It is an unfortunate truth that while women represent 87 percent of consumerism in the US we are still vastly behind when it comes to financial literacy. While women make the majority of the spending decisions for the family they still seem to be lagging behind when it comes to long-term money investments and creating wealth. It is alarming to find out just how many women are dependent on their spouse to plan their retirement.
I recently attended a forum sponsored by Deborah Bateman of National Bank of Arizona which featured a fabulous panel of female experts to address some of these issues women now deal with today. The event was hosted by Sharon Lechter, international spokesperson and famous author on finance. Attorneys Darra Rayndon and Angela Hallier, were also on hand to lend their expertise when it comes to protecting your wealth in regards to your relationship, divorce and sometimes when losing a spouse.
It still surprises me that many women are not prepared financially in the event of a divorce, considering the divorce rates are well over 50 percent. The panel touched on pre-nups, postnups and the importance of a will.
National Bank of Arizona is affectionately known as the Women’s Bank and has created, WFG short for the Women’s Financial Group. Women live longer and having the right strategies in place for retirement are essential. NBAZ does its best to bring these subjects to the forefront and to apprise women of their options. No one likes to think about wills, prenuptials, long term disability or revocable trusts. However, by the time we usually get around to realizing we need these things it’s often too late.
Personally speaking, I can say that after attending this forum I did find a few holes in my plans for the future that I intend to correct. It has never been a better time to be a woman than it is now. Embrace your independence and take control of your future.
With today’s high risk world of credit card fraud what does your current merchant service/credit card processing company do for you? When establishing your businesses’s merchant service account obviously price is a crucial element to the negotiation process, however make sure you are asking questions such as how will they be protecting you from risk.
If you haven’t heard by now, Visa, MasterCard, and Discover have created industry standards that everyone must adhere to.
First, make sure your provider is setting you up with products that are fully PCI compliant. If you are using an old terminal, go out to the Internet and research whether that terminal model is compliant. Never solely depend on your merchant services sales person because that could just be a ploy to sell you new equipment.
Second, when filling out the application to set up your account there are typically two numbers that you should pay particular attention to, highest ticket and average ticket. The highest ticket is typically the largest sale you would ever see which obviously varies from business to business, while the average ticket is going to be the average sale on any given day. I know these seem very basic and routine; however the processor your account is being setup on uses these two numbers to protect you from fraud.
For example, let’s say your highest sale ever for your business would be $500.00 and that’s what you put down on your application. Then months or even years later a $5000.00 sale is processed and is a legitimate transaction. Although this is a legitimate transaction your funds are going to be held because this transaction greatly exceeds what you initially put on your paperwork.
What happens next is an indication of how your merchant service provider has your back. Are you just calling an 800 number only to get the run around? Do you have an Agent to call? Do they know why your funds got held? If their not telling you why and aren’t asking for documentation to support the transaction then be prepared to get frustrated.
Because we have representatives who manage risk within our company, when funds get held because of transactions being over their limits a phone call is made to validate that the transaction was correct. If it’s a valid transaction, then a request for an invoice and/or signature as well as what was sold is requested. Having and providing this documentation is crucial when attempting to get the funds released.
It’s important that you work with a merchant service provider that can provide you and your business the support you need to focus on your business and your customers rather than your credit card processing.
Chris Damron frequently writes on financial issues businesses face with today’s often confusing and rapidly changing digital transaction market.
Most homeowners insurance claims are water related. Yet many policyholders are unaware of what is covered and what is not covered by their homeowners insurance policy.
Unfortunately, a lot of confusion and hard feelings result when policyholders try to file a claim only to find out that the damage caused as a result of a water event is not covered or only partially covered by their homeowners policy.
It is imperative that policyholders ask their agent what is covered and read their policy as to what is covered and what is excluded with regard to water damage. Not all policies are the same. So sometimes that cheaper policy you think you are getting a great bargain on results in creating a lot of holes in your homeowners insurance coverage.
