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August 28, 2014 / 2 Elul, 5774
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Posts Tagged ‘personal finances’

Three Reasons to Use a Money Manager

Thursday, May 23rd, 2013

Are you looking for a diversified portfolio and to have the final say on your investments, but you don’t have time to research the many stocks, bonds, and funds that are out there? If so, it might be time to call your financial advisor and ask him to find you a money manager.

If you already have a financial advisor, why do you need a money manager?

Whereas a financial advisor helps you plan your retirement, a money manager, which is often a professional investment firm, handles the day-to-day transactions in your portfolio. The focus is somewhat different and more specific, and very often both professionals work together.

Here are three reasons why a money manager is useful:

1. Take the headache out of investing

While you may be happy to have more of a say in your investments, you don’t necessarily want the headache that goes along with managing them on a day-to-day basis. In your everyday life, you don’t have the time to sit down and pore over market reports, charts, and other relevant information. And even if you did, unless you are a part of the financial world yourself, you would probably find it hard to interpret them correctly enough to benefit your situation. For this reason, it’s worthwhile to use a money manager, whose extensive knowledge and resources are now at your disposal.

2. A money manager can give you more of a say

A money manager can put your money into an SMA, or separately managed account. Once upon a time SMAs were strictly for the very rich, but they can now be opened with a starting sum beginning at $50,000.

Unlike a mutual fund, where you own a part of the fund controlling your investments, an SMA gives you the opportunity to become an actual owner of the stocks that are in your portfolio. This is more direct, and it gives you more of a say. Directly owning the individual shares (as opposed to owning shares in a mutual fund) can be beneficial when selling for tax purposes.

Learn more about SMAs and if they might be appropriate for you, by watching a short movie.

3. Widen your horizons

The great thing about using money managers is they provide you with greater financial resources than if you were on your own. Many money managers follow a policy of “open architecture,” which means that there can be a wider variety of investment accounts than in the average mutual fund. And with all of the information and expertise at their fingertips, a money manager can help you to build a portfolio that is more tailored to your specific needs, with the right balance for you of large cap or small cap stocks, bonds, or foreign stocks, and more.

To find out whether you need a money manager or an SMA, call your financial advisor today.

Are Commodities Really Hot Stuff?

Monday, May 13th, 2013

In the first half of this week’s podcast, Doug meets Jim Rogers, the author of Street Smarts – Adventures on the Road and in the Markets. Jim is also an author, investment expert, and financial commentator who has appeared in various publications, including Time, The Washington Post, The New York Times, Forbes, Fortune, and more. Jim tells Doug about investing in commodities and why it is advantageous to invest in what you know. Find out more by listening to this interesting podcast.

What Everyone Should Know About Banking and Finance

Monday, May 6th, 2013

This week, meet Michael K. Salemi, professor emeritus at the University of North Carolina-Chapel Hill. His many writings include Money, Banking, and Financial Markets: What Everyone Should Know.” What do you need to know about your finances and the world of banking? Find out by listening to this week’s show.

Stop Losing Money as an Emotional Investor

Thursday, May 2nd, 2013

One of the reasons why many investors fail in their investments is because they are driven by their emotions. This problem is studied by academics who specialize in an area known as behavioral finance.

People make decisions for all sorts of reasons, but when you make an investment decision based on emotion, not fact, you stand to lose your head, heart, and pocketbook.

For example, sometimes investors hear some positive news about a certain stock and they rush to buy it simply because they feel good about it. They haven’t necessarily researched its individual merits, or checked it against their financial plan to see if it fits with their overall investment goals. They just make a sudden investment decision.

Have you ever done that?

Many investors are driven by fear or excitement, and in both cases their surging adrenaline may help them in a “fight or flight” situation, but not with their investment portfolio.

If an investor is too fearful, he could end up either selling a stock needlessly or not developing his investment potential enough. But sometimes investors don’t have enough fear and they become the victims of Ponzi schemes and other scams.

I recently spoke with Professor Meir Statman, author of What Investors Really Want, on the Goldstein on Gelt show, and I asked him why he thought people let their emotions get the better of them. He replied, “People follow their intuition, and their intuition says that they can tell the difference between honest people and dishonest ones. Dishonest people take advantage of precisely that.” (Click here to hear more of what Professor Statman has to say.)

In the ideal world, investors have the time and resources to take a step back from their emotions and properly research financial moves. But in the real world, who has the time, financial background, or desire to educate themselves properly before making rational investment decisions?

