College Plans 101
It's hard to imagine our little ones leaving us for college one day, but of course we want the best for them. The earlier we plan for this day ( emotionally and financially) the better off your family's finances will be when it comes time to choose the school. Below I've listed the various college savings options, and remember, some vary by state.

Before we get started,the first step is to figure out what your goal is. What was your experience with college? Do you want your child to have a similar experience or something different? Some parents may just want to provide tuition, their child can work during college to provide housing expenses, food, entertainment etc. Some of us don't want our kids to work and want to provide the entire cost. Some of us would like to provide an option of state OR private school, which is a big difference in cost. Sooo, before you look into college plans, figure out what you'd like to realistically provide your child for his/her college experience.
A good reference to figure out the cost of college is the schools website, for example, the University of Florida estimates that an in state resident living on/off campus will pay $18,830 per year for undergraduate in 2010-2011. That includes tuition, books, computer, housing, food, transportation, clothing/maintenance and health insurance. So if I have a child that is a newborn, then I need to figure out the future cost 18 years from now of 4 years of school and how much I need to start putting away each month/year to cover those future costs.To do this, use a college cost calculator or consult a financial advisor. Once I have that figure and have committed out of my budget towards that savings goal, here are my options for where I should save my childs college dollars:

529 plans:
Basics: You save each year into the plan and the money is invested into mutual funds.
Pros:
1)The money goes in after tax, and when you withdraw the money, it comes out tax free when used for your childs higher education ( similar to a Roth IRA) Note* higher education is undergraduate, graduate, medical school etc. NOT private elementary or high school
2)You have the potential to invest and grow your money as conservatively or aggressively as you choose. If you don't feel like you are a saavy investor, you can choose age based portfolios that become more convservative as your child gets closer to college.
3) The money is used for higher education- tuition, books, computer costs. The money can not be used for non education expenses- ie a new car, sorority fees, your baby's bar tab!!
4) Parent maintains control over the money and names the child as the beneficiary, and the beneficiary can be changed any time. For example, if the account was set up for Johnny who ends up not going to college, it can be transferred to Johnny's sister for her college
5) Since it is considered a parents asset,it is more beneficial in the financial aid calculation. Bonus- if a grandparent or other relative sets up the account, it is not figured into the financial aid calculation at all!!
Cons:
1) can only invest in mutual funds ( not stocks, cds, etc.) You can set up one through a direct sold plan with your state or through an advisor sold plan through your financial advisor, the advisor sold plan is more expensive in terms of fees, but thats because you have a broker advising you on how to invest the money
2) The money is used for higher education- tuition, books, computer costs. The money can not be used for non education expenses- ie a new car, sorority fees, your babys bar tab. If you want complete flexibility with the money, then this can be a CON instead of a PRO
3) if your child never goes to school, you can take the money back and use it for your retirement, however there is a 10% penalty on whatever you withdraw
4) investment risk- you can lose money in your portfolio depending on your investment strategy
Here are some websites to learn more about 529 plans and how to set them up:

http://personal.fidelity.com/planning/college/content/fidelity_529_facts.shtml.cvsr

https://uii.s.upromise.com/content/home.html?uiicid=IQID13239877&iq_id=13239877

PS if you live in a state that has state income tax, you want to set up a 529 plan based in your state, so you can receive a state income tax deduction. If you don't live in a state that has income tax, then it does not matter. For example, I live in Florida where we do not have state tax, so I can open a Fidelity 529 plan, which Fidelity's plan is out of New Hampshire.


