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Brian Mudd

Millions got a 23% raise in the first quarter, You're more accurate than tax pros, ACA prescription costs are far more expensive & more:

 
Millions got a 23% raise in the first quarter, You're more accurate than tax pros, ACA prescription costs are far more expensive & more:
Posted April 10th, 2014 @ 8:10am

Quick note before we get started. My father, who has been the biggest influence in my life, is battling for his health right now.  It’s a reminder of just how important it is not to take the important relationships in life for granted, most especially with loved ones. 

 

 

Millions are getting a huge increase in income this year.  Are you?

 

Bottom Line:  Show of hands…  How many people have received a raise of greater than 20% this year?  Before you laugh, the answer is in the tens of millions.  So who are these people?  Investors in dividend paying stocks... 


Coming into this year it appeared as though we’d have a strong increase in dividends being paid out to investors this year.  Through the first quarter of 2014, that’s certainly the case. 

 

  • So far in 2014 dividend payments are up by 23%

A dividend that yields more than can be obtained through fixed income investments is one of my three basic pillars of stock market investment.  Two-thirds of stock market returns historically are a result of reinvested dividends and dividends provide a return on investment regardless of what the share price is trading at in any moment in time.  In a world of raises that often don’t keep up with inflation, the power of dividend income is more pronounced than ever before. 

 

Audio Report:

 

 

Surprise!  You’re better at preparing your taxes than your tax preparer:

 

Bottom Line: We discussed the need to vet your tax preparer.  No story or data I’ve shared to date is near as alarming as this…  According to data from the GAO, you are more accurate in preparing taxes than the average tax professional.

 

A four year GAO study revealed the following:

 

  • 60% of taxes filed by tax preparers were inaccurate!

That compared to…

 

  • 50% of individuals who filed their taxes, did so inaccurately

Clearly neither is a good or acceptable number.  But wait there’s even more.  The GAO took a look at 19 different tax filings from the current tax year that had been prepared by tax professionals.  17 of them were erroneous.  Not surprisingly all but one erred on the side of a refund that was too large.  This is seemingly a common practice by many tax preparers who are attempting to attract new business as well as residual business year after year.  That’s where this really can get ugly. 


So even if you have a tax preparer handle your taxes, you’re still personally libel for errors in the filing.  If you’re audited and have been collecting tax refunds that are larger than you should have been receiving, not only would you have to pay back the overage but…

 

  • You could be subjected to interest and penalties

 

  • If they find issues with on tax year they could go into previous years’ filings

 

  • If they find a track record of issues that could be considered fraud they could potentially open up any and every year of taxes that you’ve ever filed

Turbo Tax’s campaign this year has been to convince people who usually hire tax preparers to do it themselves because you can.  They can add “better than the pros” to the campaign. 

 

Audio Report:

 

 


Prescription drugs are far more expensive with ACA plans:

 

Bottom Line:  A new comprehensive review of the out of pocket cost of prescription drugs by Express Scripts has revealed the following:

 

  • The average out of pocket cost of prescriptions under ACA plans vs. non ACA plans is 35% more

There were many other supporting finds within the study that you can find here (but perhaps none more illustrative): 
http://lab.express-scripts.com/insights/government-programs/first-look-health-exchange-medication-utilization

 

As we’ve discussed previously with regard to medical care itself…  Even if one qualifies for subsidies to cover a majority of the premium expense of exchange based insurance plans, most of those people can’t afford to use the insurance itself.  The entry level plans are high deductable plans requiring thousands of dollars out of pocket prior insurance coverage kicking in.  Now we’re seeing actual users of these plans find that they often can’t afford the prescriptions they used to be able to with other insurance coverage. 

 

Audio Report:

 

 

So just how likely are you to become a victim of credit/debit card theft & how much will it cost you?:

 

Bottom Line:  According to the 2014 Identity Fraud Report from Javelin Strategy & Research:

 

  • Credit card fraud was up 38% in 2013 to $11 billion

 

  • Your odds of being a victim are now 1 in 8 per year

 

  • The average cost per incident to the victim is $106

Credit and debit card fraud is less severe than actual ID theft but it’s far more common.  My wife Ashley has been a victim twice this year already.  That’s also a relevant point to this story.  There are many wonderful benefits of living in South Florida.  Unfortunately many fraudsters agree.  We know that historically we see more fraudulent activity in South Florida than the average rest of the country.  So if your odds of being a victim are about 13% per year nationally, there’s a likely chance that your odds are worse in SFL.  Be sure to monitor your accounts frequently. 


Audio Report:

 


Stressed at work?  Of course you are:

 

Bottom Line:  According to the annual study of work stress by Nieslen & EverestCollege it’s almost a certainty that you’re stressed out at work on a daily basis.  Here are this year’s findings:

 

  • 80% of Americans in the work place say they’re stressed out (that’s actually a slight improvement from 83% last year)

So what are our biggest stressors at work?:

 

  • Tied for the top were low compensation and long commutes

Followed by (in this order)

 

  • Workload
  • Annoying co-workers
  • Poor work-life balance

Stress is somewhat relative because some people handle stress better than others and something that may be stressful to me isn’t to you.  What I do think is clear looking at this list is that the issue isn’t likely to improve significantly.  Why? 

 

Take for example the 1st and 5th biggest stressors.  Tied for first is not earning enough.  Fifth is poor work-life balance.  Well if the first is addressed by earning higher income what do you think will happen to our perceptions of work-life balance…  In other words regular stress is here to stay in the workplace.  It’s likely up to you to find a way to best deal with the known stressors in your day to day work life so that you don’t burn out and harm your physical health in the process. 

 

Audio Report:

 

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