Mainline Business Trust Newsletter – 3rd Qtr 2009
Our Members:
| Ron Bridge Travel Agent 610-296-9844 |
Michael Brown CPA Accountant 610-644-6600 |
| Ken Dooley, President & CEO Chester County Life 484-356-7865 |
Joseph Davison Esq. Attorney 610-212-4348 |
| Roy J. Innella Financial Advisor/Coach 610-695-8748 |
Carolyn Luskin Realtor® 610-585-1301 |
Susan Shute |
|
This issues agenda:
• Nine Common Mistakes Planning Your Financial Future
• New Regulations to Protect Homebuyers
• Trying to Decide When to Retire? Make an Informed Decision
• Real Estate Tips
• Travel Advice
• Legal Advice when you are in an Accident
• What percent of your Targeted Market is Aware of You
This publication is the major communication vehicle for the Main Line Business Trust (MLBT), an exclusive networking and social association for professionals serving individuals, small businesses and corporations. MLBT is comprised of key disciplines (see left hand panel) that are essential to the success of entrepreneurs and/or businesses. We also mentor to motivated individuals who are interested in pursuing a career in one of the disciplines in our group. This association is constantly seeking to add additional disciplines that will bring additional expertise into the organization.
The Nine Most Common Mistakes People Make in Planning Their Financial Future.
Mistake one — Failure to launch. Most people spend more time planning their vacation than they do planning their financial future. To the extent most people have done any planning, it’s typically been on a piecemeal basis, and usually they receive different advice from different people at different times, with none of them referring to what the others may have done. It’s recommended one person act as coordinator and catalyst.
Mistake two — No systematic investment plan. One should try to save and invest 10 percent or more of one’s gross income monthly. The older people get, the closer they are to retirement, the greater the “more” should be. Most people are about three months away from bankruptcy. After setting aside three to six months’ income in liquid assets or cash value as a cash cushion to fall back on, a fixed amount should be invested every month to take advantage of dollar cost averaging.
Mistake three — Insufficient diversification. “You shouldn’t put all your eggs in one basket.” It’s generally considered wise to diversify investments and not to be dependent, for example, on one company’s stock, etc.
Mistake four — Inadequate disability insurance. My clients’ most valuable asset is earning power. Group disability insurance is seldom adequate, so one should acquire individual disability insurance, which is “portable,” and, if personally owned, provides income tax free benefits under current tax laws.
Mistake five — Inadequate life insurance. As a rule of thumb, for each $100,000 of income earned about $1,000,000 of income-producing capital is needed to produce $60,000 annually for a family. For most people, this means life insurance, since they don’t have other large amounts of income-producing assets. TIME (Taxes, Inflation, Mistakes, and Emergencies) makes the amount of capital needed much larger than most people would imagine. My clients are not be overly dependent on group term life insurance. It is costly, inflexible, not portable and probably won’t be available when it’s most likely to be needed — after age 65.
Mistake six — No estate plan. Most people do not have a will or trust, or what they do have is out of date. It is important to note it’s not how much is left to heirs, but how much is left for heirs. Estate taxes and related costs may ultimately take forty to fifty percent of an estate unless arrangements have been made to use life insurance proceeds to pay them.
Mistake seven — No business continuation plan. If my client owns a business, whether as a sole proprietor, a partner, or a shareholder in a closely held corporation, a business continuation plan is be in place to off-set any complications that may occur in the event you retire, die, or become disabled.
Mistake eight — Not utilizing selective compensation plans. For business owners and key executives, there are many selective compensation plans that can be tailored to provide supplemental pension and family protection benefits.
Mistake nine — Depending too much on employer sponsored plans. The only real security is that which we provide for ourselves. To count on lifetime employment with one company is foolhardy, regardless of the company’s stability.
For more information on any and all of the above call me at 610-695-8748
or send me an email
If you are interested in looking at your portfolio to see if you are getting the returns you deserve based on the amount of risk you are taking you should call my office for a Free Market Investment Analysis.
