You are invited to what should be an interesting panel discussion on five strategies that help mitigate or defer taxes on highly appreciated real estate investments. While the 1031 exchange is known by many, it will represent only one of the five strategies that will be discussed by the panel. I do not know of a time when all five strategies were available for discussion in one sitting.

Click here for the invitation or to register.

The panel is very smart – advanced thinkers, open to your questions during and after the workshop. There are two workshop dates scheduled over the next six week – two chances to hear this presentation. The first is February 19th in Pleasanton and then March 19th in Alameda.

#Real Estate

Date this February 8, 2019

Headline: The Markets and today’s weather

Most of the country might still be in the throes of the winter, but after extreme cold throughout many parts of the United States, thankfully the weather has warmed up. Stocks followed a similar path, warming up in January after a chilling December. Since the lows in December, the market is up more than 16% (as of Feb. 6, 2019). Some recent reports have been encouraging and point to a steadily expanding economy.

Meanwhile, market participants have become more comfortable with the Federal Reserve’s (Fed) message. While these are positive developments, the likelihood for further volatility persists. Investors are encouraged to remain focused on the fundamentals that support a positive outlook for continued economic growth and stock market gains in 2019.

Recent economic data have pointed to a U.S. economy that remains on sound footing. The latest reports on U.S. manufacturing came in better than expected, reversing December’s disappointing data and signaling continued expansion in the manufacturing sector. Also, more than 300,000 jobs were created in January, while inflation remains contained. These data points signal a growing U.S. economy.

The Fed and the market haven’t seen eye to eye on policy over the past year, but that may be changing. At its last policy meeting, the Fed announced it would be much more patient with future rate hikes, which could remove one of the big uncertainties for investors. The Fed reinforced its stance that the U.S economy remains solid, and cited factors such as slowing growth in China and Europe, trade risk, elevated uncertainty, and deteriorating investor sentiment as influencing its recent shift. Because of these crosswinds, the central bank has chosen a wait-and-see approach, and will likely hold off on policy moves until there is greater clarity on global economic conditions. The stock market responded positively to the Fed’s message that interest rates would be lower than had been initially anticipated, with its first gain on a Fed announcement day since Jerome Powell took over as Fed chair.

With stocks up strongly since late December, the next move higher may be tougher to achieve. However, in addition to the solid economic backdrop, there are several factors working in stocks’ favor that could send stocks higher from here. Stocks are less expensive than bonds. Earnings growth has been solid. A potential U.S.-China trade agreement still appears likely. And finally, a broad and diverse mix of stocks has been rising, a symptom of a healthy market advance. Key risks working against stocks include slowing growth overseas and budding earnings headwinds—although a slowdown in earnings growth is very different from a contraction.

In closing, although we should remain prepared to weather any further market volatility, these signs are encouraging—much like early signs of spring peeking through the snow. I encourage you to stay focused on the fundamentals supporting the economy and corporate profits.



Important Information

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment Economic forecasts set forth may not develop as predicted Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

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My oldest daughter is in her last year of undergraduate studies and is looking ahead to graduate school. My youngest has been accepted to a number of undergraduate schools and is already thinking ahead to graduate studies. So, this topic is very close to my heart. I hope you find some value in it.
Rich Arzaga, CFP®

Courtesy of The Wall Street Journal
By Cheryl Winokur Munk

We hear a lot about college students’ loans. But graduate students build up debt, too.

Many students seeking graduate degrees need help footing the bill. But they often don’t know where to turn.

The bill can be hefty: The average cost of a year of graduate school (tuition and related expenses) was close to $25,000 during the 2016-17 academic year, according to a report from Sallie Mae, one of the nation’s largest private student lenders.

While some graduate students may have money left over in a “529” college-savings plan to pay for that advanced degree and a select few others will get the golden ticket—a tuition waiver plus a stipend for expenses, in exchange for teaching or researching at the school—many more won’t.