United Transfer to Minors Account: this is also an account that is set up for your child that you invest in each month, it is usually a brokerage account set up at a brokerage firm ( Ameriprise, Etrade, Scottrade etc.) or a bank ( Suntrust, BankofAmerica etc. )
Pros:
1) investment flexibiliy- you can invest in anything you want ie stocks ( for ex. you can buy that Disney stock you were considering for your baby), stock options, mutual funds, CD's, money market etc.
2) there is no limit to how much money you can invest into the account each year
3) flexibility- the money can be used for anything that is of benefit to the child- so it can be used for any college cost, it can be used for secondary school, summer camp etc. as long as it was of benefit to the child
4) if there is money left in the account at the end of college, the child can use that money for a new car after college, a downpayment on a home, a wedding etc.
5) great way to teach a child the value of money- by either getting him involved in understanding how the money is invested or budgeting his college smartly so he can have money left over for after college. For example, my husbands parents had a UTMA account for him and he learned his first lessons on how stocks work and then took ownership of budgeting his college expenses so he would have money left over. We still have funds in his UTMA account that we can use right now as an emergency fund or a downpayment on our next house.
Cons:
1) it is an irrevokable gift to the child- it can not be used later for your retirement or anything that is not of benefit to the child
2) parent loses control over the account when the child reaches 18 or 21 years of age ( depending on the state you live in). So if Johnny learns he has $100,000 in an account and he is of age, he could withdraw it all and take off for Europe!
3) the earnings, interest, capital gains and dividends are taxed every year- there is a kiddie tax rate and then the amount over that is taxed at the parents tax rate
4) since the money is considered a child's asset- it can negatively effect an application for financial aid

PrePaid College Plans- you are investing into your state plan that you are purchasing the cost of college at today's rates
Pros:
1) you lock in the cost of college at today's rates
2) flexible payment plan, most states you can pay through a one time lump sum,a 5 year payment plan or a plan that you pay for until they are ready for school
3) you can prepurchase the cost of tuition as well as the cost of on campus housing
4) no investment risk- you do not have to worry about your portfolio going up or down because it is not invested in anything
5) if they don't go to school, you can receive your money back, less a transaction fee
6) if your child receives a scholarship for tuition, you can also receive your money back
7) most states have recipricosity- if you buy a plan in Florida, but they go to school in Tennessee, you can transfer it to the Tennessee plan
Cons:
1) the plan does not cover all of the other expenses of college- often times the tuition is only 1/3 of the total cost of college. It's the off campus housing, food, entertainment, spring breaks, sorority/fraternity costs which really add up, that the plan does not cover
2) you get your money back if your baby doesn't use it or receives a scholarship- so if you invest $15,000 when they are a baby, 18 years later you get $15,000 back ( less the processing fee) with NO interest
3) the recipricosity might not be equal- for ex, Florida's prepaid program may only cover 1/2 the cost of Tennessees college, if Tennessee is a more expensive state ( since your child is not a resident)
4) the housing option is only ON CAMPUS- so depending on the school, some students don't live on campus or only do it for the 1st year, so if you are considering this option, consider only doing the 1st year
Websites to learn more about Prepaid College:
Just google "your state and prepaid college plans", florida's plan is here

There are a few other options, like a Coverdell Savings account, using CashValue Life Insurance or EE savings bonds, but I've outlined the most common options above. Keep in mind, you don't have to do one plan, you can combine several of the plans if one plan is not fitting all of your goals!
If you find this info.to be overwhelming, don't worry, there are financial advisors out there that have the knowledge and tools to help you navigate through all of this info. and find the best plan for you and your family. Go to www.cfp.net to find a qualified financial advisor in your area.

My last words of wisdom on this topic:

1) Don't procrastinate!! the longer you wait, the more you will have to save each year. Look at reducing costs now that can produce some savings, remember your baby won't remember that cute onesie or if they have 5 different bathing suits for the summer, they will remember when it comes time to going to college if their options are limited.
2) there are other options for college- student loans, scholarships and financial aid. If you have a very tight budget, I recommend saving for your retirement over college savings, since there is no such thing as scholarships, financial aid or student loans for your retirement!

PS Go Gators!!

Credit Card Debt

I spoke with a referral yesterday who was looking for some help, esp. with their credit card debt. Now, these are not my ideal referrals, as I really can only advise and work with people that have cash flow to SAVE and INVEST with me, not that needs to go to cc debt. But I like helping people, so I listened and this was the situation:
$30,000 of credit card debt on several cards ranging from 7-30% interest rates, not quite sure of exact rates or balances ( first sign there is a major problem)
age: 29 and 35
accumulated over time ( careless 20's? sound familiar?) and a new home purchase last year meaning all new furniture.
Mainly making minimum payments.

First off, it boggles my mind that people can rack up such cc debt and actually sleep at night? I'd probably go crazy. Oh and they were leaving for vacation next week! Vacation, really? You should be eating peanuts with that much debt, but I'm trying not to judge here.

