Washington Informer

In order to fall under the umbrella of the "financially responsible," most people know they need to start financial planning early, keep a diversified portfolio, and stave off debt. However, despite best intentions, these goals are not always easily accomplished. In most cases, the culprit is simply life getting in the way. Car repairs, home improvements, and unexpected job losses all seem to come together to put a kink in even the most well-laid financial plans.

To keep yourself closer to the financial finish line, there are a few common financial pitfalls you can avoid. Although you may fall short of the goal from time to time, knowing where you stand and where you are poised to land are incredibly valuable in being financially sound for the long term.

Thinking It Is Too Late

The best financial advice taps into individuals in their twenties, when there is little debt, few obligations, and a high potential of earnings. Unfortunately, few of us are ever the financially responsible adults we want to be straight out of college. It's important to remember that no matter where you are on your financial journey – one of the lucky few in their twenties or one of the more common forty-somethings realizing that their savings account just isn't what it used to be – it is never too late to get started saving for retirement or even for a down payment on a home. Doing nothing is the only way to guarantee that you'll have nothing.

Thinking You Have More Time

On the flip side of the coin, you must also do everything in your power to get started investing right away. Although no one is going to berate you for failing to start saving twenty years ago, it doesn't do any good to wait another twenty to get started. It doesn't matter if you have thousands of dollars in debt or are switching jobs for the sixth time in as many years. Meet with a financial advisor right now to learn what your next steps should be.

Not Looking Far Enough Ahead

Some beginners make the mistake of investing money only to realize a few years later that those funds are needed somewhere else. Consider the time frame of each and every investment you make. Few advisors will recommend touching money in the stock market before five years is up, but a money market account or certificates of deposit can turn around quicker than that. You'll also need to remember that most investments do much, much better if they are left alone. Trading in and out of the market or changing your mind frequently can comes with fee or other monetary setbacks. Like a good wine, investments tend to get better with age.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

Divorce and its financial challenges are an issue almost no woman wants to face. After all, during divorce proceedings, not only is a woman considering the financial future of herself and her family, but she's also dealing with the emotional aftermath of the dissolution of a marriage. It can be a difficult time for everyone involved, and a messy financial situation will only make things worse.

Unfortunately, no matter how mutual or cut-and-dry the legal proceedings of a divorce are, there are complications when it comes to short-term and long-term finances. The best thing women can do to prepare themselves is to take financial issues one step at a time, working with an advisor they trust to help them start looking ahead to a brighter future.

After Divorce: The First Steps

Once everything has been divided up, it is necessary to re-title or transfer all of the "big ticket" items, including property, houses, cars, wills, insurance, credit cards, and bank accounts. It's important to get these things out of the way first, since you don't want to be held liable for any delinquent payments or unaccounted spending on behalf of your ex-spouse. The same is true for any issues related to bankruptcy; if there is a chance of either partner filing, it's important to do it either before the divorce occurs or very soon thereafter. That's because it is possible for one ex-spouse's bankruptcy to affect the other's financial situation, since he or she may be held liable for defaulted loans.

Along these same lines, it's important to amend existing retirement plans, including IRAs and 401(k) accounts. When possible, these should be a part of the divorce settlement, since they incorporate a very large portion (if not all) of your financial future as far as retirement goes.

After Divorce: Looking Ahead

Getting your finances settled after a divorce can take years. Not only are most women adjusting to a new home and new income, but many of them are also figuring out how to balance work and child care, as well. This means that you may not consider yourself ready to start planning a savings and retirement plan until five or ten years have gone by and you are on your feet, so to speak.

This is a mistake. Although you might not have the funds ready to start investing right away, it's always best to at least meet with a financial advisor who can help you determine your goals and next steps. Whether you want to set a retirement plan into action or find a way to build a savings account that will give you – and your newly emerged family – some freedom from financial worries, it's always best to start right away.

Although there are rarely very many silver linings to a divorce, it does give many women a chance to start taking proactive control over their future. Sure, it may take a few years before you start to feel settled enough to really tackle stocks, bonds, risk assessments, and portfolio diversification, but divorced women are among those best suited for smart financial decisions – if only because they're being forced to ask the hard questions and take a good look at what they want out of their lives.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

When choosing to invest your money, you want to invest wisely. Unlike saving money, which occurs when you put money away to grow while protecting your initial principle, investing money involves a certain amount of risk to your initial principle in order to generate a return on investment.

