Monthly Archives: January 2014

Top 10 Best Value Colleges

A column in Financial Advisor caught my eye.  For those  who have children who plan to go to college, this may be worth reading.

For clients with college bound children, a study by The Princeton Review ranks both public and private colleges and universities to determine the ones that offer the best academics at an affordable cost.

Based on criteria including academics, costs and financial aid, the study also considered the percentage of graduating seniors who borrowed from any loan program and the average debt those students had at graduation.

The following public colleges are the top 10 of 75 , with No. 1 offering the highest value.

No. 10  State University of New York at Binghamton (Binghamton University)

No. 9 Truman State University

No. 8  College of William and Mary

No. 7  University of Florida

No. 6  University of California—Los Angeles

No. 5  University of Michigan—Ann Arbor

No. 4  North Carolina State University

No. 3  University of Virginia

No. 2  New College of Florida

No. 1  The University of North Carolina at Chapel Hill

Whether you agree or disagree with these rankings, the cost of attending college has rocketing into the stratosphere and sending your children to college requires a plan well in advance of their matriculation.  A few things to keep in mind is that in-state tuition is often a fraction of the cost of sending your son or daughter out-of-state.  Setting up a college savings plan is always a good idea since it allows the college funds to grow tax-free. Taking out a college loan has become so popular that today, the college loan debt exceeds a trillion dollars.  However, college loans cannot be discharged through bankruptcy, if the student does not graduate (and many do not) the loan still needs to be paid, and college loan payments often extend for decades after the student has left school.


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In times of market volatility … remain calm.

FIRST TRUST’S Brian Wesbury has some good advice for people who have been wondering about the market volatility so far this year.

After strong gains in 2013, equities have struggled this year.  Thursday and Friday felt a little panicky.  US stocks were down close to 3%, gold was up, and the 10-year Treasury yield fell below 2.75% for the first time since November.  Investors are on edge, short-sellers are a little giddy and we even heard a TV host mention the infamous “Black Swan” again.

It’s hard to tell exactly what triggered the “Risk Off” trade, but last Thursday, even though 15 out of 20 S&P 500 companies beat earnings estimates, weakness in the Chinese purchasing managers’ index set off some selling. So, is this a moment to “run for the hills” or to “pull on your parka and wait it out?”  We opt for the latter.  Right now, there’s a mad rush for a narrative to explain the recent market stumbles.  One is that Chinese weakness hurts commodity exporters.  Another is Federal Reserve “tapering” is shrinking global liquidity, hurting emerging markets.

Still others point to turmoil in foreign currencies in places like Argentina and Turkey.  But we have seen this movie before along with government shut-downs, oil spills and even regional wars.  But the fundamental have not changed, housing is on the rise,  jobs are up despite people leaving the jobs market, oil and gas production is booming and new technology is boosting productivity, growth and profits.  We went to a few stores recently and they were filled with shoppers, parking lots were full and there were long lines to check out.  When large, flat screen, TVs are flying off the shelves, the economy isn’t doing badly.

We may see a full-fledged correction yet, but every bull market has these as part of the pattern.  The problem with trying to time the markets is that without a working crystal ball the timing is almost always wrong; you have to be right about the time to step out and the time to step back in.  It’s at times like this that having an appropriate asset allocation for your risk tolerance and your time horizon shows its true worth.  This is what RIAs do best.   If nothing has fundamentally changed, our outlook remains cautiously optimistic.  We suggest that everyone remain calm.

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Adding to Your Returns Four Ways

There are at least four things you can do to get better returns on your money.

  1. Create an asset allocation program and stick to it.  Don’t chase the market up and don’t sell at the bottom.  If you have created an asset allocation that is right for you, it should be robust enough to take advantage of rising markets and allow you to sleep well at night in declining markets.
  2. Be tax aware.  Don’t buy mutual funds in taxable accounts at the end of the year just before they make their capital gains distributions.  Take tax losses to offset capital gains.
  3. Keep an eye on costs.  Investment firms are increasingly turning to fees for services they once provided for free.  Your investment manager should be aware of the fees you are paying and keep them under control.
  4. Re-balance your portfolio regularly.  It may be tough to sell some of your winners and add to the losers, but it works.  It’s really tough to sell on euphoria and buy on fear, but some of our biggest winners were bought when nobody wanted them and they could be bought for pennies on the dollar.
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Five things you need to do with retirement accounts

The average household is juggling no fewer than eight different retirement savings accounts, according to a recent survey.  Many investors are looking to simplify their lives by consolidating at least some of those accounts.  And nearly three-quarters of them consult with a financial advisor rather than seeking information from their employer, a fund provider or another source.

So what should you do if you have two, three or more retirement accounts?  First you have to keep in mind the rules about rolling or transferring retirement accounts to avoid paying taxes.

  • First, find a financial advisor you can trust, preferably an independent RIA, who can give you unbiased advice and guide you to your goal.  He should be able to create a retirement portfolio that’s designed just for your and will result in growth with the least amount if risk.
  • Second, make sure that assets from the various retirement accounts are transferred from custodian to custodian without passing through your hands to avoid taxes or penalties.
  • Third, make sure that fees are reasonable so that you, rather than the advisor, gets most of the gains.
  • Fourth, be sure that your advisor provides you with a performance review at least once a year so that you know how you are doing.
  • Fifth, remember that once you reach 70 1/2, you have to begin taking money our of your “regular” retirement account.  If you have a Roth retirement account you can delay until you need the income.

For more information, contact Korving & Company.

