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If a Tree Falls, Who Pays?

June 23rd, 2015 | No Comments | Posted in Financial News

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Every summer, storms are responsible for felling countless trees and limbs. Unfortunately, some of those fallen trees damage homes and other property. To make matters worse, many homeowners are surprised to discover that if a neighbor’s tree falls on their house, it’s usually their own homeowners policy—not their neighbor’s—that will cover the cost of the damages. What follows are general guidelines for who pays what in various situations, but you should also check your homeowners policy for coverages and exclusions.

Generally speaking, if your property is damaged, you are responsible for the damages. It doesn’t matter if the tree or limb came from your property, your neighbor’s property or even municipal property.

Keep in mind that a windstorm isn’t anyone’s fault; it’s an act of nature. If a tree does damage your property during a windstorm, your policy will cover the damages. After all, that’s why you purchased a homeowners policy—to protect yourself against unforeseen losses like a tree damaging your house.

It might seem unfair that if it’s your neighbor’s tree that damages your home, you should have to pay. Fortunately for you, that standard applies both ways. If a storm rolls through and your tree falls and damages your neighbor’s house, his or her insurance is going to cover the damages.

If the tree doesn’t damage your house but instead damages your fence, are you still covered? Generally, you are.

Most homeowners policies distinguish between two different kinds of structures on your property. The “dwelling” refers to your house and any attached structures (like an attached garage), as well as any fixtures attached to the house. “Other structures,” including detached garages, sheds, fences or gazebos, are also insured, but typically only for 10 percent of the coverage on your dwelling.

Most policies offer limited coverage for trees that have fallen due to fire, lightning, explosion, theft, vandalism, malicious mischief or aircraft. Amounts and exclusions will vary, so it’s important to read your policy and check with your broker if you have any questions.

© 2015 Zywave, Inc. All rights reserved. This Know Your Insurance document is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.

The New Gradual Retirement

June 23rd, 2015 | No Comments | Posted in Financial News

Working a little (or a lot) after 60 may become the norm.

shutterstock_97151783Do we really want to retire at 65? Not according to the latest annual retirement survey from the Transamerica Center for Retirement Studies which gauges the outlook of American workers. It found that 51% of us plan to work part-time once retired. Moreover, 64% of workers 60 and older wanted to work at least a little after 65 and 18% had no intention of retiring.1

Are financial needs shaping these responses? Not entirely. While 61% of all those polled in the Transamerica survey cited income and employer-sponsored health benefits as major reasons to stay employed in the “third act” of life, 34% of respondents said they wanted to keep working because they enjoy their occupation or like the social and mental engagement of the workplace.1

It seems “retirement” and “work” are no longer mutually exclusive. Not all of us have sufficiently large retirement nest eggs, so we strive to stay employed – to let our savings compound a little more, and to leave us with fewer years of retirement to fund.

We want to keep working into our mid-sixties because of two other realities as well. If you are a baby boomer and you retire before age 66 (or 67, in the case of those born 1960 and later), your monthly Social Security benefits will be smaller than if you had worked until full retirement age. Additionally, we can qualify for Medicare at age 65.2,3

We are sometimes cautioned that working too much in retirement may result in our Social Security benefits being taxed – but is there really such a thing as “too much” retirement income?

Income aside, there is another question we all face as retirement approaches.

How much control will we have over our retirement transition? In the Transamerica survey, 41% of respondents saw themselves making a gradual entry into retirement, shifting from full-time employment to part-time employment or another kind of work in their sixties.1

Is that thinking realistic? It may or may not be. A recent Gallup survey of retirees found that 67% had left the workforce before age 65; just 18% had managed to work longer. Recent research from the Employee Benefit Retirement Institute fielded roughly the same results: 14% of retirees kept working after 65 and about half had been forced to stop working earlier than they planned due to layoffs, health issues or eldercare responsibilities.3

If you do want to make a gradual retirement transition, what might help you do it? First of all, work on maintaining your health. The second priority: maintain and enhance your skill set, so that your prospects for employment in your sixties are not reduced by separation from the latest technologies. Keep networking. Think about Plan B: if you are unable to continue working in your chosen career even part-time, what prospects might you have for creating income through financial decisions, self-employment or in other lines of work? How can you reduce your monthly expenses?

