Respect money to get to your financial goals in 2015

Step One: Begin The Goal Setting Process In January

We begin our annual goal setting cycle in the weeks surrounding New Year’s Day. Why? Because it’s virtually impossible to forget or avoid this annual holiday event.

The New Year is a natural time to reflect on achievements from the prior year and start thinking about what we want to achieve in the coming year. In short, it’s a perfect time to begin a goal setting cycle.

Your first task is to review your written goals from the prior year and compare them to your actual results.

 “No one can cheat you out of ultimate success but yourself.”  – Ralph Waldo Emerson

 Inevitably, your results will exceed expectations in some areas, and disappoint in others. The critical point here is to not judge yourself because you’re not your results.

Instead, I suggest positive reinforcement by rewarding yourself for all that you did achieve in the prior year. Take the time to celebrate your wins because you deserve it. Also note areas where you came up short, as that is honoring reality.

What are your results telling you? If you came up short on a goal, then what was the cause?

After all, if you said you wanted a goal, but didn’t achieve it, then there is opportunity for learning.

  • Did something change?
  • Did other goals take a higher priority
  • Did obstacles get in your way?

Maybe you’re just not committed to that goal, and should drop it or change it.

You don’t get to be right or wrong during the review process, as that won’t serve you well. There’s no value in belittling yourself for missing a goal because that will just take away from honoring your successes.

The purpose is simply to get clear on what worked in the prior year and what didn’t. Just notice the facts and make conscious what happened, but don’t judge yourself.

“When defeat comes, accept it as a signal that your plans are not sound, rebuild those plans, and set sail once more toward your coveted goal.”  – Napolean Hill

Where did you meet with success, and where did you come up short? Your objective is to learn from experience and improve your goal setting for next year based on what you discover.

You’re creating an active feedback loop so you can correct and adjust your goals every year to get what you want out of life.

This correct and adjust process works much like rocket guidance systems. When a rocket is launched to a faraway destination, it’s traveling off course more than 80% of the time. Yet, the same rocket will hit its target with pinpoint accuracy. The key is correcting and adjusting.

The rocket knows its goal and is constantly correcting its trajectory during flight until it arrives at the destination. You can do the same thing by reviewing your goals each year and learning from your successes, as well as your failures.

 Step Two: Prepare Financial Statements

The next step during the annual review process is to compose a “quick and dirty” income statement and balance sheet.

This task is particularly easy around the turn of the year because annual tax statements must be prepared showing your assets, income and spending.

When you prepare these statements you are treating your personal finances with the professionalism of a business. You’re respecting your money.

I also suggest plotting your net worth and residual income on a chart so you can track your progress toward your goal of financial freedom. This is very important if you’re working toward the goal of financial independence or retirement security.

 The person who makes a success of living is the one who sees his goal steadily and aims for it unswervingly. That is dedication.  – Cecil B. DeMille

 Once you’ve updated your financial statements and reviewed your past goals, you’re then complete with the feedback loop portion of the process.

You now have a solid foundation on which to build your new goals. You have a current snapshot of your financial picture, and you understand what worked from the prior year, what didn’t, and why.

 Step Three: Ask The Right Questions

The next step in your annual goal setting process is to decide what you want to create with your life moving forward by asking yourself some questions:

 What do I want this year?

What will it take for this year to rate as a 10 on a scale of 1 to 10?

If failure was not a possibility because I’m guaranteed success, then what would I do? How would I play the game of life differently?

What values do I hold dear that I would like to honor in the New Year?

What’s frustrating or dissatisfying about my life, and how would I like to change it?

If I graded the various parts of my life (relationships, business, money, health, recreation, etc.) on a 1 to 10 scale, what grade would each receive, and what do I want to do this year to create the grades I really want?

What objectives would make the biggest, most profound difference in my life?

Step Four: Compile And Prioritize Your List Of Goals

After I’ve answered these questions, I get together with my wife to create a combined goal sheet for the family. She follows a similar process independent of me and creates her own agenda.

We then compare lists and create a combined family agenda for the year that’s broken into two categories: the first list has business and financial goals, and the second list has our personal and family life goals.