“An existing relationship, lower fees and good product selection are the three top factors driving IRA rollover decisions for retirees and pre-retirees,” says the website. So, for example, advisors helping a retired client decide what to do with a lifetime’s worth of 401(k) plan assets — scattered over three or four accounts — should probably pick a fund company with which the client has already had a positive experience. Millionaire investors care even more about prior relationships than the less affluent, according to the research. But they’re less swayed by a famous name. Among survey respondents with less than $1 million to invest, 28% said they’d choose a firm with a well-known “retirement brand” when rolling assets over. Among millionaires, only 19% said brand is a priority.

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Future Millionaires Need Help to Make That Milestone

I borrowed the title from an article in Financial Advisor magazine.

Research from Fidelity on the money habits and attitudes of people with an average of $800,000 in investable assets and annual income averaging $150,000 shows that these “millionaires of tomorrow” want to get wealthier. But they’re more focused on managing their debt and controlling their spending than on boosting investment returns. They’re less comfortable with risk than millionaires. And 77% of the almost-millionaires whom Fidelity polled lack a written financial plan.

Maybe you are one of those “millionaires of tomorrow” who are relatively skeptical about the value of financial-advice relationships.  You should know that while about half of you work with an advisor, roughly three-quarters of millionaires do.  I have always advised people that if you want to be rich, do what rich people did to get there.

We recently developed an easy to use analytical tool that uses your age and your current investable assets and calculates how much you need to save each year and the rate of return you will need to achieve your financial goal by the time you retire.  If you want to see what your “magic numbers” are, give us a call at 757-638-5490 or you can reach us via our website. 


Three things you must do as you get older.

There’s a famous saying that I have come to appreciate: “Old age isn’t for sissies.”  There are lots of things that begin to bother us as we age that never did when we were young.  Aches and pains are the most obvious of them.  A lot of us become much too familiar with our doctor’s waiting room.

After a lifetime of storing memories we find that too many things have gotten lost in the pile of “stuff” that we keep in mind.  No one really wants to admit that we’re not as strong or “sharp” as we once were.  So instead of taking care of our own yard or doing our taxes, we hire someone else to do it.

Aging is a sensitive topic.  It can be awkward to tell people that they may want to look for help doing things they have always done on their own.  But it is something that has to be done because it’s just the right thing to do.

I have had this conversation with a number of clients as they age.  Sometimes they even bring up the subject.  One of my best clients, let’s call him Bill, was diagnosed with cancer a year ago.  He went through a series of treatments, but he finally came to the realization that the end was probably near.  I met with Bill and his wife and we had a long, heartfelt conversation.  He and I had worked together for years to manage his portfolio and he made me promise to take care of the family finances after he was gone.   I had already given them a copy of my book “Before I Go” and the workbook that goes along with it.   As a result, after he passed away we did not have to wonder about the family’s assets or what his wife’s income was going to be.

But for many people, the end doesn’t give us as much time as Bill had.  It may be an accident, a sudden heart attack or a stroke.  That’s why it is best to prepare while both husband and wife are still healthy and able to make informed decisions.  What should those preparations include?

  • Make sure your will is up to date.  Check with an estate planning attorney to make sure it is current with your current family situation and the tax laws.
  • Prepare an Advance Medical Directive that will tell your family and physicians what you want done if you become incapacitated.
  • Find someone who can provide quality financial guidance to the surviving widow or children if that is not something that they have the knowledge, time or interest in taking on.

The last one is often over looked, but it is critically important to those you love and would leave behind.  You need to find a person or team who puts your survivors’ interests first.  Someone who knows how to generate the income that retirees need.  Someone who is experienced in retirement planning and estate management.  Someone who you can trust to manage your assets now, and do the same for those you leave behind.

It’s a challenge, and one that you should take care of now because you never know when it will be needed.

Arie Korving is the author of the book “Before I Go” and the “Before I Go Workbook”  and Chairman of Korving & Company, a Registered Investment Advisor in Suffolk, VA.  For help with this and other subjects on estate planning, he can be contacted at 757-638-5490.  To get a copy of his book and workbook, visit or call Korving & Company, 757-638-5490.

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Are Your Financial Goals Achievable? Financial Mapping.

Financial Planning is a term that put a lot of people off. To some it means obsessing about money, to others it implies budgeting, to yet others it may mean paying someone to prepare a 75 page book that takes every contingency into account between now and forever.

But there’s another way of thinking about financial planning.  I call it “Financial Mapping.”

Let’s say you have a goal of retiring at age 65 with $5 million in assets.  You’re 35 and have a good job.  You have put $150,000 away and are putting 10% of your salary into savings.  Can you reach your goal?  Are you saving enough? And how hard will your money have to work to help you get to your financial objective?

This kind of analysis does not require budgeting or telephone sized books to figure out.

It’s like planning a cross country trip for your vacation.  You get out your maps and try to figure out how many miles you need to cover each day to finish your trip within the time you have for vacation.  And every day you mark your progress.  There may be side trips so each day you may not go as far as you planned.  You may have to adjust your speed, the hours you drive and the sights you see.  You may even decide that you can’t reach your goal and settle for something a little closer before you head home.

A simple financial plan can be thought of as that road map.  You know where you start, you set a specific goal, prepare an estimate of your savings and your expected rate of return and see if that will allow you to reach your goal.  And every year your update your net worth, just like marking where you are on a road map.  If your financial map tells you that you are on track, you’re good for another year.  If you’re above or below the track that gets you to your goal, you can increase or decrease your savings rate or change your investment strategy.  Or you can adjust your goal.  And it’s all on a single sheet of paper.

If you’re interested in creating your own financial map, get in touch with us.  We’ll be happy to help.

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