Friday Financial Five – October 28, 2016

Friday, October 28, 2016


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Economic indicators heading into the election

The next president will inherit a mixed bag when it comes to the economy. The index of leading economic indicators was up in September and appears to be continuing in a positive trajectory. Leading economists expect 2.4% growth in GDP over the next four quarters. On the flip side, the European Central Bank has committed to buying bonds until March of next year and probably beyond. This will influence the Fed’s position on whether or not to hike rates before year end. Unemployment has hovered around five percent but tax policy continues to be a sticking point between candidates, neither of whom has properly explained how they’ll close budget deficits or bring down the national debt.

IRS announces 2017 tax numbers

While tax planning for the tax year 2016 continues until year end, it’s never too late to take next year’s numbers into account as well. The IRS has announced tax rates, exemptions, and deductions for 2017. The standard deduction is up $50 for single filers to $6,350 and $100 for married couples to $12,700. The Pease limitations for itemized deductions start at $261,500 for individual filers and $313,800 for married filing jointly. AMT exemptions have been adjusted for inflation. Lastly, the maximum Earned Income Tax Credit amount is $6,138 for joint filers with three eligible children.

Morningstar’s 2016 review of 529 plans

The Morningstar assessment of states’ 529 plans has several changes from last year. Rhode Island’s move from Alliance Bernstein to Ascensus/Invesco has led to a positive reception, as the direct CollegeBound Saver program merits a “Silver Medal”. Utah and Nevada’s plan continues to top the analysis as gold medalists and Virginia’s plan was upgraded from silver to gold. South Dakota, Arizona, and West Virginia were the only three states with a negative rating.

Millennials still getting parental financial help 

Nearly half of Millennials have received assistance from their parents, but almost 60% have an emergency savings account over $9,000 according to the 2016 Millennial Money Study from Fidelity. These emergency reserves are higher than older counterparts, but it appears their ability to save comes at the expense of parents still willing to foot some of their bills. While Millennials have shown a propensity to save, most are still hesitant when it comes to investing or discussing finances with their parents. Parents that continue to subsidize their children’s expenses must factor this in their own retirement plan, including a time when they may have to completely cut the cord.

New value of the Trump brand

Prior to the presidential run, Donald Trump was in another contentious debate centering around his true net worth. According to Trump, Forbes had underestimated his true net worth because it hadn’t properly accounted for value of the Trump brand. This week, the candidate responded to questions about the hits taken during the presidential run and how that will affect his brand value going forward. Have some companies or real estate occupants moved away from Trump? Or is it true that there is no such thing as bad publicity?


Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected] 


Related Slideshow: Power List - Business

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Big Bankers

Kevin Tracy and Oliver Bennett— There are deals and there are BIG DEALS. In Rhode Island, with all of the changing players and banking relationships, one reality is pretty much the same. If you have a big deal that needs sophisticated financing, the community banks may not be able to handle it.

Bank of America may have abandoned the Superman Building, but they are still in Rhode Island and still doing big deals. Kevin Tracy, the former Brown golfer and Oliver Bennett — long ago Fleet Bank trainees — are now the guys you bring in for a $50 million deal.  The more things change - the more they stay the same.

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John Hazen White, Jr. — White has taken Taco to new levels as he has made a series of strategic acquisitions to bolster the Rhode Island manufacturing company into a global firm.

He continues to be a leader in American manufacturing investing in worker retention and employee training.

Behind the scenes, White is a combination of an adviser and moral compass to many in Rhode Island. Despite taking a lower profile than his Lookout RI days, White is still a force pushing for ethics reform. 

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Joe Paolino — Once the young Mayor who took over in the 1980s when Buddy Cianci was forced to resign (the first time), now the leading corporate voice in Providence if not Rhode Island.

While others complain at lunches at the Hope Club and University Club about the plight of the Capital City, Paolino has rolled up his sleeves and taken on issues like panhandling and homelessness.

With a real estate empire that includes much of downtown, some of the top properties in Newport and Hasbro’s campus in Pawtucket to name a few, Paolino has close ties to Governor Gina Raimondo and even closer ties to the Clintons - could a federal appointment be in the works in 2017?

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Steve Kirby — No one dominates commercial real estate in Rhode Island like Kirby does on Aquidneck Island. His red “Kirby Commercial” signs are literally everywhere across the island and in Newport proper -- they are more frequent than street signs.

Want to open a clothing store in Newport? Go see Steve Kirby. Looking to launch a startup tech firm? Call Kirby. Developed cool technology and want to start producing for the Navy? Email Kirby.

Kirby maybe the most influential in business on Aquidniick Island. (PS He will tell you which bankers to talk to).

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Labor Boss

George Nee — President of the AFL-CIO, Nee is one of the most influential players in business in Rhode Island. 

He is Vice Chair of the Convention Center Authority Board, on the Commerce Corp board, the most influential voice for labor at the State House, and involved one way or another in just about every negotiation on constructing public buildings or issuing a tax stabilization agreement in Providence.

For the most part his public persona has been more muted recently, but that has not impacted his private influence. If it happens in Rhode Island, Nee has probably touched it.

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Sally Lapides — If Teddy Roosevelt were alive today and saw the number of Residential Properties’ real estate signs on the East Side he would call it a monopoly and want to break up the company. Lapides not only dominates one of the most affluent sections of Rhode Island, but she also delves into the arts, education and politics.

When you sell the wealthiest and most influential their homes, you make a lot of friends.

Lapides is a force in residential real estate and it will be interesting to see what she does next.

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Helena Foulkes — Two of the biggest decisions CVS ever made were the brain children of Foulkes. The Extracare card and the removal of tobacco from its stores were both influenced by Foulkes.

She has emerged as a national power in business and makes all the business lists for top women, but make no mistake - she is wildly influential in Rhode Island. 

She is close to Raimondo and she may decide to jump into political waters in the future - or may decide if she can snag the CEO spot at CVS.

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Visionary or Free Rider

Buff Chace — One of downtown Providence's biggest real estate magnates is a lightning rod in the Capital City. Widely considered to be one of the prime catalysts of Downcity's resurgence, Chace's accumulation of properties on Westminster Street is straight out of a Monopoly playbook. 

His recent acquisition of the ProJo building has further solidified his dominance, which has not been without intense scrutiny, given his ability to continually secure -- and extend -- tax stabilization agreements at a time when the city's dire financial straits are close to reaching a head. 

Wealthy, influential, and active in the community, Chace has chaired  the Downtown Providence Parks Conservancy and has been a member of the Executive Committee of the Providence Foundation, and is a director emeritus for GrowSmart RI and a trustee emeritus of Trinity Repertory Theatre.

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Big Time

Richard Baccari — One of the biggest real estate developers in New England. For decades he has been a major player in Providence, Rhode Island and the northeast.

During that span, he has been the driving and innovative force behind some of the region's most significant residential and commercial development endeavors. 

See a Stop and Shop development and Baccari probably built it. Has fought back business challenges and much more.


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