Tag: financial decisions

Why Women Are Natural Long-Term Investors

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Many of us have heard the expression, “It’s a marathon, not a sprint,” when faced with adjusting our attitudes to meet a long-term challenge. We at The Humphreys Group have been thinking how these words also apply to individuals and couples who aim to develop winning, long-term financial plans, and to female investors in particular.

Consider the notable lesson learned from participants in the 2018 Boston Marathon, where more women literally “went the distance” than men and gained the attention of multiple observers for doing so. Female participants — in one of the most grueling and well-known 26.2 mile races in the United States — lasted longer and finished in greater numbers when bad weather led to increasingly challenging course conditions; just 3.8 percent of women dropped from the race, compared to 5 percent of male runners.

The stamina of female marathoners did not go unnoticed. Shortly after the race, The New York Times ran an opinion piece by Lindsey Crouse, a runner and NYT senior staff editor, who asserted the idea (and added related links) that women have the capacity to withstand both physical challenges and mental stresses for long periods of time — in some cases much longer than men.

In an article for Business Insider several months later, Shana Lebowitz explored the theory that women may be more driven to complete a race as their end goal, whereas men tend to want to win a race above all else. Drawing a connection between women’s racing mindset and other areas where women exhibit an attitude that relies on mental staying power, she noted: “And the implications of this gender difference go beyond marathons, or athletic prowess.”

Backing up Lebowitz’s observation are those who’ve examined the possible relationship between gender and financial investing traits. Some writers have noted differences between women and men when it comes to money-related decisions and provide evidence that women investors exhibit marathon-like behaviors when it comes to investing: they make steady choices that will result in bigger long-term financial gains and stability, and react to setbacks with less stress and emotion that men.

Others assert that the concerns some women voice about their supposed lack of investing abilities are not strongly supported. MarketWatch emphasizes that, despite professing lower levels of confidence in their investing abilities and exhibiting more risk-averse tendencies when it comes to investing, women generally possess the characteristics of solid long-term investors.

The 2020 Boston Marathon is still months away. We can’t predict April’s weather conditions, but everyone who persists toward that finish line is a winner in our book. In the spirit of those who are preparing to travel a lengthy course — including a financial one — we encourage you to contact The Humphreys Group to see how we can help you stay on track and go the distance with your investment strategy.

To Bring Your Financial Goals to Life, Get Strategic

Published in: Blog |

Our last blog focused on suggesting that clients examine whether their priorities and goals need a reset at this point of the year. This can be challenging and emotional work, but when it comes to setting and achieving goals, the accomplished marathoner Juma Ikangaa says it best: “The will to win means nothing without the will to prepare.”

We at The Humphreys Group believe in preparation; we provide clients with specific steps for reaching their goals and gaining a clearer understanding of how their financial strategy can help them do so:

  • Provide a brief description of/reason for each goal. Some suggestions include: “increase current financial security,” “build retirement savings,” “strengthen family ties,” “bolster emergency funds” “pay off debt,” “afford travel,” “fund education/personal development,” etc.
  • Assess how much time, energy and any other additional resources (such as education/training) are required to reach each goal.
  • Estimate the amount of financial earnings, savings and/or investment required to achieve each goal. Begin with a “guesstimate.” We advise that these numbers can always be refined as clients gain more information and work with their advisor to understand what it will take financially to meet their goals.
  • Assign a priority status of “A,” “B” or “C” to each goal and determine the length of time you want to commit to reaching each goal. Having a sense of how important the goal is and how long it may take to achieve can help prevent feeling overwhelmed or under pressure to reach each goal. Suggested timeline categories include: Immediate Goals and Priorities; Short-Term to Mid-Term Goals and Priorities (1 to 5 Years); and Long-Term Goals and Priorities (5 Years or Longer)
  • Consider that priorities may shift. Remember, it’s okay to press “reset” from time to time!

At The Humphreys Group, we believe that priorities and financial goals can give shape to actions, and help provide long-term calm and security in our clients’ lives. We help clients prepare for success by reviewing what meeting their goals will cost in terms of their time, attention, energy and money. Contact us today to learn how you can give life to your goals with a well-prepared financial strategy.

Beating the “Dog Days of Summer”: Do Your Priorities and Goals Need a Reset?

