Category: Wisdoms

  • What’s in the Health Care Law for You – Today

    Many families across Hawai‘i already know how the new health care law, the Affordable Care Act, is helping them. They’ve been able to maintain health care coverage for their college-age children, or buy health insurance after being previously labeled “uninsurable.” Many more have obtained discounts on expensive prescription drugs.

    Still, you may be wondering, What’s in the new health care law for me?

    AARP’s Health Law Guide, www.aarp.org/healthlawguide, can create a personalized report that tells you how the law will help you. If you are uninsured, your report will identify coverage you may be eligible to receive.

    Because different parts of the law will go into effect over a number of years, it’s a good idea to learn about the changes that are in store for you this year. In addition to providing your personalized report, the AARP Health Law Guide can help you stay on top of the law as it is implemented.

    A few changes you may appreciate right now:

    1. If you’re at risk of reaching the Medicare Part D doughnut hole—the threshold at which you’re responsible for a higher portion of your drug costs — you will receive a 50 percent discount on brand-name drugs and a 14 percent discount on generic drugs while you’re in the coverage gap.
    2. If you have Medicare, you can receive preventive care services such as mammograms, immunizations and screenings for cancer and diabetes, as well as an annual wellness visit, at no cost to you. If private insurers consider you “high-risk” due to prior or current health problems, and if you have been uninsured for at least six months, you may buy insurance through the Pre-Existing Condition Insurance Plan (PHIP). For more information go to http://aarp.us/wPdv2k.
    3. If you have an uninsured adult child under age 26, you may be able to add him/her to your family’s existing insurance plan.
    4. If you get sick, you will not lose your coverage as long as you continue to pay the premiums.

    Whether you currently have health coverage or not, it’s important to get the facts about how the law could impact your situation. In less than five minutes, AARP’s Health Law Guide can help you figure out how the new law benefits you and your family, how the law works with your current coverage, and what other health coverage may be available.

    Many families across Hawai‘i already know how the new health care law, the Affordable Care Act, is helping them. They’ve been able to maintain health care coverage for their college-age children, or buy health insurance after being previously labeled “uninsurable.” Many more have obtained discounts on expensive prescription drugs. Still, you may be wondering, What’s…

  • The Dollar is Up? The Dollar is Down?

    What does this all mean? You hear it regularly in the news: “The dollar rose today against other major currencies,” or “The dollar lost ground today on foreign exchange markets.” Just like stocks or bonds, currency’s value can fluctuate in comparison to each other on a daily basis.

    For example, at the start of 2011, it would have cost approximately $1.34 to purchase one euro (the European common currency). By the end of April, the U.S. dollar lost value, and $1.48 was required to buy a single euro.

    Why should you care? Because currency fluctuations affect anyone who buys goods made in other countries, travels abroad or invests globally. In other words, almost all of us are impacted on some level.

    The impact of fluctuating currency values

    Consider what happens if you are traveling overseas. If the dollar loses value compared to the currency of the country you’re visiting, it will cost more to make purchases in that region. If the dollar strengthens, your buying power will improve.

    In terms of the larger economy, U.S. companies seeking to sell products overseas will benefit when the dollar is weaker because this makes it cheaper for other countries to purchase American-made goods. In general, multi-national companies that sell American goods around the world will generate more profits from sales during periods of a weak dollar.

    As an investor in overseas stocks, you also may benefit when the dollar is declining in value. Suppose you invest $1,000 in a European company at a time when the exchange rate is $1.25 U.S. per euro. Your investment would be worth 800 euros. If after one year, the investment appreciates by five percent, it will be worth 840 euros. But if at the same time, the U.S. dollar had weakened to $1.35 per euro, your investment would be equivalent to $1,134, representing a much more sizable gain of 11 percent. The bulk of the return, in this case, comes from the euro gaining strength. By contrast, if the dollar gained ground during that period, your investment, when sold, would be worth less after being converted back into U.S. currency.

