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Category: Retirement

Investing in Uncertain Times

I know that many of you have been concerned about what will happen in the markets over the next few years. I wanted to take this moment to share some insight. I hope it quells your fears and concerns.

Remember to keep your short term money needs in short term investments. This is true in any market environment and for anyone of any risk tolerance. If you know that you’re going to need a new roof on the house in the next year, keep cash on hand for that!

What about the rest of your money? What if you are five years out from retirement or in retirement? How should you proceed?

It depends….
You need to do an analysis of your cash flow resources (pension, social security, etc) and the gap that you have to fill with your investments. Your investment choices will be an output of what your needs are. Sounds simple, right? It is, but it isn’t. With a universe of thousands of choices, which are the right ones for you? Don’t make the mistake and think that whatever your best friend is doing or the person at the cubicle next to you is doing is the best choice for you. Everyone’s situation is different. Have a financial advisor complete a review for you.

Ensure that you are optimizing your portfolio for upcoming turbulent times!

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.comThe opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, an independent investment advisor. Silver Key Wealth Management is separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org www.sipc.org

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Starting off your new year right

Happy New Year, my LGBT friends! Here are a few ideas to help you start off the new year on a good foot!
1. Make a folder for your 2015 taxes. As year end statements and tax reports arrive, put them in your folder.
2. Review your 2015 IRA contributions. Have you put in the maximum allowable amount? If you haven’t, you should.
3. Have you gone paperless? Many utilities allow you to go paperless for statements. Make the switch if you want to cut down on paper.
4. Tax returns only have to be kept for 7 years. If you have older tax returns shred them.
5. Furnace filters and batteries in smoke detectors – Yes, these are a pain to change sometimes. Smoke detectors with low batteries only seem to start chirping at 3am during the work week. If you haven’t changed the batteries for more than 6 months, swap them out for new ones.
6. Review your investment portfolio. Check that you’re properly balanced. Make adjustments, if needed.
Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners. IFP is a registered investment advisor. IFP and Silver Key Wealth Management are separate entities from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org  www.sipc.org

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Why paying off your mortgage early might be a bad idea

As a financial advisor, I have many clients ask me if they should use extra money to pay down their mortgage or invest the money. Let’s take a closer look, my savvy LGBT friends, at the math to see what makes sense.

The following is a hypothetical, purely for demonstrative purposes:

If you have a $250,000 fixed rate, 30 year mortgage at 4.25% interest, your total amount that you will pay over 30 years will be $456,018.
If you add $200 a month to your payment to be used towards the principal, you will pay off the mortgage in 23 years. Your total amount that you have paid will be $399,455.
Pretty good, right? You’ve saved yourself $56,563 in interest payments. That’s some real money!

What happens if instead, you invest the $200 a month in a tax free vehicle, such as a ROTH IRA?
For this hypothetical, we are investing $200 a month, over the course of 23 years (the amount of time we would be paying extra on our mortgage) with a 7% annual return on your investment. Keep in mind, this isn’t picking or recommending a specific investment, this is a hypothetical return. Whew.

So… $200 a month/23 years/ 7% annual return will get you: $133,059.

Holy cow! That’s quite a bit of money. Much more than the $56,563 that you would save if you were to pay more on your mortgage.

In this situation, where you invest the money, you are $76,496 richer!

This difference is even greater if you take into consideration the interest rate tax deduction you get every year. When you file your taxes, you have a line that allows you to enter how much you’ve paid in real estate mortgage interest.

Part of the amount that you pay in mortgage interest gets deducted from your taxes on your return. In effect, because you may potentially lower your taxes because of this deduction, your real out of pocket costs on borrowing that money isn’t the 4.25% on our hypothetical loan. It can be less than that. It depends on a myriad of factors, such as your income, etc. However, lets’ assume for a hypothetical, that your REAL cost to borrow money after your tax deduction is only 3%…
$250,000 mortgage/3% interest/extra $200 month – You still pay off the mortgage in 23 years, but you only save $32,927 in interest. This widens the gap between paying down the mortgage/investing even more!
The invested money will get you $133,059. The mortgage pay down will save you $32,927. That’s $100,132 more in YOUR pocket after 23 years.
I don’t know about you, but I’d rather have the $100,132 extra.

