tag:blogger.com,1999:blog-47073968921752387862024-02-18T18:21:06.579-08:00The Money DamesThe Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-4707396892175238786.post-31845764999525079952009-01-19T15:04:00.001-08:002009-01-19T15:06:48.332-08:00We Have a New Blog NameWe've moved to <a href="http://moneydames.blogspot.com/">Money Dames</a>. Please join us!!The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-864573411421721672009-01-14T17:45:00.000-08:002009-01-14T18:13:56.292-08:00Can One Live as Cheaply as Two?Years ago, as a newlywed I remember learning that because we were married my boyfriend and I would now pay higher taxes than we did before although our incomes were exactly the same. That was my introduction to the marriage penalty inherent in our progressive tax code, where a married couple pays taxes at a higher rate than if they were two singles earning the same wages. I complained to an older married friend that this seemed really unfair. Her view was that married people get other breaks so maybe paying slightly higher taxes was OK. <br /><br />Recently I recalled that long-ago conversation. Newly single, I realize how expensive it is for two people who used to live as one household to live separately. When I lived with my husband in one household we had to make the mortgage payment monthly, pay utility bills, grocery bills, property taxes, insurance and other such incidental expenses. Now we are in two separate households and the expenses have doubled. Instead of one mortgage payment, our incomes support the same mortgage payment plus an apartment rental. The grocery bills in my single household seem exactly the same as before, utility bills are no different, neither is landscaping, insurance and various other expenses. The only difference is that these expenses are being replicated across town in my ex's household.<br /><br />Across the gap of 20+years, I recall that half-forgotten conversation; now I get it and can see for myself the breaks that marrieds get and why net income drops for both parties after divorce.<br /><br />Veena KutlerThe Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-51527237851389677362009-01-13T15:11:00.000-08:002009-01-14T17:16:28.598-08:00More Thoughts on MadoffThe Madoff affair has stirred up a buzz within the financial press and among financial advisors. Some advisors had client assets with Madoff and were caught in the fallout. Most advisors had no exposure and of these some are now congratulating themselves in the press for having the prescience to dodge the bullet. I find the extent of back-patting going on to be interesting and wonder how many of us advisors were lucky rather than insightful.<br /><br />I remember a very smart, experienced analyst telling me once that even the best analysis can’t protect against fraud perpetuated by a determined person, because finding fraud requires detective work rather than analysis. Given that, what can be done going forward to protect assets from a fraud like this? Just as a good diet and exercise help us stay healthy there are basic investment rules that we can follow to help keep our portfolio sound. But just as diet and exercise alone can’t prevent every disease, the basic rules won’t always keep you out of the crazy pitfalls of the markets.<br /><br />Transparency – It’s helpful to have securities that are priced daily and even if it is a fund to have regular reporting so the securities held by the fund are known and valued. This policy rules out using hedge funds that aren’t required by law to report their holdings, and until hedge funds are transparent we don’t believe in investing in them.<br /><br />Show Me the Money – Having an independent custodian that hold the assets and is independent of the money manager introduces a good check-and-balance. Madoff’s investors sent their money to Madoff. Even large mutual funds use outside custodians (such as State Street Bank) to custody assets and don’t hold the money themselves. Separation of the money manager and the custodian is a good thing.<br /><br />Diversification – Diversifying among managers, styles and asset classes is still the best and no-brainer way to reduce if not avoid risk. Keep in mind that the biggest losers in the Madoff fraud are those who had all their assets with the Madoff firm.<br /><br />If it Smells Like a Free Lunch… – I’m not convinced that all Madoff investors were being greedy. My guess is that some felt that the returns of 8% - 10% a year that Madoff was targeting indicated a conservative strategy. Not being market professionals, they didn’t know that target requires a swing-for-the-fences mentality. Think about it – there’s no way 8% - 10% can be achieved consistently in down markets by using low-risk strategies.