New Years Goal: Financial Happiness

I noticed on various social media platforms this past holiday season a plea posted and reposted by many. It said “Santa, for Christmas this year I would like a fat bank account and a skinny waist, please don’t get the two confused like last year.” For many adults January is the month of diets. People begin new programs to cut back on calories and spending. Sadly,  once the initial enthusiasm has warn off these goals are forgotten and old patterns are repeated. Increasing your wealth and decreasing your waistline are long term projects that seldom are accomplished quickly. Therefore adopting a financial program that you can live with is the key to success.  Along the lines of diets which advocate eating smarter not less here are eight tips for Financial Happiness in 2016.

1 – Don’t be penny-wise and pound foolish. If you attempt to reign in spending by cutting back on little splurges, you are likely to feel broke while saving little Image result for 0%money. Instead of forbidding yourself  your daily creature comforts, look to broader changes that save big money. Like consolidating credit card debt on a 0% interest (offer) credit card. Depending on how much debt you are carrying this can save you hundreds of dollars every month. That change will more than cover your daily Starbucks obsession.

2 – Don’t spend good money after bad. Everyone makes mistakes. If you overspent on a home and now the maintenance and carrying costs are killing you, sell it and move. If you bought a timeshare that you never use  cut your losses and get rid of it even if it means taking a loss. If you invested in a stock which tanked and isn’t likely to rebound in the near future, get out! Move the money that is left to an investment  you believe in today, instead of waiting and hoping to get back the money that has been lost.

3 – Cancel memberships and subscriptions you don’t use. Take a good look at your credit card bills and pay pal account and be sure that any subscriptions or memberships you are being charged for, you actually use. If you don’t use them cancel them. Some places make it difficult to cancel and it may even take you a couple of months to stop getting charged.

4- Simplify/Consolidate your Bill paying. In today’s world it is very easy to have bills direct paid from your bank account or put on a credit card. Instead of spending hours paying bills utilize apps and online bill paying. Most companies have the option of storing your information so that all you need to do is login, quickly review charges and then click one or two buttons to pay the bill. One word of caution; don’t neglect to review charges just because you have simplified the payment process.

5 – Actively Manage Your Debt. If you have debt or need to liquidate assets to cover an expense how do you decide what money to use? Be sure to consider interest rates, taxes and penalties. Often people have multiple sources to find money when it is needed. The cost of that money is the opportunity cost, taxes, interest and penalties that have to be paid to use that money. For example if choosing between withdrawing from an IRA or carrying a balance on a low-interest credit card, the taxes and penalties involved in withdrawing from the IRA are a critical factor. It is important to look at these hidden costs when deciding what money to use.

6 – Live with-in your risk tolerance. Different people handle risk differently. One person may have highly fluctuating income as a self employed consultant, while another has direct deposit from a stable job they have held for 20 years, with modest reliable increases throughout. Spending whether it be for luxury items, vacations, or unanticipated expenses can cause anxiety for some while others are unaffected. It is important to know your comfort level and the comfort level of your spouse so that you can budget and save appropriately. If your income fluctuates and risk tolerance is low it is important to have a large liquid emergency fund. However if your income is stable and your appetite for risk is high keeping funds liquid is  less important.

7 – Update/Draft a Will and purchase Life Insurance. Dealing with estate planning can be stressful and upsetting. However knowing that your loved ones will be taken care of and preserving the wealth that you have accumulated can bring you peace of mind. Simple changes like re-titling assets, updating beneficiaries on employer provided insurance policies and setting guardians for minor children are just a few of the tasks that should be completed and an attorney can help you through the process. We can recommend someone to help you.

8 – Hire a Money manager/ get a free consultation. At Personal Asset Strategies, Inc. we provide potential clients with a complimentary portfolio review and analysis. Whether or not we are ultimately hired we provide free feedback to potential clients about their portfolio structure and investments and help them to organize their financial goals and plan a financial strategy.

For people who don’t have the time, interest or financial savvy to manage their own investments hire someone to do it for you. Unlike stock brokers, as fee-only planners we aren’t paid commissions. We are paid a percentage of the assets under management which means that the better your assets perform the more money we make. Client’s best interest is our best interest. It is critical with a highly fluctuating stock market to constantly review and analyze your holdings. By having a professional advisor oversee your investments you are more likely to preserve assets during a downturn and increase returns overall.

