Understanding Assets

Many people mistakenly believe that they do not have any assets to their name. They think of assets as something owned only by the wealthy. The truth is, however, that most people do have assets. While not all of them are the kind of assets that would be included in an investment portfolio, they are still valuable and could be better handled through Naperville asset management and assistance, as provided by Platinum Financial Associates. Asset management is simply about determining what your assets are, how they can benefit you, and what things you can do to put your assets to work for you.

Did you know, for example, that your checking and/or saving accounts are assets? Even if they aren’t overflowing with money, the very fact that you have them at all is a major plus. If you have a certificate of deposit, commonly known in the financial world as a CD, that too is an asset. Because CDs are a lot more likely to accrue interest, and more of it, than savings accounts, they are even more valuable to you and would likely be included in your investment portfolio.

As you can see, there are a lot of different assets out there, and as such, it can be difficult to know what possessions, goods, or investments of yours are considered assets and, if they are, whether or not they’re worthy of being a part of your investment portfolio. Why not take the guesswork out of it by working with a Naperville asset management firm? Chances are that, when you do, you’ll find you have even more assets than you realized.

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When Mom and Dad Move in

If you set up the right space, living under one roof with your parents won't break the bank-- or drive you crazy.

By Sara Max

Last year, Charleen and Chris Tivnan were looking to add a second story to their 1,200-square-foot ranch home in Holden, Mass., to make space for her parents. Then they came across a larger, four-bedroom colonial nearby that had a first-floor in-law suite. The new house cost $420,000, almost twice as much as their ranch house. But given that the planned renovation would cost $275,000, the Tivnans realized that buying was a no-brainer. Charleens mom and dad are happy too. Now we can go away for the winter without worrying about our pipes freezing, says Charleens mother, Pauline Erickson.

These days roughly 16% of the population is living in a house with at least two adult generations, up from 12% in 1980, according to the Pew Research Center. Thats the highest level in 50 years. The economy has played no small role in this increased familial bonding. Given the aging boomer generation and the expected growth in home ownership among Hispanics and Asians, for whom multigenerational living is more common, the trend will probably be with us for a while, says Kermit Baker, chief economist for the American Institute of Architects.

To be sure, living with your parents or your in-laws can offer plenty of benefits: You get help with household expenses and maybe child care; the older generation can live independently longer. That said, finding a place to live that accommodates two or more generations comfortably can be a difficult and expensive proposition. To do it right, follow these steps.

MAP OUT YOUR IDEAL SPACE

No matter how close you are to your parents or in-laws, both generations should maintain some privacy, says Sharon Graham Niederhaus, co-author of Together Again: A Creative Guide to Successful Multigenerational Living. The ideal layout depends on the current health of your or your spouses parents and on your time horizon. If they are in good health, a second-floor or a basement suite might be the best solution, at least for now. But its worth keeping in mind that Mom and Dad might not be able to navigate stairs someday, so a home with a first-floor apartment might make more sense for a long-term arrangement.

Finally, think about how you and your parents or in-laws will interact on a daily basis. Plan to eat dinner together every night? Then you can probably forgo two complete kitchens and instead opt for a breakfast bar with a sink, a fridge and a microwave for them, says Scottsdale, Ariz. architect Tim Dodt.

RUN THE NUMBERS ON A REDO VS. BUYING NEW

To get the setup you need, you have three options: converting your existing home, adding on to it or moving to a new space. If you are looking to expand or remodel, the first step is to check the zoning rules in your area; many have restrictions that may prevent you from adding an in-law apartment. Next, ask an architect or a contractor to give you an estimate of costs (find one certified as an aging-in-place specialist at nahb.org/caps). Putting in a bathroom can cost about $40,000; a new master suite could easily run six figures. As a rule, converting an existing space within a house or garage is anywhere from 50% to 75% less expensive than increasing your homes footprint or building up, says Bend, Ore. design consultant Thomas Carson.

Once you know what it would take to redo your house, compare it with the prices of homes for sale in your area that already have the layout you need; you may, like the Tivnans, find that its cheaper to move.

Regardless of whether you remodel or buy, youll need to factor in higher ongoing expenses, such as property taxes and utility and grocery store bills. Decide up front who will pay what, says Niederhaus.