    An unpredictable market

    One of the significant challenges of the currency market is that it is very unpredictable in the short run. Any number of factors can come into play in determining the strength of a specific currency. A currency tends to become more valuable when the demand for it exceeds available supply. A number of factors can affect the exchange rate. For example, the dollar may be more attractive to others if interest rates here are higher and bond investors can gain a yield advantage by putting their money in bonds from U.S. issuers. Currencies may also thrive if a nation’s economy is strong (relative to other world markets) and business activity is high.

    But movements in currency values can also be affected by the actions of speculators who may try to take actions that affect the short-term direction of the exchange rate.

    Overall, it is important to understand that the changing value of the dollar is a factor to consider when investing in global companies or purchasing foreign products, though the risk associated may not be largely influential.

    For more information, please contact Michael W. Yee at (808) 952-1240.
    Advisor is licensed/registered to do business with U.S. residents only in the states of Hawaii. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.© 2010 Ameriprise Financial, Inc. All rights reserved.

    What does this all mean? You hear it regularly in the news: “The dollar rose today against other major currencies,” or “The dollar lost ground today on foreign exchange markets.” Just like stocks or bonds, currency’s value can fluctuate in comparison to each other on a daily basis. For example, at the start of 2011,…

  • Legal: Transfer Tax Ideas for 2012

    This year, many of us will be focusing on two things - the shrinking federal estate and gift tax “coupon” and the radical jump in transfer tax rates. The “coupon” is the amount that the Internal Revenue Code allows you to give away without having to pay gift taxes during your lifetime or estate taxes after you are gone. “Transfer taxes” include gift taxes, estate taxes and taxes on generation-skipping transfers. A generation-skipping transfer is a transfer by or gift or at death to someone who is two or more generations younger than the transferor.

    The Code grants each one of us a $5.12 million coupon for gifts made, or people who die, in 2012. In other words, the first $5.12 million given away this year can pass tax free. As of January 1, 2013, however, the Code says that the coupon shrinks to $1 million. At the same time, the federal transfer tax rate goes from 35% to 55%. Clearly, we are scheduled for a huge tax increase. The only thing that will avert it is an act of Congress by the end of the year.

    If you have an estate worth more than $1 million and you are not fond of paying taxes, you should consider some gifting strategies for 2012 - preferably strategies that will put you in no worse position whether the scheduled tax increase kicks in or not. Here are some ideas.

    Name a charity as beneficiary of your IRA. The bad thing about traditional IRAs is that if you die owning them, your beneficiaries may have to pay both income and estate taxes on anything they receive from your accounts. To avoid this double taxation, you can name one or more charities to receive some or all of your retirement plan benefits, and that way you can save some taxes and send money where you think it will help the most.

    Make annual exclusion gifts. The Code allows each of us to make tax-free gifts of up to $13,000 worth of assets, per transferee, per year. Thus, you can give each of your children, grandchildren, or other beneficiaries $13,000 worth of assets each and every year without even having to let the IRS know about those gifts. It is not hard to imagine how a coordinated gifting program could reduce or eliminate estate taxes for even fairly substantial estates. Every tax-free gift reduces the amount that will be subject to estate tax later on.

    Make qualified transfers. Another form of tax-free gift is the “qualified transfer.” This is where you pay school tuition or medical expenses on behalf of a child, grandchild or other loved one. As long as you pay the tuition directly to the school, or pay the medical bill directly to the provider, these gifts are completely ignored for gift tax purposes – and you can make them on top of your annual exclusion gifts.

    This article just scratches the surface of planning possibilities for 2012, so you should talk with your trusted advisors soon if you think it makes sense to give away some of your wealth during your lifetime.

    For more information about Scott and his law firm, Est8Planning Counsel LLLC, visit www.est8planning.com.

