When you are making an investment decision, it is important to remember these five factors and the how they effect your decision-making process. These variables include:
1. Time Horizon
2. Risk Capacity
3. Expected Return
4. Asset Class Preference
5. Tax Status
Are you looking to work with a financial planner? Are you confused of who you should contact? Do you know how the adviser you are meeting with is getting paid? Do you want someone who is working for your best interest? Consider the benefits of working with a fee-only adviser who is held to a fiduciary standard. Check out the video above for more details.
For Immediate Release
February 3, 2011
www.babusinessconference.com
Broken Arrow Area Chamber of Commerce Presents the 2nd Annual Business Conference
Businesses Learn How to Succeed and Finish Strong
BROKEN ARROW, OKLAHOMA – The Broken Arrow Area Chamber of Commerce will host its 2nd annual business conference designed to help business owners beat the odds and improve their chances of succeeding. The theme for this year’s conference is “Finishing the Race” and will be held on Thursday, March 3rd and Friday, March 4th at the Northeastern State University – Broken Arrow Campus. In addition to the dynamic speakers, attendees can visit local businesses at the Conference Expo and attend the Business After Hours networking reception.
Speakers at this year’s conference are the following: Scott Klososky – Former CEO of three successful startup companies who applies his skills to help organizations thrive, Heather Rumley – Founder of ClearWater Performance Group who works with senior level executives to improve their organizational performance, Dr. Brian Epperson – Founder and CEO of Human Performance Advisors who works one-on-one with business leaders to help them navigate critical issues that impact them professionally, Kelly Riggs – Founder and President of Vmax Performance Group, who is a powerful speaker and dynamic trainer in the fields of leadership, sales development, and strategic planning, and Jack Nation – Running coach who has participated in numerous 5Ks, 10Ks, half marathons, full marathons, Duathlons, and Triathlons.
Business owners who want to increase their bottom line, need innovative ideas on successful small business practices, are looking for ways to “get out of the box”, and want to be challenged to step their business up to the next level should make plans to attend this information packed conference.
Registration and additional information about the conference can be found at www.babusinessconference.com or by contacting the Broken Arrow Area Chamber of Commerce at (918) 251-1518.
Contact: Vanessa Komara (918) 729-2616
Brenda Senter (918) 251-1518
Question: I was wondering what documentation you are suggesting your clients submit to claim the $6,500 home-buyer’s tax credit.
Answer: Here is what I would do for a client
If you follow this guideline and your claim is legitimate, you should not have a problem receiving your refund. Keep in min you will probably need to wait 6- 8 weeks to get your refund, so please be patient. For more information, please visit http://www.irs.gov/newsroom/article/0,,id=204671,00.html.
I get asked a lot of times what is a “fee-only” advisor and why should I work with one? Let me answer these frequent questions. First, a fee-only financial advisor’s compensation comes directly from the client. The advisor does not receive any commissions or referral fees from selling financial products, such as annuities, insurance and investments. A fee-only advisor may receive compensation from assets under management, retainer fees or an hourly rate. I focus the majority of my business on retainer fees, however, I do some minimal pay per hour projects.
For information sake, a “fee-based” advisor receives compensation from both charging a fee for completing a financial plan and also selling you financial products that come about as a result of the planning recommendations in the plan. I call these folks “double dippers.” Many times the financial plan is offered at severe discount. Their real profit comes from selling you the products they recommend. They beleive if they charge you a fee for their advice you are more likely to implement their advice. Some “fee-based” planners criticize “fee-only” advisors because they say “fee-only” advisors offer planning without implementation.
A commission-only advisor makes his compensation strictly from selling you financial products that have a load or commission attached to them. In my humble opinion, I tend to trust “commission-only” folks more than “fee-based” advisors because you know they are only getting paid from what you buy from them and they do not have any ulterior motive in offering you a “plan”.
I personally believe that each of these advisors have a place in the financial world, however, the main thing I ask from each one of them is to disclose to the client how they are going to get paid and allow the client to make the decision.
The #1 reason why you should work with a fee-only advisor is they can give you “objective, unbiased” financial advice free of the potential conflict of product sales. Yes, a fee-only advisor is still selling a product to you. The product he is selling is an education and trustworthy advice.
When it comes to you and your money follow this common rule:
“Know how your advisor gets paid and you will likely find out the quality of his advice!”
http://www.youtube.com/watch?v=C3GtxtWSZxE
Even with the equation of snacks to cash equivalents and the fact that Mr. Robinson eerily resembles my father-in-law, there’s a great message hidden in here: the markets are resilient, diversify and RELAX. Oh, and learn how to hunt.
I believe one of my greatest responsibilities is to help my clients avoid extremes. It seems like there is a lot of “extreme” talk right now. I hear it everywhere. Regarding politics, this is either the worst time in American history (if you are a conservative) or this is the beginning of a new era of Enlightenment (if you are liberal). I hear it with sports as well. How many people said the last Super Bowl between the Saints and Colts was the best Super Bowl ever? How many times did you hear reporters ask Coach K if he thought this year’s Duke team was the best ever? How many people are already comparing LeBron James to the all-time greats of NBA history? On the other hand, how many people would watch “Makeover: Home Edition?”
