Wealth Logic Solutions

After sitting down with your financial advisor to determine your current net worth, set a goal for where you want to be. Take a hard look at where your money is going and strategize about how to save on taxes while increasing your savings and your net worth.

1. Budget — If you want to increase your net worth, you’ll need to take a close look at where your money is going to see where you can cut down on unnecessary expenditures. Following a budget is the best way to do this. Be honest with yourself and keep accurate records. Consider keeping an ongoing spreadsheet of expenses or use an automated tool like Quicken or Quick Books.

2. Start early — The sooner you start saving, the more you’ll accumulate over time.

3. Monitor your return on investment — Keep an eye on your investments, and try to keep the returns as high as possible. If your average return is dropping, it’s time to meet with your financial advisor for some advice.

Call Wealth Logic Solutions to make an appointment now! (773-769-5200)

It’s not all about the penthouse condominiums, designer clothes, high-end vehicles and vacations. After all, wealth is not based on what you spend, but rather on the financial assets you accumulate.

Calculating your net worth should be the first step in any good financial plan. Sit down with your financial records and measure the difference between what you own (your assets) and what you owe (your liabilities). Make this exercise part of your annual fiscally fit check-up.

ASSETS:

Liquid Assets $______________

Investments $______________

Real Estate $______________

Personal Property $______________

Miscellaneous $______________

TOTAL ASSETS: $______________

LIABILITIES:

Mortgages $______________

Secured Debt $______________

Unsecured Debt $______________

TOTAL LIABILITIES: $______________

Assets - Liabilities = $________________ Your Net Worth

Definitions:

Liquid assets: money that you can access easily, such as your checking and savings accounts, money market accounts and certificates of deposit (CDs), and treasury bills.

Investments: any stocks bonds, stock options, mutual funds, annuities, life insurance, and money in retirement plans. Use the current value or after-tax value for each.

Real Estate: Insert the market value of your primary residence and any vacation homes or investment properties. Since this is likely your largest asset, don’t just make a wild guess at this number.

Personal Property: A lot of items can fall under this category: cars, motorcycles, boats, jet skis, ATVs, jewelry, furs, wine, electronic equipment, artwork and collections. Use current market value.

Miscellaneous: Insert the value of anything that doesn’t fall under one of the listed categories. This could include equity in a business or a trust fund.

Mortgages: Your home mortgage is probably the single greatest liability you have. Your year-end statement from your lender should show exactly how much is still owe on your property. Include the principle owed on any other real estate - vacation home, timeshare.

Secured Debt: This kind of debt is comprised of any items that can be recovered by the lender upon default of the loan. This includes cars, trucks, motorcycles, boats, jet skis, ATVs, and business loans. Use the total balance of all secured debt.

Unsecured Debt: This is the most painful part of this process. This kind of debt is personal loans, such as student loans, renovation loans, and the biggie for many folks - credit cards. Your creditors are consistent about reminding you of these debts, so calculating the amount owed should be fairly simple.

From Realty Times issue dated April 24, 2007

Poor mortgage choices, bad credit management, a lack of financial literacy and weak savings habits are among some of the underlying themes in the distressed housing market.

Hard-sell come-ons, predatory lending, fraud, scams and market practices that created over-inflated home prices are responsible, in part, for rising foreclosures, reduced equity growth and a general malaise in the housing market, but consumers without a clue also get some of the blame.

… “More American consumers are in need of financial education than ever before. More expansive and creative financial products have been a blessing to many, but have created real problems and barriers for others.”

A recent NFCC survey, conducted by Princeton Survey Research Associates International, reaffirms the need for financial and credit education and information, particularly among young adults and some ethnic groups.

The survey reveals consumers universally ignore the fundamentals of sound financial management, such as budgeting and tracking expenses, ordering free credit reports, and managing credit card debt.

Consumers who know they need help and want it often don’t know where to find it.

When Princeton telephone-interviewed 1,003 consumers nationwide from March 20 and March 28, 2007, it discovered:

* Only a minority (39%) keep close track of expenses, and this does not vary by gender, age or income. — You don’t know where your money goes if you don’t track expenditures. If you know where your money goes, you are more likely to be able to stop unnecessary spending and save more.

* Less than half of Americans have ordered their credit report, despite the fact that it is free (actually, you are entitled to three credit reports, one from each of the three big credit reporting agencies every year.) — Getting a look at your free credit report, before you apply for credit, should be a no-brainer. If there are errors or black marks that affect your application or how much money you can borrow, you won’t know until it’s too late if you don’t have a recent copy of your credit report. Obtaining your credit report gives you time to correct errors or improve your credit standing before you apply for credit. It will also let you know if someone has commandeered your identity and is using it to steal credit.

* Nearly four in ten Americans (38%) do not pay their credit cards in full each month. Given the high cost of credit card interest, that could set the stage for prolonged indebtedness, severe financial strain, even financial disaster.

* Two-thirds of Americans say they learned a great deal or fair amount about financial issues, such as managing money, balancing a checkbook and building their savings, at home versus in school. — Financial counseling professionals say family members can be sources of good advice and smart practices, but not always. They may not be fully aware of changing economic or market conditions that could affect financial behavior and your need to make adjustments in your financial habits.

* A Harris Poll revealed older consumers would be more aggressive about their financial habits if they had to do it over again.

* Younger consumers, African-American and Hispanic consumers are most interested in financial education and advice.

* One-third of all respondents do not know where to turn for financial advice. Wealth Logic Solutions through the Foundation for Personal Financial Education is available for free financial education workshops in your organization. Contact us today!

Wealth Logic Solutions 773.769.5200

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How much money do you think you need to cover the costs of health care during retirement? How about $200,000? According to Fidelity, that’s how much a 65-year-old couple without employer-sponsored health coverage will need if they retire today.

As health insurance premiums and health care costs increase and employer-sponsored retirement health benefits decline, the cost of care has been growing at a rate of 5.8% per year since 2002, when Fidelity first estimated retirement health care costs. The 2005 estimate was $190,000.

Knowing that these costs are going to continue to increase, each of us should be calculating and factoring life-long health care expenses into our overall financial planning.

EXCERPT FROM Wealth & Retirement Planner March/April 2006