So what water damage events are typically covered by homeowners insurance? For the most part, homeowners insurance will cover water claims that arise from “sudden and accidental” occurrences and not neglect, wear and tear or normal maintenance that is the responsibility of the insured.
For example, water entering the home through leaks, cracks and seepage are considered to be the responsibility of the owner and should be prevented through routine home maintenance.
Similarly, water entering through a roof that has shingles and tiles that have not been maintained for a good number of years is the responsibility of the homeowners. While the resulting damage to carpet, flooring and dry wall may be covered by the insurance carrier the slab, foundation and roof would not be covered.
Here are some common water-related events that may or may not be covered:
1) Burst water heaters and pipes. Generally, these are covered by the homeowners policy for both the water heater and pipes and the resulting damage to walls, flooring and home furnishings. However, none is covered if the house is unoccupied and/or without heat. If this is the case the claim will likely be denied.
2) Overflow from a backyard pool. If damage is the result of a rainstorm or tree falling on the pump the policy should cover the damage to the pool and water damage to the home caused by the rainstorm. However, there is a smaller dollar amount for damages available for lawns, trees, shrubs and landscaping. Also, if the cause is from a flash flood or river overflowing no coverage would be provided.
3) A toilet, tub, sink overflows or a dishwasher explodes. The damage to the toilets, sinks, tubs and dishwasher as well as the water damage to home furnishings would be covered by the homeowners policy if it is determined to be “sudden or accidental.” Companies vary on the amount of mold damage included in this coverage so it is wise to check what amount is provided in your policy. One possibility where it would not be covered is when the blockage of the toilet, sink or tub was caused by sewer blockage. Then, the claim could be denied if Sewer back-up coverage is not part of the policy. See #4
4) Sewer back from drains and sump pumps. Many standard homeowners policies do not include this coverage. It might include Loss of Use Coverage but that’s all without this endorsement on the policy. Ask your agent if your policy includes this coverage. If not, the cost to add it typically runs $40 – $50 per year. A wise investment. If you are a business owner you might also want to consider having this for your office that you own or lease. Most homeowners and business owners are unaware that they are responsible for the upkeep and maintenance of the sewer line that runs between their building and the sewer main.
5) Water from a rainstorm. Most insurers will not pay for roof repairs because this is considered to be a maintenance problem. It would, however, cover the damage inside the home caused by the water damage. If the damage to the roof was caused by wind, hail or something like a falling tree then the repairs to the roof would be covered.
6) Damage from a wash or river that overflows. Flood damage is NOT covered by a homeowners policy. You need to purchase a separate policy from the federal government for this coverage. You can easily obtain this coverage from your insurance agent.
7) In-home fire sprinklers and air-conditioning/heating unit burst pipes. These are typically covered in the homeowners policy, however, if neglect or improper use is found, there might be no coverage.
8) Large Water Spills. If a large fish tank or large bucket or cooler causes damage to flooring or dry wall it is typically covered in the homeowner’s policy.
9) Slow dripping water leaks. A slow pin hole leak in a pipe, a dripping ice maker in the refrigerator, a leaky toilet or an incorrectly sealed bath or shower will typically not be covered since it is considered negligence on the part of the homeowner.
Many times people ask if they should make repairs immediately in the event of water damage. Generally, you should make the necessary repairs to protect your property from further damage. If possible, take pictures of the damage before making temporary repairs.
When calling your carrier to make your claim, consult with them as to what additional repairs you can make before an insurance adjuster comes to inspect the damage. It is always wise to calculate the likely amount of your claim versus your homeowner’s insurance deductible. If it relatively close to this amount you might consider not filing the claim since the amount you receive from the insurance company is below what the increase in your premium will be from this claim.
The purpose of this article is to provide guidance with regard to water damage claims. Because there are so many different homeowner policies and carrier rules and regulations, it is imperative you read your application or policy and review it with your agent to make sure you have the coverage you expect and need for your home. Finding out you do not have insurance coverage for one of life’s biggest investments could cost you thousands of dollars unexpectedly when it comes time to file a claim.
