How to Break into Your Community’s Arts & Culture Scene

Hello everyone,

Hilda Gurney
Dressage Expert

Has anyone had a both humbling and exciting experience recently?  A few weeks ago I got to ride for Hilda Gurney, an internationally-known dressage rider, trainer and judge.  I first heard about Hilda from the lady who really introduced me to dressage in West Texas.  My trainer absolutely loved Hilda and said she was an amazing horsewoman.  So, when I had the opportunity to ride in a clinic with Hilda I jumped at the chance.  For those of you who don’t know, I am taking up my pursuit of dressage as an adult, so I feel a little behind the power curve with my strength and skill –but it doesn’t stop me from working towards my goal of Grand Prix every day.  My ride ended on the second day and Hilda summed up, “You have a great horse and now you just need to learn how to ride.”   All was not lost for me because I have done 90% of the training on my horse so I’ve contributed to our progress in a positive way.  And, learning how to ride is what I’m doing. I have a really nice piano at home but it doesn’t help me play a lot.

Inspiration

I want to share with you an amazing program called Leadership Pikes Peak (LPP) that I am working with in Colorado Springs that is really connecting me with the community.  This month we had Arts & Creativity Day.  My morning began with the concert master playing a violin solo, followed by an Improv teacher from the local theater playing with us “Yes, and then…”  In the afternoon we went to the Fine Arts center and had an art activity and got to see all of the art the museum has in the basement.  Did you know that a museum typically only shows 5-15% of their collection at a time!  Finally we were introduced to a new non-profit organization called Cultural Office of the Pikes Peak Region (COPPeR).  COPPeR has a great newsletter that summarizes all of the cultural events for the week making it so much easier to find a great weekend activity.   Apparently most cities around the country have a similar type of program and it is very cool to be integrating into the community at this level. 

PS.  Kris & I went to see the Colorado Springs Philharmonic with music director Shizuo Kuwahara. 

Personal Wisdom from Me to You

I just read a Harvard Review blog post by Tony Schwartz entitled 6 Keys to Being Excellent at Anything.  I felt like this was speaking to me directly about my journey to learn dressage as an adult.  I can tell you that I may be older but I am more focused on my goal and have a better understanding of what it is I am working to achieve.  I can tell you that for me dressage is inspiring and this positive experience bleeds over into all of my other endeavors—including the focus and creativity I bring to my investment advising business.  Take time this month to find your muse.

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5 Tips You Must Have To Survive the Holidays with Family   High Profile Expert, Author Robert Schwaninger Robert Schwaninger is President of Schwaninger & Associates, Inc., a Washington, D.C. law firm that specializes in telecommunications law.  He is also author of the book "A Married Man's Guide To Christmas".  Mr. Schwaninger has been quoted and interviewed by the Wall Street Journal, Newsweek, the Washington Post, the New York Post and other publications, and was a magazine columnist for nine years on areas related to telecommunications and finance.

5 Things Savvy People Know About Wine—How to Host an Amazing Holiday Event High Profile Expert—Graduate Level Sommelier, Drew Robinson  Drew Robinson is an accomplished wine expert with years of experience supported by top-notch credentials.  Amazingly, a sommelier at only 25, Drew has guided the development of wine programs in 10 different restaurants, has won 7 consecutive “Best of Award of Excellence” (only 800 worldwide), and holds a Level 3 Advanced Certificate by WSET (Wine & Spirits Education & Trust) based in London.  Most recently, The Blue Star Restaurant in Colorado Springs was awarded the “Award of Excellence” from the Wine Spectator under Drew’s leadership.  Currently working as a distributor, Drew knows how to guide people to the right wine and knows what you should pay for a bottle of wine.

Using Social Media to Expand Your Business Network and Add Value to Your Clients High Profile Expert—Entrepreneur, Sarah Martin, International Dressage Trainer and USDF Gold Medalist 

What Your Child Needs to Know about College Networking & Job Search Strategies—Dig the Well before you’re Thirsty!  High Profile Expert from Yale—University Career Services Professional, Kathy Douglas 

Also remember…

If you have questions and would like to learn a little more about me please visit my website www.taraenolan.com.

Cheers,

Tara J

www.taraenolan.com

The College Financing Bear: What are My Options?

