Skylar Dubrow’s 4 Secret Financial Tips To Start Using Today
July 27, 2015
Skylar Dubrow, CPA
Blog
July 27, 2015Skylar Dubrow, CPABlog
Meeting with clients for mid-year planning sessions the past few weeks has been wonderful.
No — really! And yes, I know, I should get out more.
The reason we enjoy doing this (especially this time of year), is seeing that look on our clients’ faces when we identify tweaks and quick moves which can bring a significant ROI on their tax return for their effort and time… well, it’s worth all of the time we’ve put into learning this craft.
Sometimes during these meetings, I find myself sharing some of the private details of how I think about taxes, finances and investing for my OWN family. Yes, I do try to practice what I preach in these Notes to my clients and friends. (And yes, believe it or not, I do have a private life outside of tax forms.)
Enough people have told me that these back-of-the-napkin principles which I share have been helpful, that this morning I’ve been motivated to put some of them down for you in easy-to-digest form.
So, without further ado, here are some of Skylar Dubrow CPA’s ‘secret’ financial tips…
Skylar Dubrow’s 4 Secret Financial Tips To Start Using Today
“The only person who is educated is the one who has learned how to learn and change.” – Carl Rogers
Whether you’re running a Fortune 50 corporation, or just trying to keep your household expenses from exceeding your salary, the same basic financial concepts which I use in my personal life can apply to yours. In my practiced opinion, these are fundamental building blocks for wise financial decisions.
You almost don’t need much else besides these four ideas (almost)…
1. Quick Interest Calculations: The Rule of 72.
Want to double your holdings? The Rule of 72 can tell you how long it will take, based on the specific interest rate you’re looking at. Just divide 72 by the interest rate.
For example, if you’re looking at an investment with an interest rate of 6 percent, then 72 divided by 6 gets you an answer of 12 years.
This is a rough estimate, of course, but it’s pretty effective.
In fact, you can also turn the equation around to determine the interest rate you’re looking at if someone promises to double your returns in a set amount of time. Twice as much money in 12 years? Divide 72 by 12 and you get an interest rate of 6 percent. This rule lets you evaluate investment opportunities quickly and decide where to put your money.
2. Opportunity costs.
What do you need to give up in order to get something you want? It’s almost always a question of money, but also one that involves time and value.
Pursuing an advanced degree may take years — are you willing to put in that amount of time? Will a sports car give you enough enjoyment to offset going into debt for it?
Whatever decision you end up making about how you are investing your money, should also be applied to how you think about your time. Sometimes it really does pay to invest in a lawncare service so that you can free yourself up to do more “valuable” work on behalf of your family.
3. Sunk costs.
This is money you can’t get back — a non-refundable airline ticket, for example. The idea here is that you need to keep sunk costs in the proper perspective. It’s easy to start thinking “Well, I’ve already spent $100, what’s another $25?” You’ve got to be willing to walk away sometimes.
Once something is paid for, and cannot be refunded, it shouldn’t impact your future financial decisions. It is a “sunk” cost, i.e., water under the bridge, and whatever you do in the future won’t ever get it back.
4. Time value of money.
According to this principle, a dollar you receive today is worth more than a dollar you’ll get tomorrow. You’ll have opportunity to invest that dollar immediately and begin earning more revenue from it (and also avoid losing value because of inflation).
Again, this helps you make certain calls about your purchases — and your income. It’s the old “a bird in the hand” theory in action for your wallet.
These four financial tips have served me well over the years.
Are there any that you think I have missed? Do you have questions? I’d love to hear from you, so shoot me an email with your thoughts (simply click the button at the top of this page to email me).
Warmly (and until next week),
Skylar Dubrow CPA
(818) 889-7285
The Dubrow Group, CPAs
Preparing a correct and accurate tax return is our priority. We proudly stand behind our work and if a mistake does happen that is our fault, we will immediate correct the mistake and gladly refund your money if requested.
If any penalties or interest are incurred due to our mistake, we will do everything we can to fix the problem and cover any penalties should they arise.
We feel so confident in our processes to account for all deductions and uncover hidden deductions that we guarantee that you will pay the lowest amount of taxes legally possible. We spend a good amount of time correcting and fixing other so called tax pros mistakes and oversights.
We are so committed to giving out clients the best service. We do this by taking thte time to understand our clients situation and asking the right questions to make sure every deduction is accounted for. And remember we work for you, NOT the IRS.
Not only do we prepare an accurate tax return, we will inform you of tax saving strategies and best record keeping practices should we see fit.
Starting January 1, 2017, all our returns come with our “Silver” Stress Free Audit Insurance, FREE with paid tax preparation. Our Silver package includes our full support when handling IRS and State Notices for the 2016 tax year. If you receive a notice, send it to us and we will work with you to organize the required documentation and we will respond to the IRS on your behalf.
“Many tax experts are predicting an increase in IRS audits (because of the system automation), as well as an increase in audits by the state”
Our Gold Package adds our representation for an actual IRS audit for the current year. Whether it be an “audit by mail”, or an actual audit at one of the IRS locations, we will work with you to compile all the necessary documentation and represent you in front of the IRS for no additional charge. Our fees to represent our clients in an audit scenario can range from $1000- $2500 & up depending on time and complexities.
Our Gold option is an optional add on service & not included with regular tax preparation. Gold protection covers the current tax year only regardless of when you get audited.
The IRS and state authorities are behind in auditing tax returns and matching reporting documents to tax returns.They are currently working on 2012 & 2013 years.
Our Platinum level package covers you for a period of 7 years. It Is just like our Gold package, but it includes the currtent year and 6 prior years. We will provide audit coverage for prior years tax returns, even if we did not prepare them.
How is that for taking care of our clients! Once the Platinum level package is purchased, only the gold level will be required in future years as the previous years have been protected by the one time Platinum purchase.
