FIC Blog

We believe in – and live by – a philosophy of excellence.

Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.

We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.

Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.

The Continuing Education of an Investment Advisor

Why an Advisor Should be More Than Just “Experienced”

 

Most investment advisors have gone through a number of exams and licensing steps to earn their position. But is that enough? You want an investment advisor who is up-to-date in their industry so they can help you develop an investment strategy that is the best fit for your life.

Licensing exams will test the applicant’s knowledge of basic products and state and federal laws regarding investing. While one would hope a firm would only hire people with appropriate education, not all exams hold them to the same rigor. Regardless of how extensive an advisor’s education has been, it’s important for them to continue on a path toward furthering their education.

One credential you have likely heard about is CERTIFIED FINANCIAL PLANNER™ , or CFP®. These professionals complete education and testing in areas including budgeting, planning for retirement, saving for education, tax planning, estate planning, insurance, and other areas. They are also held to rigorous experience and continuing education standards and are required to act in clients’ best interests in a constantly changing environment.

While credentials are helpful, are they enough to ensure that you’re getting the advice that will help you reach your investment goals? Advisors can also attend national conferences to boost their education and gain new ideas.

One example is Charles Schwab’s annual IMPACT conference, which provides an excellent opportunity for investment advisors to hear from others in their industry and to soak up new insights. The cornerstone of IMPACT is education, and the conference is designed to cover vital topics in an industry that continues to evolve.

Dan Danford, CEO of Family Investment Center, says taking his professionals to IMPACT is an investment in and of itself.  “It’s not cheap to take all our advisors to the IMPACT conference,” Danford said. “This year it was in Chicago, but we’ve gone to Denver, San Diego, Boston, and Washington DC before.”

Despite the travel expenses, Danford said it’s totally worth the investment because the value is in what they learn.

“There are thousands of advisors there,” Danford began, “dozens of educational sessions and top-rated keynote speakers. Most of all, we learn how others are doing what we do for clients. We see new products, new software, new service models, even new competitors. Most of all, we hone our craft. Because being better each day is one powerful key to helping others.”

At Family Investment Center, we’re constantly expanding our knowledge of the investment industry so we can better serve our clients. Regardless of your level of expertise in investments, we can help you meet your goals. Contact us today and let’s talk about what your money can do for you.

 

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America’s Favorite Pastime and Your Investment Portfolio

How Baseball Can Help You Know How to Approach Your Investment Portfolio

 

Warren Buffet, the “Oracle of Omaha,” has a reputation for being a great admirer of America’s pastime – baseball. So when he gives out investment advice, he likes to use a few baseball analogies. As baseball season is in full “swing,” take a look at some of these baseball parallels as they serve as a reminder of how to approach your investment portfolio.

“What’s nice about investing is that you don’t have to swing at pitches,” says Buffet. This is a good rule to follow, as many pitches offered by those who are selling products might often come with too much risk attached, and little to no insight into those risks. Buffet advises that investors only swing at the pitches that are right for them.

Buffet also says that in baseball, when one wants to score runs, they have to watch the playing field, not the scoreboard. He is a consummate student of what’s going on around him and only jumps at investments that have a long history of stable earnings. Investors who are planning their strategy would be wise to do the same – think long term and for the future, not of long shots meant to achieve short-term gains.

The Financial Post also jumped on the baseball analogy bandwagon, offering up the idea that a really strong baseball team will be proficient in pitching and batting, and they’ll have speed, excellent defense and a winning culture in the clubhouse. However, rarely are all of these components firing at the same time.

The same is true of a strong investment portfolio – you’ll have your money spread across many different products, from stocks to bonds and other investments. They all have different levels of risk, but while one is performing poorly, others may be bolstering the bottom line.

The New York Yankees have been notorious for paying big money for players who are no longer worth the large contract? The same could be said of investments people make on products that were once starlets, but have their good days behind them. The best scenario is to acquire them while they are on the rise but still at a low price.

Smart baseball managers won’t hold on to an under-performing player just because they overpaid for him. Similarly, smart investors won’t hold on to an investment just because they overpaid for it. Eat the mistake, learn from it and move on so your investment portfolio has a chance to grow.

Playing baseball at a high altitude is different from playing ball at sea level. The air is thin, which means batters can really let it fly. That’s why Denver’s team looks for batters who can consistently get the ball in the air. They also look for pitchers who can keep the ball low so as not to allow their competition to hit fly balls. They plan for their environment, which is what investors should do.

Every environment is different, which is why every investment portfolio has to account for these differences. When you talk to your investment advisor, they will look at your individual goals, your financial situation, and help you make the right choices to help you reach your goals.

We’re baseball fans at Family Investment Center, but we’re also huge advocates for smart investing. Let us assist you in building a strong investment portfolio for you. Contact us today and let’s talk about how we can improve your situation.

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Retirement Planning Means Having a “Financial Purpose”

How Establishing Goals Can Improve Your Retirement Planning Strategies

 

Retirement planning should really be about planning with a purpose in mind. Many people avoid this crucial planning stage because the numbers confuse them and the whole process may seem daunting. However, money is more than a number; when you attach a goal to it, the planning process become less confusing.

Rather than thinking about dollars, try thinking about what you want your wealth to do for you in retirement. And remember – your goals will probably change, even in your golden years, which means you have to be flexible in your planning.

In fact, a recent Kiplinger article titled “To Make a Financial Plan, You Need a Financial Purpose” reminds readers of key questions to ask now, and to revisit often. As you embark on retirement planning goals, keep the following questions in mind:

·         Which relationships are important enough that you will be willing to provide (financially) for them?

·         Do you have health concerns?

·         What lifestyle do you envision in retirement?

·         What is your idea of a happy and healthy retirement?

·         What hobbies would you like to pursue in retirement?


Answering these questions will help you round out more concrete ideas of what your future will look like and also give you an idea of how much money you will need in retirement. Here are some other questions to explore:

What will you do in retirement? Everyone has different ideas about that, which is why every plan has to be just as unique. For instance, do you plan to continue working part time into your 70s? If the answer is yes, your planning will differ from the person who plans to never work again after the day they retire. Do you want to travel extensively or just stay local and enjoy your family and friends? Again, the traveler will have to make extra room in their budget for the expense of traveling.

When will you quit your career? Do you have a set date that you’ve been looking forward to for years, or are you going to step down when you have saved enough money to retire and have enough for the goals you’ve set for yourself during those years?

 

Where you plan to retire will also have an impact in how you plan your investments. Are you planning to downsize your current living situation or upgrade to something less modest? Maybe you want to move to a different city in a different state or live with nearby family. The way you answer the question of “where” will also change how you approach your investments.

Getting an objective viewpoint from a qualified professional can go a long way in making the decisions that will put you on the road to reaching your goals. An investment advisor has the expertise to help you invest money in a way that is as unique as your goals. However, be sure to seek out the assistance of a fiduciary. When your investment advisor operates as a fiduciary, they will work for your best interests, not theirs. Instead of pushing products that pay them a commission, a fiduciary will only make recommendations that match your goals.

At Family Investment Center, we’ve looked out for our clients’ best interests since day one. We’ll listen to your plans for retirement and help you choose investments that provide you with confidence toward your future.

 

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What is the Outlook on 401(k) Investing in America?

401(k) Investing is a Valuable Tool, Yet Underutilized

 

One of the most widely overlooked investment vehicles today is the 401(k). Surprisingly, two-thirds of all Americans don’t contribute at all in a 401(k) or other retirement account available through their workplace, and that number could shift even more if Congress stops auto-enrollment. 401(k) investing is a remarkable tool, yet often overlooked as an important part of planning for retirement.

According to tax records gathered during the most recent U.S. census, only 14 percent of employers offer a company-sponsored 401(k) plan. However, the majority of Americans work for larger companies which do offer these plans. Ben Steverman covers this topic in a Bloomberg article this year, saying bigger companies are the most likely candidates for offering a 401(k) plan and around 79 percent of Americans work for large companies.

“Four out of five workers are employed by companies that offer a 401(k) or similar plan, but many workers aren’t using them - either because they’re not eligible or because they aren’t signing up,” Steverman says.

These workplace plans create an environment where employees can build up their investments on a tax-advantaged basis. Unfortunately, too many Americans feel that it’s not worth the effort to get involved, probably because in order to get the most out of the plan, the money is tied up for a span of time and a penalty is assessed if the employee withdraws from it early.

Another possible reason for why so many workers aren’t getting involved in 401(k) investing is because they’re not willing to send incremental dollars to a long-term retirement plan, especially those who earn low wages.

People who change jobs often or who work part-time are also less likely to be eligible to participate in a workplace retirement plan. Many companies require employees to work for months or a year before they become eligible to participate in a plan, thus complicating the issue further.

Making investment decisions is difficult for many people. They’re intimidated by the choices that have to be made, so they don’t make any choices. Also, the cost of many plans can be high, which has been widely scrutinized in the media, drawing even more negative feelings out of workers, further complicating their savings plans.

Many companies that offer a 401(k) plan will automatically enroll their workers, as it costs the worker nothing. However, Wall Street believes this practice creates an unfair advantage against the products they sell. Unfortunately, Wall Street has the ear of many lawmakers in the Capitol, which is why there is a real threat that auto-enrollment could be wiped out.

At Family Investment Center, we can assist you in overcoming any fear, intimidation, or trepidation about investing your hard-earned money. Contact us today and let’s discuss your financial goals and how to accomplish them.

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Do You Need Investment Advice for a Tax Refund? (Or Any Windfall?)

Investment Advice for Making the Most of Your Tax Refund

 

You’ve likely already received a nice refund on your tax return. If you’re like most people, your wheels have started turning. Do you add a few days onto your summer vacation or finally splurge on that new furniture you’ve been eyeing? Few want to consider investment advice that starts with not spending your entire refund, but you may find that you’re happier in the long run investing into a solid retirement fund.

 

There’s more than one way to invest, though, and it is important to carefully think about your options before you plan your strategy for handling a small windfall that comes in the form of a tax refund.

 

Why would you want to think about investing some of your refund, rather than spending it all on entertainment, luxury items or home improvement? The average refund enjoyed by Americans is $3,000, an amount that may seem perfect for a good, guilt-free splurge. It’s sizable, but not life-changing, so it may be easy to justify buying yourself a treat.

 

However, with the average rate of return that the stock market delivers, you could potentially turn $3,000 into $50,000 in 30 years because investment growth and compounding interest.

 

You could choose from an index, like the S&P 500 or the Dow, but you can also invest in a mix of blue-chip stocks and enjoy solid returns over the course of your investment time. What matters most, of course, is that you don’t go out and spend all of your refund, but invest a portion instead.

 

At Family Investment Center, Dan Danford, CEO, has a three-part strategy for making the most of your tax refund, or any other small fortune that comes your way. Take a look at these steps for what could be a more satisfying approach to tax refunds:

 

Blow it: Whether it’s a weekend trip or a great pair of shoes, you should get to spend part of your refund on something that improves your quality of life. Making memories and enjoying a treat are great ways to invest in your satisfaction. Danford believes that many financial plans fail simply because they fail to include some joy and some fun into the mix.

 

Mow it: Part of your refund should go to maintenance that protects your investments, such as your home or your car. Maybe you have a leaky roof or a fence that needs repaired, or maybe you need to upgrade to a vehicle that is more reliable. These are also important ways to spend your money and are a good option for a portion of your refund.

 

Grow it: Take part of your refund and invest it in your retirement savings or a college fund. Even a small amount invested will multiply over time and can yield impressive growth. Don’t limit your investments to traditional accounts, though. Danford suggests that taxpayers receiving a refund also consider investments that could further their career, like a college class, or experiences that might widen their horizons.

 

A balanced approach to investing is always best, and we believe that you’ll have the most satisfying results if you get to enjoy spending some of your money and enjoy watching some of it multiply over time. Make an appointment with us today at Family Investment Center. We welcome you to enjoy jargon-free but experience-based conversation around our table.

 

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The DIY Investing Mistake: Are You Relying on “Vacuum Investing” or “Soapbox Time?”

Dan Danford Explains 5 Surprising Investing Myths in “Money is Freedom” Podcast Episode

 

Much of our financial knowledge comes from trusted sources – friends, coworkers, colleagues, family members. But a lot of this information requires a serious update. In fact, it may be holding you back from the success you want.

Today, ask yourself this:  Are you believing the five common myths (mistakes) about DIY money management? These mistakes include relying on the “special knowledge trap,” “soapbox time” and “vacuum investing.”

Listen to this brief, jargon-free and value-packed podcast today. It might change your thoughts on DIY investing, and, more importantly, it might change your future.
 

Listen to the “DIY Mistake” here on Sound Cloud:
https://soundcloud.com/money-is-freedom/the-do-it-yourself-mistake

Listen to Dan Danford on “Money is Freedom” on iTunes.

 

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Investing for Women: More Female Millionaires Working With Advisors

Recent Numbers on Investing for Women Show Increasing “Clout”

 

investing for womenThe numbers of male clients to female clients at investment firms began to even out during 2016, says a recent CNBC article. Why? Because the number of women who have reached millionaire status is also climbing. In fact, it’s believed that in the next 13 to 15 years, as much as 66 percent of wealth in the U.S. will be owned by women.  How do these numbers affect investing for women?

According to the article titled “For Women, Retirement Can Be a Serious Challenge,” wealthy women are emerging now in stronger numbers. Approximately 45 percent of millionaires in the U.S. are female, says the article. During the next 14 to 15 years, females will be responsible for at least 66 percent of the country’s wealth. As a reflection of these numbers, it’s no surprise that women are currently the chief money makers in nearly half of U.S. households.

