Videos uploaded by user “FPC Investment Advisory, Inc.”
A Video on How Not to Screw Up Your RSU's
You're feeling pretty confident these days. First, you're doing awesome work at a great company, and second, your restricted stock units (RSUs) have vested. Now for the big question: When do you cash your shares out? If you're like most RSU recipients, you plan to hold on to your shares for a year before selling. That way, you'll avoid the very high tax rate on short-term capital gains, and pay the lower, long-term capital gains rate, right? Actually that's not how RSUs work. Amazingly, their tax treatment is something that few people in the tech industry understand. Your taxes are calculated and withheld by your company as soon as your units vest. And that tax cut is painful, by the way: Depending on where you live, the IRS and your state of residence could end up taking nearly 50% of your stocks value. So to be clear, there is no reason to wait a year before dipping into your vested stock. In fact, if you wait a year to sell your stock, and the stock price falls during that time, you'll feel foolish because you'll have paid taxes on the higher, original amount. The bottom line: You might as well go ahead and do whatever you're going to do with your vested stock. And for a lot of you, there are two choices: 1. Sell shares immediately; start living a little larger. 2. Keep shares and let them appreciate so you can one day live much, much larger. But allow me to suggest something crazy: Use your stock proceeds to create an actual, grown-up investment portfolio—one that contains a blend of different investments rather than just the stock of your company. Building diversified investment portfolios is standard practice among people who have money they don't want to lose. I could explain the academic theory about why diversification is the best way to balance risk and reward, but in the end, the logic is pretty simple: Don't keep all your eggs in one basket. And when you own nothing but company stock that is exactly what you're doing. I know what you're thinking—that this is loser talk. Your company's stock is only going to go up, and never down, right? And every share you keep is going to make you that much richer. There's one problem though: Even tech companies have long periods of flat or falling stock prices. And yes, they go bust, a la Pets.com, Webvan and Covad. I know, I know, your company is different. But when you limit your investments to the stock of any one company, that's really risky behavior. If your company runs into trouble, not only will your stock crater, but you might be out of a job as well. When your wealth is all in the form of your company's stock, you're not just putting all your eggs in one basket, you're living in that basket too. So consider this: You already have a good amount of wealth through your RSUs, and you're probably going to receive a lot more units over the years. You are already successful, and you will continue to be more and more successful. Now it's time to start protecting your wealth by creating a real, well-rounded investment portfolio. By all means buy yourself some nice things. And keep a bunch of your company stock so you can live the good life one day. But in the meantime, sit down with a financial advisor and talk about taking part of your stock and building a real investment portfolio. If you'd like to talk about RSUs, taxes or investing, don't hesitate to get in touch. Bijan Golkar is a Certified Financial Planner™ and licensed tax preparer with FPC Investment Advisory Inc. in the San Francisco Bay Area.
A Video on Understanding the Alternative Minimum Tax
Tax time is upon us once again, and for many, that means facing the dreaded alternative minimum tax (AMT). AMT was instituted in 1969 as a way to prevent those instances in which very wealthy people used deductions to escape paying any federal taxes. Unfortunately, the legislation is now capturing a growing number of middle-class families. The basic problem with AMT is that it was not designed to take into account inflation and the rising cost of living. Because of those forces, it now applies to hundreds of thousands of middle-class families. The alternative minimum tax typically falls on families earning between $150,000 and $600,000 of annual income. In essence, AMT is a separate income tax calculation. To determine whether AMT applies to you, you must first figure your “regular” tax liability and then figure your liability under the AMT system. If your AMT is higher than your regular tax liability, you must add the difference to your total tax bill. Calculating your AMT can lead to confusion because it disallows so many of the deductions that are permitted in the ordinary tax system. Those include your standard deduction, personal exemption, exemptions for dependents, deductions for interest on certain home equity loans, and miscellaneous itemized deductions. One of the toughest aspects of the AMT calculation is that it also eliminates deductions for state taxes. If you live in California (a high income tax state) and earn, say, $350,000, your state tax could be $30,000. Under AMT, you lose that entire write-off, and as a result your Federal income tax could rise quite a bit. Meanwhile your cousin in Texas, which does not have a state income tax, doesn’t have that deduction to lose. Understanding how AMT works can help certain taxpayers to steer clear of it. However, we do not recommend spending a lot of time and energy strategizing ways to beat the tax. Remember, AMT was created specifically to close loopholes, so in the majority of cases there is not much you can do about it. A final note: This discussion of AMT is a cursory overview. The rules around this tax are extremely complex, and we encourage you to speak with your financial advisor if you’d like to understand it better. Bijan Golkar is a Certified Financial Planner™ and licensed tax preparer with FPC Investment Advisory Inc. in the San Francisco Bay Area.
Million-Dollar Question: Traditional or Roth IRA?
