Archive for the ‘Charitable’ Category
In December 2016, I wrote about how I came to know a little girl in rural China who suffers from thalassemia and decided to pay for her blood transfusions that cost $150 every 40 days. I called that my best investment in 2016 and I truly felt that way.
Since then, I have sent $150 to them every month and kept in touch with them on WeChat.
Apparently Jia Jia’s homework essay did not touch only me, it also touched many other people. In the end, they received the equivalent of about $50k in donations.
Grandma took her to the best children’s hospital in Tianjin to seek treatment. One week’s stay there set them back more than $3000 and they decided they couldn’t afford that. So they came back to their town to seek treatment in the provincial hospital.
One day I got an essay from Jia Jia talking about how happy her grandma was, more happy than she had ever seen her. It turns out that Jia Jia needed a bone marrow transplant to cure the disease and a donor had been found.
But there was just a little problem. The provincial hospital had only successfully done bone marrow transplants on adults.
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My Best Investment in 2016
Posted on: December 7, 2016
A few months ago, I stumbled upon a report about a homework essay written by a nine year old girl, Jia Jia, in rural China. The title of the essay was “If I live to be a grownup 如果我能长大.” It turns out Jia Jia suffers from thalassemia, a blood disease that requires a blood transfusion every 40 days. Without them, she would die. Jia Jia was abandoned by her own parents because they could not afford the medical treatments, but her grandmother refuses to give up on her.
Jia Jia is very aware of her own mortality, but she still has dreams. In the essay, she wrote how she was heartbroken to see her grandmother weep because she did not have enough money for her granddaughter’s treatment. She also wrote that if she lives to be a grownup, she wants to take care of her grandmother so she never has to worry about her again; she wants to become a doctor, so she can treat those people who can’t afford medical treatments.
I was so touched by the overflow of love despite their tragic situation that I called the reporter to get the grandma’s phone number and home address. Read the rest of this entry »
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I visited a physician client in Wisconsin while on vacation in Chicago this week. He has been my client for several years now and his personal finance is in very good order. As I was driving the four hour stretch of highway, I thought: What idea I could bring to him that could make his situation tens or even hundreds of thousands of dollars better?
This physician client of mine is easily in the top income tax bracket, meaning marginal tax rate for him is nearly 50% combining federal and state. He also gives away about $10k to various charities a year. He plans to retire in about 10 years.
When he retires, he will continue to give away $10k a year. In fact, there is a good chance he will give away more since people become more charitable inclined when they get older and having a meaningful impact becomes much more important to them.
If he lives another 30 years after retirement, he will give away a minimum of $300k. Here is the problem, he will have little income to write off, thereby wasting up to $150k worth of tax savings.
Alas, but there is a way to recapture these tax savings, it’s called Donor Advised Fund or DAF.
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Year End Moves for Tax Savings
Posted on: December 4, 2014
As 2014 draws to a close, my wife and I have sprung into action to save on our 2014 taxes. Here are a few things we do. We are no CPAs, so what we do is pretty easy to mimic.
Donate all the garbage. I couldn’t believe how many items in my household we literally didn’t touch, not even once, in the whole of 2014. Things like that are immediate candidates for donation. Things that fall into this category could be electronics, furniture, books, clothes, kitchenware, bedroom sets, used toothbrushes, etc. Ok, maybe not used toothbrushes, but just about anything you don’t use, you can find a better home for, and get a tax deduction for doing so. In some years, we’ve gotten $10,000 worth of deductions. Read the rest of this entry »
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I go to great lengths to meet with my clients regularly. For instance, many of my clients live across the country. I fly to them.
Some might ask: what value is there in meeting regularly? There can be about $100k of value in it, let me tell ya!
Meeting regularly allows me to uncover hidden issues and potential opportunities, thereby helping my clients make smart financial decisions.
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Tax Strategy for Entreprenuers before They Sell their Business: Donor Advised Fund
Posted on: May 14, 2013
Tax planning tips
Last week, I went to a luncheon seminar hosted by Fidelity Charitables, a division of my custodian company Fidelity Investments.
I went there because 30% of my clients are business owners. I know that one-third of them have strong charitable intent, and helping them do well by doing good is part of my responsibility.
Part of the dilemma of successful business owners who have charitable intent is this: They make a lot of money when they are running their business, and especially at the time they sell their business. But they give away their money to the causes they care about usually in retirement when they do not have as much income to write off. Without careful charitable planning, they will end up paying a lot more in taxes and have a lot less to give to charity.
Here comes the rescue plan: Donor Advised Fund (DAF).
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Tax planning tips
[Guest Post By Cal Klausner] Charitable contributions should be timed so as to obtain the maximum tax benefits, either in 2012 or 2013. If a taxpayer plans to make a charitable contribution in 2013, he should consider making it this year instead if speeding up the deduction would produce an overall tax saving, e.g., because the taxpayer will be in a higher marginal tax bracket in 2012 than in 2013.
On the other hand, a taxpayer who expects to be in a higher bracket in 2013 should consider deferring a contribution until that year. This task is more difficult than in prior years because of uncertainty over whether rates will rise next year under the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) sunset.
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Why I Am Most Thankful
Posted on: November 30, 2011
- In: Charitable | Life
- Leave a Comment
At 2:24pm on 11/5/2011, my second son Caden arrived in the world. Upon seeing his face, my heart sank since there appeared to be a tiny piece of flesh dangling from his nose.
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Making Charitable Donations
Posted on: November 12, 2011
My second child was born with a minor deformity in his nose. He looks like he has a cleft nostril.
When I first saw that, my heart sank like a rock. I began to imagine that if he grew up like that, the ridicule and rejection he would have to endure. I also worried that it might be a symptom of a major sickness. What about his nose, mouth, and brain? Are they normal?
Suddenly, I could empathize with parents who had a cleft lip baby. I knew how they felt, except that their emotions are probably 100 times more intense than mine.
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Charitable Giving and Estate Planning
Posted on: May 5, 2011
[Guest Post by Christopher Guest] Many people I work with to plan their estate want to make some type of charitable gift. Charitable giving through a person’s estate plan falls into three categories: a simple bequest through a will, a charitable remainder trust or a charitable lead trust1. Most people want to make an altruistic donation to some cause that holds a special place in their heart. However, for the more sophisticated estates, charitable giving can be a valuable estate tax planning tool.
The simplest and most popular form of charitable giving is a bequest through a will. Basically, there will be a clause in the will that says “I give X amount of money to charity Y.” If the estate plan is more sophisticated, the bequest could be based on a percentage of the estate’s value or a part of the residue of the estate2. Like all charitable bequests, it is tax deductible.
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The Consequence of Random Kindness
Posted on: March 23, 2011
- In: Charitable
- 4 Comments
This is a story sent to me by a client. It’s about how we live our lives, which I think is more important than how we make our investments.
His name was Fleming, and he was a poor Scottish farmer. One day, while trying to make a living for his family, he heard a cry for help coming from a nearby bog. He dropped his tools and ran to the bog.
There, mired to his waist in black muck, was a terrified boy, screaming and struggling to free himself. Farmer Fleming saved the lad from what could have been a slow and terrifying death
The next day, a fancy carriage pulled up to the Scotsman’s sparse surroundings. An elegantly dressed nobleman stepped out and introduced himself as the father of the boy Farmer Fleming had saved.
The Investment Scientist 