Amanda Jones, Esq. is an Attorney and Financial Advisor at Personal Asset Strategies, Inc. with offices in Westbury, NY, Short Hills, NJ and Boca Raton, FL. Please contact Amanda if you have any personal finance questions or questions about your investments.  (516)248-8811. 

 

 

 

 

 

Hand Out for the Holidays: When adult Children seek more than a nice sweater.

While my children are barely old enough to hold a job (other then summer camp counselor) I am often asked by clients how to manage requests from their adult children for money.  Some parents always say yes and their children are accustomed to the supplemental funds. Other parents would never dream of it and deny all requests uniformly. For people who fall somewhere in the middle, I recommend the follgift-money-boxxowing do’s and don’ts for giving money to adult children.

  1. DO consider your own financial needs first! While $1,000,000 and more ‘in the bank’ may seem like a lot of money it can dissipate quickly and  increased life expectancy creates a very real concern that you could outlive your money. Talking to a Financial Advisor can help you plan for your own needs. At Personal Asset Strategies, Inc. (“PAS”) we work with clients to calculate their lifestyle expenses and make projections about their future needs and plans and how to meet them, so that clients can fairly assess whether helping a child might leave them without the funds they will need in their senior years.
  2. DO consider whether the need is temporary or long term. Sometimes people are confronted with truly unforeseen expenses like a divorce,  the loss of a job or an illness. If the need is temporary and your funds are sufficient to cover your own needs, I recommend helping your adult child.  However, if dining at expensive restaurants, going on lavish vacations, and throwing expensive affairs are part of their lifestyle while asking parents to provide funds for basic expenses such as children’s school tuition or mortgage payments, THAT is not ok.
  3. DON’T feel that all children must be treated equally. Different children have different needs and abilities. It is reasonable to assist financially one child whose need is consistent with your values and deny a sibling “equal” assistance for a less worthy cause.
  4. DON’T withhold emotional or intellectual support even when you determine that financial support is not appropriate. Helping a child to make decisions about a career change or divorce can be much more valuable than financial assistance. The child may not yet have the wisdom to appreciate that,  but it goes along the lines of the old saying: “Give me a fish and I eat for one night; teach me to fish and I eat for a lifetime.”
  5. DO consider whether financially assisting is enabling the child or may cause worse problems for the child down the road. Obviously if a child has a drug or alcohol problem, there is a huge risk that assisting them is enabling their self-destructive behavior. But there are numerous other examples that are more subtle. If a child is struggling in her marriage and her spouse is pressuring her financially, giving her money can enable a bad marriage to continue and when the divorce does occur, the spouse may demand the continuation of the financial support which already has become a pattern. Another example is where a child is pursuing a dead-end career or business and never takes responsibility for his financial life. Financially assisting the child will enable him to avoid “growing-up” which will certainly hinder his happiness and success in the long run.
  6. DO consider formalizing a loan into a written document and applying periodic interest. While it may seem cold at first, this will  legal papers make it clear that the money is expected to be returned, and that it is not a gift which could result in tax implications to you. It can also protect a child from her  future ex-spouse claiming that an in-law had been supporting their family. The document can set out expectations for repayment and help to encourage responsible behavior by the adult child.

Money Vs. Terrorism

INVESTING IN THE FIGHT AGAINST TERRORISM:

4 Stocks that Help to Provide either a Sword or a Shield Against Terrorism.

By Amanda Jones, Esq.

As a Portfolio Manager I am constantly interpreting how world events will impact on holdings and potential holdings in our portfolios.  Usually in the aftermath of terrorist events the markets trend lower, facing reduced spending in multiple industries. The markets didn’t reflect that trend  following the recent Paris attacks, the high alert in Belgium, or even the downing of a Russian plane by Turkey. Some commentators posit that  we are ‘getting used to’ these types of events. We at PAS, believe that civilized, freedom loving people will not tolerate aggression from evil factions who wish to extinguish our way of life.  One way individuals can and should choose to fight terrorism is by investing in companies that are developing technology and weapons to fight terrorism.  The following public companies, are working on that goal and protecting the safety of our citizens locally and abroad, while providing investors with an attractive investment opportunity.

