, ,

One of the Biggest Investing Mistakes for Women

, ,

There is so much information out there for women about investing … news stories, case studies, research reports, white papers and books try to answer common investment questions.  But this well-intentioned information should come with a warning label: Lumping women investors together in one big category is a cliché’ to be avoided at all costs. 

Similar But Not the Same

While the similarities among women investors can be significant, cookie cutter advice is not specific enough to rely on over the long term. Over the last 20 years I have had the pleasure of working with many women with backgrounds as diverse as snowflakes. A couple of common themes I see working with women investors is a high degree of importance placed on the personal connection with an advisor, and an intuitive sense that links investment decisions to heartfelt priorities including family and charitable causes.

Differences Abound

Differences are also abundant and unique to each individual.  For example, a woman in her 50’s who is immersed in her career and has launched children is in a different place than a woman who is recently widowed or divorced.  Even women who have achieved similar career goals cannot be lumped together.  Some have built investment savvy along the way and some have not.  The real work begins with the discovery of how each woman investor is different from other women even when they share general characteristics.   

Creating Your Vision

Discovery starts with a personal vision that is linked to your unique financial life planning.   Vision implies you have a view of exactly where you want to go and you chart a course accordingly. It’s like plotting a journey on a map – straightforward with no distractions or alternate routes.  The reality is that, for many women, the vision diverges into quite a lot of directions.  It is at these points where the advisor you work with really can make a difference.

Hitting mile markers where life and money intersect including career changes, divorce, loss of a spouse or retirement are all opportunities to regroup resources, refocus on the vision, and move forward with plans for the future.  Avoiding clichés associated with being a woman investor is an important part of the process. 

Laurie Renchik, CFP®, MBA is a Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

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.

Any opinions are those of Center for Financial Planning, Inc., and not necessary those of Raymond James. #C13-002513

The Arena Where Hockey and Financial Planning Meet

 As much as I love financial planning, if you were to ask me, “What do you want to be when you grow up?” I’d have a different answer. My response would be the same now as it was if you were to ask me when I was five – a professional hockey player!  From a young age, I couldn’t get enough of the game.  It took daily amounts of extreme begging before my mom agreed to let me play and take on the financial burden of becoming a hockey parent.  Being a part of a team at a young age did wonders for me.  It taught me discipline, respect, and camaraderie. I also learned how to work as a team to achieve a collective goal and a long list of other lessons that apply not only to the game, but to how I approach life.    

In my opinion, hockey players are the best true athletes in the world.  The sport combines skill, speed, precision, intelligence, strength and endurance in a way no other sport can rival.  Despite what these athletes do on the ice, it is how they carry themselves that solidifies my love for the game.  When a player scores a goal, he doesn’t prance around and make a scene to let everyone know he just scored.  You might get the occasional fist pump, but that’s usually about it.  They’ve been there before and they act like it.  At the end of each playoff series, win or lose, no matter how much hatred there was between the two teams, players line up and shake hands, acknowledging a hard fought series and congratulating the victorious team in an act of sportsmanship that I don’t see in any other major sport.  Hockey players are not flashy, but rather down-to-earth, regular guys.  I’ve had the pleasure of meeting a few of the Red Wings at local events and if you didn’t know who they were, you would never guess they were professional athletes making millions each year. 

When the Miami Heat won their second consecutive NBA championship this year, Lebron James was interviewed to discuss his team’s success. During a span of seventy seconds, he used the word “I” eighteen times.  When the Chicago Blackhawks won the Stanley Cup this year, their captain, Jonthan Toews was also interviewed.  He used the word “we” thirteen times and did not mutter the word “I” one single time.  I think that says a lot.  A team is not about an individual, it’s about creating success for the entire group – something we are constantly striving for at The Center in an effort to provide the best service possible to our clients.  

I like to think of our team at The Center as “financial planning athletes”.  We train hard and are always looking for ways we can improve our game.   Athletes never stop practicing and neither do we.  We work hard every day to maintain the knowledge necessary to serve you, our clients.  There are a lot of egos out there, in professional sports, financial planning and everywhere in between.  I can proudly say that our team of professionals embodies the furthest thing from an ego.  We have an open door policy with one another; everyone is treated as an equal and is an integral part of our firm.  We have one heck of a team here at The Center and I am very grateful that in some ways I’m living my dream job.

Nick Defenthaler, CFP® is a Support Associate at Center for Financial Planning, Inc. Nick currently assists Center planners and clients, and is a contributor to Money Centered and Center Connections.

Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James.  C13-001965

,

Three Steps to Curing a Holiday Spending Hangover

,

 You enjoyed your holiday season to the fullest – great gifts for everyone, parties and evenings out with family and friends.  But now the credit card bills are arriving, and you are feeling the pain and misery of your holiday spending hangover.  

