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Archive for May, 2011

Consumers and homeowners in particular tend to think that financial planning is all about investing.  In reality, the key to proper financial planning is making smart moves with your money to protect your hard-earned wealth.  Too often consumers fret about the specific investment’s return and ignore the things that they can control such as how to not lose money.

One of the key parts of a good financial plan is proper estate planning.  And one element of an estate plan is controlling for risks that can wipe out your wealth such as from a lawsuit or a creditor.

To that end the revisions that became effective with the updated Massachusetts Homestead Law will help all homeowners.

New Law in Massachusetts Will Protect Homeowners and Vital for Seniors

As reported in the Boston Tax Institute newsletter of May 31, 2011, the Massachusetts Legislature has enacted a new law that will increase homestead protection for homeowners in Massachusetts. Homestead protects a person’s residence from most creditors. If a homeowner is sued by a creditor or files for bankruptcy, a portion of their equity in their home – the “homestead estate” – is deemed unavailable to their creditors. The new law was passed on December 16, 2010, and became effective on March 16, 2011.

What a homestead exemption does is protect the property against attachment, levy on execution or a court-ordered forced sale to satisfy payment of a debt.

The new law essentially puts in place a minimum amount of coverage for all homeowners (now $125,000) and each homeowner can file the form to gain protection up to the extended amount ($500,000 or $1 million for an elder couple).

Cheap Protection Against Lawsuits or Creditors

This is cheap protection.  And vital for anyone.

Consider this: One lawsuit can not only ruin your day but force you to lose the equity in your home.

If you have teens at home and there is a severe car accident, you can be sued.  If you lose the lawsuit and are assessed a civil judgement by the court, the other party could put a lien on your home or even force the sale of the property to pay the claim.

An elder driver could drive through a wall or onto a sidewalk and cause property damage or personal injury that exceeds their insurance liability coverage.

These are only a couple of examples that could put someone’s home at risk.  This new law at least provides some basic protection and the extended coverage will provide more peace of mind.

Key Updates to the Law

Under the amended Massachusetts Homestead law (Estate of Homestead):

  • Massachusetts homeowners will receive automatic $125,000 protection against debt collectors (if they hold that much equity in their home) without having to do anything.
  • Homeowners can elect to file a homestead declaration with the Registry of Deeds, which will give homeowners up to $500,000 in equity protection from non-exempt creditors.  Homestead forms, or homestead deeds, are filed at the Registry of Deeds in the county in which the residence is located. The filing fee ranges from $35-$100.
  • For married couples, both spouses will now have to sign the form. Before only one spouse signed and protection was only afforded to the spouse who signed.  If a single person declares a homestead and subsequently gets married, the Homestead automatically protects the new spouse.
  • Homesteads now pass on to the surviving spouse and children who live in the home.  The protections also remain for transfers between relatives.
  • There is new protection for homeowners who receive insurance proceeds from fire or other damages.
  • There has always been confusion whether a homeowner had to re-file a homestead after a refinance.  The new law clarifies this issue – homeowners do NOT have to re-file a homestead after a refinance.  Under the new law, Homesteads are automatically subordinate to mortgages, and lenders are specifically prohibited from having borrowers waive or release a homestead.
  • Homesteads are now available for single families, condominiums, coops, manufactured homes and now for 2-4 unit homes; and also for homes that are held in a trust for estate planning or other reasons.
  • Closing attorneys in mortgage transactions must now provide borrowers with a notice of availability of a homestead.
  • There is no need to re-do/re-file an existing homestead under the new law.

The form itself is pretty easy to fill in and file with the registry where your primary residence is located and recorded.  For a $35 registry fee you could get $300,000 in protection from creditors (now up to $500,000).

Special note:  Attorney Ed Adamsky provided a clarification (thanks, Ed):

If you have already filed a homestead, you do not have to update it to get the benefits of the updated Massachusetts law. If you have not filed one, you should do so. In New Hampshire there is nothing to file

For specific guidance on legal issues, speak with a qualified attorney. For help in putting in place a financial plan or road map for your money that looks at all the pieces of your plan, then call a qualified financial planner who can help make sense of all the moving parts regarding your money.

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Growing up in a middle class family with parents who worked on the production lines of local factories, it was instilled in me from a very young age that education was the ticket to a better life.  While times have changed parents still want to see a better life for their kids and education is still the key.

American Dream: Worth Believing?

