In 1969, Joe Barr, the last of LBJ’s Trea­sury Secretary’s (he served only 30 days) became famous. He tes­ti­fied before Con­gress that 21 mil­lion­aires had paid no income tax in 1967. A tax­payer ‘revolt’ was at hand.

Con­gress, in an effort to chase down those 21, cre­ated the Min­i­mum Tax of 1969. Ulti­mately this became what you and I know as the Alter­na­tive Min­i­mum Tax. The unin­tended con­se­quence of this bend­ing of tax pol­icy is that AMT now impacts four mil­lion tax­pay­ers, 27% of whom have AGI below $200,000 per year.  But I digress.

Whether you agree with Mr. Obama’s premise that too many bil­lion­aires pay too lit­tle tax is not the point. Our tax sys­tem is com­pli­cated, thus enabling finan­cial insti­tu­tions to cre­ate tax reduc­tion strate­gies and prod­ucts. Too many Amer­i­cans rely on these pas­sive strate­gies in the name of tax sav­ings.  Remem­ber this: “Taxes can­not be reduced by tax-advantaged finan­cial instru­ments alone!” It is only through a well-coordinated and inte­grated process along with a sound eco­nomic process that taxes can be truly reduced both now and in the future.

Oh, and an econo­met­ric model that will allow you to test these proven strategies.

My pre­dic­tion: regard­less the out­come of the cur­rent tax debate, too many Amer­i­cans will over­pay their taxes this com­ing year sim­ply as a result of the posi­tion­ing of their assets, cur­rent volatil­ity of the mar­kets, and the turnover in their tax­able port­fo­lios. Don’t rely on the gov­ern­ment or tra­di­tional finan­cial plan­ning strate­gies to pro­tect you. You must do some­thing now to limit this exposure.

If you don’t…prepare to be ‘Buffeted.’

In July 1944, with World War II rag­ing on, 730 del­e­gates from all 44 allied nations gath­ered at the Mount Wash­ing­ton Hotel in Bret­ton Woods, New Hamp­shire for the United Nations Mon­e­tary and Finan­cial Con­fer­ence. Their pri­mary goal was to rebuild the inter­na­tional eco­nomic sys­tem through a series of rules, insti­tu­tions, and pro­ce­dures. The del­e­gates spent three weeks delib­er­at­ing upon and even­tu­ally sign­ing the Bret­ton Woods Agreements.

The Bret­ton Woods sys­tem called for each coun­try to adopt a mon­e­tary pol­icy that main­tained the exchange rate by tying its cur­rency to the U.S. dol­lar. If you were a favored bank you could exchange your dol­lars for gold at a fixed rate. This anchored the mon­e­tary system.

On August 15, 1971(“The Anniver­sary”), the United States, under Richard Nixon, uni­lat­er­ally ceased con­vert­ibil­ity of the dol­lar to gold. This meant that the dol­lar became an all out “fiat cur­rency,” sus­tained by noth­ing but the promise of the fed­eral gov­ern­ment. Known as the Nixon Shock, this action meant that the United States dol­lar would be the sole back­ing of cur­ren­cies and a reserve cur­rency for the world.

Our gov­ern­ment and gov­ern­ments around the world have been on a spend­ing binge. When the cen­tral bank is able to sup­press inter­est rates to zero and when the gov­ern­ment can finance its debts with for­eign cen­tral banks at neg­li­gi­ble inter­est rates—there’s no check on these debts

What about you? Are you on a spend­ing binge? Is your bal­ance sheet “AAA”? Are you in con­trol of your cash flow? Here’s a test: When you go out on Mon­day to cel­e­brate the anniver­sary, will you pay with cash?

Happy Anniver­sary!

It was 4:30 p.m. when scout Deaf Smith announced the burn­ing of Vince’s Bridge, the only avenue of retreat for the oppos­ing army. The main Texan bat­tle line moved for­ward with their approach screened by the trees and ris­ing ground. Gen­eral Sam Hous­ton per­son­ally led the infantry. In the cen­ter, two small brass, smooth­bore artillery pieces (donated by cit­i­zens of Cincin­nati, Ohio) known as the “Twin Sis­ters” were wheeled for­ward, sup­ported by four com­pa­nies of infantry.

