MoneyWiseWomen

What's Forbearance?

Last week while I was doing research for my Money Wi$e Women Get Smart teleseminar with Emily Peters (Credit.com) on Eliminating Credit Card Debt I discovered the forbearance program. I was unfamiliar with forbearance, but Emily told me it's been around a long time. The program is being utilized more because of our challenging economic times.

Staying in is the new Going Out

By Dr. Bonnie Eaker Weil

I'm seeing a few positive changes already coming out of the financial crisis our country is facing: people are being forced to learn how to re-connect with their partner, loved ones and family. Hopefully these are skills they will take with them once we emerge on the other side of this economic hardship.

We have to talk about money. Money is often a bone of contention in many relationships and it's not necessarily that this has changed – in fact, monetary discussions may become more intense now that even more is on the line – but sweeping it under the rug is no longer a viable option. We need the right tools in order to do so, but with proper techniques, our financially-focused discussions can be more useful than ever before.

We're learning how to connect. Most career-focused people know how to make money and how to create successes for themselves. If you strip that away, we're learning that family and relationships are important now more than ever.

Additionally, because finances are tight, we're getting creative. We're focusing on the simple things like cooking together and sitting down to eat together, we're tuning in to our partner and families, we're watching a movie at home instead of going out.

We're working as a team. Don't let this financial crisis divide you and your partner, but rather use the discussions you're having, the time you're sharing to solidify your relationship. Look at it as you and your partner (family, etc.) against the financial infidelities of the world!

Dr. Bonnie Eaker Weil has been an internationally acclaimed relationship therapist for thirty years. New York magazine named her one of the city’s top therapists and Psychology Today named her one of America’s best therapists. Her most recent book, Financial Infidelity, is available on Amazon.

Home Based Business Tax Deductions ~ Save Thousands!

Tax time is rapidly approaching.  Do you have a home based business?  If not you really need one.  You can have a home based business for as little as $15 a month ~ Really!  And the tax savings are significant.  Learn more by Ron Mueller, recognized IRS Tax Expert at www.TaxDeductionsForHomeBusinesses.com.

If you don't already have some type of small or large home based business.  Ron can teach you all you need to know about what qualifies for a tax purposes with a very simple way of keeping track to save you thousands of dollars.  Get yourself set up this year and use the savings for a well deserved vacation or something of value to you...:-)

Ron's book, Home Business Tax Savings ~ Made easy! is such a good book, easy to follow and bargain priced.  Plus you will probably discover some good tax deductions you may be able to use for 2008 taxes whether you have a home based business or not.

Abundant Blessings for 2009!

Suzanne Kincaid 

Whom Can You Trust To Tell You The Right Thing To Do?

To date, the S&P 500 index of large-cap stocks has lost more than 40% since November 2007, and about $2 trillion in value has disappeared from investors' 401(k)s and IRAs, (according to the Center for Retirement Research).  There have been four other occasions since 1926 when the market has fallen at least 40% (most recently from 2000 to 2002), however, I understand that in the midst of this economic climate, it’s extremely difficult for the individual investor to take a long-term approach to her investment portfolio, much less care about a historical perspective.

More than ever, qualified, professional objective advice may be the key to consumer sanity.   I’ve found that the most difficult thing for an investor to do in a market like this is to sit tight and weather the storm.  The knee-jerk reaction is to get out of the market, which may be the most damaging thing a person can do.

There are many, many options for an investor that fall somewhere between “all out” or “all in”, and that may take into account any modifications to investment holdings, asset classes, diversification and rebalancing—which I am told sounds like a lot of mumbo-jumbo if you’re not a finance geek.  Therefore, you may need some sort of professional finance geek to assess your situation and help you make the right decision. 

I have issues choosing a person to cut my hair; I can’t imagine choosing a professional for something as convoluted as investing (if I weren’t already a finance geek myself!).  So, as you search for that perfect financial planner to guide your portfolio to short-term prudence and long-term growth, consider the following factors:

Never settle for being treated like anything less than a three-dimensional person.  If you’re going to trust someone with your money, you need to feel confident that person understands everything about you, from your current situation to your long-term goals.  If you don’t think you could relax and have a conversation with this person and actually understand everything s/he has to say, then that advisor probably isn’t the best choice for you.

Incentives matter. Nearly everyone I have met in the financial services industry believes they are a very ethical person.  Now, I’m not saying there AREN’T very good, ethical advisors out there, and I believe that it’s okay for people to make money.  However, the consumer must always be cognizant of the fact that, as long as money changes hands, advisors have incentives to earn money from your wealth.  Stay vigilant, always question those incentives, understand HOW your advisor gets paid, and monitor your investment fees.

Understand your investment strategy.  Regardless of whether a financial planner recommends a strategy or you decide to come up with one on your own, err on the side of simplistic.  There is a strong relationship between a sophisticated investment strategy and low returns. When it comes to investing, the KISS principle (keep it simple stupid) really works.  And, if you can’t understand what your financial advisor is recommending, it’s probably too complicated.

Never completely trust anyone with your money. This is a corollary to understanding the strategy. Keep your advisor on her toes and keep asking questions. Trust any advisor enough to listen, but never to follow blindly.  It's a recipe for disaster.

