You insure your health. You insure your car. You even insure your diamond wedding ring. So what about your life? September is life insurance awareness month and it’s the time of year where families are encouraged to review their life insurance coverage and make sure it is the right fit for their current circumstances. To help with the process, below are some frequently asked questions about life insurance that should prove helpful.

What is Life Insurance?
Life insurance is not just a piece of paper that you pay a premium for. It is truly a gift that you give your loved ones to make sure that they will be okay. No one wants to be a burden on their family. With the purchase of life insurance, you are ensuring that the people you care about will live fruitful financial lives well after you have gone.

Who needs it?
The answer to this one is pretty simple. If you have anyone who depends on you for financial support, you need life insurance. This can be a spouse, partner, child, grandchild, parent, sibling, or even a business partner. Don’t forget, even stay-at-home moms and dads need life insurance.

How much do I need?
When purchasing life insurance, figuring out how much you need is a very individualized process. Some say you should have a multiple of salary, while others focus more on a flat amount, like $500,000 or $1 million. I often ask these people why they chose these amounts and they usually say that it sounded like a nice round number. The true answer lies in what you want to have happen. Let’s use a fictitious couple, Brenda and Nate, to illustrate how to come up with the right amount.

1. Outstanding Debts. Many times people want to pay off all of their loans, so that their family won’t have to worry about the financial burden. The big one here is the mortgage. Brenda and Nate own a home with a $350,000 mortgage that they would like paid off if something were to happen to either of them.
2. College and Retirement Savings Goals. Many families strive to put money away for the future. If either parent died, college savings and retirement accounts would probably be pushed aside for more pressing expenses. What if we could create an instant pot of money for the kids to use for school and to stimulate our retirement accounts? Brenda and Nate are saving diligently for their children’s college expenses. If either dies, they would like $100,000 put aside for each of their two kids for college. They also figure that a lump sum of $300,000 should be enough to stimulate their retirement savings.
3. Child Care. Depending on your situation, you may need to think about child care costs. Brenda is a stay-at-home mom. She takes care of the kids and if something were to happen to her, Nate would need to hire a nanny. Also, if Nate were to die, Brenda would probably need to go back to work and hire a nanny as well. They both decide to incorporate $250,000 ($50,000 for 5 years) in their life insurance amount.
4. Maintaining Your Lifestyle. This is where many get tripped up. Think about it. If you were to be given a tax free check each year to maintain the lifestyle that you are accustomed to, how much would you need, and for how long would you need it? Keep in mind, all of your debts are paid down and your savings goals are funded. Brenda and Nate figure that they would both need about $50,000 per year for 5 years in tax free income, totaling $250,000.
5. Final Expenses and Emergency Fund. When a loved one passes away, it’s hard enough dealing with the emotional loss. Many don’t want to have to worry about paying miscellaneous bills and funeral costs during this time of mourning. Brenda and Nate agree that an extra $50,000 should be added for final expenses and money to pay the bills.

In our hypothetical example, both Brenda and Nate will need $1.3 million of life insurance coverage. At this point, many people see this number and their eyes widen with shock. Here is where there is a tendency to say to ourselves, “well, do we really need to pay for college for our kids?” Or “We can do without paying off the mortgage.” When purchasing life insurance, the conversation should be around what you both want to have happen. And interestingly enough, it is not as expensive as you may think if funded with the right type of coverage.

What type should I buy?
There are many different types of life insurance. In a general sense, there are group and individual plans. Group coverage is usually found at work, where your company provides a certain amount that they either give to you or that can be purchased. Watch out, you may be overpaying for this type of coverage if you are healthy and a non-smoker. With group plans, everyone in the group usually pays the same rate. If you can extract yourself from this pool and get individually underwritten, you may be able to lower your costs.

Individual policies usually come in two flavors, Term and Permanent coverage. Term insurance is like renting your coverage from the insurance company for a specific period of time. If you miss a premium payment, you are usually dropped. Because of the “no frills” nature of term, the costs are very low. These types of plans are good for people who want to insure themselves for only a specific period of time. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges.

With a permanent plan, it is like you own your policy. These plans usually last for a long period of time or your whole life and build equity that you can withdraw or borrow tax favorably. Premiums are flexible and can be missed in certain circumstances without losing your coverage. Costs are usually a bit higher than term plans, but if there is a long term need, permanent plans will hold a greater value to the policy owner.

In our example, Brenda and Nate would probably purchase the majority of their coverage using term insurance, since they have a greater need when the children are young. They also would like permanent insurance for the longer term needs. This would give them the best of both worlds, a low cost insurance strategy that also builds cash value, with some coverage lasting the rest of their lives.

