Lynn S. Evans, CFP® heads her own highly successful financial advisory firm, Northeastern Financial Consultants, Inc. (nefci.com) with a clear focus on helping successful Baby Boomer women in all life stages to develop a happy, healthy relationship with their money. Lynn co-hosts a live radio show every Saturday morning Live with Laurie and Lynn, on WILK News Radio.com (streaming live and podcasts) that deals exclusively with women's financial issues and highlighting successful women entrepreneurs.
Divorce from Bed and Board is New Jersey's answer to legal separation.
The state of New Jersey does not have a formal law which recognizes legal separation, but, there is something that accomplishes the same effect; it's called divorce from bed and board. In this type of proceeding all of the economic and custody issues are resolved – child support, alimony, insurance, debt, and equitable distribution - but the marital bond is not severed. A divorce from bed and board is authorized pursuant to N.J.S.A. 2A-34-3.
What are the advantages to this kind of arrangement?
Since the couple is still technically married, the dependent spouse can usually remain eligible for family medical benefits whereas that would have been prevented in an absolute divorce (particularly significant to a dependent spouse just short of the age when they are eligible for Medicare).
Note: It is advisable to review the summary plan description to confirm the eligibility and participation requirements to participate in the health plan and who qualifies as dependents.
Additionally, in a Divorce from Bed and Board:
It's hard to believe, but the first generation of female baby boomers is now poised on the brink of retirement. Despite lingering stereotypes, these women – and their Gen X counterparts – are savvier than ever when it comes to successful investing. In fact, at least one research study shows that women may even have a slight advantage over men.
A recent study from Barclays Wealth and Ledbury Research5 reveals that female investors are more likely to make money in the market. Why? Because a woman is less likely to make risky investments.
Today, 80% of women will at some point be solely responsible for household financial decisions. After all, baby boomers represent a third of the U.S. population, and more than half of that is female. They control far more money for investing than any other demographic. Whether recently widowed or divorced, these women have come to a point where they control substantial assets.
Whatever the families' fiscal bottom line, women do extraordinarily well in the financial driver's seat.
The research does not suggest women will omit risk in their portfolio decisions. Rather, the Barclays study showed the reason women squeeze more profit out of the markets is not because they avoid risk altogether but because they have a more measured—and educated—approach to potentially risky investments and trading frequency. Simply put, women tend not to make snap decisions, based on emotion, when it comes to their investments.
In order for individuals to gain financial control of their future, there are certain rules and guidelines that should be taken into consideration.
Your overall financial plan should include the following seven points as part of yourfinancial strategy:
1. Emergency funds should equal three months take home salary.
2. As a general rule, do not spend more than 30% of income on home mortgage or rent.
3. The "Home Mortgage 28% Rule": When applying for home mortgages, banks look for the amount of mortgage interest and principle, real estate taxes, and property & casualty insurance NOT to exceed 28% of total income.
Maggie Polisano, Principal of CAMA Self Directed IRA, is a third-generation real estate investor, a Certified Trust Specialist (CTS) and a graduate of Villanova University. With an extensive background in investing and development of residential properties in Pennsylvania, New Jersey and Florida, Maggie brings a wealth of knowledge and a track record for highly successful real estate investments to CAMA. Through her expertise in Computer Sciences, prior training as a financial systems consultant, and her systems analyst experience, Maggie assists clients in understanding tax avoidance strategies when dealing with notes, mortgages, options, and other real estate transactions, as well as helping individuals and business owners to select appropriate plans.
What exactly is a self directed IRA and who should be thinking of using one?
A self-directed IRA is an IRA in which the IRA owner directs all investments in the account. There is no legal distinction between a "self-directed IRA" and any other IRA, except with a truly self-directed IRA the account agreement allows the broadest possible spectrum of investments. Self-direction may not be for everyone. It is ideal for those looking to take control of their financial future and invest in both traditional and non-traditional assets that they understand and feel comfortable with.
What are the characteristics of the investor who can benefit the most from opening a self-directed IRA?
A self-directed IRA is truly for the investor who wants to take a more active role in the investment of their retirement funds. Having good information is critical when making investment decisions regarding your retirement plan. The investor who can benefit the most from using a self-directed account is one who is looking for alternatives to the stock market and has an interest and knowledge concerning non-traditional investments.
