No one likes to think about what will happen when they pass away. What will happen to your home after your death? Will your children and any other dependents be provided for? Who will carry out your wishes?

While not the most glamorous side of financial planning, estate planning is vital to ensuring you leave behind the legacy you want — problem-free.

However, when it comes to estate planning, married couples often face unique challenges and opportunities. From managing jointly held assets to minimizing estate and income taxes, spouses must coordinate their plans to avoid unintended consequences — or surprises — down the line.

Ensuring both partners are on the same page, both legally and financially, can streamline the estate process, protect wealth and provide peace of mind for their heirs.

To offer deeper insights into how couples can best align their estate strategies, the financial experts of Kiplinger Advisor Collective highlight practical steps couples can take to ensure their estate plans are working in tandem, whether they’re newly married or decades into their partnership.

Include a spousal bypass trust
“One smart move is to include a spousal bypass trust in their estate plan. This trust allows one spouse to leave assets to the other without them being included in the surviving spouse’s taxable estate. Plus, it keeps the assets protected from potential creditors. This strategy balances financial security for the surviving spouse with tax efficiency, preserving more of the estate for heirs.” — Zain Jaffer, Zain Ventures

Prepare a revocable living trust
“One way married couples can ensure their estate plans work in tandem — especially for tax efficiency and joint asset management — is by setting up a revocable living trust. A well-structured trust allows couples to maintain control over their assets while they’re alive, seamlessly transfer wealth upon passing and take advantage of tax-saving strategies.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Leverage federal estate tax exemption
“Married couples can use a revocable living trust to manage joint assets and ensure seamless estate planning. By aligning their wills, beneficiary designations and gifting strategies, they can minimize estate taxes and avoid probate. Additionally, utilizing portability of the federal estate tax exemption allows the surviving spouse to maximize tax savings while preserving wealth for heirs.” — Greg Welborn, First Financial Consulting

Set up a family office for tax planning
“Married couples can ensure their estate plans align by setting up a family office to optimize tax planning. This centralizes management of joint assets, using tools like trusts and tax-deferred accounts to minimize estate taxes. Coordinating strategies, such as gifting or leveraging spousal exemptions, ensures efficient wealth transfer and reduces tax burdens.” — Dr. Clemen Chiang, Spiking

Conduct regular reviews with an attorney
“Regularly reviewing their estate plan with an attorney ensures alignment, protecting assets and securing their financial future. Married couples should also create a revocable living trust to streamline asset management, avoid probate and maximize tax benefits. Coordinating beneficiary designations and leveraging exemptions like the marital deduction helps minimize taxes.” — Stephen Nalley, Black Briar Advisors

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

In both my professional practice and personal conversations with friends, the challenges of caring for aging parents have become a frequent topic.

Balancing their needs with our own work, family and personal well-being can be a struggle. The time commitment required to address their financial, physical, social and emotional needs can be substantial.

Here are some strategies that can help reduce the effort and stress involved:

Proactive planning and collaboration

Organize a family meeting. Have an honest and open conversation with your parents and other family members. Review your parents’ current and future needs. Discuss everyone’s concerns and expectations.

Create a plan for how everyone can contribute most effectively. Establish group communication channels (like text, phone chain and email) to improve family involvement.

Understand your parents’ situation. Sitting down with your parents and reviewing their income, expenses and resources will provide crucial insights for future planning and decision-making.

Determine where your parents will live. Talk with your parents about their current and future living needs and preferences. Consider factors like safety, the need for current or future physical care and associated costs.

Having a budget and a well-thought-out plan can reduce everyone’s stress when it’s time to move.

Consult with parents’ advisers. Get advice from your parents’ trusted advisors, such as their financial advisor, estate planning attorney and certified public accountant (CPA).

Their expertise can provide valuable insights into navigating your parents' future living situation and economic landscape.

Healthcare and support systems

Review your parents’ health plan. Talk with your parents' doctors and explore the resources available through your parents’ health insurance. Many plans include access to social workers who can connect you with valuable support services, such as in-home care options.

Establish health care directives. Ensure your parents have clearly documented their health care wishes through a health care directive or living will. This will provide clarity and guidance when critical medical decisions must be made.

Collaborative care and personal well-being

Join forces with your siblings. Leverage the help and support of your siblings to create a shared plan where each sibling contributes in ways that align with their strengths and schedule.

Seek support outside of the family. Helping your parents can take a toll. Look for support groups or friends facing similar situations who can share experiences and coping strategies, helping to alleviate stress.

Lean into the support of your immediate family. Prioritize quality time with your spouse and kids. These moments of connection and relaxation can provide essential respite and emotional well-being during challenging times.

Maintain a positive attitude. Though there will be times when your patience is tested or you are not sure how you will get everything done, concentrate on the positive. Cherish the little moments, like watching a favorite old movie together, sitting in the sun or going for a walk.

Most of us will eventually find ourselves in the role of supporting our parents. By taking proactive steps and leveraging available resources, we can navigate this journey with less stress and create lasting, special memories.

Making the time to be part of your parents' lives when it counts the most can make all the effort you have put in worth it.

Related Content

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Private markets have long been the playground of institutional investors — endowments, pensions and ultra-high-net-worth families.

In the past, the barriers to entry for the typical individual investor have been enormous due to high minimum investment requirements, limited liquidity and complex fund structures. But today, that wall is coming down.

Thanks to the evolution of fund structures like interval funds, everyday investors and their advisors now have access to private equity, private credit, real estate and other less-liquid alternative strategies. The result? A more diversified portfolio, the potential for higher returns and greater resilience in volatile markets.

Let’s explore how interval funds work — and how they’re opening the doors to private market investing.

What are interval funds?

To begin, interval funds are a hybrid investment vehicle that combines features of both open-end mutual funds and closed-end funds. They are registered under the Investment Company Act of 1940, just like traditional mutual funds, and are regulated by the Securities and Exchange Commission (SEC).

Interval funds allow investors and their advisors the ability to explore strategies and asset classes with lower liquidity or higher complexity, often in private markets. But unlike mutual funds, they do not allow for daily redemptions.

Instead, they offer to repurchase a percentage of outstanding shares at set intervals — usually quarterly — at net asset value (NAV).

Why use interval funds to access private markets?

Private markets can offer attractive long-term return potential. That’s often due to an investment principle called the illiquidity premium, the idea that investors who are willing to accept less liquidity may be rewarded with higher returns over time.

As mentioned, historically, accessing private markets required large investment contributions and long lock-up periods (very patient capital) with high fees. Interval funds have changed the game for everyday investors interested in private equity. Here’s how:

Lower minimums. Investors can now access institutional-quality private investments without committing millions.

Simplified structure. Unlike private placements, interval funds don’t require complex subscription documents or long negotiations.

No performance fees (in some cases). Certain interval funds — particularly those investing in co-investments — may forgo performance fees, which are standard in private equity funds.

Built-in diversification. Investors can gain exposure to multiple sectors, such as private real estate, private credit or infrastructure — all in a single fund.

Key benefits of interval funds

Interval funds provide several benefits for long-term investors looking to diversify and stabilize their portfolios beyond access just to private markets.

Access to complex strategies. Fund managers can invest in less liquid, higher complexity investments that may offer greater return potential.

Reduced correlation. These funds tend to behave differently from stocks and bonds, which may lower overall portfolio volatility.

Opportunistic capital deployment. With a long-term focus, managers are better positioned to take advantage of dislocations in private markets.

Professional management. Like mutual funds, interval funds are actively managed and transparent, issuing 1099s for tax reporting​.

For investors looking to reduce public market exposure, or access the 17,000 large private companies and nearly 200,000 midsize private companies in the United States, interval funds can be a viable option.

What’s under the hood?

Many interval funds are built around one or more of the following strategies:

Private equity. Investing in privately held businesses, either directly or through funds

Private credit. Lending to businesses outside traditional banking systems, often at higher yields

Real assets. Exposure to real estate, infrastructure or farmland

Special situations. Co-investments, distressed assets or niche strategies

Fund strategies vary widely, and it’s critical to understand what types of private investments your fund is targeting. Equally important is due diligence. Before investing, make sure to review the fund’s prospectus, performance history, fee structure and redemption terms.

Understand the liquidity trade-off

Liquidity is both the strength and limitation of interval funds. On one hand, limited redemptions empower managers to hold private investments that aren't suitable for daily trading.

On the other hand, investors can only redeem a portion of their shares at predetermined intervals — typically 5% to 25% of the fund’s outstanding shares.

This means that interval funds are not a fit for short-term cash needs. They should be treated as long-term holdings, with redemption requests submitted during specified “windows.”

If too many investors request redemptions at once, allocations are made on a pro-rata basis, and not all requests may be fulfilled.

Final thoughts

Interval funds can be a powerful tool in the hands of disciplined investors. Interval funds are well-suited for investors who are comfortable with limited liquidity, looking for alternatives to public markets, seeking enhanced income or return potential and interested in accessing private markets but unwilling or unable to commit to traditional private equity lock-up periods.

They create accessibility to private markets, allowing more investors to tap into the growth, diversification and income potential that institutions have leveraged for decades.

If your current investment approach feels too dependent on public markets and you are interested in investing in the potential benefits of private equity (i.e., diversification, alignment of investor interests and historical superior performance), this may be the right time to explore how interval funds could help you build a more resilient, forward-thinking portfolio.

Related Content

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Retirement: It's that time when you should be able to kick back, relax and finally enjoy the fruits of your hard work. But let's be honest — one of the biggest worries retirees face is the rising cost of health care. Medical expenses aren’t slowing down, and if you’re not prepared, they can hit you like a ton of bricks.

Take David and Linda, for example. They're a couple in their early 60s who worked hard and saved well. They felt confident about their retirement plan — until health care costs started to feel like a dark cloud hanging over their heads. Sure, they knew Medicare would help, but what about all those gaps and extra costs no one really talks about?

The truth is, health care costs can sneak up on you. According to Fidelity Investments, a 65-year-old couple retiring today can expect to spend over $300,000 on their combined health care throughout retirement — and that doesn’t even include long-term care.

When David and Linda heard that number, they knew they had to get serious about planning.

They started by taking a closer look at their health. David had a history of high blood pressure, and Linda had been managing type 2 diabetes for years. On top of that, their family medical histories revealed more risks — heart disease for David and arthritis for Linda.

Recognizing these potential concerns gave them some clarity. If they wanted to protect their financial future, they needed to prepare for medical costs beyond the basics.

Looking at Medicare

Medicare seemed like the next big puzzle to solve. David dove into the research and quickly realized there was more to it than he expected.

Medicare Part A would cover hospital stays, while Part B handled outpatient services and preventive care. Part D was crucial, too, helping to manage the cost of prescription drugs.

But the gaps — those hidden expenses that Medicare doesn’t cover — were still concerning. After weighing their options, David and Linda chose a Medigap policy to help fill those gaps. It wasn’t the easiest decision, but knowing their out-of-pocket costs would be manageable helped give them peace of mind.

Even with that coverage, they knew surprises could still pop up. So, they decided to build a dedicated health care fund. Thankfully, they had been contributing to a health savings account (HSA) for years, giving them a nice tax-free pool of money to use for qualified medical expenses.

To stay ahead of inflation and rising health care costs, they shifted part of their investment portfolio toward growth-oriented assets as well.

One concern that kept nagging at them was the cost of long-term care. A close family friend had recently faced staggering nursing home expenses, and David and Linda didn’t want to end up in the same situation.

After exploring their options, they chose a hybrid life insurance policy with a long-term care rider. This gave them the reassurance that their savings wouldn’t be wiped out if they needed extended care.

Considering prescription drug costs

Prescription drug costs were another area they tackled. They learned that switching to generic medications whenever possible can save a bundle.

They also started using tools like GoodRx to compare prices and make sure they were getting the best deals.

To stay on top of things, they reviewed their Medicare Part D plan every year to ensure their medications were still covered in the most cost-effective way.

Beyond financial planning, David and Linda realized they needed to prioritize their health to avoid bigger medical costs later on. They committed to regular checkups, screenings and vaccinations to catch potential issues early.

They also made lifestyle changes — morning walks, healthier meals and more active social lives. Surprisingly, these changes didn’t just improve their health — they also deepened their connection with each other and their community.

Feeling more confident but still wanting to make sure everything was buttoned up, David and Linda met with their financial adviser. Together, they mapped out a tax-efficient withdrawal strategy, aligned their retirement income with projected health care costs and made smart decisions about when to take Social Security.

With those final pieces in place, they knew they were ready.

Planning pays off

In the end, their preparation paid off. David and Linda entered retirement with confidence instead of anxiety. With a solid plan in place to handle health care costs, they were free to focus on what truly mattered to them: spending time with their family, traveling and embracing the retirement they had always dreamed of.

Planning for health care in retirement may seem overwhelming, but taking the time to prepare can offer incredible peace of mind. By assessing your health care needs, maximizing your Medicare benefits and building a dedicated savings strategy, you can better ensure your retirement is both secure and enjoyable.

The key is to start early, stay informed and remain proactive in managing your health care expenses.

Related Content

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Trying to dig yourself out from underneath a growing pile of high-interest debt can often feel like you’re working hard to defeat something that will never truly end. Once you shovel out a nicely sized hole, a high interest rate fills it right back in, adding a little extra on the top.

Add trying to save money toward your future goals, and you have what seems like an impossible task to achieve. However, it’s a real challenge many people are facing — and one that is possible to overcome.

Whether it's student loans, credit cards or personal loans, paying down debt without sacrificing your long-term financial goals requires a smart, strategic approach.

Here, financial industry experts from Kiplinger Advisor Collective offer tips for how to best navigate this all-too-common obstacle, as well as how to build momentum, reduce financial stress and make meaningful progress without putting your future on pause.

Boost your income
“One key tip for paying down high-interest debt while saving is to boost your income beyond the interest payments. Use skills or side hustles to generate extra cash, directing it to debt first and then savings. This works because exceeding the interest rate accelerates debt reduction, freeing up funds faster for future goals without sacrificing savings momentum.” — Dr. Clemen Chiang, Spiking

Try the 'debt snowball' method
“Use a debt repayment strategy like the debt snowball method: Pay minimums on all debts, but throw extra cash at the smallest balance first. Once that balance is paid off, roll that amount into the next debt. Meanwhile, contribute enough to get a 401(k) match and build a small emergency fund. This keeps you motivated, eliminates high-interest debt and ensures you're still growing wealth!” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Lower your interest rates
“One powerful strategy is to reduce your interest rates. Refinancing a mortgage from 7% to 5% or transferring credit card debt to a lower-rate card saves money instantly and accelerates how fast you attack the principal. It’s not just about paying — it's about paying smart. Lower rates create a margin to invest and build for your future while still knocking out debt.” — Justin Donald, Lifestyle Investor

Follow the 50/30/20 rule
“Implement the 50/30/20 rule: Allocate 50% of your income to needs, 30% to wants and 20% to debt repayment and savings. If possible, direct financial windfalls (for example, bonuses and tax refunds) toward high-interest debt while maintaining steady retirement contributions. This balances debt reduction with future financial security, preventing lost investment growth.” — Greg Welborn, First Financial Consulting

Ensure you're paying down your actual balance
“Use a balance transfer credit card to avoid paying interest for up to 21 months. This way, your entire monthly payment goes toward reducing your actual balance, and nothing is wasted on interest fees, so you pay debt down faster. Compare balance transfer cards to find the option with the longest no-interest term that meets your needs and credit rating.” — Andrea Woroch, Woroch Media Inc. / Andrea Woroch

Leverage the 'avalanche' method and automation
“Use the debt avalanche method by listing your debts from the highest to lowest interest rate and then attacking the most expensive one with every extra dollar you can spare while making minimum payments on the rest. At the same time, automate putting a small, consistent amount into a savings or investment account. This way, you’re not just reacting to financial pressure but also taking proactive steps toward the future.” — Zain Jaffer, Zain Ventures

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

In my prior Kiplinger article, I explored how longer lifespans may reshape life-planning decisions. But beyond longevity itself, the real question is: How do we create a meaningful life while ensuring our financial resources support us throughout the journey?

This isn't just about outliving your money — it’s about living well at every stage. Traditional retirement models fall short in this area, relying on outdated assumptions that no longer fit modern financial realities.

Below, we’ll explore an approach that offers solutions for those navigating the intersection of longevity, fulfillment and financial security.

The problem: Outdated retirement planning

Most retirement planning models assume a 30-year timeline and a fixed-rate withdrawal strategy. Yet, today’s retirees live longer, tend to spend unevenly and face unpredictable risks. These outdated approaches can lead to either overspending too soon or under-living out of fear.

Instead of relying on static models, we need a strategy that adapts to changing spending patterns, secures a sustainable income and provides flexibility for the unknown.

Rethinking 'enough'

One of the biggest challenges is determining how much is “enough.” The reality: It depends on what you spend.

The less your lifestyle demands, the less you need to save — and the more flexibility you gain over how and when to retire.

A common benchmark is the 4% rule, which suggests withdrawing 4% annually from a portfolio. This means a retiree wanting $80,000 per year needs roughly $2 million saved. Another rule of thumb, the 10x Salary Rule, suggests accumulating 10 times your income by retirement.

While useful starting points, these formulas lack customization. Future spending needs, market conditions and the tax treatment of assets all impact what’s truly “enough.”

The problem with the 4% rule

While widely used, the 4% rule is based on historical backtesting, not real-world adaptability. It assumes:

• Market history will repeat itself
• Retirees have predictable, static spending
• Withdrawals remain fixed, even in a down market

These assumptions don’t reflect how people actually spend in retirement. A more robust strategy adapts to market performance, spending needs and personal circumstances.

A better approach: Adaptive retirement planning

A superior framework integrates these four steps:

• Securing a baseline income
• Implementing a dynamic withdrawal strategy
• Smart asset allocation
• Maintaining spending buffers

Step No. 1: Secure a minimum income floor

Necessities are necessities. As such, it's important to establish a minimum income floor to cover the essentials — housing, utilities, transportation, food and health care.

To calculate this, add core expenses and subtract guaranteed income sources like Social Security and pensions. The remaining gap must be filled with portfolio withdrawals or secure income sources.

Reliable income options:

Bond ladders. By structuring a ladder with target maturity bond funds or individual bonds, retirees can align maturities with future expenses, ensuring predictable income without relying on market timing.

Low-fee annuities. While many annuities are costly, low-fee options do exist and can be useful for longevity protection. The downside? Limited inflation adjustments.

My observation is that many companies cap their inflation adjustment riders at 3% per year. From 1914 to 2024, inflation averaged 3.16% per year. However, in June 2022, inflation peaked at 9.1%. This means that even inflation-adjusted annuities are imperfect as they may fail to keep pace with real costs over time.

Step No. 2: Dynamic withdrawal strategy

Retirement spending follows the “retirement spending smile.”

Just as a smile curves upward at both ends with a dip in the middle, retirement expenses typically follow the same pattern.

Expenses tend to be highest in the early active years (“go-go years”), decrease during the slower middle years (“slow-go years”) and rise again in later years (“no-go years”) due to health care costs.

Instead of rigidly withdrawing the same amount each year, spending should be front-loaded when retirees are healthiest and most active. Guardrails can adjust withdrawals based on portfolio performance:

• If markets perform well, spending increases
• If markets decline, spending temporarily adjusts to protect long-term wealth

This approach ensures that retirees enjoy their early years without unnecessary frugality while also maintaining flexibility for later needs.

Step No. 3: Optimize asset management

Effective asset allocation aligns investments with time horizons:

• Years 0-10. Maintain seven to 10 years of expected withdrawals in safer assets (bonds, cash reserves, annuities) to mitigate sequence risk.
• Years 10-plus. Equities should be earmarked for longer-term cash flow needs, allowing time to ride out market fluctuations.

Other key considerations:

• Roth conversions. Depending on a household's income and portfolio composition, converting pre-tax assets to Roth IRAs can potentially reduce long-term tax burdens.
• Inflation protection. Public equities and real estate have historically outpaced inflation, making them effective hedges against rising costs.
• Minimizing fees. Every unnecessary fee erodes wealth. Prioritize low-cost index funds and scrutinize adviser fees to ensure value exceeds the costs.

Step No. 4: Maintain spending buffers

A well-designed plan includes liquidity reserves to absorb unexpected expenses without selling assets at a loss.

• Six- to 12-month cash reserve. Covers unforeseen expenses, reducing the need to liquidate investments in down markets
• Home equity line of credit. Serves as an additional buffer to avoid selling assets when markets decline

Delaying Social Security: A longevity hedge

One of the most effective ways to hedge against outliving your money is delaying Social Security benefits.

• Each year you delay past full retirement age (FRA), benefits grow by 8%.
• Unlike annuities with capped inflation riders, Social Security provides cost-of-living adjustments (COLAs) tied to inflation.
• In my experience, the break-even point for delaying is typically between ages 78 and 84, making it an attractive strategy for those in good health.

For married couples, delaying Social Security is especially beneficial for the higher-earning spouse, as the surviving spouse inherits the higher benefit upon death.

For a married, non-smoking couple both age 65, there’s now a 15% chance that at least one of them lives to see age 100.

Final thoughts

A well-structured financial plan isn’t just about preserving wealth — it’s about living a rich, fulfilling life.

By integrating secure income sources, dynamic withdrawals, optimized asset allocation and spending buffers, retirees can more confidently navigate longer lives.

True immortality remains science fiction, but a well-designed financial plan helps ensure your wealth lasts at least as long as you do.

Related Content

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

For those who grew up financially insecure, confidently having short-term needs covered might be your ultimate goal. If you generate enough income to easily afford your home and household necessities, having extra money left over is the cherry on top.

However, while some view money as a means to pay for necessities, others have a different perspective. By planning ahead and looking toward long-term financial goals, it’s possible to create income in a way that will support your future even if your vision for the future changes as the years go by.

Having the ability to pivot without worrying about financial support is where financial security becomes financial freedom.

Financial security is being 'in a good place'

Financial security is nothing to sneer at. It’s extremely comforting to have the peace of mind that comes with not worrying about whether there will be enough money at the end of the pay period to afford rent, food or utilities.

In short, financial security typically means that you are confident in your finances for immediate needs and the short-term future.

Some people are able to become financially secure not by pulling in a large paycheck but rather through careful planning and budgeting. Those with modest incomes and mindful planning might feel financially secure because they have action plans for potential hardships, such as job loss and health incidents.

However, financial security can remain elusive even for high-wage earners if one has poor money habits. Overspending can quickly drain resources. Excess funds sitting in non-interest-bearing accounts will only depreciate over time with inflation. Not keeping an emergency fund can require high-interest loans to cover necessities when hardships occur.

It’s very difficult to obtain financial security if you don’t have a clear picture of your needs and spending limits. If you aren’t tracking milestones for savings and retirement considerations, you’re unlikely to have confidence in your present financial habits.

