Tag Archives: Lifestyle

A good Registered Investment Advisor is a “Life Coach.”

more photos the 2016 nfl draft in pictures more nfl best of beast mode ...

People who are not familiar with Registered Investment Advisors (RIAs) too often view them as stock brokers.  They are not; they are held to a higher standard and are focused on the client, not the money.  RIAs are trusted advisors who put their clients ahead of themselves.    They are fiduciaries that are skilled in the art making good financial decisions.

Younger professionals who are building careers would do well to find an RIA as their financial guru, a “Life Coach.”  It takes time, experience and a high level of expertise to manage money well.  The young lack that expertise but have the biggest advantage of all: time.  They are in a perfect position to build wealth with the least amount of effort if they can lean on experts who can show them how to navigate the risky ocean of investing.  Just as important, they need a wise guide who can advise them on managing their income.  Too many people, even those with six figure salaries, live paycheck to paycheck.  Knowing what to spend and how to save is the role of the advisor.

This is very important for the independent professional – the doctor or lawyer.  Focused on building a practice, they need someone to advise them on managing their money wisely.

For the business owner, the entrepreneur, it’s even more important.  There is no career track and the challenge of building a business often results in poor money management.  Excessive debt can lead to bankruptcy, a common result in many industries that depend on debt financing.  A good advisor can help the business owner create a personal portfolio that’s independent of his business.  At the same time he can advise the owner the best way of financing his growth.

Once the business is established the owner needs guidance setting up retirement and benefit plans for himself and his employees.  This all part of the RIA’s skill set. And finally, as the business matures and the owner starts thinking of retirement, the advisor provides the guidance to transition the individual and his family to life beyond work.

That’s the point at which the coach gets the pleasure of knowing he’s done a good job as part of a winning team.

Tagged , , ,

Ex-NFL player, Mega Millions winner press $7.8M claims against Morgan Stanley

What do sports super-stars and lottery winners have in common?  Both are in financial danger.

That’s a strange thing to say about people who are often multi-millionaires.

The problem is that neither the talented athlete nor the lottery winner is usually any good at managing money.  That’s a harsh judgment to make but too many star athletes and lottery winners end up broke.  They end up broke for many of the same reasons:

  • They believe that the financial windfall they have received is inexhaustible.
  • They attract too many groupies and hangers-on who are after their money.
  • They spend the money they have received instead of investing it for their old age.
  • The money they do invest is often lost because of poor, or dishonest, advice.

From Financial Planning magazine:

Former NFL cornerback Asante Samuel and Mega Millions lottery winner James Groves are jointly seeking $7.8 million in damages against Morgan Stanley related to investment recommendations made by a now-barred broker, according to regulatory filings….

Samuel and Groves filed their claims in FINRA arbitration in July, according to a copy of Parthemer’s CRD. From 2003 to 2013, Samuel played for several NFL teams, including the New England Patriots and Philadelphia Eagles. Groves won $168 million in the Mega Millions lottery in 2009.

In this case, Asante Samuel was persuaded to buy a night club, probably hoping to capitalize on his fame as a football player.  It’s fairly common for professional athletes to open restaurants or night clubs.  The problem is that even for professional restauranteurs, the failure rate is shockingly high, and athletes don’t have the training or time to run these businesses.

The story of many lottery winners is one example of ruined lives after another.   Bud Post’s story is not unusual.

When William “Bud” Post won $16.2 million in a 1988 lottery, one of the first things he did was try to please his family, according to this Bankrate article.

Unfortunately, his kin was of the unfriendly sort. Post’s brother hired a hit man to kill him, hoping to inherit some money. Other family members persuaded him to invest in two businesses that ultimately failed. Post’s ex-girlfriend sued him for some of the winnings. Post himself was thrown in jail for firing a gun at a bill collector.

Over time, Post accumulated so much debt that he had to declare bankruptcy. He now relies on Social Security for income. “Lotteries don’t mean (anything) to me,” he is quoted as saying—after he lost all his money.

Is there no hope for professional athletes and lottery winners?  Yes, but it requires them to know their limitations, which may include hiring professional help before they begin spending their new-found wealth.

If you’re a sports star or lottery winner who would like to retire rich, and you want to have someone to talk to about the way you can fend off the vultures that your wealth and fame attract, contact us.  You don’t want to spend your time in court trying to get back what you lost.

Tagged , , ,

Getting Financial Help

When people have financial questions, what do they look for?  According to a recent survey most people are looking for someone with experience.  We want to take advice from people who are familiar with the issues we face and know what to do about them.  We all know people with experience, but financial problems, like medical problems, are personal.  Most people we know would rather not go into detail about their personal finances with family or friends.  They are more comfortable sitting down with a financial professional to discuss their finances, their debts, their financial concerns, and their financial goals in both the short and long term. Professionals will provide advice without being judgmental and are required by their code of ethics to keep your information confidential.

Once people find someone who has a track record of giving good, professional advice, they want personalized advice and “holistic” planning.