Easing out of work & into retirement may be the new normal. Pessimistic analysts contend that many baby boomers will not be able to keep working past 65, no matter their aspirations. They may be wrong – just as this active, ambitious generation has changed America, it may also change the definition of retirement.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – forbes.com/sites/laurashin/2015/05/05/why-the-new-retirement-involves-working-past-65/ [5/5/15]
2 – ssa.gov/retire2/agereduction.htm [6/11/15]
3 – money.usnews.com/money/blogs/planning-to-retire/2015/05/22/how-to-pick-the-optimal-retirement-age [5/22/15]

Long-Term Investment Truths

June 23rd, 2015 | No Comments | Posted in Financial News

Key lessons for retirement savers.

shutterstock_104769359You learn lessons as you invest in pursuit of long-run goals. Some of these lessons are conveyed and reinforced when you begin saving for retirement, and others you glean along the way.

First & foremost, you learn to shut out much of the “noise.” News outlets take the temperature of global markets five days a week (and even on the weekends), and fundamental indicators serve as barometers of the economy each month. The longer you invest, the more you learn to ride through the turbulence caused by all the breaking news alerts and short-term statistical variations. While the day trader sells or buys in reaction to immediate economic or market news, the buy-and-hold investor waits for selloffs, corrections and bear markets to pass.

You learn how much volatility you can stomach. Volatility (also known as market risk) is measured in shorthand as the standard deviation for the S&P 500. Across 1926-2014, the yearly total return for the S&P averaged 10.2%. If you want to be very casual about it, you could simply say that stocks go up about 10% a year – but that discounts some pronounced volatility. The S&P had a standard deviation of 20.2 from its mean total return in this time frame, which means that if you add or subtract 20.2 from 10.2, you get the range of the index’s yearly total return that could be expected 67% of the time. So in any given year from 1926-2014, there was a 67% chance that the yearly total return of the S&P might vary from +30.4% to -10.0%. Some investors dislike putting up with that kind of volatility, others more or less embrace it.1

You learn why liquidity matters. The older you get, the more you appreciate being able to quickly access your money. A family emergency might require you to tap into your investment accounts. An early retirement might prompt you to withdraw from retirement funds sooner than you anticipate. If you have a fair amount of your savings in illiquid investments, you have a problem – those dollars are “locked up” and you cannot access those assets without paying penalties. In a similar vein, there are some investments that are harder to sell than others.

Should you misgauge your need for liquidity, you can end up selling at the wrong time as a consequence. It hurts to let go of an investment when the expected gain is high and the P/E ratio is low.

You learn the merits of rebalancing your portfolio. To the neophyte investor, rebalancing when the market is hot may seem illogical. If your portfolio is disproportionately weighted in equities, is that a problem? It could be.

Across a sustained bull market, it is common to see your level of risk rise parallel to your return. When equities return more than other asset classes, they end up representing an increasingly large percentage of your portfolio’s total assets. Correspondingly, your cash allocation shrinks as well.

The closer you get to retirement, the less risk you will likely want to assume. Even if you are strongly committed to growth investing, approaching retirement while taking on more risk than you feel comfortable with is problematic, as is approaching retirement with an inadequate cash position. Rebalancing a portfolio restores the original asset allocation, realigning it with your long-term risk tolerance and investment strategy. It may seem counterproductive to sell “winners” and buy “losers” as an effect of rebalancing, but as you do so, remember that you are also saying goodbye to some assets that may have peaked while saying hello to others that you may be buying at the right time.

You learn not to get too attached to certain types of investments. Sometimes an investor will succumb to familiarity bias, which is the rejection of diversification for familiar investments. Why does he or she have 13% of the portfolio invested in just two Dow components? The investor just likes what those firms stand for, or has worked for them. The inherent problem is that the performance of those companies exerts a measurable influence on the overall portfolio performance.

Sometimes you see people invest heavily in sectors that include their own industry or career field. An investor works for an oil company, so he or she gets heavily into the energy sector. When energy companies go through a rough patch, that investor’s portfolio may be in for a rough ride. Correspondingly, that investor has less capacity to tolerate stock market risk than a faculty surgeon at a university hospital, a federal prosecutor, or someone else whose career field or industry will be less buffeted by the winds of economic change.