Financial freedom is flexibility

To truly gain financial freedom, you should have enough funds to support yourself regardless of where you choose to live or how you spend your time. This doesn’t necessarily mean that those with financial freedom always have more money than those who only have financial security.

For example, a thoracic surgeon working full time in the southern region of the United States could realistically pull in $900,000 or more per year.

Unless that person has very irresponsible spending habits, it’s likely that $900,000 per year is enough for financial security. But to keep that security, the surgeon needs to continue doing a specific job at a specific location.

In contrast, let’s say there’s a woman in her late 40s who made savvy real estate investments throughout her 20s and 30s and is now able to generate a net real estate profit of $110,000 per year.

If she has chosen properties in a variety of locations with enough portfolio diversity to weather market fluctuations, her real estate should be a stable source of income long into the future.

The best part in the second example is that the real estate investor has far greater flexibility than the surgeon due to the passive nature of her income generation. The surgeon needs to be at a specific location on specific days to generate income. Assuming no other income streams have been established, the surgeon is required to work and/or reside near areas with surgery centers.

So when it comes to financial freedom, more money isn’t always better. It’s important to have enough money to support your present and future in addition to the availability of that money regardless of your location or daily routine.

Thrive instead of survive

While money certainly isn’t everything a person needs to be happy, it has a couple of very important functions.

Being financially secure means that your money gives you the ability to survive and take care of your needs. Being financially free means that your money is sufficient and flexible enough to support the life you want to live.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

With rising child care costs, the choice to homeschool and the desire to spend more quality time with their children all key factors in their decisions, many parents are choosing to leave the workforce to become full-time parents.

In fact, around 25% of mothers identified as stay-at-home parents in a 2023 Motherly survey (and about one in five stay-at-home parents are dads, according to the Pew Research Center). This was a sharp uptick from previous years, though inflation and increased costs of living may be forcing parents back into the workforce sooner than they’d hoped.

While the decision to stay home with one’s children is not merely a financial one, finances play a huge role in a couple’s ability to make this choice, especially if they’re looking to make this change a long-term or even permanent one.

The health of their finances now and what they may or may not be in the future are vital factors to consider if they want to make the right decision for their family.

Because this decision is not one to make lightly, it may be wise for couples to ask themselves a number of questions to help guide them through the decision-making process and give them greater confidence in their choice.

Here, five financial experts from Kiplinger Advisor Collective outline some of the most important questions you and your partner should ask before stepping into full-time parenting and the potential effects choosing to do so could have on your financial future.

How can we create passive income?
“As a couple, ask yourselves this question: ‘How can we create passive income to replace lost income and gain time freedom?’ This question changed everything for me. It shifts the focus from sacrifice to strategy. This way, you’re not just giving up a paycheck — you’re building a life where your money works for you and your family, and not the other way around.” — Justin Donald, Lifestyle Investor

Can we support our core value on one income?
“Before someone leaves the workforce to become a full-time parent, couples should ask: ‘Can we sustain our family’s core value — raising a happy, supported child — on one income?’ This matters because financial strain can undermine the goal of a nurturing home. Assessing expenses, savings and long-term goals ensures the decision aligns with their priority of family well-being over just making ends meet.” — Dr. Clemen Chiang, Spiking

Are we prepared for the ripple effects?
“A question people tend to overlook when considering leaving the workforce to become a full-time parent is, ‘Are we prepared for the ripple effects on our financial future?’ Yes, of course, focus on today’s lost income. However, it's also necessary to be conscious of possible reduced retirement savings, career stagnation and reentry challenges that may compound over time.” — Zain Jaffer, Zain Ventures

Will we still be able to save for the future?
“Ask, ‘Can we sustain our lifestyle on one income while saving for the future?’ This question ensures you assess your budget, emergency fund and long-term goals. Consider expenses, health care and retirement contributions. Planning ahead prevents financial strain and allows for a smoother transition, ensuring both immediate stability and future security for your family.” — Stephen Nalley, Black Briar Advisors

Do we have an emergency fund?
“‘Do we have an emergency fund to cover at least three to six months of expenses?’ is a key question to ask. Going down to one income increases financial risk. A strong emergency fund acts as a safety net for unexpected costs like medical bills, home repairs or job loss. Having this cushion ensures stability and reduces stress, making the transition to a single-income household smoother and more secure.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

For those new to blockchain and crypto, you may have heard the term decentralized finance, or DeFi for short. What exactly does DeFi mean, and what’s driving its rise? A little context on both the business and technology side will help to explain it.

An alternative to 'trusted third parties'

If you want to pay someone for an item or service and that person is in front of you, you can just take money from your wallet and pay the other person directly. In technical terms, this is a “peer-to-peer” payment. There is no other person involved. Just the two of you.

On the other hand, if you and the other person (or party) are some distance away, or even halfway across the globe, in general, you want a trusted third party such as a bank, wire service or retailer (e.g., Amazon) to handle it for you.

However, some computer scientists have been working on ways to go back to a peer-to-peer payment or exchange method, where it would feel like you were transacting directly with another person without that “trusted third party.”

These initiatives are driven by the prevalence of bank frauds, theft and scams or even government intervention (e.g., debanking). These computer scientists wanted a system that no single “trusted” party controls, but is controlled by a global community at large.

In 2008, someone published a blueprint — a white paper for a decentralized cryptocurrency on the blockchain. The author, writing under the pseudonym Satoshi Nakamoto, published the white paper for Bitcoin. (Note: I am currently not an investor in nor own any of the blockchains and crypto mentioned in this article.)

Although bitcoin (and succeeding cryptocurrencies) solve the problem of a trustless peer-to-peer way to send value over the Internet without requiring a bank or wire service, blockchain’s use cases don’t stop there.

After all, finance is not just about sending payments to and from parties.

Enter DeFi

The summer of 2020 is often called “DeFi Summer.” Because of the pandemic, applications such as Uniswap and Aave suddenly garnered more users and allowed other aspects of finance, not just value remittance (such as what bitcoin does), to be transacted on the blockchain (on-chain).

These applications run on smart contracts, which initially ran only on another blockchain, ethereum, but have since spread to most new blockchains such as Solana and others.

DeFi allows users to transact with these smart contract decentralized applications (apps) without the need for banks.

They also are an alternative to third-party centralized crypto exchanges, such as Coinbase and Binance, which although they offer good service, especially to newcomers, are not the ethos of decentralization if you ask the hardcore crypto enthusiasts.

DeFi is a catch-all term that encompasses everything from token swaps (e.g., ethereum ERC20 tokens); intra-chain bridges (e.g., from ethereum to Solana and vice versa); yield and liquidity farming, which is like earning interest from a time deposit; and so on.

I cannot discuss all the possible applications that DeFi encompasses here, especially since more are in development.

The pushback

When you deal with a bank, you normally deal with a layer of people such as tellers, bank managers, customer service agents and the like. Even if you do electronic banking, this is simply automating part of your bank account. There are still people who work in the bank who handle your money.

DeFi is different. Basically in DeFi applications, bankers are replaced with software smart contracts running on blockchains. Because these are software smart contracts, there is not much room (if at all) for human discretion.

If you have deposited the payment, the smart contract should remit that payment to an intended recipient as defined in the code. Basically, if one party has satisfied the requirement, the transaction should be processed.

Once the transacting parties have done the required deposit, payment or task, then the smart contract ensures that this transaction proceeds, with no “trusted human third party” to exercise discretion on whether to stop it or not.

Of course, this technology does not win fans in the traditional banking and finance space.

For example, the European Central Bank (ECB) opposes many of Trump’s pro-crypto policies. Instead, they are advocating for central bank-controlled digital currencies (CBDCs).

Although this would use blockchain technology, it is important to note that their vision of blockchain-based finance is that they would centrally control all the aspects of the network, so ownership would not be decentralized.

The takeaway

DeFi is probably the future of blockchain and crypto. It allows for peer-to-peer financial transactions even at long distances, not encumbered by bank and government restrictions to some extent, thus regaining some of our financial freedom and privacy.

We pay someone in cash when we are face-to-face with them without any other party involved; DeFi advocates want the same for sight-unseen transactions, because the “trusted third parties” who are supposed to ensure these transactions happen smoothly have not always lived up to that task.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

As an investor, I’ve learned that making money isn’t just about buying low and selling high — it’s also about understanding the financial consequences of every move. One of the biggest pitfalls investors face is capital gains taxes.

Failing to plan for taxes can eat into your profits and leave you with far less than expected when you finally cash in on an investment.

Over the years, I’ve developed a deep respect for tax planning, and I want to share what I’ve learned about capital gains taxes — what they are, how they work and the strategies you can use to minimize them.

Whether you’re selling stocks, real estate or a business, understanding how capital gains taxes affect your bottom line is crucial to maximizing your profits.

What are capital gains taxes?

A capital gain occurs when you sell an asset for more than you paid for it. The government, of course, wants a piece of those profits, which is where capital gains taxes come into play. These taxes are imposed when you sell assets like:

• Stocks and bonds
• Real estate (except your primary residence, in some cases)
• Businesses
• Cryptocurrency
• Other investments like collectibles and artwork

There are two types of capital gains:

Short-term capital gains. If you sell an asset you’ve held for one year or less, your profit is taxed at your ordinary income tax rate (which can be as high as 37% for high earners).

Long-term capital gains. If you’ve held the asset for more than a year, the gain is taxed at lower, preferential rates — either 0%, 15% or 20%, depending on your income level.

The difference between short-term and long-term rates is significant. If I sell an investment too quickly, I might lose thousands of dollars in extra taxes that could have been avoided simply by holding on to the asset longer.

Key strategies to minimize capital gains taxes

After years of investing and selling assets, I’ve developed a few key strategies to help reduce capital gains taxes and keep more of my money where it belongs.

1. Hold investments for more than a year

The easiest way to minimize capital gains taxes is to hold on to investments for more than 12 months. This qualifies me for long-term capital gains tax rates, which are much lower than short-term rates.

Before selling an investment, I always ask myself: Can I afford to hold this for a few more months to save on taxes? Often, the answer is yes.

2. Use tax-loss harvesting

Tax-loss harvesting is one of my favorite strategies for reducing my tax burden. Here’s how it works:

• If I have stocks or assets that have lost value, I can sell them at a loss to offset my capital gains.
• If my losses exceed my gains, I can deduct up to $3,000 from my taxable income per year and carry over additional losses into future years.

For example, if I have $50,000 in capital gains but also $20,000 in losses, I pay taxes on only $30,000 instead of the full amount. This strategy can be a game changer for active investors.

3. Take advantage of the primary residence exclusion

For those selling real estate, there’s a powerful exemption available. If I’ve lived in my home for at least two of the last five years, I can exclude up to $250,000 ($500,000 for married couples) in capital gains from taxes when selling my primary residence.

This is one of the best tax breaks available, and I always factor it into my selling decisions when dealing with real estate.

4. Use 1031 exchanges for real estate

If I’m selling an investment property but want to reinvest in another, I can defer capital gains taxes using a 1031 exchange.

This IRS rule allows me to roll the profits into a similar property without paying taxes immediately. The key is that the new property must be of equal or greater value and the transaction must follow strict timelines.

This strategy has allowed me to grow my real estate portfolio without taking a major tax hit.

5. Gift or inherit assets for lower tax impact

Another way to reduce capital gains taxes is by gifting investments or passing them down through inheritance.

If I gift stocks or assets to family members in lower tax brackets, they might pay little to no capital gains taxes. If assets are inherited, the cost basis is “stepped up” to the market value at the time of death, meaning heirs don’t pay taxes on past gains.

This is a strategy I consider when planning generational wealth transfer.

6. Consider selling in retirement when income is lower

Since capital gains tax rates are tied to my income level, I plan my sales around lower-income years whenever possible.

In retirement, my income might be lower, meaning I could qualify for the 0% or 15% tax bracket instead of 20%. This means waiting to sell investments during retirement can save me thousands in taxes.

Why smart tax planning matters

Many investors focus only on making money but ignore tax consequences. I’ve learned that understanding capital gains taxes is just as important as picking the right investments.

Poor planning can result in unnecessary tax bills, while smart strategies can preserve more of my wealth.

Before selling any asset, I always ask myself:

• Is this the right time to sell based on tax implications?
• Can I hold this investment longer to qualify for lower tax rates?
• Are there losses I can use to offset my gains?
• Is there a way to reinvest without triggering a tax event?

By thinking strategically, I’ve been able to keep more of my profits, reinvest wisely and grow my portfolio faster.

Final thoughts

Capital gains taxes are an unavoidable part of investing, but they don’t have to take a huge bite out of your profits.

By understanding the tax code and using smart planning strategies, you can legally minimize your tax burden and keep more of what you earn.

Related Content

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Artificial intelligence (AI) has changed the face of modern finance, bringing the efficiency and security of intuitive decision-making to the business sector.

The use of AI allows various financial institutions to detect real-time fraud, greatly reducing losses and protecting consumers. Through machine learning from AI, massive datasets relating to the stock market are assessed in algorithmic trading to detect real-time trade patterns and execute trades.

Additionally, AI deals with a range of personalized services focusing on financial counseling for consumers and helping them build better money management.

The fundamental transformation, however, comes from the many advances in AI in risk management. There has been an extra push for these institutions to determine borrower creditworthiness, predict cash flow changes and optimize portfolio management; machine learning analyzes vast datasets at a lightning-fast speed, enabling more accurate reasoning and leveraging greater risk management capability with less human error.

These combined tools in finance serve to raise business returns and create a seamless customer-investor experience.

Yet AI finance does present some challenges. The worldwide concern regarding transparency and fairness in AI-based finance institutions springs from bad experiences with issues like data privacy, algorithmic bias and a shifting regulatory ecosystem.

Together, we will identify machine learning applications in finance and discuss both the radical transformation potential and accompanying problems. Controlling machine learning in a finance environment requires stakeholders' commitment to creating a strong ethical foundation.

Key applications of machine learning in finance

Machine learning is changing the face of finance by automating complex processes, increasing security and allowing better decision-making.

Financial institutions can use AI for fraud detection, optimization of trading strategies, personalized customer experience and improved risk management. These technologies enable a much faster and more precise analysis of vast volumes of data, allowing businesses and individuals to make smarter decisions with their funds.

The usefulness of machine learning has mass potential, from real-time fraud detection to AI-powered investment strategies.

Many of these innovations can entirely change how banks, investors and consumers interact with financial services. Some of the highlights in the following sections explain how AI is making an impact and transforming industries through machine learning.

1. Monitoring financial fraud

Financial fraud remains an increasing challenge, but machine learning has broken it down into a much simpler task nowadays. Helping financial institutions detect threats through real-time analysis of transaction patterns allows them in many cases to tap into suspicious activities before they blow up into larger issues.

By recognizing unspecified changes in an individual’s spending behavior, machine learning can help banks and processors reduce risks without inconveniencing the customer. The threat-monitoring process is ongoing, wherein the system continuously learns with each transaction, making it much more efficient over time.

2. Algorithmic trading as an investment hack

Whether dealing with profit or loss, milliseconds can mean the difference between making or breaking a deal in the world of investing. Algorithmic trading primarily relies on AI-driven models to analyze a lump sum of market data, identify trends and execute trades at light speed.

Some new trading platforms help users automate their cryptocurrency trading with customizable, rule-based strategies. This allows for intuitive trading that is less intimidating for the individual newly introduced to trading.

The algorithms work differently than human traders, as they work in harmony to analyze multiple factors at the same time. Thus, emotional or impulsive decision-making is minimized while efficiency and performance are maximized.

Be it high-frequency trading or long-term portfolio optimization, machine learning can allow investors to spot opportunities inside the market and seize them with more precision.

3. Customization in the finance sector

The customer experience has also experienced an AI-driven makeover in the banking sector. Chatbots respond to inquiries and solve problems around the clock, powered by natural language processing.

Personalized financial advice, based on a user’s spending habits and goals, helps individuals make smarter money decisions.

Credit scoring has also become more sophisticated, with AI factoring various financial behaviors beyond traditional credit history and reaching a fairer assessment for borrowers.

Companies no longer have to rely solely on an individual’s credit score, which myriad outside factors can often influence; organizations like mine, whose mission is to bring people’s financial dreams to fruition, can extend their resources to a more diverse set of customers with the help of machine learning.

Challenges for consideration

Applying machine learning in finance in several respects carries quite a few challenges. These include data privacy and security issues, which remain the primary concern requiring financial institutions to comply with guidelines like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

AI models are only as good as the data on which they have been trained. If pre-existing biases live in the database, the outcomes will be unfair.

Financial institutions must proactively work on ridding themselves of those biases to provide ethical and equity-based decision-making, especially with regard to lending and credit scoring.

Thus, companies must stay a step ahead in the constantly changing legal milieu. Innovations propelled by AI will dominate the future of the financial sector.

Emerging technologies, including explainable AI and quantum computing, hold the potential to transform and ultimately improve risk fraud detection and trading strategies.

However, a recalibrated sense of responsibility must be undertaken to provide services with transparency, accountability and simplicity. It’s imperative that customers feel as though AI-powered tools are not replacing traditional customer service but rather improving it.

With machine learning on the rise as a competitive tool, organizations must learn to wield this power with discernment.

The financial sector uses machine learning to help detect fraud and for portfolio management, but it still puts money into responsible AI projects to mitigate bias and regulatory concerns.

Many companies have done — and must continue to do — a lot of internal work in transforming their systems to offer finance-oriented efficiency, security and decision-making, working hard to improve their core values and offer their clients the best possible customer service.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

It’s no secret that most people would like to make more money. To be able to earn more, save more, give more and spend more is a dream that can often feel out of reach for those who don’t currently have the means to accomplish these goals.

What does feel like a secret, however, is how those who are building wealth successfully are doing it so well.

How is it that the wealthy seem to have it all figured out? What information do they have access to that others don’t? According to the financial experts of Kiplinger Advisor Collective, it’s really no secret at all — and it doesn’t have to be that difficult to start.

By building habits like saving and investing consistently and maintaining the right mindset, you too can build wealth that can help you achieve your goals and give you peace of mind for the future. Read on to discover seven steps you can take today to get started.

Avoiding credit card interest
“Buying stuff you don't need and carrying a balance on a credit card will keep you from building wealth. Use a balance transfer card to wipe away interest fees so you can pay off debt faster. Then, start investing the money you were paying on your credit card toward income-producing assets such as dividend stocks, real estate investment trusts (REITs) or peer-to-peer lending platforms.” — Andrea Woroch, Woroch Media Inc. / Andrea Woroch

Making long-term investments
“The best-kept secret to building wealth is consistency in disciplined investing — regularly saving and investing in diversified, long-term assets like index funds or real estate. Most people don’t do this because they chase quick gains or struggle with delayed gratification. True wealth grows over decades, but many seek immediate results, missing out on the power of compound growth.” — Greg Welborn, First Financial Consulting

Owning income-producing assets
“Too many people trade time for money instead of buying back their time. The wealthy invest in things that make money while they sleep — businesses, real estate, stocks. The problem? Most people spend every dollar they earn instead of putting money to work. Shift your mindset: Buy assets, not just liabilities, and let your money start making money for you.” — Justin Brock, Bobby Brock Insurance

Saving consistently
“Saving a small amount each year can lead to the accumulation of significant assets. Investing $2,000 a year creates a nest egg of more than $200,000 at the end of 30 years, assuming stocks return 8% per year over that time.” — Daniel Kern, Nixon Peabody Trust Company

Sticking to what you know
“I've worked with wealth managers, but I find that the best way to build wealth is to simply be patient and invest in things you understand. Don't go after fads. Real estate has its advantages, but if interest rates remain high and rents fall, it may not be the golden egg people think it is. Stocks have their issues, too. Diversification is key, but only within limits, else you won't know what works.” — Zain Jaffer, Zain Ventures

Leveraging the right accounts
“Be certain to take advantage of dollar-cost averaging and diversification in tax-free accounts, like Roth IRAs and Roth accounts in employer-sponsored retirement plans. But the best-kept secret is consistency and patience.” — Marguerita Cheng, Blue Ocean Global Wealth

Keeping to a steady plan
“The secret? Consistency over time. Wealth isn’t built overnight — it’s daily habits, smart investing and patience. I’ve seen people chase trends, but those who stick to a steady plan always win. Why don’t more people do it? Because slow growth isn’t exciting. But the ones who stay the course wake up one day financially free, while others are still chasing shortcuts.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

The recent wave of federal layoffs has cast a spotlight on the vulnerability of even seemingly secure employment. For those affected by job loss, the initial shock can be overwhelming, triggering a cascade of anxieties related to financial stability, career trajectory and overall well-being.

However, amid this uncertainty lies an opportunity for strategic reassessment and personal growth.

By adopting a proactive and methodical approach, individuals can transform this challenging experience into a springboard for a more fulfilling future.

Assess your financial situation

Successfully navigating job loss requires a thorough understanding of your financial situation. Conduct a detailed inventory of all assets, including savings accounts, investments and any readily liquid assets. This provides a clear picture of your available resources and guides your immediate financial strategy.

Next, implement a comprehensive budget review. Scrutinize your spending habits, distinguishing between essential expenses and discretionary spending.

Prioritize necessities like housing, food and health care, while identifying areas where cuts can be made.

Consider temporarily suspending subscriptions, reducing entertainment expenses and exploring cost-effective alternatives for everyday needs.

Crucially, defer any major financial commitments during this period of transition. Avoid taking on new loans, making significant purchases or entering into long-term contracts.

Maintaining financial flexibility is paramount until a stable income stream is reestablished.

Evaluate your career path

Job loss necessitates a thorough reevaluation of your career trajectory. Begin by updating your résumé to reflect your most recent accomplishments and acquired skills. Emphasize recent achievements and tailor your résumé to align with the specific requirements of your target industries.

Consider engaging a professional résumé writer to enhance its impact and better ensure it stands out in a competitive job market.

Explore alternative career paths, including consulting opportunities that leverage your expertise. Consulting can provide interim income, maintain professional engagement and expand your network.

Actively network within your industry, reaching out to former colleagues, industry contacts and professional organizations. Inform them of your availability and seek potential leads.

Leverage online platforms like LinkedIn to expand your professional network and explore job opportunities.

Dedicate focused time to your job search. Establish a structured schedule, allocating specific hours each day for résumé submissions, networking and interview preparation. Treat your job search as a full-time endeavor.

Consider retirement options

For those nearing retirement age, job loss presents an opportunity to reassess retirement plans. Consult with a Certified Financial Planner to explore viable retirement scenarios.

Analyze your retirement readiness, considering factors such as savings, investments and potential income streams.

Explore alternative retirement strategies, such as phased retirement or part-time employment, to ensure long-term financial security. Consider the implications of early retirement and weigh the potential benefits against the financial considerations.

