Asset Planning, Inc Blog

The latest from the team.

Advisors in Transition Speaking Engagement

Sandys headshot for websites

Sandy was invited to speak at The Advisors in Transition meeting on September 14, 2016 at the offices of Brown and Streza in Irvine, California. She was asked to tell the story of how her career started and how she has transitioned through different phases to become the successful financial advisor she is today. This speaking engagement allowed Sandy to share her best practices, help, mentor and inspire other members to grow to new heights.

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Privacy Notices

 

We’ve all gotten them, those privacy notices from your financial institutions that you get in the mail or receive electronically. Usually they are mailed out once a year or you receive one when you open a new account. Let’s be honest, most of us do not take the time to actually read them and they end up being filed away and forgotten about. Well we recently came across an article on My Money Blog that pointed out exactly what those companies are sharing about you and why it’s important for you to take the time to opt-out if you do not want your personal information shared with other companies.

Here is an example of a privacy notice:

Privacy Notice

The information that they share includes:

  • Social Security number
  • How much you make (Income)
  • How much money you have (Balances)
  • What you buy (Transaction history)
  • How much you borrow (Credit and payment history)

The amount of sharing varies widely:

  • For our affiliates to market to you = We can share with companies who are under the same ownership or control.
  • For non-affiliates to market to you = We can sell your information to anyone! They don’t even have to be financially-related companies.

Most of us are busy with our everyday lives and won’t take the time to opt-out and this is what the financial institutions are counting on. If you are tired of receiving unsolicited offers for credit cards or other services and are worried about your personal information being shared it only takes a small effort to contact your financial institution and opt-out. Most of these privacy notices can be found online when you log in to your account or you can call the company directly. Just imagine the amount of trees you will be saving when you stop getting 5 unwanted credit card offers in the mail a day. Not to mention the peace of mind you will have knowing that your information is not being sold.

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Notary Public

 

We want to congratulate Melani for receiving her Notary Public. We now have three Notary Publics in the office. As a courtesy we offer notary services free of charge to our clients. If you have any questions or would like to set up an appointment please give us a call.

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Labor Day

beautiful happy labor day weekend pictures 1
Our office will be closed on Monday, September 5th in observance of Labor Day.
We will resume normal business hours on Tuesday, September 6th.
From all of us at API, we wish you a safe and happy holiday!
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Mobile Banking Security Tips

 

Mobile Banking Security Tips     

Whether using your phone or a tablet, mobile banking is a wonderful tool that gives you access to your financial world with a touch of a button. Almost all banks and credit cards now have apps that allow you to access your account information, make deposits, complete transfers and make payments directly from your smartphone. While we love the convenience of mobile banking it can also be a way for a thief to obtain your personal information if you are not careful. Here are a few tips to keep you secure while enjoying all of the convenience that mobile banking offers.

  1. Always download banking apps directly from the banks website or the app store.
  2. Never download banking apps on “jailbroken” phones. Phones that have been “jailbroken” or modified no longer have the operating system’s security in effect and are more likely to be hacked.
  3. Always secure your phone with a strong passcode and enable the auto-lock feature in case your phone is lost or stolen.
  4. Never use public Wi-Fi when logging into the app. That is a common way for hackers to get your personal information.
  5. Never respond to a text or email requesting your banking/login information. A real bank will never send a request for this info.
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The Importance of Choosing the Right Trustee

 

More and more people are realizing the importance of setting up a trust for their estate. Having a trust in place insures that your wishes for your estate are carried out on your terms if you become unable to care for yourself or pass away. It also prevents your assets from going into probate after your death and saves a huge headache for your heirs. While having a trust in place is very important it is also very important who you name as the trustee.

There are a few different options when selecting a trustee. The most common scenario is that a married couple sets up a living trust where they are both listed as trustees and they list a child or family member to become the successor trustee. In the case that one spouse passes before the other the living spouse will become the sole trustee until they are incapable of caring for themselves or they pass away. At that point the successor trustee in charge of handling the estate duties.

The responsibilities of managing an estate are many and can be daunting to someone who lacks experience in these types of situations. When choosing your trustee you should choose someone who is (a) willing to dedicate the time and energy to run the estate (b) responsible and possesses good judgement and (c) someone who can be objective when following the instructions set up in the trust. It may seem like the natural choice to choose your child or a family member to act in this role but it may not be the best choice depending on the complexity of your estate and their abilities.

In the case where a person is unsure of who to name as a trustee an estate attorney will usually suggest that a bank be set up as the trustee to carry out the responsibilities of the trust. This is called a corporate trustee. This seems like a good idea because a bank has experience with handling trusts and wealth management. But this is not always the best choice either. When the duties of a trustee are needed the bank will take over the trust, move your assets from whatever accounts you have them set up in now to investments of their choosing and will take over the estate. They will follow the instructions in the estate as wished but it may leave your family without the feeling of a personal connection since they may not have worked with that bank before or know the person handling the assets.

Did you know that you have another option that will help ease the burden on your loved ones by running the estate themselves? There is something called an administrative trustee. In a lot of cases we see a child take over the duties of the estate and get overwhelmed with the process. They may be doing it free of charge but in the long run trying to take care of everything on their own ends up costing more financially and emotionally. An administrative trustee is a company that is set up to handle all of the time consuming paperwork and filing responsibilities of the estate. They do not make any decisions as far as wealth management is concerned. That is still the responsibility of the trustee and their financial advisor. Yes, there is a fee to have an administrative trustee but it can outweigh the stress and headaches that come along with trying to do everything yourself.

The best thing to do is have an open discussion with your family, estate attorney and financial advisor. Make your goals and wishes for the estate clear and set up the trustee that you think will be the best fit for your personal situation. By doing this you will have the peace of mind knowing that your wishes will be followed and that your family will be taken care of in the way that you want.

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Top Reasons to Set Up a Living Trust

 

Even if you are not super wealthy there are many benefits to setting up a living trust. A living trust is a document set up by an estate attorney to help you manage your assets, including property while you are alive and names a trustee to act on your behalf to carry out your instructions, if you become incapable of caring for yourself or pass away. Here are a few of the top reasons why you should set up a trust.

Avoids Probate- A trust allows your heirs to bypass probate which can be a lengthy process and your estate can be charged up to 5% in probate fees. This can mean a substantial savings in time, legal fees and paperwork.

Protection Against Disputes- Unfortunately there may be someone who is unhappy with the way you have instructed to have your assets distributed. A trust is harder to contest than a will is because they have to be able to prove that you were under undue pressure or influence in setting up the trust which is nearly impossible.

Flexibility- Trusts offer more flexibility in how you can distribute the funds. In the case where you may have minor children you can specify how the money is spent and when they would have full rights to the funds.

Avoids Estate Taxes- A trust can provide a way to avoid or reduce estate taxes because assets and property placed into a trust are not subject to these taxes.

Minimizes Family Conflicts- You can specifically detail exact items and monetary distributions to be given to each beneficiary. This helps to curtail any of the “who gets what” problems that may arise with family members.

Privacy- Trusts, unlike wills, are private because they do not go through probate. This means your assets and who you leave them to are kept private.

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Tips to Avoiding Credit Card Fraud While Traveling Abroad

 

We came across an article this morning on Marketwatch.com by Maria Lamagna that had some great tips on preventing credit card fraud while you are traveling abroad. We thought we would pass them on to you…

Bring some cash with you on your trip. Make a visit to your local bank before your trip to convert your cash into the foreign currency or you can convert it at the airport upon your arrival.

If you must use an ATM, it is better to use one at a bank than on the street or another non-financial institution. Examine the ATM before using it for any abnormalities. If the card reader appears not to fit, has glue on it or it is chipped it may be a “skimmer”.

Use credit cards instead of debit cards. Credit cards usually have built in protection for fraud and the credit card company can dispute the charges for you. With a debit card, cash is immediately withdrawn from your account and it can take longer for the funds to be returned to you.

Use mobile payments when you can. Transactions with services like Apple Pay use a tokenization method when making payments. This means that a new token is issued for each transaction instead of transmitting the actual credit card number making the payment more secure.

Avoid using public Wi-Fi as much as possible. Although it may be tempting to log in at the local café to save on data use it is very dangerous and an easy way for hackers to get your personal information. You should also change your password before and after traveling.

Check your account activity often. Look out for any transactions that look out of the norm so you can catch any fraudulent activity quickly. Many banks and credit cards now offer monitoring alerts that you can customize and be notified when an unusual transaction occurs.

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Understanding Medicare

 

Medicare seems like a simple concept but just like social security, there are many rules and details that you should understand. First of all, the best place to go for answer is: https://www.medicare.gov  The website is very informative and where I go to if I need to research a Medicare question.

The major components of Medicare are Part A, B, C and D. Parts A, B and D combined are comparable to a PPO insurance plan while Part C is comparable to a HMO plan. You must sign up at age 65 to avoid a penalty but if you can prove that you were covered elsewhere the penalty is waived.

Part A is Hospital Insurance. It is designed to help cover the cost of your care in a hospital, rehab facility, and home health care for a limited period of 100 days per benefit period. There is no premium cost for Part A but there is a $1,288 deductible per year.

Part B is Medical Insurance. It covers doctor services, preventive and outpatient care. The premium cost for new enrollees is $121.80/month and your co-payment is normally 20% of the expenses incurred. The premium is deducted from your social security check but if you delay starting social security you must pay the premium directly to Medicare.

Part D is Prescription Drug coverage. This covers prescription drugs. This coverage is provided by an insurer that is approved by Medicare. To avoid a late penalty you should also sign up for this at the same time as part A & B. You can change the coverage in later years if the coverage is not enough.

Part C is medical insurance offered by private insurers. It is also known as Medicare Advantage. This is offered by HMO type insurers like Kaiser. Medicare deducts the cost of the insurance from your social security check and pays the insurer (e.g., Kaiser) for your benefit. Prescription drug coverage is normally covered as part of this plan too.

Next time, I will discuss medi-gap policies and Medicare premium amounts and what causes them to increase or decrease.

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API Open House

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API held an Open House in our office on June 29th and were delighted to host 75 clients.  We introduced our new full time office administrator, Melani, to our clients that had not yet met her. As we continue to grow in assets and clients, we needed someone dedicated to the running of the office and client contact. These duties have been removed from Samantha as she only deals with client accounts, trading and financial planning now.  API continues to expand and now has clients in 10 states and manages over 220 million dollars.  We thank you for your continued loyalty and referrals that allow us to grow.

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4th of July Holiday

4th of July

Our office will be closed on Monday, July 4th in observance of Independence Day.

We will resume normal business hours on Tuesday, July 5th.

From all of us at API, we wish you a safe and happy holiday!

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Brexit

 

It’s been a hectic day, but we wanted to give you a few notes on the Brexit vote and its impact:

  • The UK makes up only 4% of the overall global economy
  • Nothing will change overnight; the process of the UK leaving the Eurozone will take approximately 2 years based on current estimates.
  • The economic impact will be felt like a ripple or earthquake, those closest to the epicenter will feel the effects more than those farther away.
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Auto Insurance Check Up

 

Auto insurance is pretty much a no brainer. It’s required by law to have so you get a policy and pay your premiums, end of story right? Well, it shouldn’t be. The average person buys a policy and doesn’t think about it again. It is really important, however, to do a periodic check up on your auto insurance policy to make sure you are covered adequately and are receiving all of the discounts you are entitled to. Many changes occur over the years in life like getting married, buying a house, and having a baby. Your auto insurance needs change over the years as well. Having the same coverage limits you did when you were first on your own may not be enough to cover your assets if you were sued in an automobile accident. Talk to your insurance agent to ensure that you have enough liability coverage. Another good thing to do is ask your agent if you are receiving all of the discounts that you are entitled to. There are a ton of discounts available and they may not necessarily be applied to your policy. Some examples of these discounts are good student discount, defensive driver discount, multi-policy discount, mature driver discount and the list goes on. Many of these discounts are not automatically added to your policy so it does not hurt to ask what discounts your insurance company offers. Next, get a few different quotes from other reputable companies for the same coverage that you have. This will give you a good idea if you are paying too much and may give you incentive to switch. By just taking a few extra steps to review your policy each year you could save enough each month to fill up your gas tank.

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Protecting Your Home While on Vacation

Memorial Day weekend is the unofficial kick off to summer and for many people, summer is a great time to plan a vacation. Unfortunately robbers know this and it can also be a prime time for home break-ins. Having a house sitter stay in your home to watch your pets, water your plants, gather any mail or flyers, and turn lights off and on is definitely your best option for insuring your home is safe but this may not be an option for everyone. Here are a few tips to safeguard your home while you are away.

  1. Have your mail stopped. Nothing screams that no one is home more than a bunch of mail and flyers piling up on your doorstep. You can visit the post office website and submit a request online.
  2. 2.Get timers for your lights. Leaving your lights on 24/7 is a dead giveaway that you are not home and will make your electric bill sky rocket. Instead, put your living room lights on timers to come on at dusk and turn off at bed time.
  3. 3.Ask a neighbor for help. Usually a neighbor will not mind keeping an eye out for anything suspicious going on at your house and may even be willing to pull out the trash cans for you. Asking doesn’t hurt and I’m sure they would appreciate the favor in return.
  4. 4.Make sure everything is locked up. This seems so obvious but one of the biggest mistakes people make is leaving a door or window unlocked in their rush to get going on their vacation. If your house is locked up tight the thief will have to work harder to break in and will most likely leave if it is taking too long.
  5. 5.Don’t post about it. Everyone loves getting away on vacation but posting this information on social media will notify all of your connections that you are away from home. Think twice before giving out too much information. You can always post those great vacation pics when you get home!
  6. 6.Get a security system. If you travel a lot or are away from home most of the day in general it may be a good idea to get an alarm or a camera security system. The cost for these systems may be small in comparison to the peace of mind you will have knowing that your home is protected.

Most importantly, enjoy your vacation knowing that your home is secure while you are away!

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Checking Your Own Credit Score

 

Everybody knows how important maintaining a good credit score is. Having a good credit score will get you better interest rates on home mortgages, car loans and credit cards. Landlords and even employers are looking at this number when making decisions to rent/lease to you or hire you. With credit being such an important factor in life it’s crucial that you know what your credit score is and checking your own credit score does not impact your credit. Luckily for you there are many new and free credit monitoring services out there to help you do just that. So if your credit needs a little help, don’t despair, check out these free tools to help guide you on the path to great credit!

Creditscorecard.com

 

Creditsesame.com

 

Creditkarma.com

If you choose to sign up for one of these websites they will ask you for personal information to identify yourself to verify that it is in fact you signing up. These websites are all free monitoring services and they will not ask you for any credit card information. They will however send you marketing materials with offers based on your personal information. It seems like a small price to pay in order to be able to monitor and take control of your own credit. Good luck on your journey to overall better credit health!

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10 Money Saving Tips That Can Really Help Your Bottom Line

 

We recently came across an article written by Kraig Mathias with some great money saving tips and want to pass them along to you. By following these tips you can really help your bottom line and focus your extra funds towards saving for the future.

  1. Get out of debt and stop borrowing money. Pay off all of your debt now and do not buy more than you can afford to pay off each month. Having no more payments means you can save that money instead.
  2. Stop going shopping. While you are getting out of debt stop spending money on unnecessary stuff. You will not make any progress if you continue to spend money at the same time you are trying to pay off your credit cards. It is a vicious cycle that is hard to get out of.
  3. Eat at home and eat out very little. Eating out can be extremely expensive. You will be amazed at the amount of money you can save by merely eating at home more often.
  4. Make a budget each month. Once you sit down and make a budget for the month you will be able to see where all of your money is going and can cut out unnecessary spending.
  5. Think about the bigger picture. Set a goal for why you are saving your money. Once you have a specific goal it will be easier to say no to that daily cup of coffee at Starbucks and make one at home.
  6. Downgrade your disposable goods. You can save big time by buying the generic laundry soap instead of the name brands. They are usually just as good without the high price tag.
  7. Keep your living situation modest. If you are serious about saving money living in a posh apartment or driving that expensive sports car is going to put a strain on your savings potential.
  8. Learn to say no. You’ll have to learn to say no to an expensive night out with your friends. Try suggesting a low cost alternative. This is a big part in taking control of your discretionary spending.
  9. Learn to be content with what you have. If you are content with what you have you will be less likely to want more. Instead of going out and buying new stuff all of the time, try saving for it and paying in cash instead of charging it. You will be more satisfied with the purchase and that you earned the new item.
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Pets: They Truly Are Part of the Family

 

Let’s admit it; our pets are part of the family. Nearly 60% of households own a pet and unlike past generations the emphasis on pets and how we treat them has drastically changed. No more leaving Fido to sleep in the backyard with a bowl of dry kibble. Instead we have begun to humanize our pets and treat them as if they were our children. The average American admits to letting them sleep in their bed, preparing fresh meals for them, buying them birthday presents, etc. There really is no better time to be a domestic pet then now and as a result, Americans are willing to spend more money on their pets and the pet industry is booming. Here are some fun facts about how the love we have for our animals is affecting consumer spending and our economy.

  • US Census Bureau data reveals that since 1998 the number of pet related stores has jumped by 38%. The broad US economy has only added 8% more storefronts over the same time period.
  • Industry research suggests that of the $6.3 billion Americans spent on pet services (excluding veterinary work), 38% of it was on boarding and pet sitting.
  • Organic pet food grew from 11% of total US pet food sales in 2011 to 17% in 2014. If 17% does not sound impressive, consider that only 7% of domestic baby food sales are organic.
  • Bureau of Labor Statistics data shows that consumers spend more annually on their pets ($1,151) than they do on car insurance ($1,112).
  • In 2011, average household spending on pet food alone was $183. This was more than the amount spent on bread ($107), chicken ($124), and cereal ($175).
  • US pet related employment has jumped nearly 3x from 195,000 in 1990 to 553,000 in 2015.
  • Over the next ten years the Bureau of Labor Statistics forecasts have animal care and service employment up 11% and Veterinarian employment up 9%,

So keep on spoiling your furry companion! It’s not only good for him but also the economy!

*Facts and excerpts taken from “Human, Economy and Pet: How Pets Are Changing Humans and the Economy,” Payden & Rygel, Point of View, Spring 2016.

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New Trends in Credit Card Fraud

 

In a recent article released by AARP and written by Sid Kirchheimer, he writes about the new trends in credit card fraud. With the new chip-enabled EMV cards it is now harder for identity thieves to clone counterfeits of the existing plastic cards. Instead they are focusing on opening new fraudulent accounts with stolen Social Security numbers and other sensitive data. Javelin Strategy & Research reported in its 2016 Identity Fraud Study that new-account fraud more than doubled in 2015 from the previous year.

Here are a few tips on how to protect yourself:

1.Get a credit freeze. Once enacted, a credit (also known as a security) freeze restricts access to your credit report, which creditors check before issuing new financial or service accounts in your name. Without seeing your report, creditors won’t approve accounts to ID thieves posing as you. A freeze must be placed with each of the three major credit-reporting bureaus — typically free for those 65 and older (state laws vary) — and can be unthawed when you are legitimately applying for credit.

2.Secure mobile devices. If your financial life is on a smartphone or tablet, apply software updates that patch known vulnerabilities as soon as they become available. Use security features built into Android and iOS devices, such as passcode or biometric (fingerprint) protection, and programs that encrypt data and remotely wipe contents if the device is lost or stolen.

3.Use strong passwords. They “remain the de facto first line of defense for most online accounts, which has motivated criminals to compromise them whenever possible,” Javelin notes. Using a password manager is a convenient way to maintain good password practices without resorting to writing these codes down, which could also place them at risk of physical compromise.

4. Sign up for account alerts. Offered by banks, credit card issuers and brokerages, these free notifications, via email or text message, provide you with real-time alerts of suspicious activity. When fraud occurs, contact the account issuer immediately.

5.Take data breach notifications seriously. One in 5 data-breach victims suffered fraud in 2015, up from 1 in 7 in 2014. While data breaches at retailers remain an issue, the biggest jump in breaches was at government agencies and health care organizations, with a 64 percent rise in exposure of SSNs.

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Save the date: API Open House Party!

Asset Planning will be having an Open House on Wednesday, June 29th from 4pm-8pm. There will be wine tasting and hors d’oeuvres. Look for an invitation with all of the details coming your way soon!

 

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Spring Cleaning

 

As soon as I finish my taxes I also do some spring cleaning of my paperwork clutter and finances. Here are some tips to get your financial house in shape:

  1. Organize financial papers: Do not leave financial documents around that contain information that could be used to steal your identity. Shred paperwork you no longer need. Save important papers in a secure place and if possible, digitally (scan and save on external drive/usb, etc.) and secure with a password.

  2. Bills, paystubs, bank and investment statements should be kept for one year and then just keep the year end summaries and shred the rest.

  3. Keep invoices and all bills for major repairs, improvements and construction on your home. This is vital to have when and if you ever sell your home for increased cost basis.

  4. Tax returns and all supporting documentation should be kept for at least 7 years. A good rule is to scan your older tax returns and keep them forever.

  5. Run your credit report to see if there are any unusual transactions. Annualcreditreport.com allows one free report per agency per year.

  6. Automate adding to investments and savings.

  7. Adjust tax withholdings on your income (paycheck, IRA’s, etc.) if you owed too much tax or received a large refund.

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