a clear picture of how things connect.  In fact…drumroll please…by seeing all the parts, then we might be able to detect a way to tweak one small thing in one place that will have a dramatic, positive effect in another place!   In other words, we may save your financial back by fixing your financial foot (I’ll let you decide what your financial foot is).  Wouldn’t that be nice.   :)

 So if:

  • All your financial body parts seem disconnected and scattered all over the place
  • Some of your financial body parts are worn out and need to be replaced
  • You’re not sure what each financial body part is doing for you…or to you!

 Give us a call.  We want you to feel better financially.

Mom Was Right

For YEARS my mom has kept what we refer to as The Book.  The Book, spoken about in ominous tones, had information that would be necessary for someone else to know in case something happened to our mom and dad.  Growing up, my sister and I hated any reference to The Book as if acknowledging its existence would cause something bad to actually happen.

By the time I got married I had decided that mom was pretty smart to keep such a Book.  But I certainly didn’t want to LOOK at it!  And I had no desire for one of my own.

About 7 years after we were married, my husband’s father, who was a widower, passed away.  Whoa.  Now everything was up to his two young-adult sons and daughters-in-law who were trying to figure out what all he had, and what final arrangements he would have wanted.  It would have been handy if there had been a Book.  My mom may have been on to something.

Years later, when many of our peers had growing children, my husband and I had an epiphany:  If something happens to YOU, who will take care of ME!!  We did not have children and we realized we’d better get ourselves a Book or no telling what would happen!  Sigh…maturity had finally settled in.  So, because of our situation, we decided to have a living trust, which included, but was not limited to, instructions for what certain people should do in case we were incapacitated as opposed to just dead.  We now have our own Book. 

A couple of years ago my mom was insistent that we discuss HER Book.  This time I wasn’t nearly as afraid of The Book as I had been in years past.  In fact, it wasn’t a sad conversation at all.  We actually laughed and had a good time. The Book, once so scary, is now a friend.  Go figure.

So what is the point of this little narrative?  Hello!  Make your own Book!  I know, I know.  It sounds like an icky thing to do.  And it will require a few legal documents.  But it really does put you in charge.  Ooo, now that should appeal to you!   Encourage your folks to have their own Book.  If you have kids, for heaven’s sake have mercy on them and show them your Book.  You don’t have to be dreary and dismal to have a Book conversation.  Be creative.  Have fun with it!  You’re a boomer, after all.  And we boomers do EVERYTHING our own way!   We can help you organize and update your very own Book.

ROTH Conversions Revisited

Now that the superior beings in DC have finally made a permanent decision – at least for the next two years – on the rates at which they will confiscate our money, maybe we should reconsider the advantages of converting taxable IRAs to nontaxable Roth IRAs.  You should be aware that my position is that it is an unforgivable sin to pay any more tax than you absolutely have to, or pay it any earlier than the due date.  However, if (1) your top tax rate is always the same, (2) you have cash outside of retirement plans you can use to pay the additional tax on the conversion, and (3) you are not dependent on IRA distributions for living costs, then you might consider making a conversion in an amount that will not cause any income to be taxed at a higher rate.

 Some advantages of converting a regular IRA to a Roth IRA are:

  • Withdrawals up to the conversion value and contributions, are nontaxable if you are over 59.5
  • All withdrawals are nontaxable after account is 5 years old
  • Nontaxability applies to beneficiaries if named in IRA agreement
  • Lack of income from investment of funds used to pay taxes reduces current taxes
  • Reduces estate value by amount of taxes paid
  • Income tax on future Roth IRA earnings is eliminated
  • You can take until October 15 to file your tax return and make your final decision (do it by 10/1)
  • You can open multiple Roth IRAs and decide whether to back out on each one separately before you file your tax return.  You pay taxes on the ones you don’t back out on.

 Some disadvantages are:

  • Reduces deductions due to increased adjusted gross income, e.g. medical
  • May increase Medicare premiums (currently based on adjusted gross income)
  • May increase amount  of Social Security taxable
  • Reduces income from investment of funds used to pay taxes

 So I can still change my mind even about paying taxes.  Talk to your retirement planning advisor—or us.

What about these “end of America” videos?

There are many radio stations lately advertising a website by Porter Stansberry called “EndofAmerica.”   We’ve had several clients asking about them.  So consider these thoughts if you decide to listen to one of his videos:

  • Porter Stansberry makes his money selling subscriptions to his newsletters, not by trading.
  • Even though Mr. Stansberry still contends he was falsely charged, the SEC filed suit against him for fraud in 2003.  See the SEC link for details:

Are some of the things he is saying true?  Yes.

  • We are devaluing our dollar by printing money.  That brings about inflation, regardless of what Bernanke says.
  • We are in a serious debt situation at every level.   
  • If we don’t address our debt issues responsibly we will have to endure uncomfortable consequences, with global ramifications.

Have we ever had rampant inflation before in America?  Yes.  When my husband and I bought our house in 1983, our interest rate was 12-1/4%.  The max he projected in one of the videos was 10%. 

Let’s say he is correct in his assessment of what could happen in America.  Is subscribing to Mr. Stansberry’s newsletter the way to escape these consequences?   Knowing his “secrets” about certain stocks is not a safe haven.  Buying gold does not guarantee that your wealth will be preserved [check out our videos on gold]. 

