Budgeting Capital Gains for Tax Efficiency Brokerage accounts such as individual, joint, corporate, or trust accounts are often subject to annual taxes because of both income (such as dividends or interest) and capital gains (selling something that appreciated in value). For this post, we’re going to specifically discuss Capital Gains (which occur when selling an asset that’s gone up in value). Note:  Tax-deferred accounts (IRAs, 401ks, 457s, Charitable) do not usually pay tax on income or gains, rather they may owe tax based on annual withdrawals.  First, a quick story about taxes ..read more

The Value of Financial Planning  Congratulations on taking the first step toward securing your financial future! If you’re starting to create a financial plan, you’re already ahead of the curve. Did you know that only one in every three adults in their 50s makes it as far as you? Those with a well-thought-out plan accumulate three times as much wealth as those without one.[1] In this article, we’ll explore the significant benefits of financial planning.   Get the most value out of your financial plan with an advisor 1. Behavioral Coaching Investors often make decisions based on emot ..read more

Our own Chris Johnson recently presented a “Taxes in Retirement” seminar at the Middleton Library. We thought sharing a few of the common questions would be helpful. How do I decide whether to save to my traditional or Roth 401k? It depends! Our tax system is progressive, meaning the last dollar you earn in the year will likely have a higher tax rate than the first. Generally, you want to pay taxes now when you’re in a low tax bracket and pay taxes later when you’re in a high tax bracket. That’s how it relates to the type of account. You pay taxes now on Roth contributions while you pay taxe ..read more

Going to college is exciting! You get to live on your own for the first time, meet new friends, and explore new interests. But, for many, college is also a source of anxiety. Aside from having to develop a new routine in a new area, many students worry about how to pay for college. Getting scholarships can relieve some of that worry. This article outlines how to be a competitive scholarship applicant and it all starts sooner than you might think- freshman year of high school. Things to think about as you enter high school: Join clubs! Aside from fostering friendships and looking good on a res ..read more

Our investment philosophy at JSA is to identify and own “excellence” and avoid “mediocrity.” We construct portfolios of 20-30 reasonably priced stocks of businesses that are responsible, well-managed, competitively advantaged, participate in attractive industries, and don’t take on too much debt. We are in this pursuit together. That’s an important piece of this puzzle. We are in the same boat and will endure losses and enjoy gains right alongside you. We spend a lot of time trying to identify and own “excellence” and avoid all else. That means we’re looking for the rightmost section of the “b ..read more

Welcome to the Financial Life Series! These articles are meant to help every reader make better financial decisions. They are authored by our team, and each person drew from their own experiences to share. We hope you find it helpful and continue the conversation with the people you care about. The post Financial Life Series appeared first on Jacobson & Schmitt Advisors ..read more

A common question we hear from clients is, “I need to withdraw cash from my portfolio. When should we sell investments to raise that cash?” As we’ve discussed in other posts, timing the market is very difficult. You might get it right a time or two, but outside of that, it’s almost impossible since the market is so dynamic and complex. You may have also heard sayings such as “sell in May and go away,” which says to sell your stocks in May as market returns are usually weaker in the summer months. What to do? The best way to start this discussion is to see what’s happened in the past. The chart ..read more

Considering how strong the housing market has been recently, you may think this seems a strange question. We’ve all probably heard stories of sellers receiving multiple offers or offers without contingencies. For better or worse, real estate is more expensive almost everywhere you look. Something else has happened recently too. Inflation has been higher for longer than many had hoped. That’s put the Federal Reserve on an aggressive path to raise interest rates. While we started 2022 with interest rates (and bank savings rates) at close to zero, investors now expect those rates to re ..read more

A common question clients ask is something along the lines of “are my investments diversified?” What follows will help you determine whether that’s important for your financial life. In our world, diversification means investing in multiple areas rather than concentrating money on one idea. If we had a newspaper from the future printed on the day you retire, we’d quickly turn to the business section, pick the stock that has performed the best over the years, and own just that. However, until Marty McFly picks you up in his time-traveling DeLorean, we’ll have to invest in a range of companies w ..read more

As markets moved lower in September 2021, we decided to write a piece about FEAR – because if there’s one comment we often hear, it’s that people are afraid of losing money in markets – ESPECIALLY when prices are falling. And the lower stock prices go, the more people become fearful (sort of the opposite of shopping where, the lower prices go the happier we usually are, right?) While there are so many OTHER things that can go wrong with one’s personal finances, markets going down still seems to trump them all for many. That’s partly because we can look up stock prices ..read more