FREE Portfolio Risk Analysis

BLOG

Six Keys to More Successful Investing

A successful investor maximizes gain and minimizes loss. Though there can be no guarantee that any investment strategy will be successful and all investing involves risk, including the possible loss of principal, here are six basic principles that may help you invest more successfully.

Long-term compounding can help your nest egg grow

It's the "rolling snowball" effect. Put simply, compounding pays you earnings on your reinvested earnings. The longer you leave your money at work for you, the more exciting the numbers get. For example, imagine an investment of $10,000 at an annual rate of return of 8 percent. In 20 years, assuming no withdrawals, your $10,000 investment would grow to $46,610. In 25 years, it would grow to $68,485, a 47 percent gain over the 20-year figure. After 30 years, your account would total $100,627. (Of course, this is a hypothetical example that does not reflect the performance of any specific investment.) This simple example also assumes that no taxes are paid along the way, so all money stays invested. That would be the case in a tax-deferred individual retirement account or qualified retirement plan. The compounded earnings of deferred tax dollars are the main reason experts recommend fully funding all tax-advantaged retirement accounts and plans available to you. While you should review your portfolio on a regular basis, the point is that money left alone in an investment offers the potential of a significant return over time. With time on your side, you don't have to go for investment "home runs" in order to be successful.

Endure short-term pain for long-term gain

Riding out market volatility sounds simple, doesn't it? But what if you've invested $10,000 in the stock market and the price of the stock drops like a stone one day? On paper, you've lost a bundle, offsetting the value of compounding you're trying to achieve. It's tough to stand pat. There's no denying it--the financial marketplace can be volatile. Still, it's important to remember two things. First, the longer you stay with a diversified portfolio of investments, the more likely you are to reduce your risk and improve your opportunities for gain. Though past performance doesn't guarantee future results, the long-term direction of the stock market has historically been up. Take your time horizon into account when establishing your investment game plan. For assets you'll use soon, you may not have the time to wait out the market and should consider investments designed to protect your principal. Conversely, think long-term for goals that are many years away. Second, during any given period of market or economic turmoil, some asset categories and some individual investments historically have been less volatile than others. Bond price swings, for example, have generally been less dramatic than stock prices. Though diversification alone cannot guarantee a profit or ensure against the possibility of loss, you can minimize your risk somewhat by diversifying your holdings among various classes of assets, as well as different types of assets within each class.

Spread your wealth through asset allocation

Asset allocation is the process by which you spread your dollars over several categories of investments, usually referred to as asset classes. These classes include stocks, bonds, cash (and cash alternatives), real estate, precious metals, collectibles, and in some cases, insurance products. You'll also see the term "asset classes" used to refer to subcategories, such as aggressive growth stocks, long-term growth stocks, international stocks, government bonds (U.S., state, and local), high-quality corporate bonds, low-quality corporate bonds, and tax-free municipal bonds. A basic asset allocation would likely include at least stocks, bonds (or mutual funds of stocks and bonds), and cash or cash alternatives. There are two main reasons why asset allocation is important. First, the mix of asset classes you own is a large factor--some say the biggest factor by far--in determining your overall investment portfolio performance. In other words, the basic decision about how to divide your money between stocks, bonds, and cash is probably more important than your subsequent decisions over exactly which companies to invest in, for example. Second, by dividing your investment dollars among asset classes that do not respond to the same market forces in the same way at the same time, you can help minimize the effects of market volatility while maximizing your chances of return in the long term. Ideally, if your investments in one class are performing poorly, assets in another class may be doing better. Any gains in the latter can help offset the losses in the former and help minimize their overall impact on your portfolio.