3 steps to help you recover and get yourself back on track:

  1. Take a Break:  From the plastic, that is.  No need to abstain from all spending, but moving to a “pay cash” system and avoiding the use of credit cards, at least until the holiday bills are paid in full, will help to get your responsible spending back on track.
  2. Replenish:  With a traditional party hangover, it is important to replenish your body with water and healthy foods.  Similarly, with a spending hangover, it is important to replenish your bank account.  Rebuild your savings to get your New Year off to a solid start.
  3. Exercise:  Set a spending plan and stick to it to get your finances off to a healthy start.  Map out your monthly spending and monitor.  Just like a healthy exercise plan, tracking is the best way to ensure success.

Enjoying the holidays and special times with family and friends is important to your overall enjoyment of life.  If you occasionally go a little bit overboard, simply follow these steps to get yourself back on track and on your way to fulfilling your longer-term financial goals.

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.

Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of Raymond James. #C13-002512

State of The Center - A Year in Review

 Before we turn the page and welcome a new year, we want to share our look back at 2013 inside The Center.  From our Client Survey, we heard that you wanted to hear how The Center is doing from time to time.  Well, thanks to our long term and loyal clients, a dedicated team, our new business development focus, and last but not least, favorable equity markets, The Center experienced an exceptional 2013.  

A Record-Setting Year

Providing world-class service to our EXISTING clients is always priority number one. We serve 785 individuals & families representing record assets under our management of $847M as of December 27, 2013 up from $733M at the start of the year.

A Year of Goodbyes

We have been fortunate to earn the loyalty of team members as well as clients.  We take tremendous pride in providing a great workplace – and the longevity of team members shows it.  That said, 2013 might just be known as the “year of the retirement”.  We said goodbye (as team member but not as friend or client) to Marilynn Levin, Betsey Schrock, and Brenda Spencer. 

And A Year of Hellos

In 2013 we made the decision to increase the depth of our financial planning staff and feel very fortunate to have attracted Nick Defenthaler and Matt Trujillo to the firm in July. We also took the opportunity to add to our client service team with the addition of Kali Hassinger.

More Milestones

  • Our Center family continued to grow as Melissa and Jeff Joy welcomed Josie to their now family of 4 and Jennie and Kelly Bauder welcomed Emma.
  • The Center held its First Annual Family Picnic emceed by Dan Boyce and his friendly bullhorn.
  • Part of our Vision 2020 includes boosting our community involvement. This year we teamed up with Gleaners Food Bank of Southeastern Michigan and the Community Housing Network. We rolled up our sleeves and volunteered at the Gleaners food distribution center and helped sponsor Gleaners’ Vine and Dine fundraiser. We held a pro bono group presentation and one-on-one meetings with the staff of Community Housing Network as part of our “Helping Those That Help Others” initiative.
  • To help educate clients, we held events on topics such as Medicare and Investments.
  • And to add to the overall ambiance at The Center, we upgraded our Client Conference room table, chairs, and TV for both comfort and use of technology in meetings. 

New Partners

As a privately held firm we value our independence, as it allows us to be stewards to our clients, colleagues, financial planning community, and the communities we touch. All Center members have both the opportunity and responsibility to help create the kind of organization we envision. Our firm partners provide additional leadership and mentoring; perform at a high level consistent with our Firm values and have a financial commitment to the firm. Current partners include: Dan Boyce, Matt Chope, Marilyn Gunther, Melissa Joy, and Tim Wyman.  As of January 2014 we proudly welcome Sandy Adams and Laurie Renchik as partners.

A13-002506

,

This New Year Take Our Resolution Challenge

,

 The beginning of a new year gives us a clean slate to get on the right track.  Then it happens … we all do it.  With the best intentions we make those dreaded New Year resolutions that very rarely get accomplished. Then we find ourselves in the same boat as we were the year before.  Have you ever noticed how busy the gym is in January and how it magically goes back to normal capacity within a few months?  I’m just as guilty as the next person with failed resolutions. However, this year I’m going to make a challenge to our fine clients at The Center.   Make a New Year resolution to sit down for just an hour in January and make a game plan for your finances in 2014.  It’s not a challenge to save “X” amount for retirement or to rollover that 401k plan to an IRA that has been with an ex-employer for a few years. These are individual goals that you can work into your plan.  My challenge is rather to open up the discussion, take a close look at your own personal financial scenario, and set some goals that you would like to achieve in 2014. 

Think of the approach in terms of the famous Fitzhugh Dodson quote: “Without goals, and plans to reach them, you are like a ship that has set sail with no destination.”  As your trusted advisors, we are here to help you identify these goals and work with you to navigate through them until they are accomplished.  We look forward to working with you in this New Year and wish our clients and their families and friends nothing but the best for 2014 and beyond!

Nick Defenthaler, CFP® is a Support Associate at Center for Financial Planning, Inc. Nick currently assists Center planners and clients, and is a contributor to Money Centered and Center Connections.

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.  C13-001740.

,

How I Set My Own Financial New Year’s Resolutions

,

 If you are like me, each year you make a list of New Year’s resolutions that don’t end up making it to spring time, much less the entire year… i.e. going to the gym, eating healthy, etc. Well, this year I plan to not only stick to my goals, but also add goals for my financial well-being to the list. Make improving your financial well-being part of your annual resolution procedure … and stick to it! In hopes of getting you going, here are mine:

I will make a budget, and use it to improve my spending habits

 This doesn’t have to be as gruesome as you think. Consider using a tool such as Mint.com that automates, aggregates, and updates for you. Track your progress monthly with their charts and see what areas you can cut back (like the Jimmy John’s sandwich that is oh so convenient to have delivered for lunch multiple times per week).  

