How to Invest Your Tax Refund

It’s April. The birds are singing, flowers are blooming, and you are banking on that big tax return to take your family on that vacation you have been dreaming of all year.

Maybe travel isn’t your thing, and you prefer possessions such as flat screen t.v.’s and the latest shoe craze?

In this post, we will show you how to invest your tax return and make it work for you.

We all know that debt is a huge deal in America. So many of us are plagued with high interest credit card bills. Want to improve your score, please your significant other, and be able to borrow more money should the need arise in the future? Use that hefty refund to pay off a few of those high interest credit cards and breathe a sigh of debt-free relief.

Tragedy hits people every day when they least expect it. Most people do not have a nest egg to rely on when tragedy strikes. What if you take at least a small portion of that refund, and tuck it away in an interest bearing account for any misfortune that could come your way? Having a few extra dollars put back when that transmission goes bad could save you in the long run.

Politics are all over the place right now, and the future of retirement seems to get more and more diminished every year. A large majority of elderly people are still working past the age of 65, and some, with multiple jobs. You worked all your life, but do you have anything to show for it? Putting back some money for retirement now, could pay off big in the future, as you finally get some time to relax with your family and enjoy the life you worked so hard to build.

Do you rent your home? Do you want to rent forever or would you rather bask in the glory of owning your own house for a fraction of what you would rent it for? Investing in the real estate market could pay off big in the future, and, if house buying is something you enjoy, the market of “flipping houses” has never been better. Invest your refund in a home and enjoy peace of mind.

Investing your refund may seem hard once you have it in your hand, but it could pay you off three-fold in the long run.

The High Cost of Veterinary Care

I was recently told by a person who adopted a rescue animal from their local animal shelter as a means to cope with the recent loss of their daughter. The story does not end well emotionally and financially due to what they were told the cost of veterinary care.

Everything was going great, until after they came home from the March of Dimes.

The couple opened the door to the room they kept their dogs in after hearing growling as soon as they arrived home.

Their small Dachshund had been attacked because the new dog introduced to the pack was trying to assert itself.

Folks who have had pets know that Veterinary bills are some of the most expensive and unexpected medical costs in our financial lives.

According to Washington Post, veterinary care in the United States jumped from $8 Billion in 2000, almost doubling to $14 billion in 2013.

This young loving couple was told that costs could estimate $4000 for surgery and wound care for their dog, and the vet hospital needed it up front. This was AFTER they spent $600 dollars out of their bill money for the appointment.

They were unable to provide any further care for their dog and had to put their dog to rest, devastating the owners.

Why should you let the cost of veterinary bills devastate a financially stable home, while veterinarian’s pay has increased by an average of $90,000 per year? Unfortunately, this is a fact of life. We often do not factor in worse case scenarios and/or unforeseen expenses.

You have many options, such as pet insurance, and deferred credit cards such as CareCredit, but, the best game plan, is good financial stability in order to have money set aside for emergencies just like this one.

Here at Berkshire Hills Financial, Tom Sirois can help you set aside money in increments that won’t affect you or your families expenditures, and avoid tragedy when it strikes next.

Keeping Things Simple When Looking at a Stock

I have spoken with countless people (professionals and non-professionals) regarding stock they are invested in. Though many may “sound” intelligent describing the minutia as to why a particular company is a good investment. For long term investing, I think Warren Buffett has a great way to describe what HE looks for.

Here are four items he utilizes BEFORE he invests in a company by buying their stock:

  1.  Any Good Investment Idea Can be Put in One Paragraph: most great companies are simple and easy to understand (think Coke or McDonalds)
  2.  Circle of Competence and NO Called Strikes: know what you are good at, and do not pick a company at a bad price. Make your BEST decision always.
  3. Invest in great businesses that have a terrific person running it: Peter Lynch once said: “buy a business that is so good that any idiot can run it because sooner or later one will”.
  4. These businesses are hard to find, so do not sell them: Buy at the right price, and you will not need to sell these stocks.

A great video that wraps this all up is found here: Warren Buffett on Investment Analysis

Filing Taxes (not March Madness)

Though many of you are filling out your bracket for March Madness, this time of year is a good time to get your financial information in order to complete the filing of your taxes next month. Though you have a couple extra days this year, don’t wait until the last minute.

