The Lange Report - October 2016

The Lange Report - October 2016

Table of Contents

 

The Best Way to Spend Your Money


The Weinstein Family Reunion

This is an interesting phenomenon: When I tell clients that they could afford to spend substantially more money than they are now, I often get stiff resistance. “What? Spend more money? Why? On what? I have what I need.” And that probably is true. Over the years, it is very likely they have accumulated what they need. In fact, it is probably filling up the extra closet space!

But I am not recommending that my clients acquire more stuff or spend money on things that many clients would not value, like new cars or even new houses or vacation houses.

One of my favorite personal finance writers, Jonathan Clements, recommends that people with extra money should buy experiences, rather than buying things. The first time I heard that from him, I recognized it as the same wisdom that I have seen played out in my own family for years now.

Jim, Cindy, and Erica at the Weinstein Family Reunion.

My favorite recommendation for my clients who are in the luxurious position of being able to spend substantially more than they are currently spending is to take their family on a vacation. Walter Weinstein, my father-in-law, hosts a family vacation every year and picks up the tab for the entire group. Through his generosity, he has taught us all some incredible life lessons — memories last, family relationships sustain you, and the happiness that comes with experience outlasts any bit of stuff you can buy.

After a lifetime of hard work, good investment, and personal sacrifice, Walter is 92 years young and in the enviable position of being able to do most anything he wants and still leave his children and grandchildren a nice inheritance when he passes away. But, every year, he whittles their inheritance down just a tad, and sponsors an expensive family getaway. Why would he do this? Because he knows, deep in his heart, that the lasting memories of family time, the reinforced network of extended family relationships, and the sense of “clan” are worth so much more than any thing money could buy now or later.

For four days each year, the extended Weinstein family, including aunts, uncles, nieces, nephews, children, grandchildren (and even great-grandchildren now!), drive or fly in to the Poconos to stay at a wonderful family-style resort. We spend time as a family playing games, relaxing at the “beach,” taking hikes, biking, and just generally getting caught up with each other. The resort has a comedy club, live music and entertainment, parties, festivals, and family games so there is plenty to keep our multi-generational crowd happy. I think the most valuable part of the entire trip is when we all reconvene for family-style meals in the dining room. It can get raucous with 10 conversations all going on at once, but the feeling of connectedness is palpable.

Our daughter, Erica, is an only child, and while that was absolutely the best choice for our immediate family, thanks to Walter’s generosity, Erica knows what it is to be part of a much larger family. She has strong connections with relatives that she might otherwise only see every few years — if at all. Her connection to her grandfather is especially strong, which is really good for both of them! And the best part is that the connections were formed through shared activities and shared events over a prolonged stretch of time, not just for a few hours at Thanksgiving dinner or a wedding celebration.

I am so grateful to Walter. We are all grateful for his wisdom. When my father-in-law passes, he will leave a little less money to his family, but will have provided a priceless legacy. I believe we of the next generation will strive to sustain the tradition for our children and our grandchildren.

So, I offer you this lesson from my father-in-law, Walter. If you are wondering how you can spend your money wisely (and keep it out of Uncle Sam’s hands), spend it on experiences. Whether it is a family gathering, an annual vacation to a part of the world you’ve always wanted to visit, riding lessons for your grandchild, or holiday parties that your great-grandchildren will remember when they have great-grandchildren, buying life experiences for loved ones is probably your best investment.



Fraud Alert: The IRS Will Not Call or Leave a Message Threatening Anything...

Have you gotten this call or voice message on your answering machine?

This call is officially a final notice from the IRS, or Internal Revenue Service. The reason for this call is to inform you that the IRS is filing a lawsuit against you. To get more information about this case file, please call immediately on our department number, xxx-xxx-xxxx. Thank you.

Or perhaps one claiming to be from the IRS telling you that you owe them an additional payment?

If so, you are not alone. It seems that the number of IRS phone scams has risen dramatically in the last few years. At least three people in our office have received these calls — and some multiple times. One of our CPAs, Steve Kohman, reports that he has at least one client a week tell him they have gotten a threatening and totally bogus phone call from the IRS.

According to www.irs.gov, in February of this year, they had over 896,000 reports of fraudulent calls like this since they began tracking them in 2013. But, what is much more insidious is their report that over 5,000 people have fallen victim to the fraud, losing $26.5 million dollars. That is roughly $5,000 per victim. That’s scary!

