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.

Want to start living like a millionaire? According to research by Doctors Thomas Stanley and William Danko, most millionaires:

* Live well below their means.

* Have a plan for building wealth - they allocate time, energy and money efficiently in ways conducive to building wealth.

* Believe that financial independence is more important than displaying high social status (they don’t have to flaunt their money).

* Did not receive economic help from their parents (even if they got into fiscal trouble in their early years).

* Have adult children who are economically self-sufficient.

SOURCE: http://money.cnn.com/2004/08/10/pt/millionaire/net_worth_stackup/

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Sometimes individuals or couples who have traditional wills and estate planning documents, like trusts and powers of attorney, wish to pass on something that conveys their personal values, traditions or experiences to subsequent generations. A legacy will or trust may be appropriate in such circumstances.

BE TAX AWARE: Incentive trusts may have some estate and/or gift tax implications. Due to complexities, a legacy trust should generally be created with legal and financial advice.

Legacy Wills: Instruments exemplifying legacy wills have existed in one form or another for decades. These documents allow the creator to share things that give meaning to his life with surviving children, grandchildren, friends and extended family.

Legacy wills can vary as broadly as one’s imagination and may include such things as cherished moments, advice, mistakes, personal commitments, personal stories and private knowledge.

Legacy wills are drafted to embrace the creator’s life lessons regarding work, marriage, child rearing and, perhaps, to reflect a person’s inner soul for posterity.

A legacy will should be kept with a testator’s traditional will. And, as is the case with most declarations, periodic review by the creator is advisable.

Legacy (Incentive) Trusts: While legacy wills are generally suggestive in nature, legacy trusts, also called incentive trusts, generally impose requirements on beneficiaries in order to receive trust distributions. More than a few wealthy seniors have concerns that their self-earned wealth will be the ruination of their children and grandchildren’s characters and that their descendants will suffer from what is humorously referred to as “affluenza.”

The underpinnings of legacy trusts are quite different from the garden-variety trust that is premised on the avoidance of gift and estate taxes, and mandates distributions of income and corpus at predetermined beneficiary ages.

A legacy trust may instead provide for distributions of income and corpus when beneficiaries have earned them in accordance with the creator’s personal philosophies. Should trust conditions and desired qualities not be met, the trust instructions could instead pass the money to charity or to the next generation.

After consideration of the circumstances involved in each particular situation, a legacy will or trust that encourages children and grandchildren to reach their potential and establish sound values may be an excellent way a client can be remembered and perpetuate family traditions.

EXCERPT FROM Wealth & Retirement Planner March/April 2006

By far the most common purchasers of immediate annuities are folks over 65 years of age. This age bracket represents 78 percent of all immediate annuity sales with 70-1/2 being the average age of the buyer. The reason that immediate annuities appeal so strongly to this age bracket is that they want a guaranteed source of income that they cannot outlive. Immediate annuities can fill this need nicely.

EXCERPT FROM Wealth & Retirement Planner March/April 2006