When to Seek Naperville Wealth Management Services

Do you want to make your money work for you? There are many ways in which you can get more value out of your money and increase the funds you already have. The only way to discover which techniques and strategies will work best for you and your goals, however, is to work with a trustworthy Naperville wealth management company, one that has your best interests at heart and that strives to put you first in everything in does.

A good Naperville wealth management firm can help you with many things, but one of the most important is investment. When you invest your money wisely, you put your money to task for you. Wise investments equal big earnings, which can provide you and your family with the security and stability you need. Poor investment choices, on the other hand, can mean that your hard-earned money is lost or goes to waste. Without the help of an experienced advisor, knowing the difference between smart investments and not-so-smart ones can be a challenge, so don’t invest until you’ve got expertise on your side.

Modern life is filled with responsibilities, and those responsibilities will extend into the future. Any good wealth management firm will realize this and will help you to create realistic financial planning strategies that will assure you and your loved ones live a comfortable life. With the right assistance, you can map out a doable plan for retirement, the education of your children, life insurance, and more.

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Avoid Sneaky Bank Fees

Learn how to ferret out hidden charges and protect more of your hard-earned cash. 

By the editors of All You

Frustrated by fees cropping up on you bank statement? Here are a handful of tips on how to avoid ATM charges, account fees and other areas that can cause dollars and cents to leak out of your accounts.

1. Check to see where your money is going. 

•     Keep close tabs on your bank accounts. Most banks charge a monthly fee if you don’t maintain a minimum balance.
•     Do your due diligence before jumping on the online bill pay bandwagon. A few banks are making customers pony up to pay bills online.
•     Beware of added costs for offline help. Nowadays, a fee $3 to $5 per transaction just to get a human being to assist you is not so unusual.
•     Reconsider mobile deposits. While it’s cool to snap a photo of your check and text it to your bank, the convenience might cost you.
•     Look into what card replacement will cost you. If your card is lost or stolen, you might have to pay for a new one.

2. Be proactive in finding out how to pay less in fees. 

• Scan your statement carefully every month, checking for any new fees.
• Speak to a banker. You may be able to keep a minimum balance in your account, open a savings account or use direct deposit to avoid charges.
• Change your habits. Visit your bank’s ATMs instead of going out of network; move money from savings to checking to cover big checks and avoid overdraft.
• Open every envelope. Banks must warn you if they impose new fees, so open all mail, even if it looks like junk.

3. Can’t avoid being nickeled-and-dimed? Find a better bank.

•        Try credit unions and community banks. They tend to charge fewer fees and have lower minimums than large banks. Check nerdwallet.com to compare credit unions near you.
•        Consider an online bank. Many e-banks offer free checking but often lack free ATMs. However, some banks buck the trend, providing access to thousands of free machines. A few even allow you to scan your check deposits for free so you don’t have to send them via snail mail and wait for them to post.

4. Plan your move to avoid getting burned in the switch.

•     Time it right. Many banks now charge a fee to close your account if you haven’t had it for long—under six months, for example. Check out your bank’s policy.
•    Open the new account first. Start with a small deposit and be sure you transfer all automatic payments to the new account before closing the old one.

Get an honest opinion: At mybanktracker.com, check out consumer reviews as you compare banks. Adapted from the Aug. 24, 2012 issue of All You. © 2012 Time Inc. All rights reserved.

For this and additional money saving tips, contact Susan S. Lewis, your Naperville Wealth Management experts.

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New Opportunity Under the Federal Gift Tax

The 2010 Tax Relief Act, which was noteworthy for some of the most favorable estate tax provisions in decades, opened up an opportunity to give more than ever to friends, family, and favored causes while avoiding the federal gift tax.

To make the most of tax-free gift transfers, a good first step is understanding the two types of federal exclusions (or exemptions) that apply to gifts.

Annual Gift Tax Exemption

You can transfer up to $13,000 in cash or certain types of property to as many people as you wish each year without any gift tax liability. (The exclusion is indexed annually for inflation.) Together, you and your spouse can give up to $26,000 annually. Your gift could be cash or income-producing assets such as stocks and bonds that have the potential to appreciate in value.

