Happy Centerversary - The November/December Edition

 

In the hustle and bustle of the holiday season, some things get pushed aside. Sound familiar? Well, we may be a little belated on wishing Amanda Toia, Tim Wyman and Matthew Chope a Happy Centerversary, but it’s better late than never!

Client Service Manager Amanda Toia joined The Center team 3 years ago in November. With 3 years under her belt, Amanda says, “It has been a joy to come to the office each day surrounded by great people.  The Center is a wonderful place.  How lucky I have been these three years!” 

It was in December 17 years ago that now-Partner Matt Chope joined the Center.  When asked to reflect on his tenure, Matt offered his favorite quote by Yogi Berra: "In theory there in no difference between theory and practice but in practice there is.” Matt says it is humbling to work with so many financial advisors who get it and who are deeply dedicated to forging a good outcome for clients. 

Partner Tim Wyman is celebrating 14 years at The Center this month. When we pointed this out to him, he wondered where the time had gone. “Joining The Center 14 years ago was by far the best professional decision I have made and I feel very fortunate to be working alongside 19 other professionals committed to serving others.”

We’re feeling pretty fortunate for Amanda, Matt and Tim. Happy Centerversary to you all!

Holiday Financial Conversations for the Generations: Teenagers

The upcoming holiday break from school gives you the perfect opening to have conversations with your teenage children about their college plans.  Try talking to them about what they are currently interested in studying once they reach college, where they think they might apply, and also your family’s plan for college funding.  This includes what you plan to contribute, as well as your expectations about your child’s contribution. 

Here are several items that should be on your list:

How much is your child’s education likely to cost?  Go online and look up tuition rates for the schools your child might be considering. Then find one of the many online college tuition calculators to determine what your child’s costs might be.

How will you plan to pay for school?

• Discuss what you have saved (529 College Savings Plans, UTMAs, and other savings).

• Discuss opportunities for scholarships and grants.  Here are two sites to visit as early as your child’s freshman year in high school:

  • http://www.studentaid.ed.gov/  -- basic information about college costs, financial aid, etc.

  • www.fastweb.com  -- create a profile to get matched up with scholarship and grant opportunities specific to your child.

Discuss ways for your child to contribute, either now or in the future. This may include part-time work in high school, during summers, or during college.  This also includes strong academic performance and/or extra curricular activities now which can put them in a position for academic or other scholarships in the future.

The high cost of a college education makes these family conversations necessary.  By framing the discussions around the excitement of planning for your child’s future, you can make this an enjoyable and productive use of the holidays.

Talk to your financial planner about the many ways to save for your child’s college education.

In my next blog, I will talk about holiday financial discussions to have with your older adult parents.

Sandra Adams, CFP®is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Links are being provided for information purposes only.  Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.  Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

Center Honored as one of Michigan's Healthiest Employers

 

We’ve been eating our veggies and squeezing in our workouts and we have the abs … or rather the award to prove it.  The Center was recognized as one of Michigan’s Healthiest Employers for the second consecutive year.  Honorees were chosen from employers across Michigan whose policies and programs promote a healthy workforce.  The statewide program is sponsored by Priority Health, Crain’s Detroit Business and MiBiz with one simple goal: To showcase how companies are using wellness programs to make a positive impact on their employees’ lives – both at work and at home.

A focus on wellness is part of The Center culture and has been an ongoing initiative since 2007.  Planner Laurie Renchik says, “Everyone gets involved in one way or another, either taking ownership in planning activities, supporting ongoing programs or lending a helping hand and encouraging others to participate.”

Winners were chosen in two regions and five categories based on the number of employees.  The Center took honors in the Metro Detroit region in the 5 to 99 employee category.

The project was sponsored by Priority health, data was collected by Indianapolis based Healthiest Employer LLC.  Crain’s Detroit Business and MiBiz produced the promotional supplement as media sponsors of the project.  

Holiday Financial Conversations for the Generations: Children

 The hustle and bustle of everyday life does not always give us the chance to have meaningful conversations with our children about money and charitable giving.  The long holiday vacation is the perfect time to have these conversations, but does any child want to spend school break listening to lesson from their parents? 