<br /><br />Veena KutlerThe Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-58036461428949020762009-01-09T10:43:00.000-08:002009-01-14T17:16:28.598-08:00The Making of a Financial Planner<span style="color:#990000;"></span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">What makes someone want to become a financial planner? In my case you might call it a series of unfortunate events. </span><br /><br /><span style="color:#990000;">My father died from pancreatic and liver cancer almost 15 years ago. In the last year of his life he suffered terribly not only from the ravages of his disease but because his financial life began to unravel at the same time. </span><br /><br /><span style="color:#990000;">For most of his life he had been a successful businessman. He and his brother sat atop a small empire of retail stores and a variety of investments in local businesses in my Midwestern home town--a family business my grandfather built after emigrating from the Ukraine. We lived very comfortably in our small community while I was growing up; in fact I'd say my brothers and I were pretty spoiled, never wanting for anything. I saw my dad as a savvy businessman and a person of the highest integrity.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Our fortunes first began to turn when my dad and uncle decided to open a new store halfway across the country in Nevada. Until then I had been unaware that dad was unhappy with his life, but he was restless and looking for a big change. Boy, did he get it! Our family voted (four to one -- I was the only one opposed) to relocate so that dad could manage the new venture. Soon after moving the family he left my mom and filed for divorce.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Not surprisingly, my mom chose to leave Nevada and headed back to the east coast where she had grown up. During her marriage mom had paid the bills, but dad really managed all other aspects of the family's finances. Every element of money management was new to her -- living on a budget, buying a house on her own and making big financial decisions -- and she was ill-equipped to deal with any of it. Over the years she was victimized by salesmen and brokers who won her trust and sold her inappropriate products with no regard for what she really needed.</span><br /><br /><span style="color:#990000;">Meanwhile my dad fell in love and remarried. While his love life was flourishing, changes in the IRS rules created massive tax liabilities for the family business. It was a financial blow dad never really recovered from, but he hid it from the rest of us even cooking the books to keep his brother in the dark. I think he believed his fortunes would turn and he would make it all right, but he got sick and ran out of time.</span><br /><br /><span style="color:#990000;">After his condition was diagnosed, dad began to count on a large life insurance policy he had purchased to keep the business afloat and to provide an inheritance for his wife and three adult children. The plan was in place and might have worked as dad hoped, but less than a month before his death my step-mother convinced him to transfer ownership of his life insurance policy to her. She promptly made herself the sole beneficiary and received the entire death benefit when he died.</span><br /><br /><span style="color:#990000;">That sounds like the end and enough to motivate me to want to learn more about financial planning, doesn't it? But there's more!</span><br /><br /><span style="color:#990000;">Dad's life insurance policy was what's known as key-man insurance, intended to carry his business partner--his brother--through several months during which he would find someone to fill dad's shoes and keep the business (which my dad had thrust deeply into debt) afloat. So it wasn't really dad's policy to leave to his children or his new wife, and it certainly wasn't his to transfer to a new owner. It's probably not too surprising that my uncle sued my step-mother and after months of very ugly back-and-forth they came to a settlement. She bought him out; over time she paid off and negotiated down the remaining debts. She owns and runs my dad's business to this day.</span><br /><br /><span style="color:#990000;">While all of this was happening I began taking CFP courses. I wanted to learn how to spare others from the mistakes my family had made. </span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Initially, I saw my step-mother as the villain who stole my inheritance. When my uncle sued her and won, he joined the bad-guy team. But as I learned more about personal finance I realized that my dad and my uncle had an agreement and dad had broken it first by changing the beneficiaries of his life insurance policy and then by giving it to his wife. So my uncle was a victim too. Even my "evil" step-mother was going to be stuck with credit card bills my dad had hidden. I could eventually see that she was doing what she needed to just to keep his wreckless acts from dragging her down financially. She wanted to save her house and the assets she had built up over a lifetime. I can understand why she did what she did.</span><br /><br /><span style="color:#990000;">My dad blew it by failing to plan, by denying the reality of his financial limitations, and of course by lying to everyone along the way. I'm even willing to see him as a victim -- a victim of unfair tax laws and even more a victim of love! He was so eager to please his second wife he didn't want to confess his failings; he wanted to give her everything.