What is socially responsible investing?

This blog is courtesy of Jennifer Calandra of Turning Point Wealth Advisors.

The demand for socially responsible investing has grown 33 percent since 2014, signaling increasing investor interest in making a positive difference in the world. Is this a passing fad or an investment factor worth considering?

SRI and ESG
Sustainable, responsible and impact investing (SRI) focuses on environmental, social and corporate governance (ESG) criteria in an effort to generate competitive financial returns long-term while also making a positive societal impact. It typically involves pruning your portfolio to exclude companies with political, religious, ethical or moral beliefs that conflict with your own. The idea is to incorporate large-scale intention into your personal financial investment plan.

The Millennial Effect
Gen Y investors seem to be the driving force behind this trend, with 70 percent citing charitable causes as a key concern in business transactions. But even if the attention is new, the practice of socially responsible investing is not. Quakers in the 1700s abstained from the slave trade for moral reasons, and investors of the 1990s expressed their displeasure with tobacco companies.

Comparable Performance
As analysts gather and review accumulating data on SRI performance, the main consensus seems to be that there are no significant costs or benefits to adopting this investment practice. There is one caveat, however: Funds designed to exclude “sin” sectors tend to lag in performance. But for morally minded investors who place a premium on the alignment of actions and values, this may be a small price to pay.

While socially responsible investing requires more background research into company business practices, the satisfaction you gain in knowing your principles aren’t being compromised can be well worth the added effort.

 

 

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Fast & Customized! Click Here

DIVORCE 911 collaborated with Jennifer Keaton of 2 Step Divorces for this blog.

We also have a video covering this topic.

Fast, customized, and private divorces are hard to come by. Most of these occur either through negotiations directly, or through attorneys at a mediation. Mediation allows for easier communication among the parties versus phone tag or the back and forth that often occurs. It’s often “speedier” because you move the finish line up by several miles. Instead of waiting for a court decree, you’re pulling that finish line closer to you. Additionally, you have control over what the terms will be and your terms of the divorce are kept private. It is a private setting to get some hard, hard stuff done that is not necessarily going to be pretty. The end result of that mediated settlement will be thoughtful, it will be customized, and (most likely) will be much better than what a court/judge is going to issue.  The judge is going to look at who gets the Ford, who gets the Chevy, but not the details of when those golf clubs need to come out of the trunk, when that title is going to be transferred, when the bills are shut off or who’s responsible for _______ (fill in the blank here)…

Customized, predictable, and really putting that timeline together is something that can be done in mediation whereas with a judge; it’s not his or her problem. Mediation allows you to narrow down all the specifics so that no details are left to chance while also being a fast and customized divorce settlement process.

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Why Do Judges Order Mediation

Why Do Judges Order Mediation

DIVORCE 911 collaborated with Jennifer Keaton of 2 Step Divorces.

We also have a video covering this topic.

Judges in the state of Georgia are actually required to order most parties to attend mediation before they go to trial. So, it’s a mediate now or mediate later situation for most families. It’s a court rule. The other reason is that it works. Most divorces do settle in the state of Georgia. In a divorce, there’s a lot of grey area with all of the different factors that most judges consider. How they determine their outcome is going to be very specific to each judge. Figuring out what that judge is going to do (versus what you would like to see) and have some control over the outcome is important. This is especially true if you have kids. You want to have that customized solution. That’s another reason mediation works and why courts use it. Of course, they also get the benefit of a smaller docket and less work to do when people can resolve their own terms of their divorces.

Hiring an expert in mediation services like what is discussed above is really the better decision. The court is going to order it anyway. It helps narrow down the time you have to spend in court. If you‘ve figured out things such as finances before you go to court everything is that much easier to handle. It allows the parties to have control over the process. There is something to be said for having control and certainty and knowing where the chips are going to fall. There are some things you can get from a mediation that you can’t get in a courthouse because the judges are handcuffed by the terms of the law. They deal with the “What Side” of the divorce. ie…“What Side” of the fence is going to get the car, the furniture, the 2nd home, etc…but how that transpires is completely different.

So having control over how and stepping through a timeline of how the two lives get teased apart into two units can be a pretty big deal particularly when there are kids.