No two people have exactly the same problems.  A good financial advisor listens attentively to learn the goals, the concerns and personal history of the people who come to him for advice.

People have specific issues and questions.  For example: a couple, aged 39, is seeking advice about their path to retirement.  They give their financial advisor a laundry list of their assets, their investments, their savings rate, their debts, and the ages of their children and ask if they should be doing something different or are they on the right path.  That’s a very specific question and the advisor’s response is going to be personalized for them.

The plan that the advisor comes up with is going to involve much more than money.  It’s going to take their personal characteristics into account.  This includes personal experience with investing, their risk tolerance, and their closely held beliefs and ethical values.  This is what is referred to as “holistic” planning; taking personal characteristics into consideration.

There is a fairly big difference in the advice sought by

  • “Millennials” (those born after 1980 and the first generation to come of age in the current century),
  • “Generation X” (the children of the Baby Boomers) and the
  • “Baby Boomers” (children of the soldiers returning from World War 2)

“Millenials” say that among their top three concerns are saving for a large expense such as a car or a wedding.  Too many are saddled by debt acquired to pay for higher education and are finding that their degrees are not necessarily an entry into high paying professional jobs.  Their next largest concerns are saving for their kids’ education and putting money aside for retirement.

“Generation X” is primarily focused on saving for retirement.  They are married, own their own home and may have children in college.  Concerns two and three are tax reduction and paying for their children’s education.

“Baby Boomers” have finally reached retirement age.  More than a quarter million turn 65 each month.  As a group they are a large and wealthy generation, but a vast number have not saved enough for a comfortable retirement.  Many are forced to continue to work to supplement Social Security income.  Their number one concern is the cost of health care.  Concerns two and three are protecting their assets and having enough income for retirement.  The three concerns for Baby Boomers are inter-connected.  For many Boomers, Medicare helps them with the costs associated with most medical issues.  However, as people live longer, there comes a time when they are unable to care for themselves and live independently.  Long-term-care insurance was once believed to be the answer but insurance companies found that costs were much greater than anticipated.  The result is that many insurers have stopped offering the policies and those remaining have hiked premiums beyond the ability of many to pay.  The cost of long term care is so high that many Boomers are afraid that their savings will soon be exhausted if they are forced into assisted living facilities or nursing homes.

Each generation has its own problems and at a time when the world has gotten much more complicated.  Getting experienced, personalized and holistic financial advice is more important than ever.

Tagged , , , , , , , , ,

Buy a Paper Mill Heiress’s Greenwich Mansion for $5.5 Million

The seven-bedroom house sits on 10 acres.

 

Having recently inherited her mother’s house in the same community, Zelinsky is selling her old home for $5.495 million. The buyer of the 6,100-square-foot house (that measurement doesn’t include a partially finished basement) will benefit from Zelinsky’s family’s connection to the property and its surroundings.

 

Just in case you wanted to know what you could get if you had the money.  The grounds need some work.

Tagged , , ,

The Retirement Challenge

For most people, retiring means the end of a paycheck, but not the end of an active life.  The typical retiree spends 20 to 30 years in retirement and running out of money is their biggest fear.  When you retire, how will your lifestyle be affected?  Here are some of the things to take into consideration.

Retirement age – Modern retirees face lots of choices that their parents did not have.  There is no longer a mandatory retirement age, so the question “when should I retire” gets more complicated.

Social Security – The age at which you apply for Social Security benefits has a big effect on your retirement income.  Apply early and you reduce your monthly benefits by 25% – 30%, depending on your age.  Wait until you’re 70 and you increase your monthly benefit by up to 32% (8% per year), depending on your age.  If you are married, the decisions get even more complicated.

Pension – If you are entitled to a pension, the amounts you receive usually depend on your length of service.  The formula used to calculate the pension benefit can get quite complicated.  Those who work for employers whose finances are questionable may want to consider whether they will get the benefits they are promised.  If you are married, you will need to decide how much of your pension will go to your spouse if you die first.

Second career – More and more people go back to work after retirement.  Many don’t want to stop working, but do something different.  Others use their skills to become consultants, or turn a hobby into a business.  A second career makes a big difference in your retirement lifestyle and how much income you will have in retirement.

Investment accounts – These are the funds you have saved for retirement: in IRAs, 401(k)s, 403(b)s, 457s, and individual accounts.  These funds are under your control.  Most retirees use them to supplement Social Security and pension income.  They are the key to determining how well people live in retirement.

Combine these issue with the effects of inflation, market volatility, investment returns and health care costs and it becomes apparent that retirees need to plan.  If your retirement is years away, a plan allows you to make mid-course corrections.  If you’re already retired a plan will allow you to sleep soundly, knowing that a lot of the uncertainty has been removed.

Tagged , ,

Will Retiring Force Cutbacks in Your Lifestyle?

For most people, retiring means the end of a paycheck.  When you retire, how will your lifestyle be affected?  If you don’t know the answer to that, shouldn’t you find out before it’s too late?  There are so many things to take into consideration.