As a new parent myself (my other identity is as Spencer’s Dad), I want the same thing.  I believe that the American Dream is founded on education which brings with it the opportunities for a high quality of life.

I’m not as cynical as my favorite comedian of all time, the late George Carlin, who once said in reference to the “education-industrial” complex: “ It’s not called the The American Dream for nothing, because you have to be asleep to believe it.”

But he did make some great points in his monologue:  Our education system is sort of broken and there’s no real incentive to fix it.

Escalating Costs Threaten Future

Let’s face reality here.  The cost of getting a baccalaureate degree even at a public university or college comes with an average price tag of $16,000 per year.  And that’s typically before room and board. Private schools average in the $36,000+ range and elite schools are near $50,000.  That’s per year. More than the cost of my parent’s first or second home.

When I was growing up, I entered the University of Lowell (now University of Massachusetts – Lowell) in the fall of 1982 and the cost for each course was about $400.  When I entered Bentley University for my master’s degree in finance in 1991, the $1600 cost for one course was equal to what 12 credits cost for an entire semester at Lowell.

Since then inflation in higher education has been a given. Despite three stock market corrections in the past decade and a financial crisis that lead to The Great Recession, there has been no let up in the escalation of tuition and fees for school.

This is not good for individuals.  Nor is it good for us as an opportunity society.  This is not meant as a political statement but a recognition of reality.  The wealthiest among us will be able to pay their own way.  The poorest among us will get aid.  But as noted in a recent discussion on NPR’s On Point on May 26 entitled “Affluent Students Dominate Top Colleges,” the reality is that higher education is not as diverse as our society at large.  The consequences of this lack of diversity can be wide reaching impacting not just the individual but his interactions with others as well as developing the talents of people needed to deal with society’s ills and propel us forward in technology, healthcare and business in general.

It contributes to a perceptible widening between the ‘Haves’ and ‘Have-Nots’ and undermines the Middle Class foundation of our society. And when people feel disconnected from society and the glue that binds us dries up, our standard of living and global standing erode.

As someone commented on the On Point blog after the show:

As a community college professor, and the father of a daughter who just graduated from Wake Forest, I would like to have extended this discussion in a couple of ways.  The real middle class (not poor enough to get Pell Grants, etc., nor rich enough to write the big checks) is the group that is really caught in this dilemma.  More needs to be said about this.

The change in the student body at these colleges is very striking to those of us who graduated years ago.  I worked summers and was able to pretty much pay my way through Wake 40 years ago.  Most of my friends were lower middle class guys from small towns in N.C. Today more than half the student body comes from outside the state, and many are very affluent.  My daughter, from a family with two teachers as parents, felt like the poor kid through most of her four years, and she was well taken care of.  The only reason she was able to attend this fine school was my dear departed mother’s money (it took it all), and scholarships (which just seemed to increase the EFC).  That, and being an only child.  But “on point.”  The economic imbalance that now exists on a small liberal arts campus is disturbing, as is the lack of not just racial diversity, but class diversity.

Paying for College – A Real Risk for Retirement, Too

Politics aside, this has been a real financial crisis in the making.  Consider this:  For every dollar that a parent uses to pay for a child’s college, there is one less dollar for that parent’s retirement.  So the crisis in paying for school is also a retirement crisis.

We know that going to get a college degree is a positive financial decision.  The often quoted number is that a college-degree holder earns more than $1 million more over his or her lifetime than someone without a degree.

Students are walking out with an average of $20,000 in student debt. That’s not terribly bad when compared to the lifetime payoff.   (I personally think that it’s higher and the many “for profit” diploma mills that prey on people’s hopes and fears add to this as well. But that’s a discussion for another day).

But the problem is that Middle Class parents are squeezed from competing priorities:  taking care of elder parents, saving to fund a dignified retirement and helping their kids attain the key to their own futures.

Help for Those Stuck in the Middle

Some solutions to this crisis are way above my pay grade.  But to the college professor’s point noted above, the real middle class needs help with this dilemma.

Most financial advisers and even CPAs do a disservice to their clients.  Advisers focus almost exclusively on investing. Accountants generally are looking in the rear view mirror and dealing with tax liability.

For those advisers like myself who recognize the link between college and retirement, we know that there has to be a better way to handle paying for college without having to go broke doing it.