Sooo how do you get yourself out of this one?

This is my simple 12 step get of of cc debt plan:

Step 1: ADMIT YOU HAVE A PROBLEM- overspending, shopping to make yourself feel better, not knowing how to say no to your spouse etc. etc.
Step 2: REALIZE THIS WILL BE VERY HARD AND WILL BE A COMPLETE LIFESTYLE CHANGE- You will have to learn to say "NO!"
NO YOU WON'T BE ABLE TO TAKE THAT VACATION THIS YEAR, CONTINUE YOUR NORDSTROM SHOPPING, BUY YOUR KIDS POINTLESS TOYS THAT THEY WONT EVEN REMEMBER or EAT OUT AS MUCH
Step 3: CHANGE YOUR HABITS, the first step to getting out of credit card debt is to STOP using your credit cards- cut them up. Store them in a safe. Put them out of your reach! However, you don't want to actually close the cards, keeping your available credit line open is what improves your credit score
Step 4: Sit down with yourself and/or your spouse and get out all of the cc statements for EVERY card. Add up all the debt. Look at what the interest rate is on each card. Then, really kill yourself and add up the amount of interest you are paying each year to make the credit card companies profitable, not yourself. If you're still not sick, calculate how long it would take you to pay off the cards, if you continue with your current payments.
Step 5: Call all of your credit card companies and ask for a lower interest rate. Yes, just simply ask. The worse they can say is NO.
This may take several calls, haggling, talking to the manager, BUT the credit card company would rather work with you then lose your business. Tell them you have an offer to transfer your balance to a competitor card with a 0% rate, that you are considering this if they won't lower your rate.
Step 6: Start paying attention to those 0% credit card offers in the mail. They weren't coming for a while, but they've started again. Example, if you have $10,000 at a 13% card, transferring that $10,000 to 0% can help you get that balance paid off faster!! Pay attention to when the 0% offer expires and set up a payment plan to get the balance paid off by then. When you do balance transfers, it does not hurt your credit, as long as you leave the 1st credit card open. For example, if you have $10k on a $10k limit card, and now transfer to a new 0% card, and leave the old card open, instead of your credit report showing you have $0 available credit, you now have $10,000 available credit that you aren't using, by leaving the first card open and not using it anymore- great way to improve your credit score!
Step 7: Once you have negotiated your rates and transferred the balances, also start paying more towards your highest rate card. This should be paid off first.
Step 8: Set realistic goals for your payment plan. 1 year may not be realistic. This may take 2-3 years, but you can do it! Put yourself on a budget.
Step 9: Also try to put money into your savings account too. This way you don't run into a debt spiral- you're putting all your cash flow towards the debt, but then inevitablely something comes up- your car breaks down, the a/c stops working etc. If you don't have any cash put aside, boom it goes right back on the cc card and you could be back to square one.
Step 10: Reward yourself when you get a card paid off-that is awesome!! Don't get all extravagant, but do something nice and simple for yourself. Put a big Congratulations! sign on your fridge or treat your spouse to a massage or simple dinner at home.
Step 11: Track your progress. Sit down once a month and see how you are progressing towards the goals you set. If you aren't on track, don't get discouraged. Identify why you are behind, set new goals and try try try again!
Step 12: Once you have reached your goal, start putting your money to work for YOU. Redirect the cash flow you were putting towards credit card payments to building up 6 months of expenses for emergencies, funding your 401k at work, starting a Roth IRA or setting up a college plan!

Gift Tax

My client, Brandon, called me with news that his mother recently passed away from cancer. It had been a quick battle, from diagnosis to death was about 9 months.

She leaves behind 4 children, Brandon, his sister, and 2 college age sons. She also left behind a life insurance policy with a death benefit of $300,000. ( which by the way, your beneficiaries do not pay ANY income taxes on life insurance proceeds).

His mother designated the sister as the sole beneficiary. Luckily, the sister is going to equally share the proceeds, although she has no legal obligation to.

This is a blessing for my client, as next week, Brandon and his wife Jennifer are welcoming a new baby boy that they are adopting! Adopting can be expensive, and this life insurance will be able to cover the costs, give them some time off work, and start some college funds!!