Some gifts may not be subject to the annual limit, including gifts to your spouse (as long as he or she is a U.S. citizen), donations to qualifying charitable or political organizations, and payments of tuition or medical expenses on behalf of another person that are paid directly to the educational or medical institution.

Lifetime Gift Tax Exemption

The 2010 tax law reunified the federal estate and gift tax exemption, increasing it to $5 million in 2011 and 2012 (the gift tax exemption was only $1 million in 2010). There are two caveats associated with this change:

 The amount you apply to your lifetime gift tax exemption may reduce your estate tax exemption. For example, if you used $2 million of the gift tax exemption during your lifetime, your $5 million estate tax exemption would be reduced by this amount.

The $5 million estate and gift tax exemption applies only to gifts made in 2011 and 2012. In 2013, unless lawmakers take further action, the federal gift and estate tax exemption will revert to $1 million.

Because of the temporary nature of estate and gift tax laws, you may want to consult with Naperville Wealth Management advisor before you take any specific action.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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Earning Income from Mutual Funds

More than half of working Americans are concerned that they may not have enough money to live comfortably during retirement. For most retirees, income will come from multiple sources. It may be helpful to consider mutual funds as a potential source of retirement income.

Mutual funds enable you to invest in a portfolio of securities that are typically assembled and managed with a particular goal. In 2010, mutual funds were the most common type of investment held in IRAs and defined-contribution plans.1 Although you might think of mutual funds as a tool to increase savings, they can also generate income.

Understanding the different types of income-producing mutual funds may help you better evaluate the role they could play in your retirement portfolio.

Bond Funds
Bond funds invest in bonds and other debt instruments. The type of debt held typically varies according to the fund’s focus and stated objectives and may include debt issued by government agencies and private entities, with maturity dates ranging from 30 days to 30 years. These funds generally use the interest payments collected from their bond holdings to generate income for shareholders. Although there is risk with all investments, bonds are usually more stable than stocks but they may offer lower potential returns.

Bond funds are subject to the same inflation, interest-rate, and credit risks associated with their underlying bonds. As interest rates rise, bond prices typically fall, which can adversely affect a bond fund’s performance.
Equity or Stock Income Funds

Not all stock funds focus on capital appreciation. Many strive to generate income by investing in companies that have a history of issuing dividends to their common and preferred stockholders. Stock funds typically offer greater risk with greater potential return than bond funds, but income-producing stock and equity funds tend to own stable and well-established companies, such as blue chips and utilities.

The return and principal value of mutual funds fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost.

Hybrid Funds
A hybrid fund (also called a balanced fund) may invest in a combination of stocks, bonds, and cash alternatives. Hybrid funds attempt to provide a mix of income and capital appreciation, with the fund manager adjusting the fund’s holdings based on economic conditions and in keeping with the fund’s stated objectives.

Income-producing mutual funds tend to be more appealing to investors with a conservative outlook and moderate to low risk tolerances. As you look to generate retirement income, consider mutual funds in the mix.

Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

1) Investment Company Institute, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent Naperville Wealth Manager. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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Managing Cash When Interest Rates Are Low

The economy may be improving, but high unemployment and low inflation indicate that the Federal Reserve may keep interest rates low at least until 2012.1  It’s generally a good idea to keep three to six months of income in an emergency fund to help cover unexpected expenses or a sudden loss of income. But when interest rates are low, where should you keep your cash?

Savings Accounts
Perhaps the most appealing aspect of savings accounts is that they are insured and highly liquid. The Federal Deposit Insurance Corporation insures deposits up to $250,000 per depositor, per institution, in principal and interest. You can generally withdraw your money at any time, although you could be subject to a fee if you exceed the financial institution’s monthly limit on withdrawals or transfers.

One disadvantage is that savings accounts may offer lower interest rates compared with other cash alternatives. Although you are unlikely to lose money deposited in a savings account, you could lose purchasing power over the long run if the interest rate does not keep pace with inflation.

