Tag: Prof Note

19 November 2018

 

Question: According to MSN: Money, what are 10 things you cannot deduct from your taxes anymore?

 

Central bankers face a ‘world full of uncertainties’ – Pg. 2

–          Central bankers much as “the ability and agility to manoeuvre though the current world that’s full of uncertainties”

–          The most pressing challenge for the ECB emanates from Italy.  The government’s plans to run a substantial budget deficit have led to clashes with the commission

 

US real estate – Pg. 7

–          …Opportunity Zones…in simpliest terms, it allows investors to reduce their capital gains by investing in deprived areas

–          …the proposed Opportunity Zones have brought together some unlikely bedfellows, with the backers including Obama progressives…Manhattan allies…and Silicon Valley pioneers

–          …Opportunity Zones may one day come to be seen as the boldest economic development plan for poor areas in a generation.  But they could also send up presenting the most generous tax deal to the rich in decades

–          The revelation that the new Amazon headquarters in Long Island City is located in one of these Opportunity Zones has only increased the interest in – and scrutiny of – the proposal

–          There is a long history of trying to bend the tax code to lift up impoverished areas.  It is a matter of wonkish debate whether Opportunity Zones will fare any better than previous efforts

–          …the aim is to shift some of the estimated $6.1tn of capital gains built up in the US – particularly in the easy-money years that followed the financial crisis – to deprived communities

–          The authors of the plan settled on a simple incentive: allow investors to defer capital gains – from the sale of property, stocks, a business, anything – as long s they reinvest the profits in one of 8,700 Opportunity Zones around the country.  These are deprived areas chosen by each of the states where the average income is less than 80% of the surrounding area or poverty levels are above 20%

–          For those who qualify, their original capital gains tax will be reduced by 10% if they hold the new investment for at least five years.  It will be cut by 15% after seven years.  After 10 years, there is an added bonus: any profits generated from the Opportunity Zone investment become tax-free

–          There is also the fact that real estate developers – renowned for their determination to avoid taxes – are expected to be big users of the funds.  At present, their favoured tax vehicle is a “1031 exchange”, which allows a developer to defer capital gains by ploughing the proceeds from one property sale into another property investment.  Opportunity Zones have been described as a 1031 exchange on steroids

–          The great appeal of Opportunity Zones, … is their flexibility – and the fact that investors can steer as much, or as little, of their capital into worthy projects as they see fit

–          Investors cannot simply park their money in a vacant lot and reap the benefits.  They must increase the value of a business or property by 100% before the investment can be sold on.  That would be far easier to accomplish in a poor neighbourhood than, for example, an up-and-coming part of Brooklyn

–          (Prof Note: For the past months I have been spending a majority of my time working on Ozone projects.  If you are not familiar…GET FAMILIAR!)

 

Answer: (1) Personal exemptions; (2) Alimony; (3) Non-military job-related moving expenses; (4) Home equity loan interest; (5) Theft Losses; (6) Casualty losses not from a disaster declared by the president; (7) Employee business expenses; (8) Investment expenses; (9) Tax preparation fees; (10) Legal fees paid on an award, judgment or settlement

17 November 2018

 

Question: According to MSN: Money, what are twenty (20) side hustles that will make your salary soar?

 

German and US banks drawn into Danske laundering probe – Pg. 10

–          Three big US and German banks have become embroiled in the criminal probe of Danske Bank’s 200bn (euro) money-laundering scandal as US prosecutors examine their handling of cross-border payments for lenders

–          Deutsche Bank, Bank of America and JPMorgan Chase acted as correspondent banks, providing a link to the US financial system for Danske’s Estonian branch (Prof Note: The loss of a correspondent bank is extremely problematic for smaller local banks in smaller regions.  It can signal “loss of confidence” to much worse for the institution.)

–          The worst-case scenario for Danske is if the US Treasury – which has said it is taking an active interest in the matter – designates it “a financial institution of primary money laundering concern”, which would force US banks to stop handing dollar transactions for it (Prof Note: This will also be a HUGE issue for businesses transacting in the region as they must find other means to transact.  Western Union is limited to $2,000.00/day and must be physically transacted.  Individuals are legally limited to carrying $10,000.00 (or less) on airplanes.  This can cripple a smaller nation and the businesses operating within.)

–          (Prof Note: In some countries we must actually provide contracts and invoices to financial institutions to pay our vendors.  This is problematic due to proprietary pricing of some products and pre-negotiated rates.  In some cases, when proprietary pricing was an issue, we have had to validate transactions with letters by international U.S. law firms, i.e. increasing the cost of the transaction greatly which is then passed on the payee!  International settlement is barely covered in an International Finance class but can destroy a transaction.  The worry of financial sanction is so great that we have had local banks drive by our sites to verify receipt of product.)