Tips to Paying Less and Getting More

  1. Get a financial plan in place:  There’s no reason to do this alone.  The FAFSA and CSProfile financial aid forms are confusing.  And like taxes, things change from year to year.  Answering questions the wrong way can jeopardize chances to get all the financial aid for which a student may be eligible;
  2. DON’T become a victim:  For late-starter parents there is a temptation to go with the easy fixes that sound good.  Too often folks start getting invitations to “free” seminars which are usually nothing more than pitches to buy insurance.  Yes, certain types of insurance can shelter assets that don’t need to be counted for the purpose of financial aid calculations.  But there is a cost to losing that flexibility.  And the time frame needed to make this strategy viable … well, let’s just say grammar school makes more sense than starting when your little tot is a high school junior.
  3. Don’t pay sticker price:  The truth is that the price you see isn’t the price you need to pay.  And good students who would do well at a particular school sell themselves short by self-selecting out of applying for fear that they can’t afford it.  While that may be true, it’s also true that a financial aid package can be arranged.  Students may actually end up paying less to go to one of their preferred schools than to a “safety” like a public school.  (Let’s face it, even after a recession and the Flash Crash, universities still have endowment money but public schools are being squeezed by state budget concerns).
  4. Lower you Expected Family Contribution: There are a variety of tax-efficient cash flow and income strategies that late-starter parents can use to show lower income or assets that may help lower the EFC and increase eligibility for aid.
  5. Use a Cash Flow Model: Through smart planning a family can devise a plan on which buckets to pull money out of in a tax wise way and still fund their retirement plans.  Believe it or not but it can be done.
  6. Become an educated consumer: Don’t simply rely on what friends and neighbors say.  Get to know the process.  Work with someone who can help show you the way.  Realize that there are two prices for a college education:  The one that everyone pays because they don’t know better or the one for those who know how to navigate through the system.

Exclusive College Planning Service Helps Parents Pay Less for College

To learn more strategies that may lower the out-of-pocket cost for college costs, please join me for one of my free monthly webinars.  The next one is on June 9 at 8 PM. Details can be found on my company website or by clicking here.

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A key component of a diversified income-oriented portfolio is dividends. This is what I have noted in the past during my presentations, blogs and online musings. They are a key part of a solid retirement income strategy.

The total return from stocks is derived from two key components:  price appreciation and the cash flow from dividends.

Most investors are certainly familiar with the concept of price appreciation (or depreciation as was evident during the financial crisis and Flash Crash for instance).  This is what the media each night focuses on when they report on “The Market.”

But less noticed is the value of dividends to the longer-term success of an investor.

The Value of Dividends to An Investor

Below is a chart of various recent periods of stock market performance compiled by Thornburg Investment.

The “Dividend Aristocrats Index” refers to an index of companies that consistently lead the market in paying dividends and regularly increasing their dividends.

Annualized Total Return Period Dividend Aristocrats Index S&P 500
1990-94 12.58% 10.4%
1995-99 19.48% 28.54%
2000-04 9.79% -2.29%
2005 – 9/2009 2.32% -0.08%
1990 – 9/2009 10.97% 8.41%

Dividend-paying stocks have shown these positive attributes over this period:

  1. Historically higher yields than bonds
  2. Historically higher total returns compared to bonds because of the stock appreciation potential of the dividend-payers.
  3. Higher income, capital appreciation and total return compared to the S&P 500 Index in almost all of the periods noted above and a near 20-year annualized total return of nearly 11% versus 8.4.

Dividend-paying stocks are probably not as sexy as most aspects of the stock market.  They are part of “value investing.” They are the stuff of “conservative” portfolios built for “widows and orphans.”  They are the basic building blocks used by Benjamin Graham, the author of Intelligent Investing and the principles on which Warren Buffet built Berkshire-Hathaway.

But for an income-oriented investor (such as a retiree) looking at ways to manage income in retirement, they should not be overlooked.  In fact, recent research reveals that those companies that pay out higher dividends also tend to have higher stock prices because they also have higher earnings growth. And earnings growth is another key component in valuing stocks.  This research indicates this as a global tendency.

Searching for Yield

Unfortunately, seeking out high dividend-paying companies in the US is not so easy.  Unlike managements of Euro-based companies where paying dividends is a sort of badge of honor, US companies tend to be much more stingy in paying back earnings to owners of the company (the stockholders).