Certificates of Deposit
CDs may offer slightly higher interest rates than savings accounts, but you generally must commit your principal for a period of months or years. Early-withdrawal penalties vary by institution and may range from several days’ worth of interest to the loss of some principal.

Typically, the interest rate paid by a CD depends on the maturity date. The longer you are willing to commit your money, the higher the interest rate you may be able to earn. Some CDs also offer higher rates for larger deposits. However, if your principal is locked into a CD when interest rates increase, you may not be able to take advantage of the higher rates until your CD matures, and the early-withdrawal penalty may offset any gains from reinvesting at a higher rate. The FDIC also insures CDs (up to $250,000 per depositor, per institution), which generally provide a fixed rate of return.

Money Market Funds
Money market funds are mutual funds that invest in short-term debt. These funds typically pay dividends, which may be greater than the interest paid by a savings account or CD. Generally, there are no limits or penalties for redeeming shares from a money market fund.

Money market funds are neither insured nor guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in such a fund.

Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.  1) MoneyRates.com, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from a  Naperville Wealth Management advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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Searching for Your Ideal Risk Tolerance

Feelings Are Important but Other Considerations Should Guide Decisions

A survey of U.S. households found that about two-thirds were willing to assume some investment risk in order to earn a return. For example, 35% said they were comfortable assuming an average risk burden for an average gain. Another 22% said they would be willing to take above-average or substantial risk as long as the return potential was also above average or substantial.1

These are unsurprising answers. Many people base their ideas about risk tolerance on subjective standards — their feelings — without considering whether their personal circumstances would either exaggerate or mitigate the risk inherent in a particular investment. Feelings are important, but they should play only a supporting role when deciding how much risk is appropriate for your situation.

Nonetheless, if your portfolio is overexposed to risk, your feelings may be your first indication. For example, what was your reaction to the “flash crash” in May 2010? On that day, a trading anomaly caused the Dow Jones Industrial Average to plunge nearly 1,000 points.2 If this event struck terror in your heart, it’s a good indication that you may be carrying too much risk.

Here are some other indications that you could be overexposed to risk.

A large percentage of your net worth could disappear overnight. This is where it’s easy to see that risk tolerance is a personal consideration that extends far beyond the risks that are specific to a particular investment. Consider two hypothetical investors: One has a $5 million net worth; the other’s most significant asset is $100,000 in his 401(k) plan. Each makes a $50,000 investment in the same security. Even though the investment itself poses identical risks to these two individuals, the millionaire is assuming far less risk because even a total loss would amount to only 1% of his net worth. The other investor is taking on needless extra risk by exposing half of his retirement assets to the fate of a single security.

You would need to sell some of your investments to cover a personal financial emergency. If you were faced with a large, unexpected expense and would need to liquidate some of your investments to cover it, it’s probably an indication that you are in over your head.

There are many considerations when evaluating how much risk is appropriate for your portfolio. We can help you evaluate your risk tolerance as it changes over time. Please contact us at 630-548-9600 for additional Naperville Wealth Management options.

1) Investment Company Institute, 2009
2) The Wall Street Journal, May 19, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

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Choosing The Best Naperville Investment Advisor

Looking for an investment adviser is one of the smartest things you can do to secure your financial future, and choosing a good Naperville investment adviser will help get you on the right track. The job of an investment adviser is to ensure your investments are not only profitable and safe, but that your investment strategy meets your long term financial needs.  Investment advisers can help you select a variety of financial products such as mutual funds, stock or bonds to get you where you need to be.

Naperville wealth management is a good idea for people looking to secure their financial future. When choosing an advisor, it is important to ask aout their qualifications and experience in the wealth management field. The main goal of a wealth manager is to select investments that meet his or her clients needs while maintaining appropriate risk levels.

Naperville wealth management can help you assess risks and rewards while moving you closer to your financial goals. With todays current economic climate, wealth management is a critical part of retirement planning and should be done with the aid of a qualified financial planner or CPA. Before you enter into any agreement, make sure your CPA or financial planner is certified and licensed.