What’s the Challenge?
The numbers are encouraging, yet unique challenges remain for women in investing. As of 2015, women earned roughly 80 percent of what men were paid. This means when retirement comes around, women will draw less in Social Security benefits.

Many women choose to shift focus away from their careers during top-earning years to turn more attention to raising children, meaning less money goes into their retirement accounts. Some work part-time for a season to raise their families, which often makes them ineligible for employer-sponsored  retirement programs.

In addition, with 63 million women earning wages today, only 45 percent are enrolled in retirement savings accounts. Of those that are enrolled, they average 50 percent less in their accounts than their male counterparts.

Another challenge, say experts, is that women who reach the age of 65 will live, on average, another 20.5 years. This means many of them will need more money in their retirement accounts than anticipated to live comfortably. Ultimately, too many women may be underfunded in their retirement accounts.

Addressing the Challenges
Investments can be a challenge, even for those who consider studying financial and investment news an enjoyable hobby. That’s why bringing an advisor into the plan can create a number of advantages.

An advisor can put together a plan considering all your information, including your insurance policies, your tax returns and banking records, information about mortgages and loans and all the investment records on your retirement accounts. Your advisor will help you create a strategy, which includes prioritizing expenses in categories such as wants and needs. This will help you devise a savings plan that matches your goals for retirement.

If debt is a concern, an advisor can assist you here as well. You might be surprised to learn that some debt can actually be used as leverage to increase your success. Contrary to some popular thought, not all debt is a hindrance to reaching your goals.

One of the most important things a good investment advisor will do is help you establish your goals and an investment plan that will help you reach those goals – despite media headlines, emotions and market shifts.

A final note:  When you look for an advisor, find one that operates as a fiduciary. When you partner with a fiduciary, you have an advisor that puts your interests first. Also, a “fee-only” advisor will never take a commission on an investment they recommend. This is how Family Investment Center has operated from the start. Contact us today and find out more about what makes us so unique.

 

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Keeping an Eye on Fees in Portfolio Management

Do You Know What to Look for in Portfolio Management Fees?

 

portfolio managementThe Beatles said in their hit song, “Money,” that the “best things in life are free,” and they definitely have a point. However, when it comes to managing your money, paying fees to a portfolio management professional can help that money grow, and it’s certainly worth it.

However, due to industry complexities and varying degrees of customer “service,” investment management fees can often be obscure. This can lead to mistrust and poor decisions on behalf of the investors. While the most trustworthy investment advisors use fee structures that are completely transparent, following the tips in a “fee triangle” can assist you in understanding exactly what you’re paying for.

Don't be the victim of unfair or elevated pricing schemes. You can avoid this by shining the light in the right places.

Layer 1
The first layer of fees is often tied to local investment management fees. This is usually a percentage of the portfolio size, AKA assets under management or AUM. Your investment advisor, broker, bank, or trust company or department will charge this first layer of fees.

Layer 2
Portfolio manager fees are the second layer, and although they’re the most common, they’re often less obvious. These are fees that the underlying managers of the mutual funds, hedge funds, exchange traded funds, unit trusts, REITs and other managed products charge to manage the fund. It’s how the manager of the underlying investment is paid.  Although it’s difficult to rid your portfolio of these altogether (unless you buy only individual stocks), your advisor should aim to find investments that minimize your expenses while maximizing your investment potential.  

Layer 3
Transaction fees are the most insidious of all these fees, which are often hidden from you in trades. For instance, if you buy a thousand shares of stock, a trade fee or commission may be paid on that trade, which should be reported on a trade confirmation. However, you may not see it if your custodian reports the trade at “net” prices. Even scarier is that there is often a huge disparity among the level of transaction fees that are charged to clients.

Not all investment portfolios will include all three fees. Some might only have one or two. A stockbroker might have a recommendation for you, and if you follow through on that, they will take their payment through a commission. If a mutual fund is recommended, there could be a sales commission involved, as well as ongoing portfolio manager fees, which means you could be getting hit with all three layers of fees.

Remember - it’s the total fees that matter to performance, not the particular fee scheme. Investment performance should be tied to broad market averages, not individual stocks and bonds. There are too many instances out there today where investors are getting hammered by layered fees, most often in the hidden fees.

At Family Investment Center, we remain totally transparent about our fee structure and communicate it clearly. We never take a commission – the only way we get paid is through a percentage of assets under management. That way, there’s a direct incentive for us to keep clients’ expenses low and their balances growing over time. We follow core investment principles and practices that go above and beyond the definition of a fiduciary. Contact us today and let’s discuss how we approach portfolio management differently.

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Are There Really Rules for Building Smart Investment Strategies?

Focusing on Investment Strategies

Feel like it’s too late to start on your investment future? Think again. There’s no hard and fast rule set on exactly when to start or build up your investment strategies.  Although getting an earlier start reaps better results over the long term, it’s not too late to start.


Do you need to move past a feeling of intimidation? Compare it to this analogy: do you need to know how to build a car in order to drive it? To combat intimidation, remember there is nothing wrong with taking interest in how investments work, but you can leave the expertise to your investment advisor, a person who has the experience and knowledge to help you develop a goal-focused and personalized investment strategy.

Smart investment strategies are those that work for you personally, not for your friends, family, and associates. Unfortunately, too many investors get caught up in the advice they get from these individuals, all of whom are well meaning, but want to pass off investment advice that worked for them. It’s okay to listen and learn, but don’t be swayed by strategies meant for a person in a completely different situation.

Many decisions are based on emotion, but investment decisions based on emotion can be financially detrimental. Additionally, when you bring other peoples’ emotions into the equation, it quickly can turn into a poor decision for your financial future. Reacting to these heightened emotional situations usually results in actions that can negatively affect your finances. Instead, consider maintaining a calm, “big-picture” focus.

According to Dan Danford, CEO of Family Investment Center, there are some rules to follow regarding investment strategies that will help you fight drama and stick to a long-term plan (of course, these can vary person-to-person, so be sure to speak with an advisor regarding specifics):

·         Don’t quickly respond financially to political or economic news

·         Use payroll deductions for savings and retirement accounts

·         Use mutual funds or exchange-traded funds (ETFs)

·         Gauge performance at five-year (or longer) intervals

·         Benchmark at broad market averages

·         Performance only matters in reference to similar investments

·         Increase your savings amount every year


In conclusion, Danford said one of the biggest flaws he sees with do-it-yourself investing is that people don’t set aside enough time for personal finance issues.

“Reading The Wall Street Journal once a week or visiting for five minutes on the phone with your broker isn’t enough,” he says. “If you want to do it right, dedicate one full evening a week or a few hours each weekend. If you can’t do that, then you need professional help.”

Professional advice is good idea for any investment strategy. Find a good fiduciary advisor, like those at Family Investment Center, who can listen to your ideas and concerns and help you move toward a clear plan in a commission-free environment. (In fact, this is our sole focus, every day.) Come find out why we’re a little bit different when it comes to investments … and why our clients like it that way.

 

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Is the Middle Class Listening to the Wrong Investment Advice?

Investment Advice for the Middle Class

 

If you are like most middle class investors, it may seem as if there are a million things that separate you from millionaires. In reality, the way the middle class and the wealthy handle investments can be quite similar; investment advice can be founded on the same principles – and the same misperceptions.


One misperception about wealthy investors is that they are geniuses when it comes to the stock market. Some investors believe they “play” the market every day and take great risks, but enjoy massive rewards. Typically, this isn’t true on many levels. Most experts agree, not many successful investors “play” the stock market. Instead, they focus on consistency over time and planned risk. Additionally, less than one percent of millionaires make daily trades on the market. Instead, they’re likely doing what you might consider for your own investments – thinking long-term and owning a variety of investments for the purpose of diversification.

In fact, the heart of wealth management science, according to Dan Danford, CEO of Family Investment Center, “is the idea of a thoughtful long-term diversification. This scientific basis for portfolio theory won a 1990 Nobel Prize in Economics.” Danford explains that, in essence, an investor’s risk is reduced and performance of investments is enhanced when investors own a wide variety of investments.

If you’re getting investment advice from friends, family, or colleagues telling you that you should put your money in government bonds and bank deposits, this may not align with the strategies of professionals who work with both the wealthy and the middle class. Putting your money in these “safe” places offers low interest rates, but if you consider inflation and taxes, your investment there is nothing more than a shelter where compound interest doesn’t stand a chance.

Wealthy investors seem to understand the difference between price and value. Dr. Tom Stanley’s book titled The Millionaire Mind brings up an issue that many investors fall victim to: they don’t make enough distinctions between price and value. Millionaires tend to look at investment products through the lens of a long-term situation. For instance, Stanley offers up the analogy that they’re purchasing their furniture and shoes based on the lifetime cost of ownership. Are they buying better quality products? Yes. But they last longer than the cheap stuff. When you put yourself in that mindset for your investments, you’re on the right path.

Finally, if you’re a DIYer when it comes to your investments, rethink what your efforts are actually getting you. You might spend hours studying various investments, shopping around to find something that is only marginally better than the previous product you researched. Let an investment advisor who has experience working with a variety of investments help guide you with your investing strategy.

At Family Investment Center, we believe in practical, jargon-free and client-focused service – and always within a commission-free environment. Contact us today to learn more.

 

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401(k) Investing: What’s New in 2017

How Will 401(k) Investing Change in the New Year?

 

The 401(k) plan is among the strongest investment tools for many working Americans, especially those whose employer does not offer a pension plan, but will match contributions (up to a specific percent) to the company-sponsored 401(k). When you invest in a 401(k), which utilizes the stock market and other products, you are investing for your future. It’s important to stay informed of the rules that govern your 401(k) investing as they change each year.

The IRS limits your 401(k) contribution and those limits are subject to change annually. The company you work for also limits how much they match on the amount you contribute. The current IRS limit on employee elective deferrals is $18,000. This will continue into 2017, but keep your eyes on 2018 as that deferral amount could go up.

For those of you who are 50 or over, you can make what the IRS refers to as “catch-up” contributions, which allow you to put an extra $6,000 a year into your traditional and safe harbor 401(k) investing plans, or $3,000 extra into your SIMPLE 401(k) plan. When the IRS makes changes to these catch-up contribution limits, it’s generally tied to a cost-of-living adjustment.

Another change impacting a number of people relates to 2017 IRA income limits.  Employees who have a 401(k) account through their work can make tax-deductible contributions to a traditional IRA. For example, employees earning up to $62,000 a year are allowed to deduct from income tax IRA contributions of up to $5,500. Unfortunately, if you earn between $62,000 and $72,000 (in 2017), that  phases out.

Workers making less than $118,000 can make Roth IRA contributions in 2017, which allows for tax-free withdrawals in retirement. Roth contribution limits phase out for those making $118,000 to $133,000 (in 2017).

It can be challenging to keep tabs on all the rules, regulations, perks, and privileges available to you in your retirement plan investing. This is why it is important to include a professional advisor to keep you informed on the decisions that impact your investments. At Family Investment Center, we’re ready to assist you in these important decisions and more. Contact us today and see why our commission-free environment remains the investment “home” of so many families and individuals.

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Planning for Retirement: Small Business Owners Face Unique Challenges

Survey Says Few Small Business Owners are Planning Adequately

 

Small business owners are seemingly tireless entrepreneurs when it comes to building and maintaining a business, but they often forget to plan for their exit strategy. A survey by BMO Wealth Management confirms that startlingly few small business owners are planning for retirement adequately.

The survey by BMO found that 75 percent of the owners between ages 18 and 64 had not saved more than $100,000 for retirement. The good news is that nearly 40 percent of business owners age 45 to 64 had at least started an IRA and nearly 30 percent had established a 401(k). For many entrepreneurs and small business owners, their way of planning for retirement is to invest in their business and sell it when the time is right. Essentially, the business becomes their retirement plan.

In some cases, the business owner will wish to keep the business alive. Therefore, they transfer ownership to a family member and get a share of the future wealth in return, which helps to support their retirement. Unfortunately, this doesn’t always work out as planned. Different management methods, a jarring transition between owners, and/or the unpredictability of the market can wreak havoc on a business, potentially leaving the retiree with little or nothing for their retirement.

A number of business owners will say that if their planning for retirement hits any snags, they’ll simply delay retirement. While this seems like a fair way to approach retirement, plans made while relatively young and healthy can turn quite suddenly as we age and our health begins to fail. For example, a survey by the Employee Benefit Research Institute reveals that nearly 55 percent of people surveyed said they retired earlier than expected due to health issues.

What steps can you take in planning for retirement that can help protect your investments?

·         Diversify: Putting a set amount of money per month in a variety of investments is a smart move because you’re spreading out your wealth in several directions. As the market ebbs and flows, you’ll see the advantages of a diversified portfolio. Talk to your investment advisor about popular options, like an IRA or 401(k).

·         Specialize: Ask your investment advisor about retirement plans that are specifically for small businesses. For instance, a SEP-IRA, solo 401(k), or SIMPLE IRA.

·         Know What You Need: How many of your current expenses are lumped into your business dealings? You’re won’t have that luxury when you retire, so crunch the numbers to get an accurate estimate of what you’ll need on a monthly basis when you retire.