</span><br /><br /><span style="color:#990000;">And in the end, I don't really see myself and my brothers as victims at all. We were clearly last in line for the insurance money. We didn't receive any inheritance at the time of his death, but my dad put us all through top-notch colleges and instilled a work ethic that has allowed each of us to survive and flourish on our own. And his missteps brought me to a profession I love--that's a pretty good silver lining in my book.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Annette Simon</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Copyright 2009 Garnet Group LLC</span>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-70721778163158441572009-01-05T20:41:00.000-08:002009-01-14T17:16:28.599-08:00Budgeting -- Unpopular, but oh so Important!<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxiMhA1JL27PkGjtKd08Utm7FCpcIamw_vm4PRAXfmrGte0BGpY5GapzQwsl4JICFR93DfX91xY2vzbyu0Pbfyw-EEMk7L2RNjbE2Ju0ann04VB9AEqQrw3r24eX0rprNE7H-z41CC2YGr/s1600-h/MPj04358850000%5B1%5D.jpg"><img id="BLOGGER_PHOTO_ID_5288049625856017234" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 320px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxiMhA1JL27PkGjtKd08Utm7FCpcIamw_vm4PRAXfmrGte0BGpY5GapzQwsl4JICFR93DfX91xY2vzbyu0Pbfyw-EEMk7L2RNjbE2Ju0ann04VB9AEqQrw3r24eX0rprNE7H-z41CC2YGr/s320/MPj04358850000%5B1%5D.jpg" border="0" /></a><br /><div><span style="color:#990000;">In recent years the idea of living on a budget has fallen out of favor. Baby-boomers, we are told, don't care for budgets. They prefer a spending plan -- it fits more with their mindset.</span></div><div><span style="color:#990000;"></span><br /></div><div><span style="color:#990000;">Call it a budget or a spending plan or whatever you like, successfully managing your financial life starts with getting control of your cash flow. In the simplest terms, when spending exceeds income, you're in for trouble. This is true whether you make a lot of money or almost none at all.</span></div><br /><div><span style="color:#990000;"></span></div><br /><div><span style="color:#990000;">That's the big idea, but most people are looking for more guidance than that. They're wondering, for example, how much they can reasonably spend on housing, or how much they should be saving for retirement. Here are a few benchmarks to start with, established by the Foundation for Financial Planning.</span></div><br /><div><span style="color:#990000;"></span></div><br /><div><span style="color:#990000;">First some definitions:</span><br /></div><ul><li><span style="color:#990000;"><strong>Disposable Income - </strong>This is your total income from all sources minus federal and local income taxes and your own contributions to your retirement plan(s). Taxes are not optional and we recommend treating retirement savings (at least 10% of your total income) the same way -- as though you have no choice about it.</span></li><br /><li><span style="color:#990000;"><strong>Living Expenses - </strong>Includes rent or mortgage (principal, interest, taxes and insurance) food, utilities, medical, transportation -- required expenses, none of the fun stuff.</span></li><br /><li><span style="color:#990000;"><strong>Discretionary Income -</strong> Subtract your total living expenses and debt payments (non-mortgage debt) from Disposable income to reach this number.</span></li></ul><p><span style="color:#990000;">Using these concepts, here are some ratios that can help you determine whether your lifestyle is reasonable based upon your savings and income:</span><br /></p><ul><li><span style="color:#990000;"><strong>Basic Liquidity Ratio</strong> - Divide your total savings (money in bank accounts and liquid or readily salable investments) by your monthly living expenses. The result is the number of months you can survive without an income, or your Basic Liquidity Ratio. This ratio should be greater than or equal to six, meaning that you could survive on your savings for six months if you were suddenly unable to work and earn an income.</span></li><br /><li><span style="color:#990000;"><strong>Debt Ratio - </strong>Find your Debt Ratio by dividing your monthly debt payments (excluding mortgage payments) by your total monthly income. A Debt Ratio greater than 10% is a red flag indicating that the interest on your credit cards or other loans is eating up too much of your income.</span></li><br /><li><span style="color:#990000;"><strong>Housing Ratio - </strong>This is your rent or mortgage payment (principal, interest, taxes and insurance) divided by your total monthly income. If your housing ratio exceeds 30% you are house poor -- spending too much of your income on housing, which leaves you with too little for retirement savings and other living expenses.</span></li></ul><p><span style="color:#990000;">Use these ratios to take a good hard look at your lifestyle. If your ratios are out of line -- you are living with excessive risk and building a financial house of cards that will probably fall apart with the first strong wind.