Want to really know what’s happening in and around Scottsdale? There is an exciting, full-day event to be held on Friday, April 12 at the Hilton Scottsdale Resort that is open to the public highlighting current and planned commercial real estate development in and around the NE Valley. It is called The Commercial Real Estate Summit “It’s all about Scottsdale”. The Summit will be hosted by the Scottsdale Area Association of Realtors® and is designed specifically for commercial/residential agents, developers, business owners, government entities, investors and residents interested in economic development. Continental breakfast and lunch are included in the registration. Early Registration is $45.00. It is $55.00 per person 4/2-11, $65.00 at the door and tables of 10 are discounted to $400.00 for your company or group.
Register Online at www.SAARonline.com
In our previous articles written for SmartFem, we have emphasized that “knowledge” is a powerful tool and being “smarter” than the next person – gives you a leg up on negotiating. If you are in Scottsdale or vicinity, regardless if you are simply buying a home, renting a condo or deciding where to locate a business – the information obtained at the Summit will be a strong asset in your arsenal.
Speakers include some of the most respected leaders in the state sharing insight about current and future events and projects that are likely to have profound impacts on our quality of life. Speakers will focus on transportation, healthcare, tourism, retail, housing, growth in the airpark, economic initiatives in south Scottsdale and plans for the Loop 101 corridor within the Salt River Pima Maricopa Indian Community. You may register online at www.SAARonline.com or simply by calling 480-720-4777.Jim Kasten, CCIM SAAR Commercial Summit Coordinator Owner / Designated Broker Kasten Long Commercial Group
As an apartment broker who has been selling apartments in the Metropolitan Phoenix are for the last 20 years, I can think of all the standard answers to why probably 95 percent of my clients have been men. For example, a few contributors might be that it seems apartments are a lot of work as an investment, it is too time consuming, it is too hard; but, being an apartment broker in the Phoenix area, I know that none of those things are true. After I thought about this some more, I realized that I cannot really come up with a true “why” to the fact that a majority of my clients are male.
Apartments can be anything from a duplex or four-plex up to several hundred units at one location in one property. Basically, apartments bring in monthly income from rent and miscellaneous other fees. From this income, the owner/landlord pays the bills for the apartment and the difference, simplified, is profit. The second part of the “apartment as an investment” equation is that where values are rising, like what is currently happening in metro Phoenix, the value of the apartments will increase, offering the investor/landlord, a profit when the property is sold. So, not only does apartment investing bring in monthly income; but also the potential for appreciation when it is sold.
I have many clients in Phoenix that started out buying a small property and through buying and selling and using their profits to buy larger properties, now have several hundred units and strong monthly income. It takes a while, yes, but with the help of an apartment broker and some patience, in the end it is worth the wait.
It is apparent that many adults are simply complacent about protecting their identity. Despite all the evidence of people who have their lives ruined by a single instance of identity theft, the general feeling remains “It’ll never happen to me!”
Consider the true story of Olivia McNamara who wanted to obtain her first credit card after graduating from high school. She simply wanted to establish a credit history, only to find out that identity thieves had beat her to it. The banks were not cooperating and neither were the credit bureaus. After securing the services of an identity theft company they finally found the source of the problem. Olivia’s social security number had been stolen 10 years prior and other people had used it to secure loans in the millions. Her credit was destroyed by a series of defaults on loans taken in her own name.
Over the past several years there have been hundreds of thousands of kids’ social security number stolen and used for all kinds of illegal purposes. They often don’t find out until they finally ask for credit of their own.
There is nothing identity thieves won’t do to access your child’s information. A horrible case was uncovered last May in Florida when the parents of an (8) eight year old girl were told that her social security number had been used…. After her recent death from cancer. Thwarting their ability to collect a tax return properly.
Take action NOW. Protect your children and their identity!!!
SmartFem offers families the most comprehensive, cost effective protection with the nation’s best identity theft offering.
Which one are you?