And the trend in dividend yields is one that continues to decline. A research note by Vanguard (May 2011) shows this trend.  From 1928 through 1945, the average dividend yield was around 5.6% and dividends represented about 67% of company earnings (aka dividend payout ratio). From 1945 to 1982 the average yields dropped to 4.2% and the payout ratio to 53%.  In the more recent period from 1983 through 2010, the average dividend yield has dropped to 2.5% with a payout ratio of about 46%.

As you can see finding “Aristocrats” that pay out higher than these averages makes a big difference.  And the higher payouts may also portend higher future earnings as well as stock price appreciation.

But even those companies which are “stingier” will still help out a portfolio.

Do Lower Dividends Mean Lower Stock Prices?

The question that investors may be asking themselves now is “will these lower dividend yields (historically and compared to Europe for instance) be an indicator of lower stock prices?” Because the market’s dividend yield is below its historical norm, is that an indicator of lower total returns in the future?

While the stock market is certainly not without bubbles and crashes, it is unlikely that this is a factor in possible future stock price levels. Lower dividend yields are not necessarily an indicator of lower total returns.

There are other reasons that are more likely the cause of this trend toward lower yield payouts.  Part of this is based on US tax policy.  Another is the culture of US corporate management that has opted toward share repurchases instead.

In the US, there is a bias in favor of long-term capital gains over receiving dividends and paying income taxes.

When dividends are paid out all stock holders receive the income and are subject to tax. When management opts for a “share repurchase” program, only those who tender their shares are paid out.  So this may be more agreeable to investors who are trying to manage their tax bill from investing. For those who are longer-term stock holders, they may receive more favorable capital gains treatment by holding the stock and waiting simply for appreciation.

Admittedly, there may also be an incentive by management not to declare dividends so that they can hold onto the capital to “reinvest” in the business – which may or may not be a good thing.  (The same argument can also be seen in political terms in Washington when both parties are arguing about whether or not to have tax cuts).

And management may also have an incentive to repurchase stock because such programs provide the company with flexibility to change the terms – something that is frowned upon if management were to lower or cancel a declared dividend.

How to Use Dividends in Your Portfolio

In any event, using dividend-paying stock is something that makes sense in retirement portfolios.  To provide tax efficiency, it makes sense to include these in your qualified accounts (like IRAs).  And to boost income, it makes sense to add global dividend-paying stocks which tend to have higher yields and payouts.  Nothing in these current research notes indicates that the lower US yields and payouts are an indicator for lower future stock prices.  There are enough other things going on in the economy locally and globally that can impact do that.

To Build a Better Mousetrap or Get More Information

For more ways to build a retirement income portfolio, please feel free to give me a call directly at 978-388-0020 and stay tuned to the company website for upcoming webinars that will cover this topic too.

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College costs continue to escalate.  The burden on families grows every year.

Even before the Great Recession trying to balance the competing and emotional needs of paying for college while trying to save for retirement was a struggle. Let’s face it: Paying for college is as much a retirement planning issue as anything else.  Don’t ever forget that.

So how much is a college education worth to you? The average price keeps going up and is the only part of the economy not showing any slowdown in price increases (besides gas prices of course).

  • Average public 4-year school tuition is now $16,000 per year
  • Private colleges are at $32,000 per year
  • Elite private colleges are near $50,000 per year

And this doesn’t include tuition, room, board, fees and “extras.”

Again, how much is this worth to you? Will you be satisfied eating Mac and Cheese or working as a Wal-Mart greeter during your “Golden Years” knowing that your child got the most expensive education that money could buy?

If the answer to that is “hell no,” then you’re at the right place.

Become an Informed Buyer of Education

Welcome to my latest blog where I will endeavor to bring you insightful and creative tips on how to be an informed consumer of higher education.

Trying to get a handle on what to do is difficult.  Let’s face it:  Unless you’re Octa-mom or do this everyday, you’re flying blind when it comes to figuring out how to manage paying for college. Have you actually seen a FAFSA form lately? Do you really want to?

Sure, if you have a couple of kids within a couple of years of each other, the rules might be the same.  Sure, you can rely on what your neighbors did for their kids who graduated a few years ago.

Or you can have a plan tailored to your situation.

Look, just like tax laws, financial aid rules and how college admissions officers work their magic change every year.

So you may as well have a plan and be a part of making it happen.

This blog and my website are here to help.