Who should I buy from?
It is critical that you choose a quality company from whom to purchase your coverage. Life insurance is simply a promise and you want to make sure that if you pay your premiums, the company will make good on their end of the deal. Take a look at a company’s ratings and see how they align with their peers.

You also want choose a knowledgeable advisor to help you navigate through the underwriting process. It can get quite confusing and having someone to guide you along the way helps make everything a lot easier, especially when you’re dealing with a topic that many don’t like to talk about.

For more information, please contact Jason Silverberg directly at Jason@finadvinc.com or 301-610-0071. Jason is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC.

1175-2009-84573, D.O.F.U. 7-2009

It’s back to school time! The time of year where parents scramble around gathering up school supplies, adorning their children with new outfits, and accessorizing their ensembles with mp3 players, cell phones, and other electronic gadgets. With all of this spending, let’s think a bit about saving to balance everything out, specifically for college. Here are 4 ways in which you can start saving for college.

1.      Custodial Bank Account

These accounts also go by Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) accounts. They can be traditional savings accounts held at the bank or can be mutual funds or similar investments held with a broker, but in either case the parent or guardian is the custodian on behalf of the minor child with the account registered under the child’s social security number. The two main reasons people choose this option is convenience and taxation. It is convenient because the banks traditionally have low minimums for these accounts and make them very easy to establish. Additionally, they are helpful for the parent because it makes it easy to segregate each child’s funds. From a tax perspective it is assumed that the child is in a lower bracket and therefore keeping it under the child’s social security number has tax benefits.

While these accounts are the most common, the reality is they are not always the best option for college savings. When the child turns 18, the money becomes theirs to do with it whatever they choose and the parent loses control. While there is some tax favorability by having the account in the child’s name, it is still a fully taxable account. Additionally, the “kiddie tax” limits the amount a child can earn as passive income under their tax bracket prior to age 16 and thus the income often ends up reverting back to the parent’s tax return anyway. Finally, these accounts are deemed to hold the child’s money and thus having a significantly greater impact on any potential financial aid. UGMAs/UTMAs are not typically recommended for college savings, but are ideal for small savings accounts to teach your child about money.

2.      Coverdell Accounts

Also called Educational Savings Accounts (ESAs) or Educational IRAs. These accounts are made for educational savings and are packaged with some interesting features. One of these features is that the money can grow tax deferred, eliminating the need to pay taxes each year. Also, if the money is withdrawn for private school or college expenses, it can be accessed tax free, paying no taxes on any growth. Additionally, the money is held in the parents name for the benefit of the child, so the parent can control how the money is spent and the child has a better chance at financial aid qualification. One additional advantage of the ESA is that funds may also be available private schooling prior to college as well for college. Keep in mind, there is a maximum contribution limit of $2,000 per year, as well as restrictions based on the income level of the donor, so it may be hard to accumulate lots of funds for college in this vehicle (that’s where the benefit of the next plan comes in).

3.      529 Plans

A 529 plan is a tax-advantaged investment program designed to help pay for qualified higher education costs. Being one of the most popular ways to save for college, the 529 plan comes in two flavors: prepaid tuition plans (only offered in select states) and savings plans. With prepaid plans, you can purchase tuition at today’s rates instead of the inflated rates when your child is ready to go to school. There are some dangers in doing this. For one, the money is considered to be the child’s resource and does reduce the chances of financial aid. Furthermore, if the child doesn’t go to college, you may or may not be able to transfer your credits to another child, depending on your resident state.

With a savings plan, the investment risk and contribution commitments shift to you. Participation in a 529 plan does not guarantee that the contributions and investment returns will be adequate to cover higher education expenses. If you need flexibility in what is contributed or if you feel that by investing your money in mutual funds you may be able to get a higher rate of return to beat out tuition inflation, this may be the account for you. These accounts are similar to ESAs, but must be used for college expenses only to be able to withdraw the money tax free. If withdrawn for other expenses, you’ll be taxed and penalized on any growth. Also, these accounts are transferable, allowing you to transfer the account to other children (must be a relative), if one gets a scholarship or decides not to go to school altogether.

One other important difference with the ESA is that the max contribution to the 529 plan is much higher. Since contributions to a 529 plan are considered gifts, the limit maxes out at $13,000 per year (2009 limits) or a lump sum of $65,000 (representing contributions for the first 5 years).