Consider liquidity in your investment choices

Liquidity refers to how quickly you can convert an investment into cash without loss of principal (your initial investment). Generally speaking, the sooner you'll need your money, the wiser it is to keep it in investments with comparatively less volatile price movements. You want to avoid a situation, for example, where you need to write a tuition check next Tuesday, but the money is tied up in an investment whose price is currently down. Therefore, your liquidity needs should affect your investment choices. If you'll need the money within the next one to three years, you may want to consider certificates of deposit or a savings account, which are insured by the FDIC, or short-term bonds or a money market account, which are neither insured or guaranteed by the FDIC or any other governmental agency. Your rate of return will likely be lower than that possible with more volatile investments such as stocks, but you'll breathe easier knowing that the principal you invested is relatively safe and quickly available, without concern over market conditions on a given day. Note: If you're considering a mutual fund, consider its investment objectives, risks, charges, and expenses, all of which are outlined in the prospectus, available from the fund. Consider the information carefully before investing.

Dollar cost averaging: investing consistently and often

Dollar cost averaging is a method of accumulating shares of stock or a mutual fund by purchasing a fixed dollar amount of these securities at regularly scheduled intervals over an extended time. When the price is high, your fixed-dollar investment buys less; when prices are low, the same dollar investment will buy more shares. A regular, fixed-dollar investment should result in a lower average price per share than you would get buying a fixed number of shares at each investment interval. Remember that, just as with any investment strategy, dollar cost averaging can't guarantee you a profit or protect you against a loss if the market is declining. To maximize the potential effects of dollar cost averaging, you should also assess your ability to keep investing even when the market is down. An alternative to dollar cost averaging would be trying to "time the market," in an effort to predict how the price of the shares will fluctuate in the months ahead so you can make your full investment at the absolute lowest point. However, market timing is generally unprofitable guesswork. The discipline of regular investing is a much more manageable strategy, and it has the added benefit of automating the process.

Buy and hold, don't buy and forget

Unless you plan to rely on luck, your portfolio's long-term success will depend on periodically reviewing it. Maybe your uncle's hot stock tip has frozen over. Maybe economic conditions have changed the prospects for a particular investment, or an entire asset class. Even if nothing bad at all happens, your various investments will likely appreciate at different rates, which will alter your asset allocation without any action on your part. For example, if you initially decided on an 80 percent to 20 percent mix of stocks to bonds, you might find that after several years the total value of your portfolio has become divided 88 percent to 12 percent (conversely, if stocks haven't done well, you might have a 70-30 ratio of stocks to bonds in this hypothetical example). You need to review your portfolio periodically to see if you need to return to your original allocation. To rebalance your portfolio, you would buy more of the asset class that's lower than desired, possibly using some of the proceeds of the asset class that is now larger than you intended. Another reason for periodic portfolio review: your circumstances change over time, and your asset allocation will need to reflect those changes. For example, as you get closer to retirement, you might decide to increase your allocation to less volatile investments, or those that can provide a steady stream of income.  
Important Disclosures:
Your LPL approved Broker/Dealer disclosure must be prominently disclosed here during distribution in accordance with LPL advertising policy.
LPL Tracking #  1-195559
Read More

Get to Know the Rich Relationship Between Your Financial and Social Life

When you think of your financial wellness, you are likely not considering how it may affect your social life or vice versa. While many factors may influence your financial situation, social influence is the component that is given the least attention. Both those who struggle with their finances and those with a more comfortable financial standing may experience changes to their financial wellness based on their social life, so it is crucial to understand the correlation.

Loneliness May Affect Your Financial Health Along With Your Physical Health

The American Psychological Association has made correlations between loneliness and increased levels of inflammation in the body and stress hormones. This may lead to adverse effects, such as an increased risk of cardiac disease and arthritis. Poor health may lead to more costly medical expenses and more time off of work. This expense increase and a loss of work time may eventually lead to problems with your finances.1

Your Social Circle May Lead to Increased Spending

Sometimes an active social life may lead to increased spending, sometimes even more than you can comfortably afford. If your social circle is comprised of friends that constantly spend outside of their means, you may find yourself mimicking their behavior. This may include making large purchases on impulse that may affect your future financial goals.2