Mediation does afford both parties more control over their futures.      

©2017 This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Don’t Get Burned by FIRE

This blog is courtesy Russ Thornton of Wealthcare for Women.

For those not familiar, there’s a corner of the internet for which FIRE is an acronym.

FIRE stands for “Financially Independent, Retire Early.”

There’s a thriving community around this idea of FIRE which you can find on Reddit here.

While most of my clients are in their 50s and 60s, many (not all) of them eagerly look forward to their retirement.

But here’s the thing . . . are you looking forward to retiring “from” something or retiring “to” something?

In other words, is your job a grind and you’re literally just going through the motions until you have accumulated enough savings or pension credits so you can escape the rat race?

Or do you have big plans for retirement?

Many of my clients plan to travel more in retirement. Or spend a lot more time with their children and grandchildren. Or get more involved in their church or community. Or volunteer. Or learn. Or work in a part-time role that provides some degree of fun or fulfillment.

Or, a seldom discussed third option is to find work you love, where you can make some kind of impact in the lives of a few or the lives of many while also earning some level of income.

You’ve probably heard the saying, “Choose a job you love, and you’ll never have to work a day in your life.”

Now please don’t confuse this concept with the “follow your passion” advice that is often thrown about. It’s typically the shortest path to starving artist status.

Sure there are those who fall into their dream career right out of college or grad school. But these are the exception and not the rule.

And I’m not discounting the hard work that many of you have put in over a decades-long career.

But maybe once you have achieved some degree of financial security and comfort, maybe even financial independence, it creates an opportunity to explore what’s possible.

Let’s say you’re 58 years old and have been working in a corporate position and are currently earning $180,000 a year. Perhaps your plan is to work until 60 or 62 or 65 and just grind it out until you limp across the career finish line.

But what about retiring in the next 12 to 18 months and finding work, or creating your own career or company, and working full- or part-time for the next 10 to 15 years?

I get it. Maybe you’re tired and just want to relax. No more meetings. No more company bureaucracy.

But how long do you need or want to relax? A few weeks? A few months?

Then what?

I have plenty of clients who’ve transitioned beautifully into retirement and often make comments like “I’m not sure how I ever found time to go to work.”

But my concern is for those of you who might reach retirement and live it up for a few weeks or months, and then ask yourself, “Is this all there is?”

If you explore the Reddit link above, you’ll see some folks honest enough to share their own experience that once they’ve achieved their FIRE goal that they’re not sure it’s the goal they really wanted.

Here’s an example from a recent Ramit Sethi article on this very topic :

Now what? I’m mid 30s, very frugal, unmarried, no kids, virtually no hobbies, high salary, low expenses, work in finance/tech, and can [retire] whenever.… I thought when I got to this point I’d be happier, more relaxed, but it’s yet to happen.

Reading the Ramit Sethi article and seeing the quote above is what prompted me to write the article you’re reading.

Many of my clients are very happy and living their lives on their terms, whether they’re still working or retired.

And whether you’re in your 20s or 30s or in your 40s, 50s, or 60s, be sure that the goal you’re working toward, whether early retirement or something else, is truly the goal you want to achieve.

In fact, I suggest you go through some exercises and imagine what your typical day will be like once you retire or reach a net worth of $3 million or whatever your goal is.

  • What time will you get out of bed?
  • What will you eat?
  • What will you do?
  • Who will you spend time with?
  • Where will you live?
  • How often will you travel?
  • Where will you travel?
  • Will you work at all?
  • And the list goes on . . .

I’ve found this to be a helpful and revealing exercise, and perhaps it can help you make sure you’re pursuing the right goal for you and prevent you from being burned by FIRE.

 

 

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Financial Sleight of Hand

Financial Sleight of Hand

This blog is courtesy of Russ Thornton of Wealthcare for Women.

Sleight of hand is commonly associated with magic, especially card tricks.

Common definitions of “sleight of hand” describe it as being primarily used for entertainment or deception.

And based on my 24 years serving as a personal financial advisor, I believe many advisors are performing financial sleight of hand and either intentionally or, more likely, unintentionally attempting to deceive rather than entertain.