Hello Everyone,

We have had an absolutely beautiful fall here in Colorado.  Kris and I have been getting up into the mountains.  We went on a trail ride with our horses, Donzer and Ava, at the foot of Mount Herman in Monument and we went hiking on the Argentine Pass.  We were trying to hike Mount Bierstat but it turns out the road to Guanella Pass has been closed for awhile due to a rock slide.  We were able to see some beautiful Aspen’s fall colors anyway.  My teacher friends are back to school and this brings me to this month’s topic:  Financing College. 

Current Cost of College

For those parents with children already in school, this will not be news but for folks with kids planning for college in a few years here are the current stats according to the College Board’s “Trends in College Pricing.” 

4-Year Public School in State            $15,213

4-Year Public School Out of State    $26,741

4 Year Private School                       $35,636

NOTE:  Under today’s laws, you cannot use student loans (federal or private) to file bankruptcy.

Research Sources

Wow, does this get your attention.  If you have a few years to go before college, you can see what target numbers you need to be saving for now.  But, there have to be a few more options out there.  So where can you find some information?  I found 2 great websites.

1. FinAid.org is designed to answer the question, “How do I finance my child’s education?”

2. FastWeb.com is designed to answer the question, “How to pay for college.” 

The expert behind these websites is Mark Kantrowitz, a noted financial aid and college planning author.  These websites are a great place to start your research.  In fact, it would be great to sit down with your child and look at the websites together.  Regardless of your current financial situation, this is a perfect opportunity to discuss the differences in grants, scholarships and loans.  It’s another chance to go over some decisions regarding loan terms, especially interest rates and payback options.  Arming your child with some financial knowledge will only help in their future endeavors.

Starting Discussion with your Child

One more way to get the discussion going with your college-bound child is a new book that has been in the media recently.   This book is written by a current college senior, Zac Bissonette entitled, “Debt Free U, How I Paid for an Outstanding College Education without Loans, Scholarships, or Mooching off My Parents” discusses how he was able to attend college without loans or direct help from his parents.  College planning is definitely worth researching to get out ahead of the challenges.  There are a lot of considerations and the time arrives more quickly that you think it will. 

Cheers,

Tara :) 

Is a Roth IRA Conversion for You? 5 Things to Consider

Hello Everyone,

Tara & Donzer

Before sharing information with you about Roth Conversions, I want to begin this month’s newsletter thanking my family, friends, and instructors for supporting me in my pursuit of dressage—I couldn’t do it without my team.  I can tell you that the last part of August and this first part of September has been a whirlwind of exciting events.  On the horse front, two exciting announcements.  First, Donzer and I, riding our best test of the year, placed third at the USDF Third Level Adult Amateur Championship.  I particularly enjoyed this ride because Donzer let me drive the whole way without adding any flair of his own.  For those of you that don’t ride I can tell you that when a 1300lb horse decides he is going to “help” there is not a lot you can do in the moment to argue without the judge noticing.  Second, I finally received my USDF Bronze Medal.  I began riding dressage 10 years ago on my quarterhorse, Red.  Red was able to take me through first level, but my new horse Donzer is going to be my partner for the next few years.  I can honestly say that I did not think it would take 10 years to earn my bronze medal scores when I began my endeavor.  Now there’s just a Silver and Gold medal to go!

One the business front, I made the decision to resign from my position with a broker dealer and have established my own company, Tara Nolan Advisory Services, ltd.  I have updated my website and have some more changes on the way.  I am very excited to be driving the train so to speak.  I have very definite ideas of how I want to take care of my clients and now I can provide exactly the kind of service I want to be known for—educational and inspiring!

The first new service I am instating for my clients is a Lifestyle based teleconference series.  I have solicited suggestions for topics from my current and future clients and my first call was:  

Kathy Douglas

What Your Child Needs to Know about College Networking & Job Search Strategies—Dig the Well before you’re Thirsty!  
High Profile Expert from Yale—University Career Services Professional, Kathy Douglas 

You can click here to listen to the call from my website.

I will continue to provide investment tips and food for thought in the monthly newsletters.  I am always open for topic requests and you can send your suggestions to tara@taraenolan.com.  

In this post I want to talk about Roth Conversion 2010:  Is it for me?

