Volume 3 issue 2 web

April / May 2014 Volume 3, Issue 2

Do YOU Have A Safety Net?

By: Raymond J. Ohlson, CLU, CRC

Playing it Safe “Observations 2” In sixteen years of formal education – from kindergarten through college - not once did I get to experience a “Snow Day”.

By Norm Wilkens

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Safe Retirement “Why Is Social Security Planning Very Important?”

The first monthly benefit check was issued in 1940.

What people didn’t realize at that time was that Social Security benefits would be one of their largest financial assets, if not their largest asset.

By Gary Ryan JD, LL.M., CLU, ChFC

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Personal Finance “Financial Alchemists & Venesectionists” The financial world today still has its own type of alchemists and venesectionists. The financial alchemists tend to misuse something called the Monte Carlo Method which they believe to be a kind of philosopher’s stone.

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he past few years have been an unusual time here in America. Many people lost a large portion of their retirement savings during the economic crash of 2008/2009. Many people took their money out at the bottom and simply didn’t put it back in. The result is that most people just did not save enough money and are now looking for a safety net – something that will protect them when they retire.

Some folks believe that the one “safety net” available to them is Social Security. Unfortunately, what was supposed to be a supplement for many retirees’ final years has now become the only thing keeping their heads above water.

That’s not a safety net. Social Security was never meant to be a retiree’s only income. Take a quick look at these recent statistics: Among recent studies, a 2014 “Retirement Confidence Survey” reports that 36% of respondents had less than

By Dr. Jack Marrion

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Personal Finance “Maximizing Qualified Tuition Program” Qualified Tuition Programs, commonly referred to as Section 529 plans (named after the section of the IRS Code), are plans established to help families save & pay for college in a tax-advantaged way.

By Thompson Myers & Associates Continue Page 14

Safety Pins “Your New Vacation Home: Paradise Found or Paradise Lost?”

As we enter the spring and summer of 2014 we can see interest rates are still at very competitive, historic levels and many resort markets present amazing opportunities for purchasers ...

By Rob Moore - Realty Agent

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Safety Pins ... “Do YOU Have A Safety Net?” - Continued $1,000 put away for retirement or other needs (my emphasis added)! Only one thousand dollars in savings! Incredible. You may even have seen this report recently in most major newspapers. But, as bad as that 36% figure is – and it is bad – only 20% reported having a thousand dollars put away in 2009 and only 28% just a year ago! It’s not getting better; it’s getting worse and rather quickly at that!

So what’s a person to do? It’s really pretty simple.

People have to quit messing around – quit believing in the Tooth Fairy – and start looking at guarantees – products that guarantee them a lifetime, realistic, livable income. Everyone deserves and simply must have a safety net.

Since you are reading this article, you probably have more than $1,000 put away, but chances are good that you just don’t have the potential retirement income that you’re hoping for. This month’s issue of Safe Money News contains lots of valuable information on how to get to that Promised Land. But, you are not going to have that opportunity to roll the dice if you are within five to ten years of retirement. Folks, it’s time to take some of your money “off the table” and play it safe. Go for that real safety net.

I’d encourage you to consider the living benefits of Fixed-Index Annuities. These lifetime income benefit riders are known by a variety of terms: Some companies call them “Guaranteed Income Withdrawal Benefits.” The bottom line is this: Unlike annuitization, this type of rider allows you to take a lifetime income from the annuity without losing control of your retirement asset. You can stop and start at any time, and your account value can continue to grow. The lifetime income rider assures

you that you will never run out of money or live too long. And you can get these payout’s either in the Single Life Income or, if you have a spouse at home, you can choose the Joint Life Income.

These products also have chronic illness, terminal illness, and confinement waivers that reduce or eliminate some of the most aggravating retirement fears: sickness and chronic and critical illness. It’s odd that one of the simplest products on the market – an indexed annuity with living benefits – is often either misunderstood or just not on many retirees’ radar. The Lifetime Income Benefit Rider along with the Chronic Illness and Confinement Waivers could just be the one product decision that truly provides you with your retirement safety net.

