Spotlight on Just Food
Just Food, a not-for-profit organization, was established in 2009 with the goal to eradicate hunger in Douglas County. They have proven to be a necessary and welcome agency. In 2017 they provided nutrition assistance to over 19,000 individuals and we find that pretty impressive. So much so that our compliance officer, Karey Chester, serves on their Board of Directors.
The Executive Director of Just Food is Elizabeth Keever. Elizabeth is quick to state that they aren’t merely a food bank, but a team of sponsors, employees, and volunteers working together to provide access to healthy food. They provide cooking education, access to a seed library and gardens for those who wish to grow fresh food. According to Elizabeth; “we don’t just feed the line, but work to shorten it every day.”
Last year, Just Food saw a 37% increase by the Douglas County senior population who visit them for services. They are proud to work with the Lawrence Douglas County Housing Authority and provide cooking education to the senior residents who live at Babcock Place. This year Just Food also began offering cooking classes for First Step at Lakeview. Their holistic approach allows wellness opportunities for the women and their families by building on their kitchen knowledge and meal prepping ability.
Just Food also manages two gardens in Lawrence. Working in partnership with the Lawrence Public Library, a seed library is provided at the start of the growing season. This, along with continued gardening education throughout the year, teaches the underserved how to grow fresh fruits, vegetables, and herbs.
Their newest program was launched last August. KitchenWorks is a professional, industry-inspired culinary class designed to give students the skills necessary to gain employment in a restaurant or institution. The training is led by Chef Rick Martin, a champion of youth and low-income residents of Douglas County. A recent graduate of Chef Martin’s KitchenWorks program received his Serv-Safe certification and was offered a job as a sous-chef.
As you read this, Just Food is seeking sponsors for their Lunch Buddy program. This program is designed to help 4,500 kids in our community who rely on school lunches continue to receive healthy and nutritious meals throughout the summer. The Lunch Buddy program also teaches children how to grow and cook healthy food. If you are interested in helping, why not give them a call?
We are proud to support a variety of causes and organizations to help make our community a healthier place to live, grow, and learn. Working with Just Food is simply one of the ways we give back - locally and globally.
Market Commentary: A Shift in China-U.S. ‘Trade War’
Written May 21, 2018
On March 1 President Trump announced a 25% tax on steel and 10% tax on aluminum coming into the U.S. from abroad. The reaction across the globe was fast and furious and, as a result, former economic policy director Gary Cohn quit the administration. The shock and awe didn’t stop there. On March 22 Trump signed tariffs on up to $60 billion on Chinese imports. China responded with their own tariffs targeting American farmers shortly thereafter. Trump raised the stakes by releasing a list of 1,300 product categories that would be hit by his tariffs, from televisions to dishwashers, and even vaccines. China answered the next day with their own list of 25% tariffs on American products including cars and soybeans; a heavy blow to those industries in particular.
The world was convinced at that point that the U.S. and China were careening toward the first all-out trade war since the Great Depression. Almost everyone was pretty vocal about how incredibly destructive it would be. “In a trade war, no one wins” was the mantra on everyone’s Twitter feed. Everyone except President Trump, that is. He was on a mission to narrow the $325 billion trade deficit with China and stop their blatant theft of our intellectual property and, due to his devil-may-care nature, no one was sure how far he would go. Previous presidents would have backed down by that point and would have followed the proper political process. Trump’s tactics are in largely untested waters, and the stock market responded by returning to February’s lows. Things were looking quite dire.
The stock market has traded sideways ever since. I’d wager that the biggest reason lies in this very issue. Why is that? Because a trade war would almost instantly threaten the global expansion. No one wins a trade war because the tit-for-tat nature is like lobbing financial bombs at the private sector until even the industries you are trying to protect are battered. This would be enough to spark the next recession and it would be brutal. Until the tensions between China and the U.S. are lessened, investors will have their guard up. Think about it: who wants to invest in a company that might have their direct costs go up by 10% or more overnight? No one that thinks a trade war is a real threat.
But do we think this is a big enough threat to batten down the hatches? Should anything that has a possible future tariff attached to it be sold? What I expressed in my March Commentary still holds true1. I think it’s premature to make investment decisions based on the slim chance of a real trade war. With the developments from this past weekend, the odds are even slimmer.