It’s important to note that we don’t just add the lists up to create one summation list. Instead, we negotiate the goals knowing that we must focus to succeed.

Less is more, and this is critical to note. More goals doesn’t equal more success, but more focus on just a few goals that make the biggest difference will equal more success.

Having more goals won’t lead to to success. Focus on fewer goals for the best results instead.

We compare our goals to the “10 Keys To A Winning Goal” checklist found in Step Two of the Seven Steps to Seven Figures course that this article is excerpted from, and we put on the back burner those goals that don’t make it to the top.

After years of practice, we have learned to enjoy greater balance and happiness by focusing on just a few critical goals and actually achieving them, rather than setting ourselves up for disappointment by getting spread too thin with too many goals.

What amazes me about this process is how powerful it is while being deceptively simple.

It never fails to redirect our thinking.

It creates clarity and cohesive focus for both of us to operate as a team, and helps us create a more satisfying and fulfilling life for our family.

It redirects our lives and keeps us from drifting aimlessly or living day to day.

Step Five: Get Into Action To Achieve Your Goals

Once you’ve set your goals, you now have a whole year to achieve them. But how are you going to do that? What is your next step? My suggestion is to divide and conquer.

Keep things simple by picking from the list only those goals that are the most exciting and juiciest of all, so you can focus your limited time and energy resources on them.

What’s your top priority for the year? What’s the most time sensitive or immediately compelling goal on your list?

“The big secret in life is that there is no big secret. Whatever your goal, you can get there if you’re willing to work.”  – Oprah Winfrey

Once your goals are prioritized, then you can pick either of the two strategies from below to begin executing your plan of action.

I offer two different strategies because each is appropriate for different situations, depending on conditions. Certain goals and personality types work best with one or the other approach. Which of the following approaches is best will depend on your personal style and the particular goal you are pursuing.

Next Step Approach: This is a forward looking approach where you just pick the next step to achieve your goal, complete it before figuring out the next step, and so on until your goal is realized. You don’t worry about the big picture with all the planning issues (which might bog you down because too much is unknown, or the whole process is too big to grasp). Instead, you just determine whatever the logical next step is, and trust it’ll take you to the next step until the path becomes clear. You’re like the rocket that’s correcting and adjusting its flight path. This also helps you avoid the “get ready to get ready” syndrome so that you can get started right now and not get stuck in procrastination excuses.

Reverse Engineering: This approach requires you to start with the whole plan in mind from the beginning by reverse engineering it into smaller tasks to complete. You then further subdivide the tasks into additional actionable steps, while continuing to break it down until you have daily actions that will take you to your goal when completed. The advantage to this process is it breaks big tasks down into digestible bite size chunks, making the whole process very easy to grasp. It’s most effective for analytical personality types, or situations where the entire path to the goal can be understood and mapped out in advance.

Both of these approaches help you succeed by reducing the intimidation and confusion that is sometimes associated with larger goals that take us into unfamiliar territory. They reduce your fear factor by transforming goals that are too large to grasp into actionable items that you can easily execute.

Each strategy answers the question, “where do I start?” and “where do I go next?” so that you don’t get stuck in procrastination.

Step Six: Persist Until You Achieve Your Goal

“Let me tell you the secret that has lead me to my goal. My strength lies solely in my tenacity.”  – Louis Pasteur

Once you have picked your goal and developed your plan to achieve the goal, then the rest of the game is simply a matter of getting started and not stopping until you reach it.

Every time you complete an action step, you’re one small step closer to your big goal.

Just keep on correcting and adjusting until you get there with rocket-like accuracy.

Enough said?

Step Seven: Maintain Focus By Reviewing Goals Regularly

Finally, the last part of this annual cycle is you must create a habit of refreshing your goals throughout the year. This means you must review them regularly and rewrite them as necessary.

The purpose of this step is to maintain your focus throughout the year as life’s clutter attempts to distract you from what’s important.

By reviewing your goals regularly, you’re counteracting all the forces outside of your control designed to sideline your plans.