Stop by and let me know your thoughts.  Shoot me a question.  And feel free to try out the exclusive college planning service website on your own. And then let me know when you’re ready to get serious about this by calling me directly at 978-388-0020.

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This is a common question from many folks.

There are many valid reasons to consider a 401k rollover.

While changing jobs can be stressful and life can otherwise get in the way, you really should not neglect this.  Oftentimes, out of sight is out of mind and you could be losing money and not even know it.

Costs

While it may not seem like it, you are paying for your funds to stay with your old employer’s sponsored plan.  You just don’t see it.  Fees for employer plans are not very transparent.  While you may not see an actual bill, your employer is probably paying for the administration of the plan through hidden fees assessed on the balances held in it.

I have seen sponsored plans that had these back-end hidden fees and charged the participant a piece for each contribution.  A little here, a little there all adds up.  And the more it is, the less there is to compound for your retirement.

While there are few things that you can control in life and investing, fees are one of them.

In a rollover IRA, you’ll have more choices of platforms which may offer low loads and costs so you can keep more in your pocket.  So control what you can when you can for successful investing.

Choice and Access

While some employer plans may offer a variety of funds which may be top of the line, you’re still limited to the menu selected by your employer.  More often than not this is influenced by the broker associated with the plan.  And this can be influenced by the restrictions placed on the choices by the broker’s company or administrator because there may be an incentive to fill the menu with one fund family.

I’ve seen plans offered through national payroll companies that required more than 50% of the fund choices to be from one particular fund family.  Not every choice in a management company’s fund line up may be stellar so you’re limiting yourself by staying with the old plan.

When you rollover you’ll have a much larger universe to choose from.  (Like most independent fee-based advisers, my registered investment adviser company has access to more than 14,000 non-proprietary mutual funds with no loads or loads waived).  You’ll typically even have access to individual stocks, bonds, Unit Investment Trusts, Exchange Traded Funds and bank CDs.

The Self-Directed IRA Option – Not Available in Your 401(k)

Have you ever considered investing in something besides stocks, bonds or mutual funds? Maybe you might want to invest in real estate or buy judgments or invest in a business by being its lender or providing a friend with start-up capital.

Well, you can’t do that with a typical 401k plan.  But you can with a self-directed IRA.  And such an IRA can’t be done through the Big Box financial firms.  There are specialized bank and non-bank custodians who handle such transactions and work through independent financial planners to help their clients learn more about such options.

Risk Controls & Broader Choice of Investment Strategies

While you may have online access to your company-sponsored plan so you can make trades or switches of your funds periodically, there really are no risk controls that you can use given the limitations of the platform the 401k is using.

Let’s put it this way:  Investors make money when they don’t lose it.  At least that’s my working philosophy.  Having options and systems in place means that you stand a better chance of protecting your retirement nest egg.

It’s always easier to not lose money in the first place than it is to try to make up for lost ground.  Your money has to work harder to get back to breakeven — much less get ahead for your retirement goals.

Consider this:  If you think that Treasurys or munis are in their own bond bubbles, what can you do to protect yourself through your 401k?  Probably, not much.

But in your own IRA you’ll be able to build a more all-weather portfolio that includes inflation hedges like convertible bonds, foreign dividend-paying stocks, master limited partnerships or even managed futures.   All come in mutual funds or ETFs which offer the advantages of diversification without the tax and cost structures of direct investment options.

Want to lower costs and control your investments more? You can even buy individual corporate or taxable municipal bonds and build an income ladder with the help of a professional financial planner.

Or maybe you want to minimize the impact of another downdraft in the market.  Using ETFs and trailing stop-loss orders you may help protect your gains.  Not an option in your old 401k.

So when you roll your account over, you’ll also have access to professional help, tools and direct management options tailored to your specific needs that you just can’t get within your old 401k.

Actionable Suggestions – Things to Consider:

iMonitor Portfolio Program: We prepare the allocations, select the funds or other investments and monitor.  We will make changes and rebalancing decisions as needed for you.

Money Tools DIY Program: We prepare the allocations and select the funds.  We will offer recommendations on Exchange Traded Funds as well. Periodically, we send you updates for rotating funds or rebalancing. You manage the funds directly on whatever custodian or trading platform you choose.

For more information, please call Steve Stanganelli, CFP® at 978-388-0020 or 617-398-7494.