One question Brandon's wife, Jennifer, had for me was related to gift taxes- is their share of the $75,000 going to be taxable?

The answer is NO.

For 2010, you can gift $13,000 without paying federal gift tax, which is always paid by the donor NOT the recipient, so it would be paid by the sister, not Jennifer. So the sister, can gift $13,000 to Jennifer and $13,000 to Brandon. If the sister was married, she'd be able to gift split with her spouse and give $26,000 to Jennifer and $26,000 to Brandon but she's not married.

Since they will be receiving $75,000, the sister can gift more than $26,000 in 2010, because we all have a $1,000,000 lifetime gifting maximum. So she can give the extra $49,000 this year, it will just be deducted from her $1m lifetime exclusion and she will have to fil form 709 at tax time. But no taxes will be due.

Another strategy for the sister is that she could write a check directly to let's say " Florida Prepaid" for the new babies education and there would be no applicable gift tax or exclusion. She could also gift $13,000 to the new baby to a UTMA account and also be gift tax free.

New Laws on Credit Cards

Click here for an article outlining new legislation from the Fed on credit card companies from doing things like raising rates on you when you make your payments on time, a limit on various transactional fees, and the best part- limiting issuing of cards to people under age 21 ( unless they have a parent or cosigner-very smart as most cc debt is racked up when u are still in college and dont realize the damage you are doing)

It's not too late!

The holiday times mean parties, holiday shopping, baking cookies, wrapping presents, spending time with family and friends, santa, christmas caroling ( my particular fav. thing) and funding your IRA's. Wait no, the LAST thing people think about around the holidays is finishing their savings goals strong by making sure they have contributed to their IRA's.
Luckily, our world has figured this out and the IRS allows you to contribute to your IRA's until April 15th of the following year!
Soo, it's not too late!
You can contribute up to $5,000 per year to a Traditional IRA ( which you can use only if are NOT contributing to a plan at work like a 401k, 403b etc. or make less than $55k to $65k Modified adjusted gross income for individual filers and $89k to $109k for married filers)
You can contribute up to $5,000 per year to a Roth IRA- if your income is less than $169k for married filers and $116k for individual )
Don't forget if you are over the age of 50, you can contribute an catch up of $1,000.
** also, if you are business owner and have a SEP IRA you have until when you file to contribute!
For more on IRA rules, refer to this publication on the IRS website.

New Year Financial Resolutions

Ok, so I have a new years resolution- blog more! I feel like I have so much valuable info. to share, I'm just so bogged down with managing my practice, my household, my investments, spending time with family, friends etc...phew!! Women are supposed to be superwomen right?!

Are things getting better in the economy?

On Friday, we got some good news- the majority of economists expectedunemployment to rise , but it actually ticked down from 10.2 to 10%- we lost about 11,000 jobs in November and they also revised the October down as well. So this is like many other things, we still had losses so we aren't out of the woods yet, but the losses were less than expected. Unemployment is suprisinging considered a lagging economic indicator, because in past recessions employers don't tend to really start hiring again until there is signs that we are for sure in a recovery.
Here is a good article from yahoo that I read this morning that explores if we are reaching the end of the recession.