    This year, many of us will be focusing on two things - the shrinking federal estate and gift tax “coupon” and the radical jump in transfer tax rates. The “coupon” is the amount that the Internal Revenue Code allows you to give away without having to pay gift taxes during your lifetime or estate taxes after you…

  • Legal: Make It Personal

    In planning our estate, we often spend much of our energy on deciding how to distribute the home and the cash, and we often overlook the personal items. In my practice, I see families distributing large sums of money and real estate rather smoothly. Then, when it comes to personal property, family conflict arises. From an outsider’s perspective, it can seem somewhat ridiculous - fights over a couch, a ceramic pot or a blanket.

    However, once memories and emotion are added to the picture – such as the family sitting on the couch enjoying each other’s company watching a movie or playing music together; or that we had made that ceramic pot in school and had given it to our parents; or that our grandmother, while in the hospital just prior to her passing, had painstakingly hand-quilted the blanket – they can carry great sentimental value.

    Psychologist Steven Hendlin, in his book, Overcoming the Inheritance Taboo, writes that because the personal property holds the memories of our loved ones who have passed away, we want to hold onto these items. Often, Hendlin says, it is the fear of forgetting our loved one that drives the desire for a particular object. And, the consequence may be huge - many family members risk their relationship with another family member over an object that often possesses no financial value. Parents would not wish to see their children fighting over personal objects.

    Knowing that conflict can easily surface over personal assets, what can we do? The State of Hawai‘i allows us to write down our wishes in a separate writing, often referred to as a Personal Property Memorandum. You simply make a list of your personal items, designate the beneficiary, and sign and date it.

    After you prepare the memorandum, talk to your family about the list. The family discussion can help provide clarity and reduce the chance of any misunderstanding.

    And, finally, these family heirlooms that connect us to our loved ones often come with a story. One priceless gift we can give to our children, our siblings and to our children, is to relay the story about the heirloom, preferably in writing.

    When my mother passed away, my brothers and I put all of the personal items onto a table with the hope of taking turns telling a story about each of the items. Sadly, very few stories were told. We didn’t know the reason why my mother or father kept a particular personal item, or even whether it came from upstate New York where my mother is from, or from Hawai‘i, where my father is from. My office provides what we call “My Heartfelt Will” to our clients to write down these stories, so we don’t risk losing them.

    So, when making your estate plan, remember to pay attention to the personal property as doing so can reduce confusion and conflict, promote family harmony, and preserve family history.

    For information contact Stephen B. Yim, Attorney at Law at (808) 524-0251, stephenyimestateplanning.com.

    In planning our estate, we often spend much of our energy on deciding how to distribute the home and the cash, and we often overlook the personal items. In my practice, I see families distributing large sums of money and real estate rather smoothly. Then, when it comes to personal property, family conflict arises. From…

  • Be An Aware Consumer – Avoid Being Scammed

    It’s no secret that con-artists go where the money is. That means that schemers and scammers target citizens who are retired or who are about to retire who have been accumulating money through their retirement plans, real-estate and their personal bank accounts.

    The truth is that we are all at risk. Nevertheless, you can help protect your family and friends by knowing how scammers work and by reporting fraudulent investment sales pitches and other scams to the authorities. The key is to recognize these offers that sound too good to be true. Con-artists are very adept at coaxing and altering their pitches to the profiles of their victims. They often ask casual questions about hobbies, health, family and political beliefs. Once they identify a way in, they will overwhelm you them with various tactics in an attempt to defraud them of money. The two most common tactics are:

    The get rich quick tactic: This tactic tries to persuade you that with “this investment” you will obtain something you want but cannot have. For example, a scammer might guarantee you that a business opportunity will produce a monthly income of $4,000 guaranteed!

    The credibility tactic: This tactic tries to attain credibility by claiming to belong to a respected group or having a certain experience or special connection.

    Claims of endorsement or affiliation: The scammer may claim to be endorsed by a state or federal agency, or the Better Business Bureau, agencies that do not endorse private companies.

    A couple of things you can do to prevent becoming a victim of these types of frauds are to take control and ask questions. Remember that any legal investment agent must have specific types of licensing. Your Better Business Bureau has Business Reviews on thousands of businesses which contain licensing and complaint information. Verify any information that is given you with another source and practice saying “No” and “I am not interested”.

