December, 2021 | Live a Life By Design

Concerned About Your Future?

Posted on December 30, 2021December 30, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

Happy New Year! Another year of opportunities and dangers will present themselves periodically as we progress through 2022. This is called “life”.

Don’t be like everyone else and fall for the old adage of “life happens”. A better philosophy of life is “life planned”. Many people simply create resolutions for the new year and hope for the best. This is not planning, this is wishful thinking and relying on fate, which may not render the desired results.

President Abraham Lincoln is credited with one of my favorite quotes about the future: “The best way to predict the future is to create it.” A powerful statement by a great leader such as President Lincoln should be given proper deference and thought. Under the stress of the Civil War, and the loss of a son, Lincoln continued to rely on his personal philosophies to keep him focused on the future of our country.

If a country can be run with such an approach, surely, we can manage our personal lives with the same principle. One of my yearend tasks is to spend time alone, thinking about the current status of my life and where I wish to be at the end of the next year. It has been said that people will spend more time planning a vacation than planning their life. You can change this rote approach to life and start today by planning your future using a methodology that has served me well.

First, find a quiet place to simply think. This would ideally be a location that doesn’t allow phones, discourages talking and has resources to help you find answers to questions that may arise. Sounds like your local library, doesn’t it? Yes, this is where I spend my time thinking about the future for my future goals. There is no better place than a library to offer you the solitude required to bring out your best thoughts and allow a space for creative planning.

Second, think with ink. I know, we are in the 21^st century and everybody has a smartphone, laptop or some other gadget to electronically record their thoughts. However, the brain functions, and remembers, differently when you use your hand for writing on paper rather than typing on a keyboard. Start with a strategic review of the past year. Did I accomplish my goals as intended? Is there work still to required to achieve an important goal? These are important results that give rise to your brain contemplating your future.

Record your thoughts on paper and simply read what you wrote. Are you proud of your progress? If so, celebrate in some form that you truly enjoy. If not, ask yourself if the goal was clear enough, empowering enough and challenging enough to require your greatest time, talent and treasure to achieve. Perhaps you will carry over an unfinished goal to 2022? This would not be the recognition of defeat but a reframing of the goal in a new light with additional information learned in 2021. Don’t listen to defeatist talk but rather give yourself the right to be positive in thinking and your outcomes will improve.

Lastly, write your completed goals for 2022 in your planner, on a piece of paper or wherever you can see them on a daily basis. The importance of referencing your goals often is to keep them top of mind. Everyday your mind goes to work on the matters you deem important by evaluating and analyzing what you feed it. If you are focusing on your big, hairy, audacious goals for a bigger, better, bolder you, that is what your brain will work to bring in to existence.

This is a new year, a new you and new opportunities for growth. Be the 1% of people who develop measurable, challenging goals that cause you to grow to achieve the objective by writing them down in a manner that can be reviewed frequently during the year. As an added bonus, why not listen to positive, powerful podcasts during the year to keep you on track? I recommend our podcast, “Live a Life by Design”, which is available wherever you listen to podcasts.

There are few concerns for your future when you are actively creating it. This is your year to realize greatness within you. Invest in yourself. Become who you wish to be – a bigger, better and bolder YOU!

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Wishes for 2022

Posted on December 21, 2021December 21, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

A new year is beginning and you are going to maximize your opportunities, eliminate your dangers and improve your strengths. That is how every year starts, right? For your 2022 year, I wish you many happy days with few struggles (unless its your fitness goal which requires some struggle).

Wish #1

This first wish is one that will make you very happy – lower inflation. One of the most difficult financial concepts to understand is inflation. This factor impacts every facet of consumer living – groceries, gasoline, clothing, travel, etc. Based on reports from the U.S. Bureau of Labor Statistics, the current inflation rate in the United States is 6.8% in November, 2021. The U.S. dollar buys less with inflation continuing to rise.