Market Commentary from David Joy, Riversource

David Joy — Chief Market Strategist, RiverSource Investments
Slight Setback for Economic Growth
On the road toward a sustainable economic expansion, last week represented a modest setback. Weaker-than-expected reports on industrial production and housing starts suggested that the recovery remained fragile.
The weakness in housing may have occurred because of the uncertainty surrounding the status of the first time home buyers tax credit, since extended and expanded. Of course, we will find out the answer next month, but the weakness in the October report does exhibit just how dependent the housing sector is on government incentives. The strength in existing home sales as reported this Monday, which rose to the highest level since February 2007, was likely itself distorted by buyer anticipation of the expiration of the tax credit program.
The industrial production report showed a gain of just 0.1 percent in October after three successive, strong readings averaging increases of 0.9 percent in the third quarter. Both the manufacturing and mining components fell, while utility output rose sharply. A decline in auto production accounted for most of the manufacturing weakness.
Stocks mostly drifted lower last week in response to the softer data and a slightly stronger dollar, although the Dow Jones Industrial Average managed to eke out a small gain. Commodity prices were also generally higher, especially gold which rose another $30 to $1,148 an ounce.
Equity investors have been trying to come to terms recently with a number of indications that the recovery rally is showing signs of fatigue: light volume, relative weakness in financials and small caps, elevated sentiment, fewer new highs, full valuations and so on. This watchfulness is compounded by the suspicion that a correction might be due, since we haven't experienced one throughout the entire recovery from the March lows. But also causing some concern are divergent messages are coming from the bond market.
Last week, the yield on three-month Treasury bills turned negative. That's right, negative. In other words, some investors are willing to accept a return of less than zero for the assurance of getting their money back in January. Certainly part of the reason is related to large institutional parking of ample excess cash, but it also hints at some measure of concern. In addition, certain credit spreads have stopped contracting or have been widening recently, hardly a ringing endorsement of the momentum behind the budding economic recovery.
Assurances from central banks around the globe that liquidity will be maintained indefinitely do offer some comfort that the reflation story is still alive. But we are getting closer to the moment of truth when final demand will need to step forward, and corporate revenues will need to rise for this rally to keep going. Judging from investor response to recent statements from Federal Reserve officials, the easy money, weaker dollar story maintains the upper hand for now.

Year End Tax Planning

While the last thing you think about as the holidays approaches is your tax planning, you really should, if you want to make sure you save dollars come tax time in April. Here are my top tax planning tips before December 31st:

1) If you do not qualify for a Roth IRA because of your income ( phase out starts at $166,000 AGI for married couples, $105,000 for single filers) then you should consider making a Non Deductible Traditional IRA contribution- you will be able to convert that in 2010.
2) If you are in over a 28% tax bracket, you should consider maxing out your 401(k) before the end of the year. Look at your remaining paychecks and see what you should increase your deductions to in order to reach the max.- $16,500 for individuals under 50, and $22,000 for over 50. This will help you save more in your tax bill for 2009 as well as save more for your retirement and take advantage of some STILL market lows.
3) Evaluate your nonqualified investment portfolio. ( these are assets that you hold outside of your IRA's and 401(k) plans). For example, stocks or mutual funds you hold in a brokerage account. Look to see if you should sell any losers to reinvest into something better and take a bad situation ( no one likes to admit to having a loss BUT it does happen) and turn it into a tax savings.
EX: I bought GE at $30 and it is now worth $16 per share- if I sell to reinvest in a potentially better performing company, I can write off that loss- up to $3,000 a year right OFF my EARNED income- so if I made $150,000 this year, now my income is $147,000. you can also use it to offset future capital gains! Keep in mind, if you want to buy back the same position, because of wash sale rules, you have to wait 31 days. If you are concerned about not being in a position over those 31 days, then you can still invest in something else. For example, if I sell my gold mining stock at a loss, but still believe in my gold mining stock, I could buy a GLD etf for those 30 days to make sure I still have exposure to the gold market.

Lay Away is back

It's no longer unfashionable to be thrifty- we are all trying to save money and cut back. With the holiday season right around the corner and holiday sales predicted to be sluggish, stores are getting back to using LAY AWAY- Kmart is already running commercials for the holiday season. I think this is a great way to start your christmas shopping- most of us don't have the discipline to save for a christmas fund and end up using our credit cards- which ends up costing a lot of money through the high interest we pay. Lay away allows you to set up a payment plan in the weeks leading up to christmas. You receive your items when you make your last payment- usually just in time for Christmas. If you like this idea, consider looking into it soon. Here are the terms of the Kmart Layaway program.

Oh and PS Use your cash flow to make these payments, not your credit cards ( unless you DO pay off your credit card each month)

Open Enrollment

The season is upon us for open enrollment. Time to make sure all of your benefits are up to date and to make any changes.
One of the biggest missed areas is short and long term disability. Remember, your income is your biggest asset- if your ability to wake up and go to work to earn your paycheck is compromised, that can be HUGE financial problems. Did you know that 48% of foreclosures result in disability? Only 2% result from death, but more people life insurance than disability insurance.
Make sure you are enrolled for both- if STD is expensive and you have at least 6 months of expenses in a cash reserve, you can consider skipping, but never skip the LTD- it is almost impossible to insure yourself against a permanent disability.
Most LTD lasts until you are age 65 and can pay anywhere between 50-66% of your income- make sure to opt for the max!
If 66% is not enough, you can also purchase private disability policies to cover more of your income. Another big advantage of private vs. your group disability policies is occupation protection.
Also, if you are pregnant, short term disability can be very valuable if you encounter any pregnancy complications or need time to recover from childbirth!