Think about it, and then give your Safe Money Places Agent a call for an easy-to-understand illustration about how you can protect yourself and your spouse quickly, easily, and affordably!

About the Author: Raymond J. Ohlson CLU, CRC, CEO & President of The Ohlson Group, Inc. and SMP International, LLC Mr. Ohlson entered the insurance business while completing his Bachelor of Science Degree at Ball State University. He quickly qualified for the Million Dollar Round Table (MDRT) of which he is a Life Member. He also received his Chartered Life Underwriter (CLU) designation from the American College in Bryn Mawr, Pennsylvania.

Mr. Ohlson, a former life insurance company president, currently sits on college and hospital boards and is a published author.

Raymond J. Ohlson can be reached at: Email: rohlson@ohlsongroup.com.

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Playing it Safe

Observations 2

by Norm Wilkens

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eminiscing a few months ago about some of my early experiences under the banner of “Observations”, I recalled some memorable events in my life and posed some thoughts for pondering. More observations are presented for you herewith.

What does it mean to be a millionaire? It seems I am on every huckster and promoter’s list because I keep getting notices that there are millions of dollars waiting for me at Western Union; Fed Ex; UPS; the United Nations; in most of the African nations and through

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charities scattered around the world. I kept a record for one week and was told I had inherited over eight million dollars! All I had to do was pay the freight on a package containing my first payment of five thousand dollars; clear customs on a trunk filled with significant dollars (again costing a small stipend); or pay to release a fund in my name by an unknown donor – all that was needed was my name, address and Social Security number.

How easy can it be to become a millionaire?

In sixteen years of formal

education – from kindergarten through college - not once did I get to experience a “Snow Day”.

When today’s children began taking days off because of ice and snow, I tried to remember a time this happened in my school days. There weren’t any. And, it wasn’t that a bus picked us in front of our house. For the most part, my trek to the bus stop covered about four blocks in rural Indiana. Sometimes the wait for the bus was over a half hour. Don’t even ask about the up-hill walk both to and from grade school when we lived in Madison, Wisconsin! ( Page 3 )

Playing it Safe ... “Observations 2” - Continued The cold, snowy days we have experienced this January remind me of the Winter of 1978, which according to local weather statistics, was our modern snowfall record. I do remember being held captive in our home for three days with the snow so deep we couldn’t go outside.

Fortunately, I had a client in a retail business, who was ahead of his time in predicting the weather. It was a sunny January afternoon when he

informed me that he wouldn’t be open the following day to meet with me. He told me that we were really going to be in for a big storm. I believed him and stocked up on groceries. It turns out that he was more accurate than the weather reporters!

she can’t get to them quickly.

This little mutt has made her way into my heart as she gazes up at me with those trusting, hungry eyes. Do you suppose it has anything to do with the morsels of food I slip to her during dinner?

These long, cold winter days with deep snow provide an interesting adventure for our family pet. Our Scotty-terrier mix pup has a hard time with the deep, packed snow. The pesky squirrels seem to know

One rewarding experience for braving the winter cold and snow in Indiana, rather than being a “snowbird”, is the opportunity to mentor young, college students. The upcoming generation is enthusiastic and

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Playing it Safe ... “Observations 2” - Continued excited to get into the real worka-day world. Even so, many have unrealistic expectations of how quickly they will succeed.

A high percentage feel that they should start making “big bucks” immediately after graduation.

My mission is to teach them that patience is a virtue. They will succeed if they stay the course and keep their eyes on solid goals. Rarely, do I tell them my first job was for fifty dollars a week, for a seventy-hour week, (and that was not the net!). They wouldn’t believe it, anyway.

Let’s move on … from snow and ice to warm, summer breezes.

I am a warm-weather fan. It is well known in my family that I start getting cold in September and don’t warm up until June!

Eagerly, I await the hot, muggy days of July and August. I am eager to fire up the lawnmower and cut the grass. No one

enjoys the aroma of cut grass more than I. If more than a few dandelions sprout, that’s o.k.

