Dairyland Peach http://dairylandpeach.com Sauk Centre, Minnesota Thu, 30 Jul 2015 20:00:03 +0000 en-US hourly 1 Diversifying to Win http://dairylandpeach.com/2015/07/diversifying-to-win/ http://dairylandpeach.com/2015/07/diversifying-to-win/#comments Thu, 30 Jul 2015 20:00:03 +0000 http://dairylandpeach.com/?guid=2b0be608eaf5591e5c065a993757f203 Maybe you hear rumors that the mega-rich made fortunes off just one stock, or that tech or real estate is the only sector worth your time this year. Ask yourself: Does the same team win the Super Bowl or World Series year after year? Here’s why your portfolio ought to follow multiple contenders.

I grew up in the New York area, a region with many diverse groups of people and outlets for a large array of interests – including many professional sport teams to root for.

The choices are plentiful, the possible combinations quite different. Are you a fan of the Mets or Yankees in baseball? Jets or Giants in football? Knicks or Nets in basketball? Pro hockey offers three choices: the Islanders, Rangers or Devils.

When you run into a fellow fan, you enjoy an automatic connection – you both know the same highs and lows of your specific team. Especially strong is the bond that keeps you as fans sticking together during a seriously down season (did I mention the Knicks?).

As advisors, we truly believe in the benefits of a diverse investing across different classes of assets. Your choices of companies to invest in (or root for) are as plentiful as balls and pucks flying around the Big Apple.

The difference with investing, though: For success, you need to own a portfolio that backs no favorites but a large and wide-ranging number of companies. For example, rather than cheer on one specific large company, invest in all of the large company stocks you can, aka large-capitalization investing. Owning an array of companies located in the U.S. and in international markets best helps grow your portfolio.

In a given year, one sector of the stock market may do better than others, just like how last season the N.Y. Rangers did better in hockey than the Jets did in football or the Mets in baseball. Right now, the dividend yield (compared with how the fund did 12 months ago) in the Select Sector SPDR exchange-traded fund (XLY), representing consumer discretionary stocks in the S&P 500, is 1.34%. The yield of the similar health-care ETF (XLV) is 1.29%, the energy sector ETF (XLE) is 2.65%, the financials ETF (XLF) is 1.74% and so on.

Last year, large U.S. companies (as the Standard & Poor’s 500 index shows) performed well: with a 11.74% return. You did even better reinvesting dividends in the S&P 500 in 2014 (for yet another year), with a 14.04% return.

In comparison, the MSCI EAFE, a stock index comprising large and midsize companies across developed countries in Europe and the Asia/Pacific region, lost 4.9% last year, in U.S. dollars. And this season? The index is handily beating U.S. counterparts.

Celebrating when any of the 11,000 companies in 44 countries (where we invest most of our clients’ portfolios) performs well takes the stress out of trying to time the hot streaks of each company or country. It’s as if you can just say you are a New York fan, huzzaing when any of the local teams win.

Investing in a complete market can give you reason to cheer when the overall global market hits home runs.

Follow AdviceIQ on Twitter at @adviceiq.

Maureen Crimmins is the co-founder of Crimmins Wealth Management LLC in Woodcliff Lake, N.J. Her websites are www.CrimminsWM.com and www.RootsofWealth.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Maybe you hear rumors that the mega-rich made fortunes off just one stock, or that tech or real estate is the only sector worth your time this year. Ask yourself: Does the same team win the Super Bowl or World Series year after year? Here’s why your portfolio ought to follow multiple contenders.

I grew up in the New York area, a region with many diverse groups of people and outlets for a large array of interests – including many professional sport teams to root for.

The choices are plentiful, the possible combinations quite different. Are you a fan of the Mets or Yankees in baseball? Jets or Giants in football? Knicks or Nets in basketball? Pro hockey offers three choices: the Islanders, Rangers or Devils.

When you run into a fellow fan, you enjoy an automatic connection – you both know the same highs and lows of your specific team. Especially strong is the bond that keeps you as fans sticking together during a seriously down season (did I mention the Knicks?).

As advisors, we truly believe in the benefits of a diverse investing across different classes of assets. Your choices of companies to invest in (or root for) are as plentiful as balls and pucks flying around the Big Apple.

The difference with investing, though: For success, you need to own a portfolio that backs no favorites but a large and wide-ranging number of companies. For example, rather than cheer on one specific large company, invest in all of the large company stocks you can, aka large-capitalization investing. Owning an array of companies located in the U.S. and in international markets best helps grow your portfolio.

In a given year, one sector of the stock market may do better than others, just like how last season the N.Y. Rangers did better in hockey than the Jets did in football or the Mets in baseball. Right now, the dividend yield (compared with how the fund did 12 months ago) in the Select Sector SPDR exchange-traded fund (XLY), representing consumer discretionary stocks in the S&P 500, is 1.34%. The yield of the similar health-care ETF (XLV) is 1.29%, the energy sector ETF (XLE) is 2.65%, the financials ETF (XLF) is 1.74% and so on.

Last year, large U.S. companies (as the Standard & Poor’s 500 index shows) performed well: with a 11.74% return. You did even better reinvesting dividends in the S&P 500 in 2014 (for yet another year), with a 14.04% return.

In comparison, the MSCI EAFE, a stock index comprising large and midsize companies across developed countries in Europe and the Asia/Pacific region, lost 4.9% last year, in U.S. dollars. And this season? The index is handily beating U.S. counterparts.

Celebrating when any of the 11,000 companies in 44 countries (where we invest most of our clients’ portfolios) performs well takes the stress out of trying to time the hot streaks of each company or country. It’s as if you can just say you are a New York fan, huzzaing when any of the local teams win.

Investing in a complete market can give you reason to cheer when the overall global market hits home runs.

Follow AdviceIQ on Twitter at @adviceiq.

Maureen Crimmins is the co-founder of Crimmins Wealth Management LLC in Woodcliff Lake, N.J. Her websites are www.CrimminsWM.com and www.RootsofWealth.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Can Income Hurt Benefits? http://dairylandpeach.com/2015/07/can-income-hurt-benefits/ http://dairylandpeach.com/2015/07/can-income-hurt-benefits/#comments Thu, 30 Jul 2015 16:30:03 +0000 http://dairylandpeach.com/?guid=b1d1ad1e25493c6d59371bd44594870d You may count on Social Security as a mainstay of income in your looming retirement. When you take benefits and how much you keep working can shrink that monthly check, though. Here’s what to know.

When you receive Social Security benefits before your Full Retirement Age (FRA), which is 67 if you were born in 1960 or later, an earnings test can reduce or even eliminate the benefit you plan on. You can file early for benefits, at 62, and get a lesser amount than if you waited until FRA.

If your annual earned income exceeds $15,720 this year and you reach your FRA after 2015, Social Security withholds $1 from your benefit for every $2 over this limit.

For example, if you fall into this FRA category and earn $20,000 in 2015, your benefits will drop $2,140, or half of the $4,280 that you earn over the limit. If you receive a benefit of $1,070 per month, Social Security withholds two months’ benefits.

Big, unpleasant surprise if you got the full benefit for a time and the earnings test kicks in at the beginning of the following year and you don’t receive a check for two months.

After you reach FRA, you get an adjustment to your benefit for the withheld checks. From the above example, if you had two months’ benefits withheld during the three years before the year when you reach your FRA, you receive credit for the months of withheld benefits. At FRA, Social Security adjusts your benefit as if you filed six months later than you actually filed.

So if you originally filed at 62, your benefit adjusts to if you filed at 62 years and six months, translating into a 2.5% increase in your monthly benefit.

In a year that you reach FRA but before you actually turn 66, the earnings test eases up a lot and allows you to make $41,880. Plus the rule in this case becomes that Social Security withholds $1 from your benefits for every $3 over the limit. This higher exempt amount applies only to earnings that you made in months prior to the month when you reached your FRA.

These exempt amounts also generally go up annually with increases in the national average wage index. Only your income from employment or self-employment counts regarding the earnings tests.

So does all your money apply? No, and among your earnings that Social Security doesn’t count:

  • Deferred income for services you performed before becoming entitled to Social Security benefits;
  • Court awards, including back pay from an employer;
  • Payments for disability insurance;
  • Pensions;
  • Retirement pay, such as from the military;
  • Rental income from real estate if not considered self-employment (i.e., you did not materially participate in the production of the income);
  • Interest and dividends on accounts and investments;
  • Capital gains on stock and other investments;
  • Workers’ compensation or unemployment benefits.

Other examples of income that Social Security doesn’t count in the earnings test: jury duty pay; reimbursed travel or moving expenses if you’re an employee; and royalties (only in the year you will reach FRA; otherwise your royalties count).

Follow AdviceIQ on Twitter at @adviceiq.

Jim Blankenship, CFP, EA, is an independent, fee-only financial planner at Blankenship Financial Planning in New Berlin, Ill. He is the author of An IRA Owner’s Manual and A Social Security Owner’s Manual. His blog is Getting Your Financial Ducks In A Row, where he writes regularly about taxes, retirement savings and Social Security.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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You may count on Social Security as a mainstay of income in your looming retirement. When you take benefits and how much you keep working can shrink that monthly check, though. Here’s what to know.

When you receive Social Security benefits before your Full Retirement Age (FRA), which is 67 if you were born in 1960 or later, an earnings test can reduce or even eliminate the benefit you plan on. You can file early for benefits, at 62, and get a lesser amount than if you waited until FRA.

If your annual earned income exceeds $15,720 this year and you reach your FRA after 2015, Social Security withholds $1 from your benefit for every $2 over this limit.

For example, if you fall into this FRA category and earn $20,000 in 2015, your benefits will drop $2,140, or half of the $4,280 that you earn over the limit. If you receive a benefit of $1,070 per month, Social Security withholds two months’ benefits.

Big, unpleasant surprise if you got the full benefit for a time and the earnings test kicks in at the beginning of the following year and you don’t receive a check for two months.

After you reach FRA, you get an adjustment to your benefit for the withheld checks. From the above example, if you had two months’ benefits withheld during the three years before the year when you reach your FRA, you receive credit for the months of withheld benefits. At FRA, Social Security adjusts your benefit as if you filed six months later than you actually filed.

So if you originally filed at 62, your benefit adjusts to if you filed at 62 years and six months, translating into a 2.5% increase in your monthly benefit.

In a year that you reach FRA but before you actually turn 66, the earnings test eases up a lot and allows you to make $41,880. Plus the rule in this case becomes that Social Security withholds $1 from your benefits for every $3 over the limit. This higher exempt amount applies only to earnings that you made in months prior to the month when you reached your FRA.

These exempt amounts also generally go up annually with increases in the national average wage index. Only your income from employment or self-employment counts regarding the earnings tests.

So does all your money apply? No, and among your earnings that Social Security doesn’t count:

  • Deferred income for services you performed before becoming entitled to Social Security benefits;
  • Court awards, including back pay from an employer;
  • Payments for disability insurance;
  • Pensions;
  • Retirement pay, such as from the military;
  • Rental income from real estate if not considered self-employment (i.e., you did not materially participate in the production of the income);
  • Interest and dividends on accounts and investments;
  • Capital gains on stock and other investments;
  • Workers’ compensation or unemployment benefits.

Other examples of income that Social Security doesn’t count in the earnings test: jury duty pay; reimbursed travel or moving expenses if you’re an employee; and royalties (only in the year you will reach FRA; otherwise your royalties count).

Follow AdviceIQ on Twitter at @adviceiq.

Jim Blankenship, CFP, EA, is an independent, fee-only financial planner at Blankenship Financial Planning in New Berlin, Ill. He is the author of An IRA Owner’s Manual and A Social Security Owner’s Manual. His blog is Getting Your Financial Ducks In A Row, where he writes regularly about taxes, retirement savings and Social Security.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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The Innovation Factor http://dairylandpeach.com/2015/07/the-innovation-factor/ http://dairylandpeach.com/2015/07/the-innovation-factor/#comments Thu, 30 Jul 2015 13:30:02 +0000 http://dairylandpeach.com/?guid=87b6ba7123226ed6e5f78450f53ab70c Innovation is becoming an increasingly powerful factor in explaining stock performance. That often means technology or biotechnology companies. An examination of various stock indexes shows just how valuable the innovative spirit is.