If you’re like most small business owners, you have few hours in the day to research retirement vehicles on your own. Talk to a fee-only professional advisor like our team at Family Investment Center. Since our founding, we’ve maintained a client-first, client-focused philosophy. Today, we welcome you at our table to learn more about what makes us truly unique among investment advisor teams.

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With the Inauguration Pending, What are Your Investing Strategies Now?

Investing Strategies in a Time of Uncertainty

 

The election is officially over and inauguration is just weeks away. Many Americans were surprised at the results as our nation begins a journey with a controversial president. Many investors are beginning to take a second or third look at their investing strategies and preparing for this change.

Actually, many investment professionals may share the viewpoint to stay the course and not change investment portfolios in any drastic way. Refraining from reacting impulsively — while maintaining a focus on your long-term retirement investment plan — may help lead you toward new confidence as presidential changes officially unfold.  Note: While analysts seemed wrong about the predicted election outcome, U.S. economic strength was actually improving leading up to the vote.  Policies and changes to come, say some analysts, could actually lead to even more economic growth. If this trend continues into 2017, investment options could improve and market levels could return to “typical.”

It’s also important to realize that it’s not unusual for emotions to run high as markets move. Most investors won’t need to access the money they have in investments for at least a decade, which means even if market volatility affects your balances, there is plenty of time for a rebound. Besides, experts have noted that other economic factors remain strong and will carry most investors through the volatility.

If you are nearing your projected retirement date and want to make some changes, ask a professional commission-free investment advisor for help. If you haven’t yet talked to an investment advisor, now is the time. Talking with your advisor about your plan is a great way to review your situation, make adjustments as needed and regain some of that confidence you had before election night.

Historically, when considering long-term investing strategies, the stock market has demonstrated success as a way to build up a nest egg. The ebb and flow of the market is less dramatic when you look at its movement over decades. Even during recessions, such as 2008, the market historically has recovered.

At Family Investment Center, we offer a consistent, commission-free and jargon-free atmosphere for addressing all of your questions and concerns. Contact us today and find out why our team has been interviewed by sources like The Wall Street Journal, Forbes andU.S. News and World Report for our slightly “unconventional” approach.

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Who Are You Taking Investment Advice From?

Experts Suggest Investment Advice May be Best Left to the Professionals

 

Most people who invest money and are purposeful about their retirement plans believe they have the basics of investing down. They may even consult with well-meaning friends and family when they are seeking outside guidance. However, some of the most common mistakes in investing may be related to taking investment advice from someone other than a professional – along with not keeping up with investing innovations and relying on outdated information. Read on for some other challenges that may be holding you back from the success you want.

Some investing mistakes date back to early family experiences. Ideas about money are often shaped by what a person saw and heard growing up. In reality, what many people are taught growing up is very different now as the landscape of investing has changed, particularly in the financial products, services and fees under which investors operate today. These family experiences may mean an investor follows and seeks advice from friends, neighbors, coworkers and family members; but these people are not likely to carry professional investment experience. Seeking advice this way can also lead to a strong emotional connection instead of a neutral, strategic approach to investing – and this can cost an investor significantly over time.

Another common investing mistake can be connected to changing an investment strategy when feelings or emotions change. Today, you may want to ask yourself, “Is my investing driven by feelings and emotions?” This can manifest from watching media headlines and wanting to make quick changes rather than staying the course through the natural ups and downs of the markets.  

It’s human nature to follow the crowd. However, when it comes to investments, giving in to that urge to follow the crowd can lead to investment setbacks. Everyone’s situation is different. What amounts to an excellent decision for one person might be a wrong move for the next, depending on life situations and goals. Most investors with long-term success are operating on a consistent plan that is tailored to their situation, not everyone else’s. Also note that many professional investment advisors suggest caution around making decisions for short-term gains in favor of long-term growth. It’s vitally important to stick to a long-term plan, even and perhaps especially during times when the market is volatile.

Performance is an easy metric to measure, but it’s not the one that matters most. Value and convenience, both of which are metrics more subjective and harder to measure than performance, carry just as much weight as pure performance.

Some people fail to reach success because they think the investments are boring. Investment advisors reject that notion; they see investing as a path to key lifestyle benefits that are definitely not boring. They also know that it’s one of the biggest reasons people fail – or a reason they never get started. A visit to an investment advisor who truly cares about helping clients should not be boring, but instead, should help you feel excited and confident about the direction you’re headed.

At Family Investment Center, we have observed investors time and time again come in with reservations and leave with a sense of confidence they didn’t know they could have toward their long-term goals for investing. We know that many people have an outdated view of money practices, and we are here to listen. Contact us today and let’s get started with a plan that makes sense for your situation.

 

Listen to jargon-free insights from the Money is Freedom podcast, produced by Dan Danford, founder/CEO of Family Investment Center, at Sound Cloud and iTunes. Enjoy more about advice from friends and family on the episode titled “Free Advice is Poor Advice.” https://soundcloud.com/money-is-freedom/102-free-advice

 

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Changes Are Coming … What Should You Know?

As the U.S. Department of Labor fiduciary rule moves closer into the spotlight, more investment firms are making changes to shift their service to a “nonconflicted” setting – meaning they will no longer charge commissions on products they sell to investors.

 

A few months prior to the Department of Labor rule, the White House released their own report outlining the millions of dollars in lost potential revenues investors could see if they receive conflicted advice in a commission-based setting. By the start of 2018, financial brokers who sell retirement products must become "fiduciaries" and act in clients' best interests, instead of choosing products that line brokers' own pockets. Some national entities are putting changes into place, now.

 

Recent headlines have outlined challenges with this process. What should you know?
 

1) Family Investment Center has always – and will always – operate in a commission-free, client-focused and nonconflicted setting. It’s how we have always believed your interests as an investor are best served. These changes nationwide mean business as usual for us.


2) Some firms will begin to use terms like “nonconflicted” and fee-only as they make the shift over to these models … but this doesn’t mean they have a genuine client-focused perspective.


3) National responses to the fiduciary rule will be varied. LPL Financial Holdings Inc., the largest independent broker dealerand registered investment advisor in the UnitedStates, is exploring a potential sale – according to an articlein Financial Advisor – as it lowers commissions on high-feeinvestment offerings and looks at higher regulatory costs. Inanother example, Merrill Lynch is among the first to institutechanges and stop its commission for its IRA business. This could trigger brokers who rely on commissions to go elsewhere – as well as push a surge of other giant firms to do the same.

 

We welcome any discussion or questions as the biggest shift in the investment industry has seen in decades begins to take shape … and we’re proud to say we’ve been helping families reach their goals in a nonconflicted setting since the first day we opened our doors.

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How Are You Approaching Your Investment Strategies as 2016 Draws to a Close?

Investment Strategies for the Year’s End

 

We’re in the final quarter of 2016. That means it’s time to start looking at your investments as the year winds down and where you are in meeting your retirement goals. Here are some top things you need to look at:

Put your investments back into balance. Different types of investments will perform differently over time. Diversification of investments is key, but even the most diverse portfolios will have products that do better or worse than anticipated. To reach your original intended asset allocation, you may need to rebalance.

If you monitor your asset classes, you’ll find that in any given year, their returns could knock your portfolio out of balance. For instance, let’s say you want your portfolio to include 20 percent of your assets in real estate and commodities, 30 percent in bonds, and 50 percent in stocks. By now, your investments have been in place long enough that the economy could have shifted those percentages drastically. Now may be a good time to make changes and adjust them to help you meet your goals.

Has your W-4 been reviewed lately? If you’ve had major life changes this year, it’s a good idea to take another look at your W-4. For instance, as you age, your tax situation will change. Or, perhaps you’ve had children who have grown and left the nest – this will need to be reflected in your dependents status. Maybe you’ve re- married, which will also need to be updated. When you make these changes, you can free up more money for investments like your 401(k) and your IRAs. It’s all about compound interest, and even a year’s worth of investments can make a difference.

We know it’s not wise to make investments decisions under duress. However, when the stock market is volatile, risk becomes a factor worth investigating. Some investors will protect themselves with larger cash allocations, which can be beneficial because this gives you something to work with if the market performs strongly. 

Are you maximizing your contributions? Workingtoward maxing out right now is a good idea, especially if it’s a deductible retirement plan contribution. It can help reduce current taxable income, which reduces the associated income tax come April.

At Family Investment Center, we can help you maintain confidence (and joy) as 2016 draws to a close. Why not make today the day? Contact us and let’s talk.

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Family Investment Center: Not Just Another Start-Up Story

If you think you’ve heard every investment advisor start-up story, think again. The story of Family Investment Center reflects a passion to be true to their core values and remain steadfast in a client-first approach (even when no one else was doing it).

 

Dan Danford, founder of Family Investment Center, had 15 years’ experience as a bank trust officer before striking out on his own, establishing Family Investment Center in 1998, just in time for a big technology boom. He had a “million dollar idea” to marry the safety of fiduciary investing with the benefits of a client-focused, commission-free atmosphere and the perks of a tech-friendly world. Nearly 20 years later, Danford and his team continue to bring investment services that cater to each individual client.

Danford’s solid background working with investments coupled with his desire to avoid the sales-driven mentality – a driver for many professionals in the investment field today – brought him to an important question: “What do I need to prosper?”  It’s that question that drove a philosophical change from seller to buyer, and it “rocked our marketplace,” Danford said.

He began working for clients under a textbook approach to investing and analyzing portfolios. Ultimately, what he lays in front of clients is a plan that they would devise if they knew as much about investing as Danford does. In fact, it’s a plan that he uses for his own family’s investments.

Here are the five key concepts applied by the Family Investment Center team to each individual:

·         World class managers and products

·         Total transparency at every level

·         Portfolios that are tailored to fit individual needs

·         Deliberate diversification

·         Ongoing monitoring and evaluation


At Family Investment Center, commissions have never been accepted (and never will be) for any investment product. The only source of revenue is a modest management fee charged to clients. Another key difference is jargon-free conversations. The Family Investment Center team of professionals are competent, confident, have excellent communication skills and make clients comfortable talking about their ideas.

The families that partner with Family Investment Center enjoy extra safety measures, including custodial, professional liability, and employee dishonesty insurance, plus ERISA bonding. Family fee schedules are scaled for large portfolios, and the investment products selected are already scaled for large portfolios as well.

 

Family Investment Center has always believed that investing really isn’t about the money itself - but rather how a person can share that wealth with those they love. Even so, it’s a team where investment advice offered comes from a place of logic – not emotion - which is crucial to succeeding in the investment space.

Find out all the reasons Family Investment Center maintains a unique approach - and why the team is interviewed by sources like the Wall Street Journal, U.S. News and World Report, Forbes, and many others. Visit www.familyinvestmentcenter.com today - or listen to the podcast “Money is Freedom” at Sound Cloud and iTunes.

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Insights Into 401(k) Investing in 2016

Make the Most of Your 401(k) Investing Opportunities

 

If you are like the majority of investors investing through a 401(k), you are doing so through your employer’s sponsored plan. The recent T. Rowe Price benchmarking report can help you can gain some insights into practices that other 401(k) investors have used to make the most of their 401(k) investment options. We want to highlight a few of those findings.

 

1.   Sign up. (Yes, it’s simple, but some people don’t). One of the practices many respondents said they take advantage of is auto-enrollment. This has been on the increase over the last few years, and it’s a benefit to the employee who might otherwise choose not to enroll and forfeit the company’s matching donations.
 

2.  Put more money in. Raising your contribution rate can make a big impact. The maximum amount you can contribute per year is $18,000. However, if you’re 50 or older, you can invest a maximum of $24,000. Meeting that maximum amount every year can help you enjoy more freedom in retirement. However, the report from T. Rowe Price also shows that many people are saving too little or nothing at all. In fact, the average deferral rate is around seven percent, which is less than half the 15 percent that many experts recommend. More alarming is the fact that roughly a third of workers are putting nothing into their company’s 401(k) investing program.
 

3.  Don’t say “next year I will” or “when I pay down my debt.”Many responded to the survey that they have too many outstanding debts to put money towards retirement. In waiting to invest until later, though, you will lose out on the benefits of compound interest and risk the possibility of not having enough saved for your retirement. Taking a hard look at expenditures will often reveal money that could be going to your retirement.
 

4.  Don’t let yourself become overly perplexed at natural market ebb and flow. Despite market changes, many successful people maintain a simple, consistent approach and don’t let their emotions get too much attention. They also work with a professional investment advisor so they can set aside fears and move forward with confidence.

 

At Family Investment Center, we know each person has their unique investment challenges and goals. If you’re part of that one-third of workers who are putting off investing for retirement, or setting aside too little, we can assist you in building a strategy that will set you on the right path toward the freedom you want. Our investment advisors have experience working with individuals and families of all ages. Plus, we don’t use complex jargon and we have always been – and will always be – commission free and client-focused. Let’s talk.

 

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Family Investment Center CEO Launches Podcast

Danford’s Free Podcast Offers Expert Investment Advice

 

“Money is Freedom” is a new podcast series by Dan Danford, CEO of Family Investment Center. The latest podcast in his series, “Free Advice is Poor Advice,” covers how too many investors take advice from friends, relatives and colleagues (or FRCs for short) for their investing strategies.

 

While on the outside it might seem to make sense to take advice from someone who has experience with investments, the advice often doesn’t take into full account an individual’s unique situation. In essence, what might have worked for a colleague or family member may not work for you.

“FRCs only tell you half the investment story,” Danford said, “the good half. They have little knowledge about your financial situation.”