Social Pressure May Lead to Poor Financial Decisions

No matter your social circle, fitting in may seem like the most important thing. Unfortunately, trying to impress friends by spending more than you have or making an investment you know may not be ideal may lead to poor financial choices and consequences. Instead of putting yourself under financial strain to fit in with a specific group, it may be better to reevaluate the relationship.1

Having a Strong, Supportive, Social Circle May Help Improve Your Finances

While some aspects of your social life may lead to possible negative consequences, there are some instances where your social life may improve your financial outlook. Being part of a supportive social circle and having friends that you depend on will improve your quality of life and may also improve your financial health. Supportive friends will likely provide you with time and other resources that may help you spend less. This could include lending you money at a lower interest rate or letting you borrow tools, or helping you complete a project instead of paying to have it done.1 Your social life may affect your financial goals in a way that you may not have considered. Take a good look at your social circle and lifestyle to see if it benefits your financial future or if maybe now is a good time to make some changes to prevent it from negatively affecting your financial goals.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
LPL Tracking #1-05370165
Footnotes:
1 Financial Well-Being and Social Relationships Closely Linked, Gallup, https://news.gallup.com/poll/187616/financial-social-relationships-closely-linked.aspx
2 Americans unhappy with family, social or financial life are more likely to say they feel lonely, Pew Research Center, https://www.pewresearch.org/fact-tank/2018/12/03/americans-unhappy-with-family-social-or-financial-life-are-more-likely-to-say-they-feel-lonely/
Read More

Small Business Owners: Life, Liberty, and the Pursuit of Financial Independence

Being a small business owner can be rewarding but also may bring a lot of stress. You may be experiencing the pressures of trying to grow your company while providing a solid future for your employees. On top of all that, you will also need to focus on building financial independence for yourself and for your business. There are many paths to financial independence; below are a few directions to get you started.

Optimize Your Current Assets

One of the first steps toward financial independence is optimizing your current assets. This could take the form of increasing the profitability of your business by increasing your marketing, reducing your current costs and expenses, finding ways to reduce your tax burden, or continuing your education. You will need to take an inventory of your current assets and expenses and develop a strategic plan to optimize these factors and help your company reach its potential.1

Pay Down Debt

There are two primary types of debt: productive and reductive. Productive debt is debt that helps nurture your financial growth and puts you on the path toward financial freedom. Reductive debt, on the other hand, is debt spent on items that will depreciate in value and not provide boosts to revenue or income. It is similar to credit card debt, and eliminating or at least reducing it can put you and your business on a path toward overall independence. Assess all of your debt and develop a plan to pay it down aggressively until it is eliminated.1  

Beef Up Your Savings

Savings are vital for yourself and your business since they will help you build wealth and financially prepare you for unexpected expenses. One way to increase savings as a business owner is to take advantage of your company's savings plans. This can include IRAs, 401ks, and health savings accounts. You may also want to look at the various investment options for your personal and company funds that can create long-term returns.2  

Give Your Insurance the Once Over

While growing company assets is crucial to achieving solid financing, so is insuring them. Without proper insurance, you risk losing what you’ve gained through your hard work. Review your insurance policies to make sure that you not only have all of your assets covered but that you have proper coverage limits. Policies you should consider reviewing include life insurance, disability, business, long-term care, health, and property and liability coverage.2 Follow the above tips to put yourself on the path to financial independence. Assistance from a financial professional can assist you in your wealth management efforts and overall financial goals.    
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or insurance product(s) may be appropriate for you, consult your financial professional prior to investing or purchasing.
Investing involves risks including possible loss of principal.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
LPL Tracking #1-05370165
Footnotes
1 “The 4 x 4 Financial Independence Plan for Entrepreneurs,” Entrepreneur.com, https://www.entrepreneur.com/leadership/the-4-x-4-financial-independence-plan-for-entrepreneurs/306064
2 “How Entrepreneurs Can Safeguard Their Financial Futures—And Work Toward Financial Freedom,” Forbes, https://www.forbes.com/sites/forbesbusinesscouncil/2023/02/14/how-entrepreneurs-can-safeguard-their-financial-futures-and-work-toward-financial-freedom/?sh=123c28f17a65
Read More

Why Save for Higher Education?

