Archive For The “Finance” Category

Protect your final wishes and your family’s peace of mind

Protect your final wishes and your family’s peace of mind

By J. Kimberly Cantwell, Modern Woodmen of America

Each of Laura’s siblings thought they knew their mother’s final wishes. However, when she became ill they couldn’t agree on her care. When she passed away, they struggled to divide what she left behind.

Like her mother, Laura doesn’t consider herself wealthy. Creating an estate plan seemed unnecessary. After being at odds with her siblings and paying a large portion of her inheritance in taxes, however, Laura’s reconsidering.

Your estate includes your car, home, bank accounts, investments, life insurance and personal belongings. Your estate plan determines how, when and to whom your assets will be distributed after your death.
To read more, pick up a copy of the September/October issue of LiveIt magazine.

Strategies for Your Investment Garden

Strategies for Your Investment Garden

If you’re a gardener, your busy season is at hand. Could the skills you deploy at gardening be transferred to other areas of your life – such as investing?

Here are a few ideas for doing just that:

Establish a timeline. As a gardener, you typically follow a well-defined timeline. You need to get the soil ready a few months before you want to plant, and you need to plant at different times, depending on what plants you choose. You even need to set up a schedule for watering, feeding, weeding and other garden care. As an investor, you may also need to observe a timeline.

During the early and middle stages of your career, you probably need to invest primarily for growth, so you can build resources for a comfortable retirement.

To read more, pick up a copy of the May/June issue of LiveIt magazine.

401K Roth vs. Traditional – Which is Right for You?

401K Roth vs. Traditional – Which is Right for You?

For many years, employees of companies that offered 401(k) plans only faced a couple of key decisions – how much to contribute and how to allocate their dollars among the various investment options in their plan. In recent years, a third choice has emerged: the traditional versus Roth 401(k). Which is right for you?

To begin with, you need to understand the key difference between the two types of 401(k) plans. When you invest in a traditional 401(k), you put in pre-tax dollars, so the more you contribute, the lower your taxable income.

Your contributions and earnings grow tax-deferred until you begin taking withdrawals, which will be taxed at your ordinary tax rate. With a Roth 401(k), the situation is essentially reversed. You contribute after-tax dollars, so you won’t lower your taxable income, but withdrawals of contributions and earnings are tax-free at age 59-1/2, as long as you’ve held the account at least five years.

To read more, pick up a copy of the March/April issue of LiveIt magazine.

Help protect vulnerable family members from scam artists

If you have older family members whose cognitive functions or decision-making abilities have declined, or who are lonely or recently widowed, you might need to help protect them against financial scams. What steps should you take?

First of all, try to gain a good sense of their overall financial activity. Look for red flags, such as a reluctance to discuss money matters, consistently unpaid bills, unexplained withdrawals, mysterious wire transfers or a sudden need to purchase large quantities of gift cards. And watch out for new “best friends” or caretakers who show an unusual interest in your loved one’s finances.

Whether or not you’ve observed any of these activities, you can help your elderly family members by making these moves:

Have checks (such as Social Security payments) directly deposited. You can help your family members avoid a lot of potential trouble by having their checks deposited directly into their bank accounts.
Seek permission to become a joint account owner. By becoming a joint account owner on your elderly family members’ checking and savings accounts, you can review statements for suspicious activity. Of course, your loved ones may be initially reluctant to add your name, but if you have a good relationship with them, you should be able to explain the benefits.

Shred bank statements, credit card offers and notices of lottery or sweepstakes winnings. One of the most useful gifts you can give to your elderly family members may be a shredder. Encourage them to use it to shred old bank statements, credit card offers and other financial documents.

Get on a “do not call” list. Telephone scammers are persistent and devious. By registering your family members’ house and cell phones at, you may be able to reduce their exposure to unwanted calls.

Obtain power of attorney. By creating a power of attorney, your loved ones can designate you or another trusted relative or friend to assist with their finances now – for day-to-day assistance and protection from scammers – and later, should they become incapacitated. Again, you will need to employ some sensitivity when discussing this issue.

Check references of caretakers. As mentioned above, some caretakers are, unfortunately, dishonest. Before you hire one, check out this person’s references. And even when you do, be careful – scam artists have been known to use accomplices as references, so you will need to be thorough in your research and questions.

Get to know your family members’ financial advisors. If possible, become acquainted with your older family members’ financial advisors. Any reputable advisor will welcome a connection with their clients’ loved ones. And if you are involved in any estate plans, this multi-generational relationship will prove beneficial for everyone.

Ask to meet any new “friends” they have met online. When someone is lonely, they become vulnerable to online friendships. Sometimes, these new friends make promises of meeting, but never show – and then they suddenly need money for one reason or another.

It can be challenging to guard against all threats posed by the scammers of the world. But by staying alert and taking the appropriate preventive actions, you may be able to help safeguard your loved ones’ financial security.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.


