August 2015


Each of us is unique in our perceptions. Our own thought process, what we have been taught to believe, our experiences, and our environment are a few things that color our perceptions.

Even in seemingly similar situations, our perceptions can be unique. Here is an example using a mother’s perceptions when asked about her daughter and son:

“My dear daughter! She is so happy. She has a wonderful husband! He gave her a car, bought her jewelry that she dreamed about, hired servants for her. They serve her breakfast in bed, and she stays in bed until noon. He’s not a husband, but a prize!”

“My poor boy, however! He married a real grouch! He gave her everything that she wanted: a car, jewelry, an army of servants. She is lying in bed until noon and doesn’t even get up to make breakfast for her husband!”

The same holds true about money. Although our financial goals and needs may look the same as those around us, our perceptions of how to manage our money are unique. Is it time to be open to a different view of managing your money?


1. Optimism is inherent in many of our personalities. We think it is important to remember financial markets don’t always behave in the way we wish they would. Most of us would like to see these markets always rising, but we know that is not the case. It is important we plan for corrections, and unexpected events and that your plan works in both good and bad markets. A down market maybe right around the corner.

2. It is important we talk about avoiding losses with our money. Why? Because there is more to be gained by avoiding losses than picking apparent winners. If you save a dollar in taxes through good planning, you have gained the dollar plus the money that dollar could earn. The savings could increase the rate of return on your existing investments.

3. Are you renting your life insurance? If your contract is term insurance then you rent. The policy is usually good for a period of time, and only has one benefit – if you pass away it pays your beneficiary. Life Insurance companies love writing term insurance. It is like the Energizer bunny ad – “You pay and pay and pay!” If the insurance carrier issues you a policy with favorable health ratings they are, in essence, saying “we definitely want your business; we don’t think we will pay any money-out on your payments.” They like the risk and are willing to accept a low premium so you’ll purchase the policy.

4. Age 70 ½ is a magical age! Most Americans are retired by then, and it is the age when you are mandated to withdraw monies from your qualified accounts (401K, IRA etc.). Many retirees will postpone taking money from these accounts until that age because they don’t need the money and don’t want to pay the tax. Is that a good idea? It depends on your current and future tax bracket. These plans are great for accumulating and postponing taxes, but lousy for distribution. The key is to start planning years before age 70 ½ so you have distribution options. You will only have one option if you wait until the date arrives.

5. Does your advisor talk about the process he or she will use when they discuss your finances with you? Saving money is a journey and requires a road map. There may be some detours along the way due to unexpected events. It is important we plan for these events, and make sure we have reserves and fuel in the tank to make it to our destination. The road map should be reviewed on an annual basis, and changes made if warranted.

6. Are your Estate Planning documents in order? It is important we avoid threats with our money. We suggest you work with a competent estate planning attorney to execute at least the following basic estate planning documents:

  • Last Will and Testament
  • Designation of Health Care Surrogate
  • Durable Power of Attorney
  • Living Will
  • HIPAA – individuals authorized to receive information on your medical care

7. Five key things to know about equity in your house:

  • Equity inside the house benefits the lender. Equity outside the house benefits the borrower.
  • The equity in your house earns 0% interest.
  • Mortgage is not debt if you have enough cash in a side fund to pay-off your house with a stroke of the pen. The mortgage is a financial obligation.
  • A 30 year fixed rate mortgage locks-in a 30 year fixed payment regardless of the impact of inflation.
  • The most expensive mortgage payment is your first payment. The least expensive payment is your last payment. Inflation determines the true cost of the payments.

8. Are you spending time managing your liabilities? If you want to increase your cash flow you need to spend as much time managing your liabilities as you do seeking higher rates of return on your assets. Developing strategies to reduce taxes, which, for many, is their largest liability, has a significant impact on increasing your rate of return on your existing assets. Managing liabilities is often overlooked when creating wealth.

9. There is a difference between a house and home. The house is about the physical structure or shelter, and the home is about the emotion and experiences one receives living in the house. Whether you should finance or pay cash for your residence (if you have the ability to pay cash) should be determined on the merits of making cash most efficient and not the emotional experiences or memories the home instills.

10. What is the top financial security goal? “Not running out of money is the top financial security goal,” says Jamie Kalamarides, CEO of Prudential Bank & Trust. “The object of savings for retirement is not to have a pot, but to have a lifetime of income for retirement.” Our lives are governed by cash flow not accumulation of assets. Cash is King!


  • Retirement
  • Estate Planning
  • Life Events / Family Security
  • Eldercare
  • Financial Basics

“Statements without documentation are only opinions.”

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