Russell Bailyn -

Welcome to my annual tax post. I’m feeling pretty confident heading into this year’s tax season as it appears the average person will pay less tax and have more credits/deductions than last year. I wish I could say that trend is likely to continue in the future but it’s quite clear at this point that tax rates will be rising in 2010. The government must take action to counter the massive spending binge it’s been on of late. With Obama in the hot seat its pretty clear tax rates will be moving up, particularly for higher income earners. Combine that with the expiration of Bush’s tax cuts and future tax seasons start to look real ugly. In light of that, let’s focus on the positive for now.

Continue reading " Tax Season: Tips & Changes for 2009 " »

Posted by Russell Bailyn at 03:59 PM | Permalink | Comments ( 1 ) | TrackBacks ( 0 )

A year ago it was hard for me to keep variable annuity (VA) wholesalers out of my office. The features offered by various insurance companies would change so rapidly that I’d have to take meetings to stay up-to-date.* There was essentially a competition between insurers to load more and greater guarantees onto their products to attract the most new money. But when the stock market started collapsing, the reaction by insurers was very interesting. You see, a large number of annuity contract holders never use the guarantees they pay for. The rider expenses and other fees paid by contract holders which provide them the peace-of-mind they are looking for also keep the insurance companies running profitable businesses. When many contracts became worth dramatically less than the initial premiums, insurers had to hope that there wasn’t a rush to exercise those income benefits, which could have potentially put some insurer’s VA divisions out of business. Not only was each insurer’s ability to ‘hedge’ well enough to pay their riders in question, but their overall balance sheets, in many cases full of bonds and other investments were also cracking at the same time. The snowball effect can lead to ratings cuts which ultimately leads to broken trust and confidence by investors.

Continue reading " The Changing Mindset of Variable Annuity (VA) Providers " »

Posted by Russell Bailyn at 02:53 PM | Permalink | Comments ( 1 ) | TrackBacks ( 0 )

The issue of how to practice is a big one for financial advisors. Regardless of whether you’re starting a business from scratch or moving an existing client book from one firm to the next, the decisions you make will impact your earnings potential and the mood of your office. Is it better to work on a commission basis or collect fees? Will your business grow faster if you join a large brokerage firm or an independent broker/dealer? Should you consider starting your own Registered Investment Advisor (RIA)? A young person entering the financial planning profession will likely be overwhelmed by these choices. All of the recent financial turmoil has only added to the confusion by causing big shifts within the industry. Some of the older and more established firms are disappearing through consolidation and bankruptcy while newer and more current business models are taking over. This hasn’t gone unnoticed by the financial media. Nearly every publication which is specific to the financial planning profession has been doing feature stories on business models for financial advisors. So I figured, why not chime in?

Continue reading " The Exodus from Wirehouse to Indepedent " »

Posted by Russell Bailyn at 02:37 PM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

The student loan industry is a giant scam if you ask me. Parents and students alike don’t realize the slanted arrangement they are about to take on when applying for these loans. Society places such a strong emphasis on education (for good reason) that the education industry and especially the lenders behind it stand to benefit tremendously. It’s a shame that so many of these organizations view a young person’s desire to better educate themselves as an opportunity to rip them off, but I can’t say I’m surprised, not after listening to the news for the past six months. The only way to come out on top and not cost oneself a fortune in interest and penalties over the years is to never miss payments on student loans and, when possible, pay considerably more than the minimums. This can be hard to do at a time when jobs are scarce and higher education is wildly expensive.

Continue reading " The Student Loan Crisis: How Bad Is It? " »

Posted by Russell Bailyn at 04:45 PM | Permalink | Comments ( 4 ) | TrackBacks ( 0 )

It's the holiday season and I'm feeling thankful. I've decided to dedicate today’s post to all the active bloggers in cyberspace. I like to reach out every so often and thank those who share my passion for blogging and helping to disseminate useful information throughout the internet. For those of you who are new to my blog, I’ve been working on a book (due out this summer with Wiley) which will discuss personal finance and recognize the contributions of financial bloggers to cyberspace. It’s a big project which has consumed many evenings and weekends but is certainly worth the effort. I finally reached the 100 page mark in my manuscript last week which pushes me roughly 40% towards the finish line. I’ve been trying to include as many interesting blogs as possible, although this has been made more difficult by the explosion of financial blogs in 2006.

Continue reading " Blog Appreciation Day " »

Posted by Russell Bailyn at 02:21 PM | Permalink | Comments ( 4 ) | TrackBacks ( 0 )

I read a statistic in the Journal of Financial Planning last month which stated that 19% of today’s workers know with accuracy when they’ll be eligible for social security benefits.* This statistic is of particular concern to me after similar findings in a recent study I conducted to determine just how much (or how little) people ages 18-30 really know about social security. I asked each of 30 people the same three questions, the answers from which tell us a lot about how younger audiences think and why. The first question I asked was where they had learned about social security issues in their lifetime. The next question was whether or not they ever worry about the current status of the system. Finally, I asked if they had any feelings about the idea of privatizing a portion of social security taxes. The people were chosen at random and range from friends and family to co-workers and strangers, most living in or around New York City.

Continue reading " Social Security: A Youthful Perspective " »

Posted by Russell Bailyn at 11:36 PM | Permalink | Comments ( 1 ) | TrackBacks ( 0 )