With kids back to school learning the fundamentals of reading, 'riting, and 'rithmetic, it's also an opportune time for parents to help them develop sound money management skills. While teaching kids about money can sometimes feel overwhelming, lessons don't require formal discussions around the table. Everyday activities such as trips to the grocery store and even playing classic board games can be used as teaching tools.
President and CEO of Citibank's Women & Co., Linda Descano, CFA®, offers the following advice on utilizing another popular tool – an allowance – to help teach children that value of money:
· Divvy it up. Set an amount that you can apportion out to teach savings strategies. For example, if your child receives $5 per month, give him or her five $1 bills. This makes it easier for children to allocate, such as toward saving, spending, and giving.
· Set savings goals. Discuss saving for a new toy or shoes. This could also be a good time talk about opportunities to donate a portion of his or her money to a cause that he or she may care about.
· Invest for their future. For many kids, college seems like a far off goal. Yet it's a goal many parents hope they achieve. Help them feel like they are contributing to the future by discussing long-term saving opportunities.
· Give them room to grow. When it comes to their spending portion, remember – it's theirs to spend, even if it is on the ugliest pair of shoes in the mall. Better for them to learn now when the risks are small.
Here's a really smart way to spend a Saturday...Take better control of your IRA and learn about investing in alternative assets
The majority of people with IRA accounts typically turn these funds over to investment advisors to invest in mostly traditional stock market investments. Given the volatile and poor way the stock markets are behaving these days and with traditional investment accounts being hammered, the more savvy investors are looking to be more directly involved in the ways their IRA funds are put to work.
Astute investors are also learning about alternmative type of investments that they can invest in within and outside their IRA accounts
CAMA Plan, an organization based in Blue Bell, PA. and providing custodian services for self-directed IRA accounts, is putting real effort into educating their clients about many of the various investment options available to self-directed IRA accounts.
In addition to hosting evening alternative investment educational seminars in their offices in Blue Bell, PA., CAMA Plan is participating in three educational seminars over the next several weeks. Two will be in New Jersey (Princeton on 11/5 and Florham Park on 11/11) and one will be in King of Prussia, PA. on 10/15. The same agnda and discussion leaders will be at all three events.
Asset allocation is well known as a foundation for responsible investing, but many investors fail to realize that once they’ve chosen their asset allocations, they must continue to rebalance periodically to risk-manage their portfolios and ensure growth, says Marina Goodman, Investment Strategist at Brinton Eaton, a wealth advisory firm in New Jersey.
Prevent Drift in Your Portfolio’s Risk/Return Profile
The most common use of rebalancing is to prevent a drift in your portfolio’s risk/return profile.
“Setting up your initial asset allocation is just the start because, over time, your portfolio will become unbalanced as some asset classes grow faster than others. ‘Safer’ investments, such as fixed income, exhibit different growth rates than ‘riskier’ assets such as stocks,” says Goodman.
As a result, the actual allocation between “safer” and “riskier” assets will change over time. This will cause a portfolio’s risk/return profile to drift substantially from your target allocation, making it become more risky or less risky than desired.
You should rebalance when your portfolio gets too far away from your target allocation. Goodman recommends rebalancing whenever your allocation is over two percent away from your target percentage.
Making the Most of Volatility
Rebalancing works in conjunction with asset allocation to decrease portfolio volatility without sacrificing return. First, asset allocation is used to select volatile assets that offset or mitigate each other’s risk and to determine optimal target weights for different classes of investments. Next, rebalancing between these assets is the mechanism by which the magic of holding these diversified assets is unleashed.
The result? A portfolio that has higher returns, with far less volatility.
Opportunities for this type of rebalancing, also known as volatility pumping, can be fleeting. Therefore, it is critical for your financial advisor to review your portfolio frequently and execute quickly when opportunities arise.
The effect created within your portfolio as a result of this kind of rebalancing can be compared to the pistons in a finely tuned engine, according to Goodman. “The further your pistons travel, the more powerful your engine,” she explains. “Similarly, the more volatile your assets, the more mileage you get from rebalancing.”
Trim Your Winners, Add to Your Losers
Rebalancing forces you to periodically trim back your winners and add to your losers to keep your allocations on target.
But is it really wise to invest more money in “losing” asset classes, and less in the “winners”? That depends on your assumptions about the future direction of these asset classes. If you believe that a decline is temporary, then investing additional money to bring the allocation back up to target allows you to benefit more when it eventually recovers.