Check out the website and newsletter archives for more on this and similar topics:  www.ClearViewWealthAdvisors.com

Adapted from ViewPoint Newsletter Archive (January 20, 2011)

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No doubt about it.  This has been a very rough winter that we lived through here in the Boston area.

While the calendar has turned to spring, many of us are still trying to fix the damage left behind by snow and ice from so many winter storms.

As I write this it still seems like we have imported the weather that Seattle or Portland, Oregon might be know for (even if it is true that Seattle has more sunny days than Boston). It is cold, overcast and wet.  Not the best days for cycling (my other passion besides Spencer and Kristin hanging out on the side panel here).  Nor is it good weather to hang out on the back deck which is something that I like to do during my lunch breaks.

But even if the weather were cooperating, I would not be able to use my deck. Why?  Well, let’s just say that Mother Nature left me a souvenir and a reminder about her power.

With all the snow and ice that we got, it was hard to keep up and one too many snowstorms (coupled with a builder who decided to save money on lag bolts) finally collapsed the deck sometime in February.

I came home to a note from my neighbor – Don’t go out on your deck.  Not that I was planning to go out in the middle of a dark night. But that is where the gas grill was located and I guess if I was a grilling fool I might go out and it would have been a long way down after that first step.

Mother Nature is still flexing her muscles especially along the Mississippi River.  Now my deck is a small thing compared to the devastation left behind in the wake of multiple mega-tornadoes that crossed through the South sort of like General Sherman’s March to the Sea and swollen rivers now drowning hundreds of acres of farmland and threatening homes along the Mississippi.

But it is instructive.

A Teachable Moment

Let’s just say that you shouldn’t leave anything to chance.  Sure, you may have a homeowner’s policy and you renew it each year.  But don’t assume that the coverage that you had last year is going to help you this year.  And you really need to review your policies with a qualified agent (or a good financial adviser) regularly.

Do you really have the right coverage?  After you file a claim is not when you want to find out that you’re not covered.

I’m reminded of my neighbor – the same one who left me the note – who had his basement flooded after an ice storm and the power and his generator both went out.  He ended up with an indoor pool in his basement when the sump pump stopped working.  He didn’t know that he could have had a rider on his policy to cover sump pumps.  That was probably a $5,000 mistake for a $50 to $100 rider on his policy.

The Insurance Claims Process

So after my little incident, I called my agent to file a claim.  The insurance company had been very prompt in sending out paperwork and an adjuster.

Because it was tax season, I was unable to get way from the office to meet with the adjuster.  I described the damage to him including the generator located under the deck and the gas grill that was on it. He took his notes but pretty much did his thing when he inspected the property.

In the end, the insurance company adjuster filed his estimate with the insurer and I received a copy.  The insurer quickly cut a check for the amount shown on the estimate.

But I reviewed the estimate and noticed discrepancies.  The dimensions of the deck on his estimate were smaller than the actual size.  There was no note about the higher cost composite decking material that I had.  Instead the estimate covered replacement with regular wood. There was no notation about the damages to the generator and electrical work needed to reinstall it.  Nor was there any allowance for the damages to the items on the deck.

Now I understand that trying to inspect damage when snowbanks are four feet high around the deck and the deck itself is covered makes it really difficult to get a proper view of the damage. Nothing nefarious is going on here. And to their credit, the insurer did note that they would send out the adjuster again.

But there is no incentive on the part of the insurer or their adjuster to come back out.  As far as they are concerned the property damage claim is settled.

This is why it is all the more important for you as a homeowner and policyholder to protect yourself.

How?  Get professional help on your side.

Enter the Public Insurance Adjuster

OK.  You like your insurance company. I’ve seen the ads.  They offer great service and rates. The ads are cute sometimes. And in most cases, the insurance company estimate is more than fair.

But you owe it to yourself to get a second opinion. (Heck, that’s good advice on most things in life especially those concerning money).

This is where you call in the help of a Public Insurance Adjuster.

In my case, I called on the help of  Matthew Alphen of Lynnfield, Massachusetts.  I first met Matt years ago at a Kiwanis event and stay connected to him through BNI connections we shared.

Like other Public Insurance Adjusters, Matt is licensed by the state’s Division of Insurance. He represents consumers with claims.

He came out and did his inspection and his cost estimate is higher.

Granted the deck wasn’t covered in snow by that time so he didn’t have to trudge through the snowbanks that once surrounded it.