Disclaimer time: These are hypotheticals. Tax deduction is a hypothetical amount. ROTH IRA’s are something to discuss with a financial advisor to see if they are a good fit for your needs. You get my drift. We are playing with numbers. Also, this information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Want to play with some numbers yourself? Check out these financial calculators
As always, speak to a financial advisor about the best course for you to take.
Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners. IFP is a registered investment advisor. IFP and Silver Key Wealth Management are separate entities from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org. www.sipc.org

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Review your Retirement Plan Options

Does your current employer offer a retirement plan?
If they offer something above and beyond a 401(k), good for you!

Find out if this is a defined benefit or a defined contribution plan.

What’s the difference?

Defined benefit means you will get $X/month as a pension when you retire based on your salary and years of service. Pretty simple. They tell you the amount that you are getting.

Defined contribution plans mean that your employer will put in $X a year into a retirement plan on your behalf. It is usually a percentage of your salary. The difference is that they aren’t guaranteeing how much your will get at retirement. When you retire, the amount you get is based on how much they’ve added, and the performance of the account. You can choose to take a lump sum or an income stream as a pension when you retire.

Why do you need to know this? A couple of reasons… Frequently, when someone retires and they get a pension, they can elect to take a smaller pension amount and have the pension extend to their spouse after they pass away. This is great for financial planning purposes.

If you aren’t married and have a partner, many employers do not extend this benefit to the unmarried partner. Particularly if it’s a government agency, such as a school system, law enforcement, etc. This changes the financial planning landscape. If you are unmarried and partnered, you might be better off to take the lump sum upon retirement instead of the pension. Or take the pension and get additional life insurance.

Either way, planning is a little tricky in these situations. So find out what you have and how it works.

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org  www.sipc.org

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Easy ways to get your financial house in order

Happy New Year!

If you are like me, you want to start off the year with a bang – you promise to eat healthier, work out more and read more meaningful books… but what about getting your financial house in order?

Here are some easy things that you can do to improve your financial situation!

• Look over your bills!
o Is your cell phone plan what you really need? Maybe you can do with less minutes or data. Some employers have discount programs through designated providers. Ask your HR department if you have this perk – you could save 20% on your cell plan in some cases.

o The dreaded cable bill… Are you watching all of those movie channels? Do you need those extra channel packages? Assess what you watch and if you need it. I know folks who are ditching cable completely and going to internet streaming using a ROKU box. All you need is internet. No cable at all!

o Brown bag your lunch. I know. Eating out is easy and convenient. But if you go out for lunch twice a week, it can easily end up costing you $75 – $100 extra a month.

o Same thing for coffee. I bought a Keurig a few years ago and make my own “foo foo” coffee. A lot less expensive. And I control the calories.

• Up your retirement savings!

o Can you add more to your 401k? 401k additions are pre-tax. That means you have less taxable income when you increase your 401k contribution AND you get to have additional savings toward retirement.

o Open a Roth or Traditional IRA. Ask a financial advisor which option is best for your situation. You can even have monthly contributions sent from your checking account straight into your IRA. If you don’t see it leave the account, you don’t miss the money.

o Have someone look at your portfolio. You already have a chunk of money socked away? Great! Now the question is – Is it allocated properly? Talk to a pro to make sure you have it invested the right way.

• Take care of your stuff!

o I know, sounds silly, right? But clean out a closet or a kitchen cupboard. You might find things that you forgot you owned. Maybe you can use it. Maybe you can sell it on Craig’s List. Hey – a buck’s a buck. Dust doesn’t make you any money.

o Spring clean the house and make repairs. Not only do your fine items last longer if they are clean and taken care of, but how many times are you going to say to yourself “I should really fix that loose doorknob”.

o Take care of your car maintenance! Get an oil change. Rotate the tires. Wash and wax the car. Let’s face it. We don’t usually run around town looking like a dirty mess, and our car shouldn’t be that way either. Looking for some great car cleaning products? I highly recommend Meguir’s. The stuff is the bomb. (ok, am I the only one who says that anymore?)

It doesn’t take much effort to save a few bucks!

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, an independent investment advisor. Silver Key Wealth Management is separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org. www.sipc.org

photo credit: Anthony Quintano

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The 4 Boring Secrets to Accumulating Wealth

The secret is that it’s all really common sense in your approach.