    Hawai‘i’s BBB works to help prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid scams.

    Better Business Bureau - Generations Magazine - April-May 2013

    It’s no secret that con-artists go where the money is. That means that schemers and scammers target citizens who are retired or who are about to retire who have been accumulating money through their retirement plans, real-estate and their personal bank accounts. The truth is that we are all at risk. Nevertheless, you can help…

  • Financial: Time For You To Refinance?

    According to research done by Freddie Mac, the average rate on a 30-year mortgage in the U.S. dropped below 4% for the first time ever in 2011. Rates on shorter-term, 15-year mortgages are even lower.

    For some, this creates a great opportunity to refinance the mortgage. But it’s not the right decision for everyone. Here are four questions to consider:

    1. How much equity do you have?

    Refinancing may be a priority for homeowners with disadvantageous loan terms or who owe more on their home than it is worth. But these situations can make it difficult to qualify for refinancing. Consult with your mortgage company about whether a different financing package can be structured for your home.

    If you do have equity in your home, it’s possible to structure a payment that may be dramatically lower than your current monthly mortgage. If the amount of equity is not much different than the current value, the payment will be closer to what you already have, but would likely be an improvement due to the recent decline in interest rates.

    2. Why do you want to refinance?

    Locking in a historically low rate can be appealing, but if you are within a few years of paying off your mortgage, it may not make sense for you to re-start with another 15- or 30-year mortgage.

    3. Are you in a position to refinance?

    If you have run into credit problems, refinancing may not be as easy as it used to be. Households need to have a sufficient credit score — usually 700 or higher — to qualify for a conventional mortgage.

    Employment status could be another factor. A number of Americans, some involuntarily, have recently left the workforce and started their own business. If you don’t have an established record of income, it might be difficult to obtain a new mortgage. Ask your mortgage company whether it’s worthwhile for you to pursue the mortgage application process.

    4. Determine the terms that suit your needs

    The final question is whether to opt for a 15-year or 30-year mortgage. An adjustable-rate mortgage is also an option, but since the terms of those loans are subject to change.

    If your primary goal is the lowest possible payment, a 30-year loan makes sense. If your focus is to reduce debt and accumulate wealth, a shorter-term loan may be better; the total interest paid on a 15-year loan will be significantly lower than with a 30-year mortgage. While monthly payments will be higher, a 15-year loan offers more long-term advantages for these homeowners since the financial obligation of a mortgage will no longer exist after 15 years, allowing you to concentrate on retirement or education savings.

    If you decide to refinance, be sure to compare costs of different lenders. The breakeven point on the cost of the loan (the number of years you need to keep the mortgage before the costs of obtaining a new loan are overcome) is a critical measure of whether refinancing is a worthwhile move for you.

    For more information, please contact Michael W. Yee at (808) 952-1240. Advisor is licensed/registered to do business with U.S. residents only in the states of Hawaii. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.© 2010 Ameriprise Financial, Inc. All rights reserved.

    According to research done by Freddie Mac, the average rate on a 30-year mortgage in the U.S. dropped below 4% for the first time ever in 2011. Rates on shorter-term, 15-year mortgages are even lower. For some, this creates a great opportunity to refinance the mortgage. But it’s not the right decision for everyone. Here…

  • Financial: Uplifting Choices

    Getting Your Plan in Order

    Perhaps you’ve asked yourself questions like, “How can I plan? We just sold our home and bought a retirement condo. Our older child just moved across the country and our younger child will be getting married later this year. With so much change, how can we make plans?”

    Life Changes Quickly

    In each of our lives, change comes very quickly. You are going to face new circumstances every year. Yet planning exists to prepare for life - and to give your family members better lives. It is essential to create goals that help your family live better in the midst of new circumstances. Even if you or your family is going through major changes, there are several basic steps that will help you succeed in your plans.

