XY$ Radio

table of contents Client BackgroundRecovery RebateTax and Retirement ProvisionsUnemployment CompensationKey Business ProvisionsOther Notable ProvisionsNon-CARES Act Items Perspective on the potential personal and business related financial benefits made available by the CARES Act…for this client it looks like the stimulus and other non-stimulus related relief will conservatively be worth over $30,000! When it became evident that the Coronavirus was going to have a major impact on both the real economy and financial markets, the knee jerk response from the Federal Reserve was to slash interest rates and turn on the printing press. I had my pitch fork ready as I awaited the government’s stimulus package with concern that I would be solely focused on Wall Street and large corporations. To my pleasant surprise I am seeing some significant potential upside for Main Street. Let’s dive into my first client case study - a self-employed clinical psychologist that is married with one child under the age of 17. I plan to do as many of these as I can (good, bad, and ugly) to help paint a clear picture, manage expectations, and hopefully open some potential eyeballs to the possibilities that exist here.  With that in mind I am going to keep the format consistent so that we can maintain good comparability across cases. Table of Contents https://youtu.be/MSp7yyv3olc Client Background My client is a self-employed clinical psychologist.  She is married and has one child under the age of 17.  Her husband also works and earns an income.  We just recently starting working together and between the news of the pandemic itself and observations of unfavorable movement in stock prices, she was understandably worried about their investments and consequences of all of this on her family’s income going forward.2018 Adjusted Gross Income (AGI)~$153,0002019 Adjusted Gross Income (AGI)~$173,000 (tax return prepared but not yet filed) Table of Contents Recovery Rebate If you do not have a good handle on how the recovery rebate is going to work, you can listen to my recent podcast episode on the topic (insert link).  As a quick recap, each taxpayer is scheduled to receive a $1,200 tax credit ($2,400 for married couples) and $500 for each child under the age of 17.  That is the maximum amount that will be received before taking into consideration income phaseouts.  The phaseout for married couples begins at $150,000 of AGI and the credit is reduced by $5 for each additional $100 of income over the AGI limit.This is a credit against the 2020 tax return but because the government wants to create an immediate impact, they are sending out the checks in the near future and will use the most recently filed return to calculate eligibility.  My client did file their 2018 return and had an AGI of ~$153,000.  They would have been eligible for a $2,900 credit, but since they are $3,000 over the AGI threshold, they will receive $150 less for a total of $2,750.  They have not yet filed the 2019 return and this is a good thing because at ~$173,000 of AGI they would have received only $1,750 - a total reduction of $1,000 of free money.

in this episode [01:42] Small Talk[04:05] Background[13:15] Backstory Timeline[23:40] Options, Derivatives, and Shorting[41:20] Getting Into the Numbers[42:40] Closing Discussion My brother, Matt, recently shorted the Chinese Economy and US stock market, taking his brokerage account from $25,000 to over 160,000 in less than a month. This is episode # 004 of XY$ Radio. I just interviewed my brother, Matt Rogers, a radiology resident, about his recent wild success in shorting the Chinese economy followed by the US stock market on the basis of Covid-19. In a matter of just over a month he took his brokerage account from $25 to $160,000…and then promptly ordered a Tesla as a reward to himself.Before we get into this I just want to state clearly that I am not recommending that you try something like this. If you are a client of mine or have had any amount of discourse with me on the topic of personal finance you would know that I am not a gambler - period. The strategies that we discuss were based on some sound fundamental drivers but the timing component of Matt’s bets were highly speculative. With that said, this story was too close to home and just too good to pass up. Enjoy! https://youtu.be/d2oaMrIEtVU

The CARES Act was signed in to law on 3/26/2020. That same day, Jeffrey Levine, CPA/PFS, CFP, MSA of Kitces.com delivered a comprehensive presentation named "CARES Act - New Rules, Planning Strategies & Opportunities". I reviewed this presentation several time and this episode will provide you with an overview of my initial understanding of the bill as of 3/27/2020. In this episode [0:47] Introduction[04:48] Recovery Rebates[16:10] Tax & Retirement Provisions[26:00] Unemployment Compensation[29:50] Key Business Provisions[41:25] Other Notable Provisions[47:35 ] Conclusions and Action Items An initial overview of the largest economic stimulus package in US history. https://youtu.be/XFkqjgADass