Won’t be long now … before I mount the Toro with a newly sharpened blade and a full tank of gas!

About the Author: Norm Wilkens A nationally recognized speaker and writer, Norman Wilkens has traveled to forty-seven of the fifty states speaking on topics of marketing, advertising and public relations.

His most noteworthy subjects include: Healthcare Marketing; Multigenerational travel and Baby Boomers - their contribution to society and economics. He is presently serving as Midwestern Contributor to California’s AAA WESTWAYS Magazine.

Among Wilkens’ current activities are the Butler University Alumni Board of Directors; Butler’s Central Indiana Alumni Chapter Board; Chairman of the Board of Visitors for the new Communication College of Butler; Board of Directors of Ruth Lilly Educational Foundation; Salvation Army of Indiana Advisory Board and as an Elder at Second Presbyterian Church of Indiana.

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Email: NormWilkens@aol.com

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Safe Retirement

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ocial Security has been around since the law was passed in August, 1935. The first monthly benefit check was issued in 1940. What people didn’t realize at that time was that Social Security benefits would be one of their largest financial assets, if not their largest asset. Because of this fact, it becomes very important for everyone to plan for the most advantageous elections (choices) of benefits upon approaching retirement age.

To make a proper selection of Social Security benefits, it’s important to understand the various age-related aspects under Social Security.

Various Social Security Age Rules Age 60

Age 62 Sixty-two is the earliest age a covered worker can begin to receive Social Security benefits. The benefit is 75% (70% for workers born after 1959) of the worker’s full retirement age benefit (generally between 66 and 67 depending upon your year of birth) (See chart below.)

1943--1954 1955 1956 1957 1958 1959 1960 and Later

66 66 and 2 months 66 and 4 months 66 and 6 months 66 and 8 months 66 and 10 months 67

Sixty is the earliest age to claim a widow or widower benefit if there are no minor children or the claimant is not disabled.

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Safe Retirement ... Why Is Social Security Planning Very Important? - Cont.

Age 62

Married Filing Jointly:

• 50% if the Social Security benefit is taxable if Sixty-two is also the earliest age a spouse of a the earned income exceeds $32,000. worker can receive a Social Security spousal benefit. The benefit amount for people born • 85% if the earned income exceeds $44,000. before 1955 is 35% of the workers full retirement benefit. For a spouse born after 1955 the amount Single: is lower depending on the year of birth. The • 50% if the Social Security benefit is taxable if minimum spouse benefit is 32.5% of the worker the earned income exceeds $25,000 full retirement benefit.

Age 62 Sixty-two is the earliest age a divorcee who was married for at least ten years can file a claim on the ex-spouse benefit. The ex-spouse must also be at least 62 years old.

Age 66 Sixty-six is the age to receive full retirement benefits for workers born between the years 1945-1955. (See the chart above to find the earliest age to receive the full retirement benefit for workers born after 1955.)

Age 66 If the worker has reached full retirement age of 66, the spouse can receive the maximum spousal benefit of 50% of the worker. The spouse must also be 66 to avoid the early deduction of benefit discount.

• 85% if the earned income exceeds $34,000.

Age 70 Seventy is the age at which workers, if they have delayed electing their Social Security benefit, receive the maximum payout benefit. The worker should begin claiming their Social Security benefit beginning at age 70. There is no financial gain by delaying past age 70

How to Maximize Your Social Security Benefits?

Many workers, upon reaching age 62, elect to begin receiving their Social Security monthly benefit. Some of the reasons given to start early with Social Security include: • a fear that Social Security may run out of money;

Age 66

• the loss of job;

Sixty-six is also the age when the Social Security rules stop penalizing a person who continues to work while receiving their monthly Social Security benefits. Before age 66, a worker’s monthly benefit will be reduced $1.00 for every $2.00 earned above a threshold for 2014. The threshold is $15,480.

• the need for extra cash, and

All or a portion of a worker’s or spouse’s monthly Social Security benefit is subject to Federal Income Tax.