For example, gasoline prices are up 58.1% over the past twelve months. This increase costs far more for workers to commute to and from work and demands more from the family budget. Groceries also increased 6.4% over the past year according to CNBC. Home energy costs have risen 12.2% over the past year. The combination of the increases has caused significant demands on the budgets of families.

Wish #2

Better health and exercise success for 2022. According to Statista.com, medical costs in the United States has risen 7% in 2021 and projected to rise another 6.5% in 2022. One of the best methods of saving your hard-earned dollars on medical care is to change your lifestyle to include more exercise and movement. Another strategy is to review your Medicare Part B plan and determine if you are utilizing the plan effectively. Lastly, consider buying your pharmaceuticals in bulk through mail order to save on prescription costs.

Wish #3

Since genies on TV only grant three wishes, I will continue the precedent. My last wish for you in 2022 is peace in your world. I used the “peace in your world” statement to empower you to control those things and activities in life that give you the most peace. Admittedly, we cannot control all things in the world that contribute to lasting peace. However, our mindset and attitude are two of the most peace-creating areas of life that we have ultimate control. Don’t allow others to steal your joy; conversely, instill joy in those around you to create the types of people with which you wish to interact.

The world is neither good nor bad outside your person, it is only as you desire it be within your person. Find a means of peace within yourself and you will discover more peace in the world. You will attract people in your life that give you a greater sense of fulfillment and happiness. For them, you will be a consistent source of joy that refills their tanks of challenge on a daily basis. It is time to truly work on world peace, starting with us – you and me.

Many of us have plenty to be grateful for this new year. “If you are breathing, you have time to change,” is one of my favorite paraphrased statements by Jim Rohn. Begin your year with hope, happiness and health. The rest of the benefits will be added to you as the days progress.

Happy New Year to all of our subscribers and readers! It is an honor to share information, life stories and humorous moments with you each week. My goal for 2022 is to instill in each of you the powerfully positive message that YOU ARE THE PEACE THE WORLD NEEDS NOW!

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A Recipe for Relaxation

Posted on December 16, 2021December 16, 2021 by Ashley Stieb

As we finish up the last quarter of 2021, we’re still battling the COVID-19 pandemic – and now flu season. Add in the storms, wildfires and smoky air, and busy holiday season and it’s a recipe for burnout. You are likely feeling a little bit of that burnout.

Forbes reports more than half of respondents to an Indeed survey are experiencing some form of burnout, up from 43 percent who said they felt that way pre-COVID-19. Among those respondents, millennials seemed most affected. The 2021 Forbes article reports:

59 percent of millennials report experiencing burnout
58 percent of Gen-Z reports feeling burnout
54 percent of Gen-Xers report feeling burnout
31 percent of baby boomers reported feeling burnout

With the seemingly constant stress of the past 21 months, it’s important to practice self-care as we close out 2021.

Some ideas for self-care you can engage in to alleviate burnout, according to Psychiatric Times, are meditation and deep breathing, self-compassion, and maintaining a work-life balance. Another great method, and one of my personal favorites, is cooking! I know this doesn’t sound appealing to everyone, but it can always be worth a shot.

Try learning a new recipe and making something from scratch for the upcoming holiday. One of my favorite recipes is homemade Spaghetti Carbonara with homemade spaghetti noodles. This year my family will be having an assortment of Italian dishes for Christmas dinner, so I will be making this for everyone to enjoy.

Here is the recipe if you want to give it a try:

Spaghetti Carbonara with homemade noodles (serves 6)

Noodles:

3 large eggs
2 cups of flour + additional for dusting
1 teaspoon of olive oil
¼ teaspoon of salt

Create a nest with the flour on a clean, flat surface.
Crack the eggs into the nest and add the salt and oil, careful not to let the eggs run out of the nest.
Use a fork to carefully whisk the ingredients together in the nest while gradually working the flour in.
Using clean hands, incorporate the remaining flour to the mixture to create a shaggy dough.
Knead the dough for 10 minutes until it becomes smooth. If the dough seems too dry, sprinkle a very small amount of water on the dough and continue kneading.
Wrap the dough ball in plastic wrap and let it sit at room temperature for 30 minutes.
Divide the ball into 4 pieces.
Roll each piece into a flat oval.
Use a pasta roller to roll the dough to your desired thickness or use a rolling pin to do the same.
Cut each sheet of dough in half to create shorter sheets and dust each side with flour.
Run each sheet of dough through your desired pasta cutter to create noodles.