For example, I often encounter client portfolios with dozens of tax-free municipal bonds in them. You would think the advisor and their client are tax sensitive and want to avoid unnecessary tax liabilities.

But in the same client portfolio, I’ll see a ridiculous amount of transaction activity in their equity allocation (comprised of stocks and/or funds) that’s generating a ton of unnecessary tax liabilities due to short- and long-term realized gains.

Or let’s say you RSVP to one of those “financial education” dinners you’re always getting invited to.

You sit down to a plate of grilled chicken, green beans, and mashed taters, complimented by a glass of iced tea and a fire and brimstone presentation deliberately designed to scare the living hell out of you. The market’s going to crash. The economy’s days are numbered. The dollar is going to hell.

And all this is going to happen in the next few years. When you’d planned to retire.

But never fear, these same soothsayers of doom and destruction have the answer: equity indexed annuities.

You’ve probably heard of these things. They promise to give you the upside of the stock market but protect against any losses.

Interestingly, these annuities aren’t technically registered as investment securities, so it can be quite the wild goose chase trying to get all the details and read the fine print.

I suspect many of the people selling these things haven’t even read the fine print. But I’m sure they are definitely aware of the 8-10% sales commissions they get if they sell one of these to you.

But back to the financial sleight of hand . . .

If you weren’t already worried about your financial future, that chicken dinner certainly put you over the edge. And while these equity indexed annuities sound like the perfect solution, that hard-to-find fine print is important.

For instance, your money is typically locked up in these annuities for at least 6-8 years. Sometimes 10 or more.

They’re expensive. With the cost of insurance and everything else, the internal fees can and often will exceed 2.5% per year.

The way these contracts “credit” your market participation doesn’t include dividends. And dividends have historically played a significant role in the return available from the investment markets.

And your market upside is “capped.” This means you can participate in the market upside to a fixed ceiling each year. If your cap is 12%, for example, and the market goes up more than 12% in a year, you forfeit any return above 12%.

Again, I suspect many of these annuity sales people don’t even understand these things themselves, so while they may not intentionally be deceiving you, it’s still your money on the line.

How about those “let’s just be conservative” assumptions in your financial plan?

While you certainly don’t want to be unnecessarily aggressive, being too conservative can come at a cost. Both to your money and your lifestyle.

Too conservative financial planning could mean you’re working longer and deferring retirement longer than you need to.

You might be taking more investment risk than you need to.

You might be saving more money than you need to.

You might be planning to spend less in retirement or on other goals than you could actually afford.

If you’re going to err in any direction, it’s probably best to err on the side of conservatism, but not at the cost of making the most of your one shot at life.

I can think of at least 2 or 3 other examples of financial sleight of hand. Maybe you can too.

Just remember when it comes to your money, you shouldn’t be looking to be entertained, and I know you’re not looking to be deceived. But it happens, and I see it all too often, especially with a lot of the women I work with. Here’s one of the worst examples.

Many advisors use complexity as a way to justify their existence and their fees. But simple beats complexity any day.

And the more simple the solution, the less chance that you’ll be an unwitting victim of financial sleight of hand.

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Single Income Lifestyle

Single Income Lifestyle

DIVORCE 911 collaborated with Howard Cattie of Career Oyster.

Divorce 911 consulted with Howard Cattie of Career Oyster for this blog post.
When you have a divorce, you are now faced with a single income lifestyle. This
is the most common issue facing many spouses. The problem is, in a two income
family you have a lot of shared expenses that get covered. Now all of sudden
there are two separate lifestyles with two separate incomes/budgets. If you
weren’t working, you may have to reenter the workforce.

In today’s environment that’s more than a little bit challenging. You need the
confidence, you need the strategy, you need the tactics and the techniques of an
effective resume, proper interviewing, etc… to compete with the existing job market
candidates.

If you are working, it dawns on you that you need to make more money or have a
better long term vision and career. If that’s the case, now you are underemployed
relative to your single family needs. You should evaluate skills now! Maybe you
should consider some of the volunteer things you’ve done, maybe look at some
other experiences you’ve had and try to put yourself on a better track by upping
your search for a higher level position. That’s a career change and a transition.

