Patrick Bourbon
Best of BFM
We've carefully assembled practical tips you can use to help you make better, more informed decisions.

Did you know that your vision can literally "trick" you? Did you know that human attention is limited and that we can't analyze all the information we receive?
Financial Tips
Learn More
How to Reduce Taxes? Let's Learn More About the U.S. Tax System !

Are you curious to know how the recent tax changes will affect you?

• The last time the top individual marginal tax bracket increased was 1993. The maximum marginal tax rate of 31% in 1992 was raised to 39.6% in 1993.

• The U.S. has not run a budget surplus since 2001. Federal debt is more than 100% of GDP, the highest in over 60 
years. When the present value of social security and healthcare liabilities is taken into account, the debt-to-GDP ratio may climb to more than 300%.

Our goal is to help our clients understand how additional tax increases could impact their lifelong investments and portfolios.


• We would like to highlight one of the many tax reduction strategies available. Additionally the newsletter provides insights into various tax related topics by studying historical data and trends.

• To combat the negative fiscal balance and reduce the debt burden, the U.S. government may continue to increase its revenue stream by raising taxes. Other states may follow the example set by California; it has just raised taxes by 30%, retroactively.
• With the continuous down-trend in income tax rates from a high of 94% in 1944,  taxes collected by the U.S. government as a percent of personal income are currently at its lowest in over 50 years.

• The good news is that U.S. stocks have achieved a five-year high and more than doubled in the last 4 years 
(more than 130% since March 2009)

• Returns for stocks have been positive for 9 out of the last 10 years. In the last 10 years, U.S. Large Cap stocks were up 7% per year on average, U.S. Mid Cap stocks up 10%, World stocks up 8%, and Emerging Markets stocks up 17% (or 380% in cumulative terms).
• 2012 was another great year for markets around the world with U.S. and World stocks up 13%, Japan +23%, India +26%, Greece, Germany, Philippines and Thailand all around 30%, and returns in Turkey crossing 50%!

• Furthermore, in 2012, the S&P 500 had a gain of 16.0% (total return). If you missed the 3 best percentage gain days last year, the 16.0% gain falls to a 8.4% gain. Finally, the Russell 2000 closed at an all-time high in January.
U.S. Has Too Much Debt and a Negative Fiscal Balance
Marginal Income Tax Rate from 1913 to 2012
The Dividend Tax Rate Has Converged Down to The Capital Gains Tax Rate Over Time

• In conclusion, we believe U.S. tax rates may continue to go up. Don't hesitate to contact us to discuss financial and tax planning strategies. BFM and its integrated approach to strategic asset allocation is ready to help you optimize your tax benefits. We do not sell financial products but we help our clients by offering conflict free and prudent tailored advice services.

• The actual total cost of 4-years of college education at an average public in-state university for the years 1978-82 was $9,894 (after adjusting for inflation it was $28,491). For the years 2008-12 it was $62,869. Thus, the cost of obtaining a 4-year degree has increased +127% over the last 30 years.
• 45% of first-time home buyers in 2006 purchased their home with no money down (source: National Association of Realtors). The total value of U.S. Household equity ownership in real estate dropped by more than $4 trillion falling from $10.3 trillion as of 12/31/07 to $6.1 trillion as of 12/31/11.
• An estimated 7,600 Americans turned 65 years old each day in 2011. An estimated 11,400 Americans will turn 65 years old each day until the year 2029.
•  An average American couple retiring at age 65 today would need a present value lump sum of $230,000 to cover future health insurance premiums and out-of-pocket medical expenses over the remainder of their lives.

• In 2012, the U.S. labor force participation rate was 64%, a 31-year low, the real median household income was at a 42-year low, and 15% of the U.S. population was on food stamps.

• Social Security recipients (17% of the population) have only 3 workers supporting each recipient as compared to 42 in 1935.

We would welcome the opportunity to get to know you better, introduce ourselves, share with you the work we do for our clients, and position ourselves as a useful resource for you. A consultation would be a wise first step toward achieving your vision.


Getting to know you, your needs and motivations, is as important as you evaluating our capabilities to help you meet your financial goals. We do not charge a fee for our initial consultation during which we review your portfolio, and discuss your goals and objectives.

“ Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
— John Maynard Keynes, The General Theory of Employment, Interest and Money, 1936
Follow on Twitter    Follow on LinkedIn  

Thanks to the 800+ of you who have read the Best of BFM Newsletter (click here), which summarizes the newsletters you enjoyed in 2010-2011. By now, you should have uncovered that financial decisions are not only driven by reason but they are also influenced by emotions. You also found out that your vision can literally "trick" you whenever it can (click here)!

Has BFM Helped You Yet? Click Here for Your Personal Guide to Financial Peace of Mind

We have discovered that the most valuable things we do for our clients is the selection of mutual funds, the construction of portfolios, and making sure they have enough asset as long as they live by focusing on asset allocation and diversification. If you have any ideas on how we might connect with people who could benefit our help, your advice would be a great help.

PLEASE SHARE OUR NEWSLETTER: Our newsletter readership is not limited to our clients. Please tell those you feel may be interested that they can subscribe to their own free copy of the newsletter at Thank you. 

Copyright © 2013 Bourbon Financial Management, LLC.  
All Rights Reserved.

Bourbon Financial Management, LLC
616 W. Fulton St. Suite 411
Chicago, IL 60661
(+1) 312 909 6539 -
Visit Our Website
 unsubscribe from this list | update subscription preferences 

This Newsletter is not advice.  Pursuant to the rules of professional conduct set forth in Circular 230, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. This newsletter may be an advertisement pursuant to federal law. 
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, and fitness for a particular purpose.