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• the desire to retire early.

The average retirement age is the US today is 62. To enjoy retirement, everyone should consider various strategies to maximize their monthly Social Security benefits. In making an election, workers should consider their potential longevity plus the potential longevity of their spouse. There are several strategies that would help maximizing not only the worker’s benefit, but also their spouse’s benefit. ( Page 8 )

Safe Retirement ... Why Is Social Security Planning Very Important? - Cont.

Strategy 1: Delay Claiming The longer a worker delays claiming Social Security, the larger the monthly benefit will be for his or her life. How does this work? Every year a worker delays Social Security beyond age 62, the benefit increases, and between the ages of 66 and 70, the yearly increase is 8%. Therefore, planning to use other income or assets between age 62 and age 70 once a worker retires is an excellent strategy to substantially increase a worker’s benefit and provide a substantial survivor spouse benefit.

Social Security also has a cost-of-living adjustment (COLA) to help maintain your standard of living once the Social Security benefit begins. Delaying to age 70 does not cause a worker to lose any COLA increase between age 66-70. The cost of living increases help to reduce any longevity risks (living too long) or running out of money.

Strategy 2: File and Suspend If you are married, you can receive income immediately while also increasing the benefit by delaying your election to age 70, which also provides a large survivor benefit. However, the worker (the higher earner) must be at full retirement age to use this strategy. Once the older worker files with Social Security for benefits, the worker then suspends the claim, and the worker’s spouse (age 62 or above) makes a claim for spousal benefits. Keep in mind, if the spouse is younger than full retirement, the benefit will be reduced. This strategy provides the higher earner with an increase of 8% yearly until age 70.

The spouse receives the extra income from Social Security but has a choice to make upon

reaching full retirement age: whether to continue the spousal benefit or claim the individual benefit.

Strategy 3: Claim Now, Claim More Later This strategy requires that both spouses to have worked and both to qualify for Social Security.

One of the spouses must have reached his/her full retirement age or older. In order to maximize the benefit, the higher earning spouse should also be the oldest. The younger spouse elects to take a spousal benefit and defer or delay claiming his/her benefit until age 70. At age 70, the younger spouse switches to his/her own benefit (if higher).

All of these strategies work if there are no health issues or only minor ones. Each person’s situation is different; therefore, personal planning becomes very important.

How Can A Worker Increase Their Social Security Benefits?

The following are some ideas: 1. Work at least 35 years paying into Social Security.

2. Increase your earnings.

3. Wait until full retirement age to claim benefits.

4. If your current earnings are higher than years past, continue to work to replace lower year earnings with higher earnings.

5. Delay benefits to age 70.

6. Don’t earn too much if claiming Social Security benefits prior to age 66.

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Safe Retirement ... Why Is Social Security Planning Very Important? - Cont.

Other areas that you must consider in proper Social Security planning are: 1. Current health status of the worker and the spouse: If a worker is in poor health, it may be better to claim sooner than later.

2. Longevity factors: If your parents lived into their late 80s or 90s, you probably will too.

3. Other retirement income, such as pension benefits. Many people retiring do not have a pension benefit from their employer. If you are receiving a pension benefit then this benefit could help in delaying any Social Security monthly benefits.

About the Author: Gary Ryan, JD, LL.M, CLU, ChFC ...

Gary is Director of Life Insurance and Advanced Sales with The Ohlson Group, Inc. Gary received his bachelors degree in accounting and finance and his JD from the University of Mississippi. He received his LL.M., Master of Tax in Estate Planning from the University of Miami. He has a very broad background in the financial services industry.

Ryan has served in many executive roles in the insurance industry ranging from senior vice president of marketing to president.

Gary can be reached at gryan@ohlsongroup.com.

4. If you are still single, the possibility of claiming from a divorced spouse

Because Social Security planning is confusing and sometimes complex, we encourage you to let us assist you in reviewing your options.