–          (Prof Note: We had a crew walk off one of our jobs this past month due to nonpayment, this after they had had our check for two weeks (the account was overfunded, i.e. the money was there).  The local bank would not honour the check due to the size despite assurance from our counsel (international and local) and written statements.  Best we were able to determine was there were issues with the subcontractor.  Regardless, we (which really means them) had to incur the cost of remobilization and start-up costs…..laundering is real and a global issue)

 

Digital estate agents battle to build on hype – Pg. 12

–          This “i-buyer” business was pioneered by dedicated start-ups such as four-year-old Opendoor.  But Redfin entered this market last year with its Redfin Now service, albeit on a small scale.  The property listing site Zillow launched its own version, Zillow Offers, in pilot form the same year

–          Shares in Redfin have shed 52% of their market value this year….

–          “Real estate is very fragmented, there are relatively low barriers to entry to get into the business of selling houses, the products are undifferentiated and there’s no customer loyalty.  That leads to this natural fragmentation.”  (Prof Note: While I agree with this quotation, I will strongly state one needs to find the highest quality people, especially in residential, and one needs to have loyalty.  The issue is that individuals, in my opinion, transact so little in real estate over a lifetime that the average layman cannot develop an expertise in the largest transaction of most people’s lives.  I am blessed to be surrounded by some of these high-quality persons and so very happy when I refer them (I do receive a bottle of hooch) to a former student and/or peer and learn of the successes!)

–          An even greater change to customer experience comes with the “i-buyer” model, in which companies such as Opendoor take homes on to their balance sheets rather than acting as agents

–          Opendoor and rivals, such as OfferPad and Redfin, generate “instant” offers based on data covering homes nearby.  They offer completions in as little as three days, buying homes for 95 to 98% of their market cost while charging fees of 6% or more….

–          (Prof Note: Real estate is such a relationship business.  You have to have relationships and years of knowledge and experience.  Be careful when selecting real estate agents/brokers.  Always seek a recommendation from a trusted source!)

 

Answer: (1) Bartender; (2) Brand Ambassador; (3) Data Entry; (4) Event Assistant; (5) Focus Group Participant; (6) Food and Beverage Delivery Driver; (7) Freelancer; (8) Hair salon or spa receptionist; (9) Host or barback; (10) Lawn maintenance worker; (11) Lifeguard (Prof Note: My summer job in High School); (12) Nanny or Caretaker; (13) Park Ranger (Prof Note: I would do this for free!  How awesome!); (14) Pet sitter; (15) Retail Sales Associates; (16) Security Guard or Bouncer; (17) Telemarketer; (18) Theater Usher; (19) Tutor (Prof Note: Pays, on average, $50/hour); (20) Uber or Lyft Driver (Prof Note: I have friends/peers that do some of these jobs.  Any honest job is honourable.  Just remember, if you see me as the Bouncer at your local watering hole, I am not there to socialize, I am there for business! J)

16 November 2018

 

Question: According to MSN: Lifestyle, what are 27 ways not to get mega-depressed as the days get shorter?

 

Investors ‘price in’ rising risk of disorderly rupture from bloc – Pg. 2

–          The pound tumbled almost 2% against the dollar for its biggest drop in two years, while sliding 2% against the euro

–          The challenge in trying to calibrate the Brexit risks has persuaded many investors simply to steer clear.  Sterling, in particular, has been tricky for investors to trade

 

Tudor Jones warns of ‘scary’ crisis risks lurking in US corporate credit binge – Pg. 21

–          …”some really scary moments” in the swelling corporate debt market might precipitate another financial crisis

–          A prolonged period of low interest rates across the globe has encouraged companies to binge on cheap debt

–          Corporate bond issuance in the US alone has been above $1tn every year since 2010, having only previously surpassed that in 2006 and 2007, …

–          The borrowing binge has almost doubled the size of the US corporate bond market over the past decade, to more than $9tn, while the so-called leveraged loan market, used by riskier borrowers, has more than doubled since 2012 to vault over the $1tn mark

–          The reduction in corporate tax rates has accelerated US growth this year but encouraged the Federal Reserve to step up its interest rate increases, lifting corporate borrowing costs and leading to some tremors in the bond market…

–          The yield on a widely tracked Bank of America Merrill Lynch junk bond index moved above 7% this for the first time since July 2016

 

