24 minute read
Money Matters
ABCs of ETFs
PLAYING WITH YOUR PORTFOLIO
Advertisement
BY LESLIE T. SNADOWSKY
F
For those taking baby steps into investing, ETFs, or exchange-traded funds, may be the shiny new toy you’re looking for. They trade live on an exchange like individual stocks, but at a lower cost. They also allow you to invest in a lot of different types of securities all at once. And, even though they are passively managed, some ETFs have shown to produce returns that rival mutual funds over time.
■ HOW IT WORKS
ETFs don’t sell assets, but they sell investment opportunities to profit off of asset performance. And it's that broad diversity of exposure to different products, stocks, bonds, commodities and currencies in varied economic industries that make ETFs so appealing to investors.
ETFs also offer a lot of transparency. You can track prices and performance daily on the Internet, and can learn what the ETF is investing in easily, instead of having to wait to read about it in a quarterly report. Generally, ETFs have fewer tax burdens. ■ SHORT TERM OR LONG HAUL
Stock ETFs can be considered as long-term investments. Commodity ETFs allow access to capitalize on a diverse group of physical assets like gold or oil, but you need to do some digging to see what the ETF actually entails, from asset ownership to equity stakes in subsidiary companies. Bond ETFs are considered low-risk investments and they don’t mature like individual bonds, International ETFs are low-risk ways to test the waters abroad and Sector ETFs allow for the opportunity to invest in the growth of an industry from real estate to marijuana without having to risk investing in a single sector-specific company that may go up in smoke. ■ ROI
ETFs offer a lot of advantages to investors including profit exposure to a variety of assets. ETFs trade like stocks and their price fluctuates throughout the day (unlike mutual funds). There is no minimum investment, and commission fees are much lower. They are also easy to buy and sell, usually online, and can help build a fixed-income for retirement.
But, you need to consider commission fees, and that your stake in an ETF may be harder to sell than a stock or a mutual fund. Plus, when an ETF liquidates, if not enough people buy into it, you may be faced with selling your shares short. ■ Do you know how much you can a ord? WE DO.
I’m not just an advisor. I’m your neighbor!
Having a neighbor that is a mortgage advisor means you can always borrow a cup of sugar with a sprinkle of home advice. Finance of America Mortgage o ers a wide range of mortgage products to suit most financial situations and budgets. If you are interested in purchasing a new home or refinancing an existing property, contact us today.
REQUEST A QUOTE AND GET STARTED TODAY!
JIM ATKINS
NC, SC, & VA Regional Manager Mortgage Advisor NMLS-133206 O: 843.837.5626 C: 610.212.5390 jatkins@financeofamerica.com
MARIELENA DIMATTEO
Mortgage Advisor NMLS-1981464 O: 843.949.4027 marielena.dimatteo@financeofamerica.com
1 Promenade Street | Suite 203 | Blu ton, SC 29910
©Finance of America Mortgage LLC is licensed nationwide | NMLS ID #1071 (www.nmlsconsumeraccess. org) | 1 West Elm Street, First Floor, Conshohocken, PA 19428 | (800) 355-5626 | AZ Mortgage Banker License #0910184 | Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act | Georgia Residential Mortgage Licensee #15499 | Kansas Licensed Mortgage Company | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker — NYS Banking Department | Rhode Island Licensed Lender | Massachusetts Lender/Broker License MC1071. Q3 2022 For licensing information go to: www.nmlsconsumeraccess.org. LocalBizSC.com 59
Are you all REIT?
INVEST IN REAL ESTATE WITHOUT OWNING ANY
With national rent and home prices hitting all-time highs, it could be a tough sell to find real estate you can afford and even harder to snap it up before someone beats you to it.
Instead of buying physical real estate, and dealing with all the brick and mortar headaches, you could invest in REITs, real estate investment trusts, or companies that own and operate income-producing apartment buildings, malls, warehouses, hospitals, hotels and storage units.
According to Nareit, the National Association of Real Estate Investment Trusts, REITs collectively own more than $3.5 trillion in gross assets across the U.S., representing more than 500,000 properties and have an equity market capitalization of more than $1.35 trillion. ■ HOW IT WORKS
REITs were created by Congress in 1960 to provide a real estate investment structure similar to mutual funds so investors can buy affordable equity stakes in real estate companies without having to own any pricey properties themselves.
REITs are required by law to pay out at least 90 percent of their taxable income to shareholders. That income is generated by rents and lease payments from real estate holdings. It’s because of this tax structure that many investors look to REITs for big payouts. REITs also can buy and finance real estate more competitively because they don’t pay corporate-level taxes.
