Rain and bad weather happen. They are normal. Without them we would have only desert. Effectively dealing with variable weather conditions means being prepared.
Downturns in the markets and economy are also normal. The economy cannot grow effectively without a business cycle, which includes both sunny periods and times of rain. A single individual can control the economy no better than the weather. And an individual has only very limited capabilities even to predict either of them.
Being prepared to weather economic storms has several components.
• In the past on average you would have had better results venturing outdoors and participating in the growth of the markets than sitting indoors or on the sidelines. Just remember to have the appropriate clothing or portfolio.
• To construct an appropriate investment portfolio, you should assume that there will be both good and bad weather, always. Diversify so that you can have a good time in the good weather and not drown in the bad weather.
• Remember that it is possible to have a long stretch of bad weather or markets. Plan for it.
• Don't try too hard to outguess the weather or the markets - it doesn't work enough of the time to justify the effort. Without planning and preparation, chances are you will occasionally get soaked.
Here are some reasons why you may not be making a major contribution now: times are tough, you are saving for or spending money on college or a wedding or a home down-payment for your children. Or maybe family members - children or parents or others - need your help.
You might have concerns about the future. Will you have enough money to meet your lifetime need for income? What will be the future needs of family members that you might want to help? What about providing for your own future health issues and expenses?
To solve this issue, why not make your favorite cause(s) the contingent beneficiary(ies) of some of your IRAs (or 401(k)s or 403(b)s, etc.)? Your spouse/partner could remain as the primary beneficiary of the IRA so that you would both have access to that money during your lifetimes. After both of you have died, then the money would go to your cause.
Here are the advantages of this approach:
• If you need the money over your joint lifetimes, you have it. Money goes to your charity only after you are both done with it.
• It is really easy to do. You just need to get an IRA (or 401(k)) beneficiary form, fill it in, and then send it back. This is much easier than redoing your will.
• You can change your mind if you need to, simply by changing your beneficiary.
• You can do it on any scale, subject only to the amount you have in IRAs (or 401(k)s).
• You can easily leave a 5- or 6-figure amount to charity without materially affecting your children's inheritance.
• If you left this money to your children, they would have to pay taxes on it. Charities will not have to pay taxes.
If you want a way to amplify what you are already doing, seriously consider this method of contributing.
To answer these questions, I downloaded to an Excel spreadsheet the daily closing values of the Standard and Poor's 500 index since the beginning of 1950. (The S&P 500 is an unmanaged marker of the values of the 500 largest publically-traded U.S. companies.) From changes to the values I was able to calculate the daily swings. Every swing of more than 1% in the S&P 500 I identified as a large one. Here is what I found:
Daily swings are not new. Every decade has had 2-6 years of large daily market swings and also years of relative calm. This year is one of those with many large swings. The most recent calm year was 2006.
The size of the daily swings has gotten larger. Every decade since the 1950's has had at least 2-5 days over the decade of very large daily swings - more than 4%. The 1980's had 13 days of very large swings over the decade. The 2000's had 51 over the decade, 28 of which occurred in 2008. The first 9 months of 2011 have had 6 days with those very large swings.
Years with many large daily swings are not necessarily bad news. In fact, of the 23 years (over the last 61 years) with high volatility since 1950, 56% of them (13 years) resulted in overall increases in the market through the year.
Years with large annual changes are not necessarily the result of many large daily swings. So what effect do daily swings have on the net overall performance for the whole year? Annual returns varied substantially from year to year. The largest annual change in the market since 1950 was an increase of 40.5% in 1954, which was not a year of large daily market swings. The year 2008 was a close second with a decrease of 40.1%. (That year had the largest swings.) Other years with changes of 30% or more in the S&P 500 were 1958, 1975, 1995, 1998, 2003, and 2009. Four of these six years had large swings; two did not. All six of these changes were increases in value!
I believe that the stock market has more swings when there is more uncertainty about the intermediate- and long-term future of companies and the economy. The daily swings may have become larger for two reasons: first, there is more information available for investors to act on, and second, any changes can be acted on much more quickly. These changes in technology have amplified the normal market changes.
We do not know in what ways history will repeat itself. It is likely, however, that some years will continue to have large daily swings and some will not. Some years will have large annual gains and some will not. Unfortunately, no one can predict with any accuracy which will be which.