 

Danford founded Family Investment Center in 1989. He and his team are licensed and certified to give investment advice, unlike friends, relatives and colleagues who don’t possess the same insights that investment advisors have gleaned over years of experience and specialized education courses.

 

Money is Freedom – Season 1 is the title of Danford’s two-part podcast where he discusses the importance of establishing an investment portfolio using the right tools.

The blueprint of any investment project, Danford explains, is based on compound growth over time, and this should involve a variety of investment vehicles that take into account risk, reward, fees and taxes.

“You put in little amounts (of money) fairly painlessly,” Danford said, “and over time, compound growth grows them into something pretty spectacular.”

However, as an investor, you need to be wary of fees, but not so wary that you avoid pulling in third parties to assist you in your investments. It’s important to realize that everybody involved in your investment project is getting paid through layers of fees. Sales and distribution fees, Danford said, are the highest, which is why he urges you to look into this aspect of your investment projects.

 

The more personalized the service, the higher fees you’ll pay. Again, if the services are of value, you shouldn’t be offended by these fees.

“It’s fine to pay fees for convenience,” Danford said. “Some people get so wrapped up in fees they stop thinking about what they are getting in return for those fees. Sometimes what you’re getting is convenience – everything in one place.”

The “Money is Freedom” podcast is Danford’s sounding board to voice his experiences that he has gained after decades in the investment industry. As a fee-only advisor, Danford and his team act as fiduciaries and never take a commission on a product they sell to clients. It’s this objective stance that makes the advice he offers through his podcast all the more valuable as you educate yourself on investing.

Take some time to listen to Dan’s podcast which is offered through SoundCloud free of charge and share it with your friends. For a more comprehensive strategy, contact Family Investment Center and speak to an investment advisor. We’re ready to assist you with your earnings and build a stronger financial future for you and your family.

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Investment Strategies for Retirement

Market Volatility and Investment Strategies: How Should You React?

 

If you’ve been watching the market since the first day of 2016 you’ve gotten a reminder of how volatile it can be. However, given factors such as the drop in crude oil prices and fears regarding the Chinese market, it’s not a complete surprise that the market has been so volatile recently. When it comes to investment strategies for retirement, what’s the appropriate reaction to the market?

First, note that you’re not alone if you’re wondering what could happen next. According to a survey by the American College, around 60 percent of clients of retirement income certified professionals said they were “concerned” about the volatility. Let’s look at some tips for dealing with that anxiety.

 

·         Don’t make drastic changes. In other words, stay the course. Too many investors, including those who are in retirement, are motivated by volatility to make changes that have negative outcomes all too often. When the market drops, don’t overreact. With a properly diversified portfolio, you’re more likely to see those temporary losses bounce back when the market swings back upward.

·         Look to other resources rather than making big changes in your portfolio. For example, you might look to a low-interest home equity line of credit as a resource when the market goes south. However, before you jump into this or other options, make sure to seek guidance from an investment expert.

·         Secure guaranteed income. Some retirees can’t be flexible with their income needs. Therefore, “flooring” is an option, which basically is the process of securing enough guaranteed income sources to cover your needs. You can do this through using investment and insurance products, like bonds and annuities.  However, many insurance products come with high costs, stringent terms, surrender penalties, and pages of fine print (annuities are notorious for this), so be sure to consult an investment advisor before making a purchase.     

·         Reduce market withdrawals. Many retirees sell their investments to generate cash. However, doing this during market volatility puts you in the “sequence of returns risk,” which is not good when you sell investments right after a market downturn. You may want to avoid selling stock when markets are volatile. 


Fortunately, retirement income related to pensions aren’t as often impacted by market volatility. However, 401(k) plans and IRAs can be hugely affected by market volatility. With so many investment strategies related to the 401(k) and IRAs, it’s easy to see how anxiety is spiking right now. However, the basic investing principles – such as consistency over time and not letting emotions rule your actions – have shown their worth over time across market highs and lows.

The advisors at Family Investment Center are here to listen and help guide you. We offer an experienced team in a commission-free environment, and we can help address your anxiety and concerns about the market to help positively impact the potential of your  investments. Contact our team today and let’s start moving forward.

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401(k) Investing: How Should You Approach the Options?

Getting the Most Out of Your 401(k) Investing if Your Company Doesn’t Match

The pension plan, once the go-to retirement strategy for the average American worker, is not a common option anymore. Today, many individuals turn to 401(k) investing to help in saving for retirement. It’s not uncommon for employers to match employee contributions to the 401(k) up to a certain percentage. But what should you do if your company doesn’t offer a match?

Surprisingly, American Investment Planners puts the number of companies that don’t offer a match at around 42 percent. If you’re working for a company that doesn’t offer a matching contribution, there are few key considerations:
 

·         First, know that 401(k) investing is an appealing option in saving for retirement, regardless of the match.

·         Second, your company’s plan should charge fees that are entirely reasonable and investment options that are diverse.

·         Third, contributions to the plan are made automatically, as you instruct your plan administrator. There is typically no option to skip one month should cash flow become tight.

 

If you fall into the classification of a higher income household, 401(k) investing is often an attractive option, as contributions may be deductible from your taxes. An added benefit for high income earners is the contribution cap - $18,000 a year in 2015 and 2016 (it should go up in the ensuing years). Individual retirement accounts (IRAs), on the other hand, are limited to $5,500 a year for workers 49 and younger and $6,500 a year for workers 50 and older.

There are times when the IRA is an option that needs to be considered, particularly when it comes to tax planning. Some investment advisors say you should not be so focused on current taxes and instead to think about tax rates at the time of your retirement. If the rates are likely to increase over time, your money might be better off in a Roth 401(k) or Roth IRA because the money is taxed going in rather than when it comes out in retirement. 

According to Vanguard Group, around 56 percent of employers offer a Roth option in the 401(k). You should speak to your investment advisor about this option if it is available to you. If it is not, your advisor might suggest that you put the bulk of your retirement savings into a Roth IRA.  Of course, there are many other considerations when deciding whether to contribute to a regular 401(k) or IRA or a Roth, so be sure to ask an advisor if you’re unsure.

You have options in your investments for retirement, and at Family Investment Center, our team wants you to know what those options are. We have experience with individuals and families at all life stages, and we know how to communicate in a comfortable, client-first setting. Contact us today and let’s talk about what’s next for you and your family.

 

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Investment Strategies: What Can You Learn From Mega Sales?

Three Unique Tips for Staying on Top of Investment Strategies

 

By now, the smoke has cleared and the dust has settled from the busiest shopping season of the year. One of the first things that probably pops into your mind when you think of sales like Black Friday and even New Year’s Day mega-sales is the chaotic clamoring for goods at retail outlets across the U.S. However, there are investment strategies to consider that are related to the good and the bad that occurs on the nation’s biggest shopping days.

1. Show up early – and this means early research, too. Shoppers who get the goods arrive at the store early. However, the shoppers who get the best deals also did their research long before they stood in front of the store. They watched for the advertisements that suited them and made a plan for how they would target their items. But, how can this be applied to investment strategies?

·         The most successful retirement plans are hatched decades before you retire. The earlier the investment strategies are put into place, the more compound interest and investment returns can accrue. Whether you’re a shopper or an investor, the early bird gets the worm. Think it’s too late for you? Think again. An investment advisor can show you options you may not be aware of on your own.


2. Don’t immediately respond to price. The best mega-sale shoppers are attracted to the lowest price for items they really want or need, but they don’t just buy to be buying. They know in advance what the goal is and are less likely to get a great deal on something they just don’t need.

·         Smart investors act calmly. You might be surprised how many investors get excited about a specific stock and jump in at the wrong time. Smart investors aren’t swayed by passion or excitement – emotions should never drive decisions about investments.


3. Wait it out. It takes a special kind of patience to put up with the throngs of shoppers that amass on mega-sale days. Typically, the ones who come out winners are those who patiently waited for the key day, crafted a wise strategy, and were willing to stick to their plan. However, they are also smart enough to make changes when necessary.

·         Patience is a vital virtue when it comes to investing because getting the best return on your investment usually means staying with it for the long term. You create a budget that is reasonable. You save. You invest. You stick to your plan, even when the market is volatile, and you make the necessary changes as you age or as your circumstances change.


Of course, adjusting your investment strategies isn’t as simple as perusing sale flyers. You need guidance from an investment professional who puts clients first and offers unbiased advice. In fact, this is one of the habits of wealthy people – they allow professionals to help and trust their expertise. 

Family Investment Center offers a team of professional advisors who work with clients on a personal level. We won’t use industry jargon in describing your options, and because we’re commission-free, we can focus on your goals and the strategy options to get there.  Contact us today and let’s get started.

 

 

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Your Investment Portfolio and Socially Responsible Investing

More Americans Want Their Investment Portfolio to Line up With Their Values

 

b2ap3_thumbnail_Investing-3_20151106-213448_1.jpgToday more retirees are looking at sustainable, responsible investing in their portfolios, but they don’t want to take a loss. Striking the balance between investing in the causes you believe in and consistent, goal-oriented investment portfolio management is possible – and it’s something more Americans are considering.  Here are some surprising facts to consider:

According to data from Calvert Investments, 87 percent of people saving for retirement say they want their investments to align with their values. Furthermore, 82 percent said they look for their employee-sponsored retirement plans to include investments that are considered socially responsible.

Despite the market volatility, as many as 66 percent of people surveyed said their retirement investments linked to responsible investing will be just as good and perhaps better than the other mutual funds that don’t quite fit the “responsible investing” definition that is important to them.

Sustainable, responsible and impactful investing among investors has been a growing priority for many in recent years. There has also been an increasing number of products to support this type of investing. Many investors have used exchange-traded funds (ETFs), which keep expenses low but also support the values and ethics of the investor. The options for investors are quite varied. There are investments that can be made based on focused religious values, for example. On the other side, some investors will seek to avoid investing in stocks that go against their beliefs, such as corporations known for their carbon emissions or other polluting infractions.

Finding that balance between smart planning for retirement while expressing ethics and personal responsibility takes research and an intentional strategy. When you hire a professional investment advisor to help guide you, they can help you match your values with your investment portfolio.

 

Take note, however … when your investment portfolio is aimed at socially responsible products, it sometimes limits your ability to see the biggest returns because you’re limiting your options. This can increase the risks associated with investing in the market. The advisor that assists you with your investment portfolio can research to find stocks that meet your code of ethics, but also have the desirable risk levels.

Family Investment Center advisors track over 31,000 mutual funds, 20,000 common stocks, 1,700 ETFs, and dozens of investment indices. We can assist you in finding the investment options that will meet your definition of “socially responsible” while creating a well-diversified portfolio. Regardless of your ethics or feelings about social responsibility, we can identify solutions that meet your standards. Contact us today and let’s discuss your investment future.

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Do Generations Approach Investing Differently?

Investing Per the Generation: See Where You Fit In

b2ap3_thumbnail_Generation-X-1_20151028-193301_1.jpgWe’re all familiar with stereotyping tied to each generation, from Baby Boomers to Millennials. Some of these stereotypes read like horoscopes – but can all investors really all fit under the same sign? Some investment studies show there is a distinction between generations, but it’s important to note that there are many factors other than generation that affect how individuals approach investing.

Generalizing the Generations: Do You Fit Any of These Perceptions?

 

Boomers may fall shortThe Insured Retirement Institute found that six out of 10 survey participants hadn’t saved anything for retirement. (But, many have enjoyed some great vacations, says the survey).


Generation X – where do they stand? Many Gen-Xers are falling behind, too. Approximately two-thirds of Gen-X investors haven’t determined what they’ll need to save for retirement. Additionally, 65 percent said they think saving is more challenging for their generation than for others.

Millennials are among the savviest investors. Millennials are generally considered to be between the ages of 25 and 34. These are individuals who came up into careers where the company-sponsored 401(k) had been established previously, and this is the main source of their investment portfolio. A survey by Transamerica found that Millennials talk about retirement approximately twice as much as the older generations.

Where is each generation sitting in their retirement goals? It’s no surprise when you tie those generations to the shift from pensions/defined-benefit plans to self-funding retirement that there will be differences. Boomers are feeling the initial sting and now worried about the lack of time to catch up. The Xers are catching on and learning from the mistakes of their Boomer parents, but may lack a clear focus toward retirement.

Millennials have two generations (and many recent changes in rules) to learn from. The younger generation has to fund their own retirement, and they’re living longer and longer. Meanwhile, many know that Social Security funds are shrinking (and they’re talking about it). 

Looking More Specifically at Individuals:

Not everyone fits into a specific segment. Many finance writers like to segment the audience and talk about how each generation invests, but the truth is, not everybody meets the various profiles. One of the big complexities of personal finance is the uniqueness of each circumstance. Every person, no matter their generation or age, is different due to the following:

·         Family

·         Gender

·         Financial acumen

·         Budget

·         Education

·         Debt

·         Income

·         Risk tolerance

·         Savings

·         Health

·         Personality

·         Goals


Don’t leave anything to chance, and don’t believe everything you read about how your generation is failing or achieving. Instead, focus on the picture you’ve imagined of your own life in retirement. Then contact the commission-free team at Family Investment Center to talk about how you’ll get there. We’re motivated by your success rather than sales goals, and any generation can appreciate that.

 

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Can Geographical Differences Impact Investment Strategies?