Here, then, is a look at a range of funding options for students planning to go to graduate school:

1. Grants/scholarships
To minimize what they need to borrow, grad students should explore any federal, state, school-based or organizational grants they might be able to use to defray the cost of their studies.

First, students must complete the Free Application for Federal Student Aid, or FAFSA—the government form for financial aid consideration. Certain graduate schools require that students also complete the College Board’s CSS Profile to be considered for aid from the university. (Graduate students generally are considered independent for financial aid purposes, meaning they won’t need to include their parents’ financial information.)

While federal grants generally are need-based, some may be available to students who are studying to fill a special need or discipline, according to Sallie Mae.

Sallie Mae offers an online search tool that gives students free access to 850,000 need- and merit-based graduate scholarships worth up to $1 billion. To register and receive alerts about scholarships that match their profile, students should visit the Sallie Mae site’s “Find graduate school scholarships” page.

2. Fellowships
Fellowships, available in many fields to help defray education costs, are generally based on academic achievement. There are different types of fellowship programs, but some include an internship or other service commitment. Fellowships are extremely competitive to get, but the benefits can include practical experience and professional development, as well as different types of financial support, such as tuition waivers, a stipend or housing assistance.

Students interested in exploring fellowship options should speak to their program chair. They also can contact professional associations and nonprofit research organizations within their field that fund fellowships.

It is a good idea for students to start looking for fellowship opportunities as soon as they decide to apply to graduate school so they don’t accidentally miss out on programs with early deadlines.

3. Assistantships/work study
Students pursuing advanced degrees may have opportunities to earn tuition waivers or cash (or both) by working as research and teaching assistants. During the 2015-16 academic year, students working as graduate assistants while pursuing master’s degrees earned an average of $10,500, while those pursuing research doctorates averaged $18,500, according to a report from the National Center for Education Statistics.

Graduate students also may find work through the federal work-study program. To be considered, they need to submit the FAFSA and indicate their interest in work-study.

4. Student loans
Grad students can borrow up to $20,500 a year in direct, unsubsidized federal student loans, with an aggregate limit of $138,500, including all federal loans received for undergraduate study. (Medical students have a higher yearly maximum borrowing limit of $40,500 and an aggregate limit, including undergraduate borrowing, of $224,000.)

Once students hit these limits, they can take out another type of federal loan, known as Direct Plus, up to their total cost of attendance.

To get a federal loan, students must first submit the FAFSA. Both types of federal loans offer certain favorable protections to graduate and professional students, such as income-driven repayment. But the interest rates on Plus loans are higher than direct unsubsidized loans and even some private loans, and they usually come with a higher loan fee. (The interest rate on Direct Plus Loans disbursed from July 1, 2018, to June 30, 2019, is 7.6% versus 6.6% for graduate or professional direct unsubsidized loans.)

Grad students also can borrow money from private student-loan companies, as well as nonprofit and state-based higher-education finance organizations, but they should be aware that these loans usually don’t come with benefits such as income-driven repayment.

Students, of course, should be careful about how much debt they take on. One rule of thumb is to take on no more debt than your expected annual salary, says Stephen Dash, chief executive of Credible, an online loan marketplace.

Students also should try to pay some of the interest on their loans while they are still in grad school, rather than waiting until they finish their degree. “Anything you can pay down while you’re studying is helpful because it will reduce the overall debt that you owe,” Mr. Dash says.

5. Employer reimbursement
Some people may be able to pursue a graduate degree while working full time, depending on the industry they work in, the particulars of their job and the degree they are seeking. Many graduate programs cater to working people by offering online and evening classes.

Even better, some employers offer tuition-reimbursement programs to help defray the cost of graduate school for employees. Students pursuing master’s degrees received an average of $6,200 in employer aid during the 2015-16 academic year, according to the National Center for Education Statistics.

Corporate tuition-reimbursement programs often come with restrictions, however. For example, some programs may require employees to work for the company for a certain amount of time or achieve certain grades.