A central tenet of capitalism is that performance is often derived from innovation, whether it be Henry Ford’s Model T or Steve Jobs’ iPhone. The bigger the innovation, the bigger the investment flows into the stocks that embody it. How much?
  
To start, let’s compare the Dow Jones Industrial Average with the Standard & Poor’s 500 over the past 10 years. The Dow rose 68% but the S&P was up 71%. That difference seems small, but in investing, even three percentage points makes an appreciable difference.

While the two indexes often track each other fairly closely, the S&P’s slightly higher return largely stems from one thing: It includes a larger number of companies and many more from new economy type industry sectors (e.g., social media, cloud computing, software, networking, etc.), we see the S&P 500 outperformed the DJIA.

The contrast becomes more apparent when we bring in an indexes that specialize in tech businesses. In the chart below, we show the relative performance of the Nasdaq 100 – the highest valued stocks in the tech-dominated Nasdaq Exchange – as embodied by the exchange-traded fund tracking it, the PowerShares QQQ Trust (QQQ) and the First Trust U.S. IPO Index ETF (FPX) to the S&P 500 and the Dow. 

FPX is a fund of 100 companies that had initial public offerings within the past four years. Our chart starts from the IPO vehicle’s launch date, Apr. 13, 2006 – some nine years ago.

The chart shows the Nasdaq 100 up 180% and the ETF of IPO companies (FPX) up 190% during that period, as the Dow and S&P advanced 65% and 90%, respectively.  Most investors would agree that the amount of new-economy innovation occurring in companies that recently went public and in the Nasdaq 100 is greater on average than the amount found in the S&P and the Dow. Just recently, Facebook (FB) surpassed Wal-Mart Stores (WMT) in market capitalization.
 
The average market capitalization of the stocks in the Nasdaq 100 is $105 billion. For the FPX, it is $23 billion.  While the smaller market-cap group of stocks (FPX) rose more than the giant market-cap group (QQQ), the real difference to be innovation rather than market cap. 

Both indexes vastly outperformed groups of stocks with a much lower concentration of innovation. Giant market capitalization companies like Google, Amazon and Apple are keeping pace on the innovation front with newer, smaller companies.
 
The most concentrated sector of innovation pursuing large market opportunities may be biotechnology.  Finding a cure for cancer potentially has a larger financial reward than creating a new way to tweet or stream music over the Internet (although the privately held music streaming company Spotify recently completed a capital raise at an $8.4 billion valuation).  Shown below is the chart of the Dow, S&P, QQQ and FPX.  But now we add the iShares Nasdaq Biotechnology ETF (IBB).  Up 390%, biotech returns dwarf the other investments.

The difficulty of investing in innovation is volatility. A two-thirds Nasdaq drawdown from its peak in late 1999 to its fall 2002 low point is a testament to this.  Many innovations suffer unexpected and abrupt ends as either they fail to meet a real market need, fail to perform as expected or some other innovation makes them obsolete. 

During boom times, it is easy to fall in love with the next great investment story, which becomes over-hyped and over-valued.  Much like a venture capitalist, owning a diversified portfolio of innovative companies should be considered a basic construct of innovation investing.  Some cutting-edge investments will work and many will not.  Investing in the QQQ, FPX or IBB offers a systematic, periodic rebalancing discipline to cull the portfolio of losers and retain the winners.
 
Innovation is somewhat of a nebulous term.  It is hard to precisely define and measure.  If you believe that the pace of innovation is accelerating, so should certain stocks’ outperformance. One might also conclude that innovation may drive better-than-expected economic growth than current consensus expectations.

Follow AdviceIQ on Twitter at @adviceiq.

Nicholas Atkeson and Andrew Houghton are the founding partners of Delta Investment Management, a registered investment advisory firm in San Francisco, and authors of the new book, Win by Not Losing: A Disciplined Approach To Building And Protecting Your Wealth In The Stock Market By Managing Your Risk. Additional market commentary and investment advice is available via their websites at www.deltaim.com and www.deltawealthaccelerator.com

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Innovation is becoming an increasingly powerful factor in explaining stock performance. That often means technology or biotechnology companies. An examination of various stock indexes shows just how valuable the innovative spirit is.

A central tenet of capitalism is that performance is often derived from innovation, whether it be Henry Ford’s Model T or Steve Jobs’ iPhone. The bigger the innovation, the bigger the investment flows into the stocks that embody it. How much?
  
To start, let’s compare the Dow Jones Industrial Average with the Standard & Poor’s 500 over the past 10 years. The Dow rose 68% but the S&P was up 71%. That difference seems small, but in investing, even three percentage points makes an appreciable difference.

While the two indexes often track each other fairly closely, the S&P’s slightly higher return largely stems from one thing: It includes a larger number of companies and many more from new economy type industry sectors (e.g., social media, cloud computing, software, networking, etc.), we see the S&P 500 outperformed the DJIA.

The contrast becomes more apparent when we bring in an indexes that specialize in tech businesses. In the chart below, we show the relative performance of the Nasdaq 100 – the highest valued stocks in the tech-dominated Nasdaq Exchange – as embodied by the exchange-traded fund tracking it, the PowerShares QQQ Trust (QQQ) and the First Trust U.S. IPO Index ETF (FPX) to the S&P 500 and the Dow. 

FPX is a fund of 100 companies that had initial public offerings within the past four years. Our chart starts from the IPO vehicle’s launch date, Apr. 13, 2006 – some nine years ago.

The chart shows the Nasdaq 100 up 180% and the ETF of IPO companies (FPX) up 190% during that period, as the Dow and S&P advanced 65% and 90%, respectively.  Most investors would agree that the amount of new-economy innovation occurring in companies that recently went public and in the Nasdaq 100 is greater on average than the amount found in the S&P and the Dow. Just recently, Facebook (FB) surpassed Wal-Mart Stores (WMT) in market capitalization.
 
The average market capitalization of the stocks in the Nasdaq 100 is $105 billion. For the FPX, it is $23 billion.  While the smaller market-cap group of stocks (FPX) rose more than the giant market-cap group (QQQ), the real difference to be innovation rather than market cap. 

Both indexes vastly outperformed groups of stocks with a much lower concentration of innovation. Giant market capitalization companies like Google, Amazon and Apple are keeping pace on the innovation front with newer, smaller companies.
 
The most concentrated sector of innovation pursuing large market opportunities may be biotechnology.  Finding a cure for cancer potentially has a larger financial reward than creating a new way to tweet or stream music over the Internet (although the privately held music streaming company Spotify recently completed a capital raise at an $8.4 billion valuation).  Shown below is the chart of the Dow, S&P, QQQ and FPX.  But now we add the iShares Nasdaq Biotechnology ETF (IBB).  Up 390%, biotech returns dwarf the other investments.

The difficulty of investing in innovation is volatility. A two-thirds Nasdaq drawdown from its peak in late 1999 to its fall 2002 low point is a testament to this.  Many innovations suffer unexpected and abrupt ends as either they fail to meet a real market need, fail to perform as expected or some other innovation makes them obsolete. 

During boom times, it is easy to fall in love with the next great investment story, which becomes over-hyped and over-valued.  Much like a venture capitalist, owning a diversified portfolio of innovative companies should be considered a basic construct of innovation investing.  Some cutting-edge investments will work and many will not.  Investing in the QQQ, FPX or IBB offers a systematic, periodic rebalancing discipline to cull the portfolio of losers and retain the winners.
 
Innovation is somewhat of a nebulous term.  It is hard to precisely define and measure.  If you believe that the pace of innovation is accelerating, so should certain stocks’ outperformance. One might also conclude that innovation may drive better-than-expected economic growth than current consensus expectations.

Follow AdviceIQ on Twitter at @adviceiq.

Nicholas Atkeson and Andrew Houghton are the founding partners of Delta Investment Management, a registered investment advisory firm in San Francisco, and authors of the new book, Win by Not Losing: A Disciplined Approach To Building And Protecting Your Wealth In The Stock Market By Managing Your Risk. Additional market commentary and investment advice is available via their websites at www.deltaim.com and www.deltawealthaccelerator.com

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Evarista Ruegemer, 95 http://dairylandpeach.com/2015/07/evarista-ruegemer-95/ http://dairylandpeach.com/2015/07/evarista-ruegemer-95/#comments Wed, 29 Jul 2015 22:33:43 +0000 http://dairylandpeach.com/?p=22126 Evarista   Ruegemer, 95

Mass of Christian Burial will be 11:00 a.m. Saturday, August 1, 2015 at Sts. Peter & Paul Catholic Church in Richmond, MN for Evarista E. Ruegemer, age 95, who died Tuesday at Assumption Home. Burial will be in the parish cemetery.

Relatives and friends may call from 4:00 – 8:00 p.m. Friday at the Wenner Funeral Home in Richmond. Parish Prayers will be at 4:00 p.m., followed by a rosary with St. Catherine's, Christian Women and Catholic United Financial. Visitation will continue from 9:00 – 10:30 a.m. Saturday morning at the funeral home.

Evarista was born in Richmond, MN to William and Anna (Gertken) Schneider. She married Benedict Ruegemer on May 6, 1941 in Sts. Peter & Paul Catholic Church, Richmond, MN. Evarista enjoyed quilting, playing cards, baking, making homemade Chicken Noodle Soup, driving school bus and spending time with her children and grandchildren. She was a member of Sts. Peter & Paul Parish.

Survivors include her children, Kevin (Sue) Ruegemer, Alan (Vickie) Ruegemer, Dianne (Tom) Zenner; daughter-in-law, Lainie Ruegemer; sister, Valeria Braegelmann; grandchildren, Shannon Orcutt, Heidi (Steve) Stenger, Brent (Steph) Ruegemer, Scott (Amanda) Ruegemer, Kayla Ruegemer (Jordan Bloch), Mike (Becca) Ruegemer, Paul (Becca) Ruegemer, Kendra (Chip) Evanoff, Jeremy Doll and 13 great-grandchildren.

She was preceded in death by her husband, Benedict; children, Carol Ann (John) Blasius, Dennis Ruegemer, Earl Ruegemer; grandson, Shawn Ruegemer; siblings, Velma Ehresmann, Florentine Schefers, Raymond, Norbert, Robert Schneider and Mary Ann Schmitt.

Arrangements are with Wenner Funeral Home, Richmond, MN.

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Orpha Prather, 84 http://dairylandpeach.com/2015/07/orpha-prather-84/ http://dairylandpeach.com/2015/07/orpha-prather-84/#comments Wed, 29 Jul 2015 22:33:22 +0000 http://dairylandpeach.com/?p=22123 Orpha   Prather, 84

Orpha Joyce (Solwold) Prather (84) passed away July 20 at Trinity Health Center in Minot, N.D. Funeral services were July 24 at First Lutheran Church in Tioga, N.D. Graveside services will be 11 a.m., Saturday, Aug. 8, at St. Boniface Parish Cemetery in Cold Spring.

She was born Sept. 6, 1930, in Casper, Wyo., to Olaf Jr. and Julia (Vatsaas) Solwold and had one sibling, her sister Julia, who was born 10 months later. Orpha graduated from Natrona County High School in Casper, Wyo., in 1949. She began teaching grade school in 1951 in Midwest, Wyo., with a two-year certification and received a bachelor's degree in education from Concordia College in Moorhead, Minn., in 1954.

Orpha married Edward H. Prather June 14, 1954, in Our Savior's Lutheran Church in Casper, Wyo., and moved to Tioga, N.D., where he was employed in a family business, which later became R.A. Prather and Sons Oil Well Servicing. The couple raised their family of four children — Carol, Ed, Steve and Jim — in Tioga.