Some people like to post them on their wall, keep a copy on their desk, or post them in their Day Timer or smart phone. Whatever is convenient and will remind you on a regular basis about your goals so that you maintain front of the mind awareness is what’s important.

“It matters not what goal you seek. Its secret here reposes: You’ve got to dig from week to week To get Results or Roses.”  – Edgar Guest

In summary, the seven step process you just learned is designed to do one thing: make goal setting a habit. You must habitually create and refresh your goals to gain all the value from this incredibly effective tool.

By following a habitual goal setting process, you’ll become part of the 3% that outperforms the other 83% by a factor of 10 to 1. You’ll also put yourself firmly on the road to retiring early and wealthy.

It truly works.

Goal Setting System Key Points

There are three major points you should take from this article:

Practicing goal setting and reviewing your goals is necessary to live the greatest version of yourself in this lifetime. Not using goal setting technology to the best of your ability is simply wasteful. It’s the equivalent of flushing opportunity down the toilet.

”You must have long-range goals to keep you from being frustrated by short-range failures.”  – Charles C. Noble

 Goal setting engages your mind in five different ways to achieve your goals. This gives you a distinct competitive advantage over others who don’t regularly set and review their goals. This competitive advantage can make the difference between retiring early and wealthy, or living a lifetime of financial mediocrity.

The most effective way to get all the value out of goal setting available is to make it a habit. Set your goals at least annually, and review them at least monthly. Build a regular cycle out of the process so that it becomes an integral part of your life. If you set goals in a random or irregular fashion, then you will get random and irregular results. If you set and review your goals regularly, you will move them to the forefront of your mental awareness, which will create more consistently profitable results.

The bottom line is if you want to retire early and wealthy, then regular goal setting must become an integral part of your life practice. Financial coaching is a great tool to add accountability, support, and additional insight to not only setting goals, but also following through long enough to actually achieve them.


Contact Connie Dello Buono, jr  financial planner to save on your income taxes thru a business structure and financial strategy and have a chat with a sr investment advisor. 408-854-1883

Suddenly everything is a choice rather than a mandatory cost, your personal finance resolution for 2015

  1. Car: Riding a bike or bus to work. Think of saving the car insurance and cost of gas for years before buying your dream car.
  2. House: Settling for a room to rent or mobile home or community house sharing. Think Income first before Spending.  This means buying a fourplex as your first home or a house that you can rent out first and own the second or third house while maintaining the rental homes. Know capital gains and ways to control them thru sound investing and business structuring.
  3. Emergency Fund for unforeseen events like car repairs, college teens, lost job or lost opportunity. Cutting on stuff that you want to cut back on like expensive vacations to fatten your emergency funds first.
  4. Emotional about spending, mortgage worries. The reality of being debt-free is more important than joining or copying the Joneses.    Buying stuff second hand.
  5. Saving in your net worth personal banking , be it in your bank savings account, cash value life insurance, managed stock savings/account, bonds, others.
  6. Negotiate everything or trade/barter services for stuff.
  7. Challenge Are you getting value in your gym membership?
  8. Marry someone with same level of ambition, personal finance habits and enterprenueral spirit as you.
  9. Walk your talk when guiding your children about finances. Allow them to work during summer break or school break to learn the value of money. Use a revocable living trust to transfer assets to them.
  10. Take care of your health for in the end, when your health fails you might end up selling your houses to pay for nursing home. Health first and then wealth Or move to other countries or cities to downsize and afford retirement.
  11. Use a business structure and financial strategy to write off most of your expenses and save the extra when you minus your lifestyle from your gross income. For this one, contact Connie Dello Buono to help you reduce your income tax using a business structure and financial strategy at 408-854-1883 ,

Donate your real estate to the following charities: Motherhealth Inc for affordable senior care and Green Research Institute for sustainability at 1708 Hallmark Lane San Jose CA 95124. Contact Connie Dello Buono.

Take advantage of legitimate tax strategies to grow your nest egg as quickly as possible

Do not catch a falling knife but do use tax strategies to grow your wealth which is a more effective strategy than trying increase returns on risky investments. Call Connie Dello Buono to meet our senior financial advisors and wealth managers who have a track record of protecting you especially if the market corrects itself by end of November 2014. 408-854-1883

alpine capital net


Business ownership, real estate and paper assets are your path to wealth building

Business ownership and real estate are the two wealth building asset
classes financial advisers typically don’t talk about (because they
can’t sell them) even though they are essential components to many
wealth plans.

