Safe Money News: Volume 8, Issue 2

VOLUME 8, ISSUE 2, AUGUST 2019

LIQUIDITY AND THE ILLUSION OF CONTROL

RECORD KEEPING TIPS FOR TAXES

ADDRESSING RETIREMENT INCOME CHALLENGES

DOWNSIZING YOUR HOME

GROWING UP IN THE 1940S

HOW TO AVOID INTERNET SCAMS

TABLE OF CONTENTS PLAYING IT SAFE

3

LIQUIDITY AND THE ILLUSION OF CONTROL

By Dr. Jack Marrion

PERSONAL FINANCE

05

KEEPING GOOD RECORDS IS GOOD BUSINESS

By TMA Small Business Accounting

SAFE RETIREMENT

9

LIFETIME INCOME

By Raymond J. Ohlson, CLU, CRC, LACP

SAFETY PINS

14

IDENTIFYING INTERNET SCAMS

By Life Settlement Advisors

SAFE FOR LIFE

16 18

HOW TO DOWNSIZE YOUR HOME

By Sean Tienhaara from Life Transitions THE WAY IT WAS

By Norm Wilkens

PLAYING IT SAFE

LIQUIDIT Y AND THE ILLUSION OF CONTROL

By Dr. Jack Marrion Liquidity means the ability to turn an asset into cash. Having liquidity gives you the feeling of control, but liquidity provides both real control and the illusion of control. The financial reason for wanting liquidity from what are intended to be dollars left untouched until some future date, is the ability to cope with or avoid potential risk. If you have an unexpected financial emergency, being able to sell or transform an asset quickly to get dollars in your hands is real control. This is generally what is thought of when one thinks about their asset being liquid, but liquidity isn’t that simple.

Does liquidity also mean getting the money without a cost? If so, then certificates of deposit within their penalty period could be viewed as illiquid. Indeed, even money market accounts could be viewed as illiquid since federal law limits free withdrawals to not more than six per month. Typically there is a commission or fee if you sell a stock or bond – does this mean stocks and bonds are illiquid?

What is the time limit on liquidity? We use words like immediate or instant liquidity, but unlåess the money is in our mattress or wall safe we can’t get it this very second. You typically can’t get the money for two days or more when you sell securities; is this liquid? A check is called a demand deposit, but the bank can stop access to those funds for a week by saying they have concerns over “doubtful collectibility”. And if a week delay is viewed as liquid, why wouldn’t the two to four weeks it usually takes to get the

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check from cashing in an annuity also be liquid?

doesn’t happen. Indeed, as Investment Company Institute data shows time after time, the liquidity is used to sell at the And then there is the illusion of liquidity. bottom of markets and often to leap out of Typically a bank will let you cash in that CD rising markets. or make that seventh withdrawal from the money market account this month, but they The concept of liquidity is not as clear cut don’t have to. A bond sale settles in two as it first appears. If liquidity is defined days, unless you were trying to sell many as not having a cost then many annuities of the mortgage-backed bonds in 2008 would be excluded, but so would any ETF, for which there were no buyers. And, an stock or bond where a commission or extreme case, there was zero investment transaction fee is involved in the sale. If liquidity in the days following 9 -11. liquidity is defined as having instant access Although that was extreme, governmental to the funds then every investment is ruled authorities in some countries believe that out as well as many bank products. What some exchange traded funds (ETFs) could this all means is you need to ask yourself become illiquid during a market panic. how you define liquidity and what it means The financial markets, banks, and even to you. governments all operate on the illusion of liquidity believing there will always be buyers, enough people paying their debts About Dr. Jack Marrion and a government that will be able to ultimately bailout any crisis, but this is only Dr. Marrion’s research on senior true if people still believe the illusion. decision making and the financial The illusion of control imagines that you world have been featured in will exercise that liquidity well. In the stock hundreds of publications including: market the mirage is that the investor will Business Week, Kiplinger, Smart Money, and The sell out of the market just as it begins Wall Street Journal. He is the author of six books its fall – or will use the liquidity to keep and a frequent media guest. moving from liquid choice to liquid choice to maximize returns. The reality is that

PERSONAL FINANCE

KEEPING GOOD RECORDS IS GOOD BUSINESS

By TMA Small Business Accounting Maintaining good records is important to help meet your tax and legal obligations.

