You can read the latest edition of my newsletter, The Wealth Chronicle, here. Articles are on The Fiscal Cliff, Year End Planning, Mailbag, and the 2012 Book Awards
If you work in the real estate industry or have real estate investments here is a great article that shows how the new 3.8% tax will impact you
I recently published the latest edition of my newsletter, The Wealth Chronicle. Articles on
- The Fiscal Cliff
- NJ Employment Law
- How emotions effects your investments
You can read the newsletter here
The following is a guest post by Andrew Bosin, a New Jersey employment lawyer. If you have any questions about employment law, he is a great person to talk to.
ARE YOU READY TO MAKE A JOB MOVE BUT ARE STILL CONTRACTUALLY OBLIGATED TO YOUR PRESENT EMPLOYER. PERHAPS NOW IS THE TIME TO SPEAK TO AN EMPLOYMENT LAWYER?
If you are presently bound by an employment agreement and speaking to a prospective new employer, you should stop and have an experienced employment attorney look at your agreement to make sure that your contact with the new company doesn’t violate any provisions in it. It is perfectly legal to go and look for another job. You just want to make sure you don’t wind up on the other end of lawsuit for doing so.
More, now than ever, employers are going to great lengths to protect their confidential proprietary information and competitive advantages in the marketplace. If your employer enjoys such an advantage because of a great product or by its market share, you can bet the farm it will not be happy to learn that you have been speaking to a competitor while at the same time obligated under your agreement with them. Employers think nothing of throwing out the “breach of contract” or “breach of duty” language at you when and if they find out what you have been doing.
Here are some of the things you want to avoid:
Violating Your Restrictive Covenant: Assume for purposes of this article that the covenant is legal and enforceable. If you take a job with a competitor you will get sued by your employer seeking to enforce the restrictive covenant. You bargained for and signed the agreement with the covenant going forward put in place to prevent you from working for a competitor.
Leaving Options or Deferred Comp on the Table: You need to make sure that your decision to leave your employer voluntarily doesn’t surrender your right to receive deferred compensation or stock options.
Likewise, if you quit, you need to know under the agreement whether you will receive the bonus you earned for working over a certain time period.
Taking Your Clients With You: There is a strong possibility that if you are leaving to go to a competitor that a court of law could prevent you from using contacts and connections you met at your present employer that it paid to get. Simply put, courts don’t like it if you obtained clients on your employer’s dime and then leave and take the clients to a competitor with you. With this said, you need to be very careful about the representations you make to a prospective new employer about the amount of business or clients you will be taking with you.
Andrew S. Bosin, LLC, Esq.
10 Wilsey Square, Suite 136
Ridgewood, NJ 07450 (201-446-9643)
A blog I recently read in Reuters highlights why I am an independent advisor. The article quotes a former JP Morgan broker who stated that the company urged its financial advisors to sell their own commissioned funds rather than less expensive products from other companies.
As an independent advisor I have no ties to any fund company. For example, Fidelity doesn’t give me a free vacation for using their funds, nor do I get any extra compensation for recommending a T.Rowe Price fund. If funds from either of those two companies are in the best interest of my client than those are the ones I will recommend. If not, I will use other ones.
I have a Pledge hanging on my office wall that I take pride in. It describes the qualities of Independence, Client Focus, Performance, and Reliability that I use in my practice every day.
Via: 401k Rollover
I recently published the latest edition of my newsletter, The Wealth Chronicle. I wrote articles on
- What steps you should take with your finances in preparation and once you have a new baby
- How setting goals sets you up for success
- Life Insurance 101 – purchasing a policy can be a complex endeavor. I tried to simply the process as much as possible.
I first got into finance and investing almost 20 years ago when I opened my first brokerage account at Ameritrade and read the book, One Up on Wall Street, by Peter Lynch. Since then I’ve read countless books on the subject, took many classes and helped individuals and families with their finances. Most of what you need to do to create wealth is contained in the principles below. The principles shouldn’t be earth shattering, they are simple to understanding, simple to execute, however hard to maintain.
1. We don’t save enough
The paradigm in the United States needs to be shifted from spending first and saving what is left over (if anything) to saving first and foremost. One of my favorite books on creating wealth is The Millionaire Next Door, by Thomas Stanley. Stanley studied millionaires and multimillionaires in the US and found that on average they saved 20% of their income. The personal savings rate in the U.S currently sits at 4.4%, which means that millionaires are saving nearly 16% more than the average person is. That extra 16% is enormous when it comes time to retire. For example, a 30 year old making $75k a year that saves 20% in their 401k earnings 6% would have $1.67 million in their plan at age 65. Contrast that with the average saver who is looking at $368k when they retire.
Marc Bautis of Bautis Financial is pleased to offer FREE workshops to the public covering critical areas of Retirement Planning. Each of these FREE workshops are designed for guests to come away with valuable tools to begin planning for the financial future.
After a lifetime of saving, building a strategy for income in retirement is a whole new challenge. The Retirement Income Planning Workshop will help you determine if you are on track for retirement with your savings and how to convert your savings to an income stream that will cover your expenses during retirement.