Carbonara:

1 tbsp olive oil
6oz of pancetta or thick cut bacon, chopped
4 egg yolks
3.5 oz of freshly grated parmesan
1/3 cup of pasta water
Salt and pepper to taste

Bring a pot of water to a boil, add salt and fresh noodles. Boil noodles for about 3 minutes or until al dente.
Collect 1/3 cup of pasta water and strain the noodles. Set aside.
Meanwhile, Heat olive oil in deep skillet and add chopped pancetta or bacon, stir occasionally until cooked.
While noodles and pancetta/bacon cook, beat the egg yolks in a medium bowl.
Add parmesan cheese to the bowl and mix thoroughly. Set aside.
Once pancetta/bacon is cooked, add cooked pasta to the pan. Remove from heat.
Add egg and cheese mixture and pasta water to pan and stir well until a sauce forms.
Add salt and pepper to taste.

If cooking isn’t quite your style, then hand the recipe off to someone else and just enjoy the delicious meal.

To maximize the benefits of self-care and give yourself a break from burnout, do something that you enjoy and relaxes you, whatever that may be. By doing so we can step into 2022 ready to take on the world!

Have a wonderful holiday and a Happy New Year!

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More Than Numbers

Posted on December 9, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

Your personal physician gives you honest and candid information to help improve your physical health. A Certified Financial Planner^TM professional provides you the same type of consultation about your financial health. You are more than a number to a wealth advisor. Your family’s current financial state, future security and transition of assets are the focal points to a sound financial plan.

The basic level of fiscal management is the utilization of your annual household income in a manner that provides for your needs today while saving for your future. In a utopian world, we could simply spend all that we earn, and the retirement phase of life would be funded by someone else. The problem with this thought is that the “someone else” is you!

By applying guidance of cash flow management, your family will enjoy a lifestyle that creates happiness today. The physiological needs such as food, shelter and clothing are the very primal items that help your family simply survive. By appropriately allocating your resources to allow for current living needs and accommodating for your future will instill confidence in your capabilities.

While working through life, you become clearer on what you seek after your career. It is vital that you properly fund your retirement or the pleasure you see in all those vacation posters will evade you. Time value of money is an accounting concept that states, “a dollar today is worth more than a dollar tomorrow.” To maximize the probabilities of accumulating sufficient capital to fund retirement, it is critical to work with a wealth advisor to, first, determine what is the target amount of funds you should save and, second, what is the most efficient approach to saving these funds.

This approach is illustrated with our older daughter’s lifestyle. Our daughter is working in her first career position after graduating with her master’s degree. While helping her with a budget for this new paradigm she is living in, I will never forget her comment of “Wow! It takes too much money to live the way I wish.” After I realized she was being serious, I started the “dad talk” and reminisced about 1987, my first year out of college and working in my career. As her eyes rolled, I could literally hear her think – “Not another “back in the old days” story.”

After a brief discussion, I gave her the secret formula to accumulating wealth for the future while living a happy life today. In remarkably simple terms, invest 10% of your earnings for the future, give 10% away to qualified charities and/or church, invest 10% in yourself through education and other skill-building programs and, lastly, live on the remaining 70%. When she received her first performance bonus, she was so excited! The amount of money she earned was more than she had imagined. Immediately, she began talking about a new car or furniture for her townhouse. I interjected the 10/10/10/70 formula she is currently using to help her live an abundant life. After convincing her that she may not wish to expand her lifestyle with funds that are not consistent, she did something that made my chest swell with fatherly pride – she invested the money in her future

Do not assume that a Certified Financial Planner^TM professional only works with investments. Many of us possess expertise in behavioral finance and other psychological functions of wealth. Just like your doctor, we examine your total picture and provide advice and coaching to reach your highest goals in life in a manner that you choose. With a short conversation, you will discover that a wealth advisor is far more than numbers – you will find a lifelong advisor and friend.