529 plans are generally state-sponsored, enabling state tax deductions on eligible contributions for partnering with a fund company represented by the state in which you reside. Your state of residence may offer state tax advantages to residents who participate in the in-state plan. You may miss out on certain state tax advantages should you choose another state’s 529 plan. Consult with a financial advisor to learn more about how state-based benefits or limitations would apply to your specific circumstances.

4.      Life Insurance

So, the 529 plan sounds good, but what if you have an only child who may or may not go to college, or if you think they may receive a scholarship? How can you save for college effectively with these concerns? Cash value life insurance may be your answer. Remember that the primary reason for purchasing life insurance is the death benefit. However, the growth of cash value is tax deferred and money can be withdrawn tax favorably, with one major exception. There is no need to prove that you are using the money for qualified educational expenses to be eligible for tax favorable withdrawals. Outstanding loans and withdrawals will reduce both cash value and death benefit.

Using cash value life insurance may not be for everyone. If you do not otherwise need or want life insurance, there are insurance expenses and possible restrictions, such as surrender charges, that can get in the way of accumulation. At the same time, if life insurance is needed, costs can be minimized by combining the two objectives into one savings vehicle.

No matter the vehicle, it is vitally important that you start early. A $100 per month contribution in a tax deferred vehicle will yield about $54,000 in 18 years at a 9% rate of return. If you waited just 2 years and invested for 16 years, you’d have only about $43,000. That’s a difference of $11,000 or about 20% of the portfolio. This is a hypothetical example for illustrative purposes only and is no guarantee of performance.

At the same time, don’t get too carried away. Many parents tend to put their children first and save for college before, or as an alternative to, their own retirement savings. This is a big financial “no-no.” You can always take out loans for college, but you can’t take out loans for retirement. Consult your financial advisor for more information on how to customize a college savings strategy that fits your budget, without compromising your other financial goals. Finally, please keep in mind that you should check with your individual tax advisor on the tax benefits or impact to your specific situation. 

For more information, please contact Jason Silverberg directly at Jason@finadvinc.com or 301-610-0071. Jason is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC.

1175-2009-78594, D.O.F.U. 7-2009

Many of us have a good understanding of the typical asset classes that we can invest in: there’s large, mid, and small company stock, international companies, domestic bonds, and even international bonds, just to name a few. But over the past couple of years some new ways to diversify your portfolio have been launched onto the investment scene. These investment styles, if suitable for your specific situation, may provide options to help personalize your portfolio to your beliefs and values.

Socially Responsible Investing

What is it? Well, being a socially conscious investor means that you are investing in companies based on their environmental, social, or political standing in society. For hypothetical example for illustrative purposes, a socially conscious investor may not want to invest in a company if it pollutes the environment as a result of manufacturing its product. In other words, this style can be viewed as punishing those that don’t meet the criteria as opposed to rewarding those who do.

When looking at why people are attracted to this type of investing, it provides people an opportunity to invest in companies that may follow investors’ values. It also makes the investor feel good that they are doing their part to help society. Investors, if given the choice, probably wouldn’t want their money being put to use for business practices that differ from the investor’s values. At the same time anytime you restrict investment options an investor must be willing to live with the fact that they may underperform similar investing strategies that do not exclude certain investments.

Green Investing

Many people confuse Socially Responsible investing and Green investing. In contrast to Socially Responsible investing, Green investing does not “exclude” companies for what they don’t do but rather invest in companies for what they do (in this case produce alternative or renewable energy and green technology). A general classification for this style of investing is called sector investing, which invests solely in one area or industry.

There may be advantages to investing a portion of your portfolio in Green Funds both for socially responsible reasons as well as investment reasons. For a hypothetical example for illustrative purposes only, we all can agree that an alternative way to power our cars and our homes is desperately needed. Whether it’s solar, wind, or even water power, alternative fuel sources are needed in the future. Additionally, one of President Obama’s major initiatives is to improve our alternative energy options, so from an investment prospective we know there will be a lot of government dollars going into this industry in the future. The main disadvantage is that much of this technology is experimental and research makes up a lot of the process. Investing in these companies presents far greater risks. Investments that focus in one sector, may involve a greater degree of risk and volatility than an investment with greater diversification. As an investor you must therefore be careful and with any sector fund, one must never put all their eggs into one basket.

Vice Investing

Are you a sinner? Do like to gamble, drink, or smoke? Even if you don’t, investing with this style may still be for you. Investing in companies that deal in vices is a way to invest in casinos, alcohol and tobacco manufacturers, and weapons and defense contractors. Similar to Green investing, Vice investing is a sector style investment strategy, but specifically chooses companies that fit the sector of sin.