    Set Goals

    Step one for a successful life is to have goals. It has been said, “If you don’t know where you’re going, you’re not likely to get there.” This is very true about goals for your family and for your estate. Think about goal-setting as though you are purchasing a birthday gift for a family member in a clothing store. A clothing store might have 20 or 30 different sizes. One size does not fit all in the area of clothing and it also doesn’t work for your family and estate plan.

    How do you find the “right size?” Just like clothing for a family member must fit properly, in your planning for family, it’s important to decide the right time and amounts for an inheritance to be most beneficial for your children, grandchildren, nephews and nieces. Your other goals may include the age for heirs to receive property and reducing costs and estate taxes.

    What Do You Own?

    Can you write down a list of all the property you own? I once represented a married couple who estimated that they owned about $500,000 worth of property. However, when we went through their assets carefully it turned out they owned more than twice that amount and were millionaires. It’s not uncommon for people to “forget” or undervalue some of their assets.

    Understanding your property starts with listing all of your assets – your savings account, certificates of deposit, home, IRA, 401(k) and personal assets, among others.

    Children, Grandchildren, Nephews and Nieces

    Your plan to benefit family during your lifetime or through your estate will vary greatly depending upon the ages and circumstances of your children and their needs. For parents with minor children, a key decision is to select a guardian. Minor children also need to have property held in trust, so there is appropriate investment and expenditure of those funds. For adult children, it’s important to think through the right time, right amount and right type of inheritance. Many families find that a trust that pays income for a number of years to adult children is also a very helpful method to provide added security for them. Some families get energized when they find that they can leave a legacy of significance to their community, while at the same time making sure to provide for their family needs.

    A Convenient Way to Plan

    Would you like to have a convenient way to think through some of these issues before you consult with your financial advisor or attorney? A free tool is available at kidney.giftlegacy.com where you can plan your will, consider whether a trust is right for your family, and request a free wills guide from the National Kidney Foundation of Hawai‘i. The secure web site lets you gather your information and ideas together, read general information about planning, and even prepare for a meeting with your advisors. Why not take a look at kidney.giftlegacy.com today? It just may help you answer the question, “How can I plan?”

    For consultation call 589-5976. Be sure to register for a free eNewsletter and check out the wealth of information at www.kidneyhawaii.org.

    Getting Your Plan in Order Perhaps you’ve asked yourself questions like, “How can I plan? We just sold our home and bought a retirement condo. Our older child just moved across the country and our younger child will be getting married later this year. With so much change, how can we make plans?” Life Changes…

  • New and Powerful Estate Planning Tool: the Hawai‘i Asset Protection Trust (APT)

    Two years ago, Hawai‘i joined Delaware, Nevada and 11 other states in validating self-settled spendthrift trusts. What this means is that you can now create a trust for yourself that will protect your assets from your own creditors. This is a huge departure from prior law, which expressly prohibited such trusts. For convenience, we will call them APTs, which stands for Asset Protection Trusts.

    Not only do APTs provide asset protection, they can also be made to last forever, or at least until all of the assets are used up. Hawai‘i law has long recognized something called the rule against perpetuities, which essentially says that a private trust (that is, any trust other than a charitable trust) can last for about 100 years, and then the trust must terminate, and the assets must be distributed. This is a throwback to the law of England (where most American law comes from) and a time when the king did not want land being tied up in trusts because it impaired his ability to tax it. Now that our government has developed a solution to this problem, Hawai‘i has joined the ranks of states that allow the creation of so-called Dynasty Trusts.

    Hawai‘i’s first attempt at allowing APTs, which was back in 2010, was doomed to failure. For one thing, the law imposed a 1% tax on all assets transferred to APTs. The law also limited the kinds of assets that could be put into APTs, and it allowed a trustmaker (someone creating an APT) to place assets comprising no more than 25% of his or her net worth into an APT. Since the laws of other states did not include these restrictions, there was very little incentive for someone to create a Hawai‘i APT.

    In 2011, our Legislature removed the restrictions on APTs, so that a person can place any kind of property into his or her APT, and there is no 1% tax imposed on each asset transferred into the trust. The new law became effective on July 1, 2011, and Hawai‘i APTs are now viable tools in many people’s estate plans.