Stay positive

Maintaining a positive outlook is essential during this challenging period. Acknowledge the emotional impact of job loss, but avoid dwelling on negativity. Recognize this as a temporary setback and a catalyst for personal growth.

Seek support from trusted friends, family or professional counselors. Share your concerns and anxieties, and leverage their support to navigate this transition. Engage in activities that promote well-being, such as exercise, meditation or spending time in nature.

Embrace the opportunity for self-reflection and personal development. Use this time to explore new interests, acquire new skills and pursue personal goals.

By maintaining a positive mindset and focusing on personal growth, individuals can emerge from this experience stronger and more resilient.

Job loss, while undoubtedly challenging, can serve as a catalyst for positive change. By prioritizing financial stability, actively pursuing new career avenues and cultivating a resilient mindset, individuals can successfully navigate this transition and build a more fulfilling future.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

As the deadline for completing taxes looms ever closer, taxpayers across the country are scrambling to gather necessary forms and documents, ensure their numbers are correct and get this burdensome task off their to-do list.

However, according to the tax and financial experts of Kiplinger Advisor Collective, preparing your taxes doesn’t need to be the dreaded task many make it out to be. In fact, it can be a great time to check in on the health of your finances and ensure you’re taking advantage of all the benefits and accounts that are available to you.

If tax time is adding unnecessary stress to your life each year, consider these common mistakes people make when preparing their taxes and what can be done to avoid them. A few simple steps may be all you need to ease your stress and feel good about your finances this year.

Ignoring beneficial accounts
“A common mistake could be ignoring accounts that offer tax benefits, such as HSAs, FSAs and retirement accounts that depreciate taxable revenue. A lot of people think it is too complicated to use these benefits. The solution is to look over the limits every year and intelligently take advantage of employer-offered benefits to reduce taxes while ensuring greater economic security for the future.” — Jabin Geevarghese George, Tata Consultancy Services Ltd.

Owing unnecessary penalties and interest
“Often, people owe unnecessary penalties and interest due to not doing proactive tax and income planning to determine if withholdings will satisfy their tax liability. Generally, this happens when overall tax withholdings are off, Roth conversions were executed during the tax year or another income source wasn't accounted for. The fix is to double-check that your paycheck and other withholdings are accurate.” — Doug Oosterhart, LifePoint Planning

Neglecting to track throughout the year
“A common mistake is neglecting to track deductions and credits throughout the year. Many miss out on savings simply because they don’t keep organized records. This happens due to a lack of planning or relying solely on memory. To fix it, keep a digital folder for receipts, use expense-tracking apps and review tax deductions regularly. Staying proactive ensures maximum refunds and fewer surprises.” — Stephen Nalley, Black Briar Advisors

Waiting until the last minute
“I’ve seen people scramble, miss deductions or rush into costly errors. Why? Because taxes feel overwhelming. The fix? Stay organized year-round — track expenses, review with a pro early and treat taxes like a financial checkup, not a deadline. A little prep now saves big headaches later.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Ignoring deductions and write-offs
“Too many people leave money on the table because they don’t track expenses, or they assume they don’t qualify. If you’re a business owner, freelancer or even have side income, you could be missing major tax breaks. Fix it by keeping detailed records and working with a tax pro who knows how to maximize what you keep. Don’t donate extra cash to the IRS!” — Justin Brock, Bobby Brock Insurance

Putting off getting organized
“The No. 1 mistake I see is a lack of organization and planning throughout the year. Better organization and planning can make tax preparation less challenging because you won’t be as overwhelmed or stressed.” — Marguerita Cheng, Blue Ocean Global Wealth

Failing to seek professional guidance
“Not having a good tax adviser is like sailing without a compass — you might be OK for some time, but eventually you will hit a rock or an iceberg. Tax laws are complex and ever-changing. The consequences of not being compliant can be disastrous. Ensure your tax adviser is sharp and up to date with the latest laws and requirements, or else you might end up paying more in the long run.” — Zain Jaffer, Zain Ventures

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Graduating from college is a big step in your life. You have your whole life ahead of you, and you feel empowered to take the world by the reins. There will be many exciting new paths you can take: getting a new job, moving to a new city or state and, for many, maybe even buying your own place. But before you start on this big adventure, it’s important to first begin by getting your finances in order.

While not necessarily as exciting or fun as traveling the world, ensuring you start off adulthood with a stable financial footing can help make sure you’re able to fund all these new opportunities coming your way and still have the safety and security you need to lead a successful adult life.

If you’re graduating within the next few months — or even within the next year or two — consider the following advice from the financial experts of Kiplinger Advisor Collective to start checking off your financial to-do list and get a head start on living the life you’ve been dreaming of.

Develop a plan for retirement
“The sooner you start investing for retirement, the better off you will be when that day comes. Open up an IRA, Roth and/or a 401(k) and start diligently investing. Even if you can only invest a fraction of the allowed limit, when retirement comes, you will be miles ahead of your peers thanks to the effects of compound growth.” — Greg Welborn, First Financial Consulting

Save cash for emergencies
“These days, having enough cash to ride out emergencies is important. If you can buy high-yield savings bonds, or even yield-enhanced money market funds that are safe to park your cash in without losing it, that would be better. You need to keep some liquidity so you can take advantage of opportunities that may come along in the near future.” — Zain Jaffer, Zain Ventures

Understand how you support your values with your money
“Hone your spending skills by paying attention to how you use money day to day. Start to name your values and keep an occasional spending diary to consider how your spending supports those values. Getting clear on how to use money to support your values early will insulate you from looking to outside sources for the ‘right’ ways to use and manage money, which most likely won't be exactly ‘right’ for you.” — Dana Miranda, YOU DON'T NEED A BUDGET

Start to pay yourself first
“Build the habit of paying yourself first. A mentor once told me, ‘If you don’t save now, you never will.’ Even if it’s just $20 a month, start early. I’ve seen young professionals delay, thinking they’ll save later — but later rarely comes. Automate savings now, when opportunities, not financial stress, define your choices.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Improve your credit score
“Build your credit as soon as possible. Adulthood hits fast, and your credit score affects everything — renting, buying a car and even some job opportunities. Open a low-limit credit card, use it for essentials and pay it off in full each month. Good credit saves you thousands in interest over time, so start now, be smart and set yourself up for financial freedom early.” — Justin Brock, Bobby Brock Insurance

Build your financial discipline
“Develop a savings and investment plan to prepare for any emergencies and opportunities, and be sure to build wealth for the future. It’s never too early to plan! Financial discipline leads you to higher credit scores and more favorable interest rates for loans.” — Marguerita Cheng, Blue Ocean Global Wealth

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Now that 2025 is here, it’s time to make sure your finances are set up for success as we look ahead to the rest of the year. It’s a good idea to see where your finances have performed well and what needs to be improved.

If you want to set yourself up for success, you need to approach your wealth from all sides, from lifestyle expenses to investments. Here are three ways you should look into your finances for the remainder of 2025 and beyond.

1. Update your budget

Inflation has risen drastically over the last several years. 2022 alone saw an 8% increase in inflation. If your budget is calculated on the goods and services rates of prior years, you might find yourself going through more cash than expected.

Having an accurate budget can make a big difference if you need to determine your liquidity at any moment. If a solid investment opportunity arises, you don’t want to hesitate because funds are short.

2. Keep up to date on tax changes

So far, 2025 has already seen some significant tax changes. Some have already been announced and can be planned for. For example, IRA limits are staying the same but maximum HSA contributions will be raised to $4,300 for individuals and $8,500 for families.

Others are up in the air. For example, provisions of the Tax Cuts and Jobs Act (TCJA) are still set to sunset this year. However, it is very possible that the new administration will extend those provisions. These next two years could potentially see major tax changes, especially for high earners.

Keeping up to date on tax changes for this year — as well as 2026 — will allow you to make advantageous decisions for new investments and other tax strategies. Make sure to keep your ear to the ground regarding any issued IRS updates.

It’s also a good idea to consider joining a mastermind group that specializes in tax strategy. Peer groups and mentorship can often be more beneficial than a single adviser, as having more peers to consult with when it comes to your tax strategy and alternative investing can simply offer you more perspectives.

3. Diversify your portfolio

Always take the time to assess your portfolio as a whole. Identify where you might be open to vulnerabilities with inflation and other economic fluctuations such as the housing market.

If you review your portfolio and notice that a large proportion of investments are susceptible to the same economic factors, it’s time to consider alternatives.

For example, oil royalties can provide steady long-term income. And best of all, royalty rates are regularly adjusted for inflation. So that income should remain steady even if your other investments take a hit from inflation.

When dipping into alternative investments, you don’t need to jump into it with huge sums. Even just a few percentage points of your overall portfolio can keep things more stable when economic swings occur.

Make 2025 a profitable year

It will be fascinating to see what the rest of 2025 brings. Whatever changes and updates come your way this year, you’ll want to get yourself in a good position to adapt.

Analyzing your spending and portfolio now can yield the necessary data you need to set yourself up for success.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

There's a well-known saying that compound interest is the “eighth wonder of the world.” While the quote’s origins are debated, the power of compound interest is undeniable. It can transform modest savings into significant wealth over time.

The key is understanding how it works and how to maximize its potential to build financial security.

What is compound interest?

Compound interest is the process of earning interest on both the money you initially invest (the principal) and the accumulated interest from previous periods. Unlike simple interest, which is calculated only on the principal, compound interest allows your money to grow exponentially.

For example, if you invest $1,000 at an annual interest rate of 8% and let it compound yearly, you’ll earn $80 in interest after the first year.

The next year, interest is calculated not just on your initial $1,000 but also on the $80 interest from the first year — bringing your total to $1,166.40 in two years.

Over decades, this snowball effect can turn small contributions into a sizable fortune.

Why time is your greatest asset

The magic of compound interest lies in time. The earlier you start, the greater the impact. Consider two investors:

Investor A starts at age 25 and invests $200 per month until age 65, earning 8% annually.

Investor B waits until age 35 and invests the same $200 per month until age 65 at the same rate.

By retirement, Investor A will have accumulated about $698,000, while Investor B will have about $298,000 — even though both contributed the same monthly amount and Investor A got only a 10-year headstart.

This staggering difference demonstrates that starting early is more important than investing large sums.

How to maximize the benefits of compound interest

Start as early as possible. Even if you can only invest a small amount, begin now. The longer your money compounds, the greater your final balance will be.

Contribute consistently. Automate contributions to your retirement or investment accounts to ensure you regularly add funds. This habit minimizes the temptation to spend and ensures long-term growth.

Take advantage of tax-advantaged accounts. Accounts like 401(k)s, IRAs and Roth IRAs allow tax-free or tax-deferred growth, supercharging the effects of compound interest. If your employer offers a 401(k) match, take full advantage — it’s essentially free money.

Choose investments wisely. Historically, broad market index funds (like the S&P 500) have provided average returns of around 8% annually. Choosing investments with strong, long-term growth potential can maximize compounding.

Reinvest your earnings. Rather than withdrawing dividends or interest, reinvest them. This keeps your money working for you and accelerates compounding.

The Rule of 72: A quick way to estimate growth

The Rule of 72 is a simple formula to estimate how long it will take for your investment to double. Just divide 72 by your annual interest rate.

For example:

• At 8% interest, your money will double in nine years (72 ÷ 8 = 9)
• At 6% interest, it will take 12 years to double

This rule underscores the importance of securing higher returns and reinvesting earnings to compound wealth faster.

How compound interest can build real wealth

Let’s illustrate with a real-world example:

• If you invest $500 per month from age 25 to 65 at an 8% return, you will have around $1.7 million by 65. You would have contributed just $240,000 of that amount.
• If you wait until age 35 to start investing the same monthly amount till age 65, you’ll end up with only about $745,000. Granted, you would have put away only $180,000. But what option would you rather do?

This difference highlights how even small investments, given enough time, can result in life-changing sums.

The best time to start is now

Many people think wealth building requires large salaries or big investments, but compound interest rewards consistency and patience over time. Whether you’re starting with $50 or $500 per month, the key is to start and stay committed.

The sooner you begin, the more you can harness this powerful financial force — turning small investments into a future of financial freedom.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

For individuals contemplating retirement abroad, Portugal is a prime destination offering not just idyllic landscapes and rich culture and history but also attractive retirement visa options, meeting the needs of retirees seeking to enjoy their golden years in Europe.

A high standard of living, warm climate and world-class healthcare are among the many benefits of retiring in Portugal.

Benefits of retiring in Portugal

Portugal's healthcare system is in the top 40 worldwide. Excellent public and private services provide retirees the flexibility to choose the care that best suits their needs and preferences.

As well as a relatively low cost of living and the benefit of Portugal's favorable tax regime, Portugal offers retirees a wealth of lifestyle benefits that contribute to a high quality of life, including a rich culture, mild weather and gorgeous landscapes, allowing retirees to immerse themselves in the local culture and community.

Understanding Portugal's retirement visa programs

Portugal offers two main retirement visa programs: the D7 visa and the golden visa. Both the D7 visa and the golden visa allow the inclusion of dependents, meaning the applicant’s spouse or partner and dependent children can benefit from Portugal’s high standard of education and healthcare system with the right to live, work and study in Portugal, alongside visa-free travel within the Schengen Area.

With no language requirements, proficient English among the Portuguese population greatly benefits retirees by easing communication and integration into local life.

The D7 visa

The D7 visa is designed for individuals with a steady income who wish to retire or live in Portugal. Applicants must demonstrate proof of sufficient financial means to support themselves, typically through pension income or passive income sources.

The applicant must also open a bank account in Portugal, with a deposit of at least EUR 25,000 being my company's recommendation.

The D7 visa grants residency status, allowing retirees to reside in Portugal, with access to the country's healthcare system. After five years of residency, there is the opportunity to apply for permanent residency or citizenship.

The golden visa

As one of the most popular golden visa programs in the world, Portugal’s golden visa offers non-EU citizens residency permits through a qualifying investment into the country, with one of the most popular routes within the program being the investment fund option.

This option allows individuals to invest a minimum of EUR 500,000 into qualifying funds, such as private equity and venture capital funds, in areas including technology, football and agribusiness. The investor must hold this investment for a minimum of five years from the issuance of the residence permit.

For individuals seeking to diversify their investment portfolio and secure residency in Europe, the Portugal Golden Visa Investment Fund offers a compelling opportunity and stands as an attractive pathway to access the benefits of European residency.

Caveats of retiring in Portugal

The numerous articles and reports praising Portugal as an idyllic country for retirement are true, but settling down in Portugal does not come without effort.

As mentioned above, the D7 and golden visa are two possible routes to retire in Portugal. The golden visa requires only physical presence of at least 14 days in every two-year period and so is ideal for young retirees traveling a lot, while the D7 requires the visa holders to spend the majority of their time in Portugal.

Eventually, both types of visas may lead to Portugal citizenship, provided that the retiree obtains at least A2 level in the Portuguese language.

Although English is widely spoken in large cities and tourist areas, Portuguese remains the preferred (and sometimes sole) means of communication in more rural locations.

Hence, living in these areas where beautiful and affordable properties can be found may require time and effort to learn the language in order to avoid feeling isolated.

Portugal is known for a nice, slow pace of life — and also for bureaucracy. Foreigners can sometimes find this frustrating, particularly if they do not understand the language and need to deal with immigration authorities, tax authorities or even healthcare providers.

In rural areas, access to healthcare, transport infrastructures and internet connectivity may be slow or below expected standards.

My advice would be to rent first in order to test different areas and then decide on a prime location where the retiree is able to integrate into local society and find satisfactory access to services.

Taking a course to help learn Portuguese is also likely to provide a whole new experience to new retiree residents and is very much encouraged.

The path to retirement in Portugal

To retire in Portugal, individuals must first obtain a residency permit through either the D7 visa or the golden visa programs and their respective requirements.

Applicants will need to submit the necessary documentation, including proof of income, health insurance coverage and a clean criminal record, and obtain a tax identification number, as well as visit Portugal for biometric submission before the residence permit is issued.

Once approved, retirees can enjoy the benefits of Portuguese residency.

Because of the complex application process and requirements, I recommend looking into experienced service providers. Visa and residency requirements vary and can be daunting processes with many factors to consider.

It is highly recommended that you work with a qualified attorney when making plans for retiring abroad.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Capital markets and banking institutions are facing an inflection point. While the financial services industry has started investing heavily in artificial intelligence (AI), cloud computing and automation, most firms remain anchored to legacy systems, outdated risk models and inefficient compliance processes.

The reality is stark: Many banks and trading firms generate vast amounts of data but struggle to derive actionable insights. Regulatory pressures are increasing, fraud threats are more sophisticated, and capital allocation inefficiencies persist. AI is no longer a futuristic concept — it is perhaps the only viable path forward for firms looking to stay competitive in an increasingly automated, data-driven market.

However, adoption is slow and fragmented. AI-powered trading strategies exist, but legacy IT infrastructures still dominate operations. Risk management is being enhanced with AI, yet compliance and regulatory reporting remain largely manual.

To move forward, capital markets firms must transition from experimental AI projects to scalable, enterprise-wide AI-driven automation.

The data challenge: Capital markets firms are data-rich but insight-poor

Financial institutions are drowning in data. The volume of financial transactions, trading data and risk models has exploded in the last few years. Yet many firms remain reliant on Excel-based workflows, legacy core banking systems and fragmented data lakes that are difficult to integrate.

A recent example shows why it's imperative that banks step up fast to modernize any legacy systems: Citigroup came close to learning this lesson at a cost of $81 trillion (paywall). If banks fail to fast-pace their legacy modernization, it can backfire financially in serious ways.

AI-powered analytics can optimize trading strategies and improve risk assessment, but firms often lack the real-time data infrastructure necessary to support AI-driven insights.

Quantum computing is emerging as a transformative force that could help process complex financial models at unprecedented speed, yet adoption remains limited to a handful of early movers.

AI-driven liquidity management and predictive modeling could drastically reduce financial inefficiencies, yet banks continue to depend on outdated systems that require manual intervention.

What firms can start doing is moving from data hoarding to data activation. The right integrated firm decision-making and alignment for investments in AI-native analytics, data unification and real-time risk modeling will define the winners of the next decade.

Regulation and compliance: Why AI is the only path forward

All these global financial institutions collectively spend billions on regulatory compliance, anti-money laundering (AML) and fraud prevention. Yet much of this work is still manual, inefficient and prone to errors. AI-powered regulatory technology (RegTech) can automate compliance monitoring, fraud detection and real-time transaction audits.

Biometric authentication and blockchain-based audits will replace traditional identity verification processes, making transactions more secure and tamper-proof. AI-driven risk assessment models will proactively identify regulatory violations, reducing the risk of financial penalties and reputational damage.

The solution: move beyond reactive compliance and embrace AI-driven risk mitigation. AI-powered fraud detection, biometric know-your-customer (KYC) solutions and blockchain-backed auditing will help firms streamline regulatory processes and reduce compliance costs.

Agentic AI and the modernization of legacy banking systems

AI is no longer just an assistant in capital markets; it is becoming the decision-maker. From trading desks to compliance teams, agentic AI systems are emerging as the backbone of financial automation. Portfolio rebalancing, compliance monitoring and trade execution are increasingly being automated.

Traditional software-as-a-service-based (SaaS) risk management platforms are being replaced by AI-native, self-optimizing systems that can dynamically adjust to market conditions. AI-powered liquidity management will optimize capital flows, reducing dependency on human-driven decision-making. Multi-agent AI systems can solve complex, multi-step problems in capital markets. These AI agents collaborate in real time to optimize trade execution, risk monitoring and compliance audits.

The solution: Capital markets firms must phase out legacy infrastructure and invest in AI-driven platforms that support real-time, autonomous financial decision-making.

The rise of AI-driven trading and capital allocation

The next frontier in capital markets will be AI-powered trading algorithms that go beyond rule-based automation. Hedge funds and quant traders are already using machine learning to identify arbitrage opportunities, optimize capital allocation and execute trades in milliseconds.

AI will augment, and in some cases replace, human traders in the coming years, allowing firms to optimize execution strategies with real-time data insights. AI-powered asset allocation models will optimize capital deployment, helping funds get allocated to high-return investments with minimal risk. Predictive AI models will anticipate market trends, allowing firms to adjust portfolios before market shifts occur.

Industry reports, such as the IMF’s analysis on AI in capital markets, highlight the increasing role of AI-driven automation in risk management and capital allocation. A strategic approach is that financial institutions could prepare for AI-driven capital markets by investing in machine learning infrastructure and developing AI-driven trading models that adapt dynamically to market conditions.

Legacy platforms to hyper-autonomous systems

Financial institutions must phase out legacy infrastructure, and AI-native platforms must replace outdated core banking and trading systems. They must adopt AI-driven risk and compliance solutions to improve fraud detection, AML monitoring and regulatory reporting.

Leveraging AI-powered liquidity management will optimize capital allocation and trading strategies. Traders, portfolio managers and risk analysts must evolve alongside AI-powered systems to stay competitive in finance.

The future of capital markets will be driven by hyperautonomous AI-powered systems that continuously learn, optimize and execute financial operations with minimal human intervention. Firms that do not transition to hyperautonomous decision-making risk being left behind as AI-native competitors accelerate their dominance.

The new AI-driven financial future

The financial industry is on the cusp of an AI revolution, but many firms are still playing catch-up. While some capital market players are actively developing AI-driven trading models, risk automation and data-driven compliance frameworks, many institutions remain weighed down by legacy systems and inefficient workflows.

To remain competitive, firms must move beyond piecemeal AI adoption and integrate AI, data and automation into a single, cohesive strategy. The winners in this space will be those who invest in hyperautonomous AI-driven platforms, real-time analytics and autonomous financial decision-making.

These next-generation AI systems will redefine market operations by enabling fully automated trading, risk assessment and liquidity optimization. The laggards will continue to struggle with compliance costs, inefficiencies and shrinking margins. As I see it, the future of capital markets belongs to those who embrace AI-driven transformation.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

The recent devastating fires in Southern California have highlighted the critical role of insurance in protecting our lives and financial well-being. Insurance isn't just about safeguarding your home; it's a comprehensive tool that can replace lost income due to disability, provide crucial support while traveling and help manage the significant costs of long-term care. In short, insurance acts as a financial safety net, mitigating life's uncertainties.

As a financial planner, I regularly review my clients' financial plans, updating their current financial information as their lives unfold. A critical component of these regular reviews is assessing their needs not only for life insurance but also for other vital protection essential to their financial well-being, such as auto, home, disability and long-term care insurance. It's crucial to remember that our insurance needs evolve as our lives change. Whether we’re getting married, having children or approaching retirement, regularly reviewing the types and amounts of coverage is essential for a comprehensive financial plan.

