Money, Goals, and Taxes, Oh My

2025, a fresh start.

Along with that come so many opportunities. Especially so many opportunities to write about.

Should I write about making smart goals in the new year?

Should I write about my recent post about tax brackets that has now been seen over 90,000 times?

Should I write about the way we view money and how we should treat it?

Honestly, I can't decide.

So due to my indecision, I am giving you all three.

Before I jump into making smart goals or discussing details of the tax code, I think it is more important to first establish our view of money and how we treat it.

First I will address it from the worldview that I hold, and then offer a less biblically focused version that anyone can adopt no matter their beliefs.

For those with a biblical worldview:

Recently I was listening to a podcast that discussed money and more specifically "net worth" in terms that I'm familiar with but haven't used in this way.

The term is "assets under management." While this is a common term for people in financial services, it may not be familiar to those who don't work in finance.

What this term means is how much money we manage on behalf of others. Our clients entrust us to manage their investments in a way that is favorable to them, otherwise, they probably wouldn't be clients.

Their money factors into our "assets under management." Their money is not our money. Out of that comes our fees, which provide the revenue for us to stay in business. But I can't state enough that the money that we manage is not ours; it's our clients'.

For fellow believers, I believe this is how we should view "our" money.

Ultimately, everything under the sun is God's, and while I believe we have a larger degree of control over our finances than most people may think, if God does not want us to have something, we will not have it.

The inverse is true too. If God wants us to have something, there's nothing we can do to keep from getting it.

I'm also personally not crazy about the term "net worth" because I don't believe we get our value and worth based on how much worldly money we have, but nonetheless, considering this number to be our "assets under management" rather than net worth, I believe keeps us in a more biblical mindset of how we should see our money.

That mindset being that this isn't our money, it's God's.

For any worldview:

I was listening to a podcast (are you noticing a trend here?) about more of the behavioral side of money where the guest made an analogy between money and gas.

He said:

"...money is just fuel. The realization I had is money is nothing more than fuel in a tank, and just like you would not choose to go on vacation to a gas station, that's what you're doing when you say, "I just need to get to $10 million or $5 million, or $50 million", whathever the number is, and you realize that's not the thing. The thing is what you're doing it for."

I've mentioned this before, it is cliche to say that money can't buy happiness, but it is true. It can buy comfort, but comfort and happiness are not the same thing.

Viewing money as the "fuel" rather than the goal is, I believe, a healthier way to go through life.

But I will say, just because I don't believe money should be the goal, does NOT mean that it should not be measured. After all, your car tells you how much gas you have left.

Now that we've established a little bit more of what I believe to be a healthy view of money, let's get into setting goals for this year.

1. Pick something that's achievable, yet still holds your attention.

In the words of Michelangelo:

"The greatest danger for most of us is not that we aim to high and miss, but we aim too low and reach it."

It's not exactly practical to believe you'll have a million dollars invested by the end of this year if you're starting with zero and only make $20k, but it's not intriguing enough to say you want to have $1 invested either.

With that in mind, maybe it's the optimist in me, but I'd rather shoot for something that I'm not sure I'm going to be able to reach. I've got a pretty audacious goal for my fitness this year, and while I plan to achieve it, inwardly I question at times if it's practical. Time will tell.

2. TRACK IT

I don't know many people who have reached their weight loss/fitness goals by never stepping on a scale.

If you want to SAVE more, pick a number and track it.

If you want to INVEST more, pick a number and track it.

If you want to GIVE more, pick a number and track it.

3. Find people to support you.

1800's mathematician Karl Pearson famously coined "Pearson's Law." You've likely heard at least the beginning of it.

That which is measured improves...

What you may not have heard is the following sentence.

That which is measured and reported improves exponentially.

The truth is you can report your success to yourself, but it carries much more weight when you report it to other people who can both celebrate with you AND hold you accountable.

I believe that we are all too tight-fisted both with our money and with our willingness to share our financial journey with friends and family. By no means am I saying that you should post all of your financial struggles on Facebook, but I am saying that you shouldn't feel like you can't tell close friends that you're struggling to know if you're on track for retirement or not.

Chances are, they may be in the same boat.

Lastly, we come to taxes.

To say the least, I'm shocked that I had a post that has done so well here on LinkedIn honestly to the point that this one post was seen more than ALL of my posts in the previous year...combined.

That being said, thank you to everyone who liked, commented, and shared this post. The broad range of people that it was put in front of is a little hard to wrap my mind around, but I hope that everyone who saw it was able to understand a very complex topic a little easier.

So in an effort to copy something that has worked rather than recreating mediocrity, I'll simply copy and past the post below.

Taxes can seem way too complicated. Hopefully, you can use this as a guide for the 2025 tax brackets.

As you continue to earn income, you can think of the different brackets like "overflow buckets." Once one fills, it starts pouring into the next.

Unfortunately, the bottom is an endless "ocean" of 37% tax, but at least it's not 47% right?

But for instance, let's say a couple makes $250,000 in 2025. The first $23,850 of that is taxed at 10%.

Once that "bucket" fills up, the money you make from $23,851 to $96,950 is taxed at 12%.

From there, going up to $206,700, the money is taxed at 22%.

Finally, the remaining $43,300 (that gets us up to $250k) is taxed at 24%.

Feel free to "turn off" the income flow at whatever your income is to get an understanding of how tax brackets will affect you next year.

Of course, there are deductions, credits, and all kinds of other things that come into play for your taxes, but hopefully, this will help simplify a complex topic.

And that wraps up the first of Nickels and Sense for 2025.

I hope that you and your family are off to a great start. If you need any help with any of the topics mentioned today or any other financial topics, feel free to reach out to our office.

We'd love to help.

Spencer Reed, CPFA?