Over the last several weeks you should have been receiving documents from your employer, banks, stockbrokers and any other agencies that were in your financial life in 2015. By law, these would be sent out by the end of January, so you should have all of these documents at this time.

Something that is relatively new and essential to preparing your taxes is Healthcare statements. You will have an additional form (Form 1095) that discloses that you have health care coverage for you and your family, as well as the amount you paid for it. Having health insurance is now mandatory by our Government (thank you Obamacare), so you MUST provide this information on your forms.

Most common are the income and deduction statements. This includes W-2 provided by your employers showing the amount you were paid AND the amount that was withheld for paying taxes. If you own a home you may be able to deduct the mortgage interest: that would be form 1098. Student loan interest is reported on 1098-E. Many different types of 1099s are provided depending if you earned any interest on your bank accounts, received dividends from investments, sold stocks or bonds, received a refund in taxes, etc.

When this is gathered, sit down and prepare your taxes. YES, you can do it yourself most of the time, but if you do hire someone to prepare your taxes to watch out for these red flags.

Below are two links that assist you in preparing a checklist for all of your documents:

When do You Need a Financial Advisor?

When Your Finances Increase Significantly.

It’s no secret that a fool and his money are soon parted. With bankrupt celebrities and even Wall Street needing a bailout, we could all use a little financial education. At Berkshire Hills Financial, Tom Sirois can help you plan investments, take care of past debt, and consolidate your expenses.

When A Loved One Gets Sick

Healthcare is one of the most expensive things that people rarely prepare for. Before you know it, (God forbid), your aunt has cancer, your family is nowhere to be found, and she moves in with you to save money for treatments. At Berkshire Hills Financial, Tom Sirois can help you plan for these dark times, and put a silver lining on that dark cloud, and in your wallet.

When Planning A Large Purchase

Car, boat, truck, or house, a large purchase may seem like a great plan until disaster strikes and you realize you should have budgeted. At Berkshire Hills Financial, Tom Sirois can help you rearrange your finances to fit in the purchase you want and deserve.

Before you really need one

Finding unbiased advice is very hard to come by, but as with many things it is better to have a plan BEFORE your confront financial decisions. For example, if you have young people or individuals who are dependent on you as a source of income, you MUST protect your income if you can no longer work. This can be simply disability insurance or more commonly life insurance. It can cost just a few hundred dollars a year to protect your earning power for the future. But, as with all of these decisions, you need to know what is the best financial decision: Term Life? or a Whole Life Policy? The answer is not always easy to answer. That is where an unbiased financial advisor can help.

Unless you are wealthy like Warren Buffet as a simple conversation with a financial advisor can pay for itself over time many times over.

Tom Sirois

Great Barrington

Tax Season = Unclaimed Income for a Large Amount of America

Tax season rolls around every year for the majority of working class Americans during the months of January-April, promising some W2 filing blue collar employees a very needed tax break.

But what about those that don’t know that money is available for them?

Each year, hundreds of thousands of dollars go unclaimed in the United States. Money that could benefit the homes of many struggling Americans today. Tax season often sees a surge in filings for single parents, working and not making enough to survive. Some of these workers may qualify for a credit for their efforts.

There are a variety of options to see if you have money pending from the United States Treasury.

In Great Barrington Massachusetts, you can go to http://www.mass.gov/treasury/unclaimed-prop/  and enter your information to see if you are owed anything.

This little treasure hunt has sometimes payed off big for other inquirers, so be sure to check your name now!

 

Financial advice from Great Barrington’s very own,

Tom Sirois

Berkshire Hills Financial.

A case for owning Stocks (and renting?)

Since “the Great Recession”, many American households have not recovered their former net worth.

Households in the upper 7 percent (households with a net worth above $836,033) saw their net worth INCREASE by 28%. The remaining households in the lower 93% net worth dropped by 4 percent (to roughly $134,000).

Stated simply, affluent households typically own stocks and other financial holding that increased in value (since 2009) and less wealthy tend to have more of their assets in their homes which have not rebounded.

To read more go to: Pew Social Trends.

 

Tom Sirois

Great Barrington, MA