In 2021, 44.7 million Americans are facing the burden of student loan debt. They owe more than $1.53 trillion in student loans. These alarming statistics prove the importance of saving for higher education. In the past, many parents prioritized saving for their child’s college or trade school. However, today students are taking steps to cover the cost of their own higher education and keep their student loan debt to a minimum.  

Benefits of Saving for College or Trade School

When students make an effort to save for their education after high school, they get a head start on life with minimal debt. Instead of spending years trying to pay off their student loans, they can focus on other financial goals such as buying a house or saving for retirement. Saving for college or trade school may also motivate students to choose a major that provides job opportunities and encourages them to complete their degree.  

How Students Can Save for Higher Education

There are a number high school or college-aged students can save for higher education:
  • Apply for Scholarships: Scholarships provide money for college that students don’t have to repay. If they’ve excelled in academics, athletics, or extracurricular activities, it may be in their best interest to apply for scholarships. Even small scholarships can help save hundreds or thousands of dollars on the overall cost of secondary education.
  • Enroll in AP Classes: A high school student can earn college credits by taking Advanced Placement or AP classes in high school. The fewer credits they need to complete their degree while in college, the more money they’ll save.
  • Work: While balancing classes, homework, and studying while working can be difficult, it’s not impossible. If your student can work part-time or occasionally during the school year or summer, they can save money and build their resume.
  • Open a College Savings Account: Your child can help contribute to a college savings account to help grow the money they’re saving for their education.
  • Delay College: If your student is serious about graduating debt-free, they may delay college or trade school and work for a few years. Once they have enough saved up, they can begin their higher education journey.
  • Attend a Community College: If your student completes prerequisites at a community college initially and then transfers to a public or private four-year university or college, they may save on tuition depending on secondary education costs in your area.
 

Consult Your Financial Professional

Together we can review your financial situation and develop the ideal college savings plan for your student. Contact us today to get started.       Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.   All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.   LPL Tracking # 1-05182676  
Read More

5 Compelling Reasons to Rethink Social Security

Relying extensively on social security may not meet your retirement needs

  When it comes to planning for retirement, Social Security benefits have traditionally been viewed as a safety net for many individuals. However, in recent years, there has been growing concern about the long-term viability and sustainability of the Social Security system. As a result, it is becoming increasingly important for individuals to reconsider relying solely on Social Security benefits as a retirement plan. Here are five compelling reasons why you should not solely depend on Social Security as part of your retirement plan.

Uncertain Future

One of the key reasons to be cautious about relying heavily on Social Security benefits is the uncertainty surrounding the future of the program. The Social Security Administration has projected that the trust funds supporting the system will be depleted by 2034. While this doesn't mean that Social Security will disappear entirely, it does suggest that future benefits may be significantly reduced. Depending solely on a benefit that might be subject to cuts or modifications is a risky proposition.

Demographic Challenges

The aging population is placing immense strain on the Social Security system. As baby boomers retire and life expectancy continues to rise, there is an increasing number of retirees relative to the number of workers paying into the system. This demographic shift is expected to result in a decline in the worker-to-beneficiary ratio, potentially leading to reduced benefits in the future. Relying solely on Social Security benefits means exposing yourself to the risk of diminished financial support in retirement.

Inadequate Replacement Income

Social Security benefits were never intended to replace one's entire income in retirement. The formula used to calculate benefits replaces a higher percentage of income for lower earners and a lower percentage for higher earners. For individuals with higher incomes or those who have invested in building substantial retirement savings, relying solely on Social Security benefits may not provide the financial security needed to maintain their desired standard of living. It is essential to consider other income sources and savings to supplement your retirement plan.

