Smarter Bear Newsletter #4
For clients and friends of Smarter Bear
Beware of Check Washing
Many of us have read about mail theft and check washing. It recently happened to one of our clients sending in a check to Smarter Bear. The thief stole the letter, changed the payee on the check, and deposited it in their own account. The bank is investigating. When sending money - try to find a secure electronic method as the first choice. If you must mail a check - bring the letter in to the post office. Don't use the blue mailboxes on the street or even in front of the post office.
Can tax-loss harvesting save you some money?
Assets that have lost value since purchase can be sold and the capital loss can offset capital gains and up to $3000 of ordinary income. Any additional losses can be carrid forward and used in future years. Tax losses can be claimed on individual equities/stock and stock funds. But don't forget that this can also be done with individual bonds and bond funds. Keep in mind that you want to avoid the wash sale rule - you cannot purchase substantially the same asset 30 days before and after the loss sale; otherwise, the loss cannot be recognized.
Savings on Mortgages
With rates in the 6-7+% range for 30-year fixed-rate mortgages, buying down the rate by paying points (an upfront fee that is a percentage of the total mortgage) is worth considering. The savings can be substantial if the mortgage is unlikely to be repaid or refinanced anytime soon. It's important to calculate the break-even point—the number of months it takes for cumulative monthly savings to exceed the cost of the buy-down.
Smarter Bear is always available for a no-cost, initial consultation to answer questions and discuss whether our services can help with your needs. You can reach us at smarterbear.net. We also offer no-cost second opinions for people who are DIY or working with another investment or financial advisor.
We write our own newsletter, so we know these topics well. Many advisors and firms employ marketing departments, generative AI, or third-party content services to produce their newsletters.
If you know others who would like to be added to our list, feel free to add them. We aim to write short, helpful, and easy-to-read items on financial topics of interest. We welcome any suggestions for topics to cover in future newsletters.
None of the above is intended as a substitute for tax or legal advice. Your personal situation will determine what's best for you and we recommend that you consult with an appropriate professional advisor.