This question is challenging to answer in a purely mathematical way because assumptions have to be made and none of us has a crystal ball to know exactly what the future holds.  If you Google, Roth IRA conversion calculators, you will find a huge list of options.  In a sweeping generalization, one of the biggest assumptions is future tax rates.  If your future tax rate is significantly lower, then the conversion may not save much money.  However, it taxes rise, then a conversion is a simple yes answer.  You will also want to discuss with your advisor and possibly your CPA how you will handle paying the taxes incurred by a conversion to a Roth IRA. Let me break out these considerations for you:

5 Reasons Clients Should Consider at Least Partial Conversions

THOUGHT #1: Estate planning options: Roth assets left to heirs maximize the Roth benefits because of the longer period of tax-free build up. The tax payment itself lowers the value of the estate and consequently reduces estate taxes. We don’t know if or when the estate tax will be reinstated. There's something very satisfying about leaving a legacy that is free of all encumbrances.

THOUGHT #2: Live with your current Tax Rate: You know what you’re paying today and you are obviously making it work.  Do you want to take the chance that your taxes might go up and you’ll have to pay the higher rate on withdrawals from a Traditional IRA?  Or, do you think your tax bracket will be lower when you retire? Only you can answer this question for yourself. 

THOUGHT #3: Tax Diversification: When you have a variety of accounts from which to draw retirement income, taxable, tax deferred and tax free, you have much more flexibility in arranging your taxable income. We can't know for sure what tax rates will be in the future, but if they do go higher, a Roth conversion done now will hedge against that possibility.

THOUGHT #4: Tax Flexibility: With a Traditional IRA you are required to take dispersals which will contribute to tax basis for the year.  If you have a Roth IRA you have a source of income that will not impact your taxes. This can become a factor when you start receiving Social Security or Medicare.

THOUGHT #5: The Future of Tax Legislation: As the nation struggles with high deficits, our taxes may change. We've recently seen the new health reform law add a 3.8% Medicare tax on unearned income starting 2013 for high income households. To save on this and other potential tax hikes, it just makes sense to have a source of tax-free income alongside your taxable and tax-deferred accounts.

Of course, there are always exceptions:

• Income needs: If you need income from the IRA now or will soon, you probably shouldn't convert. It takes time to recover from the conversion tax hit. The longer the assets can remain invested, the more advantageous the Roth will be. Also, if you are close to retirement and know you will definitely drop to a lower tax bracket (confirm with a CPA), you probably shouldn't convert.

• 10% penalty: If you are under 59½ and do not have outside funds to pay the conversion taxes, there would be a 10% penalty on any funds that are taken out of the traditional IRA and not put into the Roth.

Also remember…

Make sure you’ve made your appointments for your annual financial plan review.  And, if you’re not already working with me, feel free to make an appointment for an initial free consultation.

If you have questions and would like to learn a little more about me please visit my website www.taraenolan.com.

Cheers,

Tara J

www.taraenolan.com

Are You Speculating or Gambling?

Kris & Tara by Captain Ron's Habitat

Has anyone taken their summer vacation yet?  Kris and I just got back from our scuba diving trip to Bonaire, the Dutch Antilles.  What a great trip!  We got to see turtles, loads of fish and coral, and special treat of spinner dolphins escorting our boat back to the dock. 

For anyone who hasn’t been diving you might imagine it is kinda scary.  It can be a scary sport but what makes it relaxing and fun is good preparation.  I can tell you I got my initial PADI certification in Saipan in 1998.  I didn’t dive for 10 years.  When I jumped back in the water without a refresher course I experienced my first panic attack ever.  I couldn’t remember how my equipment worked and the sensations of being back in the ocean were not exactly like I remembered.  So, I took a step back and relearned my basic skills.  Now, I love it again.  So my point is the best security comes from education and preparation.

I think the same principles apply to managing your finances.  Do you have a clear plan for investing?  How much research of the market do you do and how much do you research in a good advisor?  Do you have the time and inclination to become an expert?  

What sources to you rely on for your information?

I came across some great articles this month and I want to share with you this question:  Do you gamble, speculate, or invest your money?

Are you gambling, speculating, or investing your money?  Do you know the difference? Is it possible you could be speculating and/or gambling with your money, and calling it investing?  You bet it is. Although there are many definitions and disagreements as to what speculating and gambling are, there are some clear signs you are speculating and gambling with your money, versus investing it.