As proprietor of Plan for Life, Mark Fischer is required to post the following notice: Securities offered through Multi-Financial Securities Corporation, member FINRA, SIPC. Plan for Life, LLC is not affiliated with Multi-Financial Securities Corporation. Investors cannot directly invest in indices. Past performance is not a guarantee of future results. This information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
]]>1. Some of the unemployment is a direct result of structural changes in the workforce, caused directly and indirectly by the march of technology. Their affects will be long-term, i.e. they will last longer than the current business cycle:
2. There are and will always be jobs available. Some require technical training; some jobs support other more highly trained specialists. The Bureau of Labor Statistics, as listed in the AARP Bulletin, July-August 2011, says that the jobs in highest demand will be:
3. The leading edge of baby boomers has not yet retired. They are behind schedule, because in general they have not been good savers and their investments have fallen with the market decline in 2007 - 2009. Eventually, they will retire, and there will not be enough younger workers to replace them. There will then be a substantial shortage of trained workers.
Perhaps you are thinking of changing jobs or careers. Maybe you are thinking of an encore career where you can give back to your community and still be paid. Or you may have children or grandchildren who are looking for work. Even in these times of high unemployment there are many opportunities. When times are tough like now, you should do your research and get more creative in your job strategy.
General Disclosure Statement
Plan for Life offers securities through Multi-Financial Securities Corporation, a member FINRA, SIPC. Plan for Life, LLC, is not affiliated with Multi-Financial Securities Corporation. The views are those of Mark Fischer and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
Here are three ways of answering this question, for which you can use entirely different benchmarks.
a. Benchmark: S&P 500 Index. Here you could compare your own portfolio to this unmanaged market-value weighted average of the prices of the 500 largest companies traded on the NYSE, AMEX and NASDAQ exchanges. You can compare price appreciation, i.e. performance, return. You can also compare drawdown, i.e. maximum decline from the peak, a measure of risk. With this benchmark you can evaluate your investments from the standpoint of growth and safety - do you have the right mix for your situation and risk tolerance?
b. Benchmark: a mix of indexes that parallels the mix in your own portfolio. For example, if your portfolio is a mix of 40% US stocks, 20% foreign stocks, 35% US bonds, and 5% cash, then your benchmarks could be a mix of the S&P 500 Index for US stocks, the EAFE Index for foreign stocks, an Index of long-term bonds, and the Consumer Price Index for cash - in the same proportions. A benchmark of this type could help you evaluate the effectiveness of your money managers in selecting individual investments. The more closely this benchmark parallels the composition of your own portfolio of investments, the better it will work for this purpose.
c. Benchmark: your own goals. For example, let's assume that you had estimated that you needed to save 12% of your income and have your investments grow at a 7% rate in order to be "on-track" for retiring or being financially independent in 7 years. You should compare what has happened with what you had hoped to happen. This comparison will give you some ideas about your choices, progress, and changes you need to make.
Here are some key questions to ask yourself as you establish benchmarks:
• What do you really want to accomplish, before you go to the trouble of monitoring progress?
• What can you control and what not?
• Will a proposed benchmark be appropriate for answering the questions you have and guiding you to take the right actions?
Remember, investors cannot directly invest in indices, and past performance does not guarantee future returns.
You need three ingredients to manage your affairs effectively over a long period of time: time, interest, and skills. It is clear how the first two of these work, less so for the third.
Skill has two key components, the first of which is knowledge. Knowledge can come from a book or from discussions with other people. At its best, knowledge means not just knowing how things work, but also why they work the way they do. In that way you can better apply what you know to new situations. Knowledge is necessary to have skill, but by itself it is not sufficient.
Experience is the second component necessary for skills to develop. Without the opportunity to apply what you know, you have just "book knowledge." Wouldn't you rather hire a surgeon who has done your required surgery many, many times before, rather than a surgeon who says, "That's interesting. I have never done one of those before, but I have read about it and have always wanted to do the procedure. Let's give it a try."
Carefully weigh your skill level - especially in regard to your finances. In which areas do you have both knowledge and experience? Those areas are good candidates for you to handle on your own if you wish. Which areas are you lacking either knowledge or experience? Consider finding a professional to help you in those areas. When hiring a professional, be sure to look into that person's expertise and experience. In other words, hire them for their skill.
