Friday Financial Five – March 20, 2015
Friday, March 20, 2015
Dan Forbes, GoLocalProv MINDSETTER™
President Obama trying to help student borrowers
The president is attempting to get out ahead of any possible student loan problems with the recent unveiling of the
“Student Aid Bill of Rights." With over $1 trillion in loans outstanding, this is an attempt to make payments, complaints, and transparency easier, while doing everything possible to avoid defaults. Another area of interest would be the treatment of student loans in bankruptcy. Student loans are difficult to get discharged, and the administration would like to see this changed.
Social Security is your friend
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There are plenty of articles dedicated to Social Security planning, but people are still leaving money on the table. For couples, there are an estimated 8,000 strategies and over 2,000 rules governing benefits. Still, many take a payout as early as possible and lose out on an estimated $100,000 in benefits. The negative talk surrounding the program led to the perception that a retiree better take the money now while it’s around. While Social Security does have an eventual funding issue, the program will continue in some capacity. Couples need to consider longevity, taxes, and spousal options before committing to taking the money at the earliest possible date.
Breaking up may not be hard for BOA to do
The SEC will allow shareholders of Bank of America to vote whether or not the company needs “to develop a plan for divesting all noncore business segments.” The proposal for the break up was presented by a consumer-advocacy group called Public Citizen. Not surprisingly, BOA management is against the idea, but the proposal will be part of BOA’s proxy statement and voted on at the company’s annual meeting.
IRS looking at political non-profit organizations
The IRS is reviewing changes to the nonprofit rules of the Internal Revenue Code to see if they should be more expansive. There are some groups calling for good governance and transparency, while others call for less restrictive regulation. When it comes to taxation and the political process, it would seem that the more transparency the better. The IRS contends it’s important to have a common definition and treatment for politically active non-profit organizations and PAC’s, as well as charities, trades, and unions.
A real reason to hate Christian Laettner
It’s NCAA tourney time and in preparation for that, ESPN presented the documentary, “I Hate Christian Laettner”, which details one of college sports’ greatest heroes/villains. Sports fanaticism aside, the real reason Laettner might be hated is the millions of dollars investors claim he cost them through various real estate dealings. This WSJ piece outlines the charges brought against him a few years ago. Apparently, hitting a high pressure shot in the NCAA tournament may not necessarily equate to business expertise. Kentucky fans may still loathe Laettner, but at least the shot he hit didn’t cause them to lose millions of dollars.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].
Related Slideshow: RI Business Rankings in US
See how Rhode Island stacked up.
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WalletHub
Rhode Island has 2015's eighth highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Rhode Island ranks fifth overall in the category of speeding over 20 mph annual premium increase at $482. While ranking third overall in the category of 2 accidents annual premium increase at $2,721.
Rhode Island ranks ninth overall under the reckless driving annual premium increase at $749.
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WalletHub
Rhode Island has been ranked as the 8th most eco-friendly state in the country, according to a recent study by WalletHub.
Rhode Island ranks third in environmental quality and 16th in Eco-Friendly Behaviors Ran landing them in 8th overall.
RI is behind Washington and New Hampshire who are in the six and seven spots respectively, and in front of Connecticut and Hawaii who come in at the nine and ten spot.
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WalletHub
Rhode Island is 2015's 4th Worst State to be a taxpayer, according to a recent WalletHub report.
Rhode Island ranks 48th of 51 with an average state and local tax price of $7,159 which is good for a 27% difference from the national average.
The states that are directly behind Rhode Island are Wisconsin at $7,159, Nebraska at $7,298 and Illinois at $7,719 for a 37% difference from the national average.
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WalletHub
Rhode Island has the highest vehicle property taxes in the country, paying an average of $1,133 according to a report from WalletHub.
Virginia and Kansas are the two states just ahead of Rhode Island in the 49 and 50 spots, paying $962 and $905 respectively.
RI also ranks 42nd in average real estate tax, paying an average of $2,779, according to the WalletHub report.
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Gallup
Providence-metro ranks at the bottom for job creation in 2014
Rhode Island has been ranked amongst the worst in job creation, according to a recent survey done by Gallup.
Gallup gives the Prov-metro area an index score of 23, the lowest score is the New York- New Jersey area with 20.
Salt Lake City, Utah and Austin-round Rock, Texas rank the highest with a score of 37.
See the rest of the rankings here.
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Forbes
The 2014 state rankings by Forbes has just been released and Rhode Island moved up two spots from #48 in 2013 to #46 in 2014.
What does Forbes say about RI's business environment"
After Michigan and Illinois, Rhode Island has experienced the third worst net migration out of its state in the country over the past five years. With a recent unemployment rate of 7.6%—lower than only Georgia and Mississippi—residents are leaving the state in search of jobs. Rhode Island has been stuck in the bottom five overall for six straight years. One plus: labor costs are 5% below the national average, which stands out in the expensive Northeast.
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Tax Foundation
Findings from The State Business Tax Climate Index were released this morning by Tax Foundation which found Rhode Island to have the 45th best tax climate for businesses for 2015. The state's rank has not changed since last year after The Index analyzed 100 different tax variables in multiple categories.
Read more about the report here
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Thumbtack/Kauffman
Providence is the second worst city in America for small business, according to a new survey conducted by Thumbtack.com and the Kauffman Foundation.
More than 12,000 small businesses in 82 cities across the country participate in the survey. Providence received an overall "F" grade for small business friendliness.
Full Survey Results Here.
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The Economist
Small Business Friendliness Grade: F
The Economist grades states on an A+ to F grading scale for its small business climate. Rhode Island is one of just 6 states to earn an "F" grade.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Read More About The Economist Grade Here
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Forbes
Forbes ranks each state in business costs, economic climate, and growth prospects. RI is third worst in 2013.
The most damning in the commentary:
After Michigan, Rhode Island has experienced the second worst net migration in the country over the past five years.
Read More About Forbes Ranking Here
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Tax Foundation
#46 Tax Foundation
Tax Foundation ranks each state in corporate tax rank, sales tax rank, and unemployment insurance tax rank.
Rhode Island and the other states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.
Read More About Tax Foundation Ranking Here
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ALEC
#47 ALEC
ALEC ranks each state in economic performance and outlook.
Although Rhode Island ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
Read More About ALEC Ranking Here
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Kauffman Foundation
#50 Kauffman Foundation
Kauffman Foundation ranks each state in entrepreneurship.
Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.
Read More About Kauffman Ranking Here
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Free Enterprise
#47 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Rhode Island has continued to feel the direct impact and ripples from the recent recession—it ranks 47th overall in economic performance. However, positive rankings of 15th in talent pipeline and 16th in innovation and entrepreneurship suggest the existence of a foundation on which to build the future.
Read More About Free Enterprise Ranking Here
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Gallup
10th Worst in Gallup's Annual Ranking of State Job Markets 2014
Rhode Island has been ranked 10th worst for job creation in Gallup's annual ranking of state job markets in 2014 with a job creation index number of 21
Rhode Island is one of two (Connecticut) states to rank in the bottom ten each year since 2008.
The 2014 State level findings have were drawn from 201,254 interviews with employed adults across the nation.
See the full list of rankings here.
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