It also requires a little forward thinking in your resume. Not backward thinking,
forward thinking! This requires you to go to a hidden market then reach the right
decision maker so that you can sell yourself for the new opportunity. More
importantly, you will need the confidence in yourself to do just that.
These are the things you should do to increase your income for your future
income lifestyle strategy. This is a new chapter in your life, why not really make
the best out of it? Talk to a career coach that will provide you with a resume that
is forward thinking. It will allow you to make more money for the current
circumstances that you have.

Remember! In a divorce, your income has now been cut in half and your
expenses have now doubled!

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the
appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental
health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

I Escaped Captivity in 2006

This blog is courtesy of Russ Thornton of Wealthcare for Women.

 

As many of you know, I resigned from a large, well known Wall Street brokerage firm in 2006.

I had a positive experience at this firm and have nothing disparaging to say about them.

However, I do want to touch on an aspect of working for a large brokerage firm.

I was a captive.

Not in the sense that I was hindered from serving my clients or living my life outside of the office, but in the sense that I was a captive “agent” of that firm.

Despite my title of financial advisor at the time, most people considered me a stock broker, or “broker” for short.

However, this isn’t entirely accurate.

Yes, I could access and utilize thousands of investments and investment products while serving my clients, but the thousands of investments and investment products didn’t represent ALL the available investments and investment products.

For instance, I couldn’t recommend a stock unless our firm had an analyst actively researching and following the stock. And thankfully, I got out of the stock recommending business long before 2006.

If I wanted to recommend many no-load mutual funds, including Vanguard, there was a time earlier in my career where these weren’t available at all. Later, many of these became available through a fee-based brokerage or wrap-fee mutual fund accounts.

Let’s look at it from another perspective.

If you own a car or a home, you have to have insurance coverage. Is your insurance coverage sold by a “captive” agent or a broker?

Captive agents can typically only sell insurance policies from the company that employs them, while brokers can shop around among different insurance underwriters and access different policies from different companies.

I always recommend that you utilize the services of a broker when it comes to your insurance coverage whether it’s on your home, your car, your life or your long-term care.

Otherwise, by using a captive agent, you’re limiting your choice, both in terms of coverage and in terms of price.

I think the same concept holds true when you’re dealing with a financial advisor.

Now let me be clear, your financial advisor is a person, and a person can be trustworthy and put your interests first no matter where they work or whether or not they’re “captive.”

However, in the absence of a long-standing, trusted advisor relationship, I think it would be in your best interests to seek advice from an independent financial advisor.

There was a story a few months back covering the decision by Morgan Stanley to no longer offer Vanguard funds to its clients. Make of that what you will, but it highlights how some advisors and their clients are subject to the decisions of the organization despite what may or may not be in the best interests of that organization’s clients.

And if you want to take things a step further, not only do you want to establish a relationship with an independent advisor, but you may also want to be sure you’re working with a financial advisor who is a fiduciary.

But even then, all financial advisors who are fiduciaries are not the same.

Some advisors serve their clients as fiduciaries at all times, while other dually-registered advisors serve either as a fiduciary or not depending on whether they’re working with you on a brokerage account or a managed account.

And ultimately the responsibility falls to you to understand these distinctions among advisors.

Most consumers believe all advisors must put their clients’ interests first all the time. Sadly, this isn’t the case.

Again, a trusted relationship transcends all this terminology, but these are some important considerations especially when you consider the importance and potential impact a financial advisor can have on your life.

I’m happy to have “escaped” captivity back in 2006 when I left the large Wall Street firm. While I had a good experience there and met a lot of great folks, I’m happy to now be both independent and serving my clients as a fiduciary at all times so I can always put my clients’ interests first and have access to the full universe of solutions available.

At a large firm, the clients’ interests are often competing with those of employees and shareholders.

With an independent advisor serving as a fiduciary, there are few, if any, instances where your interests are competing with those of shareholders or employees.

So whether it’s your home or auto insurance or your financial planning, I suggest you consider the benefits of working with an independent financial advisor working as a fiduciary who is only captive to your best interests.

 

 

©2016 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.