Financial Focus – Diversity with Bonds, Even if Rates are Low

Financial Focus – Diversity with Bonds, Even if Rates are Low

If you’ve needed a mortgage or another type of loan over the past several years, you’ve probably appreciated the historically low interest rates we’ve experienced. But if you’ve wanted to own fixed-rate investments, such as bonds, you might have been less pleased at the low-rate environment. Now, interest rates may be moving up somewhat, but even if they don’t hit the heights we saw in previous decades, you can still gain some key advantages from owning bonds.

One of the biggest benefits provided by bonds is their ability to help you diversify a stock portfolio. Stocks and bonds often move in different directions – in fact, the same economic or political forces that can be bad for stocks might be good for bonds, and vice versa. Consequently, if you own a reasonable percentage of bonds, you may not be as vulnerable to the impact of those inevitable downturns in the stock market. Keep in mind, though, that diversification can’t guarantee profits or protect you against losses.

Of course, the other major attribute of bonds is the regular income they provide through interest payments. Unless the issuer defaults – an event that’s generally unlikely, assuming you purchase quality, “investment-grade” bonds – you can count on receiving the same payments for the life of your bond. Then, once your bond matures, you’ll get back the original principal, again assuming the issuer doesn’t default. The ability to receive regular payments may help improve your cash flow and possibly help you avoid selling stocks to meet unexpected costs, such as an expensive car repair. And holding your bond until maturity can help you plan to meet specific goals; for example, if your child will be starting college in five years, you can buy a bond scheduled to mature at the same time, providing you with an influx of cash you can use for tuition and other school expenses.

Still, despite the benefits of diversification, steady income and the repayment of principal, you may find it hard to ignore the relatively low interest rates you’re seeing on your bonds. This is especially true if market rates rise, causing the value of your bonds to fall. (Investors won’t pay you the full price – that is, the face value – of your bonds when they can buy new ones issued at higher rates. So, if rates have risen and you want to sell your bonds before they mature, you’d have to offer them at a discount.)

One way of coping with interest-rate movements is to build a “ladder” of bonds of varying maturities. When your short-term bonds mature, you can reinvest the proceeds in newly issued bonds that may offer higher rates, while your longer-term bonds continue to pay you greater income. (Generally – but not always – longer-term bonds carry higher interest rates than short-term bonds.)

Even within this type of bond ladder, though, you will want to diversify your holdings among different types of bonds from different issuers. In any case, be sure to evaluate whether a bond ladder and the securities held within it are consistent with your investment objectives, risk tolerance and financial circumstances.

Don’t ignore bonds when constructing and maintaining your investment portfolio. No matter what interest rates are doing, you’ll find that bonds can play an important role in your portfolio.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.







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Be an “environmentally friendly” investor

Be an “environmentally friendly” investor

On April 22, we observe Earth Day, a worldwide event focusing on protecting the environment. As a citizen of this planet, you may want to take part in Earth Day activities. And as an investor, you can learn some valuable lessons from the environmental movement.

            Here are a few ideas to consider:

  • “Recycle” proven strategies. Over the past few decades, we have discovered ways of bringing new life to objects we would have previously thrown away. When you invest, you also don’t need to discard things you’ve used before – such as proven investment strategies. For example, one tried-and-true technique is to simply purchase investments appropriate for your needs and risk tolerance, and then hold these investments until either your situation changes or the investments themselves are no longer the same as when you bought them. (To illustrate: You might have bought stock in a company whose products or services are not as competitive as they once were.)
  • Avoid “toxic” investment moves. Since the first Earth Day in 1970, we have had some success in identifying and eliminating toxins in our air and water. You can also find – and avoid – “toxic” investment moves. One such move is chasing a “hot” stock. By the time you hear about this stock – from a friend, relative or even a television or internet commentator – it may already be cooling off. Even more importantly, it might not be suitable for your needs, either because it’s too risky or because you already own several similar stocks. “Hot” stocks aren’t so hot if they aren’t right for you.
  • Reduce “excess” investments in your portfolio. Environmentalists stress the need for all of us to reduce our “footprint” on earth – that is, we can help improve the environment by owning less “stuff.” The same idea can also apply to investing. If you took a close look at your portfolio, you might find investments that you’ve held for years but whose purpose is no longer clear to you. Some may even be duplicates, or near-duplicates, of other investments. You might be able to improve your financial picture by getting rid of this “clutter.” By selling investments you no longer need, you could use the proceeds to purchase new investments that may be far more effective in helping you meet your objectives.
  • Plant “seeds” of opportunity. Many Earth Day lesson plans for students emphasize the value of planting gardens and trees. As an investor, you, too, need to look for ways to plant “seeds” of opportunity so that you can eventually harvest the results. Specifically, look for those investments that, like trees, can grow and prosper over years and decades. Of course, growth-oriented investments carry investment risk, including the possible loss of principal. Yet, to achieve your long-term goals, such as a comfortable retirement, you will need some growth potential in your portfolio. You can reduce the level of risk by owning a mix of investments – including less aggressive vehicles, such as bonds – in your portfolio.

Each year, Earth Day comes and goes. But its messages have had a profound impact on generations of people interested in preserving our environment. And translating some of these lessons to the investment arena can have a powerful effect on your financial future.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.


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