Published in: Blog |

We’ve reached the “dog days of summer” — the time of year when ancient Greeks observed the bright Dog Star in the skies above them, and worried that uncertain times might soon follow its appearance. The constellations have shifted slightly over millennia but, by the time August arrives, many of us are still concerned about what the coming months will bring to our lives. At The Humphreys Group, we think now is the perfect time to decide whether our priorities and goals need a reset; doing so can ensure we move forward through the remaining year with renewed purpose and focus.

Here’s a quick summary of how we help clients determine if they need to rethink their priorities and goals and reset their course for the months ahead:

Priorities

  • Career and family top many people’s lists, but we also recommend a closer analysis of other life components including: health and fitness; financial well-being; leisure opportunities; creativity and educational enrichment; self-care and community ties.
  • We ask clients to review the time and energy they spend on these aspects of their lives and how satisfied they are in doing so.
  • To support clients as they clarify their priorities, we encourage them to establish the areas of their lives where they want to spend as much or more time.

Goals

  • Once clients gain a clearer sense of where their life priorities lie, and whether they want to make adjustments to those priorities, we guide them toward attainable goals.
  • We refer to a variety of tips and strategies that begin with developing “big picture, long-term goals” (such as a five-year plan), then strive to make those goals attainable on a yearly and monthly basis.
  • We explore whether the motivation for achieving their goals is intrinsic (sparked by personal drive or dreams of satisfaction), extrinsic (expectations outside of ourselves influenced by societal, professional or familial reward) or a combination of both.
  • In each instance, we acknowledge that we are doing challenging, sometimes emotional work. We embrace both the emotional and rational aspects of setting priorities and goals as we thoroughly discuss, analyze and make projections about how clarifying priorities and attaining goals may affect each client’s future.

The world has come a long way since the star-filled nights of ancient Greece, but we can continue to take time to reflect on what lies ahead for us. We support individuals’ modern-day efforts to examine their priorities and goals, and we possess the knowledge and experience to help our clients reset them in positive and proactive ways.

Contact The Humphreys Group today for more information about the strategies we use.

How to Cope with the Emotional Impact of an Inheritance

Published in: Blog |

Many of us would like to believe otherwise, but our experience and research at The Humphreys Group shows that a person’s feelings and attitudes about money can affect their approach to financial planning. We’ve also seen how emotions may exert an even stronger influence on those who’ve received an inheritance; in response, we offer our clients several strategies to help them navigate the choices and decisions that arise from inheriting a financial gift.

  • Take time – time to grieve, to remember and to appreciate the person from whom you’ve received your inheritance. Allow yourself to adjust to new life circumstances that the person’s passing, and their gift, may cause. Don’t rush toward decisions without processing your emotions.
  • Begin to assess your financial situation when you feel emotionally ready. Review your debts, your dreams and your goals. Consider how your inheritance may help you address these.
  • Consult with trusted family members about your possible next steps. Will you use your inheritance to pay your debts down (or off)? Will you set aside funds for a child or grandchild’s education? Will you put money toward retirement? Will you direct monies toward a charity? Will you use some of the funds to travel? Explore some combination of these or other potential courses of action.
  • Work with a financial advisor to develop a long-term financial plan for making the most of your inheritance. You should also meet with your accountant and attorney to fully understand the ramifications — for instance, taxes and legal issues — related to your inheritance.
  • Resolve to review your plan, with both family members and professional advisors, on a regular basis. Checking in with these parties from time to time will help ensure that you are thoughtfully and clearly making the most of the empowering gift that an inheritance can be.

At The Humphreys Group, we realize money is an emotional issue for many people. We also know that receiving an inheritance while dealing with the passing of a loved one can heighten the emotionally-charged stakes of managing individual and/or household finances. We have the knowledge and expertise to offer assurances and strategies on how to approach financial planning in light of an inheritance. Contact our advisors today to begin the conversation.

Your Estate Plan and Your Children: What to Say and When

Published in: Blog |

We know conversations about finances and estate planning have great potential to be an “elephant in the room” for many of us, especially when it comes to conversations between aging adults and their grown children. Data from a TIAA study in 2017 showed between 75%-85% of parents and children consider financial discussions very important, but only 11% of parents and 37% of adult children were likely to initiate talk about money and estate matters.

