enRICHed: volume 113

my resolution is to make a big ole bag

Jan 12, 2025

Volume 113

Hey besties!

Happy first official work week in 2025 for all my corporate baddies! My inbox was certainly exploding this week, anyone else? The only people who are probably busier than I right now are divorce lawyers. Why divorce lawyers, you may ask? Well, January (aka divorce month) is one of the biggest months that people are filing for divorce. New year, new spouse right? Well, this week on the podcast, I sat down with California Divorce attorney Jackie Combs to learn all about why couples get divorced and why talking about money is the most important aspect of any relationship. We chatted about financial transparency in relationships, why everyone should have a prenup and steps you and your partner can take to be financially prepared for your future. You can listen to us chat HERE or watch HERE! New episodes of the podcast drop every single Wednesday, so be sure to subscribe to my YouTube channel HERE or follow Networth and Chill wherever you get your podcasts!

Plus, keep up with the podcast on Instagram and TikTok!
As a reminder:

HYCU, pronounced haiku: how the news impacts you and your wallet, aka How You Can Use
The Prosperitea: think discount codes, non-boring finance articles, sales, and personal links from the week. The fun stuff 😉
We love your comments, but please remember to keep it positive! And don’t take investing advice from anyone who isn’t your registered financial advisor!

Now that you’re up to speed, let’s get you enRICHed.

California Wildfires Wreak Havoc 💔

Of course, the biggest story on everyone’s mind this week is the devastating wildfires that overtook Los Angeles this week. As of Thursday afternoon, the death toll was reported at 5 people, but officials say they expect it to be higher.
The total economic loss of this is projected as high as $50 billion, making it one of the costliest US natural disasters. Insurers are bracing for losses of as much as $20 billion, according to JP Morgan analysts, as about 179,000 people were forced to evacuate the city, many of whom lost their homes and belongings in the process.
The two largest blazes—the Palisades and Eaton fires—weren't contained at all, according to the California Department of Forestry and Fire Protection. The Hurst Fire was 10% contained and the Lidia Fire was 40% contained as of Thursday morning.
It’s also an ugly truth that 30% of the fires are currently being fought by prisoners making a maximum day rate of $5.80 to $10.24, which is legal as part of California’s “slavery clause.”
HYCU; If you have been displaced by the fires, there are plenty of free resources for shelter, Wi-Fi, transportation and rest being offered by companies like AirBnB and Uber that you can use to get set up again as you evacuate the city. Also, I recommend that you video record every room of your house with your phone so you have proof for the insurance report; make sure to open every drawer and cabinet, fridge, closet, everything—without video evidence or receipts they will likely not honor your claim. Many home insurance companies have been quietly writing out disasters like floods, hurricanes, tornadoes, landslides, and wildfires out of their coverage over the past decade as these sort of climate change-invoked disasters become all the more common. It’s even raising concern that some states will become totally uninsurable. If you want to learn more about how to help those affected by the wildfires, many local newspapers have put together resource documents for how you can donate and support.

No More Medical Debt On Credit Reports 🎉

Ding-dong, the witch is dead! Medical debt will no longer appear on credit reports, according to a final rule announced Tuesday by the Biden administration.
This decision will remove $49 billion in medical debt from the credit reports of more than 15 million Americans, according to the bureau, which means lenders will no longer be able to take that into consideration when deciding whether to issue a loan.
The change is estimated to raise the average credit score by an average of 20 points and could lead to 22,000 additional mortgages being approved every year.
This comes after last year, when Experian, Equifax and TransUnion announced that they were removing medical collections debt under $500 from US consumer credit reports.
HYCU; Somebody play “No One Mourns The Wicked”! Medical debt can be such a killer to anyone’s financial growth, as an unprecedented accident or diagnosis can suddenly land someone with a massive pile of hospital bills - at no fault of their own! The debt can make it all the more difficult to qualify for affordable loans or rent an apartment, which sucks. This ruling just means that the government agrees that medical debt is not a fair indicator of your ability to repay a loan—it’s sure to be a huge relief for many Americans! Check with your credit reporting agency to make sure it’s been removed from your score, if this new ruling applies to you. Yes, it’s likely that the incoming Trump administration will try and undo this ruling, but for now, let’s celebrate the win. If you want more tips on negotiating down your medical bills, you can watch my video about it here.

United Health Giving Answers 🧐💊

UnitedHealth Group shareholders said they asked the company to prepare a report on the costs and public health impact of its healthcare denials and delays, according to an announcement on Wednesday.
The group requesting the report is asking for an analysis of how prior authorization (medical care that needs an insurer’s approval before the patient can receive it) and denials of medical services lead patients to forgo treatment and ultimately harm their health more.
Of course, this comes in the weeks after former CEO Brian Thompson was shot and killed in New York City, causing weeks of public protest in defense of the alleged shooter as many shared their own obstacles and frustrations fighting to get health coverage for their life-or-death treatments.
HYCU; We’ve covered this a lot on enRICHed, but we all know that the health insurance system is basically one giant bully—a bully who makes the already stressful process of getting medical care even more stressful. Globally, the US ranks at the lowest of developed nations in terms of health care, and Americans spend more time living with diseases than other countries worldwide. So the system sucks, but hopefully, people pushing for transparency from these companies will lead to better healthcare for everyone. If you have medical debt that you cannot manage, and are a low-middle income earner, DollarFor is a non-profit that may be able to help you get some or all of your medical debt waived! Check them out!

Mikey asks, “Hello, I have a significant number of employer RSU’s that are due to vest in the near future. I’ll likely wait the 1 year wait period to avoid short term capital gains. That said, are there any strategies that I could employ when ready to sell which would allow me to use that money while avoiding income tax? ie. sell and move proceeds to a ROTH, REIT, real estate??? Thank you!”

Hi Mikey! When it comes to RSUs (Restricted Stock Units), once they vest, they are considered income and are subject to income tax. However, there are some strategies you can consider to potentially reduce your tax burden:

Roth IRA: Contributing to a Roth IRA won't allow you to avoid taxes on the RSUs themselves, but it can be a smart move for future tax savings. With a Roth IRA, you pay taxes on the money you contribute now, but your withdrawals in retirement are tax-free. This can be beneficial if you expect to be in a higher tax bracket in the future.
Real Estate Investments: You might consider using the proceeds from your RSUs to invest in real estate. One strategy that wealthy individuals use is the 1031 exchange, which allows you to defer capital gains taxes by reinvesting the proceeds from the sale of one property into another property. This can be done repeatedly to defer taxes indefinitely. Check out this video for more details: How rich people avoid Real Estate Taxes!
REITs (Real Estate Investment Trusts): Investing in REITs can provide you with exposure to real estate without the hassle of managing properties. While you won't avoid taxes on the initial sale of your RSUs, REITs can offer tax advantages such as pass-through income, which can be taxed at a lower rate.

Remember, it's always a good idea to consult with a financial advisor or tax professional to tailor strategies to your specific situation and ensure you're making the best decisions for your financial future.

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