Insurance offers several key benefits:

Asset protection

Insurance protects your assets against financial losses from unforeseen events such as accidents, illnesses and natural disasters. It minimizes the risk of substantial out-of-pocket expenses and can replace lost income while offering a layer of security that allows you to manage financial uncertainties with confidence.

Cost-effective risk management

While insurance premiums represent an added expense, they are a relatively small price to pay compared to the potentially devastating financial impact of a major loss. Paying regular premiums can save you from large, unexpected expenses. Insurance is a proactive approach to risk management and is crucial to maintaining your financial health.

Enhanced financial security

Beyond safeguarding your assets, insurance can provide financial security that extends beyond your current savings. For example, life insurance can offer a significant payout to beneficiaries, creating a financial safety net for loved ones. This is especially important for young families with dependents.

Bridging the gap

Long-term care costs can be exorbitant, and government assistance programs often provide limited or no coverage. Long-term care insurance can help bridge this gap, protecting your retirement savings and ensuring access to necessary care without financially burdening your family. With a long-term care plan in place, you can enjoy peace of mind knowing that your future healthcare needs are adequately covered.

Building a financial legacy

By protecting your assets and using life insurance benefits to supplement your estate, insurance can be a powerful way to extend your impact beyond your lifetime. It can help you provide for loved ones and future generations. Your legacy could include providing educational opportunities while supporting causes that are important to you and can make a lasting impact.

Unfortunately, many people think about insurance only when a premium payment is due. However, insurance is a vital tool that can facilitate a quicker and smoother recovery from a wide range of life events. It provides peace of mind, knowing that you and your family can weather unexpected challenges without facing financial ruin. Review your situation with a financial planner to assess your specific insurance needs and ensure you have the right coverage to protect your future.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

While much of the media is concentrated on bitcoin’s price and whether the U.S. will create its own bitcoin strategic reserve, that old reliable commodity called gold has been making its own moves. Gold hit a record high of $2,956.15 on February 24, 2025; it also outperformed the S&P 500 index in 2024.

Unlike cryptocurrency and other digital assets, there is less controversy about owning gold. In fact, much of the public owns it in some form, whether as jewelry, embedded in some of their electronic devices or even mixed into some specialty cakes. More sophisticated investors might choose to dabble instead in financial instruments like futures, options, certificates or other means to own or speculate on it.

That said, there are certainly caveats when it comes to investing in gold; some even say "Investing in Gold is Dumb." As just one example, as of this writing, gold is currently worth just below $3,000 per ounce, or 0.0625 pounds. I've heard an ounce in bar form described as being like a thick military dog tag. If you wanted to pay someone a million dollars in gold, that would be roughly 334 of those small bars (ounces). That's pretty hard to transport safely, is attractive to thieves and would probably set off security alarms everywhere.

Over the past few decades since the Nixon administration lifted the gold standard to back the U.S. dollar, the U.S. has basically financed its spending through a combination of tax and tariff revenues from the national gross domestic product (GDP), with the deficit being funded by debt through the sale of Treasuries, both short- and long-dated.

Unfortunately, spending for social programs, military and defense, Medicare, Social Security, disaster relief and other government expenditures has outrun the GDP to the point where the deficit is significant. The official figure from the U.S. Treasury for the national debt as of March 3, 2025, was $36.22 trillion, with a debt-to-GDP ratio of around 123% for 2024. All the debt the U.S. has sold through its Treasury bills and bonds has to be returned at some point to the holders when they redeem the principal.

However, CNBC reports that for 2024 alone, the U.S. paid about $1 trillion just for the interest on the debt, and not the principal, largely due to higher yields on newer bonds. This was driven in large part due to somewhat lukewarm interest in buying U.S. bonds in light of the growing national debt. This is somewhat similar to a credit card warning a user about termination beyond the spending limit when payments are not made on time.

The higher coupon rate is the enticement but also comes back as a higher interest payment for the U.S. Basically, if potential bond buyers are skeptical that a government's financial situation is a bit risky, they will want a higher return on the money they lend when they buy bonds at auction. The coupon rate (or interest rate) is what the government bond issuer agrees to pay as interest to the lender. For the U.S., this is a large part of the interest payments it has to make on its debt.

So where would gold fit into all this? Some investors are starting to realize that governments worldwide are saddled with huge deficits and mounting debts, and while we are still far from a 1923 Germany hyperinflation scenario, some of the conditions are there. One potential cause is that without gold-backed money, some governments can be easily tempted to print more money by fiat (by decree), with only the “full faith and confidence in the government” to back that money.

Investors, corporate treasuries and the general public at large are starting to realize that the cycle of excessive borrowing to finance government expenditures, grants and aid of all kinds beyond taxable GDP and productivity might not end well. Overspending beyond GDP and tax collections is one way to get into a hyperinflation situation. Bond and currency holders then begin to wonder what it is they are holding.

Some are starting to realize the value of investing in commodities like gold, silver and oil that are constrained in supply. This is because commodities hold intrinsic value and do not derive their worth from the promises of debtors and institutions. For these investors, the choice of where to store value is the same as it often was during ancient times: They often default to that shiny, rare commodity metal called gold.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Investing in cryptocurrency is one of the most exciting and volatile financial opportunities of our time. It has created millionaires overnight and has also left many investors with empty wallets. I’ve learned firsthand that success in crypto requires a deep understanding of risk vs reward, along with a solid strategy to navigate this ever-changing market.

If you’re considering investing in cryptocurrency, it’s crucial to approach it with a mindset that balances the thrill of potential rewards with a strong risk-management strategy. Here are the key insights and strategies I use to make informed, calculated decisions.

Understanding risk in crypto investing

Cryptocurrency is known for its extreme volatility. Unlike traditional stocks or real estate, which tend to have slower, more predictable movements, crypto can experience massive price swings in a single day. While this presents lucrative opportunities, it also comes with significant risks.

Key risks to be aware of:

Market volatility. Prices of cryptocurrencies can skyrocket or plummet based on speculation, regulatory news or macroeconomic factors.

Regulatory uncertainty. Governments around the world are still figuring out how to regulate crypto, and sudden policy changes can drastically impact the market.

Security risks. Crypto wallets and exchanges are prime targets for hackers, making security a top priority.

Lack of fundamental valuation. Unlike stocks, which have earnings and financial statements, many cryptocurrencies rely on utility, adoption and speculation for value.

Scams and rug pulls. The crypto space is filled with projects that look promising but are designed to defraud investors.

With all these risks, you might wonder why anyone would invest in cryptocurrency at all. The answer lies in its high-reward potential when approached with a solid strategy.

Reward: Why crypto is still worth considering

Despite the risks, cryptocurrency has created wealth opportunities unlike those of other asset classes in recent years.

Potential rewards:

High returns. The growth of bitcoin, ethereum and even some altcoins has outpaced traditional markets. As of March 3, 2025, bitcoin's price was $83,899, ethereum traded at $2,098, and the SPDR S&P 500 ETF Trust (SPY) was at $583.77. This disparity highlights the rapid appreciation of leading cryptocurrencies compared to traditional financial assets.

Decentralization and control. Crypto gives investors more control over their assets, eliminating middlemen like banks and brokers.

Early adoption opportunities. Investing in promising projects early can lead to substantial gains as adoption increases.

Hedge against inflation. Some investors see cryptocurrencies as “digital gold” that holds value in times of economic uncertainty.

Diverse opportunities. Beyond buying and holding, crypto offers staking, yield farming, non-fungible tokens (NFTs) and other ways to grow wealth.

With this high-reward potential, the key to success is managing risk effectively while still positioning yourself for substantial gains.

Risk vs reward strategies for crypto investing

Through my own investing journey, I’ve developed a set of strategies to balance risk and reward in the crypto space:

1. Invest only what you can afford to lose.

This is rule number one. Crypto is unpredictable, and while massive gains are possible, so are significant losses. I allocate only funds that I can afford to lose without it affecting my financial stability.

2. Diversify your crypto portfolio.

Putting all your money into one coin is extremely risky. I diversify my investments across different categories, such as:

• Blue-chip cryptos. The most established, lower-risk assets
• Mid-cap altcoins. Projects with strong fundamentals that have growth potential
• High-risk altcoins. Emerging cryptos that could offer massive returns but come with more uncertainty

Diversification helps mitigate losses if one area of the market underperforms.

3. Use a dollar-cost averaging (DCA) strategy.

Rather than trying to time the market, I invest small amounts at regular intervals. This reduces the impact of short-term volatility and allows me to accumulate assets over time without stress.

4. Take profits on the way up.

One of the biggest mistakes I see investors make is holding on to gains for too long, only to watch them disappear. I set predefined targets and take profits as prices rise, ensuring I lock in returns while still holding some for future growth.

5. Secure your assets properly.

Security is crucial in crypto. I never leave large amounts on exchanges, as they are vulnerable to hacks. Instead, I use:

• Hardware wallets for long-term holdings
• Secure passwords and two-factor authentication to protect my accounts

6. Stay informed and avoid hype-driven investments.

The crypto space is full of hype, and many investors get caught up in fear of missing out. I do my own research, looking at:

• The team behind the project
• The utility and real-world application of the crypto
• The community and developer activity

If a project lacks transparency or seems too good to be true, it probably is.

7. Be prepared for market cycles.

Crypto moves in cycles — bull markets followed by bear markets. I remind myself that downturns are normal and use them as opportunities to accumulate assets at lower prices instead of panic-selling.

8. Consider stablecoins and staking for passive income.

To reduce exposure to extreme volatility, I allocate a portion of my portfolio to stablecoins, which hold their value, and participate in staking or yield farming to earn passive income. This helps balance risk and increases the chances of consistent returns.

Final thoughts: Balancing the risks and rewards

Crypto investing isn’t for the faint of heart, but with a calculated strategy, it can be incredibly rewarding. The key is understanding the risks, protecting yourself from unnecessary losses and taking advantage of the opportunities when they arise.

By investing only what I can afford to lose, diversifying, securing my assets and staying informed, I’ve been able to navigate the crypto market successfully. The goal isn’t to avoid risk — it’s to manage it wisely while maximizing potential rewards.

If you’re considering investing in crypto, take the time to learn, develop a strategy and approach it with a long-term mindset. Risk is inevitable, but with a strategic approach and a bit of luck, the rewards can be substantial.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Getting on a budget can be one of the most effective ways to start taking control of your finances. Whether you take a detailed spreadsheet approach, let an app do the work for you or leverage simple pen and paper, there’s no one correct way to do a budget as long as your system works well for you.

However, many people who try tackling their first budget may quickly give up or find it too difficult to keep up with long term — but this doesn’t mean budgeting in general doesn’t work for them.

According to the financial advisers and experts of Kiplinger Advisor Collective, you may just be going about it with the wrong plan or mindset. If you’re struggling to budget or find that you’re not hitting your goals as quickly as you thought you could, consider the following six signs that your budget or financial plan may not be working for you — and what you should do to fix it.

You feel unhappy or miserable
“A glaring sign that your approach to personal finance isn't working is if you are miserable. If you have an effective system for saving, spending and investing, it shouldn't make you unhappy. If you are constantly miserable, this is a sign that your expectations, strategy or goals don't align properly with your results. Reevaluate your finances and adjust how you might be saving or spending.” — Stephen Kates, Annuity.org

You're still overspending or dipping into savings
“A key sign your budget isn't working is when you’re consistently overspending or dipping into savings for regular expenses. To fix it, review your spending habits, adjust categories where you're exceeding limits and prioritize needs over wants. Tracking expenses more closely and setting realistic limits can help create a balanced, sustainable budget that aligns with your financial goals.” — Stephen Nalley, Black Briar Advisors

You're short on cash
“Your budget isn’t working if you’re frequently short on cash. Instead of tracking every dollar, focus on broad spending categories and set limits for essentials like housing, food and discretionary spending. Review your plan monthly and adjust it based on actual expenses. Simplifying your budget makes it easier to stick to it while ensuring long-term financial stability.” — Amrita Choudhary, Wasabi Technologies

You're relying on credit cards
“An obvious sign is that you are consistently relying on credit cards to cover routine expenses. To fix this, you really need to be mindful about it and create a detailed budget so you know where every dollar is coming from and where every dollar is going to. Once you have a true picture, you can then look for solutions.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

You're getting into debt
“Your budget isn’t working if you are consistently spending more than you earn, leading to debt or financial stress. To fix it, review your spending habits and prioritize needs over wants. Implement a ‘pay yourself first’ strategy by saving a set percentage of income before allocating to expenses. Use tools like apps or spreadsheets to track expenses, ensuring alignment with your financial goals.” — Dr. Clemen Chiang, Spiking

Your situation has radically changed
“In this economy, I don't have the luxury to change my goals frequently. I need to stick to them and hit those milestones. If I keep changing my goals, it appears that I'm not really serious about achieving anything. The only time I'll consider changing a goal is if it's clear that the situation has radically changed from when I set it, and even then only with proper justification.” — Zain Jaffer, Zain Ventures

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Access to financial services is the backbone of economic growth and stability. While many people worldwide remain underbanked, finding it difficult to access traditional banking or credit, many barriers stand in the way of global inclusion. In many instances, these barriers take the form of stringent standards that are practically impossible for the average person to meet. The effects from this exclusion have far-and-wide effects, going as far as to significantly limit the individual’s ability to save, invest or develop tangible assets.

However, digital tools are beginning to reverse the order of traditional financial services; new and inclusive channels of finance are opening. Mobile banking apps, digital wallets and alternative credit platforms carry the promise of new ideas for helping underserved communities. These tools can deliver a more available, low-cost and user-friendly way to address their finances and allow financial sector approaches to get to regions where traditional banking infrastructures are limited or absent.

Some key advantages include a cheaper and wider variety of transactions in which these underserved populations can participate. Only a smartphone and an Internet connection are necessary for a user to be able to perform basic tasks like depositing money into a bank account, transferring money online or even gaining access to credit without ever needing to enter a bank. Such measures could help open paths to livelihoods and even have the potential to help alleviate poverty.

However, amid this progress, some challenges will arise. For example, illiteracy, a lack of trust in online platforms and very limited infrastructure can all cut down on the growth of modern financial services. There will need to be a swift answer to this problem, and given that digital finance has experienced robust growth over the past decade, it has proven to be an ideal solution to close the gaps in financial inclusion. Let’s look closer at some of the primary digital tools that have aided in more stable financial access growth.

Three key digital tools that help promote financial inclusion

Digital tools are truly lifelines for the millions of people worldwide who are often excluded from financial systems. New technologies have the power to break down old barriers and provide all-around access to financial services, elevating their reach by dispelling social and physical distance, high service fees and stringent account requirements.

In addition, they offer appealing factors like flexibility and personalization to give consumers a more specific portfolio; for instance, a microbusiness owner in a rural area can now accept digital payments and access some microloans. Such a possibility had been impossible for most in years past. These tools help solve logistical challenges while enabling individuals and communities to plug into local and global economies via real-time transactions, low fees and simple user interfaces.

1. Mobile banking apps

Mobile banking apps have ushered in worlds of difference by providing basic access to financial services; they accomplish this by transitioning traditional portal banking to operating applications on smartphones. These banking apps have modernized the banking scene by enabling transactions to be performed without the hassle of going to physical bank branches, diversifying the ability to monitor one’s bank account.

One example is Kenya's mobile money transfer system, M-Pesa, which allows peer-to-peer money transfers, bill payments and access to small loans via mobile phones. It has dramatically expanded access to banking in rural areas where conventional bank infrastructure is limited.

2. Digital wallets

Conventional credit checks have begun to give way to alternative credit platforms that make transactions more straightforward and stable while simultaneously creating a safe domain to put one's virtual cash.

Popular platforms like PayPal and Venmo allow peer-to-peer transfers and online purchases without the commitment of having to hold an actual bank account. Paytm, for example, saved the day for millions in India during pending currency reform, allowing everything from shopping to utility bills to be made with a tap (though it now is facing challenges).

3. Alternative credit platforms

Alternative credit platforms are changing how creditworthiness is determined, opening doors of opportunity for those previously denied by traditional models. Tala and Branch are platforms that look at smartphone data-spending patterns, payment history and social ties to assess credit risk and grant microloans. Tala has been able to provide instant loans to small business owners in emerging markets, often dispensing loans mere minutes after an individual applies; most importantly, all this can be accomplished without collateral or established credit history.

Tools like these are embracing a shift in the financial landscape for the better, creating an inclusive and accessible ecosystem for individuals and groups worldwide.

How industry leaders can continue the shift toward financial inclusion

Technology pioneers have seen the power of digital tools in promoting global financial inclusion. It is important to emphasize that via digital tools like mobile phones, one can achieve financial independence with a more well-rounded ability to save and invest safely. Organizations like mine are pushing this agenda through innovating, collaborating and educating to make sure that digital finance solutions truly address the issues of the underbanked.

Though challenges can arise with this new wave of technology, such as a lack of digital literacy, weak infrastructure and distrust toward technology, industry leaders can lend a helping hand by offering a firm set of tools to combat these issues. Factors like provider-managed education efforts, affordable internet access and solid data security frameworks could move mountains in presenting a more secure option for those looking to expand their financial knowledge and understanding.

In closing, industry leaders and innovators must build on what has been achieved toward democratizing access to financial services. The future of finance must focus on enhancing economic growth and empowerment across the globe for future generations.

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Managing your finances isn’t just about earning more or saving aggressively. It’s also about identifying and eliminating hidden expenses that slowly erode your wealth.

Many individuals unknowingly waste money on overlooked costs that, over time, can significantly impact their financial stability. Here’s a closer look at some of the most common financial drains and practical strategies to mitigate them.

Unused subscription services

From streaming platforms to premium apps and forgotten gym memberships, subscription fees can accumulate quickly.

How to fix it

Conduct a subscription audit by reviewing bank statements and identifying recurring charges. Once you have a handle on all your subscriptions, you can cancel the services you rarely use or those that no longer provide value.

I have done this many times with clients, and a lot of the time we can free up around $100 per month just by canceling subscriptions they aren’t really using.

Another tactic is to look at some of your credit card benefits. Some will credit you (up to $20 per month) for various entertainment services. For example, I pay for Hulu, but then I get a credit the next day from my credit card company for that same amount.

You can then use apps such as Rocket Money to manage your remaining subscriptions efficiently.

Bank fees and ATM charges

Overdraft fees and maintenance charges are common but avoidable expenses.

How to fix it

One easy way to avoid extra bank-related expenses is to choose a bank with minimal or zero maintenance fees. You can also set up low-balance alerts to prevent overdraft charges. Lastly, make sure you’re using in-network ATMs.

If you do get stuck with a bank fee, call the bank and ask them to remove it. Many times, they will, in my experience.

Underutilized gym memberships

Many people sign up for a gym membership with great intentions but fail to attend regularly.

How to fix it

If your visits are infrequent, consider canceling your membership in favor of free home workouts. Pay-per-use fitness classes are another alternative to fixed monthly gym fees. You can also inquire about membership pause options instead of canceling your membership outright.

Credit card interest and late fees

Carrying a credit card balance can lead to high interest charges and costly late fees.

How to fix it

The first step in avoiding credit card fees and charges is to pay off balances in full each month whenever possible. If you haven’t done so already, set up automatic payments to avoid missed due dates. And if you’re carrying high-interest debt, consider a 0% APR balance transfer.

Extended warranties and unnecessary insurance

Retailers frequently upsell extended warranties, but in many cases, these provide minimal additional value.

How to fix it

Verify whether the manufacturer’s warranty already provides sufficient coverage and review insurance policies so you’re not overpaying for unnecessary coverage.

Impulse purchases and retail subscriptions

Retailers use psychological tactics to encourage impulse spending, often through limited-time promotions and recurring subscriptions.

How to fix it

I recommend unsubscribing from promotional emails to reduce the retail temptation and implementing a 24-hour rule before making nonessential purchases. This is huge and has helped a lot of my clients spend less on things they don’t really need.

Another smart move is to use a separate email address for retail accounts to limit your exposure to marketing messages.

Energy vampires in your home

Electronics and appliances continue to draw power even when not in active use, leading to increased energy costs.

How to fix it

Unplug your devices when you’re not using them or use smart power strips. Additionally, consider switching to energy-efficient LED bulbs. You can also adjust your thermostat and use programmable settings to optimize energy consumption.

Dining out and food delivery fees

The convenience of takeout and delivery comes with additional service fees and tips.

How to fix it

Cooking at home more often and meal prepping can save time and money. For those times when you can’t make your meals at home, choose pickup over delivery to avoid added fees. You can also take advantage of rewards programs and cashback apps when dining out.

Hidden expenses can quietly drain financial resources, much like a slow leak in a tire. However, by proactively identifying and addressing these costs, you can maintain your financial health and build long-term savings. Take the time to audit your expenses, cut unnecessary spending and regain control over your financial future. Your wallet — and your future self — will thank you.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

There are many life circumstances that can prevent someone from saving for retirement. Whether it’s expensive emergencies that need to be prioritized, trouble maintaining a steady income or simply the lack of knowledge for exactly how to save for retirement in the first place, life can often send obstacles your way that can prevent you from utilizing your money the way you want to.

However, having a savings goal — and a plan for how to achieve it — is essential if you hope to one day retire and feel secure about your financial situation in your non-working years. Experts often recommend starting to save as soon as you can — after all, more time can make all the difference. But that doesn’t mean you’re out of luck if you are a bit late to get started.

Here, eight financial leaders from Kiplinger Advisor Collective weigh in with some of the best ways to plan for retirement as someone who is starting later in life, and how you can not only catch up but also have the security you need to feel good about your situation.

Draw on your community for help
“Start being a better neighbor. Retirement takes away the built-in community of a workplace and the paycheck that comes with it. If you don’t have extra cash, use your time to invest in the people and businesses around you. Volunteer, join events or pitch in at the community center. People closest to home can offer quick help in emergencies, share resources and create a sense of safety you can rely on.” — Kiersten Saunders, rich & REGULAR

Seek professional guidance
“Contact a professional who relates to your journey. Look for someone experienced, reputable and willing to explain things in plain terms. A pro can show you tax-saving strategies, the right investment mix and ways to make your money work harder. They’ll help you stay focused and adjust your plan as life changes so you can retire with confidence — even if you started late.” — Justin Brock, Bobby Brock Insurance

Consider leveraging the equity in your home
“Remember that the equity in your home is a valuable asset! Options for tapping into that equity for retirement living expenses include cash-out refinancing, home equity lines of credit (HELOCs) and, for those 62 and older, a home equity conversion mortgage (HECM or reverse mortgage). A HECM allows seniors to remain living at home, with the loan usually becoming due only upon death or the sale of the home.” — Laura Ostrem, Success Mortgage Partners, Inc.