And when families do talk about money matters? Only 9% of parents felt their conversation was very detailed, perhaps due to another statistic: 90% of parents and 70% of children said conversations about their parents’ finances and future plans happened spontaneously. However, those parents and grown children who interacted regularly and purposefully with each other to talk about their plans and wishes reported overall high levels of satisfaction about doing so.

We recommend three steps you can take to address the potential “elephant in the room”:

Step 1: Reflect

Resolve to begin detailed conversations with your children to address your financial well-being and estate plan. You should also consider what issues related to money may be challenging for you to express, as well as what kinds of responses may be difficult to handle.

It takes courage to deal with the variety of approaches, attitudes and expectations each person holds about money. Before you engage with your children, spend time thinking about your approach to and experiences with savings, spending and investing; understand how that may influence the tone and direction of your conversations.

Step 2: Prepare

Plan to talk to your children when there is ample time to calmly discuss your estate plan and any issues that may arise. Practice what you want to share, by writing it down and rehearsing. Also, be willing to ask your children even the most seemingly obvious finance-related questions. We’ve developed this list of potential questions; begin with easier topics and progress to more complex ones:

  • What have you learned from my/our example of handling finances?
  • Do you know what I/we want to do in retirement?
  • Are you interested in knowing what’s in my/our will?
  • Do you know what I/we plan to do with our property?
  • Do you know about our philanthropic goals and what we support?
  • Do you know where to find pertinent information for addressing any requirements of you?
  • Are you interested in meeting my/our financial advisor to learn more about our plans?
  • Are you aware of the things I/we pay for, today?
  • Would you be able to take those costs on if I/we weren’t able to support them anymore?
  • Do you think you’ll need my/our financial help down the road, whether it’s for smaller monthly expenses, or larger ones such as a down payment?
  • Would it matter to you if I/we used our savings for travel and leisure instead of helping with your expenses?
  • If I/we needed help paying for long-term care down the road, would you consider helping cover medical bills?

Step 3: Schedule

Agree on the time, financial topic, location and length of your discussion to help all parties remain relaxed and comfortable throughout the conversation. As a family, commit to continuing your conversations about money and estate planning — for instance, you could develop a schedule for ongoing dialogue.

During scheduled conversations with your children, revisit your financial situation and, if necessary, bring up “next topics” related to your estate plan and investments. You may also consider working with a financial advisor who can assist with keeping your conversations about finances focused and productive.

Because many of us only talk about money when we have to, money conversations usually happen in the heat of the moment or when there is pressure to make a decision. Knowing when, where and with whom you will be talking about finances, and being intentional about the conversation topic and scope, can significantly improve both short- and long-term outcomes when it comes to the parent/child dynamic.

Remember, even the smallest of elephants grows larger with time — and trying to ignore it does not help move it out of the room. Contact The Humphreys Group for further advice on how you can best talk with your children about money matters.

Estate Planning Is Essential — But Even More So for Women

Published in: Blog |

When it comes to women and estate planning, we at The Humphreys Group agree with the prevailing wisdom among financial experts: Women should be advised and empowered to develop estate plans that reflect their unique life experiences. In many cases, this means the focus of a woman’s estate plan will differ from a man’s estate plan. Let’s discuss why:

Women today lead dynamic and complex work lives. More than ever, and in all aspects of society, working women are forging ahead with their professional careers. However, many women also continue to step out of the paid workforce for periods of time — most often to care for children or other family members. Such variances in employment can potentially impact a woman’s financial well-being in ways that may include lower earnings, less money in savings and fewer profitable investments over a lifetime. This means estate planning plays an important role in ensuring every woman’s long-term economic security.

Women often live longer than their partners. It’s meaningful to keep in mind that most women who lose a partner usually take over their own financial destinies, and also ultimately determine how they will allocate their finances to other family members, taxes, charities and additional sources. Should such a situation occur, it’s helpful for a woman to be prepared and to know what to expect from her estate planning efforts.