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Personal Finance Financial Alchemists & Venesectionists

By Dr. Jack Marrion A few hundred years ago the world contained a number of alchemists whose main purpose in life was to find the catalyst, the philosopher’s stone that would allow them to change common metals such as lead and tin into rare metals such as gold and silver.

In attempting to do so they used processes and terms that sounded scientific, but they were so blinded by the belief that there had to be a philosopher’s stone that they ignored any and all actual evidence to the contrary.

A few hundred years ago the world contained a number of venesectionists or blood-letters that believed most illnesses could be cured by determining the correct amount of blood that could be withdrawn from the patient without killing him.

Even though the practice was effectively disproved in the early 17th century when it was scientifically shown that the underlying concept was incorrect, practitioners continued blood-letting for another three centuries.

The financial world today still Back to Table of Contents

has its own type of alchemists and venesectionists. The financial alchemists tend to misuse something called the Monte Carlo Method which they believe to be a kind of philosopher’s stone. The Monte Carlo Method simply uses a math formula over and over again containing historical data to see how often certain investment returns occurred. It is a good way to see what happened in the past.

Unfortunately, these financial alchemists believe the method also gives them second sight and the ability to see into the future, but it doesn’t. The Monte Carlo Method did not predict the stock market would fall for 2000, 2001 and 2002 because, in the past, the market had never fallen three consecutive years in a row.

The Monte Carlo Method did not predict that certificate of deposit rates would drop over 90% in five years, because rates had never done that before. The Monte Carlo Method does a very poor job of seeing extreme events – those that should most concern the typical person – and yet these alchemists often refuse to look out their window to see that a real hurricane is raging because their model says the skies should be calm.

When it comes to retirement these alchemists often attempt to perform a type of financial venesection by determining the amount of money that can be withdrawn from the financial blood without taking too much and killing the retiree. The problems with this approach ( Page 12 )

Personal Finance ... “Financial Alchemists & Venesectionists” - Continued are twofold. The first is the amount of “blood-letting” is largely determined by the alchemist’s blind faith in their flawed interpretation of Monte Carlo Model results – this is why their advice on how much can be safely withdrawn has varied so much over the years.

The second problem is there is no need to gamble one’s retirement in the first place because there are annuities that can provide a steady income that is never exhausted and thus never kills the patient.

Neither the alchemists nor venesectionists of the past were bad people, they were merely people so blinded by their beliefs that they ignored reality. Unfortunately, today’s world has many financial alchemists that give advice solely based on the faith that their models must be right. In fairness, often the stars align and the advice does not harm the patient, but it does not mean these alchemists have found the philosopher’s stone.

About the Author: Dr. Jack Marrion Dr. Marrion’s research on senior decision making and the financial world have been featured in hundreds of publications including: Business Week, Kiplinger, Smart Money, and The Wall Street Journal. He is the author of six books and a frequent media guest.

Email: jack@safemoneyplaces.com

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Maximizing Qualified Tuition Program Contributions

By Thompson Myers and Associates, PC Qualified Tuition Programs, commonly referred to as Section 529 plans (named after the section of the IRS Code that created them), are plans established to help families save and pay for college in a tax-advantaged way and are available to everyone, regardless of income. These state-sponsored plans allow you to gift large sums of money for a family member’s college education, while you maintain control of the funds. The earnings from these accounts grow tax-deferred and are taxfree if used to pay for qualified higher education expenses.

529 plans can be used as an

account where you have to pay tax on the investment gains and earnings.

How Much Can Be Contributed? Unlike the Coverdell Education Savings estate-planning tool as well, Accounts that limit the annual providing a means to transfer contribution to $2,000, Section large amounts of money 529 plans allow you to put without gift tax. With all these away larger amounts of money. tax benefits, 529 plans are There are no income or age excellent vehicles for college limitations for the Section 529 funding. plans. The maximum amount that can be contributed per Tax Benefits: There is no beneficiary is based on the federal tax deduction for projected cost of a college making a contribution, but education and will vary taxes on the earnings within between state plans. Some a 529 plan are not only taxstates base their maximums deferred while they are held in on an in-state, four-year the account, but are tax-free education, while others base when withdrawn to pay for theirs on the costs of the qualified education expenses. most expensive schools in This allows you to accumulate the U.S., including graduate money for college at a much faster rate than you can with an studies. Most have limits in

Personal Finance ... “Maximizing Qualified Tuition Program Contributions” excess of $200,000. Generally, once an account reaches the plan-imposed cap, additional contributions cannot be made, but that doesn’t prevent the account from continuing to grow through investment earnings and growth.