Look into catch-up contributions
“If you find yourself starting the retirement savings process later in life, I would recommend finding techniques that can help you fast-track your contributions. For example, if you’re over 50 years of age, you could consider catch-up contributions. Essentially, these allow you to make larger contributions to retirement that can help you speed up retirement savings.” — Justin Donald, Lifestyle Investor

Diversify your portfolio with alternative assets
“Consider maxing out your annual IRA contributions to benefit from tax-advantaged investing opportunities. Also, consider diversifying your portfolio with alternative assets like private equity and venture capital that offer exposure beyond stocks and the potential for outsized returns. This strategy enhances diversification and acts as a safeguard against short-term market fluctuations.” — Scott Harrigan, Alto

Focus on your highest appreciating assets
“Focus on the top three highest appreciating assets to accelerate your path to financial freedom. Prioritize investments in high-growth areas such as stocks, real estate or innovative sectors like AI and blockchain. Leverage compounding returns, minimize unnecessary expenses and diversify your portfolio to maximize potential while managing risks effectively.” — Dr. Clemen Chiang, Spiking

Plan for retirement income, not just accumulation
“Everyone deserves and needs a retirement strategy that includes a drawdown plan with retirement income planning, not just an accumulation plan. It does not matter how old you are or how much you have — work with a retirement specialist to help you determine where you are at and how to get to where you want to go. You may be surprised at what you find out. Retirement planning is not one-size-fits-all!” — Shawn Maloney, Retire Wise, LLC

Identify expenses, eliminate costs and boost savings
“Start by gaining clarity on your current financial situation. Identify your essential expenses, eliminate unnecessary costs and maximize savings wherever possible. Leverage tax-advantaged accounts like 401(k)s or IRAs with catch-up contributions. Diversify investments wisely for growth and stability. Explore options like downsizing or monetizing skills post-retirement to supplement income.” — Amrita Choudhary, Wasabi Technologies

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

In my last article, titled Why You Should Consider Private Equity in Your Investment Portfolio, I explored reasons why incorporating private equity into your investment portfolio could be a smart, strategic move to build wealth.

Private equity’s potential benefits in terms of true diversification in a concentrated market, alignment of interests for long-term success and strong performance make it an investment category worth considering. Unique and substantial tax benefits can be obtained by investing in private equity.

One such potential tax benefit is Internal Revenue Code (IRC) Section 1202; this provision allows individuals to exclude up to 100% of the capital gains realized from the sale of qualified small business stock (QSBS). Certain criteria must be met to qualify as a Section 1202 stock. This article will explore the eligibility criteria for QSBS, gain exclusion percentage, limitations and strategic implications.

Eligibility criteria for qualified small business stock

The aforementioned capital gain tax exclusion not only encourages investment in small businesses but also presents significant tax-saving opportunities for investors and entrepreneurs alike. To leverage the benefits of IRC Section 1202, it’s essential to understand the stringent requirements that define QSBS.

C corporation status

The issuing entity must be a domestic C corporation at the time of stock issuance. S corporations and partnerships do not qualify under this provision; however, LLCs that have elected to be taxed as a C corporation are eligible.

Gross assets limitation

At the time of issuance and immediately thereafter, the corporation’s aggregate gross assets must not exceed $50 million.

Original issuance

Investors must acquire the stock directly from the company, not through secondary market transactions.

Active business requirement

During substantially all of the investor’s holding period, at least 80% of the corporation’s assets must be utilized in the active conduct of a qualified trade or business. Certain service-based businesses, such as those in health, law or consulting, are excluded from this definition.

Holding period

The investor must hold the QSBS for more than five years to be eligible for the capital gains exclusion.

These requirements are designed to foster, encourage and incentivize long-term investment into small growth-oriented businesses.

Gain exclusion percentage

IRC Section 1202 was enacted in 1993 and has undergone several amendments affecting the percentage of gain exclusion. An investor’s capital gain exclusion is dependent on the timing of such investment:

• 50% exclusion: For stock acquired between August 10, 1993, and February 17, 2009, 50% of the gain could be excluded.
• 75% exclusion: This increased to 75% for stock acquired from February 18, 2009, to September 27, 2010.
• 100% exclusion: For stock acquired on or after September 28, 2010, the exclusion rose to 100%, significantly enhancing the appeal of QSBS investments.

Limitations

Section 1202 was enacted to encourage investment in small businesses. While the tax benefits are substantial, knowing the provision’s limitations is important:

Exclusion cap

The maximum gain eligible for exclusion is the greater of $10 million or 10 times the investor’s basis in the QSBS. This cap applies on a per-issuer basis, allowing investors to potentially multiply exclusions by investing in multiple qualified small businesses.

Alternative minimum tax

For stock acquired before September 28, 2010, the excluded gain is treated as a preference item for alternative minimum tax (AMT) purposes, potentially affecting the investor’s tax liability. However, for stock acquired on or after this date, the gain exclusion is not considered a preference item, thereby not impacting AMT calculations.

Strategic implications

Entrepreneurs should consider structuring their startups as C corporations to attract investors adept at investing in private equity seeking QSBS benefits. For investors and entrepreneurs alike, IRC Section 1202 presents a strategic avenue for tax-efficient investment:

Investment incentive

The potential to exclude up to $10 million in capital gains per issuer is a powerful incentive for investors to invest in small, growth-oriented businesses. The potential tax benefits are substantial.

Estate planning

Gifting QSBS to family members or trusts can be a powerful tool in estate planning. This strategy can multiply the available gain exclusion, as each recipient is entitled to their own $10 million exclusion limit, thus magnifying the transfer of wealth in a tax-efficient manner.

Private equity investment does not come without risks, which I've outlined in a prior article. But reasons to consider private equity in your investment portfolio include diversification and alignment of investor interests. In addition, the substantial tax benefits IRC Section 1202 offers investors willing to commit to long-term investments in small businesses is just another reason to consider the appropriateness of investment in private equity.

By understanding and navigating the specific requirements and limitations of this provision, both investors and entrepreneurs can strategically position themselves to maximize benefits, potentially helping one find the right balance between risk and reward in their investment strategy.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Whether it's having to decline dinners out, take cheaper or fewer vacations, or simply shop less, trying to save money to achieve a financial goal can often be difficult socially. It’s not easy having to choose between spending time with friends and family and paying off a debt or hitting a savings goal — not to mention struggling to handle the judgment from those who don’t understand what you’re doing or why you’re doing it.

These common social obstacles can often prevent well-intentioned people from making much progress in terms of their goals, and some others may even give up trying to improve their finances at all.

Thankfully, being successful with money doesn’t have to be an all-or-nothing game. You can still achieve what you’ve set out to do while enjoying life at the same time. According to the financial experts of Kiplinger Advisor Collective, it’s all about balance and intentionality. Consider their top tips below for maintaining a healthy social life while working hard toward achieving your financial goals.

Set long-term goals and give them deadlines
“Set your priorities: Do you want short-term gratification or long-term success? Write your goals on paper in order of importance and assign deadlines. This simple act engages your mind and helps you manage spending. After 30 days, review your written goals against the unwritten ones. You'll likely find that the goals you wrote down led to greater achievement and better financial choices.” — Dennis Futch, The Tax Shop

Set a limit on how often you go out and how much you spend
“Being socially active is important. I would suggest establishing a set number of times you can go out each month and, to avoid spending more than you can afford, using a debit card to pay for your outings.” — Trae Bodge, Trae Bodge Media, LLC

Focus on meaningful connections and budget-friendly activities
“Focus on meaningful connections over expensive outings by suggesting budget-friendly options like potlucks, free outdoor events or game nights. Be open with friends about your financial goals — true friends will understand and support you. Set a monthly social budget to stay in control while still enjoying life. Balancing financial goals with your social life is about creativity and prioritization.” — Amrita Choudhary, Wasabi Technologies

Place helpful reminders where you can see them
“Be clear about your priorities — write them down and place reminders where you’ll see them. This can help you stay mindful and balanced when socializing. If it doesn’t work, reevaluate your priorities or adjust further. Striking the right balance between saving and enjoying life keeps you motivated and on track.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Surround yourself with others who share similar financial goals
“Rather than hanging out with people who might constantly tempt you to spend, seek friends who are also trying to save. You can all try cheap restaurants, potluck parties, group picnics and other low-cost activities. If your friends are also trying to save money, it makes the entire experience more enjoyable because you aren't the only one making the effort.” — Zain Jaffer, Zain Ventures

Categorize your social spending and establish your priorities
“The first step would be to categorize your social spending, establish your priorities and see where budget-friendly options exist for less important activities. For example, you could maintain your spending for family vacations but suggest to your social circle that you might switch from lavish restaurants to in-home dinner parties. That way, you can find savings while being fulfilled socially.” — Justin Donald, Lifestyle Investor

Keep the big picture in mind
“Keep the big picture in mind: You're delaying discretionary spending today so that you'll reach your financial goals in the future. Choosing to spend less and save more doesn't mean the end of socializing. Creatively substitute free or cheaper social activities and remember that being together is what's important. Your thoughtful choices today will get you to your goal.” — Laura Ostrem, Success Mortgage Partners, Inc.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Living beyond age 100 might sound like the stuff of science fiction, but think about how many once-impossible ideas are now part of everyday life. Air travel, landing on the moon, mobile phones and even the ability to map our DNA were unthinkable not long ago. Now, breakthroughs in medicine and technology are nudging us closer to the possibility of living significantly longer, healthier lives. While immortality isn’t on the table just yet, the idea of living well beyond 100 years is no longer as far-fetched as it once seemed.

But let’s pause and think about what that means beyond the medical advancements. Living longer raises important financial and lifestyle questions.

• Could we face longer careers with multiple transitions?
• Should we be investing in ourselves — developing new skills and adapting to evolving industries — to ensure our earning potential keeps up with the times?
• How might we need to adjust our savings rates to support a longer life?
• And what happens to our investment strategies when retirement could stretch over decades instead of years? Will we outlive our money?

These are serious considerations to explore now, long before longevity becomes our new reality.

Is aging the root cause of mortality?

What if aging itself is the underlying cause of most diseases? Researchers are increasingly focused on this idea.

At its core, aging is the slow accumulation of cellular damage — systems break down, waste builds up, and biological processes start to falter. This can pave the way for illnesses like heart disease, cancer and neurodegenerative disorders.

Interestingly, there has even been some discussion to consider aging a disease. This perspective is a striking shift that reframes aging as something that can be studied, slowed and potentially even reversed.

Two big theories on the human lifespan

When it comes to how long we might be able to live, two major theories are leading the conversation:

• Biological limits. Some scientists believe humans have a built-in lifespan limit, estimated at 120 to 150 years. Beyond this threshold, the argument goes, the body simply loses the ability to recover from damage and illness.
• Longevity Escape Velocity (LEV). This concept — regularly touted by longevity-focused influencers such as Bryan Johnson — suggests that advances in medical technology could allow life expectancy to increase faster than we age, potentially leading to indefinite lifespans. Some experts believe there’s a 50% chance LEV could become a reality within the next 15 years.

Regardless of which theory proves correct, according to the CDC, the average lifespan in the U.S. is currently 75.8 years for men and 81.1 years for women. (Because they tend to live longer, women face unique financial ramifications.) However, with ongoing advancements, the possibility of living to 100 and beyond is becoming more realistic for many.

Healthspan vs lifespan: Closing the gap

Living longer isn’t the ultimate goal for most of us; it’s living well. This is where the concept of healthspan comes in.

Healthspan refers to the years of life we spend in good health, free from chronic diseases or debilitating conditions. Currently, the gap between lifespan and healthspan is significant. In the U.S., while the average lifespan is 76.4 years, the average healthspan is only 63.9 years. That’s nearly two decades spent managing illness or declining health.

Fortunately, emerging technologies and proactive health care approaches aim to narrow this gap. For example:

• Genome editing: Tools like CRISPR can repair damaged DNA, potentially reversing some aspects of aging.
• Cancer detection: Liquid biopsies enable earlier detection of cancers, improving treatment outcomes.
• Cellular reprogramming: Nobel Prize-winning research has shown it’s possible to revert mature cells to a younger state, offering hope for regenerative medicine.

These breakthroughs, paired with lifestyle improvements, hold promise for extending both lifespan and healthspan.

The lifestyle factor: Your choices matter

While genetics influence longevity, your daily habits play an even bigger role. Studies suggest that genetics account for only 25% of lifespan, while lifestyle factors — like diet, exercise, sleep and stress management — make up the remaining 75%.

The saying “Genetics load the gun, but lifestyle pulls the trigger” captures this dynamic perfectly. By making deliberate choices to prioritize your health, you can reduce the risk of chronic diseases and significantly improve your chances of living a longer, more vibrant life.

Planning for a longer, healthier life

If living to 100 or beyond is a real possibility, it’s worth considering how this might reshape your life decisions today, including your work and financial decisions. Here are a few key questions to consider:

• Are you investing enough in your physical, mental and emotional well-being?
• Is your career set up to provide fulfillment over a potentially longer working life?
• Are you saving enough to support a retirement that could last decades?
• Should you adjust your investment strategy to account for the financial implications of a longer lifespan?

Answering these questions can help you take proactive steps to build a fulfilling and sustainable future, no matter how long you live.

Small changes, big results

Success in any area — health, finances, relationships — is often the result of consistent, small steps compounded over time. Just as steady saving builds financial security, small daily habits can lead to big health benefits. Starting early and staying consistent can make all the difference.

Final thoughts

We’re living in a time of incredible potential. Advances in medicine and technology are redefining what’s possible for human health and longevity. While living to 100 or beyond may not yet be the norm, the future holds exciting possibilities.

So, how might the idea of living a longer life influence your financial planning and otherwise change the way you approach your choices today?

• Would you focus more on health?
• Strengthen key relationships?
• Save more aggressively?
• Rethink your career path?

These questions are worth exploring as we prepare for a future full of opportunity — and perhaps a few surprises.

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The information provided here is not intended as medical advice, diagnosis or treatment, nor is it investment, tax or financial advice. You should consult with a qualified professional for advice concerning your specific situation.

The 60/40 portfolio, consisting of 60% U.S. stocks and 40% U.S. Treasury bonds, has become the cornerstone makeup of most portfolios ever since John Bogle of Vanguard released their Balanced fund several years ago.

Generally in most years, the 60/40 portfolio has provided good returns, with some years going below expectations. In some cases, such as during periods of recession, U.S. stocks go down; in other cases, the selected stocks in the 60% allocation may not have been the best that could have been picked.

As a general statement, if you believe in the U.S. economy and government, the 60/40 allocation should work well for most people. As the U.S. economy grows, a well-selected set of stocks from the S&P 500 coupled with long-duration Treasury bonds and some short-term bills, if managed well, should give decent returns for most years.

The problem is if the assumption above is no longer true. For example, during periods of recession where the economy shrinks or contracts, stock share prices generally fall to reflect the projected smaller discounted present value cash flows they would get.

If Congress fails to rein in spending, then the U.S. debt-to-GDP ratio will keep growing. At some point, bondholders might hesitate to buy more bonds because the U.S. then becomes like a credit card holder who does not pay their bills but still insists on charging more to their card.

Then the U.S. Treasury will likely be forced to offer higher yields to attract buyers, which would raise our interest payments and thus our deficit even further. Plus, when the U.S. prints more money that is backed by debt and not actual revenue from tariffs and tax collections, inflation rises and further dampens the real economy because of the excess currency in the system.

Let me bring up the concept of an uncorrelated hedge. Correlation is when something closely follows another thing. An inverse correlation is when the opposite is true. Zero correlation is when the two things have no relationship.

Thus, if you wear a blue shirt and your friend shows up in a blue shirt, you two are positively correlated. If you wear black and your friend wears white, or vice versa, then you two are negatively correlated. If there is no pattern between you two, then there is no correlation. Note that “correlation does not mean causation,” as experts like to say, but heck, if two prices appear correlated, then that matters, right?

I believe that with the current situation, it is wise to have an uncorrelated hedge to the 60/40 allocation. Maybe 4%, more or less, but the actual ratio is up to you. Thus it might be more like 58/38/4, but you determine what it should be.

An uncorrelated hedge, like the shirt example implies, is a hedge (or protection) against situations where both stocks and bonds underperform, partially due to the reasons I described earlier. In other words, you want some of your bets to win to counteract losses in others. If all your bets are correlated, then you will lose on all of those.

Some possible uncorrelated hedges include gold, silver, ETFs, cryptos, commodities, oil, futures, fine art, luxury watches and others. Their price movements do not necessarily mirror the movements of stocks (though they sometimes do).

The thing to remember is that you need to keep these allocations to these risk-on assets small, just enough that if these go to zero, you might have a bad day but not enough to wipe you out. You also want to pick risk-on assets that have a high chance of outperforming the S&P 500 if these do well. In plain English, if you are going to take a risky bet, it better be worth it if you actually win. Otherwise, what is the point of the risk?

In financial parlance, an asset should have a high alpha (return over the S&P 500) and ideally a low beta (volatility). However, sometimes the outsized returns come from highly volatile and very speculative assets such as cryptos.

The way to approach this is that if you feel that an asset is extremely volatile price-wise, but can have a potential exponential return, then size your position so that it is small. If you lose, you will not lose much; but if it goes exponentially parabolic, you at least have a small position in it that could potentially offset any losses from your “safe” 60/40 allocation. Even if you do not fully understand what I just wrote, you already instinctively know this.

Is the 60/40 portfolio still relevant? Not in its pure form. I think it needs a third but small allocation to uncorrelated risk on hedges to make it roughly more like 58/38/4, where the 4% (the actual percentage is up to you) goes toward uncorrelated assets.

There are no guarantees in life. No one can predict the future. You could get run over just crossing the street. But if you are hedged properly with a small amount of uncorrelated assets, you might actually grow and preserve your capital despite the many rocky situations you might encounter in the future.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

The passing of a loved one is an emotional time, and family members are often dealing with their grief in different ways. If left undecided, the many legal and financial choices families have to make after the death of a loved one can be an additional emotional drain on their already overwhelmed minds. Larger families can often suffer an even greater burden as they must make decisions that involve many parties — choices that can sometimes lead to arguments or even major fights.

Making end-of-life plans ahead of time can help prevent much of the stress that comes with the financial and legal aftermath of a loved one’s death. Taking the following six steps now, as recommended by the financial experts of Kiplinger Advisor Collective, can help ensure your family is taken care of in the event of your passing and are allowed to grieve without any additional burdens.

Discuss end-of-life wishes with your family early and often
“Start talking to your family early about end-of-life wishes, and continue the conversation throughout your life as circumstances change. Bring up estate and end-of-life planning in low-stakes situations to normalize them and make it easy for anyone to ask questions. As you clarify your wishes, keep a running list, and talk with a financial planner and legal adviser to ensure they're carried out.” — Dana Miranda, YOU DON'T NEED A BUDGET

Inventory your property and assign it to an heir
“Create a home inventory of your personal property and assign it to an heir. Digital home management tools can itemize everything in your home. This first helps with home insurance to make sure you are properly insured. One extra step assigns it to an heir, which becomes part of your estate plan. This is important for items of value and sentimental items to eliminate family struggles around who gets what item.” — John Bodrozic, HomeZada

Set aside money for funeral expenses
“Yes, you need a will, but what about your remains? With a funeral costing around $8,000 in the U.S., you can save your loved ones stress and money if you’re clear about what you want and set aside enough money to cover the expense. You don’t want your heirs trying to decipher your wishes based on previous conversations, and you definitely don’t want them paying for your funeral after you’re gone.” — Howard Dvorkin, Debt.com

Create a comprehensive estate plan
“They need to create a comprehensive estate plan that includes a will, a trust and clear beneficiary designations for all assets. They need to make sure that the trust also gets funded correctly. Creating a list of important key contacts and the location of important documents can also be incredibly helpful to their family members.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Get end-of-life decisions in a writing or personal directions letter
“Get professional advice to create and fund an estate plan that designates who will make decisions for you financially and medically. Plan to minimize estate tax. Include your end-of-life decisions in a writing or personal directions letter. The medical directive only indicates if your life is to be prolonged by machines. A writing can ensure that your doctors and/or family will not litigate.” — John Goralka, The Goralka Law Firm

Support family members with investments, funds and full understanding
“Establish a comprehensive estate plan and set up income-generating investments or funds to create a legacy that supports loved ones financially. Share clear instructions and involve family members in understanding the plan, empowering them with financial literacy and peace of mind for the future.” — Dr. Clemen Chiang, Spiking

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Banking has seen significant change with budding fintech and a growing interest in the stock market from younger generations. With so many mobile-first solutions available, users can now perform financial tasks in seconds. Taking away the hassle of going into a physical branch has led some to move away from traditional banking, especially in areas of the world where such structures are not readily available.

Applications such as Chime and Cash App are at the forefront of this shift in appeal, targeting features including flexibility, convenience and ease of access. The numbers speak for themselves: In a recent report, more than 80% of surveyed consumers said they managed their finances on their mobile devices at least once in the previous month. This trend is driven by apps’ ability to simply make life easier; from paying bills to managing savings goals, app-based banking is quickly becoming the future of money management.

More than a convenience, this is a redefinition of financial engagement. And as these platforms further develop, they’re becoming less an addition to banks and more a replacement — ushering in a whole new era of personal finance.

Let’s take a closer look at the advantages of these platforms and what they mean for the future of banking.

Advantages of app-based banking

The primary selling point of an app-based banking system is its user-friendly design. In contrast to mobile banking, the majority of traditional banking systems are full of the average corporate employee’s worst nightmare: complicated procedures and piles of paperwork.

Mobile banking applications allow individuals to easily control their accounts through intuitive interfaces that are thankfully lacking in complexity. Factors such as personalized dashboards and real-time notifications allow a user to automate important tasks for an individualized level of convenience. Apps such as NerdWallet have built-in budgeting features that automatically categorize the user’s various expenses.

Additionally, app-based banking can result in a noticeable reduction in extra fees. Most of these platforms operate with fewer overhead costs, allowing them to minimize and, in some cases, exterminate fees such as account maintenance charges, overdraft penalties and international transaction fees. Ally Bank, a popular choice for digitally savvy individuals, provides checking and savings accounts without monthly maintenance fees or minimum balance requirements; as an added perk, users’ checking accounts earn interest, and customers have access to over 75,000 fee-free ATMs.

Within app-based banking, instant peer-to-peer payments, investment options and loan services have become available in a singular package. For many users, this bundled offer of convenience, affordability and functionality is a clear reason for choosing mobile apps as their primary financial tool.

Along with helping consumers access and manage money responsibly, mobile banking has the immense potential to help underbanked populations improve their economic status. By providing credit in underserved markets and furthering the widespread adoption of mobile banking solutions, financial services can become more inclusive and accessible for a wide range of customers.

