Monthly Archives: April 2018

Another Misleading Ad

This is one that I have not seen before, but it came to my office recently. The letter stated the following:


The rest of the form is very official looking and has the appearance that it is coming from the State of New Jersey, which is similar to the shady advertisements regarding labor law posters. Whether or not this type of advertising is illegal is not for me to determine (there are disclaimers on the advertisement if you actually read the entire form), but it borders on shady. A few helpful tips to discern advertisements from valid governmental notices:

  1. Read the entire advertisement/form to determine if it is an advertisement or a notice from a governmental agency.
  2. The form asks for a check payable to a non-governmental agency.
  3. If there are processing fees than it is most likely an ad.
  4. Ask your CPA if you are unsure.

Do You Have Too Many Financial Accounts?

How many financial accounts should you have both personally and for your business? These days it is so easy to open up accounts, but if there is no strategy for having a lot of accounts, then it can create unnecessary chaos and even increase your accounting and tax preparation costs. Let’s look at the pros and cons:

Multiple investment accounts: You may have a traditional brokerage account with one firm, your IRA’s somewhere else, and your old 401k’s still at your employer. The problem with this approach is that it may be hard to coordinate your asset allocation and investment strategies if you are not looking at them as a whole. This is especially true if you have a financial advisor because he or she most likely does not have visibility to your other accounts and cannot advise you properly.

Multiple bank and credit card accounts for your business: There are strategies that can be implemented whereas you transfer money between bank accounts as sort of a shelter as a way of budgeting for your expenses. This strategy is outlined in a book called “Profit First,” which is a very good read, and if you are able to implement this strategy then that is excellent. Aside from the business owners that use this strategy, anecdotally, there seems to be a very high correlation between poor financial performance and multiple bank and credit card accounts.

Multiple bank and credit card accounts personally: The most common issue is when husbands and wives have separate bank accounts. Aside from this being a smart move if there are legal issues, addictions, or tax issues, it makes sense to have one joint checking account for a married couple. Money issues are at the forefront of arguments so why not coordinate your finances as one unit so that you make better decisions jointly and without conflict?

You should always strive to simplify your finances, but as Albert Einstein said, “Everything should be made as simple as possible, but not simpler.”

Deadline Approaching: Should You Make a Retirement Plan Contribution?

The due date for your tax return is fast approaching and so is the deadline to make a contribution to your IRA or a SEP-IRA if you own a business. Should you make the contribution, save the cash, or pay off some debt?

Reasons to Make the Contribution: Let’s assume that you have the extra cash. If you are looking for an extra deduction and you are able to make a deductible contribution then this is a great last minute strategy. You may have also maxed out your retirement plans at work and are looking for additional retirement savings. A non-deductible IRA contribution can also be advantageous too and may be able to be converted to a Roth IRA with no tax consequence, depending upon your situation.

Save the Cash: You may need the cash to start a business or expand your business. Start-ups need every bit of cash so saving for retirement may need to be put on hold for now. Additionally, the returns of starting or expanding a business can be many times greater than a retirement plan contribution.

Pay Off Debt: If you have very high interest rate debt, then paying down your debt will help you to pay off the debt faster and decrease your liabilities, which will in turn strengthen your finances. However, I do not recommend not contributing to a retirement plan to make extra payments towards your mortgage.

Other factors to consider are: large expenses that you may need to fund in the near future, your health, job and business stability, emergency fund balances, and your overall financial goals.