She started working in the Tioga School District in 1959, first teaching English at Tioga High School but soon settling in at Central Grade School, where she taught fourth grade for more than 30 years, retiring in 1995. She also instructed adult students through Williston (N.D.) State College for 35 years. She remained active in retirement with substitute teaching, prison ministry and as a lay preacher for the Western North Dakota Synod of the Evangelical Lutheran Church in America.

Orpha is survived by her children, Carol Jessen-Klixbull of Cold Spring, Edward R. of Crystal, Minn., Stephen (Christine) of Bloomington, Minn., James (Donna) of Montgomery, Ill.; seven grandchildren; two great-grandchildren; sister, Julia Gray of Casper, Wyo., and 10 nieces and nephews. She was preceded in death by

her husband, Edward H., and son-in-law, Ole Jessen-Klixbull.

Arrangements have been made by Wenner Funeral Home in Cold Spring.

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Economy & Market: Linked? http://dairylandpeach.com/2015/07/economy-market-linked/ http://dairylandpeach.com/2015/07/economy-market-linked/#comments Wed, 29 Jul 2015 19:30:03 +0000 http://dairylandpeach.com/?guid=f981601ed37fba4055151dce07cad7d6 Summer rolls along, theme parks are open and lines for roller coasters are long. Wild rides are fun, but you probably want a more predictable path when investing. Let’s look at some parallels and distinctions between the equity markets, thrill rides and the overall economy.

First, you’re accustomed to Cyclone metaphors if you follow financial news and its ups and downs. “Hanging on to China’s stock-market roller coaster,” reads a recent Wall Street Journal report. “In the bond world, that's a stomach-churning roller coaster ride,” says CNN Money of last fall’s whipsaw of U.S. Treasuries’ rates.

Second, the connection of the stock market and an economy is either obvious or, right now, nonexistent, depending on what you read.

We do know that recreational riders of roller coasters spend “discretionary dollars” that these consumers choose to spend. In contrast, other items that we all must buy, such as food, are staples.

Housing is a staple that economists carefully watch and tightly link it to jobless numbers. We in turn watch unemployment numbers to know when household income ought to increase, and we track how and where households spend.

Currently, housing sales are the strongest in five years – great news for many, from homeowners and builders to appliance manufacturers and furniture stores. Mortgage applications continue to surge and the National Association of Realtors reports that home sales remained on a brisk pace in recent months.

Of course, as consumers spend on their homes, they do redirect money from discretionary purchases (such as tickets to amusement parks). Assessing the economy through a single filter is difficult. Overlooking a dollar here or there can lead to serious – not to mention wrong – revisions of economic estimates or predictions.

The equity markets often move to new economic data, yet, oddly enough, also seem to ignore subsequent revisions. As investors we must look at the economy broadly and try to pinpoint sectors attracting consumer dollars and the areas that are shrinking. Equity markets are unlike the economy in important ways.

Economic data, reports and outlooks take into account the larger view regarding the flow of money measured against all of the goods and services we produce (our gross domestic product, or GDP, a periodically fixed figure). Equity markets tend to care more about trajectory and rate of change.

Next year’s looming election season already spotlights trade deals, immigration and other issues to potentially change how our economy expands in the future. (Not to mention that “the richest among us … can ride the roller coaster up and protect themselves when the inevitable peak is reached,” according to a recent pre-election article on income inequality from Salon).

As an investor, you must primarily consider how certain issues might help or hinder your returns. If the housing market keeps humming as theme-park attendance withers, for example, earnings of companies that own amusement parks – such as the Walt Disney Co. (DIS) or Six Flags Entertainment Corp. (SIX) – might suffer while the overall economy thrives.

Best you keep an eye on the trajectory of the markets and the overall indicators of our economy. One or both may provide a clue about when your next roller coaster ride starts on Wall Street.  

Follow AdviceIQ on Twitter at @adviceiq.

Joseph “Big Joe” Clark, CFP, is the managing partner of the Financial Enhancement Group LLC, an SEC Registered Investment Advisory firm in Indiana. He is the host of Consider This with Big Joe Clark, found on WQME and iTunes. Big Joe can be reached at bigjoe@yourlifeafterwork.com, or (765) 640-1524. Follow him on Twitter at @Big Joe Clark and on Facebook at http://www.facebook.com/FinancialEnhancementGroup.

Securities offered through and by World Equity Group Inc. Member FINRA/SIPC. Advisory services can be offered by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

]]>
Summer rolls along, theme parks are open and lines for roller coasters are long. Wild rides are fun, but you probably want a more predictable path when investing. Let’s look at some parallels and distinctions between the equity markets, thrill rides and the overall economy.

First, you’re accustomed to Cyclone metaphors if you follow financial news and its ups and downs. “Hanging on to China’s stock-market roller coaster,” reads a recent Wall Street Journal report. “In the bond world, that's a stomach-churning roller coaster ride,” says CNN Money of last fall’s whipsaw of U.S. Treasuries’ rates.

Second, the connection of the stock market and an economy is either obvious or, right now, nonexistent, depending on what you read.

We do know that recreational riders of roller coasters spend “discretionary dollars” that these consumers choose to spend. In contrast, other items that we all must buy, such as food, are staples.

Housing is a staple that economists carefully watch and tightly link it to jobless numbers. We in turn watch unemployment numbers to know when household income ought to increase, and we track how and where households spend.

Currently, housing sales are the strongest in five years – great news for many, from homeowners and builders to appliance manufacturers and furniture stores. Mortgage applications continue to surge and the National Association of Realtors reports that home sales remained on a brisk pace in recent months.

Of course, as consumers spend on their homes, they do redirect money from discretionary purchases (such as tickets to amusement parks). Assessing the economy through a single filter is difficult. Overlooking a dollar here or there can lead to serious – not to mention wrong – revisions of economic estimates or predictions.

The equity markets often move to new economic data, yet, oddly enough, also seem to ignore subsequent revisions. As investors we must look at the economy broadly and try to pinpoint sectors attracting consumer dollars and the areas that are shrinking. Equity markets are unlike the economy in important ways.

Economic data, reports and outlooks take into account the larger view regarding the flow of money measured against all of the goods and services we produce (our gross domestic product, or GDP, a periodically fixed figure). Equity markets tend to care more about trajectory and rate of change.

Next year’s looming election season already spotlights trade deals, immigration and other issues to potentially change how our economy expands in the future. (Not to mention that “the richest among us … can ride the roller coaster up and protect themselves when the inevitable peak is reached,” according to a recent pre-election article on income inequality from Salon).

As an investor, you must primarily consider how certain issues might help or hinder your returns. If the housing market keeps humming as theme-park attendance withers, for example, earnings of companies that own amusement parks – such as the Walt Disney Co. (DIS) or Six Flags Entertainment Corp. (SIX) – might suffer while the overall economy thrives.

Best you keep an eye on the trajectory of the markets and the overall indicators of our economy. One or both may provide a clue about when your next roller coaster ride starts on Wall Street.  

Follow AdviceIQ on Twitter at @adviceiq.

Joseph “Big Joe” Clark, CFP, is the managing partner of the Financial Enhancement Group LLC, an SEC Registered Investment Advisory firm in Indiana. He is the host of Consider This with Big Joe Clark, found on WQME and iTunes. Big Joe can be reached at bigjoe@yourlifeafterwork.com, or (765) 640-1524. Follow him on Twitter at @Big Joe Clark and on Facebook at http://www.facebook.com/FinancialEnhancementGroup.

Securities offered through and by World Equity Group Inc. Member FINRA/SIPC. Advisory services can be offered by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

]]>
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Video: Hometown Sound Episode 2 with Paul Imholte http://dairylandpeach.com/2015/07/video-hometown-sound-episode-2-with-paul-imholte/ http://dairylandpeach.com/2015/07/video-hometown-sound-episode-2-with-paul-imholte/#comments Wed, 29 Jul 2015 18:29:44 +0000 http://dairylandpeach.com/?p=22117

Old MacDonald may have had a farm, but Paul Imholte thought there was no reason he couldn’t have a banjo. The Saint Cloud native is singing and playing string instruments to songs like “Old MacDonald Had A Farm” and “You are my Sunshine” for young audiences.

After growing up near St. Joseph, Minnesota, he said he enjoys writing and performing songs about the region.

“I have an interest in writing songs about the Midwest, about Minnesota, about, well, kind of the five-state area and rural life, small towns from where I come,” Imholte said.

He got the idea for the “Old MacDonald Had a Banjo” album and tour after eating pizza with his family. He said he liked the idea that Old MacDonald could have something different than just a farm.

“He could have a banjo, but he could have an accordion or a penny whistle or a dobro, or a bag pipe or a tuba, or electric guitar or an orchestra, and all those instruments fell into this recording, and it was so much fun,” Imholte said.

He said back a long time ago he made a children’s cassette, and now people were asking to get a CD of the old tunes.

“Children that grew up with that cassette were asking for their children if they could get a recording, so I said, ‘Yeah, it’s time I re-record some of these songs,’” Imholte said.

Whether the concert is at a library or a festival, he hopes the audience is having a good time while learning about different instruments.

“I feel like I’m introducing string instruments and folk music to young people,” Imholte said.

Imholte became interested in learning instruments after playing with his grandfather’s fiddle as a young boy. He started taking lessons for the fiddle when he was around 10 years old, but he was ready to start learning other instruments.

“I was intrigued by cowboys, and cowboys played guitars, so a little bit later I got myself a guitar and those were the two instruments I played through high school,” Imholte said.

After that came learning the mandolin, which he says is a cross between a fiddle and guitar and uses techniques to both instruments. Throughout his life, he continued to take a few more music lessons and learned several new instruments. He now also knows how to play the banjo, violin, cello, mandola, mountain dulcimer, viola, harmonica, autoharp, jaw harps and spoons. While enjoying to play each instrument, he says he is best known for his skills on the hammer dulcimer.

“It’s a very ancient instrument, very beautiful instrument,” Imholte said.

He remembers learning the hammer dulcimer after his friend lent him the instrument.

“I learned a tune out of a book, and then I started adapting other things that I knew from the fiddle and playing guitar and started composing for the instrument,” Imholte said.

The hammer dulcimer is an instrument that originated from the Middle East and helped create the modern day piano. His trapezoid-shaped instrument has 74 strings that are doubled allowing him to play on three different octaves. He creates the tune by holding a hammer in each hand and striking the strings. The instrument can create a unique opportunity for harmony and melody to be played whether it’s in a folk, jazz or classical  song.

“There aren’t as many hammer dulcimer players as there are guitarists or violinists,” Imholte said.

Imholte has nearly 10 CDs, that are made up mostly of his original work. In the next 10 years, he said he hopes to spend more time working on composition.

“Music is my lifework, so you know making music, playing for people is very very enjoyable,” Imholte said.”

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Annuity? Depends on Needs http://dairylandpeach.com/2015/07/annuity-depends-on-needs/ http://dairylandpeach.com/2015/07/annuity-depends-on-needs/#comments Wed, 29 Jul 2015 16:00:02 +0000 http://dairylandpeach.com/?guid=3054c653a4bc4e27de95fce8478e22e3 With an annuity, you invest a lump sum of cash to produce a monthly stream of income for a fixed period or for life. Whether annuities are good, bad or ugly rides on the type you choose and what you want it to do. Here’s what to know.

The income from your annuity can start now (aka an immediate annuity) or in the future (a deferred annuity). The issuers neither protect nor insure your funds, though, and the size of your future monthly check isn’t always a given. Your payout depends if the annuity is fixed or variable (where your payout depends on the performance of the managed portfolio fueling your annuity fund).

Also, not everyone needs an annuity. If you receive Social Security or a pension, you already have a variety of fixed annuity that pays you for the rest of your life. If you still want to pursue this kind of investment, here’s what to look for:

The good. If you’re a high-income earner in a high tax bracket, low-cost variable annuities can make sense if you max out your tax-advantaged 401(k) and individual retirement account deferrals and expect to land in a lower bracket when you retire. These variable annuities typically charge less than 1% per year.

