Category Archives: Personal Finance

Senior Homes: Being Proactive

With the baby boomers coming into their post-retirement years, the advancement of medicine and enhanced quality of life extended, the need to take care of seniors has never been greater. There are many different choices available, but for the ultimate peace of mind, nursing homes seem to be the way forward.

It can be very lonely when the kids move out and one becomes an empty nester. Thus people often choose to live with or close to others in the same stage of life as them. That means for the elderly that they are often left quite isolated. And if there is another option available, why not take it?

The thought of moving into a residential senior home such as the Dry Harbor Nursing Home in Queens can initially seem daunting. But, studies have shown that taking your life to the next stage – and moving to a place where others understand you and are encountering the same experiences – is actually an incredibly positive, proactive move.

It makes much more sense for those who are caring for their elderly relatives to find a nursing home before the situation becomes detrimental. So often people push this off because they are apprehensive or think they can cope. But why not take action earlier to prevent a hospital visit that could occur without adequate supervision?

Truthfully, emotionally, physically and even financially it makes much more sense to move into the nursing home before disaster strikes. Make the most of it; reap the benefits while you still can and enjoy the summer years of your life side-by-side with other like-minded individuals.


Using Frequent Flyer Miles is Not Always the Best Option

According to a study conducted by personal finance site NerdWallet, it sometimes makes more sense to hold onto your frequent flyer points and use cash to pay for your plane ticket. The new summer travel study showed that in a few specific circumstances, using reward points is a financial mistake.

NerdWallet examined 20 of the country’s most popular flights, including domestic and international, on four US airlines: Southwest, Delta, American and United. On those routes they then looked at the fares for 320 different individual trips, in order to get a broad overview of domestic, international, peak season, off-season, economy, business and first class ticket costs.

What they found is that on short flights in business class, point values were not high enough to justify their use. They concluded that travelers should just pay in cash for their tickets.

Here’s the reason why. Obviously, the value of each point varies, depending on the cost of the flight and the number of points you need to purchase a ticket. For instance, if a flight from New York to Los Angeles requires 50,000 points, the value of each point changes with the cost of the flight. A $1000 flight is a much better deal than if the flight only cost $300.

The Points Guy is a site that gives advice on using points for plane tickets, hotels and other types of loyalty programs. The site is extremely helpful to consumers since it posts up-to-date valuations each month for how much airline points are worth at that time.

NerdWallet found that for business and first-class flights less than 1,000 miles, the value of each point was only 0.72 cents. Compare that with an average of 1.13 cents per mile on flights longer than 1,000 miles. Paying for the shorter flights makes sense since you can save your miles for those longer flights next time.

Three Funds Flying with Its Investors

There are two basic models for fund managers managing other people’s money. Managers can take their client’s money, and work hard to give them the best results based on what the manager knows are the client’s goals. Some investors might want quick returns on liquid assets. Others might prefer long term returns on less accessible assets. But whichever it might be, the manager is doing his best for the client without any personal stake in the outcome other than serving his client to the best of his ability.

There is another model, however, in which the manager has staked his own personal assets on his bets, right alongside those of his clients. It is understandable why investors feel more confident in their managers when they know that his decisions will affect not only his clients’ finances, but his own personal stake.

One case resembles a pilot flying the plane you are on. He is along for the ride, and his life is at much at stake as yours. Would you feel as confident if the pilot were on the ground, flying the plane  remotely, while you were 30,000 feet above him in the sky, and nothing between you and disaster but the pilot’s good will and expertise?

There are several pilots who have been flying with their passengers on the journey to greater wealth, who have been quite successful in recent days. Here is a look at who they are, and what they’ve been up to.

Tetragon Financial Group– With managers Reade Griffith, Paddy Dear and an experienced management team, the Tetragon Financial Group has £173.62 million ($217.79 million) under management, some of it their own money. Tetragon was launched in April 2007, which means it is approaching its tenth anniversary with some excellent results. Its overall three-year return is 12.52% and the five-year return is 18.14%.  That is good news for pilots and passengers.

Riverstone Energy– Run by a professional group of managers, Riverstone manages £72.19 million ($91.45 million), including a substantial fraction from management’s own pockets. The fund was established by Riverstone Holdings in 2013, and its investment manager is Riverstone International Limited. It was the subject of a £760 million ($953.34 million) IPO in October 2013 and is listed on the London Stock Exchange, and is part of the FTSE 250 Index. Its three-year return is 11.44%.

Scottish Mortgage– Another publicly traded fund, this is an investment trust which invests globally in strong businesses with better-than-average returns. It is managed by Edinburgh-based investment management partnership Baillie Gifford & Co. It has an AUM of £54.05 million ($67.8 million) and is part of the FTSE 100. Its performance over the past three years is 75.34% and over five years 160.57%. The Scottish Mortgage and Trust Company Limited was launched over 100 years ago, in 1913.

IRS and New Estate Tax Rules: Opinion

taxThrough the process of its amended tax law regulations, the IRS is likely to encounter hostility at the upcoming December 1 hearing on the matter. Much of the discussion will focus on whether or not it will be accused of “overstep[ing] its authority” in this regard.

What are the experts saying on this? Pioneer Wealth Partners principal Johnathan Blattmachr believes that regarding the authority the Treasury and IRS are to be “viciously attacked by taxpayers and their advisers.” However, the Tax Court might uphold the regulations using the three-decade old deference doctrine set forth by the US Supreme Court decision in the Chevron USA Inc. v Natural Res. Def. Council case. Back then, the court formed a legal test to determine whether or not to “grant deference to a government agency’s interpretation of a statute that it administers.”