Unfortunately, no investment is without risk. A basic rule on investing is "the higher the risk, the higher the potential return." The risk in investment can vary depending on the opportunity and how comfortable an investor is with the risk. And while risk can be a good thing, there are times when you should be wary of the options being presented to you.

In today's financial world, greed is a driving factor for making bad investment decisions. All too often, the idea of quick and easy money is a siren song for the average investor, especially when it seems that everyone around you is cashing in. Of course, investment fads can and have made people money. For example, the dot-com boom of the 1990s certainly made its share of millionaires. However, it's important to remember that more people lost money in the subsequent dot-com bust.

How can you tell if an investment opportunity is a fad? Consider the following traits:

Changing Rules - When the dot-com boom hit in the late 1990s, it was touted as "the new economy," and many people said that it would change economics. It did not and instead went bust, along with many investors' hopes and dreams. Whenever an investment is said to be changing the rules, it is most likely an exaggeration. This means that other aspects of the investment might be exaggerated, as well.

Biggest Thing - If everyone and their grandmother is talking about what a "sure thing" a particular investment opportunity is, do not take their word for it. Where to invest your money is a serious decision and there is no such thing as a "sure thing" in the investment world. Otherwise, everyone would be millionaires.

Experts Disagree - When in doubt, listen to established investment experts. If established experts in the field are not jumping on board with a new investment idea, there is probably a reason. They know the industry better than anyone else, and if they aren't behind an investment opportunity, it's probably not a valid one.

If you think that the investment opportunity that you have found may be a fad, be cautious. All too often, investors can be dazzled by the promises of easy investments with huge returns either instantaneously or within a very short time frame. Be wary of investment opportunities that promise a huge return with little risk over a short period of time. As the saying goes, "If it seems too good to be true, it probably is."

If you are still unsure on whether or not an investment opportunity is a fad, consult an expert on the issue, such as your financial advisor. Your financial advisor can help you make balanced, strategic decisions about your investment portfolio and help you to avoid the pitfalls of investment fads.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

If you don't know how much you are saving or when you will be able to retire, it's time to look at the benefits of setting financial goals. It's important to look at what your future plans are, how much you can contribute to them, and how you plan to manage and grow your wealth. By working with a financial advisor to formulate a plan, you can be secure in the knowledge that your investments are growing appropriately and that you will be able to retire comfortably when you are ready.

Financial Goals in a Tough Economy

The economy is tough right now, and many people are cutting back on their savings and investments. At the same time, with stock prices dropping, many stocks and funds can be had for a very low cost. While no one can guarantee that they will rise in price, a qualified financial advisor can help you to determine you best bets. No matter how much cash you can spare these days, there are investments that you can make that will put your future in good stead. The benefits of setting financial goals don't have to go by the wayside when times are tough. Now, more than ever, you need to stick to your plan.

Visualizing the Financial Future

Now that we are discussing money, what are your goals? Do you want to retire in ten years? Do you have kids to put through college? Do you want to keep working but have the funds to take extensive vacations? No matter what financial goals you have, they take money, and for most of us, that means planning. One of the benefits of setting financial goals is knowing how much to set aside and how to grow it to meet your these goals. Planning how you see your future, however, is the first step.

Another important benefit of setting financial goals is that you get to reevaluate them. As time goes on your needs may change. You may love your job and not want to retire. Your daughter may have a full ride scholarship, and you won't have to pay for college. Your parents may need extra assistance in their golden years that you hadn't counted on. Life is always changing, and your financial plan should be flexible, as well.

Reassessing your goals means reassessing your investments, too. Riskier investments can pay off if you have a long time to grow a return, for example, but if you need a steady, reliable source of income, they may not be the best option. By reassessing your investments along with your goals you can make sure you are on the right track.

Moving Forward to Financial Success

There are many benefits to setting financial goals. You can plan for your future and ensure you'll have the security to retire when you want to. You can also reassess your goals and investments to make sure the plan for each is still what you need.

