Skip to main content


Where Federal Tax Money Comes From and Goes To

The Committee for a Responsible Federal Budget recently published their annual study. There are some simple and telling charts that help people better understand the source of the US's tax revenue and where that revenue is spent.  On spending, for every $100 you pay in taxes:  $23.61 goes to Social Security payments and administration $15.26 goes to Medicare, the government health insurance program $9.55 to Medicaid, the health insurance program for the poor $19.82 goes to armed forces, including veterans benefits $6.25 interest on national debt In total, 50% went to Social Security and health programs. Include armed forces and interest payments, and we’re up to about 75%.   The 2016 federal budget fell $15.24 (out of every $100) short of revenues brought in, having improved from $35.70 in 2011. If a balanced budget were deemed the appropriate thing to do, where would you cut? On the source of tax revenue, you can see individual income taxes are the largest source but payroll t…
Recent posts

Investment Returns: What Can We Expect Over the Coming Years?

Having proper expectations is incredibly important in investing. Expectations will impact your investment allocation and may influence your ability to stay disciplined in adhering to your investment plan.

The video below reviews a 5-year expected return forecast as of January 2017 made by the world's largest asset manager Blackrock. It was done in conjunction with the 2017 Q1 market review by Kevin Kroskey, CFP, Senior Wealth Advisor at True Wealth Design, and is edited for brevity.

Note: To improve viewing quality on your player to HD video, select play and then the square icon to view in full screen mode.

Brexit Begins

You may recall that last summer the investment markets were panicked by the U.K. voting to exit the European Union. There were dire predictions about the impact on the U.K. economy, which never materialized, in part because the U.K. had not yet formally opted out of its Eurozone agreements. 
At the end of March 2017, the U.K. did pull the trigger, making the departure official. So that means those dire predictions will finally come true. Right?
Under the bylaws, the divorce will be negotiated over the next two years, meaning that any change in economic circumstances will be gradual and perhaps accommodated as they happen. How gradual? Over the next several weeks, the EU’s remaining 27 members will discuss their priorities in before the negotiations and then hold a summit on April 29. Only then will the European Commission have a mandate to negotiate with representatives from London. 
Items Negotiated in Brexit
What will the negotiations cover? Britain’s obligations to the EU f…

Biases Affecting Your Brain and Financial Decision Making, As Told By Real Vs. Imagined Crime

Crime in America is totally out of control these days, right? Every day you read about some new shooting, robbery, kidnapping etc., and the impression you get is that we live in an age where the streets are not safe and neither is your home. Some of this phenomenon is not crime-related at all. Rather, it is in part stemming from a cognitive bias our brains experience called the recency or availability bias. From Wikipedia, “The tendency to overestimate the likelihood of events with greater "availability" in memory, which can be influenced by how recent the memories are or how unusual or emotionally charged they may be.”  This bias shows may perpetrate your brain after being exposed to various emotionally charged stories and experiences. With money, for example, in the Great Recession in 2008, the recency bias may have caused you to think that the stock market is only going to continue to go down and not recover, given the recency, availability of information and media stori…

Fed Interest Rate Increases: The Tempest in the Teapot

Anybody who was surprised that the Federal Reserve Board decided to raise its benchmark interest rate in December 2016 probably wasn’t paying attention. The U.S. economy is humming along, the stock market doing well, the unemployment rate has fallen to a low level -- now considered to be 'full employment.' We are more recently seeing evidence of increasing wages as well.

The rate rise is extremely conservative: up 0.25%, to a targeted range from 0.50% to 0.75%—which, as you can see from the accompanying chart, is just a blip compared to where the Fed had its rates ten years ago when it was north of 5%. Keep in mind the prime rate -- more commonly used in consumer finance -- is the federal funds rate plus 3%. So prime was north of 8% in 2007.

The bigger news was the announced intention to raise rates three times next year, moving to a more “normal” 3% by the end of 2019. This is faster than prior market expectations, heading into the meeting, although still somewhat conserva…

Balancing Traits

Are you ready to achieve work-life balance? The American Sociological Review has published a study showing that most of us struggle—which is a fancy word for “fail”—in this important endeavor. But there’s hope. The study also found that the minority of people who HAVE managed to achieve some form of the work/life holy grail are doing certain things well.

Like what? First, they take the time to make deliberate choices about what they want in their lives. Rather than collapse after work in front of the TV or stay at their desk through their vacation time, they create a road map of the kind of life they want to live, and how they will spend their time, and commit to this path. 

Second: they regularly communicate with important people in their lives about what’s working for them, and what isn’t. This prevents them from drifting off the work-life rails as a result of outside influences and pressures.

Third: they make sure they set aside time for family, friends and their important intere…

Don't be like Gerald

A Texas County Commissioner Gerald Daugherty is a "proven fighter for better roads, lower taxes, and responsible county spending." His wife also doesn't want him driving her crazy in retirement and is using this message to help him get re-elected. As a sign I once saw in a restaurant said, "Retirement: Half the Money and Twice The Husband."

Have a plan for retirement -- for financial and non-financial aspects -- to ensure you are fulfilled with yourself as well as your relationships. And, have a laugh at Gerald's video.