Vento - Financial independence (getting to point X): a comprehensive tax-smart wealth management guide

1. Chapter 2
2. Chapter 7
3. Chapter 8
4. Chapter 9

Second Edition

John J. Vento

Copyright 2018 by John J. Vento. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.

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Library of Congress CataloginginPublication Data

Names: Vento, John, author.
Title: Financial independence (getting to point X) : a comprehensive taxsmart wealth management guide / John J. Vento.
Description: Second Edition. | Hoboken : Wiley, 2018. | Revised edition of the author's Financial independence (getting to point X), c2013. | Includes index. |
Identifiers: LCCN 2018021243 (print) | LCCN 2018021981 (ebook) | ISBN 9781119510383 (Adobe PDF) | ISBN 9781119510352 (ePub) | ISBN 9781119510345 (hardback)
Subjects: LCSH: Finance, PersonalUnited States. | BISAC: BUSINESS & ECONOMICS / Finance.
Classification: LCC HG179 (ebook) | LCC HG179 .V457 2018 (print) | DDC 332.02400973dc23
LC record available at https://lccn.loc.gov/2018021243

Cover Design: Wiley
Cover Images: Axel Bueckert/EyeEm/Getty Images;

SchulteProductions/Getty Images

This book is dedicated to the memory of my
parents, Rosario Vento and Concetta Giuffre
Vento, for the sacrifices and commitments they
made throughout their lives to provide their
children with the opportunity to live the
TRUE American Dream.
Momma and Poppa, I love you, miss you,
and think about you every single day!

Driving to work the other day, I saw a billboard with a simple statement: We spend more time clicking like than planning for retirement. Take a moment or two to let that thought sink in.

If you're like me, you probably find that proposition pretty disturbing, primarily because it rings so true.

By now thousands, maybe even millions, of Americans have seen that billboard noting that we spend more time choosing emojis, or even looking at billboards, than planning for retirement. I wonder how many of those people have actually started thinking about retirement. This is a pressing issue for those in their forties or older, but it's important for young adults, too. Cat videos and pictures of our friends' grandchildren are certainly more fun than dealing with financial matters. It's a lot easier to assume things will work out than it is to come up with a financial plan. But whether you have four years or 40 left in your working life, retirement gets closer every day.

If you ask most Americans what material thing they desire most, high on everybody's list is having enough money to do whatever they want without worry. Achieving financial independence, what John Vento calls getting to point X, is such a common aspiration, but short of hitting a lottery megajackpot, most people have no idea how to get there. As contradictory as it may sound, the United States is the richest and most successful country in history, yet we are a nation of financial illiterates.

The vast majority of people graduate from high school or college with no understanding of fundamental financial concepts like how to make a budget, why it's important to start saving and investing at an early age to take advantage of the way the power of compounding makes your money grow faster, or how the wrong kind of debt can cripple their chances of achieving their financial goals.

Consider that currently only 17 states have some mandated financial literacy curriculum for students in high school. I saw an article recently that pointed out that 94% of American adults were unable to pass an 11question test that asked basic financial questions like, If you purchase a bond and interest rates rise, what will happen to the price of the bond? In today's environment, knowing the answer to that question could be pretty helpful.

Economically, we live in a different world than our parents did. For most people who don't work in government, pensions are a thing of the past; public pensions are threatened as well. We often hear about how New Deal and Great Society programs like Social Security and Medicare may soon be unable to fund their longterm obligations. We've made individuals responsible for funding their own retirements and financial futures, but haven't given them the resources and tools to do so.

Unfortunately, money doesn't come with a set of instructions, an issue of which John Vento, as both a Certified Financial Planner and Certified Public Accountant, is well aware. Like most Americans, John didn't learn about investing from his Italian immigrant parents. But they did share some priceless practical advice about money don't buy it if you don't need it and live within your means.

John has taken those moneywise principles and built upon them to create a holistic approach that provides not only a guidebook to financial literacy, but also a roadmap to financial independence. Over the years he has shared his experience and financial acumen to help hundreds of clients.

What makes John's approach, and this book, so helpful is the emphasis placed on strategically managing one's tax obligations. In fact, it's one of the first issues he addresses. Understanding tax strategies and managing your tax bill should be part of any sound financial approach, and with decades of experience, John is in an excellent position to help readers accumulate (and keep) personal wealth by combining holistic financial planning with a strategic approach to taxes.