]]>Alice is more than a disease that she has recently experienced. By being designated as a disease, she is being stripped of her very identity and therefore her dignity. Alice Williams is a person - with all that means. She has a family, a career, and a lifetime of rich experiences. She needs medical help but she also needs respect.
If you are like Alice, you do not want to be stereotyped based on your gender, age, health, family circumstance, or even your religion, political beliefs or the clothes you wear. You are more than any of those and want to be treated as an individual. The special details of your life situation may actually be the most critical factors for you when you need to make an important decision.
Stereotyping cuts off serious thought and interactions. The opposite of stereotyping is active communication which has three parts:
1. Serious disclosures. If you do not disclose what you really need and want and why, then whoever is supposed to help you will not have the information to give you good advice.
2. Active listening. Your helper must listen actively to what you say. They must care enough to ask good probing questions, and they must approach this process with an open mind.
3. Thoughtful analysis. Your helper must use their skills and analysis to give you the right advice.
When you look for help, you probably first consider your helper's competence and ethics. Great, you should. But make sure that good communication is part of the process. You need to get the right answers for you and your particular situation. This is true for medical advice from your physician, and it is equally true for other kinds of advice you need, from finances to family issues.
Scott was an independent business owner, age 50, with several employees. He really enjoyed his work in many ways. He earned a decent livelihood and met many people whose lives he made better. He built up his business and was recognized in his personal and professional communities for the quality of his work. He liked the day-to-day tasks that he himself did, and he also enjoyed helping his staff grow professionally.
However, Scott was worried. Some large competitors were moving in and his whole industry had its regulatory and profitability problems. Scott's lease was up. He was already working longer and harder than he wanted to.
Should he just find a new place to rent and continue as he had? Should he bring in a family member to help and possibly take over his business someday? Should he just sell his business? If he sold his business, should he retire, start a similar or different business, or work for someone else? He was left with more questions than answers.
What a ride Scott had over the next few years. He did it all. First, he bought his own building and set up his business there. That way there would be enough room for a family member who had expressed an interest to work with him. But then the family member changed his mind and went elsewhere. Scott then brought in a different family member, and that did not work out well either.
Scott negotiated with a few large firms to buy his business. The negotiations were on-again, off-again over a number of years. Finally, one firm bought him out. This firm hired him to work for them and set them up to be successful. He was able to bring his staff along with him.
Although the process through those years was sometimes agonizing, the story had a happy ending. Scott was able to take all of the value out of his business and invest it elsewhere. He was no longer threatened by changes in his industry. He was able to continue his good work, which he enjoys, and have a positive impact on his community. In addition, he has more free time for himself and his family.
The story is not over. Scott still has plenty of time, energy, and assets to provide for many further opportunities and a great life. Who knows what he will be doing several years from now!
Not all stories like this have a happy ending. What did he do that helped him navigate through this long and complicated process? What can you learn that will help you on your own journey?
1. Over a period of time Scott was able to articulate better and better exactly what he really needed. He always knew what he wanted, but he was not sure how to get there. What helped him was to do modeling of his financial alternatives so that he could see how much money he would really need to get for his business so that he could become financially independent. His first offers were insufficient. When he eventually got a higher offer, he knew that it was enough. He grabbed it.
2. Scott had to do much wrestling through those years. He believed that he had to get this decision right - he would not have a second chance. It was particularly helpful for him to talk over his alternatives with his trusted advisors along the way. It was always his choice what to do, but he made better decisions along the way by talking the issues through.
I believe that you can learn from Scott's story. Do your best to figure out what you want and then talk over the alternatives with knowledgeable professionals so that you know what you need. Doing these two things could help you make better decisions.
]]>3. Preparing to change in spite of problems
Most likely, you will not be perfect in the execution of your plan to change. You will have obstacles including distractions and temptations to abandon your plan and go back to the old way of doing things. They can cause setbacks and slip-ups.
You can prepare for these obstacles in two ways. First, identify some of the more likely obstacles that you will encounter and what you will do to get back on track. Second, make sure that your actions have consequences. Reward yourself for keeping on track and punish yourself for straying. Just make sure that you do not get too focused on punishments - keep a positive and forward-oriented focus. Some behavioral scientists suggest that you should have at least four times as many rewards as punishments.