Roy Innella
Investor Coach
610-695-8748 phone
roy@yourwealthadvocate.com
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I WAS RECENTLY IN A CAR ACCIDENT (SURVIVED THANKFULLY UNSCATHED) THAT
REMINDED ME TO REMIND OTHERS OF THIS CHECKLIST THAT I HAVE GIVEN TO MY CLIENTS
I N THE PAST. CUT THIS CHECKLIST OUT AND PLACE A COPY OF IT IN THE GLOVEBOX
OF EACH OF YOUR AUTOMOBILES.
1. STOP YOUR VEHICLE No matter what type of vehicle you are operating you
are required by law to stop your vehicle after an accident or collision, no
matter how minor the damage and even if you feel that no damage has been done
at all. If you fail to do so, you may be prosecuted for a criminal offense.
Accordingly, upon becoming involved in a collision, stop as close to the site
as is safely possible while ensuring not to block traffic or put you, the
occupants of your vehicle, or others in harm’s way.
2. ASSIST PEOPLE IN IMMEDIATE HARM If it is unlikely that rescue personnel
will soon arrive on the scene, if an automobile is on fire, leaking gasoline,
or at risk of being hit by oncoming traffic, and ONLY IF YOU BELIEVE IT IS
SAFE TO REASONABLY DO SO, provide help to remove any occupants from any immediate
danger.
3. CHECK FOR INJURIES Check to see if anyone has been injured and if so,
immediately call 911. You can also use a vehicle’s emergency response
button if any of the involved vehicles or others that are stopped is so equipped.
Inquire if anyone present is a medically trained professional than can render
assistance or first aid. If so defer to their judgment and direction. If not,
do NOT move an injured person. Doing so can aggravate or lead to additional
or further injuries. Comfort any injured people to the best of your abilities
and wait for emergency responders to arrive.
4. ENSURE SAFETY Make sure that all children or anyone requiring special
assistance at the scene are tended to and protected. An accident can be traumatic
enough on mature adults. For children, especially if a family member or friend
may be injured, the situation can seem catastrophic even if it is not. Accordingly,
make sure that an adult is available to keep children and any others requiring
assistance out of harm’s way and consoled and calmed.
5. EXCHANGE INSURANCE INFORMATION & CALL POLICE You are not required
by law to contact police if there are no injuries or substantial property
damage and both parties are in agreement that it is unnecessary. However,
be forewarned that all injuries or vehicle damage are not always immediately
apparent. Accordingly, if an accident is caused by another driver, it is almost
always advisable to call the police unless absolutely no damage is done and
you are certain about that. The responding law enforcement agency, whether
it is a local police department, the Highway patrol, or other agency, is trained
to investigate accident scenes. Accordingly, it is very important that you
are thorough in your explanation to the officer and ensure that you provide
all details and observations that you remember.
6. GATHER INFORMATION Get as much information as you can while at the scene.
Write down all of the following information that you can obtain: The other
driver’s information including: full name, address, phone number, cell
phone number, work number, place of employment, date of birth, driver’s
license number, license plate number, and auto insurance information. Witness
information including: full name, address, phone number, cell phone number,
work number, place of employment. Investigating officers full name, agency,
badge number. Description of the vehicles involved, where they are in relation
to the accident site, nearby landmarks for reference, approximations of speed,
direction and other observations, diagrams or drawings of the scene. If you
have a camera available (even a cell phone camera) take pictures of the scene
and any physical damage caused by the accident
7. SEEK MEDICAL ATTENTION Oftentimes a person involved in an accident doesn't
even know that they have been hurt initially. You may be in shock or just
merely be overwhelmed by the situation. Regardless, if you feel that you may
be injured or even if you don’t know, get checked out. If that means
going in the ambulance, do so even if you don’t know whether or not
you need to. If it even means going to the emergency room in the hours or
days following, do that. It’s much better to go to the doctor and find
out nothing is working that not and not know that something is.
8. CALL YOUR INSURANCE COMPANY OR AGENT Your Insurance policy will require
that you notify your insurance agent within a reasonable amount of time after
the accident takes place.
There is one caveat to this: If there is absolutely no damage or injury, hesitate
before you call your insurance company.