A low-cost fixed or variable annuity may work if you want to convert a lump sum into a stream of income and you can afford to tie up a certain amount of your money for an extended time – possibly forever.

Longevity annuities, which you can set up to begin an income stream late in your life, can help if you’re concerned about outliving your assets and can afford to lock up some of your money.

Let’s say Alice is 73, in good health and comes from a long-lived family. She puts no more than 15% ($150,000) of her investments into a deferred (as in, until later in her life) fixed annuity to begin receiving monthly income when she turns 80; these payments will continue until she dies.

If she dies before any payments, the principal may be returned to her estate without interest. She might also forfeit the entire annuity if she dies after beginning to receive her stream of income.

New government initiatives allow you to put a portion of your 401(k) into an annuity. This option provides greater predictability and certainty for retirees, as investors don’t always invest wisely and retirement plan returns can suffer.

Finally, charitable annuities can be a beneficial way to make a tax-deductible donation to a charity and to receive a portion of your donation as a stream of income for life.

The bad and the ugly. Variable annuities can tie you down with 3% to 4% annual fees and surrender penalties – what you pay to cash in your annuity before it matures – applicable for up to 15 years or longer. Looking at variable annuities that you really don’t understand? Get a second opinion from an impartial advisor.

Are you in a low or moderate tax bracket? Buying an annuity with after-tax dollars (to defer investment income) may prove disappointing if your bracket ends up as high or higher in your retirement. Further, buying an annuity with after-tax money may be a poor tax decision: You swap lower capital gains rates on taxable income for higher ordinary income tax rates on all annuity gains.

You don’t need an annuity in an IRA, which is already tax-deferred. Holding an annuity in an IRA is largely redundant unless you specifically want the insurance/death benefit for your heirs.

A fixed annuity may augment your overall financial and investment strategy – but interest rates do remain unappealingly low. You’re better off waiting until rates rise to buy a fixed annuity that locks in those higher rates.

After-tax annuities also can’t be undone – once your money is in an annuity structure, it remains there. If you need or want to exit an annuity, you can only roll it over to a less-expensive annuity if you no longer face surrender penalties.

Are you planning to leave heirs your variable annuity? Annuities invested in equities make poor inheritances, with no step-up in basis (adjustment from the asset’s original price) to the current value when the initial owner (you, the annuitant) dies.

Fixed annuities can be attractive when interest rates move higher. I think that variable annuities come with more cons than pros. Buyer beware.

Follow AdviceIQ on Twitter at @adviceiq.

Eve Kaplan, CFP, is a fee-only advisor in Berkeley Heights, N.J. Kaplan Financial Advisors is a Registered Investment Advisor in New Jersey and New York.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

]]>
With an annuity, you invest a lump sum of cash to produce a monthly stream of income for a fixed period or for life. Whether annuities are good, bad or ugly rides on the type you choose and what you want it to do. Here’s what to know.

The income from your annuity can start now (aka an immediate annuity) or in the future (a deferred annuity). The issuers neither protect nor insure your funds, though, and the size of your future monthly check isn’t always a given. Your payout depends if the annuity is fixed or variable (where your payout depends on the performance of the managed portfolio fueling your annuity fund).

Also, not everyone needs an annuity. If you receive Social Security or a pension, you already have a variety of fixed annuity that pays you for the rest of your life. If you still want to pursue this kind of investment, here’s what to look for:

The good. If you’re a high-income earner in a high tax bracket, low-cost variable annuities can make sense if you max out your tax-advantaged 401(k) and individual retirement account deferrals and expect to land in a lower bracket when you retire. These variable annuities typically charge less than 1% per year.

A low-cost fixed or variable annuity may work if you want to convert a lump sum into a stream of income and you can afford to tie up a certain amount of your money for an extended time – possibly forever.

Longevity annuities, which you can set up to begin an income stream late in your life, can help if you’re concerned about outliving your assets and can afford to lock up some of your money.

Let’s say Alice is 73, in good health and comes from a long-lived family. She puts no more than 15% ($150,000) of her investments into a deferred (as in, until later in her life) fixed annuity to begin receiving monthly income when she turns 80; these payments will continue until she dies.

If she dies before any payments, the principal may be returned to her estate without interest. She might also forfeit the entire annuity if she dies after beginning to receive her stream of income.

New government initiatives allow you to put a portion of your 401(k) into an annuity. This option provides greater predictability and certainty for retirees, as investors don’t always invest wisely and retirement plan returns can suffer.

Finally, charitable annuities can be a beneficial way to make a tax-deductible donation to a charity and to receive a portion of your donation as a stream of income for life.

The bad and the ugly. Variable annuities can tie you down with 3% to 4% annual fees and surrender penalties – what you pay to cash in your annuity before it matures – applicable for up to 15 years or longer. Looking at variable annuities that you really don’t understand? Get a second opinion from an impartial advisor.

Are you in a low or moderate tax bracket? Buying an annuity with after-tax dollars (to defer investment income) may prove disappointing if your bracket ends up as high or higher in your retirement. Further, buying an annuity with after-tax money may be a poor tax decision: You swap lower capital gains rates on taxable income for higher ordinary income tax rates on all annuity gains.

You don’t need an annuity in an IRA, which is already tax-deferred. Holding an annuity in an IRA is largely redundant unless you specifically want the insurance/death benefit for your heirs.

A fixed annuity may augment your overall financial and investment strategy – but interest rates do remain unappealingly low. You’re better off waiting until rates rise to buy a fixed annuity that locks in those higher rates.

After-tax annuities also can’t be undone – once your money is in an annuity structure, it remains there. If you need or want to exit an annuity, you can only roll it over to a less-expensive annuity if you no longer face surrender penalties.

Are you planning to leave heirs your variable annuity? Annuities invested in equities make poor inheritances, with no step-up in basis (adjustment from the asset’s original price) to the current value when the initial owner (you, the annuitant) dies.

Fixed annuities can be attractive when interest rates move higher. I think that variable annuities come with more cons than pros. Buyer beware.

Follow AdviceIQ on Twitter at @adviceiq.

Eve Kaplan, CFP, is a fee-only advisor in Berkeley Heights, N.J. Kaplan Financial Advisors is a Registered Investment Advisor in New Jersey and New York.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

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Earnings: Good News? http://dairylandpeach.com/2015/07/earnings-good-news/ http://dairylandpeach.com/2015/07/earnings-good-news/#comments Wed, 29 Jul 2015 13:00:01 +0000 http://dairylandpeach.com/?guid=a9a36ca58b977ec8c635f6bf5b3e82f4 Corporate earnings seem to be doing better in the June-ending quarter than were projected several weeks ago, though that’s not saying much.

The good news is that earnings are climbing steadily out of the well of projected red ink for the second quarter. Apparently, analysts played it extra-safe again this quarter, much like the last one, with an increased cushion of about five percentage points (also known as 500 basis points) for estimates, in place of the usual three.

As the reporting season got under way, analysts estimated Standard & Poor’s 500 earnings to have fallen by about 4.5%, not very different from the original forecasts for the first quarter. According to research firm FactSet, the "blended" rate (the mix of actual results and estimated ones for those yet to report) had risen to a loss of 2.2% through last Friday.

With more than two-thirds of companies left to report, the clear implication is that the quarter will finish in the black, just as the first quarter did (up about 0.7%).

If you follow the market at all, you've heard about the recent, wondrous great leaps forward by the stock prices of Amazon (AMZN) and Google (GOOG).

Alas, the leaps were not quite enough to offset disappointment elsewhere, most notably from Apple (AAPL). The maker of i-stuff reported a perfectly respectable quarter and confirmed once again its ability to make gobs of money – $10.7 billion

in profit for the second quarter alone, nearly 50% more than it made in the second quarter of 2014. So of course Apple stock tanked. The problem, you see, is that it didn't report results and guidance that topped every estimate everywhere.

Amazon did. The company reported a heroic profit of $92 million, versus a loss of $126 million a year ago. For that, it was awarded an extra $20 billion or so in valuation. Why, it can make that back in a mere 200 quarters.

For 15 years, Amazon has proved several things in a consistent manner. One is that it is possible to grow sales rapidly by making it easy to buy products at or below cost. The second, not surprisingly, is that a company rarely makes any money this way. A third is that an occasional profitable quarter, however little the profit, is all that is necessary to get momentum investors to slap themselves silly in excitement.

The company's has also proved to be a double-edged "widow-maker," lethal to short during a bull market, fatal to hold during a bear. Years from now, wonks like the CFA Institute will have case studies on how it was possible for Amazon to have a valuation in defiance of reality for so long. Traders, though, will talk reverently of the money that was there to be made.

Not so much when it comes time to talk about the stock market of the second quarter of 2015 The normal rhythm of the market at this point is to be watching a couple of weeks of gains crest, though they often start to melt away in the last week of July. It's a pattern that typically gives way to early August weakness, followed by a silly season of light volume, vacation-fueled price levitation in the run-up to Labor Day and its immediate aftermath.

But the run-up in the S&P 500 that recently looked set for a breakout to another level stalled out, leaving prices barely above their June lows. (The index edged up 1.2% yesterday after China's troubled stock market steadied.) Such weakness isn't that unusual, to be sure, and it is surely perilous to attempt to be precise about the days the earnings rally will stop and start.

Still, earnings haven't been an inspiring show so far, with a lot of weak results and weak guidance from a lot of big companies, particularly the ones that make up the venerable Dow Jones Industrial Average.

Follow AdviceIQ on Twitter at @adviceiq.

M. Kevin Flynn, CFA, is the president of Avalon Asset Management Company in Lexington, Mass. Website: avalonassetmgmt.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

]]>
Corporate earnings seem to be doing better in the June-ending quarter than were projected several weeks ago, though that’s not saying much.

The good news is that earnings are climbing steadily out of the well of projected red ink for the second quarter. Apparently, analysts played it extra-safe again this quarter, much like the last one, with an increased cushion of about five percentage points (also known as 500 basis points) for estimates, in place of the usual three.

As the reporting season got under way, analysts estimated Standard & Poor’s 500 earnings to have fallen by about 4.5%, not very different from the original forecasts for the first quarter. According to research firm FactSet, the "blended" rate (the mix of actual results and estimated ones for those yet to report) had risen to a loss of 2.2% through last Friday.

With more than two-thirds of companies left to report, the clear implication is that the quarter will finish in the black, just as the first quarter did (up about 0.7%).

If you follow the market at all, you've heard about the recent, wondrous great leaps forward by the stock prices of Amazon (AMZN) and Google (GOOG).

Alas, the leaps were not quite enough to offset disappointment elsewhere, most notably from Apple (AAPL). The maker of i-stuff reported a perfectly respectable quarter and confirmed once again its ability to make gobs of money – $10.7 billion

in profit for the second quarter alone, nearly 50% more than it made in the second quarter of 2014. So of course Apple stock tanked. The problem, you see, is that it didn't report results and guidance that topped every estimate everywhere.

Amazon did. The company reported a heroic profit of $92 million, versus a loss of $126 million a year ago. For that, it was awarded an extra $20 billion or so in valuation. Why, it can make that back in a mere 200 quarters.

For 15 years, Amazon has proved several things in a consistent manner. One is that it is possible to grow sales rapidly by making it easy to buy products at or below cost. The second, not surprisingly, is that a company rarely makes any money this way. A third is that an occasional profitable quarter, however little the profit, is all that is necessary to get momentum investors to slap themselves silly in excitement.

The company's has also proved to be a double-edged "widow-maker," lethal to short during a bull market, fatal to hold during a bear. Years from now, wonks like the CFA Institute will have case studies on how it was possible for Amazon to have a valuation in defiance of reality for so long. Traders, though, will talk reverently of the money that was there to be made.