How Much Should You Contribute? Although there is no contribution limit other than the plan’s limit based on the cost of the education, there are some gift tax limitations that may influence the amount of your contribution. Contributions to Section 529 plans are considered completed gifts and are subject to the gift tax rules.

Under these rules, individuals can annually give away (gift) money to another individual, only up to an annual limit (double for a married couple), without triggering gift taxes or reducing their lifetime gifts and inheritance exclusions. The gift exclusion amount is inflation adjusted. For 2014, the gift tax exclusion is $14,000 per recipient.

Five-Year Option: Where contributions to a qualified tuition program exceed the annual gift exclusion amount, a donor may elect to take certain contributions to a QTP into account ratably over a five-year period in determining the amount of gifts made during the calendar year.

The provision applies only for Back to Table of Contents

contributions of up to five times the annual exclusion amount available in the calendar year of the contribution. Any excess may not be taken into account ratably and is treated as a taxable gift in the calendar year of the contribution. Thus, for 2014 an individual could contribute up to $70,000 (five times the 2014 annual exclusion amount), while a married couple could contribute twice that amount ($140,000) to the same individual. The gift would reduce the donor’s estate by the full amount of the gift by the end of the five-year period. Should the donor die before the five-year period elapses, any amount in excess of the allowable annual exclusions would revert back to the donor’s estate. Note: A gift tax return must be filed for the year of the contribution if it exceeds the annual gift tax exclusion and to claim this special exemption.

Don’t Overlook Additional Contribution Opportunities During The Five-Year Period: If in any year after the first year of the five-year period the annual exclusion amount is increased, the donor may make an additional contribution in any one or more of the four remaining years up to the difference between the exclusion amount as increased and the original exclusion amount for the year or years in

which the original contribution was made.

If you have previously utilized the five-year option, you may have the opportunity to make additional annual contributions since the annual exemption amount has increased in the past few years (see table below).

Year

2009-12 2013-14

Annual Gift Exemption

13,000

14,000

If you need assistance evaluating the benefits of a Section 529 plan and its impact on your estate plan, please give this office a call.

About Thompson Myers & Associates, PC Accounting Firm Thompson Myers & Associates’ accounting and payroll staff have been delivering professional services to small businesses in Central Indiana for over 20 years. Having worked with hundreds of small business clients, we have significant expertise with a wide variety of service businesses in Indiana. We have especially strong experience and expertise in working with businesses in the healthcare (medical, dental, etc.) and food service (restaurants, caterers, etc.) industries.

Phone Number: (317) 571-8080 Email: info@thompsonmyers.com Website: https://www.thompsonmyers.com/

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Safe For Life Choosing a Safe Summer Camp for Your Kids - By Steve Dinnen

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hink about it. Summer’s coming. What are you going to do with your kids? You could watch them play video games for weeks on end, or you could send them off to summer camp where they’ll learn arts, crafts, swimming, and hiking. You, or more likely, your children or grandchildren, can have a safe and uplifting summer by attending camps that stretch from Maine to California. An estimated 27,000 of them nationwide cater to a huge assortment of tastes and capabilities.

Americans have a long tradition of sending their children to summer camps to commune with and learn a bit about nature. America’s love of sending children to camp got its official start Back to Table of Contents

in 1876 when a Pennsylvania medical doctor founded the North Mountain School of Physical Culture. Now, we have thousands of day camps and overnight camps and those that specialize in teaching kids about music, sports, or even math. Some camps cater to religious or ethnic preferences, and some address children with medical issues.