The obvious drawback to using this kind of investment strategy is the moral and social implications of buying ownership shares in companies that are typically not thought very highly of in society. But, some people really like these investments because it adds a little personality to an otherwise boring mix of companies. Again, be careful not to overload on these kinds of investments. As mentioned above investments that focus in one sector may involve a greater degree of risk and volatility than an investment with greater diversification.

Whether you’re a sinner or a saint, an oil guzzler or a conservationist, there are many ways to combine traditional investing with personal views and attitudes. Talk to your financial advisor about investments that may hit home for you. At the same time, don’t get carried away. Your investments should fit into a carefully crafted investment strategy based on your risk tolerance and time horizon.

Remember that investments will fluctuate and when redeemed may be worth more or less than when originally invested.

For more information, please contact Jason Silverberg directly at Jason@finadvinc.com. Jason is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC.

Back in 1970, about 40% of households were deemed to contain “nuclear families,” with a father, mother, and children, all under the same roof (Marriages, Families & Intimate Relationships~2005). Since then, our country has made a dramatic shift. Divorce rates are on the rise, people are waiting longer to get married and have children, if at all, and we are now at the tipping point for having same sex marriages legalized in numerous states. The traditional way of creating a family, now accounts for only about 24% of U.S. households. What does this mean for your personal financial situation? Well, it means that the traditional ways of financial preparation will no longer work for the majority of households.  Below are a few of the categories that you may fall into with helpful tips depending on your specific situation.

Divorcees

For a family that has been broken apart by a divorce, make sure that you and your ex-spouse still communicate about money if kids are in the picture. Just because you divorce each other should not mean you are divorcing your kids too. Figure out how you both will share expenses. Still plan for college expenses together, don’t ignore it. Also, make sure that you still retain appropriate amounts of life insurance. The death benefit provides financial security for your children regardless of your marital situation. You should consult with your attorney for information regarding how your life insurance is viewed as an asset.

The Late Bloomer

In our society, people really start to take a look at their financial situation and identify goals when then get married. It’s a turning point in one’s life, when we typically transform from a young adult to a responsible adult. Since people are waiting longer and longer to get married, they are delaying their financial preparation.

When it comes to saving for retirement, one of the biggest concepts that you want to take advantage of is compound interest. In order to maximize your opportunities, it’s beneficial to start saving early. Let’s take a hypothetical example for illustrative purposes, if you began saving for retirement at age 25 at $200 per month and a 7% rate of return, you would have over $1,000 more per month in retirement income than you would if you began saving 5 years later at age 30. And that’s just saving $200 per month (including 401(k)s as well as IRAs).

Also, many people wait to begin looking at life insurance and disability insurance until they get married. Interestingly enough, costs rise as you get older. Buy a permanent life insurance plan while you’re young and healthy. This way, by the time you get married, you will have locked in your premiums at lower rates and maybe built up some cash value in the policy too. You should keep in mind that there are fees and expenses associated with insurance products. For life insurance there are charges such as mortality and expense and there may be restrictions such as a surrender period. 

DINKs

The term DINK has been popularized lately. Families with Double Incomes with No Kids have a different set of financial issues as well. For couples who decide they don’t want to have kids, planning for retirement and the disposition of assets can get quite creative. Since the presumption is that you will not pass your wealth to your next generation, many times assets are given to nieces and nephews. This is also a great opportunity to select your favorite charity to help fund.

Be careful not to overlook planning for each other either. Just because you don’t have any kids doesn’t mean life or disability insurances should be taken for granted. If a combined household income can afford a certain lifestyle, if something happens to one of you and your income earning potential is lost, that same lifestyle may not be achieved.

Same Sex Couples

It’s a common fact that our country compensates men more than women for the exact same job. The Bureau of Labor Statistics says that women tend to make $.77 for every $1.00 made by a man. Because of this, there are some interesting things to consider when looking at same sex couples. Lesbian couples must stash away more of a percentage of their salary than do Gay couples. Also, depending on the state, same sex couples may not be afforded the same rights as are heterosexual married couples. The law considers you strangers and because of that, gifting laws come into play. In 2009, you may gift up to $13,000 of assets per year. Furthermore, make sure your wills are properly updated to reflect your wishes. These same rules apply to unmarried couples too, so watch plan in advance.

If you and your family fall into one of the above categories, you are now in the country’s majority and traditional financial advice cannot be digested the same. Make sure you sit down with a professional who can learn more about who you are and how to help you achieve your financial dreams.

“The times, they are a-changing” ~ Bob Dylan

For more information, please contact Jason Silverberg directly at Jason@finadvinc.com.

Jason is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC.