When your change becomes difficult, it will be especially helpful to refer back to your written plan, which contains a vision of why you decided to change. Again, the clearer your vision is, the more helpful it will be to your success.
4. Just do it
Many people find it easier to commit to a change if they "have more skin in the game." One of the more common ways of doing this is to tell other people about your program of change. Then they can ask you about your progress and encourage you for your successes along the way.
Another approach is to pay money for the change. Out-of-pocket money may encourage you to follow through - you would not want to waste the money you spent. For example, if you have a new weight goal, it might be helpful to become a member of a gym or hire a personal trainer.
Both of these relate to the idea of accountability. You can have an accountability partner who is a friend or family member. You can also hire a personal coach who will make him/herself available on a regular basis to develop a plan, ask about progress, and help you overcome any obstacles.
Good luck on your journey.
This is the season for resolutions. Yet like other people, you could have a difficult time doing what is in your own best interests. Why is that? What can you do to be really effective?
Let's assume that you are interested in making big and important changes to who you are or what your situation is. You find yourself saying, "I've really got to ...." Those changes could be to your weight, exercise program, relationships or career, among others.
What holds you back from going all the way in the change? The problem most likely is the transition itself - the process of going from where you are to where you want to be. The transition can involve a cost of time, money or pain. You must take the costs into account, or you will not succeed.
There are the four key areas that can be the difference between success and failure in making important changes in your life: committing to the change, developing the plan to change, preparing to change in spite of problems, and just doing it. This blog will discuss the first two of the key areas.
1. Committing to the change - knowing exactly where you are going
You are never going to be successful in carrying through the change until you are committed to it. That commitment must be more than a wish or a dream or a resolution. Especially if the change is difficult, you must have the "no matter what" attitude. This takes courage and faith.
You must be prepared to focus on this change if it is important enough for you to be committed to doing it. Simplify your life while making the change, if you can, so that you can concentrate on it.
To end up somewhere new, you have to know where you are going. Just what is your vision? Why is it important to you? Defining your vision is absolutely critical for success. Spend time literally describing, in writing, what your new life will be like. The more detailed you are, the better, because the detail can drive your passion and commitment. What is the situation, what do you hear and see and smell and taste? Later on if you get sidetracked, you will need to keep coming back to your vision so that you can bring yourself back on course.
Procrastination is a huge issue. Why make a change today if you really do not need to? What difference does a day make? Why give up activities that you are familiar with and maybe even enjoy on a day-to-day basis for the uncertainties and difficulties of change? Why go out of your comfort zone?
You can use a new year, a birthday or other milestone as an excuse to get started. But if it so important to change, why wait?
2. Developing a plan for change - figuring out how to get there
Determine what the concrete steps are that you will need to take. What will they cost in time and money? What is your timeframe? Think about what you will give up during the transition, because the transition will cost you time and money, both of which are finite.
It will help you to break your change into many small and doable steps. You need to be able to say, "This step is not so bad. I can do it."
The best plans are always written down for many reasons: written plans facilitate sharing and feedback, permit you to come back later and recall your approach, and serve as a guide to manage your change, especially if you set milestones for your journey.
How to carry out the steps in the plan may not necessarily be obvious to you. What do you need to figure out? What have other people done? What has worked and not worked? Having a clear vision and a written preliminary plan will help you identify what you need to find out.
Everyone wants their money to have the biggest possible impact, so watch out for taxes which may erode your gift. There are two types of taxes your money will be subject to upon death; the first is the estate tax and the second is the tax on income with respect to decedent (IRD). You have to pay income taxes on cashed in IRAs because they previously have not been taxed.
You will be eligible for a tax break if you leave money to charity - whether your money is in IRAs, other pre-tax money, or after-tax money. All of these are deducted from your taxable estate and are therefore not subject to estate tax. All gifts to charity also escape the tax on IRD.
If you would like some of your estate to go to charity and you want to reduce your overall taxes to your beneficiaries, you must pay careful attention to what goes where. If you have a choice, give some of your IRA money to charity - it will escape all taxes! If, instead, you had left the IRA money to anyone other than your spouse, then at some point they would have had to pay taxes on the IRD. You can leave other (non-IRA) money through your will or trust to your non-charitable beneficiaries.