1. Start saving when you are young.
We all know this can be tough. Young adults often have student loan debt, want to buy their first home, and retirement seems like a looooong way off. Many of us who are “old” selves would love to be able to go back and tell our “young” selves to save money!
Here’s a great example of how to become a millionaire:

If you put away $230 a month starting at age 21 in an investment that averages an 8% return, by age 65 you will have over $1,000,000. That’s only $230 a month.

If you start this program at age 31, you will only have $456,000 at age 65. You’ll only end up with half! You’ll still have a nice chunk of change at the end. The point is that an extra 10 years of compounding can make a big difference for the end result.

*This is a hypothetical and does is not reflective of a particular or actual investment. It is for demonstrative purposes only.

2. Don’t live to your means.
Whatever you bring home a month in pay, don’t spend it all. You don’t have to have the biggest house in the neighborhood. You don’t need the most expensive car. You really don’t need it. In the book “The Millionaire Next Door” Thomas Stanley found that the typical millionaire lives to 80% of their means, drives an older vehicle and doesn’t live in the high end neighborhood. They are living life for themselves, not to impress others.

3. Choose a career that pays well.
I know, this seems so obvious. There are many fields that are very honorable but just don’t pay well. It’s a hard reality. If you want to be financially independent, it’s tougher to do with a career that pays only $40,000 a year as opposed to one that pays $100,000 a year. Come up with a game plan to get yourself where you want to be financially. Your career plays a big part of it.

4. Pay yourself first.
Make saving for the future a priority. Get an emergency fund in order. Save up for retirement. These are the things that you will be extremely grateful for later in life. 65 year old you will look back and want to give 25 year old you a big hug and a thank you.

What is your plan to accumulate wealth?

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL Financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

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Why dollar cost averaging can be your best friend

What is Dollar Cost Averaging?

As an LGBT focused advisor, I get many questions about investing money each month to seek growth of your wealth. Dollar Cost Averaging is investing equal amounts of money into an investment over a period of time, and may be just the investment plan you need.

For example, let’s say that you want to contribute $12,000 into an investment account. You can deposit the $12,000 all at once. Another option is to Dollar Cost Average and invest $1000 each month.

Why not invest all at once?

For starters, most people aren’t very good at saving up a big sum of money then writing a check. Something always seems to come up and their money gets diverted to something else. That’s a pretty easy way to have your financial goals get off track.

If you set up your bank account to automatically have money sent to your investment account each month, then you don’t have to worry about writing that check. It’s done. Finished. Invested. A beautiful thing. Odds are that you going to “set and forget” and not notice the money being transferred.

Dollar Cost Averaging helps to stabilize your investments during a volatile market

Sometimes the market is up, sometimes the market is down. Sometimes your investment is up, sometimes your investment is down. If you invest some money each month, you are going to buy at both the lows and the peaks. It normalizes over time. That’s where the name Dollar Cost Averaging comes from. Your investment purchase price averages out over time. Actually, if your investment is going up over time, the price will go up over time. But when the market dips, you wouldn’t have put all of your money in at the high just to watch it drop.

How to get started

It’s easy! Most investment management firms, including mine, can set up DCA program for you. We can help you pick the right investment(s). You can pick the amount and the day of the month to invest. Then just watch your nest egg!

*Note – not all investments are available for dollar cost averaging. Some investments have a minimum amount to start, then you can DCA after the initial purchase. Please talk to an advisor for more information.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. Sharon.herman@silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor. Silver Key Wealth Management is a separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org www.sipc.org

photo credit: Robert Donavan

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Don’t be a Donkey with your Money!

Hello my savvy LGBT investors! We see it all of the time. Commercials for the sleekest sports car, the latest and greatest gadget, or whatever the newest “must have” item is.

Most people don’t even realize that they fall victim to corporate marketing and it may lead them down a bad financial path.
Advertising to purchase goods, whether it’s car, clothes, jewelry, or whatever, is a way to make you think that you can’t live without their product. That your hard earned money, your time, your effort is worthy for exchanging for their item.
Think about it. Let’s say you make $40/hr. Luxury car maker guy wants you to buy their car for $40,000. You have to give up 1000 hours of your life for that vehicle. Actually, you give up more than that, once your figure in gas, insurance, maintenance, etc. Is that car worth giving up a half of a year of work? Really? It will still get door dings. It will still depreciate. Most people I know get over the excitement of a new car within the first year that they own it. It’s just a car.