The Texan army moved quickly and silently across the high-grass plain, and then, when they were only a few dozen yards away, charged Santa Anna’s camp shout­ing “Remem­ber the Alamo!”  The Tex­ans achieved com­plete sur­prise. It was a bold attack in broad day­light.  Santa Anna’s army, con­sist­ing pri­mar­ily of pro­fes­sional sol­diers, quickly col­lapsed. Hun­dreds of the demor­al­ized and con­fused Mex­i­can sol­diers were routed. The Texan army had won a stun­ning victory.

The Bat­tle of San Jac­into, fought on April 21, 1836, in present-day Har­ris County, Texas, was the deci­sive bat­tle of the Texas Rev­o­lu­tion. Santa Anna, the Pres­i­dent of Mex­ico, was cap­tured the fol­low­ing day and held as a pris­oner of war. Three weeks later, he signed the peace treaty that dic­tated that the Mex­i­can army leave the region, paving the way for the Repub­lic of Texas to become an inde­pen­dent coun­try.
Mea­sured by its results, San Jac­into was one of the deci­sive bat­tles of the world. The free­dom of Texas  from Mex­ico won here led to annex­a­tion and to the Mexican-American War, result­ing in the acqui­si­tion by the United States of the states of Texas, New Mex­ico, Ari­zona, Nevada, Cal­i­for­nia, Utah and parts of Col­orado, Wyoming, Kansas and Okla­homa. Almost one-third of the present area of the Amer­i­can Nation, nearly a mil­lion square miles of ter­ri­tory, changed sovereignty.

Chap­man Wealth Man­age­ment takes pride in cel­e­brat­ing San Jac­into Day. Don’t Mess With Texas!

The future has arrived! Our new web­site out­lines our holis­tic and com­pre­hen­sive approach to per­sonal finan­cial plan­ning. It includes an overview of the LEAP sys­tem fea­tur­ing the Wealth In Motion soft­ware, an out­line of our ser­vices and arti­cles that are at once enter­tain­ing and per­ti­nent to your finan­cial suc­cess.
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World War I – known at the time as “The Great War” — offi­cially ended when the Treaty of Ver­sailles was signed on June 28, 1919, in the Palace of Ver­sailles out­side the town of Ver­sailles, France. How­ever, fight­ing ceased seven months ear­lier when an armistice, or tem­po­rary ces­sa­tion of hos­til­i­ties, between the Allied nations and Ger­many went into effect on the eleventh hour of the eleventh day of the eleventh month. For that rea­son, Novem­ber 11, 1918, is gen­er­ally regarded as the end of “the war to end all wars.”

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Got gold? The radio is teem­ing with ads pro­mot­ing gold as the panacea for our cur­rent eco­nomic and stock mar­ket woes, all tout­ing the many ways to prof­itably invest, whether in bul­lion, coins, ETFs or min­ing stocks. So maybe you’re think­ing you should own gold in some form since (accord­ing to what they say) it will always be worth something.

But does gold really have a place in your port­fo­lio? (more…)

If you’ve raised chil­dren, per­haps you remem­ber the old favorite “The Wheels on the Bus.” The lyrics say, “The Wheels on the bus go ’round and ’round, ’round and ’round…”, you get the pic­ture. It’s a happy lit­tle song that invokes a care­free, sim­ple and steady expe­ri­ence on a bus.

But today, it appears that the wheels are com­ing off the prover­bial bus: the stock mar­ket sell-off, high unem­ploy­ment, the Euro debt crises, North Korea vs. South Korea, and the oil spill, to name just a few. (more…)

It was 1866 and the United States was recov­er­ing from the long and bloody Civil War between the North and the South. Sur­viv­ing sol­diers came home, some with miss­ing limbs, and all with sto­ries to tell. Henry Welles, a drug­store owner in Water­loo, New York, heard the sto­ries and had an idea. (more…)

Tra­di­tional plan­ning for years has been say­ing that you should max out the con­tri­bu­tions to your qual­i­fied plan because you will be in a lower tax bracket when you retire. How­ever, with the imple­men­ta­tion of the new health­care law you may see an increased tax on the dis­tri­b­u­tion of your money at retirement.

Here is how it works: (more…)