FLIR Systems FLIR : Flir Systems boasts that it is the world leader in Thermal Imaging Software. This Company is as ‘James Bond’ as it gets. Thermal imaflirimageging camera systems allow constant monitoring of a target even in low light or hazy conditions.  Their technology is also used to provide infrared signatures which are valuable for vehicle, design and camouflage systems. The
technology is also used for ‘laser designation’, utilizing a laser beam to mark a target for precision guided munitions. Trading currently at about $30, it is in the middle of it’s 52 week range. They also have a very low debt-to-equity ratio of .22.

ManTech International MANT : ManTech provides cyber security to government and other industries. It also is a leader in information technology for the healthcare industry. While earnings missed estimates in the most recent quarter due to the pull-out from Afghanistan, it has a strong pipeline of contract awards which themantechimgy project will lead to mid-single digit growth next year. The stock is trading at about $33 which is in the middle of it’s 52 week range. ManTech has an extremely low debt-to-equity ratio and has increased it’s net operating cash by close to 15% as compared to
the same quarter last year, which far exceeds the industry average cash flow growth rate.

NICE Systems Ltd.  NICE :NICE is a global software company that provides solutions for the prevention of financial crimes and fraud, and for security and public safety. It operates in three segments: Customer Interactions Solutions, Security Solutions and Financial Crime and Compliance Solutions. It does this by capturing various types of data from multiple sources and analyzes it in real time. It’s solutions capture interactions and transactions from multiple sources, including telephones, closed-circuit television (CCTV) video feed, emergency services radio communications, e-mail, chat and social media, among others. Financially the Company has no Debt. The stock is trading at about 62 which is below it’s 52 Week high of 68.38. The net income increased by 431.5% when compared to the same quarter one year ago.

Boeing Co. BA : BOEING, has five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support and Boeing Capital. The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services. The military segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for global strike. This stock is an excellent Core holding. With a backlog of orders they should be at full productions for mboeingimgany years to come. In addition reductions is fuel prices has enabled airlines to have increased capital for acquiring new airplanes. The stock is trading at about $148, which is about $10 below it’s 52 week high providing a buying opportunity.

These are just a small sample of terrorism fighting equities with an attractive price for investment.  At PAS, we can structure and manage your investment portfolios to reflect constantly changing conditions and take advantage of opportunities as they arise. Please contact us for a complementary portfolio review and analysis.

Amanda Jones, Esq. is an Attorney and Financial Advisor at Personal Asset Strategies, Inc. with offices in Westbury, NY, Short Hills, NJ and Boca Raton, FL. Please contact Amanda if you have any personal finance questions or questions about your investments.  (516)248-8811. 

 

 

FAMILY CFO: Taking the Reins on Your Finances After a Loss


FAMILY CFO
:
Taking the Reins on Your Finances After a Loss

It is often just after the most difficult moment in one’s life when she is suddenly forced to take over responsibility for her own or her family’s finances. Whether it is due to the death of a spouse, parent or a divorce, women and sometimes men, who have not previously been responsible for financial management may be lost and alone in a world of decision making that they feel ill-equipped to handle. The first obstacle to overcome is fear. Money management can seem very daunting and overwhelming. You may not have much experience dealing with financial decisions alone and fear that you will make mistakes. However, you can overcome that fear with information. There are three essential parts to understanding your finances:

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1- Part one is understanding your cash flow. It is the relationship between the money coming in each month from any/all sources and the money going out to pay for expenditures.
2- The second part is understanding your net worth. This is the sum of all                   your money, bank accounts, investments, property and other assets  minus your debt (mortgages, loans, notes and credit card debt).
3- The final part is investing for the future for yourself and for your heirs.

 To understand your cash flow, examine any and all sources of inflow or income. If you don’t have income you will have to use assets (savings) or debt (like a credit card or borrowing money) to pay for outflows. Income may be from a variety of different sources for different people. You should know what all of your sources are of income are. These can be different for different people. Here are three very different scenarios:

• You may work for a large company and have a high salary and benefits to              cover healthcare and certain expenses;
• Or you may be a divorced, unemployed Mother who’s income is                                completely comprised of alimony and child-support;
• You may be a retired widow who receives a portion of her husband’s                        pension and income from stock dividends and other investments.

It is important to understand how much money you have coming in each month. The above examples represent three very different situations but in each one there is income to be considered as part of the cash flow.

Perhaps even more challenging than understanding your income is understanding: “where does it all go?” All of the monthly bills that you pay including; rent or mortgage payments, credit card payments, living expenses, taxes, insurance and anything else you spend money on are part of your outflows. If your outflows exceed your inflows then you will have to make up the difference either by using savings or by borrowing money, for example by using a credit card.