What does estate planning that incorporates a woman’s point of view look like? We encourage you to explore the articles we’ve linked to in this blog post, in addition to considering a few takeaways:

  • Develop a will, a living will and a durable power of attorney for health care. These core documents are a good place to begin the estate planning journey. Women should make sure any estate planning-related paperwork reflects how they specifically wish to designate and delegate their personal and financial assets and, should the need arise, health care on their behalf.
  • Operate with a sense of security, confidence and planning. Advisors recommend that one should secure any information related to their estate plan for safekeeping and note that information about accounts and documents should be shared with a limited number of trusted individuals, among them a financial advisor. Further advice: Hold conversations with relevant family members about your estate plan long before the plan is enacted. Topics to address might include business succession plans, inheritances or proposed charitable giving.

We believe women are best served when they are knowledgeable about their family finances as well as in charge of their individual financial responsibilities and strategies. Contact The Humphreys Group to learn more about how estate planning can benefit you.

Mid-Year Wellness: The Credit vs. Debit Debate (Part II)

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It’s official: 2019 is nearly halfway over, which means that now is the time to pause and take stock of your total wellness. This includes your spending habits and where you stand in your progress toward your year-end goals. What methods do you actually use to make purchases? Do you favor debit cards over credit cards? Which method is “safer”?

Our Financial Planning Associate, Hallie Kraus, is tackling these questions in a new, two-part blog series. If you missed Part I of the series, click here to get up-to-speed. In Part II, Hallie explores the benefits of using a debit card to make purchases and is sharing some resources you can use to make smart spending decisions.

Now that you know the potential benefits — and risks — that come with using a credit card to make purchases, it’s time to take a look at the other side of the payment spectrum: the debit card.

When Is It Best to Use a Debit Card vs. a Credit Card?

When you want to manage your spending or avoid debt. This is, by far, the best reason to use a debit card, and it’s not insignificant. If you’re trying to reel in your expenses, or if you’re the kind of person who simply likes to have more structure to keep your expenses in line, debit cards are the way to go, simply because you’re only paying with money you already have.

Unfortunately, these days, card “skimming” has become more prevalent, in which fraudsters use small devices to steal card information in an otherwise legitimate transaction. Keep in mind that most experts discourage the use of debit cards at gas station pumps or independent ATMs, where skimmers are most likely to target.

You want to minimize fees — for you, as the consumer, and for the merchant. Using a debit card means you never risk the possibility of incurring interest, late fees or annual fees — all of which are associated with most credit cards.

Merchants, on the other hand, pay a processing fee to card issuers in order to accept both credit and debit cards. The processing fee for credit is typically a percentage of the customer’s purchase, while the processing fee for debit is lower, and often a flat fee. So, it’s actually cheaper for merchants when you, as their customer, elect to have a debit transaction — something to keep in mind if you want to do what you can to help the profit margins of your favorite businesses!

The Bottom Line

Regardless of whether you use a debit or credit card to make purchases, it’s important to keep the following tips in mind:

Monitor your transactions regularly. The sooner you report a fraudulent transaction, the better. Make it part of your routine to check your activity on a regular basis and report anything suspicious to your bank as soon as possible.

Only you know your habits and what’s best for you. Be honest with yourself about your financial strengths and weaknesses, and use that to determine which card make the most sense for your lifestyle and spending habits.

Check your credit report on at least an annual basis. You can view and download your credit report from each of the three bureaus for free once per year by visiting www.annualcreditreport.com. This is yet another effective way to monitor for fraudulent activity and familiarize yourself with what makes your credit tick.

There are plenty of resources available to help you practice smart, diligent spending. When it comes to monitoring fraud, one of the best guidelines is the Federal Trade Commission (FTC) website, which also offers plenty of advice regarding lost or stolen credit and debit cards. If you would like to learn more about the pros and cons between debit and credit cards, check out this article by AARP and this piece by The Simple Dollar, both of which provide comprehensive and unbiased overviews of both methods.

And, as always, The Humphreys Group is here to help answer all of your personal financial planning questions. If you would like to learn more about saving and spending best practices, contact our team.

Mid-Year Wellness: The Credit vs. Debit Debate (Part I)

Published in: Blog |

Now that we have officially reached the halfway point of 2019, there is no better time to stop for a “breather” and take stock of your total wellness — and that includes your spending habits and how they factor into your progress toward your year-end goals. This brings us to a few questions we receive quite often here at The Humphreys Group: What should you actually use to make purchases? Are debit cards the “safer” method, or do credit cards rein supreme?