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Having a Wealth Management System Can Secure Your Future

 When most people think of wealth management they automatically think of the rich and powerful, but I am going to let you in on a secret, the assumptions most people make are wrong. Wealth management is not just for the wealthy. In fact, at some point nearly everyone is going to need to consult with a wealth management professional. If planning for a secure future is important to you, finding a Naperville wealth management team should be at the top of your priority list.

Wealth management is about more than just investing the billions of dollars you have, or picking which piece of real estate you should develop. Real wealth management is about planning for you future regardless of how much money you currently have. If you ever plan to retire, and most of us do, then a wealth management plan is something you need to have in place. An effective wealth management strategy starts today and builds the money you have now into the nest egg you need for your golden years.

Everything from your 401k to your life insurance policy is part of your wealth, and needs to be planned for. Enlisting professional will help you maximize the returns you see on any amount of money you choose to invest. In the event of an untimely death, a wealth management professional will make sure that all of your assets have been allocated properly so that your family and their future have been taken care of.

Having a solid plan for your financial future is one of the most important things you can do. Using a Naperville wealth management professional will ensure that your golden years are taken care of and your family’s financial future is secure.

Naperville Wealth Management Services

   Wealth is a relative term. People have different definitions of wealth and what's important to one person may not even be a consideration to another. The fact that you don't have a few million dollars in the bank doesn't mean you're not wealthy. But protecting the assets you do have is important for everyone, now more than ever before.

Managing your wealth doesn't mean you have to wait until you've built up a huge nest egg or until you've decided it's time to think about the legacy you want to leave your children. In fact, the earlier you start managing your wealth, the larger that nest egg or inheritance will be. Even in today's economy if you properly manage your assets and investments beginning at an early age you can retire comfortably and still have enough to set something aside for your children.

If you keep up with the financial news then you're aware that all across America even people with vast estates and million dollar investments are suffering financially. Retirement accounts are dwindling or disappearing altogether and those huge homes that were once worth millions of dollars are going into foreclosure, mostly due to poor management. Find an expert Naperville wealth management service to help protect and grow your assets, no matter how large or small those assets are. It's never too late to start planning for the future and wouldn't you rather make sure your future is protected?

The Importance of a Financial Education

While my 13-year-old daughter and I were watching the movie “Confessions of a Shopaholic,” I laughed, but it was pained, strained laughter. The lead character in the movie is a young woman who, although in debt up to her eyeballs, lands a job as a financial advice columnist. The painful laughter came during the shopping scenes, as the young woman frantically tried to get the remaining credit on her cards to add up to the cost of a scarf she simply had to have, or when her face lit up as she left a store laden with bags. I definitely recognized something familiar about her. I have seen the same acquisitive gleam in my daughter’s eyes.

In addition to the camaraderie found through soccer teams, swim teams, and youth groups, Naperville tweens and teens—particularly girls—have another popular group activity: shopping. If it were a competitive sport, local girls could probably put together a state championship team! Between the delightful charms of our downtown district and the proximity of Fox Valley Mall, shopping fanatics have plenty of lures. When one girl says to another, “Let’s hang out,” it usually translates to, “Let’s spend money.” In fact, hanging out at the mall ranks high on the list of favorite activities for many.

This hanging out can be a relatively harmless activity. The main concern I have is in teaching my daughter moderation and planning. It’s not always easy for a 13-year-old to differentiate between a want and a need. Even at her age, she can be practicing her own level of Naperville financial planning. Different families handle this different ways: maybe with a set clothing allowance or an agreement to split the cost of purchases. My daughter is very reluctant to part with her own money, for which I’m grateful. I’d hate to worry that she was one of those identified by psychologists as “recreational shoppers.” These are people for whom shopping has an inordinate value: it’s used to help achieve happiness. Recreational shoppers tend to be female, with a lack of confidence and self-worth. They frequently utilize shopping as fantasy, while they pretend to be someone else. The many attractive shopping venues around here make Naperville wealth management quite difficult for the recreational shopper.

Just like much of parenting, striving to teach my daughter some frugality will involve persistent effort. If I maintain my vigilance, hopefully her own teen years will not provide the script for “Confessions of a Shopaholic 2”!