Not so much when it comes time to talk about the stock market of the second quarter of 2015 The normal rhythm of the market at this point is to be watching a couple of weeks of gains crest, though they often start to melt away in the last week of July. It's a pattern that typically gives way to early August weakness, followed by a silly season of light volume, vacation-fueled price levitation in the run-up to Labor Day and its immediate aftermath.

But the run-up in the S&P 500 that recently looked set for a breakout to another level stalled out, leaving prices barely above their June lows. (The index edged up 1.2% yesterday after China's troubled stock market steadied.) Such weakness isn't that unusual, to be sure, and it is surely perilous to attempt to be precise about the days the earnings rally will stop and start.

Still, earnings haven't been an inspiring show so far, with a lot of weak results and weak guidance from a lot of big companies, particularly the ones that make up the venerable Dow Jones Industrial Average.

Follow AdviceIQ on Twitter at @adviceiq.

M. Kevin Flynn, CFA, is the president of Avalon Asset Management Company in Lexington, Mass. Website: avalonassetmgmt.com.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

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Hadleigh Colleen Becker http://dairylandpeach.com/2015/07/hadleigh-colleen-becker/ http://dairylandpeach.com/2015/07/hadleigh-colleen-becker/#comments Tue, 28 Jul 2015 22:26:46 +0000 http://dairylandpeach.com/?p=22103 Hadleigh Colleen Becker

Hadleigh Colleen Becker was born to Emily Hughes and Jeremy Becker, of Grey Eagle, July 26, 2015, at 8:44 a.m. at the CentraCare Health, Melrose. She weighed
8 pounds, 1 ounces, and was 19 inches long.

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Delores Korte, 88 http://dairylandpeach.com/2015/07/delores-korte-88/ http://dairylandpeach.com/2015/07/delores-korte-88/#comments Tue, 28 Jul 2015 22:26:30 +0000 http://dairylandpeach.com/?p=22100 Delores   Korte, 88

Delores T. Korte, age 88, of Paynesville, died June 26, 2015 at her home in Paynesville. Visitation will be from 4-7 p.m. on Thursday, July 2, 2015 at the Daniel Funeral Home in St. Cloud with a Vigil Service at 7 p.m. Burial will take place at 11 a.m. on Friday, July 3 at Assumption Cemetery in St. Cloud. Arrangements are with the Daniel Funeral Home in St. Cloud.
Delores was born April 20, 1927 in St. Cloud to the late Herman and Rose (Wehseler) Korte. She lived in Rapid City, SD for many years. She returned to St. Cloud in 1975. She moved to Paynesville to live with her niece and caregiver Marla (Randy) Hartmann for the last four years. She enjoyed spending time with her family, photography and loved nature.
Delores is survived by her sister Sr. Rosemary Korte, OSB of Rapid City, SD, brother Fred (Bernie) Korte of Sauk Centre and many nieces and nephews.
Preceding Delores in death were her parents, brothers and sisters; Joletta Korte, Sr. Ernest Korte, OSB, Eleanor VanHeel, Raymond Korte, Bernadette Ruckmar, Ernest Korte, Marcella Michels, Olivia Huewe, and Dorothy Ferrian and half-brothers and sisters; Regina Schmidt, Ann Butkowski, Harry Korte, Teckla Arnzen, Hubert Korte and George Korte.
Memorials are preferred in lieu of flowers.

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Jerome Borash, 60 http://dairylandpeach.com/2015/07/jerome-borash-60/ http://dairylandpeach.com/2015/07/jerome-borash-60/#comments Tue, 28 Jul 2015 22:26:26 +0000 http://dairylandpeach.com/?p=22097 Jerome   Borash, 60

Mass of Christian Burial celebrating the life of Jerome J. Borash, age 60, of Rice, will be at 10:00 AM on Monday, July 27, 2015 at Holy Cross Church in North Prairie. Father Greg Mastey will officiate, Father Roger Klassen will concelebrate, and burial will take place in the parish cemetery. Jerome passed away Thursday morning after a long hard fight with cancer. There will be a visitation at the church in North Prairie from 4:00-9:00 PM on Sunday, July 26, 2015 and again after 9:00 AM Monday morning. Arrangements are being made with Miller-Carlin Funeral Home, Holdingford.

Jerome was born on January 22, 1955 to Raymond and Lucille (Puchalla) Borash. He attended the local elementary school and graduated from Royalton High School. Jerome married Debra Seelen on April 15, 1978 in Little Falls and they welcomed eight children in their family. He worked as a carman welder with Burlington Northern Railroad from 1973-1980 and then he worked as a coating prep operator from 1982-2012 at the Sartell Paper Mill. Jerome loved nature, helping on the family farm. He cherished his wife, children, daughters-in-law, son-in-law, future daughter-in-law, grandchildren, and siblings. He loved outdoor sports such as hunting and fishing, and helped 4-H Shooting Sports. Jerome was a past member of the Sportsmans Club, was a firearms safety instructor, a member of the Knights of Columbus, and a member of the Morrison County Sheriff's Posse. He was an active lifelong member of Holy Cross Church and was an usher for many years.

Jerome is survived by his wife of 37 years, Debra Borash, of Rice; his children Joseph (Kelly) Borash, Duluth; Jesse Borash, St. Cloud; Audrey Borash, St. Cloud; Alicia (Jon) Ostendorf, Rice; Joshua (Jessica) Borash, St. Stephen; Jacob Borash, Rice; Jason Borash, Rice; John (fiance;e Breanna Motschke) Borash, Hutchinson; his grandchildren Calvin Borash, Christian Borash, Landen and Isabella Ostendorf, Burklee Borash; his siblings Jim (Bernnie) Borash, Rice; Betty (John) Mastey, Foley; Kathy Street, Eyota; Elaine (Greg) Anderson, St. Joseph; Mary (Delmar) Lashinski, North Pole, AK; Jane (Darrell) Heitzman, Albany; Judy (Ron) Lashinski, South Haven; Ron (Ann) Borash, Bowlus; as well as other family and friends.

He was preceded in death by his parents Raymond and Lucille Borash, his brothers-in-law Mike Doucette and Gary Street, his niece Elizabeth Lashinski, and his nephew Michael Borash.

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Marcella Sperl, 88 http://dairylandpeach.com/2015/07/marcella-sperl-88/ http://dairylandpeach.com/2015/07/marcella-sperl-88/#comments Tue, 28 Jul 2015 22:26:20 +0000 http://dairylandpeach.com/?p=22094 Marcella   Sperl, 88

Mass of Christian Burial will take place at 11am on Tuesday, July 28th. Father Cletus Connors, OSB will officiate and burial will in the parish cemetery to follow. Visitation will be on Monday, July 27th from 4-8:00pm at the gathering space at Seven Dolors Catholic Church in Albany, MN with parish prayers at 4pm. Friends may also visit from 10-11am on Tuesday, July 28th prior to mass and Christian Mothers will pray the rosary in the church at 10:15 AM. Arrangements provided by Miller-Carlin Funeral Home of Albany.

Sal Sperl ended her sentimental journey of 88 years and passed away peacefully on Friday with her husband by her side.

She was born in Albany, MN on the home farm to Alfred and Rose (Sadlowsky) Miller. While at a dance, she met the love of her life, Anselm (Ansie) Sperl. They married in 1947 and enjoyed 67 years together.

Sal was valedictorian of her high school class and started her young career working for Kraft Foods and then Raymond Brothers in Minneapolis as a secretary. She returned to Albany where she worked for Stearns County Bank. After raising her children, Sal dedicated 20 years as a library assistant for Albany Area Schools.

Sal was a "domestic engineer"–she truly enjoyed being a homemaker and a hostess–and in her free time she loved flower gardening, cooking and baking, crossword puzzles, scrabble, quilting and painting. She and Ansie enjoyed displaying their crafts at shows for 15 years.

Sal is survived by her husband, Ansie, five children: Susan Sperl, Karen Sperl, Gary (Elaine) Sperl, Steve (Jean) Sperl, Kelly Sperl; nine grandchildren: Jessica, Andrea, Erika, Laura, David, Michael, Amanda, Adam, Mariah, and two great grandchildren: Willa and Hattie. Her surviving siblings are Helen Miller of Albany, MN, Joseph (Shirley) Miller of St. Joseph, Alice (Ron) Zumwalde of Richmond, MN, Dennis (Bonnie) Miller, Alexandria, MN and Ruth Miller, sister-in-law, of Albany, MN.

She was preceded in death by her parents Alfred and Rose Miller, a daughter Peggy, siblings Ralph Miller and Rosie DeMuth and her husband Leo, and Helen Miller's long-time companion Steve Schwahn, as well as four siblings who died in infancy–Edward, James, Pauline and Edmund.

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Retirement Fear: Inflation http://dairylandpeach.com/2015/07/retirement-fear-inflation/ http://dairylandpeach.com/2015/07/retirement-fear-inflation/#comments Tue, 28 Jul 2015 20:00:02 +0000 http://dairylandpeach.com/?guid=309b574c7c001f0d8225df45f8443512 When you were a kid, did you fear monsters hiding in your closet or under your bed? You’re no kid anymore and new fears haunt you – such as running out of money in retirement after a lifetime of watching prices go up. You can still plan now to enjoy enough to spend as well as how to spend it.

People do feel slightly better about their golden years’ money these days, according to the latest Employee Benefit Research Institute survey on retirement confidence. More than one out of five workers are now very confident – though almost one in every four express little faith that they’ve saved enough, with future medical expenses being a major concern.

(Good news: Actual retirees are the most confident of all that they have enough money.)

Nagging worry about what’s missing in our retirement plans can be very justified. Additional good news is that you can manage such fears.

You need to consider many risks in your planning process, especially the often-ignored creep of inflation. While a bad price spiral is hardly inevitable, a more muted pace of inflation remains a good bet. Best estimates put the coming years’ overall price jumps at about 2% annually – much as anyone can predict such a figure.

My firm sees many individuals who factor in zero inflation when calculating their future income stream. In other words, their investment plan generates a retirement income stream that will never rise even if they live 25 years or more after working. Other folks project an inflation rate (3% is the norm) and then figure out how much they can spend today with their income increasing every year, from bigger withdrawals from their retirement funds, until they die.

Both approaches contain inherent flaws in logic. Planning your retirement income needs to address the money to maintain your standard of living, not just replace your current income.

Your plan also needs to allocate funds between two areas of expense: fixed, or essential, expenditures such as shelter, phone service and insurance, among others. Fixed expenses will most likely increase with inflation over time. This is one reason that monthly Social Security benefits receive an annual cost-of-living adjustment (1.7% this year).

The second type of expense we call “social” and includes such fun stuff as travel, hobbies and activities we all hope to enjoy forever – but that we may need to give up as we age.

During the last 27 years as a financial planner, I saw many families not plan for inflation and run out of purchasing power. Perhaps even worse, others spent less when younger (and healthier) and then later found themselves older with plenty of money and little energy to spend it.

How can you create a revenue stream that provides adequate funding for the life you want throughout your retirement?

For one, make a careful budget going into retirement. Make a list that includes all expenditures you know will arise and add the ones you anticipate enjoying. Assign each item to the fixed or social expense category.

When calculating the income you’ll need for fixed expenditures, better you account for inflation. You don’t want to have more life than money left when you need to eat and a place to sleep.

Regarding social expenses, flat line the income, especially for after age 68. Due to inflation, this approach does reduce the purchasing power of your social budget over time. It also allows you more social income while you’re still younger and able to enjoy the fun things in life.

Follow AdviceIQ on Twitter at @adviceiq.

Joseph “Big Joe” Clark, CFP, is the managing partner of the Financial Enhancement Group LLC, an SEC Registered Investment Advisory firm in Indiana. He is the host of Consider This with Big Joe Clark, found on WQME and iTunes. Big Joe can be reached at bigjoe@yourlifeafterwork.com, or (765) 640-1524. Follow him on Twitter at @Big Joe Clark and on Facebook at http://www.facebook.com/FinancialEnhancementGroup.