</span></p><p><span style="color:#990000;">Annette Simon</span></p><p><span style="color:#990000;">Copyright 2009 Garnet Group LLC</span></p><br /><div></div><br /><div></div><br /><div></div><br /><div></div>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-32365428999963167182009-01-01T13:20:00.000-08:002009-01-14T17:16:28.599-08:00Five Financial Resolutions for 2009<span style="color:#990000;"></span><br /><span style="color:#990000;">I like New Year's resolutions -- even though they're often futile and left by the wayside within days, sometimes hours. Because once in a while a resolution sticks and we succeed in making real change. Here are some financial resolutions for 2009 you're welcome to adopt:<br /></span><br /><ol><li><span style="color:#990000;"><strong>Procrastinate in a productive way</strong>. We're all great at procrastinating-- I do it constantly when it comes to tedious work, household chores, doctor's appointments and other less than exciting activities. Try taking that natural ability to procrastinate and using it to postpone and maybe avoid unproductive habits, like impulsive spending. Put off buying those great new shoes for a few day; wait another month to shop for a new rug. It's likely you'll forget about the items that seemed so essential and move on. This sometimes works for binge eating too (admittedly not a financial issue). Wait an hour to eat the cookie that is calling your name (I hear one now). The craving may pass and you'll be glad you waited. </span></li><br /><li><span style="color:#990000;"><strong>Save and invest regardless of market conditions. </strong>This is important for a couple of reasons. First, saving and investing consistently is by far the best way to build wealth over your lifetime. Stopping because of market conditions (or because you have increased your spending) puts you at risk of dropping a good habit. Moreover, investing when the market is beaten up, as it is now, is like buying everything on sale. Many advisors and economists think that we are in for higher than average growth in the markets over the next few years as a result of the dramatic declines that occurred in 2008. There's no guarantee this will happen, but it's a good bet that this is a bad time to stay completely out of the equity markets.</span></li><br /><li><span style="color:#990000;"><strong>Start a family conversation about money issues. </strong>This might be with your parents, your children, your siblings or your spouse. Money is one of the last taboos -- most people would rather talk about their sex lives than discuss money with their family. Do you know if your parents have adequate resources to support themselves through their lifetimes? Have they prepared wills, durable powers of attorney and any other appropriate estate planning documents? If you explaing why, even young children can understand that saving for the future is an important family value and we can't buy everything we want just because we want it. It's much easier to learn and keep good habits when you are young than it is to change bad habits as an adult. Are you and your spouse on the same page when it comes to spending, saving and charitable giving? Opening the lines of communication with your family about financial matters a good way to avoid hurt feelings and potentially unwelcome surprises down the line.</span></li><br /><li><span style="color:#990000;"><strong>Have your estate planning documents reviewed</strong>. If your documents are more than five years old or you have had significant changes in your life or family structure (e.g. birth or death of an immediate family member, divorce, all children now over 21) it's likely you'll need to update your estate plan. There have been changes in estate planning laws in many states that make it important to update the language in any wills or trusts as well. And if you don't have, at a minimum, a will, a general, durable power-of-attorney, and a medical power-of-attorney you need to see an attorney who specializes in estate planning to draft and execute these basic documents. Estate planning documents that are clear and properly drafted are especially important for unmarried partners who are not protected by most states' laws.</span></li><br /><li><span style="color:#990000;"><strong>Diversify, diversify, diversify! </strong>Yes, every asset class was hit this year, but some more than others. No one can consistently predict the future (even the smartest guys in the room) and successful investing is more often than not the result of diversifying as broadly as possible and keeping your emotions out of your investments. Falling in love with a stock or a piece of property (we saw a lot of this in recent years with real estate investments) will almost inevitably break your heart and your bank.</span></li></ol><p><span style="color:#990000;">Here's to a better year. Cheers!</span></p><p></p><p><span style="color:#990000;">Annette Simon</span></p><p><span style="color:#990000;">Copyright 2009 Garnet Group LLC</span></p>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com1tag:blogger.com,1999:blog-4707396892175238786.post-280400148636118082008-12-29T10:55:00.000-08:002009-01-14T17:16:28.600-08:00A Lesson Learned from Madoff<span style="color:#990000;"><em></em></span><br /><span style="color:#990000;"><em></em></span><br /><span style="color:#990000;"><em>“Those with the biggest financial gains generally had their money managed by <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Madoff</span>. It was an honor having him handle your fortune. He <span class="blsp-spelling-error" id="SPELLING_ERROR_1">didn</span>’t take just anybody. He turned down all kinds of people, and that made you want to give the man even more of your money. When he took your fortune, he told you that he would tell you nothing about how he achieved his returns.”