The same thing can be said for other high priced items. A Rolex watch costs from 5k up to 300k. I hate to tell Rolex owners this, but time is the same everywhere whether you own a Rolex or a Timex. Who made it a luxury brand? Rolex did with their expensive advertising! They convinced the consumer that they really need to have a Rolex watch to be somebody important! It’s just a watch.
You exchange some of your time on this planet for money
I understand that people get enjoyment from owning certain things. I certainly want people to enjoy their lives. All I am saying is that you are exchanging a certain amount of time on this planet for working to make money. Are the things you are buying worth the time you are exchanging? Think about it the next time you decide to make a big ticket purchase.

As a financial advisor, I frequently see people who “wear their money”.
They drive the fancy car, have the expensive clothes, jewelry, toys, and have nothing saved. They get 5 or 10 years out from retirement and start to panic. They didn’t have their priorities right.

Don’t be a Donkey!
I like donkeys. They are loveable and rather cute. I wanted to use a word that begins with an “A”, but this is a family blog. Just don’t be a dumb “donkey” when it comes to your money.
I’m not saying that you shouldn’t treat yourself to nice things from time to time.

But make sure when you purchase these things, they don’t detract from your most important financial goal – taking care of your future.
Save for financial freedom first. If you have extra money AFTER all of those things are set aside for, then look at how you spend your discretionary income. Don’t spend your money on expensive doo dads first, then figure out what you have left for retirement, college for the kids, etc.

What do you think of buying luxury brand items?

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com Sharon.herman@silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor. Silver Key Wealth Management is a separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org www.sipc.org

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Focusing on the LGBT community and why it’s important

People have asked me, why are you putting so much effort into this blog and website?
It’s simple, really. I love our LGBT community and want to give back.
My idea for lgbtinvesting.com came one evening when I was at a networking dinner at a local restaurant.

A financial advisor I didn’t know was sitting next to my wife. He started asking her what I did for a living. She told him I was a financial advisor, had my ADPA accreditation and liked to work with the LGBT community.

His response was, “Oh, I have some of those on the books.”
My wife said “Some of what?”
He said “Some of those. Gay people. I have them in my book of business.”

He spoke to my wife like we were things, not people. My wife was very angry, as was I.  I had only heard the tail end of the conversation, but pieced it together pretty quickly. I feel awful for his clients. This advisor doesn’t care about them as people. Heck, he hardly sees them as people. They probably have no clue as to what he really thinks, yet they have entrusted him with their life savings. That probably won’t be a successful relationship for those clients.

It was then that I decided to be a voice.
If I can pass on advice to help you further yourself financially, then I feel pretty good. I mean, if people are running up against a guy like “some of those” out there in the community, then how is anyone going to feel comfortable about having a personal discussion about financial plans and investing?

I’ve met many people who haven’t felt comfortable about coming out to a financial advisor.
Even though parts of DOMA have been struck down, and same-sex marriage is being legalized across the country, it doesn’t mean that everyone loves us… and let’s be honest; folks in the financial services industry have the reputation of being staunch conservatives who aren’t very supportive of the LGBT community. It’s really not a surprise LGBT folks are apprehensive. I’m stilling running into guys like the “some of those” that I met at that dinner. I’m sure people in the LGBT community are seeing it, too.

There are many couples who don’t feel comfortable telling all their business to someone who they aren’t sure accepts them.
They certainly don’t want to give business to someone who will use the money they make to support people who are against the LGBT community. Talk about shooting yourself in the foot! I’m betting if the clients of “some of those” knew what he said, they would be furious!

I want to provide the kind of guidance that will help you make decisions that will be fruitful to your future.
I want everyone to feel that they have a place to turn to get investment advice. I also want everyone to know they have an experienced professional available they can turn to, if needed.
So now you know why I started this blog and try to dispense good, useful information to everyone. LGBT investors need a place to call home.

Questions? I’m happy to answer them!

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
An ADPA (Accredited Domestic Partner Advisor) designated Financial Advisor can assist you with your financial planning and investment needs.
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

 

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2014 Top 5 Businesswoman of the Year Award

Thanks Tampa Bay Business Journal! You made Sharon Herman one of the top 5 Businesswomen of the Year for 2014 in financial services!

We appreciate the recognition and support the community gives us.

Award is based on community volunteerism, business principals and customer satisfaction.

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