Securities offered through and by World Equity Group Inc. Member FINRA/SIPC. Advisory services can be offered by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

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When you were a kid, did you fear monsters hiding in your closet or under your bed? You’re no kid anymore and new fears haunt you – such as running out of money in retirement after a lifetime of watching prices go up. You can still plan now to enjoy enough to spend as well as how to spend it.

People do feel slightly better about their golden years’ money these days, according to the latest Employee Benefit Research Institute survey on retirement confidence. More than one out of five workers are now very confident – though almost one in every four express little faith that they’ve saved enough, with future medical expenses being a major concern.

(Good news: Actual retirees are the most confident of all that they have enough money.)

Nagging worry about what’s missing in our retirement plans can be very justified. Additional good news is that you can manage such fears.

You need to consider many risks in your planning process, especially the often-ignored creep of inflation. While a bad price spiral is hardly inevitable, a more muted pace of inflation remains a good bet. Best estimates put the coming years’ overall price jumps at about 2% annually – much as anyone can predict such a figure.

My firm sees many individuals who factor in zero inflation when calculating their future income stream. In other words, their investment plan generates a retirement income stream that will never rise even if they live 25 years or more after working. Other folks project an inflation rate (3% is the norm) and then figure out how much they can spend today with their income increasing every year, from bigger withdrawals from their retirement funds, until they die.

Both approaches contain inherent flaws in logic. Planning your retirement income needs to address the money to maintain your standard of living, not just replace your current income.

Your plan also needs to allocate funds between two areas of expense: fixed, or essential, expenditures such as shelter, phone service and insurance, among others. Fixed expenses will most likely increase with inflation over time. This is one reason that monthly Social Security benefits receive an annual cost-of-living adjustment (1.7% this year).

The second type of expense we call “social” and includes such fun stuff as travel, hobbies and activities we all hope to enjoy forever – but that we may need to give up as we age.

During the last 27 years as a financial planner, I saw many families not plan for inflation and run out of purchasing power. Perhaps even worse, others spent less when younger (and healthier) and then later found themselves older with plenty of money and little energy to spend it.

How can you create a revenue stream that provides adequate funding for the life you want throughout your retirement?

For one, make a careful budget going into retirement. Make a list that includes all expenditures you know will arise and add the ones you anticipate enjoying. Assign each item to the fixed or social expense category.

When calculating the income you’ll need for fixed expenditures, better you account for inflation. You don’t want to have more life than money left when you need to eat and a place to sleep.

Regarding social expenses, flat line the income, especially for after age 68. Due to inflation, this approach does reduce the purchasing power of your social budget over time. It also allows you more social income while you’re still younger and able to enjoy the fun things in life.

Follow AdviceIQ on Twitter at @adviceiq.

Joseph “Big Joe” Clark, CFP, is the managing partner of the Financial Enhancement Group LLC, an SEC Registered Investment Advisory firm in Indiana. He is the host of Consider This with Big Joe Clark, found on WQME and iTunes. Big Joe can be reached at bigjoe@yourlifeafterwork.com, or (765) 640-1524. Follow him on Twitter at @Big Joe Clark and on Facebook at http://www.facebook.com/FinancialEnhancementGroup.

Securities offered through and by World Equity Group Inc. Member FINRA/SIPC. Advisory services can be offered by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

]]>
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Paying Down Student Loans http://dairylandpeach.com/2015/07/paying-down-student-loans/ http://dairylandpeach.com/2015/07/paying-down-student-loans/#comments Tue, 28 Jul 2015 17:00:02 +0000 http://dairylandpeach.com/?guid=f7b06e8fa1b8f5a4c60c799465bbb69e The debt of student loans can feel like an enormous burden. If you’re a millennial (born in the 1980s and early 1990s), you like many of your contemporaries may hold back as you struggle to afford minimum payments while you save for everything else in life. Here’s how to get your newly graduated head above water.

Fair Isaac Corp. recently found that delinquency rates on student loans made rose to 15% in recent years, to $27,253 in 2012 from $17,233 in 2005. With college costs climbing twice as fast as inflation, outstanding education debt has swelled to $1 trillion, more than what Americans owe on their credit cards.

Still, plenty of young adults successfully pay the debts off. How?

Saving versus debt. Chances are you know that saving your money is just as important as paying off your debt. But how much should you save? What you should save for, and how do you prioritize between putting money away and whittling your debt?

Aim to create a cash cushion of about $1,000, a small emergency fund to help you through unexpected situations without pushing you further into debt. Also keep your big picture in mind: Repayment periods on student loans average 10 years; you probably don’t want to wait that long to save for a house or a wedding.

You can re-evaluate your budget to see if you can cut any costs or lessen some expenses. Be critical about what’s truly a need and what’s a mere want. If your multiple goals must coexist with paying off student debt, you can also earn extra money to fund savings.

Negotiate for what you’re worth at your current job or look for new positions that pay better. You can also take a side job.

Interest rates. Your interest rate is a percentage of your loan charged when you borrow money. The higher your interest rate, the more you pay to borrow. The longer your repayment term, the more you end up shelling out over the life of the loan.

Some believe in paying the minimum if your interest rates are around 2.2% or lower, reasoning that saving money to invest nets a better return. If your interest rates are on the high end — around 5% or more — prioritize how to pay them off a quickly as possible.

That’s where making extra payments come into play. The more you can pay toward your student loans, the less you pay toward interest, allowing you to chip away at the principal balance of your loan. You don’t necessarily have to pay extra all the time; pay more when you can, even if only once or twice a year.

Unaffordable payments. If you have federal loans, investigate the many flexible income-based repayment options available. Call your loan servicer and explain your situation and ask for a recommendation for a specific repayment plan. The Office of Federal Student Aid of the U.S. Department of Education also offers a guide on repayment plans, including the necessary qualifications.

You may also qualify for deferment or forbearance if you have financial hardship; deferment is a temporary period where you don’t have to make payments, and interest doesn’t accrue on your subsidized loans. Interest does accrue on unsubsidized loans. Forbearance is similar to deferment, except interest continues accruing on all your loans during the time that you don’t have to make payments.

Getting your loans forgiven, discharged or canceled is possible, but only in select circumstances (often involving military personnel, teachers, nurses, child-care providers or indebted borrowers who attended a school that’s closed).

Private loans don’t come with as many repayment options as do federal loans do, but many lenders will work with borrowers seeking forbearance. Call your loan servicer.

Refinancing – subject of recent political wrangling on Capitol Hill – or consolidating your loans are two more possible avenues. Refinancing generally improves your terms (to lower your interest rate, for example). Consolidating can make payment easier; if you owe seven different lenders, combining the loans rolls all your payments into one.

You can do both with federal loans, too.

Now that you’re armed with some essential knowledge, how do you get your loans out of your life?

Look at your entire financial situation. Do you have any other debt? What’s your salary? How much can you afford to pay toward your loans? Answers to these questions help you formulate a plan of attack.

Budget and track your expenses. Learn where your money goes and how you use it – especially if you often lack enough money to last you a month.

Evaluate expenses. After you establish your budget, re-examine your expenses. Question the value you get out of various purchases and outlays. If paying down student loans is your top priority, somehow find room for extra payments in your budget.

Earn more. If you’ve cut back on all your expenses, and are still struggling to make payments or find room in your budget for basic needs, try earning more money. You can work overtime at your job, take on additional shifts or get a second job.

Having trouble finding employment? Many individuals are making their own jobs based off of hobbies or skills they have. Do you enjoy pet-sitting, babysitting, crafting, consulting, freelancing, or organizing? Advertise your services and get the word out.

Have a plan and follow It: Paying your student loans off is going to be a long journey. It’s important to have a plan to refer back to when times get tough. Choose exactly how you’re going to pay off your debt. Pick one loan out from the rest and singularly focus on paying it down, while paying the minimum on the rest. This one loan might be the loan with the highest interest rate, the lowest balance or one you just want to see gone.

Stay hopeful: Remember, paying off debt can be a difficult journey filled with ups and downs. It’s important to build a support system and stay hopeful when you hit a roadblock. Surround yourself with friends who can relate to what you’re going through, and stick with people who help you achieve your goals.

Follow AdviceIQ on Twitter at @adviceiq.

Mary Beth Storjohann, CFP, is the founder of Workable Wealth, an RIA in San Diego. She is a writer, speaker and financial coach who is passionate about working with individuals and couples in their 20s and 30s to help them organize and gain confidence in their financial lives. She has been quoted or featured in various industry publications on the local and national level. You can find her on Twitter at @marybstorj.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

 

]]>
The debt of student loans can feel like an enormous burden. If you’re a millennial (born in the 1980s and early 1990s), you like many of your contemporaries may hold back as you struggle to afford minimum payments while you save for everything else in life. Here’s how to get your newly graduated head above water.

Fair Isaac Corp. recently found that delinquency rates on student loans made rose to 15% in recent years, to $27,253 in 2012 from $17,233 in 2005. With college costs climbing twice as fast as inflation, outstanding education debt has swelled to $1 trillion, more than what Americans owe on their credit cards.

Still, plenty of young adults successfully pay the debts off. How?

Saving versus debt. Chances are you know that saving your money is just as important as paying off your debt. But how much should you save? What you should save for, and how do you prioritize between putting money away and whittling your debt?

Aim to create a cash cushion of about $1,000, a small emergency fund to help you through unexpected situations without pushing you further into debt. Also keep your big picture in mind: Repayment periods on student loans average 10 years; you probably don’t want to wait that long to save for a house or a wedding.

You can re-evaluate your budget to see if you can cut any costs or lessen some expenses. Be critical about what’s truly a need and what’s a mere want. If your multiple goals must coexist with paying off student debt, you can also earn extra money to fund savings.

Negotiate for what you’re worth at your current job or look for new positions that pay better. You can also take a side job.

Interest rates. Your interest rate is a percentage of your loan charged when you borrow money. The higher your interest rate, the more you pay to borrow. The longer your repayment term, the more you end up shelling out over the life of the loan.

Some believe in paying the minimum if your interest rates are around 2.2% or lower, reasoning that saving money to invest nets a better return. If your interest rates are on the high end — around 5% or more — prioritize how to pay them off a quickly as possible.

That’s where making extra payments come into play. The more you can pay toward your student loans, the less you pay toward interest, allowing you to chip away at the principal balance of your loan. You don’t necessarily have to pay extra all the time; pay more when you can, even if only once or twice a year.

Unaffordable payments. If you have federal loans, investigate the many flexible income-based repayment options available. Call your loan servicer and explain your situation and ask for a recommendation for a specific repayment plan. The Office of Federal Student Aid of the U.S. Department of Education also offers a guide on repayment plans, including the necessary qualifications.

You may also qualify for deferment or forbearance if you have financial hardship; deferment is a temporary period where you don’t have to make payments, and interest doesn’t accrue on your subsidized loans. Interest does accrue on unsubsidized loans. Forbearance is similar to deferment, except interest continues accruing on all your loans during the time that you don’t have to make payments.

Getting your loans forgiven, discharged or canceled is possible, but only in select circumstances (often involving military personnel, teachers, nurses, child-care providers or indebted borrowers who attended a school that’s closed).

Private loans don’t come with as many repayment options as do federal loans do, but many lenders will work with borrowers seeking forbearance. Call your loan servicer.

Refinancing – subject of recent political wrangling on Capitol Hill – or consolidating your loans are two more possible avenues. Refinancing generally improves your terms (to lower your interest rate, for example). Consolidating can make payment easier; if you owe seven different lenders, combining the loans rolls all your payments into one.

You can do both with federal loans, too.

Now that you’re armed with some essential knowledge, how do you get your loans out of your life?

Look at your entire financial situation. Do you have any other debt? What’s your salary? How much can you afford to pay toward your loans? Answers to these questions help you formulate a plan of attack.

Budget and track your expenses. Learn where your money goes and how you use it – especially if you often lack enough money to last you a month.

Evaluate expenses. After you establish your budget, re-examine your expenses. Question the value you get out of various purchases and outlays. If paying down student loans is your top priority, somehow find room for extra payments in your budget.