The right record-keeping system not only helps satisfy these obligations, but it may save you money and time. Here’s what to consider for your record-keeping system.

What Records Do You Need to Keep?

The first step is identifying the records you need to maintain. The obvious examples include leases, contracts, payroll and personnel records and a range of accounting and finance information, such as invoices, receipts, checks, payables and inventory. Please consult a professional with tax expertise regarding your individual situation.¹

How Do You Want to Keep Them?

Record maintenance can take three basic forms: • Paper-based: It’s old school, but maintaining records in file folders stored in a metal cabinet may be sufficient, though at the risk of files being damaged or destroyed with no backup.

• Computer-based: Maintaining records on computers save space and make records management easier. Consider backing up files and keeping them offsite.

• Cloud computing: Records are stored and managed on the internet, offering possible savings on software, reducing the risk of lost data and providing access from any location.

What Software Should You Use? The right software can make life more productive; the wrong software may cost you time and money.

When shopping for software, consider: • The size of your organization. Do you want an easy-to-use package, or are you able to hire a dedicated employee to take advantage of a more sophisticated alternative?

• What sort of training and support is provided? Without the right measure of either, your software may not be the productivity tool you envisioned.

• Is specialized software available? The needs of different professions can vary

SAFETY PINS

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PERSONAL FINANCE ... KEEPING GOOD RECORDS IS GOOD BUSINESS - CONTINUED

• greatly. Specialized software may have capabilities not available with more generic software. • What are its mobile capabilities? If you operate your business from the road, you may want your software to have robust mobile features.

Disclaimers: The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice.

Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019

The TMA Small Business Accounting, P.C. 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 foodservice (restaurants, caterers, etc.) industries.

Contact Info: (317) 571-8080 info@tmasba.com: tmasmallbusinessaccounting.com

SAFETY PINS

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Visit www.SafeMoneyPlaces.com for more information about The Safe Money Choices available to you in today’s marketplace

SAFE RETIREMENT

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LIFETIME INCOME

By Raymond J. Ohlson, CLU, CRC, LACP Most of us work all of our lives trying to accumulate a nest egg to take care of our families and ourselves during our “Golden Years.” It’s a tough job! We encounter lots of distractions along the way: money we need to by our first homes, start businesses, put braces on our kids’ teeth, pay for college tuition – the list is endless and, for the most part, necessary.

Most Americans take pride in creating a prosperous lifestyle for our families. We chase the American Dream attempting to create a more prosperous lifestyle for our children than we had when we were growing up. Then, we retire.

Retirement should be a time to settle back and enjoy a new stage of life, but for many of us, leaving the daily grind of work will be one of the most difficult transitions we will ever make. Not going to work every day can be frightening, but realizing that you are going to live the rest of your life off your savings and Social Security can be even more intimidating! This period can be the most challenging and difficult of all.

But it doesn’t have to be.

Here’s a way for you to reduce or eliminate any fear of about your financial future and develop your own lifetime income plan!

Fear of your financial future rests in your not knowing the answers to several important questions. We ask ourselves, for example: • “Where will the additional money

come from over and above my Social Security benefit when I retire?”

• Will that income last for the rest of my life?”

• How can I be sure?”

• How do I avoid making a mistake when planning for my retirement income?”

These and several others are typical and valid questions most of us ask ourselves as we begin to think about our retirement years. You are not alone!