To qualify as a REIT, a company must invest at least 75 percent of its total assets in real estate, and earn at least 75 percent of its gross income from rents from real property, interest on mortgages financing real property or from sales of real estate. They are managed by a board of directors or trustees, have a minimum of 100 shareholders and have no more than 50 percent of their shares held by five or fewer individuals.
Nariet found 145 million Americans own REITs through their retirement savings and investment funds. ■ APPRAISING THE OPTIONS
Equity REITs are companies that act like landlords. They own income-producing real estate, manage it and collect rent.
Mortgage REITs (mREITS) don’t own property, but they buy mortgages and collect monthly payments and earn income from interest. Hybrid REITs are a combination, plus they also own and operate commercial real estate ventures and mortgages.
REITs can be publicly traded like stocks; public, non-listed REITs (PNLRs) are registered with the SEC but do not trade on national stock exchanges; and private REITs are exempt from SEC registration and their shares do not trade on national stock exchanges. ■ ROI
While REITs have been shown to outperform the stock exchange and private real estate investments with consistent dividends, boast ease of purchase and transfer and display less volatile behavior, REITs do incur a lot of debt. And since they also distribute a large amount of their profits, they may be slow to grow. For the buyer, investors have to pay taxes on REIT dividends if not held in an IRA, and sometimes buying into a REIT, especially a non-traded one, can be expensive and limited. ■
Protect your family legacy and move forward with confidence.
Allow us to help you navigate this di cult path.
Dealing with sorrow is overwhelming. Atlantic Investment Advisory Group can help new widows and widowers demystify their finances during this most fragile time in their life.
WEALTH MANAGEMENT. RETIREMENT PLANNING. RISK STRATEGIES.
2 Park Lane, Suite 203 Hilton Head Island, SC 843.341.3300 AtlanticInvestorsHHI.com
The Gilded Age
GIVE YOUR PORTFOLIO SOME POLISH
BY LESLIE T. SNADOWSKY
Gold is a commodity that has been valued since the dawn of time, and, with a Gold IRA, you can profit from it and other precious metals including silver, platinum, and palladium as a qualified retirement investment. While a Gold IRA can be pricier to manage than a traditional or ROTH IRA, many don’t mind because gold is considered a good hedge against market uncertainty and inflation. Gold crowned the market at $2,074.88 an ounce during the Covid pandemic in August 2020, and again at $2,074.60 an ounce in March 2022 when domestic inflation woes were becoming evident. ■ HOW IT WORKS
Congress sanctioned the golden opportunity to use gold and other precious metals as securities in 1997. Gold IRAs are usually added to diversify an investment portfolio. The Golden Rule is that gold’s value usually goes up in times of economic turmoil, whether from a market disruption due to Federal stimulus initiatives to geopolitical unrest. As your grandmother probably told you, “gold will always be worth something.”
With a Gold IRA you can invest in physical coins, bullion and bars, or opt to cash in on a gold stock or mutual fund or an exchange-traded fund that tracks a gold index. If you choose the first option, you need to find a broker to buy the gold, that has to be approved by the IRS, and you have to find a licensed custodian, like a bank or a trust, to store it. You can’t keep your gold at home or in a personal safety deposit box. ■ GOLD STANDARD
While Gold IRAs are considered “alternative investments,” they can keep your portfolio balanced. When your stocks and bonds drop in value, Gold IRAs could make up the slack due to their inverse asset nature. Many advisors caution against putting more than a third of your retirement funds into a Gold IRA, because gold prices can fluctuate as well.
If you scrap the idea of investing in pure gold, you can still claim positions in ETFs, stock in gold mining companies, precious metals mutual funds and commodity futures. ■ ROI
You can roll over existing IRA or 401(k) assets to fund a Gold IRA, and Gold IRAs will show their strength when traditional markets start to decline. Plus, contributions made to traditional IRAs are tax deductible and you can withdraw tax free from ROTH IRAs.
But, all that glitters is not gold. Even though gold is one of the few commodities the IRS allows IRAs to invest in, it doesn’t pay interest or generate income and its value depends on price appreciation. And, because of the intricacies of setting up a Gold IRA, you may have to incur seller’s fees, custodian fees and storage fees. Last, when you reach the end of the rainbow, you’ll have to deal with cash-out fees. Some Gold IRA companies agree to pay wholesale rates, but expect to take a hit nonetheless. ■
What customers want, what they really, really want
LET YOUR CUSTOMERS CHOOSE HOW TO PAY
Pay phone 69 percent of retailers saw an increase in contactless payments during the pandemic, and 94 percent expect that increase to continue over the next 18 months. In-store or proximity mobile payments grew 29 percent in 2020 as mobile became the preferred method. In addition to mentoring and training resources, SCORE provides helpful information and research (see infographic on the right) to help small businesses make better decisions.
