Copper Beech Advisors Blog

Health Savings Accounts (HSA)
Are you one of the growing number of employees who find themselves with an HSA as part of your health insurance offering by your employer?  Do you take full advantage of your ability to make a contribution?

First of all, if you are eligible for an HSA, that means that you also have a high-deductible health plan which is a requirement for you to have an HSA in the first place.  If your employer opened this account for you, you may not have taken the time to learn about it's features and then find yourself with questions at tax time.

It's an especially good benefit if you earn a good income and find many of your tax deductions and exemptions limited in one way or another.

Here is how an HSA works and why it's such a valuable tax deduction.

Pay Yourself First
Are you currently maxing your contribution to your 401k or 403b?  If not, you may be missing some big tax and retirement benefits.  Three of the most important things to understand in order to capture these benefits are:

• Reducing Your Current Tax Bill
• Compounding Investment Dollars
• Clearing the Hurdle to Get Started

Buying the Stairway to...Retirement?

What is your plan for making the transition from working life to retirement? Will you need to depend on money that you've saved while you were working?  Most people do. 

How then will you replace your paycheck in a way that is dependable and gives you the confidence that you will be able to weather any financial storms that may arise? 

Consider building a bond ladder.

Hearsay

You may have heard your neighbor say he can.  Or a family member.  Or a co-worker.  It may be a question that you kick around in your head once in a while.  Especially when it seems "obvious" that it is time to buy or sell in the market. 

Secrets

Maybe there is a secret rule out there that you could find, if only you knew the right person?  With all of the "smart" people that claim to have a special strategy to beat the market, how do you know who's right?  

What if there is a better way to answer the question? 

Imperfect

At the end of the day, your life does not fit any perfect guidelines as you encounter the ups and downs that make life interesting.  Being prepared for both is fundamental to financial piece of mind and to being confident that you are able to handle every situation.  Cash flow is where the rubber meets the road.  How you use it determines how well prepared you are.

But how does this fit into a Stock Options discussion?  In the first part of this series we looked at how to use stock price to make the best decisions about when to exercise your options.  In the second part we added taxes to the mix, showing you how to use the flexibility of owning executive stock options to achieve the best tax result. 

Now we will add the last key to the puzzle.  Making sure that your life is integrated with your stock options decisions to give you the greatest peace of mind and least amount of stress.  

Unequal Burden

In our first of 3 posts on how to approach executive stock options, we covered how to evaluate when to sell your options as the stock price moves up and down.  In this post, we will cover the 2nd important factor.  Taxes.

Three Key Factors

1. Stock Price
2. Taxes
3. Cash Flow - Your Life

If you decide to sell your stock options without factoring in the tax effect, you may be leaving significant money on the table...

As the summer temperatures fade in and out of the hot zone, so too does Greece fade in and out of the news.  Constant headlines about the possibility of a Greek default are accompanied by an equal number of predictions about what that might mean for world markets.

Some interesting facts about Greece.  Did you know that the economy of Greece is about half the size of the state of Ohio?  Further, while its debt is large at 180% of its GDP, Greek debt represents about one quarter of 1% of the overall world debt markets.  Everyday, markets are digesting the latest news almost instantaneously, as reflected in current prices.

The question then becomes, what to do about it? 

A Shiny New Car?

How do you decide when to sell your executive stock options?  When it's time to buy a new car?  When the college bill comes due? How can you be sure that you're getting the most out of these key pieces of your compensation?

If you are a successful executive at a large corporation, there is a good chance that you have received some employee stock options and/or some restricted stock as part of your compensation.  You are then confronted with having to decide when to exercise your stock options.  To make a great decision, you should actually consider a minimum of three factors.  In this post, I'll describe all three factors and then focus on one, stock price, in a little more detail.

I Make a Good Income

Do you make a good income but feel like your spending is out of control? Are you surprised that despite having a good job, you consistently feel like you're spending more than what's available? 

First, let's identify one of the problems.  Credit Cards.  Yes, in today's world of instantaneous electronic payments and impulse buying at the click of a smartphone, credit cards are a primary reason why your spending may be out of control.  But why?

Credit Cards

Credit cards are where the rubber doesn't meet the road.  That is because your credit card limit is typically higher than whatever your monthly income is.  While you may have a general idea of how much you think you can spend, it can be surprising how quickly the $100 or $200 purchases add up to thousands.  If you have a spouse who uses the same card, multiply times two.  Put two people spending indepdently into the mix and it's not hard to see how spending can grow, seemingly on it's own. 

Is there a better way?  Thankfully the answer is YES.  You establish a set amount that you can spend before hand and then spend until the money runs out and no more.  Easier said than done, right?  Here is how you do it.

If someone told you that their financial advisor was on the right side of history, would that sound like a pretty bold statement?  What if that person was Jack Bogle, the founder of Vanguard and the world's first index fund?  Would you be more inclined to listen?

That is exactly what Jack Bogle said about the Alliance of Comprehensive Planners when he came to speak to our group in November 2014 at our annual conference, right here in Philadelphia.