THE ROADSIDE – You may be wondering why I am sitting here, stopped along a busy street, with a patrol car parked behind me, its lights flashing like the Las Vegas Strip. It’s because I didn’t want to be sitting here, stopped along a busy street, with a patrol car parked behind me with its lights flashing like the Las Vegas Strip.
Lucy, this needs some ‘splaining, and virtually every word is true. I had been reading about a new transportation system whereby a customer calls a company that sends a car around and takes you where you want to go. No, not a taxi. It’s called Goober, and you don’t simply pick up a phone and call the company. That is so 2010. You iPad or email or use semaphores from your rooftop. Two if by land. Then you follow the car on your Smartphone screen as it comes to fetch you. Before it arrives, you are sent the car’s license plate number, a picture of the vehicle, the driver’s picture, name, age and DNA. You pay by credit card, tip included.
That’s a nice system for people who go to a party, have a few drinks and don’t want to drive home. My wife says we should try Goober. Why? I’m a perfectly good driver. “Because when we go to a party, you have a few drinks and I don’t want you to drive home.” So we try it. We make our pitch via Smartphone or whatever, give addresses of here and our destination, and wait on the curbside for the car. As we are waiting, we can see on, the screen, one of many Goobers in our neighborhood heading our way. It goes down a street, down the wrong street, turns around, comes back, then a driver calls us for instructions. I notice the call is from a different area code. “My makeup is running,” says my wife, sweat streaming down her face.
Our first trip begins with, “We want to take the Greeze-ee Tag Tollroad route. It lets us slip across town quicker.” Blank looks. I repeat. The driver finally replies, “No tag. First day.” In subsequent trips we find that no Goober driver has a Greeze-ee Tag, so we take a much longer route, or we are madly digging through our pockets for quarters. Before our next trip we attempt to call Goober to specifically ask for driver and car with a tag, but the company has no phone number, apparently no employees except the drivers and no way to correspond.
Undaunted, we try Goober again. “Take a left, no, your other left. Go right.” I give block by block directions because the GPS doesn’t work. Also, it’s First Day. After a party, we signal Goober. A car immediately appears on the screen – going the wrong way. Our Smartphone rings. “Where you?” My wife’s makeup is running. Then there is the matter of money. Upon arriving home one night we check the bill: $22 going over, $5 coming back. What? The driver hasn’t left yet, so we quickly give him a $20. The next time, same thing. Twenty-two going, five coming home, only this time the driver has already left. By semaphore to the head office, we point out the pricing mistake and receive this reply: “Since you didn’t take this trip, your fare has been refunded.” No. you don’t understand. We took the trip, OK? We want to pay for it and…never mind.
As you can see, there are still a few bugs to work out with Goober. But at least it’s safe. The drivers have been carefully selected, background checked, drug busts counted, everything to make the passengers feel comfy. “Goober Driver Charged with Rape!” the newspaper shouts. It seems a driver took advantage of a drunken female passenger. A later check of his background by the city revealed a 14-year federal prison sentence for drugs, multi other crimes and charges, and not carrying enough quarters.
The City of Houston and other Texas cities have discovered that their own background checks of approved Goober drivers working on the streets have turned up enough perpetrators with crimes to fill the Walls at Huntsville. Goober hired a screening company that only checks Social Security numbers rather than fingerprints. A new city report found, for example, a driver, who had been cleared, underwent a City of Houston fingerprint background check which found that she had 24 alias names, 5 listed birth dates, 10 listed Social Security numbers, and an active warrant for her arrest. “Hi, I’m your driver, Durst. Robert Durst.” Yet there is a bill before the Texas Legislature that would create a state-wide screening test which would – get this – loosen the cities’ screening, including criminal background checks.
On the flip side, Goober drivers can rate their passengers. So if you throw up in the back seat, yell obscenities at other drivers or your own, or don’t pack enough quarters, you may stand out on the curb for an hour waiting for a Goober pickup. That reminds me. We are standing on the curb again, waiting and waiting while we see the little blip on the Smartphone showing our driver is wandering all over the neighborhood, hopelessly lost. Finally, up comes our golden carriage. It’s a pickup truck — one of those with four doors. How can we pull into the Million Dollar Ballet Gala at the ballroom of the Hyatt Regis-Philbin in a Ford Red Neck Yuppie Killer? Already late, we have no choice, so I push aside the feed bags and off we go.
This brings us to our sitting here in a pickup pulled over on a local road, while all my neighbors are slowly passing by, gawking all the way. Up walks the cop. “We had a report of a stranger cruising through the neighborhood, with this license plate number.” It was our driver, guilty of driving while Nigerian. My makeup is beginning to run.