I will spend less, and thus save more

  • Take advantage of coupons, Groupons, or any other deals out there. I’m not saying become an extreme couponer like you see on TV (unless you have the time and energy for that), but there are easy potential ways to save on your expected purchases. Try a quick Google search for sales or price comparisons before you head out to make that buy.
  • Don’t pay for pricey added features that you don’t use, just because you get a deal for bundling (i.e. cable, cell phones, internet). If you lead a busy life and don’t have the time to watch TV very often, consider a streaming option such as Netflix, Hulu, or Roku instead of paying for pricey cable.
  • If you get an end-of-year bonus, put it into savings (or at least majority of it) instead of going on a shopping spree and spending it all in one day. For your job well done, treat yourself to something satisfying yet small in expense (maybe that Biggby specialty coffee you hardly ever buy because it’s expensive), then transfer the rest to savings. 

I will plan for future retirement

Take advantage of employer matching 401(k)s. If you get a raise for the upcoming year, consider increasing your 401(k) contribution as well. Then your increased income goes directly into your retirement savings instead of into your checking account, where it will be tempting to spend.

I will create a long term vision and strive to make it my future reality

Start an emergency fund (the Center recommends 3-6 months of expenses). This may take some time, depending on if you have one started. Once your emergency fund is sufficient, consider compartmentalizing your incoming savings for your long-term visions (click here for recent post about compartmentalizing).

The little things add up before you realize it, so strive to break the constant bad spending habits (the daily Jimmy John’s or Biggby coffee); but have fun treating yourself sometimes as well. Finding enjoyment while staying within your means will help you stick to your resolutions long term and may improve your financial well-being.

Any opinions are those of Center for Financial Planning, Inc., and not necessarily of RJFS or Raymond James. C13-001741.

Curtain Call

 

The Center's Team enjoys sharing their knowledge with the press to help stories come to life, share facts and bring important topics to the forefront.  We are also honored when we are recognized by media and publications for our work and service to our profession. Here's what's new:

Investment Commentary

Timothy Wyman, CFP®, JD was quoted in InvestmentNews on December 4, 2013, in an article titled, “Advisers help clients prepare for sharp decline in pension benefits” by Darla Mercado.

, ,

How to Make Net Unrealized Appreciation Work for You

, ,

The financial planning profession is full of acronyms such as RMD, IRA, TSA and NUA.  One acronym making a comeback due to the increase in the US Equity market is “NUA”.  NUA stands for net unrealized appreciation and anyone with a 401k account containing stock might want to better understand it.  NUA comes into play when a person retires or otherwise leaves an employer sponsored 401k plan.  In many cases, 401k funds are rolled over to an IRA.  However, if you hold company stock in the 401k plan, you might be best served by rolling the company stock out separately. 

Before getting to an example, here are the gory details: The net unrealized appreciation in securities is the excess of the fair market value over the cost basis and may be excluded from the participant's income. Further, it is not subject to the 10% penalty tax even though the participant is under age 59-1/2, since, with limited exceptions; the 10% tax only applies to amounts included in income.  The cost basis is added to income and subject to the 10% penalty, if the participant is under 59.5 and the securities are not rolled over to an IRA.

Suppose Mary age 62 works for a large company that offers a 401k plan.  Over the years she has purchased $50,000 of XYZ company stock and it has appreciated over the years with a current value of $150,000.  Therefore, Mary has a basis of $50,000 and net unrealized appreciation of $100,000. 

If Mary rolls XYZ stock over to an IRA at retirement or termination, the full $150,000 will be taxed like the other funds at ordinary income tax rates when distributed.  However, if Mary rolls XYZ stock out separately the tax rules are different and potentially more favorable.  In the example above, if Mary rolls XYZ out she will pay ordinary income tax immediately on $50,000 but may obtain long term capital treatment on the $100,000 appreciation when the stock is sold; thus potentially saving several thousand dollars in income tax.

A NUA transaction is complex so care and professional guidance is encouraged.   

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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, 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.  You should discuss any tax or legal matters with the appropriate professional.

,

Holiday Financial Conversations for the Generations: Older Adult Parents

,

 The holidays provide us with rare opportunities to gather with family.  This is a time to check in with older adult parents to see how things are going and to see what might be changing.   Often, we will notice that time (and/or age) are beginning to make everyday life a little more challenging for our parents.  This is the perfect time to ask your parents about their plans for their future.

Things to discuss with your parents may include:

If having these conversations makes you feel uneasy, you are not alone.   However, giving your parents the opportunity to express their desires and helping them to put an actual plan in place to make their plans a reality is an invaluable gift.  And what better time than the holidays to give that gift?

Contact your financial planner for tips on holding these conversations or to schedule a family planning meeting.

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.

Live YOUR Plan™

Newsletter Signup