Banking evolves

The growth of digital banking has created a world where traditional banks must learn to contend with intense competition from their mobile counterparts. This transformation is noticeable on multiple levels, including a greater emphasis on technological innovation.

An increasing number of banks are seeking to use artificial intelligence to improve their customer service; these tools include everything from fraud detection in real time to personalized recommendations and the automation of normal customer interactions to reduce costs while increasing efficiency.

The kinds of partnerships traditional financial institutions are pursuing could lead to a new frontier of development for both conventional and digital banks. These partnerships help the banks provide modern solutions to meet their customers’ evolving needs. By embedding the services offered by fintech onto their platforms, these banks can close the gap between their traditional systems and the fast-paced needs of app-based banking clients.

In their quest to compete, banks are strongly investing in digital-first approaches. These approaches involve upgrading core infrastructure to support cloud-based systems and to meet modern-day demand. In essence, traditional banks seek to offer convenient online and mobile banking to engage customers in their devices while simultaneously testifying to the tried-and-true reliability inherent in the long-established banking system.

The future of banking will emerge as a hybrid model that marries traditional and innovative digital services. By incorporating both features into one, this approach will offer a custom-tailored service complete with new technology. The regulatory frameworks will also evolve, seeking to combine innovation with customer protection within a growing economic and financial environment.

Overall, the conventional bank must leverage data analytics and AI to understand customers’ needs and provide subsequent solutions. The convergence of technology, collaboration and customer orientation will shape the future of banking as it does its best to keep up in a digital-first world.

The future of finance

Undeniably, app-based banking is changing the financial sector and promising improved convenience and cost-effectiveness. These platforms continue to change how people manage their money while traditional banks undergo a new level of transformation to compete.

The future of banking is hybrid — a balanced blend of the reliability of traditional institutions with the innovation of fintech solutions. This allows the industry to embrace technology, collaborate and take a customer-centric strategy to ensure that banking becomes an inclusive process for all.

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When I first started working on my personal budget, I quickly realized how important it was to prepare for unexpected events. Life has a way of surprising us, and financial preparedness can make the difference between staying afloat and sinking into debt. That’s where contingency planning comes into play.

Contingency planning is about creating a financial safety net. It's a proactive approach to managing unexpected expenses, ensuring you're not caught off guard. Here's how I go about building a solid contingency plan within my budget — and how you can do the same.

Start with an emergency fund

The cornerstone of any good contingency plan is an emergency fund. I made it a priority to build a fund that could cover three to six months' worth of living expenses. This fund acts as a cushion for unforeseen circumstances such as medical emergencies, job loss or major car repairs.

To start, I automated small contributions from each paycheck into a high-yield savings account. It was easier than I thought to build momentum by starting small and increasing contributions over time. If you haven’t started an emergency fund yet, begin with whatever you can afford — even $20 a week adds up over time.

Identify potential risks

Understanding what you’re planning for is key. I took some time to identify potential risks in my life — things like medical issues, job instability and home repairs. Once I identified those risks, I could make better decisions about how much to set aside and what kinds of insurance might help cover them.

I suggest making a list of the top five financial risks you might face. This helps prioritize where your contingency funds should go and ensures you’re not underprepared for high-impact situations.

Create budget categories for unexpected expenses

When I first built my budget, I noticed that I hadn’t accounted for those "surprise" costs like last-minute travel or appliance breakdowns. So, I added specific categories for unexpected expenses. Now I have a line item for "unforeseen costs," which I contribute to monthly.

If you’re using a budgeting app, you can create a flexible category labeled "Miscellaneous" or "Contingency." Allocating even a small portion of your income each month can prevent financial strain later.

Diversify your savings

While having a primary emergency fund is essential, I also set aside money for smaller, predictable contingencies. For example, I have a separate savings account for home maintenance and another for personal development like courses or certifications.

You can do the same by creating multiple savings buckets for different goals or emergencies. This way, you don’t have to tap into your core emergency fund for smaller, planned expenses.

Consider insurance as a contingency tool

Insurance plays a crucial role in my contingency planning. I reviewed my health, renters and auto insurance policies to ensure they covered the major risks I had identified earlier. Having adequate coverage gives me peace of mind, knowing I’m protected from catastrophic expenses.

If you’re reviewing your insurance, ensure you understand your coverage limits and deductibles. Adjust policies where needed to align with your risk profile and budget capacity.

Reduce debt to minimize risk

Debt can be a significant hurdle in contingency planning. Early in my budgeting journey, I made it a priority to reduce high-interest debt. By doing so, I freed up more of my income for savings and emergencies.

If you’re dealing with debt, consider strategies such as the debt snowball or avalanche methods. Reducing debt not only helps your financial health but also reduces the stress of managing multiple obligations in an emergency.

Plan for income disruptions

One of my biggest fears was losing my primary source of income. To prepare for this, I created a backup plan, including a list of side gigs and freelance opportunities that could provide supplemental income.

Consider developing a side hustle or learning new skills that can keep you financially secure if your primary job is impacted. Having a backup plan can significantly reduce stress during uncertain times.

Review and adjust your contingency plan regularly

I’ve learned that a contingency plan isn’t a "set it and forget it" part of budgeting. Life changes, and so should your plan. I review my budget and contingency funds quarterly to ensure they still align with my financial goals and current risks.

I suggest setting a reminder to review your plan periodically. Adjust savings goals, insurance coverage and expense categories as needed to stay prepared.

Final thoughts

Contingency planning has become a crucial part of my personal budgeting strategy. It gives me confidence knowing that I’m prepared for life’s surprises. Whether you’re just starting your budgeting journey or refining an existing plan, taking proactive steps can protect your financial future.

Start small, stay consistent and make contingency planning a habit. Your future self will thank you for the peace of mind and financial security you've created.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Sophisticated tax planning involves using trusts and entities to better protect your assets and to minimize estate tax, income tax and taxes on capital gains. This planning often involves the use of irrevocable trusts.

Irrevocable trusts are widely used for other types of specialized planning, such as special needs trusts or qualifying for Medicaid or veterans’ benefits. However, this article focuses on planning to minimize taxes on capital gains, ordinary income, estate tax and property tax.

The term “irrevocable trust” can be troubling for successful clients who are accustomed to maintaining control over their business and financial lives. The term “irrevocable” alone creates concerns. None of us knows what the future will bring, what our financial needs will be or even what tax laws will be. However, careful drafting permits you to retain influence or indirect control over assets, income and business, while providing significant flexibility to respond to changed circumstances.

How irrevocable trusts work

Assets are typically not transferred directly to the irrevocable trust. Instead, they are transferred to an entity such as a limited liability company (LLC), S corporation or family limited partnership (FLP) that you control. Then, an interest in that entity is transferred to the irrevocable trust so you retain control of the entity and the assets. This can be done by transferring nonvoting interests in the entity to the trust.

Selecting the trustee

You can designate the initial trustee to oversee trust transactions and activities. While clients often seek to appoint themselves as trustee while they’re alive, you actually have more control if you're not the initial trustee. If you're the initial trustee of a trust for your children, distributions are limited to health, education, maintenance and support (HEMS) if assets are to be excluded from your estate for tax purposes.

HEMS distribution provisions can also impede beneficiary protection from creditors. A creditor could assert that the beneficiary has a right to the HEMS distribution and seek to take that amount from the trust.

If you're not the trustee, however, the trustee may have complete discretion to make distributions, providing better asset protection for your beneficiaries. The key is having a trustee who will act according to your wishes.

In selecting a trustee, clients typically have two goals: During their lifetime, they want a trustee to show absolute loyalty, and after death, they want someone whose judgment they trust. You may designate a trusted adult child, though you should be careful to consider factors such as family dynamics and history in this decision.

Removing or replacing the trustee

More importantly, you retain the right to remove the trustee and designate a new one without cause. If any trustee fails to act properly, or you simply change your mind, you can remove them and designate another. This is a far stronger means of maintaining control than designating the initial trustee.

When selecting a new trustee, you cannot select someone related or subordinate to you. "Related" means a lineal descendant or sibling of your parents, while "subordinate" refers to an employee of any business in which you own a significant share. However, related or subordinate persons can be included in the trust's succession provisions.

How to create a flexible irrevocable trust

Trustees have fiduciary duties to beneficiaries and potentially to creditors including tax authorities. A trustee must follow the declaration of a trust’s provisions.

Appointing a trust protector

A trust protector is a position defined in the trust agreement with the power to take designated actions, including those that may harm the beneficiaries. To be effective, the trust protector should be specifically identified as not being a fiduciary or holding a fiduciary relation to beneficiaries or other interested parties. I sometimes describe the trust protector as being the Lone Ranger. He does not wear a badge but rides in to save the day and then rides off into the sunset.

You can define a trust protector’s powers, including:

• Removing and replacing a trustee
• Appointing a related or subordinate trustees
• Remove beneficiaries and changing allocation
• Adding beneficiaries
• Change distribution timing and methods

However, if the irrevocable trust is being used to minimize income tax, including the tax on capital gains, the only power that you can give the trust protector is removing or replacing the trustee. Otherwise, the trust is characterized as a grantor trust for income tax purposes, with all trust income reported on your individual return.

This means that the trust essentially does not exist for income tax purposes. All trust income is reported on your individual tax return as the “grantor” or creator of the trust. While this doesn't minimize income tax, it can help minimize estate tax. Income-producing assets held outside your estate still generate income tax that you pay, essentially creating tax-free gifts to beneficiaries.

Due to irrevocable trusts' long-term nature, you don’t name a trust protector when drafting the trust. Instead, the trust provides a process to appoint a trust protector if or when needed, often through your law firm or CPA. The trust protector typically handles a specific action and resigns after completion.

Decanting

Decanting is another process that can be used to modify an irrevocable trust. State laws vary greatly, so be sure to check your state's law on decanting. Some states, such as California, have a restrictive decanting statute that allows very limited change to an irrevocable trust. Others, including Nevada, have a very broad decanting statute permitting a wide range of modifications. However, all decanting statutes require the consent of all the beneficiaries. The requirement for consent does not provide the control or influence desired by most clients at the outset of the plan.

A flexible alternative

An irrevocable trust in an uncertain world can be very worrisome over time. We don’t know your financial needs, income, asset values or even the tax rates in the future. However, careful drafting can provide necessary flexibility and control. Instead, a “flexible irrevocable trust” is what is needed in today’s uncertainty.

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Ask anyone what they want to achieve when setting goals at the beginning of a year, and at least one of those goals is likely to be related to money. Whether it’s as simple as saving more or spending less, or as complex as researching new investment opportunities or delving into real estate, setting financial goals at the start of the year is a smart way to start or improve your current financial journey.

If you haven’t yet settled on what you’d like to achieve with your money in 2025, consider the following eight goals recommended by the financial experts of Kiplinger Advisor Collective. Below, they discuss the goals they think more people should set for 2025, and how doing so might impact their future success.

Learn about investing in stock market alternatives
“The start of a new year is a good time to explore your financial options. For that reason, I encourage people to learn about the array of opportunities they have to invest outside of the stock market, and particularly how alternatives can be a smart addition to their financial strategy. Assets like real estate, private equity and crypto offer diversification and the potential for steady growth.” — Scott Harrigan, Alto

Save more money toward long-term goals
“Investors should consider making a New Year's resolution to save more money for goals such as retirement in 2025. Small increases in savings today can lead to significant long-term portfolio growth, increasing the likelihood of you achieving your financial goals.” — Daniel Kern, Nixon Peabody Trust Company

Focus on what you can control and not what you can't
“One goal or New Year's resolution that more people should have heading into the rest of the year is to control what they can control and not worry about what they can’t. For example, you can’t control your investment returns; however, you can control your rate of savings, which has the highest degree of direct correlation to your success probability of living a happy retired life!” — Ian Klinger, Liberty Point Advisors

Create a monthly household budget
“It sounds boring, but you need to create a monthly household budget. Think of it this way: You can’t lose weight if you don’t watch what you eat. Well, you can’t save money if you don’t watch what you spend. And just like with the best diet plans, there are numerous apps that make this otherwise boring activity easy. Your bank or credit union might even offer online tools that do the math for you.” — Howard Dvorkin, Debt.com

Read new and insightful books and publications
“In this age of information overload, the ability to read and comprehend quickly has become a valuable skill. If you can master speed reading, you will have more time to read different books and publications that might give you new insights. That can be your edge over other people who are simply reacting to trends without being able to connect the dots.” — Zain Jaffer, Zain Ventures

Build up an emergency fund
“Set a goal to build an emergency fund covering three to six months of expenses. This financial cushion provides security against unexpected events like job loss or medical emergencies. By reducing reliance on debt in tough times, you promote long-term stability, peace of mind and the ability to focus on future financial goals.” — Stephen Nalley, Black Briar Advisors

Prioritize mobility and the ability to travel
“For 2025, prioritize mobility and cultivate the ability to live, work and play in different countries. In an unpredictable world, this enhances adaptability, diversifies opportunities and broadens horizons. It also mitigates risks tied to economic or political shifts in a single location, fostering long-term resilience and success in an increasingly globalized economy.” — Dr. Clemen Chiang, Spiking

Plan to minimize estate and property tax upon your death
“Implement a plan to minimize the 40% estate tax upon your death and, in states like California, to minimize or avoid property tax increases upon your death. If you have no taxable estate, plan to avoid probate and property tax increases and to maximize basis step-up at death to protect your kids from capital gains. We all believe there is more time later, but procrastination is the silent killer of estate plans.” — John Goralka, The Goralka Law Firm

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Whether someone is a financial adviser, planner or financial business owner, being new to the industry comes with its own set of challenges — especially when it comes to finding that first client. While you may have the right credentials and the passion for helping others with their money, you must also work to convince potential clients that you’re the right person for the job.

But unlike entrepreneurs who have a particular product to sell, you won’t be able to rely on your product's features and benefits to help persuade them. You’ll instead need to focus on what you can offer that no one else can. To help get you started, the financial leaders of Kiplinger Advisor Collective offer their best advice for securing your first client — and what worked best for them — no matter the niche you serve.

Build trust through demonstrated expertise and integrity
“Trust is key. Focus on building trust by demonstrating your values and integrity to clients. Start by leveraging your professional network and clearly communicating the value you bring. For me, offering free workshops on niche topics helped me demonstrate expertise and gain referrals.” — Ian Klinger, Liberty Point Advisors

Offer valuable services for free
“The best way to get your first client is to offer free services of value. For example, if you are a wealth manager, offer potential clients free tax and estate planning advice or some useful insights about the current market situation. The idea is to give them value for their time so they can consider you seriously when they need a financial adviser.” — Zain Jaffer, Zain Ventures

Seek insights from an experienced coach
“Hire a coach who has successfully navigated the financial industry. Shadow them to gain firsthand insights and strategies that work. This approach reduces trial-and-error, accelerates your learning curve and equips you with the confidence and expertise to secure your first client efficiently. Time is your most valuable asset, so invest it wisely.” — Dr. Clemen Chiang, Spiking

Determine your ideal client and a way to help them
“First, think about who you want as your ideal client. Focus only on the client whom you can help the most and with whom you will enjoy working. Then, work hard to develop unique skills and a process to serve those clients. Look to established professionals working with those clients and learn the biggest problems they have with referral partners and how you can help their practice.” — John Goralka, The Goralka Law Firm

Reach out to those you know to earn referrals
“I focused on personal connections. I reached out to people I knew and offered value by sharing insights on topics like retirement planning, investment strategies or tax-efficient strategies. By positioning myself as a trusted adviser who genuinely cared about their financial well-being, I was able to create meaningful conversations that led to client referrals.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Practice empathy and personal connection
“To secure that first client, cultivating empathy and personal connection is a crucial step. This helps you build trust, enhances communication and can lead to long-term relationships. To implement empathy in practice, focus on active listening, regular check-ins and personalized interactions. Integrating empathy into client interactions will ensure sustained success through enduring relationships.” — Hari Prasad Josyula, DowJones

Focus on networking and education
“Build trust through networking and education. Hosting free workshops or webinars showcasing my expertise worked well for me. This approach positions you as a knowledgeable, approachable professional, making it easier for potential clients to feel confident in choosing you for their financial needs.” — Stephen Nalley, Black Briar Advisors

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

In December, Michael Saylor, executive chairman of Microstrategy, presented to the Microsoft board. Saylor argued that Microsoft should put part of its treasury funds in bitcoin. (Author’s note: I currently do not hold bitcoin or any other cryptocurrency.) A large majority of the company’s shareholders voted down the proposal.

That this measure was even put forth to a shareholder vote is significant, though. Although companies such as Tesla and others already hold bitcoin on their balance sheets, Microsoft is a U.S. stock market bellwether and could sway other corporations to copy its move.

The arguments in favor of bitcoin for corporations

The main argument that bitcoin evangelists put forth (Saylor is just one of them) is that it is an inflation hedge. Why is that? For starters, bitcoin is hard capped at 21 million by design. No one can change that, unless the entire community “hard forks,” which would probably shake up and cause widespread fallout. This is in contrast to the U.S. dollar and most other fiat currencies, which governments worldwide often increase in supply, which leads to inflation.

Saylor and others argue that bitcoin acts as an “uncorrelated” asset, meaning that bitcoin moves independently (not as a herd) from other assets such as stocks, bonds and gold and could offset any losses for a particular quarter or calendar year.

Additionally, the Financial Accounting Standards Board in 2023 issued guidance to allow for “fair-value” accounting of digital assets on corporate balance sheets. Before this FASB ruling, companies needed to reflect digital asset value losses but not gains in their updated balance sheets.

Another important development was the SEC's approval of bitcoin ETFs in January 2024, which paved the way for people, funds and companies that did not want to hold the actual volatile underlying digital bitcoin asset to hold it in an SEC legally protected stock instrument.

Now corporate buyers have several options to hold bitcoin or participate in its growth. They can hold actual bitcoin, hold companies that have a lot of bitcoin, hold an SEC-approved ETF or trade perpetuals, futures contracts or options.

Bitcoin has outpaced other assets in terms of growth in the past decade.

Additionally, bitcoin is a new asset class with fewer “counterparty” risks relative to other asset classes used to store funds or wealth, such as bonds, gold and real estate, a feature noted in the original 2008 bitcoin whitepaper. A “counterparty” risk is something like corporate theft, fraud or malfeasance that could force a high-flying stock to zero overnight.

That said, it is not true to say bitcoin itself has no counterparty risk, as quantum computers could potentially hack its cryptography, but so far, that has not happened. The internet itself could also go down globally, albeit probably only for short periods.

What the future may bring

Over the years, I have grown to respect this new asset class. While many technologies encountered serious opposition during their early years, there is something called the Lindy effect that says that if something nonperishable has survived over time, it will likely remain.

Sometimes older generations dismiss things because new developments do not fit into the pattern they have been accustomed to. Although I have not personally put bitcoin on my own balance sheet, I can see Gen Z — who will take the reins of corporations in the future — doing so. That’s because Gen Z has grown up as digital natives without analog payphones, library card catalogs, LPs and the like.

Whether bitcoin (or other cryptocurrencies) significantly becomes a treasury asset for many of the world’s businesses and corporations is something to watch. At the moment, most nonbelievers point to its volatility (beta) as a negative, but hardcore bitcoin and crypto believers point to volatility as a “feature not a bug,” meaning that when these price drops happen, buyers swoop in to acquire more, thus maintaining the long-term rise its price trend shows.

As the new bitcoin-friendly Trump administration moves in, and more companies acquire even small amounts of bitcoin (or other derivative instruments) into their treasuries alongside larger pension and sovereign wealth funds, the growth phase and volatility of bitcoin may become more tempered and even be called a “boring” growth asset in the future.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

There are few topics more personal than someone’s finances. Money determines the way someone is able to live their life, and the various experiences, issues and successes they have with it can impact not only what they do but also who they are. Accepting guidance and advice on how to best handle money can be a big ask, so building trust as an adviser and/or financial services expert is essential if you want to succeed in this career path.

But building this type of deep trust doesn’t happen right away; it must be earned, and the best advisers know what it takes to do so. Here, nine members of Kiplinger Advisor Collective share their best advice for building a trusting relationship with a client and how doing so will enhance your credibility and success in the financial industry.

Turn listening into an art form
“Building trust requires you to develop thoughtful questioning and intense listening into an art form to encourage true connection with a client who feels validated and understood. Listening is hard work, but it’s a superpower for advisers — one set up by gently asking engaging questions and demonstrating you care and will pay attention to them.” — Bill Hortz, Institute for Innovation Development

Underpromise and overdeliver
“Always avoid creating overhyped expectations. Instead, try to deliver oversized returns. That is just human nature. If they keep feeling good about you instead of getting disappointed, they will keep you on board.” — Zain Jaffer, Zain Ventures

Align your actions with your words
“Trust is built through actions, not just promises. By consistently 'walking the talk,' you demonstrate reliability and integrity. When clients see your commitment in action — whether through communicating transparently, delivering results or prioritizing their needs — they’re more likely to trust you. Actions that align with words create a foundation of trust and credibility in any relationship.” — Dr. Clemen Chiang, Spiking

Excel at what you do
“If you want to build trust, don't try so hard. Your best clients have wealth to invest because they didn't fall for smooth talk and easy smiles. They want accurate projections, measurable results and personal responsibility. In other words, consider yourself one of their trusted senior managers. You've got the job as long as you deliver. Stop lobbying for it and just excel at it.” — Howard Dvorkin, Debt.com

Focus on the problem the client is trying to solve
“Trust begins by looking at the problem from the client's point of view, not your own. We often say on Stacking Benjamins that if an adviser leads with product, not process, you should run. It's impossible to lead with process if you don't know the end goal. That's why great advisers begin by asking, ‘What are you trying to solve?’” — Joe Saul-Sehy, Stacking Benjamins

Get to know your clients as people
“First, get to know your clients as people by learning about both their financial and non-financial goals and needs. Listen more than you talk. Focus on finding the best solution for those goals. If another expert can better assist, either refer them there or collaborate as appropriate.” — John Goralka, The Goralka Law Firm

Prioritize transparency
“To build trust with clients, prioritize transparency, active listening and reliable delivery. Clearly explain risks, fees and strategies, focusing on clients’ individual goals rather than promoting specific products. By truly understanding their needs, you create a strong foundation of trust and credibility.” — Amrita Choudhary, Wasabi Technologies

Understand that everyone has different experiences
“Always try to remember where the client is coming from. We all have different experiences, both in finances and in life. Don't be too quick to judge, and acknowledge their concerns and their views. At the end of the day, like Warren Buffett once said, there are multiple ways to get to investment heaven.” — Michael Gainor, Wells Fargo Advisors

Be truly invested in them and their story
“Practice active listening. In financial advising, clients come to you with personal goals, worries and sometimes complex financial histories. By truly listening — giving them your full attention, asking thoughtful questions and acknowledging their concerns — you show that you’re genuinely invested in understanding their unique situation.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

As a longtime advocate for entrepreneurship, I’ve never been more enthusiastic about the future of small business than I am for 2025.