Rising Healthcare Costs

Healthcare expenses are a significant concern for retirees, and Social Security benefits alone may not be sufficient to cover these costs adequately. As medical advancements and inflation drive healthcare costs higher, individuals may find themselves struggling to afford necessary medical care and long-term care services. Planning for retirement should include provisions for healthcare expenses, which may necessitate seeking additional sources of income beyond Social Security benefits.

Lack of Control

Dependence on Social Security benefits puts your financial future in the hands of government policy and economic factors beyond your control. Changes to legislation, such as adjustments to the retirement age or modifications to benefit formulas, can have a substantial impact on the amount of benefits you receive. By diversifying your retirement plan and not solely relying on Social Security, you gain more control over your financial destiny, allowing you to adapt to changing circumstances.

Your Financial Professional

While Social Security benefits can be an important part of retirement income, relying solely on them may not be sufficient to meet your financial needs. Engaging the services of a financial professional can provide valuable expertise, tailored advice, and a comprehensive approach to retirement planning. By understanding your unique goals, creating a diversified investment strategy, managing tax efficiency, and providing ongoing guidance, a financial advisor can help you build a robust retirement plan that goes beyond accounting for Social Security benefits. Investing in professional assistance today can set you on the path towards pursuing a confident and fulfilling retirement tomorrow.    
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
This article was prepared by FMeX.
LPL Tracking #1-05373781
Read More

Finances and Fireworks: 5 Strategies to Help Preserve and Celebrate Your Financial Freedom

Your finances are probably one of the last places you want to experience fireworks—unless they are celebratory. With new year's resolutions firmly in the rearview mirror, the summer months allow you to revisit your financial goals and evaluate your progress. This Independence Day may be a good time to take stock of your path toward financial independence with the help of these five tips.

Set Goals

If you do not already have a plan for where you would like to be in five years or more, now is the time to create one. If you are renting, do you want to own a home? Are you hoping to advance in your career or have more children? Having broad goals may give you something to work toward—and working backward from these goals may give you options for the direction you prefer.

Pay Off "Bad" Debt

Not all debt is created equal—and abiding by a strict debt-free lifestyle could leave you unable to purchase a home, go to college, or make other major expenses. However, some debt—including most credit card debt and paycheck advance loans—comes with high-interest rates and strict repayment terms. The more you waste on interest, the less you have to pay the principal. Decreasing your interest payments may help you get ahead of this "bad" debt for good. For example, you may accelerate the payoff or transfer a balance from a high-interest card to a lower-interest card.

Automate Your Savings

One of the most solid pieces of financial advice is to "pay yourself first." By having 401(k) or Health Savings Account funds automatically withdrawn from your paycheck before it even hits your bank account—or setting up an auto-transfer from checking to savings—you may adopt an "out of sight, out of mind" approach to your savings. Over time, you may be surprised at how quickly these funds accumulate when they are unavailable to spend in your checking account.

Balance Your Investment Portfolio

If it has been a while since you looked at your investments in detail, now may be a good time to evaluate them. As some investments increase in price while others may remain stable or even fall, your overall asset allocation may shift to favor those higher-priced assets. Consider a sample portfolio of 50% U.S. large-cap stocks, 30% international, and 20% bonds. If international stocks have a particularly good year, they may make up 40 or 45% of your portfolio, allocating lower percentages to the other two components. For this example, selling some international stocks and buying more bonds or large-cap stocks may help rebalance your portfolio.