As we step closer toward the summer, many graduates will begin their journey from academia, into the “real world.” Some will become boomerang kids, coming back home to facilitate the transition, while others will be out on their own even before their tassels are turned. Whichever group you identify with, here are few bits of financial wisdom as you begin to create the habits that will shape your financial lives forever.

1. Create a Financial Snapshot

Before you can effectively improve your financial situation, you must take a snapshot of where you currently stand. First, make a list of all of your financial assets, all of your investment accounts, checking, savings, bonds, stocks, etc. Then, make a list of all of your liabilities, such as student loans, credit card debt, and car loans. Take your total assets and subtract your total liabilities, this is your net worth and is one indicator of your personal financial strength.

2. Analyze your Debt and Credit

Coming out of college, most young adults have a tremendous amount of debt weighing on them. To start your financial lives out on the right foot, it’s a great idea to get a handle on the specifics like the terms of your loans, how long do you have to pay, and how much each month. It also may make sense to look at some loan consolidation programs. Most of these organizations folded during the “credit crunch,” but there are still a few viable sources out there.

Along with student loans, credit cards can also be a sore point for many graduates. Either you have never opened a credit card or you took the plunge and financed your Spring Break vacation on it. It’s okay to open a credit card, since it helps you build up good credit for yourself, but you have to be disciplined enough to pay it back. If you don’t already have a credit card, make sure you apply for one because no credit can be as detrimental as bad credit. It is also beneficial to view your credit report to ensure that everything is correct and to allow you to see whether you fall within the bad, good, or great credit ratings. There are some places on the internet that will allow you to check all three credit agencies for free once per year.

3. Create a Budget

It’s a good idea to take a look at your current income and expenses. Create a list of these expenses. Take inventory of what you spend your money on for a couple months. Can you shave off a couple dollars here or there? This will help bolster what’s left over each month for savings.

4. Save, Save, Save!

As the saying goes, you must “pay yourself first.” How many times have you had the greatest intentions to actually put some money aside for a specific reason, but at the end of the month, there’s nothing left to save? Many people do just this. Instead, treat your savings as if it was a bill due at the end of the month. This way you are making sure that you’re always putting money away into savings. As long as you pay yourself first, then you don’t have to feel guilty spending down what’s left.

One easy way to do this is to directly deposit your paycheck into two different accounts, one for savings and the other for paying bills. If your company doesn’t offer this option, just add an automatic debit onto your checking account and set it for the day your paycheck hits your account.

It’s also very important to have clearly identified your savings goals. This will make it much less tempting each time you have the urge to tap that account for “fun” money. You’ll then realize that if you did that, it scoots you further away from that end goal.

5. Learn About Insurance

It is vitally important to understand those pesky insurance policies that you have floating around. Most people have the usual insurances, health, auto, renters/home owners, life, and disability. Let’s take a quick look at some things to watch out for.

·        Health Insurance

Most employers pay a portion, if not all of these premiums. Take a look at the options they give you and choose one that suits your needs. Do you go to the doctors’ more often than most? You may want to elect more coverage than someone who rarely gets sick. For those who may not use the coverage often, look for high deductible plans which are usually offered in contrast to the big “Cadillac” plans.

·        Life Insurance

Many recent graduates may not feel that this type of coverage is needed, especially since you may not have any dependents. Keep in mind that life insurance isn’t just for those who are married and have families. If you own any property or business or have any debts, then coverage may be needed. Also, if you are thinking about popping the question or purchasing that condo, then you may want to look into the different types of plans. Since you are young, and most likely healthy, you can lock in your rates. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges. Speak to an insurance expert about designing the right strategy to fit your needs.

·        Auto Insurance

Auto insurance is a must have! If you ever were in that major car accident, you want to make sure that your plan covers the right items. Take a look at your deductible and see what you can afford paying out of pocket in the worst case scenario. Many times, if you purchase this coverage from the same carrier as your Renters/Home Owners insurance, you can qualify for discounts.

·        Renters/Home Owners

This coverage is key. You want to make sure that if you were ever robbed or if your property was damaged, then you are covered. Keep in mind this coverage also takes care of property stolen from your car. And if you are purchasing home owners insurance, make sure you only cover the replacement value of your home and not the land too!

·        Disability Insurance

According to the nonprofit LIFE Foundation, nearly one out of every three workers will suffer a disability lasting three months or longer at some point in their career. You’re going to insure your car, your house, your health, even your life, but what about your income earning potential? Many employers have some sort of coverage, generally up to 60% of your income, but these plans may be deficient, leaving the burden on you to supplement.