My first – and thankfully only – encounter with a snapping turtle came when one of my pals hauled one out of the Tippecanoe River where we had gone to experience a little nature as summer campers at Culver Military Academy in Northern Indiana. I was a city kid who had never been on a river or fished or canoed or bumped ( Page 16 )

Safe For Life ... “Choosing a Safe Summer Camp for Your Kids” - Continued into ill-tempered turtles. But I guess that was the point of it – to get me out of my urbanized comfort zone and learn something about the natural world – how to enjoy it and learn from it.

You may already have a camp in mind, such as one affiliated with your church or synagogue, or local YMCA or YWCA. Word of mouth also works, too: My father selected a military camp for my two brothers and me because he knew people who had attended it as youths and figured a little extra discipline would serve us well!

But, if you don’t yet have a camp in mind for your children, a great place to start your search is www.acacamps.org, the website for the American Camp Association. It has a handy search tool that lets you sort through day or overnight camps by location, price, and religious preference. You can also look into specialized camps for music, for instance, or sports or other specialized kinds of activities.

Your kid can brush up on Italian or Mandarin during a four-week stint at the Lawrence Academy, in Groton, MA. On the other side of the country, at Santa Catalina Camps, on an island just “26 miles across the sea” off the coast of Southern California, your teenager can become an expert in skin diving, sailing, sea kayaking, and other assorted aquatic ventures, while humming the tune from that old Four Preps’ song! These are skills, many of which they will use for a lifetime, that your children rarely get in public schools.

In a 2012 story in The Atlantic Monthly, author Jared Keller cited researcher Michael J. Unger’s position that being placed in a minimalist environment away from the watchful eyes of parents can make children more resilient. “There are the simple challenges of learning how to build a fire, going on a hike, or conquering a high ropes course,” Unger wrote in Psychology Back to Table of Contents

Today.

Among the skills I acquired at camp were sailing, archery, target shooting, and an appreciation for the Native Americans who had lived long ago on the land where we now stood.

I also socialized with young people from places both far and near. My first roommate was from Venezuela, and I encountered my first Canadian at Culver. Kids showed up from Chicago and Cleveland and Ponca City, as well, and we all had to learn to get along in an unfamiliar, challenging setting.

I also learned how to march and obey a chain of command. Oh, and “spit” polish shoes! At that time, my father was a Lieutenant Colonel in the Iowa Air National Guard, and before every drill weekend he put me to work on his shoes. Hey! You don’t suppose that’s why he opted for a military camp?

So, give some thought to the idea of sending your kids to summer camp. It will be an experience they will remember for their entire lives, and they might even learn how to identify and avoid those snapping turtles they might encounter when they’re all grown up!

About the Author: Steve Dinnen Steve is a freelance writer specializing in financial and travel news. He received his Bachelors Degree from Drake University and his Master of Journalism from Oklahoma University.

Mr. Dinnen served as Sr. Business Reporter for the Des Moines Register, Business News Editor for the Indianapolis Star and served as Editor (freelance) for the Christian Science Monitor of its weekly personal finance column.

Email: paudel2001@msn.com.

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Safety Pins Your New Vacation Home: Paradise Found or Paradise Lost? - By Rob Moore So you’ve found a wonderful vacation spot, and you’ve decided to purchase property so you can return time and again. Or, perhaps, you wish to pass this slice of paradise along to future generations of your family as a retreat. In either scenario there are a number of things you can do to insure that your purchase in the resort real estate market is safe. Here are some issues you should consider so that your new piece of paradise is found and not lost!

First, be sure you have evaluated every financial implication of your purchase with a trusted financial advisor. Discuss what you think you can truly afford before you begin looking for your property. For example, your advisor will help you understand and prepare for some of the less obvious expenses associated with a resort property – expenses that can be much greater than those of a traditional property.

For instance, your property may require more frequent maintenance to protect the exterior of a home located at the beach. Or, if you choose a mountain location, you should be aware that any exterior Back to Table of Contents

decks might require heavy maintenance as often as every other year.

