InSight

Why I do yoga with the kids

Financial Planning Dentist

As a dad, I’ve always been on the lookout for fun activities to do with my kids. So when I discovered the benefits of yoga for both physical and mental health, I knew it was something we had to try together. And now, yoga has become a regular part of our routine, bringing us closer together and helping us stay healthy and happy.

One of the best things about doing yoga with my kids is the joy of exercising together. We start by rolling out our mats and finding a comfortable position, then we take deep breaths and stretch our bodies. It’s a great way to get our hearts pumping and our muscles moving, all while having fun and laughing together.

Another benefit of doing yoga with my kids is the mindfulness and relaxation it brings. We focus on our breath and practice being present at the moment, which helps us to let go of stress and worries. It’s amazing how much calmer and more centered we all feel after a yoga session.

But the best part of doing yoga with my kids is the fun and playfulness it brings. We love trying out new poses and challenging each other to see who can hold them the longest. It’s a great way to bond and create memories together, all while improving our flexibility and strength. They are better equipped for yoga than I am, so it pushes me to try new positions and hold some positions longer.

The only thing we can’t do in this time together is say the word “Can’t”…that word is off limits and we have to say things like “can’t-yet” or “it’s hard for me, right now” when a pose or move is not yet available to us. It’s a great way to discuss out own limitations, and approach the whole time together with a growth mindset.

financial planning, fiscal+fitness, boulder advisors financial expertise

As a dad, it’s important to me to be a positive role model for my kids and show them the importance of taking care of our bodies and minds. Yoga is a great way to do that, and I love seeing how much my kids enjoy it and how it’s become a part of our family’s healthy lifestyle.

So if you’re looking for a fun and playful way to exercise with your kids, give yoga a try. You’ll be amazed at how much joy and relaxation it brings to your family, and how much stronger and more flexible you all become.

Namaste!

More related articles:

Articles
Peter Locke

Backdoor Roth 

If you’re looking for tax free income in retirement getting as much money into your Roth is the way to go. Tax free growth turns into tax free income. Executing on backdoor Roth strategies can be a little confusing but the math is highly predictive. If it’s right for you, it will support the broader tax strategy in retirement. When you retire most people think their tax rates will go down substantially. However, for those that have done a great job saving in their 401ks and IRAs, building their rental property empire, acquiring high growth assets, or anyway that’s not an asset in a tax-free account then you’re probably going to stay in a high income bracket throughout retirement. When you take into consideration social security, pensions, RMDs, and rental incomes you may have a difficult time not paying a large percent to the government. If you’re trying to sustain an income of $100,000 in retirement you cannot simply take out $100,000 from your 401ks and IRAs without losing a large chunk of it to taxes. So you’ll have to take out more and more each year in order to sustain your income due to inflation. However, if you’re receiving $100,000 per year from your Roth IRA then you’ll dramatically reduce your effective tax rate for your other tax-deferred distributions due to the Roth distributions being tax free. Unfortunately, for those high earners you may be thinking it’s not feasible or a smart strategy. I am here to tell you that for some it truly doesn’t make sense but for the majority of people it does and here’s how. If you’re in the 35%+ tax bracket this is a difficult decision; however, if time is on your side it still may be a good idea. For those that are in less than a ~35% tax bracket you’re in a great spot. First, let’s tackle the 35%+ individuals and families. For high income earners, you have a couple of options. Invest a portion of your 401k contributions to your Roth 401k each year. Some clients like doing a half and half strategy where half goes to the pre-tax 401k and half goes to their Roth 401k up to the annual 415(c) limits. That way, they’re taking advantage of some tax deduction but not fully. Another way is to do a Roth conversion or a backdoor Roth  conversion. Now be very careful here, because if you have rolled your 401k into your IRA then certain rules apply to you which I will touch on. You cannot make a Roth contribution if you file single and make over $139,000 (2020) and can only make a partial contribution if you make between $124,000 – $139,000 (tax year 2020). If you’re married and file jointly, your phase out is between $196,000-$206,000 (tax year 2020), meaning if you make over $206,000 then you’re ineligible. So here’s what you can do: A Roth conversion is taking money from your deductible pre-tax IRA and converting it into a Roth. You pay income tax now and the money grows tax deferred for life.  You can withdraw that money penalty free after the age of 59.5 or earlier if it’s a qualified distribution. A backdoor Roth conversion is when you make a non-deductible contribution to an IRA and convert that money into a Roth. The great thing about this strategy is any person with any income can make a non-deductible or after-tax contribution (a contribution that doesn’t reduce your current year tax liability). Before you do this you MUST understand this key rule. If you have a traditional IRA or rollover IRA (not 401k), then you must do a pro rata conversion, which for most, isn’t a great option. For example, I have 100k in my IRA and I open a non-deductible IRA and contribute the annual limit ($6,000 if I am under the age of 50 and $7,000 if I am 50+) and want to convert my $6,000 over since I already paid taxes on it and I want it to grow tax free. Well the IRS doesn’t allow you to just convert the after-tax/non-deductible contribution on it’s own and forces you to take a portion of both. In this case, $6,000 makes up 6% of all my IRA money so then I can only convert 6% of my after-tax contribution to my Roth and the rest has to come from my deductible pre-tax IRA because the IRS wants its money now forcing you to pay income tax when you didn’t want to. Don’t worry, you’re not out of luck. If, let’s say, you only have money in a 401k, then you can do a backdoor Roth conversion now. However, if you moved your 401k into an IRA and haven’t contributed any more to it then you could move that money back into a 401k at your current employer or a solo 401k if you’re self-employed and don’t have employees. By doing this, you no longer have to do the prorated conversion and are eligible to make non-deductible contributions and convert them immediately to a Roth. Before you do this, please consult with a tax advisor as we’re not tax professionals. For those that aren’t earning over the income thresholds set out by the IRS each year, you can simply contribute directly to a Roth without all these extra steps. Keep in mind that you’re only allowed to make one contribution or multiple contributions for a total of the annual limit to either the IRA or the Roth (or split the total to both). If you’re under the income threshold then contributing to a Roth may be best but consult with a tax advisor first. Converting money by using a backdoor Roth strategy is similar to delaying social security. After a certain amount of years and growth you break even and it starts paying off. So, if you’re older and your life expectancy isn’t expected to be very long this option may not be for you unless you