Earn more. If you’ve cut back on all your expenses, and are still struggling to make payments or find room in your budget for basic needs, try earning more money. You can work overtime at your job, take on additional shifts or get a second job.

Having trouble finding employment? Many individuals are making their own jobs based off of hobbies or skills they have. Do you enjoy pet-sitting, babysitting, crafting, consulting, freelancing, or organizing? Advertise your services and get the word out.

Have a plan and follow It: Paying your student loans off is going to be a long journey. It’s important to have a plan to refer back to when times get tough. Choose exactly how you’re going to pay off your debt. Pick one loan out from the rest and singularly focus on paying it down, while paying the minimum on the rest. This one loan might be the loan with the highest interest rate, the lowest balance or one you just want to see gone.

Stay hopeful: Remember, paying off debt can be a difficult journey filled with ups and downs. It’s important to build a support system and stay hopeful when you hit a roadblock. Surround yourself with friends who can relate to what you’re going through, and stick with people who help you achieve your goals.

Follow AdviceIQ on Twitter at @adviceiq.

Mary Beth Storjohann, CFP, is the founder of Workable Wealth, an RIA in San Diego. She is a writer, speaker and financial coach who is passionate about working with individuals and couples in their 20s and 30s to help them organize and gain confidence in their financial lives. She has been quoted or featured in various industry publications on the local and national level. You can find her on Twitter at @marybstorj.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

 

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Central Banks’ Supremacy http://dairylandpeach.com/2015/07/central-banks-supremacy/ http://dairylandpeach.com/2015/07/central-banks-supremacy/#comments Tue, 28 Jul 2015 14:00:02 +0000 http://dairylandpeach.com/?guid=c2da7f642a464552aae73dc4fc222e64 Central banks now lord it over the world’s economy. That has led to a lot of distortions and could end up harming the very system they seek to help.

One sign that all is not right in the field of investing is the increasing volatility.  Volatility is not a good thing for investors seeking to limit their risk and markets recently have been as spiked as Jonestown Kool-Aid.  The results could be nearly as disastrous. 

 

As the chart shows, currency, oil and interest rates have been up, down and all around.  Bonds, too, have been volatile, and price shifts have been taking place with increasing frequency.

It makes me uncomfortable when I see government bonds flash crashing along with currencies of developed markets with enormous debt levels.  The Swiss National Bank in January unpegged its currency from the euro, which Switzerland feared would drag down its franc.  

And if Japan keeps burning yen, pumping money into the nation’s economy to goose its dragging performance and thus pulling down the currency’s value, trading rival China is likely to unpeg its currency, too. China’s yuan is informally linked to the U.S. dollar, which over the past year has strengthened.

When Beijing uncouples the yuan, it isn’t going to be fun. Look for big disruptions in foreign exchanges and international trade, which affects economic growth and your investments.

Why is this turmoil happening?  Because central bankers have become the Masters of the Universe.

As Zerohedge notes, valuations in recent years have synched up to central banks’ quantitative easing or QE – buying bonds to keep interest rates low and stimulate their torpid economies.

The financial website points out: “In meetings with investors, we have been struck by how little time anyone spends discussing fundamentals these days, and how much revolves around central banks.  Record-high proportions of investors think fixed income is expensive and think equities are expensive.  A growing number of property market participants seem to think real estate is expensive. And yet almost all have had to remain long, as each of these markets has rallied.”  

Putting central bankers in charge of the world’s financial systems might have seemed like a good idea back in 2008, when the world needed to be saved and there were few options for saving it.  But in the seventh year of ruling the world, the most significant result is that markets have become distorted.  The new normal is abnormal.

Zerohedge further notes that “it is expectations of central bank liquidity, not economic or corporate fundamentals, which have become the main driver of everything” from euros to dollars to credit spreads, the difference in yield between Treasuries and other bonds.

One problem with the new order is that it’s unlikely that central bankers can make a smooth transition back to the good, old-fashioned markets that react to financial performance and economic reality, rather than today’s Fed-induced fantasyland.

The Federal Reserve Board was able to end its quantitative easing program without the world coming to an end, but what happens when the Fed raises interest rates, as it eventually must?  The stock market could go into cardiac arrest – and, having used all of its tools in an attempt to revive the economy, the toolbox is empty.  Even Fed Chair Janet Yellen is no longer talking about “macroprudential supervision,” as a Fed tool. (This refers to the Fed regulating the financial system to minimize risk.) So what’s left?

But someone will have to do something, Zerohedge says, as, “Central bank distortions have forced investors into positions they would not have held otherwise, and forced them to be the ‘same way round’ to a much greater extent than previously.”

When investors are all rushing into the same markets at the same time, prices increase.  When they all rush for the exits at the same time, prices decrease.  In the bond market, the result is an illiquid market.  

Because of this herding of investors, more central banks seek to add liquidity to markets, which ironically become more illiquid.  Herding “creates markets which trend strongly, but are then prone to sudden corrections.  It also leaves investors more focused on central banks than ever before – and is liable to make it impossible for the central banks to make a smooth exit.”

Add today’s regulatory environment and high-frequency trading into the mix and there’s plenty to worry about.  Even the Masters of the Universe may not be able to save us.

Follow AdviceIQ on Twitter at @adviceiq.

Brenda P. Wenning is president of Wenning Investments LLC in Newton, Mass. 

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

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Central banks now lord it over the world’s economy. That has led to a lot of distortions and could end up harming the very system they seek to help.

One sign that all is not right in the field of investing is the increasing volatility.  Volatility is not a good thing for investors seeking to limit their risk and markets recently have been as spiked as Jonestown Kool-Aid.  The results could be nearly as disastrous. 

 

As the chart shows, currency, oil and interest rates have been up, down and all around.  Bonds, too, have been volatile, and price shifts have been taking place with increasing frequency.

It makes me uncomfortable when I see government bonds flash crashing along with currencies of developed markets with enormous debt levels.  The Swiss National Bank in January unpegged its currency from the euro, which Switzerland feared would drag down its franc.  

And if Japan keeps burning yen, pumping money into the nation’s economy to goose its dragging performance and thus pulling down the currency’s value, trading rival China is likely to unpeg its currency, too. China’s yuan is informally linked to the U.S. dollar, which over the past year has strengthened.

When Beijing uncouples the yuan, it isn’t going to be fun. Look for big disruptions in foreign exchanges and international trade, which affects economic growth and your investments.

Why is this turmoil happening?  Because central bankers have become the Masters of the Universe.

As Zerohedge notes, valuations in recent years have synched up to central banks’ quantitative easing or QE – buying bonds to keep interest rates low and stimulate their torpid economies.

The financial website points out: “In meetings with investors, we have been struck by how little time anyone spends discussing fundamentals these days, and how much revolves around central banks.  Record-high proportions of investors think fixed income is expensive and think equities are expensive.  A growing number of property market participants seem to think real estate is expensive. And yet almost all have had to remain long, as each of these markets has rallied.”  

Putting central bankers in charge of the world’s financial systems might have seemed like a good idea back in 2008, when the world needed to be saved and there were few options for saving it.  But in the seventh year of ruling the world, the most significant result is that markets have become distorted.  The new normal is abnormal.

Zerohedge further notes that “it is expectations of central bank liquidity, not economic or corporate fundamentals, which have become the main driver of everything” from euros to dollars to credit spreads, the difference in yield between Treasuries and other bonds.

One problem with the new order is that it’s unlikely that central bankers can make a smooth transition back to the good, old-fashioned markets that react to financial performance and economic reality, rather than today’s Fed-induced fantasyland.

The Federal Reserve Board was able to end its quantitative easing program without the world coming to an end, but what happens when the Fed raises interest rates, as it eventually must?  The stock market could go into cardiac arrest – and, having used all of its tools in an attempt to revive the economy, the toolbox is empty.  Even Fed Chair Janet Yellen is no longer talking about “macroprudential supervision,” as a Fed tool. (This refers to the Fed regulating the financial system to minimize risk.) So what’s left?

But someone will have to do something, Zerohedge says, as, “Central bank distortions have forced investors into positions they would not have held otherwise, and forced them to be the ‘same way round’ to a much greater extent than previously.”

When investors are all rushing into the same markets at the same time, prices increase.  When they all rush for the exits at the same time, prices decrease.  In the bond market, the result is an illiquid market.  

Because of this herding of investors, more central banks seek to add liquidity to markets, which ironically become more illiquid.  Herding “creates markets which trend strongly, but are then prone to sudden corrections.  It also leaves investors more focused on central banks than ever before – and is liable to make it impossible for the central banks to make a smooth exit.”

Add today’s regulatory environment and high-frequency trading into the mix and there’s plenty to worry about.  Even the Masters of the Universe may not be able to save us.

Follow AdviceIQ on Twitter at @adviceiq.

Brenda P. Wenning is president of Wenning Investments LLC in Newton, Mass. 

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

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6 Questions About 529 Plans http://dairylandpeach.com/2015/07/6-questions-about-529-plans/ http://dairylandpeach.com/2015/07/6-questions-about-529-plans/#comments Mon, 27 Jul 2015 20:00:02 +0000 http://dairylandpeach.com/?guid=b37ccf4cb446b5cde8d931e76c96a5ee If you’re saving for your child’s higher education, you probably have a lot of questions besides “When did college get so incredibly expensive?” One popular savings tool that might puzzle you the most is the relatively new 529 plan. Here are the most popular questions.

The 529 college savings plan – begun in the late 1980s and now operated by states or educational institutions – offers tax-advantaged ways to save for various costs of higher education. What else should you know?

Common questions I hear from my clients:

What can my child use 529 money for? The money can pay for qualified expenses such as tuition, fees, books, supplies, computer-related costs and room and board for someone who is at least a half-time student. Pizza, burritos and beer don’t qualify, unfortunately.

How much can I contribute? The answer is not as straightforward as with an individual retirement account or 401(k) retirement plan. Generally, contributions to a 529 max out at $350,000 per beneficiary.

You also need to remember federal gifting tax laws. A gift of more than $14,000 to a single person in one year incurs gift tax. A 529 allows an individual to potentially contribute up to $70,000 (married couples up to $140,000) tax-free in one year to an account for a particular beneficiary.

To do this, you elect to treat the entire gift as a series of five equal annual gifts when you file Internal Revenue Service Form 709, “Gift and Generation-Skipping Transfer” with your annual tax return. The IRS can tell you more.

There are no age or income restrictions to contribute.

What if our relatives want to contribute? Family members can either open a 529 account and name your child as the beneficiary or kick into an existing 529 that they don’t own.

If your family members contribute to a 529 account that they do own, they receive a state tax benefit if their state offers such a deduction. Opening just one account for the beneficiary and letting your family help fund it can be simpler.

Why use a 529 over a regular taxable account? These accounts defer taxes; your contributions grow tax-free as long as you use the funds on the qualified expenses mentioned above.

This beats paying the government for an after-tax account – but the latter does offer complete flexibility on where and how you can spend the money. A 529 doesn’t.

What if my child gets a full scholarship? You will not lose money.

You can withdraw from the 529 without penalty, though you do pay taxes on the earnings at the scholarship recipient’s tax rate. You can also use your 529 to pay for expenses that the scholarship doesn’t cover, such as room and board, books and other required supplies.

You can keep the 529 open with your child as beneficiary if he or she plans on graduate school, or you can also change the beneficiary and name another college-bound child.

What if my child does not want to go to college? You can change the beneficiary to another family member (a sibling, first cousin, grandparent, aunt, uncle or yourself, for example), and the money goes toward that person’s education. Most plans allow you to change your beneficiary only once a year; if your child has a change of heart and does decide to attend college, you can rename that child the beneficiary.

Remember too that these funds can help pay for two-year associate degrees, as well as for trade and vocational schools.

A final option: Withdraw the money, or cash out the plan. You pay income tax and a 10% penalty on the earnings, but not on your contributions.

