Privacy, Social Media and You

In April 2018 Facebook’s CEO, Mark Zuckerberg’s admittance of Facebook user’s data used by Cambridge Analytica in our last presidential election has caused an emotional reaction in Americans and lawmakers alike.  Zuckerberg admitted that controls to prevent such a leak were not in place and that, he too, believes social media will need to be regulated in the future.  To avoid your social media profile from being used for personal or political gain-by those wanting control-what will it take to ensure personal privacy and protection of your sensitive personal data going forward? 
With this specific instance, information was obtained by the downloading of third-party apps onto the personal smart phones of unsuspecting legal age voters.  Because Facebook operates in an unregulated industry, no foresight had been given to notify those whose personal information was being used for political purpose- until the story leaked to the media and was made public. 

With the sharing of personal information-sometimes by the person themselves-where does that leave privacy and personal information when it comes to your investments?  The financial services industry operates under the regulation of the Federal Government (the SEC) and FINRA, which has required each financial company to develop protocols for transparency and notification to customers if or when their information compromises.  Aside from technology in place to protect financial customer information, the customer must also play a role in their own personal privacy. 

To help you to determine if you may be compromising your privacy and personal information:


Review your social media profile and ‘turn off’ public view of your information such as date of birth, contact information, and education and employment information.  Limit this information, along with photos, only to connections. You may want to eliminate personal information from your profile completely. 
Use Apps only from financial companies you do business with and don’t use apps that aggregate access to all companies through a third party app-especially if they’re not a financial company.  Compiling online access to multiple companies through one app source puts you at risk for all your financial passwords and profiles.
Be aware of what you’re putting on the internet each time you ‘like’ or comment on a social post.  Artificial Intelligence captures your reaction for ad targeting-which is what happened this past election.  Those that commented or ‘liked’ posts were the recipients of more targeting; certain geographic areas were targeted during the 2016 election.
Lastly, have varied login and password credentials for each account you have-from the electric company to your retirement accounts.  Do not use the same information since if one is compromised they may all be.  We leave our digital path on the internet each time we login if we are not logging in and out securely each time with different credentials.

 

Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Is Early Retirement a Reality?

We all desire the flexible lifestyle, to not work or work when we want.   Wouldn’t it be great to spend more of our lives not working than working?  There have been countless financial plans created with this target in mind, but it may not be reality to stop one’s career before reaching the full retirement age Social Security has set for us. 

Early retirement won’t be an option for many as most American’s haven’t saved enough for retirement-and may never.  The median retirement savings balance for US adults aged 56 to 61 is $17,000 according to the Economic Policy Institute.  That’s not even enough to cover a year’s worth of food and utilities in retirement! 

What could we be doing better to increase the possibility of more American’s having the ability to retire early?  Saving!
You may be preparing to retire early or on time if you’ve been saving consistently and planning.  If this is your situation, congratulations!  To be sure your early retirement is a reality, consider these facts:

  • Leaving the workforce before full retirement age (according to Social Security) stops 401(k) contributions, Social Security Accumulation, and employer health insurance benefits.
  • Drawing pre-tax retirement savings before age 69 ½ results in an IRS penalty, further depleting your savings.
  • Health Insurance will now become your responsibility to pay as you are not eligible for Medicare until full retirement age.  Even when you’re able to use Medicare, it doesn’t cover everything, and you still need to pay for additional coverages like dental, vision, prescription, and a percentage of costs for all medical service.  Medicare is not that great of coverage- ask a retiree!

Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Tariffs, Trade Wars, and Your Investments

Since President Trump announced his intention to impose tariffs on all countries the stock market has been reacting-based on investor concerns in reaction to the media.   All indications at the time of this writing are that the tariffs would be applied to all countries, although that remains unknown. This development has risen the speculation of a trade war with the US’s major trading partners including the EU, China, Canada, and Mexico. Trump has softened his stance by indicating that countries that treat the US fairly would get relief from the tariff, although that remains unknown. A global market doesn’t avoid harm from strategic targeting of tariffs; international fallout may follow.

But is the possibility of a trade war and tariffs on imports really as dramatic as it sounds? Consider that the relationship between the US and its trade partners is quite frankly, lopsided. The US imports 4 times more than it exports to the trade partner countries. Political retaliation from other countries toward the US can negatively impact imports coming into the US resulting in increased costs on items such as clothing, food, and lifestyle items such as electronics. Agricultural exports will suffer additionally after experiencing a decline the past two years. We can only assume we are in for a bumpy ride if this ‘tariff talk’ continues.