Interest working against you

My husband, Evan, loves to fish. It serves as his escape from his demanding job as a surgery resident at the hospital. I get this- we all need our escape or something that gives us that natural flow.
For a few years now, Evan has wanted a fishing boat. He has spent hours and hours reading about the hulls, the best engines, all the different makes, horsepower etc. etc....and finally was ready to purchase a boat- a beautiful 20 foot Angler bay boat became ours 2 weeks ago. Even I can't help it- she is wonderful!
To purchase this boat, we first sold our previous boat- a yamaha jet boat that we sold for $8,500. Using this as a dowpayment, our boat sold for $20,000 and we ended up financing about $12,000.
Now the financing- with the recession and my income not where it used to be, we wanted low payments. Evan came home and told me he was told by the boat dealer we could get a boat loan for 8%.
8%!! I about fell out of my chair, just 2 years ago a financed my car at 4% how can the rates be so high now?! Welcome to the result of the credit crisis. After inquiring at several banks and credit unions, I found that this 8% rate was on the low side for boat loans now. So when we received our note from the bank, I looked at the total interest that will be paid over the duration of the loan- $8,900!!! That is how banks stay rich, and consumers stay poor. You bet your butt we will be paying off this loan much faster than the set payment plan? How...increasing our monthly payment from $175 to at least $250 a month and making lump sums from extra cash flow each month.
Have you ever looked at how much interest you are paying on your loans and credit cards ( which the average rate on right now is 9.53%)? Pay attention, it can really open your eyes and help you save thousands in interest that you can have to save for retirement, where you can earn interest on your money, not someone else earning interest!

a sad day

I had a client call me today with some horrible news- his wife, Laura, had passed away at 46 years old. I was shocked, she had been in and out of the hospital the last year but I had no idea it was life threatening.
The first thing I did was check his accounts- yes I was 95% and I was then 100% relieved. In 2007, when I met these clients, the husband, Marshall, was the primary breadwinner and Laura did not work. Most of the time when the non-working spouse does not bring any monetary value to the household, he or she does not have life insurance.
I convinced them in 2007 to buy a policy on her "just in case"- to cover funeral expenses and give Marshall some time to take off to spend with his daugther and not have to worry about money for a while.
I'm glad I was able to give Marshall and their daughter this one thing in such a tragic time.
Life insurance is important, I hope this reminds everyone of that.

Laura was also a donor, so her passing allowed 5 people to have better lives through donations of her liver, skin and other organs.
RIP Laura

Quirky

Check out this Yahoo article for some out of the ordinary economic indicators

http://finance.yahoo.com/banking-budgeting/article/107186/10-quirky-economic-indicators;_ylt=At9Ev1J0uTyd5.7iPwtZXdiCfNdF?mod=bb-budgeting

What to do with your 401(k) when you leave your job

I'm willling to bet that the LAST thing on your mind when you leave a company ( nowadays bc of a lay off) is what to do with your 401(k) plan. Here are your options...

1) Rollover to a Traditional IRA- your investment options are now LIMITLESS inside your IRA, well almost, you can't buy gold bullion BUT you can buy a GOLD ETF, along with individual stocks, thousands of mutual funds, and of course CD's and money markets. The point is you have more flexibility and choices to build the optimal portfolio- if you are a do it yourself type investor, try Charles Schwab or Scottrade, if you want professional investment advice on how to build and manage a portfolio, try something like Ameriprise

2) Leave it where it is- if you leave it as is, there is a good chance you'll lose track of it in that since you are no longer working with the company, you won't be as up to date on fund changes or have access to the 401k administrator coming into your office. Your investment options are not limitless and you can only invest in the 10-15 funds available within the 401k.