You learn to be patient. Even if you prefer a tactical asset allocation strategy over the standard buy-and-hold approach, time teaches you how quickly the markets rebound from downturns and why you should stay invested even through systemic shocks. The pursuit of your long-term financial objectives should not falter – your future and your quality of life may depend on realizing them.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – fc.standardandpoors.com/sites/client/generic/axa/axa4/Article.vm?topic=5991&siteContent=8088 [6/4/15]

The Ransomware Threat

June 23rd, 2015 | No Comments | Posted in Financial News

shutterstock_115174897Cybercrime has reached a new level.

Imagine cybercriminals holding your files for ransom. It sounds like something out of a movie set in the distant future, but business owners and households are facing such a threat today.

Hackers are now using ransomware to hijack computers and hold files hostage in exchange for payment. Malware programs like CryptoWall, CryptoLocker and CoinVault spring into action when you unsuspectingly click on a link in an email, encrypting all of the data on your hard drive in seconds. A “ransom note” appears telling you that you need to pay $500 (or more) to access your files again. If you fail to pay soon, they will be destroyed.1

Worldwide, more than a million computer users have been threatened by ransomware – individuals, small business, even a county sheriff’s department in Tennessee. The initial version of CryptoLocker alone victimized 500,000 users, generating more than $3 million in payments along the way.2,3

The earliest ransomware demanded payments via prepaid debit cards, but hackers now prefer payment in bitcoin, even though few households or businesses have bitcoin wallets. (The emergence of bitcoin effectively aided the rise of ransomware; keeping the payment in virtual currency is a hacker’s dream.)2,3

If your files are held hostage, should you pay the ransom? The Department of Homeland Security and most computer security analysts say no, because it may be pointless. By the time you get the note, your files may already be destroyed – that is, encrypted so deeply that you will never be able to read them again.

Some people do pay a ransom and get their data back. As for prosecuting the crooks, that is a tall order. Much of this malware is launched overseas using Tor, an anonymous online network. That makes it difficult to discern who the victim is as well as the attacker – if one of your workers thoughtlessly clicks on a ransomware link, you cannot find, scold or even help that employee any more than you could locate the hacker behind the extortion.3

How do you guard against a ransomware attack? No one is absolutely immune from this, but there are some precautions you should take.

First, back up your data frequently – and make sure that the storage volumes are not connected to your computer(s). Cloud storage or a flash drive that always stays in one of your computer’s USB ports is inadequate. If you back up your files regularly enough, weathering a ransomware attack becomes easier.3

Keep your anti-virus software renewed and up to date. Those alerts you receive about the latest updates? Heed them.

Never click on a mysterious link or attachment. This is common knowledge, but bears repeating – because even after years of warnings, enough people still click on mysterious links and attachments to keep malware profitable.

Ransomware is a kind of cyberterrorism. This is why the Department of Homeland Security issues warnings about it. When you deal with terrorists, playing hardball has its virtues. As Symantec Security Response director Kevin Haley told NBC News: “If none of us paid the ransom, these guys would go out of business.”2

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – rackspace.com/blog/dont-be-held-hostage-by-ransomware-hackers/ [1/15/15]
2 – nbcnews.com/nightly-news/security-experts-you-should-never-pay-ransomware-hackers-n299511 [2/4/15]
3 – tinyurl.com/n3rcrsm [12/8/14]

June, 2015 – Monthly Economic Update

June 23rd, 2015 | No Comments | Posted in Monthly Economic Update

Weekly Economic Update

Spotify May Have Killed A Part Of Music Culture

June 23rd, 2015 | No Comments | Posted in Lifestyle

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Kids these days have a pretty sweet setup: Almost any song imaginable is baked into Spotify, Rdio, Pandora or any of the other bazillion streaming services that essentially offer the same libraries. Listeners can pivot from Tyler, the Creator, to The Carpenters in two seconds.
howmusicgotfree

But — putting aside physical media — a lot of us remember digging through Scour or Limewire or Kazaa or Napster to get the goods. The less fortunate among us might recall the slow drip of a song download on our parents’ 56k dial-up connections.