“It’s counterintuitive, but it works,” Goodman says, “because it imposes a discipline on yourself to systematically buy low and sell high, over and over again.”
At the same time, by taking some of the winnings off the table with your better-performing assets you are not getting hurt as badly when the assets decline.
There is an important caveat to rebalancing. If you believe that the decrease is the beginning of a protracted decline in that asset class, then you may need to update your original asset allocation. And then it’s back to the drawing board…
Between helping your portfolio maintain a stable risk level and extracting the benefit from owning diversified assets, rebalancing is a key component to disciplined investing.
About Brinton Eaton
Based in Madison, NJ, Brinton Eaton is an advisory firm with a long history of serving individuals and their families across multiple generations. The firm helps its clients protect, grow, administer, and ultimately transfer their wealth through a full range of integrated services, including lifetime cash flow projections, financial/tax/estate/retirement planning, investment management, and charitable giving. Brinton Eaton's clients tend to be corporate executives, professionals, entrepreneurs, retirees, and multi-generational families. For more information, visit www.brintoneaton.com.
Hedge Fund Investing may be appropriate for you but it isn't for everyone. It may be a suitable asset allocation for accredited individual and institutional investors including endowments, pensions, trusts and family offices.
Hedge funds have been around for about 70 years and what was strictly a U.S. investment industry has now gone global with both investors and hedge funds participating from throughout the world.
For an overview of the hedge fund industry covering the history, growth and current status contact Jack Killion at
I invested personally in a hedge fund for the first time in 1998. In 2001 when I launched our Eagle Rock Diversified Fund as a vehicle for investors to invest in a diversified portfolio of hedge funds there were about 3000 hedge funds to choose from with most being U.S. based. Now it is estimated there are perhaps over 13,000 hedge funds throughout the world and available to investors globally.
Plan to attend a unique September event for current and potential hedge fund investors
We are working with industry leaders to organize a unique New Jersey conference in September for accredited individual and institutional investors (pensions, endowments, family offices, trusts) interested in learning in general about hedge fund investing and specifically about the 10 well established hedge funds that are being invited to present. For additional information contact:
Many Americans have experienced tough times in the last year or so, including the loss of a job. If you’re uncertain how the tax laws apply to those who are unemployed or seeking a new position, the New Jersey Society of Certified Public Accountants (NJSCPA) offers some timely tax season advice:
Unemployment Benefits Are Taxable …
If you received unemployment benefits, you must report that money as taxable income, including any extended benefits you may have received. Severance pay from a former employer is also taxable, as are any additional payments you might have received for unused sick or vacation pay.
… But You Get a Break in a Troubled Economy
Even though unemployment payments are taxable, the government has given a break to people who have lost their jobs in the midst of the recent financial crisis. Under the American
What’s so important about a number? We’re surrounded by irrelevant numbers every day, but your number is different. Your number is important; it’s the amount of money you’ll need to maintain your lifestyle once you’re divorced. When preparing for divorce, too many women calculate the amount of money they need to maintain their lifestyle simply by looking at their current expenses. What they overlook are the important products and services they should have now and what those items cost. To be financially independent, you should know what it will cost to educate your children and plan for your own retirement. A Financial Advisor can accurately calculate the future costs of your children’s educations and your retirement and determine the type of savings plan you’ll need to cover the costs of these goals. These costs should be included in your current budget as they will help you maintain your lifestyle in the future. In order to negotiate the best outcome in your divorce, use a Financial Advisor so you know “your numbers.”
I’m familiar with the following scenario: A newly divorced working woman suffered a severe back injury in a car accident and went on a six month disability leave. Her company paid her $4,000 each month in disability benefits, but after tax, this amount wasn’t enough to cover her expenses. After just six months she had spent $50,000 of her savings. If this woman had listened to her Financial Advisor, who had recommended additional disability insurance coverage, her hard-earned assets wouldn’t have been depleted.
Other types of insurance you must understand are your health and dental coverage. Often the cost of health and dental insurance for a working woman is shared with her employer. But if you’re not working, and are covered by your spouse’s health plan, you won’t have insurance coverage once you’re divorced. The government’s Cobra rules do allow you to be covered for no more than three years but you will need to pay the premiums. However, Cobra coverage is often costly so it’s in your best interest to have a Financial Advisor help you compare the cost of health plans. This way you will have the information to negotiate for the right type and amount of coverage in your divorce settlement.