Gambling

Gambling probably brings to mind, visions of Atlantic City or Las Vegas with a spinning roulette wheel or a black jack table.  There are so many movies showing either math wizards out to count cards or the old gambler who can read any poker player’s tell.  These characters set out to win big and almost always walk away empty handed. 

Gamblers believe they can beat the odds and be the exception. Statistics prove otherwise.

What is so exciting about gambling? I think everyone knows of someone who has won some money playing the slot machines.  It was an exciting experience to win because deep down we all know that luck was at play—not skill.

Speculating

The speculator is thought to put some research into their decisions. They combine their data with some rational thought to take a calculated risk.  Speculators must accept a higher risk for a chance to receive a higher return.  The flip side is they are at risk of a greater loss. 

Are speculators comfortable with the risk of greater loss?  Or, are they blinded by the potential gain? Remember, the fine print on the back of every financial prospectus says past performance is not a reliable indicator of future performance.

Signs You Are Speculating or Gambling

 Here are the signs you are speculating or gambling with your money instead of investing it:

Emotional Response

If you are basing your investment decisions mainly on fear (the markets are going down!), or greed (the markets are going up!), you are not investing.

Office Gossip

If you are making investment decisions based on office conversation, or your brother-in-law’s recommendation, or anyone’s insistence that everyone’s doing it, you are not investing. By the time these types of conversations take place, chances are you are violating the cardinal rule of investing – buy low, sell high.

Listening to the Media

If you are getting your investment recommendations from magazines, TV, and the internet, I suggest you do a little due diligence before you invest – think Jim Cramer of CNBS’s Mad Money and his Bear Stearns recommendation.  Simply check out the performance of the investments these media outlets recommended a year ago.  Remember, no one can predict the future!

Stock Picking

If someone tells you they have superior knowledge of the financial markets and can pick the next hot stock winners, run. Studies have proven over and over that this is not the case.  Even so-called financial gurus have not been able to maintain their performance over long periods of time.

Market Timing

If you are jumping in and out of the your investments, thinking you can predict the ups and downs of the market for a better overall performance, think again.

What really happens is this – the markets go down; investors sell, and lock in their losses.  They then wait until the markets “look good” again, and jump back in.  Selling low, buying high – again very hazardous to your financial future.

Track Record Investing

If you are picking your investments based on the number of “stars” they have received from a financial ratings agency (star gazing), I’ll again remind you that past performance is not an indication of future results.

Healthy Investment Considerations

How does your advisor get paid?  Commissions and internal costs (such as trading costs) not readily visible to the investor. Ask the question.

How do your money managers choose stocks, bonds, or funds? There should be a clear process including research of company performance, cash flow review, and management.

Do you understand the investment philosophy?  In order to decide if you agree with the approach, you need to be able to understand how the process works.  If you cannot understand the investment approach, then it is probably not the best fit for you.  You hire an experienced advisor to manage the details but you need to understand the overarching concepts.

Also remember…

If you have questions and would like to learn a little more about me please visit my website www.taraenolan.com.

Cheers,

Tara J

www.taraenolan.com

How to Interview a Financial Advisor

This summer has been flying by for me—how about you?  I got to go a horse show this past weekend and finally rode my first third level test!  For anyone who doesn’t know what that means just tell me “Good Job, Tara.” 

Do you remember being a kid and in between playing with your friends sometimes imagining what your future would be like?  I used to spend a lot of time day dreaming about riding fancy show horses.  Well, I have arrived and am now living this dream.  I remind myself that my riding and pursuit of dressage is my passion.  It is one of my motivations for investing and creating the life I want to have. 

When you are creating your ideal life you need to have a supporting team around you.  You need your doctors, dentists, babysitters, your tax advisors and yes, financial education and possibly an advisor.  There are many experts available and the key is finding a person that is a good fit for you.  Your advisor should feel like someone you’re not only able to call but happy to call. 

Let me share some questions you should ask as you interview financial advisors.

Where Do I Begin

First, decide what help you need.  Then talk to family members, friends, your accountant, your lawyer.  Get some names.  And then the fun begins!  Do not assume since your brother-in-law or co-worker or BFF recommends a particular financial advisor, that person is a good fit for you.  You need to do your own due diligence to determine whether you want to work with someone.

