From The Daniel Island News

Dreams beyond the Cliff
By Stephanie Mackara, JD
Dec 19, 2012 - 10:19:01 AM

Stephanie Mackara, JD
Following the election I wrote a piece entitled Standing on the edge of a Fiscal Cliff.  More than a month has passed and we are, as predicted, still standing on the edge of a cliff.  I don’t expect politicians to suddenly change their stripes and compromise, which leaves us shamefully at their mercy.  Let’s be honest with ourselves, taxes are going to go up.  As a nation, we can’t pay for a growing budget deficit, Social Security, Medicare and Medicaid without a tax increase.  Based on the 2010 US Census, Daniel Island household income, at $121,000 (DIPOA survey shows income at $170,000) shows us that a large majority of Daniel Island residents will see an increase in taxes.  Those that do not see a direct tax increase on ordinary income are likely to see tax increases on their investment income either via capital gains or dividends.  In the end there will be a “compromise” that will consist of a patchwork quilt of short-term fixes, with little done to solve the root of our economic woes.
So, instead of focusing on the failings of Washington, I would prefer to focus on you, the hard working, family loving, community minded taxpayer.  You certainly deserve someone’s attention!  This time of year is meant for celebrating family, faith and taking the time to enjoy the lives we have built.  It is also time to reflect on the year that has passed, honor our successes, learn from our mistakes and most importantly, plan for next year.  Sounds reasonable, but how can one plan for their individual families or for their business with such uncertainty in the air?  Believe it or not, there is a way.
No matter the results from Washington, there are a few basic questions you can ask yourself in order to properly plan for next year:
- What goals are most important to me over the next year, 5, 10, 15, 20 or 30 years? (Funding college, vacations, weddings, philanthropy, second home, retirement etc.)
 - How much should I save?  
 - How much risk should I take in my investment portfolio in order to achieve these goals?  

The answers to these three questions will help put you on a clear path towards your goals. Developing a plan will help you achieve these goals, sleep more soundly, provide organization to your life and most importantly, give you piece of mind that the fruits of your labor are applied towards the things that matter most in your life.  
Taking the time to develop a plan is hard work.  It requires us to slow down, to answer tough questions about family, relationships and perhaps even face some of our own short-comings (probably why our friends in Washington have avoided this process!).  But it is time we start taking more control of our financial futures.  We must take the first step--understand what we really want out of life and build a plan to make it happen.  Then we must commit to the plan, revisit the plan and make adjustments as necessary.  This may mean, spending less and saving more, it may even mean, retire later than expected.  It is hard to hear these words and make these adjustments, but we live in thoughts and dreams, not dollars and cents.  When you understand what is on the other side of these decisions, the cliff doesn’t seem so scary.  
Stephanie Mackara is a Daniel Island resident and Chief Marketing Officer for Palladiem, LLC, a registered investment adviser under the Investment Advisers Act of 1940.

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