For many investors, financial independence is the ultimate goal. It’s the point where your assets generate enough income to cover your living expenses, giving you the freedom to work on your own terms or choose to retire completely. 

However, reaching this milestone should also prompt a critical shift in your investment strategy. While the path to financial independence often involves seeking higher returns to accelerate wealth accumulation, continuing to take on too much risk once you've achieved that goal can be detrimental to your long-term financial security.

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As Baby Boomers continue to enter retirement, following decades of diligent saving and investing, many are finding themselves sitting on a nest egg that is significantly larger than they will realistically need to live on. In fact, according to Fidelity's most recent 401(k) Millionaire study, the number of people with $1 million or more in their 401(k) accounts reached another all-time high. 

For many, this creates an opportunity to rethink the traditional approach to inheritance. When most people think about leaving an inheritance to their next generation(s), they imagine passing on assets after they’ve passed away, ensuring their children and grandchildren are financially secure for years to come. While this traditional approach to inheritance has its merits, there is an increasingly popular alternative that offers profound emotional, financial, and practical benefits: a living inheritance.

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A recent survey by PwC of nearly 4,000 business and tech executives representing some of the largest global companies suggests that in 2024, 79% of organizations intended to increase their cybersecurity budgets from 2023. The survey also notes that the cost of security breaches, as well as the number of high-dollar breaches, continues to increase. And although cyber attacks are the top concerns cited, only half the organizations surveyed indicate they are ‘very satisfied’ with their technology capabilities in key cybersecurity areas.

If you couple those findings with the U.S. Securities and Exchange Commission’s (SEC) recent rollout of new rules requiring public companies to disclose material cybersecurity incidents to shareholders, you get the business case for why the cybersecurity sector is ripe for both growth and consolidation over the next few years and why investors might want to pay attention.

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Every four years, the world gathers to watch the Olympic Games and marvel at the incredible feats of athleticism and the awe-inspiring dedication of the competitors. Whether your favorite event to watch is gymnastics, swimming, or track and field, the athletes who compete all share similar traits that go beyond physical ability, such as discipline, mental toughness, and a willingness to delay gratification.

The success of investing legends like Peter Lynch, author of “One Up on Wall Street,” who achieved remarkable long-term returns during his tenure managing the Fidelity Magellan Fund, underscores the value of patience and persistence. Lynch famously advised investors to "buy what you know" and to stay the course, even during market turbulence. His philosophy is one that mirrors the long-term dedication of Olympic athletes.

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As a parent, teaching your children to become financially responsible is one of the most impactful lessons you can impart. However, knowing what to say, how to say it, and how much information is too much information to share all at once can feel daunting. So much so, that it keeps most parents from ever trying.

In this episode of Malcolm on Money Office Hours, Malcolm shares some questions that parents can use as conversation starters with their children of any age, to help open up lines of communication and get comfortable discussing money as a family.

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Individual Retirement Accounts (IRAs) are intended to be used as a savings and investment vehicle for retirement. And while it is not uncommon for workers to have a need to tap into this account prior to retirement, if you withdraw funds from your IRA before you reach age 59½, you could owe the IRS a 10% early distribution tax on top of the regular income taxes associated with a distribution from a traditional IRA.

There are, however, a few exceptions to the additional 10% tax. In this episode of Malcolm on Money Office Hours, Malcolm discusses the exceptions to the IRS’s 10% penalty on early withdrawals from IRAs, and shares how to go about claiming such an exception on your tax return.

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Health Savings Accounts (HSAs) are often referred to as a triple tax-advantaged savings and investment vehicle, due to their ability to allow tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Yet many Americans do not take full advantage of their potential. 

Despite their immense tax advantages, HSAs remain underutilized and mismanaged by a significant portion of those who have them. Oftentimes, HSA owners treat them like a simple checking account to cover immediate medical expenses, failing to recognize their long-term benefits.

In this episode of Malcolm on Money Office Hours, Malcolm shares his take on how to optimize contributions to an HSA, as well as some of the common mistakes HSA participants tend to make and how to avoid them.

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It can often be tempting to accumulate as much stock in your employer as possible- whether as a show of confidence in the future of the company, or as a means to accumulate wealth quickly.But when you decide to join your finances with a spouse or partner, in addition to determining if and how you'll merge your various checking and saving accounts, it's also important to determine how you'll approach investing as a couple.

In this episode of Malcolm on Money Office Hours, Malcolm makes the case for why it's important to take some chips off the table along the way, as well as use the shares that you've accumulated as part of your total compensation package to achieve some of your bigger financial goals. While there's no problem with maintaining a position in your company's stock, you want to make sure that no one security represents more than 20% of your overall net worth at any point.

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Right now, at this very moment, a growing number of employers are offering some of their more tenured workers large, lump sum payments to turn in their key cards and credentials and retire early.

Especially for those who work in fields like tech, or maybe finance, where companies are currently trying to reduce headcount as a way to show Wall Street they mean business when it comes to controlling costs and exercising some fiscal discipline.

In this episode of Malcolm on Money Office Hours, Malcolm lays out the key things to consider when reviewing an early retirement offer from your employer, as well as how to know whether you are actually ready to accept it.

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With all of the recent changes to the rules surrounding inherited retirement accounts, it can be tough to figure out what, exactly, you are required to do to stay on the right side of the IRS.