The reason why I say this is to show you how all this “extreme” talk effects people’s view of their finances. When people believe the investments they own will either go to one extreme or the other, then they will make an irrational decision not based on the facts, but based on fear or foolishness. It is my job and the job of any Financial Advisor worth the fee you pay him to help you avoid the “extremes” regarding your financial life and financial decisions. It is okay to be concerned about the future of the economy and to invest more conservatively or to feel a need to invest more aggressively because you think the market will go up. However, it is not okay to go extreme! The saying is true: Do not put all your eggs in one basket. The basket is your emotions and it is important to know the facts and to make decisions based on facts, not the latest idea conjured up by the talking head on TV or the “guru” you read about in the paper.
If you are looking for financial guidance, I encourage you to seek out a Financial Advisor that can help keep you from making “extreme” decisions about your money. You do not want a “yes-man” who is only looking out for themselves but rather, you need to look for an advisor that will keep you and your emotions in mind, so you do not make inappropriate long-term financial decisions.
When I first started this blog, I wrote an entry about defining and achieving financial security. As I talk to more and more people about their experiences over the last 18 months during what the popular culture has called the “Great Recession,” I am witnessing some common themes of concern:
1. The stock market is up considerably since its low in March of 2009, but how do we know it won’t “crash” again tomorrow? We don’t know! It used to be common knowledge and belief that you knew you would have some ups and downs in your investments, but in the long run you would achieve profits by investing in market. From the conversations I have had with many people, it seems like there is this general sense they are waiting for the “next shoe to drop.” It reminds me of the weeks and months after 9-11 where I was glued to the cable news networks waiting to hear about the next terrorist attack. I sense an underlying fear in most individuals and business owners. They are waiting to see how everything works itself out. The danger of this view is that you become a market timer and try to “guess” what your latest stock holdings and the economy as a whole will do. The danger is you get so consumed with things you can’t do anything about and fail to make a difference in your life and the lives of those you care about the most.
2. What will higher taxes do to my future plans? I have been hearing this one especially since the passing of the health reform bill. There is a general confusion of what is and what is not in the legislation and I think people are skeptical of what may happen to their individual tax situation in the future. For the clients I work with, I tell them there is one thing for sure: their taxes will go up! How much their taxes will go up we do not know yet. I tell them it is important we continue to plan and make the best tax and financial planning decisions we can at the time with the information available to us.
3. How do I know I have reached financial security? I hear this quite often. An individual may also say, “how do I know I will not run out of money?” These are important questions to address no matter what the economy and the stock market are doing. Where many people fail in their quest to achieve financial security is they fail to define what financial security is for themselves and instead they allow the “talking-heads” on TV or the magazine covers to define it for them. Until you define what is most important to you and lay out a plan to achieve it, you will never reach financial security.
So these are some of the concerns people have right now is these difficult times, however, with all the chaos it is important to remember you are in control of your situation more then you believe. You need to control the things you can, such as how much you save, how much you spend and what you invest in and let everything else take care of itself.
One of the greatest risks that I see in a lot of people’s financial portfolios is that they do not have enough cash. My business serves a wide range of individuals and families and I get to review their financial life from an objective perspective. I have found some couples, who even after the market downturn in the fall of 2008, still have not learned the value of having “ready cash” and “emergency cash.” I think some people believe that an “emergency” will not happen to them so why should they keep so much in cash. My job as a financial planner is to recommend to them what I believe is in their best interest.
I am not against investing and taking risk. However, I am against investing and taking risk before you are ready. I do not care how young you are; if you do not have proper cash set aside in the event of an emergency you should not be investing in the stock market.
In my recommendations to clients, I follow a few basic principles that I learned from Bert Whitehead, the founder of the Alliance of Cambridge Advisors. First, if you are a W-2 employee, you should keep a minimum of 10% of your income in a interest-bearing savings account. I call this the “ready cash” account. If you are self-employed or retired you will want to keep a larger percentage of your income in “ready cash.” Next, I recommend you keep 2 times your “ready cash” inside of your 401k or Traditional IRA* invested inside of a money market or government-backed fund. However, if 20% of your mortgage balance is higher then 2 times your “ready cash” then you will want to set aside that amount instead. I know this may seem like a lot of cash but the best feeling your financial plan can offer you is security and if you know you have proper amounts of cash in your portfolio then you have the freedom to take appropriate risk in other areas of your investment portfolio.
*I can hear it already. You might be asking why I recommend to keep emergency cash inside of a 401k or Traditional IRA. Well, let’s just save the answer to that question for a later blog entry.
“Control the Things You Can” was written by Tedd Oyler, a member of the Alliance of Cambridge Advisors who practices in Saugatuck, Michigan. This article was originally published as the second part of a series on how to do a financial check-up.
The lament of the powerless goes something like this: “It doesn’t matter how hard I work–the bills just keep piling up; the stock market and the cost of living are killing me; the politicians are ruining everything.” You may have had these, or similar, thoughts before. This is sad, for it is unnecessary to feel like you have no control over your financial future.
Our information culture offers a range of financial data and “advice,” ostensibly to help you take control of your financial life. Perhaps you listen to daily (or even hourly) market reports.
Perhaps you are concerned that the Fed is changing interest rates.
Perhaps you care about the pundits’ predictions as to what the economy will do over the next quarter, or year, as if what they think matters. Perhaps you even read books on investing, and there are certainly enough of those. If we take seriously the notion that we can do something about our financial health, and if we acknowledge that money is but a tool that we can learn to master, then we are ready to look at what things we CAN control in our financial lives.
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