How Investment Strategies Vary According to Financial Concerns

 

 

b2ap3_thumbnail_Investment-Management-1_20151021-205239_1.jpgEveryone faces unique challenges when it comes to planning for future dreams, including retirement. However, experts have pointed out that we may also face similar challenges according to where we live. A recent survey of thousands of Americans shows that there are distinctive financial geographical issues throughout the U.S. Investment strategies may vary with these concerns, but considering getting advice from a professional investment advisor should always be high on the list of priorities.

GOBankingRates asked 10,000 people what their biggest financial concerns were, and the results show that planning for retirement, saving for a home, establishing an emergency fund, building an investment portfolio and paying for higher education were among the most frequent answers. Staying with a strategy that can produce results is actually a problem for one in five Americans, the survey found.

What are some intriguing regional differences?

- Californians said they struggle with paying for higher education.
- Residents in several northeastern states said they have a difficult time planning for retirement.
- In the Midwest, Missourians say their biggest financial concern involves planning for retirement. Missourians are also graduating college with an average student debt total of nearly $25,000.

It is not uncommon for retirement planning and higher education goals to work against each other. This is often a challenge with clients focused on having a robust retirement plan while also helping their children navigate through an increasingly expensive higher education process. Unfortunately, many parents are forgoing their own retirement plans in favor of focusing investments toward paying college tuition.

College can be a priority when it comes to planning for the future of your children, but placing too much emphasis on this part of your investment portfolio while neglecting your retirement investing can leave you unprepared financially in retirement. Students can take out low interest student loans to fund their education; this is not something that’s available for your retirement. In fact, if you put too much focus on funding higher education, you can put your children in a situation where they’re funding your retirement – such as paying your medical bills and your housing expenses – because you do not have enough financial resources for your retirement years.

Interestingly, the Employee Benefit Research Institute has found that the debt senior citizens are accruing has increased by 83 percent in just one decade. While the report doesn’t indicate that higher education is at fault, there are likely many variables that weigh into this debt load, which in 2010 was $50,000 on average for senior citizens.

To strike the right balance between education and retirement, talk to a trusted investment advisor. These are professionals who can assist you in aligning your priorities and creating a consistent strategy for success. Family Investment Center professionals work with a wide variety of individuals with different goals, investment challenges, and family situations (all in a refreshing commission-free setting). Contact us today and let’s start the conversation.

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Investment Advisors Offer Key Insights During Volatile Markets

Talking to the Right Investment Advisors Calms Anxiety

 

b2ap3_thumbnail_Financial-Advisor-1_20151021-204011_1.jpgAnyone who follows the market knows that after five years of a bull market, a bear could be just around the corner. Recently we have seen a volatile market. Does this mean investors need to panic and rush to find safe harbors for their money? Probably not. Rather, it’s time to talk to your investment advisor about your fears and make rational decisions regarding your investments.

During times of volatility, investment advisors are often looking to provide value to clients, just as they do during bull markets. However, they also spend some time calming clients, working to reduce their anxiety. Investors have not forgotten the 2008-2009 stock market drop and many are worried that a rollercoaster market could bring on some losses similar to what they saw in the recession. A survey by Russell Investments shows that investors worry about the rollercoaster market more than they worry about running out of money for retirement.

We watched the market drop by half during the worst of the recession. However, we’ve seen it bounce back and then some. Regardless of the rebound, investors remember the pain of the loss and become anxious in a volatile market. People in retirement (or closest to it) are often the most anxious at times like we’re experiencing now, and investment advisors are here to help.

Here are things an investor should consider in times like these:

·         First, stay calm. Panic is contagious and can lead to an emotion-based decision.

·         Explain to your investment advisor exactly what is making you anxious.

·         Don’t focus on charts and graphs, because these seldom do anything to reduce anxiety.

·         Seek out books that address times like today. Warren Buffett, Dave Ramsey, Suze Orman, and others all have resources that can educate you on how to process the anxiety you might be feeling now.

·         Remember that making significant changes in your investments based on emotion is often a mistake. An investment advisor can remind you that fluctuations are normal and consistency is still a key element of success.

·         Ask yourself if you need a cooling-off period where you put off making decisions about your investments. Everyone makes impulsive decisions in the heat of the moment.

·         Listen to the advice of your investment advisor; they have seen many market changes and are experienced in working with a variety of tools and scenarios.


Even experienced investors can get caught up in negative media headlines and can respond accordingly. Working with a professional investment advisor means you have the confidence of knowing someone is working toward your success from an unbiased viewpoint every day.  

Family Investment Center offers a professional team who has experienced the ebb and flow, the bull and bear and the rollercoaster effects of the market. Are you anxious about your investments? Contact us today and we’ll discuss how to move forward with clear focus and higher confidence.

 

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An Investment Portfolio That Aligns With Your Values

Customizing Your Investment Portfolio for Social Responsibility

b2ap3_thumbnail_Retirement-7.jpgWe’re impacted by what goes on around us. As the world changes, so too will the values of each new generation. These changes, in the investment world, include seeing investment portfolios of individuals whose values are important to them - whose values may guide their investment decisions as much as the successes of certain investment tools. A younger generation who is seeking out investment opportunities is doing so with socially responsible investing near the top of their list.

No matter what generation you’re a part of, you may want to consider the following points if you choose to make changes to your own investments:

Aligning values with your investment portfolio is possible – and many people are doing it. People who want to align their values with the activities that are important to them will typically invest in companies that share the same values. This is not a new concept, but it has been growing in activity in the last few years. The Forum for Sustainable and Responsible Investment released a report that says this type of investment increased from $3.4 trillion in 2012 to $6.5 trillion by the beginning of 2014. Around 53 percent of Millennials, according to a survey by Spectrem Group, say social issues impact the way they invest, compared to 42 percent of Gen Xers and 41 percent of Baby Boomers.

Seek out socially responsible mutual funds. Did you know there are a wide variety of socially responsible mutual funds available to you? In fact, there are over 950 of them today, an increase from 720 in 2012. Talk to your investment advisor about the risk involved and align your risk tolerance with the right socially responsible fund.

Do a little online research before making changes. For example, you may want to take a look at the Forum for Sustainable and Responsible Investment online. This organization will provide you with a list of sustainable and responsible mutual funds. Many other resources exist for similar information.

Be prepared for possible lower results, but do what you can to limit losses. Almost any investment will carry risk, but because socially responsible funds restrict the types of companies in which they will invest, the results might be less desirable than what a portfolio manager without restrictions might obtain. Again, work with your investment advisor to limit your risk of being tied to low-performing investments – but that still allow you to make some values-based choices.

Shape the future with shareholder activism. Those who own companies are the ones who guide them. When publicly traded, shareholders are often able to influence how the company is managed. Exercising voting rights, attending shareholder meetings, and filing shareholder resolutions are all ways that investors are able to help shape the way a company does business.

Improve your community with your investment. Some socially responsible funds will set aside a percentage of investments for credit union and nonprofit lenders that offer affordable loans to community members looking to create positive change. Information about how this occurs should be available in a fund’s prospectus.

Partner with a trained professional. Whether it’s your complete investment portfolio or just a portion that you want directed toward socially responsible funds, talk to your investment advisor about how to best proceed. Contact Family Investment Center today. We’re ready to listen to your values and your future goals.

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Danford Shares Insights over Department of Labor “Conflict of Interest” Rule; Featured in PR Web Announcement

 

b2ap3_thumbnail_PR-Web-1.JPGRecently Dan Danford, CEO of Family Investment Center, shared his insights regarding the pending Department of Labor rule concerning “conflict of interest” among investors and advisors. Essentially, President Obama is calling for unbiased, non-commission driven advice for investors. Recent White House reports show investors could lose $17 billion per year in potential revenues due to conflicted advisor motives. As stated by Danford, “client-first advice is the only advice that counts.” He also shared his insight into the non-commission, fee-only philosophy Danford and his team have cultivated since the organization’s founding.

Read more here about the recent
PR Web announcement:

 

Sept. 17, 2015: PR Web

Dan Danford, CEO of Family Investment Center, Expresses Surprise Over Pending U.S. Department of Labor Fiduciary Rule

President Obama directed the Department of Labor earlier this year to raise investment advice standards for brokers in charge of retirement accounts. The “conflict of interest” rule mandates that brokers, insurance agents and other financial advisors act in their clients’ best interest, but not all advising firms are on board.

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Investment Advice in Light of Recent Market Drop: Stay Calm

 

The Best Investment Advice is to Not Get Rattled

b2ap3_thumbnail_Keep-Calm-1.gifIn a nutshell, here’s a timely tip for all investors: Keep calm and invest on.


If you’re distracted by the recent stock market, it may be time to turn off the television and stop listening to the media who are experts at driving fear into the hearts of investors. The truth is, these “experts” don’t actually care about you or your investments – they’re simply there to talk about volatile markets. The best investment advice comes from a trusted investment advisor. What is important to know about investing in a volatile market?  Here are a few important things:

 

Market fluctuation is normal. Realize that there is a constant ebb and flow in the market, fluctuations that are a necessary part of investing, and they will never go away. Don’t focus on the short-term ups and downs; rather, think about your goals for the future and what you want your investments to look like five or 10 years from now.

Some investors get so rattled they jump off the roller coaster, locking in their losses and sinking any chance of seeing those investments come back. Investing is something that requires a long-term outlook, which means you have to stick with your plan and roll with the fluctuations.

There is no outsmarting the market. Investors who get involved emotionally in where they put their money are the ones who try to “play” the market, guess where it’s going and make decisions based on those emotion-based ideas. You need to forget what happened in the past while learning from mistakes and sticking to your investment plan.

Short-term approaches offer limited value. It sounds really intriguing to buy a stock at its low and sell at its high, but that rarely occurs. If you have this tactical mindset you may just be focused on getting a thrill out of the risk involved and would be in a better position if you could take a more strategic approach to investing. A more solid strategy is based on long-term goals that carefully evaluate the amount of risk.

Go with a long-term approach. Experts have highlighted that over the last 50 years, the amount of time individual investors hold on to the same stock has shrunk. What was once a five- to 10-year holding period is now down to around a year, on average. There are firms today that trade based on technical factors and momentum, and it’s not something individual investors should try to mimic. Over time, solid investment advice continues to encourage a focus on the long-term approach largely based upon diversification and patience.

Gain better control (and more confidence) by talking to an investment advisor. Knowing where to put your resources can be stressful. Talk to a professional investment advisor and get the guidance of someone who has witnessed the ups and downs of the market and has helped navigate others through the storm. Family Investment Center has professionals on our team who will listen to your goals, then give you the confidence you need to stick with your plan. We’re also commission-free, following strong fiduciary responsibility guidelines long before they were making media headlines. Contact us today and let’s get started together.

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Investing for Physicians: Four Reasons it Differs From Other Professions

Challenges of Investing for Physicians

b2ap3_thumbnail_Physicians-1.jpgThe landscape for healthcare continues to evolve. More is expected of physicians today than at any point in history. While the focus of physicians continues to be on keeping up with technology, regulations, and the health of their patients, many may be unprepared when it comes to their own personal finances. Investing for physicians follows similar strategies to other professions, but a recent survey shows physicians also have their own set of challenges.

Physicians may delay starting retirement savings. A national poll conducted by AMA Insurance reveals that only six percent of physicians said they are ahead on their investment plan for retirement. Around half said they are not prepared for retirement. Doctors spend at least ten years training to become a professional, which means they enter the workforce at a more advanced age than those in other professions. This can put them behind in their investing goals.

Physicians enter the workforce playing catch-up, typically with debt. Many physicians come out of college with staggering student loan debt, the median of which is $278,000 for private schools and $207,000 for public schools (according to the Association of American Medical Colleges). These stats show doctors could enter the workforce around $500,000 behind in real and potential losses.

Retirement accounts are underfunded. The AMA survey shows that having enough money for retirement was the number one financial concern for physicians. In fact, 40 percent said they have less than $500,000 in their retirement accounts. For those under the age of 45, the average was less than $100,000.

Other areas of estate planning need attention as well. The survey also reveals additional estate planning issues that need to be addressed. For instance, only about half of physicians polled said they had updated their will, medical directives, power of attorney and end-of-life plans. Around 35 percent said they had no estate plan. 70 percent said they do not have a long-term care coverage plan in place.

Like most professionals, physicians live busy and demanding lifestyles, but retirement planning doesn’t have to fall by the wayside of long-term goals. When it comes to investing, there are many options to consider, including seeking out an investment advisor for guidance. Letting a professional work out the details of your retirement plan means more time spent pursuing the career you love, or more time with your family, and less time worrying about your future.

At Family Investment Center, we work with people in all walks of life – from young investors to retired professionals. We have the expertise to work within the challenges of complex careers in a commission-free setting. We truly put our clients’ needs first, and have since our founding. Reach out to our team today and let’s get started.

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Investing for Retirement – Late in the Game?

Steps to Take Now for Investing for Retirement

b2ap3_thumbnail_Retirement-4_20150717-163043_1.jpgFor many Americans, investing for retirement can get pushed aside by other things in the early years of a career. Panic can set in, however, as later career years arrive and the realization that the time for leaving the office and setting out for the next big adventure is quickly approaching. What do you do now?

Investing for retirement, even late in the game, is still a smart move. Here are a few tips to consider as you begin planning out your investing strategy:

·         Consider delaying your Social Security benefits. You can receive your benefits at age 62, but a person who delays benefits up to eight years would see significantly higher Social Security income over a lifetime.

·         Pay down your debt while also making contributions to a retirement account. High interest debt can work against your investing strategy. Consider a consolidation plan with a lower interest rate.