Along the way, it might be best to get some help from a qualified financial advisor to know for certain that you've made the best investments you can for your wealth. Life changes, and so should your plan—but if you account for this, you can make your goals work for you.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

Taking control of your investments has never been easier, but there are some online investment frauds you should know about. There's a wealth of information online about stocks, companies, and their investment potential. Finding which information is worth paying attention to and which information is deceptive, however, can be tricky.

Frauds to Look Out For

One common investment fraud is when a site or emailed newsletter recommends hot stock picks that aren't actually hot—it's really just in someone else's best interests to get the stock sold. While not even true experts can promise a return on an investment, these recommendations aren't usually even smart picks. Many online newsletters will accept payments to tout certain stocks over others, and your portfolio may pay the real price for the misinformation. What complicates this issue is that there are legitimate newsletters offering expert picks on stocks, but weeding through all of the information can be time consuming. It's a good idea to check with your financial planner to see if there are sites or newsletters that he or she recommends.

Another common online investment fraud occurs on bulletin boards. If you are scoping the Internet for leads on good investments, you may come across sites where people are talking up a company or its assets. While it can be exciting to get in early on a good thing, these leads are usually false. People sometimes band together to spam a bulletin board and chat about a certain opportunity. It may look like a variety of people are recommending the prospect, when in reality this is a planned attack of misinformation geared to lure you into investing poorly. The opportunity, in all likelihood, is not the next big thing, even though the unscrupulous people behind the push to sell it want you to think it is.

How to Protect Yourself from Online Investment Frauds

• Learn how to acquire and analyze financial data. Public records can give you important data about the solvency and future of a company, and being able to review it puts you ahead of the pack.

• Check the stock history of the company and of other businesses the CEOs have run. Did those companies also make money? This can't tell you what the current company will do, but good management practices can make or break a business.

• Find a broker or financial expert to discuss stock choices with. With modern technology, you can choose how active you wish the expert to be in your portfolio, but the expert's goal is to make you money, especially since many of them make a percentage of your earnings.

And as the adage goes, if it sounds too good to be true, it probably is. Look into potential investments with care, and ask the experts if you need to. Online investment frauds are out there, but with a bit of research and some healthy skepticism, you can make the most of your investments and your time.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

For most investors, choosing an investment strategy is based mainly on which investments will give you the best return. This makes smart sense; after all, your goal is to make money.

However, many of today's investors have become increasingly more conscious and concerned with how their investment money is being utilized, and some investors are choosing a broader scope of investment. In addition to building wealth, more investors are turning to socially responsible investing to ensure that their investments are financially, morally, and ethically sound.

What is Socially Responsible Investing?

While the goal of any type of investment is to generate a return for the investor, socially responsible investing looks at more than just the return potential when deciding where to invest – it also factors in a company's social impact. Socially responsible investing (SRI) may take into consideration factors like a company's governance, environmental and/or social policies, political involvement, etc. Socially responsible investing has also been called mission investing, double or triple bottom line investing, ethical investing, sustainable investing, or green investing.

Socially responsible investing currently accounts for an estimated $2.71 trillion out of the $25.1 trillion U.S. investment marketplace, according to the Social Investment Forum.

What is Involved in Socially Responsible Investing?

When researching socially responsible investment opportunities, investors may take one or more of the following approaches:

Screening

Investors evaluate opportunities based on social, environmental, and governance criteria. These screens can be positive or negative. Socially responsible investors are generally looking for companies that are both good financial performers that make positive social contributions. Conversely, these investors also tend to avoid companies that are known as being known polluters or otherwise not known for being sensitive to social issues.

Shareholder Advocacy

Socially responsible investors take an active role in the companies in which they have a stake. Their efforts can include having dialogues with corporations and bringing awareness about issues such as governance, labor practices, discrimination, and more. Socially responsible shareholders may also take a step further and file shareholder resolutions that not only create investor pressure, but can also create media attention, helping to educate the general public about the corporation and their position about the issue at hand.

Community Investing

Traditional financial service institutions underserve many types of communities. Corporation-sponsored community investing directs capital from investors to give these underprivileged communities access to traditional banking products as well as credit, capital, and equity to build their community and provide community services including housing, child care, and health services. This is the fastest growing area of SRI, having grown a staggering 540 percent over the last decade.

