This mistake still stings...
In this issue, we’ll talk about growing tax free money & the impact of tariffs on your wallet.
The Wealth Minute
Tax Free Wealth Growth
We're continuing our April financial literacy series and this week I want to share the mistake I made that cost me thousands.
I took tax free money and put it into a taxable account.
The sale of my home generated over $130,000 in profit.
I was financially illiterate back then and did not understand the difference between taxable money and tax free money.
I invested the money in an account that taxed all earnings, instead of choosing an account that would allow the earnings to grow tax free since there were no taxes on the principal (home proceeds are tax free up to $250,000 for a single person).
Click here for a breakdown of which accounts are taxable and which can grow tax free.
Fortunately for you...I am now not only financially literate, but ensure that my clients are also.
Click here for a Forbes article on the importance of not paying taxes on tax free money while building wealth.
Wealth Move
Pick at least one strategy from the article above to implement this month. Feel free to let me know which one you're working on.
The Freedom Path
Why You Should Care About Tariffs
The "T" word is not one we hear often, but it's not new.
Most people are not so concerned with what they are but how they will impact them.
The categories expected to see greatest impact are:
Groceries: Imported food products, such as fruits, vegetables, and seafood
Electronics: Devices like smartphones and televisions, which rely on imported components, could become more expensive.
Automobiles and Repairs: Tariffs on imported vehicles and auto parts may lead to higher prices for new cars and increased repair costs.
Clothing and Footwear: Apparel and shoes manufactured abroad are likely to experience price increases.
And since it's financial literacy month, let's take it a little further and review the financial impact households can expect to experience.
The Tax Foundation estimates an average increase of over $1,900 per U.S. household in 2025 due to the tariffs.
The Yale Budget Lab projects a 2.3% inflation spike in 2025, potentially costing the average U.S. household $3,800.
Wealth Move
Now would be a great time to review your discretionary spending. Cutting back on subscriptions you don't use is always a great place to start.
Open a savings account with an online company like Ally. Saving today will hedge against the increased cost of living in the months to come. Automate the contribution to make it easier to do.
Book of The Month
The April 2025 book of the month is "The New Retirementality" by Mitch Anthony.
Join me on the journey of discovery this month. I just picked this one up for the month. I'd love to know your thoughts on it.
Coffee Chat Question
If we were to meet for coffee, what would you want to know?
Feel free to email me questions that will anonymously be added to this section during each edition.
“I'm single with no kids. Do I need life insurance?”
Years ago (when my financial literacy was limited), I would have "no."
Now I understand (and teach my clients) that the right type of life insurance, regardless of your marital status can be a vital part of your wealth building strategy.
This is a book I recommend to my clients who want to better understand the role of life insurance in wealth building. Here is another one.
I hope that helps.
Are You A Federal Employee?
"Uncertainty" was a word never associated with federal employment in the past.
It's a daily utterance these days, however.
To help you make informed financial decisions that are best for you and your family, I'm offering all federal employees a FREE Money Chat.
Click here to schedule a 30 minute chat to discuss anything you want.
Let's change the word of the day to "Empowered."