    A Hawai‘i APTs is not for everybody. You should only create one if you understand what it is and how it works, and before you do anything else, you should seek the assistance of competent legal counsel and other advisors who can help you evaluate whether this is a workable strategy for you.

    The new Hawai‘i law says that you cannot be the trustee of your own APT, but you can pick any Hawai‘i resident or Hawai‘i financial institution as your trustee. The trustee can have the discretion to make distributions to you or for your benefit, but you cannot have the unfettered right to demand whatever you want whenever you want it. You can also retain the right to give the trustee investment advice, and you can also have the right to veto distributions from the trust.

    Perhaps the most important thing to understand about Hawai‘i APTs is that they do not shelter assets from claims of existing creditors. In other words, you cannot incur a debt (for example, by way of a car accident or a bad business deal) and then create a Hawai‘i APT to shield you from liability on that debt. On the other hand, the ideal time to create a Hawai‘i APT is before you start a new business or launch a practice in a field such as medicine, law, or architecture, where legal claims against you are an ongoing risk.

    For more information about Scott Makuakane and his law firm, Est8Planning Counsel, LLLC, visit www.est8planning.com. Or tune into his weekly TV talk show, Est8Planning Essentials on KWHE (Oceanic channel 11) at 8:30 a.m. on Sunday evenings.

     

    Two years ago, Hawai‘i joined Delaware, Nevada and 11 other states in validating self-settled spendthrift trusts. What this means is that you can now create a trust for yourself that will protect your assets from your own creditors. This is a huge departure from prior law, which expressly prohibited such trusts. For convenience, we will…

  • Uplifting Choices

    For many people end-of-year tax planning is a regular part of their lives. Given the com-plications that our tax system can engender, it is no wonder that taxes often impact personal goals and desires, especially during the holiday season when families are focused on relationships and gift giving.

    However, it is possible to use tax-favored strategies to make your holiday charitable giving go further. For example, if you are over age 70½, the federal government permits you to rollover up to $100,000 from your IRA to charity without increasing your taxable income or paying any additional tax. These tax-free rollover gifts could be $1,000, $10,000 or any amount up to $100,000 this year. The gift satisfies your required minimum distribution (RMD) for this year without adding any taxable income to your bottom line, and since most IRAs are funded with pretax dollars, such gifts are a smart way to give to charity.

    IRA Rollover: Simple, Easy Gift

    Consider this example. Grace was a registered nurse and a frequent charity volunteer. During her working years, Grace’s IRA had grown substantially. Since Grace’s income meets her needs, she decided to make a gift of $2,000 from her IRA. Grace called her custodian and requested a transfer of $2,000. It was easy for Grace to make her charitable gift and she liked the fact that she could help without increasing her taxes.

    Major IRA Gift: Smart Giving

    Perhaps you are considering your tax planning goals and would like to make a major gift to charity. Like many individuals, your IRA may be the largest asset in your estate. Your CPA may be looking for ways to save taxes. By making an IRA charitable rollover gift of up to $100,000, you can reach your goal of helping charity in a significant way and reducing taxable income by using an asset that may otherwise be taxed at high ordinary tax rates.

    Future IRA Gift Options: Helping Your Family and a Charity You Support

    While you have the opportunity to give through your IRA now, there are other options available for making future gifts from your individual retirement account to charity:

    Bequest of IRA: One option is to designate a charity as the beneficiary of your IRA. This permits you to continue to take withdrawals from your IRA during life and then leave the remaining value of your IRA to support a worthy program that is important to you.

    Testamentary IRA Gift Annuity: Another option is to make a future gift of your IRA to charity while providing life income to your heirs. Your family will receive fixed payments based on your age at rates that can be as high as 9.5%.

    Testamentary IRA Unitrust: An IRA could also be transferred to a special “Give It Twice” trust that usually provides income to children for a period of up to 20 years. After that time, the trust may pass to charity, creating a wonderful way for you to make a charitable gift.