At the end of the day, socially responsible investing is all about finding ways to make money and make a positive impact on the world doing it. It requires a little more effort in terms of finding and researching investments, but being morally and ethically smart with your money is a good way to really enjoy your wealth and give back to communities and industries in need.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

Your financial health should be assessed the same way your physical health is: annually. Keeping your finger on the pulse of your financial well-being allows you to reach the financial goals you have set, and can also provide opportunities for you to save even more money.

An annual financial review is basically a way to ensure that your finances stay on track. The elements covered below are helpful considerations for an annual financial review; however, it is also best to consult with a financial advisor who can assess your particular situation and needs, and guide you appropriately.

Assess and Revise Progress Toward Financial Goals

Have you met any of the goals you set for yourself last year? Have you had a life change that requires your goals to be revised and changed to better suit your new circumstances?

Update Changes to Your Personal Financial Situation

Increases as well as decreases in income and expenditures need to be updated. Are you anticipating a life change that will require a new set of goals, or a new budget? Buying a home, welcoming a new baby, or making a major purchase like a car all could affect various aspects of your finances.

Evaluate Your Insurance Coverage

Review the coverage you have for homeowner's or renters, auto, life, health, and long-term disability insurance. Does the coverage you currently have allow your family and loved ones the comfort and protection they would need should a situation require it? Is it possible that you are paying for more protection than you need?

Expect the Unexpected

Read over your will, or, if you haven't created one, do so now. Make any changes necessary to reflect your wishes, or include new members of your family.

Consider Your Retirement Plan and Investments

Are you on track to contribute the maximum to your 401(k), if available? If not, have you set up an IRA on your own, or considered other options to help you save for retirement? Have you calculated the return on your mutual funds, stocks, or bonds, and are you satisfied with their performance?

Aim to Minimize Taxes

Have you updated your withholding allowances to make sure you are not overpaying the government? Meeting with a financial advisor to discuss ways to maximize your deductions is a means to reduce your tax burden.

Review Your Debt

Create a plan to pay down or eliminate all of your debt. Should you consider refinancing a mortgage? Have you reviewed your annual credit reports?

Considering these elements of an annual financial review will help you keep tabs on your financial well-being. For additional support, consider accessing a financial advisor who can work one-on-one with you to analyze the different aspects of your finances and assist in creating the best financial plan for your entire family.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

Whether you are in twenties and wondering how best to make your money work for you or in your forties and desirous of ensuring your retirement is safe, it's never too late to begin investing. Before you jump into the stock market with a "sure thing" tip from your neighbor, however, be sure to do your research and understand what you can realistically expect from your first year of investing.

Finding Support for Your Financial Plans

Consulting a financial planner and creating a financial plan is crucial to investment success. A qualified financial planner will help you determine whether or not you are in a position to invest.

If you are not yet in a position to invest, a planner can help you create a plan to pay down any debt you may have and eventually save money to invest at a later date. Once you have saved the money to invest, a financial planner can help you evaluate investment opportunities and create an investment plan turned for

Learning the Ropes

Risk: "Without risk, there is no reward." All investments carry some risk, but a greater risk does not always mean a greater reward. While no one ever wants to lose money, you'll never invest money that you cannot afford to lose. You will learn right away how an investment might go down (or up) only to reverse in the other direction a few months later.

Finding Your Niche: In your first year of investing, it is important to remember that you are still learning how to invest. While it may be exciting to find up-and-coming investment opportunities, it may be wise to stick with companies that are proven performers instead. You'll soon discover where you are the most comfortable placing your money and why.

Importance of Diversification: When planning your investments, you will always be told to diversify. Putting all of your money in any one industry or product can spell disaster for your portfolio if that industry were to take a loss. Diversifying your portfolio will help strengthen your portfolio against ups and downs in the market. And while diversifying also includes putting some money in long-term investments and others in short-term, you should learn to be wary and to do your research before investing. Investment opportunities that promise high rewards in a short time are often investment fads and are more likely to lose money rather than make money.