You stand at your window and look across the street. “Nice house,” you think. Nice landscaping, nice sports car, nice driveway, new bikes for the kids. Wow, your neighbors are really well off. If only you had that kind of money.
That plain home down the street with the old model Sedan parked out front pales in comparison. A couple in their seventies lives there, and the front yard has not been spruced up in a decade. Who knows, maybe they struggle just to get by.
If you could somehow look into the financial lives of those two households, you might be surprised. The couple with all the toys might not be as wealthy as the neighborhood perceives, while the vanilla exterior on that humble rancher might hide a multimillionaire next door.
Remember that affluence does not equal net worth. When you look across the street at the house of that well-to-do family, you are not necessarily gazing at a portrait of wealth. You are seeing a portrait of their spending habits.
What are they spending their money on? Perhaps, quite literally, a façade. Their house may be the best house in the neighborhood, but what of kind of mortgage payment are they grappling with? Are they making payments on that sports car? That vehicle is a depreciating asset (unless they keep it garaged for a few decades). The flat-screen, the pool, the home audio system… they have put their dollars into things that their neighbors can see. They may be engaging in all-too-common financial behavior: thinking of wealth in terms of material items, spending money on toys instead of their lives.
Real wealth may not be advertised. Perhaps the older couple down the street is not interested in the hottest new luxuries. Decades ago, they put extra money toward their mortgage; even with housing values currently depressed, their residence is still worth much more than they paid for it. Most importantly, it is paid off.
Maybe they are good savers, always have been. When they were the age of the flashy couple up the street, they directed money into things that their neighbors could not see – their investments, their retirement accounts, their bank accounts.
Years ago, they could have lived ostentatiously like that high-earning couple up the street – but instead of living on margin, they chose to live within their means. They saw some of their friends “rent” a luxury lifestyle for a few years, only to lose homes and cars they could not really afford. Sometimes the economy or fate had a hand in it, but too often their friends simply made poor decisions.
It could be that it was just more important for them to think about the future rather than the moment. Their good financial habits kept their family away from a bunch of bad debts, and helped them build wealth slowly. Indirectly, it also helped their kids, who grew up in a household with less financial stress and with an appreciation and understanding of key financial principles. Now, they are applying those principles to build wealth in their own lives.
Roughly every 40th American is a millionaire. There are nearly 8 million people with a net worth of $1 million or more in the U.S., and their financial characteristics may differ slightly from what you expect. 1
Fidelity’s 2012 Millionaire Outlook survey (which polled 1,000 households with $1 million or more in investable assets) notes that 86 percent of millionaires are self-made. Not so amazing, perhaps, but here is a striking detail. Among the self-made millionaires, the top sources of assets were 1) investments and/or capital appreciation, 2) compensation and 3) employee stock options or profit sharing. Millionaires born into wealth were the most likely to cite entrepreneurship and real estate investing as key factors behind their fortunes. 2
According to the survey,the average U.S.millionaire is 61 years old with $3.05 million in investable assets. Fidelity also found that with regard to the financial future, more than 30 percent of these millionaires were focused on preserving wealth, rather than growing it (20 percent). 2
What will you spend your money on, tomorrow or today?
As Thomas J. Stanley and William D. Danko noted in their classic study The Millionaire Next Door, the typical millionaire lives on 7 percent of his or her wealth. That was in 1997; the percentage could be lower today. Call it frugal, call it boring, but such financial conservation may help promote lifetime wealth. Today, with so many enticements to spend your money as soon as you earn it, this mindset may have a lot of financial merit.1
“ID Theft Attacks” and “Shark Attacks” Have Some Things in Common
“Just when you thought it was safe to go back into the water”… remember that tag line from the movie JAWS? Well the world as we know it is becoming filled with more and more sharks and your identity is at risk from attack.
In 2011 there was a 67% increase over 2010 in the number of data breach notices received by Americans from businesses and financial institutions. What does that mean to SmartFem members? There are more and more sharks entering the world and your chances of an ID theft attack are increasing at an alarming rate…there was a 13% increase in the number of Americans attacked in 2011.