The US may stand to benefit from buying more goods from its own home-based companies if imports become too expensive. Although certain imports are deemed necessary, such as food not grown in our climate, is a trade war stand-off enough to bulletproof the US economy? For now, the trade war and tariff talk is merely a war of words as the proposed tariffs will not go into effect until June 2018. 

Factors to consider:

  • Tariffs and trade wars typically lead to higher inflation and lower economic growth which has a negative impact on the markets.
  • While trade restrictions will create headwinds for the equity markets, ultimately it is high valuations that have a bigger long-term impact.
  • Inflation protection strategies should benefit from potentially higher inflation if this policy shift does materialize.
  • Limited duration of fixed income should buffer from rising rates driven by higher inflation caused by these policies.

These factors may not apply to all investors which is why we welcome your questions regarding your portfolio and how it may impact.

 

 

 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Fiduciary Financial Advice

One thing that has plagued the financial services industry is ‘trust’ of the industry.  Unfortunately, there are many reasons that some people have developed a distrust of financial companies and the individuals that work for them.  It may be due to the media, entertainment (movies), or a personal situation that has happened in the past.  When advisors work with clients, they take on the role of a Fiduciary, which involves acting in the best interest of all clients. Serving as a fiduciary helps clients reach their financial goals.  

Working within our business model, we take ‘fiduciary relationships’ seriously.  A ‘Fiduciary’ is a company or a person who holds a legal or ethical relationship of trust with one or more parties (person or group of people).  A Fiduciary has a legal responsibility to take care of money or other assets for another individual.  Part of being a fiduciary and working with clients involves transparency, full disclosure, and 24/7 access for clients to have all relevant information regarding their assets at any time.  It also includes giving clients information that advisors have access to prior to making an investment decision.

Part of the ‘distrust’ that has plagued the industry can be summed up with the storylines of two movies, The Big Short  and The Wolf of Wall Street in which clients are taken advantage of for a ‘salesman’ to profit.  Unfortunately, this happens in real life when there is no disclosure and no ‘fiduciary standard’ enforced at the firm, or by the individuals working for the firm.

Our processes are client-centric, and based on a conflict-free financial advice model.   We welcome your inquiry, as well as you questioning and understanding our advice as we work with you.

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

The New Senior Safe Act: S$A Provides Immunity for Reporting

On May 24th, 2018 President Trump signed The New Senior Safe Act into federal law, encouraging financial professionals to report senior financial abuse. Since financial advisors and bank employees are usually the first to witness clients making money withdraws that are not common, the law rewrites protocol and protection for those that report abuse. The old law left loopholes citing ‘customer privacy’ when reporting to authorities the suspected fraud. Bank employees and financial advisors had their ‘hands tied’ even if reporting was in the client’s best interest; previously reporting suspected financial abuse or fraud required obtaining the client’s permission to report it.

The new S$A Law moves the reporting to the federal level, over-riding the 25 states that still have customer privacy laws preventing the financial professional or company from reporting without client consent. Although not a mandate, the new law encourages and protects the individual reporting abuse or fraud from scrutiny or termination by their employer due to company client privacy rules.

To have protection under the new law, the financial company is required to have a training program that addresses identifying, documenting and reporting protocol. The new law is a positive step in protecting financial professionals and their employees as well as financial clients. Since most seniors view their financial professional as someone they can trust, many disclose information about a person, transaction, or scam unknowingly to the professional, who now is in a position to help stop it. Regular conversations with seniors about their finances may reveal abuse or concerns they have about a family member or friend asking for money.

The most common ways scammers get to seniors is through telemarketing (phone), the internet, or through personal contact of a stranger forming a new ‘friendship’ with the senior, or through their family member. As people age, their ability to decipher fraud becomes less likely to happen, making them easier targets.

If you or someone you know has concerns they may be a victim of financial abuse, contacting your local law enforcement is encouraged and working with a financial adviser you trust is a must. Call our office today to schedule a complimentary portfolio review. 

Understanding Credit Utilization and Its Impact on Credit Scoring

Credit scores are used in our country as a method to determine an individual’s financial responsibility. The three-digit credit score means more than just the possibility of fiscal responsibility to the lender. They are part of a formula called credit utilization. Understanding how your ‘number’ fluctuates regardless of making payments on time, can help you get more from your credit score. 