How customers want to shop and pay is constantly evolving and even though this graphic is dated 2017, these trends have held and reflect the market today.
What started as a desire for contactless payments is now an expectation as customers have mobile payment capabilities enabled on their devices and want to pay with their phones.
The coronavirus pandemic sped up digital payment developments worldwide, and the United States was no exception. Indeed, the United States saw a more significant increase in NFC (near field communication) penetration than other countries worldwide.
NFC is only one type of mobile payment, a category that can include mobile wallets used in a physical store and QR code payments. These payment types are also pushing the technology to include, in the near future, crypto and cash wallets like Zelle and Venmo.
“The mobile payment option is one of the most major payment shifts only accelerated by Covid,” said Tamara Bream, partner at Equity Payment Options. “Our customers want handheld terminals and contactless payments because their customers are demanding it. Many consumers don’t even carry cash or checks and only carry their phones.”
Small business owners are busy and wear many hats, so a new payment system may seem daunting. The mentors at SCORE and local payment processing companies can make the transition easy so even the smallest business can meet, or exceed, customers’ expectations. ■
Running a small business?
We’re in the business of helping you.
Free up your time. Our small business certified tax pros have an average of 10 years’ experience and are specially trained to handle your small business needs year-round. We’ve helped millions of small business owners do more of what they love by doing what we do best.
Taxes | Bookkeeping | Payroll
843 William Hilton Parkway | Hilton Head | 843-842-3838
How to save time and make money
IT’S EASIER THAN YOU THINK
Managing employees is labor-intensive. From scheduling M to performance management to payroll, it all takes time. So much time is eaten up in the day-to-day operation of a small business that there is little time left for marketing and customer relations management. What if we told you that you could manage your employees and marketing better and save time and make more money?
Whether you operate a one-person shoe repair store, a busy icecream shop or a multi-channel retail enterprise, you can work with your point-of-sale system provider to take your business to the next level. Your POS provider should act as a business advisor, not as a payment terminal salesperson.
We asked two leading payment processing experts which underutilized POS features can make the most significant difference for a small business. We asked about the Clover System because that system is one of the more modern and locally available systems. Clover terminals and technology are impressive and affordable.
EXPERT 1: CARLA RAINES
One of the most powerful but often underutilized features of the Clover system is the built-in loyalty program. A loyalty program may seem complicated to run but Clover does all the work and is included in the cost. A business can customize offers, enroll customers at checkout or in the app, award points, allow customers to redeem offers and provide feedback. This all can be custom branded so even the smallest provide feedback. This all can be custom branded so even the smallest business can easily present a professional image and rewarding probusiness can easily present a professional image and rewarding program. One of the most powerful features of a good POS system for gram. One of the most powerful features of a good POS system for a business is the customer knowledge it gives the business owner, a business is the customer knowledge it gives the business owner, and knowledge is power. A loyalty program uses that knowledge to and knowledge is power. A loyalty program uses that knowledge to create happier customers and more revenue.
EXPERT 2: JEFF MAINE
Managing employee shifts and schedules is one of the most cumManaging employee shifts and schedules is one of the most cumbersome and time-consuming tasks in running a small business. Clobersome and time-consuming tasks in running a small business. Clover’s Time Clock lets a manager schedule, manage and pay employees ver’s Time Clock lets a manager schedule, manage and pay employees all in one place. The app also will send employees alerts reminding them all in one place. The app also will send employees alerts reminding them about upcoming shifts, which helps with reducing no-shows and late about upcoming shifts, which helps with reducing no-shows and late arrivals. Time Clock integrates with your schedule to monitor labor costs, arrivals. Time Clock integrates with your schedule to monitor labor costs, keep track of budgets and view real-time sales in one place. Additional keep track of budgets and view real-time sales in one place. Additional employee management tools, like tip pooling and the commission calculaemployee management tools, like tip pooling and the commission calculator also save time for accounting. For our clients, time is money, so we work with them to get the most from the Clover system. ■
Cash or check
BY CARLA RAINES
Business owners are battling inflation and increased labor costs and are seeking avenues to reduce expenses. One option that many are adopting is a cash discount program that incentivizes customers to pay by cash or check, offsetting payment processing costs for business owners.
