02-16-2017 Columns

Investing in Your Future


What’s smarter, paying off debts or investing?

If you are just starting out in your career, you will need to be prepared to face some financial challenges along the way – but here is one that is not unpleasant: choosing what to do with some extra disposable income. When this happens, what should you do with the money? Your decisions could make a real difference in your ability to achieve your important financial goals.

Under what circumstances might you receive some “found” money? You could get a year-end bonus from your employer, or a sizable tax refund, or even an inheritance. However the money comes to you, do not let it “slip through your fingers.” Instead, consider these two moves: investing the money or using it to pay off debts. Which of these choices should you pick? There is no one “right” answer, as everyone’s situation is different. But here are a few general considerations:

Distinguish between “good” and “bad” debt. Not all types of debt are created equal. Your mortgage, for example, is probably a “good” form of debt. You are using the loan for a valid purpose – i.e., living in your house – and you likely get a hefty tax deduction for the interest you pay. On the other hand, nondeductible consumer debt that carries a high interest rate might be considered “bad” debt – and this is the debt you might want to reduce or eliminate when you receive some extra money. By doing so, you can free up money to save and invest for retirement or other goals.

Compare making extra mortgage payments vs. investing. Many of us get some psychological benefits by making extra house payments. Yet, when you do have some extra money, putting it toward your house may not be the best move. For one thing, as mentioned above, your mortgage can be considered a “good” type of debt, so you may not need to rush to pay it off. And from an investment standpoint, your home is somewhat “illiquid” – it is not always easy to get money out of it. If you put your extra money into traditional investments, such as stocks and bonds, you may increase your growth potential, and you may gain an income stream through interest payments and dividends.

Consider tax advantages of investing. Apart from your mortgage your other debts likely will not provide you with any tax benefits. But you can get tax advantages by putting money into certain types of investment vehicles, such as a traditional or Roth IRA. When you invest in a traditional IRA, your contributions may be deductible, depending on your income, and your money grows on a tax-deferred basis. (Keep in mind that taxes will be due upon withdrawals, and any withdrawals you make before you reach 59-1/2 may be subject to a 10% IRS penalty.) Roth IRA contributions are not deductible, but your earnings are distributed tax-free, provided you do not take withdrawals until you reach 59-1/2 and you have had your account at least five years.

Clearly, you have got some things to ponder when choosing whether to use “extra” money to pay off debts or invest. Of course, it is not always an “either-or” situation; you may be able to tackle some debts and still invest for the future. In any case, use this money wisely – you were not necessarily counting on it, but you can make it count for you.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Infant mortality

 Infant mortality is the death of an infant before his or her first birthday.  It is often described as a rate of deaths per 1,000 live births.  Additionally, the infant mortality rate is often used as a barometer to measure the general health of a community.

Infant mortality is a significant problem in Berrien County. Not long ago, Berrien County was ranked as the worst county in the State of Michigan for infant mortality. Since then, the infant death rate has decreased due in part to Berrien County Health Department educational and awareness campaigns and programs. However, infant mortality still remains an issue in Berrien County: between 2012 and 2014 Berrien County had an infant death rate of 7.8 deaths per 1,000 live births which is higher than the Michigan average of 6.9 deaths per 1,000 live births during that same time.

The Berrien County Health Department and the Raising Up Healthy Babies Infant Mortality Reduction taskforce are working to help reduce infant deaths and make sure that more babies are growing up healthy. Some community programs that help prevent infant deaths include home visiting programs like the Nurse-Family Partnership (NFP) program, or Maternal and Infant Health Program (MIHP) which provides mothers and caregivers with the education and tools they need to have healthy babies. Another program, Baby’s Own Bed, provides cribs and safe sleep supplies for families in need.

For more information on any of these programs, call the Berrien County Health Department at (269) 926-7121 or visit us online at www.bchdmi.org and on Facebook at www.facebook.com/bchdmi.

Executive recommendation

 This last week we were able to hear Gov. Rick Snyder present his proposed budget to a joint House and Senate Appropriations Committee. Over the next few weeks the legislature will begin to work through the recommendations with the ultimate goal of constructing a responsible, effective state budget by June.