As you create financial habits that fit your personality, don’t forget that you won’t achieve perfection overnight. Learning these strategies takes time and may be hard at first. If you have the right attitude and thirst for growth, these practices will become second nature and you will be on your way to financial success.

For more information, please contact Jason Silverberg directly at Jason@finadvinc.com.

Jason is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC.

As we travel through the adventure of life, we encounter many pathways to obtain our financial goals. Some avenues lead us straight to where we want to go, while others lead us astray and into valleys of despair. As we get married and start a family, we become a team and join forces. At this point, it’s critical that both partners agree on where the path will lead, as well as which route to take to get there. Here are 7 tips to use as a road map to guide newlyweds in their quest for financial success.

1. Talk about money

As men and women communicate on different wavelengths, a marriage is about bridging those gaps and coming together in mutual understanding. Just with everything else, men and women must communicate about their money, and often. Even before the marriage, it’s a good idea for each partner to disclose to the other all of their assets and debts.

As time passes, make sure that you are always talking with each other about financial habits. Paying bills is a great activity to do together, so both partners know the process. This is a great opportunity to discuss income and expense issues.

As major purchases spring up, make sure you both consult each other before buying. Come up with a minimum dollar amount that works for each of you, so that there aren’t any miscommunications. A lot of hard feelings can be created because one person made a large purchase without the others’ knowledge.

Prepare an annual financial summit once a year. It can be as formal or informal as you’d like. Just make sure that you talk globally about what each spouse would like to see happen over that year. Maybe one person wants to reduce their debts in half, while the other spouse wants to be in a position by this time next year to buy a new home.

2. Prepare a Budget

Have you ever heard of the term, “Pay Yourself First?” This is the concept of treating your savings as if it were an expense. Many people spend down their income and save whatever is leftover. Most times, there isn’t much leftover if anything at all. The true way to know that you are saving is to pay yourself first. In order to figure out how much feels right, create a budget. Simply track over 1 or 2 months, how much income comes in and the expenses that go out. Make a list and subtract the expenses from the income.

If you are really disciplined, you can make this an ongoing project to try and whittle away some of your frivolous expenses. Instead of the fancy Starbucks drinks, try brewing your own coffee. Brown bag your lunch once a week to see how that feels. Then, try doing it twice a week. You can see where this is going. Also, make sure to pay your bills on time. By staying disciplined and holding yourself accountable, you’ll stay clean with the credit bureaus and avoid the pitfalls of getting into too much debt. Sticking to a budget is one of the cornerstones to understanding your current financial position and opens your eyes to the possibilities of where you can go with your financial lives.

3. Inform the government

One of the first things that should be done as a joint unit is to inform the government of your new nuptials. Make sure if a name has been changed that the IRS has record of this and you receive a new social security card. Also, changing your driver’s license is a good idea too. Finally, make sure all of your financial accounts have the new name change recognized. Oh, and don’t forget to change your beneficiaries on your IRAs, 401(k)s, Life Insurance, and Trust accounts. Make sure you have extra copies of your marriage certificate because many financial organizations need proof to make the change.

4. Joint accounts

To keep things simple in your financial household, a joint account could be a good idea. This way, as bills become due, there is one spot where money can be drawn from. It’s a lot easier than having to two individual accounts.

5. Review your Insurances

As you both take the next step and begin your family, one of the most important aspects of your financial situation is your insurance protection. Make sure you tell your auto and home/renters insurance company that you are now married. They can put you both on the same policy and reduce some expenses. Also, make sure you evaluate each other’s health insurance plans through work. See which one provides the most coverage for the least amount of cost.

Life insurance coverage is also very important. Discuss a plan for what would happen in the event either of you die. This is not something many couples want to discuss, but it is crucial to making sure that you both have adequate protection. Contact a financial advisor to help create a strategy that fits your needs.

6. Prepare your Will

Just as you should be evaluating your life insurance needs, it is also important to prepare your will. Anytime you have a major life change, amending your will is vital to making sure that your plans are carried out. If you die without one, your state will provide an order to distribute your assets for you, but you may not like how they will do it. Also, don’t forget the Advanced Medical Directives which include your living will, power of attorney, and health care proxy, each making sure that if you cannot make medical decisions on your own, then your wishes will be carried out.

7. Consult a Financial Advisor

There are many basic factors when one forms an opinion about money. Some feel that money is a means to an end, while others believe that money makes the world go round. Some say money is the root of all evil, while others live for money. However you may feel about money, you want to make sure that you and your partner understand each other. Consulting with an unbiased third party to discuss your feelings toward finances may help you start your marriage off on the right foot. It’s a good idea to share your experiences and your goals, so that you each can guide the other throughout your journey together. A financial advisor can also act as a coach as you move closer and closer to your financial life goals. Whatever your financial personality looks like, just make sure that you and your partner are communicating, creating good financial habits, and working together towards a common goal.