Even if an insurance company does not pay out on an accident, they keep records
of all such information. Also, while the information that they keep to determine
rates is often proprietary or, in other words, a company secret, accidents
can cause your rates to go up whether they are your fault or not. Accordingly,
if your insurance company does not need to be notified (because they will
not be compensating you, anyone else, or providing any service), then do not
notify them.
On the other hand, should you fail to notify them and ultimately need to make
a claim; an insurance company can deny an otherwise valid claim if there has
been an unreasonable delay in reporting the same.
Accordingly, if you are not sure, it is better to speak to an attorney before
reporting an accident.
9. CONTACT AN ATTORNEY The general rule of thumb is: The more serious the
accident, the more important it is to contact an attorney and the sooner you
need to do so. God forbid that a loved one is seriously injured or killed
in an accident. However, if such a catastrophic event takes place, an experienced
claimant’s attorney, in certain situations, will employ experts as soon
as minutes after an accident if promptly notified to undertake an independent
and exhaustive investigation of the scene. This could be a firm employee,
a private investigator, or even an accident re-constructionist, depending
on the circumstances. However, the more serious the injuries, the more imperative
it is to ensure that all details and evidence of the accident are properly
recorded and preserved.
JOSEPH R. DAVISON, P.C.
JRDAVISONLAW@VERIZON.NET
610-212-4348
INITIAL CONSULTATION IS COMPLIMENTARY
Joseph R. Davison, P.C.
Jrdavisonlaw@verizon.net
610-212-4348
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New Regulations passed by Congress to protect Homebuyers
If you are applying for a home loan to purchase a primary or secondary home – or planning to refinance – you should be aware of a new set of federal consumer protection rules.
In 2008, The Home Ownership and Equity Protection Act (HOEPA) and the Housing
and Economic Recovery Act (HERA) were passed by Congress. These regulations
were written to provide:
1. A more transparent, level and fair regulation of the real estate industry.
2. To add additional steps to help prevent deceptive lending practices
3. To protect consumers by making them more informed in their home financing
choices.
In addition, Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC) in 2008 to reinforce appraiser independence, valuation protections and enhance the overall integrity of the home valuation process. HVCC became effective May 1, 2009.
HERA/HOEPA becomes effective July 20, 2009.
Key elements you need to know
1. The closing date may be impacted, even dictated by the new regulations. Historically, homebuyers and sellers would agree on a closing date, and then service providers, including lenders, would work as best they could toward meeting that date. Going forward, purchase contracts can still be written with a specific closing date in mind, but the regulations will prohibit “quickie closings” due to a seven-day waiting period after applicants are handed their early disclosures and a final truth-in-lending disclosure (TIL) is due three business days before closing. If there is an increase in the APR (annual percentage rate) by more than 1/8% between early and final disclosures, an amended TIL disclosure must be issued to the homebuyer, allow for 3 days mailing and another 3 business day waiting begins after receipt of the amended TIL by the borrower. Items that may change the TIL are change to the interest rate, change in loan amount or product, change of closing date, inaccurate fees quoted by the lender or any third party such as the Title Company, appraiser, attorney, etc. Many consumer complaints are based on receiving last minute fees and having no time to reconsider their loan choice. It is imperative that lenders and settlement agents provide homeowners with accurate estimates up front or risk delayed closings.
2. Most lenders collect upfront fees at time of loan application to cover the cost of appraisals, credit reports, etc. Under the new regulations, other than a minimal charge for checking the borrower’s credit report, the lender may not collect any up-front fees unless the application is taken in person and all early disclosure forms are provided to the borrower at that meeting. If the application is taken by phone, email, etc. the application fee may not be collected until 4 business days after the homebuyer has been issued his or her initial disclosures. Many lenders will not order the appraisal until the application fee is received thereby causing other potential delays in closing dates. Rush closings are going to be more and more difficult.
3. Homebuyers must be provided with a copy of his or her real estate appraisal a minimum of 3 business days before the scheduled closing. The timing of the loan closing will depend on a home buyer’s receipt of the appraisal in advance. However, if the homebuyer believes the 3-business-day required review period is not necessary for whatever reason, he or she has the right to waive that requirement.