Learn strategies to:
- Prevent outliving your money
- Minimize your expenses during retirement
- Combat Inflation and Rising Health Care Expenses
- How to optimize your withdrawals
- Manage market volatility
- Maximize your Social Security income
- Create a stream of guaranteed income
Date: Tuesday, October 2nd, 2012
Location: Lodi Memorial Library, One Memorial Drive, Lodi, NJ 07644
Date: Thursday, November 8th , 2012
Location: Cresskill Public Library, 53 Union Ave, Cresskill NJ 07626
US News& World Report published a list of the most important risks to your retirement. In the article below I took what I think to be the top 7 risks and have added my comments to each of the risk – http://tinyurl.com/USNews
1. Boomers turn 65 unprepared for retirement. Hope springs eternal and so do our best wishes for aging baby boomers. Every year, the Employee Benefit Research Institute and other think tanks issue research documenting how poorly Americans are prepared for retirement. We haven’t saved enough money. We don’t do a good job of investing the meager retirement funds we have scraped together. We don’t know how much it will cost us to live in retirement. Then we repeat the exercise the following year, and the next, and the next. Seriously, are you prepared for retirement? Think about what this means for you and your family. Make a plan and carry it out.
Marc’s Comment: There is not much more for me to add to this risk in addition to the fact that I created a whole program around it called The Retirement Fitness Challenge™. My program helps people determine how prepared they are for retirement and puts a plan together detailing how they are going to have a successful retirement. I have a seminar scheduled for Monday, July 18, 2011 at the Wood-Ridge Library to talk about taking on the financial challenges of retirement. The article talks about repeating a process year after year, I would take it one step further and say we will soon have an epidemic with people not being prepared for retirement.
2. Americans don’t understand finances and investments. Instead of studies about how unprepared we are for retirement, maybe we should spend the research money on financial literacy education. Without signing up for a Ph.D. curriculum, there are countless strong sources of financial education online as well as at a nearby college or community center.
Marc’s Comment: Managing your own finances can be daunting. Most people do not have the time nor the education to take on things like inflation, rising health care costs, market volatility, and most importantly how to prevent outliving your money. I agree that Financial Literacy should be pushed more and the first place I would start would be our grammar schools. By teaching basics like budgeting and the benefits of investing future generations will be in much better shape financially than we are currently in.
3. Huge federal deficits threaten our way of life. Everyone is waiting for the shoe to fall on this one, but the joke may be on us. The shoe has already begun falling. The plummeting value of the dollar, which has worsened the oil-price hike, is directly linked to falling international confidence that the U.S. government will find the will or the way to seriously tackle our deficits. Our energy and economic futures are already being sapped a little bit every day. For many retirees, deficits will mean lower growth and a reduced quality of life for the rest of their lives.
Marc’s Comment: If you go back in history you would see that the stock market has averaged an annual return of 11-12%. With all of the issues in the economy mentioned above it will be hard pressed to achieve those returns going forward. Another thing that will sap our economies growth is the fact that 2011 was the first year that Baby Boomers turned 65 years old. There is going to be a daily rush to the exits and the population decline of working Americans will reduce the pace at which our economy grows. One economist I follow who is very vocal on how the changing demographics will impact our economy is HS Dent (http://hsdent.com/)
5. When should I begin taking Social Security? In the meantime, the decision about when to begin taking Social Security tops the hit parade of financial issues that confront nearly all Americans approaching retirement. For people who are not in poor health or have family histories of early deaths, the best answer is usually to wait. Taking benefits as soon as possible at age 62 locks in payments that are only 75 percent of what they would be at age 66, which is defined as the full retirement age for the current wave of retirees. Delaying benefits at age 66 will raise them by 8 percent a year until age 70, after which benefits do not increase with age.
Marc’s Comment: Even though most people begin taking benefits once they hit 62, it often makes sense to delay the start of collecting your benefits. By delaying the start of collecting your benefits you are locking in a bigger monthly paycheck from Social Security. Of course there are factors that go into whether or not it makes to delay or not.
6. Get ready for inflation. We have been seeing inflation around every corner for so many years that we’ve just about run out of corners. Core rates of inflation have been very low, and that’s still the case despite the current run-up in food and energy prices. However, if the recovery gathers any steam – and we’d all better hope it does – we can expect inflation to become more than the specter it’s been in past years. Retirees must plan for inflation. This means that the buying power of fixed incomes will erode over time. It means the real return of investments, after inflationary factors are considered, may decline.
Marc’s Comment: Some asset classes (gold, inflation protected securities, real estate, commodities, …) are better suited for inflation than others and it often makes sense to include those in your portfolio. The advance of Exchange Traded Funds makes it much easier to include these asset classes in your portfolio. What’s ironic is that anyone who buys food or gas has already felt the bite of inflation over the past year. It’s only the government who claims that inflation is not rising. They make that claim, because they measure “core inflation”, which does not include the measurement of oil and food prices because they claim they are too volatile and would not give a true sense of inflation.
7. Look carefully at retirement fund fees. It can be very hard to determine how much you actually pay the firms that manage your retirement accounts and mutual funds. Often, the firm with a higher fee does not do a better job of managing your money. Because fees are charged year in and year out, they can have a big impact on long-term investment returns. The funds’ prospectuses provide some information and federal disclosure rules are being strengthened. Morningstar has solid information as well, although some of its best tools are reserved for people with paid subscriptions.
Marc’s Comment: One thing for certain is that you are paying a fee for every investment that you own in the portfolio. The fees may be small in the instances of index funds, or very large in the cases of some annuities. These fees are tough to undercover; however they will eat away at the money in your portfolio. Some people that I have worked with were shocked to learn what they were paying in commissions and fees for their investments. Disclosure laws are slowly improving, but often you have to look through hundred’s of pages of a Prospectus to determine the true fees you are paying.