Educate Yourself

Financial practices, rules, and regulations are always changing—from individual retirement accounts (IRA) and 401(k) limits to your ability to deduct certain expenses. No one knows everything there is to know about personal finance. However, keeping abreast of major changes may give you the necessary insights. Being informed may help you decide when to change your savings rate, rebalance your investments, take a risk on a rental property, or invest in your small business.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
Asset allocation does not ensure a profit or protect against a loss.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
This article was prepared by WriterAccess.
LPL Tracking #1-05370157
Read More

Retirement Annuities Explained: What They Are and How They Work

Having enough retirement income is a top concern for many Americans nearing or in retirement. Even though they may have saved consistently throughout the working years, they may be concerned that their retirement plans will succeed. A successful retirement plan provides the ability to maintain your lifestyle for the duration of your life. Having enough retirement income for what you need and want is essential and must be planned for, even in the best economic conditions. A way to provide income safety is by using annuities as an asset class in your retirement portfolio.

Annuities Provide Safety and Income - Annuities help retirees address a specific retirement planning risk- Longevity Risk. Longevity Risk is the risk that a retiree outlives their financial assets. Here are other things to know about annuities:

  • Annuities provide income for life.
  • Due to their safety and growth potential, many portfolios use annuities in the financial services industry as an asset class.
  • Annuities are contractual agreements with an insurance company that provide an investor with a guaranteed income stream during retirement in exchange for a premium.
  • Insurance companies provide products such annuities to help individuals manage their long lives.
Annuities offer tax-deferred growth of earnings, protection of principal, and a guaranteed lifetime income. The three types of annuities widely used in financial planning are fixed annuities, fixed-indexed annuities, and variable annuities. Like any financial product, there are pros and cons to each type, and due diligence in investigating any annuity should take precedence before purchasing one for your retirement portfolio.

Variable Annuities - Tax-deferred growth opportunities, but with the risk of principal loss.

  • Potentially Greater Growth.
  • Provides a guaranteed income for life.
  • No Principal Protection.
  • Market-type returns are based on the asset class in the portfolio.
  • Invests in Mutual Funds (i.e., Sub-Accounts).
  • Tax-deferral benefit for non-qualified investments, not applicable to IRAs, 401(k), TSP, etc.
  • Limited Investment Choices in Comparison to the Universe of Mutual Fund Choices.
  • Fees Can Range from 3% to 5%, or more.
Variable annuities can be expensive and come with many fees, which decreases the accumulation value. Variable annuities are market sensitive and may incur a loss to the investor. Many times, the investor needs to understand this complex product. Working with a financial professional to know if a variable annuity is appropriate for your situation is essential.

Fixed Annuities - Provides growth opportunities with income for life and offers principal protection.

  • Principal Protection - original principal plus all credited interest is guaranteed.
  • Growth - a fixed rate for a declared period.
  • Tax-Deferral - a benefit for non-qualified assets, not applicable to IRA, 401(k), TSP, etc.
  • No Fees on Base Product
  • Provides a Lifetime Income
Before purchasing a fixed annuity, investors should work with their financial professionals and consider the issuing company's rate, terms, ratings, and service levels.

Fixed-Indexed Annuities - Provides growth opportunities with income for life and offers principal protection.

  • Principal Protection - original principal plus all credited interest is guaranteed.
  • Growth - credited interest tied to index performance. Some products offer uncapped strategies—an inflation hedge on the portfolio.
  • Tax-Deferral - a benefit for non-qualified assets, not applicable to IRA, 401(k), TSP, etc.
  • Provides guaranteed income for life.
  • Inflation hedge - growth is designed to increase when prices are appreciating.
Investors should consider the fixed annuity index, participation rates, and service levels of the issuing company before purchasing a fixed-indexed annuity. Both Fixed and Fixed-Indexed Annuities provide an alternative for retirees seeking income other than from traditional staples such as CDs, money market accounts, or bonds. For those seeking income and safety, annuities may be an asset class they may want to consider.     Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. Fixed and Variable annuities are suitable for long-term investing, such as retirement investing.  Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.  Variable annuities are subject to market risk and may lose value. Fixed Indexed Annuities (FIA) are not suitable for all investors. FIAs permit investors to participate in only a stated percentage of an increase in an index (participation rate) and may impose a maximum annual account value percentage increase. FIAs typically do not allow for participation in dividends accumulated on the securities represented by the index. Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Withdrawals prior to 59 ½ may result in an IRS penalty, and surrender charges may apply. Guarantees are based on the claims-paying ability of the issuing insurance company. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. This article was prepared by Fresh Finance. LPL Tracking #1-05367581     Sources: https://www.investopedia.com/investing/overview-of-annuities/ https://www.investor.gov/introduction-investing/investing-basics/investment-products/insurance-products/annuities
Read More