It is an honor to share stories, tax laws and other financial information with you each week. Most importantly, it is critical that each of us share the blessings we possess with those in need. This Christmas Season focus your energy and resources on others and you will receive the most valuable gift on this planet – joy!

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Why Itemize Deductions?

Posted on December 2, 2021December 2, 2021 by Jimmy J. Williams, CPA/PFS, CFP®

Remember the old days when you could gain a tax benefit for paying your property taxes in December, generously donate to qualified charities and deduct your mortgage interest? Those deductions from the good old days are still available, but you must have a significantly greater amount of them to itemize and gain a benefit on your personal income tax return.

The standard deduction for married filing joint taxpayers for 2021 is $24,800 and $25,900 for 2022. For most families, the standard deduction threshold is far higher than they would normally have claimed as itemized deductions. One of the purposes for such a level of standard deductions is to simplify the tax filing for millions of Americans.

Within the itemized deductions additional limits exist. For example, to claim a deduction for your healthcare expenses for 2021, you are required to consider a “floor” of 7.5% or 10%, depending on your adjusted gross income. To create a deduction, consider maximizing your medical expenses by combining qualifying expenses in one year. Another, and more effective method, is to take advantage of any medical employer benefits offered to you.

Some companies offer their employees a “cafeteria” plan or IRC §125 plan that allows for pre-tax contributions to an account that the employee controls and utilizes for co-pays, deductibles, etc. By contributing to this plan in a pre-tax manner, you have avoided the limits caused by the “floor” mentioned above. This means you gain full benefit from the first dollar spent on your qualified medical care.

Income, property and other taxes are allowed as itemized deductions for individuals. The best method of taking advantage of these expenses is to maximize the deductibility of your income tax withholding. For example, let’s assume you are self-employed and the company you own is a partnership, limited liability company taxed as a partnership or an S corporation. These entities distribute the profits to the partners, members or shareholders for taxation at the individual level. Known as conduit returns, all income, losses, gains, credits, etc. will be reported by the owners on their individual returns and taxed for federal and state purposes.

However, some states have enacted legislation that allows the entity to pay the tax on behalf of the owners. By paying the state income tax at the entity level, the owners will receive full benefit of the taxes paid without concern for the $10,000 limitation otherwise required to compute their itemized deductions. Depending on the taxpayer’s income, these savings could be sizeable.

Charitable contributions are another important itemized deduction. Many people do not think about non-cash charitable deductions when preparing their returns. For example, let’s assume you donate your old living room furniture to a qualified charity in 2021. The value of the furniture, determined by IRS-approved methods, would be a deduction on your 2021 return. Proper receipts and other procedures must be followed to deduct the non-cash donation.

You can claim a greater amount of itemized deductions by reducing your adjusted gross income. One of the easiest methods of reducing your income is to contribute to your employer-provided retirement plan. Consequently, this is a great way to increase your future savings since most employers match the contributions you defer from your paycheck.

Another method of lowering your adjusted gross income is to contribute to a Health Savings Account (HSA) if your health insurance qualifies. This is another form of “have your cake and eat it, too!” By contributing to your HSA, unlike the previously mentioned cafeteria plan, you may accumulate the account for many years and utilize for other medical payments after retirement. For example, if a doctor orders rehabilitative therapy in a nursing facility, the funds in your HSA may be utilized to pay these out-of-pocket medical expenses.

The simple act of itemizing your deductions for personal income tax preparation has become more difficult but not impossible. With a little planning and thought throughout the tax year, you may save your family significant federal and state income taxes. This area of tax law is complex. Seek out the assistance of a Certified Financial Planner^TM professional to help guide you through the maze of tax laws to gain the most benefit for your family.

It is truly an honor to share with you each week. This Holiday Season, consider the true wealth you possess in your life – family, friends and faith.