A Lifetime of Learning

Once you start investing, it is up to you to continue to learn more about the market. Learn about other investment opportunities, evaluate them, and figure out whether they are right for you. Monitor your investments with your financial planner to ensure that your investments are continuing to help you meet the goals that you set for yourself. While a financial planner is your partner in the process, it is ultimately up to you to make the final decisions.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

A longing to spend the day on the golf course or the urge to pack up all your belongings and move into an RV are telltale signs that you're emotionally ready for retirement. Unfortunately, a person's desire to retire isn't always aligned with his or her retirement plan; unless you've got the financial backing you need to quit the rat race for good, an early retirement might actually end up being one of the worst fiscal decisions of your life.

While retirement is a partially subjective issue, since you're the only one who can determine for certain if the timing is right to quit your job and cash in your 401(k), there are certain financial indications that indicate if retirement is the best course of action for you and your life.

Are Your Finances Guaranteed?

One of the best ways to tackle retirement is to adjust yourself to a steady monthly income that will come in no matter what might be going on around you. A fully-vested pension or 401(k) plan or a set annuity are good indications that you can retire without fear of losing all your money, since you will know what to expect each month. On the other hand, investments that are dependent on the market continuing an upward climb before you cash them in are less stable, and give you fewer options is something does take a turn for the worse.

An important note here is that counting on Social Security to fill in the gaps isn't always an ideal plan, either. While Social Security can be a great way to channel some extra funds into investments, depending on it to pay the bills means that you might need a few more working years before you let go.

Can You Access Your Money Anytime?

Many types of investments limit your accessibility to your funds. Stocks and bonds typically require a certain amount of time to mature properly, and there might be a large fee associated with taking the money early. If the bulk of your retirement money is tied up in these kinds of investments, it might be wiser to wait until they have reached their peak before you access them.

This is especially true in a declining market like the one the United States is experiencing right now. Not waiting out a recession can end up costing you thousands to millions of dollars – certainly not enough to offset taking retirement a few years early.

Before You Retire

No matter how prepared you think you are, it's always best to confer with your financial advisor before making your retirement official. With your advisor's help, you should be able to set the benefits of retirement against the financial risks – allowing you to make the decision to retire a logical as well as emotional one.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

Financial planning in your 50s is all about enjoying what you have and looking forward to an even better few decades to come. If you are in your 50s, you are hopefully looking forward to soon reaping the goals of your hard work of investing and saving money. However, if you don't have quite the portfolio you'd always dreamed of having at this point, there's no need to panic just yet. With some smart (and possibly even higher-risk) ventures, you can get back on track and still enjoy the life you've spent so many years building.

Here are some common financial planning concerns for people in their 50s and how to address them:

Retirement planning - By now, you've hopefully been regularly contributing to a 401(k) or an IRA plan for a few decades. As you get closer to retirement age—or if you plan on retiring early—you will want to take a look at living expenses. Take a long, realistic look at the lifestyle you will want to live once you retire and estimate what your expenses are going to look like.

Once you have that estimate, it's time to determine what your accounts will be worth when you retire. There are calculators on the Internet that can help you with these figures, or you can contact your financial planner to give you a more accurate number.

By taking into account any income you are likely to receive during retirement (social security, pension, etc.) as well as your savings, you can now accurately predict whether or not you will meet your goal or fall short.

This would be a good time to review your portfolio. Are you being too aggressive or too conservative in some of your portfolio choices? While these types of oversights might have been okay ten years ago, errors now can have a much more immediate impact .Consult with your financial advisor about any concerns you may have and make any allocation changes you decide are necessary to help ensure a safe, comfortable retirement.

Estate planning - While no one wants to think about their final expenses, finding a financial advisor who can help you with estate planning will help give you peace of mind. Estate planning ensures that your estate is handled in a manner that you approve of and that your children are not burdened with making your final financial decisions after your passing.

Consult a lawyer or an estate planner to help with this portion of your financial future. At the very least, an estate plan should include a will as well as a durable power of attorney. A power of attorney gives a designated person the right to make financial decisions on your behalf if you become unable to do so.

Your estate plan should also include a living will, which will notify people of your wishes regarding medical care in case you become ill or seriously injured and are unable to make decisions yourself.

Of course, one of the best things about financial planning in your 50s is enjoying the money you have (either through earning or a few years of saving). While financial responsibility is in your best interest, you can also afford to spend a little on the types of purchases that will add quality to the life you have.

Questions? Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and visit our website at http://www.thewandwgroup.com. New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.