Medical and dental insurance, life insurance, disability insurance, long term care, and property and casualty insurance should all be considered by every adult. Your Financial Advisor can help you determine what types of insurance are appropriate for you. The Advisor will be able to educate you on the products and evaluate the options and costs associated with each. You will have a lot to consider, but the effort will protect you and your family against uncertain risks in the future.
Just as important to your family is the cost of your children’s education. Have you accurately calculated how much it will cost to educate your children at the schools you would chose for them? With education costs for colleges and universities rising by 4-6% per year, which schools will you be able to afford? Work with a Financial Advisor who can analyze the total cost of education, including the effect of inflation, on college tuition. They can also calculate how much you need to save each year and how to invest your money to help you meet your education goals. Keep in mind that the cost for two young children to attend private colleges in 15 years could reach $1million. Underestimating education costs in your budget may leave you with a disappointed child.
Fee-Only Model Minimizes Conflicts of Interest
How compensation for financial planning services is handled is no small thing. Two of the three ways—fee-based and commission—involve compensation from the products that the financial advisor sells. The third is fee-only, which comes straight from the consumer’s pocket, whether it’s via an hourly rate, a percentage of assets managed, a flat fee, or a retainer. It’s what separates the National Association of Personal Financial Advisors (NAPFA) from others in the financial advising world. As these advisors like to say, they get paid only for what they know.
“It’s a wonderful way to practice,” said Ellen Turf, CEO of NAPFA. “You get paid for your knowledge and experience. You’re not sitting there with your client and doing a wonderful plan for them, and then changing your hat and selling a product. That’s not a bad thing, but it doesn’t feel good. It leads to a conflict of interest.” Fee-only services, she believes, have “the least amount of conflict of interest.”
It sounds like a simple, straightforward concept. But getting into the business is more complicated than that.
“It’s not an easy career path, especially out of college, to get started,” she said. It’s easier to go to the commission side, “because that’s where they can get a job. Then after a number of years, when they’re more seasoned, they can see their way clear to make that jump.”
Save money by shopping through a web portal providing on-line access to over 1200 retailers, many offering substantial discounts plus cash rebates on items you would normally buy any way, i.e. clothing, baby products, office supplies, gifts for the holidays, books, computers and supplies, electronics, household supplies and more.
Many of the on-line retailers are the same ones you would shop at normally, i.e. Eddie Bauer, Nordstrom, B&H Photo, Apple Store, Best Buy, Pet Co, Costco, Barnes & Noble and 100s of others. They offer on-line money savings advantages because they are trying to drive up their on-line business while reducing their dependency on operating high cost stores.
Heading into the Holiday gift -giving season is a great time to save money while learning to shift more of your shopping on line. An on-line shopping conference was held recently in New Jersey with well over 100 coming on a Saturday morning from as far as 100 miles away to share their experiences and discuss the money savings opportunities through shopping on-line.
In these challenging economic times it behooves all of us to spend our money wisely. To learn more visit www.24hourtour.net/fund2001. After viewing this 20 minute video, call Jack @ 908-507-9879 to discuss.
Given the breach of trust of many so-called investment managers, financial planners, stock brokers, financial advisors, or whatever name they are calling themselves today, it is no wonder why people are so fearful of handing over their life’s savings to anyone.
But is it just the recent overall devastation to people’s portfolios that makes them more suspicious about their advisors? Did this broadside salvo to their investment portfolio cause them to question their statements in an effort to lay the blame at someone’s feet? Or did the loss of value in the portfolios cause the schemes so easily perpetrated in an up market to unravel in a much more visible and precipitous way?
Whether it was an internal rush for answers between the advisor and the client or the external mounting pressure to keep up the games that forced the bad apples to start to smell, the knowledge of who you are dealing should be a high priority.
