FINANCIAL FOCUS – How Can You Share Your Financial “Abundance” With Your Family?

Thanksgiving is almost here. Ideally, this day should be about more than football and the imminent arrival of Black Friday mega-sales. After all, the spirit of the holiday invites us to be grateful for what we have and for the presence of our loved ones.

But it’s important to look beyond just one day in November if you want your family to take part in your “abundance.” If you want to ensure your financial resources eventually are shared in the way you envision, you will need to follow a detailed action plan, including these steps:

  • Identify your assets. If you haven’t done so already, it’s a good idea to take an inventory of all your financial assets – your retirement accounts (401(k) and IRA), other investments, life insurance, real estate, collectibles and other items. Once you know exactly what you have, you can determine how you would like these assets distributed among your loved ones.
  • Get professional help. To ensure your assets go to the right people, you will need to create some legal documents, such as a will and a living trust. The depth and complexity of these instruments will depend a great deal on your individual circumstances, but in any case, you certainly will need to consult with a legal professional because estate planning is not a “do-it-yourself” endeavor. You may also need to work with a tax professional and your financial advisor, as taxes and investments are key components of the legacy you hope to leave.
  • Protect your financial independence. If your own financial resources were to become endangered, you clearly would have less to share with your loved ones, and if your financial independence were jeopardized, the result might be even worse – your adult children might be forced to use their own resources to help support you. Consequently, you will need to protect yourself, and your financial assets, in several ways. For one thing, you may want to work with your legal professional to create a power of attorney, which would enable someone – possibly a grown child – to make financial decisions for you, should you become incapacitated. Also, you may want to guard yourself against the devastating costs of long-term care, such as an extended nursing home stay. Medicare typically pays very little of these expenses, but a financial advisor may be able to suggest techniques or products that can help.
  • Communicate your wishes. Once you have all your plans in place, you’ll want to communicate them to your loved ones. By doing so, you’ll be sparing your loved ones from unpleasant surprises when it’s time to settle your estate. And, second, by making your plans and wishes known to your family well in advance of when any action needs to be taken, you’ll prepare your loved ones for the roles you wish them to assume, such as taking on power of attorney, serving as executor of your estate, and so on. And you’ll also want to make sure your family is acquainted with the legal, tax and financial professionals you’ve chosen to help you with your estate plans.

Thanksgiving comes just once a year. Taking the steps described here can help ensure your family will share in your financial abundance as you intended.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

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5 Tips to Recapture Your Wealth

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Did you know that many American’s transfer away between $2,000,000 and $5,000,000 of their wealth over a lifetime.  Yes, millions according to U.S. News and World Report.

Could you be one of them?

The truth is we will all transfer away wealth but we all have the opportunity to recapture a good chunk of that if we know the rules of the game.

After 20 years of working in almost every capacity in the financial industry, I have learned one important thing:  the rules of the game are not taught to us.

Why?  I will let you draw your own conclusions, but hope these points will help you make better financial decisions and allow you to recapture some of your hard-earned money.

First, what are the major wealth transfers in someone’s financial life:  taxes, fees paid to financial firms and the cost educating college students.

Here are few tips that could help you recapture that money:

  1. If you are invested in mutual funds, STOP until you know the costs. According to this benchmark Forbes article: The Real Costs of Owning a Mutual Fund, an average fund can have up to 2.5% – 3.25% of internal costs. Compounded over time can equal a lot of money. That is why, according to a Dalbar study, the average equity mutual fund investor underperformed the S&P 500 by a margin of 3.66% in 2015.  If you factor in buying and selling at the wrong times it should be no surprise the average retail investor underperforms the market by over 6%.
  2. Your typical stockbroker is not your friend but your fiduciary always works in your best interest. Most people do not know there are two different standards with which advisors do business.  This funny video will explain the difference in less than 30 seconds.  Afterwards, ask your advisor.
  3. Colleges act like businesses and there is a practice in the industry known as enrollment management that should change the way you think about planning your student’s education. With the average cost ranging from $24,385 for public school to $73,286 for elite colleges annually, a student taking longer than four years to graduate (and the average student loan debt per student of $37,0000) must focus more on SAVING ON THE COST of college than saving for college.  The college planning process has changed, and families need a new approach to recapture and lower their costs.  If you have two kids you very well could pay $150,000 to $250,000 for their education hoping they graduate in four years.  See if this new approach to college planning makes sense to you:  Know before you go, a new approach to college planning.
  4. Is your CPA a tax preparer or a tax planner? Think about it, most good CPAs are focused on saving you money today so they look good and will get your repeat business next year. How to tell if your CPA is a good one from this Forbes article: Red flags, how to know your CPA is working for you or not.
  5. Paying an advisor 1% or more to manage your money is a loser’s game. Most families don’t know all of the services an advisor should be providing and what is the true value.  According to this Vanguard study, a great advisor will help you potentially net about 3% in additional returns.  Now that is a deal, but so often most firms do not provide the additional services a family deserves.

Hopefully, you have found something in this post that will change your financial life so you can spend and enjoy more of your money!

If you want to learn more, please feel free to schedule a complimentary 30-minute call to discuss your situation.  Schedule Your Call.

Article written by STUART CANZERI
You can reach Stuart at (404) 477-1770 or canzeri@peachtreefg.com

STUART CANZERI