Our Financial Planning Associate, Hallie Kraus, is shedding light on the debate in a new, two-part blog series. Scroll down to read Part I, and then catch Part II here.

“Credit or debit?” We’re asked this question all the time at the register – but which payment method is actually best to use? And what’s the true difference between the two?

Let’s start with a basic recap: Debit cards are directly connected to your checking account. When you make a purchase, funds are withdrawn from that account immediately and transferred to the merchant.

Credit cards, on the other hand, are connected to a line of credit from your bank. When you make a purchase, you’re borrowing funds from your bank to pay the merchant. If you don’t pay off everything you owe each month, your bank will charge you (usually very high) interest on the remaining balance.

When Is It Best to Use a Credit Card vs. a Debit Card?

When you want to build your credit. If you’re planning on buying a home or car, lenders first want to see that you have a good credit history. And when you use a credit card, your balance and history of payments is reported to a credit bureau each month, creating a record — and, essentially, a narrative — of your financial habits and trustworthiness to lenders. Using a debit card is not reported to credit bureaus and therefore doesn’t create any sort of history.

Of course, simply using your credit card alone doesn’t help your credit; what matters is if you use it responsibly. If improving your credit is truly a priority for you, make sure to keep your credit card balance below 30% of your limit (for example, if you have a $10,000 limit, keep the balance below $3,000). You’ll also want to pay off the balance in full, and most importantly, pay your credit card bill on time every month. Not doing any of the above will negatively impact your score and thus be counterproductive.

When you want to minimize your fraud liability. This is perhaps the most compelling reason to use a credit card. Firstly, when a fraudster uses your credit card without permission, they’re technically stealing money from the bank that issued you the card — not from you personally. But what you may not know is that credit cards also offer more robust fraud protection.

Thanks to the Fair Credit Billing Act (FCBA), if you report unauthorized charges to your card issuer within 60 days, your liability for fraudulent transactions is limited to $50. Even better, the vast majority of credit card companies (Visa, MasterCard, American Express and Discover) have a zero-liability fraud policy. Essentially, assuming you report credit card fraud promptly, you will probably never pay for unauthorized transactions.

In contrast, when a fraudster uses your debit card, they have immediately stolen money from your bank account. And although debit cards have their own set of protections through the Electronic Funds Transfer Act (EFTA), they are much less robust. According to the EFTA:

  • If you report a fraudulent debit card transaction within two business days, your liability is limited to $50.
  • If you wait longer than two days to report the fraudulent transaction, you can be liable for up to $500.
  • If you wait longer than 60 days to report, you could be held liable for the entire fraudulent transaction. So, depending on how much the fraudster has used your debit card, and how diligently you check your transaction history, your damages could be unlimited.

But there is one workaround: If you strongly prefer using a debit card, but want to achieve the same level of fraud protection as a credit card, select “credit” when you run the debit card. This requires the bank to follow credit card rules: Rather than being withdrawn from your bank account in real time, the purchase will go through the credit card network, and funds will be withdrawn within a few days. But the key distinction is that the transaction will be covered by the card company’s zero-liability policy, thereby exempting you of responsibility for unauthorized transactions.

When you want to earn rewards and have a good handle on your spending. Banks love to offer credit cards with cash back, points or other rewards, and it’s easy to see why. When rewards are connected to how often we use a credit card, we as consumers are incentivized to use them more often. The banks are essentially betting that, in our quest for more rewards, we will charge more to the card than we can pay off in one month, so they can charge us interest on the remaining balance.

That said, when used responsibly, rewards credit cards can save consumers a decent amount of money. If you want to use a credit card for this reason, make sure you never use the card for something you can’t afford in cash, and of course, pay off the balance in full every month. It’s also worth periodically doing the math to double check that your rewards exceed any annual fees associated with the card. If you’re paying the bank interest every month, or have sky-high annual fees, the credit card is not worth it, regardless of its rewards or other benefits.

Click here to read the second installment of Hallie’s two-part series, in which she discusses the benefits of using debit cards over credit cards and shares some helpful resources you can use to practice smart spending all-year-round.