The bottom line is borrowers, lenders, real estate agents, attorneys and settlement agents must know the new regulations and work closely together to ensure timely closings.
Susan Shute
Senior Mortgage Consultant
Lincoln Mortgage Company
(610) 832-0666 x226
sshute@linc-mort.com
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There are many, many travel destinations, but there are some that you may
not think about. The Antarctic is one of these, but is indeed a rare and unique
experience.
If the romantic notion of sailing to the end of the earth appeals to your adventurous spirit, consider a cruise to the Antarctic. It’s not a traditional cruise vacation, but a unique experience that will take you to the land of the South Pole, a pristine wilderness filled with savage beauty and unusual wildlife.
Only 30,000 people travel to Antarctica each year, and fewer than that actually set foot on the frozen continent. Some larger cruise ships don’t land on shore but sail close to it for memorable views of jagged peaks looming above ice fields, slow-moving glaciers and icebergs that glow deep blue. Penguins are a common sight, sometimes in colonies several hundred thousand strong. You’re also likely to see an amazing variety of whales, seals and sea birds, including albatrosses.
Some smaller ships can actually land on the continent, allowing passengers to step onto the ice, perhaps after a short ride in an inflatable Zodiac craft. This is a rare privilege, as only 100 passengers may be landed at any one place and time, in keeping with the rules of the International Association of Antarctic Tour Operators. The feeling of being one of relatively few humans to set foot on Antarctica is truly unforgettable.
Cruises to Antarctic Peninsula generally depart from the Argentinean port of Ushuaia, more than 600 miles away. Cruises to Eastern Antarctica depart from Australia, New Zealand and occasionally from South Africa. The Antarctic cruising season runs from November through March, when it is spring and summer in the southern hemisphere.
Ships that cruise the Antarctic are generally smaller than traditional ocean-going ships and are specially equipped to handle icy waters. The ships are comfortable and warm, but there’s little glitz. Experienced guides will be on board to give presentations and insights on Antarctica and its fascinating history.
On most days, air temperatures will be around the freezing point. Warm clothing that can be layered on and off is a must, as still and sunny days can feel quite warm. Be sure to pack a windproof, waterproof outer layer, as well as warm hats and gloves. You’ll also want to bring your camera, with even more film or memory cards and batteries than you think you’ll need for the trip of a lifetime.
For more information on cruises to Antarctica, talk with your travel professional.
Ron Bridge
TRAVEL LEADERS
(610) 296-9844
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Time is Running Out . . . for the Home Buyer Tax Credit
BEFORE YOU SKIP THIS SECTION, you might qualify for the first time home buyer
tax credit – even if you have owned a home in the past. Here are the
most frequently asked questions about the tax credit:
Q What is the amount of the new tax credit?
A The tax credit is equal to 10 percent of the home’s purchase price
up to $8,000.
Q Who qualifies for the credit?
A To qualify as a first-time homebuyer, the purchaser or his/her partner may
not have owned a residence during the three years prior to the purchase. You
must close (settle) on the home between January 1, 2009 and November 30, 2009
Q Who cannot take the credit?
A Purchasers with any of these circumstances may not take the credit:
• Currently own a home or have owned a home within the last 3 years.
• Your single income exceeds $95,000 or joint income exceeds $170,000.
• You stop using your home as your main home.
• You buy your house from a close relative (spouse, parent, grandparent,
child or grandchild).
Q What are the details of the new tax credit?
A The new tax incentive is an $8,000 refundable tax credit (or up to 10% of
the purchase price). This means that if your total tax liability in the given
year is less than $8,000 the IRS will send a refund for the balance.
Q Do I have to pay back the credit?
A No. If you occupy your home for three years, you will not have to pay back
the credit.
Q Is the value of the Tax Credit the same for everyone who qualifies?
A No. The maximum allowable credit for homebuyers is $8,000, however the exact
value for each qualified first-time homebuyer is determined by two factors:
the price of the home and the buyer’s income.
Q Whom do I contact if I have questions about the credit?
A Contact your tax preparer, the IRS (toll free at (800) 829-1040) or call
me at (610) 585-1301.