In August, a very friendly chap, the kind you would want to invite to your child’s graduation and your daughter’s wedding, one you would trust with your mother’s money, was not only barred from the industry but indicted by the US Attorney’s office in South Carolina. Seems he was taking money from widows and Alzheimer’s patients and having a really good time on their money. He paid for his son’s wedding and many other amenities from the money he gathered from unsuspecting clients who trusted him implicitly. He pulled off this scam for over twenty years. He was tripped up by the daughter of a woman who wondered why her mother never got any statements showing performance of the funds in the annuity. The fool offered her a bogus $10,000 certificate if she would not go to the authorities. Dumb move #1! Then he offered her a letter he told her came from his compliance department stating that he was reprimanded for his intransigence. Except he made up the letter. Dumb move #2! She called his bluff and went to the authorities who lowered the boom.
Needless to say, he got the book thrown at him.
Financial Steps From Your 20s to Your 60s
Age is more than just a number when it comes to financial planning. Starting early can help give you a leg up on a comfortable retirement. This is particularly important for women because we live longer than men, are more likely to require long-term care services, and take more time out of the work force to care for children and family members. These financial realities make it even more important for us to start saving early, to save more as we earn more, and to plan carefully for those “time-out” periods.
In a Women & Co. study, women cited saving as one of their top money moves when starting out. To get started, take the Women & Co. quiz, Are You Taking the Right Steps Toward a Comfortable Retirement? and review these savvy steps provided by Lisa Caputo, Founder, Chairman and CEO of Women & Co., and Linda Descano, CFA®, President and COO of Women & Co., for investing in your financial future, at any age:
In Your 20s
Set Financial Goals. The first step to putting together a financial plan is to identify what you want, when you want it, and what it will take to achieve it. Be sure to write down your goals so you have something to refer back to as you plan. Ø
Live On a Budget. A budget doesn’t have to be onerous and it’s a key component of a solid financial plan. Start by writing down your monthly income, track and total how much you are spending monthly, and determine your debt-repayment obligations (i.e., credit card, student loans). After calculating your monthly expenditures, subtract that from your total monthly income. Allocate the amount you have left over toward savings. If you’re falling short on savings, think creatively about ways to cut spending.
Make Saving Automatic. Once you’ve determined your target savings amount, consider setting up an automatic transfer from your primary bank account to a dedicated savings account each month. Also, do not miss an opportunity to enroll in your employer’s retirement plan, such as a 401(k) plan, and take advantage of matching contributions, if available. Whether you have access to an employer-sponsored plan or not, consider an IRA.
When our son Jonathan graduated from Georgetown four years ago we spoke with him about putting together his own “Life Team.” This is a concept all of us should consider for ourselves as well as for our kids as they start their working careers.
A few months after graduating from college my husband Jack arranged for Jonathan to interview and be interviewed by two financial advisors, two accountants, two lawyers and two insurance professionals with the idea that he would pick one of each, assuming the professionals all agreed they would be willing to take on Jonathan as a client. Jonathan went through the process and now has his Life Team in place, hopefully for years to come. All four professional advisors have skills that Jonathan will need as his life unfolds with increased complexity.
The discussion with the professionals focused on the facts that Jonathan was just starting out, his life at that point was uncomplicated. His income modest and, as a result, the time demands he would have on his “advisors” would be minimal. The short term fees they would earn from him would be low.
The upside was that as Jonathan progressed in his career and life his need for good advice in all four area covered by his Life Team would increase rapidly as would his ability to pay for professional services. In addition, as Jonathan became comfortable with his advisors, he obviously would be recommending them to his peer group, all also successful young people on the move up the ladder. In essence Jonathan becomes a farm system developing potential new clients for his advisors.
One key to successfully using this strategy for surrounding yourself with quality life-time advisors is to pick only potential advisors that you trust implicitly either because of previous experiences with them or because of strong referrals you have received to them. It is also important to pick advisors of an appropriate age. In Jonathan’s case all members of his Life Team are in their early 40s so they will grow together with over the long haul. It is also important to pick advisors who feel totally comfortable with whatever level of client you will be starting off and then over the long term. Ideally, it makes sense to introduce the advisors to each other so that they can benefit from you bringing them together as other members of the Life Team.
It is with great pride that we bring you our 3rd Annual Financial Resources Guide. The outstanding quality of the guide reflects the value that financial service institutions place on the readers of our magazine. The content, designed to get you thinking, provides resources for readers to use. The very best financial very best minds from companies like Merrill Lynch, MetLife and Amper contributed helpful and thought-provoking information on areas like insurance, real estate, and investment. You will certainly want to keep this important publication as a reference tool. If you would like a copy or have any ideas regarding future topics.