New York Times Best-selling author, her latest, Wealthy by Design, (2013)
President/Founder, Empyrion Wealth Management, since 1989
Has appeared on FoxNews, Fox Business, CNBC’s The Call, The Today Show and Good Morning America
Contributes to mainstream radio shows and newspapers such as Wall Street Journal, Worth Magazine, and Marketwatch
Married to Charles
Kimberly Foss: Getting the Most Out of Your Tax Return
The 700 Club
MONEY WAS HER FUTURE ALL ALONG
Kimberly, 50, grew up in a Baptist home in California as the youngest of six children. Her dad was a carpenter who never made more than $20,000 a year and her mom was an Avon lady. The family never had much in the way of material things, and Kimberly always wore her sisters’ hand-me-downs. At the time, Jordache Jeans were popular with young kids and were $35 a pair. “I wanted Jordache Jeans so bad,” says Kimberly. As a teenager, she asked her dad if she could cut down the overgrown blackberry bushes on their lot to make money. He said yes and paid her $1.00 an hour. Kimberly made enough money for the jeans and still had enough to stash away, which was the beginning of her college and rainy day funds. She became her father’s carpentry “assistant” and developed a strong work ethic, saving all of the money she earned. At 17, she worked full-time at a pharmacy and balanced a full work schedule with school. It wasn’t easy to do. “It was worth it,” says Kimberly. “I knew I needed to earn enough money for college, because my mother and father had no money to spare for such ‘luxuries.’”
She graduated from high school in 1980 and attended a local junior college allowing her to live at home. Kimberly continued to work full-time so she could save for tuition. With her savings, a few college grants, scholarships and a few student loans, Kimberly had enough to attend the College of Business at California State University, Chico. After college graduation, Kimberly worked at Merrill Lynch. Then at 25, she decided to venture out on her own. “I started my own practice in capital markets with the philosophy to really do right by people.”
Kimberly believes she is fulfilling God’s calling on her life by helping people with their money. When she was a little girl, Kimberly’s sister was 20 years older and took her to church in Northern California. One day, Kimberly raised her hand and went down the aisle, giving her life to the Lord. She has maintained a strong relationship with the Lord and when the stockmarket crashed in 2008, Kimberly learned to lean on God completely.
Kimberly advises clients of all financial backgrounds. However she says the common denominator for all of her wealthy clients is that all of them saved money the old-fashioned way. When she started saving money, Kimberly started saving $25 a month, then gradually increased to $50, then $100. After 5 years, she was saving $30,000 a year! “I’m nothing special,” says Kimberly. “What I’ve witnessed over 30 years is that my wealthy clients lived below their means most of their lives and saved, saved, saved. As they made more, they still kept their standard of living.” Kimberly believes highly in paying cash for everything and eliminating all credit card debt.
She understands that in this economy many people may not be able to save money every month. Kimberly says to use her “3 T’s,” and recently asked her sister, Lynda, to write down all her expenses. Once Lynda tracked her expenses, she realized exactly where she needed to cut back.
Track: Track all expenses (something as simple as a sheet of paper or even on a smart phone app like Mint.com, which categorizes all of your spending and tells you at the end of the month where you are spending). “Budget: the “B” word. Everyone hates it,” says Kimberly. “Budgeting makes you aware.”
Trim: Once you determine where you are overspending, Kimberly says to cut back on that area. For example, if you are spending $130 on cell phone service, perhaps you can combine with a relative and cut that expense to $50 a month. “After you become aware, you can take action,” says Kimberly.
Target: With the savings every month you are making on all of your trimming, Kimberly says to put that money away so you can open an IRA.
Kimberly says one of the few things you can still do to reduce your 2013 tax bill is a traditional IRA. If you don’t have a retirement plan at your job, you can deduct your full contribution, up to $5,500 or $6,500 if your’re 50 or older. If you have a workplace plan, you are entitled to a full or partial deduction, only if you earned less than $115,000 as a married couple filing jointly or $69,00 as a single filer.
With a high-deductible health insurance plan, you can fund a health savings account (HSA) and deduct your contribution no matter how high your income is. The number of Americans in HSA-eligible plans grew 15% to more than 15 million; If you set aside enough in your HSA to cover your deductible last year, keep in mind that you can put in a maximum of $6,450 as a family in 2013 or $3,250 as an individual.
Until last year, you could deduct medical expenses that exceeded 7.5% of your adjusted gross income. That hurdle has been raised to 10% if you are under 65. Those 65 and over can keep using 7.5% but only until 2017. If you’re near the cutoff, take a second pass through your receipts. Don’t forget dental care and travel costs for your doctor and dentist visits. Other expenses you might have overlooked: doctor-prescribed weight loss programs, laser vision surgery, and health-related home upgrades such as safety bars in the shower. For the longer term, try scheduling elective medical procedures so that you bunch as many expenses in a single year as possible.
For 2014, Kimberly says that maxing out your 401(k) will reduce your taxable income in 2014. If you get a headstart on planning today, you’ll thank yourself a year from now when your tax bill is lower. Maxing out your 401(k) will not only reduce your taxable income, but you’ll shelter investment gains, dividends, and interest that night otherwise bump you into a higher tax bracket. You can contribute up to $17,500 to your plan in 2014, plus $5,500 if you are 50 or older.
High-quality 10-year municipal bonds are yielding 2.4%, the equivalent of earning a taxable 3.4% in the 28% bracket.
Save in a 529 plan. Your earnings are tax-free as long as you ultimately use the funds to pay for higher education. Many states also offer a state tax deduction for your contributions.
Give or donate stock to your favorite charity, like CBN. Higher capital gains rates for top earners give you even more incentive to avoid taking a big profit in a single year. If you’re planning a major charitable gift, make it a highly appreciated asset. You’ll avoid capital gains taxes and be able to deduct the full market value. Give grown kids stocks or funds that have done well. They can sell these winners at what will probably be a lower tax rate.
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