·         Take advantage of your employer-sponsored 401(k). Many companies will offer a match up to a certain percentage of your salary, so don’t leave that money on the table – contribute as much as possible.

·         If you’re jumping in late in the game, you may want to invest beyond just your 401(k). Consider the tax benefits you could receive with an IRA. Furthermore, if you’re 50 or older, you can take advantage of what’s referred to as “catch-up” contributions. For instance, you can put an extra $1,000 a year above the standard limit in your IRA and you can contribute as much as $5,500 above the standard limit in your 401(k).

·         Do you know the difference between a Roth and a traditional IRA? What is good for one person might not be for the next. The differences are significant, so make sure you’re using the vehicle that will benefit you the most.

Investing for retirement can be a complex situation and one that looks different for each individual. For the best course of action, no matter the stage of your career, consider working with a trusted professional advisor for guidance.

Family Investment Center can assist you regardless of what stage of life you’re in. Whether you’re a young professional just starting their career, an established professional with a large amount of savings, or a person who is getting a late start investing for retirement, we can help. Our professional team of advisors has many years of experience assisting people in a wide variety of life situations – all in a refreshing, commission-free setting.

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Suddenly Single? Investment Considerations for the Newly Divorced or Widowed

Investment Advice Includes New Considerations

b2ap3_thumbnail_Investing-2_20150716-170817_1.jpgLosing a long-time partner, either through death or divorce, brings many changes, including financial ones. Seeking professional investment advice after becoming suddenly single is important as you maneuver through new waters. To get you started, the following are a few tips to consider:

·         Stay Updated on Financial Accounts
You likely have more than one financial account that is linked to you and your spouse, the registrations of which need to be changed. In the event of death, you’ll need to provide a death certificate to change the registration. A divorce will require you to first determine how you’ll divide the assets, which might necessitate a court order.

·         Dividing Assets: Know the Rules
If you’re splitting retirement assets, be aware that these accounts have their own rules that will apply. For instance, in the event that your spouse dies, most retirement accounts will go immediately to the beneficiary, which was named when the account was first established. Beneficiary designations take precedence over what is in estate plan documents, which makes it crucial to keep these accounts updated.

·         IRAs: Understand Penalties
In the event of death, assets often go to the surviving spouse. Most survivors will roll this money over into an IRA with their name on it, thus escaping taxes or penalties. However, it is of the utmost importance to understand the rules on distributions and taxes.  Survivors may be subject to a required minimum distribution (RMD), and early withdrawal tax penalties may still apply.  Not knowing these rules can be costly, so do your research and talk to an advisor.

·         Dividing Assets in Divorce: Don’t Try to Make Changes on Your Own
Usually in a divorce situation, the retirement assets are split up. This is often preceded by what lawyers refer to as a QDRO - qualified domestic relations order. Although IRAs are divided without penalty, this has to be ordered by the court, so don’t make the changes on your own or you could be  taxed and pay penalties

 Social Security Maximization: You Have Options
Regardless of whether you’re divorced or if you have lost your spouse in death, Social Security benefits will be there for you. In most cases, widows and ex-spouses can claim 50 percent of their spouse’s benefits. If you’re disabled and a widow or widower, you can claim benefits as early as age 50. However, you may want to consider waiting until you’re 70 before you begin taking your benefits because it can mean tens of thousands of extra dollars over your lifetime.

Family Investment Center has a professional, experienced team of advisors who know how to help guide you through life changes. Every situation is different, and we can offer unbiased, commission-free guidance on investments that is specific to your life situation. Let’s talk today.

 

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Planning for Retirement: What Do Successful People Underestimate?

b2ap3_thumbnail_Retirement-Planning-2.jpgA recent survey by Charles Schwab indicates that some of America’s wealthy are underestimating their expenses as they plan for retirement. According to the study, 80 percent of workers who earn $115,000 annually think they’ll only need $66,000 a year in retirement and that their current investment plans are on track for  retirement.

Survey respondents believe they are going to cut back on lavish spending and live a simpler life. However, for Americans currently making $115,000 a year, a retirement goal of $66,000 per year is actually a 43 percent reduction in annual income. This figure may leave out unexpected costs that can occur in later years, such as health care. What are other elements that individuals in upper levels of income (and those who aren’t) tend to underestimate?

Many adults assume they’ll retire at 65 but are underestimating how long they’ll live after that. Arriving at the “right” number when planning for retirement can be difficult. For many Americans, the number is 65 years of age – but if they haven’t invested enough for retirement, this may not be possible. Today, many adults in the U.S. will live ten to 15 years longer than they anticipate, especially women. Taking the time to sit down now with a professional investment advisor can mean that you have a better plan that lines up with your life expectancy and projected – and realistic – income needs.

Many workers assume what they’re contributing to their IRA or 401(k) is enough, or that they can’t start now. About half of Americans are invested in a retirement plan like an IRA or 401(k), according to a study by EBRI. Maxing out the contribution limit on these retirement plans is ideal, but many Americans fail to realize that adding to these accounts at any percentage is important for retirement planning. Did you know there are also tools that allow for a “catch up” contribution if you’re over a certain age? While nothing is guaranteed and there are always risks associated with having investments, there is great potential for reward, especially if you start early.

Many investors assume they can’t (or shouldn’t) be a little unconventional from time to time. Scores of time-worn advice circulate toward investing, and for many Americans, it can be challenging to “go against the grain.” One example is paying off a mortgage early or making double payments. By investing what you would have spent making that extra house payment, you may have the potential to achieve higher returns later – and you may be better prepared as new doors open that you didn’t anticipate.

At Family Investment Center, our team is dedicated to serving clients’ best interests first, and we’ve always operated in a commission-free setting. We are able to sit down and work with each individual in a professional, experience-driven atmosphere without cumbersome jargon. Contact our team today to learn more about what makes us unique. 

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Want to Get More From Your 401(k) Investing?

 

Easy Tips to Remember for 401(k) Investing

b2ap3_thumbnail_401K-2.jpgWhile pension plans have fallen by the wayside, 401(k) investing through employer-sponsored programs has grown in popularity as a part of planning for retirement. Many investment advisors would say that one important move you can make in retirement planning is to start investing in your 401(k) as early as possible. Why? The reason is compound interest and portfolio growth. The more time you let the growth build up and work for itself, the more money you are capable of accruing by the time you retire. Here are some easy tips to review and share:

Max out the employer match. If you’re enrolled in an employer-sponsored program where the employer matches a percentage of your investment, make sure you’re taking maximum advantage of that match. Investing less than what your employer will match is basically leaving money on the table.

Earned a little extra? Invest it. If you receive a bonus or windfall, consider adding it as part of your long-term investment strategy. Also consider raises an opportunity to increase your monthly investments to your 401(k). Having the money infused directly from payroll to the 401(k) account is a smart move as you don’t have to physically do anything to transfer from your checking account to an investment account. This ensures that the money is moved into your 401(k) consistently each month.

Consistency, consistency. With 401(k) investing, it is important to think long-term and to diversify. When recessions hit, there is a good chance you may see it negatively impact your balance. However, when investing for the long haul, history has shown that the ebb and flow of the economy usually allows you to recoup those losses. The best results are most often seen in accounts that are both consistent and diversified.

Don’t allow yourself easy access to the 401(k) funds. It is important that you don’t treat your 401(k) like a loan or checking account. Yes, you worked for that money and it is yours, but keep in mind your retirement goals and long-term outlook. Remember, with few exceptions, any funds you take out before age 59.5 will not only be taxed as income, but will also incur an early withdrawal tax penalty.

Finally, don’t be afraid to ask for assistance with your 401(k) investing. Getting to the point where you’re truly enjoying your retirement years, due in part to your 401(k) account, is not something that everyone is equipped to plan out on their own. It may take the professional advice of an experienced advisor who knows how your investments will be taxed and how they can be leveraged as an effective tool.

Family Investment Center has offered individuals and families unbiased, commission-free advice since opening 17 years ago. In fact, we were one of the first regional firms to operate on a fee-only, commission-free environment – long before the concept became popular. Call or email our team today and find out why national publications like Forbes and the Wall Street Journal include our thoughts in articles.

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Planning for Retirement

 

What do Successful People Underestimate When Planning for Retirement?

b2ap3_thumbnail_Retirement-5.jpgA recent survey by Charles Schwab indicates that some of America’s wealthy are underestimating their expenses as they are planning for retirement. According to the study, 80 percent of workers who earn $115,000 annually think they’ll only need $66,000 a year in retirement and that their current investment plans are on track for retirement.

Survey respondents believe they are going to cut back on lavish spending and live a simpler life. However, for Americans currently making $115,000 a year, a retirement goal of $66,000 per year is actually a 43 percent reduction in annual income. This figure may leave out unexpected costs that can occur in later years, such as health care. What are other elements that individuals in upper levels of income (and those who aren’t) tend to underestimate?

Many adults assume they’ll retire at 65 but are underestimating how long they’ll live after that. Arriving at the “right” number when planning for retirement can be difficult. For many Americans, the number is 65 years of age – but if they haven’t invested enough for retirement, this may not be possible. Today, many adults in the U.S. will live ten to 15 years longer than they anticipate, especially women. Taking the time to sit down now with a professional investment advisor can mean that you have a better plan that lines up with your life expectancy and projected – and realistic – income needs.

Many workers assume what they’re contributing to their IRA or 401(k) is enough, or that they can’t start now. About half of Americans are invested in a retirement plan like an IRA or 401(k), according to a study by EBRI. Maxing out the contribution limit on these retirement plans is ideal, but many Americans fail to realize that adding to these accounts at any percentage is important for retirement planning. Did you know there are also tools that allow for a “catch up” contribution if you’re over a certain age? While nothing is guaranteed and there are always risks associated with having investments, there is great potential for reward, especially if you start early.

Many investors assume they can’t (or shouldn’t) be a little unconventional from time to time. Scores of time-worn advice circulate toward investing, and for many Americans, it can be challenging to “go against the grain.” One example is paying off a mortgage early or making double payments. By investing what you would have spent making that extra house payment, you may have the potential to achieve higher returns later – and you may be better prepared as new doors open that you didn’t anticipate.

At Family Investment Center, our team is dedicated to serving clients’ best interests first, and we’ve always operated in a commission-free setting. We are able to sit down and work with each individual in a professional, experience-driven atmosphere without cumbersome jargon. Contact our team today to learn more about what makes us unique. 

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Setting Emotions Aside to Invest Wisely

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What Can we Take From Krzyzewski and Apply to Your Investment Portfolio Strategy?

A Sporting Take on the Investment Portfolio

b2ap3_thumbnail_Money-1_20150529-042458_1.jpgMike Krzyzewski has held the head coach position at Duke University since the year President Reagan first stepped into office. In that time, he’s lead his teams into five successful NCAA championships, was at the helm for two gold medal wins in the Summer Olympics, and is fifth on the list of coaches with the most wins in college basketball history. How can Coach K’s winning coaching strategy apply to your investment portfolio strategy? Let’s take a look.

Think forward motion. Coach K has a knack for the man-to-man defense as well as an offense that is constantly in motion. He’s stuck to this throughout his career because it produces results – a .769 win percentage. These are the kind of results you hope to get in an investment portfolio strategy. By persistently reinvesting these “wins,” and keeping an attitude of forward motion, you can also amass a record of which you can be proud.

Deal with change. Change is something many people have trouble with, which can be a problem when it comes to an investment portfolio. How does Coach K deal with change? Most coaches don’t want to have a player for just a year and then see them advance to the pros – instead, they’d rather have that excellent player for their full four years of eligibility. Instead of going against the system, Coach K embraces the wants of the players and has successfully built teams with star players he knows will only be around for a single season. (Because that’s what some star players truly want.)

Change in the investment market is also something that happens frequently. Stocks that were hot 10 years ago shouldn’t be thought of as a “go to” stock now. Evolving with the times, and being willing to embrace new strategies or unconventional wisdom now and then, can help you reach greater success.

Coach K isn’t afraid to go deep into his bench to utilize the skills of players most others have either forgotten about or those who didn’t know they had a specific skill. These are players who are patient and will wait until the time is right before they come to the court and shine – however briefly it might be. With investments, patience is definitely a virtue. A good investment advisor will not be overly swayed by market fluctuations, but will instead keep a perspective built on consistency over time.

Professional investment advisors aren’t playing the market. They truly know how to embrace both new technology and traditional, “classic” rules of investing that remain unchanged. Not every move is going to be a winner, and while no advisor can predict the future, those who are not opposed to a certain amount of risk (but are also educated and experienced in diverse strategies) can often see the biggest successes for their clients. 

The professional investment advisors at
Family Investment Center specialize in large portfolios and operate in a commission-free environment. You’ll never see a hidden fee from our team, but you will see experience, several specialized degrees and credentials, and a loyal client base. Contact us today and find out how we can work with you to impact your family’s future.

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Investing for Women: Does Gender Really Matter?

Why Investing for Women Deserves a Closer Look

 

b2ap3_thumbnail_Financial-Planning-in-Your-20s-1.jpgLike taste in fashion, cars, and social outings, there are differences in the way men and women invest. While personal preference accounts for some, life situations unique to gender can also be major factors. Any strategies that involve investing for women should take into consideration some unique options available to women – and unique opportunities.

1. If you’re considering becoming an investor, or making changes to your investment plans, it may be time to consider the allocation of your portfolio. You may have read articles or resources on your own and have a general idea of how you want to proceed – or you may be experiencing reluctance because of market fluctuations. Diversifying your portfolio among many types of sectors and investments can help you achieve more success over time. Consider if this is a good time to sit down with your investment advisor to review your level of risk and make adjustments if needed.