KEEP AN EYE ON RESALE

While you are not likely to recoup the cost of an expensive conversion, the good news is that as baby boomers age, multigenerational homes are increasingly popular, says Worcester, Mass. real estate agent Lisa Westerman. Still, the ideal space is one that can easily be repurposed," she says. So before you build or buy, talk to a local real estate pro about what sells well in your market. In college towns, for example, an in-law apartment may appeal to buyers looking to rent to grad students. In resort areas, houses with dual master suites tend to attract buyers.

In the Tivnans case, the sellers of the home they bought had had multiple offers, so the couple feel confident about their investment. Its worked out perfectly, says Charleen.

From the November 2011 issue of Money. © 2012 Time Inc. All rights reserved.

Turn to Naperville Asset Management Team of Susan S. Lewis Ltd. for more information on stretching your assets.

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Its Retirement Time

In a 2012 survey, 50% of current retirees said they retired earlier than they had planned, up from 45% in 2011.¹

Many retirees reported reasons that were beyond their control, such as health problems or disability, company downsizing or closure, changes in the skills required for their jobs, or having to care for a spouse or family member. Yet some said they retired early by choice — because they could afford to or because they wanted to do something different.²

Retirement (Photo credit: 401(K) 2012)

If you’re nearing the end of your working years, you probably have a retirement timetable in mind. It may be as specific as a particular date or as general as a range of years. Regardless of your timetable, circumstances could change — as the experience of current retirees demonstrates — and retirement might come sooner than you think.

Addressing some key issues now might ease your transition and give you more choices in how you retire.

Calculate Your Income Stream

If you had to retire early, would you be able to maintain your standard of living? It might be helpful to calculate your projected income based on your preferred retirement timetable and an earlier date.

Of course, the sooner you retire, the less time there will be for your investments to pursue potential growth, so accelerating your savings now could make a big difference in how much you might accumulate. If you retire on schedule (or later), having a potentially larger savings balance could give you more flexibility in your retirement lifestyle.

Also keep in mind that Social Security benefits typically will be reduced if you retire before your “full retirement age,” which ranges from 65 to 67, depending on year of birth.

Reduce Your Debt

Eliminating or reducing outstanding credit-card balances as soon as possible could be a great step toward getting on track for retirement. Paying off auto loans could also free up more income.

Although retirement strategies in the past were typically based on the assumption that retirees would have no mortgage debt, that has changed. About a third of homeowners aged 65 and older still have mortgages.³ If you foresee your mortgage being an issue in your retirement years, you may want to examine options to pay it off early, reduce payments, or otherwise modify the terms.

Consider Your Health

Your health and the health of your spouse could be among the most important factors in determining when you will retire. Ask yourself the following questions:

• Is your retirement timetable realistic based on your current health status?
• Would you be prepared if your health were to change?
• Have you factored the full cost of health care into your retirement strategy?

A married couple who retired in 2011 (with median expenses for prescription drugs) would need an estimated $287,000 to have a 90% chance of paying their health-care costs throughout retirement. Costs for future retirees may be much higher.⁴

Surprises can be fun in many situations, but not when it comes to retirement. Preparing now could help ease you into a more comfortable retirement lifestyle.

1–2) Employee Benefit Research Institute, 2012
3) U.S. Census Bureau, 2012
4) Employee Benefit Research 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 Asset 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. Copyright © 2012 Emerald Connect, Inc.

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The Dynamics That Can Drive Inflation

In the first half of 2011, spikes in food and gasoline prices strained the budgets of many Americans and sparked fears of more persistent inflation.

Nonetheless, the Federal Reserve expected such price spikes to be temporary and forecasted the overall inflation rate to stay in the neighborhood of 2.5% in 2011, with the core consumer price index (which strips out food and energy) to grow in the range of 1.5% to 1.8%.1

The Fed focuses primarily on the core CPI — assuming it is a more accurate measure of long-term price movements — and aims to keep it near a target of 2% a year.

By that standard, consumers have experienced only moderate inflation over the last two decades. Many manufactured goods, such as clothing, computers, and many types of electronics, actually became much more affordable during this period.