5 Tips for Saving and Investing as a Small-Business Owner

As a business owner, putting all your profits back into the business may be tempting, especially during the lean years. However, when it comes to saving and investing as a business owner, there are other paths you could consider for the long run without so much emphasis on the short term.

Maintain Liquid Assets

Everyone needs to have savings. For small business owners, savings are critical. Liquid assets may help you weather challenging times and make you a more attractive candidate for a loan. When times are tough, cash may help carry you through.

Engage a Financial Professional

You may assume you do not have enough money to make paying a financial professional a worthwhile investment. You may believe you cannot afford one. However, as a small business owner, you may benefit from getting help from a financial professional. A financial professional may help manage your tax burden and your operating expenses, with a focus on cash flow.

Do Not Overinvest in Physical Space and Equipment

It may be tempting to purchase or rent a storefront for your new business. However, it may help to avoid falling into the trap that hurts many business owners—the urge to quickly invest in a brand-new office, buy a company car, or otherwise overcommit to physical overhead as soon as the money starts coming in. By expanding at a more reasonable pace as your business growth demands, you may be able to maintain a more sustainable level of growth.

Avoid Ultra-Risky Stocks

Running a business is a gamble in and of itself, so adding a risky stock portfolio on top of this may expose you to extraordinary risk. Investing in individual stocks may be too risky. Instead, consider index funds that track one of the major market indices that might be less risky. However, be aware that no investment is risk-free.

Plan Your Succession

One frequently overlooked part of a successful small business strategy is having a contingency plan for transferring ownership at the time of your retirement or demise. As a business owner, you should have, at minimum, a last will and testament and life insurance in place. Your will might include instructions to keep things running in your absence (like managing payroll), while life insurance may provide funds for the loved ones you leave behind. A succession plan is a strategy worth pursuing rather than leaving this issue unmanaged.    
Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or insurance product(s) may be appropriate for you, consult your financial professional prior to investing or purchasing. Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. All indexes are unmanaged and cannot be invested into directly. Although index funds are designed to provide investment results that generally correspond to the price and yield performance of their respective underlying indexes, the trusts may not be able to exactly replicate the performance of the indexes because of trust expenses and other factors. Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. This article was prepared by WriterAccess. LPL Tracking #1-05372579
Read More

4 Sandwich Generation Survival Tips

Members of the "sandwich generation"—those taking on the care of their aging parents while also raising children or financially supporting adult children—may feel stressed and overextended. Most current sandwich generation members are Gen X or millennials. Some are still dealing with their student loan debt as they try to help their children navigate college selection and research assisted-living facilities for their parents. Fortunately, there are steps you may take to mitigate these stresses and develop a strong action plan. Here are four tips to help sandwich generation members survive and thrive during this season of life.

Prioritize

No one handles it all alone. One way to manage stress involves focusing on the most important tasks and letting others slide. For example, if you are deciding whether to spend the next two hours mopping your kitchen floor or working on a time-sensitive task for your job, the highest priority is likely to be your job. Other decisions might be more complex. Having a broad idea of what value to place on various categories such as work, marriage, parenting, social obligations, volunteering, and household tasks may help you make prioritized choices.