Prior to retirement, we earned money – we were in the “accumulation phase” of life. We worked, earned an income, and tried to keep as much of it as possible after paying our expenses. At some point, we began to think about how we could keep more of that earned income – the “preservation phase” of life. And finally, when we do retire, we have reached the “distribution phase” – that period of life when we must live on the money we have “accumulated” and “preserved.”

Our retirement income, therefore, becomes more important than ever! We are no longer “accumulating” new money.

Instead, at retirement, we become recipients of income. We become beneficiaries of retirement income. One of our income streams is Social Security.

But from where does the rest of our income appear? It will come, of course, from our nest egg – the money we have preserved during our working years. ( Page 11)

SAFE RETIREMENT... LIFETIME INCOME- CONTINUED Today, retirement is quite different than it was for previous generations, and it will continue to change and become more difficult for future generations. Why? First of all, people are living much longer, so their money must last longer. They need a guarantee to keep them in the lifestyle to which they have become accustomed.

Plus, we have to factor in inflation.

Inflation at 4% (the past 20-year average is 3.6%) can have a devastating effect on our spending dollars. It’s also important to understand that the health care inflation rate is more than double! These three factors alone require far more individual planning for retirement than just one generation ago. None of us can afford to make mistakes at retirement. It’s different than making a mistake at age 26, 36, 46, or even 56. At those ages, most of us can still recover – we can accumulate additional money. But, recovering from a financial miscue at age 66 or older is far more difficult today.

Today’s pre- and present retirees need to have a plan and not just a product. Retirees need solutions and assurances. They need the services of a trusted advisor who can provide those guarantees. Yes, you read that correctly – guarantees – regarding your retirement income! Every person – including me – at or nearing retirement should participate in a complete review with a trusted advisor – a Safe Money Places™ advisor.

Each of us needs to determine a retirement income amount that we believe will be necessary to live in the style to which we’ve become accustomed. In the process of doing this planning with a trusted advisor, we need to be sure to adjust for rates of inflation and the potential increase in our life expectancy.

Then, we should implement this new plan and monitor its progress over the years – stay on top of the changes in the financial world and our own lives and the years roll

by. All of this activity requires a dialogue – a conversation – with a financial professional.

Each Safe Money Places™ advisor is dedicated to helping each client (that’s YOU!) determine the best places to put your money so that it is safe and so that you can take advantage of all of the legal tax advantages that could save you thousands of dollars in your retirement income. Safe Money Places™ advisors constantly study, participate in training (continuing education), and stay on top of the latest products from all of the companies out there. Accordingly, they can customize your retirement plan that will guarantee you an income for life!

Call, toll-free: 877-844-0900 today, to locate a Safe Money Places™ advisor in your area. There’s no cost or obligation whatsoever, and you’ll sleep better every night knowing you’ve got your own professional advisor on your side!

About the Author: Raymond J. Ohlson CLU, CRC, LACP 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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SAFET Y PINS

IDENTIFYING INTERNET SCAMS

By Life Settlement Advisors

The internet is a fantastic tool for seniors, as it provides the opportunity to stay in touch with family and old friends, as well as take advantage of the trove of information online. Though the web has plenty to enjoy, it can also be an unsafe place for unsuspecting individuals.

Hackers and cybercriminals use email, fraudulent websites, and viruses to steal personal and financial information, as well as outright steal money. When retirees are the victim of an internet scam, they lose between $600 to $1100 on average.

So, how can you surf the web without getting a fast one pulled on you? Here are some common ways to spot internet scams.

advantage of this. If you’re receiving offers that promise financial reward – especially for things you haven’t signed up for – you can almost always bet that this is a scam. A common version of this scam is the “advanced transfer scam” in which someone claims they can deposit huge amounts of money into an account after you pay a transfer fee. They may claim you’re the beneficiary of a will, solicit for donations, set up fake websites, or explain that they have money tied up in foreign banks. Regardless, if it seems too good to be true, it probably is.