2. Don’t be afraid to put yourself first when it comes to investing. Many women are perpetual caregivers, which can have financial consequences. Before you give money to your favorite charity or even to your child’s college fund, pay yourself first in the form of investing. In the future, it may cost your loved ones a great deal more to help care for your needs as you age than you anticipate – meaning investing in your own retirement isn’t selfish, but instead wise. Keep in mind that many seniors are living 10 to 15 years longer than they expect to live, so the need for smart investing is even greater.

Remember the rule that you’re reminded of every time you get on an airplane: if the oxygen masks fall, put yours on first, then help others with theirs. Take care of yourself first so you can help others later.

3. Take part in an employer-sponsored retirement plan if it is offered at your place of employment. Consider contributing at least as much as your employer will match. If available, also consider opening your own individual retirement account (IRA). With a careful eye on your budget and control on your spending, your investments can accumulate and help open doors to the future you want.

4. Get involved early and often. One constant challenge investment advisors report is the habit of one spouse deferring the activity to the other spouse, for many reasons. You should know where your assets are being held and how to access them. Not only will this allow you to enjoy together successes you may see, but it will also provide an extra layer of confidence and control. Some women enjoy having their own independent investments to follow and manage, in addition to shared accounts with their spouse.

Finally, regardless of gender, you may need professional help with your investments. Investment advisors carry out these tasks every day, so they can concentrate on serving clients and helping them meet their goals.
Whether it’s investing for women, for men, or for the entire family, a professional advisor may hold your key to a brighter future.

At Family Investment Center, we strive to help put clients in a more confident position -- not just for you, but also for your entire family. When you team up with a professional who has the certifications and the passion to stay in the know, you can move past the challenges that many women experience with investing.

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Family Investment Center featured in Kansas City Star blog titled “Don’t Pay Off Your Mortgage If You Plan to Enjoy Retirement”

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Surprise. Conventional wisdom, when it comes to finances, could actually get in the way of progress, says Family Investment Center founder Dan Danford in a recent Kansas City Star personal finance guest blog.

Titled “Your Financial Planner: Don’t pay off your mortgage if you plan to enjoy retirement,” Danford’s guest blog highlighted the Personal Finance section of The Kansas City Star on May 13, 2015. In the piece, Danford was recruited to share some unexpected knowledge with readers as a regional investment advisor who is known for doing things a little differently. He regularly mails $2 bills to clients on their birthdays, and often uses stories to help educate and inform clients as they make decisions.

In the Kansas City Star blog, Danford encourages readers to consider what top business schools and other institutions have to say about concepts like deliberate debt and opportunity cost. “Taking money you might have spent on double mortgage payments to pay off your house early may mean higher returns later if that money were used for other things instead,” says Danford. “Sometimes going against conventional knowledge can open doors you might not have seen coming. These are classic principles taught in finance and business schools across the country, and they can also help investors succeed.”

Danford also addresses the surprising facts about how many Americans aren’t adequately saving for retirement, due to concerns like daily expenses and a lack of confidence or knowledge in the investment process. He encourages investors to work with a professional to help guide their steps. “You’re likely to see different results from a guided fishing excursion rather than fishing off your own deck and acting on your own hunch about where fish might be. Investing with the help of a professional, rather than all on your own knowledge, works the same way,” says Danford.

These approaches have opened doors for media coverage including a recent feature in The Wall Street Journal “Voices” column, where Danford explains how sharing simple, valuable insight in an uncomplicated way can help investors overcome anxiety. In some media articles, Danford recalls how his dad made him “rent” the family mower when Danford was a young boy mowing yards for income. He’s also known for being one of the first investment firms in the region to remain completely commission-free – a philosophy made popular by recent White House reports warning against hidden fees from commission-based firms, as well as mainstream books like Tony Robbins’ top-selling book MONEY: Master the Game.

Read Danford’s full Kansas City Star blog here:  http://www.kansascity.com/news/business/personal-finance/article20827731.html

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Twenty-Somethings and Investing: 10 Simple Financial Rules

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When’s the right time to think about investing?

Today. Right now.

Even if you’re in your 20s and investing seems like something you’ll do later, think again. Investing right now is all about planning out the life you want to live and mapping the steps to get there. It doesn’t have to be over-complicated; working with a professional investment advisor can help take the worry out of the equation for you.

View our new video below for some straightforward tips you can put into action, today -- and move a few steps forward to the freedom you know you want down the road.

 

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Investment Strategies, Based on the Philosophies of Warren Buffett

b2ap3_thumbnail_Millionaire-1.jpgWhen it comes to considering someone else’s ideas about investment strategies, it’s always thought-provoking to look at what the “Oracle of Omaha”, Warren Buffett, has to say.  

When it comes to financial success, his staying power continues to be a source of conversation. Warren Buffett joined Berkshire Hathaway 50 years ago and has helped steer the company toward 20 percent annual growth since – aside from the fact that he also happens to be a billionaire and one of the richest people on Earth. He didn’t get that way by making unwise investment decisions. What advice does he offer to investors?


Don’t pay too much for an investment. Buffett is an expert on buying businesses and making a profit off of them. His advice is simple: no business, regardless of how many customers it has, is a good investment when you’ve overpaid for it. The same can be said for stocks. For investors who get caught up in the “trending stocks” that promise a massive return, remember that if you’re paying too much for it, it’s it may not ever amount to a good investment.

Don’t try to time the market. We know that historically, the market will fluctuate. We also know that it could give you a better return when you invest for the long-haul. People are often afraid of volatility, but if experts have learned anything from the ebb and flow of the market, it’s that staying in over the long-run and not making overly risky (or emotion-based) decisions is a sound investment practice.

Everybody will make a mistake or two – face yours head-on. Buffett is quick to point out mistakes he’s made, whether it was buying a company he knew might turn out poorly, or passing on a company that could have turned a massive profit for him. The key is to not dwell on mistakes – take your lumps and get on with it.

Nobody can tell you what a stock will be worth next year. Some investors have fun trying to predict the market. However, it’s always been and always will be partly a guessing game. You can’t judge a stock solely by the year it had; that’s often more of a story about the market than it is about a stock. Experienced, professional investment advisors, however, can utilize strategies and knowledge to help you reach goals you may not reach investing on your own.

“Don’t ask the barber whether you need a haircut.” This is Buffett’s way of saying if you want advice about investing, don’t ask someone who is out to sell you something. When it comes to investment strategies from third parties, consider a commission-free (“fee-only”) advisor who has nothing to gain from recommending a particular financial product. Advisors who take commissions, sometimes called “fee-based”, are making money off investors in two ways – the fee they charge to manage an investment and from commissions paid to them when they convince a client to buy a product. In contrast, a fee-only advisor is acting solely in the best interest of the client.

Family Investment Center is a fee-only investment advisor.  Our team of advisors can help guide you with your best interests at heart. We never take commissions, and we’ve always treated our clients as part of our own family. For more information about how we approach investment strategies, contact us today.

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Retirement Planning: Facts You Might Have Missed

b2ap3_thumbnail_Investing-7.jpgIt is natural to have some worries about your finances as you near retirement. Even people who have planned for decades can feel some anxiety as they question whether or not they’ve done enough to prepare themselves financially for retirement.

Retirement planning, when approached correctly, can ease these fears and assure you that you’re on the right track. One way to approach this is to think about the worst-case scenario and make provisions for it. For instance, high taxes are something that can present a worst-case scenario. You should have a fairly good grasp on your tax situation where your investments are concerned, but give it a second thought and talk it over with your investment advisor or accountant to make sure you’re not missing out on any important information that could lead to higher tax rates.

What about health issues? You might be healthy at the moment, but as we age, we see the doctor more often as health problems become more regular, and this presents added costs that we often don’t account for.

Another way to ease into the retirement state of mind is to start thinking about your savings as monthly income. Perhaps you’ve only been looking at the totals in your
401(k) and other investment accounts, but try to imagine these accounts as your new source of income and establish your monthly retirement budget based on how you’ll pull down funds from those accounts. This will help you visualize what you’ll actually be limited to on that first month when your paycheck stops coming in and you begin relying on the funds you’ve amassed for retirement.

Are you invested in bonds? Look at your bond investments because they have some level of risk associated with them. Many retirees have a strategy in their retirement planning that relies on bonds. There are things to consider before you try to sell your bonds, including interest rates and the amount of time you held the bond. These are factors that could lead to a loss, if they don’t play in your favor. 

Give your health insurance coverage another look as you plan for retirement. Voya Financial conducted a study last year that revealed how challenging healthcare costs are to retirees. In fact, the study showed that these costs were the most unexpected challenge for the newly retired. Deductibles for prescriptions, lab work, and multiple visits to doctors and specialists all add up and can represent a large out-of-pocket expense that catches up to people, even those who thought their insurance was excellent.

Professional advisors know the roadblocks retirees face and they can help you navigate obstacles long before they present themselves.
Family Investment Center is proud to offer a wide range of knowledge that our professional team has gained over the years. Contact us today to start finding out how to plan for retirement … so you can worry less and look forward to your retirement years even more.   

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Do You Know These IRA Points for Your Investment Strategies?

b2ap3_thumbnail_Investment-Management-1.jpgYou already know you need to carefully consider your investment decisions. When it comes to investment strategies, miscalculated decisions can lead to paying more taxes than you bargained for, or possibly penalties (especially when it comes to IRAs). Here are some notes you may already know – and it doesn’t hurt to have a few reminders if you already know these investment points: 

IRAs can be a wise choice for an investment asset. However, if you’re not carefully reviewing your investment strategies where IRAs are concerned, you can pay for it in the end. Your goal should be to manage your IRAs in such a way that the after-tax value won’t haunt you later.

Once you turn 70.5 you are required to withdraw a certain amount of money from traditional IRAs every year and pay income tax on the amount withdrawn. These required minimum distributions are also called RMDs. Make sure you get the facts with your RMDs; this is not the age to try to recoup lost ground.

If you’re still working and know you need to put more toward your retirement, you have a chance to do so. It’s called catch-up contributions, and if you are 50 or older, you can start socking away an additional $1,000 in your IRA this year, which puts your max at $6,500 for 2015.

In many cases, your contributions to your tax-deferred accounts are made through your earned income at your job. However, if you’re married and your spouse doesn’t have an income, or a very small income, there are exceptions for your situation. You may be able to make contributions to separate IRAs for the maximum amount of $5,500 for each account ($6,500 if 50 or older).

Another aspect of your investments you might have missed is that different types of accounts will be placed under different tax rules and tax rates that change. It’s not advisable to predict the changes or try to plan a strategy around these changes. However, diversification where taxes are concerned can be a smart play. Talk to your investment advisor about how to play it smart and
diversify so you don’t run the risk of having all your investments tied into a high-taxed account.

You will also need to name a beneficiary, and this too, takes some thinking. With at least one-third of all marriages ending in dissolution, you need to make sure your beneficiaries are always updated.

Our team of commission-free investment advisors at Family Investment Center can be part of your next move for managing your IRA. We can help you navigate considerations like taxes, withdrawing in retirement, and diversification. Contact us today and move a little closer to your idea of retirement.

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Got a 401(k)? Four Tips That Might Help You Join the Million Dollar Club

b2ap3_thumbnail_Millionaire-1_20140804-230042_1.jpgWhile the average 401(k) balance, $91,300, may not be enough to get a person through a lengthy retirement, thousands of people are becoming millionaires thanks to their diligent work in socking money away into their 401(k) accounts.

According to Fidelity Investments, which is one of the largest providers of
401(k) plans, 72,000 clients had built their accounts up to the $1 million mark by the end of last year. What is promising about this figure is that it is twice the number Fidelity saw in 2012. Of the 401(k) millionaires sampled, nearly 10 percent had more than $2 million saved.

You may have noticed a substantial dip in your 401(k) balance when the economy went south in 2008 and 2009, but thanks to the recovery, many stocks have recovered and investors are seeing growth – which is helping to push more of them over that $1 million mark. Fidelity says that those who are millionaires had an average of 72 percent of their holdings in equity mutual funds or equities and only 12 percent in company stock. This is in line with what financial advisors talk about when diversification is the topic. Having too much of the 401(k) portfolio in company stock is most often considered a risky investment.

If you think a booming stock market is the only key to the success of an investment fund, think again. Here is what the research from Fidelity revealed about the investment habits of smart retirement planners:

·         Meeting the Employer Match

Don’t miss out on that “free” money by not putting in the maximum that your employer will match in your 401(k). For the 401(k) millionaires, meeting that match contributed to an average of $35,700 per account in 2014.

·         Contributing 10 to 15 Percent of Salary

If you can ramp up your savings to 10 or 15 percent, you’ll have a better chance at a strong retirement fund. For example, the average savings rate in 2014 was $9,670; for the millionaires, it was $21,400. Not everyone is going to have that kind of salary, but the lesson is simple – if you’re putting more away, you’ll have more for retirement.

·         Using the Catch-Up

A “catch-up” contribution allows people aged 50 and older to make a higher contribution to their plan.

·         Consistency

The best savers are those who don’t sway from their goals and don’t borrow against their retirement.

Let an investment advisor assist you in making sure your 401(k) is properly diversified and that you aren’t taking on more risk than you should.  For more information, contact Family Investment Center today.