Delegate and Put Others to Work

As more tasks demand attention, some may need to be dropped, and others delegated. This situation is where prioritization comes in. Being in the sandwich generation means having others—including those you care for—available to help. You may want to delegate certain household chores to your teenagers, ask your spouse to take on responsibilities you have previously handled, or lean on siblings to help with your parents.

Consider an In-Law Suite

Not every adult child wants to share a home with their parents, even in a healthy relationship. However, an in-law suite may be worth considering for many families when minor children and aging parents require care and oversight. With this strategy, you have your entire family under one roof instead of being spread too thin. Having an in-law suite as a separate living space for your parents might lower friction. They may provide extra help when needed—supervising homework, shuttling teens to practice, helping with meals, and taking on other household tasks. You are also close enough to assist your parents when they need help and have the opportunity to be the first to notice when they begin to need a higher level of care.

Hire Help When Necessary

If you struggle to finish your to-do list each day, evaluate what tasks are good for hired help to perform. You may benefit from dog walkers, lawn care workers, and house cleaners. There are meal preparation services, nannies, and drivers. A wide range of workers may take on duties that would otherwise fall to you. The expansion of the app-based gig economy has made it even easier to find reliable workers. Perhaps you want a seasonal deep-cleaning of your home or are looking for a long-term childcare, pickup arrangement. If the budget allows, you might be able to find the help you need.    
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This article was prepared by WriterAccess.
LPL Tracking #1-05370157
Read More

5 Homeowner Estate Planning Tips to Consider

Estate planning helps disperse your assets according to your wishes. The effort may seem daunting at first, but estate planning does not have to be overly complicated. With the proper planning, you may find yourself resting a little easier knowing you have an estate plan in place. While an estate plan is personalized to the wants and needs of each person, here are a few tips to help anyone get started.

1. Create an Inventory of Physical Assets

One of the first steps in creating an estate plan is knowing what you have, so you may list the items to include in the estate. For many people, working from the inside of the home is easiest. Start by assessing the items in your home that are valuable. These valuable items may include collectibles, jewelry, artwork, antiques, electronics, and power tools. This list may take some time to build, so creating it at a comfortable pace over multiple sessions might be appropriate.1

2. Take Stock of Your Non-Physical Assets

You may also need to inventory your non-physical assets. These non-physical assets might include life insurance, long-term care, and health insurance policies. They also may include money sources, such as 401(k)s, IRAs, investments, and bank accounts. You want to include in your inventory the account numbers and documentation for these accounts.1

3. Document Your Obligations

Your debts, such as loans and credit cards, should be itemized with account numbers, contact information, and where you keep your documentation on these debts. This strategy helps ensure that the estate pays off any required debt obligations, which the estate must pay from estate funds.1

4. Consider Transfer-on-Death Assignments

With some assets, it is possible to bypass probate for those items, even if you pass away intestate (without a will), by creating a transfer-on-death designation for those assets. When these transfer documents are on file with certain accounts, the beneficiary might be able to receive the funds without having to wait for the completion of probate. Some of these types of accounts, which may have the option of a transfer-on-death designation, include savings accounts, brokerage accounts, and certificates of deposit (CDs).2

5. Make a Will

Your will serves as the instructions about how you wish to distribute your assets. This document helps ensure that your heirs know what you wish to happen with your estate. Having a will may reduce infighting among heirs. Your will designates who your beneficiaries are and what they get. It may cover custody of minor children and any charitable contributions you wish to make. You need to sign your will in front of witnesses. Be certain that its location is known to the executor of your estate to prevent delays in the will’s execution.2 Estate planning does not have to be a headache. Following these simple tips and taking the time to document your assets properly may make estate planning more manageable.     Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. This article was prepared by WriterAccess. LPL Tracking # 1-05367403

Footnotes

1 Estate Planning: 16 Things to Do Before You Die https://www.investopedia.com/article /10/estate-planning-checklist.asp 2 Estate Planning Basics https://www.forbes.com/advisor/retirement/estate-planning/
Read More