However, By understanding the rules around inherited retirement assets, you will be better equipped to avoid costly mistakes, like early withdrawal penalties.

In this episode of Malcolm on Money Office Hours, Malcolm shares a few things to be aware of if you have just inherited a retirement account from a loved one, as well as advice on how to keep from giving close to 50% of it over to the IRS unnecessarily.

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For real estate investors with portfolios spanning several decades, the decision to sell a property can present a significant financial dilemma. On one hand, the allure of capitalizing on a property's appreciated value is tempting. On the other hand, the tax implications of a sale can eat away at any projected financial gain.

Alternatively, a tax-deferred exchange (commonly referred to as a 1031 exchange) can offer a strategic advantage for mitigating the potential tax burden of unloading an investment property that has appreciated in value. A 1031 exchange can also be used to facilitate a stable source of income in retirement, as well as allow an investor to simplify their estate plans.

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If you recently changed jobs or are currently considering an offer for a new one, you have probably thought about your new salary and benefits package, the commute, and perhaps even how you will reward yourself for a job well done. However, there is a good chance you may not have given much thought to what you will do with the money accumulated in your former company’s 401(k) plan.

If you’re changing jobs or retiring, it’s important to know the rules regarding moving funds from your employer sponsored retirement plan. Because once you’ve submitted the rollover paperwork, the toothpaste is out of the tube, and there’s no going back.

In this episode of Malcolm on Money Office Hours, Malcolm shares key details on how to avoid making a mistake when you roll your old 401k into an IRA (or individual retirement account).

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In discussions about building a financial legacy, the words “generational wealth” have become almost meaningless. This term has morphed into a buzzword that is casually tossed around in conversations ranging from estate planning, meme stock investments and cryptocurrencies, to the purchase of real estate or insurance.

But beyond the allure of long-lasting riches, what does creating generational wealth truly entail? At its core, generational wealth refers to assets being passed down from one generation to the next, ensuring financial security and providing opportunities within families. However, generational wealth is not entirely about money or financial assets; it also includes intangible assets such as education and professional networks.

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These days, companies must get creative about the ways in which they both compensate and motivate their workforce. And one of the most popular practices is to offer employees opportunities to purchase shares of the company's stock through their 401(k) plan.

In some instances, employees are able to accumulate a sizeable number of those shares and defer taxes on any growth in the process. But what happens to those shares when it's time to part ways with that employer?

In this episode of Malcolm on Money Office Hours, Malcolm shares details on a lesser known strategy that anyone who has accumulated shares of company stock inside their 401(k) account should know about. He also lays out how to execute such a transaction, as well as some issues to be aware of prior to submitting rollover paperwork.

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In a stock market fueled by excitement over artificial intelligence (AI) and its potential, much attention is paid to the advanced microchips used to power these ever-evolving technologies. However, the unsung heroes of AI’s rapid evolution are the data centers that form the backbone of this industry.

As big tech companies such as Microsoft, Amazon, Alphabet, META, and others race to dominate the AI landscape, the importance of data centers has become increasingly evident, arguably surpassing microchips in certain aspects.

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Receiving an unexpected financial windfall can be a life-altering event. Whether an inheritance, lottery winnings, legal settlement, sale of a business, or a substantial bonus from your employer, such a spike in your cash flow can be just as overwhelming as it is exciting. Though it may not seem like much of a problem to come into a lot of money all at once, it certainly requires a plan to make sure that it not only lasts but also helps to enhance your overall quality of life.

Sudden wealth has the power to transform the lives of those who receive it, with outcomes ranging from positive to negative or somewhere in between. This potential transformation is due to the number of decisions that come along with receiving a large sum of money. Each decision carries the possibility to either squander the funds or use them productively, enhance overall happiness or diminish it, and strengthen personal relationships or undermine them.

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When it comes to retirement, savvy savers know that diversification is key, not in the assets they choose but also regarding the types of accounts they use. By strategically allocating retirement savings across traditional IRAs, Roth IRAs, and taxable brokerage accounts, pre-retirees can optimize their tax situation prior to and during retirement.

Tax diversity simply refers to the practice of spreading investments across different account types that each have distinct tax implications for contributions, growth, and withdrawals. And the significance of such a strategy in one's investment portfolio cannot be overstated.

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As the stock market continues to reach record highs, with valuations reaching what some investors fear might be unsustainable levels, concerns about an impending correction have intensified. This nervous market sentiment has led prudent investors to consider rotating a portion of their portfolios toward safer investments that have a tendency to hold up when markets falter.

Historically, when investors seek out safe havens during periods of increased market volatility, they tend to land in one of two places: Treasuries if they’re looking for fixed income solutions, and utilities or consumer staples if they want to stick it out in stocks. But following the Covid-19 bear market that began in early 2020, there has been a shift in market dynamics, where “big tech” has become the new go-to for stability.

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In the modern economy, side hustles, consulting, and freelance work have become increasingly popular ways to supplement income. And in some cases, side projects can even produce more income than traditional full-time employment, though managing the tax implications of these additional earnings can be challenging.

Income from side projects is subject to taxes, just like your paycheck from your full-time job. However, unlike traditional employment, taxes are not automatically withheld from your earnings. Instead, you are responsible for reporting this income and paying the appropriate taxes, including self-employment tax, Social Security, and Medicare.

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