You’re Being Asked for Personal Information

Someone You Don’t Know Is Contacting You

A common fraud tactic is known as “phishing.” Scammers will contact individuals posing as a trusted While the internet is often used to interact source, such as a bank or email with new people, criminals use this service, and ask for personal cloak of anonymity as a way in with new info. They may ask you to marks. Often times it begins with an email reset your password or provide or Facebook message from someone financial information. However, it claiming to know you or have your best is highly unlikely that your bank interests at heart. It may start innocently will ever ask for you to send this enough, but unless you’re sure of the kind of sensitive data via email, identity of the person on the other end, as this can be very insecure. If you’re it’s probably best to ignore them. Even if being asked for a password or personal they have a Facebook profile, it’s possible information, contact the company they that this was created as a ruse; experts claim to be and check with them estimate that there are nearly a billion fake directly. More often than not, they’ll Facebook profiles floating around. be able to confirm they did not send this message and that it can be ignored.

The Offer Seems Too Good to Be True Everyone dreams of the chance to get rich quick, and scammers take hearty

Staying safe on the internet is an important issue for seniors,

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as is protecting valuable retirement savings. By keeping common themes of internet scams in the front of your mind – whether it’s an offer too good to be true, a person you don’t know contacting you online, or someone asking for personal information—you can safely use the internet and all the benefits that come with it.

Article Written By: Leo LaGrotte Life Settlement Advisors llagrotte@lsa-llc.com www.lsa-llc.com 1-888-849-0887

SAFE FOR LIFE

HOW TO DOWNSIZE YOUR HOME

By Sean Tienhaara from Life Transitions

I look back with fondness on the years we spent visiting my mother-and father-in law in my wife’s family home. My father-inlaw was the city attorney and his wife was the editor for the local newspaper. The Christmas after Jan and I were engaged, I received a Webster’s Dictionary with a handwritten note that said, “I read a letter you sent to my daughter. I hope this dictionary can help”. I used that dictionary many times during my undergraduate studies and even into graduate school. A few years later we were concerned when Jan’s mom began to miss editing mistakes at the newspaper. Shortly after she was diagnosed with Alzheimer’s. During the next seven years, we helped oversee her care and she was able to spend her last days in their home with her husband of fifty years by her side. After her passing, Jan’s dad came to live near us and our five children in Fishers, Indiana.

The one huge problem we were left with was what we were going to do with their home filled with 50 years of treasured belongings.

This task was daunting, and more so because we lived in another state. After successfully navigating the difficult and emotional journey of downsizing their home, my wife and I asked each other if there were any resources to help people through this experience. Seeing an important, unfilled need in society, we founded Life Transitions, originally Senior Life Transitions, in 2009. In the last 10 years we have helped over 5,000 families with their downsizing and transitions needs. We would like to share with you a

few tips that we have learned along the way. Hopefully they will help you in your own journey.

It is never too early to start the downsizing process.

For many of us, the idea of downsizing causes anxiety and feelings of being overwhelmed. Simply put, sorting through possessions collected over a lifetime makes us face our own mortality. Peter Walsh, host of TLC’s Clean Sweep says, “It is so emotionally charged because this is not about the stuff, it is about dealing with fundamental issues of families and growth, and loss and love.” I remember one 95-year-old client who needed to move to an assisted living community. I could hear crying before we even entered her home. She looked at me with tears in her eyes and said, “This was not the plan.

I was supposed to go through that door in a casket.”

Downsizing can be an opportunity to redefine your life.

It can help you create a “best of the best” lifestyle. I have witnessed hundreds of people at the front end of their downsizing process who were overwhelmed, stuck or resistant to the idea, but in the end said, I wish I would have started this earlier.

I feel so much more free. One of our clients said to us, “I have been saving all my best stuff for special events. I’m now going to use my best for everyday”. Her downsizing has created a new liberty to use the best of her best.

