Friday Financial Five – March 15th, 2013
Friday, March 15, 2013
RI foreclosures are down and mortgage rates are up
The recent reports are that Rhode Island foreclosures decreased in 2012 and the 30 year mortgage rate has hit a 6 month high. It’s the start of the real estate season, and there’s no guarantee that the buyer’s market will continue the run seen for many years. With signs showing that the economy in Rhode Island is rebounding, don’t be surprised to see 2013 become the year that local real estate makes a big leap forward.
Dollar cost averaging into the market
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A frequent question of investors, given the recent market highs, is whether or not to invest new money. One sensible solution for the skittish is to invest portions of available cash into the market on a periodic basis. Dollar cost averaging means reducing the risk of investing all money at peak levels, just as is being done with payroll deducted retirement plan contributions. Timing the market or waiting for precipitous drops can be ill-advised.
Retirement living in United States ranked 19th
A recent Natixis study placed the U.S. 19th out of 150 countries on their retirement index. The quality of retiree living is based on health care, finances, and quality of life. While the United States spends more per capita for health care, it still trails other developed nations in life expectancy. The country was also penalized for income inequality and the lack of funding for social safety nets. Norway and Sweden placed first and second in the rankings, which can be found here: http://ngam.natixis.com/docs/12/1010/Global_Retirement_Index,0.pdf
A hidden nugget of the health care bill
The health reform bill references the “codification of economic substance”. From the IRS’ perspective, taxpayer decisions can’t be made simply to avoid taxes. They must have economic benefit, meaning the taxpayer’s economic position has changed positively and the reason for the change is not tax related. If you make a transaction that does not meet both of these rules, you are subject to a penalty. So make sure to document non-tax reasons for your tax-planning transactions.
Add a coupon to your online shopping
Internet shopping definitely simplifies the process but buyers sometimes forget to take advantage of coupons. The “Honey” application is aptly named as there’s nothing as sweet as saved money. If using Google Chrome for online purchases, add this application. For over a hundred shopping sites, Honey will scour the internet and apply the coupon code that provides the biggest discount. The application can be found at www.JoinHoney.com.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
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