Here is an award I just won for Financial work I do for my clients.

I just won an award for the work I do for my individual and small business clients. This is actually the third year in a row that I have  won this award.  It is "The Best OF Westerville 2013 Award For The Financial Planning Category"

If you designed the perfect financial product would it look like this?

Many clients  tell me they  are looking for several contradictory objectives in an IDEAL financial product!
First, they  want to know their principal is safe!
Second, they want a  reasonable rate of return on their money!
Third, they want liquidity!

If a product could do all of these thing would you agree that this is a nearly perfect financial product?
 A bank can give you the first and third items from the list but will not  deliver the second. The  market can  give you the second and the third but cannot guarantee the first.
Its now possible to get a financial product that offers 100% liquidity from day one. Even though it offers great liquidity it is designed and optimized for long term growth or even  for legacy purposes.
In addition it offers a reasonable rate of return in some configurations or the upside potential for double digit annual returns of over 12% in the best years and a mid single digit (4-7%) returns in an average year. It delivers all of this potential with outstanding safety and protection of principal.
That's the good news.

Now for the bad news. Not everyone can qualify to purchase this type of product. Minimum $ limits also apply. Contact us if interested in learning if this is right for you!

New financial products available

Everyone knows  that interest  rates have been  extremely low for over 3-4 years.  It's part of  the the Federal Reserve Banks plan to "help the  economy". Even with the  slight  increase in interest rate in the past week or so it is still almost impossible to  earn a decent yet safe rate of  return on  our
money.

Did  you  know  that it is possible to obtain a 6% guaranteed interest rate on a 96 month financial product. There are minimum purchase amounts of $40,000 - 60,000 with a maximumum of approximately $250,000. These are not liquid but you do  receive monthly payments including but some return of principal and  interest. Payments are level  throughout the 8 year term. The interest rate is guaranteed at time of issue and payment of the contract. There is also a high  degree of  safety with this type of contract. This is what I would consider a Safe Money product with no stock market risk. They are compatible  with a ROTH or Traditional IRA or can be used with non qualified money as well.

I think it is good  to  know that a reasonable Bank alternative is available today.  Why would anyone  want  to put that amount of money in a bank anyway?

"The Rule of 100" and Preserving and Growing Your Assets

Some of you  know about "The Rule of 100" but everyone should know it and understand how it works. Simply put this rule help you determine a smart allocation  strategy that helps protect your assets from excessive market risk. Protection from market risk is critical  as we age in order to  preserve our assets  for the second stage of our lives.  The  first stage of Financial Life is Asset Growth and Accumulation . This is followed  by the Asset Distribution Stage or Retirement Stage of Financial  Life. As we get older and unfortunately we all do, we need to transition from maximizing accumulation to the preservation  and distribution of our assets. Different types of professional specialize in helping plan and implement these different strategies.  Some people even think of this  as a three stage process. They group them into, Accumulation, Transition and Distribution or Retirement.

 The Risk we can safely tolerate needs to  drop  if we hope to properly preserve our assets for the retirement years.  A five year recession is not an absolute disaster when we are 35 and  have 30 or more years to make up for the downturns that WILL Happen. Notice I  said WILL and not May happen. On average we have 2-3 bad years every decade. We have 3-5 average years and 2-3 really good years. This trend is clearly shown in economic theory and actual history going back 100 years.

Not considering this in your financial plan is one of the major reasons people run out of assets in retirement.  The second  major reason people run out of money is simply not saving enough in the  earning years.  The best solution is to  learn and  benefit from THE RULE OF 100. The  rule states that  you subtract your current age from 100 and the answer represents the maximum percentage of your assets that should  be exposed to  market risk. As an  example a 55 year old should have no more than 45% of their assets exposed to market  risk. Some people have less market risk tolerance  and should have less exposure. As we age the formula means that we need to  further adjust our risk % allocation over  time. Using SAFE Money strategies gives us the opportunity to include Safe Money Products and still have up side potential growth that can  beat inflation  and allow us to keep up with the rising  Consumer Price Index (CPI).  Unfortunately a Bank doesn't allow  one to keep up with the rate of inflation. It has been 20 years or more  since banks have paid a decent rate of return to their depositors.  This means that you  have less buying power at the end of December than  you  had on January 1st. There are other forms of Safe Money Assets that  can  protect and grow your assets and still produce a reasonable Rate of Return.

Buy Tem and Invest the Difference! Is this sound advice?