If unsure that your child is in fact headed to college, sit tight on cashing out. One thing you learn fast about young adults: Life can always change.

Follow AdviceIQ on Twitter at @adviceiq.

Andrew Comstock, CFA, is president and chief investment officer of Castlebar Asset Management in Leawood, Kan.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

]]>
If you’re saving for your child’s higher education, you probably have a lot of questions besides “When did college get so incredibly expensive?” One popular savings tool that might puzzle you the most is the relatively new 529 plan. Here are the most popular questions.

The 529 college savings plan – begun in the late 1980s and now operated by states or educational institutions – offers tax-advantaged ways to save for various costs of higher education. What else should you know?

Common questions I hear from my clients:

What can my child use 529 money for? The money can pay for qualified expenses such as tuition, fees, books, supplies, computer-related costs and room and board for someone who is at least a half-time student. Pizza, burritos and beer don’t qualify, unfortunately.

How much can I contribute? The answer is not as straightforward as with an individual retirement account or 401(k) retirement plan. Generally, contributions to a 529 max out at $350,000 per beneficiary.

You also need to remember federal gifting tax laws. A gift of more than $14,000 to a single person in one year incurs gift tax. A 529 allows an individual to potentially contribute up to $70,000 (married couples up to $140,000) tax-free in one year to an account for a particular beneficiary.

To do this, you elect to treat the entire gift as a series of five equal annual gifts when you file Internal Revenue Service Form 709, “Gift and Generation-Skipping Transfer” with your annual tax return. The IRS can tell you more.

There are no age or income restrictions to contribute.

What if our relatives want to contribute? Family members can either open a 529 account and name your child as the beneficiary or kick into an existing 529 that they don’t own.

If your family members contribute to a 529 account that they do own, they receive a state tax benefit if their state offers such a deduction. Opening just one account for the beneficiary and letting your family help fund it can be simpler.

Why use a 529 over a regular taxable account? These accounts defer taxes; your contributions grow tax-free as long as you use the funds on the qualified expenses mentioned above.

This beats paying the government for an after-tax account – but the latter does offer complete flexibility on where and how you can spend the money. A 529 doesn’t.

What if my child gets a full scholarship? You will not lose money.

You can withdraw from the 529 without penalty, though you do pay taxes on the earnings at the scholarship recipient’s tax rate. You can also use your 529 to pay for expenses that the scholarship doesn’t cover, such as room and board, books and other required supplies.

You can keep the 529 open with your child as beneficiary if he or she plans on graduate school, or you can also change the beneficiary and name another college-bound child.

What if my child does not want to go to college? You can change the beneficiary to another family member (a sibling, first cousin, grandparent, aunt, uncle or yourself, for example), and the money goes toward that person’s education. Most plans allow you to change your beneficiary only once a year; if your child has a change of heart and does decide to attend college, you can rename that child the beneficiary.

Remember too that these funds can help pay for two-year associate degrees, as well as for trade and vocational schools.

A final option: Withdraw the money, or cash out the plan. You pay income tax and a 10% penalty on the earnings, but not on your contributions.

If unsure that your child is in fact headed to college, sit tight on cashing out. One thing you learn fast about young adults: Life can always change.

Follow AdviceIQ on Twitter at @adviceiq.

Andrew Comstock, CFA, is president and chief investment officer of Castlebar Asset Management in Leawood, Kan.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

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When Advice Falls Short http://dairylandpeach.com/2015/07/when-advice-falls-short/ http://dairylandpeach.com/2015/07/when-advice-falls-short/#comments Mon, 27 Jul 2015 17:00:03 +0000 http://dairylandpeach.com/?guid=48ff956eb71e61a3a92aa07cb18b09f6 Yes, you can get a bad financial plan, one that doesn’t cover every facet of your life. Like matching your income and your spending.

Take my client Joanna. At 10:06 a.m. on Feb. 22, 2007, her divorce was finally final. She headed straight for the outlets: Retail therapy was in store and she looked forward to some healing.

The people who love Joanna wanted her happy, healthy and healed. No doubt they also wanted her to be able to pay the bills she racked up in her celebration.

Seven years later, Joanna comes into my office. By this time she’s in her mid-50s with a few health issues and still earns about $65,000 a year, not much more than in 2007. What has changed, she explains to me, is that her accounts are nearing empty and she might have to sell her home so she can send her last son to the kind of expensive college her first three sons enjoyed.

She pushes all her paperwork across the table. I see she hired an advisor from a well-known big firm and took the time to list her expenses on a worksheet I sent to her before our meeting. Looking over her tax returns, spending records and account statements, I clearly see she’s $5,000 underwater every month.

I ask her what plan she worked off to this point, and she says she expected her investments to do better and her money to last longer.

Advisors can come in one of two types: 1) Commission-based, which means they earn money based on your investment and planning choices. 2) Fee-only (like me), which means they work for a flat rate or a percent of your assets and earn nothing extra based on your decisions. Joanna had seen a commission-based advisor

But you also can divide advisors by how well they plan your finances. Her previous one didn’t do a very good job when it came to tracking her spending. A financial plan needs to look at every bit of your life, not just your investments. We lock eyes as she grins in acknowledgement of oops! hanging in the air.

In 2007, Joanna walked away from her 23-year marriage with $960,000 in cash, a paid-for home she thinks is now worth $975,000 and $5,000 in monthly support that ended just before she came to see me.

Joanna says she’s ready to get serious. We have the home appraised – the amount comes in at $725,000, much less of course than she figured. We factored in another 8%, or $58,000 in her case, for costs of selling the home. That left $667,000 as the net Joanna can expect from the sale of her home before taxes – another surprise for her.

She’s tested the idea of earning more. At her age with health issues and her inability to work more hours, employers showed little willingness to hire her. Reviewing her expenses, she agrees she can cut back on some items but remains worried about her son waiting to go to that expensive college.

I get paid to be straight with clients, and they are allowed to hate my answers.

For Joanna, we first projected conditions of her life going forward if she makes no changes. We thought who might provide shelter for her and her son before the end of the year if she decided to make no adjustments to her money situation (a short list). Then we modeled her life with very sharp and immediate changes.

She chose immediate – and substantial – pain over certain destitution. We sold the home and she banked $600,000 from the sale, paid her credit card off and started renting a nearby townhome to lower her expenses.

She takes about $2,000 each month from her accounts to supplement the $5,000 she earns. We work to pinpoint what she cares most about spending on while we also identify her ability to pay her bills on her own. We look at her whole financial picture.

Many days, she cursed us, the heavens, her former advisor and her ex – and in the end enjoys a level of confidence she says she’s never had.

Her health issues are improving. She will not send her son to the expensive college and instead includes him in some of our meetings as we help him get used to the new normal. He says he likes seeing his mom happy and healthy, and he thinks she’s healing.

She paid a big price, though, for too little advice.

Follow AdviceIQ on Twitter at @adviceiq

Bonnie Sewell, CFP, CDFA, AIF, is the principal at American Capital Planning LLC in Leesburg, Va. 

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Yes, you can get a bad financial plan, one that doesn’t cover every facet of your life. Like matching your income and your spending.

Take my client Joanna. At 10:06 a.m. on Feb. 22, 2007, her divorce was finally final. She headed straight for the outlets: Retail therapy was in store and she looked forward to some healing.

The people who love Joanna wanted her happy, healthy and healed. No doubt they also wanted her to be able to pay the bills she racked up in her celebration.

Seven years later, Joanna comes into my office. By this time she’s in her mid-50s with a few health issues and still earns about $65,000 a year, not much more than in 2007. What has changed, she explains to me, is that her accounts are nearing empty and she might have to sell her home so she can send her last son to the kind of expensive college her first three sons enjoyed.

She pushes all her paperwork across the table. I see she hired an advisor from a well-known big firm and took the time to list her expenses on a worksheet I sent to her before our meeting. Looking over her tax returns, spending records and account statements, I clearly see she’s $5,000 underwater every month.

I ask her what plan she worked off to this point, and she says she expected her investments to do better and her money to last longer.

Advisors can come in one of two types: 1) Commission-based, which means they earn money based on your investment and planning choices. 2) Fee-only (like me), which means they work for a flat rate or a percent of your assets and earn nothing extra based on your decisions. Joanna had seen a commission-based advisor

But you also can divide advisors by how well they plan your finances. Her previous one didn’t do a very good job when it came to tracking her spending. A financial plan needs to look at every bit of your life, not just your investments. We lock eyes as she grins in acknowledgement of oops! hanging in the air.

In 2007, Joanna walked away from her 23-year marriage with $960,000 in cash, a paid-for home she thinks is now worth $975,000 and $5,000 in monthly support that ended just before she came to see me.

Joanna says she’s ready to get serious. We have the home appraised – the amount comes in at $725,000, much less of course than she figured. We factored in another 8%, or $58,000 in her case, for costs of selling the home. That left $667,000 as the net Joanna can expect from the sale of her home before taxes – another surprise for her.

She’s tested the idea of earning more. At her age with health issues and her inability to work more hours, employers showed little willingness to hire her. Reviewing her expenses, she agrees she can cut back on some items but remains worried about her son waiting to go to that expensive college.

I get paid to be straight with clients, and they are allowed to hate my answers.

For Joanna, we first projected conditions of her life going forward if she makes no changes. We thought who might provide shelter for her and her son before the end of the year if she decided to make no adjustments to her money situation (a short list). Then we modeled her life with very sharp and immediate changes.

She chose immediate – and substantial – pain over certain destitution. We sold the home and she banked $600,000 from the sale, paid her credit card off and started renting a nearby townhome to lower her expenses.

She takes about $2,000 each month from her accounts to supplement the $5,000 she earns. We work to pinpoint what she cares most about spending on while we also identify her ability to pay her bills on her own. We look at her whole financial picture.

Many days, she cursed us, the heavens, her former advisor and her ex – and in the end enjoys a level of confidence she says she’s never had.

Her health issues are improving. She will not send her son to the expensive college and instead includes him in some of our meetings as we help him get used to the new normal. He says he likes seeing his mom happy and healthy, and he thinks she’s healing.

She paid a big price, though, for too little advice.

Follow AdviceIQ on Twitter at @adviceiq

Bonnie Sewell, CFP, CDFA, AIF, is the principal at American Capital Planning LLC in Leesburg, Va. 

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.

 

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Cherry Bars http://dairylandpeach.com/2015/07/cherry-bars/ http://dairylandpeach.com/2015/07/cherry-bars/#comments Mon, 27 Jul 2015 14:25:35 +0000 http://dairylandpeach.com/?p=22072 2 c. flour
1-1/2 tsp. baking powder
1/2 tsp. salt
1/2 c. packed brown sugar
1/2 c. granulated sugar
2 eggs
1/2 c. butter
1 tsp. vanilla
3/4 c. milk
1 c. chocolate chips
1 c. nuts
1 – 8 oz. jar of cherries, also use juice

Mix all ingredients and bake at 325° from 35 to 45 minutes. May frost or leave plain.

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Treasure Chest Bars http://dairylandpeach.com/2015/07/treasure-chest-bars/ http://dairylandpeach.com/2015/07/treasure-chest-bars/#comments Mon, 27 Jul 2015 14:24:09 +0000 http://dairylandpeach.com/?p=22069 Sift together:
2 c. sifted flour
1-1/2 tsp. baking powder
1/2 tsp salt
Set aside.
Cream thoroughly:
1/2 c. brown sugar
1/2 c. white sugar
1/2 c. shortening

Blend in two unbeaten eggs and 1 tsp. vanilla, beat until fluffy. Add dry ingredients alternately with 3/4 c. milk. Stir in one cup well drained maraschino cherries cut in half and one large (4 1/2 oz.) Hershey milk chocolate bar, cut up. Turn in 15-inch by 10-inch by 1-inch pan, well greased and lightly floured. Bake at 325° for 25 to 30 minutes. Frost with a powdered sugar glaze as soon as the bars are taken out of the oven.

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