Identity theft is viewed similarly to a shark attack because: a) it is a horrifying experience that can ruin your life; b) no one seems to think it will every really happen to them; and c) everyone wishes they had taken simple precautions to avoid letting the shark get the best of them. And we are not just talking about credit card fraud.
Unfortunately, according to the most powerful law enforcement people, an attack from identity thieves is less a matter of IF it will happen, but more like WHEN it will happen to anyone. The cyber-chief of the FBI has stated that when it comes to identity theft/fraud and data breaches…“…you can never get ahead, never become secure, never have a reasonable expectation of privacy or security…”. Technology is fostering too many new ways for ID thieves to get your identity and run with it. Not even massive amounts of credit monitoring services can guarantee the prevention of ID theft.
SmartFem President, Lea Haben is a survivor of ID Theft. She now has found a solution for members that allows you, and your family, a safety net of security in case you are ever attacked. See this special low cost promotion that explains it all.
We are now in plain view of the “fiscal cliff”. After the election, Congress may or may not end up keeping income and estate tax rates at their recent levels. Next year may bring some notable financial developments, and it isn’t too soon for households to think about them.
You may want to prioritize tax reduction. If the Bush-era tax cuts sunset, everyone will see higher taxes. The federal income tax brackets (10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent) that we have known for the last nine years would be replaced by five higher ones (15 percent, 28 percent, 31 percent, 36 percent, 39.6 percent) come 2013.
High earners may want to watch their incomes. If your earned income for 2013 tops $200,000 – or exceeds $250,000, in the case of a couple – you may face two Medicare surtaxes. While the Medicare payroll tax on earned incomes above these levels is set to rise to 2.35 percent from the current 1.45 percent, the second surtax may prove to be the real annoyance: there is scheduled to be a 3.8 percent charge on net investment income for individuals and couples whose modified adjusted gross incomes surpass these levels.
Some fine points about this second surtax must be mentioned. It would actually be levied on the lesser of two amounts – either your net investment income or excess MAGI above the $200,000/$250,000 levels. Most investment income derived from material participation in a business activity would be exempt from the 3.8 percent surtax, along with tax-exempt interest income, tax-exempt gains realized from selling your home, retirement plan distributions and income that would already be subject to self-employed Social Security tax.
You may have less take-home pay next year. Social Security taxes for paycheck employees are slated to return to the 6.2 percent level in 2013. They’ve been at 4.2 percent since the start of 2011. If you earn $75,000 during 2013, you will take home about $1,500 less of it than you would have in 2012. If you earn $50,000, we’re talking $1,000 less.
Any 2013 Social Security COLA may be minor. In 2012, the cost of living adjustment to Social Security benefits was 3.6 percent. Before that, Social Security recipients went three years without a COLA. As inflation is mild, whatever COLA is announced this fall in tandem with Medicare premium changes may not amount to much.
Next year, medical expense deductions may shrink. If you are thinking about delaying a procedure or surgery until 2013, remember that the itemized deduction threshold for unreimbursed medical expenses is set to increase from 7.5 percent to 10 percent of adjusted gross income in 2013. Even if that happens, however, the threshold will remain at 7.5 percent through 2016 for taxpayers age 65 and older.
You may be able to find a better Medicare Advantage plan for 2013. The Affordable Care Act has altered the landscape for these plans (and their prescription drug coverage). Using Medicare’s Plan Finder (click on the “Find health & drug plans” link at Medicare.gov), you may discover similar or better coverage at lower premiums. The enrollment period for 2013 coverage runs from October 15 to December 7.
Those without work may find a safety net gone. Extended jobless benefits may disappear for the long-term unemployed at the start of 2013. Will Congress extend them once again? Possibly – but that isn’t a given.
