Archive - March 2009

1
If You’re Married, You Can’t File as Single
2
Comprehending Government Bailouts – The Significance of $1 Trillion
3
Freddie, Fannie, and Indy
4
Just Add Stock: Dilution and Citigroup
5
Stashing Your Cash: What Now?

If You’re Married, You Can’t File as Single

Sometimes truth is stranger than fiction. I’ve learned that it’s not unheard-of for a professional tax preparer to advise a married individual to file his or her tax return using the single filer status. No! No! Bad tax preparer!

Last fall, one of my colleagues sought advice from a group of planners regarding a client whose CPA had advised him and his wife to file their returns separately using “single” filing status.  His inquiry prompted a number of responses from other planners with similar experiences.

Here’s the problem: if you’re married as of the last day of a tax year, …

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Comprehending Government Bailouts – The Significance of $1 Trillion

Humans have no way to relate to the number one trillion. Yet, we hear the number an increasing amount of times, especially as it impacts the US economy. One way to illustrate the enormity of one trillion is to think of it as it relates to time. One million seconds is about 11.5 days. One billion seconds is 32 years, and one trillion seconds is 32,000 years. Starting to get the picture?

James Hamilton identified the following information to make the number more real as it relates to finance:

“A trillion dollars is about the total amount collected in income …

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Freddie, Fannie, and Indy

There continues to be quite a bit of hubbub about the condition of the mortgage industry.  Just how concerned should the average person be?  Let’s use the analogy of a car wreck on a major road.

Assuming you weren’t in the accident, the traffic that has slowed down on both sides of the road will slow down everyone.  The vehicles going the same direction as the folks in the accident will get really slowed down.  The ones going the other direction will also probably get delayed, because traffic needs to go a bit slower to avoid hitting the accident.  But …

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Just Add Stock: Dilution and Citigroup

There are a number of differences between stocks and bonds. In addition to those I discussed earlier, the two also differ in terms of the unpleasant things that can go wrong with them. The deal struck between Citigroup and the Treasury recently provides an opportunity to illustrate a few more differences.

In recent months, bank stocks have been tanking even more than the rest of the stock market.  Owners of bank stocks have been worried about the naughty assets that may be lurking on their books, for one thing.  For another, the possibility that the government might take a larger …

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Stashing Your Cash: What Now?

stashing your cashWith short-term Treasuries yielding fractions of a percent, people who need safe investments find they’re getting very little for their money. What are the best options for low-risk cash investments right now?

In July, when I last wrote about places to invest cash, money market yields were just above 2%.  Lately, they’re at half that level. Two-year treasury notes are yielding little more than 1% and even a five-year Treasury yields slightly less than 2%.

Cash-type investments are the logical place for money that you expect to spend in the near- to mid-term future (e.g. funds being saved for …

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