If an investment looks too good to be true, it probably is. Beware of promises of high returns without risk.  One of my favorite advisor “tricks” is the review of Morningstar reports in conjunction with a portfolio.  Morningstar is great when you understand how it works.  Morningstar rates funds on historical performance . . . so there is always a chance that you have a portfolio of 5-star funds that completely tanks (because historical performance doesn’t guarantee future returns) or, you bought at a high point and the fund may have a positive return, for the year, but you personal holding period return is negative.  So, Morningstar might give you great information that is completely unrepresentative of your investment.

Financial advisors are not all above average, so beware of the advisor who starts quoting their personal asset management rates of returns—meaning, what they say they have done for their clients’ portfolios in prior years.  In a market that is almost completely "professionally invested," I have yet to meet anyone who considered themselves a “below average” money manager.  It's easy for them to claim they are beating the market if they don't have to show their actual results (see Morningstar example above).

Ignore the experts. How many of those TV gurus actually predicted the 2008 market plunge? They were all wrong, wrong, wrong, yet still we watch them.  Investing success is all about seeing the big picture despite the market's noise. Daily financial media, on the other hand, are all about creating noise. It's their job to treat every blip in the Dow as if it had deep meaning, despite reams of research showing daily stock moves are random or, at best, ambiguous.

Above all, find someone you can trust to be your sounding board.  This person should be a level-headed, non-judgmental person who you can count on to give you a reality check when you feel yourself succumbing to investment panic.  This person doesn’t need to be a financial planner; s/he might be your mentor, your mom, your coworker . . . whoever you know you can rely on to help you keep a level head when you feel like yours is about to explode.

Should Women Emulate Men to Succeed in Business?

According to a recent article from the United Kingdom exploring this topic, the answer is “no.”  Trying to “fix” women so they can perform better in male-dominated environments isn’t the right approach.  Instead, their recommendation is to make businesses more attractive to women and to enact a much more sweeping cultural overhaul.

And according to the authors, the typical first response of companies to “help” women by launching women’s networks and sending them to leadership development programs is not enough.  They believe integrating women into organizational leadership will require a significant shift across all areas, beginning with recruiting.

 

Additionally, the article provides some tips to help businesses successfully execute this cultural change:

• Men must play a central role in the changes needed
• CEOs must be convinced and committed to this as a strategy for their company
• Middle managers need training in the “differences between male and female career cycles, ways of communicating in the workplace, and consumer preferences”
• Companies need to root out unintended bias in their recruiting, reward and promotion procedures

States Niall FitzGerald, chairman of Reuters and former head of Unilever, “Women should stop feeling they have to be like men to succeed like men.  Remain yourselves and encourage new patterns of male behavior.  We can’t make the future happen unless women help the men to adjust.”  I couldn’t agree more.

 

You can do it!

Lisa Quast

Career Woman, Inc. - "Your Future, Your Way"

www.careerwomaninc.com

Reducing Your Spending Without Feeling the Pinch

I recently received an email from a woman who shared how her family reduced their spending while still maintaining their current lifestyle. Here's what they did:

 

We called the insurance agent to discover that earthquake insurance requires a 10% or 15% deductible. In our case, that would be a $60,000 deductible before the insurance started paying. Since FEMA pays the mortgage after a catastrophic event, we could gather what was left and walk away - unscathed financially.  We'll save about $1,000 a year.

 

I suggested that we turn off Dish Network, which I knew my husband would never go for. But he did collect junk mail from competitive companies and gave them a call. Currently, Dish Network and Fisher Broadcasting are at an impasse, and Dish Network cannot air KOMO Channel 4 programming. When he did call them, they reduced the monthly rate saving us about $120 a year.

 

Then, I suggested that we turn off the land line telephone. Everyone under this roof has a cell phone, we simply don't need to spend the $25 or so a month. Our internet service is also attached to the land line because my husband works from home. His company pays him $40 a month for internet, and after it is taxed as income, he has $35 a month for service. So, he called Qwest and told them to cancel. They offered six months free internet service, if we kept the land line. So, now we are making about $10.00 a month.

 

There are always ways to pinch pennies, if you are looking for a way.

 

Warmly,

Marcia Brixey

 

What's your Confession?

By: Dr. Bonnie Eaker Weil

In “Confessions of a Shopaholic,” the main character has a spending problem – as most true shopaholics do. It's a fun, girly, light-hearted movie, but the premise at the center of it is anything but a laughing matter. As the economy continues its downward spiral now more than ever many of us need to save, but these are also the times when we're most likely to fall into deceitful behavior, or financial infidelity. We know that spending money on that purse or those shoes – or any one of a number of things – isn't a good idea, but we're drawn to do it anyway. And when we do it, we're drawn to cover it up.

Be Honest about your Money

By Dr. Bonnie Eaker Weil

Throughout my practice, I've dealt with people who – for various reasons – keep issues of money and finances secret from their partner. This can manifest itself in different ways -from spending behind the other person's back to no disclosing the fact that you're keeping money for yourself, to having “secret” bank accounts or credit cards. Now that times are more economically difficult for many, it's more likely that these types of behaviors could crop up – and more important than ever to stop them from doing so!