Bottom line:  This guy uses enough truth to make him believable, but he does NOT have secret answers to guarantee safety or wealth.  Follow the money:  how does he make HIS money?  By making YOU wealthy or by scaring you into subscribing to his newsletter?

–Lois Russell

Surprise, Surprise!

A friend called me last week about his 401K he was maintaining with a former employer. He was laid off last year but kept his money in the employer-sponsored 401K. In March of this year he moved everything to a money market within the 401K. When his June statement arrived, he noticed he had “an investment loss” of $135. “How could this be?” he asked me. When I looked at his statement, it did indeed say “investment loss” which is NOT the same thing as a fee. But I told him, your money market did not lose value. That’s called “breaking the buck” and when it happened in 2008 it made huge news. Your money market did not break the buck. I instructed him to call the custodian of the 401K to find out what kind of fee was being applied to his account.

Well surprise, surprise! It is not uncommon for the participants of an employer-sponsored 401K to bear some of the administrative costs each quarter. So the whole time he was employed, and for the months following his lay off he was being charged $135 a quarter. He never realized it because it was falsely labeled investment gain/loss. So…Kemosabe, what about YOUR 401K? If you’re still employed, you don’t have much choice. But if you are no longer an employee of the company, why share the administrative costs of the plan? Just a thought.

Apparently my friend is not alone in being upset about the hidden fees. The Department of Labor has finally (after about 2 years of wrestling with the subject—like it should be so difficult to say “be honest”?) issued a rule that in essence says “be transparent.” But custodians don’t have to be transparent until July 16, 2011. So the lesson here is, “reduce your reliance on government!” Ask questions yourself; don’t wait for a DOL ruling to force custodians to disclose fee information.

But now, back to the point: If you are laid off and still have your money with your former employer’s 401K plan, you might want to rethink that strategy. Rolling over your 401K into an IRA gives YOU the control. Registered Investment Advisors (which we are) are required to be—and we want to be—transparent about fees charged to your account. Mull it over. We can help.

Do you love your grandchildren?

I’ve always assumed our country would provide an opportunity for my grandkids to have “middle class” lives, since it seemed our economy was growing. Recently the following statistics came to my attention, and now I am not at all certain. Consider the changes in 2009:

• 61% of Americans “always or usually” live paycheck to paycheck. 2007-43% and 2008–49%.
• 24% have postponed retirement age in the last year.
• Over 1,400,000 filed for bankruptcy in 2009. 32% more than in 2008.
• For the first time, banks own more residential housing net worth than all individuals together.
• The bottom 50% of income earners own less than 1% of the nations’ wealth.
• The average federal worker earns 60% more than the average private sector worker.
• The average time to find a job has risen to 35.2 weeks.
• Service jobs, generally lower paying, provide more than 40% of all jobs.
• Over 40,000,000 are on food stamps. Next year it will be 43,000,000.
• In China, garment workers work for 86 cents an hour. In Cambodia, 22 cents.
• The top 10% of earners make about 50% of total American income.
• 21% of children live below the poverty line.
• The number of millionaires rose 16% to 7,800,000.

Our nation is becoming more and more like the other nations with no middle class. With the “global economy” (read labor pool) and the added medical costs of Obamacare, the rush will be greater than ever to use the cheaper labor. Only about 5% of workers are entrepreneurs. The other 95% only want to get a check each week for the hours worked. Pay is going to be lower due to the number of unemployed. Currently, there are about 6 people looking for every job opening. Remaining in the “middle class” is going to be very difficult. Encourage your grandchildren to work for themselves.

A few quick facts about the Federal Reserve…

Q:  When was the Federal Reserve created?

A:  President Wilson signed the Federal Reserve Act into law in 1913 setting up the Federal Reserve as the “lender of last resort” to avoid devastating runs on banks.

Q:  Is the Federal Reserve a bank?

A:  The Federal Reserve is a system of banks.  The Federal Reserve Act divided the nation into regions and authorized the formation of a federal reserve bank in each region.  All national banks within a region were required by law to become stockholders in their respective federal reserve bank.

Q:  Let me get this straight.  The Federal Reserve is not a government owned bank?

A: No, it is not.  The 12 regional federal reserve banks are privately held corporations authorized by Congress to regulate the flow of money.  Certain officials of the Federal Reserve Board are appointed by the President and approved by the Senate.

Q:  Why do my dollar bills say “Federal Reserve Note” at the top?

A: “United States Notes” were authorized by the Legal Tender Act of 1862.  In 1913 The Federal Reserve Act authorized the production and circulation of “Federal Reserve Notes”.  For a time both Notes were circulated.  In1971, however, issuance of the United States Notes ceased and only the Federal Reserve Notes are used today.  Federal Reserve Notes are claims on the assets of the issuing Federal Reserve Bank and are liabilities of the U.S. Government.  (

Q:  What difference does it make if technically the Federal Reserve is privately owned?

A: Mayer Amschel Rothschild (founder of one of the largest international banking dynasties) put it this way:

“Give me control of a nation’s money and I care not who makes the laws.”

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3939 Beltline Road
Suite 215
Addison, TX 75001
Clayton Tuggle, CPA, CFP®
Phone: 972-788-4703
Lois Russell, CFP®
Phone: 972-759-0203

Fax: 972-788-2837