    This holiday season if you would like to discuss charitable giving options available to you, please contact Jeffrey Sisemoore, JD, Director of Planned Giving and Major Gifts at the National Kidney Foundation of Hawai‘i at 589-5976 or visit www.kidneyhi.org.

    For many people end-of-year tax planning is a regular part of their lives. Given the com-plications that our tax system can engender, it is no wonder that taxes often impact personal goals and desires, especially during the holiday season when families are focused on relationships and gift giving. However, it is possible to use tax-favored…

  • Stay Uplifted Amid Economic Downturns

    Investors are being forced to cope with what many perceive as unprecedented circumstances in the economic and political environment. At the same time that the U.S. economic recovery appears to be slowing, Standard & Poor downgrades the U.S. credit rating on debt issued by the U.S. Treasury. Confidence that government policymakers can do anything significant to help improve the environment is low.

    These and other concerns are contributing to a sense of unease for many investors. How should these major shifts in global politics and financing affect your personal portfolio strategy?

    Here are three realities to give you an appropriate perspective on the challenges that lie ahead:

    1] The downgrade may be justified, but might have been premature.

    Standard & Poor’s shifted the nation’s credit rating from AAA to AA+. Part of their rationale appeared to center around concerns that a dysfunctional political environment will prevent budget issues from being resolved in an effective manner. However, history is filled with examples of how American politicians have forged deals to resolve crises. It may not be fair to discount the potential that policymakers will come to agreement not just on budget issues, but other legislation designed to give the economy a boost.

    2] Good news is often hidden.

    In periods like these when troubling news leads the headlines, investors are often surprised when markets perform well. This is due to the fact that some market observers are looking beyond the headlines to see other trends that are favorable. The same is true in today’s environment. Corporate profits remain strong and companies in the U.S. and elsewhere generally have solid balance sheets. Emerging markets are growing robustly and will likely help spur ongoing economic activity in other parts of the world, including the U.S. prices for gasoline have moderated in recent weeks, boosting consumer purchasing power. Even in difficult times, seeds of future prosperity are planted.

    3] Stocks may offer more attractive value than bonds.

    Many individuals have been pulling money out of the stock market and investing in bonds (or bond funds). Yet with interest rates on U.S. Treasury securities near their historic lows there appears to be an limited upside. Worse yet, bonds paying extremely low interest rates can be risky for investors. If interest rates begin to rise, bondholders could be in for a negative surprise. That’s because bond prices decline when interest rates rise. Stock values, meanwhile, remain well below the peak they reached in the fall of 2007 before the dramatic, 50 percent downturn occurred. At that time, the S&P 500 Index topped out at 1,565. Today the S&P 500 is 20 percent to 25 percent below that all-time peak. This indicates that upside potential remains over the long run, though the market will likely continue to suffer through ups and downs along the way.

    Investors are being forced to cope with what many perceive as unprecedented circumstances in the economic and political environment. At the same time that the U.S. economic recovery appears to be slowing, Standard & Poor downgrades the U.S. credit rating on debt issued by the U.S. Treasury. Confidence that government policymakers can do anything significant…

  • Charity Scams Target Seniors Heavily During the Holiday’s

    Donating money to charity is one of the most selfless things a person can do. Unfortunately, criminals can easily prey on these selfless acts, using a person’s desire to help the less fortunate for their own 
personal gain.

    Seniors should be especially mindful of fraud schemes during the holidays. The FBI notes that seniors are most likely to have a nest egg and an exceptional credit rating, making them very attractive to criminals.

    If you plan to donate money this holiday season, the Better Business Bureau (BBB) offers the following advice:

    Be cautious when giving online. Be cautious about online giving, especially in response to spam messages and emails that claim to link to a relief organization.

    When in doubt, check it out. When an unfamiliar organization asks you for a donation, don’t give without gathering details about the charity, the nature of its programs and its use of funds.

