Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the incredibly sad news that Vanguard founder and index investing pioneer, Jack Bogle, has passed away at the age of 89… but his legacy will live on, in both the books he wrote, the index funds he created, and the company he built with a unique mutual structure that ensures it will continue to support his legacy long after he’s gone.
Also in the news this week is the ongoing government shutdown, which looks increasingly likely to drag on for an extended period of time… and is leading economists and analysts to start assessing all the secondary effects that may soon emerge as agencies run out of stop-gap measures, from TSA shortages at airports to the Department of Agriculture’s food stamps program and nearly $460M of lease payments to various commercial real estate investors that won’t be paid every month the shutdown continues.
From there, we have a number of tax planning articles this week, including an announcement from the IRS in Notice 2019-11 that tax underpayment penalties will be waived in 2018 for anyone whose estimated tax payments and withholding added up to at least 85% of their total tax liability (instead of the usual 90%), a look at the various above-the-line tax deductions you can still take even with a higher standard deduction that limits the ability to itemize, and some tips on how to prepare and get organized for the upcoming tax season.
We also have several advisor technology articles, from a look at the increasingly sticky issue of who really owns a client’s financial data (and how the industry may need to change to really empower consumers to own and control their own financial data), a look at what AI will really likely do for financial advisors (hint: think “make advisors more proactive,” not “replace them”), the hazards of “legacy technology” for financial advisors, and how the creator of the modern password requirement (with upper- and lower-case letters, numbers, and special characters) regrets what he created as we’ve now reached the point of requiring passwords that are very difficult for consumers to use and remember but easier and easier for malicious computers to hack (as computing power grows exponentially greater every year).
We wrap up with three interesting articles, all around the theme of the habits and time use of successful and affluent people: the first looks at how the affluent spend their time, finding that what leads to happiness isn’t just having more wealth, or spending it on experiences per se, but simply engaging their leisure time in any kind of more “active” leisure (e.g., exercising or volunteering) rather than more passive leisure (e.g., watching TV or just relaxing); the second explores the “boring” habits of successful people, who tend to write things down, simplify their lives to reduce unnecessary choices, but still remain open to updating and changing their systems over time; and the last looks at how one of the most common first or early jobs of the ultra-wealthy was some kind of “sales” job, as the reality is that for everyone – even, and including, fiduciary advisors – it’s still absolutely vital to have sales skills in the modern era, if only to be able to sell yourself and your value (whether it’s to a client or boss).
Enjoy the “light” reading, and Happy New Year!