Going nowhere fast!

This is the reality for most people I talk to every day. We know how much money we need to live on. A few know how much money they spend. But is this enough? As I saw on a friend's business card: life is not a dress rehearsal. There is no do over.

How do we make a course correction without feeling completely overwhelmed? We need a strategy. We need to outline the strategy, and then implement, monitor, and tweak it as needed. 

Do you have a strategy that is in place?  Do you review it regularly?  If you do then you are comfortable when the stock market feels like a roller coaster ride.  Without your own professional advisor you aren't aware of the fact that the S&P 500 was down just under 10% in the spring of 2012.  Then in the fall of that year it fell again and was down just under 8%. But it finished 2012 with a nice gain.

Is it possible that last week when the stock markets was down for several days in a row and the DOW broke below 15,000 that the market was taking a much needed breather or pullback? If we feel it is the beginning of a down market, we’re guessing. If we feel it is the beginning of a nice run up, we’re guessing. If you want to guess, head to Vegas, go to the buffets, see a terrific show, and put your money on red or black at the roulette tables.

So, what are you supposed to do?

You need to work with a professional advisor and create a financial plan. You can’t and shouldn't do it yourself. It doesn't matter if you are a baby investor just starting out with $5,000 or someone who has over a million who can't afford to lose their hard-earned money.  It doesn't matter if you aren't ready to save and just need help getting out of debt.  Don’t fool yourself that you can analyze this on your own.  I see many make this mistake until it is too late.

Put the plan into action and start the journey. It’s no different when your kid is going to college. I have seen many parents pay a pretty penny for a college admissions coach to sit down with their kids and do the same thing: discuss the easy school to go to (easy financial plan), the realistic (what you should be doing but usually don't) and the stretch (still possible but requires you to buckle down).  You don't want to risk their journey, why risk yours?

I see too many people get caught up in the noise and take no action.

Conversely, I see too many people not get interested in the important stuff—like getting the proper insurance, reviewing contracts, talking to CPA's before tax deadlines, and working with a professional advisor for financial planning matters. Take a look at your college-bound kids—they don’t do it all themselves and neither do you.

Don't go this alone. Call us today to discover a comfortable yet productive plan that we will develop just for you. Stop going nowhere fast!

At BMM, we help folks like you every day work through these problems and questions and would like to do the same for you or anyone you know. Reach out to a member of the BMM Advisor team.

Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

 

Are You Flunking Finances 101?

Last month wasn't only tax time—it was also “Financial Capability Month.”  I decided to share this link when I read that only 14% of Americans could pass the financial literacy quiz by FINRA (Financial Industry Regulatory Authority).  

We take time to clean out our garages, homes, and offices, but do we ever take the time to clean up our investment portfolios? Do we even know how to do this? I think it is worth taking a short break to test your own knowledge in this area. Test Time 

What I also found out as I researched this area was the following:

1. Not enough savings – More that half of us indicated that we are worried about a lack of savings, many worry about not having enough “rainy day” savings for an emergency or retiring without having enough money set aside. 
2. Not being able to pay financial obligations – 1 in 4 of us are worried about servicing debt commitments, including concerns around paying credit card debt, student loans, monthly car payments, and medical debt.
3. Health insurance – 1 in 4 are worried about health insurance (either not being able to afford it and/or not having any).
4. Credit – 1 in 5 are worried about their credit score and/or lack of access to credit overall, suggesting that we continue to realize the importance of credit in our lives. However, most adults have neglected to review their credit report (65 percent) or score (60 percent) in the past year.
5. Job loss – More than 42 million Americans indicated fear of job loss as a major concern—a number that is disturbingly high.
6. Foreclosure – Surprisingly, the least of our concerns (among those listed), a comparatively small 4 percent of us are worried about losing our home to foreclosure, undoubtedly a positive signal for the housing industry and the economy as a whole.

Remaining stubbornly consistent over the past three years, 40 percent of adults gave themselves a grade of C, D, or F on their knowledge of personal finance. How would you grade yourself? Should you put yourself in a financial time-out?

Based on this poor report card, it is not surprising that most agree that they could benefit from additional advice and answers to everyday financial questions from a professional.

At BMM, we help folks like you every day work through these problems and questions and would like to do the same for you or anyone you know. Feel free to reach out to a member of the BMM Advisor team.

We offer 30-minute complimentary consultation…

& promise to use common sense when talking to you if at all possible.

Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

The Taxman Cometh

Well friends, it is that time of year.  And I want to keep it light.  But I just couldn’t resist sharing the “Dirty Dozen” list of tax scams that the Internal Revenue Service recently posted.  I will share a few of these with you, but to read the full article click here.

It’s sad but true: tax fraud through the use of identity theft tops this year’s Dirty Dozen list.  In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.  It’s called “phishing”—and no, this isn’t “fishing” misspelled.  According to the IRS, it is a scam typically carried out with the help of unsolicited email or a fake website.  The IRS will not initiate contact with taxpayers by email to request personal or financial information.

Tax professionals going awry?  Say it isn’t so.  But alas, it is (according the IRS).  They advise us to choose carefully when hiring an individual or firm to prepare our return. They remind us to use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs). But mostly, keep in mind that you are legally responsible for what’s on your tax return, even if it is prepared by someone else. Make sure the preparer you hire is up to the task.

“Free money” from the IRS & tax scams involving social security also tops the list. No such thing as a free lunch, or money, that is.  Flyers and advertisements for free money from the IRS have been appearing suggesting that the taxpayer can file a tax return with little or no documentation.  These schemes promise refunds to people who have little or no income and normally don’t have a tax-filing requirement, and they’re often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Now don’t forget the misuse of Trusts.  For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses, and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

With that said, I hope tax season wasn’t too much of a burden.  But, if it is and you would like some ways to legally reduce your taxes with wealth management, feel free to reach out to a member of our team at Berson Money Management. 

We offer a complimentary 30-minute phone consultation...

and promise to use common sense when talking to you if at all possible

Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

Retirement Running Away?



I’m older, I haven’t saved enough, and I’m fearful that I won’t have enough income for my retirement needs.   If this sounds familiar, then read on and learn what you can do (and what not to do).

I have watched a lot of older people who trust their financial advisor get talked into buying an annuity. Why? They are told that it is the best thing for them because it is a tax-deferred option and will guarantee a certain income at retirement. One reason the financial advisors like to offer this product is because of the high annual commission rate the advisor will earn for the life of this investment (which can be, on average, 5%).

But why are you buying it and what are you looking for? If it is for the option to invest in a tax-deferred vehicle then think again. You can put together a well-diversified strategic growth account with an eye on the tax efficiency (i.e., it doesn’t have a big taxable capital gain distribution each year). You hold this to your retirement—over 10 years away—and you save the 5% in commission paid out to your return. And when you do begin liquidating, you can do so over time and pay the lower long-term capital gains tax rate. 

Also bear in mind that with the annuity, your family doesn’t benefit as well. The money left over at your death will go to your heirs. And they get better tax efficiency on the inherited money with an immediate step up in value. So, when they sell, the tax is not on what you paid for the investment but the growth in the investment from when they inherited it from you.

To summarize, while this may seems unorthodox, I would recommend the following:

1) Invest the absolute maximum in your 401K or other retirement plan, starting now.

2) If you are 50 or older and playing catch-up, you have a higher amount you are allowed to put away. Also try to pay off your home mortgage as quickly as possible; that way, you won't have your mortgage payment as an expense when you turn eligible to collect Social Security.

If you need help and would like a financial plan on how to get there, please contact us for a free assessment of your current situation.

We offer a complimentary 30-minute phone consultation ...
and promise to use common sense when talking to you if at all possible

Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

Happy Valentine's Day!

Every February 14th—across the United States and all around the world—candy, flowers, and gifts are exchanged between loved ones, all in the name of St. Valentine.  But who is this mysterious saint, and where did these traditions come from?  The history of Valentine's Day (and the story of its patron saint) is shrouded in mystery.  We do know that February has long been celebrated as a month of love and romance. If you want more on the story of St. Valentine click to continue reading.

Our Valentine’s gift to you is to take a short break from discussions around money and wealth and share a wonderful video from Ted.com on connection and love.  Brené Brown studies human connection—our ability to empathize, belong, and love.  In a poignant, funny talk, she shares some deep insights from her research.  Take a break with us to enjoy - Watch this video.

And now for some fun facts to keep with our theme around love and happiness, but with an emphasis on money and happiness: Studies show that money does bring you happiness as long as you have lots of it.  According to  CNBC, a survey by Spectrem Group found that happiness from money increases as your net worth increases.   

Here at BMM, we believe that money is one among many things that contributes to life happiness. And we're committed to helping you add to that happiness quotient through smart investments and a growing portfolio.   Please contact us to find out how we can be of service to you.