Some ways to sneak in teachable moments around money and giving this season: 

• Keep extra change with you when you are out shopping and have your children donate to the Salvation Army red kettles.  Have a conversation about where the money goes and how it helps.
• While shopping for Christmas gifts, have your children pick out an extra toy to give to Toys for Tots or other charitable organization. Again, talk about where the toy is going.
• As part of your family holiday tradition, consider adopting a family to provide Christmas or Hanukkah gifts.  Have a conversation about helping others to have a holiday that they might not otherwise have.
• After your children have opened their gifts, ask them to go through their old toys and clothes to find those that they have outgrown.  These gently-used items can be donated to an organization for others to use and enjoy.

These are just a few ideas to help you instill the spirit of giving in your children this holiday season; to teach them that this time is as much about giving as receiving.

In my next blog, I will provide tips for talking to your teenage children about preparing for college funding.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Center Supports "A Meaningful Life with Alzheimer's Disease"

 

November 5^th marked the second annual Alzheimer’s Association and Institute of Gerontology collaborative conference.  Again this year, the conference brought together over 260 caregivers and health professionals to explore and understand a person-centered approach to caring for those living with Alzheimer’s.  The Center for Financial Planning was a sponsoring partner for the event.

Sandy Adams served on the planning committee for the 2013 conference, and moderated a panel discussion around the difficult conversations, legal and financial issues that affect those with Alzheimer’s and their families. “This conference is very unique in that it brings together families and professionals to have realistic conversations about caring for those with Alzheimer’s,” Sandy explained. “Participants received great information and enjoyed experiential presentations on alternative therapies involving art, music and exercise.”   She is looking forward to serving on the planning committee for the 2014 conference.

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Links are being provided for information purposes only.  Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.  Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

A Well-timed Time-out

 Growing up, my sport of choice through high school and college – or at least the sport I didn’t get cut from in tryouts -- was Golf.  The term sport is, I think, loosely applied to the game of golf.  Anything you can do while eating, drinking and socializing sounded like my kind of sport.  While golf isn’t the type of sport you take a time-out in, I still learned to recognize the value a time-out can offer.  A time-out gives you a chance to catch your breath, look around and assess the situation.

Recently I took a time-out from my daily duties at The Center to attend a conference in Chicago that gathered some excellent investment managers in one place to discuss current investing themes. One presentation summarized cleanly a theme our investment committee has been working on for the past several months…investing around the world (especially in Europe).  It has been compelling to us because the EU recovery lags behind the rebound the United States has enjoyed.  With headlines as seen below it appears there could be an excellent investment opportunity for certain investors.

Source: Harris Associates L.P.

When headlines are at their worst, investment opportunity is usually at its greatest. Europe emerging from their recession could have a strong positive impact on international equities in general.  So take a time-out to notice what is happening on the international front. While other investors aren’t slowing their game, take a moment to step back and assess. A time-out can be an excellent tool to uncover investment opportunities.

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

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The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility.  Investing involves risk and investors may incur a profit or loss.

Teaching kids to get fit

 Giving back to our community is a value we hold in high regard at The Center. Each member of our team is encouraged to take two days off from work each year to make a difference. Our own Angela Palacios did that at her daughter’s school where she helped spread her love of fitness.

As many of you may know, I have a strong passion for physical fitness in my life.  It isn’t always easy to stay motivated and to fit it in with the hustle and bustle of the daily schedule, but I make it a priority and always have since I was about 13 years old.  I like to think this has not only had a positive influence on my life, but also that of my family and friends when I encourage them to join me in one way or another.

I feel fitness is an important lesson that I want to pass along to by daughter who is 6.  From a very young age we have tried to make exercise a fun, daily occurrence.  It isn’t always easy to get her to exercise but it is easy to get her to go to ice skating, dancing, gymnastics, swimming and golf or even just riding her scooter when I take the dog for a walk.  As a result she is a very fit little girl with great coordination.  So when the opportunity came up to visit her school and try to help bring these habits into other kids’ lives, I felt like that was a natural fit for me.

Each year her school participates in the Presidential Physical Fitness Testing in the spring.  However, each fall they do a training session for the kids so they know where they are and what they need to focus on improving.  I think this is a great program that is unique to her school (or at least I had never heard of it before) and could not happen without parent volunteers.  