The cash discounts app for Clover will significantly trim down the annoying processing fees paid by a business. The app is fully compliant and easy to download and use on a Clover system. It seamlessly integrates with Clover Service plans – which means it’s accessible to all business owners – no matter what product or service you’re selling. The app does all the calculations and provides reports. By utilizing the app, a business will see immediate positive results to its bottom line.
Nowhere to hide
FREE APPS THAT KEEP TRACK
BY LESLIE T. SNADOWSKY
Gone are the days when calling was your only option. If someone can’t get to you at work by email, instant message, or text, messaging app companies like Slack stepped in to fill in the gaps.
Capitalizing on connecting coworkers with the information they need across multiple devices and platforms, SLACK (slack.com) is credited for transforming the way organizations communicate with its many Internet Relay Chat (IRC)-style features, including chat rooms organized by topic, private groups and direct messaging.
But Slack isn’t the only collaboration tool that boasts speed, usability and efficiency to keep you connected at the office and on the go. There is a bevy of free, hosted enterprise solutions guaranteed to find you, wherever you are. ■
CHANTY You can create and assign tasks on Chanty’s Teambook and use its channels/ public conversations, private messages, screen sharing and video and audio calls. It’s good for up to 10 users, includes 20GB per team, offers unlimited messaging and search history and a dedicated support line. chanty.com FLEEP This team chat and collaboration app focuses on project management with areas for tasks and pinboards. Every Fleep conversation has a task board where you can create tasks, assign them to the right people and track progress. You get unlimited messages and search and 10 GBs of storage. fleep.io MICROSOFT TEAMS This app is used by more than 250 million people at work, home and school. It integrates with Office 360, which makes it easy to share files and collaborate with up to 300 users. It includes channels/ team private messaging, a comprehensive message search, guest access, screen sharing and video and audio calls. microsoft.com ZULIP Offering real-time chat with email-style threading, Zulip stands out for its chat experience that helps users focus on messages that pertain to them (while weeding out the irrelevant ones). Some features allow staff to collaborate across teams without having to create more channels and you can subscribe to specific streams with topics (that are unique to this app). Free plans include 10,000 messages of search history. zulip.com
HOW TO MAKE A DIFFERENCE IN THE LOWCOUNTRY
BY KAREN CASEY
D
Did you know that Hardeeville in Jasper County and Bluffton in Beaufort County are the top two fastest growing cities in South Carolina in 2022, per the American Community Survey by the US Census Bureau?
Our community is ethnically diverse and with its continued growth, businesses need capital. According to the National Small Business Association, 41 percent of small businesses say a lack of capital is hurting their ability to grow. For America’s Main Street businesses, having access to capital means the difference between hiring and layoffs.
The pandemic exacerbated the needs of small businesses. While the various SBA programs, (Paycheck Protection Program and the Economic Injury Disaster Loan Fund), provided assistance, some minority owned businesses were bypassed by these programs. Other business owners were uncertain or unclear on how to apply for the SBA programs and some just did not know they were available. Beyond business owners trying to survive, the pandemic led to job losses and many people turned to starting their own business. Many of those businesses struggled.
How did SCORE SC Lowcountry help minority-owned businesses?
SCORE SC Lowcountry recognized that serving the entire community is critically important to its chapter. SCORE SC Lowcountry is a nonprofit that provides free, confidential business mentoring to clients that want to start or grow a small business in Beaufort, Jasper, Hampton, or Colleton counties in South Carolina.
SCORE SC Lowcountry saw the need to assist minority-owned businesses in its community and created the Minority Small Business Award Program. The SCORE Chapter created a committee of experienced SCORE mentors to develop this program. Michelle Gaston, a new member of the SCORE Chapter in 2021 and recently awarded the Rookie of the Year award for the chapter, jumped in and agreed to be the chair of this committee.
The committee networked with local community leaders and organizations to understand the needs of minority-owned businesses. Based on this feedback, the committee created the outline of this program and requested grants to fund these awards. Wells Fargo and Truist became the primary sponsors of the program. The committee asked local community leaders to participate as an advisory committee that would review and score all the applications and decide who should receive awards. Five local leaders volunteered for this very challenging role. They include: Anthony Brockington, small and minority business program manager, South Carolina Commission of Minority Affairs Brianne Buckner, teacher, Colleton High School – Colleton County Sheree Darien, executive director and founder of nonprofit, Second Chance Outreach – Jasper County Dr. Roy Hollingsworth, Hampton County Council member Eric Turpin, executive director of the Native Island Business and Community Affairs Association (Beaufort County)
This program was focused on the four counties SCORE SC Lowcountry serves – Beaufort, Jasper, Hampton and Colleton. Primary eligibility was applications from businesses that are owned 51 percent by Black, Hispanic, American Indian and Asian business owners and are starting or have a small business (fewer than 25 employees) in one of the four counties. The awards were up to $2,500 each.