Retirement age – Modern retirees face lots of choices that their parents did not have.  There is no longer a mandatory retirement age, so the question “when should I retire” gets more complicated.

Social Security – The age at which you apply for Social Security benefits has a big effect on your retirement income.  Apply early and you reduce your monthly benefits by 25% – 30%, depending on your age.  Wait until you’re 70 and you increase your monthly benefit by up to 32% (8% per year), depending on your age.  If you are married, the decisions get even more complicated.

Pension – If you are entitled to a pension, the amounts you receive usually depend on your length of service.  The formula used to calculate the pension benefit can get quite complicated.  Those who work for employers whose finances are questionable may want to consider whether they will get the benefits they are promised.  If you are married, you will need to decide how much of your pension will go to your spouse if you die first.

Second career – More and more people go back to work after retirement.  Quite a few people don’t want to stop working, but do something different.  Others use their skills to become consultants, or turn a hobby into a business.  A second career makes a big difference in your retirement lifestyle and how much income you will have in retirement.

Investment accounts – These are the funds you have saved for retirement: in IRAs, 401(k)s, 403(b)s, 457s, and individual accounts.  These funds are under your control.  Most retirees use them to supplement Social Security and pension income.  They are the key to determining how well people live in retirement.

To find out whether you will be forced to cut back after you retire, you need a plan that allows you to take all these factors into consideration.  A plan allows you to make mid-course corrections before it’s too late.

If you have questions, contact us.

Tagged , , , , , , ,

Living like the Earls of Downton Abbey

Want to live in grand country house in the English country side?

Some of these homes have been divided in apartments.  Here’s Apley Park.

 

 

Mr. Wentworth’s six-bedroom apartment, set over three south-facing floors, is one of 17 units on the property and located in the main building, called Library House.

Tagged , , , ,

Keeping the Family Together With a Private Foundation

A private foundation has many advantages for the high net worth (HNW) individual. Along with the tax benefits, the foundation also provides a way of keeping families together.

Private foundations sound like they are only appropriate for the ultra-rich; but that’s not the case.  There are over 90,000 private foundations in the U.S. and 98% are under $50 million.  In fact you can start a private foundation with as little as $250,000 according to Foundation Source.

Of course the immediate advantage of a private foundation is the tax benefit you get from funding it.  It sets you apart in the world of philanthropy and allows you to leave a legacy that can outlive you.  It also provides protection from unsolicited requests for donations; you can always tell people that it’s a wonderful cause but you’ll have to check with your board.

But one of the major benefits of a family foundation is that it can act in many ways like a family business.  It can create the glue to keeps a dispersed family together working toward a common purpose.  It creates a way of instilling family values and transmitting those to a younger generation.

A large proportion of family foundations have two or more generations on the board.  Most are set up as family affairs with membership limited to immediate members of the family.

Contact us for more information.

 

Tagged , , , ,

What are your retirement goals?

A recent issue of Financial Advisor magazine reports that “millennials” (people between age 18 and 34) view retirement goals differently from their parents.

Instead of viewing retirement starting at a certain age, like 65, millennials expect to retire when they reach a certain financial goal.

Fifty-three percent of millennials view retirement as the start of something exciting. In comparison to their elders, 21 percent of millennials are more likely to make pursuing a passion, furthering their education or starting or growing their own business their priorities in retirement.

We at Korving & Company are in the business of helping people achieve their financial goals. How do you view your financial goal? Please use the response button below to let us know.

Tagged , ,

You and your Super-Yacht.

The OceAnco – Igor Lobanov Y708 85.60m Superyacht – Superyachts ...

Have you ever glanced at the pictures of the rich and famous having a party on the deck of a Super-Yacht somewhere in the Caribbean or Mediterranean?  Have you wondered what would it cost to party like that?  Well, it is expensive, but not impossible.  You see, they probably don’t own the yachts, they rent them.

In the April 15th issue of Private Wealth, they discuss what it takes.

Lounging in the Caribbean aboard a beautiful, 100-foot superyacht sounds pretty great, but it might be hard to relax when you’ve got a hefty engine repair bill to pay and crew payroll paperwork to review. The annual cost of operating a 180-foot vessel is $4.75 million, or about 10 percent of the yacht’s original cost. With high maintenance costs in mind, ultra-high-net-worth individuals looking to explore the high seas are increasingly turning to charters.…

A week on a superyacht can cost $115,500 to $190,000, on average, the report found, while the average purchase price is a bit more than $10 million …

Of course that puts it out of the price range of all except the ultra-high-net-worth individuals; those with a minimum worth of $30 million.

But the number of ultra-high-net worth people keeps growing and they often decide to rent a yacht or lease a jet rather than buying one.  It’s a business that keeps growing.

And for people who are climbing the financial ladder (or win the lottery), it doesn’t hurt to dream big.

Tagged , ,
%d bloggers like this: