Category Archives: Investing

salliecrawcheckSo excited to read the article about Sallie Krawcheck’s new offering for women investors.

Not sure who she is?  Wonder why she is involved in investing and women?  Curious to know about a new investment process which steps away from the traditional investment models?  Please just click here and enjoy!

 

 

 

 

 

 

 

 

myRA – Starting Small

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ffpcovermarch2016lulufinalAs a broker and financial advisor I used to dream that someday (the wishful someday we all know about) there would be a way for lower and middle class income people to start preparing for retirement with a small investment account.

I had seen how getting people started with a small investment of $25 a month increases their confidence and understanding of the value of the concept of accumulating funds.  Over time it has been less financially attractive for the investment community to offer services to small individual investors  who aren’t part of a larger level of overall contributions from a workplace retirement plan like a 401k and 403b.  This means that people who want to contribute to a Roth IRA often had few choices except to accumulate money just to get started.  That of course, usually didn’t happen and nothing changed.

A new program called myRA is an option to fill that gap between getting started and entering the investment community.  Is it all I dreamed of?  Yes, pretty close.  Is it worth learning more about if you aren’t accumulating money for retirement?  Yes!  Is it perfect?  No, but then neither are we and our best intentions to invest when we accumulate some funds are overcome with this option.

The information below is from the myRA.gov website.  As always, tell your friends and family.  It doesn’t take an investment professional to get you to this solution.

About myRA

The United States Department of the Treasury developed myRA® to help more people start saving for retirement.

Why was myRA developed?

myRA was developed to remove common barriers to saving and help people take the first step toward a more secure retirement.

Who is myRA for?

myRA is designed for people who don’t have access to a employer-sponsored retirement savings plans or lack other options to start saving for retirement.

How does myRA work?

People can contribute to their myRA account with as little as a few dollars a month generally up to $5,500 per year (or $6,500 per year for those age 50 and over).

Millions of Americans aren’t saving—or aren’t saving enough—for their retirement. myRA offers a simple, safe, and affordable way for people, especially those who don’t have access to a retirement savings plan at work, to get started.

myRA is a Roth IRA retirement savings account with no start-up cost and no fees. myRA has no minimum contribution requirement, so people can contribute the amount that best fits their budget.*

Contributions to myRA accounts are invested in a new United States Treasury security, which safely earns interest at the same variable rate as investments in the government securities fund for federal employees. This investment is backed by the United States Treasury and the account carries no risk of losing money.

People can fund their myRA account directly from their paycheck, or from a personal account, such as a checking or savings account, or by directing some or all of their federal tax refund to their account when they file their taxes.

myRA can be a first step

myRA can help people without access to a retirement savings plan get started saving, but it is not intended to be the only way they save for retirement. myRA is not a replacement for 401(k)s or other types of employer-sponsored retirement savings plans. People can have a maximum account balance of $15,000, or a lower balance for up to 30 years. When either of those limits is reached, savings will be transferred or rolled over into a private-sector Roth IRA where people can continue to grow their savings

From: myRA.gov. You can learn more there and enroll!

 

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Looking at my television and seeing an official from the Department of the Treasury talking about the new myRA Plans!!!

When I first heard of these plans, which are targeted to those who can make smaller contributions to a retirement account and who do not have the opportunity to easily invest through a retirement plan offered at work, I was excited.  Sometimes we have to take baby steps to get into the routine of saving, investing, and having enough money to be attractive to the overall investment community.

The website explains this option has no cost or fees, no complicated investment options, and no risk of losing money.

Please take the time to learn more.  Just click here

 

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Please click here to order my book!

 

Women and Money, The Prospectus

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Have you been in this situation?  You pick up the prospectus for an investment and wonder, what is this?  It looks so boring, why should I even bother reading it?   How can it help me?

This post is to help you find some value in those printed pages and keep from being be overwhelmed by the information provided there.  Yes, it is more fun to look at magazines and catalogs which are colorful and clearly designed to attract our attention to buy, buy, buy.  Just think of the prospectus as part of the process for purchasing a specific investment and try to overlook the lack of pizzazz in the presentation.  Once again, this is an educational blog and not a recommendation to make a buying decision of any particular investment or product.  You may use a prospectus from any fund you wish as a tool to learn more about the investment.

Since my earlier posts were about a mutual fund which offers an investment option called gender lens investing, I’m going to refer to mutual funds as the type of investment—or security—for this discussion. There are, of course, other investments, such as individual securities like stocks or bonds, but mutual funds have evolved into a popular investment choice.   The prospectus for the Pax Ellevate Global Women’s Index Fund  is as good as any to use as an example and was mentioned in my  series about gender lens investing.

First, it is important to remember that the securities industry is highly regulated. The government organization with the main responsibility for setting rules and regulations is the Securities Exchange Commission (SEC). The organization which is responsible for setting a framework for firms (such as broker/dealers) and registered representatives (licensed individuals who work in the industry and serve clients), is called the Financial Industry Regulatory Agency (FINRA). Previously it was called the National Association of Securities Dealers (NASD). FINRA is not a government agency, but is referred to as a Self- Regulating Organization.  The SEC makes the rules and FINRA members (firms and individuals) implement them through more rules and regulations.  This is a simple explanation.  To learn more, please click here for the SEC website   and  click here for the FINRA website.

When you, as the client, make an investment in a mutual fund, you are given a prospectus. This is a regulatory requirement. The prospectus is supposed to be presented at the time of the investment, but there are some other guidelines which allow a slight delay. For your purposes, you should expect to receive the prospectus when you meet with your representative. It is pretty easy these days as the prospectus is usually readily available on-line.

So what is a prospectus? It is the story of the investment, in this case a mutual fund.  Some companies issue a separate prospectus for each fund.  Others, offer a booklet listing information about more than one fund.  The Pax Ellevate Global Women’s Index Fund  is one of seven funds listed in the prospectus we will be reviewing.  So when you look at the prospectus, please go to the index and you will see that  information about the Pax Ellevate Global Women’s Index Fund starts on page 49.

The prospectus contains a lot of information, but a good way to start is to locate the following information:

  1. The name of the company that manages the fund.
  2. The goal of the fund.
  3. The minimum investment for a lump sum and/or a periodic automatic investment.
  4. When the fund originated.  Information showing the long-term performance of the fund.
  5. Fees. What is the initial front load (cost to the investor) or a back-end load (cost to the investor)? What is are the annual operating expenses paid each year as a percentage of the value of the investment? Are there other fees and restrictions?

The best way to learn is to explore a prospectus and identify the items described above. Please link to the prospectus at   Pax Ellevate Global Women’s Index Fund and review pages 49-58 and page 89.  You probably commit a lot of time to making money and spending money.  So, please make a small commitment of time to understanding how to gain some value from a prospectus when considering an investment.

Next time–a review of the details provided by the  prospectus for the Pax Ellevate Global Women’s Index Fund.

 

 

(This information is designed to educate you about basic financial management concepts. Questions relevant to personal finances specific to the individual should be address to an appropriate professional to ensure that the situation has been evaluated carefully and appropriately. The Authors and Publisher specifically disclaim any liability loss, or risk which is incurred as a consequence directly or indirectly from the use and application of any contents of this work.)

Copyright2014©by Debra Hadsall

 

 

 

 

 

Gender Lens Investing

lensfunnyHave you heard about gender lens investing?  I must admit that it is something I am just learning about.  So, let’s learn together.

To me, the two words gender lens create a vision of looking through the lens and seeing  the world through  adjustments. The lens is a filter which symbolically contains all our personal prejudices and experiences along with those we have acquired as the result of the norms and rules of society.

I googled the term “gender lens “to see what the experts say.  Interestingly enough, there were not pages and pages of quick definitions, most were quite clinical.  So I am going with the one from Wikipedia which is simple and concisely states what the long detailed articles and papers take paragraphs to explain.  It says:

What is a Gender Lens?

Think of a gender lens as putting on spectacles. Out of one lens of the spectacles, you see the participation, needs and realities of women. Out of the other lens, you see the participation, needs and realities of men. Your sight or vision is the combination of what each eye sees.

Gender is about relationships between men and women. Gender equality is about equal valuing of women and men – of their similarities and their differences. We need equal, respectful partnerships between men and women to have happy, healthy families and communities in the same way that we need both eyes to see best.

You can read more by clicking here.

This gives us a foundation to beginning to understand the concept of a gender lens, now to see how that term applies in the investment world and what it means to women.  More next time.

Until then.

Debra Hadsall

www.ffptalk.com

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A Refresher about Taking Money from Your Roth IRA

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The Roth Individual Retirement Account (IRA) became available in 1998.  It was named after its legislative sponsor,  William V. Roth Jr., a Republican senator from Delaware.  The Roth IRA was part of the Tax Relief Act of 1997.  Sometimes we let the words for investment terms roll off our tongues without really knowing what they mean.  This one is easy, it was named after someone who saw a need for an investment which had the potential of remaining tax-free during both the accumulation (adding to it) or distribution (taking money from it) phases.  Of course there are rules to make that happen.  As the saying goes, there is no free ride.

First, the money contributed to a Roth IRA is called after tax money, meaning the investor already paid taxes on it.  Second the money needs to conform to a few rules to avoid paying taxes.    I like the simple way an investment firm, Invesco, has explained it.  Please just click here to learn more.

Whether we like it or not, investors often start with the long-range plan of investing money and leaving it there until age 59 1/2 and later and then life catches up with them.  A recession hits, a job is lost, a major medical expense is incurred, a business fails, or some other major financial need comes along.   Sometimes the investor is looking over all of her or his investment accounts to figure out how to best manage a short-term situation by accessing retirement accounts.  Yes it could and has happened to investors, maybe even to you.

The information in the link is very useful as you work with your financial professional to sort things out.  It is best to make an informed decision and be aware of the consequences so you can plan on them.

Until Next Time

Debra Hadsall

Please remember, this is a short overview and questions relevant to personal finances and specific to the individual should be addressed to an appropriate professional to ensure that the situation has been evaluated carefully and appropriately.

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To order my book, please click here.

myRA Accounts-Much Needed Baby Steps

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Not certain what baby steps have to do with the newly announced myRA plans?  In my opinion, lots!  We all have to start somewhere and grow from there!  So many people get so intimidated with the top, they don’t take the first small step.

As someone who was a financial advisor and registered representative working with both experienced and  first-time investors, I am excited about this interim step.   Very encouraging!  More next time about how I came to this conclusion.

Until then, I encourage you to click here to learn more!

Debra Hadsall

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www.ffptalk.com

To purchase my workbook, Financial Freedom Party for Women®, A Little Book about Money for Women, please click here.

Empty Mansions– Living the Good Life?

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I just finished reading the book “Empty Mansions” by Bill Dedman and Paul Clark Newell, Junior.  The title says it is about “The Mysterious Life of Huguette Clark and the Spending of a Great American Fortune”.

Any book with the words fortune and spending just calls to my financial education mind.  It would seem that a book about wealth would be all about what we call “living the good life”.  I learned that the title refers to the empty properties Huguette continued to maintain even though she didn’t live in them.  Interesting.

This book is about a woman and her story which revolves around extreme wealth, business, family owned businesses, decision-making, relationships, trust and distrust, and how money can be both a blessing and a curse.

Personally, it took me a long time to learn to deal with money in an unemotional manner.  The main character, struggled with that for a really long time as she was born in 1906 and died in 2011. She dealt with a lot of emotions and they often guided her decisions.  For Huguette, these decisions usually involved  large sums of money. The world changed radically during her lifetime and she also outlived her close relatives.  Some of the change was more than Huguette wished to deal with, so she created a lifestyle which was strange and unconventional to most ordinary (and even wealthy) people.  Her needs for security and safety as a wealthy person played a big part in how she spent money.  As an elderly woman  it appeared that those who were caring for her may have taken advantage of  her financially, even though the medical professionals found her competent.

It is hard to imagine the majestic homes her father created with his wealth  and the mind-set of  Huguette who was born into such a lifestyle and never knew anything different.  Still, I was struck by the similarity between the decisions she had to make about  businesses, advisors, and income management, and those made by the rest of as we manage our personal finances or make lifestyle and financial decisions about the senior citizens our lives.

Was Huguette happy living what most would see as “the good life”?  It is hard to tell.  That is the mystery which remains in her interesting life story.

Until next time.

Debra J. Hadsall

New Year, New Chance to Increase Retirement Contribution$$$

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When I was a financial advisor, I learned that the time between Thanksgiving and January 1st was going to be a slow time for me in terms of working with new clients.  Yes, existing clients were often on vacation and using that time to catch up with me and to check in about their accounts and plans.  The rest of the world seemed to be waiting until the first of the new year to really think about their goals, dreams, and how their finances could be changed or improved to meet them.

Every year about this time I would print out a new list which showed the maximum contributions allowed in various types of retirement accounts.  In reality, most people don’t contribute the maximum and often they just look at the list and give up.  So, just  remember, these are the maximums.  You can contribute less and work towards your goals.

To see the list for  2014, please click here.  Good information to know and to discuss with your advisor or with the person who is knowledgeable about your company or organizational retirement plans.

Please share with others.  As I often say, don’t always assume everyone knows what you know or takes the time to access

Until next time.

Debra Hadsall

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