In this episode, I delve into the important decision of choosing the right savings account for your child's future, a critical step for new parents aiming to ensure financial security for their children. I cover essential account options such as 529 plans, UTMA accounts, taxable brokerage accounts, and Roth IRAs. Using a comprehensive analysis, I demonstrate how to evaluate these options, offering practical examples and considerations. I also explore the tax benefits, flexibility, and impact on financial aid eligibility of each account type. Finally, I highlight how a family's specific financial goals and situation can guide the choice of the most suitable account, stressing the need for tailored advice based on individual circumstances.

Key Takeaways:

• What are the major benefits of a 529 account? What do I do with the account if my child chooses not to go to college?

• What is the Uniform Transfers to Minors Act (UTMA) and how can it be used to set my child up for financial success?

• Should I use a taxable brokerage account? What flexibilities would this offer my child?

• How soon can I set up a Roth IRA for my child?

• With all of these accounts, how can I layer them to make the most of my preparation?

Key Timestamps:

(00:00) Introduction: Best Accounts to Use for a New Child

(00:37) Exploring Account Options: 529, UTMA, and More

(01:57) 529 Accounts: Benefits and Considerations

(03:41) Taxable Brokerage Accounts: Flexibility and Benefits

(05:53) Roth IRA: Long-Term Savings for Your Child

(06:41) Conclusion: Building a Financial Framework for Your Child

(07:21) Outro and Additional Resources

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, family financial planning, college funds, 529 accounts, UTMA, Roth IRA

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/44

I tackle the frequently asked question of whether to buy or rent in a new location, which is especially pertinent for military families or those with jobs requiring frequent relocations. I cover essential considerations such as mortgage interest rates, down payments, and financial health. Using NerdWallet's calculator, I demonstrate how to evaluate these factors, offering a case study of a client's situation. I also explore the impact of interest rates, transaction costs, and the amortization schedule. Lastly, I discuss how financial stability may influence the decision to rent or buy, emphasizing the importance of personalized advice based on one's unique circumstances.

Key Takeaways:

• How long should I stay in a place if I choose to buy?

• How can I take advantage of the different financial tools, like a VA Loan, to help me make my decision?

• How does the interest rate and down payment affect the amortization schedule?

• How to factor in savings, debt rate, and other budgeting factors into a decision to rent or buy a home.

Key Timestamps:

(00:00) Introduction: Buy or Rent?

(00:51) Calculating Cost to Rent vs Buy

(01:43) The Impact of Interest Rates

(03:55) Down Payment Considerations

(05:46) Client Case Study

(07:35) Conclusion and Final Thoughts

(08:13) Outro and Additional Resources

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, cost to rent, mortgage payments, interest rates, amortization schedule, NerdWallet

Mentions:

https://www.nerdwallet.com/

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/43

I explore the common question of whether to keep a house as a rental property or sell it. Using a recent case study of a 39-year-old client from Virginia, I break down the detailed financial analysis involved. The client's home, valued at $480,000 with a $431,000 mortgage at a 5.63% interest rate, would result in a monthly deficit of $1,074 if rented out. My comprehensive walkthrough includes considerations of rental income, property management fees, taxes, maintenance, and vacancy rates. To wrap the episode up, I compare maintaining the property as a rental versus investing in the stock market, ultimately guiding the client to sell the property. Listen to this episode if you’re considering renting or selling your next home.

Key Takeaways:

• Is it always a good idea to keep a property as a rental investment when moving to a new home?

• How does a high-interest rate impact the financial viability of renting out a property?

• What are the comprehensive costs and factors to consider when deciding between renting out a property and selling it?

• How do the long-term financial outcomes compare between maintaining a rental property and investing in the stock market?

Key Timestamps:

(00:00) Introduction: Rent or Sell Your House?

(00:36) Case Study: Analyzing the Numbers

(01:18) Financial Breakdown: Costs and Considerations

(04:17) Comparing Investments: Real Estate vs. Stock Market

(08:32) Conclusion: Making the Right Decision

(09:34) Download the Ultimate Military Finance Checklist

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, property management fees, taxes, HOA, insurance, home maintenance costs, vacancy rates, real estate vs stock market, real estate appreciation, stock market return, mortgage interest rates, investment viability, monthly cash flow analysis

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

https://www.baskinfp.com/checklist

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

https://calendly.com/erik_bfp/intro

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/42

Let’s discuss how to take a holistic view on finding a mortgage that works for your situation. There are various mortgage types, including 15-year and 30-year conventional loans, 5 year adjustable rate mortgages, 30 year VA loans, all with different down payment options, and FHA loans. With buying a house being such a large decision, let’s examine these options, emphasizing the importance of considering both qualitative and quantitative factors in your financial situation. We’ll go through detailed breakdowns of what your monthly payments and total interest costs over various time periods might look like, highlighting how different choices can impact the lifespan of your loan. Tune in, as I aim to empower you with comprehensive insights to make well-informed decisions regarding your next home purchase tailored to your long-term goals.

Key Takeaways:

• Given your timeline and down payment, what will your mortgage cost in fees and interest?

• How does putting 5% down on the VA loan drastically improve your home buying situation?

• Should you plan on refinancing your mortgage in the near future?

• What qualitative factors should you consider when getting ready to purchase a home?

  
  

Key Timestamps:

(00:00) Introduction to Mortgage Types

(01:12) Overview of Mortgage Options

(02:56) Loan Calculator: Down Payment, Monthly Financing, Loan Term, & Interest

(04:36) Comparing VA and Conventional Loans

(06:02) Long-Term vs Short-Term Mortgage Considerations

(08:53) Final Thoughts and Recommendations

(10:48) Conclusion and Additional Resources

Key Topics Discussed:

Home mortgage, conventional, government backed, fixed rate, adjustable rate (ARM), Veterans Affair, VA loans, FHA, first time user, subsequent user, refinancing, interest rates

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

I tackle the common question, "Should I stay in the military or get out?" by diving into a real client case study. And I promise, if you do, you don’t have to live under a bridge or eat cat food the rest of your life. My client, an Air Force major with 13 years of service, is contemplating leaving the military and is exploring three scenarios: immediately transitioning to a civilian job, joining the reserves, or completing 20 years of service. I analyze each scenario in depth, examining the financial implications, potential VA disability benefits, and retirement income projections. Throughout the episode, I underscore the importance of combining quantitative data with qualitative aspects to make the best decisions for one’s future. In conclusion, I also provide a detailed breakdown of the pension's value and its civilian equivalent.

Key Takeaways:

• What’re the Financial Benefits in Retirement Pension of Joining the Reserves?

• A Walkthrough of a Quantitative Analysis of 3 Scenarios: Leaving the Military, Joining the Reserves, and Staying for 20 Years of Service

• What Will Your Monthly Retirement Income Look Like?

• Calculating True Military Pension Value: Will a $509,000 Salary Compare?

Key Timestamps:

• (00:00) Should I Stay in the Military or Get Out?

• (00:22) Case Study: Air Force Major at a Crossroads

• (02:26) Scenario Analysis: Getting Out with No Reserves

• (03:52) Scenario Analysis: Getting Out and Joining the Reserves

• (05:28) Scenario Analysis: Staying in Until 20 Years of Service

• (07:37) Financial Comparison: Military vs. Civilian Income

• (09:39) When a $509,000 Salary Still Doesn't Replace Military Benefits

• (10:32) Download the Ultimate Military Finance Checklist

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, Veteran Finances, Military Pension, VA Disability, Military Reserves, Civilian Income

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

40. Stay In or Get Out? The Military Pension (baskinfp.com)

I discuss the 'Profit First' system by Mike Michalowicz, which helps business owners and individuals manage their finances effectively. The concept involves setting predetermined and strategically assigned percentages for various financial categories such as profit, operational expenses (OPEX), taxes, and owner’s compensation. I explore how to apply 'Profit First' principles to both business and personal finances, including setting up automation to manage cash flow efficiently. I outline my own financial framework and share practical tips for merging business and personal finances to achieve financial goals. I encourage listeners to be intentional about their financial management to ensure security in their future.

Key Takeaways & Timestamps:

• (00:00) Introduction to Profit First

• (01:15) Understanding Profit First from a Business Lens: Profit, OPEX, Tax, Owner’s Compensation

• (04:44) Applying Profit First to Personal Finances: Savings, Fixed Spending, Flex Spending, Non-monthly Spending

• (07:44) A Personal Example of How Profit First Works in our Business Income

• (09:02) A Personal Example of How Profit First Works in our Personal Budget

• (11:18) Concluding Thoughts

• (13:09) Download the Ultimate Military Finance Checklist

  
  

Mentions:

Profit First

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

I dive into the complexities of understanding tax returns. I share my yearly process of reviewing every client's tax return to identify forward-looking planning opportunities and to correct any errors from previous reporting. I discuss the importance of Roth contributions, the implications of the Tax Cuts and Jobs Act, and strategies for managing business and personal taxes, including the use of Schedule E and the benefits of regularly reviewing taxable interests and dividends. Further, I cover the importance of choosing between itemized and standard deductions, the impact of various income sources on tax obligations, and the overall strategy for financial planning and tax optimization for military families and veteran business owners.

Key Takeaways & Timestamps:

• (00:00) Introduction

• (00:51) Deep Dive into Tax Return Analysis

• (01:35) Exploring Tax Planning Opportunities

• (01:56) Understanding Taxable Income and Tax Brackets

• (02:24) Roth Contributions: A Strategic Move

• (03:21) Capital Gains and Investment Income Insights

• (06:58) Navigating Schedule E and Business Income

• (08:25) Maximizing Schedule B Income and Dividends

• (09:50) Standard Deduction vs. Itemizing

• (11:00) Concluding Thoughts

• (11:34) Download the Ultimate Military Finance Checklist

  
  

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/38

In this episode, I delve into the benefits and mechanics of donor advised funds (DAFs) and their role as a savvy tax strategy for charitable giving. If you're a high-income earner who's both charitably inclined and invested in the stock market, this is for you. I'll break down how DAFs function, highlighting their tax advantages, especially in light of the 2017 tax changes, and identifying who stands to gain the most from utilizing them.

Drawing from real-life scenarios, I'll show you how DAFs can yield substantial tax savings. By allowing individuals to donate appreciated securities or cash, claim immediate tax deductions, and then disperse these funds to charities over time, DAFs offer a strategic approach to giving back.

Throughout the episode, I'll differentiate between those best suited for DAFs and those who might not reap as many benefits. I stress the importance of having a charitable mindset, discuss the potential tax ramifications of appreciated securities, and consider how the standard deduction impacts charitable contributions.

My goal is to provide listeners with actionable insights to support their favorite causes while optimizing their financial plans. So, if you're eager to make a difference while making the most of your resources, tune in for some valuable guidance.

Key Takeaways & Timestamps:

• (00:00) Introduction

• (00:54) The Tax Mechanics of Donor Advised Funds

• (04:01) Who Should Consider Donor Advised Funds?

• (05:56) Who Might Not Benefit from Donor Advised Funds?

• (07:36) Illustrating the Impact of Donor Advised Funds With an Example

• (10:59) A Recap of What Criteria to Consider about Donor Advised Funds

• (11:48) Download the Ultimate Military Finance Checklist

  
  

  www.baskinfp.com/post/37-donor-advised-funds-one-of-the-most-powerful-tax-planning-tools

  
  

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com