Jason Silverberg is a Registered Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC and a Registered Investment Advisor

Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges.

1175-2009-51578, D.O.F.U. 3-2009

Written By: Allison B. LaGasse, CLTC, Financial Advisor

Women seem to do be doing it all these days. From managing the home while building successful careers, to raising children while caring for elderly parents, the roles many women play in today’s society have become increasingly multi-faceted. So it should come as no surprise that in-between running business meetings and carpooling to soccer practices, women are also projected to control over half of all private wealth in the United States by the year 2010 (Business Week/Gallup, 2005).

Aside from simply controlling the money, women have plenty of convincing reasons to become financial savvy…not all of which are pretty. For one thing, according to the Bureau of Labor Statistics, women tend to make $.77 to every $1.00 made by our male counterparts. Combine this with the fact that women tend work fewer years and are likely to live longer than men, and you can see why women should be getting on the path to financial success as quickly as possible.

These facts seem to paint a grim picture for the aspiring female millionaires out there, but luckily there are quite a few characteristics, inherent to women, working in our favor. For one thing, women tend to be better at COMMITMENT than men, which make us more successful investors! While men tend to invest on instinct and act on the “hot stock tip” of the moment, women tend to develop and stick to a long-term investment strategy. In fact, according to a study by the University of California-Davis on average, women investors outperformed male investors by 9% a year! Furthermore, women aren’t afraid to speak up when dealing with a topic with which we are unfamiliar. We eagerly read articles, conduct research on the internet and reach out to friends and family to seek information that will help us make better decisions and become better educated along the way.

So, what are the initial steps to becoming financially successful? Many would argue the first step is to make more money, but this is simply not true. Below I’ve outlined 5 steps to get anyone, on any budget, started on the path to financial freedom. 

1. Get Started Early. When it comes to building true wealth, nothing plays a more powerful role than TIME. The longer your money is invested, the faster it can grow upon itself (known as compounding interest) and the less you have to save per month to reach your goal!

2. Have a Game Plan. Knowing where you stand currently is a key component to developing a plan to get you where you want to be down the road. Take some time to consider the following questions: How much is your salary? How much do you save per month? How much do you spend per month? What are you spending your money on? Next, take some time to ponder where you would like to be in 1 year, 5 years, 10 years, and at retirement. Visualize your future as you hope to see it, put your goals in writing and determine what you need to start doing today to put you on track for the life you envision.

3. Lay the Foundation. Now that you’ve set some goals, it’s important to put the proper protection in place so that should any unexpected bumps in the road occur along the way, your dreams can still be accomplished because you planned accordingly. Every woman should have adequate life, disability, and long-term care insurance to protect her and her family. These insurance plans will protect you financially during an emotional time and no financial strategy is complete without them. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender charges, so make sure you understand what you are purchasing.

4. Invest Regularly. These days it is extremely easy to put your savings on auto-pilot. Your employer, bank and brokerage house all have the capacity to set up automatic, monthly contributions to any retirement plans, savings accounts and brokerage accounts you open. Furthermore, by putting your savings on autopilot, your investments will perform better in the long-run because you have essentially taken your emotions out of the equation. For example, if you’re investing $100 per month, every month, regardless of what’s going on in the economy, that $100 will buy fewer shares of stock when the market is high and more shares when the market is low. However, if you were investing the same $100 at random, you would probably be hesitant to invest your money in a down economy because your emotions would come into play. Investing the same dollar amount every month is known as dollar-cost averaging and it is great technique to ensure you are buying low and selling high. Dollar Cost Averaging does not assure a profit and does not protect against loss in declining markets. Also, since such a program involves regular investment purchases regardless of fluctuating price levels of the investment, consider your financial ability to continue purchases through periods of low price levels.

5. Don’t Put All Your Eggs in One Basket. Diversification is probably the most commonly given piece of investment advice and, I could argue, it is also one of the most misunderstood. Holding ten different stocks in your retirement account does not mean you’re diversified; diversification considers what those investments represent. For example, are you invested in all large growth companies or are you invested in all small international companies? Are you holding all corporate bonds or are you invested in all technology companies? A well-diversified portfolio can help minimize risk while producing competitive returns. Diversification does not guarantee against loss, but is a method used to manage risk.