Paying bills can be a complex chore. Knowing which bills must be paid and when; setting up online bill payments and phone aps; and making decisions about which payments to make immediately and which to defer, require analysis and thought with consideration of tax issues and an understanding of interest and the time-value of money. Getting it right will have a huge impact on your financial comfort, ability to pay future bills and help determine wbillsplushat resources you will have for the future.

The next phase of understanding your financial position is calculating your net worth. To do this you must add up all of your savings, checking and retirement accounts, and the value of your assets (including insurance policies) and property. Then you must subtract any debt and loans. Obligations like a car lease are similar to a loan and must be counted against your assets. You may be wondering how this information is useful. Depending on what stage of life you are in this information is needed for a variety of purposes. Here are some examples:

• Dividing assets in a divorce
• Applying for and receiving credit or a loan
• Applying for financial aid or collage scholarships for children
• Making certain that estate planning documents are created to                             properly manage distributions and tax issues after your death.
• Making appropriate decisions about investments and risk                                    tolerance.

To fully understand your financial position it is necessary to know your net worth. Once you have an understanding of where you are (net worth) and what your needs are (cash flow) it is time to plan for your future goals.

Whether you are a 25 year old scraping together your first lump sum to invest or an 85-year-old widow who hopes to help pay for a great-grandchild’s college education, everyone has plans for the money they hope to have in the future. There are a wide variety of investment strategies and choices available to consider. Choosing among these investment opportunities can be very difficult. Risk tolerance, duration of investment, tax issues and personal preferences can all play a role in making investment decisions. Countless books and entire libraries are devoted to this topic.

You must decide who will manage your investments. There are three basic options. The first is to handle your investments on your own; The second is to manage your investments with some help from professionals; and the final option is to hiring a Personal Financial Advisor, like me, to oversee your complete financial picture and actively manage your investments. Deciding which route to take should be based on your knowledge, interest and available time.

For those who want to manage unassisted by professionals there are many resources that you can use to make financial decisions and websites where you can make your own stock trades. Without professional oversight it will be important to bear in mind tax consequences and the opportunity costs of various investments. Gains can be reversed quickly if you are not actively managing your portfolio on a daily basis. For minimal fees estate planning forms can be downloaded from the internet, however without professional review by an attorney it is difficult to be certain your wishes will be executed correctly.

Choosing to work with some professional assistance may involve many different scenarios. Stock brokers, accountants and attorneys can provide you with piecemeal services, as needed. This is appropriate if you lack the time or knowledge to manage completely on your own but requires that you coordinate the advice of different professionals and bring to each of their attention critical information from other members of your financial team that may have an impact.

Another thing to keep in mind is the difference between a professional who is a “Fiduciary” and one who is not. A Fiduciary has a special obligation under the law to serve their client’s best interests above their own. Stock brokers can give you advice and help you to manage your portfolio but they are not fiduciaries. Often times brokers are paid commissions or have directives from their company to promote certain investments. These may or may not be consistent with a client’s best interest. However Certified Financial Planners and Attorneys are fiduciaries and are thereby required to serve their client’s best interest.
If you choose instead to retain a Personal Financial Advisor, you should consider the range of services and professional credentials offered by any firm that you consider. At Personal Asset Strategies, Inc. we work closely with our clients’ other professionals, such as CPAs and attorneys to ensure that our client’s best interests are determined and strategies are implemented. For example, if an attorney recommends retitling assets and other strategies that require follow through, It is not the attorney’s job to follow up and make sure that the ‘leg-work’ is done. We as financial advisors handle the administrative end of executing the financial plan. We call our approach Collaborative Wealth Management. We provide synchronized financial management, in a manner similar to having a “family office”, which was once reserved for the ultra rich. We take a personal approach getting to know our client’s families and personal priorities that impact on their financial decisions during their lifetime and in their estate plan. We are fee-only planners which  means that we are paid a percentage based on the total assets that we manage. Because our fee is tied to the success of the client’s portfolios our interest is completely aligned with our client’s. We never charge commissions or sell any products.

Taking over your family’s finances is manageable even in the worst of circumstances. It takes time and effort which can be eased by relying on the assistance of experts and professionals

www.pasfinance.com