Here’s a closer look at the reasons why some economists see the potential for higher prices in America’s future.

Emerging Economies
It’s possible that headline inflation, a broad measure that includes food and energy, may deserve more attention from policymakers going forward. Shocks can result in short-term periods of high prices for oil and food that may or may not spill over into other goods and services.

However, greater global demand for resources needed by developing nations could boost prices more regularly going forward. If so, focusing on core inflation might cause the Fed to systematically underestimate inflation for many years.2

Wholesale Prices
The Producer Price Index (PPI) measures price changes affecting businesses before they reach the consumer. Higher raw material costs have caused wholesale prices to increase faster than consumer prices over the last two years, but businesses may be more likely to pass some of the costs on to their customers as economic conditions and consumer confidence improve.3

Monetary Policy
Since the financial crisis began more than two years ago, the Federal Reserve has employed unprecedented methods to help keep borrowing costs low and stimulate the economy. Besides keeping interest rates near zero since December 2008, the Fed has undertaken two rounds of quantitative easing, essentially creating money to purchase $2.3 trillion worth of longer-term Treasury securities.4

The fear is that the Fed won’t move fast enough to raise rates and/or sell off the securities as the economy improves. There is also some concern that the federal government could fail to address ongoing budget deficits and may eventually resort to printing money to pay its creditors, which would most likely devalue the dollar further and could trigger higher inflation.

Other economists worry less about prices, believing there is still enough weakness in the economy (specifically depressed housing prices, high unemployment, and slow wage growth) that could continue to hold back consumer spending and possibly even cause inflation to fall.5

Investors should keep in mind the potential risk of inflation, whichever path it takes, because even modest price increases compounded over time can erode the purchasing power of the assets in their portfolios.

1) Reuters, June 22, 2011
2, 5) Bloomberg.com, May 24, 2011
3) Bloomberg.com, May 25, 2011
4) Reuters, May 19, 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 Asset Managment 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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What Is a Required Minimum Distribution?

A required minimum distribution (RMD) is the annual amount that must be withdrawn from a traditional IRA or a qualified retirement plan (such as a 401(k), 403(b), and self-employed plans) after the account owner reaches the age of 70½. The last date allowed for the first withdrawal is April 1 following the year in which the owner reaches age 70½. Some employer plans may allow still-employed account owners to delay distributions until they stop working, even if they are older than 70½. RMDs are designed to ensure that owners of tax-deferred retirement accounts do not defer taxes on their retirement accounts indefinitely.   

You are allowed to begin taking penalty-free distributions from tax-deferred retirement accounts after age 59½, but you must begin taking them after reaching age 70½. If you delay your first distribution to April 1 following the year in which you turn 70½, you must take another distribution that year. Annual RMDs must be taken each subsequent year prior to December 31. 

The RMD amount depends on your age, the value of the account, and your life expectancy. You can use the IRS Uniform Lifetime Table (or the Joint and Last Survivor Table, in certain circumstances) to determine your life expectancy. To calculate your RMD, divide the value of your account balance at the end of the previous year by the number of years you’re expected to live, based on the numbers in the IRS table. You must calculate RMDs for each account that you own. If you do not take RMDs, then you may be subject to a 50% federal income tax penalty on the amount that should have been withdrawn.

Remember that distributions from tax-deferred retirement plans are subject to ordinary income tax. 

Waiting until the April 1 deadline in the year after reaching age 70½ is a one-time option and requires that you take two RMDs in the same tax year. If these distributions are large, this method could push you into a higher tax bracket. It may be wise to plan ahead for RMDs to determine the best time to begin taking them.

Lets talk, about your  Naperville Asset Management Needs

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Dispelling Umbrella Insurance Myths

It’s easy to tell yourself that you’ll probably never need to purchase extra liability insurance. After all, your chances of being hit with a multimillion-dollar lawsuit may be fairly slim. And besides, wouldn’t the liability coverage on your standard homeowners and auto insurance policies be enough to protect you against a claim or a lawsuit?

Before you make such an assumption — and underestimate the importance of having enough liability protection — consider that between 2001 and 2007, the average jury award for all liability cases increased by almost 62%.1 If you had liability coverage, how much did it increase during this period?