What’s the solution for avoiding the pitfalls of emotional investing?

Find an effective and reliable financial planner. A financial planner has the knowledge and background necessary for researching and assessing various investments and finding out which ones are the most appropriate for you and your financial goals. For this reason, it’s worthwhile taking the time and calling your financial planner today.

Having an objective certified professional oversee your investments is the best way to prevent yourself from falling into the trap of emotional investing.

Three Things to Know if You Win the Lottery

Tuesday, April 30th, 2013

What would you do if you won the lottery? What does a sudden injection of money, such as winning the lottery or getting an inheritance, really mean?

  1. What does Mr. Tax Man say about it?

In the real world, money doesn’t just belong to you. Whether it’s sales tax on your purchases, income tax on your earnings, or capital gains tax on the sale of an asset, tax is paid on the majority of transactions. So the first thing you would need to do is find out whether you are liable to pay any taxes on receiving your windfall, how much, and what this means. Once you know this, you’ll have a much better idea of how much money you really have at your disposal.

  1. Having money isn’t all about spend, spend, spend

Now that you have some money, your goal shouldn’t only be to spend it as quickly as possible. Take the time to create a financial plan and figure out whether this windfall is really “extra” money, or is needed to make sure you can retire comfortably and fulfill your other financial goals. Perhaps receiving unexpected funds means that you won’t need to save as much (thereby improving your current lifestyle), or you can now leave a larger inheritance, or support a philanthropic project.

While it’s tempting to spend your windfall, don’t forget about savings. No matter how young or old you are, you need to think about retirement at some point in your life. Get objective advice about the investments and savings plans that are best for you, given your age, your income, and your personal situation, by calling your financial planner.

  1. Take it easy

News of your lottery win or unexpected inheritance is sure to spread and your telephone is going to start ringing. Be careful of who you take advice from and who you give gifts to. Relatives, acquaintances, and people you’ve never even heard of are suddenly going to remember who you are and bombard you with lots of advice and possible uses for your new found wealth.

Don’t rush to do anything. Let all the excitement and novelty die down first.

If you make your financial decisions based on logic and information, not on thrills and emotion, you’ll find that your sudden gain has made you into a real winner.

How to Prevent Fraud Crimes Against the Elderly

Monday, April 29th, 2013

Why do senior citizens, who have so much life experience, fall prey to fraud schemes so often? And who would be heartless enough to con an elderly grandparent? On this week’s Goldstein on Gelt show, Doug Shadel, senior director of Washington’’s AARP and a leading expert on fraud and the elderly, explains how you can protect yourself and the people you love most from scams and cons.

Are You Rich Enough to Make Aliyah?

Thursday, April 18th, 2013

How many times have you heard people say, “I could never make aliya. It’s too difficult financially”?

Well, now there is one less excuse.

There are the standard financial pluses of living in Israel: the Israeli unemployment rate is lower than in America, day school tuitions are cheaper, and you don’t need to use personal vacation days for the chaggim.

While there are many benefits to living in Israel, there are some financial challenges, particularly around tax-filing time. While Americans living in Israel have an obligation to file with the IRS, Israel and America have a tax treaty between them, according to which if you pay taxes in Israel and also owe them in America (since America taxes her citizens on worldwide income), you can take a tax credit on your American taxes for what you paid to Israel.

In addition to filing U.S. taxes, American olim must file FBAR forms and they also may be responsible for filing under new FATCA requirements.

Confused? You’re not alone. But if you used this confusion as an excuse not to make aliya, your excuse no longer holds water. A new book can help you.

The IRS recently implemented FATCA, and Uncle Sam wants you to file your American taxes (in addition to your Israeli taxes) and FBAR form, but before you start to get too worried, there are solutions. For starters, get a copy of my recent book, The Expatriate’s Guide to Handling Money and Taxes? As a financial adviser with more than two decades of experience helping Americans abroad handle their American brokerage accounts and deal with the problems that arise from living in dual currencies, I wrote the book with the help of various leading international tax lawyers and accountants.

Just as you would extensively research communities, ulpans, schools, and jobs before moving to Israel, learn what your tax obligations to the Old Country will be when you are offshore. This should make your transition easier, as you won’t have nightmares about the IRS demanding a share of your new salary.

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/are-you-rich-enough-to-make-aliyah/2013/04/18/

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