Granted he and other public adjusters have an incentive to provide an estimate that may be higher than the first because of the way that he gets compensated. Like most public adjusters he receives ten percent (10%) of the amount a homeowner collects from the insurance proceeds.

But that also means he has an incentive to do a thorough job when representing a homeowner.

Reasons for the higher estimate:

  • He used correct dimensions
  • He noted the materials used
  • He researched the city building code and noted changes that would require upgrades needed once the deck is rebuilt

What You Can Do to Protect Yourself

Like I said: This is a teachable moment.

So here is a short list of actionable items to consider when dealing with insurance for your home. It can also be applicable for other types of insurance claims as well such as autos, rental property and business.

  • Review your policies regularly with your agent.  (While I do not sell insurance, I do help clients review their policy terms and coverages as part of my financial planning services). This is especially important to make sure that the agent has a correct description of the property and any changes or additions made are properly covered.
  • Make sure your coverage includes a rider for inflation protection.  Without it you may out-of-pocket to cover more of the repair costs yourself.
  • Make sure your coverage also provides for updated building code protection so that any repairs that need to be done to meet the new rules are covered.  Otherwise, it’s going to be out of your pocket.
  • When you have a damage claim call a public insurance adjuster for a second opinion.
  • Get a financial plan in place.  A good fee-based or fee-only financial planner can provide a second set of eyes to help you review and find the right kinds of insurance coverage.

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I know that it’s been a while.  And for those who have been dropping by, I appreciate your continued support. Hopefully, others will find their way back and find the fresh perspective enlightening.  In a world of confusion, my mission continues to be to bring to light fresh ideas on how to plan better and wiser for college funding, divorce, retirement and investing.

As I noted in my last post, I became a registered tax preparer and member of the National Association of Tax Professionals.  Through my company Clear View Wealth Advisors, I had acquired the assets and client base of XtraRefunds, an income tax preparation service located in South Lawrence, Massachusetts.

I Survived

My last post was titled “adventures of a tax preparer” and I had hoped to provide some ongoing commentary on how things were going.

Unfortunately, getting the business relocated to new offices, organizing the IT and systems, learning the software and providing tax prep services to walk-in clients took up most of my time leaving me with very little brain power to provide any commentary here.

This has truly been a learning experience.  And I truly believe that it provides me with added tools and perspective to be a better financial adviser to individuals and business owners.

Bringing Financial Planning Services to the Masses

One thing that I had learned as a banker (I was a mortgage banker for more than 18 years you may recall) is the truism of the expression that a bank will gladly lend you money when you don’t really need it.

The same holds true for financial planning.  As a former representative of a wirehouse broker-dealer, I found that everyone wanted to give advice to the very rich and those who are well-off. But more often than not those who had less than some minimum amount of money were shunned and pretty much told “come back when you have more.”

That’s why I formed my financial planning practice as an independent registered investment adviser firm.  People need help at all stages and should not be left out in the cold just because their bank balances don’t have enough zeroes.

This is what I noted on my website and what I truly believe.

So I saw the integration of a tax preparation service as a way to help individuals by being there to offer financial planning tips and services.

Still Working Through the Growing Pains

Time will tell if my ideas in action make sense.

But from the stories that I heard I know that people of all income and education levels can benefit from having access to an objective financial professional who is not going to simply try selling them something.

Cost of Avoiding a Bad Mistake: Priceless

So I created financial plan program options for folks to use like the Advisor-On-Call program: pay one fee for the entire year and get access to me to answer any question on any issue during the year.

I know the need is there. Someone came in to see me and told me about her sister who lost everything when her apartment in Worcester burned down.  She didn’t have any renter’s insurance.  This was  a learning experience and I was able to teach the client why she needed the same type of coverage for herself.

Back in the Saddle

Now that tax season is over and the calendar has turned to spring (despite the weather I see outside my window), I am back on the bike saddle as well.   It’s usually on these long rides I do solo or with my cycling club that I get to clear my head and come up with new topics to write about here in the blog or in my newsletter.

Some of the wisdom that I expect to share with you over the coming weeks:

  • How to build a better retirement income plan using the bucket strategy
  • How to save on the cost of college even if your kid is a senior in high school
  • How to lower the cost of divorce in the long-run by selling the family home
  • How to get better yield outside of a bank money market

Thanks for stopping by and please keep on checking in.

And as always, your comments are greatly appreciated as are any questions or issues or story ideas that you want me to address.

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