Everyone needs to keep certain personal financial files more or less permanently. But which files should you keep, and why do you need to keep them? How long should you keep them and in what format?
This article serves as a brief guide to organizing your personal paperwork.
In this article
- Why Keep All Those Papers?
- A Structure You Can Use
- Consider These Real-World Issues
- Roadmap for Heirs
Why Keep All Those Papers?
You need to maintain personal financial files in order to prepare for any number of contingencies. These include:
Tax Audits and Calculations: Your tax return might be audited. Tax authorities at both the federal and state levels have the right to reopen your tax return at any time if there is a suspicion of fraud. However, most audits are designed to resolve less troubling discrepancies, with various audit deadlines typically set to occur within seven years. This audit risk creates the need to keep tax and supporting documentation in general for seven years.
When politicians hide the cost of government, ‘free college’ and ‘Medicare for all’ sound like bargains.
Steve H. Hanke and Stephen J.K. Walters
Margaret Thatcher famously said the problem with socialism is that you “always run out of other people’s money.” The trouble with resisting socialism is that until the money runs out, free-spending progressive policies are remarkably seductive. Their appeal comes from what economists call lying prices: advertised prices that don’t reflect the full cost of what you’re buying.
‘Modern monetary theory’ rests on dangerous, false premises. The U.S. won’t grow its way out of the red.
By: Desmond Lachman
Do deficits matter? Between Republican tax cuts and Democratic spending proposals, U.S. lawmakers act as if the answer is no. Lately, academic economists have echoed the sentiment, advocating large, unfunded infrastructure spending programs—the main thrust of former International Monetary Fund chief economist Olivier Blanchard’s recent presidential address to the American Economic Association. “Put bluntly,” Mr. Blanchard said, “public debt may have no fiscal cost.”
This view, known as modern monetary theory, rests on false premises. One is that the U.S. government will likely be able to borrow at low rates indefinitely. Another is that so long as the U.S. nominal growth rate is greater than the rate at which its government borrows, America can always grow its way out of debt problems.
Head of Financial Advisor Services, EMEA
and Vice President
Dimensional Fund Advisors Ltd.
As much as I value the unfettered access to information the internet provides, I recognize the potential harm that too much information can cause.
Take, for example, a friend of mine, who was experiencing some troubling medical symptoms. Typing her symptoms into a search engine led to an evening of research and mounting consternation. By the end of the night, the vast quantity of unfiltered information led her to conclude that something was seriously wrong. One of the key characteristics that distinguishes an expert is their ability to filter information and make increasingly refined distinctions about the situation at hand.
For example, you might describe your troubling symptoms to a doctor simply as a pain in the chest, but a trained physician will be able to ask questions and test several hypotheses before reaching the conclusion that rather than having the cardiac arrest you suspected, you have something completely different. While many of us may have the capacity to elevate our understanding to a high level within a chosen field, reaching this point takes time, dedication, and experience. My friend, having convinced herself that something was seriously wrong, booked an appointment with a physician. The doctor asked several pertinent questions, performed some straightforward tests, and recommended the following treatment plan: reassurance and education.