Your will or trust does not determine where your IRA money goes - it is the beneficiary designation for the IRA that does that. The easiest way for you to specify who gets the money is to get the IRA beneficiary form and fill it out. You could, for example, have your spouse as the primary beneficiary and the charities as contingent or secondary beneficiaries, i.e. they collect if the primary beneficiary is no longer alive.
Beneficiary designations are easier and less expensive to change than your will. You also have the flexibility to choose which IRA goes to which charity.
Think carefully which charities are the most important to you. If you are leaving a substantial amount of money to a limited number of charities, you can have a much larger impact than was possible from smaller donations during your lifetime. If you have a strong preference what you want the charity to do with your money, it will be helpful to discuss this with the charity while you can.
It is absolutely critical to involve your attorney in the decision-making process to make sure that you have the right wording and that you properly coordinate all aspects of your estate planning.
]]>Plan A is mostly about determining your life goals, saving and investing for them, and then having enough income to achieve those goals and live your dreams.
Plan B is discovering and dealing with obstacles to Plan A - what are they and what can you do about them? Those obstacles are risks to your success, and you have four approaches to deal with them. For each risk you can eliminate it entirely, reduce it, accept it, or give it to someone else.
The process for developing a Plan B is nothing more nor less than identifying the risks and then explicitly deciding which of the four approaches to use for each. Here are some of your financial risks:
• income not being there when you need it
• expenses growing beyond your ability to pay for them
• assets being used up to pay for accidents or lawsuits
• loss of control over your financial affairs because of an accident, your illness, or your death.
You can use legal agreements and insurance contracts (which are also a type of legal agreement) to eliminate, reduce, or give away your risks and develop a Plan B.
Consider, for example, the fourth financial risk - losing control of your finances because of an accident. Rather than going to court and having the court decide what is appropriate every time you need money, you can delegate the responsibility of decision-making and execution to someone else, typically a family member. The delegation of responsibility is done through a legal agreement called a "Power of Attorney" (POA).
The POA spells out:
• who has the power and authority to act in your behalf
• who the backup person (or institution) is if the primary person cannot or does not want to act
• what actions they can take and for which assets
• the time frame for acting
• how the person or institution has to account for what they have done.
You execute (sign) the POA and have your signature notarized. Then financial institutions will accept that document so that your backup can take over as needed.
This legal agreement reduces your risk - the obstacle of not being able to manage your affairs - and lets you proceed on your way to achieving your goals in your Plan A.
When asked this question, most people answer that they want their children to be happy or successful or able to take care of themselves. They frequently do not want their money to be spent immediately, especially if there is a lot of money and it took them a lifetime to accumulate it. If those are your objectives, make sure to take into account the following:
• Will children inheriting a large lump sum of money work as you intended?
• Will your children have the time, interest or skills to manage a large sum of money themselves? If not, do they know how and why to get professional help?
• Will they be able to withstand the requests for money by friends, neighbors and relatives?
• Will they be happier and more successful with the money?
The outcome of an inheritance depends largely on your children's relationship with money. Is money for them to be stewarded or spent or invested or given away to friends and relatives?
I ask these pointed questions because I have seen poorly prepared children and even adults get into trouble when they have suddenly acquired an amount larger than they are used to. Their troubles have included drugs, wine, women and song. Even the best prepared children can run into problems preserving the money if they have creditors, people suing them, or divorcing spouses.
Have you given this area enough thought? What can you do?
The most common approach to dealing with these issues is to use trusts of different types to protect both the money and your children. The trust document is a set of written legal instructions for how the trustee must control the disbursement of income and principal from the investments in it to the beneficiaries of the trust. The trustee can be a family member, friend, professional, institution or some combination of them.
You can set up a trust while you are alive or have one created upon your death (this is called a testamentary trust). Having a trust gives you a say about how your money is to be used when you are no longer here.
Money clearly does not by itself create happiness, but it can make many aspects of daily living much easier. In the right circumstances it can create opportunities and more freedom. Ideally, it will help to create the kind of world you want for your children.
The first approach to protecting your portfolio that does work is called "the shift to safety." This means selling riskier investments and replacing them with lower-paying but more stable investments. Safer investments generally provide a return by paying you up-front, such as bonds, or they have guarantees of the principal, such as certificates-of-deposit. In general, less liquid, safer investments have a higher return than more liquid ones of comparable risk.