3) Convert to a Roth IRA- if you are under the $100,000 income limitation, you rollover your 401k directly to a Roth IRA.
Ex:
Jenn, whose AGI ( adjusted gross income) is $65,000 for 2009, leaves ABC Corp. with $25,000 in her 401(k) plan. Jenn decides to convert her 401k to a Roth IRA- the $25,000 she adds on to her income for the year, making her income $90,000 and pays a one time income tax (20%) on her $25,000- $20,000 is the net that is deposited in her Roth, which will now grow to be tax free when she withdraws the funds for her retirement.

Good article

If you would like an easy to read recap of what the heck has happened to our economy over the last year and a half that has shot us into this recession, you need to read this article from Junior Achievement.

CFP

Last week, I got the good news that I passed my CFP ( CERTIFIED FINANCIAL PLANNER) exam. The journey to acheive this took me two years, I began my studies in the beginning of 2007. This certification requires that you pass 6 modules before you can sit for the comprehensive test that ultimately gives you the CFP title. The modules include Principals of Financial Planning, Insurance, Income Tax, Retirement Planning, Investment Planning and Estate. Each module consists of about 10 books of information. Soo with working 50-60 hours a week and everyday life, it can take some time to get through it all.
In the fall of 2008, I discovered the Ken Zahn program which was very helpful at getting me prepared for the final. You can visit his website at www.kenzahn.com. I highly recommend his program if you are looking to get this certification in a decent amount of time.
So, once the CFP board confirms that I am a college grad and have 3 years of work history, I can start using the designation, and I can't be more excited! I'm hoping it will help my practice aquire more high value clients- as most smart investors look for an advisor that is a CFP.
I was also happy to discover that only 26% of CFP's are female, and 3% are in the age range of 20-29! You can read more about the CFP designation at www.cfp.net.

Uncle Sam, may I refinance or not?

Many Americans bought a house that they now owe more on than it is worth, and are being crushed by payments and can't sell. Obama has come up with some solutions, one of them being The Home Affordable Refinance plan: here is the scoop~

While mortgage rates are now at historic lows, many homeowners with mortgages owned by Fannie Mae or Freddie Mac are unable to refinance their higher-rate mortgages because they have lost equity in their properties due to falling home prices. Under current rules, Fannie Mae and Freddie Mac cannot guarantee a mortgage that exceeds 80 percent of the home's value. The Home Affordable Refinance plan removes this restriction, allowing certain homeowners to refinance their mortgages.
A homeowner qualifies for this refinancing if:
The property is owner-occupied and the existing mortgage is current
The existing mortgage is owned by Fannie Mae or Freddie Mac
The new mortgage balance will not exceed 105 percent of the home’s current value
The mortgage balance must not exceed $729,750 for single-family homes

The plan runs until June 1, 2010.
If you think you qualify, call your lender!

I'm back

So I haven't blogged in 4 months...what is my excuse? Well I took the CFP last month ( please God I hope I passed) and I'm getting married next week....not to mention I've also been fixing up a rental house that my fiance and I bought for $37k, yes that's right $37k= positive cash flow galore. Oh yeah and trying to keep my clients calm and managing my practice, and it seems like the sky is falling. NO IT's not.
So here I am. AGAIN...here we are again...

I'll start off with something simple. Hmmm....
1) If you have bought a house in 2008 and wait they just extended it to dec 2009, you should check out this link - keep in mind it does have to be paid back.
2) You can still fund your 2008 Roth IRA until April 15th, that is $5,000 or $6,000 if you are over age 50. What are you going to buy in your Roth IRA, do you think they're might be some good buying opportunities?
3)
That's all I got for now, stay tuned.

Short Sales

So I had two clients tell me this week that they were thinking about doing a short sale and one tell me he was considering foreclosure.

All of these clients make over $150,000 a year and have the money to pay on their mortgages, even though they are paying two mortgage payments.
They have just figured that their house value has gone down so much that it would take YEARS for it to come back in value and they are better off letting it go.
Seriously?? Is that the mentality now people? You want to just ruin your credit by having it go down 200-400 points ( which by the way a short sale is just as bad for your credit as a foreclosure is ) so that you can pay out the butt through higher interest rates bc no one will want to loan you anymore money.
Also, not to mention, how wrong it is to walk away from an obligation. If perfectly capable people start walking out on their mortgages this economy is going to have some MAJOR problems in our banking system.
What do you think?