Give Yourself a Mid-Year Wellness Checkup

Published in: Blog |

If you haven’t realized it yet, we at The Humphreys Group tend to view our glasses half full rather than half empty. So, as we arrive to the midpoint of another year, we want to celebrate where our clients are on their journeys toward growth and accomplishment, and to examine how they are using various resiliencies to fortify their busy lives. We accomplish this through a quick “wellness checkup.”

First, let’s review what we mean when we state that resiliency can help us meet our goals. We know Emotional resiliency is the ability to process and work through challenges that test one’s feelings, but we’ve also discussed other aspects of our lives where we can work to be stronger:

  • Physical: Take preventive steps to ensure you are resting well and breathing properly. Give yourself time to recover from illnesses and address other physical setbacks.
  • Spiritual: Stay true to the values, behaviors and beliefs that guide your efforts to live your most authentic life, professionally and personally.
  • Social: Spend time — in person or via other forms of interaction and communication — developing connections at home, at work and among your community; when challenges come your way, you’ll know who to call on for support.
  • Vocational: Set long-term goals for what you’d like to accomplish professionally, and take small, measurable steps toward them via your networks and relationships. Remember that not all progress has to come in dramatic leaps and bounds.
  • Financial: Work with an advisor to establish a long-term financial plan that grows and changes as your work and life evolve over time.

As part of your mid-year wellness checkup, we offer these additional questions to help you further assess your plan for bolstering resiliencies:

  • Remember that most journeys do not travel in a straight line — can you cut yourself slack so that you can continue to move forward?
  • How can you maintain a sense of optimism as you work to accomplish your goals in each area of your personal wellness?
  • Are you taking charge of your personal and professional stories so that you can speak and act in ways that reflect what you’ve learned and how you’ve grown?
  • Will you share what you’ve learned to demonstrate your resilience? Can your knowledge resonate with and encourage other people in your personal and professional circles on their journeys?

The calendar reminds us it’s time for a mid-year review of our goals and strategies. Let us be among the first to tell you we’re proud of what you’ve accomplished so far, no matter the size of your achievement or the scope of your effort. While our expertise lies in honing your financial resilience, we know you are working hard to make the most of every aspect of your life.

As always, contact The Humphreys Group to learn more about how you can improve your resiliencies and for help with developing a solid, long-term financial plan.

Why You Need a Money Mission Statement

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“Fortune favors the brave,” an ancient proverb reminds us. The attitude that accompanies these words influences many of the conversations we have with our clients about their long-term plans.

When we begin working with clients on their financial goals and strategies, we acknowledge that, for many women, discussing money matters with loved ones can often be a tense and stressful experience. As we’ve highlighted in previous blogs, we realize a variety of factors can affect how we talk (or don’t talk) about money — so we first take a step back and look at the “big picture.” We ask clients to examine what matters most to them in their professional and personal lives when it comes to:

  • Accomplishments, abilities and goals
  • Responsibilities
  • Priorities
  • Challenges
  • Values
  • Dreams

But we don’t stop there. As our advisors continue to craft savings and investment approaches that consider these factors, we also encourage our clients to develop a money mission statement. A client’s mission statement can reflect their values and priorities, and help them clarify and commit to their specific goals. Additionally, a mission statement may improve how they communicate with others about what they value in their life and what they want to achieve in the future.

When we ask women to answer the following questions, we remind them that possessing a “fortune” can mean much more than accumulating money:

  • “What do I want to accomplish financially (get out of debt, own a home, travel, pursue more education, etc.)?”
  • “Why do I want to accomplish this (to be independent, to create a support system, to remain engaged professionally, etc.)?”
  • “What motivates me and inspires me, professionally and personally (my values, my family, my co-workers, my community, etc.)?”
  • “What else would I like to accomplish or achieve in my life (forge a new career path, create a financial legacy, establish a foundation, etc.)?”

A mission statement not only can help you clarify the next steps and end goals of your financial planning journey, but it can also help reduce the stress and strain of difficult conversations with those closest to you about money matters.

We realize that delving into our dreams and pursuing our goals — and sharing our dreams and goals with those closest to us — can be nerve-wracking. But as women continue to gain independence and power, we know they are brave enough to take important, meaningful steps toward defining their long-term goals and gaining financial security.

Contact The Humphreys Group for advice on how a mission statement can help you move forward to your own, unique fortune.