Just to be fair, however, business ownership and real estate aren’t
for everyone either. These two asset classes have their own set of
issues (there is no perfect solution) and require far more active
involvement to create excess returns.

You must have entrepreneurial skills and a deep commitment to your
vision to compete. Additionally, the risks are much higher and the
outcome is less certain. Finally, both of these asset classes
require a higher dedication of your scarcest resource – time.

With that said, if you have what it takes you can gain huge
leverage and tax advantages. There is literally no practical limit
to the mathematical return you can make on investment.

Some entrepreneurs and innovative real estate investors have gone
from zero to financial security in under 5 years starting with
little or nothing – something you can’t do with paper assets.

With real estate and business ownership you are limited only by
your dedication, abilities, and creativity. It is a higher reward,
higher risk path that can be good if you have entrepreneurial
dreams and skills.

One of my favorite ways to manage the risk (something you will
learn more about in future lessons on risk management) is to work
the two paths simultaneously and hedge your bets.

For example, one of my coaching clients has a passion for real
estate and his spouse has a high earning career she loves. He is
building the real estate portfolio for wealth while she supports
current lifestyle with her earned income. They keep their their
expenses below her earnings and max out retirement plans with paper
assets each year.

With this plan they are working two simultaneous paths to wealth –
one through traditional savings and paper assets, and the other
through real estate. Because of other risk management tools we’ve
implemented their risk of failure is so small their ultimate goal
is a question of “when”… not “if”.

Another client is building his wealth through growing two separate
businesses. He also purchased the real estate that his
companies rent and contributes massive amounts annually to
his wife’s and his retirement savings. Each component – his
business, real estate, and paper assets – are individually
sufficient to provide financial security. It is really just a
matter of which one will get there first – not whether he will
reach the goal at all.

Notice how these paths are not mutually exclusive but can be
creatively combined to increase synergy and reduce risk.

You homework is to build these concepts into your wealth plan. Do
you fit one of the two profiles where you can use paper assets
exclusively? If not, how are you going to implement business
ownership with real estate while applying risk management?

Map out your wealth plan. Commit it to writing.


Connie’s comments: I work with a senior financial advisor when I map out financial strategies with my clients which include real estate, business ownership and business structuring, tax planning and paper assets. Yesterday, I shared my real estate experience with a young client who wants to own a business and do real estate investing at a young age of 27. Call 408-854-1883 or email me at to map out your wealth plan.

Net Unrealized Appreciation and Qualified Retirement Plan Distributions

Often, individuals employed by large corporations have the option to invest some of their qualified retirement plan contributions (e.g., 401(k) contributions), as well as employer contributions, into their employer’s stock. If you believe in the long term prospects of the company, that may make sense as part of your asset allocation strategy.

But what happens to that stock when you retire or leave the company? What happens if you still believe in the future prospects of the company and still considers the company stock a sound investment? You probably already know that distributions from a qualified plan can be somewhat complicated and have income tax consequences. But, is there a distribution strategy that may be effective to help you maintain the stock and minimize income taxes when you leave the company?

A Possible Solution: Net Unrealized Appreciation (“NUA”)

NUA is a tax strategy that allows you the opportunity to convert taxable ordinary income into long-term capital gain. Ordinarily, if you took a lump sum distribution of the assets in the plan, you would pay ordinary income taxes. However, when company securities are part of the distribution from the plan, using the NUA strategy, you can pay ordinary income taxes on just the cost basis of the shares, but defer and convert to capital gain the tax on the difference between the fair market value of the shares and the average cost basis of those shares. The difference is the net unrealized appreciation. When the shares are actually sold, the NUA will be taxed at long term capital gains rates regardless of how long the plan held the shares. If there is additional appreciation of the shares after the shares are distributed from the plan, that growth is taxed as long or short-term capital gains, depending on whether the ultimate sale is more or less than one year after the distribution.