-</em>Laurence <span class="blsp-spelling-error" id="SPELLING_ERROR_2">Leamer</span>, a Palm Beach based journalist, writing in the New York Post, December 13.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Reading this reminded me of past meetings with clients -- during which a client has told us she or he wonders if we should be putting some money into a can't miss investment recommended by a brother, a friend, a son.... It's a hedge fund managed by a brilliant guy with a Midas touch, or stock in a new company started by a genius who has never failed to turn pennies into millions. It's a special version of the American Dream -- that we will invest in the next <span class="blsp-spelling-error" id="SPELLING_ERROR_3">McDonalds</span>, the next Microsoft, the next Google. It's sexy and exciting and so hard to resist.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">But the truth is, picking the next <span class="blsp-spelling-error" id="SPELLING_ERROR_4">megasuccess</span> is the longest of long shots. Are there indicators that help us identify companies that will be wildly profitable? None that are a sure thing. It's like an ugly twist on the old fairy tale -- where the princess kisses a frog and he turns into her prince. In investing (and often in dating I'm told) you're likely to kiss hundreds, even thousands of frogs before you ever find a prince. Chasing after can't-miss investments is a terrific way to fritter away your money leaving yourself with little to show for it in the end.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Bernie <span class="blsp-spelling-error" id="SPELLING_ERROR_5">Madoff's</span> investors believed he was different because he didn't promise extraordinary returns. His promise was guaranteed returns of 8-9% each year. The victims convinced themselves that they were not being greedy, just seeking safe, steady returns. But anyone who has been investing in the past 10 or more years knows that there is no way to <span class="blsp-spelling-error" id="SPELLING_ERROR_6">achieve</span> a guaranteed return that high year after year. <span class="blsp-spelling-error" id="SPELLING_ERROR_7">Madoff</span> pulled it off while the market was strong, but as soon as returns dropped off he was forced to borrow from Peter to pay Paul. When the bottom dropped out of the market last fall his entire house of cards came crashing down. </span><span style="color:#990000;">The cost of <span class="blsp-spelling-error" id="SPELLING_ERROR_8">Madoff's</span> crimes is truly terrible. We can measure the dollars, but we can't put a number on the loss of trust he has triggered in millions of people around the world who were not his clients but believed something like this could not happen in the American financial system</span><span style="color:#990000;">. </span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Successful investing, like success in other areas of life is the result of keeping at it, putting money away year after year, spreading your risk as broadly as possible by using diversified, publicly traded mutual funds that hold liquid publicly traded securities. Fortunes are not built overnight and you cannot expect to get something for nothing. This is just common sense, but too often we <span class="blsp-spelling-error" id="SPELLING_ERROR_9">convince</span> ourselves that our own case is special, or a particular opportunity is a once-in-a-lifetime chance, too good to pass up.</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">If any good can come from this, I hope it is that people learn, once and for all, that when something sounds too good to be true, it almost certainly is <strong>not</strong> true. It's time we stopped believing in fairy tales. </span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Annette Simon</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Copyright 2009 Garnet Group LLC</span><br /><br /><span style="color:#990000;"></span>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-59358556139563951292008-12-22T18:52:00.000-08:002009-01-14T17:16:28.600-08:00Vote for What??<span style="color:#990000;"></span>(Note: Voting on this issue on Change.org ended on 12/31/2008. It did not make it past the first round.)<br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Does your financial advisor put your interests first? It seems like a simple question with an obvious answer. Who would work with an advisor who did <em>NOT</em> put the clients' interests first at all times?<br /><br />If you are working with an advisor who is a representative of a brokerage firm or bank, that's what you are doing. By definition, the primary obligation of a registered representative is to the broker-dealer he/she works for, not the clients. Moreover, when recommending products, a registered representative is only required to consider whether the product is "suitable", not whether the actions he or she is recommending are in the best interest of the client.<br /><br />It sounds like so much legalize, but this is the difference between a fiduciary standard and the lesser standards most people who call themselves financial advisors are held to. This softer standard contributed tremendously to the chain of irresponsible actions that came together to create the sub-prime crisis and the near collapse of our economy.