Corporate Profits Drop 1.3%

Corporate taxes increased from Q4 2013 to Q1 2014, up 6.1% to $457 billion.

May 29, 2014 at 4:05PM

Q1 2014 adjusted after-tax corporate profits fell 1.3% quarter-over-quarter to $1.88 trillion, according to a Commerce Department report (link opens as PDF) released today .

After increasing 1.9% from Q3 to Q4 2013, this latest report marks the first corporate profit decline since Q4 2012. On a seasonally adjusted basis, Q1 2014's year-over-year 5.3% increase paints a positive light on these latest numbers, but profits still clocked in significantly below Q1 2013's 6% year-over-year boost.

US Corporate Profits After Tax Chart

Diving deeper, both financial and nonfinancial corporations took a sizable corporate profit slide. Adjusting for inventory valuation (effectively removing inventory "profits" from revaluation) and capital consumption (effectively removing tax-based accounting gimmicks), financial corporate profits fell $70.6 billion, while nonfinancial corporate profit dropped $102.3 billion. 

Despite the decline in overall profit, corporate taxes actually increased from Q4 2013 to Q1 2014, up 6.1% to $457 billion. For the same period, net dividends dropped off 9.4%, nearly erasing Q4 2014's 10.5% quarter-to-quarter gain. 

This report serves as the Commerce Department's preliminary estimate for Q1 2014 corporate profits. New numbers are scheduled to be released on June 25, along with more industry-level details.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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