China and the U.S. have agreed to drop their tariff threats while they work on a wider trade agreement. A trade war is now “on hold” according to U.S. Treasury Secretary Steven Mnuchin. Although the announcement was short on specifics, China said it would ‘significantly increase’ the import of goods and services from the U.S. Now comes the hard part: will there be meaningful follow-through or will this fall flat, and leave us where we were before? Critics of this trade agreement say Trump should have hit harder on intellectual property theft; that he rolled over too easily. Ironically, to begin with, they’re the same critics that disparaged him from going down this road. I suppose when you’re a critic, you have to be critical about something.
My opinion is that a halt on the tariffs and a tentative compromise was the most likely outcome from the start. This dispute between the U.S. and China isn’t over by a long shot but, as we head into the summer, these recent developments relieve some of the pressure on the market for now.**
Disclaimers and Notes
Registered Representatives offering securities and advisory services through Cetera Advisor Networks, LLC, member FINRA/SIPC Advisory services also offered through McDaniel Knutson Financial Partners. Cetera is under separate ownership from any other named entity.
The views are those of Victoria Bogner and should not be construed as investment advice. All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Economic and performance information is historical and not indicative of future results.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into accounts the effects of inflation and the fees and expenses associated with investing.
Using Your Retirement Plan Assets to Start a New Business
If you are looking for a source of funding for a business, a Rollover for Business Startup (ROBS) may be an attractive alternative. ROBS is a financing opportunity that allows you to invest in a new business or franchise; buy an existing business; or recapitalize your current business. With the Tax Cuts and Jobs Act, using a ROBS may allow you to do so without having to pay early withdrawal penalties or taxes. You could possibly combine ROBS funding with other sources, such as U.S. Small Business Administration loans. Here is how it works:
- Form a C-Corporation. Entities such as an LLC or S corporation will not work. Under the new tax law, with a 21% top tax rate, a C-Corporation may be an attractive entity for your business anyway.
- Establish a retirement plan for your new C-Corporation. You may establish a 401(k), defined benefit, or profit-sharing plan. It does not matter. They all work.
- Transfer funds from your existing IRA or other retirement accounts into the new one.
- Purchase your new C-Corporation stock with the funds in your ROBS. Retirement plan rules allow employer stock to be owned by retirement plans. With this purchase, the C-Corporation issues shares to the retirement plan.
Now you have funds in your retirement plan to get your business off the ground or invest for growth. You must qualify as an employee to have a retirement account at the company, meaning this may not be a good fit for absentee owners.
The advantages of using ROBS:
- No debt or interest payments as compared to taking a loan.
- No income taxes or penalties that might be incurred by taking a distribution from your retirement plan.
- No impact on your credit. You do not have to guarantee a loan personally.
- If your business is successful, there is an opportunity for tax-deferred growth within your retirement plan.
- There may be an increased chance of success. Guidant Financial Services
commissioned a study which showed companies funded by ROBS have a much higher success rate after four years1 – 81% vs. 39%.
The disadvantages of using ROBS:
- The Internal Revenue Service or U.S. Department of Labor is more likely to audit a business funded by ROBS.
- The retirement plan must be administered, which requires additional time and money.
- You must operate as a C-Corporation. Changing to a C-Corporation may or may not be a good move for you.
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
Jim Moore Goes to Washington
We are proud to have Jim serve on the National and Kansas Board of Directors for the National Association of Insurance and Financial Advisors, and the Lawrence Association of Insurance and Financial Advisors. Last month he traveled to Washington D.C. to participate in Congressional appointments and asked Congress to continue to support policies that encourage families and businesses to save for retirement and protect against financial risks. He also thanked those representatives who joined the Financial Security and Life Insurance Caucus and co-sponsored the Retirement Enhancement and Savings Act (RESA).
One bill of importance in the RESA package is the bipartisan Lifetime Income Disclosure Act (LIDA). This bill will provide retirement savers an illustration of the value of their savings as a personal pension plan (monthly income for life). The bill should make it easier to address the risk of an individual outliving their savings.
Economic Outlook Conference
Last month Victoria, Brad and Pete joined other business professionals for the 2018 Lawrence Area Economic Outlook Conference. While there they gained perspectives on current economic issues from a combination of state and local experts on current issues affecting business, healthcare, industry, education, and government.