Unfortunately, there are a number of misconceptions about umbrella liability insurance that could cause you to be underinsured.

“My other policies should provide enough coverage.” Standard auto and homeowners insurance policies typically offer between $300,000 and $500,000 in liability coverage. If you’re ever found liable for an amount greater than these limits, you may need to use your home, financial assets, and even your future earnings to satisfy a legal judgment. An umbrella policy acts as an additional layer of protection above the limits of your primary coverage. To qualify for an umbrella liability insurance policy, you generally must purchase the maximum liability coverage available on your auto and homeowners policies, which serve as the deductible for the umbrella policy.

“I’m not at risk of being sued.” If you have a swimming pool, have teenagers living at home, employ workers in your home, own a dog, or entertain frequently, you may have a higher risk of becoming the target of a personal liability lawsuit. Dog bites alone accounted for more than one-third of all homeo

Image via Wikipedia

wners insurance liability claims in 2009. More than 50% of dog bites occur on the dog owner’s property.2

“It’s too expensive.” Umbrella policies typically charge a few hundred dollars a year for $1 million of coverage. The benefits can be used to pay jury awards, plaintiff medical expenses, and legal fees, up to the policy limits. The appropriate amount of coverage for your situation will depend on personal factors, but it’s generally recommended that you have liability coverage at least equal to your net worth.

Omitting umbrella liability insurance from your risk-management strategy could be a costly mistake. The cost is low relative to the additional coverage it may offer.

1–2) Insurance Information Institute, 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 a Naperville CPA or a Naperville Asset Management professional. 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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YOUR ASSETS AND YOUR RETIREMENT

What do you think of when you hear the term Naperville Asset Management? Many individuals are unclear about what asset management actually is. Asset management is a type of service that involves managing a clients assets to maximize ROI and meet their future financial needs.

An asset manager, also known as a wealth manager, will oversee the acquisition of stocks, mutual funds and other investments on the clients’ behalf. An asset manager will monitor and track these investments and their returns over the life of a client’s portfolio.

Why use an asset manager?
An asset manager is a great option for people who do not have the time, or experience, to manage and monitor their own portfolio.

An asset manager will track stock and mutual fund returns, monitor indexes and suggest actions based on market signals. Using an asset manager is advised if you have a substantial amount of money at stake since the slightest down tick in the market can result in thousands of dollars lost for your portfolio.

If you are looking for asset management services, you need the help of fund managers with asset managing expertise. You need to turn to Naperville asset management.

Asset management is also a critical part of Naperville retirement planning. Due to the state of the social security system, personal retirement planning has been brought to the forefront. Also, as life expectancy has increased, people now have to make a plan that will provide them with enough income to last into their 80’s and 90’s. An accountant or financial planner experienced in Naperville retirement planning can help make the long road ahead just a little easier.

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Protect Your Assets with a Solid Plan

Asset management is a critical piece of your financial plan. Assets consist of everything from stock options, to property, and in some cases even collectables. A Naperville asset management firm will help you ensure that the value of your combined assets continues to grow so that you maintain your financial security.

One of the most confusing parts of asset management is when to buy and when to sell certain assets. If you are a property investor, you know that the value of your properties today is significantly less than it was even five years ago. If you had enlisted the help of an asset manager, they may have been able to help you sell off your properties at the very beginning of the housing bubble burst. By the time that you realized the bubble had popped you would have been taking a significant loss had you sold your properties. An asset manager would have likely noticed the change in the market sooner than you would have and while you may have taken a small loss, it would have nothing compared to the type of damage you would incur if you were to sell at the bottom of the market.

The same situation played out for many people who held onto certain stocks and bonds for too long. With the help of an asset manager, they would have been able to recognize the trend earlier and moved their resources to more stable investments. Without the proper guidance many people lost everything they had spent years building.

If you are ready to develop a solid plan for managing your assets contact a Naperville asset management specialist today and start putting together a plan that offers you room for growth while giving you the security you desire. An asset manager will be by your side to help you make the best decisions when allocating your resources. Start putting your plan in place today, so that your tomorrow is filled with joy and not worry.

Don’t Do It Alone, Get Help to Protect your Assets Today!