If the notion of painstakingly searching for music files sounds like ancient history, it’s because technology has exploded in the past decade, and companies have done a brilliant job capitalizing on it.

A new book, Stephen Witt’s How Music Got Free, explores the fascinating hidden history of music as a digital product. It tracks the odd-but-true battle between the .mp2 and .mp3, the rise of piracy and plenty more.

The Huffington Post spoke to Witt about the state of music today and why listeners might consider mourning the end of downloads.

This interview has been edited and condensed for clarity.

At the end of the book, you take your hard drives with thousands and thousands of MP3s on them to be destroyed, and I thought that was really sad. You talk throughout the book about how, even if you’re pirating music, you’re building a collection, something that you can claim some sense of ownership over. Have streaming services like Spotify killed that culture, in a way?

Stephen Witt: It looks that way. Particularly for music. Maybe TV and movies are a little different. When I talk to younger people, they don’t care about ripping files. They just want to stream, and they’re willing to pay for it or listen to advertising. So there is a cultural shift. It’s going out of fashion.

There was a lot of bad behavior online [in the early stages of the Internet]. There was a lot of fun. You were really allowed to do whatever you wanted. But since about 2007 or 2008, the technologists and the rights-holders have been cooperating to limit the freedom of the average user and direct them less toward owning stuff and more toward licensing it from corporate libraries.

Are we setting ourselves up for a fall here? Artists don’t make good money from streaming services, the user doesn’t have any sense of ownership over the music they listen to — are these problems we’re going to have to reckon with sooner rather than later?

SW: Ideologically I have a ton of problems with it. Practically, it’s very convenient. [Laughs.] As the experience with piracy showed, many people with ideological problems with copyright infringement did it anyway because it was so easy. Experience shows that although we may be troubled by turning ourselves into basically corporate media serfs, I think that’s what we’ll do because it’s so easy.

That’s kind of scary.

SW: Yeah. What’s really attractive for me is, if you read the book, you’ll see that most of the early stuff that was distributed online was home-built. Kids were rigging it together in their basement. And that upended the entire mode of media distribution for the world. Now, it’s very different. Now we have Google and Universal Music and Sony and Spotify and Apple all cooperating.

Decisions in the early days of computing gave an enormous amount of power to the end user. The idea was to enable them to facilitate new modes of communication and collaboration. In the modern era, the ethos is totally different. The end user is seen as a person from whom value is to be extracted. And that means taking power away from them.

Do you have any thoughts about Apple Music and what that company is doing? Is it different at all?

SW: The short answer is no. This entire industry has copycat economics. For $9.99 a month, you get the same quality access to the same 30 million songs that they all have. The only differences between them are cosmetic for now. That could change if they start going for artist exclusives or offering different services. But me personally, I didn’t find the Apple Music launch very convincing.

I think the harder part is, if they can’t find a way to generate more cash for musicians from these services, they could face a revolt. The artists might start pulling all their stuff, significantly degrading the value of the service. Or worse, the other thing that could happen is, [these services] start bidding against each other for exclusives with musicians. That would be bad too because it makes each service worth less while spending more. You might subscribe to Spotify or Apple Music, but you don’t want to subscribe to both. And you might have to if the media starts to fragment into different channels.

Source: huffingtonpost.com

Give What You Can, Take What You Need

June 23rd, 2015 | No Comments | Posted in Lifestyle

Everyone loves a deal, and there’s no better deal than free money.

But when commuters at Los Angeles’ Union Station were recently faced with a bulletin board covered in dollars, many of them made no effort to cash in. In fact, they got into the giving spirit instead.

The board, put up as a project by a group called The Toolbox, originally featured rows of $1 bills and the simple phrase “give what you can, take what you need.” As people passed — some taking, some giving — the ones were replaced with fives, tens and more.

At one point in the video, a passerby pinned a $20 bill he’d just found to the board.

“What I can say for the folks that gave the most is that they were full of smiles,” The Toolbox’s Tyler Bridges told Huffington Post. “There’s a certain feeling that giving can do for you and that was definitely apparent in those that gave the most.”

By the end of the clip, the board is almost bare, but the good vibes keep adding up. Just watch!

Source: today.com

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