The estate & gift tax exemptions may shrink significantly. The (unified) lifetime federal gift and estate tax exemption is currently set at $5.12 million – and it will drop to $1 million in 2013 if Congress stands pat. Federal gift tax and estate tax rates are also slated to max out at 55 percent in 2013, as opposed to 35 percent in 2012. Right now, an unused portion of a $5.12 million lifetime exemption is portable to a surviving spouse; in 2013, that portability is supposed to disappear.
Many analysts and economists think that Congress will eventually abide by President Obama’s wishes and take things back to 2009 instead of 2001 – that is, a $3.5 million estate tax exemption, a $1 million lifetime gift tax exemption, and a 45 percent maximum estate and gift tax rate.
Prepare for year-end drama … and for 2013. The last two months of 2012 will surely bring political theatre to Capitol Hill. As it unfolds, you may want to look ahead to next year and consider the impact that these potential changes could have on your financial life.
You have just gone through one of the most challenging and difficult periods that a woman can experience in her life – a divorce. While many things may still be in up in the air, one aspect of your life that you should make sure you’re in control is your finances.
Financial planning for divorced women is not that much different than financial planning for married couples. Several basic elements are the same. However, the differences offer both good news and bad news. The good news: you can make plans and decisions based solely on your needs and goals. There won’t be miscommunication or conflicting ideas. The bad news: it’s all in your hands. Any mistakes will be your own and a poor decision can’t be salvaged by the income or assets of a partner.
The following post-divorce action plan offers a few things worth considering:
One way to counter the bad news is to find a trusted financial professional to seek advice from.
After a divorce, friends are often split between spouses. Financial representatives can be the same way. If you lost yours in the divorce or never had one to begin with, it’s a good time to consider finding a professional who can help you make sound financial decisions for your new life.
To find one, start simply. Ask friends or acquaintances who it was that helped them when they went through a divorce. The attorney who handled your divorce may also be a good source for a referral. It’s important to have someone help you who has previously assisted or – best of all – who specializes in helping divorced women.
Selecting the right financial professional for you is a critical step. After all, this person will be helping you with the important financial decisions you now have to face.
Long-term care insurance may become even more important post-divorce.
Long-term care policies are designed to cover the costs of care if you are unable to care for yourself because of age or if you become ill or disabled. Long-term care is especially important for women because they typically pay more for it than men do. The reason is simple: women typically live longer than men and usually require longer care during those additional years.
A woman’s retirement is usually more expensive than a man’s.
The reason that women usually need long-term care insurance more than men is the same reason that retirement income planning for women may be more important. Women live – on average – 5 to 10 years longer than men. Eighty-five percent of people over 100 are women. This means a woman’s retirement savings must, on average, be stretched out over a larger number of years
While, in general, retirement planning for a single person is easier in many ways than for a couple, remember … you can no longer rely on a spouse’s financial resources if a mistake is made. It’s important to review your social security estimates, any pensions you have and your retirement assets. You can then compare that to the kind of lifestyle you would like to have during retirement.
Because retirement may be more expensive, you may want to make an employer-sponsored retirement plan a larger deciding factor in any job search. Also, you may decide that you must retire at a later date than you had originally planned.
People often forget to update the beneficiaries of their life insurance and retirement accounts after a divorce. If not changed, your ex-husband may stand to inherit a large portion of your assets. Also, the estate laws give certain breaks to married couples that are not available to a single person. Establishing the proper type of legal trust may be a way to pass along more of your assets to your heirs, rather than to the IRS.
Finally, after you have moved on from your divorce there may come a time when you consider remarriage.
It’s important that you understand the financial effects this may have. If you were married longer than 10 years you may be collecting or entitled to 50% of your ex-husband’s social security benefit. If you remarry you will no longer have that right. While you will become entitled to your new husband’s benefit, you must know if your new husband’s benefit will be lower or higher, and how that will affect your retirement.
Remarriage can also lead to blended families, blended assets and blended income. Your new husband may have his own family from a previous relationship. A financial professional can help the two of you prepare for this blending that satisfies the financial needs of each of you, as well as your new family.
While it’s all in your hands, partnering with a financial professional can help you move on to the next phase of your life with a more solid plan for your financial future.