    Check out a charity’s claims. Despite what an organization claims, charities have fundraising and administrative costs. Even a credit card donation will involve, at a minimum, a processing fee. If a charity claims that 100 percent of collected funds will be assisting, check it out.

    Think before you give. If you are solicited at home or on the street, take a minute or two to “think.” Ask for the charity’s name and address, and get full identification from the solicitor and review it carefully. Ask to see written information on the charity’s programs and finances.

    Giving later might be better. Never feel pressured to give on the spot. Legitimate charities will welcome your money tomorrow. If the solicitor pressures you with intimidation or harassing phone calls, don’t hesitate to file a complaint with BBB.

    Watch out for cases of mistaken identity. With hundreds of registered charities in Hawai‘i alone, it’s not surprising that some charity names sound alike. Be careful that the one soliciting you is the one you have in mind.

    Watch out for charity fraud. Legitimate charities do not demand donations. They willingly provide written information about their programs, finances or how donations are used; and they never insist you provide your credit card number, bank account number or any other personal information.

    Donating money to charity is one of the most selfless things a person can do. Unfortunately, criminals can easily prey on these selfless acts, using a person’s desire to help the less fortunate for their own 
personal gain. Seniors should be especially mindful of fraud schemes during the holidays. The FBI notes that seniors are…

  • Phone Scam Comebacks

    Telemarketing scams have in some cases become more profitable than drug trafficking. Scammers have made millions of dollars by perpetrating over-the-phone schemes.

    Scammers use technology to disguise their locations, telling victims they are calling from federal or state agencies and providing phone numbers with local and United States area codes. The con artists hold out the promise of a sweepstakes, lottery or other winnings but ask for taxes and other fees up front.

    Fraudulent telemarketers use five basic techniques:

    Scarcity: The senior has been identified as the grand prize winner, but if the senior doesn’t accept the prize immediately (and pay that “handling charge”) the runner-up will get the prize instead.

    Hype: The telemarketer screams and hollers about how excited he is that the senior has won.

    Authority: The telemarketer passes the phone to his “boss,” so his target will know the offer is “legitimate.”

    Reciprocity: The telemarketer explains that she won’t receive her commission unless the senior accepts the prize and pays the handling fee. When the senior protests that he doesn’t have enough money to pay the fee, the scammer asks how much he can afford, and says she’ll accept that smaller amount, just because she’s so happy the senior has won the prize.

    Phantom Fixation: The prize is too good to pass up, and the targeted senior becomes fixated on it.

    Con artists will change from one persuasion tactic to the next, if necessary. Hawai‘i’s Better Business Bureau (BBB) offers a few tips to help seniors deal with prize telemarketers.

    Tip #1: Never give personal information, such as bank account or social security numbers, to anyone over the phone, unless you initiated the call and know you’ve reached the right agency.

    Comeback: “I don’t give out personal information over the phone. I’ll contact the company directly.”

    Tip #2: Don’t believe it if the caller tells you to send money to cover the “handling charge” or to pay taxes.

    Comeback: “I shouldn’t have to pay for something that’s free.”

    Tip #3: “Limited time offers” shouldn’t require you to make a decision on the spot.

    Comeback: “I’ll think about it and call you back. What’s your number?”

    Tip #4: Be suspicious of anyone who tells you not to discuss the offer with someone else.

    Comeback: “I’ll discuss it with my family and friends and get back to you.”

    Tip #5: If you don’t understand all the verbal details, ask for it in writing.

    Comeback: “I can’t make a decision until I receive written information.”

    Practice these comebacks with your friends and family. Also, tell telemarketers to take your name off their call list. If the telemarketers don’t, they’re breaking the law. Sign up for the National Do Not Call Registry at www.donotcall.gov to stop telemarketers from calling.

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    Telemarketing scams have in some cases become more profitable than drug trafficking. Scammers have made millions of dollars by perpetrating over-the-phone schemes. Scammers use technology to disguise their locations, telling victims they are calling from federal or state agencies and providing phone numbers with local and United States area codes. The con artists hold out…