Labor and material costs are typically much higher in resort markets as well; therefore, do not underestimate these costs as you evaluate the pros and

cons of your decision. It’s not just the initial purchase price of resort property, but it includes all of the maintenance throughout your ownership.

Next, it’s essential that you have spent some time in the resort market in which you ( Page 18 )

Safety Pins ... “Your New Vacation Home: Paradise Found or Paradise Lost?” plan to purchase during all of the various seasons of the year. Such visits – even if only brief – will help you develop a truer picture of the area, year ‘round, and that it will fit your anticipated use.

Understanding the possible seasonal nuances will facilitate an informed decision-making process. Therefore, work with a local Realtor® to insure that you have a good handle on the market.

Many resort communities have designated areas that permit owners to promote short-term rentals of their properties.

However, other communities consider themselves more residential rather than commercial in design.

If your new property will truly be a second home for you and your family, and not rental property that you only occasionally use, then it may

be more logical to purchase property in a residential area of the resort market where shortterm rentals are prohibited.

On the other hand, if you will be renting out your property – even if only on occasion – you will need to understand some basic fundamentals to follow in evaluating any purchase decision where that rental income is part of the equation.

So, you should speak to multiple rental agencies in the resort market. Ask to see what similar properties in their rental program derive annually as their gross rental income.

Also, be sure to ask about any costs associated with the rental program and understand what your net proceeds will be after commissions, cleanings, repairs, and so forth. Many rental agencies will also provide a rental projection statement for a property as part of the your purchase

evaluation. Check around the market to see if this service is available, and then take advantage of the expertise and local market knowledge available.

If you are unable to find a local expert in the resort market, consider doing some of the research on rentals yourself.

Sites such as vrbo.com and homeaway.com are great resources to find out what similar properties as the one you are considering buying are renting for and how frequently they are renting. You can search by neighborhood and property type on these online rental sites. Many rental agencies provide a hybrid service to assist owners who choose to do some direct rentals but who still want the traditional agency experience and local support. Again, you should discuss this information

Safety Pins ... “Your New Vacation Home: Paradise Found or Paradise Lost?” with your financial advisor (due diligence) so that you have a full picture of that specific market and the options available.

If your planned purchase is a villa or condominium, make sure that you have a full understanding of the legal governance of the condominium regime. States have different requirements covering the management and funding of regime operations, reserves, and insurance coverage. Request to see two to three years of annual meeting minutes of the homeowners’ association along with two to three years of approved budgets. These documents will reveal funding trends and/or the need for major capital improvements that may be lurking in the near future. Being informed will help avoid costly surprises!

Are you thinking about sharing your new resort property with family, friends, or business associates? If so, you must insist that all aspects of the arrangement be memorialized in writing. For example, such items as: Will usage be based upon the percentage of the capital contributed? When and how can you sell your portion?

While some of these questions may be very basic, you would be surprised how issues not clearly spelled out in advance and in writing can become major points of contention down the road.

Following these simple tips and suggestions should serve you well. As we enter the spring and summer of 2014 we can see interest rates are still at very competitive, historic levels and many resort markets present amazing opportunities for purchasers

who are considering a primary home, second home, or rental property. As in all of your financial transactions – better to be safe than sorry.

About Rob Moore Rob graduated from Hilton Head Island High School in 1987 then continued his education at Georgia Southern University, earning a BBA in Management in 1992.

After a very short stint in the food and beverage industry, Rob began managing resort villa complexes in Palmetto Dunes, Leamington, Shelter Cove, and Port Royal for the past 21 years. He established a solid reputation for service, integrity, and an in-depth knowledge of the local area which is unrivaled. A transition to sales in 2014 was the logical evolution to allow Rob to share his passion for the Island on a more intimate level with those interested in buying or selling property.

Phone Number: 800-267-3285 Email: RobMoore@CharterOneRealty.com Website: www.charteronerealty.com/