We offer a complimentary 30-minute phone consultation ...

and promise to use common sense when talking to you if at all possible



Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

Most New Year's Resolutions Fail!

Forbes.com published an article stating, "Most resolutions are general, vague, and unrealistic. We don’t really believe we can hit them because we’re not committed to our own locus of control."  I believe that most fail because we don’t always put the support in place to help us succeed.  So for this year, we at BMM want to help those who are looking for a team to assist them in moving forward with their health and wealth.  If you are interested, click to read more.

For those who want to follow from the sidelines, our 2013 newsletters will be an educational series covering investing and financial planning.  We hope you not only enjoy reading along with us each month but also contribute and email us your questions and comments.

If you are going to follow from the sidelines on getting financially healthy in 2013, then our first lesson will begin with learning about different expenses associated with mutual funds.  Mutual funds may offer more than one “class” of its shares to investors. Each class represents a similar interest in the mutual fund's portfolio. The principal difference between the classes is that the mutual fund will charge you different fees and expenses depending on the class you choose.

Class A Shares:  Class A shares might have a front-end sales load (a type of fee that investors pay when they purchase fund shares).

Class B Shares:  Class B shares might not have any front-end sales load, but might have a contingent deferred sales load (CDSL) (a type of fee that investors pay only when they redeem fund shares, and that typically decreases to zero if the investors hold their shares long enough) and a 12b-1 fee (an annual fee paid by the fund for distribution and/or shareholder services). Class B shares also might convert automatically to a class of shares with a lower 12b-1 fee if held by investors long enough.

Class C Shares:  Class C shares might have a 12b-1 fee and a CDSL or front-end sales load, but the CDSL or sales load would be lower than Class B’s CDSL or Class A’s front-end sales load.

One of the benefits of working with a financial advisor is that you usually get to invest in another class of shares: Class I Shares.

Class I Shares:  Class I is sold only to institutional investors and might have different fees and expenses.

If you’re interested in comparing the costs of different mutual funds or figuring out how the costs of a mutual fund add up over time, visit FINRA’s mutual fund cost calculator.  

We invite you to reach us @ info@bersonmoney.com

We offer a complimentary 30-minute phone consultation ...

and promise to use common sense when talking to you if at all possible



Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.

To thine own self be true ~ William Shakespeare

As an investor, these words are essential for a successful outcome. We see two different types of investor strategies in the stock market: those who like to see an active (changing) strategy used in their investments and those who like to see a passive (develop the model, buy and then hold) strategy. There are pros and cons to each strategy, and both can be successful. But people don’t typically spend enough time in understanding who they are as an investor and then building the right investment approach from those strategies.  

The investment approaches aren’t as simple as they sound, and can often be confusing. There is the passive (also know as Index) approach to investing, which is explained perfectly by William F. Sharpe: “Indexed investing is a strategy designed to match a market, not beat it.” And there are two different types of active investing approaches. The most common is simply known as active management (also called active investing), which refers to an investment strategy where the manager makes specific investments with the goal of beating its index. And the second is a market timing strategy, which can be either day trading (where you buy and sell an investment usually within the same day) or a longer term approach where you actively manage the investments but will move to cash if you feel the risks are getting too high. Getting confused yet? Most are.

A commonly asked question is: “When is the right time to invest?” But a far more important question to be asking is: “What’s the best strategy for me? Once you know who you are as an investor, you can put the right investment team and portfolio together and feel prepared to invest today.
What can also help you to stay the course with both approaches is a prepared financial plan. According to Money Magazine’s October 2012 edition, a recent study sponsored by the Consumer Federation of America showed that 50% of those with a prepared plan felt on track to meet their goals, vs. 32% of nonplanners.
 
With the holiday season quickly approaching, we would like to offer a gift: We will evaluate where you are today and help you build a personal financial plan for $500 (50% off our standard rate). We will answer your questions and help you define what who you are as an investor and develop a personal investment strategy that is right for you. All good things must come to an end, so sign up before it disappears - before 12/23/2012 to receive your special discount and be ready for 2013! 
With the holidays around the corner, we would like to wish you and your loved ones a Merry Holiday Season and a Very Happy & Healthy New Year.

We invite you to reach us @ info@bersonmoney.com

We offer a complimentary 30-minute phone consultation ...

and promise to use common sense when talking to you if at all possible



Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted. The contents of the blog are not to be copied, quoted, excerpted or distributed without express written permission of the firm. Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited. Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.