Personally, I am encouraged by the proposal to invest more money into higher education. In 2011, the higher education budget underwent a significant 15 percent cut across the board and while the legislature has made re-investments over the years, some colleges have still not been made whole again.

Spending, however, should not increase for the sake of it, and the legislature should not accept the executive recommendation without first doing its own homework. As chair of the House Appropriations Subcommittee on Higher Education, that is exactly what I plan to do.

I will work diligently to ensure all tax dollars are spent in an efficient and fair manner. By tying increases to performance, we can reward higher performing institutions, keep tuition increases down and ultimately allow more students to pursue their educational dreams. To do this, means going through the budget line by line, making sure our formulas work, and following up where the money was spent.

As I begin to work through the Higher Education, General Government, Health and Human Services, and Agriculture and Rural Development budgets, I want to seek your input.

I am excited to announce our first round of office coffee hours throughout the district and hope you will join me to not only ask questions about state government, but also provide feedback and input. Please see our newly announced schedule below!

Friday, Feb. 24 – Sidetrack Cafe in Watervliet, 9-10 a.m.; Friday, March 3 – Mason Jar Cafe in Benton Harbor, 9:30-10:30 a.m.; Friday, March 10 – Thorton’s Hometown Cafe in St. Joseph, 8:30-9:30 a.m.; Friday, March 24 – Olympus Restaurant in Bridgman, 9-10 a.m.; Friday, March 31 – The Hot Spot in Coloma, 9-10 a.m.

As always, residents can contact my office with any state or local issues by calling (517)373-1403, emailing KimLaSata@House.mi.gov or visiting my website at www.RepLaSata.com.

It is an honor to serve you.

Working together to strengthen our Great Lakes

 Last week, I joined my colleagues on the Congressional Great Lakes Task Force in sending a bipartisan letter to President Donald J. Trump encouraging the new administration to work with the task force in advancing priorities vital to protecting and promoting the Great Lakes.

Our letter highlights several initiatives important to the Great Lakes Task Force, a bipartisan, Congressional Members Organization with the mission of advocating for the strongest policies and programs that enhance the Great Lakes. Those initiatives include funding for the Great Lakes Restoration Initiative (GLRI), responding to the threats of nonnative invasive species such as Asian Carp, and improving and upgrading water infrastructure, including investments to modernize the Soo Locks in Sault Ste. Marie.

Growing up on the shores of Lake Michigan instilled in me a deep appreciation for our Great Lakes. I have always worked in a responsible, bipartisan manner to improve the health and beauty of these precious natural resources. These efforts have included keeping pollutants out of our lakes, leading the successful effort to ban synthetic plastic microbeads, championing pipeline safety legislation, fighting invasive species, and more.

I appreciate the new administration’s willingness to engage on these important issues and look forward to working with them to promote, strengthen, and preserve our Great Lakes.

To learn more about this and other important legislative issues, please visit my website: upton.house.gov or call my offices in Kalamazoo (269-385-0039), St. Joseph/Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).

Michigan offers free winter fishing this weekend

 Michigan offers two weekends each year when Southwest Michigan families and out-of-state visitors can get together and enjoy some of the world’s best fishing — at no charge.

This year’s Winter Free Fishing Weekend is Feb. 18-19.

The free weekend is an excellent opportunity to introduce the joy of fishing to children or to try winter fishing for the first time.

During the weekend, all fishing license fees will be waived, and vehicles will be able to enter state parks and use boating sites without a recreation passport.

Residents and visitors may enjoy fishing on both inland lakes and the Great Lakes for all species of fish, but all fishing regulations still apply.

To celebrate the free fishing weekend, organized activities are scheduled in communities across the state.

For more details on the Winter Free Fishing Weekend, including a list of activities across the state, visit www.michigan.gov/freefishing. Type in “The Coolest Sport Around” on the website for an article packed full of helpful information about ice fishing.

Ice fishing can be dangerous for those who do not follow safety procedures or who head out unprepared, on the website type in “Ice Safety Tips” for details on what to know before going out on the ice.

I encourage area anglers — and those who have never gone fishing — to get out and take part in one of our state’s premier outdoor activities.

Please remember that having fun starts with being safe.

As always, I look forward to hearing your comments and feedback on the important issues facing Michigan. You can contact me at 517-373-6960.