<br /><br />Now, the Obama administration is asking for Americans to get involved and to vote for new ideas that can help change the course of our country in the future by visiting their website, </span><a href="http://change.org/"><span style="color:#3333ff;">change.org</span></a><span style="color:#990000;">. Because there are hundreds of ideas already posted on change.org, we've made it easy for you to get started. You can vote for a fiduciary standard for all financial advisors by clicking on the link in our sidebar. This will take you to the change.org site where you can also look for other ideas and causes you may want to support.<br /><br />This is an opportunity to speak up and say that you want a financial industry that puts consumers first. With enough votes we might make a difference. If we don't speak up the future will almost certainly be more of the same.<br /><br />Until the law requires all advisors to put their clients first, you can find financial advisors who annually sign a fiduciary oath by visiting </span><a href="http://napfa.org/"><span style="color:#3333ff;">NAPFA</span></a><span style="color:#990000;"> - the National Association of Personal Financial Advisors. You can also learn more about fiduciary standards at </span><a href="http://focusonfiduciary.org/"><span style="color:#3333ff;">Focus on Fiduciary</span></a><span style="color:#990000;">. Learn what questions to ask and how to find an advisor who is truly on your side. You deserve nothing less!</span><br /><br /><span style="color:#990000;">Annette Simon</span><br /><span style="color:#990000;"></span><br /><span style="color:#990000;">Copyright 2009 Garnet Group LLC<br /></span><br /><span style="color:#990000;"></span>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-74063786968434574802008-12-18T10:01:00.000-08:002009-01-14T17:16:28.600-08:00What's an Investor to Do?<span style="color:#990000;">Here's a press release from our professional association, NAPFA, that provides excellent guidance for investors worried about the safety of their portfolios:</span><br /><br /> <a href="http://www.napfa.org/userfiles/file/Madoff%20Opinion%20Release%20-%20121608.pdf">http://www.napfa.org/userfiles/file/Madoff%20Opinion%20Release%20-%20121608.pdf</a>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-6707786538047508132008-12-16T08:20:00.000-08:002009-01-14T17:16:28.601-08:00Life Happens<p>When you least expect it!<br /><br />Just when you think life is stable and will run on even keel forever or at least for the foreseeable future, everything changes. For many women, the biggest life alterations involve children and spouses. When a child is ill, or leaves home the balance in the household shifts. When a spouse departs via death, separation or divorce a similar void is created. As women, we tend to respond to these changes emotionally and our first thoughts tend not be about our finances but rather about how we feel and how we can cope with these changes.<br /><br />Life happened to me. A few years ago, I thought that my marriage was stable and the day my oldest child started college seemed safely far away. This summer, two things happened close together: my husband and I separated and my daughter left for a college several states away. My very busy life took an abrupt turn and changes both big and small started tumbling in. Luckily, I still had my teen-age son and my dog at home but the departure of half the household within a few weeks was noticeable. Here are some of the differences I noticed – interestingly, not all bad, and listed in random order.<br /><br />- My girl-fun buddy was gone. My daughter and I were in the habit of going together to the movies, shopping, and getting our nails done. Now I was on my own.<br />- My son eats on a very different schedule than I do. So family dinners that had occurred almost nightly dwindled and I found myself cooking for my son and then grabbing a bowl of cereal or soup for myself at a different time.<br />- The house was a lot cleaner and tidier. We went from a household of very messy (2), messy (1) and slightly messy (me) people to one very messy and one much neater person (me again). Cleaning up for 2 is a lot easier than cleaning up after 4.<br />- I had time on my hands and nervous energy to expend. My gym – 3 blocks away – was seeing more of me and the dog was getting more walks. Soon, people were commenting that both of us – me and the dog – were looking svelte.<br />- Decision making as a solo pursuit. Financial and decisions about the house and kids had been made in conjunction with my husband. Now, since I am the one remaining in the house and am the main care-giver for my kids I began making decisions on my own and to suit myself.<br />- My net worth was cut and cut again. The separation mentally reduced my net worth by half and then the subsequent sharp market decline cut into it again. In the course of a few short months, I experienced the double whammy of separation and a major stock bust – not an experience I would wish upon anyone!<br />- Friends and family popped up with offers of help and support. My evenings and weekends began to fill up with activity.