According to an article released directly by the IRS, the IRS will never:

  • Call you to demand immediate payment, nor call you about taxes owed without first having sent you correspondence or a bill in the mail.
  • Demand payment without allowing you to question or appeal what you owe.
  • Require a specific method of payment, like a debit or credit card.
  • Ask for credit card numbers over the phone.
  • Threaten to bring in local police or law enforcement groups to have you arrested for non-payment.

If you receive a call from someone claiming to be the IRS and threatening a lawsuit or asking you for money, hang up; never give them any information. Do not put yourself at risk by answering any questions or returning the call out of curiosity or fear. Feel free to report the call to the IRS and Federal Trade Commission, but if you have any concerns about your taxes, speak with your CPA or call the IRS directly to discuss the matter.

For more information about his scam and others, go to www.irs.gov/help-resources. They have an extensive fraud, identity theft, and phishing section, with resources on how to recognize and report fraud.

Protect yourself and don’t fall victim to this devious and rampant scam.



Crossword

Across:
3. Jim and Pittsburgh Controller Michael _______ hash out Pittsburgh’s financial state of affairs in episode #158.
6. In episode #175, David Blanchett of _________ Investment Management speaks out about smart spending in retirement.
8. Johnathan Clements _____ Guide 2016 was the topic of episode #164.
9. Burton Malkiel and Jim talk about ETFs or ______ Traded Funds in episode #167.
10. The number of times America’s IRA Expert, Ed Slott, has been on the Lange Money Hour.

Down:
1. P.J. DiNuzzo and Jim discuss the importance of supporting the ____   _______ of your financial house on epsisode #165.
2. The Founder of the VanGuard Group and guest in episodes #89 & #133: John ___.
4. Episode #174 taught listeners to Think, Act, and Invest like Warren ____ with guest Larry Swedroe.
5. Britain’s departure from the European Union, also known as ____ is the topic of episode #173 with Charlie Smith.
7. The Lange Money Hour – Where ____ Money Talks.

>> Answer key located at the end of this page.

 


Rosemary and Basil Grass-Fed Burgers/Meatballs
(Serves 4)

Ingredients:

  • 1 pound organic, grass-fed ground beef (or use organic, pasture-raised turkey, chicken, lamb, etc.)
  • 1 teaspoon garlic, minced
  • 2 tablespoons yellow onion, finely chopped
  • 1 ½ teaspoons dried rosemary
  • 1 ½ teaspoons dried basil
  • ¼ teaspoon sea salt
  • ¼ teaspoon ground black pepper
  • 2 tablespoons coconut oil
  • ¼ cup Gut Healing Broth or water (optional)

Directions:

  • In a large bowl, combine the meat, garlic, onion, rosemary, basil, salt, and pepper. Using your hands, mash the ingredients together to incorporate the spices well into the meat. Form the mixture into eight patties or 24 meatballs.
  • Heat the coconut oil in a large pan. Add the patties or meatballs to the hot oil and cook them for about 5 minutes, flipping them to brown on all sides. Add the broth or water and simmer, covered, for another 3 to 5 minutes, or until the patties or meatballs are cooked through.
  • Enjoy them warm, or store them in the fridge or freezer to enjoy later.

Recipe courtesy of Dr. Amy Myers’ book, “The Autoimmune Solution.”

 


James Lange, CPA

Jim is a nationally-recognized tax, retirement and estate planning CPA with a thriving registered investment advisory practice in Pittsburgh, Pennsylvania.  He is the President and Founder of The Roth IRA Institute™ and the bestselling author of Retire Secure! Pay Taxes Later (first and second editions) and The Roth Revolution: Pay Taxes Once and Never Again.  He offers well-researched, time-tested recommendations focusing on the unique needs of individuals with appreciable assets in their IRAs and 401(k) plans.  His plans include tax-savvy advice, and intricate beneficiary designations for IRAs and other retirement plans.  Jim's advice and recommendations have received national attention from syndicated columnist Jane Bryant Quinn, his recommendations frequently appear in The Wall Street Journal, and his articles have been published in Financial Planning, Kiplinger's Retirement Reports and The Tax Adviser (AICPA).  Both of Jim’s books have been acclaimed by over 60 industry experts including Charles Schwab, Roger Ibbotson, Natalie Choate, Ed Slott, and Bob Keebler.

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