Read More »
Articles
Peter Locke

What’s the value? 

This is the untold story of what happens to most people that meet with financial advisors not CERTIFIED FINANCIAL PLANNERS™.  Whether you’re at a big brokerage firm, insurance company, or on a robo advisor platform, the stories are the same.   It’s Wednesday during your lunch break and you decide to finally go into an office to deposit your old company’s 401(k) rollover check.  You’ve been postponing putting it into an account because the market has been really volatile recently and the SP500 just hit another all time high. You walk into any of these big brand name brokerage branches (or you go online) and a representative greets you at the door and welcomes you to their office.  Your goal is to get some genuine help, not to get ripped off, and get some guidance as to what to do with your money.  The representative brings you back to their desk or office and you get started.  After just a few minutes of chatting you start to hear, before you’ve really said anything, about how their solutions are a perfect match for you.  Heck, maybe they start going down the path of what your risk is and if you need income or growth.  A few minutes later you find yourself answering questions about what you do if the market goes up or down? The representative is excited and is throwing out lots of financial jargon which maybe you know some or most of it, but don’t really know what you’re being asked or why and all of a sudden after 7 questions around what you need from retirement, the representative is ready to give you the road map to a successful retirement. The big brokerage firms software program has told the representative to tell you that you have 3 options to pick from: conservative, moderate or moderate growth.  Unsure of what’s going on, you find yourself picking a moderate growth portfolio made up of who knows what, and just like that, they have you walking out the door.  You have your new account number, disclosures that are 75 pages long about how the brokerage firm you just opened an account with isn’t liable for anything they just did for you, and a 60% stock/40% bond portfolio.  You were in and out faster than your last oil change.  You get home and your spouse asks you how opening your new IRA account went and you barely know what just hit you.  This is what financial advice has turned into.  The representatives aren’t bad people, well most of them, but they are told to give you the solution that fits what the firm wants them to do.  You have your pick of ETFs, Mutual Funds, and sometimes stocks if you’re willing to pay for a “custom portfolio” of stocks that you have to pay for on top of the fee that you’re paying the brokerage firm. That’s because “the firm” doesn’t want to take additional risk so they delegate their “more advanced” solutions to third parties and the costs just go to you.  So, after a couple days of “building your portfolio” or what I like to think of as, the time it takes your risk tolerance questionnaire to be approved by 25 different people to make sure the way you answered the questions aligns with the portfolio you’re allowed to be in based on your income and net worth. Your “portfolio” is one of 10 or so different portfolios that, you guessed it, someone else runs, and you’re plopped into.  Or worse, it’s just made up of the firm’s own proprietary products but it’s so cheap it’s hard to pass up. It’s not cheap, they’ve just found more creative ways to charge you that’s not in the portfolio management fee.  Trust me, think of brokerage firms as the nicer big banks.  They don’t stop creating more revenue, they just get better at disguising it. Back to our story.  It’s been six months since you’ve opened your new managed moderate growth portfolio.  The market is up so your broker calls you. Hey, Mr. or Mrs. Client, how are things going? I wanted to see how things were going with your portfolio?  You’ve already made 1%, great huh? Alright well if anything changes just give me a call.  6,12, 18 months pass by.  You get a call but this time it’s different. It’s a different representative.  Hey Mr. or Mrs. Client, its ____ from Blah.  I wanted to introduce myself as your new consultant, if you need anything let me know.  This happens over and over again until you have no idea who is going to call you anymore or worse, no one calls you anymore.  All this time, you’re paying for management.  But do you get anything else? Maybe you get planning? To big firms in order for the representative to get paid means re-plugging in the same information so that they can say they held a meeting with you.  So, what have you gotten? An investment strategy, which in itself is fine.  It’s safe, predictable, and isn’t trying to do too much.  I would say that the majority of people actually benefit from these strategies because without it they would be sitting in cash, be too conservative or be too aggressive.   Are you satisfied? Are you getting what you need/want from this investment strategy to set yourself up to reach your goals?  You’re probably saying no or you’re not sure.  Maybe your thinking, well it’s making some money so it’s good for now.   I am here to tell you that based on working in that role for nearly 10 years it’s not good enough. You need more for what you’re paying and frankly deserve more.  It is worth it to sit down with someone that is held accountable to make your situation better and is accountable for helping you reach your goals.  You deserve someone looking at your tax liability and offering your ways or ideas on how to improve and