Now that you’ve read some reasons why women need to plan more than men, some arguments as to why we’re destined to make better investors than men and five steps to get started on the path to financial success and security, it’s time you take some action. Read articles, talk to friends and family, and seek out a financial advisor you can trust to build a long-term relationship. Continually find ways to increase your “Investment IQ” and surround yourself with people who support your efforts. There’s no time to procrastinate. This is your life, plan for it.

Allison is a Registered Representative of Securian Financial Services, Inc., Securities Dealer, Member FINRA/SIPC, and a Registered Investment Advisor.  Financial Advantage Associates is independently owned and operated.

1175-2009-46820, D.O.F.U. 2-2009

If it’s your name that’s on the sign, you need to be building jobs, not doing them. This is what I mean by working on your business, instead of in it. The meaning and value each entrepreneur attaches to this will vary, but in every successful businesses, someone has taken the knowledge required to found a company and turned into information to be shared with future employees.

What is that knowledge? It starts with goals and standards. The value you want to deliver to customers needs to be defined, in such a way that every employee gets it from the first exposure.

Once a business has defined its standards and the value it wants to consistently deliver, how that gets accomplished, in the same way, every time, is a large part of working on the business. Every process that affects your customers should be documented, and the documentation checked against reality regularly. This is the feedback loop that leads your business to get its work done consistently and effectively (instead of you doing it!)

Working on your business is entrepreneurship at the master’s level. But it isn’t the end of the story. Once you’ve successfully mastered working on your business, you’ll find that you are starting to work with your business as well.

Working with your business is again a process of turning knowledge learned into information to be distributed. Now, though, your business, its history, and the industry are a subject matter, and your career in it are the proving ground and proof of your expertise. You are an expert: talking and writing about your business are what you do.

Working with your business has at least three distinct benefits for the entrepreneur. It builds business as surely as advertising, as your company’s profile rises. The exposure that comes from sharing your expertise can lead to new business opportunities for your company, or for you. Finally, becoming known as an expert can build additional revenue, as your expertise gets captured in books, lectures, and other specific products.

Blogging is great tool to use in working with your business; new articles can be posted easily and frequently, and attract readers who are looking for what you have to offer, even before they learn who you are. Getting involved with an industry association is another way to start talking about your professional expertise, developing contacts, and raise your profile as a knowledgeable source in your industry.

Wake up! Be aware of what you do or don’t do and how those affected will react.

Leo Durocher, the legendary baseball manager, once said, “Nice guys finish last.” He had it wrong: Nice guys finish first.
 
•             How do people you know perceive you?       
•             How do new introductions react to you?
•             Are you viewed as smart and sharp at what you do?
•             Are you viewed as a giver or a taker?
•             Do others think you are connected?
•             Are you well liked by your peers; are you viewed as a good person?
•             Do people respect your opinion?
•             Are you honest and sincere?
•             Do you follow through with what you say you are going to do?
•             Do you take the lead in conversations?
•             Are you ever overbearing or overanxious when making a point?
 
The perception may be wrong, but it doesn’t matter. Perception is reality.

Drive yourself to be better - every day.

Don’t change who you are, change the way you think.

Follow up - and continue to follow up - after the event.

Think big!!

Get out more often. The view of the world from your desk is a narrow one.

Stay balanced - contentment is success.

But organizations who bring these two groups together have been uncommon.

One organization that is working to carry the discipline of entrepreneurship into the schools is the National Foundation for Teaching Entrepreneurship (NFTE).

NFTE sponsors programs throughout the year that bring businesspeople into the classroom, to talk about their experiences, teach practical lessons like writing a business plan, and mentor fledgling entrepreneurs.

The work of building a business can itself be the factor that gets a kid through their school years, especially kids who question the relevance of the school curriculum.

NFTE’s volunteers have three different areas where they can lend their expertise: Coaching, Judging, and Speaking.

Coaches spend time with small groups of students, and also meet with students one-to-one.

They are coaching their proteges on how to write a business plan, doing real-life market research, and testing their ideas against business reality.

NFTE sponsors business plan competitions for students; judging those entries is another activity NFTE volunteers manage.

NFTE pairs up professionals with educators in a kind of rotating ad hoc speakers bureau.

The skills an entrepreneur needs to succeed are highly varied; it’s a strength of NFTE that they bring together lots of volunteers from the full spectrum of business.

Students are exposed to real-life experience, and are taught how business planning principles lie behind those real-life experiences.

If you want to find out more about NFTE & get involved with getting a new entrepreneur started on the path, contact NFTE’s Volunteer Coordinator, Terry Nicholetti (terry.nicholetti@nfte.com).