Whether you're an aspiring entrepreneur, an established business owner or someone who dreams of breaking free from the corporate grind, there are so many reasons to be optimistic about the opportunities small businesses present in the coming year. Let me share why this is such an exciting time and how you can prepare to seize the moment.

A thriving environment for innovation

Small businesses are uniquely positioned to innovate. Unlike large corporations with layers of bureaucracy, small businesses can pivot quickly, experiment with new ideas and rapidly adopt emerging technologies. In 2025, we’ll likely see a surge in tools that enable innovation, from artificial intelligence-driven analytics to affordable 3D printing and automation technologies.

For example, AI tools like ChatGPT or MidJourney are empowering entrepreneurs to automate repetitive tasks, create content and improve customer service without needing large budgets. Whether you’re brainstorming new product designs or optimizing your marketing campaigns, these tools make cutting-edge technology accessible to the smallest operations.

Tip: Start exploring these tools now. Familiarize yourself with AI, automation and digital platforms that can help enhance efficiency and spark creativity in your business.

A supportive ecosystem

Another reason to feel energized about small business in 2025 is the growing ecosystem of support. Many governments, private organizations and communities are actively promoting small-business development through grants, training programs and tax incentives. Platforms like Shopify, Fiverr and Etsy continue to democratize commerce, giving everyone from artisans to consultants the ability to compete on a global stage.

In addition, online resources have never been more robust. Whether it’s free webinars, industry conferences or mentorship programs, small-business owners have access to tools that were once reserved for large enterprises. This trend makes entrepreneurship more accessible than ever.

Tip: Research local and national programs designed to support small-business owners. Websites like the Small Business Administration (SBA) and SCORE offer invaluable resources, including free business counseling and financial planning tools.

The rise of conscious consumerism

Consumers in 2025 will be more intentional about where they spend their money. They want to support businesses that align with their values, whether that’s sustainability, ethical practices or local community engagement. This creates a significant opportunity for small businesses to connect with customers on a deeper level than ever before.

Unlike big corporations, small businesses can more easily tell authentic stories and build genuine relationships with their customers. Whether you're running a farm-to-table café or a boutique offering ethically sourced clothing, most customers appreciate the transparency and personal connection that small businesses offer.

Tip: Leverage your unique story and values in your marketing. Highlight your commitment to sustainability, quality or community involvement to stand out from larger competitors.

Technological advancements leveling the playing field

Technology will continue to level the playing field for small businesses in 2025. Cloud-based tools, affordable e-commerce platforms and social media advertising allow small businesses to compete with larger companies without the need for massive budgets.

Take social media, for example. A well-crafted video on TikTok or Instagram can go viral, driving more traffic to your business than any traditional ad campaign could. Additionally, platforms like Canva and Adobe make professional design accessible, while customer relationship management (CRM) tools like HubSpot or Zoho help small businesses manage relationships like pros.

Tip: Develop your digital marketing strategy. If you’re not using tools like Google Ads, Facebook Pixel or email marketing platforms, now’s the time to learn. A strong online presence will be critical in 2025.

The flexibility to meet niche demands

Small businesses excel at serving niche markets. While large corporations often aim for mass appeal, small businesses thrive by catering to specific, underserved audiences. The trend of personalized products and services will be stronger than ever in 2025, giving small businesses a significant advantage.

For instance, a small bakery specializing in vegan and gluten-free treats can attract a loyal customer base that large chains might overlook. Similarly, a consulting firm focusing on eco-friendly construction practices can carve out a specialized niche in a growing industry.

Tip: Identify your niche. What unique value can your business offer that others can’t? Tailor your products or services to a specific audience and market to them directly.

Remote work expanding opportunities

The remote work revolution, accelerated by the pandemic, is here to stay. In 2025, more businesses will be embracing remote-first models, allowing entrepreneurs to build teams and serve customers from anywhere in the world. This flexibility enables small businesses to access talent globally and reduce overhead costs.

Moreover, remote work has created new business opportunities. From virtual assistants to online courses and coworking spaces, entrepreneurs can tap into emerging needs brought about by this shift.

Tip: Explore remote work options to reduce costs and increase your talent pool. Platforms like Upwork and LinkedIn can connect you with skilled professionals worldwide.

Conclusion: Why 2025 could be your year to shine

Small businesses are the backbone of innovation, the lifeblood of local communities and a key driver of economic growth. In 2025, we have a unique combination of consumer support, technological advancements and a growing ecosystem of resources that make it an extraordinary time to launch or expand your business.

If you’ve been waiting for the right time to dive into entrepreneurship or take your existing business to the next level, now is that time. Embrace the tools, trends and opportunities that 2025 will offer and let your creativity and passion lead the way. Small-business ownership is not just a career — it’s a chance to make an impact and create something truly meaningful.

Related Content

• Formula for Small Business Success: Stick With What You Know
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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

As we turn the calendar to 2025, investors should consider making New Year’s resolutions to lead a healthier investment life in the coming year. Here are some ideas:

1. Consume less news about your investments

A “media diet” can help reduce investors’ stress about the day-to-day market swings. Being overly sensitive to the latest headlines can lead to an “activity bias” of trading too much. Investors should aspire to a healthy balance between being well-informed and being overly stimulated by market news.

“Confirmation bias,” which is the tendency to seek opinions that align with one’s own, is another behavioral peril to avoid. The best investors seek out opposing opinions to test their investment decisions.

2. Don’t let taxes dictate your investment decisions

The bull market in stocks has created significant gains, particularly for investors who own some of the big winners of recent years. Many investors are reluctant to take gains in their winners, frozen by the desire to avoid paying capital gains tax.

Taxes can be an obstacle to investment success if tax avoidance overrides an investor’s judgment about the prospects for the stock. It is important to evaluate whether recent winners will sustain success and to consider taking gains if the stock is unlikely to repeat prior success.

Investors should look for opportunities to offset losses with gains throughout the year and not just at year-end; investors should also look for losses in less obvious parts of a portfolio, such as in fixed-income holdings.

3. Remember that fundamentals outweigh politics

Although government policy is undeniably important, earnings growth, profit margins and valuations typically have a greater influence on stock market returns. Policy can help or hurt individual companies. Well-run companies benefiting from strong demand for their products and services can overcome higher taxes or regulatory burdens, but favorable government policy won’t necessarily be enough to rescue poorly run companies facing weak demand.

4. Plan a budget and asset allocation to look longer term

Most investors focus on a relatively short-term time horizon, with the early part of the new year dominated by prognostications for the year ahead. Focusing on the short term leads investors to stray from sound long-term asset allocation planning.

Investors should design a portfolio with long-term financial goals in mind, recognizing that goals typically are multiyear in nature. Investors should start the asset allocation process by identifying what financial goals they hope to achieve, what amounts will be needed to meet those goals and the timing of anticipated cash needs. Plans made with the best of intentions are often disrupted by unexpected surprises, such as medical emergencies or storm damage, so investors should set aside enough in cash or liquid investments to provide a cushion for unanticipated needs.

5. Expand your research network

Many industry leaders provide sound advice about how to be a more effective investor. For example, Howard Marks, co-founder and co-chairman of Oaktree Capital Management, is known for his thoughtful memos about different aspects of investing. His memos are informed by his decades of investing and are readable and helpful for novice investors as well as experienced investment professionals. Michael Cembalest, the chairman of Market and Investment Strategy for J.P. Morgan Asset Management, writes informative Eye on the Market articles on a wide range of investment and economic topics. Cembalest’s work is well-researched, often entertaining and informative.

Investors who start the new year resolving to lead a “healthier” investment life may have a more prosperous and calmer 2025.

Registration with any regulatory body should not be construed as an endorsement or an indicator of investment skill, acumen or experience. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. Unless stated otherwise, any mention of specific securities or investments is for hypothetical and illustrative purposes only. Adviser’s clients may or may not hold the securities discussed in their portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Artificial intelligence (AI) can do many things faster than a human being can — and that includes spending our hard-earned cash.

AI may advise you to spend all your money, but only because you're asking it to

The Pew Research Center conducted a poll and learned that nearly half (49%) of Americans feel AI will help them "find products and services they are interested in online." Only 15% said consulting AI regarding spending in this way hurts more than it helps.

That might be why an Ipsos poll shows that 37% of Americans "are already using AI to manage their finances."

But here’s the doomsday result from a new poll by my company asking 1,000 Americans about the seemingly innocuous topic of holiday shopping: If AI recommends ideal gifts for loved ones, almost two in three (65%) will spend more — and one in four will finance their purchases.

You read that right. If AI tells us to buy pricier gifts than we originally planned, we’ll heed those suggestions. Over 70% of respondents will spend up to $900 more due to AI holiday shopping recommendations, the poll found.

Even worse, if we can’t afford that, we’ll finance it. And we’ll do that in the worst ways possible, according to my company's poll:

• 80% will put their AI-recommended gifts on their credit cards. Though not all debt is bad, with card interest rates hovering around 20%, that means for every $5 you spend, you’re handing $1 to your credit card company.
• 65% will use Buy Now, Pay Later (BNPL). BNPL has become massively popular because you don’t get charged interest. But miss one payment, and you’re hit with late fees that quickly add up.
• 58% will use high-interest payday loans. Payday loans have their place. That’s emergencies only. Not holiday shopping. The federal Consumer Financial Protection Bureau has reported that many payday loan customers fall behind, so they take out another payday loan — and soon they owe more than they originally borrowed.

If you’ve noticed the numbers don’t add up to 100%, that’s because respondents will use more than one of these methods to appease their AI overlords.

Here's the problem: NerdWallet reported in October that "nearly 3 in 10 Americans who used credit cards to pay for holiday gifts last year (28%) still haven’t paid off their balances." My fear is that AI will only make that worse.

Trusting AI isn’t intelligent

If some random person told us to spend $700 to $900 more this holiday season, we’d scoff at them. We’d wonder what their angle is.

Indeed, we’ve all developed a healthy skepticism about advertising, online reviews and social media influencers. We constantly ask ourselves, “What’s in it for them?”

Yet AI isn’t altruistic. It’s programmed by people with the same motivations we’re cynical about. I urge you to doubt AI advice just as much as you doubt flesh-and-blood advice.

Then there’s the simple fact that AI still isn’t very bright all the time. I just typed my name into ChatGPT, and it listed me as the author of one book I wrote in 2005 but not the one I wrote in 2013. Most importantly, it doesn’t list my current job. It’s not like that was a recent career move. I’ve been leading in that role for 11 years.

So trust AI as much as you’d trust a random stranger.

How to outsmart AI and save

I even asked ChapGPT, “How can I save on holiday shopping?” The answers were all very obvious: “Make a budget,” “Compare prices” and “Shop sales.”

What wasn’t there: Talk with your friends and family. Be honest and tell them that inflation has taken its toll on your finances — and most likely theirs, too. Set a price cap on gifts.

One thing AI can’t understand is emotion. We overspend during the holidays, not out of greed but guilt. We’re not (just) spending on ourselves, but on those we love. If we’re turning to AI to figure out what to buy them, it’s time to go old-school and have a face-to-face conversation.

AI can’t grasp this concept: I care less about my college-age son and daughter buying me a new shirt than I do spending time with them. If they want to get me something, it can be a handmade coupon offering to go out to dinner sometime. I have a feeling many parents feel the same way. We don’t need AI to tell us that.

Let’s outsmart AI this holiday season by doing what it can’t: looking our loved ones in the eye and asking what’s really important.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Decentralized finance, or DeFi, is emerging as a powerful alternative to traditional banking and investment methods. By offering blockchain-based, peer-to-peer transactions, DeFi seeks to provide users with direct access to financial services without the hassle of intermediaries.

The new services offered by DeFi create a much more transparent and efficient marketplace for new and innovative investors. It opens up possibilities for those previously excluded by traditional banking while providing an advanced platform for seasoned investors to explore.

DeFi offers a revitalized branding of financial movement that reshapes the operational limits of traditional centralized systems. It ushers in tools such as smart contracts and decentralized exchanges to facilitate seamless business performance. With leading industry experts around the world staying active in its progress, DeFi’s role in democratizing finance has allowed it to be thrust into the spotlight as a strategic opportunity for investors.

How decentralization opens new doors

Though well-developed, traditional investment systems are still holding on to inherently outdated methods. Centralized control over financial institutions often means high fees, restricted access and steep entry barriers. DeFi offers an alternative using blockchain-based applications designed to open financial services to anyone with an internet connection. Built on top of decentralized networks such as Ethereum, DeFi applications harness smart contracts: self-executing, enforceable agreements in place of intermediaries.

This peer-to-peer approach allows users to lend, borrow, trade and conduct mainstream financial activities without having to go through a central authority. Innovators may utilize DeFi to identify the best prices and most efficient trading ports for token swaps, allowing diverse groups to participate in the global economy.

DeFi can remove barriers, lower transaction costs and create a more transparent and fair financial ecosystem. This accessibility has drawn a large audience, from highly experienced investors to those who were previously unable to access an investment portfolio of any kind.

New tools, new risks

DeFi is the path to rewriting the script to today’s financial rules, propelled forth by new implementations and opportunities for more user empowerment. Four central innovations — smart contracts, decentralized exchanges (DEXs), yield farming and staking, and the tokenization of real-world assets — usher in this transformation.

1. Smart contracts and ensuring secure transactions. DeFi is built on top of smart contracts, which automate transactions in a secure, user-based manner. These self-executing contracts are coded to follow pre-set rules, meaning that once conditions are met, they automatically execute the agreed-upon actions. This seamless mechanism ensures that all parties adhere to the terms of the contract, further reducing the time lost in a traditional intermediated transaction.

Along with user-centered security, smart contracts also allow DeFi applications to achieve top-level efficiency and transparency. Autonomous in nature, they reduce human error and remove the need for expensive third-party intervention. They are tailor-made for applications ranging from simple lending and borrowing to complex financial derivatives.

2. DEXs and cutting out the middleman. DEXs redefine asset trading by offering a way for users to trade with one another rather than through a centralized exchange. Built on top of the blockchain, DEXs eliminate the middlemen that traditional exchanges require, giving users more control over their funds. The smart contracts powering DEX transactions are made transparent, reducing counterparty risks and marketing themselves as an attractive alternative to traditional exchanges. They also encourage a trading environment that is more open and accessible than simply cutting costs.

3. Yield farming and staking as passive income. The two most prominent passive income-earning DeFi mechanisms are yield farming and staking. Yield farming involves lending assets to DeFi platforms, which then use them to provide liquidity; in return, the user gets rewards, normally in the form of additional tokens. Another way is staking, where one locks up assets to support network operations and earns interest on their holdings.

Those possibilities create new income-generating opportunities for investors by turning their idle assets into profit.

4. Tokenization of real-world assets and expanding access. Tokenization is an innovation that has rebuilt real-world assets, such as real estate or commodities, on the blockchain. In doing so, DeFi breaks down these assets into digital tokens, enabling fractional ownership and purchase or selling smaller portions of an asset previously only available to high-net-worth investors.

The downsides of DeFi

While DeFi presents a promising alternative to traditional financial systems, it is not without its downsides. A closer look at the potential risks and ethical challenges can provide a balanced perspective on its adoption and usage.

Regulatory uncertainty. One of the main challenges facing DeFi is regulatory uncertainty. Current banking regulations, which were developed for centralized systems, sometimes clash with DeFi applications because of their decentralized nature. This ambiguous policy threatens both developers and customers.

For instance, if there are no obvious legal protections, investors may find it difficult to obtain their money back in the case of fraud or platform failure.

Security vulnerabilities in a trustless ecosystem. Despite being innovative, DeFi’s reliance on smart contracts and blockchain technology is not without issues. Due to flaws, hackers and code errors, users have experienced significant financial losses. Furthermore, because blockchain transactions are irreversible, mistakes such as sending money to the wrong address cannot be easily corrected.

The potential for deceit and isolation. Because DeFi is decentralized and partially anonymous, it has been the focus of fraudulent schemes and scams. Customers are vulnerable to phishing efforts and rug pulls, in which developers halt projects after receiving payment without monitoring.

Overcoming the obstacles

The DeFi community is actively working to lower these risks using a variety of tactics. For example, to create frameworks that protect users and foster innovation, DeFi platforms collaborate with authorities. Additionally, smart contract audits, bug bounties and insurance plans are becoming standard practices to safeguard users’ assets.

Although DeFi has the potential to revolutionize finances, its long-term survival hinges on its ability to control its dangers and ethical quandaries. By addressing these issues, the ecosystem can grow into a more secure and hospitable financial environment.

Driving DeFi forward

DeFi’s course of action for the future points toward mainstream adoption and incorporation into finance.

Once DeFi technologies improve to peak performance, analysts are optimistic that more people will start appreciating the many perks. Continuous innovation and interests by investors could make the effects of DeFi huge on worldwide financial systems.

Over the coming five years, I hope to see further integration between DeFi and traditional finance, with decreased tension and a closer sense of approachability in global finance. With platforms such as Uniswap and Compound pushing the envelope, DeFi is set to open doors for both long-term and new investors alike.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

As the new year quickly approaches, people are readying their New Year’s resolutions and goals, hopeful for a brighter year and a new, improved self. But you don’t have to wait until January to start making a change.

There are many steps you can take right now to get ahead on your goals and start 2025 off with a more impactful bang — especially when it comes to your finances. From designing a comprehensive financial game plan to automating your savings and investments, taking these steps now will ensure you set yourself up for success in 2025.

For deeper insights into these steps and more, read on to hear from the members of Kiplinger Advisor Collective and their best tips for a prosperous new year.

Begin with the end in mind
“By starting with, ‘What do I want to achieve in 2025?’ you can then calendar key dates, automate key actions to save for your goal and be more on the lookout for pain points that may cloud the road ahead. It's easier and more fun to achieve goals when you're specific, set milestones, think through what could get in the way and automate whatever possible.” — Joe Saul-Sehy, Stacking Benjamins

Review and reassess your goals
“Now is a great time to review the progress you have made this year on your goals. Reassess those goals based on where you are financially and see if you need to reprioritize based on events that have happened. If you just recently got married or had a child, those are significant life events that necessitate you update your goals to make sure you are ready for this new phase of life.” — Mario Hernandez, Longevity Wealth Management

Design a comprehensive financial game plan
“The most important step anyone can take to protect and improve their financial health is to create a comprehensive financial game plan. A solid financial plan starts with understanding your overall financial picture. Your credit report provides a holistic view of your financial life. Reviewing this will give you the clarity to make informed decisions about protecting your financial health.” — Rod Griffin, Experian

Implement a defined benefit pension plan
“For individuals with regular recurring income from their business of $400,000 or more, consider implementing a defined benefit pension plan. This can shield substantial income from tax. The contributions can be made by September 15 of the following year, but the plan must be in place before December 31 of this year. Special planning may be needed for those with a high number of employees.” — John Goralka, The Goralka Law Firm

Create a monthly household budget
“Creating a monthly household budget sounds so obvious as to be ridiculous, but I know many seven-figure earners who get into serious financial trouble because they’ve budgeted carefully for their business but not themselves. With secure online tools that do the math for you, there's simply no excuse for going into the new year without a personal budget.” — Howard Dvorkin, Debt.com

Automate savings and investments
“Automate savings and investments aligned with specific 2025 goals. First, define clear financial objectives (e.g., emergency fund, retirement contributions) and then set up a budget that allocates funds toward these priorities. Automate monthly transfers to savings and investment accounts to make consistent progress without needing to think about it. Regularly review progress quarterly to stay on track.” — Amrita Choudhary, Wasabi Technologies

Understand your cash flow cycle
“Spend time understanding your cash flow cycle for the upcoming quarters. How much cash do you have and how fast are you spending it? For business owners, having a robust rolling forecast, encompassing financials and operational logistics, is key to setting your business up for success. Using tools like data visualization dashboards can make these numbers more clear and actionable.” — Dan DeGolier, Ascent CFO Solutions

Cut down or eliminate debt
“Take a hard look at your higher-interest consumer debt and plan to pay it down or off entirely. This is crucial if you hope to buy a home, as many loans have specific debt-to-income ratios you must meet to qualify. Your credit score may also improve if you pay down debt. Not only will cutting debt improve your odds of getting favorable mortgage terms, but it'll also free up cash for closing costs.” — Laura Ostrem, Success Mortgage Partners, Inc.

Consider the life you really want
“As you set goals for the year, think past the numbers for financial goals. Instead of aiming for financial metrics, consider the broader life you want to create and how money can support it. For example, think about the work-life balance you want, what that means for the money you'll earn and how to shape your other goals around the impact that has on your financial situation.” — Dana Miranda, YOU DON'T NEED A BUDGET

Establish a habit of regular financial reviews
“Taking the time to assess your finances consistently — monthly, quarterly or at least twice a year — gives you a clear picture of where you are and keeps you focused on where you’re headed. You need to focus on where you want to be and do routine checks to see what adjustments might be needed.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Make a small increase to your 401(k) contributions
“One small step anyone can take to set themselves up for success in 2025 (and beyond) is to increase their 401(k) contributions by just 1%. Many people will get a pay raise in the new year, whether due to inflation or their performance. Since you have yet to get the pay increase, you won't notice the hit to your spending. To paraphrase advertising exec Rory Sutherland, you won't feel poorer, just less rich.” — Michael Gainor, Wells Fargo Advisors

Reduce your monthly bills
“Hack your monthly bills by canceling unused subscriptions, bundling services, increasing insurance deductibles, negotiating rates and lowering your data plan. Compare rates with competitors and switch to save and reduce costs. For example, online-only wireless carriers like Mint Mobile have more affordable plans such as Mint Kids with unlimited talk, text and 5GB of data for just $15 per month.” — Andrea Woroch, Woroch Media Inc. / Andrea Woroch

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

I’ve spent more than 20 years helping people across the country learn about credit and personal finance through a variety of forums and channels and helping people increase their financial knowledge is a personal passion. We know many consumers are hungry for tools and resources to improve their understanding of credit and personal finance. The challenge often is determining the most effective means to reach consumers and disseminate information.

In the early days of my career, this looked like scheduling events on evenings and weekends, printing and mailing brochures and building rudimentary web pages. Over time, print has almost disappeared, and we began reaching consumers via our “online credit advice column” (years later we learned that was among the first blogs in our industry) and engaging directly through social media and video conferences.

Today, we’re entering another new and exciting era with the emergence of generative artificial intelligence (AI) solutions and capabilities.

Generative AI is a technological advancement that promises to revolutionize many industries, much like the introduction of the internet and the smartphone in their time. Just as these innovations transformed how we communicate, access information and manage our daily lives, generative AI has the potential to reshape how we approach learning about and managing our personal finances.

