New Business Filing Required, Online Shopping Savings, 31 Years of Returns Visualized plus Community Wins
New Filing Required for Many Legal Entities
If you are an owner of essentially any type of legal entity, here is an essential PSA:
There’s a new legal requirement called the Beneficial Ownership Information (BOI) and you can find information at the FinCen government site devoted to this BOI report.
I’m obviously not your accountant or legal advisor, and I’m still researching this for my own companies and haven’t filed yet, so this is simply a heads up that there’s a high likelihood that you need to file this report by 12/31/2024 (if the entity was created before 1/1/24 and potentially earlier for entities created in 2024).
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) states: “Many companies are required to report information to FinCEN about the individuals who ultimately own or control them.”
Domestic companies that are required to file this beneficial ownership info: “corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.”
From what I can tell, this is going to be fairly easy to file, but not filing is not something to mess around with:
The ‘civil penalties’ for “willfully violating” the reporting requirements are $591 per day per info on the BOI FAQ page.
FinCEN also published this helpful five-minute YouTube video on how to file the BOI Report, so check it out.
Online Shopping Savings Reminders
Here are two quick reminders on how to save with online shopping as I literally just used both in the hour before I sat down to write this newsletter on Sunday night:
[To the optimizers reading this: I know there are higher tech versions of both, but I always crave simplicity. If you’re an optimizer, there are browser extensions for both, shopping portals and other discounts to add/stack (through credit card offers, etc.), and other ways to save even more.]
CamelCamelCamel (CCC): Create an account at their site and you can copy the website URL of any product from Amazon.com into the search box at the top of CCC and see how the price changes over time.
I think you’ll be shocked to see that prices can fluctuate up to 50% throughout the year on most products sold on Amazon (and thus, most products that exist).
This works especially well for items you ideally want, but don’t need right away. Set a price alert and purchase when it hits that lower price point.
Coupon Codes: Before I make essentially any purchase online, I quickly Google to see if any coupon codes exist for the online retailer I’m purchasing from.
I literally Google something as simple as “store name coupon code” and many coupon sites exist that list out current coupon codes.
Sure, sometimes it’s hit or miss with how well they work, but it is worth trying a few codes out for a minute or two and you might get some free shipping or maybe as much as 10%- 25% off the purchase you were literally just going to make at full price.
31 Years of Stock Market Returns Visualized
Ben Carlson co-hosts the excellent ‘Animal Spirits’ podcast and writes at his site A Wealth of Common Sense. He recently published an incredible chart looking at “returns over various time horizons for the S&P 500 going back to 1993.”
This article and chart will take you just a minute to digest, but I think it’s essential to help understand the power of long-term investing.
Look at the chart and go to the year you started investing. Visually scroll down to the last row in that column and you will see the annualized return from the starting point.
What is fascinating to see, for example, is anyone who started investing in the 2000-2008 timeframe, the returns the first 5-10 years were quite terrible, but with the power of long-term investing, if you started in any of these years and held through the present, you’d have a 7%-10% annualized return.
This lines up perfectly with the roughly 8% annualized return we use as our rule of thumb for expected market returns (nobody knows anything with certainty but this is our estimate).
And that is even with starting during one of the worst periods in decades.
For anyone starting in 2009 or after, the returns have been spectacular, but what I’m most amazed by is the consistency generally:
If you started investing just about any year 1993-2008, your annualized return is basically in the 8%-10% range.
ChooseFI Community Taking Action This Week
My big summer win: My son is going into 9th grade and needs and wants enriching stuff to do over the summer. The sticker price for seven weeks of camp (2/3 day camps, 1/3 overnight) would have been $5530. But many camps have scholarship funds, and by applying for every one available I got the total price tag down to $2240. Only one of the camps required a copy of our 1040.
For all of the scholarship applications, I cited college tuition for a sibling as well as high family medical bills as reasons for my request.
I teach my kids that there is a lot of money out there; you just need to be willing to make the effort to ask and be 100% honest in your request.
My total time involved in making scholarship requests? Less than three hours.
- Suzanne
A humorous (silly) win: In Maryland we have to get our vehicles tested for pollution every 2 years. The fee is $14 for normal service (they do it) and $10 for self-service. I finally did the self-service recently for the first time. If I invest the $4 I saved every 2 years…
- Glen
We contested a $20,000 tax bill due to a taxable event of stock sales that was mischaracterized as income instead of a capital loss of -$1,300!
Started Diablo Valley IRL ChooseFI meetup as a subgroup under the East Bay Area group. It has been awesome so far! There's no substitute for talking to like-minded people in person, and everyone has different skills and perspectives that really add richness to the group.
Signed up for the CampFI in San Diego in the Fall.
We are about 2-3 years from pulling the trigger!
- Juli
My 1% better this week was starting a 6 week block of time off after our baby daughter was born this week. It required a bit of a mindset shift to take some unpaid leave and hit our savings rate while in the accumulation phase, but it's important to realise that THIS is exactly the sort of situation we are saving for. This will give us some extra time to transition to looking after our newborn and our 3 year old.
I also applied to go down to 4 days a week. Although it was turned down this time I have the confidence with the FU money to continue to push for it or move to a job with a lower salary but better work life balance while that is what our family needs.
- Robert
My 1% better was talking to my boss at our 14 person company about other options regarding our Simple IRA. The expense ratios were over 1% on all non-bond funds. She looked into other options and we're switching to a 401k plan with lower expense ratios, I can contribute more pre-tax, and the organization will be matching 4% instead of 3%!
-Melanie
My 1% better this week is helping my dad go through all his finances since my stepmom passed away to help him systematize everything. In doing so we realized he was still paying on life insurance policies for my brother and I. He closed and cashed both of the out for a nice unexpected $2,000 that he is giving us. They were only for $16k each and we are both financially set so no reason to pay an insurance company when we can invest and make better returns.
- Bill