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Are You in the One Percent? Investment Advisors Can Offer New Perspective

b2ap3_thumbnail_Investing-8_20141018-205524_1.jpgNinety-nine percent of Americans probably don’t have much in common with the wealthiest one percent, but there are investment tips we can observe and learn from them.

According to a study by SigFig, the
wealthiest one percent did better than 40 percent of everyone else in their investments in 2014. What are they doing with their investments that 99 percent of the other investors aren’t?

The wealthiest people in America are looking to their
investment advisors for advice, but that’s a strategy that can apply to all investors, too. What the richest people in the world do with their investments, the way they approach them and the mindset they have going into investing, can apply to all levels of investors. For instance, avoid letting emotions come into play where investments are involved. Investment advisors nationally are making this suggestion.

Emotions toward the future can be challenging to control. Throw money into the mix and the situation gets even more difficult. Some investors react quickly to market fluctuations or media stories. Others may see investing as some sort of a game. According to the article, wealthy people maintain a consistent approach to investing.

Another tip to consider that many one-percenters keep in mind is in regard to taxes.
Warren Buffet famously said that his secretary pays more taxes than does he, which may or may not be good in the end -- but for investment purposes, you need to take advantage of every tax break allowed to you. Many investors don’t know what advantages are available to them because they haven’t sought the advice of investment advisors. Tax advantage strategies involve keeping an eye on improved performance while simultaneously looking out for tax rates and making sure they’re in check.

Yes, the market ebbs and flows; it rises and falls and can be a source of stress for those who are risk-averse. However, many people who stay in the market eventually see a positive return. It’s wise to watch the market, but not to get revved up about all the hype that gets generated over hot new stocks.

While even the wealthiest among us will see wealth shift from time to time, utilizing professional investment advisors for guidance means the experts are doing the hard work for you.
Family Investment Center is ready to offer that guidance to you today in a commission-free environment, whether you’re part of the one percent or the other 99.

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Financial Planning Can be Alarming: 31 Percent Haven’t Started Saving or Investing

b2ap3_thumbnail_Retirement-Planning-2.jpgThe statistics are alarming when it comes to Americans and their rates of planning for retirement. According to the Federal Reserve Board, 31 percent have not saved for retirement and haven’t put a plan in motion to get them on track for investing for their golden years.

What’s holding everyone back?

Good old-fashioned fear. The answer, it would appear, is fear. The markets fluctuate, sometimes sharply. Often, this doesn’t work well for the risk averse who let their emotions dictate their
financial future. While they think they’re doing themselves a favor by staying out of the market, they miss opportunities to allow their money to work for them.

Reluctance after the recession. Many thousands of potential retirees had to put off their retirement plans in 2009 after 401(k) and IRA accounts took a hit. When the market takes huge hits like it did during the recession, it only fuels a general fear of the market. However, for investors who ride out the bad times and leave emotion out of their investment decisions, they can typically accept the good with the bad and come out on top -- especially if they have a professional advisor on hand to assist.

Lack of education from an experienced (and unbiased) investment planner. Dr. Michael Guillemette, a professor at the University of Missouri and a certified financial planner™ professional, looked into how
emotions play into investment decisions and financial planning. He found that advisors who focused their discussions on value-added aspects of the investment process can often assist their clients in easing the emotions related to the market.

Emotions related to spending habits can be a real barrier. Emotions often play into decisions regarding what you spend your money on and how much you put into your investments. For instance, let’s say to meet your retirement and financial planning goals, you should put another $200 a month in your retirement account(s). You can free up $200 a month by simply cutting out that cup of premium coffee you stop to purchase before work every morning. It makes sense to cut out this expense because the numbers are glaring at you from your spreadsheet. However, what if that stop in the morning is about more than just the caffeine? What if that stop is part of your morning routine that gets you in the work mindset? The coffee suddenly becomes worth more than what you spend on it. 

Professional investment advisors will work through these decisions with clients and find areas that pit emotional costs against financial costs, ultimately working out some new strategies or an “amendment” to help a person achieve their financial planning goals. A trusted, experienced advisor might explore new solutions for spending habits, and few will allow fear, emotions, and other aspects of investing to get in the way of a client moving forward.

The professionals at
Family Investment Center have worked with clients through the attitudes, habits, and patterns that are often part of the investment process. Our team can look beyond the spreadsheet and help you work through the emotional decision-making processes that have merit and those that don’t have merit. Contact us today and we’ll discuss your concerns and your options, which can equal a brand new, confident perspective for 2015.

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401(k) Confusion Got You Down? Contact an Investment Advisor

 

b2ap3_thumbnail_401K-1.jpgFeeling restless at work? You’re not alone. According to the U.S. Bureau of Labor Statistics, workers are switching jobs every 4.4 years on average. USA Today recently highlighted the situation, stating that for people who take advantage of their company’s 401(k), there may be as many as six different options when a job switch approaches. The situation of 401(k) confusion looks to continue, as the next generation of workers – the Millennials – are predicted to spend three years or less at a job.

You likely already know you have options when it comes to the money you have in your 401(k). Some employers will let you leave it there without making future contributions. Rather than having multiple accounts, you can take that money and transfer it to your plan at your new place of employment. Few
investment advisors would suggest that you cash out your 401(k) due to tax implications, but that is also an option (that may also come with penalties). Finally, you can convert to an in-plan Roth or make a total Roth conversion.

If you make 401(k) contributions automatically through your paycheck, the decision on what you will do with your account when you quit or retire will be a very important decision. For instance, for the person who is under the age of 59.5 and decides to pull out of their 401(k), they will incur a 10 percent tax penalty. Worse yet, the loss on potential gains should that money have been left in the market could be thousands of dollars.

One of the big advantages of leaving your money in the company plan is that the Employee Retirement Income Security Act of 1974 protects it. When you move that money to an IRA, it’s only protected at the state level with creditor protection. This can differ per state, so ask your financial advisor what’s going on in your state.

There are also advantages of rolling your money over to an IRA. For instance, you generally have more choices for investments in an IRA, and there may be more protections for them than what you’ll find in a 401(k) during bad economic times, such as the recession in 2008.  Also, an IRA allows for simplification through consolidation.  If you have multiple plans from past employers, you may roll them all over to one IRA account instead of having accounts with multiple custodians. 

When it comes to estate planning, IRAs are easier to manage because you can actually create different accounts, including “stretch” IRAs. You have more flexibility with an IRA in that you can take distributions whenever you want. You can gain some added benefits with Roth IRA than you can with the Roth 401(k), which is another topic you should discuss with your financial advisor. 

The best-laid plans are often made constructed with the guidance of a professional advisor.
Family Investment Center has advisors with years of experience in advising clients about 401(k)s and IRAs. To end the confusion or speculation about what you need to do when you leave a job, contact the professionals at the Family Investment Center today.

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Reading the Praises of Proper Investing

b2ap3_thumbnail_Book-1.pngA new book on investing by Tony Robbins is gaining the praise of critics, but not just any critics. Professionals from the investment industry are speaking out, including Dan Danford, founder and CEO of the Family Investment Center. Danford is impressed with the author’s insights for the average investor – a segment of society that the investment industry has always been slanted against. Robbins’ book explains asset allocation, fiduciary advice, fees for trading or mutual fund management and many other facets of the industry that investors need to know about. Robbins also approaches the subject like a good teacher – providing helpful lists to summarize his lessons on investing.

This book has the power to change investing forever. Robbins explains for readers what I've taught select clients for over three decades, and he has the reach and platform to transform the investing landscape. My guess is that an informed public will demand some revolutionary changes in investing.

You see, the investment industry has always been slanted against average investors. That slant is both structural and historical. For decades, investment products - stocks, bonds, mutual funds - have been manufactured mainly for the seller. They've been built around a great story, and laden with rich cash and benefits for the selling stockbroker or fund manager. Eventually, the product finds its way to an actual investor who may or may not gather some rewards for owning it. No matter the rewards, though, it would have/could have been better without the industry's layers of rich compensation.

Tony's book explains all that and so much more. It is a quality educational lesson for investors. It approaches all the topics that I relish for clients; it discusses asset allocation, fiduciary advice, fees for trading or mutual fund management. He offers up considerable detail and keeps the discussions relevant and lively. His interviews with investing titans alone are worth the price of the book (Warren Buffett, John Bogle, Charles Schwab, Carl Icahn, Boone Pickens, and others).

Like any good teacher, Tony builds some helpful lists to summarize the lessons. The book's sub-title "7 Simple Steps to Financial Freedom" is a fine start. Then he shatters 9 financial myths and offers 5 steps to speed up financial success. The net result is a personal blueprint that is both easy to understand and follow. Readers can level the playing field and discover where to go for genuine help and advice.

And that is the power of this book. Tony Robbins offers a tour behind the secret curtain. I say thanks Tony for all the good work, and I welcome you and your readers into the better world of fiduciary investing.

 

 

 

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Dan Danford Featured Speaks About Math and Anxiety in Wall Street Journal

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b2ap3_thumbnail_Money-1.jpgDan Danford, founder and CEO of Family Investment Center, was recently featured in the Wall Street Journal’s column “Voices,” which features contributions by professional wealth managers. Danford focused on the subject of emotions and money, and the math anxiety people often face when it comes to investments. He notes in the article that many forms of anxiety toward investing are grounded in early math experiences or a lack of knowledge about the tools professional advisors can use. This can result in fear investing and hold many Americans back. 

Humans are inherently emotional, which can be a barrier to making good decisions about finances and investing. Unfortunately, many people don’t take the time to learn finance basics and instead rely on instinct (emotions) to guide them. Keep in mind that many times, making the right decisions involves getting the “big” things right, which starts with having the right emotions when it comes to money.

To overcome and work through
emotions toward money, temper the investment information you get online and through television and magazines with sage advice from people who know about wise investment strategies. Rather than deal with your math anxiety (or investment anxiety) by studying what leaders have to say about investing, start first by looking at where you’re spending your money. Here are some other suggestions:

Is overspending at the root of your math anxiety and impacting your investing? You are likely contributing to the nearly $200 billion (the amount goes up every year and could hit $300 billion by 2016) people spend annually on products bought online. An attachment to things can significantly impact a person’s behaviors and attitudes toward money, and can keep them from moving forward and seeking guidance from a professional investment manager.  

Or…are you holding onto your money in harmful ways? Being overly risk-averse may be at the source of your anxiety toward investing. Instead of putting money to work in stocks and bonds, it could be resting in a savings account that is not growing. When you talk to an investment advisor, you can start to understand that your anxiety about investments can be faced head-on -- and likely will be calmed when you learn more about the professional tools and experience advisors put into each task.

Another form of money anxiety is displayed in the desire to “be everything to everyone.” Some investors face anxiety about providing for children’s futures and even grandchildren, yet they also have very real concerns about their own parents as they age (as well as their own retirement needs). It can be overwhelming, but working with professional tools like Social Security maximization software and other investment calculators can bring clarity and help you with your direction. Professional investment managers are trained in making the most of these tools and can help take some of that anxiety off your plate. (After all, it’s what they do every day!)

Parting ways with your emotions toward money, and instead putting your trust in a professional advisor, can make all the difference to you and your family in 2015. Reach out to our experienced team at
Family Investment Center. We bring nine advanced degrees or certificates to the table and we are focused on your goals (while offering top investment tools and discernment).

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Investment Advisors Offer 401(k) Tips Everyone Should Know

b2ap3_thumbnail_Retirement-4.jpgYou’ve worked for decades and have established a nice retirement lump of cash in your 401(k). You’re getting close to retirement and you think it might be time to make some changes – but don’t get too jumpy. There are some things to keep in mind before you risk tripping into an investment blooper.

Don’t Make Sweeping Shifts
It’s a common misconception that as you get closer to retirement you need to get out of stocks and bonds. The reality is that if you retire at 65, you’ll likely have at least another 10 years (average life expectancy for males is age 75 and age 81 for women) where you’ll be withdrawing that money for expenses, which means a portion can still be building on itself in stocks and bonds. You aren’t using up your entire retirement savings in one year, so let it keep working for you.

Be Aware of Risk and Risk Aversion
Do you know exactly what the risks are with each one of your investments? People who run into trouble are often the ones that have not clarified the risk associated with their investments.
Investment advisors will tell you that while risk aversion can keep you from some significant gains, jumping into investments without proper guidance can put you in a worse situation come retirement day.

Balancing Social Security and 401(k)
Maybe you’ve considered stopping your pre-tax contribution to your 401(k) so that you’ll see higher benefits in Social Security? This is a popular one for investment “experts” to tout, but you want to think carefully about this. While the 401(k) contribution does lower your income tax, it doesn’t affect your Social Security tax and FICA payments. By this logic, you’d be smarter to put more in your 401(k) as you get closer to retirement.

Talk to Investment Managers
It’s commendable that you’re researching your options as you
plan for retirement. Financial literacy is in short order today. However, there are so many loopholes, pitfalls, and complex situations involved with investments that many successful investors work with investment advisors (they work with other peoples’ money on a regular basis and have an understanding of the changing investment market). They have the knowledge required to keep your nest egg in the right place working for you, and they have more time to devote to it.

The investment advisors at
Family Investment Center are ready to help you look at the changes you need to make as you near your retirement. If you’ve tried the do-it-yourself approach and/or have consulted with commission-based brokers or financial planners and didn’t come away with a winning situation, perhaps it’s time to consider our services. Whether you’re already retired or still working, we offer the solutions that can give you confidence for what tomorrow holds.

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