<br /><br /><em>Stay tuned. Over the weeks and months ahead I will be blogging about the impact on women of major life changes such as the one I am experiencing myself currently.</em></p><p>Veena Kutler</p>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-52100729086923140022008-12-12T20:13:00.000-08:002009-01-14T17:16:28.601-08:00It's Harvest Time<p><span style="color:#993300;">The market this year has been absolutely punishing – there’s just no way around it. But there is a thin silver lining on the cloud if you have losses in your taxable investment accounts. This is a great opportunity to harvest tax losses you can use to reduce your income taxes, perhaps for years to come.<br /><br />Harvesting losses refers to a two-step process:<br /><br /></span></p><span style="color:#993300;">1. Sell securities you now hold that are in a loss position (you will need to know your original cost basis to determine whether your securities are in loss territory).<br /><br />2. Immediately purchase another under-valued security. We use low-cost, diversified mutual funds. By doing this, you capture the loss, which has great value for tax purposes, but you are NOT losing anything because you’re holding a basket of securities that will rise when the market recovers.<br /></span><blockquote></blockquote><blockquote><span style="color:#993300;"></span></blockquote><p><span style="color:#993300;">Most people have an immediate gut reaction to this idea – “I don’t want to take a loss! I’m going to wait for it to come back.” Some people grow attached to the securities they have picked. Others feel it would be wrong to sell stocks they inherited from their parents or grandparents.<br /><br /><em>Let it go!</em></span></p><span style="color:#993300;">One of the first rules of good investing is to approach it rationally, not emotionally. Securities are financial vehicles, not keepsakes or expressions of your personal style. When your portfolio is too concentrated – for example, you are holding more than 5% of a single stock or most of your investments are in a single industry or country – you are assuming excessive risk and probably receiving no extra compensation (in the form of higher returns) for doing so. By waiting for the market to recover, you will limit or lose the opportunity to harvest losses and miss the chance to diversify your portfolio and reduce your taxes for years to come. There is really no rationale for doing this.<br /><br />Harvesting losses is a smart tax strategy, not an admission of defeat. Avoiding it makes no sense at all – it is passing up an opportunity to reduce the risk in your portfolio and your future taxes, an opportunity that costs you almost nothing at all (there may be incidental trading costs).</span></span><br /><p><span style="color:#990000;">Annette Simon</span></p><p><span style="color:#990000;">Copyright 2009 Garnet Group LLC</span></p>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-74057623650870664762008-12-12T19:45:00.000-08:002009-01-14T17:16:28.602-08:00IMPORTANT CONSUMER DISCLOSURE(The lawyers insist!)<br /><br />Garnet Group LLC (“Garnet Group”) is an SEC registered investment adviser with offices in the Commonwealth of Massachusetts and the State of Maryland. Garnet Group and its representatives are in compliance with the current notice filing requirements imposed upon SEC registered investment advisers by those states in which Garnet Group maintains clients. Garnet Group may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements.<br />Garnet Group’s web site is limited to the dissemination of general information regarding its investment advisory services to United States residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of Garnet Group’s web site on the Internet should not be construed by any consumer and/or prospective client as Garnet Group’s solicitation to effect or attempt to effect transactions in securities or the rendering of personalized investment advice for compensation over the Internet.<br />Furthermore, the information resulting from the use of tools or other information on this Internet site should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from Garnet Group. Any subsequent, direct communication by Garnet Group with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Garnet Group, please contact the United States Securities and Exchange Commission on their web site at <a href="http://www.adviserinfo.sec.gov/">http://www.adviserinfo.sec.gov/</a>.The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0tag:blogger.com,1999:blog-4707396892175238786.post-84268777914607115832008-12-12T08:36:00.000-08:002009-01-14T17:16:28.602-08:00Welcome to Our Blog!!<span style="color:#990000;"></span><br /><span style="color:#990000;">Welcome to our blog! Veena and I hope to provide valuable financial information for women of all ages in this space. We’ll talk about what’s happening in the world and the markets as well as the financial challenges in our own lives that might be affecting many of you as well. We want to hear from you as well so please share your questions and comments.<br /><br />Annette</span>The Money Dameshttp://www.blogger.com/profile/14825984609654466376noreply@blogger.com0