High score! The
results of the Minority Small Business Awards Program were: 80 applications were received; 24 were sent to the advisory committee for scoring and interviews. Eleven were awarded a total of $27,500.
KAREN A. CASEY
(CPA, CFP) is a certified SCORE business mentor and is chair of the Partnership Committee.
What’s next?
SCORE SC Lowcountry performed a followup review and developed lessons learned at the end of this program. From the feedback, it was determined there is a need for business literacy training for small business owners. Business owners needed assistance in many areas including marketing, understanding financial statements and other topics. The SCORE Chapter is getting ready to launch the 2022 program and Wells Fargo has recommitted funds and the chapter is looking for additional grants to help expand this program as well as industry leaders who will be part of an expanded advisory committee and volunteers who can assist in mentoring and administrative roles within the chapter. ■
IMPACT ON THE COMMUNITY
The best way to measure the impact on the community is the feedback from the people who were involved and the recipients of the awards.
“I am overjoyed to be one of the fund recipients. This grant will be vital to the growth of my business. I can’t thank SCORE enough for recognizing the needs and hardships of small minority businesses and using their platform and knowledge to allow us to stretch and expand is unimaginable ways.” — Sonya G., award recipient “It was gratifying to be a part of the SCORE
Minority Small Business Program Advisory
Committee. The program itself provided assistance to underrepresented entrepreneurs seeking supplemental funding to grow their businesses. I feel that our efforts in supporting these businesses help create jobs, support families, and overall strengthens the community." — Dr. Roy Hollingsworth, Hampton County Council member, advisory committee “The expansion into Colleton, Hampton, and Jasper counties, the prescreening and mentoring efforts of countless SCORE SC Lowcountry volunteers, and the administrative efforts undertaken to make the program successful are a testimony to the dedication of our volunteers and their desire to help our minority communities.” — Michelle Gaston, SCORE mentor and chair of the Minority Small Business Award Program. SCORE Team
The anatomy of a press release
HOW TO EFFECTIVELY COMMUNICATE WITH THE LOCAL MEDIA
Editors are inundated with requests to write about everything from a company or prodE uct to a business leader or local volunteer to a lost dog or found cat. The most important, and often overlooked step, is to craft a compelling press release. To help with this first step, we have provided an outline of a basic press release. The difficult part is to write your release in such a way that it will capture the attention of an editor.
Send us your press release to info@localbiz.com with the subject line, "How's this for a press release." We will give you some free advice to make it better. ■
PRO TIP
To increase your odds of success, personalize or customize the release for each media outlet and follow up with each frequently after sending the release. It can pay to hire a professional public relations company that knows the local editor and understands what it takes to get published.
Basic structural components of a press release
1 2
3
5
6
7
8
9 4
1. HEADLINE Make it an enticing summary of your story. It should be two lines and written in Title Case.
2. SUBHEADING Provide a short detail of the story to add intrigue 3. DATE AND LOCATION Include the date and location at the start of the first paragraph. (BLUFFTON, July 1, 2022) 4. PARAGRAPH 1 A brief summary of your company and your announcement: who, what, when, where and why. 5. PARAGRAPH 2 Expand the detail, explain exactly what your company does, provide more detail on the announcement. This can be a quote from a leader or customer.
6. PARAGRAPHS 3-4 Explain the importance and support with data and sources, including quotes. (One paragraph may be enough) 7. FINAL PARAGRAPH Provide a quote, providing the company's perspective on the announcement. 8. BOILERPLATE Place your company's 'about us' paragraph here. It should be factual and not embellished with sales or promotional language. 9. CONTACT DETAILS Provide the contact details of the person whom the editor should contact for more information.
It’s nobody’s business but your own.
Boost Your Business
KEEP A COPY ON YOUR DESK AND GET ADDITIONAL COPIES FOR YOUR TEAM.
LOCAL Biz helps Lowcountry businesses not only survive, but thrive with helpful information, tools and tips delivered in a style that is easy to read, informative and actionable.