Researching a Potential Advisor

Do they have a website?  Look for their SEC or FINRA registration information on the website.  You can also check out financial advisors by going to the Financial Industry Regulatory Authority website at www.finra.org, and click on Brokercheck.  It’s very easy, and you will find out all kinds of background information about the financial advisor - where they have worked, any complaints registered against them, and what licenses they hold for securities.   If they are a Registered Investment Advisor (RIA), you can go to the Securities and Exchange Commission website at www.sec.gov, and click on Check Out Brokers and Investment Advisors. 

Call Them for a Brief Interview

Talk to a potential financial advisor briefly on the telephone to determine whether you are the type of client they specialize in.  Do they have account minimums?  Do they work with people like you?  If they do, set an appointment to do an in-person interview with them.  Ask them if they will charge you for an initial consultation – most advisors will not.  And yes, I did mean to say interview – you are interviewing the financial advisor to see if this is a relationship you want. 

Meet in Person

Here is where your due diligence process comes in.  It is up to you to determine whether you want to work with this financial advisor.  Think about all the investigation we do when buying an appliance, or a car, or furniture for our home.  Get face to face with them, and ask every single question listed below!  In fact, print this questionnaire and take it with you to your meeting.  This is your financial future we are talking about, and you need to do the homework!

Questions You Need to Ask


     1.  Why are you a financial advisor?   This is not the most important question of   all, but it will help you determine if their focus aligns with your ideas of investing.

2.     What licenses and certifications do you hold?  There are many different licenses available that qualify advisors to offer specific services.  Ask them what licenses they hold and to explain briefly what they can and cannot do.  Make sure they are licensed to sell securities in your state, and if they have any special certifications that may be important in working with you.

3.     Who is your ideal client?  You want to know if they have experience with and enjoy working with people just like you!

4.     Are you a fiduciary?  A fiduciary is required to act with undivided loyalty to the client, disclose exactly how they are compensated, and disclose any possible conflict of interest in working with you.  You want this in your advisor. 

5.     How do you make your money?  Are you commission-based, fee-based, or a fee-only financial advisor?  Make the advisor tell you exactly how they are paid!  You want to know how subjective an advisor is, and if they could be influenced by compensation they could earn from an investment, or limited in what types of products they can offer.

6.     What is included, and what is not included in your fees?  Do they have different fees for different services, and what are those fees?

7.     Will you work with me personally, or will you pass me off to someone else in your firm?   If it is very important to you to work with this advisor only, you want to know this up front.

8.     Who will take care of me if something happens to you?  If this advisor gets run over by a bus tomorrow, who will take care of your investments?

9.     Where do you hold your securities?  Who is the custodian for your investments?  Have your advisor explain the role of a custodian to you.  Very important – hint, hint, Bernie Madoff!

10. How do you communicate with your clients, and how often?  How often will you receive statements on your investment?  How often does the advisor recommend you meet with them - quarterly, yearly, or more?  Does the financial advisor have other means of communicating with you on a regular basis - email, newsletters, and conference calls?  Tell the advisor what you expect to receive.

11.   Do you receive referral fees from attorneys, accountants, insurance agents, mortgage brokers, or any other 3rd party professional if you refer me as a client?  If they do, this is a big red flag.  Maybe the accountant is a good fit for you, or maybe they are referring you to them to make the referral fee. 

12.   Do you receive any incentives (financial or non-financial) for recommending specific investment products?  If they do receive incentives, be sure the product is right for you, and not just for the financial advisor earning a vacation or some other benefit to them.

13.   Finally, and most important, do you feel comfortable with this financial advisor?  Do you think you can trust them?  Do they talk down to you?  Can you feel secure trusting your financial future to this financial advisor?

There are no stupid questions.  There are many details and there is no way you should be expected to know all the answers.  Let me relate this to my previous flying experience.  Even though you’ve flown across the country on an airplane, you probably didn’t know how much fuel was required for the plane to make the trip.  This is an important detail for you to reach your destination but not one you need to know personally.  However, your pilot should be happy to answer this question for you and more, if you wanted to know! 

Also remember…

If you have questions and would like to learn a little more about me please visit my website www.taraenolan.com.

Cheers,

Tara J

www.taraenolan.com