In terms of valuation discount elimination, Blattmachr notes that the regulations “would seem to eliminate minority (or lack of control) discounts for all family ‘controlled’ entities including active businesses.”

Charles (Chuck) Rubin sees one possible silver lining in a recent article in JDSupra Business Advisor. He said: “assuming the higher Section 2704 values allow for higher basis for interests held at death, this will allow for income tax savings. For estates within annual exclusion amounts (and thus no estate tax) such basis step-ups could make this a revenue loser for the IRS.” But in the same journal in an article by Leah Bishop, Tarin Bross and Alyse Pelavin, it was pointed out that “the proposed regulations, which attempt to significantly limit the ability to claim valuation discounts.”

Still, should these regulations be finalized there are still various exceptions. Bishop, Bross and Pelavin point out that: a) the regulations are not applicable to all entities; and, b) when a taxpayer dies, the valuation discounts of that estate tax benefit are “often offset by an income tax cost due to lower tax basis of the inherited property.”

The three concluded that where these regulations are “particularly important” is vis-à-vis infra-family gifts and sales to reduce estate tax payable with a death. In all such situations like these, consulting an expert in the industry on the specific case is the best way forward to avoid difficulties and gain clarity, given the complexity of the tax laws and their fluctuations.

America’s High-End Zips are Mostly in New York

Times Square. One of the highest rental districts in the US. Photo by Francisco Diez from New Jersey, USA

Times Square. One of the highest rental districts in the US. Photo by Francisco Diez from New Jersey, USA

RentCafe, a website that helps people locate rental apartments, investigated which US zip codes have the most expensive rental rates in the country. Their survey picked only apartment buildings with at least 50 rental units in zip code areas with at least 200 such buildings.

The following information was gleaned from Yardi Matrix, a rental market data service. The data includes rents for all sized units from 2015.

In addition to being extremely expensive rentals, the areas are also highly competitive markets where finding a place, at any price, can be challenging. Looking at this list could help you cope better with the high rent you are paying, which by comparison, is probably not all that high.

The ten most expensive rental zip codes are as follows:
1.    Hell’s Kitchen, Midtown Manhattan West, Times Square and the Theater District: 10036. Median Rent- $4,720/month
2.    West Village, Manhattan: 10014. Median rent- $4,650
3.    Tribeca, Manhattan: 10282. Median rent- $4,615
4.    Gramercy and Flatiron, Manhattan: 10010. Median rent- $4,200
5.    Lenox Hill: 10065. Median rent- $4,200
6.    Belvedere Tiburon, California:94920. Median rent- $4,195
7.    Upper West Side, Manhattan: 10025. Median rent- $4,185
8.    Midtown West and Chelsea, Manhattan: 10001. Median rent- $4,150
9.    Union Square and Gramercy, Manhattan: 10003. Median rent- $4,095
10.    Lower East Side, Manhattan: 10002. Median rent- $4,032

Ten Highest Paying Cities in the US

Downtown San Jose. Photo by Tim Wilson

Downtown San Jose. Photo by Tim Wilson

In some cities more than others, “it’s all about the money.” Although most of the time more goes into the equation of where someone is going to live than just potential salary, knowing where the highest paying jobs are located can help influence that decision.

US News recently released its Best Jobs Rankings for 2016, which included median salaries in its assessments. The publication then looked through the list of jobs and found in which cities certain jobs paid the most.
Be warned: cities with high salaries usually have equally high cost of living expenses. Someone who knows how to squeeze all he can get out of every dollar could do well in these cities.

1.    San Jose, California: Nurse anesthetist–$232,970; Nurse practitioner–$139,570; Computer systems analyst–$108,500
2.    San Francisco, California: Statistician–$121,300; Software developer–$118,690; Web developer–$91,560
3.    Washington, DC: Operations research analyst–$108,510; Computer systems analyst–$103,750; Web developer–$84,990
4.    New York, New York: Operations research analyst–$113,350; Audiologist–$107,530; Accountant–$93,160.
5.    Bridgeport, Connecticut: IT Manager–$160,180; Marketing manager–$158,460; Computer systems analyst–$108,040.

Retire for Longer Using a Few Easy Tips

Photo courtesy of

Photo courtesy of

Baby boomers and those coming after are living longer, often meaning that retirement is also becoming a larger chunk of a person’s lifetime. The Centers for Disease Control and Prevention says that the number of people living past age 100 has increased from 50,281 in the year 2000 to 72,197 in 2014, and increase of close to 44 percent.

This is great news, but it means more thorough planning is needed for the retirement years. Someone who retires at age 65 can hope to live an additional 35 years, and hopefully without running out of money.

Here are a few tips to help finance those years without too much pain.

Claim your Social Security benefits later in life. People can begin collecting Social Security at their full retirement age of 66, or 67 for those born after 1960. For every year that someone delays they are entitled to an additional 8 percent in their payments. Waiting unit age 70 to begin collecting can increase the benefits by 32 percent, and those higher payments will last the rest of your life.

Be sure your retirement money is keeping up with inflation. Social Security payments automatically keep pace with inflation, and so do some types of government bonds. You can also keep part of your savings in investments that have a track record of keeping up with price hikes like stocks, commodities and real estate. Be careful though, the last group has no guarantees attached.

Try and arrange to have a pension plan from your employer. Traditionally pension payments last as long as you do, even if you live a long, long time. The downside is often pension plans do not keep up well with inflation. See your options at work, and choose wisely.