Many Americans are already taking notice. In fact, new research from my company reveals 63% of consumers are familiar with generative AI, including a notable 84% of Gen Zers and 79% of Millennials. Most of these consumers are not just aware of generative AI; they’re actively using it to learn about new topics, including personal finance. Nearly half of respondents have either used or are considering using AI-powered tools to manage their finances, with an impressive 96% reporting positive experiences.

The appeal of generative AI

For many, the draw of the technology lies in its accessibility and efficiency. In many cases it’s free, easy to use, can save consumers both time and money — and they feel good using it.

Our research indicates that 67% of users feel more productive and make decisions faster with the help of generative AI. These tools can assist with tasks such as answering basic finance questions, helping users understand key concepts like credit scores or interest rates and even offering personalized suggestions for creating a budget.

For young consumers who don’t have access to financial literacy programs in school, or parents who are willing and equipped to share financial knowledge, generative AI can be a game-changing resource available at their fingertips.

Three tips to keep in mind when using generative AI

As with any new tool, it’s important to be mindful of potential limitations and responsible use. If you’re currently leveraging or are considering leveraging generative AI to learn more about or manage your personal finances, here are three tips to keep in mind to protect your financial health in the long run:

• Remember the fundamentals. While generative AI can be a valuable tool for financial management, it's important not to overlook traditional methods of protecting your financial health and credit, including checking your credit reports and scores regularly.
• Validate information. Generative AI tools rely on the data they are trained on, and there's a lot of misinformation about credit scores and financial management online. Always verify AI-generated financial advice with trusted sources.
• Use AI responsibly. Many generative AI tools collect and store user data. Be careful about sharing personal information, to help ensure your data remains secure.

There is no one-size-fits-all solution to improving financial literacy and health. Generative AI is a promising addition to the toolkit, but it should be used in conjunction with other financial resources and practices.

By combining traditional approaches to financial literacy with the innovative capabilities of generative AI, consumers can navigate their financial journeys more effectively.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

The Tax Cuts and Jobs Act of 2017 made substantial changes to U.S. laws starting in 2018. One of the most significant changes was to the federal gift and estate tax lifetime exemption.

In 2017, the exemption was $5.49 million. As such, only those estates with gross assets of more than $5.49 million were subject to the estate tax and had to file a federal estate tax return. The TCJA doubled the amount to $11.18 million for 2018, thus exempting additional estates from having a federal estate tax burden. The exemption was indexed for inflation every year and is $13.99 million for 2025. However, the exemption is scheduled to be halved beginning Jan. 1, 2026.

And while many expect this provision to be renewed, there are reasons why that might not be the case.

Why you may want to use the full exemption now

The estate tax exemption is structured so that using the first half of the lifetime exemption for gifts will be counted permanently against the exemption amount. For example, if someone makes a taxable gift of $6 million in 2025, this will lower the remaining exemption to $7.99 million ($13.99 million minus $6 million) at the end of 2025. However, starting in 2026, if the law does not change, that person would have only about $1 million (roughly $7 million minus $6 million) of the lifetime exemption remaining.

However, suppose this person uses all their $13.99 million exemption in 2025. Their lifetime exemption starting in 2026 would be zero. The law does not allow the IRS to claw back any excess exemption used during 2018-2025. Future gifting opportunities would be limited to the annual inflation adjustment of the lifetime exemption. The tax rate for taxable estates of more than $1 million over the exemption amount is 40%. So, using the full lifetime exemption before it is halved in 2026 could result in substantial tax savings.

Reasons the provisions might not be renewed

With a new administration, many assume that all the expiring provisions of the TCJA will be renewed, either permanently or temporarily. This presumption could lead many to believe they can delay using their entire lifetime exemption beyond 2025.

However, the extensions of all the expiring provisions of the TCJA are not a sure thing. There are many reasons why some of these provisions could end permanently on December 31, 2025, without being renewed.

The Republicans will have only a 53-47 majority in the Senate. Unless there are 60 votes to invoke cloture, the Democrats can filibuster any potential legislation permanently. But there is an exception to this rule, a process called Reconciliation, which can be used to pass certain types of legislation, including tax-and-spend bills. The TCJA was passed using Reconciliation. Reconciliation includes a limitation on how much the bill can increase the budget deficit over a certain period. The TCJA had a limitation that the bill could increase the budget deficit only $1.5 trillion over 10 years. Any bill seeking to extend the TCJA provisions will likely have a similar limitation.

One provision expected not to be renewed is the $10,000 limitation on the state and local taxes (SALT) deduction. The SALT deduction mainly affected taxpayers in states with high state taxes. President-elect Donald Trump has vowed to eliminate this limitation.

In 2025, the Republican House majority will be much smaller than it was in 2017. A bill extending the TCJA provisions will likely need virtually every Republican to vote for the bill. Letting the SALT limitation expire may be one bargaining chip to get the bill passed.

The expiration of the SALT limitation would result in a substantial increase in the budget deficit. Thus, there would have to be either a tax increase or the elimination of a different tax cut to offset that increase. Letting the federal gift and estate tax lifetime exemption decrease to its inflation-adjusted pre-TCJA level would be one way to partially balance the increase in the budget deficit caused by the expiration of the SALT limitation.

Don’t miss out on potential tax savings

With the fate of the exemption uncertain, it would be prudent to use the full exemption now while you still can. By adopting this approach, you could save significant dollars in potential wealth transfer taxes that you would have been subject to should the exemption be halved at the end of 2025.

There are many strategies to take advantage of this opportunity to transfer significant wealth to family members. To see which plan is right for you, contact an experienced trust and estate practitioner to review your current plan for possible savings.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

The 25-basis-point Fed rate cut in early November 2024 will help the construction and housing markets, although more cuts will help. Home mortgage rates will lower somewhat, but some buyers still want to wait for more favorable rates unless they have found the house they want and feel that the risk of losing it outweighs a slightly lower mortgage rate.

The Fed sees that the American economy is almost at the 2% inflation target, but going overboard on rate cuts might reignite inflation, something they do not want to do. Also, bond investors who are happy with high-interest returns from bonds and the money markets will prefer to move their money to risk on assets like stocks, crypto or other riskier ventures if the bond returns fall back to the just-above-zero returns of previous years.

The real challenge is how the 10-year Treasury bond yields are doing as well as other factors that could impact the housing markets. As a general statement, if investors and lenders are happy with the 10-year Treasury yield, they would rather keep their money there safely than risk it on things like real estate construction projects, which have a checklist of things that could go right or wrong.

It is important to note that while the Fed directly influences short-term rates, it is the market that drives long-term bond rate prices depending on their outlook and demand/supply considerations. But in general, when future bond cash flows are not to their liking, this is when bondholders look to other riskier assets or cash flow-generating projects (such as real estate).

While the office sector cash flows have been decimated by less demand due to work-from-home and artificial intelligence as well as layoffs, the housing market demand is nondiscretionary. People need a place to live, whether they rent or buy a house. As the population grows, and local economies have good, well-paying jobs for them, people generally want to move up the social ladder. They also want their children to be able to buy their own houses.

Unfortunately, as interest rates were raised by the Fed these past few years, fewer people are inclined to sign up for long-term mortgages, especially if their paychecks are strained by car, credit and student loans as well as rent, food, groceries and energy bills.

Real estate developers, noting how fewer people are leasing offices or buying houses with mortgages, have also cut back somewhat in certain geographies on their efforts. Real estate is heavily debt-financed, and many loans have a debt-service coverage ratio (DSCR), which is calculated by taking the net operating income and dividing it by total debt service that includes the principal and interest on a loan.

Thus, if the developer is earning $1.5 million on the property annually, and the debt service payment is $1 million annually, then the DSCR is 1.5 for that property under a loan. A DSCR of 1.2 to 1.25 is generally the acceptable range. A higher DSCR allows the lender and borrower to sleep well, while anything less than 1.0 is problematic and could trigger some negative contract clauses.

It is important to note that there are huge housing supply backlogs in many areas, exacerbated by less construction that occurred during the pandemic years. However, the sudden rise in interest rates made homebuying prohibitive for many who were just starting to recover from a decreased income stream during the pandemic years as well as high inflation brought about by too much money in the economy due to the government cash injections.

Now that inflation is starting to cool off and approach the Fed's 2% target, everyone (except bondholders) prefers that the rates go back to the point where mortgages become affordable on a monthly payment basis. Higher interest rates, while benefiting bondholders, work against both homebuyers and real estate developers because the more expensive debt raises the pressure on both.

The construction and housing industry is a major contributor to the American economy and gross domestic product (GDP). Lower interest rates will give it life again as this will likely create more homebuyers and demand, more incentives for developers and thaw a static market with few buyers and sellers.

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Many people think of the end of the year as a time for reflection and celebration — a time to look back on all the fun times had, the accomplishments made and all the good yet to come, as well as consider how to improve and better oneself in the year ahead.

There’s also no better time to reflect on past financial choices and prepare for the upcoming tax season. Getting organized now can ensure you’re ready to take advantage of any potential benefits by April and will ensure you’re not scrambling to gather any information at the last minute.

In terms of year-end tax strategies, the members of Kiplinger Advisor Collective have six key recommendations to make that will not only better prepare you for your 2024 taxes but will also make sure you end the year in a smart, thoughtful way.

Check for losses in your accounts
“Look through your accounts and see if you have any losses. If you notice any, think about doing tax-loss harvesting. A common misconception is that you're not allowed to purchase a similar investment right away, but you are. You're just not allowed to purchase the identical investment. If you sell a stock, you could buy a placeholder. Then, after 30 days, repurchase the original stock.” — Michael Gainor, Wells Fargo Advisors

Review and maximize your retirement contributions
“Contributing the maximum allowable amount can significantly reduce your taxable income while building for your future as well. It's a simple yet impactful way to close out the year on a smart financial note. Making this a habit can help in setting you up for future success.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Look at tax projections with your adviser
“Review tax projections with your adviser to see if any of the following make sense: Roth conversions, tax-loss or -gain harvesting, charitable giving or bunching, HSA contributions and planning around taxable interest impacts with rates being higher than they have been in years past. These items can help clients lower both their year-to-year and lifetime tax bills.” — Doug Oosterhart, LifePoint Planning

Defer income to 2025
“To end the 2024 tax season smartly, review your taxes with an adviser. Maximize retirement contributions, consider tax-loss harvesting and assess charitable contributions or Roth conversions. If you’re nearing income thresholds, defer income to 2025 to stay in a lower tax bracket. These strategies, combined with organizing records, can reduce taxes, boost savings and set a solid foundation for next year.” — Amrita Choudhary, Wasabi Technologies

Consider tax-loss harvesting for underwater assets
“If you have assets that are underwater, talk to your accountant about tax-loss harvesting. You can sell those assets you no longer care about for a loss and then deduct that loss from your capital gains in your other net positive gain assets in your annual tax return.” — Zain Jaffer, Zain Ventures

Get a clear understanding of where you stand
“Skip the last-minute scramble in tax season. Instead, consider year-end tax projections with your adviser to see where you stand. This simple step reveals your options to lower taxes, improve take-home pay and make smart moves while they’re still on the table.” — Dennis McNamara, wHealth Advisors

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Decades ago, homeownership was a realistic goal for many people. In recent years, sky-high real estate prices and increased costs of living have made it harder for would-be buyers to envision themselves ever achieving that milestone.

Though the path to homeownership can be difficult in today's economy, it's still possible with the right strategies. Here, members of Kiplinger Advisor Collective recommend practical tips for moving the needle on your goal of owning a home.

Find a fixer-upper in a lower-demand location
“Location, age and condition of the home matter when it comes to price. Find an older home that may need some work in a location not so high in demand. Then, time it to secure a mortgage with a decent rate to lower mortgage costs. Budget for all homeowner costs, such as insurance, property tax, utilities and home services. Sacrifice other areas of life (travel, entertainment) to save money and buy an asset.” — John Bodrozic, HomeZada

Consult with a lender
“Talk to a lender first. A loan officer will review your current financial situation to see if you qualify for state down payment assistance programs or home loan programs that require low or no down payments. If you're not quite eligible for a loan now, the loan officer can suggest steps to improve your creditworthiness, for example, by boosting savings and paying down high-interest consumer debt.” — Laura Ostrem, Success Mortgage Partners, Inc.

Avoid waiting for your dream home
“I recommend buying an affordable starter home or fixer-upper rather than waiting for your ‘dream home.’ This way, you can start building equity and gain homeownership experience. Making a smaller initial investment reduces your financial risk if market conditions or your own personal and economic conditions change.” — Hari Prasad Josyula, DowJones

Explore down payment assistance programs
“Most would-be homebuyers don't know that they can get down payment assistance and help with closing costs from a variety of sources. City, county, state and federal programs, as well as nonprofit initiatives, offer $5,000 to $50,000 to first-time and move-up buyers. Help can even come from sellers, as mortgage lenders allow buyers to get a 3% seller credit.” — Lynnette Khalfani-Cox, TheMoneyCoach.net LLC

Focus on improving your financial health
“Start by improving your financial health. Focus on saving for a larger down payment and boosting your credit score to qualify for better mortgage terms. Explore first-time homebuyer programs or government-backed loans with lower requirements. Being patient and financially prepared can help you make homeownership more attainable, even in a competitive market.” — Stephen Nalley, Black Briar Advisors

Consider moving to an area with a low cost of living
“Take advantage of down payment assistance for first-time homebuyers in your state, as well as VA, FHA and USDA loans that make mortgages accessible to people with low credit scores and little savings. If homeownership is a top priority, you can also consider moving to an area with a low cost of living, especially if you can work from anywhere.” — Dana Miranda, YOU DON'T NEED A BUDGET

Pay off your credit cards
“You shouldn’t buy a home until you pay off all, or at least most, of your credit cards. It simply makes no sense to search for the best mortgage rates of 6% to 9% when you’re paying 25% or more on your credit cards. Buying a home is expensive, but so is maintaining one. If you can’t pay off those cards, then you can’t, say, fix a leaky sink without adding even more to your balances.” — Howard Dvorkin, Debt.com

Pare down your 'must-have' list
“Even on a modest income, homeownership is possible if you’re willing to compromise on things. Review your ‘must-have’ items to see which areas can be put on hold until finances allow. For example, while having a rent-paying roommate may not be ideal, it could help you build equity in a home. Or, you could buy a smaller home that, once you outgrow it, you could rent out when you upgrade to something larger.” — Justin Donald, Lifestyle Investor

Look for properties with an ADU
“One tip for aspiring homeowners is to consider properties with an accessory dwelling unit (ADU). Buying a home with an ADU offers you the potential to rent out the additional unit, creating an income stream that can offset mortgage payments. This approach can help bridge affordability gaps and make homeownership more manageable while turning your home into a long-term investment asset.” — Greg Welborn, First Financial Consulting

Determine a number you feel comfortable with
“First, figure out the expenses you cannot cut and the discretionary ones that you can. Then, decide (for yourself or your family) what you can do without. After this, you can figure out how much you can safely pay monthly over the next few years without going overboard. This ensures you will not default on your multiyear mortgage. Wait for interest rate cuts so your monthly mortgage payment becomes less.” — Zain Jaffer, Zain Ventures

Calculate the down payment you'll need to make
“Make sure you don't buy more than you can afford. If you feel you can't afford a mortgage now or ever, understand that the more you put down, the lower your monthly payment will be. Find out what monthly payment you can afford, run the numbers to see what amount you will need to put down and start saving. At the same time, start improving your credit score.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Build a foundation of liquid assets
“Start by building a foundation of liquid assets. Invest in cryptos, options and stocks. This approach can accelerate wealth growth, creating a financial base that could later be leveraged for a down payment on a home when the time is right. Diversifying in these markets offers flexibility and the potential to build capital faster than traditional savings alone.” — Dr. Clemen Chiang, Spiking

Create a dedicated home savings fund
“Start by building a dedicated home savings fund and automating contributions to it, even if it’s small amounts. Improve your credit score to qualify for better mortgage rates and explore first-time homebuyer programs or low down payment options. Consider purchasing a smaller or fixer-upper home in a more affordable area as a stepping stone to homeownership.” — Amrita Choudhary, Wasabi Technologies

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

As we approach the end of the year, I’ve been fielding more and more questions from clients about reducing income taxes. While there are short-term strategies such as deferring income or accelerating deductions, they provide only temporary relief; they don’t offer long-term consistent tax savings.

To achieve enduring tax savings, consider investing in long-term strategies that may provide tax-free income year after year. Though these vehicles all have certain rules and are designed for specific purposes, several strategies are worth exploring.

529 plan accounts

529s were created by Congress in 1996 to provide a way for parents to save for college for their kids. The earnings within the account are tax-deferred, and the withdrawals are tax-free as long as the money is used for educational purposes. These accounts have grown to offer flexibility, such as changing the beneficiary to another family member and paying K-12 tuition expenses. Student loan repayments are also now considered eligible expenses. Some states also offer tax deductions or credits for contributions to 529 college savings plans.

Health savings accounts

HSAs are a unique way to avoid paying income taxes. These accounts, intended for medical expenses, are funded on a pre-tax basis. The interest earned in the account is tax-deferred, and when the funds are eventually withdrawn, they are tax-free provided they are used for qualified medical expenses. In addition, unused funds can be rolled over into future years and can be used for retirement expenses after age 65. The only requirement is to enroll in a high-deductible health plan. In many circumstances, it can be a powerful tax-saving tool.

Roth IRAs

These are retirement accounts funded with after-tax contributions, where earnings grow tax-deferred. They can provide a tax-efficient way to access funds during retirement without creating a tax burden.

Withdrawals are tax-free once you reach age 59½ and have held the account for at least five years. While early withdrawals are generally subject to a 10% penalty, Roth IRAs can be thought of as accounts that can be used strategically, especially during retirement to provide income without the tax hit.

Cash-value life insurance policies

These policies accumulate cash value based on dividends paid by an insurance company each year and are tax-deferred vehicles. Some policies also have loan provisions that allow you to withdraw money against the cash value. Since the withdrawal is technically a loan, the withdrawal is tax-free. In addition, in most cases, the loans are not required to be paid back.

However, any outstanding loan upon your death is deducted from the death benefit paid to your beneficiaries. In addition, the death benefit paid to beneficiaries is typically income tax-free. Life insurance policies are not traditionally considered a way to generate tax-free income. However, the loan feature could be a way to pay for expenses without increasing income taxes.

Strategies described herein are made possible by the use of policy loans against the cash value of the policy. Policy loans reduce the death benefit of a contract in the amount that is outstanding and may include interest, as well. Employing a strategy using policy loans has the potential to be classified as a modified endowment contract, which poses additional consequences.

Municipal bonds

These are an investment vehicle that can be purchased in a brokerage account. Municipal bonds can be purchased individually, through a mutual or exchange-traded fund (ETF). Typically, municipal bond interest is exempt from federal income tax and, in some states, from state and local taxes. Municipal bonds can provide diversification benefits and a steady tax-free income stream.

Each strategy has its own set of benefits and drawbacks. Before making any financial decisions, consult with your financial adviser and tax adviser to understand the specific implications of your circumstances and to choose strategies that align with your long-term financial objectives. By carefully considering these strategies and seeking professional advice, you can optimize your tax planning and work toward a more secure financial future.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Growing at a rate much faster than the average rate for all other occupations, the job outlook for personal financial advisers entering the field is a bright one, according to the U.S. Bureau of Labor Statistics. And while no industry seems immune from technological and cultural changes, many of the factors that made someone a successful financial adviser years ago are likely to make someone successful now. It’s all about understanding your clients and offering a service they can’t get from anyone else.

Having each been in the financial industry for some time now, the advisers and financial experts of Kiplinger Advisor Collective know what it takes to build successful businesses in the advising space. Below, they offer their top tips for anyone new to the industry on what they can do to set themselves apart and launch a profitable business from the ground up.

Improve your empathetic listening skills
“Build skills that help you understand the client's perspective, acknowledge their emotions and improve your ability to respond with compassion and support. It is my belief that the better you understand the client, the better adviser you can be.” — Nicholas Pope, Washington Avenue Advisors

Prioritize building a niche
“Developing expertise in a specific area of financial advising — whether it's retirement planning, high-net-worth strategies or tax-efficient investing — sets you apart and attracts clients looking for specialized knowledge. This focus not only helps you provide deeper insights and solutions, but it also establishes your reputation as a go-to adviser in that field.” — Greg Welborn, First Financial Consulting

Understand your own definition of success
“Consider how you would identify and define a successful adviser. One might use many variables to define success. Whether it is assets under management, how many plans you have created and implemented, how many clients have felt that your services were valuable or something else, understanding what you consider a definition for success will be more apt to lead you in that direction.” — Deborah W. Ellis, Ellis Wealth Planning

Go where you can grow
“Go where you can grow … your skills! Anytime I speak with a prospective adviser, I suggest they go wherever the learning curve is steepest to dial in their technical planning skills. Too many advisory businesses prioritize sales and asset gathering but do little in the way of actual planning. If you're playing the long game, becoming a quality planner behooves you.” — Dennis McNamara, wHealth Advisors

Make client success your main goal
“Financial advising is a service business. This means you should only succeed and make money if the client makes money. Occasionally, there may be some instances where this is not your fault. But in general, you should succeed because the client succeeds. If this is not your goal or what you are seeing, you should leave this industry ASAP.” — Zain Jaffer, Zain Ventures

Pave your own path
“Accelerating rates of change have driven the industry forward from mainly financial product sales to many new evolving business models — from a niche market focus like doctors-only to investment specialties, advanced holistic financial planning and many others. You have a unique opportunity, so take time, think strategically and build a mindset to create your own path as the adviser you want to be.” — Bill Hortz, Institute for Innovation Development

Become someone clients can trust
“Focus on being a trusted adviser. Be trustworthy and genuine, and build true relationships. Always have your client's best interests at heart. Finances can be deeply personal, and you need to be genuine and listen to the client’s concerns. Success comes from putting clients first and putting yourself in their shoes.” — Bob Chitrathorn, Wealth Planning By Bob Chitrathorn of Simplified Wealth Management

Prioritize networking and relationship-building
“Networking is essential for building relationships, gaining referrals and expanding your client base. Connecting with other professionals and clients not only opens doors, but it also helps you stay updated on industry trends and best practices. A strong network provides valuable support and insights that can accelerate your growth and success as a financial adviser.” — Dr. Clemen Chiang, Spiking

Remember to be patient
“Building a practice takes time. Rushing it can set you back further if you onboard bad clients or spin your wheels with ‘cheat codes.’ There is no substitute for learning, becoming well-known in the community and focusing on your niche or special skill set. Your clients will notice, and they are why you are in the business in the first place.” — Stephen Kates, Annuity.org

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.