It is possible to make payments on time and still have a low credit score. Your credit utilization ratio is the relationship between your credit balances and your credit limits, expressed as a percentage. It is a measurement of what you owe against your overall ability to borrow. Simply put, if you have credit limits that are the same as your credit balance, regardless of consistent and on-time payments you will have a lower score.

One thing to remember about credit utilization is that it calculates at the specific time your available credit determines, which is once a month shortly after the statement closing date on each of your accounts. Credit Utilization is all about the timing of the information relayed by the credit issuer to the reporting agencies.

Tips to ‘Beat the System’ of Credit Utilization:

  1. Keep Balances 30% below the credit limit each month even if you pay it off monthly
  2. Don’t make minimum payments-double or triple payments if you can’t pay off the entire balance
  3. Remember FICO Calculates a score using credit utilization from 30%-Amounts owed, 10%- Types of credit in use, 35%-Payment history, 10%-New Credit, and 15%- Length of credit history

The lending business-which can’t survive without borrowing to consumers-has found a way to score probability (credit utilization) in a way that is not always in the consumer’s favor. So how long can credit utilization hurt your score? The answer is as long as it takes you to pay off your debts.

If it takes you years to eliminate your debt, it will take years before your credit score improves. However, paying off accounts with lower balances first while working toward paying off larger balances will help you improve your score almost immediately.

The Best Strategy for Preserving Wealth

How did you learn to manage money and understand the value of investing? Did your parents relay to you what they knew about money or did you read books on budgeting and investing in figuring it out yourself? The reality is that many of us did learn through trial and error. An alarming statistic is that in the US only 14 states require a class in personal finance and 20 states require a class in economics to graduate from high school. If you aren’t teaching your family about money management and investing, they aren’t getting it. One of the ways families maintain wealth and pass it to future generations is through financial literacy. Financial education will preserve the wealth of the current generation and onward if you adopt it as part of your family’s legacy to educate versus becoming a statistic.

If you don’t consider yourself an expert in financial literacy, we would like to help take some pressure off of you. Understanding how money works and learning to resist the temptation of spending more than one earns should start at an early age . Even children at a young age understand their purse or wallet being empty and not being able to buy a treat when they go to the store. Not giving in when they have no money and purchasing it anyway doesn’t teach them anything. Even in a crowded store with your child throwing a temper tantrum, some lessons will last their entire life, if you take the time to teach them.

How do you start the conversation with children? By asking them what they think investing is, naming types of investments, and what they want to learn about money and investing. Teaching concepts and terms related to investing, its importance, and managing their money is part of the conversation. If you think about it, this is very similar to how we start the discussion with adults after our initial meeting; what do you know about investing, why is it important to you, and how should we invest so that you can live a more fulfilled life?

Focusing on the importance of math, giving the next generation a look into the world of investing starts with basic Finance 101; the bank accounts for spending and saving, brokerage accounts, and the ‘why’ behind investing. Children don’t always equate that an investment can be anything from a house to a brokerage account being used to save for retirement. If we give our children the basics of money management, we help them develop the best strategy to preserve their wealth, the wealth of their children, and so on. There’s no better strategy to preserve wealth than financial education for this and the next generation.

 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

The Second Half of Life – Discovering Your Passion

At some point along your life’s journey, you might find yourself at a crossroads looking back thinking, “Is this it?  Is this all there is to life?” while considering the path ahead of you. It can happen at any time- you’ve spent your life building something that has taken all your blood, sweat, and tears and you realize you’re looking ahead to the remainder of your life and pondering how you will be remembered.  For many, this is the impetus for a life change- not the money they accumulated or the business they built, but what they intend to do with the years they have left, and what legacy they will leave

As a society, we tend to focus on the first half of life and not the second half, which many times can become the most fulfilling.  The first part of life is filled with plans, projections, and goals to get to the next phase of our business (or life). It’s easy to become consumed with what you need to do to achieve success, but the joy often fades when success comes.  Sometimes the more successful one becomes, the harder it is to find happiness and fulfillment.  Success and money suddenly aren’t as compelling as they once were.

When people discover their passion, sometimes they realize that all of the successes and skills gained and wealth accumulated, can be used to better the lives of others, and ultimately the planet.  Bill and Melinda Gates, The Buffet Family and other successful entrepreneurs have been inspiring examples of prioritizing higher causes and donating significant wealth during their second half of life.  For these individuals, it has become their focus to create something impactful, lasting, and personally fulfilling instead of just retiring with a pile of cash.