Answer: (1) Escape on the weekends (Prof Note: Come join me at the cottage.  When you cannot drive any further south in Maryland, the light is ours!); (2) Spend time outdoors (Prof Note: Nothing beats natural sunshine…ok…a roaring fire does come close!); (3) Watch the sunrise (Prof Note: And sunset!); (4) Make a summer vacation Pinterest board; (5) Buy blooms; (6) Start fires (Prof Note: Lov’n the roaring fire!); (7) Let the light in; (8) Think ‘South of the Border’; (9) Treat yourself to seasonal staples (Prof Note: I purposely redecorate by season); (10) Go to the spa; (11) Paint your toenails a fun colour (Prof Note: No comment! J); (12) Eat carbs unabashedly; (13) But mix in energy-boosting foods; (14) Read escapist summer beach books; (15) Even head to the coast; (16) Start your days with a small accomplishment; (17) Volunteer; (18) Open the windows; (19) Bake … often (Prof Note: My oven is kerput!); (20) Keep active (Prof Note: I regularly am on the bike and circling the state park); (21) But know when to rest; (22) Dress in colour; (23) Upgrade your lougewear; (24) Get creative; (25) Make S’mores indoors (Prof Note: I tried this last night.  What is up with this?!  The graham crackers get too hot to put in your mouth, the chocolate runs, the marshmallows are ablaze when not careful, everything ends up in your lap or on the oven mitt needed to hold the S’More in the fire.  There has to be a better way!!!  Oh….try HOT milk, honey and Kahlua!); (26) Find a new show to binge-watch; (27) Fine, go someplace warm (Prof Note: Can we say “N-eeee-vis”?!)

 

Update: I reached out to parents and learned the secret to S’mores:

 

My current favorite method, tested as recently as last month (and stamped with approvals from a 4yo and 5yo), is to SLOWLY heat a marshmallow over the heat source (heat, but far enough away that the process runs 45-90 seconds – the longer it takes to slightly brown the outside, the better. Aim for symmetry when browning), then place on top of chocolate (at ambient temp) which is waiting on top of a graham cracker. That hat-trick of layers should then be topped with another graham cracker. Then give it a minute for the marshmallow’s inside to cool, and the chocolate to warm. Much like compound interest, time is your friend when making s’mores.

14 November 2018

 

List-Serve Comment on Millennials (w/ permission): I continue to read your daily communiques with much interest.  Re: today’s theme of Millennials’ pitfalls, I would add the (heretofore unknown) damage caused by energy drinks to the list.  During my time on USS [Redacted] (SSN XXX), I was astounded at how the crew guzzled Monsters, Red Bulls, Xyiences, and 5-Hour Energies as if they were “healthy”.  Then, one Chief who drank four or more a day keeled over from a heart attack during PT one morning, aged 36.

 

Question: According to MSN: Lifestyle, what are 9 smart questions to ask before getting a tattoo?

 

Tech giants spend $115bn on buybacks as investors lap up Trump tax windfall – Pg. 1

–          The share buybacks so far this year by Apple, Alphabet, Cisco, Microsoft and Oracle, after the tax change came into force at the end of 2017, are nearly double what the companies spent in the whole of last year, making investors some of the biggest beneficiaries of a plan that was billed as a boost to US jobs

–          They increased capital investment by 42% compared with the same period last year,…

–          Tech companies had been sitting on some of the largest cash piles, almost all of it stranded offshore, where it escaped an immediate tax.  Last year’s Tax Cuts and Jobs Act brought these reserves into the tax net but at a reduced rate – freeing companies to use the money rather than leave it to continue to pile up

 

Investors switch to defensive stocks in swift tech pullback, BofA survey shows – Pg. 19

–          Investors have made a speedy retreat from the technology sector after its heavy sell-off in October, ….a rare stumble for one of the market’s most popular trades

–          Only a net 18% of investors said they were overweight in global tech in November’s survey, down from 25% in the previous month….

–          Instead, investors switched into defensive stocks in sectors including healthcare and utilities, …

–          The tech sector played a prominent role in an abrupt tumble in global markets last month

–          The impact was global with tech-heavy Taiwanese stocks falling more than 6% in their worst day on record

 

Answer: (1) Can you tell me about the ingredients in the ink you use for my tattoo?; (2) Can I watch you work?; (3) Are you a licensed tattoo artist? (Prof Note: I had no idea, before this article, there was such a thing); (4) What are the signs that I am having a bad reaction to the tattoo?; (5) Can you perform a patch test?; (6) Am I already vaccinated against hepatitis B?; (7) Do I feel a connection with this tattoo artist?; (8) Will I regret this in 10, 20, 30+ years?; (9) Am I prepared for aftercare? Prof Additions: (10) Am I sober?; (11) Will it fade into a jumbled mess and look awful later?; (12) What will happen to it with weight gain/(loss)?; (13) Is in a place where it can be concealed?; (14) Will this prevent me from future employment (Prof Note: In the mid-2000s we interested a woman (I was not part of the interview process but heard this story) that had “90’s Ho” tattood on her neck.  The head of sales said, jokingly, “We only hire 2000 Hos”.); (15) Will I mind if someone sees it and asks me about it? (Prof Note: My mantra in class, “if I can see it, I can ask about it.”); (16) Am I prepared to live with the decision of having a tattoo for the rest of my life?