The other approach that works is called "effective diversification." How do you measure it? The answer is through correlation. If two assets tend to move in the same direction routinely, we say that that their prices are highly correlated. If they move independently, they are not correlated. It is helpful to have uncorrelated investments in the portfolio.
A portfolio of 4 different high-tech funds is no more effectively diversified than a meal comprised entirely of 4 different flavors of ice cream. Spreading your stocks out helps sometimes. You can diversify your stock portfolio to include foreign as well as domestic companies and smaller as well as larger companies in developing as well as developed countries.
If you could find some investments that had a long-term return comparable to stocks but on a day-to-day or even month-to-month basis had a different rhythm, you would say that the investments are not correlated. Here are some types of alternative investments not very correlated to stock performance that could have a long-term return similar to stocks: real estate (there are many sub-categories here), gold and other metals, oil and gas, farm commodities, managed futures contracts, arbitraged funds, hedge funds, high-yield bonds, and loan funds.
In theory, you could construct an effectively diversified portfolio containing these alternatives with a long-term return similar to an all-stock portfolio, but without fluctuations as large as you would have from stocks alone. Here are some caveats for alternative investments: some have higher minimums for investments than stock mutual funds or require investors to be wealthier to purchase them, some are not very liquid, most are more expensive to manage, some depend on the special expertise of a money manager who may not be there forever, and many do not have long track-records on which to base investment selection. As with other investments it is hazardous to predict the future from past performance. Because of these caveats, use moderation if you choose to include these alternatives in your portfolio.
Obviously, you can use a combination of these two approaches to protecting your investment money: shift to safety and diversify all investments effectively. Even at their best, these two approaches will not work perfectly to eliminate fluctuations in return. However, you may find an approach that you are comfortable with: better managed fluctuations in investments and a return high enough to match inflation plus some money to live off.
Disclosure Statement
Securities offered through Multi-Financial Securities Corporation, member FINRA, SIPC. Fischer on Finance, LLC is not affiliated with Multi-Financial Securities Corporation. Neither Multi-Financial nor Mark Fischer give legal or tax advice. Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than original investment. No system or strategy can guarantee future results.
The second thing to consider is your investments, which you accumulate by saving some of the money that you do not spend. Those investments, if large enough, can provide you with financial independence because you can use them to provide an income when needed. Having investments is critical, because there may come a time when you do not want to or cannot work.
This second component of your finances, your investing, has two stages. The first stage is building an investment fund. The keys to success here are starting as early as possible and saving as much as possible. It is never too late to start, but the task of accumulating enough money becomes more challenging the longer you wait to start. You should choose investments that will grow, diversify them, and keep your taxes and other costs low.
The second stage of your investing is keeping the money you have accumulated and using it to generate income when needed. Many people believe that this phase starts upon retirement, but that is not true. It starts whenever you cannot afford substantial losses in your investments.
Here are two examples. As you approach retirement and are fairly certain when you want to stop work, you may be less willing to tolerate a substantial loss of money, even if temporary. After all, that loss could delay your retirement by many years. Or perhaps you are running a business and are using a side fund for both an eventual retirement and a buffer to hold you over when your cash flow has ebbed. Then you may need the money to be there when you want it. In both of these situations, it is important to keep the money you have.
Prince and Geracioti stated in their 2005 book Cultivating the Middle-Class Millionaire, that they had interviewed more than a thousand successful savers in the second stage of wealth management. The overwhelming desire of the successful savers was to keep what they had. The savers had five key areas of concern:
1. Preserving the wealth. This is done through effective diversification oriented around the management of risks, not just getting a high return. The diversification should use a wider array of investment products and approaches. Proper investment management employs guidelines to integrate money management with your specific circumstances.
2. Mitigating taxes. Paying no more taxes of all kinds than necessary is the goal, because those taxes can erode wealth. You need to manage income taxes of all kinds, capital gains taxes, and estate taxes.
3. Taking care of the kids. Helping family, but not too much. College funding for (grand)children is one area frequently addressed. Estate planning is another. A variety of legal, investment, and insurance tools can help you in this area.
4. Protecting wealth. Lawsuits, creditors, personal security violations and extreme health-care costs are all areas that can decimate the wealth you have accumulated. They should be addressed.
5. Charitable giving. This may be important if you have accumulated money that you want to give back to your community for any of a variety of reasons.