Read More »
Boulder Financial Planners and Real Estate Experts
Articles
Kevin Taylor

How to “use” Depreciation and why it’s in your K-1?

How to “use” Depreciation: Basic Definition: Depreciation is a method used to allocate the cost of a tangible asset (like a building, machine, or vehicle) over its useful life. Since assets wear out or become obsolete over time, they lose value. Depreciation is a way to recognize this decrease in value on financial statements and for tax purposes. Simple Analogy: Imagine you buy a car for $20,000, and you expect it to last for 10 years. Each year, the car loses a bit of its value. So, instead of deducting the entire $20,000 from your income in the year you buy the car, you deduct a portion of it each year over the 10 years. This annual deduction is the depreciation expense. Depreciation in your K-1: What’s a K-1?: Schedule K-1 is a tax form used in the U.S. for partnerships, S corporations, and certain trusts. It represents an individual’s share of income, deductions, credits, etc., from these entities. If you invest in one of these entities, you receive a K-1 detailing your portion of the income or loss. Why Depreciation is Relevant: When a partnership (or similar entity) owns tangible assets like real estate or equipment, those assets get depreciated. This depreciation provides a tax deduction for the entity, thereby reducing its taxable income. If you’re an investor in that entity, your share of that depreciation appears on your K-1. On your personal tax return, this can offset other income, potentially reducing the amount of tax you owe. In simpler terms, depreciation on a K-1 represents your piece of a tax benefit stemming from the tangible assets the business entity owns and uses. This benefit can reduce your taxable income, which could potentially lower the amount of taxes you need to pay.   These are Typical Sources of Depreciation in the expenses of an investment: Furnishing and Fixtures Definition: These are movable furniture, fittings, or other equipment that are used in a business or home but are not integral to the building. Depreciation: Typically, these are depreciated over a 5 to 7-year period using the Modified Accelerated Cost Recovery System (MACRS) for U.S. tax purposes. Laundry Equipment: Definition: Equipment specifically designed for cleaning fabrics, such as washing machines, dryers, and ironing machines. Depreciation: Often depreciated over a 5 to 7-year life using MACRS. Computers: Definition: Electronic devices used to process data and perform tasks. Depreciation: Typically, computers are depreciated over a 5-year period using MACRS. Automobiles: Definition: Vehicles primarily designed for on-road use. Depreciation: Generally depreciated over a 5-year period using MACRS, but there are specific rules and limits, especially for passenger vehicles. Personal Property: Definition: This can refer to items that aren’t permanently attached to or part of the real estate. It could include machinery, tools, or other movable properties. Depreciation**: The period varies but often falls in the 3 to 7-year range, depending on the specific type of property and its use. Capital Improvements: Definition: Upgrades made to enhance the value of a property or extend its lifespan. This might include things like a new roof or an added wing to a building. Depreciation: The depreciation schedule depends on the nature of the improvement and what it’s related to. For example, if it’s an improvement to a building, it might be depreciated over 27.5 years (for residential property) or 39 years (for commercial property). Buildings: Definition: Structures like houses, office complexes, or warehouses. Depreciation: In the U.S., residential rental property is depreciated over 27.5 years, while commercial property is depreciated over 39 years using the straight-line method. Land Improvements: Definition: Enhancements to a piece of land, such as landscaping, driveways, walkways, fences, and parking lots. Depreciation: These are generally depreciated over a 15-year period using MACRS.    

Read More »

Pin It on Pinterest