Retirement accounts like IRAs and 401(k)s are hugely popular-and the reason is their tax advantages. But traditional IRAs and Roth IRAs are very different: Assets in your IRA grow tax-deferred, while assets in your Roth grow tax-free. And if you're wondering what on earth that means, you've got plenty of company. Generally, when you contribute money to a traditional IRA, your taxable income is lowered by the amount of your contribution. This is why contributions to traditional IRAs are known as "pre-tax". With a Roth IRA, on the other hand, the amount you contribute does not lower your current tax bill. Your "after-tax" contributions grow tax-free, and your deposits and earnings are ultimately withdrawn tax-free. So why would anyone use a Roth rather than a traditional IRA? The answer: Once you turn 70Yi, you must pay Required Minimum Distributions (RMDs) each year. And if you've amassed a large amount of money in that IRA, your RMDs could trigger an equally large tax bills. If you pass away with assets in your traditional IRA, your beneficiaries can face additional taxes as they take money out. If you're a young saver with high income, opting for a traditional IRA will likely put you in this predicament decades from now. Conversely, in a Roth your beneficiaries would receive the funds tax free. So young, high earners should only use Roth IRAs, right? Yes- as long as they qualify. In many cases, high income levels and other factors exclude people from using Roth IRAs. What's more, Roth IRAs aren't always the best way to go. Take a high-tax-bracket couple who are closer to retirement and need to catch up on their savings. Because their timeline is shorter, tax-free growth takes a back seat to rapid accumulation. And that means a traditional IRA is the better choice with the immediate savings of lower income taxes. Another factor that complicates the traditional-versus-Roth decision is whether you expect your income tax rate in retirement to be higher or lower than it is now. In some cases, you might end up paying a lower rate on your traditional IRA withdrawals than you'd pay now to make Roth contributions. Simplifying complex decisions around IRAs is where a qualified financial advisor is really valuable. Our team helps clients cut through the confusion and determine whether a traditional IRA, Roth IRA or some combination of the two is best. In many cases, we are able to help them maneuver around eligibility roadblocks, through the use of so-called backdoor Roth conversions, or even using a Roth 401(k). FPC can help you get started today. Give us a ca ll or send an e-mail if you'd like to discuss the best ways to put IRAs, and their tax advantages, to work for you. Bijan Golkar is a Certified Financial Planner™ and licensed tax preparer with FPC Investment Advisory Inc. in the San Francisco Bay Area
A Video on The Secret to Successful Investing… Seriously…
If investing seems complicated, it’s mainly because of the way we’re wired. Over eons, we’ve developed tendencies and biases that have helped our species to survive. Those tendencies are based on the primal emotions of fear and greed. Many investors fall into these two categories of emotions. Greedy investors tend to time the markets, buy the latest hot stock and severely lack diversification. On the other hand, fearful investors love cash, avoid equities and also think another big crash is just around the corner. Both greedy and fearful investors are examples of the extreme opposites of the scale. These investors will often move from greed to fear repeatedly. The common theme between both of these is they tend to react to the day-to-day “breaking news” headlines. The most successful investors use a much simpler approach. They work to create a long-term investment strategy based on their goals. And then they trust that strategy, regardless of what the market does in any given day, month or year. A plan can help us overcome the emotional baggage of fear and greed. A good plan takes into account your goals, time horizons, risk comfort levels and lays out a clear path to earning the returns you need. Remember, not everyone needs to earn the same rates of return; it is all based on the amount of risk a person needs to reach their goals! The bottom line is this: arming yourself with an investment strategy roadmap you trust both simplifies the process and increases your likelihood of success. Just as importantly, it can free you to stop worrying about the markets and enjoy your life more. Don’t hesitate to contact us if you’d like to discuss investing further. Bijan Golkar is a Certified Financial Planner™ and licensed tax preparer with FPC Investment Advisory Inc. in the San Francisco Bay Area.
2018 Q3 Market Outlook
There is a lot of noise in the markets now. Watch our CEO, Bijan Golkar, discuss the current markets in an easy to understand way.
2018 Stock Market Correction
What is going on with the current stock market correction? What can/should you do about it?
Equifax Data Breach, Now What!?
Do you know what to do after the MASSIVE Equifax data breach? Watch this animated video for some quick and easy action items. https://www.fpcwealth.com/equifax-breach/
Dow Jones Biggest Point Decline
Some easy to understand info and perspective on today's market sell-off.
Year-End Wealth Strategies
The end of the year is quickly approaching! It is no secret that the markets have been volatile this year; however, there is a silver lining. You can watch this quick video to learn more on this and a few other year end strategies. The FPC Investment Advisory Team
Year End Sell-off
2018 Holiday Market Pullback
A "Lesson" on College Savings
If you are like most parents or grandparents you know that it feels like you need a college degree to help save for one. In this animated video, We hope to provide you a little more clarity into the pursuit of Education.
How to Discover Your Financial Strategy
If you’ve ever played chess before, you know that viewing the entire chessboard is the best way to establish your strategy. Not factoring in one section of the board means you may be vulnerable but not even know it. Similarly, one of the most important steps you take when setting up a financial strategy is to evaluate all of the different aspects of your life. When you begin working with FPC Investment Advisory, we help you get the full picture by creating a mind map. Through our discovery process we ask a series of questions to glean your values, goals, interests, relationships, assets and other valuable information to layout what matters most to you.
Are You Prepared for a Market Correction?
It is easy to forget that stock market corrections are a reality. Watch here for some perspective on the topic.
Minimize Taxes & Maximize Profits When Selling Your Home
Helpful tips on how to minimize taxes & maximize profits when selling your primary house. Learn how to estimate what you will walk away from when selling your primary residence!

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