I have participated twice and both times the kids have energized me.  I have worked with kids from my daughter’s first grade class all the way up to the eighth graders.   We taught them the mechanics of stretching, endurance and strength training in a fun way.  Young children are inherently physically fit just from playing on the playground.   So parents, encourage your kids to go outside and play and most importantly just have fun, which is also a great lesson for us adults to remember.  If you love doing it you will stick with it and experience life-long benefits!

An Economic Perspective: Housing on the Mend with Little Sign of Concern

 Housing, as an industry, during the last down cycle beginning in 2007 went through the mother of all housing bear markets. We all know the problems that relaxed lending standards and cheap money caused. Many are wondering if it will happen again.

New housing permits and housing starts are moving strongly upward again (as shown below). But it took a while to work through the overhead supply that was sitting on the marketplace. In 2007, there were 4.3 million homes on the market in the US.  That number has dropped to 2.3 million homes over the last 6 years.

The US economy requires about 1.4 million new units a year for:

1. New home owners (demographics)
2. Demolitions (replacement of old homes) 

But only about 900,000 new homes are being built annually.  We are continuing to cut through that supply in the market place.  At this rate there will not be a home left to purchase in America in about 5 years.

So, I would say that we are already at what historically looks like a tight supply market (which usually impact prices). As shown on the “Home Prices” chart below, we are seeing that as prices go up all across the country.  Over the last 12 months prices have increased some 20% nationally according to the Case-Shiller index.

Furthermore take into consideration the still encouraging “affordability index” which indicates that it’s still cheaper to buy than rent (as shown above). We believe All signs indicate we have a bull market in housing underway without the same ominous signs we saw at the end of the last housing bull market.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The information contained in this report does not purport to be a complete description of the markets or developments referred to in this material, and is not a complete summary or statement of all available data necessary for making an investment decision, and does not constitute a recommendation.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Past performance may not be indicative of future results.  Be sure to contact a qualified professional regarding your particular situation before making an investment decision.

Financial planning through the generations

 Cross-generational relationship building is part of the Center for Financial Planning’s commitment to address the planning needs of multiple generations of the families we serve. “It’s so important to reach these younger generations and help them get started in the right direction,” partner Matt Chope explained in a recent interview. Matt’s interview for Raymond James’ AudioFile October segment was intended to educate financial planning professionals, but his message is important for clients as well.

Matt discussed how Center planners share the financial planning process with clients’ children and grandchildren. “I find that if I ask the right question, our clients’ want their children and grandchildren to have a better start in financial planning then they did.” According to Matt, that starts with having the kids and/or grandkids sit down with a financial planner when they are in their 20s or 30s.  “We believe financial planning has the power that can change lives and making good financial decisions is just as important in your 20s as it is later on in life.” 

Is Too Much Success a Penalty at Tax Time?

Many investors have been so successful they may face a potentially hefty tax bill for 2013.  This bull market we are experiencing in the U.S. has had such strong legs for a long period of time many investors have few, if any, capital losses to harvest to help offset the gains they have accumulated in their equity investments. In some ways this is a great problem to have. 

Tax Increases

This year there were a couple of noteworthy tax increases to keep in mind.  The maximum tax rate on capital gains has increased from 15% to 20%.  Taxpayers with taxable income north of $400,000 ($450,000 for couples) will be affected by this increase.  There is also the new Medicare investment income “surtax” affecting taxpayers with modified adjusted gross income over $200,000 ($250,000 for couples).  This tax is an additional 3.8% on investment income (interest, capital gains, dividends etc.).

Look for Bond Losses

Some taxpayers may still have tax losses from 2008-2009 to help offset gains, but for many these have run out during the successful run the markets have enjoyed for the past 4 ½ years.  One place to look for some losses this year may be in the bond portion of your portfolio (if applicable).  There may be an opportunity to swap to a similar investment for a short period of time, at least 31 days, to harvest those losses to help offset other gains you may have. 

Harvesting Losses

Make sure you are reviewing your portfolio throughout the year for tax losses to harvest.  Bond losses were at their peak during late summer and into the fall, but if you wait until December to harvest those losses, they could be much diminished from what they were.  The end of the year is rarely the best time of the year to harvest tax losses.  Personal circumstances vary widely so it is critical to work with your tax professional and financial advisor today to prepare for the risk of higher taxes in your future.

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.