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SAFE FOR LIFE ... HOW TO DOWNSIZE YOUR HOME- CONTINUED Set reasonable goals for sorting.

important for getting rid of chemicals, paints, etc. Goodwill, Salvation Army, Whether you have two weeks, two months Habitat for Humanity, and Big Brothers or two years to downsize, set clear and and Big Sisters will sometimes come to reasonable goals. When sorting, ask your house to pick up items you want to these questions: Do I love it? Do I need it? donate.

Will I use it? If you don’t “say” yes to one The more you give away the less there of these, the items go. is to sort & downsize. Jan and I recently Start with the room you use the least and spoke at the Home Economics Guild are not as emotionally attached to. recently and one of the ladies told us about her “Blue Light Special” give away.

For example; a pantry, a closet, a guest This creative home economist would room. This will strengthen you to tackle use holiday gatherings at her home as the area you’re more attached to. Mark opportunities to bring out all the things Brunetz, one expert on living clutter free she wanted to downsize. She would says, “The more you do, it and the easier place it in one room and invite family and it gets. It’s like a muscle that’s been friends to take freely. Giving things away dormant. Use it and it gets stronger.” As to family and friends can be an enjoyable you work your way through one area, you experience. will see progress and gain the confidence Challenging categories. Some items to go onto the next. Be patient with yourself. You can absolutely do this. that are tough to let go.

Purge early and often!

Tao Te Ching chapter 63 says, “Confront the difficult while it is still easy, accomplish the great task by a series of small acts.”

Trash costs a lot of money to get rid of in bulk – so start taking a few things out to the corner each week. Watch for your community’s HAZMAT days – these are

Jan’s parent were avid readers, belonged to book clubs and had lot collected many books. Books can feel like family. One place to donate books is your local library, used book store or charity. Last month we took hundreds of books to be sold at Half Price Book Store. All the books earned a little over $200, the exception was one Bible that sold for $1000.

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Many of us have too many clothes.

Remember the rule; Need, wear, love.

Do you love how it looks? Do you wear it? Most people wear only 20 % of the clothing they own. Most times when downsizing to a smaller home, closet space is at a premium. Measure your new closet space. Measure what you have in your current home.

Regarding family photos, Peter Walsh says “photos have a particular power and importance that make it feel like sacrilege if you throw them away.” This was one of the most emotionally difficult parts of downsizing Jan’s family home. Choose the best one or two and have the rest to be digitized for easy storage and easy access. This new technological age, all important documents can be scanned and stored.

Start a conversation with your family.

Have your kids tell you what they want.

Most people believe that their children and grandchildren will want their prized possessions, but that is often not the

case. Author Marni Jameson says, “Keep what you love and what nurtures you.

Hold dear your memories along with a few treasures from those who loved you and whom you loved. Leave a few treasures for those you love to remember you by… hold on to a heartful—not a houseful—of memories.”

You don’t have to do this alone.

Our company, Life Transitions specializes in helping people of all ages downsize, often when they are moving from one home to another. If you find yourself with such a need, please feel free to give us a call.

Article Written By: Sean Tienhaara Life Transitions 317-748-4633 sean@lifetranstions.today www.srlifetransitions.com

SAFE FOR LIFE

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T H E WAY I T WA S

By Norm Wilkens

just a little over five years old when Mary joined our family. She meant a lot to my sister and to me. Mary was a story-teller; a trusted buddy; a confidant; a playmate and was different than the two of us..

Mary was African-American. We didn’t understand what that “difference” meant.