Many  readers listen or watch Suze Orman or Dave Ramsey in their  finance shows.  Don't  get me wrong.  I  like  them  both. However  there is one  area where they always  give  bad  advice!  That is  when  they  tell  clients  to only buy Term Insurance and  Invest  the  savings.   I  do  sell Term  insurance  but I generally use it as a supplement  to  a Cash Value Life Insurance policy that will always be there  when the client or their  family needs it.  There  are  several problems  with Dave and Suze's logic.
 First,
what  happens  if  you  need  to provide insurance  for  several years past the original term?  One of  several  things happens, your policy  expires with you  receiving  no benefit whatsoever, or if the policy permits you  to  keep paying, the premium jumps as much as 10-15 fold for  each additional year with an insurance need, or the policy  expires worthless and due to your then current age  and  health you  have become Medically Uninsurable.
 Second,
The problem  relates  to  the  actual  math involved. A recent  article in a professional  publication  demonstrated that the math often does not work out the way they suggest it should. I wont include  the  publication  here but  would gladly  share  the information and the  math with  readers individually. The  real  world  numbers indicate that especially in a low interest rate environment (does this sound at all like  like 2009- 2015) you are potentilly well ahead  by buying  a Cash value Life insurance product. The  author  illustrated  a Whole life  product  but there are some other products that can perform even better.
Third,
This problem  deals  with  the  rate of  return that they project  when they do  their projections. Both of them  talk about  making 7-8% per year on their portfolio.  How  many  readers can  honestly say that they  have  seen a 7-8% rate of return on their market risk assets in the  past 10 years?  Im willing  to  bet its no more thn one in a hundred who have  seen that ten year  return.  IF  you  have then  your 2003  $100,000  would now be worth  $216,000 in 2013.  This assums that  you  added no more money to the  account in that 10 yr period.  If  the average investor did not turn 100K into 216K  then the performance numbers quoted  by Dave and Suze  dont work out!!! You  can  make  that  in a good  year but they fail to  deal  with  the MASSIVE impact of the  down years.  Unfortunately real world investors  suffer in the down  years unless  they  are  using some SAFE MONEY assets in the financial plan.
Fourth,
Its very hard to beat the potential Tax advantages of a properly designed  and properly funded Cash Value  Life Insurance policy. Nothing Beats Tax Free Income!! 

I suggest that often a fiscally  smarter way to  go is  to  combine  several insurance products. At least  they  should consider  a Term  and a Cash Vale policy to minimize premium expense and maximize protection for  their premium dollars.  Of course everyones situation is different and  thats why they  should  consult  with  a licensed insurance professional  to help analyse their  specific needs.

What Happens to Bonds When Interest Rates Rise?

This  weekend an interesting  article appeard in the  Columbus Dispatch in the business  section. It was  titled "Bond-Lovers still buying despite risk, stock highs." In a recent month investors put $32 Billion into Bond  Mutual Funds.  This becomes a potential issue when interest rates are at all time record lows.  Do  you  think that interest rates one, three  or five years from now will be lower  or higher than  they  are  today?  Can they  get much lower?  Can they get much higher?  Is there  upside interest rate risk?  What happens to  existing values when  rates are rising?  Simple economics answers that question.   Existing prices fall when interest rate rise. The article  further states "With Bond prices rising and interest yields at historic lows the risk has picked up significantly"  The article is  worth  reading!

When customers wish to minimize their risks  Safe Money products might be a logical part of a financial portfolio.  Asset diversification is always very important.

Did you know that there are products that can guarantee lifetime income without any market risk?

I'm not telling anyone  to  buy  something or  to  sell  anything.  I'm just sharing  a nice article worth  reading.

OBAMA CARE The Afordable Care Act (ACA)

Not may people know that most of Obama Care enabling legislation didn't deal  with  health care at all. Most of the bill actually dealt  with new and onerous tax increases needed to fund  the bill. Did  you  know  that all  females  have maternity  coverage burried in the  cost of premiums. Thats  a mixed blessing of  course. If a woman is Sexually active, married and in child bearing age.  Its  not necessary to  add the cost of  the  premium for a woman  who isnt  sexually  active  or is beyond  child bearing age. However  courtesy of Obama  its in  there!
 Did  you  know  that  every  real estate  transaction  will  involve a better than 3%  federal  tax on a home sale. We are not  talking  about  a  tax on short or long  term  gains. We are  talking  about  a new massive  tax incurred  even if  you loose money on a home sale. There are dozens and dozens of  these new Taxes, Fines  and  Fees  hidden in the  1000 plus  pages of this legislation.
 That  just  doesn't  seem  right  to me.

What  do  you  think???