Carolyn Luskin, Realtor®
Keller Williams Main Line Realty
711 W. Lancaster Ave.
Bryn Mawr PA 19010
Office 610.520.0100
Direct 610.520.6538
Cell 610.585.1301
www.carolynluskin.com
carol@carolynluskin.com
Click here to see what's selling in your neighborhood
Carolyn Luskin, Realtor®
Keller Williams Main Line Realty
711 W. Lancaster Ave.
Bryn Mawr PA 19010
Office 610.520.0100 ext. 6611
Mobile 610.585.1301
www.carolynluskin.com
carol@carolynluskin.com
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Trying to decide when to retire? Make an informed decision
It’s never too early to start thinking about your retirement. When you
do, one of your first questions may be, “When’s the best time
to start receiving retirement benefits?”
There’s no one “best age” for everyone and, ultimately,
it is your choice. You should make an informed decision about when to apply
for benefits based on your individual and family circumstances.
With that in mind, Social Security has published a fact sheet to help you
make the decision that’s best for you. When To Start Receiving Retirement
Benefits is available online at http://www.socialsecurity.gov/pubs/10147.pdfhttp://www.socialsecurity.gov/pubs/10147.pdf
Things you should consider are your current cash needs, health, family longevity, whether you plan to work after you retire, future financial needs and obligations, and the amount of your benefit and other income, such as pensions and deductions from retirement funds. Do you have investments to draw from when you need extra money? Will it last as long as you expect to live?
Keep in mind that people are living longer than they used to. About one out
of every four 65-year-olds today will live past age 90, and one out of 10
will live past age 95. If you decide to retire early, at 62 or any time before
your full retirement age, you’ll get your benefits sooner — but
you’ll get a reduced benefit for the rest of your life. Your monthly
benefit will last as long as you do. So the reduction in monthly payment for
taking early retirement can add up to a big difference over the life of your
benefits.
Your decision can affect your spouse and family, too. If you die before your
spouse and dependent children, they may be eligible for survivors benefits.
But if you took early retirement, their payments would be based on your reduced
benefit amount
.
When you reach your full retirement age, you can work and earn as much as
you want and still receive your full Social Security benefit payment. If you
are younger than full retirement age and if your earnings exceed certain dollar
amounts, some of your benefit payments during the year will be withheld.
On the other hand, if you put off retirement benefits until after your full
retirement age, your amount will increase. In fact, your benefit amount will
continue to go up until you reach age 70 or start receiving benefits, whichever
comes first.
And when thinking about Social Security, don’t forget Medicare. You
should sign up for Medicare three months before reaching age 65, no matter
when your full retirement age is—even if you decide to delay retirement
benefits. Otherwise, your Medicare medical insurance, as well as prescription
drug coverage, could be delayed, and you could be charged higher premiums.
Michael W. Brown, CPA, MBA
(610) 644-6600
top
Awareness Level?
By Ken Dooley, President & CEO, Chester County Life
What percent of your defined or targeted market is aware of your company and its products / services?
• less than1%
• 2%, 10%, 20%
• 50%, 80% or 95%
Growth in sales is a function of many variables; however, a core factor is awareness level.
What serious programs or efforts do you have in place to establish a meaningful level of awareness?
• Advertising: magazine, newspaper, TV, radio, billboard, displays,
etc.
• Direct Mail
• Telemarketing
• Internet: website, email, etc.
• Personal Selling
• PR
• Networking
• Trade Shows
• Events
In selecting your mix, how much consideration do you give to coverage, readership (viewership) and shelf life (impressions)?
• Coverage – does your mix cover 25%, 50%, 75% or 95% of the
market?
• Readership – what percent of your mix is received, opened or
viewed, and then comprehended?
• Shelf Life – how many impressions are made by your mix?
Creating higher levels of awareness, is a function of coverage, readership
(viewership) and shelf life (impressions).
Are you overinvested in Direct Mail and Internet? These are two items that
rank very low in coverage, readership (viewership) and shelf life (impressions).
90% to 95% of all direct mail is never opened or viewed; the same goes for
email blitzes. Direct Mail and Internet provide little or no shelf life.
Ken Dooley, President & CEO
Chester County Life
484-356-5765
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