     Naperville asset management is taken very seriously.  We all like to protect what we have and in this economy, hold on tight to your assets.  Asset management is a structured system and its primary goal is to maintain the assets you have on a day to day basis.  The system created is used in all corners of your asset’s life.  This is valid from the time the asset is acquired to the time it is given up or retired.

An asset management team can work with you to obtain a value on the assets you have and manage the security of them and potential gain in profits from them.  One goal that an effective team or asset professional has is to reduce the cost of owning the specific asset and using it to invest in order to achieve the maximum return.  Before that can be done, the professional needs to incorporate a number of policies, procedures, resources and functions around the asset.

Take an active role in building your assets as well.  Look at technology information about your asset and track its value and potential increases.  Follow a structured budget to reduce the cost of maintaining the asset.  Reallocate an asset that is consistently not achieving the goal set out.  Work with the asset management professional on when it would be advantageous to get rid of the asset or trade.

Whichever way you decide to go with the assets you have, be sure to check with your local Naperville asset management office to ensure growth and prosperity.

The Scoop on Naperville Asset Managment

     A Naperville asset management firm is essential for any investment to operate in such a fashion that it gives dividends to the client (investor).  If there is lack of management of any kind, then the investor loses his/her money.  Asset management essentially allows the professional to provide a high integrity of service when managing your investments.

The client has assets in the securities the investor (asset manager) has invested in.  These assets may include shares, bonds, stocks, real estate, mutual funds, etc.  Many mutual fund companies end up hiring a professional manager to oversee client accounts.  These people are called a private banker.
The asset management team is involved in services such as:  financial analysis, stock and asset selection, implementing plans and monitoring techniques.  It seems like a lot of unnecessary tasks, however, they are proven to be successful given the professionalism of the manager.  Along with the tasks, the asset manager can also assist you with keeping your goals in focus and provide tracking information of progress made.  In choosing an asset management team, do your homework and choose wisely.  The stock market is an ever fluctuating tide.  Educate yourself and understand the following:
-    Your revenue is linked to market evaluations.  A major fall in prices may cause a decline in your profit.-    -    An above average gain is difficult to sustain…be patient!
-    Successful fund managers can be costly.

Many firms allow you access to your portfolio.  On the website you can log in with a secure code and access your gains and losses.  It is an amazing tool that some local Naperville asset management firms offer.

Naperville Education Planning and Soaring College Costs

Sometimes even the best-laid plans can go awry. For example, you have probably been hearing for years about how much money you will need to set aside for your children’s college. The tuition numbers can be staggering. Yet those make up only part of the picture. Even the best Naperville education planning can leave you unprepared when your oldest heads off to school.

First of all, tuition is only the starting point of the costs. Fees get tacked onto that number, as in “tuition and fees.” If you’ve carefully set aside money for tuition, an additional two or three thousand more in fees can come as a shock. Next up is room and board. Those rates go up at least as fast as the cost of living, and no matter how often your new collegian used to raid the refrigerator at home, your grocery savings will not cover the rates on campus.

The final surprise, once you’ve structured the various bills and loans and gotten your college student moved in, comes at textbook purchasing time. A typical full-time student, with a course load of 15 or more hours, might spend $1200 to $1600 on books each year. Even careful Naperville asset management can have trouble keeping up when the cost of texts rises at double the rate of inflation.

Some students opt not to buy the books. This is truly a backwards way to approach the education that is costing so dearly. A better option is to attend each class once or twice before make book purchases, and make sure the instructor plans to use the text. (For some courses with multiple sections, different teachers will utilize different material). In the past, many students saved money by purchasing used books. This is still a great idea, but publishers today come out with new editions so frequently that it has become much harder to find a used version of the text you need. Fortunately, online resellers like Amazon.com can help you broaden your search.

In the end, it turns out that careful Naperville asset management doesn’t end when Junior heads off to campus. Hopefully your example of prudent Naperville education planning will prompt him or her to continue the pattern once making decisions like textbook purchasing. If your college student has already learned to be cautious and make comparisons when spending money, then he or she already has a head start on practical, applicable life skills. Who needs college courses when they’ve got you setting such a good example?