Ashby is driven at firstname.lastname@example.org
At some point in your career your employer will ask whether you would like to make contributions to a retirement account. Initially, you think, “Sure. Where do I sign?” Yes, it can be that easy, but if you’re smart, you know there are choices.
You will see choices on the enrollment forms like “Roth IRA” or “Traditional IRA” followed by pages of words that all sound like a sales pitch. It’s at this point where you start to daydream and decide to keep your savings under your mattress. But assuming you can fight through the boredom of learning about retirement accounts, which investment vehicle really is best?
I hate saying this, but the truth is: It depends. It depends upon YOUR situation, not the type of investment vehicle. No single investment vehicle is right for everyone. There is no “one size fits all.” You’ve heard this before, but the best advice really is: Make an appointment with a qualified financial planner! Accept it. You’re not a financial expert. Few of us are and you know that your retirement is priority number one. Stop procrastinating and find a financial planner to discuss your needs, resources and goals. I did. I survived. I felt smarter afterwards too. No, it didn’t cost a fortune. In the end, it saved me money. Lots of it. But assuming you refuse, allow me to share what I learned about IRAs.
The basic differences between a Roth IRA and a Traditional IRA have to do with income limits for contributions, withdrawals and taxes (ugh). While I cannot go into detail here, I will highlight some key differences.
A Roth IRA has income limits for contributions whereas a Traditional IRA has none (no limits). The limits for maximum contribution change with tax law changes. For both 2013 and 2014, the maximum contribution for Roth IRAs and Traditional IRAs was $5,500 per year ($6,500 if you are 50 years old or older) or 100% of employment compensation, whichever amount is less. Contributions for both types of IRAs have to be made by April 15 the year after the tax year for which you are contributing. For example: all 2014 contributions must be made by April 15, 2015.
Although withdrawals in general are highly discouraged, both Roth IRAs and Traditional IRAs allow penalty-free withdrawals for certain situations. Some examples are: qualified higher education expenses, first time home purchases and certain major medical expenses. These certain situations may allow you to make a withdrawal before you are 59 ½ years old. Otherwise, those withdrawals are subject to a 10% penalty.
A Roth IRA has tax-free (growth on) earnings and tax-free withdrawals as long as the necessary requirements have been met. A Traditional IRA has tax-deferred (growth on) earnings and taxes are paid upon withdrawal. Do you think your personal tax rate will be higher or lower when you retire compared to where it is today? If higher, then you may consider the Roth IRA because your taxes on withdrawals would be at a higher rate – and all gains over time are tax-free. If lower, then you may consider the Traditional IRA because your taxes on withdrawals would be at a lower tax rate. Or you can open both types of accounts and hedge your bets!
Withdrawals, contributions, and taxes are just some of the differences between the types of IRAs. We haven’t even discussed 401(k)’s. So again, it is ALWAYS best to meet with a qualified financial plannerto ensure you are making the correct decisions for YOUR goals and YOUR income level. Most CPAs can make a recommendation for a qualified financial planner. Make the call.
On June 20, 2014, the Texas Supreme Court issued a ruling in the Ritchie v. Rupe case. In this case, the minority shareholder claimed shareholder oppression and breach of fiduciary duty. The trial court determined there was shareholder oppression and breach of fiduciary duty and ordered the corporation to buy-out Rupe’s shares for $7.3 million. The appellate court upheld the trial court’s decision regarding the finding of shareholder oppression, did not address the breach of fiduciary duty and sent the case back to the trial court to find a value of shares’ fair value including discounts for minority control and marketability.
The fact that the Supreme Court rejected the Fair Value of the shares and ordered the trial court to calculate the Fair Market Value of the shares presents a problem to minority shareholders. If the standard of value for shareholder oppression cases is now Fair Market Value, the value of a minority shareholder’s shares could be substantially impacted by discounts for Lack of Marketability and Lack of Control. The Texas Supreme Court did not agree with the trial court or the appellate court in its ruling. The Supreme Court ruled that minority shareholder oppression is not a common-law cause of action in Texas. Because the appellate court did not address the breach of fiduciary duty, the Supreme Court also did not address the breach. The case was remanded to the appellate court to address the breach of fiduciary duty.
What can minority shareholders do to protect themselves? Before investing in a company, make sure that you have a shareholders’ agreement in place and that you understand what is contained in that agreement. What are you agreeing to and what protections do you have? Read all of the corporate documents of the company and understand what is contained in them and how it impacts you (i.e., Bylaws, Operating Agreements, etc.). To read the full ruling and opinion, please see Texas Supreme Court Case: No. 11-0447, Ritchie v. Rupe 2014 Tex. LEXIS 500