Note: you can elect to pay the taxes upon distribution instead of waiting until the shares are sold. In some situations, depending upon cash flow concerns and anticipated future tax rates, payment of the taxes at distribution may make sense. In addition, in order to qualify as a lump sum distribution, the distribution must be on account of death, separation from service or the attainment of age 59 ½ years. (The definition is slightly different for self-employed persons: “separation from service” does not qualify; disability does.)


Jim, age 60, is ready to retire and has a balance in his employer’s retirement plan of $300,000, including company stock with an average cost basis of $30,000, and a fair market value of $130,000 (the NUA is thus $100,000). Jim’s account is a result of the many years of pre-tax contributions and employer matches to the account. If Jim takes a lump sum distribution from the plan, normally, he would pay ordinary income tax on the full $300,000 in the year of distribution. Under the NUA strategy however, Jim deposits the company stock into a brokerage account but does not sell it. As a result, only the $30,000 average cost basis of the company stock, and the $170,000 value of the other assets in his account (for example, mutual funds), would be taxed at ordinary income rates. The NUA would not be taxed. Sometime later, Jim sells the company stock. At that time, the NUA will be taxed at long term capital gains rates when the employer securities are sold, regardless of the holding period. However, any additional appreciation of the securities after distribution from the plan is taxed as either a short or long term capital gain depending on Jim’s holding period after distribution.

Now, suppose that instead of taking a lump sum distribution, Jim wants to roll over his entire qualified plan account into an IRA. This may be the appropriate strategy depending upon Jim’s situation. However, by rolling over the company stock into the IRA, the NUA tax treatment would be lost. Jim should take the company stock, place it into a regular brokerage account and roll over the remaining balance to an IRA. Jim would roll over the $170,000 of his account balance (i.e., everything other than the company stock) to an IRA. He would take a direct lump sum distribution of the $130,000 in company stock and place it in a securities brokerage account. $30,000 would be ordinary income, and the $100,000 of NUA would qualify for the special tax treatment.

If Jim was under age 55 at distribution, (or even if he were under 59 ½ and not leaving the company, he would not be able to take a lump sum distribution from the plan without a 10% premature distribution penalty on the taxable portion, i.e. the $30,000 average cost basis component of the stock distribution. In that case, Jim may wish to roll the entire account into an IRA.

So far, we’ve talked about the NUA strategy using your pre-tax employee contributions and the company match, if any. Some plans also allow employees to make after-tax contributions to the plan. Suppose you also made after-tax contributions and used that money to purchase company stock?

You can roll the entire account into an IRA, but the appreciation of these shares of company stock, purchased with after-tax contributions, will be subject to ordinary income taxes when you take distributions from the IRA. Similar to the situation mentioned above, where company stock is purchased with pre-tax contributions, shares purchased with after-tax contributions should be distributed to utilize the NUA strategy. The difference is that the average cost basis is not taxed when the contributions are made with after-tax dollars. The reason: these shares were purchased with after-tax dollars so it was already taxed. The NUA and additional appreciation will be subject to capital gains tax as explained before.

Could you do a direct Roth IRA conversion of the entire plan balance and still maintain the favorable NUA tax treatment? This area is unclear, but probably not. The lack of clarity is a result of inconsistent language between certain provisions in the Internal Revenue Code, legislative history and the interpretation of these provisions by the IRS.


If you invested in your company’s stock in your employer sponsored qualified retirement plan, before you decide upon a lump sum distribution from the plan, or a rollover of the account balance, including the company stock, into an IRA, consider whether you may be entitled to use the NUA tax strategy to reduce your income tax liability.

The foregoing information regarding estate, charitable, retirement and/or business planning techniques is not intended to be tax, legal or investment advice and is provided for general educational purposes only.  You should consult with your tax and legal advisor regarding your individual situation.


Free 30min phone chat with a sr financial advisor at Harding Financial to help you reduce income taxes using a business structure and financial strategies, or 408-854-1883

Make 2014 and 2015 be the year to protect your wealth and secure your retirement.

 Connie Dello Buono
Jr Financial Advisor