You alone have to decide if your life goal is success or significance- it’s your life.  It takes opening your eyes, looking inside yourself, and determining if you’re happy with the life you’ve created.  If you’re not satisfied, commit to discovering your passion, whatever that may be. Saving for your second half of life is essential, but so is having a love for it. 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Positive Impacts of the Financial Crisis

The financial services industry is still recovering from the effects of the financial crisis.  Positive impacts from the crisis include new regulations and clients taking an increasingly active role in their economic destiny.  Reinforcing this is that all participants—financial advisors, clients, and regulators—are all welcoming the greater transparency and convenience that new financial technology (FinTech) is bringing to the relationship.

Another positive of the crisis is that it has created new client experiences and a new role for financial advisors. Clients are now in charge more than ever and know what they want and expect.  They demand real-time information in everything they do, whether it be shopping or accessing investment information. The smartphone, in particular, has facilitated this. Investors clamoring for transparency and technology helps create a new, more empowered investor.  Financial firms that do not address these changes run the risk of losing their clients. 

Today is a pivotal time for an industry that was previously shrouded in secrecy before the financial crisis. Today, financial intelligence—through transparency and more high-value advice—is the only way that the financial services industry can survive.  Online access and portfolio automation have allowed clients full access to their accounts and greater insight into its workings. This gives investors more piece of mind and a longer-term view of their goals while allowing the advisor to be more strategic with their advice. 

FinTech helps the advisor focus on the role they should occupy—the giver of financial advice.  This advice takes into consideration the whole client, their evolving situations, values, and expectations.  With transparency and technology at the forefront, a higher value relationship between the client and their advisor is happening.  Time is not wasted on administrative tasks since technology takes care of the heavy lifting. Clients have full access to update information and make changes themselves, with technology notifying the advisor.  

With regulatory changes after the crisis and the new technology developed by startups and financial companies, there isn’t a better time to be an investor or a financial advisor.  FinTech tools are available to us to see the real-time performance and plan accordingly to an investor’s ever-changing situation. We encourage all investors to take an active role in their financial lives by discovering and using the technology tools available today and the new tools in the future.

 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Questions Every Investor Should Ask Their Adviser

Many investors evaluate not only their portfolio performance but also their relationship with their financial advisor from time to time. Many times people base their evaluation of their advisor on their portfolio performance, but there are other components to consider. Asking these questions can help you determine if you and your advisor are mutually aligned:

Question #1: Are you a fiduciary? 

A fiduciary has a legal and moral responsibility to take care of your assets and act in your best interest. A fiduciary is a financial advisor (person) who receives compensation for the management of your assets and the financial advice they give.

Why is this important? There is a critical distinction between being a steward of a client’s assets vs. pitching products to generate a sale. 

Question #2: What fees do I pay?

There is no such thing as an investment that doesn’t cost you anything.  You should always ask so that you know what you’re paying for. 

Fees that are a part of the assets under management include fund management fees, portfolio management or asset-based fees, platform fees, charges on commissions, trades, M&E fees, and rider fees. All costs associated with your portfolio are dependent on where the funds sit. We welcome your inquiry on what your specific fees are for each fund in your portfolio.

Question #3: How are you compensated, and by whom?

Advisor compensation can be very complicated when it involves commissions. Many times there is compensation for advice as well that may not include commissions. In reality, commissions are usually how an advisor makes their income, by selling you investment products. The commissions are paid to the advisor who sells you a product from the fund-company or broker-dealer; if they don’t sell you something they don’t get paid.

Understanding advisor compensation is essential for determining an investment’s true cost.

Question #4: Where do my portfolio and investment recommendations originate at your firm?

Many times when you purchase investment products, the product itself sits with the broker-dealer or at the wirehouse. Sometimes the firm, not the advisor, often is responsible for creating portfolios. The recommendations advisers give you in these circumstances originate from the broker-dealer or wirehouse based on the portfolios they’ve designed. There may be other recommendations or products that ensure the client’s portfolio meets their situation, timeline, or risk tolerance.

Question #5: Who handles my account?

Depending on your situation, your account may sit at a broker-dealer or with a wirehouse. You may need to have one person assist you with one transaction while another helps you with something different if you rely on customer service if you don’t work directly with a financial advisor.

In other business models, the advisor will focus on specialties they each have. They will help you because each client is a client of their firm.   You have access to each member of their team depending on your circumstances, which may change from time to time and require individualized help or advice.

Asking questions of your adviser is your right; after all, they work for you. If you have questions about our relationship or your investments, please don’t hesitate to ask. We’re always here to help. 

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