Last Christmas I Gave You My Heart
“And the very next day, you gave it away. This year, to save me from tears, I’ll give it to someone special.” Read to the end for a couple fun facts about George Michael’s Christmas song from 1984.
If you have ever considered gifting money as a way to show those around you how much you love them, first a story and then a bit about the financial benefits.
About 5 years ago, my parents created a scholarship for Napoleon, Ohio area students. If a Napoleon area student decides to attend a Catholic college, they are eligible for the annual scholarship. My parents wanted to give back after all 8 of us (mom, dad and the kids) attended a Catholic college or university. Each year, my dad donates money from his IRA to continue adding to the available monies. As of this article, the scholarship is able to give out $1,000 a year and will live on forever as the fund throws off $1,000+ in interest every year to fund the scholarship.
Research has shown that giving to others – especially to people and causes whom the giver really cares about – has psychological benefits. Having money makes us happy, but giving it away makes us happy too. Studies have shown that the brain’s reward system releases neurochemicals when donating to charity that cause our body temperature to rise and create a positive “warm glow” feeling. The physiological benefits can also lead to longer lives, and provide long-lasting protection against depression.1
Why is this a topic for us? Well, the IRS offers some tax advantages. So as we get close to the end of the year, I thought it would be worth mentioning a few of them:
You can give $15,000 to any individual during the year without any estate or gift tax consequences. In most cases, you don’t even need to file anything with your tax return.
You can give money to a charity directly from stocks you own. If you give appreciated stock from a brokerage account, you avoid the capital gains tax and you receive the charitable deduction.
You can donate to charity and avoid the ordinary income tax if you are at the age (70 ½ or 72) where you need to take money annually out of an IRA via Required Minimum Distribution.
These are just some of the ways you can utilize your investments to give financial gifts this Christmas season, whether that’s appreciated stock or cold hard cash. If you are interested in giving and you have questions, feel free to give us a call.
Regarding our friend the stock market, it continues to go up. After a rough September, the S&P 500 was up 6.9% in October. Many of the pundits are scratching their heads as big tech (Apple, Microsoft, Google, etc.) and other transformative innovators march higher (Tesla, Moderna, and others). At the same time, inflation appears anything but transitory with energy, health care, cars and just about everything more expensive today than pre-pandemic. Those same pundits are predicting a pull-back in the spring on the assumption the government spending and inflation will eventually catch up to the markets. Do they really know when that will happen, or are they just hedging their predictions? As Brian often says, if you keep predicting a market pullback, you’ll be right at some point. We continue to position our portfolios for continued gains while including bonds and hedges (gold, financials and energy as I type this) to cushion any falls that might occur.
If you read all the way to the end, you are probably curious about Wham’s “Last Christmas”. Wham’s George Michael wrote the song in 1984 and it spent 5 weeks at #2 in the UK behind Band Aid’s “Do They Know It’s Christmas.” Amazingly, it made many subsequent chart runs, including three more weeks at #2. It finally reached #1 in the UK on New Year’s Day, 2021, more than 36 years after its initial release!!!2 George Michael wrote the song in 1984 while visiting his parents. He wrote the song in his childhood bedroom.
Jared
Brian Kellett, brian@kellettschaffner.com. Phone 513-312-6067
Dave Bodnar, david@kellettschaffner.com. Phone 513-258-6973
Jared Kline, jared@kellettschaffner.com. Phone 513-768-2238
Kellett Schaffner Wealth Advisors LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Kellett Schaffner Wealth Advisors LLC and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Kellett Schaffner Wealth Advisors LLC unless a client service agreement is in place.