To us, Mary was a part of our family – as much as we all were. We understood she was with us to take care of us, and to help my Mom with chores, but Mary held a position of pride and no prejudice in the family. She was as much a part of our life and living with us as was anyone else in Because of the length of the trip and the the family. As far as I was concerned, she heat of the day, it was determined we had equal status with everyone. I could would stop in Terre Haute, Indiana, for a take anyone being upset with me in the bite of lunch and a brief rest break. A small family, but Mary. If Mary wasn’t happy with what I was doing, it hurt me deeply. I think restaurant was selected in the center of I expected my Mom and Dad to get upset town, and the family with my Dad in his with me, but not Mary. However, my Mom Major Uniform and the rest of us in tow, and Dad made sure that my sister and I entered the restaurant and found a table for lunch. The waitress approached us and knew that Mary was to be respected, just as if they were giving the orders. stated quietly, but very firmly, that Mary, could not be served in the restaurant. She Mary was in early twenties when she would have to leave. arrived at Homecroft, our home prior to World War II, just south of Indianapolis.

Without a word, Mary eased out of her She had been married twice prior to chair and started toward the door. I joining our family, and had been sold followed quickly behind her out the door. by her father into marriage with her first The waitress looked toward my mother, husband while just a girl in her early and said, “The little boy didn’t have to leave!” My mother answered, “Yes, he did. teens. Mary told me once that she didn’t know how to cook for her first husband, You hurt his best friend!” Mom brought sandwiches to the two us in the car before and as a little girl, she thought mud pies were to be served and eaten. Both of her we drove out of Terre Haute. husbands had been killed in accidents Mary Sanford was my sister’s and my prior to her coming to Indiana. She was working as a servant for another family best friend and shield growing up. I was It was a very warm day in August 1944.

Our family, my Dad, Mom, Sister and Mary were on our way back to Scott Field, an Army Air Corps Base, east of Bellville, Illinois. We had been in Indianapolis on leave for ten days, and were driving back to base in our 1941 Chrysler fourdoor. My sister, along with Mary, and I were straddling a rubber tire between the front and back seats of the car. It held a position of honor because a tire, of any kind, was precious beyond words during the war years.

SAFE FOR LIFE ... THE WAY IT WAS - CONTINUED in Indianapolis when we learned of her wanting to find a different position. I personally felt that it was destiny that Mary found us, and that she was to become a part of our family.

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growing up. Mary stayed with the family for over fifty years, and grew old right along with my folks.

Mary’s health gave way in later years, and she went to a rest home in Kentucky.

Mary was responsible for my upbringing When she passed away in her late as was anyone in the family. I looked to seventies, my sister and I drove to her for guidance and consulting. She Kentucky for the funeral. Mary had always taught me the basics of cooking; how to paid her own insurance program out of her wash dishes and clothes properly; how to weekly pay. Her sister used the funds for play kindly with neighborhood kids and to other expenses. So, the funeral had not respect all races and religions. She would been paid for. As we were leaving after not tolerate any cussing, or swearing the funeral, the director, asked my sister of any kind. So, we just didn’t do it! We and me, “Who will pay for the expenses?” knew, however, that Mary was a woman of My sister stated immediately, “My mother “color” and consequently, would be treated will!” There was no doubt in her answer to differently outside of our home. We still the question. Mary was still a part of our went everywhere with her. We went to the family, and always will be. base movie theatre with Mary, but couldn’t sit with her because she was segregated from us. We traveled downtown with her on the streetcar, but couldn’t sit with her About the Author: at a lunch counter. We took her hand Norm Wilkens when crossing street corners, much to the dismay of on- lookers, but we didn’t care.

I learned many lessons from Mary.

The most important, I would say, was tolerance. She showed me the fortitude to withstand the pressure of those around me who were void of decent understanding and caring. Consequently, I grew up with no racial prejudice, and still refrain from having any to this day.

As we grew older and left home, we always knew that Mary was still a major part of our home life. She was there for our Mom and Dad, even though, they were now growing much older – the needs still existed. My sister and I were always happy to see that Mary was still a very active part of our family life even though it wasn’t the same as when we were

Back

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; Multi-generational 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.

Email: NormWilkens@aol.com

Visit www.SafeMoneyPlaces.com for more information about The Safe Money Choices available to you in today’s marketplace ( Page 17 ) ( Page 7 )