Friday Financial Five – December 18, 2015

Friday, December 18, 2015

Daniel P. Forbes GoLocalWorcester MINDSETTER™

Fed Raises Rate and the World Goes On

The inevitable finally occurred as the Federal Reserve opted to raise the target federal funds rate by a quarter point, the first increase since 2006. A rate hike may be new territory for those looking to buy a house for the first time but a higher mortgage rate isn’t a foregone conclusion. The Fed committed to continue reinvesting principal payments from mortgage-backed securities into new mortgage-backed securities. They will also continue rolling over maturing Treasuries. This continued support should help provide some stability in the bond market, even with another expected increase in the first half of 2016.

Congress Finally Addresses Permanent Tax Changes

Congress came to agreement on the Protecting Americans from Tax Hikes (PATH) Act of 2015. Many provisions, habitually extended each year over the last decade, have been permanently renewed. Others were extended but are expected to pass within the next week. The permanent provisions include the deductions from IRAs to charities, which allows taxpayers who are over 70 ½ to make a tax-free contribution up to $100,000 to a charity. The Enhanced Opportunity Tax Credit allows families to take a credit of up to $2,500 per year for up to 4 years of post-secondary education. The Enhanced Child Tax Credit raises the threshold for calculating the additional refundable portion of the tax credit. Finally, the deduction for schoolteacher expenses is now permanent, allowing elementary and secondary schoolteachers to deduct up to $250 per year in school supplies or expenses.

Most Charitable States

There are plenty of ways the United States can improve but the country has always been at the forefront of generosity. Coinciding with the holidays, Wallethub promoted giving by putting together a meaningful comparison of different states’ generosity. The rankings are based on, among other things, number of public charities, percentage of people donating, and median amount of giving. Utah, Maryland, and Idaho ranked at the top of the chart, while California, Louisiana, and Rhode Island filled the last three spots.

Growth Rate of Women Billionaires Outpacing Men

As women continue the fight for income equality in the workplace, longevity and estate planning practices are working to help females take their place amongst the wealthiest in the world. UBS/PricewaterhouseCoopers examined the rate of increase in the number of billionaires since 1995 and females are outpacing males by a healthy rate. The number of women worth over a billion has grown 6.6 times as opposed to 5.2 times for men. Asian women have the led the way for this growth, increasing from 3 in 2005 to a total of 25 today. There are still more total female billionaires in Europe and the United States, with the U.S. numbering 63.

Payday Lending Takes a Big Hit

In a holiday feel-good story for those against payday lending, the CFPB (Consumer Financial Protection Bureau) took action this week against EZCORP for illegal debt collection practices. Due to the finding, the company will refund $7.5 million to 93,000 customers and pay $3 million in penalties. For 130,000 consumers, their payday and installment loans will not be collected. EZCORP was accused of illegally visiting these consumers in their homes and workplaces, while lying about their rights and unlawfully drawing money from their bank accounts.

Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].

Related Slideshow: 2015 Worcester Business Award Winners

The Worcester Regional Chamber of Commerce has announced the winners of the 2015 Worcester Business Awards.

Here are the Winners:

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Richard B Kennedy Business of the Year

Imperial Distributors

"For its outstanding commitment and dedication to the Chamber’s mission, vision, and values. Founded in 1939, the company will celebrate its 75th anniversary as the performance leader in supermarket non-foods distribution and merchandising services. Under President and CEO Michael Sleeper’s leadership, Imperial has made substantial contributions to the continued economic vitality of the region through community investment and service." - WRCC

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The Small Business of the Year

West Side Steak & BBQ

"As a small eatery, Westside Steak & BBQ continues to demonstrate that excellent customer service and high quality food are part of the recipe for a great business model! " - WRCC

Address: 2A Richmond Ave, Worcester

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The Entrepreneur of the Year

Skyscope Creative

"Founded in 2012, the eight-person operation is an eclectic mix of filmmakers, marketers, designers, and motion graphics artists producing high quality, award-winning videos. The company believes that the right video in the right place can deliver massive impact." - WRCC

Address: 40 Jackson Street, Suite 1120, Worcester

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The Family-Owned Business of the Year

Percy's TV and Appliance

"As a member of the Worcester business community for more than 80 years, the Lavine family has carried on a rich tradition of providing stellar customer service and exceptional products, and has demonstrated a commitment to the community. "- WRCC

Address: 19 Glennie Street, Worcester

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The Chamber Advocate of the Year

Jim Donoghue, Owner of Tweed's Pub

"A member of the Worcester Regional Chamber of Commerce’s Board of Directors. Mr. Donoghue during his time on the Board has helped to govern the Chamber in its mission to support the region’s business community, specifically the small business owner." -WRCC

Address: 229 Grove Street, Worcester

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The Chamber’s Silver Hammer Awards

"The awards are given yearly by the Chamber to acknowledge construction or rehabilitation projects that have an extraordinary visual and aesthetic impact on our physical landscape and that have brought new life to some of the region’s most historic assets." - WRCC

Spencer Bank - " For its rehabilitation of the former Fire & Telegraph Building on Park Avenue into a branch and a community room for public use" - WRCC

Winn Companies - " For its restoration of the former Worcester Technical High School into market-rate housing known as the Voke Lofts." - WRCC

Commerce Bank - "For its restoration of The Slater Building on Main Street." - WRCC

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The Joe Cohen Retailer of the Year Award

Crompton Collective

"For growing business through innovative ideas, such as the addition of a farmer’s market and most recently, the addition of a unique event venue." - WRCC

Address: 138 Green Street, Worcester

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Ambassador of the Year Award

Maureen Raillo, President and CEO, WLimo

"For her continued support over the years—whether at golf tournaments, committee meetings, after-work events—to advance the mission of the Chamber." - WRCC

Address: 219 West Boylston Street, West Boylston